Connecting with Dispensary Customers to Create Deeper Relationships – Joel Milton

joel milton baker technologies

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Key Takeaways:
[2:20] – Joel explains what Baker does
[3:51] – Joel talks about when he decided to get into the cannabis space
[4:57] – Voids Joel encountered when entering the cannabis space
[7:37] – Joel talks about benefits that are most popular with dispensary owners
[11:04] – How Baker drives dispensary customer engagement
[12:46] – Open and click through rates when a customer first starts using Baker
[14:12] – Using Baker to send text messages
[16:01] – Joel talks about expanding customers’ interests without alienating them
[17:15] – Does Baker have an API to the different software systems
[18:31] – Baker’s loyalty features
[20:40] – Joel talks about training staff to use Baker
[22:54] – Joel discusses Baker’s user interface
[24:51] – Joel’s book and web application recommendations
[27:37] – Baker’s fundraising process
[28:35] – Contact details for Baker

Many vendors have sold outside “solutions” to the cannabis industry. As a result, dispensaries are running on a hodgepodge of systems. To make matters worse, none of these systems talk to each other, costing your staff time, and dispensaries money.

These vendors don’t understand the cannabis industry and its inherent challenges, but Baker does. Running a dispensary is not like running your local pizza shop learn why in this interview with Joel Milton, co-founder of Baker.

Learn more at:
http://www.trybaker.com

Important Update:
What are the five trends that will disrupt the cannabis market in the next five years? Find out with your free guide at: http://www.cannainsider.com/trends

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Matthew: Hi. I’m Matthew Kind. Every Monday look for a fresh new episode where I will take you behind the scenes and interview the insiders that are shaping the rapidly evolving cannabis industry. Learn more at www(dot)cannainsider(dot)com. That’s www(dot)cannainsider(dot)com. We’ve talked about CBD or cannabidiol on the show many times. Just to review thought, CBD is a non-psychoactive compound from the cannabis or hemp plant that has many benefits. Now our friends at Treatibles have put together a one list chew that can help your dog or cat become more calm and balanced. Valerie wrote in to tell us about her experience with Treatibles.

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All businesses want solutions to help them attract, retain, and delight their customers and cannabis businesses are no different. That is why I’ve asked Joel Milton, Co-Founder and CEO of Baker Technologies to join us on the show today to discuss how to drive cannabis customer engagement? Joel welcome to CannaInsider.

Joel: Hey thanks for having me.

Matthew: Give listeners a sense of geography. Tell us where you are in the world today Joel?

Joel: Excellent. I’m actually in San Francisco. I split my time between here and Denver which is where our company is based and headquartered and Baker itself started off in Colorado and that’s where our initial dispensary clients were. This year we’ve expanded into Oregon, Washington, Arizona, Nevada, New Mexico, California, and even Toronto, Canada.

Matthew: Oh wow and give us a high level overview of what Baker does?

Joel: Absolutely. So Baker is a software company and first and foremost our goal is to help dispensaries really build their brand, keep their customers happy and loyal, and ultimately make more money as a business.

Matthew: Okay.

Joel: Yeah.

Matthew: And are you from Colorado originally? Are you from the Bay Area? Where are you a native of?

Joel: I’m actually a native New Yorker so I grew up just outside of Manhattan and I spent about six years living in New York City working in the tech startup scene and that’s where I met David and Roger my now co-founders. We got interested in the cannabis space, found out that between the three of us we had the product, the backend development, and the sales capability and we headed west and got involved.

Matthew: Does every place just seem vanilla after living in New York City? I mean you’ve got that tempo, the cadence of life there is just so ba, ba, ba.

Joel: It’s a lot. I think it’s a really exciting place to live and work and you do a lot of things in a very short amount of time while you’re there and I always will have a soft spot in my heart for New York but excited to have moved on and be spending a lot of time in Denver and the Bay Area. When you live in New York it’s easy to think the rest of the world doesn’t exist and when you go elsewhere you realize hey New York is a great place but there’s more to life too.

Matthew: True, true.

Joel: Yeah.

Matthew: Was there a particular aha moment when you realized you wanted to bring your skills to the cannabis space?

Joel: It’s funny you know it actually wasn’t my idea. David and I were working together doing a bunch of freelance work in New York City helping companies come up with and iterate early stage tech ideas and someone was telling me about the cannabis space and what was going on and I really started digging in and looking at the space and took a trip to Denver and I was really excited by the whole industry. I thought it was amazing. I met with a handful of dispensary owners and really talked to them about what their current challenges were and what sort of solutions existed and I realized there weren’t that many people solving problems who had a true technical background and it was there that David, Roger, and I really started evaluating where we were and it just so happened we were all at a decent point where we had the bandwidth to take on something new and it started off as like a side project and before long we were full time on Baker.

Matthew: What was the void? I mean aside from the background expertise that you’re like hey we want to go in and solve this problem or scratch this itch? Was there anything in particular?

Joel: Absolutely yeah. So two things one in Colorado at the time rec had just passed and you had these pretty long lines or at least crowded dispensaries and all of your customers waited in the same line whether it was a customer who shops once a week and buys a 100 dollars at a time and know exactly what they want or whether it was a tourist or a first time shopper who walks in and says hey what’s Indico, what’s sativa, or how many milligrams should I eat in an edible? So originally we built Baker to be an online ordering tool to help dispensaries keep their 20% of customers who accounted for 80% of the revenue right typical 80/20 rule. Keep these small group of people who really drove revenue and spent a lot of money happy and let them order ahead get in and get out so that the bud tenders could spend more time with people who had questions talking to them and explaining.

So that was the original void and it worked. We did that. We had early success. It was solving a pain point but pretty quickly we realized there was an even bigger void in the market which was dispensaries were spending a lot of money on customer acquisition. Advertising in print paper, digital, as well as the different listing sites getting their menu out there, trying to get eyeballs but they weren’t really spending any money on customer retention. So if you look at any other industry you see in typical retail it’s actually six times more expensive to acquire a new customer than to keep an existing one but for some reason in cannabis it was all about driving foot traffic, driving foot traffic and we found that a lot of these dispensaries didn’t actually fully realize the economics of every dollar they spend on these new customers many of them would come in for a deal, buy whatever product was on sale, and then not come back again.

So the ROI was actually negative and we started working with dispensaries who start to understand this and realize that it doesn’t have to be a race to the bottom. It’s not just about having the cheapest A or having the best deal that you can get people in your door. It’s really building that brand loyalty. The same way if I buy one brand of sneakers over another I’m not trying to buy the cheapest sneakers right. I like the brand that I like. Likewise there’s a real opportunity here for dispensaries to build their own brand, really connect with their customers, and drive repeat business. So we’ve really evolved Baker to be a full set of software tools that do just that which is really help build the relationship between the dispensary and their customer, drive that loyalty, keep the customer happy, and ultimately help the dispensary make more money.

Matthew: So it sounds like you’re saying segmentation and customization are some of the big primary benefits when you sit down with the dispensary owner. What are the top two or three benefits that you really try to drive home and that they seem to like the most?

Joel: Absolutely. Well first and foremost it’s building your customer list right. I think everyone knows that at the end of the day as a dispensary it’s really important to know who your customers are so helping them capture those customers pretty easily and for that we use an Ipad that we’ll give you that sits in your store or a tool that goes on your website. A lot of the times these websites are dead ends for dispensaries. If a customer does happen to find them there’s no real call to action. It’s just an address, maybe store hours, sometimes even they have a live menu, often not. With Baker we give you a shoppable menu so if a customer does land on your site they can actually order something and take an action or if they want to they can enter their cell phone number and sign up for personalized alerts.

So really it’s about capturing that customer data and then the second thing you said is exactly right too which is personalization and segmentation. So if you have one generic list that you send out to all the time there’s going to be a lot of people on there who are getting a lot of irrelevant messages and just like when you log on to Amazon part of the reason it’s such a powerful platform is because every time you log on its personalized to you. You see things that are on sale or available or recommended based on your needs and interests. With Baker we try to do the same thing so rather than send out a text to every single customer every Wednesday about Wax Wednesday half off two thirds of your customers never use concentrates which means two thirds of your customers are going to be getting spam every single Wednesday and they’re going to be very likely to opt out of all messages because they don’t want to keep getting that annoying text every Wednesday.

So with Baker we make it really easy to segment your customers based on their interests, send them what feels like a personalized relevant message so that they get excited every time they hear from you and they’re not like oh another message and I’m just going to instantly delete without reading but they know hey if I get a message from my dispensary it’s because they have something I want and it becomes that exciting feeling where you’re going to rush when you get a message and then the customer takes action and they actually click on a link and make a purchase.

Matthew: Yeah you’re kind of training your customers in a way that your emails mean something and your text messages mean something.

Joel: Absolutely and it’s not necessarily training them in a bad way right. We’re not manipulating the end customer. We’re actually making them happier and again that’s the same reason Amazon is great right. It’s not that they’re training us. They provide a valuable service. I know when I go on and I click recommend for me it’s going to be interesting and likewise we help these customers have a better experience and another feature that we offer is called strain alerts where if you have a really high demand product that you love right. Maybe it’s Blue OG a special hybrid that just is your favorite and it’s always out of stock. You can actually sign up to get a personalized message so as soon as that product comes back in store I get like hey Joel good news Blue OG is back in stock and I know I can either reserve it right there from my phone or run into the store and get it before it’s gone again and now that’s providing a really valuable service for the end user and ultimately if you make that end customer happy they’re going to become more loyal and be a better customer.

Matthew: So it sounds like what dispensaries that aren’t using Baker are doing wrong is they’re treating everybody and that they’re putting everybody in the same bucket, they’re sending them email blasts that don’t really tell them what to do next. Hey we have some announcement there’s no way for you to take any action. There’s no call to action. With Baker you’re saying hey we have this in stock now, I know you like it that’s why I’m sending it to you, and hey you can reserve it right here on your phone. So it’s taking it to a much deeper level.

Joel: Exactly. I mean the analogy I use is imagine if you got an email from J. Crew saying hey Matt pants are on sale today but there was no link or no image even. It was just an email that said those four words. They’re going to expect you to get in your car and find the nearest J. Crew and walk in and say I’m here for the pants right. It doesn’t make sense right. Of course not there’s a big picture of a model wearing the pants where you can see what it looks like and you can read a description and you can click on it and order it right from wherever you are your mobile device or your desktop. We’re providing that same experience. So when you get that Wax Wednesday text or that Blue OG alert you can click on it. You can see the specific product, you can read about it, and you can actually order it.

So it’s providing that next level. Closing the loop if you will on all messaging with a call to action and that also lets you track it because if you don’t have a call to action it’s impossible to know which messages are better than others right so a lot of times dispensaries don’t know what an effective messaging campaign looks like because they have no way to track it. They say oh I think we were a little bit busier on this day but maybe it was due to the text or maybe not. With Baker you can actually compare click through rates so you can see that hey 20% off did much better than five dollars off. We should do that again next time or hey the deal on this strain performed a lot better than they do on this strain. So it’s really important that you get that data, that feedback loop so you can actually improve and continue to do what’s working and change what’s not.

Matthew: Interesting. So when a dispensary implements Baker for the first time and they start customizing and getting deeper into the customization and segmenting of a customer’s interest what do you see in terms of open rate and click through rate? I mean is there like a doubling or what’s the general there?

Joel: Absolutely. Yeah it’s pretty exciting. We see typically after the first 30 days or so of collecting customer phone numbers with the iPads. Our clients usually send out their first marketing campaign and we’re surprised that they don’t do an incremental 10,000 dollars worth of revenue that initial day or two or three days and often times we have dispensaries say when they first really turn on Baker it’s the highest revenue they’ve ever seen and we get these unsolicited messages. We got one early this week. The subject was happy Monday and it was; it was to Glen, our Head of Customer Success. Hey Glen just wanted to let you know we did 10,000 dollars this weekend thanks to your message, 10,000 dollars more than we usually do thanks to your message.

It’s completely unsolicited and I think what these guys don’t always understand is they don’t believe that it will work because it seems almost too good to be true and that’s part of the reason we’re priced so competitively and that’s honestly our biggest challenge is that education piece because the notion of customer retention is not something that’s fully wide spread yet in the cannabis industry. So we’re still trying to help educate our customers, our clients on what this really means and why it can impact your business and more importantly the best way to actually implement it and to start using it.

Matthew: What about sending text messages? Most people are familiar with getting emails from businesses they like but what about text messages? Is there any kind of protocol or etiquette or things to do differently or think about differently there?

Joel: Absolutely and it’s the same things but it’s even more important on text because your phone, your text messages are very personal right. They have a 99% open rate right. Everyone reads their text messages and it’s because usually you only get them from people you care about or you know versus email everyone’s used to getting spam which is why the open rate is so low but if you start getting spammed via text message that feels much more like an invasion of privacy then getting spammed on email and that’s why it’s even more important that you only send the right messages to people based on what they like and at the right time of day. Our unsubscribe rate on text message is actually; the typical unsubscribe rate on text messages is actually 300% larger than ours.

So ours is less than a third of what the typical unsubscribe rate is and it’s because we really understand these customers and also we can help our clients understand the best way to send these messages right. We work with 150 dispensaries in 8 different states. We have a really good understanding of the cannabis market as a whole and obviously every state is very different and that’s why we have a full team of customer success that really understands each local market and every dispensary thinks they’re different and many of them are in a lot of ways but at the same time when you have that high level overview and really understand the market you can really work with your clients and understand the best way to send out these messages so you don’t get an unsubscribe and that you actually take advantage of the tool to drive revenue.

Matthew: Okay so let’s say you have Baker software implemented and working. You know your customers’ interest, you’re sending them emails kind of contoured to their personal interests, but how do you start to expand the possibilities of what they might be interested in without alienating them?

Joel: Great question. So a few different things one in the store like I said we set up an iPad where customers can select their preferences for what types of products they like. We also offer that full online order right so the more you use Baker the more we can understand what types of products you like and you order and then down the line as we start to integrate deeper and deeper with the different POS systems then it becomes even easier for us to build a customer profile to make sure you’re getting the most relevant information possible. So there’s a number of ways right and the goal is that the longer we’re around and the more we’re working with each dispensary then in this industry we’re going to continue to refine our platform to be smarter and smarter to provide a better and better experience.

Matthew: How does Baker enable online ordering for dispensaries but then integrate with the point of sale systems which you just mentioned? I mean it’s really valuable to be able to reserve and eighth of Blue Dream but if I go in to the dispensary and its gone then that turns from a benefit to a liability pretty quickly. How does that work? Is there an API to the different software systems out there?

Joel: Yep great question. So we do work with a number of the biggest POS solutions out there as well as a bunch of the smaller ones that are up and coming and Baker is designed to be complementary to a point of sale right. If you look at most industries your point of sale is very different than your customer retention platform and your marketing tool. In cannabis a couple POS systems are trying to do all of it themselves and many of them offer some basic functionalities that we do but at the end of the day all we do is focus on that and we do it really well and many POS providers understand that and they say hey you know what if we integrate with Baker we can give our client the best experience possible. We can give them our point of sale, Baker can handle the online ordering and the loyalty and the messaging, and if it works well together that client is going to be really happy and they’re not going to churn and that’s great news for a POS company as well.

So we are really working closely with these POS companies to do just that and insure that if you order something online that order shows up directly in your point of sale. If we’re not integrated with the point of sale that order will show up in Baker and you’ll pull it off the shelf but obviously it’s a much smoother process when we have that full POS integration.

Matthew: Tell us about the loyalty features in Baker and how we get customers to be more loyal in general?

Joel: Absolutely. Yeah so loyalty is interesting right. A lot of people understand that they need it, a lot of people don’t understand the best way to use it, and we provide a number of different tools that are pretty customizable to fit whatever the dispensaries needs are but we also have our set of best practices and that’s really important because at the end of the day like I said you start to see certain things that really work well and for us we’ve found that one of the best ways to drive loyalty is have almost like a digital punch card, like a check-in system so every time someone comes into the dispensary they sign in on the iPad, they get points just for coming into the store and we know that driving foot traffic means that customer is going to be more likely to see something and maybe buy something else and just keep them coming back builds good will.

And we find that’s actually more effective than a points per dollar because then you get this long tail where you have these really high spending customers on one end and they actually take up the bulk of your loyalty resources and the majority of your customers don’t benefit from it because you have to build your system to cater towards these really high spenders. So Baker has actually designed at its base level to just be points per check-in. So every time someone comes they sign into the Ipad they get points, once you get a certain amount of points there are certain rewards that you’re eligible for, and it’s not a static list of rewards and it’s not like you have to get this at this milestone. So after you accumulate points think of it as like a ticket at an arcade right.

You can spend 100 tickets and get the gumball or you can spend 1,000 tickets and get the stuffed animal or you can save up for 10,000 tickets and get the race car. So we let people choose do they want to redeem their points now for something smaller or save up for something bigger and this allows them to choose rewards that again are relevant to their interests because if you have a reward that’s a free pre-roll once you get to 100 points a lot of people don’t like pre-rolls right. People like to roll their own. If they don’t like to smoke whatever it is so again it all feeds back to that customization.

Matthew: What about getting the dispensary staff trained up and up to speed quickly so they can use this without their being a huge learning curve? How does that work?

Joel: Yeah. So when you’re a new client you get a box in the mail and it comes fully ready to go. It comes with an iPad that all you have to do is turn on. It has an instructional video when you first turn it on. It’s preconfigured for your store specifically based on your color scheme and logo and everything else and our generic loyalty system or whatever you decided upfront is also preloaded. All you have to do is just turn it on and sit it there. People like it. They walk up to it, they use it, they sign up for messages. All of a sudden you start building your customer list and it really is very easy to do from a dispensary standpoint. We have a full time onboarding specialist who does nothing but help their staff get trained when you first get started and we have a full customer success team that works with you over the duration of your time with Baker to constantly evaluate what’s working, what’s not, tweak your messaging profile, figure out what sort of deals to offer, and really make sure that you understand what’s working.

And most importantly it’s for the feedback and it’s really important to know that everything we’ve built has been built based on feedback from our client’s right. We’ve been working on Baker for two years now and every two weeks for the last two years we push updates and those updates are constant reflections of what our clients are asking for. So for example someone says hey I’d love to write a bunch of messages on the weekend and schedule them to go out for the next month because I’m going out of town. So we built that functionality right and now a marketing manager can sit down and in 30 minutes schedule all of the messages for the next four weeks and then walk away and it automatically happens or the ability to customize certain things in the loyalty platform right. We listen and work with our clients so customer success not only makes sure you know how to use Baker but their job is also to be a conduit for feedback between the client and our development team so we can continue to build Baker for our clients.

Matthew: What about user interface? It sounds like you’ve put a lot of thought into the experience. All you have to do is open the iPad and turn it on that’s a great convenience but what about the user interface in general? I know sometimes when development teams are working on something they’re so close to it that it’s hard to imagine someone looking at it for the first time. What can you say about that?

Joel: Absolutely. So David, one of my co-founders is a really talented user interface guy. He was top of his class at Cambridge studying architecture so very visual with the design and understanding how people interact with spaces and technology and then like I said we spent six years in New York building mobile web apps, iPad applications, Iphone applications, and really doing a ton of user testing of how people interact with technology and not only technology but the world around them and so his main focus is really taking all of that knowledge as well as all the knowledge we’re gaining from this space from our clients to build the simplest and easiest tools out there and we understand dispensaries are really busy places right. We see it firsthand. You have inventory challenges, long lines, new bud tenders that just started, I mean regulatory challenges. There’s always something going on that the last thing these guys need is complicated software.

So Baker is designed to actually make your job easier. Our menu takes a minute to manage as opposed to managing a menu elsewhere which can take 30 or 45 minutes. We have one button that lets you export your menu and print it versus other people who say it takes them 20 minutes a day to print out their menu or again we have automated stain alerts where we have dispensaries that are writing down your name and what strain you wanted and then when that strain came back in stock they were manually texting or calling every single customer and spending hours a week doing that. So our goal to automate as many of these things as possible, make everything one click, super simple because we know how hard it is to run your business and the last thing we want to do is be more work. We want to make it less work and help you be more efficient.

Matthew: Joel I want to transition into some personal development questions to let listeners know a little bit more about who you are personally. As you look over the arc or your life is there a book that stands out that has had a big impact on your way of thinking that you’d like to share?

Joel: That’s an interesting question. I studied psychology and philosophy when I was in school so I’m a big... I’ve always been curious into the way people think and what we think about and I would say Malcolm Gladwell does a pretty good job of helping us understand some of the odd tendencies that people tend to exhibit. We call them biases and there are certain predictable behaviors that we all fall victim to right because our brain takes these shortcuts and I think really reading that and understanding that helps me understand if I’m being irrational about something and really take a step back and look and say okay is this actually the right thing to do or am I just caught up in X, Y, or Z? So I think understanding that has been really helpful in shaping the way that we think about problem solving.

Matthew: Is there a tool web based or otherwise besides Baker that you consider indispensible to your productivity?

Joel: I mean I think Slack is the first thing that comes to mind. Our team is all very active on Slack. We have like I said the majority of us are in Denver but we have sales people in different markets and I think it’s really important to always be communicating and Slack makes it really easy to do that. I think email can get messy and the more the rest of your team knows what’s going on the better we all can be and make sure nothing gets dropped. So Slack is certainly the most important team wide tool and then personally I like an app called Wunderlist which is just a to-do list that syncs with my phone and my computer so no matter where I am if I have to jot something down I don’t forget to do it. It keeps it organized in one place.

Matthew: That’s great. I use a list app as well called Anylist and my wife and I we can share different lists of things we need while we’re out and so forth.

Joel: Yeah.

Matthew: It’s really handy that way.

Joel: Yeah it’s great. I have lists for myself, I have lists for different people on my team, I have a marketing list, I have an operations list, and then I have a shopping list that my fiancée and I both share.

Matthew: Yeah.

Joel: So no matter where you are you add something to the right list and you make sure it doesn’t get forgotten about.

Matthew: Yes. So well back to Slack do you think that’s cut down significantly on the emails that you have to look at and take some action on would you say?

Joel: Absolutely. Yeah I think it’s so easy for something to get lost in email purgatory and once it gets dropped it’s never to be seen again. So Slack is a great way just to get quick little updates and also channel wide updates without really clogging up everyone’s inbox. So I think there’s a reason they’re growing so quickly. It’s because it works.

Matthew: Joel where are you in the fundraising process? Is Baker looking for more funds currently?

Joel: So we closed a 1.6 million seed round that we announced earlier this year and we’ve been growing very quickly so from a money standpoint we’re in a pretty good spot but that said anytime you grow from 6 to 16 people in a year and we’d like to hire three or four more you’re always needing more resources to fuel growth at that pace. So we’re fortunate that we have some really fantastic investors who will continue to support us and also really well connected investors and we’re constantly getting interest from new and exciting people. So I guess my rambling answer is we’re not aggressively fundraising but we’re always keeping our ear open and there’s a very good chance we’ll put some more money in the bank soon when the opportunity that’s right presents itself so always is the answer.

Matthew: And how can listeners find and connect with Baker online?

Joel: Our website is www.trybaker.com. It’s www.trybaker.com and there you see most of our B to B tools right so if you’re a dispensary out there or even a (28:48 unclear) an edible company looking to figure out how you can better engage your customers check out www.trybaker.com and you can see all of our tools and if you’re an end user you can go to app.trybaker.com. We’re a mobile web app because Apple won’t let you do cannabis commerce in the app store but if you go to app.trybaker.com you can see all the different dispensaries that are on our platform and actually see what products they have in stock and if you see something that catches your eye you can place an order and reserve it right there.

Matthew: I got to say this is what I really love about the cannabis industry is that there is smart entrepreneurs doing really interesting things but also the industry as a whole doesn’t have to many legacy systems particularly in software so they can just boom go right to Baker or some other software that helps them a lot right away and get kind of the best and greatest from nimble little teams like you have. So this is an exciting time to be alive and congratulations to you. Good luck with everything and thanks for joining us on the show today.

Joel: I appreciate it. Yeah I think you hit the nail on the head right the tool that you use to manage your pizza shop should not be the same tool that you use to manage your dispensary right.

Matthew: Right, right.

Joel: Cannabis is a unique and special industry and we’re excited to be focused just on it alone because there’s enough there to keep us busy.

Matthew: Thanks Joel.

Joel: Alright thank you. Take care.

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Matthew: Hi. I’m Matthew Kind. Every Monday look for a fresh new episode where I will take you behind the scenes and interview the insiders that are shaping the rapidly evolving cannabis industry. Learn more at www(dot)cannainsider(dot)com. That’s www(dot)cannainsider(dot)com. We’ve talked about CBD or cannabidiol on the show many times. Just to review thought, CBD is a non-psychoactive compound from the cannabis or hemp plant that has many benefits. Now our friends at Treatibles have put together a one list chew that can help your dog or cat become more calm and balanced. Valerie wrote in to tell us about her experience with Treatibles.

Valerie writes, “My ten year old Husky/Sheppard/Lab mix Chuck is my faithful companion. Chuck got significantly quantifiably better from using Treatibles. It took about three days of feeding Chuck two to three doses a day to see the full effect, but he did get noticeably more comfortable on the first day of feeding that to him. Before CBD Chuck limped and couldn’t enjoy longer walks though he clearly had the desire for them. Once he started taking them he could leap around again.” Thanks for writing in Valerie. Treatable Chews are legal and available in all 50 states right now. If you want to learn about what Treatables can do for your pet, visit www(dot)cannainsider(dot)com/pet and get a coupon code for 10% off your order. Once again that url is www(dot)cannainsider(dot)com/pet now here’s your program.

The Canadian cannabis market continues to heat up and mature. Many licensed cultivators are turning their focus specifically to producing massive cultivation facilities to accommodate the demand in Canada. One of those producers is called Supreme. We are fortunate to have the CEO of Supreme, John Fowler with us today. John welcome to CannaInsider.

John: Hi Matt. Thank you for having me.

Matthew: Sure. John give us sense of geography. Where in the world are you today?

John: So I’m sitting here in my office at our facility in Kincardine, Ontario. So very shortly I’ll be sitting in the middle of approximately seven acres or six NFL football fields of high grade medical and potentially recreational cannabis. We are located near Toronto probably a city your viewers will know and we are about two hours outside of there on one of the great lakes, Lake Huron. I remember reading one time wine makers said you can’t produce great wine in an ugly place and we’re definitely trying to produce our cannabis in a beautiful place.

Matthew: Oh good. John tell us a little bit about your background. How did you get started in this business?

John: So prior to founding this business I was an attorney practicing corporate commercial law in Toronto but actually how I got into the law was as a result of medical marijuana so the program in Canada rather than being ballot driven as in most of the United States was actually court driven. Our constitution, our supreme court, and appellate courts have found that the constitution protects the right of reasonable access for sick Canadian’s who need access to medical cannabis and I actually developed a passion for the law reading these cases and particularly being impressed that a small number of lawyers were able to advocate for their clients and create an industry not on a ballot initiative or a legislative initiative but actually through the courts.

So that led me to become an attorney. I actually realized that that was a very small market for case work for making a living and became a commercial attorney and in 2013 when the government of Canada introduced this federal program which combines high volume, high quality cannabis production with a very regulated industry. I really thought to myself that if a new industry was going to be tailor made for myself I don’t think I could do any better than this.

