Ep 367 – Labs Are Saving Big Thanks To “Used-Car Dealership” of Cannabis Testing Equipment

yvette pagano gentech scientific

With the demand for cannabis testing services on the rise, one company has found a way to provide top-tier equipment at a quarter of the price. Here to tell us more is Yvette Pagano of GenTech Scientific, a supplier of quality refurbished laboratory equipment for the cannabis industry.

Learn more at https://gentechscientific.com

GenTech’s $25K for 25 Years Giveaway: https://gentechscientific.com/25000-for-25-years

Key Takeaways:

[1:14] An inside look at GenTech Scientific

[1:52] Yvette’s background in manufacturing and how she came to enter the cannabis space

[7:18] GenTech’s biggest customers in cannabis and the company’s wide selection of lab instruments

[10:26] How GenTech sources its equipment from universities and laboratories across the world

[12:48] How GenTech is able to save clients up to 70% on top tier lab equipment

[17:50] The first steps to starting a cannabis lab

[20:48] GenTech’s training and education programs for cannabis labs

[25:20] Where Yvette sees the cannabis testing market heading over the next few years

Click Here to Read Full Transcript

Matthew Kind: 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 dot com. Now, here's your program.

Sinead Green: The cannabis testing market is seeing some major growth opportunities as demand for testing services continues to outstrip supply. Here to tell us more is Yvette Pagano of GenTech Scientific, a supplier of quality refurbished laboratory equipment for the cannabis industry. Yvette, thank you so much for joining us today.

Yvette Pagano: Thank you for having me.

Sinead: Absolutely. It's such a pleasure to have you on, and I'm really looking forward to hearing about all the cool work you're doing at GenTech. First of all, Yvette, can you give us a sense of geography, where are you joining us from today?

Yvette: Yes. I'm calling from Western New York State. I'm at work. GenTech Scientific is located in Arcade, New York. That's about 40 miles south of Buffalo, and it's a rural community.

Sinead: Okay, great, awesome. What is GenTech on a high level? Can you give us a snapshot overview of the company?

Yvette: Yes. GenTech Scientific buys, sells, and services analytical lab equipment. We are industry agnostic and also brand agnostic. We buy equipment on the market, refurbish it, and we sell it to labs and research facilities, so they can conduct their research and perform testing on everything including cannabis.

Sinead: Okay, awesome. Yvette, before we jump into the nitty-gritty with GenTech, I really want to get a sense of your background because I know you are relatively new to the space. We've talked previously, and I know you've been a longtime consumer, and you've enjoyed cannabis for many years now, but you really only got into the space professionally a couple of years ago. Can you share a little bit about your background and what you were doing before GenTech?

Yvette: Yes. My previous life, I was a CEO president of a precision machine shop. I worked in manufacturing. That's milling, turning, and mill stamping. Was a global company, so I definitely understood how to make money in a commoditized market. It was a family business and record sales, record profits, and doing well on that end, but family businesses can be difficult. I felt like I took it as far as I could, and I got a great offer to sell my shares, and I did. I left that industry, and I don't know if you call it a midlife crisis, but I'm like, "What am I going to do here?"

I knew I did well enough on the sale that I didn't have to get a job instantly but not good enough that I could just retire. I really did a lot of self-exploration and corporate coach and find your why and in the end for me, I am very passionate about cannabis. I care deeply about the industry and social justice and advocacy and normalization. It's just always been a part of my life and when I started at car engineering, my previous company, 2006, I didn't even know you could work in cannabis.

Then all of a sudden, I had this clean slate. I made a determination that somehow someway I was going to become a part of this industry and be on the right side of history and get in the game. I joined up with some guys in Toronto, Merchant Bank, and did some consulting in the space, and that's really how I started meeting people and attending conferences and being part of different groups and COVID and all that. Eventually, I found my way to GenTech, but I have been an accredited investor and doing those kind of moves for the past several years.

