Being on the cutting edge of a new industry is tough. Just ask Cynthia Salarizadeh and Tracey Mason. In 2018, the pair teamed up to launch House of Saka, a brand of cannabis-infused luxury products, including cannabis-infused wine, which is created with Napa Valley grapes and a proprietary blend of CBD and THC. Producing a scientifically complex product in a budding industry with ever-changing rules and regulations, Salarizadeh and Mason had their work cut out for them. But their combined experience, adaptability, and mission to demystify cannabis for new users guided them to success.
AdvertisementADVERTISEMENT
"There's a lot of curiosity around cannabis, but it's held back by fear or even the stigma of weed being this 'Cheech & Chong, giant joint' kind of thing," Mason tells Refinery29. Because the cannabis elements in House of Saka wines are so bio-available, drinkers feel the effect within five to 15 minutes, just like they would with normal alcohol. That means you don't have to understand the lingo of ounces or milligrams that's so often involved in buying and using marijuana in other forms in order to give cannabis a go. "You can have a couple of milligrams via a couple of ounces of House of Saka, and you'll feel those effects. It's not as though you're taking an edible and you're feeling those effects two hours later and when you start to feel them, you don't want to feel that way," Mason explains. "You can monitor and understand the effects with consistent and safe predictability that other formats of cannabis simply don't offer. It's the absolute best way to learn about cannabis, specifically THC, and how it affects you."
In this month's edition of Talking Shop, Salarizadeh and Mason give us all the details about how they came to develop such an innovative product and ultimately get it out to market. From the branding concept to the very specific way cannabis products must be advertised, these small business owners detail the various step and unique challenges they've taken on since launching House of Saka.
Refinery29: Walk us through the process of launching House of Saka.
Cynthia Salarizadeh: I was finishing school about ten years ago, and while I was there, I was studying an ancient tribe in central Asia called the Scythians. The Scythians used wine during their rituals. This particular group gave rise to the mythological Amazonian women, so the Wonder Women are technically Scythians. The Persian term for Scythian is Saka. The Scythians were an Iranian group, and I happen to be Persian so I always said that if I had a brand, I would name it Saka because, in my head, it stands for powerful women.
When I started looking into cannabis and taking it seriously as a career move, I was doing research on everything — industrial hemp, cannabis and its medicinal properties — and I kept coming across with theme of cannabis-infused wine. I always thought that might be something I would want to be involved with as a brand. As proposition 64 started to unfold, I was doing the PR for a group called Ebbu. Ebbu was acquired by Canopy Growth for almost $500 million, and they were the first to bring to market the water-soluble infusion that makes cannabis infusions possible. I knew, in the back of my head, everything was coming together. The pieces were falling into place. About three years after I initially thought of the original concept, I started to try to pull it together. So I went out to find the perfect business partner and CEO to help bring the actual concept and the brand to life, and that's when, in my search, I was introduced to Tracey by the head of the executive wine program at Sonoma State University. She wound up being a perfect fit, and we decided to launch this luxury brand together.
Tracey Mason: So Cynthia and I came together. She obviously had a tremendous background in the cannabis industry, and I come from nearly 30 years in the wine and spirits industry, largely in more high-level marketing and innovation roles, so I was used to taking on new challenges. My career, at the time, had essentially been about creating new products in the wine and spirits space. Cynthia developed this incredibly beautiful concept with a great, authentic story around female warriors, but we didn't know how to do really anything else.
The first thing we did was decide where our provenance would be, and we felt drawn to Napa Valley. Given my background and our COO's background in the wine space, Napa Valley, to us, is the premier wine-growing region of the world so we wanted to anchor our brand and our company there. We are now the first and only cannabis-infused beverage made from Napa Valley wine. When we first began sourcing the wine, we had to navigate an incredible amount of difficult, and in some instances, nonsensical regulations to figure out how to put this product together. What we wound up doing, through our contacts, was getting some incredibly good Napa Valley Rosé of Pinot Noir. This was our first release. We removed the alcohol, and then we worked to build up those certain flavor and aroma compounds that are lost when you remove the alcohol. Then, we used a nano-emulsion to infuse it with a proprietary blend of CBD and THC.
