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The Size of the Cannabis Market – Diving into the Numbers and Insights of Cannabis Legalization with Matt Karnes

Matt Karnes

Matt Karnes, founder of GreenWave Advisors takes his keen analytical eye and helps us understand the cannabis industry in size and profit potential compared to other “sin” industries.

Get 10% off Matt Karnes industry report at: http://www.greenwaveadvisors.com/
with the coupon code: cannainsider

Key Takeaways:
[1:25] – Matt’s background
[3:31] – Matt talks about the content and numbers in his research report
[5:42] – Matt discusses the difficulties in analyzing the cannabis market
[6:57] – Comparing cannabis to alcohol
[7:50] – Matt compares the marijuana and alcohol industry in terms of size
[11:09] – Matt discusses why cannabis business can’t write off certain expenses
[15:11] – The big takeaways from Matt’s report
[17:27] – Matt talks about the new tax numbers coming out of Colorado
[21:06] – Matt discusses the marijuana industry moving forward
[22:42] – Contact details for GreenWave

*Get the FREE CannaInsider Podcast for your smartphone, CLICK HERE.*

Read Full Transcript

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

We hear a lot of wild speculations thrown around about the size and scope of the cannabis industry. A lot of it without any real substance or data behind it. Today we’re going to take a much closer look at the size of the cannabis market from an industry researcher that has dug into the numbers and can paint a picture of the size and potential of the cannabis opportunity. I am pleased to welcome Matt Karnes of GreenWave Advisors to CannaInsider. Welcome Matt.

Matt: Thank you , good to be here.

Matthew: Now Matt to give listeners a sense of geography, can you tell us where you are in the world today?

Matt: I am in New York City in Manhattan.

Matthew: Matt you have quite a media report on the cannabis industry, but before we get into that, can you tell us a little bit about your background as an analyst and why you started GreenWave Advisors?

Matt: Sure. I served as an equity analyst both on the sell side and as an analyst on the buy side for a hedge fund. And during my tenure as a sell side analyst, I authored various industry reports on different emerging technologies, disruptive technologies, etcetera, and analyzed those type of companies when I was an analyst on the buy side. Prior to that I served as an auditor for Price Waterhouse. I had varying financial roles during the course of my career. And about a year, year and a half ago I just really took an interest in the cannabis sector realizing that there’s tremendous growth opportunity. And as I was doing my due diligence on the industry it occurred to me that there was really no information that was available in terms of, you know, quantifying the industry that provide, you know, real transparency into how you could take it, go about determining what the market size, potential market size is.

So I took that opportunity to conduct my own further due diligence and analyze the information that was available in those markets where marijuana is legally sold, and use that as a basis to prepare this report, this industry report which is, you know, a pretty lengthy, detailed report on where we are right now.

Matthew: Yeah it’s such an opaque market. It’s state by state. There’s the information can be slow to come out. It’s very difficult for someone that wants to get a macro sense of what’s going on to get real true information. What subjects are explored in your research report so listeners can get an idea of what you dig into.

Matt: Sure so basically what the objective of this report, our first report is sort of like a primer for those new to the industry, and you know maybe just puts things in a different perspective to those who are well familiar with the industry. And what we do is we kind of provide an overview of, you know, basically what cannabis is, what are the different components of the ecosystem. We also talk about federal laws, why we believe federal laws are likely to change, and we also provide an overview of some of the state laws. And then we do a deep dive, and we also have a long term view, a thesis on which direction we think the industry is going to ultimately… how it’s going to end up ultimately.

And a big part of what our report is is that we do a deep dive into those states where marijuana is legally sold, and we analyze the data and we look for commonalities among the states and we use that as a reasonable basis for our projections for those states that have not yet legalized. And we did this, we approached this in two ways. We looked at the medical marijuana market, and then we also looked at the recreational market, and we built two models. We have a detailed model state by state, and we map out our methodology. We indicate exactly how we get to our assumptions, why we use our assumptions. And then we consolidate both of our models to have, you know, to provide the industry estimates.

Matthew: So your background as an analyst, publically traded companies have so much information as far as, you know, the financials that it’s much easier to do due diligence on a company and figure out what they have going on. In contrast, what kind of information do we have for companies for people that want to dig into it, but they don’t have the readily accessible information of say a publically traded company?

Matt: Well it is really difficult and particularly trying to analyze the recreational market because we just don’t have the data available. On the medical side, you know, we know what the patient data is, we know sales are. There’s certain metrics that we’re able to calculate and we’re able to identify trends. But on the recreational size it’s much more difficult. And so looking at, you know, publically traded companies, what I believe is that everything is going to trade. At some point there are going to be more and more publically traded companies that are going to trade on exchanges that provide more liquidity and are, you know, more acceptable from the institutional standpoint. And these type of stocks whether or not, you know, in any type of ancillary business I believe that these stocks will trade in tandem with how the industry is moving as a whole.

Matthew: Now how can we thing about the cannabis industry in terms of prohibition ending similar to let’s say alcohol and then something that’s never been really in prohibition, cigarettes perhaps? I mean what kind of lens do you use to compare cannabis to alcohol?

Matt: Well there is actually a lot of similarities between prohibition with alcohol and where we are now in marijuana. So for example back in the day if somebody had some type of ailment, their doctor would prescribe whisky to alleviate that. We kind of go… we do an analysis and we do talk about the similarities between prohibition then and now. What we also find is that after prohibition the growth rate in alcohol sales was pretty significant. It was north of 20 percent. So we kind of factored that into what we are forecasting from the recreational standpoint, taking a haircut to that assumption.

Matthew: Okay. Now in terms of size, what is the size of the legal cannabis industry versus the alcohol industry so we can get a sense of comparison.

Matt: Well the thing is it’s really hard right now to figure out, you know, what the terminal value of marijuana is. So the alcohol industry is a mature industry as other sin industries. And the alcohol industry is, you know, triple digit in the millions, $100 million, $200 million. The spirits is about $72 million, wine about, I guess about a $30, I’m sorry, billions not millions. $72 billion for spirits, about $30 billion for wine, beer is about $100 billion. So that’s north of $200 billion. So where does that… how does marijuana compare to that, and also cigarettes, tobacco is about $290 billion.

So if you look at marijuana, what we anticipate under the trajectory, our anticipated trajectory for legalization. By 2020 we would expect a combined medical and recreational market to approach about $20 billion, and if you just then in 2020 say okay, all those remaining states, if they were to legalize by 2020, in that first year the market would be about $35 billion. So clearly from there we have a lot of growth. So it would not be unreasonable to assume that the marijuana industry could surpass the alcohol industry as well as the tobacco industry.

Matthew: Yeah and cannabilize it as well at the same time as it exceeds it. You know a lot of people turning to perhaps edibles or drinks infused with THC versus having a glass of wine or a beer. So I imagine that you know the big alcohol companies are really looking at this closely.

Matt: Absolutely.

Matthew: So the fact that most cannabis that are traded publically are penny stocks or what some people refer to as the OTC stocks, over the counter stocks, do you anticipate this keeping out the big Wall Street money from trading these shares?

