Crowdfunding for cannabis venture proves fruitful for San Francisco women

Quim’s Crowdfunding Campaign Democratizes Cannabis Investment (SF Evergreen file)

By Veronica Irwin via SF Evergreen

Cyo Nystrom grew up about five blocks from her future business partner Rachel Washtien — in the Inner Richmond neighborhood of San Francisco — before moving to Marin at 7 years old. Her mom was an alternative healer, and her father, who she hardly knew, spent most of her young life in jail for a cannabis-related offense.

“I carried a lot of shame around it,” Nystrom says. “I grew up in Marin county, I went to private school, and I think also when you’re growing up you think everyone’s lives are cookie cutter.”

Now, however, that shame is long-gone. About two-and-a-half decades later she and Washtien are the co-founders of Quim, a cannabis company that has already attracted over a million dollars in investment.

To hear Nystrom tell it, she’s the “ideas,” person, while Washtien stays on top of the “details” — but their official titles are CEO and COO, respectively. Nystrom says she dove into the cannabis industry, in part, to work through her own internalized stigma about cannabis.

“I saw an opportunity — not like I was going to save anyone from the war on drugs — but to get involved at an early stage, and process some of that shame that I had been carrying for 25 years.”

In the interests of democratizing the investment process, Nystrom and Washtien launched a crowdfunding investment campaign via Republic. Launched on Sept. 15 of this year and accepting new investors until Dec. 18, it gives brand devotees the option to invest at as low as $100.

Investors invest in a CrowdSAFE, which means that instead of immediately holding equity in the company, they get a financial stake that will turn into equity or a cash payout if Quim goes public, is acquired, or sells its assets. Full disclosure: I invested at the measly level of $150 (because, at that level, $50 of the investment is returned to me as a gift voucher).

The founders aim to do more than just destigmatize weed with Quim’s products — they address stigmas around vaginal health, too. Quim is a line of intimate lubes and everyday proactive vaginal health products, all infused with either THC or hemp CBD.

When she was creating the product, Nystrom wanted to clarify two major misconceptions: first, that UTIs and yeast infections cannot be prevented through proactive care, and second, that needing lubricant was evidence of sexual incompetence. Both issues arise out of patriarchal stigmas that make it taboo to talk openly about sexual or reproductive health.

As Quim grew, however, Nystrom and Washtien found they had to confront patriarchy in more ways than one. In the beginning, their prospective investors, a majority of whom could not personally benefit from Quim’s products on account of their anatomy, didn’t understand why they should invest in a vaginal health product. And even though Nystrom and Washtien’s investment pitch was popular — they won the Arcview Pitch Competition in 2018, and the Pitchforce and SXSW Cannabis Pitch competitions in 2020 — they would often leave such conferences without any new capital.

Nystrom says she found herself answering ignorant questions like, “are these vaginal health issues you’re talking about really that prevalent?,” and “so is this going to make my wife want to have sex with me more?”

“I would be like, ‘Probably? It will make her want to have sex more, but I don’t know about with you.’”

Rachel and Nystrom faced a variety of creative and personal sexist attacks as well. “People would refer to us as the sisterwives, and I would be like ‘Excuse me?’” Nystrom recalls. “You can call me a lot of things: you can call me my name, you can call me ma’am, you can call me the vagina weed girl — or preferably woman — but you can’t call us sisterwives.” By then, the founders knew they must find a way to integrate more of their real-life customers, who truly understood and appreciated the product, into the investment framework.

It’s this pursuit that brought them to Republic. The fundraising site claims that, “for the first time in history, the majority of the US population can invest in tech startups,” through their online investment platform because of the consistently low minimum investment thresholds. A friend in the industry, Jewel Zimmer, had already been crowdfunding via Republic for her cannabis tincture company Juna and recommended the platform. The hope was that, because most investors are male-identifying, lowering the threshold for investment could make it more accessible for Quim’s diverse body of customers.

So far they’ve raised $130,542 through the Republic campaign, which, in combination with their previously-earned seed funding, puts them at almost $1.1M in total investments. But, what excites Nystrom most is the new demographic data she sees on her laptop. “There are so many people investing that make between $75,000 and $150,000” per year, she says. “I know that’s a big range, but I think making $75 to $150 does not normally make you an accredited investor.” And though many of the investors who find Quim through the Republic platform are men, a growing group of female-identified investors are showing up in the stats, too.

Nystrom says this helps them become a more customer-centric company, too, while earning an infusion of capital that allows them to build a robust direct-to-consumer arm of the company. Luckily, the founders see a fortuitous forecast for those customers-turned investors, too: Quim saw a tenfold increase in gross revenue from 2018 to 2019, and, between the fourth quarter of 2019 to now, they’ve seen a 30 percent increase in direct-to-customer sales. Before crowdfunding, Nystrom says that when they visualized a successful future acquisition, it was always a little bittersweet

“We thought, who is going to win from that? Obviously Rachel and I, obviously our employee, but mostly, it would be our investors,” she says, who were mostly older and male-identifying. Nystrom hopes for an acquisition in the next five years, and is proud that her most loyal customers will take home a part of Quim’s success.

After all, it’s because of customer loyalty that Quim has grown as quickly as it has — 26 percent of their revenue month-to-month comes from 2nd, 3rd, and 4th time customers, according to their crowdfunding campaign. It’s a product that, because it runs significantly more expensive than non-cannabis lubricants and creams, can be difficult to move off the shelves. However, once customers get over the $50+ price tag, many come back for more.

As those customers have become more comfortable with their bodies — and weed — so has Nystrom processed a lot of her own internal stigmas about cannabis, and her dad’s conviction. In fact, it’s through Quim that she was able to reconnect with her father at the end of his life. Quim was featured on an episode of the Viceland TV series Slutever, which ran in reruns for several months. One day, out-of-the-blue, Quim received an email with no body text, and the subject line “I’m so proud of you and couldn’t be more happy for you.”

Nystrom recognized the last name, and asked the sender if he was her father, and if they wanted to meet. He responded “yes, yes, a million times yes.” Shortly thereafter, she drove to his home in Las Vegas and met him for the first time since she was four years old. He passed away from complications of kidney cancer several months later, with Nystrom by his side.

“I think that everything happens for a reason,” she says. When business gets tough, she says she remembers that this company, quickly rising to the top of the cannabis industry, reunited her with the man the war on drugs took from her at an early age. “That was one of the most important things that’s ever happened in my life, and that probably wouldn’t have happened had I not taken this risk.”

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