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Matthew: Hi. I’m Matthew Kind. Every Monday look for a fresh new episode where I will take you behind the scenes and interview the insiders that are shaping the rapidly evolving cannabis industry. Learn more at www(dot)cannainsider(dot)com. That’s www(dot)cannainsider(dot)com. We’ve talked about CBD or cannabidiol on the show many times. Just to review thought, CBD is a non-psychoactive compound from the cannabis or hemp plant that has many benefits. Now our friends at Treatables have put together a one list chew that can help your dog or cat become more calm and balanced. Valerie wrote in to tell us about her experience with Treatables.
Valerie writes, “My ten year old Husky/Sheppard/Lab mix Chuck is my faithful companion. Chuck got significantly quantifiably better from using Treatables. It took about three days of feeding Chuck two to three doses a day to see the full effect, but he did get noticeably more comfortable on the first day of feeding that to him. Before CBD Chuck limped and couldn’t enjoy longer walks though he clearly had the desire for them. Once he started taking them he could leap around again.” Thanks for writing in Valerie. Treatable Chews are legal and available in all 50 states right now. If you want to learn about what Treatables can do for your pet, visit www(dot)cannainsider(dot)com/pet and get a coupon code for 10% off your order. Once again that url is www(dot)cannainsider(dot)com/pet now here’s your program.
One of the interesting things that is happening to the cannabis industry as it grows is that it is segmenting or specializing to different branches of expertise. One of those branches is infused products. The problem for entrepreneurs trying to get into the infused products business is that it takes capital and also expertise in an ecosystem of relationships that new entrepreneurs may not have. That is why I’ve asked Patrick O’malley onto the show today to talk about infused products and his new accelerator for infused products called Good Life. Patrick, welcome to CannaInsider.
Patrick: Well Matt thanks for having me on your show today and before we get started I would just like to thank you on behalf of myself and all your listeners because speaking for myself, CannaInsider is a great resource. I definitely learn something new in every podcast.
Matthew: Oh thank you. Thank you. Well Patrick to give listeners a sense of geography can you tell us a little bit about where you are in the world today?
Patrick: I’m in Denver at the Good Life Colorado Manufacturing Facility.
Matthew: Oh good. And before we dive into what Good Life is can you tell us a little bit about your background and how you came to start Good Life and your background before cannabis entirely?
Patrick: Sure well it’s not a particularly exciting creation story unfortunately, but going way back during law school I created a law school test prep company and expanded it nationwide and that was a great business for many many years but then unfortunately for me law school applications plummeted, but fortunately for me it was then late 2013 and it looked like regulated marijuana was probably here to stay. So the time was right and Denver is certainly the Silicon Valley of marijuana so it’s the right time, the right place and now I needed the right niche where I could add some real value. So taking a page out of the tech industry playbook, I decided that a marijuana brand accelerator was a great niche to fill.
Matthew: Yes and there’s other accelerators out there in the cannabis space. CanopyBoulder being probably the biggest and most well-known and we’ve had Patrick Rea and Micah Tapman on the show before but your accelerator is a little different. Can you go into what Good Life and perhaps how it’s different than other accelerators out there?
Patrick: Sure. Well the term accelerator is sort of a vague term. It means different things to different folks. So what I can say I do know the Canopy guys quite well. I certainly go to a lot of their cocktail parties and currently the primary difference is that Good Life companies touch the plant and Canopy companies do not touch the plant. I have spoke with Micah and they’re starting to rethink that position, but I don’t know where they are with that right now. On an operational level they have a great system to foster new concept stage firms that are usually geared towards providing the B2B goods and services that the industry is going to need.
On the flip side or different than that is Good Life firms are going to typically be the ones creating tomorrow’s consumer marijuana brands which are the B2C brands like you will be seeing on the shelves at your local dispensary. Further on an operational level Canopy follows the model of Y Combinator and Techstars. They bring I their classes twice a year for kind of like a semester and then they graduate them. Whereas Good Life is much less structured. Each deal is really quite different.
Matthew: Okay. What are some of the pain points you are seeing in the cannabis industry that give you the aha moment to start Good Life where you felt like hey this is something, a niche I really need to fill?
Patrick: Sure well pain points (5.21 unclear). The reason why is this is a big new industry with no established players. Just how big, well a lot of us know the numbers but it’s good to put the context in. The domestic, what I call THC, market, if you will, is still largely legal yet even so it’s still a $40 to $50 billion market which is the same size as the coffee industry from everything from Sanka to Starbucks. Now when you look at it more broadly at all the cannabis applications, the nutriceuticals, the pharmaceuticals, the food supplements, hemp products etc., very plausible arguments for a $200 billion ecosystem which by the way is pretty much the exact same size as the alcohol industry.
So this entire $200 billion ecosystem has to be built from scratch and fortunes are going to be made by folks in all of the sub industries simply by eliminating various pain points. Now for example I spoke to a grower who spends approximately $200 per pound to hand trim his buds. He doesn’t use trimming machines because he feels that those machines damage the buds. The thing is $200 a pound is an extraordinary amount of money, but the thing is lumber mills figured out long ago how to get the most value out of any given tree with minimal human involvement. There’s some mechanical genius, maybe it’s even one of your listeners, who is currently or will design a process or machine that yields hand trimmed quality for a fraction of the price, and that guy or gal well they’re simply going to be printing money, and that’s the kind of person I want to talk to for Good Life.
I’ll give you another example. In 2009 there was this particular, popular type of concentrate that was being sold in Colorado, but then the regulations changed and you could no longer use the necessary solvent, but now I’m working with an outfit that they figured out how to make this special concentrate using compliant methods. So once they scale up and execute, they basically have a virtually guaranteed market share. So maybe not a sure thing, but about as close as you can get. Then there’s those other pain points being solved. Probably the biggest one being the Canna Quitter problem as we’ve started to call it, and Canna Quitters simply put are the biggest pain point for the entire industry and the companies that successfully chip away at that very difficult issue are going to be very well rewarded.
Matthew: Yeah you mean people that try cannabis and then have an experience that’s not perfect or optimal and they’re like I don’t want to do this anymore. It’s like how to bring them back so that they have good experiences. Is that what you mean?
Patrick: Yeah, yeah. It’s gets more involved than that, but that is certainly the start of the issue.
Matthew: Okay. Now you’ve kind of used a little lean startup techniques and methodologies for trying out little products cheaply and quickly with dispensaries. Can you talk a little bit about how you think about that and what you do there to kind of see what they want and what they don’t want?
Patrick: Sure. Well before I open the doors of the accelerator I developed a few products. Certainly wanted to see if they would be breakaway successes, but it was also a learning process in order to learn the realities of selling into this particular market because I didn’t have that experience personally. Although I personally love and still love using these products that I made, mostly focused on unique delivery systems, and I’ve certainly have continued forward using the elements of some of what I’ve learned on those projects. But what I found when I put it up against the marketplace is that these products were simply not the right product for this market.
One part of my job is helping entrepreneurs, actually a big part of my job, is helping entrepreneurs understand that having a great product that you personally like to use is just the starting point. It also needs the right product market fit. It needs to be easy to explain and understand. It needs to be easy to productize, to manufacture at scale and finally to merchandise.
Matthew: Right. Right. It helps too if the target prospect has the market segment in their mind. So if you’re making a new kind of dugout, well everybody kind of understands what a dugout is.
Patrick: Surprisingly not actually. We had a lot of balneal bud tenders that gave us a blank stare when us 40 year old guys showed them disposable dugouts. They didn’t know what they were.
Matthew: Okay. Now I agree with you. I think the cannabis market is going to chip away and kind of cannibalize the alcohol industry to an extent, but why do you think that’s going to happen and do you see it happening already in perhaps Denver when you talk to other people?
Patrick: Yes. That’s an interesting question that spans a few different issues. Certainly there’s always the middle aged person like myself. The term I use is soccer dad. It’s not just the moms that take the kids to soccer trust me, or maybe the hockey dads because that sounds cooler. Yeah a little tougher. Us soccer dads as we get older, hit our middle age, alcohol becomes much harder to tolerate and cannabis much easier to tolerate. You don’t wake up with a hangover, but there’s even aspect of being on your personal wellness spectrum. I’m personally not a medical cannabis user but I would term squarely recreational but I had a pulled muscle a few days ago and it really hurt and it was going to be a couple days until I got into the doctor so guess what. I pulled out my cannabis and it wasn’t the cure all but it certainly helped a lot. So there’s definitely some aspects there that you’ll see the middle age market I think chip away at their alcohol usage and substitute alcohol for the various cannabis products.
Matthew: We talked a little bit about the millennials there. You’re a hockey dad. What other types of demographics do you see adopting cannabis and in what way?
Patrick: Well growing the marijuana market is definitely going to be a family project. It’s millennials, it’s soccer dads and now we’ve even got grandmas trying it for their health issues. Although the growth of the consumer base from these what I call canna returnees or even canna newbies may not quite yet be showing up on national polling data. I’m already seeing it and hearing it happening here. We’re about two and half years into legal adult use in Colorado and quite honestly most of the stigma has melted away. I’ve got these soccer dads or hockey dads that I’ve known for 15 years and they come and talk to me at the kids’ hockey games or at a church function or at a graduation party and these guys just like me, they used marijuana in college and maybe a little bit after, but then they quit smoking maybe 10 to 15 years ago. Usually they just got too busy with kids and jobs and a big component was losing their dealer. They weren’t going to bother to find a new dealer, and they certainly weren’t going to grow plants and maybe they didn’t even want to smoke. Today they, like me, can walk into a clean store and buy an edible or a pill or some other non-stigmatized THC delivery system and at least some of the growth we’ve seen in what I would term a “mature” market like Colorado is going to continue to come from these hockey dad canna returnees. Again for those reason I have mentioned about, alcohol being, well after all it’s a poison. It’s harder for your body to tolerate. Whereas marijuana fits the bill nicely for middle age people who need maybe a stress reliever kind of within their personal wellness spectrum.
Matthew: Do you have any concerns at all about big tobacco getting into the space and pulling the picnic blanket out from underneath the small guys?
Patrick: Well the very simple answer is nope, not at all. There’s more to it than that but basically I’ll double down on that statement. Big tobacco won’t touch marijuana with a ten foot pole even after full federal legalization, and lots of people disagree so why do I stake out this position. Well the short answer is there’s absolutely no business synergies to be had here. Here’s kind of the longer answer. First of all big tobacco doesn’t know how to compete in a free market. Barriers to entry have shielded them from new competitors for just decades and they haven’t even innovated their core product for generations. So they’re not nimble, the opposite.
Second of all, marijuana requires a totally unique manufacturing reality. Phillip Morris simply does not want to set up a factory in each state. Third thing is that marijuana is totally unique wholesale distribution system which is radically different in each state to boot. Altria, one of the large conglomerates, they like to work with very large distribution wholesalers. Altria does not like the idea of 50 states specific distribution arrangements. Then there’s also a fourth thing is just that marijuana has a totally unique retailing network. R.J. Reynolds knows how to sell into 7-11. R.J. Reynolds does not know how to sell into an industry where the largest retail chain has all of 15 stores.
Finally the fifth thing is it’s simply easier and safer for them to take their tride and true playbook and take their cash and go abroad. They would prefer to go to countries with young, newly affluent middle class that aspires to buy Western brand. Don’t get me wrong big tobacco always faces challenges in foreign markets, but these are challenges that they already know and they know how to deal with them. Now I will give myself one caveat there is let’s talk about small tobacco. Let’s say companies with a market cap of under a billion dollars. Well these companies can’t easily go abroad. So they certainly might take a stab at marijuana and actually have talked to at least one guy who tells me he’s the tenth largest tobacco distributor in the United States. He’s taking a stab at it, but he’s not an 800 pound gorilla that has all the advantages that come with massive scale. So that’s sort of my thesis on why big tobacco is going to avoid marijuana markets. There’s just nothing in it for them.
Matthew: Gosh I hope you’re right. That would be great.
Patrick: That would be great.
Matthew: Turning back to Good Life accelerator. Let’s walk through just what you see as a typical type of applicant and what you’ll be doing for them and what you’ll get out of it and what they’ll get out of it.
Patrick: Okay let’s break that out. Well let’s start with the applicants. What am I looking for in an applicant. Well I call myself a sweat equity venture capitalist, and just like any venture capitalist I look at the product and I look at the team but the emphasis is on the team because any VC will tell you that if the team isn’t good enough, it doesn’t matter how good the product is. So normally I expect to see a team of two or more people but that’s certainly not required. Now if somebody comes on board with me. I hate to say application accepted them. It makes it sound almost academic. This is a business transaction, but if somebody comes onboard with the Good Life accelerator, the big benefit for them is that they save a lot of time and they save a lot of money.
Conservatively, depending on your situation, Good Life might save them nine months and a half million dollars versus going out and getting their own facility and license. I tell all the candidates that there is no template, that if we take on a company that’s very early stage, then Good Life operates like an incubator, helps them flesh out their entire business model and product. If we take on a company that has most of their business case and product work done, then Good Life operates more like an accelerator to continue that growth. If a company has literally their entire product and business ecosystem built out, proven up, (18.18 unclear) dialed in, then Good Life has the potential of operating like a very simple co-packer simply to get their product manufactured and on the shelves. For most of these companies, not all of them but for most of them the ultimate goal is to build a product and a business that can be licensed multi-state.
Matthew: That is a huge help because you know just getting your trim extracted into oil and having a kitchen where you can make your edibles and things like that. Just hunting for all those individual components is timely, expensive and it just can be frustrating. So I can see that someone in particular making an infused product would benefit from this.
Patrick: Sure, sure. Yeah. No, I mean certainly it’s the time and it’s the money, but a lot of people don’t have hundreds of thousands of dollars to sink into the real estate which is a critical component license, but more importantly most people don’t want to wait a year in order to try to get their license, in order to get their product on the market.
Matthew: And are the terms just individually negotiated on a case by case basis or is there some template you use for people that are going to be in the incubator or the accelerator?
Patrick: Truly there is no template, and the reason why is Good Life adds value in different ways for different companies so everybody needs a customized deal. Now maybe it’s a well funded group and maybe they have a new oil processing technology, but it’s still too early for anybody to assess if it’s truly valuable technology. So maybe they make a straight cash payment for Good Life’s services for a few months until they reach a technical milestone and then we reassess. On the flip side maybe a group has no funding at all but I see a lot of promise so I might offer them a straight equity deal with obviously the more time and resources I provide the more equity I would require. Of course we can do hybrid deals, but the one thing that I always build into every deal is something to ensure that we all have the same goal which is to make this new company worth as much as we can and as fast as we can. We really definitely want to align those goals.
Matthew: Now in terms of would not be an attractive applicant, is that someone that just wants to create kind of a me too product with no unique selling proposition?
Patrick: That’s about as accurate as you can state it, yeah.
Matthew: Okay. Do you see a lot of those coming to market where it’s like hey I want to make a chocolate bar and if you just say hey try something unique, what do you a say to someone like that?
Patrick: Well thankfully no I haven’t had to have that conversation very often which was a pleasant surprise. I was worried that exactly that would happen, but it’s a function of two things. Certainly there are people out there who are developing brownies, don’t get me wrong, but there’s so much white space in this market that I can be talking to this person about their special kind of concentration, this person about their extraction technology, this person about their CBD bath bombs. We’re building an entire ecosystem of consumer product good here or consumer packaged goods. So there’s more than enough white space for everybody to fill their own little niches and sub-niches.
Matthew: Okay. And have anybody gone through Good Life to date?
Patrick: Well it’s not brand, brand new but it’s fairly new, but we do have one early success story. Last fall I started working very intensively with Choose Corp which created the…
Matthew: Sure, sure we’ve had them on the show.
Patrick: Actually a couple months ago. It was a good interview and I embedded very deep into that company because I knew that they had really a game changing product. So that was an all hands on deck sort of situation. So I basically for about six months just delayed seeking new candidates because I didn’t have enough bandwidth. Now Choose has products on store shelves as of about a week ago and they’re raising an investment round which now affords me the opportunity to do it all over again with the next transformative company, but I’m definitely staying close to Choose and I’m serving as their general council so I won’t be leaving them any time too soon.
Matthew: What a unique opportunity with Choose because essentially their hemp terpene puck is legal in 50 states since the THC is so low but they say use it with your own cannabis and then you can kind of custom craft your mood. That’s a very unique and also easy way to get out to market. So I can see why you were interested in (23.10 unclear). There’s definitely a value proposition there.
