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Helping Cannabis Businesses Get & Keep a Bank Account

sundie seefried

Sundie Seefried is the CEO of Safe Harbor Private Banking and shares why she is successful in helping cannabis companies get and keep a bank account. She also covers how to interpret The Cole Memo to stay in compliance with regulators and how she is successfully processing 65-70 Million dollars a month.

Key Takeaways
[0:51] – Sundie’s background in banking
[2:31] – What Partner Colorado Credit Union does
[5:51] – The current landscape of cannabis banking
[8:18] – Understanding The Cole Memo
[10:51] – Why Sundie is successful in cannabis banking
[13:38] – How Partner Colorado Credit Union makes money
[16:48] – Sundie talks about day-to-day banking challenges
[20:19] – Sundie talks about how they deal with all the cash
[22:12] – Common regulator concerns
[25:14] – Does banking work for companies that are licensed in multiple states?
[29:02] – How do debit and credit cards work for cannabis businesses
[31:57] – Sundie gives advice on banking in the cannabis industry
[33:44] – Sundie talks about her trip to D.C. to meet politicians
[35:37] – Cannabis banking three to five years in the future
[40:39] – Sundie answers some personal development questions
[43:38] – Contact details for Partner Colorado Credit Union

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Read Full Transcript

In the United States banking for cannabis related companies is a huge problem. Here to tell us about it and how you can have a responsible and safe banking relationship is Sundie Seefried, CEO and President of Partner Colorado Credit Union. Sundie, welcome to CannaInsider.

Sundie: Thank you Matt, glad to be here.

Matthew: Before we get started with banking, can you tell us a little bit about your background and how you got into banking and specifically, helping cannabis companies get banked?

Sundie: Sure, it’s an interesting story because I was headed to retirement. I’d actually put my notice in with the credit union here, and I had about six months left. And I was meeting with some attorney friends and they said well you’re a banker. Why can’t our clients get any bank accounts? And I said, well gee, we just came out of a recession, and nobody is interested in taking on additional risk, and I think our regulators really kind of just shake their heads no when the topic comes up, but let me do some research.

So I went and did some research, and I was really surprised by my findings. And I guess, the safety issue really stuck out, and when I explained to the board how the cash was being handled in their own communities they were a little appalled as well and feared for their members and their families. And the more we learned the less we could ignore the situation around us. The second thing that really bothered me about my research, as we were going through it, was that this was an industry that was emerging and legitimizing itself, and the lack of banking actually was forcing them to do less than legal activities within the system in order to get payment services.

So we were technically making criminals of the industry by not banking them, and I felt as a banker, our side of that equation, we weren’t living up to what we should be doing for our communities, especially as a credit union. So we really felt compelled to right this wrong and find a solution for Colorado.

Matthew: Well I’m glad you did. Can you tell us a little bit about Partner Colorado Credit Union, where it’s located and who you serve?

Sundie: We are in the greater Denver metro area, so we have about four branches around the city. And we were chartered in 1932 as a postal credit union. Post office employees pulled their funds and decided that they were going to create a credit union, and that’s where it started, as a cooperative. The interesting thing about credit unions is that we were actually chartered by Congress to serve the underserved and the unbanked. So philosophically this entire project fit into the foundation upon which credit unions were built to exist. And since we exist to serve our communities, it was important that we stepped up. Our communities changed when marijuana became legal and therefore our objectives and our strategies needed to change with our community. Safe Harbor Private Banking is actually a division of Partner Colorado Credit Union, and the reason we named it separately and hold all the accounts separately is for additional security purposes on these accounts.

Matthew: How long exactly have you been working with cannabis companies? How far does it go back specifically?

Sundie: I started my research in 2014, which is right after they issued the guidance from D.C. And we actually launched the program in January of 2015, after about 6 months of jumping through hoops and getting ready and developing all of our strategies. So it’s just been about over two years now, and we have about 110 clients. And we process probably $65million to $70million a month, which we feel pretty good about that because our intent was to get the money off the streets. Our first ten charter members were really quite instrumental in the success of the program.

They really trusted us, first of all, to bank with us, and then second of all, they understood that for us to bank the business we really needed to understand the industry. And so they were really generous with their time and their education and bringing us on-site and showing us all of their monitoring systems and allow us to just see everything in order for us to build a program that incorporated everything about the industry into this program and be able to mitigate all of the risk factors that we would find. So I really give them a lot of credit for helping us get this program launched.

Matthew: Can you paint a picture of where we are right now in terms of banking for cannabis related companies here in the United States? Because there’s a lot of people listening that will have one or two really bad pain points for their cannabis business. There’s people right now that are just starting their cannabis business, and they’ve heard there’s issues and they’re not quite sure of what they are. They just know there’s some pain. And then there’s even people in Canada or different places in the world that are just appalled by what’s going on with our banking. So maybe you could just paint a picture at a high level of what the situation and the problems and some of the opportunities are.

Sundie: Well first of all, I think the industry offers a lot of opportunity for the banking world, but the discrepancy between the legality at the state level and the illegality at the federal level makes it very difficult for anybody to enter this business. We are subject to prosecution and heavy fines just for doing what we’re doing today. It hasn’t been a practice of what’s happened in terms of people trying to serve the industry. Most of the time programs just get shut down, but you can’t put the entire credit union or banking institution at risk for a segment of business because what would happen is if it wasn’t done correctly, an institution could be easily fined millions of dollars, which would shut the entire organization down, not just the program.

So banks and credit unions are in a situation where they want to serve the industry, they see the legitimacy of the industry and the opportunity, but to enter that they’re thinking they’re risking their entire organization. And the larger the organization, the less likely they are to enter it. So what you find are more smaller community organizations, like ourselves, that would enter the market and pay attention to the community and take that risk, and it’s still a risk, but the way we went at it, and the way the other credit unions are going at it, is to be very transparent and very close to the regulators to make sure we’re doing it right.

I think everybody with whom we speak on any level knows the money needs to get off the streets. And so that is a factor that we took into consideration. If they want the money off the streets, even though there’s this discrepancy and the legality issue, are they really going to come in and prosecute us, or are they going to come in and say, somebody is going to have to start somewhere and this money has to get off the streets and we’re going to tolerate this until we can fix the legality issue. And that’s pretty much, I think, what we’re banking on.

Matthew: And can you talk a little bit about what the Cole Memo is and why that’s such an important memo?

Sundie: The Cole Memo is what I would consider a real show stopper for a lot of banking institutions and credit unions that want to get into this. And the reason is with our normal business accounts we don’t have to know how they’re protecting themselves on every level from prosecution or legal ramifications. But with this industry, the Cole Memo spells out the eight priorities, and every licensed entity needs to make sure they’re not implicating one of those eight priorities set forth in the Cole Memo.

Now to take that one step further, the bank environment has to make sure the client in this case isn’t doing anything to implicate one of those eight priorities. So if you take just one priority, which says, don’t sell cannabis to a minor, it’s difficult enough for the business to protect themselves, but how does your banking entity actually guarantee that that client is not implicating that priority and actually selling to a minor. How can anyone guarantee that product isn’t going over state lines? I don’t think anybody can guarantee that at any level. So the best thing we can do is monitor the business practices, get into the organization, see how they’re protecting themselves. The more they mitigate the risk, the less likely we are to get stuck in a situation where the regulators are thinking that we’re not watching the shop.

So that’s why the relationship is much tighter with cannabis organizations than regular organizations with whom we bank. It’s extremely important for us to watch this particular issue and to know that our clients know how important that Cole Memo is to them because it is also important to us.

Matthew: So the thing that strikes me about what you’re doing here is that you’re able to actually have live bank accounts for your clients. I mean, I keep on hearing all the time about people in the industry, oh I just got this bank account closed, I just got this bank account closed. But you seem to have a model here that works because you’re really, let’s say, focused on the details of what the entire ecosystem wants. So tell us, how are you able to accomplish this when all these other banks and credit unions just don’t seem to be able to?

Sundie: Well first I have to give credit to those who came before us, because I studied them and their actions and activities to make sure that I wouldn’t make any similar mistakes, or that I could learn from their experience. What I learned was if I was going to go into this, we had to go to the very highest level of compliance. And the thing about the guidelines that they give us is that they only give us red flags. The rest of it we have to make up. We have to meet the criteria sufficient enough to find those red flags and avoid any criminal activity.