Matthew: And what’s Supreme? Give us a high level overview of what you’re doing there with Supreme.

John: Absolutely. So Supreme is a Canadian publicly traded company. We trade on the Canadian Securities Exchange under the symbol SL and that is a fully regulated exchange so similar in concept to the Toronto Stock Exchange here in Canada or the New York Exchange. It’s not an over the counter. Supreme is essentially an investment vehicle under which we plan to develop or purchase multiple high value assets in the cannabis sector. So currently we have one asset that’s the seven acres licensee in Kincardine that operates this seven acre greenhouse. All 100% of our focus for the time being and the immediate future is on becoming what we believe will be the world’s foremost producer of 100% legal bulk cannabis and from there we’ll look to grow Supreme through business lines whether they’re organically grown or through acquisitions to position Supreme as a real force to be reckoned with in the growing international cannabis market.

Matthew: John what do you see as the benefit for focusing on the wholesale or bulk market? What’s the strategy there? Why did you go that route?

John: So the Canadian market here is quite unique. Some of your U.S. listeners may not be aware. So we have a market here that is roughly the size of California. Similar number of users recreational and medical and conceptually a similar market size but what’s very exciting is where California has a few thousand licensees we have 30. So what we realized was we have a very strong advantage in cultivation. We believe utilizing our size and our hybrid greenhouse model and the expertise of my management we believe we can produce cannabis more effectively than anyone in Canada but what we also realized was there were many question marks in terms of the details of the final mile to the consumer, the retail front.

So currently all licensed producers are limited to medical only sales executed online we don’t have store fronts. Moving forward we’re likely to get store fronts but it’s unsure what those will look like. So we made a decision to focus all of our investments on growing seven acres as a bulk distributor because no matter how the Canadian market unfolds, how regulated or how tight advertising is, what the point of sale looks like, we believe one thing will be true and that is the market will need high quality cannabis produced in a sustainable fashion and sent to the retailer and then to the consumer at a fair price where there’s good value and by doing that we realized that the best way to execute on that business plan was to carve off the retail side of our business and focus purely on the wholesale front.

What I also like about that is because we sell through other licensed producers currently working with six producers that are between a quarter and a third of the entire industry a bet on Supreme is a bet on the market as a whole.

Matthew: You mentioned the hybrid greenhouse model. What does that mean exactly and what are the benefits?

John: Absolutely. So as I’m sure is the case in most of the U.S. particularly where you get warm winters, or warm summers and cold winters most cannabis production is done indoors; mechanical ventilation, artificial lamps, and these kinds of things and we’ve always watched with maybe some envy of the greenhouse and field crop growers in California and the Pacific Northwest. When we went to start this business we started to see the challenges a company would have producing indoor cannabis on a scale such as seven acres but at the same time we saw some real quality limitations being a traditional greenhouse.

So the concept we developed which we call the hybrid greenhouse essentially we like to think is the best of both worlds. So it’s much, much more than just a light deprivation greenhouse. In concept it’s more like an indoor facility with a 100% skylight. So we divide the greenhouse into modular rooms, we add a higher density of supplemental lighting than most greenhouse growers would use, and we use a ventilation system that’s more in line with what you would see with an indoor grower than a greenhouse grower. The result as we’ve seen in our first crop which was completed over the last month is yields that are in excess of what we expected using indoor math. Year round production like an indoor grower but a cost scale much closer to a greenhouse grower and a little bit of extra love in terpene production that only the sun can provide.

Matthew: Okay tell us about that. About the extra love in the terpene production because terpenes is a hot topic and everybody’s always wanting to learn more about it. Tell us what your thoughts are there.

John: So without getting to much into the science. In a nutshell every artificial lamp whether it’s a HPS metal halide, LED, or any other technology the goal is to recreate the sun and some products do a better or worse job on spectrum and things of these natures but kind of our rule of thumb is if you can use the real deal let’s try to do that. So whenever we can use the sun that’s what we rely on. So for us it’s not just a cost metric, it’s also we find the sun grow cannabis with that full specter of light tends to just produce the best expression of a particular genetic as long as you can provide a good environment. So basically as I said with our concept of being an indoor facility with a skylight we’re able to use the full spectrum light of the sun but at the same time provide all the environmental controls heating, cooling, dehumidification, and even CO2 enrichment that you would see in an indoor producer.

Matthew: Okay and you threw out some facts and figures there about the size of your grow but can you say that once more? How big is the grow?

John: Correct. So at full capacity the facility is a little over seven acres. It’s about 35,000 square feet or the equivalent to about six NFL football fields. When we’re at full production we forecast we’ll be able to produce between 50 and 100,000 kilograms of cannabis per year and that will generate actually over one million plants per year on a five crop cycle.

Matthew: Wow. I assume you probably did a pro forma or some estimation of what a greenhouse would do for you in terms of a total indoor grow. How did that compare to what you’re projections were of just in your cost inputs electricity and so forth? Was there a surprise there or was it pretty much in line of what you thought the difference between an indoor grow electricity usage, utility usage versus a hybrid greenhouse?

John: I think the key here is our goal was not to be the cheapest supplier in Canada. So we do some things that create additional expense as compared to the average greenhouse grower. However we feel the result in terms of a more saleable, more desirable product is well worth it. So we’ve only been operating for about half a year so we haven’t... Canada obviously is a four season country. We haven’t been through the winters yet but initially our costs look very much in line with our projections and when we account for the additional yields that we’re able to provide per square foot per year as compared to traditional greenhouse I believe we’ll be quite competitive with greenhouse cost structures per gram and well ahead of the average indoor producer.

Matthew: Okay. What’s the patient growth like in Canada month over month? What are you seeing now? Is your estimate or is there official numbers on that?

John: Yeah so the patient growth is actually very exciting and very fantastic. So just to give context in our old system the court driven system I mentioned it took about 13 years to get about 40,000 patients into the program. Here we are approaching the third anniversary of the new commercial program and as of the most recent official statistics we’re between 75,000 and 80,000 patients. So just monumental growth for the three year period and also what’s quite exciting is we’re adding patients at a rate of about 10% month over month compounding. So really we’re starting to hit that hockey stick or that exponential trend in terms of patient acquisition and at Supreme we can’t take credit for that. That’s the hard work of all of the other licensed producers in Canada who are working with doctors and working with patients and building client databases but that’s part of why our wholesale model works.

We’re saying hey there is a lot of great companies out acquiring patients and working with docs to grow the market so let’s just sit back and supply them with cannabis so they can meet their own business goals rather than trying to roll up our sleeves and get in a fight over retail level market share.

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Matthew: Tell me about the rest of your team at Supreme.

John: Yeah so one thing I certainly find interesting having a background in marijuana production here under the old medical program and a good understanding of some high quality U.S. businesses people who come to see us at the greenhouse are often surprised that less than 50% of our staff actually work producing the marijuana. So we have a very big team from IT technicians and security folks to obviously accounting individuals, HR professionals, compliance individuals so it’s an interesting organization of a little under 30 people where less than half actually deal with the marijuana on a day to day. At a very high level some people of interest here we have a very strong board of directors at Supreme.

So key amongst that are our chairman who is a very successful developer here in Canada. Provides a lot of great expertise both on construction projects but also capital raising and corporate growth and we’ve also hired, brought on as a director a gentleman named Scott Walters who is a former investment banker who really has a passion for growing the cannabis industry in Canada and the U.S. So he provides us with great industry data and also data on developments, trends, and best practices coming out of the Pacific Northwest. So those are some great assets for Supreme and our shareholders. The company is run day to day by myself. We talked about my background and our CFO, Nab Dhaliwal who is a CA by trade but has a strong entrepreneurial side particularly with tech which I think is quite vital as day by day cannabis companies become more technologically savvy. I mean we’re just farmers on one hand but we’re quite tech savvy farmers at the same time.

And elsewhere on the team here at the greenhouse we’ve just been very fortunate to have great support in the local community and we’ve had a lot of highly skilled individuals who have knocked on our door to come work because they’re interested in what we’re doing and what we’re trying to achieve here and all in all it’s just a group here that I couldn’t ask for anything better in terms of a group of individuals to manage towards the common goal of becoming one of the world’s biggest cannabis companies.

Matthew: That sounds like a great team.

John: Absolutely. I wouldn’t trade them for the world.

Matthew: Listeners are always interested in the cost of cannabis and then what it could sell for so could you give us an idea of what the cost of cannabis is right now in Canada and what the selling price is per gram?

John: Absolutely. So in the legal market, so in the LP market where we operate which is a mail order system that I mentioned earlier the average sale price is in the 8 to 12 dollar range. So there are some outliers. There’s a few that are more expensive and there are a few that are less expensive but the average falls right in there for grams or small orders by patients. Our pricing model is we want to provide the retailers an ability to markup at least 50%. We’re very committed to our retailers doing well because our business grows when our retailers grow.

Matthew: Now I definitely don’t expect you to be an expert on illegal dispensaries in Canada but we can’t help but look at the headlines and see about all of these dispensaries that operate I guess you would say illegally or kind of in a gray area but probably illegally in Toronto and in Vancouver. What are your thoughts on that? What’s happening there and are more going to get shutdown in your opinion? Where do you see that going?

John: So definitely there has been immense growth primarily in and around Toronto and Vancouver. I would say five years ago we had a handful of very discrete medical cannabis stores and now we have hundreds. You’re correct to say there has been, it seems to be an increase of enforcement against these operators. For me I think the history of prohibition of cannabis shows if there’s demand for a product there will be supply whether it’s legal or illegal. If that was not the case you and I would not be having this conversation. Marijuana would have been eradicated in the 30’s and 40’s. So given that there is this demand to me it’s incumbent on our government to move quickly to regulate these storefronts and find a way to bring them into the market in a way that’s meaningful but at the same time is respectful and takes into considerations the safety of both users and non users.

So to me I think we have this awkward transitional period where I don’t think any action is going to be perfect. There is certainly critiques against legal action through law enforcement but at the same time there are valid critiques against doing nothing. So I think for me the big picture is I try to look forward and I try to do what I can to move our country as quickly as possible into a way where all the demand of Canada can be satisfied legally and where that industry is as inclusive as possible.

Matthew: What do you perceive as the largest challenges and opportunities for your business right now and also I’d say the market in general?

John: So if we talk first at the market I would say the biggest challenge is going to be creating a regulatory framework for recreational and medical sells that can do just what I mentioned which is provide a supply that is capable of satisfying all of the demand in Canada leaving as small as possible a black market. I think alcohol and tobacco show us there will always be some black market but I think that’s demand driven. I think most Canadian’s prefer legally sourced cannabis and as long as the legal providers give good value to their clientele I think that can be effective. So at the macro level I think that’s the challenges finding the right set of rules and regulations that allow for as close to a 100% legal market as possible and obviously the opportunity there is I’m sure there’s going to be a great growth in the number of companies and type of companies as regulations change and the recreational market opens up.

For Supreme our biggest challenge is going to be managing immense scale on a very short term. So one reason we like the wholesale business is it really allows us to focus on cultivation. So growing from the 20 or so thousand square feet we have today to 350,000 square feet under production in the next two to three years is a challenge there’s no doubt about it but the good thing is we’re able to focus all of our time, effort, and attention on that singular challenge which is scaling to become a leading cultivator which I think really mitigates a good deal of that risk. In terms of the opportunity what we see is a market that’s growing exponentially in medical. Supply is growing in more of a linear fashion and we see a massive catalyst event being the commencement of recreational distribution at some time in the next couple of years and that’s obviously going to have a massive increase in demand and we’re doing everything we can to make sure Supreme is front of mind as retailers and users of medical and recreational cannabis start making their purchasing decisions over the next 12 and 24 months.

Matthew: Okay so let’s say a lot of the rough edges get sanded and there’s a healthy medical and recreational market. What does it look like in Canada in 3 to 5 years from now would you say?

John: So actually I’m hesitant, my crystal ball has not been the most accurate in the past.

Matthew: That’s okay mine hasn’t either. We won’t hold you to it.

John: One reason that we like the wholesale business and we focus on growing is exactly that reason because what I can see in 3 to 5 years I’m quite confident we’ll have a recreational and a medical market and I’m quite confident I have a lot of faith in our government and our federal government and our provincial governments, our state governments that we’re going to have a pretty functioning marijuana or cannabis market. What that means for us is the only thing I can tell you absolutely will be true is a large functioning cannabis market needs a lot of great cannabis and that’s why we’re focusing on making sure we can be there as a leading cultivator and distributor of great cannabis to support the medical and recreational markets.

Beyond there the minutiae what does a store front look like, who gets to own it, how many extract products will be available, advertising restriction these things we actually don’t even speculate on those because as long as we can agree that great cannabis will be the backbone of any functioning cannabis market we’re well positioned to be successful.

Matthew: John I like to ask a few personal development questions to give listeners a sense of who you are personally. Is there a book that has had a big impact on your life that perhaps after you look at the arc of your life and look back on history has changed your perception or given you a new lens that you’d like to share with listeners?

John: Absolutely. So I actually thought about this one quite a bit thinking and maybe coming listening to some of your older interviews and I narrowed it down to two but I’ll give you one if I must. I would say that anyone looking to become an entrepreneur should read “The Hard Thing About Hard Things” by Ben Horowitz. That book is about Ben’s career in a number of different successful startup tech companies but in a nutshell it comes down to CEO’s and entrepreneur’s are not graded on their history of success and their good days. Really the good and the bad are separated by how effective you can be on the bad days and it talks a lot about identifying those bad days and doing everything you can to keep the company going in the right direction.

So I think that is fantastic and if I can slide in one more I think everyone should have a look at “Zero to One” by Peter Thiel. That’s our concept here. We believe that through our hybrid greenhouse model we’re going from zero to one in terms of creating a totally brand new way of cultivating cannabis that combines the best practices of indoor cultivation with the power of the sun and the cost savings of a greenhouse.

Matthew: Is there a tool web based or otherwise that you consider indispensible to your life for productivity that you would like to share?

John: Absolutely. So we’re big believers here in virtual offices and virtual telecommuting. In part in necessity there’s 3 hours between our corporate office in Toronto and the greenhouse here in Kincardine. So whether it’s simple messaging software like Telegram or more advanced software say like Slack we feel very strongly in this day and age that every organization needs that quick sort of messaging solution that you can ask and get quick feedback on much more efficiently than typing out a whole email.

Matthew: John any thoughts on the American election? I just want to see if you can alienate half the audience really quick here.

John: I’m pretty sure you’re going to end up with a new president and beyond that that’s my only prediction.

Matthew: Does it look like a wrestling event the way it’s being produced in the conflict between the two? Is it entertaining out there in the great white north looking at this?

John: Entertaining yes until you realize that the TV drama is going to result in the next U.S. president.

Matthew: Right, right yeah right. That’s no laughing matter. Okay well John in closing how can listeners learn more about Supreme and can you tell us is there an opportunity to invest in the company that we haven’t discussed yet?

John: Absolutely. So the best way to find out about Supreme is to visit our website. It’s www.supreme.ca. So it’s www.supreme.ca, a Canadian ending and if you go there you can learn a bit more about the company but more importantly you can join our mailing list so you get all of our news releases and shareholder updates. Currently we’re not actively raising funds. We were very successful in closing what I think is the biggest non brokered private round for a Canadian marijuana company. We closed gross proceeds of approximately 15 million dollars over this (28:23 unclear). So we’re well funded right now for our phase 1 expansion which will take us to about 100,000 square feet under production and we believe in excess of 10,000 kilograms of production per year.

So in terms of future offerings the best bet is to join the mailing list but also viewers are reminded that we are publicly traded so someone can always make an incremental investment either through the Canadian Securities Exchange where we trade under the symbol SL like the Mercedes or on the OTCBB market where we trade under the symbol SPRWF.

Matthew: Great. John thanks so much for joining us on CannaInsider today we really appreciate it.

John: Awe it’s my pleasure anytime.

Matthew: If you enjoyed the show today, please consider leaving us a review on iTunes, Stitcher or whatever app you might be using to listen to the show. Every five star review helps us to bring the best guests to you. Learn more at www(dot)cannainsider(dot)com/itunes. What are the five disruptive trends that will impact the cannabis industry in the next five years? Find out with your free report at www(dot)cannainsider(dot)com/trends. Have a suggestion for an awesome guest on www(dot)cannainsider(dot)com, simply send us an email at feedback(at)cannainsider.com. We would love to hear from you.

Please do not take any information from CannaInsider or its guests as medical advice. Contact your licensed physician before taking cannabis or using it for medical treatments. Lastly the host or guests on CannaInsider may or may not invest in the companies or entrepreneurs profiled on the show. Please consult your licensed financial advisor before making any investment decisions. Final disclosure to see if you’re still paying attention. This little whistle jingle you’re listening to will get stuck in your head for the rest of the day. Thanks for listening and look for another CannaInsider episode soon. Take care. Bye-bye.


Canada’s legal cannabis business are booming, just take a look at their stock performance over the last few months. The reason has to do with the incredible growth of users that are purchasing cannabis from licensed producers.

About our Guest: John Fowler, President & CEO of Supreme (CSE: SL) (OTC: SPRWF)

John began working in the medical marijuana sector over ten years ago. He pursued a career in law to assist medical marijuana patients with legal challenges relating to access, employment and tenancies. This culminated in 2013 when John assisted with R v. Mernagh at the Ontario Court of Appeal. John is committed to providing Canadians access to high-quality, low-cost medical marijuana and working with the medical community to improve physician education and support for medical marijuana.

Key Takeaways:
[2:44] – John talks about how he got started in the cannabis space
[4:13] – High level overview of Supreme
[5:31] – Benefits on focusing on the wholesale market
[7:39] – John explains the hybrid greenhouse model
[9:35] – John talks about terpenes
[12:48] – Patient growth in Canada
[14:50] – John talks about his team at Supreme
[17:34] – Cost of cannabis in Canada
[18:44] – John talks about illegal dispensaries in Canada
[20:38] – John talks about challenges and opportunities in his business
[23:20] – Canada’s cannabis market in the next 3 to 5 years
[24:46] – John’s book and web tool recommendation
[27:43] – Contact details for Supreme

Learn more at:
http://www.supreme.ca

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The Five Disruptive Trends Shaping The Cannabis Industry Now

Consolidation is Happening – Wholesale Platform Cannabase Acquired

cannabase helix tcs cannabis industry consolidation

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Hi. I’m Matthew Kind. Every Monday look for a fresh new episode where I will take you behind the scenes and interview the insiders that are shaping the rapidly evolving cannabis industry. Learn more at www(dot)cannainsider(dot)com. That’s www(dot)cannainsider(dot)com. We’ve talked about CBD or cannabidiol on the show many times. Just to review thought, CBD is a non-psychoactive compound from the cannabis or hemp plant that has many benefits. Now our friends at Treatibles have put together a one list chew that can help your dog or cat become more calm and balanced. Valerie wrote in to tell us about her experience with Treatibles.

Valerie writes, “My ten year old Husky/Sheppard/Lab mix Chuck is my faithful companion. Chuck got significantly quantifiably better from using Treatibles. It took about three days of feeding Chuck two to three doses a day to see the full effect, but he did get noticeably more comfortable on the first day of feeding that to him. Before CBD Chuck limped and couldn’t enjoy longer walks though he clearly had the desire for them. Once he started taking them he could leap around again.” Thanks for writing in Valerie. Treatable Chews are legal and available in all 50 states right now. If you want to learn about what Treatables can do for your pet, visit www(dot)cannainsider(dot)com/pet and get a coupon code for 10% off your order. Once again that url is www(dot)cannainsider(dot)com/pet now here’s your program.

As the cannabis market matures and becomes more competitive we begin to see strategic alliances, mergers, and acquisitions. Recently Cannabase a wholesale cannabis marketplace announced it had been acquired by Helix TCS. Here to tell us about the wholesale cannabis environment and her recent sell to Helix is Jennifer Beck, CEO and Co-Founder of Cannabase. Jennifer welcome back to CannaInsider.

Jennifer: Thank you so much for having me.

Matthew: Jennifer give listeners a sense of geography. Where are you in the world today?

Jennifer: Denver, Colorado.

Matthew: Great and I am in Asheville, North Carolina. Jennifer you’ve been on the show twice before but give listeners a sense of what Cannabase does so they can get an understanding.

Jennifer: So the Cannabase platform is the oldest and largest cannabis wholesale market in the industry. We provide a whole suite of seed to sell marketing and sales tools for cultivators, retailers, and infused product manufacturers as well as powerful advertising tools for ancillary businesses to showcase their products and services.

Matthew: Okay. So you started Cannabase back in 2013. What was it like the first few weeks and months you were doing this? This all was just very unknown and I bet you’re probably wondering if this was even going to work but what was it like the first few weeks and months?

Jennifer: Yeah it was a really exciting, fast-paced time. Like you said we were moving a little bit in the dark. The space was much less saturated so there was a lot more discovery that had to take place. So when we began late in 2013 we went to the Marijuana Business Daily Conference in November which was way smaller than it is today. Everyone could fit in one small auditorium and we really were looking around at the other solutions that were available and were surprised how little technology there was outside of the point of sale space. So with vertical integration coming to an end in Colorado the following year we were really excited to kind of pioneer the wholesale space.

Matthew: And how could you tell it was starting to pick up steam? I mean you create this online marketplace where license holders in Colorado can come together and maybe buy from each other or sell to each other but you put the marketplace in place and then you just call people and say hey this is out here I just want to see if you want to come on or what happened next?

Jennifer: Yeah I mean those first six months were really focused on; they’ve always been focused on onboarding and user engagement but the chicken and egg problem of having buyers and having sellers which is what you need to make a marketplace work and come to life was absolutely the focus of those first six months. The beginning of getting the platform live so we went and met with tons of dispensary owners. We had over 60 dispensaries participate in our beta period where we worked really closely with them not to build a product necessarily as we envisioned it but to take their current work flow and to take their current hurdles and make them a streamlined online solution that was intuitive and saved them time and would make them excited and I think that was how we knew it was working because people were really, really excited.

Matthew: Beta is kind of an interesting thing because you have all these ideas and they sound great on paper until your customer’s say yeah I don’t care about that or they say this is really great and you’re like wow I didn’t really think they’d be using this much as they are or what were some of the initial feedback you were getting in beta? What did they like, what did they not like?

Jennifer: Oh that’s a great question. Very quickly people were accessing the platform to buy and sell but also to see prices. Before Cannabase there really wasn’t a centralized place that you could understand what the market was demanding at that moment and as you know pricing is very volatile. So we began developing Cannalytics which are interactive kind of data and charts in the app. That was a huge hit. Making listings incredibly easy to build and manage and maintain. One thing that we discovered was that our background had been in technology. Building technology solutions for companies that were more excited about I guess using technology so I came from a company called Track Via which built custom business database applications for managing your workforce and that was a very, very different environment than building wholesale solutions for these new cultivators and retailers who maybe had one computer in the back room.

So we needed to get them excited about engaging, excited about using tools to their full capacity, and what it challenged us to do was make things as streamlined and intuitive as possible. So a lot of the early (06:30 unclear) were around making feature sets more accessible so that business owners would use them to their full capacity.

Matthew: That’s a real draw to get people to log on just to see what pricing is like and then when they’re on they can then use the wholesale marketplace. When you started in 2013 what was the wholesale price of cannabis at that time?

Jennifer: So we actually didn’t go live until early 2014.

Matthew: Okay.

Jennifer: So that’s when our data starts. At the time pricing was around 2,100 a pound.

Matthew: Okay.

Jennifer: And medical was cheaper at about 1,900 whereas recreational was about 2,300, 2,500. So at the time recreational grows were just coming online and product was very scarce and it was really demanding a premium.

Matthew: So why is that then is it because of the excise tax or is someone who’s licensed to be a medical cultivator is not the same as a recreational cultivator? What’s the difference there?

Jennifer: So medical and recreational product needs to be medical or rec from seed to sell. So you have a license as a medical cultivator or medical retailer. Actually with medical you have to have both because it’s still a vertically integrated model. So you need to as a medical dispensary grow 70 percent of what you’re going to sell yourself and then there’s a 30 percent allotment for wholesale. So it keeps the market small. All of the retailers are growing their own product and then there’s a little bit of wholesale product moving around. On the recreational side it was vertically integrated for the first about ten months of 2014 just to; I mean like the current model and make it a little bit more (08:14 unclear) for the current business owners and then in October 2014 mandatory vertical integration expired for recreational product.

So at that time you could still be vertically integrated if you wanted to. You could have your own grow as a dispensary and grow your own product like you always have. A lot of business still operate that way but it also made being a standalone grow or a standalone cultivation legal for the first time which meant that we had big cultivations coming out just focusing on growing lots of product and growing it well and that’s what’s really created the recreational surplus that we don’t see in medical which is still a vertically integrated market today.

Matthew: Okay that makes sense and what besides flower is on Cannabase? You mentioned edibles and so forth but what’s the marketplace look like if someone were to log on for the first time and see it? What’s selling? What are people most interested in?

Jennifer: So in Cannabase you can buy or sell like you said flower, bud, trim, extract, edibles, seeds, clones really any type of extract or medicated product that the licensee’s are interested in moving.

Matthew: So Jen if someone’s an edibles manufacturer what’s the best way to go out there and to get other license holders interested in their product? I mean they’re brand new. They don’t have a reputation yet. They want to sell to other license holders. How do they put their best foot forward?

Jennifer: That’s a great question. So the edible market in Colorado is unique because it’s the only product that you’ll see on a retailers’ shelves that are still branded as the infused product manufacturer. So you can walk into Live Well and you can see Incredibles Bars or you can see Mary’s Medicinals. Bud tends to not be the same way because it was a largely vertically integrated market and still is most flower is branded with the dispensary’s name that it’s being sold at. So you’re not exactly sure what cultivation you bought it for. Some people try to change that and hope that their brand will live on once it hits the retailer’s store but usually the retailer is going to rebrand it and say this is our flower.

But edibles on the other hand stay packaged as the business that produces them and that’s a lot of what sales. We have brand names in edibles. We have Incredibles, Mary’s Medicinals, Edipure, and people learn what they like and they shop for those brands. So the edible space has been a really exciting space to watch grow because we’ve seen really powerful brands emerge. Cannabase has been part of this because we built early on what we call MIP catalogs. So MIP catalogs are slightly different than our traditional listings and they’re a place that infused product manufacturers including people making tinctures and patches and extracts anyone that has a product that’s going to stay branded on the retailer shelves. They can activate a MIP catalog and it’s a dynamic visual catalog of all of their offerings.

So you can see each of the gummies or the candies and what they look like. We have surveys so that the infused product manufacturers can ask retailers hey what flavors would you like us to develop next or what have your clients been asking about or hey if you’re not buying why is it? So the edible space is kind of independent and very mature and our MIP catalogs provide a great space for brands to showcase all of their different products in a really beautiful visual format to help increase the likelihood of retailers stocking them on their shelves.

Matthew: So when two license holders get together and decide they want to do a transaction how does that work then? What’s the next step?