CS: We are being very literal about having to figure out how to create this product because nothing existed to do it. There were no manufacturing facilities that could legally bottle our products and the distribution networks couldn't handle the weight of our cases, so it was a really unique product to bring to market. It's a very challenging supply chain to develop, but with the expertise of Tracy and our other business partner, Sue Buchorski, we were able to put together something truly incredible up against the worst circumstances. It's been challenging, but pretty impressive, and a lot of it has to do with what Tracy has done.
Cynthia Salarizadeh: I was finishing school about ten years ago, and while I was there, I was studying an ancient tribe in central Asia called the Scythians. The Scythians used wine during their rituals. This particular group gave rise to the mythological Amazonian women, so the Wonder Women are technically Scythians. The Persian term for Scythian is Saka. The Scythians were an Iranian group, and I happen to be Persian so I always said that if I had a brand, I would name it Saka because, in my head, it stands for powerful women.
When I started looking into cannabis and taking it seriously as a career move, I was doing research on everything — industrial hemp, cannabis and its medicinal properties — and I kept coming across with theme of cannabis-infused wine. I always thought that might be something I would want to be involved with as a brand. As proposition 64 started to unfold, I was doing the PR for a group called Ebbu. Ebbu was acquired by Canopy Growth for almost $500 million, and they were the first to bring to market the water-soluble infusion that makes cannabis infusions possible. I knew, in the back of my head, everything was coming together. The pieces were falling into place. About three years after I initially thought of the original concept, I started to try to pull it together. So I went out to find the perfect business partner and CEO to help bring the actual concept and the brand to life, and that's when, in my search, I was introduced to Tracey by the head of the executive wine program at Sonoma State University. She wound up being a perfect fit, and we decided to launch this luxury brand together.
Tracey Mason: So Cynthia and I came together. She obviously had a tremendous background in the cannabis industry, and I come from nearly 30 years in the wine and spirits industry, largely in more high-level marketing and innovation roles, so I was used to taking on new challenges. My career, at the time, had essentially been about creating new products in the wine and spirits space. Cynthia developed this incredibly beautiful concept with a great, authentic story around female warriors, but we didn't know how to do really anything else.
The first thing we did was decide where our provenance would be, and we felt drawn to Napa Valley. Given my background and our COO's background in the wine space, Napa Valley, to us, is the premier wine-growing region of the world so we wanted to anchor our brand and our company there. We are now the first and only cannabis-infused beverage made from Napa Valley wine. When we first began sourcing the wine, we had to navigate an incredible amount of difficult, and in some instances, nonsensical regulations to figure out how to put this product together. What we wound up doing, through our contacts, was getting some incredibly good Napa Valley Rosé of Pinot Noir. This was our first release. We removed the alcohol, and then we worked to build up those certain flavor and aroma compounds that are lost when you remove the alcohol. Then, we used a nano-emulsion to infuse it with a proprietary blend of CBD and THC.
CS: We are being very literal about having to figure out how to create this product because nothing existed to do it. There were no manufacturing facilities that could legally bottle our products and the distribution networks couldn't handle the weight of our cases, so it was a really unique product to bring to market. It's a very challenging supply chain to develop, but with the expertise of Tracy and our other business partner, Sue Buchorski, we were able to put together something truly incredible up against the worst circumstances. It's been challenging, but pretty impressive, and a lot of it has to do with what Tracy has done.
AdvertisementADVERTISEMENT
You mentioned that you had experience working in the cannabis industry and the wine and spirits industry, respectively. Can you share some more details about your background in business? Did you go to business school or have any kind of other formal training?
TM: I did some graduate business school, but I never finished. Again, I've been in super senior C-level roles in the alcohol and cannabis industries. Between myself, Sue, our COO, who spent 30 years in senior finance and operations roles, and Cynthia's experience in cannabis, I think that it's our experience that sets us apart from the competition. There's literally no other company in the infused beverage space that has the depth of understanding and knowledge of beverage and beverage development that we do.