Sinead: Oh, wow, okay. I feel like there’s no better segue than that to jump into GenTech because I feel like you've only really gotten into this space as a company a few years ago. How long have you been serving cannabis and what percentage of your customer base is in cannabis?

Yvette: GenTech has been around for 25 years. They have been serving a variety of industries since they started. Our biggest percentage as an aggregate is academia, selling to universities and research centers around the world. The previous owner, he sold to a private equity about a year ago. GenTech is now a liquid capital portfolio company, but the previous owner, he just a smart guy. He saw it pretty early, right around 2014, he said this is going to be big. He was pretty proactive. He sponsored normal, he started going to some trade shows, and positioning himself as an industry leader and making GenTech an industry leader.

I give him a lot of credit for who are having that foresight, but the core thing for GenTech is we're testing. We're testing and research. You have to test your cannabis. You have to. You need instruments that can perform the test to your cannabis. There are six major tests that an accredited lab needs to do. GenTech sells the analytical lab equipment that allows you to conduct these tests. Just like you're building a house, you need a hammer, you're building a testing lab, you need an HPLC machine, and that's what GenTech does. Just like a used car dealer, we find the equipment on the open market, we're brand agnostic.

Agilent is a really popular brand in cannabis testing. We sell quite a bit of Agilent, CyEx, Waters, Thermo, Fisher. We get it from brokers. We get it from labs that are closing, trade ends. We buy internationally. We pick up this equipment, and then we refurbish it, and then we offer it to any industry, but particularly cannabis startup labs are really hot for the product because they've got these unmet needs in the marketplace, and we're the tools to do the job, we're the machines who run the tests is basically what we have.

Sinead: That's great. In the cannabis space, you said it's mostly labs, but do you also, are many of your clients also growers, dispensaries, manufacturers? Who makes up your cannabis client base?

Yvette: Yes. The cannabis clientele, a lot of it is research, academia, Colorado State [unintelligible 00:07:38] they're a pretty big client and they've got a pretty active cannabis research within their facility. That is a big person for people who will take it, but it's these accredited third-party labs who are really verifying that your cannabis is good for sale, and then your big manufacturer. A dispensary or a retailer, they don't really have a use for testing equipment. By the time the product's to them, it's tested, it's packaged, it's ready for sale. The other businesses on the supply chain will use our equipment.

Extraction's really big. You're doing extraction, you're making oils and stuff for your vape pens. In order to do that, you use solvent. One of the tests is to prove that your dissolute or your oil is solvent-free. Send that to an accredited third-party lab and they would use one of our instruments and they would determine that. Mass spec is really the preferred instrument for that. If you're a big extractor and you want to know before you send all this dissolute to an accredited third-party lab if it's truly solventless, you may also buy a mass spec, and you may run your test in-house. You say, "Okay, this is solventless, now let's go send it to the accredited third-party lab for that seal of approval."

If you're growing, you would want some of our equipment because you have to be able to test for mold and for pesticide. Again, you're going to be sending this out to an accredited third-party lab, but you yourself might want to get a heads up and be able to run these tests in-house. If you're on the food and beverage size and you're making a brownie and you're curious how potent it is, if it's got 30% THC or how strong is my brownie, you would want to use HPLC machine, and that's the preferred way to test for potency. Again, you might want to do that in-house when you're in R&D phase and keep trying different brownies and getting the potency and then when it's all said and done, you would send that brownie out to an accredited third party lab and they would verify, or they would also confirm, so different people on the supply chain are using it to check and double-check and do research.

In the end, if you want to sell cannabis legally, it's got to be tested and it's got to be tested by an accredited third-party lab.

Sinead: Absolutely. Okay. Very interesting. And so where do you usually source this equipment because it's not, this equipment isn't just specific to the cannabis industry and what we use it for. This is equipment that is used across various industries, and in cannabis we're now starting to adopt a lot of those practices from other industries…

Yvette: That's a good question. Where we get the equipment is pretty much on the open market globally. Anybody listening right now, if you have a lab that is closing or you have equipment that's obsolete, or you bought the wrong equipment and you're looking to get out of it, you want to sell it, GenTech would love to make you an offer on it, so please contact us. There's also brokers, so there's people that literally that's what they do, so we work with certain brokers. We're very close with the university community so a lot of times when universities are selling or they're looking to upgrade or change around their lab, they'll come to us.

