November 3, 2025 • 55 mins
We explore how hemp-derived THC beverages are redefining adult drinking, why big brands hesitate while startups build, and how “vice wellness” turns ritual into wellness-driven status. Jeff Cantalupo of Listen Ventures shares what gets a VC to yes, how portfolios form, and where retail wins.
• consumer demand driving THC beverage mainstream adoption
• integration of life lessons into leadership and team communication
• news on lawsuits and AG letters shaping risk perception
• why incumbents buy innovation and how that opens a window for startups
• the vice wellness thesis and behavior shifts in adult beverages
• merchandising for outcomes and occasions, not alcohol types
• channels that matter now: DTC labs, C stores, grocery, delivery
• what VCs look for: team, brand acumen, omnichannel activation
• margin structure, capital efficiency, and unit economics at scale
• vertical versus asset light supply strategies and tradeoffs
• brands to watch and how true brands differ from products
• practical risk framing: stroke of the pen versus consumer pull
If you've enjoyed this episode, please drop us a like, a subscribe, a follow, a share. Drop a review on Apple Podcasts, Spotify, wherever you listen to your shows
--
High Spirits is brought to you by Vertosa and Wolf Meyer.
Your hosts are Ben Larson and AnnaRae Grabstein.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Jeff Cantalupo (00:00):
I'm very clear with all of our LPs that we have
made some investments that havestroke of the pen risk.
And whenever you're dealingwith stroke of the pen risk,
that's unclear, and and you knowthat it's likely going to be a
bumpy ride.
Ben Larson (00:19):
Hey everybody, welcome to episode 111, 111 of
High Spirits.
I'm Ben Larson, and with me asalways is my co-host Anna Ray
Grabstein.
Recording Tuesday, October28th, 2025, and we have a very
interesting show for you today.
We have our friend JeffKenalupo, the founder of Listen
(00:42):
Ventures, famous for the socurious concert or concert
conference that that launchedthis past year.
It was like a concert, it was alot of fun.
Uh, we're gonna dive intoeverything regarding the
consumer, hemp beverages, andvice wellness.
Curious about that one.
Anna Ray, let's get some vicewellness on the map.
AnnaRae Grabstein (01:04):
I know.
I I was thinking a lot aboutintegration recently, and people
talk a lot about integrationwhen it comes to psychedelics
and the wellness movement.
Ben Larson (01:15):
But I've been really, especially with how
popular it's become.
AnnaRae Grabstein (01:22):
Great, let's talk about it because I'm on a
kick of integration of thelessons that I'm learning in my
life outside of my work into mywork.
And just seeing all theseincredible connections about the
way that um just everything isso interrelated.
And the lessons that we learnas parents can sometimes be
(01:44):
incredible lessons that I canhelp the CEOs and like boards
that I'm working with sometimes.
So I'm just I'm just all aboutthe integration move right now.
Ben Larson (01:55):
I love it.
I love it.
Yeah, I listen to a lot ofmotivational like things on
Spotify, things that get megoing while I'm at the gym in
the morning.
And I occasionally fire themoff back to my wife.
And I always preface it withlike, yeah, I'm I know this is
so me.
I know I'm in like one of mymoods, but just listen to it.
It's it's like reallyinteresting.
And if you feel so inclined,maybe have Alistair listen to it
(02:17):
on the way to school.
And it works sometimes, butyeah, I love that we've often
referred to it at Vertosa ascross-pollination, like
encouraging our team to stayactive out in the world beyond
what we do and bring thatinformation back, bring those
insights back.
And that's actually what I'veloved about working in the
beverage space is like it's awhole new world for us to
(02:39):
explore and infer on like howthat might influence the
trajectory of cannabis and hemp.
AnnaRae Grabstein (02:44):
Yeah.
Well, so here's my two lessons,my integration lessons for the
week.
Ben Larson (02:49):
Yes.
AnnaRae Grabstein (02:50):
First one coming from Coach Rich, the
jujitsu coach, that myeight-year-old goes to jujitsu,
and I was uh sitting in andwatching a practice, and at the
end of the session, the coachsaid to everybody, Are you
trying to be perfect?
Don't because perfect is notreal.
(03:11):
He said, Be a little bit bettertoday than you were yesterday.
And it was just so clear andobvious and was just to the
reminder that I needed.
Ben Larson (03:20):
Man, I love that.
I yeah, right.
You need that coach.
AnnaRae Grabstein (03:24):
Yeah, don't try to be perfect because it's
just not real, but we want to bebetter every day.
And then the next day, throughmy son's school, we get all of
these updates from his thirdgrade teacher through an app,
the playground app.
It's like the social media ofthe classroom.
They often share the thingsthat they were teaching the kids
(03:44):
in the class so that then wecan have conversations with them
at home.
And the lesson was Did you knowthat people communicate their
feelings and attitudes?
7% with words, 38% with tone,and 55% with body language.
And it was all about teachingthe kids that they're
(04:04):
communicating with a lot morethan words.
And again, such an incrediblelesson.
I think that in particular,when I'm working with executive
teams, there's often so muchthat gets lost in communication,
uh, be it through tone, throughwritten communication, and uh
just a really great reminder.
(04:25):
So I'm all about integratingthese lessons that I'm learning
through my eight-year-old thiswork, uh, this week back into my
work with executives.
Ben Larson (04:34):
Yeah.
No, I love that.
It's uh especially in thisvirtual world, that the last
lesson, like it's really hard tobuild that connection when
you're not actually having thosein-person conversations.
And in the world of Slack, likeso much gets lost.
And you really have to beintentional about re-grounding
(04:55):
in that in that relationship andhaving that that face-to-face
opportunity because otherwiseyou can just diverge and like
you're not even recognizing it,right?
You're not even actuallycommunicating.
AnnaRae Grabstein (05:06):
Absolutely.
Should we jump into some news?
I know you've got stuff on yourmind.
Ben Larson (05:10):
Yeah, some juicy news out there uh recently.
Sorry, I can't help myself.
The MSO thought it'd be wise toto sue in Virginia toll wine,
DoorDash, uh, to the tune of $80million, uh, essentially for
(05:31):
unfair competition and and lostrevenue.
$80 million sounds like a lot,especially for a company losing
about $17 or $18 million aquarter.
AnnaRae Grabstein (05:41):
Yeah, juicy.
Ben Larson (05:42):
Sounds like a nice recovery effort.
AnnaRae Grabstein (05:43):
Yeah, they haven't had a profitable, uh,
they haven't had a profitablequarter.
They have been a public companyfor quite some time and have
never really entered the sphereof the tier one MSO group and
really looked at Virginia as ahuge opportunity.
And as a result of the Virginiamarket not coming to fruition,
(06:04):
I think the way that reallyanyone has wanted, they have
chosen to sue some behemoths inthe space.
It's it's a really bigsurprise.
It feels like they are a littlebit of a of a David up against
some Goliaths.
Ben Larson (06:18):
Aren't they mid-lawsuit in Pennsylvania
against some hemp operators aswell?
Like, I I did that ever getsettled.
It just seems like a totalwaste of money for them,
especially going up againstthese other organizations.
You're just gonna piss away,you know, money.
And to what end?
Like they're putting a targeton their back?
Are they trying to be the hero?
(06:39):
I just don't understand the endgame for Jushi here.
AnnaRae Grabstein (06:43):
Yeah, I more think about those that are
getting sued, the DoorDash andTotal Wine and and that cohort
is that I'm just really havebeen optimistic and hopeful
about these players' entranceinto the cannabinoid category.
And and I know that they takerisk really seriously and um are
(07:04):
doing everything as compliantlyas they can in these markets.
And I know that from my ownexperience working with
companies that work with them.
And I just don't want them toget scared away and to think
that this ends up being too muchof a pain in the butt.
And and the the consumers thatthey're targeting with these new
products aren't worth itbecause I think that they are.
(07:25):
And um, and I know that we'regonna be talking about that
today.
Ben Larson (07:28):
Here's the hot tip you aren't scaring anyone away.
Everyone has seen theopportunity, they know how big
the future is for THC beverages.
You aren't gonna scare theseguys away.
So now you've asked for thehorns, and I don't speak for
these companies, but I knowbetter than to sue them when
they want something.
And so now you've put a targeton your back, and they're gonna
(07:51):
be more involved and moreinvested in making sure that
they not only win this, but theyget the last laugh.
So good luck.
I don't know.
I I I just I I think it's afool's errand.
It just shows like a lack oflike understanding and research
as to what's actually happeningin in the in the hemp beverage
movement.
AnnaRae Grabstein (08:10):
And what other important news are you
following in the world of hemppolicy and regulation?
Ben Larson (08:16):
Oh, you know, it's just been very quiet on the
federal front, nothing going onduring a government shutdown.
What hit the headlines thateveryone is seeing is that the
AGs pulled together the thestate's attorneys general and
penned a letter very similar tothe one that they did last year
and sent it to the Hill.
And basically that letter wastalking about actually a lot of
(08:38):
reasonable things.
We need more regulation, weneed consumer safety, yada yada
yada.
And in the very last line, theyput, and we need to shut down
the intoxicating hem.
They kind of snuck it in there.
We know from offices that we'vespoken to that they came in
really hot and heavy, that thisneeds to be signed, that there's
a 12 p.m.
deadline, and so people werejust signing it and sending it.
(09:00):
And so you have AGs from likeMinnesota that basically birthed
this whole movement signing onto this letter.
From what we've heard is thatthe letter isn't holding as much
water as other letters that arebeing penned by people that
actually contribute funds to theHill.
It's interesting, right?
You know, it's like obviouslythe attorneys general have a lot
(09:20):
of sway, and people generallydo take their opinion into
consideration.
But what else do you expectfrom a bunch of lawyers and
former cops?
You know, it's like, of course,they're gonna be opposed to
this.
Of course, they're gonna wantto continue the enforcement and
the drug war that they've beenbacking for the last century.
AnnaRae Grabstein (09:39):
Yeah.
Ongoing investment inprohibition definitely fuels the
economy of incarceration andcriminalization, which funds the
Department of Justice's budgetoverall.
Ben Larson (09:52):
So I hear I just I just I mean, going how this
relates to our last topic, likeI just don't think people
understand like how much peopleactually want specifically TAC
beverages, if not hemp as awhole in the mainstream
channels.
It's not just about the hempoperators anymore.
It is about the distributors,it is about the retailers, it's
(10:13):
about the consumer.
Like people want this productin this category on their
shelves, in their hands, andthey're gonna get it.
AnnaRae Grabstein (10:23):
I love it.
It's a perfect segue to bringon our guest.
So let's do that.
I'll cue them up.
Our guest today is uh JeffCantalupo.
He's the managing partner andfounder of Listen Ventures, a
venture capital group that backsconsumer-obsessed founders
building the next generation ofbrands.
Jeff's career began at theglobal ad agency, Leo Burnett,
(10:44):
where he helped shape householdnames like Marlboro and Pop
Tarts.
And in 2010, he founded ListenVentures, translating brand
building instincts into venturestrategy.
And today he sits on the boardsof Miss Grass, The Fresh
Factory, Black Buffalo, Fable,and Modern Pediatrics.
And he teaches startup brandingat Kellogg School of Management
(11:07):
at Northwestern.
So he's here today to talk withus about everything that he's
got going on in his head and acategory in hemp beverage that's
redefining how consumers thinkabout wellness, vice, and the
ritual of social drinking.
So, Jeff, welcome to HighSpirits.
Jeff Cantalupo (11:22):
Thank you, Anna Ray.
Thanks, Ben.
Good to be here.
Ben Larson (11:25):
Man, great to see you.
And I love seeing the postersthat you have on the wall behind
you for anyone watching video.
Like this is the same brandingthat we all got exposed to when
we went to the So Curiousconference in Chicago.
And, you know, just kudos toyou for like coming in to the
market with a brand new show.
You know, we we reflect on thefact that there's just so many
(11:48):
conferences.
How do you choose?
Like, what is new?
But this definitely felt new.
It felt fresh.
You walked in, it felt like youwere in a little supermarket.
There were shelves of all thesedifferent products.
And then you had the speakingstage and the audience
intermingled with the booths.
It was like a big horseshoearound the stage.