CS: I did not take any classes — well, I think I took a business law class one time — but I don't really have an actual education in business. I did help found or co-found a couple of different companies that have been exited or been acquired. I currently am the cofounder of Green Market Media, which sits over top of the financial cannabis news site Green Market Report and a newswire distribution service for the cannabis industry called Axiswire that's the top PR firm in cannabis, and that was acquired about a year and a half, two years ago. So I do have experience in this business, but I was not formally trained.
TM: I did some graduate business school, but I never finished. Again, I've been in super senior C-level roles in the alcohol and cannabis industries. Between myself, Sue, our COO, who spent 30 years in senior finance and operations roles, and Cynthia's experience in cannabis, I think that it's our experience that sets us apart from the competition. There's literally no other company in the infused beverage space that has the depth of understanding and knowledge of beverage and beverage development that we do.
CS: I did not take any classes — well, I think I took a business law class one time — but I don't really have an actual education in business. I did help found or co-found a couple of different companies that have been exited or been acquired. I currently am the cofounder of Green Market Media, which sits over top of the financial cannabis news site Green Market Report and a newswire distribution service for the cannabis industry called Axiswire that's the top PR firm in cannabis, and that was acquired about a year and a half, two years ago. So I do have experience in this business, but I was not formally trained.
Have you received any funding for House of Saka? If so, what kind?
TM: When we began the company at the very end of 2018, we were just conceptualizing the company and putting it together. We bootstrapped largely for that first year. So that was between Cynthia and myself, and it was kind of a blood, sweat, and tears situation. Then in 2019, as Cynthia indicated, we had a concept that we couldn't really move forward with because we didn't have a compliant way of bottling it so we had to wait for the industry to catch up to us and our idea. Finally, in the summer of 2019, we found a co-packing partner that would allow us to get our wine in a bottle in a compliant way. Once we had that piece of the supply chain, which was the only missing piece at that point, that's when we did our first seed round.
We did a seed raise of $250,000 at the end of 2019, with the idea that we would use that money to get on shelves, which is exactly what we did. We actually used that money not only to get Saka Pink on shelves but also to develop and launch Saka White, which is a Napa Valley Chardonnay-based product, in 2020.
Our intention was to go right into our Series A raise this spring, but given the situation with COVID and the conservative nature with which people were deploying funds, we decided it would make more sense to do another seed raise and leverage that money to launch us into our Series A. So we raised another $250,000 and that's what we're working with right now. We are actively launching our Series A on September 1, which would be a $2 million raise against the $10 million pre-money valuation.
TM: When we began the company at the very end of 2018, we were just conceptualizing the company and putting it together. We bootstrapped largely for that first year. So that was between Cynthia and myself, and it was kind of a blood, sweat, and tears situation. Then in 2019, as Cynthia indicated, we had a concept that we couldn't really move forward with because we didn't have a compliant way of bottling it so we had to wait for the industry to catch up to us and our idea. Finally, in the summer of 2019, we found a co-packing partner that would allow us to get our wine in a bottle in a compliant way. Once we had that piece of the supply chain, which was the only missing piece at that point, that's when we did our first seed round.
We did a seed raise of $250,000 at the end of 2019, with the idea that we would use that money to get on shelves, which is exactly what we did. We actually used that money not only to get Saka Pink on shelves but also to develop and launch Saka White, which is a Napa Valley Chardonnay-based product, in 2020.
Our intention was to go right into our Series A raise this spring, but given the situation with COVID and the conservative nature with which people were deploying funds, we decided it would make more sense to do another seed raise and leverage that money to launch us into our Series A. So we raised another $250,000 and that's what we're working with right now. We are actively launching our Series A on September 1, which would be a $2 million raise against the $10 million pre-money valuation.
AdvertisementADVERTISEMENT
How many employees do you have? Do you have a cap of how many people you would like to employ?
TM: We want to keep it small. One of the benefits of our business model is that it doesn't have a lot of capital intensity built into it. Right now, there are three of us that sit on the executive team. There's myself, as CEO and co-founder; Cynthia, as founder and president; and Sue Buchorski, our COO and CFO. We have other people that work with us in both sales as well as accounting, and we have agencies to whom we're attached.
