Mario Naric, CEO of Motif Labs, reveals the secrets to his company’s success in Canada’s vape and infused pre-roll markets. Explore his journey and industry insights.
Mario Naric is the Founder & CEO of Motif Labs, a leading brand house shaping Canada’s cannabis 2.0 market with a portfolio of iconic brands, including BOXHOT (the #1 vape brand in Canada), DEBUNK, and Rizzlers.
With an unwavering passion for creating exceptional products and a background in chemical engineering, Mario has grown Motif Labs into the retailer’s brand of choice, solidifying its position as a leader in Canada’s 2.0 cannabis market.
Mario’s cannabis journey began in 2017 when he founded Motif Labs with a vision to define high standards of excellence and to create products that leave a lasting impression. Mario has led Motif Labs to unparalleled success and profitability, holding top market share positions in vapes and infused pre-rolls.
Mario’s hands-on leadership style and youthful energy infuse a unique vitality into Motif Labs. Guided by his passion, the company continues to push boundaries, creating products that exceed consumer expectations. Mario is known for his approachable demeanor and genuine commitment to making a difference. Mario and his wife live in London, Ontario.
We asked Mario a few questions about Motif Labs and BOXHOT and customer insights on Canada’s vape industry. Mario also talks about the success of Motif Labs and the factors that lead to it.
Read the full interview below.
Ganjly: Mario, can you share the foundational strategy that has propelled Motif Labs to become a leader in the Canadian vape and infused pre-roll markets, particularly in such a competitive landscape?
Mario Naric: First off, the key to our success is, and always will be, the dedicated and passionate group of people who run this place. Most of our initial hires are still with us, now in senior positions. There is a dedication to making this business a success that spans all departments. That, combined with our ability to develop products that evoke lasting excitement in consumers, is a recipe for success.
We accurately identify and address our target consumer’s needs through intuitive and data-backed decisions and thoughtful product design. This approach has led to the creation of some of the most beloved cannabis brands in Canada—BOXHOT, DEBUNK, and Rizzlers—that cater to a diverse range of consumer preferences, including the next generation of cannabis users.
Ganjly: With Motif Labs currently holding 21% of the national vape market share, what key moves do you attribute to achieving and maintaining this level of market dominance?
Mario Naric: We are always looking for whitespace that we believe can turn into a dominant sub-category. This is still a very new industry, which leaves a lot of room for companies to set trends instead of just following them. We make bold assumptions that are backed by data and pair them with bold branding to really stand out against the crowd.
Beyond that, we have created an accretive portfolio of brands and products that deliver against a wide set of consumer preferences and protect our sales against the rapid rise and fall sometimes seen within certain subcategories.
This is all paired with high-quality products and exceptional boots-on-the-ground customer service. Once the product is in the market, we do not forget about it—we interact with our retailers nationally, we track trends, and we adapt and tweak formulations to ensure we’re always improving quality and experience.
Ganjly: The BOXHOT has become the best-selling vape in Canada. What makes this product stand out in the market, and how does it reflect your company’s approach to innovation?
Mario Naric: BOXHOT is our flagship THC-forward brand that was born out of Motif identifying a simple regulatory truth that we could make a vape that was 1.2G at a time when 1G was ubiquitous.
We paired the larger tank size with a chunky, eye-catching piece of hardware and a loud brand (BOXHOT), and it took off because it was different and stood out in a saturated market. This speaks to our philosophy that every product line we create must be intentional and address the target consumer with every attribute.
Since its launch, BOXHOT has evolved to become a leader in 1G and 0.5G disposables and 2G low-THC vapes. We have never taken our initial success for granted and continue to deliver excitement and innovation to our loyal and growing consumer base.
Ganjly: Understanding customer preferences seems crucial in your industry. How does Motif Labs gather and utilize consumer insights to drive product development and marketing?
Mario Naric: First of all, you have to get out of the office and speak to your consumer. Motif’s team is very active and present in the cannabis community.
We have 30 territory managers nationally visiting 3,500 stores on a frequent basis, having nearly 2,000 conversations per month, and reporting back on industry trends and preferences. Our senior management staff, myself included, have KPIs tied to visiting stores and speaking to retailers.
And beyond that, we ensure we visit the U.S. on a regular basis to gain a different perspective on product innovation and consumer trends. Speaking with our consumers and seeing them interact with the products is not something a spreadsheet will ever tell you and that’s where the magic ‘aha’ moments are.
Secondly, we leverage data to guide our decision-making and product design. Of course, we watch which subcategories are taking off, but even more importantly we ask ourselves: What’s missing in the data and where can we insert it into a tangible white space?
For example, through data and surveying, we recently identified that 1G infused pre-rolls were mainly commanding strong market share due to a low basket price, but that consumers truly prefer the 0.5g format. We also saw that consumers love mixed flavor packs but that most LPs were trending to highly potent pricey three-packs. Our solution was to design a two-pack of half-gram infused joints that can be priced at or below the typical one-gram infused pre-roll package, and we nailed it.
Rizzlers pre-rolls reached top market share positions within two months of launch. We are adept at identifying and capitalizing on these white spaces and ensuring we have a strong marketing message and support for these products.
Ganjly: Navigating regulatory landscapes is often challenging in your sector. How has Motif Labs adapted its business operations to comply with Canadian regulations while still achieving growth?
Mario Naric: Many in our industry always voice concerns about the regulatory structure, but I’ve been pleasantly surprised by how quickly the whole industry adapts and how far Canada has come.
