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Vegas Grower Uses Math and Science to Optimize His Grow Room

kurtis johnson cannabis grow

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

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

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Read Full Transcript

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

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

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

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

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

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

Matthew: It's not always, yes.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Kurtis: B-R-I-X.

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

Kurtis: Ssure.

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

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

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

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

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

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

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

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

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

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

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

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

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

Matthew: Definitely.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Neal McQueeney Midway Dispensary

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

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

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

 

Important:

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

The Cannabis Business Conference Where Everybody Will Be

cassandra farrington

Cassandra Farrington is the CEO of Marijuana Business Daily. It’s no exaggeration that everybody in the industry will be at this conference. Listen in to hear what you’ll learn, who you will rub shoulders with and how this conference can help your business grow.

Get $50 off your registration at:

mjbizconference.com/

use coupon code cannainsider50
in the next days and get an additional $50 of your ticket

Key Takeaways:
[1:22] – What is Marijuana Business Daily
[2:04] – Cassandra’s background
[5:20] – How has the Marijuana Business Conference grown
[9:24] – Cassandra reveals the keynote for this year
[11:42] – Cassandra talks about irrational exuberant areas in the space
[15:44] – Getting the most out of the Marijuana Business Conference
18.24 – Strategies for exhibitors
[20:30] – Cassandra talks about designing booths
[22:05] – Taking the conference’s crash course
[24:25] – Cassandra asks some personal development questions

 

 

Read Full Transcript

Are you looking to understand the cannabis business more, network and socialize with other cannabis business professionals and grow your business, the you’ll want to know about the largest cannabis business conference coming up in Las Vegas this November. Here to tell us about it is Cassandra Farrington, CEO of Marijuana Business Daily. Cassandra, welcome to CannaInsider.

Cassandra: Thank you so much Matt. I’m really glad to be here.

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

Cassandra: I am luckily at my home base, in my office in the Denver area. I have been on the road non-stop it feels like for about six weeks, and I’m glad to be kind of anchoring down for a few weeks before the big show hits in November.

Matthew: Yes, it is, it’s a very consistently nice weather. I really like it. What is Marijuana Business Daily? I think almost everybody in the industry probably gets your emails at this point, but for the people that are new that don’t, just tell us what Marijuana Business Daily is.

Cassandra: Sure, so Marijuana Business Daily is effectively the Wall Street Journal resource for and about the cannabis industry. It is a completely business focused and B2B tool that the industry has relied on for many years to just understand the development, the opportunities, the risks, the threats, the regulations, the changing business landscape as the cannabis industry has developed over the last several years.

Matthew: Yeah the threats, it seems like there’s more threats than anything these day, so I’m glad you cover those. What is your background? How did you get into this business, and maybe you could talk a little bit about Ann Holland, to give people a sense of context.

Cassandra: Absolutely. My business partner, Ann and I, are business to business media veterans. We both worked together at a newsletter publisher back in the day completely on the business to business side. So, it was an industry where, back in the day again, paper newsletters that you may have a 1,000 subscribers for your newsletter product, but you charge a $1,000 a year, it would be a very high end, really targeted publication to a very niche audience and you had a nice little business model there. You string three or four of those things together in the airline industry. Had different niches within that and roll it up under a common sales team or common publisher and you’d have a great business model.

That is what we set out to do, not in cannabis, but just in business overall and to translate that to the web. As we were looking for new things to launch into back in 2011, we noted here in Denver the emerging dispensary market specifically. Thought, well there’s a group of people who had a growing industry, who are figuring this out day-by-day. We can put together business resources for that group of people and help them do their jobs better and help them grow their businesses quicker. So, we set out to do that and everything else has followed from that method of idea.

Matthew: I actually followed your business partner Ann when she ran, I think, What Runs Where or Which Test One.

Cassandra: Which Test One. Exactly. Which Test One was one Ann Holland Ventures, so mine and Ann’s, one of our other launches that we had before we came into the cannabis space, and that was all about A/B testing in marketing circumstances. We had another one that was all about how to harness subscription website more effectively. So, think about pay walls or fan club websites, this transition to paid news on the web, those sorts of things. That was another industry we covered. Like I said, the cannabis space was our third. Let’s see what’s happening over there.

As this has grown, we’ve actually divested both Which Test One and Subscription Insider. They’re both off to better homes now. We unfortunately just couldn’t keep up and give those products and business lines the attention and love they deserved to be able to flourish themselves, while we were also doing this, because the cannabis space, as you know Matt, has just continued to explode.

Matthew: It has. Gosh, I was at your last conference and I just was shocked how big it had become. I had gone in 2014 in Las Vegas at the Rio, and it was a nice size then, but this last year in Vegas it was like a Guns and Roses concert. There were so many people. Not the same motif as a Guns and Roses concert, but the size of it. It was unbelievable, the floor and the exhibition, and we’ll get into that in a minute. Maybe you can tell us how large the conference was and how it’s progressed in the size to where it is now.

Cassandra: Our last event we had to stop allowing people to register when we hit 11,000 people, just right above that number. That was due to fire code at the Rio where the event was held last year. As you said, you were there, it was just wall to wall. We were getting to a point where people were just not comfortable in the space, and of course we want to make sure the people who are there harbor the experience. So, we did decide to limit registrations at that point. We’re moving this year to the Las Vegas convention center. So, not concerned about being able to let everybody who wants to participate come in the door and check out the show floor.

The show floor is also going to be significantly larger than it was last year. You mentioned, last year it was expansive and we had it in two different halls at the venue where we were at last year. We’re all under one roof this year, but we’re taking over the north halls of the convention center. There’s going to be 650+ exhibitors on the show floor with everything from grow lights to HVAC systems, to greenhouse construction. On the retail side from tracking systems to retail displays and design services on the extraction side. Infused products, everything from packaging to extraction machines and testing equipment. It’s going to be the full ecosystem of everything that goes into creating an end user product with cannabis material. Everything is going to be right there on that show floor.

Matthew: How would you say the conference is unique? One thing I’ve noticed is you execute very well. You have all the details taken care of. I know there is a ton, and good job on that. One thing I notice is the conference space and I think in general business kind of moving to this winner take all approach. I don’t know what the reason is, but there’s only one Facebook. You’ve really captured the business to business conference market, and everything seems to be moving to this unipolar world where winner takes all. Do you feel like that’s happening? What’s your sense there?

