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Important Data on What is Selling in California Dispensaries with Roy Bingham of BDS Analytics

roy bingham

Roy Bingham is the CEO of BDS Analytics. BDS collects sales data at the point of sale in dispensaries. Roy knows EXACTLY what is selling and what cannabis product trends are accelerating and what trends are fading. In this interview, Roy tells us what is selling in California dispensaries.

Key Takeaways:
[1:57] – Roy’s background
[2:35] – Roy talks about the state of legalization in California
[3:29] – Total spend in California dispensaries this year
[7:09] – Roy talks about how dispensaries spend breakdown
[8:10] – Bestselling strains in California
[9:51] – Roy compares the cost of flower in California to other states
[11:03] – Trends in the market
[12:08] – Roy talks about concentrates
[16:23] – Roy talks about growers
[17:35] – Popular edibles in California
[18:44] – How good are the retail displays
[21:14] – Branching out into new categories
[23:00] – Roy talks about the unpopularity of topicals
[26:03] – Roy answers some personal development questions
[30:11] – Roy’s contact information

Learn more at BDS Analytics
https://www.cannainsider.com/bds

Get the California Cannabis Dispensary data briefing here:
https://www.cannainsider.com/california-dispensary-data

Read Full Transcript

California passed France last year to become the world's sixth largest economy. California matters not only because of the size of its economy but also because California creates and drives its cannabis innovation beyond its own borders into the rest of the United States and the world. I am pleased to welcome Roy Bingham, CEO of BDS Analytics, back to CannaInsider today to tell us what cannabis products are selling in California. Roy, welcome back.

Roy Bingham: Thank you. It's great to be back, Matthew.

Matthew: Tell us where you are in the world right now.

Roy: I'm in Boulder, Colorado, in my home office which I love to be in, but don't spend very much time here. Kind of a fun day for us here because it's coming up to Halloween and our officers decided this is the day for us to do fancy dress. So I'm dressed as Count Dracula right now, which is a traditional thing for me.

Matthew: Do you have the full face paint on and everything or no face paint?

Roy: No, yeah, that may happen later today. But at the moment, no, it's just a very conservative outfit.

Matthew: Right, okay. Good. For guests that don't...

Roy: I'm glad to talk to cannainsider listeners. I got to say, I'm amazed how many people come say, "Hello," to me who have first heard me on CannaInsider in the past. So your message is getting far and wide.

Matthew: Oh good, I'm glad to hear that. Yes, it's fun to go to places and events and stuff and meet listeners. It really makes it kind of surreal. So I'm glad you mentioned that.

Roy: You bet.

Matthew: For guests that don't remember Roy's background, it includes an MBA from Harvard, time at McKinsey Consulting and then, ultimately, working at a POS data firm in the natural food industry. If you wanna hear more about Roy's background, I encourage you to listen to episodes 133 and 100. So you just go to cannainsider.com/133 and then the same 100, it'll take you right to those episodes if you wanna hear more about Roy's background. Now, let's jump into California. What's going on in California? Help us understand the context of where they're at in cannabis legalization and what's happening.

Roy: Well, of course, California has had a legal medical market for 20 years now, far ahead of any other state. But they are on the threshold of having adult use which will begin January 1 of next year. And so, they're in the process of implementing a completely new set of regulations for the entire market. It's obviously going to be very confusing for the next several months. I spend at least a week every month in California at the moment and I can tell that dispensary owners are very uncertain, and the regulators are fairly uncertain themselves about exactly how it's all going to work. But it's a huge change that's coming to the largest state in the United States and, as you said, the sixth largest economy in the world.

Matthew: Yes. What's the total cannabis spent in California dispensary so far this year?

Roy: Yes, so that's not even easy to calculate either. The first thing is that data hasn't been centralized, there's been no regulatory authority, and there are thousands of dispensaries. And in Northern California, they have tended to be regulated by the city or district, whereas in Southern California, it's a little bit of the Wild West. We estimate that there are well over 3,000 operating dispensaries and delivery services in California. And for context, they're about 700 in Colorado. Based upon our panel of dispensaries that are providing us with data, we're estimating that the market is about $3 billion at the present time, and by that, I mean regulated entities but not necessarily. For example, in Los Angeles at the moment, no one is really regulated but these are people that are operating in the open with confidence expecting that they will be admitted to regulation next year. So yeah, it's big. $3 billion, of course, represents about 40% of the entire US market at the present time.

Matthew: Yeah. And when you think, it's really all in...a lot of it's in the big cities in Southern California, in Northern California, you can take out the rest of the state because the Central Valley is so big, it's those huge metropolitan areas in Northern and Southern California that probably makeup 80% of that, I would guess. Something huge.

Roy: Yes, absolutely. And in fact, we also did a comprehensive consumer survey of Californians about two months ago, in June of this year, three months ago. And it identified that the vast majority of the market are urban dwellers among, you know, hundreds of other data points that we learn from that process.

Matthew: Well, anything else you wanna tell us from that survey that's interesting? Anything you wanna highlight? [inaudible 00:05:37] that sticks out?

Roy: Well, yes. So actually, if people go to bdsanalytics.com and if you go to our market insights blog, you'll actually find that you can download a report, it's about a 10-page report called, "Now we Know What Californians are Smoking," and that covers, you know, which products Californians are consuming. And then, separately, if you contact us, we can go into detail about who the Californians are who are consuming those products. But, you know, at a very high level, they tend to be affluent, they're highly educated, they have an average income of about $94,000 a year. As many as 30% of them have been to graduate school. They describe themselves as being happier than the non-consumers and that life has treated them better. They're outdoorsy, they're social, they tend to average younger but the average age is not very young, it's about 38. And they skew a little bit towards the male versus female, about 55% male. But among the newer adopters, it's about a 50/50 ratio or even actually slightly skewing towards females now. So that's just a little bit of the data that's in those reports.

Matthew: And how does the dispensary spend breakdown in terms of flour, edibles, concentrates, pre-rolls? Anything else?

Roy: Yes, yes. So that's very interesting. You know, in California, in the last six months, flour represents about 55% of consumers spend in dispensaries and delivery services. And concentrates are big, they're 25% of the market already. Edibles, about 12% of the market. Pre-roll product is about 5%. And everything else is about 4% of what's purchased in those dispensaries.

And that's an interesting comparison to the other major states: Colorado, Washington, and Oregon. Washington is also flour about 55%. Colorado and Oregon have had a little longer head start with adult use and they're down to just below 50% flour. And concentrates also in the 25% to 27% range.

Matthew: Okay. And what strains are the best sellers in dispensaries in California?

Roy: Yeah. Well, the first thing to say is that individual strains are a relatively small share of the market. The largest share, by a long way, is blends.

Matthew: Yeah, hybrids.

Roy: So in the last six months, yeah, in the last six months, flour sells about $740 million of which an array of blends represents $450 million, especially indica blends. The individual strains, and we have 13,000 names of strains in our database, would you believe? The individual strains like Blue Dream is number one with about 13 million in sales but that's really only about 2% of the market. Gorilla Glue number four, second, Girl Scout Cookies, third, Jakarta, fourth, all about 1% of the market. So it's really those blends that dominate.

Matthew: So it's an inch deep and a mile wide there with the strains?

Roy: Absolutely, yes. It's one of those classic longtail market environments. Yeah.

Matthew: I guess it makes sense that flour starts out strong and then kind of decreases because, I mean, really just smoking is a way to decarboxylate and activate the flour and it's not the most elegant way. And it's when people catch on that there are other ways of doing it, they adopt those. I think that makes sense.

Roy: Yes, absolutely. And that will explain the popularity already of concentrates. Yes.

Matthew: Now, tell us how does the cost of flour in California compare to other states?

Roy: Yeah, that's very interesting. So we've sort of got a tale of two groups of states. So California and Washington prices are very similar for flour, they are about $8.80 per gram. Colorado and Oregon is significantly lower, around $5.60 each per gram. So you're seeing a premium in California versus Colorado and Oregon of about 35% at the present time. Interestingly, that premium does not apply to pre-roll products, edibles and to only a very small sense concentrates. So at the moment, flour prices are relatively high, but the prices of the other products are fairly similar to Colorado and Oregon.

Matthew: You mentioned you're in California for about a week every month and that the dispensary owners and operators are a bit nervous, a little anxious. Any other trends? Were you visiting dispensaries, talking with people? Anything else that stands out about what they're thinking about, what their challenges are, where the market's going in anyway?

Roy: Yes. Well, there's obviously a lot of energy and enthusiasm. I would say the Californian dispensary owner management are working, you know, 30% harder than everybody else. They start early in the day and they're working all the evening trying to understand the regulations, trying to understand when and how to apply for the temporary permits that they're gonna be granted first, trying to understand what it means for their consumers, trying to make sure that they're ahead of marketing and sales trends, making sure that they have the right products on the shelves. It's a very challenging environment. At the same time, there's tremendous optimism that now we're moving into a situation of being out in the open, publicly, confident that you are not going to get in trouble with the regulatory authorities provided that you comply with their codes.

Matthew: Okay. Let's zoom in on concentrates for a moment. Would you say this category is breaking away from the pack in general?

Roy: It certainly has done in all other states. So the trend has been, you know, Colorado is now four years of experience of adult use, concentrates over that experience have grown from about 10% to 27% of the market. Washington came along six months later, very similar trend, concentrates about 24% of the market. And then Oregon came along and allowed adult use, at the beginning of July, for concentrates and edibles of last year, and already that represents about 25% of the market. Now, California has been tracking for a lot longer in its medical market. And concentrates are certainly outgrown flower and edibles at the present time. As I said, edibles are about 12% of the market, pre-rolls at 5%. But concentrates are way up there at 25% of the market.

Matthew: And within that concentrates, what's the story there when we then break that down, that category? What is the data?

Roy: Yeah. So that's very interesting and California is quite different, certainly, from Colorado in that respect. So what we call vape products, essentially cartridges and disposable vape pens that are pre-loaded, they represent a booming 61% of California's total concentrates business. Whereas in Colorado, that's only about 36% of the market. Interestingly, Oregon, which is very new to this, is also similar to California. So new adopters seem to be adopting vape products in preference to shatter, wax, oils, live resin, etc. Colorado has a more sort of diverse population of those kinds of products within shatter, within concentrates, I should say.

Matthew: Okay, okay, that makes sense. And then, what about individual brands within there, that category of concentrates? Is it spread evenly or there're big players or how does that work?

Roy: Yeah, that's fascinating. So yeah, we looked recently at brand share, it's in the report that I mentioned earlier. And, you know, the top five brands in Colorado already represents 70% of the market which surprised me. It's a much more mature looking market than you would expect in concentrate. Well, California is not that far behind. In California, the top five brands represent 52% of the market and the next five brands are another 14%. So combined the top 10 brands are 66% of all sales of concentrates. So it's relatively mature, you know, this is a sort of inevitable process of the big companies emerging and taking market share and outperforming the smaller companies, unless they're disrupted by someone coming along with something radical and new.

Matthew: Yeah. And that's the only way really to get in is that they have something radical, new, different, has a different narrative around it, different benefits. One way to get in with these established players. Well...

Roy: Yes, so we'll have a better business model in some other way, more effective sales and marketing capabilities, better supply chain management, something like that. I think there's still plenty of opportunity for people, they're not radical and new with their products but more effective with the way they do business.

Matthew: I have this concern that all growers in California, nearly all of them, are gonna be wiped out by either huge players that can just scale that put so much investments in just scaling grow operations with automation and efficiency. And then the small kind of artisanal grower that has some special story around it, kind of like a vineyard or winery would where people really identify with the story or the fact that it's made in small batches and they can visit the grower or something like that. Do you see any kind of bifurcation like that or do you think that's where it's going? Or do I have it totally wrong?

Roy: No, I think you're right. I mean, if you can imagine that you're a concentrates or edibles company that's already doing something like $100 million in consumer sales in California at the moment, then you have the ability to either build your own manufacturing facilities or partner with others to build very low-cost per unit of production facilities over huge economies of scale there, and also to lock up a very stable supply of cannabis plant as well. So they have a huge advantage when they've got to that scale. Of course, I think there's plenty of opportunity for what you call the artisanal smaller scale producers as well in specialty environments. In a market that's growing so rapidly and is already so large, there's always going to be a category of consumers that is excited about something that appeals more to them because it's, in their perception, better or different.

