Editors’ Note: This is the transcript version of the podcast. Please note that due to time and audio constraints, transcription may not be perfect. We encourage you to listen to the podcast, embedded below if you need any clarification. We hope you enjoy!
The intricate world of drugs and the underlying reasons behind their prohibition. We uncover the similarities and differences between the psychedelic and cannabis industries. Both highly regulated, these industries present unique challenges, including the need for extensive research into potential therapeutic benefits and widespread consumer education. To navigate this fascinating landscape, the insightful Emma Beckerle joins us to discuss.
Differences between plant medicines and compounds
What and how micro dosing works
Research, Cannabis, Veterans
and so much more
About Emma:
Emma has spent her career leading, building & scaling rapid-growth businesses in the travel, restaurant and cannabis industries. Emma’s track record of success includes a $390M acquisition of a Series C start-up by Grubhub in 2018; being a Founding Member of LeafLink Financial, one of the first and largest debt financing facilities in the cannabis industry to date; driving the Go-to-Market strategy for a direct-to-consumer ACH product for one of the most valuable technology company in cannabis; and helping raise over $400M across the organizations she has worked for and with.
ABO Performance was born from Emma’s passion for small businesses and deep experience in leadership, scaling & fundraising.
Guest Links:
https://www.aboperformance.com
https://www.instagram.com/emmabeckerle/?hl=en
https://www.linkedin.com/in/emmabeckerle/
https://twitter.com/IamEdieFlynn
Follow us: Our Links.
At Eighth Revolution (8th Rev), we provide services from capital to cannabinoid and everything in between in the cannabinoid industry.
8th Revolution Cannabinoid Playbook is an Industry-leading report covering the entire cannabis supply chain
Editors’ Note: This is the transcript version of the podcast. Please note that due to time and audio constraints, transcription may not be perfect. We encourage you to listen to the podcast, embedded below if you need any clarification. We hope you enjoy!
Imagine this. You operate a state-licensed business. You pay your taxes and follow ALL the rules and regulations as defined.
You hear a knock at your home door on your daughter’s birthday day. U.S. federal Agents are there to charge you with the Kingpin Statue or the same law designed to target El Chapo and other cartel leaders.
Not only have you never been convicted of a crime, but you have also followed all the rules California enacted when they passed the Compassionate Use Act in 1996
Certainly, a jury of your peers who voted for this law almost a decade earlier would be an arbitrator of truth and fair would recognize you’re not a drug kingpin, let alone a criminal. This is the United States of America.
This week we sit down with Luke Scarmazzo, One of the first licensed medical dispensaries in the United States, who shares his compelling story.
We discuss:
2004 California Cannabis Industry
Scarmazzo vs. United States of America
Emotional rollercoaster
His mission now and how others can help
And so much more
About Luke Scarmazzo
In 2006, Luke Scarmazzo was running a state-legal medical cannabis dispensary in Modesto, California, when he was arrested by U.S. federal agents following a DEA raid of the business. Scarmazzo was prosecuted in federal court and received a 22-year jail sentence. He and his family have turned to The Weldon Project for support.
Though Scarmazzo’s dispensary was legal through California’s Proposition 215 – which legalized medical cultivation, sales, and consumption in the state – he and his business partner were charged under the Continuing Criminal Enterprise Statute. The CCE Statute, also known as the Kingpin Statute, is a federal law designed to target large-scale drug traffickers and cartels who are responsible for long-term and elaborate drug conspiracies. It carries a mandatory minimum jail sentence of 20 years.
In 2017, after serving nearly a decade in jail, Scarmazzo petitioned the Obama administration for commutation. His business partner, Ricardo Montes, received clemency, but Luke’s request was denied. In 2020, advocates with the nonprofit The Weldon Project included Luke’s name on a list of 25 marijuana offenders sent to the Trump White House as part of a clemency campaign supported by Republicans, Democrats, law enforcement and various celebrities. Although President Trump granted nine of the requested pardons, Luke’s request was not granted.
[00:00:02] Bryan Fields: up guys? Welcome back to Episode of the Dime. I’m Brian Fields, and with me as always is Kellen Finney. And this week we’ve got a very special guest, Luke Scar, Mazzo cannabis pioneer, one of the first licensed medical dispensaries in the country. Luke, thanks for taking
[00:00:14] Luke Scarmazzo: the time. How you doing today, man?
[00:00:16] Thanks for having me, Brian. Dope to be on the show and, uh, happy to be here.
