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The Marijuana Business Conference and Expo is the place where everybody in the cannabis industry meets everybody else, industry information is shared, friendships are formed, and partnerships are created. Listen in to hear how to make the most of your conference experience with George Jage, The now former president of Marijuana Business Media.
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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.
While it seems there are new cannabis related conferences popping up every day, there are very few that are worth it. The Marijuana Business Conference and Expo is definitely worth it. If you really want to get oriented as to what is going on and network with others in the cannabis industry, this is the place to be. I’m pleased to welcome George Jage, President of Marijuana Business Media to CannaInsider today. Welcome George.
George: Thanks Matthew. I really appreciate the opportunity. I love listening to your interviews and what you’re doing and of course thank you for the stellar introduction about our company.
Matthew: Oh sure. Now you have a background in trade shows and expos. Can you tell us a little bit about your background and how you got into this business?
George: Sure. Actually my background is really in B2B media. Out of college my family had a business where they were liquidating and jobbing surplus clothing in the marketplace. You know, very much at the beginning stages of when you started seeing big box discounters like TJ Maxx’s and Marshall’s and stuff like this, you know, companies that would liquidate excess manufacturers’ inventory and then we sell it to these types of companies. Very tough business, very cyclical. And the time when I was getting out of college was experiencing some pretty big challenges.
So I ended up coming on board to help my father’s business kind of dig out of the weeds a little bit. And, you know, at the time there was a major national peril event that was growing rapidly and kind of pushing these exhibitors or these jobbers out of the space that they had typically exhibited in. They really weren’t welcome at the big manufacturers’ show because, you know, quite often they might be selling Tommy Hilfiger’s last year’s merchandise at 70% below what Tommy Hilfiger is selling it at. So we saw an opportunity to organize a trade show, and organize some of those exhibiting companies. We actually not really as a business, but just as more of a means to an end. We ended up starting the off price specialist show. It was held in three floors of the Debbie Reynolds Casino Hotel and Movie Museum. Debbie performed nightly by the way. And so it was really again, you know, a means to an end. And that was in 1993, and we saw the opportunity that we were actually able to, you know, grow that business and actually get out of the apparel business.
We were doing four shows a year. We had nearly 500 exhibiting companies when we sold it to a company that’s based in London. That was a big conglomerate for Business 2 Business media assets. So, you know, a lot of our clients would do 70 to even 90 percent of their annual business at this event. You know really it kind of shows the power of very hardcore order writing trade show. You know, we launched a magazine as well for the off price of apparel industry, and I think we really helped elevate that industry kind of out of what, you know, the jobbers were always kind of considered kind of backroom, you know, businessmen and you know kind of somewhat of a shady industry. So there’s a little bit of parallels to what I’m doing now, but you know, it was absolutely a fascinating space. And I ran the company on a management contract for another two years after they acquired us. Then I moved out to Las Vegas.
You know when I moved to Vegas I started a couple of different businesses, but one in particular was a trade show for the specialty tea industry. And I honestly, I didn’t drink any tea at the time. I had a friend who’s wife had asked me if there was a trade show in this market, and it really just kind of stuck in my head so I started looking at it, and I saw that there was all these tea companies that were starting to emerge in the market that, you know, exhibited at a coffee show or a restaurant show but didn’t really have a marketplace of their own. So we started an event and it was really, you know, not my primary business I was running at the time but I really saw this opportunity and then I moved all my focus into that business which was World Tea Media.
And you know over the next ten years, you know, we had created the World Tea Expo which was the largest trade show for the Tea in world at one point. It was three times recognized as one of the fastest 50 growing events in North America. We also created the World Tea News which is an online publication, you know, kind of comparable to what we do with Marijuana Business Daily. We created the World Tea Academy which was an online training program for tea sommeliers and tea professionals. And the North American Tea Championship which was absolutely probably the most fun thing we did from a standpoint because we created our own proprietary kind of Parker Style wine rating system for tea to evaluate the best teas in the market. And basically with that competition we would have people from all over the country and at one point all over the world would send us the absolute best teas they ever had or ever made. So whenever the competition was done we would have this huge surplus of incredible tea leftover. So that’s why I like that one the most.
Matthew: You know there’s a lot of people like me out there and you mentioned that you really weren’t into tea until you got in that industry. You know I’m still in the stone age here drinking Lipton tea out of bags, and I know that there’s loose leaf tea is better but I really don’t know what I don’t know, and I think a lot of people are in the same boat. Is there any suggestions on what to get started with tea?
George: Sure I have to laugh a little bit. I get that question a lot. And you know, I even have people who come up to me and are just like compelled to tell me what teas they drink. And they’re like hey I drink Smooth Move, and then I have to explain to them that that’s actually a laxative in their tea. But honestly the thing that’s fascinating to me is there’s so many parallels between tea and marijuana. Yes they’re both plants, they’re both green and everything else. But actually one of the things I uncovered when I was coming forward with Anne Holland Ventures and Marijuana Business Media. Actually both tea and marijuana were both attributed to being discovered by Emperor Shennong who lived 5000 years ago in China and he is considered the father of modern herbal medicine.
Each of them has very unique biochemical components in them with cannabinoids and for tea it’s L-theanine and certain types of catechins and flavonoids that are really unique to that plant. And they both have a profound effect on your brain function. They cross the brain, the blood/brain barrier. Obviously there’s a little bit different impact of the effect to the brain for tea and marijuana, but you know you could argue that actually it’s just a different modality for effecting brain function. With tea the L-theanine that’s unique to tea actually has been clinically shown and I’ve seen these great brain maps of people that actually drink tea and it shows how it stimulates alpha wave activity in the brain which actually creates calmness and a relaxing state. And then coupled with the caffeine creates this calm state of alertness which is why Buddhist monks have used tea to meditate for a millennia.
But getting back to your question about drinking Lipton versus whole leaf tea. It’s kind of funny I mean this is almost like comparable to like the brick weed or the ditch weed that we all smoked decades ago. And I don’t want to say the Lipton’s ditch week, that would probably have Lipton’s attorneys calling me by the end of the week. But the importance really of creating a premium product, and you look at, you know, premium products. You know, look at the specialty coffee industry. You can look at the California wine industry where there was an investment into the quality of the product and offering a premium experience. And people are going to pay premium price. I mean Starbucks is the company that everybody wants to use as like Wal-Mart. You know I want to be the Wal-Mart of this or I want to be the Starbucks of that. You know, they’re successful because they’ve created this premium experience for people.
And I think the same can be said about, you know, marijuana and you look at the evolution of the product quality available to the consumers both medically and recreationally. You’ve created this connoisseur element to the industry and the same with tea, same with wine, same with coffee in those specialty markets. That’s really where I think that it’s kind of exciting to kind of see those parallels in those markets. But anyways really back to your question. Sorry.
You know I have my own personal favorites. I really like Japanese steamed green teas, you know, Kukicha, stuff that most people would never have heard of. A lot of times people will associate brands instead of actually products. It’s really about kind of exploring yourself a little bit and trying different teas. Time and temperature are going to affect the quality of the brew the same way as, you know, however you would consume a marijuana product. You know, if it was a vape pen versus and edible versus, you know, smoking a flower. But, you know, it really comes down to is just try it. Do you remember the Cajun chef that used to be on PBS years ago?
George: Yeah, he used to say, he’s like people would ask me what type of wine to drink with my chicken and I’d say any damn type you like. I always loved that guy. It really is about going out and exploring what you and your taste buds are going to enjoy the most. But there is a huge benefit to drinking loose tea. At the end it’s a higher quality product. It’s actually more cost effective for you.
Matthew: Now how is the Marijuana Business Conference different than say the tea or the clothing conference?
George: Sure. We didn’t have a big educational program around the clothing conference. I actually did launch another event called the Healthy Beverage Expo where, you know, education was really importing. Obviously communicating innovations in science, technology and packaging to deliver better products. You know the same thing with tea. There’s a tremendous amount of science and research. There’s also a tremendous amount of marketing, you know, data and everything else. But you know, as you know, I joined the Marijuana Business Team just a little bit less than a year ago, and this was actually the first time I’ve had a job since I’ve been in college. I’ve actually owned my own businesses before this.
Really for me, you know, for this opportunity, you know, what really really attracted me and this is so core to what I’ve done with my past businesses is just the exceptional journalistic integrity of the company as a whole, but also the very high level of curation of the conference programs. This really isn’t the norm but the exception. I mean there’s a lot of, and I’m not being specific to the marijuana industry, there’s a lot of event organizers and conference programs, and they don’t really understand how to develop a good and effective conference program and I loved what they were doing, and I really enjoy being a part of the team and helping to continue to grow and elevate that.
Chris Walsh is our managing editor. I mean he’s just an amazing business journalist, you know, for our conference program and he highly vets all our speakers, curates all the sessions, you know, has several phone calls with the panelists or the speakers, you know, before the show, reviews all the PowerPoint presentations and really makes sure that we’re speaking to the topic that we’re communicating to the attendees. And most importantly is we don’t allow the outside influence of many owners, board members, exhibitors, you know, advertisers determine what topic and who speaks. You know, this industry like every other one, you know, there’s a lot of opinionated people who might not always agree that a speaker we put on stage is the best speaker, but you know, it’s the best speaker that we felt that could speak on that at the time.
You know, there’s also so many new people coming in the market that we are always going to continue to make efforts to try to bring those new ideas into the dialog that we really get to facilitate. We’re not the ones making the conversation, we’re facilitating it. And yes, we want to be able to bring in those new ideas, those new speakers. We still want to balance out with, you know, some of the industry stalwarts that we have speaking at our show. And so I think that, you know from a standpoint of what makes our conference different is just that, you know, we’re approaching this strictly from an approach of saying that this is content, this is journalistic content, and we are going to make it, you know, create it with the highest integrity possible. And there will not be any type of pay for play type of opportunities.
Matthew: Right so the integrity’s there, but then how do you dial in what people actually want to hear more about?
George: Sure, you know, there’s a couple of different ways to approach that. In organized conference there’s a push method and there’s the pull method. I mean, basically we can kind of say hey we’re going to push out and tell everybody what they need to know because they might not know what they need to know at this point. Or we might pull the content where we really, you know, analyze data from the industry, the community surveys, you know, educational advisory boards and everything else. I think we really kind of have a nice balance. I think any show and industry that starts up, it tends to be heavy on the push side of content creation. And as it evolves it definitely becomes more pull and more community driven, you know, content.
So I think we have a nice balance of that, and the way that we have that nice balance is the fact that we’ve got a team of journalists. We brought on several new people onto our team last fall. You know, one of our editors, you know, is from Bloomberg and Wall Street Journal. You know Tony Dreibus. We’ve got John Schroyer out of the Denver area that’s written in local beats and throughout the Denver area that’s really an exceptional journalist as well and then Chris. And then, you know, even that I mean the owners of the company and the founders of the company Cassandra Farrington and Anne Holland. I mean they’re both exceptional, you know, journalist in their own right too to kind of support the team.
So I think, you know, really having our editorial team’s ear to the ground, they’re constantly having conversations with people in the industry. What is the challenges that they’re facing? What are the successes they had? And really being able to, you know, kind of have that really kind of unique knowledge I don’t think that a lot of other organizations have of really having this many conversations with the community on a regular basis allows us to really have some great input to pull content. And then as I said before, you know, we do kind of internally create the topics that we want to create, and then build the speaker line up around those. So we do have a balance of that push and that pull.
Matthew: You mentioned Anne Holland there, and I just want to give listeners a little context about her. She is a business internet marketing Jedi for sure.
George: Jedi, I like that.
Matthew: I’ve followed her work from Marketing Sherpa all the way to Which Test Won. I’ve learned so much from her. And I think people may not realize because she’s kind of behind the scenes, but she’s really a brilliant woman, and I follow her work closely.
