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Ep 371 – Big Business and Cannabis Culture Need Each Other, Industry Leader Andrew DeAngelo Explains Why
Can cannabis culture and big business co-exist? Here to help us answer that is Andrew DeAngelo, co-founder of Harborside and Last Prisoner Project.
Learn more at https://andrewdeangelo.com
Visit Last Prisoner Project: https://www.lastprisonerproject.org
[1:32] A look back at Andrew’s 38 years in cannabis and where he sees the industry heading
[7:45] Why corporate cannabis and legacy cannabis need each other and what it will take to build a productive relationship
[23:47] Issues with bad public policy and “NIMBYism” at the local level in cannabis-legal states
[30:04] Andrew’s work with Last Prisoner Project, a nonprofit leading the charge in cannabis criminal justice reform
Matthew Kind: Hi. I'm Matthew Kind. Every Monday I look for a fresh new episode where I'll take you behind the scenes and interview the insiders that are shaping the rapidly evolving cannabis industry. Learn more at cannainsider.com. That's cannainsider.com. Now, here's your program.
Sinead Green: Can cannabis culture and big business coexist? Here to help us answer that is renowned cannabis pioneer and activist, Andrew DeAngelo. In his almost 40 years working the front lines of cannabis legalization, Andrew not only co-founded Oakland Dispensary Harborside with his brother Steve DeAngelo, but he was also instrumental in helping legalize cannabis in California and recently co-founded the Last Prisoners Project, a nonprofit dedicated to cannabis criminal justice reform. Andrew, thank you so much for joining us.
Andrew: Well, thank you for having me on the CannaInsider.
Sinead: Yes, it's so great to have you here and we're so pumped to hear about all the cool stuff you're doing right now and just your history in cannabis. So much to unpack today. First off, Andrew, before we jump in, can you give us a sense of geography, where are you joining us from?
Andrew: I'm in my home office and studio here in Oakland, California. This is where Harborside started and where Harborside is still based. I have a lovely home and studio here in the Oakland Hills.
Sinead: Oh, nice. Very cool. Well, Andrew, most people know who you are, most of our listeners are probably fully familiar with you, but maybe aren't aware of your background or how you got started in cannabis. Can you give us a little history there?
Andrew: Sure. I'd love to. It's one of my favorite stories to tell. Well, you mentioned my older brother, Steve DeAngelo, and Steve is about almost 10 years older than me. He was my introduction to cannabis and like many younger brothers, I wanted to grow up to be like my older brother. He introduced me to cannabis at the appropriate time when I was in high school, when the moment was right, and I fell in love with the plant just as he did, and pretty much decided right away to work with the plant. This is in 1980.
You either have to trade-- If you wanted to consume good cannabis or have access to good cannabis, which I did [laughs] want to do all those things and still want to do all those things, and those of us who love cannabis and love consuming cannabis, we always want the best cannabis available and we're always on the hunt for the best cannabis available. It didn't matter if the market was legal or not and in those days it wasn't. So I traded cannabis. You either traded cannabis to have access to good cannabis or you grew cannabis.
I didn't have a very good green thumb nor did I have the infrastructure, the safe place to grow. So we were traders. My brother was a trader, my older brother was a trader. I started trading cannabis and that's how I started my career, and things grew quickly. [laughs]
We didn't like being underground. The lifestyle of looking over your shoulder all the time was really hard on us and we didn't like hiding what we were doing. We wanted to be proud of what we're doing. We were activists. We wanted to change the law and come out of the shadows. Of course, we didn't know how all that was going to go down, but we did not know that we wanted to do that.
We worked hard on activism and we were part of the effort in California in 1996 to legalize medical. We took that same strategy to our hometown of Washington, DC and legalized medical there 1998. Then the City of Washington, DC, basically the law we passed, we worked so hard to pass, was nullified by the federal government which has jurisdiction over Washington, DC. That made us mad and we decided to come to California where shortly thereafter, we started Harborside and we were able to finally make her dream come true of being able to trade cannabis in an open and legal way.
Note, those early days, the medical days, the golden age so far I would say of legal cannabis, we served a lot of patients and we served our community, and we were able to do a lot of pioneering to make the industry scalable. I'm proud of that and now I've left Harborside a few years ago and started Last Prisoner Project, which is nonprofit, which I think we'll talk about a little bit, which is my nonprofit that my brother and I co-founded which gets cannabis prisoners out of prison until every single one is out. That's our mission.
I'm also a consultant. That's how I keep the lights on around here and I also try my best to donate some of my time and also charge much lower rates for my advisory work for people of color and social equity folks, and legacy people like me.
As you mentioned in the intro, bringing legacy cannabis and big business, and big cannabis and corporate cannabis together is another mission of mine right now, one of my current, present missions and visions I have to create an industry that's really never been created before, that's very inclusive, that has small, medium, and large players that work together, that cooperatition and that we have super diverse ownership, much more diverse than any other industry is my vision.
We're so far away from achieving that, I'm afraid to say, and it's a real bummer what's happening in our industry with respect to diversity, particularly, ownership. There's a lot of activism, there's a lot of work. I'm one of many, many people working on this and I do believe that some of the bigger companies also want to help and figure out ways to build bridges and we have an opportunity right now to build this bridge.
Right now is the opportunity and the first thing they have to do is point out the elephant in the room and start talking about it, and saying, "Hey, it's not going well at the moment. Let's apply our moral compass and start walking in the right direction." Let's see if we can do it. I'm hopeful.
Sinead: Yes, absolutely. Yes, I know you mentioned that at MJ Biz, you just had a panel discussion about this and I really want to unpack it because it was such an interesting conversation about capitalism and big business versus cannabis culture. There is like you said this huge friction between the two that's just coming to a head. You've had your foot in both camps, what do you think it will take to build a productive relationship there?
Andrew: Well, I think there's quite a few steps we can take. First, public policy. If we could work together-- The bad public policy is hurting both the stoners and the suits. If we could straighten that out so that we could work together because right now, people are building little moats around their businesses because they got a little chunk of market share and they're lobbying against change, and they're fragmenting the activist community to improve these frameworks. The mainstream political parties are taking advantage of that and frankly, not behaving the way we would like.
It's an imperative moment where we have to get the public policy right and we have to-- That's an opportunity for both groups to work together. We're not going to win all the battles that we want on either side when we start talking about how to work on good public policy together. Right now we're oftentimes working against each other in creating these frameworks. You've seen homegrown. Homegrown is a great example. Homegrown is critical for a healthy legal cannabis ecosystem.
You have to be able to grow your own in your backyard or wherever, on your balcony, wherever that you can grow it. That has to be part of it. It also has to be legal to trade cannabis freely for other goods and services. Not to sell it because then you need a license to do that. But if your friend is a plumber and you have a plumbing problem in your home and you have a quarter ounce of weed you can trade for that plumber, our community has done that a lot and that's how working class people have survived with cannabis oftentimes. I did that kind of trading a lot.
That's critical. We've seen people, big companies and even small/medium companies in these weed trade associations come out against homegrown and that scenario that should be really easy bridge to build. Let's all lobby together for homegrown and for trade, non-monetary trade of cannabis. That would just be a layup.
And then the more complex parts of how do we make sure capitalism doesn’t just steamroller over these communities that don’t have access to the capital part of the ism? If you don’t have access to the capital, you're not going to get an ism in your business. You're just not going to get it. It's critical that we somehow level the playing field within public policy. I don’t know all the solutions of that. Certainly licensing this part of it but also funding and skill training.
I also think that we got to really look at tax policy. That’s a place where both groups, the suits and the stoners are getting crushed. That’s the area that should also be a layup. Neither the stoners or the suits like to get taxed too much. We want to pay our fair share, but these tax rates that you're seeing all over the country are just ridiculously high. What they're talking about at the federal level is just not going to work. You're not going to be able to put a federal excise tax of 25% on weed and expect to absorb the legacy market. It's just not going to happen. Tax policy is another area I think we can collaborate on. I think that we may need to have mandates on diversity that is tied to certain licensing categories.
One thing that worked really well in California was there was a law passed that said you have to have a certain amount of women on the board of directors of any California company that's of a certain size and of course they made it giant, but I wish they would apply that law to almost all companies that have boards of directors. This is for boards of directors, not executives, and it worked. That mandate increased diversity of board of directors. That’s the kind of thing public policy can do. It's not saying you have to have three board of directors that are this particular thing, it's saying, "Hey, look, you have to meet certain diversity thresholds." I'd like to see something like that. That’s going to be harder to get it done because someone is going to sue you and they might win in court because they'll say it's not fair to everybody else. That’s where the public policy gets tricky.
The layups we need to take care of first. The stuff that's easy for us to agree on, taxes and even barriers to entry. I think there's some barriers to entry. We can lower that that everyone can agree on and that would be one way. The other way is just to convince each group with panels like we had at MJ Biz with more conversations. Maybe a whole conference that just brings these two groups together or maybe a whole gathering of some kind. Maybe it’s a one-day event. Don’t have to be a three-day event. We learn about each other and see how we can be a value to each other.
The legacy market deserves a lot of credit. Under the threat of losing freedom and having your life totally destroyed, you can get weed anywhere in the world pretty much easily and fairly affordably and the weed is not bad and in some place it's pretty good. There's a lot of skill. That’s hard to do. I learned so many things doing that that you don’t learn as a Harvard MBA. We might not have the pedigree of a Harvard MBA, but we can bring a lot to the table. I want to see more of that. I want to see more legacy folks.
I'm not on any big company's board or advisory board or no one-- None of them are engaging me right now and I could do so much for those folks. I'm the one trying to build the bridge and I still can't. That's some more cross-pollination. We on the legacy side that have managed to get legal, like Harborside, we had to hire a lot of folks from the mainstream side, the suit side, and we had to bring them in and sometimes we didn’t hire the right people and that really hurt us. Sometimes we did and it really helped us. It's time for more of that to happen on the other side and to see more legacy folks coming and being part of--
There's a lot of different ways to do that. I know Curaleaf has an incubation program and they're doing some different interesting innovative things to help folks that have been harmed the most by the war on weed. I know Ayr Wellness, the other group that was on the panel, they have a bunch of community-driven programs and expungement I believe is one of the things they do, as well as their big supporters LLP. Ayr Wellness they’ve been a supporter of LPP. There is different ways for--
Every company and every bridge that we build between someone like me in a company or someone like Swami or someone like Glad, that were also on the panel, every bridge that we build is going to be a little bit different. It's going to be constructed a little differently. It's going to have a little bit different character to it.
That’s the kind of thing I think that we can be doing together and just not be so afraid to compete in a fair way with each other. Capitalism doesn’t like to be fair because it likes the move more towards monopolism like a giant game of Monopoly, but it's just not sustainable to keep doing that in any industry. We have an opportunity to not do it from jump street in our industry, but we are doing it.
I don’t want to be too optimistic. This is going to be hard. This is going to be hard. We can easily have these two market problem and have a big legacy underground market because it just can’t be done and that's the only way our people can survive.
Then I worry about Prohibition 2.0, but hopefully we can avoid that outcome. The way we’re going to reform Prop 64, the disaster at California and gosh, I look back on-- I supported Prop 64 because I felt if we lost that, that it would embolden the federal government to come in and bust a lot of people, similar to when we lost Prop 19 in 2010. That’s what happened when we lost that. I was worried about it, but we knew it was imperfect. If I had to do all that again I probably would not have supported it because of those imperfections which are now destroying us, just destroying the California market.