Matthew: Yeah, let's pivot to edibles. What do California residents like there?

Roy: Yeah. So they like candy, candy products represent 29% of total edible sales. Chocolate comes second, not far behind, with about 24%. And then, infused foods, so your brownies and cookies, etc. That represents 17%. And interestingly, tinctures, which we include within edibles, is a large category too at 15% of the market followed by pills and beverages.

Matthew: Yeah. Okay. When you visit these...

Roy: And within candy, you know, the most popular is gummy candies which is the case in most other states as well. And that's where we already have some of the major players.

Matthew: When you visit these dispensaries, do you find they're doing a good job on their retail displays and putting the, you know, maximizing the return on investment by putting the proper placement of products and things out for people? Or is that still not that thought of much anymore because, you know, most dispensaries are pretty profitable even without having to consider that?

Roy: Oh, I think there's huge room for improvement there. I think that still, most dispensaries are using the judgment of the owner or store managers with regard to how much of the store to allocate to which types of products and which brands to make most prominent. I think it's still mostly done by gut feel, by relationships, by preferences of the budtenders. Of course, what we do is give the dispensaries the data that shows how they're doing by category, by brand, by item and compare that to the average of the state. Or in the case of California, we divide between Northern and Southern California, and then you can actually objectively choose which products to put on the shelves, which to feature based on what's growing most rapidly or already has the largest market share. That way, you can really mirror demand in the market. And some are getting very sophisticated at that, I'm very impressed by some of their dispensary partners out there. But there's a long way to go.

Matthew: Yeah. I used to wonder, you know, does this type of data drive dispensary owners and manufacturers into kind of a herding type behavior? And I would say, perhaps for some it does. But then, for others, it provides an opportunity, kind of like the Blue Ocean Strategy where they say, "Okay, I see where all the competition is. I'm gonna create a new category to something entirely different, you know, a freeze-dried cannabis drink or something that's like its own category that I can own." And that, I think, that drives some of that behavior.

Or they say, "I'm gonna play within one of these existing categories but just totally do something different. Maybe it's going to be a gluten-free brownie that has an effervescent aftertaste or something just bizarre or just novel or has some unique experience." So I've been thinking about that a lot lately because of this...I don't know if you've read that book, "The Blue Ocean Strategy," about how you just create your own categories and don't fight in the red ocean where the fish and the sharks are biting each other over the same thing but do something new within the category.

Roy: Yes. Well, I think we're already seeing that. For example, the fastest-growing category in Colorado last year, or subcategory in Colorado last year, was pills, or pills and capsules, to be more precise. That was barely in existence two years ago. And then, one company in particular and a couple of others came out products and they grew extraordinarily rapidly to end up being, you know, 7% or 8% of edibles already, and the current rate of growth will cross over 10%. So that's an example of that sort of radical blue ocean strategy.

And then, I'm also hearing from many clients who are developing new products that have special dosage mechanisms or delayed release or rapid release, of course, is more popular with edibles. So tincture, sublinguals, even breath strips, those kinds of alternative delivery systems. Nasals and inhalers as well. And at the moment, those are sort of negligible in terms of their market share. There are a few products here and there that are in the testing phase. But there are a lot of people who are pinning expectations around consumers going after those products who may be currently adopting vaporizers because they like the discrete nature of those products and the controlled dosage, but actually would prefer not even to use a vaporizer.

Matthew: I was a little surprised to see in your data that topicals were such a small percentage, such a small piece of the pie. Do you think the message on how to use those is not getting out to Boomers? Or what do you think explains that?

Roy: Yeah. I think it's actually partly to do with the channel of distribution, the licensed and regulated dispensaries and delivery services. Yeah, you're right, topicals capture less than 1% of the current California market. But actually, they're less than 2% in the other mature markets as well. You know, among them things like balms and salves are about half of the market. Cream is about 20%. And patches, patches are quite familiar to people who're following these things. There are only about 5% of the market at the present time.

I think perhaps, so far, people haven't had particularly impressive experiences with some of the products out there. There's certainly a number of scientists and doctors that are working on new technology where they are very sure of availability and efficacy. And maybe when we see some more data and some more science around those products, the consumer will latch onto them much more quickly.

Matthew: Okay. Is there any other ways the Californians stick out that you'd like to mention?

Roy: Yeah. Californians love infused pre-rolls which is interesting. So pre-rolls that have added concentrates with them as well. And that's a significant part of their pre-roll market and it's about 30% of their pre-rolled market, whereas it's negligible in most other states. So that's interesting. Also...Yeah, I would say that's the one that really stood out to us at the present time as being, you know, very distinct.

Matthew: Yeah, I imagine that pre-rolls are kinda always popular as little giveaways or things, "Come in today and," you know, "buy two pre-rolls, get the third free," it's always a popular marketing tool. I supposed the concentrate, it's kind of novel and also allows for more of a premium pricing there. So interesting.

Roy: Yes, yes. And, you know, it's convenient, and for new adopters, they don't have to learn how to roll a joint, etc. And therefore, we're seeing significant growth in pre-roll and interestingly, as I said, with infused pre-roll.

Matthew: Well, I'd like to pivot to some personal development questions if we could, Roy. And since you've been on the show twice before, I normally ask for book suggestions and, in the past, you recommended, "The Innovator's Dilemma," "Philanthrocapitalism," "Robinson Crusoe," "The Swiss Family Robinson," and, "The Count of Monte Cristo." But since we already know some of your book recommendations, I'd like to ask, if you were still in the cannabis industry but couldn't do anything with dispensary data like you are now, if you are in the business of providing that data and collecting it, what would you do with your knowledge? What opportunity would you pursue in the cannabis industry?

Roy: Well, obviously, I'm a bit of a data nerd. So if I can actually produce data, then I'm very interested in using data. And that's what I did in my previous company, a company called Renew Life that we grew from 30 million to about 110 million with digestive care products. And so I was using data from IRI, and Nielsen, and SPINS. I think I'd go right back to that and start brand-building in the cannabis industry, you know, using data from BDS Analytics, assuming that that was still around with me not being there...in order to figure out what the market opportunities are, what the niches are and targeting a new product development, special marketing campaigns pricing strategies. And so, all of those sorts of things that I've done before. And then, I know how to leverage data and I think there is a huge opportunity here in the United States to create some very, very powerful brands that ultimately will be billion-dollar companies.

Matthew: Yeah, great point. Your product is such an easy slam-dunk. I mean, all you have to do to be better than your neighboring dispensary is, you know, just implement the best practices in your data. I mean, if you just start there... I mean it's like it's...

Roy: Yes. We like to say we take the error out of trial and error. Most people are doing things right now by, "Okay, let's make one and see if it sells, let's test it with our friends, etc." And we make it much quicker or much easier, much less expensive to figure out what the category is, what's the growth opportunity now, who's the consumer and therefore, how do you want a brand and package that product to appeal the best to that target consumer so that you have much higher probability of a successful launch of those products?

Matthew: Yeah. Well, let's end with one final hypothetical here, Roy. Let's say, for some crazy reason, you had a great exit of BDS Analytics. Your investors and employees are super happy, all of your friends and family are healthy and happy. What would you do for just pure fun for the rest of your life?

Roy: What a great question. So I guess I think of about three things that I love to do. And ironically, you know, I would still like to do for-profit work. You know, I've trained in this world for 35 years now. I love building businesses, businesses with a heart and conscience, but I love building businesses. So perhaps I could do that more in a board member type of capacity. I did a lot of charity work, 25 years or so ago, in Africa, South America, India. I'd love to get back to doing that sort of thing, really getting exposed to the poorest parts of the world because you feel like you can have an immediate impact...it's very gratifying, it's actually a selfish pleasure, really, when you think about it to help people out in poor countries when you've got a bit of money to help them with that they wouldn't get any other way. And then, I'd love to combine that with travel. I've always loved to travel, my entire family has wanderlust, my father was in the Merchant Navy all over the world. So travel with a purpose, combining it with the charity work.

Matthew: Well, that's a great answer. Yeah, I can see what you mean by how gratifying it is because you can see such a big change quickly in an underdeveloped country where they go from nothing to a big improvement quick. Even something as simple as water, you know, getting clean water, how that changes up the whole dynamic of a village or something like that.

Roy: Yes, or getting shoes to a village or a soccer ball to kids that currently don't have one. It's amazing how little things like that, as part of a bigger effort, can make you feel so good.

Matthew: Yeah. Roy, as we close, can you give out your website one more time and tell listeners how they can connect with you and what type of businesses should reach out to you to become a client or just learn more?

Roy: Yes, Matthew, thank you. It's bdsanalytics.com. And we have services for dispensaries and license applicants to enable you to figure out which products to put on your shelves and how to match consumer demand. Our clients are growers, producers, and brands or people intending to get into that space who are developing their business plans. And you've heard how growers and producers and brands can use our services for sales, marketing, and product development benefits. And then also, investors are very interested in the way the world is going and growing. And, of course, we not only have the GreenEDGE point-of-sale data, but also the consumer insights services that I mentioned earlier on. So many companies are now beginning to say, "Okay, now I understand my market share but I don't know who my customer is." And so, we're helping them to figure out and then target very precisely the most attractive customer categories and segments.

And finally, of course, in conjunction with our partner, Arcview Market Research, we write the, "State of Legal Marijuana Markets," it's a big annual book that comes out as a best-seller in the industry. And also, "The Cannabis Intelligence Briefings." And we do provide custom consulting projects for large companies and small who are investigating the industry.

Matthew: Roy, is there any special way that dispensary owners can get involved and get these insights for themselves?

Roy: Yeah, absolutely. Thanks for asking. Yes, of course, dispensary owners and dispensaries can join our panel and they actually get the GreenEDGE service completely for free. All you need to do is set up access to your point of sale data. We anonymize it, aggregate it into a database and then you can get the full access to the dispensary point-of-sale service, you can look at your own sales, you can compare them to the state sales. So if you have a dispensary in California or, for that matter, any other state, let us know, we'd be pleased to have you participate in the panel and get all of this service for free.

Matthew: Well, thank you, Count Dracula, for coming on the show and educating us. We appreciate. That data is so valuable. Good luck with the rest of the year and we'd love to have you on the show again when you have some new data to discuss.

Roy: Well, thank you very much, Matthew. I shall go and try and find some blood now.

Matthew: Okay. Thanks, Roy.

How Terpenes Radically Change your Experience of Cannabis

Dr Ethan Russo Cannabis Terpenes

Dr. Ethan Russo a neurologist and psychopharmacology researcher. If you are in the cannabis industry or looking to be this episode will help you to understand the most important scientific aspects of the cannabis plant. Specifically, you will learn how terpenes radically change how you experience cannabis. Learn more about the benefits and science of cannabis terpenes.

Key Takeaways:
[1:00] – Dr. Ethan Russo’s background
[4:26] – Dr. Ethan’s study of cannabis
[6:15] – How does cannabis affect migraines
[8:35] – Dr. Ethan’s take on why cannabis was put on Earth
[9:38] – The endocannabinoid system
[12:44] – What is a receptor
[13:37] – Differences between indica and sativa
[17:56] – Dr. Ethan talks about the interplay between terpenes and cannabinoids
[24:11] – What does cannabis smoke do to the lungs
[27:01] – Rescue shots if you get “too high”
[28:31] – Dr. Ethan discusses the anti-inflammatory properties of cannabis
[30:50] – What does cannabis do to the human body
[37:18] – How does cannabis help with chemotherapy
[39:37] – Dr. Ethan talks about CBD
[41:10] – What is THCV
[43:43] – Dr. Ethan answers some personal development questions
[48:28] – Dr. Ethan Russo’s contact info

 

Important:
What are the 5 trends that will disrupt the cannabis industry in the next five years? Find out with your free report at https://www.cannainsider.com/trends

Read Full Transcript

Matthew: We are going to look at the cannabis plants today with a different lens with Dr. Ethan Russo, a neurologist and psychopharmacology researcher. If you're in the cannabis industry or looking to be, this episode will help you to understand the most important scientific aspects of the cannabis plant. Dr. Russo, welcome to CannaInsider.

Dr. Russo: Thank you for having me.