George: Yeah I agree with you. I mean I’ve learned a tremendous amount from her as well. You know, she serves a lot of different roles within the company, and I think, you know as everybody knows, when you start a new company and kind of do things there’s a lot of kind of everybody’s kind of doing a little bit of everything. But from a marketing standpoint, I mean, she’s brilliant. She literally wrote the book and she really has kind of created the framework for us to be able to build the audience that we have and the followers and the listeners and the readers over the years.
Matthew: So let’s figure out what year is the conference in right now and what was it like for the first couple years? I went to Vegas in November just a few months back and it was great and booming and there was tons of people, but I think the first couple years it wasn’t quite like that. It was much smaller correct?
George: Absolutely. You know it’s kind of hard to believe. I mean this is our fourth year, and certainly one of the things that we tout in our marketing is that we’re the oldest national event for the industry because we have been around for five years, or moving into our fourth year. But the conference and expo was originally launched in Denver in 2012, you know, it was held in a Masonic lodge in Downtown Denver. Several hundred people came, there was a lot of excitement. And I think that, you know, that’s kind of that foundation for creating, you know, the bigger picture event and having that kind of yeah core group of people that were there at the first year.
So from there the event the second year in 2013 moved off to Seattle. It was held at the Emerald Downs Race Track. They ended up selling out that conference with I think a total attendance of around 720 people. It was wall to wall. The fire marshal was there making sure that they didn’t go over capacity. And you know again it was definitely a nontraditional venue that they had to go into because of the stigma of, you know, having a marijuana event and what that means to different people and the perceived value, you know, of the business to a venue operator. So fortunately we were able to get the show moved to Las Vegas for 2014 that you were at. You know it’s the trade show capital of world for a reason. We have great entertainment options, you know, unprecedented convention space, hotel rooms and everything else to really support that type of draw to Las Vegas. You know you get cheap hotel rooms. I mean you’re not going to see rooms at $69-$79, quality rooms like you would in Vegas in the San Francisco, Chicago, and New York. You know, there’s always going to be that price disparity.
Matthew: Right so you mentioned Chicago, and the next expo is going to be in Chicago in May. Is there any estimates on how much that will grow from the Vegas event?
George: Sure. Well and I just sent out an email this week kind of to the community talking about this. And you know we don’t use slang terms in our publication as a professional business magazine and certainly in print, but we’ll make an exception for this interview is that, you know, we’ve really kind of broken things down into pot years in our business. You know, the pace of this industry is so fast that you kind of have to look at dog years, you know, being 7 dog years to 1 year. I mean it’s probably somewhere in the range of 4 to 6 pot years in a calendar year of how quickly this business is moving. And this is really why we’ve moved to having a second national annual event is because the amount of investors that are coming into this market, the amount of new companies that are being launched, the amount of existing companies that have gotten funding and are going to market with a stronger, you know, go to market strategy, and the number of new licensor winners.
You know, Illinois just obviously released its licensee winners and other markets are coming online. So this is really why we wanted to move the two events. The market has changed so much in six months that you can’t wait a year to come to a big annual event. This is what really kind of catalyzes bringing the community together, driving innovation, driving ideas, getting products to the marketplace, you know facilitating the business deals that are done at events. And it’s so important to the industry as a catalyst. So we projected that we were going to have 1500 people come to the Las Vegas show. As you know we had way over that. It was about 3200 people plus that were at the Las Vegas show. And that certainly I think is driven by the growth in the market.
For the event that we’re doing in Chicago we’re projecting to have 2000 attendees and in that same context we are making our projections with I think the journalistic integrity the organization is founded on of not saying that we’re going to have 50-60 thousand people and, you know, it ends up being 1000 people . So we want to make sure there’s truth in our advertising.
Matthew: So you’re having it right there on South Michigan Ave by the lake in Chicago in May. That’s a good time to be in Chicago.
George: Yeah it is. And you know, it’s going to be a great event. You know really kind of having the background that we had in Vegas. I mean you know, it’s kind of unparallel, but you know this is really an amazing venue. You know Chicago is obviously very centrally located in the United States really to get the people that are, you know, developing their businesses in the New England states, Florida, Missouri that are on the cusp of coming into the industry. The Illinois license holders have just been awarded. But the destination that we’re going to be at, the Chicago Hilton, I’m sorry, the Hilton Chicago. There’s a number of Hilton properties through Chicago, but this is the Hilton property of Chicago. It is exceptionally historic and architecturally unique, but every president since I think going back at least 150 years has stayed at this hotel property. So, you know, if this is where presidents of the United States come and stay when they’re in Chicago, I feel it’s an appropriate venue for the future emerging leaders of the marijuana industry to stay at.
Matthew: And just to make a plug as a Chicago native. Buddy Guys is pretty close to that Hilton in the South Loop there, and that is some of the best live blues music you could ever hear in your life. So switching gears back to the conference. Were there any panels or speakers that stood out at the last conference?
George: Yeah. You know Ben Cohen for sure. And this last show we really wanted to set the bar high and bring in somebody with a really big name from outside the industry. I think that the industry’s evolution, we need to, you know, start seeing that type of star power. We are seeing it in other areas of the industry. You’ve seen Snoop Dogg is investing in raising capital. Other people from PayPal are investing big into some cannabis ventures. But no, Ben Cohen was phenomenal. He really nailed his presentation.
And his message really resonated very strongly with our audience. You know he’s been a very passionate, you know, entrepreneur. He’s very very much for social change and you know really kind of wrote the book on corporate social responsibility. I think that that’s something that many of our audience and attendee members really are very passionate about. They’re creating a business based on a medical need by patients. And so they’re trying to do, you know, a lot of the foundation of this industry based on people creating opportunities to help other people. So Ben’s message was fantastic. You know it’s ironic, you know, it’s usually when you have a big trade show and a conference, it’s usually you don’t get to enjoy your own part. So I was able to kind of peak into a few session, but by no means, you know, was I able to sit and listen to every single one.
Patrick Basham from the Democracy institute really did a phenomenal job. We had a session talking about the impending invasion from Big Pharma, Tobacco and Alcohol. You know that’s I think always on people’s minds, and I thought he gave some really really powerful insights into it. And you know, the content that I love is really bringing together thought leaders to really kind of, you know, kind of decode some of the myths and the facts of the industry. The final closing session that, you know, had really powerful industry leaders like Tripp Keber and Andrew D’Angelo and Meg Sanders and met Rob Campia from the Marijuana Policy Project. You know it was great to listen to them kind of have this debate about when do they see the end of federal prohibition you know coming to its term and getting some really powerful ideas. They have their different opinions, but you know at the end of the day to have those types of people up there talking about and saying this is in sight. It’s three years, it’s four years, it’s five years out that we are going to finally have a end to federal prohibition and a full national legal, recreational and medical market.
Matthew: And just to clarify. Ben Cohen is the cofounder of Ben and Jerry’s ice cream, and he was really inspiring. I didn’t really fully understand their philosophy. I knew they were into social change, but he talked about how he considered himself being in business to help different people in their Ben and Jerry’s ecosystem. For example he was thinking of making a profit, not to make a profit so much for shareholders as to keep people employed in Central America who were getting his cacao or his chocolate to him. So he had all these kinds of ideas that were I would call capitalism plus, like yes very capitalistic, but he had a reason behind what he was doing that were kind of his passion. And he had just a fantastic talk I thought.
George: Yeah and you know you hear about the shareholder, and it’s really about the stakeholder. And I really believe that in a business model. I mean the tea industry, my previous life to this, I mean you know is in a business that is highly profitable. I mean there’s so many people in that industry that are really driven by the passion of I’ve experienced this amazing thing, this tea isn’t normally available in the United States. I mean tea is the second most drank beverage in the world next to water. People are kind of surprised by that, but 2/3 of the world’s population live throughout India and Asia and in those countries where drinking tea is part of their culture, and it’s in every other culture Europe, Africa, Canada, just not so much Central and South America and the US. But you know it’s really that passion that drives up business.
From that standpoint previous business World Tea Media, I mean, it was always I think was with the onset of saying how can we help companies be successful. And that, you know, by us helping companies be successful as a B2B media platform, you know, we get to be successful. And it’s really an amazing business to be in, and that’s where I really kind of, you know, really connect with Ben on this is, you know, making sure I mean that, you know, this isn’t about our company or profits. It’s about are the attendees going to get tools that they need at our event that’s going to help their business grow. If they do and they’re successful, they’re going to be great customers of ours. Are exhibitors meeting with the right people to sell their products or services and getting a positive return on investment through that? Are the readers of our magazines getting insights and tools that they can put to work in their business and the advertisers, you know, getting good reach into the market that way.
So yeah you have to look at a business very holistically as terms of stakeholders and you know the employees of the business. And you know are they finding, getting a meaningful experience and the better that they’re able to contribute to our business, again we can be better at serving the market. It’s all cyclical and I love the fact that Ben looks at this as really as a global, you know, kind of picture. And some personal conversations with him, I mean, I could tell that you know, they did sell their business at one point and the business I think modality changed significantly and was much more corporately driven and you could tell. It was a lot of I think you know kind of angst and pain in his eyes when he had to talk about it that way because he was very mission driven.
Matthew: Yes I believe Unilever acquired Ben and Jerry’s sometime ago.
George: Speaking of Lipton tea they own Lipton too.
Matthew: Okay, okay, but the two are still fun in Watertown, Vermont I believe. It is still very, very fun place to go visit if you get the chance. Now for somebody that is considering purchasing a spot on the expo floor in hopes of growing their business, what advice can you offer them to help them put the best foot forward?
George: That’s really the art of the trade show. There’s so many simple things that companies can do really to make the most out of their marketing spend, you know, looking at the return on investment. You know trade shows are very well documented as being the most cost effective medium for generating leads for your business for sales leads. And you know when you look at I mean you know it’s your ability to meet with a large group of people very quickly in a face-to-face opportunity because you know that that’s so much more valuable than being on the phone with somebody and be able to qualify those prospects in a single location as opposed to, you know, making scores of sales trips and having a field of sales people out there or cold calling them which is going to produce marginal results.
So you know trade shows in my opinion, I mean, I’ve always been a big fan of them because they drive commerce. They catalyze markets. On the flip side of that it’s actually pretty shameful. The Center for Exhibition Industry Research actually estimates that 80% of trade show leads are never followed up on. And this is the most important part of any company’s investment in the event. So you know my first tip is always, you know, is to ask questions first when you’re at the trade show and having a good plan and really realize that you have a finite amount of time that you are going to have in that booth meeting with attendees.
So you know, you don’t want to spend a half an hour talking with somebody that’s just looking to gather information when, you know, ten people could have walked by that might be in the early buying stage or you know with money in hand ready to buy your product or service. So ask some questions and find out what stage they are in the buying process. You know are there other people in that company that are going to need to be involved in the decision making process so that they, you know, get to the decision makers quickly. And find out, you know, what are the key obstacles for them engaging with a product and service. So really that qualification step is really important. You know if somebody’s not qualified, you don’t have to say hey get out of my booth. You know you could say listen, you know, I’ve got an appointment in a few minutes, I would love to follow up with you with more information, but if you give me your card I will follow up with you afterwards. And spend two minutes with that person instead of twenty. And spend twenty minutes with the people that are going to be potential leads.
And then once you qualify those leads is certainly taking copious notes. You know, rent a lead retrieval system, and you know add comments to the record. You know if you can remember hey the guy was a big fan of dog sweaters, you know, so when you follow up with him you can tell him that, but that’s kind of salesmanship 101. But when you really think about it is making sure you have that plan before you get to the show of how are you going to qualify the leads? How are you going to capture that information, and who and how and when are you going to follow up with them after the show. And if I walk to a show and met with 30 companies that were selling a product or service and I went to that show to find more information about, and I got two follow-ups within 24 hours of being back from the show, those 2 companies are going to be on the top of my list. And I think that’s just, you know, anybody would probably agree with that.
