How Tejas Tonic Built a $1M Hemp Drink Brand and Took a $150K Deal

How do you run a business if you have no idea if it'll even be legal in a week? That's exactly what's happening here at Tejas Tonic. They make CBD and THC infused drinks. Year one, we crush it with one can. Year two, we get can two, can

three, get that moving. Later that year, we got out the gummies. We're just killing it, And it's like, okay, cool. Forty five days in, the state of Texas says we're going to ban THC. If I'm not careful, we're going

be out of business by May. But he's got a lot of revenue and loyal customers. The question is, does he have an opportunity to spend some money to grow faster? That's where I come in.

As a responsible business owner at this moment, if I were to take on capital from somebody for equity, it would be irresponsible. There's too much risk.

Yeah.

So what I'm doing in the meantime is I've come up with a hybrid situation where I'm basically allowing people to invest in inventory and I'm giving high interest returns. If you just say, I'll loan you $150,000 and you pay me back in eight months at 13%, I'd say done.

Hey, I'm Nathan. Nathan, Aaron Owens. Aaron, it's good to meet you, man. Nice to to us.

Come by.

Come on. So this is the the shop or the warehouse or what is this?

This is this is HQ slash the warehouse right here. This is where we hold all the goodies before we go into the world. So a a locally grown, locally manufactured hemp beverage with both CBD and THC in it. Okay. And for my mom watching on YouTube right now, has no idea what those are, give her a comparable.

Like, it a drug? Is it weed? What is it?

So cannabis is cannabis. High THC, low CBD cannabis is marijuana. High CBD, low THC cannabis is hemp. Farm Bill has essentially given us the ability to cultivate, manufacture and market industrial hemp and industrial hemp products. Our primary products are beverages. So we started here with our natural lime and, we moved to agarita berry and then our frio mango. These initial lineup here are all tall boys.

They're twenty five milligrams CBD, five milligrams THC. And then the one thing that is very unique about us that no one else does is they're all TURP boosted, meaning that when we cultivate, we extract all of our terpenes off of our hemp and then we reintroduce them at the point of manufacturing.

I don't know what that means.

Every cannabis has an essential oil at about one to 2% floating on top of the oil itself from the plant. Those are essential oils. In those essential oils are something called terpenes. It makes it smell like it's going to smell, makes you feel like you feel, and gives you either the energy or not.

Your first three drinks, were they all uppers or were they downers?

So I'm moving for an upper.

Okay, you're selling up. You think they sell better?

Well, I think that giving people energy and making them creative is helpful. I have two businesses, Tejas Hemp, which is my production side, Tejas Tonic, which is the beverage side. So we started Tejas Hemp on paper in April 2017. So Tejas Hemp started with making CBD products.

And your first sale there was in 2017?

Yes. I was ranching basically at the age Like cattle? Yeah, cattle and goats, right? So I got caught with my first cannabis plants when I was 17 by my parents, thankfully not the law. And by 23, was very obvious you're either gonna have to move to California or face potential prison time if you continue on this path of cannabis, which you love. Yeah. And I didn't want to do either. So I loaded up my dog in

my pickup and I drove to West Texas and I started day working, which means I went and hired on in this cowboy. Show up in the morning at 6AM, you pick a horse, you work till 6PM, and then they pay you $100. Eight and a half years into this whole experience, I got my first ranch lease. There's two things I love, weed and ranching. Found this house, it was all decked out for growing. It was $80.

