Keenan’s Story
Keenan’s Story
BY: KEENAN PASCAL
Like so many organizations, Token Naturals has undergone a substantial transition over the past year.
Unlike many of our peers, our company’s major shift was not due to COVID but instead due to the evolution that comes with growing up. Our change was in the move from startup to corporation, working with speedy scaling combined with a mandate shift from extraction to manufacturing and packaging.
When we began Token, we envisioned and planned an innovative facility that manufactured and processed cannabis from end to end, downstream and upstream. We designed equipment that didn't yet exist and engineered a proprietary cannabinoid extraction process using that equipment which could produce more output with less input. Our plans were more conservative than other competitors, as was our spending, but we were still taking on a large and long build to get our facility up and running. We were going to extract cannabinoids from the flower and turn them into a distillate; the input ingredient used in many cannabis products. A fairly capital-intensive build, our plans required such line items as explosion-proof rooms, chemical storage systems and the creation of custom machinery.
However, the new cannabis market was building itself right alongside us. As an increasing variety of cannabis products were legalized, the market evolved. Licensed producers began to produce more competitively and there was somewhat of a race to the bottom—changing the pricing of the input supply for cannabis products drastically. The market price of distillate dropped from $15,000 per kilo to $5,000 per kilo. Suddenly, it no longer made sense for our margins to create our own distillate in house. We realized that the opportunity had shifted from extraction to the last mile of manufacturing. Upstream processing no longer made fiscal sense, but downstream manufacturing was underserved and had opportunity for innovation. We were receiving constant requests for filling and packaging services from companies that couldn’t quite fully make their desired product in house due to equipment or resource limitations. The real innovation our company could apply to create value was not in proprietary systems but in problem solving for the pain points our future partners were experiencing now. Here, we could take advantage of immediate gaps and immediate solutions.
We pivoted from upstream to downstream. We changed our hiring mandate to compliment that shift, moving from building out the research team to building out our production and product development teams. Our services focused more on formulation and product development. We changed the way we looked at our space and built our facility in efficient and agile blocks so we can easily change the use of each section. Our manufacturing priorities now lie in automation, efficiency and speed. We know the pains of transition were worth it as we’ve been rewarded with partners who are in need of the services we provide. Eventually, we will execute our original plans and create that proprietary system with higher yields, but we’ll do it when the margins and capital spend make sense and bring value to our partners. In the meantime, we’ll do our best to seize all the opportunities coming our way.