So making sure you follow up with them. You have a plan. You know what you want to send them and say to them, make it personal so that they know you remember them and that you generally care about them. And there’s tons of other little things that people can do at trade shows to really optimize that opportunity. You know, they really discourage you, at least some of the trade show trainers that are out there, say don’t ever put your table at the front edge of your booth. You know make your space inviting so that people can walk into the space. Don’t put yourself behind a counter to them. But it’s a deep topic and if anybody ever bumps into me in the market, in the community, at another event, at our event and they want any tips and tricks, I will spend as much time as they want with them. I love making sure that people get the most value out of it.
And it’s not just at our event. You know, I want to make sure people get value out of events period because, you know, if somebody goes and does an event that they don’t do well at, they’re going to devalue the proposition of doing events elsewhere.
Matthew: Okay so let’s take an aerial snapshot of the expo floor. It’s a pretty large space that was there at the Rio, and I went around it several times. So I saw all the, you know, exhibitors, but in your mind how do you think about the exhibition spaces, some real estate more valuable than others, what’s the park avenue?
George: Well you know location location location. You know I think it’s always, I think it’s human nature. I mean I think anybody that’s looking at a show floor, they want to be as close to that front door, as close to that main isle as they possibly can. But you need to look at a number of different factors. And you know first of all is recognizing that you’re not paying for real estate, you’re paying for access and the access to the attendees. So you know depending on the attendee density of a show and that’s a measure that we use in the trade show industry, the number of attendees per exhibiting company. And we always have maintained, you know, close to 20 to 25 attendee density, 25 to 1 attendee density. And then that’s strong. I think a good show is anywhere from 10 to 15 is really good. When you start dipping below 10 you kind of get that feeling that there’s a lot of room in the trade show isles for you to move around.
If you have a very highly dense show where you have a lot of attendees coming, being in the front of the show might not be the best space because there’s this kind of natural push to kind of surge in the front door. So a lot of that kind of initial tidal wave of attendees coming on a show floor kind of go past that first booth and then when they’re coming out they don’t see it because they have their back to it. So it’s not so much about real estate. I think you know, if you want to kind of drill into that, don’t necessarily look at just where the front isle is. Look where the bathrooms are. Everybody’s going to have to go at some point. And you know, where the food area is. You know, are there other attracters such as a press room or show management office that’s going to draw people over into that area, you know, there could be equally as good space. Or you know, if there’s a big company that you know is always busy at every single trade show, get a booth next to them. It’s open season at trade shows and everybody has equal access to the attendees coming to the show.
And I think what companies need to realize though, going back to that, you know access versus real estate, is when they evaluate a show to go to, I mean, you know you got to say, you know, you can go to a show and pay $1,000 for a booth and maybe walk away with 10 quality leads, or you might end up spending $5,000 for a booth in another show and walk away with 100. Clearly you got to look at what is that cost per lead for my business. And this really gets into the return on investment for events. And obviously return on investment, you’re looking at return on your investment. And you know, this is one of the things that’s really also very core to me is, you know, making sure that the experience for the exhibitor and the attendee is at a very, very high level. You know the old way of doing trade shows, I shouldn’t say the old way because most trade shows are still run this way, is that they will sell somebody a booth and once they’re on board they have tons of hidden costs, most prominent being drayage or material handling. And that’s a fee that an exhibitor would pay to have their freight moved into a show flow. And the way that that’s set up is the organizer would hire a general contractor and the general contractor would kind of have unbridled egregious ability to charge people for moving their freight from the dock to their booth and back again. And I might be $500 or $2,000 depending on how much freight they have.
You know so this is something that exhibitors have complained about for decades and very few show organizers you know choose to listen. But you know it’s important, you know, making sure that experience is there. And at our events I change this for the fall event and will be the way moving forward. You know we package that into the booth price. So you basically have a host of freight package. So if you don’t, you know, you bring in a single box or you bring in four crates of really heavy, there’s no extra charge to you and there’s not that surprise factor. It’s so punitive on so many levels. I mean you’re creating a ton of non-value added workflow. So now the contractor would have to set up a billing department on the show floor. Usually the second morning of the show, they have an invoice in that exhibitor’s booth saying hey by the way you owe us $2,000 for moving your stuff in and you’re not going to be allowed to move out unless you pay this which isn’t going to make very many happy customers. And it just creates a lot of conflict in the show.
So there’s things like that that you know when you look at what is the cost of doing a show, the general rule of thumb has always been that it’s 20% of your overall cost for doing the show is the booth. And then when you add in the staff, the time, the travel, your display, meals and entertainment, everything else. I mean it’s usually about a five time multiple of what it costs you for the booth at a show. And what we like to do and really where I feel that we can offer a competitive advantage is that you’re not going to have the surprise costs at our show. You’re going to get to the show. Yes you’re going to have still your staff time and travel, but I don’t like to have exhibitors or a customer come and be surprised and all of a sudden be upset because they’re having all these nickel and dime charges.
Matthew: Great point. And circling back to you know, how you can put the best foot forward. I noticed that some of the exhibitors can really state their value proposition well in one sentence. You say oh what do you do, and they say it very clearly and so you can understand and make that connection, and everybody on their team has that. And some other exhibitors don’t really have that quite as polished where they say what they’re doing so you can understand it just instantly and what the benefit is for a prospective client. Just that simple thing, it made my understanding of what they’re doing much better in talking with people.
George: Yeah and I agree. And that gets into you know making sure your staff’s trained and that you guys have a consistent message and kind of elevator pitch and everything else. Again when you’re at a trade show it’s also, it tends to be very long days, you know. Make sure you have enough people out there so that whosever staffing your booth, you can kind of rotate some breaks in there. You need to kind of take a mental holiday from standing in a booth. You know, I’m sure you’ve seen it before and everybody else has. You know, you walk by a booth and a guy is sitting down reading a newspaper or you can tell that he’s just frazzled. He’s spent for the day or she it, and you know so you want to make sure whosever in that booth, you know, is fresh, you have breaks scheduled and for your staff and everything else.
But yeah going back to that is there’s a lot of businesses that are still trying to figure out where they’re going to fit in best in this market. So you know, they might be kind of a little bit all over the place. That’s I think inherent for a young industry like this. But you know, you should be able to, you know, walk up, look in their booth and have a very clear understanding of what that company does. I mean I think it goes leaps and bounds of them being able to more effectively meet with the right buyers that are coming to their show too.
Matthew: George in closing, how can listeners learn more about the marijuana business conference and expo?
George: Well we certainly invite them to come to our website, but and more importantly come to our show. So we have a number of brands in our portfolio, you know, really built around that marijuana business media family. So we have our Marijuana Business Daily and you can go to www.mzbizdaily.com and sign up for your free subscription. We have Marijuana Business Magazine www.mjbizmagazine.com. We obviously publish the Marijuana Business Fact Book which you can find at www.mjbizfactbook.com. And the conference is www.mjbizconference.com and as a special offer to the listeners of your program we set up a discount code for our spring show. So if they enter in CannaInsider50 when they register for our event, they’ll save an additional $50.
Matthew: Awesome, awesome and everybody just a reminder Canna has two N’s in it. That will be helpful when trying to put in a coupon code. Thank you for that George.
George: Absolutely, absolutely.
Matthew: George thanks for being on CannaInsider today. We really appreciate it.
George: Hey I love the opportunity Matthew and continued success to you.
Matthew: Thank you. You too. 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 at cannainsider.com. We would love to hear from you.
Dr. Michelle Sexton helps us understand how cannabis interacts with the human body’s endocannabinoid system. She also describes the problems and shortfalls with modern day cannabis testing.
[1:47] – Dr. Sexton explains how she got into the field of medicine
[4:44] – Dr. Sexton talks about the endocannabinoid system
[6:02] – What symptoms does CBD help with and how does it react with the body
[10:27] – Dr. Sexton talks about less well known cannabinoids
[12:02] – Dr. Sexton explains her involvement in creating testing guidelines in Washington State
[14:06] – Dr. Sexton talks about the cannabis testing process in Washington
[18:34] – Dr. Sexton discusses cannabis testing procedure
[22:01] – Dr. Sexton talks about an article she wrote on expectant and nursing mothers
[25:56] – The benefits of home birth versus hospital birth
[27:45] – Dr. Sexton explains a spiritual component to the plant
[31:30] – Dr. Michelle Sexton’s contact info
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 Dr. Michelle Sexton. Dr. Sexton is a naturopathic doctor, herbalist and formally a midwife currently in private practice in San Diego. She began her formal study of phytochemicals with a degree in horticulture, and has specialized in the phytochemical analysis of botanical medicines. She owns and operates PhytaLab, a cannabis analysis laboratory and served as an editor and advisor on the American Herbal Pharmacopoeia Cannabis Monograph. She has been a consultant to the Washington State Liquor Control Board on the implementation of I 502. Welcome to CannaInsider Michelle.
Michelle: Hi Matt. Thank you for having me today.
Matthew: Sure. To give listeners a sense of geography can you tell us where you are in the world?
Michelle: Well I am a half a mile from the coast in San Diego, California.
Matthew: Oh great. How’s the weather there today, nice?
Michelle: Oh beautiful. In the mid 60s, sunny and the surf is up.
Matthew: Oh good. You have a really impressive resume. Can you tell listeners how you got into this field and what you’re doing day to day now at PhytaLab?
Michelle: Well I have sort of a long and eclectic background. I became interested in natural health when I was actually still a teenager. I was 17 years old, and started reading about herbs and herbal medicine and just practicing that mainly on myself and encouraging other people to take on a position of preventive practices by healthy eating and healthy living and using natural products for enhancing health. And it really was a passion for me. As I grew older, had some children and became very active in the women’s health movement surrounding natural childbirth. I became a midwife and a certified herbalist and was really extending my practice out to the families I was serving beyond just midwifery and women’s health, but often they would… We were just sort of a support group for one another.
This was in West Texas. There was not, you know, a lot of doctors there or alternative health options for us so we were sort of our own support group. And eventually thought that what I would do was have an herb farm and grow medicinal plants, although I was very curious about what made plants medicine. I had no, absolutely no concept of chemistry and decided to go back to school at age 40 to get a horticulture degree, but I didn’t realize that I would wind up in something very different which was research and studying phytochemistry or the chemistry of plants, the actual compounds in the plants and the human/plant relationship, how those compounds interact with the human body. I wanted to extend what I could do so I ended up going to naturopathic medical school at Bastyr University in Seattle, Washington. And got involved in research at the University of Washington in a laboratory studying the endogenous cannabinoid signally system and its role in neurodegenerative and neuroinflammatory disease. And that’s really sparked my interests in cannabis as a medicine.
Matthew: Now you’re really familiar with the endocannabinoid system and it’s something that many listeners may have heard of but they don’t really understand exactly what it is and how it operates and how our body interacts with the compounds in the plant. Can you intro the endocannabinoid system to us and how we should be thinking about it?
Michelle: Well I think a good way to think about the endogenous cannabinoid signaling system or what we call in short the endocannabinoid system is that it’s basically a complete biochemical system in the body. And what this means is that there are protein receptors. Our body synthesizes compounds so there are enzymes creating these compounds to bond to the receptors, and there are signal transductions that when this binding happens there are intracellular events that eventually lead to physiologic adaptations. And then there are enzymes that then break these compounds back down to their original substrates. So that’s the definition of a complete biochemical system in the body.
Matthew: And CBD is a cannabinoid that’s been getting a lot of attention lately and obviously there’s entourage effect. We don’t want to look at CBD by itself, but what kind of symptoms can CBD help and what’s happening in the body when CBD is introduced?
Michelle: Well cannabidiol is a really interesting compound because unlike THC that has a really strong binding affinity for the cannabinoid one receptor. The affinity for cannabidiol for the specific cannabinoid receptors that we know of it’s not a very strong affinity. But it has been found to bind to some other receptors that are considered to be outside of the cannabinoid system such as a serotonin receptor. Serotonin is another neurotransmitter. The endocannabinoids are considered to be neurotransmitters of a type when in the central nervous system. And what’s been shown, you know, basic science, so I’m talking about cell culture models and then again in animal models many of these actions have been shown is that cannabidiol has a neuroprotective potential because it has anti-inflammatory and antioxidant properties and these are really the two most important things for protection of all the tissues in our body.