Patrick: Yeah no it’s an interesting product and for me as an attorney it had all sorts of interesting legal implications and ways to sidestep, not sidestep the rules, the rules simply didn’t apply so that one as I said I had to embed pretty deeply because they had a lot more legal questions and paraphernalia type questions than a typical company would face so it was an interesting challenge.
Matthew: Do you take outside investment at all Good Life?
Patrick: Well the short answer is no. As any of your listeners who have tried to raise funds know, chasing investment dollars is truly a full time job, and so although I could probably find great ways to deploy outside investment, I frankly don’t have the bandwidth to do the whole dog and pony show I’d need to do to chase those investor dollars and quite frankly I’ve deliberately set it up so I don’t need other people’s money. No, obviously if one of your listeners is investing in the industry and agrees that I’m really on to something big with this accelerator approach, then sure I would love to hear from them, but it’s certainly not my focus.
Matthew: Okay and how can they reach out to you if they want to about that?
Patrick: Sure well they can just visit the website www.good-life-colorado.com and I certainly look forward to hearing from your listeners who have the next big thing.
Matthew: Yeah me too. I would love to have you back on the show after you get some more people to go through the program since we had Charles from Lucid Mood on, I would like to see it because these are definitely interesting times and this definitely a bow wave of the industry seeing how things unfold. I mean I don’t know of anybody else really doing things like this. So this is Kudos to you for going after it.
Patrick: As I said, there’s plenty of white space and plenty of sub-niches that need to be filled.
Matthew: Let’s pivot to some personal development questions. As you look over the arc of your life is there a book that has had an outsize impact on your life that you would like to share with CannaInsider listeners?
Patrick: Well actually even better I’ll give you two.
Matthew: Two, alright.
Patrick: Yes bonus day. So the first one is Swim With the Sharks Without Being Eaten Alive and that’s by Harvey McKay. Old, old book, decades old. It has simple anecdotes from the frontline of business, and most business books pretend to be scientific but let’s be honest, business isn’t science. Business is subject matter expertise plus business best practices plus human interactions. So that’s why I like that book.
I also have a second industry specific book recommendation which is the Cannabis Manifesto by Steve Deangelo who I’m sure you’ve interviewed more than once, but Steve makes the point that marijuana is not really clear cut medical or rec. Instead marijuana can play a role in everybody’s wellness spectrum. It might be one person’s anti-seizure treatment of last resort. It might be another person’s way to just simply have fun and unwind, and we all fall somewhere on this health/wellness/recreation spectrum. What I liked about the Cannabis Manifesto is it really clarified that issue for me.
Matthew: Is there a tool, web based or otherwise, that you consider indispensible to your day to day life that you would recommend?
Patrick: I don’t really. I just use all the standard technologies so I’m about as boring as that gets.
Matthew: Okay that’s fine. I still sometimes just kind of go to the little pen and paper, little book. I do have one, a little one that can fit in wallet that I find is kind of my go to when I’m in a pinch that has really been helpful for me because I always forget to bring a notebook with me on the go, but I have a credit card size one in my wallet. I’m finding that one is not very tech savy but kind of my go to lately.
Patrick: You can’t forget where you filed it. Actually I use my Gmail to keep all my notes because that’s one place that’s my inbox and where I make my notes and where everybody contacts me. So I guess I live in my email box.
Matthew: So Patrick I understand you have a pop quiz for me. Do you want to tell me what that is and what I’m about to be quizzed about?
Patrick: Well basically the quiz is about why the cannabis market will look a lot like the alcohol market. So if you’re willing to take a pop quiz, we’ll walk through that and see what you think.
Matthew: Sure let’s do it.
Patrick: Okay well what’s the largest domestic US fast food chain?
Patrick: Yeah 14,000 units. I did have to look that up. I don’t know these things off the top of my head. So what’s the largest coffee shop chain?
Matthew: Dunkin Donuts.
Patrick: Oh come on.
Matthew: Starbucks. I thought it was a trick question.
Patrick: That was not the trick question. Here’s the trick question. What’s the largest full service liquor retailer? You’re right, there isn’t one.
Patrick: So you got two out of three. Why are there no large alcohol retailers? Simple, prohibition. Post prohibition each state made its own rules that are still with us 83 years later and each state made its own rules. That’s already happening in marijuana regulation so it’s a forgoing conclusion that post prohibition marijuana will follow the same state by state path that alcohol took which is again a reason why big tobacco is going to be boxed out. But even though alcohol retailing and distribution are fragmented state by state industry, you can still find your favorite national brands in any liquor store you walk into. So in the same way that brands are the most valuable slice of the alcohol industry so they will be in marijuana, and that is the reason I want to own equity in many many different marijuana brands. When I say brands I don’t limit the accelerator solely to consumer facing brands. If you have a strong B2B product like that inexpensive, high quality trimmer, I want to talk to you, or if you have a novel product or device that saves money for infused product manufacturers, I definitely want to talk to you. You know I think it’s instructive to see that just like the brands are the most valuable segment of the alcohol ecosystem, so the same will be true for marijuana.
Matthew: Great points. Also the States have a huge incentive to keep a national policy from overreach because they can define the tax regimen that benefits them the most. Once they get that revenue they’re not likely to give it up easily.
Patrick: Yeah, no you might see an overarching federal tax, but you’re certainly not going to see the federal government even really that interested in taking over. The FDA will definitely want a say so that will be actually probably the multibillion dollar question is what role the FDA plays in post prohibition regulation, and that’s a total question mark in my mind, but the answer to that will certainly end up driving a lot of industry to develop in say ten years out from now.
Matthew: Gosh it’s just so crazy to think about how successful the propaganda was to demonize cannabis. I mean it was an unbelievable success that it’s almost even hard to contemplate it. It’s that newspaper baron from…
Matthew: Yeah William Randolph Hearst and he owned all the newspapers and man did he get this deep deep into our psyche about why this plant was demonized, and I think it was just because he said, he gave a lot of reasons, but he said it was cannabis and hemp. First he conflated those two into one plant which is crazy, and then it was because he wanted the cotton I believe to be the kind of defacto for a lot of different commercial applications. He didn’t want hemp to get traction. I believe that’s right, but here we are decades and decades later trying to convince people that we shouldn’t (a) demonize hemp. There’s no psychoactive component at all and then now cannabis too, but it makes one wonder if that propaganda campaign was that successful, what else do we believe that’s simply totally untrue. What else in our society, it’s so deeply entrenched into generations that we believe is true but it’s not.
Patrick: Well that is actually a very good question, but I think the thing that I take away from that is that beware of the law of unintended consequences. How many millions of lives have been ruined simply because a very unpleasant billionaire of his time decided he had a problem with the plant. Maybe it was a commercial interest or maybe it was a morally driven campaign, but he certainly had some allies. But what I find actually interesting, Hearst is one example and Slinger, the former alcohol drink prohibition. I mean you can point to a couple of gentlemen over history, and I’ll use the word gentlemen sort of loosely, but you can look a couple of gentlemen over history and just through force of will and being absolutely rabid in pursuing a goal, bad goal in this case, but in pursuit of that goal they basically drove policy that lasted for generations, ruined millions of lives, stifled entire industries. We’re only just now bringing back hemp as an industry after probably what three or four generations. So yeah although history sort of eventually finds its way, don’t underestimate the power of a single individual to radically alter the course of history for decades until it finally course corrects.
Matthew: Agreed and well said. Patrick as we close can you tell the listeners again how they can learn more about Good Life accelerator and connect with you?
Patrick: Sure thing. I would be happy to. The website is www.good-life-colorado.com and those three words are separated by a dash or a hyphen. Again it’s www.good-life-colorado.com and I look forward to hearing from your listeners who have the next big thing.
Matthew: Great. Patrick thanks so much for coming on CannaInsider. We really appreciate it and good luck to you.
Patrick: Thank you.
Matthew: If you enjoyed the show today, please consider leaving us a review on iTunes, Stitcher or whatever app you might be using to listen to the show. Every five star review helps us to bring the best guests to you. Learn more at www(dot)cannainsider(dot)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 www(dot)cannainsider(dot)com/trends. Have a suggestion for an awesome guest on www(dot)cannainsider(dot)com, simply send us an email at feedback(at)cannainsider.com. We would 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. Lastly the host or guests on CannaInsider may or may not invest in the companies or 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.
Patrick O’Malley takes his experience as a cannabis-focused entrepreneur and founded an infused products accelerator called Good Life. Discover what infused products companies need to succeed.
[2:42] – Patrick talks about his background
[3:51] – What is Good Life
[8:34] – Patrick talks about startup methodologies and techniques
[10:25] – The cannabis industry is going to chip away at the alcohol industry
[11:52] – What demographics are adopting cannabis
[13:47] – Patrick talks about big tobacco getting involved
[16:45] – Good Life typical applicant
[21:43] – Making it through Good Life
[23:47] – Does Good Life take outside investing
[25:49] – Patrick’s book recommendation
[28:03] – Pop Quiz for Matt
[34:15] – Contact details for Patrick and Good Life
Learn more at:
What are the five trends that will disrupt the cannabis market in the next five years?Find out with your free guide at: https://www.cannainsider.com/trends
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 www(dot)cannainsider(dotcom. That’s www(dot)cannainsider(dot)com. We’ve talked about CBD or cannabidiol on the show many times. Just to review though CBD is a nonpsychoactive compound from the cannabis or hemp plant that has many benefits. Now our friends at Treatibles have put together a wellness CBD chew that can help your dog or cat become more calm and balanced. Valerie wrote in to tell us about her experience.
Valerie writes my ten year old Husky/Shepherd/Lab mix Chuck is my faithful companion. Chuck got significantly quantifiably better from using Treatibles. It took about three days of feeding Chuck two to three doses a day to see the full effect but he did get noticeably more comfortable on the first day of feeding them to him. Before CBD Chuck limped and couldn’t enjoy longer walks though he clearly had the desire for them. Once he started taking the CBD chews he could leap around again. Thanks for writing in Valerie. Treatibles are legal and available in all 50 states right now. If you want to learn more about what Treatibles can do for your pet visit www(dot)cannainsider(dot)com/pet again that’s www(dot)cannainsider(dot)com/pet. Now here’s your program.
Matthew: We are fortunate to have Harry Resin on the show today. Harry has a column in High Times Magazine that focuses on cannabis cultivation. Harry welcome to CannaInsider.
Harry: Hey Matt give thanks. I really appreciate you having me on here.
Matthew: Glad your here. To give listeners a sense of geography tell us where you are today?
Harry: I am in Nor Cal at the moment.
Matthew: Okay and I am in the beautiful Green Lake, Wisconsin so we’re a few miles apart but this sounds like we’re in the same room.
Harry: Yeah I know it’s amazing. The quality is fantastic.
Matthew: Can you tell us a little bit about your background? How you got into cannabis and how you came to write a column for High Times?
Harry: Sure. So I was fortunate enough to move to Amsterdam about 1999 and had the good pleasure of meeting some Americans that were if you will refugees from the drug war here in America that had I don’t want to say fled but that had left for greener pastures in Amsterdam. One of those was a very famous breeder named Soma and he kind of took me under his wing and through Soma I met someone named Ed Borg who was a photographer at the time for High Times and he was in the process of setting up a seed company which was called Delta 9 Labs and he was looking to live most of the year in Asia looking genetics and doing a bunch of breeding projects out there. So I happened to be in Amsterdam and we started to work together and one thing led to another and we had a seed company for about six or seven years together called Delta 9 Labs.
Matthew: Oh very interesting. What was that like living in Amsterdam during that time good memories?
Harry: Yeah it was the best. It was amazing. For me that vibe and all of us coming together and sharing knowledge. The beginning of things like overgrow and how the internet changed the spread of knowledge is in my belief really what led to the explosion and if you will the hundredth monkey phenomenon that’s happening right now where legalization or some form of medical allowance is spreading rapidly all over the world. The fact that Canada is now going to legalize it in 2017 is amazing.
Matthew: Yeah. It really is but we still have little bits like some government organizations that still just want to hold on to the way things were and you can see them throwing tantrums even though the wave is unstoppable at this point.
Harry: Yeah I think the same thing would have happened in prohibition times with liquor. You still would have had those holdouts that are like well no and it’s like well actually yes you lose.
Matthew: Yeah, yeah. Well what are you doing now apart from your column with High Times?
Harry: Well oh so to come back to how I started to write for High Times is in the process of us having the seed company we realized that there was a lot of information out there that was lacking and I got very lucky living in Europe to have met a lot of the publishers and a lot of the editors for all the different publications and just started to write for the different magazines and then High Times hired somebody named Nico Escondido who now needs no introduction. Because he’s pretty famous out there and when he first started he reached out to us and came to Amsterdam and we became friends and through that connection I started to write for High Times.
Matthew: Got it. Okay.
Harry: Yeah and so what am I doing today? I moved out to the Bay area to work on very intense marker assisted breeding project with in fact Nico Escondido and that’s something that we’ve been working on for the last two years under the auspices of CGI the Cannabis Genetics Institute.
Matthew: And tell us about that in a little more detail.
Harry: So fundamentally in the last ten years there’s been a lot of advances made on the marker assisted breeding side which basically means that through DNA sampling and various types of experiments a lot of the biologists today in commercial ag have found ways to use this new genetic profiling and this genetic information in an advanced sense of breeding. So what does that translate too? By looking for various markers in the plant so the plant works the same way a human does. It has chromosomes. Those combine and then on a DNA level there are various markers and those markers can be examined. So you could find markers for the sex of a plant and you could find markers for the color. Purple was one that was found and now they’re starting to look at the way in which cannabinoids are SEN phased meaning how does THC form? How does CBD form and what we’re able to look at is via certain ratios of cannabinoids we can get a sense as to the zygosity of a plant.
Meaning will the plant be heterozygos? Will it be homozygos dominant? Will it be homozygos recessive and from a breeding standpoint that will give us a more in depth view of the plant and a quicker path to get to an end result because we could test our leaves, we could look at different ratios now that will give us a bit of a head start on understanding how the plants will work when you combine them with other plants.
Matthew: Wow. That’s fascinating.
Matthew: Well let’s start with some cultivation questions. There’s a lot of people out there that would love to pick your brain on cultivation. So if you were helping someone, a friend or a client set up their first commercial indoor grow what advice would you give them and I don’t mean so much as the tacticals like blocking and tackling.
Matthew: And play by play but more of the lens.
Matthew: This is how I as Harry look and approach a commercial grow.
Harry: So for me the first thing would be ask a lot of questions because here in California there is a very specific of regulations and guidelines and that’s the first thing. Does the location of the grow fit into the framework that is in place whatever that regulatory framework is depending on what state you’re in because the last thing you want to do is put a couple million into a project and then find out that the zoning isn’t right. So I would say that that’s absolutely the first thing. Learn the landscape of the land and know what you’re getting involved with and then from there really think about in terms of layout and construction really think about what works best based on the situation that you’re in. You get a lot of people that sort of want to build and go in and change but work with what you have. That’s what I tell people.
So if you have the ability to create metonym well create a metonym because you’re double your space in that location. If you can’t work in that location with a mezzanine but you have a huge parking lot well maybe you want to throw some hoops up or throw a little greenhouse in the parking lot out and have a little bench space that’s a sort of mixed like greenhouse space. So it’s really work with what you have and then once you actually get into the space I would then; I always recommend people using smaller chambers. So chambers with 25, 50 lights rather than blowup these huge 100 light spaces because it’s much easier to manage a smaller chamber than it is a huge 100 x 100 meter room filled with 150 lights. That’s always been my experience that better to create smaller spaces in a large cultivation site that you can manage. It just makes things much easier with regards to takedown plant counts.
Matthew: Harry are there any rookie mistakes you see in grows that could be easily avoided.
Harry: Yes absolutely. One of the biggest that I see especially in California is under air conditioning. So here it’s very common for people to build closed rooms which is basically a self contained grow room with CO2 added, air conditioned, and really sort of perfectly in tune environment but one of the biggest mistakes that I see is that people will often want to cut a corner and for whatever reason they’ll spend less money on their air conditioning when fundamentally that’s one of the most important aspects of room design. So I would definitely stress work with somebody that understands airflow, that understand BTU’s and cooling, and I’m not saying that you need to necessarily over cool your rooms because you don’t want to get a situation where your AC is short cycling meaning that it comes on and off very quickly because it’s too powerful but you definitely want to ensure that your rooms are cool enough because in California in some places it gets to be 110 degrees in the summer and a too hot room will always kill your plants.