Matt: Oh absolutely because there’s really a very limited liquidity. That’s a big concern. And also there’s, you know, very little transparency from some of these smaller companies. And you know, they need to be traded on a more stringent type of platform such as the New York Stock Exchange or the NASDAQ or what have you. That’s what’s going to attract the institutional investor base. Those exchanges also provide added comfort in the fact that, you know, there are more restrictions to list on those type of exchanges. So that’s another reason why institutional investors would be looking to invest in companies that are listed as opposed to the current environment.

Matthew: Now you mentioned you’re also a CPA. As you’re probably aware cannabis cultivators can’t write off a lot of their expenses. Can you just talk a little bit about how a normal business writes off expenses and then how a cannabis business can’t really do the same thing and how that hampers their profitability?

Matt: Yeah sure so basically, you know, any other type of business you have your revenues and you have your expenses. Your normal operating expenses are tax deductable. But in the case of cannabis, those companies that touch the plant are prohibited under Section 280E from writing off their operating expenses. So their rent and their, you know, utilities or what have you. The exception to that is the cost of sales which is the cost of the product, the actual flower, you know for example that a dispensary would purchase, and then also for a grow facility, you know the cost of producing that plant. But those are the cost of sales, but you know that’s it. That’s where the buck stops. And the IRS is scrutinizing all these type of businesses because there have been loopholes in which for example a medical marijuana dispensary would set up a separate consulting division within their dispensary to consult patients on various types of marijuana that would be advisable, you know, for a particular ailment.

And so by doing so they would justify writing off that pro-rata portion of the rent and all the overhead expenses. And so the IRS is really cracking down on this. The silver lining behind this though, at least the State of Colorado I know does allow normal operating expenses as tax deductions. So while you can’t take those write-offs, you know, at the federal level, you still have some benefit at the state level.

Matthew: Okay. So do you think there’s the prospect of cannabis as a medicine being something people individually put on their tax return and saying hey this is a tax deductible medical expense?

Matt: Well the federal government will disallow that because it’s illegal. Well there are still some questions regarding the tax deduct.. the personal tax deductibility of marijuana for medical purposes. But because it’s a Schedule I drug, you know, it’s likely that they’ll follow suit with how they’re viewing cannabis businesses from writing off operating expenses. But from a state perspective it would not be unreasonable to assume that if the state is allowing these type of deductions for a business, that they would also allow an individual to claim these type of medical expenses on their individual tax returns, you know, for their state income tax filing.

Matthew: Gosh that seems just crazy that, you know, unfair on how they’re treating cannabis businesses. Is there any other business out there that gets treated this unfairly in your mind?

Matt: It really comes down to, you know, being a Schedule I, you know, drug and you know when that changes tax laws will change and profitability will increase. And that’s in answer to the second part of your question, you know, how is it affecting profitability. Well essentially a business entity that is in this business that is touching the plant can conceivably pay more taxes. They can pay taxes even if they have a net loss. So you know it really is very challenging for these businesses.

Matthew: Now turning back to your report. It’s a big media report as I mentioned. What are some of the biggest benefits prospective customers would have in reading this report? What are their takeaways going to be? What are they going to learn?

Matthew: Well I think it really identifies certain trends that we’re seeing in those markets where marijuana is legally sold. And the takeaway would be like if you’re looking to invest in a state that is going to implement a marijuana program, you would you know have some insight as to what you could expect. We go to great lengths to identify the market size for the medical marijuana market. And by so doing we identify the different ailments and we come up with, you know, the potential market size and it’s very interesting, our observations, in terms of what we’re seeing that’s consistent among the states. And also, you know, we can look, we can clearly identify spending habits for medical marijuana users.

So you know while clear our model is not bulletproof and you know there’s definitely a broad range of assumptions that we make, but we believe that the analysis that we did in those states where marijuana is legally sold, provides a reasonable basis for our projections as well as the trajectory of, you know, when we think a different state will come on board. We expect once legalization occurs, we anticipate about a year before sales are actually transacted because it’s going to take about, as we all know, about you know that amount of time, maybe even a little longer to implement a program. However as time goes on we believe that best practices will be followed, and it will just make it that much easier for the new states that are coming on board to implement. So that actual timeframe could conceivably compress from a year plus to, you know, less than a year.

Matthew: And that is happening as you mentioned. I’ve talked to some state regulators, and they mentioned that other states are reaching out to them asking for advice, what’s worked, what hasn’t worked. So they iterate and they get better with each state coming online which is nice to hear. Now I understand that the Colorado tax figures just came out. Can you tell us a little bit about what those numbers said?

Matt: Well yeah so the interesting thing is that we are seeing, as we outline in our report, the medical marijuana is declining. Year over year is, I think it’s roughly negative, it’s decreased about one percent or so. And the recreational market is growing. It’s yet to be seen, you know, how everything’s going to play out. The number of patients also is declining, and so we believe that the recreational market is disrupting the medical market. And long term we believe that they’re just going to be one market. And now from a tax standpoint, you know, fell a little short I believe from expectations. That could be in partial because of an excess supply.

So because of the excess supply prices came down, and as a result of that, there’s less sales tax. Now bear in mind that’s about half of the revenues because if you make the assumption that about 50 percent of the retail sales come from edible products and 50 percent are from flower. It’s really the flower that has that exposure to the oversupply because for the most part the edible products and the infused products the price points pretty much stay consistent. So it’s that’s flower. And I think this is a lesson learned that for any state you really don’t want too much supply out there. While it’s nice to get these application fees from everybody, you know, longer term if there’s an oversupply, that’s going to continue to put pressure on pricing, and as a result of that we’ll see lower excise tax collections and we’ll see lower sales tax collections.

Matthew: It really is about finding that balance as a state too because you know a black market still exists for a lot of different reasons that people listening to the show may not really think about. So it’s like you want the price to be low enough where it gets rid of the largest bulk of the black market possible, but you don’t want it so low that they don’t make any tax revenue and you know don’t get any benefit from having legal cannabis from… that’s states’ perspective anyway.

Matt: Absolutely. And you know the interesting thing is there’s so many opportunities in this industry. It’s not all about the products that contain the THC. It’s the cannabinoids, you know, the industrial hemp, that’s another huge area that we will explore. And the non-THC products, it’s just amazing how the elder generation are now warming up to the idea of marijuana legalization. I can tell you I have a 87 year old aunt who suffers from chronic nerve pain. She’s tried everything possible. I convinced her to get a medical marijuana card in Arizona. She got one, and she tried different ointments and so forth and it’s really helping.

Matthew: Oh that’s great.

Matt: And you know I think that’s kind of the buzz around the retirement community.

Matthew: I bet. That’s some juicy information. Okay so you were just recently in Colorado. You’ve kind of done your tour around here, and what do you see that kind of excites you or looking ahead, how do you see the industry changing because it is moving so quickly. What are your general thoughts about where we are versus what’s coming in the next year or two?

Matt: Well you know clearly branding is very promising. There are many companies, not many, but there are a handful of companies that are really very appealing from a branding standpoint, and I believe, you know, they’re going to continue to expand and look at opportunities in other states via licensing deals. And I just think you know certain subsectors of this industry are either going to be irrelevant or insignificant, you know, at some point when laws change. Not every aspect of the ecosystem is sustainable, but there’s going to be a lot of changes I believe.