Cannabidiol hasn’t been shown to have one specific action. It may be acting at various receptors in the body. It may be acting nonspecifically. It may be acting even down to the level of our DNA by turning specific genes on or off. So it has a very broad range of effects which may mean that it has a broad potential as a disease modifying therapy.
Matthew: You mentioned inflammation there. Have you seen any kind of positive results for people with conditions of inflammation or autoimmune diseases firsthand?
Michelle: Well specifically in gut inflammation. So listeners might be familiar with irritable bowel disease or Crohn’s disease. They all sort of are lumped into IBS or irritable bowel syndromes. There’s been many many reports and a little bit of scientific research in humans on the ability of cannabis in general and also cannabidiol to have effects at calming that inflammation and maybe even reversing what might be causing it. One of the most poignant examples, I think, has been highlighted in the media with the children who have intractable epilepsies.
Matthew: Yes, yes definitely seen that.
Michelle: So what’s happening in epilepsy when you have this constant firing of neurons that can’t be turned off, it’s a huge amount of inflammation and radical oxygen species generation which is neurotoxic. And cannabidiol by its anti-inflammatory action or even slowing of seizure appears to be having some profound effects on these kids with regard to their cognition and motor skills and general development.
Matthew: Yeah that’s been amazing to watch the progress of Charlotte’s Web and some of these other CBD rich strains and what it can do for kids with seizures. It’s remarkable.
Michelle: It really is and it’s unfortunate that, you know, it’s not more widely available or there’s not a lot of quality control of some of the product being sold to these parents. That the doctors and neurologists are uninformed or hesitant to be supportive of these families using a botanical medicine.
Matthew: Now we talk a lot about THC and now CBD on the show. But is there any other cannabinoids in the plant that you feel like should be talked about more that don’t have their medicinal benefit highlighted as much as they should?
Michelle: Well you know it might still be a little bit early. Most of what we know about the other cannabinoids, there’s the precursor to most of the cannabinoids is cannabigerol or cannabigerolic acid is the native compound in the plant. There’s cannabichromene is another one. Cannabinol is a breakdown product of THC that’s getting a lot of attention. Still most of what we know, you know, comes from cell culture data, maybe a little bit of animal data is popping up. And there’s this inclination to take that literature and apply it directly to humans. And we know from a lot of pharmacologic research, you know, like in drug development of new synthetic compounds, you may have wildly successful results in an animal model and absolutely nothing or even negative effects in humans. So I think there’s a lot of potential, but I think that we still need more data in humans. I think we need to translate some of that into humans before we start really making that leap.
Matthew: Now switching gears to lab testing, how are you involved in creating the testing guidelines for cannabis in Washington State?
Michelle: Well I first opened my laboratory in 2010 in Washington. That was when I was finishing my post-doctoral fellowship at the University of Washington. And like I said the experience of study the pharmacology really peaked my interest in the growing medical use and particularly what was the composition and the potency of what people were using. And there were only a couple of labs in the US at that time, and it seemed like what I wanted to study I wouldn’t really be able to do at a basic institution because of federal restrictions.
So I thought a laboratory, a private laboratory would be a good way to go about doing the research. So I opened the laboratory and started doing testing. When Initiative 502 passed in Washington State I was contacted early on by the Liquor Control Board for general guidance. I put them in contact with other people and the American Herbal Pharmacopoeia we were in the process of writing a cannabis monograph at that time. And Washington ended up adopting that monograph as guidance in rule for quality control of cannabis in Washington State. And then a little while down the road they contacted me and asked me to write the laboratory certification checklist for labs that would be providing the quality control of the retail product in Washington. So I basically took, the World Health Organization has a document called Good Laboratory Practice. And I took that document and adapted it as a checklist for a certification process in Washington State.
Matthew: Now you feel like the cannabis testing process in Washington State is less than perfect I understand. What’s broken and how can it be fixed?
Michelle: Well you know this isn’t just an issue that is isolated to cannabis testing. You know there’s a lot of lack of oversight for all kinds of laboratory testing out there. Even lab assays that are marketed to doctors often are not FDA approved, and you know sometimes they’re just a sales and marketing tool honestly. And there are problems inherent to the herbal products industry and herbal product testing. I think probably one of the things that could help remedy is just more basic proficiency. So even though we have a checklist of all of these things that a laboratory has to do and how they operate, right now for cannabis testing or maybe even other botanicals, there’s no proficiency testing. So a laboratory may be performing analysis, but there’s nobody checking in to make sure that they’re giving an accurate answer. And so this is a process, you know, a lot of people are up in arms about the testing industry which I find interesting and I think it’s because it’s thought of as well this is science.
There should be nothing wrong with it, and the testing is really providing the general final approval for what goes on the market, but yet the testing proficiency isn’t really there yet. So it’s been a process. You know we did the checklist in Washington. The labs have gone through a process showing that, you know, they’re operating by a set of standards and yet there’s no oversight, there’s no enforcement. And the really important thing is that there’s not proficiency testing. And the reason that there’s not proficiency testing is a good one. It’s because the professional organizations who typically do this have been hesitant to become involved because of the schedule and status of cannabis. But that’s coming to an end, and for instance the American Oil Chemists Society is very interested in helping to design proficiency testing for the cannabis industry.
Matthew: And what are your thoughts about dispensaries or cultivators? Are they doing any kind of lab shopping, going from one lab to the next trying to, you know, get the results that they want instead of what’s there?
Michelle: I think that’s probably undoubtedly true because my PhytoLab we’ve mainly been working with licensed producers in Washington State. They’ve been shopping around a little bit more for the microbial results because the outdoor growing has, you know, challenged their ability to pass the microbial contamination limits that were set by the State of Washington. There seems to be some shopping around going for that, you know, who can get them to pass the test. I think there is, you know, there’s still this drive for these mutant plant varieties of really high THC. And so people do still want the highest THC number that they can get. And you know I hope as the market and the industry and the consumers continue to evolve and mature that this will calm down, that people will realize that maybe that high of THC isn’t what everybody wants or of the highest benefit to every and that these more balanced, you know, in the cannabinoid profile plants will become of interest and desirable to everyone.
Matthew: Now if you were to say what’s the best way to get a sample of cannabis to then have it tested, what size would that be? How many milligrams would you need and how would that need to be taken from a harvest to get it a truly representative result?
Michelle: Well we have a lot of guidance, you know, from agriculture in general. I mean we could look at crops or any field, I mean, it depends on what are the growing conditions, what is the size of your lot, but these things have all been well defined in agriculture for many, many crops. And this is what we looked to when we wrote the American Herbal Pharmacopoeia Monograph. You know, we went to those areas of expertise and tried to apply it to cannabis. In Washington State a lot is defined as five pounds.
And so typically the way that you do this is you take the entire five pound lot and you put it all in one place like you have a sterile tabletop and you mix it all together. You quarter it several times and until you end up with maybe one pound of it. You take a scoop for a random sample and ten grams of a five pound lot would be how the European Union would say to do it. And this is then ground up, homogenized and then you subsample out of that homogenized sample for all the various tests that you do.
Matthew: So you’d be crosscutting somehow or when you say quarter, so you would be kind of mixing this five pounds together so you can get those ten grams or how many grams to get a representative sample? And that’s better than what’s happening now? Is that really not happening in Washington State?
Michelle: No, that was a real failure that for some reason the Liquor Control Board didn’t want to adopt a formal sampling plan. I think that now they’re realizing that was a mistake, and you know it was all starting place, and I think this will all be revisited in the coming months. For instance, you know, one way that laboratories are trying to get business is by saying well we only need a two gram sample, for instance. So it wasn’t mandated what was the sample size that a laboratory should take. It just said up to seven grams. And I don’t even know how they came upon seven grams. I don’t remember the process, but it didn’t match our recommendation from the Pharmacopoeia.
So the problem with that is if you have a two gram sample for five pounds, that’s only .0008% of the lot and so therefore if you used 500 milligrams of that, for instance for microbiologics testing, you would only have about a 1 in 4,500 chance that you would even sample something that could be contaminated. And so this is the reason for having a bigger sample. It’s really an interest of public health and safety.
Matthew: Now you recently wrote an article on Lady Bud I believe about cannabis and expectant mothers or nursing mothers. And I wanted to kind of understand your thoughts around that. Can you kind of summarize what that article was about and how you feel about it?
Michelle: Yeah so that article, I was asked to write that by Lady Bud because I think there is a lot of interest. And there’s a real, you know, we have a real lack of safety data because it’s a difficult area to study. You can’t administer something that might be harmful to a pregnant patient. So most of what’s come out of the research is often viewed through the lens of addiction, and studying mothers who are addicts who are using cannabis for instance. And through the process of learning and my post-doc at the University of Washington, you know, I learned a lot about neuro development and the role of the cannabinoid receptor in the development of the brain. And it has a leading role literally as it’s on the leading edge of neurons as they’re travelling out to make connections.
And so, you know, while we know that THC is a really nontoxic compound, what we do know is that it binds to this cannabinoid receptor with much stronger affinity than the natural endogenous compounds. So if a baby or even a developing fetus is exposed to THC and it’s binding to these cannabinoid receptors right now it’s an unknown for us how it may affect general brain development. And so we don’t know whether it’s good or bad. It’s just an unknown, and the point I think I tried to make was that we don’t know. And so don’t assume that it’s safe, but you know really question and make your own judgment not only about, you know, the potential for your unborn baby or nursing baby to be exposed to THC, but there’s all kinds of things that we need to think about exposures to.
Matthew: What’s your personal opinion taking your scientist and doctor had off, what’s your, do you have a gut sentiment about it at all?
Michelle: Well I think I wrote that in the article as well. I personally I suffered, it was debilitating for me the amount of nausea and vomiting that I had in pregnancy. There was nothing to treat it. I was virtually incapacitated for six to eight weeks of a pregnancy. I had five pregnancies. I kept doing it, and you know what looking back now, and I remember thinking of it several time because I knew at that time that cannabis had been touted as a remedy for nausea. I had no access to it in Texas at that time.
I think that I summed up the article that to really take an approach of the potential risk versus the benefit. If a woman is suffering that badly with really not good options from conventional medicine, it could improve her quality of life and maybe, we know that also CBD, you know, has the same sort of effect on nausea and vomiting. So maybe a high CBD variety used sparingly, given orally so it has a longer effect and that kind of thing might be worth a risk/benefit analysis.
Matthew: Now you have a background as a midwife. I’d be interested to hear how you would compare a traditional hospital birth to say at home with a midwife and kind of the benefits of that because I think there’s a lot of people that have an interest but they’re not quite sure what it is and what it’s like.
Michelle: Oh wow that’s a loaded question. I don’t think the two experiences are anything alike. I think there is even research evidence showing that just the process of a mother leaving her home and going into the hospital setting is a very stressful experience. And when you undergo stress your body releases all these stress hormones and compounds, even inflammatory compounds that probably have an effect on the process itself and maybe even the baby. We know that stress in pregnancy in general isn’t good. And I think the home based experience is the natural experience to have.
I started my career as a midwife as wanting to be an advocate for the mothers, and interestingly by the time I finished my career as a midwife, I had been at home births for about ten years. I got invited to go back to a hospital birth, and I literally cried at how the new born baby was handled by the staff, how roughly and a lack of dignity for this new being in the world. So I think for people that want to be really conscious of their child and they feel that the safest place on the planet for them to give birth is in their own home, that it’s a really really good option.
Matthew: Now going back to the cannabis plant, we talked a lot about the hard science and phytochemicals and your research. But do you feel like there’s a spiritual component to the plant and plant medicine in general.
