Latest Interview

Most Recent Interviews

  • Patrick Rea
    Top Opportunities for Cannabis Investors and Entrepreneurs with Patrick Rea of CanopyBoulder
  • Matthew Kind
    Blockchain Disrupting Cannabis?
  • Kris Krane
    A State by State Update on Cannabis Legalization with Kris Krane
  • Mowgli Holmes PhD
    Cannabis Geneticist Shares How To Have Thriving Plants
Browse All

What is CBD

(Cannabidiol)? What is cbd cannabidiol See more
 

Hemp will Change the Planet with Doug Fine Author of Hemp Bound

Doug Fine

Outspoken hemp advocate and author Doug Fine talks about how hemp is transforming industries in remarkable and sustainable ways. Doug’s charisma and energy shine through as he inspires us to reconnect with the earth.

Key Takeaways:

– What prompted Doug to drop out of traditional urban society and raise goats
– Hemp as a superfood
– Hemp can be used as a fuel
– Using hemp as a superior form of concrete, called Hempcrete
and more

*Guess What? You could be listening to this interview on your commute. Get the free podcast for your iPhone or Android Device*

Read Full Transcript

Matthew: Hi, I’m Matthew Kind. Every Monday and Wednesday look for a new episode where I’ll take you behind the scenes to interview the insiders that are shaping the rapidly evolving cannabis industry. Learn more at www.cannainsider.com. That’s www.cannainsider.com. What are the five major trends that will disrupt the cannabis industry in the next five years? Find out with your free report at www.cannainsider.com/trends. That’s www.cannainsider.com/trends. Now here’s your program. As hemp continues its double digit growth trajectory each year, many of us hear about the outrageous, society changing potential for hemp, but we don’t often hear the details or specifics about what is going on in the hemp world. Today’s guest, Doug Fine, is the author of Hemp Bound. Doug is going to share with us his expert knowledge of the plant and opportunity before us. Welcome Doug.

Doug: Good to be with you Matt.

Matthew: Doug I want to jump into a lot of the questions related to hemp, but to give listeners a sense of your background, can you tell us how you became a hemp advocate?

Doug: Sure. My life and career have been on a fairly consistent trajectory. In 2004 I wrote a book called Farewell My Subaru which describes journalistically but humorously my efforts to significantly reduce the fossil fuel use in my life without giving up digital age comforts. I wanted goat milk and Netflix for instance. And so I still we’re speaking from that ranch in New Mexico today. I still live that life when I’m not travelling on the road for my other work, and it’s informed everything that I do. When I wrote my next book which was called Too High to Fail, a look at a sustainable economic model, a farmer centric model for the inevitable coming above ground of the cannabis industry, that keyword was in there as well, sustainable. I was spurred to write about the drug war by some of the insanity that has most of the world ready to end the drug war. A neighbor of mine, a senior citizen got raided for cultivating a few cannabis plants for personal use while, you know, just south of the border where I live here, you know, tens of thousands of people are being killed in drug violence. But the sustainability angle was imperative.

And while I was researching a group of very progressive sustainable cannabis cultivators in Northern California, they were making an effort to centralize their flower processing facilities, and it was they who first put me onto the idea of the fact that they’re only processing for the flowers or you might also say for the shake and the leaves for infused cannabis derived products. But the stalks were left over and hey what’s the potential for energy there. Knowing hemp’s famous per acre biomass yield that is almost unrivaled in the natural world, I started my research for what became two years of study about the potential of what we may call the industrial cannabis plant or the agricultural cannabis plant, the side of cannabis that has today, which today you’ll find is .3 percent of THC or less, non-psychoactive. And what I found made me feel like your roommate with the lava lamp and the tie-dye was understating the potential of the plant.

Matthew: Wow. So help us understand that. What is the potential? What excites you the most about hemp?

Doug: I’ll have to pick from a pile, a big pot on that. The most exciting new one that came up… what’s so exciting about when you talk about hemp is you’re talking about applications that go back to humanity’s earliest hunter gather endeavors, pre sedentary agriculture, hemp was what anthropologists call a camp follower. Humans would bring it from one seasonal home to another because it grows quickly and provides so much. You know, I joked about the your roommate with your lava lamp, but when you put it in the terms of, let’s say an author like Michael Pollan who says we co-evolved with the cannabis plant, it sounds a little bit less woo-woo. Of course, you know, we breed Golden Retrievers to be friendly and to retrieve ducks without crushing them. Why wouldn’t we over ten millennia or more develop a plant that at once provides strong fiber for clothing, housing building materials, carrying cases, baskets, good medicine, healthy food and you know a good time at a party.

So we could go back a really long way. The fact that before this call in my entire family’s shake, we had two tablespoons of hemp seed oil which is a nutritive super food. I mean I just wrote a piece about this. It’s not you can just throw out that statement, but it has a three to one Omega six to Omega three balance that’s unrivaled in any other kind of nutritive oil, even fish oil. So that’s all real, but the one this is all lead up to give you an answer of a new app that I’m really excited about and that is something that just came out this year. I know from being a solar powered goat herder here in New Mexico that the environmental black hole in my solar powered life is the battery system. You want to be off the grid and a rugged individualist and you have heavy lead cadmium environmental nightmare. Now there’s good recycling and all that jazz which helps a little bit, but I’d rather not have lead and acid and other things that are harvested in disgusting ways on my, you know, on my homestead.

So what came out this year is we’ve got this next generation kind of battery that people have been researching for the last decade or so. It’s called, the general category is super capacitors. The material that is used to conduct batteries in this incredible way that, you know, can charge your car in ten minutes and your phone in one minute, that kind of application. It’s called graphene and it’s basically one carbon thick sheets that conduct the material. The leading material up until this year, late 2014 for those who may be listening in the future, has been fairly toxic and extremely expensive to produce. That’s what slowed down this material. That’s why I’ve still got a lead cadmium set of batteries in my battery shack here behind my adobe. So it turns out a bunch non-hippy scientists revealed at the American Chemical Society Conference this year, not you know, Hemp Fest, it turns out that hemp nano sheets of this one carbon atom thick graphene sheets we’ve been discussing. When it’s derived from hemp, in short, super capacitors slightly outperform the current synthetic, somewhat toxic and hard to produce graphene sheets at 1/1000 of the cost. So what this means is I need to get on the phone with Elon Musk and say the teslas have to be… the bodies of the teslas as Mercedes and BMWs are as we speak, comprised of hemp based composites, but also the batteries to charge them should be made from hemp. And then as a father, human father as well has a goat father, I’m starting to feel optimistic about the future.

Matthew: Wow I’ve never heard of that application. That’s pretty crazy. Now there is another application, hemp in construction. Can you tell us a little bit about hemp construction and Hempcrete specifically?

Doug: Yes. When I was doing my research for what became the book Hemp Bound, people from multiple continents were saying that they believed that when the US came online with hemp as we now have. For listeners who aren’t aware, this past February 7th when the President signed the farm bill, it legalized hemp. It was a major change in US policy. As you can tell by the very very few groups that opposed it, and it was a fairly overwhelming victory. It allowed research purposes for hemp to be cultivated for research purposes in states that have their own hemp laws with a few provisions. So it’s not full legalization. That’s coming, but it is allowing hemp cultivation, let us hope, in 20 plus states this coming 2015 season. And I hope to be involved in projects in multiple states this coming season as well. As in addition to putting out a follow-up, a short a first legal harvest update follow-up to Hemp Bound on partly American grown hemp in the Spring of 2015. So stay tuned for that.

But when I was researching the book people kept saying that when the US comes online the first likely killer application on the fiber side of the hemp plant will be for construction. I should say the no brainer, the reason why hemp has been legalized has to do with farmers not being stupid and conservative or progressive recognizing that their brothers and sisters north or the border in Canada are part of a billion dollar industry that as you said is growing 24 percent per year, and that’s just from the seed oil, the nutritive super food and other oil applications that we’ve been discussing and seed applications, seed protein applications and industrial applications from the seed and seed oil. That’s all the Canadians are doing at this point. And that’s already this billion dollar industry. That’s where the money is. That’s why people, American small farmers are returning to hemp. But then you have the fiber which the Canadians are doing nothing with. You can do something with it.

Briefly architecture of the hemp plant is a long bast fiber famously stronger than steel. If you’ve ever read Jack Herer’s The Emperor Wears No Clothes or had a roommate who had a lava lamp you will know hemp has the world’s strongest natural fibers, incredibly strong fibers. I’ve been testing them around the world. It’s incredible. You can’t step through these things or karate chop them or rip them in half or anything. So those are for higher end applications including publishing and the textiles, hemp pants I’m wearing right now, and also the super capacitors, nano technology, next generation stuff; body armor, space ship parts, you know, space station parts, that kind of thing. But you’re left with this woody core called the herd that on the surface is less valuable. It’s certainly less difficult to generate. There’s a lot of herd when you’re done with hemp cultivation.

So what do you do with that herd, and one of the things you famously can do with it is bed animals. It’s antimicrobial. The queen of England beds her, you know, stables on hemp, the herd. But if you mix it with a natural binder like lime, and there’s a lot of different ways you can do this. It’s already evolving into Hempadobe and other materials, but if you bind basically hemp with a natural binder, maybe a little bit vitamin C to keep mold away, it creates a building material known generically as Hempcrete that insulates, when done right, better than… and I recognize this isn’t saying much, better than our kind of what we call conventional, you know, the boxed home supply store, toxic combination of imported press board, nonsense and drywall with, you know, gross fiberglass particles. We can do away with that, improve performance, improve the health of our structures because not only is the insulating or our value looking like it’s superior, you can use it in load bearing applications, soundproofing applications and on top of that I didn’t mention the best part, the mixture of lime of other binder with hemp winds up actually sequestering carbon from the atmosphere so your house itself becomes a carbon sink and your house becomes carbon negative which is you know, nice for the conscious and nice for the planet.

Matthew: So I guess the reason why Hempcrete’s not taking off yet is just because people don’t know about it or perhaps there’s not as much infrastructure around creating Hempcrete like there is other industrial and commercial building materials. Is that the reason you can think of?

Doug: It is taking off. It’s starting across the pond in Europe and in Australia, but focusing on Europe for a moment where there hasn’t been, where hemp prohibition ended a little bit sooner than ours and in some places never was prohibited in China and France. But for the last decade plus there’s been a strong growing hemp building market in Europe. Entire subdivisions built of Hempcrete homes. A good example is the Marks and Spencer Department store in Britain built this, you know, monster flagship store in a suburb of London out of Hempcrete for a very bottom line reason. They’re energy costs were clearly going to go down. In the US even before hemp prohibition ended this February, Hempcrete projects are… I know of some, I want to say at least a half dozen hemp projects in the US. I visited on site one in Manitoba. The issue is again largely one caused by prohibition is initial cost of the hemp herd.

When everybody, when farmers are growing hemp by the millions of acres, which I hope they will be, there’s going to be a lot of herd. It’s not as easy as this. There’s a quality issue, moisture issue, but assuming you have decent quality herd, you bag it up. It’s in your hardware store. It’s ready to go as a building material. It’s not going to be something that’s rare at all. Bigger picture, biomaterials in general are huge for the future of industry. This is something that think tanks and research has been telling me all over the world. These are not people politically or philosophically advocates for hemp or other biomaterials. What they tell me, and this is all in Hemp Bound, is we can’t keep building things out of synthetic chemicals and petroleum based plastics. It doesn’t last as long. It doesn’t work in the cost ratio. It doesn’t work anymore. We have to move to biomaterials, and the good news is they work better.

Matthew: Now let’s turn and talk a little bit about hemp on the farm. Can you talk about hemp as a feed for animals. Because we all know that a lot of animals are eating corn as feed, in a lot of cases GMO corn, and we’d like to hear about alternatives. So can you tell us a little bit about hemp as a feed for animals?

Doug: Yeah, although I use hemp for a lot of applications already and it’s always been something that’s won in the marketplace for me. Not some, you know, something I was trying to support for political reasons. The one that I feel is thus far had the biggest impact on my life is the nutritive benefits. Knock on wood, I’m a healthy dude as are the members of my family, and that could just be, you know, good luck or other aspects of my lifestyle, optimism or whatever, all these factors that go in to it. But I like to think that it has a good deal to do with the fact that I put those several tablespoons of hemp seed oil and hemp protein into my morning shake everyday and have for years. This is now documented as healthy in animals.

The study that I include in the book is a Canadian study that fed laying hens hemp based feed and hemp seed based feed. The control group eating the usual GMO corn and low and behold the nutritive profile of the eggs that the hens laid, that we of course in turn eat, were significantly higher. What hemp has besides the omega balance is high mineral content, especially in a food that’s suitable for vegetarians and vegans. Unusually high selenium, magnesium. It also has in the type of proteins that are in hemp, the amino acids and building blocks that researchers believe are important for things like cell health, cell structure strength and cardio health. So clearly this is something that my goats can’t wait to get in their morning feed, my goats and chickens and ducks. And there’s a study on now, not yet published, about animals being fed on hemp. This is a Washington State study. Pigs being finished on hemp going to slaughter at significantly higher weight than those on, you know, what we today call conventional corn based food.

When I was talking about this at a Hemp Bound event a few months ago an older lady came up to me from Nebraska and said her daddy used to… first thing she knew winter was over, plant hemp along the irrigation ditches. The structure of the plant is such that it is for an annual has very long tap roots that grow very quickly. And so the reason why they planted it along the irrigation ditch was it was an erosion control mechanism. No matter how much water and flooding they got during the season it would protect their other crops. But she said she also knew it was near the end of farming season because the cattle would be put out to be finished along the ditches and they loved, she said with a giggle, they loved those hemp flowers and the hemp leaves and the hemp plants. So they, farmers in Nebraska, cattle farmers knew a century plus ago the nutritive benefits of feeding live stock hemp.

Matthew: Now you mentioned your morning shake. I’m curious what else you put in there besides hemp seed oil.

Doug: You know all kidding aside, you know everybody is… you know you want to draw visitors to your site and do all that kind of stuff, and I thought yeah, when people are willing to pay whatever it is dollar a year to be reading my, you know, dispatches from the Funky Butte Ranch and all that, I’ll reveal all the ingredients on this because I believe it to be my, and I apologize for sounding grandiose, I recognize my infinitesimal role as a human let alone in the wider cosmos. But I consider this morning shake the nutritive benefits to be my greatest non-literary contribution to humanity today. So I’ll throw out a few things. It’s a bunch of prunes, blueberries are really good for you and there’s ginger in there. I put astragalus in it. What are a few other things I can mention. My goat yogurt we make from our goat’s milk. It’s a great way to get my kids to eat greens. I put a handful of spinach kale or whatever in there, and it just tastes like a delicious shake. So there’s a bunch in there, but bottom line you put your favorite fruit, some yogurt, some greens and some hemp seeds and/or hemp oil in your shake and you’re going to be doing good things for your health in my opinion.

Matthew: Now some people compare and contrast the CBD oil coming from cannabis and hemp. Do you see a difference in the quality or is it just a different grade? How should we think about that?

Doug: It comes from a different place. So here’s the situation. We’re talking now about the cannabis plant. Let’s pretend there wasn’t the absurd nightmare prohibition. The impacts of prohibition right now, the lingering impacts of prohibition are when people talk about hemp they have a real fear of THC, the psychoactive cannabinoid or I should say the best known psychoactive cannabinoid. And at first I was okay with creating this delineation, the relatively recent and arbitrary definition of industrial hemp is cannabis with .3 percent of THC or less. That’s the way it is the world over right now. There’s a funny ridiculous back story to why it’s that, but let’s just accept it for a moment because otherwise I argued until about a month ago why… and it shows by the way how much is evolving in the return of the cannabis plant to society, economy and humanity. But I argued how are you going to get a GOP state legislator in Nebraska and Tennessee, both hemp states, to vote for this unless they’re absolutely convinced that in the next primaries some wacko isn’t going to come after him and say that they’re soft on drugs or something like that.

I’ve changed my view on that for two reasons. One is farmers all over the world are telling me, also breeders and agronomists, that by forcing that limitation and taking out so many varieties of the cannabis plant, you are very likely restricting developments in fiber strength on the fiber side and even things like seed oil production on the seed side. And so we have to get passed this ridiculous fear of cannabis. We have a majority of Americans that recognize it should be legal. We have the President of the United States saying it’s no more dangerous than alcohol actually. What most studies indicate is that it’s far less dangerous than alcohol. But the fact is when the promise land is reached and the mental slaves who don’t understand the benefits of the plant have gone or least opened their minds as my 80 year old parents have, that we won’t be discussing these silly nuances anymore. But it was important for me to mention that when we get into this discussion because there’s misunderstanding and confusing marketing going on.

Here’s the thing. If you’re talking about hemp seed oil, hemp seed products, the protein cake that comes when you squish hemp seeds and what you have left, hemp hearts, the actual delicious stuff that remains when you let’s say dehull it, that’s another way of doing it, all of which I have in my home. All of which I regularly… that’s zero percent. That is like you could feed it to your kids and toddlers. It’s broccoli, carrots, beets, hemp seed. It’s the same in terms of not being psychoactive. If you grow a cannabis plant for the flower and render an oil from that, that is something else. Theoretically, yes you could develop cultivars, as we call strains on the hemp side, of hemp that are high in non psychoactive cannabinoids.

There are 100 known cannabinoids now. So I’m somebody who likes to go, as we say, beyond this discussion of CBD which is just a wonderful but one percent or less of what we’re really talking about in cannabinoid studies, and something that I think will be not part of the dialogue in five years. It will be much much broader than just talking about CBD and THC. We’ll be talking about dozens if not scores of cannabinoids and their, what they call the entourage effect, their interplay in how they can be beneficial for health maintenance and/or combating acute diseases. But the fact that CBD has been latched onto first and it appears to be having great effects on epileptic seizures let’s say in young kids. That’s fantastic. I’m all for it. But that’s a completely different product. It comes from the flower. It’s rendered and it’s not hemp seed oil. It’s an entirely different thing. The correct nomenclature for that in my view, whether or not it’s psychoactive, because you can render oil of course from psychoactive plants for medicinal or social reasons, health maintenance reasons. All of that should be called cannabis oil in my view. The word hemp shouldn’t be included in that even if you are rendering a flower with low THC because it confuses the issue and is not the same as hemp seed oil.

Matthew: And one concept I was hoping you could help explain is that of tri-cropping. Can you just tell us a little bit about that?

Doug: Yeah that is the major concept in Hemp Bound and something that I am actively working on now to try to help farming communities around the nation, around the world make use of. Here’s the situation. What surprised me when I was researching hemp around the world is how segmented the industry is. As I mentioned earlier, Canada is doing only seed. Europe until very very recently has been doing almost exclusively fiber. China is way eschewed on the fiber side as well although everybody’s starting to come around on this thing.

The plant has it all, fiber and seed and then potential leftover biomass for energy. That’s the third leg of tri-cropping. Tri-cropping is growing. One year there might be one crop that’s kind of a hybrid that is good for seed and fiber or it might because of the short growing season. Two crops or two different plots, two different fields seven miles away from each other by the way so as not to cross pollinate and seven miles away from psychoactive cannabis for those who are wondering. So you have a seed harvest, a fiber harvest and anything biomass leftover from hemp and/or other crops for potential biomass gasification, a small unit that creates relatively carbon friendly anaerobic combustion to power your facility and/or your community. Folks who want to know more about this just look up the town of Bellheim, Germany which became completely energy independent from their farm biomass and gasification.

So those are the three legs. Everything you can potentially do with seed and flower. Everything you can potentially do with fiber which includes, as we discussed earlier, high end vast applications on the herd applications and energy. Those are the three legs of tri-cropping. And what I want to do is provide facilities where a farming community can order sort of from a menu what equipment they would need to harvest and process for the applications that they want to do. These are modular and scalable and include the facility themselves, turnkey as they say.

So folks who want information on that are welcome to contact me. And the thinking on this was something that one of Canada’s big modern hemp moguls, Shawn Crew, of Hemp Oil Canada told me which is farmers in the field today for their hemp seed oil are getting about five times, right out of the field, if you don’t want to do anything except grow a seed heavy cultivar of hemp, harvest it correctly and sell it to Hemp Oil Canada, you’re profiting in the realm of about $300 per acre. That’s a lot. That’s about five times the GMO cycle crops are given in the best of circumstances. So if you want to know how much that is, if you’re a huge prairie Manitoba, Saskatchewan or for that matter North Dakota, Nebraska, Colorado, Eastern Colorado farmer growing a 1,000 acres profiting, not income but profit, profiting $300 net per acre, that’s $300,000 on a 1,000 acres. That’s a real income from a short bridge crop. As we discussed many climates can grow another crop, hemp or another crop in the same season. So we’re talking about a real income right out of the ground, but what Shawn Crew said is you increase that profit a hundred fold if you are the person sticking it in a bottle and calling it Joe’s Hemp Cream Toothpaste, Hemp Cream Moisturizer, Hemp Crème, you know, hemp seed oil for your morning shake or your salad dressing. And so that’s what I’m trying to do.

I’m trying to allow a community in a small part of Kentucky or Tennessee or Arizona say we want to do the next crox. We want to make hemp sandal, locally produced sandals from our fiber and sell the seed oil but we’re going to make our mark on this fiber application, if you bring us the facility and sell us the material we need to process that. So that’s tri-cropping. Allowing from one harvest the utilization of what hemp gives us. Everything that you need from seed and flower. Everything that you want to make from fiber and everything… and the potential leftover biomass energy production.

Matthew: Now last question Doug. I’ve heard, we know you have goats, but is it true that you meditate with them?

Doug: I do meditate with the goats. Yeah, everyday. The source of what I will allow the world to judge whether or not I’m being accurate. What I describe as my sanity comes from the fact that my alarm clock much of the year is the sound of hummingbird wings in the feeder outside of my bedroom window, and the fact that I can sit and meditate with goats. Humans have interacted with goats as long as we have with dogs. I imagine as long as we have with hemp as well. And so they’re very friendly and they love you and they’ll come over and put their head on your shoulder, and they have good senses of humor and very mischievous. So I’ve learned a lot. And that’s what (30.28 unclear). I’ve learned a lot from being outsmarted by goats and moving to solar. But that’s where my sanity resides and allows me to do all the rest of the things that I do.

Matthew: Doug in closing, what’s the best way for listeners to learn more about your books and follow your work?

Doug: Thanks for asking and also thanks for the great questions. I’ve enjoyed speaking with you. The two best ways to find out more about hemp and sustainability and to contact me to talk about anything from consulting to live events is at my website www.dougfine.com. Easy enough, my name www.dougfine.com, and I also Tweet the latest everyday on Twitter @organiccowboy, one word organiccowboy.

Matthew: Great. We Doug thanks so much for being on CannaInsider today. We really appreciate it.

Doug: Thank you Matt.

Matthew: If you enjoyed the show today, please consider leaving us a review on iTunes. Every five star review helps us to bring the best guests to you. Learn more at www.cannainsider.com/itunes. What are the five disruptive trends that will shape the cannabis industry in the next five years? Find out with your free report at www.cannainsider.com/trends. That's www.cannainsider.com/trends. Have a suggestion for an awesome guest on www.cannainsider.com, email us feedback@cannainsider.com. We would love to hear from you.

Cannabis Businesses are Banking with Us – James Collins of OBEE Credit Union

James Collins OBEE Credit Union

OBEE Credit Union of Olympia Washington currently serves twenty cannabis-related businesses and has more in queue. James talks about why they decided to help their members that own cannabis businesses. James also reveals a very clever way that dispensaries can avoid using so much cash.

Key Takeaways:
[1:13] – Background of OBEE.
[2:55] – James explains the decision for OBEE to serve the cannabis industry.
[4:25] – How are members reacting to supporting the cannabis industry?
[5:51] – James explains how deposits are made.
[9:28] – Are LLCs in Washington that operate in another state eligible for banking?
[10:10] – Limitations on money transactions.
[13:03] – James discusses the Dodd Frank Act.
[15:01] – Contact details for OBEE Credit Union.

*Guess What? You could be listening to this interview on your commute. Get the free podcast for your iPhone or Android Device*

Read Full Transcript

Matthew: Hi, I’m Matthew Kind. Every Monday and Wednesday look for a fresh episode where I’ll take you behind the scenes and interview the leaders of the rapidly evolving cannabis industry. Learn more at www.cannainsider.com. That’s www.cannainsider.com. Do you know that feeling when you sense opportunity, when you see something before most people and you just know it will be successful, then you're ready. Ready for CannaInsider Consulting. Learn more at www.canninsider.com/consulting. Now here's your program.

I am pleased to welcome to the show James Collins, CEO of O Bee Credit Union in Washington State. OB’s board of directors approved a plan in September 2014 to open business relationships with cannabis producers, processors and retailers. Welcome to CannaInsider James.

James: Thanks.

Matthew: First kudos to you and your board for approving the measure to allow banking to licensed cannabis businesses. History is on your side, and I hope you get a lot of new business from this. Can you give us a little background on O Bee’s decision to do this?

James: Yes, first off a little bit of a background on the credit union. Founded in 1955 from the employees of the Olympia Brewery or it was named at the time The Olympia Beer Company. That give us our name. The Brewery declined, but we’ve adjusted our membership to be statewide, but we’re primarily still based upon Western Washington. We started on this business because over the years we have had a lot of members that had a lot of businesses. And we had a member who had a business that came in and he had a new 502 business, and yes the simple question of if you supported my last business, why won’t you support this new business.

Matthew: Good question. Now do you serve clients only in the Olympia, Washington area or anywhere else?

James: We serve members throughout the State of Washington as long as they live or work here, and we serve I 502 businesses throughout the state though we do have some limitations on retailers.

Matthew: Okay. Now can you tell us about the board’s decision to start working with licensed cannabis businesses in Washington State. I know that it’s kind of a tricky thing for you because you’re kind of moving on the bow wave here. In a couple of years this will look totally safe and normal and nobody will even be talking about it. But as a first mover there might me some trepidation or a concern about doing this. Can you tell us how you grappled with the decision and how you ultimately decided for it?

James: Well when it first passed we left it up to others to deal with I 502 businesses, but after a time it was evident that that wasn’t going to happen. And we had the one member come to us and ask for an account specifically. And the board grappled with the decision on a couple of areas, and in the end we ended up with three reasons why we would go ahead with it. The first was from the community, we thought it would enhance public safety. I mean drugs and cash in the community is a recipe for trouble. And the second reason is that is it’s not our goal or our desire to ever tell members what they can and cannot do. So we have a lot of members that own other businesses that might be questionable. We don’t question them. So we’re going to support our membership. And then the last reason there is that credit unions were formed many many years ago because people couldn’t get bank accounts. That’s why the entire industry started and this kind of seems a very familiar subject. These people can’t get bank accounts.

Matthew: Right, right. History repeating over and over. Now has the membership been divided on this subject as far as welcoming cannabis related businesses or what’s the response been?

James: After we had an initial feel phase where we just kind of opened a few accounts, saw how they acted so we could communicate with our membership what it was we were doing, and also making sure we were doing what we needed to do, and we could do it. And then we announced it in our internal newsletter which went out to membership. And then that response was only positive, and then we were featured in an Olympian article, and that response was only positive. So again our roots are from an industry that had had its share of people that didn’t like it. And so, you know, it was really never an issue for us.

Matthew: And do you have a tally on how many cannabis related businesses have open accounts?

James: We have more than 20 right now that are actively with us, and I think we have about another 10 in the queue waiting to join.

Matthew: Now is there any kind of creative ways to deposit cash or do this electronically? I mean how are your members that have cannabis businesses, how do they make deposits? Is it different than any other client or member?

James: We’ve been pushing our retail clients especially to have an electronic way to deal with cash.
The leader that I’ve seen so far is Cannatransact which puts basically a cashless ATM in the retailer and charges a small fee, but what it does is it eliminates cash. The retailer doesn’t have to take cash and they get credited in their account here the next business day or two business days, whatever Cannatransact does. So we had expected a large influx of cash, and we’ve not really seen a large influx of cash. A second piece is once you have retailers, growers and processors all banking with us they can exchange checks and everything else just like a normal business. So the cash basically drives itself out of the system.

Matthew: That’s a pretty clever way of doing things. As long as a cannabis business is properly licensed, can they become a customer or is there any other… or a member? Is there any hurdles apart from that?

James: They could be eligible. We have a couple of limitations. One is we are responsible for looking through their application, even if they have been approved by the LCB and making our own judgments. And there’s been a couple where we’ve not, we found something that we didn’t like and we refused. A second thing is that we want to make sure that retailers don’t violate federal law by having marijuana cross the borders. So currently we’re not supporting any retailer that is in a county bordering either state or other country. That’s our only limitations at this point. But everybody else is fine; growers, processors, labs. We don’t have any issues. We do not serve anybody in the medical side because that’s a non-regulated business.

Matthew: Okay. The Omnibus or some people call it the Cromnybus spending bill that passed in December of 2014 and it was signed into law defunds the DEA and the Department of Justice from prosecuting cannabis related businesses that are complying with their own state laws. Does this make you feel more confident about the direction things are turning for the banking sector and credit unions helping cannabis members?

James: To be honest, no. That is an interesting way that they did that, but I’m hoping that our politicians can get together and pass legislation which says it’s either legal or it’s totally illegal and really be definitive. These things that are either executive orders or funding things they can change in a moment. So, you know, we do not like that risk of not knowing what’s going to happen tomorrow.

Matthew: If a business opens an LLC in Washington, does that make them eligible for a banking relationship even if they might have the bulk of their operations in California or Colorado?

James: We are relying on the liquor control board’s, licensing and a lot of their over watch on these businesses. So if we cannot rely on that because maybe they’re doing business in California, we could not serve them.

Matthew: Okay. Now is there any limits to the… you mentioned some of the creative things with the cashless ATM, but you were saying before that processors and so forth can send payments back and forth so they have the full spectrum of services you offer that can do a wire transfer, electronic bill pay, pretty much anything any other business member can do.

James: They can. The one limitation that we do have on them is they cannot use what is called shared branching. Most credit unions are on shared branching. So you could go into any credit union and make a deposit, pay a loan to any other credit union. Because those other credit unions haven’t agreed to handle I 502 accounts, we do not allow our members to use that service, but they can use normal online banking, our ATMs that we own, and they can use their debit cards of course at any ATM, ACH. We do not offer any lending to them, that’s another limitation.

Matthew: Okay, now as you mentioned you had around roughly 20 members that are in the cannabis industry. Have you noticed any particular needs they have that make you think about hey, maybe we should create this service just for cannabis members because we see a certain need over and over again? Is there any peculiar things you notice about the cannabis businesses that you could do to help them?

James: For us, no. I mean what we’re just trying to do is provide basic services so they can deposit money, they can get out money, they can write checks, they can run their payroll. They can pay their taxes. They get to save on, you know, if you pay your taxes in cash there’s a surcharge on that. So we’re doing all those basic things. I think one thing that’s outside of what we can do that is really needed for that industry to really take off is for some processor to step up and allow them to use debit cards at their branches outside of that Cannatransact type of methods.

Matthew: Now this is really unrelated to the cannabis industry, but it was in the fore mentioned Omnibus spending bill where provisions of the Dodd Frank Act that would prevent banks from using FDIC insured funds for trading operations. That part was repealed so banks, many commercial banks are now using depositors’ funds for trading or other services or activities besides making loans. I know credit unions are different, but how do you feel about that in general?

James: About being able to use basically big bets with your customers’ money?

Matthew: Yeah.