And it was just such an awesomeexperience where I felt that
(12:08):
everyone in the room waslistening to the talks.
They were having opportunitiesto socialize and then also see
what was happening at the peoplethat were displaying around the
periphery.
So incredibly well done.
What's on the wall behind youreminded me of what a great day
that was.
Jeff Cantalupo (12:25):
Thanks, Ben.
I appreciate it.
Quite honestly, we didn't knowwhat to expect.
We we just felt like there wasuh some missing conversation
around the category that wasbeing built as it pertains to
the consumer.
And so that was that was reallythe goal of putting on the
conference.
And we were overwhelmed by thethe response and the number of
people that we met and and therelationships we built from it.
So appreciate you both beingthere.
AnnaRae Grabstein (12:47):
Awesome.
Yeah, I will be back at thenext one uh if you guys have it.
So uh let's let's jump in.
I I loved learning that yourbackground was rooted in
storytelling, not spreadsheets,which is what I think of as the
traditional path into venturecapital.
And um, it's just a reminderthat great investing is is about
emotional intelligence as muchas financial analysis sometimes.
(13:11):
And um, I'd love for you tojust shed some light on your
story about making the leap fromworking in branding to
launching less inventures.
Jeff Cantalupo (13:20):
Yeah, it's it's a it's a great question.
My my untraditional path, AnnaRay, into the venture capital
world.
Happy to share a little bit ofit.
But um quite honestly, it wasit was paved through some really
unique experiences in theadvertising space.
So I spent a decade of mycareer at Leo Burnett out of
school.
Um, and I got very fortunate towork on some of the biggest
(13:43):
brands in the world.
Um, you know, Marlboro, PopTarts, uh, others.
I worked with Procter Gamble, Iworked with um DiAgio a little
bit.
And I fell in love with usingcreativity to build business.
That's really what the businessof an ad agency is.
Um, but then I got really luckyand I was asked to help the
(14:03):
agency build out a little bit ofa practice around innovation
rather than just advertising.
And so found myself sitting inyou know, strategy rooms with
the the big CPG companies,helping them think about for
Kellogg, for instance, like whatdoes breakfast look like in the
future and what brands might weneed to build?
And um, or Ultra, which is hey,we're in a declining industry
(14:25):
with cigarettes and tobacco.
Um, what else can we do basedon what we're good at as a
company?
And so um that experience, one,I fell in love with innovation.
It also opened my eyes to whatwas happening outside the walls
of big companies because ifyou're trying to help big
companies be innovative, you gotto understand what the
entrepreneurs are doing outsidetheir walls.
Um, and that was kind of thebridge to the early stage VC
(14:48):
ecosystem.
Um, I loved um thinking anddoing innovation work.
Um, but I also saw why bigcompanies end up having to buy
innovation more often than not.
Um, and and that was kind ofthe the the underpinnings for
why I started listening.
Ben Larson (15:02):
Well, let's let's dive into that.
Let's dive right in and justsee like, what is it that holds
big companies back frominnovation?
What do these innovativecompanies that we get to work
with like have to look forwardto?
And in working with those bigcompanies, like how has that
guided the advice that you giveto these founders once you're
engaged with them?
Like, how do you get them tothe point where there is a
(15:23):
liquidity event or anopportunity for them to get
snapped up?
Jeff Cantalupo (15:27):
There's a lot to unpack there, Ben.
I I think I think um, you know,it listen, let's be honest, big
companies have all theresources that that you would
want to be super innovative.
I think some of the challengesyou see are just more of an
organizational behavior umissue, right?
So they have all the money.
Yeah, I mean, they have theyhave all the money, they have
(15:49):
all the talent, they have allthe resources to do innovation.
Um, but things get in the ray,and whether that is, you know,
incentive design structure as itrelates to who should be
leading innovation and what whattheir goals are in their
career, or um whether it's thetrue innovators, Helena, like
you just mentioned, which is,you know, hey, to be truly
innovative, we're gonna have todisrupt our own cash cow, and I
(16:11):
can't get up in front of thepublic markets and tell people
that we're gonna we're gonnadeposition our current cash cow.
So a lot of those things playinto it.
I think some companies havedone innovation incredibly well.
Like, you know, Apple's thebiggest company in the world for
a reason because they haveinnovation built into their
culture.
Um, but a lot of others end uphaving to buy innovation.
Um, and so that's kind of whatsparked the idea for me, wanting
(16:34):
to go work with theentrepreneurs outside of these
big companies.
AnnaRae Grabstein (16:36):
I love that we are now talking about the
innovators' dilemma, uh, becauseI think that within the hemp
beverage space, there's a lot tounpack with that concept
because we are now seeing BeVALCcompanies um come into the
space.
And that certainly has to besomething that's on their mind
of both like cannibalizing theirexisting business, but also the
(17:00):
opposite of just accepting thereality that potentially their
existing business is declining,whether or not they choose to
prioritize hemp beverages ornot, so that maybe it can be
kind of an off an off-road.
Um, I'm curious of yourthoughts there of how the
innovators' dilemma is playinginto the ecosystem of alcohol
(17:22):
coming into hemp beverage today.
Jeff Cantalupo (17:24):
It's a great question.
Um, to be quite honest, one ofthe reasons we got so excited
about this market um as early aswe did was because it's it's
very unique in the sense thatwhenever you have a category
creation moment, you often don'thave the big guys sitting on
the sidelines.
They're often jumping in asquickly as possible.
(17:46):
But that's not what's takenplace over the last three or
four years of the development ofthe hemp beverage side of
business.
Um, and that's largely just dueto them being a little bit more
um maybe conservative andpatient as it relates to the
regulatory uncertainty.
And so it's kind of onch in ageneration, right?
You have as an entrepreneur,you have this window of
(18:08):
opportunity where the big guysaren't jumping in yet for you to
build real value prior to themgetting in.
I think some of them startingto make more larger moves into
the space, I think makes a tonof sense.
But I also think it paves theway for what I like to call
phase one of what we'll see inthis category, which is there it
gave enough time to enoughentrepreneurs to get large
(18:30):
enough where they can't just bedismissed.
So when the big guys do decidethat they want to get into the
category, I do think you'll seesome movement towards buying
innovation in this space versusjust jumping headfirst and
trying to build it themselves.
Ben Larson (18:45):
Yeah, I mean, in that time period, it's allowed
hundreds of brands, you know,some people estimate 500 or more
that have entered the space.
And I was talking to a founderrecently, and they were
remarking it's like, if it wasany other category, we shouldn't
have gotten to like two orthree million dollars in revenue
yet.
Like that's it would have justbeen such a hard slog,
especially with this muchcompetition.
(19:06):
And so being a venture fundmanager with so many investment
opportunities, how do you focuson where to place your money?
Like, what are you reallylooking for?
And and I know you have thisconsumer focus, but is that
something that you look for onthe front end, or is that
something you train into yourportfolio as after you've made
the bet?
Jeff Cantalupo (19:27):
Yeah, it's it's a great question, man.
I mean, if I give you a littlebit of maybe um kind of the
backdrop of why we got excited,that might be helpful.
So yeah, yeah, let's do it.
I'd say four, maybe four and ahalf, five years ago, we started
spending a lot of time tryingto get our arms wrapped around
the changing behavior withconsumers and alcohol.
(19:47):
And what we were looking tounderstand was like what what
was driving these shifts, howand what were they replacing
these moments with, what typesof products were they looking to
um and moving towards?
And we spent a lot of timemeeting with non-alcohol, not NA
brands, so NA wine, NA uh, NAliquor, etc., and a you know,
(20:13):
RTDs, um, and NA beer.
And um that led to us gettingdeeper into okay, well, what
else is out there?
What else could be serving someof these occasions?
And so we were very early tounderstanding what was happening
in Minnesota and some of thecreativity we're seeing from
entrepreneurs.
Um, and we just became prettybig believers that in some
(20:36):
occasions where NA might fit thebill, other occasions people
still might want somethingfeellable.
And you know, this is kind ofthe first time we've had an
ingredient other than alcohol beusable in formulations um for
beverage.
And it became super exciting asit related to the modality.
(20:59):
And so um we got we got prettyexcited about the movement and
spent a lot of time internallyand with some of the
entrepreneurs building in thespace, trying to get our arms
wrapped around how we mightapproach making investments in
the space, what we thought um,you know, portfolio construction
would look like um when this isall said and done and working
(21:20):
backwards almost, right?
Which is if you look at theDiAgios and the Anheuser Bushes
of the world and even the Ultrasand some of the tobacco
companies, right?
All of them build portfolios ofbrands, and that's how they
manage a category.
And I don't think that this isgonna be any different.
I think that this is on theverge of becoming a very large
category, and it's gonna bedetermined based on, hey, what
(21:44):
positionings do you want in yourportfolio construction?
How do you think about um whereyou might be able to win?
And what positionings do youthink that the strategics are
gonna want to have in theirportfolio?
And that's that's a little bitabout how we've constructed our
strategy.
AnnaRae Grabstein (21:59):
What I've heard you talk about is this
concept of a vice wellnessthesis that Listen has.
And so maybe within the contextof this portfolio construction
that you're talking about, youcould explain to us what the
vice wellness thesis is andpotentially even how it is
supported by the um investmentsin your portfolio that that you
(22:21):
can share about.
Jeff Cantalupo (22:22):
Yeah, I'm happy to.
And just to I'll start withsaying that the vice wellness
concept is is broader than thiscategory in particular.
What we're excited by, and youknow, it just it's kind of a fun
term.
Um, but it's we're we'reexcited by businesses that are
exhibiting kind of theritualistic and habitual
(22:43):
behaviors that are traditionallyoften associated with vice
companies or vice products andthe economic structure of vice.
But they're now being umleveraged through wellness
permission.
And that's kind of thevice-wellness articulation we
have internally at Listen.
And the reason we're excited bythat right now, and this is
(23:04):
across multiple differentcategories, is um it's very
rare, but it's driven kind of bythe super cycle that we're
seeing around consumer behavior.
And health and wellness supercycle, I think, is is real.
But what makes it superexciting is that the motivation
for it is driven by the types ofthings you ever want you always
want to see in consumer brandsthat are sticky, which is kind
(23:27):
of this motivation for statusand and vanity, quite frankly.
And those motivation structuresoften create incredible
backdrops for you to createmassive businesses.
There's a reason that alcohol,tobacco, gambling have
historically been some of thebest quote unquote fundamental
(23:47):
economic business structures.
Um, you know, super highloyalty, super good margin, um,
habitual in nature, ritualisticin nature, in some cases, even
addictive in nature.
Um, and those led to um, youknow, business models that
withstood good times, bad times,et cetera, um, and built some
(24:07):
of the biggest brands that weknow.
I think status shifting from,hey, how many beers did you
drink or how messed up did youget last night to, oh my gosh,
did I, you know, what was mysleep score?
Ben, we were even joking aboutthis earlier, but like, did I
get my eight hours, right?
I think, you know, people beingemboldened with tracking their
(24:29):
physiological responses to theirenvironment, I think is a
massive indicator of where thefuture of status goes.
And if wellness becomes statusdriving, um, I think vice
wellness will become massivecategories uh to invest against.
And so that's that's kind ofthe underpinning.
Within that, we think socialbeverage and kind of the future
of what we're seeing in hemp umuh lends itself to it.
(24:52):
Um a lot of people are makingthese choices for quote unquote
wellness decisions.
Um, but the modality ofbeverage and the ritualistic
nature of it, I think lendsitself to that structure.
AnnaRae Grabstein (25:03):
As a quick follow-up here, so you're really
like kind of opening up thiscan of worms on a whole lot of
different categories.
And and I think uh it's itsometimes has been, I've seen it
be historically complicated forVC funds to raise into
cannabinoid brands and companiesas well as other companies.
(25:25):
And it sounds like you arebuilding a bit of a diversified
uh portfolio strategy where youare investing in hemp, but but
likely other companies as wellthat fit this thesis.
And um, I'd love for you totalk about how you are
navigating the complexity ofinvesting in cannabinoids while
(25:46):
also investing in other thingsand how your LPs and and banks
or whoever it is that you'reworking with are kind of
supporting that that thesis aswell.