Matthew: So let’s talk a little bit about airflow. How do you think about that? What’s important? I mean how do you approach it?
Harry: It really depends. In Holland we approached it from a completely different standpoint and I think that for the perfect room there needs to be a balance of both a closed sort of system as well as a system that makes use of air pressure. So to sort of further expand upon that in Holland we never really used air conditioners because the temperature was cool enough that if we vented the rooms enough using the right measurement of airflow so how much exhaust we needed to put out there versus how much heat was in the room for the lights and the CO2; all these different factors we would vent the rooms. Now that worked very well in a cooler climate. Now here in California that does not work so well. However the best rooms that I’ve seen made use of scientific clean rooms. So in scientific environments you have these clean rooms whereby you walk into one room that has over pressure which sort of blows on you, you put on a suit, and then you go into your other room which has under pressure.
So when you try to open the door in the grow room in Holland it’s hard to open the door because the pressure sucks that the door is suction closed and what you have is you have airflow going through the entire canopy of the plants. Here often people confuse airflow with wind. So you’ll come into rooms here that have all these fans and yeah that’s great and they’re circulating the cool air through the room but fundamentally the idea of pressure is not the same so if you went into a room in Holland and stood there and smoked a joint that smoke from the joint would throw itself through the room and you’d actually see the flow of smoke whereas here it’ll just get knocked around by the wind which is basically the fans. So I tell people look at the difference between wind and air pressure and that’s something that is often overlooked here in the states.
Matthew: Were people using greenhouses in Holland to grow cannabis when you were there?
Harry: They were as well but that was a little bit trickier because as most people don’t realize it’s still even to this day highly illegal. So in Holland you really had to be very careful to avoid detection. So fundamentally that was one of the things that prevented people from growing in greenhouses because it just was; there would be literally helicopters flying overhead. They were really looking for growers in Holland.
Matthew: Wow. Well now there’s less of a pressure in most states to avoid detection because it’s legal at least at the state level but there’s ordinances being created to curb the scent of cannabis because some neighbors don’t want their whole neighborhood to smell like it.
Matthew: Is there any suggestions you have there to keep the smell down?
Harry: Yeah. I mean I would work with can filters. Those in my experience have always been the best. And always over filter so you’re going to put filters in your grow room but then think if you’re sitting near your house and you’re a big heavy guy and you smoke a lot of weed your house is going to smell like weed. So put a filter in your house. A lot of people forget that the hallway in their grow sometimes might smell. Put a filter in it. Don’t be afraid to put filters to get rid of smell that’s why they’re there.
Matthew: Right. How do you look at nutrients and approach that when you’re trying to optimize your plants?
Harry: Truthfully with nutrients I’ve been very lucky because I’ve been working with advanced nutrients for probably about the last 15 or 16 years. When they first made a push into Europe my partner Ed and I at the time we were quite fortunate to be one of the first early adapters of the nutrient line in Europe because we knew the person that was importing it and then when I moved here again writing for High Times and working with Nico I got to meet big Mike and I really got to sort of get into the advanced line and yeah I’ve got to say I really like it. I know it’s expensive. I know people that potentially have their complaints about buying products that have a lot of water but if you look at the connoisseur A and B as far as a complete A and B nutrient it has one of the most well balanced formulas I’ve ever seen. There’s five or six things in there that normally you would have to buy separately from fulvic acid to humic acid and plus they have this PH perfect system which basically you add the A and the B and it completely PH’s the nutrient mix so you don’t really have to add a PH down. I just like it. It’s easy. It works for me.
Matthew: Okay and what are some of?
Harry: And personally the results are amazing that’s the other thing. You got to go with what you get and we’re getting almost two and a half pounds a 1,000 watt light. So we’re getting the yield and we’re getting the quality.
Matthew: Okay and let’s proactively kind of look at some of the complaints there or the possible concerns. You say that hey there’s too much water in it but it’s not really so much about the water as is it effective is what you’re saying.
Harry: What are the complaints that people will have with a lot of these nutrients is you’re getting a 23 liter container of nutrients where a large chunk of that is water. A mycorrhizal might only be 2% in which case actually 90% of that bottle is water. So people could argue well a powdered food or a food that contains the raw elements and that might just require RO water would be more cost efficient to ship. Just things like that from an environmental point of view.
Matthew: Okay and you mentioned PH earlier let’s talk a little bit about that. I mean most people remember their high school or elementary school discussions about PH and acid and base but they really don’t know how it fits in at a high level with cannabis. How do you think about PH?
Harry: PH is very, very important especially depending on what medium you’re using because with certain mediums the PH matters less with soil so like the real dirt (17:54 unclear) and peat moss and a mixture with lime. A really good solid heavy mix you almost never need to PH your nutrients because it’s always being buffered by the soil. However when you’re just working with rockwool you absolutely need to PH and be very on top of it because your rockwool is not buffering it. So it really depends on the medium you’re using but PH is very important and often under looked and basically what is PH? So it talks about the; well PH is a scale measuring alkalinity and acidity in something. So in this case it would be in your medium or in your nutrients. So as we know with humans anything that’s too acidic is not good for us, we actually want to be little bit higher in the alkaline range.
Now with cannabis you want to fluctuate your PH between around 5.7 and 6.2 and the reason for that is what PH is doing in cannabis is it largely dictates the type of electroconductivity in the medium so depending on how acidic it is versus how alkaline it is different nutrients will be uptaken at different pionts. So certain things will be taken in in the lower range between the 5.5 and the 5.6. Some of the micronutrients where as nitrogen is usually more taken in around the 5.9, 6 range so it really depends where you are on the spectrum of PH as to how your nutrients will be best absorbed into your plant.
Matthew: I follow you on Instagram and I saw in your feed that you’re using SmartBee controllers. Can you tell me what those are and why you use them and why they’re important?
Harry: Sure. No I’m glad that you bring those up. So the SmartBee controllers are a system that is in the next several years going to be even more valuable than it is right now because there’s all of these plugins that are coming. So fundamentally the SmartBee is a room monitoring system and controller. So it works a hub. That hub goes online. It allows you to access your room information from any type of cellular device or computer. It works via a web app and then you can also control things at the moment via what they call Stingers which are basically plugs that are controlled via these control units. So you could plug your humidifiers in and they now have a device that’s going to start working with the Gavita’s so you can plug your Gavita’s and control your lights.
You can work with a drip system. They have a very advanced moisture detection system that you can put in your medium and the moisture detection system can work with your drip system to ensure that if your plants ever dip below a certain moisture level the drip system will always kick on. It’s a phenomenal system. So basically in your room you have a monitor which is a light, temperature, humidity, and CO2 monitoring device so it gives you over the course of seven days a complete overview of how your room is looking from temperature to humidity, how your AC’s are working. So from my perspective it gives me an unbelievable look into my grow room over the course of a week, over the course of 2, 3 days I can narrow it down to 24 hours if I want and then on top of that it allows me to better control my humidifiers as an example, to control eventually my air conditioners, and the reasons that these systems are better is because if you look at lot of commercial dehumidifiers even though they might be very expensive the actual sensors inside are not that great. So there’s usually a very large differential with temperature or humidity whereas these units are very expensive and very precise. So as a result of that you get much better control through your devices.
Matthew: So pretty interesting there. It’s kind of like home automation for the grow room to make it kind of a parallel there.
Harry: Yeah a parallel to like a nest kind of thing.
Matthew: Okay and what do you see as kind of your biggest benefits when you’re using these SmartBee controllers? I haven’t heard of them so I’m interested in top of mind.
Harry: So many benefits.
Harry: So the first benefit is if your lights go out you get an immediate email from the system. So like short of you having just visual cameras and then you having to look every 10 or 15 minutes this actually tells you. So you don’t need to do that. How can we look at our cameras in our room and constantly know if the lights are working properly but this system will email you if it’s not. I look at it like an early warning system and in addition to that it makes understanding your rooms much easier. So if you look at your plant and you go into the room and say okay why is my plant a little bit yellow here? What’s happening here? You can really dial in your rooms not just from a nutrient point of view but from an environmental point of view of actually looking at potential flaws and why the environment might be fluctuating, why this one room might generate more powdery mildew? Maybe your humidity levels are fluctuating too much and your dehumidifier needs to be changed or the filters or broken on it any number of reasons so this system gives you a real in depth look at your room from a technical point of view.
Matthew: That’s great. So you’re monitoring all your variables.
Harry: Mm-hmm (affirmative).
Matthew: In one clean dashboard.
Harry: Yeah exactly.
Matthew: Okay. Well let’s talk about clones. First why do growers use them and second how do you make healthy clones? I’ve heard little tips from growers in the past where they say make sure to dip your scissors in alcohol before cutting a clone and there’s little things like that. I know there’s all kinds of knowledge that are wrapped up in people’s minds and we just never get to hear about clones so much. So tell us why you use clones if you do and how you use them in best practices and so forth?
Harry: So generally clones are easier to use because for the most part you know what you’re getting. There are some cases where you experience something called genetic drift which is basically where you have a mother plant and you keep taking clones from it and then over time those clones will be slightly lesser than the previous version.
Harry: That can happen but generally clones are very consistent. So I mean I’ve seen mother plants that have been kept for twenty years. Clones have taken off and the plants are just as robust. A lot of the OG’s back in the day were very old. You had some SFV’s that now are fifteen year old plants. Then in some cases people have kept moms for four or five years maybe even longer ten years. So clones are very important from that aspect to be able to have a closed system where your plants are growing, you have your moms, you can make your clones, you know your harvest cycles, you can put your clones into your rooms, you can veg them. It gives the grower a better control over all aspects of his system. You know what genetics you’re putting in, you know you’re yields are going to be there, you know how to work with the plants, you know what nutrients work best, so that’s fundamentally why people use clones because they like to keep things in a closed system especially also you don’t want to introduce pests and other diseases that might come in from bringing clones in.
So clones is a very easy way for a grower to start with and plus when you start with seed it takes a little bit longer because it will be about three weeks from the little seedling till you can take the clone of that and then you have to sex them out if they’re not feminized so it’s just much easier with a clone. You know what it is, you know that it’s female all the time, and you know what you’re going to get. Now as to making clones the one thing that’s very, very important that I can’t stress enough is a clean, sterile environment so that’s why as you mentioned people will clean your scissors. I recommend using razorblades for the final cut. So fundamentally what you’re doing is you’re taking a little shoot off of your mother plant and you’re looking to keep at least three internodes. Those are the tiny little points where the leaves connect to the main stem and you want the clone to be about 4 or 5 inches.
You generally clean it up. Take off the fan leaves and what’s very important is to make a clean cut at the bottom of it at a sort of 45 degree angle the way you would cut fresh flowers before you put them in a vase and then you want to dip it immediately into some type of rooting solution hormone gel because that will encapsulate the open plants tissue. Otherwise what could happen is an air bubble could get in there and it could develop yeah kind of like a human aneurysm where the air bubble gets into the plant and the plant will literally just die.
Matthew: So that 45 degree cut is that to provide more surface are for moisture and so forth or why a 45 degree angle?
Harry: It’s to increase surface area and to better have the roots form and to better have a closed sort of dip you know what I’m saying? That when you dip it into that hormone solution it really encapsulates that and at a 45 degree angle it just covers that surface area much better.
Matthew: Okay and if someone tries to not use a hormone solution and just like hey I’m going to throw this in this soil what can they expect?
Harry: Very little success rate but often you’ll still have some clones that will root but I would not recommend that.
Matthew: Okay. Anymore tips on grow room management?
Harry: Well just bear in mind that grow room management is basically another word for logistics and the best grow rooms I’ve seen are run by people that really understand logistics and understand management. Understand that you need to have a really good team around you and don’t be afraid to hire people. I mean obviously you have to trust the people but work with people. You can’t do everything yourself and that’s something that I often see where people don’t necessarily want to hire enough employees but fundamentally in any other industry you know that if you needed an employee you would hire an employee. So this is the same thing and the plant really needs care and attention so things can very quickly get overlooked.
Matthew: Let’s pivot to pests and diseases. What’s the best way to create an environment that really minimizes the opportunity for pests and diseases to take a foothold would you say?
Harry: Well so what I said earlier the best way is fundamentally to work with a clean room.
Harry: So every room is a clean room, every room you have your own Tyvek suit, your own suit to go into that room, you have shoe covers or your own specific shoes for that room. You want to track as minimal amount of spores or eggs or things from room to room. Often you’ll see growers that have three or four locations and they’ll literally come from one location and they won’t change their clothes, they won’t put on a jumpsuit, they’ll go right into another room. So yeah I see stuff getting spread all the time.
Matthew: What are the most common diseases and pests you see and if a cultivator is unfortunate enough to get some of those what’s the best mitigation plan?
Harry: So here the most common things that generally I’ve seen are spider mites and powdery mildew. Spider mites are the worst because often people are using environments that still have wood; wooden tables, wooden walls, wooden drywall well or not drywall but wooden walls or sheets or whatever people are using to build their rooms and I would definitely recommend avoiding as much wood as you can. Use things like FRP which is a plastic coating that kind of works like a wallpaper. You just glue it up to your walls and you can wash it down. Avoid, avoid wood because it literally is a nesting ground for mold spores and bugs and all kinds of nasty things.
Now if you do indeed get these I am really a proponent of organic or bioinsecticide type products which is bacteria’s; beneficial bacteria’s. Some examples of products would be Actinovate or Serenade which are products for powdery mildew that have beneficial bacteria in them and they work very well.
Matthew: I haven’t heard many people talk about the bacteria as a solution. I mean it’s usually some harsh chemical or sequestering the plants. Is this starting to take; has this been around for a while or is this starting to become more of the norm would you say?
Harry: It’s been around for a while and it is indeed starting to become more of a norm as people are testing stuff more and more and finding what’s it called myclobutanil which is one of the things in Eagle 20. You see a lot of these product recalls because of pesticides and different things that are being used. As we shift to a more and more conscious consumer who realizes that these pesticides are terrible for you and they don’t want them in their products we’re now starting to see that people are shifting more towards these bio type insecticides and one thing to bear in mind which came up at this quality control seminar that I was just at down in LA is what people also don’t realize is when it comes to making concentrates if you are using flowers or trim or anything that has been treated with any type of insecticide that is one of these really bad insecticides when you put it through a closed loop or if people are open blasting you’re basically concentrating that chemical into your concentrate.
So it’s really, really dangerous and really bad and people really need to be aware that if they’re going to spray any type of pesticide or any type of chemical that they should absolutely test their stuff before putting it in any type of concentrate.
Matthew: I know it’s hard to generalize but as you talk and work with people in different parts of the country how do you see that different regions are different? For example maybe even Amsterdam, Canada, the Eastern United States, Midwest, and then California. Is there any general perceptions you have on how each region differs and who’s kind of the thought leader there?
Harry: Yeah. I think largely what I noticed; the main thing is flavors. The flavors really fluctuate what people like based on region. So there was just a study that was done by one of the labs and they found that the limonene and the certain terps that are more common in different OG’s are more favored down in So Cal versus the alpha-pinenes and some other terps that are more in the different types of cookie strains that are more favored up north in Nor Cal.
Matthew: Hmm that’s interesting.
Harry: Bud that comes from Colorado is often a lot dryer because of the altitude. Yeah it really depends. I would say though the largest thing is flavor and the Colorado thing is rare because I mean all of Colorado for the most part is altitude. And then yeah flavor would be the main thing because if you look at Amsterdam some of the hazes that are more common there are less common here because people like the flavor more.
Matthew:. You recently wrote an article about natural dabbing. Can you tell us about that?
Harry: Sure. So of course as concentrates have become more and more established and more prolific so to speak well there’s been a divide in the concentrate community amongst solvent lists and solvent base. So now some of the solvent list ones they’re categorizing as well as CO2 extracted stuff and you have these Rotovaps making this clear distillate. I mean concentrates have really gone to the next level. So in that crowd you have the three sort of older, simplest techniques which to come back to when we started when I first moved to Amsterdam I started making bubble hash for the coffee shops because that was one of the newest more popular forms of hash. So natural dabbing solvent list types of concentrates would be things like Ice Wax which is a type of bubble hash just super, super refined and really dialed in.