[00:00:20] Bryan Fields: Excited to kind of have a conversation today. Kellen, how are you
[00:00:22] doing?
[00:00:23] Kellan Finney : I’m doing really well, really excited and honored to talk to Luke and, you know, hear about his story and, uh, the early days of cannabis and the whole kind of history.
[00:00:31] How are
[00:00:32] you, Brian? Yeah, I’m excited. And Luke, I know we have to do for the record, uh, we have a East coast, west coast battle In your location,
[00:00:38] Luke Scarmazzo: please. Yeah, I’m in, uh, Modesto, California, which is about, uh, an hour south of Sac, an hour east of Oakland. So yeah, I’m right in the heart of it. I love it. I guess that’s West Coast.
[00:00:51] West Coast, west Coast. That part’s, that part’s getting edited out.
[00:00:55] Bryan Fields: So before we dive into your story, I’d love to chat. Early [00:01:00] days 20 2004. What was the cannabis industry like?
[00:01:04] Luke Scarmazzo: Okay, so transport you back into 2004. Like you walk into our dispensary, there is zero brands in there. There’s not a package in there.
[00:01:15] We are dispensing cannabis in like what you would traditionally see, like prescription, like medic medication in like, you know what you would get like, I guess your Vicodin prescription or something in Right. That’s what like the ace came in and stuff and would have like a label on it, you know, with all, you know, keep outta reach of children and you know, the strand names.
[00:01:34] So we just had strands back then. We didn’t have any brands. Um, And you, we, we are ba basically vertically integrated, but we also bought cannabis from vendors. And they would come in and they would show, you know, they would sign up, become members of the collective, and then they would like show, you know, their product and what they had and we would buy it there.
[00:01:56] The lab testing was just like barely getting off the ground [00:02:00] back then. Um, there wasn’t all these, you know, the only extracts back then were like, wax some cold water hash and some oil really, you know what I’m saying? There wasn’t vape pens, you know, none of that stuff existed in the store back then. Um, purple, like purple cannabis, like purple urkel, granddaddy purple.
[00:02:21] Like those were the only strands that had color in ’em, you know what I mean? Everything else was just green, you know what I’m saying? Like, now we got all these people that are used to like all these exotic looks and exotic flavors and stuff like that. But you know, there was only a handful of strands back then that had that.
[00:02:36] Um, and like, yeah, I grew, I grew up in cannabis like in
[00:02:40] the
[00:02:41] Luke Scarmazzo: nineties in California. My mom, I mean, my dad and my aunts and uncles all grew, sold, smoked weed. So, you know, I got like a picture that was hanging up in the back of the office and I was probably like four years old and there’s like a birthday cake in front of me and it has this huge water leaf on it that’s like covering the whole cake.
[00:02:59] And I’m like, [00:03:00] like in front of the cake. It was, it was classic picture, but just like, you know, just to give context like that was all around us back
[00:03:08] then.
[00:03:08] Luke Scarmazzo: Um, so, you know, growing up it was kind of a natural progression to kind of, I grew my first cycle of weed when I was 15 and like 95, um, Northern Lights strand, so, you know what I’m saying?
[00:03:19] Just to kind of take everybody back and then just kind of naturally went into the market, um, and was always, was a grower, you know what I’m saying? I was growing and, and selling weed before it was an industry. Um, My daughter. I mean, it was like, there’s a, there’s a cycle now, right? Because now my daughter, she’s like three or four years old helping me cut clones.
[00:03:43] So if there’s any, like, if there’s a, a baby of this generation, like it’s her, you know what I’m saying? She was in the mix, like cutting AK 47 clones when she was like four years old. You know what I mean? So she was like, dad, these are like baby plants. So yeah, it was, it was definitely [00:04:00] a totally different time back then.
[00:04:02] Um, law enforcement, like even though we had, uh, the Compassionate Use Act of 1996 that legalized medicinal cannabis, you know, the first, uh, cannabis regulation in the nation, law enforcement really wasn’t cool with it. They still thought like, if they came down and hammered people, like they could kind of put the genie back in the bottle, I guess.
[00:04:24] And so, you know, traveling with cannabis back then, even though you were legal to do it and transport, um, If you got pulled over, like by Highway Patrol or if you got pulled over by usually some of the local PDs, I mean, you could get arrested still. You would still, uh, have all your product confiscated. Um, so it was, you know, it was definitely a different time.
