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Crafting Cannabis Brewed Beers & Distilled Spirits with Dooma Wendschuh

Dooma Wendschuh Province Brands

Listen in as Dooma Wendschuh co-founder of ProvinceBrands.com discusses how he and his team are creating cannabis brewed beer and cannabis distilled spirits. Dooma transitioned from the US Cannabis Market to the Canadian Cannabis Market because he saw more opportunity in Canada’s federally legal marketplace.

Interesting factoids about Dooma

He was the co-founder of the software gaming company that made the mega hit game Assasin’s Creed that has grossed over 5 billion dollars in sales

– His favorite book is The Hard Thing about Hard Things
– His favorite business tools are Slack and SmartSheet

Find Dooma at http://www.provincebrands.com
and on twitter at @doomadooma

Key Takeaways:
[4:23] – Dooma’s background
[11:02] – Dooma talks about the Assassins Creed game
[15:28] – Dooma talks about Ebbu and his transition to Province
[21:21] – Dooma talks about Province Brands
[32:54] – How do you feel the effects of a marijuana beverage faster
[34:02] – Dooma talks about dosage
[42:02] – Dooma talks about other ingredients in his drinks
[43:42] – Bringing Province drinks to market in Canada
[52:58] – Dooma talks about the fundraising process
[56:56] – Dooma answers some personal development questions
[1:04:13] – Dooma’s contact information

Important:
What are the five disruptive trends shaping the cannabis industry?
Find out with your report at https://www.cannainsider.com/trends

Read Full Transcript

Today we’re going to talk with an entrepreneur, Dooma Wendschuh, that has transitioned from the US cannabis market to the Canadian cannabis market and is making the world’s first beer and spirits brewed and distilled from cannabis. Dooma, welcome to CannaInsider.

Dooma: Thanks Matt. I got to say it is amazing to be back. To this day, I have people coming up to me and asking about the last CannaInsider podcast I did with you. It is just amazing what a phenomenal following you’ve developed and how many people are listening, and not just the number but the quality of listeners. It’s not that I’m surprised. You are one of a kind and one of the hardest working people in the industry. So, thanks again for having me. It is an honor, and I’m really thrilled to be back.

Matthew: Thank you Dooma. Flattery will get you everywhere. I appreciate that. Well, it has been a while. I think it was 2014 or 2015 since you were last on, but before we jump in to everything you have going on in your life, give us a sense of geography and tell us where you are in the world right now.

Dooma: Absolutely. I am standing in what will be the first country in the world to legalize recreational cannabis which is an amazing feeling. Do you know where that is Matt?

Matthew: Canada.

Dooma: That’s right, and a lot of people think it’s Uruguay, but the difference is in Uruguay they legalized cannabis for recreational purposes, but you have to be a citizen. Canada’s legalization will be for anyone who is of age, which is a huge deal. That opens it up to tourism and to a whole lot of different uses that you won’t see in Uruguay. It’s really changed everything. You have been following I think a lot more than a lot of the other US focused podcast and the media outlets. I know you’ve had Mark Lustig on your podcast and John Fowler of Supreme, and Brockstein who covers the cannabis industry better than almost anyone in Canada, although he’s from Texas. It’s been amazing to be here in Canada seeing an unparalleled growth in the industry. I mean Canada has a population of 36 million people. It’s one of the largest legal exporters of medical cannabis in the world, and I don’t know if you say, but there was this study that Deloit recently did that predicted that the size of the legal cannabis market in Canada in just a few years could top $22.6 billion.

If you’re in the USA and you have a 50,000 square foot indoor greenhouse grow, that’s pretty big. In Canada there are companies that have millions of square feet of cannabis grow indoors. There are companies that have valuations literally in the billions of dollars and many that have valuations in the hundreds of millions of dollars. So, it is a truly unique place to be in the cannabis industry and a world leader. That’s where I’m located. It’s the only place in the world I’d be right now to be working in the industry and doing what I’m doing.

Matthew: Yeah, there’s a lot of exciting things going on in Canada right now. I really like the aspect that you don’t have to live with one foot still in the closet like you do in the US. That’s really a frustrating thing. I think the industry in the US could really leap forward if we had a policy closer to Canada’s, I think, with the exception of dispensaries are the only thing I think Canada’s missing in terms of how it could be better. That can be changed.

Dooma: Right, and we do have dispensaries here but they’re illegal, which is crazy. In America you get your illegal drugs from the drug dealer that meets you in the parking lot of the Rite Aid. Whereas in Canada you just walk into an illegal store and buy whatever you want from a thing that looks a lot like a US dispensary, but they are illegal, they’re raided all the time. They’re shut down all the time. It’s basically a criminal activity here in Canada. Whereas in the United States it’s at least state legal when people operate dispensaries.

Matthew: Give us a little bit about your background. I know you were on back in 2014 or 15, I can’t remember when that was, and there’s a lot of new listeners since then and they want to get a sense of who you are, what industry you came from, what were you doing before this and all those juicy details.

Dooma: I grew up in Miami, Florida, so I am American. Received my undergraduate degree from Princeton University. Did my graduate school at the University of Southern California. As most people do when getting a graduate degree from USC, I went into the entertainment industry. Started a company to make motion pictures. We were not very good at that. We sold eight movies to the studios. We only managed to get one of them made. I think it was just kind my age. I was 22 years old and I didn’t know how to get these celebrities to sign on to be in our movies. That’s what it took. I wasn’t getting invited to those parties. When I did meet a celebrity, which was very rare, I remember one time I was at a party at the urinal and Brad Pitt came and urinated right next to me at the urinal, and I was like, this is my chance.

I needed to have something really smart to say, but I didn’t think of anything and he just walked away and that was it. We didn’t really succeed in that industry, but we pivoted the company into the video game industry where we had a lot of success. We helped create some of the biggest video game franchises out there. My company is called Sekret Agent Productions, and the video game franchise that the company is best known for is Assassins Creed, which has now done about $6 billion in worldwide sales. It was a lot of fun. It was crazy. We worked on the first eight of those games. We also did Batman Arkham Origins, Army of Two and a bunch of stuff that didn’t make any money. Actually we did three games in the Prince of Persia series, so those made money as well.

It was a lot of fun. You become very close with the team when you’re doing these games. We were pulling 18 hour days, month after month and crunching and they become like a family. I really don’t think there was anything that could have pulled me out of the video game industry except for what eventually did, which was November of 2012, and I was living in Canada because we had an office in Montreal, but then another office in LA and I had more or less moved up to Montreal at that point. I was over at a friend’s house, and we were watching the US elections. Oh yeah, Obama got elected, but you know what else happened, marijuana was legalized for recreational purposes in Colorado and Washington. When I saw this I was like, whoa. Who knew this was happening. It was crazy to me.

I mean, I had know about medical marijuana, sure, but there’s medical cocaine and no one thinks cocaine is going to get legalized for recreational purposes any time soon. It just seemed so far off to me that this had actually happened. It kind of got me thinking, and when I thought back at my life, the moments that really mattered me weren’t moments where I’m sitting on a couch with a game controller in my hand. That was fun, but the moments that mattered to me all involved some kind of a psychoactive. I know I say that, I sound like a drug addict, but I’m the furthest thing from that. Think about it. Those video games, we never would have sold them if we didn’t have drinks with the publishers to get to know the publisher, to develop the rapport, you learn to trust people after you’ve had a couple late nights with them in a business setting.

We never would have made those games if it wasn’t for tons of caffeine fueling the workforce. Caffeine makes you a super human and people forget that’s a psychoactive as well. In college all my best friends are folks I met and sort of intensified those friendships often under the influence of alcohol and certainly the most important business deal I ever closed, which was asking the woman I love to marry me, would not have been possible without a good amount of Champaign. I believe that psychoactives provide a lot of benefit to our world. They break down boundaries. They do so many great things for people. I also believe that they have a lot of problems. With the legalization of cannabis, I saw an opportunity to perhaps bring about a better class of psychoactive. I didn’t know what it was, and we’ll talk about Province and sort of how my thinking has evolved since then, but at the time I was like, there’s something here. Because I knew, even back then in 2012, I knew what a lot of people still don’t know, which is that marijuana is not a thing. It’s not a single active ingredient psychoactive. It’s very different from the other legal psychoactives in our world.

If you look at the three legal psychoactives for social and recreational purposes, alcohol, coffee, tobacco. Each one of them has a single active ingredient. For alcohol it’s ethanol, for coffee it’s caffeine, for tobacco it’s nicotine, but cannabis has all of these different compounds. It’s basically a polypharmaceutical. There’s 144 phytocannabinoids that have been identified to date. There’s hundreds of terpenes and these individually in a different combination can create varying psychoactive effects. So, I wanted to see what that could be and how those things could create a better class of psychoactives. I ended up selling my shares in the game company in 2013, and using some of those funds to start my very first cannabis company, which was in Colorado. That’s kind of how I got into the space.

Matthew: Gosh, I just want to rewind for a second because Assassins Creed is like a household name at this point. I know they’re making that into a major motion picture I think.

Dooma: They did make it into a motion picture. If anyone out there saw it, I’m sorry.

Matthew: It was bad.

Dooma: It was so bad. It was so bad and it didn’t make any money. It’s hard. There haven’t been a lot of successes. The only one is Resident Evil. That’s the only success that’s ever been a successful translation of a video game into a motion picture. They’re different media and it is very hard to make that jump. I am really disappointed in the Assassins Creed movie but I wouldn’t say that I’m surprised.

Matthew: What captured the imagination of the public with that game? Do you think it was the narrative and production value or the quest? What is it that you think really resonated?

Dooma: Well, at the end of the day I think it’s a lot of things that my cofounder of that company, and I probably can’t take credit for, and I think the most important thing about making any kind of a business, but in particular a video game is it is a team effort. It is something you really rely on every person on that team and they all have to be working at top speed. I think the number one thing that made that franchise successful is not any individual element, whether it’s the story or the game play, but the sum of all of them. I believe, as an entrepreneur and as a business leader, that execution always trumps innovation, and Assassins Creed had a lot of innovation. Certainly the crowd system was way ahead of its time. The open world, the different aspects of the open world were very innovative, but the execution, it all hit together very well.

I think the execution contributed in a major way to its success, but I’ll tell you a little story about one element that I can take and that we can take no credit for that made it a success. The game was funded and published by UBSoft and they put someone on the team whose job it is is to make sure that this game is going to be marketable. This woman would go to all the meetings and she would give her feedback and input, let’s put it that way. At that time, what we had pitched, what UBSoft was developing and what we were making was a game that set in the Third Crusade. It was entirely a period piece. Keep in mind this wasn’t that long after 9/11 and you were basically playing an Arab, a Muslim guy and the bad guys are Christians. There’s a little bit of unease around that.

She kept saying, this woman kept saying we can’t sell this. No one is going to buy this game. Nobody wants to play a game where it’s a period piece and you play a Muslim and the bad guys are Christians. This is going to be a disaster at the Box Office. Can’t you put in some aliens, put in some science fiction. Let’s make it edgier so that we can have a hook and sell it. My cofounder, Corey and I, we fought this tooth and nail because keep in mind, we had just done three games in the Prince of Persia series. Prince of Persia is all about time travel. We were definitely not doing another time travel game because every time you go back into the past you have to change the future, which is so annoying. Then one of the guys on the team had read something. I think it was a short story that talked about genetic memory, and we were like okay, that could work.

That’s not time travel. You don’t have to change the future. You’re just going back and learning from the past and it was amazing because that little tweak is what made it so that every game in the Assassins Creed franchise did not have to take place in the Third Crusade, and that little tweak is what turned this from a single game that probably would have done pretty well, but not really had a following, into a worldwide know franchise that generated about $6 billion.

Matthew: Wow, maybe you could just summarize quickly what genetic memory means for people who don’t understand.

Dooma: Yeah, for anyone who hasn’t played the game, genetic memory is this theory that by analyzing someone’s genes, you can understand specific events that happened in their heritage before they were who they were. What we did is we imagined that in the distant future they would have a technology that could read your genetic code and would allow someone to effectively replay or relive moments from their own ancestry. So each Assassins Creed game takes place in a different time period and a different location because it’s all along the lineage, the ancestry of the main character, of the people who were his great grandparents, great-great grandparents, great-great-great grandparents and all the adventures that they had you’re reliving when you play those games.

Matthew: Speaking of going back through history, let’s talk about Ebbu and them Province. What was Ebbu, that’s what your endeavor was before Province, what you’re doing there and your transition to Province.

Dooma: That was a very good transition that you made by the way. I like that. Ebbu was the first company that I founded in the cannabis industry, and you have to believe me when I tell you that it was the hardest thing that I’ve done in my life, and I’ve done a lot of hard things. We started this in Colorado. We set out to raise $10 million. Keep in mind, we were doing this in the United States where cannabis is federally illegal, but also in Colorado where at the time, they had a residency requirement that meant that you could not own equity in a company unless you were a two year resident of the state of Colorado. That made fundraising a tremendous challenge, almost impossible.

On top of that, we had to solve one of the most challenging problems in the cannabis in the cannabis industry which was to try to make products, and eventually we succeeded at this, but to try to make products that when consumed would be both reliable and predictable. Cannabis is definitely unreliable. It’s unpredictable. You never know what you’re going to get. At Ebbu we made vapor pens and the company still makes vapor pens that every time you tried it you would have that same sensation guaranteed. The long term goal was also to make products that would predictably give everyone who tried them the same sensation. If you and all your friends tried it and it was called Energy, you would all have an energetic sensation when consuming cannabis. To do this we had to hire world class scientists, and it was hard.

I had a cofounder that wasn’t able to take the time off, take the risk to launch a startup, at least in the beginning. He was working a full time job, while I worked Ebbu full time, put my heart and soul into it. I barely slept for two years and whenever I did it was in airports. I was traveling the world raising capital and recruiting the scientists to join the team, and in the end my friends and family and people I’ve known since high school in some cases or college or in the case of my family, my entire life, came through and made investments despite incredible risk. We raised $10 million. We hired a world class team, including Dr. Linda Klumpers who is a world renowned cannabinoid researcher who now has her own startup that’s really exciting. It might be someone you want to talk to in a future episode.

More importantly, the company succeeded in creating phenomenal products. The Ebbu Genesis that’s out now is one of the best vapor pens on the market. It nearly killed me, but I am really proud of what we accomplished, and I’m proud of all of Ebbu’s success, although it did not end well for me personally. The crazy thing is I ran a video game company for 13 years. Was involved in some of the world’s biggest entertainment franchises. I never once got sued and I never once had to sue anyone, and I used to be so proud of that. I thought I was litigation proof, but I guess you can’t hide from it forever and if you’re an entrepreneur, as I assume many of those listening to your podcast are, then you haven’t been through it, it’s going to catch up to you. I never wanted to do anything to hurt Ebbu, as I mentioned, the investors are my friends and family, but I was put in a situation where I had no choice but to file an arbitration lawsuit, an arbitration against my cofounder and against the company. This has been what I’ve been dealing with the past year and a half.

The costs are approaching now half a million dollars of my own money and it keeps going. It’s incredibly expensive to be in litigation. It’s forced a company, which my wife and I own together, into bankruptcy. It’s been really hard, and the money is not the worst part. The worst part is just knowing that you’re basically, at least in my case, filing suit against something I help create. My friends and family who invested in the company, to be pitted against them is terrible. Most of them understand, obviously. I think whether I win or lose the major battle I’ve sort of already lost and a reason for the lawsuit is that there was information in large part not true that was leaked out to media sources and has done a lot of damage to my reputation and made it very difficult to start the second company, Province. It’s been challenge. It doesn’t matter in the real world whether you win or lose in a court of law. It matters a lot whether you win in the court of public opinion and I think I may have already lost in that court and that’s been the hardest to deal with.

