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The cannabis industry is projected to hit $31 billion by 2021, and with its growing demand comes a desperate need for scalability.
Enter Jon Gowa, founder and CEO of Bloom Automation, LLC, a Boston-based company revolutionizing the way we harvest marijuana through robotics and automation.
Designed to “trim with the precision of a human, but the efficiency of a machine,” Bloom Automation’s robots use smart optics and proprietary algorithms to increase efficiency and cut production costs – an enticing proposition to the next generation of cultivation.
In this episode, Jon shares a little about the goings on at Bloom Automation and the importance of robotics to the future of cannabis.
– Jon’s background in robotics engineering and how he came to be founder and CEO of Bloom Automation, LLC
– The benefits of robotics and problems the industry is working to resolve
– The ins and outs of Bloom Automation and the technological solutions it provides the cannabis industry
– Price versus ROI and the increased production rates cannabis business owners and cultivators are witnessing thanks to Bloom Automation
– The 2-3 days of training required for new operators
– Challenges Jon is working to overcome during the company’s beta development phase
– Jon’s outlook on the future of robotics in the cannabis industry
To learn more, visit: https://www.bloomautomation.com
Matthew: Hi, I'm Matthew Kind. Every Monday, 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 cannainsider.com. That's cannainsider.com. Now here's your program.
As cannabis cultivators begin to see automation and efficiency as a necessity to keep their profit margins healthy in standardized workflow, they are turning to robots. Here to tell us all about cannabis robotics is Jon Gowa of Bloom Automation. Jon, welcome to "CannaInsider."
Jon: Thank you, Matt.
Matthew: Give us a sense of geography. Where are you in the world today?
Jon: We are here on Woburn just north out of Boston, Massachusetts.
Matthew: Okay, and I am in Edinburgh, Scotland.
Jon: Oh, wow.
Matthew: Yeah. It's kind of a cool place. Dark and rainy as you might imagine. But it's fun.
Jon: Some windy streets.
Matthew: Yeah. And Woburn, there's like all kinds of weird names for towns in Massachusetts.
Jon: That's right.
Matthew: I know Worcester is spelled like Worcestershire sauce, but it's pronounced Wooster.
Jon: Wooster, yeah.
Matthew: What's the deal with that? Can you give us any historical reasons with the naming conventions in Massachusetts?
Jon: I wish I could. They're primarily the New England style, but coming from Philadelphia myself, I haven't delved too deep.
Matthew: Okay. Okay. Now tell us, what is Bloom Automation at a high level?
Jon: Bloom Automation really is an agricultural technology and automation company. And we have a current focus here on automating processes in cannabis harvesting.
Matthew: Okay. And tell us a little bit about your background and journey, Jon, so we get a sense of who you are personally and professionally, and how you got into this business?
Jon: Excellent. I came in as a robotics engineer first at a company called Harvest Automation, and that's really where I got my grounding in agricultural automation and robotics, that is. And then I continued contracting for other robotics firms around Boston. But along the way, I've been designing robots for agriculture, designing robots for some other tasks. And I see a show on CNBC and it's called Cannabis Inc. Here We Go, and I see a lot of manual processes and pretty arduous processes that could be automated.
Matthew: I think if I had your skill set, the first robot I would design would be one to give me a shoulder rub.
Jon: Yeah, so that's second on my list.
Matthew: Okay. Now, I know Boston Dynamics is probably a robotics company most people are familiar with in the Boston area, people have seen images of a dog, it's like a robotic dog jumping up on wood platforms and people trying to knock it over, but it can self-correct and self-balance. Is Boston the place to be for robotics?
Jon: So I actually think that is true. Boston is the place to be for robotics, that's why I put my company here. And actually, the robot you're talking about, SpotMini, I'm not far into SpotMini because that was one of our projects when I was contracting.
Matthew: Okay. Interesting. And just out of curiosity, what other problems do you feel are like ripe for robotics that nobody's working on or very few people would think about? What are your pet ideas in your mind that you think like, "I could solve that if I could clone myself and there was three Jons"?
Jon: Interesting. There's a couple of things. There's some agricultural things in cannabis and beyond. But beyond cannabis primarily that I think really could use some automation. And then there's some adaptive things such as...like something I've been imagining is a robotic wheelchair, which obviously, is in progress. But I can imagine that being immensely useful just as a self-driving car would be. A self-driving wheelchair, I think, would be invaluable.
Matthew: Yeah. I agree. That's a great idea. So, let's jump back into cannabis here. Tell us, because we're in a audio medium here. It's kind of difficult to paint a picture of what Bloom Automation does. If we were looking over your shoulder, tell us what your robotics solution does for people with cannabis plants?
Jon: Excellent. So, I guess the primary thing to remember about a robot, if you're trying to visualize it, is that it's a stand-alone machine or a piece of equipment, and it doesn't actually have wheels to navigate around. Instead, the cannabis comes to it on conveyor belts. And the idea is, to give you a little picture, it's an aluminum framed machine with plexiglass sidings so that obviously, the operator is protected from the robotics inside. And it stands about 6 feet tall by 6 feet wide, and it's about 4 feet deep. And it has its own little conveyor, and the idea is that these robots would be paired up or even placed in teams of six.
And the primary goal of our robots is to trim the cannabis, and that's a process after harvest. So, the plant's been cut down and now the cultivator wants to separate pretty much all the parts of the plant, the flower, from the sugar leaf, from the fan leaf. And so we've developed algorithms that allow the robot to understand each flower, each sugar leaf and all the fan leaves where they are located, and then remove the sugar leaves and all the leaves. The primary process is known as trimming.
Matthew: Yeah. I'm curious now. How does that work exactly? Is there a camera looking at the plant and then there's some sort of algorithm going on, or how does that work?
Jon: You got it exactly. So, we have a conveyor belt that it looks kind of like a vertical conveyor that you would see at a dry cleaner. So, one that's transporting your clothes to and from the back of the dry cleaner. So, instead of your clothing hanging down off the conveyor, there are upside down branches of cannabis anywhere from 12 to 18 or 24 inches long, and those have been cut right off the main cannabis plant. So those actually come into the robot.
The robot has a pair of cameras, just as you said. The cameras observe the cannabis branch top to bottom and 360, and it feeds into an algorithm. And that's really where Bloom Automation's technology lies is an algorithm to segment or understand the cannabis branch and be able to say, "Okay, in this exact region or these pixels specifically is flower, then there's sugar leaf or fan leaf or a branch." And by understanding that, where it can feed another algorithm that determines a map to actually command the robot to go ahead and remove each sugar leaf, each fan leaf, but keep the flower intact.
Matthew: Okay. I can see that's why you say that's where your technology lies because if you can do that accurately and quickly, that's really where the value is.
Jon: That's right.
Matthew: How is that iterative process gone of kind of tweaking your algorithm to make sure like, "Hey, let's separate this fan leaf and this flower differently and categorize them differently." How is that process and journey been to get it to a point where it's accurate and doing the things you want it to do?
Jon: It's certainly been a challenge starting with the beginning of the company, I would say, in about April 2016 when we first started getting into it for hours before work every morning. And perhaps we had an algorithm at that point that could see the cannabis and see the flowers, but maybe it was only 20% accurate. So that's not too good.
And we've changed major architectures from just conventional heuristic or mathematical-based algorithms to now what is our primary algorithm is machine learning and specifically a convolutional neural network. And that's driven by supervised learning. So essentially, you need a ton of photos of the cannabis and of all different strains and varieties to understand and train the computer properly, train the algorithm properly to understand each flower. And in fact, we used 68,000 images.
But the key there is that these weren't just images of cannabis fed in at random. Instead, they were unique photos. So, each photo showed either a completely different angle of the plant or a completely different branch. And then we would have, when we are talking in the thousands, of course, you have all kinds of strains and indicas or sativas. But we are not just feeding them in at random to the algorithm, instead, each image is marked up by a computer scientist to say, "Okay, this is the flower. This is the sugar leaf. This is the branch on this particular image." And so the computer is going to start to learn from the human's clues, from our clues, what's flower and what's not.
Matthew: Okay. So let's say I am a cultivator or a business owner and I'm thinking, "Hey, this sounds like it could really help me out here if I had a trimming robot." How much throughput are we talking about that could be done like if after a harvest? How much can the robot do?
Jon: So the robot, it works in teams primarily because this robot is not completely autonomous. It does require an operator primarily to feed the conveyor and monitor the robots. To get your efficiency, the cultivator's going to want to have teams of robots, at least six to eight robots per operator. And at that stage, you're trimming about 1 to 2 pounds per hour, and that's a dry equivalent weight. And now, to compare that by efficiency, if you're looking at manual trimming, we're aiming to be about twice as efficient per robot as a manual team.
Matthew: Okay. What's the kind of price range for a robot, so we can start to think about capital investments and ROI and things like that?
Jon: The price actually is still in development kind of like the robot. But the aim is to get your ROI down to 12 to 18 months depending on your utilization. That is, are you going to use your robots eight hours a day, three to four days a week? Or are you going to really utilize these guys and run them about 16 hours a day because, of course, they're robots, and then your ROI is going to be substantially quicker.
Matthew: Okay. Yeah, that makes sense.
Jon: So we're trying to...
Matthew: Go ahead.
Jon: Sorry about that. Just trying to craft our...making sure the market price is crafted such that the cultivator receives the ROI they need.
Matthew: And so, for the operator, is there any kind of training to make sure they're up to speed like web-based or in person or anything so they can hit the ground running, and then be productive pretty quickly?
Jon: Exactly. So we estimate the training to really last about two to three days, and typically, like a day would be spent on the basics, basically operating the machine and it's a touchscreen user interface. So, not all that dissimilar to an iPad, except a little bit bigger so you could see it in a typical factory, or cultivation. But the idea being that it's all touchscreen controls and not only does it walk you kind of through it in the actual user interface, so it's more intuitive than most automation equipment.
But also, we spend a day on the basics and then another day actually with the equipment practicing with it. Getting to know it and making sure the operator is familiar with typical operation and with also the common challenges that might arise.
Matthew: Okay. Who are the type of cultivators that are kind of reaching out to you now saying they're curious or they want in on this, or probably part of a beta? Is there a profile? Are they kind of futuristic thinkers where they're figuring or imagining like a "Star Trek" type of cultivation facility, they want to have the cutting edge? What kind of problems are they running into like a high turnover with trimmers, or what are you seeing?
Jon: Exactly. I would say some of all of the above. There are some of the cultivators that really want the most advanced facility. They might not even be yet up and running. They're kind of planning out their most advanced facility. But that's not really the typical cultivator. The typical cultivator is in Colorado or Massachusetts or California and has 25,000 square feet or more of canopy.
So, we're seeing cultivations that are actually on the smaller side, and then we go all the way up to the bigger LPs in Canada who are also now seeing the demand for a higher quality product as opposed to what machine trimmers can offer in the case of Canadian LPs. And just as you said, the challenges with manual labor or human labor, particularly in trimming which is not a glamorous position and it's quite arduous. Those challenges are pretty acute and prevalent throughout the industry, so I think that's why we're seeing clients from all walks with this industry.
Matthew: Yeah. You know, I've trimmed plants before and after a couple of hours, your eyes are strained and your fingers, and you've got a little scissors and it's not fun after just a few hours. Even if you had friends and stuff hanging around, you're just like, "Wow. I didn't think this could be kind of an arduous thing." People talk about robots replacing jobs, but I think they're replacing the jobs we don't want to do.
Jon: Yeah. Exactly that, and they're not even such replacing them as perhaps making them a more desirable position, such as a robot operator. So, exactly.
Matthew: Yeah. Now, I've been involved in hardware technology, and it's very difficult. Unlike software where you can make a change and make it live in a matter of minutes because you're dealing with bits instead of atoms. What are kind of the challenges in building these robotic solutions and iterating? Are you waiting for components from China or elsewhere in the world? If you could wave a magic wand and eliminate your biggest headache and make this ideal in your mind, what would you do?
Jon: I believe the magic wand might get us through this phase that we're in right now, and that's the beta development phase and beta testing. So that's really where we see the last 10%, but the most critical 10% of this product. Just as you said, it's a hardware product and it's a hardworking piece of hardware. It's moving about at quite high velocities, so everything from...some wear or a breakdown is all...just like a car, is all in the realm. And then, of course, making sure that the algorithms are also performing properly and that the robot's staying calibrated.
So, that's why we're in a phase of the company and of the development of the product where we really call it the beta and the hardening phase. So, we expect this to last anywhere from six to eight months and incorporate some of our partner cultivations, and there, we'll get a lot of actual runtime on these robots to say, as you mentioned before, to go ahead and iterate them and bring them to a production spec.
Matthew: And what about maintenance? Is that difficult to do or will be pretty simple? I'm sure you don't have it all worked out yet, but what are you thinking it's going to entail?
Jon: We think that there'll be typical maintenance such as the wear items like the blade. It's a small blade cartridge about the width of your thumb perhaps and maybe twice the length. And so, it's a small cartridge and you kind of pop that out and pop it back in, and it uses a little Allen wrench to tighten it. So there you go as the primary maintenance. And then, of course, there's also an ultrasonic bath there that helps the blade self-clean, so that needs emptying every day.
But other than that, the higher level maintenance would be accomplished by our technicians. And just like any automation equipment or any mechanical system, there's routine maintenance. And then, of course, if it needs emergency service, we also have technicians that we're trying to train throughout the country such that they're available at a moment's notice.
Matthew: I'm curious. What kind of skills have you taken from your previous robotics work and have been really helpful here with Bloom?
Jon: That's great. So, working in agriculture, I think you're exposed to a lot of particular challenges, anything from the product itself, which is obviously organic and... In Harvest Automation, we work to automate the movement of marigolds or rosebush plants that were all in potted plants...potted containers. So there, we weren't observing the plants. We were actually observing the container. But here, we're observing the plant and so it's organic. But we did have those challenges at Harvest as well.
So there is everything from making a system that's reliable and essentially industrialized because that's how cultivation is needed. They're going to be using it all the time, and it's not always a clean process. You're trimming up the cannabis, of course. So making products that are industrialized, I should say, and reliable for the agriculture industry was definitely the unique skill that I think I gleaned from my experience at Harvest Automation.
And then, I did work for a product development firm, and that's where I contracted for like a lot of firms including Boston Dynamics, as we mentioned. But there, I learned really the skills that it took to both manage a small team of engineers, small and varied. So there, you would manage engineers both in your own office, in the headquarters in California, and also a team of engineers in China to help the production of your product.
So, learning how to bring a sophisticated engineering product all the way from concept through to mass production was definitely something from the product development firm that really, I believe, will help us here.
Matthew: Okay. And you were in CannopyBoulder, the accelerator program in Boulder for cannabis businesses. I'm a mentor there. But can you talk a little bit about your experience there, and also your pitch at Arcview, the angel investor conference for...I'm sorry, for cannabis, so people can get a sense of what that whole ecosystem's like and your experience with it?
