While hemp is a huge and growing part of the cannabis legalization story, it’s often overlooked.
Here to tell us why we should be paying closer attention to hemp is John Manlove, CEO of Bushel44.
Learn more at https://www.bushel44.com
[00:53] An inside look at Bushel44, a wholesale hemp software platform designed for businesses across the hemp supply chain
[1:51] John’s background and how he got into the hemp space
[4:16] How the hemp industry has evolved over the last few years and where it is right now
[5:53] How different types of businesses from farmers to retailers use Bushel44
[10:35] Key differences between Bushel44 and Leaflink
[14:23] Ways in which the hemp space is developing the same way cannabis did
[21:19] What buyers are looking for when purchasing hemp
[25:23] How Bushel44 is advancing the hemp industry by holding companies to higher standards
[28:10] Why smokable hemp is trending and where John sees it heading
[33:01] Success stories John has seen at Bushel44 and his advice on how hemp companies can maximize the platform
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.
Hemp is a huge and growing part of the cannabis legalization story but often overlooked. Today's guest is here to tell us that hemp has arrived, and he is seeing active trade on his hemp platform. I'm pleased to welcome John Manlove, CEO of Bushel44 to the show. John, welcome to CannaInsider.
John Manlove: Matt, pleasure to be here. Thanks for having me.
Matthew: Give us a sense of geography. Where are you in the world today?
John: I'm in Portland, Oregon. I'm out in the Great Pacific Northwest.
Matthew: Okay, and I'm in Park City, Utah. What is Bushel44 on a high level?
John: Bushel44 is the enterprise-level business management platform specifically designed to address the needs of the wholesale hemp supply chain. We provide everyone within the supply chain from seed to shelf-ready products with a comprehensive platform that essentially allows them to manage every aspect of wholesale from inventory orders, sales, and much more.
Matthew: Whether you're selling or buying anything hemp-related, you can just manage your entire universe on Bushel44. Is that fair?
John: Yes, exactly. We wanted to provide-- Essentially, there's a lot of players in the space, they're creating marketplaces and things, but we really want to provide these businesses with the tools they need, not only to really drive efficiency and streamline operations but even more so connect with buyers in a very meaningful way to essentially just manage every aspect of that side of the business.
Matthew: John, can you give us a bit about your background and journey and how you came to start Bushel44 and what you were doing before?
John: Yes, of course. It's been a pretty wild road. That's probably true for anyone that's been in the spaces as long as I have. At first, I've been a real champion of the cannabis and hemp plant since I was introduced to it in my late teenage years. I've always been interested and intrigued with the space, and of course, as it came legal, even more so.
In 2014, I helped start one of the very first online cannabis marketplaces, wholesale marketplaces called Tradiv. Two college friends had reached out to me and said, "Hey, John, we're going to create the Amazon a cannabis. Come and help us." I left the world of environmental consulting, and I jumped in to help essentially start Tradiv. We were, again, the first online marketplace for wholesale cannabis in the space, then we start in Colorado. I helped launch a distribution company with that company as well in California.
In late 2017, Tradiv fell upon some pretty rough times and self-inflicted hard times that ultimately led to the board of Tradiv decided to shut down the company, which created an opportunity for me and my two cofounders to both the Apex Trading and Bushel44, Rob Fess and Willy Wheeler to offer the industry a new solution. In early 2018, we raised a little bit of initial capital from Vincent family, brought on a small development team in house, and we started building Apex Trading. The vision of Apex Trading was to essentially offer the alternative to the marketplaces. We really wanted to carve out a niche and really offer something unique to the space that was more brand-focused and relationship-focused rather than the marketplaces.
We launched Apex Trading in 2018. Today, we have over 2,400 clients across 11 state markets. For the last year, we had been building Bushel44, a custom-designed hemp platform. For these spaces, it really emerged from the passing of the farm bill. We launched Bushel about two months ago. Now we have both platforms going but the Apex Trading on the cannabis space and the Bushel44 in the hemp industry.
Matthew: Everybody's been hearing that hemp is a big thing and it's coming; it's coming. Where are we right now with hemp in contrast to the last few years?
John: Gosh. Although we're seeing this move and this gradual maturation within hemp, I really think it's still so much in its infancy. The farm bill passed in 2018, but a lot of states-- Strict, even more the federal government, they're still figuring out what the rules and regulations are in this place. We're seeing hemp emerged the forefront of a new industry within agricultural space, and there's a lot of excitement about it. There's still a lot of growing that the space is going to go through.
The last few years, especially since 2018, we've seen massive overproduction and depreciation of pricing. We've seen the lack of standards and regulations, which is making it hard for operators to be able to really function and know what the future of their business might look like. We're seeing a lot of difficulty in connecting this global supply chain. Unlike cannabis, which is this intrastate highly regulated industry, hemp is still this wild west. We're seeing it being traded globally, as well as domestically.