So it’s been really rough, but it’s also a great learning experience. I was very fortunate for 13 years to run a successful video game company and to be able to exit that. My cofounder, that’s still one of my best friends and one of the smartest and most capable people I’ve ever met and to be able to have good relationships with him and it’s a good learning experience to see it from the other side and to realize things don’t always work out that way. When you’ve been through something like what I’ve been through you can certainly empathize with a lot of others who’ve had experiences like that. So anyway, thanks for letting me vent.

Matthew: I appreciate that Dooma. I appreciate you giving the details and some context there. That really helps people understand what happened, because we hear a little bit here and there, but it’s great to get some more straight from the horse’s mouth, and we wish you the best on that. I mean, that sounds very taxing on you personally, you and your wife. I hope that there’s a revolution soon. Let’s move on to the next chapter. Let’s talk about Province Brands. Tell us about that.

Dooma: Province is pretty unique. There’s really not a lot like it out there. We are one of the first products companies in Canada. What we’re making is something truly revolutionary. Imagine a world where there were no psychoactives. Just no one ever figured it out. No tobacco, no alcohol, no coffee, no anti-depressants, no stimulants, no anti-psychotics, none of that stuff. That world would probably be a boring world, and in a lot of ways it would be worse than the world we live in. Imagine that a flying saucer came and the aliens showed up and they’re like, hey humans, check all this stuff out and they gave us everything. Crystal meth, heroine, anti-depressants, anti-psychotics, coffee, all of these and they flew back into space.

Then it was up to the governments of the world to decide what are we going to do with all of this stuff that the aliens left behind. What will they decide. I’m pretty sure that there’s no way in hell that they would make marijuana illegal. They would do a cost benefit analysis because obviously a lot of these things have benefits. A lot of psychoactives are really important for treating ailments. Anti-depressants save people’s lives, prevents them from committing suicide. That’s a perfect example of a psychoactive that has a very strong social and individual benefit. I think they’d do a cost benefit analysis. I think they’d find that things like marijuana should be legal. I’m also pretty certain that when it came to alcohol it probably wouldn’t pass the test. I think it’s very unlikely that alcohol would not be legal.

Why is it that alcohol is a $1.2 trillion industry? It’s so huge. It brings people together. It enriches our lives in so many ways. It’s got this pass. A pass like a get out of jail free pass because it has been around for so long. You could think of alcohol as sort of being grandfathered in. Up until now there really hasn’t been anything which could be legal, which could be a substitutional product. Again, to go back to these hypothetical scenarios, imagine a world where that wasn’t the case, where alcohol wasn’t grandfathered in and maybe there was something different. Imagine what the healthcare costs would be like in that world. When you go to the hospital now you’re paying your bill, but you’re also paying for alcohol because you’re paying for the person who drank too much and crashed his car or the person he crashed it into. You’re paying for the person who is possibly gotten cancer. Alcohol causes eight types of cancer and it’s not if, it’s a when. If you drink alcohol and you live long enough, it will give you cancer.

Heart disease, liver failure, depression, dementia, it contributes to so many ailments and has such a burden on our society. I think a lot of people just look at this and say, that’s the way it is. Me, I’m an entrepreneur, and I think where others may just see a cold beer, I saw an opportunity to change the world. I knew right away that it wasn’t going to be with smoked marijuana, because let’s face it, nobody likes to step outside to smoke. I don’t think that product is going to go away, but it’s not going to be the thing that replaces alcohol. Besides, smoking marijuana isn’t all that good for you anyways. The rolling paper, if you’re making a joint, could be carcinogenic. It contributes to bronchitis and myocardium infractions, all these different things, pneumonia. It’s unpredictable. It’s unreliable. It’s very confusing with all of these different strains of cannabis that you have to learn about, what all these different names mean.

There’s also the experiential aspect. Marijuana, it feels great. I love it, but it doesn’t have that sort of feeling quality that you get with alcohol, the mainstream appeal. Let’s take another example. Alcohol is a $1.2 trillion industry. What about the other legal beverage psychoactive, which is coffee or caffeine. Both are consumed primarily by adults. Both are consumed socially in a bar, in the case of alcohol or in a café in the case of coffee. Why is it that alcohol is a $1.2 trillion dollars whereas coffee does about $200 billion a year. Why is it that people are willing to pay six times more for alcohol than coffee. Matt, what do you think?

Matthew: I think the perceived value from a craft beer or a high end spirit is something people are willing to pay up for if it delivers on what they think it will. What do you think?

Dooma: Yeah that’s good. What do you mean it delivers on what they think it will? What are they looking for?

Matthew: It’s more of a euphoric sensation versus caffeine which is like let’s crack the whip, like a focusing drug.

Dooma: Yeah. It comes down to different sensations. I mean, alcohol has a sensation such that it’s totally normal to go to a bar and have three drinks, but if you go to a café and have three coffees in a row, you’re kind of weird. People don’t really do that. I think that that’s also one of the issues that cannabis has to face. At Province we do make beverages, but we’ll talk about that in a little bit. We’re not the first, but we have a very different approach. I think part of our approach is solving a lot of the problems that the other cannabis beverages have. Not the least of which is the onset time. You drink any marijuana beverage it’s going to take an hour, an hour and a half to hit you. That’s a long time. It’s like you go to your business drinks you don’t feel anything until you’re driving home. Because of the way marijuana is metabolized when it’s drank, it goes through your liver. It creates a metabolite called 11 hydroxy THC, which has different properties from cannabis when it’s smoked. As a result, a single serving of marijuana when consumed as a beverage could keep you intoxicated for six hours or more, which doesn’t mesh with how we like to drink. At some point you have to drive home. You don’t want to be intoxicated for that long.

We like to self-titrate. We like to go to the bar and get another drink every so often, because that’s social, otherwise you would have to talk to the girl you’re on the date with. Also another issue is the calories. Most of these cannabis beverages are basically soda pops and juices to which they’ve added marijuana oil. When you do that you have to cover up the taste of the marijuana oil, and to do that you end up adding a lot of sugar. So it’s not uncommon for a single cannabis beverage to have three or four hundred calories, which is kind of insane.

At Province what we’re doing is basically coming up with solutions to these problems. We make beverages. We basically have a technology that allows us to brew and distill cannabis to make beverages that are alcohol free for the most part and that are designed to intoxicate using marijuana or its cannabinoids and which are designed to take on the $1.2 trillion alcohol industry. I know that’s a really bold thing to say, but think about it for a minute. Alcohol or adult beverages in general, this is an industry which really hasn’t seen a lot of innovation in the past several centuries. If you walked into a bar in the year 1800, what you’d get then is pretty much what you get now.

At Province we’ve developed a patent pending process to actually brew a beer from cannabis. That’s pretty interesting. Why does that matter? Well, let’s take an example from Japan. In Japan Kirin figured out how to make a beer from soybeans. They put it on the market and you know what, people liked it. When others wanted to make their own soybean beer to compete they found that Kirin had surrounded it with this sweet of pence, and as a result there are still to this day companies who pay a licensing fee to Kirin in order to make and sell their own soybean beers to compete. In the same way, Province intents to own this entire category of beer brewed from cannabis, whether it’s help or marijuana, either type of cannabis, whether it’s alcohol free like almost all of our products, in which case it intoxicates you using marijuana or cannabinoids from the marijuana plant, or whether it’s an old fashioned beer that does contain alcohol. We will make just one of those for a lot of reasons, but the main reason being to gain market acceptance.

If you’re not used to drinking cannabis, you’re going to a bar every day, this is a way you can drink cannabis. It’s made from hemp. It has no marijuana in it. The only psychoactive element is the alcohol, but you can get used to the flavor. You can get used to drinking a beer brewed from cannabis and then maybe when you walk into the dispensary and you see a bunch of stuff you’ve never heard of, but there’s one bottle on the shelf that looks familiar and there’s a brand that you might have tried once before at your local bar, that’s probably the brand you’re going to pick. That’s why we make the one product that has alcohol in it. Because we brew from cannabis, our products are naturally low calorie. We clock in at about 60 calories for one of our beers, 80 calories for another and we are developing a gin which has 10 calories per 1 ½ ounce serving. They are low sugar, low carb. They’re almost entirely, almost all of our products are gluten free. They’re (32.06 unclear) too, actually. From a high level that’s sort of what we’re doing and what we’re developing at Province. So, our product is designed to solve a lot of the problems that the alcohol industry causes and also a lot of the problems that other marijuana beverages face.

Matthew: How do you arrive at the come on of the experience? You were saying the problem before is that if you were to take a cannabis infused beverage, a traditional cannabis infused beverage, it might be an hour and a half before the come on starts. How do you change that around so it’s more similar to alcohol in that the experience is faster?

Dooma: There’s a lot of technologies that people are using to do stuff like this. The particular technology we use is an excipients that we add into the product. It’s a natural excipients. It is something that could be grown organically. It basically changes the way your body processes the cannabis so you process most of it before it gets into your liver. As a result, you start feeling that sensation as quickly as you would start feeling alcohol. It does grow in intensity in a slightly different way than alcohol does, but it’s going to peak and hit you with a dose response curve very similar to that of alcohol.

Matthew: Okay, interesting. In terms of dosage, considering people metabolize cannabis at different rates, some are fast metabolizers, slow metabolizers, but at least that’s consistence. If you’re a fast metabolizer, you’re pretty much always going to be a fast metabolizer, but what are you thinking in terms of dosaging to arrive at what people want their experience to be?

Dooma: I love this question. I’m going to go on my little soapbox for a moment, but I think we’re thinking of dosage all wrong in the cannabis industry. With alcohol it’s so simple. You pick up a beer and it says 6 percent ABV, which stands for alcohol by volume. You pick up a spirit and it’s 80 proof, which for some reason is twice as much alcohol it has in it, which is a little confusing, but most people who drink know what that means. That makes sense when it comes to alcohol because alcohol is a single active ingredient psychoactive. The only thing that is going to intoxicate you in that alcohol is the ethanol. With cannabis it doesn’t work like that.

With cannabis you have 144 different phytocannabinoids. You have all these terpenes and both the intensity and the type of effect you get from cannabis is dependent on a multitude of different compounds. Most states and most countries where medical marijuana is legal have gravitated towards an approach where they measure the dosage based on the percentage of just one of those compounds, the tetrahydracannabinol. That’s not a problem per se, but it’s not a very accurate measure of how strong the product is. If I had, let’s say, two vials and both of them contained 10 milligrams of THC and nothing else. They were completely empty other than that. One of the vials I added (35.43 unclear) and I gave both of them to a consumer . The response from the one to which I added a little bit of cannabichromene would be different and it would be more intense and more intoxicating than to the one which only had the THC.

That’s my message is that you shouldn’t really think of dosage in terms of THC because it’s not the only thing that’s affecting the way that you feel. To go back to our products, our goal is to refocus the industry when it comes to thinking about dosage in a very fundamental way. We dose all of our products such that one beer or one shot of our gin is intended to intoxicate you, if you’ve consumed cannabis, and that’s a very important if, about the same amount as one alcohol beer or one shot of gin would intoxicate you if you’ve consumed alcohol before. There is some aspect there of habituation and certainly just as you can become habituated to alcohol—I remember the first time I drank booze I was 11 or something and I had one beer and my parents gave it to me and drank it and I was retarded. I was out of my mind from one beer. Nowadays, one beer, I don’t even feel it.

The same is true for cannabis. If you’ve never consumed cannabis before and you take one of our beers, you’re going to get pretty rocked, but if you’re a normal consumer you probably don’t even feel that first one, but the second one does a pretty good job and we want to make it so you drink the whole six pack. You go back for multiple drinks at the bar, if this product could ever be sold at bars, because we want to encourage social consumption and responsible consumption. If you just take one and you’re rocked all night, that isn’t either of those in my mind.

Just to go back to the dosing thing one more time, I think the way we like to think about it is the dosage is really important, but it’s not the most important part. If you look at alcohol as an example, if what we cared about was how strong was the drink, then the most expensive alcohol in the world would be Everclear and it’s not. Everclear is one of the cheapest, even though it contains the most intoxicating, it contains the most ethanol, it’s one of the cheapest alcohols you can get. What’s expensive? It’s stuff that contains very little intoxicant. Stuff like Opus 1, fine wines and champagnes are really expensive. We’re willing to pay a lot more, even though they contain very little of the intoxicant. Scotches that are 40 percent alcohol by volume, we’re willing to pay a lot of money for a fine scotch. The fact that if it had a little more alcohol in it that wouldn’t necessarily make us want to pay more.

In cannabis we need to get away from this mentality that something that contains more THC or more psychoactive compounds is somehow better than something that contains less. It’s about the full picture. It’s about the terpenes. It’s about the experience. It’s about the flavor. It’s about so much more than the strength. I think this mentality comes out of this drug dealer mentality. If I was a drug dealer back when cannabis was illegal and I wanted to maximize my profits, I would want to get as much, as strongest weed I could put in my backpack and smuggle from California to wherever I was going to go sell it. For me, I was valuing strength. I wanted to have the most active ingredient and the smallest possible physical space. That would make me the most money, also limit the chance that I’m going to get caught because I could carry another backpack. That mentality needs to shift as we move away from an illegal system to a legal system.

I sort of wonder, I wasn’t around then, but I bet in 1934 when alcohol prohibition ended I bet there was this similar thing. Back in the thirties during prohibition, everyone was making moonshine, which is pretty strong. It was the same idea. You wanted the strongest booze you could pile in the back of your car and smuggle across state lines or wherever and that is what you valued. Over time we evolved to a taste for the finer things in life and to appreciate the other aspects. So we really focus on making products that express quality across the board as opposed to just being the strongest thing.

Matthew: It makes a lot of sense. I mean, it’s really about how the customer frames the whole situation in their mind. What’s my expectation? How does this drink deliver in terms of my expectation? Then the consistency like how often can I repeat this over and over again where I get predictable results. That is a big part of puzzle. I am definitely guilty of not thinking about it, but if you can crack that I could see where you’d definitely make a dent in the alcohol market share. I did hear a professor once at a university talk about the same idea that you were talking about is that when there’s a drug that’s illegal, was formally legal and then it’s illegal, it becomes much more concentrated and potent to maximize taking it across state lines or wherever it has to be transported. You said you need to look no further than a college football game where beer is legal in the parking lot, but oftentimes there’s no booze in the stadium. So instead of smuggling beer into the stadium, people smuggle in—

Dooma: A flask.

Matthew: Yeah, a flask of alcohol. I was like wow that’s pretty similar to what you’re talking about and definitely you can see a lot of proof of that idea around.

Dooma: Yeah I love that. The flask is actually a really good metaphor that I never thought of before. I’m going to use that.

Matthew: What other interesting ingredients are in your drinks Dooma?

Dooma: I think what’s more interesting is what ingredients are not in our drinks. We have a patent pending process for actually brewing a beer from cannabis. That means we brew the beer actually from the cannabis, not from barley, and when you don’t use barley you don’t have any gluten. So if you have celiac disease or gluten free, most of our beers won’t bother you at all. Also we don’t add sugar or other sweeteners or flavorings. Our beers are lower calorie and as a result should be healthier for you than most other marijuana beverages. Our products are very simple. They’re craft beer is designed from quality ingredients and very few ingredients.