I see the only way to fix it, truly, truly fix it is we have to run another ballot initiative in 2024 because this was the year to fix it. It was this year. We have Governor Newsom, a Democrat that was under a recall election. We have a super majority of Democrats in the legislature in Sacramento. They were under a lot of pressure with the recall election and we weren't able to get anything except those two bills. The Trailer Bill's just meaningless. The Hemp Bill, yes it's an incremental step in the right direction, but we could've gotten so much more. We didn't get anything on taxes. We didn't get anything on barriers to entry. We actually got a rise in taxes. The tax went up during the term of the legislation.
There was a little bit of money allocated to get people from temporary licensing to permanent licensing because they've just had such a backlog of getting that done, but most of that money is just going to go to higher bureaucrats to process applications [chuckles] and collect fees for doing that. Pretty big fees, I might add.
These are not $500 fees like when you go to register your auto mechanic business or whatever, this is $50,000, $100,000, $75,000. We didn't get any meaningful reform on that. We didn't get any meaningful reform on all this packaging we have to do. That is just an ecological disaster.
We didn't get any meaningful reform on so many things, on local control. The local people are still banning dispensaries in 60% of the state. Most of those places voted for Prop 64. The legislature's not taking action on that. We have to run an initiative. That's going to take, I don't know, $20 or $25 million. I wanted to run one in 2020 when I was still with Harborside and I was up there in Sacramento working on this. I got so fed up after that legislative session that I decided to resign and let other leaders have a shot at it. Unfortunately, they haven't been able to do much better than I was able to do when I was up there.
In any case, that's how I think you fix 64 truly and meaningfully and in our way, to protect our community and to implement all the lessons we've learned. Even then, it's going to be hard. It's going to be enormously hard. The legacy market, the underground market in California is so entrenched, and pissed off, and motivated [chuckles] right now that I don't know if we can ever get them back even with another initiative. I worry.
The initiative, the only way we get that done is if corporate cannabis, again, helps. They could write the check for $25 million. Any one of these companies could write that check tomorrow and then you've got something going on that's a nice bridge that we build between these communities to fix 64. Yes, man, they're going to have to give up some market share to the legacy folks in that new initiative. Yes, we're going to have to give up some market share to the big companies. That's how this works, but if we want meaningful reform here in California, that's how it's going to happen. I'm just hopeful that what goes down in New York is so successful that it puts a lot of pressure on California.
Sinead: Absolutely. You mentioned a second ago issues at the local level, people that voted for 64, but now are working against dispensaries in their own backyard. I've seen actually you've written about this and you've used the term nimbyism, which is obviously the not in my backyard crew. What are your thoughts on that and California, and really, across the country right now in states where it's legal and people are still working against it in their own individual communities?
Andrew: Whenever you're working politics at the local level, which we are now doing-- We're not that good at it, frankly, yet because it's a whole different sport. [laughs] It's like going from basketball to lacrosse or ice skating. At the local level, for anything that's even remotely controversial, and almost anything these days can be very controversial, [laughs] something like, "Would you like to have a cannabis dispensary in your neighborhood?" Folks that don't want that in that neighborhood, even if there's just a couple of them--
It's usually not that many folks. Most people are like, "Yes. California, I smoke weed too. Go ahead," but there's a few folks that really take offense to it for one reason or another, or they're fearful of it, or have been brainwashed by the reefer madness propaganda and so forth. They come out at the local level and they make a lot of noise. They make a lot of noise. They get the neighborhood groups and they start organizing, and then they start sharing all the worst news stories from the cannabis that happens with people blowing up houses when they're making their own dabs and all this stuff that happens out there in the world when you have prohibition.
Then they whip up more people in the local community.
I've been run out of town. I was run out of Boston, I was run out of Chicago trying to bring Harborsides to these areas. The local people would just come out and go crazy. They would scare the politicians and then you had to get the license. You had to get the local people to agree to give you a license. Without that, you've got nothing in the legal market. It's a real problem. It's where legalization collides with reality. [laughs] It's like reality bites for legalizations at the local level.
What we have to do is we have to outnumber them. If we show up and there's three times as many of us as there are of the nimbies-- I call them the nimbies, I say that affectionately. Even though it is probably a derogatory term, but I love them. I want them to find the truth in their heart. [laughs] We just have to somehow get them there, but if we outnumber the nimbies, then the politicians are like, "There's three times as many of the weed heads as there are the nimbies. I guess it's a new day. All right. Weed wins." Then that's it.
That's what we have to do at the local level. It's just really hard to do because we're operating at the state level with so much energy right now in so many places just to get the state to do things right. It's also hard to fund because who funds it? Local activists? Well, they don't have any money. Local businesses? Well, sometimes they don't have any money. There's a chicken and egg problem of how does the funding--
You need a certain amount of funding at the local level to get the people out to outnumber the nimbies, but in order to get that funding, you need a legalization framework in the city to be approved that the nimbies are speaking out against in the first place. There's a real chicken and egg problem that also hurts us at the local level.
Again, if we had more coordination between activism and capitalism, we could fund it because we would have to give up some of the space to the bigger companies that were funding it, but we could also get them to agree to give up space for us.
Then we could outnumber the nimbies pretty easily by just having enough funding to just let people know to come out. It's really just letting people know to come out. People care about coming out for weed in their local community if you just let them know what, where, when and why, [laughs] and how. That's how we win at the local level. It's a big challenge for us. It really is.
Sinead: Definitely. Definitely a vicious circle there but one that, like you said, I think can be broken. It's going to take quite a lot of effort, but I'm feeling optimistic about it, especially with people like you on the frontline there doing so much.
Andrew, I want to turn into some personal development questions here in a second, but before we get to that, I really want to talk to you about Last Prisoner project. We've mentioned it a few times throughout the interview here, but I'd love to really dive into that and hear about your efforts there, the kind of work you're doing right now. Can you fill us in on Last Prisoner project?
Andrew: Absolutely. Last Prisoner project is a nonprofit organization, was started a couple of years ago now. It was really four years ago, but it took a year and a half to get non-profit status and to put the leadership team together, to put it all together.
We get people out of prison, cannabis people out of prison. That's what we do. We also have re-entry programs, so folks can have some support once they leave prison and reenter into society. We hope to have more educational and job placement programs in the industry. Those projects require a lot of funding and not all of that funding is coming in yet.
We support expungement efforts, but we don't actually do expungement. We try to give a voice to the prisoners, both that are inside still, and those that are outside so that we got now. A couple of our prisoners appeared with us in Las Vegas and Michael Thompson, Richard Delisi, are two that were there. Also Dante West was there. Evelyn La Chapelle was there. There were a couple others there.
They're all amazing people and they're now out of prison, thanks to Last Prisoner project and other groups that work on this. It's a village that needs to mobilize to get this kind of work done. They were in Vegas and there was a big fundraiser with the Blues Brothers and we got to bring them out on stage and couple of them got to speak and talk, share their experiences.
We try to give a voice to these folks and amplify what they're doing. I know that some of them are trying to get into the industry and they have brands that they're working on. They don't do that work with us, they do that work separate from us, but I know that they're doing that work and it's exciting. It's exciting to see. It's very, very rewarding work.
When you get somebody like Michael Thompson, who was locked up for, I don't know, 30-some years, just a huge amount of time. Richard Delisi, I think, again, 30-ish hears, it might've been a little bit less, a little bit more for those guys. It was right around 30 years. To help get those folks out and to be friends with them and to help them and to see them thrive in their post-prison life is so gratifying and I'm grateful that Last Prisoner project is all of our partners and funders and large companies that fund us like Ascend Wellness, and small companies that help us, like Cosmic out here in California, and everyone in between, and all of our individual donors.
I'm so grateful to that community for making it possible for us to have a great team of leaders and go about this work. The wheels of justice turn so slowly, and so it's frustrating oftentimes. Almost every day, I'm frustrated, but when you do have success here and there, it keeps you going for all the other days that are more frustrating.
Sinead: Definitely. I was looking at the website at all your various success stories, even just over the past year. I couldn't believe how many people were put away for life for nonviolent cannabis offenses. It's just mind-boggling to me that that was ever even a thing. But I love what you guys have done there and the work that you continue to do. I just really appreciate hearing the case stories there.
That's amazing. Well, Andrew, I want to pivot into some fun questions to wrap up the show. These are not so much cannabis-specific, but more just about you and the man behind the curtain. First off, Andrew, are there any books that have had a big impact on your life or way of thinking that you could share with listeners?
Andrew: Oh, wow. So many. Well, the most recent one that I'm reading is a book called, well, I've already read it, but it's called Breath by James Nestor, and it's about breathing and breathing right and how that can actually add, not just years, but decades to your life if you learn how to breathe properly, which we don't in Western society.
I'm also reading a book, I'm a writer, I do a lot writing, as you mentioned, and so I'm reading a book called On Writing Well, by William Zinsser, which is a famous book about how to write nonfiction. I'm still putting in my 10,000 hours as a writer. There's a couple books that had a big impact on me that are not so much self-help books or business books.
Stranger In A Strange Land by Robert Heinlein, which is a science fiction book had a big impact on me. It really tells a science fiction story that articulates the value, psychedelic values, how we call them, or counter-culture values in this great story. That book had a big impact on me.
Then a lot of the typical books you hear about that have been influenced by, like Good to Grade and Creativity Incorporated, and all these business Bibles. The hard thing about hard things, that's another great book. That's all about how to have hard conversations and make hard decisions in the world of business. A lot of those books had big impact on me. I also come from the theater, so I love Shakespeare and even more modern writers like Sam Shepard and Tony Kushner had a big influence on me.
Sinead: Awesome. Well, thank you so much. That's a great list all around. Andrew, obviously we didn't get to touch on it too much, but for listeners that aren't aware, you have quite a decorated history in theater and you're in a lot of movies as well. This is a hard question and I understand if you need to take a few seconds to answer, but what would you say are three of your favorite movies?
Andrew: Wow. Well, let's see. I love The Godfather movie, the first one. That's one of my favorite movies. Malcolm X by Spike Lee, and Do the right thing by Spike Lee. Both of those movies had a big impact on me because I was coming up as a young actor when those movies came out. They had a big impact on me, especially Do the right thing, but Malcolm X did too.
David Lynch was a filmmaker that was also making some interesting stuff, like Fire Walk With Me and the whole TV show he had. He was a big deal then. I also like The Grass Is Greener by Fab 5 Freddy, which is the best cannabis prohibition history documentary that I think has ever been made. It really tells the story of why weed was made illegal in the first place, and does it through the lens of music, which is really cool.
Of all the movies on that list, I would say that the most important one for everyone that watches Grass Is Greener, because that really educates you in 90 minutes, you get the whole rundown of what went down with cannabis prohibition. It's a really well-done piece.
Sinead: That's great. Actually, I've been meaning to watch that for so long now. I'm going to have to watch that soon now that you've mentioned it. That sounds so good. Andrew, wrapping up here, how would you say listeners could get connected with you either if they're interested in helping out with the Last Prisoner Project or if they want to consult with you? How can they get in touch with you?
Andrew: Oh, yes, of course. Well, thank you for asking. lastprisonerproject.org is the website. That's the very best way to learn all about the different ways you can help us get active. If you work for a cannabis company, you're a cannabis company, help our programs to collaborate and raise money together. We have programs that allow companies to not have to give us money upfront, but give us money as things go, as products sell and we get a portion of the proceeds. A couple of other programs we have also so people can learn about Last Prisoner Project there.