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

Dr. Russo: Well, I'm at my home, Vashon Island, near Seattle, Washington.

Matthew: Okay, quite an active cannabis community there, I know that. What's your background? How did you come to study plants and get into this industry?

Dr. Russo: Sure. Well, I'm a neurologist, and I had standard training, and pharmacology is any physician did, the difference was that as a teenager I had an interest in medicinal plants. There was a fellow named Euell Gibbons who wrote a book called "Stalking the Healthful Herbs," and I used that information to use something called Jewel weed to treat my poison ivy, which was quite successful. However, a lot of that tendency that I had fell by the wayside. If you forgive the expression, I was indoctrinated in standard pharmacology. But when I got out into practice in Montana, after I'd been there about seven years, it seemed to me that I was giving increasingly toxic drugs to my patients with less and less benefit, and I looked again towards medicinal plants as an alternative. Eventually, after spending sabbatical in the rain forest in Peru with the Machiguenga tribe, when I came back in 1996, I quickly became embroiled in the cannabis controversy. The benefit to me was that I found the topic really fascinating. And once I saw the incredible versatility of this agent to treat a wide variety of diseases, I was hooked, if you would, and everything went from there.

Matthew: Okay, so tell us some more what you're doing in Peru, down there.

Dr. Russo: Well, I was interested in looking at the medicinal plants that this particular tribe, the Machiguenga, used to treat migraine headaches. But as well, I was interested in any of the herbal agents that they utilized that were psychoactive. And as the case in most Amazonian tribes, there were many in both categories. I was a grad student who knew the language, and over the course of a couple of months, we documented 500 medicinal plants that they utilized, and that wasn't all of them by any means, but I was able to see firsthand how effective their medicines could be. It just opened up a world of possibilities for me in terms of additional research on looking for better ways to treat various human illnesses for which conventional medicine doesn't always have a lot of answers.

Matthew: Okay. Well, how did you even get connected with a tribe like that? What's the process?

Dr. Russo: Well, I was in touch with a large number of ethnobotanists, those are scientists that study medicinal plant use among indigenous peoples. And I came to know of the work of Glenn Shepard who was a grad student at Berkeley at the time and contacted him, and eventually, we decided to work together in Peru.

Matthew: Okay. And then, how did this evolve into your study of cannabis and understanding of cannabis?

Dr. Russo: Well, in 1996 when I returned to the States from the sabbatical, I remained very interested in medicinal plants, and particularly, those psychoactive ones, and developed a liaison with Rick Doblin at MAPS, the Multidisciplinary Association for Psychedelic Studies. So he also was interested in the same kinds of things, and very soon he proposed that I try to study cannabis and migraine, which is something I had been interested in, anyway. But at the time it was highly controversial as it has remained today, but at the time there really weren't any clinical studies of cannabis and humans going on. Of course, Donald Abramson, San Francisco, was trying to do studies in HIV/AIDS, eventually, was successful. In contrast, I never got permission from the federal government to do this. And by 1999, on my third try, I actually got the Food and Drug Administration to okay the study of cannabis and migraine, but then it was subject to other bureaucratic stalling through the National Institute on Drug Abuse, and I never received permission to do the studies. So it's been about 20 years that I've been trying to do the study in the States, and it still has never happened.

Matthew: Oh, gosh, frustrating, but not totally surprising. Well, as long as we're on the topic of migraines, how does cannabis affect migraines in your experience?

Dr. Russo: Well, interestingly, it has two totally different actions. If we look at the medicines that are used to treat a migraine, there are two categories, those that are used acutely to treat the symptoms and hopefully stop them, including the pain, the sensitivity of the eyes to light, the sensitivity to noise, and nausea. And then the other approach to treatment is a preventive one. So if someone has frequent, severe migraines, the idea of that kind of medicine is to give it daily and see if they can be prevented entirely or at least reduced in number and severity. Interestingly, historically, cannabis has been used in both situations, at the time to try and get rid of a headache and as a preventive. Usually, if we look at other medicines, so these are distinct things. You get medicine A is good acutely, medicine B is good as a preventive, but cannabis seems to have this multi-modal, a fact that makes it good for both types of treatment. So it's particularly interesting in that regard, right.

Matthew: Yeah, that is interesting. I mean, I'm sure there's a lot of people out there that are really interested in curing their migraines. I've only had one in my life and I just couldn't believe how bad it was. I was like, I finally understand people...when they're talking about migraines. It's totally debilitating.

Dr. Russo: This isn't nice, but I think that if more people had the experience just once, they'd be more empathetic with people that have this. Because as you found out at the time it can be totally debilitating. And if people are having a lot of these, it really puts some major cramp on lifestyle and enjoyment of life. There was a survey done some time ago that patients with a chronic migraine rated their quality of life worse than that of diabetics and people with other chronic diseases. So it really can ruin things.

Matthew: Zooming out to look at cannabis plant in a wider perspective, do you think the cannabis plant was put here on Earth evolutionarily to make us high?

Dr. Russo: No, I don't subscribe to that. You know, I guess, if in a solipsistic way, if people think that everything was put here for purpose of man, I think they're ignoring evolutionary history. Let me explain that, if I may. Humans are probably several hundred thousand years old as a species, whereas cannabis is about 60 million years old. So it was around a long time before there were humans to appreciate it, but presumably some of our forebearers, other species might have used it. There's evidence for chimpanzees seeking out certain plants to treat their parasites, so this seeking of medicine is not solely confined to humans.

Matthew: How do you explain the endocannabinoid system to somebody that's just learning about it?

Dr. Russo: Well, it's tough because education has been so lacking even for modern physicians. So with cannabis and it's controversial, and I suppose you could explain that when Dr. Stone knows anything about it is because of that controversy and its illegality, but let's look below that. One of the primary ways in which cannabis works is that THC, the main psychoactive ingredient of cannabis closely resembles natural chemical center bodies. These are called endogenous cannabinoids, cannabinoids within or endocannabinoids, same thing. So one, in particular, anandamide, the first discovered about 1990, very similar in its effects to THC. It lodges on this receptor called CB1, the psychoactive receptor in the brain. And as it turns out, that is really key to how our brains work in terms of all these other neurotransmitters, chemical messengers in the brain, because CB1 modulates how they work. I guess I could give one example. Glutamate is a stimulatory neurotransmitter, so it increases the signal through the nerve pathways. And that's good, it's important very definitely, but when there's too much of it actually produces something called neuropathic pain, nerve-based pain. CB1, in contrast, lowers the release of glutamate and treats neuropathic pain. Now, we could say the same thing about any other neurotransmitter in the brain. This endocannabinoid system affects the levels of all the neurotransmitters, and so it is important in pain, in emotion, whether you're gonna vomit or not, whether you're gonna have a seizure or not, almost any function you can name, and it's not just the brain.

The same thing applies to digestion where the endocannabinoid system is responsible for modulating propulsion, how fast things get through the gut, and secretion, how much water or lack of water there is. So if we look at any aspect of how our bodies work, our physiology, you've got some element of the endocannabinoid system that affects that. So it is a key modulator of what we call homeostasis, that's a natural balance in the body. When someone uses cannabis medicinally they are keying into these natural mechanisms which sometimes are deficient and need supplementation.

Matthew: Okay. Just so I can visualize what a receptor is, is that kind of like an outlet in a plug where there are a male and female, and the plug goes into the outlet in the tunnel receptor, binds...I mean, how could you describe that?

Dr. Russo: Yeah, it's a fairly good working model. Of course, because it's medicine it has to be a lot more complicated than that. But it can be thought of that way or like a lock and key. So we have the lock, which is the CB1 receptor, and the key in this instance can be a natural chemical called anandamide or it can be THC from the plant, both fit there on an act in a similar fashion. Then things get more complicated because there are other things that change the way the lock is and how tightly things bind, and so you can start off with the basic concept and make it a lot more complicated, and that's how it is in the body.

Matthew: Is there a real difference between into Indica and Sativa?

Dr. Russo: Well, we've hit one of my pet peeves, but let me explain. So the term Cannabis sativa means cultivated cannabis, and it was described in the 16th century by somebody called Leonhart Fuchs in Germany. And then Linnaeus, the famous botanist who gave us our binomial nomenclature, two names for a species, also called a Cannabis sativa. A short time later, and this is now in the 18th century, Antoine Lamarck describes something else. This is called Cannabis indica. But what he described was a plant from India that had narrow leaflets, it was a little different, he thought this Cannabis sativa that was growing in Europe, which we would recognize as hemp.

But there was never agreement on this, it was recognized that these two entities, let's call them, could interbreed, and I'm afraid that you don't get a lot of uniformity of opinion by botanical taxonomists. Those are the people that decide whether it's this species or that species. Let's fast forward to the 1970s. One of my mentors, Richard Evan Schultes at Harvard, went to Afghanistan when he could still do that. He saw that they had these short bushy plants in Afghanistan that he called indica. But you know what? It really didn't look like the Cannabis indica that Lamarck was describing. It seemed to be different yet. However, in the intervening decades, we've developed this common parlance of Sativa and indica, and the methodology is that Sativas are innovating up head high, whereas Indicas are sedating in a body high. And this is based somehow on what the plant looks like, and it's the shape of its leaflets and all, but it's very unreliable kind of formulation.

What we really need to know is what are the biochemical contents of the cannabis that produce the effects that someone either wants or doesn't want? And so I prefer to talk about what we call chemovars, chemical varieties. And to describe those, you need to know what the contents are, what the content is of THC, tetrahydrocannabinol, what the content is of CBD, cannabidiol, which has very different effects, and also another set of chemicals called the terpenoids. These are the aromatic compounds in cannabis that are also found in other plants like pine needles and citrus rinds. But those chemicals modulate how THC and the other cannabinoids work. So, if we really are interested in how this is going to affect a patient or someone who's using it recreationally, you have to know the chemical contents and you can't know that from descriptions like Sativa or indica. Besides, the breeding is so complicated. I'm afraid that these labels, as they're commonly used, just don't help the potential consumer at all.

Matthew: Well, you've mentioned something there and I wanted to dive into that. Can you talk about the interplay between terpenes and cannabinoids more? For example, you're saying, like if you took a terpene like a myrcene or pinene, or something like that you could...and you intermix it with your cannabis or add it to your cannabis or adjust the quantities, it changes how that cannabis affects you, the same cannabis, with more or less or different terpenes. Is that what you're saying?

Dr. Russo: Right. So, well, the easiest way to look at this is, we know a lot about THC, the main psychoactive chemical in cannabis. In 1985, synthetic THC was approved by the FDA as a standalone drug called Marinol. But, very quickly, patients notice that gee, you know, THC isn't like cannabis. When people took this, even if they were cannabis experienced, they found that THC tended to make them confused, there was this flight of ideas that made them unhappy rather than euphoric, and it was really hard to handle. Something was different, something was missing, and the something that was missing was other cannabinoids like CBD that limits side effects of THC, and the terpenoids weren't there at all. The terpenoids also modulate, change the effects of THC.

So let's give a couple of examples if we can. You mentioned myrcene. Myrcene is far and away the most common terpenoid found in modern North American types of cannabis. Let me mention, I don't call them strains, strains of bacteria. Again, we prefer the term chemovars, chemical varieties. But myrcene is prevalent, extremely prevalent in the offerings that people get in the dispensaries these days. It, on its own, is mildly sedating, but when you combine it with THC, it becomes extremely sedating and produces a phenomenon commonly known as couch lock, which I think is a very evocative term. It means, basically, you're immobilized. Well, you know what? If somebody is injured and they need to sleep, that's a good thing and some people like that effect. But if we have a patient who needs to work or study, this really isn't gonna be helpful to them. What they need to do is to be able to function.

Now, another side effect of THC, of course, for which it's notorious is the short-term memory loss. This is where...and this is classically portrayed on "Cheech and Chong" or any movie about cannabis where people laugh because they can't remember. They lose their train of thought. Yeah, so that's amusing, but it's not helpful if you have to concentrate on something. And this should be particularly the case for a patient who has to function in their daily life, you know, they have to take care of their family, or they have to work or they have to study. So what can be done about that? Well, there is another terpenoid called pinene. It's in pine needles, of course. This counteracts the short-term memory impairment that THC produces. So if in contrast to the excess of myrcene, there is a chemovar of cannabis that has a good amount of pinene, there is the likelihood that the person can gain their symptom control, control of pain, or whatever else the problem is, and still be able to function.