So you’ve got every banking institution and credit union out there creating their own processes. So I said to myself, well I’m just going to create the highest level stand, and I have over 30 years of experience in the banking environment. So I had enough information and enough experience to know what an auditor would be looking for, what a regulator would be looking for, and I was able to create solid mitigating strategies. What has kept us in the business at this point in time is that we have spared no expense on resources, and we told all of our clients this coming in the door. That we have to operate to the highest level, which means it’s a compliance program first.

We now for those 110 clients have 10 full-time, management level bank secrecy officers, which is not a low cost resource. Sixty percent of their time is spent on compliance, not service. And even after two years, if I look to streamline the program I have to say that I have not been able to find any manner in which I could streamline this. And the same thing about that is I don’t know that I want to streamline this and put anybody’s account at risk because our whole objective was never to be that bank calling somebody and saying, we have to close your account because we didn’t do it thoroughly enough.

I think what really drove us, because this was not an easy process for us in any way, shape or form, but what really drove us was doing the right thing for our community, and the more we saw that cash starting to flow through, the more we started wondering where in the community this was being stored and hidden. And so I think that just gave us a good driving factor to keep us on track to get this done.

Matthew: Now how does your credit union make money from cannabis companies to keep the lights on and to continue to operate? Because typically credit unions are kind of low fee, but you have a high overhead model here with these banking secrecy officers and a lot of the compliance infrastructure you’ve set up. So how do you make money?

Sundie: Well I think everybody in the industry who’s banking will tell you that banking is expensive and it is. As a credit union professional, it’s been difficult for me to even charge the fees we have to charge, but at the same time, I know it won’t always be that expensive, but until that black market is minimized and the majority of industry has a bank account, we are going to have to keep this high level of resources on the task. We charge on incoming funds because that is where the risk is. Everything we do is based upon the dollars and the checks and any monetary instrument that comes into an account. We have to track that. We have to report that. We have to validate that, and we have to monitor that.

When I say monitor that, I mean also monitoring outgoing funds. We can’t just monitor incoming funds. We have to also, according to our guidelines, make sure that none of the funds are outgoing to any illicit or criminal activity. So it is expensive. It just depends on how people price it, but I kept watching this the first year and I think my clients realized it was a test for us. And we have made a sufficient amount of money. I can tell you that actually we are charging the same thing we started charging year one. So we were right on track with that, and it’s been plenty and sufficient money to do it. I haven’t really thought about increasing the fees because it’s covering the costs plus a little extra, which we do need to make money.

Matthew: So you charge as the money comes in, that’s the highest risk point is. Can you give us an idea of is there a range of what you charge per how much comes in, or is there a risk profile assessed by the type of companies, or how does that work specifically?

Sundie: They’re all charged the same amount, and it’s between 30 basis points and 45 basis points, at this point in time, but with the consideration of our national launch in program. We’re going to have to match the standards of the national program, and unfortunately taking a program nationally is not inexpensive. So if you were depositing at this point in time a million dollars a month, your fees would be about $3,000, and therefore when you get to the lower end they’re paying much less because they’re depositing less.

Matthew: So kind of between a quarter and a half of a percentage point.

Sundie: Yes, that would be about right.

Matthew: You mentioned your secrecy officers. You have a growing team there. Can you tell us what your day-to-day life is like? You’ve give us some details there, but day-to-day, week-to-week, what’s your life like? What kind of issues are you grappling with? You’re looking at transactions coming in and going out. You’re probably having things that your secrecy officers are coming back to you with. What other kind of issues do you grapple with, or do you find challenging, or if you could wave a magic wand, wish they would go away?

Sundie: I think the interesting thing too I’d like to say is that we are trying to slow our program down because we’ve gotten to a comfort point where we don’t want to have this program get much larger. You can only do so much at a certain size organization. We have limitations to manage too, which is unfortunate because there’s one thing. It’s really difficult for every one of us in the program is somebody calling and saying I just need a bank account, and they have all these stories, and we want to solve the problem, but we can’t solve it for all of them.

The most time consuming thing we do is onboard and do our due diligence, which can take two to three weeks, easily. And then all of the on-site activities, so bankers are required to go on-site and meet with the owners and the managers and understand all the cash flow, understand all the strategic direction and keep track of any changes in ownership or key personnel. That’s all required, so that’s very time consuming. And if we didn’t have to do that, I think life would be easier. In a normal business account, you probably have to do a drive-by once a year to make sure the business is still there.

So we’re looking at quarterly visits to do all of this, which is very, very time consuming. The rest of our time, as I said, 60% of it is spent on compliance. What that means is they’re looking at the deposits going into the account. They’re looking at the validation documents on a regular basis to make sure that the sales that are being reported to the state match the deposits going into the account. That legitimizes those transactions, but it’s not just sales deposits that require validation. There’s a lot of other cash and money flowing through these accounts. As an example, investment funds.

People would think that would be an easy thing to bring into a bank account, but even that must be validated. We have to know the source of all funds coming in to a cannabis account, and we have to validate it. So if there’s ten investors, we have to validate the process in which those investors are vetted. Are they accredited investors? Are they friends and family? We have to ensure those dollars coming in from investment funds are (1) not coming from any criminal activity or source out there, and (2) as they’re being returned to the investors, that they’re returning it according to contract and not necessarily… I mean, there’s a channel where additional money could run through if we’re not watching.

So it’s quite a process. That validation process is probably what takes up the most of their time. And while it would be nice to automate it, I think we’re going to be able to automate the sales activity as it matches up to the state and point of sale systems, but you’re never going to be able to validate automatically every deposit coming through an account. That personal element will always be there, which requires the banker’s attention.

Matthew: Now I’m curious, how do you deal with the massive amounts of cash that cannabis companies need to deposit? I mean, most of them are taking cash only. They have ATMs in their dispensary. Some have found ways to take debit cards and other inventive solutions that are out there, but what about all the cash?

Sundie: Yes, well we’re at approximately $2.4million a calendar day. That’s not even a business day. So you can imagine there’s no safe way for us to manage that kind of money through our staff and our branching footprint at this point in time. So we have been forced to use armored services to pick up the cash from each of our clients, and then take it to a vaulting facility, verify the cash, look for counterfeits, count it, and then they pool all of our client money and they take it to a federal reserve account.

This takes it one step further in terms of safety. Our members are safe because it’s not coming through our branches. Our employees are not fearful because they’re handling so much money. And then the businesses themselves are not carrying this cash all over town. So it’s just a big safety factor all around, and I think while it’s a little more expensive to do the armored services, it definitely starts taking the fear out of the communities about where that money is because they know it’s being handled from start to finish by the right professional resources.

Matthew: Yeah, because that’s a big bounty, a big booty, if some criminal gets their eyes on that much cash.

Sundie: Yes.

Matthew: I’m surprised that we don’t hear about more armed attacks and things like that because that is just such a mass amount of cash. But anyway, so when you talk to regulators is there one or two concerns that pops into their heads the most, that you hear the most, like we want to know this, we want to know that, or if you can give us this detail or that detail that assuages their concerns?

Sudie: I think right now the greatest concern at the regulatory level is the change in administration. We were starting to build some comfort, I think, at that level. And I think everybody thought it was going to be business as normal, as it was under Obama, but when the administration changed and a lot of talk has been out there everybody is kind of up in arms as to what’s going to happen and are banks and financial institutions in harm’s way at this point in time by continuing to bank this business.

So the biggest issue we talk about is, unfortunately, what’s your exit strategy. If there is one thing that comes out of the federal government, say the revocation of the Cole Memo, we’re all going to have to jump into action. Not just one of us, we’re all going to have to jump into action because they’re taking protective measures away. The other thing we’re talking about is the amendments are driven toward medicinal and not recreational or adult use as well, and you can’t bank half a business. So if they don’t straighten out the fact that all cannabis is the same for banking purposes, we are going to have to deal with that issue as well. It’s impossible for me to bank half a business.

The liquidity issue is driven by the exit strategy. In other words, if I’m sitting on $20million or $30million in deposits in cannabis money, I can’t use that money. I can’t loan it out. I can’t invest it. I must always have that money in reserve prepared to exit at any given day, which causes credit unions of my size to actually go out and borrow money to keep that money liquid. So it costs me money to have that money sitting on deposit. So those are issues that we’re dealing with at this point in time.

