Trent Woloveck, COO of American Cannabis Consulting, walks us through their modular cannabis cultivation cube. This efficient use of space ( an extra eighteen lights) allows cultivators to create up to 250K more revenue a year.
[1:14] – Trent explains what American Cannabis Company does
[1:35] – Trent gives is background and talks about how got started
[2:43] – What is the Cultivation Cube
[6:31] – Trent explains how the Cube’s watering system works
[7:58] – Ideal customer for the Cultivation Cube
[9:12] – ROI on the Cultivation Cube
[9:59] – Pricing on the Cultivation Cube
[10:42] – Trent discusses other ACC products
[13:14] – How much money is saved by group purchasing
[14:21] – What’s in store for the rest of 2015
[16:36] – Trent discusses mistakes made by people new to cannabis
[18:04] – Trent discusses what makes a professional cultivation team
[20:40] – Contact details for American Cannabis Company
Matthew: Hi, I’m Matthew Kind. Every Monday and Wednesday look for a fresh episode where I’ll take you behind the scenes and interview the leaders of the rapidly evolving cannabis industry. Learn more at www.cannainsider.com. That’s www.cannainsider.com. Do you know that feeling when you sense opportunity, when you see something before most people and you just know it will be successful, then you're ready. Ready for CannaInsider Consulting. Learn more at www.canninsider.com/consulting. Now here's your program.
American Cannabis Company provides a wide range of B2B services and products to cannabis businesses including the Cultivation Cube. I am pleased to welcome Trent Woloveck, COO of American Cannabis Company to CannaInsider today. Welcome Trent.
Trent: Thanks Matt for having me. Looking forward to our conversation and congratulations on all the success and awesome individuals that you’ve had on the show so far. Pleasure being here and looking forward to following in their footsteps as well.
Matthew: Thanks Trent. Now Trent to give a little background, what is American Cannabis Company do?
Trent: So American Cannabis Company is a fully integrated business 2 business solution. We provide full service consulting and management as well as provider of proprietary and preferred products specific for the cannabis space.
Matthew: Okay. And what’s your background? How did you get started in the cannabis industry?
Trent: So my background, I come from a Fortune 19 Healthcare Company doing finance, sales and supply chain management for them. I saw a huge gap in the industry around the ancillary product side of the house. And after having a brief discussion with having my existing company provide the services, they were not willing to do that. And so I took the business opportunity to then start what is now our products division, The Trade Winds, and really bring that to (2.12 unclear) for the cannabis space.
Matthew: Now I want to start with the Cultivation Cube because it’s still so fresh in my mind. A special thank you to Dixie Elixers. Last week Trent and I were able to do a tour through Dixie, and Trent showed me the Cultivation Cube they have there. And it’s really interesting growing situation that they have going on there. I’m going to let you talk about, Trent, what it is the Cultivation Cube is. Can you introduce that concept so people can kind of visualize it?
Trent: What we’ve been able to do there as they’ve been building out this state of the art facility is be able to bring to them a solution from the cultivation side of the business. And so with the Cultivation Cube it is a fully outfitted, recycled shipping container that is ready to roll for you once the license is awarded in the state. And so it’s fully outfitted with HVAC watering and then also being able to understand to grow in this environment. And so this is a solution that we’ve been able to implement with Dixie and looking forward to expanding that across the U.S. and up into Canada and other international markets as well.
Matthew: So give us a size, the general size and dimensions of the cube, and what you’ll find inside.
Trent: Sure, so what you’ll see in a lot of these new facilities that are coming online is a large commercial scale building. Our cubes can range from anywhere from 10 feet in length all the way up to 40 feet in length, by 80 feet wide by 8 ½ feet tall. And so what you’re able to do is fit 16 cultivation lights in one cube which equates to in a 1,000 square foot footprint, approximately 48, which then is a much more efficient use of space. In a traditional build out you’re only able to fit about 30 lights. So that extra 18 lights allows us to pull down an extra $250,000 of revenue per year.
What you’re also able to do with the cube is really take control and be able to leverage the vertical space within these buildings as well by stacking them on top. And so what we’re able to do at Dixie and we’re working towards right now is looking to be able to double stack the Cultivation Cube there within their facility.
Matthew: So there’s a lot going on inside the cube. It’s really interesting there. Can talk about the lights, the HVAC and the watery system?
Trent: Absolutely. So I’ll talk towards out standard 40 foot cube. Again we have what we feel are the best in class lights, the 1,000 HPS E Papillions. Within there we have a controlled environment thought a 5 ton HVAC which really is able to allow us to control the environment to those specific requirements to cultivate medical grade cannabis. And then once you’re looking into how or what you want to use as far as a methodology to cultivate, we’re able to bring in some of our other solutions such as 100% organic growing medium, which we then partner that with an automated gravity fed watering system that we can really reduce the overhead in efficiencies and effectiveness of a lot of the grunt work that go in from mixing (6.14 unclear) and hand watering plants and so on and so forth during a life cycle of a plant.