I went to the bank, I said, can you give me money to buy this house in Colorado to grow weed? And he's like, hippy. They all call me hippy. Hippy. We can't do that. I'm like, well, what can you give me money for? Can you give me money to buy cows? And he's like, we do we do loan money on livestock. Basically I had $16,000 That's all I had. And he gave me a loan for $16,000

with my $16,000 I bought 21 head of cows and I bought 32 head of roping cattle for 32,000. Ten days later, I sold the 16 cows for a thousand dollars a head. I had paid $7.50. Paid the $16,000 loan off, had $5 in the bank and leased all 32 head for $40 a head a month. So just like that, I had $5 in the bank and I had $12.80 dollars coming in per month. Yep. And then

I went back to him and I was like, I wanna do this again. I spent the next eight years building my little ranching empire, but CBD's happening. 2019, I come back and I get to town and I... All of a sudden, every hippie in Austin has got CBD. Everybody's got CBD. I found an investor in Houston, and he was really into me and my story and the whole nine yards. We went to Houston and we built our first ever production run of full spectrum Tejas Hemp water. It was full spectrum CBD water in a water bottle.

How much did you raise to do that all in?

Maybe $10. Okay. And 10 days later, he gets diagnosed with cancer, dies a week later, and then three days later, COVID happens. Jeez. So everything just falls apart overnight. I was like, well, that's that. And then boom, 2020, the state of Texas allowed us to farm. So in 2020, we grew our first crop, Made the first cans 11/07/2022, which was my fortieth birthday. What does this retail for? $5.99. And and what were

your total sales first year 2022? We were the

first people to market. All my competition, all they know how to do is put THC in water. Okay, I'm going blow them away by having full spectrum cannabinoids, much less terpenes. They don't have what I have, but how do I catch their attention? And so what I thought is I'm going build a tallboy because everybody else was in a 12 ounce and I thought I need something bigger. I need it bright. So I made a tallboy

and I made it at what I thought would be strong enough to get somebody to feel it, but not so much that it takes a soccer mom out on her way home. We were the original Texas cannabis beverage. I sold three fifty ks of that the very first year. I went and found this independent distributor in Austin who is known for being very successful at hitting the independent markets.

And what percent of sales does he keep?

Distributors in the beverage industry are 30%.

When you're selling one of these cans for $5 a pop, right, about a dollar 75 is

Every market's different. Austin, Texas wants 45% at retail, which is crazy, right?

So what is your margin on this? You sell for $5. What are your cost of goods sold? 45% to to the the retailer, 30% to your buddy, the distributor. So you've got 25% left to work with?

Yeah. About 25% left. Which is how much is that? Dollar. Dollar 50. Dollar 50. Yeah. That's not actually correct though because I know that my margins are higher.

Better, yeah. You have volume now so you probably negotiated better deals.

Yeah, and manufacturing costs came down. I mean, I can tell you right now that our margins are very good.

I wanna get to your newest product so I can pop one open and drink it with you.

So this is a low dose. This is very friendly. This is like you can dump this in your cooler and drink it all day and you won't get so overwhelmed. It won't get heavy. So what

do you sell one of these for?

$4.99. We collaborated with a local brand called Cowboy Pools. Okay. And we made a co branded product that was called Orange Sunshine. It was co branded with Cowboy Pools. We put it out across both of our networks. Total raging success. So we decided to go ahead and bring it in line and make it a permanent fixture, which is what you're doing right now. So we just made our first thousand cases of that maybe a couple months ago with this new branding.

What will I feel about an hour after I start drinking this?

I mean, in an hour, you'll just feel like you're cool and calm. So now we're in the warehouse. This is basically where we hold all of our pallets of tonic. About every quarter, we'll go in there and build 4,000 or 5,000 cases and we'll get a bunch of pallets. We typically stack them all the way out, almost all the way to that couch over there. Right now, we're sitting pretty low on inventory. We're going into production right now in July. We'll produce another several thousand cases. And this place will

be maxed out again. 2023 was your first year, that's when you did the 350,000 of sales, right? Yeah. '23. What did sales grow to in 2024?

