As overproduction of cannabis swamps some markets savvy entrepreneurs like Nicole Smith are digging in and focusing on creating value for their customers. Learn how Nicole is leading the charge at Evolab making the highest quality custom extraction and terpene creations.
– Overproduction in the Cannabis market
– Waiting for California to settle down
– New entrants making collaboration and camaraderie harder
– The competitive dynamics of vape cartridges
What are the 5 trends disrupting the cannabis industry?
Find out with this free cheat sheet at
Matthew: Today, we're going to hear from an entrepreneur that is differentiating her offering of cannabis-related products as consumers want more customization of their experience. I'm pleased to welcome Nicole Smith of Evolab to the show today. Nicole, welcome back to CannaInsider.
Nicole: Thank you so much for having me.
Matthew: Give us a sense of geography. Where are you in the world today?
Nicole: I am in Denver, Colorado today.
Matthew: Okay. And what is Evolab?
Nicole: Evolab is a pioneer of advanced extraction and processing technologies. They have been leading the development of pure and potent cannabis products for nearly a decade. And continuing on that, they recently launched CBx Sciences, which is a full line of products beyond vape that combine a variety of additional cannabinoids.
Matthew: Okay. I wanna dig into that. But just tell us a little bit about your transition from being the CEO of Mary's Medicinals since the last time you were on here to now going over to Evolab.
Nicole: Yeah. I was really excited to be approached by Evolab and asked to help them take the new brand, CBx Sciences, and those products to market, which is definitely in my sweet spot of cannabis medicine, which is a broad array of cannabinoids with other botanical elements.
Matthew: Now, I want to jump in, as I mentioned, into Evolab, but I think we need to do a little education here first. Everybody's familiar with CBD, but can you talk about some of the other cannabinoids that are gaining popularity and that you're working with so people can get a sense of what maybe CBN and CBG are and why you're using them?
Nicole: Yeah, of course. So we've always worked with the acidic versions of the cannabinoids, THCA and CBDA. Where applicable, they tend to have greater skin permeability and greater effect when applied topically. We, of course, use CBD, but then CBN as a muscle relaxant and also to help promote sleep. And CBG studies have shown that to be effective in not only in anti-inflammatory but also anti-microbial and anti-bacterial properties.
Matthew: Okay. So one of the anomalies with CBD is that it doesn't always respond to cannabinoid receptors. So CBG is, kind of, jumping in to fill that gap. Is that what I'm understanding?
Nicole: To some degree, yes. I mean, all of the cannabinoids tend to operate on different cannabinoid receptors or, in some cases, different receptors in the body altogether like the TRPV receptor, which is what CBD now is really being studied for in addressing pain.
Matthew: Okay. And I wanna dig into the extraction a little bit because to get these, kind of, outcomes that you have with cannabinoids and this customization that you're going for, you really have to know what you're doing with the extraction. Can you just tell us a little bit about the extraction operation and how you think about extraction?
Nicole: Yeah. As I mentioned, you know, Evolab is truly a pioneer in the industry. I don't know many companies with nearly a decade of experience and specifically in CO2 extraction. So we use CO2 to not only extract our cannabinoids and our important cannabis oils, but also to take the terpene profile from the plant off in the beginning of the process. And additionally, one of the things that makes this unique is that we also use other parts of the cannabis plant that we extract as our cutting agent or what we call our cannabis-derived cutting agent so that when we make our vape products, we're only putting cannabis in the cart.
Matthew: Okay. So let's just kinda run through all the things you're doing at Evolab. Can you tell us what FreshTerps are and why they're important?
Nicole: Yeah. FreshTerps is really the example or the epitome of what we really can do as a company. It's pulling that strain-specific profile off of the plant and offering that as a dabable product or somebody could add that maybe to a joint or something else, but it really is that key to what we do, which is take that strain profile off first.
Matthew: Okay. So if I were to take some FreshTerps and then just kinda dip some onto a joint before rolling it, what kind of experiences could I expect?
Nicole: Yeah, you're gonna get a really in-depth flavor profile. And you will influence whatever you're smoking to the direction of the strain that you selected in FreshTerps.
Matthew: Okay. So with FreshTerps is how do I kinda select my sensation? Does it go by terpenes like limonene or myrcene or does it go by kinda mood or how do you kind gauge what you're gonna experience?
Nicole: Yeah. So that's interesting. FreshTerps is really considered a connoisseur product. And so we don't do as much education in selecting the product, per se. We just leave it up to the connoisseur to select the strain of choice or flavor profile of choice.
