STARTUP STAGE: HiBnb helps travelers find cannabis-friendly accommodations and activities

HiBnb

HiBnb is a marketplace dedicated to the growing cannabis community, providing accommodation and activity options to guests looking to explore with cannabis while traveling.

Having raised CAD $500,000 in pre-seed funding, HiBnb went live in Canada at the beginning of 2021 and is planning an official launch in September.

What is your 30-second pitch to investors?

HiBnb is a marketplace dedicated to the growing cannabis community, providing safe, responsible, inclusive accommodation and activities options to guests looking to explore with cannabis while traveling in countries and states that have legalized cannabis for recreational use. We also offer a channel for marketing and advertising to licensed cannabis brands and products.

Describe both the business and technology aspects of your startup.

Our business model sees three primary areas of revenue: accommodations, adventures and advertising. For the listings on our site we take a commission and service fee. Listing is free. Because of the traffic on our site, and the restrictions for the cannabis industry regarding advertising, we are able to offer licensed producers the eyes of an engaged community. 

Because of the engagement of the cannabis industry, we are able to take care of our hosts with gifts and merchandise so they understand how special they are to us. HiBnb’s focus is building community, and in the end, our guests travel with HiBnb because they know they are accepted as cannabis enthusiasts and received without judgement. They are also supporting others of like mind.

Our challenge in entering the market has been that customers - both hosts and guests - have technical expectations that are set by Airbnb, so the entry to market was to build a platform that could accommodate these expectations. This was no easy feat and is an ongoing effort.

All of the features that Airbnb offers - and then some - are on our site: Our calendar is integrated, we offer an automatic guarantee for property damage and liability for all accommodation bookings, guest and hosts can message each other and visit each others' profile pages, our ratings and reviews are tight and we are self-regulated so hosts and guests can report each other as well as listings if they are misrepresented or non-compliant. Even more, we are expanding our site to connect to automated channels so that the professional host can add hundreds of listings at once. We are set up for rapid scale and growth.

Give us your SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis of the company.

• Strengths: My partner Kelly Ehler and I have complementary skills where he has decades of relationships and experience in the corporate finance world and my experience is in sales and marketing, and working with creative and technical people to produce a product that resonates with the general public on an emotional level. We’re also situated in Canada, and being the first (other than Uraguay) to legalize cannabis, we are able to set up the foundation of the company on firm ground.
• Weaknesses: We have limited resources and intimidating competitors, starting up in an undeveloped and unproven market.
• Opportunities: We are situated at the intersection of cannabis and hospitality - both booming and growing industries that have a global reach. The potential for scale and adoption is unlimited.
• Threats: The lack of travel due to COVID is a threat, as is the illegality of cannabis in so many countries, and this may impact many people’s ability to openly use our services.

What are the travel pain points you are trying to alleviate from both the customer and the industry perspective?

The answer to this is twofold. First, we are solving the need for cannabis users to be welcome wherever they stay when traveling, whether they need to smoke indoors or not. Traveling with HiBnb means our guests will never need to look over their shoulder wondering whether anyone is watching, whether they will get reported or kicked out simply because of the smell of the cannabis. Cannabis users have nowhere else to go - being illegal federally, sometimes they have to sneak their use into their accommodations, and that is risky.

From the industry perspective, many hosts despise cannabis users. They don’t want them in or near their properties, so we’re helping both sides.

The second thing is that cannabis is now legal in many states but society hasn’t caught up with the law. There are no locations where people can ingest cannabis publicly. What if you want to hang out with friends and get high? What are your options? There is a need for the private sector to step up to accommodate the legal, safe, responsible integration of cannabis into the day-to-day lives of those who wish to use it because the public sector is not yet doing this.

So you've got the product, now how will you get lots of customers?

The challenge that lies in front of us has to do with marketing because legally, there are heavy restrictions on advertising cannabis - or advertising businesses related to cannabis. It’s going to take a lot of work through alternative marketing measures, guerrilla marketing and grassroots campaigns to get the word out.

The cannabis community is quite engaged on social media and this is where we will be spending most of our efforts, but even then, Facebook and Instagram have a no-tolerance policy for cannabis so there are inherent challenges in that route as well.

As what we are doing is on the leading edge in an exciting new sector, we’re counting on media attention in the news, and through entertainment-based media such as Dragon’s Den (Canada’s version of Shark Tank) - where we will be pitching next month - to expand our market from the acutely engaged cannabis user to the user who is curious about cannabis and interested in exploring further now that it is legal. Dragons Den reaches two million viewers in Canada.

Tell us what process you've gone through to establish a genuine need for your company and the size of the addressable market.

