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Ep 275 – Canopy Rivers CEO Reveals the Hottest Segments in Cannabis

narbe alexandrian canopy rivers

By making investments in other companies, large cannabis brands are attempting to capture exponential growth within specific corners of the marketplace.

This not only works to increase ROI for investors, but it also provides these companies the chance to form strategic partnerships with rising startups ahead of the curve.

Here to tell us all about this is Narbé Alexandrian of Canopy Rivers, a cannabis venture capital firm and the $1 billion investment arm of the largest cannabis company in the world, Canopy Growth.

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

Key Takeaways:

  • Narbé’s background in cannabis and how he became CEO of Canopy Rivers
  • An inside look at Canopy Rivers and how it works to identify strategic partnerships with Canopy Growth’s large portfolio of companies
  • Vertical integration and why Narbé doesn’t believe in it
  • A breakdown of the thirteen segments Narbé has identified in the cannabis value chain and which ones he predicts will be most profitable
  • Narbé’s advice on the do’s and don’ts for entrepreneurs looking to pitch to investors
  • Narbé’s investment philosophy and what he takes into consideration when deciding where to invest
  • A deep dive into some of Narbé’s biggest investments to date, including PharmHouse and Headset Inc.
  • Narbé’s shocking insight on the falling prices of products including dry flower, isolates, and extracts
  • Where Narbé sees the industry heading over the next few years
Read Full Transcript

Mathew: Hi, I'm Matthew Kind. Every Monday, look for a fresh new episode where I'll take you behind the scenes and interview the insiders that are shaping the rapidly evolving cannabis industry. Learn more at cannainsider.com that's cannainsider.com. Now here's your program. Some large cannabis companies are making investments in other companies to help capture the exponential growth of some corners of the marketplace. This has the effect of potentially increasing returns for investors but also allowing for strategic partnerships to form early with rising stars. Here to tell us all about it is Narbe Alexandrian of Canopy Rivers. Narbe, welcome to CannaInsider.

Narbe: Thanks for having me, I'm really glad to be here.

Mathew: Gives us a sense of geography, where are you in the world today?

Narbe: I am in Toronto, Ontario today. It's getting colder and colder as the days go on, so it's about 16 degrees Celsius, which I don't know what that translates into Fahrenheit but it's probably the first indication that we're gonna be entering fall.

Mathew: Okay. Probably low 60s, I would say, is probably the conversion roughly. But yes, it's funny how we still have this Celsius-Fahrenheit thing, I wish we'd all be on one thing, you know?

Narbe: I know, I know. I actually like the pounds more than the kilos. So I'm kind of a mix up of both the U.S. and the metric system from the U.K.

Mathew: And then when I'm over in the U.K., they say, "Oh, you know, 10 stone," or something like that. I'm like, stone? What's that? You ever had that one?

Narbe: I have no idea how big the stones are.

Mathew: Okay. So what is Canopy Rivers on a high level?

Narbe: So Canopy Rivers was a venture capital affiliate of Canopy Growth. We are the vehicle for them to invest in minority stakes in the company. The way that the company was pretty much founded was from the basis of Canopy Growth looking to make acquisitions within the space, that was back in April 2017. Some folks were open to being acquired, others weren't, so the thought process there was if this is indeed going to be a $500 billion industry globally down the road, there's gotta be multiple winners and strategies and operations that really pave the way. And no government is going to give a monopolistic advantage to a single company, so why not take the opportunity to take multiple shots at net in believing and investing in the long-term potential of this industry?

Mathew: Okay. And can you share a little bit about your background and journey and how you ended up in this space?

Narbe: Absolutely. I got started about a year-and-a-half ago. I've been looking at the space for call it a little over two years now prior to making the jump in. My background has been predominantly in technology venture capital. I spent the last 10 years looking at companies both from mentoring them to investing in them, buying them as well as white labeling some of them as well. So worked a telecom company called TELUS in Toronto and then looked at a bunch of companies through that platform, moved over to the largest government incubator in Canada, which is Mars Innovation. And then moved over to the largest tech VC fund in Canada, which is OMERS Ventures where we did deals on companies such as Hootsuite and Shopify and Way Financial, great successes. Built three funds with the team there. I had a number of awesome exits and really paved the way for venture capital in the tech scene.

Through that whole process, while I was looking at cannabis, it looked a lot like what technology did back in the early 2010s in Canada where you have some very smart operators but not necessarily the best investors in the space and in the sense that because capital is so hard to come by, there's a lot of thorns in every deal for entrepreneurs. So my thought process was if this is gonna be anything similar to the tech industry where the more companies are succeeding, the more money is going to come, the better the deals are going to be for the entrepreneurs, why don't we get ahead of that and build a long-term platform here which helps our portfolio companies grow to become the giants of the future within this industry?

Mathew: Okay. Now, you have a thesis that vertical integration doesn't work. Could you first define what vertical integration is and tell us why you think it's not a model that's viable?

Narbe: So vertical integration is what you're seeing a lot of the large MSOs and the LPs in Canada are doing in the sense that they're trying to do everything from seed to post-sale. So they cultivate, they extract, they formulate, they deliver into products, they create branded products, they sell those products in their dispensaries, they own the entire process from seed to sale.

To us, that is very remnant of what the tech industry looked like back in the early 2000s where if you were...it was 2001 and you were looking to create a surfboard e-commerce store to sell surfboards to the public, you'd actually have to develop everything yourself. You'd have to develop your own payment platform or your own e-commerce site, your own website, your own videos, your own pictures. Again, everything you'd have to do from scratch. You'd have to build your own server farm in your basement to house the input and output of data that was coming through. Everything you had to do on your own.

Fast forward to now and how the internet has developed, you have turnkey solutions for that. So for payment platform, you have PayPal, for any e-commerce platform, you have Shopify, for servers, you have Amazon Web Services. So you have all these turnkey solutions and so you can focus solely on what you want to do and what you want to do best just selling surfboards.

This the same thing can be seen on the cannabis industry for the very large players like such as the Canopy Growths where you have a ton of cash and you have talent all across the board, you can successfully vertically integrate. But for all the small to medium players which represent probably 98% of this entire industry, it's very hard to do so. You're really spreading yourself out too thin, you're trying to build a consumer product for the recreational consumer but also kinda going through clinical trials for the medical and pharmaceutical consumer, it's a very hard proposition to make.

So in our view, as industry progresses and continues to mature, we're gonna continue seeing how horizontal integration is going to come into play, which is companies are gonna be focused directly on what they do best. So what are the one, two, three things that they do very well and outsource the rest of it out. So I like to bring up PAX as an example because it is a common name within the cannabis industry. PAX makes vaporizers, they only make vaporizers, they don't fill the cartridges, they don't sell the cartridges, those are done by their partners. And then they don't actually make the different little piece of the hardware either, they get that from partners as well. So their sheer focus is on developing what they think is the best vaporizer in the world, and it is one of the best vaporizers in the world. So we think that the model of what PAX is delivered it's gonna be what we're going to see more and more of in the future.

Mathew: Now, you've identified 13 segments in the cannabis value chain. Can you tell us what those are and why they're important and how you came up with those?

Narbe: Yes. So through our analysis, we've come up with specific areas where we think that the cannabis value chain really extends into, and it kind of is the seed to sale of what we see in the cannabis industry today. So we start off with cultivation, this is where you're growing product and you're creating dry flower that goes into some other area such as extraction or even goes into a pre-roll. Then we have plant sciences which is looking at how the plant actually grows, fertilizer and agricultural technology, post-harvest processing, which is lab testing, and rolling machines and grinders, etc, extraction, which we all know well about, formulation and delivery, which is where biosynthetics come into play, encapsulation, vaping, software, cosmetics, pharma and biotech, consumer product goods, retail and distribution, and then media technology.

So we like to bucket companies within each of these categories. There's companies out there that do multiple things in multiple categories, which is completely okay, but we like to try to find out what is this company's specialization? Like when you look at the operators of the business or you look at what product traction they've had, in a few words, how do you describe this company? And the reason we do that is because we truly do believe that companies are gonna slowly focus on their strengths rather than try to do too much. So we want to find out what the strengths are and what the barriers are to keep other companies away from that.

Mathew: I often think about the Pareto principle, the 80/20 principle where, you know, 20% of the businesses make 80% of the profit but also 4% of...you know, if you drill on further, 4% make 64% of the profit. If you were to look at those 13 segments, it might change over time but where do you think in those 13 segments are the 4% that'll make up 64% of the profit, kind of like Apple does in the computer space?

Narbe: I'd say it really depends on the maturation of the market. I think that, in general, the market rolls around in five specific waves. The first one is cultivation and extraction. This is where you see a lot of value on early license holders of domestic cultivation within those countries. They can ramp up quicker than anybody else can, build out their facility, which takes anywhere from a year to 24 months and they can get the ball rolling. And that's where you see a lot of value there.

As the industry continues to mature within that geography, we move on to the ancillary industry, which are technologies and software and extraction and different formulation methods that really help the cultivation of just dry flower turning into an actual product. Then we move into consumer packaged goods, which we know well about, which are the products that consumers buy at the stores today. And the fourth wave would be pharmaceutical, which we believe the medical market is gonna be the biggest one, we just don't have enough clinical data for the large players to jump in and make a big splash.

And then the fifth wave is maturation, which we think is about 15 years from that standpoint. So to answer your question, what we believe is the hottest segment today really depends on the geography. If you're looking at North America, I think you want to really focus on the brand part. There's a lot of products that are entering the market today. Our analysis shows those are about 90 different SKUs, SKUs that are coming into the North American market per week. And so there's a lot of noise and there's a lot of companies developing product.

Right now, everything looks like a Sears catalog that there's no real differentiation, When a customer goes to the store, it's one vape or for the other vape, it's one dried flower or the other dried flower. There's no real brand value behind any of these companies yet and that's what everyone's racing to become. So that's probably what we want to see in the North American industry. When you go to Europe, you are all the way back to the beginning where it's the cultivation and production and the licenses that are playing out within those jurisdictions.

Mathew: That is interesting how that unfolds. How many pitches do you hear each year?

Narbe: So we have a very robust system of capturing the details of the conversations that we have. Over the last 365 days ended June 30th, we saw 1,523 pitches. So these aren't emails that we just put in our database but these are actual conversations we've had with entrepreneurs. And we make a very strong push towards having those conversations because there's no better way to learn about how this industry is moving forward than to get into the front lines and talk to the soldiers out there that are trying to build something within this industry.

So you hear about their pains, the problems that they have, what are the successes that they're seeing, how they characterize their competitors, what type of metrics that they think are key performance indicators. And through those conversations, you can truly understand how things are playing out. And I think that until you get to...I mean it doesn't have to be 1500-plus but at least to get up to a thousand companies under your belt, like you won't really understand how this industry is moving and what deals make sense and what deals don't make sense and where the...I'm gonna use a Canadian analogy here, where the puck is going versus where everyone else is playing at.

Mathew: Now, what do you think...since you've heard so many pitches, is there something that entrepreneurs think is important to talk to investors about but realize not that important and then conversely that is important that they generally don't mention and without being asked?

Narbe: Yes. I think the biggest piece that they always talk about, and I have a bunch of pet peeves probably of how entrepreneurs pitch, but the main one is talking about how big the industry is going to get. And when you're talking to an entrepreneur, especially us, that are synonymous with the cannabis industry, we know how big this industry is going to get it, we know it's gonna be a multi-billion dollar opportunity in the future and we're long-term thinkers here as well. We're not the type of people that want to put money down and talk about how long-term this industry is and then force the company to go public too soon. Instead, we're always thinking about how can we build a billion-dollar business out of all of our portfolio companies and build that out? So when you're pitching, like don't talk about how big the industry is going to get, skip that slide, save your time and talk about something else.

The one area that I wish more entrepreneurs would talk about it would be to skip the pitch part of the pitch and focus on what they're seeing in their space. So if you are a German cultivar or Italian cultivar and you're talking to an investor, don't assume they know all the details, the regulations, and the different parties politically because it is a lot of information for everyone to keep in mind. So to really stand out there, take some time and just educate your investor on the opportunity in that space. So if you're creating a brand in California, explain to them the number of brands that come out of California outside of cannabis and why that is so. It's because there's a lot of talent there, it's because there's a huge population there that you can service. So to stick to what you're good at and show that opportunity out there instead of focusing on the larger macro-level numbers.

Mathew: Okay. And can you give us some examples of how your investment philosophy has guided you in your investments?

Mathew: Absolutely. So our investments are based on a thesis-based approach. So we break the value chain up into 13 different buckets, we break that down further into 97 sub-segments. And each of those segments, we apply a 10-criteria basis to it. So it includes stuff like competitive rivalry, bargaining power of buyers and suppliers, barriers to entry, how big the market size could get, what exit potentials look like, what the internal capabilities are at Canopy Rivers through our ecosystem approach, all the way up to how can Canopy Growth actually help this company out potentially down the road?

So we do that assessment and out of those 97 sub-segments, there's about 12 to 15 areas that we do a deep dive on. The three that I like to disclose openly would be...one would be on brand, the second would be on biosynthesis, which is the creation of cannabinoids through labs, and then the third piece would be on the plant science piece, which is really truly understanding how this plant grows and how we can better understand how to keep it away from pests and microbials and all the bad things without actually messing around with the genetics of the plant itself.

Mathew: Okay. And you mentioned you take a minority stake but how much do you generally invest? What's the average check size?

Narbe: So we've invested anywhere from a million dollars to $50 million in any single round. So our check sizes do vary. We like to call ourselves lifecycle investors because through our domain expertise, we can see early companies evolving and us understanding how we can help them become bigger companies, and so through that process, you can get it for a bit cheaper through the valuation. So I'd say a typical check size is about $10 million to $15 million per portfolio company. And so it might be a little bit at the beginning but there's a milestone approach to putting more money into the company and growing that out.

Mathew: Okay. And what are some of your more noteworthy investments that you can share?

Narbe: So there's a number of them we can talk about. Farmhouse is one of our largest investments to date. Farmhouse is a joint venture between the Mastronardi [SP] produce family, the principles behind it, which is the largest greenhouse operator in North America, and Canopy Rivers. And we've developed a 1.3 million square foot facility based in Leamington, Ontario, which is the same longitude as Northern California that they cultivate the cannabis. Fifty percent of that cannabis has already been taken up by companies such as TerrAscend as well as Canopy Growth and 50% of it is still available. So this is going to be one of the largest and most highly automated facilities in the world. And we have some of the best-in-class operators to run this company.

I was actually speaking to someone this morning and I was mentioning Farmhouse and when we first brought Farmhouse into the picture and we were walking them through cannabis cultivation, and think of this group as being...they are the multibillionaires, multigenerational in terms of families that ran the company. And they look at cannabis cultivation and they said flat out, "For the first two years, you'll teach us how to cultivate cannabis and then after that, we'll teach you." So that's a very powerful message that we received.

Mathew: Any other noteworthy investments?

Narbe: Yes. So one of the investments I love to talk about a lot is Headset. And Headset, as many of you know, it's a data platform. And Headset originally came from the investment thesis of there's not enough data for brands out there. So we were walking through MJBizCon last year, which is one of the largest, if not the largest conference in the cannabis space. And some of the companies out there were showcasing some of the flavors they had, it was all uninfused.

So we tried one, which was the second-largest beverage manufacturer in all of the U.S. for cannabis. There was a blueberry soda, it tasted extremely sweet and very artificial. So we asked them how things were going with the flavor and they said, "Couldn't be better, it's flying off the shelf, we're doing very well." So we asked them how they came up with the flavor and their response there was they had this fantastic agreement with the flavor house in Kentucky and the flavor house sent them blueberry cola, they infused it with cannabinoids and now they're selling and it's doing very well.