Jon: Sure. I guess I should start the story kind of early in April 2016 when we incorporated. But then our first Arcview event, as you mentioned, was in August and there, we were definitely newbies, deer in the headlight kind of thing. But we brought out...
Matthew: Don't feel bad. I still have the deer in the headlight look. It never goes away.
Jon: I guess not. No. Same here.
Matthew: Sorry. Go ahead.
Jon: Exactly. So, we brought our little prototype and we certainly got some interest, but nothing crazy. But we did meet an investor who brought us out to Colorado. And through a series of awesome coincidences, I met Micah of Canopy, and that's how I kind of started my journey into the Canopy accelerator. But also, more as a whole, I was still working fulltime at the product development firm until Canopy said, "Hey, you should really think about applying." And, of course, I thought about it and said, "This is pretty awesome looking. I'll apply." When I was accepted, that really changed the game because now I could work on Bloom fulltime and though I had a group of seasoned mentors that could really accelerate the business.
To elaborate on that further, I would say that as things go, the accelerator and specifically, the Canopy accelerator definitely accelerated our business, for lack of a better word, which I think there may be one, but I don't know of one. And that was exposing us not only to the cannabis industry there in Colorado and beyond, but also teaching us business specific skills that are of course necessary in any business, cannabis or not. And then, furthering conversations with investors and groups, preparing you to pitch at groups such as The Arcview Group.
Matthew: You've kind of brought a few different interesting skill sets to the table. You've got the robotics background, and then when you stack that on with cannabis, it kind of creates a unique value proposition. I'm reminded what the author of Dilbert, Scott Adams. He says he wasn't the best cartoonist, but he was a good cartoonist. But he was also good at understanding kind of the funny ironies of working in a office. And combining those two skills allowed him to create this segment that people thought was really funny. So he was the funniest kind of like office humor cartoonist.
Jon: Very interesting.
Matthew: So, you're building the cannabis robotics specialization, which if you're going to focus on a plant, why not one that's really expensive because people can...
Matthew: ... afford the robot.
Jon: That's right.
Matthew: That makes sense.
Jon: Yeah. That's right.
Matthew: Well Jon, I have a couple of personal development questions for you I'd like to ask.
Matthew: Is there a book that's had a big impact on your life or way of thinking that you'd like to share with listeners?
Jon: Sure. So I think the book actually that has the biggest impact is one that came from perhaps around the high school age, and that was a book called "Rocket Boys," which was the inspiration for the movie "October Sky."
Matthew: Yes. I remember that movie.
Jon: Exactly. So that really hit home for me. At the time, I was a rocket enthusiast and also starting to get into robotics. But really, I think what was unique there was really the story of amazing engineering that was built with very few resources. It was more built with drive than with dollars, I would say. And that's something we try to take to heart here at Bloom Automation is to work leanly and really focus on the engineering of the product.
And then "Rocket Boys," it's pretty fascinating how the main character Homer, as he is, creates a series of rockets and iterates on it until he eventually is accepted into the NASA and wins a science fair, and this and that. So he makes a lot from a little. And I think in the cannabis industry, we're not quite getting as many dollars as, say, a typical robotics company might get in terms of venture capitalists or a investment. And to a degree, we're trying to keep it that way so that we work leanly and efficiently.
Matthew: Is there a tool besides Bloom that really improves your team's productivity?
Jon: Yes, absolutely. I would say I kind of considered this at great length and when I was forming the company. A tool beyond, of course, the common collaboration tools that we use like Slack or something of that nature, the tool that I really found helpful was what we call the stand-up meeting and the stand-up board, and that's something I brought from Harvest Automation.
And the stand-up meeting is a meeting we have. It's really a 5 to 10-minute meeting 3 times a week, Monday, Wednesday, and Friday. And it's in the morning every day and every employee is standing there at the meeting. So the goal of our time there is to give each team member an opportunity to speak for 30 seconds to a minute about basically the task that they're working on that day and the next day. The task they're focused on, anything that's challenging them and particularly, if there's any areas where we can help out. And then they go ahead and update the stand-up board.
It's a physical whiteboard in our office and simply a whiteboard that you list exactly what you mentioned in the meeting. So that way, if another team member wants to come by and say, "What is Sam working on? Oh, that's pretty cool. Maybe I can help out." And I hope the team members also use it how I do, and that's for self-accountability, just to look at the board and say, "Okay. Oh, I have these tasks. I have to make sure I get to them before the next meeting."
Matthew: Right. Interesting. And that's yielded a lot of fruit for you, then?
Jon: Absolutely. So, I would say a great example of it was before the MJ Business Conference, kind of getting all those pieces together and making sure we were on track time-wise. We both have the stand-up board and we tracked it digitally on asana.com, which is just a task management tool. But I would say the primary tool there is the stand-up board and making sure that we were hitting our dates, and then the stand-up meeting to track any misses.
Matthew: Okay. Now, I have one more question for you because you're in robotics and kind of machine learning and all these neural networks and things that most people aren't tapped into. When you're that close to an industry and that close to the technology, you can usually see around the corner a little better than the average person, like myself. When you look out two to five years, do you think there's going to be any kind of cool inventions or things that are part of our lives because of robotics or AI or neural networks?
Jon: So I think if you're looking at where neural networks and AI hits the robotic spectrum, and then where that hits the typical consumer in the next two to five years, I think the primary robot you're going to see around is in your garage and it's going to be the self-driving car. And it's a pretty substantial development. It means that with nothing more than cameras, perhaps a radar and some lasers, but nothing crazy or revolutionary on your car or too expensive, and a series of artificially intelligent algorithms, the car is able to be aware of everything around it. I mean, things that people aren't even aware of because our senses aren't as in tuned to driving as this vehicle that's just designed for driving. And I think that's going to be pretty powerful and pretty revolutionary.
And I do think it is where some cars, perhaps the Tesla, have some half systems in them, not fully autonomous systems. I do think Waymo, that kind of technology will be utilized to really push forward autonomous driving. And in fact, Google's developed the TensorFlow architecture which we use here at Bloom and they use for their self-driving cars. So, I can personally attest to how powerful it is.
Matthew: How do you use that, TensorFlow?
Jon: So TensorFlow is the neural network architecture that we utilize in the algorithm. So, it's the actual framework.
Matthew: That's pretty cool and that's like open source. Anybody can use that?
Jon: That's right.
Matthew: Great. Well, Jon, this was very interesting talk. I learned a lot here. For listeners that are interested in learning more about Bloom Automation, maybe being a beta tester or buying one of these when it's ready for primetime, what's the best way to find out more?
Jon: So, the best way is certainly our website www.bloomautomation.com where you can reach us through the Contact Us form. And then also, we have a Twitter @BloomRobots and an Instagram @bloomautomation, and we're pretty active on both of those.
Matthew: Are you going to be raising more capital in the future? Are people, accredited investors welcome to reach out to you as well? Or are you good?
Jon: Certainly. So we are raising a raise right as we speak, and accredited investors are welcome to reach out.
Matthew: Jon, happy holidays to you and thanks so much for coming on the show and talking with us, and good luck. I know you've got hard work ahead of you with hardware iterations, so I'm really interested to see when these robots are totally ready for primetime.
Jon: Well, Matt, I appreciate it and you'll absolutely see as they come aboard.
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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. Promotional consideration may be provided by select guests, advertisers, or companies featured in "CannaInsider." Lastly, the host or guest on "CannaInsider" may or may not invest in the companies or entrepreneurs profiled on the show. Please consult your licensed financial adviser 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.
Harborside is one of the oldest, largest, and most respected cannabis retailers in the world, and it’s expected to grow much bigger in 2019.
Led by CEO Andrew Berman, the company has played an instrumental role in making cannabis safe and accessible, and its stores are known for supplying the world’s best-curated selection of award-winning flower, concentrates, edibles, and other cannabis products from California growers and manufacturers.
One of Andrew’s first acts as CEO was to create a capital markets strategy for the company, and in so doing Harborside has raised over $25M in 2018.
In this episode, Andrew shares his insights, learnings, and what’s in store for the future of the cannabis industry.
– Andy’s personal journey and how he came to be the CEO of Harborside
– Harborside’s focus on California and the company’s multistage strategy going forward
– Harborside’s projections and the cannabis industry’s growth following the legalization of adult-use in California
– Andy’s growth tactics in California
– Harborside’s clean, sun-grown cannabis and how the greenhouse method is more environmentally friendly and cost-effective
– Cannabis business licensing in California
– Shifting trends in customer preferences for flowers, edibles, and concentrates
– Harborside’s $25 million capital raise and evolution from a medical nonprofit to a for-profit company
– Andy’s predictions for reduced banking restrictions on cannabis businesses
– Tips on how to break into the cannabis industry for those interested
To learn more, visit: http://www.shopharborside.com
Fresh off the heels of raising $25 million, the iconic dispensary Harborside has big plans. Here to tell us all about it is Andy Berman, CEO of Harborside. Andy, welcome to CannaInsider.
Andy: Thank you very, very much Matt. It's a pleasure to be here.
Matthew: Give us a sense of geography. Where are you in the world today?
Andy: Oh I'm in Northern California. I'm actually, truth be told, transparency, I am right now in a home office in Marin County. And just, you know, given that it's 8:00 in the morning here, about to head on the road for commute. I figured I'd just do it from here, it's nice and quiet.
Matthew: Oh, great idea. Marin is a nice place.
Andy: It is. It's a great part of the world.
Matthew: Well, I think most listeners have heard at least of Harborside, if they haven't visited it. So but for the people that don't know, can you tell us a little bit about what Harborside is?
Andy: Sure. Harborside is a...well, today Harborside is a vertically integrated cannabis company in California. It started about 12 years ago at retail. Its founders are Steve DeAngelo and his partner, Dress Wedding. They started the first dispensary in 2006 in Oakland. And today, we've expanded to a second dispensary, we've got a couple of more under construction, a cultivation facility, products, but vertically integrated cannabis operator in California.
Matthew: Okay. And can you tell me a little bit about your background and journey and how you got to this point, both personally and professionally, to be the CEO of Harborside? That's a long question.
Andy: It is. And sometimes I'm amazed myself. Good fortune, right? I'm a lawyer by trade.
Andy: And I practiced law for about 10 years, 11 years, and then went to go work for a client, not as a lawyer, but on the business side, and spent a decent amount of time in digital media and wireless and technology, and also a little, about a year in a venture capital firm. We were doing some cannabis investments. I had done some outside of California. I met Steve DeAngelo in 2016. We were introduced because we were gonna look at doing a project together. And then Steve was doing a friends and family round at the time. I did an investment in Harborside. And then in 2017, Steve asked if I'd help him. We had a couple of, oh, I would just say, you know, just business issues to work through and he asked if I would him think through all those things. I was happy to do it. And then he just asked me at the beginning of this year, "Would I come inside?" And I did. Began as acting CEO, and it worked really well for Steve. And it worked really well for me and the company. The board appointed me officially as the CEO earlier this year. And that's my story for Harborside. It's good fortune, right?
Matthew: Yeah. Well, Harborside's focus has been a little different than some other cannabis companies. You've focused strictly on California. Can you tell us about the strategy there?
Andy: Yeah, it's pretty...and I have, I'm glad you asked that, because I have been asked all year, you know, "What's your multi-state strategy?" And I just...California presents a tremendous opportunity. And it also presents, I would say, some very unique challenges that we're well positioned to address because we're here. If you look at market size, California is at least a third, if not more, of the U.S. market right now. It's the dominant cannabis market in the planet. The San Francisco Bay Area is equivalent to, you know, a number of other states out there. And it's projected to stay that way. Just some of the reports that have come out just in the last couple of months have the U.S. market being roughly, you know, $30 billion, $28 billion over the next three to four years, and a third of that is California, a $9 billion market, with 32% of the share. And that puts it, you know, the size of Nevada and Arizona and Florida and New York and Pennsylvania and Illinois combined.
So my focus, while we can, grab share here, continue to grow here. We are here, we know how to do it, and stay focused here. I think multi-state strategies make a lot of sense if you're not in California. But if you're in California, then you ought to grab a lot. There's a lot right here in our backyard.
Matthew: And how big is Harborside's footprint? You mentioned...I know there's Oakland and Santa Fe, and you have a cultivation center, but maybe you can talk a little bit about that.
Andy: Yeah, sure. So I'll answer that two ways, because I think you know that we have announced a reverse takeover and, you know, a merger into a Canadian public company. So we'll change very, very quickly. But today, we have a farm down in Monterey County. It's, we have a 47-acre parcel, we use about five acres of that to produce cannabis. We have two retail locations, one in San Jose and a flagship store in Oakland. We are actually under construction for two more facilities, one down in the Palm Springs area, one in San Leandro. And then with the, you know, for the California footprint with this merger and reverse takeover, we'll add another dispensary here in the Bay Area, we'll add another cultivation facility here up in Northern California, and, you know, a couple of more brands as well, too. So that is, you know, it's a pretty extensive footprint, right? And that's just..and again, that's a California focus.
Matthew: And can you give us a sense of revenue and how many customers are served by Harborside?
Andy: Yeah. Well, you know, I think it's fun to look at us historically, right? Because we've been doing it so long. We have over 250,000 registered patients and customers in our database, and over the last, you know, 10, 11 years, we've done over $300 million in sales. So that makes us, you know, a significant, you know, I think a significant cannabis business on a relative basis.
Matthew: Yeah. And it is. That is helpful to look at historical view. But now that we have adult use in California, how do you...when you make projections, and I'm sure, you know, investors, and everybody always wants to know about projections. How do you do that? How do you extrapolate where growth will be? I mean, it's an educated guess to an extent, but how do you arrive at that?
Andy: Well, I'll tell you, we are seeing about 1,000 people a day. And when I...and what we're doing is really looking at the customers that are coming in the door and getting instant feedback on their preferences and their likes. And we clearly have a different set of customers that are coming in the door today. We have our traditional customer. Remember, California was a medical-only non-profit cannabis collective regulatory environment, you know, less than 12 months ago. And it flipped on January 1 to adult use and medical use.
So we are all navigating a pretty complex set of regulations and trying to figure out, you know, where this will all be in two, three and four years. But what I can tell you is we do have new customers, and they think about brands. And of course, the Harborside brand is a very, very strong one. And then I just look at...we look at how they buy and how they purchase. We can tell where preferences are, and we can adapt our product offerings that way too.
Matthew: Okay. And you talked a little bit about your grow in Monterey County, but can you tell us a little bit about how you grow and anything you might do differently or interesting?