For me, I'm andrewdangelo.com or firstname.lastname@example.org is my email. You can get ahold of me through my website and learn all about me there too and what I do as a consultant. Those are the best ways to get a hold of me right now.
Sinead: All right. Well, thank you so much again, Andrew, for this conversation. It's been such a fascinating interview. I really appreciate you coming on the show. Really look forward to seeing what you do over the next few years. Just thank you so much again. This has been great.
Andrew: Well, thank you for having me. It's been really fun.
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[00:43:20] [END OF AUDIO]
As the push for recreational cannabis picks up steam in southern states, one company is working hard to make sure brands are primed and ready to get out on top. Here to tell us more is Brittany Phillips of Shake Brands.
Learn more at https://www.shakecolab.com
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[1:24] An inside look at Shake Brands, a southern-based cannabis branding and product development company
[3:07] Brittany’s background in design and what led her to enter the cannabis space
[8:40] How Shake Brands is different from other full-service groups
[13:56] The biggest pain points for cannabis startups right now and how to navigate them
[17:39] How to develop a strong visual identity despite restrictions on language and advertising
[19:27] How federal legalization will impact cannabis branding
[20:53] Shake Brands’ new Arkansas-based CBD and wellness company, CBD & Me
[26:56] Trending cannabis products in AR and other southern states right now
[28:32] AR’s recreational cannabis legalization timeline
Matthew Kind: Hi, I'm Matthew Kind. Every Monday, look for a fresh new episode where I'll take you behind the scenes and interview the insiders that are shaping the rapidly-evolving cannabis industry. Learn more at cannainsider.com. That's C-A-N-N-A insider dot com. Now, here's your program.
Sinead Green: As the push for recreational cannabis picks up steam in Arkansas, one company is working hard to make sure brands are primed and ready to get out on top. Here to tell us more is Brittany Phillips of Shake Collaboration. Brittany, thank you so much for joining us today.
Brittany Phillips: Thanks, Sinead, for having me. I appreciate it.
Sinead: It's such a pleasure to have you here, and I'm just so stoke to hear all the cool stuff you're doing over at Shake Colab. Brittany, before we jump into the company. Can you give us a sense of geography where you're joining us from today?
Brittany: You bet. Today, I'm at home that I share with my wife and children in Sunny Fayetteville, Arkansas. For those who aren't familiar, that is nestled in the Boston Mountain ecoregion here in the southern most city of the Northwest Arkansas corridor. We're steps from the University of Arkansas, and nestled up here in the hills.
Sinead: Such a beautiful area. That's awesome. Brittany, getting into the company here, for our listeners that aren't familiar with Shake Colab, could you tell us what the company on a high level? Just like a snapshot overview of the company.
Brittany: Yes, you bet. On the highest level, we are Shake Brands. Underneath that we have Shake Collaboration and Shake Extractions. On a high level, we're a cannabis branding company. We have a focus on licensing, on product development, and product manufacturing. I guess that really means we design cannabis brands, including our own. We set them up to license, the trademark rights nationwide. On the other side of that, we develop and manufacture our own USDA organic hemp products, and we distribute those at wholesale and retail level in the US.
On the Shake Extraction side, we have just received Arkansas's first medical marijuana processing license. We're underway on beginning to look at R&D on that side, and discovering what products we're going to bring to life on the cannabis side. Focusing mostly in the wellness and the beauty sides of product development that will be for sale into Arkansas dispensaries in the near future. That's a long answer, but it does break it down.
Sinead: You guys do so much. It's a full-service company, and I'm so excited to unpack all the different things you do for brands. First of, before we really take a deep dive into the company, Brittany, tell us a little bit about your background and what led you to enter the cannabis space.
Brittany: You bet. Thanks for asking. I came up in the creative department of ad agencies, both regional and later on global. We're in Walmart country, right? There's a big emphasis in creative work around here in the sharper marketing sector. Those jobs are more available in this area for creative professional. As much as I appreciated that exposure to the big brands and it was totally valuable, I knew I was more passionate about building them from the ground up, and even more so the relationships that form between client and creative. I think that's really important, and you lose that in a bigger agency setting because there's account people, and there's production people, and your facetime with the client wasn't especially coming up. It wasn't ever as much as I wanted it to be.
From there, I went to a smaller more elite design firm here in Fayetteville, and that's where I really understood how valuable that relationship is between client and creative, and where that's where the magic is made. Eventually, I went out on my own in 2010 founding Brittany Phillips Design. Here, we focus on strategic visual identity design. Logo design, some people call it, and brand building through developing that brand visual language and design support. Here over at BPD, we have a diverse client roster in cities, and municipalities, non-profits or philanthropic endeavors, but also smart-ups, and small business in lot of industries, but quite a few in tech and science. That's been my process. Now, through the journey, and I won't get too ahead, but to be in a space that's so new here is just been a whole new stage.
Sinead: Absolutely. Share a little bit about Shake's origin story, because you got started back in 2016, if I'm not mistaken. Back when Arkansas's medical marijuana legalization had just gone through. What were those early discussions like, and what were those early years like?
Brittany: Absolutely. One of my partners Julie Brents, and my other partner Tig Davoulas. When they were involved early on, even at the proposition level to get medical cannabis on the ballot here in Arkansas. Julie had been a client of mine over the years, and we had been friends and kept in touch. She had spent some time out in California working in the cannabis space with a grow there, and a dispensary, and extraction operation. She had really cut her teeth there. She's from Fayetteville and came back.
That program though had a lot of delays, and it didn't really launch until around the time of the Farm Bill was signed federally. Arkansas was unique in the sense that medical cannabis was launching side by side with the state's industrial hemp research pilot. We were fairly discouraged by some of the red tape and delaying on the cannabis coming online. We decided to begin our journey by registering trademarks, and going after our hemp processing license to get started on research and development right way.
For us, it just worked. It was more accessible, it made more sense, there weren't any local brands doing what we knew could be done here. Along with that, processing license. We were able to work directly with the authors on the hemp legislation. Especially, my partner Tig. She's an attorney. Her background is in entertainment law, and has a lot of experience with these detailed contracts. She was able to work directly with those authors of that hemp legislation, and different special interest groups, and the governor's office.
That was interesting because we got to know several key players in the space. We got to know farmers. As a result, we were the first ones to be awarded the handling license, and the first all women team a few months later to get the USDA certified processor for the hemp products in the state. From that get-go, from the beginning, we started to begin to focus our first couple of years on CBD & ME, which is our line of USDA certified organic CBD products. That's how it went at the very beginning.
Sinead: That's amazing. Something that I feel really differentiates you from other full-services groups is you offer small production runs, you play a very active role from the beginning in brand strategy and product development. Tell us a little bit about who your services can benefit most at Shake Brands, and how Shake Brands really sets itself apart from other full-service groups.
Brittany: Yes, you bet. I think we really can help people in several ways. For one thing, we really want to work directly with an idea maker, someone who is passionate about the plant. Someone who has respect and appreciation for a strong brand. I think what we can do is offer that slow start. That crawl then walk mentality. On the branding side, we can offer a little bit more of an efficient process than they would get at a big agency. I think some people could come in with more reasonable budgets, we can do a thousand run on products, for example.
I think I better just give you an example, because it's a little bit easier to digest. We started working with Panther Group about six months ago, and they've been really good to help us navigate our role in the industry and find like-minded partners to work with. One of the best projects has come out of that relationship is with a doctor out of Atlanta named Adina Leifer. She's a pelvic floor therapist, and we are helping her brand and bring to life some products around the sexual health industry, and helping her clients in that realm.
Basically, she has a whole practice in Atlanta. She sees issues that all of our clients have from young to old and needing a product. This first product we're going to bring to life is a personal moisturizer. We're actually calling it a pelvic serum. I think through that is a real good snapshot of a way of somebody with no background in products, no background in branding, we dove deep into her industry and to her practice, and what made her an expert, and from there developed the name Silk Society, and branded that. We're bringing it to life that pelvic serum as her first product offering and many more to come after that.
That one is a good example of the niche that we could offer someone. We go in, we listen very carefully to all of the expertise she has because that needs to convey into the product offering, and it really is coming to life nicely there. That's a good example of how we start with someone on the branding side and how we can help them bring their product to life without just these daunting, "We can help you, but we have to make 25,000," and it wouldn't be accessible for a lot of people who have really great ideas and really great expertise and respect for the plant, and want to bring it to life.
Then on the other side, I think, on the CBD & ME side, we can help retailers interested in carrying a USDA certified product that is handcrafted, branded, designed, made and shipped all in one USDA certified lab, by people that you can talk to. I think it's just that small scale, and those retailers they're everything to us. There's probably nothing we wouldn't do for them.
We've had retailers come to us that they want a specific product, and even if it is in competition with one of our products, we'll make it work so that it belongs to them, and it's theirs, and it's not a white label scenario at all. It's custom branding and product development on that level, but begins with that conversation and really listening deep to a client's needs, on either side of the business really.
Sinead: Wow. That's great. Actually, you mentioned Adina in your case study there. We're actually going to have her on the show in a few weeks' time, so we'll get to hear all about ABLe.
Brittany: That's awesome. I think you'll really enjoy it. She's insanely smart and good at what she does and she's been a joy to work with. The pelvic serum is going to have 1000 milligrams CBD and a lot of other really nice components that bring it together. It's a good product, and I think she's going to do really well with it.
Sinead: Awesome. Yes, definitely, listeners, look out for that show in the next few weeks. We'll have Adina on, but that's great. You were just mentioning some of the pain points for brands like Adina's that are just getting up and running. Maybe are very niche, don't have a lot of experience when it comes to branding and marketing, particularly in cannabis, where there are so many obstacles, such a huge barrier to entrance. What would you say are some of the biggest pain points for cannabis startups right now, and how do you help brands overcome those at Shake Colab?
Brittany: A few things come to mind there. Exactly like you said it. Product by product, we are navigating a patchwork of legal rules across multiple states that change by the minute, both regulators and the public alike who are largely uneducated about the plant. You run into people who-- there's a lot of experts in the industry that maybe are or are not. Obviously, just navigating that and having experience under our belts of a good amount of products that we've done that for, I think is a huge advantage.
I think finding that path to true collaboration mentality in this industry is hard. I think as women we're especially good at this, but it's tough out there to keep that going because you do see a lot of closed doors, and a lot of exclusiveness, or just money driven, the money products rise to the top just from a lack of education. Our friend Patty Roe over at Pink Sesh is so great. She had a nice little talk with us the other day, and her quote was, "Sometimes success in this business is simply perseverance."
It's not all that a crazy new idea, but it was so important to hear it from somebody who has been in the industry for so long, and somebody we look up to from a brand perspective and a person. I think that that's another pain point. Just that I think it's our duty to live that collaboration mentality, that we're here to work together. I think that that is another way we bring something new and good to the industry.
I guess going back to all the pro, we've run into a lot of people who's tried to steer our business one way or the other. It's super attractive at the beginning to listen to different people who want to guide you because they're so experienced, but the more we do it, the more we realize we've got to do this on our own. That's been nice experience to come into. I think if we're going to give other topics that we're going to be committed to, we need to be mentoring interns and young people. We've had a couple interns out of the UofA law school that have worked under Tig, particularly, that have helped us a ton, and they've learned, and we've learned a lot by paying it forward.