Jennifer: So we have a couple different options. We allow users to connect over listings which opens up just an in app message center that’s fully encrypted, very private, and integrated with text messages. So they’ll get mobile alerts and they can go back and forth and have a conversation. On every listing we show the number of views that listing has had and the number of connections it has. So you get a little bit of an idea of supply and demand. We’ve also built negotiation dashboards. So negotiation dashboards give businesses a place to go back and forth on price without having to necessarily send each other messages with all the nicey’s like hey how are you? What about this strain, what about that strain? They can really just use more of a shopping cart approach. Say I want to buy this, this, this, this. Here’s the price I’m offering, here is the delivery that I need, and then the other party can accept or deny and the dashboard reflects those changes live with some messaging on the side if you do need to talk.

Matthew: Oh that’s handy.

Jennifer: Yeah.

Matthew: That’s great.

Jennifer: So it’s a really cool feature.

Matthew: Okay let’s talk about the price of cannabis now versus the last couple of years because that’s what people really; their ears perk up because they’re wondering how much profit can I make, how competitive do I have to be, how much stuff to bring down my cultivation costs, and so on and so forth. Where is the wholesale price of cannabis as we speak now in late 2016?

Jennifer: Well I mean it’s a really astute question and I like what you said about people beginning cultivations now and needing to kind of rethink their original assumptions. I can’t tell you how many people we meet who have projected selling their flower at 2,500 a pound which is what it was beginning of 2014 and then at a couple different stages when we’ve had shortages then the prices have risen there but in general they’re much lower. So prices today overall are about 1,500 a pound with med holding steady at 1,800. So you know back in 2014 it was at 1,900 today it’s at 1,800. So it’s really stayed steady. However recreational; the price of recreational flower has gone down considerably. The average right now we’re seeing on the platform is about 1,450 a pound but that’s up a little bit. A couple months ago we were seeing down at 1,000. People moving product for 800 and truly that’s for product that is testing well.

So I think a lot of the new recreational grows that come out on a very large scale their first batches they’ll pump out might have some strains testing at 6% or 7% or 10% or 12%. With the rec market becoming as flooded as it is with all of the standalone cultivations that have popped up over the last year and a half that product is really, really, really hard to move and you’re going to be demanding much, much lower prices just to get something for it. To demand that 1,450 a pound for your rec product today you really need to have high testing, high THC with great shelf display really beautiful, really full buds. It needs to be top quality to demand that 1,450 price.

Matthew: Wow. This is what I thought would happen last year and I was totally wrong and now it’s finally come around and I keep on seeing or talking to these growers in Pueblo and other places and they’re bringing more and more supply on and they’re doing it on a much bigger scale with much more efficiencies and it just makes me wonder the cultivators that are just not prepared for this or don’t have some sort of unique selling proposition I’m worried are just going to get monkey hammered here. It’s going to be a tidal wave of supply. I could be wrong about that. I’ve been wrong before but I mean do you see us moving into an era of vastly larger cultivators who are using efficiencies and economies of scale to kind of disrupt the market?

Jennifer: 100% you’re right and it’s already really in motion and when you predicted that the price would fall sooner I think you were right and it was really some extraneous factors that kept it from doing so. So last year we began to see prices spike around this time last year. It was a little later though. It was more around November. October, November we saw prices shoot back up again but that wasn’t because of anything we really could’ve anticipated. There were some regulatory and testing issues that became more stringent all of a sudden and there weren’t enough labs equipped to test for the things that suddenly needed to be tested for and so we not only had people throwing out large batches of product but we had a terrible laboratory bottleneck.

So that bottleneck eliminated supply for a while shooting prices through the roof but that was a superficial price increase in terms of the actual trend. Trend wise what we have seen is exactly what you predicted large scale cultivations coming online with much more efficient growing techniques pumping out tons of product and very few people setting up standalone retail centers especially with the moratorium in Denver on new licenses for retail centers. We don’t have enough retail centers to absorb all of the product entering the wholesale market and demand hasn’t spiked as dramatically or as quickly as these cultivations have been built.

Matthew: Yeah wow. That is why I would prefer to have a license in a state that has limited amount of licenses so you can get around this problem. You want to have constraint on supply to maintain margins if possible otherwise you just have to be the huge, huge economies of scale especially when we have cultivators coming online that have massive greenhouses. That really brings down their operational costs so this is going to be really interesting to watch. I mean I think cannabis is kind of interesting because we’re going to leap frog a lot of technologies. Just as in Africa they’re not putting down phone lines they’re jumping right to wireless.

We’re going to see cultivators jump to new technologies because they don’t have any legacy technologies and it’s going to allow for vastly greater yields and growth in the field. So it’s going to be exciting to watch. It’s good to be in the picks and shovel side of the business like you’re in not providing the marketplace.

Jennifer: Absolutely, absolutely. We’re all kind of living it live and what’s been interesting is we have the medical market to compare the recreational side to and in the medical side where you have these checks and balances that whatever you grow 70% of it you have to sell yourself there’s a natural control there. You understand your own sales cycle and you don’t necessarily grow that much more than you’re going to be able to move from your shelves. On the recreational side where we’ve seen that limitation lifted the natural tendency is like you said people to put really big money into really efficient grows where they can leap frog and discover new technology.

I mean this has been an underground plant for how many years and now all of a sudden tons of capital and time and attention is being infused into growing techniques and how to really create the best product at the lowest price possible and while that innovation is very exciting we need to make sure that the market can support all of the product that’s coming out of it otherwise we’re going to see a lot of businesses not last as long as they were hoping.

Matthew: Right and I didn’t mean to discourage anybody listening it’s just that there are opportunities to find different ways to add value and I know for example in Boulder there is some kind of artisanal cultivators that sell out their whole crop before it even germinates because they have such a good reputation. So there’s other ways to add value. The companies that have a me too product that are going to have a harder time and going to see smaller and smaller profit margins. So it’s just time to evolve a little bit I think. Unless you’re in a marketplace that has limited licenses and it’s tightly controlled. That’s a good place to be.

Jennifer: Absolutely. There’s so much room for innovation. I mean especially on the edible side, the tincture side, alternative delivery methods, and people overwhelmingly don’t want to smoke. They want to find other ways to consume cannabis for whatever reason they do to sleep, to exercise, to relax, and so I think there’s so much room for innovation but it is about thinking outside the box and being a mass bulk supplier of flower it’s probably; I personally wouldn’t recommend doing it unless you are sure that you can produce very, very, very high testing like you said. High testing, well branded product that’s going to be able to differentiate itself very well in the market.

Matthew: Let’s pivot to your recent acquisition or how Helix TCS recently acquired Cannabase? When that courtship first started what was it that kind of perked up your ears like hey what’s the synergies here? How can this make sense? What were you thinking about because Helix does some interesting things? Why don’t you talk a little bit about that?

Jennifer: Absolutely. So we approached Helix because they are the leaders in transport and logistics so the absolute leaders in the security logistic space which is essential for a wholesale market and we really wanted to work with the best in that space. So that was kind of what began the relationship. Once we began working together we got a better idea of their vision which was to create integrated operating environments for these license cannabis businesses and you’ve spent a lot of time with me so you know I’m very, very, very passionate about integrated solutions for business owners, for infrastructure in this space that connects all these disjointed startups and all these yeah disjointed startups and components that the license businesses need to grow and so we really shared a common vision of building integrated solutions that would maximize efficiency.

The founders of Helix TCS have incredible experience in emerging frontier markets. So they have experience dealing with spaces with nebulous or conflicting regulations in the laws where there are many new entrepreneurs. Where there are businesses surviving off of pure fundraising model which can kind of skew the market and they have a lot of experience in growing successful companies. So for us at Cannabase it was kind of a no brainer that from the base level of being able to provide cutting edge logistics to our clients to being able to expand our capabilities to provide those integrated solutions I’ve always been talking about and wanting to see come to life as well as the deep intuition and market experience that come from people who have grown successful companies in these crazy environments.

I don’t want to say it was a no brainer because our company, Cannabase is very, very important to us and it was a decision that couldn’t be taken lightly but once we went down that road there really was no turning back. We were so excited to join with them.

Matthew: Yeah you’re merging together the online marketplace with the offline logistics and expertise so the world of bits and atoms come together. That’s a compelling offering and it’s a difficult thing to follow.

Jennifer: Thank you. Yeah it’s incredibly exciting and allows us to do much more quicker than we would’ve ever been able to do on our own and we think it’s a pretty incredible offering now that we’re able to bring to the market and able to continue expanding upon.

Matthew: Now you’re in Colorado. Where else where Cannabase and Helix extend their reach to in the future?

Jennifer: So we’re in Colorado. We’re still in beta in Washington. But however one huge change that’s happened since the beginning of our life here with Helix has been the beginning of a couple very powerful strategic partnerships with MJ Freeway and BioTrack. So we have basically entered into agreements with both companies that allow us live inventory data and integration with their systems exclusively nationwide.

Matthew: Wow.

Jennifer: So that’s going to be a very, very, very powerful channel to take the wholesale market and the live data to the next level with a more real-time live exchange model and give us a very powerful avenue for nationwide distribution.

Matthew: Wow. So for people that don’t know MJ Freeway and BioTrack are the two largest seed to sell tracking software so that’s a powerful value proposition. That’s great.

Jennifer: Thank you. Yeah it’s really huge. I mean being able to pull inventory data live and connect buyers and sellers is going to greatly increase the efficiency of wholesale transactions and the amount of data that it’s going to make us exclusively privy to is going to allow us to provide very enhanced Cannalytics and market data to our users allowing them to make great decisions, enhance forecasting. We really couldn’t be more excited about the opportunity.

Matthew: Yeah. That’s incredible. For entrepreneurs that are listening that want a product that stands out we talked a little bit about adding value; how to start on the right foot. Let’s put you on a hot seat here. If you were to create a product, if you had to wave a magic wand and you had to do something besides Cannabase and Helix and you’re going to create let’s say an infused product. What would you try to do to standout and kind of create that unique selling proposition that would allow you to have a thriving business?

Jennifer: Oh great question. I think the infused product space is really fascinating and would really encourage a lot of people who are looking to get into the space to explore that area. I would definitely start with high testing product, lab tested product, pesticide free clean growing method so really knowing where your product is coming from is baseline important these days. The old adage of well we’re just going to be the best. We have the best pot. We’re going to use the best product. That song has been sung so many times that it’s really lost its meaning in this space.

Matthew: Right.

Jennifer: So you really need to think about what does make you unique? I think the biggest thing is making sure that you have a unique value proposition. Is it the method of deliver, is it how fast does it take effect in someone’s system, how well can people control dosage, how predictable is the experience going to be? As more and more people start using cannabis in their daily lives it becomes more and more important that they’re not zonked out for longer than they think they’re going to be. That it produces a repeatable consistent experience. So I think making sure it’s well branded, it’s attractive, it sits well on the shelves, it has a long shelf life, it’s realistic in the market is very important but most importantly that the product is good, very strong quality, and that you have identified a unique value prop.

You cannot just put something great because you have the best stuff into the market and expect it to sell. You have to have something that really sets you apart but I think there is so much room for innovation especially in the infused product space and would really encourage people to explore and be creative.

Matthew: Yeah. I really would welcome more entrepreneurs that are interested in alternatives to sugar as a sweetener and who are looking to do things that are GMO free. Just healthier options and the reason I mention infused products is that for people that have infused product companies wholesale cannabis is just one input and as your prices go down you can offer your product at a lower price so you don’t have quite as much risk there if you’re risk averse. So that’s a compelling proposition but there’s just so many ways to do things. So many novel concepts still out there I think so I would encourage listeners as well who are on the fence to try something new and different just not a me too product because I think that might end in tears.

Jen as we pivot to personal development questions I like to ask a couple things to let the audience know you a little bit more. Is there a book that has had a big impact on your life where you look back over the arc or your life and say hey this has given me a new lens to look at things that’s really had an impact?

Jennifer: Absolutely. So I’m a huge proponent of The Lean Startup Methodology. The Startup Owner’s Manual is a phenomenal book to help new entrepreneurs think about how to iterate through a product and really make sure that users are engaging at any given point no matter what that product is. I think in a market like cannabis where you have to grow with it in realtime there could not be a more applicable framework for learning how to grow your business and for how to stay very cognizant of your assumptions and to be testing those at any given point to make sure that the vision is staying real with reality. So I couldn’t recommend the Startup Owner’s Manual more.

Matthew: Wow that’s a great suggestion. So did you when you were starting Cannabase then did you use The Lean Startup Methodologies to go to prospects and say hey we’re thinking about doing this are you interested in that? Does that make sense? Were you kind of bouncing the idea back on them?

Jennifer: Absolutely. I mean we were always trying to understand from the market a couple steps ahead of what we were building at that moment so that we were building the direction they wanted us to build. We’re not making this product for ourselves. We’re making it for their business so little things like it really quickly became apparent how much the high employee turn rate impacted a business’s ability to engage with our software because there is a learning curve and you need to onboard new users and what happens when someone leaves? How do they have access to that data and whatever relationships that that employee was cultivating? So although we began with just top level user accounts for each dispensary or cultivation quickly we built out employee roles and permissions that you could easily set up an employee account, it would be tied to your main account, you could set the permissions.

What should this person be doing, what shouldn’t they be doing, and then you could easily activate or deactivate that user without impacting your overall account and then you could access their messages and access what they were doing. This was really, really key for some of our earliest users who now have been through four or five or six wholesaler inventory managers and don’t want to lose the relationships, the traction, the listings, the data that they’ve built in the last couple years on their Cannabase account. So that’s just one example of listening to the problem which is hey people keep quitting and we’re switching over accounts and how can I see stuff and saying let’s really build out a piece of the platform that addresses this churn and makes this comfortable for business owners and make it a tool rather than a hindrance.

Matthew: Great points. Is there a tool web based or otherwise that you consider indispensible that you would recommend to listeners but you can’t say Cannabase?

Jennifer: I was going to say Cannabase.

Matthew: You can’t say that, can’t say that.

Jennifer: Yes absolutely. I am a huge; our whole team I should not take all the credit. Our whole team are huge fans of QuickBase and actually Eric who’s been with us since the beginning. He does all of our data and finances is a QuickBase hero. He is such a super user. He’s accumulated so many points with QuickBase. But QuickBase is a custom database application much like the company I used to work for TrackVia that allows you to create custom business applications tailored to your workflow. So it’s basically like you’re creating inner linking spreadsheets with forms on top which is what most software programs really are. So we have a custom CRM, a custom finance manager, custom dashboards, custom sales dashboard. Things that allow us to monitor our progress and monitor the app and monitor our development flow in a way that is totally unique to us and this was something we began building when it was just the founders and we just had a domain name.

We began setting up the QuickBase and all of our data about our accounts and really how we would track our workflow and manage our employees and being on QuickBase has allowed us to be as iterative with our internal processes as we are with the app and it’s allowed us to scale and keep very, very, very comprehensive records at every stage of the business which from getting off the ground to the acquisition was incredible important that we were that organized and still today every time we face critical decisions we’re able to look back at the data of the past and say hey have we been down this road before and does our data support the pivot that we’re looking to make. So I would highly recommend looking into a product like QuickBase or TrackVia instead of using just a CRM that you buy online or project management tools that you buy online.

Really thinking about your own organization and putting together those custom processes for custom workflow which allow you to really take ownership of how your team and your product is growing.

Matthew: And that’s the same company that makes QuickBooks right Intuit? Is that QuickBase?

Jennifer: Yes. QuickBase is owned by Intuit. I think that they have sold within the last year.

Matthew: Okay.

Jennifer: The actual QuickBase platform but yes it’s an Intuit product.

Matthew: Jennifer in closing how can listeners learn more about Cannabase, follow your work, and learn how to become involved?

Jennifer: So now there’s two places. You can of course visit Cannabase online at www.cannabase.io. So www.ca-nna-base.io or you can also visit our parent company Helix where we are putting a lot of press updates and recent news there as well. So that website is www.helixtcs.com.

Matthew: Jennifer thanks so much for coming on CannaInsider today. We really appreciate it.

Jennifer: Matt thank you so much for having me.

Matthew: If you enjoyed the show today, please consider leaving us a review on iTunes, Stitcher or whatever app you might be using to listen to the show. Every five star review helps us to bring the best guests to you. Learn more at www(dot)cannainsider(dot)com/itunes. What are the five disruptive trends that will impact the cannabis industry in the next five years? Find out with your free report at www(dot)cannainsider(dot)com/trends. Have a suggestion for an awesome guest on www(dot)cannainsider(dot)com, simply send us an email at feedback(at)cannainsider.com. We would love to hear from you.

Please do not take any information from CannaInsider or its guests as medical advice. Contact your licensed physician before taking cannabis or using it for medical treatments. Lastly the host or guests on CannaInsider may or may not invest in the companies or entrepreneurs profiled on the show. Please consult your licensed financial advisor before making any investment decisions. Final disclosure to see if you’re still paying attention. This little whistle jingle you’re listening to will get stuck in your head for the rest of the day. Thanks for listening and look for another CannaInsider episode soon. Take care. Bye-bye.


Jennifer Beck, CEO of Cannabase discusses how and why she made the decision to be acquired by Helix TCS and how Cannabase is now in a stronger position post-acquisition.

Key Takeaways:
[2:10] – What is Cannabase
[2:50] – Jennifer talks about the first weeks and months of starting Cannabase
[5:13] – What was the initial feedback in the beta phase
[7:31] – The difference in price in medical and recreational marijuana
[9:12] – What are people most interested in on Cannabase
[9:49] – The best way for edible license holders to sell their product
[12:10] – How are transactions handled on Cannabase
[13:33] – Jennifer talks about the wholesale prices today
[16:15] – Large cultivators using economy of scale to disrupt the market
[21:53] – Jennifer talks about Helix TCS acquiring Cannabase
[24:38] – Will Cannabase expand to other states
[26:42] – How to make your cannabis business stand out
[29:33] – Jennifer’s book and web tool recommendations
[34:51] – Cannabase’s contact details

Important Update:
What are the five trends that will disrupt the cannabis market in the next five years?Find out with your free guide at: http://www.cannainsider.com/trends

Join CannaInsider For FREE & Receive
The Five Disruptive Trends Shaping The Cannabis Industry Now

Summary of Cannabis Ballot Initiative Results with Canna Advisors

2016 cannabis ballot initiatives results

Read Full Transcript

Matthew: Hi. I’m Matthew Kind. Every Monday look for a fresh new episode where I will take you behind the scenes and interview the insiders that are shaping the rapidly evolving cannabis industry. Learn more at www(dot)cannainsider(dot)com. That’s www(dot)cannainsider(dot)com. We’ve talked about CBD or cannabidiol on the show many times. Just to review thought, CBD is a non-psychoactive compound from the cannabis or hemp plant that has many benefits. Now our friends at Treatibles have put together a one list chew that can help your dog or cat become more calm and balanced. Valerie wrote in to tell us about her experience with Treatibles.

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Hi CannaInsider’s. I just wanted to let you know before this interview starts that the audio quality is not perfect on here. I kind of rushed to get this out to you as quickly as possible so you could get an update on the ballot initiatives that took place yesterday, Tuesday, November 8th so I apologize that the audio is not perfect but it will return to great quality in the very near future thanks and here’s your program.

Yesterday there were many ballot measure that affected cannabis legalization. Here to help us digest all that happened are Diane and Jay Czarkowski. The husband and wife team manage a boutique cannabis consulting firm in Boulder, Colorado. Diane and Jay welcome back to CannaInsider.

Diane: Thanks for having us.

Jay: Matt thanks for having us.

Matthew: I know you’re busy in Orlando right now welcoming in the good news with clients there in Florida. I want to jump into all the ballot initiatives that took place yesterday and what happened but before we do Jay can you tell us again what CannaAdvisors does and what states you’ve been involved in?

Jay: Sure thing Matt. So CannaAdvisors was really born of Diane and I’s early entrance and experience in the cannabis industry in Colorado. We received one of the first licenses in the state. I think it was state license #7 back in the day. A few years later we started CannaAdvisors when we were approached by a group of guys in Connecticut that wanted to know if we could help them win a competitive license there. Connecticut was really the first state to have a competitive application process. Four years into this now really Matt the majority of the work that we do is we win competitive licenses and whatever it takes to make that happen the application side, the facility design side so that’s most of what we do but we’re also a collection of a lot of smart people mostly former operators so we do a lot of compliance work, facility work, operations, SOP’s. We’re a full service cannabis consulting and services company.

Matthew: Well let’s jump right in and talk about the biggest market. Jay what was on the ballot in California and what happened?

Jay: Well sure Amendment 64 passed and it was quite contention certainly not within the industry. There were a lot of folks in the industry in California that were very much against Amendment 64 but I think it was probably the majority of the population there that was certainly ready for cannabis legalization and they passed that with flying colors by a wide margin. It’s quite a complex amendment. Certainly the most complex amendment or bill or set of rules that I think any states going to ever see. From what I understand there are 19 different types of business licenses including 13 different types just for cultivation of various sizes and that kind of thing. The state intends to build upon what already exists in the medical industry. Licensing begins January 2018.

Supposedly there’s provisions in there to prevent monopolies but it’s certainly going to be a brave new world in California and there will certainly be many, many existing operators that will probably have trouble complying quite frankly just like we had the shake up when we began to get rules in Colorado six years ago.

Matthew: Just the cost of compliance you think is going to be very hard.

Jay: Well some of that and building compliant facilities and adhering to building codes and yada yada yada. Just like any business when government gets involved all of our costs go up.

Matthew: Yeah. You’re saying it’s just basic organization skills and business skills and transitioning from no regulation to some regulation or high regulation is just not a journey everybody can make.

Jay: Certainly.

Matthew: Okay. Well next up Jay is Florida where you’re at right now and where I’m at right now. I’m in Destin, Florida right now. Tell us what happened here yesterday? What was on the ballot? What happened, how many people voted and got out there? What’s the big news here in Florida?

Jay: Florida two and a half years ago the legislature passed a very weak CBD Only Oil Bill. It was really put in place so the politicians could say what do we need Amendment 2 for we already have medical marijuana. Well the program here stinks. It’s very limited. The people spoke yesterday. As you probably remember in order for this to pass they needed to pass by 60%. Two years ago the people of Florida voted for this 57.8% in favor yet it failed. So I think everybody was adamant this time and it passed. It’s full on medical marijuana with a good list of conditions for CBD, THC, oil, pills, infused products, dried flower the works. A very robust medical marijuana program.

Matthew: Wow. That is huge and for such a populace state. Florida now more populace than New York. So that’s really big. Now in terms of how long it will take to digest this ballot initiative and have it manifest into this market that has now been voted on how long does that journey take?

Jay: Well it’s going to happen rather quickly. We’ve already been working on the draft regulations with United For Care. Those will be ready to submit to the State House I would think by January at the latest. Per the language in this law we have to have send draft regs out in six months. We have to begin accepting license applications and begin registering patients in nine months. So it’s going to happen quickly. There will be a competitive license application process in Florida probably fall of 2017 and this program will develop. The people have spoken. I could tell a little bit about the numbers if you’d like.

Matthew: Yes. Dive in.

Jay: So when we got to the watch party last night everybody was pretty mellow. I mean they were happy and excited of course but there was polling numbers on the screen that showed how many people voted and what the percentages were. By the time I looked at it it says that eight and a half million people had voted which is close to half the population of Florida.

Matthew: Right.

Jay: And with that many people voting Amendment 2 was in the lead by 73% to 27% and I asked somebody has any

Matthew: That is massive especially when it was so close last time and now this time it was just overwhelming. I guess people had an opportunity to think about it and they saw it happening in other states so it just wasn’t so bad. I mean what do you think the reason Jay was for why there was such a big difference between the last ballot initiative and this one?

Jay: Well first of all I think a lot of people were certainly aware. This has been in the news and it’s been out in front of people for years now since we tried passing Amendment 2 in 2014. People are a lot more educated. People see this a lot more. The studies are coming out that this is not a bad thing. I think there’s two additional years of looking at this in Colorado and other legal states not that its rec here but it’s still a good bill weather for what’s to come and the people are sick of the drug war, they’re sick of all the issues we have from opiates. It’s time to legalize this plant so the people have spoken.

Matthew: Great points. Di let’s pivot to Nevada and Nevada is such a big deal even though it gets over shadowed by California or Florida or some other states but it really just can’t be overstated that it’s such a huge recreational market with people visiting and so forth. Dive into what was on the ballot there and what happened in Nevada?

Diane: Well Nevada in my opinion Nevada already had a really good medical marijuana market and a lot of that was because the political vibe around that was very supportive. They had representatives that were really working with the industry. People like Dina Titus and others that really worked with the businesses to make sure this program rolled out well and they made some changes along the way to make sure that they ironed out some of those initial bumps. So I think that’s really a key to for making sure that a program can be successful is that you have that local cooperation but gosh the legal market. The ability for people who go there already for this giant tourism market, the canna tourism market that could be available now to places like Las Vegas and Reno is just; it’s enormous and I think that this will be a really good program.

They’re going to add something that we haven’t seen in a lot of states that certainly I think has a play and that is a distributor category. Typically we see licenses that are broken down more like dispensary, processor, cultivation, and labs but this will have a distributor category added which I think will allow for a more robust kind of wholesale and distribution market and then of course they have people from neighboring areas that can still come and get it for medical purposes as well. Another good thing about this program is that it does still give those who went through the process of going through the licensing process for medical marijuana a good 18 months before they’ll be accepting new licenses for people that are new to the market. So it’s good for the people that have already been invested with their businesses there.

Matthew: That’s interesting. Yes I mean Nevada is just enormous. So thanks for that update there. Let’s move on to Massachusetts. Jay what was on the ballot in Massachusetts and what happened and why is it important to talk about?

Jay: Well Matt it certainly gives me a great pleasure to talk about Massachusetts because as you know we’ve been out there for a long time although we personally put the majority of our effort into the Florida campaign this year and there were a lot of other great folks out there spearheading the effort in Massachusetts. Two or three months ago Matt it was not looking good in Massachusetts. It was maybe polling 50/50. The governor was against it. The Mayor of Boston was against it. There was a lot of pressure on folks not to come out for it quite frankly but I think a couple of things happened that changed everybody’s mind.

First and foremost there was a 2.1 million dollar donation into the campaign by a private donor that really gave the campaign a shot in the arm. Number two you may have seen this Matt. There was a National Guard, State Police raid on an 81 year old woman in Amherst, Massachusetts.

Matthew: Yeah.

Jay: They came in with a Blackhawk helicopter from the air and a state SWAT team from the ground to seize her single marijuana plant she was growing out by her raspberry bushes. So I think when that came out it cost 60,000 dollars to eradicate that one plant. I think when that came out on the news that probably gave the campaign a 10 to 15 point bump right there. People are sick of that kind of thing and they want change. In terms of what the people vote for; cannabis is legal there. They don’t have the right to grow it at home like we do in Colorado but for the most part cannabis is now legal in Massachusetts; not now but once the law takes effect then we will see additional dispensaries, we will see additional cultivation facilities, lots of additional opportunities for business, and lots of opportunities of course for the people of Massachusetts to have access to this plant which of course is most important in all of this.

Matthew: You mentioned that the powers that be in Massachusetts really didn’t support this Jay. Do they drag their feet then in kind of getting this implemented or do you think it will be measured in months how long it will take to make recreational or adult use a reality in Massachusetts?