Matthew: Okay. And what about Alchemy? What's that?
Nicole: So Alchemy is our premium cannabis oil with FreshTerps in our vape products.
Matthew: Okay. And how do you see people using that? What's important to know about that?
Nicole: Alchemy, again, the differentiator is that it's strain-specific. And, again, like I said, nothing but cannabis in the cartridge. It's a premium CO2 oil, very potent, very flavorful, and, just again, a great all-around vape product. I would really like to see more people smoking Alchemy than anything else, to be honest.
Matthew: So you kinda hit on a point there. You're saying it's pure cannabis oil. You know, with a vape cartridge or vape pen, there has to be some, like, a homogenous liquid that has some sort of viscosity so you can get over the atomizer and have the atomizer, you know, vaporize this. So how do you get the cannabis oil to be viscous in the right way so you have a good experience vaping? How does that work?
Nicole: Yeah. So that's one of the amazing things that Evolab has, again, pioneered, which is using only the cannabis plant. So we use a combination of terpenes and sequester terpenes that are derived from the plant extraction itself, to make our own proprietary cutting agent that we call CDCA. And that's what we use to create that viscosity as opposed to other cutting agents like PG or VG or even purchased terpenes.
Matthew: Okay. So that's very interesting. I see the market is somewhat moving to that way. So propylene glycol has, kind of, been the standard de facto for a long time, and it's somewhat controversial. Some people say it's nothing to worry about. Other people say it is something to worry about, but I think everybody would like to see us go to a natural solution. Is your cutting agent then, the natural terpenes? Does it allow it to be more liquid or is it more syrupy so you are getting something natural, but it's a little bit more syrupy, and it's maybe hard to move around or is it just as viscous as propylene glycol cutting agent?
Nicole: Yeah. So we work very hard to make sure that the product is viscous, but we also have worked to custom design our hardware to support the viscosity of the oil in the cart.
Matthew: Okay. And do you get any kind of feedback from the people using the cartridge and what they're saying? Are these high-end connoisseurs who are really into this or they're just casual users or is it kinda run the gamut?
Nicole: It really runs the gamut. I think it certainly depends on the type of product. So, of course, we make a Chroma, which is our base cannabis oil without the strain-specific terpenes, which is one of our most popular products, but then we also produce a colors product, which is with naturally-derived fruit flavors, which is the only exception to our only cannabis in the cart rule. And across that board, we really cater to the entire vape market with one type of product or another.
Matthew: And when you're developing these products, are you talking with dispensary owners or customers or are you really kinda doing the Apple computer model and you're just scratching your own itch, creating something that will delight you? Where does it kinda fall?
Nicole: No, absolutely. We definitely poll our consumers and our store managers and budtenders and store owners for feedback continually to help in the development process. And, of course, you know, our own product development team works, you know, very hard to make sure that it's a product, first and foremost, that they think they would appreciate. But yes, we definitely make sure that it's something that we know our consumers will appreciate. And we always take feedback in helping to make even better products.
Matthew: So when you go from concept then to finished product, there's some steps in between there. Are you showing people your target market like, "Hey, what do you think of this? What do you think of this now? What do you think of this now," or do you kinda take the initial feedback and then create a prototype and ask them what they think or what does that look like? I ask this because you're very savvy at marketing. And I don't think there's a lot of mistakes going on here. There's definitely a plan that looks very polished when you're done with it. And I'm just trying to understand how you arrive at it.
Nicole: Yeah. We certainly start with discussion, you know, and conversation and then we concept out the products. We test them internally. Of course, our employees make a great beta test group. And we have, you know, over 50 of them now. So that gives us a nice built-in test base. And if we can get them past the first couple of rounds of prototyping to something that we all collectively as a company feel strongly about, then yes, we'll take the prototypes out into the market and test them with family and friends and, as you mentioned, store owners and other people in the industry. And if at that point we feel that the product is strong, then yes, we put that marketing engine to work and create all of the collateral needed to launch the new product.
Matthew: And then in terms of coming up with a price point, how do you arrive at that? I mean, how sensitive is this market for vape cartridges and oils? I mean, you have a unique selling proposition here in terms of what you're doing with the natural cannabis oil blends and kinda the terpene profiles and such, but how do you arrive at the price points? Do you go for a little bit higher end or do you just try and get to the base of the pyramid of as many customers as possible? How do you think about it?