To us, that was very counterintuitive to all the conversations that we've had with large CPG corporates that are out there that take about two years to formulate and understand consumer trends before they launch a product. So we saw that the cannabis industry really upside down, companies were just developing product not really looking at why they were developing it or what the trends were showing, so we went out to find data. We spoke to Nielsen, Nielsen didn't have any data on the cannabis space at the time. So we started talking to cannabis companies and any company that had the word data in their title and their mission statement, we went and talked to them. So we talked to about two dozen companies and through that entire process, we kept bumping into Headset.

And Headset was founded by the three co-founders of Leafly, which is the most successful exit on the technology space and cannabis to date, they sold to private tier. And right after their earn-out they went and started this data company that pulls in data from 20 point-of-sale providers, which represent about 90% of the entire industry to date, and take that data and show brands, hedge funds, traditional CPGs that you might not even think are looking into the space, but they are, how things are moving in the cannabis space. So at any given time, I can find out in real-time what is selling in what states or what province and what SKU and what flavor and what CBD to THC ratio that exists there. And that's a lot of powerful data for any brand manager in any cannabis company to understand what to create next.

So for example, one of the findings that we've recently found out is when we are looking at CBD to THC ratios and you're selling CBD products, whether they be through dispensaries or through traditional channels, consumers, for some reason, are choosing the 9 to 1 ratio way more than they're choosing the 10 to 1 ratio. This is a negligible difference in terms of amount of CBD in the product to THC, but it just shows how consumer psychology works. And it might be the consumer it looks at and says that 10 it looks like a big number but 9 doesn't look as big because it's a single-digit and that's driving their pattern there. So to try to understand that, try to understand how to build a product based off that data is a very powerful barrier to entry for any company out there.

Mathew: Wow. That makes sense. These little psychological nuances, double-digit versus single digit, that's funny. Now, you're really deep into this world of investing and talking about all these different investment philosophies. What skills from your background do you draw on most day to day that kind of help you do your job and give you kind of a lens that you can quickly zoom in and zoom out and, you know, make decisions?

Narbe: I think the biggest skill set, it's a soft trait, and that's to play the long game. So when we're talking to companies, a lot of times it's not the right time for us to invest. And that just could be the company's too early, it hasn't shown enough traction, the valuation is too high, or it's a space that we're not generally too bullish in. And in those situations, you have to treat the entrepreneur with so much care because at the end of the day, it is their baby and they've devoted a lot of time, energy, they've left their previous job at a big corporate to go launch something. So you don't want to treat them without the respect they deserve.

So in these situations, a lot of times what you want to do is you want to create a narrative around the company. So that might not be the right time for me to invest right now but maybe in six months or a year and a year-and-a-half they get there, and companies pivot all the time, companies change up every single time. Shopify was one of my portfolio companies back in my technology days. Originally, the company was created, it was a snowboard e-commerce store.

Mathew: Snowboard?

Narbe: Yes, exactly. And that turned into becoming a $30 billion company because they pivoted to saying, you know, "Instead of selling snowboards, why don't I just sell my platform that I created to sell the snowboards?" So the same thing happens in the cannabis space. So before anybody jumps to any conclusions saying that, "Well, this company will never make it," or, "We shouldn't do that," don't take that approach, and takes the long-term approach of saying, "It might not be now, it might be later, but let me just understand how this entrepreneur thinks of their piece of the industry, what are they seeing, what are the trends happening from regulatory perspective that could help me in my future?" and create that rapport with them.

And any deal that we do take to our investment committee comes with months and months of discussion with entrepreneur. Because at the end of the day, the relationship between a VC and an entrepreneur lasts almost a decade. On average in the tech industry, it's about 9.6 years. The average marriage in North America is about 10.1 years. So you're basically getting married to someone and you just can't jump to elope within the first phone call.

Mathew: That makes sense. Okay. So you talked about, you know, where the puck is going. When you think about the cannabis industry and how it's evolving, is there anything that you're thinking about that would surprise investors and people in the space that is not really on the radar yet that they might not be aware of?

Narbe: Yes, and I think one of the things that's rarely talked about is how quickly prices are going down for dry flower as well as for islets and that an extract. You're seeing so many companies coming online right now growing hemp and growing cannabis and it's really moving the entire North American industry pretty quickly. For a lot of these players, especially the small ones, they're slowly gonna get out-positioned because of the difficulties in scaling. So you have to really pick and choose the area that you want to focus in on. Are you producing for mass product? Are you going for the lowest cost? Are you are applying some tender love and care TLC to the plant to create craft cannabis, high-premium type smokable flower?

And you had to pick and choose where you're gonna be. For a lot of the companies in the space and a lot of investments that I see other companies are making, they're just picking a certain geography and finding a player and going after it and not necessarily thinking about what the product looks like, what the genetics look like, how the company can actually weather a storm of commoditization of a product, if and when both cannabis and hemp become further commoditized.

You look at the prices today, extracts are going down by low teens per month, the dry flower is going down by high single digits per month. So within 12 months, you would be looking at cutting that price in half. When is that going to stop? We don't know. So that's an area that we really do try to keep a very close eye on because, for example, in Canada, by 2021, we're gonna have an oversupply. And then once we have an oversupply, what happens there? Our international market is going to open up for export? Maybe, maybe not. And if they don't, what companies are gonna survive and what do you have to do in that day and age to be a viable partner for anybody trying to build a brand or trying to buy dry flower from someone?

Mathew: Good points. I do think about that a lot, it does seem like it's rapidly declining and if you're just kind of a middle of the road, not sure what your value proposition is or your skillset, it's just like, man, you're just going to get bounced out.

Narbe: Absolutely. Absolutely.

Mathew: So Narbe, let's go to some personal development questions here to help the audience get a better understanding of who you are as a person. Is there a book that has had a big impact on your life or your way of thinking that you'd like to share?

Narbe: Yes. Definitely, there's a book called "The Defining Decade." I read it when I was in my 20s, so it was a while back. And it's all about the snowball effect and just taking life by its horns and try to do as much as you can with it. So the book is actually written by a clinical psychologist that focuses on 20-something-year-olds. And that's an area where you just don't see that much research dollars going into because, knock on wood, 20 something-year-olds are very healthy both mentally and physically so there's not a lot of money that goes into that.

So her life work is on understanding 20-something-year-olds. And for lot of the adages that she talks about, and she brings up anonymously a lot of her patients, a lot of folks believe that they have a lot of time to do X, Y, and Z but, quite frankly, you need to really take every day as if that was your last day and do everything you can in that scenario. And after reading that book, that really opened my eyes to how much you can actually fit into a 24-hour day. So every day someone mentions to me how I juggle so many different things at work and at home and all these different things and, quite frankly, I can attribute it to that book and how it opened my eyes.

Mathew: You know, I think about this too but then I think most of the things that I do don't mean anything. Like 10 years from now, I won't even remember a few things about this year even, and those things that stand out are probably the things I wish I enjoyed more. So how do you make sure that you're doing something that's truly impactful versus kind of busy-ness or something that feels like it might be impactful but then it's not, or you get drawn into something that's not impactful? I mean, how do you kind of navigate those issues?

Narbe: I mean, at the end of the day, you have to do what you love to do and you have to find your passion. I used to be an accountant, a CPA back in the day, and I hated it, I hated that world altogether. And after reading that book, I took a step back and said, what do I love? I love technology, I love looking at different business models. And I got into the VC space. This is pre-cannabis actually going anywhere close to legalization. So I jumped into that space and I went to work there. And every once in a while you ask yourself, am I enjoying what I'm doing?

And the book itself also talks about the snowball effect of every conversation you have and everything that you do might turn into something in the future, which you can't even fathom, but in hindsight, it's 20/20 and it make sense. So whether it be, for example, I went to a party once that none of my friends were going to, but I had nothing else to do in that day and I met my wife there. And I would've never imagined that one conversation I would have would end up being my partner for the rest of my life. So it is about just taking those chances and just showing up.

Warren Buffet talks about luck all the time, he says, "Luck is made up of true two attributes, one is the ability to see opportunities and the ability to seize opportunities." And I think that's quite true. If you stay at home, stay on the couch and watch an NFL game and bet 100 bucks on it, you're probably gonna end up wasting 3 hours in your day and maybe you make 200 bucks off that but you're not really going that far. But if you go and apply yourself and consistently want to learn, there's a lot you can do in this world.

Mathew: Great points. It reminds me of some other technique I use where I do something that's uncomfortable but turns out having an impact down the road in ways you can think of. Whenever I go into a room or a party where I know a bunch of people, I try to find someone I don't know that looks like they're not talking or not engaging and just walk up and introduce myself. And usually those people have something interesting to say, it's just that we kind of default to the familiar, like, hey, I know these two people over here so I'm gonna go over there and catch up on, you know, whatever, and that has had a tremendous impact for me. But it's slightly uncomfortable to go up to people you don't know and just start talking to them.

Narbe: Absolutely. I love that, I love that comment that you made as well just because I think it's a defense mechanism of ours to go after what's comfortable. And if you go out there and tell yourself I need to go seek discomfort, I need to seek those scenarios where I have butterflies in my stomach and I just do it over and over and over again until those butterflies go away and then I find the next thing, you just keep on growing and it never stops. And then you get it becomes a bit of a game for you in the sense that you're always trying to find what that next big thing is.

Mathew: Now, what do you think is the most interesting thing going on in your field besides what you're intimately engaged with?

Narbe: I think that the aspect of biosynthetics is something that I'm very keen on understanding more. At Canopy Rivers, we've talked to probably four dozen companies both in the cannabis space that are developing biosynthetics as well as in the non-cannabis space that are developing food ingredients or synthetics or biosynthetics to truly understand what that path is to create lab-developed cannabinoids that are still organic in nature and still as good for you as the actual plant itself. So really diving deep onto that. And from our understanding, it's gonna take a few years until we get there but there's some really cool technologies that are coming out from some very well-known academics all around the world that are really gonna push the boundaries of what we understand about these cannabinoids.

Mathew: You know, here's the Peter Teal question for you. What is one thought that you have that most people would disagree with you on?

Narbe: I'm not a big fan of retail within the cannabis space. There's a lot of folks that are putting a lot of money into dispensaries and retail. To me, that is a short-term solution. At the end of the day, retail stores for cannabis are gonna end up going down the path of the dry cleaner model. You're gonna go to what's closest to you, not necessarily what has the best selection. And you see that in the liquor space. When you're trying to buy a bottle of wine, you don't drive 10 miles to go to that one liquor store that has all those vintages that one might want. Sure, there's a niche for that, of course, which is the connoisseur, but for the most part, we all go to the one that's closest to us because it's convenient.

And if you look at it from a convenient model, then it's all about location, where those locations are. But at the end of the day, every retail model has a cap on how much money they can make because there's just only so much traffic that can walk through your store in a single day. So I just don't see the retail model really playing out from a venture returns, so you can't really get that much of a bang for your buck in terms of investing. I do think retail has a lot of the importance for large companies that want to showcase their brands. So I do believe in specialty retail where you have Canopy Growth creating tweet [SP] stores that sell Tokyo [SP] smoke and tweet products and really showcase the brand and the messaging the way they want. But for the most part, the ones that are selling everyone else's product, it's a race to the bottom.

Mathew: Okay. Narbe, as we close, how can listeners learn more about Canopy Rivers?

Narbe: You can go to our site, www.canopyrivers.com. You can check us out on a bunch of different publications that were on. I'm always trying to find ways to talk about all the insights that we get from our 1500 pitches that we've seen. And we just announced yesterday after market closed that Canopy Rivers is actually going on to the TSX, so we graduated from the ventures platform to the TSX, so we couldn't be happier with that. And hopefully, through that process, we create more awareness for our company and our investors through the TSX big board.

Mathew: Right. And for people not familiar, that's the Toronto Stock Exchange.

Narbe: Yes.

Mathew: Great. Narbe, thanks for coming on, we really appreciate it. I'll let you go so you can go squeeze more into your day efficiently.

Narbe: Thank you so much, I really appreciate being a part of this.

Mathew: If you enjoyed the show today, please consider leaving us a review on iTunes, Stitcher, or whatever app you might be using to listen to the show. Every five-star review helps us to bring the best guests to you. Learn more at cannainsider.com/itunes. What are the five disruptive trends that will impact the cannabis industry in the next five years? Find out with your free report at cannainsider.com/trends. Have a suggestion for an awesome guest on CannaInsider? Simply send us an email at feedback@cannainsider.com. We'd love to hear from you.

Please do not take any information from CannaInsider or its guests as medical advice. Contact your licensed physician before taking cannabis or using it for medical treatments. Promotional consideration may be provided by select guests, advertisers, or companies, featured at CannaInsider. Lastly, the host or guests on CannaInsider may or may not invest in the companies the entrepreneurs profile on the show. Please consult your licensed financial advisor before making any investment decisions. Final disclosure to see if you're still paying attention, this little whistle jingle you're listening to will get stuck in your head for the rest of the day. Thanks for listening and look for another CannaInsider episode soon. Take care. Bye-bye.

Ep 274 – LeafLink: The B2B Streamlining Orders to Drive Sales

ryan-smith-leaflink

Since launching in 2016, LeafLink has quickly become the largest e-commerce wholesale cannabis platform with $1 billion in annualized sales as of June 2019. 

In this episode, LeafLink CEO Ryan Smith gives us an inside look at what’s happening in the industry’s busiest marketplace.

Learn more at https://leaflink.com

Key Takeaways:

  • Ryan’s background in cannabis and how he came to start LeafLink
  • An inside look at LeafLink and the ways in which it helps brands and retailers streamline the ordering process
  • A breakdown of the companies using LeafLink and the number of new brands launching each week
  • How the marketplace on LeafLink has evolved over the last two years
  • A snapshot of the bestselling products on LeafLink and Ryan’s insight on up-and-comers
  • The data points Ryan finds most interesting about today’s cannabis marketplace
  • Ryan’s advice to entrepreneurs interested in creating a new cannabis product
  • Ways in which brands and retailers can differentiate themselves in the competitive cannabis space
  • Products LeafLink offers cannabis brands and retailers, including streamlined ordering, CRM, reporting tools, and fulfillment and shipment queues
  • Where LeafLink is currently at in the capital-raising process
  • Where Ryan sees LeafLink and the cannabis marketplace heading over the next few years
Read Full Transcript

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

In the old days, the most dynamic place to be in any big city was the central market. Goods were exchanged in the open-air environment with vendors yelling out prices, smells of food and tobacco smoke heavy in the air. This bustling environment is where hopeful entrepreneurs created new products and tested passerbys' reaction to see if they could make a deal. Today that central marketplace is online, but no less dynamic and bustling as it attracts more merchants and customers to congregate in one online bazaar. Today our guest is Ryan Smith, CEO of LeafLink, the largest B2B cannabis platform. Ryan is going to pull back the curtain and show us what is happening in the cannabis industry's busiest marketplace. Ryan, welcome back to CannaInsider.

Ryan: Thanks so much, Matt. Appreciate you having us back.

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

Ryan: Today I'm in New York City. Was in LA just last week, so really going back and forth between the coast as of late.

Matthew: Okay. And you've been on the show a couple of years ago now, but for listeners that aren't familiar with LeafLink, can you just give us a high-level snapshot?