We get a lot of trade-ins because we've been around for so long, eventually somebody will need something new. Sometimes people buy stuff for an experiment, like we just bought something back from Cornell university and they went a different direction. They lost their funding for that specific thing. It was in food science. They just didn't need the machine anymore. There's nothing wrong with it. They just literally weren't using it so we bought it back, so those things will happen, technologies change and certain things like that. Like I said, kind of like a used car dealer, we just get them wherever we can get them and based on our reputation and our ability to buy.

Sinead: Okay. Very interesting. That's something I was curious about because the supply and demand gap right now for cannabis testing is still insanely wide and I feel like part of that is just, particularly with laboratories, it's really expensive to start a lab. Right now we're seeing so much demand for these testing services, but there aren't a lot of facilities available right now. I think that's partly to do just with how expensive it is to start those so can you tell us a little bit about the ROI GenTech offers laboratories, and maybe tell us a little bit about the saving opportunities. Instead of buying new, how can these laboratories really benefit from going through GenTech and getting their equipment through GenTech?

Yvette: I think that's the reason why we do so well with universities, because they truly, truly understand the value of refurbished. Refurbished is just a fancy word for used and so our equipment here at GenTech is certified refurbished. We guarantee that the equipment will perform at the OEM, original equipment manufacturer standard. If you relate it to a car, if you say, "Hey, this car, when it was new from the factory could go zero to 60 in five seconds", then GenTech will certify that our used 2017 Agilent can go to zero to 60 in five seconds for that kind of an analogy, be able to perform the same tasks and get the same scientific result. Just like a used car, these machines, they lose their value when they go from brand new to used.

If you wanted to do, we're basically 70% off. 70% off retail is a good way to think about it. If you want to be a full-scale, accredited cannabis testing lab in US, you need to be able to do six major tests. It's heavy metals, it's terpenes, it's potency, pesticides, mold, and if you went to Agilent, which is one of the most prestigious brands, and you bought all this equipment to do all these tasks, brand new, it would be 1.2 million dollars, and it'd be great stuff. If you went to GenTech and you went with Agilent, but instead of a 2021 brand new, you're going with a 2017 or even a 2010 piece of equipment, you're, for a complete cannabis testing lab, all in, definitely under 400,000.

We're going anywhere between 200,000 and 400,000, depending on, again, exactly what test they want to do, where they're located, et cetera, but it's a tremendous savings. You can either do double or triple your throughput if you were going to buy new, all of a sudden you can buy three machines and get that many more tests done or you can just get in at a lower price point and be able to start monetizing your investment quicker because you paid less for your CapX, your capital expenditure.

Sinead: Wow, that's a steal. Man, that's insane.

Yvette: Listen, I always say the biggest problem with GenTech is not enough people know about GenTech. I believe that with my whole heart, I'm like as soon as the cannabis industry knows what we have and what the price is and what the equipment is capable of doing, it's really hard to resist.

Sinead: Right. Oh my goodness. I can only imagine, as you said, as more people hear about GenTech and you guys get the name out there, you're going to start seeing some major- just I feel like an influx of customers. How are you preparing for that demand? Do you think you'll ever run into any issues with your supply chain or do you think you'll be able to really meet the demand there?

Yvette: That would be my best problem ever is that, we can't get enough used equipment fast enough to turn around and sell it. Again, there are certain pieces of equipment. There are particularly hot certain brands and so certain things turn faster than others but right now, we are able to keep up with the demand and I'd say 25% of our clients are cannabis-focused. Like I said, we've got our food and beverage, our [unintelligible [00:17:13] big pharma, oil and gas, so we have all these other industries that are also contributing to our equipment.

