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Lars Meijer from Codema Systems Group shares how the top cannabis companies are using automation to radically increase efficiency and profit. Cultivators not thinking this way will be left behind soon.
– Mapping out the lifecycle of your plants
– Creating a workflow
– Building automation around your workflow
– How moving and flying tables enable efficiency
– Reducing input costs
See Codema’s Solutions Videos Here
Matthew: The lion's share of profit in cannabis cultivation will go to the producers that make top shelf cannabis efficiently while maintaining profit margins. So, how does a cultivator become more efficient? It starts with automation and process planning. Here to help us understand more about efficiency in the grow room is Lars Meijer of CODEMA Systems Group. Lars, welcome to CannaInsider.
Lars: Thank you. So now, I got to be a guest on CannaInsider. Matt, thank you.
Matthew: Give us a sense of geography. Where are you in the world today?
Lars: Well, our company is based in the Netherlands and in a small town called Bergschenhoek. And for most people more aware with the Netherlands is near Rotterdam.
Matthew: Okay. And I'm in Lisbon, Portugal today.
Lars: Oh, wow.
Matthew: Yeah. Probably a little bit sunnier than the Netherlands.
Lars: It is, yeah.
Matthew: Yeah. There's a lot of people from Sweden visiting Portugal right now. They said it's already like late autumn there. So they're getting their final sunshine in before returning to the Great White North.
Matthew: But I know you're in the Netherlands. Okay. So let's go here. What is CODEMA Systems Group at a high level?
Lars: Yeah. The CODEMA Systems Group provides automation every essential part inside the greenhouse. So this means for the cultivation systems, logistical side in the greenhouse, water treatment/irrigation, but also software for growers.
Matthew: Okay. And we'll get into the details of that in a minute. But first, tell us a little bit about your background, Lars. How did you get involved in this industry?
Lars: It's actually a quite funny story. When I was young, I studied to become a pilot. I am licensed. But in the past, it was very difficult to get a job in the aviation industry. But in, yeah, where I grew up in a notorious area called Westland, and that's a big part in the Netherlands with a lot of greenhouses. So when I was young, I also worked inside the greenhouses. And therefore, I really liked the business since I was already young. So that's how I...yeah, Instead of flying, I got into cultivation.
Matthew: Oh, cool. I guess there's a lot of similarities because there's a lot of checklists and details that have to be just right. And with what you're doing now with cultivation, there's a lot of details and things that need to be just right in order for takeoff of the plants to happen, a little slower process, but [crosstalk [00:02:48].
Lars: Yes, the growers are getting more and more sophisticated and more higher level than from the past. So, yes, there's a lot of similarities, yes.
Matthew: Well, let's go over how this type of automation improves things. Let's start with energy. How do CODEMA's tables reduce energy cost? And maybe before we do that, maybe just...I'm saying tables and you might say tables or containers, maybe just make a visualization of what you're talking about exactly when we were talking about tables, and why it's important for a cannabis cultivator to think about having tables or containers in their grow operation?
Lars: Yeah. I think, first of all for every grower, you wanna get the highest efficiency for your square meters as possible. And with our containers, that's what we call them, could be completely automated. And when you want a high-level automation, we can create it with containers. It can be moved automatically throughout the grow zone of the greenhouse or a multilayer grow zone. It doesn't matter. And our containers are like an aluminum frame and they can hold like a plastic bottom tray, which can be filled with water like an ebb flow system. So the water rises a few centimeters, and it flows out automatically of the container again. And this way, the crop on the container can retrieve its water through its roots. And there are, like, three options you can handle these containers: manually, semi-automatic, or fully automatic.
Matthew: Okay. And so they're kind of like manageable workspaces, these tables. And how big is your average table?
Lars: Yeah. Like it says, we are a custom-made company. So we can do whatever the customer wants but it mostly depends on the base size of the greenhouse. So for example in the base like eight meters wide, we usually take a container a little bit less than half of the base. So we get two tracks of containers inside one bay.
Matthew: Okay. Yeah. So you have these, I will call, manageable workspaces in the table or container, we'll just call them tables. And then there's a design automation where you plan out the whole seed cycle process, and these tables kind of move along like a conveyor belt or an assembly line in an auto manufacturing where the whole process has been thought out and these tables go where they're supposed to when they need to, sometimes even being picked up in the air and moved from one place to another. Do I have that correct?
Lars: Yeah, that's completely correct, yeah. And there are like lots of different ways to handle those containers. But, yeah, those are a few examples. Yes.
Matthew: Okay. Okay, now that we know what the tables or containers are, let's start with why they're important. And maybe talk a little bit about energy. How do CODEMA's tables reduce energy and cost, energy cost specifically?
Lars: Well, I think energy cost isn't the most drastic one because, of course, energy is very important. But those can be more being achieved through solar panels or other ways. And I think the reduction of our system...I think implementing our system is a reduction in the labor cost. I think this one is the most important one, because you don't want any employees or workers inside the grow area.
So handling the containers or, yeah, what you said, the tables or the moving working areas, they can just handle the...they can move inside the greenhouse by itself, and then they go to the work zone where the employees can work on the tables. So they can harvest, they can remove anything, they can clean the containers, and whatever. So I think the reduction of labor is the most important one.
Matthew: Okay. So reduction of labor, keeping people out of a working area is important because humans bring in spores, and bacteria, and all these different variables that are hard to plan for. So when you say labor cost is the most important, how do you walk through a prospective customer on, like, how much less labor they need once they implement a system like this?
Lars: It's very difficult to make it like a hard number. But sometimes, we try to make a calculation with the customer how many plants he is handling at the moment when he's doing it by hand or by a forklift truck. And then we calculate with our capacity how many plants we can handle with our system. And sometimes this may even triple the amount of plants he can handle. So that differs for every greenhouse, and every project, and we calculated each time again.
Matthew: Okay. Okay. So it's very customized. There's no one answer. Maybe, has there been a client in the last year that has told you how much they've been able to reduce labor cost, like any specific examples?
Lars: Yeah. He said, I think it reduces workers, which is hours for like 60% or 65% of his workers, yes.
Matthew: Wow. Wow. And not just that, it's just that it's so repeatable and predictable. When you give like a request to employees, "Hey, go do this, or this." Or, "Start to plan harvest," to do, or that, it's just not as predictable because all these things for human to human communication, there's a lot of things that are lost, interpretation. And when you boil things down to a physical automation process, there is an objective way of seeing how your seed to harvest is gonna happen in a very predictable way that takes some stress and anxiety out of the process, I think.
Lars: Yeah, yeah. And like you said, machines don't make mistakes because we program them the way we want them to work. So yeah, for example the plants are on the table and you always want like, for example, five centimeters apart of each other, a robot always does the five centimeters. And if an employee does it, it might be six centimeters, or four and a half, and it maybe doesn't give the right uniformity in plant growth. So yeah, that's totally correct what you were saying, yeah.
Matthew: Well, let's talk a little bit about error rate like you just mentioned, you know, getting the right measurements. What other measurements do humans make that are then replaced by CODEMA's system? So water, movement, what other things? What kind of measurements and error rate is there that you could talk about at all?
Lars: Yeah. So with our also the climate computers and automation of watering, you can always give the same amount of liters of water to every table. And whenever there's like an employee walking around with a hose, he has to count for himself and see with the eye. But that's never so precise as a machine. And that's the same for everything also with climate, temperature, also walking around inside the greenhouse, the employee might not be paying any attention, and he's walking against plants, it falls over, it breaks down, and especially with the cannabis plants they're really sensitive. So that's why you only want the robots, or the drives, the automation to move the containers around. So, yeah, to keep your crop safe.
Matthew: Yeah, okay. How about yield here? I mean, are you seeing increased yield after one of the systems is put in, or is it just more of a uniform yield because you're doing things in such a predictable, methodical way?
Lars: Yeah, I think it's a combination of both because, like I said, you can plan easy ahead because you know how many plants a robot or a system can handle. And an employee might differ because he's sick or he's not so feeling well on one day or the other. And I think also with the uses of square meters increases with our container system. For example, if you're just growing on the ground, you always need some walking space for your employees to walk inside the greenhouse and to work on the plants. Well, that's not needed anymore because the plants come to the working area, to the people.
Matthew: Right, right. That's hard for a lot of people to visualize. Like, "What are you talking about?" Like, these things are connected like on a conveyor belt, and the workers are standing there, and then a table arrives in front of them to do their work.
Lars: Yeah, yeah, it's fully automated. So it's just, you press a button or you sit behind the computer, and you're like, "Okay, this container needs to be harvested." And they're like, and I know two, three, four people standing on a position and the container or table steps by with the plants to be harvested.