Ryan: Sure. So LeafLink is a B2B wholesale marketplace, like you said, for legal cannabis companies. We're working with four to five retailers that are licensed in the States. Just over 3,400 doors have placed orders on our marketplace for wholesale inventory and they buy from over 1,200 of the largest brands in the space. It's companies like everyone from Kiva, to dosist, to Wana, to Dixie, all very close clients of ours. And we streamline the way they do their purchasing. So it's centralized in one cart with the simplicity of a business to consumer marketplace in the B2B environment.

Matthew: Okay. And you're a pretty young guy. How old are you, if you don't mind me asking?

Ryan: Sure. I'm 28.

Matthew: Okay. So that's young. And what were you doing before here? And can you kind of just paint the picture of how LeafLink just came on the scene and what you were doing and how you came up with it?

Ryan: Sure. So I'm one of the co-founders here at LeafLink with Zach Silverman, who's our CTO. And we had known each other for a few years before starting LeafLink. Zach was at eBay previously. He and I each had started and sold companies, tech companies, actually, both in 2014. They were unrelated companies. And he was just an interesting person and, you know, hopefully, he thought the same. And we would catch up regularly doing some research and trying to understand how we could... We were always so interested in like enterprise solutions, marketplaces. And so, we began doing some research in the cannabis space and really were working on this premise that we believed, you know, all companies in the cannabis industry deserve as powerful, if not more so tools to run and grow their businesses and we just found that they weren't being supplied with any of those things. But we also saw this interesting opportunity to create a new marketplace dynamic that doesn't really exist in more institutionalized historical industries because they've been doing business the way their parents, you know, did business and their parents did business. Here you have these forward-thinking, tech-first, progressive minds in cannabis and we saw an opportunity to build something new in this B2B marketplace concept.

Matthew: Okay. And how many companies are engaging on the platform right now?

Ryan: So there are 1,200 brands selling to over 3,400 retailers in 22 markets. Most of our... How we define a market is a state, so California would be a market, but we also serve a couple of Canadian provinces. We're live in Puerto Rico, so we... You know, over 22 markets right now are live on the platform.

Matthew: And how many brands are launching each week or month? Do you have a sense of that?

Ryan: Yup. We're signing just... We actually had a record month, 2 months back where we signed over 100 brands in a month, sort of that breaks down to...probably somewhere between 15 and 25 brands every week are joining the platform. Yeah, we actually we're, you know, we're really excited to go into this year about seeing some additional movement on some of the East Coast states, but there were some surprises that came into line this year, like Michigan, like Oklahoma that we're really excited to get the platform live in and really, just kind of keeping pace with the natural growth of the industry.

Matthew: Do you have a sense of what percentage of brands that are out there on LeafLink? I mean, you're the largest, so you've got the most, but is there any that are just not on any platform at all? Do you have a sense of that or is it hard to tell?

Ryan: It's a little tough to tell because although we... I did some research on this one for you, but we do have these large lists of licensees that are at least by states, but not all licenses are always active. Sometimes the one license could serve multiple brands, but we're trending typically above 75% of brands in our largest states, getting as high as 95% to 96% in states like Nevada, and Michigan, and Colorado. I know California, we're in like the high 70s. And so, definitely, this can give you market penetration. And as far as like the largest, highest volume brands, they're typically on the platform.

Matthew: Yeah, I think that's helpful that your CTO and co-founder was at eBay because you think like, "What's the number two auction site, at least in the U.S.?" and no one can think of one because the network effects are just so strong with eBay. Everybody goes there because it's the biggest, most liquid marketplace and once those network effects are in place, it's just they get stronger and stronger and they reinforce themselves to some degree.

Ryan: Agreed. I mean, there's an interesting, I think, maturation happening even like after eBay, though. If you look at some of these marketplaces now that are launching for consumers are just selling antique furniture or like just a marketplace for finding a dog walker. We really believe strongly in this managed marketplace software as a service concept and building something where we're so deeply in bed with our clients and we're learning so much from every single day, but building it specifically for this industry, and it's the only thing we think about and there's a lot of value there. And I think that's even happening on some of the consumer offerings, but specifically on the B2B side, it's just so specialized that this managed marketplace concepts in that we're really revved up about internally.

Matthew: So I'm curious how... Since you were on the show about two years ago, how has the marketplace changed or evolved?

Ryan: The largest change for us has really been the scope. So the last time we spoke, it was in 2017, we were live in five states and like I said, now we're in over 22, including a couple of these Canadian provinces. I didn't know our goal in 2017 was to move $100 million in transactions. We call it GMV, but it's gross merchandise value, the value of the products on the marketplace. The goal in 2017 was to move $100 million, which we did. The goal in 2018 was to move $500 million. We closed out the year at just under $700 million. And then just in May, we broke $1 billion in GMV through the marketplace. This month we're trending to break $1.4 billion, which is great. And that, we think is now, you know, whereas we were probably moving low, single-digit percentages of transactions in 2017, once we break this 1.$5 billion GMV mark, that's well over 20% now of all legal wholesale cannabis transactions are moving through LeafLink's marketplace. And for us, we think that's obviously really important in terms of overall penetration of the supply chain.

Matthew: Okay. So that sounds like it's probably your number one metric or key performance indicator because it's just like a...it's a great way just at a glance to see how the platform's doing.

Ryan: Absolutely. Yeah. We're, you know, we're working closely with some other providers further down the supply chain and, you know, continue to capture information about how large the market is, but I'm sure you've been through all the white papers that come out and a lot of them are, you know, they're shaky at best sometimes in giving a full clarity and scope of the size of the market, but yeah, we do our best to always be growing that GMV number because for us that's the...I mean, it's the holy grail of the marketplace, is continuing to scale that GMV.

Matthew: So can you give us an overview of what products are selling the most on LeafLink and maybe some hot up-and-comers?

Ryan: So we released earlier this year, the, you know, the top 10 sellers in a number of categories on the marketplace and we're gonna be doing that again. Got a ton of exciting feedback from clients there and you actually, within LeafLink, you can even search now across some of these bestsellers. But in terms of like snapshot of different product categories, an interesting thing I've, and a lot of the team members have noticed is that there really is this provincial element to which products sell best in which states and we're starting actually to break this down as a potentially new offering for clients, but overall, cartridges right now are, you know, just around 30%, flower is around, you know, 20%, 25%, edibles around 20%. And what we've really seen in one of the bets we made early on in building the product was that brands were gonna be the future of the space and something that we've seen, particularly in more mature markets is the leveling out or reduction of flower as an end product and really becoming more of a raw material that is creating...you know, put into a concentrate and then actually cooked into, or moved into, or distilled into a larger consistent SKU branded product. I think there's a lot more margin there, and those are the products that seem to be scaling the most across these different markets.

Matthew: Okay. I think a lot about, like how do you categorize flower or cannabis oil because it would be so helpful if there was like some accepted, you know, universally accepted types of oil, like CO2 extracted has below this level of toxicity or lead, like safe levels. And that way, the market could get more efficient in terms of how it transacts. You know, know we could drive prices down or get more efficient. People would have a better idea of what they're buying, similar to how, like how wheat or corn or pork bellies are transacted. I mean, are we moving there or are you seeing like specific things requested when flower is sold or what can you tell us about that?

Ryan: The industry is moving there, but slowly, and I think the biggest, you kind of hinted at this, but the biggest challenge right now is the incredible amount of inconsistency across lab test results. And so, people... Like there should be, and a couple of companies are trying to do this, but there really should be like a standardized template state to state that everyone's gotten together on that provides all of the objective information required to know all the levels of what, you know, the different chemicals and metals that you said. You know, what... Is the product tainted? All these things are... And then we've heard so many stories from clients taking a product, splitting it in half, sending to two labs and getting completely different results. Within the platform, within LeafLink, we actually did just launched functionality that allows... People were always able to search and buy into because [inaudible 00:12:02] hybrid units for sale amounts, but now people can actually attach their certificate of analysis to show the retailers or the buyers the test results. There are these features that actually send that automatically to purchasing managers, so that helps give them more of a grade of the flower, but it would all be so much easier if there was some universally accepted standardization of lab test results, which I feel like we're still a bit of a ways away from.

Matthew: Okay. Yeah, that would be very helpful. Any entrepreneurs listening? If you go out there, there's a product idea right there for you. So, you know, when I am on Amazon or Booking or something like that, I can tell there's an algorithm that is managing what's shown to me based on the likelihood of me...what I searched for, my impression of what they think I want, but also, you know, there's a yield function here. Like if we show this impression to you, there's the highest chance possible that we'll generate some revenue there, meaning, you know, both parties will come together. Are you creating something like that or working on something like that or manage that in some ways so that what's shown between a brand and a retailer has the highest likelihood of, you know, yielding, let's say, an earning per click or something like that?

Ryan: Since we last spoke, we've launched an ad revenue line which has been incredibly successful. Most states are actually sold out and we're now in the process of releasing our second...you know, our V2 of ads and those are gonna be more closely tied to a lot of those metrics. There was a good amount of engineering work that went into that, but when you think about the marketplace, we have the purchasing community, we have the selling community at their points of action, and unfortunately, there's a lot of limitations around where brands can advertise and how they can get the word out about their incredible products, about their great medicines. And so, what we provided within our ad service is the ability for companies to do exactly that and really impact the purchasing. We actually have these like LeafLink ad report cards that we send around that share, you know, what the performance was, what the click-through was, how it potentially impacted card sizes, metrics like that, and we're looking to really continue to advance that all in the same line of just bringing a new, higher standard of what our companies and our space can use to grow their businesses.

Matthew: If you and I were sitting down right now having a cup of coffee with some cannabis entrepreneurs that wanna launch something successfully on the LeafLink platform, what would you honestly level with them about like, "Hey, you're gonna have a more uphill battle doing this and maybe a higher chance of success doing this or a better profit margin doing this." What would you tell them?

Ryan: Unless you're in one or two markets, I'd stay away from branded flower. I think that that's becoming... It was always competitive. It's becoming way more competitive. I think the world probably doesn't need any more vaping devices. They're getting so highly technical and scientific that it's hard for me to even...it's hard for us to understand it. I'm sure it's, you know, equally difficult for people who are hearing from 10 to 20 vaping companies, you know, every month. We've seen some interesting... You know, I think we're getting to the point that I really think it's...a large part of it is a quality and branding and price point game. I mean, part of when we say, you know, we want the industry to mainstream, which everyone does, one of the things that that means is you just...you're gonna get more involvement by, you know, bigger pools of capital, you know, smarter capital that have higher requirements for types of products that can be launched. And so, if you look at, I think one company that's done a great job and one of our great clients in California is dosist, they have really clean, consistent branding. They've, you know, distilled down the experience into understandable metrics. It's dosed, obviously, literally doses, but it's dosed in a way that's understandable even to the larger grouping of people who haven't yet tried cannabis products.

And so, I think if you were to make a product, it really should be thinking about less of the people that are already purchasing, more of the ones that are likely looking to replace liquor or some other...whatever else helps them relax, but in a way that it has education really built into and a consistency and a polished professionalism. That's just, I think what people are gonna demand more and more. And then there's other things that are, you know, even more granular than the product or the brand itself, but consistent pricing and like on-time delivery of product, manufacturing enough amounts that you're ready to deliver when an order's placed. There's like simple operational things that we've heard clients say good and bad, but sometimes the best things companies say... Like they assume the first things I said of it's a great product, at a fair price that, you know, their clients, their patients love, but then there's this other element of who shows up on time, who answers the calls when you know, when questions come in, if there's a broken package, who replaces it? When people buy things, sometimes boxes show up that have different items in them or different counts. All those things drive retailers and purchasing managers absolutely crazy. And so, having just a clean operation on top of a well-packaged professional good, I think that's where we're heading, but the space needs more of that.

Matthew: Great points there about purchasing manager. I mean, you talked about some ways that brands essentially disqualify themselves because they're not prepared or they don't know how to react or when something goes wrong, they're not there quickly enough. Is there any other things that you feel like purchasing managers like they think about that brands don't entirely care about enough where if they did, they would be getting more business?

Ryan: We just launched actually this program...well, earlier this year, we launched a program called the trusted seller program and we found it to be particularly powerful in a market like California that still has... I think I saw almost like two or three illegal shops to every one legal shop and it really is such a shame that there is an enforcement against unlicensed operators because what we see a lot of clients run into is, you know, if you're a shop and you're paying your taxes and following the rules and closing up at, you know, proper hours and then across the street someone's doing, you know, none of those things, it's sometimes harder to compete. So the frequency, something that we've seen, which is actually tied directly to success on the platform and how many units and volume brands are able to move is how quickly they were applied to sample requests and messages, how fast they were willing to hop on a call. We don't have any really review system within the platform, but we have now training modules that we put clients through and there's this badging system of trusted sellers that people could actually filter and search through because a lot of retailers, it's such a competitive space for brands that if a retailer isn't happy with a brand, there's probably only gonna be once or twice the same mistake made before they move to someone with a competitive product. And, you know, for, for both sides of the transaction, we encourage them to be as professional, as polished, as educated as possible to have really successful transactions. I think that's really what people are going for because everyone, you know, the companies that are growing, they wanna become more automated, replicate their success faster and the less errors within that process make it easier to do so. So I guess what I'm saying is there's operational challenges for a lot of these companies that we're trying to alleviate through education and trust and we began to productize some of that because it's something that we really feel is lacking in the space.

Matthew: Do you think if brands extended financing to retailers, that it would remove some friction for the sales process at all or is that something the market's not asking for?

Ryan: Well, every market has net 15, net 30, sometimes net 60 terms. What we found is ours has that too, it's just not structured. So what we see happen a lot is, you know, let's say, Matt, you're a purchasing manager, I'm a brand. I know you well. We've been working together for a year or two, I come by, I drop off a product and you say, "You know what? Right here's 50% of whatever I owe you. I'll get the rest when you come by again in, you know, three or four weeks." And then in the minds of a lot of the people, a lot of our clients, a lot of people in the community is that that's net 30 terms, but it's not, there's no contractual obligation there. There's no accountability if people move past those net 15, net 30 terms. And so, we have a lot of research. There's a number of white papers our team has studied around increasing transaction flow and companies growing faster when given proper net terms that are not too onerous. And so, we've recently launched a program called LeafLink Financial that allows clients to pay each other and we allow them to build in more structure around providing net terms and facilitating payments so we could lessen the pain of cash management, which is a huge issue for our LeafLink community and the cannabis community generally, but we could also have structure around net terms so that companies can grow in a responsible way and not get to the point, which is something that we've seen of having $15 million, $20 million in revenue and, you know, $3 million or $4 million in payments past 90 days due and they're having trouble making payroll. So it's a huge pain point. It's something that we're very focused on trying to solve.

Matthew: Okay. And you mentioned this last time you were on the show, but could you go over again how LeafLink makes money and what kind of fees, you know, a retailer or a brand pays?

Ryan: We started off the company really just charging a flat SaaS fee. It was important to maintain our position as an ancillary technology firm. We're not participating in transactions. So that is a monthly fee per brand to be on LeafLink. We launched ads, as I mentioned earlier, which has been, you know, about a fifth of our revenue through ads. And then the final revenue line. There's a few others that are kind of that are seedlings right now, I'd say, but the third is LeafLink Financial and the fees we charge attached to that financial product that's made available to the community.

Matthew: Okay. What about... We talked a little bit about flower already, but, you know, it's hard to launch a branded flower, but in terms of the price of where the marketplace is on cannabis flower wholesale, how does that impact transaction flow? Do you see a lot more increased transaction flow in the price drops or is there anything unexpected there?