Jeff Cantalupo (25:55):
Yeah, it's a great question.
We have never been categoryinvestors.
We our our thesis at Listen andand what we do across all of
the funds we've ever raised andinvested um is articulated as
the following, which is we weback consumer obsessed
entrepreneurs building brands atthe tipping point of behavior
shifts.
And our job as a firm, and thereason I named it Listen, is to
(26:20):
understand where consumerbehavior is going and what
shifts we actually believe willenable new big brands to be
built.
And I think historically we'veseen this happen um within our
within our portfolio strategy.
We were very early to a thesisaround, you know, people
starting to prioritize mentalhealth.
And we invested in a brandcalled Calm back in 2012 that
(26:43):
kind of you know has has becomeone of the brands that helped
leave lead and accelerate thatshift.
And whenever you see behaviorshifts that large in culture,
there's always brands that arein and around helping to lead
them.
And so I'd say this is nevercategorical as it relates to our
LPs.
They they kind of believe inour approach to that.
(27:04):
We spend a lot of time atListen Anna talking to consumers
directly.
So we design our own researchstudies, we try to get into the
the you know the mindsets ofwhat is driving some of these
behavior shifts that we'rereading about or hearing about
um from a high-levelperspective, but we really try
to get into the minds of theconsumers to understand is this
(27:25):
sustained, right?
Is it a trend?
Or is this a true behaviorshift?
And if it is a shift, what arethe brands that we think might
help lead that shift?
Um, and that's a little bitmore about our thesis.
I think as it relates to thiscategory, um as I mentioned,
it's evolutionary, right?
I think changing behaviors uhthat people are having with
(27:46):
substances like alcohol or evenfood, right?
Like we've seen this movementin food where it's kind of
cleaner label, better for youingredients.
Um, and I think all of this isactually kind of against that
super cycle I was mentioningearlier.
Ben Larson (28:02):
I really love this.
The impact of both the THCbeverage movement happening at
the same time as the decline ofalcohol.
And I I say it like thatbecause I don't think it's
causal, I think it's justhappening at the same time.
I found myself pitching avision of the future to a
prominent retailer where I wasexplaining that alcohol becomes
(28:24):
one of many different adultbeverage kind of ingredients.
THC is a new one, and THC is anopportunity as a gateway, so to
speak, to really open our mindsabout what the adult beverage
landscape looks like in thefuture.
And I'm curious as to how youthink this movement is it long
lasting?
And do we imagine like liquorstores changing to adult
(28:47):
beverage stores and like havingall these different ingredients
to play with?
Like, what's that look like inthe future?
And does the branding change?
You you you talked about likepremium is premiumization, like
a lot of products today are arefeeling familiar, but they're
putting a different ingredientside of it.
But what you're saying, I'mthinking is like maybe the
branding has to change too ifwe're truly listening to
(29:08):
consumer and what they want.
It's not the old brands, it'sit's like something new,
something fresh.
And so there was a lot there.
I just kind of like went a lotof different directions.
I acknowledge that, but like Idon't know.
I'm just inspired to reallythink that we are at the at the
very beginning of of this shift,monumental shift in in adult
beverage.
Jeff Cantalupo (29:28):
Yeah, I couldn't agree more.
And I I think a lot of it is,you know, still getting played,
you know, is still gonna playout.
I think what is um it was alittle bit of what we were
trying to uh provoke, even at SoCurious, with the the
merchandising you said youwalked in and you felt like you
were going through almost like alittle kind of bodega.
And the idea is like, what itwhat does merchandising of the
(29:51):
future look like for thesechoices that adult consumers are
demanding?
I think one of the things thatgets me most excited about this
category is that I Throughouthistory, consumer demand ends up
winning usually, right?
So, like, yes, it's aregulatory uh gray area.
There's a lot of ups and downsthat the category is going to go
(30:13):
through, but like you know, itwas illegal to ask someone to
pick you up in their car too,right?
Um, now Uber's a hundredbillion dollar company.
So, like, I think that consumerdemand has its way of kind of
um ultimately winning inculture, and I think that's kind
of where we're at, right?
The demand outstrips supply inin this category today, which is
(30:37):
why you've seen so many peopleenter it.
Um, I think as you get tomaturity and as you get to
distribution density, um, you'llstart to see it, you know, go
through the the ebbs and flowslike any category does, and
there's going to be some umreckoning that that comes.
There's not going to bethousands of brands.
I think there will be, youknow, maybe hundreds.
(30:58):
But the innovation cycle isfascinating because if you think
about the analog we're we'replaying against, and I I
personally don't think this isjust alcohol occasions.
I think there's net newoccasions being used for these
beverages that are very unique.
Um, and I think that but theinnovation cycle we're seeing is
hyper accelerated.
(31:20):
So for instance, right, it took150 years in alcohol to go from
like moonshine to you knowmultiple flavor RTDs that we're
seeing the innovation livetoday.
And like overnight, we'reseeing oh, new ingredient.
Let's make everything, right?
Let's make let's make bottles,let's make RTDs, let's make
(31:42):
let's make wine with THC, let'smake everything.
And it'll be really interestingto see how the consumer um
determines which of those work,which of them don't, what are
they looking for?
What are they looking forthat's slightly different?
Um, and I think we're still inthe early days of that.
Ben Larson (31:59):
You hit the nail on the head.
It's not it's not all aboutalcohol replacement, but that is
the opportunity for a lot ofthe alcohol industry.
I don't know if the spiritscompanies feel this way, but the
distributors and the retailerscertainly do.
If we can expand what weconsider an adult beverage, and
and I think there's there's aline that needs to be drawn
(32:20):
somewhere above functional thatdivides functional with the
adult experience, right?
And then all of a sudden you'veexpanded the experiences that
you sell in in in a supermarketor or on a liquor store shelf.
And I think that's reallyexciting, like to to give more
breadth to to these differentcompanies playing currently in
(32:41):
alcohol.
Jeff Cantalupo (32:42):
Yeah, I I couldn't agree more.
I mean, that that's net newoccasion uh capability for all
of these companies.
And I think the way it getsmerchandised will be
fascinating.
I had a great discussion withJohn Helper, um, the owner of
Tom 10 liquors up in Minnesota,who I think is you know ahead of
the game as it relates to likeat least being innovative with
(33:03):
how they may be merchandisingthis in some of those stores.
But you know, there's a worldin which I think you see um
people shopping um for outcome,right?
There's a world in which yousee them maybe shopping or
merchandising this stuff foroccasion.
I I think there's so muchthat's yet to be determined.
(33:23):
Um, and I think a lot of it'sgonna have to be rooted in
listening and following the waythat consumers are integrating
these into their lives.
AnnaRae Grabstein (33:30):
It's really interesting how you pointed out
how much faster innovation isoccurring.
And I almost heard the wordscoming out of your mouth as you
talked about how how slow beforewe could get that Moscow mule
in a can from when you know thatthat alcohol started in a
bottle.
Uh, and I think part of it isjust how fast everything is
(33:54):
moving around us.
Uh, and also the how fast thethe supply chain and the
retailers are able to to pivotand shift.
And we you just referenced JohnHelper up in Minnesota.
We heard uh, you know, lastweek or two weeks ago about
Target launching THC beveragesin their Minnesota stores.
(34:15):
Uh C stores are kind of thenext frontier.
And uh when you talk aboutconsumers, really it's about
well, where are these consumers?
And and how fast are the placesthat consumers are going taking
these products and givingconsumers a choice?
Uh, because not every consumeris going to seek them out.
(34:36):
They need to just sort of findthem accidentally, right?
Have that moment.
Um, and and I'm wondering if ifif it makes sense for us to
talk about the different retailchannels for a little bit and
and where consumers are and whatyou where you think are going
to be the most kind of impactfulplaces for for consumers to
(34:57):
find uh cannabinoids.
Jeff Cantalupo (35:00):
Yeah, it's a it's a great question.
Um and I think we're againwe're still in such early days.
I will say that um part of thereason that this this industry
has started, or at least wasstarted, by building a pretty
large direct-to-consumerbusiness was because you needed
to build and understand therelationship with the consumer
you were targeting and what wasresonating.
(35:21):
And I think different thanalcohol, they don't have that
channel.
And that is very unique to thischannel as well, or this
product, as well as the non-alkbeer and the non-alk um spirits
category.
So you can build a directrelationship with a consumer
base, really understand that,and then use that data to
(35:41):
determine what channels should Igo to.
Um, and so I think you'll startto see uh channel
diversification as it relates tostrategy rollout and go to
market happen.
The reason that you've seenkind of a bit of a race by some
of the earlier brands that havestarted to build bigger
businesses to be in every statethat is selling this stuff is
(36:03):
for two reasons, in my opinion.
One is this is categorycreation, and you kind of have
to be um merchandise where thisis being discovered by
consumers.
And two, you get you have aliability in this in this case,
where if you put all your eggsin one state's basket and they
determine um to sign a sign ayou know uh a letter that says
(36:27):
this is no longer okay in theirstate, then you've kind of um
not diversified enough as itrelates to the risk that the
category does happen.
So I think you've seen amulti-state, multi-channel
rollout strategies in this inthis category be the the kind of
strategy du jour versus moremaybe micro geo specific or um
(36:50):
yeah channel specific rolloutstrategies that you see in a lot
of other categories.
I think that changes as we getmore saturation and more um
clarity around the regulatoryenvironment.
And I am the reason I say thatis that it's just true that I
think if you know who yourconsumer is, you're gonna build
for where they want to find you.
(37:10):
And some brands I think aregonna thrive at grocery stores.
I think other brands are gonnathrive at C store.
And I think that is is bynature the way that most
categories ultimately get built.
And I think we'll see thathere.
And this is a beverageindustry, right?
Like D2C's great for as long asit lasts, but like this
(37:30):
industry will be one at retailand distribution will be you
know the one that crowns thewinners.
And so um I think you know,having the capability and and
the internal expertise ofbeverage folks is really, really
critical for the ones that thatare out and getting ahead
today.
Ben Larson (37:49):
So you you brought up the kind of regulatory
shifts, which is an unavoidabletopic, as one might be able to
tell from the beginning of theshow.
And I'm just curious about whatyour perspective is on where
we're at on the risk curve as aventure capitalist, as someone
who's been this in this for afew years now.
Like, how are you feelingtoday, be it micro today in the
(38:12):
middle of a government shutdown,or just you know, coming into
the end of 2025 after having auh a stellar year with with the
growth of the category?
Yeah, what's uh where's yourhead at right now with with kind
of where where risk lies?
Jeff Cantalupo (38:25):
Oh, the billion-dollar question, Ben.
Um, you know, listen, by naturewe're venture capitalists, so
we're we're investing in riskythings.
I think I'm very clear with allof our LPs that we have made
some investments that havestroke of the pen risk.
And whenever you're dealingwith stroke of the pen risk,
that's unclear, and and you knowthat it's likely going to be a
(38:48):
bumpy ride.
And so again, I always go backto consumer demand will help
clarify the risk.
And every day that thiscategory continues to get
awareness and trial andacceptance, not just by
consumers, but by players likeuh you know, publicly traded C
(39:12):
stores like Circle K or Targetsaying that they're gonna try
this out, or you know, biggerand bigger distributors every
day recognizing that they needto fill some of their trucks
with with these new products, orDoordash, you know, who you
know is is experiencingincredible growth with this
category.
I think all of those folks areuh I think reflecting what the
(39:36):
consumer is demanding.
And so my my hope is that we'llfind uh eventually find
rational ways to to um organizeand regulate this category.
And I do think regulation isimportant here, um and where it
should be distributed.
I mean, part of the reason II'm very bullish on C stores is
(40:00):
that C stores by nature checkmore IDs on a daily basis than
anyone else in the country.
And I think that um they're aunique place to to have this
this category be distributed umat scale.
And so I think that brands thatthat understand maybe that that
(40:21):
that's who they're buildingfor, I think are in a unique
position.
Ben Larson (40:24):
Yeah, I just learned recently that they have their
own software, it's true age, andit's like the most robust ID
checking software ever.
Uh yeah, pretty, prettyamazing.
Also great for discovery.
Uh, a lot of people make singleunit purchases and consume them
within the hour.