I think my bigger concern is if anything comes out of D.C. that would cause our regulators such discomfort that we would have to enact an exit strategy, putting $70million back on the streets in Colorado, inside of a month or two really should concern everybody. It definitely concerns me. How does that happen without disrupting an entire community and disrupting the lives of all those employees that are working for the industry. I think many times in D.C. they think a lot about just the business, and they forget how many employees would be forced back into a cash paycheck if not banked.

Matthew: Yeah, I don’t even think they think that far ahead. That’s my impression.

Sundie: We keep telling them that.

Matthew: Yeah. So if I’m an edibles company and I’m in multiple states, maybe through licensing or some other way, can I have one checking account, or how does that work?

Sundie: Well this is an interesting question because it goes back to the FINs and guidelines and the interpretation of the red flags and what were my mitigating strategies to meet that red flag. My interpretation in this particular situation is that you cannot co-mingle any funds derived from the sale of product between states. Therefore if I have ABC Company, Colorado and they want to have ABC Company in Nevada, they have to have two very separate bank accounts and keep that money completely separated. Of course that’s my interpretation.

Matthew: And do you have to close accounts often, and if you do, what are the typical reasons for that?

Sundie: Actually in two years I think we’ve closed less than five, five or less. So we don’t do that often. We’re really good about educating incoming clients on the rules. And when the bankers are on site quarterly they’re always talking about things they don’t want to do and put their bank account at risk. So because we’ve been able to offer the continuity of banking for them, our clients are more than cooperative to make sure that they’re doing all the right things to keep that bank account safe and the program safe.

Things that would cause us to close an account would be first and foremost if a business was not compliant with state regulations surrounding cannabis. That’s (26.49 unclear) and guideline is very clear on that. So if there are issues and a license is revoked, that account has to be closed. If licenses stop getting renewed, we have to determine at that point in time what’s happening and that’s probably going to cause us to close an account. Obviously violations and citations don’t necessarily force us to close an account, but it causes us to do deeper investigation in that organization. Ask them, how did this happens? What are you doing about this? How many violations is this now in the last 12 months? And then consider the risk of that organization at that point in time.

We’ve had citations happen or violations. And our clients are really good about being forthright and forthcoming and have solutions and do the right things, and keep themselves out of problems and try to prevent to the best of their ability for this to happen again. So that really makes us feel really good they have that level of cooperation. The last thing would be a lack of cooperation with their banker in terms of providing timely and sufficient documentation to justify deposits. Every dollar that banker allows to run through their portfolio has to be validated, and that banker is personally liable and can be banned from the financial industry if they don’t do this correctly. So it’s really up to the level of comfort that bank secrecy officer has with that account.

So I always tell clients, you got to keep your banker comfortable because they’re the one who actually has to make the call in the end on whether or not they can stand in front of federal agency or regulator and say, I can show you how legitimate all the dollars are that run through this account. So that’s why it becomes very important that the cooperation and providing documentation is there between the client and the banker.

Matthew: Now do you allow for your clients to accept debit and credit cards in a dispensary or even for wholesale transactions? I mentioned that briefly, but how does that work?

Sundie: That’s an interesting topic, and I think the majority of people I know in the industry are still holding their breath hoping that Visa and Mastercard and the other credit card companies will come around. This is really not something that is up to us. Really it’s up to the Visa, Mastercard, American Express, those companies as to whether they want any cannabis funds running through their channels. And so, where it really falls is to the sponsor bank who is allowing those transactions and guaranteeing those transactions to some level.

If a sponsor bank is willing to accept those, then we are willing to accept those. What’s happened and we did have a sponsor bank in the very beginning of our program, and we had several of our clients up on cards, and all of a sudden the volume got so high that the sponsor bank got nervous and then shut the program down. So That’s where the shutdown happens. The other thing that happens in this arena is a lot of times a sponsor bank isn’t aware it’s a cannabis organization and suddenly they find it. And then when they find it they go to that merchant processor who signed up that client and they just start shutting down all of their accounts because they know if they brought one cannabis entity, then they probably brought more in and they weren’t completely transparent.

So more than likely it’s not always the cannabis company that’s misrepresenting themselves. It’s the broker in between, the merchant processor that allows that to transpire. There may be some that are allowing this. We just don’t know where they are or who it is and they won’t probably open up to everybody because of the volume. We, on the other hand, have been beginning work with Wallet Solutions, mobile device solutions, real debit and ACH solutions that will be used on the phone where the consumer can go in and type in a code and just make a payment, and the money flows right through us. Right from the dispensary from the consumer into an account and distributed into the dispensary each time.

So those things will take a little time and adjustment, but I think in the long run, because it’s all mobile, I think people will adjust rather than have to worry about carrying cash. And ultimately in my opinion if the cannabis industry can move to these wallet solutions and implemented them, that’s a pretty big consumer base, and I think Mastercard and Visa and the other credit companies will probably lose out on a pretty good market.

Matthew: Yeah. Now if there are people that are listening that are looking to start in this industry, what advice would you give them about banking?

Sundie: I do get a lot of phone calls like that regularly. I tell them to do their research. First see if there’s anybody else being banked, and prepare for cash transactions for the majority of the time until the market changes and more banks and credit unions get into this. And in order to prepare for cash transactions, I would recommend that they hire somebody that understands cash handling. An ex-banker is a good bet, if they’ve handled cash and they’ve handled accounting and that type of thing.

As financial institutions, we are very limited in terms of what we can do. We have concentration limits. And in our particular case, we need to keep our program less than 10% of our assets. So once we start getting close to those limitations, we have to start slowing down the program or stopping the program in order to work within our concentration limits, which is also what we consider our comfort zone. So in our particular case, the cash flow has gotten so high that it’s just too much for once institution in Colorado to do it. We know that we need other institutions, and we’re trying to help in terms of bringing other banks and credit unions to the table.

That’s one of the reasons we went public with what we’re doing because nobody believed anybody was banking this. And that in itself was a risk to go public, but until I would go public and say we’re doing this, it can be done, it’s not easy, then other people weren’t going to be willing to follow. So I’m hoping that what we’re doing is going to help open up options for the industry.

Matthew: Now you went to D.C. last week and met with some politicians. Can you tell us what you did there?

Sundie: Sure, our trip to D.C. we have each year where all the credit unions from across the country fly into D.C., and we lobby all together and get caught up on all our governmental affairs and meet with all of the legislators, and they meet with us. I think there was over 5,000 people from the credit union industry there. And in particular we did two things. The first thing we did was we introduced our program, the Safe Harbor Program, to many credit unions while we were there, so that they understand that there’s a program that they can use that’s been proven and they can implement in their own state.

The second thing we did was I think even more important and that was we had a congressional briefing with four credit unions that got up in front of these congressional staffers and offices and told them what the banking issue was and the safety issue, and the fact that this money needs to continue to be banked and any quick decision in D.C. was going to put this money back on the streets. And I think that we made a lot of headway. A year ago people wouldn’t even want to talk about it. Two years ago they would laugh us out of the offices and say, nobody in D.C. wants to talk about marijuana right now.

So I think the fact that we had the ability to hold a congressional hearing and that we had a lot of attendees, and they were interested in knowing what the issues were as far as banking the money, I think we’re making progress. I think that’s forward movement. It doesn’t mean we’re going to sell the problem anytime soon, but each year we’re progressing forward.

Matthew: I know it’s hard to speculate, especially with a new attorney general, but where do you think we’re going to be with banking in three to five years in the U.S.?

Sundie: Everyone with whom I speak wants this money banked. They want it banked for the accountability purpose. They want it banked for the taxation purposes. They want it banked so they can monitor where the money is going, and they can start sorting out the bad players and the criminal activity. If it’s unbanked, they can’t do any of those things, not accurately. So it’s not that they don’t want it banked. It’s about getting legislation passed and through and signed, and it’s going to be a process.

I think it will probably take a couple more years, but I really believe that, after we launched our program, I really believe that people are going to start stepping up to the plate because they know that it’s working. And they also realize the money needs to be banked. Again, because we’re presenting this to credit unions, they’re concerned about their communities, and they know that they need to look at their communities and the safety in their families and members. So I believe credit unions will be the group of financial institutions that says we need to get this done. We were put here and created by Congress to serve the unbanked and it’s definitely an unserved market.

So I think we’re going to see progress. I think we’re going to see a few credit unions step up to the plate this year and some banks. And I think then after we get a footprint across the country where maybe four or five are operating under the program, then I think people are going to say okay, there’s a way to do this that the others are doing it and we can follow them.