Ryan: So on LeafLink, every state is its own marketplace. And so, there's variation from a state like Oregon to let's say Nevada, but people in Nevada can't see the price of those in Oregon, so there's like a...there's a state by state plateau or like an average that they tend to come to, but if you were to take the pricing of flower in Oregon, you know, and which at some point in the last 12 months could have gotten as low as, you know, $300, $400 and then you go to a place like Nevada and where there's products listed, you know, north of $1,200, $1,300, then, you know, that's...the variation doesn't exist as much within states, unless it's part of the brand's story. But if you were to look at the numbers across states, there's a significant amount of variation.

Matthew: So what kind of products do you think we'll see more of in the next year or two? You mentioned how dosist is making things just very simple and clean and clear. Is it just a move towards simplicity? Is there too much feature bloat now with cartridges and things or just, people are overwhelmed and they just wanna make a simple decision or where do you think the market's turning to? What's around the corner?

Ryan: Vape cartridges are probably gonna continue to grow, but I do expect, and I think there are some, you know, if not the winners, grouping of people that are winning very much so right now, and I'd imagine there's probably gonna be some consolidation around that in the next couple of years. There's a ton of money going into beverages right now, and it's a little confusing at times. I think a lot of it is based on R&D that's happening in Canada by liquor and non-cannabis beverage companies. It's just what they know. And so, I do expect that we'll probably see as a result of all that more beverage offerings coming to market. I don't know how that's going to be received, but I definitely know it's probably one of the categories as an industry that there's the most money, definitely the most money from the largest companies going into. I wonder how that actually impacts what we'll see, but I think the concept of non-sweet edibles, potentially beverages as well, things that are increasingly more similar looking to non-cannabis products, I think that's where we're gonna start to see this progression go because as the East Coast and states, even in the Midwest begin to transition, a lot of the states domestically that aren't on the West Coast don't have as much of a rich history of cannabis being a part of their local culture and I think that's gonna get factored into product creation so that we could...you know, brands will be able to appeal to new users, different user types, different patient types that may not be as familiar with the product from the get-go.

Matthew: It'd be interesting to see if there's more brand loyalty once some cannabis drinks start to take off. When I was in college, I worked on a beer delivery truck for a while and I asked one of the owners of the distributor, I said, "Hey, when there's a like a recession versus like when the economy is doing really well, like what's the difference in your business?" And I was shocked. He's like, "It's only about 1%. It's so consistent, you know, month to month." I was just absolutely...because he's like, "People drink in good times and in bad times." I thought, "Yup, there you go." You know, there's such an allure to the drink market because you can really hang your hat on it once people decide they're a Budweiser person or a Miller Lite or, you know, an IPA and they kind of tend to gravitate that and weave it into their life to some extent. So I can see why there's that interest there, but who knows if there's gonna be the loyalty like there is with alcohol. It could be a totally different animal.

Ryan: We shall see. I mean, this'll be when the recession eventually...whenever it comes, it'll be the first time that the industry's been this legally mature to...and see how it endures, but I'd imagine it's probably not too different. We'll see.

Matthew: Well, Ryan, I know you do a lot of interviews with, you know, candidates to hire them. I'm interested to understand... You know, we see studies come out and say, "Oh, these are the job skills that are, you know, trending and that employers are looking for," but you know, maybe in your last few hires or from a technology point of view, what do you consider the most important skills for a candidate to have when you're bringing them on board?

Ryan: Well, we just closed our Series B round. We raised $35 million like 3 weeks ago and we're really looking for...we wanna maintain this culture that we've built here of really, you know, hungry, execution-focused, trustworthy, high caliber, intelligent people. We actually have a number of cultural pillars that we really grade against their, you can see them on our website, but we grade against in the interview process. But one of the things we're going through now is, you know, we're a team of just over 80 people. We have almost 40 open roles and we're really bringing in more specialized skill sets and one of the things that's really important to us is to welcome people to the team that can take efforts that we've begun as, you know, as a few generalists here start some of these, let's say like a new product offering or a new revenue line and take that to the next level, but be able to pursue it and have the hunger to do it as a team of one, at least in the beginning. One thing that we're trying to control for is bringing on, you know, ABC grade person that has worked for an amazing company, has gotten to, you know, incredible schools, but they...you know, what if they come to LeafLink and the first day they wanna hire 10 people? You know, we still wanna maintain that scrappy cultural foundation, nature that we have as a company here at LeafLink and something we're really trying to protect against while at the same time trying to bring in increasingly, you know, skilled, hungry individuals that we can build together with.

Matthew: Okay. So it sounds like you mentioned having the generalist but then being able to focus, so kind of being able to go from Swiss army knife, do anything down to a scalpel, specialized skill and then move back and forth between those two things.

Ryan: And having team members with each of those different skill sets, however varied they might be, be able to work together and know the value of one to the other. I think that's, you know, another thing that we, you know, we've heard a lot of pain points around scaling startups is people tend to...everyone has a lot of ownership over what they do, but, you know, not being open to welcoming new faces, potentially even more experienced faces could really create gaps in our ability to grow. And so, one thing Zach and I have always been really excited about on some of the meetings, we're most pumped afterward are when people are taking ownership, or presenting new concepts, or executing on ideas, or even an interview, sit down with someone and we've had interviews where people are talking about things and it's almost as though they've been in our executive meetings and they're touching on topics that we're thinking through all the time and leaving those meetings excited, like what if we could bring that person here to LeafLink to build with them and have...you know, create with them for the LeafLink community and the cannabis industry. I mean, over 90% of the people at LeafLink wouldn't likely be in the cannabis industry if they weren't working here with us. And we take a lot of pride in that because, you know, back to what we said earlier about bringing a new standard, a higher standard to our clients where we believe they deserve, that's something that really keeps us motivated.

Matthew: You know, you've, raised capital before and you just closed a round. How do you feel like that has changed over the last couple of years? There's obviously probably more acceptance as you see more state legislatures creating favorable laws, but are the questions you're being asked different than they were two years ago?

Ryan: They are. They are. We, you know, we did our... We've raised $51 million to date. And when we spoke, I guess, Matt, when you and I last spoke, we probably had just closed our seed probably around...just had a seed round. And that round we did with a company called Lerer Hippeau, which is an institutional, you know, VC, great investor out of New York. And we were the first cannabis deal they did. And we took a lot of pride in being the bridge for them to get educated on the space and learn more about the industry. They've done three or four deals after us in the industry and, you know, similar to the deal we just did for the B with Thrive, you know, two and a half years later from that last deal. They've haven't made any other cannabis investments. We're the first bridge, but it's part of this like bringing knowledge to this larger audience about all the incredible things that are happening.

I'd say the nature of the conversation has definitely changed. There are people, there are funds that in the last 9, 12 months have been inbounding to us that we really couldn't get in front of three years ago and everyone knows the question of is it going to be a large industry, a great space, a powerful plan? Those questions are gone. There's inevitability. And even if we're on a call with someone now and they're not aware of those three things, there's probably something more fundamentally wrong with their operation or how they're thinking generally because it's just so clear. And so, the conversation and questioning is less around, you know, what happens. I mean, it was a little while ago now, but like what happens if Jeff Sessions wakes up one morning and says, "That's it?" Those questions don't really come up as much and it's really more now on, you know, how is the industry progressing. How... It becomes more of a conversation around our product and our team and what we're providing to the LeafLink community because it is at the end of day, we are a tech company and that's how we, you know, we wanna be seen. That's the value we wanna bring to our clients. And I think investors are starting to see that too. I do know that, I'm speaking from a technology ancillary company perspective, I do know that it's still challenging and a very...potentially very challenging for plant-touching companies to raise capital, particularly from name-brand funds or institutionally-backed investors. But even that's changing too. Like the idea of not touching a plant seems to matter less and less every day.

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

Ryan: So I can give you a book that... Yeah, so there's one book that I'm reading now that I think I'm excited about it because whenever I start reading it, I have to hop off the book and onto the website. So it's called "The International Bank of Bob," and I don't know if you've heard of it, but it's about this online lending platform called Kiva, not related to the cannabis company, where you can lend, you know, $25 amounts to entrepreneurs.

Matthew: Oh yeah, I've done that. I've done that in other countries. Microloans. Yeah.

Ryan: Exactly. There'd be like a mother who needs more like sorghum to sell at her shop or, you know, wants to buy more fish and these small amounts make... And it's not interest-bearing loans, but it's basically around this concept of empowering entrepreneurs or people in developing countries to kind of like literally learn to fish and then they can grow their business and there's no interest on it, but they do pay it back. And I think it's just so much more valuable and aligns well with, you know...even though I think a lot of our cultural like execution and building and creation here at LeafLink... But this book, in the book, the writer, he was a journalist, started lending through the platform and then spent a couple of years going around and visiting all of the people that he actually lent the capital to in these developing countries and basically profiles them and like the impact that, you know, a $500 loan had on this family in Honduras, like things like that, which is really, I think, powerful, interesting and it plays into like value of network effect and community online and all of these things that we spend all day thinking about, but in a personal betterment type way. So I've really been excited about invest...or, you know, donating, investing, however you wanna call it, through that platform, but also then, you know, this book particularly is something I'm thinking about lately.

Matthew: Yeah. The repayment rate is amazingly high too for you think the difficult circumstances a lot of these people are in. So that's really cool. What do you think is the most interesting thing going on in the entire cannabis field right now besides what you're doing at LeafLink?

Ryan: On the regulatory side, there seems to be... I think we're at a boiling point of social acceptance and the regulations seem to be catching up. And I often wonder if we'll ever see full legalization in the way we ideally think about it. And so, I think a lot of like the states act and some of these other pieces of legislation that allow more access to financial institutions, I think that that could be nearly like de facto legalization. And so, I think regulators and senators and even just like the number of presidential candidates or potential candidates right now that support legalization, I think we're gonna probably look back in 10 or 15 years. And although it still may not be legalized, there's some regulations that are being pushed through in pretty creative ways that, you know, may be effectively legalization or at least create enough band...you know, room for states to pick their own way. So that's something that I'm really excited about. I think there's a number of... This plays into a bit on LeafLink Financial, but some regulatory tech offerings that are coming to market as well to further support banks and financial institutions to be more accessible to the cannabis community. I mean, it's really such a shame that because companies on LeafLink, companies in the space generally can't use a lot of these financial institutions that are just taken for granted, other industries are almost forced to operate as if they were drug dealers. And I think when that changes and some of the regulatory technology that's coming around on tools to know your customer and things that lighten the load of financial institutions to due diligence on...to have due diligence on companies will be like, you know, almost an unappreciated win. That's something that I look back on as pretty impactful. That's moving along quietly, not getting a lot of attention, but there's a lot of exciting progress there lately.

Matthew: And here's a Peter Thiel question for you. What is the one thought that you have that most people would disagree with you on?

Ryan: If you asked most people, I think they would agree that the smarter you are, the better. I think that there are other qualities that in terms of building a company, in terms of serving your client, in terms of getting to wherever you're going, regardless of what your goals are in life are potentially more. And I actually think if you were to think about intelligence on a scale of 1 to 10, I think there's a plateauing that starts to happen around 7 or 8 and then if you go even further, you start to get to this level of specialization that actually becomes quite limiting. So I'd probably say that intelligence past a certain point may not actually be that valuable and has like a diminishing return. And there's other things around, you know, being comfortable being uncomfortable, and making errors, putting yourself out there in ways even when you're not completely sure that are actually more valuable to get to where you're going.

Matthew: Great points, great points, diminishing returns on intelligence. There's other skills that can shore things up and take you across the finish line.

Ryan: Absolutely.

Matthew: So, Ryan, as we close, how can listeners find out more about LeafLink, retailers and brands, you know, apply to get online. Please give us the details there.

Ryan: The best way to find us is at www.leaflink.com. Well, you can also reach out to us at info@leaflink.com or sales@leaflink.com. A bunch of us still get all those emails and we can connect with you there, especially connect to you with, you know, the teammates that are professional leaders in your geographic area. Feel free to reach out that way. It's definitely the best way to get in touch with us. And, you know, we love getting back within a day or two at most, so happy to connect that way.

Matthew: Great. Well, Ryan, thank you so much for coming on the show. Your business has really grown in the last couple of years and congratulations on all the hard work you've put in.

Ryan: Thanks a lot, man, and congrats to you on this podcast and we hear about it all the time. So it's an exciting growth too.

Matthew: Oh, thank you. If you enjoyed the show today, please consider leaving us a review on iTunes, Stitcher, or whatever app you might be using to listen to the show. Every five-star review helps us to bring the best guest to you. Learn more at cannainsider.com/itunes. What are the five disruptive trends that will impact the cannabis industry in the next five years? Find out with your free report at cannainsider.com/trends. Have a suggestion for an awesome guest on CannaInsider? Simply send us an email at feedback@cannainsider.com. We'd love to hear from you. Please do not take any information from CannaInsider or its guest as medical advice. Contact your licensed physician before taking cannabis or using it for medical treatments. Promotional consideration may be provided by select guests, advertisers, or companies featured in CannaInsider.

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

Ep 273 – Stackable Grow Chambers Are Taking Cannabis To New Heights

david-kessler-trigrow

What happens when big data meets cultivation? Here to help us answer that is David Kessler of TriGrow, a leading cultivation solutions provider that just launched a grow chamber that will change cannabis as we know it.

Learn more at https://trigrow.com 

Key Takeaways:

  • David’s background in cannabis and how he became Senior Vice President of TriGrow
  • An inside look at TriGrow and its turnkey systems approach to help cultivators achieve the highest consistency and quality possible
  • The different types of technology and automation at TriGrow, including their real-time monitoring software and stackable grow chambers
  • A breakdown of TriGrow’s state-of-the-art grow chambers and how they work to create a maximum of six canopy levels
  • How TriGrow’s stackable grow chambers impact comfortability in working with the plants
  • The precision with which TriGrow’s chambers can be optimized for different strains 
  • How TriGrow uses data to provide growers a reproducible environment for greater consistency in quality and yield
  • David’s insight on the future of smart growing and the significant role it will play in standardizing cannabis over the next 3-5 years
Read Full Transcript

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

What happens when you applied best practices from large scale agriculture to cannabis and use the best thinking in data collection to measure the results? Here to help us answer that question is David Kessler from TriGrow. David, welcome to CannaInsider.

David: Thank you, Matt.

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

David: I'm in Sunny, Colorado. It's a beautiful day here.

Matthew: Oh great. And what is TriGrow on a high level?

David: On a high level, TriGrow is really an end to end cultivation solution. It was born out of the tenant that high quality cannabis production and low cost cannabis production were not mutually exclusive. Really, we're trying to break from the status quo of traditional indoor cultivation and apply modern best practices, technology and automation to the industry in order to solve some of the problems that we saw. So TriGrow systems is just one division of TriGrow, which addresses the cultivation situation and how to optimize cultivation for the future.

We also have a division called TriGrow Capital, which addresses finance challenges within the cannabis industry where we've just offered up a $30 million equipment financing vehicle, which really gives producers choices about the way they expand without relying on equity. We also have a supply division which helps cut costs of production for everyone in the industry as well as a brand division, which really moves towards a commodity of a branded product with consistency where we afford people training, packaging, marketing expertise, and really help them get a higher value for their product.

Matthew: Okay. So let's talk a little bit about what a turnkey cultivation facility is and what that means and what it looks like so people can understand.

David: Absolutely. A turnkey solution in our mind is the combination of proven hardware and software along with operating procedures which allow operators to hit the ground running. We want them to have a proven model for success. And so it incorporates everything from training, operational support, a full ERP solution, centralized horticultural support monitoring and whatever we can do to ensure the success of our client operators. Essentially, it's turning cannabis cultivation into a science-driven manufacturing process, but one where we are very careful to explain that we love the plant and the idea is to maximize the genetic potential of each and every individual strain in a TriGrow facility.

Matthew: Okay. Let's tease that apart a little bit in terms of what the technology and automation is exactly. Can you tell us about that?

David: Sure. We've taken an Apple ecosystem approach, which is a custom engineered integrated hardware and software solution. What we're looking to do is control cultivation using a very granularly controlled growth chamber model where in every 32 square feet of floor space, we can stack up to six tiers of canopy. All of the growth chambers are extremely uniform and customized and individually controlled from one another, which means that in one particular chamber we might have a temperature of 78 degrees, and a humidity of 55%, a CO2 level of, say, 1,200 parts per million. But maybe in the adjacent chamber we're trying to bring out anthocyanin production on a purple punch that's about to go to harvest. So we've dropped the temperature to say 60 degrees to degrade the chlorophyll and then bring out that secondary pigment and intensify it.

So by having individually-controlled chambers, we're really able to do what's best for the plants inside each chamber. And in doing so, we can maximize the quality and it might not be yield, it might be about trichome production, or it might be about a secondary metabolite that we're looking to produce in a higher amount. But over each cultivation cycle, we can have iterative improvement on how we cultivate that genetic. And with each individual growth chamber recording over a million data points in a year, we're able to digest that data and improve the process from crop to crop.

Matthew: Okay. What's the background on how you started the grow chamber? Like how did you arrive at that and you know, the size it should be and all the tiers and everything? What's the background there?

David: Absolutely. We wanted something that was modular and we also wanted something that we could grow a single strain in a more monocrop approach, which is, you know, most traditional grow rooms, they have multiple strains in a room. They're organized around a calendar schedule of events for work. So we wanted to shrink that down and really work off of a what is best for each individual plant model. And so doing it at that 32-square foot meant that it had ship ability, it had a way of integrating into the building structure. And so to give a little bit of color there, each of these chambers acts as a support and integrates a catwalk in between, meaning that instead of building up on a mezzanine level on the second and third floor. The flooring is actually integrated into the units and allows very comfortable access to the plants and very comfortable working conditions. So the size of each chamber was really a factor of how we can do this in a scaled modular fashion and have that granular level of control over each chamber and the uniformity of the climate inside.

Matthew: Okay. And then so as you go from chamber to chamber, there is a, like, are you in a seat or how does that work?

David: Absolutely. So there are two levels of canopy in each chamber. Each chamber is roughly 4 feet wide, 8 feet long and 9 feet tall. For working on the upper level of canopy, you're just standing, very comfortable working position. And since both sides of the chamber open along the 8-foot access, you're never reaching in more than 24 inches to work with the plants. When it comes to working with the lower chamber, what we found is that a lot of the most common bench heights in the industry are between 24 and 36 inches, which means growers are doing a lot of bending and reaching and, and pots are heavy. So what we wanted to do is minimize that bend, minimize that reach. So our lower level is accessed from a essentially mechanics stool with pneumatic wheels. So people sit comfortably and can work with the plants without stretching and reaching. And it really allows for a nice comfortable working environment.

Matthew: Okay. And what have your clients' reactions been to this type of arrangement with the grow chamber and working with the chambers?

David: You know, they really like it compared to the traditional grow. I think a lot of the traditional grows were designed around an antiquated kind of version of cultivation. And this is really applying best practices to that. We're looking at workflow, we're looking at product flow through the facility and we want our employees to be comfortable. We want the cultivators to be comfortable so that they can put in a good day's work. And part of that is giving them a comfortable working environment. And if you're having people go up and down ladders holding things, there's a huge inherent risk of people falling and getting hurt. I've seen other cultivators try and grow vertical and they're using forklifts and series of pulleys. So we wanted to address the access issue and make it comfortable and replicatable and safe.

Matthew: Okay. And let's talk a little bit about plant height. I mean, what's the average plant height here and how do you make sure it works within the grow chamber?

David: Absolutely. So the average plant height tops out between 36 and 40 inches tall. What we've done is use a series of physical manipulations, trellising as well as the occasional photoperiod manipulation in order to control the overall plant size. We adjust the length of the vegetative phase for each strain based on their growth rate and so that they don't get too large. Now, there will be some genetics that have an enormous amount of stretch more based on some of those equatorial sativas that are much less common in today's cultivation that really are not going to work well in our system. But for the majority, the vast majority of modern genetics, it works extremely well.

One of the things that we do though is to make the most of those double tiered cultivation method is we introduced lighting not just from the top of the plants, but inside the plant canopy as well, it's called inter canopy lighting. And what we get is a more uniform development of the flower, both from a ripeness perspective as well as overall cannabinoid and metabolite perspective. So it boosts up that lower material that might not be as desirable, maybe call it grade B or C into more of a grade A material. And it also allows a more consistent cannabinoid profile and terpene profile from what we would think of as the upper colas into that lower material because the light is so much closer to that lower material.

Matthew: Okay. So we talked about lighting, we talked about how to control the height. What other kind of variables are you kind of optimizing and controlling?

David: Well, in each growth chamber, you can control temperature, humidity, vapor pressure deficit, which is a combination of those two prior, the irrigation cycle rolls and different fertilizer mixes as well as the spectrum of the light and the intensity of the light. Whether you're coming from just the light source above, or whether it's also incorporating the inter canopies, you can individually control CO2 levels in each chamber as well. So really it's a full amount of control over the internal environment of each individual chamber. So if you have 100 chambers, you essentially have the equivalent of 100 very dialed in cultivation rooms.

Matthew: Okay. And as you organize the chamber for specific strains and the benefits there, are you seeing...which strain are you seeing the most grown just anecdotally?

David: You know, that's a hard one because in different States it's different things in different client operators. We're not supplying the genetics. So it's really what they bring to the table. What we see the biggest benefit on is really running a monocrop approach. I think traditionally, you know, cultivators are doing bigger rooms with multiple strains in a room and they need an ongoing source of production for sale. So they're routinely taking down rooms. The most common kind of schema that I've seen is running eight flower rooms with supporting vegetative rooms and harvesting one flower room a week with say 4 to 10 strains in it, which give you variety and consistent production.

The problem is all of that traditional cultivation is built around a calendar approach and is really about optimizing labor. What we're doing is optimizing the plant. We're optimizing the genetic potential of each plant. And so by running a single strain in each chamber and then granularly controlling that environment, we can do what's best on a strain by strain basis. And it's pretty exciting as you start to do this because with one chamber, it's just a grow room, but as you get 10 or 100, the number of iterative experiments that you can do where you're running, let's say, wedding cake at 78 degrees, 84 degrees and 88 degrees, and then looking at that data and seeing how it produced, what the quality of the flower was, we can pretty quickly optimize around each individual strain based on these iterative experiments. And then from there, it's just a process of at what point is a client satisfied and, you know, moving onto the next strain

Matthew: When do you feel like you start to really get the benefit? Is it after the 10th time or the 100th time or the 3rd time like that you're really starting to say, okay, we're still really seeing the benefit from collecting this data and, you know, optimizing for this strain in this way.

David: I would definitely say that you actually see benefits right away. The granular control of the chamber and the monocrop approach yield returns quite quickly. By the 10th cultivation round, if we've been doing iterative experiments, we're gonna have a more optimized idea of the temperature and irrigation schedule, the fertilizer levels that it takes to really push that strain to maximize its potential. But by the 100th one, the entire grow plan, which for the listeners, a grow plan is just our work for the recipe of cultivation. It's every environmental factor, every physical plant touch from a grower. It's the recipe by which we cultivate those plants. So by the 100th time, you're looking at really being able to dial in the end product, whether that goal is for oil production or the production of a particular metabolite, you know, improved color profile. Simply bigger yields are more trichome. But, you know, the nice thing is with the system recording over a million data points a year on each chamber, you can not only review the data but at any point, basically click a button and it will repeat that entire environmental recipe and that yields consistency and the ability to, you know, really benefit from the data and those small experiments.

Matthew: Yeah. This is interesting because you kind of have a control group then where you say, this is our best recipe that we know of, but there's always could be some recipe that you don't know of that you didn't try or some variable or permutation. Are you then always kind of saying like, well what if we change this a little bit or this a little bit, or do you kind of affine arrive at something where we say like, "This is pretty much the best we've come up with and we could experiment and tinker, but it's like there's diminishing returns?"

David: Well, I think that there is going to be a point of diminishing returns reached, but it's really about what the end goal of the client operator is, and at what point they're satisfied with the results and they want to move on to another strain, or they want to move on to another goal when it comes to, you know, the experiments that they're running.

Matthew: Okay. If you were to pick, you know, some of the insights you have here from collecting the data and optimizing for strains is valuable, but like when you're working with a client for the first time, which of the insights or which of the things that you dial in, do they say wow, like what do you hear the most of in terms of like that was really great?

David: I would have to say it's really about something called production planning, which is our algorithm. It's a very interesting algorithm in TriMaster, our software control program, that aligns real estate with life cycle length. So to break that down a little bit, every square foot of canopy we have is a resource. That's what we call real estate. And each individuals strain takes a different length of time. So you know you might have a one strain that's a 74-day maturation time and another that's 49 and if you're growing 10 strains in a facility trying to figure out the optimized planting schedules, cloning schedules, harvest schedules is a arduous task.

So what production planning algorithm does is it says, listen, if you want 20% of five strains, I recommend you do 22%, 16%, 24% and so on. And it aligns both the production scheduling with the optimized scheduling for the plant, allowing increases of up to a 20% increase on the output from a facility just from aligning those different characteristics of the real estate's availability when plants are harvested and when that real estate is now open and what strain to plant in its place to align with all of the other strains in cultivation at any given time.

And so that production planning algorithm really maximizes productivity and it does have a bit of a wow factor. Now, the visual charts that it produces can be hard to follow cause there's, you know, tracing from this clone group to this growth chamber, to this harvest cycle. But when you look at what the output is, when you look at what the product of that algorithm is, it's really increased productivity but maximized quality as well because you're no longer cutting a 70 DA strain at 56 days because that's what the calendar said to do. You know, if a strain requires a certain amount of time, it gets that amount of time. And then the software kind of optimizes everything else around it.

Matthew: Oh, that's great. It's like turning over your cannabis grow to Jarvis, "Jarvis figure this out." Yeah.

David: We hope that we can be the Jarvis for everyone in the future.

Matthew: Oh yeah. Okay. So do your clients share data between each other to help each other out if they figure things out or do they use you as the layer to be like, "Hey, you know, create this as the best practice and then you can share it," or how does that work?

David: So, in terms of sharing data, that's a choice that the growers get to make themselves. You know, what we found is some growers prefer to keep that information in-house as if it's their secret sauce, their special recipe. And others feel, you know, if especially in a different market, that sharing of the data allows them to more quickly optimize their own cultivation practices. And it's more of a collaborative atmosphere. So really, that decision is up to each of our clients and we support it. Now, the nice thing is getting to look at all of that data, we have lots of insights of our own.

Matthew: Okay. So cultivators are very different. You know, some use time and planning very well, some kind of shoot from the hip and then there's the in between. You know, how much time would you say using planning resourcing, and your tools and working with you saves a typical grower, if such a thing exists?

David: You know, it saves a considerable amount of time. I'm hard pressed to put an actual number to it. What I would say is not only are they optimizing the time of the cultivators themselves on the ground, but they're also optimizing the process. In terms of the time they save, I would say we still have very close to the same amount of cultivators working. It's about a 20% reduction compared to a traditional grow, but their time is spent more working on the plants with a hands on approach. And some of the more mundane and labor intensive tasks have been automated, which means when they are working with the plants, it's about looking for IPM scouting or really, you know training the plants to allow for maximum yield or best growth. So their time is both better utilized and utilized towards a higher purpose, which is, you know, improving the plant health.

One of the things about having these reproducible environments is it minimizes the plasticity of the plant, phenotypic plasticity being the variation that occurs within the plant because of forces of the environment. So if you put a plant outside in California and you put the same exact clone outside in New York, because of differences in rainfall, elevation, sunlight, mineral content in the soil, you're gonna have two different phenotypes, two different visual representations of that same genetic constituency. And so using our system, not only are they saving time, but they're getting a very consistent output because of the granularity of control and the uniformity of the internal environment, which not only saves them a little bit of time because a process that you work out to optimize a particular strain is going to be applicable in all future cultivation, but it increases the consistency of their product and the quality of their product. And that's something I think that's a bit lacking in the industry.

Matthew: Well, you know, since you're growing in strains trying to optimize strains, it's really important to know exactly what your strain is. How do you advise clients in terms of testing to make sure that they know exactly what they have? What do you do there?

David: A great question, Matt. And there is a lot of confusion around the taxonomy or the naming structure of cannabis. What we have asked our clients to do is use third party laboratories that do genomic testing and get genotype tests because strain names change. I've had cultivators that wanted to have something unique in their markets, so they knowingly changed the name of a strain. I've had retailers switch the name of a strain because it wasn't selling as well. And unfortunately, what that means to a end consumer or a patient is that they're not sure of what they're actually getting. And so that level of uncertainty with our system is really unacceptable. So what we do is we look at the genotype, essentially the genetic fingerprint of each strain. And from there, we can optimize it. It also allows us to compare data of similar strains. I mean, we're 96% or 97% chimpanzee, right, by DNA.

So when you look at the differences within one cannabis strain to another, they're pretty small in the grand scheme of things and they have a huge impact on the overall phenotype, chemo type and so forth. So what we wanna do is look at those genotypes as kind of a starting point and then continue to optimize. But when it comes to strain names, there's so much confusion in the industry about what a strain is. And, you know, the fact that if you have one parent as a mother and one parent as a father, every seed that is produced from that pairing is going to be a particular strain. But just like the differences between siblings, you're going to get into a situation where siblings don't look identical. They're not identical by any means. And because of that, you know you might have blue dream or purple punch that look really different or have a very different chemical profile from cultivator to cultivator, from facility to facility and you layer on top of that, the phenotypic plasticity, the variability of the cultivation environments. And it's a bit of a conundrum within the industry at this point about how to deal with that level of inconsistency.

Matthew: How about fragrance or some people say odor, it depends on your point of view, if you like the smell of cannabis plants or not. But how are you advising clients to contain that? Because I know more municipalities are fining cultivators if the fragrance is just too overwhelming for the surrounding area. I know I've walked into grows and then it's like I walk into Whole Foods or something and people are staring at me because I'm like radiating like this unbelievable fragrance.

David: Listen, I totally understand. The first time I came out to Colorado, closer to a decade ago, and I went to some of the legal cannabis grows, I got back in the rental car and I couldn't figure out why it smelled like cannabis until I took my vest off and realize that on the back of my shirt I had resin smeared all over the place. And the smell was me. But to your point, the odor, which I think of is a huge benefit because aroma is one of those factors that I think consumers make decisions based upon. But when you're cultivating, it can be a hindrance and as you pointed out, a compliance problem. So what we have is some really interesting technology. It incorporates ozone, which is the production of 03 molecules, which oxidize. It's an unstable oxidizer, wants to go back to 02. And so that extra oxygen jumps off and oxidizes. Now, anything is the problem. So it will oxidize odor molecules, but it'll also oxidize electronics and it can become damaging.