Right. And I mentioned that THC alone produces dysphoria, unhappiness. That can be changed if there happens to be limonene, another terpenoid in the cannabis. Limonene is a very powerful immune stimulant and antidepressant. It makes the cannabis experience sunnier, if you will, marked improvement on mood. And this should be familiar to anybody even if they haven't used cannabis. Because if you walk down the detergent aisle in the supermarket, what do you smell? Lemons. And there's a reason for that. Because psychologically this citrus scent is evocative in our brains of cleanliness or happiness. So, it's a bit of unsubtle advertising, but it also is a very powerful cleaning agent. So there's a reason for this. We're being subtly or unsubtly programmed.

Matthew: Yeah, I can see, where if I owned a casino I might be, you know, letting loose some limonene in there, I'm just kidding. But how about for the...if someone were to walk through a pine forest or something like that, could they get the same benefit from this terpene, from the...

Dr. Russo: To a certain extent, yeah. No, I am glad you mentioned that because this communing with nature is a feast of the senses, it's the sight and smells, and maybe birdsong, but let's concentrate on the smell. When you go particularly in the northwest where I live, if you go into a coniferous forest, the primary odor there is gonna be one of pinene. And it is this reversal of the short-term memory loss, also works on a normal brain without cannabis. So there's been an alerting effect because what it's doing is increasing the amount of the acetylcholine in the brain. It's inhibiting its breakdown, and acetylcholine is the memory molecule. In fact, in Japan, they have a term for this. It's called "shinrin-yoku," which means forest bathing. And this is why in a busy city like Tokyo, you'll see nests of forests and gardens where people can go and refresh their minds from the busy lives.

Matthew: That's a great idea. Yeah, they do seem to have this idea of balance in nature in Asia much more thought out. Let's pivot to what cannabis smoke does to the lungs. Can you tell us about that?

Dr. Russo: Yeah, I'm afraid I have to emphasize I'm not a proponent of smoking. Smoking anything is irritative to the lungs. It's simply inarguable at this point that smoking is a good motive administration. Because even when people need it, smoking of cannabis produces cough, phlegm, and bronchitic symptoms. Now, on the plus side if it's just cannabis without tobacco, we have no evidence that that produces lung cancer. However, it still does produce potentially carcinogenic molecules that the body has to process.

So it is not the best mode of administration. Beyond those side effects, it also, because of how quickly it works, there's a quick onset and offset. So if someone is smoking to treat their condition, they'll likely need to do it many times throughout the day, because the peak effects are only gonna be for one to three hours. For a chronic condition, it's much preferable to use an oral form of administration or perhaps a tincture in the mouth, it's gonna last a lot longer, it's not gonna produce these peaks of activity that can lead to more side effects. So that's better. And I should mention vaporization. Vaporization is inhalation of cannabis without actually burning it. So there are fewer of these poly-aromatic hydrocarbons, the potential carcinogens, but nobody's really demonstrated that they're totally eliminated yet, so it's unlikely, for example, that the Food and Drug Administration would approve vaporization as a method of applying prescription to forms of cannabis unless the technology improves a great deal. They also don't like the fact that there is again this quick peak of cycle activity. They prefer something that is going to produce symptom control without producing a high or other side effects like anxiety that are prone to occur if someone gets too much THC too fast.

Matthew: Right. I noticed some rescue type of shots and things that come on the market. I mean, you may not have had a chance to look at those yet, where they say, "Too high, take this shot of such and such, such and such." Would that have some of these terpenes in there? Would you conjecture?

Dr. Russo: Yeah, may will. Some years ago I wrote an article in "British Journal of Pharmacology" called "Taming THC." And one of the aspects of that was to look at what had been suggested historically as antidotes to cannabis overdose, if you will, and I should mention here, overdose here doesn't mean that you quit breathing, that can't occur with cannabis, but rather being too high, becoming paranoid, or anxious. But what we see is a couple of things we've mentioned already. Lemon juice was one presumably because of limonene content, and pine nuts which have pinene in them was another. So I can't endorse any of these products.

Additionally, I don't know what is in any particular one. There is a concept behind them though. What I think might be better is to have chemovars cannabis that have this built-in safety margin because they contain the right amounts of those components like the terpenoids that are going to reduce THC-associated side effects.

Matthew: Yeah. Gosh, this is such a fascinating subject, it really is. But let's move on to the anti-inflammatory properties of cannabis. Can you tell us about that?

Dr. Russo: Sure. Well, there are so many. TT has some affects this way. Where cannabis really shines as if it's got cannabidiol in it as well. Cannabidiol was pretty much eliminated from North American recreational cannabis over the last several decades at least until recently when their interest developed because it became known that cannabidiol was good in treating seizures, epilepsy, and many other conditions. So cannabidiol is psychoactive, it reduces anxiety, and reduces paranoia, but it doesn't make people high. So it has no abuse potential, but additionally, it is what's called an anti-inflammatory analgesic, meaning that it reduces inflammation and pain, and without producing a high or addictive potential.

Additionally, there are many, many other components of cannabis among the terpenoids that also are anti-inflammatory and may affect pain, to reduce it. So, really, what we're dealing with in cannabis is a multi-modality synergistic agent. In other words, it works through different mechanisms. Synergy is a boosting of the effect. So instead of two plus two equals four, this component plus that component in cannabis might be equal six.

Matthew: There are so many conditions that could benefit from the anti-inflammatory properties. I mean, I know friends and family members that have rheumatoid arthritis, they have psoriasis. There's just an endless amount...not endless, but there's a lot of people suffering from problems of inflammation, or at least that's a side effect of some sort of problem they're having in their body. So I think there's huge promise here and probably not even talked about enough, but let's move on. What does cannabis do to the human body when it's consumed?

Dr. Russo: Well, it depends a lot on the dosage and the method of administration. Let's look at smoking which remains the most prevalent type of activity. There, what is happening is people inhale the smoke or the vapor, it's rapidly taken up by the lungs, into the bloodstream, and gets to the brain. And there, among other things, it's stimulating the CB1 receptor, that affects neurotransmitter levels. If done properly, the person will tend to relax. They may, if it's not too high a dose, it will lower anxiety. If it's too much, they might have trouble remembering their train of thought, on and on. When taken orally, the absorption is going to be slower on...there'll be fewer of these peak effects or they may just be delayed somewhat.

But, really it's a matter of what's in the material because cannabis isn't just one thing, it is a neuronal agent with a lot of potential ingredients and different proportions. And this is why I have been such a proponent of the idea that consumers really need to know what is in the material. It's analogous to the difference between somebody that goes to the grocery store and just pile things in the cart and doesn't pay a lot of attention. As opposed to the person that looks at every label to ensure that radiance to which they're sensitive or that kind of thing, I'd like to see consumers be as exacting in their requirements when they go to purchase cannabis.

Now, unfortunately, we need the help of governments to regulate this. Because as it is now at best, even in states where it's legally accessible, generally speaking, the most somebody is gonna get is a listing of how much THC it has and how much CBD it has. Rarely if ever will the consumer have access to information on the terpenoid content or actual objective evidence of what other consumers have reported in relation to this. So then people have to rely on what the bud tender tells them about it, and again, they may be experienced and know what they're talking about or they may not really know. So it's a difficult situation, and again, produces this difficult intersection between what the consumer might want and what the law allows.

Matthew: Yeah, it would be great if a trade group, or some group of growers, or some leaders in the industry could come up with the standards on their own and say, "Hey, look at our best practice as the cannabis cultivators of California that we're gonna provide this on all our products sold at dispensaries." That'll be wonderful.

Dr. Russo: Sure.

Matthew: But I mean, I can see a day where, you know, you get some product at a dispensary and it shows you the cannabinoid profile, the terpene profile, so you can get a sense. Like, let's say someone tends to be a little bit more paranoid than they like from consuming flour and they know like, "Hey, compared to my friends, I'm just a little bit more paranoid." You're saying in that situation they could just maybe look for some flour or some infused product that is high in a specific terpene that could then get them much closer to the sweet spot for them?

Dr. Russo: Right, exactly, and the best dispensaries actually have this capability. I've been to ones where there's a binder, and you can see just that, a graphic depiction of total cannabinoids, cannabinoid balance of what the various terpenoid levels are and what patients have reported when they use it in terms of being more relaxed, being more mentally active, whatever it is. And people can look at that and say, you know, "I'd like to try this one," or similarly, you could tell the bud tender, "Well, you know, I'm looking for this effect, but I don't want that side effect on..." Again, between them they could come to a mutual decision as to what to try. But again, this isn't legally mandated anywhere, and it applies also the safety issue.

If I could use my home, Washington State, as an example, you know, legalization here hasn't been particularly great to the medical consumer. There was a good market before where people had availability of reportedly organically grown material that was working for them, and there were liberal allowance limits on what someone could possess. Unfortunately, the medical market was mandated to be folded into the recreational markets, and so a lot of the chemovars that people would use medicinally were no longer available. There were limitations on what they could get, certainly limitations on the information available, and on the safety side there was no requirement made for testing of pesticides. And we know from studies that we did last year that there has been rampant pesticide contamination in the legal cannabis market in Washington State.

Matthew: Oh yeah, not just Washington State, it's everywhere. It's systemic, unfortunately.

Dr. Russo: Right.

Matthew: Now, how can cannabis help people going through chemotherapy?

Dr. Russo: Well, a couple of ways. The most obvious is in allaying nausea and vomiting. This has been known, again, for decades on...it was the reason that synthetic THC was approved by the FDA for that indication in 1985. And people will say, "Oh, the studies are old and we have better medicines now." And that's true to some extent, you have what are called serotonin type 3 antagonists, the drugs ondansetron and granisetron. Those work for a lot of people, but they don't work on a special kind of problem in chemotherapy called anticipatory nausea. And this is sort of a condition reaction where someone will get nauseated when they walk into the chemotherapy suite before they've been given anything. Actually, the cannabinoids work quite well for that, and we know from thousands of patients who have failed traditional agents to treat nausea associated with chemotherapy that cannabis often works beautifully for them.

So that's the one big thing. But I really need to mention also how cannabis seems to help people's adjustment to a very difficult chronic condition like cancer and just lets them cope better because it's not just dealing with nausea. Almost invariably these are people in pain, either from the cancer itself or side effects of chemotherapy. So there's that, and there's the disruption of their sleep, cannabis is gonna help with that. And then, again, just this emotional factor, the ability to separate themselves a little bit from the situation, to laugh at the irony of the situation, just overall adjust to this challenge to their life.

Matthew: Sure, great points. I want to circle back to CBD for a moment. You say that CBD is not potent, can you specify what you mean by that exactly?

Dr. Russo: Yeah, well, you know, we're Americans, we're hung up on having the most bang for the buck. So potency, with respect to a drug, means that a lower dose gives you the effect that you want. So THC is relatively potent. If you look at the numbers, the milligram somebody needs a day, it's usually very low. In contrast, cannabidiol, you need higher amounts. Part of this is because it isn't always absorbed well if taken orally. It needs a good carrier, like a fat. But beyond that, the numbers that you need to control seizures, for example, can be a lot higher than for THC. So that's all it means. Potency isn't an issue unless something is really expensive. So, you know, if you're growing medicine and there's enough CBD, the fact that you need a higher number isn't a bad thing because CBD is so non-toxic that you can take hundreds and hundreds of milligrams without producing any serious side effects. You know, often a combination is better. So, for many, many conditions a touch of THC, a very little amount with a much higher number of milligrams of CBD may be the best approach oftentimes.

Matthew: What is THCV, and what's important to know about that?

Dr. Russo: Yeah, well, that one is a little bit inaccessible in current offerings in cannabis in North America. So THCV stands for tetrahydrocannabivarin. It is quite similar in appearance to THC except it's got a three-carbon side chain instead of five. Now, THCV is present in small amounts in some cannabis chemovars from southern Africa, so South Africa, Zimbabwe, Lesotho, that area. It is a really interesting molecule. It's got some similarities and some distinctions from THC. So THCV at low doses actually is what's called a neutral antagonist at the CB1 receptor. So it actually reduces hunger rather than producing it. At really high doses, it acts more like THC so it changes its pattern. THCV is interesting medicinally on a couple a lot of levels. On the one hand it reduces hunger, it could produce weight loss, it also improves lab values in diabetic people in what's called the metabolic syndrome. So this could be very useful to people who have an obesity problem or pre-diabetic. But beyond that, it also is a very useful drug for treating nerve-based pain, neuropathic pain, and as an anti-convulsant for seizures. As it is now, most cannabis varieties have very, very small amounts of this in North America. GW Pharmaceuticals in England does have a plant where 92% of the cannabinoids that it makes are THCV, and so they do have this in early clinical trials for some of the situations that we mentioned.