Businesses are still trying to figure out where their niches in the space and how they really scale up their company, whether that's through B2C sales or B2B sales. While this space, there's a lot of excitement about it. It's currently going through some really substantial growing pains, but I still feel like the future is very bright.
Matthew: Just give us an idea of who the participants are in the ecosystem and on the platform and what they're doing day-to-day. What are their business models and their care about?
John: We really tried to take a holistic approach when we developed Bushel44. We really wanted to address every business within the wholesale supply chain. This always starts with the farmers. This starts with the people producing the seeds or the clones or the starts. We're providing those nurseries, the ability to come on and manage their nursery inventory, and then have the sell-through features to the farmers that are purchasing those and then putting those seeds or plants into the ground.
From there, we support the farmer by giving them the tools to allow them to either sell smokeable flower or pre-rolls or manufactured goods that they're producing off of their harvest downstream to retail or distribution, as well as the ability for them to sell that biomass to the processors that they're going to create the oil that goes into these manufactured goods, then it goes to the processor.
We're providing this processor, the ability to both source biomass but then be able to sell downstream the oils or the products that they're producing to the retail. Of course, that product manufacturer, the same thing, be able to buy the bulk oils and turn around and distribute those down to the box. We've really tried to comprehensively build this platform that addresses the entire wholesale supply chain. We're even more excited about the emergence of industrial hemp and being able to provide applications or features to support that really interesting spaces. It really starts to develop as well.
Matthew: It sounds like at the base of the pyramid, you have what you're calling biomass, which is the hemp itself. As you move up, you're starting to see some value-added products, extracted oils. Then what about finish branded products? Are they on there yet, or is that not the appropriate venue for it?
John: No, absolutely not. We are supporting those finished branded products. Everything from health and wellness, topicals, and tinctures, even pet products, the dog treats, and things of that nature; down to even consumable products like pre-rolls or edibles or drinks and things like that. We're also offering the solution for those shelf-ready products, as we like to call them.
The one thing that we're not doing at the current moment though is providing the B2C elements for those shelf-ready products. Unlike in cannabis, where if you're producing a shelf-ready product, say, a sap or a topical of any sort or any finished good, where you have to sell into the retail, and then the retail, then [sound cut] sells to consumer in hemp. These brands can go direct to the consumer. We're not necessarily offering that solution today. We do assume that we will later down the road, but it really is within about B2B space. When it comes to the shelf-ready products, we're really focusing on helping those individuals sell their products into convenience stores, smoke shops, head shops, liquor stores. Wherever that opportunity might lie, we provide them the solution to be able to do those B2B sales.
Matthew: You mentioned you're in eight states right now, and how many different businesses are on the platform?
John: We're pretty excited that we have all products. Everything from the seed all the way to the shelf-ready products and everything in between. Having that we've only launched a few months ago, we have about 30 different sellers on the platform now, and of course, they have all of their buyers they're selling through to. These clients are located across the country in states like Oregon, Washington, California, Texas, New York, Florida; from the east coast all the way to the west coast.
We've even had purchases and sales made into India, Columbia, and we just met with a group out of the Grenadine Islands as well. That's one of these unique opportunities in hemp that it is this global supply chain. While there are limitations and issues with trying to move product into the EU or into certain countries, there's still that opportunity, and that's what's exciting about hemp, and it's specifically Bushel44, it's the ability for us to start connecting the global supply chain and creating those standards and creating market transparency, as a product that's emerging; that's never really been traded on that level before. People are really building the plane as they're flying it, and we're here every step of the way to innovate our product to support their business as they grow.
Matthew: I really want to distinguish between what you're doing here at Bushel44 and something like LeafLink, which is an online cannabis platform. They're more like a marketplace. It's marketplace, but you have more services you offer. I'm thinking of it as a combination of Salesforce, a marketplace, and a workflow all in one. Is that how you would describe it?
John: Yes, absolutely. LeafLink's been around a long time, and they're a successful company. When we looked at that, and we looked at a lot of marketplaces, both within cannabis and within hemp, what we really felt was that the industry was needing something different. You need an alternative to a marketplace. Not every business wants to be on Amazon, some really are craft or want to own that brand experience in that relationship with their buyers rather than potentially sending them to an open marketplace, where they then are exposed to competing products or competing brands, and ultimately, those buyers eyes tend to stray elsewhere, specifically in cannabis and in hemp as well.