So the way I would describe this is odor mitigation technology where we pass air through a chamber, it is completely oxidized, removing all of this smell bacteria and mold and fungal spores. But before that air's returned to the facility, it actually goes through what I can only characterize as a catalytic converter and oxidizing honeycomb, which then removes all of those additional oxidizers, those 01 molecules that jumped off and essentially returns clean air to the facility. So we incorporate that technology, which is called blue zone into two areas. You can put it around the facility for overall odor mitigation as well as biological biosecurity control for pathogens. But you can also integrate it into every single VFU, every single growth chamber as an option.

And that not only is gonna keep the smell down in the VFU or the growth chamber, but it's also gonna add to the air quality. It's going to improve the quality of the air. You know, again, eliminating mold spores and reducing bacterial contamination and overall, just growing in a more clean environment. And biosecurity is something that's really, really paramount to our cultivation practices to the point where all of our electronics are designed as waterproof IP67 and meet the highest underwriter laboratory certification for indoor agricultural systems, which is UL 8800, the entire system is designed to be sterilizable and watertight. So in between crop cycles, every square inch of each of those growth chambers is sanitized using essentially a spray gun. And then before the next cultivation cycle, you're starting from a very clean and sterile place, which allows you again that ongoing production of high quality and consistent cannabis.

Matthew: How do you think growing is going to evolve and change over the next three to five years? I've been amazed to see how far it's come, but where do you think it's heading? What's around the corner?

David: Well, I think as we've seen with most of the legal markets, we're looking at price compression and cultivators that were able to do very well for themselves when the prices of cannabis were higher are struggling more now. So I think there has to be a move towards a more price-conscientious way of cultivating. I also believe that consumers are gonna start demanding more consistency. If you look at any other consumer product good, when you open a bottle of Coca-Cola, it tastes like every other bottle of Coca-Cola. And currently, the marketplace is not supporting that kind of uniformity. And when I go into three different dispensaries and buy Gelato 33, it's actually very different from dispensary to dispensary.

And so I think that over the next three to five years, we're gonna start looking at how people can optimize cultivation and do so at a lower cost. How they can bring consistency to the products that they're growing. And also how they can compete on what I believe is going to be a larger scale both regionally, whether that's as MSOs operating in multiple states as separate entities or whether regulations will change and they'll be able to operate across state borders. But I think that this overarching issue of price and consistency are gonna remain regardless of how the laws fluctuate over the next three to five years. And those will become the factors that are gonna drive the success of cultivators in this space.

Matthew: David, let's turn to some personal development questions to help listeners get a better sense of who you are personally. Is there a book that's had a big impact on your life or way of thinking that you'd like to share?

David: You know, there really is. So when I was young, I fell in love with cannabis at a fairly young age and I went to school and I was gonna be a lawyer and decided that, you know, what I really wanna do was follow my passion for plants. And I went for horticulture instead, started working at a nursery that specialized with a rare South African plants. And the woman there suggested a book to me. She knew my passion for plants and she knew that I was an avid reader and she said, ''Listen, the book you want to get is called, 'So you Want to Start a Nursery' by a gentleman named Tony Avent. And it's a really fascinating book. It's really interesting. It's got a lot of funny stories, but essentially he focuses on, as a nursery owner, these are things you should consider."

And there's nothing about growing plants. This is not a book to learn how to cultivate. This is a book to learn how to be a business owner in an agricultural space. So it talks about workflow and product flow and how to set up a business plan and looking at the efficiencies of layout and reproductive process. And so overall, it craved me these fantastic insights which I carry with me today as kind of some of the tools in which I evaluate different cultivation projects. And in doing so, it was a lot of fun to read. It talks about different aspects of the nursery industry, retail versus wholesale, something very relevant to cannabis producers. Also, about something that's becoming more popular in cannabis today called liner nurseries where nurseries don't specialize in flower production. They specialize in the production of the starter plants, whether that's clones from tissue culture or vegetative propagation or whether they're just growing clones up into what we would call teenage plants or ready-to-flower plants.

But that level of specialization allows them to focus on a particular area of the agricultural process and it also allows them some level of specialization. So they're not trying to deal with the biosecurity of flower production and trim crews and things of that nature. They focus on a more narrow set. Now, you only see that kind of nursery model in states with more licenses that are granted because if you're only granting, say, eight licenses like in Utah, then you're not gonna have a nursery that's just going to specialize in the baby plants. But in more robust licensed States, it becomes an area of specialization and that area of specialization means that you might have a competitive advantage in that niche. So it was a great book that talks about all of these wonderful things and really gives you a great economic and business perspective on all agricultural businesses. So I would definitely say that that book was the one that I'd recommend.

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

David: Yeah, if I had to pick one tool, Matt, it would be TriMaster. TriMaster is TriGrow's custom software. It's really the greatest tool I can offer any cultivator. In no way isn't it effort to replace a grower. It's really a tool to empower them. It has that production planning algorithm I mentioned and allows that controlled of each individual growth chambers environment. It's automating that data collection. So no one's out there with a clipboard. It's taking over a million data points each year. It sets up alerts and alarms for anything from temperature, humidity or different tasks that the owner, operator, facility manager or cultivator needs to know about. And it also incorporates a full ERP solution making operation of a facility easier.

And then in terms of communicating with us and our clients, that particular piece of software allows everything from video conferencing and sharing and documenting picture files or video files. Let's say, they found a past or they have a question about discoloration on a leaf, that's all recorded, that's all transmitted through the system. And it also acts as a training tool and a compliance tool. You know, recording all of your spray records and housing, all of your material safety data sheets and all of the vast standard operating procedures that TriGrow offers to our clients.

Matthew: Apart from what you do at TriGrow, what do you think is the most interesting thing going on in your field?

David: I think that right now what we're looking at as one of the most interesting things is probably the advent of breeding and cannabis. But I don't mean that there hasn't been seed breeders and very well-known and very successful breeders. But it's applying that modern agricultural science to an industry that went underground over a hundred years ago. And because of that, they didn't benefit from large scale research university information and best practices coming out of big agriculture that could only be taken advantage of in what would have been a legal climate. So I think what we're starting to see is this aggregation of data because we are now in the first point, I think, in the countries instance where large-scale commercial cannabis cultivation is really starting to be a thing.

And so when I look back at orchids and to make you aware, at one point I owned an orchid nursery and I judge with The American Orchid Society. It's one of the other plant groups that I am just so fascinated with. But with orchids, we have over 50,000 species, 250,000 hybrids and a record of every single cross going back to the 1800s. Without that data set, cannabis is kind of moving a bit in the dark right now. And what's coming to light are huge advances. You know, when it came to orchids, we found that Yellow Cattleyas with a lot of xanthophyllic metabolites would intensify the color of a purple when bred with it. That same kind of knowledge is starting to be aggregated through large-scale cannabis production, and with TriGrow offering all of that data collection and these different data points, we're hoping to be at the forefront of what is going to be the cannabis agricultural revolution from an information perspective.

And I think that is the most exciting aspect because I can optimize a particular strain using TriGrow's technology and maybe drive it from 60 grams per square foot to 70. But when you look at the modern advancements in something like sweet corn, which started as teosinte a long time ago, you know, what's going to give us a jump from 60 grams per square foot to 120 or 180 are going to be advancements in breeding made in this more modern climate. And so I think that that's a really exciting thing to kind of keep an eye on and to track over the next several years.

Matthew: Do you play music for your plants?

David: I do not. I play music for me and that the plants benefit all day long. I'm more of a grateful dead kind of era guy. So always have music on in the background.

Matthew: Yeah. And maybe just talk, one question I forgot to ask is that you have some, you said, some unique financing things you're doing. Can you just talk about that a little bit?

David: Sure. One of the areas that we recognized as an issue in the industry is really successful cultivators that wanted to expand, didn't have access to traditional lending sources. And in order to expand and to generate the capital necessary, they were often being asked to give up what I would think of as an unreasonable amount of equity. So we put together a division called TriGrow Capital and TriGrow Capital is about giving different, I guess, options to cultivators that want to expand. So we do lease models as well as more of a term loan kind of style and giving these options to growers. They don't have to collateralize with personal guarantees or with equity stakes in their business. It becomes a much easier expansion process.

And we just announced a couple of weeks ago at the San Jose trade show that we had closed an additional $30 million of equipment financing for clients and perspective clients. And so we really welcome them to explore this option because often with the expansion of the industry at the rate it's going, giving up equity can actually have a negative impact on your overall economic position. Whereas taking a very reasonable loan and being able to expand without having to divest yourself of equity can be a much better solution for producers.

Matthew: Yeah. What's a typical interest rate or the range of interest rates and terms structure there?

David: You know, in terms of the term structure, it goes anywhere from 24 to 36-month. The rates are really dependent upon the options chosen within the lease, but much more affordable than what I would say traditional cannabis loans have been as well as without that equity component.

Matthew: Okay. So but no hard numbers you can give us in terms of rates.

David: No, but I would invite you to have on our chief business development officer, Richard Weinstein, who would be happy to talk at length about the various options using that equipment financing vehicle. And he would definitely be the person to address that question,

Matthew: Ok

David: I just fully agree and I think that when given the opportunity, we're so confident in our system and our technology that we're not asking for these personal guarantees. We're collateralizing the equipment. So why would you spend your hard-earned money when we're offering you ours? It's a very attractive lease rate and I think it becomes a very viable model by which you can expand. You know, our traditional costs of cultivation across the country vary because there's different amounts people play their employees, there's different utility providers. But generally, what we've seen across North America is sub $300 per pound as a cultivation cost for trimmed dried flower and often well below that. And that really affords people an opportunity because not only are they going to benefit from this lease structure where they're not putting their money at risk, but their cost of production is often gonna go down by, you know, 50% or more, sometimes 100%. I've seen costs of cultivation over $1,000 still per pound. And so it allows you to benefit on so many different levels that I think that it's really an excellent solution to expand your operations using, TriGrow, utilize the financing options from TriGrow Capital and really just to capitalize on this amazing industry which is growing so rapidly.

Matthew: Well said. Well, I wanna wrap up, but before we do, you mentioned to me before the call your spirit animal. I think now that people know that you have that answer at the ready. Please disclose what your spirit animal is.

David: I would definitely say my spirit animal is a big Kodiak bear. I'm a big guy. I'm fiercely protective of my family and just love being outdoors, so I definitely feel very comfortable aligning myself with that Kodiak bear.

Matthew: Great. You catch salmon out of a river with your bare hands over or anything like that?

David: Never with my bare hands, but I love fly fishing and fishing in general. So I'll take a day of salmon fishing anytime.

Matthew: Great. David, as we close, how can listeners learn more about TriGrow and find you online?

David: Absolutely. They can learn more at our website, which is wwwtrigrow.com, T-R-I-G-R-O-W. And if they want to learn how we can benefit them, they're welcome to send a copy of their building plans to plans@trigrow.com for a free assessment. And we can talk about a program by which TriGrow would help them optimize their cultivation in their facility and help them benefit from our services.

Matthew: That's great. You're really at the cutting edge here in terms of implementing best practices. So I mean, I don't know why anybody wouldn't take advantage of that, so thanks for coming on and educating us, David. Really appreciate it.

David: It's been my pleasure. Thank you so much for having me and have a wonderful day.

Matthew: If you enjoyed the show today, please consider leaving us a review on iTunes, Stitcher, or whatever app you might be using to listen to the show. Every five-star review helps us to bring the best guest to you. Learn more at cannainsider.com/itunes. What are the five disruptive trends that will impact the cannabis industry in the next five years? Find out with your free report at cannaninsider.com/trends. Have a suggestion for an awesome guest on CannaInsider? Simply send us an email at feedback@cannainsider.com. We'd love to hear from you.

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

Final disclosure to see if you're still paying attention. This little whistle jingle you're listening to will get stuck in your head for the rest of the day. Thanks for listening and look for another CannaInsider episode soon. Take care. Bye-bye.

Ep 272 – The Last Barrier To Cannabis Beverages Has Fallen

william kleidon ojai energetics

Efficacy and rate of absorption are important variables when taking CBD, but the reality is most products on the market aren’t fast-acting and don’t have the best bioavailability.

That’s why William Kleidon set out on a mission to crack the code on a delivery method that could provide both instant relief and optimal absorption, and he did not disappoint.

With their patented immediate absorption technology, William and his team at Ojai Energetics are going where no company has gone before: water-soluble full-spectrum CBD.

The result? A highly absorbable, precisely targeted oil that’s disrupting the cannabinoid drink industry.

Learn more at https://www.cannainsider.com/ojai  

Key Takeaways:

  • Will’s background in CBD and how he came to start Ojai Energetics
  • An inside look at Ojai Energetics and its mission to offer the most targeted, bioavailable CBD on the market
  • A breakdown of water-soluble CBD versus traditional fat-soluble CBD
  • How Ojai Energetics achieved its rapid 30-second onset
  • The many challenges Ojai has overcome to create a water-soluble full-spectrum CBD oil 
  • How Ojai’s water-soluble technology has overcome dosage and consistency issues with CBD drinks
  • Ojai’s bitter-to-sweet dosing method and how it allows consumers to achieve their optimal dose through taste
  • Will’s thoughts on intellectual property in the cannabis space and his focus on licensing Ojai’s IP versus using it solely for the company’s own products
  • Where Ojai Energetics is currently at in the capital-raising process
  • Where Will sees Ojai heading in the next few years and how the company’s water-soluble technology will mark the beginning of new and improved CBD drinks
Read Full Transcript

Matthew: Hi. I'm Matthew Kind. Every Monday, look for a fresh new episode where I'll take you behind the scenes and interview the insiders that are shaping the rapidly evolving cannabis industry. Learn more at cannainsider.com. That's C-A-N-N-A insider.com. Now, here's your program. Just a quick note before we get started, I want to thank Will and the team at Ojai Energetics for offering a special deal on their CBD for CannaInsider listeners. When you go to cannainsider.com/ojai, you can see a special offer for a free $47 tube of sports gel when you purchase three or more bottles of their CBD oil. Again, go to cannainsider.com/ojai and you can see that offer. There's a little bit of a tricky spelling on Ojai, if you're not familiar with that, it's cannainsider.com/ojai. Now, here's your program.

When you take a CBD product, how fast do you want to feel the onset and how much you want to dial in the experience are really important variables. There are not a lot of options for quick onset and precision right now, but Will Kleidon from Ojai Energetics is here today to tell us about how he's surmounting those challenges and going where no CBD company has gone before. Will, welcome to CannaInsider.

Will: Thanks so much for having me.

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

Will: I am in Ojai, California, which is about an hour and a half north of L.A. Yeah. [crosstalk [00:01:38] paradise.

Matthew: I know there's like a big hotel resort there, and it's supposed to be really nice, but I have never been there.

Will: Yeah. So, that's Ojai Valley Inn and it's awesome. Ojai, there's about, I think there's seven valleys on the planet that run east to west as opposed to north-south, and Ojai is one of them. And so it runs perpendicular to the coastal range. And so every evening when the sun sets the light refracts and then shoots up the valley and turns the entire valley pink. So it's called the pink moment. It's just a special spot, and it's 20 minutes to the ocean, you're surrounded by national forest, the condor sanctuary is right in my backyard and basically up in the mountains. And then Aldous Huxley and Krishna Merde they hung out here and lived here, it's just a cool spot.

Matthew: Yeah. That's great. So, tell us what is Ojai Energetics on a high level?

Will: Yeah. So, we are a cannabis technology company. And so we're an IP holding Co. at the parent level and I built it like a wheel and spoke model. And so we'll have our consumer packaged goods division which we have and are powered by OE which goes into power beverages or other products, and then our genetics division and all sorts of stuff, supercapacitors.