Cassandra: I think it’s natural within business, in any business landscape that there’s going to be a dominant player, and there’s no question that MJ Biz Con has become the dominant player. I think that we have earned that position simply through having really terrific, unbiased and well curing content. Having a great expo, as you said, with all the details taken care of, it runs smoothly. It’s a good experience for the people who are there. With trade show in particular, whether it’s an expo only type event or whether it’s a conference type of event, there’s absolutely a sense of critical mass that plays into that.

We live in such a virtual world today that at some point people do need to get together, if they’re going to be traveling to an event, if they’re going to be making that investing in being on-site somewhere, they want to be at that place where they know the most people are going to be who are going to be able to help them advance their own business activities to find the right partners, to scope out the right vendor for the next part of their business expansion. Whatever that is, they want to go to where the critical of people and businesses and opportunities are going to be. That simply has become into Biz Com.

Matthew: Who was the keynote speaker last year, and who is it going to be this year? I’m trying to remember. It wasn’t Ben and Jerry. That was 2014.

Cassandra: That was 2014. This year we’re having George Blankenship is going to be our keynote speaker. He is a business innovator. He has worked with Tesla, and with Apple and with many other forward thinking companies over the last many years, and is going to bring his insights into business innovation and industry innovation to the show floor here, to the show in Las Vegas. I’m very much looking forward to hearing how somebody who has been on the forefront on so many business advancements that have fundamentally changed the way our society operates.

When you think about Apple and the ways they have impacted not just computers, but how that has really flowed through our entire society and changed the way that we approach the world. I think that cannabis can be and is becoming a similar game changing and innovation industry. I think his intents are going to be very valuable. We’re also having, as a keynote this year, Jean Sullivan who is a noted investor in this space and was a noted Dot Com investor as well, and she’ll be talking about her experiences during the Dot Com boom and some of the parallels she’s seeing as the cannabis develops and some of the irrational exuberant that we’re starting to see here in the cannabis market. She has some words of wisdom and [10.57 unclear] and values for attendees, as people move forward in those landscapes.

Last year we had Penn Jillette, from the comedy duo Penn and Teller. Penn is a noted libertarian and free thinker himself. His comments were very much appreciated in terms of how people like him are influencing the conversation of cannabis in the general society. Not just in the United States, but globally as we see things change.

Matthew: You mentioned irrational exuberance there. There are areas that seem a little bit frothy. What areas are those to you in your mind?

Cassandra: The places where I see the most exuberance, absolutely the places where there are the most opportunities. So, I think California, as that market comes out, it’s obviously going to be huge. I think it’s going to take a little while to sort itself out. Right now there’s a lot of investment that’s just going into that space to try to seize opportunity, but I don’t know that there is very much risk mitigation going on right now. Now, I get that that’s difficult to do because we still don’t even have emergency legislation out that’s going to control things come January 1st, so how do you mitigate risk when you don’t know the landscape you’re going to be playing on. That’s absolutely a difficult question, but there’s definitely going to be some people who end up with the short straw in that market.

Canada, something of a similar situation. The amount of investment that’s pouring in up there is both heartening because it is a precursor of what could be possible if the United States legalized thoroughly and got their act together. The Canada marketplace is going to be a much more stable with full federal regulation, full federal legalization, which means you’ll be able to do banking and commerce and taxing and regulation across the entire federal landscape. That’s a great foundation on which to build a business that we simply don’t have here in the United States, but the amount of money that’s going into that market right now does not, I think, match the size of the Canadian market.

So, where I think where people are looking, and I think this is an interesting angle of the Canadian marketplace, is Canada is quickly becoming an international hub for cannabis commerce. So, the Canada issue is not just about Canada, but it’s about Germany, and it’s about Australia and the Caribbean and other import/export markets and transborder, crossing the border with an IP that’s being developed up in Canada, things like that. So, there’s a lot going on and a lot of opportunities out there. Just always make sure you know what you’re doing when you’re up to foreign money.

Matthew: Yeah, I definitely am concerned about the cost of cannabis just going down quite a bit in California, once that engine really starts running and people that are running into that now, it’s like the top 1 percent of the people into automation and agriculture on a large scale that put in a ton of upfront investment are really going to be able to do things at scale that the small and medium guys just won’t be able to do. So, that’s one thing I worry about.

Cassandra: It is, it is a concern. Ultimately we are talking about a commoditization, a commodity market for an agricultural product at base level. Now, I think that the cannabis industry would be more benefitted by pursuing more of a consumer package goods model, rather than thinking of it necessarily as a commodity. Take Corn Flakes for example. Corn is a commodity. Corn Flakes is a consumer package good, and you so you can brand and charge more and market corn flakes very differently than you can a bushel of corn. So, thinking of it that way I think would be a good guidance for cannabis entrepreneurs.

Matthew: Yeah, I think of Tiffany’s also. Diamonds are a commodity in a sense, but the blue box from Tiffany’s is something that has real brand equity.

Cassandra: Absolutely, and that’s the way that we need to be thinking about things that are in this space.

Matthew: So, what’s the best strategy to get the most out of the conference in your opinion, especially for newcomers?

Cassandra: That’s a big question because the show has gotten big and it can feel intimidating, especially if it’s your first time at a cannabis event. So, the first thing I would say is, especially to newcomers, understand that this is a real business environment. This is not a consumer festival. Don’t feel like you’re walking into a smoke tent, something like that. This is a trade show like any other you’ve been to in whatever industry you’ve come from. If you are a newcomer, I highly recommend coming in a day early, on Tuesday the 14th and attending the Marijuana Business Crash Course. That even on Tuesday will be a smaller conference type activity that will really help you get centered in what the cannabis industry is, what it is not and help you understand what you want to be doing over the next three days of the show, what other conference sessions you want to attend, what exhibitors you really want to target to go visit, what kinds of people you want to meet over the next three days.

Then beyond that I would just say make sure that you have studied the conference agenda. Make sure that you’ve looked at the show floor. Have a plan going in as to this is what I want to do and what I want to get out of this show. I think it’s a really great idea to bring a common with you, especially if you’re looking to get a sense for the entire scope and scale of the marketplace. You may want to go talk to each and every one of those 650+ exhibitors in which case you really are going to need more than one person walking that show floor and having those conversations and understanding what all of those people are about.

Matthew: One little tactic I use is that it gets so overwhelming to meet so many people so quickly that when I meet someone new and plan on following up with each other just to take a selfie of you and that person together and when you email them say, hey this is me and you. Oh, right, I do remember you.