[00:04:46] The threat of prosecution was real. Um, the feds were still coming in and hammering people. Um, so yeah, it is like, you know, the industry now is, it took a lot, it took a lot to get to, to where we’re at today, [00:05:00] and you know, it’s good that, that people know that story and the sacrifices and just the craziness that that happened in the past.
[00:05:07] Bryan Fields: What was the process to get the license? Was there any hesitancy to kind of dive into that process? And then were there guidelines loose, strict? How,
[00:05:14] how
[00:05:14] Luke Scarmazzo: did that work? Yeah, so when we opened California Healthcare Collective in 2004, the mm PA had just passed, and that was basically the first. Dispensing, like loose regulation about dispensing that had ever passed in the country.
[00:05:31] And it kind of gave some loose regulations on, like, cannabis dispensaries and what they were called collectives back then. Um, and there wasn’t like a whole lot to it, you know what I mean? The, the, the, the regulation was very vague, so you kind of had to self-regulate, right? You had to like, like they had like limits of eight ounces that could be dispensed per patient, right?
[00:05:52] But if somebody came in and bought eight ounces from our store and they had a joint in the car and they drove away and got pulled over, then it was like our [00:06:00] fault. Like, then we would be, we became the bad guys that sold them too, too much cannabis. So like we would cut the limits in half and say, oh look, okay, it’s four ounces a day.
[00:06:08] Uh, you know, that’s the most that we can dispense. We had to do things like double check, like verifi, uh, verify doctor’s recommendations, valid California IDs. We had a whole process that we had to go through on that. Um, and then getting the actual license, like it wasn’t like it is now. Like there wasn’t, you know, $20,000 local fees and stuff like that.
[00:06:30] It was literally like, you know, write, you know, fill out this license form, you know, tell us where your location is and, uh, we’ll give, we will give you the license in the state where it was like real similar, like you had to drive down to Sacramento, give them, you know, submit your paperwork for the permit.
[00:06:45] And it, like, they issued it like a week or two later, and then we just hung them like in the back of our, our store. Like, it was like a, you know, regular local business and just, you know, did our thing from there. Was there, um, [00:07:00] oh, what was I just gonna ask? I just lost my train of thought. Sorry. Um, I was good.
[00:07:05] Go ahead Brad. Were you
[00:07:06] Bryan Fields: surprised, like when, how easy it was to get the license? Obviously going in, you’re probably aware of like, you know, this is what they’re saying, but there has to be a part of you that’s like, this seems kind of too good to be true. We’re just gonna fill out some paperwork, they’re gonna prove us and we’re gonna get a piece of paper looks like a, an award and, and put on the wall.
[00:07:21] I need, was there any sort of feeling in your mind, like, this seems kind of off.
[00:07:25] Luke Scarmazzo: Um, this, it, it was weird cuz like, the thing that was really the hard part was finding the locality, right? Because like in the Bay Area, I’ll back up a little bit. Like California is like a very blue state, very leans very liberal, right?
[00:07:42] But the central valley of where I’m located, like Sacramento, Stockton, Modesto is really slant conservative. So, uh, you know, you have a lot of ag, you know, people here and stuff like that. So finding the locality was the hard part in the Bay Area. They were a lot more lenient. The local government [00:08:00] would be like, yeah, you guys can open here.
[00:08:02] Um, So in Modesto and Stockton, like we, we went and met with Stockton first and tried to like approach the city council and the mayor and say, Hey, you know, this is what we plan to do, open a medical cannabis dispensary. And they were like, hell no. They’re like, you guys are not open in here. Like this is this, this is jurisdiction is not allowing this type of, uh, activity.
[00:08:25] Like, it was like we were asking to like open a cocaine factory in their, in their city or something. Like, they were like abdo, like against it, you know, staunchly against it. Um, so then we went back to our attorneys and we were like, yo, we went and talked to the city of Stockton. They said, absolutely not.
[00:08:43] And our attorneys were like, listen, you don’t have to ask like, permission to op, it’s a state law. Like they, it was passed in the state. You don’t have to ask permission as long as they haven’t passed a ban, which just, they were just starting to like kind of put their toes in the water. Some of the localities and counties around, [00:09:00] around trying to do bands.
[00:09:02] Um, So they said, as long as they don’t have a band, you guys can do it. So we, we were like, well, hell, we’ll just do it in our home city then. So we opened in, in Modesto, um, the first like kind of few people that came in on those first two days, they were just like, leery, like looking like, is this really a dispensary?
