Cannacurio Podcast Episode 40 with Ryan Kiley of ePAC Flexible Packaging

ePAC Flexible Packaging Director of Market Development Ryan Kiley joins Ed Keating to talk about how his company's packaging solutions help small and mid-sized cannabis and hemp businesses as well as how his team uses the Cannabiz Media database to support their research, brand awareness, sales, and business development initiatives.

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Cannacurio Podcast Episode 40 Transcript

‍Ed Keating:

This is the Cannacurio Podcast by Cannabiz Media - your source for cannabis and hemp license news, directly from the data vault. On today's show, we're joined by Ryan Kylie, Director of Market Development at ePAC Flexible Packaging. Ryan, welcome.

Ryan Kiley:

Thanks, Ed. Thanks for having me.

Ed Keating:

Absolutely. As we've prepared for this podcast, I've gotten to know a little bit about you and that your background is kind of unique. You're a software engineer from RIT, and then you went to work for IBM. Is that kind of a normal career track into the packaging industry?

Ryan Kiley:

Well, I don't know what a normal career track is these days. Did I read correctly, that your undergrad was in Russian studies?

Ed Keating:

It was, yeah. Yeah. Russian studies major.

Ryan Kiley:

All right. So, which one of us is more likely to be where we are right now?

Ed Keating:

That's a great question. Absolutely. Absolutely. There weren't a lot of Russian jobs in the 80s, so here I am in the cannabis.

Ryan Kiley:

Oh, well sure there were, but... My track, it's typical, right? I went from writing software to selling software, to marketing software as my software development skills became less and less relevant over the years.

But now, I found myself the last 13 years, trying to create additional value in a company's core product. At ePAC Flexibles, we make pouches. Right? It's not a secret. That's what we do. All right. But how can I add value to a customer relationship with ePAC by applying software and services and advanced technologies?

Ed Keating:

Yeah. Yeah. Excellent. Well, no, that makes a lot of sense. I've certainly learned about your business through this process as well. So, that's great.

In terms of the company, as you said, you make pouches and you also serve a lot of different markets. Could you tell us a little bit about that background and also how you guys wound up in the cannabis space?

Ryan Kiley:

All right. Well, so let me be fair to the business. We don't just make pouches. We make roll stock for companies who have their own form fill and seal machines and things along those lines. We make things that stand up, things that lay flat, things that have seals, things that have child resistant zippers, and all sorts of technology that goes around it.

How did we end up in it? It started in 2016. It actually started a couple years before that with some market research. But we saw that there was a severely underserved market, especially where small and medium businesses were looking for professional packaging, where small and medium businesses were looking to move out of farmer's markets and into retail or into online sale and needed a professional face on their product in order to pull that off.

We partnered with HP and created an all-digital flexible packaging company. So, we were born digital. We didn't graft digital onto a flexo or a traditional printing company. So, all of our processes and backend, the ERP, everything that's part of our company was born out of the need to produce things quickly and efficiently, but professionally.

That's the big deal, is these small and medium businesses weren't given the opportunity to put a professional face on their products.

Ed Keating:

Got it.

Ryan Kiley:

Now, your secondary question there was, how did we get into cannabis? Well, our first plant in 2016 was in Madison, Wisconsin, which was not a cannabis adjacent market, but our second plant in 2017 was in Boulder, Colorado.

Ed Keating:

Ah.

Ryan Kiley:

All right? So, it just came to pass that cannabis companies migrated to the value proposition that we offered. We can get you pouches, packaging in five to 15 days. People can change what their design is on a very regular basis. They can order to demand, which means you don't have to over-order and waste packaging. And most certainly, you don't have to wait 16 weeks for something to sit on a boat and in port and harbor somewhere, in order to make its way to your store. So, all those things just kind of came together, to speak to the cannabis industry in a very real way.

Ed Keating:

Oh, interesting. Your point about digital is pretty powerful. I came from a career, really in the publishing industry. For too long, people talked about, "Oh, we have to get digital. We have to get digital."

Some companies really did fight it or they didn't understand it. It was a hard transition. So being, as you said, sort of born digital, I think is definitely a big differentiator for any provider in sort of any industry now, but I could see how it could certainly work out in yours.