They're [unintelligible 00:17:22] an HPLC machine they, they were testing for pesticides, maybe they were testing for fruit or whatever. You can test anything for pesticide so the method for testing agricultural products for pesticides, that's been around for a really long time. Now you're just taking the same idea, same machine, but you're just testing now pesticides in cannabis.

Sinead: That makes total sense. It's just amazing. Just the savings that you guys are offering. I wanted to ask you how you think it's best for a lab to go about budgeting if they're trying to get off the ground and they're trying to prioritize which pieces of equipment they want to outfit their lab with first.

Yvette: We want business really, really bad. We want you to buy equipment like crazy. I'm telling you the number one thing you should prioritize is getting yourself a good lab technician or a good chemist or both. That's what you need to think about if you're setting up a lab. If it was super, super easy, everybody would do it, and we have seen labs fail, and it's not because they didn't buy elite equipment from GenTech, it was because they didn't know what they were doing. My background in manufacturing, I know how difficult it would be to set up an ISO-compliant, manufacturing shop floor because I've done that, I have lived that, so there are strict regulations.

Again, just like my background's in machining, if you buy the best horizontal mill, seven-axis, this amazing mill, it's not going to produce these great parts. You've got to have a skilled guy who can come in and program the thing and read the prints. It's the same thing, whether you get refurbished equipment or brand new equipment, if you don't have chemists and intelligent quality people who know how to run the equipment and they understand chemistry and electronics, you're not going to be successful. That's my first piece of advice is, if you're green, no pun intended, make sure you get with a partner who has set up labs and who understands what do you need to do.

For an accredited lab, there's six major tests you need to be able to perform. Most people seem to start with potency, so it seems like the intro one is being able to test for potency. That's in HPLC machine but again depending on what you're curious about or what you're trying to do, would lead you to which equipment you would purchase in what order.

Sinead: Okay, got you. First step, if anyone out there listening is thinking about going this route, like you said of that, first step is to get a technician, someone who knows what they're doing. If our listeners don't have a background in that, I can see that would be a problem.

Yvette: Yes.

Sinead: That said, at GenTech you guys do offer training and education, don't you? Can you tell us a little bit about those resources that you have there?

Yvette: Yes, so we do offer training and education. We'll install the machine so you have to pay for an install. If you purchase a machine from us in the US or Canada and you want it installed, then we refurbish the machine. We ship the machine out to your facility and then one of our technicians comes to your facility and hooks up the machine. During that time, they provide training and familiarization. They'll help you get one of your samples through and make sure the machines are working but, again, sadly, we don't offer--

I've never used an HPLC machine before 101 training, so we request that the person that we're with has got some experience in chromatography and has used a machine in the past. We do have some partners that that's sort of all they do. They do the method development. They both happen to be women. They'll help you spec out your labs and decide what equipment you need and where you're going to put it and how everything's going to be networked together. There are outside consultants that we partner with that we can lead our customers to.

At GenTech, we're really selling the equipment, and then training the customers on how to use that equipment is our core offerings. We also will service obviously, so if your machine is broken, even if you didn't purchase it from GenTech, our technicians will come out and we'll service you. We are global. It's called TeamViewer but it's basically a way for our technician and the remote technician to look at the same thing at the same time. We are able to do team viewer sessions for clients that are in other parts of the world to try to help them diagnose and train over the phone. Those are the main ways that we connect with our customers in terms of training and education.

Sinead: Okay, very cool. That's awesome.

[crosstalk]

Yvette: Wait, I have to do-- Can I do one more thing [unintelligible [00:23:29]

Sinead: Oh, absolutely. Go ahead.

Yvette: In GenTech, like I said, we're with a pretty rural community, so literally in our backyard right behind the building, it's called the Arcade Attica Express and it's this big choo-choo train. People come, it's like a tourist attraction and they ride the Arcade Attica Express. It's a two-hour train ride through beautiful western New York. They have different promos, [unintelligible [00:24:00] like a drinking one.