Matthew: We're gonna get into all that stuff, but I just wanted a high-level overview. Now, share a little bit about your background, how you got started down this path in the cannabis technology space.

Will: Yeah. So, in end of 2013, I was looking for a CBD product. I had met Ringo, one of the pioneers in breeding CBD a couple of years before, before he passed. And so I was familiar with CBD, but I thought I had to get it at a dispensary. And so I was googling CBD and all of a sudden it popped up on Amazon, then I went, "Oh wow. That's quite strange." And so I clicked on it, the ad and went to Amazon. It was fulfilled through Amazon, I believe, at the time and it showed up in my mailbox and I went, "Wow, this is incredible. I guess it's legal." And there was no CFA, had no idea what was in it, I think I saw there were synthetic fillers, did not feel good about wanting...didn't wanna take it. I had no idea what...and rightly so, it turns out that it was filled with heavy metal content, but did some due diligence and found how...like the legal pathways. It's just pre-2014 farm bill, so this would have been stock and stem of non-domestic hemp and thought there's gotta be someone doing it properly and searched and couldn't find anyone doing it with the integrity or standards that I felt good about taking personally. So, that was the impetus of, I said, "Well, if no one's doing it, I wanna take it. Let's do it."

Matthew: Yeah. And so one of the interesting characteristics of your CBD oil is how fast the onset is. Can you talk a little bit about that?

Will: Yeah. So, I met a chemist back in the beginning of 2014 and he said, "Hey, I figured out how to solubilize cannabinoids." I said, "Oh, that's awesome. Can we do it without synthetics because that's critical." And he goes, "No." And I said, "Okay, well let's figure that out. We need to crack that code." And we did. It took a little bit. And so we figured out how to encapsulate the cannabinoids using only certified organic plants, which is really important, when you go to solubilization, anything going down to nanoscale, the second that you add something that's synthetic or synthetically modified, you're creating something that's gonna be ranging from minimal but still notable kind of hepatic stressor, liver stressor toxicity, to like incredibly not good for the body over long-term use, such as like vast popping bubbles in the liver and the spleen and breaking down into formaldehyde and antifreeze at a cellular level. Really nasty stuff.

And so when you...the body naturally filters all that stuff out at macro scale. When you take it down nanoscale, you're sneaking it past, so, it was really important to figure out how to do this at that scale, and safely, and what's good for the environment. So we figured out how to do it with just certified organic plants and pressure. And instead of going to market right away, I went to build IP around it. And so this technology enables it to get in immediately upon contact with the mucosa membrane. And most users will feel and actually feel, most people have never felt CBD because the bioavailability is so poor. No one's actually taking a proper dose. I think what people are really feeling are the trace amounts of THC as well as placebo.

But anyways, you'll, like legitimately most legitimately feel it. And it can affect in multitude of different ways with under 30 seconds with this technology, which has changed the game. And that was...We were doing that since 2014. And that it also enables the, because of the onset time, there's actually multiple bell curves of efficacy like most bioactives tend to have a bell curve effect. So more can be less effective and so with less and there's actually more than one of them, multiple, and what we've discovered is this phenomena, because of our immediate onset and absorption where the flavor will actually modulate on the spot and you will trace out the bell curves and it will go from bitter when you're in a valley, so less effective, and it'll get sweeter and sweeter and sweeter till it's cloyingly sweet, almost too sweet at the peak, like honey, and then it'll go back down to bitter again and then back up to sweet. And because these bell curves are actually not static, they're changing on a daily basis, this enables you to pinpoint a perfect dose for your body every time. Whereas where like a fat-based formulation, or even a liposomal, or slower onset formulation, you're really actually shooting in the dark and you're playing a game of averages, so some days you're going to be in a valley and someday you're gonna be in a peak. And with certain situations, you really don't want to be missing efficaciousness in dosage.

Matthew: Yeah. That is very different compared to most CBD oil. So, just to kinda recap what you're saying there is that, as you take up amount that's not really helpful or is not doing much for you, it's bitter. And as you approach optimal, it gets sweeter and sweeter and then they're at the apex, it is sweetest. And so you're getting this feedback loop on your optimal dose.

Will: Yup. And if you keep going, it will start to get better again until it's a hundred percent bitter, and then back up the sweet, and then, so each sweet spot, like each peak, is just more fuel for the endocannabinoid system to continue running triage in the body. So the first sweet spot may, you know, have systems one, two, and three on the list. The second one would have one, two, three, four, five, six. If you started there...If you started with one, it would go to three, four, five, six, seven, eight, nine for the second bell curve, etc. So each sweet spot just means more systems the body can pull into balance at once.

Matthew: That is really unusual and cool. I mean, I wish I had a lot of, you know...good thing that like chocolate doesn't go that way because I wouldn't like after one or two bites, be like, "You're good, dude." I'd be like, "Ignore."

Will: And you know that chocolate has anandamide in it, right?

Matthew: It has what?

Will: Anandamide?

Matthew: No, tell me. Tell me what that is.

Will: Yeah. So, our internal can...Chocolate is a bizarre plant, but it actually contains this compound called anandamide, which is our body's endogenous THC. So, we produce anandamide and then another compound called 2-AG inside of our body. And those are endogenous cannabinoids. Now, likely we produce more, but those are the two that we know of so far. And so it's one of the only places in nature that contains, for plants, the only one I believe that we know of that has anandamide in it. And then the other form would be truffles. So, black truffles contain anandamide. So, it kind of could explain our love affair of truffles and chocolate as a species is because they're actually, they contain these compounds that we've actually really need in artificially created deficiency of since prohibition of the cannabis plant in the '40s, because it used to be the most ubiquitously grown vegetable on the planet by every culture for millennia. Minus the Inuit, I haven't found any evidence of pre-European contact Inuit hemp growing or cannabis growing.

But, other than that, and then pretty much every culture was growing it for millennia and then feeding it to the animals. In fact, the oldest recipe book that was printed is a Roman cookbook that contains a cannabis cooking recipe. But the predominant way, that'll be direct consumption, the predominant way of consuming that cannabinoids of high CBD, low THC, full spectrum would be feeding it to the animals and then eating the animals and their byproducts and decarboxylating them that way. And so Colorado did a prerun, there's a study that shows it has up to 1% CBD content per egg, which is substantial for hemp-fed chickens. And that's like 250 milligrams of CBD per egg.

And so our ancestors ate these regularly when the CBD boosts the anandamide levels in the body and creeps the circulation. So we've seen this kind of artificially-induced nutrient deficiency, this is my hypothesis. And, yeah, it's pretty fascinating. And that explains why like, all the data shows you really need 500 milligrams of CBD to minimumly engage the endocannabinoid system with...So, most people are getting nowhere near enough. And with our technique of encapsulation, the bioavailability skyrockets because it avoids the liver and gets into the bloodstream immediately. And so, when you take, so yeah, the anandamide in chocolate, the sources when you take it with CBD, it actually enhances the uptake and the half-life of the anandamide. So CBD and chocolate go very well together.

Matthew: So if your liver is kinda like Alcatraz, normally capturing like things and like checking it out. This is like an insect flying through Alcatraz, it can just go through past all the checkpoints, and security guards, and barbed wires.

Will: Straight in. And then once it's in and past the water layer, the water layer is like the barbed wire, the gatekeeper, the guards of Alcatraz. Once it's in, it can actually mobilize throughout the body very effectively as well. So, first step is getting it in, the second step is how well is it utilized once it's in.

Matthew: Okay. So is there any trade-offs on this method that you've discovered in this IP you've put together? Like, yes, it does this better, but because of that, it's not as good here. It's more difficult to create and manufacture, or anything like that?

Will: So, we can totally scale it. We're actually set up. We're in R&D with some of the biggest beverage companies on the planet because it's fully...you can put it in some water and it will homogenize perfectly, and it won't separate. We just got the patent issued backed by Wilson Sonsini for all fluidic encapsulation and cannabinoid. So, beyond doing it the organic method, which we will only ever do due to safety, but we will help the marketplace because there are people doing it with methods that are using like nano-petroleum which is not okay. But will help stand point for regular use.

But no, we can do 30,000 gallons a day right now, and that's nowhere near capacity. So, yet to discover...Basically what it is is it's doing the same exact, our technique does it at the same exact encapsulation size that the body does naturally. So when you eat a regular fat-based formulation, or actually any fat, it's gonna sit in the gut and it can't get past the water layer, right? Which is like the gatekeeper. But once the liver comes in and then it will stimulate bile secretion through gallbladder, but it's generated in the liver, it will actually nanoencapsulate, the bile does, and creates a nanoemulsion at 40 nanometers inside the body, inside the gut. And then it can start, once it's water compatible, it makes it past the water layer, it gets absorbed in. So, we're actually utilizing the same technique as nature, just doing it outside of the body with certified organic plants. And so we're getting it in as if like immediately bypass. The body's just not efficient at doing that, so 90% of what is there. So if you ate 20 milligrams of fat-based CBD, 90% of that gets destroyed while it's waiting in the gut, some through the first pass of the enzymes and the liver bile, but also through like the acid of the stomach, etc. And so we're just much more efficient at it. But that's why it's so effective. It's utilizing the same tech essentially, it's an organic tech.

Matthew: So, the CBD drink market really hasn't taken off in a big way yet. Do you think this type...Is this what we've been waiting for in terms of...because everybody knows when they drink a Budweiser or a glass of Merlot. Yeah. Unless you're in like first time, your first time drinking, you can kind of say like, "Oh, this is how I can expect to feel after one Budweiser." And there's no, there's no way you can really do that with so much different things going on with cannabis and CBD. But you could do it, you can get close, but you just can't really dial it in precisely. So, yes. Is this what we're waiting for in terms of drinks then? Like...

Will: Yeah. I'd say there's a two fold. One is like...so, for example Suja, which is pretty substantial beverage company. I don't know if you're familiar, they do organic juices. And so they came to us and started with us and went to R&D and they went out trying to find a cheaper option and came back and they said, "That was the most hellacious customer journey we've ever been on. Talked to 50 suppliers. You're the only one that actually works and knows what they're talking about. And we don't want to violate any art or patents. So, we're happy to pay it forward and put on our letterhead our customer journey on how Ojai is the only way to go when it comes to beverage." So, that was nice.

And yeah, there's definitely an issue of people jumping in and getting like, seeing the green rush and a lot of it is like resupply, but they have no idea what they're doing. They're not going to be stable. Like, they'll separate out, or they're going to be violating our art. And so like, from a technical support side, people don't get...they're not...They're just trying to make a buck as opposed to really caring about the consumer, and the space, and the environment. And so, I think that's been a point that's kinda held things back. And then also it's the trepidatiousness of big box to roll out distribution, which they're ready to do. It's really the FDA, it's the big box side. The companies are waiting, the big players, to distribute, but they don't want to do like checkerboard distribution. And so, with the FDA opinion clarifying, because really the entire clause that they reference on the 201ff3bii, that their opinion is based on, the only IMD, or investigational new drug trial that took place that they reference is for an isolate. It's an isolate CBD product, and thus it's a different article from a full-spectrum or broad-spectrum hemp extract. And so that's gonna be clarified, and then we're going to see some of the biggest beverage companies on the planet rollout skews. And we're in R&D with them.

Matthew: Yeah. So, let's talk a little bit about intellectual property or IP. And, you know, most of the cannabis companies I speak with are more product-oriented first and then they, the idea of IP pops in their head, but it's always kind of a caboose. It's not the locomotive. And you seem to have a different orientation around the IP. Can you tell me how you think about IP and your kind of strategy with it?

Will: Yeah. So, in IP, one thing is, like, if you put a product to market, it is now considered prior art against yourself. Meaning, if you out live and you sell it and then you try and patent it, your selling it counts as against yourself and it says, "No. Not new. You already did it." So, IP law is not necessarily logical. But it is driven via logic if that makes sense. So, that's one part of the strategy is not playing checkers and then playing chess. And our ultimate goal is to be a steward of the plant and for the planet. And that's what we do and will continue to. And then at the right time open source. So, our IP attorneys are ranked number one globally for biotech as well as just general IP enforcement and development. They represent Salesforce and worked with Apple and all the Silicon Valley early players as well as Pfizer and the big guys. And so working with them since 2014, the focus was, I basically I channeled my entrepreneurial kind of excitement into developing IP. And so now our portfolio ranges from like the encapsulation techniques of cannabinoids and so like, it's not just applicable to CBD, it's for all cannabinoids. And we're not gonna roll it out until it's federally legal. But with the...I can tell you that 0.3 milligrams of THC gets you completely off the ground in 30 seconds.

Matthew: It's just the delivery, the delivery [inaudible [00:22:48].

Will: Consistently at top. Yeah. It's basically but it bypasses. It's not like an edible where, you know, like it becomes Δ-11, it just is all Δ-9. So we are gonna have like beverages where you know exactly what your dosage is and the user can feel it in 30 seconds and it's just like they had a dab or a vape, but it's through a consumable [crosstalk 00:23:07], but yes, that's pretty...

Matthew: So, that would change really cultivation quite a bit too then.

Will: Yeah. You can use a hundredth of it.

Matthew: Oh my God. I just heard a thousand cultivators sigh out loud.

Will: I think we're nowhere near like capacity. I mean, like, we're talking about an incredibly bottle-necked market. And once full legalization takes globally, I don't think...I do believe cultivation, unfortunately, just like any industry, it will go down to commodity. I don't believe it's gonna...that, I liken it to cannabis to grapes and in fact TOR and growing style impacts the epigenetic expression and the terpene profile even more so than grapes. I think we'll probably piss more inventors off. They work very well together. And that's, I think it has a whole new scope of market. But there's always gonna be two buck chuck, but the craft boutique delicious micro cultivars are never gonna go away. I think that the...particularly in this industry, people do not want to have just a generic product. There's gonna be these craft micro growers and I think that's here to stay. Anyways. So yeah. Do you wanna keep going on the IP?

Matthew: Yeah, I mean this is powerful stuff with the IP. I think there's so many applications. Is there any applications you see coming down the road for cannabis technology that's maybe not on people's radar, but it's around the corner in the next three to five years that's gonna make a big impact?

Will: Yeah. Yes. So, we figured out the antidote to THC intoxication.

Matthew: Oh. Wow. What's that?

Will: So, we can get the user through our prelim completely sober in under five minutes, and we believe with nasal it should be 30 seconds. And we got the patent issued, and it's a pregnenolone, which is a neurosteroid derived from yams in conjunction with all cannabinoids. So, actually the patent issued is not limited to use as antidote and there's going to be a lot of uses on biotech as well. And effectively it basically, the CBD shuts down agonization, these one receptors that THC is agonizing on the serotonin front, and then the pregnenolone blocks the CB1. And both are selective and they're completely safe. In fact, the humans, we have a built-in safety mechanism where people can actually smoke themselves sober. It takes a lot, but it's possible. And what happens is when there's too much agonization of THC on CB1, the brain floods itself with pregnenolone. Unfortunately, the people who have eaten one too many cookies, they have not eaten close to as many cookies as they need you to get that response to kick in. But it's our built-in mechanism to prevent toxicity. It's one of the likely reasons why we don't have any...there's not a real toxicity with the plant where it's totally safe. It just they just think they're dead. They're actually totally safe.

Matthew: They wish they die sometimes.

Will: So, anyways, that's the matter. We can get it in and tested it on L.A. Cannabis enforcement officials.

Matthew: I'm just waiting for the day when I can take something that has like a 30 second onset or three-minute onset for motion sick, because I fly all the time, but I get motion sick every time I do.