The only ingredients in our beers are cannabis, obviously, water, because you have to have water, brewer’s yeast and a little bit of hops because you need hops to make it a beer. There are some trace amounts of excipients that help with the dose response curve. Those are all natural and organic as well, and that is it.

Matthew: So again, the excipients are something that kind of makes a more predictable delivery, accelerated delivery response.

Dooma: That’s right. We use excipients for modifying the dose response curve to make it more similar to alcohol.

Matthew: Okay. What’s the next steps here in Canada that you’re going to be doing to bring Province drinks to markets?

Dooma: Since founding the company we have been working really hard to figure out how to do this. It’s not an easy thing. When you think about brewing beer you typically think about starting with grains because they have carbohydrates. Those carbohydrates can ferment into sugars and the sugars can then ferment into alcohol in the brewing process. It took a lot of work to be able to brew something from a starting material that does not contain carbohydrates. This is a real challenge. Then once you figured that out, making it taste amazing was even harder. I’m happy to say that we have had a really positive response in the past few tastings that we’ve organized to our product. That says to me that the next steps are probably a little more refining on the flavoring and then putting this into the market.

I’ll just tell you a little story to give you an idea of what we’ve experienced on the tasting perspective. We work with a brewer who is based in Colorado. Went down to his brewery and he had prepared a batch of the product for us, and went and picked it up and I was walking out the door, put it in the truck. He said, hey can two of my bartenders try this. I was like, yeah I mean, why didn’t you give it to them before. Didn’t you try it? He’s like, no I never tried it. I didn’t know how much you had and I didn’t want to waste it. Alright let’s do this. We poured four glasses and cheers and take a drink. This was made from hemp and not from marijuana and it had alcohol in it, as I mentioned. We do one product that’s made from hemp instead of marijuana that has about a 6 ½ percent ABV, and that’s an introduction to our product for people who enjoy alcohol.

At any rate, we did cheers. We had a drink and I’m holding it in my mouth and I just don’t know what to say because I’m honest with you. Prior to this, the past five batches we had done did not taste very good, and in fact they tasted a lot like rotten broccoli. I was sort of expecting a little bit more of the same. Actually it wasn’t that bad, but I wasn’t really sure because these guys are the real beer connoisseurs, and the female bartender finishes her drink and she says, when can we get a keg of that and the male bartender says yeah I would pay for that. That’s great. What is it. I was like, oh my god thank you. It was amazing. This bar is attached to a brew house and this brew house is known for brewing these really crazy experimental beers, and there’s four customers sitting right there. Hey, we want to try, because these guys go to this bar to try the new hot beer. They want to know what it is.

I was like, sure. We poured them some beers. Two guys across the bar want to try too. Gave out two beers to those guys and everyone drinks. They finish their glass and the brewer can’t hold it in anymore. He says alright guys, what do you think you were drinking. Customer is like, a pilsner. He’s like, yeah it’s a pilsner, but let me give you a hint. This beer is made from a starting material that you’ve never had in a beer before. One of the customers is like what is it millet, which is a grain, millet. I can’t hold it in anymore so I’m like guys, what you just drank was the first beer in the world ever brewed from cannabis. Then they freak out. The guy’s like what! Is this going to get me high? Then the other guy is like wait, I have to take a drug test for work. Then I have to say, listen. This is made from hemp, not marijuana. It will not impact your drug test and it will not get you high. The only intoxicant in this is the alcohol and they loved it.

I felt like I had had a baby, but it was like a beer baby. It was so weird. This weird moment of pride and excitement. We’ve made a lot of progress. After that we did a bunch of tastings in Toronto. Got really favorable response from those. We need to tweak a few things to the flavor profile, but we’re pretty close. The next steps immediately for the company are firstly to put an alcohol product on the market here in Canada, which is not as easy as it seems. In the US you can brew and just put it on a shelf somewhere. In Canada you have to submit for approval, which we’re certain we’ll get, but it could take about three months. We’ll be pretty close to submitting that.

Similarly to figure out how to get our cannabis, marijuana version for sale in a place where it’s legal to do that. Marijuana beverages and edibles have not been legalized yet in Canada. So, as of right now the product would not be legal for sale. The marijuana version of the product would not be legal for sale in Canada, although we could manufacture it here and ship it to various countries in Europe where it would be legal, and we’re just waiting for recreational legalization to hit and following that, beverages to be legalized so that we can sell our products here in Canada. In the meantime we’re building the world’s first cannabis brewery. Nothing like this has been built before. It is groundbreaking. An offer was just put in on a space that will allow us to build 100,000 square foot brewery, which is truly game changing. We’re very excited with that as well. Those are probably the next steps for us right now in the short term.

Matthew: You mentioned your first couple iterations tasted like broccoli or something undesirable you wouldn’t want to drink. Do you have someone on the team? Can you tell us a little about your cofounders or team members that maybe have specializations in different areas that help you bring the product to market in a way that you think will make it successful?

Dooma: Yeah, we have a world class team, although you do not have to be any kind of an expert to know that our early iterations tasted terrible and they were really bad. One of my cofounders started a gin brand and did pretty well, and he sold that company. Following that, he created a distillery and launched a vodka brand that is a household name vodka and became a worldwide brand, worldwide bestselling brand and then sold that to one of the largest alcohol companies in the world in an absolutely tremendous exit for himself. He’s full time with me in this venture. Has tremendous experience in the alcohol industry.

Also my brother-in-law, who is an advisor to our company, created the bestselling ultra premium vodka in Canada and got that through the distribution system here in Canada with the (50.42 unclear) Alcohol Monopolies, and got that into every providence and territory in the country. We have a few folks with a lot of alcohol experience. Then we have folks with a lot of cannabis experience. One of my cofounders has won now 22 Cannabis Cups, owns a dispensary in California and also one in Las Vegas. Another cofounder was formally an in-house counsel for Privateer and also worked very heavily on their Marley Naturals brand. A really amazing group of founders, a great team.

One of our scientists has an incredible depth of knowledge on chemical engineering and chemistry that’s enabled us to get as far as we have. He’s also really good at managing teams. We have our own in-house product designer and graphic designer who is incredibly well known, has launched products that sold in Nikea and (51.45 unclear) and actually designed the primary design work for an Audi automobile that went to market. So a really well know designer. I think when it comes to marketing and branding if it’s not done in-house, it’s done in the outhouse. Obviously we will work with a lot of outsource advertising agencies, etcetera, but when it comes to actually figuring out the branding, what the brand is going to look like, what it’s going to stand for, we do all that in-house and have our own two person team that’s managing that.

We are right now 11 entrepreneurs and early stage employees at Province, which is a reasonable number of people. Between us we have had four successful exits. We’ve had 14 years experience in the alcohol industry, 13 years experience in the cannabis industry. If you add it all up collectively for previous projects we’ve raised more than $75 million. So, it’s a group of guys who really know how, guys and girls, to put a business together.

Matthew: Where are you in the fundraising process right now?

Dooma: We are in a very unique situation. In my previous business in the United States and for all the entrepreneurs who are listening who are in the United States, it’s a lot different up here in Canada. You have access to things. Because cannabis is federally legal for medical purposes in Canada, and has been since 2001, you have sort of a support system that’s grown up around this industry that you don’t have in the United States, and that enables us to do things that you couldn’t really do in the United States. For example, our law firm is Bennett Jones, which is a major international law firm with offices in nine countries. You can’t really work with those big international law firms as easily in the United States.

In Canada there’s a whole industry that has grown up around supporting marijuana companies, mostly medical marijuana companies in the capital market and helping them with fundraising. So, we’ve been very fortunate at Province to attract the attention of Thought Launch Capital Advisory to help us with our fundraising. These guys are a well known firm out here. They just completed a very successful and substantial fundraise for one of the major licensed producers here in Canada. They’re sort of taking the lead on fundraising efforts, which is great for me as a CEO because it enables me to spend a lot of my time doing things other than raising money. I always believe that a CEO’s job is to raise money for their company, and I think to some extent that’s always true, but you can get a lot of help from that that you can’t ordinarily get in the United States.

We will be attending the ArcView Conference here in Toronto. We’ll be presenting. We were selected to pitch on stage so we will be presenting at that event. We have a little bit of money left in our current round. I expect shortly after ArcView it will be complete, but we are going to open another round around September/October timeframe in which we’ll raise about $10 million. Fundraising is something we’re always doing. The cost of putting together the world’s first cannabis brewery is not inexpensive. We’re looking at needing to raise, assuming revenue hits the targets we’ve set out for ourselves, we would need to raise an additional $40-$50 million Canadian dollars over the next three years.

Matthew: That ArcView, which is a fundraising event for angel investors in the cannabis industry to come together with entrepreneurs. That is July 16-18 in Toronto for accredited investors that are listening, outside of Canada as well that might be interested in going. You’re doing a lot of fundraising. It sounds a lot different. I would love to dive into that, but that’s really not what we’re talking about here, but that seems like a totally different process from what we’re used to talking about. That’s interesting.

Dooma: It is a lot better. I’ll just say on the ArcView front, to date our single largest investor in Province is someone that we met at the ArcView event in Los Angeles. If anyone out there is an entrepreneur raising money for their company or an accredited investor looking for the best deal flow in the country or in the world, I think ArcView is probably the top spot. I’m a big supporter. They don’t pay me to say this, but I really believe in the organization and it’s done a lot for me.

Matthew: Great. Before we close let me ask you a couple of personal development questions. Is there a book you would recommend to CannaInsider listeners that has had a big impact on your life or way of thinking that you would like to share?

Dooma: If you are in this industry or thinking about getting into this industry and you have not read The Hard Thing About Hard Things by Ben Horowitz, you should do that right away before you do anything else. Have you read it Matt?

Matthew: I haven’t read it, but is this Andresson Horowitz the VC Firm?

Dooma: Exactly, and also Loud Cloud and Opswear. He’s a very successful entrepreneur. He breaks it down in a way that it was so eye opening. I read it recently actually. I read it just when I was starting up Province. I was like okay, entrepreneurship it means so many different things to so many different people. There’s a whole class of people for whom entrepreneurship means let’s just do this easy thing, make some easy money like flipping houses, buying apartment buildings. That’s entrepreneurship. You can do that, but if you really want to change the world, if you really want to do something that is fundamentally going to change the direction of society, that’s a hard thing and it’s not going to be easy.

Running a business is never easy. Running that kind of a business is almost impossible. The number of hurdles that you have to face and the challenges associated with operating a business in any industry, specially one that’s trying to make change, is overwhelming. To do that, to do anything in cannabis you’re facing so many challenges. I mean, this is the hottest industry in the world right now, bar none, but it is also the most difficult industry in which to succeed. So I think that book is amazing. The other one that I would recommend also to anyone who wants to start a company in cannabis is by Ashley Vance and it’s the Elon Musk biography. (59.00 audio cuts) how to run your own business by watching how he has run his and started his so successfully.

Matthew: I got the whole answer there for the first book, but then the whole second part on your second book just totally dropped out. So, let’s just do this. You just jump in and go, and there’s a second book.

Dooma: The second book I would recommend is Ashley Vance’s biography of Elon Musk. He is such a phenomenally talented entrepreneur and there’s so much you can learn about starting and operating your own business by seeing how he has done it so incredibly successfully.

Matthew: He made a cameo appearance in this comedy called Why Him with James Franco. I don’t know if you’ve saw that, but it’s a really funny movie. James Franco is like this Silicon Valley entrepreneur that’s super rich. If anybody missed that, it’s just really worth watching on Netflix or Amazon streaming or something. It’s really good. Why Him? Let me ask you another question here. Is there a tool, web-based or otherwise, you use weekly or daily that you consider very useful that you would recommend?

Dooma: Yeah I could do a whole podcast on this, but I’ll try to keep it short. We use Smart Sheet at Province. It’s a fantastic tool. It’s great for long term planning and project management. There’s this debate. There’s two different schools of thought around project management. One group of people likes the Waterfall where you do a GANT chart and plan things out well in advance. The other group of people like the ConBon boards and the Agile workflow. They argue about these different sort of approaches to productivity on the internet all day and all night. What’s so great about Smart Sheet is you can do them both.

It has a ConBon functionality. It also has GANT chart functionality. It is a really amazing tool. I love it. It reminds me, in the video game business we used tools like Jira and Greenhopper. Those tools were amazing for tracking productivity, but they cost an insane amount of money. For just a tiny fraction of what we would pay for those productivity tools, Smart Sheet does almost all the same thing. So, I think it’s way ahead of its time. It’s a great tool. We also use Slack. If anyone from a company sends me an email, I delete it without reading it. Slack is the only way I communicate on phone or in person with people who are team members at Province. I think it’s very efficient as a great way to clean out your inbox and also a great way to foster communication with folks who may not be sitting right next to you.

Matthew: Why has it transformed your life compared to email? What do you think the benefit is for Slack?

Dooma: I don’t have any junk in my email, first of all. I never give out my personal email on any of those web things, like when you buy something and they want an email address, I never get it. I don’t get any span, but even without spam I get 200-400 emails a day, mostly from outside folks. It’s not feasible for me to respond to all of them in the same day. So, if people from my company need something from me and they send me an email, it just gets caught in that clutter and it gets weighed down and it adds to that clutter. The most important thing to me are my team and my employees and what they need. That always has to be first priority, but it saves trouble reading through all my email looking for things that were sent for people in my company because when people need something from me, they either ask me in person or they put it in Slack and I can see it right away or they put it in Smart Sheet.

If someone is asking for me to do something that I can’t do in a split second, it typically ends up in Smart Sheet and then the task gets done because that’s the tool we use for tracking all of our tasks. I think what makes Slack amazing from my perspective is just the ability to have a different way. If you think about it email was made a long time ago and it was made for some kind of military defense purpose. It’s a really inefficient way to communicate. You got to type in someone’s ID, which is their email address. Then you have to decide what you’re going to call this thing that you’re going to say to them, so that’s your subject heading. You have to say “Dear so and so” and write it like a paragraph format. If there’s other people, you have to decide who to copy. There’s a bunch of buttons to press along the way to making that happen. With Slack, you just open the window, type the thing and send it and it doesn’t have to be fully formed. It doesn’t have to have as many steps involved in communicating. I just find it way more efficient, so I’m a big fan of that tool as well.

Matthew: Dooma, what’s the best way for listeners to connect with you and find you online?

Dooma: We have a website, www.provincebrands.com, there’s nothing on there and there probably won’t be anything on there until we’re ready to launch our products, but in the meantime it will allow you to put in your email address. If you put your email address there, we will get in touch with you. I promise. We’re very good about that, or you can find me basically on every social media platform; Facebook, Twitter, Instagram, LinkedIn and you can find Province brands on all of those platforms as well. If you direct message us on any of those, we will get back to you. We’re very good at following up with folks.

Matthew: Great. Dooma, thanks so much for coming on and telling us about Province and good luck with everything you’re working on.

Dooma: Same to you man. Thanks for this opportunity. It really means a lot to me and I really enjoyed it.


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The Five Disruptive Trends Shaping The Cannabis Industry Now

From Stealth Bomber to a Space Age Cannabis Technology with Bob Pratt

bob pratt herbalizer review coupon code

Bob Pratt is the co-inventor of The Herbalizer, arguably the most expensive vaporizer that cannabis enthusiasts consider the gold standard. Bob formerly worked in the Aerospace industry on the stealth bomber.