At the beginning, I think getting involved with community programs. We have a good program here called Startup Junkie that we met with, that helped us form some strategies early on, and just using it as-- On my background, Brittany Phillips Design has always been modeled on this co-working model, where you source creatives based on a project and set up a team and you tackle a project that way. It's not unlike that, in what we bring. We'll find the right combination to put on a project to make it successful.
Sinead: That's great. Brittany, I probably want to dive into the branding and marketing side of Shake Brands, because I know that's really your realm and what you bring to the table there. I wanted to get your opinion. I feel like right now in cannabis with all the restrictions on language and advertising, it's really hard to convey a product's value to the end user and really hone an accurate visual identity for product companies, especially. What you do at Shake Brands to tackle that, and what advice do you have for companies on how to convey an accurate visual identity, despite all of the restrictions in the space right now?
Brittany: Yes, it's a really good question, and we've spent a lot of time formulating that process as a team. I think it starts with focusing in on-- say we're working with a brand that we're either bringing to life or bringing to life for a client. We're focusing in on very early, exactly who they are from a brand perspective and who're their audience is right away. Because you are so restricted, you have to keep that focus even stricter. I think it starts with that understanding and commitment to compliance upfront, from the get-go.
From there deep focus, on who they are and who they serve. Then once that's defined, the strategy and simple design solutions. You begin to feel less restricted because it's a landscape where you were born. It's where you live. I think that as simple as that process sounds, I think it's valuable. I think it's a good one.
Sinead: Definitely, yes. At this point, I don't think we're all that far away from federal legalization, and all that far away from the FDA actually giving us some concrete guidelines on what we can and can't say. How do you think branding is going to evolve in cannabis as we reach federal legalization?
Brittany: I think it will continue to improve in that way. I'm sure it will be like anything in this journey. Some steps back and some steps forward. People pushing the boundaries. I think is important. I think people understanding that having an expert that is versed in both strategy of communication and compliance and working together as a team is a good place to start.
I think will begin over time to see that it come to life. I hope in its own way. I would hate to see it lose the focus on the plant, which I'm sure could happen pretty quickly if it's in the wrong hands. I think that it's going to be an interesting journey that I think the brands that focus on their own ethos, what's important to them and to their consumers specifically in a focused way are going to be leaders.
Sinead: I couldn't agree more. I feel like that's a great segue into CBD & ME, which we have touched on, but we haven't really dived into, Brittany. I know CBD & ME is a relatively new venture of yours, but tell us a little bit about that part of the Shake Brands umbrella there.
Brittany: Absolutely. It's the most developed brand that we have that's of our own, for sure, and it really just stands for the plant working for you in a specific way, because it is so personalized. What we try and do is bring, like you said, chemical-free products that are creatively formulated in-house, scaled in-house, all the creatives done in-house through product development packaging. We don't use a co-packer. Everything we do in-house that we possibly can we do in our hands touch it and that's a really important part of our brand.
The USDA certification on the organic side is also something that sets us apart. We offer 19 skews and they vary from a set of topicals, which are bombs and rollers that are really good for just anything on the topical side. Specifically, we've had really good luck around head and neck pain, around menstrual discomfort, and around neuropathy issues as well, just specifically on topicals.
From there, we have a set of sublinguals drops that come in either 500 milligrams per ounce, or 250 milligrams per ounce. That gives a lot of variety for people who are taking the sublingual and what it could offer them. Then we have a pet line as well that we've seen a lot of really good help given to our furry friends. We're interested to see where that market can go because it's been phenomenal for both dogs and some cats, and so dosage that's appropriate for size is there.
We've also just launched Hydro Hemp, which is non-CBD product line that uses the plant's roots for a dry root mask where you add the water, a face product, beauty product, and then follow that up with a just newly launched serum. That is based in seed oils and the benefits of seed oils, and so it's a really nice product that goes on after. It can go on at bedtime, it gives you a little glow in the morning. It's a really nice beauty product. That rounds out the line.
We really want to be known for in-house formulation for how hyper-local we are. Then I guess on the other side, we want to be known as a brand that retailers want to work with. Distribution is a really hard part right now because you find people resistant to bringing on a new line for the sheer ability to deal with the paperwork and things like that. Finding those right distributors that are in the right-minded places is a goal, and it's been a challenge of ours. It's something we're continuing to work on.
We want retailers to know we'll do anything for them. We are deeply motivated to make them happy and we're so happy to customize what we offer them. We have good entry points, we have incentives on introductory offers, we have display that's well-designed display if that's part of the ask. I think that sets us apart in that we're willing to work with a retailer in a really special way.
Sinead: Absolutely. As of right now, where all have you gotten CBD & ME on the shelves? Is it Arkansas only? Are you in a few different states at this point?
Brittany: We're in several states now but it is regional. We have a good presence here in Arkansas, a little bit in Missouri, Texas, Oklahoma, and Tennessee in the Lookout Mountain, Georgia area. Our most successful retailers have been ones we could forge a relationship with who get to know us and understand what we're doing and why our product is different. That just takes time to craft those relationships.
I think we talked a little bit about where we have a partnership with the CBD Source at NCPA, which is one of the big pharmacy regulators. Basically, what they do is they came in and they were looking for an organic-- they basically recommend our line along with several other CBD lines, two small independently owned pharmacies. Now, sometimes those are changed but they're still not the Walgreens of the worlds and things like that. I think that's a good niche for us.
We went through in that a really rigorous vetting process, and our chemical-free processing was front and center of that and how we differentiate and make our consumer understand that we're not going into the big box stores and we're not going into gas stations. It's a more premium brand as far as that's concerned without a pretentious costume on, so to speak. [laughs]
Sinead: That makes total sense. At this point too, you've got such a wide selection of products. What would you say? Any trends that you've seen, any products that have been particularly successful in the south that you maybe were surprised by or-
Brittany: I think pet has been a big surprise for us. The sublingual on the pet side, that's one where we have heard so many firsthand accounts of just life-changing improvement in pet health. That's been big. We're about to launch our very first suppository. It's a personal moisturizer for menstrual discomfort. We really pushed it for women. The testing on that so far has been excellent. I think it's going to be a really good place for a lot of people that suffer from that kind of menstrual pain, endometriosis and beyond. I'm really hopeful about how many people that product can help. It'll be launched next month.
Sinead: Oh, that's exciting. That's definitely an up-and-coming niche there and I think a very promising one. I'm excited to see what you guys do.
Brittany: That's definitely where we want to focus on our cannabis processing and the products we bring to life, we are going to really focus on women products and beauty products because there's just none of that in our market, and there's so much opportunity to help people there.
Sinead: Absolutely. Brittany, I really want to get your opinion on the cannabis landscape in Arkansas right now. I know there's a huge push to get recreational cannabis on the ballot for next year. What are your thoughts on that? What do you think the outcome is going to be and how at Shake Brands are you positioning yourselves for that?
Brittany: This is just personally. I would be surprised if we get there in '22. I just think that the program needs to mature a little bit beyond where we are. It's so small and they really just have been slow in methodical which I respect in many ways about how the legislation has been crafted and how the licenses have been handled. I would be surprised to see it in '22. I think some of our neighboring states, I think we've got a chance.
I could see maybe it happening in Missouri, which is nearby. We've talked a lot about what that could look like if Missouri and Oklahoma were immediately there sooner than we were, them being such neighboring states, especially to our region here in the northwest corner. I think it'll be interesting to see. I'd be surprised if we go in '22, but I hope it's not too far after that. It's certainly where our mentality is long-term.
Sinead: Definitely. That's what I figured. I think maybe next year might be a little too soon, but it's definitely in the cards for Arkansas very, very soon here, so lots to be excited about in Arkansas. Brittany, I want to wrap up with a few fun, personal development questions because I know CBD is a big part of your life but it's not the only part so I'd love to ask you a few questions. First one, is there a book that's had a big impact on your life or your way of thinking that you could share with listeners?
Brittany: Yes, for sure. On the personal side, I think I would have to go with To Kill a Mockingbird just because I read that at such an early age and it formed so many just really firm beliefs in justice and equality in my mind. It's been just something I could reflect on my whole life whether I was a kid growing up, a young adult and now as a parent. For sure, you just see life at so many stages through that beautiful book by Harper Lee.
Then I'd also just mention on the professional side, to me, the very first thing that connected the dots between design and cannabis was that Pentagram designed Field Guide to Marijuana by Dan Michaels. I think it was maybe like in 2013 or 2014 and I saw as a designer, solely just following Pentagram and all of their amazing brand work, and just the photography by Christiansen in that book, it was just an incredible way to bring the education to the plant and elevate its space in the design world for sure.
Sinead: That's great. For our listeners that are interested in cannabis design that's a great recommendation.
Brittany: Yes, for sure.
Sinead: Awesome. Well, Brittany, our next little personal development question here for you. What would you say right now, if you ended this interview and you went and turned on Spotify, what would you listen to right now?
Brittany: You bet. Right now, we over here are super into women singer-songwriters in Americana genre so we've got tickets to see Larkin Poe coming to Fayetteville, Arkansas in November. Our biggest pride and joy, definitely of late has been the rise and success of Brandi Carlile. We've been seeing her. My best friend and my wife and I have been seeing her in dive bar since the late '90s, little venues that she wouldn't even dream of playing anymore, and to see her come on to the stage in such a powerful way and everything that she stands for has been just pure joy so I think that's definitely the genre of the moment at our house and beyond.
Sinead: Oh that's great. I'm not familiar with Brandi Carlile. I'm going to have to look her up after this.
Brittany: Check it out. One of her bands is The Highwomen and they're a whole movement of their own. It's an amazing singer-songwriter combination there that put out a killer album [crosstalk].
Sinead: Oh my gosh. Yes, okay, I'm going to make a note here to look her up after this.
Brittany: For sure.
Sinead: That sounds like it'd be right up my alley. Awesome.
Brittany: Yes, you'll love it.
Sinead: All right, well, Brittany, wrapping up here. What's the best way for listeners to get connected with you at Shake Brands.
Brittany: You bet. Shake Colab.com is a great way. I think the real thing I'd like to say is, we are just calling all minority-owned and women-owned-run businesses in the cannabis industry so that's dispensary owners, farmers, developers, any kind of pro, we want to hear from you. We want to work together to build brands that matter and products that help people. You can find us through the form at Shake Colab, or Brittany, B-R-I-T-T-A-N-Y @ShakeColab.com and me or one of the buds will get right back to you and let's get started. We're on Instagram under ShakeColab as well, and cbdandme.co. You can find us there.
Sinead: Awesome. Well, Brittany, thank you so much for coming on the show today. This has been such a fascinating interview. I've loved getting to know more about you and Shake Brands and just wishing you all the best with the company over the next couple of years. I'm really looking forward to seeing what you guys do.
Brittany: Awesome, Sinead. Thank you so much for your time and energy today. I appreciate what you guys are doing so much and it won't be something I forget, so thank you.
Matthew: If you enjoyed the show today, please consider leaving us a review on iTunes, Stitcher, or whatever app you might be using to listen to the show. Every five-star review helps us to bring the best guest to you. Learn more at cannainsider.com/iTunes. What are the five disruptive trends that will impact the cannabis industry in the next five years? Find out with your free report at cannainsider.com/trends. Have a suggestion for an awesome guest on CannaInsider? Simply send us an email at firstname.lastname@example.org. We'd love to hear from you.
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[00:36:37] [END OF AUDIO]
A long-debated bill establishing new hemp rules just gained final approval in California, but what does this mean for the market and how should we prepare? Here to help us answer that is Jeffrey Welsh, Partner at Vicente Sederberg & co-founder of Composite Agency.