A lot of purchasing decisions, they're dictated by potency and price. As a craft producer, as someone that has maybe a higher-priced product, it's hard for them to stand out. What we really wanted to do both with Bushel44 and Apex Trading was offer that alternative to just the marketplace contract. On the back end, we're providing our clients with a ton of Salesforce type tools to allow them to really automate and drive efficiency and streamline their operations. Those are things like, obviously, inventory management that's integrated state tracking systems.
Your order and invoicing system that's tied in with QuickBooks. We have a CRM, we have a marketing tool, we have workflow, and task management. It's a comprehensive business management platform on the back end. When it comes to the actual sales of the product, we wanted to allow our clients to essentially own the buyer experience, that relationship. Their relationship is so key to these businesses, and that's what's really positioned them for success is that piece. What we want to do is put the relationship as to the forefront of what we're trying to offer.
Instead of having to send your buyers to a marketplace, we allow all of our clients build their own custom branded storefronts down to the color palette, the design et cetera, that then they can tailor to each individual buyer down to terms and payments and pricing and discounts because we know it's a very nuanced-type sales model. There's a lot of things that go on and negotiations that have to be accounted for.
Then from there, once you have it set up, you're able to market or send your buyers their custom storefront for them to be ordered through. That keeps the direct model, where they're just clicking in, and they're only experiencing your products and your brand alone. They don't then have the opportunity to come in and start finding other brands and products and compare you two before they purchase from you. We really just want to offer that Shopify to Amazon model in the space. What we found is that, in emerging markets, brand new markets, marketplaces tend to be very attractive because you're just fighting for as many eyes and attention as you can; you want to be in as many areas as possible to try and sell your product.
What we've found now is in these more established markets that are a little bit more mature. Brands, they've really supplanted themselves in the market. People know who they are, they have the buyer base, they have the relationships, they have the sales team that's selling through their product. What they need is a solution that's going to support and drive efficiency amongst the team to really drive ROI internally, and then again, connect with those buyers in that relationship-driven manner because that's more maybe what they're looking for.
Matthew: You mentioned you have a background in the cannabis industry and platforms and marketplaces, what similarities do you see that you're saying, "Oh, this is déjà vu. We're seeing this all over again." That you saw in cannabis, and what did you see that's different? You mentioned that hemp is not fragmented like cannabis is, just locked into a state geography. You can do a lot more globally in different states and even within North America, but what are you seeing again like, "Oh, I've seen this movie before and I know how to take advantage of it and to capitalize on it as an opportunity in the hemp space."
John: I've been fortunate to be in the cannabis space since 2014 with the first adult-use legislation that was passed in Colorado, and I've got to be and support of the industry every step of the way through the growing pains, the good, the bad, and the ugly. The first is in terms of supply and demand, hemp reminds me of the growing pains cannabis went through in the 2014 to 2016, maybe early 2017 in states like Colorado and Oregon, very well-publicized when it came to oversupply.
Just like what we're seeing in hemp today, there was a large influx of producers into those state markets that exceeded the demand at the time and really drove prices down to historical lows, yet now, as we go into late 2020, those markets, supply and demand has leveled out, there's a balance, and we're starting to see those prices remain either in a good price point but also going up. We're not seeing that depreciation of prices. We're seeing the same thing in hemp right now.
With the passing of the Farm Bill, most farmers that have been struggling for so long saw hemp as an opportunity as a cash crop; a way to increase their revenue per acre. There was a large influx of farm, people cultivating hemp. That obviously has driven prices significantly down over the last several years. There's still product in the market from 2018, biomass market from 2018. We're gonna see hemp; that we're going to see some people end up being flushed out of the market just due to you not being able to sustain under the model. We're going to see some growing pains, but it's those businesses that can innovate and stay alive that are going to come out the other side prospering, just like we did-- what we're seeing in cannabis in those states like Colorado and Oregon.
In terms of price and services, the hemp industry still has a lot of catching up to do, but we're already seeing the emergence of new harvest and drying and extraction technologies. We're really seeing a big move in that; we're seeing money come into it. We're seeing those technology themselves when it comes to the production of products really move forward. In terms of platforms like ours, it really reminds me of the early days when we're selling our cannabis platform. These are people that are a little more tech adverse, they're a little more skeptical of what the solution is and what it can provide, and they're going through some internal business struggles.
Taking on something new, like a platform like Bushel44 can sometimes be daunting or intimidating, that's another piece where we're seeing that technology while the hemp industry is investing in and taking advantage of new equipment, extraction, or harvest equipment, things of that nature. There's still a little skeptical around the technology side, and there's still a lot of maturation that needs to happen in that space.
You did mention too that, when you look at cannabis, this is another big difference is that, if you're a producer in a state, you can go and you know exactly what your potential buyer base is. You have a list of all the retail locations in the state, and you can typically mind that information very easily and then start going through a sales and marketing path to close business. You have a very hyper-focused buyer base.