Matthew: We now can you give an example or two of what you mean might go extinct?

Matt: Well for example if you go to a dispensary, as you know they don’t… there’s limited banking capabilities so most just deal in hard cash. And as a result of that and because there’s so much cash on hand they have to hire armed guards. And the security costs are a lot more than they would have been otherwise if banking was permitted. So those type of companies I don’t believe will be needed to the extent that they are now when laws change.

Matthew: Yes, that’s a great point. That’s an excellent point. Well Matt as we close here, how can listeners learn more about you and find your report?

Matt: Well we are at… you can visit us at www.greenwaveadvisors.com. We just issued our State of Colorado report. It’s a one year anniversary. It’s a look at what we’ve seen, the first state with a dual market for one full year. So we look at the dynamics from the recreational market and the medical marijuana market and what patterns we’re seeing. And we do a real deep dive and we look at, you know, information across different counties within the state, different trends. And we hope that readers will find it of interest as they evaluate investment opportunities either within the State of Colorado or look to that as the bellwether for or best practices for other states, for investing in other states.

Matthew: Well that’s great. I really encourage readers to check out Matt’s website. He does bring a high level of knowledge as he mentioned from another industry and focuses that right on the cannabis industry. He’s really digging into a lot of information at a granular level that no one else is really doing right now. Matt, can you give out your URL one more time?

Matt: Sure it’s www.greenwaveadvisors.com. And I would like to also offer your listeners and your visitors to your website a 10 percent discount code off the price of the product and the coupon code is CANNAINSIDER.

Matthew: We always like that, thank you Matt. Well Matt thanks so much for being on CannaInsider today we really appreciate it.

Matt: No problem.

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. Have a suggestion for an awesome guest on www.cannainsider.com, simply send us an email at feedback at cannainsider.com. We would love to hear from you.

Growing Cannabis and Hemp from Seed Versus Clones with Ben Holmes

Ben Holmes - Centennial Seed

In this episode Ben Holmes of Centennial Seeds helps us understand the importance of cannabis and hemp seeds and where we are in terms of having a good seed stock. Ben also talks about why it is often preferable to grow cannabis from seed instead of growing clones from a mother plant.

*Guess What? You could be listening to this interview on your commute. Get the FREE iPhone app or Android App*

Key Takeaways:
[1:28] – Benefits of cloning
[3:17] – How to get better seed
[4:30] – Why taking too many cuttings from a mother plant causes issues
[6:56] – Ben explains what he grows from
[8:07] – Ben talks about exciting things going on in the seed industry
[9:54] – Ben talks about the hemp industry
[12:34] – What is autoflowering
[13:36] – Contact details for Centennial Seeds

Read Full Transcript

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

Ben Holmes is the owner of Centennial Seeds and is a s subject matter expert on cannabis and hemp in particular when it comes to seeds. Before talking with Ben I was caught up on the efficiency of growing only from clones for a lot of reasons, but as you’ll see growing from seed is something we should all know more about. Welcome to CannaInsider Ben.

Ben: Hi, thanks for having me.

Matthew: Ben to give listeners a sense of geography, can you tell us where you are today?

Ben: I’m in Lafayette, Colorado which is in East Boulder County.

Matthew: Now a lot of listeners out there don’t think much about seeds. Most cultivators today get a prize train of cannabis then have a mother plant. From that mother they then cut off little sections of that plant to create a whole new plant. Can you tell us first the benefits of cloning and then why it might be optimal to grow from seeds at time?

Ben: Well it all boils back to where the state of the cannabis seed industry at this point and over the last few decades and that is that there are sort of people operating, you know, I don’t want to say, slightly above the hobby level. You know, somewhere in a professional capacity they make seed, and they sell them into the market via the internet or what have you. A lot of those seeds are made quickly. They’re single generation crosses. It’s two parents that are unrelated that they find interesting. They make the cross. They write some ad copy, and then they release the seed.

So when it gets to the end buyer that person will germinate a dozen seeds, and you’ll get, you know, eight different types. You know it will be sort of short ones and tall ones and heavy yielders and scraggly plants. The point is that no one’s gone to the trouble of stabilizing those varieties or those seed types so that it forces the grower, the end user to rely on special plants. You get one good plant out of the packet, you save that plant and then you propagate. You cut it and cut it and cut it and clone it until it collapses, until it no longer is clonable. That’s kind of why people rely on clones.

Matthew: Okay. And what in your mind is a better way of doing it?

Ben: Well if the market would produce a stable seed that breeds true for a particular type and particular traits, those seeds can be reliable and a grower can expect when they put them in the ground for them all to product, you know, desirable plant types versus the variation we’re getting now.

Matthew: Okay so if someone’s looking to buy seed, is there any kind of diligence they can do to ensure they’re getting something better than most?

Ben: The industry is so immature there really isn’t… there’s not much to pick from. I mean you have to know your breeder, and you have to kind of ask the questions is this stable. Not just for things like gender where plants can switch from female to male in the middle of a grow, and that’s terrible for a seedless gardener, you know, that creates seeds. Stability just in a sense that you get uniformity across the individuals from seed.

Growing from seed versus growing from a cutting, the plant will always be more vigorous, all things being equal. And then that’s because you’ve brought a seed from, you know, this is billions of years of evolutions that’s created these things. They’re near perfect. I mean you take seeds that are completed on the plant, they pretty much all germinate and pretty much all turn into a plant. Nature’s really incredible that way. But we lack that uniformity and that reliability, and we really even lack metrics, you know, by which to compare these things. It’s sort of a fragmented market. There are hundreds of seed producers and really no dominant players, you know.

Matthew: Now can a mother plant become fatigued or injured over time if too many cuttings are taken?

Ben: Yes, and that’s another…it’s a function of the industry being very immature. And this is not, you know, this came out of dirt. This came out of nothing. This industry was out of the crawl spaces in the basements. So to learn aseptic technique where you clean your tools and you work on a clean surface, you clean the plant before you cut it. You clean the tool after you cut, before you cut another plant and everything is handled in gloves. It gives those plants a longer life span, the mother plants, because like you said every time you cut them, you introduce some biological insult be it a virus or a mold spore or a bacterium. You’re infecting the plant a little bit at a time. And over time the plant doesn’t have the normal resources in healthy outdoor soil that would allow it to build defenses for those, those disease, and eventually they just succumb and they die, yeah.

Matthew: Okay so a mother plant can start to look droopy or even diseased after a while. You mentioned the gloves and cleaning the scissors, but is there anything else we can do to ensure that you not introduce any kind of bacteria or foreign bodies to the mother plant?

Ben: The grow space has to be kept clean. You know a lot of these places are run, you know, they’re pretty messy. There’s a lot of opportunity for infection and cross infection of material. You can avoid clones from the community. You don’t want to take clones that come out of grow operating for instance because when they sell you their clones they’re really selling you their culls. They’re not selling you the best looking clones. They’re taking the last 12 that they really don’t think are going to do very well, and they take them out to the store and they sell them. It’s not geared to give you the best plant that they can produce. It’s not in their best interest.