Cassandra: That’s a great idea. I love it.

Matthew: Thanks. How about an exhibitor? What can an exhibitor do to get the most foot traffic attention and how can they talk with people? Do they need to have an escalator pitch ready to get out what they need to get out and see if there’s a match and if not, move on to the next one? Do you have any strategies around that?

Cassandra: Absolutely. We start, all of our exhibitors take advantage of the retrieval systems that are included with their Show News, with their show packages. Every batch you will be able to just scan a badge and capture somebody’s information, make a couple of notes about it. So you can quickly capture those good leads that are going to be walking by your booth. You absolutely need an elevator type pitch, and you need everybody who is working your booth to be using it consistently, so that you can quickly go through and screen for, all right this is somebody that we want to be talking more to. Is this somebody we should then talk to more right now, or do we want to grab this person’s information and have them go on and reach out to them quickly next week or the week after.

It’s going to be a very busy show floor. There are going to be tons of highly qualified leads that will be walking by each and every one of those booths ready to make investment decisions and will be at MJ Biz Com to scope out which vendor or which partner they’re going to go out with. So, that’s the conversations you need to be prepared to have and that everybody in your business needs to be prepared to have. Beyond that, comfortable shoes. These are going to be some really exciting days and long ones, so make sure that you’ve gotten enough sleep and are ready to take this head on.

Matthew: Yeah, great suggestion there, and definitely having a team where one person can always be at the booth, because I know sometimes it’s just exhausting, so people take breaks, but then you go by their booth and there’s no one there. So, they’re missing out on some business. One question I have for you is let’s say I’m an exhibitor or considering making a booth, but I’ve never made a booth before. Is there any vendors or design firms or companies that you recommend that a listener reach out to in terms of creating a cool booth?

Cassandra: Sure. We have an entire exhibitor’s services manual that we provide to all of our exhibiting companies that has all of that information in there, tons of ideas, tons of vendors to reach out to to do those things. Our exhibit service company that we work with is Freeman. They provide those services. There are also lots of independents that work in the exhibit space. Lots of people come into the cannabis from another industry and have relationships with people from previous industries that have worked trade shows before and can capture those opportunities.

Then if you are more of a complete new entrepreneur startup activity, there’s tons of suggest in that exhibitor. So, this is mainly to make sure you use those documents that you have available to you. In addition, this year we’re about to release some exhibitor videos that we’ve put together to help our exhibitors walk through the last few weeks before the show, making sure that they have everything that they need ready. Make sure you have these checklists taken care of. Make sure you’re ready with your elevator and here’s a great way to staff your booth and those sorts of things so people can really take advantage of the opportunity of exhibiting at MJ Biz Com.

Matthew: I just want to circle back to the crash course for a second, because there’s a lot of people who have attended that who are listening, but then others that are considering hey, is that right for me. Can you just talk a little more detail about what you learn at the crash course?

Cassandra: You bet. We start about 10 o’clock in the morning with a cannabis industry overview, just sort of laying out the opportunity that is in front of you if you’re considering entering the cannabis marketplace. Then we go through, here’s a quick primer on cannabis itself. Here’s what it does. Here’s what it doesn’t do, those sorts of questions. Then into each of the major niches; cultivation, retail, infused products and how to put primer on all of those. All of these sessions include time for Q&A with the audience so that you can make sure you’re getting your questions answered, all of the contact information for all the speakers is included.

Those experts that we’re putting up on stage who have walked the road that the newbies in the audience are walking right now, they know who they can reach out to. It says, all right this person has been in my shoes and can answer my question. After we run through the niches, we go on with legal and accounting and banking, cash management, financing, both getting financing for your business, as well as deploying the finance into the cannabis space, if that’s what you’re angle is. So, this is about six to seven hours of just here is the quick download of what the cannabis space is and what the opportunities are, and that really has helped people their feet under them as they head into the rest of the show, meeting people. It helps them understand the lingo and know what things when they hear about them in the sessions later.

That crash course in fact has really helped us elevate the content that we’ve been able to put into the rest of the conference, because having given the new people an opportunity to get that base knowledge, we can then take that other conference to a 2 or 1 or 3 or 1 level. That really attracts and appeals to a much broader audience and helps the entire industry advance in that way.

Matthew: Great points. Let’s pivot to a couple personal development questions. Is there a book that has had a big impact on your life or way of thinking that you would like to share? It doesn’t have to be in the cannabis space or business space. Anything is fine.

Cassandra: I’m an Alabama girl, strangely enough. Back in the day I grew up in small town Alabama and one of my favorite books of all time has always been To Kill a Mockingbird. I read it when I was not quite Scott’s age, but I was a little older than that, but I read it when I was still fairly young. It had a big impression on me back then. Every time I go back and reread that book I’m just reminded of how important it is to be a good human, first and foremost, no matter what else happens. It’s just so important in personal development and personal happiness to be sure that you’re doing the right thing for people and with people first and foremost. That has in fact carried through to my business philosophy, they way that I run my company here. Ann and I set out in the early days to help people do their jobs better and run their businesses better. That philosophy has carried through to the way that the team here at MJ Biz Daily works. I have always wanted to create a place just where people enjoy what they’re doing. They feel successful about it, and they enjoy who they’re doing it with. Those things are all things that come out of To Kill a Mockingbird.

Matthew: Classic book. That’s a great book. I escaped Hurricane Matthew last year and went into Alabama for a couple of weeks just spontaneously. Driving all around through Birmingham and through the rolling hills and everything, and I was really impressed by it. I didn’t know what to think of Alabama, but Birmingham was really fun and interesting and there was a great farmer’s market there on Saturday. That whole scene I think is, I don’t know, like a merging America. People just don’t talk about it.

Cassandra: It is. Alabama is a great place to be from. The people are so warm and friendly. I have very near and dear family and friends still down there. I love being able to say that I’m from Alabama, even though in the cannabis space it does raise an eyebrow or two.

Matthew: Because Jeff Sessions is from there right.

Cassandra: Exactly. Jeff Sessions is from there. It is on the short list of states that will be last to legalize, which I agree with. I get it. I grew up around that environment, and I understand where those people are coming from. It’s just a, honestly and this is kind of a departure to politics and the drug war and all that sort of thing.

Cassandra: Indeed.

Is there a tool, web-based or otherwise, that you consider vital to your business operation or productivity?

