Hemp Crate Co.
About the Company
Hemp Crate Co. was designed to deliver curated CBD products through subscription boxes, emphasizing value and affordability. Customers could choose between starter boxes, priced at $44.99 with $125 of value, and pro boxes at $69.99 with $175 of value. The company served over 1,000 subscribers and expanded its offerings to include an online store. Its mission revolved around education, discovery, and affordability in the CBD market, aiming to demystify the benefits of CBD for its users.
Despite being a side business for the founders, Hemp Crate Co. maintained a robust operational structure, utilizing Ryan’s logistics experience to manage fulfillment effectively. The company also adhered to a prepay model, reducing upfront costs, and relied on organic growth channels due to advertising restrictions for CBD products.
Idea Behind Company
Ryan Culver conceptualized Hemp Crate Co. in late 2018, inspired by the upcoming legalization of CBD under the 2018 Farm Bill and the recurring revenue model of subscription services. He approached Lowell, his colleague at an eCommerce firm, with the idea. While initially hesitant, Lowell joined the venture after understanding its potential in a growing CBD market.
The founders identified a gap in the market where consumers needed guidance in selecting effective CBD products. This led to their focus on product curation and customer education. They envisioned Hemp Crate Co. as a platform to make CBD accessible and affordable while addressing the challenges consumers faced in navigating the emerging CBD industry.
Creating the Company
The initial plan was to private-label CBD products, but high startup costs prompted a pivot to partnering with existing brands. This approach allowed the founders to showcase various CBD products in their boxes, later introducing their private-label product, Hippie Hemp Balm chapstick.
The business was launched with $20,000 in personal funds, with expenses focused on inventory, website development, and marketing materials. Payment processing posed a significant challenge due to industry-specific restrictions, requiring extensive trial and error before finding reliable solutions. Cratejoy became a key partner for managing subscriptions and boosting sales through its marketplace.
Launching the Business
Hemp Crate Co. officially launched on March 15, 2019, following five months of preparation. The launch leveraged social media followers, family, and friends, generating over $1,000 on the first day. Initial branding and packaging were basic, but customer demand grew steadily, helping the company reach its revenue targets.
Due to advertising limitations, the business relied on organic growth, with platforms like Cratejoy and social media contributing significantly. The founders implemented a brand ambassador program and used influencer marketing cautiously to boost customer engagement. Strategic partnerships with other brands further supported growth and customer retention.
Earnings
At its peak, Hemp Crate Co. achieved $50,000 in monthly revenue with a 50% gross margin. Operating as a side hustle, the business required minimal weekly hours from the founders, who handled procurement, customer service, and analytics. A significant milestone was outsourcing fulfillment to Ryan’s logistics company, saving time and enhancing efficiency.
The founders planned to scale by outsourcing marketing and customer service. Despite its success, Hemp Crate Co. ceased operations in 2024. Lessons learned emphasized agility, strategic pivots, and the importance of complementary skill sets in a business partnership. The ultimate goal had been to sell the business to an ideal buyer.