Matthew: No I have a question for that’s unrelated to cannabis bur related to banking. When I go to the Office of the Controller of the Currency website, which anybody can go to, if you just type into Google “Office of Controller of Currency,” you can see the derivative exposures of different banks. And the big, big banks that almost everybody is at are doing a lot of casino level stuff that people just don’t understand. Derivatives trading, which not necessarily itself is bad. It’s just when you look at the size of the derivative exposure of some of these big banks, which almost everybody banks at, it’s in the trillions. The notional value of this derivatives exposure. And eventually we don’t know which snowflake will cause the avalanche here, but at some point this derivatives trading will have a crash again. I’d love people to understand that credit unions don’t have this going on do they? I mean, you don’t see, you’re not doing any kind of derivatives trading at a credit union are you?

Sundie: Credit unions are regulated quite differently than the banks, and our ability to invest in certain things is very limited. Once again, because we’re not for profit and we’re a cooperative. So we can only invest in things like government securities and mortgages. And the majority of the funds that we bring in in the cooperative are supposed to be loaned out to the very cooperative members. So that’s really how we operate. If we need more money to loan out, we raise interest rates. If we have a lot of money to loan out, we lower loan rates because that’s exactly how we invest our money. We really turn it right back and invest into our communities and our members.

So you’re absolutely right that credit unions are not making those risky investments. And that really was great, especially during recession because that’s what kept most all credit unions safe during recessionary times. We all had the same issues in terms of the housing market, but we didn’t make those loans and we didn’t participated in all of that activity that caused the problems that occurred

Matthew: Let’s move on to some personal development questions. I like to ask a few personal development questions to help listeners to get to know you a little bit. With that, is there a book that you feel like has had an important impact in your life or opened you up to a new way of thinking?

Sundie: I am not a big reader. I have to put that right out there. I think what I’m doing here and where we’ve gone as a credit union was really based upon the way I was raised. And my parents were Baptist missionaries my whole life, and they really taught us to do good by the people around us, to pay attention. So it’s probably why I ended up in a credit union as a career, but they always taught us that you need to do the right thing and don’t ignore it.

So when this project came up it was just all around us, and it was just pervasive in everything I did in terms of moving this forward. In fact I will tell you that I probably say it to myself two or three times a month when things get tough. You’re doing the right thing. Just stay on track, this is the right thing to do and it’s not always going to be easy, but you’re supposed to do the right thing, and people respect that. I find that if I had gone into this for the reason of profitability or to build a big reputation, even off of myself, it wouldn’t be the same thing if it was just for doing the right thing. I think some of that stuff happens because of what you do. I think a lot of good things happen when you do the right thing. I think that’s what really drives both myself and my team to keep going forward, even in the face of adversity.

Matthew: I think this is like karmic banking is what I’m hearing here. Doing the right thing.

Sundie: It’s kind of a credit union philosophy. It’s kind of pervasive in how we get taught in terms of banking through credit unions.

Matthew: One more question. Is there a tool, web-based or otherwise, that you consider vital to your day-to-day productivity?

Sundie: I have to say, as it pertains to this particular project, one of the toughest things I think I’ve ever tackled in my life is still the good ole fashioned talent, drive, perseverance, organizational skills and time management skills. But even beyond that, that’s just entrepreneurial talent, and beyond that in this industry you have to have that perseverance in order to sustain that performance long term, because it is such an uphill battle to do anything in the cannabis industry, that you’re always taking that two steps forward and one step back.

So sustaining a high-level performance is really necessary. This is not an industry or even banking program for anybody that doesn’t have a high-level of performance that they can sustain for a long period of time. You really have to have courage to be in this industry and a lot of stamina.

Matthew: How can listeners find out more about Partner Colorado Credit Union and Safe Harbor?

Sundie: That’s an interesting question. We actually had someone send… they came in to open an account the other day, and the interesting thing was he said he had heard about us because we were serving the cannabis industry. And then he had purchased my book and he read it and he couldn’t believe how community focused we were. So he and his wife decided that this was the place they wanted to bank because we were doing good things for our community.

If you want to learn about Partner Colorado Credit Union, you can go to our website which is Again, that’s The second place that you can learn about what we’re doing in terms of the cannabis program would be That’s where you’ll learn a little bit more about the program and the journey and process it took to get where we are today.

Matthew: And you mentioned a book there that talks about community banking. What book is that?

Sundie: So very early I was getting a lot of phone calls and I really didn’t have time to take them because I needed my eyes on this program. So I wrote this book called Navigating Safe Harbor, and it answers a lot of questions. the reason I really wrote that book and put it out there was to get the conversation started. Bankers aren’t always the most progressive people, and to start a conversation regarding cannabis in the boardroom is very sensitive. So this book actually walks them through how to start having that conversation. All the things they need to consider about the industry in order to start a program of their own.

Matthew: Great, great, I’m guilty of not really thinking that deeply about when I make a deposit at a credit union that hey, this is going to a small business in my community. It’s like the circulatory system of communities, the cash flow, the money. So I’m glad that you’re doing that and I’m glad you’re doing this work Sundie, and thanks for coming on the show and educating us about banking. We really appreciate it, and thank you for what you are doing in the community there. It’s really important.

Sundie: Well thank you for having me. I have really enjoyed meeting the community. I’ll tell you that much.

Matthew: Great, well good luck to you.

Sundie: Alright, thank you Matt.

Mary’s Nutritionals / Mary’s Medicinals Review Coming Soon

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Mary’s Medicinals made a splash at recreational and medical cannabis dispensaries. Unfortunately, this meant only customers who were in states that had access to dispensaries could access these products. Now the Marys team has answered the call of their customers and will be launching a full line of CBD-infused products that are available online including; tinctures, pens, transdermal pens, CBD oils, and capsules. Check back soon for our no holds barred review of Mary’s Nutritionals.



PharmaCielo is Growing Cannabis At The Equator to Export to The World

patricio stocker ceo of pharmacieo

Dr. Patricio Stocker PhD joins Matthew Kind to discuss why his company PharmaCielo is growing cannabis at the equator in Colombia for export to the rest of the world. Why not grow cannabis in an ideal environment where indoor lights aren’t needed and water is abundant?

Be sure to tune into this episode to understand how the international trade of legal cannabis is unfolding.

What are The Five Trends Disrupting Cannabis Industry?
Find out with your free guide at

Key Takeaways:
[1:10] – Dr. Stocker talks about his background
[2:19] – What is PharmaCielo
[5:10] – The government regulatory system in Colombia
[6:58] – The growing environment in Colombia
[11:14] – How the political & crime situation has improved in Colombia
[15:55] – Leveraging Colombians experience with flowers and coffee
[20:16] – What countries does PharmaCielo export their product to
[22:37] – Where the cannabis market is headed the next five years
[26:30] – Environmental standards that PharmaCielo adhere to
[30:47] – Dr. Stocker answers some personal development questions
[38:40] – Contact details for PharmaCielo


Read Full Transcript

PharmaCielo, a Canadian company, is looking to leverage the abundant sunshine, and ideal growing environment in Colombia to bring affordable, high-quality cannabis to other markets. Here to tell us more about it is Dr. Patricio Stocker, President and CEO of PharmaCielo. Dr. Stocker, welcome to CannaInsider.

Dr. Stocker: Thank you very much Matt, I’m very happy to be here with you today.

Matthew: Before we dive into PharmaCielo, can you give us a little background on yourself and your experience and your education and how you came to be part of PharmaCielo?

Dr. Stocker: I was born in Argentina and raised there and studied later on in Switzerland. Then I worked for more than 15 years in the automotive industry, most of the time at Daimler running brands like Mercedes Benz in Colombia and Latin America in general but also in Europe. And one day a very, very good friend of mine came to me, like three years ago, and explained to me this unique opportunity. And that’s the way I got to PharmaCielo, in a very probably unconventional way running corporations, running companies that were present around the world. But I decided a time ago to make a complete switch to the cannabis industry, which I think is the biggest opportunity for the years to come.

Matthew: Can you describe a little bit on a high level what PharmaCielo is,for listeners that may have heard of your company but aren’t exactly clear on all the details?

Dr. Stocker: Yes, PharmaCielo is a Canadian-founded company but with a total Colombian operation, and our focus is in processing flower into oil for the global market. So we’re not focusing on certain markets. We’re focusing on the world, and we’re aiming to become the world’s leading supplier of naturally produced standardized, medicinal-grade cannabis oils and extracts. For this we have a unique concept, and you already mentioned it in the introduction. And we want to produce all natural cannabis. Premium quality with the lowest possible cost, high yields in a scalable way.

