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What happens when big data meets cultivation? Here to help us answer that is David Kessler of TriGrow, a leading cultivation solutions provider that just launched a grow chamber that will change cannabis as we know it.
Learn more at https://trigrow.com
- David’s background in cannabis and how he became Senior Vice President of TriGrow
- An inside look at TriGrow and its turnkey systems approach to help cultivators achieve the highest consistency and quality possible
- The different types of technology and automation at TriGrow, including their real-time monitoring software and stackable grow chambers
- A breakdown of TriGrow’s state-of-the-art grow chambers and how they work to create a maximum of six canopy levels
- How TriGrow’s stackable grow chambers impact comfortability in working with the plants
- The precision with which TriGrow’s chambers can be optimized for different strains
- How TriGrow uses data to provide growers a reproducible environment for greater consistency in quality and yield
- David’s insight on the future of smart growing and the significant role it will play in standardizing cannabis over the next 3-5 years
Matthew: Hi, I'm Matthew Kind. Every Monday, look for a fresh new episode where I'll take you behind the scenes and interview the insiders that are shaping the rapidly-evolving cannabis industry. Learn more at cannainsider.com, that's cannainsider.com. Now, here's your program.
What happens when you applied best practices from large scale agriculture to cannabis and use the best thinking in data collection to measure the results? Here to help us answer that question is David Kessler from TriGrow. David, welcome to CannaInsider.
David: Thank you, Matt.
Matthew: Give us a sense of geography. Where are you in the world today?
David: I'm in Sunny, Colorado. It's a beautiful day here.
Matthew: Oh great. And what is TriGrow on a high level?
David: On a high level, TriGrow is really an end to end cultivation solution. It was born out of the tenant that high quality cannabis production and low cost cannabis production were not mutually exclusive. Really, we're trying to break from the status quo of traditional indoor cultivation and apply modern best practices, technology and automation to the industry in order to solve some of the problems that we saw. So TriGrow systems is just one division of TriGrow, which addresses the cultivation situation and how to optimize cultivation for the future.
We also have a division called TriGrow Capital, which addresses finance challenges within the cannabis industry where we've just offered up a $30 million equipment financing vehicle, which really gives producers choices about the way they expand without relying on equity. We also have a supply division which helps cut costs of production for everyone in the industry as well as a brand division, which really moves towards a commodity of a branded product with consistency where we afford people training, packaging, marketing expertise, and really help them get a higher value for their product.
Matthew: Okay. So let's talk a little bit about what a turnkey cultivation facility is and what that means and what it looks like so people can understand.
David: Absolutely. A turnkey solution in our mind is the combination of proven hardware and software along with operating procedures which allow operators to hit the ground running. We want them to have a proven model for success. And so it incorporates everything from training, operational support, a full ERP solution, centralized horticultural support monitoring and whatever we can do to ensure the success of our client operators. Essentially, it's turning cannabis cultivation into a science-driven manufacturing process, but one where we are very careful to explain that we love the plant and the idea is to maximize the genetic potential of each and every individual strain in a TriGrow facility.
Matthew: Okay. Let's tease that apart a little bit in terms of what the technology and automation is exactly. Can you tell us about that?
David: Sure. We've taken an Apple ecosystem approach, which is a custom engineered integrated hardware and software solution. What we're looking to do is control cultivation using a very granularly controlled growth chamber model where in every 32 square feet of floor space, we can stack up to six tiers of canopy. All of the growth chambers are extremely uniform and customized and individually controlled from one another, which means that in one particular chamber we might have a temperature of 78 degrees, and a humidity of 55%, a CO2 level of, say, 1,200 parts per million. But maybe in the adjacent chamber we're trying to bring out anthocyanin production on a purple punch that's about to go to harvest. So we've dropped the temperature to say 60 degrees to degrade the chlorophyll and then bring out that secondary pigment and intensify it.
So by having individually-controlled chambers, we're really able to do what's best for the plants inside each chamber. And in doing so, we can maximize the quality and it might not be yield, it might be about trichome production, or it might be about a secondary metabolite that we're looking to produce in a higher amount. But over each cultivation cycle, we can have iterative improvement on how we cultivate that genetic. And with each individual growth chamber recording over a million data points in a year, we're able to digest that data and improve the process from crop to crop.
Matthew: Okay. What's the background on how you started the grow chamber? Like how did you arrive at that and you know, the size it should be and all the tiers and everything? What's the background there?
David: Absolutely. We wanted something that was modular and we also wanted something that we could grow a single strain in a more monocrop approach, which is, you know, most traditional grow rooms, they have multiple strains in a room. They're organized around a calendar schedule of events for work. So we wanted to shrink that down and really work off of a what is best for each individual plant model. And so doing it at that 32-square foot meant that it had ship ability, it had a way of integrating into the building structure. And so to give a little bit of color there, each of these chambers acts as a support and integrates a catwalk in between, meaning that instead of building up on a mezzanine level on the second and third floor. The flooring is actually integrated into the units and allows very comfortable access to the plants and very comfortable working conditions. So the size of each chamber was really a factor of how we can do this in a scaled modular fashion and have that granular level of control over each chamber and the uniformity of the climate inside.
Matthew: Okay. And then so as you go from chamber to chamber, there is a, like, are you in a seat or how does that work?
David: Absolutely. So there are two levels of canopy in each chamber. Each chamber is roughly 4 feet wide, 8 feet long and 9 feet tall. For working on the upper level of canopy, you're just standing, very comfortable working position. And since both sides of the chamber open along the 8-foot access, you're never reaching in more than 24 inches to work with the plants. When it comes to working with the lower chamber, what we found is that a lot of the most common bench heights in the industry are between 24 and 36 inches, which means growers are doing a lot of bending and reaching and, and pots are heavy. So what we wanted to do is minimize that bend, minimize that reach. So our lower level is accessed from a essentially mechanics stool with pneumatic wheels. So people sit comfortably and can work with the plants without stretching and reaching. And it really allows for a nice comfortable working environment.
Matthew: Okay. And what have your clients' reactions been to this type of arrangement with the grow chamber and working with the chambers?
David: You know, they really like it compared to the traditional grow. I think a lot of the traditional grows were designed around an antiquated kind of version of cultivation. And this is really applying best practices to that. We're looking at workflow, we're looking at product flow through the facility and we want our employees to be comfortable. We want the cultivators to be comfortable so that they can put in a good day's work. And part of that is giving them a comfortable working environment. And if you're having people go up and down ladders holding things, there's a huge inherent risk of people falling and getting hurt. I've seen other cultivators try and grow vertical and they're using forklifts and series of pulleys. So we wanted to address the access issue and make it comfortable and replicatable and safe.
Matthew: Okay. And let's talk a little bit about plant height. I mean, what's the average plant height here and how do you make sure it works within the grow chamber?
David: Absolutely. So the average plant height tops out between 36 and 40 inches tall. What we've done is use a series of physical manipulations, trellising as well as the occasional photoperiod manipulation in order to control the overall plant size. We adjust the length of the vegetative phase for each strain based on their growth rate and so that they don't get too large. Now, there will be some genetics that have an enormous amount of stretch more based on some of those equatorial sativas that are much less common in today's cultivation that really are not going to work well in our system. But for the majority, the vast majority of modern genetics, it works extremely well.
One of the things that we do though is to make the most of those double tiered cultivation method is we introduced lighting not just from the top of the plants, but inside the plant canopy as well, it's called inter canopy lighting. And what we get is a more uniform development of the flower, both from a ripeness perspective as well as overall cannabinoid and metabolite perspective. So it boosts up that lower material that might not be as desirable, maybe call it grade B or C into more of a grade A material. And it also allows a more consistent cannabinoid profile and terpene profile from what we would think of as the upper colas into that lower material because the light is so much closer to that lower material.
Matthew: Okay. So we talked about lighting, we talked about how to control the height. What other kind of variables are you kind of optimizing and controlling?
David: Well, in each growth chamber, you can control temperature, humidity, vapor pressure deficit, which is a combination of those two prior, the irrigation cycle rolls and different fertilizer mixes as well as the spectrum of the light and the intensity of the light. Whether you're coming from just the light source above, or whether it's also incorporating the inter canopies, you can individually control CO2 levels in each chamber as well. So really it's a full amount of control over the internal environment of each individual chamber. So if you have 100 chambers, you essentially have the equivalent of 100 very dialed in cultivation rooms.
Matthew: Okay. And as you organize the chamber for specific strains and the benefits there, are you seeing...which strain are you seeing the most grown just anecdotally?
David: You know, that's a hard one because in different States it's different things in different client operators. We're not supplying the genetics. So it's really what they bring to the table. What we see the biggest benefit on is really running a monocrop approach. I think traditionally, you know, cultivators are doing bigger rooms with multiple strains in a room and they need an ongoing source of production for sale. So they're routinely taking down rooms. The most common kind of schema that I've seen is running eight flower rooms with supporting vegetative rooms and harvesting one flower room a week with say 4 to 10 strains in it, which give you variety and consistent production.
The problem is all of that traditional cultivation is built around a calendar approach and is really about optimizing labor. What we're doing is optimizing the plant. We're optimizing the genetic potential of each plant. And so by running a single strain in each chamber and then granularly controlling that environment, we can do what's best on a strain by strain basis. And it's pretty exciting as you start to do this because with one chamber, it's just a grow room, but as you get 10 or 100, the number of iterative experiments that you can do where you're running, let's say, wedding cake at 78 degrees, 84 degrees and 88 degrees, and then looking at that data and seeing how it produced, what the quality of the flower was, we can pretty quickly optimize around each individual strain based on these iterative experiments. And then from there, it's just a process of at what point is a client satisfied and, you know, moving onto the next strain
Matthew: When do you feel like you start to really get the benefit? Is it after the 10th time or the 100th time or the 3rd time like that you're really starting to say, okay, we're still really seeing the benefit from collecting this data and, you know, optimizing for this strain in this way.
David: I would definitely say that you actually see benefits right away. The granular control of the chamber and the monocrop approach yield returns quite quickly. By the 10th cultivation round, if we've been doing iterative experiments, we're gonna have a more optimized idea of the temperature and irrigation schedule, the fertilizer levels that it takes to really push that strain to maximize its potential. But by the 100th one, the entire grow plan, which for the listeners, a grow plan is just our work for the recipe of cultivation. It's every environmental factor, every physical plant touch from a grower. It's the recipe by which we cultivate those plants. So by the 100th time, you're looking at really being able to dial in the end product, whether that goal is for oil production or the production of a particular metabolite, you know, improved color profile. Simply bigger yields are more trichome. But, you know, the nice thing is with the system recording over a million data points a year on each chamber, you can not only review the data but at any point, basically click a button and it will repeat that entire environmental recipe and that yields consistency and the ability to, you know, really benefit from the data and those small experiments.
Matthew: Yeah. This is interesting because you kind of have a control group then where you say, this is our best recipe that we know of, but there's always could be some recipe that you don't know of that you didn't try or some variable or permutation. Are you then always kind of saying like, well what if we change this a little bit or this a little bit, or do you kind of affine arrive at something where we say like, "This is pretty much the best we've come up with and we could experiment and tinker, but it's like there's diminishing returns?"
David: Well, I think that there is going to be a point of diminishing returns reached, but it's really about what the end goal of the client operator is, and at what point they're satisfied with the results and they want to move on to another strain, or they want to move on to another goal when it comes to, you know, the experiments that they're running.
Matthew: Okay. If you were to pick, you know, some of the insights you have here from collecting the data and optimizing for strains is valuable, but like when you're working with a client for the first time, which of the insights or which of the things that you dial in, do they say wow, like what do you hear the most of in terms of like that was really great?
David: I would have to say it's really about something called production planning, which is our algorithm. It's a very interesting algorithm in TriMaster, our software control program, that aligns real estate with life cycle length. So to break that down a little bit, every square foot of canopy we have is a resource. That's what we call real estate. And each individuals strain takes a different length of time. So you know you might have a one strain that's a 74-day maturation time and another that's 49 and if you're growing 10 strains in a facility trying to figure out the optimized planting schedules, cloning schedules, harvest schedules is a arduous task.
So what production planning algorithm does is it says, listen, if you want 20% of five strains, I recommend you do 22%, 16%, 24% and so on. And it aligns both the production scheduling with the optimized scheduling for the plant, allowing increases of up to a 20% increase on the output from a facility just from aligning those different characteristics of the real estate's availability when plants are harvested and when that real estate is now open and what strain to plant in its place to align with all of the other strains in cultivation at any given time.
And so that production planning algorithm really maximizes productivity and it does have a bit of a wow factor. Now, the visual charts that it produces can be hard to follow cause there's, you know, tracing from this clone group to this growth chamber, to this harvest cycle. But when you look at what the output is, when you look at what the product of that algorithm is, it's really increased productivity but maximized quality as well because you're no longer cutting a 70 DA strain at 56 days because that's what the calendar said to do. You know, if a strain requires a certain amount of time, it gets that amount of time. And then the software kind of optimizes everything else around it.
Matthew: Oh, that's great. It's like turning over your cannabis grow to Jarvis, "Jarvis figure this out." Yeah.
David: We hope that we can be the Jarvis for everyone in the future.
Matthew: Oh yeah. Okay. So do your clients share data between each other to help each other out if they figure things out or do they use you as the layer to be like, "Hey, you know, create this as the best practice and then you can share it," or how does that work?
David: So, in terms of sharing data, that's a choice that the growers get to make themselves. You know, what we found is some growers prefer to keep that information in-house as if it's their secret sauce, their special recipe. And others feel, you know, if especially in a different market, that sharing of the data allows them to more quickly optimize their own cultivation practices. And it's more of a collaborative atmosphere. So really, that decision is up to each of our clients and we support it. Now, the nice thing is getting to look at all of that data, we have lots of insights of our own.
Matthew: Okay. So cultivators are very different. You know, some use time and planning very well, some kind of shoot from the hip and then there's the in between. You know, how much time would you say using planning resourcing, and your tools and working with you saves a typical grower, if such a thing exists?
David: You know, it saves a considerable amount of time. I'm hard pressed to put an actual number to it. What I would say is not only are they optimizing the time of the cultivators themselves on the ground, but they're also optimizing the process. In terms of the time they save, I would say we still have very close to the same amount of cultivators working. It's about a 20% reduction compared to a traditional grow, but their time is spent more working on the plants with a hands on approach. And some of the more mundane and labor intensive tasks have been automated, which means when they are working with the plants, it's about looking for IPM scouting or really, you know training the plants to allow for maximum yield or best growth. So their time is both better utilized and utilized towards a higher purpose, which is, you know, improving the plant health.
One of the things about having these reproducible environments is it minimizes the plasticity of the plant, phenotypic plasticity being the variation that occurs within the plant because of forces of the environment. So if you put a plant outside in California and you put the same exact clone outside in New York, because of differences in rainfall, elevation, sunlight, mineral content in the soil, you're gonna have two different phenotypes, two different visual representations of that same genetic constituency. And so using our system, not only are they saving time, but they're getting a very consistent output because of the granularity of control and the uniformity of the internal environment, which not only saves them a little bit of time because a process that you work out to optimize a particular strain is going to be applicable in all future cultivation, but it increases the consistency of their product and the quality of their product. And that's something I think that's a bit lacking in the industry.