Learn more at https://vicentesederberg.com
[1:37] An inside look at Vicente Sederberg, one of the largest cannabis law firms in the US
[4:56] Jeffrey’s decorated background in entertainment and how he came to join Vicente Sederberg
[12:04] Emerging growth opportunities in entertainment and cannabis
[16:46] How celebrity brands could help destigmatize cannabis and draw in more consumers
[21:57] The Trailer Bill and what this means for California’s cannabis industry
[25:41] Assembly Bill 45 and the end of prohibition on smokable hemp in California
Matthew Kind: Hi. I'm Matthew Kind. Every Monday, I look for a fresh new episode where I'll take you behind the scenes and interview the insiders that are shaping the rapidly evolving cannabis industry. Learn more at cannainsider.com, that's C-A-N-N-Ainsider dot com. Now, here's your program.
Sinead Green: Along debated bill establishing new hemp rules just gain final approval in California, but what does this mean for the market moving forward and how should we prepare? Here to help us answer that is Jeffrey Welsh, Partner at the Vicente Sederberg and co-founder of Composite Agency. Jeffrey, thank you so much for being here today.
Jeffrey Welsh: Sinead, it's my pleasure. Thank you so much, excited for our conversation today.
Sinead: I'm so pumped to have you on here and before we get into your background and all the amazing work you do in California, first off Jeffrey, can you give us a sense of geography and let us know where you're sitting today?
Jeffrey: Sure, yes. Right before the pandemic, I moved to Northridge, California, which is just what we call the Valley here. It's hot basically year-round, but it's now officially the end of summer. Things are cooling off a little bit, which means it'll be in the low 90s, early 80s this weekend. That is where I call home these days.
Sinead: Oh, nice. Very cool. Talking about California, obviously, you're no stranger. You've lived there for many years, but you do so much work there and so many cool projects. I'm so excited to get into this, but first off, Jeffrey, can you give us a snapshot of the Vicente Sederberg and the work you do there?
Jeffrey: Sure. I'm one of three California partners in Vicente Sederberg who is the nation's largest cannabis and hemp-focused law firm. Ironically, I found out about VS back in 2010, which was my first year of law school at Pepperdine in Malibu, California. I had gone to law school to be an entertainment lawyer. I come from a performance background in music, in saxophone particularly, but in 2010, I started working and discovered the cannabis industry in large part because VS actually wrote the law in Colorado, excuse me, that was the nation's first adult-use law.
Way back in 2010, my law school roommate and dear friend and business partner, Luke Stanton and I, hatched a plan to start our own cannabis-focused business law firm when the time was right in California, which we did in 2015. Ironically, right before the pandemic hit in 2019, as a result of lots of great conversations with the VS team, we decided to join forces and bring our book of business into the VS fold, mostly because a lot of our clients, Sinead, were looking to expand operations into other states. It was just such a wonderful compliment that we had a relatively small, but successful law firm joining the best in the business and the firm that we modeled our own firm after.
I've been with VS now for two years. We really handle anything and everything in the regulated cannabis hemp and emerging therapies spaces, really outside of litigation. We have a very small litigation department, we don't touch on criminal defense either. A day in the life of a cannabis lawyer is extremely varied and unique and that's what keeps my day to day extremely fun and unique because there are new challenges, that we're dealing with on a daily basis as we're going to dive into and chat about some of the things we're focusing on.
Sinead: I imagine, gosh, the last few weeks alone have just been probably a whirlwind for you, haven't they, Jeffrey, just with all the recent developments and all the-
Jeffrey: Oh, yes, which is great. I'm thankful to be in a space, it's evolving always for better or worse. It's certainly great job security with constant new developments and regulatory changes. Everything regarding, like new emergency regulations in California that just came through and we'll talk about the recall election and AB 45 and the provisional licensing issues, all these things are something I work with our clients on a daily basis on.
Sinead: That's great. Lots to unpack in this interview. I'm so excited to get into all of that in a second here, but you glossed over this, but I don't want to get through this interview without talking about your background in entertainment because you had a very impressive background in entertainment as a saxophonist. Can you tell us a little bit about your musical roots and maybe you share a few of your proudest accomplishments as a saxophonist?
Jeffrey: Sure. Absolutely. Really, I decided to do my undergraduate studies and my graduate studies in music performance. I did my undergraduate studies in music conservatory called the Hart School of Music, which is in West Hartford, Connecticut. Tremendous experience and really honestly, musicians and lawyers, being a musician taught me the art of dedication and frankly, hard work. The concept of spending eight hours a day in a practice room, that was my college experience. Obviously, I had a fun time, but I really learned how to sink in and really focus on myself and hone my skill set, which certainly was very helpful during law school and even developing your own business and practicing law, growing a healthy client roster and working with people.
After the Hartt School, I decided to do my master's at the University of Southern California here in LA, where I got my master's degree in saxophone performance as well. My goal at the time was to be like a touring musician and studio musician. I did some fun studio gigs. I'm on a couple episodes of Family Guy as a saxophonist, which was pretty fun. I was a sub for the Los Angeles Philharmonic in the Hollywood Bowl. I've had the opportunity to perform at Disney Hall in downtown LA and also the Hollywood Bowl, which are tremendous experiences for me.
Toured and recorded for a while. I tell this story a lot, but realized shortly after graduating from USC, that I needed to explore the business side of music. Part of it was leaving gigs, particularly like larger gigs, if there were celebrities we were performing with or larger entertainers. I would always see their managers and lawyers seemingly leaving in much nicer cars, than all the musicians. I'm certainly not a guy that money is my only focus, but always felt like I might have a really unique skill set. I've always been a people person, I've always really enjoyed being around people, and that side of me, I felt incomplete, honestly, as just a musician and that's not a slight on anyone who's a musician, whatsoever. I'm just speaking to my journey specifically.
That curiosity is really what led me to law school, in the hopes of being a music entertainment lawyer. Ironically, it was that curiosity that evolved into cannabis. 2010, like I said, is when I started law school and that's really when I discovered cannabis law. Now, California cannabis law in 2010 wasn't what I do today. It was keep your clients out of jail. We had a limited regulatory structure with some corporate formation in place that acted as an affirmative defense. I don't want to get too far in the weeds on California cannabis law 10 years ago.
That subsequently evolved into, particularly as a founder of my first law firm, into really utilizing my skillset with people into aggregating a pretty roster of some of the most well-respected brands in the State. I'm fortunate, Sinead, to still be able to perform and record pre-pandemic. I could perform once a month in LA, either at cannabis events of our clients or at nightclubs. At this point, I either performed saxophone with DJs or I'll DJ myself and play saxophone at the same time.
If anyone is out there curious what I sound like, it's like basically house music with saxophone on top. Groups like Big Gigantic and Grease are definitely some of my inspirations, as far as who I try to like model my performances after these days.
Sinead: Gosh, that's amazing, what you said. You said you're in a few Family Guy episodes, is that right?
Sinead: Oh my gosh. My brother-in-law is quite possibly the biggest Family Guy fan. He is constantly making references that go right over my head. I'm going to have to share that with him. He'll find that so cool.
Jeffrey: It was a very memorable experience and honestly, a lot of that work, what was really most interesting, Sinead, was that also, one of my reasons for pivoting out were my teachers at USC who were teaching me, were the same people who were then my competition. The studio music scene in LA is very small, and one of my teachers at the time is the guy. His name is Dan Hagens. If you've ever heard saxophone on any movie, he's the guy from Catch Me If You Can. He is Lisa Simpson from the Simpsons. He is the sax guy, he does the Grammy Band, he does the Emmy's Band, he does the Oscars Band. He's the guy. He was now the guy I was competing against for gigs. I recognized it's such a small space. He was not an old guy, so I realized, hey, this might make sense for me to differentiate myself a little more meaningfully as well, because there's just not that many sax gigs at that level.
I'm glad to give you some extra context to [crosstalk].
Sinead: Oh my God. Like you said, I find it so cool that you decided for, various reasons, not just the competitiveness there, but to pivot to the law side of entertainment and help facilitate some deal flow between those industries. Getting it into that, Jeffrey, can we talk about celebrity brands a little bit in cannabis because I feel like from Seth Rogan to Willie Nelson, Jay Z, we are starting to see a lot of unique celebrity brands in cannabis, but if you can give us an overview of where we're at with that and where you see that heading.
Jeffrey: Sure. It's one of my old tired sayings, but what I always say is music in cannabis is peanut butter and jelly. There are very few things that go better together. That was such a complementary fit to me. That's what really drove me to try and bring this gap, to create a way for the entertainment world to more meaningfully work or activate themselves in cannabis and hemp.
Right now on the celebrity side of things, I see two really different buckets. I see, still to this day, groups of talent that aren't doing it right. You'll see brands that are out there, where it's very clear the brand ambassador or the celebrity is just looking for a paycheck and they're not meaningfully involved in the brand. The brand itself is not really a natural extension of the celebrity themselves. There isn't that like genuine thread that binds the two and cannabis consumers are smart and we're picky. There's a lot of choice, particularly in California, as to cannabis products.
You're going to have your super fans, so regardless of whether a brand has that authentic connection, you might still sell some products. Most consumers here aren't going to pay a premium, like a 15% to 20% premium just because you're buying a musician's cannabis. That to me is unfortunately still the largest bucket of celebrity brands. I'm not talking about celebrities getting involved or investing generally, just celebrity brands and that's most of them.
The groups you just touched on, I think, like Seth Rogan's brand, in particular, Willie Nelson's done a great job. I don't want to like pick on the Marley family. To me, Marley Naturals is a great example of what I brought up first. There's no authentic, really connection between Marley and the cannabis products. I think that's the struggle to sell those products really speak to that.
The groups that are doing it right is quite the opposite. I think first and foremost, they're not looking at cannabis as a short-term win. It takes a while to create that trust with the cannabis consumer, because say you're a fan of Seth Rogan and say you smoke cannabis, those two don't necessarily have to align. They're not mutually exclusive. Just because I love Seth Rogan, doesn't mean I'm going to love his cannabis, particularly if in California, I can get an equally good product for $40 an eighth, instead of $65 an eighth. A group like House Plant, what they've done is they've differentiated themselves. The brand optics are beautiful, the flower is preeminent, but they've also differentiated themselves by one, Seth being meaningfully involved. Seth also really understanding the importance of walking the walk, as it relates to social equity initiatives or giving back to a community that has been disproportionately affected by the war on drugs. Groups House Plant are really doing that.
Then, you add in the other differentiator, which is their accessories are beautiful talking pieces of art. I think really approaching celebrity brands as, hey, we have to get meaningfully involved, this can't come off as a way for the celebrity to get a paycheck and how are we going to really differentiate ourselves and get the brand ambassador or celebrity really involved. Do the meeting greets, do lots of Instagram, Facebook lives, stuff, depending on what you can do specific to social media.
I think I've unpacked that. I'll pause there and see if you got any more questions because I know I just--
Sinead: Oh no. That makes total sense. I was curious because in most other industries slapping a celebrity's face on a product, they tend to see some success with that, but with cannabis consumers, I feel like, like you said, they are a little bit more savvy. They're a little bit more set in their ways, maybe a little bit more educated and they know, which products they already like. I wondered with some of these brands that aren't, maybe, like Seth Rogan, his name is almost like synonymous with cannabis, I feel like. I saw recently Cheech & Chong have partnered up with Eighth Icon Holdings to start another brand there. Cheech & Chong again, they're very synonymous with cannabis. It's almost, those are really targeting cannabis consumers.