Matthew: Wow. Okay. Now, what about if I want to add nutrients to the water for the roots to suck up, is there a way to automate that process too, or does it just have to be done at the water before it's delivered to the table?
Lars: Yeah, that's mostly in combination together with a water company. So yeah, you can store your clean water, you have a fertilizer, or a mixing machine which can clean the water as well, and that's all before it's transported to the tables, yeah.
Matthew: Okay, okay. And how do your systems work with the track and tracing of plants because it's really...you know, in North America, cannabis plants are like plutonium. They treat it like it's the most scary and harmful substance to society. And so everything has to be tracked and traced down to the tiniest detail, while you look at something like alcohol and you can just walk into any store and there's no safeguards, whatsoever, but somehow, this plant it's on lockdown. So what about the tracking and tracing because people are very interested in making sure that, you know, everything gets tracked and traced properly?
Lars: Yeah. I think we got a lot of questions from our current customers for the track and tracing. And in the past, of course, it was needed and it was asked for the growers. But like you said, for now in the cannabis industry, it's way more detailed than it used to be. And what we try to work with was with barcodes. So, in every table, so in every aluminum frame, usually there's a barcode. And in the PC, so in the PC control, you can see wherever the container has been.
So for example, in week five, it was located in bay five, and in week six, it's was located in bay four. And therefore, you can always see what happens to the container. So for example, one of the crop experts walk inside the greenhouse, and it's like, "Oh, wow, this batch isn't good anymore." He can just scan the container and sit behind this computer, and checks, "Okay, well, this isn't a good batch. Just remove it from the greenhouse," and this way, you can track and trace whatever happened to each plant.
Matthew: Okay. So that's software you said that, for example, the person sitting behind the computer, that software comes with CODEMA, with the whole system when you purchase it?
Lars: Yeah. Yeah, it usually does. We always ask the customer what he wants. If he has his own software, it's also fine. But yeah, of course, when you can place it in one company, the whole package, yeah, why wouldn't you?
Matthew: Yeah. Okay. And then how are the systems installed? Is that something that you do together with the customer, the customer does it, how does that typically work? How does that breakdown?
Lars: Yeah, differs per every project actually because each customer has his own wishes. Like, one customer has a lot of employees and technical guys. And he's like, "Well, I can do most of the installation by myself." But some others, they want nothing to do with it. So they just say, "Okay, you got all the responsibility and you have to install it." Well, and in most projects when we are overseas, we use local installation companies which have been working over decades. And so we know that they have our high standards. But in order to check everything, we always send a supervisor. So if we make an installation, for example in North America, then we use local companies to install the system. And then our smart guys for the electrics and the supervisor, they go ahead, and test the system, and check everything is done.
Matthew: Okay, that makes sense. Now, if a business owner was thinking they wanna have one person on staff that has the skills to maintain a system, an automation system, what's a good skill set to have? I mean, electrician fixing vending machines, a robotics engineer, mechanical engineer, what's the type of person, the skill set that's usually most helpful for maintaining these type of systems?
Lars: Yeah, I think you need two. So one mechanical, and one electrical. Those are the two most important ones. And usually when we are done with a project, we try to train two or three people who need to work with the system every day. So for example, like a company leader or one of the management's which has to work with the system every day, we train them as well.
Matthew: Okay, okay. And maybe could you talk about the most common application because there's a lot of growers that will be listening that they have anywhere from, let's say, a 500 square foot grow to a 5,000 square foot grow. And then there'll be some that have much bigger too. But what can you kinda tell them in terms of how this can really help their business, you know, and if they make the decision in the next six months? Because most people have to budget forward, go through the decision-making process. I mean, can you tell us what they get on the other side, what's the biggest benefit they'll feel?
Lars: Yeah, I think the biggest benefit is, like, you get the highest efficiency of your growing area. And for example, if you're just a small grower which is, like you said, a few hundred square meters, we also have other solutions. You don't need the moving tables around. We have lots of other ways for also small growers to increase yields, to raise up the plants so you can work on them with walking heights. And like you said, when you have a lot of square meters, well, then you do it fully automatic. So again, especially in a medicinal cannabis, you don't want a lot of people working, cross-contamination, whatever. So therefore, I think mostly the hygiene and the efficiency of the routing in the plants is the biggest benefits, yeah.
Matthew: Okay. And so when you're spec'ing out what system makes sense with a customer, what does that initial consult look like? How do you map the needs of the customer to then the capabilities of CODEMA systems?
Lars: Yeah, I think when we first start whenever we get a customer, or a potential customer, we ask a lot of questions. And then there'll be like 5 or 10 questions heading to 50 questions. So for example, "What's the floor gonna be like? How big is the greenhouse? What's your automation level you want? What type of crops? What's the crop cycle?" And I think we usually spend half a day just discussing with the customer. And then I go together with engineers, we make first draft of the drawing. Then we go back, I don't know, maybe two or three weeks after. And we have another discussion, so okay, maybe something has changed, he talked with another grower, and he wanted to change the cycle. And this way, depends on how much changes, we make a final plan. And whenever the final plan is ready, then we go into a quote, and etc.
Matthew: Okay. Now, is working with cannabis growers much different than working with the other type of indoor farmers you work with?
Lars: Yeah. It's quite different. Of course, it's...yeah, because it's a medicine and just like with vegetables as well, the hygiene level is way more important than we are used to. Our companies originated from potted plants, so like from the orchids, and other stuff, and green plants. And then a high-level of hygiene isn't very important. So that's I think the most different from our current customers. Yes, the hygiene levels, yeah.
Matthew: Okay. And are there any companies in North America using your tables now that you can mention?
Lars: Unfortunately, due to NDA's signed between us and the companies, I'm not allowed to mention any names. But what I can say is that there are few of the largest growers in the top 10 who are using and are going to use our systems in the future.
Matthew: Yeah. And I do know a few names myself. That's how you came on my radar. So there are some good ones doing that. Okay. Now, where do you see automation and indoor growing in the next five years going...where is it gonna go? Can you kinda tell us where that you think the future is? And I mention that because, you know, in talking to people from the Netherlands, it's funny, there is almost like a...everybody really thinks about cultivation or a lot of people do. You know, most adults I talk to from the Netherlands maybe because they see greenhouses everywhere just kind of have a low-level understanding, just everyday person of indoor growing, and so forth. And then there's, of course, a lot of experts there.
So I think the culture you come from is...you know, in Colorado, we say, "Oh, you know, people from the Netherlands, they're 10 years ahead in terms of their technology." And that's why a lot of times, they go to the Netherlands to try to get solutions. I think it's interesting how the cultures evolve that way. I think it's because...or maybe I should ask you why you think that is, is it because, you know, there's a ton of people in a very small area? And that area is below sea level. And there's just a lot of risk factors that need to be mitigated. So it's something that you're very aware of. Why do you think that is?
Lars: I think that that's a big issue, like we're below sea level, and we're a pretty crowded country here in the Netherlands, and we have always been a very picky or needy people, we're very critic, and also to ourselves, and to the food we eat. So we need food to be clean but it also needs to be good and you're not allowed to use any pesticide. So we're very needy as Dutches [SP] as well. And I think with the multilayer and indoor growing, it's still quite new. But for us, as a company, as CODEMA, it's not new. We've done it over decades. For example, in the tulip industry, we have done it's already several times with, I don't know, seven levels high of multilayer growing indoor.
And also for lettuce as well, we have done also seven-layer high with LEDs, etc. So for us I don't think it will change a whole lot, but I think the growers, they need to change their mindset and that the technologies for climate control that they are evolving really fast. So the lighting, humidity, air flow, I think that's where the evolving needs to take place in the indoor growing multilayer.
Matthew: Very cool. So everything is gonna just get whatever it is now, it's is gonna be more so. I mean, I keep on thinking there's gonna be a process where plants are, as they move through these tables, they'll be observed by cameras that can look for pests, and diseases, and recognize that, and then call attention to it through software or some other means, and maybe even predict that before it happens. So I think, you know, hopefully that's the way we're going. And then maybe even integrating automated trimmers right into the process, curing and trimming, all into the process. Now, I mean, a human has to intervene now, I imagine, you know, to cut the plant and then go through the drying and curing process. But do you see that all merging into one from after harvest to trimming, curing, all that happening in an automated way?
Lars: I think so. Yes. But it's not like it is already done by tomorrow. Just for example, take the bell pepper industry, and no one would have thought 20 years ago, that it'll be in robots, automatically harvesting bell peppers. And see now, I think you see one year ago there's robots automatically harvesting bell peppers. So I think there's an...of course, there's a possibility to automate everything. But I think for the cannabis it's gonna take a while because it's very sensitive crop and it's also very expensive. You don't wanna waste anything. So I think for now, people are a bit scared to automatically handle the plants and rather do it by themselves by hand. So just, yeah, to be more gentle with the plant.