So it's just really, reallyawesome data coming out of the C
Store channel.
AnnaRae Grabstein (40:44):
That's right.
So you touched on some risk asit relates to policy and
regulatory things, but I thinkthat there's a lot of other
risks that that either get youto a yes or get you to a no.
And those things are thingslike the team, the business
model, the product itself, allof those things.
And I I think it would bereally interesting for our
(41:06):
audience to pull back thecurtain on your process and to
for you to share some kind ofbehind the scenes about getting
to a yes or getting to a no andhow many no's you make for every
yes.
Um, that is a yes, just someyou know, behind the scenes.
Jeff Cantalupo (41:25):
Yeah.
You know, unfortunately, thenature of our business is that,
you know, 99% of the time we'resaying no instead of yes.
Um, you know, we we operate avery concentrated portfolio
strategy at Listen, which isunique in the VC world.
Like we only invest in aboutthree or four deals a year, um,
and we only invest in 10 to 15companies per fund.
(41:45):
A lot of our peers areinvesting in kind of 30 to 50
companies per fund and uhplaying a more mathematical
game.
We're we're we're hyperconcentrated and convicted
investors.
And so um, by nature, we'rewe're we try to be and maintain
high discipline and a high baras it relates to what we're
looking for.
Um, and that is across anycategory that we're investing
(42:07):
in.
When it comes to this category,um, it's one of the first times
we've made a decision where wegot comfortable with making a
couple of investments in thesame category versus just one.
Um, we typically um when we'reexcited about a behavior shift,
we'll we'll go try to find oneinvestment against that behavior
shift to make.
Um, but in this category, wethink there's going to be
(42:28):
multiple winners and multiplepositionings that um are
attractive to consumers.
And so we made a decision thatwe would earmark a certain
amount of capital to make a fewinvestments and we've done so.
Um what gets to a yes, I mean,you know, at the early stage of
investing, it's probably acliche by now if you've talked
to a lot of VCs, but it's reallymuch it's really about the
(42:50):
people.
Um, you know, you're backingentrepreneurs um that you
believe can have have the havethe grit and the vision to to
win, you know, building abusiness is not easy.
Um but it starts first ofalmost with the entrepreneurs
and how consumer obsessed theyreally are.
You know, what are they doingthat gave them the insights to
(43:10):
build what they're building?
What's their brand acumen as itrelates to standing out and
making noise and showing up andactivating the brand?
And then in this categoryspecifically, like, you know,
operational expertise andbeverage expertise is critical.
And so we spent a lot of timeunderstanding margin structure.
(43:31):
You know, this is unfortunatelya commodity industry
eventually.
And uh there will be pricecompression and margin
compression.
And um, if you don't have themargin structure to withstand
that eventually, um, I think itputs a lot of pressure on the
business.
Um, and so think about that.
And then we also like to thinkabout you know, do they have the
capability to activate anomnichannel strategy?
(43:54):
So, what I mean by that is thedigital muscle, obviously, for
the DC channel is great, but canyou also use that digital uh
muscle to drive velocity atretail?
And what does that look like?
What does your go-to-marketlook like?
How does how does that um helpyour sales team when they're on
the ground opening up newaccounts and and showing the the
(44:17):
retailer what and how youactivate around the brand?
So those are just somehigh-level things that we're
super focused on when we'remaking investments.
Ben Larson (44:25):
Can we double click on the margin structure
conversation just a little bit,especially as it pertains to
early stage companies in abeverage category?
And and maybe it's unique tothe the hemp beverage category,
but what are you looking forwhen when you say margin
structure?
Like, are you are we talkingabout like an eye on
profitability?
Anna Rey and I have beenspending a lot of time talking
(44:47):
about operating plans and allthat kind of stuff.
So we've been digging intonumbers a lot lately.
So forgive us.
But we know that beverage isoften like just go, go, go.
It's like rapid pace, growth atall costs, et cetera, et
cetera.
But I keep hearing about thenecessity to have like this
margin structure, and I justhave a hard time really
understanding what that means inthe early stages, and then like
(45:08):
at what point do you have to beable to be like, yeah, we're
we're actually profitable?
Um yeah, what are you lookingfor?
Jeff Cantalupo (45:14):
I I'm I'm looking for an absolute command
on every aspect of the margin.
So while that might not meanthat it's 65% today, is your is
there a pathway to it and whyand how and what's the bridge
and how do you think about thatand what partnerships have you
made and what's your command onthe supply chain?
(45:35):
And how do you think aboutleverage, right?
Because at the end of the day,consumer businesses come down to
two things operating leverageand marketing leverage.
And um, you know, so we spend alot of time with our
entrepreneurs before we've reada check, understanding how they
think about both of those andhow they think about getting
there.
I think um the other reason Ithink it's really important in
this category, not not justbecause I think margin
(45:57):
compression will happen, I thinkit will, but there's not a lot
of capital out there for thiscategory, unfortunately.
And so while historically inBeverage, you see these
companies raise you know lotsand lots of dollars to get to
scale and totally be comfortableburning a bunch of money and
being unprofitable, right?
(46:18):
Like liquid deaths raised like$300 million, right?
I think um I I don't thinkthose coffers exist today for
this category.
You know, a lot of the cannabisinvestors of of yesterday, you
know, maybe didn't make you knowa lot of money on their
historical cannabis investmentsand they're not investing.
(46:38):
And a lot of traditional VCshave vice clauses, so they can't
invest in it.
And so there's there's there'snot a lot of upstream capital,
at least that we're seeingdeployed yet.
I think it will come.
Um, but I think the kind ofgrowth at all cost strategy
isn't gonna be um what thewhat's gonna make winners in
this category.
I think um capital efficiencyis gonna allow them to get to
(47:02):
the next rung and then hopefullyunlock additional capital for
scale.
AnnaRae Grabstein (47:06):
You're you're really uh diving into a complex
question here when when you'retalking about having a full
grasp on your margin, becausewhile also prioritizing consumer
and brand, what what you'reactually bringing up is is the
complexity of the supply chain.
And and we generally are seeingthis division between companies
(47:30):
that are more vertical andcompanies that are more
asset-light and often brandfocused, um, but have less
control over their margin oftenif they are asset-light and
don't own their infrastructure.
Um, have you invested incannabinoid companies that are
owners of their ownmanufacturing and
(47:51):
infrastructure, or have youtended to make investments into
brand-only asset-lightcompanies?
Jeff Cantalupo (47:58):
It's a great question.
I think um we could talk aboutlike cannabis 1.0 and and kind
of the the regulated marijuanamarket, where we have an
investment um in a brand calledMissgrass that has taken the
asset-light approach.
Um, and the reason we made thatinvestment, um, well, let me
step back.
I think everything about theregulated market makes it very
(48:25):
hard to build a brand.
It is state by state.
Um, there's all theserequirements as it relates to um
the typical things you wouldwant to build a great brand,
right?
And so um that makes itchallenging.
The reason we backed KateMiller at at Miss Grass was
because her view was I'm gonnabuild a brand before I launch a
(48:47):
product.
And she built a communityaround Miss Grass through
educational content um andthrough a point of view on the
category.
And then she decided to goasset light and launch products
in strategic markets where shealready had people that knew the
brand.
And so for that side of thebusiness, I believed in that
(49:07):
approach.
And she's done a phenomenal jobbuilding a building a brand in
that category.
Um, for what we're seeing inhemp beverage, I think it's
slightly different.
Um, we do have one investmentin a vertically integrated
company.
Um, you know, we're in we'reinvestors in a in a
non-alcoholic beer companycalled Go Brewing that's
vertically integrated.
And they've launched uh, Ibelieve one of the first um hemp
(49:30):
beverages that is is a beer,um, a non-alcoholic beer.
And it's it's a phenomenalproduct.
We we love the positioningbecause we think the beer
occasion is going to be largefor this category.
Um, and it's not like all theothers out there, it's pretty
easy to dose seltzer water withTHC.
It's not easy to make greatnon-alcoholic beer and then add
(49:51):
THC to it.
So really unique positioning.
But they're their their model,and part of the reason we
invested there is that the waythat they're brewing the beer is
a competitive advantage.
And the fact that they'revertically integrated gives them
um advantageous unit economics.
Um, when I look at some of theother investments we made, these
entrepreneurs have notvertically integrated.
(50:12):
They're not, they don't owntheir own canning lines and
they're not manufacturing it,but they've spent a considerable
amount of time being verythoughtful about formulation and
supply chain.
Um, and so our otherinvestments in the space, Magic
Cactus and Delta, um, you know,incredible entrepreneurs, really
(50:33):
focused on formulation andflavor and consumer insights
that led to their approach tothe category.
Magic cactus's case, veryunique, flavor-based with cactus
water, um, multicannabinoidmicrodose strategy, right?
Delta really kind of positionedthat as a mass seltzer in five,
tens, and twenties, and and oneof the earliest to the market
(50:56):
to kind of build that brand.
Um, but you know, really rootedin consumer feedback.
Um, and in those cases, theyare outsourcing a lot of the
supply chain, um, but they'remaniacal about margin structure.
Um, and so I think that it'snot about necessarily today are
you profitable.
(51:17):
It's about do you have themargin structure that we think
at certain scales will allow youto be profitable and and get
you to those points ofinflection.
And so um that's a little bitof how we think about it.
Um, but yeah, you know, it'sbeverage, it's uh it's it's a
it's typically a harder categoryto have uh amazing margins out
(51:39):
of the gate.
Ben Larson (51:40):
So your portfolio, Go Brewing, Delta, Magic Cactus,
Miss Grass, love those brands.
Putting them aside, who do youadmire in the space right now as
far as what they're doing, asfar as owning the occasion or
really listening to consumer?
Like who's who's out therenailing it?
Jeff Cantalupo (51:59):
Yeah, I'll I'll speak to two that just super
continue to be impressed by.
I think the nowadays folks aredoing an incredible job helping
to build this category.
I think Justin's a greatoperator.
Um, they know how to show up.
I think I love that they havetaken an active strategy against
um events and building thatbrand on you know, on premise
(52:24):
when when and where they can.
And, you know, quite honestly,I think the bottle format is
great for them.
I think it's it's good for thecategory for them as kind of
some of the early leaders tokind of establish the category.
And so I think they're doinggreat work.
Um, another one of my favoritesis uh Uncle Arnie's.
I'm a huge fan of Theo.
I I think they've they're oneof, you know, let me let me
(52:48):
preface all this by saying thereare a significant amount of
products in the market.
There are very few brands.
I think Theo and the team inUncle Arnie's have have built a
brand, and I love that.
Um, I think they know who theircustomer is.
I think um they're fun, they'recreative.
Um, and I love seeing that inthe category.
(53:09):
So big, big respect for thosefolks as well.
Um, but those are a couplegreat brands.
AnnaRae Grabstein (53:15):
Awesome.
And shout out to us for havinguh Theo from Uncle Arnie's on
the pod a couple weeks ago.
And actually Kate Miller, CEOof Missgrass, uh was on the pod
probably about a year ago.
Um, so look back in thearchives and hear from Kate
about her journey with MissGrass as well.
Um, I love those tips, reallygood ones.
(53:36):
And uh Jeff, you know, we're atthe hour, which means that it's
time for our last call.
So, what's your final messagefor our listeners?
Advice, call to action, closingthought.
Jeff Cantalupo (53:47):
Listen to your customers.
That's it.
Could have called that one.
Ben Larson (53:52):
Amazing.
AnnaRae Grabstein (53:54):
On brand, on brand, Jeff.
Ben Larson (53:56):
Wait, wait, I got I got one last call question.
Will there be another uh SoCurious conference?
Jeff Cantalupo (54:02):
Great question, Ben.
I have a meeting right afterthis actually to discuss our
plans for it.
So, yes, we're planning ondoing it again um in 26.
So I would love for y'all tocome back out.
Ben Larson (54:13):
All right, Jeff Cantalupo, listenventures.
Thank you so much for the time,the knowledge.
Uh, it was really greatchatting with you.
Jeff Cantalupo (54:21):
Thank you, Ben.
Thank you, Anna Ray.
Ben Larson (54:23):
All right, we'll talk to you soon.