Three times that. Wow, okay. Year one, we crush it with one can. Year two, we get can two, can three, get that moving. Later that year, we got out the gummies. We're just killing it. Right? And it's like, okay, cool. So I went to a marketing consultant. I brought her on. It was a big deal. She's a real professional, like an actual executive, know, 6 figure stuff. I'm going into the red by hiring her, but by

month three to five, I'll get back in the black. At the same time, we were gonna be bringing on an investment round. Forty five days in, the state of Texas says we're gonna ban THC. So now there's a term I've coined that's called political instability. The market turns into an f'ing nightmare. Right? So from there to the rest of the year, we lost 57 and a half percent of our third party distribution, which at the time

was over 50% of our revenue. Hundreds of thousands of dollars, right? And I'm like going, the investors, they're gone. If I'm not careful, we're going be out of business by May. And so thankfully, the lady that I hired is a genuine badass. And so she basically came in, we built out our new management system, we built a new website, and we started a direct to consumer program. We were able to make up all those sales, which

was hundreds of thousands of dollars through direct to consumer and through self wholesale. So by doing that, we actually raised our top line revenue that year by 60 ks, which isn't a whole lot.

So 2025 is about a million, a little over a million of revenue.

Plus 60 ks from the year before. It was like, that's insane. Finally, in September, they ban it. It happens. But then the governor vetoes it. Right? So the governor vetoes the bill, and, oh my God, we're all in business. We're gonna make it. Somehow, we survived to September, which is crazy.

Mhmm.

And then we get the veto, and we are like, boom, boom, boom, boom. So we actually took on a few 100 k of investment. The round opened up and we are rocking and rolling. And forty five days later, during the government shutdown, the federal government said, you know what? We're shutting this down. Political instability can take your business out. Out. And so I just basically backed the throttle up. I had to let some people go, had

to reduce some, you know, just man, I had to reduce how much money was going out. I rolled back $50. I went to the core people and I said, this is what we can do. This is what we can afford. If you want to stay, you can. If you don't, I totally understand. And everybody was like, we're wrapping your back.

People took some pay cuts as well. Yes. Yeah. Including this guy. Have you paid yourself at all?

Uh-huh. Not since then.

What's going to happen in 2026?

So what we're looking for right now is the is the lobby, the beverage lobby to be able to potentially create a bill that would have a carve out to save beverage. It's gonna be limited to five milligrams per serving if it happens.

So as you're waiting for all these law things to pan out, we know we're shooting this in June 2026. So have you had no sales at all this year? You're basically in a hold holding pattern?

No, we're selling. Okay. Yeah, we're hustling our ass off.

So you're still selling direct online?

No, we're not losing money. We're we're still holding our ground. Okay.

So if it keeps going like this, what do you think you'll finish 2026 with in terms of total sales?

I mean, we'll end up growing a little bit.

It's like 1,100,000?

Maybe a little more.

How many cans is 1,200,000 of sales?

It's in the realm of 12 to 15,000 cases times 24. About 350,000.

350,000 cans a year. About what's the plan to go from a million per year to three, four, 5,000,000 a year?

Our industry is full of something called synthetic THC. So we are the only brand in The United States that we know of that actually grows their own stuff. Now there's probably got to be one somewhere out there. We just haven't found them. But as the synthetic THC started to hit the market a couple years ago, everybody sold two milligrams. And you go to the convenience store right now, there are 50s and 100s, it's because synthetic THC,

it doesn't affect you the same way. You have to have a lot more of it, right? You go to the convenience store and you could buy a can this tall with fifty milligrams for $7.99 See what I'm saying? So what's happening is out on the front line, we're losing... We're actually holding our ground, but we're not growing into this space because other people are buying 50s and 100s. We got to get our stuff in the market

at 25 and 50. We've got to because that's where the sales are. And so we basically created a new product. We are coming out with something called laid back lemonade. So we're taking laid back lemonade and we're making it in a twenty five CBD, twenty five THC, and then we're making one with fifty THC with my formula, all full spectrum terps. When you drink one of these, me personally, I feel like I'm looking through a kaleidoscope.

So the growth plan is simple. In this crazy political instability, go create two products that aren't carbonated, get them into the market, capture the 20 fives and 50 sales. Right? Get those sales back, get a fat royalty on it because you built the deal and you got it done. Regulation is gonna ensue, and they're gonna say you can only have five or ten milligrams per can. I don't care. They're gonna say one them. Then everybody's gonna be in a situation where everybody's selling the same stuff and it's all fake. The only thing different will be what's in it.