Another type of solvent list hash would be dry-sift. People know it as Kief. But if you get down to 99.999% pure heads there’s a guy now who just moved recently to Oregon but he was based up in Seattle or up in Washington State rather. His name is Cuban grower. His dry-sift is amazing and he’s literally won maybe the last 10 solvent list concentrate cups because his stuff is just so amazing and it’s literally dry-sift but the best dry-sift I’ve ever seen.
Matthew: What’s closed loop extraction mean?
Harry: So a closed loop versus an open blasting type of system is when it comes to using solvents typically butane. So a closed loop system is a much safer way to extract the oil from the plant where basically the entire system is closed so at no given moment you have a room filled with a very volatile solvent such as butane and this is a system that’s been used yeah primarily in essential oil extraction for years. However when concentrates first hit the market and first started most people were open blasting which is a term used to describe just basically emptying a can of butane into a tube filled with plant material or bud and then fundamentally that tube would off gas. Now some people were smart enough to do it outside in the backyard. Other people unfortunately were not smart enough to do it outside and were doing it indoors.
Now when you fill a room without any type of ventilation with butane and someone lights a cigarette or someone turns on a light switch that has a spark or you turn up the dial on your heater or any of these things that has a spark I’ve seen it before the entire room will go up in flames and have a giant explosion.
Matthew: Wow. That would suck.
Matthew: I was hearing a lot more about that like two or three years ago I feel like but it seems like you don’t hear about it as much.
Harry: No now there’s a lot more, like the price of the closed loop systems has come down and people realize if I’m doing it I might as well do it right and invest in proper equipment.
Matthew: Okay. Where do you see concentrates going in the next few years? How do you see that evolving?
Harry: Truthfully it’s pretty evolved at the moment. There’s a company here in the Bay area called Guild Extracts and they were one of the first to produce THCa Crystalline which fundamentally looks like a white crystal so like a white quartz but you can dab it if you want but I would recommend not dabbing it because it’s THCa so it’s undecarboxylated meaning that it’s not psychoactive. So I’ve been giving it to a lot of patients that I work with for pain management and it works amazing. You can literally eat a pin drop and it will be as effective as maybe two 400 mg Advil’s; a pin drop.
Harry: And it doesn’t get you high.
Matthew: Wow. I can’t wait for that to come to market more readily.
Harry: Right. That’s the future. As things become more regulated, more legalized, more accepted it will allow us that have been doing this for so long to actually put our information out there in a more public way. There’s other cannabinoids that are not getting talked about such as CBGa which actually has neuroregenerative capacities. So I know people that have been beta testing various combinations of cannabinoids with as an example stroke victims and their recovery has been unbelievable so much so that a lot of the western doctors are sort of being a little suspicious like hey what are you giving this person and in fact you can tell them because it’s not that illegal. It’s CBGa. It’s like people; it’s not Delta9 THC. It’s not the same thing. It’s a cannabinoid but it actually helps repair and regenerate brain tissue.
Matthew: You mentioned you work with patients sometimes. What are the most common applications that you see cannabis treat well?
Harry: The two most common that I would see is any type of I don’t want to say per say Epilepsy but seizure based illnesses, any people having seizures. Generally I’ve seen the effectiveness be like from 200 seizures a day down to sometimes none. So I think that that’s amazing and pain management is another thing where I’ve seen it incredibly effective.
Matthew: Gosh and...
Harry: But there’s so many. I mean it manages insulin production and helps with diabetes. It helps with glaucoma. It’s a bronchial dilator. It’s like the sky is the limit. This is one of the most amazing and it’s probably the most amazing and wonderful and health providing plant on planet Earth.
Matthew: I haven’t heard about the diabetes approach. Can you tell us a little bit more about that?
Harry: I’ve only read a few articles on it. I’m not that informed but I do know that a lot of the cannabinoids THCVa, THCa help modulate insulin production in the endocannabinoid system.
Matthew: That’s interesting especially with so many people suffering from Type II diabetes.
Harry: Yeah absolutely.
Matthew: Let’s switch over to lighting really quick.
Matthew: What are your thoughts on lighting these days? Are you looking more at LEDs used, LEDs now? What are your general thoughts?
Harry: Well Nico and I did a very; well primarily he did a very large; I helped him out. A very large lighting test that we had done in our CGI facility here in the Bay area and we used a Quantum Light Meter which was like a five thousand dollar light meter. This thing measures PAR which is the most important aspects of lights and PAR is photosynthetic active radiation. That’s actually what the plants take in and what allows the plants to grow. The whole talk of lumens and all of this we see in lumens. That’s how we measure foot candles all of that. Plants don’t see light. They absorb light by radiation. It’s a completely different way of thinking. So what we found is that the dual ended specifically the Gavita lights were the best. They were by far amazing.
I’ve switched out a few rooms and have been using these dual ended Gavita’s myself and yields the structure of the plants are amazing. It’s been an unbelievable development. As far as LEDs go we had tested a bunch of LEDs. The best ones that we had tested were from a company called Truth LED and they were a unit called an M6 and they tested really, really, really, really well. However the LEDs that often test really well are also very high in their output of wattage so the whole idea of saving your wattage by using LEDs is not often comparable because often the units that you do need to use that are the better ones do in fact use a tremendous amount of power because you might need four of those lights to 1,000 and if you’re using four lights that are all 600s then that’s 2400 versus maybe one light that’s a 1,000.
So that’s where I found still that LEDs are not quite there. Maybe as a veg room application or for people that just don’t have a choice. Look the quality is there 100%. I’ve seen some amazing quality buds come out of LED but from a commercial standpoint you just don’t get the yield. So I can’t operate a warehouse where I’m not at 95% or 100% productivity because I’m just losing money.
Matthew: What about soils? We talked about soil a little bit but what’s your favorite or ideal soil for cannabis and has that changed over the years?
Harry: Yes it has, it has absolutely. In the very beginning I was using mostly and again I would use sort of medium as the general term and then even soil is very confusing as a term.
Matthew: Yes it is.
Harry: Because I came here and I’m like yeah I need soil and then Nico was like there’s no soil here and I’m like well what do you mean like dirt. Dirt with humus and all this stuff. I need this dirt. He’s like well no we have sphagnum and peat and it’s all these different terms. So even that became well what actually is soil, planting soil you know what I mean. So in Europe we always used a type of planting soil which was actually a mix sphagnum, peat, dolomite lime, humus all of these things, worm castings, Guano. We would often just make a mix and then just give the plants water.
Harry: Which was very easy.
Harry: However the problem with that is you then have to potentially reuse it or throw it away. It becomes very bulky to get rid of all this dirt or you’ve got to find a spot where you can cook it out in the sun and then mix it up. So it can be a little bit time consuming and bulky. I found that cocoa works very well. It also gives the bud a very good flavor. Truthfully though there is nothing like soil. The soil just gives the bud this rich flavor and this powerful high comparatively to what I would call the more hydro mediums like rockwool or hydrocorals or any type of sort of non holding. Dirt holds in that flavor. Compacts it in and builds it up over time with the plant. The other mediums are so porous that things just fly right through.
Matthew: When you look out three to five years what are you most excited about in terms of cannabis growing technology and cultivation in general?
Harry: Yeah I think the future for cannabis is very interesting because as I go to more and more of these summits and more of these conferences what I start to see is applications from other industries and in this case there is so many advances that have been made in commercial ag over the last 25 years that are only now coming to fruition in cannabis just because it has been largely an underground science for so many years that I think that that is where I’m looking to see how we can take the best of both worlds and to see people that are interested in moving into cannabis from other plant sciences so other ag and I think that as we get more biologists, more chemists, more of the people that want to play with the plant from what I’m doing as far as the breeding projects and working with Steephill who we work with very closely. They’re really helping us with a lot of this stuff. I mean the sky is the limit. It’s amazing what’s coming.
Matthew: Harry let’s switch over to some personal development questions. As you look over the arc of your life is there a book that really stands out as having a big impact on your life that you’d like to share with listeners?
Harry: Yeah it’s funny I saw that question and I thought wow that’s a deep question. What would that book be and it’s funny I read comic books so I was thinking hmm what’s actually my favorite comic book storyline and well I had some deep spiritual experiences and I had this book that was this amazing book that really blew my mind and changed my whole life is it that book? So I thought wow this is a very difficult question but so fundamentally the book that actually completely changed my life is “The Diary of a Yogi” by somebody named Yogananda and if people are into any type of spirituality or want to know about the magical possibilities of life and can suspend a little bit of disbelief I would read that book “The Diary of a Yogi.”
Matthew: I haven’t heard that one. That’s a great suggestion.
Harry: From Yogananda.
Matthew: Is there a tool web based or otherwise you consider indispensible to your day to day productivity that you can share?
Harry: Unfortunately not yet. I use the SmartBee so for me as far as; you’re talking about cannabis productivity?
Matthew: Anything. It could be anything in your life that you consider very helpful. It doesn’t have to be cannabis focused.
Harry: The thing that I find to be the most helpful is that SmartBee actually.
Harry: Because I’ve never had it where I could literally go on my phone right now and look at the last week of my room. I like that. I like to geek out on what’s going on in my rooms. So that I use all the time.
Matthew: Very cool.
Matthew: Harry as we close can you tell listeners how to find you online and in print?
Harry: Sure. You can go to www.hightimes.com and Google Harry Resin and you’ll find Harry’s World which is my weekly column when I have time or bi-monthly column when I have less time and there’s a ton of articles on there already. You can also find me I believe it’s harry_resin on Instagram and you could also check out; I launched four months ago a delivery service here in the Bay area and that is called HERB and we’re www.herb-delivery.com and we are the number one delivery service in San Francisco at the moment.
Matthew: Wow. How is that working out for you? Can you tell us a little bit more about that?
Harry: Yeah. It’s been going amazing. So the menu is curated by myself. A lot of the flowers are in fact from my own warehouses so it’s grown by my team and my master growers and the flowers have been just amazing and yeah it’s a curated menu that I put together and we’re slowly expanding the menu and expanding into new territories and it’s been going amazing.
Matthew: Okay and is that just on the peninsula of San Francisco or is it the whole Bay area?
Harry: For now just the peninsula. We’re going to expand in the next couple months into Oakland.
Matthew: Okay very cool.
Matthew: Well Harry thanks so much for coming on CannaInsider today and educating us. We really appreciate it.
Harry: Thanks for having me it was a real pleasure.
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 guests to you. Learn more at www(dot)cannainsider(dot)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 www(dot)cannainsider(dot)com/trends. Have a suggestion for an awesome guest on CannaInsider? Simply send us an email at feedback(at)cannainsider(dot)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. Lastly the host or guests on CannaInsider may or may not invest in the companies or 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.
Harry Resin has a column in High Times Magazine with a focus on cannabis cultivation topics. Listen in as he shares his ideas how to improve your grow and thoughts on where the industry is heading.
[2:08] – Harry talks about his background
[4:25] – Harry discusses what he does when he is not writing for High Times
[5:31] – Harry talks about the assisted breeder project he’s working on
[7:53] – Harry’s advice on starting a commercial grow
[9:58] – Rookie mistakes when starting a grow
[11:12] – Harry discusses the importance of airflow
[14:14] – How to contain cannabis odor
[14:53] – Harry discusses nutrients
[17:35] – Harry talks about PH levels
[19:49] – What are Smart Bee Controllers
[24:24] – Clones and grow room management
[29:26] – How to minimize pests and disease
[33:36] – Harry talks about how each region differs
[34:47] – What is dabbing
[38:11] – Evolution of concentrates
[40:10] – Harry talks about conditions cannabis treats well
[41:38] – Harry talks about lighting
[44:16] – Harry talks about his favorite soil for growing
[46:19] – Harry discusses upcoming technologies
[47:42] – Harry’s book and web application recommendation
[49:26] – Harry’s contact details
Learn more at:
What are the five trends that will disrupt the cannabis market in the next five years? Find out with your free guide at: https://www.cannainsider.com/trends
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 www(dot)cannainsider(dot)com. That’s www(dot)cannainsider(dot)com. We’ve talked about CBD or cannabidiol on the show many times. Just to review though CBD is a nonpsychoactive compound from the cannabis or hemp plant that has many benefits. Now our friends at Treatibles have put together a wellness chew that can help your dog or cat become more calm and balanced. Valerie wrote in to tell us about her experience with Treatibles.
Valerie writes my ten year old Husky/Shepherd/Lab mix Chuck is my faithful companion. Chuck got significantly quantifiably better from using Treatibles. It took about three days of feeding Chuck two to three doses a day to see the full effect but he did get noticeably more comfortable on the first day of feeding them to him. Before CBD Chuck limped and couldn’t enjoy longer walks though he clearly had the desire for them. Once he started taking them he could leap around again. Thanks for writing in Valerie. Treatable chews are legal and available in all 50 states right now. If you want to learn about what Treatibles can do for your pet visit www(dot)cannainsider(dot)com/pet and get a coupon code for 10% off your order. Once again that URL is www(dot)cannainsider(dot)com/pet Now here’s your program.
Matthew: An entrepreneur has come on the cannabis scene in recent months that developed a technology that will solve a problem cannabis infused product makers have been struggling with for some time. Here to tell us about it is Kelly Ogilvie from DeepCell Industries. Kelly welcome to CannaInsider.
Kelly: Thank you Matt. I’m glad to be here.
Matthew: Kelly give us a sense of geography. Where in the world are you today?
Kelly: We are in sunny Seattle, Washington.
Matthew: Good. It’s rare to hear of the preface sunny in front of that but I’m glad you’re getting some rare sunshine.
Matthew: And I am in Chicago today. Now Kelly give us a little background about yourself. What were you doing before launching DeepCell?
Kelly: Directly prior to DeepCell I served here in Washington state as Governor Jay Hensley’s Senior Policy Advisor for economic development and business interests and what that means is cannabis economic development, technology, life sciences, etc. Those were all in my what we call our policy portfolio and so I saw firsthand the emergence and the growth of this nascent cannabis industry here in Washington.
Matthew: Yeah what’s it like behind the curtain on the other side. I feel like when I look at government it’s like looking at a fish bowl like what is going on here. I hear things coming out of it but I can’t see. What’s it like being on the other side of that curtain and doing economic development for the governor?
Kelly: You bet that’s a good question. It’s an interesting question to answer. Prior to the governor’s office I’m an entrepreneur by nature. DeepCell is the fifth business I’ve founded. I’ve founded a biotech companies, software companies, strategy firms, etc. So going into public life in the governor’s office was a bit of a change for me. Behind the curtain I got to tell you I think the regulators are doing the best they can to balance two interests. On one hand you have this emergent industry where there’s a lot of opportunity but also a lot of risk. On the other hand they’re trying to do the best then can to protect the public interests in an area where there’s a lot of gray areas in terms of what is and is not allowed. Of course the federal prohibition alongside with the state allowances via state laws it’s a very interesting time to be in this industry.
Matthew: And what’s DeepCell?
Kelly: So DeepCell it’s a technology development company. We’re a product development company and licensing firm. So what we do is we develop technologies that we license into the cannabis industry and the reason we’ve done this is because of some of the issues that both cannabis touching and non cannabis touching operators face. So as your listeners will know very well if you handle cannabis you’ll deal with lots of regulatory issues. You deal with baking issues. You deal with the inability to deduct certain types of taxes that normal businesses can and so we constructed DeepCell with a very specific idea in mind and that idea was how do we work with cannabis touching operators, how do we deliver value to our investors and shareholders, how do add value to the industry and do it in a way that is accretive to both cannabis touching companies and non cannabis touching companies like ourselves and so what we do is we develop technologies like our crystal fusion technology which allows us to fuse cannabinoids with crystals such as sugar and salt. We license out that technology and our brands to manufacturers and distributors in Washington State.
Matthew: So why focus on crystallized seasonings or ingredients?
Kelly: Yeah that’s a great question. So in Washington State we’ve seen explosive growth in the cannabis industry. It went from zero and now we just crossed a billion dollars in gross sales maybe two weeks ago here in Washington State. That’s massive growth.
Matthew: That is, that is massive growth.
Kelly: I mean no pun intended right.
Kelly: It’s incredible when you think about there was virtually and literally no infrastructure to really base any expectations on and so I remember sitting in meetings with the governor and the finance folks forecasting taxes and they literally said we’re not going to forecast any taxes and I looked at them and said you guys are crazy. This is going to be huge and they said well can you give us any market comps and the answer is no there was nothing that existed really in terms of a legal market to really forecast taxes in this industry. But getting back to the concept of crystallized ingredients we did it because in this industry in Washington State this explosive cannabis growth is being fueled by three primary segments the flower, concentrates and extracts, and primarily edibles.
