- Shanthal Perera
- Feb 22, 2017
Hidden away in Somerville House is a regular looking classroom. The monotone consistency offered by white walls and whiteboards is broken up by a window with a view of the old Ivey building and a large, impractical, foam core cheque for $15,000. It was a way to add a personal touch of interior decorating for Aunt Mary’s Corp, now part of the first cohort of the new Western Accelerator.
Aunt Mary’s consist of three Ivey 2017 MBA candidates: Ryan Bauer, Erik Lapointe and Michael Palumbo, who are developing powdered beverage mixes that can balance and counteract the foul taste of medical marijuana and other essential oils. Patients can combine the powdered mix with water and their personal oil supplies, which offers a non-inhalation alternative.
Conceptualized during the Ivey New Venture Project, Aunt Mary’s quickly evolved from a school project into a viable business idea, winning the 2017 IBK Capital – Ivey Business Plan Competition, marking Ivey’s first win since 2006.
As they settle into their new workspace, the team is hoping to find the right mix that will appeal to a growing market of licensed medical marijuana patients.
Message and market
Aunt Mary’s journey has had its fair share of road bumps due to its “association to the marijuana industry,” a perception the team is quick to challenge.
“We learned early on that there was some confusion with our product and that caused a lot of reticence to promote us,” said Lapointe. Therefore, Aunt Mary’s drew a clear line to note that they do not contain any medical marijuana. As soon as that was established, the concept was easier to accept.
“At the end of the day, we are a food product company. We’re not really supplying anything with medical ingredients in it,” said Palumbo.
Since moving into the accelerator and winning the competition, Aunt Mary’s has secured a partner to conduct R&D on developing the concentrated beverage mix. They are hoping to get four iterations of the powder and continue to process until they find a commercially-viable product. While they haven’t decided on packaging options of canisters, bottles or sachets, the team wants to ensure the mix is as concentrated as possible.
The team notes that there are around 100,000 registered licensed medical marijuana patients in Canada today. According to some estimates that number is expected to rise as high as 700,000 by 2020. Larger opportunities lay south of the border, where it’s thought to be a $4-5 billion industry. However, Aunt Mary’s target market is in the oils and extract segment, which itself is growing and taking up a larger share of the pie.
Becoming entrepreneurs at Ivey
Palumbo always wanted to be an entrepreneur. Having worked in an entrepreneurial finance position prior to his MBA, Palumbo was fascinated by the people and their stories. He wanted to be on the other side of the table. Still, Palumbo never thought he’d be pursuing that journey while at Ivey.
Bauer didn’t expect to take the plunge this early either but knew he had a passion for entrepreneurship.
“When I was younger, I always wanted to open up a sports shop with my cousin, Steve Schnarr. We were going to combine our last names and call the place Schnauer's; it would have killed,” said Bauer.
On the other hand, Lapointe never even dreamed of being an entrepreneur and was comfortable climbing up the ladder in the hospitality industry where he had spent much of his career. When the opportunity arose to choose the client or new venture option with the Ivey Field Project, he chose the latter as a fun departure from the norm.
“Being in an academic setting, it was a safe place to do it,” said Lapointe.
Together with two other friends, Bauer, Lapointe and Palumbo started pursuing the idea in July 2016. They wanted to tackle the foul taste many licensed users had to suffer through to consume cannabinoid and other essential oils. They started with a tea concept that evolved into what it is today; a collaborative process that ensured Aunt Mary’s was not anyone’s specific baby.
Full steam ahead
But what pushed a school project into becoming a real business?
For Palumbo, it was Presentation Day on November 25, 2016, when all the new venture teams had to present their ideas to a selection of experienced Entrepreneurs-in-Residence.
“You work on something that is a school project for credit but you don’t really show it to other people... It was after we presented in late November and saw other people’s reaction to what we had come up with that I realized that we might have something; we might have a company,” said Palumbo.
“We needed validation and when we got it, it was full steam ahead,” said Lapointe, who points to Ivey Professor Eric Morse as being instrumental to where they are now. “When we presented, Eric came to us and said he heard great feedback and that he actually thought we would be a good team for the accelerator.”
The transition between school project and a business occurred over December when the team was given an opportunity to be part of Western University’s new business accelerator. It was a fresh start for the team and each member had to decide if they were going to commit to Aunt Mary’s full time or step out of the venture.
The opportunity to work full time in the accelerator and gain course credit made the decision easier for Lapointe, who rearranged his course load on his phone that very day to avoid conflicts.
Since January, Aunt Mary’s has been slowly discovering all the additional resources and contacts available to them at the accelerator.
They’ve progressed at a pace that wouldn’t have been imaginable without the space according to Palumbo and are hoping to cover as much ground as possible before they end their term in April.
“Three guys full timing it, you can get a lot done,” said Palumbo.