Exclusive Interview with Kiva Confections Co-Founder Kristi Palmer
Kiva Confections is a California edibles brand with a growing presence in the United States. Co-Founder Kristi Palmer last spoke with New Cannabis Ventures in 2019. Since then, the company has continued to fuel its expansion with innovation and a scalable model. Palmer checked in to share updates on the company’s market presence, brand portfolio and plans for the future. The audio of the entire conversation is available at the end of this written summary.
The People of Kiva
Palmer and her husband Scott Palmer launched Kiva together. Now, the company has a team of approximately 350 people. Working with that passionate and driven team has become Palmer’s favorite thing about her job.
Since 2019, Kiva has added a couple of important people to its leadership team. Deepa Shenoy joined the company to head up innovation and R&D, bringing experience in pharmaceuticals and wellness products. Jason Siegel joined the team as VP of Information Systems; information systems have helped to keep the company competitive and lean, according to Palmer.
Kiva in California
The company serves all four corners of the California market through its full-service distribution company: Kiva Sales & Service, according to Palmer. The distribution company works with Kiva’s products, as well as other brands and operators in the space.
California is an ultra-competitive cannabis market with licensed operators vying for market share among themselves and competing against unlicensed operators. Palmer thinks that the state is making progress against the illicit market. She considers quality still possible in the illicit space but not equally across all product form factors. If a consumer loses their contact in the unlicensed market, they may find it easier to migrate to the legal market.
A Growing U.S. Footprint
In addition to California, Kiva has products in Arizona, Illinois, Michigan, Nevada, Hawaii, Ohio and Oklahoma. It is also launching in Massachusetts in September. Palmer sees a lot of opportunity in Massachusetts. The market is established, but she anticipates that there is plenty of room for brand development and raising the bar on product quality.
Kiva recently reconfigured its teams. The marketing and out-of-state expansion teams are now the growth team. This team focuses on expanding the business and making it more efficient. Kiva will be looking to support its growth with new products and introducing more of its existing product portfolio to states beyond California.
East Coast states like New York and New Jersey are of interest to the Kiva team. Florida and Canada are also on the company’s radar, but Palmer acknowledges that regulations around product packaging in those markets present a challenge. Requirements for white or single-color packaging, warning labels and potency caps will require a different approach to promoting products than in markets like California.
Kiva’s Brands
The Kiva brand portfolio includes Kiva chocolate bars, Camino Gummies, Petra Mints and Terra Bites. The Lost Farm product line is the most recent addition to the brand family. The company initially launched gummies under the Lost Farm brand and then fruit chews. The products in this line are vegan, live resin strain-specific and have 10 milligrams of THC per piece. Lost Farms targets the experienced consumer, a segment of the market the company has not gone after in the past.
The company plans to launch some product line extensions before the end of the year, and it will be exploring new product formats for next year.
Fundraising Approach
Kiva completed its Series B earlier this year, and the company has fuel in the tank, according to Palmer. It will be investing in making its innovation pipeline more efficient, hiring and out-of-state expansion.
The company has been fortunate to be in the position to be picky about its investors, according to Palmer. Kiva has focused on finding investors that are philosophically aligned. When it comes to raising more capital, Palmer has found it is always easier when a company does not truly need the money.
Kiva’s Growth Outlook
The Kiva team is starting to have internal conversations about M&A. If the company is to leverage M&A for growth, it would be looking for a deal that brings different strengths to the table. While that conversation is in its early days, the company will be continuing to focus on the strategy that has worked for it: innovation and out-of-state expansion.
Kiva has realistic expectations for revenue growth, which will be driven by new products and that growth in more states. The team uses a multitude of metrics to understand its market position and growth outlook. For example, the team looks to its BDS Analytics ranking. The company looks at how its brands rank in California and each of its individual markets. While there are plenty of market dynamics outside of the team’s control that can affect brand traction, the team aims to take responsibility for its products’ results and adapt to those different market conditions.
COVID-19 and the uncertainty around the federal legalization details and timeline are two major challenges characterized by uncertainty. The pandemic has radically altered consumer behavior, and that behavior is shifting again. Federal legalization appears to be on the horizon, but exactly what form it will take and when is far from certain. While these issues present a challenge, Palmer sees the opportunity that comes with being in cannabis right now, as social acceptance grows and the market evolves.
To learn more, visit the Kiva Confections website. Listen to the entire interview:
