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Ep 271 – These LED Lights Are Capturing The Attention of Cannabis Growers

noah miller black dog led

When outfitting a modern cultivation facility, lighting is one of the most important investments.

With the right combination of spectrum and power, good lighting not only maximizes yield but also optimizes plant quality for home and commercial growers alike.

But how do you stay up to date on all the advancements of indoor lighting and determine the best scheme for your facility?

Here to help us tackle this is Noah Miller of Black Dog LED, makers of the best full-spectrum LED grow lights on the market.

Learn more at https://www.blackdogled.com 

Key Takeaways:

  • Noah’s background in pharmaceuticals and how he came to enter the cannabis space
  • An inside look at Black Dog LED and its mission to offer cannabis growers the best lighting possible
  • A breakdown of LED lighting vs. traditional lighting solutions like HID including efficiency, cost, and ROI
  • The evolution of indoor lighting in the cannabis industry and why LED has become the standard
  • Noah’s advice on indoor lighting for home growers versus commercial growers
  • Mistakes Noah sees growers make when trying to create a successful cultivation facility
  • Misconceptions and myths surrounding LED lighting and Noah’s continual efforts to change public perception
  • Black Dog’s research on LED efficiency and ways in which the company is working to optimize facility lighting for greater yields
  • Where Noah sees indoor lighting heading in the next few years and what that could mean for home and commercial growers
Read Full Transcript

Matthew: Hi, I'm Matthew Kind. Every Monday, look for a fresh, new episode where I'll take you behind the scenes and interview the insiders that are shaping the rapidly evolving cannabis industry. Learn more at cannainsinder.com, that's cannainsider.com. Now, here's your program. When outfitting a modern cultivation facility, lighting is one of the biggest investments, but how do you stay abreast of all the advancements in indoor lighting? Here to help us tackle that question is Noah Miller of Black Dog LED. Noah, welcome back to CannaInsider.

Noah: Thanks Matt. Good to be here.

Matthew: Give us a sense of geography where you sit in today.

Noah: I'm actually sitting just outside of Boulder in Niwot, Colorado in our new location.

Matthew: Great. And what is Black Dog LED at a high level?

Noah: Well, at a real high level, it was originally conceived to bring the best lighting possible to the cannabis grower, simply not even necessarily LED, whatever the best lighting technology was, deliver that to the cannabis grower.

Matthew: Okay. And can you share just a little bit about your background and journey and how you got into the cannabis space and to Black Dog?

Noah: I guess none of us really yet have started our careers in cannabis, those of us that have been working for a while. So like most, I got lucky, I made the choice to get into cannabis. I was in Colorado back when recreational was voted on. I was actually visiting here doing a teacher training, actually a yoga instructor teacher training. So I was in Colorado doing that. I was working in pharma at the time and I saw recreational pass in Colorado and when they pass that, I thought there's no way I'm going to miss the opportunity to be involved in, one, such an important industry, and two, such a new and dynamic industry. So I wanted to be there and I felt I couldn't be at a better place, ground zero. So I quit my job, moved to Colorado immediately and jumped into the industry at that point.

Matthew: That's great. That sounds very similar to my story. So for listeners that are not familiar with cannabis or indoor lighting, how can you help them understand LEDs and how they compare to traditional lighting solutions, and why more people are talking about LED versus traditional lighting right now?

Noah: Yeah. So if you're not growing outside under the giant free thermonuclear reactor in the sky that we call the sun, then you do need artificial lighting, right? And so with regard to that, once you know you need artificial lighting, you do have a plethora of choices, you know, at your disposal today. Back in the day when I first got involved in cannabis a while back, HPS, metal halide, you know, CFL where your choices, you pretty much had that and for flowering, it was pretty much HPS at the time. Luckily with LED, what it offers is just another alternative, but it has a future in that HPS is very, very old technology. It doesn't have a path to more efficiency. Just the technology is inherently inefficient. So LED is now offering a way for growers that want to be more efficient and even produce a higher quality product thanks to the spectrum that we can provide with LED. That's what LED brings to the table really is the ability to produce at a lower cost and even a higher quality product if you use the right LED.

Matthew: Okay. And just for people that aren't familiar, this is high-pressure sodium grow lights is what we're talking about, HPS, right?

Noah: Yeah. Sorry, sorry. HID is the overarching term which is high-intensity discharge lighting. So that would encompass your metal halide, your HPS, and all of that. And HPS, as I was referencing for flowering, is yes, a high-pressure sodium bulb.

Matthew: Okay. And when you were on the show a few years back, the conversation about LEDs was much different. And I still remember getting emails after the episode where people were like, "LED's the future, everything else stinks." And then the other half was like, "This stuff's gonna fade away." Like, "It's not gonna stay around. People are gonna realize that it's not as good." And that has definitely changed, that conversation has changed. Can you talk about like how it's changed and how the conversation's evolved over the...I think it's been two years since you've been on, I would guess. And, you know, what the conversations are like now compared to what they were like two years ago?

Noah: Yeah. We've been, as I said, doing this about nine years. You know, Black Dog's getting close to 10 years now at this point we've been doing LED grow lights just for cannabis. And as you pointed out, Matt, the conversation really has changed a lot and that's the best way to say it. If I rewind all the way back, which I don't wanna go all the way back, but let's do that and say, when I went to my first couple of trade shows, we're talking back Cannabis Cup. So some of the original shows before. Now we have some great, amazing business shows but back then it was a little more lifestyle-type shows.

And the conversation always inevitably started out at least, you know, let's say 95% of the time the question you got was, do LEDs work or can LEDs flower? Now we just don't get that question anymore. We don't get people asking us to do tests against HPS. We don't get people, when they first approach us, asking those questions. What they ask is why you are LED or what makes your LED different than the other ones on the market, and we start there. So the conversation has definitely changed. People are really starting to accept LED as a viable alternative and actually a better alternative than the traditional lighting.

Matthew: And what do you think is driving that? I mean, what's the biggest...if you had to pick one variable as the reason why LED adoption is taking place, is it because of the electricity savings or some sort of shift in, you know, how the conversation's taking place? Like what has been the primary reason this conversation has changed?

Noah: Well, the answer there is undoubtedly yes, Matt, all those are correct. But you're asking the right question, which is what's really driving it, and I'll give you my opinion. I wanna be clear, it's an opinion. There's not a lot of data yet to back all of this up. As any emerging market trends, they're kind of being looked at today and we don't know what's driving all of them. From being in the industry though since we started, I would say that it's mostly driven by what I love, capitalism. So we've got all these grows, we've got maturing markets, even new markets, new states that are coming on with either medical or adult-use laws. They know these investors, the people that are setting up those grows. They understand this is not some underground operation. This is not some short-term thing. It's a longer-term play. You know, whether they're motivated by the short-term money, like making money as it goes or they're looking more, you know, to be bought out as the industry develops, regardless, they're getting into it for more than a harvest. They're looking at it more as a business and they're doing the proper business assessment you would do, you know, outside of cannabis. If you were starting in business, you'd put a business plan together and hopefully, they're doing that in cannabis as well. And most of our customers are or have done that.

And in doing that, you would go through the process of looking at your different options for equipment and furnishing and fixture and all that fun stuff. And in that assessment, you would hopefully do some kind of assessment on your lighting options and you would find that it does...while it costs more out of the gate, the capital expenditure is higher upfront, it does more than pay for itself down the road. So I'd say that financial aspect is driving a lot of it because they know they're gonna need to stay competitive in a competitive landscape and whether it's that way in their market today or it will be that way in the future, they know that and they're looking, I think, to gain a competitive advantage both, again, in terms of driving their costs down and delivering a better product to market.

Matthew: And I wanna put on my, like, CFO cap here and talk about just ROI terms. Where are we in terms of price for traditional lighting compared to LEDs in terms of rate of return payback period? How does the pricing equation work?

Noah: That's a good question in that we're terrible. I'll be honest. So we don't hide from it, the fact we are, you know, four or five, six times more expensive than HPS if you look at a basic HPS, like, double-ended, you know, fixture these days. But luckily, as you pointed out, if you do the ROI analysis, the return on investment, you will find that it does pay for itself. Now, the payback period is, as we can imagine, a little complex in that it depends on did you get rebates? What is your cost for power? So if you're in Hawaii paying a really exorbitant rate, your payback's gonna be extremely short versus somewhere maybe where your power is being subsidized because it's, you know, hydroelectric and you have cheap access to cheap power. So those things will affect the payback period. But in our assessment, what we see, basic numbers, if we take a basic run-of-the-mill operation, it is about a year or less, anywhere from like 9 to 12 months.

But in extreme...or not extreme, but let's say some of the more outlier areas where you've got fresh states that are coming on board, you've got those early people to market that are capturing that beginning high price of the product. We've got a customer in Oklahoma who did a nice facility, built it out very efficiently and the entire thing was being paid off in two harvests. So there you're looking at six months, including the lights, so lights and everything. So again, because they were operating very efficiently with the LEDs and with how they set the facility up. So it ranges. But yeah, you're looking at about a year, if I was gonna give you kind of a quick bellwether, but again, our warranty is five years, so you should be well-insulated to make your money back and make some real money on top of that before you have to even think about moving to a new light down the road.

Matthew: So when you have someone come to you at a trade show or give you a call and they're saying, "Okay, I understand I need to really look at LEDs," what questions do they ask and are they the right questions? I should say, what questions should they be asking when they're evaluating LEDs?

Noah: Well, going back to your other question, the conversation has changed, right? So if I rewind again, back then the customer was less...I don't know what I'd call it, less educated in terms of the business side. We were dealing with some great growers back then, but definitely, the business acumen has gone up significantly in our customer. You know, when they're coming to us to buy lights for a large commercial facility, you know, it's gonna be a quarter-million dollars and up for a larger facility. And so if you have that kind of money, generally you've done your homework, you're asking the right questions. So the questions have gotten more complex and they're focused more now around things like return on investment as you pointed out. So I would say the business acumen has gone up. We're still dealing with amazing growers, but we're definitely dealing with more a CFO and C-suite type people making these decisions and helping to drive those decisions.

Matthew: And do you see more customers considering solar as a way to supplement their electricity needs at all?

Noah: You know, I would say we hear about the same as we used to. It's just kind of a smattering. Some people do ask, they need to have a lot of space to actually deploy the panels. A grow is so power dense in terms of the kind of watts per square foot, if you wanna look at it that way, that to offset it entirely, you would need a very large, very large solar array for good size grow. But we do have some that throw solar panels on their roof. As long as they've got a roof there, they might as well capture that sun. And that is definitely a great offset. But what we're seeing more is really the push towards efficiency at the operational level. Not as much yet, I'm trying to supplement or subsidized with the solar.

Matthew: Okay. So when you talk to a home grower versus a commercial grower, what are their care abouts? How are they different and how do their questions differ when they call you?

Noah: Well, from the growth perspective, they're obviously very different. But you know you're speaking to lighting here, so let's get real specific about that. So when you're at a home grow, you have a single light, generally. Now, I'm not saying, you know, there are plenty of home growers we work with more than one light, but let's just say a basic home grower with one light. They might have two if they're growing cannabis, right? They might have two in two different environments, one they can maintain in the vegetative state and one in the flowering state with the different light cycles. So one might be at 18 hours of light and the other one's 12 hours of light. So in that case, the questions are a little different in how you set it up is quite a bit different because I don't have crossover.

So when we go to layout a large facility, we're dealing with lights next to lights next to lights. So we're more doing assessments, trying to deliver, as we call it, an even lighting canopy. Just like to have a plant canopy, we wanna deliver a lighting canopy. Whereas in a home grow, you're dealing with a single point source, or in our case, maybe 420 little light sources in a box. And we're dealing with the reflection on the sides and we're dealing with trying to contain that light. So from a lighting perspective, the big differences, one light versus multiple and how you approach those setups and how you do that.

The questions, the gardening questions, of course, get very different very quickly. And I will argue that it is much harder to maintain a home, single light, small grow in your house versus a dedicated facility because I can actually dial in the environment. At my house, I'm dealing with the fluctuations and my temperature morning to night and everything that goes on in your own home. So I would say that, you know, a really good home gardener has dealt with some more challenges and they're definitely dealing with a more sensitive environment than a large real homogenized grow facility where you can really dial it in. So the gardening questions get different. But from a lighting perspective, it's really a question of whether you're using a single light or a bunch of lights to create a nice canopy of light in a large facility.

Matthew: What besides lighting is really something to plan carefully? Because I see, you know, a lot of people come in, they're smart people, they have a project plan, but they really have no context on how to create a successful cultivation facility. And they may be hiring someone that knows more than them but still doesn't know a lot. When you can kind of see someone that's creating a commercial grow the right way and see someone who's doing it the wrong way, what are the differences you see there?

Noah: That's one of my favorite topics right now, actually, is the consulting side, right? So I come from a business consulting background. I did it for a long time in the IT world and I did it in marketing. I've done it in a few areas and for many, many years. And when I saw...I don't know, you might know better than I do, Matt, you follow the industry really well. About three years ago, I saw a major inflection point where everyone thought, oh my gosh, I'm a grower. People really need this information. And they do need the information and help. But all these people thought I'm the right person to deliver that information and to help these people. Some of them probably are the right person. However, by and large, I have found that a lot of the customers that come to us that have worked with consultants or are working with consultants, I've learned quickly that the information they were getting was suboptimal at best in terms of the setup.

Some of the things were just patently wrong, not by my standards, but by well-established kind of best practices for indoor horticulture. It just was not...it was causing a disservice. And we had some real issues where people would come to us with setups and they'd say, "Hey, I need lights for this room." And I would look at the facility and think, well, I can give you lights, but you're gonna fail anyway because your facility's set up wrong. And so we had issues with that with trying to work with our customers. We feel our job is not to sell lights, our job is to make them successful. In our case, that happens to involve LED lights. But if they're not successful, they're not gonna speak well about us and they're also not gonna come back and buy more lights. And a lot of our business is repeat business.

So we did step in and we have gotten much more involved early on in projects. Luckily, a lot of people contact us pretty upfront because they fundamentally realize that they do need artificial light if they're gonna grow indoors. And so if we get involved early on, we're able to help them and try to make sure that that facility is set up correctly. And when we're talking about setting up a facility correctly, we're really talking about the efficiencies, let's say, on the mechanical side, so the lighting, the watering system, and all that. And then you've got the operation side, to me, which would be more of the workflow and your day-to-day activities. How do those mesh together, how do they fit together and turn into a well-oiled machine?

So when we're working on a project, a commercial project, we're going to look at those two different things, make sure they mesh, but also really try and pay attention to that workflow. I always tell growers, I'm like, "Look, don't design a facility that you're going to be fighting. Because if you design, let's say, a facility with two-foot aisles and you've got some pretty big people working there, it's gonna be a struggle, you're constantly gonna be fighting that. Or you design it with 10-foot or 8-foot ceilings where you really wanted to light the room effect in a slightly different grow style and now you're constantly fighting the height of the room." So what I say is design a facility that works well with you and your goals, and that's one of the critical parts is really I would tell any grower when they call us, first thing I'll ask is, "Great, what are your goals?"

Because it's different. Some people say, "I'm trying to create this brand and I want the craziest, highest quality weed ever," or, "I just need to produce really good quality cannabis at a good low price," or, "I wanna pull 100 pounds a month out of this facility." Whatever those goals are, fine. But if you can't define your goals, you can't ever meet them. So as long as people have goals, and if they don't, I'll push them to try to come up with some, and then we can manage to those goals and, as you said, design the facility to meet their specific needs of those goals.

Matthew: I wanna just ask, you know, there's a couple stubborn myths about LEDs. First, you mentioned can LEDs...you know, can we flower with LEDs, can we veg with LED? Obviously the answer is yes. Is there any other kind of stubborn misconceptions that are still out there that you can quickly address for people that are saying...in their mind, they're thinking, "Oh I would consider LED, but..." then they have one of these, like, big five misconceptions or myths.

Noah: The biggest one, I'm not hearing it quite as much, but we still get it, and this is horrible, is LEDs don't produce heat, right? We get that question and I can understand how maybe they might've picked that up somewhere, but that's very far from the truth. Anytime you put energy into something, it's gonna produce heat. We can neither create nor destroy energy. Even at Black Dog, we are limited to the laws of physics of the universe. So that's just the way it is. So that's my favorite. Then that's a very good example of a myth that we wish would die, which is, yes, LEDs are more efficient, for sure, but they still produce heat. When you put a thousand lot LED fixture in a space, it will warm it up. So that's probably the most pervasive kind of myth that's still out there.

You know, and as you said, there's still some of those questions, when you start to question, there are still some people that think or wonder if LEDs can really grow. You know, there's some amazing growers out there using DEs still today and they're doing amazing things in their mind and somewhat rightfully so. They think, if it's not broken, I'm doing amazing things. I'm hitting numbers that my peers aren't hitting. I'm doing great things. Why should I go mess with it? And to that, I might say, "Great, if you're being competitive and you can do it, stick with it. And when enough market pressure comes along, you'll make the change when you're ready and when you feel it's right." But definitely still a little bit of the question of can they flower? So we don't get the question, can they veg? A lot of people say, "Oh, I know LED can veg but can they flower?" I'm like, "Well, flowering and veg is the same thing. You need more energy, but they're really not that different from a plant standpoint. So yes, they flower just fine." So those are the two most pervasive, but definitely, the heat one is one that still catches us on a regular basis.

Matthew: And what about some things that are pervasive that are true that, you know, are plants smaller or things like that?

Noah: Huh. One, it is true and I heard this even early on when people said, "Oh, they veg, but they don't flower." Even those people would say, "Well, they do produce a higher quality plant." Or when people started to admit that LEDs really did flower, they'd say, "Oh, the yields aren't there, but the quality is the best." And I'd say that is actually true. What you get out of HPS in terms of spectrum is you can't tune it. What you get out of a bulb is what you're gonna get out of pretty much any bulb on the market. LEDs are different in that every manufacturer can choose how they're going to design their fixture and, in this case, design their spectrum. And by designing a better spectrum, you can actually create a better product. You know, we include UV in our spectrum that yes, it costs 20 times more than other LEDs, but to us, it's worth it because that UV does produce, and we've proven it multiple times at laboratories that it does produce higher active compounds.

So more THC, more CBD, if that's what you're growing, and a higher terpene profile. So all these people that for years were saying, "Hey, when I grow with LED, I often end up with a tastier or better smelling a product or maybe some with better bag appeal," that was kind of something that was being kicked around. And I would say that's actually true. If you're purchasing the right LED with a good spectrum, you can get a better product out of it quality-wise.

Matthew: Okay. And you're doing some research now. Can you talk about that a little bit?

Noah: You know, we're always doing research. Right now, our research is focused on efficiency. We love our spectrum and we're very happy with it. But as our customers, you know, we're trying to focus on our customer's needs and there's a few different needs we're focusing on. But one of them here is definitely efficiency. You know, what our customers continue to want is obviously the most efficient fixture possible. They know our lights can grow a very high-quality product. But at the end of the day, we always say, you know, you sell weight, you don't sell smell. Yes, bag appeal matters and the quality matters, but you're paid based on grams and ounces and pounds not on the look of your weed necessarily specifically.

So in that case, we know we can provide that quality, but again, we are looking to continue to increase the amount of yield they can get per energy input. So if you're looking at, let's say watts, we wanna get them more cannabis per watt of input. And that's where a lot of our research focuses. We're always continuing to do a good amount of research around what interests us being lighting geeks, if you will, is trying to see what are the envelopes of the plant. You know, how far can we push a plant? Unfortunately, we love our plants, but sometimes we push them to death. And so we're playing with them and trying to take them to the edge and say, great, we know you can get X amount here. If we add, you know, Y more input here, we get X more cannabis. How does that relate? Are we being more efficient? Are we now reaching a point of diminishing returns? Because yes, based on a research we found, you can continue to push the plant further, not just with light, you have to do...we could talk more about that, but you have to push a lot of things in unison. But if you do that together, you can push the plant further than we ever thought possible.

But again, you do hit a point of diminishing returns as well. So our job as lighting experts is so when customers come to us and say, "How much light do I want in this flower room?" we should have some very good, definitive and research-based answers to answer that question and say, "Here's what you should do in your facility based on your growing style, your strains, what you're doing. This is our observation over the last 9, 10 years. This is what you should deploy and this is how you should deploy it." So we're constantly trying to do research around how to not only build the most efficient light, but how to deploy it into our customer's facilities.

Matthew: Now, you do a lot of consulting, you do a lot of education, you do grow-alongs and I think you do transplants. I can't remember all the different things you guys do, but I know you do a lot. Can you talk a little bit about your grow-alongs and maybe some of the education stuff you do online?

Noah: Yeah, it's good timing. Just a few weeks back...you know, we started years ago, we decided this is...you know, we're answering these questions again and again and we really wanna help these people. How do we help a lot of our homegrown? And this is a little more home grower or hobbyist aim-focused than commercial. But how can we help them because we're just answering the questions and we ended up on the phone for an hour or two sometimes with new growers because there's a lot to learn? And so we realized, you know, obviously, with the technology we all have access to, video was probably the best way to go. So we dug in and started doing videos around grows and around different tasks you do in the garden. And the response has been great and we even added on our site a catalog because we had so many in our YouTube channel that it was hard for people to maybe hone in and find exactly what they were looking for.

So we just put up a catalog video player. It's at blackdogled.com/videos and that listed...So you can say, "Oh, I wanna see some educational stuff. I wanna watch some customer testimonials. I want to watch, you know, how to do this or that or how to harvest," or anything. So we're really big on the educational component. We feel, yes, it does save us some time on the phone, but in our opinion, if everybody in the U.S. had a grow in their house, that would be a wonderful thing. Now, we'll probably never get there, but it's a nice goal and we wanna continue to educate those that wanna take the time to learn. So the videos are a huge part of our educational outreach and they're just up there for free. You don't have to buy a light. Please, we tell people all the time, even if you're not gonna buy one of our lights, just go look at the videos and learn from them. Whether you're trying to learn how to grow or even just set up your environment for successful growing indoors, that's fine. Just go, please take a look. It's a very good resource and we will continue to back that and add more to it as we get requests and things from our customers.

Matthew: Yeah. Every business needs capital. Where are you in the capital-raising process now?

Noah: Well, we're lucky and we're stubborn. We could have and we definitely did start to look years ago and we ended up finding some other alternative methods for allowing the company to fund itself and move forward. So we haven't really done any big raises to date. We did a recent friends-and-family round not too long ago. Again, just limited to, kind of, immediate friends and family, but we are about to launch our, kind of, first A-round and see how that goes. So we're looking to raise about $3 million on our company. And so we're excited to see how the market receives that. We've got a great team we're working with to do that. And so we're just ramping it up. It hasn't even been...you know, officially, I'd say we've done kind of a soft launch to some people we know, but we haven't done what I'd call a hard launch. We're not really out there yet. So hopefully to your question, we do quite well with it, but we're really just ramping up as a company into our first real raise.

So we feel it's a good opportunity for the investor looking to get in, especially if they're a little afraid of a plant-touching company and they want something ancillary, we feel we're a good fit. You know, 9, 10 years, we're established. We're an established brand. We've got real sales numbers to look at and a lot of historical data and obviously, a lot of industry knowledge as well. So we're just getting started and hopefully, I can report back to you in the future and tell you that it all went really well. I've got a little apprehension as I think anyone does when they're taking their baby out and showing it to the world and saying, "Hey, this is worth something." But we're really looking forward to it.

Matthew: Yeah. Now let's move to some personal development questions here, Noah, to help listeners get a better sense of who you are personally. With that, is there a book that's had a big impact on your life or your way of thinking that you'd like to share?

Noah: I wish I had more time to read these days. Luckily, I had a mother who got me to read a lot when I was younger, so I do have a love of reading. And my favorite story that I still look back on because it's almost harder even though I've read it at this point more times than I can count, I've given it away to friends and people I've known over the years, just as many times. But "The Alchemist" is my favorite book and it reminds me it's really, truly about the journey.

So, you know, a lot of people say, "Oh, aren't you excited for this," or, "Would you wanna take Black Dog public?" or all these things. And I'm like, "I'm having a lot of fun doing this part. I'll enjoy that when I get there, whatever the end is. I don't even know what the end result is at this point." Being in cannabis, that's one of the fun things is it's so dynamic. You never know where you're gonna be the next day. But the journey is really what I enjoy, it's the building. You know, some people say, "Oh, do you want a big company?" I'm like, "When it's a giant company, I'll probably leave and do something else because it's the building, it's that journey I enjoy."

And to me, "The Alchemist" was really about understanding that it wasn't necessarily about the end goal and the journey was a really big part of it. There are other, don't get me wrong, that I couldn't even begin to scratch the surface. It's an amazing book. But to me, that's one of the lessons I took out of it. And I love the simplicity of the story while still being somewhat complex in its messages. It just such a simple, beautiful story. So that still definitely weighs in on me and pops into my mind when I'm pulling my hair out some days. And I'm like, now this is the journey, we're gonna get there. So yeah, "The Alchemist" would be my favorite book and if anyone hasn't read it, if you have a really good day by the beach or by the pool and you have a good few hours, you can actually plow through in a day. So it's not a big novel. It's a beautiful book.

Matthew: That's great. And what is one thought you have that most people would disagree with you on? It's a Peter Thiel question from the Founders Fund.

Noah: Right now, I would say one thought that a lot of people disagree with is I'm not ready for cannabis legalization, and that's a polarizing thing to say probably. I don't think as a country...I would love to see it, and I'll be honest, I was using cannabis when I was younger and my friends and I would sit around and pontificate on when cannabis could be legalized or would it be legalized sometime in our life. And I'm going back quite a few years. I did think it would happen in my life, I will be honest. My prediction though was not for about another, about almost 20 years at this point from when I predicted it would happen. So maybe it will happen in 20 years and I'll end up being right. But it's much further along than I ever anticipated at this point.

So my belief is I'm very much excited for that to happen. But seeing...I've had somewhat a front row seats since Colorado put out adult use, since we enabled that in the state and watched it roll on to all the other states, and the other states that have added medical and all that. And I've seen a lot of stumbling. And while stumbling is fine, it's a great way to learn, there are some cases where it's been detrimental to people in the industry, to people around the industry. And so I'd like to see it done in a good way and I just don't think we're ready yet. I would like to see it take another few years before we go full federally legalized. And I really hope that it's the right platform that it's done on. And I know there are people in the industry that would like it done yesterday, and to them I say great and I wouldn't be upset if that happened. But my opinion is I think we still need to understand this and watch the experiments that are going on in these different states and jurisdictions. So we can learn a lot and I think we should continue to learn a little bit more before we go and a federally legalize.

Matthew: What do you think the most interesting thing going on in the cannabis space is apart from what you're doing at Black Dog?

Noah: Federal legalization. That's a cop-out. So there's so much amazing stuff that we don't even begin to get to touch or see. That's, again, why I jumped in the industry. You know, some of the people I read about, and whether it's on your show, Matt, you know, I do get a chance still, I don't have time to read, but I do ride my bike so I get a chance to listen to podcasts, so I get to listen to CannaInsider. And the people in our industry never cease to amaze me. Some of the ideas...you know, and I'm steeped in the industry at this point. I eat, sleep, and breathe this stuff, but I'm still hearing things. I'm like, wow, that's a brilliant idea whether it's a testing protocol or a new product they're trying to bring to market.

But yeah, it's just the ideas being brought to bear on the new problems that we're facing in cannabis, which they are new problems, no one has cultivated high-end cannabis flour at large scale in the world really until now. It's just kinda happening. So we're exposing new problems and challenges and seeing how people are doing that is amazing. And so I couldn't even pick one. I constantly am trying to devour information about the industry. Even if it doesn't touch us, I feel it's important being in this industry to understand what's going on. And there are so many amazing things being done. I couldn't even pick one and that's, again, why I love the industry, it's literally every day I'm taught something new by someone in the industry.

Matthew: Oh, me too. Noah, as we close, how can listeners find Black Dog online and also how can accredited investors reach out to you if they're interested in your capital raise?

Noah: Good. So easiest is blackdogled.com. Obviously, that's our primary site. You can find us across all the different social media channels. We have a very good following and a very active channel and, luckily, our customers are vocal and they're fun to talk to. So I invite you to join the social media conversation as well. But blackdogled.com is our main site. And if somebody wanted to reach out to us they could send an email to investment@blackdogled.com. Or they could just feel free to call in and ask to speak to someone and we'll get you in touch with the right people on our team or the team we're working with on the capital raise.

Matthew: Well, Noah, thanks so much for coming on the show and educating us and good luck with everything you have going on. It sounds exciting.

Noah: Thank you, Matt. It was great to be here again and always a pleasure to listen to your show.

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 cananinsider.com/itunes. What are the five disruptive trends that will impact the cannabis industry in the next five years? Find out with your free report at cannainsider.com/trends. Have a suggestion for an awesome guest on CannaInsider, simply send us an email feedback@cannainsider.com. We'd love to hear from you.

Please do not take any information from CannaInsider or its guests as medical advice. Contact your licensed physician before taking cannabis for using it for medical treatments. Promotional consideration may be provided by select guests, advertisers, or companies featured in CannaInsider. Lastly, the host or guests on CannaInsider may or may not invest in the companies 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.

 

Ep 270 – Synthetic Cannabinoids Are Opening Up A New World Of Possibilities

jason poulos librede

Just as we’re becoming comfortable with the massive changes in cannabis legalization there enters a disruptive new technology called “Cannabinoid Biosynthesis” that has prompted a lot of interest among industry insiders.

Here to tell us more about it is Jason Poulos of Librede, a synthetic biology company and leader in cannabinoid biosynthesis based in Southern California.

Learn more at https://www.librede.com 

Key Takeaways:

  • Jason’s background in biology and how it led him into the cannabis space
  • A deep dive into cannabinoid biosynthesis and how it’s disrupting the industry
  • An inside look at Librede and how the company has taken the lead in cannabinoid biosynthesis
  • The intricate work involved in designing a molecular drug that efficiently binds with its target
  • Exciting new discoveries surrounding the potential of cannabinoids beyond CBD and THC
  • The importance of CB1 and CB2 receptors and how they interact
  • The relationship between synthetic cannabinoids and cannabinoids found in nature and how Jason believes that relationship will grow
  • Ways in which we could misuse synthetic cannabinoids that we need to avoid
  • Where Jason sees the cannabinoid biosynthesis business heading in the next 3-5 years and how it will affect the cannabis industry
Read Full Transcript

Matthew: Hi, I'm Matthew Kind. Every Monday, look for a fresh new episode where I'll take you behind the scenes and interview the insiders that are shaping the rapidly evolving cannabis industry. Learn more at cannainsider.com. That's C-A-N-N-A insider.com. Now, here's your program.

Just as we're getting comfortable with the massive change of cannabis legalization, there enters a disruptive new technology called cannabinoid biosynthesis that has many industry insiders very excited about the prospects, but also scratching their heads about how this industry can scale. Here to help us understand is Jason Poulos of Librede. Jason, welcome to CannaInsider.

Jason: Thank you, Matt.

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

Jason: So, Librede is located in Carlsbad, California, which is just a little bit north of sunny San Diego.

Matthew: Okay. And what is Librede on a high level?

Jason: So on a high level, Librede is a biotech company and our goal is to look at nature for therapeutic compounds and then produce those compounds at an industrial scale. And so at the highest level, we're a biotech company.

Matthew: Can you share a little bit about your background and journey and how you got into the cannabis space and came to start Librede?

Jason: Yeah. So, my background's in bio-engineering and biotechnology. I started Librede coming out of the University of California, Los Angeles with a different technology. And so we started this on an artificial cell membrane platform. So, what we were doing was we were creating artificial cell systems and then looking at human proteins embedded in those systems as a way to do high throughput drug discovery and drug screening for the pharmaceutical industry. So the basic idea was a cell on a chip, right? We have a cell, we put it on a chip. And then you have the ability to study human membrane proteins inside of there. And one of the proteins we were really interested in looking at was a protein called a TRP channel. The TRP in mate receptor is involved in cold sensing. It's kind of when you put methanol on your skin, that's the channel that gets activated. And it was interesting from a pain pathway system as a target.

And so, cannabinoids had also been recently shown to interact with these channels. And this is back in 2011, 2012. And so, when we were developing a new technology, we don't want to do what has already been done. We're always trying to look towards the future, like what's going on next? What are the next, you know, important drug targets? What are the next important therapeutics? Because your technology has to work with those. So, we, you know, we were looking at this protein and then we wanted to look at it in the presence of cannabinoids. And so the ability to get access to cannabinoids, it was not that difficult for THC and CBD. But the other compounds were. So the minor cannabinoids, we couldn't really get access to. And so we're like, "Well, how are we going to test our system with these new cannabinoids?"

And Dr. Farina, Anthony Farina, you know, our CSO, thought that he's like, "I bet we can make microorganisms produce these chemical compounds so we could use them at [inaudible 00:03:25]." Because we didn't need that much of them. And so, we kind of set out on nights and weekends to develop this technology. And kind of on our first pass, we actually were able to produce some cannabinoids at reasonably high enough levels that really started to turn my eyes towards it and became extremely interesting. And that was kind of my first window into the cannabis space and the cannabis industry. And I knew we had something of extreme value then, and that this is really a way to kind of get access to not just THC and CBD, but many other cannabinoids. And so we kind of decided to switch all into this. And it's been kind of a fun ride ever since.

Matthew: Yeah. So, when you say microorganisms, a lot of people will be like, "What does that mean exactly?" Can you just give a little bit more context on what that means?

Jason: Yeah. So, microorganism, there's kind of generally three classes: the fungus, algae and bacteria. So, you know, bacteria, small little bug, right? So that's like a microorganism. Algae would be another example, and yeast. So, like baker's yeast, you know, yeast that we make beer with or bread with? That's another example of a microorganism. So, our lives are involved with microorganisms every single day. Our guts rely on them. And so they're everywhere even though you can't see them all the time.

Matthew: Okay. Do you feel like when you meet people and you're trying to explain at a cocktail party or anything what you do, there's any kind of stumbling blocks? Or how do you help them understand it if they're struggling?

Jason: Yeah. So, sometimes there are people like, "I don't understand how a bug can make the same chemicals that a plant can do." And so, typically, what I talk about is that...it's the word biosynthesis that sometimes can trip some people up. And so the way I explain it is that, you know, plants, just like humans, we make chemicals, right? We make lots of different things. And so plants, you know, can make different smells and things like that. And so they're synthesizing chemicals. But it's a biological system. So, it's biology synthesizing chemicals. So it's biosynthesis. And so, if we understand that biology can be used as a chemical factory, then, you know, I can...other biological systems can also be used as chemical factories. And then if you have a chemical factory, you can start to transplant the machines inside that factory in between, you know, from a plant to an organism, from one chemical factory to another, and actually end up making the same products or the same chemicals. And so, it's really no different than any sort of kind of basic chemistry. It's just is biology is doing the chemistry versus, you know, mixing two chemicals in a jar.

Matthew: Okay. So chemical factory, that's kind of the way you talk about it. What aspect of these chemical factories do you think is most important for cannabis enthusiasts and business owners understand in terms of what's possible with these chemical factories?

Jason: So the most interesting thing and useful thing from the cannabis industry side is the ability to control what's going on. So when you start to engineer these new chemical factories and microorganisms, you're doing them from the ground up. And so that allows you total control. It's like designing your own house to be exactly what you want it to be. So, the cannabis plant is extremely complicated. Huge, large genomes making lots and lots of different chemicals. But if I decided that I wanted to make a chemical factory that only makes one chemical at a time, it looks a little bit different. And it's actually a little bit simpler so I can actually target to go in and target exactly what we want to make and then build that up in a much more simplistic system and taking away all the complexities of an agricultural production.

So, you know, soil, long growth times, water, light, fertilizers, pesticides, those don't come into play anymore. And so, because it's a much more simplistic system, we get much more consistency and control out of what's going on. And people like reliability in supply chains. And so that's where this is all going. It's kind of consistent purity, low cost and reliability. And so that's what you get out of this, is that ability to control basically at a molecular level.

Matthew: So when we talked in the past, you talked about how drugs, molecular drugs or remedies can be designed well so they perfectly bind with their target in terms of creating that control. Can you talk a little bit about maybe how to create a molecular drug that perfectly interacts with its target and what that means?

Jason: Yeah. So with respect to cannabinoids, we're mostly talking about binding to the cannabinoid receptors, right? And so the natural cannabinoids, the phytocannabinoids found inside the cannabis plant have been okay at doing that. They kind of bind well. They bind a little bit, but not too much. And that's...they're in the kind of Goldilocks area. It's just the right...because if you end up binding too tight, you have problems. And some drugs have been pulled from the market that have been designed to bind really tight to the cannabinoid receptors. And if you don't bind enough, then you don't get any sort of therapeutic benefit. And so, the ability to control the production of molecules at the molecular scale allows you then to modulate the binding to receptors, and that then allows you to develop new therapeutics and to kind of, even kind of dial in more on this Goldilocks area that the phytocannabinoids have happened to stumble upon. And so that's one way that we can use the platform for designing new therapeutics.

Matthew: Okay. And when helping people understand, for example, the CB1 and CB2 receptors, is it fair to say kind of like a receptor is like the female puzzle piece and then the male piece fits into the receptor? Or how do you...

Jason: Yeah. It's a lock in a key, right? That's exactly what it is. And so there's a huge number of receptors in our body. And they're all just about chemical signaling. And so when something binds the CB1 or CB2 receptor, it begins a chemical cascade or a signaling cascade down that can have many different physiological outcomes. And we see this with all the different effects that cannabis and cannabinoids, individual cannabinoids have been used for. I mean, THC again has been a pharmaceutical product for 30 years, I think, now. And CBD is just recently a pharmaceutical product. And they're used for totally different indications and, you know, the binding of different receptors in different ways. And so this becomes really interesting. Depending on what key you have, you can open up different doors. And even though these keys can look somewhat similar, behind each door can be a totally different area of exploration.

Matthew: Okay. Now, in terms of scale, you know, people are thinking, how does this work here? We have, let's say, yeast in bakers or some other microorganism and we're trying to create products fit... How does this work at scale in order to be a business?

Jason: Yeah. So, has anybody ever heard of Anheuser-Busch?

Matthew: No. I'm [crosstalk [00:11:35] idea.

Jason: So that's how this works.

Matthew: Huge vats is what we should picture. Huge vats.

Jason: Yeah, this is the way this looks at scale. And this has been done before. So, cannabinoids are natural products. They're just they're valuable natural products. There's a laundry list of natural products that people interact with on a daily basis. Aspirin comes from the bark of the willow tree. Taxols and anti-cancer drug, that comes from the yew tree. Capsaicin, you know, is put in cream, that comes from peppers. Vanilla comes from the vanilla bean. Grapefruit comes from the grapefruit. I can go on and on and on. And I think half the pharmaceutical products in the market today are derived from some sort of natural product. So this is, historically, natural products are good and cannabinoids are good, too. We're learning more and more about them, and the more we learn, the better they are.

But as you move to an industrial scale, plants aren't necessarily made to produce these compounds at an industrial scale. That's not their job to do this and to supply human populations with these. So you have to come up with alternative ways of doing this. And yeast, specifically yeast, have been used to produce high value natural products. For example, the grapefruit smell, that is produced in yeast. The rose smell is produced in yeast. And that's good if you're in the perfume or sort of flavor and fragrance industry. Now we don't have to have, you know, huge fields of roses to make one small bottle of perfume. So that's great from an environmental sustainability standpoint as well as a reliability standpoint, because you know exactly the smell that you're going to get every single time. This is also done for Omega-3 fatty acids, and a whole list of other compounds have been done like this at scale.

And so when I talk about scale, I mean the metric ton level. I'm not interested in kilograms. It's metric tons that we're going for. So this is what it looks like. So, imagine that you're...have you ever brewed beer before? That's basically what we do on a day to day basis. And if you've ever worked in an Anheuser-Busch facility, that's what it looks like at an industrial scale. So the yeast kind of produce these compounds and then you can extract them out and purify them. And they're white, tasteless, odorless powders.

Matthew: So as these worlds of synthetic and natural cannabinoids come together, how do you think about those two worlds coming together and what should we know? What's of interest there?

Jason: Yeah, so I think, just to back up a little bit, there's this...the idea of synthetic versus natural cannabinoids is something interesting and I think it kind of happens in the definition here of a few words. And I want to start back at the beginning before I kind of directly answer that question. So, cannabinoids are anything that basically interacts with the CB1 and CB2 receptor. That's gonna be the definition of a cannabinoid. And so there's phytocannabinoids. These are the cannabinoids that are found in plants. For example, you know, THC, CBD, CBC, those are phytocannabinoids found inside the cannabis plant. There's also endocannabinoids. Those are the cannabinoids inside of our body. The names of them are hard to say. I just say their abbreviations, AG2 for example. So these are just, you know, natural cannabinoids that are produced inside of our body.

And then there's synthetic cannabinoids. So, synthetic cannabinoids are cannabinoids that are made in laboratories that cannot be found in nature or a human body. So they're not a phytocannabinoid. I can't find them in a plant and they're not inside of a human body, and so they're synthetic cannabinoids, invented cannabinoids. What we're doing is we're actually matching [SP] the phytocannabinoids, we're just doing...we're doing it the exact same way that nature does it. We're just making it in a highly efficient system, okay? So, what's happening now is the world of biotechnology and the cannabis industry are interacting and they're doing this on the level of kind of the production side. So, it's about optimizing the production and creating an efficient system so that you get to scale and reduce costs and then environmental sustainability through the use of technology. So it's not really synthetic cannabinoids that are being produced. It's engineering a more efficient biological system to do definitely what nature does, but just doing it faster and more efficiently. And so that's really what's going on. It's not necessarily synthetic cannabinoids that are being produced. It's an application of technology to our production system.

Matthew: Okay. And is there any way that you think it's a misuse or things you want to be careful of when creating cannabinoids or combining them in any way, synthetic or organic?

Jason: Yeah, no, definitely. I mean, you have to be extremely careful. The CB1 and CB2 receptors, many, many things can bind to them. If you don't do this correctly, you can have extreme adverse side effects. And there's huge examples of it. So for example, the synthetic cannabinoid, people refer to this as typically Spice. These are the things that, you know, people go crazy on. What's the difference between them? Sometimes it's a single nitrogen, a nitrogen getting replaced inside the THC molecule. That allows it to cross the blood-brain barrier a lot faster and combined tighter then to the CB2 receptor, that's bad news, okay? So we have to be really careful about what we're producing here. And as well as stereochemistry matters a lot. So you talk about that, it's left-handed and right-handed molecules.

And this makes a big difference. So, when you're developing new production technologies, you have to make sure and have to be careful about exactly what you're producing, and so you know exactly what's going into products and what's going into inside of people. And so you do. You have to be careful with the system just like you're careful with any sort of neurological compound in general. And so as we move and create, you know, potentially new cannabinoids or new formulations, you have to go through the typical safety screening and testing that needs to be done. I mean, that's what we do with our compounds when we make them. It starts in nice models and then goes beyond that. So, it's something that everybody needs to be aware of.

Matthew: If you were...I mean, this is conjecture here, but in the next five years, if you were to look at cannabinoid biosynthesis and say like what market share, what areas of market share it's going to be, the products are going to be in, pharmaceutical supplements, foods, edibles, topicals, like where do you see biosynthesis having the most traction in the cannabis industry?

Jason: So, from a pharmaceutical standpoint, it's for sure going to go there. I mean, that's easy to say that it goes there and it captures a lot of that market share as the pharmaceutical market develops. Inside the consumer market, it's going to be, obviously not the flower component, okay? But I think you're going to start to see this dominating in the edible space, the topical space, even vape pens. And I consider that to be kind of on the nutraceutical type of the industry. There's going to be a transition period. So, you know, I think about hemp oil or kind of full spectrum oil as effectively a carrier solvent where you can start to begin to spike in kind of pure compounds to get to the ratios that you want and get the consistent ratios that you want, and also have the ability to create new ratios that are not found in nature.

So for example, having a high CBG content topical cream, it's really difficult to get that in nature. And you can do that now with biosynthesis. Or having a high CBDV, some of the V compounds in there. And that's where you can do and that's where they're going to come in. So, it's about creating new products, not just, you know, THC and CBD. And that's effectively a black and white world and what you can do now is begin to add color to this. So that's, I think, that's where it's going to go. There will be a transition period, as I mentioned, but eventually I do believe that there's going to be a cannabinoid product in every single household. And it's not going to be THC and CBD. It's going to be other compounds in there.

Most people have Ibuprofen or aspirin inside their house. But what you don't have is the bark of the willow tree in your house. And just as natural products, from a historical content, have moved from natural systems to efficient industrial systems, the same will happen with cannabinoid production. And so I see it happening. And concentrates, anything that uses extracted cannabis oil, this will make more sense to use pure cannabinoids to allow for reproduction of a chemical profile. And that enables then branding of your products and consistency. Anywhere I go in the world, Coke tastes the same. I know that's not totally true. There's Mexican Coke, which is slightly different. It tastes good, too. But that's what you're looking for here. How do you make a brand and how do you get consistency? And you're going to do that through controlled formulation, which is enabled by pure cannabinoids, which you can only get through synthetic or biosynthetic production.

Matthew: You know, some people say that THCV has an appetite suppression qualities to it. Do you see anything with that coming to market in terms of, you know, diet aides or things like that? Is that gonna...

Jason: Yeah. I mean, I hear a lot about that, too. So, THCV is high on people's lists, something that's interesting, something that we can produce, something that's been very difficult for plants to produce. I've heard people talk about, you know, getting some high THCV plants out through breeding programs. But it seems to have been taking a long time. But, yeah, I mean, that's what's interesting here. So, you know, maybe we're talking about having a diet pill here, you know, a naturally derived diet pill. That would be really exciting to have something like that in a medicine cabinet. And so, it's really, when you kind of remove the constraints of an agricultural system, you can begin to think about creating new products like THCV that you mentioned and doing kind of so much more.

So, we look at the plant for the examples of what compounds we should make and then we do them, then we create them in a highly efficient manner. And so it's not only doing what the plant can do, but kind of doing so much more and enabling that accessibility to these compounds. I mean, if they're valuable therapeutics, what I want to do is to get access to them so we can supply them to as many people as need them and to do it for as low as cost as possible. That's what we should be doing from a therapeutic standpoint, I believe.

Matthew: Okay. And if you had unlimited budget and time and could only perform like experiments on yourself, which ones would you kind of...which cannabinoids and combinations and things would you be doing to kind of optimize just yourself?

Jason: Yeah, I mean, so that's interesting. I've thought about this. I've actually talked with the NIH about this a little bit, too, the National Institute of Health. It really...it doesn't sound very exciting, but it's at the beginning. I mean, I'd really like to do kind of minute changes and formulations to see what effects those have. Taking the top 12 cannabinoids and kind of start to play with permutations of those and see what the effects are. I mean, we really don't know how any of these things work. And so some really basic, basic information about what does CBC do, I'd be really interested in seeing what happens with that because I think so little is known about these compounds. And so you really got to start at the beginning.

Matthew: Yeah. Well, Jason, I like to ask a few personal development questions to help listeners get a better sense of who you are. With that, is there a book that's had a big impact on your life or way of thinking that you'd like to share?

Jason: Yeah, actually, recently there's a book of poems called "Consider the Humble Poet" by Joan Tenor. Not a very well-known author, kind of an older view, but I like that. It's a unique view on, you know, the life that people don't see a lot of about. And it's just as interesting to kind of get out of what people consider, I think, kind of famous authors and things like that. So, yeah, "Consider the Humble Poet" by Joan Tenor. That was something interesting I read.

Matthew: Okay. Is there a tool that you or your team use that you consider valuable to your productivity?

Jason: Yes. Okay. So, there definitely is. We use lots of different tools. Some tools are lacking, but the power of DNA synthesis has and will continue to change our lives, okay? The ability to effectively print DNA which then allows you to print genes, allows you to print enzymes, which are the chemical machines to create chemical factories, is an extremely valuable tool that we use inside the lab and has really enabled the growth of the synthetic biology industry in general.

Matthew: Yeah, that seems really promising. I don't have the knowledge to fully appreciate exactly what that means. I mean, apart from what we talked about today, how do you think it's going to show up in people's lives first here in the 21st century?

Jason: Yeah, so the thing about the DNA synthesis, it's all in the background. It's the stuff that you don't know. It's the complicated electronics inside your phone, okay? Like, I don't know how...I mean, I don't know how my phone works. I hit the call button and it goes. There's this complicated electronics that are doing things in chips and chips reading it. And so what the power, the ability to make DNA rapidly is gonna allow us to do is to allow us to make new compounds and new therapeutics and do this rapidly. And so although you don't always see what this is and how this was made, the kind of the core behind a lot of these technologies and therapeutics kind of begins at the DNA synthesis level. People have heard a lot about CRISPR technology these days and, you know, gene editing. You need to edit...in order to get that to work, you need to actually synthesize small fragments of DNA.

It's not what you talk about, but it's kind of the core and the base of this. For biosynthesis production of cannabinoids, it begins with us typing in a DNA sequence into a computer and then hitting the order button. And then, you know, the cannabis gene getting sent to us as a piece of DNA. We don't need to touch the plant. And so this means we can do lots of changes to these enzymes quickly to make them much more efficient, to make them work faster. And so, it's difficult to see these things in your life, but that has been a big, big game changer, that ability to kind of synthesize and manipulate DNA rapidly and cheaply. You've got to understand, when we did this in the first time back in 2013? Yeah, because we filed our patents in 2014. We ordered the genes to do this for less than $5,000.

So we built the entire cannabinoid pathway into yeast for genes that cost less than $5,000. I mean, that's insane. And you've got to understand like, we were a company of a few people that had zero money. And so, we put our own money basically into doing that. And, you know, when you're fresh out of graduate school you don't have a lot of money. In fact, a thousand dollars is a lot of money to me. And so it's still...but because that barrier was small, we could go ahead and do it. You can make those bets. And that's what started this company. It's the ability to kind of get after that DNA. And so that had such a huge, obviously, impact on my life and I think it will continue to have an impact on like the global population in general with respect to therapeutic development.

Matthew: You know, I think about the DNA editing quite a bit. I think, you know, how... It's already starting. Like in South America, I know some people that, they can like change their kid's eye color or hair color and just how, at first, we're going to like try to eliminate diseases or things that are undesirable. Like, maybe you're prone to MS. Like, "Do you want your kid to be prone to MS?" You say, "Oh no, I don't want that." "How about like they're prone to balding?" "Well, no, just take that out, too." And then all of a sudden it's like...it's all of a sudden like, "How about cognitive learning ability?" "Oh, I want that to be high," you know. And next thing you know, you're kind of creating this super race of people.

Jason: Yeah. It's basically eugenics again. I mean, this is super dangerous. Yeah, I totally agree with you. So this is the field of bioethicists and there's many out there that are much more well-versed in discussing these issues than me. But, yes, with any technologies that's created, those can be used for good and those can be used for bad. I mean, I look at nuclear power that way. I mean, the nuclear bomb is terrible. I think nuclear power is not so bad. So we have to be careful about this. You have to be careful about what you do, what the implications mean. And these are discussions that we need to have kind of at a societal level. Really at a governmental level. What do we want to be doing as a society?

Do we want to be getting rid of sickle cell? And so there's just recently a study, they just started human trials for CRISPR to help cure sickle cell. I mean, I think we could agree that, yeah, you know, we should edit that gene out if we can. That's good. MS. I think we can agree with that. And so, where do we stop as a society? I think probably, you know, baldness. I think it's like, yeah, it's getting there. I don't think we want to do that. You know, high cognitive ability, eye color. I mean, man, it's starting to get into some areas...

Matthew: Or you could just like, "Hey, I don't want to spend $14,000 for my kid to have braces. Can we just get some straight teeth here?" Like, "Sure. Done." And you're like, "Oh, what else can I do?"

Jason: Yeah, exactly. And these...yeah. So, I mean, these are important issues. I think that, you know, there's lots of people thinking about them. But this is starting to come up. And the pace of technology moves so quickly that we need to be doing these, having these discussions and making sure that we're doing it slowly. I think the FDA in the United States has a pretty good kind of governing control over this. And like, I use governing as in like a governor on like an engine. Like, they pretty like to do things slow. There's other countries that like to move...are moving faster, and this is, well, this is...man, you guys are editing embryos and do we want to be doing this and what are we doing? You know, and basically the ability to change human evolution through to biotechnology.

I mean, these become interesting questions that you could write science fiction novels back in the '50s about, and now it's your life. And so, it's definitely something we need to think about and we need to make sure that we're doing this in the right way. But given the cautions that are there, there's also so much that can be done for good. And so you don't want to limit the technology necessarily. But you do need to keep an eye on it and make sure that we're using them in a responsible ways.

Matthew: That makes sense. Now, here's a [inaudible [00:33:16] question for you. What is one thought that you have that most people would disagree with you on?

Jason: Yeah. So what's the... So I don't know if many people disagree with me on this... Yeah, I guess people...a lot of people do. I typically think that nothing is very new in the world. That everything that is done can always be looked back through with some sort of historical context and a model can be found and repeated. And a lot of sometimes people think, especially kind of with regard to the cannabis industry, this is something...this is brand new and, you know, cannabinoids, nothing like this has ever been seen before. And this is, you know, a brand new industry. And I think we've seen things like this before in the land of therapeutics and things in the land of the regulatory environment, too. And so, I like to kind of look to history to see examples of how things have always been done and then kind of morph them in there and morph them into...morph and map them on to what's going on in today's world.

And I think other people would disagree with that. It's like, "Hey, this is brand new and so you can't look to the past. You have to create your own future." And I understand that mentality, too, and that can be useful. But I think a lot of things have historical context that you can bring into play when planning for the future.

Matthew: Jason, before we close, can you let us know where you are in the capital raising process, if anywhere?

Jason: Yeah. I mean, you know, we're a biotech company. We almost always are raising money. So we do rounds periodically. And so, we did a round recently and we'll probably be gearing up to do another one in quarter four. I'm always really interested in partnerships and bringing together unique skill sets from a variety of different areas like the pharmaceutical industry, the production systems and platforms, and bringing those together to accelerate the commercialization of the technology as well as getting compounds to markets. So, anyways, that's kind of where we are. So we should be looking at quarter four maybe this year of coming out with doing some more things. And I hope to have some exciting news before that, too.

Matthew: Well, as we close, let listeners know how you spell Librede and how to reach out to you if they're accredited investors and want to learn more.

Jason: Yeah. So, Librede is spelled L-I-B-R-E-D-E. And this goes back to our days as an artificial cell company. It stands for Lipid Bi-layer Research and Development. So, not many people know that, but that's what it stands for. And so Librede there, you can go to our website. It's librede.com, L-I-B-R-E-D-E.com. And, you know, there's a Contact page there, there's an Info page there. They can reach there, that actually goes basically directly to me. I'm also on LinkedIn. It's Jason Poulos and you can reach out to me there. And so we're always looking for, you know, new people to kind of come in and join the team, whether they be investors with, you know, different skill sets as well as, you know, people that help want to build up the science, molecular biologists, protein engineers, you know. We're growing and we'd like to bring on the best people to help this company grow.

Matthew: Well, Jason, thanks so much for coming on the show today and educating us. We really appreciate it and good luck with Librede. It sounds like a really fast growing area. I'm sure there's great things to come.

Jason: Yeah. Hey, thank you so much, Matt.

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 cannainsider.com/iTunes.

What are the five disruptive trends that will impact the cannabis industry in the next five years? Find out with your free report at cannainsider.com/trends. Have a suggestion for an awesome guest on CannaInsider? Simply send us an email at feedback@cannainsider.com. We'd love to hear from you. Please do not take any information from CannaInsider or its guests as medical advice. Contact your licensed physician before taking cannabis or using it for medical treatments. Emotional consideration may be provided by select guests, advertisers or companies featured in CannaInsider.

Lastly, the host or guests on CannaInsider may or may not invest in the companies entrepreneurs profiled on the show. Please consult your licensed financial advisor before making any investment decisions. Final disclosure to see if you're still paying attention. This little whistle jingle you're listening to will get stuck in your head for the rest of the day. Thanks for listening and look for another CannaInsider episodes soon. Take care. Bye-bye.

Ep 269 – Designer Cannabis Is On The Horizon Thanks To Molecular Science

chris emerson level

It’s no secret that achieving a truly targeted effect is the holy grail of the cannabis industry, but how close are we to making this a reality? Are designer cannabis products on the horizon? 

Here to help answer this is Chris Emerson, co-founder and CEO of a unique company known as Level that’s working to disrupt the cannabis industry with products precisely tailored to every individual and every occasion.