And we’re seeing probably the most growth currently in the edible market and in the edible market it’s primarily dominated by edibles such as brownies and cookies. Things that you can make with butter or you can make with oils and we found that there is a huge opportunity in this ingredient space to build platform ingredients and that’s why we focused on sugar and salt because sugar and salt are the two most used ingredients in the world. They are incredibly flexible in terms of the types of recipes and things they can make both sweet and savory and also they perform differently than oils. So for instance oil and water don’t mix so creating beverages require; if you add oil you need something that will emulsify or have that oil blend with the water like soy lecithin.
Sugar and salt don’t have that issue. They dissolve in water. They’re easily dosable. They perform well under heat. They just have very different performance characteristics that we think can help unleash a lot of innovation in the space.
Matthew: That’s really interesting because I over the years have talked to a lot of infused products companies and you do always hear about hey I need to use a fat here like an oil or a butter or an emulsifier to make kind of a homogenous liquid. This kind of removes that constraint if you will. Does it taste? Does the sugar or salt crystal have a cannabis taste to it?
Kelly: It has a very, very light taste and smell. I’d love to say it doesn’t have any taste or smell which some people don’t notice it. I notice it because I’m very sensitive and I’m very critical of the products that we manufacture or license out for manufacture and develop in our labs here. It is a very low flavor profile relative to what’s on the market today if that makes sense. If I were to give you a regular bowl of sugar and then a bowl of the Ruby cannabis infused sugar you’d say oh it tastes like something almost like a nutty something or other. It does not taste like your traditional cannabis plant and that’s because or a cannabis edible excuse me and that’s because we go to great lengths to remove the terpenes and chlorophylls that give cannabis it’s very distinctive flavor and smell.
And so for us we’re trying to create a platform ingredient that allows food to taste like food because once you do that you don’t have to have some of the artificial flavorings or ingredients that are used to mask certain flavors with the bitterness associated with certain cannabis edibles.
Matthew: So you’re licensing this technology. What kind of partners are interested in this type of technology that want to license it from you?
Kelly: We have a licensee here in Washington State called Green Labs. They manufacture a gourmet line of edibles called the Swiss Brand. They make truffles, they make seven layer bars, they make macaroons, they make honey sticks, they make CBD mints. They’ve won some awards for different edible products. So we’re finding that there’s interest from edible manufacturers and licensed processors and I think what they see is an opportunity to manufacture not just products such as brownies or cookies or what have you but they see an opportunity to manufacture an ingredient that they can sell to other manufacturers as well.
Matthew: This is interesting Kelly because in other industries I’m thinking of precious metals we have royalty companies and in oil and energy business we have master limited partnerships and it’s kind of developing this intellectual property or royalty streams and this is kind of a new development for the cannabis industry. You’ve seen it with some edibles companies licensing across state lines but I can’t recall something like what you’re trying to do here in the cannabis industry so it’s pretty interesting. Have you borrowed any ideas from other industries like the pharma industries or anybody else to kind of create this idea or business structure?
Kelly: You bring up really interesting model and that’s the streaming and royalty sort of structure of the precious metals industry. It’s very interesting you mention that because part of the construct of this company originally in conversations with my business partner who originally founded DeepCell in I think March of last year. It was really sort of thinking about what models have been unique and innovative in different industries which solve problems and applying it to this industry because really there is no best practices in cannabis right now and so there is a real opportunity I think to borrow models that have been successful in different places and bring them into this industry to see if they fit and the precious metal streaming concept is something that I have found very interesting for several years. I personally am an investor in several precious metal streaming companies and I love the idea of having leverage and exposure to an industry without some of the same manufacturing risks.
Matthew: Yeah, yeah.
Kelly: And their lie sort of the seeds of what would become the DeepCell model of developing IP and then licensing that IP out to manufacturers who have already invested in the property, plant, and equipment and have the means of production to manufacture these things. So that was sort of the genesis and the idea behind the company and it’s funny you bring that up because that’s exactly how we thought about this.
Matthew: Now do you see this being kind of only manufacturing partners using your crystal and salts and sweeteners like Ruby and Sapphire and Emerald or do you see end users like someone at a dispensary saying hey can I have some infused cannabis sugar to take home? I mean who’s kind of the target market here?
Kelly: Yeah so we’re currently licensing out the Ruby and Sapphire brands and products to our licensee green labs and they manufacture and distribute to dispensaries around or retail shops, adult use recreational shops around Washington State. The product began in medical here in Washington. It’s now transitioned into the adult use recreational space and so packets of sugar are being sold to consumers today and therein lies I think an opportunity as both consumer facing products where you can build brand equity and consumers can recognize the brand but also the plan is to sell and license the sugar to enterprise processors to put the sugar into their edible products. So it’s really an exposure to both consumer facing and business facing enterprises.
Matthew: This has so many interesting applications. I think about how when I talk to baby boomers about cannabis and there’s still a stigma around the smoking. Once it’s lit there’s a stigma around it and I can understand why kind of some general rational biases and things but when I think about like a salt or a bath salt and as the boomers age and they have arthritis and other problems if they can just use a salt that’s already cannabis infused and slip into a bath and feel so much better it’s going to change a lot of perceptions. So as more of these innovative applications come out that are not smoking like we’re talking about here this is going to further accelerate the perception shift.
Kelly: No I totally agree with you. What’s interesting is we’ve had patients in the medical space tell us that they love the sugar but they put it in their coffee and when we asked them what about the edible they like they actually say well it’s because it’s an edible it’s easy to use and we don’t want to smoke because it hurts our lungs.
Kelly: And I never really thought about that until the patient said that but when folks are dealing with medical ailments lung capacity issues depending on their ailment or preserving their lung capacity when they’re getting sort of older in age is very important to them and so it began to sort of shift my thinking around what edibles really are for and I think you’re seeing this interesting blend of medicine and recreational happening here in Washington State. People will use cannabis because they have a headache or their back hurts or they want to have a good time. So that line between is it medicine or is it not medicine is getting blurred as a result of sort of the multifaceted uses and sort of cultural uses around cannabis.
Matthew: So with Ruby and Sapphire your sweeteners and salts from DeepCell are we going to see something like a NutraSweet type like sweetened by DeepCell or sweetened by Ruby or Sapphire on some products in the future you think?
Kelly: Absolutely. That is the business model that we’re going after. We really want to be the intel inside for edibles. I think NutraSweet probably is a really appropriate example in the food space of a brand that is both consumer facing but also is a label ingredient and that for us is really important is having the marks either Ruby or a Sapphire being a marked quality and so for us we don’t have any artificial ingredients or binders to make our product water soluble. It’s literally just certified organic sugar and high grade distillate cannabis extract and I guess one feature I want to mention is we are a technology development house and one thing we’re working on right now is a field called microfluidics and for your listeners who may not be familiar with what microfluidics are if they’ve ever seen the movie “Bug Life” or if you’ve seen the movie “A Bugs Life” there’s a scene in that Pixar movie where a bug goes up to the bar and he says hey give me a drink and the bug tender he doesn’t hand the character a cup he hands him a ball of water.
Kelly: And the character sticks the straw in the water or the ball and sucks the ball with a straw and he hands the straw back and what’s happening there is microfluidics deals with the nature of fluids at very small scales and the physics changes and here’s what’s exciting about Ruby and Sapphire and microfluidics. Because sugar and salt are water soluble they dissolve into a water medium and that allows us now to use droplet by droplet dosing for the future for us. So we’re building platforms for future devices where you can use your mobile phone or you can use some other device to dose specifically for your particular ailment. So if you know what your ratio is in terms of THC to CBD or if you know what type of terpene profile gives you the relief or the experience you want you can now dial that specifically for your wants and that’s a really exciting innovation for us to be working on here at DeepCell.
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Matthew: And so when do you think your licensed technology will go around the country. I mean you’re in the Washington area now. Are you planning on staying just in Washington for a while letting it mature a little bit before going elsewhere?
Kelly: No. So we’re out looking for licensee’s in both Colorado and New York. So we’re been in some discussions with some firms in New York. We have some traction with firms in Colorado. We certainly are eyeing Oregon and then California of course is the big enchilada. That’s the ballot measure coming up in November. They’ll probably go through a rule making process and have a legal market by 2018 and so that for us is a huge deal is focusing on that market.
Matthew: Now just thinking about baking and things I mean are sweeteners used much more than salts because salts are used a lot but it’s probably in smaller dosages.
Kelly: That’s correct.
Kelly: Yeah that’s correct. Yes in terms of volume of actual product for us our Sapphire salt a half a gram is a full 10mg dose. It’s very potent and the reason you want to do that is because salt you don’t want a whole lot of salt in your diet. As a micronutrient you don’t want a teaspoon of salt in your food it would be too salty because it’s very strong. Sugar on the other hand it’s much less of a potent sweetener and a lot of folks don’t know sugar; a teaspoon of sugar isn’t that high calorie, its fifteen calories versus say another edible that might be 300 or 400 calories.
Matthew: Okay. What’s the reaction been from investors?
Kelly: Investors in DeepCell?
Kelly: I would say the reaction how would I characterize their reaction? Very eager, excited they love the concept but I think all of our investors have been told by me and our management team that startups are already risky. One in ten make it in general. We’re in an industry where that risk is magnified by the uncertainty around the politics and the regulatory framework. So I think they all know that they’re in a high risk venture and along with that risk comes high reward I think is what they expect.
Matthew: I would say your risk profile seems less to me because you’re licensing technology that others are actually taking on the risk back to the kind of royalty model. So I like the risk exposure here compared to some other things. I think there’s a lot riskier things out there so; but I guess if you have nothing to compare it to it sounds riskier in the cannabis field and you’re not; people aren’t used to the cannabis field just yet.
Kelly: Right and I guess one sort of friendly amendment to this conversation would be technology we do not generate a royalty from our license agreements. It’s technically a per unit or packet fee.
Kelly: And then it’s very specific because the regulators in Washington and other states I think have deemed it that if you become what you call a part of interest then you derive benefit from the direct business practices of your business partners or a business entity that’s licensed. So for us we had to stay away from a direct percentage license fee and move towards a packet fee that bakes in no pun intended; bakes in a lot of the different types of costs and upside that the product could have in the marketplace. So it isn’t as if we’re selling them a package and the package is two cents. The package comes fully loaded with the expected profit, the expected expenses, all of the above. So it’s more complicated than it sounds.
Matthew: Are you still looking for new investors?
Kelly: We are not looking for new investors currently however we will be launching our next round at some point at the end of 2016 into 2017.
Matthew: Okay. How do you feel about Seattle as kind of a hub for cannabis innovation?
Kelly: I think I mean I’m very bias I live here in Seattle. I really like Seattle because of the type of I think intellectual curiosity, the environmentalism here and I think that environmentalism plays out in these really interesting ways. In one way there isn’t a lot of materialism in Seattle and so you don’t see a lot of people who are doing things just purely for the buck. You see a lot of companies here who are trying to do right by the consumer, who are trying to do right by the environment, and I think that culturally has had an impact on the types of companies that are emerging here. They have an ethos about them. They’re not just profiteering although those people are out there. I think in general having a tech sort of community and emergent industry it’s been influenced by the environmental culture of the Northwest.
Matthew: And this is back to kind of your role working with the governor. Do you feel that the fact that Washington has no state income tax attracts more business?
Kelly: I think it does and I think you’ve seen that play out with large companies being domicile here such as Microsoft and Starbucks and Boeing, Nordstrom, and Costco. I mean there are a lot of; Amazon, big companies are all domiciled here and I think; I know they certainly use it as part of their recruitment tools for bringing talent here. The lack of an income tax certainly has been beneficial but I think being on the other side having worked in government it also can have drawbacks in terms of its a very regressive tax structure and I say that because what ends up happening is without an income tax you have very high sales tax and the people who can least afford to pay that sales tax are poor people and they’re the ones who shoulder most of the burden on a relative basis of income to tax burden.
Matthew: Yeah that’s true although there could be a model where on your state income tax returns if you make under a certain threshold it could be credited. That could be possible. I’m a big fan of the no state income tax especially in the state I’m in right now in Illinois where I’m originally a native of and I see; I look at Texas, I look at Washington, Nevada, Florida and I just see it seems like businesses really want to go to these places because they’re treated better and I’m just hoping that message starts to cascade through the country and through the world that business goes where’s it’s treated best so that would be amazing. I’ll just get off my soapbox there but I just wanted an opportunity to say that. Let’s transition to some personal development questions Kelly.
Matthew: As you look back over the arc or your life is there a book that you think has had a big impact on you and your thinking that you’d like to share with listeners?
Kelly: You know I love the sciences and so my friends think I’m a huge nerd because I read in my personal life at night I’ll go through things like the financials of some company. That stuff kind of gets me going so I’d say in my formative years I read a book by a gentleman named Bertrand Russell and the book was called “The Mind of God” and he’s a mathematician/philosopher and that was really interesting for me to read is thinking about the universe around us. Really taking a scientific approach and sort of waxing poetic around boy were people a science we don’t necessarily believe in mysticism but if we don’t believe in mysticism how the heck did we get here and so that kind of thinking, intellectual curiosity I think took me on a journey of really beginning to explore and love the sciences and I went from that to “Black Holes and Baby Universes” by Stephen Hawking and that took me on a journey of love for science.
Matthew: Gosh those are great recommendations. I saw Mr. Hawking speak once at the University of Chicago and it was mind blowing. He really has; he was talking about a fourth dimension and so forth and it was crazy.
Kelly: Yeah, yep.
Matthew: I don’t know if you saw Elon Musk recently he was on some panel and he was talking about how he thinks perhaps we are living in a virtual reality created by an alien race. Did you see that?
Kelly: I saw just some of the clips and the headlines. I think that’s just silly in my opinion.
Matthew: You know what it’s so funny to me because when you hear him talk about it he obviously has been thinking about this in detail and talking about it with other people so it’s interesting to hear about it and then he thinks that as we discover deeper math principles and physics principles these are the source codes of this reality. So it’s one of those things you really go down a worm hole if you start to think about too much.
Kelly: Yeah. It certainly is possible. A lot of things are possible in this universe. I guess in the multi-verse anything is possible right.
Matthew: One more personal development question. Is there a tool web-based or otherwise that you consider indispensable to your day to day life or productivity?
Kelly: I would say we use two platforms that have been very helpful in terms of organizing our business. One is Trello and the other is Slack. But both are productivity tools for individuals or businesses. We use Trello to communicate with our graphic design firms and some of our packaging developers. It’s a fantastic tool to organize content and Slack has been a fantastic tool to communicate within our teams.
Matthew: Yeah so Trello is that kind of like each idea or task you’re trying to communicate it looks like an open card and you have cards on the table? Is that right?
Kelly: Yeah that’s right.
Matthew: Okay and Slack is more of a Messenger would you say or your communication channels on themes.
Kelly: Yep that’s right. That’s absolutely right.
Matthew: Okay great. Well Kelly thanks so much for coming on CannaInsider today. Before we close do you want to let listeners know how they can find out more about DeepCell?
Kelly: Yes. They can visit our website at www.deepcell.industries. d-e-e-p-c-e-l-l.industries or they can visit www.rubysweets.co to learn about the Ruby product.
Matthew: Yes and you did hear him correctly here. Instead of .com, .org there’s all these new domain extensions so it’s deepcell and instead of .com it’s .industries so that’s cool. We’re getting more minimalist here in the domain names. Kelly thanks so much for being on CannaInsider today we really appreciate it.
Kelly: Thanks Matt.
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Kelly Ogilvie the CEO and CO-Founder of Deep Cell Industries joins Matthew Kind to talk about how his products will revolutionize the cannabis industry. Until this point cannabis infused products companies needed a fat soluble way (oil, butter, etc) to get THC into infused products. With Deep Cell’s pre-infused sweeteners and salt that is no longer a requirement. This will open the door to a myriad of new products.