[00:09:18] Like, are these dudes really selling medical cannabis here? Like, they just wanted to see if it was real, right? And then the, the local paper comes on, like the second day we’re open and they asked to come in. We were like, no, you can’t come in without a doctor’s recommendation. They were like, are you guys, uh, dispensing medical marijuana here?
[00:09:36] And I like hesitated because I was like, like if I say yeah, like the cat’s out of the bag, then like, I didn’t know what was gonna happen. But, you know, I, we, we were a legal business, so I was like, you, so I, I told him, yeah, we we’re, we, we dispense medical cannabis here. Um, so then the dude just leaves the next day we’re front page of the paper.
[00:09:57] I look at it at like before I get ready to go to work, and I’m [00:10:00] like, oh shit. Like, I’m, I’m expecting there to be like the police squad, like waiting for us when we pull up to, to the, to the store that day. Um, so I pull up and it looks like a Blockbuster movie had just like released on our block. Like there was literally like 500 people lined up, like all the way around the corner and everything.
[00:10:24] And I was like, oh man, like this is gonna be crazy now. And then, like every day from that point forward it just kept growing and getting bigger and more patience and more people to the point to where like the demand got so high that we couldn’t even, I couldn’t even like meet the demand anymore. Like the supply, like we had literally run every grower in the Central Valley, like dry on on cannabis.
[00:10:49] Like they, I would come back to ’em in like a week and they’d be like, Luke, like I gave you everything I had last week. I have nothing left to give you. So at that point I [00:11:00] ended up linking up with some of the guys up in the Mendocino and, and, uh, humbled in the Emerald Triangle. And man, they blessed me. I mean, those dudes up there, at first I was like, man, like it’s probably just some old school like hippie growers up there.
[00:11:14] Like they, you know, the game probably has kind of went past them. I was dead wrong. Like, those guys are beasts up there. They were like, they grew some of the fires, cannabis that I’ve ever seen. And then, and they had just like an abundant supply. So we were like a perfect match for each other. Right. I have this store that’s booming.
[00:11:33] They have all these, all these packs up there that they’re trying to move. And we just had a great relationship there. And you know, from that on, we had like a train coming down from the 1 0 1 that was just packed up, the packing, the dispensary up. So in the early days there wasn’t any track and trace. So like how did you have to do
[00:11:50] Bryan Fields: anything to like,
[00:11:51] Luke Scarmazzo: Qualify a a, a cultivator.
[00:11:54] Is there any like Yeah, any license. I mean, they needed, they, what they had to do is they had to become a member of the [00:12:00] collective. So they would become a member of the collective sign their paperwork over, and then we would give them like a number of recommendations to cover whatever their grow was. So like a number of patients, right?
[00:12:11] Yeah. Yeah. Each patient was allowed six plants to grow, right? So you had to post that recommendation at your cultivation. So if you had a hundred of these recommendations there, you could grow 600 plants. So, and then it, you know, there wasn’t any limit on it like that. They hadn’t really like tapped down on that.
[00:12:28] So when a once, once a grower, uh, became, uh, a member of the collective and, and a vendor, then it w it was completely legal for us to go up and transport the cannabis down from their facility.
[00:12:40] Bryan Fields: So in real time you were helping kind of to build the infrastructure and get others on board because you had to kind of be the customer facing as people were coming in, you’re like, I had to get more supply.
[00:12:49] And then you had to get more people kind of on board. Were additional stores opening up at that same time?
[00:12:55] Luke Scarmazzo: Oh yeah. Oh yeah. Um, probably. I [00:13:00] mean, the stores started to open up in the Bay area. Um, and then like
[00:13:15] Bryan Fields: were there other stores opening up at this time, like competitors, like near you, like trying to get involved in the legal cannabis market?
[00:13:23] Luke Scarmazzo: Well, there were stores that were opening up in like the Bay Area, right, because of just how liberal those, those local governments were. But right after we opened in the Central Valley, all the surrounding.
[00:13:36] Cities and counties started issuing these moratoriums and bans. Like they were like, the sky was falling, right? Like, oh shit, we got medical cannabis up, you know, in, in our, our locality. So they tried to, like, even our, even our own city tried to like zone us out and like ban dispensaries. And we thought like, oh man, now we gotta shut down.
[00:13:57] And then, you know, our attorney said, no, actually, [00:14:00] like you guys are grandfathered in because you guys were already doing business. So then all the surrounding cities and everything start issuing these bans and implementing these bans So instead of like shutting us down, what they did is like, essentially created like a monopoly.