Sinead: Oh my god.

Yvette: Kind of as a joke but not a joke. We ran a campaign called Train on the Train and we were like, "Hey, you can always come to GenTech and train here on our shop floor." Check out the instruments you're going to buy and train here at our facility and anybody who can make it to Arcade for some training can also get a free train ride on the Arcade Attica Express.

Sinead: Oh my gosh. That's amazing.

Yvette: It's amazing, funny, and cute.

Sinead: Oh, that sounds so fun.

Yvette: Sadly, my little gimmick didn't work but I'm going to run it again next year. I'm getting someone on that train at some point [chuckles].

Sinead: Maybe it'll be one of our listeners.

Yvette: I hope so.

Sinead: It sounds so fun. You mentioned one of them is more of a-- I don't know what the booze cruise equivalent would be for a train but whatever the--

Yvette: I hope so. Ale on the rails.

Sinead: Ale on the rails, oh, they did. They found a nice rhyme there [chuckles]. That's awesome. That would be [unintelligible [00:25:06].

Yvette: Yes. If somebody calls, they might be able to arrange a special event since we are friends with the conductor.

Sinead: Oh my god. That is amazing. That's so cool. Wow, that's so fun. Very cool. Yvette, I wanted to turn to some personal development questions here in a second but before we turn to that, I wanted to get your opinion on the federal legalization timeline and how you think that's going to impact Canada's testing market which at present is getting some pretty amazing estimates from now to about 2026? How do you think federal legalization is going to impact to that estimation? Where do you think things are heading there?

Yvette: I think it's all coming up roses. For a company like us, I, myself, am completely for federal legalization personally. I would expect it within the next 3 to 5 years. My favorite news clip is that and I can't remember his name but the Governor of Wisconsin and they're always asking him how he feels about 20 million of his state's dollars like going into Illinois. I think they just have to keep asking that question to enough governors. I think it's going to be very similar to gay marriage in America. I think you're going to get enough states that are leading it and then the other states are just going to go like dominoes because it's just where the country's headed.

Obviously, even if you look at it politically, you've got 55% of Republicans in favor and I think, I don't know, 70% of democrats, so I think it's definitely coming sooner rather than later. In terms of how it's going to affect the testing market and GenTech specifically, again, I think it's going to be extremely positive. Every state is going to have their own rules and regulations and we've got the equipment that's going to meet those requirements. You think about alcohol, that's legal everywhere, but in Pennsylvania, you have to buy a keg from a bottle shop and in New York, you can get a keg in a grocery store.

In California, you can buy whiskey in the grocery store. They have different rules depending on what's up. They might say, "Well, in New York, the potency can't go above 30% percent and in Massachusetts, the potency can't go above 25%." GenTech doesn't care because our equipment is going to give you the result. I just think as cannabis comes on and it's more accepted, there is going to be most likely a federal, a standard, and then I think each state is going to have their own nuances and special rules. As long as things continue to move forward, there's more acceptance of the product. There's more demand. More states go legal, then that's just going to require more testing, more compliance and we've got the tools to meet those needs.

Sinead: That's great, man. We have so many guests who are dealing with this, so many Californians who have to constantly change with the regulations changing almost on a weekly basis. I can definitely empathize and it's definitely a bit of a headache but at the same time, this is the stuff that I think it's really going to bring cannabis up to speed and really help to destigmatize and really, hopefully, normalize it so we get to a point where things settle down. Regulations are a bit more concrete and companies like GenTech are really helping us get there, I think so. Yvette, before we wrap up here, in a second here, I want to share your contact information with our listeners in case they want to get in touch with you and maybe take you up on that train ride.

Before we get to that, I've got a few just really fun questions here to wrap up the interview. The first one, are there any books that you have read that have had a big impact on your life and your just general way of thinking that you could share with the listeners?