Matthew: Well, you know, since you're growing in strains trying to optimize strains, it's really important to know exactly what your strain is. How do you advise clients in terms of testing to make sure that they know exactly what they have? What do you do there?
David: A great question, Matt. And there is a lot of confusion around the taxonomy or the naming structure of cannabis. What we have asked our clients to do is use third party laboratories that do genomic testing and get genotype tests because strain names change. I've had cultivators that wanted to have something unique in their markets, so they knowingly changed the name of a strain. I've had retailers switch the name of a strain because it wasn't selling as well. And unfortunately, what that means to a end consumer or a patient is that they're not sure of what they're actually getting. And so that level of uncertainty with our system is really unacceptable. So what we do is we look at the genotype, essentially the genetic fingerprint of each strain. And from there, we can optimize it. It also allows us to compare data of similar strains. I mean, we're 96% or 97% chimpanzee, right, by DNA.
So when you look at the differences within one cannabis strain to another, they're pretty small in the grand scheme of things and they have a huge impact on the overall phenotype, chemo type and so forth. So what we wanna do is look at those genotypes as kind of a starting point and then continue to optimize. But when it comes to strain names, there's so much confusion in the industry about what a strain is. And, you know, the fact that if you have one parent as a mother and one parent as a father, every seed that is produced from that pairing is going to be a particular strain. But just like the differences between siblings, you're going to get into a situation where siblings don't look identical. They're not identical by any means. And because of that, you know you might have blue dream or purple punch that look really different or have a very different chemical profile from cultivator to cultivator, from facility to facility and you layer on top of that, the phenotypic plasticity, the variability of the cultivation environments. And it's a bit of a conundrum within the industry at this point about how to deal with that level of inconsistency.
Matthew: How about fragrance or some people say odor, it depends on your point of view, if you like the smell of cannabis plants or not. But how are you advising clients to contain that? Because I know more municipalities are fining cultivators if the fragrance is just too overwhelming for the surrounding area. I know I've walked into grows and then it's like I walk into Whole Foods or something and people are staring at me because I'm like radiating like this unbelievable fragrance.
David: Listen, I totally understand. The first time I came out to Colorado, closer to a decade ago, and I went to some of the legal cannabis grows, I got back in the rental car and I couldn't figure out why it smelled like cannabis until I took my vest off and realize that on the back of my shirt I had resin smeared all over the place. And the smell was me. But to your point, the odor, which I think of is a huge benefit because aroma is one of those factors that I think consumers make decisions based upon. But when you're cultivating, it can be a hindrance and as you pointed out, a compliance problem. So what we have is some really interesting technology. It incorporates ozone, which is the production of 03 molecules, which oxidize. It's an unstable oxidizer, wants to go back to 02. And so that extra oxygen jumps off and oxidizes. Now, anything is the problem. So it will oxidize odor molecules, but it'll also oxidize electronics and it can become damaging.
So the way I would describe this is odor mitigation technology where we pass air through a chamber, it is completely oxidized, removing all of this smell bacteria and mold and fungal spores. But before that air's returned to the facility, it actually goes through what I can only characterize as a catalytic converter and oxidizing honeycomb, which then removes all of those additional oxidizers, those 01 molecules that jumped off and essentially returns clean air to the facility. So we incorporate that technology, which is called blue zone into two areas. You can put it around the facility for overall odor mitigation as well as biological biosecurity control for pathogens. But you can also integrate it into every single VFU, every single growth chamber as an option.
And that not only is gonna keep the smell down in the VFU or the growth chamber, but it's also gonna add to the air quality. It's going to improve the quality of the air. You know, again, eliminating mold spores and reducing bacterial contamination and overall, just growing in a more clean environment. And biosecurity is something that's really, really paramount to our cultivation practices to the point where all of our electronics are designed as waterproof IP67 and meet the highest underwriter laboratory certification for indoor agricultural systems, which is UL 8800, the entire system is designed to be sterilizable and watertight. So in between crop cycles, every square inch of each of those growth chambers is sanitized using essentially a spray gun. And then before the next cultivation cycle, you're starting from a very clean and sterile place, which allows you again that ongoing production of high quality and consistent cannabis.
Matthew: How do you think growing is going to evolve and change over the next three to five years? I've been amazed to see how far it's come, but where do you think it's heading? What's around the corner?
David: Well, I think as we've seen with most of the legal markets, we're looking at price compression and cultivators that were able to do very well for themselves when the prices of cannabis were higher are struggling more now. So I think there has to be a move towards a more price-conscientious way of cultivating. I also believe that consumers are gonna start demanding more consistency. If you look at any other consumer product good, when you open a bottle of Coca-Cola, it tastes like every other bottle of Coca-Cola. And currently, the marketplace is not supporting that kind of uniformity. And when I go into three different dispensaries and buy Gelato 33, it's actually very different from dispensary to dispensary.
And so I think that over the next three to five years, we're gonna start looking at how people can optimize cultivation and do so at a lower cost. How they can bring consistency to the products that they're growing. And also how they can compete on what I believe is going to be a larger scale both regionally, whether that's as MSOs operating in multiple states as separate entities or whether regulations will change and they'll be able to operate across state borders. But I think that this overarching issue of price and consistency are gonna remain regardless of how the laws fluctuate over the next three to five years. And those will become the factors that are gonna drive the success of cultivators in this space.
Matthew: David, let's turn to some personal development questions to help listeners get a better sense of who you are personally. Is there a book that's had a big impact on your life or way of thinking that you'd like to share?
David: You know, there really is. So when I was young, I fell in love with cannabis at a fairly young age and I went to school and I was gonna be a lawyer and decided that, you know, what I really wanna do was follow my passion for plants. And I went for horticulture instead, started working at a nursery that specialized with a rare South African plants. And the woman there suggested a book to me. She knew my passion for plants and she knew that I was an avid reader and she said, ''Listen, the book you want to get is called, 'So you Want to Start a Nursery' by a gentleman named Tony Avent. And it's a really fascinating book. It's really interesting. It's got a lot of funny stories, but essentially he focuses on, as a nursery owner, these are things you should consider."
And there's nothing about growing plants. This is not a book to learn how to cultivate. This is a book to learn how to be a business owner in an agricultural space. So it talks about workflow and product flow and how to set up a business plan and looking at the efficiencies of layout and reproductive process. And so overall, it craved me these fantastic insights which I carry with me today as kind of some of the tools in which I evaluate different cultivation projects. And in doing so, it was a lot of fun to read. It talks about different aspects of the nursery industry, retail versus wholesale, something very relevant to cannabis producers. Also, about something that's becoming more popular in cannabis today called liner nurseries where nurseries don't specialize in flower production. They specialize in the production of the starter plants, whether that's clones from tissue culture or vegetative propagation or whether they're just growing clones up into what we would call teenage plants or ready-to-flower plants.
But that level of specialization allows them to focus on a particular area of the agricultural process and it also allows them some level of specialization. So they're not trying to deal with the biosecurity of flower production and trim crews and things of that nature. They focus on a more narrow set. Now, you only see that kind of nursery model in states with more licenses that are granted because if you're only granting, say, eight licenses like in Utah, then you're not gonna have a nursery that's just going to specialize in the baby plants. But in more robust licensed States, it becomes an area of specialization and that area of specialization means that you might have a competitive advantage in that niche. So it was a great book that talks about all of these wonderful things and really gives you a great economic and business perspective on all agricultural businesses. So I would definitely say that that book was the one that I'd recommend.
Matthew: Is there a tool that you or your team use that you consider valuable to your productivity?
David: Yeah, if I had to pick one tool, Matt, it would be TriMaster. TriMaster is TriGrow's custom software. It's really the greatest tool I can offer any cultivator. In no way isn't it effort to replace a grower. It's really a tool to empower them. It has that production planning algorithm I mentioned and allows that controlled of each individual growth chambers environment. It's automating that data collection. So no one's out there with a clipboard. It's taking over a million data points each year. It sets up alerts and alarms for anything from temperature, humidity or different tasks that the owner, operator, facility manager or cultivator needs to know about. And it also incorporates a full ERP solution making operation of a facility easier.
And then in terms of communicating with us and our clients, that particular piece of software allows everything from video conferencing and sharing and documenting picture files or video files. Let's say, they found a past or they have a question about discoloration on a leaf, that's all recorded, that's all transmitted through the system. And it also acts as a training tool and a compliance tool. You know, recording all of your spray records and housing, all of your material safety data sheets and all of the vast standard operating procedures that TriGrow offers to our clients.
Matthew: Apart from what you do at TriGrow, what do you think is the most interesting thing going on in your field?
David: I think that right now what we're looking at as one of the most interesting things is probably the advent of breeding and cannabis. But I don't mean that there hasn't been seed breeders and very well-known and very successful breeders. But it's applying that modern agricultural science to an industry that went underground over a hundred years ago. And because of that, they didn't benefit from large scale research university information and best practices coming out of big agriculture that could only be taken advantage of in what would have been a legal climate. So I think what we're starting to see is this aggregation of data because we are now in the first point, I think, in the countries instance where large-scale commercial cannabis cultivation is really starting to be a thing.
And so when I look back at orchids and to make you aware, at one point I owned an orchid nursery and I judge with The American Orchid Society. It's one of the other plant groups that I am just so fascinated with. But with orchids, we have over 50,000 species, 250,000 hybrids and a record of every single cross going back to the 1800s. Without that data set, cannabis is kind of moving a bit in the dark right now. And what's coming to light are huge advances. You know, when it came to orchids, we found that Yellow Cattleyas with a lot of xanthophyllic metabolites would intensify the color of a purple when bred with it. That same kind of knowledge is starting to be aggregated through large-scale cannabis production, and with TriGrow offering all of that data collection and these different data points, we're hoping to be at the forefront of what is going to be the cannabis agricultural revolution from an information perspective.
And I think that is the most exciting aspect because I can optimize a particular strain using TriGrow's technology and maybe drive it from 60 grams per square foot to 70. But when you look at the modern advancements in something like sweet corn, which started as teosinte a long time ago, you know, what's going to give us a jump from 60 grams per square foot to 120 or 180 are going to be advancements in breeding made in this more modern climate. And so I think that that's a really exciting thing to kind of keep an eye on and to track over the next several years.
Matthew: Do you play music for your plants?
David: I do not. I play music for me and that the plants benefit all day long. I'm more of a grateful dead kind of era guy. So always have music on in the background.
Matthew: Yeah. And maybe just talk, one question I forgot to ask is that you have some, you said, some unique financing things you're doing. Can you just talk about that a little bit?
David: Sure. One of the areas that we recognized as an issue in the industry is really successful cultivators that wanted to expand, didn't have access to traditional lending sources. And in order to expand and to generate the capital necessary, they were often being asked to give up what I would think of as an unreasonable amount of equity. So we put together a division called TriGrow Capital and TriGrow Capital is about giving different, I guess, options to cultivators that want to expand. So we do lease models as well as more of a term loan kind of style and giving these options to growers. They don't have to collateralize with personal guarantees or with equity stakes in their business. It becomes a much easier expansion process.
And we just announced a couple of weeks ago at the San Jose trade show that we had closed an additional $30 million of equipment financing for clients and perspective clients. And so we really welcome them to explore this option because often with the expansion of the industry at the rate it's going, giving up equity can actually have a negative impact on your overall economic position. Whereas taking a very reasonable loan and being able to expand without having to divest yourself of equity can be a much better solution for producers.
Matthew: Yeah. What's a typical interest rate or the range of interest rates and terms structure there?
David: You know, in terms of the term structure, it goes anywhere from 24 to 36-month. The rates are really dependent upon the options chosen within the lease, but much more affordable than what I would say traditional cannabis loans have been as well as without that equity component.
Matthew: Okay. So but no hard numbers you can give us in terms of rates.
David: No, but I would invite you to have on our chief business development officer, Richard Weinstein, who would be happy to talk at length about the various options using that equipment financing vehicle. And he would definitely be the person to address that question,
David: I just fully agree and I think that when given the opportunity, we're so confident in our system and our technology that we're not asking for these personal guarantees. We're collateralizing the equipment. So why would you spend your hard-earned money when we're offering you ours? It's a very attractive lease rate and I think it becomes a very viable model by which you can expand. You know, our traditional costs of cultivation across the country vary because there's different amounts people play their employees, there's different utility providers. But generally, what we've seen across North America is sub $300 per pound as a cultivation cost for trimmed dried flower and often well below that. And that really affords people an opportunity because not only are they going to benefit from this lease structure where they're not putting their money at risk, but their cost of production is often gonna go down by, you know, 50% or more, sometimes 100%. I've seen costs of cultivation over $1,000 still per pound. And so it allows you to benefit on so many different levels that I think that it's really an excellent solution to expand your operations using, TriGrow, utilize the financing options from TriGrow Capital and really just to capitalize on this amazing industry which is growing so rapidly.
Matthew: Well said. Well, I wanna wrap up, but before we do, you mentioned to me before the call your spirit animal. I think now that people know that you have that answer at the ready. Please disclose what your spirit animal is.
David: I would definitely say my spirit animal is a big Kodiak bear. I'm a big guy. I'm fiercely protective of my family and just love being outdoors, so I definitely feel very comfortable aligning myself with that Kodiak bear.
Matthew: Great. You catch salmon out of a river with your bare hands over or anything like that?
David: Never with my bare hands, but I love fly fishing and fishing in general. So I'll take a day of salmon fishing anytime.
Matthew: Great. David, as we close, how can listeners learn more about TriGrow and find you online?
David: Absolutely. They can learn more at our website, which is wwwtrigrow.com, T-R-I-G-R-O-W. And if they want to learn how we can benefit them, they're welcome to send a copy of their building plans to email@example.com for a free assessment. And we can talk about a program by which TriGrow would help them optimize their cultivation in their facility and help them benefit from our services.
Matthew: That's great. You're really at the cutting edge here in terms of implementing best practices. So I mean, I don't know why anybody wouldn't take advantage of that, so thanks for coming on and educating us, David. Really appreciate it.
David: It's been my pleasure. Thank you so much for having me and have a wonderful day.
Matthew: If you enjoyed the show today, please consider leaving us a review on iTunes, Stitcher, or whatever app you might be using to listen to the show. Every five-star review helps us to bring the best guest to you. Learn more at cannainsider.com/itunes. What are the five disruptive trends that will impact the cannabis industry in the next five years? Find out with your free report at cannaninsider.com/trends. Have a suggestion for an awesome guest on CannaInsider? Simply send us an email at firstname.lastname@example.org. We'd love to hear from you.
Please do not take any information from CannaInsider or its guest as medical advice. Contact your licensed physician before taking cannabis or using it for medical treatments. Promotional consideration may be provided by select guests, advertisers, or companies featured in CannaInsider. Lastly, the host or guests on CannaInsider may or may not invest in the companies entrepreneurs profiled on the show. Please consult your licensed financial advisor before making any investment decisions.