Our project is completely scalable over time, environmentally friendly or sustainable and also socially inclusive. It sounds like it covers everything, but it’s a reality. Why do we say we have a premium quality? First of all, the premium quality... you know, Colombia is known for its strains in cannabis and the climate really allows us to use different micro climates so we will be able to get the best quality strains in a natural environment. And the low cost is possible due to the technology, let’s call it the technology of the Colombian flower growers that already are one of the biggest and most important in the world. And this also allows us to scale the project very very easily with a contract grower model.

Finally, the nature and the natural environment of Colombia really gives us a last push which allows us to be completely environmentally friendly in a very sustainable project. I could go deeper on this if you want. But the last point, which I think is also very, very important for us, Colombia is in this moment in a peace process and there are many people who were struck by the conflict and also by the war on drugs. And for this reason, we also set up a solution to be completely socially inclusive and to make in certain regions, the most struck regions in the country, those people our partners.

Matthew: Yes, and there’s still that when people think of Colombia they think of FARC or Pablo Escobar, and I want to get to that in a minute. But in terms of what kind of regulatory approval you have from the government of Colombia, can you tell us a little bit about that, what kind of licensure or what they’ve given you, how you can operate there?

Dr. Stocker: Yes, yes. The Colombian licensing process is a three stage approval process. You need to have an extraction license, an oil production license. You need to have a cultivation license and an export license. We as PharmaCielo are the first company to receive this first extraction license, so we’ve completed the first stage and we’re very, very close to get the second stage. What is important also to mention that Colombia’s law is completely ready for this new market, and it focuses only on oil extracts. So by Colombian law you won’t be able to sell any flower or to commercialize flower. Everything is focused on medicinal grade oil.

Matthew: Medellin-and you’ve mentioned a little bit about Colombia, and in my mind’s eye until I had been there over the summer, it’s pretty close to the equator so I was picturing more kind of high humidity and very difficult to get around, kind of tropical environment. I think it is that way by the coast but Medellin, where I was and where your South American headquarters are, they call it the Land of Eternal Spring because it’s this high altitude, even though it’s on the equator, and it’s kind of somewhat gifted in terms of where it’s situated in the world. Can you tell us a little bit about that and the kind of environment where the cannabis is actually grown, and is it indoor or outdoor and that type of thing?

Dr. Stocker: First of all, we are developing different micro-climates, or the production in different micro-climates. We want really to take advantage of all those native strains in Colombia and all of the best strains around the world to adapt them in the best way to the Colombian environment. What do I mean with this Colombian environment? For example, you have been in Medellin and we’re very close to Medellin, closer to the airport in Rionegro, which is around 2,000 meters altitude, so this is our first environment that we have.

The second one is in Cauca, which is the biggest cannabis-growing region probably in the world, as of today. And there we have an environment around 1,000 meters. We’re also developing other projects at close to sea level, around the 100-400 meters altitude. So we want to really, over time, take advantage of all these possibilities that Colombia gives us through its natural environments. For this we’re going to use open-air greenhouses. The open-air greenhouses are the methodology that flower growers in Colombia use to produce their flowers.

In those-open air greenhouses we have a possibility to control the climate in a natural way, in a very cost efficient way. So simply by opening or closing those greenhouses by using some basic ventilations systems, which make much, much easier the climate control in general. And of course, in all those places taking advantage of the 12-hour light cycle, of natural water sources. So this is the basic concept that really allows us to get this premium quality at a very cost competitive level.
Matthew: Yes, and I mean, that’s part of what PharmaCielo sees is that eventually this is going to come down to economies of scale and the ability to produce massive volumes while controlling the cost of your inputs. So you’re making a big bet now, that’s where the market is headed. Would you say that’s accurate?

Dr. Stocker: I would add to this. I think it’s accurate that we’re trying to really develop the most cost efficient concept, but it’s really focused on a natural growing process. It’s really focused on an environmentally friendly-that will be our biggest differentiator together with the social inclusive model. So I think around the world there is produced cannabis in probably locations which aren’t natural locations to produce cannabis. For example, you don’t produce in the Northern Hemisphere bananas or mangos, but you produce cannabis. And this is the natural environment where we really can produce with no energy cost or very low energy cost, and this is the big differentiator that we have.

Instead of using energy from the grid, we use the sun. Instead of using water from the tap, we use the water from natural sources. We have a system that collects all the water from over our greenhouses and in natural ponds and this really allows us to make the biggest differentiator and the biggest impact with the lowest possible footprint.

Matthew: Nows you mentioned you’re originally from Argentina but can you give us just a quick rundown of what the lay of the land is like in Colombias because a lot of people listening they’re watching “Narcos” on Net Flix and they’ve heard of Pablo Escobar even though he’s been dead for quite some time, or hear about the dangers of FARC. Can you just touch on a couple of those things and then maybe talk about how Colombia has evolved in the last 20 years or so?

Dr. Stocker: First of all, I had the same impression when I first came to Colombia over 20 years ago, and yes, Colombia has or had this image combining guerrillas, drug lords, etc. This is probably not the good side of Colombia. But if you take the real facts, Colombia is one of the most stable economies in Latin America. Colombia is probably the only or one of the few countries in Latin America without a military government in the last 60 years.

Colombia is the only country, as far as I can recall, which had stable growth around 4.5% every year plus/minus 2 percentage points. So there are many things that make Colombia an ideal investment spot in Latin America, with good laws that protect foreign investment and with a big focus in trade and opening the country. Colombia signed FTAs with the United States, with Canada, with the Latin American and Central American countries through Mercosur, the Caricom countries, with Europe. Colombia is trying to negotiate for years with Japan. So Colombia is really open to the world and wants to grow. Colombia is very, very well logistically positioned between the two oceans, very close to North America.

So there are many, many benefits around Columbia.

When we first started this project we really had two clear visions to develop this project and the first vision was we want to transform, or help to transform, the image of Colombia which comes from a legal drug image country. Everything that you mentioned, all the Netflix series, etc., that show really this illegal drug country to a medicinal drug country. This will take several decades to change this because it’s the first thing everybody knows about Colombia and what comes to its mind.

The second really big vision of us is to develop a complete new industry that is made based on the natural advantages that Colombia has. But this is the general situation. The peace process the FARC, I think this is something very, very positive for the country. Colombia, from my point of view, was always like two Colombias. You had a very safe Colombia, a country where doing business was-you could do it in the normal way like in any other country in the world, and a part of the country which was not so normal, which was not so safe in this way and what is making this peace process in Colombia.

That you will have a Colombia that is united as a safer place again, developing with people who are really are tired of this conflict that took over more than 50 years. So I think the outlook is very, very positive for Colombia at this moment. Even President Santos got the Peace Nobel Prize some months ago as a recognition for this big effort of the Colombian people to change the situation of the country and to change also the general image of Colombia.

Matthew: Yeah, that’s great. I’ve heard a lot of positive things about Santos and what he was able to accomplish. I mean, that’s incredible, because this conflict with the guerrillas has really been… it seemed like it may never be resolved, so it was really miraculous that that was able to come to pass. The Colombians are no strangers to growing agricultural crops like coffee and cut flowers. Have you been able to parlay the agricultural skills of people down there over into cannabis, or I should say commercial cannabis? Have you seen a lot of carryover of skills and so forth?

Dr. Stocker: Yes, yes. First of all, Colombia is a country with an extreme or an incredible bio-diversity. If you take a look at what all kind of fruits that the country has it’s really incredible, but there are the main traditional industries, as you know, our coffee and cut flowers. And in cut flowers Colombia is one of the biggest players in the world with 70% of all the cut-flower market is being… or 70% of all the cut flowers in the world come from Colombia. Seventy-five percent of all cut flowers imported to the United States and Canada come from Colombia. So Colombia is very, very competitive due to a combination of nature and special skills that were developed and all the logistics that the Colombian flower industry developed here.

And here we see that as PharmaCielo we can, and as a new industry, we really can take advantage of this. You have really skilled people there, knowing how to work in the flower industry and cannabis is a kind of a chrysanthemum. With Colombian, in one of the regions where we are going to produce, 90% of the chrysanthemums of the United States come from this region. So we have those skills and this will be very, very helpful to develop the business. Trained people on the workers’ level but also trained people on the agronomists level, the way you build greenhouses. So all the infrastructure already exists and finally, we’re changing the flower.