Are we going to start to see celebrity brands that really peak a broader public interest and then maybe, help broaden the industry and maybe help to lessen some of that stigma, maybe normalize it. Do you think we'll start to see some of that?
Jeffrey: I'm glad you're bringing this up, Sinead. That's the core thesis for me, is that look, it makes sense for Seth and Snoop and Wiz and Willie, and we know they're the usual suspects. That just fits into their core brand, but where the opportunity is, where the opportunity to change hearts and minds are with people that you wouldn't traditionally associate with consuming cannabis. That's how we really convert the people who are on the outside looking in, is utilizing celebrities for better or worse, as a way to get people to be educated and to try rust the plant. That to me, is the most meaningful way we can really start to bridge that gap.
That goes to also, one of my other thesis in entertainment, which is utilizing non-psychoactive cannabinoids as a stepping stone because you don't have the regulatory challenges. If you're dealing with someone who's, maybe 60 plus, they may have smoked cannabis in the '60s or '70s, but the cannabis today is much stronger. It's different, there's a lot more choices, there are strains, there are different products. The ability to introduce someone who's maybe never smoked cannabis or who hasn't smoked cannabis in 40 years, to a topical CBD product that's going to help them with some aches and pains, to me is the perfect entryway to having them explore that curiosity and to opening that door further, once we get to federal legalization.
The demographics that currently aren't being targeted can really start being effectively targeted. Those are also demographics that I think would benefit the most from relatively regular use of the plant. For me, I am a almost daily cannabis user at night, it's part of my evening ritual. Is that for recreational use or for medical use? I'd argue a little bit of both, but I wouldn't say I have a true medical need to consume cannabis.
I just told you my mom just got in town. My mom is in her 60s and absolutely benefits. I always get her topical products and she loves vaporizers and so I always get a couple of clients vaporizers because then she can enjoy the product in a way without her getting too stoned, frankly. She can't smoke California Flower, it's just too strong for her. I'm lucky to have my mom, of course, but my mom's lucky to have me as it relates to cannabis because I can be her education gap. I can bridge that gap for her, explain what the terpene profile is on the back of the product.
That said, my mom obviously cares what I say, but I don't have that weight. I don't have 10 million followers on Instagram, that to me is one of the most exciting evolutions of our space, and something I remain bullish about is continuing to push and find people who are willing to basically support and defend the plant and all of its amazing uses.
Sinead: Absolutely. That's such a great point and like you said, some of these recent developments in California are only going to expedite that. We've got the Trailer Bill, we've got Assembly Bill 45. There's a lot of stuff going on right now, that I think is only going to aid that.
Maybe we'll start with the Trailer Bill and talk about the new industry regulations that has just put forth in California, could we talk about that for a few minutes?
Jeffery: Absolutely. You just summarized my week, Sinead. That's been 80% of my phone calls this week. Look, this was good for the industry in California, and for those not in the know. Essentially, California's cannabis regulatory structure are three different agencies, and this new Trailer Bill consolidated those three agencies into one, creating what was the Bureau of Cannabis Control into the Department of Cannabis Control. it went from BCC to the DCC.
With the advent of the DCC, came 400 pages of emergency regulations, that were released, I believe, middle of last week. When I say that's been my week, this week has been spent working with my team. I'm so fortunate my team is just so impressive and we've already created summaries. If you go to Vicente Sederberg or just search Vicente Sederberg DCC or emergency regulations, California you'll land on our page with our summary. It's good for the industry in the long run, Sinead, it's challenging initially, because with new processes mean hiccups and inevitably mean a little bit of a loss later, in terms of productivity and effectiveness on communication.
The reason it's good long-term, is that these agencies and I'm not blaming the agencies specifically, it was just the nature of the beast. Pre DCC before these agencies were consolidated, they didn't really communicate effectively with one another. I might have a client that has a cultivation license, which was one regulatory body, a manufacturing license, which is a different regulatory body, and a retail license, which is a different regulatory body, and trying to communicate or get them to communicate with each other, was extremely challenging.
The concept of having one point of contact, as it relates to the regulators instead of three or three different agencies, it is encouraging long term. The challenge now is that particularly during these times, like during COVID, they're dealing with a massive agency consolidation, brand new rules, so now, the analysts and people working for the DCC are now getting flooded with requests about how to interpret these new rules. That in conjunction with provisional licensing, which we'll talk about, means there's a massive logjam right now. To process a license in California right now, we're quoting like four to six months for the DCC, from the day you submit a license application, until you receive approval.
I think as we look to the future, this is going to get better and more efficient and I do think this is a sensible move long term, it's just right now we're dealing with the reality that things are going to slow down when you implement a new meaningful process that affects tens of thousands of businesses in the state.
Sinead: Absolutely. Vicente Sederberg, you were so instrumental in overturning the smokable hemp ban in Texas. You mentioned there are going to be some hiccups here and there, but ultimately, you think this is going to be very good for California. Could you maybe discuss some of the parallels there and give our listeners a sense of what Assembly Bill 45 is and how, maybe, you see some parallels there between California and the Texas market?
Jeffery: Sure, absolutely. Another hot button topic and I've got to give a shout out to my colleague Shane Pennington, who was instrumental in helping to overturn the smokable hemp ban in Texas and I'm sure he'll be back to work in California now. Luckily, we've got him on our side and a great team. Look, like we talked about before the interview, Sinead, it's two steps forward, two steps back. It's not a lack of progress, but I don't quite understand the thesis or rationale here.
Again, to summarize what AB 45 is, it's basically, the California Legislature has given final approval to this Bill, that really allows a formal pathway for hemp-based CBD to be used in foods, beverages, and other products in the state. That is wonderful, that's the two steps forward because as you and I both know, Sinead, it's not just California, it's everywhere in the country if not the world that, specifically in the US, it's clear the FDA has not approved hemp-derived CBD as being generally regarded as safe for human consumption, and everyone's doing it regardless. You can find CBD additives everywhere, online, at your farmers market, at your local coffee shops, everywhere. It is absolutely everywhere.
It's nice that California is providing that pathway, but at the same time after this wonderful news in Texas, it's also banning smokable hemp. My concern about this Bill is that they are checking off one box and creating a whole new separate set of issues, which is that hemp cultivators, there could be some litigation that stems from this new regulatory pathway we're heading down. I just feel like if you're going to allow people to ingest CBD, then and I would consider inhaling or smoking hemp, a different form of ingestion, understood.
Look, if you're allowing cigarettes to be sold and regulated appropriately and cigars to be sold and regulated appropriately, to me it's nonsensical why you wouldn't provide a pathway to properly allow for the regulated sale of smokable hemp products.
I don't know if you've ever tried a hemp cigarette? I've had like 10 of them in my life, and 9 of them were terrible. I don't necessarily envision it being a massively popular product, except for the fact that hemp cultivators are now starting to produce hemp, that basically looks like cannabis, and supposedly, if they're able to harvest it and keep it fresh, it does taste amazing. I think if we have a regulatory regime that allows for the sale of this, then we'll see the products evolve because for the most part, most of the hemp cigarettes I've tried in my life had been extremely dried out and extremely harsh. I think that's just because there are a ton of legitimate businesses really trying to evolve this but, Sinead, the obvious low-hanging fruit here is that hemp can be a wonderful cessation device from smoking nicotine.
I'm not going to sit here on this podcast with you and argue that smoking anything is healthy for you, but I'm quite sure, and I'm not a scientist, that smoking hemp cigarettes is better than smoking cigarettes. Smoking hemp flower does not have the same additives that smoking a pack of traditional cigarettes has. This is when we can get to a further, longer deep-dive into what type of money is behind these types of Bills and this type of legislation. You probably know what I'm hinting at, but big volume, big corporations always have their hands on some of this stuff.
Sinead: Gosh, absolutely. Assembly Bill 45, there is much to unpack in that alone. I feel like, Jeff, we'll have to do a follow-up interview at some point to really dive into some more of the stuff. We'll have to do so.
Jeffrey: I'm coming back, Sinead.
Sinead: Absolutely. Jumping into some personal development questions, I know you live and breathe cannabis, but you're very multifaceted, you've got so many other interests and we've touched on a few of those in this interview. I wanted to dive into those a little bit here, too. The first question, is there a book that you feel has had a big impact on your life or maybe your way of thinking, that you could share with the listeners?
Jeffrey: Sure. I would like to share it too, if you don't mind. They share a similar thesis. The first book is a book called Shantaram by Gregory David Roberts. I don't know if you've heard of that one.
Sinead: I haven't.
Jeffrey: It's essentially a massive story of redemption. It's a true story of basically a guy who spent like eight years in the Indian underworld. He was an armed robber and a heroin addict, escaped from an Australian prison to India, where he lived in a Bombay slum. He then reformed his life, and acknowledged the opportunity we have for this short one life we get to live, but still kept his edge, which is part of what makes it interesting.
He establishes a free health clinic in India, joins the mafia, is doing crazy work, is like a street soldier, he then falls in love. It's an epic tale of redemption and personal evolution and development. I won't spoil it for anyone who hasn't read it. I can't recommend that book enough. It's long, but it's also just one of those that once you commit the time to get into it, I couldn't put it down, I've read it like three times. Also interestingly, it was written by the guy, Gregory David Roberts, he wrote this about himself. The book was actually destroyed, the first two versions of it were destroyed by prison guards. Talk about a testament to the human, he wrote this entire book, but once you see it, it's not a short read, like three times.
Sinead: Oh my God.
Jeffrey: It's really like a saga and I generally stay away from the word epic, because it's overused in Southern California, but it's just a remarkable achievement, a brilliant, vivid story. It's compassionate, it's about human evolution, and it's also about redemption and that goes to my next book. Probably, my favorite all time book is The Count of Monte Cristo by Dumas. I actually just read the unabridged version for the first time over the pandemic. I'd read abridged versions a bunch of times. Again, similar themes.
It was an interesting question, Sinead, because it made me think about that for the first time in a really long time, and I found it very interesting that both of my favorite books are around the topic of redemption and evolution. I think I connect with those books in large part because of my evolution and that for me to change career paths, while I was a successful musician and to change completely and become a lawyer and then start my own business in an emerging space. Starting a cannabis law firm in 2015, which is what I did, was something a lot of people thought I was crazy for doing and thought it was essentially career suicide. I really resonate with those books because to me, it helps reinforce that while, of course, taking other people's opinions and particularly people you trust and love into account, if you have that fundamental belief in yourself, that really nothing is impossible and I really try and take that approach.
Obviously, books are not music, but music is probably my largest draw of inspiration, specifically, but those books are a reminder of you go through a hard day and then you read about someone like Mr. Roberts and his life and what he went through. I won't spoil any of the Count of Monte Cristo, but man, you want to talk about a story of redemption, it's my favorite story of redemption of all time. It's obviously one of the classics, but it's powerful and it's inspirational.
Sinead: Absolutely. That's great. I'm definitely going to have to bump those up the reading list. It's funny, Jeff, what you just said there, you said music is your greatest inspiration. That actually is so convenient because my next question for you was, I never want to ask, especially with an audio file like yourself, I never want to ask what's your favorite band because that's just an impossible question to answer, but-
Jeffrey: That'll be five hours later.
Sinead: Exactly. Jeff, say right now, if you were to end this interview and go put on some Spotify, what would you want to listen to right now? What's your favorite music at the moment?