Learn more at https://www.levelblends.com 

Key Takeaways:

  • Chris’ background in chemistry and how it led him to the cannabis space
  • An inside look at Level and its mission to provide a tailored cannabis experience to every patient and consumer
  • How Chris’ extensive background in science allows him to think about cannabis products differently than most entrepreneurs in the industry
  • Why Level sources its oils from strains high in CBD, CBG, and THCV and how this enhances the overall effect for consumers
  • Chris’ efforts to find rare and unique cannabinoids for Level’s products and his discoveries to date
  • A deep dive into Level’s tablinguals and pax vaporizer pods
  • Chris’ work at Level determining new uses for cannabinoids, including everything from stimulants to hangover cures
  • New and exciting initiatives at Level and Chris’ insight on what the cannabis industry will look like in the next 5-10 years
Read Full Transcript

Matthew: Hi, I'm Matthew Kind. Every Monday look for a fresh new episode where I'll take you behind the scenes and interview the insiders that are shaping the rapidly evolving cannabis industry. Learn more at cannainsider.com, that's cannainsider.com. Now, here's your program.

It's no secret that getting a targeted or desired effect from consuming cannabis-related products is the holy grail that consumers want, and businesses are trying to create. But how close are we to making this a reality? Here to help answer this question is Chris Emerson, CEO and founder of Level. Chris, welcome to CannaInsider.

Chris: Thanks, Matt. Appreciate you having me.

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

Chris: Currently sitting in San Francisco, California.

Matthew: Okay. For people that aren't familiar, what is Level at a 10,000-foot view?

Chris: Level is a cannabinoid company with a thesis that you can get to targeted or effects-based experiences through the application of unique or more rare cannabinoids formulated in ratios you can't access from the plant alone.

Matthew: Okay. And, Chris, can you share a little bit about your background, and journey, and how you got into the cannabis space and started Level?

Chris: Sure. So I've always been really fascinated with the interaction between chemicals and human physiology biology, and had a very significant interest in plant medicine. But I actually wasn't very good at school, and ended up going in the military, spending most of my 20s trying to figure out what I wanted to do. And in my 30s, I went and got a Bachelor's in chemistry and really fell in love with small molecules. And I [inaudible [00:01:51] small molecule chemistry. Most people get trained that way either go, they work for pharma discovering or making drugs, or they go into academics and train the next generation of chemists.

I always wanted to be an entrepreneur, but I didn't know how I'd reconcile these two kind of desperate physical life science and building a company because there's a lot of barriers to that. And so after my PhD, I had a postdoc at Stanford. And I was doing a postdoc at Stanford doing molecular biology and small molecule synthesis. And about six months into my postdoc, I was kind of disillusioned with anything that was available to me at that time and with academics. So I quit my postdoc, ended up on a cannabis farm in Mendocino. This was early 2012. And that whole experience just kind of reshaped my life from, yeah, being on the farm, and being able to synthesize my knowledge base as chemistry and biology in the plant, and really diving into what we knew about it and what we didn't know about it.

Matthew: Okay. So it sounds like you dropped out of the Stanford PhD program. Was it just you kinda lost interest or didn't like the career opportunities that looked like they layout on the horizon? Or what were you thinking back then?

Chris: Right. So it was actually my postdoc. So I already had my PhD. So I was a postdoctoral fellow doing research. Yeah, I wasn't cut out to be a professor. And that wasn't a path that I could do. And pharma wasn't interesting to me. I just really didn't want to go into pharma for various reasons. It's hyper-competitive. And the job market in the pharma industry over the past 20 years has been really challenging for small molecule chemists. And so that coupled with the other day, you know, I was living in San Francisco community to Stanford. But, you know, when you're in the city, you just feel that there's a ton of opportunity. And so if you can figure out how to access your tap into that, you know, the sky is the limit. And so I was really feeling that and just trying to understand how I can make something unique happen in my life. And that led me just to say, "Hey, you know what? I'm gonna quit my postdoc, and we'll see what happens." And everything just kinda started unfolding from there.

Matthew: Okay. So when you quit your postdoc and just went to go work on a cannabis farm, did you have any insights about the rest of your life for how things might go differently? Because I've noticed this kind of point of departure for many people, including myself when I just kind of walked out of a, you know, Fortune 500 company kinda, like, if I do keep going down this road, I could see what lies ahead. So what kinda insights did you have?

Chris: It's a great question. At first, the insight was... Sorry, I almost used an expletive. At first, I was like, "Oh, no, what did I do? I just spent 15 years of my life getting a PhD and trying to achieve this status in life. And now I'm living in a tent on a cannabis farm, and I'm gonna go to jail." That was the first insight I had. And then once that kind of, you know, wore off, and you got used to just...you know, this was 2012, so they were still...you know, 2012 is coming into the season, the feds were always going up into Mendocino and making a rests. So it was always at the forefront of my mind. But as I could push that back, I had this really in-depth quick indoctrination into kind of the culture at that time of cannabis cultivation on through the prop 215 model. So learned all the different processes, you know, cloning, all the way up through, you know, taking it out for sale.

And I saw that this plant had these amazing properties that we really knew nothing about and could have a very positive impact on human health. And I saw where the state of the industry was, and there was a massive need for standardization, for new unique product types to come online, and there was also a sense...you could tell regulation, legalization was coming down the pike at some point. And so I saw that as an opportunity as, yes, it's still very gray, but now is the time to make a run for it because it's gonna be a diminishing window in the future.

Matthew: Yes, I agree. That's what I was thinking too. Like, "Hey, it's a good time to jump in while the dust is not settled yet."

Chris: Definitely. Yeah.

Matthew: So you have a background really quite heavy in science compared to most people in the space. How do you feel, like, as you create cannabis products that you look at the plant differently than a typical entrepreneur, like, the lens you use when you look at the cannabis plant, and what kinda products you wanna make?

Chris: I think just inherently, I look at the world differently because of my training. And it's who I am, which is one of the reasons why I wanted to go into chemistry. So I really try and see the world in molecules. And that's what the world looks like to me. So I think having that changes how you approach something such as a cannabis plant where you say, "Hey, there's three different major biomolecule classes, cannabinoids, terpenoids, and flavonoids." And there's a host of compounds within each of these different classes. And so you look at them in a different way as these distinct entities. You know, they all have different topology or molecular structure that leads to their physical property and how they're gonna interact with a physiological system. And so, all of that, you know, definitely has been a driving force and a foundation with which, you know, I approach how we look at cannabis.

I mean, at the end of the day people are incredibly passionate about this plant and what it can do, and that's amazing. And so they do everything they can to educate themselves about the plant. But there's a ton of misinformation out there. And if you don't have a fundamental understanding of realizing what information is correct, or what may be inaccurate, it will skew your path forward. And I think that that's been a big difference for me because, you know, fundamentally, I understand molecules. You know, I know how they go together, I can put them together, we can take them apart, and then building from that.

Matthew: Okay. Now, you gave us a 10,000-foot view of Level. But can give us a little overview of your product so we can understand what it is that you offer?

Chris: Sure. So we currently have three different product classes. We have a vape line. So we're in the packs era. That's a legacy product for us, the vape market. It was the first product we ever created as we are trying to build this company and really execute on this thesis of effects-based cannabis. Because in order to really formulate with unique and more rare cannabinoids and ratios you don't access from the plant, you have to first access those cannabinoids. And that's very expensive. And so if you try and put unique formulations in a vape, it becomes prohibitively expensive. And so you know, nobody's gonna be buying $500 vapes for you to build your company, especially when the whole thesis of...this whole market of effects-based cannabis is we're having to create it at the very time that we're building this industry.

And so you have to kinda leapfrog this thesis with the products you're putting out. And then people experience it. And they either agree with your thesis or they don't. And you have to build this sustainably. So vapes are challenging to do that way. So we started with vapes, but the whole intent was really to develop new and unique product classes, so then we could use these unique formulations, and actually make them affordable to get to market. So the other two products we have right now are a three-milligram sublingually administered tablet called a tablingual. And we also have the 25-milligram orally consumed concentrate in the form of a tablet as well. And within those product classes, you know, we have either highly enriched or single isolate cannabinoids that we originally put on the market. So for instance, in the tablingual, you can get THCA, you can get Delta-9 THC, you can get CBD, Delta-8 THC CBG. And then we also have pre-formulated blends, which is where we're really trying to shift you as we move forward.

Matthew: Let's talk a little bit about some of the...you don't see as much about these other cannabinoids that you mentioned CBG, THCV, and so forth in dispensaries. It's not as popular to see it on a box. Can you talk a little bit about that as well as the sublingual, and what that experience was like?

Chris: Sure. You know, the reason we don't see this yet is because we're building an industry out of a legacy industry that was really hyper-focused on one cannabinoid, Delta-9 THC. So all of the plants that were cultivated and any products that were made from those were gonna be very high-potency in Delta-9 THC because that's where the market was. And so it was hard for people to either have the genetics or the vision to say, "Hey, I really wanna explore some of these other cannabinoids," because there was no market for them. So nobody knew if they would sell or not. And there was an education that had to be presented, so people understood what these cannabinoids were.

So getting to these more unique, say THCV or CBG, it takes a lot of effort to get there. And without having an established market, most people didn't want to, what I would say, kinda pioneer that. But that was the opportunity for us. And so we spent several years finding the right partners that could help us with genetics, with the cultivation, so we could actually get access to these unique cannabinoids. And so once we have access to them, we put them into a product such as a tablingual so we can, A, really experienced what that effect is going to be like, because there's really no data out there. And, B, figure out if we can productize it, and get it to market, and do it in such a way that these are very expensive cannabinoids. So how can we at least make them affordable enough that people will try them? And so the three-milligram tablingual is a great vehicle for that.

Matthew: Okay. Three-milligram, I mean, I guess anything under five-milligram do we consider a microdose? I mean...

Chris: I do.

Matthew: Okay. That's what I was wondering. Like, is that generally accepted there? Okay.

Chris: I mean, yeah, I think it's really interesting, right, because it's... Yeah, I would say anything under five. But I would say three or less is really, "microdose." The name is a little inaccurate as well. I really call them millidoses because that's really what they are. Tthey're milligrams. But for the cannabis industry, you know, I would say one to three milligrams. It falls into the microdose space. Yeah. So you have to be judicious in your choice in your route of administration when you're dealing with small amounts of cannabis, because if you ingest very small amounts of cannabis orally, then you put them through the metabolism of your body.

So they go through presystemic or first pass metabolism. They're gonna get pass through the liver on their way to the bloodstream, you know, from the stomach or into the small intestine, depending on a matrix that you're trying to extract this from. So you get really delayed onset. You're gonna lose fidelity of the actual cannabinoids that you're trying to get into the system, because they're gonna be changed in different ways through this metabolism process. When you do it sublingual, you bypass most of these processes. So the fidelity of your formulation remains much more true to what you're intending. And onset is much, much faster because of the route of administration.

Matthew: Okay. I know, it varies from person to person. But what would you say a typical onset would be for the tablingual?

Chris: The tablingual is within 20 minutes. Empirically, most people who use it, they report that they reach the plateau of the effect within five minutes.

Matthew: Oh, the plateau of the effect within five minutes. Wow. Okay. What was the 20-minute figure then you said?

Chris: Well, within 20 minutes, you will know where your plateau is because after 20 minutes, excuse me, everything is mostly been taken up and it's entered into, you know, your bloodstream and into the system.

Matthew: Okay. So we skipped the whole digestive GI tract, liver, and then it goes right into the bloodstream sublingually?

Chris: Correct. Yeah. It actually goes directly into your heart, through the superior vena cava, which is the main artery there from the oromucosal area in your face. And so that's what really it's a very, very rapid onset.

Matthew: That's great. That's great. I think about CBD, you know, sublingually all the time. And I don't typically think about, you know, tablingual, so this interesting new format. Do you find people are using the, you know, CGB and THCV in different ways, then let's say Delta-9 THC.?

Chris: Yes, I do. It's a yes and a no, but I would say mostly yes because the thing about...So there's 10 classes of cannabinoids. Delta-9 THC is one class of cannabinoid that has psychoactivity to it. Other classes have psychoactivity as well, but a lot of them don't. So you take CBD it sounds like, is that correct?

Matthew: Yeah.

Chris: Yeah. So although you may not experience the same psychoactivity or headspace of Delta-9, there's a physiological change when you take CBD. And some people do register, "Hey, you know, I feel different in my head. I feel the change," right? And whether that's an artifact of, "Oh, I'm actually really relaxed in my body now," or, "My pain is attenuated, so my headspace is different," people really...they still report a change in using CBD a lot. CBG we found is even much less than that. It's purported to be very good for anxiety. And that's what empirically we see with it. People use it as an antianxiety. And especially in the tablingual, it's a very fast onset.

And then the real magic though of the cannabinoids is when you start using them in concert together. And so CBG, when combined with THCA, or CBD, or even THTV gives you different synergistic effects because you're, you know, accessing this entourage effect. This multidrug components working in concert for synergistic effect.

Matthew: Yeah. I guess people are always curious, like, what exactly is that synergy? And we talked about it with the entourage effect. But how do you experience it and your customers experience that synergy with the different combinations of the cannabinoids? Especially, I mean, you're thinking of this in terms of molecules. So you're probably saying, like, which is the optimal molecule interaction that gets me the desired outcome? So looking at that question, what would you say?

Chris: I think, you know, this is all very qualitative still, right? This is such an infancy, and we have very little data that as we keep collecting and driving toward so we can have more rigorous data collection and analysis, we can really hone in on these. But, you know, empirically what we find, and this is very interesting, I'll use the example of CBG. CBG has what I call this [inaudible [00:17:54] kind of reactivity with other cannabinoids. For some cannabinoids, it potentially eats them in a very significant ways.

So here's something most people don't know. If you have been consuming, say you smoke, and you've been smoking throughout the day, and you've had a few different strains, you kind of reach a plateau, and you really, you know, you might say, "Hey, I wanna prolong this little more, and maybe I want a little boost and I can't actually increase the psychoactivity because I've kind of been consuming all day," a little bit of CBG especially subliminally, it is amazing. It enhances your high significantly and very quickly. But if you take CPG with something like THCA, It appears to significantly potentiate either the anti-inflammatory or no subceptive qualities of THCA. And so this one cannabinoid, when combined with different cannabinoids and potentially different ratios, has a very significant impact on the nature of that experience.

Matthew: It makes sense. That's really cool. Gosh, it seems like there's so much promise in this area. It's just crazy. I see why you're excited about it.