[2:11] – Kelly talks about his background
[3:42] – What is DeepCell
[7:34] – What does the sugar or salt crystal taste like
[8:43] – Kelly talks about their licensing partners
[11:40] – DeepCell’s target market
[14:28] – Future DeepCell products
[17:29] – Kelly talks about expanding to other states
[18:55] – Reaction in DeepCell from investors
[21:10] – Seattle as a hub for cannabis innovation
[24:09] – Kelly’s book and internet app recommendations
[27:29] – DeepCell’s contact information
Learn more at:
What are the five trends that will disrupt the cannabis market in the next five years?Find out with your free guide at: https://www.cannainsider.com/trends
Hi I’m Matthew Kind. Every Monday look for a fresh new episode where I will take you behind the scenes and interview the insiders that are shaping the rapidly evolving cannabis industry. Learn more at www(dot)cannainsider(dot)com. That’s www(dot)cannainsider(dot)com. We’ve talked about CBD or cannabidiol on this show many times. Just to review, CBD is a non-psychoactive compound from the cannabis or hemp plant that has many benefits. Now our friends at Treatibles have put together a wellness CBD chew that can help your dog or cat become more calm and balanced. Valerie wrote in to tell us about her experience.
Valerie writes, “My ten year old Husky/Sheppard/Lab mix Chuck is my faithful companion. Chuck got significantly quantifiably better from using Treatibles. It took about three days of feeding Chuck two to three doses a day to see the full effect, but he did get noticeably more comfortable on the first day of feeding that to him. Before CBD Chuck limped and couldn’t enjoy longer walks though he clearly had the desire for them. Once he started taking them he could leap around again.” Thanks for writing in Valerie. Treatable Chews are legal and available in all 50 states right now. If you want to learn about what Treatibles can do for your pet, visit www(dot)cannainsider(dot)com/pet and get a coupon code for 10% off your order. Once again that url is www(dot)cannainsider(dot)com/pet now here’s your program.
Matthew: The cadence of important news stories is heating up as we approach the November elections. Here to help us look at the most impactful news stories affecting the cannabis industry is Chris Walsh, editor of Marijuana Business Daily. In addition to their informative daily news stories, Marijuana Business Daily also hosts the most popular industry conference that I attend regularly. Chris, welcome to CannaInsider.
Chris: Thanks for having me on. I appreciate it.
Matthew: Chris give us a sense of geography. Where are you in the world today?
Chris: I’m based in Denver. I was actually born and raised here and have witnessed the evolution of the epicenter of the marijuana industry right now which is in Colorado.
Matthew: Yes, wow, you’re a rare native. You’re like Snuffleupagus or some mystical creature like a unicorn.
Chris: Exactly. It’s changing quickly as more people move here in part for jobs in the marijuana industry but yeah not a lot of natives.
Matthew: Chris I want to dive into everything that Marijuana Business Daily is doing, but before we do can you give us a little more background on yourself and your career before getting involved with Marijuana Business Daily?
Chris: Sure yeah I’m a longtime business journalist. I’ve worked at metropolitan mainstream newspapers and even was in South Korea for two years as a business editor for a newspaper out there. So I’m a business journalist. I have an MBA so a lot of people are surprised at my background and some of the other executives because I guess the perception outside the industry of course as we’ve all experience is that it’s a bunch of people in tie-dye and sandals walking around. So no that’s my background. I actually moved to South Korea in 2009 and there were no dispensaries open in Colorado when I left, and when I came back two years later there were more dispensaries in Denver than Starbucks so that’s how quickly the industry grew here.
Matthew: And for listeners that may not be familiar with Marijuana Business Daily, what are all the information and services and conferences you off just to get a broad perspective?
Chris: Yeah we actually started in 2011 which is an eternity in this industry. Five years is a very long time ago. We basically provide news and analysis on our website www.marijuanabusinessdaily.com and then we have Trade Publication, Marijuana Business Magazine that’s print publication. And then we do market research reports, our Marijuana Business Fact Book where we make estimates about the industry and cover things like profitability and revenue metrics for businesses in this industry. Then we’re just as well known for our business to business conferences, the Marijuana Business Conference and Expo. We have our big Vegas show coming up in November where we’re going to have 7,000-8,000 professionals gathered there to learn an network and discuss some of the hottest topics in the industry. So that’s kind of our reach. We provide basically information in various ways to business people.
Matthew: Yeah you know it seems an interesting phenomena is occurring there. There is more and more cannabis conferences popping but people want to kind of net it out I notice, and when I talk to people they’re saying they’re going to yours and maybe an ArcView event or one other, but they’ve kind of said as more grow, they’re limiting to the most important. So that’s great for you, but an interesting phenomenon nonetheless.
Chris: Yeah and we’ve kind of seen this firsthand. We were doing business to business conferences in this industry starting in 2012. So we were the first really to do this. Back then there were medical marijuana conferences, but it would have Cypress Hill has the entertainment and it all the vendors were basically paraphernalia companies, and it was more like a festival or a cultural event and there was very little business focus or education. So again we were the first ones to kind of do the suits and ties type of conferences and since then, as you mentioned, it’s really exploded I think. It went from just us a couple years ago and I think last year there were 40-ish “business to business” conferences out there. So yeah there’s a lot of them, and I think you’ll see some weeding out as people pick and choose what they prefer.
Matthew: As the editor, as you watch news stories kind of come in, create a stir and fade away, are there any topics that seem to be persistently important?
Chris: Well I think basically the biggest one and the most obvious one would be the federal government’s position on marijuana and just last night and into this morning we’ve been scrambling to cover the news of the day which was the DEA basically saying it won’t reschedule cannabis, but it will open the door to research. So there’s always questions about when is the federal government going to take some concrete steps on marijuana, approve the bills that will open the doors to banking and lower the tax burden on the industry which is significant, and of course legalize it or reschedule marijuana nationally. So that’s always the kind of overriding big question that people are talking about.
I would say secondarily it’s kind of the local or state regulations. Everyone, they’re always changing and shifting and everyone in the business is trying to get their head around these changes on the regulatory front because it really affects them on a day to day basis. So that’s the other big topic. Banking of course, everyone wants to know how to get a bank account, which banks are working with the industry. And then as I mentioned, this tax burden where obviously businesses can’t take the same types of deductions that a normal business so it really hurts profit margins and people really want to know how they can work around that. So those are kind of some of the common things that we hear about a lot.
Matthew: Yeah and speaking of Korea, I feel like the United States is starting to look more like North Korea when you compare us to Canada. They seem to be doing everything right in terms of banking and federally legal and we’re kind of moving backwards at times. Well it’s more like pushing over a Coke machine. We go back and forth and we kind of make the right decision, but that’s kind of a big blow, a big punch in the stomach that the DEA says that. It’s frustrating a little bit, but what are we going to do?
Chris: Yeah it is, it is, I like that analogy. It is like a punch to the stomach. It’s like when are you going to finally realize, when are federal officials going to realize that this is a real industry. This has medical uses. I mean talk to the million plus patients in states that have legalized medical marijuana who use this for cancer and HIV and glaucoma and PTSD. So it’s really ridiculous and to your point, yes, the government’s policies are pretty antiquated on medical marijuana specifically. And other countries are moving ahead and kind of pioneering this area when it really should be the US doing it.
Matthew: How have you seen the scope or tone or perspective change over the years since you started covering the industry. I mean now it seems more mainstream. There’s more people coming in from different business industries coming into the cannabis industry. How has your lens changed when you look at the industry now?
Chris: It’s changed significantly. I mean when we first started I would go to meet people in the industry and they would think that I was a narc, an FBI agent and they were really cagey and with good reason at that time because they were basically pioneering a whole new industry that’s product is federally illegal so I don’t blame them for that paranoia, but no one wanted to talk on the record or publically or very few did. They were skeptical of anyone they didn’t know and most of the pioneers of the industry, the people at that time were people who had a strong affinity for cannabis and its uses either medically or recreationally and a lot of them, certainly not all, but a lot of them didn’t have kind of the professional business backgrounds of running companies or starting companies or executive level positions. A lot of people had been growing in their basements for a long time and buying and selling on the black market.
So what we see now is, and there’s kind of a clash, you have the more savvy business people coming in that may or may not really care about marijuana itself. They may not have that passion for the plant but they see it as a business opportunity. I don’t think there’s anything wrong with that if it’s kept in check. So now you do have these mainstream people coming in. You have executives and entrepreneurs who have founded many other companies in mainstream industries. You have former DEA officials getting involved. You have former politicians. I mean the list goes on and on and it’s really accelerating as this becomes more mainstream. I will say, however, if you’re in a state that has not legalized medical or recreational marijuana, there is still that kind of heavy stigma I’ve found and people still scratch their heads. Don’t really even consider this a serious industry. Then you find that once a state legalizes everyone seems to get it. So there is still that stigma out there that is hard to overcome.
Matthew: Yeah I’m driving around the country right now and I have Colorado plates on my car and people stop me and actually say hey pot’s legal there now right. Like they kind of whisper that to me. I’m like okay, is that the ice breaker now. Okay.
Chris: Yeah and I mean doing this for five and a half years I’ve heard many similar comments directed at me. I mean most people are fascinated by it or interested in it or support it. I have found very very few people, even in states that haven’t legalized, that are aggressive or anti-marijuana and they want to wag their finger at me or anything. I mean it’s amazing how many people are just like yeah it should be legal at least medically. So that’s the other part of it that’s changed. When I started in 2011, came from a professional background. I covered high tech. I covered airlines for newspapers and at that time when I took this position a lot of people, my former colleagues were kind of scratching their heads and saying what is this guy doing. Is he a closet pot head working for a marijuana publication, but now they’re kind of calling and asking if we’re hiring. So things have changed.
Matthew: Right. So as the November elections approach, which stories do you see as the biggest news?
Chris: It’s going to be a fascinating November for the industry. I mean this could be a big watershed moment that marijuana supporters and business people have been waiting for. You could have almost a dozen states basically voting on whether to legalize medical or recreational marijuana. Just today I think North Dakota approved the signatures there so they will be voting on medical marijuana. You have about a half a dozen other states that will be voting and then you have even more states that have gathered the signatures and submitted them and are waiting to hear back to see if it qualifies. So this could be a huge, huge event for the industry.
There’s a lot of potentially huge markets that could legalize. California will be voting on whether to legalize recreational marijuana. That in itself would be massive for the industry. And according to our projections if California legalizes recreational marijuana, its sales just in that state of marijuana would be higher than the entire industry’s sales right now of medical and recreational. They have a massive population. It’s a big tourist hub and if it’s legal there, it’s really going to push this industry and fuel it forward. And then you have other states. Massachusetts will be voting on recreational and of course Nevada which if they legalize recreational it would be huge as well given its tourism draw. And then on the medical side you have Florida as the big market there. So basically in a nutshell this has the potential to lead to billions of dollars of revenues for the industry and tens of thousands of jobs and tens of thousands of business opportunities. I can’t overstate the importance of this.
Matthew: Yeah California is kind of the big bang. They have the technology, the capital, the people and the culture that’s ready to adopt it immediately.
Matthew: Which the other states don’t seem to have quite to the same extent.
Chris: Yeah and a lot of people in the industry are saying California is really the linchpin that if it fails there it is going to set the industry back by years and be a real travesty and a blow to the industry. That if it passes though it will have the opposite effect obviously and propel everything forward. I don’t personally necessarily think that failure there would set the industry back a decade. I think it would be very unfortunate. It could slow some of the momentum, but the industry is operating just fine now without California having legalized recreational . Yes it would be a big disappointment and there would be an impact, however, I don’t think it’s as great as some people say.
Matthew: What about California’s framework of regulation. It’s in typical California fashion. They’ve rolled out some huge Quagmire of regulation in different categories of people that can operate within the industry. Does that act as kind of a wet blanket at all or is it just such a huge, powerful industry that nothing can hold it back?
Chris: Well I mean California has been just such a mess in the marijuana arena. It clearly was the capital of medical marijuana for years and was the pioneering state that really helped the industry get to where it is today, but they didn’t regulate the industry from a statewide basis so it kind of fell behind Colorado and Washington because it’s a mess. I mean every city has its own rules. Some don’t have any rules. There’s a ton of businesses operating outside of regulatory frameworks on a local level that have been established and basically it hasn’t really pioneered any of the legit side of the industry anymore because of this chaos. So the regulatory framework being developed for medical marijuana is a huge development that is positive, but it’s going to lead to a lot of turmoil because a lot of businesses that exist now are not going to be able to make the transition to a regulated market.
In the long run this is very good and in the short term it’s going to be chaotic. You got to feel for a lot of the businesspeople there who again pioneered the industry that might not be able to make over to the regulated market, but then if they legalize recreational it’s just a huge question mark of what’s that going to mean for medical and how this is all going to develop.
Matthew: What are the most controversial topics in the cannabis industry right now? I mean when you put out stories on certain topic do you find you get kind of a polarized response on certain topics from people?
Chris: Yeah I mean there’s a couple of areas. There’s issues particularly on the regulatory side with edibles and infused products. What is the appropriate level or regulations that states should be imposing and you find that responses are all over the board. There’s still a lot of people who don’t think there should be many regulations on infused products at all and they get very angry when states and cities try to regulate that. And then you have people who think there should be very strict regulations like you have on anything else you consume, especially on the food side. So that’s a big issues. The testing conundrum is a big issue too.
There’s no federal oversight, there’s no industry-wide standards on testing. So businesses are forced to test marijuana and infused products but they don’t trust the results. Every lab gets back to you with different numbers on potency and all that. So testing is still controversial. Then you have other kind of HR issues like should your employees who are also patients be able to use medical marijuana while working. That’s still a polarizing issue within the industry. I mean the industry is here to help people like that and they obviously employ patients. So you kind of have this industry still working through some issues. And then of course with the election coming up we ran a survey of our readers to find out how they would vote in the presidential election, and that got dozens of comments when we wrote that story where most of the industry favored Hillary Clinton, but there was a quarter that favored Donald Trump. So you have all these people weighing in on who would be better for the industry and who would create a more favorable climate. That’s the big topic right now.
Matthew: Gosh and I think like a Gary Johnson would be the best for the industry but he can’t even seem to get into the polls so people don’t even know who he is.
Chris: Yeah and he was an option in our survey and he polled well. I think it was roughly 15% or so said they would vote for him, but I think there’s a lot of people that on the marijuana issue he’s clearly the favorite, but people are taking into consideration other factors beyond just marijuana even if they support it. So people in the industry, I think the realists say okay it’s going to come down to these two candidates, Trump and Clinton, and so I’m going to cast my vote for one of them rather than “waste” it on Johnson whether you believe that’s a wasted vote or not. He’s probably not going to win.
Matthew: Right. Well let’s pivot to the conference, your twice a year conference. I was there in Orlando in May and now you have another coming up in October in Vegas, but I’m sure a lot of listeners have been to the conference but for listeners that have not, describe what they experience when they walk onto the conference floor and what they learn when they go to the panels and so forth.
Chris: Yeah and actually our next one in Vegas is in November.
Matthew: November, sorry about that.
Chris: Yeah it’s actually a week after the election so there is going to be a massive amount of buzz at the show. Everyone is going to be talking about whatever happened on election day and we’re going to analyze that and talk about how that may impact businesses. So that will be the big focus obviously of some of the conference. I mean in general the reason we even started this in 2012 is because either people that want to get involved or that already are involved in running businesses they need to gather and they need to network with each other and talk about their common problems and try and come up with solutions. So networking is actually a big part.
Then we have a massive expo hall in our Vegas show coming up with 300 exhibiters. So there’s commerce that happens at this too. People are hooking up with partners and services and products to help their businesses grow. And then of course there’s the content side too where we have three days of sessions that explore all the big business issues that entrepreneurs and executives are facing. And then we have people like Penn Jillette is our keynote. He’s a hardcore libertarian who believes in states’ rights so he’s going to talk about how he views marijuana and he’s a fascinating guy with a lot of wisdom and insight. I’ll be talking about the industry fundamentals and some of our projections and giving an update on kind of the state of the industry. Then we have sessions on everything from banking and taxes, as we talked about before, to overarching issues about what coming down the bend, around the bend regulatory-wise. So it’s a great place to network and learn about issues in the industry and hopefully learn things that you can take back to your business to improve it.
Matthew: Penn Jillette, that’s a fascinating character. He has a real ability. I don’t know if it’s because of his magician training or experience, but he has a way of phrasing things that can kind of crack people out of their typical mode of thinking and their perception. It’s pretty interesting.
Chris: Yeah and he won’t hold back on his views, and I’m sure people are going to be thrilled to hear him. He will probably rail against the government’s policies on marijuana and drugs in general. Yeah he’s pretty outspoken and I think it’s going to be entertaining.