Cassandra: We are actually experimenting and looking at several things that will enhance our reader experience with MJ Biz Daily and their web experience when they engage with that, as well as the conference experience. There is so much new and emerging conference technology that’s coming out from chat bots to app based systems, to things that you’ll actually be able to experience on the show floor this year at MJ Biz Com. I think it’s that amalgamation of technologies that we’re going to be able to tap into as the show and as MJ Biz Daily and as the cannabis industry continues to grow.

I’ll make another comment about technology and especially with cannabis. I’ve been thinking about this recently that I think there’s two key reasons why the cannabis industry has been on the growth trajectory it has been. There’s no question that it is become an economy, an industry that has gotten its legs under it, much more quickly than any before it. I think there’s two good reasons why. Number one is the fairly obvious, consumer adoption issue is that this is a product that people have been using for a very long time, and the only thing that’s stopping them from using more of it is access and legal status. The other reason why, beyond the fact that we don’t have to convince people here’s this new thing try this, people have already tried it and they know what it is and they know they want it. So, we don’t have that consumer adoption issue.

The other thing that we’re working with that no other industry has ever worked with before is that this is the first industry after the Dot Com boom. This is the first industry that has been created on the back of things like seed to sale software and Big Data harvesting and analysis and communication systems that are far more effective than they’ve ever been in the past. I think that the way that technology has fueled the cannabis industry is only going to continue to expand and then export back out into other mainstream industries.

Matthew: One thing I wanted to ask you about is the statistic about most businesses failing is really high, but when I look your and Ann’s track record you have a really good success record. What is the formula there? Do you try to get into emerging businesses that have strong profit potential, add value and then provide something back to those people? Is there a formula that you kind of follow?

Casssandra: To some degree there is. When we launched our products we always looked for an industry that was growing at 7 percent or more per year, that had a certain number, a critical mass of businesses with employees. So, not just some little entrepreneurs, but people who were making payroll, who felt a sense of obligation to I have to make sure my staffers get paid this week, because that has a different level of commitment to it as an entrepreneur and therefore staying power. Then a few other things. Yeah, we did follow a check list as we went through that, but I do think that it comes back to this sense of helping people do their jobs better.

If you give people a sense of comfort that not only are you a trustworthy source, but you are one that’s invested in your success, they will in turn invest in more success, and give you back what you need to be able to help them. It becomes a very positive and virtuous cycle that has really fueled our activities.

Matthew: It’s like a karmic snowball.

Cassandra: It is. It’s a good way to live life.

Matthew: Well Cassandra, thanks so much for coming on the show today. Can you give out your website and let people know how to register as an attendee or an exhibitor?

Cassandra: You bet. Actually our exhibit hall is completely sold out, but if you’re interested it is… but if you’re interested in being part of MJ Biz Com next year or in a future event, by all means reach out to our sales department sales@mjbizdaily.com. You can register for the show at www.mjbizcon.com. For your listeners Matt we have a $50 discount available if they just use discount code CANNAINSIDER50. They’ll be able to get an additional $50 the sessions and exhibits price of the registration. If they register before October 19th, the price is $200 off sessions and exhibits, $100 an expo pass. So, if they get out there and get their registrations here in the next week, then we’ll be able to save them even more money that way.

Matthew: Great. Well, Cassandra, thanks so much for coming on the show and educating us. We really appreciate it.

Cassandra: Matt, I really appreciate the time

Deep Dive into Cannabis Oil Extraction, Filtration and Distillation with Jim Makoso

jim makoso lucid oils

Jim Makoso is the co-founder of LucidOils.com in Seattle. Listen in as Matthew and Jim discuss the most important business and health aspects of cannabis oil extraction and distillation.

Key Takeaways:
[1:07] – What is Lucid Oils
[1:36] – Jim’s background
[9:27] – Jim talks about modifying extraction machines
[12:33] – Distillation versus extraction
[15:23] – Why extract with ethanol
[18:30] – Jim talks about the filtering process
[21:47] – What is fractionation
[23:16] – Jim talks about terpenes
[26:57] – Preserving terpenes & flavonoids during extraction
[28:57] – Jim talks about product creation
[35:57] – Jim answers some personal development questions
[42:12] – Contact details for Lucid Oils

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

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

 

Read Full Transcript

As edibles and cannabis infused products gain traction with consumers, more individuals and business owners and growers are looking to understand cannabis oil extraction. That is why I’m pleased to have on the show today Jim Makoso, cofounder of Lucid Oils. Jim, welcome to CannaInsider.

Jim: Hey Matt, thanks for having me. How are you today?

Matthew: I am great. Thanks for coming on. Give us a sense of geography. Where are you in the world today?

Jim: Actually right now I’m back here at home. My home right now is in Belleview, Washington. We do quite a bit of traveling for our work, but I have a couple days. I try to take a couple days every month to be at home, kind of get my house in order before going back on the road.

Matthew: What is Lucid Oils?

Jim: Lucid Oils is kind of a concept. It’s a brand, a consumer brand of Lucid Labs, which is really our parent company and that’s what we own. Essentially Lucid Labs/Lucid Oils is a licensing, branding and equipment design company focused on the cannabis industry.

Matthew: I want to get into that in a minute, but tell us first about your background and how you came to start Lucid oils.

Jim: My background, in general, I come from a finance, investment banking background, specifically , I studied economics and business finance in school, but took a departure from that several years ago when a friend of mine contacted me, who lived in Seattle at the time. I was living in Miami, and invited me to come out and see what was happening in the cannabis industry from a business standpoint. I’ve always been an enthusiast and consumer for personal use, but once I came out here to the West Coast, I started a company, a vaporizer company called Vuber Technologies. Shortly into that, having that business, we had the priviledge of selling that company and using the proceeds to start Lucid Oils back in 2015, back in January of 2015. Once we kind of got into the cannabis space specifically and had an idea of what was happening in the extraction world, it was a no brainer for us to hop in, figure out a business model and a plan that would work for us and start doing some business.

Matthew: That’s a big contrast from Miami to the Seattle area. Have you missed the sunshine of Miami, or do you like being in the rainy Northwest?

Jim: I’m from New York originally, so you hear all the stories, being from the East Coast, about the rain in Seattle, the software guys, so being a little bit more passive, aggressive up here. What I will say is when I first moved here the guys that I was investing with in that vaporizer company, they kind of sat me down and had a real conversation with me about how I needed to tone it down from my East Coast bravado of being loud. Too clean cut. They told me, let your beard grow, let your hair grow. This was when I still had hair before we started really working hard. Let your hair grow and really kind of breathe in the Pacific Northwest and understand the culture and that would enable me to do good business out here, and they were absolutely right.