At Motif, our Chief of Innovation Officer oversees a dedicated Head of Regulatory who constantly interprets Health Canada regulations and their responses to our actions.
Our regulatory team also maintains close oversight over creative/marketing/sales to ensure that all of our actions and communications comply with regulation, without being overly restrictive. It has taken being entrenched in the space from the beginning to really understand how to walk the line of exciting the customer while staying in bounds.
We also actively communicate with Health Canada, offering recommendations or raising concerns when regulations are unclear. Often, we prepare robust summaries of why we believe our decisions comply with regulations and work collaboratively with the officials to move the industry forward. It’s all about realizing that everyone, including the government, is just trying to figure this industry out together.
Ganjly: Achieving $85 million in annual revenue in 2023 and maintaining profitability is impressive. What financial principles and practices have guided Motif Labs toward this financial success?”
Mario Naric: As a private company with nearly 100 percent retention of our senior leadership team, we are a tight-knit organization with a strong focus on revenue and profitability.
Our team is hands-on, proactively identifying issues and opportunities and addressing them directly with an emphasis on financial performance. It’s simple: profitability is math, and we have robust models that we live by to ensure every decision we make, and action we take, are made with deliberate focus on ensuring profitability.
We do not get trapped in the fallacy of ‘we just need X and we will turn a profit.’ We simply do not go there. When it comes to revenue, we focus on actions rather than reports. Actions drive revenue, and we have a large and dedicated group of people who are accountable for delivering that growth.
Ganjly: As other companies in the sector struggle, Motif Labs continues to grow. What do you see as your company’s biggest competitive advantage in the current market?
Mario Naric: What differentiates Motif from a majority of the players in the market is that we have expertise in both the manufacturing and commercialization of our products and their conceptualization/creative execution.
This dual proficiency allows us to quickly produce products that people want at a strong price point and profit margin. Most of our competitors excel in either manufacturing or branding, but not both, which hampers their speed to market, profitability, and competitiveness in a price-sensitive environment.
We’re always trying to achieve the perfect level of vertical integration and are always focusing on product lines that have protectable and scalable attributes.
The next part is our team. I’m probably one of the few founding CEOs still running a business in cannabis. I’ve brought in people I trust, creating a network of individuals who know and trust each other and are extremely dedicated to the business. This stability is crucial; when teams frequently change, it’s hard to maintain a clear vision.
We are a very creative team, and we have excellent intuition about where to take our products.
Ganjly: With increasing concern about sustainability in production and distribution, what steps is Motif Labs taking to address environmental and social responsibilities?
Mario Naric: In terms of production sustainability, there really isn’t anything too wasteful in the manufacturing of cannabis extracts. Motif does a very good job of ensuring we are reclaiming and re-using any of the solvents in the process as much as we possibly can.
For example, in the early days, we ran a study on re-using ethanol 10 times more than the industry standard of the time to ensure that the quality of the end product wasn’t impacted. We confirmed that it was fine and so have substantially reduced our ethanol consumption. We are constantly assessing inefficiency and waste, both because of its impact on the environment and our financials.
From a product standpoint, we do what we can given the regulatory environment. Most of our packaging is reusable and recyclable by the consumer, and we never over-package our products. We keep the child-resistant packaging to the minimum required to keep the product protected and preserved.
Ganjly: Looking forward, what are the next big goals for Motif Labs? Are there new markets or product lines you aim to explore soon?
Mario Naric: The beginning of this year has been very active for us. Within the first four months, we have licensed our second 75,000sf facility, we have increased our hydrocarbon extraction capacity by four times, and we have in-sourced the manufacturing of pre-rolls and the application of kief on pre-rolls.
Our biggest growth lever and objective right now is to replicate the dominance we have in vapes in the infused pre-roll segment. With the technology under our control and a wide assortment of fun and innovative SKUs launching over the spring and summer, we’re well on our way in this regard.
The expansion of hydrocarbon will enable us to obtain and retain a dominant position in all liquid diamond/THCA-related high-potency subcategories in vape and infused pre-rolls. Further, we are now deliberately entering the live resin vape subcategory and the higher-end concentrate categories. Strain-specific, true-to-flower products are not something we previously had the bandwidth and capability to focus on, but we are ready!
And finally, we are actively pursuing bulk, international opportunities through select markets. We have formally applied for our first export permit with Health Canada for a shipment of our 99.9% pure THCA into the international markets.
Ganjly: Finally, Mario, could you share how your personal leadership philosophy influences the culture and success of Motif Labs?
Mario Naric: As a hands-on leader, I am deeply involved in the ideation, development, and marketing stages of our brands and processes. I dig into the details with my team, I ask the tough questions and I participate in the solutions.
That mentality has been adopted by the entire organization, all of us thinking outside of the box and having the tenacity not to accept mediocrity.
Steve Nazarian, my Chief of Innovation, always asks the question: ‘What has to be true for this to work?’ We ask ourselves that question every single day—you cannot accept poor quality, you cannot accept low gross margins, you cannot accept low ROI marketing activity.
Just ask yourself, ‘What has to be true?’ and it’s amazing how quickly you’ll uncover opportunities to drive revenue, reduce cogs, improve process efficiencies, and so on.
Thank you so much, Mario, for taking the time to do the interview. We appreciate it!
To learn more about Mario Naric and Motif Labs, head on over to MotifLabs.ca.