Matthew: Gosh, there's so much still to learn here. I feel like we're just at the dawn of a huge, huge wave of knowledge that's just kind of gonna settle upon us, and there's so many different directions I could take this interview, but it's time to draw to a close, and with that I just wanna ask you a few personal development questions before we go. Is there a book that has had a big impact on your life that you'd like to share with listeners? It doesn't have to be about cannabis, or anything, or science, but just anything in general?

Dr. Russo: Well, you know, Matt, it's a surprisingly tough question for me because I read a lot and I've had so many influences. Would it be okay if I mention two? Well, I was very influenced when I was about 18 on the works of Herman Hesse, and I'd it single out" Siddartha" as a knowledge of discovery on opening the mind to different possibilities. So that was very influential to me as were his other writings. On the non-fiction side, I again cite one of my mentors, Richard Evan Schultes, the ethnobotanist. And again, when I got back into the study of medicinal plants, his books were my Bible for developing leads on where we should look. And I would just emphasize that one of the failings of humans is to understand the lessons of history. Just because something is old knowledge doesn't mean that it doesn't have applicability today, and that certainly is the case with respect to cannabis therapeutics. There are many old lessons out there that we need to heed once more or we're just gonna be wasting energy, where we have the evidence already and just need to follow up so that we can prove these things using modern techniques.

Matthew: Is there a tool, web-based or otherwise, that you consider vital to your productivity? Okay, can we pick up that call and ask that person what they're doing just for fun? We can turn this into a quick kind of like...

Dr. Russo: It's probably for my wife so I don't...

Matthew: That would be nice, too. Don't worry about that, it happens. Back to the tool, is there a tool, web-based or otherwise, you consider vital to your day-to-day...?

Dr. Russo: Yeah, I'm gonna mention two, one old, one new. Because I do a lot of writing journal articles and the like, a tool that's been essential to me is one called EndNote, and anybody who does a lot of writing that they have to reference absolutely has to have the software. So here's a learning curve to it, but once you input your reference you can be writing for any journal, and as long as you know the format, it will automatically put the reference in. You know, I do a lot of journals where they have a numbering system, and if you change one you have to change everything, and it's a nightmare to do this manually. But this just automates the whole thing, and there's something like 8,000 references I have put into this software now, and I just find it essential.

The second is just new to me in the last week. I saw a local news story on this in Seattle. Paul Allen has a Research Foundation at the University of Washington, and they've come up with a new search tool. It's called semanticscholar.com, I believe it is, or it might be .org, Semantic Scholar. So it's like PubMed in that you put search terms in and it gives you a list of references. However, it differs from the National Library of Medicine PubMed in that it really increases the pertinence level of each of the entries. And if there is a PDF online source for the article, it gives it to you right there. So it can save a tremendous amount of time in accessing articles on a given subject. I've played with it in the last week and I've been really pleased with how well it works.

Matthew: That's cool. I assume since you live in Seattle and Paul Allen was the co-founder of Microsoft, we're talking about that Paul Allen?

Dr. Russo: It is one and the same.

Matthew: Okay, he also created the...what, like a Jimi Hendrix Museum out there in Seattle? Have you've been to that?

Dr. Russo: Yeah. Well, you know, some people get money, some are frivolous with it, some manage to do good things.

Matthew: Yeah, he's done a lot of interesting things, I will say.

Dr. Russo: You bet.

Matthew: Well, Dr. Russo, thanks so much for coming on the show today. Let listeners know how they can, you know, find the articles you write and the different things you do, and just stay in touch with you.

Dr. Russo: Well, back to what we just discussed. If people put Ethan Russo and cannabis into Semantic Scholar, they're gonna find access directly to a lot of my articles, and that's probably the very easiest way.

Matthew: Okay, I really had a fun time today. You did a lot of educating around terpenes and some other subjects I just found fascinating. I wish this could go on for another hour, but alas, we have to close. Thanks so much for coming on the show today, we really appreciate it.

Dr. Russo: My pleasure.

Vegas Grower Uses Math and Science to Optimize His Grow Room

kurtis johnson cannabis grow

Kurtis Johnson from Thomson Farm One spares no details as he talks about how optimizes his 5,000 foot Las Vegas grow. Including stacking plants into two-story arrangements, adding nutrients to the water, adding CO2 and more. Listen in for the crucial details that will make you grow successful.

Key Takeaways:
[1:20] – Kurtis’s approach to a grow
[3:55] – Kurtis’s background
[12:01] – Kurtis talks about the layout of his grow
[17:01] – The purpose of carbon in water filtering
[21:31] – Dissolved oxygen and pests
[31:54] – Kurtis talks about Compost Tea
[36:01] – Kurtis talks about stacked growing
[40:32] – Plant temperature

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

 

Read Full Transcript

Today we're going to walk you through the challenges, opportunities and day to day operations of the 5,000 square foot grow with Kurtis Johnson from Thompson Farm One. Kurtis, welcome to CannaInsider.

Kurtis: Matthew, thanks so much for having me on board.

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

Kurtis: I'm here in Las Vegas, Nevada, Southern Nevada. We're ideally, you know, about four hours from the beach and about an hour from the mountains. So we're a...Sin City is what some people call it, but it's just a beautiful little town based on an oasis.

Matthew: I think you're little bit of a different mindset, kind of an engineering mindset you bring to growing, and I want to let the listeners understand how you think about cultivation. It's different and a little bit refreshing. So why don't you just tell us what you think about it, how you think about it and the lenses you use when you look at your grow?

Kurtis: Well, thinking differently is certainly not always a compliment. But thank you.

Matthew: It's not always, yes.

Kurtis: I come from...my degrees are in mathematics and in physics, and I just look at the math of what we're trying to do. I come from a family of small business owners, and when I looked at cultivation and, you know, legalization of cannabis, I looked at how can I maximize output, really care for the quality of the product and the plant. And then the most, you know, critical function for us here is really energy and thermal management. So I look at those issues and I just do the math. You know, the math predicts what's gonna make best. And the challenging part of cannabis cultivation, there's some great people like Jorge Cervantes, is just...he's just got a fabulous bible of medical marijuana. I don't have it right in front of me but his book is just fantastic. Ed Rosenthal's book is fantastic.

There's a lot of great people who've done a lot of great work in genetics and in cultivation. And so, I just, you know, I devour information. I read everything I could about what other people are doing and doing well, and then I just work to network to find the people who seem to have their head on straight, who seem to understand, you know, both the business aspect of it and also people who look at solving problems, you know. You know, there's a lot of people with some great solutions, but, you know, a lot of people have been working in a quiet dark space. It's really light inside but it's awfully dark on the outside for people who've been growing kind of I guess off-grid or off the radar and not selling through legal or other functions.

So collecting that information too has been a great way for me to look at building the best possible facility. So that's been my goal is to build the best possible facility, and to try to work in a design-build function so that I'm reducing ongoing labor costs and reducing steps, but still keeping the work, you know, as an enjoyable labor as opposed to, you know, an Orwellian work environment.

Matthew: Sure. I don't know what's that. You mentioned science and math as your background. What were you doing before getting into the cannabis cultivation business?

Kurtis: I was running a small collection of automotive repair and specialization and design, you know, like design modification build, specialty car shops. And my family comes from automotive racing on the recreational or on the amateur side. And, you know, I grew up in the garage with my dad. My dad's a carpenter by trade and an engineer by necessity and that kind of...Minnesota farm kid bootstrap education to how can we make this better, stronger, faster, build the six million dollar-man with the leftover parts of the tractor? That's where I come. And when I retired from the automotive business and from the real estate business here in Las Vegas, and as a lot of us were forced to do in the Great Recession, I looked at what did I wanna do in the future? I'd always been involved in some like closet growing with the legal medical card and, you know, passed in my life I'd grown on the, you know, grown in the ditches of the farms in Minnesota.

So cannabis cultivation and growing into that as a business that had an opportunity for business was something that interested me. And so, I got started with a partner and we just learned and grew and learned more and grew more and did a better job, build a better product, build a better system and then did a ton of testing between our two kind of mini-grows and our test grows. Prior to legalization, we built through all kinds of different growing environments: aeroponic, hydroponic, soil cocoa, [SP] deep water culture, different mediums, different feeds, different testing was and is a key part in building a great product when it comes to cultivation. So what happens...

Mathew: How did you arrive at your current growing media? What are you using now? You mentioned aeroponics, hydroponic, all these things. What do you use now to grow your plants and what do you think has been the kind of tradeoffs as you switched between doing growing media?

Kurtis: Everything is obviously a balance of, you know, what works best in a given space. I think tuning a room, tuning a grow space is about a six-month process. It seems like every different space has its own kind of, you know, I don't know, magic. I don't think it's this way to put it in the scientific way. So tuning a room to what fits best and here we have closed environments because we can't expose our product to 115 degree super dry air during the summer months and we don't want any smell to leave those spaces as dictated by regulation. So, you know, we look at a lot of work with our air conditioning and our dehumidification. And what we've found best is a cocoa mix that seems to give us, you know, rapid growth, ease of transportability and, you know, consistent results.

There's a guy, Lewis Miller, Miller Soils, he just seems to have...he grows...he doesn't grow product. He grows soil and he has, you know, really refined a cocoa mix that really fits and does well, can be, you know, just drip irrigated and drained and it just that's a system of success. It's simple. It doesn't involve too much craziness with, you know, dependency on pumps and people and all the rest. I mean we're automated in how we feed to be sure because we, you know, it is too much work to do that on a regular basis by hand. But his system of, you know, the cocoa that he gets, produces, and the soil that he builds for on organic-based bed are the things that make life easy when it comes to growing and that's simplicity.

Matthew: Okay. Is he just in Vegas or is he all over?

Kurtis: He's out of Boulder and he's...he ships containers of his made dirt throughout the United States and even internationally. So I mean he's kind of a...he's a connoisseur of dirt. I mean he's so funny and I'm not...I know him...I've never actually seen him, but I know him by finding him, talking to him on the phone. And he was a suggestion from somebody that I do some nutrient work with and like it just...my nutrient numbers weren't...I measure pH, EC, dissolved oxygen content and salts and solids going in and coming out of my medias. And when I look at, you know, I look at these variances and I was trying to define what's causing, you know, microbes, do I have...what do I have that's creating these changes? You know, and when I went to the Millers Soils cocoa mix, it just...like all that stopped. It became consistent. And consistency is the only thing a scientist can use to make improvements, you know.

There's lots of things that happen that make plants go great and we don't have any idea why. But eliminate the inconsistent things that come out in the numbers you can measure and then you can really do something about it. So that's how I found him. That's how I worked with him and he's also just wicked smart when it comes to what's going in the dirt and what's...and he's got a whole test and research section of building new dirt. I don't know if dirt's the right word. Soils probably [crosstalk 00:10:31]. But...so that's what we've been. We're in small pots and trays and drain. I mean there's a little extra work involved in that, but transplanting goes easy. There is forgivability in basically 3,000 feet of flour, we're knocking out two and a half to four pounds seven days a week of cut dried product. And in that we need consistency on a perpetual harvest in a couple of rooms of flour. Consistency is really important and a little bit of forgivability.

And if you have an emitter plug or cause [SP] a problem as to some of the more advanced and I think better yield functions of aeroponic or deep culture, you're gonna lose a product in a mechanical mistake or in a mechanical failure that you can't watch everything all the time. I mean we'd like to, but there's only 24 hours in a day. And, you know, as my construction working father would say, you know, all I want to do is work half days. Any 12 you want, no problem.

Matthew: Well, walk us through your grow. I mentioned the size, but tell us more about the size, how many people you have working in there, the look and feel and just a look over your shoulder as you would be panning through your grow.