Matthew: I saw some picture of greenhouse on your website. So you’re saying this is just a matter of taking greenhouses in Colombia that have already been used for the cut flower industry where the cut flowers are grown and then a lot of them shipped all over the world, but mostly to North America. You just pretty much take those type of greenhouses and growing environments and get them close to natural water supplies and grow at different altitudes, anywhere from 6,000 feet, I think you said, down to 1,000 feet, and you’re going to do that all over Colombia.

Dr. Stocker: It’s not as simple as you’re saying it but the basic concept is correct. What do we need to do? We are setting standards. PharmaCielo’s wanting to set standards in an industry that is evolving and an industry that is growing and developing. So we are part of the creation of this industry in Colombia. And, of course, we’re taking advantage of all this knowledge but we’re building the greenhouses in the proper wa,y adapted to what we need. We need also to comply with all the government regulations.

So the first hurdle is to get all those licenses and the next role is really also to ensure all the security you need to put on those facilities. It’s not simply using a greenhouse. You’re building using Colombian regulations. Let’s call it a high-security tract where you are not allowed to lose any of what you’re producing, any of the flowers and you also need to have a complete tracking of all the process. So it’s not as simple but the basic concept of taking advantage of this knowledge, adapting it to the cannabis industry is correct.

Matthew: Now, after the flower is grown in Colombia and I’m assuming you’re going to export it to Canada, but not exclusively? Are there other countries on the list where it will be exported to?

Dr. Stocker: We are focusing on the world. We are not focusing on Canada. We’re a Canadian/Colombian company. Our operations, as I said, are fully in Colombia, but we’re focusing on the world. We want to sell to every country in the world where it’s legal to sell cannabis oils and where it makes also sense for us from a business point of view. What do we see? We see the first market for us will be Colombia, then the rest of Latin America. The biggest focus there is Brazil because of the size, but we won’t leave countries out if it makes sense there.

Then, of course, we want to focus on Canada, on Australia, on South Africa and Europe. And every week I receive contacts from people around the world from countries that are evolving in a medicinal market and the health market that are approaching us to evaluate possible, distribution agreements. And so, again we are a Colombian/Canadian or Canadian/Colombian company, but we are focusing on the world. All these facilities and the extraction plant is going to be built to focus on the world cannabis market.

Matthew: That’s fascinating. It really is. How do you see the market for cannabis flower changing and maturing over the next three to five years? I mean, you’re taking probably the most comprehensive international approach that I’ve seen so far. There’s maybe just one or two others that really kind of have this big global vision on how the cannabis trade will operate, but even those competitors don’t have the ability to grow at the equator right now quite like you. So you’re in a good position I think, ideally. And your opinion of where the market is going is probably different from smaller producers, but I’m curious to hear what you think is happening and where you think the market will be three to five years from now and what PharmaCielo will look like then.

Dr. Stocker: The first thing that we see, and just is one of the basic parameters of our business plan, is that we will have a very strong regulated market. The market will become highly regulated in cannabis. We have a tendency of legalizing use of cannabis for medicinal and other purposes around the world, but this will become very, very highly regulated. So today, as of today, what do we see? We see even in developed countries that the consumer has no real guarantee of what he’s buying. What can be assured what he’s really getting for kind of a product? Maybe he’s using it for a medicinal purpose, but there are many side effects of pesticides, of other problems that…t the cannabis as it’s grown today that you’re not sure.

So on one side we see that we’re in a moment like we had many years ago when alcohol moved from prohibition to a legal market. And during Prohibition, there were no standardized products, there were no clear product definitions so everyone bought what was on the market. This is something that in some countries in the world can be seen also. And here I see clearly a shift that will go to a very very regulated market. And for this, PharmaCielo is prepared. We see, maybe you saw our board members that have this high experience coming from tobacco industry, coming from areas like the World Medical Association, that come from pharmaceutical companies. So we have a team of people that know how to handle this.

And for this is what we are preparing us for the next, as you said, three to five years where we see a highly regulated market and a market that will be very, very much controlled. And for this reason, we are also preparing PharmaCielo to become the leading supplier of standardized medicinal grade cannabis oil extracts. And our project, really, PharmaCielo, I always compare it with building the biggest surfboard so when the wave, the real big wave comes that we are ready. We want to have this biggest surfboard of the world so when this legalization of cannabis wave really is here we are ready to take it. And as of today, for example, we’re in the middle of a financing round, just preparing us for the next steps, where we have investors from around the world that really are as convinced as I am of this unique concept of PharmaCielo that will change and shape the cannabis industry in the future.

Matthew: I know it’s a focus of the company to maintain high environmental standards. Can you give us a little more detail about that? I know you have the greenhouses, and that’s definitely a way to save on electricity, but is there anything else you’re doing in terms of specifics that you would say emphasize sustainability?

Dr. Stocker: Now, this is a very, very interesting question and again, this is I think our biggest differentiator that we have compared with other cannabis companies. The central point here in the environmental issue is what you mentioned, the low energy cost or really no energy cost. But we are also using or planning to use for all the pests and all those problems, all natural products. For example, we are growing special crops outside of the property that trap certain insects.

We’re using kind of vacuum cleaners that can trap the insects you don’t want that can be a problem, but release the insects that you need for a natural environment. This is what makes our product really completely natural on this side. In some weeks, we are participating in a study that is being performed by the Global Footprint Network. This is a company based out of Zurich. They are the specialists in measuring global footprint, or the footprint of agricultural production activities and other activities, and they are comparing different ways how to cultivate and harvest cannabis. And so we’re comparing our model with a model in the northern regions, let’s say California, let’s say Colorado, let’s say Canada, let’s say other places in the world, and I don’t have still the results, but the first comments that we expect that it may be several hundred or several thousand times of difference on the footprint.

Why? Why is this the key issue? Because yes, you can have energy, you can have water, and this is clear, what I was seeing that using the pesticides and other maybe unnatural ways how to produce cannabis, this makes the biggest difference. I always say we are producing with open-air greenhouses in a natural environment, and in other places in the world it’s like producing on Mars or like producing on the moon because you have a closed environment, you have to generate the climate of a tropic, subtropic area with energy. You have then to try to handle all kind of pests, diseases in a closed environment.

So it’s not that we are much more intelligent. It’s simply we have a much simpler environment and natural environment. And I say again, how many of these people produce a certain part in the north or in the south of the planet, bananas or mangos or even flowers. You don’t do it. And this is the biggest differentiator that helps us really to make a key difference on the environmental impact and on the footprint area.

Matthew: Great points, and sustainability is I think going to become more of a topic not just for preserving the Earth but as fossil fuels become more expensive there’s a secondary benefit there of looking for ways to keep the input cost down. So it’s a win/win/win all the way around if you can make that happen.

Dr. Stocker: Yes this is exactly and this is the, I insist. the biggest differentiator and was one of the factors that really trapped me and gained me for this project.

Matthew: Patricio, I like to ask a few personal development questions to help listeners to get to know you a little bit. Is there a book that you feel had an important impact on your life or opened you up to a new way of thinking you’d like to share with listeners?

Dr. Stocker: There was one book… okay, there were several books that shaped my life, but there is one book that shaped my vision of Colombia very, very strongly, and it’s the book Cien Anos de Soledad-let me translate it, 100 Years of Solitude- from Gabriel Garcia Marquez, who was the Nobel Prize winner, or the only Nobel Prize winner until Santos received his Nobel Prize for Peace before. And this book really shows this diversity of Colombia, this magical realism. And maybe this book also showed me with all this confusion in a country with so many facets, so many different aspects that you have, why also it is possible within big difficulties to get the best things out of the people.

And here in our concept we really see here how in an environment that was not easy, how we can take all the good things, all the natural and the cost-efficient issues, the environmentally friendly issues that we’re taking out, and taking advantage to produce this cannabis. It’s a really wonderful book with a hundred stories. If you read it, probably you will start forgetting half of the stories when you finish it because it’s many generations of a family going over, and it’s a fiction book but I think it describes Colombia very well. What Colombia says is a magical realism.

Matthew: Great suggestion. Second question. Is there a tool, web-based or otherwise, that you consider vital to your day-to-day productivity?