Matthew: Looking back at previous panels are there any that kind of jump out at you as being really valuable or you got feedback from attendees that said hey I learned a lot here?
Chris: Yeah I program the conference so I believe that all of them are valuable, but to your point. We’ve had one in the past where we talk about if and when Big Tobacco, Big Agriculture, Big Pharma basically big business is going to come into this industry and those are always very packed sessions. People are afraid. This has been a mom and pop industry and that’s how it started and in large part that’s how it still is today, but it’s moving away from that and it’s moving towards big business and corporatization. So people really want to look forward and say what is this industry going to look like in the future if legalization occurs or if the government kind of relaxes its rules on marijuana. We’ve done that kind of a session twice and it’s always immensely popular.
Matthew: In terms of getting a booth, I know you have a lot of exhibitors that they get the booth every year. They already book it right away. Is there openings still to rent a book and how should people thinking about it if they’re on the fence or considering renting a booth. Is it too late?
Chris: Well on the booth side it’s too late. We have several dozen companies on the waiting list. We sold out months ago. Again we’ll have 300 booths. We sold out our entire space at the Rio in Vegas. Next year we’re moving to the convention center so my advice would be start planning for our event in the Spring in D.C. or Vegas next year because we do sell out. Always we sell out our booths and we’re going to continue to grow as the industry grows, but again we sold out a couple months ago. There are other opportunities to get your name out there.
We have other sponsorship and exhibiting opportunities that aren’t necessarily booths. So contacting our sales department is a good way to see what’s out there, but yeah I would start planning for next year. And I would say to your point earlier there are a ton of conferences out there and do your due diligence before you go. Even before you go to ours, I mean, it’s very well respected and we get industry leaders and have cutting edge content. There’s other ones that are good too but there’s a lot of duds out there. And that’s why we’re seeing some consolidation because people in the industry are going to some of these and realizing how poorly planned and produced they are. So most people are going to just a handful of these, but like I said we’re going to have 7,00 to 8,000 professionals there. If legalization goes really well, we could have 10,000. Who knows.
Matthew: Okay. Now let’s turn to the fact book. Can you tell us what that is and what listeners might find in there?
Chris: Yeah we started doing this a couple years ago because we just realized there was a huge need for information and data in this industry and it really didn’t exist. I mean you have no federal data because it’s illegal and they don’t track anything with the industry and then most states, especially a couple years ago, didn’t really track anything either. So it was really hard to get your arms around the size of the industry and all the fundamentals. As I mentioned earlier, average profits, average revenues, startup costs, all these things that are available for other industries weren’t for this one.
So we started doing this massive research report every year, and we break down state markets and talk about where we think sales are, a number of businesses operating and kind of compile all of that into a national picture too. We do estimates on retail sales nationwide through 2020 and there’s just a ton of data in here, again, that doesn’t exist really anywhere else. So that’s why we started to do it. You are seeing more companies, data companies get involved in this industry which is a good thing and states are now tracking the industry much closer so there’s more data than ever before available. Things like how many companies are there in the industry and how many jobs are there and what are annual sales, that type of data is very hard to get and that’s kind of what we focus on.
Matthew: You’re seeing cannabis stories so there’s probably not too much that surprises you, but when you glance over that book was there anything that jumped out and slapped you like wow this is much more than I originally had thought?
Chris: Well it always happens. When we do it every year there’s always surprises and especially when we dig into, we do big surveys of professionals in the industry to get an idea of their fundamentals for their business and there’s always interesting things that we see there in terms of concentrates and infused products becoming a much much bigger part of the industry and moving in the direction of one day you’re SERP-ing sales of flower, of marijuana flower. So there’s always things like that that give us insight. I’d say the profitability levels of businesses in this industry was one of the things that stood out to us that a lot of businesses are profitable.
Now 2ADE in this tax issue hurts that to some degree and shrinks the profit margins, but in general a lot of businesses have been able to historically reach profitability very quickly. Often in a matter of months. You’re seeing that change a bit now though because of the huge regulatory burdens, the caps on licenses where you have to spend a million to even get involved and there’s only a few licenses awarded. So it is taking a bit long to reach profitability in some markets, but in general it’s much better than they business community at large. So always things like that that we see each year.
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Matthew: Circling back to the conference for a second, is there any strategy you would advise for someone attending for the first time in terms of getting the most out of it, attending the right panels, meeting people, strategy on the floor because sometimes, Vegas is a big place, you have a huge conference. How do you prioritize to ensure you have an optimal experience?
Chris: Yeah that’s a good question. I mean we always look at that and reassess it and figure out how can we meet everyone’s needs. We do have our crash course which is kind of a one day, one-on-one level overview of the industry, everything you need to know if you want to get involved in the business and need kind of the bigger picture of the challenges you’re going to face and the opportunities. That’s separately ticketed from the main show but that always sells out. We’ve gotten 900-1,000 people in that in the past. So that’s truly for newbies who just want to know about the industry and how it works. So that kind of hits that segment.
Then the rest of our conference is aimed at people already in the industry. The newbies benefit immensely by being there and learning at that level, but we really want to target the business operators that are in it now and want to talk about and learn about the issues they face and how to improve their businesses. So you know we offer a variety of different formats and that’s another thing where we’re unique. We have the big keynote with Penn Jillette speaking from a broad perspective, an outsider’s views on legalization of marijuana, but then we have workshops on extraction and we’re going to have one on finding a bank account. Then you have the bigger panels and discussions that are also drilling into key areas of the different niches in the business, in the industry and what they face. So we try to offer something for everyone. So I guess the strategy would be to really examine the agenda and the separate events and see where you’re at in the industry and where you think you would benefit most, but I would have to say the networking aspect is huge and a lot of people go just for that. Whether it’s on the exhibit hall floor or in our networking events or the dozens of after parties that are going to be held in association with out event kind of on the side by other groups. So a lot of people come back and say just the pure networking was the biggest benefit.
Matthew: One panel I really enjoyed, it was a panel, one speaker I really enjoyed in Orlando was the gentleman that spoke about demographics and looking at demographics for your marketing the different generations, GenX, Baby Boomers and Millennials because there really is a huge difference in how we perceive things and we all like to think we’re unique snowflakes but a lot of it has to do with the generation we come up in and there’s so much similarity there and I was shocked to see just how much there is and just how you can craft your marketing or brand to different generations to get a desired outcome. So I thought that was pretty cool.
Chris: Right, and that’s another thing we try to do at these is bring in outside experts in the business community in general that can apply their knowledge and expertise to this industry specifically that a lot of business owners overlook. So the average infused products company or retail store/dispensary is probably not thinking when they’re marking along the lines of generations, but you can see how that would be so useful. You have the older patients, you have the younger ones, the Baby Boomers and things resonate differently with each of them so you can craft your marketing message to them differently. So that’s another thing. We’ve had a former executive from Starbucks talking about how you create kind of chain stores and a brand and a consistent experience. So that’s the other thing we try and do at these shows is bring in people like Chuck Underwood, the gentleman you were just referring to.
Matthew: Yes, yes. Let’s pivot to a couple of personal development questions Chris. I like to give listeners a sense of who you are and maybe some things that have been important to you in your past. Looking back over the course of your life, is there a book that stands out that has had a big impact on you and your way of thinking that you would like to share?
Chris: I don’t think there’s been a specific book. I mean I’m a heavy reader, but I don’t think I’ve read kind of a life changing book that shaped my views on the world. It’s more just getting out there and experiencing things. I’ve read a lot of business books that I found were beneficial, but beyond that I’m basically a big Earnest Hemingway fan and he kind of got me into reading in general. Yeah I guess in general a lot of the books I’ve read kind of have taught me empathy in general and I try to apply that in my personal and professional life.
Matthew: Great points. I’ve read so many books in my life but I still have a good memory of The Sun Also Rises, For Whom the Bell Tolls and the Old Man and the Sea, those books are just so incredible. Even now you just pick them up, they’re just amazing.
Chris: They’re still good yeah. They still resonate. Yeah so he really got me into reading in general. I owe that to him because it opened up a lot of doors in my life and in my mind.
Matthew: Is there a tool, web-based or otherwise that you consider indispensible to your productivity that you would recommend?
Chris: I think no I’m actually pretty simple. I mean it’s Outlook and my smartphone and all that kind of stuff. I mean we have internal tools that we use like SalesForce that have been immensely helpful on the editorial side for keeping track of our massive source list, but other than that it’s just a lot of the basic everyday things that people use.
Matthew: Okay as an editor give us one grammar mistake you see over and over again that we could fix, everybody could fix to be a little bit better writer.
Chris: I think when writers refer to companies in the plural, like a company in the plural. If it say their, referring to it as a group. That works if you’re talking about executives of the company but a business or a company is an it. So I see that all the time in writing and in other media as well and sometimes among our own reporters. But I think that kind of has been adopted because of casual conversations when you’re saying they, when you’re referring to one company. So I see that a lot in professional writing and that’s one of my pet peeves.
Matthew: Good one, good one. I’m sure I’ve been guilty of that one.
Chris: A lot of people are. And I would say the other one is kind of the which vs. that issue. A lot of people use which when they should use that and that when they should use which.
Matthew: Good, good ones. Well Chris in closing let us know how listeners can find Marijuana Business Daily and get daily alerts on all the best news stories, how they can find the fact book and how they can learn more about the conference.
Chris: Yeah www.mjbizdaily.com is kind of the portal into everything we do and that’s our daily news and analysis site, and then from there there’s links to our conferences, our fact book, contact information and kind of everything we do. So we do have a daily newsletter that goes out Monday to Friday with our kind of exclusively on our site stories that our reporters research and write. We have professional reporters who have been trained in journalism, have been working at newspapers and magazines and for online outlets, their careers. We’re professionals bringing professional news and analysis and that’s kind of what makes us different. A lot of people are kind of aggregating content or just having people in the industry write guest columns. We have people putting together fresh, unique stories every day that affect business owners and really taking that business slant. So we have this newsletter you can sign up for. It’s free. It goes out every day. If you’re a professional in the industry, you can get out magazine, Marijuana Business Magazine, you can get a free subscription to that. We don’t charge for that for people in the industry.
Matthew: Great. Well Chris, thanks so much for coming on the show today. I look forward to seeing you in Vegas.
Chris: Terrific, thanks for having me on. I appreciate it.
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 guests to you. Learn more at www(dot)cannainsider(dot)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 www(dot)cannainsider(dot)com/trends. Have a suggestion for an awesome guest on www(dot)cannainsider(dot)com, simply send us an email at feedback(at)cannainsider(dot)com. We would love to hear from you.
Please do not take any information from CannaInsider or its guests as medical advice. Contact your license physician before taking cannabis or using it for medical treatments. Lastly the host or guests on CannaInsider may or may not invest in the companies or 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.
Chris Walsh is the Editor of Marijuana Business Daily. Chris discusses the top trending stories in the cannabis business ecosystem and how they will affect events in the near future. Listen to this podcast on your Smartphone for free.
[2:37] – Chris’s background
[3:37] – What is Marijuana Business Daily
[6:10] – Marijuana topics in the news industry that are persistently important
[9:08] – Chris’s perspective on the change in the industry over the years
[12:03] – The biggest news as the November election approaches
[15:47] – The strength of California’s marijuana industry
[17:18] – Most controversial topics in the cannabis world
[20:21] – Chris talks about the Marijuana Business Conference experienc
[23:13] – Chris talks about previous panels that have gotten great feedback
[25:54] – What is in the Fact Book
[29:55] – How to get the most out of the Marijuana Business Conference
[33:59] – Chris’s personal development
[36:57] – Contact details
What are the 5 Trends that Will Disrupt The Cannabis Industry in the Next 5 Years?Find out with your free report at: https://www.cannainsider.com/trends
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Hi. I’m Matthew Kind. Every Monday look for a fresh new episode where I will take you behind the scenes and interview the insiders that are shaping the rapidly evolving cannabis industry. Learn more at www(dot)cannainsider(dot)com. That’s www(dot)cannainsider(dot)com. We’ve talked about CBD or cannabidiol on the show many times. Just to review thought, CBD is a non-psychoactive compound from the cannabis or hemp plant that has many benefits. Now our friends at Treatibles have put together a one list chew that can help your dog or cat become more calm and balanced. Valerie wrote in to tell us about her experience with Treatibles.
Valerie writes, “My ten year old Husky/Sheppard/Lab mix Chuck is my faithful companion. Chuck got significantly quantifiably better from using Treatibles. It took about three days of feeding Chuck two to three doses a day to see the full effect, but he did get noticeably more comfortable on the first day of feeding that to him. Before CBD Chuck limped and couldn’t enjoy longer walks though he clearly had the desire for them. Once he started taking them he could leap around again.” Thanks for writing in Valerie. Treatable Chews are legal and available in all 50 states right now. If you want to learn about what Treatibles can do for your pet, visit www(dot)cannainsider(dot)com/pet and get a coupon code for 10% off your order. Once again that url is www(dot)cannainsider(dot)com/pet now here’s your program.
Matthew: Recently Florida has overtaken New York to become the third most populous state in the U.S. with 20 million people. With this kind of population in sway Florida’s decision to legalize cannabis can greatly help or hinder a broader legalization movement. Here to help us understand the opportunities and challenges in Florida is John Morgan. John has been a vanguard leading the legalization effort both in terms of activism and his generous financial donations. John, welcome to CannaInsider.
John: It’s good to be here.
Matthew: John give us a sense of geography. Where in the world are you today?
John: Today I’m in Ponce Inlet, Florida. It’s a beautiful beach. I’m in my beach house. It’s blue skies and breaking waves and a cigar and a glass of ice tea.
Matthew: Nice, nice. John what’s your background? How did you get involved in this effort in such a big way?
John: I got involved because a fellow political guy came to me a few years ago and asked me what I thought about the legalization of medical marijuana. I told him that my brother who was quadriplegic couldn’t function without it. He uses it illegally in Florida. He’s a C-6, C-7 quad. If he took the medicines that they want him to take for his pain and spasms, he would be… He was up to seven Xanax a day, and I took a half a Xanax once and it was like, you know, I was knocked out for 12 hours. And so I said it’s important. I mean there’s people like my brother. My father had cancer and he used it when he had his cancer treatments and I said it’s nothing short of miraculous. So he kind of started walking me through it, showing some polling and he said would you be interested in helping us. And I said yeah I would because in Florida 400,000 who have things like epilepsy and post traumatic stress disorder and cancer, quadriplegic, just keep going through the whole list of illnesses and injury. I said 400,000 really sick people would benefit, and I’m also a trial lawyer and I spend a lot of my time and my efforts fighting the pharmaceutical industry. I know the evil that comes from that industry.
I know the deaths that come from opioids. I know the people that are killed a year, 13,000, hundreds of thousands hooks, millions of family members affected. And then you look at marijuana and you say this is a plant that was put into nature for us by God or nature, depending on how you look at it, and it works. And so there it began.
Matthew: And then what’s United for Care?
John: United for Care is the organization that we formed to get our constitutional admend led. The Florida legislature is very conservative in the hid pocket of the pharmaceutical industry and there was no hope there. So United for Care was set up as our organization to get the language approved by the Florida Supreme Court to then collect signatures. We needed tens of thousands of signatures and then to go on the ballot and we needed, the first time around, we needed to have 60% of the voters which as you know is a landslide. And so United for Care, if anybody wants to learn more about it, they can go to www.untiedforcare.org if you want to help or learn, and that is our vehicle for our constitutional amendment.
Matthew: Okay. And you’ve put a lot of financial resources into United for Care. Do you mind disclosing how much you’ve put in to give a sense of scope for us?
John: I think about $8 million now. I mean the first time around I made every mistake known to man. I mean I’m out there. I’m not a constitutional lawyer. I’m not a political operative and so if there was a mistake made the first go around, I made it, and I spent a lot of money that I didn’t have to spend the second time around. We lost the first time by like a point, 58.5%, but what kind of drove me is the more I was out there the more people were calling me, thanking me and begging me, and telling me their stories and coming up to me in the street and grocery stores and everywhere and it was like my God this movement is gigantic. There’s an underbelly of people who are desperate for this.