Matthew: Yeah. Yeah. This automation is also kind of a consequence of higher and higher minimum wage. I mean, when companies see that the cost of the minimum wages are going up, they say it's better to invest in automation and save on those costs. Unfortunately, it's an unintended consequence of some policies in certain countries. I noticed in Europe, for example, whenever I go into McDonald's which is not that often, but I do like to just poke my head in and see what...and now, it's just all screens. You place your order on a screen at a kiosk and there's just no people, particularly you see that in France but elsewhere too.
Lars: Also in Netherlands, yeah.
Matthew: Yeah. And then a person does give you your food, but they've cut back massively. And now, if you go onto YouTube too, you can see that there's burger-making robots and machines, you know, work 24/7. So I don't know what the answer is and how we're gonna help reskill and retrain these people as they kinda get replaced. But I don't think those are jobs people really want to have anyway. So I think that's an opportunity to kinda bring them up to another level.
Lars: Yeah, I completely agree. And what you're saying with the minimum wage, that's why our systems aren't viable in every country. For example, in the past in Asia, their minimum wage was really low so they were like, "Well, why would we invest millions of Euros into a system when we can just hire a few cheap Chinese people?"
Matthew: Right, right. Yeah. And that's changing now though too. China is not necessarily a low-wage country at least in the big cities anymore, it's not, but certainly in the countryside, yes. So Lars, let's go to some personal development questions. I like to ask guests a few personal development questions to help listeners get a better sense of who you are personally. With that, is there a book that's had a big impact on your life or way of thinking that you'd like to share?
Lars: Yeah. I was thinking about it. And during high school, I had a special programs called IB, International Baccalaureate. So it's for Dutch people who want to improve their English skills and just continue with flow. We had to read a book, it was called, "Nineteen Eighty-Four," and was written by George Orwell. I don't know, have you read it?
Matthew: Yeah, very familiar with it. Yeah.
Lars: Yeah, yeah. It's just so amazing. It was written in 1948. And it just showed the thought of a possible totalitarian society in the future and how scary it may seem. It looks so accurate nowadays. Big Brother is still watching us. And technology is amazing, don't get me wrong. After reading that book, I now always think twice before I put something on the internet.
Now, let's move on to a tool. Is there a tool web-based or physical that you consider vital to your day-to-day productivity apart from CODEMA tables?
Lars: Yeah, apart from CODEMA tables, yeah. I have sort of a calendar at home. And I don't think it's very funny for you guys, but they're like with a lot of Dutch sayings. If you translate them into English, they sound really weird.
Matthew: Okay, let's hear one.
Lars: Yeah. For example, you have the English saying, "It's raining cats and dogs." Well, that's perfectly normal. If you translate the Dutch version, it's called, "It's raining pipe steels." And for us, it's like, okay, Het regent pijp staal, it's raining pipe steel. So for English, it sounds very funny. And also for example, "Maak dat de kat wijs." This is a very common Dutch saying, but it sounds really funny in English.
Matthew: What does that mean? I didn't catch that.
Lars: Make that the cat wise. I think it's like, if you say something and I don't believe you, then I'm like, "Okay, make that the cat wise."
Matthew: It is weird. It is weird how like sayings and expressions, you know, you just have to understand their meaning or it's just crazy. But then when you try to pick it apart and dissect it, it's like it really doesn't make sense.
Lars: Yeah, that's really funny.
Matthew: You just have to know how to use it in context. Well, cool. Well, great talking with you, Lars. As we close, I'm sure there's a lot of listeners that will wanna reach out and find out if CODEMA is a fit for their grow. How can they do that and learn more, and maybe watch the videos and see what the tables look like?
Lars: Yeah. I think it's first, you could check our website, and it's called www.codema.nl. It has a lot of videos. So also for our other projects all over the globe, for example in China, Europe, but also the states, yeah, there's also our contact information over there, in need of questions, so you can always email or call us. So our website is www.codema.nl.
Matthew: Great. And how do you spell CODEMA? Can you do that, just letter by letter?
Lars: Yeah. CODEMA is C-O-D-E-M-A.
Matthew: Okay. Well, thanks so much. I really appreciate it, Lars. Good luck with everything you're doing. This is really exciting time and just an amazing opportunity to streamline the workflow. I mean, I get tingly looking at an automated grow like this. It's just an amazing thing to behold. So I encourage people that have an inkling to move in that direction to check out CODEMA. And best of luck to you, Lars.
Lars: Yeah, thank you, Matt. It was an honor and a pleasure to be on CannaInsider. And good luck with everything as well.
The days of informal commercial cannabis growing are coming to an end as governments, wholesale buyers, and consumers want next-level growing standards that many would refer to as Pharmaceutical grade standards.
To tell us about pharmaceutical grade cannabis growing is Tjalling Erkelens Founder and CEO of Bedrocan.
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James Slatic is well known and respected pioneer and thought leader recognized by the Huffington Post as one of top five Cannabis industry movers and shakers. As the former CEO of Med-West, James led and grew to be a $12M a year California infused products company. James is an active industry advocate and has sat on the boards of the California & Nevada Cannabis Associations and the Marijuana Policy Project providing James with a deep understanding of regulatory markets and frameworks.
Listen in as James discusses his most recent move into automation and robotics in the cannabis industry.
See robotic automation video
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Matthew: Hi, I'm Matthew Kind. Every Monday, look for a fresh new episode where I'll take you behind the scenes and interview the insiders that are shaping the rapidly evolving cannabis industry. Learn more at cannainsider.com. That's C-A-N-N-A insider.com. Now here's your program. Robotic automation is making its way into the cannabis industry. Here to tell us about it is James Slatic of Todaro Robotics. James, welcome back to CannaInsider.
James: Thanks, Matt. Nice to be with you.
Matthew: Give us a sense of geography. Where are you in the world today?
James: I'm in Carlsbad, California, beautiful sunny San Diego area.
Matthew: Oh, that is a beautiful town. And I am in Lisbon, Portugal today. Tell me, what is Todaro Robotics at a high level?
James: At a high level, it's automation solutions for laboratories and biotech companies. We are specializing in laboratories that handle cannabis testing.
Matthew: Okay. This is really cool because it's finally we're starting to see some applications of robotics and automation in the cannabis industry. But it sounds like you're also dovetailing with some adjacent industries. I wanna dig into more of that. But first give us a little background on what you've been doing the last few years. I know you have had a run-in with the authorities on something and you've got a deep history in the cannabis industry. So why don't you tell us a little bit about that.
James: Sure. I started back in 2009. I stumbled into the industry and did packaging at popbottles.com and then that morphed into the V-pen business and O-pen and then I was a California licensee for O-pen and Bang and built a large distribution company and had 35 employeesMatthew: Yeah. Let's talk about what you're doing with robotics, and specifically, what's the problem that you're trying to solve with the use of robotics here? Maybe you can frame the discussion for us.
James: Sure. In any other industry in biotech and pharma, they would come up with automated solutions to the most repetitive and time-consuming tasks just because of efficiency and preciseness. Cannabis by its nature has been undercapitalized and as testing protocols have developed, it's been easier to throw say a technician at the sample prep part of testing as opposed to automated.
Matthew: Okay. So for a business owner or someone that might be in need of a system like you have, your automation system, can you describe what it would look like if they were looking over your shoulder and you are showing them how it works?
James: Sure. This is also... we have YouTubes on our website at Todarorobotics.bom. But basically, it is to automate the preparation of the samples. There are many things that are being tested. But if we were gonna talk specifically about flour, which most people are familiar with, it's going to take the sample and it's usually in a 50-milliliter conical tube and it's going to take that. It's going to put in some solution into it. It's going to agitate it with what's called a bead shaker and then it's going to pipette that into a... it's called a 96-hole plate. And then it's gonna barcode that and have that ready to go into the actual testing equipment whether it's a high-pressure liquid chromatography or gas chromatograph. So it's a sample prep system.
Matthew: Okay. Is this being used a lot by... or the idea being welcomed by brands that say, "Hey, wouldn't it be great if we could do some testing preliminary before we even send it out to a lab?" Because a lab is really just something for government officials or for the public to see like, "Hey, we have a third party in between us that verifies." But it's nice to know where you stand just in-house. So is that...or are you seeing labs welcome this where the labs are the ones doing this all day long?
James: The testing is mandated by state law. You have to use the third-party lab. Our systems which start at about $200,000 are more geared for commercial testing labs that are doing large volume of samples. So even a large edible manufacturer, they might be doing a preliminary test to see what things are on potency and so forth. There are other ways to do that to get sort of some preliminary data. Ours is for real sort of high volume and needing very precise measurements. So ours is more geared for the commercial market, which is between Canada and the United States, is probably about 100 testing labs right now.