The West Coast it’s a completely different vibe, specifically the Pacific Northwest. Yeah, it was a change, but what I can say now, living up here for four years, coming up on four years here in January, is this is by far one of the most beautiful parts of the country that I’ve ever been to and had the privilege to live in. Now I know what it’s all about. See, they tell people it rains here so that they’ll stay away, because they don’t share at all with anyone.

Matthew: Yeah, it is really beautiful up there.

Jim: It’s interesting. Being that we’ve been in business coming up on three years officially with products on the shelves for two and a half years here in December, it’s been quite the ride and currently we still have a very small team. When I say startup, let’s just call it a small business in terms of revenue, but a startup mentality still. Meaning, we wear all the hats we need to wear in order to get our business done. Kind of our motto is there’s four of us from an ownership standpoint that have a stake in this business, and there’s three of us out of the four that actually are carrying out tasks. One investor who is passive and he gets the reports quarterly and that annual report of how we’re doing.

So, what we focus on is leveraging our partnerships, which we have several in different and then as well on the equipment side in order to get done the day-to-day tasks, and we handle more of the macro stuff. My typical week and then month really is I’ll be in any number of states. Usually two weeks out of the month I’m in Nevada working on our Reno licensing deal where we work with a company called Greenleaf Wellness to produce all of the oil products that come out of that relationship to distribute to various recreational dispensaries throughout the state with a focus on our core customers are really in Las Vegas. It’s a really big bolstering market, and so I go down there two weeks a month just to kind of manage the team. We have two hired employees that are full time down there in our partnership that kind of run the lab. Then either myself or one of my partners are down there on the weeks I’m not.

So, that’s two weeks out of the month. On the other two weeks of the month, one week is usually spent with any number of laboratories installing and training people on how to use the equipment that we’ve designed. We work with a company out of Maryland called BR Instruments, where my business partner who is an engineer, redesigned one of their systems with help, but redesigned one of their systems to specifically work with cannabis distillation, to work with cannabis as an input and distill it using their system. That company originally was a petroleum and essential oil equipment manufacturer where they were creating these specific customized systems to fractionally distill petroleum, new petroleum deposits so that a company could then build a huge still based on those deposits and essential oil companies that were focusing on specific essential oils.

So, when we came in we used their equipment. My partner had redesigned it for our applications and we partnered with them to do that. So, now we go as a part of that relationship, a part of that partnership. We do, we install those pieces of equipment when people buy them, and we train them how to make what we call a lucid quality of oil and certainly that’s been very lucrative for us over the past year. So, one of the other two weeks that I have available, that’s exactly what I’m doing. I’m out there installing, meeting people and educating them on how to make better quality oil using our equipment.

Then that fourth week out of the month, typically, I’m pretty active in the business development side, either attending trade shows anywhere in the country, in some cases outside of the country. Continuing to build some existing relationship where maybe we haven’t gotten to a contractual step yet, but we’re in the conversation, bouncing around some letters of intent and other types of paperwork, and really landscaping the market. In the existing markets we’re in to see maybe where we can be more efficient. That’s kind of what my month looks like. So, I’m very happy to say, since I have a difficult time sticking to one task at a desk 40 hours a week, I have the flexibility in my current role here in my company to do any number of things in a given month. It’s structured, generally, but it allows enough flexibility where the scenery is always changing, but we’re always working towards one specific goal, which is increasing our footprint in this landscape and improving the quality of the products that we put out and helping others to improve the quality of the products that they’re putting out.

Matthew: Maybe you can talk a little bit about distillation and why you felt the need, you and your partner, to modify the machine. What were the machines on the market not doing that you felt like you had to modify a machine with your partner in Maryland, extraction machine?

Jim: That’s a great question because we get asked that pretty often by guys when they see the system that we co-developed with BR Instruments. Back when we first started, when we were first doing the research, before we had officially launched our company in January 2015. Back at that time there was really only one company putting out this product and they called it The Clear. It was these guys out of California. They were using what they call a short path distillation system, which is still very commonly used today. It was more of a high school chemistry or college chemistry set. Very effective in the right hands, and the guys had started that. Really smart guys, very well respected throughout the industry, known for continually pushing the quality of products. A guy out of Boston who ended up in California, who is a chemist, a guy by the name of Chris Baroni [ph], really started distilling cannabis initially in scale for production purposes, and he was using a short path distillation system.

You see many people still using short path distillation systems, but at that time we were using that and we had contracted with a PhD in Organic Chemistry who recommended the BR Instrument system. Keep in mind, before we used that no one in the industry had purchased one for the distillation of cannabis. So, it was, as yet, unproven. So, we kind of took a chance, and the reason being is their system featured a software component that allowed you to record the data of your run in 30 second increments, but all of the data required in order to do good data analysis, but more importantly to be able to repeat that process consistently by taking note of temperatures, pressures of different cuts, or what they call fractions, as you were distilling. That to us was something, as guys that didn’t have a science background, my partner is more of an electrical engineer and my background being finance, it was important for us to be able to capture that data.

Once we got that piece of equipment, it took us a pain staking month and a half to dial it in and we ran through thousands of grams, several kilos of oil, before we kind of figured it out. So, as you can imagine, that was probably in our business the most stressful time, because it was unproven. We spent lots of money on all this equipment. We had a new relationship that was getting restless with our inability to produce the quality of the oil that we had promised, but once we made it over the hump, we realized we had something special and the rest is current if you will.

Matthew: When you talk about distillation versus extraction, can you talk about what those terms means and how they differ and overlap?

Jim: Yeah, absolutely. In a real basic way, distillation is not extraction. Extraction is removing specific compounds from bio mesh or from a plant or from some type of botanical. Removing or extracting the specific components that you want using some sort of solvent or some process, typically a solvent. When I say a solvent, the most common ones in extraction in cannabis are hydrocarbons, that’s your BHO, your butane, your propane and other hydrocarbons. There’s ethanol, that’s another common form of extraction, that’s your alcohol. Then there’s CO2 extraction. Those are the solvent based, most common forms of extraction.

Distillation is what we would call a refining process. So, once you’ve extracted that material using one of those extraction methods, you’re going to put it through a number of processes. Generally most people will filter it in one way or another in order to remove or refine that product down to an even higher concentration of purity with less contaminants. Distillation is one of the final steps that you’re seeing people utilize in order to really purify the product to a higher level to specifically isolate those compounds which typically you wouldn’t be able to get out in any other way, unless you use some type of chemical liquid, liquid separation.