Kurtis: We start out with just some racked, you know, racked cloning and propagation off of a few dozen mothers. We'd do basically a nitrogen deprivation pre-clips so that the mother is really ready to grow roots. We get our clippings into propagation domes. We get those rooted. Those go into small pots for a little care, you know, basically a seven by seven by seven little pot. And with Louis's cocoa and we start on a light feed that ramps up pretty quickly, those then just go into...so that's basically a third of what we have going on, a little less than that mothers and propagation. And then that jumps into two rooms that make up, you know, basically 1500 plus feet a piece. And there, one is racked in two levels so we're running in, you know, we're running in a vertical function. We have a bit of heights in there and we're able to capture the heat and get it out.

So those two levels just, you know, we go basically, you know, clip, root and then flower. So we knock those girls through as quickly as we can, care for them, take care of them, make sure that everything rolls smoothly with their nutrient program. They go in the automated systems. We have, you know, water totes [SP] of our...we clean our water hard with an RO system in advance, RO carbon, and then we add to our water the nutrients needed and we do something a little different which is oxygenation. So I use a water splitter. That splits hydrogen and oxygen inside of our nutrient tank so enough salt base and there's enough electric conductivity in there that we're able to split the water, the hydrogen boils out the top and the oxygen gets sucked into the nutrient base.

So roots need oxygen more than I think a lot of growers bring to value. And if we're for taking our dissolved oxygen in the water in the range of, you know, tap water, sitting still water, will be like a dissolved oxygen ratio of like 7 and we get it up into 18 to 20 by, you know, not through a bubbler but through actually splitting the water and oxygen and hydrogen. And that...you know, those microcapsules that come out of those electrolyte plates that split the water, the oxygen dissolves back in. And so you get a heavy concentration of oxygen in what you're feeding. And that's been something I think that really helps us as well to keep our systems clean and also to really produce, you know, high volume from less electricity and less...because root is fruit, you know. The better your root structure, the better you go there.

So we have the three levels. It's kind of a segue there into the water. And so we have the three levels in one room, two levels in the other room. We look at our genetics that can tolerate more heat. Those run on the top decks. Our middle deck...and these are decks that are six foot tall. Our middle deck is...are kind of our premium product that can run in the middle, and then stuff that needs a lot of attention we keep on the...just basically knee-high level so that we're able to kind of dote on those girls to make sure that they're well cared for and that they get the extra pruning and the extra effort. The stuff that goes on top doesn't get a lot of prune because it doesn't, you know...working up there doesn't work well so that mostly goes for extraction.

And that gives us extra production and value out of a smaller space, you know. If we had more money, we'd have a bigger space but, you know, we grow as we grow. And sometimes we have what we have and we do the best with it. That's part of what happens.

Matthew: I wanna circle back there to the water for a second because you said some interesting things. First of all, for everybody listening, RO is reverse osmosis. But you also mentioned that you do the carbon filter which, you know, like a [inaudible 00:16:44] is a carbon filter essentially that takes out some of the impurities for the flavor and so forth. But what is the purpose of the carbon? Is that really just like a gross kind of cleaning agents before it goes into a fine cleaning agent or what's your thought around that?

Kurtis: The public water we have here in Las Vegas is a combination of what comes out of the wells, and that's all heavily alkalined, and what comes out of Lake Mead which is the Colorado River. And that's heavily treated and heavily chlorined. In addition, years ago there was a small rocket fuel plant that blew up here, and we have some perchlorate and a lot of estrogens and a lot of PCBs in our water. It's all drinkable and fine and wonderful. I'm not saying anything about the water district, just I look for basically as close to distilled water as I can get. And so, I start with a heavy carbon wash that's just activated carbon and, you know, what would be at home you'd think of like one of your tanks for your water softener. But that's just all just a...it's just a changeable media activated carbon. Then we run through an RO, you know, a GE Marilyn, [SP] a large industrial style RO.

And then we look at what's our EC, our electrical conductivity, and what's our pH of our water. And, you know, that gets us the clean water that we can then add back in what we want. You know, you can't feed distilled water. It strips everything...you can't drink it either actually. You shouldn't because it strips all the minerals back out. Water is a fabulous solvent. And so we wanna add the minerals that can be actively taken up by the plant. And so, we add those back in after we've basically stripped the water to be as clean as possible. So that's the activity...that's the prefilled water. We do use that sometimes as an end of cycle flush just a couple days before harvest. But, you know, traditionally, that's just prepped water that's ready to go for us and to add back in what water plants desire.

Matthew: Okay. So to flush out any remaining nutrients out of the plant, you mean use like a distilled type water with no nutrients?

Kurtis: More for us it's about flushing out the cocoa media. We look at that as a reusable, you know, as a reusable tool. If we flush that cocoa out and just, you know... We look at nutrient. We look at salt built up, you know. The meters that one has for water, you know, can start with...I would hope and believe that most growers would run a pH meter and then look at what's the acidity. Then you look at the EC, the electrical conductivity, which is gonna give you what's basically the salt load. And the salt loads are your minerals that you're adding back in. And then you look at the oxygen content of the water. And then we just lay our water out on a little glass slide and let it evaporate away and see what crystallizes, kind of like a mini rock candy, a little mini-rock candy set.

And we look at what, you know, what is hanging out in our water pre-feed and post-feed so we can see what's up taking, you know, what's happening there. I'd love to have a little more technology in water. I'd love to be able to look at the individual components, my phosphorous, my nitrogen and my potassium and my boron and my magnesium but...and my calcium. But I can't, you know. I don't have that scientific tooling to my disposal. We do take water out for a test periodically though just to see what it's looking like through a mass spectrometer that gives us some feedback on problem-solving if something seems to be a little strange or things are different.

Matthew: I wanna circle back to the dissolved oxygen too. Now I guess it's hard to tell because you don't have a basis for comparison. But does the dissolved oxygen help reduce pest problems because pests typically don't like oxygen? Is that true?

Kurtis: I don't have an answer for that. You know, I look at the microbial functions. When you look at microbes, algae is...seems to be ubiquitous to everybody's, you know, everybody's tanks, everybody's reservoir. Everyone sees algae. Algae, you know, algae's microscopic plant life that is, you know, found an ideal living environment and what we want for our plants is an ideal living environment. You know, perfect temperature, perfect humidity, perfect everything. Algae grabs the light and starts to grow, producing waste that ends up being a problem for us. So I use UV sterilization and I use ozone sterilization to work through the algae functions because I can pinpoint those and run, you know, run through filters that have UV light sterilization and have ozone sterilization to get rid of those...you know, the waterborne pests that we might see, the waterborne microbes that we don't wanna see coming back around.

The oxygen that we add to the water promotes, you know, promotes growth. It's kind of on the other side of that, you know. Oxygen is great. Oxygen is basically providing the fuel that makes things grow. You know, a match in a vacuum doesn't burn. It needs the oxygen and the oxygen is what, you know, what the plants use in their combination of the nutrients that they bring together along with the photosynthesis. So on the top side they're taking the CO2 and pull in the carbon out of the air, and on the bottom side, they're using the oxygen to oxidize those nutrients. Everything that we put in the water is water soluble, but it's water oxygen soluble. So when you add oxygen to that mix, those oxidizers grab on and they carry them up in through the plant in the water.

And that's...and then the plant can more easily pull those nutrient bases, those salts, and those minerals out and bring them to where they need to be inside the plant.

Matthew: This is fascinating subject. You know, what you could do with water and, you know, looking at this from various angles because I know there's a lot people listening. They're just like, ''Oh, crap. I'm just doing reverse osmosis.'' And maybe they're not looking at this quite as holistically. So maybe they do pH too but, you know, at the EC, oxygen content, all this sterilization with UV and ozone, there's a lot of things to consider here.

Kurtis: No, and the more you do, the more I learn about water, the more I feel like I don't know anything. It's just...I mean, when you look at adding...as you add salts in, the salts and minerals that we add in that are the plant nutrients, how do they bring changes in the migration of the...around the root. The rhizome layer, there's a...basically it would be a micro bloom of all the things that are so small. We can't see them or pay great attention to them but all those little viruses, little...all that activity in that is all incredible. So it's the difference between growing good soil and having good solid soil and good solid plants is the difference between spoiled milk and yogurt. It's what microbe is doing what for you. Those are the true engines of a grow is all that stuff that's down in the soil and making all that happen, you know. And the oxygen is part of that.

I think one of the reasons why when I've been doing different grow study tests, when I look at the deep water culture, which I love for results, it just it grows so well, you know, production-wise getting those... And I just was looking and looking at that and all the problems that occur with, you know, the pumping and the water and the pumps failing and the bubblers failing and, you know, just triple redundancy to keep a large scale grow rolling. And as 5000 feet is large scale, to be sure we're a little puppy. But when I look at all that and think, ''What is it that makes that so great?" and to me it's all that oxygen that's coming through the bubblers. And maybe I'm wrong. Maybe, you know, maybe I don't know enough about that. But when I started adding oxygen heavily to my water and getting my water to be oxygen-saturated pre-feed, I really felt like we just saw a big kick in plant health and in production.

Matthew: Just on a personal level, how do you drink [SP] water? Because typically I run water through reverse osmosis and then I just put it in glass jars and I just add like a pinch of sea salt to it. I'd like to add some trace minerals to it but I'm just too lazy. What do you do? Do you just drink tap water? What [inaudible 00:26:45]?

Kurtis: I drink...I'm a water goofball. So in past homes that I've lived in, I have a whole house RO system so the water gets carbon...basically, it's everything I do for my plants I do for myself. Big carbon collector, big reverse osmosis, put it in a tank, ozone the tank and then when it leaves the tank to go get pumped to inside the house where it's shower, drink, whatever because you're...you know, you're showering in chemistry as well when your largest organ is your skin. And you absorb as much water through your skin during the shower as you do drinking two glasses of water so.

So, you know, at that point when it's leaving the RO tank, the basic sterile tank, then I run it through a...you can buy collection filters that are built of crushed sea shells. And so, they have the calcium, the magnesium and a few other salts in them as well and minerals. So then I'm adding those back in. So I'm stripping the water clean, get at the point where I know what zero looks like or as close to zero as possible, and then I bounce it back up with... And I do that in the grows as well, you know. I just run...when the water is going out of the RO tank and going into the nutrient tank, it goes through that basic seashell. And that that lasts in the realm of 50,000 gallons and then you replace the cartridge and that cartridge adds back in those... And that's, you know, that's something that works in a whole system, you know. Putting in a jar, throw some salt in it is probably better than...I don't know.

You know, it's a balance, you know. It's a balance of what you do. Some people will hang crushed seashells just like in a tea bag in their gallon jugs, you know. That works well, you know, as opposed to putting just salt in. You just, you know, you have like a tea on a tea bag that you just have crushed seashells and those slowly release their mineral into that. So that would be would be my...and pH...I don't pH the water I drink regularly but I brew a lot of kombucha and I like to make vinegar. So...and I like to do some fermenting foods so pH is a...the pH meter that's down in the kitchen is as important as the pH meter that's upstairs in the grow. So, you know...

Matthew: So this is a fascinating topic. I know a lot of people listening are like, ''Oh, shit. I'm just drinking tap water. Am I polluted?'' And the answer is you probably are because tap water got, you know all these chemicals. We don't have Elon Musk at these municipal water districts, you know, making the water here. They're just doing the minimal thing they can to get away with it.

Kurtis: I'm gonna disagree with you in that realm. The water company is working to do their absolute...I mean it's amazing that nearly...I mean except for Flint, Michigan and maybe a few other places throughout our country, the water district, U.S. wide and Europe wide is amazing in the fact that I can flip on a tap and have clean drinkable water. Is the water perfect? No. Is it good enough? A hundred percent. Tap water is good enough. It really is. And, you know, and it's...I don't have any challenge at all, you know, drinking tap water. And I have friends in Wyoming and there's a lot of extraction in Wyoming and the water there is glacier, you know, glacier and aquifer-fed and it's beautiful. And I took some and I love the taste of it. And I took some and ran it through a test and it's, you know, it's pounding out benzene.

And I'm like, ''How is it benzene in this?" You're just...you're right up in Jackson Hall in the most beautiful place in the world and the water's got benzene in it. And you're just like, ''Goodness, what do we do next?'' And maybe a little benzene is good for you, you know. Think of it that way, you know. I got a bigger carbon filter there though.