Andy: Sure. I'm very, very proud of that grow. I'll tell you it's taken us a while to get it where it is, because cannabis is...everyone says, you know, it's a weed and anybody can grow it. Actually, growing great cannabis at scale is not easy. So I mentioned we have the site down there. It is, it's 47 acres. We use five acres of it under a number of licenses. We are doing greenhouse growing, so these are purpose-built, retrofit and brand new greenhouses. When you're sitting inside of them, you feel very much like you're just in a room. They are environmentally controlled and we are testing a variety of strains at any point in time. We have a fantastic exclusive cultivation relationship with the Dutch consulting company, which is founded by Sjoerd Broeks. And Sjoerd really understands our environmentals and the best strains to be able to grow. And we have strains that are very traditional that folks wanna have, we also have strains that are available and that are unique to Harborside.
And in terms of, you know, production, look we're vertically integrated, right? So at maximum capacity, there's an awful lot we can do down there. We don't push it to maximum capacity, right? Because we're feeding...the goal for me in terms of our business model is to feed our stores with the flower that they need, and to also feed our ecosystem of partners, right? Whose products are coming back on our shelves, too, whether that is with flower or whether that is with, you know, feedstock that can go into extracted products as well, too.
Matthew: What was kind of the particular reason to go with the greenhouse method? Is it to save on electricity and get fresh air in there, and is the sun's light the best or? Can you tell us a little bit about that?
Andy: Well, that's it. I mean, and this very much Steve, right? The notion of having sun-grown, clean cannabis. Remember what Harborside has always...Harborside was offering products and sun-grown, clean cannabis since the very beginning. We pride ourselves on, you know, we were pioneers in testing of cannabis. When there wasn't a lab to test cannabis, Steve went out and founded an independent lab so we could do cannabis testing. But yes, it's very much about doing environmentally sensitive flower and feedstock production that is sun-grown, get the full spectrum of the sun's light to be able to grow the best cannabis.
Matthew: And so there's a lot of different kinds of licenses in California, or I should say a lot, but there's a few.
Andy: There's a lot.
Andy: You were right the first time, there's a lot.
Matthew: All right, the first time. Maybe you could go over those and which ones you hold and how you think about the licenses in California?
Andy: Yeah, it's very, very complex. You know, every step of the value...so California is so interesting, right? Because it was not regulated. And in many respects, that's a real challenge for us, for others that have been in the business. People forget that we've had this, you know, 1996, Prop 215 was passed and we began a legal cannabis environment here. And now, they're just putting a whole bunch of regulations. So every step of the value chain has regulations around it, from growing to production, processing, transportation, distribution, obviously selling, branding, labeling. I mean, it's just...it's very, very complex. Our licenses, we have 30 licenses. We'll acquire about seven more with the merger. But our licenses are geographically located at the farm and in the stores. And then inside of each of those are distribution licenses, manufacturing licenses, processing licenses, nursery licenses, cultivation licenses, packaging and retailing licenses.
So we are allowed to transport our own cannabis, we can distribute our own cannabis. Those are all separate licenses. We can have a nursery and create clones to be able to grow our own cannabis, we can grow our cannabis, we can process it, and we can sell it at retail. And each of those require separate licenses. It's very complicated.
Matthew: It is, it is.
Andy: It really is. And it's really challenged the industry in a lot of respects here in California as well, too, right? Because this all went into effect on January 2. And people scurried at the end of the year to try to get temporary licenses. And if you didn't get your temporary licenses, then you woke up and...we all woke up in January with actually a smaller market right? Because folks didn't get all their licenses. Now we're compliant. There's a massive market here. There's a huge black market here. And the regulations and the taxes have just given it a real energy boost, frankly. But if you're compliant, right, the number of retail locations shrunk in January, slowly creeping back up. The number of distributors in the state shrunk, slowly creeping back up, you know. And cities, even though we have adult use, there are a little less than 500 cities in the state, and there's probably less than 100 that actually allow adult use. So it's a market in transition, in flux, in growth.
Matthew: Now, Andy, how do customers' preferences break down in terms of flowers and edibles and concentrates, and any shifting trends there, or has it been pretty consistent?
Andy: Shifting trends, Matt. And we were very, very surprised by it. And I don't think...look, geographies are a little bit unique. Right? So I know that there are retailers around the state that have experienced something a little bit different than what I'm about to share. But I would...you know, 18 months ago, 2016 and early 2017, and before that obviously, right, folks loved flower, we were selling a lot more flower. Two thirds of our product was flower. And folks are smoking less right now. Flower sales are about a third of our business. And what you've seen over the last 18 months in particular are the rise of oil-based products, whether those are, you know, vaporizing pens or vaporizing devices, or extracts, and of course, edibles. Right? And a lot of low-dose edibles as well, too, right? Where the unit, even though the state allows packaging of 100 milligrams, and up to 10 milligrams per unit, a lot of folks liking these, you know, two to five-gram doses that they can learn to use, right? Truly in the go low, go slow environment.
So edibles are probably 20% of our business today, oil-based products, and in particularly, these vape cartridges, right? Convenience items. And discrete items, probably another 30% of our business. So when you think about, you know, 80% of our businesses is flower, cartridges, oil-based products and edibles, that's a shift, right? That's a shift.
Matthew: That is.
Andy: It's very investing. I have to say, Matt, it is very, very interesting in what, you know, for a store like Harborside, seeing the people that we do, we get instant feedback on which products are liked and what kind of preferences people are experiencing.
Matthew: Now, I know Harborside has a reputation, you know, for being transparent, kind of leading the legalization front and leading in a few different ways as a name and a dispensary. But now that adult use is passed, how do you think Harborside's tact and direction and brand is going to change and evolve?
Andy: Well I hope it doesn't change or evolve much from what it's known for. We have always been about trust and choice and value. And we've prided ourselves on being a trusted source of clean cannabis, again, from the very, very beginning, right? We couldn't find a lab, Steve couldn't find a place that would test cannabis. And so he created Steep Hill labs, and it's an independent lab to look at that. So a place to come get, you know, trust that you're gonna get a good product, a quality product, a choice. We like to have choice in the stores. This is not...we have not created, you know, a Patagonia shop or a Lucky Brand store, where you're coming in and only getting our brand. We have our products, we have a few of our own brands, but we want people to come in and know that we're purveyors of very nice cannabis and there's a variety of choice out there, and of course, value right? We are not the cheapest company on all products, but we always have something there that can provide good value to a customer as well too.
So I hope those values around trust, you know, I hope those missions around trust and choice and value stick around and that we remain known for that, right? Just more of it, right? More retail locations.
Matthew: As you look out into the future and you see kind of a fiscal crisis on the horizon or what appears to be one for California as there's more expenses than revenue, maybe a demographic picture where there's a very small or actually a large group of very wealthy people, but the majority, perhaps not so wealthy, and a lot of people leaving the state in many ways, do you see Sacramento dealing with the fiscal health and kind of the demographic and migration shifts of California in a meaningful way?
Andy: In some ways, yes, and in some ways, no. And you've absolutely, you know, hit spot on the issues that a large state has. I don't think Florida, any different, lots of people populating it. Arizona, New York, California, these are big, big states. I think Sacramento's, you know, what they're doing with cannabis and trying to capture some revenue and putting it into the coffers is smart. I think they continue to struggle on the education front. I think the UC system, you know, at the post high school level still remains an excellent system, but it too struggles with rising in-state tuitions in order to maintain its academic standards. And on the education front, I have concerns also just in the public school systems, right? Very much ZIP code driven on where you're gonna get the best education.
And it hits home for me, obviously, because I do have, you know, I've got four kids. I've even got one that's a teacher in a very challenging school district here in the Bay Area. And it's sad because these are kids that need great teachers, need great, great teachers. And she earns very, very little. I mean, this is a Berkeley Phi Beta Kappa grad who is, you know, really giving back to the community. And her siblings, you know, her siblings love the kids, but she's got a sibling's gonna earn, you know, twice what she earns coming right out of college. Right? Just going into a different skill. So education I worry about with the state, and I don't know how they're gonna solve it. Housing, very, very difficult, right? Getting affordable housing here in the state. On the other hand, they are finding some ways to do some of the infrastructure repairs that California definitely needs as well, too.
Matthew: Okay. Can you tell us about the recent capital...
Andy: Probably more than you wanted, but [inaudible 00:22:34]
Matthew: No, no, I actually could talk about it quite a bit because I'm really...
Andy; Yeah, me too.
Matthew: I'm wondering how, like, I look at this, and it just looks like a big fishing knot. Like it's all gnarled and a mess. I don't know how it's gonna be fixed.
Andy: I mean, I don't know how much you know about me, I was...I mean, I've been very involved in my local community. I've been the mayor of Mill Valley, California, twice. I really believe that the only place things are getting done truly in America right now are at the local level. So I'm a very local, local mindset here, right? That we have to fix things at the local level because in the big picture, you know, Sacramento and the federal government just can't do what needs to be done. And so I do think about local level and local support and local funding. So this stuff, you know, you asked me a question, you know, edit it as you want, but you hit something that's very near and dear to me. And the only way to really fix some of this stuff is for people to get involved, not get paid for that, and work it at the local level.
Matthew: Yeah. Well, let's switch gears to your capital raising and what's going on with the reverse takeover and everything. So tell us about the recent $25 million raise and then what's going on with the reverse takeover?
One of the other things that I learned in the whole capital markets approach is, you know, folks have shifted very, very quickly. The investors that...when I joined Steve as an investor, I didn't particularly worry about the fact...I wasn't thinking about whether this was a plant-touching or non-plant-touching business, but we had created a services business so that we could have investment for folks that wanted to be in a non-plant-touching business. And of course, by this year, the world has shifted, folks are more comfortable investing in plant-touching and non-plant-touching. But what they've also gotten in a more traditional sense is you wanna be able to figure out, "Well, when will I have some liquidity?" So that required me to raise money and also think about truly being in a capital market. That led to looking at mergers, looking at acquisitions, looking at sale of the business, looking at doing a public listing on our own, or merging into an existing public company. And Canada is where this is happening right now because of the schedule one controlled nature of the cannabis plant, so plant-touching businesses, which we are, can't go public in the United States. So that led to the decision on the RTO, being able to give investors a sight towards liquidity.
We announced a merger with Lineage Grow. It's a reverse takeover. They're not your typical public shell in Canada, because they came with some cannabis assets. That's why I like Lineage, right? We weren't just, you know, we weren't just bringing our own assets into it. We grew as a result of it, with an additional dispensary and another grow facility as well, too, and another brand. So that all made some sense to me to give our investors path to liquidity, doing it in Canada, because that's the market where you can do it in a public market, doing a reverse takeover, because it is a little bit easier than doing a full public listing on your own, and then choosing Lineage Grow Company because it was already in the cannabis space.
Matthew: Okay. And what's Steve DeAngelo's day to day role these days?
Andy: Oh, he's great. He helps me, gives me a lot of great cannabis advice. We're both on the board of directors. He is the chairman emeritus of the company. And Steve is doing what Steve does best, right? He is outward-facing for the company. He's a very, very big name in the industry. Harborside has great name, Steve has a great brand. So we have two great brands out there. He's doing his speaking engagements, he's doing media work, he is a daily advisor for me on cannabis-related pieces. When we go to market, Steve and I, we went on the road together to raise money. It's a very unique proposition in a room, a business focus, a cannabis focus, you have both of those sitting in a room in front of a table. He's very, very articulate, if you've ever listened to him. And he will continue to stay with the company in a chairman emeritus role.
Matthew: Any predictions on banking restrictions being eased for cannabis businesses in the next 12 months or so?
Andy: I hope so. Yeah. I mean, it's a hard prediction, right? We see, I don't know if it's in the next 12 months. I certainly expect it to be in the next couple of years. Right? What you see, our California's Treasurer John Chiang has already created a banking committee here to help do that here in California, maybe leveraging state chartered banks. You see things happening. State of Ohio, for example, in its medical cannabis program, has created a safe harbor for banks, Ohio state banks, to not be criminally prosecuted for working with, you know, working with local operators. So I think it's gonna have to be state driven at first. There is some legislation, obviously, pending in Congress to ease that up. So I don't know if it happens in 2019, but I certainly expect it to happen by 2020.
Matthew: Okay. And if you had to pick a market besides California, what would it be?
Andy: Well, I pretty, I mean, I would do western state adjacencies here. I've already started looking in Nevada and in Arizona. We do have two small dispensaries that we're acquiring in Oregon through the Lineage RTO. And that helps me in time zones, it is similar regulatory environments with medical and adult use, and sort of that western state alliance. A lot of the western state operators at some of the states' attorneys generals out here are already talking with each other about how you work with maybe the STATES Act that's pending in Congress and allow some collaboration between and among these states, which are big cannabis states, you know, once you have some federal...once you're alleviated better at the federal level.
And by the way, all that's gonna come, it has to come with descheduling right? So I think the Farm Bill passing and hemp-based products now being legal, which was all announced yesterday, you know, you begin to see, you know, the iceberg or the tip of iceberg. And I think you're not gonna fix banking till you get, till this becomes descheduled. And I'm hoping some of yesterday's news begins to tip that, tip towards that.
Matthew: Now, Andy, I wanna turn to some personal development questions to help the audience get a better sense of who you are personally. With that, is there a book that's had a big impact on your life or way of thinking that you'd like to share with listeners?
Andy: Sure. I would encourage everyone...I love this book. There was, Larry Brilliant wrote a book called "Sometimes Brilliant" and I just happened to read it last year. And it was a good time for me read it. If you like history, you're gonna love the book. And if you enjoy a good spiritual journey, you're gonna love the book. On the history side, the backdrop of the book, Larry's a doctor and a leading physician at the time with the World Health Organization, does a lot of work with the CDC, has a number of TED Talks, and I happen to know him as well, too. And on the history side, the backdrop of the book is the eradication of smallpox in the '70s. You know, it's not that long ago that we had the worst plague that was still in existence and still sitting in India. So the backdrop of the story is a historical view of a group of doctors that actually finally eradicated smallpox from the planet.
Larry is on a spiritual journey at that time. He was a young doctor, actually finds himself at an ashram in India. That's how he met Steve Jobs, who was also studying at that ashram. So it's a book on the spiritual side, I have to say. It's a book about love and compassion and determination, you know, to get through all this, to get through the mission they were on. Lots about having faith and appreciating the fact that faith is, faith's best friend is doubt, which makes faith so delicate and tender. And about service, right? Doing good. And that's a lot of what Harborside's, you know, and it's a lot about me, right? Just joining my community and being a mayor and giving back and trying to do good even though it's a slugfest out there almost every day. So yeah, I enjoyed it. I thoroughly enjoyed the book. I really did.
And again, if you're a history buff, just learning about the eradication of smallpox, what a chore that was, and the odds, insurmountable. You know, it's a war against a plague. And it didn't happen that long ago. So yeah, "Sometimes Brilliant," great book.
Matthew: How about is there a tool that you use personally or as a team that helps you a lot with your productivity?