Ryan Kiley:

I'm with you. I've been in the printing industry for about 30 years, and I've seen the digital revolution happen several times.

Ed Keating:

Yeah. Yeah, yeah. Right.

Ryan Kiley:

In the transactional printing market, where you have statements and bills and policies and invoices, they've all been forced to be digital from the very beginning because every single one of them is different. But in the commercial printing market, that took a little bit longer to realize what the cost benefit, where the curves intersected, in order to make that a reality.

In the wide format market, that was also the same sort of thing. How can I pull that off? And now in packaging.

There are some advantages. I don't have to make 20,000 copies of one pouch. I can make 20,000 pouches, each of them being completely unique and individual. It doesn't cost me anything, because it's the exact same process, as we print these things and that's kind of why our connected packaging initiative was born.

We do more. We can do mosaic and interesting designs and all sorts of stuff with this variable data printing technology. But yeah, this notion of connected packaging and giving each individual pouch its own unique digital identity is only possible because again, we're born digital.

Ed Keating:

Awesome. Good. We'll get to there in a second. I want to talk a little bit more about the markets and how you see it. I mean, you cover a lot of markets. How does cannabis compare, in terms of growth rates versus other markets? Because whenever I go to conferences, everyone's talks about the CAGR of cannabis is crazy. It's outpacing everything else. I mean, do you guys see that? Because you're not just a cannabis only company, as you said before.

Ryan Kiley:

Yeah. It's our fastest growing segment by a long shot. We do pay attention to the market trends. So, we see things like flour and stuff that is most likely to be pouched, as opposed to beverages, which, hard to put that in a pouch. We see those trends, and we pay attention to them. We do snack foods. We do confections, and we do pet foods. There's so many other markets that we play in.

Cannabis, over the last 18 months, has been our fastest growing segment. Maybe that speaks to the fact that we've stood up plants in Kansas City and Northern and Southern California and Vancouver and Toronto.

So, we've put ourselves in a position to be successful with the small and growing companies, not just the MSOs, but the small companies that are trying to find their footing and give them the kind of packaging and service that they need.

Ed Keating:

That makes a lot of sense. Now, how public facing is cannabis is, as part of your company? I mean, after having done this podcast now for a couple years, you find that some companies will create like a captive brand or subsidiary or others that is their only brand. How does that fit for you on kind of a brand continuum?

Ryan Kiley:

Well, I mean, we have to play the game with the platforms that afford us the opportunity to advertise. I mean, for me, I just got back from MJBizCon where we sponsored the Grasslands after party. So, we're front and center at that. Yeah.

There was a Missouri innovators conference that was focused entirely on cannabis. And then I went to Toronto, which is only about a three hour drive for me, but that was the Lift conference, where we had a booth.

So, we're front and center with cannabis. We just have to play by the rules that our advertisers let us play by, and make sure we get the message out the best way we can.

Ed Keating:

Yeah. Digging into what makes you guys stand out, one thing that I've learned in talking to you and also with your background is that technology really is a differentiator here. I wonder if you could talk about a couple examples of how you guys do that and why your clients benefit.

Ryan Kiley:

Yeah. Well, it's really easy to just make a pouch and send it to a customer and then be done with it, but we care. Our why, here, we put it in all capitals, W-H-Y, why. The why of ePAC is to support small and medium businesses in the communities in which they and us serve.

If we just send you a pouch and hope for the best, well, then you're kind of on your own. We're not helping you grow necessarily. Maybe we gave you a beautiful pouch. Maybe we gave you an opportunity to move into retail, but I think... and maybe it's me, my little romantic heart here, but I think that we should care about what goes in the pouch. I think we could care about what a consumer experiences when they have the pouch in their hand.

That's kind of where my role comes in here at ePAC. Comes down to consumer engagement, anti-counterfeiting, profit protection, track and trace, and showing the efficacy of the ingredients of a particular product, and then maybe even protecting the product that's inside it. There's technologies that we're working with right now that will maintain humidity over the course of a product's lifetime. That can mean a lot to a high end flower organization.

Anyways, I think our responsibility is not just to the pretty graphics on the pouch, it's to how a consumer is going to experience what ends up coming out of it.