James: Well that’s not something that I think the credit union movement was all about. We’re kind of, if you look at the credit unions in general, we’re a little bit of the Miracle on 42nd Street type bank. It’s the local members, local people in the community actually own the credit union. They are the members, and they put their deposits in here and they allow other people that they know to take it out as a loan. That’s the only thing that we do. It’s simple. You don’t get in problems. Credit unions never got in problems in a financial meltdown. It’s just a lot more stable and a lot cleaner way to do it.

Matthew: Yeah, I agree. And you know I think a lot of people are with the giant monster megabanks because there’s one on every corner and there’s a perception well if I want to get cash, there it is. But as we move more and more to a cashless society do you think that credit unions will experience, you know, will experience more turnover? They’ll get more customers that are leaving these big giant monster mega banks?

James: I can’t say for the industry, but I can say from our standpoint prior to the economic recession our average growth rate was maybe two to three percent. In the last three years we’ve averaged about eleven.

Matthew: That’s great.

James: It’s obvious that there has been a change in the public’s mind anyways. In particular Washington State has a very strong credit union movement. And we are kind of a much higher percentage of people that use credit unions than the rest of the nation.

Matthew: Okay, great. Well James as we close how can listeners find out more about O Bee Credit Union?

James: Well I would first have them go to our website which is www.obee.com, it’s Olympia Brew, Olympia Beer. But if you’re in the I 502 industry, I would just have them call us and our 800 number is 800-642-4014, and let the representative know that you have an interest in our I 502 offerings, and one of our specialists that only deal with that will get back with you.

Matthew: Awesome. Well I really encourage listeners to not only open an account with O Bee, but wherever you are in the country to please look at credit unions. It helps to circulate money locally instead of having it siphoned back to Wall Street for other activities, and there’s really just no downside anymore to being with a credit union because, you know, all the services that James just mentioned are available at your local credit union. So thanks again James for being on CannaInsider. We really appreciate it.

If you enjoyed the show today, please consider leaving us a review on iTunes. Every five star review helps us to bring the best guests to you. Learn more at www.cannainsider.com/itunes. What are the five disruptive trends that will shape the cannabis industry in the next five years? Find out with your free report at www.cannainsider.com/trends. That's www.cannainsider.com/trends. Have a suggestion for an awesome guest on www.cannainsider.com, email us feedback@cannainsider.com. We would love to hear from you.

Marley Natural with Christian Groh of Privateer Holdings

Christian Groh

Privateer Holdings is a private equity company focused exclusively on the cannabis space.

Privateer’s portfolio of companies include: Leafly, Tilray and now Marley Natural. Marley Natural promises to be the first global brand of cannabis.

*Guess What? You could be listening to this interview on your commute. Get the free podcast for your iPhone or Android Device*

Read Full Transcript

1:37 – Christian explains what Privateer Holdings does.
2:37 – Christian explains why Privateer Holdings focus is on cannabis.
5:06 – How as the app Leafly changed and evolved since being acquisitioned by Privateer?
7:51 – Christian explains Privateer’s goal with Marley Natural.
9:47 – The consumer response to Marley Natural.
10:38 – What strains will reflect the Marley Natural brand?
12:18 – Managing Marley Natural in different states.
13:16 – Christian explains Tilray.
16:44 – Tilray’s research on cannabis and PTSD.
19:38 – Tilray’s grow size and other variables.
21:28 – Supply and Demand dynamic for the future.
22:59 – Christian explains the big problems / opportunities in the cannabis industry.

Matthew: Hi, I’m Matthew Kind. Every Monday and Wednesday look for a fresh episode where I’ll take you behind the scenes and interview the leaders of the rapidly evolving cannabis industry. Learn more at www.cannainsider.com. That’s www.cannainsider.com. Do you know that feeling when you sense opportunity, when you see something before most people and you just know it will be successful, then you're ready. Ready for CannaInsider Consulting. Learn more at www.canninsider.com/consulting. Now here's your program.

Privateer Holdings is a private equity company shaping the future of legal cannabis on many fronts. You’re probably most familiar with Privateer through their acquisition of Leafly, a popular app for exploring cannabis strains and reviewing dispensaries. As you’re going to find out there’s much more to Privateer than just Leafly. Privateer recently announced that they have successfully negotiated with the Bob Marley Estate to license the Marley name and create a brand of cannabis called Marley Natural. Also Privateer is focused on the Canadian cannabis market with their company in British Columbia called Tilray. We’re going to find out more about the interesting things that Privateer is up to with the COO of Privateer Holdings Christian Groh. Welcome to CannaInsider Christian.

Christian: Thanks Matt, great to be here.

Matthew: Christian can you give us a sense of geography, where you are in the world?

Christian: Yeah right now I’m in sunny Seattle, Washington.

Matthew: Okay, and can you tell us at a high level what Privateer Holdings is and does?

Christian: Yeah. So Privateer Holdings is the world’s first private equity firm dedicated to the emerging legal cannabis industry.

Matthew: Okay, and can you tell us a little bit about your other two co-founders?

Christian: Yeah, so it’s myself and then there’s Michael Blue and Brendan Kennedy. You know all three of us come from traditional venture capital, private equity. Brendan and myself were at a venture capital bank in Silicon Valley for years, and then Brendan and Michael did their graduate school together at Yale. And we got together in essentially 2009 and 2010 and kind of quit our day jobs and started Privateer Holdings.

Matthew: Why the focus on cannabis? I mean was the opportunity just seem so big you just had to stop everything you were doing and focus on that? Can you tell us a little bit about that?

Christian: Yeah. You know, Brendan and I were at Silicon Valley Bank together and we focused on, you know, early stage venture backed companies in, you know, technology or clean tech or hardware or software. So we had the fortunate position to look at really, you know, all venture capital deal flow, not only in the Silicon Valley, but you know all around the US. And so we got really good at, you know, looking at trends and whether it be, you know, coupons or nano technology or mobile banking or wind power or whatever was kind of a hot emerging trend at the time.

You know, back in 2010, you know, we were in California and this was around the time Prop 19 was gaining a lot of attention in the news and media. And an opportunity came across our desk which was really a point of sale software company that was selling to dispensaries in California. You know, we never took them on as a client at the bank, but it just really peaked out interest. You know, it was such a big industry and it was getting a lot of attention, but it was still taboo, and there was still a lot of legacy issues associated with it. And so we really just started thinking about it, you know, under a different light and through a different lens. And you know, we realized this would probably be the biggest opportunities we will see in our lifetime.

And so we spent, you know, a good part of a year researching this space. You know, we went really around the globe, and we met with attorneys and activists and growers and dispensary owners and anybody else that was generally touching the space. And you know we realized that, you know, we could be a first mover here. And so thereafter we started Privateer Holdings and raised some capital and started making some acquisitions in the space.

Matthew: Now Privateer acquired Leafly, and I just want to understand from when you made that acquisition to where you are now how has the app changed and evolved and how has the market using the app changed and evolved and is it different than what you anticipated when you made that acquisition?

Christian: Yeah. So, you know, when we first started doing diligence on Leafly we liked it for a couple of different reasons. You know, one, it didn’t have kind of the ubiquitous pot leaf and, you know, the girls in the bikinis. It was a clean, mature, you know, yet whimsical brand, but we liked that. And it provided a fairly good level of education for you know either connoisseurs or first time users, but it really breaks down, you know, the strains and how people look at different strains. But when we first started exploring Leafly it essentially had, you know, 150,000 unique visitors per month and essentially zero revenue.

You know, you fast forward it to now or last month, you know, we had close to 5 million unique visitors in a 30 day period. You know, revenues are probably in line with what we projected, you know, before we made the acquisition. You know, user accounts are up 500 percent. You know, strain reviews are up 500 percent. You know, a 2X or 3X increase in revenue year over year. And you know, just a highlight from last year it won App of the Year through Geek Wire Magazine which is a fairly mainstream technology publication. So we went, you know, head to head with a couple of Microsoft apps, and some other early stage venture backed apps. So that really kind of raised the bar and got a lot of people looking at Leafly not only from the industry prospective, but people from the outside, you know, just from a technology development standpoint. You know we have an Android app and an iPhone app which I think is getting about 100,000 downloads per month. So that number has increased significantly as well. So the trend lines keep going up in really all aspects of Leafly. So it’s really an exciting time to be a part of this group.

Matthew: And for listeners that want to hear more about Leafly, what it does, CannaInsider did an interview with Cy Scott a few months backs and that’s in the back catalog. We go into great detail on what Leafly is, how you can use it, it’s benefits and also you get to learn a little bit about Cy’s story which is really interesting, including his favorite strain. So I invite listeners to check out that interview on iTunes or Stitcher. Now switching gears to Marley Natural, can you tell us how that came about and what your goal with Marley Natural is?

Christian: Yeah. So, you know, the Marley family has been thinking about, you know, a cannabis brand for a long time. They’ve been approached by, you know, other folks in the industry over the years, you know, but it was never the right fit for them. You know, they heard about Privateer Holdings and our leadership in the industry, and they approached us, you know, about a year and a half ago and started talking about the possibility of working together in the industry. So it’s been, you know, a year and a half close to two years in negotiations, kind of philosophical discussions about the brand.

And, you know, we will have products in the marketplace in late 2015. You know, essentially Marley Natural is a premium cannabis brand with deep roots in the life and legacy of Bob Marley. It’s a partnership between, you know, two cannabis pioneers, the Marley family and Privateer Holdings. You know, the way we think about it is, you know, we’re the first private equity firm investing exclusively in the cannabis industry in building profession mainstream brands, and we think, you know, Bob Marley could be synonymous with that. And we really break it up. We think about really three different lines. You know, there’s a hemp and cannabis infused topical line. There’s Jamaican heirloom cannabis products, and there’s the accessory piece, you know, which allows users to consume and store. So it’s really an exciting time, and we’re really excited to start the work on that, that brand.

Matthew: What is the response been like? Well I know what the response has been like. There was a huge, overwhelming response by the media interest in this, but what has been the response been from people that aren’t in the media, you know, consumers? Have you talked to many of them so far?

Christian: Yeah, I mean it’s really been overwhelmingly positive for the most part. As you know opinions towards cannabis are changing. You know, people are really starting to recognize the benefit of the herb. You know, politicians are starting to get it and laws are evolving. You know, Bob helped the movement 50 years ago, and you know the movement and the momentum continues to gain on a daily basis. You know, the herb was important to Bob and he looked forward to this day, and you know we’re at the throws of full legalization. So it’s been a really exciting time, and it’s been overwhelming positive.

Matthew: And do you have an idea of exactly what strains will be offered? Were they Bob’s favorite or how are you going to come up with strains that, you know, reflect the Marley tradition?