Andy: Yeah. I would say...I mean, I don't wanna sound trite here. I don't know..this is a technology-driven world and texting and phones and everything. I actually make people meet with me face to face. Tuesday is my "in the business day." You know, I don't take phone calls, I don't do email. This is when I meet with the managers, particularly the critical high-value people that are putting food on the table, the people doing production, the people doing sales, the general managers, will, you know, let's spend time together, let's talk, let's look at each other, you know, across the table. The other thing that I do just for the team, I minute the week every Friday. You know, when you think about investors and you think about how you look at businesses, where do you start? You look at, you know, show me what your board does, show me what your board's approved, let me look at your board minutes. I minute the week for the company for my key team every Friday, and just go over the week, the view from my eyes and, you know, what I've learned from the week and share it with them. I did that when I was mayor here. I used to write a little post in the local paper every Friday, right? Just tell the community what's going on in my head. And I think they're good tools. Right? They force me to look back, reflect on the week, what's important, what rises to the top, and what do people need to know about what occurred that week and where we're heading next week. So those are two big tools for me.
Matthew: Is there one thought or idea that you have that most people would disagree with you on?
Andy: On the business setting, I'll tell you, and I don't know whether it's...I still believe, and it's not that they disagree, but maybe it's a small d, right? You're the CEO of a company that's about to go public, there are decisions I have to make that are unilateral, you make decisions. I am still a very firm believer that there's an opportunity out there to have a discussion, right? To build some...to find a compromise among divergent views and think about this. You got shareholders and you've got founders and then you've got management sort of running a business. So I still try to find a way to listen to people and find compromise and build consensus. The problem is that takes time, so I find myself a lot, folks saying, "Andy, you gotta move faster. You gotta move faster," right? And so I'm trying to be on a personal journey, right? Balancing that way of doing things with the need to move very, very quickly.
Andy: And not everybody agrees with me on that, right? Not everybody agrees that I should be doing...you know, sometimes people they say, "You know, just make the decision and move on."
Matthew: Yeah. Now, I get questions all the time about, "How do I get into the cannabis industry?" Are there any recent hires you can think of where maybe someone came from outside the cannabis industry or did something that was valuable to get your attention and found their way into Harborside, or you saw them go elsewhere in the cannabis industry that you could share?
Andy: Totally. I think it's a great time to get in the cannabis industry. And I think it's a fantastic time to actually get in the cannabis industry if you're not in the cannabis industry. Because what we're looking for is some of that outside-the-industry thought leadership as this becomes a much more mainstream business. You know, our general manager in Oakland came from Target. Our general manager in San Jose came from Whole Foods.
I see people also...the second part, so yeah. So that expertise, the nice part is under a regulated environment, is that, you know, you could sell books, you can sell cannabis, you can sell, you know, you can sell clothing and apparel. At the end of the line, where Matt is purchasing some cannabis product, it's a retail experience. So if you've got retail experience, and know how to talk to a customer and how to answer their questions about the product, there's no reason why you can't come into the cannabis business, and I think there's a lot of opportunities there. On the folks that are inside the business looking to go elsewhere, definitely opportunity there too, right? Because look at the value chain. I just described a cultivation, and when you think about cultivation, it's growing and genetics and breeding and all the ag tech that goes around that, the environmentals in the systems and the soils in the systems, curing plants, curing chambers, right? Post harvest production, lots of interesting electrical stuff, mechanical stuff, engineering going on. And then, obviously, products and brands. This is where things are heading. Right? Consumer preferences, no different, right? Everybody needs to have an experience and an association and an identity with a brand and a product. That's what Harborside has tried to do. So that bad aspect of, you know, folks are...if they leave us, I wanna go work at that brand. Or I wanna go work in manufacturing, right? Processing. I'm interested in these oil-based products. I have a science background.
So I think yes. Right now, if I were telling somebody to come in, don't think about the fact that it's cannabis, accept it. You have to have a comfort level that you can be in the cannabis space. And I can tell you, I've had people who came all the way down to the last mile with me, and then said, "Oops, I suddenly woke up one day and realized I couldn't look my kids in the eye and tell them I'm working in the cannabis space." So if you can get around the comfort that you're working in an industry that is still involved with a schedule 1 controlled substance at the federal level, it's no different than anything else, right? The same skills can apply. And if you wanna get deep in a particular aspect of the industry, then there's more and more of those coming on. Look at the research side. We have a medical and research side, right? That's so fascinating. Just thinking about our own internal endocannabinoid system and how cannabis interacts with our own systems. Studying the plant. Because, there's a ...I find it fascinating. And if you're a lawyer, go practice law. Fascinating, interesting environment. Our general counsel came over from federal, former federal prosecutor, our tax counsel, former IRS prosecutor. Lots of ways to get into the industry. Don't think, you know what I mean, it's any other industry right now.
Matthew: A lot of good suggestions there. Thanks for that.
Andy: Yeah, you're welcome. Yeah.
Matthew: Well, Andy, as we close, how can listeners learn more about Harborside, visit your dispensaries, and find you online and learn more about investment opportunities, the RTO, etc., etc.?
Andy: Yeah, you know, I think most people today we have retail-facing websites I'm building a, as we speak, I have a couple of calls today, obviously, with the RTO, we're building a, you know, a true investor relations website as well, too. Do your Google alerts on, or whatever you're using on your alerts, for Harborside, Steve DeAngelo, we're putting myself out there these days obviously as well too. There are a number of conferences that take place, both business and cannabis related. And I would encourage people to do the tools that people use best and social media. You can follow us on Instagram, you can follow us on Twitter. You can follow Harborside Farms. Just go sign up on Instagram, follow Harborside Farms, just to see how beautiful that product is coming off the farm.
Matthew: Great. Well, Andy, thanks for, so much for coming on the show and talking with us. Really appreciate it. And good luck with all you have going on. You've got a lot of moving parts here and a lot of growth planned, so you're gonna be busy.
Andy: Yeah, it's busy. It's seven days a week. Matt, thank you very much. I wanna thank everybody also who just is taking...whoever is taking the time to listen. But thank you very much for thinking of Harborside and giving me this opportunity as well too. It's been a real pleasure.
Matthew: Oh, you are welcome.
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About Today’s Guest
Shanel Lindsay is the CEO and founder of Ardent Cannabis. Listen in as Shanel talks about her move from a traditional lawyer to a tech and cannabis entrepreneur.
Shanel is offering CannaInsider listeners $30 off her flagship device the Ardent Nova decarboxylator. Use coupon code Canna30 for $30 off. Learn more here:
Cannabis enthusiasst and committed patients are seeking out evermore ways to derive maximum impact from the plant. In the last couple of years, Shanel Lindsay and her team at Ardent have popularized a way to activate cannabis that is gaining a loyal following. Here to help us understand these promising developments is Shanel Lindsay from Ardent Cannabis. Shanel, welcome back to CannaInsider.
Shanel: Hey, Matt, thank you so much for having me. I'm very excited to be back. It seems like it's been a really long time.
Matthew: It has been. It's been about three years since you first been on, and your business has grown quite a bit. I want to dig into that. But before we do, give me a sense of geography. Where are you in the world today?
Shanel: Well, thankfully, I'm back home. I'm in Boston, and it's exciting to be home because we've been traveling a lot over the last couple of months. So I'm happy to be home for at least a couple of months.
Matthew: Good, good, I know with the MJBizCon, Thanksgiving, and a bunch of travel, everybody's feeling like they're in a time warp, and it's just time to chill out and relax and unplug. So I can totally relate to that. Now, you were on, as I mentioned, like, three years ago. But could you just give our listeners a sense of your background professionally and personally before jumping into the cannabis space?
Shanel: Yeah, absolutely. So I'm a Boston native and my background by training, I'm an attorney. So I had a traditionally legal career before I went into cannabis. I was a litigator. I represented clients like Sears and Pepsi in a number of business matters. And obviously, that training was really helpful as I moved into cannabis policy. I was an author of the Adult Youth Law here in Massachusetts. It's a very exciting time here in Mass because finally are retail stores are opening, and our cannabis industry is really coming into its own. But in addition to the legal side, I also had a very long history with cannabis before it became an industry.
About 18 years ago, my son was born. Believe it or not, he's going to college next year, which is really exciting for us. But back then, which is really, kind of, like, the dark ages of cannabis, I got an ovarian cyst after he was born, and I saw that there was a lot of promise in using cannabis products, making topicals, edibles, things that would help my pain and inflammation. And I started making those products and got a real chance to, kind of, understand what the hiccups and the problems and the issues are with making cannabis products, and that was really impetus for me founding Ardent and turning to making cannabis technology that would make it very simple for people to do these things.
Matthew: Yeah. Gosh, I really, you know, I think you made the right choice to get into the cannabis field instead of staying a lawyer. But at the same time, I mean, I've gone through some business law classes and stuff, and while I don't think a lawyer is the right fit for me, I will say the process that you go through in thinking about law does expand the mind into areas that it just wouldn't go to normally. Do you feel like that has, kind of, helped you with any lenses as you work in this industry?
Shanel: Absolutely. I would say being an attorney has been the biggest asset and a real tool for me. Not only the analytical thinking piece of it, but the ability to, as you said, play devil's advocate and look at things through a different lens in order to come up with some really great solutions.
Matthew: Yeah. Now, let's talk about decarboxylation because that's the central theme of what your device does, the NOVA. And decarboxylation sounds like something from high school chemistry and you want to, kind of, take the fangs out of that and make it something warm and fuzzy. So let's make decarb being warm and fuzzy. Shanel, how can we do that?
Shanel: Oh, I'm up for the challenge, Matt. So really what it is, it's this fundamental chemical process to activate THC and CBD. And what I mean by that is, in the raw plant form there actually isn't THC and CBD. It has this acid layer over it, and you need to remove that acid layer to get those cannabinoids that people are seeking, right? The THC and the CBD. And this happens through a heat process where that carboxyl group is removed to reveal the underlying cannabinoids.
Matthew: Okay. So you're unsheathing the beneficial goodies that you want so your body can use them.
Shanel: Yes, absolutely.
Matthew: Okay, okay. That makes sense. You know, I'm sure that you get the same questions over and over from people that are like, "Okay, you've explained your carboxylation to me, you know, but I have a question." What are those questions, typically?
Shanel: Well, it's a lot of questions and it's a lot of myths that exist around decarb. So it seems like a simple process, right? Removing this carboxyl group but the difficulty is in removing that acid molecule without damaging the underlying THC and CBD, and also to fully remove all of the acid molecule from all of your THC and CBD. And if you're not able to do that, and it does require an incredibly precise time and temperature profile.
Really a lab grade time and temperature profile, you're really leaving potency on the table, right? Or destroying available cannabinoids. And that is the real problem with decarboxylation. That's the problem that people are running into both at home and on the commercial side, is it is difficult to do this process correctly.
Matthew: Right. And how much more potency do you get out of a flower. It's the biggest reason, I guess, people are buying. There are some other benefits, but potency is the biggest. How much more potent can a flower become after going through the NOVA?
Shanel: So if you're talking about...using me for an example, I was doing this for over a decade, right? Making cannabis products, using my crock-pot, using the oven, and when I went to the lab, even after being an expert for over 10 years, I was wasting between 30% and 40% every time. And so our average user, and I think we're still pretty eschewed with people that have used cannabis before.
Our average user uses half as much cannabis as they used with their previous methods. When you're talking about brand new users, then you're talking about getting, you know, 80% or more, because again, we've seen people come through the lab who don't have experience using cannabis and they burned off all of the THC or CBD available. And so it really is a tool that allows people to have all the science there for them without having to really think about that part.
Matthew: Yeah. If you're in a state where you have, kind of, a sealing on how flower you can buy, that becomes much more of a problem that you feel more acutely and you want to increase the potency so you're not having to get as much, so that makes sense.
Shanel: Yeah, absolutely. And I think, you know, what's interesting to me is to see all the different types of people that are using the product. You know, we have over 30,000 people that have the device now? And it really is a mix between these brand new users, some of them being medical, some of them riding the excitement of, you know, new legalization. And I think we've done a great job at educating people about this important part of cannabis science and removing this myth that the only way that they can get accurate products is going to a store.
That there is the ability to use very, very little material and get very potent product, and that really is important especially for medical patients who are looking for potent products and often tapped out at a certain potency at the dispensary level, whether that's 100 milligrams or 200 milligrams. And it does get very, very expensive for people, whether they're using a lot or they're micro dosing and, you know, that's something that we want to solve too to make these kind of therapies very affordable for anybody who needs them.
Matthew: Yeah. You have people that want the maximum potency. There's people that want the better return on investment for every dollar they spent. And then those are probably the top two reasons, are there any other reasons that you hear from people that purchase the NOVA and why they buy it, control?
Shanel: Yeah, absolutely. I think the number one is, like, confidence in this step, and this comes from people that have been, you know, making cannabis products for 20 years, and these brand new people, that they don't have to worry about when they're putting an ounce in whether or not they're going to get the right result because, again, this is a chemical process. This is not something you can look at or see or see the material and determine whether it has been completed properly.
And so that confidence in this step is really important, the cost-savings, of course, I mean, using less than half that you used before is a big thing. And then discretion as well, the device is odorless. And so we would be able to, you know, be in a room together and decarbing and infusing and you wouldn't know that that was happening. And that's really important for people still, having that ability to be discreet. And then I would say the last thing is the versatility.
One of the biggest questions that we get still, and I think there's still a lot of confusion about this is, how to, after you activate, how to make the best cannabis products, right? How to make something that is going to have the effects that you want and be the type of therapy that you're looking for? And so people are very surprised when they realize how little they can actually use. And we're talking about people using less than they would use to smoke a joint or even pack a bull in order to make these, you know, really medicinal or wellness or fun therapies.
Matthew: Yeah, that's really cool. Now let's pretend that we're in your kitchen and you're showing us this device for the first time and how it works. I've held one and they're, you know, like a big, like a coffee bean grinder, if you would imagine a big one of those, like a big, you know, cylindrical...how else would you describe it for people that are trying to take a look at it?
Shanel: Almost like a thermos size, I would say.
Matthew: Thermos, okay.
Shanel: Yeah. It's like a decarb. And, you know, it's like your mom says, it's what's on the inside that counts, right? It's very simple looking on the outside and that's, you know, purposeful. It's very innocuous looking. It would be, kind of, among your other kitchen appliances and you wouldn't necessarily know that it was made for cannabis. And for the user, all they're doing is taking their plant material, whether that is their flower, whether it's keif or trim or concentrate, any of their plant starting materials, putting it in the device, putting the lid on the device, there's an internal lid and an external lid as well, and pressing the button.
Matthew: That's it?
Shanel: And they...yeah, that's it. They go away and do whatever they want to do for the next hour and a half to two hours. But what's actually happening inside the device is, there is a thermal core that goes the entire length of the device. So you're having this really fully encapsulating heating all around the entire core of the unit. And we also have twin sensors, now these are the most precise sensors on the market, RTDs. There's one sensor that is embedded within that heating mat and then there's also a sensor that is embedded within the inner cavity of the device.