Ed Keating:

Yeah, absolutely. And one of the other ones, besides the anti-counterfeiting is, let's talk a little bit about something you shared with me before, how the barcode can really work. I think you said, in one square centimeter, a lot can happen. So maybe if we could show that, because I think it's very powerful.

Ryan Kiley:

Okay. Well, thanks. That's a big part of what I do every day, is to help with this connected packaging world. So, let me explain that.

QR codes are one thing. There are RFID tags, and there are other technologies that will come over time, but the notion of giving a consumer access to more information beyond just the packaging graphics is what's critically important. Right? Look at this. This might be a quarter ounce of flower, but the pouch is so small, there's only so many things I can communicate by way of that graphic. 

So, we start first with consumer engagement. How do I do better with my customers? How do I get my customers to connect with me? How do I get them to follow me on social media, sign up for news and offers, and create a more loyal customer base? That's consumer engagement.

Number two is transparency and track and trace, which means I'm trying to tell customers a story about the origin of what they're about to consume, perhaps. That transcends everything. I mean, pet food, my whole conversation yesterday was about the ingredient origins of a pet food company.

And then lastly, is counterfeiting. More and more in cannabis, we're seeing people step on the good names of legitimate companies. Somebody turns an S to a Z and sells it right alongside them, in a bodega in Florida for $5 less. Suddenly, there's a huge, huge profit problem.

Well, one of the companies I've dealt with most recently had a $600,000 a year profit problem. Profit, not top line revenue, profit. Because somebody just ripped off their pouch and said, "Okay. Now I'm going to sit right next to you on the shelf and sell for less," with what is most decidedly, a substandard product.

Ed Keating:

Yep.

Ryan Kiley:

So, protecting a company's profits. And then, the other side of that, that is protecting a consumer's confidence in your product. If I know I'm going to go get a Fuel vape cartridge... And how many times did we hear the news stories about rogue vape cartridges in the early days? But if I know I'm going to go get Fuel, and I know Fuel and I trust Fuel, well, I can give a consumer confidence by creating a digital identity on the pouch itself, that confirms this is a Fuel vape cartridge.

All those things kind of come together. I know you asked for a little bit of a demonstration, so I'll share my screen here. Give you some of the good stuff and kind of show you how that all works.

Sorry. I can't get the... There we go. So if you and our viewers today would care to, just have a scan. Go ahead and scan that QR code. Now, you'll see it doesn't look like your grandmother's QR code. It's a little different. In fact, every single one, on every single pouch is unique.

Ed Keating:

Yeah.

Ryan Kiley:

Our partnership with a company called Scantrust is what makes this all possible. Scantrust is a worldwide software service, internet of things, you insert the buzzword here. But their biggest customers are ExxonMobil and Unilever, where they help protect products from counterfeiting. They help confirm the origin, when it comes to things like coffee and free trade chocolate and stuff like that.

All we've done, is taken a really powerful platform and we've brought it down and made it accessible to the small and medium business. If you were a granola manufacturer in your basement, there's no way you had the half million dollars that it would take ExxonMobil to execute on a platform like this. So, that's the beautiful thing. Again, it's our why, Ed. We're bringing something that a small and medium business wouldn't normally have access to, down and into their world.

If you were to have clicked on that, you would've seen a number of things, including a video story about a coffee manufacturer. You would've seen a track and trace proof, which shows that the coffee was produced in Mexico and roasted in Sacramento and distributed in Denver. And then you would've seen a little green dot that shows you where you are right now. So, that's the circular journey of that individual pouch.

I'm going to take it a step further, just because I'm on a roll here. And that is, what about the next dot on that map? What if the next dot on that map was where it was recycled or repurposed, or we did something environmentally responsible with the pouch that's in your hand and the brand could prove that it all happened?

Now I'm going to go out on a limb and say that two minutes ago, Ed clicked on this and that's probably... Oh, yep. Same thing we had the other day.

Ed Keating:

Right.

Ryan Kiley:

But I can, with my analytics platform on the back end of this, get a lot of information about the people who scan. Now, it doesn't matter exactly where Ed is. But what matters is, perhaps... Let me back out a step. What might matter is the distribution of your customers.