So because of that I felt like I do try to give a lot of my money away that I make because for a lot of reasons I think we should. And to me this is an important philanthropy as a food bank. I mean I financed a big food bank called the Morgan/Morgan Hunger Relief Center and Second Harvest Food Bank and to me this was kind of on par with that kind of philanthropy because so many people were going to benefit day one and then day two and three and four it just becomes geometric.
Matthew: How big of a part do you think Sheldon Adelson, the Las Vegas casino magnet, laid into feeding the legalization effort in 2014?
John: I think a lot because we weren’t, again back to my mistakes, I don’t think I do a good job of responding to it. We kind of rag tagged there at the end. He brought some money and his ads were totally misleading. We hadn’t really thought out the strategy for that. I mean they had all these different, you know, there’s these drug dealers taking care of sick people and the drug dealers want to get the drugs. I mean ridiculous stuff. Drug dealers don’t buy medical marijuana and pack it together and sell it. They go out with a cigarette boat and get it by the bails out here off my beach, but it was effective. They were scaring people. Our children are going to get marijuana, our children. I mean it’s like what, to me it’s like you got more shit inside your medicine cabinet Sheldon that could kill everybody. Marijuana is not going to kill anybody, but those fear tactics were very effective, especially to people when you get to 60 years and older.
Every year up the ladder is where the votes really fall off for us because older people, and unfortunately I hate to report that I’m now 60 so I’m one of them, the older you get we found the more scared and uninformed they were and we started losing that vote. I mean you go to 60 to 65 to 70 to 75 and it was an off year election and those people vote. I mean that’s an even, that’s something to do. Haircut tomorrow and vote today.
Matthew: So is that a big part of the strategy this time around? Just kind of mitigate the fear of the senior citizens?
John: I think yeah to educate them, to say listen guys you all make up 13% of the population but you make up 40% of healthcare and the pharmaceutical needs. You, me, I’m with you. We’re the ones that are going to be stricken with these illnesses and to try to educate them that look this is a lot safer than oxy. This is a lot safer than Percocet. I mean all you got to do is look at a picture of Prince in his elevator shaft. I mean that’s what did him in. And so to kind of tell that story, and then I think the other strategy is look last time was an off year election. We had two people, unpopular running for governor, nobody cared. Important to know is those candidates who were running they got very low numbers, medical marijuana got higher vote totals than any single person on the statewide ballot.
This time around it’s a presidential election. Turnout was my enemy last time. This time turnout will be my friend I believe. The last time the Supreme Court approved our language 4 to 3, it was very close. This year I tweaked the language to kind of answer some of the critics, tweaked the language last time 4 to 3, Supreme Court. This time the Supreme Court said by 7-0 opinion we approve your language. Last time the Attorney General Pam Bondy opposed us with Amicus Brief, this time she didn’t. Last time, everybody was saying let’s do this legislatively. Last time we said okay well let’s try to do it. Two years have gone by, nothing has happened in the legislature. And finally this time in this presidential election we’ve got three people that are going to be running for president of any substance. We got Donald Trump, Hillary Clinton and I think his name is Gary Johnson, Libertarian Party. All three of the presidential candidates running for office are 100% in favor of the legalization of medical marijuana. The important thing to remember is injury and disease does not pick political parties. Just because you’re a Democrat doesn’t mean you’re going to get multiple sclerosis. Just because you’re a Republican doesn’t mean you’re not going to be injured in an accident. As we all know disease and injuries they are neutral.
Matthew: Do you talk with anybody in the legal profession; judges, lawyers that support cannabis legalization but are fearful to step forward and announce their support publically?
John: Yeah and sheriffs and police chiefs. I mean kind of a lot. The last time the Sherriff’s Association came out really against us and they said look we’re for it. We just don’t want it to be done with an amendment. We want it to be done legislatively so there can be more control. This time the sheriffs, while they’re not going to come out for me, they’re not going to be out there fighting me like they did last time. Look there’s a whole world, a whole industrial business of housing and jailing drug offenders. And these policemen and sheriffs and police chiefs they don’t want to be wasting their time chasing down people who are using medical marijuana, and they are compassionate people. My main opponent was Sheriff Grady Judd from Lakeland. He said look I want this to happen. I just want it to be done legislatively. If you ask him now he says the legislature failed us.
The people who really come up to me and who support me are doctors, nurses, people who work in hospice centers, people who work in rehab centers, oncologists. The cancer doctors are the ones that come to me and go for God sake please make this happen. There is a drug that you can take for nausea, but it doesn’t work. I mean they’ve never been able to figure out how to make it work. When you have taken chemo and you take marijuana in any form it almost immediately gives you your appetite and quells your nausea. It just works. So a lot of people are coming forward and I think as these dominos are falling around the country, people are more embolden and have more courage to say hey we’ll step forward and be out there.
Matthew: As cannabis gains a bigger foothold in Florida and if legalization passes, do you see yourself getting involved in the commercial side of the business at all?
John: No, I have no interest. I have no land, I have no dispensaries, I have no plan. Every law firm and lobbyist in the State of Florida now has a marijuana group, but I’m an entrepreneur. I have a bunch a hotels and shopping centers and part of a private (14.29 unclear) that I have attractions and my law firm is Morgan & Morgan. I’ve got them all over the country. So I got all I can handle and I think it’s better for me not to be because I don’t want this to be about me and some kind of financial gain for me. So that’s been my pledge that I don’t and I won’t.
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Matthew: How big of a factor is an increase in tax revenue in helping the legalization effort in Florida?
John: Well look when you really think, when you get into the business side of it it is every day technology and innovation gets rid of a lot of jobs here in America. This is a job creator. This is a tax creator. This is an economy builder. I mean all you have to do is look at it in Colorado and see what’s happened out there. I mean the governor was kind of 50/50 on it and how he’s 100% on it. Real estate values have gone up. There’s more real estate spaces taken. There’s jobs, there’s revenue, there’s taxes. From a business side this is an absolute no brainer. It just means money to the state and jobs for the people.
Matthew: John can you explain what Civil Asset Forfeiture is for our listeners that don’t know?
John: Well if you were caught, I’m not a criminal defense lawyer. I’m a trial lawyer but I did go to law school. It’s basically where if you’re involved in a criminal enterprise that you can forfeit your assets that were involved in that. If you have a car or something your car could be impounded and sold. By the way that’s a big business for a lot of sheriff’s departments. That is a revenue bill and some of these… that’s kind of a dirty little secret. I mean that’s a revenue builder for them.
Matthew: Right. They have part of their budget built in is civil asset forfeiture and that being said do you think it really colors how we should look at their opposition to cannabis?
John: I think it might. I mean look you got people who want to lock people up for drugs because there is private jails. I mean you think it colors those people’s view, yeah they want to lock them up because they make money. In fact if I owned a hotel, which I do, but I want tourists to come to my hotel, yeah. That’s how I make money. The only way people make money that own jails is to lock people up. And so what we decided to do in this country is to have this so called War on Drugs where we lock people up who have a drug addiction. We don’t lock people up for having diabetes, but we lock them up in America. We love to put people in jail in America. We have 18 times more people in jail per capita than any country in the world and the closest to us is China and I’ve been to China and I was scared to chew bubble gum and look at a police. I just stayed in my hotel room looking out the window, but we will lock people up a lot faster here because it’s profitable. We like to act like we’re very tolerant people, but America may be the most intolerant. The caning that goes on in Singapore pales in comparison to all the people in jails in America.
Matthew: Yeah I think there’s just a feeling of powerlessness like our legislators have kind of been taken over, infiltrated by certain powers that just dictate what to do and one of those powers is the prison lobby or companies that benefit from the War on Drugs and we just don’t know what to do. It’s frustrating.
John: Well look I mean the pharmaceutical industry is billions and billions and billions of dollars and they don’t want this. The two groups that don’t want this to pass are pharmaceutical industry and El Chapo. Those are the two people who are really groups that don’t want it. I do a lot of tobacco litigation, sue the tobacco companies for deaths of people. The tobacco industry is probably the most evil, diabolical industry. I mean they are in the business of premeditated murder. You know what they call the young smokers? They call them replacement smokers. Forty-four thousand people die every year, excuse me, 440,000 die every year from tobacco. When you smoke a filtered cigarette and you see that brown stuff at the end of the tip. You think oh that’s the tar and nicotine. No it’s not. They lace the cotton with a chemical to make it turn brown so you think that all of that is being blocked. They are in the business of premeditated murder and our government allows it. Why? Because they got the bribe money. It’s outrageous. And by the way, marijuana has never resulted in one single death ever in the world from marijuana use.
Matthew: Great points. Now what you think will happen if Chris Christie becomes Attorney General in the Trump administration, if that happens?
John: Well it would be like the bully from your fifth grade class is now in charge. The teacher has gone out to take a smoke and now the bully is in charge of the classroom. I mean it’s unimaginable to me. I’m a liberal democrat okay but I’m a very fiscal conservative. I’m a businessperson, I’m a capitalist. I love what Bernie Sanders said but I just couldn’t go that far because I mean there’s just not enough money to give everybody shit for free. But when I look at the people, Chris Christie and what’s going on in America I’m like, I mean, I can’t believe what I’m seeing. I know that people called Trump Hitler and Mussolini. I don’t want to go that far but I will say this, I can see how Hitler happened. Because I’m sure that Hitler was not out saying I’m going to exterminate all the Jews the first day in office, but he was saying some awful shit.
What I hear and what I see makes me understand how good people hoping to protect themselves let real bad people get in charge. So Chris Christie, what he would probably do is he would probably undo all the… he would probably start prosecuting everybody federally because there’s a conflict between the states and the federal government which could shut down everything marijuana in America. You can’t bank because of it now. Banking with marijuana is real difficult because the federal preemption.
Matthew: Any desires to run for political office in Florida or otherwise?
John: Who me, no. Listen I got a great life. I go to Hawaii in the winter time. I come to my beach house in the spring and in the late fall. I go to my house in Orlando. I travel the world. I’ve got all my children work with me in my law firm. I’ve got grandchildren. I sit out here on the back porch at night and drink Makers Mark and grill steaks. Why the heck would I want to do something like that?
Matthew: Now if Amendment 2 doesn’t pass for some reason will you continue your activism?
John: I’ll continue my activism. I can’t imagine doing it a third time. I mean I would have to say you know I’ve carried the baton for two legs. Let’s see what we can do. I’m now 60 years old. What I plan to do if it passes, I plan to then go out and do another constitutional amendment to raise the minimum wage in Florida to $15 an hour because none of this stuff is ever going to happen in the legislature because the Chamber of Commerce and these people that bribe our politicians. They don’t want to pay people a living wage. I mean in all my businesses I pay living wages, and guess what? I think I make more money because of it because people stay. But I don’t know how people live on 7-8-9 dollars an hour. I mean the food bank, the Morgan & Morgan Hunger Relief Center at Second Harvest Food Bank, 250,000 people, this is in Orlando, come every month or every week, excuse me. Most of them are the working poor. I mean they go to the grocery store, they check people out and they get in their car and they go get free food because they don’t have enough money to feed their families. I mean Bernie Sanders is right on on that.
Matthew: You know sometimes even the best laid plans have unintended consequences as we saw when Wendy’s says they plan to automate all their fast food restaurants with automated ordering. So sometimes there’s a benefit in higher wages for some folks but at the same time that kind of creates an incentive for businesses to use automation or software or other things that replace people entirely because they don’t want to pay the increased wages. Do you think that’s a tradeoff worth making?
John: Yeah because I don’t believe it. I believe that Wendy’s can try to automate all they want. I mean I’ve driven through there. I haven’t ever seen anything automated in Wendy’s.
Matthew: Well they just announced it recently.
John: Well they can announce they’re going to go to Pluto too, but who is going to cook the hamburgers? Who is going to take the change? I mean when you come through the drive thru window. I mean everybody has got aspirations. Listen if you want to worry about something, worry about the driverless car. The driverless puts car dealerships will sell fewer cars. I mean how many hours a day are you in a car. You don’t need a car. If you’ve got Uber and a driverless car, you don’t need a car anymore. I mean last night we went to a restaurant, we had some drinks here. Uber came to my house at the beach, we got in the Uber. We drove down the street, we had dinner. We came back. I mean but if it was a driverless car, I think what that does is there’s no more insurance agencies, there’s no more insurance companies, there’s no more body shops. I mean innovation of technology is coming which also kind of makes my point for the marijuana industry. It is a job and tax creator.
So you know technology and innovation is going to come. I don’t think this, business is never going to pay people more just so they can do it. If they can do it more efficiently, they’re not going to just keep the robots out just because they’re good people and benevolent people. I don’t believe it.
Matthew: John you recently were a participant and speaker at the Marijuana Business Daily Conference. What did you think of that when you went around? It was your first time there. What did you think of the cannabis business community?
John: Shocked. I mean I thought I was at an Amway convention. I mean there was thousands of people there. See I’m not part of this group. I had never been to anything like that before. I’ve been on the medical marijuana side in Florida and you know very smart people, business people, doctors and I just thought we are at a tipping point that one day in the near future that avalanche is going to happen and people will go my God what happened. It was just a snowflake, well no with all that built up snow it finally just fell and it was well organized. The people were smart. The vendors were good. I was amazed. It was in my hometown so I didn’t have to go that far to do it, but it was I think 3,000 or 4,000 people there. I was like good lord.
Matthew: Right. John I like to ask a personal development question. As you look over the arc of your life, is there a book that had an outsize impact on your that you would like to share with listeners?
John: A book? There’s been a lot of books. I mean the book that’s impacting me right now is a book called Halftime, and everybody always gives the phony answer the Bible so I’m never going to do that. But there’s a book called Halftime and what Halftime talks about is going from success to significance. That you go through life making money and trying to get ahead and then you get to a point in your life where you’re at Halftime or for me probably the third quarter. It’s a fantastic book. So the premise of the book is why are we here and what’s it all about and what comes next. And when you stop focusing on success and you start to focus on significance you will find a much greater peace inside of yourself. I find a great peace for doing this.
I found a great peace when I did the food bank. We just put a bunch of money to build a domestic shelter for abused woman called the Morgan & Morgan Harbor House, and I have found when you look at people that have peace and you’ve seen them in your life, what is it behind it? Why does that person feel, why is that person so chill? Why is that person such at peace? I’m trying to look at it and here’s what it is. There’s a prayer by Mother Theresa and it goes like this, the fruit of silence is prayer, the fruit of prayer is faith, the fruit of faith is love, the fruit of love is service and the fruit of service is peace. When you go from success to significance you take what’s called her simple path and when you get to that service part, and that’s where I’m at right now with legalizing medical marijuana, when you get to that service part that’s what gives you peace and that’s what gives you, I think in my own mind, everlasting peace.
Matthew: Great. That’s a great place to close John and as we do close I want to thank you for your activism and generous donations to cannabis legalization. Can you tell us one more time how listeners can find United For Care online?
John: Go to www.unitedforcare.org. We will accept your money. We need your money. We don’t know what they’re going to come at us with in the fall, but we got just so close last time. We just need that one more snowflake for our tipping point to give us this avalanche. So it’s www.unitedforcare.org.
Matthew: John thanks so much for coming on CannaInsider. We really appreciate it.
John: Alright, thanks for having me. I appreciate it.
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 guests to you. Learn more at www(dot)cannainsider(dot)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 www(dot)cannainsider(dot)com/trends. Have a suggestion for an awesome guest on CannaInsider, simply send us an email at feedback(at)cannainsider.com. We would love to hear from you.
Please do not any information from CannaInsider or its guests as medical advice. Contact your licensed physician before taking cannabis or using it for medical treatments. Lastly the host or guest on CannaInsider may or may not invest in the company’s or entrepreneur’s profile 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.
John Morgan is a famous attorney turned activist and philanthropist. Find out why he is putting so much of his time and money into the fight to legalize cannabis in Florida.
** CannaInsider is a podcast where the host Matthew Kind interviews the leaders of the cannabis industry.
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[2:30] – John’s background
[4:28] – John talks about United for Care
[7:17] – Why FL missed out on legalization in 2014
[9:02] – What are the strategies this time around
[11:56] – Why Floridans are not more public about their support of cannabis
[15:31] – How big a part tax playes in legalization in FL
[16:32] – John explains Civil Asset Forfeiture
[20:58] – John talks about if Chris Christie becomes Attorney General
[23:27] – John talks about if Amendment 2 doesn’t pass
[27:00] – John talk about his experience at the MJ Biz Daily Conference
[28:09] – John’s book recommendation
[30:41] – Contact details for United for Care
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