Typically the process is extract that material, create what they call crude oil, take that crude oil, filter it in any number of ways. Once it’s filtered, refine that crude oil in the distillation process in order to really isolate the cannabinoids from all the other compounds. Of course there’s additional steps that people are implementing now to isolate cannabinoids from each other, but that’s kind of the flow, the process flow. Once you’ve grown your product, you extract it. That will pull out the cannabinoids and maybe some contaminants. Once you have that crude oil, you filter it in order to separate a majority of those contaminants. Then once you’ve filtered it, you distill it in order to isolate cannabinoids from everything else.

Matthew: What do you think about extracting with ethanol in general? People know about this, they’ve heard about but they perhaps don’t know that much about it in detail. Why would you want to extract with ethanol versus some other medium?

Jim: The thing with extraction is the method of, or the solvent that you use to extract typically is based on one of two or three factors. Depending on where you are extracting, and let’s assume you’re doing everything by the books and you’re licensed either medically or recreationally in a state that allows it, typically the regulations of that state will be restrictive in terms of what you can and can’t use as a solvent. For instance in Northern California it’s very difficult for them to use ethanol as a solvent, so they have to use CO2 or hydrocarbon. In some states, and in some countries in fact, like in Canada for instance, hydrocarbons are frowned upon. Not only because they’re so called dangers because they have a very low boiling, so they’re in a vapor at room temperature and ignite with a very small spark, but also because it’s very difficult to get all those hydrocarbons out of your extract, once you’ve extracted.

Ethanol or any of the other solvents, it really is dependent on the product you wish to produce as well as where you’re actually carrying out your extraction that will determine what’s the most effective method. We like ethanol specifically in our process primarily because most of our products right now are just distilled products. In other words we’re taking that crude oil, filtering it and distilling it with 95 percent of all the material that we extract, because that creates our Lucid quality oil, and of course in Washington because we work with an edible manufacturer and as it turns out, distilled oil produces a very high quality input oil for edibles. It doesn’t have taste. It’s really high in purity and it’s easy to work with.

The ethanol that we use specifically is food grade, 200 proof ethanol and what we find is that if you extract with ethanol, with the right parameters, you can produce a really high quality product in terms of being able to get a full spectrum extract, but simultaneously pulling any water soluble or chlorophyll or any water soluables, plant proteins, waxes, lipids. If you’ve done the math and all the extraction the right way, it’s very efficient in that it will pull 92 percent plus of all the cannabinoids available in a very short period of time, while leaving behind the water soluble. So, that’s why we use ethanol in our process. We’ve dialed our process in to be very effective with that solvent.

Matthew: So, extract, filter, distill. That’s the process. You extract with ethanol and then you filter. What is filter, before you go to distilling, how do you filter specifically?

Jim: Filtration, there’s still a huge differing school of thought, a huge amount of difference in the school of thoughts on filtration. Most people generally agree you want to get lipids and fats out, unless you’re putting it in to a chocolate edible or something where you can leave a little bit of the lipids in there, even though we don’t recommend that. The filtration though, generally, people are trying to accomplish really one thing. That is remove as much of the non-cannabinoids, non-terpenoids, non-flavonoids from the product as possible, while maintaining the integrity of those products, meaning add the least amount of heat so you’re not degrading any of those compounds, but remove as much of those contaminants as possible.

So, when you say specifics about filtration, depending on who you ask, that’s going to differ. What we generally will do with all of our samples is filter it with several different micron filters to remove solid particulate that maybe is picked up in the run. Our typical ethanol extraction process where we have five micron filters on there as it is, so we’re pulling most of the solid material out. Five microns is a very small size. Then we’ll run it through… we’ll concentrate that by removing a lot of ethanol from those runs to get a concentration bat size, meaning anticipated cannabinoids in that solution is about 2,000 to 3,000 grams with a 7 to 1, approximately, ratio of ethanol to anticipated cannabinoids. Once we have that ratio, we’ll then go filter it with a pretty common process that people are doing.

We’ll scrub it with a specific type of carbon, then put it through several filter media, different types of compounds to remove the carbon and to pull out a little bit more of the color pigments before we take that. Reduce it all the way down, by removing all the ethanol solution where you are left with a crude that has been filtered and is ready for distillation. The filter media is going to differ from person to person and differ from product to product. Someone who is, per se, looking for a full plant extract, they’re probably not going to filter that very much. They’ll filter it through some filter papers to remove solid mass. They’ll remove all the solvent and then that’s what they would consider a full plant extract or RSO is what you’ll hear it commonly referred to, [21.15 unclear] Oil, but full spectrum, full plant extract is really what that is. You’ll do the least amount of filtering there. For our purposes to produce distilled, high quality oil or let’s just say distilled oil, we put it through a pretty rigorous filter media in order to remove as many contaminants as possible to get to that raw cannabis oil.

Matthew: Can you tell us a little bit about fractionation, what that means and why it’s important?

Jim: Real high level, the fractionation, you’ll hear that term often. All it really means is taking specific fractions while you’re doing extraction. There are some companies that have, as a part of their CO2 systems, the ability to fractionate. Generally they’re fractionating by removing the water compounds in one fractions, the terpene compounds in another, the cannabis compounds, the cannabinoid compounds all in one fraction, but the idea is you’re separating the plant into individual components. In the process of extraction, you’re separating your terpene content from your cannabinoid content.

In the context of distillation, what people are trying to do is separate even further your terpenes and terpenoids from your cannabinoids and some people are trying to go one step further and separate cannabinoids from each other. The idea of fractionation is just separating the compounds or groups of compounds into smaller and smaller units to get higher purities.

Matthew: Can you talk about terpenes a little bit, because we’ve got a lot of new listeners. I want to make sure they understand what terpenes are and why they’re important and why you’re taking so much care in positioning terpenes properly?

Jim: Terpenes, that’s really kind of a loaded word in the industry right now. People are starting to realize that terpenes first of all, you will find them in all botanicals throughout the plant kingdom. They are responsible for the smell, the smell of the plants. From pining and pine trees, which are also cannabinoids, terpenes are the same throughout the plant kingdom. They’re just responsible for at least initially to our sense of smell, the smell of the plants throughout the plant kingdom, and they serve a number of functions. Some of those functions are to protect the plants, some of those functions are byproducts, etc. Terpenes, as they’re related to cannabis, the same terpenes that you’ll find throughout the plant kingdom are the same terpenes that you find in cannabinoids. There are no, at least to my knowledge, there are no terpenes that are unique at this moment that we know of to cannabinoids. You can find them in other plants. Maybe one day somebody will disprove that or maybe there’s someone out there now who can disagree with that, but in general all terpenes throughout the plant kingdom are the same.