We'll see you at SoCurious2026.
All right, folks, what do youthink?
It was an incredibleconversation.
Let us know if you have anyfollow-on questions or anything
else.
Let us know who you'd like tohave on the show, what topics
you would like us to cover.
Thank you to our friends andfamily at Virtosa and Wolfmeyer,
and of course our producer EricRosetti.
(54:45):
If you've enjoyed this episode,please drop us a like, a
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Drop a review on ApplePodcasts, Spotify, wherever you
listen to your shows.
As always, folks, stay curious,stay informed, and most
importantly, keep your spiritshigh.
(55:05):
Until next time, that's theshow.
I'm very clear with all of our LPs that we have
made some investments that havestroke of the pen risk.
And whenever you're dealingwith stroke of the pen risk,
that's unclear, and and you knowthat it's likely going to be a
bumpy ride.
Ben Larson (00:19):
Hey everybody, welcome to episode 111, 111 of
High Spirits.
I'm Ben Larson, and with me asalways is my co-host Anna Ray
Grabstein.
Recording Tuesday, October28th, 2025, and we have a very
interesting show for you today.
We have our friend JeffKenalupo, the founder of Listen
(00:42):
Ventures, famous for the socurious concert or concert
conference that that launchedthis past year.
It was like a concert, it was alot of fun.
Uh, we're gonna dive intoeverything regarding the
consumer, hemp beverages, andvice wellness.
Curious about that one.
Anna Ray, let's get some vicewellness on the map.
AnnaRae Grabstein (01:04):
I know.
I I was thinking a lot aboutintegration recently, and people
talk a lot about integrationwhen it comes to psychedelics
and the wellness movement.
Ben Larson (01:15):
But I've been really, especially with how
popular it's become.
AnnaRae Grabstein (01:22):
Great, let's talk about it because I'm on a
kick of integration of thelessons that I'm learning in my
life outside of my work into mywork.
And just seeing all theseincredible connections about the
way that um just everything isso interrelated.
And the lessons that we learnas parents can sometimes be
(01:44):
incredible lessons that I canhelp the CEOs and like boards
that I'm working with sometimes.
So I'm just I'm just all aboutthe integration move right now.
Ben Larson (01:55):
I love it.
I love it.
Yeah, I listen to a lot ofmotivational like things on
Spotify, things that get megoing while I'm at the gym in
the morning.
And I occasionally fire themoff back to my wife.
And I always preface it withlike, yeah, I'm I know this is
so me.
I know I'm in like one of mymoods, but just listen to it.
It's it's like reallyinteresting.
And if you feel so inclined,maybe have Alistair listen to it
(02:17):
on the way to school.
And it works sometimes, butyeah, I love that we've often
referred to it at Vertosa ascross-pollination, like
encouraging our team to stayactive out in the world beyond
what we do and bring thatinformation back, bring those
insights back.
And that's actually what I'veloved about working in the
beverage space is like it's awhole new world for us to
(02:39):
explore and infer on like howthat might influence the
trajectory of cannabis and hemp.
AnnaRae Grabstein (02:44):
Yeah.
Well, so here's my two lessons,my integration lessons for the
week.
Ben Larson (02:49):
Yes.
AnnaRae Grabstein (02:50):
First one coming from Coach Rich, the
jujitsu coach, that myeight-year-old goes to jujitsu,
and I was uh sitting in andwatching a practice, and at the
end of the session, the coachsaid to everybody, Are you
trying to be perfect?
Don't because perfect is notreal.
(03:11):
He said, Be a little bit bettertoday than you were yesterday.
And it was just so clear andobvious and was just to the
reminder that I needed.
Ben Larson (03:20):
Man, I love that.
I yeah, right.
You need that coach.
AnnaRae Grabstein (03:24):
Yeah, don't try to be perfect because it's
just not real, but we want to bebetter every day.
And then the next day, throughmy son's school, we get all of
these updates from his thirdgrade teacher through an app,
the playground app.
It's like the social media ofthe classroom.
They often share the thingsthat they were teaching the kids
(03:44):
in the class so that then wecan have conversations with them
at home.
And the lesson was Did you knowthat people communicate their
feelings and attitudes?
7% with words, 38% with tone,and 55% with body language.
And it was all about teachingthe kids that they're
(04:04):
communicating with a lot morethan words.
And again, such an incrediblelesson.
I think that in particular,when I'm working with executive
teams, there's often so muchthat gets lost in communication,
uh, be it through tone, throughwritten communication, and uh
just a really great reminder.
(04:25):
So I'm all about integratingthese lessons that I'm learning
through my eight-year-old thiswork, uh, this week back into my
work with executives.
Ben Larson (04:34):
Yeah.
No, I love that.
It's uh especially in thisvirtual world, that the last
lesson, like it's really hard tobuild that connection when
you're not actually having thosein-person conversations.
And in the world of Slack, likeso much gets lost.
And you really have to beintentional about re-grounding
(04:55):
in that in that relationship andhaving that that face-to-face
opportunity because otherwiseyou can just diverge and like
you're not even recognizing it,right?
You're not even actuallycommunicating.
AnnaRae Grabstein (05:06):
Absolutely.
Should we jump into some news?
I know you've got stuff on yourmind.
Ben Larson (05:10):
Yeah, some juicy news out there uh recently.
Sorry, I can't help myself.
The MSO thought it'd be wise toto sue in Virginia toll wine,
DoorDash, uh, to the tune of $80million, uh, essentially for
(05:31):
unfair competition and and lostrevenue.
$80 million sounds like a lot,especially for a company losing
about $17 or $18 million aquarter.
AnnaRae Grabstein (05:41):
Yeah, juicy.
Ben Larson (05:42):
Sounds like a nice recovery effort.
AnnaRae Grabstein (05:43):
Yeah, they haven't had a profitable, uh,
they haven't had a profitablequarter.
They have been a public companyfor quite some time and have
never really entered the sphereof the tier one MSO group and
really looked at Virginia as ahuge opportunity.
And as a result of the Virginiamarket not coming to fruition,
(06:04):
I think the way that reallyanyone has wanted, they have
chosen to sue some behemoths inthe space.
It's it's a really bigsurprise.
It feels like they are a littlebit of a of a David up against
some Goliaths.
Ben Larson (06:18):
Aren't they mid-lawsuit in Pennsylvania
against some hemp operators aswell?
Like, I I did that ever getsettled.
It just seems like a totalwaste of money for them,
especially going up againstthese other organizations.
You're just gonna piss away,you know, money.
And to what end?
Like they're putting a targeton their back?
Are they trying to be the hero?
(06:39):
I just don't understand the endgame for Jushi here.
AnnaRae Grabstein (06:43):
Yeah, I more think about those that are
getting sued, the DoorDash andTotal Wine and and that cohort
is that I'm just really havebeen optimistic and hopeful
about these players' entranceinto the cannabinoid category.
And and I know that they takerisk really seriously and um are
(07:04):
doing everything as compliantlyas they can in these markets.
And I know that from my ownexperience working with
companies that work with them.
And I just don't want them toget scared away and to think
that this ends up being too muchof a pain in the butt.
And and the the consumers thatthey're targeting with these new
products aren't worth itbecause I think that they are.
(07:25):
And um, and I know that we'regonna be talking about that
today.
Ben Larson (07:28):
Here's the hot tip you aren't scaring anyone away.
Everyone has seen theopportunity, they know how big
the future is for THC beverages.
You aren't gonna scare theseguys away.
So now you've asked for thehorns, and I don't speak for
these companies, but I knowbetter than to sue them when
they want something.
And so now you've put a targeton your back, and they're gonna
(07:51):
be more involved and moreinvested in making sure that
they not only win this, but theyget the last laugh.
So good luck.
I don't know.
I I I just I I think it's afool's errand.
It just shows like a lack oflike understanding and research
as to what's actually happeningin in the in the hemp beverage
movement.
AnnaRae Grabstein (08:10):
And what other important news are you
following in the world of hemppolicy and regulation?
Ben Larson (08:16):
Oh, you know, it's just been very quiet on the
federal front, nothing going onduring a government shutdown.
What hit the headlines thateveryone is seeing is that the
AGs pulled together the thestate's attorneys general and
penned a letter very similar tothe one that they did last year
and sent it to the Hill.
And basically that letter wastalking about actually a lot of
(08:38):
reasonable things.
We need more regulation, weneed consumer safety, yada yada
yada.
And in the very last line, theyput, and we need to shut down
the intoxicating hem.
They kind of snuck it in there.
We know from offices that we'vespoken to that they came in
really hot and heavy, that thisneeds to be signed, that there's
a 12 p.m.
deadline, and so people werejust signing it and sending it.
(09:00):
And so you have AGs from likeMinnesota that basically birthed
this whole movement signing onto this letter.
From what we've heard is thatthe letter isn't holding as much
water as other letters that arebeing penned by people that
actually contribute funds to theHill.
It's interesting, right?
You know, it's like obviouslythe attorneys general have a lot
(09:20):
of sway, and people generallydo take their opinion into
consideration.
But what else do you expectfrom a bunch of lawyers and
former cops?
You know, it's like, of course,they're gonna be opposed to
this.
Of course, they're gonna wantto continue the enforcement and
the drug war that they've beenbacking for the last century.
AnnaRae Grabstein (09:39):
Yeah.
Ongoing investment inprohibition definitely fuels the
economy of incarceration andcriminalization, which funds the
Department of Justice's budgetoverall.
Ben Larson (09:52):
So I hear I just I just I mean, going how this
relates to our last topic, likeI just don't think people
understand like how much peopleactually want specifically TAC
beverages, if not hemp as awhole in the mainstream
channels.
It's not just about the hempoperators anymore.
It is about the distributors,it is about the retailers, it's
(10:13):
about the consumer.
Like people want this productin this category on their
shelves, in their hands, andthey're gonna get it.
AnnaRae Grabstein (10:23):
I love it.
It's a perfect segue to bringon our guest.
So let's do that.
I'll cue them up.
Our guest today is uh JeffCantalupo.
He's the managing partner andfounder of Listen Ventures, a
venture capital group that backsconsumer-obsessed founders
building the next generation ofbrands.
Jeff's career began at theglobal ad agency, Leo Burnett,
(10:44):
where he helped shape householdnames like Marlboro and Pop
Tarts.
And in 2010, he founded ListenVentures, translating brand
building instincts into venturestrategy.
And today he sits on the boardsof Miss Grass, The Fresh
Factory, Black Buffalo, Fable,and Modern Pediatrics.
And he teaches startup brandingat Kellogg School of Management
(11:07):
at Northwestern.
So he's here today to talk withus about everything that he's
got going on in his head and acategory in hemp beverage that's
redefining how consumers thinkabout wellness, vice, and the
ritual of social drinking.
So, Jeff, welcome to HighSpirits.
Jeff Cantalupo (11:22):
Thank you, Anna Ray.
Thanks, Ben.
Good to be here.
Ben Larson (11:25):
Man, great to see you.
And I love seeing the postersthat you have on the wall behind
you for anyone watching video.
Like this is the same brandingthat we all got exposed to when
we went to the So Curiousconference in Chicago.
And, you know, just kudos toyou for like coming in to the
market with a brand new show.
You know, we we reflect on thefact that there's just so many
(11:48):
conferences.
How do you choose?
Like, what is new?
But this definitely felt new.
It felt fresh.
You walked in, it felt like youwere in a little supermarket.
There were shelves of all thesedifferent products.
And then you had the speakingstage and the audience
intermingled with the booths.
It was like a big horseshoearound the stage.
And it was just such an awesomeexperience where I felt that
(12:08):
everyone in the room waslistening to the talks.
They were having opportunitiesto socialize and then also see
what was happening at the peoplethat were displaying around the
periphery.
So incredibly well done.
What's on the wall behind youreminded me of what a great day
that was.
Jeff Cantalupo (12:25):
Thanks, Ben.
I appreciate it.
Quite honestly, we didn't knowwhat to expect.
We we just felt like there wasuh some missing conversation
around the category that wasbeing built as it pertains to
the consumer.
And so that was that was reallythe goal of putting on the
conference.
And we were overwhelmed by thethe response and the number of
people that we met and and therelationships we built from it.