And second a lot of those places have contantly overturned, perpetual, harvest-type grow rooms. Those rooms develop colonies of bugs that become super resistant to whatever measures are available to you through the retail channels in terms of pest control. So you’re really introducing bugs into your room and into your situation when you bring clones from other people’s gardens that you’re not in direct control of. It’s just a risk.

Matthew: Do you pretty much only grow from seed done yourself personally or do you also sometimes grow from a cutting?

Ben: Once in a while something comes along where there’s no opportunity to grow it from seed. A good example would be the Harlequin CBD line which is a high CBD, low THC cultivar that’s grown for a CBD extraction. It’s a clone only. It’s never been released in seed form that I know of, and I wanted to at least have the opportunity to outcross some of my material to it. So somebody gave me a clone, and I set it in a room by itself, put up some sticky traps and watered it really heavily to see if I could drive any bugs out of the soil, any fungus gnats. And then you take leaves and you go under the scope and make sure that they’re clean, that there’s no mites or any kind of thrippy looking bug, eggs. And you know you have to sort of quarantine these plants when you bring them in. Once they’re inside your room and they’re clean and you’re using aseptic technique and you’re making clean cuttings, it’s you know, then it’s inside your system and you can deal with it. But it’s just bringing that material in for the first time I think is risky.

Matthew: What do you think is the most exciting thing going on in the world of seeds right now?

Ben: I would have to say the Cannabis Genomic Research Initiative out of the University of Colorado at Boulder. That’s being administered and investigated by the Kane Laboratory. It’s Nolan Kane and Daniela Vergara. And that bit of science, most people roll their eyes. So if they don’t do it outwardly, at least, you know, sort they shy away from it because it really isn’t something that people understand, but I can tell you that the tools and the resources that are developed as a result of mapping the genome of cannabis are going to be commonwealth technologies that any company or any innovator can utilize to make better stuff, better pest control, better pest resistance, better yields. All of the things that we want, all of the characteristics that we want are traits that can be identified and screened for. And we’re not talking about genomic engineering or GMO work.

We’re talking about just very very precise technology assisted selections just like using an instrument to measure THC. You can look at their genes and decide whether or not they have more or less of the gene for expression of THC synthase. They may have a very large amount of that and it’s visible in a assay that can be done at a very young stage, maybe from the seedling stage. So the technology is so far beyond where we are right now, but it yields so many benefits to us. I would urge anybody out there to find it and support the heck out of it.

Matthew: Now switching gears to hemp, you’re really involved in a young but growing hemp industry here in Colorado. What do you see is the biggest problems and opportunities surrounding hemp right now?

Ben: Well the regulatory environment is the best in the country. I’ve read the programs from the other states and Kentucky and Tennessee and so on and so forth, even Florida has some CBD-ish kind of hemp-ish type law. And the platform is very simple. The rules are very reasonable. We have light bright lines in terms of what we can and can’t do, and it really revolves around concentration of tetrahydra delta-9 THC in the plant material. And as long as you work around that bright line it’s really, it’s a wonderful platform to watch be developed. But what’s missing right now is reliable seed. It’s the same as on the drug resin side. It’s just a lack of a reliable seed supply.

You know, this has been held under water for more than 75 years. In 1937 it went prohibited. And just now are we allowed to begin to play with it and study it and work with it, innovate with it. The seed supply has just been completely abolished. It’s gone. Whatever the USDA held in their sessions in lost to time, poorly stored, what have you, it’s seed. The biggest problem we face is without a doubt seed. Having said that, it’s also for me the biggest opportunity. It’s what I see that I can do to contribute. So I see it as both a hindrance and an opportunity.

Matthew: Now you test hemp in your lab. Does anything surprise you in your findings of samples that are sent to you?

Ben: Not really. I’m probably testing a dozen different varieties in a week’s time. You know people bring me samples of things they are growing, and I see a lot of the same material, and that’s just because of the limited amount of seed. In some ways that limited amount of seed you know that it went to people who are going to utilize it, you know, it’s put to use because they paid big premiums for it in most cases and some people went to great lengths to smuggle it or whatever they had to do to get it here. I don’t judge. But it’s clear that people are putting that seed down, and they’re trying to make more seeds. So we’ll see after this season how people do and how people are able to work around the embargo on seed and maybe bring in more material to the state. This novel material is really what we need. It’s not that we need a supplier in Ukraine or Canada to ship us seed. That’s not what we want to be is reliant. We want to be self-sufficient in terms of the industry and make our own.

Matthew: Now for people that are not familiar with the term autoflowering, you see that term thrown around a lot when it comes to seed, can you describe what that means?

Ben: Yeah. It’s a short day crop which means it will flower when the days reach a certain length. Going down from the longest day on June 21st, the day length will shorten all the way down to September 21st when the days are equal and it will lose about two or three minutes a day let’s say. So at some point around the first week of August in our latitude that’s the trigger length of day and the plants will begin to flower. So autoflowers come from material that was bred up in the Arctic Circle way up there, you know, Finland, really really high latitudes where the days are super long in the summer so they would never get that signal of a short day to begin flowering. So it does flower regardless of the day you put them down and then 45 days later you harvest them regardless of the time of year. Obviously you can’t grow in the winter, but it’s irrespective of the length of the day, it will flower.

Matthew: What an amazing adaptation that is.

Ben: Yeah.

Matthew: Great. Well Ben in closing how can listeners learn more about Centennial Seeds?

Ben: Oh you can go to my website. It’s www.centennialseeds.com. I maintain a blog. I write a lot of tech pieces and just sort of help pieces. And you know I encourage people to just check it out and see what it is that we do.

Matthew: Cool, well Ben thanks for being on CannaInsider today.

Ben: All right thanks for having me.

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

Cannabis Kills Cancer Cells – Molecular Biologist Cristina Sánchez PhD

Cristina Sánchez PhD

Cristina Sánchez is a molecular biologist from Complutense University in Madrid Spain.  She has been studying cannabis for fifteen years and has discovered that cannabis sends a message to cancer cells to commit suicide.

*Guess What? You could be listening to this interview on your commute. Get the FREE iPhone app or Android App*

Key Takeaways:

[1:39] – How long has Cristina been researching cannabinoids
[2:13] – Cristina explains how cancer cells die when exposed to THC
[3:10] – How chemotherapy is different in treating cancer
[4:51] – How long it takes cannabis to kill cancer
[5:53] – What’s the cannabinoid profile being exposed to the cancer cells
[9:19] – Would you advise a friend with cancer to take cannabis for treatment
[13:02] – Cristina shares her thoughts on CBD
[14:17] – Cristina talks about cancer cell death
[15:11] – Are pharmaceutical companies interested in Cristina’s research
[16:39] – How is cannabis treated by the government of Spain
[18:03] – Learn more about Cristina’s research

Disclaimer: The information provided about cannabis is for informational purposes only. Please consult your physician before making any medical decisions. The opinion of the guest are purely her own and do not reflect the opinion of CannaInsider or Matthew Kind.

Read Full Transcript

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

Cristina Sanchez is a molecular biologist from Complutense University in Madrid, Spain. She has been studying cannabinoids for more than ten years. Her research includes findings that THC induces cancer cells to kill themselves while leaving healthy cells alive and undisturbed. Cristina, welcome to CannaInsider.