Ed Keating:

Yeah.

Ryan Kiley:

Something like this would inform... if it was my company, it would inform my marketing spend. It would inform what I do for my online ad buys. I might be putting up billboards in certain spaces, but something like this could tell me where customers are most likely to enjoy my product.

Ed Keating:

That's great. I mean, I was going to say, going back to your point before about small, medium businesses, none of them could, one build this on their own or two it would be, I think a tough thing to go find.

For you guys to offer this solution to people who are growing coffee or cannabis or whatnot is a real differentiator for them. It's sort of like the benefit that you guys bring to the market can really, I would think, enable those customers to just do a better job of what they're trying to do and hopefully make more money and hire more people and all those good things.

Ryan Kiley:

Yeah. Everybody's on a continuum of some kind. So, there's always a next step that's a little better.

Ed Keating:

Yeah.

Ryan Kiley:

How do I get a little better? I think Mr. Burns on The Simpsons said, "I've got a lot of money, but I'd trade it all for a little more." How do I go one step further? For small businesses, there's not a ton of inherent marketing talent that they come to the table with, to start off.

Ed Keating:

Yeah.

Ryan Kiley:

I feel that a lot of small businesses start with passion and an idea. They start with a purpose. Some people want to save the whales. Some people want to rescue children from child trafficking rings in Tanzania. These are all purposes and these companies are born out of them, but it's not like somebody has a CMO title in many of the businesses that I talk to.

Ed Keating:

Yeah. Yeah.

Ryan Kiley:

The point is that we're here to help. I want to make this clear, that all the stuff that I just showed... and thanks for the opportunity to do that, but all the stuff that I just showed, you're not on your own. We're here to take you through it, to consult with you on what happens next and how to take the next step in the journey.

Ed Keating:

One of the other partner places that we sometimes see is helping clients deal with regulations. I know you said you're not the lawyer for your clients, but I know that the packaging rules and requirements, in probably every state, are different from every other state.

How do the rules and regulations come into play for ePAC, and how do you guys manage that? How does that play out for your clients?

Ryan Kiley:

I mean, fundamentally, the graphics are the responsibility of the client. We produce the graphics and the patches, but with that connected packaging solution I just showed you, we could do some pretty powerful things.

So if your state or province allows for the fact that a COA, a certificate of analysis... That applies everywhere. It applies to hemp, applies to cannabis. If a certificate of analysis can be communicated through a digital or an electronic means, then we can really work some magic.

You have one strain that's produced in three greenhouses, five times a year. You got a whole ton of COAs that end up resulting from that. You have to end up communicating them to your end user.

If you're in California, maybe you just send them to Metrc and that's all there is to it. But if you're in Massachusetts, you have to communicate that to your customer. And instead of putting a big old sticker on the back of your pouch, communicating the COA results, well, you can put a QR code on it.

If you had these two pouches that look identical... Let's just bring it down to brass tacks. If you had these two pouches, you could end up assigning... This is about the digital identity. You assign this pouch to this COA and this pouch to the other COA, after we've printed them and handed them to you. So it comes almost like it's at filling time or in your shop itself.

Ed Keating:

I see.

Ryan Kiley:

That could be an environmental message. We can reduce waste, if you happen to under-harvest in a particular area. Or you've got one strain across three greenhouses, across five harvests, you just make one package order and then assign the identity of the pouch to the right COA when it comes time.

Ed Keating:

Nice. Interesting.

Ryan Kiley:

It's a complicated story to tell. It's not complicated to execute. So, small and medium businesses can do this and do it well and effectively. We can teach them how.

Ed Keating:

Oh, that's great. Now, in terms of that market, one of the questions I ask on virtually every podcast, is just trying to get an idea of how people see the market, because we've got these sort of legacy markets out west or mature markets.

We've got California that still seems to be going through growing pains. You've got Michigan, that's cranking out licenses like crazy. You've got MSOs in some places, not in others, med markets, adult markets, both in some states. How do you look at the market?

New England is where we both are. The Northeast is where everybody's looking to. You're in New York. I'm in Connecticut. Who's going to license first for rec? I mean, how do you guys look at the world?