Christian: Yeah, so we’re going to curate a selection of heirloom cannabis strains, you know, including some of Bob’s favorite Jamaican strains like Lamb’s Bread. You know, we plan to share some information on a different varietals closer to the launch of the product. You know, but we’ll probably have about half a dozen true Jamaican heirloom strains.

Matthew: Now when can we expect to see that in dispensaries?

Christian: Probably late 2015. As you know, laws are evolving rapidly. Our intent is to produce and/or sell Marley Natural products where regulations allow, you know, alongside commercially viable opportunities. You know, right now we’re in conversations with distributors in Israel and Uruguay, and you know markets like Italy and the Netherlands and other emerging legal cannabis countries. As you know this conversation is really happening globally at the highest possible political arenas, and we are part of those conversations.

Matthew: You know, this a still a fresh announcement so I don’t know if you have an answer, but I don’t know how to describe it except it’s such a cluster of state and federal regulations at odds with each other here in the States. How will you manage relationships for Marley Natural in different states? Is it a licensing arrangement? How do you do that?

Christian: Yeah it’s really a state by state assessment. You know, obviously, you know, there’s medical states now and recreational states or adult use states. And so we have essentially boots on the ground, you know, evaluating each state opportunity. You know, we wish there was some easier kind of blue sky law, but there’s unfortunately not. So we’re very cautious on how we approach the market, but you know once again, the walls of prohibition are slowly deteriorating. And so as each day goes by those conversations, you know, become a lot easier.

Matthew: Now moving on to Tilray. Most people are familiar with Privateer for Leafly and now Marley Natural. Can you help us understand what Tilray is in the Canadian market?

Christian: Sure. So, you know, just a little background on the Canadian market. This year, April of this year, it switched from essentially a quasi-legal market to a fully legal medical market, and the switch took place on April 1st of 2014. And so what essentially happened about a year and a half ago we got invited by Health Canada to essentially evaluate and potentially invest in applicants to grow and distribute medical grade cannabis to patients all across Canada. You know, we interviewed probably about 50 different companies that essentially threw their hat in the ring. And we never got comfortable with either their business plan or the economics or some of their techniques. And so we essentially put together a proposal ourselves to become a licensed producer in Canada.

And so January of this year we got approval to essentially build a facility licensed and sanctioned by Health Canada, and then late March we became I think the fifth or sixth licensed producer in the country. And so since April we’ve been shipping continuously to medical cannabis patients all throughout Canada. So we are, Tilray is one of the 13 licensed producers in a regulated and sanctioned by the federal government of Canada to grow, harvest, distribute and ship medical grade cannabis to patients all throughout Canada. The biggest differentiator of this model is it doesn’t allow for retail. So we essentially ship direct to patients’ houses all throughout the country.

Matthew: Yeah that’s a big difference. I mean, the Canadian market, that’s just one way they’re different. I mean, can you highlight a couple of other differences you see in your mind to contrast the US market to the Canadian market and how they do things differently?

Christian: Yeah. So I mean it’s definitely the most stringent regulatory environment in the world, but we think that’s a good thing. You know, we’ve built a $25 million, 60,000 square foot, state of the art production facility on Vancouver Island in British Columbia. You know, we have 40+ strains in cultivation at the facility. You know, we see it as a, you know, $1 billion market over time, but you know we’ve also assembled a team of, you know, 100+ professionals that are dedicated to the science and the safety and the ethicacy of medical grade cannabis in Canada. So, you know, with those tight regulations comes with, you know, essentially a better box that’s put around an unregulated system. So it’s been a really exciting time up in Canada as well.

Matthew: Now I understand that Tilray has done some research or is doing some research on cannabis helping PTSD patients. A lot of people are really interested in this. Can you tell us a little bit about your findings if it’s not too early?

Christian: Yeah we’re currently seeking regulatory approval to conduct Canada’s first clinical trial examining the therapeutic benefits of medical cannabis for veterans, first responders and sexual assault survivors suffering from post traumatic stress disorder. So we’re conducting this study in partnership with the UBC, so the University of British Columbia and expect to be able to share results two years after it’s approved.

Matthew: Do you get a lot of applicants from returning from theatres of war and things like that?

Christian: Yeah, we’re still going through the approval process, but we’ve aligned ourselves with different industry groups that service those patients essentially. So there will be a significant population for us to choose from when we hit the go button.

Matthew: So British Columbia, Vancouver in particular kind of has two things at odds here. I mean there is people visiting dispensaries. I don’t know if they’re called legal dispensaries or not, but purchasing cannabis and then there is the medical which can only be delivered by mail. Do you see these things kind of reconciling and dove tailing at some point in the future? Do you have a sense of that or is it just too early?

Christian: It’s still pretty early. You know, there was an injunction put in place around the April 1st timeline when the MNPR was essentially born. You know it’s very similar to what’s happening in the United States as well. You know, take Arizona for example that has state license dispensaries, but it also has legacy dispensaries from a Compassion Care Act. So we see conflicting systems really all over the world and it’s really no different. You know, the way we look at it as, you know, we’re trying to be part and be stewards of a regulatory environment just because we think ultimately it produces better quality, better security, better ethicacy. It helps us with clinical trials. It allows us to create real data, and that real data makes real change. And so we work harder than a lot of people in this industry and we jump through more hoops, but we think ultimately that’s what gets us to a world of less prohibition.

Matthew: Now we’ve interviewed Greg Wilson of Vida Cannabis in Ottawa, and Bruce Linton of Tweed also in Canada. These companies are creating just absolutely huge grows. How does Tilray’s grow size compare and is the size of the grow the most important thing or what other variables do you look at?

Christian: Yeah. So we currently have a 60,000 square foot, state of the art research and production facility on Vancouver Island. Pending regulatory approvals, we have plans to expand in a second facility that is, you know, four times larger than their current size. You know, I don’t know if bigger is essentially better at this point. You know there’s still a lot of growing pains in this industry. You know, there’s a lot of people entering this space that might not know cannabis very well, and then there’s another contingent of people that have been in the industry for a long time that don’t understand the business behind it. But we really focus on, you know, quality, safety and security. That’s kind of the model that Health Canada has set up, and that’s what we adhere to. You know, we are growing at a very rapid cliff, but going, you know, launching at an enormous size, you know, I don’t know if there are efficiencies gained by coming out of the gates with that model. And the whole market’s evolving too, right. It started at, you know, patient zero. It’s not like we were able to transfer a whole system of quasi-legal patient base over to a legal patient base overnight. So it’s an evolving system, and we believe in an evolving business plan to go along with that.

Matthew: I know it’s a hard thing to predict the future, but in the months ahead what do you think about the supply and demand dynamic both in Canada and the United States?

Christian: Well, you know, it’s an interesting question. It’s a great question. You know right now supply, you know, anything that’s grown or produced is being sold, right. I mean that’s the reality, and that’s a fact of what’s happening. But back to your earlier question, you know, if you start seeing a big influx of, you know, big box, you know, grows and they all enter the market at the same time, you know, there’s a potential to see an excess of supply. And you know, what does that do? I mean it changes the fundamental economics of an industry, but you know, as Privateer’s and Privateer’s Holdings and the way we think about that is, you know, we think about this in terms of brands. And we think about clean mature brands that, you know, patients and consumers can trust, and that’s what we focus on right. We’re focusing on the real long term play of building value and creating quality, safety and security around a product. And you know, when you talk about, supply, that essentially should not matter because we’re creating global, reliable brands.

Matthew: Now for potential or prospective entrepreneurs out there that are considering getting into the cannabis industry, what are the big problems you feel like need to be solved?

Christian: You know, banking is probably the highest on my concern list. You know I think once banking is changes, there’ll be a domino effect for the better. You know, if you’re a young entrepreneur, this is really complicated. This is the most complicated industry I’ve ever been a part of in my lifetime. You know, state laws vary, you know, county laws vary, city laws vary. It all varies, right. And there’s this conflict, and it’s just not as easy as entering the space and, you know, creating a billion dollar company. There’s a lot of pitfalls that you can easily encounter and there’s a lot of mistakes that can be made.

So you need to take a little bit of time to research the industry and research the players and the people that have been in the industry for a while and the people that are entering the industry. There’s not a lot of real good information out there. There’s a lot of white noise. There’s a lot of people that make proclamations, you know, good, bad, or indifferent. And it takes a while to sift through what’s real and what’s not. You know, and entrepreneur needs to due diligence on whatever sector of the spaces they plan on entering.

Matthew: Now a lot of people in the cannabis community look at Privateer as among the most savvy individuals in the space. When you look out on the horizon 2016 and beyond, do you see cannabis being removed from Schedule I list of dangerous drugs?

Christian: Yeah. You know, we hope. That’s our hope, but we, you know, see something, some major changes in the next three to five years. You know, it’s hard to put a date on that, but you know we, yeah we have our fingers crossed and we hope that happens.

Matthew: And as we close Christian, how can listeners learn more about Privateer and the growing portfolio of companies?

Christian: So yeah you can go to www.privateerholdings.com you know from there you can see a list of our portfolio companies. You can read more about our team, our management team and other managers within the group. You know, there’s a lot of news articles on us, and there will be a lot more forthcoming. You know, we generally have a lot of fairly exciting announcements every couple of months, and you know we have a half a dozen really exciting things that we’re working on right now.

Matthew: Great. Well Christian thanks so much for being on CannaInsider. We really appreciate it.

Christian: Yeah thank you Matt. I enjoyed it.

Matthew: If you enjoyed the show today, please consider leaving us a review on iTunes. Every five star review helps us to bring the best guests to you. Learn more at www.cannainsider.com/itunes. What are the five disruptive trends that will shape the cannabis industry in the next five years? Find out with your free report at www.cannainsider.com/trends. That's www.cannainsider.com/trends. Have a suggestion for an awesome guest on www.cannainsider.com, email us feedback@cannainsider.com. We would love to hear from you

Colorado’s Cannabis Czar – Ron Kammerzell, Lessons Learned and How Edibles are Changing

Ron Kammerzell

Ron Kammerzell is the Deputy Senior Director of Enforcement at Colorado Department of Revenue, he is often referred to as the Colorado Cannabis Czar.

What you’ll discover in this interview:

– How edibles regulations are changing

– Lessons learned by Colorado regulators

– A look at banking for cannabis businesses

– Excise taxes on cannabis going forward

– and More

*Guess What? You could be listening to this interview on your commute. Get the free podcast for your iPhone or Android Device*

Read Full Transcript

Matthew: Hi, I’m Matthew Kind. Every Monday and Wednesday look for a fresh episode where I’ll take you behind the scenes and interview the leaders of the rapidly evolving cannabis industry. Learn more at www.cannainsider.com. That’s www.cannainsider.com. Do you know that feeling when you sense opportunity, when you see something before most people and you just know it will be successful, then you're ready. Ready for CannaInsider Consulting. Learn more at www.canninsider.com/consulting. Now here's your program. Our next guest is Ron Kammerzell, the Senior Director of Enforcement at Colorado Department of Revenue. Ron is often referred to as the Colorado Cannabis Czar. Welcome to CannaInsider Ron.