Cristina: Thank you very much Matt.

Matthew: Can you tell us where you are today in the world just so listeners get a sense of where you are and where you study?

Cristina: Well I’m a biologist, and I’m currently study the anti-tumor potential of cannabinoids of marijuana derive cannabinoids.

Matthew: Okay and you’re in Madrid right now?

Cristina: Yes I’m in Madrid. I’m based in Madrid, and I perform my work, my research at Complutense University as you very well said.

Matthew: Okay great. And so you’ve been doing this for a while now. Is it more than ten years or ten years is it?

Cristina: It’s been actually around 15 years already. We study, yeah we started with this study at the late 1990s, and we published our first paper regarding this issue in 1998. So we’re talking about more than 15 years already, yes.

Matthew: Wow, and so there’s a variety of ways that cancer cells can die, but you noticed a particular way that they die when they’re exposed to cannabis or THC. Can you tell us a little bit about that.

Cristina: Well yes as you said cells, not only cancer cells, but every cell in our body can die in different ways. One could be similar to an accident, a car accident, a traumatic death which is called necrosis. And there is another way to die which is a clean death and by clean I mean no inflammation of the surrounding tissues. And this cancer cell death is called Apoptosis. And when someone’s dealing with anti-tumor compounds, one wants this particular kind of death to happen because the other one is associated to inflammatory processes and things like that that you don’t want in a patient.

Matthew: Right, and so can you talk about how chemotherapy is different in treating cancer?

Cristina: Well it’s completely different because chemotherapy attacks every single cell in our body that is undergoing proliferation. Every cell that is dividing will be attacked by chemotherapy. And which cells are dividing in our body? First cancer cells of course, those are the ones you want to kill, but also the cells of your immune system, the cells of your stomach and a lot of tissues. So that’s why chemotherapy is so toxic because it’s not only attacking cancer cells but other cells that are proliferating inside our bodies. And the difference with cannabinoids is that these compounds only attacked cancer cells. We don’t understand why yet in molecular terms. We don’t know what makes a cancer cell different in terms of the sensitivity to cannabinoids, but we know that this is a fact. Cannabinoids kills cancer cells and they do not affect the viability of non-cancer cells.

Matthew: Gosh this is incredible research you’re doing. This is so needed. So chemotherapy is like a bomb that just kills everything, and THC—from your research—sounds like a sniper that just kills the cancer cells which is exactly what we want, and it caused no inflammation or no kind of problems. It just kills the cancer cells and that’s it. Now how long does it typically take? How many treatments or exposures to THC before the cancer cells decide to kill themselves?

Cristina: It depends on the model of cancer we are using. When we treat cancer cells grown in plastic plates we add cannabinoids just once, and cancer cells die in one day, two days.

Matthew: Oh my gosh.

Cristina: But this is cancer cells culture in plastic plates not in an animal or not of course in a human body. When we use animal models of cancer, we treat the animals every 2 days for 15 days, 3 weeks, and we start to see effects basically from week one, but we have to treat the animals 3 times a week, 4 times a week. It’s not just one single injection.

Matthew: Wow this is incredible research. Now the, you say cannabinoids, but is it pure THC or what’s the cannabinoid profile you’re exposing to the cancer cells?

Cristina: Okay. We have used many different compounds, a few compounds. Cannabinoids is extracted from the plant. We have used many different tools, and our hands, cancer cells respond basically the same way to cannabinoids either if they are fewer compounds or if they come from the plant and they’re accompanied by other compounds.

Matthew: Right. I’m sure you’ve heard of the entourage effect in that the cannabis plant works best when the cannabinoid profile has some sort of complete structure with diverse cannabinoids in there. Do you think that doesn’t really matter so much, just any kind of cannabinoid or do you think one that’s from a full plant works best?

Cristina: We have tried them both pure and extracted from the plants, and we see slightly better effects when we use a botanical extract, isolations from the plant that are accompanied by other cannabinoids and terpenes where we have the entourage effect that you mentioned. But for cancer patients I think we should find the precise combination of cannabinoids that work best for each individual patient. We are testing now in the lab different cannabinoid combinations. We are combining THC with CBD in different proportions, and we think that for each individual patient a specific cannabinoid combination would work best. So our work is to find that combination for every patient.

Matthew: Okay. And now there’s a lot of different kinds of cancer. What do you think, is there certain kind of cancers that are most receptive to this cannabinoid treatment?

Cristina: I don’t have an answer for that question. We and not only our group but many others in the world are taking this anti-tumor potential of cannabinoids, and as far as I know basically every cancer model that has been tested is responsive to cannabinoids in one degree or another. In our hands I would say that those cancers that are characterized by more proliferation are the ones that are most sensitive to cannabinoids, but as I said I’m not aware of any single cancer type that has not responded to cannabinoids. So apparently cancer cells have something different from non-cancer cells that make them sensitive to cannabinoids.

Matthew: Now there’s a lot of people listening that may be suffering from cancer or they have a friend or family member that is suffering from cancer. And in certain states, the state I’m in and California and others, you can find cannabis oil and cannabis extracts. I know you can’t really advise patients over a show like we’re talking about here, but let’s say that you were talking to a friend or someone and said hey look just take as much cannabis oil as you can and that should help with your tumor, is that what you would advise?

Cristina: Well we don’t know if cannabinoids can help cancer patients in terms of the anti-tumor potential. We know and we are very sure of that that these compounds work very very well in the animal models we have used. Unfortunately there are no serious control studies performed so far in human patients. I hope these compounds can be used with them as well, but as far as I know and I’m pretty updated in this issue, there are no human studies that can allow me to say that. So what would I say to a friend or what would I say even to me if I am diagnosed with cancer tomorrow? What I would say is this is the pre-clinical information we have, and I would stress out the word pre-clinical meaning that there’s no information on human patients yet, but on the other hand these compounds are very safe. So basically you have nothing to lose. The worst that can happen to you is that the cannabinoids do nothing to your tumor, and you would probably feel better because the effects are exegetic and appetite stimulating effects and all these things that cannabinoids do.

But in terms of the anti-tumor response, no, we don’t know if they work in human patients. We hope they do, and we are working very hard to provide pre-clinical evidence to the doctors and the medical community to make them check these compounds in human patients, but we don’t have that answer yet. So again if it was me the one with cancer I would probably try the compounds. Knowing that they have not been tested in humans for this purpose, but also knowing that they are very safe. If you are not a teenager or if you don’t have psychiatric disorders, these compounds are very safe. So basically you have nothing to lose.

Matthew: Right so that’s a great point. We don’t have any evidence for human trials yet. But for people listening who are trying to get a sense like what would a minimum effective dose mean? So let’s say you have a tumor that’s the size of your thumb somewhere in your body, how much cannabis oil would even be enough before they say that’s enough, that’s the treatment. The amount you’re taking is enough. Like what would be the minimum effective dose in your mind? I know you’re not suggesting people do this.

Cristina: We have no idea.

Matthew: Okay so maybe just a lot.