Right now, the idea would be to keep our core team very small as we get into our next raise. That's when we'll start hiring other key positions primarily in sales because it's really difficult to advertise cannabis products so we really need to have feet on the street to continue to bring our brand and our message directly to the retailer. For 2021, the most we've budgeted for is eight people, so we're keeping it really small and tight but really effective.
TM: We want to keep it small. One of the benefits of our business model is that it doesn't have a lot of capital intensity built into it. Right now, there are three of us that sit on the executive team. There's myself, as CEO and co-founder; Cynthia, as founder and president; and Sue Buchorski, our COO and CFO. We have other people that work with us in both sales as well as accounting, and we have agencies to whom we're attached.
Right now, the idea would be to keep our core team very small as we get into our next raise. That's when we'll start hiring other key positions primarily in sales because it's really difficult to advertise cannabis products so we really need to have feet on the street to continue to bring our brand and our message directly to the retailer. For 2021, the most we've budgeted for is eight people, so we're keeping it really small and tight but really effective.
There seems to be a varied understanding of what it actually means to be a small business. Based on your experience and vision for House of Saka, what is a small business to you?
TM: We're a small company that's doing a really big thing that we hope to grow, and it could actually then become not necessarily a small business. It could be acquired by a big business or become a big business in and of itself, so we're sort of straddling both sides of that fence because we know the way that modern businesses work.
We have so much equity that we can give to our employees. We want our employees not just to be employees, but to be owners in our company, and in order to do that, we have to keep it small. We have an understanding that when you have skin in the game, you worked that much harder.
TM: We're a small company that's doing a really big thing that we hope to grow, and it could actually then become not necessarily a small business. It could be acquired by a big business or become a big business in and of itself, so we're sort of straddling both sides of that fence because we know the way that modern businesses work.
We have so much equity that we can give to our employees. We want our employees not just to be employees, but to be owners in our company, and in order to do that, we have to keep it small. We have an understanding that when you have skin in the game, you worked that much harder.
AdvertisementADVERTISEMENT
You've already mentioned a few significant challenges you've faced in launching House of Saka, from finding a packaging partner to the restrictions of advertising cannabis products. What would you say has been your biggest business challenge so far?
TM: I'm trying to think of a business challenge we haven't faced because, as Cynthia indicated, we have an extremely complicated supply chain that has a lot of moving pieces, and we're trying to be very, very compliant in what we do. There are issues around regulation. There are tremendous issues around distribution. We've had major issues with production, and again because we're sort of building this plane as we're flying it, we've had some issues with standard operating procedures being followed in the right way and making sure that our partners are adhering to our quality standards.
Then, on the retail side: it's one thing to sell a product, and it's another thing to make sure that you're pulling off shelves. We've been a little compromised in that sense because most people aren't leaving their houses right now so we've really focused on delivery platforms to get the word out. That's become our number one sales channel by far.
TM: I'm trying to think of a business challenge we haven't faced because, as Cynthia indicated, we have an extremely complicated supply chain that has a lot of moving pieces, and we're trying to be very, very compliant in what we do. There are issues around regulation. There are tremendous issues around distribution. We've had major issues with production, and again because we're sort of building this plane as we're flying it, we've had some issues with standard operating procedures being followed in the right way and making sure that our partners are adhering to our quality standards.
Then, on the retail side: it's one thing to sell a product, and it's another thing to make sure that you're pulling off shelves. We've been a little compromised in that sense because most people aren't leaving their houses right now so we've really focused on delivery platforms to get the word out. That's become our number one sales channel by far.
Well, that's certainly a lot to overcome and figure out. On the flip side, what would you say has been your biggest business win?
TM: Truthfully — and I don't mean to sound kind of "woo woo" about this — but I think every day is a win because of all of the barriers against which we have come and the way that we've been able to get over them and be nimble and make things work despite very, very complicated and difficult circumstances. To deliver a product that is, I would argue, at least in California, the best known infused beverage on the market and certainly has set the standard for quality and branding, to have that done, to launch two beautiful, award-winning products with very little seed funding and do it in the manner that has kept everything in line with the luxury positioning that we wanted to achieve, it's pretty astounding.