Jay: You know I’ll tell you I don’t know the specifics of the bill and what if any timeline it requires. Kelly Cross at the Marijuana Policy Project really spearheaded the effort and is probably the most knowledgeable but again Matt the people have spoken. They want this. Massachusetts voted for rec just like wow it was exactly four years ago Matt that the people of Massachusetts voted for medical and four years ago in the 2012 election they passed medical by roughly maybe 64% in favor so it was a wider margin. It’s certainly a narrower margin this time but it’s a clear winner so I would suggest that the officials in Massachusetts they get with the right side of history, get behind this, and make it happen.

Matthew: Yeah. Great points. Di let’s move to some of the smaller markets that don’t get as much attention but there are some developments there. What can you tell us about North Dakota, Maine, Montana, and Arkansas and Arizona? Let’s machine gun through them really quick.

Diane: Sure. Well Arizona sadly failed. I think their latest polls show it’s gotten about 47, 48% of the vote. So it looks like that one’s not going to pass which it’s a shame but my hope is that as the Marijuana Policy Project has projected there could be 47 measures in 2017 pass legislatively but who knows what happens with Arizona. Maybe they’ll be able to get it either back on the ballot or pass something legislatively in the future. I just think that as the more conservative states and I also think that the perception is that they have a decent medical program and that might be enough for people right now but that one looks like that was the only one out of the 9 measures for cannabis legalization this year that looks like it failed.

Arkansas that one I did not think was going to pass. They actually had two different issues on the ballot and even though the Supreme Court disqualified Issue 7 it was still on the ballot and I was concerned that that might divide the vote and be something to put in jeopardy Issue 6 but it actually passed. So that’s great for Arkansas. Maine Question 1 to legalize marijuana that passed. They’ll be able to have social clubs there which is something that we don’t have in Colorado. We’ve legalized cannabis but there’s no place to go and use it that’s not a private place so that was good for Maine; great for Maine. Montana had medical marijuana initiative I182 and that passed. That’s going to turnover a law that was established in 2011 that limited the caregiver’s to only being able to serve 3 patients each and it basically forced the industry to kind of shutdown.

But this will expand the program. Give more access to patients there and it will be better for the businesses there as well. North Dakota had a measure, Measure 5 to legalize medical marijuana and that passed. That passed actually I think by like 63%.

Matthew: Wow.

Diane: Quite a big gap there and that one looks like it’s going to be a program similar to Massachusetts in that they’ll be vertically integrated businesses, they’ll be a nonprofit component, they’ll be residents 2 requirements, and they’ll have some strict limitations on inventory. So all in all I think for the cannabis industry I think they’re estimating the wins of yesterday were equal to about eight billion dollars worth of new industry potential that we could see by 2020 because it will take some time for these programs to roll out.

Matthew: Wow that’s amazing. So Arizona was really the only state that it didn’t pass. The rec didn’t pass but they already have a robust medical marijuana market Di so it’s not like they’re in dyer straights necessarily considering everything else was a win.

Diane: Yeah I think there’s still room for that medical program to expand and like I said perhaps there could be something that could expand the market legislatively as well.

Matthew: Jay when you look at what happened yesterday with all these ballot initiatives on a high level what’s your general feel looking over the lay of the land and can you add some context into the big picture view of what all this means? Go ahead.

Jay: I would say no matter where you were in the country last night Matt, whether you were on the East Coast, the West Coast, the South, North Central, people across the country they voted positively for cannabis whether it be medical use, whether it be recreational use, adult use, whatever. People from all parts of the country voted yes last night and that’s huge. This is a huge turning point. We’re at that tipping point right now where I mean California alone sixth largest economy in the world legalized cannabis last night. The federal government has to listen. At this point they’re just being obtuse and their stance that cannabis is prohibited at a federal level that is just not a sustainable position anymore. So I think we’re going to see some change.

Matthew: Jay do you think all the ballot initiatives yesterday is going to accelerate the forum of banking or access to banking for cannabis businesses?

Jay: Well I won’t use the word accelerate. It would be nice if it was accelerated. I’ve been waiting for the banking issue to be fixed for seven years. Every year I tell people ha ha by the time you get your license next year it should be fixed and then another year goes by and another year goes by certainly again with California speaking, the rest of the nation speaking that’s going to get fixed one day. I don’t know when. I wish I did.

Matthew: Di as we close how can listeners connect with CannaAdvisors and learn more about what you do?

Diane: Well our website is www.thinkcanna.com and we’re on all the social media outlets and for the people that like the old school telephone our office number is 720-708-3154.

Matthew: Jay and Di thanks so much for jumping on the horn with us and doing a quick run through of the state by state initiatives. I really appreciate that.

Jay: Thanks Matt our pleasure.

Diane: Thanks for having us Matt.

Matthew: If you enjoyed the show today, please consider leaving us a review on iTunes, Stitcher or whatever app you might be using to listen to the show. Every five star review helps us to bring the best guests to you. Learn more at www(dot)cannainsider(dot)com/itunes. What are the five disruptive trends that will impact the cannabis industry in the next five years? Find out with your free report at www(dot)cannainsider(dot)com/trends. Have a suggestion for an awesome guest on www(dot)cannainsider(dot)com, simply send us an email at feedback(at)cannainsider.com. We would love to hear from you.

Please do not take any information from CannaInsider or its guests as medical advice. Contact your licensed physician before taking cannabis or using it for medical treatments. Lastly the host or guests on CannaInsider may or may not invest in the companies or entrepreneurs profiled on the show. Please consult your licensed financial advisor before making any investment decisions. Final disclosure to see if you’re still paying attention. This little whistle jingle you’re listening to will get stuck in your head for the rest of the day. Thanks for listening and look for another CannaInsider episode soon. Take care. Bye-bye.


A quick summary of the state-by-state results of cannabis ballot initiatives.
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Get the podcast on iTunes or the iPhone or Android App.

Key Takeaways:
[2:33] – How Canna Advisors helps clients win Cannabis licenses
[3:38] – Jay talks about the California ballot
[5:42] – Florida’s ballot results
[6:53] – Jay talks about how long the process takes after an initiative is passed
[8:41] – How Florida’s ballot initiative differed from the last one that failed
[9:45] – Diane talks about what happened with Nevada’s ballot initiative
[12:13] – Jay talks about the Massachusetts ballot initiative
[15:29] – Diane talks about the initiatives in ND, ME, MT, and AR and AZ
[19:35] – Jay talks about what all these initiatives mean moving forward
[21:06] – CannaAdvisors’s contact information

Important: Read the cheat sheet The Five Trends That Will Disrupt The Cannabis Indusry

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The Five Disruptive Trends Shaping The Cannabis Industry Now

The Latest Technology to Optimize & Automate your Cannabis Grow Room

smart bee controllers coupon code

Read Full Transcript

Matthew: Hi. I’m Matthew Kind. Every Monday look for a fresh new episode where I will take you behind the scenes and interview the insiders that are shaping the rapidly evolving cannabis industry. Learn more at www(dot)cannainsider(dot)com. That’s www(dot)cannainsider(dot)com. We’ve talked about CBD or cannabidiol on the show many times. Just to review thought, CBD is a non-psychoactive compound from the cannabis or hemp plant that has many benefits. Now our friends at Treatibles have put together a one list chew that can help your dog or cat become more calm and balanced. Valerie wrote in to tell us about her experience with Treatibles.

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Because of the high value and profit potential of cannabis cultivation we’re seeing brilliant entrepreneurs come into the space to help cannabis cultivators protect and optimize their harvest. One such company is SmartBee Controllers. SmartBee is creating automation and controls for the cannabis cultivator that are so impactful that SmartBee is becoming the most important tool for many cultivators. Here to tell us how to optimize and automate your cannabis grow is Skye Hanke, CEO of SmartBee Controllers. Skye welcome to CannaInsider.

Skye: Hey how’s it going?

Matthew: Glad you’re on the show today. To give listeners a sense of geography can you tell us where you are in the world?

Skye: I’m in Los Angeles, San Fernando Valley. All of our products are manufactured in Las Vegas and so we’re pretty much a West Coast type of company although we do have friends all over.

Matthew: That’s rare to find things manufactured in the U.S. anymore so that’s interesting. How’s that work?

Skye: It works out really great. We have a really great assembly team and engineering team that we’ve built over the past several years. Some really great minds and we found some really great people to put together our products and send them out to all of our growers.

Matthew: Before we dive into SmartBee Controllers can you tell us about your background and how you got into the cannabis space?

Skye: I have been growing for about 20 years now. I started more on the professional level around ’99 and just taken my time and efforts and put that into what I love which is growing plants. Growing these plants and through that have been through various ups and downs and learning experiences and have now taken those learning experiences and put them into a set of requirements for the software and hardware that really solved my problem which was knowing what was growing on at my grow when I wasn’t there so.

Matthew: Let’s back up a little bit. Can you tell us about what cannabis cultivators and business owners should be thinking about but aren’t? I mean when I talked to you a couple weeks ago it’s obvious that you have a different frame of reference on how to look at a grow and I’m always interested in helping guests use your lens or your way of thinking or your pragmatism that you bring to a grow. So if you were to walk into a typical cannabis grow that’s now using a SmartBee Controller what would your first ideas be when you’re looking at it in terms of it’s not optimized because of what?

Skye: Well a lot of people don’t know what’s happening over time. They don’t know how their appliances are actually working when they come on, when they go off. If they’re effectively controlling environment and because we do the data logging it really allows the user to understand the different outliers that could be happening in their facility. What’s happening over time is very key to understanding how to modify or dial in your space. For instance we like to preach simplifying process and creating efficiency and I walk into a lot of grow facilities that have just inherent problems in design where they’ve tried to scale a garage grow into a commercial type of scenario and it doesn’t translate well.

A lot of the key things that you’re doing in a garage grow are meant for stealth and not necessarily for health. You’re trying to cover the smell so you put your room under negative pressure inviting disease in. You use wood instead of inert hard surface type materials like aluminum or steel and so you’re inviting disease into these places and there’s so many variables. All of them have their place right so if you can prevent disease, if you can keep your environment dialed in at the right levels, if you can keep your humidity on point knowing that there are mechanical failures that are inherent in this very abusive environment that we have as indoor gardeners. You want to make sure that all of your variables are being taken care of and so there’s so many small components that need to be working in concert with one another and traditional grow room control systems don’t allow for that concert to take place.

They all operate independently. It’s like if an orchestra was all playing different; every instrument was playing a different song. They’re all playing music but they’re not coming together to create something that’s greater and better and so when everything plays together and is integrated you get a better solution and you understand the inner dependencies between your systems, you understand if there’s deficits in your control strategy that could be costing you money over time that you don’t even know about. If you know when to water and at what volume to water in order to get the wet up that you want in your medium and know when to water because you’ve dried down enough and you’re not letting the onset of stress take place. All of these things are really key to having a successful garden is simplifying your process and creating efficiencies. That’s really kind of what we strive for here.

Matthew: There may be some growers out there that we could say are confident to use a kind word. They think well my temperature won’t be an issue or humidity or electricity are not a problem. What would you say to them? Would you say hey these are mechanical devices and you can’t control them? I mean what are your words of wisdom there?

Skye: What I would say is I have a lot of buddies of mine who are growers who do really great without it and I have buddies who did really great without it and once they started using it got better. It’s one thing to get a couple pounds a light or a gram a watt but it’s difficult to consistently achieve that through growing seasons unless you have a really good formula that just takes care of everything but most often there’s one or two components which are not ideal and if you think about it from the perspective of potential lost yields. If you have the potential to get three pounds a light but you’re content with getting two pounds a light you’re kind of just being complacent. Not striving to do better, not trying to learn how you could do better. How you could dial in your space more.

It’s like a boat that has a hole in it. If it’s sinking slowly you’re like oh it’s just sinking slowly but over time that water you’re taking on is potential lost yields and if you can recapture that money and keep it in your pocket instead of having to get reimbursed for it it would be a lot better. So why waste your time and money if you don’t have to. If you can create efficiency and get better yields and have protections in place that prevent you from walking into a room full of straw or a room full of wilted plants why wouldn’t you do that? Why wouldn’t you do everything you can to get the highest quality medicine that you could? So I don’t know. There’s so many different variables but I’m more than happy to go through some of the specifics if you would like.

Matthew: I want to give listeners a sense of the physicality of the SmartBee Controllers that is what your product line is exactly if you were standing in front of a listener and you had all your product line there. Can you just walk us through that so they can understand what they physically look like and do?

Skye: So what I could do is I could kind of give you the basics and then I can walk you through the individual products that make up the system.

Matthew: Great.

Skye: What I like to say is we integrate all of your grow room systems into one software application that allows you to remotely monitor and control your grow anywhere you have an internet connection. It data logs from all of the sensors that are deployed in your garden and gives you a picture over time of what’s happening in your garden. Patterns begin to emerge in the data that shows you the health or not health of what’s going on in there. We have several different sensors. We have a light, temperature, humidity sensor. We have a light, temperature, humidity pro sensor that includes the ability to plug in a par sensor that gives you light intensity, temperature, photoactive radiation, and humidity and then we also convert humidity and temperature to VPB within the software. We have water content sensor modules which allow you to track root zone temperature and root zone water content so that you can decide when and at what volume and frequency to water at so that you prevent over watering.

So our light, temperature, humidity sensors they hang in the canopy of the plants and it essentially gives the user temperature, humidity, and light data right where the plants are at versus being on the wall as a lot of old style controllers are. Not necessarily right where the plants are. They wirelessly transmit back to the hive gateway which is the decision making rules engine for our system and then the hive will send our smartplugs and smart control commands to turn on or off based off threshold set points that the users define within the software. You get to control your irrigation based off water content. We have two set points for irrigation. We have onset of stress set point which is the lowest water content you’d want your plants to have before an emergency irrigation would be initiated and then we have the over watering set point which this allows timed irrigation in the event that the water content is too high to receive any irrigation.

And so what it does is once you begin to use your gardener’s intuition to understand okay my plants don’t look as good at this water content versus this water content. You can set these parameters. You kind of survey the system first. Take your methodology and your medium and apply a little bit of thought to the readings that you’re getting and then you can assign rules to that. It allows you to set up to the second timed irrigation within the software and so we have all of these appliances that can be assigned to different rooms. One system can control multiple rooms or control groups so that you don’t have to buy more than one. It kind of all puts it into one spot. You can create different rooms within the software and add different sensors and outlets to that room and define specific appliance types that you’d like to control with that grouping.

We control your lights, your exhaust fans, heaters, CO2 emitters, CO2 burners, dehumidifiers, humidifiers, irrigation pumps, irrigation solenoids. Pretty much all of the main components for a grow facilities operation and then we provide you with when all of those devices or outlets come on and off so that you can see how the devices that are made to control the environment and the irrigation; you see when they all come on and off and you understand if they’re doing what you want them to do based off the sensor data so.

Matthew: So when you turn on the software for the first time after implementing the SmartBee Controller devices around your grow what are you looking at when you see the dashboard for the first time?

Skye: It asks you to set the time based on where you’re at. It asks you to create a room so that you can start assigning sensors to that room. Our comprehensive user guide and startup guide go through the steps and we also act in a very consultative way. All of our sales reps here have grown in the past or in some form still grow and they are able to help provide context of use to the users if need be. A lot of times there’s a mix of different types of users. You have the commercial guys who are really looking to dial in their space and then you have the guys who have done a bunch of reading and kind of are starting off and they want something that’s going to give them a tool to do it better right from the beginning.

So we wanted to make the system’s user experience very friendly to novice or professional. We wanted to take some familiar grow room cues from different devices that they would be familiar with based off of traditional controllers and put them all into one software. So we give you a daytime and nighttime high and low set points all in the control pages. So when they first get there they can go through and see all of the different controls, how they can set their thresholds with those controls, and it really gives them just a professional tool to do better faster, to have more consistency across all of their systems, and to ensure that they’re operating it.

Matthew: So Skye is there one piece of feedback you get consistently from new customers that have implemented SmartBee where they’ve implemented it, they have it in their grow room, they’re comfortable with it, and they come back to you and say Skye this has helped me so much, this one feature, this one aspect that I didn’t have before. What’s their feedback there?

Skye: Well we get a lot of feedback. Sometimes it’s more like context of use like hey I really wish it would do this and then what we do is we can add those into our product roadmap and try to add those features sets in if they make sense to our decision making process for the system. One thing that we hear often is your system saved my harvest twice this year. It let me know my AC was out and I was able to turn lights off and fix the problem before it cost me huge. I’ve heard that from several customers. Like oh it saved my room three times this year, it saved my room twice this year. So mechanical failures are inevitable within our environments and so if you have something go out and you don’t know about it you can walk into a real disaster.

I just talked to a guy who lost 160,000 dollar crop because his air conditioning went out and it went out in the middle of the night and no one knew about it and so he’s a new user. So that’s one main thing is crop loss can be huge. If you don’t know something is happening it could ruin your day and your month because as we all know the overhead doesn’t stop if you lose a crop. You still have to keep paying all the bills and sometimes those bills are expensive. So saving your grow, giving you piece of mind knowing that if something is going wrong you’re going to know about it. It sounds email notifications.

We’re in the process of building a whole new cloud platform that has a notifications refactor that’ll do push notifications in addition to email notifications into our native app and then it also allows for the system to take action. So it doesn’t just let you know about it; it actually takes action based off your thresholds and so sometimes I’ll look for my notifications to see what’s going on. Sometimes what I do is I have two levels of lighting control and that’s what I recommend most often so that you have an overheat protection at a lower temperature and so it takes some of the heat load off of the equipment and so if you know it’s hot outside that heat outside can affect inside temperature and the performance of the appliance that you have in room.

Here in Southern California it’s going to be 110 today. It broke records yesterday and air conditioners have to work extra hard so one AC going out can mean a complete crop loss if you don’t have any type of redundancy in place. We preach a lot of redundancy with our sensors. We want to make sure that you have a couple levels of protection that if one sensor were to go down you would have backups in place and make sure that you’re not left without any protection. If you put your internet connection on a battery backup our hive has a battery backup onboard. It can still send out emails if you lose power. So the other day I was shopping with my kids and my wife and I got an email that my hive had lost power and two minutes later one of my neighbors called me and said hey did you guys lose power too and I was like yeah we did and it let me know before I could even get notified from anybody else that we had lost power. Sure enough an hour later I hadn’t had a chance to get there yet and the power came back onboard and it emailed me and let me know about it.

Notifications are huge. We’ve just added some new notifications for critical environmental events. So in addition to having thresholds that control devices and turn devices on and off we also have alerts that if it goes outside of a threshold range for alerting purposes you’ll know about it. If it gets to 90 percent humidity you should know about it even if your devices are trying to reduce your humidity you still want to know if something is really far outside of your ideal or optimum range. So it’s really important to know that this protects your investment from crop loss, it gives you a tool to understand if your systems aren’t working properly, and it tells you how to fix them so all of that kind of adds up into one cohesive system.

Matthew: Just a quick interruption to this interview to let you know that Skye and his team over at SmartBee Controllers have extended a 10% off discount code to CannaInsider listeners. Simply use the coupon code CannaInsider. That’s CannaInsider for 10% off your order at www.smartbeecontrollers.com. Somewhere in the checkout there’s a field where you can just put that in there and get 10% off. Now back to your interview.

How about redundancy? You mentioned that and I think it’s something we don’t always think about too much but we should be thinking about more. So if you have your AC connected to the electrical grid should you ideally have a generator backup in case electricity goes down or natural gas or something like that?

Skye: You know air conditioning systems typically fail because they’re not using filters, they have leaks in the system, a fan motor goes out. There could be a number of different reasons why an AC goes out but all that happens when an AC goes out is there’s nothing working against the heat load that is essentially your lighting. Your lighting systems in LA are classified as heat lamps by Building and Safety and so you have 3,500 to 4,500 BTU’s of heat being produced by these lamps and if your AC isn’t working you’re just heating up the rooms and it could get up to 140 in there if you don’t have any air conditioning. Heat rises really fast, stresses out your plants, it can force them to dry down really fast so if they’re drying down and for some reason you don’t have an overheat production on your lights your plants use all the water that they have in their root zone transpiring trying to cool off so what happens is they wilt and they wilt and then once they wilt they dry out because of the heat and it turns into straw.

Redundancy is key. Having backup systems in place. If you only need one super big dehumidifier to dehumidify your room think about using two slightly smaller ones for the same space knowing that if one goes out one will still be able to keep up enough to not have it completely degradate the stress level on your crop. I was just talking to one of the owners of or not owner but managers at Quest Dehumidifier and we were talking about how redundancy with systems can really be beneficial because it buys you time. I was talking to these other guys that have an extra AC in their room that’s set just to a slightly higher threshold so that if one of their systems stops working this other one picks up the slack. It’s things like that just having extras there so that when things go down there’s some type of mitigation of the damage that’s caused if that makes sense.

Matthew: That makes sense. You mentioned before how a lot of grows will have a sensor on a wall maybe not so close to the plant or the plants their trying to monitor. How are the SmartBee Controllers different in that way?

Skye: We have a hook on top and we try to drop either like a ratch string poley or some type of a string hook to where you can hang the sensor right in the plant canopy so you know exactly what the temperature is right at the canopy level. We know what the temperature is right there at the canopy; right where the lights are shining down on the plants, right at the canopy level and then that gives us really good information to what’s going on at our plant level. If our plant level and our leaf temperatures are getting into the 80 plus range you’re going to start seeing terpenes boiling off at the low temperatures. You’re going to start seeing airier flowers. You’re going to start seeing what can sometimes look like nutrient lock out or burn and sometimes it’s just a matter of light sensitivity.

I mean if the plants are not at a comfortable temperature they’re going to be sweating and they’re not going to be growing and you really want them to grow and be happy and at the right temperature and humidity level and if they’re not you’re going to see it in reduced yields and reduced quality.

Matthew: Are investors in cultivation facilities often asking or demanding that the growers have something like this in place before they invest?

Skye: They wish they had after the fact. A lot of times these investors are going in blind just trusting whoever they think they know who’s a good grower and sometimes these guys have done really well with the twelve lighter and they get put into 150 light grow and have no idea how to manage or schedule all of the tasks that need to be put into action and so our system is really great for investors because it gives some common ground for the growers to fix problems and dial in a new space that may be larger than they’re comfortable with. They may be perfectly suited for the size of it but give the investor information that they can both look at and say okay here’s what’s happening, here’s why I need to get this piece of equipment because the assumptions that were made in the facility about cooling or dehumidifying are not sufficient for the job and here is why.

CR humidity level is sitting at 65, 70 percent and our dehumidifiers are on all night long but without being able to reduce it. That’s a problem. So it just shows that you’re undersized for the job that needs to be done and so if the investor can look at that and go okay I can see that and make decisions based off of data rather than just anecdotally from their head grower or master grower that seems to be the term going around quite often. So that’s kind of where I see investors benefiting is them being able to see the data and make their own assumptions off the data as well as having their head grower look at the data and make his own assumptions and then they can come together and make informed decisions based off of what’s actually happening.

Matthew: Skye you have a lot of knowledge locked up in your head and I want to unlock it and share it with listeners so I’m going to ask you to explain a few things and talk about why each is important and why cannabis cultivators should be thinking about each. So here we go.

Skye: Okay.

Matthew: First one what is vapor pressure deficit and why should we care?

Skye: Vapor pressure deficit is in its simplest definition it is the pressure that’s being exerted on the plants based off of the combination of temperature and humidity and so at different temperature and humidity crosshairs you get a different atmospheric pressure and that atmospheric pressure can force the plants to transpire and drink water and use water. It can also be make the plant not need to drink water and so it’s a tool is what it is. It’s a tool that you can use to manipulate the crops growth pattern. You can use VPD to try and prevent disease from growing. Higher VPD can make it not ideal for disease to thrive. You can use it to make your plants drink more if they’re not drinking a lot. You can make it so that they grow in a more generative way.

By making them drink faster; I think of it like a body builder and the meal plan. They want to grow fast, they want to put on a lot of mass, and in order to do that they have a very structured meal plan and if you miss a meal in that meal plan it slows down your growth and doesn’t keep you in that ideal kind of what it is it a pattern or phase or push towards the success that you’re looking for and feeding plants is the same way. If you’re working them out regularly you’re kind of; they have really healthy roots and they’re able to be fed in a very consistent way often but not too much. Just enough where they’re able to use the nutrients in the water and they want to be fed again and they’re getting pushed and driven to perform.

This VPD can become a very big tool to aid in that. Think of VPD as the weight the body builder uses to work out and the feeding schedule is the meal program and if they’re both dialed in you’re going to get performance and you’re going to get gains. So that’s kind of how I would describe it I guess cause it’s kind of a complicated thing to explain. The different temperatures.

Matthew: No that’s a great analogy.

Skye: Yeah different temperatures and different humidity’s there’s a different VPD. There’s a different ability for the air to hold water vapor and that’s more what it is. It’s how much water vapor can the air hold at any given temperature.

Matthew: Okay.

Skye: And then that combination and the amount of water vapor that’s being held is what puts pressure on the plants to push water vapor out their stomata and drink water up from their roots.

Matthew: How about root zone temperature and how we should think about that in contrast to say other types of temperature in the grow room?

Skye: Well you know roots are very fragile and they don’t recover from damage well. So it’s better to keep them healthy from the beginning because it’s like adults can eat junk food easily but babies can’t and it could be really dangerous for a baby to eat a lot of junk food versus an adult because they have a little bit better ability to process and filter out some of the bad stuff. So with roots you want to keep your temperature very consistent so that they don’t become damaged. You don’t want to feed them too much because you don’t want them to become damaged. You want them to thrive so you have to grow them slowly and through a very consistent type of feed. You don’t want to jump them up too fast in intensity of the nutrient. You want to harden them off and help them to stay healthy and one of those ways of doing that is to not let the root zone get to hot and so usually a fluctuation of 10 degrees in the root zone can be really stressful on a plant.

So sometimes knowing what your temperature is in your root zone you can use pulse irrigations; very short irrigations with colder water to lower root zone temperature slightly just to keep it within an ideal range and keep them not being damaged in any way.

Matthew: What about EC? What is EC and why should we care about that?

Skye: So EC is essentially electrical conductivity and it’s a measure of nutrient strength in whatever you’re feeding your plants. If you’re using Hydro it’s hugely important. With a lot of organics they’re using teas and it’s very buffered but in production environments that are using hydroponics EC is greatly important. You don’t want to go to high because it can cause lockout and excess salt buildup in your medium which can stress your plants out and cause deficiencies by having too much nutrients and making it difficult for the plant to process that salt. Too little can cause a reverse osmotic effect where it starts pulling nutrients out of the plant because there’s more salt in the soil then is in the plant and so it even compounds the issue of nutrient lockout even more.

You water with too heavy a nutrient for too long you get a bunch of salt walls built up in your medium and the next thing you know your plants are looking deficient and people start giving them more nutrients and really they just need to flush it with some lower salt water and try to just give it a very consistent feed in the middle type of range. I like to stick within the I would say 1.3 to 1.8 EC range for most of my favorite plants.