Learn more at
https://www.herbalizer.com/
Use Coupon Code CANNAINSIDER for 10% off

Key Takeaways:
[1:58] – What is the Herbalizer
[2:50] – Bob’s background
[7:36] – What does the Herbalizer look like
[8:52] – Similarities of Herbalizer customers
[9:49] – Differences and benefits of each temperature setting
[14:44] – Using different strains in the Herbalizer
[21:16] – How fast does the Herbalizer heat up
[25:01] – Bob talks about the brain power behind the engineering of Herbalizer
[29:00] – What is off gassing
[32:04] – Capturing the true flavor of the plant
[33:31] – Using the Herbalizer medicinally
[37:42] – Bob answers some personal development questions
[43:57] – Contact information for Herbalizer

 

Read Full Transcript

How do you create a premium priced cannabis related product that allows you to have a sustainable business, but also brings a compelling and unique experience to customers? That’s the question we’re going to explore today with Bob Pratt, Co-inventor of the Herbalizer. Bob, welcome to CannaInsider.

Bob: Thanks for having me Matt. It’s a pleasure to be here.

Matthew: Bob, give us a sense of geography. Where are you in the world today?

Bob: Today I’m at our office in San Diego, California in the United States. Today is Independence Day for us, July 4th, so the office is clear, but I’m here.

Matthew: I’m in Scotland right now and I have people ask me why do Americans always say the name of a city then the state or the name of the city and then the country. That really had me thinking why do we do that, because other nationalities don’t do that. I think I’ve figured it out. That is we say, I’m in Boston, Massachusetts because it’s so easy to confuse Boston and Austin, Texas or I could say if I’m in Portland, people go Portland, Maine or Portland, Oregon. I was like god, I’m finally glad I narrowed that down. Thank you.

Bob: No worries. Yeah there’s not too many San Diegos, but I think we never know. We’re kind of L.A.’s redheaded stepchild here. Los Angeles that is, and so we like to make sure people know we exist too.

Matthew: Sure, great quality of life you have down there.

Bob: Yes, love the weather.

Matthew: Bob, what is the Herbalizer? Can you tell us at a high level?

Bob: The Herbalizer, the name itself, kind of implies that hybridization of two names. So there’s herbal and vaporizer. Although we’re sometimes called an aroma therapy device, back in the past, just to kind of skirt some paraphernalia issues, it’s really an herbal vaporizer. In short what that means is that it’s a device that blows hot air across herbal material and liberates the essence of that herb usually in some sort of essential oil. Cannabinoids are very well known essential oil.

Matthew: I like that. That might have to be a tagline. You liberate the essence. That’s pretty good. How did you come to start the Herbalizer? What’s your background and how did this come to be?

Bob: I’m an engineer by trade, mechanical engineer and then by profession and aerospace engineer. First out of school I designed components on the stealth bomber at Hugh’s Aircraft Company. Then over time I’ve gone to various really cool projects, and I ended up in the space business for UC Berkley designing and building one or two of a kind research satellites. That gave me a lot of experience in the NASA, ESA space world. It’s funny because we were doing what they call thermal vacuum testing, and that’s where you take your space craft components, put them into a vacuum chamber to mimic the environment in space.

While we were doing this there’s a lot of time to kill because thermal vacuum testing, it’s kind of akin to watching paint dry. There’s 99 percent boredom and 1 percent incredible action where you’re trying to scramble and figure out what things are doing when they go awry. While we were doing this, my friend and I, we discussed something he saw on the internet, and it was a vaporizer. It was a very simple one, but he said he thought this was really an interesting field and asked if I’d be interested in designing one with him and that’s how we got started.

Matthew: Were you a cannabis enthusiast or herb enthusiast before this?

Bob: A long time ago in college. Not so much later in life. It was more just an interesting project. My friend was more of an enthusiast. I was aware of it, but not really the vaporizer end. After we got into it more, I realized that’s like drinking beer through a straw, if you don’t use a vaporizer. You really miss out. I saw Montel Williams give a special, because he has MS, about why would you do something that would be destructive to your body while you’re trying to help your body, because he used it medicinally. The vaporizer is just phenomenal in general.

Matthew: One question about the stealth bomber. I saw one at an air show. They’re pretty impressive looking. Are they still covert? Can we fly those things around and people don’t know, NMB militaries can’t detect that thing or do they have advanced radar now that can pick up on that? Do you know?

Bob: I do. They’re absolutely amazing. They have a radar signature of a bumblebee roughly. So, unless you’re looking for bumblebees, you aren’t going to find them. The only way that a stealth bomber can really be detected is visual sighting. And that’s why during many of the efforts the US was involved in, they would fly under the cover of either night or during a storm because they just really cannot be seen still to this day. They’re a pretty amazing plane.

Matthew: I just got to ask one more question. How is that accomplished? Because I think of radar, it’s like we’re sending out these radio waves. They bounce back and that’s how we get an image of what’s taking up space in the sky.

Bob: Radio is an electromagnetic transmission, and it’s certain wavelengths that they classify as radar. What they do is they send a signal out and they look for a return from whatever is out there to be detected. So, the stealth bomber in particular has its minimal radar signature, as they call it, by virtue of two things. It’s geometry and surface coating. The coating that the plane is made of more or less just absorbs the energy and doesn’t reflect it. Because of the geometry, with no real sharp edges and corners, it don’t have a tendency to even return the signal if it does have any reflected emissions.

Matthew: Wow, that’s some brain power that’s going into that. You could try to create a stealth vaporizer. That would really sell.

Bob: Well we initially tried that with the Herbalizer. We wanted it to be very low key and be able to just sit anywhere in somebody’s house and not really be detected. I guess we do a little too good of a job on the aesthetics because it really does catch a lot of attention from people.

Matthew: Let’s talk about that. If it was in front of us right now, since people are listening and not seeing, describe what it looks like, the shape and size and footprint.

Bob: I guess it might have, it’s an ovaloid, so that’s kind of an egg-ish style shape, but I look at it more as a large beach stone, if you’re familiar with those. It’s very rounded which made it a challenge to fit all the components inside it, but the overall look is very smooth and the finish is what I kind of call the automotive paint style. I’m an auto enthusiast. So when it came to picking colors for the Herbalizer, I worked with our designer and picked a color scheme that was of what I would consider a two tone Audi would look really good in those colors, because it’s a very shiny. It has metallic. It has pearl into the paint and it’s really beautiful.

Matthew: Just so we can get a sense of how much it costs, what does it retail for?

Bob: The MSRP for the Herbalizer Classic is $599.

Matthew: For that price, are you getting some customers that are really serious about investing in their medication? What do you notice about the trends or similarities among your customers?

Bob: The initial demographic we were shooting for was very sophisticated enthusiasts, higher than average income, very much a connoisseur, and we still have that sector of the market. What was really surprising to us was how many people came to our device who are true medicinal users. They did that for a number of reasons. The ease of use, how quickly it comes to temperature. It’s ready to go almost instantly and it’s also very precise. The precise nature of the temperature control is what’s really important for people that want to get the same experience each time. Somebody who is using it medicinally really wants to focus on that.

Matthew: Let’s talk about that. The different temperature settings and the benefits of each one. The differences and benefits of each one. Can you go through those for us?

Bob: There’s three ranges that we call out. It’s kind of a random choice, but one is a low temperature which is a very uplifting, subtle type of experience. There’s the medium range which is really what I think a lot of people prefer, and that’s the more euphoric type of experience. The very high range we get people that just like to set it on the maximum temperature to extract everything out of the herb immediately, but also that higher range is good for relaxation and for pain management.

Matthew: Okay, that’s really good to know. So, once you get to the higher levels, it’s good for pain and also maybe helping sleep and so forth.

Bob: Yeah, very much so.

Matthew: If you were going to watch Caddy Shack or some comedy, which level would you do?

Bob: I would prefer the medium. In fact, that’s I think the preferable one in general just for me personally, but that would be the euphoric end, which would make laughter all very easy and that’s great for watching a comedy. What we kind of have here though is that you could look at this as what you would do during different parts of the day. For instance, the very low temperature, the subtle uplifting, great for energizing yourself early in the day. The medium would be great for unwinding at the end of the day, maybe relaxing with friends, watching your favorite television show on TV. Later in the day, as you’re getting ready to go to bed, you could use the higher temperature. This can all be accomplished with the same herb within the bowl.

Matthew: Let’s contrast the low and the high and skip the medium for a second. When you’re getting the low, you’re just taking some of the terpenes and essence of the plant that would come off at a low level, but when you’re at the high do you get the same as the low plus, is that what’s happening?

Bob: The way that boiling works, and that’s really what this is because you’re vaporizing a liquid form into a vapor or gas. So what we’re doing here is we’re taking whatever cannabinoids and they’re broken into the terpenes of course also, and whatever boils at that temperature and below will be vaporized when you run hot air across it at that temperature. The way this all works is kind of hypothetical at this point because we look at it anecdotally. I hate to use that word because anecdotal evidence kind of has a little bit of a stigma of not really knowing what we’re doing, but the thing is a lot of people have related their personal experiences on this to where we feel very confident that what I’m about to say is very true.

That is that these temperature ranges are such that you are liberating the cannabinoids that have these certain effects. There are lexicons which describe what each cannabinoid effect is, whether it be euphoric or mutagenic or various things. So, the hypothesis is that the lower temperatures boil off the cannabinoids that have the lower temperature. This is true of any herb. It just so happens that cannabis is a really complex herb with 28 well known cannabinoids. What exists there is the thing that I think is really interesting and really deserves a lot of research. Unfortunately we’re stuck with the Schedule I narcotic moniker for cannabis to where they really haven’t done a lot of research. So, these are still just hypothetical things.

This so called selective extraction, it’s been kind of a pet idea of mine for a long time, and I think a lot of other people are coming onboard with it. That is you can actually vaporize at a certain temperature and not even use the vapor from that and then vaporize at a slightly elevated temperature and really take a narrow band of cannabinoids out into the vapor and use that for various therapies. CBD would be a real nice one to use in this way, the cannabidiol, which a lot of people feel has probably the majority of the medicinal use within cannabis.

Matthew: How do you experience strains different, if at all, in the Herbalizer?

Bob: Well the various strains all have a different make up. My good friends up at Steep Hill Labs, they’re one of the testing organizations that actually looks at a strain and will give you a breakdown of what percentage of each cannabinoid are present in it. A different strain that is maybe more heavily containing cannabidiol versus THC will definitely have a different effect. You’ll get a more euphoric experience with the heavy THC, but the word is you’ll get a little bit better medicinal experience with the high CBD strain. They have all kinds of other cannabinoids, like I say, 28 well known. Each strain is a little different and that’s why people, and this is one again their own experience, they lock on to a particular strain that they like because of the experience they get.

Matthew: That makes a lot of sense. In my mind I feel like if it’s too high of THC and not high enough CBD, then everybody’s body chemistry is a little different, but there’s the paranoia factor is just a little too high where it’s not optimal in my eyes. Everybody is so different. Everybody’s looking for the THC, but I think that idea may start to be shifting a little bit to be like well, this is the outcome I want and I don’t necessarily just want to look at this one variable and say let’s crank this baby to the moon.

Bob: Right. Well moderation I think is the key with most things. The synergy of the plant, which is why we here at Herbalizer really promote using flower, because the various cannabinoids work in concert with each other. That’s why maybe you don’t want one that is basically engineered to be too high in one without being balanced in the other. So a lot of people I think are coming to the same conclusion that you are that they like to have that more balanced strain. Of course that’s where we really promote our device in the consistency of the experience. If you use the same strain and you vaporize with our device at a certain temperature, you’re going to get the same experience pretty much each time outside of your own personal things or you sleep one day than the other or maybe you just had a pot of coffee or who knows what. As far as the delivered vapor, you’re going to get precise temperature control, giving you repeatable extraction.

Matthew: I think that’d be a good reality show if we could get people to drink a pot or two of coffee, then hook them up on a high level of the Herbalizer with some great herb in there and just watch what happens.

Bob: That’s funny, as I take a drink of a cup of coffee. One thing we did early on, which is kind of funny, we actually vaporized coffee bean and it worked.

Matthew: What was that experience like?

Bob: Well it was the same experience as caffeine. It definitely made you feel invigorated, but it was really quick. It happened within 30 seconds. What was more interesting is that it relieved asthma conditions from a friend of mine who was dealing with mold in his apartment and he didn’t realize it. He was just having trouble breathing sometimes and would wheeze. I said well an old backpacker’s solution for people that have an asthma attack when you’re out in the wilderness is to give people coffee. So, why don’t you try vaporizing some coffee bean and it sure enough worked. Once again I always have to back off and say these are not medical solutions. These are ideas in medical therapies.

Matthew: Right we’re not doctors. Talk to your doctor, all disclaimers.

Bob: Absolutely.

Matthew: When you experienced the coffee bean vaporization it comes on quicker then I imagine it fades quicker too.

Bob: I probably drink too much coffee so it all fades pretty quick with me. I don’t think it necessarily—it might be a little more peaked I guess is what you’re saying. The fact that it gets into your bloodstream very quickly through the lungs, you probably feel it right away, but the nature of caffeine is it stays with you quite a while anyway. It’s probably just a little bit more intense and shorter.

Matthew: Bob I think you’ve lit a fuse in my mind. Now I’m thinking of all the different things I can vaporize.

Bob: Well that’s good, and that’s what we promoted early on. We even did focus groups with a local herbalist, very early in our development at the Self-Heal School here in Ocean Beach. His eyes lit up when we first talked to him about the idea of vaporizing herbs instead of using tinctures and teas and salves, balms, because those all take a long time for the body to react to them, but the so called phyto-inhalation, which is the inhalation of plant matter, is very quick and he knew this. With these focus groups we actually had people do akin to what I was alluding to earlier in that they would record what they were feeling like, had they had any coffee that day, how long ago they woke up, and then they would try a certain herb and we prepared a dozen herbs in little zip lock bags for the people in the focus group to try. That’s how we got a lot of the anecdotal evidence about what various herbs, if they actually did as advertised, when you vaporized them. Unfortunately we kind of had to back off from that as a way to market the device because education is really tough. It takes years. We really didn’t have the infrastructure to do that.

Matthew: That makes sense. Let’s switch gears back to the device and talk a little bit about how you get the temperature up to speed. How fast to get it to a low, medium or high setting?

Bob: When we time it we time it to maximum temperature. Of course any temperature below that would be faster. I guess we do it a little bit for the salesman wow factor. Initially when we were sitting down the specifications we wanted to hit for the device we wanted to have it heat up to full temperature in 30 seconds, and we thought this was pretty lofty considering that the main competitor on the market at that time was between four and a half and five minutes. The first prototype we did, which was a full blown operating unit, was about 40 seconds, and we decided that wasn’t quite what we were after. There was some going back and forth, but we decided to try to do a little bit better job. WE did a little redesign to it. We got it to be 15 seconds, I’ve had people say less. It happens so quickly that you think it’s instantaneous basically.

Matthew: That’s great. These are first world problems we have. Gosh, my vaporizer takes too long to heat up.

Bob: It’s funny though because it’s a real sticking point for a lot of people because say they want to go to a movie, and they have their friends over, they meet at one place and then they decide to walk down the street to their favorite movie theatre and they say hey, anybody interested. Sure. We wait, tick tock tick tock. It’s that anticipation commercial with the ketchup right. You’re really cognizant of how long it takes when you’re waiting for it.