Yvette: Yes. I'm an avid reader. I read constantly. I always have one fiction and one non-fiction book going. I've read a lot of great books in business and leadership. I would say the one that changed my life and it just came at the right time, but it's called Becoming Your Best, and it's by Stephen Rob Shallenberger. They're corporate coaches, and I got introduced to them and their book a couple of years ago when I was leaving my previous company, so I think it came probably the right time in my life. BYB, Becoming Your Best, so I really drank the Becoming Your Best Kool-Aid. I've read that book multiple times, I've got the Becoming Your Best Planner, I listened to their weekly podcast. In terms of becoming a better leader, setting goals, having a personal vision, that one really spoke to me the most, I think, in my business life.

Sinead: Okay, very cool. I'm going to check that out. Wrapping up here, Yvette, I want to ask, if you could go back and give yourself one piece of advice when you first entered the cannabis space, what would you go back and tell yourself?

Yvette: The one piece of advice I would give someone is if you do your DISC profile, I'm very trusting, that's like, my personality is I'm a very trusting person. That can serve you well. I did make a couple of financial commitments, what I was doing, investing in cannabis, and I was modeling other people that I admired and thought, okay, you make an investment in this company, and you know, they'll give you a board seat, or you make an investment in this company, and then you can get some title. Then you're betting on yourself, and you're an investor, and so I did that a couple of times, in the beginning, assuming that I was going to get that board role, or I was going to get that job offer, and it never came.

I would say if you're going to be investing your money, and you just want to be an angel investor, that's awesome, but if you're investing your money, and you're trying to bet on yourself and invest in a company that you can maybe have more of an active role in. That was a tough lesson for me to learn, and that's what I would tell somebody else is just be careful with that. Just getting writing.

Sinead: Yes, that's a great piece of advice. I really appreciate that Yvette. Well, Yvette, wrapping up here, how can listeners find you guys and connect with you?

Yvette: Well, I am on LinkedIn, Yvette Pagano. I'm active on LinkedIn, I check it every day, so that's a great way to just connect with me is on LinkedIn. We have our website, which is GenTechscientific.com, and we have a blog that's pretty active. We do, like I said, we have the train on the train thing, but we actually do Tech Tip Tuesdays. These are really good tech tips. Anybody who's like a lab manager, or is actually working with this equipment, we ask our technicians what's your hardest problem, and then we do a little interview about it.

I would say just check out our blog, we do a lot of free content, it's really industry-specific and around analytical equipment and testing in cannabis. Obviously, you can certainly call us for a quote, so we're 585-492-1068. The best way to getting back is probably on LinkedIn. Then we will have a booth at MJ Biz, so anybody listening who wants to meet us in person and talk to us about their analytical equipment needs and meet with the technician and really understand what we have to offer come to our booth at MJ Biz, and we would love to see you.

Sinead: That's great. All right, well, Yvette, thank you so much again for joining us today and telling us a little bit more about GenTech. This has been such a fascinating interview and I'm really excited to see what you guys do in the years to come and really just wish you the best of luck with everything you're doing over the next year. Thank you so much, Yvette.

Yvette: Thank you and I forgot one thing, they're going to kill me if I don't say that. We have been in business for 25 years, and to celebrate, we're having 25,000 for 25 years, so we're actually giving $25,000 off the purchase, a GenTech refurbished instrument. If you're interested in signing up for this, go to our website, it's 25 for 25, but some lab is going to get a really nice piece of equipment at an extreme discount. We would love for your listeners if they do need any analytical equipment, please enter our drawing for 25 for 25.

Sinead: Oh my god, I'm so glad you mentioned that. Wow, what a deal. Okay, so I will definitely include that in the show notes for our listeners. If you are interested in GenTech and the 25 for 25 deal, I’ll have all that information in the show notes, so go check that out. That's great. Yvette, thank you again, and just all the best for GenTech and look forward to seeing what you guys do over the next few years.

Yvette: It was a real pleasure. Thank you so, so much for the opportunity to be on your show. I really appreciate it.

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Matthew Kind: 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.

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