Nicole: Yeah, we definitely don't use situations like that to determine pricing. We tend to use the cost of goods that goes into the cart and then, you know, the margin so the company survives. Really we're basing products and pricing to suit as many people as possible. As you know, it's a highly competitive market. Vape is the most competitive market, but I've never believed in price gouging, but I also believe in supporting the industry. And companies that tend to just try to feed at the bottom of the barrel in order to build a customer base don't last in the industry very long either. So pricing is definitely a very strategic play in the industry because you have to stay healthy as an organization, but you also have to support your customers and your patients and ensure that they are getting high-quality products at an affordable price.
Matthew: How about Ihit? What is Ihit?
Nicole: Ihit is our disposable vape hardware. So it's a 250-milligram disposable product that doesn't need recharged.
Matthew: Okay. And it comes charged already. So you're ready to go.
Nicole: Yeah. You're ready to go.
Matthew: And in terms of popularity, which is the most popular of these? Is the Ihit the most popular, the Alchemy, the FreshTerps? Where does it all lie?
Nicole: So Chroma, which is our standard 80% THC cart, is still by far our flagship product. And in terms of hardware, our folks still tend to lean towards the 500-milligram carts.
Matthew: Okay. And why do you think there's such a big focus on terpenes right now? I talk about terpenes a lot, but what's your take on terpenes?
Nicole: I think terpenes are just very understudied. Again, as the cannabis industry is evolving, of course, cannabis and cannabinoids have continued to be studied, but terpenes are still very nascent. And what we do know is that they're the building blocks of cannabinoids. And as that, we know that there's a benefit to the terpenes that is just really uncovered. Some people talk about entourage effect and some of these other things, which I think terpenes play a critical role. But what we do know is things like beta-caryophyllene not only is a terpene, but also is a CB1 antagonist or an axis [SP] cannabinoid I should say, right?
Matthew: Okay. And why is that important for someone that's not familiar with some of those terms?
Nicole: It's important because it's increasing the efficacy of the medicine or the cannabis medicine that they're consuming.
Matthew: Okay. Now the vape cartridge, I, kind of, stuck on this topic because if you would look at, let's say, BDS analytics or some of these dispensary data companies, the vape cartridge is such a huge part of it, not only from the profit piece, but also in California, which is now we're starting to get data. And there's just so much vape cartridge sales that it's amazing. And when I think where we were just a couple of years ago and where we are now, it makes me wonder where are we going? I mean, where do you think the vape cartridge market's gonna be two years from now because two years ago, it was just like propylene glycol. There was very few companies that were saying, "Oh, you can use terpenes as cutting agents and you don't need the propylene glycol." And it's really evolved into a much more natural vape cartridge or at least having those options. So where do we go from here?
Nicole: Yeah. I think quite simply it's just much higher consumer standards. I think that customers just aren't going to tolerate low quality or plastics or cutting agents anymore. I think as the industry is evolving and products are becoming better, I also think that customers are becoming more educated and making smarter choices, as well.
Matthew: Yeah. I don't know if the market's there yet. Maybe you can tell me, but, you know, when I drink a Coca-Cola, I know it's like exactly the same every time no matter where I am in the world. It tastes exactly the same. How far away do you think we are from just getting that just completely dialed in where the experience is 100% identical with no variance from time to time?
Nicole: You know, I think we're gonna be a ways away from that. First and foremost, I mean, it's very difficult, as you know or as I know, to make a product in multiple states that you can't, you know, transport across state lines to have manufacturing in multiple facilities or multiple states. It's certainly a challenge, although we've been working to actually be able to make things like our cannabis drive cutting agent and some of our technologies available to other places to ensure quality products or the same type of product is being produced in different states.
Matthew: Now, I was just reading this past week that it's by some estimates in Oregon that they think there is gonna be three times as much cannabis produced as the market demands. And as we start to see some of these distortions of a market coming into the public for the first time, it's really important to have a sharp edge as an entrepreneur and do something differently because I was worried about what's happening now starting to happen in terms of people that are just 'me too' entrepreneurs. They're not doing anything different. All of a sudden, they're finding themselves lowering their price, lowering their price, because they don't have a unique offering. And it's no fun to be the in that position, to have no margin. So how do you think about this as you look and see what's happening in the cannabis marketplace and how to be different because you're always, kind of, trying new things and novel approaches? I mean, are you starting to look at markets and see overproduction and maybe too many entrepreneurs come in where there might be a flush-out? And how do you generally think about this?