Ryan Kiley:

Right. Well, people are going to judge me when you said I'm from New York. I'm like a seven hour drive from New York City. I'm closer to Buffalo.

How do we look at the market? We look where there's an opportunity for small and medium businesses to grow.

I got to tell you that, COVID created a lot of opportunity for us. It created a lot of unemployed people, that turned out to be wonderful entrepreneurs. So, they started their own businesses. That's like the granola people and the chocolate bar people and the cannabis and hemp people. We look to find markets that are likely to have these young and upcoming entrepreneurs, that need a kind of service like we can provide.

In New England, we service New England, basically out of New Jersey, Philadelphia and Cleveland. But we've just stood up a new plant in Toronto, which gives us left and right coast capabilities in Canada. So, we have one in Vancouver. We have one in Toronto.

In the US, we've got 16 plants. We've stood up plants in London, in Poland, Austria's just been announced, in France in Lyon, in Ghana and Jakarta. All of these are ePAC locations. So, every single one of them, if you walk in, you will experience exactly the same thing. That's been our target, is to find areas of opportunity.

Kansas City is a plant that we've opened recently. That would serve the Missouri market and other surrounding areas that are experiencing extraordinary growth in license holder applications.

Ed Keating:

Absolutely. Yeah. Yeah.

Ryan Kiley:

Oklahoma. Oklahoma, we service out of our Austin location in Texas. But yeah, we find where the customers are pretty easily. And with our small, local kind of community-based focus, it resonates and these guys find us.

Ed Keating:

You touched on this a little bit before, but tell me a little bit about hemp. How does that come into play? Because does hemp really, for you guys, mean CBD, something that's already packaged down, as opposed to all the millions of other uses of hemp?

Ryan Kiley:

Hmm. Well, yeah. Obviously, it's just a product, as any other, if you're selling it as flower or otherwise, but I'm really interested. When I was in Missouri, at this innovators conference a couple of weeks ago, I was introduced with a gentleman who wants us to look at hemp-based packaging. How do we make a plastic alternative out of hemp in the first place? I'm not saying that it's technically feasible. I mean, we're in like week two of trying to figure it out, but I'm interested in it.

That's kind of the project sort of side of my life, is if we can figure out a way to protect a product because we care about what's in it. That's how we started talking about this, is it's got to have the barrier properties. It's got to have the child resistance. It's got to have all the things that it's got to have, but if we can do that with a hemp-based original product, then hey, why the hell not? Right?

Ed Keating:

Yeah, absolutely. Absolutely. No, that makes a lot of sense.

Ed Keating:

Switching it around a bit, I always like to ask, how does Cannabiz Media hopefully help you find these people? We know that license growth is still continuing to happen. It's kind of amazing, as we sit here and just watch new states come online and hemp grow, but how do we help you?

Ryan Kiley:

Well, our relationship is new, but fruitful so far, I can tell you. We got a pretty substantial license with Cannabiz Media. I distribute 95% of my licenses to sales reps.

Ed Keating:

Yep.

Ryan Kiley:

Sales reps use the database in order to find license providers, new licensees, and to learn more about the kind of companies that they're going to go, either cold call or call on, and give them something to talk about. When you start a conversation with, "Hey, congratulations on your new license," suddenly it's a warm call and not a cold call.

Ed Keating:

Yeah.

Ryan Kiley:

Sales reps are a big deal. But from my standpoint, the big benefit here is, I got 75,000 people I can market to. So, I do webinars and events and you name it. 

I use my personal license in Cannabiz Media in order to create some curated lists of individuals. Sometimes the messaging is more focused to a retailer or more are focused to a grower or whatever it is, but I want to get people interested in me so that when it comes time...

Okay? I'm a new cannabis company. Let's say I'm growing my own. I'm completely vertically focused. When it comes time to packaging, I know the name ePAC. I've got somebody that I can trust, to call and pull that off. That's how we've used it so far.

Ed Keating:

Well, that's good to hear. Those sound like great ways to use it. So, always glad to learn how people are doing this.