Which is where you come in.

Which is where we'll start to crush.

But tell me what it takes to grow this. The reason I do this show is I wanna find really passionate, interesting business owners with a great product and try and identify a way where I can put in capital to help them grow faster. Do any of these plans you're talking about require a capital infusion?

Oh, sure. As a responsible business owner at this moment, if I were to take on capital from somebody for equity, it would be irresponsible because why? Because there's no current line of sight. If they do make it illegal federally, then we're either everything's gonna be over or we're gonna start operating on a state level under the state regulatory framework, which is what everybody thinks. At that point, it would once again be responsible to sell equity. So

what I'm doing in the meantime is I've come up with a hybrid situation where I'm basically allowing people to invest in inventory and I'm giving high interest returns where you invest in inventory production and then you can basically make X percent every week. We pay back every week. So every can that sells, we pay back every week.

What percent? 12. Okay. So if I put a $100, you'd pay me back a 12% in

interest Six months.

And so you'd me back my $100 plus 12% in six months.

Yeah. And then you could do that twice in a year.

How many dollars do you have in that program right now?

At a 100 right now, about to take on... I'm at a 100. I think we've paid back like 85 of it. I have three people that split that $100 this last time around. I see.

If I simplify your life so you're not dealing with four different investors and I just do a full 100 or 150 ks, would you give me a little premium on the interest rate? Would you do 13%?

What I do is I go, how many cases am I going to produce? What is the time it's going to take me to sell through? Right?

Which is what usually?

Which is used to be every ninety days. But right now what's happening is we've moved into more of a direct to consumer thing. So it takes us longer to move the volume, but we make more on the margin. My guarantee is I'll have you pay back within four to six months. Now I knew it would only take three to five, but I wanted to make sure I made my commitment and I want to make sure that

they could do it twice in the same year. Like right now, would it simplify? Absolutely. Would I do something like that? Yes. So right now, what I need to do is do this production run, is about 70.

So your ask right now is $70,000 to do a production run for how many cans?

Use 70,000. Okay. 72,000.

Is that... Call it a dollar a can. Is that accurate? Is that the...

That's real.

It's like...... The real thing. Think this is a very interesting... The branding's amazing, and I always look for Founder Market Fit. You are the perfect person to be building this brand. You're not some fake wantrepreneur who just wants to sell this. I mean, this is your life, clearly. Can just... I'm in. I can feel it. So I wanna do something now, and I'm happy to expand other stuff later. It sounds like the Clear Ask right now is $70,000 to go produce 70,000 cans. Is that about right?

Yeah. I would basically need enough money to build 3,000 cases of Tallboys, and I just built a thousand of these, so we'll say 2,000 cases of these. So 5,000 cases is the number times 24, 5,000 times 24 is 120 ks. So right now, around 120 to 140 would be the ask. How fast could I turn it over is the question, and that's where the risk comes in. Could I guarantee right now in

June that to flip that by the end of the year?

It's five thousand cases. I usually move five thousand cases in four months. So it would be right on the line. Like I would want to be like, Hey, I'll do this by the end of the year, but give me a thirty to forty five day grace period just in case. Like, I wouldn't want to commit and then get in over my skis. If you just say, I'll loan you $150,000 and you pay me back in eight months at 13%, I'd say done.

So if I offered you $150,000 and asked me to pay back $180,000 so I'm making 30 k and you pay that back in eight months, is that a deal that would work for you?

If you gave me 9 months.

I would do that deal.

I'm done for that.

Let's go, man. Really excited. You serious? Let's get to work. What do you think?

This is like a random... I just thought we were gonna sir. No. That's what I usually get out of.

You thought we were gonna shoot TikTok? You're dead serious. No. No. We we make make deals. Yeah. We That blew

my mind and made my day. Why? Because a lot of people come around here wanting to talk a lot of stuff. Not everybody's ready to make a move.

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