Matthew: Well, I could go on with water all day. That could be a separate episode but I wanted to ask you about compost tea. Ever try to experiment with that?

Kurtis: I have, and my challenge with compost tea...and I do it at home but I don't do it at work. My challenge with compost tea is the inconsistency.

Matthew: Maybe I should back up on this. Can you tell us what compost tea is for people that are not familiar with that term?

Kurtis: So a lot of what we put into the plant, the plant uses to produce everything but what we want. It produces stems. It produces fan leaves. [SP] It produces starting leaves. It produces, you know, all the effervescence that come off the plant and then we smell in the air when we smell our grows. All that that doesn't go into what is the actual but inusable product is recyclable. So, you know, get that in to a composting environment. Let the microbes do their job in bringing it around to where it should be and then taking that product and, you know, bagging it into flow through bags and soaking that through with traditionally a lower pH environment. So I get my pH there around like 4.2, 4.4, in that range there, so my compost tea does not become a bloom of, you know, organic chemistry in algaes and in funguses and everything.

So I get the pH low. I get the nutrients basically that I've captured that the plant didn't necessarily use 100%, you know. And those were used for growth but not necessarily to produce THC, CBD, CBG, CBK or any of the turpines [SP] that we value. So those things I don't really, you know, I don't really think there's a reason why we shouldn't reuse those in the, you know, the biosphere of the earth that we live in. Everything gets reused. And in our little grows, reusing things is also, you know, of value and produces I think a more flavorful product in many people's eyes. And it tends to have a little more of an organic feel to making your teas, taking that basically the leftover product.

Now I add to that always because, you know, the production of THC and of the rest of the cannabinoids uses a lot of boron and it uses a lot of those microelements that they're not in the tea. That, you know, they get used up and harvested, put in a bag and, you know, brought for sale. So we need to add those back in and tea environments in a big organic and in a lot of soil and a lot of turn where you've got a lot of microbial activity, you've got a lot of worm activity, you've got a lot of even...in the outdoors where you've got a lot of bird activity grinding through your...they're out there hunting worms and they're providing fertilizer and guano as they go. So, you know...and stirring things up and moving microbes from your neighbor's garden to your garden. You know, that whole transitional world, you know, we're not doing much in our little sterile environments. So we have to add back in what we can.

Matthew: Now, I wanna circle back to when you were talking about your stack growing or your vertical growing. Is that something you started with right away or did you get comfortable with, you know, just one level and then you're like, "Hey, let's stack this because we've kind of understand how to grow now?" Or did you start right away with the stacks growing?

Kurtis: My smaller grows and my grows that I don't talk about were all on the flat and simple and an easier life. And when I went into an environment where I was tapped for space and wanted to get as much production out of the small space that I had, I just looked at going vertical as the solution and just built that out and started it. You know, there's a larger learning curve in getting air to move properly throughout a grow and getting, you know, getting plants to be happy in, you know, confined spaces. But a lot of growers have got decades of three by six by six closet experience and they might be better in those confined spaces than they are out in a big open canopy of grow so...

So we just went...we went stacked because we knew as our financial base business partners that we needed to be pound per square foot a leader in what we're doing and, you know, more square foot of grow in smaller square foot of building. Vertical is the way to do it. It's a pain harvesting on the third level and it's not, you know...and then when you get a problem with an emitter, it's not ideal and all that's not ideal. But, you know, we are problem solvers. You know, if we're in this industry we are problem solvers. Every grower, every cultivator, everybody I've ever met who's in this industry is a problem solver. You know, whether they have a Boy Scout badge or not, they come prepared to whatever the problem is that day. They solve it and, you know, they get the plants happy and they move ahead and that's what's great about it.

Matthew: And is there stratifications of air that...I mean there's temperature differences if you want CO2 and air movement and so forth? I mean the first...your first couple of harvest is in that situation was a little tricky. Did you have some discovery there? Some pain points at all or was it just...

Kurtis: Oh, 100%. Tuning...I think you need in a 60-day harvest cycle, by your third harvest cycle if you haven't got all your fans moved around and all of your dead spots resolved and all of your ducts tweaked and all of your emitters first spilled CO2, if it's tanked CO2 or through other methods for CO2 addition to a sealed room, if you haven't solved that by your 270-day mark, then you're not working hard enough on it. But first grow I just would call it tune grow and it doesn't, you know...and when I consult and help people, other people build out rooms, you know, these are most likely gonna go for extraction. We'll cap the A-grade product off the top. But we're not gonna have the kind of production we'd like to see the first run because we have to tune the space. We have to make the space fit for each individual micro space which is that individual plant and canopy and then that individual tray and those individual lights and then that...the air flow functions.

And it's amazing to me how I can walk through a grow and there's a hot spot. And it's right next to a fan. You know, like why is this spot hot? I'm like why is this spot... Ten steps down in row three in room three, there's a hot spot and I don't know why. I just know that I have to do everything in my power to keep that space cool. And, you know, canopy temperature's another interesting thing that I'm doing more and more work with which is not measuring the temperature in the room but measuring the temperature of the leaf.

Matthew: And how do you do that? I think there's some tools where you can just like shoot like a beam across and it'll tell you the temperature, right? Or how do you do it?

Kurtis: I use an, you know...we measure room temperature in like a thousand places because we have three levels and so basically every bay has a little thermometer. And those are magnet and we're on metal rocking so we move those around and we're like always...and then our main temperature and our HVAC system temperature is...we have two HVACs that have thermostats on different ends of the room. So, you know, that works through. And then I use just a laser inforometer and the key there is you gotta shield the light and then measure the temperature and then pull back because if you measure the temperature when the light's beating, you're measuring the infrared energy that's bouncing back in the green color. And so you shield it, measure it, that kind of like boom, boom. It's like...I don't know what you call it. It's like mini golf, you know. You gotta get the wind...you gotta shoot when the windmill's not covering the hole.

I don't know how is it like that but if you let it cool down it doesn't do any good. So, you know, when...you take those temperatures and look at what your leaf temperature is because you're leaf has a stoma and that stoma is a series of, you know, micro openings that control the perspiration of the plant and that control the intake of the CO2 in the plant. And if the plant's too hot, it opens the top, dumps water and closes the bottom to get more cooling space. And, you know, and if the plant's too cold it closes the top so you're not...you're just loading up on water that you've pulled all of the nutrients out of but now that's just sitting there bloating the leaf and then your bottom stoma is opening but there's not enough energy going on because you're just awashed in basically plant or road water.

You look at the water that comes out of the dehumidifiers in the rooms, you're loading so much nutrients, salt and minerals into that water and the plants take it all up, either take it to waste or take it to good, and they just evaporate clear pure water. So that evaporated water, that comes out of those plants and if you put a gallon in a plant, you're gonna get eight-tenths or eight out of ten cups that you put in to the ground come out in the air and only two of those cups are split apart by the plant and used to add hydrogen to the hydrocarbons with the carbon monoxide that's in the air to make structure. That would be stems, leaves and otherwise. And then, you know, the tetrocanamonoid [SP] groupings, you know, those hydrogens come out of the water. And the plant needs the energy and the right temperature to split that water into oxygen and into hydrogen so it can build the product.

Matthew: What kind of systems do you have in place if any for kind of power outages or redundancy there? Like if you're grow, if there's no electricity for some reason on a Sunday, you're are not there, what happens? I mean because it's so hot there in Las Vegas. What do you do?

Kurtis: We've two services that come to the building. And in Las Vegas, because we only make money when we process people pushing buttons on machines, not completely but kind of, Las Vegas in an average year if you have more than eight minutes of power out at any address, it's amazing.

Matthew: Like you say, slot machines in the gaming industry, they need that power.

Kurtis: The power system is super redundant. It's well-managed. The power outage here comes from your local transformer being struck in an auto accident 100% of the time. We don't have weather. We don't have ice storms. We don't have high winds. I mean we do have high winds but we built for it, you know, and the power company does. We have redundancy. We have extra capacity, you know. We have...so power failure here is rare, you know, rare and generally local. That said, we have a natural gas generator. And in an ideal world, we would run the natural gas generator to operate the lights, and we would run the grid to operate our A-track. And the reason for that would be the natural gas generator would be generating the power to reproduce the sun, and in that natural gas generator, we produce thousands of pounds of CO2 to simply filter and dump back into the room after it's been cooled so our plants can breathe it.

So we gain in two ways there. That's future systems for me. I don't have a natural gas generator that's running complete and 100% yet to run lights, but that would be my goal. And, eventually, you know, eventually, I'd like to be a little more off-grid just because natural gas power here is $0.80 on the dollar so, you know, you save money by being your own local power generator.

Matthew: What kind of lights are you using? Are you using traditional LED?

Kurtis: I really like the 315 ceramic metal halide. That's my current. I've got 60 of an offshore brand of LED that work well and that I like, produce really stubby short plants which is nice for a top level and don't require any...really much of any cooling. So LED, HPS and the lamp a preference for me is the ceramic metal halide. And, you know, whether it's, you know, right or wrong it seems like the Philips, the actual Philips labeled bulb is a bulb that's worth paying extra for. So but...and, you know, they run for like...they're 315 watts. They produce a really nice spectrum. And one of the things that...whenever one looks at lighting spectrum, people do or don't, but if you look at the lighting spectrum you see the nanometers and the bumps and here's where things come in, here's where things go out, here's what the plant uses.

I look at past the 800 range where the ultraviolet functions are and the ceramic metal highlights produce a nice ultraviolet spike that nobody else gets. And I think that improves the density of the product, improves the yield and improves the overall flavor and taste that those high energy photons that are coming out of that ultraviolet light in those lamps make a difference. And we get a fair amount of ultraviolet outside that we don't produce inside with a just a standard metal halide or a standard HPS or a standard LED or those...that ultraviolet side is interesting. And I've even in a test grow, you know, thrown up some tanning bulbs to increase ultraviolet in my test groups.

Matthew: That's cool. That's cool. Tell us how you manage the CO2 in your grow. I'm sure people will be interested in that. And what's the optimal level of CO2?

Kurtis: I like to see consistency most importantly in the CO2 because you train the plant to look for that amount of CO2. So fluctuations in CO2 to me are worse than, you know, worse than anything else. I use wall mounted CO2 meters that, you know, that I move around a bit, you know, as I'm tuning a room to kind of find that low spot in the room. And those wall mounted CO2 meters manage a cut point, you know, or a swing point, generally about 1,200 parts per million on the bottom and 1,350 on the top. And that parts per million of CO2 is then [inaudible 00:49:40] in to the HVAC system after the air is cooled. So the air is cooled, dehumidified and then CO2 is added back in and then it's dumped into the room and makes it cycle. And then those are driven off of...we drive those off of the light sensor as well because we're fine during the sleeping time, you know, dropping the CO2 down into the, you know,500, 600 range.

Ambient CO2 in most environments used to be about 320. It's about 410, 425 right now kind of U.S. wide. I think it's a little higher on the West Coast during the fire season. But...and that drifts across, you know. The Midwest sucks up a lot of CO2. So the East Coast has a little less CO2 content than we do here but we get the ocean CO2 and we get the fire CO2 and we get some CO2 out of China. So our ambient CO2 is a little higher here than it is on the East Coast. So we add back in.

Matthew: What about the Brix level? Can you tell us about that? What does that mean exactly?

Kurtis: Brix is a measure in general horticulture and actual real...it's a real world farming but in bulk farming, real farms. You know, people who grow vegetables, people who grow hothouse crops, they measure Brix. Brix is a measure of the sugar level, the...it's a combination of gluecoids [SP] or glucoses that are in the plant's fluids, you know, that are in the sap basically or the, you know, the fluids that come out of the plant. So whenever I'm doing any tuning of a room, I'm...when I'm doing, you know, trimming and cutting back, I will press out that basic sap and the plant's fluids and you drop it onto a...it's a refractometer which is something that measures the speed of light through a medium.

