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Vaprwear

by Gregory Daurer on January 2, 2018, 09:05 am MST

www.vaprwear.com

Englewood, Colorado

Founded: 2015

Privately owned

Employees: 5

Industry: Cannabis

Products: Apparel and backpacks with integrated vaporizers

CEO Tom Gruger's line of apparel and backpacks, with built-in vaporizer technology, offers stealth, convenience, and a model for future products.

Gruger recalls those initial conversations about Vaprwear that he had over the phone with his onetime college buddy Steven K. Suttman. They met during their first day at Miami University in Ohio in the early '80s.

Since his college days, Suttman had gone on to found, and then sell, a software technology company, Dynamic Card Solutions. Its product has allowed banks to print and authorize ATM and credit cards on-site, so a customer can leave a financial institution with the card in hand, ready-to-go at stores and ATM machines. Based in Colorado, Suttman also started Dynamic Alternative Finance, a company which connects investors with cannabis-related businesses.

So when Suttman told Gruger, who was working in Chicago as the VP of digital sales for Wilson Sporting Goods, that Suttman was thinking of buying the patent rights for a hoodie with a built-in vaporizing system -- which allows the shirt's wearer to vape stealthily by putting one of cords up to his mouth (quite literally, a "drawstring") -- Gruger was dubious about the concept.

Gruger says, "When I first looked at it, I thought, 'Fad!'"

But Suttman persevered, and Gruger agreed to do further research on the product's potential.

Gruger moved to Colorado in 2017 to work full-time for company chairman Suttman at Vaprwear. Gruger says, "We realized that the category was exploding -- both vaping and cannabis. And the product, itself -- there was a lot more there than maybe the inventor was understanding, himself."

Vaprwear sells variations on its original hoodie design. And it sells backpacks, which include its "Integrated, Patented Drawstring Vapor Delivery System," as well: the products employ a proprietary vapor pen that can be removed, in order to insert a new cannabis -- or other type of oil -- cartridge, before being tucked away into its hidden location within the bag's strap. The bags also have room for a hydration bladder, so if a customer gets parched while hiking -- or cotton mouth from vaping cannabis oil -- they can quench their thirst, as well.

Vaprwear is expanding its clothing designs with seven or eight new products, including a base-layer garment, designed to appeal to après-ski, outdoor enthusiasts, and concert-goers. In other words, according to Gruger, "apparel items that are fashionable and contemporary." By way of example, he says, "The design goal was, we wanted to create your favorite hoodie -- whether it includes our technology or not, it's the thing you want to wear the most."  Presently, customers between the ages of 25 and 34 are the company's "sweet spot," he says.

Besides young cannabis devotees who don't want to broadcast their consumption, Vaprwear aims to attract runners and sports enthusiasts, who are beginning to use non-psychoactive CBD in their training regimens. And tobacco-replacement users who might be, for instance, long-haul truck drivers or motorcyclists. Gruger says the appeal is having a "functional" piece of equipment that's "always within hands' reach." Regarding standard vapor pens, he says: "If they're in a pocket or a purse, they're sometimes hard to find, they drop to the bottom. You might break it in your pocket, if you're active; [it] might fall out."

For Gruger, who's spent his entire career working in sporting goods, the opportunity to work in a new category -- vaping -- with a 22 percent compound annual growth rate was irresistible. "I haven't worked in a category in my entire career that was growing," says Gruger, who found employment early in his career at the company Titleist and FootJoy Worldwide (noted for its golf equipment), before taking on long-term assignments at Wilson. "Most of my businesses were either finite or decreasing." In order to increase market share in the sporting goods field, it meant taking business away from competitors. But if Vaprwear can achieve just approach 1 percent market share in the expanding category of vaping, well, from his facial expression, clearly Gruger relishes the thought.

Working now on behalf of Vaprwear, Gruger, 53, is using the knowledge he'd previously accumulated regarding supply chains, sourcing of goods and materials, marketing, and launching products. "It was sort of the culmination of what I'd been wanting to do for a long time," he says.

Although the company is based in Colorado, the products are manufactured in Asia: Mechanical parts are fabricated in Taiwan, and the apparel and backpacks are made in China.  Gruger describes the products as "high quality." While there are cheaper factories out there, he says, "We're really not looking to do the least expensive thing."

In terms of metrics, Gruger says, "We've sold thousands of units. We've seen double digit growth [each month] on our website sales, since we launched it in August." Gruger points out that overall vaporizer sales are "expected to reach over $50 billion by 2025" -- in other words, shooting up at "a rocket-ship rate" -- so he envisions business for Vaprwear steadily increasing, in the decade ahead.

In addition to online sales (which accounts for 60 percent of its sales), Vaprwear products can be found at a handful of cannabis dispensaries in the Denver area, as well as in Eugene, Oregon. (Vaprwear's "active outdoor backpack" can be purchased in black and gold or green and yellow colors -- go Buffs or Ducks!) They're also available at e-cigarette stores in Ohio, Texas, and Georgia, and the company will be doing guerrilla marketing at the upcoming X Games in Aspen as well.

As the company shows that its "proof of concept" is viable, Vaprwear hopes to one day license its technology. Gruger says, "Most brands aren't able to affiliate directly with something that's associated with cannabis. But we see that rapidly changing. So, down the road, if we're able to license our technology into the leading backpack manufacturers or the leading hoodie manufacturers or outerwear manufacturers, that's ultimately what we're striving to do. We want to be the intel inside, as much as a producer of the goods."

And the possibilities don't stop there. What if a Vaprwear product could deliver oxygen in small amounts for a hiker, or a senior who doesn't want to lug an unwieldy tank down to the dining room in a nursing home? Or if it can provide scenting or de-scenting sprays for a hunter, built directly into its clothing? Or provide personal protection -- say, a pepper spray option within quick reach?

For now, Gruger says that sitting down with someone and showing them the existing technology is enough to convert a skeptic.

"Our job is to show that this isn't a silly thing to hide [cannabis consumption]," says Gruger, who vapes CBD oil while running. "It's a functional thing that's useful. You didn't know you needed it."

Challenges: "The first is the lack of standardization in the cannabis industry," notes Gruger. "I'm from the sports category, where all [companies] abide by standardization rules." Vaprwear quickly learned that there are different types of vapor cartridges being sold for vape pens, so the company was forced to develop a "universal tip," which connects the different cartridge types to the hoses on its products from which customers draw vapor.

And then there's the fact that many online marketing tools and sites don't allow cannabis advertising. Gruger says, "The second hardest part of this is that we're not able to use the world's most popular online advertising tools like Google AdWords, or all of those mechanisms that have been built to be able to satisfy exactly what we want to do -- but we can't talk about that topic."

Opportunities: Finding a share of an expanding market: "I think the opportunity is for us to just reach critical mass within the cannabis category," says Gruger. "That's a huge opportunity. "

Needs: Gruger says it's improving the supply side of the operation: "It's the unsexy side of things -- source better, source effectively, be able to get our products in in a timely fashion, and get them to market quickly, and those kinds of things."

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