Hemp, it's endless. What we're finding is that the hemp companies themselves, they're still trying to figure out, where is our market niche? Where are our buyers? What is our ideal buyer? There's still a lot of understanding in the supply thing within those businesses themselves to start to get a sense of where their greatest opportunity lies. That's something that these businesses are all working towards and figuring out, as they develop their business models, as they develop their brands and their product lines, and then they start to see is B2C the best move for us, or is B2B the best move for us?
Instead of being a farmer that's trying to do all these different product lines, maybe we just want to cultivate the best biomass of smokeable flour possible. It really reminds me of the early cannabis days where people are doing a lot of things at the wall and trying to figure out what sticks. It's those that have enough maybe financial backing or maybe have established certain sales channels that are going to be able to remain in existence. Some of the other ones are really going to struggle, just like we saw in the early days of cannabis.
Matthew: What's the cost of hemp right now or hemp biomass right now per pound?
John: This question probably isn't as easy as one would think. The first thing to recognize is that there are a lot of factors that go into determining the price of hemp biomass. Obviously, the percent CBD in the product is obviously a huge factor in determining price. Outside of that, it goes down to how it's harvested. What's the state of the material? How was it stored? Maybe it has integrated. When would that harvest day? There's so many factors that go into it. These are things that we capture internally on every product, then you can convey downstream to a buyer.
On a real high level on average, we're seeing hemp biomass for extraction go between 20 cents and $2 per percent of CBD per pound. That's anywhere from $5 to $40 a pound for biomass for extraction. We've even heard of farms that are getting ready to harvest this year that are sitting on thousands of pounds of biomass from last year. They're essentially giving it away. "Just take my biomass so that I have room to store this next year's harvest." Biomass is one of those that has fallen substantially between maybe 50% and 80% from where it was early last year.
Matthew: Is that a difficult thing to acknowledge how the hemp was grown, how it was harvested, the condition of storage? What are most people looking for? Are they looking to buy within the first couple of months of harvest, and they want to see this cured to a certain level? What level of detail are buyers looking for here in general?
John: There's a lot that dictates that. Number one is the buyers of the biomass have to understand the demand, that upstream and downstream demand from their buyers so that they can forecast out production. It's key that if someone's purchasing biomass, they also have to understand what that demand is going to look like downstream so that they can really create the right buy and sell agreements. What we found is that a lot of farmers assumed that when they harvested, the product would sell. The ones that took the opposite approach of going out and finding contracts for their products before it was even harvested are the ones that have been successful.
The key thing, number one, for a farmer to understand is that you should be-- If you are planting product in the ground right now and you don't have buy agreements for that, you should be going out and hustling right now. We provide the tools in Bushel44 to do that. You need to be setting contracts against your product, and really, for future harvests, you need to try and have that contracted so that when the moment you harvest, that product's going to be, obviously, purchased and extracted.
From an extraction standpoint, they always want a fresher product. It's really important for them because hemp, it degrades over time; the CBD percent will fall over time. There's issues and elements with the environment can impact that product quality over time. It's important also for those processors, on the same side, they go out and find the farmers that are producing maybe that cultivar, the genetic that they really need to produce a certain product or that farm that has standards in place, has the lab testing in place, et cetera so that they can really rely on that farmer and a relationship to prosper.
One of the key elements that we're finding in hemp to address some of the issues [unintelligible [00:23:47] today is setting those contracts and understanding, "If I plant X amount of acres, can I actually bring that to market? Is there demand for my product?" Instead of, "Oh, I just planted 100 acres, and I should've done five because now I'm sitting on 95 acres of harvest material that I can't find buyers for." It's very important that both sides of that market understand from the extraction side, "What do my buyers need? How much volume of extracted material of this delay or isolate? Do I need to produce to meet the demand of my buyers today? Where do I feel like the market growth is?" So that you can make the right purchasing of volume.
Not only is the farmer today experienced a lot of downward price tension; the same thing's happening for the labs. We're seeing labs that last year did a lot of splits. Meaning like, "Hey, if you send me a thousand pounds of biomass, I'm going to turn it into these many liters of oil, and then I'll give you half of that back, and I'll take a portion of it as well." So many of them did these agreements, which is attractive to the farm because then they have a product that they can then go out and sell. Then the labs figured out, "Oh my gosh, now we're stockpiling oil, and we don't have the downstream sales for that." Now it's put the labs in a just as tough situation as the farms are in.
Again, there's a lot of maturation in the space to go on that needs to happen. It's tools like ours, system like ours, and some of our partners that we're working with to really try and establish more transparency in the market and give people the solutions they need to be able to make these purchase agreements and be able to, obviously, grow their business appropriately.