Matthew: That’s true. It’s funny that you mentioned that. I was reading an article about Jeff Bezos, the CEO of Amazon, the questions he asks himself to kind of decide the trajectory of his business. He says, I don’t think about what will change in 15 or 20 but I think about what won’t change. He says, for example, I know that people will never want their items they ordered slower. They’ll always want it faster and they’ll always appreciate it being faster. Gosh that’s true. He goes, I feel confident about that. Whereas so many other things in the market may change. If I focus on that one thing, then there’s a good chance people will come to us, assuming our prices are good.

Bob: Yeah, value point is always an argument among people who make products. Speed, either of delivery or of use, nobody ever wants it slower. That’s for darn sure.

Matthew: I heard the Chairman of Google Eric Smidtz say the same thing. He said well it’s got to be fast first or no one will have the patience to care about, to see what else we can deliver. Like how good our search results are, it’s just got to be fast first. That’s really true. I think this is only going to accelerate strangely, maybe for the better, but in our hyper connected world where everything is going to speed up to the point where if we were to jump five years in the future would be oh, I had to wait 30 seconds for my Uber, I’m outraged.

Bob: Yeah, I used to be a collector of books, particularly technical books in my field, which was classical mechanics. Nobody uses books anymore. It’s amazing to me. They go, why go to a book shelf and try to figure out the spot where it’s at, just do a Google search. Times have changed, that’s for certain.

Matthew: Can you just tell us how you accomplished the speed and the temperature because that sounds like a sticky problem. I want to hear if there’s any engineering brain power behind it to get hot that fast?

Bob: There’s downsides and upsides to doing something from scratch. In other words, a design. You’re free to make certain choices early on that you can design in certain characteristics. Having a lot of design experience I think helped us out here because I knew ahead of time that I wanted to keep the thermal mass or thermal inertia of the device low. What that means is any part that could get hot in the device while it was heating up I wanted to keep the mass of that very small and also insulate that little isolated area of components that get hot from the rest of the components, were not wasting heat, heating up the rest of the device.

So by doing that from the get go, we kept this concept of the thermal mass or thermal inertia low in the device. By doing that then, any heat that we take out of the heater goes directly to heating the hot air. It’s kind of like a slug of air that is in the device until you turn it on or inhale. I guess if I were looking for an example to try to tell people what this is like, imagine a delivery truck versus a Ferrari or a Corvette, since we’re here in the United States. A car with a light flywheel can rev or increase the RPM of the engine very easily and it’s very responsive. The engine RPM goes up and down very quickly. Where a delivery truck, a more massive device needs an engine that has a little slower response, but is able to be a little bit more steady.

So you end up with heavier components, heavier flywheel, not so responsive. The downside then is stability. What we did is we also used a microprocessor in the control of the device. We used an algorithm which actually keeps the temperature controlled very tightly. It fluctuates at a very small amplitude very often, but it’s under tight control. So that responsiveness is then controlled to have very good temperature stability because of the microprocessor within the unit.

Matthew: What controls the microprocessor? Is there a software algorithm or how do you do that?

Bob: They call it a PID control style. Basically that looks at where the temperature is and where you want it to go and has various factors that weight the temperature difference and the slope of the temperature. In other words, the rate that it’s increasing or decreasing and tells the heater what to do. It’s a custom algorithm for our device that was arrived at empirically for the most part, which means using the device, turning this control algorithm to the characteristics of the device. There’s a lot of brain power within that microprocessor. We all know how smart our phones are now. The microprocessor that’s in the Herbalizer is only probably utilized to about 10 percent of its capability. So, it can handle anything we throw at it as far as that control algorithm.

Matthew: Tell us a little bit about off gassing. You mentioned that briefly, but I want listeners to understand what that is. I’ve experienced this with cheaper vaporizers and maybe you can explain why that’s not desirable.

Bob: The whole concept of off gassing, if you don’t mind me digressing just a bit, it’s really only a know factor to people in certain special industries. So, being part of the space industry or business, you worry about having spacecraft up in orbit where when they get warm the components give off their volatiles. The reason why this is important is because a lot of spacecraft have optics, particularly the spy satellites, but also the telescopes that we have on orbit. One of the ones I worked on was a solar platform that looked at the sun for solar flares and coronal mass ejections. Then you’ve also got various telescopes that look off and do star mapping. You don’t want any of these volatiles to play off onto the optics.

In the space industry you’re very careful to not put components in your system that use materials that off gas. They call it out gassing. The idea is that you’ve all maybe heated up something that was painted and you smell something. That’s the volatile that you’re smelling. We don’t want any volatiles to come into the hot air path when we are heating our unit. We are very careful to choose ceramics. Glass in particular is one that we used, that will not off gas, also stainless steel is a very good material for not off gassing. Again, we designed this in from the outset that we would have a hot air path. Actually many of the materials that surround the heater itself are of this nature that they do not—nothing is completely not out gassing, but it’s imperceptible. They’re as good as you can get. That’s really a nice thing for two reasons.

First of all, the health benefits. You don’t want to be inhaling these volatiles that come off of things that are solvents and such. Just like you really don’t want to be inhaling benzenes, carcinogens from burnt plant matter, which is the whole reason behind the vaporizer. If you’re going to the extent of using a vaporizer, it really made sense to use to use a vaporizer that doesn’t introduce anything else into the hot air flow except the essential oils from the plant that you’re trying to liberate.

Matthew: Good points. I think that’s really important because I think we’ve all kind of smelled that or experienced it, but didn’t know quite what it was and thought through how that could be minimized. Is there anything you can tell us about how you capture the true flavor of the plant?

Bob: A lot of people are really surprised when they use our device. Even recently we’ve introduced some glass attachments that go with it. The thing that pretty much hands down people say is wow, that tasted really good. The plant itself, without anything else being introduced into the vapor, tastes really good. People are oftentimes surprised because they had be using other means, particularly people that actually smoked it. Outside of the kind of almost excitement that’s generated from inhaling something that’s a little bit caustic to your system, once you get passed that and you realize that you just want to inhale the vaporized essential oil of the plant and you get to where you then become what I think is a true connoisseur where you actually taste exactly what you’re getting out of each strain. Some of the guys, they’re amazing, they’re like wine tasters. They know exactly which strain just by the taste of it, when they’re using a high quality vaporizer.

Matthew: Yeah, I don’t doubt that. Now do you ever anecdotally hear about people using the Herbalizer to alleviate any specific symptoms or addictions, like opioid addictions and things like that?

Bob: Yeah, what’s come about is kind of one of my pet areas. We have a group in Uruguay at the main university down there. By the way, Uruguay is the first country to completely legalize cannabis. They’re doing a couple of different studies, and one is to get people off of crack cocaine through using cannabis as a way to taper off and control the cravings a little bit. I’m not sure of exactly all the little nuances of that, but it’s a university run program in concert with their government that we’ve actually given some devices to. I made some 220 volt devices for them and supplied them. That’s always been something that I’ve really felt good about us doing. It’s kind of that give back end of things. One of the real surprises though, and we here in the US and particularly on Independence Day, salute and a shout out to all the veterans, as I wave my little flag in case we’ve been on video.

We have a lot of veterans that part of the VA protocol, which is the Veterans Administration, for treatment of people that come back with either lost limbs or anxiety issues or things like that, one of the main things was opiates. Opiates are really addictive, they’re really expensive. Now we’re having an opiate addiction crisis here in this country and probably elsewhere in the world. One of the amazing things is that a lot of these veterans, they just weren’t happy with that kind of regimen that they were being directed towards and some of them turned to cannabis. I know some of them have actually come here, even though they don’t live in state, just to visit us. I remember one in particular. The poor guy, he was not really communicative, really reserved, introverted, kind of a pasty white complexion, and it turned out he had a lot of issues going on with his internal organs that have been compromised through the prolong use of opiates. Just general nature.

What we found out later was very much compromised. We made him a nice little veterans deal on a device and he and his wife said thank you and took off. Nine months later they came back into the office just because they were out there vacationing. I think they lived in Arizona. They wanted to stop by. He came in and I really didn’t recognize him at first. His skin had returned to the nice flesh color. His eyes were wide open and bright. He saw me come out of my office and he rushed over and just gave me a big hug. He told me how happy he was that we were able to hook him up with one of our devices. He had changed his pain and anxiety regimen from opiates to cannabis. It completely changed his life. Afterwards while he was buying some accessories from one of the people in the office, his wife came over to me and no hug, she said to me, thank you so much for giving my husband back to me.

There are other cases like that similar, where they have come to our office, but I know that there’s countless cases out in the world where people are using our device and others, but we like to think ours predominantly, to get that kind of relief and have a lifestyle back where they can manage pain in a way that they choose.

Matthew: Wow, that’s an uplifting story, especially on the 4th of July. Thanks for sharing that Bob.

Bob: Absolutely.

Matthew: Bob I like to ask some personal development questions to let listeners get to know you a little bit better. With that, is there a book that has had a big impact on your life or way of thinking?

Bob: Not really one in particular, but I kind of felt we were heading this direction and I thought about this. I’m a classic over achiever. You spend nine or ten years in college, that’s probably problematic. Also I’ve also been very driven in that way. I’d say the thing that probably made the most impact, one time when I was in grad school up at UC Berkley, we were at an afternoon beer, wine, cheese kind of thing. The department chairman came up and just asked me how I was doing. I said ah, I’m just so under the gun here. I’ve got so much going. I’ve got a to do list you wouldn’t believe. He asked me he said, tell me about this to do list. I started telling him. Basically it came out that there were 30-40-50 items on it and he just shook his head and he said, that’s way too many.

If you have more than three to five things on your to do list for any one day, you’re over extending yourself. I had no idea the merits of he was telling me until much later. That’s really the way that I kind of gear my life now is that I look for what I call the big potatoes and I don’t worry about the small potatoes. What I find is that gives me the ability to interact with people. I have more margin in my time. I can actually be a lot better friend and coworker and human being as I call it to other people. It just makes life a lot more fulfilling. I still get done what I need to get done. It’s just a nicer more relaxed way to deal with things. So, my peace and serenity are very important to me. I live out kind of on the outskirts of town here, and I have a nice chunk of land where I can go out and water my trees, my fruit trees and I just enjoy life.

Matthew: That’s great. Is there a tool, apart from the Herbalizer, that you consider important to your day to day productivity?

Bob: Eating right. I think nutrition. Come to lately is super important. I’ve cut out most processes flour and sugar from my diet. What I’ve found, I had some sugar the other day and it put me into a tailspin. I had trouble remembering things. It was really wild, the difference. Just noticing what that processed food can do to a person physiologically within the brain, just your general energy level. I try to really put nutrition up there high on my list.

Matthew: I agree with you there. That’s very helpful. I’ve been drinking the butter and MCT oil coffee.

Bob: Bulletproof.

Matthew: Yeah, for years now. I remember when I started people said oh that’s going to clog your arteries. You’re going to die of a heart attack. My blood counts have been better and better with the less sugar intake. As long as they’re good high quality fats, it seems to have a beneficial impact. It’s not like I can sit there—after a certain amount of butter you just feel so full that you’re not slamming it, but with cookies it’s like you can eat sleeve after sleeve and it’s just like, all I know is that I have a craving to eat more cookies. It’s like they engineer these foods to make them so palatable they’re like mind crack, hamster crack.

Bob: They’re addictive, yeah. It’s funny that you mentioned that because that’s how I start off my morning is with the purified coconut oil, the grass fed unsalted butter in my coffee and it sounds like a crazy thing, but it’s really good. Little bit of stevia and some almond milk and I’m set.

Matthew: I do have a little variation too. I’ve started to add a couple drops of xylotol and then even some unsweetened cacao, chocolate powder. Just a dash of that and I’m loving that. If people haven’t heard of what we’re talking about here, I can include a link to Bulletproof coffees so you can understand what that is and some of the benefits, what Bob and I are talking about here. Bob, before we close, can you tell us where you’re at in the fundraising cycle, if you’re still looking for capital or where you are?

Bob: I’m glad you asked. We’re at a really interesting point in this company’s trajectory. We had some issues with some former employees that we’re just coming to closure on now. We are really poised to make an aggressive move into the future. That would really come about with a strong investment because we’d like to really jump into the arena a little bit more strongly. Right now we’re kind of a small company, a small player. For various reasons we were handcuffed a little bit as far as how aggressive we could go after things. We would like to increase our market reach and increase production, which helps us bring the cost down. All the things that we really want to entertain, and a lot of that starts with investment.

If people are interested in what we do and in our company, they can certainly reach out to me and see if we are a good fit for them. I know there’s a lot of people really anxious to get into this market sector because you talked about your Amazon guy, looking 15 years into the future. I think people that are doing that with the green market, they really see nothing but increase across the board in every sector.

Matthew: If they do want to contact you about becoming an investor, how do they do that?

Bob: We have a website. It’s www.herbalizer.com. I’m sure you’ll put a link up for us on that. If you wanted to get a message to me, the easiest way is through support. You can just send an email. They’ll give it to me and then I’ll contact you.

Matthew: Okay. Well Bob, thanks so much for coming on CannaInsider today and educating us. Good luck with the Herbalizer. It’s really an interesting product, and I encourage everybody to go to the website and check it out.

Bob: Matt, it was truly a pleasure. I really appreciate what you do and you’re a true pro. Thank you very much.

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The Five Disruptive Trends Shaping The Cannabis Industry Now

LeafLink – The Booming B2B Cannabis Platform That Drives Sales

ryan smith Leaflink

Ryan Smith is focused on streamlining the process of bringing cannabis cultivators, infused products companies, and dispensaries together. If you want your cannabis product to get into dispensaries you need to hear this interview.

Key Takeaways:
[0:59] – What is Leaf Link
[1:30] – Ryan’s background
[3:24] – How does Leaf Link work
[6:07] – What type of companies are using Leaf Link
[8:26] – Most common transactions on Leaf Link
[10:03] – What makes Leaf Link different from other platforms
[14:01] – Ryan talks about Leaf Link doesn’t touch the money in a transaction
[14:42] – How does Leaf Link generate revenue
[15:58] – Bringing attention to your product on Leaf Link
[19:10] – Ryan talks about sending samples
[21:35] – Ryan talks about the future of Leaf Link
[25:40] – Ryan answers personal development questions

Learn More at
https://leaflink.com/

Important:
What are the Five Trends That are Disrupting The Cannabis Industry?
Find out for free with this cheat sheet https://www.cannainsider.com/trends

Read Full Transcript

Cultivators and infused product companies are always trying to get their products into more dispensaries, and dispensaries are always looking to sell the products that customers want. Here to help us understand how these parties can connect is Ryan Smith of Leaf Link. Ryan, welcome to CannaInsider.

Ryan: Hey Matt, thanks for having us.

Matthew: Give us a sense of geography. Where in the world are you today?

Ryan: Today I’m in a very homey Airbnb in San Francisco. For the next few days I’ll bounce around between California, Colorado and New York a bunch.

Matthew: Okay. At a high level, what is Leaf Link?

Ryan: Leaf Link is a wholesale B2B management platform. We connect now over 1200 retailers across 5 states with more than 200 of the leading brands. Everyone from Incredibles to Dixie to Cheeba Chew to Kiva to Wana and they’re our clients. We provide two things, an online marketplace where they can communicate and purchase inventory, and an order management systems that sales teams use to process those orders internally.

Matthew: What’s your background before starting Leaf Link, and why did you start it?