Will: All right. Have you taken our elixir.

Matthew: I haven't. I have some. I'm gonna try it here. And someone on the team has tried it and they gave good thumbs up, but I haven't tried it. And I wanna try that. But then I'm thinking, in the future it'd be nice to be like almost not...Like almost like a twilight sleep for flying and then maybe take one of these nasal sprays or something and have it flush out.

Will: Pop out.

Matthew: Yeah. Pop out. That would be like just, "Oh, we're landing." Like, "Pshh." Right after landing.

Will: There's this book, this is Steven who's one of our advisors and one of my friends, he just wrote this book called...he wrote the book, "Abundance" with Peter, and "Bold," and "Stealing Fire," which is all about...and "Rise of Superman," which is like flow and human performance. He just wrote this, in my opinion a masterpiece. It's just brilliant. This book called "Last Tango in Cyberspace." And it's a superhero. It's like a cyberpunk future kind of Philip K. Dick-esque. But all of the tech in there is like actual stuff he knows. He knows the people who are making all this tech and it's crazy how close to the...We are really in the future, right? But anyways, this superhero, his power is like hyper-empathy and it's activated by smoking cannabis. And one of the pieces in the buck is Jamaica Airlines where there's no kids allowed and it's all cannabis-friendly.

Matthew: Wow. Like Jamaica itself.

Will: Anyways, that's what I imagine when you talk about you can go up and have the...Essentially, yeah, we have altitude control with our tech where you can go immediately up and you can come down immediately as well.

Matthew: Yeah. That's very attractive to be able to dial that in for specific use cases like we're talking about right here. That would be super valuable.

Will: Yeah. And then...Go ahead

Matthew: And then let's talk a little bit about your plans for THC products. Like, we've talked about CBD quite a bit. I mean, this is all cannabinoid science, but what about THC?

Will: Yeah. So, as soon as it's federally legal or the States Act emerges around the corner, we will open up the tech. Like I said, I've done a, not in our lab, but just a bench experienced where 0.3 milligrams works in 30 seconds and we can scale that. And so, essentially, like you were talking about, I see it going to metered dosages where you know that a beer is going to affect like this, right? And so that's going to be the future I think of consumption. Also what's unique with our tech is that...So, terpenes direct cannabinoids to particular payload sites in the body, and so you really notice this with the people vaporizing or smoking is that, you know, indica tends to be sedative, whereas sativa tends to be uplifting, and cerebral, and energizing.

And the difference between those two strains is not really the minor cannabinoids at all, nor the THC content or CBD content, it's actually the terpene variance. And so I talked to Michelle Saxton, is probably one of the leading researchers on this, but I called her up in 2015 and I had this, I was walking and I had this insight of, I saw that the terpenes as being like little tugboats to the cannabinoids and directing them where they go in the body to the different CB receptors. And I called her and she had, at that point that, and that that's what she was finding in her studies. And so what we discovered, because of the immediate onset, you can actually custom curate moods and affect, on the spot just using terpenes, whether they're from cannabis or not, and viscerally different effects. So, you can feel sedative and then you can take the CBD or the THC and then it would, you smell a menthol or peppermint in a beverage, and it would hit like uplifting and it shifts gears. So, it can be customized mood as well as on the medical front in biotech, you can do custom payload delivery sites. So, I think that's going to be just...being able to drink your mood effect on the spot and then shift it up, I think that's gonna be a major trend in the future.

Matthew: Interesting.

Will: Yeah. It's pretty cool. And because terpenes are not bioavailable, they're even less absorbed via ingestion. So, like a cookie is a cookie, right? Like, you can market that it's like an indica cookie or a sativa cookie, but you're not getting the terpenes. They're even less bioavailable than the cannabinoids, really not getting in or absorbed through ingestion. And the real way that they actually bioactively respond in the body is actually through olfactory and crossing blood-brain at the hypothalamus and then deploying out. And so you need that inhalation technique. So, if you drink it, you're actually pulling it up through the mouth cavity and then through olfactory, and then because of the immediate absorption with our tech, the timing syncs up and you can play that way.

Matthew: This is amazing stuff. It's crazy to think how fast this is evolving. It just, like you said, that book, Peter Diamandis, that kind of futurist you're talking about, and his books and stuff, it's very...it kind of I think about this. And also, you and I were talking before the call about your supercapacitor made out of hemp. Can you talk a little bit about that? Your idea?

Will: Yeah. Yeah. So, back in 2014 at BBC, the BBC ran an article about making supercapacitor graphene equivalent, actually outperforming graphene out of hemp. I was like, "Of course, this plant is crazy. What doesn't it do?" And so these Canadians had figured it out. But then...So I was waiting. I thought, this is gonna change the entire face of the planet, right? The implications are just absolutely massive, and nothing happened. And so I did some due diligence and looked in and went to our RP group and brought in a PhD from Stanford in Molecular Battery Engineering to look at it, and I said, "What's going on? Is there a scale issue?" And he goes, "100%." Looked at their art, and he's like, "You can't scale that." And so we figured out how to actually scale it and bring it to at scale to production. And Lawrence Livermore Berkeley Labs, the National Labs looked at it and they went, "Oh my goodness, this is going to work." So we're in Creda. And so once we really pull the trigger, they believe they can get it in about eight months to commercial scale for stage one. And so our IP also holds it on utility front. So, for rockets, and cars, and cell phones, and city grids, and jets, and all sorts of cool stuff.

Matthew: Talk about how that might transform, like the aviation industry.

Will: Yeah. So, the reason we don't have electric jets is because the battery, or it's like big jets, right? They have like a solar-powered little plane that's fairly new, right? But I was actually at a bar in Texas and I was just thinking like, "Why don't we have electric planes?" And I looked around and everyone had these name tags on. And so I said, "Okay, so what..." I asked the guy next to me and said, "What convention is this?" And he said, "Oh, it's in aerospace." I said, "Oh, that's cool." I was like, "What do you do?" He goes, "Well, I design and build jets." And I was saying, "Awesome. Wait. Can I ask you a question? Why don't we have electric jets?" And he said, "Well, the batteries would be too heavy." And I said, "Okay. So, in theory, if we 3D printed graphene supercapacitors into the fuselage of the plane, could you have an effective electric jet?" And he goes, "100%." And I said, "The reason why we don't is because the, like the graphene's too expensive?" And he goes, "Yep, 100%." I said, "Okay, thank you." And so that's in our IP portfolio.

So, in theory, we will have electric jets with it. I mean, we can 3D print using hemp plastics for the components, which some, I think, airlines are beginning to use. I know Audi is doing hemp PLAs and Henry Ford made his Model T out of a hemp plant. So, I'm an optimist. I think the future is incredibly bright. I think this plant has catalyzed us through kind of each epoch, and provided a technological advancement to expand and simultaneously provided the micronutrients to buffer the oxidative stress that comes with that. And we artificially pulled it in the '40s, but I think it's gonna enable us to have appropriate technologies and simultaneously leading to a cultural kind of shift and integrate the indigenous wisdom and all sorts of things that we get to grow as a ecological species, right? We are functions of nature. Yeah. And I really do see that we've got the tech and that's why the mission of the company is to be a part of that catalyzing of ultimately the dream and which we'll do is when the time is right open source where you can 3D print your battery for your house or your car for free from the cloud out of the hemp that's grown locally. And that's our mission vision piece.

Matthew: And where are you in the capital-raising process?

Will: So, we've done series A, I've got a great, incredible new team and an existing team are all superheroes. And I've got the Tom Hicks who is president of Naked Juice and then also Ryan Hansen's the non-energy division inside of Monster. So, he was president of Naked Juice, sold to Pepsi, brought it Pepsi. And Hansen's brought that to Coke. He's now our chief commercialization officer, our chief growth, and then our new CFO, Allan George was with North Castle private equity with Naked Juice. And then was with Hansen's to Coke. And then TPG tapped him to take elf Cosmetics public, which he did. And now he's in-house and they've worked together for 20 years. They're just absolute rockstar industry experts.

And so we're putting together a...And then also my friend Tim Brown, who is CEO of Nestle North America Waters, he's partnered with us to help accelerate. And so we've really got the all-star crew for CPG and we're doing a 15-mil bridge and we've created really cool instruments. It's really friendly for all parties. And that's going to be the last entry point into parent Co. And I'm doing it because I don't wanna dilute CPG. We've been running that brand on stealth mode and it's just exploded through word of mouth because it actually works. And that's the Ojai Energetics brand. And so we get all the time, people are like, "Oh my God, I didn't think CBD worked. This is what CBD feels like?" Due to the bioavailability. And so yeah, there's that. And then we're gonna just sprint out, build up those out, and it's a lot of fun.

Matthew: Are you still looking for accredited investors for the capital raising process or...?

Will: Yeah. We are open. Yes. We've got a syndicate. So, 100%, we're in that process and it's moving along, but we are interested.

Matthew: Okay. And I'll ask you how accredited investors can contact you when we close. But before we do that, let's have a few personal development questions where listeners can, you know, get a sense of who you are personally. We talked about abundance and Peter Diamandis' book "Abundance" and he has a few other books. Is there any book that's had a big impact on your life or your way of thinking either personally or as an entrepreneur that you'd like to share?

Will: Yeah. Buckminster Fuller's "Operating Manual for Spaceship Earth." It's incredibly dense, but it's amazing. I struggle with it, but he's one of my heroes. He's a systems thinker, but extensively talking about how it's a systems design issue on the planet, it's not so much a resource issue at all. And one of his quotes is like, "When we divest from weaponry and invest in livingry, we'll have a completely different planet that's enjoyable." He's brilliant. So yeah, that one, for sure, is probably one of my favorites.

Will: Yeah. And, you know, I see... So like, I liken us to, we're just parts of nature, right? We're weird. And then "Behave" is a book I'm reading right now by Sapolsky, and it's incredible too. It's like...do you wanna... That is the guide of why humans are so weird, and we do what we do from a behavioral perspective of like, we can be incredibly kind and incredibly awful with the wind. And it's explaining the neuroscience behind it.

But the metaphor I like is like a caterpillar. And if you look at a caterpillar in terms of how it behaves in the ecology, it's actually a parasite. It will just consume, and consume, and consume, and consume, and amass all this energy, and it will actually, can nearly take it down the keystone species of the ecosystem, meaning it will collapse the entire ecosystem. But this is just its nature, right? And then before it does that, it will, before it collapses the ecology it will break down into...go into a cocoon and then the chrysalis and it turns into a mush, but it maintains the old operating system or immune system of the caterpillar. But these new cells begin to emerge called Imaginal cells, and they're carrying the DNA of its future self, which is the butterfly, but initially the old operating system, and we can liken this to paradigm on the planet of human operating system. Sees it as a threat, and so it kills it off. But then they're persistent, and then thankfully, as part of our natural mechanism is that the tipping point happens around 14% and carries through nature on average. And you don't need a 50% shift, otherwise we would never get anywhere. But the 14%, around 14% of regeneration of these Imaginal cells, all of a sudden the immune system of the caterpillar goes, "Hold on. That's actually a future version of myself. And I need to help it continue for me to survive." And so it actually enable...it switches from killing it to creating this protection buffer and enables it to recode it into these new cells. And they're still raw pockets. But at that point, it's exponential. And it fully recodes into this butterfly and it has to like break through and gain its wing strength by pushing, and it's uncomfortable, but it breaks through the chrysalis. And all of a sudden it's this...Now it's a pollinator, and in fact it's actually building multiple ecosystems.

And it goes from nearly collapsing one, but it needed to amass all of that energy to goes through such a massive transformation to then be able to actually protect and build multitudes of the ecosystems. And I see us as, and actually mycorrhizal fungi has a similar process. It starts a parasitic with a plant and then becomes a symbiotic life force. And I believe that we are...we've hit that critical mass. We're the Imaginal cells, we're recoding the model, it's happening everywhere. And we're moving into a symbiotic stage of organism where we can work in harmony. And so, not to judge where we're coming from, it's just is where we come from as part of the natural cycles and processes to then emerge. I believe that the Internet, which was brought about by the DoD, right? Has now led people to see that actually, hold on. There's more than enough resources all over, we're actually, we're all family and, you know, everyone just wants to eat and skateboard or whatever. It's bringing us closer and obviously there's oscillations and breaths, but there's ups and downs, right? But ultimately we're living on less war-based planet than ever before. That standard of living is getting higher everywhere overall. And I do believe that we're emerging as these symbiotic potential beings to like really build an incredible model. And we're on our way.

Matthew: That's awesome dude. Great explanation of the Imaginal cells. I had not heard that a description before. Well done.

Will: It built on from Barbara Marx Hubbard who has passed. I wish I met her, but, yeah.

Matthew: And, here's a Peter Thiel question for you. What is one thought you have that most people would disagree with you on? It can be about anything, not necessarily about the cannabis industry.

Will: Initially, I think, saying that we're going through a, we're actually, the litmus test of America is we're actually on an upswing despite the appearances. I liken it to like a herxheimer response, which is a term, it started from Lyme's disease. But, when you start detoxing and you start getting healthier and you move in a healthy direction, let's say you do a juice fast, or you just start taking steps to get healthier, the toxins that are stored deep within start coming and mobilizing and going to the surface. And you feel like shit, pardon my French. You get sicker. You seem like you're getting sicker, but in fact, you're actually getting healthier. And it's much easier...you have to be vigilant in this process in the herxheimer because you gotta pay attention because you can get actually harmed from these that are mobilizing and coming out.

But it's counterintuitive. You're actually not getting sicker, you're getting healthier, but you feel like you're getting sicker. And I believe that we're witnessing this another shift of where we had this ear to the collective unconscious, all of these, the things that we're now experiencing of racism and all sorts of the creepy crawlies of the human condition are coming out to the surface where everyone's talking about it. And it's a paradoxical theory of change where you cannot change something you don't accept exists. And I believe that it's much...we're actually on an overall health trend, becoming more aware, more engaged, more awake, more compassionate, and we're just seeing these things that were there. They were just hidden and now they're getting illuminated. And if we're more sensitive to it, so it feels like it's getting worse. But in reality, it's part of the necessary process to jump and grow to the next level. And it doesn't mean to go, to not be vigilant and not pay attention. In fact, the opposite. But it...Yeah.

Matthew: That's really...You know, I know what you're talking about there because I've done a seven-day juice cleanse. I've done many, but the longest one I did was seven days where I could only drink juice. And what you're talking about is what I called a toxic crisis.

Will: Yeah. Day three, right?

Matthew: Yeah. Day three. Your tongue turns into this huge swollen white thing, and you feel like crap, and then like some point you start getting very zen and you're like, "I'm not..." And you actually crave the foods that are coming out. Like, "I had a cheeseburger a month ago and I feel like I'm craving that." And it's so weird how that works. And you go through and have this almost quasi-psychedelic zen thing that happens and are like, "Oh, I can see..." Like, "I can't..." Like, "I'm so glad I made it through that and..." But it's good to know that's on the other side because it just it really gets acute there for a while. So, well said. Now, as we close, Will, let listeners know, if they're accredited investors, how to connect with you and then for everybody that's interested in your products, how they can find them.

Will: Yeah. Great. So, ojaienergetics.com for our products. And then for accredited investors, if they reach out to info@ojai, O-J-A-I, energetics, E-N-E-R-G-E-T-I-C-S .com, someone will reach out.

Matthew: Great. Well, Will, you've got so much going on here. We're gonna have to catch up at some point in the future and find out how all that's going. Good luck with everything and keep us updated.

Will: Thanks so much.

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