Jumping back to the market side, what other states are you looking at or what other regions? Because I didn't realize that you had, also international presence. What do you think is going to come up next, that is going to be a focus?

Ryan Kiley:

I mentioned Toronto, Kansas City, Portland. These are all publicly acknowledged new sites of ours. I think it's just more. What does more mean? I mean, we're in Miami, we're in Richmond. We're in Northern California, Southern California. We're in Colorado, we're in Austin. It's wherever the business takes us. I see that France, for example, might be one of our nearest term adult recreational use countries-

Ed Keating:

Yeah, we'll see.

Ryan Kiley:

... God willing. CBD though, in the UK, is huge. We just opened up a second plant in, it's called Leeds, England, outside of our Silverstone plant. So, we think that cannabis and hemp will... I think the next big frontier is Western Europe.

Ed Keating:

Excellent. Excellent. And then lastly, we talked a lot about technology today. Looking forward, what kind of technology do you see on the horizon or that you can share, that you think is going to be intriguing or helpful in this space?

Ryan Kiley:

Well, I mean, I really look forward to a time when we've got something like RFID chips that are recyclable. The biggest problem with RFID is that, first of all, they're expensive, compared to just printing a QR code on something. But the antennas and the internal technology and stuff makes the package end up being, basically unrecyclable.

Ed Keating:

Is it hard to get those chips too? I mean, just thinking about chip shortages, I don't know if it applies to those.

Ryan Kiley:

Well, not really, but it's a good point, that might come up in the future. We realize that we're a plastics company. We make stuff out of plastics. So, we're part of the problem, but we want to be part of the solution too.

So, there's a couple of initiatives, and I think technology is going to play a big part in this, that has to do with the end of life of the stuff that we buy every day. If you look in your cupboard or your freezer, you're going to see a lot of pouches. But what happens to those?

Proof has shown that 80% of the stuff you put in your curbside recycling bin ends up in a landfill anyways, even though you designated it as a plastic or as a recyclable, you put it in that thing. I think we can make a dent in that. 

We've partnered with companies. One of them is called Again Technologies, which is pretty awesome. They take plastics, exactly the kind that we use to produce our pouches and they turn them into wood replacement products. They basically melt them down and stick them through a Play-Doh Fun Factory, like extrude them and turn them into four by eight sheets of replacement plywood.

Ed Keating:

That's crazy.

Ryan Kiley:

They can also use a chemical decomposition process called pyrolysis. That's a little more expensive from an overall energy standpoint, but it decomposes plastic into its polymer and the monomers and the things that... It's basically turned back into oil, that you can then turn back into something else.

We're completely committed to helping retrieve and reuse and repurpose as much of the stuff that we create as humanly possible. And just to keep this in the cannabis space, we're looking to partner with individual dispensaries to help create loyalty programs, where there's a consumer incentive to bring that packaging back in, get a rebate for it. And then we get to do something awesome with it, that's not harmful to Mother Earth.

Ed Keating:

Well, that's great. That's where that tracking code can really be interesting, to watch it take that journey from your factory to their store, to the customer, back to the store.

Ryan Kiley:

They scan it before they put it in the recycle bin. Suddenly, that product has a circular life that a company can track. So, they can report back on it.

One of the cool things, Ed, is that more and more states are starting to get this producer responsibility sort of business laid out. So companies like mine, that make plastic stuff, might have some responsibility on down the line, or maybe the brands themselves may. But if we can start to prove that these products are being responsibly repurposed, well, that's a mitigating factor to what might end up being a penalty or a tax or some other kind of burden [crosstalk 00:33:55].

Ed Keating:

It's a packaging offset, as opposed to a carbon offset.

Ryan Kiley:

No. That's totally what it.

Ed Keating:

Excellent. Excellent. Well, Ryan, thank you so much for joining us today. It was really a pleasure to chat with you and learn more about ePAC.

Ryan Kiley:

Well, it was my pleasure too, Ed. Thanks, everybody that dials into the Cannacurio Podcast. I've absolutely enjoyed it since I started subscribing, just a couple of months ago.

Ed Keating:

Excellent. All right. Well, thank you viewers, for tuning into today's podcast. I'm your host Ed Keating. Stay tuned for more updates from the data vault.