HiBnb doesn’t need to do anything to establish a market for what we offer - the need for HiBnb is there because the use of the plant has been forbidden for so many years, and people have had to hide their use. They don’t want to do that anymore. HiBnb taps into a nerve, and a social movement, which is to break the stigma. It’s been too long that cannabis has been associated as a gateway drug and associated as inherently bad, the devil’s drug, etc. It’s a new era now and time to shed these associations. 

Cannabis sales in the United States grew 46% from 2019 to 2020 to $17.5 billion. And 35 million Americans use cannabis at least once or twice a month. This is a growing market and we are only scratching the surface as more states and countries legalize for recreational and medicinal use.

How and when will you make money?

HiBnb went live in Canada at the beginning of 2021, and we plan to be open for listings in states where cannabis is legal by the summertime - ramping up toward an official launch in September 2021. Our plans and projections show the company scaling very quickly, breaking even about 1.5 years after our launch.

What are the backgrounds and previous achievements of the founding team?

I grew up in an entrepreneurial family, working inside my mother’s sales and marketing company. She taught me that nothing was better than the feeling of achievement, and I set off to find that achievement on my own - first in the media, on and off air, and then as a writer/director in film and television. I was always driven by the urge to have a voice - to present a concept and deliver a message that would resonate on a big scale with an audience - and I was never satisfied working in entertainment. I never felt that I tapped into my full potential. When cannabis legalized I was able to utilize my skills in developing a script or blueprint, creating a budget and a schedule, financing it and working together with a technical and creative team to build and deliver a product for the market. I am still acutely involved in every detail on our site, and helping it to evolve based on the feedback of our hosts, guests and advertisers.

Kelly Ehler is an experienced executive, advisor and board member with a track record of transforming and elevating companies by improving their processes and business practices so they can reach new levels of success and profitability. From process planning to risk management to compliance to M&A, Ehler has given public and private companies of all sizes the tools they need to achieve their goals. He worked as auditor for Price Waterhouse Coopers and a former banker with Band of Montreal among other profitable organizations. He’s always been a cannabis advocate and became the CFO for Slang Worldwide in 2018, and later transitioned to a director on their board.  Slang is a leading cannabis company focused on acquiring and developing market-proven brands and creating new brands to meet the needs of cannabis consumers worldwide.

How have you addressed diversity and inclusion within your business?

Community values are integral to HiBnb's successful operations because our business, at its heart, is the cultivation of community. We celebrate cannabis culture and part of that includes keeping a non-judgmental and accepting practice of all races, religions, sexual orientations, gender identifications and backgrounds.

What's been the most difficult part of founding the business so far?

The most difficult part of founding this business so far is the amount of work that is required on very limited resources. HiBnb lies at the intersection of the hospitality and cannabis industries so we need integration into both of those industries at the corporate level. We also need to be successfully executing on all areas of the business model.

HiBnb is actually three businesses in one: We are a tech business first, so making sure the technology is solid and working, and constantly expanding upon it - this is our priority focus. Next is our accommodations arm. The hospitality industry is robust and we have a strong foothold in it with the help of some strategic partnerships. There is a lot to consider as we want to provide maximum support for our hosts.

Next we have our adventures arm which dips into an ancillary industry of tours, classes, workshops, events and activities. And last but not least, we are effectively acting as an advertising agency for the cannabis industry, and this demands a completely different set of skills and offerings. All of these avenues need to be up and running for our startup and launch, so it’s a huge amount of work.

Generally, travel startups face a fairly tough time making an impact - so why are you going to be one of lucky ones?

There is a lot of momentum in the movement toward the legalization of cannabis right now. With Canada and Mexico as legal countries, and about half of all U.S. states recreationally legal, almost all of North America is celebrating the end of prohibition and looking for ways to enjoy new freedoms. That’s a LOT of cannabis users. And in addition to this, Europe is not far behind. The market is growing and there’s not much competition so we are in the right place at the right time.

A year from now, what state do you think your startup will be in?

A year from now we plan on over one thousand listings across North American and a growing brand awareness in the public. It is possible that by then, the U.S. Senate will have decriminalized or even legalized cannabis at the federal level and that will mean significant changes on a global level. We see some European countries close to legalization - countries such as Portugal, Greece and Israel - and as soon as that happens, as each country opens, we will grow to reach those new markets. So we could be as small as one thousand listings or possibly 10 times that size. Because of the hard foundational work we’re laying right now we are set up for rapid growth.

What is your end-game? (Going public, acquisition, growing and staying private, etc.)

Our plan is to grow the company so that it can compete on a global level, and Ehler and I are prepared to do this on our own for the long haul. That said, if the right offer comes along and it makes sense, we would consider it. Our loyalty is to provide the best service to the widest customer base, and if others can help the company get there faster than us, we are open to it. Taking HiBnb public at some point in time has also been a topic of conversation.