Ron: Thank you very much. I’m glad to be here.

Matthew: Now before we get started, how do you feel being referred to as a Czar? You seem like a nice guy, not someone that’s very Czar-like.

Ron: Well it’s kind of an interesting twist. I don’t know that I’ve ever been referred to as a Czar before, but certainly we’ve been very involved with trying to get this program off the ground. So you know, I’ve probably been called a lot worse.

Matthew: Me too. Can you give listeners an idea of what your job is exactly and how it relates to cannabis?

Ron: Sure, let me give you just a real quick, broad overview. I’m the Senior Director of Enforcement. So I have management oversight responsibilities for gaming, racing, liquor, tobacco, auto industry and marijuana in the state of Colorado. So it’s kind of a varied group of things that I’m responsible for, but in many respects a lot of the things we do in some of these other regulated industries have really translated well to the marijuana industry.

Matthew: And what was your background before becoming the Senior Director of Enforcement?

Ron: I was the Director of the Division of Gaming, so regulating limited stakes casinos in Colorado, for about seven years. And prior to that I was also employed as a criminal investigator with the Colorado Division of Gaming.

Matthew: And one thing I want to point out for listeners before we get into the cannabis-specific questions is that if you live outside of Colorado, the things were talking about are very pertinent today because Colorado’s under a microscope, and a lot of other states are looking at what’s going on here, and it’s very likely that whatever state you look in one or two things will probably be taken from the Colorado play book. And if you know that ahead of time, you’ll be in a good position to understand what’s happening. So as we dive in Ron, looking back at 2014, how do you feel like legalization went?

Ron: I think given the very aggressive timelines that we had, we’re pretty pleased with how things went. The launch of retail marijuana on January 1st went, you know, pretty smoothly. And we’re please with where we are today. Certainly we recognize that we’ve got… we continue to have work to do, but we’re making really good progress.

Matthew: And based on the regulations and the future changing regulations, what do you see cannabis businesses doing really well? What are they adopting well that you think they’re doing a good job?

Ron: Well I think they’ve really embraced the concept of seed to sale tracking which is obviously a critical component with respect to the Cole Memorandum. And the federal government, they’re very concerned about diversion. They want us to have a closed-loop system. And our licensees have really embraced that and has really done a good job of implementing that tracking system. Also with edibles, although there’s been a lot of negative press related to edibles, I can say that the industry’s been very responsive. After we determined that we had some challenges and some issues with edibles and overconsumption, the industry’s really, on their own part, taken a voluntary position really to get ahead of edibles manufacturing leading up to regulation. So, you know, they’ve really done a responsible job in that way.

I think they’ve also done a good job of ensuring that they continue to maintain a dialogue with not only the division who regulates them, but also the General Assembly. And I think as long as we continue to have a really good, open dialogue that ultimately results in really good public policy.

Matthew: Now you mentioned the Cole Memorandum or the Cole Memo. Can you just help us understand what that is and how it affects cannabis businesses?

Ron: Sure, well the Cole Memorandum was issued by the Department of Justice, and it was issued back in August of 2013. And it really gave guidance to states that were implementing the legalization of marijuana on some top priorities that the regulatory bodies as well as the states should focus on. And really the big three for us out of the eight is ensuring that we prevent diversion to other states, making sure that we’re protecting kids, that we’re keeping it out of the hands of our youth, and then also making sure that we’re keeping criminal and corruptive elements out of the marijuana industry. They don’t want this to be a front for organized crime or drug cartels to come in and profit from it. So those are really the three major priorities that we’re really focused on as a regulatory agency. And I think the state as a whole has really done a good job of focusing on those things.

Matthew: As you mentioned, there was some hiccups around edibles. Can you describe what happened that you didn’t anticipate and then how to mitigate that problem going forward?

Ron: Sure. Well we have a couple of very highly publicized incidents, really tragic incidents where it involved at least the possible overconsumption of edible retail marijuana products. And I think the challenge there is, you know, we had about two and half to three years of experience with the medical marijuana industry and regulating that. They also have edibles, and we just didn’t see those overconsumption issues on the medical side. However, I think what we’re seeing on the retail side is we’re seeing new consumers to retail edible products and even people who have perhaps even smoked marijuana have not had the experience of ingesting edible products. And there’s certainly a different physiological reaction to ingesting marijuana versus smoking it.

So I think that was something that we didn’t anticipate. We figured that recodifying [ph] what we already had on the medical side was going to be adequate for the retail side. But it clearly is not the case because we have a lot of educational gaps. If you look at the profile of a retail consumer versus a medical patient, medical patients have a very thorough understanding of the effects of THC and the effects of ingesting THC. And we have that education gap on the retail side. So in order to really focus on trying to make it a safer and a better experience for the retail consumer, we really needed to focus in part on education, and that’s really where the industry has stepped in, and again voluntarily have really done a good job of educating the consumer when they’re in a retail store about how to ingest retail marijuana, being sure you’re going slow, making sure you’re giving adequate time to feel the effects of it. But also really making sure that the consumer clearly understands what a serving size of THC is and if they’re purchasing an edible that has more than 10mg of THC in it, that we give them clear guidance through marking the product or demarking and scoring the product so that they can break off a serving and know that it’s just one serving of THC.

Matt: Now on February 1st the child resistant packaging rules will continue to expand. Can you tell us a little bit about that?

Ron: Of course we had some regulations on child resistant packaging, but what we’ve done is really more than anything in the edible, revisions to the edibles rules is really clarify that. So if a manufacturer or retail edible product is going to manufacture a single serving or 10mg of THC in their edible product, the child resistant packaging must be on the product but it only has to survive the first opening. If they’re manufacturing a product that has multiple servings, so let’s say as an example, a cookie or a chocolate bar that has 50mg of THC, presumably that’s five servings of THC, as we’ve defined it in the rule. And their child resistant packaging has to survive the first opening and remain child resistant beyond that first opening. So you’re looking at things like child resistant zip lock bags which are very popular in the industry, squeeze bottles that have child resistant properties and capabilities. So things of that nature.

Matt: What misinformation is out there among cannabis businesses about regulations and how they should interpret them.

Ron: I think probably the most challenging part of the regulatory scheme is the labeling part of it. A lot of the requirements for labeling are built into the statute, and it’s a laundry list of things. And so I think it’s very difficult for our licensees to comply with those standards. And there’s been a lot of discussion about do we have too much information on our labeling requirements and does it become white noise to the consumer. So things like “Keep out of reach of children” becomes white noise or the actual serving size. This has, you know, 50mg of THC, serving is 10mg, there’s 5 servings in this package. There’s so much information that’s required by statute on the actual labels the concerns from the industry and from others is it becomes white noise after a while.

And so there may be an opportunity here that the legislature perhaps might look at some of the labeling requirements. The industry is also looking at that this year during our General Assembly session to see if there’s some things that we can do to change that and make the labeling more effective and really do what it’s supposed to do for the consumer.

Matt: Now switching gears to taxes. Is there an estimate in how much tax was collected from cannabis businesses in Colorado in 2014?

Ron: I don’t think we have the final numbers available, but we’re looking at right now and I think it’s through November that we’ve collected about $56 million in taxes.

Matt: Great. And for listeners that don’t understand the production limits, can you give an overview of what they are? How will production limits change in the future based on demand studies or something else? I mean how do you gage, you know, gage the production limits to make sure the market exists in way that’s functional for everybody?

Ron: Right. So in the summer of last year we put some production limits in place for retail marijuana. We have tiers at the cultivation level. So we have a Type 1, Type 2 and Type 3. A Type 1 tier restricts the ability of a cultivation facility to grow no more than 3,000 plants. A Type 2 is 6,000 plants, and a Type 3 is 10,000 plants. So part of the production restriction that we put in place is new entrants into the market because vertical integration went away (13.24 unclear) in October. So we have new entrants into the market that maybe only want to be a cultivation. They don’t necessarily want to be a store. So any of the new entrants into the market have to start at that lowest tier, the 3,000 plant limit. And order for them to move up into a higher tier, they have to demonstrate to us that they’re selling at least 85 percent of the marijuana that they’re producing over (13.50 unclear).

So they’ve got… they have to demonstrate that they’re able to sell the product that they’re producing, that they’re not overproducing because clearly our biggest concern is you have too much on hand inventory and overproduction will really drive down the prices of marijuana and really create a stress point or an incentive for people to move marijuana to other markets where the prevailing price is much higher. So that’s kind of the mechanism that we’ve used to do that is if you want to move up your production, you have to prove to us that you’re selling your marijuana in the regulated market at least 85 percent of what you’re producing. We will likely, in fact, in the rules that we promulgated this summer we said that we were going to revisit this. We are going to update the market demand study that we did last year. The good new there is we have a full year of data out of our metric or inventory system that can be utilized to really help us better understand the market here in Colorado. And so once we have that study updated that will really be a springboard for us to take a look at our production to see if we’ve got it right. It’s a challenge for sure, and we’re trying to hit that sweet spot where or to the extent possible we’re balancing supply in demand within the state and it’s not an easy task.

Matthew: I’m interested to hear what you think the price should be per gram, for example, to eliminate the black market or move it down to something that’s just a tiny, tiny piece of the market. I’ve heard people talk about, you know, certain price points where the black market would essentially go away because it’s just not profitable anymore. Do you have any ideas in mind where the price per gram, if it reaches this level, if it drops to this level, it will essentially eliminate almost all of the black market?

Ron: You know we haven’t really looked at that to that granular of level at this point because in large part because just has changed so much in the last year. I mean when retail marijuana opened in January of course we had shortages because there was more demand than supply, and we’re starting to see that correct itself as we have more retail cultivation facilities and retail stores come online. I think it’s really too early to really at least make a confident response to that. I think time will tell, but I think that’s something that we’re really interested in looking at. And you know, the other comment is, and I’ve said this before, is we want to do everything in our power to shrink the black market. We’ll never eliminated it.

Matthew: Right.

Ron: I just don’t think it’s realistic to assume we’ll totally eliminate the black market. But we want to do everything we can to minimize it in the state.

Matthew: Now currently only recreational marijuana is subject to testing. Will medical marijuana be subject to testing soon?