And there's an algorithm, and the algorithm is monitoring those temperature sensors in order to create these very precise heating cycles that are laboratory grade heating cycles to fully activate that product. And so we're talking about a level of precision and control that is, you know, beyond any kitchen appliance or any appliance that you would find, you know, on the market. It really is, you know, bringing the lab into the home.
Matthew: That's great. It really sounds like something you would see in a hospital or something. I'm trying to imagine, like, at some point, you know, how the medical profession might use something like this. I mean, they seem to like to use oil more in capsules and things, but I mean, if they have this level of control and granularity, there might be a space for flower in the medical community. I don't mean medical patients, but actually like doctors, nurses, and hospitals, so.
Shanel: Yeah, absolutely. And in fact, we actually have a number of doctors' offices, both cannabis related and non-cannabis related, that recommend our product to their patients because of that ability to dial into the milligrams and to really have that control with the raw flower. And you mentioned though, kind of, oils and capsules and that really is, you know, kind of, the next frontier for us at Ardent is moving from, okay, now you have perfect activation, how do you now in one step without any effort get to that end product?
Matthew: Yeah. Let's circle back around here because I have a question about...you know, this is for an individual user or somebody that uses this at home. But what about a commercial setting where there is a need for decarboxylation on a commercial scale? What's available there?
Shanel: Yeah, absolutely. And I would say that this is one of the biggest questions that we've gotten, in addition to, how do I make products once I decarboxylate and activate it. This question of, when are you coming out with a commercial size version of the device, has been, you know, nonstop since we launched the product. And we actually have developed a commercial version of the device because, again, the same issue of activation exist on the commercial side of the industry. Right now, producers, manufacturers, they're using vacuum ovens, they're using commercial size ovens, but again, still the same problems with really, really dialing into a lab grade heating process. And so we have a commercial size version of the unit that will be coming out in 2019. So we're very excited about that. And we have some great partners for that but also looking for other beta testers for those units as well, so that producers and manufacturers can get this level of precision in their products as well, therefore, making those products more affordable for the end user too.
Matthew: Yeah, that's a pretty interesting development. I haven't really heard anybody talk about that, but I could see where, you know, if I'm a manufacturer, a brand, or a processor, my ears, kind of, perked up there, like, wait a minute, what can I do here? This sounds pretty interesting. Okay. So let's...go ahead.
Shanel: And our goal for that too is to make sure that we're hitting the right part of the market, right? Because we have a lot of these smaller producers, caregivers as well. So the first iteration of our commercial version is a five pound unit, and then we'll also have a ten pound unit as well. So I think that gives a lot of wiggle room for these manufacturers and producers of all sizes to come and take advantage of the technology.
Matthew: Oh cool. I think for anybody interested in being a beta tester, maybe we can, at the end of the show, we'll put a or Shanel can let you know how you can contact her at Ardent and figure out how to do that if you're looking for beta testers or...
Shanel: That'll be great.
Matthew: If you're interested in a commercial, you'll know when they're available. So I want to talk a little bit about infusion and extraction because it seems like as we're just hinted on, that's, kind of, the next step. Now, most people buying a NOVA want to decarb flower, I would say probably the majority I would be guessing. But how about extractions and making capsules or making salves and doing things at home, is there any way to do that something in addition to the flower?
Shanel: Yeah, absolutely. So there's two pieces to that, so the first part is your starting material. So absolutely, you can activate flower. You can also start with a concentrate and activate that concentrate. So that is definitely a new trend. We're seeing a lot of people either making their own concentrates or buying concentrates from the dispensary and then activating those and using those to make different cannabis products, whether those are edibles or topicals or that kind of thing.
Shanel: Then there's the actual infusion in the decarboxylator making a butter or an oil. So we were inundated, I would say, with questions about how to properly and most efficiently take decarboxylating material and then create a butter or an oil for that. And just like with decarboxylation, infusion is really a fundamental piece of making cannabis products that really there existed no real science data behind it. And as you know, we're laser focused on science and data at Ardent because, again, it really is the only way to educate people and to myth bust, so to speak, because there are so many, so many things out there still that people really believe about making cannabis and cannabis products that it just is not true.
And so what we were tasked to do and what we had been doing over the last year or so is really digging into this idea of infusion and coming up with the answers for our customers and for the world about the best way to infuse. Because what you don't want is to do a precision decarb where you've maintained all of your THC and then go do an infusion process where you're leaving half of the THC on the plant. Like, you really need to know, like, just like with decarb, what's going in, what's coming out, what are the test results of what you're putting in, how much oil you're putting in, and how much you're actually able to extract into that end butter and oil?
So we were very excited to, just a month or so ago, release this testing data and people can see this on our website under our education section. And we have an infusion guide and a bunch of testing results to show that you can actually infuse right in the decarboxylator after you activate. So what the person would do is they would take their material, decarb it in one cycle, then add their oil and butter to the decarbed material and put it through another cycle in the NOVA.
And when it comes out, what we are showing is that an excess of 85% infusion rate, and upwards of over 95% infusion with certain oil, because it does matter what oil you're using because some oils are better for infusion than others. And so that was so exciting for us and for all of our, you know, owners because now people are able to go in and I'm talking about being able to make products that are more potent than you're able to find on a dispensary shelf using less than a gram of cannabis.
Matthew: It sounds like something from Star Trek or something.
Shanel: Yes. And so, obviously, people who already own a NOVA were really, really excited to find out about this second use for the device. A back by science, they can go in and they can see, and you'll see, when you take a look at the website, we did testings with as little as a half a gram of cannabis. And we were actually able to get, like, 93 milligrams into our ounce of oil out of a potential 100 milligrams, used half a gram. And then we were able to show how you can crank that potency all the way up to 700 milligrams per ounce. And that was using four grams of cannabis.
And so really showing people how they can make these quick butters and oils, how they can dial into the potency, that, I think, has been a really exciting adventure for us, and again, educating people. If I can say, one very interesting myth that we were able to debunk during that process was, "Well, if I just use my raw plant and I put it in with the oil, and I heat it up to the right temperature, it will all decarboxylate while I'm doing that oil." And we knew this to not be true, but now we have testing results to show that the oil actually acts as an insulator.
And so if you're putting raw cannabis material into the oil, even if you are heating it up to the right kind of decarb temperatures, you are not going to see really good and significant decarb, right? And so we have testing results on the website that show if you're starting with raw plant material and putting it through the cycle, when it comes out, it's going to be about 25% decarboxylated, right? And that might be useful for people who want a partially decarb process but that's a big difference between, you know, a full decarboxylation and only 22%, right?
Matthew: Yeah. So it's like you have a shield on the oil that has to be broken through and then a shield that's on the flower. So you have to activate both things in order to get the optimal outcome.
Shanel: Exactly. And that's why it's important to decarb before you do that infusion process. It also shows that infusing in the oil after the decarb is not damaging the THC, right? Because the oil is acting as an insulator because that was another big question we get, "Well, after I decarb, you know, am I going to hurt the THC?" Because again, that activation process is a very, you know, sensitive process. And you don't want to damage the THC afterwards. And so again, digging into the science, providing the kind of testing results that people can replicate at home is really, I think, the bridge to people being able to really use this plant in all the ways that it was intended.
Matthew: Now, people are getting a little more sophisticated and highbrow with cannabis and talking about paring things with cannabis. What do you think pairs best with cannabis?
Shanel: Yes. So obviously, the most important piece, you know, is getting your full potency of the cannabis, but after that happens, there really are a lot of things that can improve that therapy. And the first category are things that help with the bio availability of the cannabis itself, right? So there are things like good fat, lipozene, things that help the cannabis, kind of, jump over, if you are using oral or sublingual under the tongue use. Things that help the cannabis move from the plant into your bloodstream. I would say that that's one category. Then I would say that the second category of things that pair best with cannabis are really a number of vitamins, nutraceuticals, other healing herbs and plants, and things that have, kind of, strong antibacterial and antifungal properties, antiviral properties like mushrooms, for example, like ginger and other herbs. And so I really think the future of cannabis is incorporating cannabis into an overall health and wellness regimen that involves all of these other natural elements.
Matthew: Yeah. In fact, that's one reason I can easily see the cannabis industry growing larger than the alcohol industry because we're not only displacing alcohol here with a botanical that doesn't give you a hangover, but we're also pushing into the supplement and wellness and medicine arena. So all those other huge market categories are going to be cannibalized to some extent by, you know, cannabis and cannabinoids.
Shanel: A hundred percent. I am always amazed at how much crossover there is between the medicinal, the wellness, and the enjoyment side of the plant.
Matthew: Oh, yeah. So you have some Terp Capsule Kits and Terp Lotion Kits. What was the idea behind these? What was the genesis of the idea with that?
Shanel: So that's just the evolution of our product line, right? A lot of what we do is based on, you know, my own experience through the kind of cannabis lifestyle cycle, right? Now in my late 30s I've really, kind of, experienced cannabis and the products that people need from when they are, you know, in their young adulthood to all the way up through, you know, I guess where I am now, middle-age, and also coming from the demands from our customers, right? And so, like I mentioned, once people have this precision decarb, right? And now they have the ability to infuse and make these oils, there's still this, "Well, how do I get to that end final product that I'm looking for to treat whatever I'm looking to treat or to have the enjoyment or experience that I'm looking to have?"
And so for people on the medicinal side, our capsules are essentially vitamin and excipient formulations that have a place in them for the activated cannabis to slide into one side. So it basically allows people to make these instant pharmaceutical alternatives to rival Ambien or, you know, whatever else they're seeking or whatever other vitamins that they're taking. And it includes excipients and pairings like the ones I mentioned above. Things that have like immuno support, nutritional supports, and in the same vein, we have lotion kits. So they have a base with pain relieving or invigorating lotion. And also come with the bit of oil that the person can infuse right in their device and then mix simply to make this, again, dispensary grade product that's very affordable for them, that allows them to take whatever strain or material that they might have lying around in order to make this really, really high grade product.
Matthew: Oh, yeah, I can see that. It seems like a natural extension will be very useful.
Shanel: Yeah. And we also have edible kits as well. And those are, kind of, on the fun side. We launched a goat's milk caramel kit for the holidays. And, you know, people should definitely look to see in the future from us a lot of more medical applications including suppositories, patches and the like, and, you know, our goal is to allow people to really make any product they can think of on the dispensary shelf. We're a fraction of the cost in no time at all, and even the ability to make products that will never be on the dispensary shelf. And really again, going back to that versatility that people are looking for that also allows them to explore the use of this plant in ways that they wouldn't have imagined.
Matthew: So there's definitely probably some truth that your customers are people that like to, kind of, tweak things and see how far they can take things and stuff like that. Not everybody is like that, some people are like, "Just give me whatever off the shelf." But you find there's a do-it-yourselfer or like a MacGyver type attitude of your purchasers.
Shanel: So I think there's some of that. There's certainly people like me who just love this plant and love experimenting with it. But the end goal is that this is simple for people that have never even used cannabis before. Because there are just a lot of people that can't access a dispensary for as much as they need to. And so when you look at our kits, and we call them kits but really it's, kind of, just activating your butter and adding it to it. And so the idea is that it is very little effort for them, but certainly those people that are, kind of, into taking it to the next level, find a lot of joy in experimenting outside of the kits as well.
Matthew: Now, I want to ask you some questions about capital raising because you mentioned you've sold 30,000 of these and that's a lot of inventory. How has the capital raising process been for you, you know, from all the way back when we first did our first interview till now? I mean, how has the response changed? What's your experience been? Has it been challenging?
Shanel: Oh, yeah. I mean, in the beginning, you know, when we first spoke when it was an idea and a prototype and baby units, it was almost impossible for me to raise money. And in fact, everything that we've done, so far, has been done on a less than $600,000 cumulative raise over the years. And I'm really proud of that because if you look at, kind of, traditional technology companies, that is not the way that people are able to launch a product and get successfully to market. But now, things are a bit different, you know, we are, you know, selling millions of dollars in inventory a year now and are profitable as a company. And I'm actually really, really proud of that as well. We've been profitable since last year.
Shanel: And so now things are a little bit different. We have the business fundamentals essentially that investors are looking for, you know. We have a brand. We have IP. We have sales. We have longevity in the marketplace. And so there are a lot more options for funding right now. Now for me, it's about finding, you know, the right strategic advisors that will help me, you know, really take this company to the next level in this rapidly growing industry as we know.
Matthew: Yeah. So you recently started or you did another pitch, I think, in Vegas. How did that go?
Shanel: Yeah. So we actually have just opened a new round of funding, we're raising $3 million to launch the commercial version of the device. We finished development on a number of things, including the commercial version, including our capsules, including our line of topicals. And so, yeah, the 3 million will really help us become even more of a global presence than we are right now and to launch all of these really high demand products that are...you know, customers, frankly, have been waiting for a while now, especially the capsules.
Matthew: Yeah. Now, how has it been creating a product that has electronics on there that heats to a high level. I mean, your background's as an attorney, how do you bridge the gap from a legal mind to understanding the electrical components and iterating a physical product and all the different things that go wrong once you add electric and an on and off switch. I mean, could you talk a little bit about that journey? Because I know that this is a difficult thing. I mean, you haven't mentioned it, but I'm sure you've had a lot of blood sweat, and tears and sleepless nights over this type of thing. So please tell me.
Shanel: Oh, yeah. So in the beginning, so when I first started developing NOVA back in 2015, you know, at that point, it was just me and, you know, the great research and testing that we had done at MCR Labs to really hone in on the right timing and temperature profiles for this decarb. But then it was like, "Okay, well, how do I develop this device?" And for me, the lawyer training, the analytical training, the ability to really, really dig down and read, you know, copious amounts of very technical material and digest that, was incredibly helpful. You know, in college, my major was biological anthropology, right? So I've always had an interest and have a history studying, kind of, the biological evolution of humans.
And so, you know, science and that kind of thing were always very top of mind. So it was great to dig into this new area of electrical engineering and looking into the different types of heaters and sensors and all of these things. And so I was able to pull together individuals, electrical engineers, machining specialists, thermo engineers, and really able to work with each of them to develop the pieces of the device that I needed to pull them all together. And that was pretty risky because it really was me developing these individual pieces and then pulling them together into a device that thankfully worked, you know?
But at the beginning, certainly, there were a lot of, you know, pieces that were coming and they weren't performing correctly. Thankfully, we had the ability to go and do and have the lab very close and do all this testing in the lab, and that brought us to beta units. And once I was able to release the beta units, I was really fortunate to have a factory and high-level engineers now that help to tweak the device and continue to improve it and develop our new models and iterations and really able to develop those in conjunction with these consumable products that I mentioned, like the capsules and the lotions in order to make this really complete, sweet of useful products for the end consumer.
Matthew: Gosh, that sounds like a lot of different things pulled together there. Do you think being in Boston with the deep talent from MIT, Harvard, BU, BC, Northeastern, I'm sure there's a lot of other universities there. Think that was a big help for, you know, being in that geography for doing what you wanted to do?
