Two San Francisco entrepreneurs are looking to create the No. 1 wellness brand in the mass premium marketplace. In its first 15 months, the duo has managed to generate $500,000 in sales, all of it by word of mouth. If you’re looking for a possible equity crowdfunding opportunity, here are three reasons to invest in Juna, California’s newest CBD and THC product sensation.
Before I get into the three reasons to invest in Juna, let me explain what the wellness products are and what Juna plans to do with the funds raised on the crowdfunding platform Republic.
Juna offers two primary collections of drops: a Hemp CBD collection with less than 0.03% Tetrahydrocannabinol (THC), regulated by the Food and Drug Administration and sold nationwide on a direct basis from its website and more than 30 online and offline locations. The second is the Cannabis THC collection, which is only available in California.
The Cannabis THC Collection includes three types of drops based on the level of THC: Nude, Jade, and Gold. The Hemp CBD collection includes Mood and Sleep drops and a Body oil option. Prices vary between $60-$90 per bottle.
Juna was one of five featured brands in the Beauty Independent, an online publication focused on up-and-coming beauty brands.
As for the funds raised, it plans to put 40% toward marketing and public relations to get the word out beyond its existing customers’ circles of influence. Another 30% would go to hiring a sales manager to build revenues and a social media manager to spread the word. The remainder would go to research and development and packaging and samples.
Anyway, here are my three reasons to invest in Juna. Be sure to do your due diligence before committing any of your hard-earned capital to this or any other private investment.
Don’t Invest in Juna Just Because It’s Women-Led
A lot of businesses in this world are run by men who don’t have a clue what women want from their products and services. It’s great to see women starting businesses in the CBD and cannabis space. Founders Jewel Zimmer and Taylor Lamb would have a better understanding of what women are looking for in wellness products than many of their male friends and family.
Data from Forbes suggests women continue to represent a small portion of the executives and staff working at cannabis companies in the U.S. With more women starting these kinds of businesses, the imbalance can be rectified.
In 2020, a lot is going on with women entrepreneurship. This year, it’s expected that the ratio of women-owned businesses in this country will hit 50%. Further, venture capital investment in female-founded firms is skyrocketing as VCs come to realize its good business to back women-led firms.
Does this mean Zimmer and Lamb are guaranteed success just because they’re women? No, it does not. However, just as data has shown women make better CEOs, I believe having women-led founders at Juna gives it a leg up on the competition.
Now, all that stands between Juna’s success and failure is execution.
The Average Investment is Low
As I write this, Juna has raised $176,678 from 478 investors. That’s an average of $370 per investor. Most people who’re working and earn a decent living could probably afford to take a flyer on a startup like Juna and not be hurt if it doesn’t work out.
That’s the beauty of equity crowdfunding. Its small amounts invested by passionate consumers of these products and services. The same thing has happened with fractional shares in public investing. You can now buy $100 a month of Berkshire Hathaway (NYSE:BRK.A, NYSE:BRK.B) stock or whatever publicly traded business floats your boat.
Why shouldn’t private investing be the same?
Wisely, regulators have included in the crowdfunding rules an annual ceiling for how much regular, unaccredited investors can invest.
For me, the smaller the average investment, the more attractive it becomes. In about 10 years, there will be enough data to find out if my instinct was correct.
The Average Order is High
According to Juna’s campaign page on Republic, the company’s average order is $121, with 32% of its orders turning into repeat customers. While I’d like both of these numbers to move higher (notably, the recurring revenue), I think it’s a good start for approximately 15 months in business.
The company has a gross margin of 78% on its products sold direct-t0-consumer and around 50% at wholesale.
Furthermore, the company had sales of $282,477 in the fourth quarter of 2018. Their distributor rolled that inventory into the first and second quarters of 2019. That’s in addition to the $166,717 in sales in 2019 that’s listed in the company’s financial statement, which brings the total to $449,194, just slightly below the $500,000 figure mentioned earlier.
I do like their vision for the business. Juna could raise a lot more money on Republic if they tightened their presentation.
Will Ashworth has written about investments full-time since 2008. Publications where he’s appeared include InvestorPlace, The Motley Fool Canada, Investopedia, Kiplinger, and several others in both the U.S. and Canada. He particularly enjoys creating model portfolios that stand the test of time. He lives in Halifax, Nova Scotia. At the time of this writing Will Ashworth did not hold a position in any of the aforementioned securities.