Many Americans have spent the pandemic getting high, and that could help one fledgling business get off the ground.
As states across the country imposed stay-at-home rules starting in March, cannabis use hit an all-time high, according to a survey of 2,500 consumers conducted by Cowen & Co. Sales of cannabis products also surged, with average store revenue up as much as 130% in March compared with January at more than 1,300 stores using cannabis e-commerce platform Jane Technologies.
That increase in demand aligns with what Jeff Houkal, 42, has heard from various companies in the retail cannabis industry — and, as a business owner, he's trying to capitalize. Houkal's business, Xymetric, makes an unbreakable bong used for smoking marijuana called the Invincibowl.
When his home state of California issued stay-at-home orders in mid-March, Houkal was less than one year into his business and had only been selling products for a few months. As a result, Houkal had to navigate several months of entrepreneurship in one of the most difficult periods, ever, for small businesses.
Historically about 20% of small businesses fail within their first year. The effects of the coronavirus make the odds worse: One survey estimates that nearly 7.5 million small businesses are at risk of closing permanently as a result of the pandemic. On top of all that, the U.S. economy is officially in a recession.
"It has been scary because you don't know how quickly the economy will recover, and I had to make a pretty sizable investment to get these products made," says Houkal. "But the feedback I've gotten from my associates and partners is that sales have been picking up and are positive, so that's been a big relief on my part."
Like many entrepreneurs, Houkal stumbled into his business idea because of a problem he encountered firsthand. In 2019, his wife Gloria broke the couple's third marijuana bowl in a matter of weeks, and Houkal had a simple question: "Why are these things all made of glass?"
When Houkal couldn't find any suitable nonglass substitutes, he put his degree in engineering to good use and created a shatterproof bong made of aluminum and stainless steel. "I engineered the Invincibowl as a solution to our problem of breakage," he says, laughing.
Video by Jason Armesto
The concept of taking his prototype and launching an actual business quickly became Houkal's focus, though he was already busy. He became a CEO while still working full time as a mechanical engineer, doing part-time engineering consulting work, and working for years in the entertainment industry in Los Angeles, most recently in production.
After finding a manufacturing facility in China to make the Invincibowl, Houkal spent the latter half of 2019 building a website and finding a distributor to sell the products in the U.S. and Canada. By December, the first batch had arrived in California, "and since then, we've been selling them quite rapidly," Houkal says. The Invincibowl retails for $30 and replacement parts range from $2.50 to $12.
Whether the pandemic has been good for business is tough for Houkal to determine, since the company had only begun selling a couple months before. The company has seen increased demand: "Our sales have been going up, but we've also been gaining traction," he notes. "Is it causality? Maybe?"
By April, Xymetric had completely sold out of its entire first batch of Invincibowls. But like many other entrepreneurs, Houkal felt the impact of the coronavirus pandemic on his business.
Even as the rest of the country was keen to get high, Houkal was awaiting the second shipment of 5,000 Invincibowls. This new batch offers a matte finish, additional features, and new packaging. "We would have liked to place the order probably a month before we did," Houkal says, but the manufacturing process was delayed as a result of shutdown measures in China. "Everything grinded to a halt, and February and March were terrible times to get anything done."
Other small businesses rushed to apply for the Paycheck Protection Program loans, but Houkal says he didn't believe he was eligible since his company has three partners and no employees. Instead, he spent much of the pandemic working on other aspects of the business.
"I've been talking with suppliers, we're working on new packaging, and talking with new retail locations," Houkal says. Xymetric sells Invincibowls directly to consumers on its website and also works with a distributor so they can be sold in 10 to 20 retail locations throughout the U.S. and in Canada.
Video by Jason Armesto
Once the new shipment of Invincibowls arrived in the springtime, Houkal says that Xymetric launched an online advertising campaign it had previously put on pause. One benefit of the turmoil in recent months is that advertising rates became more affordable, and Houkal says companies have been eager to get business started again.
The company recently launched a campaign to donate a percentage of sales to charities, with a particular focus on environmental causes, Houkal says, adding that the downtime during stay-at-home measures helped get that initiative off the ground faster. Right now, the company is donating 5% of all web sales to the American Civil Liberties Union and it previously donated to UNICEF.
Still, uncertainty lingers as a result of the economic recession. Houkal worries about the potential ripple effect on the recreational marijuana industry with millions of Americans unemployed. Overall, though, he tends to be optimistic and have a positive outlook: "I think we as a country will be stronger for having gone through this."
Beyond the economy recovery, Houkal's business of indestructible products faces a pretty significant hurdle: How do you keep customers coming back for more? "Once you buy one, you won't have to buy one again, but that's kind of the point," he says.
While the company will rely on a steady stream of business from replacement parts, like a mesh smoking screen that fits with any Invincibowl, Houkal is working on more cannabis-related products. He's been impressed by the loyalty of customers whom he expects will become repeat buyers. Up next? The Invincipole, which is designed to replace the stem piece, traditionally made of glass, that fits into a water bong. It should be ready for customers in about a month.
Video by Mariam Abdallah
As more states legalize recreational marijuana, business will benefit. And Houkal doesn't intend to stop innovating. "My long, long-term goal is to build out the next several products related to cannabis accessories, and get those on the market," he says.
Eventually, Houkal wants to expand Xymetric so that some of the other inventions he's been toying around with for several years can go from concept to product development — and even develop ideas from other people through an accelerator type of program.
"That would be my happy place if I could make it happen," he says. "It's fun. At the end of the day, it boils down to creativity."
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