Final disclosure to see if you're still paying attention. This little whistle jingle you're listening to will get stuck in your head for the rest of the day. Thanks for listening and look for another CannaInsider episode soon. Take care. Bye-bye.
Efficacy and rate of absorption are important variables when taking CBD, but the reality is most products on the market aren’t fast-acting and don’t have the best bioavailability.
That’s why William Kleidon set out on a mission to crack the code on a delivery method that could provide both instant relief and optimal absorption, and he did not disappoint.
With their patented immediate absorption technology, William and his team at Ojai Energetics are going where no company has gone before: water-soluble full-spectrum CBD.
The result? A highly absorbable, precisely targeted oil that’s disrupting the cannabinoid drink industry.
Learn more at https://www.cannainsider.com/ojai
- Will’s background in CBD and how he came to start Ojai Energetics
- An inside look at Ojai Energetics and its mission to offer the most targeted, bioavailable CBD on the market
- A breakdown of water-soluble CBD versus traditional fat-soluble CBD
- How Ojai Energetics achieved its rapid 30-second onset
- The many challenges Ojai has overcome to create a water-soluble full-spectrum CBD oil
- How Ojai’s water-soluble technology has overcome dosage and consistency issues with CBD drinks
- Ojai’s bitter-to-sweet dosing method and how it allows consumers to achieve their optimal dose through taste
- Will’s thoughts on intellectual property in the cannabis space and his focus on licensing Ojai’s IP versus using it solely for the company’s own products
- Where Ojai Energetics is currently at in the capital-raising process
- Where Will sees Ojai heading in the next few years and how the company’s water-soluble technology will mark the beginning of new and improved CBD drinks
Matthew: Hi. I'm Matthew Kind. Every Monday, look for a fresh new episode where I'll take you behind the scenes and interview the insiders that are shaping the rapidly evolving cannabis industry. Learn more at cannainsider.com. That's C-A-N-N-A insider.com. Now, here's your program. Just a quick note before we get started, I want to thank Will and the team at Ojai Energetics for offering a special deal on their CBD for CannaInsider listeners. When you go to cannainsider.com/ojai, you can see a special offer for a free $47 tube of sports gel when you purchase three or more bottles of their CBD oil. Again, go to cannainsider.com/ojai and you can see that offer. There's a little bit of a tricky spelling on Ojai, if you're not familiar with that, it's cannainsider.com/ojai. Now, here's your program.
When you take a CBD product, how fast do you want to feel the onset and how much you want to dial in the experience are really important variables. There are not a lot of options for quick onset and precision right now, but Will Kleidon from Ojai Energetics is here today to tell us about how he's surmounting those challenges and going where no CBD company has gone before. Will, welcome to CannaInsider.
Will: Thanks so much for having me.
Matthew: Give us a sense of geography. Where are you in the world today?
Will: I am in Ojai, California, which is about an hour and a half north of L.A. Yeah. [crosstalk [00:01:38] paradise.
Matthew: I know there's like a big hotel resort there, and it's supposed to be really nice, but I have never been there.
Will: Yeah. So, that's Ojai Valley Inn and it's awesome. Ojai, there's about, I think there's seven valleys on the planet that run east to west as opposed to north-south, and Ojai is one of them. And so it runs perpendicular to the coastal range. And so every evening when the sun sets the light refracts and then shoots up the valley and turns the entire valley pink. So it's called the pink moment. It's just a special spot, and it's 20 minutes to the ocean, you're surrounded by national forest, the condor sanctuary is right in my backyard and basically up in the mountains. And then Aldous Huxley and Krishna Merde they hung out here and lived here, it's just a cool spot.
Matthew: Yeah. That's great. So, tell us what is Ojai Energetics on a high level?
Will: Yeah. So, we are a cannabis technology company. And so we're an IP holding Co. at the parent level and I built it like a wheel and spoke model. And so we'll have our consumer packaged goods division which we have and are powered by OE which goes into power beverages or other products, and then our genetics division and all sorts of stuff, supercapacitors.
Matthew: We're gonna get into all that stuff, but I just wanted a high-level overview. Now, share a little bit about your background, how you got started down this path in the cannabis technology space.
Will: Yeah. So, in end of 2013, I was looking for a CBD product. I had met Ringo, one of the pioneers in breeding CBD a couple of years before, before he passed. And so I was familiar with CBD, but I thought I had to get it at a dispensary. And so I was googling CBD and all of a sudden it popped up on Amazon, then I went, "Oh wow. That's quite strange." And so I clicked on it, the ad and went to Amazon. It was fulfilled through Amazon, I believe, at the time and it showed up in my mailbox and I went, "Wow, this is incredible. I guess it's legal." And there was no CFA, had no idea what was in it, I think I saw there were synthetic fillers, did not feel good about wanting...didn't wanna take it. I had no idea what...and rightly so, it turns out that it was filled with heavy metal content, but did some due diligence and found how...like the legal pathways. It's just pre-2014 farm bill, so this would have been stock and stem of non-domestic hemp and thought there's gotta be someone doing it properly and searched and couldn't find anyone doing it with the integrity or standards that I felt good about taking personally. So, that was the impetus of, I said, "Well, if no one's doing it, I wanna take it. Let's do it."
Matthew: Yeah. And so one of the interesting characteristics of your CBD oil is how fast the onset is. Can you talk a little bit about that?
Will: Yeah. So, I met a chemist back in the beginning of 2014 and he said, "Hey, I figured out how to solubilize cannabinoids." I said, "Oh, that's awesome. Can we do it without synthetics because that's critical." And he goes, "No." And I said, "Okay, well let's figure that out. We need to crack that code." And we did. It took a little bit. And so we figured out how to encapsulate the cannabinoids using only certified organic plants, which is really important, when you go to solubilization, anything going down to nanoscale, the second that you add something that's synthetic or synthetically modified, you're creating something that's gonna be ranging from minimal but still notable kind of hepatic stressor, liver stressor toxicity, to like incredibly not good for the body over long-term use, such as like vast popping bubbles in the liver and the spleen and breaking down into formaldehyde and antifreeze at a cellular level. Really nasty stuff.
And so when you...the body naturally filters all that stuff out at macro scale. When you take it down nanoscale, you're sneaking it past, so, it was really important to figure out how to do this at that scale, and safely, and what's good for the environment. So we figured out how to do it with just certified organic plants and pressure. And instead of going to market right away, I went to build IP around it. And so this technology enables it to get in immediately upon contact with the mucosa membrane. And most users will feel and actually feel, most people have never felt CBD because the bioavailability is so poor. No one's actually taking a proper dose. I think what people are really feeling are the trace amounts of THC as well as placebo.
But anyways, you'll, like legitimately most legitimately feel it. And it can affect in multitude of different ways with under 30 seconds with this technology, which has changed the game. And that was...We were doing that since 2014. And that it also enables the, because of the onset time, there's actually multiple bell curves of efficacy like most bioactives tend to have a bell curve effect. So more can be less effective and so with less and there's actually more than one of them, multiple, and what we've discovered is this phenomena, because of our immediate onset and absorption where the flavor will actually modulate on the spot and you will trace out the bell curves and it will go from bitter when you're in a valley, so less effective, and it'll get sweeter and sweeter and sweeter till it's cloyingly sweet, almost too sweet at the peak, like honey, and then it'll go back down to bitter again and then back up to sweet. And because these bell curves are actually not static, they're changing on a daily basis, this enables you to pinpoint a perfect dose for your body every time. Whereas where like a fat-based formulation, or even a liposomal, or slower onset formulation, you're really actually shooting in the dark and you're playing a game of averages, so some days you're going to be in a valley and someday you're gonna be in a peak. And with certain situations, you really don't want to be missing efficaciousness in dosage.
Matthew: Yeah. That is very different compared to most CBD oil. So, just to kinda recap what you're saying there is that, as you take up amount that's not really helpful or is not doing much for you, it's bitter. And as you approach optimal, it gets sweeter and sweeter and then they're at the apex, it is sweetest. And so you're getting this feedback loop on your optimal dose.
Will: Yup. And if you keep going, it will start to get better again until it's a hundred percent bitter, and then back up the sweet, and then, so each sweet spot, like each peak, is just more fuel for the endocannabinoid system to continue running triage in the body. So the first sweet spot may, you know, have systems one, two, and three on the list. The second one would have one, two, three, four, five, six. If you started there...If you started with one, it would go to three, four, five, six, seven, eight, nine for the second bell curve, etc. So each sweet spot just means more systems the body can pull into balance at once.
Matthew: That is really unusual and cool. I mean, I wish I had a lot of, you know...good thing that like chocolate doesn't go that way because I wouldn't like after one or two bites, be like, "You're good, dude." I'd be like, "Ignore."
Will: And you know that chocolate has anandamide in it, right?
Matthew: It has what?
Matthew: No, tell me. Tell me what that is.
Will: Yeah. So, our internal can...Chocolate is a bizarre plant, but it actually contains this compound called anandamide, which is our body's endogenous THC. So, we produce anandamide and then another compound called 2-AG inside of our body. And those are endogenous cannabinoids. Now, likely we produce more, but those are the two that we know of so far. And so it's one of the only places in nature that contains, for plants, the only one I believe that we know of that has anandamide in it. And then the other form would be truffles. So, black truffles contain anandamide. So, it kind of could explain our love affair of truffles and chocolate as a species is because they're actually, they contain these compounds that we've actually really need in artificially created deficiency of since prohibition of the cannabis plant in the '40s, because it used to be the most ubiquitously grown vegetable on the planet by every culture for millennia. Minus the Inuit, I haven't found any evidence of pre-European contact Inuit hemp growing or cannabis growing.
But, other than that, and then pretty much every culture was growing it for millennia and then feeding it to the animals. In fact, the oldest recipe book that was printed is a Roman cookbook that contains a cannabis cooking recipe. But the predominant way, that'll be direct consumption, the predominant way of consuming that cannabinoids of high CBD, low THC, full spectrum would be feeding it to the animals and then eating the animals and their byproducts and decarboxylating them that way. And so Colorado did a prerun, there's a study that shows it has up to 1% CBD content per egg, which is substantial for hemp-fed chickens. And that's like 250 milligrams of CBD per egg.
And so our ancestors ate these regularly when the CBD boosts the anandamide levels in the body and creeps the circulation. So we've seen this kind of artificially-induced nutrient deficiency, this is my hypothesis. And, yeah, it's pretty fascinating. And that explains why like, all the data shows you really need 500 milligrams of CBD to minimumly engage the endocannabinoid system with...So, most people are getting nowhere near enough. And with our technique of encapsulation, the bioavailability skyrockets because it avoids the liver and gets into the bloodstream immediately. And so, when you take, so yeah, the anandamide in chocolate, the sources when you take it with CBD, it actually enhances the uptake and the half-life of the anandamide. So CBD and chocolate go very well together.
Matthew: So if your liver is kinda like Alcatraz, normally capturing like things and like checking it out. This is like an insect flying through Alcatraz, it can just go through past all the checkpoints, and security guards, and barbed wires.
Will: Straight in. And then once it's in and past the water layer, the water layer is like the barbed wire, the gatekeeper, the guards of Alcatraz. Once it's in, it can actually mobilize throughout the body very effectively as well. So, first step is getting it in, the second step is how well is it utilized once it's in.
Matthew: Okay. So is there any trade-offs on this method that you've discovered in this IP you've put together? Like, yes, it does this better, but because of that, it's not as good here. It's more difficult to create and manufacture, or anything like that?
Will: So, we can totally scale it. We're actually set up. We're in R&D with some of the biggest beverage companies on the planet because it's fully...you can put it in some water and it will homogenize perfectly, and it won't separate. We just got the patent issued backed by Wilson Sonsini for all fluidic encapsulation and cannabinoid. So, beyond doing it the organic method, which we will only ever do due to safety, but we will help the marketplace because there are people doing it with methods that are using like nano-petroleum which is not okay. But will help stand point for regular use.
But no, we can do 30,000 gallons a day right now, and that's nowhere near capacity. So, yet to discover...Basically what it is is it's doing the same exact, our technique does it at the same exact encapsulation size that the body does naturally. So when you eat a regular fat-based formulation, or actually any fat, it's gonna sit in the gut and it can't get past the water layer, right? Which is like the gatekeeper. But once the liver comes in and then it will stimulate bile secretion through gallbladder, but it's generated in the liver, it will actually nanoencapsulate, the bile does, and creates a nanoemulsion at 40 nanometers inside the body, inside the gut. And then it can start, once it's water compatible, it makes it past the water layer, it gets absorbed in. So, we're actually utilizing the same technique as nature, just doing it outside of the body with certified organic plants. And so we're getting it in as if like immediately bypass. The body's just not efficient at doing that, so 90% of what is there. So if you ate 20 milligrams of fat-based CBD, 90% of that gets destroyed while it's waiting in the gut, some through the first pass of the enzymes and the liver bile, but also through like the acid of the stomach, etc. And so we're just much more efficient at it. But that's why it's so effective. It's utilizing the same tech essentially, it's an organic tech.
Matthew: So, the CBD drink market really hasn't taken off in a big way yet. Do you think this type...Is this what we've been waiting for in terms of...because everybody knows when they drink a Budweiser or a glass of Merlot. Yeah. Unless you're in like first time, your first time drinking, you can kind of say like, "Oh, this is how I can expect to feel after one Budweiser." And there's no, there's no way you can really do that with so much different things going on with cannabis and CBD. But you could do it, you can get close, but you just can't really dial it in precisely. So, yes. Is this what we're waiting for in terms of drinks then? Like...
Will: Yeah. I'd say there's a two fold. One is like...so, for example Suja, which is pretty substantial beverage company. I don't know if you're familiar, they do organic juices. And so they came to us and started with us and went to R&D and they went out trying to find a cheaper option and came back and they said, "That was the most hellacious customer journey we've ever been on. Talked to 50 suppliers. You're the only one that actually works and knows what they're talking about. And we don't want to violate any art or patents. So, we're happy to pay it forward and put on our letterhead our customer journey on how Ojai is the only way to go when it comes to beverage." So, that was nice.
And yeah, there's definitely an issue of people jumping in and getting like, seeing the green rush and a lot of it is like resupply, but they have no idea what they're doing. They're not going to be stable. Like, they'll separate out, or they're going to be violating our art. And so like, from a technical support side, people don't get...they're not...They're just trying to make a buck as opposed to really caring about the consumer, and the space, and the environment. And so, I think that's been a point that's kinda held things back. And then also it's the trepidatiousness of big box to roll out distribution, which they're ready to do. It's really the FDA, it's the big box side. The companies are waiting, the big players, to distribute, but they don't want to do like checkerboard distribution. And so, with the FDA opinion clarifying, because really the entire clause that they reference on the 201ff3bii, that their opinion is based on, the only IMD, or investigational new drug trial that took place that they reference is for an isolate. It's an isolate CBD product, and thus it's a different article from a full-spectrum or broad-spectrum hemp extract. And so that's gonna be clarified, and then we're going to see some of the biggest beverage companies on the planet rollout skews. And we're in R&D with them.