Cristina: We have no idea. We have no idea because we don’t work with human patients. We just work with animals, and we cannot compare does between mice and humans. That’s basically impossible to do. What I would say is take as much as you can. And as much as you can means stop increasing the dose or stop taking cannabis as soon as you feel something that you don’t like. But as far as those side effects don’t appear, I mean take as much as you can because we don’t know the dose that is needed for this anti-tumor responses to accure, if they ever accure.

Matthew: Now let’s talk a little bit about CBD. We talked about THC, we talk about cannabinoids in general, but in your research what are your thoughts about CBD?

Cristina: Well we are big fans of CBD because we have used these compounds in the lab and at least in breast cancer which is the type of cancer I work in. CBD is as effective as THC in killing cancer cells. And it has the advantage of not producing side effects which in the eyes of the doctors at least is very good news. It is in fact good news because the lack psychoactivity allows you to use higher amounts of cannabinoids. So this is also good news. But as I said, in our hands in cancer cells grown in plastic plates, in our animal models of cancer, CBC is as effective as THC.

Matthew: Really, wow. And so you focus almost entirely on breast cancer, and from what you’re saying CBC is just as good. That’s incredible.

Cristina: Yes.

Matthew: So we don’t know how the CBD or cannabinoids or THC are killing the cancer cells, but we know they’re dying. Is that accurate?

Cristina: Not really. We have a lot of information about the molecular mechanism that produces cancer cell death. We know, actually that’s what we do now in the lab. We have been analyzing what is going on inside the cells, inside the cancer cell when it is exposed to cannabinoids, and we know that cannabinoids bind to cannabinoid receptors in the membrane of the cancer cells, and we know the complexity of the molecular signal that is occurring inside the cells. We have a lot of information about that. So I wouldn’t say that we don’t know how cancer cell death is produced. I wouldn’t say so.

Matthew: Now is there pharmaceutical companies or the government or different parties coming to you and saying hey we want to create medications for this. Is that happening in Spain and Europe?

Cristina: Well it has happened in fact in the past. GW Pharmaceuticals.

Matthew: Sure, sure, yes.

Cristina: You know who these guys are. They were financing our research for many, many years, and they are now trying to perform clinical trials on the analyzing the effect of this compound in combination with chemotherapy that is given to glioblastoma patients, to brain tumor patients. So this is the only contact we have had with pharmaceutical companies, and we would like them to be faster in their movement toward the clinics because we think that we are wasting precious time and we deserve that, I mean, we have to dedicate our time to patients. So we are trying to force them to perform more clinical trials because we think that the clinical evidence we have so far is more than enough to move to the clinics.

Matthew: It’s incredible because there’s many doctors, I would say most doctors if you’re in the United States, have no understanding, zero understanding of how cannabis could be a legitimate medicine for cancer patients. So here in the United States cannabis is a Schedule I drug. We can’t even use it for medical research. How is cannabis treated by the government of Spain?

Cristina: Well it’s a funny situation because we are allowed to perform research with cannabinoids. There is no problem at all in doing research focused on cannabinoids, but medicinal cannabis is not in the agenda of our politicians at all. And in fact they are very against these global movement around the world pushing towards legalization of medicinal cannabis. So we have general elections pretty soon, and we hope that the new government will change a little bit because what is funny is that the basic research community focused on cannabinoids is huge in Spain. We have a Spanish cannabinoid research society with more than 200 members, and it is probably one of the biggest in Europe, and there are a lot of groups, not only ours, but a lot of groups doing very good for clinical research and a lot of them on medicinal uses of cannabinoids. But for reasons that I really don’t get medicinal cannabis is not a question even for our politicians.

Matthew: Well how can listeners learn more about your research you’re doing there?

Cristina: Well we publish our papers in the regular scientific journals. So in websites like PubMed which is an NIH resource, public resource. You can find our publications. We have a small and pretty humble website, our group, where you can also find our publications and the things we do. And that’s basically it.

Matthew: Can you give out your website for people that want to visit?

Cristina: Actually it’s a very complicated name. But if they find my name Cristina Sanchez with no “H” and Cristina in cannabinoids, they will find the website very easily.

Matthew: Very good. Well Cristina thank you so much for being on CannaInsider today and educating us. We appreciate it.

Cristina: Thank you very much for your invitation, thank 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. Have a suggestion for an awesome guest on www.cannainsider.com, simply send us an email at feedback at cannainsider.com. We would love to hear from you.

Automating your Cannabis Trim Process with GreenBroz

GreenBroz Machine

Up until very recently machines that automated the cannabis trimming process were awful.

They were not designed well, they produced cone-shaped buds and they would get gummed up with resin easily. The GreenBroz automated machine just works. It is quiet, fast and treats you buds extremely gently.

——————————————————————————————————–
A very special thank you to Dylan and his team at KaringKind.com in Boulder, CO for welcoming Matthew Kind into their grow to see how they use the GreenBroz Machine
——————————————————————————————————–

Learn why growers and business owners both love the GreenBroz machine

Interview with Cullen Raichart of GreenBroz.
Learn more at:  http://www.greenbroz.com

*Guess What? You could be listening to this interview on your commute. Get the FREE iPhone app or Android App*

Key Takeaways:
[1:00] – What is GreenBroz
[2:03] – Cullen talks about by other trimming machines don’t work optimally
[4:50] – How does GreenBroz avoid cone-shaped buds in the trimming process
[10:45] – What is ROI on the machine
[13:16] – Cullen talks about how to clean the machine
[14:55] – Costs of the machines
[16:12] – Ease of getting leaves for concentrates
[17:32] – What are the sizes of the machines
[20:26] – Contact details for GreenBroz

 

Read Full Transcript

Matthew: Hi, I’m Matthew Kind. Every Monday and Wednesday look for a fresh new episode where I’ll take you behind the scenes and interview the insiders that are shaping the rapidly evolving cannabis industry. Learn more at www.cannainsider.com. That’s www.cannainsider.com. Are you looking for a fulfilling and lucrative career in the cannabis industry? Visit www.cannainsider.com/careers. That’s www.cannainsider.com/careers. Now here’s your program.

As the cannabis industry grows cultivators are looking for better ways to automate harvest while still maintaining high quality premium plants. Today’s guest Cullen Raichart, co-founder of GreenBroz has created a machine that greatly reduces the time it takes to trim a cannabis plant. Welcome to CannaInsider Cullen.

Cullen: Matt, thank you so much for having me.

Matthew: Can you give us an idea of what GreenBroz is at a high level?

Cullen: GreenBroz is, we’re kind of an up and comer in this business, and we came across a different idea when we approached the trimming question and that is we decided to look at it as how can we do an excellent trim job more rapidly and efficiently than human beings. And that’s the impetus for our machine was. So we’re a complete manufacturing company. We make more than one product, but our flagship is definitely our trimmer.

Matthew: Okay. And where do you see other machines falling short? Because I wouldn’t get into that, but there’s a lot of sourness in the community from machines that tried in the past to help with trimming, but did a poor job on execution. And to be honest I was a little skeptical when I heard about GreenBroz, but then people started telling me how cool it was and how well it worked. I went out and saw it, and it’s really I’ve come around. But can you just describe what the other… the machines that doesn’t work optimally, why don’t they?