Jeffrey: I have been relatively hooked on Rüfüs Du Sol for like a year and a half now. I basically have their entire catalog, as far as on the sax. If you're not an electronic music fan, I just think Rüfüs Du Sol-- I listen to everything and so the question's hard, it just depends on what I have. Frankly, if I need to focus, I'm probably not listening to Rüfüs because then I'm just going to listen to Rüfüs. They did just drop a new song today.
Me as an electronic musician myself, as a DJ and I do some producing and obviously, play saxophone, I'm always particularly inspired by electronic artists, who meaningfully differentiate themselves and actually perform instruments. I think too often people consider electronic music to just be like very heavy beat-driven, dance-focused and DJs. Rüfüs Du Sol, they do DJ, but they also create just to me, some of the most beautiful music I've ever heard that really resonates with me. It's inspiring, it's wonderful to listen to, it's relaxing, it also helps that the themes of their music are usually focused on love and to me, there's not really a better feeling to focus on than that.
I know that's focused on in lots of music everywhere regardless of genre, but there's something specific about them that I connect with directly and I think part of it is because playing sax with their music is a perfect complement to one another. Really, any of my new shows that I've been doing, my last show was like three weeks ago, I'll certainly always throw in a Rüfüs track that I'll play the melody along with or do some improvising with and it's usually one of the favorites. It's usually a top three favorite every time.
For me, it's also an opportunity to spread love, spread good energy, and hopefully, the audience living that experience, I'm leaving them with something to think about, whether that's something for themselves. That's what their music does for me, it helps me get inside myself in a good way and really think about my evolution and how I need to continue to evolve. It's always powerful when music has the ability for you to get introspective. Introspective doesn't mean it has to be massively productive, right? It can just be, "Hey, I'm just taking this music in and just like breathing it in." I am a massive Rüfüs fan, as you could probably tell. I just saw they dropped a song this morning and I haven't gotten to listen to it.
Sinead: Oh my gosh.
Jeffrey: That's probably why I said them first and foremost. Your question would also depend on if it's Friday night, I'm listening to something a little more upbeat. It just depends.
Sinead: I'm not familiar with them. I'm going to have to go check them out. Jeff, maybe for listeners who either would love to get connected with you at Vicente Sederberg, or maybe just come attend one of your gigs and SoCal, how can our listeners get connected with you, and maybe see a list of your upcoming gigs?
Jeffrey: Sure. I appreciate that, Sinead, thank you. My Instagram handle has all of my music and relevant cannabis updates. My Instagram handle is at J D Welsh, W E L S H. I'm also happy to give everyone my email, but it's a bit of a mouthful. It's j.welsh@vicentesederberg. You can also easily contact me if you just type my name, Jeff Welsh in cannabis, in a Google search, it'll bring you right to my page on our firm website, and then you could just email me directly from there. That might be easier. It might be the easiest way to get a hold of me.
As for all my music stuff, that's on my Instagram, but also my SoundCloud page, which is just Jeffrey, J-E-F-F-R-E-Y.welsh, W-E-L-S-H is my SoundCloud handle and got some new mixes on there, got some songs on there. I'm always happy to chat with anyone and everyone about music or cannabis or hemp or psychedelics. I hope our listeners can tell from this conversation, I'm a talker and I always like to connect with like-minded people.
Look, that doesn't necessarily mean that if you disagree strongly with something I said, or want to pick my brain or want to challenge a position I took on here, I always welcome that too, as long as that's coming from a place of respect and good energy. I'm always welcome to those conversations.
Sinead: That's amazing. I appreciate everything you've said here today, Jeff. This has been such a great conversation, so many amazing takeaways and just appreciate it so much. Thank you again, Jeff. All the best to you and everything you've got going on this year. So excited to see what you do and very much looking forward to having you back on
Jeffrey: Sinead, this was a pleasure. Let's stay connected. I hope everyone tuning in enjoyed themselves. Yes, let's stay in touch here and you have a wonderful weekend and I'll talk to you soon.
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[00:44:49] [END OF AUDIO]
As new studies shed light on the benefits of these powerful plant compounds, terpenes could become the biggest thing in wellness since CBD. Here to tell us more is Kevin Koby, co-founder and Chief Science Officer of Abstrax Tech.
Learn more at https://abstraxtech.com
[1:03] Kevin’s background in chemistry and how he came to start Abstrax
[1:55] An inside look at Abstrax Tech, the leading innovator in terpene sensorial experience
[2:44] A breakdown of terpenes and how this segment has evolved over the last couple of years
[4:44] How terpenes enhance the flavor and effects of cannabis through the entourage effect
[6:51] Abstrax’s Type 7 licensed lab testing versus standard cannabis testing
[10:50] Exciting takeaways from Abstrax’s “Man vs. Machine” experiment with Max Montrose
[14:02] How Abstrax’s terpene research is taking cannabis to new heights
[17:07] Abstrax’s terpene infusion products and the biggest trends Kevin sees among wholesale clients
[20:32] Where Kevin sees the terpene market heading over the next 3-5 years
Matthew Kind: Hi, I'm Matthew Kind. Every Monday look for a fresh new episode where I'll take you behind the scenes and interview the insiders that are shaping the rapidly evolving cannabis industry. Learn more at cannainsider.com, that's cannainsider.com. Now here's your program.
Sinead Green: Today's guest is the leading innovator in the fascinating new field of terpene sensorial experience. I'm pleased to welcome Kevin Koby of Abstrax Tech to the show. Kevin, thank you so much for joining me today.
Kevin Koby: Oh, thank you.
Sinead: I'm such a big fan of Abstrax, really looking forward to getting into the nitty-gritty here in a second. Kevin real quick, can you give us a sense of geography, where are you joining us from today?
Kevin: Yes, I'm actually at our Type 7 lab in Long Beach, California.
Sinead: Awesome. Okay. I definitely want to talk to you about the lab because I know it's quite an involved operation there. Really looking forward to hearing about that. First off Kevin, before we jump into Abstrax, can you tell me a little bit about your background and what you were doing before Abstrax?
Kevin: Yes, absolutely. I actually, I'm formally trained as a chemist and I got to do synthetic chemistry in two different research labs at my college at UCSB and learned a bit about synthesis, which has a bunch of different components of chemistry in there. Then after that, I went to work at Gros, I worked at analytical lab for some time and then I went straight into manufacturing for a while. Then I built and managed pretty much all the lab and manufacturing for prelarge [unintelligible [00:01:43] at the time in the medical market. Once the law came through, we started Abstrax. Once it became recreationally legal is when we started Abstrax.
Sinead: Okay. Very cool. Okay. Jumping into Abstrax, what is the company on a high level? Can you give us an overview of the company?
Kevin: Yes, I would say to best characterize this, we would be the premier cannabis flavor house. We're focused on designing the experiences of all cannabis products and to make that happen, we're just focused on the signs of cannabis and cannabis terpenes. That is the gateway to cannabis experience in our minds. Yes. We have multiple facilities to actually research the cannabis experience. We partner with growpartners. We have our own extraction facility here in Long Beach. We do R&D here, like analytical R&D, and then we also have a separate research building and a manufacturing building as well.
Sinead: Awesome. Okay. Pardon me, to my listeners, if I start geeking out too much, but I've always been very fascinated by terpene. Kevin, can you give us for our listeners that maybe aren't familiar or maybe need a refresher on terpenes. Can you tell us what terpenes are and why they're important, why this segment has evolved so quickly over the last couple of years?
Kevin: Yes. Terpenes, I guess on the most basic level, they're a class of organic compounds and that's how you describe it in chemistry, but in our industry, we've a colloquial-- We'll just use this as a word to describe all the aroma and the flavor of cannabis. That's what this word has evolved into in our industry. There's a lot of things in there besides Terpenes that give flavor and aroma, but that's we call it in this industry. It's just all the flavor [unintelligible [00:03:41] terpenes.
In the past, I would say like the '80s and '90s, all the breeders were breeding for high THC content in cannabis. Then as the industry grew, they sought after like more unique characteristics and there's all these flavors in cannabis, but all of those are very recent. Those didn't used to exist really, or at least if they did exist, you wouldn't know about them because they're just all over the place.
In the 2000s and on, they really bred for this really unique cannabis, like sensory profiles where things smell like grapes or berries or creaminess and that's what we would all call the terpene profile. That's what gives it that smell and taste. That got even more popular as soon as the dawn of extracts and vapes really came to the scene during the medical market and going to the reg market, that's when we started seeing a whole lot of traction around terpenes and interesting terpenes.
Sinead: Okay. Very interesting. Most of our listeners they might have heard of terpenes multiple times at this point, but they're probably a little bit more familiar with cannabinoids. I feel like just speaking of THC, for instance, that is the component that packs the punch and maybe dictates the amount of high terpenes. Would that dictate more the type of high? Is that how it works?
Kevin: Yes, one way we like to say it is THC and CB are like your gas pedals and the terpenes are like your steering wheel. That's one analogy we use. I think another one is just understanding the entourage effect. If you have a super high THC profile with no terpenes because it was super hot or it wasn't cured right, it'll get you so high with all the THC, but if you get a lower THC flowered with a lot more terpenes that will definitely have a better effect than the previous sample. We would call that the entourage effect. An entourage effect is some of the parts is greater than any of the individually combined. That's something that is super interesting to us. That's something that's really the key between cannabinoids and terpenes and how they interact in your body.
Sinead: Got it. Okay. Yes. Terpenes, they don't only contribute to the experience like the flavor and aroma, but they also contribute to the health side, like your energy levels, your focus, your calmness, is that right?
Kevin: Exactly, exactly. Right.
Sinead: Okay. That makes total sense. Jumping into Abstrax, this company is really the pioneer when it comes to terpene sensorial experience and just all the research and development you guys have done over at Abstrax is just really fascinating. Lots of big things that I want to jump into here. First off, can you tell us what differentiates Abstrax testing from just your standard cannabis testing?
Kevin: Yes. I'm glad you asked that question. I think it's not particularly fair to compare the two, I know the cannabis testing labs, their business model is the EQC based on a state guideline. They have to have certain requirements for their instrumentation, but they have great instrumentation, the regs are very high, so they have to have very good instrumentation. They're searching for predetermined anywhere from 22 to 44 terpenes and they can detect down to, for terpenes case, parts-per-million, they don't need to go any than that.
For the sake of argument, pesticides and things like that, sometimes they're testing down to parts-per-billion and they're going for strictly QC. When we're going and we're analyzing profiles, we are more on a exploratory mission, and so we're detecting down to parts-per-quadrillion. If there are any math nerds out there, parts-per-billion, 10 to the -9, quadrillion 10 to the -15, we're getting the numbers that small in powers.
Then we also detect-- We can qualify and quantify any compound in there and we can separate all of them. In any given cannabis sample, we're not detecting for 22 or 44 terpenes through, quite literally detecting 400 and more in each sample because that's how much are in there. Then we're able to qualify what they are and then quantify how much there is. All those little parts in there, they don't seem that important, but a lot of the character of each strain is those small characteristics.
Sinead: Right. Yes. That's really fascinating. Just the precision you guys are offering cannabis is just mind-blowing. Kevin, you mentioned, you're currently sitting outside Abstrax Type 7 licensed lab. Tell us a little bit about what you do there in terms of extracting and replicating and what exactly makes a Type 7 licensed lab? What qualifies you as that lab?