Matthew: Okay. And for listeners, I'll put a link in the show notes for this video so you can see how this works. But essentially, it's like an articulating arm that's moving around taking samples and putting in places. James, you mentioned about a 200K initial investment. Where's the ROI come in for, the return on investment come in for a business owner or a lab or a brand that's looking to invest in this type of thing? How do they kind of pencil out how they make their money back?
James: Well, that's a great question. And the reason, there's two really sides to it. One is the cost and the other is the time. At best, we can estimate there's gonna be about 350,000 tests needed this year in California. And the license testing labs now in California, which I believe the last time we checked, there were 33 licensed labs but only 21 operating. They only had the capacity to do about 150,000 or a 175,000 tests, so roughly half of what we're projecting or needed to just support the California cannabis industry.
So we went to the regulators and said, "Hey, there's not enough labs and these tests are required. How are they gonna get them?" And they looked at us and they go, "Yeah, we don't know." And so we see that there's a real capacity issue. So a regular technician doing a sample and grinding it up and pipetting it and putting it in a plate and bar coding it and weighing it and doing the steps necessary, you know, they can do maybe about five to seven samples per hour sort of at best. The robot can do about 50 samples an hour.
So just from a capacity standpoint, it's a productivity tool that heretofore the labs have just thrown labor at the issue of getting samples ready because the machines themselves, the actual testing machines, they can handle quite a bit of volume. But getting the sample ready to go into the machine is really the linchpin of capacity. So having 10 guys sitting there on tables grinding samples and putting them in solution and pipetting them into the arrays to be tested has been the...besides the other things, which is it's kind of grunt work so to speak and people get repetitive stress injuries and it's actually they tell me the least desirable part of the lab work that people are least enthusiastic about doing.
Matthew: Yeah. And can this be done then with no humans there like say throughout the night? Can you leave the robot running or how does that work?
James: Yeah. So could you do it? No. The nice thing about it is you would have one person here. You have to sort of load it and you would actually have to take the trays at the end and put them into the next part of the daisy chain. But let's say you're working a dayshift and you had 10 guys working versus having the robot running all night. You could say have one person that was checking it, moving the trays to the HPLC or the other part of the thing or loading the cannabis for the next batch of samples. These things do run 24 hours a day. And as the CFO for one of the lab companies said, "We love the robot because it doesn't call in sick and doesn't mind working weekends and holidays." There is that efficiency side to it. I don't think it's designed to work autonomously. Its procedures are. It needs to be sort of loaded and unloaded.
Matthew: Okay. Yeah, you could probably reduce turnover somewhat here too because people don't see much future in just doing that type of labor. It's kind of grunt work. I remember in high school stuffing envelopes and doing things like that and like you go into like a quasi, like a twilight sleep just doing it because it's so repetitive.
James: And the other thing is that the repetitive side is also where your mistakes and your imprecision come in. The robot does it exactly the same way every single time. There's no variance. And this is used in DNA and all sorts of very precise things. It can do a level of quality and exactness that is really not replicatable by a human. So that allows the protocols and the measurements and the TQM procedures or whatever to be done and documented at a very high level. So this thing doesn't get sleepy and put in an extra half a milliliter of solution or something like that. It's very precise. And as we do these volumes of testing and the results being so critical for sales, you know, if you were to mess up a test and show somebody positive for a pathogen or something under many of the state's laws that the product has to be destroyed. You're really talking about a very high-value product and you wanna be as precise as possible.
Matthew: So how long does it take to get the robotic solution kind of programmed and ready for the specific use case of a lab? I mean, you're already working with some customers so I guess it's just kind of customizing it a little bit. But how long does that take from taking one of these units and putting it into a lab type setting before it's ready to roll?
James: Well, the installation and training part is about seven days. So we usually do like a Monday through Friday. We do what's called a factory acceptance test. We get the unit installed and start running it, that it's getting the measurements that everybody's agreed to and what we call the statement of work, the labs measurements, because what we have found is that everybody does it at least slightly different. And so the way that we actually handle the samples has been different for each person. So it's about a week inside. So from the ordering, it's about four to six weeks for us to assemble and get the various components in. Put it together in our San Diego facility then shipping and then about five to seven days there, which two days would be training of the personnel on site.
Matthew: And what about maintenance? Is there routine maintenance and what does that look like?
James: Yeah. So these system are unbelievably robust. My partner, the technical guy, Tom Todaro is the former chief robotics company for a biotech company here. He's been doing it about 20-25 years. And he tells about robots that he's had that have worked 24 hours a day, seven days a week for eight years without maintenance. So these things are unbelievably robust. Yes, things can happen, but they are not maintenance intensive.
Matthew: Okay. And how about financing because I know for some businesses, that $200,000 is a big chunk to swallow. What do you have to say there?
James: Yeah, that's something that could be done over time. But we still have this issue that when we're going to CannaTech Solutions or whatever, people are reticent to provide financing, banking and all the other problems that we know about cannabis. So right now, we're doing a 50% down, 25% on shipping and 25% on signing off the site acceptance test. So right now, you have to have your own ability to finance, which most of these labs have been doing it with outside investors.
Matthew: Yeah, I was gonna say there's an opportunity there for someone that wants to provide maybe some higher interest rate type of financing. I could see where that would be attractive to certain accredited investors perhaps.
James: I think it is a good idea. We've seen this in the extract business that people will finance, you know, CO2 machines or alcohol extraction machines or qualified companies. And they just provide a higher interest rate sort of private financing for these. And we have seen that going on.
Matthew: Yeah, because it's a little different there because it's collateralized with the robot.
James: Actual machine, yes.
Matthew: Yeah. Okay.
James: Yeah, the machine itself has got a lot of value just in the equipment.
Matthew: Have you tinkered with the idea of like creating a machine that could maybe give you a shoulder rub or something like that?
James: Well, it's certainly a variable machine. So let's just say it does lend itself well to some good joking around the office.
Matthew: Okay. And how do you see the robotic solutions helping the cannabis industry more in the years ahead and even outside of lab testing?
James: Well, there are so many other applications. So whether it's cultivation, we've spoken with some of the big clone manufacturers and then we've also spoken to some of the companies like Phylos Biosciences and Rev Genomics that are doing a lot of genetic research and marker-assisted breeding. These are things that need very precise, very measured tests, and even output. So we expected it to kind of dovetail into the general growth of the cannabis industry and to other scientific applications. Right now, those are in small volumes to where they're only doing 20 a week. They don't need a 2 or $250,000 robot. But once they're doing 200 a week or 2,000 a week, then these type of automation systems, you know, it's just part of the general evolution. When I got into packaging, people were vending their cannabis at dispensaries in baggies or all kinds of stuff. And we came up with professional packaging. And it wasn't really prolific back even 10 years ago. And so just like this industry in general, you're going to see it absorbing the methods of what's gone before them, which is pharma and biotech where they look at an automated solution wherever possible.
Matthew: So I just wanna circle back. You mentioned Phylos Bioscience, and so they do genetic research and also gender or sex, they test the sex of plants, I believe. And so something like that you're saying like perhaps tissue samples of a plant for the cannabis biome type projects and also for perhaps even the sex of a plant. You think that's a possibility?
James: Oh, absolutely. All you have to do is go into the pharma side of the industry or biotech, with San Diego as a big hub for that and you see all of that being done with robotics. We're going to be the same thing as the industry goes from the roughly 7 billion that it is now to the reported 20 billion over the next two or three years, all of those ancillary supportive. A lot of these companies are raising money. A lot of the Canadian pubcos are investing. One of the big lab companies in Canada, Anandia Labs was just purchased by Aurora Cannabis, the second largest public Canadian company. And so they're investing hundreds of millions of dollars into the technical side of cannabis. And so you just see that proliferating, not just in here in North America but also in Europe and South America.
Matthew: I think one of the leaps that might be coming next too is you can create...you can have a camera, a high-fidelity camera and look at flower as it goes by, connect that to an AI algorithm that looks at flowers, looks for patterns of mold ,or even just organizes flower by premium flower versus non-premium flower, over-cured flower, and then the robotic arm moves these things into different batches as they pass by. So it's kind of combining the AI, machine learning, pattern recognition with the robotic arm. I can see those things, that mirroring happen too.