Chris: I absolutely think so. I mean, this is a tabula rasa. This is a blank slate. We really get to push forward in exploring what plant medicine in this form can really do for humans, right? And in a new way, we know we've been using cannabis. Humans have evolved with cannabis for at least the last 10,000 years, and probably for the last hundred thousand. But, you know, we have supportive data back to 10,000 years. So this is an ally. This is a plant ally for us on this planet. And so it's really how do we really work together now in new ways, and really explore and discover. And so I think it's incredibly exciting.

Matthew: You've somewhat answered this question already. But I was hoping to get a little more detail here about how you call Level a cannabinoid company not a cannabis company. I think that's kind of the bow wave of maybe a new trend here because you're really trying to get the benefits of the cannabinoids. But why make that specific distinction?

Chris: Well, I think for us, it defines exactly what we are. So, you know, we use a lot of different terpenoids and terpenoid ratios we've gotten from the plant, terpenoid mixtures. We still have flavonoids that are present in a lot of the distillates we use and through some of the extraction processes like in our THCA that we formulate with. We still have flavonoids in there, terpenoid. So we still keep these other components of cannabis. But for us, those are really nuanced. The thing that changes unequivocally in our experience, the nature and the experience of that effect, it is the combination of cannabinoids, right? And a lot of people are understanding this now when you think about in the context of CBD, right?

So if you take a 1 to 1 THC, that's a very different formulation and effect you're gonna get, than say if you do a 20 to 1 CBD to THC. And so people may not consider that when they're looking at it. But inherently, people are being trained to understand there's a difference when you start combining cannabinoids. Now, the world is still really only playing with THC and CBD. But we're really interested in driving hard with all the other ones. And so we work in cannabinoids. We have access to 11 unique cannabinoids in isolation in our facility. And that's what we play with right now. And we have three more coming online by the end of the year. So all of a sudden, this becomes a huge combinatorial challenge of how you formulate these different cannabinoids. And the whole thesis of the company is driven by a cannabinoid. And that's why we're a cannabinoid company.

Matthew: So the tablinguals you like, because you can bypass the whole kind of GI tract and liver, and go straight to the heart, and probably more precise dosing, you know, faster onset. But is there anything else that you like from tablets or the reason you like them more and kind of the focus is moving in that direction for you?

Chris: Yes. I mean, obviously, the form factor. Tablets are the ubiquitous, right? We grew up in a culture that, you know, if you're young, and you're sick, and you have a headache, or you have a fever, you get something that's a tablet, or it's a hard capsule, right? Or if you get a prescription medication from the doctor, it's gonna be in the form of a tablet. And so I think, as a society, we have an inherent bias that if it's a tablet that, you know, "Hey, I think I can trust what's in this." Well, that that's a big thing right there for people to be like, "Okay. I'm gonna trust what's in this because of how visually looks." There's a reason why pharma and the drug companies formulate everything in tablets. This is a pretty effective way for delivering an API, you know, a drug.

And so then you take that a step further and say, "Okay. Well now, if I have those two things, why is that?" Well, it's really easy to standardize. You can make a very explicit standard formulation, it can be shelf-stable. You know, all of a sudden, you get all these properties. You want different properties when you're taking something sublingually versus when you're gonna swallow it or you're taking it orally. And so you can tune the properties through the excipients or, you know, people consider this filler, but it's the other things that make up the tablet besides the drug. And so you can really modulate these in different ways. And you can do that by using components, which we do, that are only plant-derived. They're vegan, there's no gluten in them, right? You can source all of this. And so you can have a lot of flexibility to formulate for an intended effect, not only I think through the cannabinoids you're using in the formulation, but also in how you deliver that through the vehicle. And so it just made sense to us.

Matthew: Okay. How do you think cannabinoids could help with a hangover?

Chris: Yeah. I think that they can help a lot. We actually have a product called Hangover. We developed it over the past year by working with a lot of different...We've been working with a lot of different cannabinoids for four solid years now. So anecdotally, empirically, we have a sense of what kind of effect you can expect from a given cannabinoid at a certain dose within, you know, for a range of people. Let's call the first standard deviation, say it's gonna be 80%, 85% of the people who try it will probably fall within this first standard deviation.

So we take that and then we formulate from there saying, "Well, we understand that these cannabinoids help us feel a certain way or maybe help reduce pain significantly. This one is good for anxiety. And we find that this one is really good for your stomach," right? It helps nausea a lot from Delta-8 THC. And so we looked at it approaching it that way. A lot of people who consume cannabis, if they do have a hangover or if they've overindulged one night, you know, if they consume cannabis the next day, it tends to help. And so we took that legacy information and then just applied our method of thinking about product formulation. And, yeah, came up with a formula that we think works pretty well to help alleviate some of the symptoms that you experienced from that.

Matthew: Yeah. I mean, someone with a chemistry background, we don't really think about what's happening a lot when we're drinking alcohol. But that, you know, ethanol and what it is, and what it does to our body, you probably think about that more as someone with a chemistry focus like, "Hey, what's happening to my body right now with this poison?"

Chris: Yeah. I mean, it's something most people learn in their, you know, sophomore organic chemistry class in college, you know, the process of alcohol, ethanol being converted to methanol. So it gets oxidized and then it goes through other processes in your body that lead to some of these effects, you know, that we feel if we overconsume. So, you know, and that's fairly standard knowledge that people can get to. But, yeah, it's something that I keep in mind. It doesn't prevent me from overindulging, but I definitely keep it in mind.

Matthew: So you take Hangover yourself then when you're overindulge, and you feel like it's a...

Chris: I do. Yeah.

Matthew: And how fast do you typically feel the impact?

Chris: For me, it's usually about 30 minutes, you know?

Matthew: Wow, that's quick.

Chris: Yeah. And there's different ways you can use it. And this is the beauty of these products. And everyone has, you know, an endocannabinoid system and ACS. All of us are slightly different. This is why people react to cannabis in different formulations in different ways. But part of all of this, too, is really understanding that cannabis is a journey, right? Cannabis is a journey that we all...those people who choose to use it, they're going to go on this journey because we have to figure out what works and what doesn't work for us. And so, you know, part of what we're trying to do at Level is to help guide people on this journey of what cannabis is, so they can experience the possibilities.

And in doing that, you know, it's important for people to understand cannabis is not a silver bullet. if there's something wrong physiologically with you, or you have severe depression, or anxiety, or a multitude of other things, cannabis doesn't cure that for you. What it does is it helps just get your body to a place and your mind, hopefully, that you can address the lifestyle or behavior changes that you have to take care of in your life, so you can heal. That's important for people to understand. I'm circling back now to, so there's different ways that you can use something like hangover.

Some people use it when they wake up in the morning and they say, "Oh, you know what? I feel a little hangover from last night. I'm gonna take half of a tablet right now." And 30 minutes later, they're great. Or some people say, "You know what? I think I'm gonna be hungover tomorrow morning. I'm gonna take a tablet right now. And it's gonna help me all night as I sleep, and I'm gonna wake up, and I'm gonna feel better." And so there's not a one size fits all for the products that we make and most cannabis products that anybody makes. And so, you know, it's really about giving people the confidence and trust in what you're doing that they're willing to allow...they're willing to go down this journey, you know, with you.

Matthew: I keep on thinking about that book, "Brave New World," by Aldous Huxley and the drug in there called soma. I don't know if you ever read that book.

Chris: Yes.

Matthew: But it feels like we're kinda moving towards that experience, like, that's coming at some point where you kinda have this mildly euphoric but no after-effects or, you know, you don't really lose your ability to think and reason and do things like that, but you get kind of a mild euphoria. Do you think that's coming?

Chris: I think versions of it are coming. I mean, everything still has to be in moderation. And I don't think you were suggesting it wasn't. But I think ultimately, you know, it is always a balance. And as much as I'm a massive proponent, and I'm obsessed with cannabis and what we're doing, at the same time, you still realize this is a drug. And, you know, you have to be conscious that there may be changes that happen, especially if you use it long-term. So it's good to take abstinence breaks. It's good to, you know, stop using one cannabinoid potentially and try other ones, just to let your body reset and make sure that things are still functioning how they should, you know? And I talk about that as context of cannabis, but it can be food, it can be alcohol, it can be exercise, right? We just need to live a life that has balanced to it.

Matthew: Anything of interest to you in the psychedelic space in terms of, like, MDMA, commonly called ecstasy, psilocybin, or LSD? Do you think about those areas at all and how there might be some dove-tailing with what you're doing with cannabinoids?

Chris: Yes, absolutely. So I tell people now, Level is a drug company. We are a cannabinoid company. That's what we're focusing on first. But yeah, as plant medicine comes along, and, you know, if we can get the powers to be to make changes in our lives, and allow for microdose psilocybin, that'd be amazing, right? We have a product for it now. So it's, like, "Hey, 10 years from now," and you can do it through microdose. It's, like, there are 50 micrograms of psilocybin in your tablingual, you know? You walk into Walgreens and CVS, and pull it off the counter.

Matthew: Yeah, Because that is a big problem with psychedelics, especially people, their first couple times, they're like, "How much am I taking here?" And so that's more so than, you know, other things [inaudible [00:31:06]

Chris: And it's a dedication, right? You're on that ride when you've taken it. So, you know? And I think that there are. And we see a lot of studies that there can be a lot of profound positive impacts that happened from a microdose. And, you know, when you're talking about LSD, it's a shoot in microdose. And LSD nowm it's probably, you know, your nanodosing. So I guess you have to change the actual dose in it. But, yeah, I think there can be a lot of positive things that come from it. And so it'll be exciting to see what happens in the next couple decades.

Matthew: Well, how do you think about replacing a morning ritual, like, coffee with some cannabis product or cannabinoid experience?

Chris: Yeah. I definitely think there's room for that. I think one of the things that, you know, any new or disruptive pattern or behavior industry has to deal with is inertia, right? So there's a, what is it, 3, 400 years of coffee that people have been using. And so it's deeply ingrained in many different cultures. So I don't know that it replaces it so much, especially in the near term, you know, the next 20 to 50 years. But I think it definitely comes in and it enhances, or it's used as an alternative at times. And we're actually seeing this a bit from feedback we're getting from people with our...it's called Stimulate. It's a tablingual. It has THCV in it, and it's intended to replace an afternoon cup of coffee. It's a focusing tool, if you will.

And so we have a lot of people that reach out to us and let us know how they're using it. And some people are using it to replace their coffee. Some people use it in the morning because it gives them energy for the day before workouts. And other people, they use it synergistically with their coffee. They say, "Hey, there's nothing better than a cup of coffee and a Stimulate tablingual because then I'm right where I wanna be".

Matthew: "I'm really jacked. Thank you, Chris, for making Stimulate." Okay. So what's meaningful about your products that we haven't addressed, but you feel, like, the public doesn't fully grasp or understand to a level that you think is warranted?

Chris: Yeah. That's an excellent question. Our products are fairly sophisticated. And something that we haven't been able to really put a lot of resources into yet is really education, and educating people. You know, what is the intent and purpose of this product, and then how do I use it? And one thing that's challenging for people, because it's a heavy lift, is people really understanding, "Hey, I've got six different cannabinoids available to me. How can I formulate? How can I be my own master formulator?" And I know that, "Hey, when I'm feeling this way, I take one CBG and half a Delta-9 and, you know, a Delta-8 THC." And that's hard. That's really challenging for people because there's just so much information that they have to have. And so part of the challenge that we had was we got really far out in front of where the market was.

And it was intentional why we did it. But now, we're really figuring out how to dial it in and educate people better of... We'd like to say that we make a cannabis products for anybody, right? If you want it for a recreational purpose, great, we have that. If you're looking to try and help you with anxiety or depression, there's products that will help you with that. Sleep, pain, the whole spectrum. And so if you're a human, we make a product for you. And I think that that's the challenge for us is trying to educate people on that.

Matthew: Sounds like you're discriminating against cyborgs, Chris, only make stuff for people. I hear you.

Chris: Yeah. I'll work on that.

Matthew: Where are you in the capital-raising process?

Chris: We are literally about to sign our Series A docs this week.

Matthew: Wow. Good timing. So for listeners that are interested that are accredited investors, is there room for them to reach out or anything like that?

Chris: This round is full.

Matthew: Full?

Chris: It's closed. Yeah. This was a really long fundraising process for us. So I'm happy that it's coming to a close. But they will definitely be a Series B.

Matthew: Okay. Well, you can tell us how to reach out to you for that type of thing as we close. But any notable investors? I think I heard Dave Asprey, the bulletproof guy. Did he invest in you, is that right?

Chris: So we had a safe round that we had from 2016 into the middle of 2017. And so we had quite a few safe investors. And so yeah, I don't know that I can comment on any of them. I haven't gotten permission to fully disclose who actually invested in that round. So I prefer not to comment on that.

Matthew: Okay. I think I heard him say that some months ago. So good to do it that way, though. So that's cool. You got some notable investors in there, too. That always helps.

Chris: It definitely does.

Matthew: Yeah. So Chris, let's go to some personal development questions to help listeners get a better sense of who you are. Is there a book that's had a big impact on your life for your way of thinking that you'd like to share with listeners?

Chris: Yeah. Actually, I would say there are two books, kind of a bit different than each other. "Jonathan Livingston Seagull." You're familiar with that book by Richard Bach?

Matthew: No.

Chris: So it's a short book. I read it in my early 20s when I was in the military. I can't really describe why it had such an impact other than it was just kind of one of those books that inspired you that there's no limit to possibility if you just go for it. So "Jonathan Livingston Seagull" is one of them. And the other one, shortly thereafter, a few years later that really had a profound impact was "PiHKAL" by Alexander Shulgin.

Matthew: Well, that's the first time I've heard of either of those. That's great.

Chris: PiHKAL, it's, Phenethylamines I Have Known And Loved. And so Shulgin essentially talked about his journey from his early days through the psychedelics that he experienced through his whole time at Dow, and then him developing his own independent lab, and him pioneering all of these. He essentially took MedChem, medicinal chemistry principles, and appled them to psychedelics, and then, you know, tested them on himself, and his close group of friends, and wife. And so he talks about that. And then the second half the book is all of his lab notes. And it set the DA off once he published this because he essentially was opening up a free source of, "Hey, this is how you make all these some amazing, some really challenging psychedelics." And they're not all meant, there should be in human hands, but he wanted this information out there. And so that book and my experience at Burning Man when I was 24 is what put me down this path, pretty much.