[00:14:14] Now we have like the only dispensary in like a hundred mile radius in the center of California, which is like the fifth largest economy in the world, right? So like, then it got wild. It got really wild then, because then, you know, I mean, people from everywhere were coming. It wasn’t just now people from Modesto that were coming, it was people coming in from Stockton, coming in from Sacramento, Merced, Oakland, the Bay Area, all the, you know, cities in the east of us.
[00:14:42] So it was, it got wild. It got wild there for sure. Was
[00:14:46] Bryan Fields: it, uh, deli style in the
[00:14:48] early
[00:14:48] Luke Scarmazzo: days? Like were they, did you let customers, like, smell the product and like that whole kind of experience that Yep. Yeah. I mean, like we had California got away from it, but I still love it. Yeah, yeah. No, it was [00:15:00] definitely like the way to go, right?
[00:15:01] Because you, we would have like, you know, all the mason jars of each strand, you know, labeled and all that stuff, and they would all be set out, right? And then they, they would, we had like a, basically like a menu board, like similar to kind of what you got behind you right there, just with the list of all the different strands on ’em that, you know, we had high grade, mid grade and kind of like a, uh, you know, more affordable type of eighth.
[00:15:25] Um, and people would, yeah, they’d be able to come in like. Handle the cannabis, look at it, smell it, open the jar. And then once they picked whatever strand they want, our sales guy would kind of radio into the processing room. They would get it, get it ready for ’em, weigh it out, put it in the medicine vial, bag it up, and, and bring it out for sales.
[00:15:46] So business
[00:15:47] Bryan Fields: I’m assuming, is booming at this point. Is there thoughts on your mind about expansion and growing this? Because there has to be a, a thought process where you’re like, Hey, we did this once. It is absolutely thriving. Do you consider going more, like, take us through that thought
[00:15:59] Luke Scarmazzo: [00:16:00] process? Yeah. Um, the next move was to go to the, the next biggest market that was untapped, which was Southern California.
[00:16:07] So we, as soon as we kind of got our bearings and were able to kind of meet the demand that that was being created up in Modesto and in Northern California, um, we started to look to down south towards la. Um, we started to kind of look at properties and stuff at that point and. Feel out LA for what their, you know, laws were and what their regulations were, you know, regarding cannabis.
[00:16:32] Um, and we, we actually had contracts signed with a property the day we got raided. Like we were supposed to actually meet with the property owners later on. So I kind of fast forwarded to, you know, the feds coming in in September of oh six. But yeah, we were probably, we would’ve been open in LA in probably the beginning of oh seven if everything would’ve went well.
[00:16:56] So let’s stay with the
[00:16:57] Bryan Fields: early days and then we’ll hop into that story. Who were some of the players [00:17:00] that you recall, some of the bigger names that maybe were smaller back then that kind of have bursted on a scene? Do you have any individuals like that
[00:17:05] Luke Scarmazzo: that come to mind? Um, so yeah, like, remember I kind of mentioned like there was a few dispensaries in the Bay Area and we would go to ’em, you know, because we, you know, we were such kind of a tight-knit community back then.
[00:17:17] Like if somebody opened in the Bay Area, we usually knew the owners or something like that. So there was a spot in Frisco. That, um, used to sell clones and, you know, dispense canvas and in Frisco you could actually smoke on the premises, which was really dope. That was something that like, you know, was kind of a new thing back then.
[00:17:37] Um, and the guy that work was working the door at that dispensary was Berner you know what I mean? was sitting there, he was checking IDs cool as shit. Um, you know, so it was, it was really dope, like me getting out and then watching the progression of Berner being in like the ground floor of the industry way back then, back when we were opening our dispensaries to, you know, the [00:18:00] empire that he’s blown up now.
[00:18:01] So that, was really dope. Um, I mean there’s a lot of guys, a lot of guys are huge now. Um, my dude, Addison Demora he, he, he’s, uh, runs legends of Hashish she’s like one of the biggest, like hash, you know, uh, uh, producers in like the state and is like high level stuff. Um, Man, I mean, I, listen, I could name people from back in the day all the time that they’re just, they’re huge now.
[00:18:27] Uh, third gen farms, Josh d that’s, that created the OG cush strand back in, in, in LA back in the day. Um, you know, it’s really awesome to see that these guys, they’re still in the industry. They’re still doing, you know, uh, things that they love and, and they’re being recognized for it. And I think that’s dope.