Matthew: You mentioned transparency. That's one of the key things that helps buyers buy with confidence sooner rather than later. Are you doing anything to help, specifically, bring that transparency in terms of the barcode scanning, understanding where the product came from, et cetera?
John: Yes, absolutely. Right now, our platform is fully integrated with the Metrc system. Our Apex Trading platform is integrated with it, so it's an easy transition for us to plug that in. In certain states like Oregon, Colorado, other ones, they're starting to see a little bit of a move potentially from hemp companies going on to the Metrc cannabis tracking system to be able to sell through those products into retail or into the cannabis market. That's a first move. If there's a hemp producer that is in a cannabis market or with that state allowing them to open up that piece of the market and sell into the cannabis licenses, we have that solution today with Metrc, which we have all that market transparency or tracking, tracing, scanning, et cetera.
Today, outside of Metrc, we have a very robust inventory management system that allows for a batch lot and fact tracking with CoAs and certifications attached to every product. That helps with some of that. We are internally going to be building our own QR code and barcode system that allows the business to not only a consumer to scan a product to learn and look back at where it originated from all the way back to the farm where the seed was planted and offer that transparency. Internally, we're going to be building a production and processing feature that's going to allow a business, say, an extraction lab, to bring in biomass, invite that farm to the deal. "Hey, I'm going to be turning your biomass into T3 diesel, [unintelligible [00:27:11]."
Right now the farm is just trusting the lab, whether that's an Excel sheet or just getting an e-mail update about where the progress of the order is and what yields are. Our system, what we're going to allow that processor do is actually invite that farmer to the job. They're going to be able to see yields and inputs and outputs. They're going to see where the stage their product is in the extraction. Then they're going to see the final resolution of that product with new testing associated with it. It's going to give ease and peace of mind to the farmer to know that they can trust their lab. It's going to get that lab that ability to really offer their farmers that transparency that they so much long for.
Then from there, as we go through that production, as we go through those processing, and we track that product through when it comes to the end product, we're going to know what oil it originated from, what biomass that came from, and what seed was planted in the ground that produced that biomass. It's something that the industry is longing for, and it's something that we're currently under developing.
Matthew: Let's talk about smokable hemp a little bit. There's this kind of a new and interesting twist in the market place because people are like, "Wait, I want to smoke hemp? Why would I want to do that?" Can you talk about that a little bit?
John: Yes. Pre-cannabis states are like, "Oh, you can't smoke hemp, it will get you sick." I've heard this; seen little memes about it and things. It's not true. Smokable hemp is one of those things that really is emerging to the forefront of this space, and it's interesting. First is the smokable hemp is a form of hemp biomass eggplant that is grown in the ground from a female plant. This is, again, just like your cannabis plant that anyone is buying flower at a retail store. This is a female hemp plant that is producing buds that look like what any of us would see in the photos of a cannabis grow. That's first and foremost.
If you walk into a hemp field that was in full flower and was grown appropriately, you wouldn't know that it's cannabis or hemp. The first is it's going to look the same in a lot of ways. The other thing is, the smokable part of hemp typically comes from the top of the plant. We're not pulling down the bottom parts of the plant that are smaller buds and things. That typically go into extraction. These are the bigger buds, bigger [unintelligible [00:29:27] at the top of the plant. That's where this smokables really emerge. It's an interesting space. What we find with smokable hemp is that it then can be put into your pre-rolls and packaged flower and a lot of other forms that's attractive to people.
We're definitely seeing smokable hemp start to emerge as a focus for a lot of these farmers to maybe diversify their product line a little bit and maybe capitalize at a little bit higher price point also.
Matthew: Interesting. Can farmers create more profit for themselves by selling the smokable hemp? Is that something like if you were a farmer, you'd be like, "Hey, I want to build my specialization around the smokable hemp versus something else I might do?"
John: Yes. Strictly as a sales that looking at a price per pound, the opportunity is greater with smokeable hemp compared to that of biomass. They are getting a higher price, say, between maybe $115, $300 a pound where the biomass was between $5 and $40 a pound. It's important to understand that, yes, there is an opportunity maybe to increase profits when you're selling smokable hemp or you decide to produce smokable hemp. However, the farmer, number one, must secure quality genetics. It all starts with the genetic. You really need to ensure that you're sourcing the right genetics that are going to produce a good quality smokeable hemp.
The other thing is, they have to be very vigilant in their fields. You can't allow a male to just slip by because it's going to seed out all of your smokeable hemp. It's going to have a huge issue there, and you're going to have to then do that in biomass. You can't be selling seeded flowers as smokeable, it just doesn't work. It's very important, number one, that the farmer needs to source quality genetics. They need to know who they're buying from. They need to make sure that they can really trust that nursery. They need to be extremely vigilant. They have to really make sure that they're walking the field and pulling nails as they come up.