Michelle: Oh I think there’s definitely that, you know, connection with nature is how many many people define spirituality. And for myself that is true. For me any plant or just the earth in general, you know, treating it with a lot of respect and almost as a piece of humanity is an imperative. And as far as the spiritual connection with cannabis I think many people report that. That it heightens, it seems to heighten their sense, you know, just to the present moment I would say that many of the senses are heightened, the visual experience, olfactory experience, you know, touch and sounds. Everything seems to come more alive and put people in the present moment, and I think when we are brought into the present moment and we’re not thinking about the past and things that happened or what may happen in the future, that that’s when we connect to spirit.
Matthew: You know I wonder why that we evolved to have this endocannabinoid system. It seems like a lot of things in our body there’s a purpose that we evolved to have it. Do you have an theories on that? I mean is there a benefit for survival or is it for communicating with others? I mean this is total speculation, but I would be interested in your thoughts.
Michelle: Well we know that some of the earliest organisms had endocannabinoid systems. So it’s a system that has evolved, you know, as biology evolved. And we don’t know exactly or I personally, that’s not a field I’ve studied. I don’t know what role it played in those simple organisms specifically. I do know that for this endogenous system in humans today, it provides a really important feedback loop not only for neurons and neurotransmission, also for the immune system. And we know that there’s a lot of crosstalk between the immune system and the central nervous system. And we know that there’s this same role in metabolism by this system in the body. So I often describe it the way that people can often relate to it as like a thermometer, and you have a set point. Like on your oven you turn it on to 350 degrees, when it reaches 350 degrees it turns off. It doesn’t just keep getting hotter and hotter and hotter.
And so our neurons need that same thing. There’s neurotransmission and there has to be something to tell the presynaptic terminal okay I got the message, you can quit sending neurotransmitters across the synapse, and that’s what our endocannabinoid system, that’s one role that it has is to take that feedback and got it. And the same way with inflammation. This is what chronic inflammation is. Inflammation gets turned on and for some reason it goes awry and doesn’t get turned off, and the endocannabinoid system has a role in that as well.
Matthew: Fascinating. I love this subject matter. In closing Michelle how can listeners learn more about your lab and follow your work?
Michelle: Oh we have a website www.phytalab.com. We have a Facebook page. My medical practice I have a page on Facebook it’s called Uttermost Health, and I would say those are two of the best ways. I’m also the Executive Medical Research Director at the Center for the Study of Cannabis and Social Policy. And the website for that is www.cannabisandsocialpolicy.org, and what we do there we’re following the legal cannabis market in Washington State, as well as doing some cutting edge medical research and staying on top of the transitional experience of the medical part of marijuana in Washington State right now. So those would be the best ways.
Matthew: Now just for people that may not know how to spell phyto, can you just spell PhytaLabs for us?
Michelle: Yeah it’s www.phytalab.com.
Matthew: Great. Well Michelle thank you so much for being on CannaInsider today. We really appreciate it.
Michelle: Matt, thanks so much for having me. I enjoyed speaking with you.
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 at cannainsider.com. We would love to hear from you.
In this candid interview with Texas state representative David Simpson, we discuss his bill (HB 2165). This bill proposes not only making cannabis legal in Texas, but also to have no restrictions on cannabis at all. That means no dispensaries, no state regulators to oversee it, it would simply be treated like another plant like a jalepeño or a tomato. David’s Christian beliefs are part of the reason he is in favor of legalizing cannabis because “everything god made is good.”
“Most politicians know this is the right thing to do but are too scared of getting re-elected”
“We don’t need the government to be parents”
“Freedom, responsibility, and limited government”
[1:16] – Why TX shouldn’t have a regulatory body for cannabis
[4:20] – There is no need for dispensaries, treat cannabis like any other plant
[5:41] – David talks about how his Christian Values and HB 2165
[10:01] – What has the response been from other Texas representatives
[10:54] – David talks about the war on drugs
[16:35] – Would legalizing cannabis in Texas be a 10th Amendment issue
[20:00] – When will HB 2165 come to a vote
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.
Our next guest is Texas State Representative David Simpson. On March 2nd David filed a sweeping bill HB 2165 that would end marijuana prohibition in Texas. David, welcome to CannaInsider.
David: Well thank you for having me Matt. Glad to be with you.
Matthew: David can you tell us what counties in Texas you represent?
David: I represent Gregg and Upshur Counties in the Texas House.
Matthew: Okay. And you proposed to end prohibition, but you go one step further saying that Texas should not erect some regulatory body to monitor cannabis like Colorado, Washington, Oregon and Alaska are doing. Can you tell why?
David: Well I think it’s the conservative liberty lobbying approach. We don’t need a bureaucracy like the alcohol, tobacco or firearms to regulate our right to have guns for self defense or tobacco to smoke or alcohol as far as I’m concerned. All those things can be abused, but we don’t need government to regulate their possession. They should only get involved if we harm someone. And so I don’t think we need to regulate marijuana anymore than we do a vegetable like tomatoes or jalapenos or chili peppers or coffee. Some of those are benign, some of them are self-regulating if you eat too much of them. Now the coffee is a little different. It’s very addictive and it could cause severe withdraws if you try to quit.
And so I just don’t think we need a bureaucracy, and I don’t think we need a registry. What brought this on is I had some people in the district that have been greatly helped by marijuana for treatment for seizures. And there is a bill proposed to help, but it won’t help the people in my district because it’s too narrowly defined, and they need higher levels of THC to help the seizures that they’re treating. And secondly it creates more government, and I thought conservatives, you’re for less government and for more freedom than I am. And I don’t think we need a registry, and that’s what their bill proposes.
The difficulty with the registry besides, I don’t even like having to have a list for concealed handguns, is that that list for using medicinal marijuana will be (3.26 unclear) proof of breaking federal law if we have a change in federal administrations. Thankfully now they’re not prosecuting and enforcing the federal marijuana prohibition, but if you have a registry, you know, that’s a pretty big risk because you might get a change and someone who, you know, wants to, believes it’s evil and it’s so evil that we’re going to put those people in prison who even use it responsibly to treat people with cancer or seizures or PTSD.
Matthew: So for someone that’s in a state where cannabis is regulated heavily, this would just be like hey anybody can grow it, anybody could use it just like they would a tomato. There’s no dispensaries or any of this.
David: Yeah I mean it would just be like any other agricultural product. You know, it would be taxed along with coffee and tomatoes and jalapenos. Any people who grew it would pay property taxes, people who have businesses to sell it would pay the property taxes and sales taxes. But I do think it would be a great boom. We could use the hemp for paper and for rope and for oil. And we could use the marijuana for medicinal purposes. I don’t advocate smoking it, but I respect people’s liberty to do that. I mean I don’t advocate smoking tobacco. I think both are carcinogenic, but also I know people that suffer seizures if they don’t. And now in an effort to avoid being criminal they’re suffering the seizures, they’re suffering the side effects of pharmaceuticals because they don’t treat the seizures as effectively and without harm.
Matthew: Now do you feel like part of your Christian values came into play when you proposed this bill and if so how so?
David: Well certainly. First of all everything God made is good and 1Timothy 4:4 says it’s to be received with Thanksgiving. We shouldn’t harm our bodies, but there is a time for feasting. There’s a time for celebration. God made wine to make the face of man glad, Psalm 104. It says to give strong drink to those who are perishing. Paul told Timothy to use a little wine to help his stomach ailment. And then in Proverbs 23 in verse 21 it says the drunkard and the glutton will come to poverty and drowsiness will clothe the man with rags. So the scriptures condemn excessive use of alcohol, food and sleep but it doesn’t ban the activities or the substances associated with them.
And so you know I think the scripture would say use everything with moderation and responsibly, but some who perhaps can’t they should abstain. It advises rulers or leaders, you know, to abstain from it unless they forget the legislation they’re passing. So I think as a Christian I don’t usually bring my Christian principles so much to the forefront, but I think it’s important because we need to respect everyone’s liberty. And Jeremiah talks about, and he proclaimed liberty, each man to his labor, neighbor. And so it’s not only my liberty that’s important, but it’s my neighbor’s. And he may use it in a way that I don’t like or what I believe is irresponsible, but I have to respect him as a free and responsible human being. As long as he’s not harming me or my family or taking my property, the way to best influence him is to be a good model, to engage him to talk. In fact there’s another scripture, Proverbs 3 and verse 30 that says do not contend with your neighbor for no reason when he’s done you no harm. And then it talks about not using violence after that.
And so we shouldn’t employ the government to take away the freedom of someone else when we want to just enjoy our own. If we don’t like what they’re doing we should use free voluntary engagement. Ask them to go to church, invite them over for dinner. If they’re suffering from an addiction we shouldn’t send them to prison. We should wonder and try to find out why they’re trying to escape and why they’re lonely and maybe suggest some professional help. But to use force when they haven’t harmed someone, I think it’s a wrong use of the civil government. Romans 13 talks about the role of the civil government is to use a sword to punish the wrongdoer, but it’s not all wrongdoing. It’s for wrongdoing of violent acts to one’s neighbor and it talks about the second table of the law, not your relationship with God. Sure don’t want the civil government telling who and when and how to worship. But even there’s some personal, family, parental , business things that may be sins in the face of God, but they’re saying not all of those should be dealt with by the government. In fact I don’t think any of them, unless you harm your neighbor, you steal from your employees, you take your neighbor’s wife or you take their life, then the government should be involved.
And so I think the Bible has a lot to say about the proper and limited role of government. God could have made us robots and not let us be free, but he allowed us to make mistakes and thankfully he gave us forgiveness through Jesus Christ that we can serve. And I think we just need to live that out with other people.
Matthew: And what has the response been from other Texas State Representatives about this bill?
David: Well I’ve had almost complete, I mean I don’t know of anyone who hasn’t either praised me or said you have courage and acknowledged it’s the right thing to do. It’s just people here don’t always live in faith. They know it’s the right thing, but they’re concerned about being reelected. But I want to be reelected for doing what’s right, and sometimes that means acknowledging that prohibition has failed. And I don’t want to perpetuate that failure and tear families apart. When they need help, they need loving engagement. They don’t need prison as long as they haven’t violated their neighbor.
Matthew: You’re right. Prohibition has failed. What are your thoughts about the war on drugs?
David: We’ve so demonized drugs that we’ve empowered the state and federal officials basically to run over traditionally protected constitutional rights. And basically empowered them to, you know, not leave people alone in their homes. If they’re doing methamphetamines, that may not be good, but wait until they go to the grocery store and then deal with them. But we throw flash grenades through living room windows and they end up in cribs and they burn babies, and they burst in with military gear in black at [5:30] in the morning and wake people up and scare them and they grab their gun and they think they’re shooting at a criminal and they get 72 bullets in them within about 6 seconds.
And so the war on drugs is putting our law enforcement at harm when there are much safer ways. It’s putting people at harm when they go to the wrong house. It’s creating an underground economy. And even when people, they arrest them and they go through the system they come out, they can’t get a job and then the only thing they can do to support their family is not only do they use drugs, but then they start trading in them. And so I think we have something maybe 10 or 100 times worse than alcohol prohibition. And thankfully we realized that it didn’t work. You know, people ask me, you know, who have loved ones that have been harmed by drugs, you know, they’re scared. But we want to put them in prison. That’s not helping them.
Matthew: Sure. Yes putting people in cages and it costs what 30, 40, $50,000 a year to keep them there, separating families there’s a whole bunch of terrible things associated with it. Now there’s a lot of people out there that will say David, won’t everybody be driving around stoned? How do you respond to that?
David: Well first of all I think there’s a lot of misrepresentation about how toxic the drug is. I think you know right now you can use cough medicine and drink too much of that and put yourself in impairment. You cannot get enough rest like this 18 wheeler did north of the district I served and use stimulants like coffee and caffeine pills and energy drinks and do foolish things and run over a whole bus of kids. So, you know, it’s wrong to be intoxicated or feasted too much and drunk too much and get in a car and fall asleep, but we don’t need to make that a crime. I had someone come in the last term and say that we should make sleeping while driving a crime. It’s incredible. It’s self-correcting and we just should deal with the harm when it’s caused or when we see them swerving.