Matthew: So a little bit more on the watering trough. Can you just help us visualize how that works and how the plants take up the water?
Trent: Absolutely. So one of our solutions or recommendations, as ACC as a consultant, we’re solution agnostic, but we can absolutely make recommendations as to what we feel is best in class at the time. And we’ve found that solution with Auto Pots. And what that allows us to do is set up a trough outside of the cube and have it gravity fed for all plants within the cube. This flows through and really is a ground up feed for the plant. That way you have the strong root growth, and this really then allows the plant to come down and really search for that water when it’s necessary and needed throughout, again, the lifecycle of the plant.
Matthew: So the cube is pretty interesting because you can have a lot of flexibility and throwing up a growth space really quick if you need to. And I think what Dixie’s doing is a perfect example is if you need to get your plants going and maybe you have some construction going on, it’s a very helpful thing. Can you talk a little bit about that, you know, what’s an ideal type of situation, what’s your ideal customer for the Cultivation Cube?
Trent: So our ideal customer is a first off and foremost a licensed producer in a state that has a medical and/or adult use program put in place. So once they obtain that license, we’re then able to deliver the cub, you know, pretty much that next day. And so with that being said you’re able to really get your production up and running and get to market, you know, your brand, really mitigate a lot of that risk around understanding patient adoption. You don’t want to have to overbuild or underbuild. And so the cube really allows individual businesses to leverage and use the scalability of the cube in order to meet the demand and then also be able to produce that medical grade cannabis that each and every patient in that state and across the U.S. and the world would like to be able to leverage.
Matthew: So in terms of return on investment, how should a business owner in the cannabis think about what’s my ROI on a cube?
Trent: Sure. So you know what we’re seeing and really practicing in principle is tradition stick builds, they can take anywhere from 3 to 9 months to do. And so with the cube you’re able to actually get a full harvest in and done within a cube. So return on investment can range, depending on the pricing and just the lay of the land, you know, as short as 6 up to 18 months of the initial investment.
Matthew: And I know you said there they come in different sizes, but can you give us a general overview of what cost is on the cubes?
Trent: Absolutely. So what we’ve seen kind of taken into the market is a 20 foot cube and then a 40 foot cube. You know the 20 foot cube, you know, we’re looking at approximately $28,000 to $30,000 there depending on how much or how many you’re buying. On the 40 foot side, you’re looking at anywhere between $38,000 to $45,000, again depending on quantity bought.
Matthew: Now we talked about the cube, we talked about the trough system a little bit. Is there anything else in the product arena that ACC does?
Trent: Absolutely so on the proprietary side of the house and as an overview, and I’ll get into it in a little bit more detain on the preferred product side. But on the proprietary side we have two other really materials or products that we’ve brought to market in 2014. The first one being the SoHum Living Soil which is 100% organic, fully amended growing medium. A cocoa based soiled that really allows for the guesswork of mixing nutrients and hand watering and so on and so forth of the plant throughout its lifecycle. This takes all that away, and all you really have to do then is add water throughout the entire lifecycle of the plant. So we have that aspect.
As well as on the retail side of the house we have a child-resistant exit packaging that’s ASTM approved in being actually distributed out into the Colorado market right now called the Satchel. We’ve seen orders and a lot of positive feedback from these dispendaries on the product itself which has been very very exciting to see. So that’s on the propriety product side. On the preferred product side we’ve been able to put together what’s called a GPO or a Group Purchasing Organization. What this does is really aggregate spend or volume to preferred vendors that we feel are best in class for the cannabis space. So anything from lighting fixtures, the E-Papillon, the Gavetas, starting to look at LEDs, down to toilet paper and paper towels for your ongoing operations as a business. We’re able to be able to provide a low cost yet quality product delivered direct to your business moving forward. So we have over 500 products associated to that kind of full service supply chain solution.
Matthew: Now I’ve seen the group buying technique used for other businesses and it works really well. It’s a win/win, but people that aren’t familiar with it, can you give an idea of what kind of savings they realize by working with you in a group purchasing way.
Trent: Absolutely. So I equate it back to individuals that are going to a grocery store. So Matt if you and I were wanting to buy, in total 10 boxes of Kleenex, and you and I both go to King Supers and we each buy five, we’re going to pay you know pretty much retail price for those products. However if we decided to go to Costco and split you know the larger kind of pack, then I’m able to sell back to you at a much lower unit cost. While you’re saving money, the manufacturer’s happy because we’re bringing them volume and sales. And then it’s a win/win/win for all three sides.