They’re essentially a naturally occurring hydrocarbon based on a combination of what are called isoprene units. These are the building blocks of terpenes and terpenoids. Terpenoids are compounds related to terpenes which may include some oxygen functionality or some rearrangement, however the two terms are often used interchangeably, but terpenes are isoprene units that are naturally occurring hydrocarbons and terpenoids are terpenes that include some oxygen functionality in the rearrangement as molecules. So, terpenes are responsible for those flavors and tastes. Flavonoids are to a lesser extent in that group, and they are exactly as they sound, flavor units that you’re finding inside of the plants. They generally don’t have a smell but do have a taste.

The reason why they’re such a hot topic now in the industry is because science has proven that an interaction between terpenes and cannabinoids are what create the effects that people are familiar with that give us the psychotropic and physiological effects that are either beneficial physiologically or giving us that high, what they call high or a psychotropic sensation. It’s a combination and an interplay between terpene molecules and cannabinoid molecules and flavonoids working together in what they call an entourage effect to give the efficacy that can be recreation or what scientists are figuring out, the medicinal in treating specific ailments.

Matthew: How do you take special care during the extraction filtering and distilling process to preserve those terpenes and flavonoids to make sure you get the desired outcome? Is there any steps you take that might be interesting to listeners?

Jim: For us we just tell everybody who is in extraction and anybody who is interested in it generally in this topic. From an extraction standpoint, as soon as you’re adding heat to any of those compounds are changing, and conforming into their longer chain cousins or completely different molecules all together. Heat is the enemy of terpenes. As you add heat or just oxygen to these compounds, they’re changing to different versions of themselves and different compounds all together. Typically what you’ll find is that when people are extracting material with the idea that they want to preserve the terpenes, they’ll be doing it as cold as possible and a vacuum if possible, and they’re using things that are very… where they have very low vapor pressure meaning that their boiling points are very low.

A great way to preserve terpenes is using hydrocarbon extract or using hydrocarbon as a solvent. Even CO2 are getting really good at extracting terpenes using CO2 in an initial step with lower pressures. In our process we extract the terpenes before we even extract the product, the cannabinoids themselves. So, there are different steps that you can implement, but the idea is you want to be cold and you want to be pretty gentle on the pressure side.

Matthew: We’ve talked about how the terpenes and the flavonoids help create the aroma and flavor and so forth, but how do you create a flavor and a taste and sensation and experience that you consider optimal? You have arrived at well, if we have this terpene/flavonoid/cannabinoid profile, this is what’s ideal for us?

Jim: That’s a great question. The interplay of physiological effects and creating a product are unique. Cannabis is not a compound like Advil or Tylenol where it’s really just one compound. Cannabis, as people think of it, is the interplay of hundreds of compounds working together to give us an effect. So, two things are at play when we are looking at product creation in a general sense. One is who is going to be consuming this product, and what is the desire effect? Because each person is different, when they consume, how they consume, their body, specifically, their metabolism. In general, every single person’s reaction to a plant could be completely different. We can say in a general sense, seven out of ten people should get this reaction, so that’s how we try to formulate our products.

This specific topic of effect versus formulation or formulating a product for a specific effect is something that everyone in the industry who creates a product is trying to understand as we speak, and this is being studied right now at a scientific level, and that is what specifically, what compounds, what combination of these compounds, cannabinoids and terpenes will produce a specific effect. That’s a very very tough thing to approach as a product maker, but you’re starting to find that people are at least using cannabinoids to start to create products, specifically for an effect. I’ll just give you a quick example.

Let’s just talk about on the recreational side. CBN, which is a degradation product of THC. When THC has been exposed to enough oxygen and light it changes its components. Some of the molecules, molecular bonds move to different positions and you get what most consider a degradation compounds. It’s CBN or Cannabinol. That compound, which is a degradation compound of THC, is generally know to be sedative in nature. So, if you’ve ever smoked really really old weed or your consumers have smoke really really old week, typically it will make you a little sleepy, give you a little couch lock, but give you the heavy eyelids, and that’s because some of that THC in there is converted to CBN.

What some people are releasing is these CBN products where they’re purposely degrading material or taking old material and increasing the temperature and closing it to light to get a higher compound, a higher concentration of CBN and putting it out as a product. That’s just one example, but generally speaking, that is what people are trying to do now is figure out ways that these things interplay with the average consumer to create a tailored effect.

Matthew: When you’re designing you your customer terpene profile are there any undesirable things that you can pick up in the process if it’s done incorrectly. Particularly, you see novice people or people that are just starting out do?

Jim: Yeah, well generally speaking, let’s look at the case of a vaporizer. Most people are introducing terpenes into their oils so that they’ll work in a vaporizer. Most people know what a vaporizer is, but if you don’t, it’s similar to like those e-cigarettes that you see people have out there. It’s essentially a heating element that heats up that oil to a certain temperature so that it will turn into a vapor so that you can inhale it. It’s not smoking, it’s vaporizing. It really is the vapor of those compounds that you are inhaling and that’s why when you exhale it it doesn’t really leave much of a residue like a smoke, unless you have very high volumes of it.

In the case of a vaporizer, people are adding terpenes in order to thin out their oil in order to make it work in a vaporizer. The issue with that is because terpenes are hydrocarbons, if you have such a high amount of those, sometimes that will lead to some people look at a hypoallergenic reaction to it. They’ll sneeze. They’ll have the itchy throat, and that’s because when those terpenes are reacting with that vaporizer it’s a chemical reaction that’s happening at that point of contact, increasing that temperature to a very high temperature and changing those compound, those terpene specific, into something else. You get this situation where people are adding more terpenes than probably what’s necessary to be there, definitely more than what’s naturally occurring in the plant, and you get this kind side reaction.

There is no idea as to what the long term effects of these types of things are going to be. I’m sure at some point in the near future some of these studies will begin. I know one scientist at least that’s already studying the vapor from various different vaporizer cartridges, but generally speaking, terpenes in general are hydrocarbons, and you find them in all types of products on the shelf that aren’t cannabis products. What we’re seeing now is that people are starting to become, as product makers, are starting to realize that is, like food manufacturing, there is an unlimited direction that you can go in in creating these products. Not only edible products, but all products for consumption.