Kevin: Yes. When the regulation went through California and they started allowing cannabis, you had to go through this new licensing process whereas before it was a lot different. Long Beach was the only place that offered open enrollment. We filed for open enrollment and the regulations in Long beach are extremely high compared to other jurisdictions, so we figured if we could make it here, we could make it anywhere.
It took us a while to get this building up and running, but we finally did it and now this building that we constructed it, it was meant to be a very versatile Type 7 lab where we are extracting cannabis, making cannabis products, but also honing in on the methodology and also honing in the different flavors and aromas and how to be the all-encompassing research facilities. It's like we want to understand everything about cannabis. We want to touch it however we want, go eat all the [unintelligible [00:10:04], California is the best place for it and see what it's all about.
You can't really do that with a testing lab license or any other type of license. You need to have the versatility of using whatever you want, any [unintelligible [00:10:17] person, for instance. We constructed this lab, we put all of our analytical instrumentation in it, and we're doing hydrocarbon extraction day in, day out. We're doing analytics on extracts, flowers, inputs, everything. This is where any papers we're writing about cannabis are usually coming out of the work we're doing here. We also like to leverage the work we're doing here and see if we can help out universities that can't otherwise touch cannabis and try to do collaborative studies that way as well.
Sinead: Okay. Very, very cool. Kevin, we actually had Max Montrose on the show a few weeks ago. We've had him on multiple times, but very recently you did the man versus machine experiment. Can you tell us a little bit about that and your partnership with Max?
Kevin: Yes, that was a really fun whole project that we did together. Max Montrose, I mean, guy's a legend for everyone that knows him, but he's developing and interpreting which is almost like the new [unintelligible [00:11:21] program for any cannabis enthusiast who's getting to know cannabis. I think it's different to what I think cannabis, personally speaking, it has a lot more dimensions, a lot more variability, and a lot of different profiles. That it can produce genetically as well as like from soils and everything else that you can use with it, but Max Montrose developed this program where he can more or less predict how a flower is going to make you feel depending on how you do a sensory analysis of it. Smell it, see how it makes you feel on your face or in your olfactory.
There's a specific way he does that and he teaches that. We want to put it to a test. We have this very sophisticated analytical technology, we built an algorithm based on peer review journals, giving weighted scores to what individual terpenes would have an effect on someone. Every time we do an analysis, we put through this program, we would call it terpenelytics and it spits out the highest likelihood of how this is going to make you feel. Max Montrose is doing something very similar. Had him fly out, we gathered eight different samples, we did our terpenelytics on it to see what the scores would be, how it made you feel, what the terpene profile and everything, and then we had Max in a room and a bunch of people just go through and smell each one and try to give us the same data.
To his credit, he got seven out of eight right which was pretty actually astonishing for any scientist sitting in the room would be like, "Holy shit." The only one he didn't get right was one, I wouldn't even say he didn't get it right, it's just that he didn't really give an analysis on it because he said, "I've never seen this before." It was a totally new type of flower.
It was nice to surprise him with that as well as essentially validate two different methods as well. That was a really great project. Since then, our relationship has only grown.
Sinead: That's great. Man, what a guy. The fact that he could pinpoint that many, that's crazy. Any of our listeners that are really interested in terpenes definitely go check out that interview with Max that we had a few weeks ago because he's definitely the terpene king I think. That's probably a good name for him, but that's amazing. Tell us about the different ways your research is taking cannabis to new heights and you guys are across the board on all the different sectors you touch. Consumer education, product development, medical research, just so many things that you guys really have a hand in. Tell us a little bit about that and where you would hope to see Abstrax really taking cannabis over the next few years.
Kevin: At any given time we have at least 20 R&D projects that are in process so it's a lot of R&D projects. It's the most that I know about in the industry, I don't know what everyone else is doing. I think something that we do, that's a bit different than everyone else, is that we're trying to lift up and bring as much collective knowledge to the industry as we can as a company.
A lot of the way that we do that is just collaborating with universities. There's a lot of really great universities out there. We've one of the best in the world here in the US and a lot of them are very eager to study cannabis, and they're trying to figure out how to do that most effectively, where can they make impacts. Because this is a plant that has a research prohibition on it, which is extremely rare and now we're almost allowed to touch it.
There's still laws around it being Schedule 1, once it gets to Schedule 2, then universities will be a bit more free to experiment with it. We have several different collaborations going on like at UMN, we're doing a genetics research project to see what type of terpene trait or terpene [unintelligible [00:15:51] like genetic traits are heritable or not. That's one thing we're doing. At Western Washington University, like I was saying earlier, the entourage effect is extremely important to not only the cannabis plant, but cannabis community as well, and to the people, all the cannabis enthusiasts. We're trying to work on measuring the entourage effect over there and we've had some good results so far. At UC Riverside, we're studying how vaping smoking cannabis can affect lung tissue and things like that. These are all very controlled studies, our R&D takes a long time. It's good to plant these seeds now and see where they grow.
Sinead: That's great.
Kevin: Oh, yes but it keeps us [unintelligible [00:16:41] engaged too, right?
Sinead: Absolutely. Cannabis, there are just so many just question marks I feel like with particularly, like you said, to measure the entourage effect. That's just around the corner. Thanks to you guys, that's going to be massive. Lots of great things ahead.
Kevin: Thank you.
Sinead: The research and development side of Abstrax is really just one component at this point. You guys also you have wholesale products, you've got your own in-house products. Tell us a little bit about that and maybe we'll start with your own in-house products. I know you guys just recently came out with a new Cloudburst Series. Can you tell us a little bit about that?
Kevin: When we originally started, we were recreating a lot of our favorite cannabis profiles, which were in high demand at that point in the industry, and then we ventured off to making cannabis profiles that are accentuating the trade that we and our customers really loved about certain products like the [unintelligible [00:17:50], we want to accentuate that, bring that character out. I feel like we've been progressing so far that now we're at the Cloudburst Series and the Cloudburst Series is our same spirit. We're building a flavor on top of the terpene backbone but now it's just all forward flavors.
We've wrapped back around to almost the traditional flavor house, but all of our flavors are all built on top of the terpene backbone that will have the entourage effect when it's used with cannabinoids. I think we're really excited about that. We've gotten a lot of really great feedback, not only from cannabis consumers and manufacturers and big brands like that, but also just from the beverage industry or the alcohol industry, people that want to take inspiration from cannabis and apply it to just your average consumer packaged goods.
Sinead: Very cool. What would you say have been the biggest requests and what trends have you been seeing among your clients?
Kevin: There's probably a couple of different trends there that you're talking about. Locally, it's really like local communities like different flavors, and so I think that could embody this. Embodying of this is like when you go to the movie theaters and you see the icing machine. In every community and zip code, they're usually different just because those are the best flavors for that community. If you go to Hawaii, it's like pog and then if you go to California, it's cherry, but then if you go to Michigan, they have grape or something like that.
We service 32 countries and all 50 states and everyone has a very different palette for certain things. Grapes in Michigan is different than grapes in California, but not only like a different palette or things, they're different preference of the flavors that they want. Then once they figure out the type of flavors and the type of experience that they want, then it comes down to product application. We have a lot of people making edibles, making gummies, making beverages, [unintelligible [00:20:07], people are using these for vapes. There's a large variety of uses that they use these for. Now we're making sensory kits, we're also making analytical standards and our product portfolio is growing at least every week.
Sinead: Wow. Okay. Yes, I'm curious, you guys you're really leading the charge when it comes to the terpenes market. Where do you see the market heading over the next three to five years?
Kevin: Yes. I try to think of the terpene market as a piece of the flavor and fragrance industry, and we're still separated in the cannabis industry while it's not federally illegal. If you're looking in the flavor and fragrance industry, the terpene category is definitely growing than all the other parts in that industry and that industry is growing as well so I'm projecting growth.
Sinead: Yes, absolutely. With Abstrax, I know a few things are under wraps, but what do you guys have on tap for the next couple of years? Any big projects coming up listeners should know about?
Kevin: We have new stuff coming out all the time. One thing we just released this month is a new nude enhancement terpene formulations. To make those, we have the terpenelytics program which is doing all the peer reviewed journals, but then we wanted to take it a step further. We went to a few dispensaries. We had the flower that they're selling to their customers. We have the customers fill out surveys based on the product that they're getting, knowing that we have the terpene profiles for the products that they're getting. Then we collected a ton of data, something like a daily data points or something like that.
We had to write this code, which ended up being like the artificial intelligence code to try and predict the surveys from the terpenes that consumers were experiencing and what isolates would predict what mood state these consumers were having. This code gave us these theoretical formulations. We went ahead and made those formulations. We had some flavors input, of course, we don't want to make that flavor that no one wants to try.
We had adjusted them with our flavors and then we went ahead and we wanted to confirm those results or go back to the drawing board. We held a more organized sensory panel with random participants, with Dr. Avery Gilbert, who's actually this top-tier flavor and fragrance guy. He's in charge of all these sensory panels and everything, so the guy knows how to do it.
We had this organized sensory panel and what happened was that we essentially confirmed that these theoretical formulations you made are actually in part of these mood states that these consumers and these participants have. Now we have that as a total formulation to put under something like a Cloudburst Series so that we can target mood states as well as flavor profiles. I think that's mainly what our customers are coming for. We have a ton of stuff coming out all the time.
Sinead: Yes. That's maybe too broad of a question because there's so many projects and lots of big things ahead. Really excited to see what you guys do but Kevin, before we wrap up here, I love to end the show with a few non-cannabis related questions just to give the listeners a feel for you and the man behind the curtain. First off Kevin, are there any books that have had a big impact on your life or way of thinking you could share with us?
Kevin: Yes. Thanks for asking that. My dad gave me a book recently called Principles by Ray Dalio. He's the world's largest hedge fund manager, I believe. He wrote a pretty good book about, pretty much any instance in life, pretty much can have a protocol for smooth sailing essentially. I'd recommend that book.
Sinead: Oh, that's great. Okay. Yes, that sounds really interesting.
Kevin: I'm going through that right now so that's top of my head.
Sinead: Cool. Very cool. That sounds really fascinating. All right, so next question. I never want to ask what's your favorite band? That's such an impossible question to answer, but what is your favorite music at the moment, or maybe your favorite band that you're going to a lot lately?
Kevin: Yes, I was jamming to Mick Jenkins before we started this call.
Sinead: Oh, nice. Okay, I'm not familiar with them. What kind of music genre is that?
Kevin: It's rap. You should definitely look it up. He's definitely a cannabis enthusiast.
Sinead: Okay. I'll have to look him up. Awesome. Wrapping up here, Kevin, you really have your finger on the pulse with the terpene side of the cannabis industry, but what would you say is one thing going on in the industry right now that might have a big impact over the next few years, but you think it's flying under the radar right now?
Kevin: I think we all got our eyes on federal legalization and how that's going to pan out or what steps that's going to take to happen and who's going to prepare and how. We're all going to prepare if we like to or not, but how are we preparing? That's the biggest thing that I'm looking at every company in the industry with. How are they preparing for federal legalization and how are they going to get affected by that, right? Hopefully, it's not going to be like a shakedown, but we want to prepare for the worst and hope for the best.
Sinead: Absolutely. Yes. That's, as you said, a good rule of thumb for the industry at large so that's a good little piece of advice there too for our listeners. Thank you for that Kevin. Kevin, thank you so much for coming on the show. This has been such a fascinating interview and just really looking forward to seeing what you guys do over the next few years. Thanks again and best of luck to you and Abstrax.
Kevin: Yes, thanks for the opportunity and letting me come on.
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