James: Oh, absolutely. The whole AI world, machine learning AI world is changing all of our lives and it's going to do it in this industry as well. That's like almost a whole another discussion to get into where that's gonna go. I mean, I heard yesterday of a grow being done in Canada that's 800,000 square feet. Now you're getting things into the size and scope where you're gonna have to do automation. Some cultivators have already talked to us about sort of robotic systems that will go down sort of from a gantry almost down their line of plants and do things like that, infrared photography of the top of the plants and getting data points and so forth. You know, because of the high value of this crop per square foot, you're gonna see that more and more. I mean, these investments are just unbelievably big. So you're gonna need to support it with the technology.
Matthew: Yeah, it's really fascinating. You're a serial entrepreneur. You started a lot of businesses and had a lot of success. I mean, this is obviously a really interesting project. At the same time, if you had to do anything else in the industry and couldn't be involved in robotics, I'm sure in the back of your mind you're like, "Oh, this would be a good business. This would be a good business." They probably just fall out of your pocket all these ideas all the time because you have a good vantage point on the industry and a very entrepreneurial mindset. What kind of businesses do you think are gonna thrive in the years ahead either ancillary or even touch the plant?
James: Well, I'm involved in other companies and cannabis besides robotics. And one of the areas that I really like now is what we call the special events side. And I'm an investor, an advisor in another company called Regulated Solutions, and it has a special events license and is partnering with concert promoters and music venues to provide sort of the beer garden concept of cannabis. This has now been allowed by a new law here in California called AB 2020 that just passed and is on the governor's desk for signature now. So imagine going to your...say we have this festival coming up here in San Diego called KAABOO this weekend, imagine a tented-off area for 21 and over where instead of having Corona beer, you have say five cannabis brands and you're able to be educated, learn about them, be exposed to them, purchase and consume cannabis products just at a concert venue, so no more sneaking in your joint in your sock. You can just come in and enjoy adult-use cannabis just like regular people in this adult-use legal market.
Matthew: Yeah, I've actually used the shoe technique myself a few times in the past. I'm glad.
James: Who hasn't?
Matthew: Yeah. You think, "Oh, this is such an original idea." It's like, no, it's not original.
Matthew: Well, James, I wanna ask a few personal development questions to help listeners get a better sense of who you are personally. Is there a book that's had a big impact on your life or way of thinking that you'd like to share?
James: Well, I'm a meditator so I picked up the book by Paramahansa Yogananda "Autobiography of a Yogi" many years ago and along with people like George Harrison and The Beatles and so forth that had been transformative to me. That's something that I started meditating and espousing this type of philosophy. So I'd recommend "Autobiography of a Yogi" to anybody that want to sort of look at the other side of life and consciousness.
Matthew: Yeah, that's interesting. Did The Beatles go visit, was it Ramana Maharshi? Do I have that right or it is the one that you just mentioned, the gentleman they want to go visit in India?
James: No, they did go to Ramana Maharishi in India. Yogananda had left his body off when the Beatles were little kids way back in 1952. So he wasn't available to visit with them at that time.
Matthew: Okay. I've, over the years, looked at YouTube clips of Yogi's and see translations where they talk about it. And it almost seems like universally, there's this idea that were this reality or is not. It's like a projection or something like that. These really enlightened beings seem to say that. And then we have Elon Musk on the Joe Rogan podcast recently that said kind of a simulation theory as well. Do you ever get into the deep states of meditation and ponder things like that?
James: Well, I've been meditating for about 30 years. They call it practicing meditation for a reason. It's like the rubber band that can be stretched to infinity so you never go. Certainly, at times, you will get into a state where you really are 100% convinced in the heart of mind and soul that the senses aren't giving us the truth that there is something deep, something eternal, something beyond this physical body and our five senses that maybe some people would call the soul or the inner being and you can actually do techniques and see that light of the spiritual eye. When you see that or you hear the great Om vibration or the Amen in Christian religion, when you do that, then you're pretty convinced that there's something beyond these little bodies and our day-to-day lives.
Matthew: That's cool stuff. Is there a tool you consider vital to your productivity you'd like to share?
James: Well, I'm as low-tech as they come. So the only thing that jumped out at me is that I recently switched over from 18 years of the hell of Verizon to Google Project Fi. So my cell phone, my internet, everything has been switched over and I'm paying $30 a month instead of $180 a month. And I'm getting better service and quality and then last month I got a $20 referral bonus for referring a friend. And so my monthly data phone, everything was 10 bucks. As an entrepreneur, the fact that I'm saving like $2,000 a year and with a better thing, I thought that was kind of...our tech guy here at work said, "Hey, you should try this." And I did and it's been really, really good. So, Google gets another feather in their cap and I was able to tell Verizon to get lost.
Matthew: Yeah. In the circles I run in, that Google Fi is really popular too because you can go anywhere in the world without roaming charges. Did you know that?
James: Well, that's the reason I left Verizon as I went to Canada, and I even had the international plan and they still gave me $397 worth of international charges. I was like, "Wait a minute. This was supposed to be in my regular plan," and took hours and hours on the phone and they wouldn't take the bill off. They just have these duopolies and there's just no other choice. And now Google has given us a choice, and I was very happy to make that switch and it's been working out well.
Matthew: Well, that's great. That's a great suggestion. I encourage more people to do that because we need to give AT&T and Verizon the message that that model is not really friendly anymore.
James: Boy, I'll say.
Matthew: Well, James, thanks so much for coming on the show and telling us about robotics in the cannabis industry. That's really a fascinating subject. And when you have more applications, feel free to come back on the show and tell us more. And before we close, can you tell listeners again how to reach out and connect with you if they're interested in robotic solution for their business.
James: Sure. Just go on to our website Todaro, T-O-D-A-R-O robotics.com and take a look and hit our Contact Us if we could be of any assistance and we're happy to talk to you.
Matthew: Thanks, James. 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 cannainsider.com/iTunes. What are the five disruptive trends that will impact the cannabis industry in the next five years? Find out with your free report at cannainsider.com/trends. Have a suggestion for an awesome guest on CannaInsider? Simple us an email at firstname.lastname@example.org. We'd love to hear from you.
Please do not take any information from CannaInsider or its guests as medical advice. Contact your licensed physician before taking cannabis or using it for medical treatments. Promotional consideration may be provided by selected guests, advertisers, or companies featured in CannaInsider. Lastly, the host or guests on CannaInsider may or may not invest in the companies' entrepreneurs profiled on the show. Please consult your licensed financial advisor before making any investment decisions. Final disclosure to see if you're still paying attention, this little whistle jingle you're listening to will get stuck in your head for the rest of the day. Thanks for listening and look for another CannaInsider episode soon. Take care. Bye-bye.
Andrew Duffy attended Harvard then went on to work for the most successful hedge fund manager in the world (Ray Dalio). Ready to start his own business Andrew and his co-founder ditched the cold New England winters and moved to Colorado to start Best in Grow, a platform that brings budtenders, brands, and dispensaries together in one place online.
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Getting the word out about your cannabis product to the most important people in the cannabis industry can be a big challenge. Today's guest is working on a platform that brings budtenders, brands, and others together in one place online. I'm pleased to welcome Andrew Duffy from Best in Grow on the show today. Andrew, welcome to "CannaInsider."
Andrew: Matt, it's an absolute pleasure to be here. Thank you so much for having me.
Matthew: Give us a sense of geography, where are you in the world today?
Andrew: I'm coming to you live from beautiful Boulder, Colorado.
Matthew: Great. And I'm in Lisbon, Portugal today. So, tell me, what is Best in Grow, at a high level?
Andrew: At a high level, Best in Grow is one part slack built for dispensaries and employee management tool that helps teams communicate. It's one part Facebook built for cannabis professionals, allowing all those teams to communicate even across businesses, between dispensaries, between brands. And it's one part powerful data analytics engine. We take in data from all the interactions that we see on the platform and the information that users of the platform provide to us, and use it to help brands create better products, sell them more effectively, and market them more efficiently. And it's all rolled into a single web, Android and iOS application, to help all of these businesses succeed.
Matthew: Can you share a bit about your background and journey and what prompted you to start Best in Grow?
Andrew: Absolutely. So I grew up in Washington, D.C. I went to Harvard for undergrad, where I studied behavioral economics, decision science, psychology, and vowed never to spend another winter in the northeast. So after graduating...
Matthew: [inaudible [00:01:52].
Andrew: Yeah, exactly. After graduating, I went on to Bridgewater Associates, which is the world's largest hedge fund, where I was a risk analyst, did some machine learning projects, had a number of roles there. And it was a really unique, awesome, challenging environment, learned a lot. But ultimately, one of my closest friends from Harvard, who was also working in finance and private equity, decided that this was not the life for us. We didn't feel like we were making an impact, and we didn't feel like we were in the right industry to make the type of impact that we wanted to. So we packed up a car, moved to Colorado, and decided we're gonna dive headfirst into cannabis, we're going to figure out exactly what's going on in this industry firsthand from the people who know it the best.
