This interview represents the knowledge for running business sustainably and using cannabis for medical purposes. Using cannabis for entertainment purposes in Thailand is not suggested.
After we met ‘Mother Pook’ Oraphin Payapitaksakul and ‘Khun Mee’ Thanarat Jittapayap and had a conversation about THCG, which Kan Kul Engineering invested over 250 million Thai Baht, we were lucky enough to meet Mr. Cameron Clarke, co-founder and CEO of Sunderstorm.
Sunderstorm, one of the biggest cannabis companies in the United States, founded in Los Angeles, California, is famous for Kanha, a gummy from this company.
Sunderstorm has set up their business not only in Los Angeles but also in Colorado and Canada, where they have been welcomed by most customers. Then, Cameron decided to form a collaboration with THCG as his first partner in Asia.
We had a rare opportunity to have a conversation with Cameron about the way he believes businesses should be run. the cannabis business opportunity, and much more.
Let’s just ask some easy questions. I hope it’s an easy one for you. How does marijuana impact or influence your life?
For me, I’m a huge advocate of plant medicine. I’ve traveled all over the world and met many different jingles and med-shamans, and I’ve had a variety of experiences. I believe very much in the power of the plant. These plants have been around and used by humans for millennia, so for me, cannabis is really one of the most important plant medicines that has been healing people for many generations. I think it’s just a very exciting time for us that these plants are now truly becoming medicine that people can use to heal.
Could you explain the scenario of cannabis in Los Angeles before you run the company? Is that already a problem for cannabis to be sold or used by the people in that area?
California has a very rich tree of cannabis as well. I personally believe that we make the best cannabis product in the world, and it’s because of the rich legacy that we have here. So, in 1996, California passed a law allowing people to use cannabis for themselves, but it never developed into a regulated system.
So, in 2014-2015, when we came into this industry, it was a gray market, so it wasn’t fully legal, but it also wasn’t fully illegal. It is still not federally legal in the United States, at least not in California. So we are still in the process of laying the groundwork for cannabis to be consumed by everyone, to be used and sold.
So, at that point, it’s difficult to operate, you need to operate in the darkness, right? And so it was sometimes a little bit dangerous, right? And sometimes we had to pay very close attention to who we were, who we used as our business partners. Like I did in 2018, when medical and regulatory reform became legal in California, everything changed overnight.
Of course, taxes became much higher, making running a business more difficult, but at the time, we couldn’t change the industry and we could evolve to an industry without fear of being shut down. And in this industry, that is a complete game changer. We’ve seen that there are a number of different stages in the United States, and now the same exact situation is happening in Thailand, and it will happen in other countries in Asia as well. So, as I said before, it’s an exciting time for people in the cannabis industry.
Before you ran to this medically, have you ever tried cannabis by yourself?
Oh, definitely. I have not been a huge consumer of cannabis, I use it once in a while. My body is very sensitive to cannabis, so I don’t need it very much. I prefer a lot of CBD, so that is very helpful for me, but I also enjoy other plant medicines more than I think. This is a great time in the world because other plants are becoming more important for consumers as well.
Why are you interested in finding plant medicine?
I think that there is a role for what we call Western medicine and a role for Eastern medicine, right? So, we have done a good job of blending these two together, and the traditional medicine would have been going through things like herbal remedies and plant medicine, and the Western medicine is the pharmaceuticals. I believe they both have a place in people’s lives, but I believe it’s critical to test herbal remedies and have evidence to back them up so we know they’re safe and we know exactly what they do. So, I think that is an important part of how they should be looked at.
Back in the 90’s, How did you handle if marijuana was illegal at the time?
When it is in an illegal phase. You can use cannabis and are concerned about the legality of it, but there are no restrictions, right? There were also no rules, regulations, or taxes, right? So the downside was that there were a lot of pesticides and dangerous chemicals in the cannabis that you couldn’t understand. What’s the potency, right? So sometimes you would take a product and it would be very mature, too strong, and sometimes you would take it faster or weaker.