Matthew: Okay. Let’s get into some practical and tactical questions about SmartBee next. How easy is SmartBee to set up and do I need a consultant to help me?

Skye: SmartBee is pretty easy to set up. We do have a full staff support department that helps to do remote access set up and some of the more networking things where we can log into your computer remotely and configure your router for you for a small fee and then we also try to as workers of the company help the customers to really understand how it all works and how it applies to them and there’s a hundred ways to do it right and more often than not I’m seeing different variations of growing and it’s really all about how it applies to you. We set up the system to be agnostic of growing style so that any user can come grab our system and find value in it using it for their specific methodology.

I don’t like to tell people how to do things. I try to just learn myself and to also give information to other people and so I have learned things from certain growers that do things in a totally different way than I have but our system in general is very simple to use and we offer support as much as possible in order to help people to get it better. We do installations and trainings for larger facilities and just really try to help people to have a good experience with our system and see the value in it that we do.

Matthew: Can a home grow benefit from the level of automation that SmartBee provides?

Skye: Yeah I think so. If you think of a home grow you maybe have four lights in a bedroom or in a garage and you’re trying to grow your own medicine but it’s not a profit center for you it’s medicine for you and so you have a day job most likely. Wouldn’t it be nice to know what’s going on at your facility or at your house when you’re not there? It’s the same reason why a nest thermostat is so good for people. It allows them to turn on their AC before they get home and just have remote access to something that means something to them to their comfort level, to their ability to manage decisions so I see it being valuable even for a four lighter, a two lighter. It’s cost effective considering what it gives you.

Matthew: In terms of the cost for an installation I know it’s going to vary wildly depending on the size of the grow and the level of granular detail that’s needed and so forth but is there any ideas you can give us in terms of cost for maybe a certain size of grow to get up and going with SmartBee?

Skye: So if you have a four light grow facility you’re probably going to be somewhere in the 2 to 3,000 range with all the bells and whistles and if you’re in a 150 light facility you maybe you spend somewhere around 15 to 20,000 dollars but it’s all dependent on the level and granularity of the sensor data that you want to get. So you can start small and just add additional sensors and add as you grow so as you’re phase building in you can buy different products that you need and outfit the different spaces as they come online. For larger facilities we do full installation and training services and that typically is around 1,000 dollars a day and we can fly out and go through all of the systems, setting it all up, doing all the networking side of things. So that’s kind of where we go.

But for the home guy usually over the phone with the customer support that’s offered; the basic customer support that’s offered for the first 90 days with phone calling in we can help get a customer set up using the system. As far as the remote access side it’s usually less than an hour and the only reason that fee is charged is because we’re supporting other people’s hardware that isn’t our own configuring other people’s routers isn’t necessarily the business we’re in but we wanted to make it available for people who may not have another resource for it and we wanted to be trusted to help them do it right so that’s kind of why we wanted to offer that service. For the small guy usually we can handle it over the phone and for the big guy we’re more than happy to fly out or drive to you and offer you more integrated service.

Matthew: Skye I like to ask guests a few personal development questions to give listeners a sense of who you are personally. With that is there a book that has had a big impact on your life or your way of thinking that has maybe changed your lens of how the world works or has benefited you in some big way that you’d like to share?

Skye: There’s no one book that’s helped. I think it’s just a matter of a lot of trial and error and a lot of just working and finding solutions and through finding solutions some are good at solutions and some are bad and you try to learn from mistakes and always be improving and learning more. There’s so many good books and so much information and you just have to go out there and find it and make it your mission to find more information about each different topic and try to become very educated on the different things that mean something to you in your life.

Matthew: How about is there a tool web based or otherwise and other than SmartBee that you consider indispensible to your day to day productivity?

Skye: I really like the sharing that happens on Instagram. You get a snapshot into everybody’s; all these different ideas and it just is a platform that I find helps people to grow and come together and share ideas in a non confrontational type of way. So I find that pretty valuable starting conversations with other growers. There’s nothing more I like to talk about than growing and it seems that that’s a chosen platform for people to communicate and talk about things that matter to them.

Matthew: Last personal development question. I get emails every day from people that want to get into the cannabis industry and they’re not sure how to do it but they have skills from other domains and so forth. What do you think are some of the most important skills are to develop to get into the cannabis industry?

Skye: Well there are jobs for all types of people and if you have a skill set that maybe was applicable in one industry and you want to try to apply that to the cannabis industry I think that would be one of the best ways to get in is use what you know. If you want to be a grower you need to start growing. If you’re an organizational type and you want to do building brands or planning events or any of those things are all very useful in this industry because that’s what people are doing. They’re trying to build brands. They’re trying to educate other people on their products and why they’re better than the next guy. There’s so many different areas that they could go into. It’s really just a matter of meeting people and finding where they fit in.

I know that we’re looking for software engineers and we’re looking for people who see the value in our products. Some of our sales guys have told me oh we’ve worked other sales jobs before but we’ve never believed in a product like we believe in this one and so there’s always an opportunity where you least expect it. You just have to go out there and find it.

Matthew: Is SmartBee looking for more investors still at this point?

Skye: I think we have the intention to get some investment into a second round some in the beginning, first quarter of next year.

Matthew: Okay.

Skye: But we’re entertaining different things.

Matthew: If there’s any investors listening that would want to find out more about that is there any way you should direct them or is it too early?

Skye: Yeah they could reach out to our CFO who is rickm@smartbeecontrollers.com.

Matthew: Okay. Skye as we close can you tell us where listeners can learn more about SmartBee Controllers including any social media as well as your website?

Skye: Yeah we are putting out a bunch of new Instagram posts regarding tips and best practices for creating efficiencies in your garden. So we also show and share experiences from some of the other users of our systems because really what it comes down to is it may work well for me but how does it work for this guy or this guy and seeing how it’s applicable to everybody can really I think generate a lot of benefit to see how other people use the same product right. So I would say check Instagram. Check our website. We’re going to be launching a new website shortly that will probably have a lot more information on it and you can always give us a call. Our phone number is on the website and if anybody calls and asks us any questions we’re more than happy to answer their questions and try to give them information about it. So our phone number is 888-936-9277 and you can ask for Skye or you can talk to any one of our knowledgeable sales reps.

Matthew: And can you give your website one more time?

Skye: It’s www.smartbeecontrollers.com.

Matthew: Great. Skye thanks so much for coming on CannaInsider today and educating us. We really appreciate it.

Skye: Thank you for having me. I really enjoyed it.

Matthew: Matthew: If you enjoyed the show today, please consider leaving us a review on iTunes, Stitcher or whatever app you might be using to listen to the show. Every five star review helps us to bring the best guests to you. Learn more at www(dot)cannainsider(dot)com/itunes. What are the five disruptive trends that will impact the cannabis industry in the next five years? Find out with your free report at www(dot)cannainsider(dot)com/trends. Have a suggestion for an awesome guest on www(dot)cannainsider(dot)com, simply send us an email at feedback(at)cannainsider.com. We would love to hear from you.

Please do not take any information from CannaInsider or its guests as medical advice. Contact your licensed physician before taking cannabis or using it for medical treatments. Lastly the host or guests on CannaInsider may or may not invest in the companies or entrepreneurs profiled on the show. Please consult your licensed financial advisor before making any investment decisions. Final disclosure to see if you’re still paying attention. This little whistle jingle you’re listening to will get stuck in your head for the rest of the day. Thanks for listening and look for another CannaInsider episode soon. Take care. Bye-bye.


Skye Hanke is the co-founder and chief product officer at Smart Bee Controllers.

Smart Bee is creating the cutting edge in automation and cannabis grow management technology solutions.

Smart Bee is offering a 10% discount on it’s grow room solutions.
Use coupon code ===> Cannainsider
at checkout for 10% off.

Learn more at: http://www.smartbeecontrollers.com/

Key Takeaways:
[3:04] – Skye talks about his background and how he got into the cannabis space
[4:35] – What should cultivators and business owners be thinking about in a grow
[10:49] – Skye walks through the make up of the SmartBee Controllers
[15:44] – Skye describes the dashboard of the SmartBee Controllers
[18:01] – Feedback from existing customers using SmartBee Controllers
[24:14] – Skye talks about the need for a generator as backup
[27:13] – How are SmartBee Controllers different from other sensors
[28:44] – Do investors require SmartBee before investing
[31:21] – Skye explains Vapor Pressure Deficit
[34:56] – Skye explains Root Zone Temperature
[36:34] – What is EC
[38:24] – How easy is SmartBee to implement
[40:14] – Skye talks about using SmartBee in home grows
[41:36] – Costs for setting up with SmartBee
[44:17] – Skye’s book and web tool recommendation
[46:24] – Skills to develop to get into the cannabis industry
[48:24] – Contact info for investors wanting to invest in SmartBee
[48:42] – Contact info for SmartBee Controllers

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The Five Disruptive Trends Shaping The Cannabis Industry Now

These Cannabis Products Help Women Deal with Menstrual Discomfort

maya whoopi goldberg cannabis products

Read Full Transcript

Matthew: Hi. I’m Matthew Kind. Every Monday look for a fresh new episode where I will take you behind the scenes and interview the insiders that are shaping the rapidly evolving cannabis industry. Learn more at www(dot)cannainsider(dot)com. That’s www(dot)cannainsider(dot)com. We’ve talked about CBD or cannabidiol on the show many times. Just to review thought, CBD is a non-psychoactive compound from the cannabis or hemp plant that has many benefits. Now our friends at Treatables have put together a one list chew that can help your dog or cat become more calm and balanced. Valerie wrote in to tell us about her experience with Treatables.

Valerie writes, “My ten year old Husky/Sheppard/Lab mix Chuck is my faithful companion. Chuck got significantly quantifiably better from using Treatables. It took about three days of feeding Chuck two to three doses a day to see the full effect, but he did get noticeably more comfortable on the first day of feeding that to him. Before CBD Chuck limped and couldn’t enjoy longer walks though he clearly had the desire for them. Once he started taking them he could leap around again.” Thanks for writing in Valerie. Treatable Chews are legal and available in all 50 states right now. If you want to learn about what Treatables can do for your pet, visit www(dot)cannainsider(dot)com/pet and get a coupon code for 10% off your order. Once again that url is www(dot)cannainsider(dot)com/pet now here’s your program.

Resourceful and pioneering entrepreneurs continue to find new ways to integrate cannabis into products that improve our lives. Maya Elisabeth has partnered with actress and comedian Whoopi Goldberg to bring cannabis products to market that can help women experience relief from menstrual discomfort. I am pleased to welcome Maya Elisabeth to the show today. Maya welcome to CannaInsider.

Maya: Thank you so much for having me.

Matthew: Maya give listeners a sense of geography. Where are you in the world today?

Maya: We are in Northern California, the Bay area to be exact.

Matthew: Okay. Before we dive into all the things that you’re doing and these cool products you have and are making for women, give us a little background about yourself and how you got into this business?

Maya: Absolutely. Cannabis is my life. It’s my true passion and I enjoy making medicine for people. I was a bud tender at one point. Served thousands of patients and learned so much about cannabis and started my own company and it’s been the most fruitful, fulfilling, beautiful path since. Nothing in the world gives me more gratification than creating small opportunities of self-care and relief for medical cannabis patients.

Matthew: And how did you and Whoopi Goldberg get connected?

Maya: Well it’s actually an interesting story. My company is called Om Edibles and we’re an all-female collective and we like to compete in the High Times Cups. So because of a series of victories when Whoopi reached out to a man by the name of Rick Cusick. He started looking over his resources and our name was mentioned. He gave me a cold call and asked if I would be the woman to talk to about this and I said absolutely and we went from there.

Matthew: Wow and what’s the focus on menstrual relief? How did you come up with that?

Maya: It was actually Whoopi’s idea, 51 percent of the population are women and if I were to ask you how often you’re sick and you told me one week out of every month you were having feelings of discomfort and pain. I would say you should go to the doctor. So as it turns out its crazy but the average western woman menstruates for approximately eight years cumulatively of her life.

Matthew: Wow.

Maya: Yeah. It’s something we don’t really talk about and it’s something that we don’t really even think about and there’s a lot of ways for women to find relief. So the intention of this company is just to provide tools for women to have relief that make you feel good during your moon cycle.

Matthew: Can you walk us through your product line so we get to know it a little better?

Maya: Absolutely. It’s everything that a woman wants on her cycle. It’s a bath, a rub, some medicine tincture, and chocolate. These are all super foods. Two of our four products are multi-herb. We work with an in house herbalist by the name of Alexis for two of our four products and the other two are medical cannabis products. All of them have cannabis in them. So it’s an Epsom salt soak that comes in three different flavors. It’s a tincture that’s multi-herb and has many herbs that have been helping women find health for thousands of years. Some of them are even named what their named because of that and it’s two types of raw chocolate. Raw cacao is a super food. It’s the highest magnesium containing food on the planet. It’s raw organic fair trade, six ingredients you can pronounce, one CBD chocolate and one is a THC chocolate and then it’s a topical; a rub that is multi-herb as well which came from Alexis and it’s to be rubbed all over your belly and your back and anywhere you feel pain really.

Matthew: Is there historical precedent of women throughout history using cannabis at all to help the menstruation cycle or is this a new thing?

Maya: It’s definitely not a new thing. Cannabis has been used for thousands of years for pain relief. One great example is Queen Victoria who Whoopi was inspired by. She took a menstrual tincture with cannabis in it during her time of the month and there have been many, many, many other recordings.

Matthew: Yeah it’s crazy how tinctures really seem to; cannabis is kind of bringing them back but as you explore history they were really popular for a long time and just kind of went by the wayside.

Maya: Absolutely. Tinctures are a great way to medicate. You have two main veins under your tongue. Sublingually enters your body quickly and they’re relatively easy to make and they can be made with either glycerin or alcohol or vinegar. Like an apple cider vinegar.

Matthew: And what symptoms are relieved with your products?

Maya: The beautiful thing about cannabis is it can help you with physical symptoms and physical discomforts and it does and it also helps other things like emotional support, anxiety, depression, sleep. Things that happen to go along with PMS and some women experience more than others and some cycles more than others so it’s really a full picture for relief.

Matthew: I asked a bunch of women before this interview questions like hey what are you interested in in relation to menstruation relief and one of the questions I got a lot was how can it help with my irritability and I was like wow that’s a great point. Does this help with irritability?

Maya: Yeah. Cannabis is wonderful for mood support. CBD is a miracle for anxiety and depression and also inflammation and other physical things and it doesn’t get you high. It’s not psychoactive. THC is a very nice mood elevator and they can help you deal with your stresses of PMS.

Matthew: Do you know how much food people eat impacts their menstruation pain or women’s menstruation pain if they’re a vegetarian or they’re heavy meat eaters? Do you hear anecdotally anything like that?

Maya: Yeah and I know from my own experience. Women that exercise and get enough magnesium in their diet which is typically done by eating a natural rainbow on every plate or taking supplements or taking Epsom salt soaks tend to have much better menstrual cycles. Magnesium is really important for overall human health and women’s health especially and cacao is the highest magnesium containing food on the planet. Herbs are here to support us. In our tincture we have a lot of uterine toners and things that can help your next cycle actually be better and I think it’s kind of a myth about the meat thing.

Matthew: Okay.

Maya: Because you can get iron in a lot of different ways. Broccoli has I think more protein than meat I read recently and so just through the right diet and through the right lifestyle and improving your overall health your menstrual cycle can improve as well.

Matthew: I eat these little shards of cacao beans; raw cacao beans and I like them a lot but they’re just a little bit bitter so I add goji berries to them and that really; there’s something about that combination that’s really something else and there’s like a cousin of caffeine I think in cacao. Theobromine I think it might be called and there’s a little kick there like something happens.

Maya: Absolutely. That is a winning combination. You’re speaking my language. I love to do goji berry with cacao nibs. We sweeten ours with a raw organic Agatha which it comes from a cactus so it’s a much healthier sugar. It’s lower on the glycemic index and better for your overall health.

Matthew: Yeah.

Maya: Yeah the Aztec’s revered cacao as the food of the gods. In fact cacao does mean gift from the gods and it’s one of the oldest words ever recorded and if you were being sacrificed and you were just a normal person in the Aztec times you would have the cacao drink which was bitter and unsweetened one day of your life, the day before you were offered to the gods. Yeah early voyagers wrote of it that never had they found such a sustaining food where you ate or drank such a small amount and felt sustained for so long and to me that’s kind of the definition of a super food. Something that is really nutrient dense as opposed to the latter which a lot of people are dealing with with obesity which are these huge servings of nutritionally void foods.

Matthew: Yes that also spike your glycemic index and force your pancreas to secrete all this insulin and the fast storage hormone and then we wonder why everybody is fat.

Maya: Exactly and the toxins and the chemicals.

Matthew: Yeah.

Maya: A great filter to run it through is like did this come from the earth or did this come from a science lab.

Matthew: Right, right. Now onset of cannabis is a very difficult thing to measure. People are slow metabolizers, fast metabolizers but is there a general theme you can give to people listening on how fast some of these products help with menstruation?

Maya: Absolutely. I love this question because this is the ongoing discussion. Cannabis is really personal. Everybody has different receptors all over their body. Each one is like a key hole and each strain develops with its environment and then through the botany of desire and our breeding and stuff human influence you end up with different cannabinoid profiles. So cannabis is really personal. What works for one person might not work for another and what works for one person for a long time might shift too. Patients’ needs shift. So that being said topicals are not psychoactive however I do believe the baths kind of deserve a category of their own. They don’t get your mind high but they relax your body so much we don’t recommend driving afterwards nor will you want to.

So my recommendation for patients is I really don’t say how many milligrams anyone should consume but more encourage through education and for people to start with a very small amount and work their way up and always wait a few hours because there’s so many variables involved. Even what you may have had for lunch. So knowing that cannabis is fat soluble did you just have a juicy burger or are you doing this on an empty stomach? All these variables can make a difference especially the company that you’re with in my perspective. I think that’s one of the biggest variables is what’s your mood and how are you feeling and what’s your intention? Yeah so the cacao is available in CBD and THC. Many patients are perfect candidates just for topicals or CBD. Not every person who wants to use medical cannabis has to feel high. That’s something I love teaching people too.

Matthew: And I’m sure you get feedback on all your products but is there one of the products that you get the most passionate feedback about where people are kind of saying the same thing?

Maya: I am blown away and I’m not just making this up because it’s my line but we get the most overwhelmingly positive for all of our products truly and really. The cacao is like through the roof with positivity. That CBD cacao has helped people with so many different muscular disabilities and all types of serious ailments. The tincture blew my mind when not one, not two, but five and six independent testimonials without me asking for them came back and said that women’s next cycle was actually improved. So we’re moving from acute symptoms to now an overall lifestyle enhancer because of some of the herbs in there. The salts we’ve always gotten the best feedback for. Those are great for sleep and pain and dermatological issues. The magnesium goes inside your uterus and relaxes your muscles which are contracting because you’re shedding your uterine lining and that’s what a cramp is and the salve is filled with herbs. It has white willow bark which is something very similar to aspirin and other healing herbs and the efficacy of it is also mind blowing. We’ve gotten overwhelmingly positive response for everything.

Matthew: What advice do you give to customers that are trying to find their intake topical like your product rub and maybe an ingestible where they are trying to maybe create some sort of hybrid experience because a topical and an ingestible are two different things? Do people use those in tandem to help with menstruation relief?

Maya: This is a great question too. Our line was specifically designed for versatility and freedom. You can mix and match any different product for any different time. Our tincture is actually made with an organic overproof alcohol so you can actually make an adult bevy out of it. We do one called the blood orange with an orange squirt and rosemary and a Pellegrino. It’s delicious. It really calms you down. You can do that while you’re in the bath. When you get out you can rub the salve. The CBD cacao is wonderful any time of the day. The THC one is a psychoactive so you can mix and match and put one scoop of one in a cup of cacao and one scoop of another if you’re just feeling like a light serving. It’s not intended to replace whatever women normally do for relief. It’s really just compatible. It’s a lifestyle enhancer and it’s all about versatility and choices.

Matthew: For a topical like rub; obviously you don’t ingest. How does that interact with the receptors on your skin specifically?

Maya: Another great question. You have CB1 and CB2 receptors all over your skin epidermis and we all know the skin is the largest organ. People put hormones on their wrists and rub them together and raise their hormones levels so never underestimate the power of a topical. It’s really getting in there. Those CB1 and CB2 receptors in your skin epidermis are right next to all your nerve endings and that’s one of the reasons why it’s so effective for pain. We also have a philosophy in our company that if you can’t pronounce it don’t put it in your mouth and if you can’t eat it don’t put it on your skin. So you could eat the balm if you wanted to. We don’t recommend it because it won’t taste good but it would be safe. Everything besides jojoba oil and patchouli you can pronounce in our line. Maybe cacao some people stutter on too but you won’t find any ten syllable chemicals in anything that we create.

Matthew: You have an herbalist that you work with that helps you with your recipes. What’s it like working with her and how has that impacted your products?

Maya: Well it’s actually enhanced our products tremendously. A woman by the name of Alexis Gandara and she has a company called Rooted Grounds and she was already making a moon line and we were actually friends for a long time. As soon as I got the phone call I called her and said shoot the moon it’s time to put our medicines together and her and I started formulating from there on out. Looking at cannabis for what it is which is a healing herb and super food we found that when you pair it with other healing herbs and super foods the healing properties and benefits and efficacy is greatly increased.

Matthew: Now being an herbalist she probably has a lot of other interesting things like she approaches wellness and sickness in a different way, different mindset entirely. Is there any other kind of interesting things she does or how she approaches life or sickness and wellness that you could share that maybe the general population doesn’t know about or think about?

Maya: Yeah.

Matthew: We’re kind of trained to think about pills like hey it’s like a drug.

Maya: Totally. She’s very, very, very talented at what she does. She communicates with the plant. She listens to the plants. She’s very knowledgeable and I think we both share the same philosophy that all the cures that we need for our ailments and health are really here growing on the earth and they’re here for us and all we have to do is learn about them and learn how to use them really.

Matthew: Yeah. It’s kind of a reawakening art form. I mean probably like the Salem witch trials was the bottom for herbalists when they’re pretty much witches and so that was kind of cast out from our society but it seems like it’s making a comeback.

Maya: Absolutely.

Matthew: So let’s pivot to some personal development questions to let the audience know you a little bit better. As you look over your life is there a book that really stands out as having a large impact on your thinking or how you view the world?

Maya: I love this question as well. I love the book “The Alchemist.” Have you ever read it?

Matthew: I have heard of this book but I’ve not read it.

Maya: It’s a short read and it’s amazing. It’s just about reading the signs of the universe and good omens and how to pay attention and following your heart and just the world is really working in your favor when you go for a dream. It’s a beautiful, beautiful story full of archetypes and zymology and lots of wisdom. Another one has in my opinion kind of a funny name but it’s called “Conversations With God” and it’s not a religious book but it’s about a man who is channeling some type of higher wisdom and the whole book is question and answer and it is filled with the most profound information on a spiritual level. It has just brought me so much good.

Matthew: Wow. Great suggestion. Is there a tool web based or otherwise that you consider indispensable to your day to day productivity?

Maya: Google.

Matthew: Google. Okay me too. I use the Google Drive a lot now too. All the spreadsheets and docs on there. It’s like my go to. In fact I’m frustrated when I have to use Excel or something now because it always crashes.

Maya: Yes. I love Google. I’m self-taught. Everything that I’ve learned I’ve typed into Google and just done research on and I always encourage people to do the same. I notice that everyone wants the new Iphone but they’re not necessarily open to new information about cannabis coming in and really that reframe and showing people a new way to look at things because if cannabis was discovered today we would be revering it as a very important medicine that was some type of cure all.

Matthew: Yeah that’s true. It’s true. We have to break through the old stigma unfortunately.

Maya: Yeah and let the new information in.

Matthew: Where can people get your products or is it only available in California right now or is it nationwide in the medical states? Where can we find it?

Maya: Right now we’re only in California as we are a medical cannabis company. So it’s federally illegal to cross the state line with medical cannabis. We do have a full list of dispensaries on our website if you go to www.whoopiandmaya.com and just click the link to see our outlets. You can see every dispensary that carries us.

Matthew: Okay. Well Maya in closing is there anything else you’d like to share or how we can follow you?

Maya: I just wanted to say thank you so much for the time and thank you to all the listeners for listening and we’re on Facebook and Instagram and we have a website so if you want to see what we’re up to make sure you check it out.

Matthew: Okay. Well thanks so much for joining us on the show today. We really appreciate it.

Maya: Thank you Matt. I really appreciate it.

Matthew: If you enjoyed the show today, please consider leaving us a review on iTunes, Stitcher or whatever app you might be using to listen to the show. Every five star review helps us to bring the best guests to you. Learn more at www(dot)cannainsider(dot)com/itunes. What are the five disruptive trends that will impact the cannabis industry in the next five years? Find out with your free report at www(dot)cannainsider(dot)com/trends. Have a suggestion for an awesome guest on www(dot)cannainsider(dot)com, simply send us an email at feedback(at)cannainsider.com. We would love to hear from you.

Please do not take any information from CannaInsider or its guests as medical advice. Contact your licensed physician before taking cannabis or using it for medical treatments. Lastly the host or guests on CannaInsider may or may not invest in the companies or entrepreneurs profiled on the show. Please consult your licensed financial advisor before making any investment decisions. Final disclosure to see if you’re still paying attention. This little whistle jingle you’re listening to will get stuck in your head for the rest of the day. Thanks for listening and look for another CannaInsider episode soon. Take care. Bye-bye.


Maya Elisabeth discusses how she created a line of cannabis products to help women that are dealing with menstrual discomfort. Maya shares how she partnered with famed comedian and actress Whoopi Goldberg to make these products a reality.

Key Takeaways:
[2:11] – Maya’s background and how she got into the cannabis industry
[2:46] – Maya talks about how she connected with Whoopi Goldberg
[3:22] – Using cannabis for menstrual relief
[4:12] – A walkthrough of Maya’s product line
[5:29] – Is the use of cannabis new for menstrual relief
[6:25] – Maya talks about what symptom relief her products provide
[7:47] – Do certain types of food cause menstrual pain
[9:05] – Maya talks about using cacao and goji nibs
[10:51] – Maya talks about how quickly the products start to give women relief
[12:43] – Maya talks about which product gets the best feedback
[14:14] – Using topicals and edibles in tandem
[15:21] – How do topicals interact with the receptors on your skin
[16:23] – Maya talks about working with an herbalist
[18:21] – Maya’s book and web application recommendations
[20:23] – Maya’s contact information

Learn more at:
http://whoopiandmaya.com/

Important Update:
What are the five trends that will disrupt the cannabis market in the next five years?Find out with your free guide at: http://www.cannainsider.com/trends

Join CannaInsider For FREE & Receive
The Five Disruptive Trends Shaping The Cannabis Industry Now

Savvy Entrepreneur Helps Customers Hide Their Stash in Style

stashlogix coupon code

Read Full Transcript

Matthew: Hi. I’m Matthew Kind. Every Monday look for a fresh new episode where I will take you behind the scenes and interview the insiders that are shaping the rapidly evolving cannabis industry. Learn more at www(dot)cannainsider(dot)com. That’s www(dot)cannainsider(dot)com. We’ve talked about CBD or cannabidiol on the show many times. Just to review thought, CBD is a non-psychoactive compound from the cannabis or hemp plant that has many benefits. Now our friends at Treatables have put together a one list chew that can help your dog or cat become more calm and balanced. Valerie wrote in to tell us about her experience with Treatables.