[00:18:47] Yeah, I think that’s
[00:18:48] Bryan Fields: awesome. And Burner’s told that story about how working that that area has allowed him to meet so many people. Cuz he said it was such a small, tight-knit community and everyone came through that early, in those early days and how important that was. Yeah. So the [00:19:00] number one product, the number one strain you remember from, from that
[00:19:03] Luke Scarmazzo: time.
[00:19:04] Hmm. Damn. Uh, probably the Granddaddy Purple. Or The Purple Urkel. Both of those were like my favorites because not only did they have that exotic look and that color and just were super frosty, right. They tasted like, like a great Jolly Rancher. I mean, you would hit that thing and like back then, like we, we, we smoked blunts a lot now, which, you know, I do not condone smoking tobacco.
[00:19:27] Um, but back then, you know, that’s, that was the thing, right? So when you would like load up one of those blunts with like a eighth of some granddaddy or some urkel, like, and taste it like through the tobacco, like that was like a, a special treat. And then we used to like, I don’t know if you’re familiar with, there’s, there’s a new kind of, uh, thing coming out right now called hash holes.
[00:19:49] And basically it’s like a, it’s like a pre-roll that they like put like hash all in the center of it and you know, it, you know, just gets you sky high, right? Well, so back then we used to [00:20:00] do something similar. We would take like the granddaddy bust, open the blunt, load it, load it up with Keith from whatever, like the rolin strand or whatever we had back then.
[00:20:09] Then we’d put cold water hash on top of it, then we’d drip like oil all on top of that. Right. And then we would roll it, that thing would burn for like 45 minutes. And I mean, literally there would be like seven people that were just wasted baked off of it. And so like, you know, just things like that. Like you just don’t really see that type of stuff anymore.
[00:20:28] No,
[00:20:28] Bryan Fields: I mean, that sounds incredible. So continuing in the operation, is there any, any hesitancies or any people that come in, give you warnings or any feelings in the back of your mind thinks that like, hey, what we’re doing now could potentially have some issues in the future? Did you ever have
[00:20:42] Luke Scarmazzo: those thoughts?
[00:20:43] I mean, not really because I mean, the feds were, were kind of shutting some of the places down, but we felt like if we paid our taxes and we ran an above board operation, um, you know, we were licensed. [00:21:00] So we felt like if we did everything right, right. That, uh, you know, they would, they would go after maybe the people that were, you know, Uh, skirting some of the California laws or something like that.
[00:21:12] Um, so, you know, in hindsight, like if they would’ve sent me like a cease and desist order and said, Hey, look, if you don’t shut down your dispensary, we’re gonna give you, you know, two decades in federal prison. I would’ve been like, please, guys, I’m outta here. Um, but I mean, that just wasn’t the case. You know, they, the, you know, the local, local law enforcement, of course, was always hostile to us, but I mean, that was just kind of par for the course because they just didn’t accept medical cannabis at all.
[00:21:41] They, they felt like we were all lying that there was no real medical benefit to cannabis in that like everybody was just trying to get high. And, and so, you know, the, it was expected to come from like a, a local conservative police department. But, you know, I always thought like the feds [00:22:00] would be, uh, a little bit more analytical on who they were, kind of were strategic on who they would kind of decide to raid and who they wouldn’t.
[00:22:08] Um, but you know, in hindsight too, like I was super outspoken. I was outspoken like before I, I was incarcerated the whole time I was running the dispensary. Um, about just like advocating for, for a just and fair industry, you know what I mean? I felt like, um, you know, federal prosecution and that threat of federal prosecution and how a lot of the local, you know, PDs and law enforcement were dealing with, it was just unfair.
[00:22:36] You know what I mean? It was a law that was passed by the state and I was really vocal about it. So I think that could have been a reason that, you know, we were, we were unfairly targeted. Did your attorneys have any like, guidance on that? Were they not very concerned about federal, uh, like the federal government coming?
[00:22:55] Well in, in 2005, like about, I would say like, [00:23:00] Maybe a year halfway into what we were doing, probably a year into running the dispensary, uh, Supreme Court decision had, had come down. It was called Rates versus Gonzalez. And up until that point, the d e a was, had a injunction against them of raiding or arresting anybody who was involved in the medical cannabis industry.
[00:23:18] But in 2005, the Supreme Court overturned that decision. So at that point, some of our attorneys came to us and said, look, it’s a little bit different now. Like we don’t, the California law is still California law. The decision didn’t affect that and didn’t like nullify it in any way. But at the same time, the feds have now been given the green light that they can go back in and, and resume some of these raids.