So appreciate you both beingthere.
AnnaRae Grabstein (12:47):
Awesome.
Yeah, I will be back at thenext one uh if you guys have it.
So uh let's let's jump in.
I I loved learning that yourbackground was rooted in
storytelling, not spreadsheets,which is what I think of as the
traditional path into venturecapital.
And um, it's just a reminderthat great investing is is about
emotional intelligence as muchas financial analysis sometimes.
(13:11):
And um, I'd love for you tojust shed some light on your
story about making the leap fromworking in branding to
launching less inventures.
Jeff Cantalupo (13:20):
Yeah, it's it's a it's a great question.
My my untraditional path, AnnaRay, into the venture capital
world.
Happy to share a little bit ofit.
But um quite honestly, it wasit was paved through some really
unique experiences in theadvertising space.
So I spent a decade of mycareer at Leo Burnett out of
school.
Um, and I got very fortunate towork on some of the biggest
(13:43):
brands in the world.
Um, you know, Marlboro, PopTarts, uh, others.
I worked with Procter Gamble, Iworked with um DiAgio a little
bit.
And I fell in love with usingcreativity to build business.
That's really what the businessof an ad agency is.
Um, but then I got really luckyand I was asked to help the
(14:03):
agency build out a little bit ofa practice around innovation
rather than just advertising.
And so found myself sitting inyou know, strategy rooms with
the the big CPG companies,helping them think about for
Kellogg, for instance, like whatdoes breakfast look like in the
future and what brands might weneed to build?
And um, or Ultra, which is hey,we're in a declining industry
(14:25):
with cigarettes and tobacco.
Um, what else can we do basedon what we're good at as a
company?
And so um that experience, one,I fell in love with innovation.
It also opened my eyes to whatwas happening outside the walls
of big companies because ifyou're trying to help big
companies be innovative, you gotto understand what the
entrepreneurs are doing outsidetheir walls.
Um, and that was kind of thebridge to the early stage VC
(14:48):
ecosystem.
Um, I loved um thinking anddoing innovation work.
Um, but I also saw why bigcompanies end up having to buy
innovation more often than not.
Um, and and that was kind ofthe the the underpinnings for
why I started listening.
Ben Larson (15:02):
Well, let's let's dive into that.
Let's dive right in and justsee like, what is it that holds
big companies back frominnovation?
What do these innovativecompanies that we get to work
with like have to look forwardto?
And in working with those bigcompanies, like how has that
guided the advice that you giveto these founders once you're
engaged with them?
Like, how do you get them tothe point where there is a
(15:23):
liquidity event or anopportunity for them to get
snapped up?
Jeff Cantalupo (15:27):
There's a lot to unpack there, Ben.
I I think I think um, you know,it listen, let's be honest, big
companies have all theresources that that you would
want to be super innovative.
I think some of the challengesyou see are just more of an
organizational behavior umissue, right?
So they have all the money.
Yeah, I mean, they have theyhave all the money, they have
(15:49):
all the talent, they have allthe resources to do innovation.
Um, but things get in the ray,and whether that is, you know,
incentive design structure as itrelates to who should be
leading innovation and what whattheir goals are in their
career, or um whether it's thetrue innovators, Helena, like
you just mentioned, which is,you know, hey, to be truly
innovative, we're gonna have todisrupt our own cash cow, and I
(16:11):
can't get up in front of thepublic markets and tell people
that we're gonna we're gonnadeposition our current cash cow.
So a lot of those things playinto it.
I think some companies havedone innovation incredibly well.
Like, you know, Apple's thebiggest company in the world for
a reason because they haveinnovation built into their
culture.
Um, but a lot of others end uphaving to buy innovation.
Um, and so that's kind of whatsparked the idea for me, wanting
(16:34):
to go work with theentrepreneurs outside of these
big companies.
AnnaRae Grabstein (16:36):
I love that we are now talking about the
innovators' dilemma, uh, becauseI think that within the hemp
beverage space, there's a lot tounpack with that concept
because we are now seeing BeVALCcompanies um come into the
space.
And that certainly has to besomething that's on their mind
of both like cannibalizing theirexisting business, but also the
(17:00):
opposite of just accepting thereality that potentially their
existing business is declining,whether or not they choose to
prioritize hemp beverages ornot, so that maybe it can be
kind of an off an off-road.
Um, I'm curious of yourthoughts there of how the
innovators' dilemma is playinginto the ecosystem of alcohol
(17:22):
coming into hemp beverage today.
Jeff Cantalupo (17:24):
It's a great question.
Um, to be quite honest, one ofthe reasons we got so excited
about this market um as early aswe did was because it's it's
very unique in the sense thatwhenever you have a category
creation moment, you often don'thave the big guys sitting on
the sidelines.
They're often jumping in asquickly as possible.
(17:46):
But that's not what's takenplace over the last three or
four years of the development ofthe hemp beverage side of
business.
Um, and that's largely just dueto them being a little bit more
um maybe conservative andpatient as it relates to the
regulatory uncertainty.
And so it's kind of onch in ageneration, right?
You have as an entrepreneur,you have this window of
(18:08):
opportunity where the big guysaren't jumping in yet for you to
build real value prior to themgetting in.
I think some of them startingto make more larger moves into
the space, I think makes a tonof sense.
But I also think it paves theway for what I like to call
phase one of what we'll see inthis category, which is there it
gave enough time to enoughentrepreneurs to get large
(18:30):
enough where they can't just bedismissed.
So when the big guys do decidethat they want to get into the
category, I do think you'll seesome movement towards buying
innovation in this space versusjust jumping headfirst and
trying to build it themselves.
Ben Larson (18:45):
Yeah, I mean, in that time period, it's allowed
hundreds of brands, you know,some people estimate 500 or more
that have entered the space.
And I was talking to a founderrecently, and they were
remarking it's like, if it wasany other category, we shouldn't
have gotten to like two orthree million dollars in revenue
yet.
Like that's it would have justbeen such a hard slog,
especially with this muchcompetition.
(19:06):
And so being a venture fundmanager with so many investment
opportunities, how do you focuson where to place your money?
Like, what are you reallylooking for?
And and I know you have thisconsumer focus, but is that
something that you look for onthe front end, or is that
something you train into yourportfolio as after you've made
the bet?
Jeff Cantalupo (19:27):
Yeah, it's it's a great question, man.
I mean, if I give you a littlebit of maybe um kind of the
backdrop of why we got excited,that might be helpful.
So yeah, yeah, let's do it.
I'd say four, maybe four and ahalf, five years ago, we started
spending a lot of time tryingto get our arms wrapped around
the changing behavior withconsumers and alcohol.
(19:47):
And what we were looking tounderstand was like what what
was driving these shifts, howand what were they replacing
these moments with, what typesof products were they looking to
um and moving towards?
And we spent a lot of timemeeting with non-alcohol, not NA
brands, so NA wine, NA uh, NAliquor, etc., and a you know,
(20:13):
RTDs, um, and NA beer.
And um that led to us gettingdeeper into okay, well, what
else is out there?
What else could be serving someof these occasions?
And so we were very early tounderstanding what was happening
in Minnesota and some of thecreativity we're seeing from
entrepreneurs.
Um, and we just became prettybig believers that in some
(20:36):
occasions where NA might fit thebill, other occasions people
still might want somethingfeellable.
And you know, this is kind ofthe first time we've had an
ingredient other than alcohol beusable in formulations um for
beverage.
And it became super exciting asit related to the modality.
(20:59):
And so um we got we got prettyexcited about the movement and
spent a lot of time internallyand with some of the
entrepreneurs building in thespace, trying to get our arms
wrapped around how we mightapproach making investments in
the space, what we thought um,you know, portfolio construction
would look like um when this isall said and done and working
(21:20):
backwards almost, right?
Which is if you look at theDiAgios and the Anheuser Bushes
of the world and even the Ultrasand some of the tobacco
companies, right?
All of them build portfolios ofbrands, and that's how they
manage a category.
And I don't think that this isgonna be any different.
I think that this is on theverge of becoming a very large
category, and it's gonna bedetermined based on, hey, what
(21:44):
positionings do you want in yourportfolio construction?
How do you think about um whereyou might be able to win?
And what positionings do youthink that the strategics are
gonna want to have in theirportfolio?
And that's that's a little bitabout how we've constructed our
strategy.
AnnaRae Grabstein (21:59):
What I've heard you talk about is this
concept of a vice wellnessthesis that Listen has.
And so maybe within the contextof this portfolio construction
that you're talking about, youcould explain to us what the
vice wellness thesis is andpotentially even how it is
supported by the um investmentsin your portfolio that that you
(22:21):
can share about.
Jeff Cantalupo (22:22):
Yeah, I'm happy to.
And just to I'll start withsaying that the vice wellness
concept is is broader than thiscategory in particular.
What we're excited by, and youknow, it just it's kind of a fun
term.
Um, but it's we're we'reexcited by businesses that are
exhibiting kind of theritualistic and habitual
(22:43):
behaviors that are traditionallyoften associated with vice
companies or vice products andthe economic structure of vice.
But they're now being umleveraged through wellness
permission.
And that's kind of thevice-wellness articulation we
have internally at Listen.
And the reason we're excited bythat right now, and this is
(23:04):
across multiple differentcategories, is um it's very
rare, but it's driven kind of bythe super cycle that we're
seeing around consumer behavior.
And health and wellness supercycle, I think, is is real.
But what makes it superexciting is that the motivation
for it is driven by the types ofthings you ever want you always
want to see in consumer brandsthat are sticky, which is kind
(23:27):
of this motivation for statusand and vanity, quite frankly.
And those motivation structuresoften create incredible
backdrops for you to createmassive businesses.
There's a reason that alcohol,tobacco, gambling have
historically been some of thebest quote unquote fundamental
(23:47):
economic business structures.
Um, you know, super highloyalty, super good margin, um,
habitual in nature, ritualisticin nature, in some cases, even
addictive in nature.
Um, and those led to um, youknow, business models that
withstood good times, bad times,et cetera, um, and built some
(24:07):
of the biggest brands that weknow.
I think status shifting from,hey, how many beers did you
drink or how messed up did youget last night to, oh my gosh,
did I, you know, what was mysleep score?
Ben, we were even joking aboutthis earlier, but like, did I
get my eight hours, right?
I think, you know, people beingemboldened with tracking their
(24:29):
physiological responses to theirenvironment, I think is a
massive indicator of where thefuture of status goes.
And if wellness becomes statusdriving, um, I think vice
wellness will become massivecategories uh to invest against.
And so that's that's kind ofthe underpinning.
Within that, we think socialbeverage and kind of the future
of what we're seeing in hemp umuh lends itself to it.
(24:52):
Um a lot of people are makingthese choices for quote unquote
wellness decisions.
Um, but the modality ofbeverage and the ritualistic
nature of it, I think lendsitself to that structure.
AnnaRae Grabstein (25:03):
As a quick follow-up here, so you're really
like kind of opening up thiscan of worms on a whole lot of
different categories.
And and I think uh it's itsometimes has been, I've seen it
be historically complicated forVC funds to raise into
cannabinoid brands and companiesas well as other companies.
(25:25):
And it sounds like you arebuilding a bit of a diversified
uh portfolio strategy where youare investing in hemp, but but
likely other companies as wellthat fit this thesis.
And um, I'd love for you totalk about how you are
navigating the complexity ofinvesting in cannabinoids while
(25:46):
also investing in other thingsand how your LPs and and banks
or whoever it is that you'reworking with are kind of
supporting that that thesis aswell.
Jeff Cantalupo (25:55):
Yeah, it's a great question.
We have never been categoryinvestors.
We our our thesis at Listen andand what we do across all of
the funds we've ever raised andinvested um is articulated as
the following, which is we weback consumer obsessed
entrepreneurs building brands atthe tipping point of behavior
shifts.
And our job as a firm, and thereason I named it Listen, is to
(26:20):
understand where consumerbehavior is going and what
shifts we actually believe willenable new big brands to be
built.
And I think historically we'veseen this happen um within our
within our portfolio strategy.
We were very early to a thesisaround, you know, people
starting to prioritize mentalhealth.