Ron: Well the medical marijuana program just went through a Sunset Review from the Department of Regulatory agencies in that it’s required by statute that we go through that Sunset. And one of the recommendations in their report is to harmonize the testing for retail with the medical marijuana regulatory framework. And I think wherever possible we are really interested in harmonizing the two because the reality is is we have any of our retail licensees are also medical licensees. Many of their operations are in the same buildings or next door to one another. And to the extent we can harmonize them so that the rules are the same on both sides of the fence. It makes it easier for our licensees to comply. And you know, we’re really interested in obtaining voluntary compliance from them. So that’s one critical piece of that is to harmonize the testing. And that’s just one reason. The reason is it seems strange to test retail marijuana, but then the marijuana that’s being used for medicinal purposes by patients is not tested.

Matthew: Right it does seem a little strange.

Ron: Yeah, it almost seems backwards really, but it’s just how the evolution of the industry here has occurred. So I think, you know, we recognized and the folks that did the Sunset review recognized that that’s an important component that we bring medical marijuana into the fold of mandatory testing.

Matthew: Now some people say that the taxes on recreational marijuana are prohibitive and lead to more gray and black market activity. What’s the future of taxation on marijuana both medical and recreation going forward?

Ron: Well you know that’s really up to the General Assembly. When they passed Proposition AA, it gave some latitude to the General Assembly to change the excise tax and the special retail sales tax on retail marijuana. I’m not aware of any movement afoot to change the general sales tax on medical marijuana. I think the general thought is that by changing that you may limit the accessibility of medical marijuana to patients, and I think that that’s probably not a way that the General Assembly would move toward. But I don’t speak for the General Assembly, but I think they’re going to continue to monitor it. And this summer they have an interim revenue committee that took a look at the tax revenues. So I think they’ll continue to monitor it and they may make adjustments over time. They certainly have the authority to do that.

Matthew: Okay so the excise tax on clones, flower and trim has gone up from 2014 to 2015. This is something that the General Assembly decides then or there is some leeway within the Department of Revenue?

Ron: The average market rate, which is the average wholesale price of those products upon first transfer out of a cultivation facility, is set by the Department of Revenue, actually by our taxation group. And so what they do is they look at the wholesale prices and they actually calculate an average. It’s prescribed in statute. The General Assembly gave us very specific formulas to follow. And so based on the information collected by the taxation group on the wholesale price, that’s why the average market rate changed this year.

Matthew: Now going back to taxation or collecting revenue, do cannabis businesses actually drop off cash at your office? How does that work?

Ron: A very high percentage of them do. We have actually developed a system for them to pay their taxes with cash. They pay their license fees with cash. And we, you know, of course had to take additional security precautions with that and you know, have counting machines and some additional equipment to actually process that. But it’s important to note that they’re not the only businesses. You know, there are other businesses within the state that on occasion will pay with cash. So it’s not a concept that’s totally foreign to us, but certainly the volume that we’re seeing from the marijuana industry has made us have to take some additional precautions.

Matthew: We talked about the Cole Memo a little bit and there’s also news of a cannabis credit union opening up here in Colorado. Do you think 2015 is the year that banking will be resolved and cannabis business will be able to partake in just traditional retail checking accounts?

Ron: I certainly hope so. It remains to be seen. I can’t predict what the US Congress is going to do. I know that’s an issue that’s on the radar of many of the Congress folks from Colorado. I know they understand the importance of it. And I think the state is really doing everything they can from the state level to, you know, develop this co-op and I think it would be a huge victory to have banking for the industry because quite frankly I think it’s just a general public safety concern for the state and the communities that have these businesses. But also from a regulatory standpoint it would really improve our ability to have an audit trail to go in and audit taxes and audit the movement of marijuana in the state. I think it would enhance the regulatory framework as well.

Matthew: Have any other states reached out to you for help or guidance in setting up their cannabis programs and regulations?

Ron: We’ve had a lot of contact and interaction with a number of states and countries quite frankly. We’ve had some interaction with Switzerland, Columbia, Uruguay, Canada, France, Germany and pretty much just about every state that’s contemplating legalization of marijuana in one form or another in the United States. And in fact today I’m attending a conference of the Colorado Association of Chiefs of Police on marijuana, and we have a lot of folks from different states that are attending this as well. We’ve met with Oregon and Alaska. Of course as we were implementing retail marijuana we were really talking to Washington State almost on a weekly basis. So there’s been a lot of interaction with other states and other countries.

Matthew: So with other states and other countries that are setting up their regulations, what are the top questions or problems they’re trying to solve and get guidance from you?

Ron: Well I think the number one question we get is what are the most important things for us to get right. And I think our biggest response to that is give yourself plenty of time. Of course we had very aggressive timelines here in Colorado that were established in large part in Amendment 64, but also through the legislative process. So give yourself ample time to set up the infrastructure and make sure that you have proper funding for the program. And you know, make sure that you’re bringing all the stakeholders to the table as you start to begin to set up public policy on this issue. If you don’t bring all the stakeholders to the table and identify the issues upfront, that results in really problems with your public policy, with your regulations, with your statutes. And the more you can get those issues identified upfront and really get them address in the implementation of the public policy, the better off you’ll be.

Matthew: Ron we talked a little bit about what cannabis businesses are doing well and working with the Department of Revenue. What could they do better in 2015?

Ron: Honestly we’ve been really pleased with the level of compliance we’ve had in the industry. Is it perfect, no. A perfect example of that is underage compliance. We modeled our underage compliance program after the Liquor Enforcement Division, what they’ve been doing for years where we sent operatives into try to purchase retail marijuana as under 21 year old. We’ve had an incredibly high compliance rate with that. We’ve had some issues, some noncompliance issues, but they’re pretty minimal considering the scope of things. And you know, comparing that to the liquor industry, you know, we’re probably slightly higher in our rate of compliance right now on underage sales compared to the liquor industry. So I think that’s something they’ve done really well. Again I think they’ve really embraced the inventory tracking model, and they’ve done a good job with that. I think we’ve had some challenges with labeling and, you know, but those are to be expected as we roll out a pretty sophisticated regulatory model. We recognize that there’s a lot of opportunities for us to educate the industry through the compliance process and make sure that they understand things. I think overall we’re pretty please where our compliance level is right now.

Matthew: Great. I love to hear that. In closing how can listeners keep abreast of all the work you’re going at the Department of Revenue?

Ron: Well certainly visiting our Department of Revenue website. We have a lot of information on taxation there, and visiting the Marijuana Enforcement Division tax site or website. You’ll see a lot of activity related to rule making. We’re currently working on putting together an annual report that we anticipate will be distributed widely and will be very interesting to most folks. And really starting to put together some monthly reporting on the state of the industry here in Colorado. And it will pull in information from licensing, from compliance, from aggregate inventory information. I think it will be really important, and it really dovetails nicely with, you know, a big part of our regulatory framework as being transparent to the public. And so the more we can share information with the public on the state of the industry here in Colorado, I think is better for us. Tell your listeners to stay in tuned on that, watch the website and we hope probably by the end of the first quarter to have some of that information out there.

Matthew: Great. Ron thanks so much for being on CannaInsider today. We really appreciate it.

Ron: My pleasure.

Matthew: If you enjoyed the show today, please consider leaving us a review on iTunes. Every five star review helps us to bring the best guests to you. Learn more at www.cannainsider.com/itunes. What are the five disruptive trends that will shape the cannabis industry in the next five years? Find out with your free report at www.cannainsider.com/trends. That's www.cannainsider.com/trends. Have a suggestion for an awesome guest on www.cannainsider.com, email us feedback@cannainsider.com. We would love to hear from you.

Cannabis Consumers are Turning to Vape Pens Find Out Why With Ralph Morgan of O.pen Vape

Ralph Morgan of Open Vape

Discover the latest in cannabis vaporizer technology from co-founder of O.penvape Ralph Morgan. Learn why Ralph thinks you are wasting 80% of your cannabis smoking a joint versus vaping.

Key Takeaways:

– How you can pick a strain of oil that works for you
– A new line of cartridge that is just cannabis flower oil is coming
– Learn why O.PenVape uses propylene glycol in their vape cartridges

*Guess What? You could be listening to this interview on your commute. Get the free podcast for your iPhone or Android Device*

Read Full Transcript

Matthew: Hi, I’m Matthew Kind. Each week I’ll take you behind the scenes to interview the insiders that are shaping the rapidly evolving legal marijuana industry. Learn more at www.cannainsider.com. That’s www.cannainsider.com. What are the five disruptive trends that will shape the cannabis industry in the next five years? Find out with your free report at www.cannainsider.com/trends. That’s www.cannainsider.com/trends. Now here’s your program. Prefilled, ready to go cannabis vape pens are very popular and becoming more popular every day. We’re going to find out why that is and what you should know about prefilled vape pens from the co-founder of O.penVAPE, Ralph Morgan. Ralph, welcome to CannaInsider.

Ralph: Thank you. Thank you for having me, pleasure to be here.

Matthew: Ralph to give us a sense of geography, can you tell us where you are in the world?

Ralph: Yeah we currently operate in five states in the US, and we are continuing to add licensees in states to that ever growing list and also looking abroad in Europe.

Matthew: How great, and just to set the record straight I know people say Open Vape and O.penVAPE. How do we pronounce this correctly?

Ralph: Yeah we, both are correct. O.penVAPE is the correct pronunciation. Often times it’s an O pen which we like equally as well.

Matthew: And can you give us a high level overview of what O.penVAPE does?

Ralph: Absolutely. O.penVAPE is a company that provides a wonderful vehicle for adjusting cannabis, and that of course is the personal, portable vaporizer. And we license our IP our recipes to folks in other states that are licensed to extract organically cannabis that goes into those pens.

Matthew: How did you get started in this industry? What’s your background?

Ralph: My background is in healthcare, sales and marketing in the healthcare industry. I worked for companies like Stryker that sold implantable orthopedic devices. And got in this industry by first realizing the incredible medicinal advocacy of it, and learned very quickly that there was a demand on the market for a product that would deliver a unified, repeatable and dependable dose of cannabis. And so from that we created O.penVAPE which is our own line of pens so that we could control quality and offer a product to folks that was healthy and organic and that’s been very popular. We’ve had a lot of fun so far with it.

Matthew: And can you describe how O.penVape works in detail? I mean there’s probably an atomizer, there’s the liquid, the battery. Can you just give us an overview of what’s actually going on in the device?

Ralph: Sure. So you have the battery, and this is a lithium ion battery, so very similar to all the batteries that are in our cell phones. So they’ll last typically for about 1,000 charges. And there’s a microchip on top of that batter that tells it to do things. For example to turn off in a certain period of time and to reach a certain temperature. Then you have the atomizer or the cartomizer which is the area that has the fluid in it as well as the heating element. And that heats up and vaporizes as someone drags or pushes a button and inhales.