Matthew: Yeah. So, let's talk a little bit about intellectual property or IP. And, you know, most of the cannabis companies I speak with are more product-oriented first and then they, the idea of IP pops in their head, but it's always kind of a caboose. It's not the locomotive. And you seem to have a different orientation around the IP. Can you tell me how you think about IP and your kind of strategy with it?
Will: Yeah. So, in IP, one thing is, like, if you put a product to market, it is now considered prior art against yourself. Meaning, if you out live and you sell it and then you try and patent it, your selling it counts as against yourself and it says, "No. Not new. You already did it." So, IP law is not necessarily logical. But it is driven via logic if that makes sense. So, that's one part of the strategy is not playing checkers and then playing chess. And our ultimate goal is to be a steward of the plant and for the planet. And that's what we do and will continue to. And then at the right time open source. So, our IP attorneys are ranked number one globally for biotech as well as just general IP enforcement and development. They represent Salesforce and worked with Apple and all the Silicon Valley early players as well as Pfizer and the big guys. And so working with them since 2014, the focus was, I basically I channeled my entrepreneurial kind of excitement into developing IP. And so now our portfolio ranges from like the encapsulation techniques of cannabinoids and so like, it's not just applicable to CBD, it's for all cannabinoids. And we're not gonna roll it out until it's federally legal. But with the...I can tell you that 0.3 milligrams of THC gets you completely off the ground in 30 seconds.
Matthew: It's just the delivery, the delivery [inaudible [00:22:48].
Will: Consistently at top. Yeah. It's basically but it bypasses. It's not like an edible where, you know, like it becomes Δ-11, it just is all Δ-9. So we are gonna have like beverages where you know exactly what your dosage is and the user can feel it in 30 seconds and it's just like they had a dab or a vape, but it's through a consumable [crosstalk 00:23:07], but yes, that's pretty...
Matthew: So, that would change really cultivation quite a bit too then.
Will: Yeah. You can use a hundredth of it.
Matthew: Oh my God. I just heard a thousand cultivators sigh out loud.
Will: I think we're nowhere near like capacity. I mean, like, we're talking about an incredibly bottle-necked market. And once full legalization takes globally, I don't think...I do believe cultivation, unfortunately, just like any industry, it will go down to commodity. I don't believe it's gonna...that, I liken it to cannabis to grapes and in fact TOR and growing style impacts the epigenetic expression and the terpene profile even more so than grapes. I think we'll probably piss more inventors off. They work very well together. And that's, I think it has a whole new scope of market. But there's always gonna be two buck chuck, but the craft boutique delicious micro cultivars are never gonna go away. I think that the...particularly in this industry, people do not want to have just a generic product. There's gonna be these craft micro growers and I think that's here to stay. Anyways. So yeah. Do you wanna keep going on the IP?
Matthew: Yeah, I mean this is powerful stuff with the IP. I think there's so many applications. Is there any applications you see coming down the road for cannabis technology that's maybe not on people's radar, but it's around the corner in the next three to five years that's gonna make a big impact?
Will: Yeah. Yes. So, we figured out the antidote to THC intoxication.
Matthew: Oh. Wow. What's that?
Will: So, we can get the user through our prelim completely sober in under five minutes, and we believe with nasal it should be 30 seconds. And we got the patent issued, and it's a pregnenolone, which is a neurosteroid derived from yams in conjunction with all cannabinoids. So, actually the patent issued is not limited to use as antidote and there's going to be a lot of uses on biotech as well. And effectively it basically, the CBD shuts down agonization, these one receptors that THC is agonizing on the serotonin front, and then the pregnenolone blocks the CB1. And both are selective and they're completely safe. In fact, the humans, we have a built-in safety mechanism where people can actually smoke themselves sober. It takes a lot, but it's possible. And what happens is when there's too much agonization of THC on CB1, the brain floods itself with pregnenolone. Unfortunately, the people who have eaten one too many cookies, they have not eaten close to as many cookies as they need you to get that response to kick in. But it's our built-in mechanism to prevent toxicity. It's one of the likely reasons why we don't have any...there's not a real toxicity with the plant where it's totally safe. It just they just think they're dead. They're actually totally safe.
Matthew: They wish they die sometimes.
Will: So, anyways, that's the matter. We can get it in and tested it on L.A. Cannabis enforcement officials.
Matthew: I'm just waiting for the day when I can take something that has like a 30 second onset or three-minute onset for motion sick, because I fly all the time, but I get motion sick every time I do.
Will: All right. Have you taken our elixir.
Matthew: I haven't. I have some. I'm gonna try it here. And someone on the team has tried it and they gave good thumbs up, but I haven't tried it. And I wanna try that. But then I'm thinking, in the future it'd be nice to be like almost not...Like almost like a twilight sleep for flying and then maybe take one of these nasal sprays or something and have it flush out.
Will: Pop out.
Matthew: Yeah. Pop out. That would be like just, "Oh, we're landing." Like, "Pshh." Right after landing.
Will: There's this book, this is Steven who's one of our advisors and one of my friends, he just wrote this book called...he wrote the book, "Abundance" with Peter, and "Bold," and "Stealing Fire," which is all about...and "Rise of Superman," which is like flow and human performance. He just wrote this, in my opinion a masterpiece. It's just brilliant. This book called "Last Tango in Cyberspace." And it's a superhero. It's like a cyberpunk future kind of Philip K. Dick-esque. But all of the tech in there is like actual stuff he knows. He knows the people who are making all this tech and it's crazy how close to the...We are really in the future, right? But anyways, this superhero, his power is like hyper-empathy and it's activated by smoking cannabis. And one of the pieces in the buck is Jamaica Airlines where there's no kids allowed and it's all cannabis-friendly.
Matthew: Wow. Like Jamaica itself.
Will: Anyways, that's what I imagine when you talk about you can go up and have the...Essentially, yeah, we have altitude control with our tech where you can go immediately up and you can come down immediately as well.
Matthew: Yeah. That's very attractive to be able to dial that in for specific use cases like we're talking about right here. That would be super valuable.
Will: Yeah. And then...Go ahead
Matthew: And then let's talk a little bit about your plans for THC products. Like, we've talked about CBD quite a bit. I mean, this is all cannabinoid science, but what about THC?
Will: Yeah. So, as soon as it's federally legal or the States Act emerges around the corner, we will open up the tech. Like I said, I've done a, not in our lab, but just a bench experienced where 0.3 milligrams works in 30 seconds and we can scale that. And so, essentially, like you were talking about, I see it going to metered dosages where you know that a beer is going to affect like this, right? And so that's going to be the future I think of consumption. Also what's unique with our tech is that...So, terpenes direct cannabinoids to particular payload sites in the body, and so you really notice this with the people vaporizing or smoking is that, you know, indica tends to be sedative, whereas sativa tends to be uplifting, and cerebral, and energizing.
And the difference between those two strains is not really the minor cannabinoids at all, nor the THC content or CBD content, it's actually the terpene variance. And so I talked to Michelle Saxton, is probably one of the leading researchers on this, but I called her up in 2015 and I had this, I was walking and I had this insight of, I saw that the terpenes as being like little tugboats to the cannabinoids and directing them where they go in the body to the different CB receptors. And I called her and she had, at that point that, and that that's what she was finding in her studies. And so what we discovered, because of the immediate onset, you can actually custom curate moods and affect, on the spot just using terpenes, whether they're from cannabis or not, and viscerally different effects. So, you can feel sedative and then you can take the CBD or the THC and then it would, you smell a menthol or peppermint in a beverage, and it would hit like uplifting and it shifts gears. So, it can be customized mood as well as on the medical front in biotech, you can do custom payload delivery sites. So, I think that's going to be just...being able to drink your mood effect on the spot and then shift it up, I think that's gonna be a major trend in the future.
Will: Yeah. It's pretty cool. And because terpenes are not bioavailable, they're even less absorbed via ingestion. So, like a cookie is a cookie, right? Like, you can market that it's like an indica cookie or a sativa cookie, but you're not getting the terpenes. They're even less bioavailable than the cannabinoids, really not getting in or absorbed through ingestion. And the real way that they actually bioactively respond in the body is actually through olfactory and crossing blood-brain at the hypothalamus and then deploying out. And so you need that inhalation technique. So, if you drink it, you're actually pulling it up through the mouth cavity and then through olfactory, and then because of the immediate absorption with our tech, the timing syncs up and you can play that way.
Matthew: This is amazing stuff. It's crazy to think how fast this is evolving. It just, like you said, that book, Peter Diamandis, that kind of futurist you're talking about, and his books and stuff, it's very...it kind of I think about this. And also, you and I were talking before the call about your supercapacitor made out of hemp. Can you talk a little bit about that? Your idea?
Will: Yeah. Yeah. So, back in 2014 at BBC, the BBC ran an article about making supercapacitor graphene equivalent, actually outperforming graphene out of hemp. I was like, "Of course, this plant is crazy. What doesn't it do?" And so these Canadians had figured it out. But then...So I was waiting. I thought, this is gonna change the entire face of the planet, right? The implications are just absolutely massive, and nothing happened. And so I did some due diligence and looked in and went to our RP group and brought in a PhD from Stanford in Molecular Battery Engineering to look at it, and I said, "What's going on? Is there a scale issue?" And he goes, "100%." Looked at their art, and he's like, "You can't scale that." And so we figured out how to actually scale it and bring it to at scale to production. And Lawrence Livermore Berkeley Labs, the National Labs looked at it and they went, "Oh my goodness, this is going to work." So we're in Creda. And so once we really pull the trigger, they believe they can get it in about eight months to commercial scale for stage one. And so our IP also holds it on utility front. So, for rockets, and cars, and cell phones, and city grids, and jets, and all sorts of cool stuff.
Matthew: Talk about how that might transform, like the aviation industry.
Will: Yeah. So, the reason we don't have electric jets is because the battery, or it's like big jets, right? They have like a solar-powered little plane that's fairly new, right? But I was actually at a bar in Texas and I was just thinking like, "Why don't we have electric planes?" And I looked around and everyone had these name tags on. And so I said, "Okay, so what..." I asked the guy next to me and said, "What convention is this?" And he said, "Oh, it's in aerospace." I said, "Oh, that's cool." I was like, "What do you do?" He goes, "Well, I design and build jets." And I was saying, "Awesome. Wait. Can I ask you a question? Why don't we have electric jets?" And he said, "Well, the batteries would be too heavy." And I said, "Okay. So, in theory, if we 3D printed graphene supercapacitors into the fuselage of the plane, could you have an effective electric jet?" And he goes, "100%." And I said, "The reason why we don't is because the, like the graphene's too expensive?" And he goes, "Yep, 100%." I said, "Okay, thank you." And so that's in our IP portfolio.
So, in theory, we will have electric jets with it. I mean, we can 3D print using hemp plastics for the components, which some, I think, airlines are beginning to use. I know Audi is doing hemp PLAs and Henry Ford made his Model T out of a hemp plant. So, I'm an optimist. I think the future is incredibly bright. I think this plant has catalyzed us through kind of each epoch, and provided a technological advancement to expand and simultaneously provided the micronutrients to buffer the oxidative stress that comes with that. And we artificially pulled it in the '40s, but I think it's gonna enable us to have appropriate technologies and simultaneously leading to a cultural kind of shift and integrate the indigenous wisdom and all sorts of things that we get to grow as a ecological species, right? We are functions of nature. Yeah. And I really do see that we've got the tech and that's why the mission of the company is to be a part of that catalyzing of ultimately the dream and which we'll do is when the time is right open source where you can 3D print your battery for your house or your car for free from the cloud out of the hemp that's grown locally. And that's our mission vision piece.
Matthew: And where are you in the capital-raising process?
Will: So, we've done series A, I've got a great, incredible new team and an existing team are all superheroes. And I've got the Tom Hicks who is president of Naked Juice and then also Ryan Hansen's the non-energy division inside of Monster. So, he was president of Naked Juice, sold to Pepsi, brought it Pepsi. And Hansen's brought that to Coke. He's now our chief commercialization officer, our chief growth, and then our new CFO, Allan George was with North Castle private equity with Naked Juice. And then was with Hansen's to Coke. And then TPG tapped him to take elf Cosmetics public, which he did. And now he's in-house and they've worked together for 20 years. They're just absolute rockstar industry experts.
And so we're putting together a...And then also my friend Tim Brown, who is CEO of Nestle North America Waters, he's partnered with us to help accelerate. And so we've really got the all-star crew for CPG and we're doing a 15-mil bridge and we've created really cool instruments. It's really friendly for all parties. And that's going to be the last entry point into parent Co. And I'm doing it because I don't wanna dilute CPG. We've been running that brand on stealth mode and it's just exploded through word of mouth because it actually works. And that's the Ojai Energetics brand. And so we get all the time, people are like, "Oh my God, I didn't think CBD worked. This is what CBD feels like?" Due to the bioavailability. And so yeah, there's that. And then we're gonna just sprint out, build up those out, and it's a lot of fun.
Matthew: Are you still looking for accredited investors for the capital raising process or...?
Will: Yeah. We are open. Yes. We've got a syndicate. So, 100%, we're in that process and it's moving along, but we are interested.
Matthew: Okay. And I'll ask you how accredited investors can contact you when we close. But before we do that, let's have a few personal development questions where listeners can, you know, get a sense of who you are personally. We talked about abundance and Peter Diamandis' book "Abundance" and he has a few other books. Is there any book that's had a big impact on your life or your way of thinking either personally or as an entrepreneur that you'd like to share?
Will: Yeah. Buckminster Fuller's "Operating Manual for Spaceship Earth." It's incredibly dense, but it's amazing. I struggle with it, but he's one of my heroes. He's a systems thinker, but extensively talking about how it's a systems design issue on the planet, it's not so much a resource issue at all. And one of his quotes is like, "When we divest from weaponry and invest in livingry, we'll have a completely different planet that's enjoyable." He's brilliant. So yeah, that one, for sure, is probably one of my favorites.
Will: Yeah. And, you know, I see... So like, I liken us to, we're just parts of nature, right? We're weird. And then "Behave" is a book I'm reading right now by Sapolsky, and it's incredible too. It's like...do you wanna... That is the guide of why humans are so weird, and we do what we do from a behavioral perspective of like, we can be incredibly kind and incredibly awful with the wind. And it's explaining the neuroscience behind it.
But the metaphor I like is like a caterpillar. And if you look at a caterpillar in terms of how it behaves in the ecology, it's actually a parasite. It will just consume, and consume, and consume, and consume, and amass all this energy, and it will actually, can nearly take it down the keystone species of the ecosystem, meaning it will collapse the entire ecosystem. But this is just its nature, right? And then before it does that, it will, before it collapses the ecology it will break down into...go into a cocoon and then the chrysalis and it turns into a mush, but it maintains the old operating system or immune system of the caterpillar. But these new cells begin to emerge called Imaginal cells, and they're carrying the DNA of its future self, which is the butterfly, but initially the old operating system, and we can liken this to paradigm on the planet of human operating system. Sees it as a threat, and so it kills it off. But then they're persistent, and then thankfully, as part of our natural mechanism is that the tipping point happens around 14% and carries through nature on average. And you don't need a 50% shift, otherwise we would never get anywhere. But the 14%, around 14% of regeneration of these Imaginal cells, all of a sudden the immune system of the caterpillar goes, "Hold on. That's actually a future version of myself. And I need to help it continue for me to survive." And so it actually enable...it switches from killing it to creating this protection buffer and enables it to recode it into these new cells. And they're still raw pockets. But at that point, it's exponential. And it fully recodes into this butterfly and it has to like break through and gain its wing strength by pushing, and it's uncomfortable, but it breaks through the chrysalis. And all of a sudden it's this...Now it's a pollinator, and in fact it's actually building multiple ecosystems.