Ryan: Sure, my background I went in as an undergrad in college. Started an investor relationship management platform for real estate. My family is in real estate in New York. I found there’s really an old school industry and we could build this solution for how general partners communicate to limited partners, so we launched that my senior year, raise a bit of capital, sold it to a public company back in 2014. Then I met my co-founder Zach, who was at LimeWire back in the day, previously at EBay, and we began investigating the space and seeing how we could support other amazing pioneering entrepreneurs building businesses.

Matthew: I think that’s a saying about general partners and limited partners. At the beginning of the relationship, the limited partners have all the money and none of the knowledge. At the end, they have no money and all the knowledge. Have you heard that before?

Ryan: I guess it depends on who you’re getting (2.27 unclear) to the general partner.

Matthew: I don’t know, that’s a saying I’ve heard before. I wanted to see if you thought that happens at times.

Ryan: Yeah, I mean, definitely it happens at times. It’s more than that, actually a pretty scary thing that’s happening in this industry particularly is people getting pretty wide eyed at any potential opportunity in the space. So, definitely people losing their wallets for not properly placing capital.

Matthew: You said you’re in five states right now. Could you say those states one more time?

Ryan: That’s right. We originally launched about 15 months ago in Colorado, then Washington. Now we’re also in Nevada, Oregon and California as well.

Matthew: The dispensaries and cultivators and these different parties could be doing this on their own, but it’s not the most efficient way or the best way and there’s some tradeoffs to try to do it that way. How does Leaf Link make that whole process better?

Ryan: The way we came up with Leaf Link was really by entering with no preconceived ideas. Zach and I flew out and we met with whoever would take a meeting with us, brands, amazing brands, cultivators, retail purchasing managers and just said, what are your problems. Tell us about them. We looked for patterns. We found that in the world a year ago, before we launched, a purchasing manager at a lean dispensary, in any state, is buying from somewhere between 20 and 50 brands every other week. In order to do that they need to manage PDF menus and emails. They send text messages with purchase orders, faxes sometimes.

Matthew: Oh, I hate that word! We got to stop faxing. What year is this?

Ryan: Exactly, but the industry is so just grinding away and trying to get everything done to grow, and people are not stopping and thinking, this doesn’t make sense. Why am I spending a day and a half a week placing orders when I can just do it. Zach and I thought we could virtualize all this, and that’s what we built Leaf Link to do. So now people can purchase from all those brands, live menus in one cart.

Matthew: The biggest benefit is, or I should say, it solves the biggest frustration for the purchasing manager. It makes that person’s life much better compared to the others. I mean, it’s solving a problem for the other participants in this platform, but you’re saying it changes their lives probably because they go from dealing onsie, twosie, did you get my message or did you get my invoice, did you get my purchase order to it all being streamlined.

Ryan: So what we found was—that’s where it started, and we just met with purchasing managers and we heard that story. Then we thought, let’s just follow the life of an order. What happens once it gets through that fax and text message to the sales team, and then we got there and we realized oh my god, they’re putting it on post-it notes and whiteboards and Google Sheets, and that’s how it goes from the sales team to the production team to the distribution team and accounting team. We asked some of the sales side companies, these brands whose names you know, what was the most sold product yesterday or what moved really well last week, and they would give you a subjective answer. “I think it was this particular product.” I said, you don’t know. How can you not know? How do you make a proper decision on what to build next? So that’s where we built the order management tools as well that hook in seamlessly into the marketplace.

Matthew: Okay, that makes sense. What are the categories of companies that are on Leaf Link right now?

Ryan: At Leaf Link we have this general theory for the industry, and we believe every month it seems to become stronger and more validated, but brands are everything. This whole world of mom and pop growers and these amazing pioneering entrepreneurs that were in the space, have been in the space for 5-10-15 years, they’ll always be that part of the market. But the companies that are scaling the fastest, that are creating product that touches the most people, that are raising capital are brands. Like any other industry, they’re packaged goods, they’re consistent, people can understand what they are each time. Branded products, whether it’s edibles, creams, THC infused concentrates, all that stuff, and some flower as well. Some of the branded products are where this industry is going.

The three buckets of clients that we serve are—the first we like to think about is industry leaders. Companies that have more than 50 percent of the market that they’re selling to every day, but they need some structure. They’re looking to grow into the next state, that’s the first bucket. The second bucket are companies that are not brand new, but they want to one day be in that first tier of industry leading 50 percent plus of the market they’re selling to, and they’re looking to create some structure on how their teams operate, they’re hiring new people. They want to understand their business in a more granular data level. That’s the second. The third is brand new products. We’re just launching, we’re putting out one or two skews, maybe five or ten, and we just want to tap into this community that we built on Leaf Link of active buyers that can notice your product. There’s really no other way. There’s a lot of invitations around advertising in this space, but there’s no other community as active in purchasing as that on Leaf Link. That third bucket is you can basically start from nothing, progress your way up to an industry leader and we have different tools that are valuable to each of those different groups of sellers.

Matthew: If you were to login to your executive dashboard now and look at the transactions that are taking place and what’s happening on the platform, what are the most common types of transactions we would see right now if we were looking over your shoulder?

Ryan: In terms of product types?

Matthew: What’s the most frequent type of thing you see between different parties on the platform? What’s the frequency of different types of activities?

Ryan: Each market is a bit different. In Colorado there’s been this explosion of concentrates. Branded concentrates are super popular. They’re all over the place. Lots of inbounds from concentrate companies wanting to get listed. That product is selling really well. We’re seeing some really ingenious, everything from gum to sparkling water. You pretty much name it and we’re starting to see these (9.12 unclear) products on the platform. It seems like the strategy of a lot of companies now is what—everyone is seeing baked goods. Gummies always do really well. What new can be created to change that experience for the end consumer, and those are the ones that get a lot of attention because it’s completely fresh and it’s exciting and different and something you haven’t seen before.

If you think about it from the retailer perspective, in a lot of these cities it’s crowded. There’s more retailers than Starbucks in Denver, and you need to find that new cool product to beat the person across the street that’s running a dispensary. How can you make yourself more competitive and that’s by having the great products that are Leaf Link for you to purchase.

Matthew: There’s a couple B2B platforms out there. What makes Leaf Link different?

Ryan: There’s definitely companies that have a similar goal to be what we are. A lot of them are ones that we hear about at conferences or on podcasts or interviews. When you go into the market and you speak to the brands that we work, the retailers that use us every single day, those names don’t really come up. I think there’s a lot of thoughts as to why that’s the case, but ultimately the main differentiator is people in this industry have been screwed over by companies, fly by night companies before. People are not paying for products that have been purchased.

Our differentiator is that we over deliver on everything we say we’re going to do. We execute endlessly on building this incredible platform that now has this general market acceptance and is in 80 percent of the retailers in Colorado, 70 percent of the retailers in Washington. That’s the main differentiator is that we do what we say we’re going to do. We do it really well, and we like to think that we’re leading the industry into this V2 of what cannabis will be as an example, this tech first industry example for other industries in the future.

Matthew: Let’s get into a little bit of the nuts and bolts of it. Let’s say I’m a dispensary purchasing manager. I jump on Leaf Link and I make an order of 1,000 units of gummy bears. What happens next downstream? What would I expect to happen?

Ryan: If you’re a dispensary in Denver, you would request an account with your license number that we would then check to make sure it’s in good standing with state regulatory bodies, and that’s the case in each state. Then once you’re approved for an account, you can login and each market in each state stands alone because obviously you can’t ship across state lines. As a Denver dispensary buyer, you’d login and you’d see all the available brands in Colorado with live menus, any deals that are happening for particular products, new products that have been launched. Then general community components as well around news that’s available to people that are active on the B2B side. Then you can shop products.

You can go to their menus. You can add different products from multiple brands and vendors to your cart, figure out the total expense, hit submit, and then all those orders are sent out to each of those individual brands, and you can then track the status of those orders as they’re accepted, packed and shipped. Just like on Amazon when you get an update that your package is on the way.

Matthew: Is there an estimated number of days that I would take or does that get communicated after the order?

Ryan: Like a ship date for example?

Matthew: Yeah. If I place this order for 1,000 units of gummies now, before I order, do I know it’s going to take 10 days or does that communication take place after the purchase?

Ryan: Since we don’t touch, grow or sell the product, we don’t touch the capital either, it’s really dependant on the brand and how these buyers—it’s the same notion they’ve always had. Some companies might list on their product and company pages how long delivery and processing times take. There’s actually a tool that allows them to update the buyer with the shipping date so they know, but generally we see most orders are accepted the day that they’re placed. Then depending on the location of the buyer it could take anywhere from one day to a week, I’d say. Unless it’s far off in a distant part of the state.

Matthew: You mentioned you don’t touch the capital, the money flow. You let that occur between the two parties. It’s not going into escrow or anything like that.

Ryan: That’s right. We want to be really respectful. There are great companies operating in this space and have been for a while, and they have certain ways of settling up, COD or using cash for example. Those are definitely challenges that we are keeping our eye on and things we’ll look to solve in the future, but for right now we want to stay hyper focused on creating this community and marketplace that people can communicate and place orders on in terms of handling the deliveries and stocking the product, touching the capital, they still do that.

Matthew: Okay. How does Leaf Link get paid? How do you generate your revenue?

Ryan: We right now charge a monthly fee for companies to be active on the platform. It’s free for retailers, depending on the number of brands, how many states they’re live in, how many brands they have. Those are the things that we use to judge what the payment should be monthly for them to be on the platform. I mentioned it’s free for retailers right now.

Matthew: Yeah, you got to keep the friction away from the buyers, the people pulling out their wallets. Good move. Let’s say the roles were reversed here and I have a new cannabis infused product, something interesting and fun. What would you do if that was your product and you wanted to jump on Leaf Link and put the best foot forward to get the attention of retailers.

Ryan: Starting off, not being on Leaf Link, a lot of the states that we’re in is really a disservice to your company. For example, if I’m starting a company and I knew that I could tap into 600 retailers in Colorado for example, just by paying a small fee immediately and I’m brand new, it’s the cheapest salesperson you could ever hire. Cheapest advertising choice. So, what I would do is hire a photographer, take amazing branded photos with beautiful layouts and come capture that really demonstrates what our mission and our brand is, and I’d spend time writing as well what the detailed description is. Thinking a lot about pricing, talk to customers about that.

Then put it on Leaf Link, and once it joins Leaf Link, with every brand that comes on our marketing team connects with their point of contact and we coordinate marketing blasts to the whole Leaf Link community, whether through the platform and/or through general email to let everyone know that there’s this new great brand. Matt’s ABC Products are now live, and Matt’s launching with a deal, you guys should check this out. Then what we tend to find and this is among the most exciting transactions that we see are great companies will always get deals because they are well known. When a company no one knows joins Leaf Link and they start getting sample requests or just straight up orders because they’re on Leaf Link, that is so exciting. We have a team slack where we all celebrate when small companies have wins because that to us (17.24 unclear) another entrepreneur’s dream to the next level, we love that.

Matthew: Yeah, that’s great. That’s got to feel good when that first one comes in.

Ryan: Yeah, it makes it completely real. One is million more than zero.

Matthew: You should trademark that. That’s a good one. How do merchants then, after they launch, get the attention on the platform? Can you advertise or how do you stay at the top of mind for the retailers once you’re in Leaf Link, if you’re trying to sell to retailers?

Ryan: We have a ton of programs, some virtual, some manual that we use to engage buyers and sellers. What we’ve found some of our clients actually doing on their own, which has been really affective, is they are sending information out to their buyers to let them know this is how we accept purchases. They put it up on their websites, they put it in their marketing material. We go to conferences now and people say they find us on Leaf Link. These are things that companies have just begun doing because they see the value, they see the transactions that they’re getting. It’s exploding for them and they see that they want to add fire to that or they want to add gas to that. That’s been a great tool for us.

Matthew: Did you say you could request samples on Leaf Link, if you’re a retailer and you like hey I just want to request a sample here. Okay, now is there any way to do that to make yourself stand out more than another, I mean include some other collateral besides sending a sample? Do you see that executed? Is there a spectrum on how well sending samples is executed?

Ryan: There is. The way samples work right now is you can request a sample of a product that’s available for purchase, but what we see a lot of companies doing is actually creating sample packs. So, instead of requesting product A, there is a whole pack that comes with information about the mission of the company and the pricing list and let’s say three to five products, just to give a complete picture of this is what we do, this is our mission. I think that’s been really affective for some companies to have these complete sample packs instead of just one product, just two products with the individually sample request for people to learn their brand.

Matthew: Where are you in the capital raising process right now?

Ryan: We got started back in 2015. We raised our first round of capital from investors and friends and family that we worked with previously on the last companies I had mentioned earlier. We closed a little over a million dollars in capital in 2015, December. That took us through 2016 and helped us tackle the Colorado market and the Washington market. About three months ago we closed an additional round of capital for another $3 million led by (20.35 unclear) and Casaverta Capital. Have some other amazing partners in there too like FIDO partners and Wisdom VC. We’ve total raised $4 million over the last 18 months and that’s what we’ll use to take down the next states that we’re conquering.

Matthew: If there are investors that are listening that are interested in keeping up if you’re going to be raising more capital, is there anything they can do to keep up on that process or just go to your website, what’s the best way there?

Ryan: The best way would be to shoot an email over to info@leaflink.com. It’s funny, we’ve actually gotten requests, people asking if we’re publically traded and things like that. Not just speaking to those kind of investors, but if there are people that are in the space and interested in getting behind a company that’s really in the way, then feel free to shoot a email to that and it makes sense to connect.

Matthew: Okay, what do you think we can expect from Leaf Link over the next one to two years? How do you think things are going to evolve and expand?

Ryan: Part of the success that we’ve had is how focused we are. This is the case for all companies in the in the industry, but you know companies that are focusing on so many things and trying to be everything for everyone, Leaf Link has no interest in doing that. We want to absolutely crush what our primary focus is, and that is to be a marketplace, a communication tool, a community for buyers and sellers in this industry and empower their businesses and that’s what we’ll continue to do. Fortunately there’s new states opening up every several months it seems that we need to be in yesterday.

So our focus is taking the model, the product fit that we have in Colorado, in Washington and now in Nevada, Oregon and California and continue that into the next states. The really exciting thing is that our clients are thinking the same way. That they’re opening new states and they need structure, they need process, they need Leaf Link. We’re working really closely with them to see—further that mission of helping them get to the next level. Staying focused on what we’re doing, not doing anything completely from left field until we absolutely own this. As a luxury of that success, we’ll look at the next product lines, tools that we can provide for our companies.

Matthew: One thing that I’ve noticed when I’ve gone into and talked to dispensary owners, quite a few and also going into grows that I talk to the growers, the growers always tell me they have some sort of unique process and formulation that makes their flower great. I think that’s great to be excited and have some methodology of what you’re doing. Then the dispensary owners always think that they’re doing a better job than other dispensaries. When you go to other dispensaries, especially a few in one day, dispensaries are as different as people. They can be entirely different in their processes, methodology and some execute way better or have a better experience and so forth. Is there anything generally that you think you can say about dispensaries that seem to execute well or seem to have good management? Any tips that you see looking from the outside as you go in and talk with them?