[00:23:43] Um, so we, we definitely, you know, it, it changed a little bit in at 2005, but still we were at the point to where we were like, we’re doing it right. Like, why would they come in and raid a legitimate business that’s paying taxes? I mean, we were paying federal taxes like. [00:24:00] You know,
[00:24:01] Bryan Fields: so let’s go into that day on September of 2006, you know, what was the morning like?
[00:24:05] How did that, how did that happen? And take us through what you, you remember?
[00:24:10] Luke Scarmazzo: Um, it was my daughter’s birthday, so it was on September 27th. Uh, she had to fly down with her mom and some of her friends to Disneyland. We were gonna have her birthday party at Disneyland. It was gonna be a really big deal. It was her fourth birthday.
[00:24:25] Um, and I had some meetings later on that day. So I was like, me and my dad were gonna fly back, fly or fly down there later, later on that day. Um, so at like six in the morning, I’d just get a knock on the door and, um, it’s like a state probation guy, right? Um, and he was like talking to me and said, you know, introduced himself and asked if anybody was here.
[00:24:50] And I said, no. Um, you know, I was just by myself at that point. And, uh, He, he just kind of like nods and says, okay. [00:25:00] He goes, you mind if we come in? And I was like, sure. You know, I, I didn’t have anything to hide. And so they come in, he asked me to go sit, sit at the table, and when I go sit at the table, he says something in his radio, like, all clear or something like that.
[00:25:15] And then they like bust my door in and like 12 of these like federal officers in all military tactics and helmets and, you know, machine guns all come just raiding through like the house. I, the, we had already told ’em that, or I had already told ’em that nobody else was even here. Like, and I’m sitting on the kitchen table, like talking to ’em.
[00:25:35] It was totally overkill. Totally overreach, unnecessary. And they just came in like crazy deep, you know, kicking in doors of bedrooms, waving, you know, assault rifles everywhere. And you know, this is for a, a licensed medical cannabis operator. So, you know, they came in and, you know, the DEA comes in and waves their badges at me.
[00:25:58] Um, you know, [00:26:00] say that they’re simultaneously rating the dispensary and our managers and my co-founder Ricardo Monte, um, who was by the way, the, like the first Mexican American dispensary owner in the country. So that’s something that he’s proud of. Um, and then basically come up to me and say, okay, like you’re, you’re facing this amount of time, like, uh, do you want to talk to us and make a deal?
[00:26:24] And I’m like, hell no. Like, you know what I’m saying? Like, I’m doing everything legal. Plus, like, I’m from, I’m from California. Like I’m f we, we don’t do that. We don’t talk. Like if, listen, if I get hit, I get hit, I take, I take it on the chin. I’m not like, they really wanted our Mendocino, like suppliers bad because they knew like we had these like, you know, just truckloads coming down from the Emerald Triangle and it was just like, not something that was even on the table.
[00:26:53] So we said, you know, nah, we’re, we’re, we’ll take whatever we got. And they ended up trucking us down to the [00:27:00] local county jail and then shipping us later down to Fresno, California where they have like a federal holding facility. And then it became a long fight to like, it was like a two month or like a month and a half period for me to even bail out.
[00:27:12] Like they wouldn’t let me bail out. My bail was 4 million. Um, yeah, it’s like, you know, when people murder people on the street, they get like million dollar bails. And now I, I’m sitting in, in a federal holding facility in Fresno with a $4 million bond and I’m just like, this is like, they’re really, really making this difficult.
[00:27:31] Really making this hard. Um, and you know, I eventually was able to, to put up the money, to be able to get out. And then fought my case from the street for, for the next two years. At what moment
[00:27:44] Bryan Fields: when you were locked up, did you realize that this was obviously very different? Was it the 4 million and was it conversations with your lawyer who said, Hey, like Luke, I don’t think these guys are playing like, uh, the standard game.
[00:27:54] We think we’re trying to make an example of you. Did you ever feel that? Did those
[00:27:56] Luke Scarmazzo: conversations ever happen? Yeah, it was when they [00:28:00] did what’s called a superseding indictment. When I was initially arrested, I was just arrested for distribution of, of marijuana, which is, you know, it’s not a light charge, but it’s, you know, it’s one of the lighter charges in, in the federal system.
[00:28:13] Um, and then they did what, while I was fighting to get out on bail, they, uh, did what’s called a superseding indictment, and then it came, they came back with an 18 count indictment, and the num, the first charge on this, which is always gonna be your most significant charge, was what’s called a continuing criminal enterprise.