Dr. Stocker: I think my day-to-day productivity is really moved to being connected. So you are anywhere in the world and through a little phone or a computer allows you really to be in touch with your team in Colombia, with the team in Canada. It allows me to talk to you. It allows to meet investors, to have conferences with our experts, potential distributors. So I think the biggest tool for me is simply the smartphone that allows me to be in touch. I remember when I moved to Switzerland in the 80s to study there I had to pay more than $5 for one minute of a phone call. Today, we have Skype or other different tools, you’re in touch with everybody for zero cost, more or less.

So this is really a tool that made it easy to bring the world closer again, to be in touch with people. Maybe you don’t write any letters anymore. This is the only sad thing about this but you can be connected very, very quickly and very easily. So this is a tool that helps me on my day-to-day basis.

Matthew: It’s a great point. Yeah, it was just a short time ago that it was so expensive for long distance. I remember that too. There’s the futurist, Peter Diamandis, that talks about how the world’s dematerializing, how we used to have a separate GPS device and a separate digital camera and now that’s all in our phone, so those two industries are kind of going away and they’re integrated as an app. It’s just an amazing time.

Yeah, I know I said I only had two questions, but I have a third question for you just because I am so interested in Argentina and what’s going on there. I followed when Cristina Kirchner was the president of Argentina. I just wanted to get your thoughts on the new president, Mauricio Macri and how you felt-- I think I got his name right-- but how you felt that transition was going and what you thought of the Kirchner legacy and the general direction of Argentina.

Dr. Stocker: Oh, first of all, you got the name right. And Mr. Macri is a pro-business person and he brought back Argentina into the financial markets so this, I think, is a first important step for Argentina. He is facing still many difficulties on the . It’s more of a political issue because he’s not from the party that normally had the power in Argentina, so he will struggle with this. But from my point of view he’s doing the right things. The people I have touch with constantly, they are positive. They see Argentina in a different way, and they’re believing in what is really developing today in Argentina. Mauricio Macri also pushed again all the agricultural sector that the former government didn’t want to push and I think Argentina is coming back to the basics and doing its homework and going the right route today.

Matthew: I have to say I’ve noticed a very positive attribute of Argentineans. I lived in Chile for a year and one of my good friends is from Argentina, and I said to him, you have an ability to get things done that I don’t see in other people. He said, you know, the reason why, Matt, is because you come from a system where the system generally works so you just have to focus on whatever it is you’re working on. But in Argentina the system doesn’t work so well so you have to be good on navigating the system that doesn’t work and then doing what you’re doing on top of it. Would you say that’s why Argentineans really have kind of a knack for getting things done, maybe compared to other places? I’m curious of your thoughts on that.

Dr. Stocker: I think this is true, because basic things in Argentina, like we were talking about technology, how easy it is in somewhere in the world to make a wire transfer from your computer or your cellphone or to get an ID, a passport or whatever. Such of those basic things in Argentina aren’t always as easy as probably in the US or in Canada or Europe. But what is interesting here on this side, and coming back to Colombia, and really after all of those years, Colombia is also Latin America, but I see Columbia at a different level of this development. And it’s not Europe, but finally you have many of those things that are so complicated or maybe so complicated in Argentina, like making an international wire transfer. Such kind of things Colombia always had been looking in the last years to support and to make it easy for foreign investment. So you have different countries, you mentioned Chile. Chile is a very much organized country in Latin America and it’s close to where Colombia is becoming today. Argentina still has a long way to go.

Matthew: Okay, great. Well, Patricio, as we close, what’s the best way for listeners to learn more about PharmaCielo if they’re interested in investing or just learning more about what you do?

Dr. Stocker: The best way is to go to our webpage, which is There you can find all our approach, many of the things I was telling you, and it’s also the way to make contact with us, to get in touch with us if you’re interested in participating in this unique business opportunity and this unique way to shape the cannabis business in the long run.

Matthew: Well, Patricio, thanks so much for coming on the show today and educating us. We really appreciate it. I forgot to mention you’re joining us from Toronto, Canada, so I hope you can make it down out of the winter in Canada and down back to Medellin soon. Thanks so much again for coming on the show today.

Dr. Stocker: Thank you very much, Matt. I’m very, very happy to be here on your show today and, of course, I’m just here in Canada to meet my main investors and also to remember every day to myself looking at the climate why we’re producing in Colombia.

Matthew: Good point. We could all agree on that.

Dr. Stocker: Thank you very much, Matt.

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) We would love to hear from you.

The 5 Trends That Will Disrupt The Cannabis Industry in The Next 5 Years

five trends cannabis industry

In this episode Matthew Kind the last forecasts he made in 2014 about the cannabis industry and then lays out disruptive changes that will impact the cannabis industry in the next five years. Considering how many Matthew got right the first time around, you don’t want to miss this episode.

Key Takeaways:
[2:10][7:45] Review of Previous Forecasts from 2014
[8:57] –   The First Trend Blockchain will Disrupt the Seed to Sale Tracking
[12:58] – The Second Trend, Boomer Cannabis Adoption of MIPs Soars
[14:16] – Third Trend, Dynamic Terpene Profiling,
[15:21] – The Fourth Trend – Intravenous Cannabis Oil Medications
[17:24] – The Fifth Trend – Autonomous Cannabis Deliveries

Read Full Transcript

Hi CannaInsiders. This is Matthew Kind. I’m going to try something just a little bit different today in that we are not going to have a guest, but instead I’m going to walk you through the five trends that will disrupt the cannabis industry in the next five years. So this was a paper I wrote a few years back. I think 2014, and it’s actually available still at www(dot)cannainsider(dot)com/trends, but I want to go through these, talk about them a little bit and then lay out what I think are five trends that will impact over the next five years. So let’s just get right to it.

So the first trend I outlined, and I think again this was in 2014 roughly, was a market focused on CBD was trend number one. Now CBD is everywhere all of a sudden so this one seems a little bit obvious, but at the time I wrote this it did not seem that clear that CBD would have such an impact. I think that this is a profound development that we have the compound of the cannabis plant that has a lot of benefits to it, but I think there’s other cannabinoids that will come to light that will have a lot of impact on our health and give us a lot of natural solutions that we didn’t have otherwise.

So I’m really excited about CBD. I’m glad this trend emerged and has somewhat overtaken the market, but again there’s over 480 natural chemical compounds known to the cannabis sativa plant. So only 66 has been classified as cannabinoid. So we have a lot of discovery left to do, but I am really encouraged by what I’m seeing with CBD. So actually if you go to www(dot)cannainsider(dot)com/reviews, I have a whole long expose on what is CBD that can give you a very clear examples and illustration and why it’s important and ways to think about it that you may not have been exposed to in the past.

Number two is robot assisted growing facilities. That was trend number two. Again roughly 2014 when I first started talking about this. So what’s emerged since then? If you listen to the last episode, we had Yoni Ofir on the show and he was talking about how essentially he has created a robot assisted microgrow facility called Leaf, which is a remarkable development. That’s more on a consumer scale. On the commercial grow it still really hasn’t emerge to a level I thought it would, but there’s still two more years left in that time horizon, and I think it will emerge.

We see companies like Grownetics and Smart Bee that are kind of analytics and automation, and I think the next level is going to be harvesting equipment and robots perhaps that can go up and down on a track and monitor plants, trim them, identify pests and so forth. I think that’s very very close. I’m going to keep that in the has not happened fully yet but still likely to emerge. And on the consumer level with Leaf I would say it’s there. So let’s move on to trend number three.

Marijuana infused products will become a big market focus. So again this is one of those things that falls into the category of yeah this is really obvious, but when I wrote this it wasn’t so obvious that this was… it was still all about flower. Flower was the thing and MIPS were gaining a popularity, but they hadn’t quite gotten there yet. I think with the Baby Boomers there’s a stigma associated with anything lighting or fire and smoke in cannabis that goes back to the Reefer Madness.

So for the Boomers this is very important, the MIPS and why a lot of Boomers gravitate to MIPS. Don’t want to generalize too much. There’s a lot of Boomers that don’t fit in that category, but I would say look for this to increase even more interesting and creative ways that cannabis is going to be infused into different products.

So on to trend number four CannaMedicine. Hybrid Cannabis Medications. I’m going to put this one in the hasn’t quite happened yet category too, but still a couple more years here. That could happen, and likely to happen. So we have cannabis medications and we have medications but we haven’t seen the two really fuse yet. One of the interesting things I see now is kind of these transdermal patches and sprays with different cannabis compounds in it. That’s really interesting because a transdermal patch is considered more of a traditional medicine, but you see it now for aches and pains and autoimmune problems and arthritis and so forth.