The other piece is there is such a higher attention to detail in postproduction. You're not running through and with a combine and harvesting your smokeable hemp. You're going through as your employees, your field staff, and they're coming through in their hand harvesting, and then you're hanging that product. Then you're either running that through a machine and a hand finish or your hand trimming that product. It's postproduction, it's more expensive, and it's more labor-intensive as well.
There is a risk to the farmer if they don't really understand those pieces of exposition sales per success and ensure that they have the infrastructure to properly grow and produce that smokable hemp downstream to sell that product to that consumer. Then there's also some risk; in that states are still banning smokeable hemp. There are still states that are coming out and saying, "We're not going to allow you to have smokeable hemp in our state, and you have to make sure that you're harvesting in times so that your product does not go over that 0.3% threshold."
While there's a great opportunity in smokable hemp, there are risks within production there that the farmer needs to be very cognizant of, and ensure that they, number one, have the process, the infrastructure, and the procedures in place to be able to successfully have that smokable hemp and bring it to market.
Matthew: You've bashed the businesses on your platform, some do things better than others, just like any business or individual, what can you say about the businesses that are more effective on Bushel44 than the ones that are maybe less or so? You could borrow from your cannabis side too. What are some of the best practices you see were like, "Oh, this business gets it. They know how to run a profitable business, and this is how they're engaging on the platform versus one that's not doing it as efficiently or the right way?"
John: Even this sounds simple and it's like, "Oh, duh." For any company to receive the full value of what a company-- what a platform like Apex Trading or Bushel44 provides us, the entire organization needs to be willing to adapt, so they can adopt and get the value out of it. Change comes hard, especially in a space like cannabis or hemp where were these pioneers. We've always gotten the short end of the stick. We tend to put a lot of things on our own shoulders. If it ain't broke, don't fix it. I feel like you got to fix it term.
When I look at is this, not only does this mean working with our team through the onboarding and training process and really ensuring that you understand these features and how they can be leveraged for your company to receive the most value but also means working the sellers themselves, working with their clients or their buyers so that those buyers are comfortable transitioning to online ordering. So much has been done in person up to date. COVID is helping shift that paradigm a little bit as well, but that ability of a retailer or a purchaser to be comfortable purchasing online is new in this space, and it's ever evolving.
Every single client that adopted our platform fully has received tenfold what the cost of the subscription is. We've had many clients credit us for either saving their business or allowing them to expand their market footprint. I was just talking to a farmer down in southern Oregon. This individual, we speak with him about his upcoming harvest in the summer season and how things are going, and he really expanded his canopy. He told us, and this was an antidote that I just love because guys, I've sold two and a $2.5 million to your platform. I don't even have a sales team.
I bought in, I listened to you, I adopted the tools, I worked with my buyers to understand how I wanted to do a decision, how this is going to benefit my business, as well as benefit them. They bought into it because the system is so easy to use that he's like like, "Now I've expanded my grow based on demand, and I still don't have to have that sales team or that sales staff." While I am a champion of as many staff and employment in cannabis as possible, I also understand that profitability for a company is obviously the key important factor there. If we can allow a business to come in and streamline their operations and cut internal staffing costs or allow those staff members to go out and build greater market share or more relationships with buyers, that's what it's all about.
For us, it's really important that we understand change comes hard. We're here every step of the way to support our clients, but they have to be willing to adapt their business. They have to be willing to buy into that change to receive the utmost value of what we offer. We have a lot of clients that still love the platform and they use it, but they don't necessarily utilize it fully within their business. They haven't necessarily used all the tools, and they're doing still manual processes that ultimately, they're still receiving the value, and they're happy with the service we provide, but we still feel there's a lot of opportunity within those businesses to cut costs and improve efficiency. We have the tools to do that. We're constantly working with our clients to move that ball forward.
Matthew: Let's talk about the way that Bushel44 makes money. Your software as a service, can you talk about the subscription model, and how much that costs, and what to expect there?
John: Yes, absolutely. We have three pricing models currently for Bushel44. Our first model is called Pay-as-you-grow. I created pay-as-you-grow as really the farm-friendly pricing model. We've talked about in this podcast already about how these farmers are struggling. They're sitting on a lot of product from last year. They need to find more buyers, and they're just trying to stay alive. That's a common theme when I talk to this, so I'm just trying to stay alive.