So as you can imagine, that conversation with my parents was a tense one, telling them that I was leaving my job at the world's largest hedge fund to go sell pot. But ultimately, they were really supportive. And I came out to Colorado, and have been so, so happy about that decision.
Matthew: Well, you kind of just glossed over there, but Bridgewater and Associates, you know, arguably the most successful hedge fund in history based in, I think, Westport, Connecticut now, right there on the Long Island Sound, a cute, little town. And Ray Dalio, the founder, is kind of going and making his way around the press right now about his book, "Principles." And he has a very unusual way of conducting businesses. People who have heard of him probably know, like, he wants to flush out the truth or the best idea regardless of how uncomfortable it is or where it comes from. Can you just talk a little bit about that methodology? Because it's a little bit unorthodox but obviously effective.
Andrew: Absolutely. Yeah. So I worked actually directly for Ray on his research team for part of my time there, so I have a very hands-on, in-person experience with how he operates, as well as how the whole company operates. But broadly, what I would say is the defining phrase of that whole methodology is just rip off the band aid. A lot of times in a business environment, a lack of open communication or transparency or willingness to tell people how things really are will result in problems down the road that will make things even worse. Someone who has been stuck at the company for six months who should have left six months prior because no one was willing to tell them they weren't doing a good job. And ultimately, I really, really liked that system of management. I really enjoyed my time there because it taught me to be much more open, it taught me to be much more willing to discuss my own flaws and the flaws of others. And ultimately, that supported everyone around me and it supported me to a significant degree as well.
So, while people from the outside have a lot of fear of that system, once you get used to it, and once you put aside your ego a little bit and get away from the idea that being criticized is a bad thing, you can really make some big strides with yourself and the people around you if you can effectively embrace that. And part of that is what informed what we're doing with Best in Grow, creating a platform that allows people to communicate, give feedback, and effectively make sure that their teams are operating as efficiently as possible all in one place.
Matthew: So, how does this contrast to the, you know, snowflake trigger warning, the right to not be offended group that you had probably at the social-justice-rich Harvard, to coming into Bridgewater where you don't have a right not to be offended and people are gonna talk to you frankly and directly? How did that contrast feel, and did all of your colleagues, were they able to survive that?
Andrew: Absolutely, yes. So survival at Bridgewater really depends on whether you fit at Bridgewater. If you don't fit at Bridgewater, people will tell you, and ultimately you'll know it. So you'll either leave or be fired before it becomes too much of a problem.
In terms of the sort of snowflake mentality and the right to be offended, there are a lot of really intelligent people at Bridgewater and very reasonable people at Bridgewater, and I think that's the key. If you're operating with people who are intelligent and reasonable, and with whom you can have a great discussion, there is really no need to be offended at any time. Anything that someone says, you can always counter with a logical argument. If you give them a good argument for why you believe the thing that you believe, then they'll be willing to believe it too. That's the whole idea of the idea of meritocracy, is that the best ideas rise to the top, but you are required to tell people why your idea is the best. And so I think how it really differs from that mentality of, "I have the right to be offended and believe whatever I want," is that you have to justify every belief that you hold. And that's a way of being that I like to espouse in my life, and I think everyone should espouse in their lives because taking a real hard, solid look at what you believe and why is the only way to make sure that you believe the things that you truly believe. It's very easy to get caught up in ideas that you don't necessarily feel to your core if you can't even explain them to yourself. So Bridgewater really brings that out in people.
Matthew: Yeah. And there's a famous quote around the man that has or a woman that has principles doesn't need tactics, because principles are adaptive where tactics can, you know, be destroyed and overturned. So Ray's founding idea of having principles is pretty interesting and one that I've been attracted to and kind of heard him on a few different podcasts and watched his 30-minute [inaudible 00:07:28]. But we'll jump off this idea. I'll include in the show notes like a 30-minute YouTube overview of his ideology and methodology. And he has such incredible results that speak for themselves. It's worth looking at.
Andrew: Absolutely. Yeah, I'd recommend to anybody listening to give "Principles" a read. It's a really interesting book and can help you, even if you don't agree with all the things that Ray has to say, find what your principles are and determine how you wanna live your life as a result.
Matthew: So tell us a little bit about the problems that you're trying to solve for each group of people, budtenders, influencers, dispensaries, and brands with your platform.
Andrew: Absolutely. So with budtenders, our goal is just to make their lives easier. They work hectic jobs, they work long hours, they get paid low wages, and they need a massive amount of information at their fingertips daily to be effective. They need to know how to be compliant with the regulatory restrictions that they operate under. They need to know a huge swath of products and all the information about those products so they can recommend them effectively. And they need to have great customer service skills. They need to be able to help people find the products that they want, even if those people don't understand cannabis or haven't tried cannabis before. So our platform is designed to do just that. It gets them all that information right at their fingertips, both by aggregating information that the dispensary has about any of those products or any of those techniques, or allowing them to communicate directly with brands at the point of sale. They can just type in a question to a brand if a consumer has a question for them that they don't have the answer to.
And we really see budtenders as the biggest influencers in the industry. Ninety-two percent of consumers take the exact recommendation of the budtender when they walk into a dispensary and make a purchase. Ninety-two percent, that is a massive, massive number.
Matthew: Yeah, it's your trusted friend. It's your cannabis Sherpa.
Andrew: Exactly. It's your spirit guide. It's telling you exactly what you need to do to have this highly, highly experiential product be the right one for you. So managing that whole process and helping budtenders solve the problem of their very difficult job is a huge part of what our platform does.
And then taking that up a level to the dispensary, we solve the problem of workforce managing. Managing budtenders, given how difficult their jobs are, is a difficult task in and of itself. Dispensaries have to train new budtenders all the time, turnover is very high, they need to make sure that budtenders at different dispensaries are on the same page and able to provide the same customer experiences. And right now, they need to use 10 different software platforms to do that, be that Slack, email, text, or any number of other cannabis ancillary software platforms that they're using in their dispensary at any given time. So what we do is help the tip of the spear, the manager of multiple dispensaries or even just one dispensary, manage their entire workforce in a totally effective way while also allowing them to integrate multiple software platforms into Best in Grow. So we have a very, very open and easy API to allow other software platforms to integrate and display right in our platform, making a single sign-in for dispensaries that are tired of using 10 different products every single day.
Matthew: Okay. So consolidating different communications channels, influencers. What about the data you collect? What kind of data is gonna be collected?
Matthew: And why is it important?
Andrew: Yup. So that data is really how we solve the problem for the brand. The brand's problem is the budtender. Brands see budtenders as obstacles, as people who are potentially misrepresenting their brand or not necessarily pushing their product when they think it would be perfect for a particular consumer. But we see budtenders as potential advocates, people who can provide information to brands to improve their products and make those products the things that budtenders want to sell and want to recommend. So a big piece of the data that we gather is feedback from budtenders about the products that they are or aren't recommending, giving brands information about why they aren't recommending them or are recommending them, meaning that brands can improve their ability to make products, can improve their ability to communicate with budtenders, and any number of other things that are important to their operations.
But more broadly, we really care about collecting data that makes products more understandable. We want to know all of the attributes of a given product and whether those attributes are positive or negative. Right now, the only data sets in the cannabis industry are ones telling you how much this brand has sold or how much this particular skew has sold, but what we wanna know is why. We don't want to have just a trailing indicator of what sales were. We want to have a leading indicator of what sales will be, based on what attributes you build into these products. So by gathering information from the point of sale and from budtenders and from the internal operations of dispensaries, we're not only able to improve the efficiencies that happen in the retail environment itself but we're also able to make sure that brands have total visibility into that process so that the differentiation that's enforced by the regulatory barrier between brands and dispensaries is limited, and can be a much, much lower fence to allow everyone in the industry to communicate and everyone to kind of raise all boats with a rising tide.
Matthew: Okay, and who pays for the platform, and how much do they pay?
Andrew: Yup. So dispensaries pay a nominal monthly fee, works out to probably two or three dollars a day. We know that dispensaries are cash-strapped, they have tiny margins, so we don't really wanna put any more financial burden on them. Brands are primarily our monetization stream. They pay $300 a month and up, depending on the feature set they want and the swath of data that they're looking for. But right now, we're actually offering the platform as a free trial for the rest of the year through December, to help brands and dispensaries get a little bit of a look at it without too much risk to them.
Matthew: Okay. And so, you're right, budtenders are huge influencers, and they can be like your sales team if they understand your product and speak about it intelligently and recommend it. So how do you get samples in front of budtenders so they can play with it and give you feedback and let you know what they like and how they're gonna position it?