That’s kind of taking cannabis to more of a traditional market fit there. So that’s pretty interesting. I still think this one is going to come to fruition. What I was thinking here specificially when I wrote this trend was that perhaps there would be a cancer medication that helps with nausea that could be infused with an edible or something like that. That’s what I still haven’t seen. It might be out there. If someone has seen something like that, let me know, but that’s what I meant by more of a traditional medicine like an anti-nausea medication being infused into an edible that’s also infused with cannabis to maybe help stimulate hunger or something like that for a cancer patient while decreasing nausea. So if you see something like that, just go to the contact page of CannaInsider and let me know if you see a hybrid cannabis and traditional medication being infused together or combined in some way that’s interesting and compelling.

Wow trend number five, again, this falls in the category of this is obvious but trend number five was tipping point in cannabis acceptance, and man did that ever happen in November with these ballot initiatives. So what I wrote back in 2014 is that many cannabis enthusiasts think the tipping point in public opinion to support cannabis has already arrived. In fact just the first wave, the bow wave arrived. The visionaries and early adopters have moved in and are building the foundation for the second wave.

The early adopters are the foothold that will help the second wave adopters to see the light and enjoy the benefits of cannabis. So we definitely had that first wave of foundation builders. Now the second wave is just starting. So a lot of opportunity still exists for the entrepreneurs that are listening for sure. It’s still worth getting into this industry because there’s tons of Greenfield opportunities everywhere and there’s still a lot of states that haven’t legalized too. So don’t think it’s maturing too rapidly or anything like that. It’s still the good ole’ days.

Okay now let’s move into my five forecasts for trends that will disrupt the cannabis industry in the next five years. So starting here in 2017 and going out to 2021. My first one is that the Blockchain, the technology that has popularized BitCoin will disrupt the seed to sale tracking market for cannabis. So if you’re not familiar with what BitCoin is it’s an open ledger decentralized crypto-currency. It’s really amazing. If you’re not familiar with it, I would just suggest Googleing “What is BitCoin” because it’s a little bit outside the scope of explaining what it is on this podcast, but it’s essentially an open ledger crypto-currency that’s decentralized that requires consensus among decentralized computers to verify that a transaction has occurred.

One BitCoin, as I speak now, is roughly in the thousand dollar range, and just a few short years ago there was for a few dollars you could buy a BitCoin. It was amazing. You couldn’t do anything with BitCoin when it first came out, but now you can. Now you can send payments. You can do a bunch of different things. You can pay for things with it. It’s really quite interesting. So the Blockchain technology that BitCoin is based on is that decentralized open ledger, and this is very compelling because states want to see how cannabis and cannabis infused products move from cultivator to processor and then to retailer.

They want to track this whole thing and they want to do it in a way that makes sense for all parties and is cost effective. I think that we’ll see that with the Blockchain technology. The Blockchain technology is open, verifiyable and can be private or public. So a processor might get a sign day, certain number and when you watch the seed to sale tracking transactions take place from say a cultivator to a processor we can see this number transacted this amount of cannabis plants or ounces or pounds or kilograms and you would be able to see it right on the open ledger. So it would be kind of somewhat private, somewhat public, but public enough that the officials could see what’s happening and where things are going and who to hold accountable for what.

Another interesting aspect of this that’s just emerging now is something called a Theorium. A theorium is a Blockchain based smart contracts. It’s a clever way and cheap way for contracts that will be doing the same thing over and over again to be done via the Blockchain, a Blockchain like technology where, let’s say, a processor is sending a thousand 5mg cookies to a dispensary. The theorium layer of technology could make that very cheap, affordable, transparent and legally binding if done in that way. So I’m not sure if I explained that well, but again a Google search on what a theorium is will yield you a lot more details on that. So look for the Blockchain technology to disrupt the seed to sale tracking market.

Okay let’s move on to the next trend, trend number two. So the Boomer Adoption of Cannabis is going to soar. I focus so much on the Baby Boomers because they’re somewhat haven’t adopted like GenX or millennials cannabis as much. Certainly a certain part of the Baby Boomers have, but there’s a whole group now that’s graying as they get into retirement age that are going to develop more aches and pains and they’re going to be searching for natural botanical solutions and that’s when all these different entrepreneurs are going to bring to the table increadible edibles, topicals, sprays, ointments, tinctures and then those hybrid medications I talked about before that will help the Boomers ease the aches and pains of their aging years.

So I really see that as a huge wave, and even anecdotally over the last year two people that I know personally that I never thought would be open to cannabis that are in that age cohort are now very much open to it and are curious because they’ve gotten that blessing from whatever state they live in.

So onward to trend number three. This is one is a little bit unusual so stick with me. I call this Dynamic Terpene Profiling Integrated with Gene Therapy of sorts. So we’re seeing kind of a gene expression, epigenetics and understanding your unique genomic footprint. We’re seeing technologies that kind of map that and then we’re going to see the study of terpenes kind of be mapped over that or laid over that in a way that you’ll be able to dial in exactly the kind of experience you want in more of a scientific way. So it may seem like that’s far off, but we’re in the hockey stick exponential growth of some of these technologies and I really think that in five years this easily could happen. It might be in the latter half of the five years, but I definitely see that coming to pass.

Okay on to number four, Intravenous CBD Cancer Fighting. So you may have never heard of a gentleman by the name of Dr. Linus Pauling. He was a Nobel laureate. Gosh I don’t know how many years ago now. It was over 50 years ago, but if you get on Google and check out any of his work, he did massive studies on using Vitamin C to kill cancer and it was just incredible what he did, but it requires amazing amounts of a certain kind of Vitamin C taken intravenously, and I think just as how he had breakthroughs with that I think you’re going to see the same thing with cannabis and cancer fighting.

So you’re going to see people taking cannabis oil or cannabis in some sort of a powder or intravenous medium that they can take in huge doses to work with their cancer, whatever they’re suffering with from cancer. Now I’m not recommending this. Obviously I’m not a doctor so don’t listen to me essentially. Talk to your doctor, know that behind the scenes these certain corporate interests, not that corporations are bad, but certain corporate interests are trying to make holistic, botanical remedies outlawed or extremely heavily regulated. So talk to your state and local congressman and representatives wherever you can to try to prevent that from happening.

Okay, last but not least is Autonomous Cannabis Drone and Car Deliveries. So that is starting to emerge I think now, but I think with areal drones and also cars, cars will come to your house and you would put in some sort of ID. Maybe there would be a scan of your face or some unique identifier for your cannabis or infused product is released to you from this autonomous car. Maybe you even have to get into the car to verify who you are and then it’s released somehow, but I think that will come to. I think as more states… there’s so many states that are incredibly indebted and they have no way to get out of the black hole of indebtedness because unlike the federal government that can just print money and diminish the purchasing power of our current paper money system, the states can’t do that. They can’t print money.

So they have to either default or renegotiate their debt or look for new revenue streams. And as they look for new revenue streams, they’ll look for things they can tax and they’ll look for ways to grow their state GDP with more business. And states that probably wouldn’t consider something like autonomous cannabis delivery or wouldn’t consider having cannabis in their state are going to move towards it because they need the revenue so desperately. So the desperation will drive them to that. I think Illinois, California, New Jersey, New York, the northeastern states for sure will be in that boat. That might be later in the five year period, but they are in really dire straits in terms of their state budget debt.

So those are my five trends past and my current five trends that will disrupt the cannabis industry. Let me know what you think about it. Send me an email at feedback(at)cannainsider(dot)com. Let me know if I was clear. I know some of these concepts are a little bit nerdy and maybe even seem out there a little bit, but I would be curious as to your thoughts about it. Please do check out the Blockchain technology. It was kind of in a dormant period for three to five years I would say and it was just being used by techy people that were really into computers, but now it’s kind of crossed over and reached that tipping point and we can see major venture capital firms like Andreessen Horowitz investing heavily into Blockchain technologies.

So I hope that was helpful. Again shoot me an email at feedback(at)cannainsider(dot)com and let me know what you thought of this and also let me know what you think about the show in general and what you would like to hear more of on CannaInsider. I’m always curious as to what you like to hear more of and what you like to hear less of. So don’t worry, I have thick skin. You can tell me what you liked and what you didn’t like. And thanks so much for listening. I never thought when I started this in 2014 how many people would listen. It’s been an incredible outpouring and I really appreciate you for listening and telling your friends about the show. So thanks and I look forward to more episodes soon.

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) 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.