And it goes from nearly collapsing one, but it needed to amass all of that energy to goes through such a massive transformation to then be able to actually protect and build multitudes of the ecosystems. And I see us as, and actually mycorrhizal fungi has a similar process. It starts a parasitic with a plant and then becomes a symbiotic life force. And I believe that we are...we've hit that critical mass. We're the Imaginal cells, we're recoding the model, it's happening everywhere. And we're moving into a symbiotic stage of organism where we can work in harmony. And so, not to judge where we're coming from, it's just is where we come from as part of the natural cycles and processes to then emerge. I believe that the Internet, which was brought about by the DoD, right? Has now led people to see that actually, hold on. There's more than enough resources all over, we're actually, we're all family and, you know, everyone just wants to eat and skateboard or whatever. It's bringing us closer and obviously there's oscillations and breaths, but there's ups and downs, right? But ultimately we're living on less war-based planet than ever before. That standard of living is getting higher everywhere overall. And I do believe that we're emerging as these symbiotic potential beings to like really build an incredible model. And we're on our way.
Matthew: That's awesome dude. Great explanation of the Imaginal cells. I had not heard that a description before. Well done.
Will: It built on from Barbara Marx Hubbard who has passed. I wish I met her, but, yeah.
Matthew: And, here's a Peter Thiel question for you. What is one thought you have that most people would disagree with you on? It can be about anything, not necessarily about the cannabis industry.
Will: Initially, I think, saying that we're going through a, we're actually, the litmus test of America is we're actually on an upswing despite the appearances. I liken it to like a herxheimer response, which is a term, it started from Lyme's disease. But, when you start detoxing and you start getting healthier and you move in a healthy direction, let's say you do a juice fast, or you just start taking steps to get healthier, the toxins that are stored deep within start coming and mobilizing and going to the surface. And you feel like shit, pardon my French. You get sicker. You seem like you're getting sicker, but in fact, you're actually getting healthier. And it's much easier...you have to be vigilant in this process in the herxheimer because you gotta pay attention because you can get actually harmed from these that are mobilizing and coming out.
But it's counterintuitive. You're actually not getting sicker, you're getting healthier, but you feel like you're getting sicker. And I believe that we're witnessing this another shift of where we had this ear to the collective unconscious, all of these, the things that we're now experiencing of racism and all sorts of the creepy crawlies of the human condition are coming out to the surface where everyone's talking about it. And it's a paradoxical theory of change where you cannot change something you don't accept exists. And I believe that it's much...we're actually on an overall health trend, becoming more aware, more engaged, more awake, more compassionate, and we're just seeing these things that were there. They were just hidden and now they're getting illuminated. And if we're more sensitive to it, so it feels like it's getting worse. But in reality, it's part of the necessary process to jump and grow to the next level. And it doesn't mean to go, to not be vigilant and not pay attention. In fact, the opposite. But it...Yeah.
Matthew: That's really...You know, I know what you're talking about there because I've done a seven-day juice cleanse. I've done many, but the longest one I did was seven days where I could only drink juice. And what you're talking about is what I called a toxic crisis.
Will: Yeah. Day three, right?
Matthew: Yeah. Day three. Your tongue turns into this huge swollen white thing, and you feel like crap, and then like some point you start getting very zen and you're like, "I'm not..." And you actually crave the foods that are coming out. Like, "I had a cheeseburger a month ago and I feel like I'm craving that." And it's so weird how that works. And you go through and have this almost quasi-psychedelic zen thing that happens and are like, "Oh, I can see..." Like, "I can't..." Like, "I'm so glad I made it through that and..." But it's good to know that's on the other side because it just it really gets acute there for a while. So, well said. Now, as we close, Will, let listeners know, if they're accredited investors, how to connect with you and then for everybody that's interested in your products, how they can find them.
Will: Yeah. Great. So, ojaienergetics.com for our products. And then for accredited investors, if they reach out to info@ojai, O-J-A-I, energetics, E-N-E-R-G-E-T-I-C-S .com, someone will reach out.
Matthew: Great. Well, Will, you've got so much going on here. We're gonna have to catch up at some point in the future and find out how all that's going. Good luck with everything and keep us updated.
Will: Thanks so much.
Matthew: If you enjoyed the show today, please consider leaving us a review on iTunes, Stitcher, or whatever app you might be using to listen to the show. Every five-star review helps us to bring the best guest to you. Learn more at cannainsider.com/iTunes. What are the five disruptive trends that will impact the cannabis industry in the next five years? Find out with your free report at cannainsider.com/trends. Have a suggestion for an awesome guest on CannaInsider? Simply send us an email at email@example.com. We'd love to hear from you. Please do not take any information from CannaInsider or its guests as medical advice. Contact your licensed physician before taking cannabis or using it for medical treatments.
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When outfitting a modern cultivation facility, lighting is one of the most important investments.
With the right combination of spectrum and power, good lighting not only maximizes yield but also optimizes plant quality for home and commercial growers alike.
But how do you stay up to date on all the advancements of indoor lighting and determine the best scheme for your facility?
Here to help us tackle this is Noah Miller of Black Dog LED, makers of the best full-spectrum LED grow lights on the market.
Learn more at https://www.blackdogled.com
- Noah’s background in pharmaceuticals and how he came to enter the cannabis space
- An inside look at Black Dog LED and its mission to offer cannabis growers the best lighting possible
- A breakdown of LED lighting vs. traditional lighting solutions like HID including efficiency, cost, and ROI
- The evolution of indoor lighting in the cannabis industry and why LED has become the standard
- Noah’s advice on indoor lighting for home growers versus commercial growers
- Mistakes Noah sees growers make when trying to create a successful cultivation facility
- Misconceptions and myths surrounding LED lighting and Noah’s continual efforts to change public perception
- Black Dog’s research on LED efficiency and ways in which the company is working to optimize facility lighting for greater yields
- Where Noah sees indoor lighting heading in the next few years and what that could mean for home and commercial growers
Matthew: Hi, I'm Matthew Kind. Every Monday, look for a fresh, new episode where I'll take you behind the scenes and interview the insiders that are shaping the rapidly evolving cannabis industry. Learn more at cannainsinder.com, that's cannainsider.com. Now, here's your program. When outfitting a modern cultivation facility, lighting is one of the biggest investments, but how do you stay abreast of all the advancements in indoor lighting? Here to help us tackle that question is Noah Miller of Black Dog LED. Noah, welcome back to CannaInsider.
Noah: Thanks Matt. Good to be here.
Matthew: Give us a sense of geography where you sit in today.
Noah: I'm actually sitting just outside of Boulder in Niwot, Colorado in our new location.
Matthew: Great. And what is Black Dog LED at a high level?
Noah: Well, at a real high level, it was originally conceived to bring the best lighting possible to the cannabis grower, simply not even necessarily LED, whatever the best lighting technology was, deliver that to the cannabis grower.
Matthew: Okay. And can you share just a little bit about your background and journey and how you got into the cannabis space and to Black Dog?
Noah: I guess none of us really yet have started our careers in cannabis, those of us that have been working for a while. So like most, I got lucky, I made the choice to get into cannabis. I was in Colorado back when recreational was voted on. I was actually visiting here doing a teacher training, actually a yoga instructor teacher training. So I was in Colorado doing that. I was working in pharma at the time and I saw recreational pass in Colorado and when they pass that, I thought there's no way I'm going to miss the opportunity to be involved in, one, such an important industry, and two, such a new and dynamic industry. So I wanted to be there and I felt I couldn't be at a better place, ground zero. So I quit my job, moved to Colorado immediately and jumped into the industry at that point.
Matthew: That's great. That sounds very similar to my story. So for listeners that are not familiar with cannabis or indoor lighting, how can you help them understand LEDs and how they compare to traditional lighting solutions, and why more people are talking about LED versus traditional lighting right now?
Noah: Yeah. So if you're not growing outside under the giant free thermonuclear reactor in the sky that we call the sun, then you do need artificial lighting, right? And so with regard to that, once you know you need artificial lighting, you do have a plethora of choices, you know, at your disposal today. Back in the day when I first got involved in cannabis a while back, HPS, metal halide, you know, CFL where your choices, you pretty much had that and for flowering, it was pretty much HPS at the time. Luckily with LED, what it offers is just another alternative, but it has a future in that HPS is very, very old technology. It doesn't have a path to more efficiency. Just the technology is inherently inefficient. So LED is now offering a way for growers that want to be more efficient and even produce a higher quality product thanks to the spectrum that we can provide with LED. That's what LED brings to the table really is the ability to produce at a lower cost and even a higher quality product if you use the right LED.
Matthew: Okay. And just for people that aren't familiar, this is high-pressure sodium grow lights is what we're talking about, HPS, right?
Noah: Yeah. Sorry, sorry. HID is the overarching term which is high-intensity discharge lighting. So that would encompass your metal halide, your HPS, and all of that. And HPS, as I was referencing for flowering, is yes, a high-pressure sodium bulb.
Matthew: Okay. And when you were on the show a few years back, the conversation about LEDs was much different. And I still remember getting emails after the episode where people were like, "LED's the future, everything else stinks." And then the other half was like, "This stuff's gonna fade away." Like, "It's not gonna stay around. People are gonna realize that it's not as good." And that has definitely changed, that conversation has changed. Can you talk about like how it's changed and how the conversation's evolved over the...I think it's been two years since you've been on, I would guess. And, you know, what the conversations are like now compared to what they were like two years ago?
Noah: Yeah. We've been, as I said, doing this about nine years. You know, Black Dog's getting close to 10 years now at this point we've been doing LED grow lights just for cannabis. And as you pointed out, Matt, the conversation really has changed a lot and that's the best way to say it. If I rewind all the way back, which I don't wanna go all the way back, but let's do that and say, when I went to my first couple of trade shows, we're talking back Cannabis Cup. So some of the original shows before. Now we have some great, amazing business shows but back then it was a little more lifestyle-type shows.
And the conversation always inevitably started out at least, you know, let's say 95% of the time the question you got was, do LEDs work or can LEDs flower? Now we just don't get that question anymore. We don't get people asking us to do tests against HPS. We don't get people, when they first approach us, asking those questions. What they ask is why you are LED or what makes your LED different than the other ones on the market, and we start there. So the conversation has definitely changed. People are really starting to accept LED as a viable alternative and actually a better alternative than the traditional lighting.
Matthew: And what do you think is driving that? I mean, what's the biggest...if you had to pick one variable as the reason why LED adoption is taking place, is it because of the electricity savings or some sort of shift in, you know, how the conversation's taking place? Like what has been the primary reason this conversation has changed?
Noah: Well, the answer there is undoubtedly yes, Matt, all those are correct. But you're asking the right question, which is what's really driving it, and I'll give you my opinion. I wanna be clear, it's an opinion. There's not a lot of data yet to back all of this up. As any emerging market trends, they're kind of being looked at today and we don't know what's driving all of them. From being in the industry though since we started, I would say that it's mostly driven by what I love, capitalism. So we've got all these grows, we've got maturing markets, even new markets, new states that are coming on with either medical or adult-use laws. They know these investors, the people that are setting up those grows. They understand this is not some underground operation. This is not some short-term thing. It's a longer-term play. You know, whether they're motivated by the short-term money, like making money as it goes or they're looking more, you know, to be bought out as the industry develops, regardless, they're getting into it for more than a harvest. They're looking at it more as a business and they're doing the proper business assessment you would do, you know, outside of cannabis. If you were starting in business, you'd put a business plan together and hopefully, they're doing that in cannabis as well. And most of our customers are or have done that.
And in doing that, you would go through the process of looking at your different options for equipment and furnishing and fixture and all that fun stuff. And in that assessment, you would hopefully do some kind of assessment on your lighting options and you would find that it does...while it costs more out of the gate, the capital expenditure is higher upfront, it does more than pay for itself down the road. So I'd say that financial aspect is driving a lot of it because they know they're gonna need to stay competitive in a competitive landscape and whether it's that way in their market today or it will be that way in the future, they know that and they're looking, I think, to gain a competitive advantage both, again, in terms of driving their costs down and delivering a better product to market.
Matthew: And I wanna put on my, like, CFO cap here and talk about just ROI terms. Where are we in terms of price for traditional lighting compared to LEDs in terms of rate of return payback period? How does the pricing equation work?
Noah: That's a good question in that we're terrible. I'll be honest. So we don't hide from it, the fact we are, you know, four or five, six times more expensive than HPS if you look at a basic HPS, like, double-ended, you know, fixture these days. But luckily, as you pointed out, if you do the ROI analysis, the return on investment, you will find that it does pay for itself. Now, the payback period is, as we can imagine, a little complex in that it depends on did you get rebates? What is your cost for power? So if you're in Hawaii paying a really exorbitant rate, your payback's gonna be extremely short versus somewhere maybe where your power is being subsidized because it's, you know, hydroelectric and you have cheap access to cheap power. So those things will affect the payback period. But in our assessment, what we see, basic numbers, if we take a basic run-of-the-mill operation, it is about a year or less, anywhere from like 9 to 12 months.
But in extreme...or not extreme, but let's say some of the more outlier areas where you've got fresh states that are coming on board, you've got those early people to market that are capturing that beginning high price of the product. We've got a customer in Oklahoma who did a nice facility, built it out very efficiently and the entire thing was being paid off in two harvests. So there you're looking at six months, including the lights, so lights and everything. So again, because they were operating very efficiently with the LEDs and with how they set the facility up. So it ranges. But yeah, you're looking at about a year, if I was gonna give you kind of a quick bellwether, but again, our warranty is five years, so you should be well-insulated to make your money back and make some real money on top of that before you have to even think about moving to a new light down the road.
Matthew: So when you have someone come to you at a trade show or give you a call and they're saying, "Okay, I understand I need to really look at LEDs," what questions do they ask and are they the right questions? I should say, what questions should they be asking when they're evaluating LEDs?
Noah: Well, going back to your other question, the conversation has changed, right? So if I rewind again, back then the customer was less...I don't know what I'd call it, less educated in terms of the business side. We were dealing with some great growers back then, but definitely, the business acumen has gone up significantly in our customer. You know, when they're coming to us to buy lights for a large commercial facility, you know, it's gonna be a quarter-million dollars and up for a larger facility. And so if you have that kind of money, generally you've done your homework, you're asking the right questions. So the questions have gotten more complex and they're focused more now around things like return on investment as you pointed out. So I would say the business acumen has gone up. We're still dealing with amazing growers, but we're definitely dealing with more a CFO and C-suite type people making these decisions and helping to drive those decisions.
Matthew: And do you see more customers considering solar as a way to supplement their electricity needs at all?