Valerie writes, “My ten year old Husky/Sheppard/Lab mix Chuck is my faithful companion. Chuck got significantly quantifiably better from using Treatables. It took about three days of feeding Chuck two to three doses a day to see the full effect, but he did get noticeably more comfortable on the first day of feeding that to him. Before CBD Chuck limped and couldn’t enjoy longer walks though he clearly had the desire for them. Once he started taking them he could leap around again.” Thanks for writing in Valerie. Treatable Chews are legal and available in all 50 states right now. If you want to learn about what Treatables can do for your pet, visit www(dot)cannainsider(dot)com/pet and get a coupon code for 10% off your order. Once again that url is www(dot)cannainsider(dot)com/pet now here’s your program.

Matthew: When new markets emerge it’s often the merchants that make the picks and shovels for the new industries customers that end up doing the best. Today we’re going to talk with one of the entrepreneurs who is not focused on the cannabis trade itself but instead focused on helping cannabis enthusiasts keep their cannabis secure and organized in a fashionable way. I’m pleased to welcome Skip Stone, co-founder and CEO of Stash Logix to the show today. Welcome to CannaInsider Skip.

Skip: Thanks Matt. Glad to be here.

Matthew: Skip give us a sense of geography. Can you tell us where you are in the world today?

Skip: Sure. I’m in Boulder, Colorado about thirty miles north of Denver.

Matthew: Great and I am in Athens, Georgia today. Skip what is Stash Logix? Give us a high level overview.

Skip: Stash Logix makes stash bags that fit into any cannabis lifestyle. Many people call it their go to cannabis storage bag.

Matthew: Okay and just to be clear there’s a lot of stash bags out there that are kind of disposable like you get from a dispensary. This is totally different.

Skip: It is. This is more like a camera bag, more like a high end camera bag with adjustable padded dividers. I like to use the analogy of a padded lunchbox. We kind of have sizes ranging from like a sunglass case size up to a large lunchbox.

Matthew: Okay. I want to get into more details and nuances about the bags themselves but before we do can you tell us a little bit about how you got into the industry because so many people email me every day asking how I can get into the industry? How do I do it? How do I do it? And you made a career transition. You had a successful career in a different industry entirely and just dropped everything and got into this industry. Can you tell us a little bit about how you got off the fence and jumped into this industry?

Skip: Sure. Yeah that’s right. I was an engineer for twenty years. For the last fifteen years was VP of Sales Engineering for a company and had this storage bag epiphany and just started taking baby steps to move it forward and as part of that process a friend of mine that I had met that was in the industry mentioned listening to Canna Insider and so around September 2014 I started listening to them and as a sales engineer I had a lot of wind chill time so I got to listen to all of them and some of them multiple times but one of the real takeaways that I got from your podcast was that this industry wasn’t even on the ground level yet. It was really like in the basement or maybe even more like the bottom level of a parking garage. So I think that something that you and a lot of your guests kind of reiterated is that now is the time to make a move, to carve out a name for yourself.

It would be several years before any big players would take a risk to get into the game so if you wanted in now is the time and that really resonated for me. So some of the podcasts that really were influential or really I remember a lot were Steve DeAngelo, Leslie Bockster? Bock?

Matthew: Bocskor yeah. I like Bockster though that’s pretty cool. Maybe you can change it to that. Like a Porsche Boxster.

Skip: Yeah. Cheryl Shuman, Ean Seeb, Representative David Simmons. A lot of really great podcasts.

Matthew: Wow.

Skip: And it really helped me feel like I did my research before taking the risk. I think I kept hearing that this was a new frontier much like the .com era was in 2000 or earlier.

Matthew: Yeah. Well gosh that’s very flattering. Thanks for mentioning those episodes and I’m glad that Canna Insider has had an impact on you. I know early on when you were developing these bags we met for a beer in Boulder and you were showing me these bags and ironically that very day or within 24 hours I was searching online for something similar and I was like this is just bizarre that I got an email out of the blue from a listener that says I’m making bags like these and we kind of tossed it around a little bit but I think one thing it’s really helpful for listeners to understand is that there’s not; you don’t go into this without fear because a lot of times we look at entrepreneurs from the outside and we say well they have something I don’t have.

He’s got something I don’t have. He’s got this courage. I say I’m 51 percent courage and the rest is fear. You don’t need to be all courage to take that step out and wonder what’s going to happen. Did you have some fear, reservations, or kind of nagging thoughts like am I doing the right thing before you just did it anyway?

Skip: Yeah. I think myself and maybe others probably thought I was going through a midlife crisis. I don’t know if that’s really true but it definitely could have been but I just kept having this nagging thought in my mind but what if this worked. You get one shot at life. This just seemed like such a fun industry to be a part of and I just couldn’t let go of that. What if it worked? The risk was high. I have a house in Boulder, two young kids, and my wife’s a teacher. It’s not an easy balance to make but I think my wife was amazing and she was also probably blissfully ignorant about what is involved in getting something like this off the ground as I was as well.

Matthew: Yeah.

Skip: It was a very challenging; it’s been a very challenging last year and a half or longer but you’re right. When I met with you I just made some prototypes. As I kept making these baby steps to see where this might go one of the natural progressions was to talk to you and at that time you mentioned maybe I should apply to Canopy Boulder. So I did and I got accepted after only ten companies are accepted out of 120 applicants and to me this was the vote of confidence I needed to really take that plunge. Boulder is known to be a great startup town so that was one advantage I had over maybe others in different locations but joining an accelerator is a pretty common way to launch a business. So getting accepted gave me that vote of confidence I needed.

Matthew: And for listeners that aren’t familiar with what CanopyBoulder is it’s a seed stage accelerator for the cannabis industry and if you look up interviews with Patrick Rea and Micah Tapman you can get all the details on what that is exactly. So back to you Skip. So when you make this transition into the cannabis industry start/Stash Logix what’s the reaction from your current employer and also from extended friends and family because you mentioned your wife was supportive but what about the rest? I mean do you get kind of like chuckles at Thanksgiving? Pothead Skip he’s joining the cannabis circus or anything like that?

Skip: Yeah I had a lot of friends that were trying to talk me down. Some high school friends were calling other high school friends of mine saying trying to talk some sense into me. So that was pretty entertaining. Typically most of those friends were supportive and told me to go for it. So still it definitely gave me some pause before I made the decision. As far as my parents and relatives and my parents have more of a reefer madness view of cannabis so I didn’t tell them that I got into the industry until I was in Canopy Boulder for a couple months. That was not easy to avoid but they’ve come around but I still try not to bring it up at Thanksgiving dinners, but they’re coming around. They ask about the business. They just try and not ask specific questions about the industry.

Matthew: So when you jumped in with both feet and burned the bridge behind you to an extent did you feel like the universe came into support you in some way. You mentioned Canopy. Getting into that accelerator. Was there any other industry connections or things that happened that kind of you were like wow this is the type of thing I was hoping would happen once I jumped in with both feet.

Skip: Yeah Canopy Boulder was really a great decision. This was the first of its kind accelerator for cannabis. So we had a lot of support, we had a lot of PR, and everybody was in the same position. Everybody had just dropped whatever it was that they were doing. Some of them were Harvard business professionals and some were really established in their careers and I think everybody had that nervous energy of what was going on and how were they going to be a part of this and it created great strong bonds and friendships. So immediately I had nine other companies all with the same sorts, reservations, and excitement and feelings and that was extremely helpful getting into a new business and a brand new industry. Every time I went to a tradeshow or a meet up I knew people and that’s a really great position to be in instead of being out on your own trying to fend for yourself.

So I think the industry in general was so new that there really are no good old boy networks. The barrier to entry just really didn’t exist and it wasn’t just Canopy but everybody I met in in the industry was very supportive and very helpful and eager to help.

Matthew: Yeah I’ve found the same to be true. Let’s dig into the Stash Logix bags a little bit. Can you paint a picture for the audience in terms of we talked about a camera bag but in terms of size, functionality, features, and benefits of the bags themselves?

Skip: Sure. That’s a pretty common question. Our tag line is thoughtful, secure, and discrete. So the secure part refers to we have a built in combination lock. It locks the zippers of the bag up so unwanted prying eyes can’t get into your bag. The thoughtful part refers to the functionality of the bag and the accessories we included. I wanted to reimagine what a cannabis storage bag could be. For instance the tube jars that cannabis flower was sold in met regulatory standards but practically speaking they were obviously not made for a good customer experience. They were narrow, they were deep, they were opaque. You couldn’t see what you had and you couldn’t take care of the product very well. So I thought we needed wide mouth jars that were designed to handle the fragile buds and to be clear jars so that you could quickly inventory your stash.

I also wanted a way to label it clearly. So I made the jar so you have dry erase lids and all the options were really pretty mind boggling. How do you remember all these different strains and products? There is Blue Dream, Alpha Blue, Blueberry, and how do you keep track of it all?

Matthew: Yeah.

Skip: So we made a journal to track these strains that’s also part of the thoughtful part of the bag and then the final part of our tagline is discrete and that part refers to not having pot leafs on the outside, not having rasta colors, and taking it one step further I didn’t even want the name of our company on the outside of the bag because I didn’t want my kids as they got older or the man to be able to Google and know exactly what’s inside our bag.

Matthew: Good thought yeah.

Skip: And then the final aspect of the discrete tagline was the odor. If you smelled like a skunk it was kind of a dead giveaway. So we made these odor packets that will absorb the odors. I guess there was one more aspect to the discrete part. We also include a charging port so you can power a vaporizer while it’s plugged in but it’s locked. Nobody knows what’s in there and if you got a hotel maid or visiting in-laws they can’t be snoopy and try and figure out what you’re doing.

Matthew: Right, right. Well you do a great job of making the bags look unique. So when you see it right away you say hey this is kind of cool. I haven’t seen this before but you don’t get the sense there’s cannabis inside. When you’re going through the design process what’s it like? I mean are you white boarding things, are you talking out loud with other people on the team, are you asking perspective customers? I mean what is the process from starting at zero to arriving at the finished product you hold in your hand?

Skip: Well the bags are designed to be modular and clean. It’s really focused on function more than anything. It just was a lot of challenges for everybody whether you’re a man or woman, old or young, everybody’s got the same challenge of how do you store all these things. So we really built them designed for function. But this year we’re coming out with some new products and a couple of them are going to be women focused bags because I know that different people have different needs and different wants. So we’re trying to tailor similar concepts more specifically geared toward different demographics.
Matthew: One of the hidden benefits or I guess the primary drivers when people are starting to look for these bags is like hey I’m sick of using a huge Zip Lock bag and putting this in my nightstand or something like that because it leads to an awkward moment if some family member or their kids or something find that. Is that one of the primary drivers you’re finding with customers at Stash Logix?

Skip: Yeah I do believe that. Part of the process of going through this and deciding to jump into this was because I discovered the low dose edibles; particularly gummy bears probably some point in 2013 and then I had this idea around January 2014 that the first month that cannabis legalization happened in Colorado which was the first of its situation in the world. So I thought a lot of these edibles having micro dosing and being able to have something predictable and repeatable really offered a lot of value but I also saw the concerns that people would have with storing these items and particularly myself having young kids it made me nervous. I have a lifelong relationship with cannabis and a lot of times when the kids go to bed I’d go out in the garage and smoke a little weed and work on some projects and this was kind of when I had this epiphany and realized that it would be a bad situation if my kids found me and so I decided I can’t be the only one with this tricky situation. So I decided to start moving this concept forward.

Matthew: Just a quick interruption to this interview to let you know that Stash Logix has generously extended a 15% discount on all their bags to Canna Insider listeners. Simply visit www(dot)cannainsider(dot)com/stash to get the coupon code for 15% off. Again that URL is www(dot)cannainsider(dot)/stash. That’s S-t-a-s-h. Now back to your program.

Matthew: How did you get the Stash Logix bags into dispensaries and start building your network of wholesale partners and so forth because that’s kind of tricky chicken and the egg thing is that maybe some of the dispensaries want to see other dispensaries selling the bags before they do or they promise and never get back to you. It’s kind of an uphill battle in many ways. What’s that journey been like trying to get the bags into dispensaries?

Skip: Yeah it’s been a challenging and interesting road map we’ve followed. This is a brand new industry for many reasons. There really were not any distributors selling for medicated products or ancillary products. So we had to kind of forage that territory on our own. Dispensaries have historically been making money on selling weed and head shops were known for ancillary products. But there are no distributors in this space. Mostly the companies are handling sales in house. But we believe that the future of head shops was iffy. We kind of thought that a dispensary would ultimately become a one stop shop.

So with that mind set we started working towards getting it into dispensaries and being in Boulder we had the advantage of getting to see; being the first to market with legal cannabis we got to see some of the differences and many of them operate much like a pharmacy or a doctor’s office where you have the waiting room and you have some magazines to look at but mostly people are just kind of sitting around wondering is my boss going to walk in the room and who am I going to know in here and it’s just not a comfortable situation but most of them weren’t taking advantage of this space but some of them were like the Farm in Boulder and Ajoya in Lewisville which is Boulder county.

They started making a true customer experience with these dispensaries and giving them something better than that; a doctor’s office. So we knew with 600 dispensaries in Colorado we were pretty sure that there was going to be some consolidation and the dispensaries that offered a better customer experience were likely to survive. So we tried focusing on those dispensaries first and both of those two that I mentioned were our first two dispensaries that we got to work with and they allowed us to play around a little bit with what that experience might be and it’s still a really big challenge. Colorado is becoming more mature but it’s still a long ways from where it’s ultimately going to be but places like California are really still too immature for us. We are selling in a handful of places but the primary reaction from the dispensaries was that they didn’t feel like this was a good fit for them and mostly because they’ve been making money on selling medicated products.

Matthew: Right.

Skip: And even though this is considered an exit bag they still didn’t see the value in selling something other than medicated products. So it just and along with that the distributors was such a brand new thing that really the distributors that we found we were either the first or second line that they started carrying and it’s really fun because we’re starting to see them be successful and bring in new lines or products that fall in line kind of with us. Something a bit more sophisticated and something that connects well with the shop. So it’s been really fun. It’s also been really challenging and we still have a long way to go to help the industry mature.

Matthew: Yeah and I think; I mean you mentioned the Farm in Boulder and they are very savvy in understanding they want to be like a solution oriented instead of just product oriented where you come in for cannabis. They have that whole relationship in mind. You’re sitting on comfortable couches in a waiting room and while you’re in this waiting room you can’t by law be looking at the product just yet; the cannabis product. So why not show all the accessories to your customers while they’re sitting there talking and chilling out with their friends. I mean it makes a ton of sense to provide everything instead of just a point product to your thinking about okay how are they going to store this. What other things might my customers want besides just infused products or flower and so forth? So I think as it matures hopefully we’ll see more dispensaries thinking this way.

There’s so much transaction volume going on right now that they don’t have to stop and focus and think like that but I think we’re coming to the point that it’s starting to happen. So when you get; when you talk to a dispensary manager or purchaser or owner and you put it in their hands what’s the general reaction? I mean you mentioned that they’re more interested in selling infused products but what do they say about the bags themselves? What’s the feedback they give you?

Skip: They often love the product. They just assume that their customer is either can’t afford it or won’t see the value in it. So that’s been a challenge but what we do in those situations is we offer consignment and in almost every case those have converted into orders.

Matthew: That’s smart.

Skip: Yeah.

Matthew: Risky some might say but smart.

Skip: Yeah the whole retail side of things is challenging because we’re working often times a lot of counter culture people that don’t come from professional retail backgrounds. So they don’t often know how to merchandise products and they’re all learning just like I am as almost everybody in the industry is learning.

Matthew: Now you mentioned that you try to mute the smell of the cannabis so you don’t get this strong pungent wafting smell from the contents inside the bag. How is that achieved exactly? Can you walk us through that?

Skip: Sure. Well it’s all; we associate that all with the discrete part of our tagline. If you smell like a skunk you’re not being very discrete. So as an environmental engineer I came from treating water and carbon was a tool that many different municipalities and engineers used to handle different impurities and often that was odor. So activated carbon has very microscopic pore space that allows for absorption and in the creation of this activated carbon there’s microscopic tunnels throughout this product and it creates a large surface area in a very small piece. So I knew this so I just started buying the pieces and parts to make these odor absorbent packets. So the first probably thousand of them I made in my garage but we’ve since made some improvements.

And really in a couple weeks we’re going to be launching a much improved odor packet that’s going to have a lot more of the absorption material. They’re also made with this beautiful hemp packet and we feel like they’re going to be a great add on feature. It doesn’t necessarily even need to be in our bag. You could throw that in your sock drawer or your shoebox that you keep your cannabis in and still offer some benefits but the design that we have is that it’s not so that you put that carbon inside your jar with the weed because that would absorb all of the odors and most connoisseurs don’t want that to happen. So really it’s designed to remove the ambient air odors. So it stays in the place you want it and doesn’t escape and give you a way that you’re carrying it around with you, traveling with you, and things like that.

Matthew: Right. So you put it next to a closed jar as opposed to in the jar with the cannabis is what you’re saying?

Skip: Yeah. We just leave it in the bag. There’s a little place for it and it will absorb the odors from a half used joint or a pipe with residue in it and any odors that are escaping we’ll try and contain that.

Matthew: Now you mentioned launching products that are more geared toward women. How do you balance the bags esthetic to the different genders? Would you say they’re kind of unisex now? Do you find that more women are buying the bags so you’re maybe pivoting more to women or what are the thoughts around that?

Skip: I do think that they’re fairly unisex as they are now. We make one out of hemp and one out of black cordero. I think that catches a pretty good range but we definitely want to come out with more colors and patterns but we also see a need for many different sizes both smaller and larger. So I think we’re going to instead of focusing on new colors we’re going to try new products that we feel would resonate with people. So women typically like to be organized and like to have different bags for different purposes so we see that as a next good step to take.

Matthew: Now I notice that sometimes men will use products designed for women but women won’t use products designed for me. I don’t know what that says but it does seem to be true. Like hey if this is good enough that a woman would use it it’s okay for caveman Matt. Do you find that to be true at all?

Skip: Yeah. We originally thought and I’m not totally sure if I can comment completely on that without offending anybody or without even talking intelligently about that but we are a bit surprised about who our demographics are. We assumed that it would be much like me; parents that were trying to keep their products safe from their kids but we actually seem to be finding millennials and younger people being attracted to the bags more and I suspect it’s for traveling and just trying to have some level of protection to keep them out of trouble but we really seem to be spanning the whole demographic range. We have lots of fans of all ages and genders. So I haven’t really put a lot of study into it.

Matthew: Now in terms of working with manufacturing partners what’s that like? I mean is hard to negotiate, is it hard to get the level of quality you want, is there a lot more back and forth than you originally anticipated? What are kind of the challenges and opportunities there?

Skip: Well I think the way we’ve approached this is just having a really solid protocol. We never order anything in bulk without having samples and we learned that the hard way a couple times but they were not very costly mistakes but that helped us accept this protocol for moving forward and that rule now applies from large changes of bag dimensions and new features down to minor changes like the hang tag string. So we want to get the exact sample of what they're going to use no matter what scale of a change we’re making, but soon we’re going to be bringing out three new products in two different Colorado facilities and that’s going to really help because we can make smaller batches. We will have an agile manufacturing process. So we can sit down with the head seller and quickly prototype and quickly get a new product to manufacturing.

So we’ve got several different manufacturers we’re working with; with all sorts of pieces and parts and it’s been an interesting process. So far we’ve managed to steer clear of any major catastrophes but it’s always a concern. You just have to be diligently making sure people are doing what they said they would.

Matthew: That’s interesting. There’s I think more manufacturing returning to the United States. It’s kind of happening in a trickle but with the advent of 3D printing and the exact type of thing you’re talking about where you want to have more control and faster iteration. I think that’s starting to happen which is exciting. Maybe reversing some of the negative effects of globalization off shoring. We’re getting more on shoring and that would be exciting to see how much it would contribute to jobs and GDP in this country. So I’m glad to hear that. You talked a little bit about the road map for other storage bags. Are you thinking just in terms of the next six to twelve months or is there a revision three to five years out or is that just too far to plan for?

Skip: We’re just hoping to be around still then. We have five new products. We think they’re great. Some of them we think are a game changer so we’re really excited to unveil these new products. We’re bringing these to Champs next week in Denver which is one of the largest tradeshows for head shops and smoke shops. So a lot of big distributors will be there. We’ll be unveiling these and trying to get feedback on what products they feel may be the best to bring out quicker but we’ve got a fanny pack and a messenger bag with two women’s products and a pocket size case. So we’ve got a bunch that are production ready prototypes and we’re just trying to figure out which way to go with which of them.

Matthew: Nice. I love fanny packs. I don’t like to admit that out publicly normally but love them.

Skip: Yeah the baby boomers have done a number on the fanny pack image. So we’re hoping to reverse that. We’re not sure we want to put all our eggs in that basket just in case that fails but I think what we made on the fanny pack is really awesome.

Matthew: I think one way you could start to build excitement around that Skip is maybe if you could get like a sequenced, jeweled fanny pack that you would wear as a CEO to kind of get the message started. Is that something you’d consider?

Skip: It’s an interesting concept, possibly.

Matthew: Let’s not write it off.

Skip: Okay.

Matthew: Let’s just say maybe.

Skip: Yeah.

Matthew: Okay.

Skip: I have been wearing mine around and I’ve been feeling more and more comfortable wearing a fanny pack. I think a fanny pack is a great thing to have but it’s something I haven’t been wearing in a while but I’m really happy to have one and I definitely use it when I go hiking and things like that which is great but wearing it around out to dinner and coffee shops I haven’t completely wrapped my head around all of that yet.

Matthew: Yeah. Well let’s pivot to some personal development questions. I like to ask some personal development questions so listeners can get to know you a little bit. Is there a book that looking back over the arc of your life has had a big impact on your thinking or how you perceive things maybe giving you a new lens that you would share with listeners?

Skip: Yeah that would be Dale Carnegie’s book on “How to Win Friends and Influence People.” I read it as part of a sales course I took a long time ago and it’s really a study on human behavior and how to make the most of your interactions with people and really the book is filled with takeaways that I continue to use in my life and I’m always trying to work on getting better at this but one of them is just showing general interest in people and they say that the best communicators aren’t often the most charismatic people. They aren’t maybe the best storytellers. They’re just really interested listeners and people walk away with really positive experiences when you can remove yourself from and your stories and really focus on what somebody else is saying and just doing a good job at listening and providing good follow up questions.

My wife is really good at this so she’s kind of my mentor for this but I’ve gotten better but it’s something I continue to work on. Another takeaway I got from that book is you can’t win at arguments. So try to avoid it and at all costs make efforts to allow others to save face because even if you feel like you won that means somebody else lost and in the end you really both lost.

Matthew: That’s a great point. I don’t think we’ll be seeing much of that going into the political election season but I definitely agree with that. Try to look for win/wins wherever possible.

Skip: Mm-hmm (affirmative).

Matthew: Is there a tool web based or otherwise that you consider indispensable to your life for productivity besides fanny packs?

Skip: Well we’re trying to; we have a very small company but we’re trying to set it up with Fortune 500 infrastructure. So we’re hoping to set it up to scale and that means improving inventory, shipping, project tracking, accounting, customer service. Really just trying to automate and make a process for each step so that it is something that we can scale and we don’t fall on our faces if things get really busy, customer service drops off. We think customer service is a really, really important thing and we’ve been trying to find the software to improve on all of these things and we think we’ve got a pretty good fundamental company infrastructure for handling a lot of this stuff.

Matthew: So if there’s one tool I was going to take away from you and you would feel the worst about having it gone which would it be okay software tool, physical tool, vaporizer, anything that you just love and you’re like I can’t imagine not having that day to day and week to week.

Skip: I like the software called Pipedrive CRM system. It’s a really good place for me to organize all our different sales channels. Our distributors, our in house sales accounts, our sales reps, online retailers, You Tube reviewers, magazine reviews, affiliates. It’s just really concise and easy to work with program that keeps my life organized.

Matthew: Oh wow. So is that companywide then? Do you share it with everybody in the company or is just you?

Skip: We do all use it. I primarily manage it but we all do use it.

Matthew: Great. Well Skip as we close how can listeners find out more about Stash Logix bags?

Skip: You can go to our website. That’s got the most comprehensive store front. There you can find a lot of our accessories that we may or may not be offering in stores but we are in about 250 or more retail stores. You can find a list of that on our website as well. It’s www.stashlogix.com. www.stashlogix.com and hopefully you can find them in a smoke shop or dispensary near you.

Matthew: And are you still looking for investors for Stash Logix at all?

Skip: We are. We closed our seed round a couple months ago and we will be looking for more funding to get some of these new products off the ground here probably right after the holidays. Immediately after the holidays last year we discovered that trying to talk to investors during the holidays is not worth the effort.

Matthew: I can understand.

Skip: So we’re setting ourselves up to need more investment very soon.

Matthew: Cool. Well Skip thanks so much for coming on CannaInsider. We really appreciate it.

Skip: Thanks Matt. It’s really an honor. You were very inspirational in me getting into this and I’m very thankful to be a part of the podcast.

Matthew: Thanks Skip.
Matthew: If you enjoyed the show today, please consider leaving us a review on iTunes, Stitcher or whatever app you might be using to listen to the show. Every five star review helps us to bring the best guests to you. Learn more at www(dot)cannainsider(dot)com/itunes. What are the five disruptive trends that will impact the cannabis industry in the next five years? Find out with your free report at www(dot)cannainsider(dot)com/trends. Have a suggestion for an awesome guest on www(dot)cannainsider(dot)com, simply send us an email at feedback(at)cannainsider.com. We would love to hear from you.

Please do not take any information from CannaInsider or its guests as medical advice. Contact your licensed physician before taking cannabis or using it for medical treatments. Lastly the host or guests on CannaInsider may or may not invest in the companies or entrepreneurs profiled on the show. Please consult your licensed financial advisor before making any investment decisions. Final disclosure to see if you’re still paying attention. This little whistle jingle you’re listening to will get stuck in your head for the rest of the day. Thanks for listening and look for another CannaInsider episode soon. Take care. Bye-bye.


Skip Stone left his lucrative career outside the cannabis industry to pursuit his dream of creating StashLogix.
Stashlogix is the leader in creating stylish, functional locking bags that allow you to discreetly store and carry your favorite herb or flower.

Learn how Skip made the transition from traditional career to full-time entrepreneur and how to create a product that customers want.

Skip generously extended a 15% discount on all his bags to CannaInsider listeners.

Use Coupon Code==> CannaInsider15
at http://www.stashlogix.com for 15% off your order.