Andrew: Absolutely. So, an effective sample process is all about the method of intake of the information, creating accountability after that intake, and then creating habits after you've created that accountability. So, first is intake. You want to minimize the barrier to entry for a budtender to give you feedback on any given product, be it a sample that has been sent to the dispensary by a brand managed by us or any product that they consume at any time. We wanna make sure that. And they can, through our application, upload their feedback as easily and quickly as possible, be that through a standard survey or uploading a short video review or simply typing in their thoughts as they consume it. So we make it as easy as possible for them to provide feedback and give the information that brands really wanna hear and need to hear to understand why budtenders do or don't like their products.
And then beyond that, we create accountability. So right now, there is no accountability in the sampling processes that we see in brands and dispensaries. So brands will send out 10 units of product to a particular dispensary and then they have no visibility into what happens after that. It could be diverted by the manager to have a little bit of a treat for their friends. It could be distributed to the budtender and get no feedback, or it could just go straight into the trash. They have no idea what happens. So we create a tiered system where at every step in the process of the sample being distributed to the dispensary, distributed to the budtender and consumed by the budtender, there are points at which they have to confirm that they have received that product or consumed that product. And if they don't do that, then they aren't allowed to receive samples into the future. So creating that sort of accountability loop, where the brands can see ROI on the products that they push out and can push out more products to the people who are actually trying and reviewing them, allows them to know that their sample process is actually working.
And then once you can effectively lower that barrier to entry for intaking information, increase the accountability of the whole system, then you're creating a habit. Then budtenders are constantly in the habit of every time they consume a product thinking about, why did I like this product? Why would I recommend this to someone? Would I recommend this to someone? And then putting in that information. And so, once you've created that behavioral habit, you have a really strong system of feedback where the people at one end of the spectrum are receiving all the information they need from the people at the other end of the spectrum with as little effort as possible for everybody involved.
Matthew: And how do budtenders get rewarded here? Is there like a gamification or something going on inside the platform?
Andrew: Yeah, absolutely. So they can get rewarded in a number of ways. The most obvious one is through free and reduced-price products. So budtenders who consistently provide reviews on our platform will have more samples routed to them by dispensaries and brands, and they can also redeem codes that we provide them based on the number of points or rewards that they aggregate through our system for free products at dispensaries. And of course, we're building out a number of other reward functionalities, VIP events for our most consistent and high-quality reviewers, features on our social media, any number of ways to provide value to these budtenders and help them get what it is that they want.
And every budtender wants something a little bit different, obviously. They're all different people, they're not a monolith. So we are constantly testing and adding new ways to reward budtenders. And we're asking them how they want to be rewarded because they are, by and large, the best people to tell us how to get them engaged in our platform.
Matthew: And how has your background in behavioral science helped you to shape your company?
Andrew: Absolutely. Well, I mean, first off, my background in behavioral science informs pretty much everything I do on a daily basis, particularly as it pertains to people. It helps immensely in understanding, with the platform in particular, how to get budtenders engaged, like we just said. They're a complex and interesting group, they're underpaid, overworked, but incredibly dedicated to cannabis and the industry that they're operating in. And a lot of them have moved to states that legalized cannabis specifically to work in cannabis. So they're very devoted to the process. But that form of value that they're receiving is often limited. So, what we wanna do, as sort of behavioral scientists, people trying to influence behavior, is to provide value.
Fundamentally, people are driven by a desire to receive value. That can be monetary value, it can be in kind value via products, it can be relationships, it could be affirmation. It can be any number of things. But as a species, our ability to forecast what will bring us value is extremely underdeveloped. There are a ton of biases associated with the human ability to predict what will happen or what will make them happy, and that contrasts significantly from the totally rational unthinking automaton that classic economics paint us as.
So understanding how I can give a person what they want or reduce the barrier to them getting what they want, means that I will understand exactly how I can enforce behaviors that I wanna see in that person, be that an individual or a group at large. So ultimately, it's all about creating win-wins by using our understanding of how humans perceive and chase value to ensure that we're reinforcing the right behaviors.
Matthew: So getting your product out or your prototype out early can get you some great feedback and shorten the product development cycle. But is there a sense on how much it might change or shorten the product development cycle and what kind of impact that has for brands?
Andrew: Yeah, absolutely. It's a game changer. The product development life cycle, particularly for cannabis, which is complicated not only chemically as something that you need to actually get to work and you need to fit into the style of product that you're creating, be it an infused beverage, an infused, you know, edible, a topical, any number of different forms of product that you could be developing, there's almost a pharmaceutical level of development that goes into that, which is expensive and takes a very long time. But in addition to that, unlike pharmaceuticals, you need to make it taste good and be attractive. You need to make your product something that people want to consume rather than other products. And that is an extremely complicated process, which is not only very expensive, but it takes a long time, and it is very difficult to receive feedback on right now. There is very little optionality for brands to sample out their products and get feedback from budtenders or consumers because they're restricted from a regulatory perspective in a very significant way.
So what we want to do is make their go-to-market much more quick. We wanna make their products much better. We want to make it cheaper for them to develop those products, and we want to make sure that the products that they create are of a much higher likelihood of being successful. That's the real thing here. We wanna reduce the risk of any given product that they produce at high cost. And at high time cost, we wanna make sure that that's not a failure, that it works.
And we can reveal problems through our process that they may have no idea existed. So, for example, we were working with an infused beverage company that was having a lot of trouble selling one of their new products that was a low-sugar product that was aimed at women and athletes, people who would wanna have kind of a healthier option. But it really wasn't performing well with women. And they thought it was because of the taste or they thought it was because of the marketing or they thought it was because of the budtenders not wanting to recommend it. So we went in, received some feedback from a couple of dispensaries in our network. And we found that the biggest problem amongst female budtenders and the reason why they weren't recommending it to other female consumer is that they couldn't get the top of the bottle open. It was really hard to open. It was like locked up. It was this crazy kind of childproofing thing that just took a huge amount of wrist strength to get open. So they could have gone back to the drawing board and created a whole new product with a whole new taste, a whole new ingredient profile, an entirely different marketing or branding swap, but ultimately, all they had to do was change one little thing about their manufacturing process. So we saved them a ton of money, and we allowed them to launch their product to much greater success in their other markets in addition to Colorado. So broadly, what we wanna do there with our product is get that feedback quickly so they don't make expensive decisions that they can't take back.
Matthew: Now, you're a graduate of the CanopyBoulder Accelerator Program, where I'm a mentor, and also you pitched at the Arcview Group, which is an angel-investing group for the cannabis industry. Can you tell us a little about those experiences?
Andrew: Absolutely. So CanopyBoulder is a place to which we owe a lot of our success as a company. We came into CanopyBoulder with just an idea, pretty much, you know, a spreadsheet with some thoughts about how we would maybe execute on this. And Patrick Rea and Micah Tapman, who are the two managing directors there, were incredible mentors. They provided us a massive amount of information, a plug into an incredibly professional network of industry insiders in cannabis and all of the tools and knowledge that we needed to effectively build a business. And that process, I don't think I can oversell. It was incredibly valuable for us, and I think it'd be valuable for any entrepreneur to at least think about it. It depends on the stage of your business and what it is that you really need as an entrepreneur, be that, you know, a gap in financial knowledge or a gap in go-to-market knowledge or a gap in cannabis knowledge. Any number of those things could be beneficial to you, but I could not recommend Canopy more highly.
And Arcview is very tied to Canopy for me. Our whole Arcview experience was defined by the fact that we spent the four months of CanopyBoulder preparing to pitch at Arcview. And really thinking about the pitch hard and working on it and showing it to people and having them criticize you into the ground and then showing it to them again, having them criticize that into the ground, and then having them show it to you a third time and saying, "Okay, this is kind of good, maybe now you can pitch at Arcview." Like, having that feedback process, honestly, felt a lot like my time at Bridgewater, where I was being constantly criticized but had the understanding that what I needed to do is take this criticism and turn it into something more valuable, helped us to hone our business even more than it helped us hone our pitch. We understood what our message was, we understood what our value prop was, and ultimately, our time at Arcview was very successful. We were able to close our funding round very quickly. We raised almost double what we had set out to raise and a pretty big oversubscription. And that funding process went really well, in large part due to the preparation that CanopyBoulder helped us do.
Matthew: Oh, that's great. So you're oversubscribed now. If there's accredited investors that are listening that are interested in investing, is it worth reaching out to you? And if so, how do they do that?
Andrew: Absolutely. Please reach out. I'm always interested in talking to investors, be that as advisors or actual sources of capital. I've found that investors are some of the smartest people that I talk to. They can reach out to me at email@example.com, or by our website, bestingrow.io. And, you know, I'm always trying to up my LinkedIn cloud, so feel free to give me a shout on LinkedIn and I would love to connect with you.