And we invested in a brandcalled Calm back in 2012 that
(26:43):
kind of you know has has becomeone of the brands that helped
leave lead and accelerate thatshift.
And whenever you see behaviorshifts that large in culture,
there's always brands that arein and around helping to lead
them.
And so I'd say this is nevercategorical as it relates to our
LPs.
They they kind of believe inour approach to that.
(27:04):
We spend a lot of time atListen Anna talking to consumers
directly.
So we design our own researchstudies, we try to get into the
the you know the mindsets ofwhat is driving some of these
behavior shifts that we'rereading about or hearing about
um from a high-levelperspective, but we really try
to get into the minds of theconsumers to understand is this
(27:25):
sustained, right?
Is it a trend?
Or is this a true behaviorshift?
And if it is a shift, what arethe brands that we think might
help lead that shift?
Um, and that's a little bitmore about our thesis.
I think as it relates to thiscategory, um as I mentioned,
it's evolutionary, right?
I think changing behaviors uhthat people are having with
(27:46):
substances like alcohol or evenfood, right?
Like we've seen this movementin food where it's kind of
cleaner label, better for youingredients.
Um, and I think all of this isactually kind of against that
super cycle I was mentioningearlier.
Ben Larson (28:02):
I really love this.
The impact of both the THCbeverage movement happening at
the same time as the decline ofalcohol.
And I I say it like thatbecause I don't think it's
causal, I think it's justhappening at the same time.
I found myself pitching avision of the future to a
prominent retailer where I wasexplaining that alcohol becomes
(28:24):
one of many different adultbeverage kind of ingredients.
THC is a new one, and THC is anopportunity as a gateway, so to
speak, to really open our mindsabout what the adult beverage
landscape looks like in thefuture.
And I'm curious as to how youthink this movement is it long
lasting?
And do we imagine like liquorstores changing to adult
(28:47):
beverage stores and like havingall these different ingredients
to play with?
Like, what's that look like inthe future?
And does the branding change?
You you you talked about likepremium is premiumization, like
a lot of products today are arefeeling familiar, but they're
putting a different ingredientside of it.
But what you're saying, I'mthinking is like maybe the
branding has to change too ifwe're truly listening to
(29:08):
consumer and what they want.
It's not the old brands, it'sit's like something new,
something fresh.
And so there was a lot there.
I just kind of like went a lotof different directions.
I acknowledge that, but like Idon't know.
I'm just inspired to reallythink that we are at the at the
very beginning of of this shift,monumental shift in in adult
beverage.
Jeff Cantalupo (29:28):
Yeah, I couldn't agree more.
And I I think a lot of it is,you know, still getting played,
you know, is still gonna playout.
I think what is um it was alittle bit of what we were
trying to uh provoke, even at SoCurious, with the the
merchandising you said youwalked in and you felt like you
were going through almost like alittle kind of bodega.
And the idea is like, what itwhat does merchandising of the
(29:51):
future look like for thesechoices that adult consumers are
demanding?
I think one of the things thatgets me most excited about this
category is that I Throughouthistory, consumer demand ends up
winning usually, right?
So, like, yes, it's aregulatory uh gray area.
There's a lot of ups and downsthat the category is going to go
(30:13):
through, but like you know, itwas illegal to ask someone to
pick you up in their car too,right?
Um, now Uber's a hundredbillion dollar company.
So, like, I think that consumerdemand has its way of kind of
um ultimately winning inculture, and I think that's kind
of where we're at, right?
The demand outstrips supply inin this category today, which is
(30:37):
why you've seen so many peopleenter it.
Um, I think as you get tomaturity and as you get to
distribution density, um, you'llstart to see it, you know, go
through the the ebbs and flowslike any category does, and
there's going to be some umreckoning that that comes.
There's not going to bethousands of brands.
I think there will be, youknow, maybe hundreds.
(30:58):
But the innovation cycle isfascinating because if you think
about the analog we're we'replaying against, and I I
personally don't think this isjust alcohol occasions.
I think there's net newoccasions being used for these
beverages that are very unique.
Um, and I think that but theinnovation cycle we're seeing is
hyper accelerated.
(31:20):
So for instance, right, it took150 years in alcohol to go from
like moonshine to you knowmultiple flavor RTDs that we're
seeing the innovation livetoday.
And like overnight, we'reseeing oh, new ingredient.
Let's make everything, right?
Let's make let's make bottles,let's make RTDs, let's make
(31:42):
let's make wine with THC, let'smake everything.
And it'll be really interestingto see how the consumer um
determines which of those work,which of them don't, what are
they looking for?
What are they looking forthat's slightly different?
Um, and I think we're still inthe early days of that.
Ben Larson (31:59):
You hit the nail on the head.
It's not it's not all aboutalcohol replacement, but that is
the opportunity for a lot ofthe alcohol industry.
I don't know if the spiritscompanies feel this way, but the
distributors and the retailerscertainly do.
If we can expand what weconsider an adult beverage, and
and I think there's there's aline that needs to be drawn
(32:20):
somewhere above functional thatdivides functional with the
adult experience, right?
And then all of a sudden you'veexpanded the experiences that
you sell in in in a supermarketor or on a liquor store shelf.
And I think that's reallyexciting, like to to give more
breadth to to these differentcompanies playing currently in
(32:41):
alcohol.
Jeff Cantalupo (32:42):
Yeah, I I couldn't agree more.
I mean, that that's net newoccasion uh capability for all
of these companies.
And I think the way it getsmerchandised will be
fascinating.
I had a great discussion withJohn Helper, um, the owner of
Tom 10 liquors up in Minnesota,who I think is you know ahead of
the game as it relates to likeat least being innovative with
(33:03):
how they may be merchandisingthis in some of those stores.
But you know, there's a worldin which I think you see um
people shopping um for outcome,right?
There's a world in which yousee them maybe shopping or
merchandising this stuff foroccasion.
I I think there's so muchthat's yet to be determined.
(33:23):
Um, and I think a lot of it'sgonna have to be rooted in
listening and following the waythat consumers are integrating
these into their lives.
AnnaRae Grabstein (33:30):
It's really interesting how you pointed out
how much faster innovation isoccurring.
And I almost heard the wordscoming out of your mouth as you
talked about how how slow beforewe could get that Moscow mule
in a can from when you know thatthat alcohol started in a
bottle.
Uh, and I think part of it isjust how fast everything is
(33:54):
moving around us.
Uh, and also the how fast thethe supply chain and the
retailers are able to to pivotand shift.
And we you just referenced JohnHelper up in Minnesota.
We heard uh, you know, lastweek or two weeks ago about
Target launching THC beveragesin their Minnesota stores.
(34:15):
Uh C stores are kind of thenext frontier.
And uh when you talk aboutconsumers, really it's about
well, where are these consumers?
And and how fast are the placesthat consumers are going taking
these products and givingconsumers a choice?
Uh, because not every consumeris going to seek them out.
(34:36):
They need to just sort of findthem accidentally, right?
Have that moment.
Um, and and I'm wondering if ifif it makes sense for us to
talk about the different retailchannels for a little bit and
and where consumers are and whatyou where you think are going
to be the most kind of impactfulplaces for for consumers to
(34:57):
find uh cannabinoids.
Jeff Cantalupo (35:00):
Yeah, it's a it's a great question.
Um and I think we're againwe're still in such early days.
I will say that um part of thereason that this this industry
has started, or at least wasstarted, by building a pretty
large direct-to-consumerbusiness was because you needed
to build and understand therelationship with the consumer
you were targeting and what wasresonating.
(35:21):
And I think different thanalcohol, they don't have that
channel.
And that is very unique to thischannel as well, or this
product, as well as the non-alkbeer and the non-alk um spirits
category.
So you can build a directrelationship with a consumer
base, really understand that,and then use that data to
(35:41):
determine what channels should Igo to.
Um, and so I think you'll startto see uh channel
diversification as it relates tostrategy rollout and go to
market happen.
The reason that you've seenkind of a bit of a race by some
of the earlier brands that havestarted to build bigger
businesses to be in every statethat is selling this stuff is
(36:03):
for two reasons, in my opinion.
One is this is categorycreation, and you kind of have
to be um merchandise where thisis being discovered by
consumers.
And two, you get you have aliability in this in this case,
where if you put all your eggsin one state's basket and they
determine um to sign a sign ayou know uh a letter that says
(36:27):
this is no longer okay in theirstate, then you've kind of um
not diversified enough as itrelates to the risk that the
category does happen.
So I think you've seen amulti-state, multi-channel
rollout strategies in this inthis category be the the kind of
strategy du jour versus moremaybe micro geo specific or um
(36:50):
yeah channel specific rolloutstrategies that you see in a lot
of other categories.
I think that changes as we getmore saturation and more um
clarity around the regulatoryenvironment.
And I am the reason I say thatis that it's just true that I
think if you know who yourconsumer is, you're gonna build
for where they want to find you.
(37:10):
And some brands I think aregonna thrive at grocery stores.
I think other brands are gonnathrive at C store.
And I think that is is bynature the way that most
categories ultimately get built.
And I think we'll see thathere.
And this is a beverageindustry, right?
Like D2C's great for as long asit lasts, but like this
(37:30):
industry will be one at retailand distribution will be you
know the one that crowns thewinners.
And so um I think you know,having the capability and and
the internal expertise ofbeverage folks is really, really
critical for the ones that thatare out and getting ahead
today.
Ben Larson (37:49):
So you you brought up the kind of regulatory
shifts, which is an unavoidabletopic, as one might be able to
tell from the beginning of theshow.
And I'm just curious about whatyour perspective is on where
we're at on the risk curve as aventure capitalist, as someone
who's been this in this for afew years now.
Like, how are you feelingtoday, be it micro today in the
(38:12):
middle of a government shutdown,or just you know, coming into
the end of 2025 after having auh a stellar year with with the
growth of the category?
Yeah, what's uh where's yourhead at right now with with kind
of where where risk lies?
Jeff Cantalupo (38:25):
Oh, the billion-dollar question, Ben.
Um, you know, listen, by naturewe're venture capitalists, so
we're we're investing in riskythings.
I think I'm very clear with allof our LPs that we have made
some investments that havestroke of the pen risk.
And whenever you're dealingwith stroke of the pen risk,
that's unclear, and and you knowthat it's likely going to be a
(38:48):
bumpy ride.
And so again, I always go backto consumer demand will help
clarify the risk.
And every day that thiscategory continues to get
awareness and trial andacceptance, not just by
consumers, but by players likeuh you know, publicly traded C
(39:12):
stores like Circle K or Targetsaying that they're gonna try
this out, or you know, biggerand bigger distributors every
day recognizing that they needto fill some of their trucks
with with these new products, orDoordash, you know, who you
know is is experiencingincredible growth with this
category.
I think all of those folks areuh I think reflecting what the
(39:36):
consumer is demanding.
And so my my hope is that we'llfind uh eventually find
rational ways to to um organizeand regulate this category.
And I do think regulation isimportant here, um and where it
should be distributed.
I mean, part of the reason II'm very bullish on C stores is
(40:00):
that C stores by nature checkmore IDs on a daily basis than
anyone else in the country.
And I think that um they're aunique place to to have this
this category be distributed umat scale.
And so I think that brands thatthat understand maybe that that
(40:21):
that's who they're buildingfor, I think are in a unique
position.
Ben Larson (40:24):
Yeah, I just learned recently that they have their
own software, it's true age, andit's like the most robust ID
checking software ever.
Uh yeah, pretty, prettyamazing.
Also great for discovery.
Uh, a lot of people make singleunit purchases and consume them
within the hour.
So it's just really, reallyawesome data coming out of the C
Store channel.
AnnaRae Grabstein (40:44):
That's right.
So you touched on some risk asit relates to policy and
regulatory things, but I thinkthat there's a lot of other
risks that that either get youto a yes or get you to a no.
And those things are thingslike the team, the business
model, the product itself, allof those things.
And I I think it would bereally interesting for our
(41:06):
audience to pull back thecurtain on your process and to
for you to share some kind ofbehind the scenes about getting
to a yes or getting to a no andhow many no's you make for every
yes.
Um, that is a yes, just someyou know, behind the scenes.
Jeff Cantalupo (41:25):
Yeah.