Key Takeaways:
[2:18] – What is Stash Logix
[3:29] – Skip talks about how he got into the cannabis space
[6:36] – Skip discusses his fears of stepping into the industry
[10:31] – Skip talks about his experience with CanopyBoulder
[12:18] – Skip talks about features of the Stash Bags
[15:26] – Skip walks listeners through the design process of the Stash Bags
[19:00] – Skip talks about getting distribution and dispensary wholesale partners
[23:55] – Incorporating feedback into the design
[24:54] – Neutralizing cannabis odor to avoid detection
[27:43] – Designing for both genders with one style
[30:00] – Ins and outs of working with manufacturing partners
[32:12] – Skip talks future development roadmap
[34:32] – Skip’s book and web tool recommendations
[38:18] – Contact details for Stash Logix

Important: What are the five trends that will disrupt the cannabis industry in the next five years? Find out with your free report at http://www.cannainsider.com/trends

Join CannaInsider For FREE & Receive
The Five Disruptive Trends Shaping The Cannabis Industry Now

Vape Cartridge Leader Talks About The Market – Ralph Morgan of O.penVape

Ralph Morgan of Open Vape

Read Full Transcript

Matthew: Hi. I’m Matthew Kind. Every Monday look for a fresh new episode where I will take you behind the scenes and interview the insiders that are shaping the rapidly evolving cannabis industry. Learn more at www(dot)cannainsider(dot)com. That’s www(dot)cannainsider(dot)com. We’ve talked about CBD or cannabidiol on the show many times. Just to review thought, CBD is a non-psychoactive compound from the cannabis or hemp plant that has many benefits. Now our friends at Treatables have put together a one list chew that can help your dog or cat become more calm and balanced. Valerie wrote in to tell us about her experience with Treatables.

Valerie writes, “My ten year old Husky/Sheppard/Lab mix Chuck is my faithful companion. Chuck got significantly quantifiably better from using Treatables. It took about three days of feeding Chuck two to three doses a day to see the full effect, but he did get noticeably more comfortable on the first day of feeding that to him. Before CBD Chuck limped and couldn’t enjoy longer walks though he clearly had the desire for them. Once he started taking them he could leap around again.” Thanks for writing in Valerie. Treatable Chews are legal and available in all 50 states right now. If you want to learn about what Treatables can do for your pet, visit www(dot)cannainsider(dot)com/pet and get a coupon code for 10% off your order. Once again that url is www(dot)cannainsider(dot)com/pet now here’s your program.

Vape pens continue to take up a larger and larger portion of the cannabis market. To help us understand the latest in vaporizer technology and consumer preferences is Ralph Morgan, co-founder and CEO of Open Vape. Ralph welcome back to CannaInsider.

Ralph: Thank you very much. I appreciate the opportunity.

Matthew: I like to give listeners a sense of geography. Can you tell us where in the world you are today?

Ralph: Yeah. I’m based in Denver, Colorado. Open Vape is based in Denver but enjoyed everywhere.

Matthew: Yes and where are you today?

Ralph: I am in Oakland at a national industry gathering called the NCIA. It’s the third annual business symposium and it draws folks who are interested in getting into the space and also all the movers and shakers in it and NCIA I think is one of the best examples of a national association that anyone interested in the space should recognize, pay attention to, and be a part of.

Matthew: Ralph the last time you were on the show was back in January of 2015 but for new listeners that are not familiar with Open Vape can you tell a little bit about yourself and the company and why you started it?

Ralph: Sure. So before I got into cannabis I was in sales and marketing in the medical sector. I worked for companies such as Smith & Nephew and Stryker which are orthopedic implant companies. So I was selling products to surgeons specifically total joints; knees and hips and it was really an opportunity for me to participate in healthcare and when I saw cannabis continue to pop up on the news I was pretty ignorant to the subject. I was just intrigued. Did my due diligence. My wife included and we discovered that there was tremendous medical efficacy and that this was clearly going to be something that we felt was going to be a part of history and we wanted to be on the right side of it. So we jumped in, opened up a dispensary, and really relished the interaction with end users. People who are looking for a natural alternative to synthetics and pharmaceuticals and it really took off from there.

We saw an unmet demand in the market. The products that were healthier alternatives than smoking and from that unmet demand in the market we started this little company called Organa Labs and invested in a CO2 extraction machine, supercritical CO2 extraction machine where we could extract safely the essential oils of cannabis and put it in stuff. That’s how we got our start and then in 2012 we met a couple other entrepreneurs in the space. Some successful dispensary owners who really thought that a personal portable vaporizer with a disruptive technology that the efficiency of it, the discreteness was going to be disruptive, and we all agreed to give it a go together and we started a company called Open Vape and it’s been successful and wild, wild ride since then.

Matthew: Yes. I’ve looked at the stats on what’s selling in dispensaries and you really are doing an excellent job in terms of grabbing market share so kudo’s to you. One thing that I’m curious about is how big an impact was it owning a dispensary in terms of how well you could then turn around and speak to other dispensary owners about the benefits and scratching their itch. I mean did you know how to speak the language as a dispensary owner yourself so was that a huge help or just a small one? Did the product do most of the talking? I mean what was it like getting in the door with other dispensaries?

Ralph: Great question. I would say that the product did most of the heavy lifting. The perspective we gained by being dispensary owners was invaluable however because that experience gave us the benefit of knowing how enthusiastic people were about this product. When we first started dabbling with vaporizers it was all geared towards electronic cigarettes. So the technology wasn’t specific to cannabis which means that the failure rate was horrible. It was up around 40 percent and people still were enthusiastic about it. We had a no hassle, no questions asked return policy to help start to address that quality issue early on but it was truly a testament to the product. The ease of use, the discretion of less smell, and great value factor. There’s no waste to burning like a joint and we could get the same amount of money compared to regular flower or a cone joint or something was profound. So the experience from dispensary was great but it’s really the product that gets all the credit.

Matthew: And to give listeners a sense of how big Open Vape is and your footprint can you tell us how large Open Vape is and where exactly people can find Open Vape cartridges and pens?

Ralph: Sure. So since 2012 we’ve grown to approximately 90 employees in Colorado. We’re in nine states currently with New Mexico coming online this week and of course we have to have bricks and mortar. A production facility, a lab in each state because we’re not able to ship across state lines. So it’s a lot of effort, a lot of investment, and in total we’re in approximately 1200 dispensaries or collectives; retail locations and to find a location you can simply go to the Open Vape website or you can download the Open Vape app. The app will give you suggestions of where you can shop based on your geographic location.

Matthew: So let’s just review. Why are consumers choosing Vape pens? You mentioned they’re discrete but what are some of the other benefits?

Ralph: It’s discrete and there’s little fiddle factor. There’s nothing lost in the bottom of your pocket or your bag. It’s just so convenient and it’s a healthier alternative to smoking. You’re boiling liquid and you’re breathing in vapor as opposed to breathing in burnt plant matter.

Matthew: Okay and since we last talked a year and a half ago roughly how has the market for vape pens changed?

Ralph: Well we’ve seen statistics by ArcView. They put out an annual report; the RAND report. Reliable sources that talk about the trend of concentrates and largely that’s made up of vaporizing devices. Last year it was 39%, this year it’s 42%. If you include edibles which are largely infused by concentrates or oil we’re well over 50% and concentrates make up more than 50% of all cannabis consumed which is a huge statistic. So over the last year we’ve seen the trend of vaporization grow exponentially. It’s healthier, great value, and convenient.

Matthew: Now just a few years ago there was really just kind of one vaporizer cartridge but now the markets grown large enough where there’s kind of like a premier type of cartridge where there’s maybe no solvents but there’s still some cartridges that have glycerin of some sort. Can you talk about how the market has kind of grown to include new segments of products?

Ralph: You bet. When we first launched in the original formula it does include an excipient. It was the safest excipient we could find on the market then and so it remains so today and it’s something that was used by and it’s currently used by the pharmaceutical industry namely AstraZeneca and Johnson & Johnson as a safe inhalant. Today most of our skews are cartridges that do not include an excipient but instead have various levels of purification and the reintroduction of volatiles namely terpenes. So during the extraction process you’ll remove the volatiles first because they’re the most sensitive and we save those. We then refine the oil and mix again as a final stage the terpenes, esters, alcohols, flavonoids, and offer a really tasty, high quality product that has the benefit of all the volatiles and all the terpenes as much as we can preserve and capture and we call that top tier product craft reserve and that’s a trend we see in the market is with the competition it’s a race for purity and it’s really fascinating to watch.

There’s a lot of competition. There’s a lot of technology. There’s a lot of scientists that are entering the space many of which were from big pharma and now they’re in this space. It’s really fun. It’s really exciting and everyone benefits. It’s a win/win when we’re all chasing quality.

Matthew: Now many of listeners have heard of terpenes and flavonoids but they’re not quite sure what those pieces of the puzzle are or how they fit into creating a product. Can you kind of just walk us through how you think about terpenes and flavonoids and what it means in creating an optimized product for your customers?

Ralph: You bet. We refer to those as the volatiles because they’re so easily lost in the purification process. So it takes tremendous care and attention to preserve those and capture those and hold those and what they do is basically give the oil and the strains their individual characteristics in that Sour Diesel has a very distinct taste and it’s those things that give it that character. So you can have dominance and you can have an oil that’s virtually tasteless and you have folks and cannasseur’s that really want to enjoy the characters of each strain and those folks are the demographics for folks who really appreciate the additional cost associated with preserving those characteristics.

Matthew: Now most people at this point are familiar with what indicas and sativas are and they produce a spectrum of different feelings for the consumer. Do you see new possibilities for customizing and kind of dialing in the effects of cannabis with vape pens?

Ralph: I do. I think the industry saw a race for purity and with purity comes potency and that ship has sailed with various purification methods like chromatography. You can isolate the cannabinoids and you can have something close to a 100% THC. So once that hype has calmed down people have really gravitated towards the characteristics and the quality of the specific strain. So what we’re seeing now is a lot of attention paid to preserving that specific effect that that strain offers. The next I think trend is going to be dialing that in even further and I’m looking forward to the industry coming up with a way to characterize that. So for example if you’re a fan of Sour Diesel and you found a specific phenotype and flower product that really spoke to your ailments or really gave you the effect you’re looking for medicinally or recreationally and you wanted to repeat that it would be great to know more information about it like the fingerprint of it.

So if it was an X, Y access it might be Sour Diesel, maybe X1, Y3 that really was the products that spoke to you. So if we had a catalog of that information then we will all I think really enjoy learning and understanding and experiencing the nuances between the strains and the phenotypes even within one.

Matthew: Oh very interesting. Has there been any twists or turns that you didn’t see coming? I mean as the industry leader your focus on this market segment is probably the closest anybody can think of but is there anything that’s kind of come out of left field where you said well we really weren’t anticipating this but we’re going to adapt or change or evolve in a new way?

Ralph: Yeah there has been some examples of that and it’s been from regulation. In Colorado in 2014 the voters spoke and said hey we want this legal. We just want it available for adults and they can make up their own mind if this is right for them or not and at that point we thought we really achieved a milestone but that was cast in stone and couldn’t be reversed and this year we’ve had the most active legislative session and we’ve really experienced some steps backwards related to how regulators still view the industry and it was a huge reminder that we’ve made progress but we still have a lot of work to do and anyone who’s in the industry is also an activist because we have so much education and communication to the regulators, the gatekeepers. We need to inform them of the benefits of this product and that work it never rests and we have to be mindful of that.

We had a couple experiences where regulators made some decisions. They didn’t invite the industry to the table for those discussions and we all need to invest in each other and be more active, more involved in our communities, and make sure that we’re spending the time that’s necessary to educate the policymakers to we have responsible regulation.

Matthew: Now I understand you also have a dry herb vaporizer now. Can you tell us about that?

Ralph: Yeah I’m very excited about that. We connected with the Ziggy Marley camp and Ziggy really wanted to have a product that was available to more people. Dry herb vaporizers are notoriously incredibly expensive and he wanted something that was more affordable. So we joint ventured and we created a dry herb vape that was considerably less expensive but of high quality and proud to offer that. Looking forward to seeing where that relationship with Ziggy and his team takes us. We’re really excited about it. We’ve been working on this for quite some time and communicate anybody that we were doing so and just launched his latest album on May 20th and in conjunction with that we launched this dry herb vape. Sales and enthusiasm for the product have been incredible and really proud of the project.

Matthew: That’s great. I bet a dry herb vaporizer has a little more challenges there because with the oil vaporizing there’s essentially a disposable product after you’re done. You’re throwing it away and with the herb vaporizer you’re using that ongoing is that right? What kind of challenges does that present in terms of making sure the components last and so forth?

Ralph: Well just like the rest of our products we offer a warranty on it that’s really customer centric. So if people have issues with it of course we treat them right but they’re very unique products and they have their own challenges and also their own positive offerings for folks that really enjoy flower. This is the product for them and they can grind up their flower; their favorite flower and still have a healthier alternative to smoking and enjoy the benefits that come from that.

Matthew: You mentioned that obviously cannabis is still federally illegal so you have to have kind of a set up in each state where you operate. Do you also look at; is it through licensing acquisition? I mean how does it look exactly when you grow from state to state?

Ralph: Our model is a licensing model. So we license our IP and we sell packaging and marketing to our licensees. Those licensees must qualify and part of that qualification process is that they’re properly licensed with the state. That’s the only way that we’re able to move forward is if they’re in a state obviously that recognizes cannabis as a legal business and they’re responsible for touching the plant and we do not make money from the sale of cannabis in those states. Instead we make money on licensing the IP and selling packaging.

Matthew: Is that just a matter of taking the playbook of like franchisees or something? Do you kind of take the best practices from other industries and then just apply them to the cannabis industry so you’re not reinventing the wheel there?

Ralph: Yeah I think that’s a great analog. Like a franchise you’re sharing a proven process, a proven model.

Matthew: When you look ahead the next two or three years where do you see the vape pen market going to and what excites you the most about it?

Ralph: I’m interested in what the future brings and I think that includes compounding cannabis plus fill in the blank equates to what? I think there’s great application for compounding cannabis with chamomile for more relaxation. What’s a healthy alternative to an energy drink or an alternative to a cup of coffee but in the form of vaporization? I think that’s the future is cannabis mixed with other beneficial botanicals.

Matthew: That’s a great idea. So maybe something like CBD vape cartridge with turmeric to maybe reduce inflammation and things like that?

Ralph: Correct. Obviously we’ve got a lot of work ahead of us. We need to study those products and make sure that they’re safer inhalation vaporization but a version of that I think is what the future promises and it will be very exciting to see what comes of it.

Matthew: I like to close the interview with some personal development questions Ralph. With that being said is there a book that has had a big impact over the course of your life when you look back and you say wow this book had a lot of impact. I find myself thinking about it year after year and you want to share it with CannaInsider listeners?

Ralph: Wow that’s a huge question.

Matthew: No pressure.

Ralph: No pressure. I love to read and I’ve got about an hour commute each day so I love to listen to books on CD and I’ll confess that one of my favorites is; man I have a hard time picking a favorite but I’ll mention several. Wayne Dyer is someone that I adore. Deepak Chopra is another one where they focus on you being in control of your destiny and we create our own fortune and good luck but we’re in control so it’s not I hope I have a good day. It’s make it a great day and I love to start my day with that because it’s a reminder that we have got so much opportunity in America and often times we forget. Often times we feel like we have a sense of entitlement and success should just come to us but those authors help remind me that we’re in a real special place and we have lots of opportunity here and I don’t think there’s any better example of American than cannabis.

I think the smell of freedom is cannabis. Freedom smells like cannabis. I don’t think there’s a more American industry when the American flag was; one of the original American flags was made with hemp and the constitution, the original constitution. I’m proud to be an American. I’m proud of hemp and cannabis and I love the intersection of those. So those authors would be my first pick and for all those reasons.

Matthew: Great quote “freedom smells like cannabis.” Is there a tool web based or otherwise that you consider indispensable to your business life or productivity that you would recommend?

Ralph: Wow a tool? Yeah I would say the most powerful and effective tool that’s affected my life and my professional career is; it may sound cheesy but its criticism from my business partners. Cannabis is a new industry. It’s moving a mock speed. We all have to make a lot of decisions in a short period of time and we have no time to waste on pleasantries or being politically correct. So often times partners in the company; the co-founders Chris McIlvaney, Jeremy Hidol, Jim Collins. We will offer each other some corrective criticism and serve up some humble pie often and there’s a lot of trust that goes along with that. You can have an amazing idea so you think and have your partner explain to you all the reasons why it’s a terrible idea but that’s empowering because that means you get to improve.

There’s tremendous cognitive gain from having that level of openness and trust in one another. So that’s been I think one of the best tools and contributors to our success is getting more collaboration. It has allowed us to expand, it has allowed us to partner with others, and share a smaller piece of a much, much larger pie.

Matthew: It’s funny you mentioned that. It’s the “Book of Mastery” I want to say talks about that as the feedback. Having a feedback loop from people that have the ability to help you excel is a critical part in achieving mastery because otherwise you can be on the wrong course and not know it. So it’s vital to have those kind of a little peer counsel that can keep you on track. So it sounds like you have that so that’s great.

Ralph: Yep. Thank you.

Matthew: Ralph in closing can you tell us one more time how listeners can look and find Open Vape in their community?

Ralph: You bet. There’s two suggestions. One you can simply go to our website www.openvape.com and you can also download the app and the advantage of the latter is that it will recognize if you allow it; it will recognize your location and it can make recommendations where you can shop and at places that are conveniently located near you.

Matthew: Great. Well Ralph thanks so much for coming on CannaInsider. We really appreciate it.

Ralph: It was a pleasure. Thank you very much.

Matthew: If you enjoyed the show today, please consider leaving us a review on iTunes, Stitcher or whatever app you might be using to listen to the show. Every five star review helps us to bring the best guests to you. Learn more at www(dot)cannainsider(dot)com/itunes. What are the five disruptive trends that will impact the cannabis industry in the next five years? Find out with your free report at www(dot)cannainsider(dot)com/trends. Have a suggestion for an awesome guest on www(dot)cannainsider(dot)com, simply send us an email at feedback(at)cannainsider.com. We would love to hear from you.

Please do not take any information from CannaInsider or its guests as medical advice. Contact your licensed physician before taking cannabis or using it for medical treatments. Lastly the host or guests on CannaInsider may or may not invest in the companies or entrepreneurs profiled on the show. Please consult your licensed financial advisor before making any investment decisions. Final disclosure to see if you’re still paying attention. This little whistle jingle you’re listening to will get stuck in your head for the rest of the day. Thanks for listening and look for another CannaInsider episode soon. Take care. Bye-bye.


Ralph Morgan, co-founder of O.penVape discusses the vape cartridge and vape pen market and how his company grew 1200% last year. Ralph shares his thoughts on how the industry is maturing and evolving and where the opportunities are now.

Key Takeaways:
[2:53] – Ralph talks about his background and starting Open Vape
[5:45] – Advantages of being a dispensary owner prior to Open Vape
[7:31] – The key attributes of Open Vape products
[9:07] – How has the vape pen market changed over the last couple of years
[12:33] – Terpenes and flavonoid considerations
[13:56] – Vape pens customizing the cannabis effects
[16:08] – Dealing with surprises in the market
[18:07] – New dry herb vaporizer
[20:38] – Opearting in different states
[22:00] – The future of the vape pen market
[23:39] – Ralph’s book and web tool recommendations
[28:17] – Contact details for Open Vape

Important Update:
What are the five trends that will disrupt the cannabis market in the next five years?Find out with your free guide at: http://www.cannainsider.com/trends

Join CannaInsider For FREE & Receive
The Five Disruptive Trends Shaping The Cannabis Industry Now

The Whole Foods of Cannabis?

Michael Steinmetz CEO of FlowKana

Read Full Transcript

Matthew: Hi I’m Matthew Kind. Every Monday and Wednesday look for a fresh new episode where I’ll take you behind the scenes and interview the insiders that are shaping the rapidly evolving cannabis industry. Learn more at www(dot)cannainsider(dot)com. That’s www(dot)cannainsider(dot)com. Are you an accredited investor looking to be part of some of the most sought after private cannabis investment opportunities? Get on our free private investment alert service at www(dot)cannainsider(dot)com/invest. Once you have subscribed to the investor alert service you will get access to curated opportunities that the public will simply never see. Again that URL is www(dot)cannainsider(dot)com/invest. That’s www(dot)cannainsider(dot)com. Now here’s your program.

Just as Whole Foods created a whole new market segment for discerning shoppers, Flow Kana is now doing the same for cannabis. Providing a higher quality product while also giving customers transparency on where the cannabis they purchased was grown and under what conditions. I’ve invited Michael Steinmetz, Founder of Flow Kana onto the show today to tell us more. Michael welcome to CannaInsider.

Michael: Thank you. Thank you for having me.

Matthew: Michael before we dive into what Flow Kana is can you tell us a little bit about your background and how you got into this industry?

Michael: Sure, of course. I’m originally from Caracas, Venezuela. I was born there, grown up there, and just recently moved up here to the Bay area about three years ago really in pursuit of understanding this industry. Really understanding how the ins and outs worked and who the different players were and really how I could be a part of it and add value to the current industry. I’d always kind of been a passionate advocate about the space. My mother actually used cannabis for really chronic medicinal reasons growing up. So I very closely followed it during my entire youth and early on adult life and I was always kind of very curious and interested to see it kind of evolve in a professional and responsible manner and kind of move away from the reggae and Rastafari and the taboo that’s kind of associated and the negative stigma around it and I kind of being a close advocate back in 2010 when it was the election time here in California and we were so close to getting it approved. I was like wow this is really going to happen in our lifetime.

So I decided to sell my business in Venezuela around three years ago and I moved out here with my wife really to understand the industry and understand the different aspects of it and different facets and see how I could help move the needle and make it become a more responsible and professional industry and just kind leverage and work with a lot of the operators that currently existed. So yeah that’s kind of how I started. Just kind of a passionate young person in the space and just realized it was really going to happen in our lifetime and it was just up to us to really make it happen. So that’s kind of when we decided to move out here and get to it.

Matthew: Great timing getting out of Venezuela by the way.

Michael: Yeah.

Matthew: I think sometimes we get stuck in our North American bubble.

Michael: Oh yeah.

Matthew: I’ve spent extensive time in South America and I’m familiar with Hugo Chavez; who he was and now Maderro but can you just give a little overview because Caracas has a lot of natural resources in terms of petroleum but now essentially the economy is somewhat in collapse and could you just talk about what life was like in Venezuela growing up and then the transition to Chavez and where we are today?

Michael: Oh yeah. I mean that’s actually; well that could be an entire interview in itself.

Matthew: Yeah.

Michael: We could spend the next hour talking about that but sure I can give you a little bit of a glimpse of what my life was like and to be honest it was a very sad and tragic continuous deterioration of the country since I was born there and grown up there. I was born in ’83. Definitely went through different political schemes or different political parties over my youth. None of which were definitely something that the country should have been proud of and definitely what caused us to get to the Chavez regime in ’98. When ’98 Chavez got re-elected. He gets a major, major victory. Majority vote because Venezuela had been poorly run for many years. A very corrupt country. Very dependent on oil money. A very rich nation so it really never took the time to develop industries and develop manufacturing and educate the people because we were just sitting on this one resource that we could all depend on.

I think that is always a blessing and a curse right. It’s a curse of the black gold that they call it right and yeah when Chavez regime came on in ’98 basically he started taking all the private companies and turning them into public institutions and governmentalizing them and that became very slow and bureaucratic and slowly killed entrepreneurships, slowly killed corporations, slowly killed the industry of the country and he wanted the country to depend on the government and when they wanted food they needed to ask the government, when they wanted water they needed to ask the government, when they wanted electricity they needed to ask the government, when they needed money they needed to ask the government. So they created a dependency and in a very Communist/Socialist regime that was disguised as a democracy for so long and nowadays we’re really, really suffering the consequences. I think it’s close to 18, 19 years of this regime.

We have a country that does not have the necessary basic food and it doesn’t have the necessary education and it doesn’t have toilet paper, chicken, or milk and there’s horrible lines. The crime has skyrocketed. The currency has devalued. People don’t really understand how bad it is because when you read about it in the news it sounds so ludicrous that it’s almost unfathomable. It’s unfathomable and the truth is that it’s probably sometimes even worse than what you get to see in the news when it leaks. So I left with my wife actually three years ago because we were lucky to sell our business in a really opportune time but that was really the motivation of it too. We came to a point where we couldn’t import the goods that we needed to produce and basically we had a massive devaluation. In basically three weeks our currency devalued almost 600 percent. So the cost of my product went up 600 percent and it just killed the economy.

Matthew: Wow.

Michael: This was a very intentional play from the part of the government. A lot of people say that they just make mistakes and they’re really stupid and they’re really; they don’t know what they’re doing and I actually think it’s the opposite. I think this is really, really well thought out strategy from the Fidel Castro regime and the communist regime and it’s just a little playbook of communism that they’ve just rolled out in our country. And it’s very, very sad. We went from being one of the wealthiest nations in the world where you basically had; I always use the example that says the Cartier store the first store they opened outside of Paris was in Caracas and like you see the Ferragamo Bags and they were in Caracas, New York, London, and Caracas was this mega capital of the world and we were this dominant force in the world and poised to do great things and we just totally misused it. Improperly used our resources. So it’s very sad to see where we’ve gotten to today and hopefully change will come soon.

Matthew: Wow. It’s really interesting to get that firsthand account. I recently read a statistic that 40 percent of the millennials in the United States favor socialism over capitalism.

Michael: Mm-hmm (affirmative).

Matthew: And that really scared me because every country I go to all over the world where they either formally socialist or currently somewhat socialist the economy never feels the same. It’s kind of like this zombie economy and I see kind of the rise of Bernie Sanders and while he does speak a lot of truth at the same time I don’t think he understands what socialism would feel like and you got to see that whole spectrum through your life. I mean and it sounds like you favor more a capitalist society than a socialist.

Michael: I don’t know Matt. I mean certainly I think capitalism and free markets definitely end up resolving themselves out in the end. So I definitely like that system for sure. I don’t have actually anything against socialism. In fact I truly believe in the socialism on principle when it’s actually done properly and truly socialist. I would not say what we have in Venezuela is socialism. I would say we have fascist/communism/dictatorship that’s dressed up as socialism.

Matthew: Right.

Michael: When I think of socialism I think of Norway or Scandinavian countries where they have access to healthcare and they have access to education and they have access to good unemployment and they have access to a lot of services that the basic population should need and I think in principle socialism should work I just don’t think what we have in Venezuela is socialism. But I would agree with you that in general in countries where socialism is in place it hasn’t been the best opportune model for extreme growth I would say.

Matthew: Right and some would argue that Norway’s socialism works so well because they have such a large strategic petroleum reserve.

Michael: Exactly.

Matthew: That they can invest in other things.

Michael: Yeah maybe that’s very true and maybe had we used our oil instead of for the pockets for the very few who stole it; to actually use it for the country in education and once you educate the population and you teach them the tools to build their own businesses and build their own ways of income then they don’t depend on the oil right. I feel like we should be using the natural resources of our oil. Every single dollar we get to figure out how we get out of it. You know what I mean?

Matthew: Yeah.

Michael: A lot of people just sit pretty and comfortable with this kind of oil stream and they build the businesses and they build really strong motes and defensibility around their businesses to continue to move forward in this direction and I just think that doesn’t serve anybody.