Shanel: I think certainly there were a lot...almost everyone I sourced from originally for my beta units was in the Northeast. So absolutely having access to really, kind of, high-level manufacturing and, you know, those early partners were really, really important to me. And it's funny to think about that because that was a real drudge time. And I'm happy to, kind of, be pass the point of...I'm having to do that stuff all on my own now and having a really great team of people both on kind of the development side and the product side to help bring these visions to life now.
Matthew: A smart move just doing the one decarb unit first instead of trying to do a commercial and a personal at the same time because I can see where that would dramatically increase the variables and things you have to focus on. So, I mean, start small and then scale up, so well done.
Shanel: Thank you. And honestly, people say, kind of, like, the best businesses come out of a need. And when I was looking and bringing this, you know, my products to the lab to test, this was really just me trying to make cannabis products easier, better, more efficient, trying to use less product, trying to know what my dose was. And so it was a real personal mission for me to create this product that was for the individual person. Because I really wanted them to be able to have access to this plant, and I saw that that really wasn't going to happen. That there was always going to be this, kind of, gap between what the individual person could do and what they really needed and wanted.
Matthew: Yeah. Scratch your own itch. A lot of people out there listening are thinking, "What should I do? What should I do?" If you've got a deep passion and you want to scratch your own itch, you've come up with something, this is like a fairytale story, almost to that. So with that, Shanel, I'd like to go to some personal development questions. Is there a book that's had a big impact on your life or way of thinking that you'd like to share?
Shanel: Sure. So I would say there are two books and one of them is, kind of, like, on the business science side and the other is more, kind of, like, internal, personal. And the first one is "Mycelium Running." And this is a book by Paul Stamets, and he is a mycologist, and this is actually his sixth book. His other books are about, kind of, the really mind-blowing and amazing health properties of mushrooms.
Matthew: Oh, yeah.
Shanel: Yeah, it's awesome. This book, "Mycelium Running," is actually about how mushrooms can be used to really save our planet from the environmental destruction that we're seeing happening. And it's a lot about bioremediation and using mycelium that way, and it's a really great read. All of his books are amazing. And so I would definitely say that book has got me thinking quite a bit. And I'm just, kind of, like, the personal side, there's a book called "The Joy" and it's by the Dalai Lama and Archbishop Desmond Tutu. And it's really an interesting read from, kind of, both of these leaders about their perspective on, kind of, the keys to finding, like, lasting joy.
Shanel: And so Desmond Tutu actually spoke at my college commencement. And so, you know, his words and thoughts have, kind of, been with me for quite some time now. And that book is a really good one.
Matthew: It's amazing how something like that can, you know, get infused into your mind speaking of infusion and then cascade and color all these other things you do. That's great recommendations. The first time hearing both of those. And "Mycelium Running," you know, I've been hearing about, like, reishi mushroom and all these different things like ways to invigorate your health with mushrooms. That's something that's, I think, really interesting and powerful. I'd like to learn more about that. Is there any mushrooms you use personally for teas or anything that you...for health at all or no?
Shanel: Yes, absolutely. And certainly, like I mentioned, we will be incorporating these into our capsules and some of our other products as well. So stay tuned on that, but certainly reishi is great for breathing and your bronchial tubes and also, kind of, like, relaxation through, you know, better lung health. Lion's Mane is great, that's, kind of, something that you want to drink in the morning time. It's great for brain health and function. And there's so many more mushrooms there, but I would say, those two are two of my favorites. And, I mean, looking at the data, and again, you'll be seeing more of this coming from Ardent. But looking at the information and the data about the ability of mushrooms to support our immune system to fight viruses, to fight pesticides, you know, it's just amazing. They are truly an organism that has been around for so long and we really have evolved with mushrooms. And so their ability to impact our lives and health is really so underestimated and I'm excited about what's next for that.
Matthew: Yeah, me too. Now, is there a tool that you or your team use that you consider vital to your productivity that you'd like to share?
Shanel: So I think for us, kind of, just like the basic business tools of staying connected and tasks staying in order, so I think, like, Asana is really useful for us. It's something that we use as a team to keep track of different projects and for people to communicate with each other. It's been quite useful for us over the last year or so.
Matthew: I took a class in college and it was called Business Writing and the teacher or instructor said, "Here's what I'm going to tell you about writing emails." He's like, "The subject of the email should be everything that person needs to know in a short bullet form. And then their action item should be, like, the first thing when they open the email, so they know what it's about and what their action item is, as most people won't read the rest." I was like, "Oh, that's pretty good. I'm glad I heard that." You know, because there's all these different ways of communicating with your business and like Instant Message and like Chatnow. And it's, like, "Hey, I might read three paragraphs of Instant Message and I still don't know what's being asked of me." Do you ever feel that way?
Shanel: Yeah, absolutely. And that's why I think it's important to have, kind of, like, a central location, where, like, everything is and it's actually pinging you to, kind of, follow-up on things because it is really difficult to, kind of, across all of the platforms and, you know, keep that continuity.
Matthew: So last question here, Shanel. What is the one thought that you have that most people would disagree with you on, so something maybe controversial that's not intuitive? This is actually a Peter Thiel question that he asks people. So he's, kind of, a deep thinker and I like this question because we get to draw out something that just is not totally obvious.
Shanel: Oh, I don't know. I guess it's a deep-thinking question that might have a shallow answer from me because I think that probably the most disagreeable thing that I could say is that, you know, French fries and ice cream go together and make a great combo. So I don't think too many people would agree with me on that. But I don't know, I think that, you know, for every dissonant thought, there is certainly a large group of people that feel that way, whether they'd like to admit it or not. So I also think that's an interesting question to pose.
Matthew: So you're saying for an extravagant snack you will eat ice cream and French fries together?
Shanel: Yeah. For on a splurge day, it might not be what most people would choose, but I think it's a nice sweet and salty mix for me.
Matthew: Yeah. It's good to break up the monotony. Every once in a while, I will just stay up all night and read or do something just because I feel like I'm in a pattern that needs to be broken. And it's, like, everyone in a while have, like, a huge sundae or do something. Just be like, "I've got to break up the pattern here because it feels, like, you know, otherwise there's this herding, like moving into a rut." It's like, "I got to just do something different here, just for the hell of it."
Shanel: Absolutely. And that happens to me on the business side all the time and I was actually, you know, thinking about that earlier, you know, different strategies to, kind of, pull away from the day to day grind and do the, kind of, big picture thinking and planning. And so I'm going to add a sundae to my mix now when I do that.
Matthew: There you go, put some French fries on there. All right. Well, Shanel, thanks so much for coming on the show. We talked about a lot of the different products you have, the products you have now, but also the products you have in development. We talked about raising capital. Let listeners know how they can reach out to you to be a beta tester, if you're still looking to raise more capital and how to find your products.
Shanel: Absolutely. So you can find us at ardentcannabis.com. So it's ardentcannabis.com. And I love for people to reach out to me directly at email@example.com. So it's firstname.lastname@example.org and I'll look forward to hearing from you.
Matthew: Shanel, thanks so much for coming on the show and educating us about decarboxylation and also sharing your journey. Wish you the happiest holiday season and a wonderful 2019.
Shanel: Thank you so much, Matt. I can't wait to come on again sometime.
Matthew: Me too.
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Foria hits below the belt with their cannabis intimates. Find out why customers are so curious about this budding new market category of the cannabis industry.
Jon Brandon is the Co-founder of Foria, listen in as we discuss a wide range of topics.
– Defining a category
– Using Customer Feedback to Iterate
– Sexual wellness and invigoration with Foria
– Can cannabis help menstrual health?
Limited Time Offer:
Jon and the team at Foria Wellness have generously offered a coupon code for a limited time for 10% off their products.
Use Coupon Code: insider
What is the one company that comes to mind when I say Topical Vapor Rub for your chest and nose when you have a cold? If you said Vicks VapoRub, you're correct. I mention this because it's increasingly important to be the first in your prospect's mind providing a certain benefit. Our guest today, Jon Brandon, CEO of Foria has accomplished what Vicks VapoRub has done and captured a market category I call intimate cannabis. Jon is going to tell us about intimate cannabis products as well as some other exciting developments in the space that you'll definitely wanna hear about. Jon, welcome back to "CannaInsider."
Jon: Thanks, Matt. It's great to be back.
Matthew: Give us a sense of geography. Where are you in the world today?
Jon: I am speaking to you from Boulder, Colorado.
Matthew: Great. And I'm in Edinburgh, Scotland. For people that have never heard of Foria before, Jon, can you just give us a little high-level overview of what Foria is?
Jon: Yeah, absolutely. So Foria is a five-year-old company, we're a wellness products focused company, in particular, sexual health and wellness. And our mission is really to create plant-based products that help people feel both more pleasure and less pain in their lives, with, you know, an eye towards them feeling more connected and in touch with themselves, as well as the people in their lives. So we take cannabinoids and we use them for primarily non-psychoactive purposes.
Matthew: Okay. And for people that are not familiar with your background, you were on the show two and a half, three years ago. Can you just give us an overview of your professional background and how you got into the cannabis space?
Jon: Yeah, happy to. So professionally, most of my focus, prior to Foria, was in some combination of real estate, finance, and law. I did graduate work in both law and business schools. And, you know, what kind of got me into this opportunity was going through some pretty intense things in my life about eight years ago, including getting divorced. And, you know, really starting to ask myself a different series of questions, largely centered around what mattered to me, what did I really wanna put my time and energy into.
And I used to hold it that doing good for other people or doing good in the world, was something that was...you know, that was called charity or philanthropy. And, you know, maybe you write a check or you volunteer some time or something. And then there's business, and that was all focused on profit and building something that could make money. Living here in Boulder, I got challenged on that way of thinking, and you know, meeting a lot of people who are doing things in the world, both with a profit orientation as well as doing good in the world, and sort of bringing those two things into alignment with something that became a really important thing in my life. And so, I was looking for opportunities that had both of those elements present.
At the same time, my co-founder, Matthew Gerson, was himself kind of looking for partners to step into this opportunity. He had a notion of using cannabinoids for intimacy purposes, or sexual health and wellness outcomes. And so our two paths kind of collided at that point or crossed at that point, largely through the social entrepreneur community here in Boulder. So that's kind of how I got going on this path.
Matthew: It's funny, you mention that kind of, you know, multiple bottom lines, not just the Milton Friedman approach of, you know, shareholder value only, there's also this new bottom line. It's like how can I benefit my environments and my ecosystem. You know, like you had mentioned before, you know, writing a check to a charity is kind of like a one-time transactional thing. But if you can create this ecosystem with reinforcing virtuous cycles, it can have a much more sustaining and powerful impact for society. So it's nice to hear this way.
And I am definitely the first to say like I don't always...you know, it's not always the first thing that comes to mind, but when it can happen, it's an amazing thing. And you're seeing more companies particularly in Boulder that have... I forget what kind of corporation that is when there's like another layer of responsibility. What's that called, you know?
Jon: Yeah, B Corps.
Matthew: B Corps. Yeah, so that B Corp is kind of becoming this new thing that is gaining popularity and awareness. So I really hope that takes off. But back to Foria here, I mentioned in the intro, we're talking about Vicks VapoRub and capturing a category. I really watch what you do closely, and I think the way you come to market with intriguing products that define a new category or subdivide an already existing category and make it something where you can be the primary player to provide benefit, is very interesting. Related to that, let's talk about what you're doing with suppositories and how you're kind of going into that category to create maximum benefit for your customers.
Jon: Yeah, and you know, just the outcomes...you know, we're trying to measure wellness outcomes, right, not just profit outcomes. And I think that that's an interesting challenge, frankly, is to orient yourself too. Hard to define, hard to quantify, but you know, something that we're tracking, really amongst the community of people that have engaged with Foria over our first five years now. So we're trying to develop a currency, maybe, you know, call it trust, as the currency, so that we can introduce products that are used in very intimate fashions.
And so, you know, our initial product is called Foria Pleasure, and that's a topical oil that is used to enhance pleasure, primarily when applied vaginally. And so for women, the opportunity to use Pleasure kind of led us to the suppositories in the sense that we were focused initially on pleasure enhancement, and the way that pleasure activates increased blood flow, can create an enhanced sense of sensation, or sense of presence, which typically, leads to very pleasurable outcomes.
What people started sharing with us as people were using our first topical was that they were also finding benefit not just from a pleasure enhancing context, but also from a pain relief context. And so that was really interesting to us. And it was both from people who would just experiment and share how they were using the topical oil, as well as from the medical community. People came to us with their own perspective, their own anecdotal information in terms of how patients that they were seeing were able to use our pleasure topical for pain-relieving purposes.
And so that's kind of the ideation, and kind of the creative inputs that led us to develop the suppository formulation. And, you know, it's really just a delivery system to get the cannabinoids into more direct contact with smooth muscle tissue, in this case, intravaginally in the uterine walls, for example. And the benefits that people were experiencing were either kind of an antispasmodic or reducing cramps, was one of the primary benefits, as well as reducing inflammation. And, you know, there's a lot that's being looked at now across the board for cannabis in terms of its anti-inflammatory and antispasmodic benefits.
But the suppository for us, kind of was an interesting breakthrough mentally, just in terms of how we could position and utilize and harness the power of both cannabis and other synergistic botanicals for these types of wellness outcomes. So yeah, and we focus we like to say below the belt so far in our first few years. And so whether it was the topical oil or the suppositories, you know, that was the initial focus, and there are really profound benefits to be harnessed there, again, non-psychoactive benefits of cannabis.
Matthew: Okay, so you started with Foria Pleasure, which is an adult wellness product for the bedroom. And there was kind of this feedback saying, "Hey, this has really helped with pain as well as kind of being a titillating experience for the bedroom." And so is that where the spark was like, "Hey, we're getting this feedback a lot. Let's look at this a little closer. Like, what other applications are there for discomfort?"
Jon: Yeah. I mean, there's no roadmap, obviously, that we're following here, in terms of...
Matthew: If you are, I was gonna say, I wanna see this, I wanna see where we're going.
Jon: Yeah, I think, you know, at the end of, you know, the Foria story there may be a good tale to be told. You know, in terms of just the different pivots and how our both product creation and scale expansion of the company has evolved, really has been a co-created experience with our community. And that's been... You know, part of the importance here is holding what can otherwise be a very taboo subject, right, when you're talking about sex. And, you know, certainly, in the U.S. culture, you know, not always easy to discuss sex, or cannabis, or drugs. Let alone combining those two together and kind of having the double whammy of, you know, potentially taboo or difficult to discuss topics.
So, you know, for us, we've really oriented from a place of empathy and compassion to this opportunity. And, you know, Matthew and I hold ourselves as stewards of something that's really bigger than us. This isn't about us, this is about helping people. So when people share with us how they're finding benefit, that's something that we can both learn from, look at more closely, push, pull, and poke on. And then ultimately come back in a way that lets us broadcast more widely what some people have already found, we can then share that information out to the community of people that are paying attention, and really interested in what types of benefits our products in particular, or you know, cannabinoids, in general, can have for them. Specifically outside of getting high, right.