When I looked at that as being a plant first very champion of the plant and what the benefits can be, and really, the individuals who have really pioneered this space, I wanted to create a model that was supportive of the farmer that was struggling. Our pay-as-you-grow model is a result-based model. These clients come on, they pay a small activation fee, onboarding fee to get set up. From there, they don't pay monthly subscriptions. They pay 2% on transaction sales, and they pay $25 for every lead that they get through our platform. It's a result-based model, say, "Hey, if you don't have buyers, if you need help, come join our platform. We'll do everything we can to try and thrive your value. Don't just pay us based on results that you receive."
Now, outside of that, if you're a business that says, "Hey, I really need the CRM. I really need these tools. I have sales channels established, but I need the platform to really help sustain and manage like this." We have a small business package which is $249 a month, and then we have an enterprise package which is $499 a month. Those are determined based on the number of locations or production or farms that that business has, the amount of users that they have, and then the amount of brands that they have. Really, it's just a fairly affordable monthly subscription model to really address both the person who doesn't have sales who needs help, the individuals that have small business growing, and then, of course, those enterprise businesses that are maybe in multiple states or in multiple countries.
Matthew: You mentioned a little bit about where you raised money from friends and family, but where are you in the capital-raising process now?
John: To date, we've closed our friends and family and initial seed round of funding. We raised about $2.8 million in October of last year. That's allowed us to achieve some product-market fit and scale our business and build a great team around the platform and to support our community of clients. We are though gearing up for our series a capital raise, the end of this year or early next year. This raise will be almost entirely growth capital. Now that we've really built the tech out, we've established product-market fit. We really have an understanding of where we need to take the platform. This new raise is really going to be used for investing in sales and marketing the infrastructure to grow both domestically within both hemp and cannabis but then internationally as well.
Matthew: For accredited investors that are listening, can they reach out to you if they want to participate in the [unintelligible [00:40:14]?
John: Absolutely, via e-mail or phone, and I'm sure we can provide that.
Matthew: We can get that at the end. No problem. You went through the capital or the CanopyBoulder Accelerator Program. Can you talk about that a little bit?
John: Yes, I actually went through the Accelerator Program with Tradiv. In 2014, we were part of the CanopyBoulder Accelerator Program. We were their initial class. The very first class that went through the accelerator, and it's a great experience. I still work very closely with both-- [unintelligible [00:40:48] is one of the original founders there and then Patrick Rea, who currently; obviously runs Canopy. Patrick, the CanopyBoulder, they have invested in Apex Trading. While we didn't go through the accelerator, they did invest in us, and Patrick is on my advisory committee as well.
When I look at the CanopyBoulder experience, it's been great. Not only from a mentorship standpoint of someone who's wanting to jump into cannabis or hemp, they obviously have been in the space a long time. They've invested in a lot of companies. They understand the market really well, and they surrounded themselves with really great advisors and mentors. If you're a business looking to potentially jump into cannabis or happen to have a great idea, and you're looking for that mentorship, then CanopyBoulder is definitely something to consider. Post the accelerator, both Mike and Patrick have been very supportive of me both personally and professionally. I have a great relationship with them and have nothing but great things to say.
Matthew: Let's go to some personal development questions here, John, is there a book that's had a big impact on your life or your way of thinking that you'd like to share?
John: Oh my gosh. I don't get to read as much as I used to, but there's several books that I've read recently. Jimmy Carter's autobiography, I thought was great. When we look at what's going on today with some of these social movements and things that are much needed, I've really I thought his autobiography was great. It has some real-world lessons that all of us could learn from.
When you think about a novel; I love novels. Sometimes I really want to get out of the space of get into fictional a little bit. I love the book Shantaram. If you haven't read the book Shantaram, it's a great story. The writing is just absolutely just mesmerizing and paints a beautiful picture. If you've ever been to India or you want to go to India, it's just an amazing book. It really addresses everything that people go through in life. There's a lot of lessons that could be learned from that from a lot of different viewpoints. I love Shantaram.
Then from a business standpoint, one of the books I'm reading right now is The Customer Centricity Playbook. This is really talking about customer lifetime value. It's really analyzing where your greatest opportunities lie and really knowing how to analyze your cohort or your clients to really understand, number one, how you can better service them, but then how do identify those gems within the prospects and remain in focus. From an autobiography, you got that from that novel and then, of course, from business. I always tell the team like, "Let's be a sponge." I always love being introduced to new books and obviously diving into those when time permits.
Matthew: Is there a tool that you or your team used that you consider really valuable to your productivity?
John: Yes, we could talk about a lot of things. Oh gosh, we use HubSpot to CRM. We use Slack as a communication tool. There's all of these pieces of software that are vital to our business, but when I think about this, and especially, in the day and age we're in today, it sounds dumb. Communication, I cannot stress enough when we think about how routine meetings are vital, especially in what's going on, and there's so many stresses going on, but what we've really pivoted to you are informal meetings as a team. Our entire team has a monthly virtual happy hour where each of us will grab our favorite drink or maybe your favorite smoke or whatever it might be and we get to know each other personally.