Ryan: Dispensary is a company. It’s a retail location, one that sells other products, whether it be liquor or clothes or a pharmacy. Our though is there’s no reason why the standards in this industry, if anything they should probably be higher than other industries just because of the product that’s being sold and the regulations that exist and the legislation that we need to be respectful of. The companies that do the best are typically the ones that have either figured out their mistakes or have experience running retail locations previously and they know there’s great tools we can use, tools like Leaf Link for purchasing product. There’s amazing POS systems that we can use that will create standardization on how we check customers out, how we’re managing our inventory, how are we communicating from different locations, because now we have a lot of these companies that have multiple retail spots. So I don’t think it’s all that different, but the ones that we know are doing the best and the ones that seem to be moving the most product as well are the ones that are in it, because they realize the challenges are similar and if anything higher they need to build some of the structures out as any other retail store would. The ones we know and what it can’t be really is unfortunately it always just be a bunch of friends and a family running a shop. That’s tough. It’s good to get more experienced people that have done it before or something similar before, and use that skill to better serve your customers.

Matthew: Good points. Ryan I like to ask some personal development questions to help listeners understand who you are as a person. 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?

Ryan: Less a book, I’ve been all about podcasts lately. Maybe like a similar concept but quite the audible listener too, but one that I’ve been listening to every day, and no offense to present company, but every day when I wake up I listen to an episode of How I Built This. It’s on MPR, and they profile all these amazing entrepreneurs and challenges that they’ve faced. To see the patterns similar to the way we see patterns around both what we both think as a solution. I really enjoy that. It gets me—I’m already pretty high energy and revved up for the day, but further excited to just get out there and continue to build Leaf Link.

Matthew: Do you have any other kind of daily rituals or morning rituals you do to help get yourself in the set for the mood in the day?

Ryan: Yeah for the last couple months I’ve actually been swimming every day when I’m on the road early in the morning. It’s a nice removal from just everything like constant emails or Slack or calls to just think a little bit and zoom out and how we tackle the day and thinking about things differently, or (26.56 unclear) enough to make the right decisions longer term because we are in it for the long term. That repetition, that quiet is great.

Matthew: Is there a tool web based or otherwise besides Leaf Link that you consider really valuable to your day to day productivity?

Ryan: Two that we use every day. One is Slack, which I don’t know if I love or hate. Have you used Slack?

Matthew: I’ve used it yeah, and I don’t know if I love or hate it either.

Ryan: I get the idea. It’s like death to internal email, which is a cool idea, but I also wonder is there a point of just too much communication. Do you get lost and just sucked in to this world of endless messages, but I’ll put it on the list that it’s a helpful team because we are a distributed team across five different states. So it’s a good way to keep everyone up to speed on what everyone else is working on. The second tech tool that we use is Inbox by Google. It’s not the same thing as Google Inbox. It’s basically a email client that allows you to snooze, remind, check off emails effectively as to do tasks, and it’s great for sales. It’s great for managing relationships because you can remember to follow up with people if they haven’t responded back to you. It pops back up into your inbox. Inbox by Google is great.

Matthew: That’s a great suggestion. I haven’t heard of that one.

Ryan: Check it out. It’s actually Google knocked off another great competitor. They just did a so much better job and it’s a great tool.

Matthew: Ryan in closing, how can listeners learn more about Leaf Link and connect with your company?

Ryan: Best way is to go to www.leaflink.com. If you’re a retailer, join right away with your license number and we’ll approve you usually in a matter of minutes, once we verify your license, to begin purchasing. If you’re a seller, send us your email through the website or at sales@leaflink.com and we’ll also get back to you very quickly. If you’re in Colorado, Nevada, Washington, Oregon or California, we are live in those states, hundreds of retailers on the platform in each of them, and excited to continue working with great companies.

Matthew: Ryan, thanks so much for coming on the show today and educating us. I really appreciate it.

Ryan: Thanks Matt. Appreciate you having us.


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The Five Disruptive Trends Shaping The Cannabis Industry Now

Lower your Cost of Cannabis Cultivation

armando suarez of Grodan

Armando Suarez from Grodan shares growing wisdom garnered from years of working with indoor produce farmers who have to grow their crops at 50 cents a pound or less.  Listen in as Armando shares this wisdom to help you grow more efficiently.

See footage of rolling tables we talked about in the show
https://youtu.be/PyZ-kYfXymA?t=43s

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

Key Takeaways:
[1:07] – What is Grodan
[1:26] – Armando talks about how he got in the cannabis industry
[2:12] – Grodan’s flagship product
[4:28] – How does fertilizer interact with rock wool
[8:06] – Armando talks about bringing costs down
[12:02] – Why cannabis growers pay more than vegetable growers
[13:23] – Armando talks about ideal drip irrigation system
[16:23] – Bad habits of growers
[23:29] – Mixing air into the grows
[26:49] – Balance between natural light and supplement lighting
[28:40] – Armando talks about growing in vertical spaces
[33:37] – What are rolling tables
[36:36] – Clipping tomatoes to wires
[40:10] – Armando talks about cultivation in the next 3-5 years
[42:49] – Armando answers personal development questions

Read Full Transcript

Implementing best practices in the grow room is getting more important as competition increases in the marketplace. Here to give us some cultivation guidance to both new and seasoned grows is Armando Suarez of Grodan. Armando, welcome to CannaInsider.

Armando: Howdy everybody.

Matthew: Armando, give us a sense of geography. Where are you in the world today?

Armando: Well, I live in upstate New York in beautiful Ithaca, New York. It’s very close to Cornell University, which is supposedly one of the best agricultural universities in the country.

Matthew: Yes, it’s supposed to be very nice up there. Home to Ithaca College and Cornell both.

Armando: Correct.

Matthew: What is Grodan at a high level?

Armando: At a high level Grodan is a company that makes cotton candy with lava.

Matthew: Okay, we’ll get into what that means and why it’s good for plants, but I want to ask you a couple of other questions first. How did you get into this industry? How did you get into helping cultivators?

Armando: Well, my first job ever was in a nursery. I was just 15 year old, and it was to grow pansies for decorating cities. And from then I took a bachelor in Agricultural Engineering and Farm Management. That’s how you start and then you stay in the farm, and here we are.

Matthew: Now what do you mean exactly when you say “Cotton Candy with Lava in It,” because people are going to be what does that mean, and how does that help plants. Let’s talk a little bit about the flagship product of Grodan, what it is and why it’s important.

Armando: Basically the health of a plant is very determined by how healthy the roots are. Back in the 50s a company in Denmark was doing experiments on how to make rockwool, which is actually lava that was poured into a spinner to create fibers. Normally those are used as insulation, as you can probably guess. And they were for glues to make it hold its shape to go in between the rafters. One of the glues they tried was a mitigated disaster. It attracted water. It retained water. Can I mention that if you put insulation that gets wet, well your house is going pile - and melt into a pile of mold within six months.

So they threw it on the back of a factory and never to be looked again. Except that across the street there was a crazy greenhouse grower. He realized that grass was growing on it the next year, and that’s how Grodan started. They had their eureka moment, you know what, plants seems to actually like growing in this stuff.

Matthew: And it likes to grow in there because (A) it attracts and retains water, but is there any other characteristic besides the moisture attraction?

Armando: The more important factor there, it’s not that it attracts water, it’s that it actually rewets once it dries. So, one of the biggest challenges when you talk about growing media is not to wet it initially. It’s to actually rewet it once the plant is actually taking the water out. And rockwool seems to be one of the ones that rewets easiest, and because it rewets easiest, you actually have fairly good control of the amount of water that is going to be in that root zone.

Matthew: What about fertilizer? How does fertilizer interact with rockwool?

Armando: That is the other advantage that they found out is that it does not react with fertilizers. Most other medias, in fact, the lowly soil that covers most of the Earth actually retains fertilizers, and it will eventually compete with the plant for the molecules. In the case of rockwool, all those molecules and fertilizers are actually are available.

Matthew: That’s interesting. So, in your mind it’s the ideal starter growing media would you say.

Armando: Well, it’s very good because it’s clean out of the factory. Nothing could have survived the process of being melting into lava. Is it the best one? I believe so, but I’m a little biased.

Matthew: Okay, right. Now let’s look at the way - you talk with and work with a lot of growers that are outside of the cannabis industry and a lot that are inside. Let’s look at, for example, vegetable growers. They can produce their product at anywhere from $50 a pound or more or less, but that’s much lower cost per pound than a cannabis grow.

Armando: $50 a pound, I wish.

Hi CannaInsiders, sorry to interrupt the interview here, but just wanted to let you know that I meant 50 cents a pound here, not $50 a pound. Now back to your program.

Matthew: How can cannabis growers get there? What are they doing differently than the produce growers?

Armando: Well first the produce growers are not getting $50 a pound. They’re getting like 50 cents a pound, which illustrate why it is important to choose a system that allows you to remove all the little inefficiencies that are going to occur in any operation. Operational efficiency is really important for these guys, and they have eliminated pretty much every little thing that makes them waste one second here and two seconds there and three seconds over here and one second over there. All those little inefficiencies when you start calculating them over 1,000; 5,000; 5 million plants becomes really really big dollars really really quick. By removing them, you achieve survivability of your business when you have profit margins that are razor thin like the veggie guys.

Matthew: Right, so 50 cents a pound, the guys who grow and girls that grow cannabis right now their forehead’s sweating a little bit just thinking about how cheap that is compared to what they get. Let’s just say roughly a $1,000 a pound. There’s some that make $1,200. There’s some that make $800, but let’s just say $1,000 a pound, but they want to bring their costs down a lot. Do you have any specific examples around drip irrigation or something similar where listeners can try to visualize ways they can bring down their cost structure so they can be more competitive, and also actualize more profit.

Armando: Yes. For example, cost efficiency is the use of rockwool in a lot of the largest vegetable greenhouses, are switching to rockwool because they don’t want to be dealing with any bulk material. Bulk material require machinery, requires containment, requires washing the pots, cleaning the pot, moving the pots, getting in and out. So the lighter you can do the substraight and the more self-contained it is, which is the case of rockwool, because that’s that whole point of having tried the glues in the first place, was to actually be able to get in and out as quick as possible in the greenhouse. For example, the cost of setup with their plant is reduced to just a couple of dollars, while you look at pots that are used with any bulk material in it. In fact, that includes also rockwool as bulk material. Once you include labor in it, you’re approaching dangerously already $10 per plant.

Matthew: Yeah so, this is case in point. You’re saying look at your process holistically and every variable that goes into each one. It’s not just about hey I’m growing in pots. It’s like, hey you have to get the pot there. You have to make sure it’s clean, and then you have to clean it again and all these different things. Every input into that step and then every output. What are some other variables and steps you think that cannabis growers should be looking at in order to bring down their cost structure?

Armando: Substruct is a very very small one. One of the big ones, the big ones I see are really aimed in the cannabis market in the U.S. It’s really fertilizers and light. For most growers in the greenhouse, light is essentially free, depending on what geographical area we’re considering. For example, I see a lot of operations going up in the deserts, and they’re going inside, which makes absolutely zero sense. With all that light free, it makes no sense because that would be your biggest electricity cost, by far. You really look at as lighting in dark places where electricity is cheap. For example, in the Northwest there it’s an (10.56 unclear). So you see it really depends on the geographical area. Now on the fertilizers, yes. Pre mixes are something that really comes from the dark side in the retail mentality. You cannot be paying what these guys are paying for fertilizer.

Matthew: What would be a better way? How do you make sure you get great fertilizers at reasonable prices?

Armando: Well you buy from your Ag supply, and you make the potions. I call making them, preparing potions, yourself. To give you an example, an average vegetable grower is paying about 4 cents per gallon of irrigation water. The cannabis growers are paying about a dollar for that same gallon.

Matthew: Why are the cannabis growers paying so much more? Are they subject to marketing hype or what is it?

Armando: In part yes, I think there’s a lot of marketing hype. There’s a lot of legacy. It’s like that’s how the market grew, and most of these guys are actually new entrants in the market that have little agricultural knowledge. They think that yes, they’re putting magical potion in the water and that makes the plant grow. Guess what? That potion is nothing magical, and you can actually make it yourself.

Matthew: How would someone go about making it themselves if they’re used to buying the expensive stuff?

Armando: That is actually quite a steep learning curve. In fact, I attribute the fact that very few of them have taken that step in that direction because of that. Essentially any guy that is graduating from an agricultural university should be able to prepare potions.

Matthew: Okay, so this is like the NPK, the nitrogen, phosphorous and so forth?

Armando: That’s correct.

Matthew: Just getting that right and then what about creating an ideal drip irrigation system? How would you design that?

Armando: Actually that’s a very nice segue into irrigation system. Most of the time what I see with cannabis growers is that they have not step into really getting a hard look at their fertilizers, because every time they tried a different type of fertilizer, and they were trying more efficient irrigation system, boom, immediately they were clogging. It’s two components of the system that actually married together, they have to work together. If you’re putting anything in your irrigation system that is going to even have the hint of flocculating and making any type of gunk inside the line, yes you will forbid yourself the usage of real dripper irrigation, and foregoing all the efficiencies that come with automated irrigation and cheap fertilizer.

So, the first one is yes. You will have to choose the fertilizer that will not precipated, that will not create any deficit, because otherwise you cannot do an irrigation system with it. Plants are going to grow beautifully, but again it’s the mentality. Okay, now you’re a business, now you need to control costs. Your biggest bang for the buck is right there.

Matthew: Okay, so when you say it clogs the irrigation system, do you mean the nutrient part particulates build up.

Armando: Yes. So basically drip irrigation is created with the mentality that you have to put the water right on the roots of the plant in the slowest manner possible, while you’re still providing for the needs of the plants. Because you need to go very slowly, the passages that you’re using, which are the drippers, are very small holes. Anything that can go wrong and clog that tiny hole is going to clog it. So, the way to design it is always keeping in mind that you need to move water slowly, because moving water fast or moving a lot of water or pushing water very hard through a pipe is actually expensive. If you move it too slow, you get the nutrients clogging the lines. So, it’s a balancing act between those two.

Matthew: Is there any kind of bad habits you see amongst growers that they would be wise to change?

Armando: Many of them. The most egregious one that I see, and it’s very related to irrigation and fertilizer use, is these guys are chasing ghosts that in the big picture matter very little. For example you see a lot of growers literally manipulated. They’re focusing so hard on maintaining their ph stable, or literally holding a very precise number in ph. No, no, no, it needs to stay at 5.5, and you see them wasting mental resources and fertilizer resources, money resources, time resources in to trying to keep in line that number, which in the big picture is really not that important.

Matthew: There’s going to be some people listening that are going to say, what does he mean ph is not important.

Armando: Ph is important, but basically in nature plants work within a wide ranges of ph. I would say pretty much anything between 5.2 and 6.8, you are right about where the plant works perfectly. You will see very differences in performance within that range. Let me put it bluntly to you. You prepare a bucket of fertilizers. You let it sit right there. Just the bucket sitting right there, and you go and measure ph probably every half an hour for 24 hours and the ph is going to fluctuate. It’s going to go up and down, because you’re talking about systems that are not static. You are talking of systems that are very dynamic. Particularly when they get large they move very slowly in every direction. So you’re going to have ph fluctuations, whatever you do. No matter what you do. If the ph goes from 5.3 to 5.6, I wouldn’t even worry about it.

Matthew: Okay, that’s good that you bring that up because there’s probably a lot of people that will be relieved that might be doing that and why bother. Is there any other ghosts that they’re chasing where they’re obsessing about details that have a much wider range of success than maybe they think?