There was a perpetual inconsistency in all of the products in the industry, and it was oftentimes very dangerous to consume them because of these chemicals. When the industry became regulated, everything had to be tested, which meant that the thing in process became consistent, safe, and consumers could now rely on it because they knew what the product would be. So that’s the good side of it.
The difficult aspect is that the industry is overtaxed. (laughing) As a result, the cannabis industry in the United States is very expensive. And so many small operators, boutique farmers, and small businesses that are very interested in our products are struggling to survive in the cannabis industry today. So that is one of the negative things.
Unfortunately, a lot of the exciting innovations happen over time. not developing because small businesses can’t survive and can’t make money, so it is a challenging industry today. But I think we’re working out the tax situation today and the equality between the lightish market and the unlightish market. That all happens over time, and we will all fix this situation, but it’s a thick environment today.
What is the risk of running a business that belongs to the gray market?
There were numerous risks. Some people ran to the jail, lots of people ran to shut down, and lots of people lost a lot of money, right? It was a difficult time because a bank account was being investigated for the casts that were stolen from the store. There was a conflict below between the police and the agency, and the United States tried to shut down this industry. And those of us in this industry try to build the industry. So it’s a very difficult time, and we all have to operate in the shadows.
How do you imagine the future of the company, like a 1-year plan or a 5-year plan?
I think in the beginning, the way we look at it is that we want to start a chemicals company and renew the different states’ efforts to legalize cannabis. My partner and I looked at various markets and said, “We’re supposed to operate,” because I was looking everywhere, and what we discovered was that the California cannabis market was by far the largest in the world. They provide high-quality legal cannabis recovery in a legal setting. And it was, and it was also the most competitive.
So we decided to start in California, because we felt that if we could develop products and win California, we could do anything from there. But our mutual goal is to become one of the top 10 brands in California, and we should hit that goal at the end of 2018 or early 2019. Then, from there, we decided that now we could actually expand to a national cannabis brand. So, in 2020, we began planning for our national expansion and introduced that plan by launching into three states in 2021, and from there, we also launched into Canada. That has been the focus of our efforts for the last two years.
Now, because we were successful in those days, we wanted to look at becoming a global cannabis brand, which is why this opportunity in Thailand is so exciting. Because we don’t have the opportunity to exploit the United States, we can’t even ship the product from California to Nevada, so we have to set up an operation instead of a separate one. As a result, we are hampered; we have handcuffs on and are unable to export.
With the opportunity here in Thailand, we have the benefit of the 70 million-person Thai market and a rich history of herbal medicines and cannabis. It’s so exciting. But we also have the incredible opportunity to export our products around the world. And now Kanha can become the first truly global cannabis brand. So, naturally, we look to California, and then we want to win in the United States, which has the country’s fourth-largest consumer brand. And now we’re looking to be one of the first truly global cannabis brands.
You reach the goal of the company within four years; how is that possible?
A lot of hard work and an amazing team or group of people. We have a fantastic team at Sunderstorm who worked very hard, were very smart, and were very dedicated. So we realized very early that we wanted to hire employees who really understood the value of cannabis and the meaning of the cannabis plant. Because they have the passion to build it into the global cannabis plan. It’s a lot of work for our team.
I saw your Linkedin profile, and I read some of the employee’s profile. So what kind of person do you want to work with?
We need all kinds of different people in our company. But number one, they have to be passionate about the plants; that’s really important. Number two, they have to be dedicated, truly wanting to build something, that’s an important aspect. because our entire team works with production and makes gummies every day. It is important for them to be part of building something new. I think that is a very important aspect. In addition to that, we have quality people who are diligent, detail-oriented, and dedicated, right? And they believe in our vision and in what we’re trying to do, and I think those are the most important aspects of our team members so far.
Courtesy of Sunderstorm
What are the things in which you invest the most in the company?