Noah: You know, I would say we hear about the same as we used to. It's just kind of a smattering. Some people do ask, they need to have a lot of space to actually deploy the panels. A grow is so power dense in terms of the kind of watts per square foot, if you wanna look at it that way, that to offset it entirely, you would need a very large, very large solar array for good size grow. But we do have some that throw solar panels on their roof. As long as they've got a roof there, they might as well capture that sun. And that is definitely a great offset. But what we're seeing more is really the push towards efficiency at the operational level. Not as much yet, I'm trying to supplement or subsidized with the solar.
Matthew: Okay. So when you talk to a home grower versus a commercial grower, what are their care abouts? How are they different and how do their questions differ when they call you?
Noah: Well, from the growth perspective, they're obviously very different. But you know you're speaking to lighting here, so let's get real specific about that. So when you're at a home grow, you have a single light, generally. Now, I'm not saying, you know, there are plenty of home growers we work with more than one light, but let's just say a basic home grower with one light. They might have two if they're growing cannabis, right? They might have two in two different environments, one they can maintain in the vegetative state and one in the flowering state with the different light cycles. So one might be at 18 hours of light and the other one's 12 hours of light. So in that case, the questions are a little different in how you set it up is quite a bit different because I don't have crossover.
So when we go to layout a large facility, we're dealing with lights next to lights next to lights. So we're more doing assessments, trying to deliver, as we call it, an even lighting canopy. Just like to have a plant canopy, we wanna deliver a lighting canopy. Whereas in a home grow, you're dealing with a single point source, or in our case, maybe 420 little light sources in a box. And we're dealing with the reflection on the sides and we're dealing with trying to contain that light. So from a lighting perspective, the big differences, one light versus multiple and how you approach those setups and how you do that.
The questions, the gardening questions, of course, get very different very quickly. And I will argue that it is much harder to maintain a home, single light, small grow in your house versus a dedicated facility because I can actually dial in the environment. At my house, I'm dealing with the fluctuations and my temperature morning to night and everything that goes on in your own home. So I would say that, you know, a really good home gardener has dealt with some more challenges and they're definitely dealing with a more sensitive environment than a large real homogenized grow facility where you can really dial it in. So the gardening questions get different. But from a lighting perspective, it's really a question of whether you're using a single light or a bunch of lights to create a nice canopy of light in a large facility.
Matthew: What besides lighting is really something to plan carefully? Because I see, you know, a lot of people come in, they're smart people, they have a project plan, but they really have no context on how to create a successful cultivation facility. And they may be hiring someone that knows more than them but still doesn't know a lot. When you can kind of see someone that's creating a commercial grow the right way and see someone who's doing it the wrong way, what are the differences you see there?
Noah: That's one of my favorite topics right now, actually, is the consulting side, right? So I come from a business consulting background. I did it for a long time in the IT world and I did it in marketing. I've done it in a few areas and for many, many years. And when I saw...I don't know, you might know better than I do, Matt, you follow the industry really well. About three years ago, I saw a major inflection point where everyone thought, oh my gosh, I'm a grower. People really need this information. And they do need the information and help. But all these people thought I'm the right person to deliver that information and to help these people. Some of them probably are the right person. However, by and large, I have found that a lot of the customers that come to us that have worked with consultants or are working with consultants, I've learned quickly that the information they were getting was suboptimal at best in terms of the setup.
Some of the things were just patently wrong, not by my standards, but by well-established kind of best practices for indoor horticulture. It just was not...it was causing a disservice. And we had some real issues where people would come to us with setups and they'd say, "Hey, I need lights for this room." And I would look at the facility and think, well, I can give you lights, but you're gonna fail anyway because your facility's set up wrong. And so we had issues with that with trying to work with our customers. We feel our job is not to sell lights, our job is to make them successful. In our case, that happens to involve LED lights. But if they're not successful, they're not gonna speak well about us and they're also not gonna come back and buy more lights. And a lot of our business is repeat business.
So we did step in and we have gotten much more involved early on in projects. Luckily, a lot of people contact us pretty upfront because they fundamentally realize that they do need artificial light if they're gonna grow indoors. And so if we get involved early on, we're able to help them and try to make sure that that facility is set up correctly. And when we're talking about setting up a facility correctly, we're really talking about the efficiencies, let's say, on the mechanical side, so the lighting, the watering system, and all that. And then you've got the operation side, to me, which would be more of the workflow and your day-to-day activities. How do those mesh together, how do they fit together and turn into a well-oiled machine?
So when we're working on a project, a commercial project, we're going to look at those two different things, make sure they mesh, but also really try and pay attention to that workflow. I always tell growers, I'm like, "Look, don't design a facility that you're going to be fighting. Because if you design, let's say, a facility with two-foot aisles and you've got some pretty big people working there, it's gonna be a struggle, you're constantly gonna be fighting that. Or you design it with 10-foot or 8-foot ceilings where you really wanted to light the room effect in a slightly different grow style and now you're constantly fighting the height of the room." So what I say is design a facility that works well with you and your goals, and that's one of the critical parts is really I would tell any grower when they call us, first thing I'll ask is, "Great, what are your goals?"
Because it's different. Some people say, "I'm trying to create this brand and I want the craziest, highest quality weed ever," or, "I just need to produce really good quality cannabis at a good low price," or, "I wanna pull 100 pounds a month out of this facility." Whatever those goals are, fine. But if you can't define your goals, you can't ever meet them. So as long as people have goals, and if they don't, I'll push them to try to come up with some, and then we can manage to those goals and, as you said, design the facility to meet their specific needs of those goals.
Matthew: I wanna just ask, you know, there's a couple stubborn myths about LEDs. First, you mentioned can LEDs...you know, can we flower with LEDs, can we veg with LED? Obviously the answer is yes. Is there any other kind of stubborn misconceptions that are still out there that you can quickly address for people that are saying...in their mind, they're thinking, "Oh I would consider LED, but..." then they have one of these, like, big five misconceptions or myths.
Noah: The biggest one, I'm not hearing it quite as much, but we still get it, and this is horrible, is LEDs don't produce heat, right? We get that question and I can understand how maybe they might've picked that up somewhere, but that's very far from the truth. Anytime you put energy into something, it's gonna produce heat. We can neither create nor destroy energy. Even at Black Dog, we are limited to the laws of physics of the universe. So that's just the way it is. So that's my favorite. Then that's a very good example of a myth that we wish would die, which is, yes, LEDs are more efficient, for sure, but they still produce heat. When you put a thousand lot LED fixture in a space, it will warm it up. So that's probably the most pervasive kind of myth that's still out there.
You know, and as you said, there's still some of those questions, when you start to question, there are still some people that think or wonder if LEDs can really grow. You know, there's some amazing growers out there using DEs still today and they're doing amazing things in their mind and somewhat rightfully so. They think, if it's not broken, I'm doing amazing things. I'm hitting numbers that my peers aren't hitting. I'm doing great things. Why should I go mess with it? And to that, I might say, "Great, if you're being competitive and you can do it, stick with it. And when enough market pressure comes along, you'll make the change when you're ready and when you feel it's right." But definitely still a little bit of the question of can they flower? So we don't get the question, can they veg? A lot of people say, "Oh, I know LED can veg but can they flower?" I'm like, "Well, flowering and veg is the same thing. You need more energy, but they're really not that different from a plant standpoint. So yes, they flower just fine." So those are the two most pervasive, but definitely, the heat one is one that still catches us on a regular basis.
Matthew: And what about some things that are pervasive that are true that, you know, are plants smaller or things like that?
Noah: Huh. One, it is true and I heard this even early on when people said, "Oh, they veg, but they don't flower." Even those people would say, "Well, they do produce a higher quality plant." Or when people started to admit that LEDs really did flower, they'd say, "Oh, the yields aren't there, but the quality is the best." And I'd say that is actually true. What you get out of HPS in terms of spectrum is you can't tune it. What you get out of a bulb is what you're gonna get out of pretty much any bulb on the market. LEDs are different in that every manufacturer can choose how they're going to design their fixture and, in this case, design their spectrum. And by designing a better spectrum, you can actually create a better product. You know, we include UV in our spectrum that yes, it costs 20 times more than other LEDs, but to us, it's worth it because that UV does produce, and we've proven it multiple times at laboratories that it does produce higher active compounds.
So more THC, more CBD, if that's what you're growing, and a higher terpene profile. So all these people that for years were saying, "Hey, when I grow with LED, I often end up with a tastier or better smelling a product or maybe some with better bag appeal," that was kind of something that was being kicked around. And I would say that's actually true. If you're purchasing the right LED with a good spectrum, you can get a better product out of it quality-wise.
Matthew: Okay. And you're doing some research now. Can you talk about that a little bit?
Noah: You know, we're always doing research. Right now, our research is focused on efficiency. We love our spectrum and we're very happy with it. But as our customers, you know, we're trying to focus on our customer's needs and there's a few different needs we're focusing on. But one of them here is definitely efficiency. You know, what our customers continue to want is obviously the most efficient fixture possible. They know our lights can grow a very high-quality product. But at the end of the day, we always say, you know, you sell weight, you don't sell smell. Yes, bag appeal matters and the quality matters, but you're paid based on grams and ounces and pounds not on the look of your weed necessarily specifically.
So in that case, we know we can provide that quality, but again, we are looking to continue to increase the amount of yield they can get per energy input. So if you're looking at, let's say watts, we wanna get them more cannabis per watt of input. And that's where a lot of our research focuses. We're always continuing to do a good amount of research around what interests us being lighting geeks, if you will, is trying to see what are the envelopes of the plant. You know, how far can we push a plant? Unfortunately, we love our plants, but sometimes we push them to death. And so we're playing with them and trying to take them to the edge and say, great, we know you can get X amount here. If we add, you know, Y more input here, we get X more cannabis. How does that relate? Are we being more efficient? Are we now reaching a point of diminishing returns? Because yes, based on a research we found, you can continue to push the plant further, not just with light, you have to do...we could talk more about that, but you have to push a lot of things in unison. But if you do that together, you can push the plant further than we ever thought possible.
But again, you do hit a point of diminishing returns as well. So our job as lighting experts is so when customers come to us and say, "How much light do I want in this flower room?" we should have some very good, definitive and research-based answers to answer that question and say, "Here's what you should do in your facility based on your growing style, your strains, what you're doing. This is our observation over the last 9, 10 years. This is what you should deploy and this is how you should deploy it." So we're constantly trying to do research around how to not only build the most efficient light, but how to deploy it into our customer's facilities.
Matthew: Now, you do a lot of consulting, you do a lot of education, you do grow-alongs and I think you do transplants. I can't remember all the different things you guys do, but I know you do a lot. Can you talk a little bit about your grow-alongs and maybe some of the education stuff you do online?
Noah: Yeah, it's good timing. Just a few weeks back...you know, we started years ago, we decided this is...you know, we're answering these questions again and again and we really wanna help these people. How do we help a lot of our homegrown? And this is a little more home grower or hobbyist aim-focused than commercial. But how can we help them because we're just answering the questions and we ended up on the phone for an hour or two sometimes with new growers because there's a lot to learn? And so we realized, you know, obviously, with the technology we all have access to, video was probably the best way to go. So we dug in and started doing videos around grows and around different tasks you do in the garden. And the response has been great and we even added on our site a catalog because we had so many in our YouTube channel that it was hard for people to maybe hone in and find exactly what they were looking for.
So we just put up a catalog video player. It's at blackdogled.com/videos and that listed...So you can say, "Oh, I wanna see some educational stuff. I wanna watch some customer testimonials. I want to watch, you know, how to do this or that or how to harvest," or anything. So we're really big on the educational component. We feel, yes, it does save us some time on the phone, but in our opinion, if everybody in the U.S. had a grow in their house, that would be a wonderful thing. Now, we'll probably never get there, but it's a nice goal and we wanna continue to educate those that wanna take the time to learn. So the videos are a huge part of our educational outreach and they're just up there for free. You don't have to buy a light. Please, we tell people all the time, even if you're not gonna buy one of our lights, just go look at the videos and learn from them. Whether you're trying to learn how to grow or even just set up your environment for successful growing indoors, that's fine. Just go, please take a look. It's a very good resource and we will continue to back that and add more to it as we get requests and things from our customers.
Matthew: Yeah. Every business needs capital. Where are you in the capital-raising process now?
Noah: Well, we're lucky and we're stubborn. We could have and we definitely did start to look years ago and we ended up finding some other alternative methods for allowing the company to fund itself and move forward. So we haven't really done any big raises to date. We did a recent friends-and-family round not too long ago. Again, just limited to, kind of, immediate friends and family, but we are about to launch our, kind of, first A-round and see how that goes. So we're looking to raise about $3 million on our company. And so we're excited to see how the market receives that. We've got a great team we're working with to do that. And so we're just ramping it up. It hasn't even been...you know, officially, I'd say we've done kind of a soft launch to some people we know, but we haven't done what I'd call a hard launch. We're not really out there yet. So hopefully to your question, we do quite well with it, but we're really just ramping up as a company into our first real raise.
So we feel it's a good opportunity for the investor looking to get in, especially if they're a little afraid of a plant-touching company and they want something ancillary, we feel we're a good fit. You know, 9, 10 years, we're established. We're an established brand. We've got real sales numbers to look at and a lot of historical data and obviously, a lot of industry knowledge as well. So we're just getting started and hopefully, I can report back to you in the future and tell you that it all went really well. I've got a little apprehension as I think anyone does when they're taking their baby out and showing it to the world and saying, "Hey, this is worth something." But we're really looking forward to it.
Matthew: Yeah. Now let's move to some personal development questions here, Noah, to help listeners get a better sense of who you are personally. With that, is there a book that's had a big impact on your life or your way of thinking that you'd like to share?
Noah: I wish I had more time to read these days. Luckily, I had a mother who got me to read a lot when I was younger, so I do have a love of reading. And my favorite story that I still look back on because it's almost harder even though I've read it at this point more times than I can count, I've given it away to friends and people I've known over the years, just as many times. But "The Alchemist" is my favorite book and it reminds me it's really, truly about the journey.
So, you know, a lot of people say, "Oh, aren't you excited for this," or, "Would you wanna take Black Dog public?" or all these things. And I'm like, "I'm having a lot of fun doing this part. I'll enjoy that when I get there, whatever the end is. I don't even know what the end result is at this point." Being in cannabis, that's one of the fun things is it's so dynamic. You never know where you're gonna be the next day. But the journey is really what I enjoy, it's the building. You know, some people say, "Oh, do you want a big company?" I'm like, "When it's a giant company, I'll probably leave and do something else because it's the building, it's that journey I enjoy."
And to me, "The Alchemist" was really about understanding that it wasn't necessarily about the end goal and the journey was a really big part of it. There are other, don't get me wrong, that I couldn't even begin to scratch the surface. It's an amazing book. But to me, that's one of the lessons I took out of it. And I love the simplicity of the story while still being somewhat complex in its messages. It just such a simple, beautiful story. So that still definitely weighs in on me and pops into my mind when I'm pulling my hair out some days. And I'm like, now this is the journey, we're gonna get there. So yeah, "The Alchemist" would be my favorite book and if anyone hasn't read it, if you have a really good day by the beach or by the pool and you have a good few hours, you can actually plow through in a day. So it's not a big novel. It's a beautiful book.