I mean, I think that the cannabis industry gets a ton of attention, you know, related to that. But increasingly, the opportunity set certainly from our perspective is around how do people use these products in their lives in a very practical and real way that's profound and impactful, and not strictly a, you know, recreational or pleasure seeking in and of itself activity in the normal sense.
Matthew: Yeah, gosh, you're right. You know, having the sexual component plus cannabis is like...perfectly said, like, it's a double whammy. I feel like the church lady from, "Saturday Night Live" skit is about to appear and just say, "Who inspired this, could it be Satan?"
Jon: Satan. Dana Carvey, yeah, well said. It feels like that sometimes. I mean, for the most part, things are embraced really well. It's just that we have to hold things with a degree of integrity and sacredness, right, because it's easy to screw it up. You know, when you're talking about those things, you can trip over all kinds of whether it's taboos, or just, you know, being kind of inarticulate about what you're trying to convey. You know, we hold a higher standard, I think than a lot of products do in terms of providing information.
I mean, one of our primary functions, one of the most important things we do is really to educate and create awareness. Because for a lot of people, the first notion of, "Wait, that's a thing? What?" Like, you know, you get this kind of, you know, incredulous responses. And that was my initial response when Matthew kind of pitched me on the idea that became Pleasure. It was like, "Wait, what? Are you serious?" And then, you know, you kind of tease into it and once you get past that initial kind of head scratch, and you look at the science behind it, and the reality behind it, you know, there's very substantive benefits here that I think we're just at the cusp, frankly, of harnessing.
The products and the areas that we might get into in the coming years probably will surpass the things that we've already done, just because our knowledge base will grow. And I think as the federal position changes, and just culturally we were sort of past, or at this tipping point of consciousness around embracing the medical or, you know, the wellness benefits of cannabinoids. So as that's embraced as research becomes more open, as everything kind of increases here, the opportunity to create even more effective products will increase.
Matthew: Now, you've a few other products I wanna go into, but I think it would be helpful for people to understand like, what's a dispensary only product, and what's a product that's available, let's say online on your website. Can you just kind of just divide those for us real quick so we can understand?
Jon: Absolutely, and it's a great distinction, it's probably the most important distinction in the history of our company. Because we started out, you know, with this focus where the products, Pleasure and then our relief and explore suppositories do contain THC, and therefore, have to be introduced, you know, via the regulated THC markets. And so we started in California, I'm based in Colorado, so we expanded to Colorado. We subsequently licensed our THC product, the Pleasure Topical to our partners up in Canada Canopy Growth.
And so the expansion of the THC path for us was California, Colorado, and ultimately Canada. And then we kind of paused, because what we saw was that the THC world, you know, as it's evolved over these past several years, is an incredibly difficult animal from a just scale perspective. How do you reach people? How do you make sure that the information that's getting to consumers via the dispensary channel is what we want it to be? And it kind of ties back to what we were just talking about in terms of having this challenge around education, information, and awareness.
And so the retail environment, the dispensary environment for our brand and our products, is not the easiest. When people go into a dispensary, they're not typically thinking about the things that our products are used for. And so for us, we wound up engaging directly with consumers who were writing into us via our website or calling us, and really not just across the country, but from around the world.
And that got us thinking about, okay, people are curious about the benefits of our products on a global basis. We know we can't distribute THC products on a global basis. But we also got curious around what were the real efficacy, what were the things that were driving these outcomes within the products? And what we were able to do is to start to create analogs for our products that do not contain THC. And that we can distribute across the country and around the world. And so, that really was a giant pivot for us in a business sense.
Which is not to say that we're not gonna continue to develop THC products. We have a new one coming out later in December. And, that we want to have our products be available in more THC products. So that's an active business development path for us. But the opportunity to serve a global e-commerce world was so exciting and the development of products for that channel became so interesting to us because what we're able to do is synergize botanicals, not just, you know, from cannabis, or from hemp.
And so we started to introduce, and this was with the assistance of some incredibly talented professionals that are master herbalists and naturopathic MDs. And so we got some new inputs into our product development which enabled us to launch an analog to our first product, the Pleasure topical called Foria Awaken. Which is an organic coconut oil infused with seven botanicals, not just cannabis or cannabinoid botanicals, but that product includes things like vanilla, and cacao and cardamom, ginger, mint, cinnamon.
So what we've done is basically take other plants, other botanicals, synergize and harmonize them with the cannabinoids. So there is hemp derived CBD in the Awaken product. And basically create a product that we could get to people that has similar if not better efficacy, because it's got aphrodisiacs beyond just the vasodilation or the blood flow enhancing components. So it operates as an aphrodisiac, both from a smell perspective, from a taste perspective. It's really just in my mind the most delicious product that we've ever created.
And so that blend of other plant botanicals is something that we've then used as a basis for other products. And so at the moment, we've got two products available in our e-commerce and sort of non-THC channels, the Awaken Topical. And then we just launched what we're calling Basics Tonic, which is kind of a straightforward CBD product, organic coconut oil. And CBD for people who are looking for the general applications of CBD, not just the ones, you know, in kind of a below the belt or specific to sexual wellness or intimacy enhancement.
So that's been an interesting breakthrough for us is to expand the product offering, expand the marketplace opportunity. And I can tell you that from just a quantitative perspective, you know, at this point about half of all the products that are sold...you know, Foria products that are being sold, have quickly become the non-THC products. And that's just we have a much bigger audience, a much bigger marketplace. And so it's now accounting for call it two-thirds to 70% of our revenue is actually coming outside of the THC channel, which is a really interesting thing for a brand that was kind of born in the, "Cannabis industry" and started with THC products, you know, we've really crossed over to more of a mainstream lifestyle wellness focus. And I think our mandate is, therefore, broader in terms of what types of products we can deliver.
People usually find out about us because of the sexual and intimacy products, or the pain relieving products, but we're excited to see what else can fit under the Foria brand. And once...you know, we kind of talked about trust earlier, once you establish that trust in the consumer mindset, that, you know, we're gonna go through the process of making sure that our sourcing is done as responsibly as possible. We're gonna provide as much education, awareness around CBD, and all of the other botanicals that we're sourcing and be as organic as possible. And why does that matter?
You know, so that's now the mandate, right? We have a bigger opportunity. And I can just quickly touch on the fact that this past Black Friday, the Cyber Monday timeframe, was our most exciting or most successful from reaching more and more people than we ever have. We've got thousands of people coming to the website. Lots of people are curious about what our products can be in their lives. And so, things are growing in a really exciting and interesting way, faster on the non-THC side than the THC side.
Matthew: Yeah, I don't think there's enough awareness around what's possible with using cannabinoids other than THC and combining with terpenes or other compounds and creating incredible effects. I mean, the same cannabis consumed with a different terpene profile, can be just a totally different experience. So I think that really hasn't settled on the marketplace. I mean, certain manufacturers and brands like yourself are understanding that difference, but I don't think that's totally dawned on consumers yet, what's possible there.
Jon: I would agree with that. I mean we're in an age or an era of expanding awareness, and you know, being a thought leader, putting information out there not strictly for our... You know, this isn't come buy a Foria product. This is get yourself educated about what you're putting in your body and why. And making health and wellness, you know, decisions, purchase decisions is such a...is, you know, arguably one of the most critical decisions that anyone makes in their life.
And so, you know, with all of the kind of fervor around CBD and the kind of lack of understanding even of what, you know, not all CBD is equal, right? And so we're following it all the way from the plant level. You know, how it's cared for, how we work with the plant, how the different cannabinoids or different elements of the plant are extracted, and then combined. These things all matter in terms of, you know, the outcomes that people experience, what they experience in their bodies when they use these products.
And so I think that there's an explosion of like high-level awareness, and then there's gonna be a responsibility, frankly, on the behalf of companies such as ourselves to continue to provide deeper understanding to people so they can make well-informed intelligent choices. And you know, if they choose our products, great, but if they choose some of our peers' products like that's fine too. We just want people to be really knowledgeable about what they're doing. You know, it seems kind of weird to us to eat a gummy bear for example, that's made with artificial sweeteners and call that like a wellness, you know, thing, right? It's like really, you have to combine your wellness things with things that are decidedly unhealthy, like how does that work?
So the responsibility to deliver products that are, throughout, well considered, very intentionally designed, carefully handled from design through creation, over time that will matter. You know, I think there's a lot at the moment where you can...you know, there's a lot of people who are basically selling anything just because there's like this, "Oh my god, CBD, I'll buy it." You know, so there's just some of that going on, but that'll settle down. And ultimately, that's not who we are. You know, we're...and as you can see, if you look at any of our front facing materials, you know, we're gonna push information as the most important currency here and establishing trust.
Matthew: Now, I know that picking the milligram dosages for your CBD products, I mean you kind of just go with kind of industry standards of what people are purchasing in terms of what they want in milligrams, or how do you pick that out? Because I talk to a lot of different people, and there's just...it's a difficult thing because people's body react differently. I mean, how do you arrive at that?
Jon: Yeah, I mean it's interesting. I mean, there's a few different lenses that we try to put on that question. One is the... So the consumer experience, I mean, just strictly from a price point perspective, there's kind of a strategy which is to say, you know, at what dollar point are people priced out of even, you know, getting access to meds. So, in other words, putting more volume into a product and therefore it necessarily being a higher price point might have someone not even able or willing to try something, right.
So there's a pricing strategy and we haven't perfected this by any means, but we're asking the questions and we're looking at it, which is, you know, if the goal here is to get someone to experience the wellness outcomes, you wanna make it an initial step that they can take. And so whether that's an aggregate amount of the product, or like a smaller...you know, a one pack or a two pack, a single serve, you know, if you will, of different things, we're experimenting all the time with that just for people to try.
In terms of the question of efficacy and potency, you know, for us, industry standards, there really isn't a notion of industry standard, because 10 milligrams in a suppository consumed rectally or vaginally, doesn't perform the same way as 10 milligrams that you might eat. And so to normalize things across, you know, edibles, for example, is not doing anyone... It's a disservice frankly, to people.
And so what we try to do is educate people as best we can around this is an experiment. Your body as you come to any of these experiences, who you are on any given day is different and would, therefore, vary as to what your, you know, kind of desired dose might be. And so the variables as you correctly point out are almost too many to control for. And so what we've tried to do with our products is make them reasonably titratable in the sense that, you know, you can take a small increment.
So for example, the Pleasure Topical can be put on in very small amounts, it can be increased as desired, and as people are finding, you know, good use themselves. The suppositories don't really have an upper limit, it's not like you've consumed too much, right. So that's not typically a problem, but it's more of a price point thing and just making sure that people, you know, are willing to spend $8, $9, $10 for a single use product at that point. You know, one of the more interesting things that we're about to launch into which again gets into this notion of how much can you as a consumer control your experience, is vape pens. And so, we're about to launch the first Foria vape pens.
Matthew: Let's talk about that. Is this the Flow?
Jon: Yeah. So the first one is gonna be called Flow, and that one will not have any THC in it. So it will be available to everyone everywhere. And what we've done with Flow is harness the terpene profile of the Awaken Topical that we talked about earlier. So it's got vanilla and cacao, so it tastes great, it smells great. It's a very pleasant experience to ingest. It's not cut with anything at all. We don't put in any of the fillers, or PGs, and even MCT oil. We're not using anything other than the botanicals themselves, and so it's got a lot of CBD in it.
But again, it can be controlled at the user level in very small increments. And so for people who are looking for a vape experience...and the reason that we're making it is not because the world needs another vape pen. I think we can all agree that there's plenty of vape pens in the world. But our vape pen has a decidedly different focus, you know, well, starting from the hardware. We certainly don't wanna have people ingesting plastics, and glues, and any of the things that some of the, you know, kind of more rudimentary and entry-level hardware that, you know, is in the vape universe.
So, we've sourced...you know, it's glass and ceramic and metal. So, you know, just from what's actually going into your body perspective, we try to keep it as pure and healthy as possible. And then, you know, the opportunity to kind of harness our unique flavor profile and botanical profile, if you will, into something that people can consume. And probably we'll pair with our Pleasure Topical, or our pain-relieving suppositories, for example. It's the most requested item that, you know, over the years, people have said, "When are you gonna make a vape pen? You know, I would really love to have a Foria vape pen."
And so we've taken that feedback to heart. And so we're, you know, as we've said before, we're extending not just below the belt, we're now expanding to things that are being inhaled and consumed orally, mostly because our consumer base and our community has requested it. And because we think we can add some value there in terms of... So for example, the analog for our Flow pen is going to be called Empower, and that is a four to one CBD to THC ratio. So it's a micro-dose of THC.
Again, we're not out there putting products, you know, with the intent of having people get really disassociated or out of their minds in a psychoactive or high way. What we're trying to do is introduce people to the notion that you can consume things, even in the vape context, that are facilitating tuning in a greater level of embodiment. And so that's the opportunity for us, as Foria, as a brand, is to stay consistent with... The reason that people look to our products, is to feel better in their bodies, feel more present, more aware, more tuned into themselves, and then, the ways that they connect with their partner, so from a more relaxed and available place. The way that people connect, you know, in a partner context, is benefited from that sense of embodiment and relaxation. And so the Foria pens both Flow and Empower are designed to promote relaxation, and to promote a sense of inward focus. And that's kind of our different take really on the vape pens.
Matthew: That's kind of helpful too, because, you know, everybody reacts differently to cannabis. And if you have a much higher...you said it was four to one CBD to THC?
Jon: Yeah, correct.
Matthew: Okay. Because there's some people, you know, when I've been around them especially if they don't consume cannabis very much and they get a vape pen, and they take a few hits, or maybe it's a flower vaporizer, and they blast off, they might feel a little bit paranoid or overwhelmed. This is much more of an easier glide path to just, you know, get your sea legs and be at a much more comfortable level, where, you know, when you drink a beer, you kind of know what a beer will do for you. Sometimes the same can't be said for, you know, consuming dry flower, or even a very potent vape pen. So this is kind of... It's nice to see kind of this filling this gap in.
Jon: Absolutely, yeah. And that's just staying true to who we are, right. You know, the products that we'll put out there under the Foria name are designed to help people stay in an embodied state, or you know, really shut out the distractions not to increase the mental chatter and noise. And again, these are not the heavy duty psychoactive products that cannabis industry typically sees.
Matthew: Now, I feel like, "Rain Man" sometimes because I focus in on what seems like maybe tiny details. But I wanna circle back to the glass cartridge. There's always a trade-off for everything, so glass cartridge, ceramic parts, all those things, higher quality components more cost, and that leaves some people behind. Because there's some people where...you know, obviously price is a factor for everybody you couldn't sell $1,000 vape pen. Actually, you could, maybe to somebody to see and take these over to the Middle East or something, and some princes might be buying that.