I think we try to invest in people. It’s really important. We have a lot of very young people in our organization because they all have passions for the plant. We have the production manager about 23–25 years away from them. However, we must invest in men to help them develop the skills necessary to become managers and to improve their skill sets. That is why investing is so important to us.
But of course, you also need to invest in the infrastructure, and I think one piece that is so exciting for me is that I’m a technologist. So we knew from the beginning that we had a low-cost structure that I think is the best in all categories in this industry. We build it because we want to use technology and a system to ensure proper construction. That is why we are one of the few companies that has been profitable over the years, while others are losing a lot of money or have raised a lot of money with little to show for it today.
We’re very scrappy in how we operate our business. But our investment in the system—we’ve probably already spent more than a million dollars on our ERP system, which tracks the entire business, and we know the cost of every single gum, for example, at every step of the process thanks to our system. We knew that we couldn’t scale the business properly without investing in technology.
How challenging is it for you to try to expand your business to other states?
It’s challenging because you’re setting up an entirely new business. This is complicated because every state has different regulations. You have to set up a new manufacturing facility because you cannot ship across state lines. So we have to set up new manufacturing. We have to have separate sales and separate marketing. Also, the consumer is likely different. You have to handle the perception of a national cannabis brand that also has local fields because people like to use something that is made just for them. It’s so nice of the marketers to adapt to that, but it’s very expensive in the United States to build out operations in each state because shipping across state lines is not similarly legal. So that will happen in the medium-term future.
Furthermore, the car-structure can place it in different area states; the price of cannabis varies by area state, so we can ship raw materials across state lines just like we can ship cannabis.
When you tried to expand your company outside of Los Angeles, what was the challenge you faced during that period?
We have some challenges, such as in Colorado, where we have our own operation, which is very expensive. Colorado was the first legal market in the United States, so it’s highly comparative, which proved more difficult than we anticipated. So we restructured to a different model in Colorado. That was a challenging market for us. You know, you learned a lot along the way, and the direction in which you’re going is not exactly where you want to go. So I’m sure I’ll see more challenges everywhere I go in this industry, but I’m prepared to handle them.
Courtesy of Sunderstorm
After being successful in the US, you tried to expand to Canada. What is unique or similar about doing business in the United States?
Canada is a different market for us. We basically launched Canada during COVID-19. We didn’t want to expend too much energy because it was far away. So in Canada, we deal with licensing. So we trend them, and they make gummies there. We must concentrate on the energy market in Canada. Because it’s a very challenging market, there’s too much Canadian market, and the market is very volatile. So, it was an opportunity for us, but it wasn’t one on which we expended a lot of time and effort. So we struck a licensing agreement, and it’s unusual for us in the United States to focus on energy.
From an outsider’s perspective, how do you see the cannabis market in Thailand?
This is really interesting. My general perception is large, like the evolution of California. It’s different, of course, but Thailand also has as rich a history as Canada and California. And it’s the black market here, so recently we talked about how to turn the black market into a regulated market.
So, when the medicinal landscape changed in 2018, some new products became available. Everything changed in June, when Thailand had the ability to basically sell cannabis anywhere. which is a century going on in California, and it was regulated, and it’s not illegal here either. We have cannabis everywhere; in California, it was in 1996–1998 during the gray market period. So we had many years of that before, and I don’t think it’s any different here. And Thailand, I’m sure you’ll have a regulatory system in place within the next 12 to 24 months.
However, it is a good market at the moment—it is a little bit of a gray market. It’s similar to California in that there’s cannabis everywhere, and there’s a lot of cannabis consumption. But now that the market is regulated, there is no testing, so you don’t know what’s in the cannabis, and at some point in the future, they’ll have to shut down the black market and figure out how to operate now and how fully people are buying in licensed facilities, and that is the century that is going on in California.