Matthew: Oh, good, good. And what do you think is the most interesting thing going on in your field apart from what you're doing at Level?

Chris: That's a really challenging question, but it's a good one. I think, ultimately, what I think is really interesting is there's perceptions in this industry across a lot of the sectors, but also outside perspectives that looking into the industry and us looking out. I think if I had to put my finger on it, it's the juxtaposition of this exponential growth that everyone thought was just gonna happen once legalization came online, and how fast this industry would be moving. And this industry is moving very fast. It's very dynamic, but it's nothing, like, the reality of what all of us thought was gonna happen over the past two years. And it's interesting to really watch as you get operators that saturate a state, then they hit a plateau. They can't grow anymore because we're having the slower growth of consumers, I think, coming online, fighting regulations, legislation, taxes, so then they start going state by state. And this process of trying to show this growth and how we're gonna have this exponential growth, like, tech companies have, it's not there. And I think over the next few years, we're really gonna see some implications from this.

Matthew: Now, I have a Peter Thiel question for you. What is one thought you have that most people would disagree with you on?

Chris: So how am I a contrarian?

Matthew: Yes.

Chris: Yes. Actually, the company that I will worked for, Emerald Therapeutics, before, it was a fully automated life science laboratory. And I worked on the research team as the chief chemist. That was a Founders Fund company. And so this was actually a question that they asked people during the interview process.

Matthew: Yay, perfect.

Chris: But yeah, what's my contrarian differentiator? I think for me, you know, it's really I think, just in how you view the world. And for me, I try and view the world in negative space, not the things that you can actually see. But, you know, it's the interstitial space. And, you know, when you talk about molecules and at the molecular level, when we look at a molecule, we see these... We can come up with a schematic of what a molecule may look like. And we can model it in three dimensions. And I can physically touch a collection of these molecules in bulk at the macroscale. But everything is really space, right? And so it's how does that space affect the world in which we live, and how we move, and everything about life as we understand it? Because it's not really about what you can see and what you can touch. It's everything that you can't see and can't touch. And I think that's really where a lot of the magic of life is.

Matthew: One more question. And this is gonna demonstrate my chemistry ignorance and biology ignorance. So maybe you could keep the answer for a layperson. So we have a molecules and smaller atoms. And then smaller than that is quarks. And is there things yet smaller we keep on discovering going on?

Chris: Yeah. So you're gonna get outside my wheelhouse here because, you know, physicists are high-energy chemists, but yes. Here's how I look at it. I think we would never stop discovering things because the more you split things apart, you're always going to create fragments in different ways. And when you start getting into subatomic particles, it's definitely a place that I don't spend a lot of time. I think that it's, like, anything, it can be a rabbit hole. And if we go chasing through these things, it's gonna be this elusive pathway. And I think we'll get information from it, but how good is the data? So for me, you know, I try and stay on the level of things that I can understand of a more holistic thing. And that's kind of where I was saying about if there's a molecule represented in space, the molecule is there, but there's all that space, too, that helps define what that molecule is. And so it's really a holistic, I think, approach for myself of how I try and view things.

Matthew: Yeah. You hear sometimes musicians even say like, it's the space or there's no sound at all between notes. That's just as important because it, like, gives rise to the tone and texture of the next sound as it unfolds. So I think I get what you're saying there.

Chris: Yeah, awesome.

Matthew: Chris, as we close, how can listeners learn more about Level products? And for credit investors, how can they reach out to you?

Chris: So our website's www.levelblends.com. And the website has a lot of information on it. You can learn about the products. You can also go to a store finder if you're in California. We're in I think 280 dispensaries throughout California. So you can find hopefully dispensary near you, and you can find products. And then, you know, people can reach out to me directly. It's chris@levelblends.com.

Matthew: Well, Chris, thanks so much for coming on the show. We really appreciate it. Are you related to Ralph Waldo at all, Emerson?

Chris: You know, I can't unequivocally say that. My mom had done a lot of genealogy. And my great uncle says that we were, but I haven't seen the actual tree. So, I'm not sure.

Matthew: I don't know. He wrote what "Leaves of Grass," and here you are playing with something similar. Okay. Have a great day. Thanks for coming on the show.

Chris: Matt, I really appreciate it. Have a great day, too.

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 cannainsider.com/itunes. What are the five disruptive trends that will impact the cannabis industry in the next five years? Find out with your free report at cannainsider.com/trends. Have a suggestion for an awesome guest on CannaInsider? Simply send us an email at feedback@cannainsidercom. We'd love to hear from you.

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This Canadian Company Is Revolutionizing The Retail Experience…With Music

ben kaanta westleaf

The Canadian cannabis market continues to mature and flourish under a liberal national legalization policy, and here to help us understand the latest trends in Canada is Ben Kaanta, COO of licensed producer Westleaf Inc.

As a vertically integrated Canadian cannabis company, Westleaf has significant assets operating under development across the value chain. The company builds and operates cultivation, extraction, processing, manufacturing, research and development, and wholly-owned retail. 

This includes Westleaf’s new retail brand Prairie Records, a unique dispensary that creates an unparalleled purchasing experience celebrating the inherent tie between music and cannabis.

In this episode, Ben shares with us an inside look at Prairie Records and where he sees the Canadian cannabis market heading in the next few years.

Learn more at https://www.westleaf.com 

Key Takeaways:

  • Ben’s background in mechanical engineering and how he came to enter the cannabis space
  • Differences Ben has observed between the cannabis market in the US versus Canada
  • How Westleaf has evolved since it was founded in 1992, including the scope of its grow operation and the products it currently manufactures
  • How Westleaf came up with the idea to create a record store retail experience
  • A deep dive into Westleaf’s strategy in determining where to position its dispensaries
  • An inside look at the Prairie Records dispensary and the unique customer experience it works to create
  • The capital-raising process involved in launching Prairie Records
  • Westleaf’s upcoming initiatives and Ben’s insight on what Canadian cannabis will look like in the next 5 years
Read Full Transcript

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 cannaninsider.com. That's cannainsider.com. Now, here's your program.

The Canadian cannabis market continues to mature and flourish under a liberal national legalization policy year. Here to help us understand the latest trends in Canada is Ben Kaanta, COO of Westleaf, a licensed producer, or LP, in Calgary. Ben, welcome to CannaInsider.

Ben: Thank you, Matt. It's a pleasure to be here.

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

Ben: So today, I'm actually located in Calgary, Alberta, which is home to Westleaf's headquarters.

Matthew: Okay. And I'm in Chicago. Tell us, what is Westleaf at a high level?

Ben: So Westleaf is a vertically integrated Canadian cannabis company. And what I mean by that, some people toss that term around, is that we actually own control or have interests and assets across the traditional value line of the chain. So that includes cultivation. So we actually grow our own product. We have extraction and manufacturing capabilities where we will extract the oil out of the flower trim and convert it into end products. Additionally, we have product branding and we actually have our own retail spaces as well.

Matthew: Okay. Ben, can you share a little bit about your background and journey and how you got into the cannabis space so we can get some context of how you ended up in the great white north?

Ben: Yeah, happy to do that. So I actually started off as a mechanical engineer, worked on ion thrusters and some other research for NASA. From there I went into product development for biomedical instrumentation, primarily on cancer diagnostics. And that led me to a company where I did operations, and oversaw the startup of several particle accelerator-based cancer therapy centers. There's actually, while I was working there, a friend of mine introduced me to Mjardin, who you've had on this show before, and at the time they were one of the largest producers of legal cannabis based out of the United States. So I worked there for a couple of years as their director of operations where we saw the cultivation of several indoor and outdoor grows and as well as some greenhouses. And that was a great time, and several colleagues and myself, we eventually split off and developed our own small company doing similar type of work, but mostly on the advising space.

And between that and in our time in Mjardin, we'd actually consulted in 11 different U.S. states, 5 countries, operated in 24 different facilities and we designed over 40. And so we really loved it, but one of our first clients was Westleaf. And we started working alongside them for several months and they actually asked us to join them early on and we said, "You know what, we're kind of enjoying our own thing." But we watched them develop their strategy and how they're going about their process for working in Canada and their retail strategy. And we fell in love with it and we just couldn't say no after a while, and we decided that we had to be a part of them. So we ended up joining them all as executives.

Matthew: Okay. Okay. So you've been involved in the U.S. cannabis market and now in the Canadian cannabis market. What are kind of the differences between the two? How do you compare and contrast those in your mind and keep them separate? What are the big themes and how they're different in your mind?

Ben: Yeah, so as you know, the United States is kind of funny in that there's not one contiguous market. So every market there is a little bit different. That said, there definitely are some things that are unique about Canadian cannabis I've seen. And I'll break it down kind of by the different verticals here. So if we look at on the cultivation side, one of the things we noticed is that since Canada's program was originally started as a medical program with mail order, that really drove the cultivation companies be focused more on efficiency more than quality.

So, just like a brief example on that, when you look at product at a dispensary in the United States, typically it's hand-trimmed and there's a...very much concern is put around the aesthetic appeal of it. Whereas what we'd see in Canada is that there are using processes that valued just getting that product from harvest to the customer as fast as possible, and little things such as using whole bunch of machine-trimming versus hand-trimming would reduce the aesthetic appeal, but also knock off a lot of the trichromes on the extraction.

And another piece we've seen is on the extraction side, right? So this is similar to other young markets. There aren't as many products available. And so, for example, today, you can only get extracted oils and capsules. And on October 17th, they're gonna be opening that up to more products such as vapes, edibles, topicals, things you might see more in the United States markets. But what that means is that today's extractors really don't know how to make all these other products. And then finally, I would say that on the kind of the retail and branding side, this is why one of the biggest differences that we've seen, Canada is very restrictive on what you can do. So if you got to buy cannabis today at a retail store in Canada, what you'll find is that 80% to 90% of the label is warnings and facts from Health Canada, and you have the small little space about the size of a U.S. postage stamp where you can put your brand. So there's really not a great opportunity for people to brand up here.

Matthew: Good point. So how do you brand? That's kind of a difficult question. It's kind of word of mouth, I guess, is experience and aesthetics. Some of the things you talked about are gonna become a big, big part of it. Also, there's a lot of challenges to vape pens and vape cartridges, you know, viscosity, and kind of the additives to make sure it all works properly. So I'm sure there will be some hiccups in the beginning that you've seen in the U.S. that you can bring over. Is there anything else that you feel like gives you maybe a little bit of advantage having worked in two markets?

Ben: Yeah, so I'd say there's several different things there. And you touched on a few of them. You know, so one is aspect. You know, we've worked in these 24 different cultivation facilities, so we've learned a lot about what works well and what doesn't work well. And one of the things that we're seeing is companies who are going big, they're announcing these, you know, million square feet facilities. And we've seen this happen in the United States before where people will do this, they'll take an old greenhouse and they'll think, "Hey, this could grow great tomatoes, surely it can great cannabis." And what they don't take into account, that cannabis is a unique plant and it's held to different standards such as the microbials. And so they'll grow a bunch of product, but it will all fail. So on the cultivation side, we were very thoughtful and careful about when we designed our facility, about making sure that we can go craft at scale.

And on the extraction side, you're absolutely right. There's a lot to do with the viscosity, but also even whose hardware you use and how often it will fail. And so to that end, we actually partnered with a company out of Denver called Xabis. And so they've developed over 24 different form factors and 200 unique skews working in multiple extraction labs across the United States. So we wanted to take their skill sets and knowledge because we recognize that there's a lot of mistakes that people are gonna learn the hard way and why not fast forward ahead and just cut to the end working with experienced people.

I think the one other thing that we've seen, you know, when I look across the United States markets and how many we've seen kind of mature, is that you'll see the economic shift throughout that value chain. Early on there's a lot in cultivation and some in retail. But the best thing to do that we done is to be vertically integrated so you can control that whole value chain. So those early stages you can capitalize on, you know, where some of the good profit margins are and the cultivation side, but over time it will shift. But additionally, you wanna have control over your supply chain. You know, even on the extraction side, we've seen companies who struggle to make sure they're getting good, consistent feedstock for extraction. And by us growing our own product, we can make sure that we're providing high value and good quality product for our end consumers, but also for our retail stores to pull through and for our extraction facility to use as feedstock.

Matthew: Okay. And just a practical question here, I'm pretty quick to spot Canadians when I hear the word of about instead of about, or when they say A to Z. But other than that, I really cannot tell I'm speaking with a Canadian. Is there any little things that you do, little idiosyncrasies that reveal your American-ness and kind of out you to your new Canadian countryman?

Ben: Yeah, it's funny you mentioned that, there's that and a couple others I've found. Yeah. In general, it's interesting to me. Calgary is very much like Denver where it's a busy city, right on the prairies up against the rocky mountains, but there are few things, I think, give me away. One is I've had to learn to say washroom instead of bathroom. Another is that I found that when I use my credit card, and this is just a funny little thing that, sometimes they'll require me to give a signature, whereas the Canadian credit cards almost never require you to give a signature. And then the final thing that I've certainly saw that some this weekend is that you do not go hiking in the mountains here without bear spray. There is a lot more bears up here.

Matthew: I bet you don't wanna find that out too in the wrong way.

Ben: No, you don't. So they're pretty serious about that. And I appreciated it this weekend.

Matthew: Although in boulder I did have a bear family live in our tree out front, a mother and two cubs, and they came back more than once. And you hear him in the middle of the night and that is up close and personal because you can...they breathe so loud, especially the mother is that, it's like, you can feel their breathing like through the wall. It's just unbelievable. Like the power of those creatures. And to watch them scale up a tree, they can just fly up a tree in just a moment, they're up.

Ben: That is amazing.

Matthew: I hope to never have to out run one of these things. So you carry bear spray, and have you had to use it yet?

Ben: I have not. But it's interesting when you read the directions, they say to make sure to aim down the nostrils of the beast, which I'm kind of concerned. I didn't wanna to get that close, that my aim would be that good.

Matthew: Yeah. There's a lot of YouTube videos of people shooting bears and mountain lions pretty much in the face with those things and it really seems to work. I mean there's a lot of power that comes out of that bear spray. You guys seem to shoot it pretty far.

Ben: Yeah, yeah. Thankfully I haven't had to use it yet or practice it, but it's good to know that it works.

Matthew: Yeah. Okay. Well enough about bear spray here and wild animals. Let's get back into cannabis. Okay. Now tell us how many licensed producers, or LPs, there are in Canada.