Matthew: So the battery lasts roughly, did you say 100 or 1,000 uses.

Ralph: About a 1,000 charges, correct.

Matthew: Wow and then what about the atomizer? Do those have to be replaced typically?

Ralph: Those do. Those need to be replaced much more often, and we sell our cartridges as a disposable. So one time use, and what this ensures is quality. The cannabis oil that’s inside of these is very expensive. So the last thing we want is for those to malfunction or leak. So each time someone gets a new cartridge they’re also getting a new heating element.

Matthew: Okay. And I’m imagining, I don’t know if there is or not, is propylene glycol in the liquid? Can you explain what that is if it is and tell us exactly what it’s for?

Ralph: You bet. We absolutely do not use propylene glycol and there’s a lot of what sounds like subtleties differentiating polyethylene glycol which is what we use and what the electronic cigarette world has used which is PG or propylene glycol, and VG vegetable glycerin. Those two really like nicotine and mix well. Cannabis really loves polyethylene glycol and more importantly it’s a product we use because it’s safe, and it’s something that the pharmaceutical industry has used for decades for inhalants. Bayer, Astra Zeneca, Johnson & Johnson for example all use polyethylene glycol as a product that helps suspend something and used for an inhalant for children.

So with that we were very delighted to see that we had a safer alternative to what was largely and still used in the market which is PG or propylene glycol. So polyethylene glycol is what we use to suspend the cannabis, and we are also getting ready to launch a pure line that’s just cannabis which is a lot stronger. And we’re delighted to offer both, but we’re excited to launch the pure cartridge line here very soon.

Matthew: So the polyethylene glycol , is the purpose of that just to suspend the cannabis oil and make it viscos? Is that what’s going on there or just so we can understand the purpose of what it is?

Ralph: Yeah so there’s a couple of things it does. It does suspend the cannabis and it mixes with it and it changes the viscosity and it basically makes it thinner so that you’re not left with a cartridge that has 40 percent of the product left in it once it’s done. So it allows for the best value. So you’re getting all of that cannabis oil that you’ve purchased out of the container. And it also acts as a lubricant so it helps vaporize the particles or the cannabis oil. And again we didn’t invent that. That’s something that we recognized from Big Pharma and realized that hey this can be applied to cannabis just as it’s been applied to many medicines that are out there.

Matthew: And how do you purchase the cartridges? Is it something where you buy the housing of the device of the O.pen and then you just keep on as you use a cartridge and discard it, you just grab another one?

Ralph: Yeah so there’s two ways you can purchase. You can go online to www.openvape.com and you can buy all of the ancillary equipment like the battery or an empty cartridge. We’ll soon sell what we’re calling the O.penVAPE kit which will be everything including the mixing tools minus your own oil. And that can be for any essential oil. For example, you may want to vaporize chamomile or cava for relaxation effects. But if you want to buy the cannabis, that of course needs to be purchased through state licensed and recognized dispensaries and you can text O.penVAPE to 20300 to find a location nearest you, or you can go to your favorite local dispensary who will more than likely carry the O.penVAPE product, and again in those states that are licensed to do so.

Matthew: Now what about listeners that want specific strains of oil with the pen? How does that work? Is that possible?

Ralph: It is. So many of the cartridges that we sell and the oil that we make are strain specific. So in Colorado for example probably half of the product out there is strain specific. The other half is separated to at least sativa indica hybrid which is really nice to enjoy those differences. With the strain specific people may find a strain that really speaks to them, may speak to their ailment or that may just have a really nice affect on them and they can enjoy the affects of that.

Matthew: So apart from THC level, what other information about the oils on the cartridge as far as are there CBD levels or what else is on there?

Ralph: Yeah so testing’s mandatory in Colorado, and we’re seeing that of course take place with the other states as they catch on. So we include the test results which give you the cannabinoid profile that includes THC of course, but also CBD and CBN. CBD probably being the most interesting other bit of information, and we have CBD rich cartridges where we try to have not just a trace of CBD, but a really nice CBD rich cartridge that’s derived from genetics that we’ve grown or that other leading growers in the space have grown and we have extracted.

Matthew: Okay. And is there a general ballpark, I’m sure it varies from state to state and day by day, but is there a general idea for the price of a vape pen or a cartridge?

Ralph: They come in three sizes, 150 mg, 250 mg and 500 mg. The most common is a 250 mg and it’s for sale on average between $25 and $40 for a cartridge.

Matthew: And what does the year ahead look like for O.penVAPE? You mentioned that there’s some expansion and licensing going on. What does 2015 look like?

Ralph: Well 2015 is going to be an exciting year. Expansion definitely, we’ve got six licensees to date. We’ll have another four in the next 30 days. So 2015 is definitely a year of expansion. We’re also going to be launching a O.penVAPE 2.0 which we’re very excited about. We brought on a CEO in 2014. His background is in the semiconductor business. So we’ve invested heavily on the technology side and really looking forward to having some of those products come out the pipeline. We’re also going to be introducing products that are possible because we are isolating cannabinoids. I think that’s part of the future here as we move forward is the continued purification and sophistication of extraction. So being able to extract and then isolate those cannabinoids allows us to make custom blends for either ailment specific products or to really hone in on what kind of effects people are looking for and what we can safely and repeatedly offer for folks. So I think those are the top three things for 2015 which is additional growth and the continued purification and new technology about to come on the market.

Matthew: Now apart from anything that O.penVAPE is doing, is there just anything you see in the cannabis industry that excites you?

Ralph: Boy I think there’s lots of things in the cannabis industry that are really exciting. One is the continued sophistication of the folks in the space and that draws investors which continues to raise the bar in the high water mark of products and safety and sophistication. We see it every day. We see new and interesting marketing doing interesting products. And with all these things we see the continued acceptance of the industry which is really exciting. It’s really more than just an industry we’re all part of. It’s really a movement and a social movement and it’s really exciting to be a part of.

Matthew: So I don’t think a lot of people know that O.penVAPE played a small part in Weed the People. Can you talk about that a little bit?

Ralph: Yeah so Weed the People is a film talking about just that, about this mission and this social change that we’re all part and led by Rikki Lake. And she reached out to us and we appreciated that. She recognized us as folks in the space that were leaders in the space, and she asked if we would help her cause, and we jumped at the opportunity and we donated some Go Pens and some devices to help her raise money for that cause. And it’s been a lot of fun to work with her and work with other celebrities that have reached out to support again the cause. So I think we’re going to see a lot more to come as cannabis hits mainstream. I know there’s several shows hitting including Pot Barons. There’s a lot of attention on this new industry that’s growing faster than the smart phone industry.

Matthew: Wow, that’s saying a lot.

Ralph: It sure is. We all love our smart phones and here we are in an industry that’s growing even faster than that. It’s incredible.

Matthew: You mentioned a little bit about isolating certain cannabinoids. That is something that is really interesting because we hear so much about THC, CBD seems to kind of be Justin Bieber rock star of the moment, but is there any other cannabinoids or plant compounds that you look at and you say wow this is, there’s really interesting possibilities here?

Ralph: And you mention Justin Bieber being the CBC of the industry. If that’s the case then technology that can isolate cannabinoids would have to be the record label.

Matthew: Right.

Ralph: So we’ve invested in equipment that can isolate the cannabinoids. So the genetics will always be important, and you can get, you can enjoy the benefits of CBD rich raw material as well as high THC raw material, but if you can further isolate that and have a pure oil that’s CBD rich or any other cannabinoid that you’re trying to isolate, then it opens the door to a whole other discussion. And that is products that could be ailment specific. For example if you have someone who is suffering from seizures, they may want a blend that’s high in CBD but still want to take advantage of the entourage effects or they still want some THC but they want the full array of other cannabinoids. And they want a special ratio, and that may be driven by the consumer or it may be driven by a physician depending on if we’re talking about medical or rec.

So for us we’re really excited to be invited to the table of a lot of research that’s being done or about to start, as well as, is offer products that we haven’t been able to offer before, the industry hasn’t seen before. So really excited about that. You can liken it to a microbrew, and right now everyone’s just making beer, but now we’re going to be able to offer, you know, something that has a lot of hops for the people that prefer that. And to lay on top of that, a medicinal effect is absolutely exciting for us. We don’t want to be in the way of Big Pharma, but we certainly want to push the envelope with this incredible plant and see what it can do. We’re all aware of the magic that it’s capable of. And so what we’re seeing, what we’re going to see this year and in the future is that being further understood, and we’ve got so much to learn. So really excited about the isolation of the cannabinoids. It’s going to be a fun fun year and we’re really looking forward to that.

Matthew: And you know when people smoke flower in a bowl there is obviously some lighter fluid heat and combustion going on, and you’re not necessarily getting everything you want. You’re getting some of what you want, but there’s some other things that you don’t want in there. Do you ever look at what’s actually happening when people use a lighter and combust the flower, and can you talk about that a little bit? Is there, not so much risks, but are you getting things that you might not want?

Ralph: I know when people smoke marijuana they’re getting carcinogens. They inhaling, you know, burnt plant matter, and that’s one of the many dangers of smoking. What I like about vaporizing and what we like to offer folks is the fact it’s an option that does not include that which is wonderful. Also there’s a wonderful economic aspect to it. When you smoke a joint you’re wasting, on average, about 80 percent of the cannabis due to it burning while you’re not inhaling it. When it’s in a vaporizer, of course that’s not happening. So it’s great value as well as a much safer alternative.

Matthew: Great. Ralph, as we close how can listeners learn more about O.penVAPE?

Ralph: Yeah to learn more about O.penVAPE they can simply go to the website and they can hit the contact us and we’re happy to answer any questions. We have several customer service reps that answer folks’ questions and that’s the best way to get answers to your questions. We take them all very seriously. Often times people’s questions are related to not just a preference but related to an ailment or an issue they have. So we’re very sensitive to the fact that people are using this medicinally and that comes with a lot of responsibility. We’ll be launching a blog soon and having regular updates as we do on Facebook and Twitter which are two other places that are great to go to for information.

Matthew: Thanks so much for being on CannaInsider today Ralph. We really appreciate it.

Ralph: My pleasure. Thank you for having me.

Matthew: If you enjoyed the show today, please consider leaving us a review on iTunes. Every five star review helps us to bring the best guests to you. Learn more at www.cannainsider.com/itunes. What are the five disruptive trends that will shape the cannabis industry in the next five years? Find out with your free report at www.cannainsider.com/trends. That's www.cannainsider.com/trends. Have a suggestion for an awesome guest on www.cannainsider.com, email us feedback@cannainsider.com. We would love to hear from you.

Page 30 of 40« First...1020...2829303132...40...Last »