In any case where you are adding any compounds to something that’s going to be consumed by human, via smoking, vaporizing, eating, applying topically, you just want to take a really close look at the combination of the compounds you’re putting in there and making sure that they’re safe for your consumers.

Matthew: Jim, let’s pivot to some personal development questions. I like to help listeners get to know you a little bit more on a personal level. With that, is there a book that’s had a big impact on your life or way of thinking that you’d like to share?

Jim: Yeah, there is one book that has a big impact on my way of life and my mentality. This might be a surprise to many, but the Bible. I’m a man of faith. I try not to press it on anybody else, because I fail a lot as an individual. I’m a human, but I definitely apply my life at a personal level. I try to live up to the standards that are found in the Bible. That’s a sense of morality that my parents instilled in us, and above everything, that was always the most important thing they tried to imprint on our lives. In my case, and several of my siblings, it stuck. I fail of course a lot as a human and as a Christian man, but that’s certainly the standard that I try to live to.

Outside of that from a professional standpoint, surprisingly the Art of the Deal, which I’m not a big fan of Donald Trump, but that book in specific there’s some really great stuff in there. In general, I would just say anybody who’s looking to do anything professionally or otherwise, reading in general, stimulating the critical thinking parts of your brain by reading something that’s academic or reading something that’s fantasy. In general, that’s just going to help keep your brain sharp and the ability to think and imagine. I find that reading in general, just for anyone, is just a good way to keep your brain very active and for a creative person, reading something that is imaginative that stimulates your imagination is just going to be good for your work.

Matthew: How about a tool? Is there a tool that you consider vital to your productivity?

Jim: Absolutely, and it has been ever since I’ve been a professional. I use Microsoft Excel basically for everything. For all analysis, for all backend, anything from a business standpoint, be it evaluating pricing in the market, I use Excel. In a smaller way, the market is pretty fragmented at the moment, so state-to-state there are different rules that apply in different access to information. For instance, here in Washington I use a tool called Headset, which was actually started by the same guys who started Leafly. I use Headset to review information about the market, market trends, growth, contraction, pricing and Headset is a great tool for that here in Washington, but that’s not a tool that’s readily available in other states yet, even though I know they’re making a push in Colorado and California.

Excel is like my go to software tool that I use for everything, and of course here in Washington, Headset, the piece of software equipment that provides real-time data on pricing and market trends is another great tool.

Matthew: Yeah, Headset is a great tool. We’ve had Cy, a cofounder of Headset, on the show. That’s definitely something. How do you use that Headset, just so other people can understand that data. What kind of insights does it give you as a business owner and someone in the extraction community?

Jim: Yeah absolutely. Well, the great thing about their software is they’re so well-respected in the space, not only here in Washington, but in the space because they created Leafly, which is one of the most well-know apps and companies for cannabis in the space. So, they’re very well-respected throughout the industry, but that specific piece of software what it does is it provides a real-time, day-to-day metric of what’s happening in the industry. So, I think of it from my trading days, similar to a Bloomberg terminal, which is giving you the feedback of all the pricing and the bid asks throughout the stock market on a specific security, stocks, bonds, etc., but the Bloomberg terminal is like the tool that everybody was using in order to have an idea of what was going on in the industry.

Similarly Headset is like a software, a piece of software that is giving you a real-time snapshot of what’s happening in the industry. So, for somebody like myself, a finance guy who is analytical in nature, to be able to landscape the industry and take raw data and create my own dashboard, create my own visual way to review that data in real-time, for me just provides me a snapshot of what’s happening in the market and allows me to anticipated kind of the direction the market is going in, in terms of pricing and consumer preference. So, for anybody who is serious about doing business in Washington it’s an essential tool to know what’s going on. Let’s say you’re not as plugged in to the market as I am where I have plenty of salespeople and plenty of business owners in different parts and aspects of the industry where I can call them up and get an idea of what they’re experiencing in their business, let’s say you didn’t have access to all that and you were entering the market for the first time or you’re from out of state entering the market, Headset will provide you with a real-time analysis of what’s happening in the market.

Of course, quarterly and annually they put out a report that’s all pretty and really well-written that kind of gives you that snapshot. It provides you with that information in real-time, daily. So, it’s an essential tool for anybody in Washington who is serious about competing in this space. Now, Washington is very very competitive market and that tool definitely allows to have the advantage when pricing and when looking at the market from a macro level.

Matthew: Very cool, thanks for sharing how you use that. Jim, as we close, can you tell listeners how they can learn more about Lucid Oils and connect with you?

Jim: Yeah, absolutely. Well, you can connect with me, you can shoot me an email, jimmy@lucidoils.com. If you have any questions about the industry or questions specifically about equipment we’re working on, questions about markets we’re in, feel free. I’ll tell everybody, use me as a resource. You can also connect with me, I do a number of the shows throughout the year where I’ll go and educate people on extraction, usually macro, real high level, just to give people an idea of what’s going on in the space. A part of my talk I usually focus on industry trends, what’s happening, the hot topics. This year you can catch me at, the remainder of the year I’m doing one more show in November in Las Vegas called the Marijuana Business Conference and Expo.

I’ll be hosting a panel on extraction and future trends in technology. On that panel will be A.C. Braddock, Eden Labs, Brian Abernathy, the CEO and Cofounder of Extracted Labs Refine Seattle, one of the biggest extraction companies in the country, easily. Then also on that panel will be one of my good friends, a colleague from Buke, Kelsey. She is a chemist by trade. She’s a Masters in Chemistry, but she’s the top rep for Buke here in the states on the West Coast. We’re going to have some great minds on that panel and we’re going to be discussing future trends in technology, so anybody who is in Vegas who plans on being at that show, you can come catch me at the panel. Then of course I’ll have two booths at that show with two different partners where you can come and take a look at some of the equipment and some of the tech we’re working on there in Las Vegas. Outside of that, you can catch me on Instagram, or at least my company, @LucidOils, as well as on Facebook, Lucid Oils, and then of course my website, www.lucidoils.com.

Matthew: Well, Jim thanks so much for coming on the show today and educating us. We really appreciate it.

Jim: Hey Matt, thanks for the time and anytime you need any more information on that front from me, you know how to reach me, but I’m a big fan of your show and I appreciate that you’d have me on it.