Cullen: Sure. Well there’s basically one other design of machine as far as dry trimmers go, and those machines are tumblers. They look like a dryer. They sit on their side, and you fill them full of product and they tumble, and your very delicate and expensive product tumbles over and over and breaks down and knocks off all the crystals and so forth. That’s basically the difference, the design of their machines. I think they really came at it differently. They looked at volume as being the problem, and while trimming volume is definitely something you need to address, again we looked at it differently.

We decided to approach it from the perspective of I mean how do you really automate detailed work. How do you automate that kind of attention to quality, and that’s what the impetus about the blade design, the whole design of the machine is about gentleness, the way that the material is put in, the way the material comes out, the amount of contact it has with the blade, the amount of time that the amount of the movement that the product has over the blade’s surface. All these things were considered because it is really about taking a very delicate product and valuable product and treating it as if you would… as you would treat it with your hand.

Matthew: Now I want to give a shout out to Dylan of Karing Kind a dispensary in Boulder. He was kind enough to let me in and show me how he used his two GreenBroz trimming machines. And I have a little video I took with my phone and some pictures that I will put on this post on the website of www.cannainsider.com. But I was amazed by a few things. One, you know, whenever an employee gets replaced by a machine it can be an uncomfortable thing, but I noticed the employees really enjoyed the machine. They don’t see it as a threat. They see it as something that helps them, and it really does help them. Two, it’s very quiet and fast. I didn’t realize that it was going to be so quiet and so fast. I was picturing something else. Now the cannabis cultivators in the past did not like how the machines made their buds cone shaped. They’d nurture this plant for 60 or 70 days, let’s say. They watch it grow these beautiful buds. They cut it and they cure it, and then they watch some machine take the bud and turn it into a cone shape in front of their eyes and it drives them crazy. What’s happening with these other machines that create the cone shaped buds, and how does GreenBroz avoid that?

Cullen: Well first thank you so much for calling out Dylan. Dylan has been just a great supporter. We really like those guys at Karing Kind. And I’m really glad you had the opportunity to go and see it. It’s such an important thing to see it. As you know, the industry and the machines have such a bad reputation that it really takes that moment, and when you see it it changes everything. It really changes your perspective on how the whole process is handled. And the reason that our machine doesn’t make consistent pine cone, as we call them, out of your product is quite simply there’s not a consistent form to the way that the product moves over the blade.

The blades are in a swept design so that… and the blade spacing is designed such that there’s not a lot of the product that gets into any one blade surface at a time. It’s like very small scissor cuts instead of if you look at the blade designs of the other machines, the tumbling machines, you’ll see that they’re very large openings and they’re very square, and square blades rolling around in a drum, make pine cones. So our blade designs gives the product the opportunity to hit every possible angle onto a blade surface and have the least removed. The distance between the top blade and the bottom blade is such that no bud material gets into that bottom blade surface.

And as far as people and, you know, automation its role in any business, the role of automation is to alleviate the tedious and time consuming task and make people more efficient. Give employers the opportunity to keep good employees on and give them better wages while getting productivity where they need to have it. Let’s face it, in this industry when you’re… if you’re not a producer who has a distribution point, your spending 10% to 20% of your final cost on trimming, and that’s just not a functional model. So what we’ve done with this machine is give you the opportunity to work inside the machine as it’s running, to work with the machine at whatever level you really want to.

So you can take a good quality employee and someone who cares about your business, cares about your product, and give them the opportunity to work on a machine and become a 1000 times more efficient. It’d take a single person in a day trimming and they trim, you know, a pound let’s say, which is probably pretty average, and then you put them on my machine, on the small machine and they can trim 16 to 30 pounds in that same timeframe and get the same quality. And that’s what’s really amazing about it is it gives you the opportunity to produce a very, very high quality product in a very short period of time. And we got lucky, to be honest with you, with the speed of the trimming on it because again we were focused on quality, it just happens to work really fast.

Matthew: Yeah. Now let’s walk through some scenarios here and some math for a dispensary owner or anybody that’s interested. So I’ve cured my plants for two to three weeks. They’re dry, and I’m ready to trim. Now you were saying that, you know, from a productivity point of view, let’s just say someone’s who’s trimming could do a pound and you’re saying with the machine they could do 16 pounds. Is that a pretty average or is that pretty normal what you see when someone purchases a machine?

Cullen: Yeah that’s right. That’s on the low end of the production scale for the small machine, but it’s very consistent, you know, that machine will consistently produce at that level. And one person can drive that machine all day long. Because of the, you know, trimming being so detailed and tedious, it’s very common that people while trimming trim very very well for the first couple of hours and then their productivity diminishes and their quality diminishes over time. The machine produces at a consistent rate from the beginning of the day to the end of the day. And you can use… a person can use a machine by letting the machine do all of the work or part of the work, or you know, any kind of amalgam there between those two things, you have a lot of freedom with it. The other machines on the market you don’t have the option to be inside it and look and see what’s going on. With this machine you’re right there. It’s right in front of you. You can stop the machine. You can unload it. You can reload it. You can do whatever you want to with it. It’s just very gentle and like you said, quiet. It’s unbelievably quiet.

Matthew: Yeah so there’s a couple benefits here to the automation in terms of you’re reducing theft risk by having less people as well because during the trim process is when a large amount of theft occurs, and I’m not saying, you know, some trimmers just don’t I guess have some integrity or whatever the situation is, but you know when you take down the number of trimmers you have you’re going to have less theft. Also I mean a trim job is typically greater than minimum wage. So this is a tremendous cost savings over time. What’s kind of the payback you typically see where they break even on the machine after they’ve invested in it?

Cullen: Well you know it’s probably dependent on how reliant the customer is on the machine. But if you look at, if you take for instance the average of about $200 per pound, and that’s a California kind of guessimation right there, but if you’re looking at $15 an hour and 8 hours a day, you’re looking at about yeah, $200 a day for that same pound. So say roughly $150 to $200 per pound for a human to trim cannabis. And then you use our machine, the machine does… if it runs at full capacity and gets its 30 pounds per day in that same timeframe, it’s paid for itself in an 8 hour shift. So you definitely have the potential to pay it off in the first day you own it, but most guys will have it definitely paid off within the first week or first full harvest that they run with the machine.

Matthew: Yeah those type of economics really are tough to argue with.

Cullen: It’s pretty astounding, Matt, when you think about it. I grew up in an industry where we bought a $750,000 piece of equipment to better our business, and you know that’s a lot of machine. That’s a lot of work you have to do to feed that machine, and then that machine has to produce above and beyond that so that you make profit. So when I looked at this machine, you know one of the biggest things about it was quality. You know, we have to have quality. We have to have reliability. You have to have consistency because a down machine, you know, ruins everything. And then the other thing is like return on investment because I watched my parents struggle with the cost of a big huge printing press, and I don’t want to put people in that situation. And we might be on the other side of that as far as return on investment, I don’t think you’ll find anything, any piece of equipment that produces at this level that returns that quickly. But, you know, it is what it is and we think the value point is right.