You know, unfortunately, thenature of our business is that,
you know, 99% of the time we'resaying no instead of yes.
Um, you know, we we operate avery concentrated portfolio
strategy at Listen, which isunique in the VC world.
Like we only invest in aboutthree or four deals a year, um,
and we only invest in 10 to 15companies per fund.
(41:45):
A lot of our peers areinvesting in kind of 30 to 50
companies per fund and uhplaying a more mathematical
game.
We're we're we're hyperconcentrated and convicted
investors.
And so um, by nature, we'rewe're we try to be and maintain
high discipline and a high baras it relates to what we're
looking for.
Um, and that is across anycategory that we're investing
(42:07):
in.
When it comes to this category,um, it's one of the first times
we've made a decision where wegot comfortable with making a
couple of investments in thesame category versus just one.
Um, we typically um when we'reexcited about a behavior shift,
we'll we'll go try to find oneinvestment against that behavior
shift to make.
Um, but in this category, wethink there's going to be
(42:28):
multiple winners and multiplepositionings that um are
attractive to consumers.
And so we made a decision thatwe would earmark a certain
amount of capital to make a fewinvestments and we've done so.
Um what gets to a yes, I mean,you know, at the early stage of
investing, it's probably acliche by now if you've talked
to a lot of VCs, but it's reallymuch it's really about the
(42:50):
people.
Um, you know, you're backingentrepreneurs um that you
believe can have have the havethe grit and the vision to to
win, you know, building abusiness is not easy.
Um but it starts first ofalmost with the entrepreneurs
and how consumer obsessed theyreally are.
You know, what are they doingthat gave them the insights to
(43:10):
build what they're building?
What's their brand acumen as itrelates to standing out and
making noise and showing up andactivating the brand?
And then in this categoryspecifically, like, you know,
operational expertise andbeverage expertise is critical.
And so we spent a lot of timeunderstanding margin structure.
(43:31):
You know, this is unfortunatelya commodity industry
eventually.
And uh there will be pricecompression and margin
compression.
And um, if you don't have themargin structure to withstand
that eventually, um, I think itputs a lot of pressure on the
business.
Um, and so think about that.
And then we also like to thinkabout you know, do they have the
capability to activate anomnichannel strategy?
(43:54):
So, what I mean by that is thedigital muscle, obviously, for
the DC channel is great, but canyou also use that digital uh
muscle to drive velocity atretail?
And what does that look like?
What does your go-to-marketlook like?
How does how does that um helpyour sales team when they're on
the ground opening up newaccounts and and showing the the
(44:17):
retailer what and how youactivate around the brand?
So those are just somehigh-level things that we're
super focused on when we'remaking investments.
Ben Larson (44:25):
Can we double click on the margin structure
conversation just a little bit,especially as it pertains to
early stage companies in abeverage category?
And and maybe it's unique tothe the hemp beverage category,
but what are you looking forwhen when you say margin
structure?
Like, are you are we talkingabout like an eye on
profitability?
Anna Rey and I have beenspending a lot of time talking
(44:47):
about operating plans and allthat kind of stuff.
So we've been digging intonumbers a lot lately.
So forgive us.
But we know that beverage isoften like just go, go, go.
It's like rapid pace, growth atall costs, et cetera, et
cetera.
But I keep hearing about thenecessity to have like this
margin structure, and I justhave a hard time really
understanding what that means inthe early stages, and then like
(45:08):
at what point do you have to beable to be like, yeah, we're
we're actually profitable?
Um yeah, what are you lookingfor?
Jeff Cantalupo (45:14):
I I'm I'm looking for an absolute command
on every aspect of the margin.
So while that might not meanthat it's 65% today, is your is
there a pathway to it and whyand how and what's the bridge
and how do you think about thatand what partnerships have you
made and what's your command onthe supply chain?
(45:35):
And how do you think aboutleverage, right?
Because at the end of the day,consumer businesses come down to
two things operating leverageand marketing leverage.
And um, you know, so we spend alot of time with our
entrepreneurs before we've reada check, understanding how they
think about both of those andhow they think about getting
there.
I think um the other reason Ithink it's really important in
this category, not not justbecause I think margin
(45:57):
compression will happen, I thinkit will, but there's not a lot
of capital out there for thiscategory, unfortunately.
And so while historically inBeverage, you see these
companies raise you know lotsand lots of dollars to get to
scale and totally be comfortableburning a bunch of money and
being unprofitable, right?
(46:18):
Like liquid deaths raised like$300 million, right?
I think um I I don't thinkthose coffers exist today for
this category.
You know, a lot of the cannabisinvestors of of yesterday, you
know, maybe didn't make you knowa lot of money on their
historical cannabis investmentsand they're not investing.
(46:38):
And a lot of traditional VCshave vice clauses, so they can't
invest in it.
And so there's there's there'snot a lot of upstream capital,
at least that we're seeingdeployed yet.
I think it will come.
Um, but I think the kind ofgrowth at all cost strategy
isn't gonna be um what thewhat's gonna make winners in
this category.
I think um capital efficiencyis gonna allow them to get to
(47:02):
the next rung and then hopefullyunlock additional capital for
scale.
AnnaRae Grabstein (47:06):
You're you're really uh diving into a complex
question here when when you'retalking about having a full
grasp on your margin, becausewhile also prioritizing consumer
and brand, what what you'reactually bringing up is is the
complexity of the supply chain.
And and we generally are seeingthis division between companies
(47:30):
that are more vertical andcompanies that are more
asset-light and often brandfocused, um, but have less
control over their margin oftenif they are asset-light and
don't own their infrastructure.
Um, have you invested incannabinoid companies that are
owners of their ownmanufacturing and
(47:51):
infrastructure, or have youtended to make investments into
brand-only asset-lightcompanies?
Jeff Cantalupo (47:58):
It's a great question.
I think um we could talk aboutlike cannabis 1.0 and and kind
of the the regulated marijuanamarket, where we have an
investment um in a brand calledMissgrass that has taken the
asset-light approach.
Um, and the reason we made thatinvestment, um, well, let me
step back.
I think everything about theregulated market makes it very
(48:25):
hard to build a brand.
It is state by state.
Um, there's all theserequirements as it relates to um
the typical things you wouldwant to build a great brand,
right?
And so um that makes itchallenging.
The reason we backed KateMiller at at Miss Grass was
because her view was I'm gonnabuild a brand before I launch a
(48:47):
product.
And she built a communityaround Miss Grass through
educational content um andthrough a point of view on the
category.
And then she decided to goasset light and launch products
in strategic markets where shealready had people that knew the
brand.
And so for that side of thebusiness, I believed in that
(49:07):
approach.
And she's done a phenomenal jobbuilding a building a brand in
that category.
Um, for what we're seeing inhemp beverage, I think it's
slightly different.
Um, we do have one investmentin a vertically integrated
company.
Um, you know, we're in we'reinvestors in a in a
non-alcoholic beer companycalled Go Brewing that's
vertically integrated.
And they've launched uh, Ibelieve one of the first um hemp
(49:30):
beverages that is is a beer,um, a non-alcoholic beer.
And it's it's a phenomenalproduct.
We we love the positioningbecause we think the beer
occasion is going to be largefor this category.
Um, and it's not like all theothers out there, it's pretty
easy to dose seltzer water withTHC.
It's not easy to make greatnon-alcoholic beer and then add
(49:51):
THC to it.
So really unique positioning.
But they're their their model,and part of the reason we
invested there is that the waythat they're brewing the beer is
a competitive advantage.
And the fact that they'revertically integrated gives them
um advantageous unit economics.
Um, when I look at some of theother investments we made, these
entrepreneurs have notvertically integrated.
(50:12):
They're not, they don't owntheir own canning lines and
they're not manufacturing it,but they've spent a considerable
amount of time being verythoughtful about formulation and
supply chain.
Um, and so our otherinvestments in the space, Magic
Cactus and Delta, um, you know,incredible entrepreneurs, really
(50:33):
focused on formulation andflavor and consumer insights
that led to their approach tothe category.
Magic cactus's case, veryunique, flavor-based with cactus
water, um, multicannabinoidmicrodose strategy, right?
Delta really kind of positionedthat as a mass seltzer in five,
tens, and twenties, and and oneof the earliest to the market
(50:56):
to kind of build that brand.
Um, but you know, really rootedin consumer feedback.
Um, and in those cases, theyare outsourcing a lot of the
supply chain, um, but they'remaniacal about margin structure.
Um, and so I think that it'snot about necessarily today are
you profitable.
(51:17):
It's about do you have themargin structure that we think
at certain scales will allow youto be profitable and and get
you to those points ofinflection.
And so um that's a little bitof how we think about it.
Um, but yeah, you know, it'sbeverage, it's uh it's it's a
it's typically a harder categoryto have uh amazing margins out
(51:39):
of the gate.
Ben Larson (51:40):
So your portfolio, Go Brewing, Delta, Magic Cactus,
Miss Grass, love those brands.
Putting them aside, who do youadmire in the space right now as
far as what they're doing, asfar as owning the occasion or
really listening to consumer?
Like who's who's out therenailing it?
Jeff Cantalupo (51:59):
Yeah, I'll I'll speak to two that just super
continue to be impressed by.
I think the nowadays folks aredoing an incredible job helping
to build this category.
I think Justin's a greatoperator.
Um, they know how to show up.
I think I love that they havetaken an active strategy against
um events and building thatbrand on you know, on premise
(52:24):
when when and where they can.
And, you know, quite honestly,I think the bottle format is
great for them.
I think it's it's good for thecategory for them as kind of
some of the early leaders tokind of establish the category.
And so I think they're doinggreat work.
Um, another one of my favoritesis uh Uncle Arnie's.
I'm a huge fan of Theo.
I I think they've they're oneof, you know, let me let me
(52:48):
preface all this by saying thereare a significant amount of
products in the market.
There are very few brands.
I think Theo and the team inUncle Arnie's have have built a
brand, and I love that.
Um, I think they know who theircustomer is.
I think um they're fun, they'recreative.
Um, and I love seeing that inthe category.
(53:09):
So big, big respect for thosefolks as well.
Um, but those are a couplegreat brands.
AnnaRae Grabstein (53:15):
Awesome.
And shout out to us for havinguh Theo from Uncle Arnie's on
the pod a couple weeks ago.
And actually Kate Miller, CEOof Missgrass, uh was on the pod
probably about a year ago.
Um, so look back in thearchives and hear from Kate
about her journey with MissGrass as well.
Um, I love those tips, reallygood ones.
(53:36):
And uh Jeff, you know, we're atthe hour, which means that it's
time for our last call.
So, what's your final messagefor our listeners?
Advice, call to action, closingthought.
Jeff Cantalupo (53:47):
Listen to your customers.
That's it.
Could have called that one.
Ben Larson (53:52):
Amazing.
AnnaRae Grabstein (53:54):
On brand, on brand, Jeff.
Ben Larson (53:56):
Wait, wait, I got I got one last call question.
Will there be another uh SoCurious conference?
Jeff Cantalupo (54:02):
Great question, Ben.
I have a meeting right afterthis actually to discuss our
plans for it.
So, yes, we're planning ondoing it again um in 26.
So I would love for y'all tocome back out.
Ben Larson (54:13):
All right, Jeff Cantalupo, listenventures.
Thank you so much for the time,the knowledge.
Uh, it was really greatchatting with you.
Jeff Cantalupo (54:21):
Thank you, Ben.
Thank you, Anna Ray.
Ben Larson (54:23):
All right, we'll talk to you soon.
We'll see you at SoCurious2026.
All right, folks, what do youthink?
It was an incredibleconversation.
Let us know if you have anyfollow-on questions or anything
else.
Let us know who you'd like tohave on the show, what topics
you would like us to cover.
Thank you to our friends andfamily at Virtosa and Wolfmeyer,
and of course our producer EricRosetti.
(54:45):
If you've enjoyed this episode,please drop us a like, a
subscribe, a follow, a share.
Your friends, your family, yourloved ones.
Drop a review on ApplePodcasts, Spotify, wherever you
listen to your shows.
As always, folks, stay curious,stay informed, and most
importantly, keep your spiritshigh.
(55:05):
Until next time, that's theshow.
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