You don’t need to take their blood. You don’t need to do all these other things. If they have shown impairment through their actions and how they’re harming people or potentially harming people on the roadway we stop them and we issue them a ticket. Now if they’ve run someone over we hold them accountable for their negligence. So I think there are ways to deal with that, and it’s not just marijuana. It’s eating too much, it’s staying awake too long. Those can happen and we should just hold people accountable.
Matthew: Now there’s a lot of people that will come out and say if we’re treating cannabis like tomatoes or jalapeno peppers with no restrictions kids will have access to them. What do you say about that, we can’t nerf the world. I mean what’s the answer?
David: Well I drink coffee in front of my children, but I don’t let them have it. I do from time to time have a beer, but I don’t let them have it. Until they’re in their teens and then I reasonably expose them to those things and particularly to coffee if they’re interested but say it can be very addictive. And I warn them that if you get addicted and you stop you’re going to have a severe headache. So we don’t need the government to be parents. We need for parents to be with their children. We don’t fence every body of water. We do take the precautions where people can quickly be around pools and things, but the main thing is to take our children and as they grow up train them to be responsible adults. And I think we can do that and should do that, not just with things like marijuana, but coffee, alcohol, you know, cough syrup, aspirin. There’s lots of things that you can abuse. Feasting, as far as if you eat too much all the time you become a glutton. It’s okay to feast sometimes.
Matthew: Do you feel legalizing cannabis in Texas is a 10th Amendment issue?
David: Well I do. Thankfully now the federal government at least has respected some states that are growing hemp and some states that are using marijuana medicinally. But if that were not the case, first of all, I don’t think it’s a federal issue. It should be simply a state issue. All crimes except for counterfeiting, treason and slavery and I think there’s one more really should be federal crimes. But crimes should really be debated on the state level.
Matthew: And you mentioned federal issues here. I hear you (17.27 unclear) some of the virtues of individual liberties, lament government and personal responsibility. Have we gotten away from these ideas in the last few decades and why do you think that might be.
David: Well it’s real easy to advocate responsibilities and we’ve done that more and more. There is a place for the state. I’m not an anarchist. I do think there’s a place to use force for justice and for contracts and when people harm their neighbor and don’t rectify it. But it’s easy to go down that road. It’s something that we have to teach each generation and it goes back to, you know, we just need to respect other people’s liberties and when we differ with them we shouldn’t go get the government to force them to do as we do. We should engage them, respect them as a fellow human being who is responsible and free. And force should just be limited to justice.
And I believe we’re made in the image of God free and responsible, and I think speed to God that there’s forgiveness of sins and Jesus Christ. And my hope in Heaven is not that I’m going to be a robot or a slave, but I’m going to be a free man that will use my freedom then perfectly. And that’s the patriot dream that sees beyond the years of Alabaster cities that gleam undimmed with human tears. And we’ve forgotten that. And even conservatives. So we have to qualify it, you know, we have to be a common sense conservative, a Constitutional conservator, a liberty minded conservative because the word conservative has lost its meaning. And what we need to do is and what’s made the United States Texas great is a responsible use of freedom, but when we don’t use it responsibly it causes a problem, it causes more government and it does provoke our neighbor to go get the government to get us in line. But I think the better way unless there’s violence is just engage one another.
Matthew: Now when does the cannabis bill come to a vote do you expect?
David: Well it’s just been filed this last Monday and so the Speaker will then refer the bill to committee and then there will be a committee hearing and then God willing a vote and then with enough votes coming out of committee, it would go to the House floor for a vote and if passed out of the House it would go to the Senate and then onto the governor. So it’s a lengthy process. The process is designed to kill bills more than pass them.
Matthew: Why is that? Why is that, I mean for people who don’t understand the inner workings of how the state legislature works. Is it to make sure nothing crazy gets to the floor? What’s the reason?
David: We hold the, we will the vote of power. And it should be very careful that we use it right. And sometimes, I mean , in the scripture says there’s safety. So usually there’s about 8,000, 6,000 to 8,000 bills that are filed. This last session I think there was about 1,600 that were passed. So there’s still a lot of laws that were changed or passed. I’m trying to repeal some bad ones, and not just pass some new ones. So it should be an arduous process so that we don’t continue to grow government, but it is also difficult to have to limit it and the government even lobbies itself sadly and wants to make sure it grows.
Matthew: How can listeners support your efforts in legalizing cannabis?
David: Well pray for me, and I love those who differ with me and that I will explain it well and I would encourage them to call their representative, their senator and express support, to do it respectfully. A lot of people, I would say most people here know it’s the right thing to do, but they’re scared about being reelected. I’m more scared about sending more people to prison that need help, that are desperate, that need the church, that need to be engaged, that need professional help when they’ve been addicted to something. And I also want to help people that have tried everything legal but now have found something natural but it’s illegal to help their children who are suffering from seizures and veterans who are killing themselves, 22 a day, that could help them. So I would speak about those things respectfully to the leadership in our state, the governor, the speaker of the house, the lieutenant governor, their senator and their representatives and then to focus on the people on the committee that it goes to.
Matthew: Okay. Well David, thank you so much for being on CannaInsider today. We really appreciate it.
David: Oh you’re welcome, and keep using that 1st Amendment . Thank you Matt.
Matthew: Thank you David. Bye bye. 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 at cannainsider dot com. We would love to hear from you.
In this interview with the co-founder of Mantis Ad Network, Paris Holley, we’ll learn exactly how cannabis-based business can advertise online and increase their sales. Paris gives specific expert suggestions anybody can use to get started.
atthew: 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.canninsider.com/trends. That’s www.canninsider.com/trends. Now here’s your program. Cannabis businesses can’t do many of the things that traditional businesses take for granted. We have had guests on the show talking about how to get a bank account for your cannabis based business, and today we have a special guest that will tell us how you can advertise your cannabis business online even if you’re ad has been turned down by media sources in the past. I’m pleased to welcome Paris Holly from Mantis Ad Network to CannaInsider. Welcome Paris.
Paris: Thank you for having me. I’m excited to be here, and talk a little bit about what we do.
Matthew: Yes tell us what Mantis Ad Network is and how it helps cannabis based businesses.
Paris: So Mantis is a digital marketing platform built specifically to support the industry that’s been neglected by Google, Facebook, Twitter and other traditional media companies. We allow businesses to advertise direct to a cannabis audience without worrying about being shut down or violating any strict terms of service. So to put simply, you know, if you’ve gone to one of our publishing partners, whether that’s been the Denver Post or Medical Jane, Leafly and read an article on those websites, often you will see on the side an image or a banner encouraging you to purchase a product or service as well as if you’ve any widgets that would recommend content for additional reading, and we’ve also powered a lot of that as well. And so what we’ve done is we built our own network within this space to provide an outlet for businesses to market their products and services.
Matthew: Yeah this is really needed because Google won’t touch anything in the cannabis related market, and Facebook primarily as well. So this is really solving a big problem. What is your background, and how did you come to start Mantis?
Paris: Yeah, so I come from an enterprise consulting background. I led teams as a system architect for Fortune 500 companies across the country. My introduction to this space was actually through my partner Matthew Price who became a patient here in California and founded Medical Jane to focus on educating consumers about the medicinal benefits of cannabis. It was through our work together on that project that we began to identify gaps within this space, and marketing was a common theme we heard both as a publisher and as advertisers. Traditionally businesses in this space only have events and print to go to for a lot of their marketing efforts. So the pain points that we went through, the anecdotes that we heard from businesses in this space, we felt that Mantis was definitely needed. And if no one was going to support the industry, you know, it’s something that we kind of needed to do and build on our own.
Matthew: So let’s dig down a little bit into what Mantis does. Let’s say I have a business that’s in the cannabis space and I have an ad that’s been turned down by Google or Facebook, but I think it’s a really good ad, how can Mantis get my ad out there? What’s going to happen once I submit a banner ad to Mantis?
Paris: Sure so our network is composed of over 50 websites that are either focused primarily on delivering cannabis content or are just supportive of our space in general and willing to promote cannabis businesses on their websites. So within each of those websites we provide the ability to target based on demographics such as age, income and gender. Maybe based on the location of where that visitor is coming from whether that be by state, by country or by metro, as well as through keyword targeting. So if you’re reading an article about a particular target or a topic, excuse me, you would be able to then market your campaign and your banners to specific types of content. And as I mentioned before, the way we do that is we either put the banners on those websites or we recommend content from your website within those publications. So we’ve built our own network by collaborating with all of these different websites in this space who are friendly to cannabis businesses.
Matthew: There may be a lot of listeners that are not familiar with the terminology used in online marketing, and it can seem a little bit intimidating. But really the concepts are very easy once they’re explained. Can you help us understand some of the important metrics that are thrown around with online advertising?
Paris: Sure. I think that the one that’s probably most known would be the one metric that everyone tends to focus a lot on is conversion rates, right. So I launch a campaign. I know that if I spend X amount of dollars, drive people to the website, my visitors are going to convert into a purchase at a certain percentage of my overall traffic. Generally when you look across e-commerce and other websites, you know, companies tend to sell anywhere between half a percent to two percent of their overall traffic and converting that into sales. And so conversion rate is a good metric to use as an overall indication of performance in general of a campaign. But there’s also other metrics that you have to be aware of, and regardless of whether or not you’re spending to drive traffic or you’re building organic traffic. So there’s tools out there like Google Analytics which can give you a plethora of metrics whether that be bounce rates or flow within the websites. So you’ll actually be able to track, okay what page does the user enter on? How many pages does he view? What page does he drop off? If he views a product, does he add it to the cart? After he adds it to the cart, does he continue to check out or does he usually stop once he sees the price and the shipping cost in the cart?
So there’s a lot of data available through these tools that you can use to optimize not only your page spend, but even just taking advantage of the traffic that you get through other channels to your website. It’s understandable that many businesses tend to focus on that conversion rate specifically because it’s an important number, right. If you know if I drive so much traffic, it’s going to only convert at best case at a certain percentage, I can correlate how much I spend to how much I’m going to earn in profit. What a lot of businesses don’t do is really build a model around what the true cost of an acquisition is or a lead is and figuring out the lifetime cost of having that lead as a potential customer. A lot of businesses will spend or put a lot of effort into building their organic traffic without taking advantage of contact information that you can grab from a visitor. So if you’re paying for a campaign or you are launching an SEO effort and driving traffic to your website, but you’re not getting that user’s email in a marketing list, you’re not asking them for their phone number, you’re essentially throwing away traffic. Even if that user does not buy the first time he comes to your website, you can always remarket and retarget them in the future.
Matthew: Great point, and you just mentioned remarketing. So let’s go ahead and talk about that. That’s something that a lot of people won’t be familiar with. Can you tell us what remarketing is and how you can leverage remarketing to bring down the total cost of your marketing efforts?
Paris: Sure so retargeting is a powerful tool that’s really kind of grown in the digital and the ad tech space in the recent years. And what it allows you to do is track when a user or a visitor comes to your website. And even if they don’t purchase a product, you know that they’ve been to your website before. So if they go to, for instance, www.cnn.com or another online website and you then have the opportunity to present them with advertising based on the fact that they’ve been to your site and done some action, right. So it can be as simple as hey you’ve gone to my website, you haven’t purchased a product, if you come back 30 days later I will target you and offer you a 10 percent off coupon. I’ve seen something a little bit more powerful where you might even know what product they purchased specifically and then launch a campaign that targets them to upsell accessories or maybe upselling the latest version of the product whether it’s carrying bags or attachments or add-ons. So there’s a lot of powerful things you can do with retargeting. And in general what the industry has been finding, when I say industry I mean the advertising industry, has been finding is that users who visit your website as the result of being retargeted tend to convert over 50 percent better than users who come to your website for the first time.
Matthew: Yeah that makes a lot of sense. I mean they came to your website for some reason to begin with, there was some interest there. So they’re more motivated and interested in your subject matter.