Matthew: Now what about cleaning the machine because as we know if you’re wearing rubber gloves for example and you are doing trimming by hand, you get the oil all over the gloves and the scissors and everything, the resin. So what do you do, how do you clean the machine? How often does it need to be cleaned? Does it get gummed up pretty regularly? How does that work?

Cullen: Well that’s another beautiful thing about trimming dry. You know once you’ve properly dried the product, it reduces that really tackiness to it. It still has, you know, the stickiness in the tricomes but you have to squeeze the bud a little bit to get that stickiness. So we’re not putting any real pressure on the bud so you don’t get a lot of stick into the machine itself. So we have guys that trim and they’ll trim all day and they’ll not clean the machine. And we have guys that will clean the machine once in the middle of the day and then we have one customer who doesn’t clean the machine. He’s had it for four months and he’s never cleaned it.

So yeah that’s kind of amazing to me, but that’s the nature of it. I mean you know, with a dry trimmer and the lack of… we don’t have a downward pressure. We don’t mash the products and we’re not really taking any of the, you know, we’re not putting any pressure onto the tricomes so we’re not causing any of that stickiness. So you will get some build up, and if your product isn’t properly dry, you can get some leaves that smash between the two blade surfaces and you get some streaking, and that’s when you have to you know, pull the machine apart and you just take the top blade out and put a little light coat of oil on it and scrape it with a razor blade, and then put it back together. The little machine takes about 5 to 10 minutes depending on how deep of clean you want to put on it, and then a large machine takes 10 to 15 minutes depending again how detailed you want to be.

Matthew: And how much do the different machines, different sizes cost for each machine?

Cullen: So the MSRP on the small machine is $5,250 and the large machine, I think, on the MSRP is at $10,500. I apologize. We just updated this year so I don’t have that off the top of my head.

Matthew: So how much thru-put can go through the small machine versus the large one?

Cullen: So the small machine is 16 to 30 pounds in a day. And then the large machine does 8 to 10 pounds in an hour or I should say 8 to 12 pounds in an hour. We’ve had that machine, it’s really dependent on product preparation. So if your product is properly dry it trims it so fast it’s kind of unbelievable how quick it operates, and then again so gentle. If you’re getting 10 pounds out of it, you’re getting 80 pounds a day, and if you’re getting 12, you’re getting 100 so it’s pretty good.

Matthew: And so all these precious leaves that now can be extracted into concentrates, there’s an easy way to get it. Either you just pull open a drawer at the bottom of the machine essentially and it’s all there.

Cullen: That’s right. So the small machine was designed actually with another product of ours in mind which is a dry/sift tumbler. That machine was designed to sit on top of that product, and it still does. What we found though was that people loved that machine and they do a lot of different things with their trim which is great. So we made that machine pretty much the right size. It can sit on its stand. It can sit on our tumbler. It can sit on a tote. It can sit on a trashcan with a trash liner, and basically all the trim just falls directly below it. There’s no vacuum. There’s no pressure. There’s no anything. It’s just a gravity feed as it falls right down into the next place where you can do whatever you want to with it.

Interesting note about that. We’re finding and actually doing some work with a couple of the big CO2 companies in regard to the actual size, the particle size. The trim is so fine and so perfect it makes really really good extraction trim if you will. So we’re looking at that and looking with some big partners to see if they’ll recommend it for that purpose alone.

Matthew: That’s a good idea. Now for people that are trying to visualize how big these machines are, can you give them some context there?

Cullen: Sure so the small machine is a desktop machine. If you figure a large… well they’re smaller now, but they used to be your scanner/copier/fax machine was a pretty good size piece of equipment, but it sat on your desk so it wasn’t huge. So you’re looking at about 16 inches wide and 20 inches deep. And so it’s pretty portable. It’s easy to carry. Easy one person lift. The larger machine, the commercial machine is 34X37 inches and comes on its own stand with wheels, and has locking casters on it so you can put it in a place and lock it down. The stand on the big machine has a couple of options with it. You can just put a 35 gallon bag up underneath it. It has a rail for the bag to attach where you can put a tote under it, whatever you want to do.

We’re always thinking about how to make it easy, you know, machines should be simple. And that’s what we tried to make is simple and easy and efficient. So we’re always looking at adding little bits of simplicity to help our customers work more efficiently.

Matthew: Now what would you say to the purists out there, you know, they only hand trim under moonlight with the classical music playing, and they can’t you know, even think about the idea of allowing their precious flower into a machine? How do you get them to think about this a different way?

Cullen: Well it’s an economic consideration right. I really appreciate first of all people who take that time, the diligence and the time to look at it from that perspective. And you’ll always have people who are artisans and an artisan can do a much better job on an individual basis, but that’s limited. Not very many people can trim at that level, and especially trim crews. They don’t perform at that level consistently throughout the day, but my machine does. And if you look at, we do have some lab results online, coming up online that show that our machine, actually the THC content for hand trim versus our machine comes out higher from our machine. So that’s been… that’s only a couple of lab tests, and it’s by and independent person who purchased one of our machines and decided to prove whether or not it was as gentle as hand trimming and he proved it twice with two different products. So it was pretty exciting for us to look at it and see an actual difference in our favor as far as you know, THC content after trim.

Matthew: Now Cullen in closing how can listeners see your machine in action and learn more about GreenBroz?

Cullen: Well you can always go to our website at www.greenbroz.com. It’s a great portal. We have some video coming up online and there’s information there of course. There’s some videos out there you can find on YouTube as well. We just finished up a great demo video that’s going to get posted here shortly. You know the real powerful moment is when you see it, and videos are great, but they don’t tell a story as well as being in person. So we do have representatives in Colorado, California, Washington, Oregon who can come out and do demos and show people how the machine works, specifically on their product and in their environment. So our model, our business model right now is a direct sale model with supporting our sales people in the different states, and then we also have some retail locations who carry our product.

Matthew: Okay. Well Cullen thanks so much for being on CannaInsider today and educating us. We really appreciate it.

Cullen: Well Matt thanks so much for having us and it’s just such a pleasure to actually see how big this business has become and then neat people like you that are out here spreading the word and then bringing companies like ours out to the forefront. So thank you so much.

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Cheryl Shuman is the Cannabis Queen of Beverly Hills

Cheryl Shuman

Cheryl Shuman beat cancer with the help of cannabis and went on to become the founder of the Beverly Hills Cannabis Club and a media darling.

*Guess What? You could be listening to this interview on your commute. Get the FREE iPhone app or Android App*

Key Takeaways:

[1:13] – Cheryl’s background
[2:39] – Cheryl talks about how cannabis oil helped her fight against cancer
[4:59] – How did the eating and meditation play a role in Cheryl’s recovery
[11:12] – Overview of California’s cannabis laws
[17:02] – Cheryl discusses her growing preferences
[18:07] – Cheryl discusses how celebrities feel about cannabis
[21:01] – Cheryl talks about her fund for investing in cannabis businesses
[26:46] – Cheryl discusses cannabis stocks
[28:07] – Cheryl talks about her appearance on CNBC’s Power Lunch
[29:54] – What is the Super Pac
[31:21] – Cheryl discussing what can’t be said in a sound bite
[35:34] – Cheryl’s contact info