We talk about what's going on in the world, maybe outside of just business, where we're all we live so much day-to-day, and we get to know each other on that personal level. Start-ups are hard. Life is hard. Being able to have these types of meetings and take the business hat off a little bit and get to know each other on another level allows my team to know that I'm here for them, whether that's a professional and in business or in personal life and that they know that each one of them is here for each other. That's core to our ethos as a company.
Ultimately, it leads to a high degree of accountability, productivity, and buy-in from the team and that, of course, then flows downstream to our clients. What we like to say is we're building our family. This is our Apex Trading family. This is our Bushel44 family. That's the way you look at it. Not just us, our team, but our clients as well. In this day and age where there's so many different tools that people are using and things, sometimes coming back to the basics of really good effective communication in meetings and knowing that we're here for each other, it's been so vital for us. It's allowed us to really deal with the ebbs and flows of what's currently going on in society and everything else and politically to remain focused, but then also, know that we're here to support each other.
Matthew: What do you think is going to happen here with these Portland uprisings and riots and so forth? I can see why people need a few drinks or they need their favorite cannabis product, just to chill out a little bit being there in Portland. Does it seem like it's calming down a little bit, or is it still quite a serious situation?
John: Yes, when you look at Portland, Oregon, it's always been a city that champions a voice. We're always some of the first to go out and protest or do things. That's part of the culture here. I do think that the news portrays the city as it's on fire, which is not true. It's really isolated. A lot of what's happening is isolated to specific areas of the city. It's maybe not as it's portrayed sometimes on the mass media. I do feel that the city itself needs to look itself in the mirror as far as leadership, and they need to take appropriate action.
The public is going to hold them accountable, and there will be some referendums on decisions that they've made or an action that they've taken. That's not only going to be happening in cities or states like Portland, Oregon, but also hopefully, other states can add a federal level as well. The city has calmed down a little, but rightfully, so there's still people out there that need to have their voices heard. The government and the local organizations, they need to listen to these people, they need to respect their right for peaceful protest.
I don't think there's any room for violence and/nor do I think that that's beneficial to the cause? I do feel like the city is starting to listen. I hope that then we're going to see actual change happen. Oregon itself has some deep-rooted history that I don't think people are necessarily proud of. Culturally, a large portion of states looking to make changes for the better and that ultimately, our governments need to take the appropriate action and listen to the people that are out on the streets because they have valid concerns, and these things need to be addressed.
Matthew: Here's a Peter teal question here before we close. What's one thought that you have, that you believed to be true that most people disagree with you on?
John: Gosh, I don't know if most people would disagree with me on this, but in such a polarized political world where tend to point the finger at a president or a leader about what's happening, especially now in COVID. No, I'm not going to get into it, but I feel like your individual success, it's not dependent upon who the president is or the leader in your state, and while conditions you're born into can have some influence and that obviously, there's a lot of social things that need to be addressed to really make it a fair playing field for people.
I believe that each one of us has the ability to create our own destiny. If you want it bad enough, and you're willing to work for it hard enough, you can achieve it. I don't like pointing fingers. I don't like passing the blame or shifting the blame to other people. I like to own it. I believe that if each one of us may be looked ourselves in the mirror like that, we would know that there's things that we can change for the better that ultimately would lead to greater success. That would be my piece there. Some would agree and some might disagree.
Matthew: John as we close, how can businesses that are interested in getting on your platform learn more, whether they're selling or buying hemp products, and also, how could the accredited investors that are interested in your next round connect with you?
John: If you're interested in learning more about our [unintelligible [00:50:17] platform, you can go to bushel44.com; there's a lot of information there. There's contact information there as well. Either you can go that route, or it's same with investors. Feel free to reach out to me @john. J-O-H-N@bushel44.com, and of course, my phone number is 971-4076-898. Encourage anyone with questions as well to feel free to reach out to me via my personal number.
Matthew: Can they just text you emojis if they want to?
John: I encourage emojis, absolutely. Let's keep it real. Let's keep it fresh. We're in this new digital age, and we want to hop on, and I'll even FaceTime with them if they want. Yes, of course, anyway that anyone would like to reach me and keep it unique, keep it fresh; put a smile on my face, and I'll try and do the same.
Matthew: All right. John, thanks so much for coming on the show. All the best to you with Apex Trading and Bushel44, you're a busy guy, and I appreciate you coming on. Hopefully, you can come back on in a little while, and tell us how things are going in the hemp world.
John: Matt, thank you so much for having me. It was a pleasure and stay well.
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