Matthew: That's great. And what is one thought you have that most people would disagree with you on? It's a Peter Thiel question from the Founders Fund.
Noah: Right now, I would say one thought that a lot of people disagree with is I'm not ready for cannabis legalization, and that's a polarizing thing to say probably. I don't think as a country...I would love to see it, and I'll be honest, I was using cannabis when I was younger and my friends and I would sit around and pontificate on when cannabis could be legalized or would it be legalized sometime in our life. And I'm going back quite a few years. I did think it would happen in my life, I will be honest. My prediction though was not for about another, about almost 20 years at this point from when I predicted it would happen. So maybe it will happen in 20 years and I'll end up being right. But it's much further along than I ever anticipated at this point.
So my belief is I'm very much excited for that to happen. But seeing...I've had somewhat a front row seats since Colorado put out adult use, since we enabled that in the state and watched it roll on to all the other states, and the other states that have added medical and all that. And I've seen a lot of stumbling. And while stumbling is fine, it's a great way to learn, there are some cases where it's been detrimental to people in the industry, to people around the industry. And so I'd like to see it done in a good way and I just don't think we're ready yet. I would like to see it take another few years before we go full federally legalized. And I really hope that it's the right platform that it's done on. And I know there are people in the industry that would like it done yesterday, and to them I say great and I wouldn't be upset if that happened. But my opinion is I think we still need to understand this and watch the experiments that are going on in these different states and jurisdictions. So we can learn a lot and I think we should continue to learn a little bit more before we go and a federally legalize.
Matthew: What do you think the most interesting thing going on in the cannabis space is apart from what you're doing at Black Dog?
Noah: Federal legalization. That's a cop-out. So there's so much amazing stuff that we don't even begin to get to touch or see. That's, again, why I jumped in the industry. You know, some of the people I read about, and whether it's on your show, Matt, you know, I do get a chance still, I don't have time to read, but I do ride my bike so I get a chance to listen to podcasts, so I get to listen to CannaInsider. And the people in our industry never cease to amaze me. Some of the ideas...you know, and I'm steeped in the industry at this point. I eat, sleep, and breathe this stuff, but I'm still hearing things. I'm like, wow, that's a brilliant idea whether it's a testing protocol or a new product they're trying to bring to market.
But yeah, it's just the ideas being brought to bear on the new problems that we're facing in cannabis, which they are new problems, no one has cultivated high-end cannabis flour at large scale in the world really until now. It's just kinda happening. So we're exposing new problems and challenges and seeing how people are doing that is amazing. And so I couldn't even pick one. I constantly am trying to devour information about the industry. Even if it doesn't touch us, I feel it's important being in this industry to understand what's going on. And there are so many amazing things being done. I couldn't even pick one and that's, again, why I love the industry, it's literally every day I'm taught something new by someone in the industry.
Matthew: Oh, me too. Noah, as we close, how can listeners find Black Dog online and also how can accredited investors reach out to you if they're interested in your capital raise?
Noah: Good. So easiest is blackdogled.com. Obviously, that's our primary site. You can find us across all the different social media channels. We have a very good following and a very active channel and, luckily, our customers are vocal and they're fun to talk to. So I invite you to join the social media conversation as well. But blackdogled.com is our main site. And if somebody wanted to reach out to us they could send an email to firstname.lastname@example.org. Or they could just feel free to call in and ask to speak to someone and we'll get you in touch with the right people on our team or the team we're working with on the capital raise.
Matthew: Well, Noah, thanks so much for coming on the show and educating us and good luck with everything you have going on. It sounds exciting.
Noah: Thank you, Matt. It was great to be here again and always a pleasure to listen to your show.
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Just as we’re becoming comfortable with the massive changes in cannabis legalization there enters a disruptive new technology called “Cannabinoid Biosynthesis” that has prompted a lot of interest among industry insiders.
Here to tell us more about it is Jason Poulos of Librede, a synthetic biology company and leader in cannabinoid biosynthesis based in Southern California.
Learn more at https://www.librede.com
- Jason’s background in biology and how it led him into the cannabis space
- A deep dive into cannabinoid biosynthesis and how it’s disrupting the industry
- An inside look at Librede and how the company has taken the lead in cannabinoid biosynthesis
- The intricate work involved in designing a molecular drug that efficiently binds with its target
- Exciting new discoveries surrounding the potential of cannabinoids beyond CBD and THC
- The importance of CB1 and CB2 receptors and how they interact
- The relationship between synthetic cannabinoids and cannabinoids found in nature and how Jason believes that relationship will grow
- Ways in which we could misuse synthetic cannabinoids that we need to avoid
- Where Jason sees the cannabinoid biosynthesis business heading in the next 3-5 years and how it will affect the cannabis industry
Matthew: Hi, I'm Matthew Kind. Every Monday, look for a fresh new episode where I'll take you behind the scenes and interview the insiders that are shaping the rapidly evolving cannabis industry. Learn more at cannainsider.com. That's C-A-N-N-A insider.com. Now, here's your program.
Just as we're getting comfortable with the massive change of cannabis legalization, there enters a disruptive new technology called cannabinoid biosynthesis that has many industry insiders very excited about the prospects, but also scratching their heads about how this industry can scale. Here to help us understand is Jason Poulos of Librede. Jason, welcome to CannaInsider.
Jason: Thank you, Matt.
Matthew: Give us a sense of geography. Where are you in the world today?
Jason: So, Librede is located in Carlsbad, California, which is just a little bit north of sunny San Diego.
Matthew: Okay. And what is Librede on a high level?
Jason: So on a high level, Librede is a biotech company and our goal is to look at nature for therapeutic compounds and then produce those compounds at an industrial scale. And so at the highest level, we're a biotech company.
Matthew: Can you share a little bit about your background and journey and how you got into the cannabis space and came to start Librede?
Jason: Yeah. So, my background's in bio-engineering and biotechnology. I started Librede coming out of the University of California, Los Angeles with a different technology. And so we started this on an artificial cell membrane platform. So, what we were doing was we were creating artificial cell systems and then looking at human proteins embedded in those systems as a way to do high throughput drug discovery and drug screening for the pharmaceutical industry. So the basic idea was a cell on a chip, right? We have a cell, we put it on a chip. And then you have the ability to study human membrane proteins inside of there. And one of the proteins we were really interested in looking at was a protein called a TRP channel. The TRP in mate receptor is involved in cold sensing. It's kind of when you put methanol on your skin, that's the channel that gets activated. And it was interesting from a pain pathway system as a target.
And so, cannabinoids had also been recently shown to interact with these channels. And this is back in 2011, 2012. And so, when we were developing a new technology, we don't want to do what has already been done. We're always trying to look towards the future, like what's going on next? What are the next, you know, important drug targets? What are the next important therapeutics? Because your technology has to work with those. So, we, you know, we were looking at this protein and then we wanted to look at it in the presence of cannabinoids. And so the ability to get access to cannabinoids, it was not that difficult for THC and CBD. But the other compounds were. So the minor cannabinoids, we couldn't really get access to. And so we're like, "Well, how are we going to test our system with these new cannabinoids?"
And Dr. Farina, Anthony Farina, you know, our CSO, thought that he's like, "I bet we can make microorganisms produce these chemical compounds so we could use them at [inaudible 00:03:25]." Because we didn't need that much of them. And so, we kind of set out on nights and weekends to develop this technology. And kind of on our first pass, we actually were able to produce some cannabinoids at reasonably high enough levels that really started to turn my eyes towards it and became extremely interesting. And that was kind of my first window into the cannabis space and the cannabis industry. And I knew we had something of extreme value then, and that this is really a way to kind of get access to not just THC and CBD, but many other cannabinoids. And so we kind of decided to switch all into this. And it's been kind of a fun ride ever since.
Matthew: Yeah. So, when you say microorganisms, a lot of people will be like, "What does that mean exactly?" Can you just give a little bit more context on what that means?
Jason: Yeah. So, microorganism, there's kind of generally three classes: the fungus, algae and bacteria. So, you know, bacteria, small little bug, right? So that's like a microorganism. Algae would be another example, and yeast. So, like baker's yeast, you know, yeast that we make beer with or bread with? That's another example of a microorganism. So, our lives are involved with microorganisms every single day. Our guts rely on them. And so they're everywhere even though you can't see them all the time.
Matthew: Okay. Do you feel like when you meet people and you're trying to explain at a cocktail party or anything what you do, there's any kind of stumbling blocks? Or how do you help them understand it if they're struggling?
Jason: Yeah. So, sometimes there are people like, "I don't understand how a bug can make the same chemicals that a plant can do." And so, typically, what I talk about is that...it's the word biosynthesis that sometimes can trip some people up. And so the way I explain it is that, you know, plants, just like humans, we make chemicals, right? We make lots of different things. And so plants, you know, can make different smells and things like that. And so they're synthesizing chemicals. But it's a biological system. So, it's biology synthesizing chemicals. So it's biosynthesis. And so, if we understand that biology can be used as a chemical factory, then, you know, I can...other biological systems can also be used as chemical factories. And then if you have a chemical factory, you can start to transplant the machines inside that factory in between, you know, from a plant to an organism, from one chemical factory to another, and actually end up making the same products or the same chemicals. And so, it's really no different than any sort of kind of basic chemistry. It's just is biology is doing the chemistry versus, you know, mixing two chemicals in a jar.
Matthew: Okay. So chemical factory, that's kind of the way you talk about it. What aspect of these chemical factories do you think is most important for cannabis enthusiasts and business owners understand in terms of what's possible with these chemical factories?
Jason: So the most interesting thing and useful thing from the cannabis industry side is the ability to control what's going on. So when you start to engineer these new chemical factories and microorganisms, you're doing them from the ground up. And so that allows you total control. It's like designing your own house to be exactly what you want it to be. So, the cannabis plant is extremely complicated. Huge, large genomes making lots and lots of different chemicals. But if I decided that I wanted to make a chemical factory that only makes one chemical at a time, it looks a little bit different. And it's actually a little bit simpler so I can actually target to go in and target exactly what we want to make and then build that up in a much more simplistic system and taking away all the complexities of an agricultural production.
So, you know, soil, long growth times, water, light, fertilizers, pesticides, those don't come into play anymore. And so, because it's a much more simplistic system, we get much more consistency and control out of what's going on. And people like reliability in supply chains. And so that's where this is all going. It's kind of consistent purity, low cost and reliability. And so that's what you get out of this, is that ability to control basically at a molecular level.
Matthew: So when we talked in the past, you talked about how drugs, molecular drugs or remedies can be designed well so they perfectly bind with their target in terms of creating that control. Can you talk a little bit about maybe how to create a molecular drug that perfectly interacts with its target and what that means?
Jason: Yeah. So with respect to cannabinoids, we're mostly talking about binding to the cannabinoid receptors, right? And so the natural cannabinoids, the phytocannabinoids found inside the cannabis plant have been okay at doing that. They kind of bind well. They bind a little bit, but not too much. And that's...they're in the kind of Goldilocks area. It's just the right...because if you end up binding too tight, you have problems. And some drugs have been pulled from the market that have been designed to bind really tight to the cannabinoid receptors. And if you don't bind enough, then you don't get any sort of therapeutic benefit. And so, the ability to control the production of molecules at the molecular scale allows you then to modulate the binding to receptors, and that then allows you to develop new therapeutics and to kind of, even kind of dial in more on this Goldilocks area that the phytocannabinoids have happened to stumble upon. And so that's one way that we can use the platform for designing new therapeutics.
Matthew: Okay. And when helping people understand, for example, the CB1 and CB2 receptors, is it fair to say kind of like a receptor is like the female puzzle piece and then the male piece fits into the receptor? Or how do you...
Jason: Yeah. It's a lock in a key, right? That's exactly what it is. And so there's a huge number of receptors in our body. And they're all just about chemical signaling. And so when something binds the CB1 or CB2 receptor, it begins a chemical cascade or a signaling cascade down that can have many different physiological outcomes. And we see this with all the different effects that cannabis and cannabinoids, individual cannabinoids have been used for. I mean, THC again has been a pharmaceutical product for 30 years, I think, now. And CBD is just recently a pharmaceutical product. And they're used for totally different indications and, you know, the binding of different receptors in different ways. And so this becomes really interesting. Depending on what key you have, you can open up different doors. And even though these keys can look somewhat similar, behind each door can be a totally different area of exploration.
Matthew: Okay. Now, in terms of scale, you know, people are thinking, how does this work here? We have, let's say, yeast in bakers or some other microorganism and we're trying to create products fit... How does this work at scale in order to be a business?
Jason: Yeah. So, has anybody ever heard of Anheuser-Busch?
Matthew: No. I'm [crosstalk [00:11:35] idea.
Jason: So that's how this works.
Matthew: Huge vats is what we should picture. Huge vats.
Jason: Yeah, this is the way this looks at scale. And this has been done before. So, cannabinoids are natural products. They're just they're valuable natural products. There's a laundry list of natural products that people interact with on a daily basis. Aspirin comes from the bark of the willow tree. Taxols and anti-cancer drug, that comes from the yew tree. Capsaicin, you know, is put in cream, that comes from peppers. Vanilla comes from the vanilla bean. Grapefruit comes from the grapefruit. I can go on and on and on. And I think half the pharmaceutical products in the market today are derived from some sort of natural product. So this is, historically, natural products are good and cannabinoids are good, too. We're learning more and more about them, and the more we learn, the better they are.
But as you move to an industrial scale, plants aren't necessarily made to produce these compounds at an industrial scale. That's not their job to do this and to supply human populations with these. So you have to come up with alternative ways of doing this. And yeast, specifically yeast, have been used to produce high value natural products. For example, the grapefruit smell, that is produced in yeast. The rose smell is produced in yeast. And that's good if you're in the perfume or sort of flavor and fragrance industry. Now we don't have to have, you know, huge fields of roses to make one small bottle of perfume. So that's great from an environmental sustainability standpoint as well as a reliability standpoint, because you know exactly the smell that you're going to get every single time. This is also done for Omega-3 fatty acids, and a whole list of other compounds have been done like this at scale.
And so when I talk about scale, I mean the metric ton level. I'm not interested in kilograms. It's metric tons that we're going for. So this is what it looks like. So, imagine that you're...have you ever brewed beer before? That's basically what we do on a day to day basis. And if you've ever worked in an Anheuser-Busch facility, that's what it looks like at an industrial scale. So the yeast kind of produce these compounds and then you can extract them out and purify them. And they're white, tasteless, odorless powders.
Matthew: So as these worlds of synthetic and natural cannabinoids come together, how do you think about those two worlds coming together and what should we know? What's of interest there?