Nicole: Yeah. I mean, certainly in terms of cultivation, we predicted this happening, you know, many years ago, as we saw that that was really everybody's first place, you know, or first thought is, "I'm gonna get in the cannabis industry and I'm going to grow cannabis." And so there's been a lot of investment, particularly in cultivation. So we do see that overproduction. I do think that productization is truly the way that cannabis entrepreneurs will win in the industry. So yes, unique formulations and novel products and meeting the demands of the cannabis consumer will always reign supreme in that arena, but certainly, yes, there is a ton of competition. It is very difficult for companies to weigh out folks that are willing to price gouge essentially, or not price gouge, but flood the market with an expensive product simply to stay alive. But the reality is those companies just won't be there much longer. And companies like ours, like I said, nearly a decade in the industry, continue to be the mainstay for customers. And, you know, we look to continue to do that. But yes, it certainly is a problem. And it is something I think that just time will really start to adjust and level out.
Matthew: Yeah. And where can people buy Evolab products now, Alchemy and Chroma and Colors and Ihit?
Nicole: Yeah. Right now, just in Colorado. And you can find all of the products or where they're being sold on our website at evolab.com.
Matthew: Now, when you look at California and it's just such a big market, do you have any general thoughts about it in terms of what's going on there and you're looking at it? And how do you compare and contrast it to Colorado?
Nicole: I think that it's chaos, to be honest. And I think that it would be...I don't even think it's organized chaos at the moment. I think that it will be quite a while before that market finds its level. And I think that there's an immense amount of competition that, like we were just discussing, is going to strangle each other out over the coming years here for sure.
Matthew: And one thing I've noticed is that when the industry was much smaller and, kind of, raging against the man or the government that was making it illegal, there was kind of this Kumbaya. Everybody was in arms together working to create this industry. But now, it seems a little bit like it's turning into a more competitive model where once was like, "Hey, this was a friendly collaboration in this community," I'm seeing... I wouldn't say anybody's unfriendly, but it's getting more competitive is my observation. Do you see that at all or is it just me?
Nicole: No, it's certainly become more competitive. I would say that what I would call industry pioneers or folks that have been in the industry for many years still have that sense of friendly collaboration, which is nice, but certainly as new folks come in and new money and outside companies and I think also folks that don't have maybe the same understanding or longevity, there certainly is a cut-throat competition there.
Matthew: Okay. Let's pivot to some personal development questions, Nicole. I wanna ask you some questions that would help listeners get a better sense of who you are personally. With that, is there a book that has had a big impact on your life or your way of thinking that you'd like to share?
Nicole: I think probably one of the biggest is, "The Emperor Wears No Clothes."
Matthew: Okay. And why is that?
Nicole: I think certainly it was one of the first books I read as I was investigating and getting into the cannabis industry. And, of course, really understanding why cannabis was made illegal in the first place is definitely a very motivating factor to wanna work against that corruption that made it illegal in the first place.
Matthew: Now, who wrote that book? I think I know, but I'm trying to remember.
Nicole: Jack Herer.
Matthew: Right. Right. That's right. Jack Herer, a famous kinda activist.
Matthew: Yeah. And how about...is there a tool, web-based or otherwise, that you consider vital to your productivity?
Nicole: Oh, my gosh. We've integrated so many in the last few months, but I think probably for just team collaboration, we do almost everything on Basecamp nowadays. We don't send any internal company email. Everything all goes through this collaboration tool called Basecamp.
Matthew: That's a great tool. I'm also big fans of the founders, David Heinemeier Hansson and Jason Fried. They have a great book called "Rework" about how they work, which is really incredible, those two. So I would also suggest that. So that's really cool. Now, you always seem like you've got so much going on, so much you're trying to do and accomplish in such a short period of time. Any advice on how to stay sane and keep your priorities straight and, you know, have fun along the way?
Nicole: You know, I think what was successful for me and it probably isn't for everyone is I've just figured out how to integrate work basically into everything I do, right? I don't try to box work hours or when I, you know, accomplish things into a set timeframe of the day. I just, kind of, allow those things to happen. I find, you know, inspiration maybe early in the morning or very late at night, but I find if I just continually am open to just getting things done, then everything seems to find its own balance.
Matthew: Well, Nicole, as we close, how can listeners find Evolab online and in dispensaries?
Nicole: Yeah, of course. So www.evolab.com. Of course, E-V-O-L-A-B .com.
Matthew: Great. Well, thanks so much for coming on the show and educating us Nicole. And we wish you all the best.
Nicole: Thank you so much.