Ben: Yeah, so the last report I saw that, which was May of this year, 2019, was that there were 175 approved licenses, which is up from about October last year when it's 132 when it first become more technically legal. But according to Health Canada, there's actually like 614 applications in the queue as of March of this year. So there's still quite a people, a number of people in the queue, and they've recently made some changes where they are making it so that they're prioritizing applicants who've actually built out their facilities, which is great, because there's a lot of people who have an interest in it, but not everyone has actually gone through the work to design and build out a facility.

Matthew: Okay. And what types of products are available for consumers to buy right now?

Ben: Yeah. So right now you can buy flour and pre-rolled joints. You know, on the more traditional side, as well as they have derivative products that are quite some right now, so oils, such as tinctures or sprays and capsules. And we actually have our own brand of a store. It's called Prairie Records, which we sell those and we really focus kind of on the higher standard portion of that chain.

Mathhew: Okay. And then, what's coming down the pike in terms after October 17th?

Ben: Yeah, so they're gonna open it up pretty well. There's still gonna be a lot of restriction on the branding side of things, but they are opening up vape cartridges. So I expect to see a broad market there. And as you know, in the United States, in markets where extracted products are available, you know, it takes up typically, you know, 50 or more percent of the market. We expect to see a lot of vape cartridges coming online. Additionally, they are saying they're gonna allow concentrates, you know, so the shatter and wax type of products. Candies, beverages, chocolates and topicals are some of the different things. They're all going to be coming online there. And it's gonna be a slow roll is what we're all expecting. You know that October 17th will happen, then you'll start to see more and more products kinda coming online towards the end of this year and the beginning of next.

Matthew: Gosh, I would think that's gonna be a huge demand out of the gate. It's like getting this whole new spectrum of products that you didn't have access to before. I mean, that's exciting.

Ben: It is.

Matthew: Okay. And what's the scope of your grow operation? Give us a well more detailed what that looks like.

Ben: Yeah, so we have a grow operation that's coming online up in Saskatchewan. It's in the Battleford area. And so that place is gonna be about 100,000 square feet when it's fully built out, a little bit over than that, and able to produce 14,000 kilograms of dried cannabis flour in the course of a year once it's fully built out. But we also have a extraction facility that we're building right here in Calgary. And that's gonna be...we're finishing up construction actually as we speak right now. So it's gonna be coming online here this summer and it's gonna be able to produce or actually process about 30,000 kilograms of cannabis feedstock per year. So that's quite a bit. And from that we're gonna be able to produce all those products we discussed. So of course, day one type out products such as the, the oils and tinctures and gel caps. But then we're very much interested in targeting all these other products that are gonna become available to us, such as the edibles, the vapes, topicals, and other high value products.

Ben: How about your background in engineering from NASA, particle accelerators, and everything you were doing before? Do you use that to solve any automation or growing problems or think about things perhaps differently than another executive mind?

Ben: Yeah. So it's hard not to look at things and see problems or ways you can improve, particularly in a young industry. You know, recently one of the areas that we've been looking a lot at is the harvest process. So when you have a crop and you have to harvest it, there's a lot of labor that goes into that. And because there's a high chance of microbial contamination during that period because the plants have been cut down, it's lost a lot of its natural defense mechanisms. A lot of people are touching it. We really wanted to focus on how could we reduce the labor, but also the microbial contamination while maintaining a process that will end up with a high value product? So we've been looking a lot at what are different tools that we can use. And you know, even from just moving the product from point A to point B, as well as helping the people in their work so that they can optimize that and decrease the labor and microbial contamination.

Matthew: Okay. And you mentioned Prairie Records, the dispensary brand, but since we're in a audio medium here, it's kind of hard to express what this looks like. I've seen pictures and the design concept and it's really interesting. Can you kind of walk us through what it would look like to walk into a Prairie Records dispensary? What that look and feel of it is like?

Ben: Yeah, happy to. So this is actually one of the things that really stood out to us, and one of the reasons that the three executives here from Colorado all joined the Westleaf team. So if you look at most dispensaries or cannabis retail places, you'll notice that they kind of gravitate towards one or two different tropes. One is the head shop, you know, so you'll see a Cheech and Chong posters on the wall, tie dye. And I think there's still a place for that in the market, but it's not what's going to attract millions and millions of new users to the market. Right? That is intimidating. The other is you see what people try to say is the Apple Store of cannabis.

Matthew: I've seen a lot of that.

Ben: Exactly. And there's also nothing inherently wrong with that in my opinion. You know, it's a very clean aesthetic. It can be warm and inviting, but it also isn't any different, you know, so there no real way. If you're just another one of those, how do you stand out against everyone? You know, if you were to remove the color palette, it would be hard to tell apart some of those different stores. And we really wanted to do something different. So at a Prairie Records store, right as you walk through the door, the first thing you'll notice is it actually looks much more like a modern day record store. The difference is when you start flipping through the stacks of our records and you are looking at those sleeves, what you'll find on the sleeve is different names of strains or cultivars. So you'll see you a Blue Dream or Girl Scout cookies on there.

And when you take it over and you flip it on the back, you'll find just a little bit of prose on how this type of product might make you feel or what kind of inspired this different cultivar. You'll also find a bunch of information about how much CBD and THC there, what's the strength of that strain, you know, what are the different ways that we offer it such as a pre-roll or just flour. And even a little bit about, you know, what music this pairs with. Is this more of a sleepy time type thing or is this dancing on the sunshine as you walk into our store lab, broken down those different sections? So it really kind of plays off of this instinctual tie that we've all had between music and cannabis.

Matthew: Okay. It's a great idea, really is a great idea. If you can't be first in a category, create a new category where you can be first and own that. So if anybody tries to do that after you, it'll be a comparison. Like, is this as good as Prairie Records? So that's really cool.

Ben: Yeah. And the other thing is you mentioned that as, you know, we talked about some of those branding restrictions that make it really difficult for LPs to stand out. And what we do by having this experience where people can walk in and they have a tactile experience with something and they're flipping through it, they're looking at an album that has colors and it represents the brand that LP wants to promote, it allows them to give branding and an environment that otherwise wouldn't allow that. So with our own products as well as with our other partners, they can flip through there and they can actually see something the way that that LP wishes that they could brand it.

Matthew: That's really cool. And tell me a little bit about how you decide where to position a dispensary. I mean, what's the thought process there? I know, you know, some companies say, "I wanna be close to like a natural grocer or a high end wine bar or coffee shops." There's a lot of different strategies there. I only know, I think Kensington's Lane neighborhood I'm familiar with in Calgary. Maybe you can just touch a little bit about what's your thought processes there.

Ben: Yeah, some of that is similar to the aspects you said there, which is we're focused, I would say, on finding high caliber location where there's a good foot traffic, touristy areas or high traffic areas. But we're also trying to find areas that kind of line up well with the vision of, you know, we're looking for something where there's maybe some recreation going on there and socialization, but we're trying to get it so that there's listening emotions of happiness, discovery, enjoyment. So a couple of examples. Our flagship store right now in Saskatoon is on Broadway Avenue, which is a great walking street. You know, lots of hip cool bars and restaurants along there. It's a very vibrant, energetic community. So it fits in perfectly. You walk past our store, there's great music playing, you walk away then, you hear the music and you can start shopping. Similarly in Calgary, we're gonna have a store located at Palo Stater [SP], which is a music venue. And so it's fantastic for people who, you know, are going to that concert. Boom, we're right there, and you can stop in and experience our store.

Matthew: Yeah. What's kind of the cultural norm in Calgary versus let's say a city like Denver in terms of consuming cannabis outside? What do you see there, just anecdotally?

Ben: It's pretty similar in many ways and that, you know, it is frowned upon to consume largely in public, however, you walk down the street and occasionally get the usual smell of cannabis.

Matthew: Yeah. And where are you in the capital raising process, and what's the process been like since you got started raising capital for Westleaf?

Ben: Yeah, so we started over a year ago, actually really kicked off with a strategic partnership with Thunderchild First Nation, which is an indigenous band in Saskatchewan. They invested $8 million in the company, and it's its largest shareholder, and actually the former chief sits on our board of directors.. Yeah. So that started off and then a few different things including the vertically integrated strategy really kind of put us on the map. And since then we've developed agreements and supply agreements and investments with companies such as Xabis, Tilray, Vivo, and Candera that have allowed us to kind of leverage that and continue to grow. And then I think the one other thing that's pretty unique is that we were able to secure about up to $24 million of debt financing from ATB Financial, which is one of the first traditional lenders I know of to enter the cannabis space in Canada.

Matthew: Okay. I just wanna circle back to extraction really quick. So I'm guessing you're probably doing CO2 extraction, that's kind of the way you're going?

Ben: Yeah, that's correct. We're focused right now on CO2 for several different reasons. One, it's very clean and it's also very diable, something you can dial in. And Xabis has a quite a bit of experience on that and they've got quite a number of years of doing extraction on that.

Matthew: Okay. Okay. How do you kind of measure in your mind how much capacity you need when this market changes on October 17th and you'll be able to have all these extracted products, and how are you kind of gauging how much you should have ready? I mean, that's kind of an art and a science, I guess. What do you do?

Ben: That's exactly what it is. It's part art, part science, and part crystal ball. You know, the great thing is that we do have other markets such as Colorado and Washington and California to look at. That said, you know, so you can predict a little bit about what the market demand is gonna look like. And I always look at, you know, we've done quite a bit of modeling on different markets and what we've seen is that there's micro and macro trends, right? So within each market, as it comes online, there's an adoption rate, but then when you look globally, you'll see that there is overall a greater acceptance going on for cannabis and particularly CBD. And so that's kind of amplifying things. But then there's this last piece of we all kind of know what the other LPs are doing, but you don't know for sure.

So, when you come to your production forecast, we've made it so that we can be quite dynamic, an ability to just scale up or scale down how much production we want to do based upon what are the needs and demands of the market and what else is going on in this market, how much white space is there to grow in different areas?

Matthew: Okay. And how do you think the Canadian market will mature and evolve over the next five years?

Ben: Yeah. Well, so I think there's a few things. One is, you know, we are seeing globally there's more and more acceptance, and I hope that continues and I've certainly seen that as a trend. I've seen some of the negative stigmas being shattered there. You know, I think more and more people are coming up out about how they use cannabis. You know, whether it's for recreation or it's to help treat some mild conditions such as anxiety or depression or other concerns they may have. Additionally, I think that I suspect what we'll see happen over time is that some of those branding standards will relax a little bit over time. I think that people will start to see that the parade of horribles isn't happening and that there are ways that if we want to try to muscle out the black market, you have to learn how to compete with it. So there's things there of...and the black market today in Canada you can find well-branded products for cheap, and that have higher dosing of what would be allowed today under the current regulations. And so I expect that Canada will try to combat the black market by attacking those items.

Matthew: Okay. Ben, I like to ask 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?

Ben: Yeah. So there's been a few. You know, one that really stands out, and this guy does a great Ted Talk. He's a gentleman by the name of Daniel Pink, wrote a book called ''Drive.'' And what he does, he looks at what motivates us, and he really looks at and he explores intrinsically versus extrinsically motivated individuals. And I've always really found, I enjoy working more with people intrinsically motivated. And so I found this to be a great read of, you know, what is it that helps reward those people and then how do you make it so that people are more likely to be intrinsically motivated than extrinsically motivated.

Matthew: Oh, cool. I think I ever read a book from him called ''A Whole New Mind,'' and I thought that was excellent too.

Ben: Yeah, he's great.

Matthew: Yeah, he really helps you see things in a different way. Is there a tool that you or your team use that you consider valuable to your productivity?

Ben: Yeah. So, you know, it's interesting, I've been watching Microsoft kind of evolve over the last few years and they have a product out called Teams, which is a very similar to Slack, which is a kind of an instant messaging chat tool. But it's really cut down on how much we need to use email and it gets people just quick updates and anyone can go in there and check in on the status of a project. Additionally, it allows us to collaborate much easier on documents. And so it used to drive me nuts when someone would send out a press release, for example, to eight people and say, "Hey, everyone, can you take a look?" And then eight different people are exchanging emails and sometimes they're talking about the same thing, sometimes not. And this allows us to all work on the same copy and to be much more efficient.

Matthew: That's a great idea. How frustrating is that when you have a spreadsheet being updated by so many different people? It's madness. That makes sense, or Word doc. What do you think is the most interesting thing going on in your field besides what you're doing?

Ben: Yeah, I think there's a couple different aspects going on. You know, one is that there is a lot of focus in the United States and in other nations about what could happen in the future with cultivation, for example, and where is that production gonna be done. I also think it's interesting to watching it now that Canada has done a federal legal program. There's two different things that kind of in mind. One is a medical research. As I mentioned before, I've worked in biomedical instrumentation but I also worked in cancer therapy. And, you know, with that heavy analytical background, one of the things that I really would love to see more of, is some great research that shows, you know, how can this plant help people and get rid of some of the stigma of that. Another thing is that, you know, with all of these new products coming online and market access, I expect it's gonna be a lot of innovation in Canada on new products and different ways to deliver it. And we have a few things up our sleeve, and hope to talk about those in the future.

Matthew: And then a Peter Thiel question for you. What is the one thing that you believe that most people would disagree with you on?

Ben: Yeah. You know, there's been a lot of talk about cannabis and the cultivation of it becoming a commodity, and I think there's an aspect of that's true, but I actually disagree in that I think that there's always gonna be a space for people who can grow a high quality product that really speaks to a certain market. And so that's something that we've really focused on and we put a lot of our strategy around, is the ability to grow craft at scale. You know, we're not gonna be everything to everyone, we're not gonna be the person with a million square foot facility that's just pumping out a lot of basic product. But I think that there actually is a space for people who are not growing a commodity.

Matthew: Ben, as we close, please let listeners know how they can find you and learn more about Westleaf.

Ben: Yeah, so you can find out more information on our website, which is www.westleaf.dot. And additionally, if you wanna learn more about Prairie Records, which I definitely recommend checking out, you can go to prairierecords.ca, or you can check us out on Instagram and Facebook at prairierecords.com

Matthew: Well, Ben, all the best to you. We wish you good luck, and keep us updated on how things progress in Canada, and I really want to see a one of the Prairie Records store in person so I can experience that.

Ben: Yeah, please come to visit us. It's a fantastic store. We have an amazing staff who are extremely knowledgeable, and they're beautiful stores.

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