Armando: No, what I see a lot of them pursuing also snake oil. It’s a very snake oil prone market. Where, I don’t know, any company comes out with a new thing and it’s like, oh we need to try the new thing. Hold on guys, are you really sure. When you’re in retail, when you were doing (19.36 unclear) in your closet there were six plants. Yeah I can see the attraction of likely doing that. I would actually do that too. Now that you have a business with 6,000, your decision need to be a little bit more machilvalian. They need to be more money oriented instead of just is this product, even if the product works by the way. Some of the products out there absolutely work. They’re fantastic, but is the product—If I’m spending a dollar applying these products, am I going to get a dollar back or am I going to get less than a dollar back, or am I going to get more than a dollar back for applying that product into my crop. And see them not having that mentality yet.

Matthew: Where do you think that—is there a specific geographies in the U.S. or Canada that you see people fall prey to chasing ghosts or maybe thinking their circumstance are unique?

Armando: Yes. Colorado.

Matthew: Colorado, okay. One thing I see, and since I’m not a cultivator I can be a little more objective about it is that I talk with people and they say, well we’ve got unique practices that are different than in the industry and that allows us for bigger yields and a special artisanal growing, best practices, and they all seem to say that. They don’t realize that everybody thinks that. It’s kind of like a home brewer that’s like here’s some additional steps I take to make my brew stand out. There is something to that, but I think it’s perhaps less than they might think. There’s less impact from it. What do you think?

Armando: Absolutely Colorado.

Matthew: Colorado. So, the mistakes they’re making there is they’re not adhering to best practices in Colorado.

Armando: Well what happened is that Colorado was the first one to legalize rec, as well as medical. And a lot of new entrants in the market were pulled out from many other states. For example, I remember being in Florida just the week where they actually legalized rec in Colorado. I literally saw the growers in Florida packing and leaving for Colorado. So Colorado got an immense amount of new people that did not know what the hell they were doing. It’s just a consequence of being first, I think, more than anything else. For example, by contrast when you look at the growers 15-20 years ago, the few growers that you could actually get into their grow 15-20 years ago in California, those were hardcore.

Matthew: Hardcore in what way?

Armando: In every way they were hardcore scientists. They were hardcore. It was very criminal activity 20 years ago. So they were very secretive. They were very focused. They were very good growers. The new entrant is really not that great of a grower.

Matthew: How about mixing air thoroughly into the grows? What are some best practices you can give us there about getting the air mixture right?

Armando: The air mixture in the air, or the air mixture in the water?

Matthew: Let’s go with both.

Armando: Let’s start with the air. That’s kind of the obvious one. Absolutely. The air needs to be clean. CO2 which a lot of people see it as a thing you do on the side. Let me remind to all of your listeners that CO2 is actually the (24.03 unclear). All the little stuff that you put in the water are the vitamins. The real nutrient, the only nutrient that plants use is CO2. So, such in the mix, having CO2 in the mix. I at least have an idea of what’s happening is very important. Of course the king of all limiters in every growing system is the humidity in the air. Plants grow better when they’re warm, but you cannot get too warm, if you’re too humid, otherwise you suffocate your workers and you suffocate your plants eventually. So the air makes the environment of the canopy is absolutely critical in the success of it.

Now a point that is less, a road that is less traveled by many growers is actually paying attention of what is happening in the gases that are actually in the solution. So, in irrigation, the water temperature, and I’ve seen a few instances where that has become a problem. Either the water was too warm or that the water was too cold. In the case of the water being too warm, it was always an oxygen problem, which that’s why I asked the question, is this the air, in the solution the air in the air. So yeah, oxygenation of the water is one of those next step things where we don’t know yet much about it, but we have strong hints that it’s one of those what you don’t know can come bit you in the butt when you least suspect it.

Matthew: What about electricity in terms of you stated your preference and obviously it’s ideal to be having some sort of outdoor greenhouse in a sunny place. How much electric light should be used ideally versus sunlight, and what is the ideal versus practical here, just so people can get a sense of how much electrical light versus sunlight they should be using in different circumstances. Because sometimes it’s a possibility and sometimes it’s not. Sometimes you might live in a place where a greenhouse could be outside, but they’re not getting enough light. How do you arrive at the right balance between natural light and then some supplement?

Armando: It really has to do with the need of the plants. So it’s the idea situation and the ideal building is really the one that provides the best for the maximum performance of the plants. Site choosing is actually of primary importance here. Because depending on where you build a grow, it’s where you’re going to be able to put a greenhouse or to put a warehouse or put a combination, which is a greenhouse with supplemental lighting. So, in a place that doesn’t get too cold, a greenhouse with supplemental lighting is probably the one that is going to bring the biggest bang for the buck.

Matthew: Do you see that happening a lot where people have greenhouses with the supplemental LEDs or traditional lights?

Armando: Well, I’m kind of just one of those finicky crops that are (27.54 unclear). So it’s very reactive to the amount of light that you put on it. So most of the people building real greenhouses. Hold the thought on real greenhouse. If they are building a real greenhouse, they are generally putting supplemental lighting to it, because you’re never away from a cloudy day, even in sunny places.

Matthew: How do you see the produce growers using vertical space different than the cannabis growers or what tips could cannabis growers use from the produce growers on vertical space?

Armando: To be fairly frank with you, I think it’s boondoggling both markets.

Matthew: Okay, why is that?

Armando: Again, it’s when you start running the dollars that matters. Even on the veggie side, most of the vertical farmers—when you start scratching the surface you actually find that they’re very good at raising money from venture capital, but the system is actually highly impractical and not very productive. I would seriously caution many of the cannabis growers of the perversion that is being created by vertical farming on the veggie side, which I think funnily enough it’s a provision that actually comes from the cannabis side.

The only ones that were using lights inside a building for many years were of course the cannabis growers. Now a handful of lettuce growers have caught on to the fact that you can do that in a warehouse, and yes you can grow profitable lettuce, but when you start running the numbers, yes, you can grow profitable lettuce inside a warehouse, but you can grow it even more profitably inside a greenhouse. So, yes you may be in a situation where you’re very good at raising capital. You can get $20 million to build a grow, and then suddenly you’re going to have a greenhouse grower that is going to build a greenhouse five miles down the road and is going to hand your ass to you. That’s what these guys need to start looking at is from the point of view of business. This is not a static market. This is changing really quick.

Matthew: Yes, and that’s a concern I have. I mean, particularly in California I had to see so much supply coming on in the next year or maybe 18 months, and I think cultivators aren’t thinking about that as much. I mean, yes there’s a large population. Yes, it’s legal. More people will be consuming it, but there are really some cultivators that are coming on at scale, big scale, that are going to be flooding the market with cannabis. I want to make sure that people that are going into this space have some sort of unique cultivation ideas, or at least aren’t going into it with what the reality is in mind.

Armando: Well, the argument is that a lot of these guys coming out in scale from greenhouse or from field are not going to match the quality of the indoor growers, which I believe it’s true for now. Notice the for now is the big caveat here. So many greenhouse growers, high tech greenhouse and low tech greenhouse, are not yet getting the quality that allows them to compete with the indoor growers, because the indoor growers just been doing it for 15-20 years. So of course they’re (32.24 unclear). Let me tell you, they will figure it out.

Matthew: Also you think about northern California, let’s say Mendocino County, the weather up there is good enough where people can grow outside and without a greenhouse even. I’m not saying that’s legal, but I just think that is something to be considered. They probably have to supplemental water and fertilizer, but still it’s outside and they don’t have to condition the air at all.

Armando: That’s way cheaper.

Matthew: Yeah, way cheaper. I don’t know, I’m concerned about it for all the people that are rushing into it with certain assumptions about how much profit they’re going to make, and there’s just going to be a huge deluge of supply. So, I’m hoping that people can think, hey what if this only half as profitable as I think it is. Can I still make money. That’s what I’m trying to get people to think about. The operational efficiencies like rolling tables, which maybe you can introduce this topic of rolling tables. What are rolling tables? What’s a good way to think about using them to make a grow operation more efficient?

Armando: Well the rolling table is really a consequence of growing indoors. Either in a greenhouse, which is where they come from, or in a warehouse where their benefits are incredible. The role of a rolling table is that you basically only have one aisle that moves between table to between table. That way you occupy the maximum amount of space inside that square footage that you actually paid for it. So, when you build a greenhouse or when you build a warehouse the square footage that you build is a sunken cost. The lamps that you put or the greenhouse that you have are already also sunken cost. So you want to maximize the use of them as much as possible. By that is you minimize the aisle space. However, if you build a place that has no aisle, well you cannot enter and work into your crop. So, that’s why you build tables that can move, and then you only have one aisle that moves to table to table.

Matthew: How could you paint a picture of what that looks like for someone that’s never seen it before?

Armando: That’s an interesting question. Well, most of these growers are very used to those 4X8 tables that they put on rollers. It’s basically the same type of tray or table, but instead of being 4X8, it’s 4X100. You have six or seven of those literally slammed together in a greenhouse. When you need to start working between two tables you just move the one table to create the aisle. You enter that aisle where you do your work on both sides of the aisle, and then you close the aisle and you open the aisle between the next two tables. I have videos by the way of that.

Matthew: Actually that might be a good thing. If you have videos of that, maybe I can put that in the show notes for people to take a look at some examples of rolling tables where if they want to get a look.

Armando: Basically those are actually standard equipment in ornamental greenhouses, which are the vast majority of the greenhouses in the U.S.

Matthew: You gave me an example earlier when we were talking offline about tomatoes and how to save time clipping them to wires. Can you introduce what you meant by that and what cannabis growers can take away from that idea?

Armando: Again, it’s bringing back the idea of the operational efficiency. In tomatoes, the tomato vine is a very long vine that is 40-45 feet at the end of its life. So they hang that vine with a string from a cable that is at the top of the greenhouse. Every week they’re going to lower that cable to basically lower the vine to where you don’t have to get onto a 40 foot ladder to harvest the tomatoes, and then you always have tomatoes at the height of the worker. It used to be that the way to tie the tomato to the twine was to tie it literally to wind the twine around the tomato vine, but you can see that when you unhook it, and you run the twine around the tomato stem, well it takes what? Two, three, four seconds in the operation. Nowadays most of the growers are not twisting the twine around the stem because it takes about four or five seconds per plant. Instead they’re doing a clip.

Now when you look at the cost of the clip, let’s say the cost of the clip is one cent, but now instead of spending five seconds doing that operation, that operation takes one second. So you gain four cents in that operation. You gain four seconds in that operation. Now imagine you have tomato greenhouse that is one million plants, which is right about most of them are, one million times four seconds. That’s 4,000 seconds. That’s 4 million seconds sorry. Four million seconds, that’s a lot of man hours.

Matthew: Right, that’s a lot of plants. That’s a lot of plants for sure.

Armando: Yes but that’s the thing is when you start calculating by large scale things. Every little operation where you can get a second here and a second there, and that’s a really large amount at the end.

Matthew: Yeah, and that’s the point I think, even if you don’t have a million plants, if you have 1,000 or 100, you could pretend hypothetically. What if this hundred or thousand plants I have, what if it was a million? What would I have to do differently to increase my efficiency. It’s a good mental exercise to get you where you need to go and where to be thinking.

Armando: Yes, and that’s a mental exercise that every grower should actually do themselves in their own operation. There is always room for improvement, and that is part of the job of a grower is to actually improve that.

Matthew: As you look out the next three to five years, where do you think cultivation for cannabis will be? How will it have evolved to increase operational efficiency in your mind?

Armando: I think that’s the million dollar question. I may make a lot of enemies with what I’m about to say. I see a lot of the market going into extracts. If you’re really going to extracts, the difference between outdoor and indoor is academic. Most of those extracts are going to come from outdoor crops, as soon as they are legal. Depending on how the legal map looks like, most of that production, which is probably going to be the bulk of the cannabis market, is going to be outdoors. Now the market for flower, for smokable flower, there will always be that market. The indoor grows are going to become completely and absolutely niche where only very small guys that do very specific niche products are going to survive. All the rest is going to be greenhouse.

Matthew: That’s interesting. It definitely is congruent with a cannabis investor we had on the show a few months back, Anthony Wile, who is moving his production facilities for PharmaCielo. Him and the CEO have everything down in Colombia, because they think it’s the lowest—it’s the ideal place to grow and also the lowest cost. So they’re starting with the end in mind. They agree with you. That’s where the market is moving so they’re putting all their cultivation facilities down there. It’s really interesting to see other people are starting to see this and think this. I guess what you’re saying is you can be a low cost producer and grow outside, or you’re going to really need to have some compelling reason why consumers should pay more for your high cost grow. That could be a terpene profile or who knows what, but there’s got to be some reason. Is that what you’re getting at?

Armando: Absolutely.

Matthew: Okay. Armando, I like to ask a couple personal development questions to give listeners to know who you are a little bit more. With that, is there a book that’s had a big impact on your thinking or way of life that you would like to share with listeners?

Armando: Not on my way of life, but it would be certainly a book that every grower out there should have on his shelf.

Matthew: Okay, let’s hear it. We got to know.

Armando: Hydroponic Crops from Howard Resh. That book, which is probably an 800 page (43.15 unclear) that you can bludgeon some people to death with, is probably all you need to know about hydroponic crops.

Matthew: Okay, very good. I haven’t hear that suggestion before. It’s great. Is there a tool, it could be a web based tool or a physical tool that you use daily or weekly that you consider valuable to your productivity that you would like to share?

Armando: Yes. It might come completely out of the left field for most people. I would suggest to most people that one of the greatest tool ever invented is a pen. Take notes. If I would suggest, actually buy a nice pen, not just any pen.

Matthew: What’s a nice pen to you, like a (44.15 unclear) or what.

Armando: No that’s too nice. That’s too nice. Yes I actually use fountain pen to take notes, because the connection that your soul is directly connected to the point of that pen. And the notes that you take from a computer and the notes that you take on paper with a pen actually have a great difference in quality.

Matthew: That’s interesting. I noticed there’s a lot of different kinds of learners out there. There’s some people that process information much better when they’re hearing it. Then they write it out in notes. There’s some people that what to hear and they don’t want to do the notes so they’ll record whatever is going on, like a lecture, so they can later come back to it. There’s all these different kinds of learning styles to match different brain types.

Armando: The thing here is because it’s a nice pen. It’s a sensory experience. So when you’re actually putting the words on paper you actually feel it. It’s not just I’m taking notes. I’m actually taking notes with a nice pen.

Matthew: Are you talking you use one of those old school fountain pens where you’re dipping it in an ink well?

Armando: Well that’s too old school but if you want to yes, except that’s kind of impractical when you’re in the field.

Matthew: Yeah, okay. So use a nice pen, but not too nice. Does yours have a leather veneer on yours? I’m just trying to visualize what nice is.

Armando: Something like that yes.

Matthew: Ostrich skin.

Armando: Yes.

Matthew: Armando thanks for coming on the show and educating us about the latest in growing technology. How can listeners learn more about Grodan and get closer to you and follow more of your work?

Armando: We have a lot of information on the website. We’re actually coming out with a new website. The original website is www.grodan101.com. Don’t go to grodan.com because grodan.com is the veggie guys. We also have www.grodan-mmj.com.

Matthew: More strictly focused on cannabis market. We appreciate that. We’ll definitely put in the show notes a video of rolling tables so people can visualize. Really I’m glad you’re expanding our thinking Armando. I really think it’s important to be ahead of the curve. There’s only going to be two types of people. They’re going to be ahead of the curve, anticipating these things, and then people that are behind the curve that said what happened. I definitely want CannaInsider listeners to be in the first group ahead of the curve. So, thanks for helping us get there.

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