So the light comes in through the top. It's diffused. It goes through the layer of plant fluid or through the sap, and then it goes through a prism. And the speed of the light through that sugar makes you basically a shadow line on a scale. And the top of the shadow line, if it's real crisp, tells you that your calcium level in that sugar is up where you need it to be. If that top line is real fuzzy, you're low on Boron and you're low on calcium. And then that line, the shadow line from below gives you the amount of sugars that you have. So the greater your sugars, the higher your shadow is on your scale. And the nice thing about Brix is it's almost an immediate measure of the plant's uptake. So Brix changes throughout the day. It changes throughout the watering cycle and consistency in time of measurement, you know.

If you always measure Brix an hour after the lights' turned on, if you watered when the lights' shut off at night or you wanna...you don't wanna be just gathering numbers because those numbers are on a cyclic scale as a plant breathes, operates, grows and loads sugar into...loads the sugars and then loads the carbon up into the buds. So you measure Brix as a standard ideal plant level for me in cannabis with no effort and just randomly growing away thinking I'm doing a great job, looking at overly watered fat, poorly...beautiful plants but poor producers will be about eight. And if I can really work hard, I can get Brix to about 12 and that's some in dehydration, you know, making sure that I keep that leaf as dry as possible so that it isn't loaded with water that's doing it no good that it can't use to grow.

You know, once the water is done it's gotta get out, so I need to keep that room dehumidified so I can get the water out of the plant so it can get new water with new energy in it. So that's where Brix is and there's a whole ton of new work on soluble and, you know, the humid elements that go into the soil and into Boron levels that help you with a Brix meter. And, you know, that...there's a whole, you know, building your nutrient base for a Brix level and building your lighting schedules for a Brix level is really building your grow for a really solid production on a per square foot and on a per kilowatt basis. And those are the keys. To get production up, I mean it's...you know. And it's also Brix is also flavor. You know, when you have plants that are too dry but don't have enough sugar and that don't make enough Brix, they're gonna have that kind of hay smell as you go through. I don't know if you've experienced that in any of the grows that you've been through or...but, you know, as things are starting to dry you kind of get that hay type smell.

And that's, you know, that's not enough going on in the sugar inside the plant. So that once you've cut it and are working to cure it, it's gotta have that left over sugar and that left over Boron and that, you know, that comes from the plant storage and getting that, you know, getting everything going on in the [inaudible 00:56:04], the root zone basically, getting all that stuff to work properly so that it gets up in and gets in. So measuring Brix, lots of people...like I'll do a lamp and I'll just measure the Brix every day at a given time and I'll use that little lamp as a test. I'll keep adjusting what's going on, what's going on, what's going on. And I just look at the Brix level and when I see it that I've got a consistent improvement on the Brix level then I apply that to all the other lamps that are like that lamp within the grow.

And that's where you do some adjustment and, you know, the higher levels are drier and hotter and, you know, see if you adjust accordingly in what you're trying to get out.

Matthew: Okay. So for people that are interested in learning more about that, Brix is spelled B-R-I-X.

Kurtis: B-R-I-X.

Matthew: Okay. You know, I'd like to switch to some personal development questions, Kurtis, if you're up for it.

Kurtis: Ssure.

Matthew: I'd like our listeners to get a sense of who you are personally. With that, is there a book that has had a big impact on your life or way of thinking that you'd like to share with listeners? Doesn't have to do with cannabis or growing or anything, just anything that you've enjoyed.

Kurtis: I read about a book a week, and so it's really hard for me to say like, ''Oh, I just, love, love, love this.'' I would read and I do as a performing art, Andy Weir's "The Egg." Andy Weir's the man who wrote "The Martian" which was a great book and a pretty solid movie for those of us who like spacey stuff. But "The Egg" is a little bit of a touchy-feely guide to, you know, what's it all about. It's short and, you know, I can do it as a seven or eight-minute performance art piece. "The Hitchhiker's Guide to the Galaxy" I think is an important look at humanity and how we all work together and how to...and that's Douglas Adams, of course.

Mathew: I've never heard of it. Never read it.

Kurtis: Okay. "Hitchhiker's Guide to The Galaxy," it's great reading. I like "Stranger in a Strange Land." That's Robert Heinlein. I'm a little on the science fiction-y, kind of geeky goofball side. But, you know, that's good and I wear it well. It goes with my armor and glasses, no tape. And then Viktor Frankl's "Man's Search for Meaning," I think is required reading.

Matthew: Yes that's the gentleman that was in the concentration camp. Is that him?

Kurtis: Yeah, yeah, Viktor Frankl. Was a psychology student who tucked his Ph.D. dissertation into his underwear as he marched into the train and survived Auschwitz and has written extensively on his... But "Man's Search for Meaning" it's just, you know, it's heartbreaking. It's beautiful. You know, it's hard and it's good.

Matthew: How did...he kinda had like a mental framework on how he looked at things that helped him get through it? Is that what the gist of it is?

Kurtis: Yeah. The little story I tell from that and that I share with people when I try to, you know, talk to people about it, he...you know, everything in his life is lost. He's seen his family destroyed. He's seen, you know...for no cause other than, you know, the color of his skin and the heritage of his family and I think some of that fits in today's culture sadly. But he lost everything and he's a decently healthy slave labor, going out of the camp every day as a slave labor with very little food and little clothing, etc. The gentleman in the bunk next to him is praying, thanking God for, you know, for...you know, just saying his prayers.

And he hits the guy, Victor Frankl hits the guy and says, "What can you be thankful for? Every single thing in our life has been destroyed just because we're Jewish. Every single thing in our life has been taken from us. Every single thing that matters to us is gone and we're slaves to these pigs." And the guy calmly turns over and says, "I am thankful I'm not one of the guards."

Matthew: Bad karma forever. That's a bad cycle.

Kurtis: "I can live this or I can die here and I am a good person, and they cannot." And that for me is what "Man's Search for Meaning" is about. I am a good person and I will do my best to do good.

Matthew: That's crazy. That's a good story. I went to a concentration camp this year in the Czech Republic visit [inaudible 01:01:50]. It's amazing to see how the whole thing operated and also what a mind game the Nazis were playing all the time to not only was it physically torturous and emotionally, but they're always using these psychological tactics to convince the Jews that if they worked harder, you know, that would give them freedom, mental freedom or actually somehow physical freedom some point in the future just to get them to work more. And they had a German all around the camp, you know, work will make you free. It's just craziness. It's excellent thing to do [inaudible 01:02:30] an interest to go see one. It's definitely worth it, although heartbreaking. But I'm glad you shared that little excerpt from the book.

Kurtis: Well, history does...I heard this the other day. History doesn't repeat itself, it does rhyme.

Matthew: Definitely.

Kurtis: It does rhyme so, you know, we need to work to be good and to, you know, and to share the blessings we have. And that's, you know...those are kind of the three, you know. I'm reading Dr. Waggle's "Fantastic Laboratory" about typhus and this is...that's also based during the concentration camp era in Poland. And, you know, and that's, you know...the Polish world pre-Nazi world was really an incredible thing. I don't know if you knew much in Poland when you've been there in Europe but, you know, I'm just...I'm like driven to see some of these places and spend some more time to there.

Matthew: Kurtis, is there a tool web-based or otherwise that you consider valuable to your productivity?

Kurtis: I write a list before I go to bed.

Matthew: The things you need to do the next day?

Kurtis: Sometimes it's just the things I'm thankful for or sometimes it's the things I wanna get done. Sometimes it's stuff I know I'm gonna forget when I get up. And those are kind of random in a way but I just...I try to memorialize and I take a sheet of scrap paper that came out of the printer, I fold it in half so I just got the narrow but tall, like envelope-sized kind of like a folded piece of paper in half. And I put the date on the top. I date every single...if I write on something I put the date on it. I'm always frustrated to find a note and not know when it came from or where, and I'm not as organized as...anybody who knows me would tell you easily I'm super disorganized.

But so I write a list and then, you know, I write that list and I get my glass of water and I go up and read. And in the morning that list is on the counter and, you know, I start there. I've also pretty much deleted social media, you know. I'm a little more of a Kora [SP] fan than I used to be now that I'm out of the rest of social media. But, you know, I was told [inaudible 01:05:10].

Matthew: Good suggestion to get rid of social media. There's a big distraction. Now if there's any, you know, companies, dispensaries or anybody in Vegas that is looking for, you know, your extracts or they're looking for flowers or anything, how can they get a hold of you? What do you provide or how can people connect with you?

Kurtis: We're a wholesaler and my business partners manage everything beyond just, you know...I manage the growing side. They manage the selling side. So, you know, I focus on growth and innovation and then I also work, because I'm a small part of this grow, I work as a consultant to help other grows get started and rolling and to help other people solve their problems. And so, you know, I have clients, you know, up in the triangle. I have some clients in California. I have some clients here and some clients in Arizona and I have a client in Wyoming. So that consulting work that I do is more of my, you know...this 5,000 feet is...and my own personal grows are more testing and gathering information and improving upon things and, you know, production as well.

But my true goal is to spend more time in broadening the skill set that I seem to have collected in how to build an efficient, low labor cost, high production cost... Our wholesale cost in getting a pound out the door including profit, overhead and everything is $360. And so I look at being able to...other people are spending close to a $1000 in an indoor grow, high labor costs, high energy costs, high waste costs. Sharing that ability to save...penny saved, penny earned and that comes more to...what I desire to do more of in the future and...versus just plant husbandry. So I would say just, you know, anybody can call me on my direct cell which is 702-480-7676. And like I welcome a call. And if somebody wants to share my number with a troll or a prankster, love it, you know. I enjoy new perspectives. That's not an invitation but, you know...but no, I mean call me.

I don't always answer, but I always get the message. You know, and I'm looking to grow other people's businesses and have a little more...you know, one of the challenges in running a grow is it is a 7 day a week, 24 hour a day job. And, you know, you have good people you work with and you work together with good people and that's great. But you also...I also desire a little more travel and a little bit more interest than just maximizing what I'm doing. I wanna help other people maximize as well. And I have an email too that's really simple. It's kurtis, K-U-R-T-I-S, wj@gmail.com. And those are my two best contacts, you know. Shoot me a line, let me know how I can help or, you know, if you have a question about some crazy thing I've talked about or need a reading list, you know, I'm good at that stuff.

Matthew: All right. Well, Kurtis, thanks so much for coming on the show today. We really geeked out here for a long time and I appreciate all the details and nuances of everything you shared with us. And I know there's a lot of people out there that did as well that you really helped. So thank you for that and good luck with everything you have going on in Vegas and everywhere else.

Kurtis: No, thank you, Matt. And one of the things I really have to say is how much I love your podcast. And I love the variety of people that...I mean one of the things that's really great for me in listening to what...and I found you, I don't know, two and a half years ago or so maybe. And I don't listen to every single one but I really do...I love the fact that you express variety in our industry. There's a lot I've learned from listening to people that have come through, you know. And I was listening to somebody, I don't remember who it was, and they were talking about Fuller feeding. And I went through a big test on Fuller feeding for the next, you know... My workmates are like "Oh, [inaudible 01:09:51]?"

Matthew: I was gonna delete out that one thing when you said you don't listen to every episode. I'm just kidding. [Crosstalk 01:10:01].

Kurtis: And it's only because I got those 12 hours a day I gotta work.

Matthew: I appreciate that. I really appreciate you saying that, and I do try to get a variety so that is good to hear that feedback. So thank you and good luck to you, Kurtis, and thanks again.

Kurtis: Hey, thank you, Matt. Have a great day.

Chicago Dispensary Owner Tells How to Operate in a Market with Headwinds

Neal McQueeney Midway Dispensary

Neal McQueeney is co-owner and operator of Midway Dispensary in Chicago. Listen in as he describes what is like to operate in a market where politicians throw a lot of obstacles in his path. Discover how he adapts and overcomes to build his business.

Key Takeaways:
[1:18] – Neal’s background
[2:14] – Illinois cannabis laws
[5:59] – Neal talks about the products at Midway Dispensary
[6:50] – Pitching new products to a dispensary owner
[7:59] – Neal talks about the patient flow
[10:09] – Is the fingerprinting requirement scaring patients off
[12:08] – How much product can a patient purchase at one time
[13:26] – IL Patient purchasing restrictions
[16:07] – Neal talks about the reality of running a dispensary
[18:21] – Neal talks about marketing his dispensary
[25:22] – Neal talks about what he would do differently
[28:11] – Neal answers some personal development questions.

Learn more at:
https://midwaydispensary.com/

 

Important:

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

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