Matthew: Yeah. Qatar has done a great job of that. Kind of taking the oil money and reinvesting it in creating other channels for the economy aside just for oil but then there’s Saudi Arabia that really hasn’t done as good a job so.

Michael: Yeah.

Matthew: You’re right there’s examples around the world but it sounds like this is a whole separate show Michael. We’ve got to stay on topic here with Cannabis.

Michael: Okay.

Matthew: So tell us about Flow Kana. What is it and why did you start it?

Michael: Perfect. So Flow Kana really what it is it’s the first organic sun grown sustainable cannabis brand and what we do that is very different from most companies is that rather than going down and vertically integrating down our supply chain we actually partner up with master growers that already have been doing it for multiple generations right and our whole brand and our whole ethos and our whole philosophy is to give the small farmer a unified voice and the scalability that they need to compete in the marketplace because as an individual grower, as an individual farmer you produce too little cannabis. You’re forced to do too many of the pieces to go to market. You’re forced to dry, to cure, to trim, to sell, to market, to distribute, and not really allowed to focus on the core of who you are which is a cultivator, which is growing.

So the whole idea with Flow Kana is to give enough small farmers the services and tools that they need to go to market efficiently in a way that’s scalable with their neighboring farmers and that’s kind of what we’re about and I think was that the question or how did I get started? Was that the second part?

Matthew: Yeah.

Michael: Yeah or why did I get started? So I got started Matt really because after spending a lot of time in the industry working and networking and I volunteered at a dispensary for some time and I streamlined their operations and their management and they got to learn about the ins and out. I found that because of the weird gray area that this industry lies in both legally and with the whole kind of medical card aspect to it and the licensing structure that did exist but doesn’t really exist in California it created a lot of what do you call like market irregularities I would say and one of the pieces that was really suffering under the current scheme in California was the cultivator, was the farmer. Being so far removed from the end consumer they were year after year pushed down and pushed down and pushed down in price and they were not allowed to send their brand downstream and communicate their values and who they were to the customer.

So we basically came in to disrupt both of those things. We came in to basically pay our farmers fairly, get them into competitive rates in the marketplace, and allow them to connect directly with the customer to be able to tell their stories so that we could stop buying moonshine cannabis which is what this industry is all about right. We go from a black market environment where whatever your dealer had is what you got right.

Matthew: Right.

Michael: You didn’t really question anything. You’re dealer came into your home. You want him out of there as quickly as possible. You don’t really ask him to much questions because whatever he has you’re taking and we moved to a world of dispensaries where you have varieties and you have choices and you can ask questions to a bud tender but you still don’t understand who grew it, you still don’t understand what went into it, you still have no idea what chemicals and pesticides were used in a cultivation, and we came in to basically give all that transparency and visibility down to the supply chain and I think that’s super critical to arm consumers with knowledge and to arm them with more information and facts to be able to base their decisions in the future.

Matthew: And what has the response been to Flow Kana to date?

Michael: It’s been amazing. I mean I think we really hit our core with a lot of consumers at large and other industry folks as well that understood kind of the importance of giving credit where credit was due right and giving credit to the farmer that did spend eight months in the full sun cultivating this plant and loving it and taking care of it. Give him the credit for growing and for putting it out to the world. I always make the comparison that growing into a dispensary right now is as if you went to a Bodega or a liquor store and instead of buying Budweiser or Stella or any of the brands that you buy you’re just buying Bodega beer and Bodega wine and that’s not the case right. Every single bottle and every single beer and every wine has a story and it has a process and it has values and it has an identity and that’s being lost right now in the current system, in the current industry.

We’re buying a whole bunch of moonshine cannabis and I think that’s not leading; that’s perpetuating the problem that we created in the black market in prohibition with our dealer and I think one of the things that we’re trying to push as Flow Kana in this industry is to encourage more people to be ultra-transparent in their practices. To really show what goes into what they’re selling and what comes out and I think and I don’t blame the current system the way it is because in their defense we have been operating in the black legal illicit market for a very long time and very unregulated market and there was lives at stake. So a lot of the cultivators didn’t want to get their brand downstream either. So it’s a weird kind of dichotomy between the legal landscape and how the industry is evolving and how the consumers are pushing the industry forward as a more of a consumer goods product, industry. So that’s kind of where we stand.

Matthew: How is the cannabis from Flow Kana presented and packaged because I think you’re doing kind of something interesting here that listeners would like to hear about.

Michael: Totally. So every single one of our packaged jars we call them are co-branded with the farmer okay. Co-branding means every single jar comes with the name of the farmer that grew it and it comes with where it was grown. So it’s the same way that you buy kind of craft coffee nowadays where it says grown by Eddie Barrientos in Guatemala right. So our craft cannabis will have the label of the grower, it will have exactly where they grew it, and if you go back to our site you’ll know exactly; you’ll know more about their farm. You’ll know exactly about their cultivation practices and you can even connect to them. You can send them a message through Facebook or Twitter. So that’s kind of the unique difference between how we package our product and the reason why co-branding is important too is that at the consumer level it’s going to be too hard and too difficult for every consumer to remember or to learn all the different farmer brands on top of all the different strain names.

The whole industry is very complex and confusing right now. So the whole idea with Flow Kana is that we become an umbrella brand where consumers can be like oh this is a Flow Kana jar, this is a Flow Kana product. Let me see who grew it. Let me see who manufactured it and the whole idea is to gain the trust of the consumer through the Flow Kana and then be able to showcase the story of the grower or the manufacturer or whatever product we’re talking about to the customer.

Matthew: And where does most of the flower come from?

Michael: So most of our flower actually comes from up north from the Emerald Triangle. Particularly the Mendocino area. I think Mendocino is poised to be amongst the quality capitol of cannabis for sure. I think the biggest producing area in the world as most of your listeners know is the Emerald Triangle. You have the region of Humboldt county which is up north and you have the region of Mendocino and Trinity right. Those are the three counties that form the triangle. Out of those three I think Mendocino and Humboldt are kind of the biggest and most evolved and Humboldt while they’ve been focused on volume and scaling and production and that’s kind of what they’re known for. Mendocino is actually been known much more for quality right. They’ve had even more restrictions on how many plants they can grow and how big they can grow them and so the farmers in Mendocino they’ve only been able to grow 25 plants so for them they’ve had to get really, really, really good at growing 25 plants to be able to survive and to depend on that market.

Matthew: Are they huge plants or like the size of trees?

Michael: Yeah. They are massive actually. You’d be surprised. The first time I went to a; the real reason I kind of started Flow Kana was in part of my research when I stumbled onto Happy Day Farms and I went up north and I saw their farm and I saw their entire farm eco system where they not only grew cannabis but they grew other vegetables for the community. So you had your patch of cabbage and carrots and sunflowers and then you had your cannabis plant right next to it and it was such a beautiful eco system and the plants that I saw; this plant must have been 14 feet high. It was twice; a little bit more than twice the size of me and it was massive and you know I’m used to seeing small stressed out plants under LED’s in the indoor and seeing a full, full spectrum and full light. Full eight months cycle underneath the sun to me was really kind of changed how I understand the growing; the cultivation aspect of the industry for sure.

Matthew: Now it sounds like there is a strong tradition of growing cannabis well in that area, in northern California. Obviously ideal temperatures and things like that but what about the characteristics of the growers themselves. They kind of seem like they’ve really gone deep. Like these are the Jedi growers up there. Would you say that’s true?

Michael: A 100 percent. I mean these are; when we say master growers we don’t say this loosely and I think they have I would say 95 percent of our farmers are multi-generational farmers so these are second and third generation cannabis farmers. So this is people that have been working on the land for decades and not only working on the land but really getting good at picking the right genetics for their plot of land. One of the things that’s really interesting that’s coming out in cannabis that has been kept under wraps and under prohibition is the whole idea of Appalachians. The same concept of Appalachians with wine of Sonoma or wine of Bordeaux is that every single cannabis plant and every cannabis seeds is very particular to the environment in which it is grown in. So a farmer that grows in a southern facing wall has totally different sun exposure than a farmer that has an eastern facing wall and someone that is at 1,000 feet is totally different than someone who’s at 300 feet and then there’s the fog line.

So how close you are to the coast has more salt water or less salt in the air. So the humidity is different. So all these different aspects play a huge part in the cultivation. So for instance one of our farmers actually told me this story this weekend which I thought was really interesting is that he finally upgraded and he bought a different plot of land which was only I think he said 600 yards away from his previous plot of land where he had been living for forty years and he said that last year when he planted the same genetics and the same grow cycle, the same everything that he’s always done in this plot of land that just only 600 yards away the yield was terrible. It was totally off. Nothing worked out and he was fascinated that of course he knew this already going into it that it would be different but not that much so and I think that’s what we’re going to start seeing in cannabis and that’s what’s so unique about the strains that we have in Flow Kana is that the strains that we carry are very boutique genetics; a very rare genetics that the farmers have been handling for decades.

So they’ve really mastered it and perfected it between the soil and the angle of the sun and how much water it gets and what you get is a strain that won’t grow anywhere else in the world except there with those same conditions to turn out exactly the best that it does and I think that part of the cannabis plant is fascinating.

Matthew: So with Flow Kana you get this beautiful glass jar, this great presentation and you’re holding it in your hand and you get to learn about the farmer and the region it came from. You’re getting more benefit and you’re paying a higher price I assume.

Michael: Mm-hmm (affirmative).

Matthew: On a program basis how does it compare to say like the median gram of cannabis flower in California?

Michael: Right. So actually we price our ace at forty dollars an eighth. I would say that for better or for worse dispensaries have created a bottom shelf, a mid tier, and a high end cannabis category. That’s usually what you see in a dispensary when you walk in is three general categories low end, medium, and high end and within there the price ranges a lot. So I would say the high end cannabis ranges from between forty dollars to sixty-five dollars and eighth is probably where you see the top end cannabis and we chose to position our cannabis on the low end of the high end cannabis if that makes any sense. So forty dollars being the low end of that category and that’s kind of just a personal belief of ours that I’ve always kind of hated in the world really why it is that you’re going to pay for something organic and the organic one has to be more expensive than the chemical one that was processed in the lab.

It’s kind of like the incentives are totally off in the way that we’ve built the world that we incentivize one cent when all these big corporations to continue to grow under poor conditions and we charge farmers that are growing organically; we force them to pay for a permit so they can get organic certified so that makes their product more expensive. So I’ve always felt that to be backwards in the world. So our hope with the cannabis is that we can do it with Flow Kana is that we can actually show that hey we can produce incredible high grade sun grown organic cannabis. Probably the best quality you’ll find in California and actually make it at an affordable price.

Matthew: I think it would be easy to change the whole market towards organic if we got rid of the organic term and just called organic regular, and then we call the other extra chemical or doused in chemicals and pesticides. No one would want that.

Michael: That’s exactly right Matt. I mean I’ve always felt that was upside in our world. You should put a label on the ones that have the chemicals and like hey this has wax and this has whatever; poisonous gas that was used in World War II whatever.

Matthew: Yeah.

Michael: That should be notified. That should be told to the consumers. We should just live in a world where we just assume everything was done with organic and love and care but we don’t unfortunately. So yeah that’s kind of the reality and hopefully with cannabis it can be a little bit different.

Matthew: Now tell us about your app and the ordering experience.

Michael: Yeah perfect. So a lot of people actually confuse Flow Kana as a delivery service right because I would say that our go to market strategy was a delivery service. We always wanted to be a cannabis brand and always be known for that but when we tried to take our brand and put it in dispensaries really early on in the project I would say about a year and a half ago, two years ago we were a little bit ahead of our time. Dispensaries were not used to prepackaged flower. So they were like you’re crazy. I’d buy my cannabis by the pound and I put it in my own bags why am I going to be your prepackaged flower? So we were like okay screw it dispensaries won’t take our product let’s just start a delivery service. Let’s showcase the value of our farmers. Let’s tell their stories. Let’s showcase the quality of the medicine and let’s build our brand direct to consumer first and then see if we can then back into selling to dispensaries and doing wholesale.

So that’s exactly what’s happened now two years afterwards where we’ve built kind of a little bit of a name for ourselves and a reputation for ourselves and now dispensaries are excited to work with us and partner with us for our prepackaged flowers and we’re super excited to work with them as well. So your question was what is our app and our delivery service? We still continue to do a direct to consumer aspect to our business but we’re not a regular delivery service like anything you would find in WeedMaps. We don’t have a bunch of edibles and topicals and creams and tinctures and all these other products. We just focus on our one product that we do really, really well which is flower. So we started off a year and a half ago with the delivery service and it’s a web app based service.

So you basically go to www.flowkana.com, you browse through our menu. With a few simple clicks you’ve uploaded your medical card, you’ve uploaded your license, and you place your order and we verify; for the first time user we’ll verify you as a patient. Once you’re cleared from that verification process then within 19 minutes we get a delivery to your door. So it’s basically on demand cannabis delivery. Our average delivery time is around 19 minutes.

Matthew: Okay so in California exclusively right now?

Michael: That’s exclusive I would say our delivery service is exclusively actually to the northern California area, to the Bay area.

Matthew: Okay.

Michael: We only deliver in San Francisco and the East Bay right now and we’re doing wholesale. So you can find our Flow Kana flower in dispensaries all over the Bay area and also in LA; Los Angeles. So in Los Angeles you can find us in dispensaries down there and our; it’s funny because our delivery service was kind of our go to market strategy. We actually built a really, really incredible customer service team and incredible driving team and we actually have a really kind of exceptional service so now in this moment and time we’re actually deciding what to do with both. We’re kind of having a wholesale program in placed and a direct to consumer in place. So we’ll probably maintain those as long as the laws permit and as they evolve over time over these next couple years.

Matthew: And what have been the most popular (28:37 unclear)?

Michael: Popular flower strains on our menu? I mean I think that varies Matt. I mean I think the whole basis around our company is that they’re all small batched okay. So unlike I think what some of the more commercial industry is moving towards which is producing 1,000 pounds of OG or producing a 1,000 pounds of Sour Diesel. We really want to focus on small batch, small lots, and allowing the person to really learn about the farmer and find the farmer that they like. Traditionally what we’ve seen is that people that like a certain farmer they’ll really enjoy all their strains and people that try a farmer that they don’t like say it’s too strong or too potent or giving them too much anxiety most of the strains from that farmer are that way as well and the reason being most farmers kind of grow what they like to consume and obviously it has the energy and intention of the farmer during the growing process.

So more than being kind of strain specific in terms of what strains have been doing well in our platform I think certain farmers have found their niche customers that really like their product.

Matthew: Okay so you’re buying more the farmer and the region than you are the strain in this case.

Michael: Yeah I think so and I think like I actually hope over time that I think the whole strain naming thing is a little bit of a nonsense to be honest right. There’s zero accountability. If someone says this is Sour Diesel there’s really not a way to know if that’s Sour Diesel or if it’s something else.

Matthew: Right, right.

Michael: There’s thousands and thousands of names and it’s very, very confusing. We actually have a very kind of talented design team in house so we’re trying to figure out a way how to reclassify cannabis in a very digestible way. The same way that you have IPA’s and you have pilsners and you have the porters and whatever else that you have. I think something like that needs to happen in cannabis where we reclassify it in a way that's a little bit more understandable and digestible and sure each strain has an enormous variability with the genetic code but there is some sort of classification of that very high level that we can all kind of agree on as an industry to make it easy for customers right. Like someone coming into the industry that has never tried cannabis before especially an elderly person they’re probably not going to like to try green crack or under enough amount to swear and the program Thunder F something else.

I don’t know it’s funny because I actually read an interesting book called “The Last Call” and it was a story kind of about prohibition; the alcohol prohibition and you know during the alcohol times and under prohibition it was a very, very similar landscape right. You needed to have a medical card to buy medical grade alcohol from medical licensed dispensaries and those names back then it was just like whoever built that barrel in the basement got to name the barrel whatever they wanted right. So it was more of like the farmers right now they name the strains whatever they think they want. Some of them keep genetic lineage in place but I think the naming convention is very confusing to customers. So I don’t know how that’s evolve over time but I’m excited to see how it does.

Matthew: And where do you see Flow Kana evolving over the next couple years?

Michael: Yeah so I mean I think as the industry, I think as industries evolve and mature what usually tends to happen is that there’s a great big degree of consolidation. There’s a lot, a lot of noise right now in the industry. There’s a lot, a lot of brands out there. There’s a lot of people because of the regulatory system has been not so robust since 1996 when they kind of put in place the Compassionate Care Act here in California when cannabis first became legal. The legal system was kind of left for the market to kind of evolve and it’s kind of done some great things and it’s done some not so great things as well.

So I see Flow Kana kind of being really true to its core and really being true to being a brand that people can recognize and can trust and we see ourselves moving into other categories not just flower and having Flow Kana some sort of edibles and topicals and tinctures because the whole idea is that as the industry matures and more people come in what are those people going to look for? What brands are they going to trust? What are they going to look for in a product and I think the easier it is and the deeper connection they can form with one brand or several brands the better it will be for them. So kind of staying true to our core and just kind of becoming much more of a recognized brand and a trusted brand in the industry.

Matthew: So a lot of people listening don’t always get to hear of all the difficulties in starting a business. They think that’s it’s all you wave a magic wand and you’ve got this successful business. What have been some of the difficulties in getting Flow Kana going? Is there some setbacks or times where you’ve had to pivot and try different things?

Michael: Yeah absolutely. I mean I think what you said is very correct. I think building a business and starting a business is a very challenging task and it’s something that you really, really have to love what you’re doing and be extremely passionate about it and be very convinced of your path and the decision you took to embark in entrepreneurship because the truth is it’s so hard and you get so many problems and so many obstacles along the way that you have to have that passion and that love and that intensity and that connection to really overcome that and in Flow Kana I would say it was no different. I mean I think we’ve been moments where right between fund raising where the cash is getting close to the end and you’re struggling to figure out how to pay the bills and then oh the cash comes in and then you can breathe.

Then there’s times where the team doesn’t work out and you bring on people and you test them out for a while and some people the paths don’t align and you’re unable to move on. So for us as a company especially in this really nascent industry that’s being formed. I think the real, real thing that we kind of stated hard is to stay very nimble and adaptable and stay very just quick to decisions because one thing that we know for sure is that this industry is going to change dramatically over the next coming years and I would even say months. From the way the industry looked January 1st to the looks of today is totally different in my lens and the truth is this is not we’re inventing the personal computer and we’re going to figure out if people like it or don’t like it. This is just like we know that there is a demand right. People love cannabis.

The demand exists. We don’t have a demand; we’re not demand constrained. That’s not our biggest problem that we’re trying to solve. We’re not trying this fight for market share or education. What we’re really trying to solve is what’s going to happen to the legal landscape? What’s going to happen when new consumers come online right? I feel like in a way the illegal, legal market and the trends and the patterns that we see in dispensaries in buying behaviors and purchasing behaviors they’re very, very skewed because I actually believe the majority of the market but in the 90 plus percent hasn’t even entered yet to the legal landscape.

So what’s going to happen when all these new consumers come in and when other demographic comes in and older people come in and baby boomers come in? So it’s like this industry is going to change a lot both in what the consumers want, what the legal landscape is going to be, and I think for us being adaptive and nimble and definitely pivoting along the way has been critical. I think the biggest pivot we’ve done to date has definitely been refocusing our business from direct to consumer to wholesale; selling to dispensaries and that was kind of a challenge to overcome in itself and figuring out how do we adapt the team that we currently have to the new kind of set of products and services. So yeah I mean you’re spot on with that question.

Matthew: How do you get the dispensaries to care about your product? I mean they’re getting a lot of pitches all the time and they have a lot of different things to show and there’s limited counter space and retail space. So how do you get them to care about you and to make sure they show customers that walk in Flow Kana?

Michael: Well I think to be successful in business and really in life Matt you really have to take care of your relationships. You really have to foster deeper and more meaningful relationships and with our dispensaries we don’t really just treat them as a vendor relationship. To us we see them as partners. It’s like how do we allow; how do we get Flow Kana to grow in your dispensary and how do we take you to grow with us? So a lot of what we do is we actually spend a lot of time with our marketing team and our sales team with each client figuring out what are those strategies that will help you reach your goals and help us reach our goals at the same time and I think I firmly believe that business is about win/win and I think if you build; if you win at someone else’s expense then you really haven’t created any value. You just created kind of a zero sum game and I think unfortunately to this date because cannabis has been in this black market and has been under prohibition a lot of people have put those short term gains over the long term because there’s been no clarity, there’s been no visibility to what the long term is going to look like and I think now that we get into a more regulated marketplace and a more stable marketplace I think it’s really important for people to start switching that mindset from the short term to the long term. And how do we build the relationship that I don’t just sell a couple of jars of Flow Kana to you today? How do I sell a couple jars to you from Flow Kana for the next ten years?

Matthew: Right.

Michael: So I think when you go into a relationship with the intent of being a long term win/win it really changes the game and that’s kind of how we approach our partner dispensaries.

Matthew: Michael I want to transition to a couple personal development questions if we can.

Michael: Perfect, yeah.

Matthew: Is there a book that stands out in your mind as having a big impact on your life that you’d like to share with listeners?

Michael: Yeah absolutely. I mean I think personal development is something that I’ve taken very deep to heart from very early on in my life. I was very lucky that my mother was a life coach. So when I was growing up as a little kid I was twelve or thirteen and I was reading Deepak Chopra and Wayne Dyer and Tony Robbins and all these personal development life coaches and learning the tools and the strategies to grow yourself because I think it’s really funny because human beings are the one species in this planet that really have the choice to grow right. Every single object and every single thing on this planet has always; it’s unlimited right. A tree will grow as tall as it possibly can. The branch on the tree will grow as tall as it possibly can. The leaf on that plant will grow as tall as it possibly can to reach more sunlight and I think growing and expanding is always like a principle or the universe and human beings are the one element of it that really have the choice to even continue to grow as fast as you can or as long as you can or you could settle for something less.

So personal development is something that I really, really spent a lot of time with and I purposely leave a lot of time during my day to growth and in terms of books yeah well I could name my heroes really. The way that I approach my personal growth was I pinpointed in life the leaders and the people that I most greatly admire and the people and the leader that I would love to kind of be or be known as or called like and I think when you pick those people that you admire and you like then you study them like it’s the only thing you need to do. You go and you read all of their books. You watch all their You Tube interviews. You ask them questions online if they can; if they can answer and identifying those people that you want to be gives you a vision for how you can prepare for yourself and to be honest success leaves clues right and you can actually; there’s no secret mystery to how Steve Jobs got to where he got or Richard Branson got to where he got or Warren Buffet got to he wanted.

You can actually study what they did and you can actually learn from what they did and you can choose to make the same decisions that they did and at the end of the day life is about sacrifices. It’s about choosing what you’re going to specialize in and in terms of books yeah so one of my favorite business guru’s is Jim Collins. He’s got two books that are my cornerstone for business which are “Good to Grade” and “Built to Last.”

Matthew: Oh yeah.

Michael: Those are my two favorite books. I love “Think and Grow Rich” by Napoleon Hill. An amazing personal development book. “How to Win Friends and Influence People.”

Matthew: Oh yeah that’s a great one too.

Michael: (41:40 unclear) that’s one of my favorite books. I’ve also; I like marketing myself it’s kind of like my area that I really, really enjoy. So another person I really admire is Simon Sinek. He’s got a fabulous couple books. Obviously Steve Jobs also is a known marketing hero. I think more than; I think there’s definitely not a one size fits all recipe for like let me find a book that’s going to change your life. I think that decision is very personal. I think you have to choose who you want to be and or who you’d like to be. What skills you’d like to have, what characteristics as a person you’d like to possess, and then figure out the books that match that in the long way and you’ll figure it out. That’s kind of what my philosophy is around books.

Matthew: Is there a tool web based or otherwise that you consider indispensable to your everyday business or productivity?

Michael: Hmm interesting. Well internally in our company we use several productivity tools. I think probably amongst my favorite would be Slack.

Matthew: Okay.

Michael: Slack is an internal messaging tool for companies and you can very easily make groups and you can make channels. So you can have a marketing department channel group, you can have a sales department channel group, you can have a logistics channel group, you can have an everyone channel group. So I think Slack has been a really, really great tool to actually communicate internally with the company and it’s actually made I think my life much easier. That’s kind of one of my favorites right now for sure.

Matthew: What tool did Slack replace for you? Were you using something else and you transitioned to Slack?

Michael: That’s interesting.

Matthew: And you liked it better. I mean is it replacing instant Messenger or does it replace like a project management tool for you?

Michael: That’s really interesting because it’s like internally in the company we did not use a messaging service before Slack. So it’s kind of weird it’s like now I don’t see how I ran my company before without Slack you know.

Matthew: Okay so it’s in addition too it’s not a replacement.

Michael: It’s an addition. I mean I guess there are some competitors like Hip Chat is a competitor and we definitely used just email a lot so I think Slack replaces a lot of email definitely and we use Instant Message on the Iphone and what’s that but this was designed from the needs of a company inside and that’s been; and the product really shows for that.

Matthew: Well Michael as we close how can listeners find out more about Flow Kana online?

Michael: Okay so I mean there’s I guess the main source of information would be www.flowkana.com. Also definitely look us up on Facebook. We are constantly putting out original content usually around the lifestyles of our farmers and the people that we work with. Showcasing a little bit about their life. So yeah I invite you guys to kind of follow us on Facebook and really just read about us online. I think that’s kind of the best way to kind of stay in touch.

Matthew: Michael best of luck on Flow Kana and thanks so much for coming on and educating us today. We appreciate it.

Michael: Thank you Matt. I really appreciate it and I look forward to working more in the future.

Matthew: If you enjoyed the show today, please consider leaving us a review on iTunes, Stitcher or whatever app you might be using to listen to the show. Every five star review helps us to bring the best guests to you. Learn more at www(dot)cannainsider(dot)com/itunes. What are the five disruptive trends that will impact the cannabis industry in the next five years? Find out with your free report at www(dot)cannainsider(dot)com/trends. Have a suggestion for an awesome guest on www(dot)cannainsider(dot)com, simply send us an email at feedback(at)cannainsider.com. We would love to hear from you.

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Michael Steinmetz is the founder of Flow Kana. Flow Kana is looking to be the Whole Foods of the cannabis market.  Learn why cannabis enthusiasts are increasingly wanting to know where their cannabis comes from, who grew it, and under what conditions. Imagine being able to communicate with the grower of your cannabis to ask questions, with Flow Kana you can.

Learn more at:
https://www.flowkana.com

Key Takeaways:
[1:29] – Michael’s background and how he got into the cannabis space
[3:52] – Michael talks about what life was life in Venezuela
[10:44] – What is Flow Kana
[14:13] – Michael talks about the response to Flow Kana
[16:16] – Flow Kana’s packaging
[20:12] – The characteristics of the growers
[23:02] – The cost of Flow Kana compared to medium grade flower
[25:30] – Michael talks about Flow Kana app and ordering experience
[28:28] – Popular Flower strains
[32:05] – Where Flow Kana is going in the next couple of years
[33:48] – The difficulties in starting a business like Flow Kana
[37:10] – Michael talks about how he pitches to dispensaries
[38:59] – Michael’s book and tool recommendations
[44:14] – Contact details for Flow Kana

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