Courtesy of Sunderstorm
I think it’s like a microcosm that’s happening in California, but it must be faster. So it’s very interesting to see how this market for medicine is evolving in June. Thailand is probably surrounded by over a thousand shops. You don’t know what’s in the products; you don’t know whether they came from the black market or the regulated market; it’s very confusing today, and everyone in California is confused, too. So there are a lot of places that are similarly fast. And I believe that in the future they will have a better chance because there is a lot of competition, which has also changed things. But it has the opportunity to export around the world, creating a whole different dynamic for Thailand than what we have in California and the United States. As a result,
Thailand will move beyond what we are doing in the United States until we figure out how to survive the fundamental illegality. I also have a lot of optimism that the ties will be put together in a regulated way that will not be overly burdensome on the provider and the operators. I don’t think its taxes are as high as those in the US. I think they will give them a chance to actually build their companies. I think this is the most important aspect. The thing is that the cost of labor in Thailand and the cost of living in general in Thailand are significantly lower than in the United States. So that is perfect for creating a global escorting opportunity from Thailand; that’s one of my most I think it’s one of the most exciting things about this market.
How do you reach someone to collaborate on business in Thailand?
We have a lot of experience working with consumers in the United States. I think that’s one of the reasons that the THCG wanted to partner with us—because we understand how to educate the consumer, how to inform the consumer, and how to use social media. For example, to increase consumer awareness.
I think all of the techniques will be similar, but of course, Thai culture is completely different. So we need to have a better understanding of Thai culture. I think that’s what our partnership with THCG will help us do—use their local resources to discuss our strategies and refine them for the local Thai market. But I think we also have other opportunities; we will have other types of opportunities here that we don’t have in the United States. I think we’ll be able to do many different types of work here. I think that’s going to help us.
The most important thing to remember is that it does not exist in Thailand because it hasn’t had cannabis, beer, or drugs since 1972. I think that was the year. And we have the same experience in the United States, and you basically just have to educate the consumer, one by one, on how this plant is safe and can help them. We saw a lot of COVID-19 in the United States.
A lot of consumers who wouldn’t normally consume cannabis found that they could use it for sleep. I think the decisional aspects are very important to attract new consumers and because Thailand has a rich herbal remedy history. There are many consumers here who prefer plant medicine to pharmaceutical medicine, and I believe we will be able to capitalize on that; it’s just a matter of educating them and making them feel comfortable with the idea of receiving true medicine.
Why did you decide to be a partner with the THCG?
Number one, they’re committed to a fully regulated system. They have a lot of experience with cannabis. They have their own facilities in their partnership. They have access to really incredible facilities that will be able to make a lot of different types for the domestic market as well as for export. And they have a great team that really understands this business, and I think that’s very important. And then finally, they have excellent government relations, so I think that’s valuable for us as we build the business together.
I would say one more thing, they’re building a very powerful infrastructure, and they have recognized that by bringing Kanha in as a powerhouse brand in the United States. It is going to help them build a stronger connection with the consumer than their competitors. They understand the value of the brand, and we understand the value of the infrastructure and their relationship with the local team on the ground. All of that is true, but I think it’s really a perfect fit for us, and I’m truly excited about the opportunity to work on them.
What’s the newest thing that you have learned from THCG?
I think one of the most exciting things is really the quality of their facility. Our tour of all of their facilities last week left us very impressed. That, I believe, has given me the confidence to believe that we can actually build through global products that can be imported under GMG all over the world. I think that’s probably the most exciting thing I’ve learned. But everything else and how they operate and all the infrastructure stuff is terrific as well, but now I have a very high level of confidence that we can truly build something together.
So if you have any plans about expanding business in Thailand with THCG in the future, is there anything you can spoil us with right now?
I think we’re going to move very quickly. It’s a tricky market today to understand and navigate because of all the complexities. But I think that because of THCG licenses and an understanding of government relations, we have an opportunity to build this business faster and maybe some others in the industry, and so just look forward to the future; you’re going to see a lot of exciting stuff happening quickly.
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