Matthew: I'd like to pivot to a few personal development questions to help listeners get a better sense of who you are, personally. Is there a book that's had a big impact on your life or way of thinking that you'd like to share?
Andrew: Absolutely. This is tough because I have so many books that I think I could point to here. I think that reading is probably one of the most important things I do as an entrepreneur, constantly trying to gather new information and see new points of view. So I think I'll say two books. The first one is a book called "Influence" by Robert Cialdini. That was something that I read at Harvard as part of one of my behavioral science classes. It is probably the best book about understanding what influences people, why they make decisions, and how you can use that to more effectively create either a business or, you know, a government program or a nonprofit. Any number of ways that you need to involve people in something that you care about and you want to influence their behavior, this will teach you exactly how to do that. And it's informed pretty much every single interaction that I've had since I read that book.
And then on a more personal note, I'd say a book called "The Rise of Theodore Roosevelt." It's a biography by Edmund Morris. It's actually the first in a three-part biography. The whole trilogy is like, you know, 3,000 pages. So if you don't have time for that, I'd say just go for the first one. But Theodore Roosevelt is probably the most interesting person I've ever read anything about. He was a polyglot, he was a genius, and an athlete, was an incredibly successful person. And just being able to observe in a really close way based on his correspondence and the way he was constantly journaling, how he was thinking and why he did the things he did, has informed a lot about how I make decisions and how I think about what it is that I want to accomplish in my life, because it's very easy as an entrepreneur to go into a really big world and feel dwarfed by everyone else around you when you're first starting out.
But Theodore Roosevelt started as an asthmatic, unhealthy child who people thought was gonna die before the age of 10. But he started lifting weights and became an absolute behemoth, and ultimately, one of the greatest statesmen in the history of the world. So it's a great story about believing in yourself and understanding that you have the power to change your reality no matter what.
Matthew: Yeah. You know, I read about these figures throughout history sometimes and I just feel like a total wuss because they were so mentally disciplined and strong and always looking to be stronger, and challenge themselves, and getting up early and doing all this stuff. And I'm just like, "Wow, I am so soft compared to these guys."
Andrew: And it was a time where...and I'll bring it back again to principles. It was a time where everyone had principles. Everyone believed in something that was at the core of their being and they drove towards that with all of their might. And I think that's something that we've lost nowadays in sort of a postmodern world of Instagram and Facebook and constantly comparing yourself to others. But kind of calling back to that time, and thinking a lot harder about what it is that makes you you and why you do the things that you do is incredibly important, and it's the best way to be a successful entrepreneur.
Matthew: How about a tool? Is there a tool, web-based or otherwise, that you consider vital to your productivity?
Andrew: Absolutely. I use probably three tools...besides the basic slate of, you know, email, cell phone, all that kind of stuff, I use probably three tools that are really important to me that I wouldn't want to go without. The first is a project management tool. It's called Asana. My team uses that every single day. We use it for tracking all of our tasks, all of our KPIs, everything that we're shooting towards. It's a great place to track all that information, and have discussions, and create sort of a good project map for a team that has to do a lot of things all at once.
From a market development perspective, business development, sales, we use a CRM called HubSpot, which I'm sure a lot of people have heard of. We think it's really, really valuable. It not only can automate your sales process and turn one salesperson into the equivalent of 10 sales people but can also give you a lot of analytics about how your sales process is working. Are you losing people at this stage in the process or that stage in the process? Where is it that you need to tweak things to make sure you can close more deals?
And then, probably the best one that I've started using recently is called Timely. It integrates with your calendar, and it tracks everything that you do throughout the day and allows you to make sure that you're using your time productively. The first time that I used it during a day, I was honestly horrified. I had no idea that I was spending, you know, 45 minutes on Facebook or 30 minutes on Instagram, just because I would flip it open and, you know, look at it and then turn it back off again. So you really get an idea of how much time you're wasting, as well as how much time you're using effectively, and being able to see your progress from, I'm doing 30 different things a day and half of them are productive, to I'm doing 15 things a day, all of them are productive and I accomplished all the things I wanted is such a great feeling, and it's really, really a great way to get yourself into better habits and a better pattern.
Matthew: Yeah. You know, I find, like, going to a new site or social media or something is kind of like a mental break after doing something intensive. You know, when you transition from, you know, being somewhat unproductive with that filler time of social media, news or research that's not productive, and then you transition to full-beast mode of always productive, do you feel, like, more tired at the end of the day? I mean, do you feel like you had two days in one? I mean, what does it feel like after that?
Andrew: So the way I think about that, sort of jump off what you're doing and look at the news, it's kinda like a Millennial smoke break. Like, cigarettes aren't cool anymore, but Instagram's cool and the news is cool and, you know, the internet is really cool. But it ultimately is something just like a smoke break that you really don't need. It's just a habit. It's just an addiction to the dopamine surge that you get when you look at this piece of news or you look at this picture that your friend posted. So when you're able to remove those things from your life, I actually feel like I have more energy because I am not constantly fighting the urge to be on social media sites or fighting the urge to be doing something entertaining online. I've just created a habit where I'm now addicted to the hard work that I do and all of the things that are associated with that. And I feel more closely tied to the rewards after doing that work rather than feeling like I just sort of begrudgingly did it and had to do it.
So I'd say it has made me feel a lot better. It's made me feel way more productive, as well as just less beholden to the internet and my phone and all these different distractions that I feel like can really take you out of the present moment.
Matthew: That's great. You know, one thing I just like to point out is that, it was kind of a thread throughout this interview, is that, you know, what do you do with feedback? I mean, I noticed one trend and one trait among entrepreneurs that are successful, is that they don't take feedback as they themselves...or I say, constructive feedback from the market or individuals as they themselves are personally a failure. They say, "That what I did wasn't successful, it's feedback and now I have to do this, try something else." And I notice when people give up, it's they say, "I am a failure. They attacked me." And you almost externalize it as if it's outside of you and it's something you're looking at and you're just like, "I'm just gonna take that and now I'm gonna move it over here and try that." And that is, I think, a really important thing. You know, if you just make a distinction and understanding, like, "Hey, it's not me. Failures are events, they're not people."
Andrew: Exactly. That's a great phrase. I loved to hear that, failures are events, not people. And oftentimes, even beyond that, failures are habits, not people. And the habits that you have that create failure are the things that you need to address and change. And they're not things that you immediately need to change about yourself today. It's just like quitting smoking. Like quitting smoking takes people months or years because you have to slowly change the habits in yourself that produce that behavior.
In the same way, you have to slowly change the habits in yourself that produced a bad outcome when you try to start your own business. And the more you can read about other entrepreneurs and people throughout history who have failed massively and embarrassingly and in ways that feel like they're so central to who they are and their being, the more you realize, "I'm just a person, and ultimately, the things that I do can either get better or they can get worse." And there's no stasis. There's no world in which I'm just gonna stay exactly the same, because change is the only constant. So I should constantly be driving myself towards getting better.
And the first habit that you have to change is the habit of being offended when people tell you that you're bad at something. That's a gift. They've given you a gift. They've done something difficult for them. It's hard to tell people that they're bad at something. But when they did that, they did it because they want you to know that you're bad at something so that you can then change that thing. You'd much rather know that you're bad at something and become good at that thing than just blissfully be bad at it forever. So the more you can, just like you said, externalize it from yourself, step away from it and imagine that you are just a third person observing the scenario, the more you'll be able to create effective patterns, effective habits, effective strategies and ways to move forward and be more successful at whatever you're doing. It doesn't have to be entrepreneurship. It could be literally anything. But that mindset of constant self-improvement and willingness to accept yourself as you are, but driving yourself a little bit harder every single day to be better, that's just a much more healthy mental state to exist in and is a much more successful lifestyle to lead.
Matthew: Well said, Andrew. As we close, how can listeners find you again? Can you give out your website so they can reach out and any of your social media channels that we don't waste time on?
Andrew: Absolutely. So you can find out a bit more about Best in Grow at our website, bestingrow.io. You can reach me via email directly at firstname.lastname@example.org. I love hearing from people, love answering questions, love talking. And obviously, like I mentioned earlier, love networking. Hit me up on LinkedIn, Andrew Duffy. And yeah, I would love to hear from any potential customers, any budtenders who have suggestions or wanna try out the platform, anybody who just has a cool idea about what they think we could do. I'm happy to hear from anyone, really would love to have your feedback and input.
Matthew: Andrew, thanks so much. Good luck to you, and keep us updated.
Andrew: Yeah, absolutely will do. Thank you so much, Matt. I really appreciate your time today.