Matthew: Now you mentioned the total revenue over the lifetime of a relationship, and that is an important figure. However some businesses are so new that they have no idea, but it’s something that if you’re a dispensary owner, for example, you know hey there’s a good likelihood if somebody comes in and has a good experience there’s, you know a subset of them will come back. So the marketing, the remarketing and capturing the email, all of these things working together really create a great way to complement your internet marketing efforts.
Matthew: Now is there any particular products or services that you think will do well on the Mantis Ad Network? I mean everybody has had the experience where they go to like Yahoo or some news portal and at the bottom they see these ads that are pretty consistent like weight loss, insurance and a couple of other things. These are things that are kind of parentally do well with banner ads on certain types of platforms. What do you think will do well on Mantis?
Paris: I would say the success of a campaign really comes down to the goals you have as a business for marketing. From an outsider’s, not an outsider’s prospective, from my synopsis of the cannabis industry right now is that we really haven’t got into an age where branding has been at the forefront of marketing efforts and companies in our space. You can take edible companies as an example of how constrained they are with the fact that they have to only sell and manufacture and distribute within the state they launched out of. You know you see them kind of working around that through licensing, but you really haven’t seen across state lines large branding efforts of getting products in front of consumers. And for a lot of businesses just being able to get your product inside of a dispensary whether that’s a flower or a smoking device or an edible, that’s a large part of the problem right. Once you get into distribution you probably have a good starting point, but eventually things are going to change a little bit where you’re going to have to be in front of the consumer prior to them walking into a retail store and purchasing the product.
Even with some of the advertisers that we work with today, the results vary quite a bit even though they might be selling very similar products. The variability can be driven based on the product’s pricing, the website experience, whether it has good design or there’s enough information about the product once you go and visit it. In general our view of the industry and the consumers within it is that they’re very educated. You know a lot of times what we’re finding is people will… even if they click on a banner and go to your website, they might look at the product to see if it’s something that they’re even interested in, but they are immediately going to the search engines and going to other websites to look up reviews, go on the locator tools, the Yelps of the world and saying okay what do other people say about this product before I purchase it. So not only does your campaign have to be creative, but just like with any industry, any market, your product has to stand out. If you aren’t properly marketing the differences between your, for instance, vape pen between the guy next door, customers are going to see that and not be as interested in the product unless you’re really putting a large effort in making yourself different.
Matthew: In your opinion what does a good banner ad need to get a prospect’s attention. You’ve seen, I’m sure, just thousands of banner ads. What are some that kind of stick out that we can take away as a best practice?
Paris: I would say that in general they just need to be straight to the point, identify what the product and service is, and most importantly be visually appealing. I would say if you haven’t hired a designer to put together your creatives you should be. Because the difference between a quality design and something that you’ve done in house is night and day. And obviously with any type of marketing whether it’s digital or print, if you can incentivize the consumer, whether that be offering free shipping or a discount or a promotion, those typically engage much higher than a normal product or service ad would, but obviously at the cost of offering an incentive. But that’s just one part of the equation.
The other part is not just the banner itself, but strategically placing it in an area that makes sense. So one thing that we like to offer to our advertisers is keyword targeting. We’ve found that for instance a company that sells CBD based products not only will their banners perform better on our network, but they’ll see better conversion rates if their campaigns are being shown next to articles talking about the benefits of CBD or going into more detail. So users who are looking and seeking out this content can also see relevant, targeted advertising based on what they’re reading or who they are. Those strategies are going to be much more beneficial. So it’s not just what the banner looks like, but also the context in which it appears that really will drive traffic and ultimately sales.
Matthew: Now how large a footprint is available in your network? I know you’re still young and that’s something you’re building, but where does it stand right now?
Paris: Yes so currently we, our network, we’re about 50 websites. Collectively across all those websites we reach about 4 million people every month. We project that by the end of 2015 we’ll probably even be closer to over 20 million people a month. We use a third party traffic analytics provider called Quantcast. They measure a lot of the top sites across the internet, and then based on some of our previous metrics and our projections we expect to be one of the top 100 US networks by the end of next year. And more specifically probably one of the only ones, if not the only one, that would support cannabis completely.
Matthew: Is there a lot different website properties that at first had some resistance and now they’re thinking about it over time and coming around?
Paris: As far as becoming a member of our network?
Paris: Yeah I mean I think it’s one of those things where for us it’s a challenge because not only are we educating advertisers in an industry that traditionally haven’t gone digital. They’ve done print, they’ve done the events, but digital is a new realm. And even a lot of businesses and especially if you look at the dispensary market, a lot don’t even have their own website or their own tools. So we’re trying to solve that problem and making it as simple as possible. But for publishers it’s kind of also an education process because say for instance you are going back to the example of a dispensary. If a dispensary wants the market to… if they’re based out of LA and they want to reach everyone in the LA metro, you as an individual publisher can only reach so many people as one website in LA. Mantis, however, as a network of 50 websites can then take everyone’s LA traffic and present it into one bundle. Outside of reach and audience there’s also the, you know, a lot of publishers in our space aren’t traditionally technical companies, right. They are publications that happen to have an online website and usually their products and services that are around their digital strategy aren’t really tailored or custom fit for cannabis, nor are they a core competency for that organization.
So for us it’s we want to come in and build a platform that offers at the end of the day a better value to our advertisers. If you as a client want to be able to say here are my creatives, I want to push them out, I don’t want to go to every single publisher and negotiate rates, figure out what ad sizes they support, putting the images out, having to negotiate when the ad is going to launch. With a platform like Mantis we can bring everyone together. We can add more value to everyone’s website. So for us it’s not a matter of can we do it better or are we trying to take anything over. It’s like at the end of the day everyone in this industry is trying to grow, and I think that the more publishers, the more websites that can get together and work together and offer a better value to businesses in our space, the better off you are going to be as an industry. It’s kind of been our approach so far and why we’ve been able to acquire as many publishers as we have is that they all see that vision. They all see the need to build this network and provide a service that goes beyond what any one individual publisher can do on their own.
Matthew: Now let’s just review. Let’s pretend that there’s somebody that is creating their first ad on Mantis and you’re looking over their shoulder, what’s the one or two or three things that they make sure that they get right in order to have a successful campaign?
Paris: So I would say the first is make sure that you have the tools in place on your website to analyze not only the traffic that Mantis could give you, but whether the traffic comes from search engines or other websites. Make sure if you are an e-commerce or you have a store that you have online that it’s integrated into your Google Analytics, that you can track where your sales are, who they come from, what converts, what doesn’t. If you don’t have that visibility into your traffic, any money you spend you’re throwing out the window. So I would say before you even start a campaign, please be sure that you can track and quantify your investment from a marketing prospective.
The second piece would be then to also, given that half a percent to two percent is what’s typical for a website to convert sales into or to convert traffic into sales, take that into account not only when you’re budgeting, but then also trying to find ways to account for the 98 percent that don’t purchase, right. So whether that’s finding ways to collect email addresses or other ways to turn traffic that aren’t leading to sales but could be leads for the future. And then the third piece is having, if you can, try to think about or if you have existing data, try to optimize your campaign as much as you can upfront. But do understand that it’s going to be a learning process for you as well as for us. You know you’re not going to be able to launch a campaign and get 100 percent optimization off the gate. You’re going to have to learn what users from what types of devices, from what locations, from what websites work the best and then tweak and optimize as you go along.
Matthew: That’s an excellent point. Even the most successful internet marketers that I’ve met they never talk about putting up an ad and striking gold. It’s always put it up, test, refine and optimize over and over, just iterating that process. I’m glad you brought that up. You recently presented to cannabis investors at the ArcView event in Las Vegas. Can you tell us a little bit about that experience and what it was like?
Paris: Yeah so Mantis launched earlier in May of this year. We’ve been steadily growing about 25 percent month to month from a traffic prospective. And you know we got to a point where we established both a need for the network as well as significant traction going into 2015. So ArcView presented a great opportunity for us to not only look at raising funds to grow our team, but to also establish strategic partnerships with key players in this space. It was actually our second time going to ArcView. And so it’s just a great opportunity to get to know other like minded individuals in a space, other technical companies that are also looking to get started. And for us we left that week with a lot of great leads and potential to take Mantis to the next level and hope to continue to build on some of the relationships that we got during that process.
Matthew: Is it still possible to invest in Mantis?
Paris: Yeah, so we’re still actively looking for investment whether that be pure capital or more strategic relationships. Particularly as we grow, as we add more publishers, as we reach even more millions of people online, we’re going to be looking to ramp up our sales efforts as well as continuing to grow our offering and our platform from a development prospective. So anyone that would be interested in getting involved in helping us grow we would be very interested in talking with you.
Matthew: Paris as we close can tell listeners where they can learn more about Mantis?
Paris: Sure. Our website is www.mantisadnetwork.com, and we just relaunched with some additional information and pricing is also available on the website if you’re interested in launching a campaign. I am generally available online via our chat room window from the website, or I can be reached on my cell at 515-974-9848.
Matthew: Well thanks so much to Paris Holly of Mantis Ad Network for being on CannaInsider today. Thanks Paris.
Paris: 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 guest 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.canninsider.com, email us feedback at cannainsider.com. We would love to hear from you.
Edibles and vape pens are changing the cannabis market right now. People are shifting away from cannabis products that involve lighters and smoking. As such the demand for cannabis extraction technology is growing month-by-month. Patrick Taylor of Eden Labs walks us through the technology and opportunity of cannabis extraction
[1:17] – Background on concentrates and extractions
[1:49] – Patrick explains how he started in the industry
[2:38] – Why the market is demanding cannabis concentrates
[4:14] – The difference between CO2 and butane has oil
[6:31] – Patrick explains Coldfinger and distillation
[7:43] – What part of the plant is turned to oil
[9:43] – Fast ROIs on purchasing extraction machines
[11:51] – Patrick explains extraction machine sizes and process times
[15:02] – Is it difficult to learn how to use an extracting machine
[16:02] – Perfecting the extraction process takes practice
[17:51] – Patrick explains polarity
[19:16] – Contact details for Eden Labs
Matthew: Today’s show is a deep dive into cannabis extraction technology and all the opportunity that exists in this space. If you’re interested in learning more about how you can get involved in cannabis extraction either as an investor or if you have a cultivation facility, and you would like to have extraction services on site, please email us at feedback at cannainsider.com. That’s feedback at cannainsider.com. Now here’s your program.
Perhaps one of the newest and most popular ways to consume cannabis is in concentrates, but before a concentrate can be made the cannabis plant needs to be broken down or extracted. Today we have an extraction expert, Patrick Taylor, on the show. Patrick works for Eden Labs. Eden Labs makes arguably the most sought after extraction machines. Welcome to CannaInsider Patrick.
Patrick: Hey thanks for having me.
Matthew: To give listeners a sense of geography, can you tell us where you are in the world today?
Matthew: All right and what’s it like there a little rainy, sunny, what do you got?
Patrick: It’s a surprisingly bright day, but we’ve been getting the typical winter rain lately.
Matthew: Okay. And Patrick for people who are a little fuzzy still on what extractions and concentrates are, can you give us a high level background on that.
Patrick: Sure. The extraction of cannabis, you take all the oils out of the plant and you concentrate it. A lot of people do extractions everyday in their house when they make coffee, kind of the same idea. What’s left behind is just generic plant material. So a lot of cellulose, chlorophyll and we take all the essential oils out of the plant.
Matthew: And how did you get started in the industry with your background?
Patrick: Well I think like a lot of people in the industry I just got into through sheer force of will. I started out very basic and bugged Eden Labs for a job for a long time. And eventually, you know, after a couple of years of trying and educating myself they took me on. I’ve been with them for a little over two years now. Yeah my first extraction was in 2002, but doing it full time now for 3 years.
Matthew: There’s a huge value proposition for both a business owner to be in extracting, but also for consumers. Can you tell us a little bit why business owners are gravitating to extraction machines so much?