Matthew: I got it. I wish there was a group purchasing arrangement for beer when I was in college. I think it could have paid for my whole college tuition, the savings.
Trent: It’s called Daddy Light.
Matthew: Now switching gears to services, what states are on the horizon for 2015? What are you looking at right now.
Trent: So we’re really excited from both the domestic standpoint, states like Maryland, states like New York, Florida, Ohio, Pennsylvania. The adult use market’s coming online in Oregon, Alaska, fingers crossed D.C. are kind of the big states that we’re seeing here within the U.S. But I also think there’s a huge momentum building in other international countries. So Guam recently passed a ballot initiative back in November. Jamaica, Uruguay, Spain are all kind of other international communities and countries that are looking to be able to bring this solution and program to their individuals within those states. And then also countries within Africa I know are starting to look at and really reach out to understand what it would look like for their communities as well.
Matthew: So that’s a good point. There’s people in other states and also in other countries reaching out to ACC. What are the questions they’re asking you, what’s the help they’re looking for?
Trent: Yeah so this more along the lines of wanting to understand what a state ran program looks like. Being able to leverage our expertise and our knowledge, what we’ve seen work for businesses, what we’ve seen not work for businesses and really help develop what a program should look like. That’s one aspect. More importantly they’re really wanting to understand from a patient prospective what is really a good and the right way to implement a commercialized program in a regulated market in order to ensure success of these businesses to produce medical grade cannabis for the patient’s said country.
Matthew: So what are some of the mistakes you see people make getting into the cannabis industry?
Trent: So sometimes mistakes, general mistakes are not really understanding the macro level of the environment, what it truly takes to cultivate at a commercial scale within a regulated market. There are a lot of variables that you know you can really control within what is “basement or smaller grow”. And then now with these limited number of licenses in all of these new states, you really have to look at it from a big Ag or manufacturing standpoint, and there are a lot of pitfalls when looking to be able to cultivate on that end. As well as, then on the dispensing side really understanding what it takes to bring patients into your business, as well as being able to service them with the best possible product so they keep returning to your business.
Matthew: Cultivation is key. I mean you really have to build a team and have growers that know what they’re doing. I mean how do you frame this to someone that’s reaching out to you? What should their team look like? I mean how big does it need to be for let’s say 40,000 square foot grow? I mean what do you have to do? What are some of the things you should be thinking about?
Trent: Yep in our big push and really what’s core to our ethos is being good Stewarts and Bellwethers of the industry. With that in mind we want to ensure that these new businesses that are coming for each state are looking to hire local. We’ve been able to really McDonald-ize and set up a streamline process to help these businesses get off the ground and succeed, but at the same time be able to come in, boots on the ground and teach individual, you know, either business owners and/or labors how to truly cultivate cannabis the right way to have that economic growth, to keep that tax revenue within the state and really drive economic development both within that city, that community, that county, but for the state and the patients of that program.
Matthew: Now looking out for the rest of the year, what are some of the opportunities that get you excited? Where do you think the biggest growth is?
Trent: Yeah I think, you know, as we kind of touched on earlier, a lot of momentum has been built behind these programs and these states putting legislation and ballot initiatives in place. So really excited about, you know, the continued expansion and momentum of all of these new states and international countries coming online, but also a lot of these new markets that have been awarding these licenses. I think the huge opportunity for 2015 and really over the next 18 months is the buildout the design and then transitioning into ongoing operations. You’re looking at 1.7 billion dollars of spend going towards the construction of these facilities and buidout of these facilities. And so from an ACC perspective we really feel like we’re in a very unique position to capitalize on a majority of that spend both on the products and less so on the services side and really focusing that on the new markets. But the product side is really something that we see as a big opportunity for us.
Matthew: Trent as we close, how can listeners learn more about American Cannabis Company and what you offer?
Trent: Sure so they’re on the web. They can go out to www.americancannabiscompanyinc.com. You can also feel free to reach out to me with any questions or concerns. My email is email@example.com. As well as we are a publically traded company. We are a fully reporting company on the OTCQB. Feel free to look up out ticker, its AMMJ, that will provide you all publically disclosed information and financials. The exciting piece is we’re rapidly growing right alongside with the industry as a whole and we’re in a unique position to where as a publically traded company that is focused strictly on cannabis, we were able to actually turn a profit in the third quarter, and so that’s been a very very exciting benchmark for us as a company as well.
Matthew: Trent, thanks so much for being on CannaInsider today.
Trent: My pleasure Matt.
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