Despite the challenges, the reason we get up and comb our hair in the morning is because we know that we can overcome anything. It can be a little draining at times, but I think being in a startup, in general, isn't for the faint of heart. Being in a startup in the cannabis space, you have to have a really, really strong will and a lot of determination. Truthfully, most people could not do what we do every day. It's really hard.
CS: It's just so challenging every single day. You have to pivot and be flexible. Another huge win for us, I would say, is our branding and our marketing. We just seemed to nail it with that, especially in our industry. But, I agree, I think our main win is our ability to pivot and our ever-evolving skills because of the industry. Something changes every single day, like, there'll be new laws all the time. You have to just roll with the punches and adapt.
TM: Truthfully — and I don't mean to sound kind of "woo woo" about this — but I think every day is a win because of all of the barriers against which we have come and the way that we've been able to get over them and be nimble and make things work despite very, very complicated and difficult circumstances. To deliver a product that is, I would argue, at least in California, the best known infused beverage on the market and certainly has set the standard for quality and branding, to have that done, to launch two beautiful, award-winning products with very little seed funding and do it in the manner that has kept everything in line with the luxury positioning that we wanted to achieve, it's pretty astounding.
Despite the challenges, the reason we get up and comb our hair in the morning is because we know that we can overcome anything. It can be a little draining at times, but I think being in a startup, in general, isn't for the faint of heart. Being in a startup in the cannabis space, you have to have a really, really strong will and a lot of determination. Truthfully, most people could not do what we do every day. It's really hard.
CS: It's just so challenging every single day. You have to pivot and be flexible. Another huge win for us, I would say, is our branding and our marketing. We just seemed to nail it with that, especially in our industry. But, I agree, I think our main win is our ability to pivot and our ever-evolving skills because of the industry. Something changes every single day, like, there'll be new laws all the time. You have to just roll with the punches and adapt.
AdvertisementADVERTISEMENT
What is your ultimate goal for House of Saka?
TM: We want to be the best selling, best known cannabis-infused beverage in the world. But, it's not just about the beverages, it's about the whole brand and the other products that come out underneath House of Saka. Calling it House of Saka was by design, because we know we want to create a whole portfolio of products that marry to infused luxury, which is our tagline.
We want to create an incredible brand and an incredible company, but also I think what's really magical about being in the space that we're in right now is being able to define the culture of a company. It's not just what we do. Obviously our products will be our products and we'll do them in the best possible way, but it's also creating a culture that's supportive of women, that's supportive of minorities, that supportive of marginalized people in our society, and creating this kind of workspace that's beautiful. To have the ability to create that from the ground up is a blessing, but it's also what really drives us. It's about the product, but it's also about the culture that we alone can create in this space.
TM: We want to be the best selling, best known cannabis-infused beverage in the world. But, it's not just about the beverages, it's about the whole brand and the other products that come out underneath House of Saka. Calling it House of Saka was by design, because we know we want to create a whole portfolio of products that marry to infused luxury, which is our tagline.
We want to create an incredible brand and an incredible company, but also I think what's really magical about being in the space that we're in right now is being able to define the culture of a company. It's not just what we do. Obviously our products will be our products and we'll do them in the best possible way, but it's also creating a culture that's supportive of women, that's supportive of minorities, that supportive of marginalized people in our society, and creating this kind of workspace that's beautiful. To have the ability to create that from the ground up is a blessing, but it's also what really drives us. It's about the product, but it's also about the culture that we alone can create in this space.
This interview was edited for length and clarity.
Refinery29 in no way encourages illegal activity and would like to remind its readers that marijuana usage continues to be an offense under Federal Law, regardless of state marijuana laws.
In Refinery29's new Talking Shop series, we're chatting with owners of up-and-coming small businesses about their experiences launching, the big challenges and wins they've faced, and of course, their products and services. Discover new spots to patronize, while getting an intimate look at what it takes to run a small business in today's economy. Do you run a small business or do you want to recommend a small business you'd like to see featured on Talking Shop? Tell us more about it here.