Patrick: Well the marketplace is demanding it. Dabs, edibles, vape pens, they’re very in vogue right now. So growers and dispensaries as well are getting these systems. We’re also seeing that there’s a health conscious movement where people don’t want the pyrolytics, meaning just kind of carbon and nasty junk that you get when you smoke flower. So that’s a way to ingest medicine a lot cleaning. Because, you know, the potencies can get pretty high. If what you’re after is let’s say CBD, and you can get an extract that’s 80% CBD, well that’s only 20% of stuff that you don’t really want. Whereas with a flower, maybe that flower is only 10% CBD and 90% that isn’t medical or recreational for that matter.
Matthew: And how would you describe the difference in effect from consuming concentrate versus flower?
Patrick: It’s certainly more potent. Everything is concentrated so all the flavors are more intense. The high is much more intense as well. So I guess the easiest way to describe it would be a glass of wine versus a shot of whiskey, something along those lines.
Matthew: Got it, okay. And there’s still in the news a lot of stories about butane hash oil. Can you tell us the difference between CO2 and butane has oil and why they’re different and better?
Patrick: Sure so from a chemistry point of view of course they’re different solvents. CO2 is an inert gas. It’s all around us right now. It’s inside of you. A lot of people view it as healthier, non-explosive, non-flammable. I feel a lot safer in a lab working with it. I am pretty experienced with butane extractions as well and I always have this nagging fear, you know, kind of like a paranoia when I work with it.
Matthew: I don’t blame you.
Patrick: Yeah, if done right, you know, in a lab environment, butane is an alright solvent. But CO2, you know, I’ll be texting while I’m operating the system and not worrying about it. Butane is a light hydrocarbon, very similar to propane which is what people bbq with. Lots of news stories recently about do-it-yourselfers hurting themselves. So as far as the actual concentrates go, you know, the difference in their properties, CO2 tends to be a little bit less potent. Butane tends to be a little bit more potent. But that ultimately depends on the parameters of how you do your CO2 extraction. So you can tune the polarity of CO2, meaning that you can isolate certain cannabinoids. That’s how we’re extracting all this stuff is through polarities. So you can get into those super potent concentrates with CO2, but it’s a matter of technique.
Matthew: What does polarity mean? Can you tell us what that means?
Patrick: It’s the electrical, the way that the electrical charge is set up on individual molecules. So concentrates tend to have the same polarity as super critical CO2 and butane, propane, ethanol would be another one. And that’s how all these extractions are being done is polar, except for dry ice. That’s like a mechanical extraction.
Matthew: And what about Coldfinger and distillation? Can you summarize what each of those are?
Patrick: Sure. So it’s a modified soxhlet extractor, and it’s Coldfinger, and it’s basically you got a cooled condenser that’s shaped like a finger. User ethanol extractions. It’s a reflux distiller so you have a basin of ethanol in the bottom of the extractor and you heat that ethanol up, boil it and then it condenses on the Coldfinger and drips through the plant material, and you get a little tincture in the bottom. A lot of people are calling it RSO, even though that’s probably a misnomer. But it’s mixed tinctures. It’s really good for edibles as well. It’s definitely an entry level system, but that’s where I started as well. I bought a little Coldfinger extractor.
Matthew: I’m glad you corrected me and said Coldfinger, I think I said Goldfinger. I don’t know if I’m having a James Bond them today or what but thank you. Now will the machine consume the whole plant or just parts of the plant, the flower, trim, stem. I mean what can be turned into oil here? What’s desirable and how does that work?
Patrick: Well I mean just about any part of the plant that has psychoactives in it, everything basically. Now you will see big yield differences and flavor differences in what you put in. Flower, you know, you can get yields up into the high 20s. So 28% is a number that we see often.
Matthew: THC, 20% THC?
Patrick: Correct yeah, and you know another 7, 10, 11% in terpenes. Most people though are doing the sugar leaf trim. So there we see numbers something like 12% to 15%. There’s some people that are growing really well and they’re getting up to 19% yields by weight. And then you can also do stems and fan leaves, but you know that’s definitely kind of bottom of the barrel stuff. And I’ve even heard of people doing root balls. I don’t know what to think about that.
Matthew: So the extractions become so valuable that it’s almost not worth doing the root leaves if you can do anything else, if you could do sugar leaves or flower and things like that. It’s not worth running a machine because it’s so much more valuable to do it with a higher potency plant, parts of the plant.
Patrick: Yeah that’s correct. But you always want to have the machine running 24/7 right. So if you run out of those more desirable parts of the plant, I would say a 1% yield is better than a 0% yield.
Matthew: Right, right. So from a cannabis cultivator I spoke to some cannabis cultivators and I just started hearing some just incredible return on investment numbers with the extraction machines. You know, some people would say I bought the extraction machine and it paid for itself in a week or two weeks. And I was like how do these numbers make sense, and it’s because this is just so valuable this extracted oil, but can you tell us a little bit about that? I mean is it outrageous what I’m saying here? Do you hear these things as well?
Patrick: Yeah you’re exactly on point. Our most successful stories two days, someone paid their system off. And he was vertically integrated. So he had a grow and a system and a dispensary. So it’s definitely an outliner. Like the most common return on investment is probably a week and a half.
Matthew: God that’s insane. Okay and just to give people a sense, these machines are not inexpensive either. You have a range of machines, but can you tell us the price points on these in just high level?
Patrick: Yeah sure. I mostly work in the lab, but I believe our five liter system is somewhere around $74,000 and they go way up from there. So we have a 100-liter system as well which is quite a bit of money. I don’t know the number on that. There’s no other investment like it. You get that first $100,000 and then you’re in business. You’re a millionaire a couple weeks later, but it’s hard to get that first $100,000 of course. You know the 5-liter system that will make 7-900 grams a day easy. So depending on where people are that’s quite a bit of concentrate, quite a bit of money.
Matthew: Yes and there’s investors out there that have seen the dynamics. I’m sure you’ve heard of this Patrick even though you can’t comment, but there is investors out there, if anybody wants to know more about this, email me at email@example.com. But there’s investors out there that will put up the money to pay for these extraction machines because they know what the return on investment is and they want to help you get that return on investment and in return they charge a certain interest rate, you know, on that principle but that would be for accredited investors only. But if you have any questions around that you can email at firstname.lastname@example.org.
Now you talked a little bit about the size of the machines, but can you give us a sense of how big a grow would need a certain size machine?
Patrick: Well I was just at a grow the other day that was about the size of a McDonalds lobby or something like that and they’ve got a 5-liter, and probably their grow is not going to keep up with the system. People always underestimate how hungry the systems are. For instance a 20-liter machine you’re looking at easily 140 pounds a week in order to feed it, but you can always supplement your grow with doing contract work, and that’s kind of what I did a few years ago is I would take other people’s plant material, run it for a flat fee and then give them everything back. So you can make a little bit of money there. People are doing splits as well, your 50/50 split or 60/40 split. So almost no grow that I’ve been to or very few of the grows that I’ve been to have been able to keep up with their system. So they have friends and family or whoever that comes and supplements, but you always want to keep that machine running.
Matthew: Yeah. So let’s say just for simplicity sake I have 1 kilo or about 2.2 pounds of cannabis, how long would it take to turn that into oil, and how much, I mean I know it depends on the machine, and then how much oil would I have?
Patrick: Sure. So let’s say 1 kilo, that’s exactly how much a 5-liter system holds. A 12 to 15% yield so 120 to 150 grams, this is off sugar leaf trim. And that takes 3 hours, 4 hours, somewhere in there.
Matthew: Wow that’s pretty quick.
Patrick: Yeah and it’s easy. It’s not like you’re sitting there turning gizmos. You don’t have to pay attention to it. When I had my facility I had a Playstation in the lab so I just sit there and played video games while it was going.
Patrick: And it scales appropriately. So if you get a 20-liter, it’s 8, 10, 12 hours, somewhere in there. The larger systems tend to run a little bit quicker.
Matthew: And really what CO2 is doing is greatly accelerating what mother nature would do on her own essentially is that right. Is this the decomposition and breaking down?
Patrick: The cannabinoids actually dissolved into the CO2 just like salt in salt water. So kind of an analogy that I have is if you filled the extractor up with beef jerky and then you moved water across it, and then you boiled the water away, the salt would be left behind, kind of the same idea. Yeah so it’s actually a chemical extraction, and if you could look inside where the concentrate and CO2 is moving through, you wouldn’t be able to see the concentrate just like you can’t see salt in salt water.
Matthew: Okay and you mentioned you play Playstation or you used to when you ran the machine but does it take much training to get up to speed on how to use it?
Patrick: No. So the standard training is two days and that will give you a fundamental framework to operate the system. But it’s kind of like cooking, you know, anybody can make Top Ramen in their house, but then there’s also chefs, right, in Vegas or whatever and they’ve really perfected their art. So we can get you to the Top Ramen stage, but there’s a lot to learn right. There’s a big breadth of knowledge and fortunately for us the Top Ramen sells for $50 a gram or more. So it’s a good way to get started yeah.
Matthew: Yeah I like the way you put that. What is the top of the pyramid as learning? I mean is there other guys doing some kind of interesting things out there as far as how they run the machine or how they go about, their art? Can you tell us a little bit more about that, the creative side?
Patrick: Sure. Most of what we’re going to do is in post processing. So once it comes out of the system are we going to turn it into shatter, are we going to make vape pens, are we gonna just leave it as a wax or an edible. So it’s the post processing is where the real chef side of it comes in. The system, the main difference that you’re going to see is different pressures and those are really easy to experiment with. You know you just do a run and say, oh okay I’m going to do 1600 psi or this time I’m going to try 2100 psi, and you will see a small difference in the consistency of the concentrate because we’re changing that polarity again when you change the pressure. It’s not hard to do, it’s just a little bit of experience that’s all. Typically we see an RND phase of something like two months before someone decides okay this is what I want to take to market.
Matthew: Okay. Do you see a lot of people operating the machines that don’t actually grow their own plant? Like you were saying, they just come in and they do this for cultivators, say like I’ll do this all for you or the cultivators kind of overwhelming majority where they say we’re going to do this ourselves in house.
Patrick: Maybe like 15 or 20% of our customers are contract workers where they don’t have a grow.
Matthew: Okay, okay.
Patrick: And then the rest are gonna be dispensary owners and definitely grows. You know that’s our biggest customer or people with grows that are looking to get into the concentrate industry.
Matthew: Now you mentioned polarity a little bit and this concept is kind of fascinating to me. Could you again circle back and just kind of talk about what exactly that is and how it is going to effect the concentrate because I want to make sure we don’t gloss over that too much.
Patrick: Sure. So molecules have poles on them. So they have, on the left side it will be negative and on the right side it will have a positive charge. And generally things are either polar or non-polar. They’re either positive and negative or the molecule will even out so it doesn’t have any kind of positive or negative charge. And with extractions like attracts like. So polar solvents will attract polar compounds and non-polar will attract non-polar compounds. Most of what we’re after in the plant is non-polar. CO2 is kind of in the middle, as a supercritical, barely into the supercritical range. It’s somewhat polar, somewhat non-polar, but as pressures and temperatures increase you can push it more towards the non-polar side. Butane is a non-polar solvent. Water is a polar solvent. So that’s why if you try to do a water extraction, if you were just going to soak cannabis in water nothing would really get extracted out of it, but if you were to soak it in butane, it does grab things.
Matthew: That is very interesting. I could talk about this all day. It seems like there’s so much information here, but as we close can you tell listeners how they can learn more about Eden Labs?
Patrick: Sure so the best way is the website. It’s www.edenlabs.com. Again that’s www.edenlabs.com.
Matthew: Awesome. Well Patrick thanks so much for being on CannaInsider today. We really appreciate it.
Patrick: Sure, thanks.
Matthew: And just a reminder for anybody out there who is interested in cannabis extraction. You can email us at feedback at cannainsider.com. That’s email@example.com, and we’ll answer your questions. Whether you’re interested in deploying extraction technology at your dispensary or cultivation facility or if you’re an investor looking to learn more about extraction opportunities.
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 at cannainsider.com. We would love to hear from you.