Jason: Yeah, so I think, just to back up a little bit, there's this...the idea of synthetic versus natural cannabinoids is something interesting and I think it kind of happens in the definition here of a few words. And I want to start back at the beginning before I kind of directly answer that question. So, cannabinoids are anything that basically interacts with the CB1 and CB2 receptor. That's gonna be the definition of a cannabinoid. And so there's phytocannabinoids. These are the cannabinoids that are found in plants. For example, you know, THC, CBD, CBC, those are phytocannabinoids found inside the cannabis plant. There's also endocannabinoids. Those are the cannabinoids inside of our body. The names of them are hard to say. I just say their abbreviations, AG2 for example. So these are just, you know, natural cannabinoids that are produced inside of our body.
And then there's synthetic cannabinoids. So, synthetic cannabinoids are cannabinoids that are made in laboratories that cannot be found in nature or a human body. So they're not a phytocannabinoid. I can't find them in a plant and they're not inside of a human body, and so they're synthetic cannabinoids, invented cannabinoids. What we're doing is we're actually matching [SP] the phytocannabinoids, we're just doing...we're doing it the exact same way that nature does it. We're just making it in a highly efficient system, okay? So, what's happening now is the world of biotechnology and the cannabis industry are interacting and they're doing this on the level of kind of the production side. So, it's about optimizing the production and creating an efficient system so that you get to scale and reduce costs and then environmental sustainability through the use of technology. So it's not really synthetic cannabinoids that are being produced. It's engineering a more efficient biological system to do definitely what nature does, but just doing it faster and more efficiently. And so that's really what's going on. It's not necessarily synthetic cannabinoids that are being produced. It's an application of technology to our production system.
Matthew: Okay. And is there any way that you think it's a misuse or things you want to be careful of when creating cannabinoids or combining them in any way, synthetic or organic?
Jason: Yeah, no, definitely. I mean, you have to be extremely careful. The CB1 and CB2 receptors, many, many things can bind to them. If you don't do this correctly, you can have extreme adverse side effects. And there's huge examples of it. So for example, the synthetic cannabinoid, people refer to this as typically Spice. These are the things that, you know, people go crazy on. What's the difference between them? Sometimes it's a single nitrogen, a nitrogen getting replaced inside the THC molecule. That allows it to cross the blood-brain barrier a lot faster and combined tighter then to the CB2 receptor, that's bad news, okay? So we have to be really careful about what we're producing here. And as well as stereochemistry matters a lot. So you talk about that, it's left-handed and right-handed molecules.
And this makes a big difference. So, when you're developing new production technologies, you have to make sure and have to be careful about exactly what you're producing, and so you know exactly what's going into products and what's going into inside of people. And so you do. You have to be careful with the system just like you're careful with any sort of neurological compound in general. And so as we move and create, you know, potentially new cannabinoids or new formulations, you have to go through the typical safety screening and testing that needs to be done. I mean, that's what we do with our compounds when we make them. It starts in nice models and then goes beyond that. So, it's something that everybody needs to be aware of.
Matthew: If you were...I mean, this is conjecture here, but in the next five years, if you were to look at cannabinoid biosynthesis and say like what market share, what areas of market share it's going to be, the products are going to be in, pharmaceutical supplements, foods, edibles, topicals, like where do you see biosynthesis having the most traction in the cannabis industry?
Jason: So, from a pharmaceutical standpoint, it's for sure going to go there. I mean, that's easy to say that it goes there and it captures a lot of that market share as the pharmaceutical market develops. Inside the consumer market, it's going to be, obviously not the flower component, okay? But I think you're going to start to see this dominating in the edible space, the topical space, even vape pens. And I consider that to be kind of on the nutraceutical type of the industry. There's going to be a transition period. So, you know, I think about hemp oil or kind of full spectrum oil as effectively a carrier solvent where you can start to begin to spike in kind of pure compounds to get to the ratios that you want and get the consistent ratios that you want, and also have the ability to create new ratios that are not found in nature.
So for example, having a high CBG content topical cream, it's really difficult to get that in nature. And you can do that now with biosynthesis. Or having a high CBDV, some of the V compounds in there. And that's where you can do and that's where they're going to come in. So, it's about creating new products, not just, you know, THC and CBD. And that's effectively a black and white world and what you can do now is begin to add color to this. So that's, I think, that's where it's going to go. There will be a transition period, as I mentioned, but eventually I do believe that there's going to be a cannabinoid product in every single household. And it's not going to be THC and CBD. It's going to be other compounds in there.
Most people have Ibuprofen or aspirin inside their house. But what you don't have is the bark of the willow tree in your house. And just as natural products, from a historical content, have moved from natural systems to efficient industrial systems, the same will happen with cannabinoid production. And so I see it happening. And concentrates, anything that uses extracted cannabis oil, this will make more sense to use pure cannabinoids to allow for reproduction of a chemical profile. And that enables then branding of your products and consistency. Anywhere I go in the world, Coke tastes the same. I know that's not totally true. There's Mexican Coke, which is slightly different. It tastes good, too. But that's what you're looking for here. How do you make a brand and how do you get consistency? And you're going to do that through controlled formulation, which is enabled by pure cannabinoids, which you can only get through synthetic or biosynthetic production.
Matthew: You know, some people say that THCV has an appetite suppression qualities to it. Do you see anything with that coming to market in terms of, you know, diet aides or things like that? Is that gonna...
Jason: Yeah. I mean, I hear a lot about that, too. So, THCV is high on people's lists, something that's interesting, something that we can produce, something that's been very difficult for plants to produce. I've heard people talk about, you know, getting some high THCV plants out through breeding programs. But it seems to have been taking a long time. But, yeah, I mean, that's what's interesting here. So, you know, maybe we're talking about having a diet pill here, you know, a naturally derived diet pill. That would be really exciting to have something like that in a medicine cabinet. And so, it's really, when you kind of remove the constraints of an agricultural system, you can begin to think about creating new products like THCV that you mentioned and doing kind of so much more.
So, we look at the plant for the examples of what compounds we should make and then we do them, then we create them in a highly efficient manner. And so it's not only doing what the plant can do, but kind of doing so much more and enabling that accessibility to these compounds. I mean, if they're valuable therapeutics, what I want to do is to get access to them so we can supply them to as many people as need them and to do it for as low as cost as possible. That's what we should be doing from a therapeutic standpoint, I believe.
Matthew: Okay. And if you had unlimited budget and time and could only perform like experiments on yourself, which ones would you kind of...which cannabinoids and combinations and things would you be doing to kind of optimize just yourself?
Jason: Yeah, I mean, so that's interesting. I've thought about this. I've actually talked with the NIH about this a little bit, too, the National Institute of Health. It really...it doesn't sound very exciting, but it's at the beginning. I mean, I'd really like to do kind of minute changes and formulations to see what effects those have. Taking the top 12 cannabinoids and kind of start to play with permutations of those and see what the effects are. I mean, we really don't know how any of these things work. And so some really basic, basic information about what does CBC do, I'd be really interested in seeing what happens with that because I think so little is known about these compounds. And so you really got to start at the beginning.
Matthew: Yeah. Well, Jason, I like to ask a few personal development questions to help listeners get a better sense of who you are. 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?
Jason: Yeah, actually, recently there's a book of poems called "Consider the Humble Poet" by Joan Tenor. Not a very well-known author, kind of an older view, but I like that. It's a unique view on, you know, the life that people don't see a lot of about. And it's just as interesting to kind of get out of what people consider, I think, kind of famous authors and things like that. So, yeah, "Consider the Humble Poet" by Joan Tenor. That was something interesting I read.
Matthew: Okay. Is there a tool that you or your team use that you consider valuable to your productivity?
Jason: Yes. Okay. So, there definitely is. We use lots of different tools. Some tools are lacking, but the power of DNA synthesis has and will continue to change our lives, okay? The ability to effectively print DNA which then allows you to print genes, allows you to print enzymes, which are the chemical machines to create chemical factories, is an extremely valuable tool that we use inside the lab and has really enabled the growth of the synthetic biology industry in general.
Matthew: Yeah, that seems really promising. I don't have the knowledge to fully appreciate exactly what that means. I mean, apart from what we talked about today, how do you think it's going to show up in people's lives first here in the 21st century?
Jason: Yeah, so the thing about the DNA synthesis, it's all in the background. It's the stuff that you don't know. It's the complicated electronics inside your phone, okay? Like, I don't know how...I mean, I don't know how my phone works. I hit the call button and it goes. There's this complicated electronics that are doing things in chips and chips reading it. And so what the power, the ability to make DNA rapidly is gonna allow us to do is to allow us to make new compounds and new therapeutics and do this rapidly. And so although you don't always see what this is and how this was made, the kind of the core behind a lot of these technologies and therapeutics kind of begins at the DNA synthesis level. People have heard a lot about CRISPR technology these days and, you know, gene editing. You need to edit...in order to get that to work, you need to actually synthesize small fragments of DNA.
It's not what you talk about, but it's kind of the core and the base of this. For biosynthesis production of cannabinoids, it begins with us typing in a DNA sequence into a computer and then hitting the order button. And then, you know, the cannabis gene getting sent to us as a piece of DNA. We don't need to touch the plant. And so this means we can do lots of changes to these enzymes quickly to make them much more efficient, to make them work faster. And so, it's difficult to see these things in your life, but that has been a big, big game changer, that ability to kind of synthesize and manipulate DNA rapidly and cheaply. You've got to understand, when we did this in the first time back in 2013? Yeah, because we filed our patents in 2014. We ordered the genes to do this for less than $5,000.
So we built the entire cannabinoid pathway into yeast for genes that cost less than $5,000. I mean, that's insane. And you've got to understand like, we were a company of a few people that had zero money. And so, we put our own money basically into doing that. And, you know, when you're fresh out of graduate school you don't have a lot of money. In fact, a thousand dollars is a lot of money to me. And so it's still...but because that barrier was small, we could go ahead and do it. You can make those bets. And that's what started this company. It's the ability to kind of get after that DNA. And so that had such a huge, obviously, impact on my life and I think it will continue to have an impact on like the global population in general with respect to therapeutic development.
Matthew: You know, I think about the DNA editing quite a bit. I think, you know, how... It's already starting. Like in South America, I know some people that, they can like change their kid's eye color or hair color and just how, at first, we're going to like try to eliminate diseases or things that are undesirable. Like, maybe you're prone to MS. Like, "Do you want your kid to be prone to MS?" You say, "Oh no, I don't want that." "How about like they're prone to balding?" "Well, no, just take that out, too." And then all of a sudden it's like...it's all of a sudden like, "How about cognitive learning ability?" "Oh, I want that to be high," you know. And next thing you know, you're kind of creating this super race of people.
Jason: Yeah. It's basically eugenics again. I mean, this is super dangerous. Yeah, I totally agree with you. So this is the field of bioethicists and there's many out there that are much more well-versed in discussing these issues than me. But, yes, with any technologies that's created, those can be used for good and those can be used for bad. I mean, I look at nuclear power that way. I mean, the nuclear bomb is terrible. I think nuclear power is not so bad. So we have to be careful about this. You have to be careful about what you do, what the implications mean. And these are discussions that we need to have kind of at a societal level. Really at a governmental level. What do we want to be doing as a society?
Do we want to be getting rid of sickle cell? And so there's just recently a study, they just started human trials for CRISPR to help cure sickle cell. I mean, I think we could agree that, yeah, you know, we should edit that gene out if we can. That's good. MS. I think we can agree with that. And so, where do we stop as a society? I think probably, you know, baldness. I think it's like, yeah, it's getting there. I don't think we want to do that. You know, high cognitive ability, eye color. I mean, man, it's starting to get into some areas...
Matthew: Or you could just like, "Hey, I don't want to spend $14,000 for my kid to have braces. Can we just get some straight teeth here?" Like, "Sure. Done." And you're like, "Oh, what else can I do?"
Jason: Yeah, exactly. And these...yeah. So, I mean, these are important issues. I think that, you know, there's lots of people thinking about them. But this is starting to come up. And the pace of technology moves so quickly that we need to be doing these, having these discussions and making sure that we're doing it slowly. I think the FDA in the United States has a pretty good kind of governing control over this. And like, I use governing as in like a governor on like an engine. Like, they pretty like to do things slow. There's other countries that like to move...are moving faster, and this is, well, this is...man, you guys are editing embryos and do we want to be doing this and what are we doing? You know, and basically the ability to change human evolution through to biotechnology.
I mean, these become interesting questions that you could write science fiction novels back in the '50s about, and now it's your life. And so, it's definitely something we need to think about and we need to make sure that we're doing this in the right way. But given the cautions that are there, there's also so much that can be done for good. And so you don't want to limit the technology necessarily. But you do need to keep an eye on it and make sure that we're using them in a responsible ways.
Matthew: That makes sense. Now, here's a [inaudible [00:33:16] question for you. What is one thought that you have that most people would disagree with you on?
Jason: Yeah. So what's the... So I don't know if many people disagree with me on this... Yeah, I guess people...a lot of people do. I typically think that nothing is very new in the world. That everything that is done can always be looked back through with some sort of historical context and a model can be found and repeated. And a lot of sometimes people think, especially kind of with regard to the cannabis industry, this is something...this is brand new and, you know, cannabinoids, nothing like this has ever been seen before. And this is, you know, a brand new industry. And I think we've seen things like this before in the land of therapeutics and things in the land of the regulatory environment, too. And so, I like to kind of look to history to see examples of how things have always been done and then kind of morph them in there and morph them into...morph and map them on to what's going on in today's world.
And I think other people would disagree with that. It's like, "Hey, this is brand new and so you can't look to the past. You have to create your own future." And I understand that mentality, too, and that can be useful. But I think a lot of things have historical context that you can bring into play when planning for the future.
Matthew: Jason, before we close, can you let us know where you are in the capital raising process, if anywhere?
Jason: Yeah. I mean, you know, we're a biotech company. We almost always are raising money. So we do rounds periodically. And so, we did a round recently and we'll probably be gearing up to do another one in quarter four. I'm always really interested in partnerships and bringing together unique skill sets from a variety of different areas like the pharmaceutical industry, the production systems and platforms, and bringing those together to accelerate the commercialization of the technology as well as getting compounds to markets. So, anyways, that's kind of where we are. So we should be looking at quarter four maybe this year of coming out with doing some more things. And I hope to have some exciting news before that, too.
Matthew: Well, as we close, let listeners know how you spell Librede and how to reach out to you if they're accredited investors and want to learn more.
Jason: Yeah. So, Librede is spelled L-I-B-R-E-D-E. And this goes back to our days as an artificial cell company. It stands for Lipid Bi-layer Research and Development. So, not many people know that, but that's what it stands for. And so Librede there, you can go to our website. It's librede.com, L-I-B-R-E-D-E.com. And, you know, there's a Contact page there, there's an Info page there. They can reach there, that actually goes basically directly to me. I'm also on LinkedIn. It's Jason Poulos and you can reach out to me there. And so we're always looking for, you know, new people to kind of come in and join the team, whether they be investors with, you know, different skill sets as well as, you know, people that help want to build up the science, molecular biologists, protein engineers, you know. We're growing and we'd like to bring on the best people to help this company grow.
Matthew: Well, Jason, thanks so much for coming on the show today and educating us. We really appreciate it and good luck with Librede. It sounds like a really fast growing area. I'm sure there's great things to come.
Jason: Yeah. Hey, thank you so much, Matt.
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