So there's a trade-off here with price point. So when you say, okay, price is important, but maybe it's not the most important thing. When you look at that, like, how do you look at the trade-offs? Like, I want to get this to a affordable price, so as many people that would wanna participate in this can. But you know, I don't want there to be any health detriment as small as that may be, or maybe it's not small, by having plastic components. I mean, tell us a little bit about how you think about the profile of your customers, and how they look at those variables and why you made that decision?
Jon: Yeah, it's a really fair question. I don't know that there's a perfect answer to that, other than to say that we are extremely cognizant of wanting to create products that are available to as many people as possible. I think that the...what we are committed to doing is not trading off on health-related decisions on account of making something, you know, less expensive or, you know, "More available" at a certain price point.
At the same time, we're trying to produce products... I mean, if you look at, you know, kind of our pricing relative to some others pricing, especially with CBD, we think that there's a lot of... You know, people are taking advantage frankly of the frenzy and fervor around CBD. And we think that the pricing in general, can and will come down. And we wanna be at the front end of that, in terms of just responsible pricing, if you will. And so, you know, it's very difficult to do anything at the moment, whether it's with hemp or cannabis.
And so there are a lot of things that you drive costs from the compliance and regulatory perspective. And, you know, certainly, the availability of hardware is becoming better and better. But, you know, we've had a difficult time in terms of sourcing any of our packaging components over these first five years of our existence. And ultimately, you know, for us to be sustainable, and to do a better job of creating products and making them available, this isn't being done, you know, at a loss, right? We do need to be sustainable from a corporate perspective.
But as you mentioned earlier, there's a virtuous circle there that the more successful we are, the more we can invest into the products, and also, you know, create products at a more attractive price point. And so we think that we're at the lower end of the spectrum in terms of price. That's certainly our goal. And we think that over time, as the markets mature, there will be some price compression, and people will be, you know, providing products at, you know, attractive pricing.
The consumer profile for us is a really tricky one. I mean, we have people really across all ages, certainly both sexes that the brand does speak more directly I think to the feminine and to females. And at the same time, there's plenty of men that are both using the products and/or, you know, connecting with the brand because they have females in their lives that they want, you know, them to receive the benefits for.
So it's tough for us to strictly archetype or stereotype, our typical consumer, other than to say that they have a high degree of consciousness around intimacy, around wellness, a curiosity around botanicals, not just cannabis and cannabinoids. And so, you know, we try to appeal as broadly as we can, we try to be very fair and responsible with our pricing. We will not sacrifice, you know, quality essentially. And so, you know, what people can expect from us is that we are putting, you know, our attention on how to create things that, you know, at each phase in the game are as healthy or designed to achieve the purposes that they're being used for as we can.
Matthew: So we've talked about suppositories, we talked about pleasure, vape pens, is there anything we missed? Oh, the Tonics?
Jon: Yeah, the Tonics, you know, for sort of general CBD consumption. So, you know, our Awaken Topical is specific to, you know, kind of sexual use. So, for people who are looking for the general wellness benefits of CBD, I think the CBD suppositories, the Basics suppositories, or the CBD tonic the Basics Tonic, are our first step towards that. There are a couple of really exciting...you know, so both the vapes and the tonics, and the suppositories, are kind of in that general use CBD category.
We do have a couple of... I'm gonna just leave it as a teaser in this conversation, but what you can look for from us, in 2019, will be at least one very innovative, unique application of cannabinoids for wellness purposes that is certainly not on the marketplace currently. And I think will be for us a really exciting product extension. I gotta keep it under wraps.
Matthew: Oh, my gosh. It sounds like... So it's safe to say it's another kind of new category?
Jon: It is. It's one that people are gonna say, "What?"
Matthew: You guys love this, you love this. This is great.
Jon: Yeah, that one's gonna... And, you know, I mean, what's really fun for us right now, in addition to the fact that more and more people are paying attention and curious and, you know, trying products, and then sharing the impact. I mean, I can't overstate to you and your audience, like how meaningful it is when people share with us what using our products has been for them in their lives. The depths of people sharing that you've literally saved my life, you've saved my marriage. Like, thank you, thank you. I mean, the gratitude that people express to us, from the benefits of the products that they've been using, is so moving. It's so meaningful. It's really inspiring. And it's what gets us up and excited about doing what we're doing.
I mean, we feel like we're stewarding something that's far bigger than ourselves, and it's working. And so the opportunity to embrace our eye level in terms of, you know, if we're impacting thousands or tens of thousands of people currently, the opportunity for us to look at, you know, hundred thousand, millions, you know, that's getting more and more real for us. And so as an entrepreneur who has a very, you know, mission-based focus, things are getting really exciting for us now. And the opportunity seems to get bigger and bigger.
So we're gonna... What you can look for from us is continued innovation from a product standpoint, but really just a focus on earning the trust and respect, and providing that education and awareness to people. Because I think that that's gonna be the key for people who are experimenting with any of these types of products. And that's all that this really is, this is a giant social experiment and I think that, you know, what you're seeing on a legislative level, you know, kind of at the ballot initiatives and as well as the legislature's around the U.S., and you know, soon to be hopefully some movement at the federal level with respect to the Farm Bill and hemp coming off of the Controlled Substances Act.
And you know, all of these things are trending towards a more expansive mindset, a bigger opportunity, and as a consequence, more responsibility to hold this with integrity. And so hopefully, you know, that's where things continue to evolve.
Matthew: Tell us a little bit about the research for menstrual pain relief, and the connection with cannabis there?
Jon: Yeah. I'm glad you brought that up. So you know, over time...and we talked about this a little bit before, is like the medical community has reached out to us with some degree of curiosity or some perspective to share, and that's really been fantastic. Because it helps advance the knowledge base, it advances our internal thinking, it helps for people externally to at some level ground or validate what's actually happening. A lot of people, you know, really need that stamp of approval.
And so the participation of the medical community has been great. I think it's only going to increase, certainly as the federal position evolves. And in particular, we were approached recently by a Harvard Medical School researcher in conjunction with the McLean Hospital to do an observational study around our menstrual cramp relief product. So this is the suppository that has both THC and CBD in it.
And we're at the early phases of the...essentially, the protocol has been established and what the study is designed to do is just to look, you know, from a medical lens, look at the impacts that the use of our relief suppository is having on people around their menstrual cycle. In particular around, you know, painful cramping type conditions and other inflammatory conditions. And so that's something that is underway, sorry. And will be, you know, ultimately published in the medical journal. And that's a first of its kind opportunity.
And so when this was, you know, brought to us, and we were requested to, you know, participate in that. We said, "Absolutely, you know, this is exactly where we want things to be evolving towards." So that study is, you know, kind of, at its early phases, about to kick off, there'll be between 2 to 400 women. I think we're focusing in Northern California just to make it more manageable. So the N group, the data set will be, you know, pretty significant.
And we're just excited because what folks have shared with us, is worth looking at, from, you know, a more rigorous perspective, you know, more of a clinical perspective. And then having that, you know, essentially broadcast externally to the world. We think there's real value to people in hearing it from that type of a source.
Matthew: Jon, I like to ask guests a personal development question or two, to help listeners get a better sense of who you are personally. With that, is there a book that has had a big impact on your life or way of thinking that you'd like to share?
Jon: Yeah, thanks for that one. That's definitely a thought-provoking question on my side. And I would say that in the last couple of years, there's a book called, "Stealing Fire." Are you familiar with that?
Matthew: I've heard of it, but I don't think I know what it's about.
Jon: So the audience should kind of, you know, look it up, find it on Amazon or Audible, wherever. But "Stealing Fire," the essence of it...and if you think of the analogy to Prometheus stealing fire from the gods and bringing it down to mankind, essentially, you know, what was happening there was sharing a technology, in that case, it was fire. And sharing it at scale and therefore changing, you know, the world for having done so.
And what the book does is it kind of looks at...you know, that's sort of the larger frame. And the book goes into some interesting examples, including military as well as just all of the different modalities that people have been seeking non-ordinary states. I'm being a little bit vague and probably not doing the book justice in terms of pitching it. But what it means for me, and how I think it's relevant to the question, is that I kind of view what we're doing as stealing fire from the gods and bringing it to mankind. In the sense that, you know, we now know something, we don't know it...you know, we know it because of what people have shared with us.
And so when I was talking before about how powerful the sharing is, when someone expresses what using our products has been for them, we hear that, we feel it, we have tremendous compassion, empathy, and excitement around that. Our job now as stewards of that information is to broadcast it widely, it's to scale the availability of our products. So that more people have the potential to benefit from it, and have access to unlocking, you know, greater pleasure, or diminishing pain.
And so that book has really inspired me, you know, from that perspective of taking something and bringing it and making it much more widely available, and therefore, the potential to impact millions of people's lives. And, when I say impact people's lives, when people respond that they, you know, go from a debilitated, painful place whether it's cramps or inflammatory conditions, and then, you know, feel the absence of that, feel, you know, more present, more healthy and vibrant in their lives.
What they then go do in the world is... The vibrational, you know, aspect of that is increased. And so they show up as better parents, better partners, better colleagues, you know, they show up differently in their lives for the absence of that pain, or for the enhanced excitement, and enthusiasm, and pleasure. You know, when people are experiencing more pleasure, they tend to be more creative, more patient, more kind, right? So, the reverberations from people experiencing those two dynamics in their lives then has even more of an amplifying effect to their communities, and to, you know, basically to society at large.
And so I kind of hold it that we are modern day Prometheans trying to take the technology of the plants in this case, and broadcast it at scale to people all over the world. Say, "Hey, there's these things that can really help you." And you know, that's the path that we're on. "Stealing Fire" does a great job in my mind of kind of framing up that paradigm. And so it's had a big influence on me over the last couple years in terms of how I'm approaching what we're doing, frankly.
Matthew: Cool. I'll put that one in the show notes, the "Stealing Fire" book for anybody that's interested. Jon, is there a tool that you or your team use that you consider vital to your productivity?
Jon: There are a couple. You know, my co-founder is based in California, I'm here in Colorado. So we don't often...yeah, we get together in person as often as we can. But we wanna be in direct communication more often than that. And so we use video conferencing, and in particular, we use Zoom for video conferencing. Not just with each other, but with all of our key partners that are in various markets in different states. That's become an essential tool for us to be face to face with people, rather than just relying on email, text, voice type communications.
So I would say that video conferencing can really bridge a gap and create that more human and personal connection, both internally and externally. That's been pretty vital to our productivity. And I would also add that we use project management tool called Asana or Asana, I don't know how they pronounce it, probably Asana. And that has been probably the single most up-leveling of our productivity just from a tracking of all the different, you know, project management type things that we're trying to do concurrently with different team members that are located in different physical places. With external partners that are all over the place. So that's been a hugely important aspect of helping us be efficient and increasing our productivity.
Matthew: You know, since you mentioned Zoom. There's one app that people who like Zoom a lot I hear are using, it's Marco Polo. Which is like a...it's a video app where you record a message like a walkie-talkie, and then the other person listens to it whenever they want, but they reply back with a video message too. So it's kind of like, this asynchronous communication mode with video, but adds more color and context than just an audio could. I don't know if that's of interest but for anybody who's into the video chats, and so forth.
Jon: Yeah, it is. And it's a good extension. So there's another tool I really like called Voxer, you know, V-O-X-E-R, which is exactly what you just articulated, not with the video component, but the asynchronous, especially across different time zones and stuff, the ability to leave voice but in a really user-friendly way. So it feels like, you know, click like a walkie-talkie. And they've really figured out the user interface there, and the ability to time shift your voice recorder...you know, maintain a conversation essentially over a long period of time, but when it's convenient for people. That's become an important productivity tool for me as well. So I'll definitely look at the video version of that Marco Polo.
Matthew: So final question. What is the one thought that you have that most people would disagree with you on?
Jon: Oh man, that is a tough one. What is it? Well, I don't know if they would disagree with me. But I think that we've been called by the plants. This is something that Matthew my co-founder, he and I have connected on since the beginning, is that we have been called to serve by the plants. The plants have an innate wisdom that they want to communicate and impact in people's lives. And so we are here in service of the mission that is actually the plants' mission for us. Not our mission for the plants.
Matthew: Oh, God, interesting, it sounds a little bit Ayahuasca, like Mother Ayahuasca is calling me.
Jon: Kind of, you know, I think that if you look at the history of cannabis, right, and especially cannabis as an aphrodisiac, you know, there's thousands of year old history there. We've been living in an era where, you know, kind of a prohibition mentality has prevailed locally for the last little bit. But if you zoom out even a little, you can kind of see that the plants have really been there, and been doing their thing for a while. They've been through a tough patch in the U.S. for the last 70 or 80 years.
But I think that we're kind of at the dawning of what I think will be regarded as the golden age of plant medicines. And so whether that includes the Ayahuasca's of the world, you know, I tend to agree with that, frankly, that it's not just cannabis. But I think the plants are having a reemergence, and embracing opportunity...you know, culturally, there's an opportunity to embrace plants in a way that, you know, existed previously and will exist and maybe be enhanced by modern technologies as well.
Matthew: Yeah, I really hope the next chapter here is psilocybin being legalized too, because it seems like there's so much momentum with cannabis now that politicians can only lose by trying to keep it illegal at this point. It's finally crossed that line. I'm really hoping, you know, psilocybin, maybe the micro-dosing psilocybin becomes legal in different outlets, because that has huge potential as well, so [crosstalk 00:54:39].
Jon: Totally agree with that. Yeah, the mycelia they're calling us. They've always, you know, done their thing. And so the relationship between humans and plants is, I think, gonna kind of hit a new...in a good way, a new level of interactiveness and mutual benefit. So I would agree with that.
Matthew: Well, Jon, we covered a lot of ground here. You gave us a teaser that you have another product coming out. We're gonna have to get you back on to talk about that, maybe we can talk some more about micro-dose dosing and the plants calling you, because I want to hear more about that. But before we close, can you tell listeners how they can find Foria, and connect with you online?
Jon: Yeah, sure. So, for most people, the best connection point would be our wellness site, which is foriawellness.com. That is our kind of non-THC portal. And on the THC side or just kind of a general brand side, our original website is foriapleasure.com, F-O-R-I-A P-L-E-A-S-U-R-E. So those are probably the two best places. There's also kind of an email link in there, email@example.com, if people have a direct question they wanna communicate to us, we're happy to engage with people that way as well.
Matthew: Well, Jon, thanks so much for coming on the show and educating us. Have a very, very happy holiday season. And we look forward to seeing all the cool things you come up with in 2019.
Jon: I appreciate the opportunity, wishing everyone a good holiday season as well. And I look forward to the next conversation. Thanks.
Matthew: After we recorded this interview, Jon and the team over at Foria Wellness were kind enough to extend a coupon code Insider for 10% off your order at Foria Wellness. So you can use that Insider, I-N-S-I-D-E-R as a coupon code at foriawellness.com.
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