[00:28:31] And it’s. Otherwise known as with the kingpin offense. So it’s, it’s, it’s the same charge that they charge like El Choppa with, or like cartel leaders and stuff like that. So when I saw that, I was like, ah, shit. Like they’re really coming hard on this. Like that charge carried a mandatory minimum of 20 years.
[00:28:49] That doesn’t matter if you’ve never been in trouble before in your whole life. If you get found guilty of that offense, the judge has to sentence you to a minimum of 20 years in prison. So, [00:29:00] and then there was like 17 other charges of like, you know, distribution, manufacturing, you know, manufacturing is in, in the federal system just means you’re growing.
[00:29:09] So it’s distribution, manufacturing, um, uh, an array of like money laundering charges that were totally bogus that they ended up dropping later, but they were just, they just stacked all these charges on top of us. And that’s when I realized like they’re trying to set an example up. They’re trying to make an example out of us and scare the rest of the industry out of.
[00:29:29] Continuing to grow this industry into what it, what it became. So the, it was a real turning point cuz I’ve, I’ve talked to like a lot of, like the dispensary owners and cultivators that were around back then recently. And they were like, dude, when you guys got arrested and they hit you guys with that continuing criminal enterprise, like, I shut my shop down.
[00:29:50] Like I was scared to death or I shut my cultivation facility down because it was a real, you know, it was the first time that someone [00:30:00] had ever got such a significant sentence for a non-violent cannabis offense when you were following state law. So it really, it, had like a chilling effect throughout the whole industry.
[00:30:11] But thank God there was still like a lot of brave people that said, you know, we’re going to continue to push this forward. A lot of brave men and women that continued to grow and, and open dispensaries and, you know, brought us around to where we are today. I mean, there’s a lot of bravery that could be said in terms of, uh, You kind of just keeping your entire network to yourself.
[00:30:31] You know what I mean? Yeah, yeah. I mean that was, that was real important. Yeah. That was real important to us, you know, to, you know, be a standup person, you know, take, you know, there’s, there’s no reason to sell out any of your, your guys or your comrades or your, the people that are working with you when, when you’re the one who got hit.
[00:30:50] You know, sometimes you just gotta roll with it and take it and, um, you know, that was really important for us to have honor and, and dignity and, and just be standup in [00:31:00] that type of situation. Do you think that they threw the book at you like that as, uh, maybe an effort to try to get some of that information?
[00:31:06] Oh, yeah. Oh yeah. Definitely. That’s how it works. I mean, that’s, that’s the basic premise of how, why they overcharge you. They charge you with, you know, a hundred years worth of charges and then say, okay, you know, if you cooperate, we’ll give you two years, you know, and then to a lot of people, that sounds really appealing.
[00:31:23] Um, You know, to, to us, it just was not something that was ever on the table for us. It was not something that we would ever consider, you know, it was, we felt like, listen, we’re gonna ride this thing all the way out and, uh, let the cards fall where they may. When you first
[00:31:37] Bryan Fields: got your list of charges, did you think that you’d be convicted on those charges or did you think that they would kind of think it through and say, Hey, I was paying my state taxes, I was paying my federal taxes, like there’s some decency here in people.
[00:31:47] Did you ever have those thoughts
[00:31:48] Luke Scarmazzo: on your head? Oh yeah. No, I thought we’d beat them and my, and like my lawyers were like saying like, yo, you guys are gonna beat these guys. Like, we’re gonna field a [00:32:00] jury of California voters who, who, you know, at least, you know, 6 of the 12 or 7 of the 12 actually voted for this law.
[00:32:09] Um, and you know, once we show that we’re able, that we are paying our taxes, had a license and all those things that we would be able to, you know, be victorious and prevail and, and, and. Be vindicated. What I didn’t know was in the federal system, state law is completely irrelevant. We could, like, they basically handicapped us a week before trial and said, you can’t say the words medical marijuana.
[00:32:35] You can’t talk about you having a license. You can’t tell them that you paid taxes. So they basically got to paint us as these like huge Drug kingpins and we just had to take it like, we had to like try to be real creative on how we could get in like certain language or what we were doing. And I mean, it was, it was a kangaroo court man, and they, they rigged it up to where we, we couldn’t even give [00:33:00] them the real circumstances of why we were dispensing cannabis.
[00:33:04] Bryan Fields: You couldn’t even really actively defend yourself for like, following all the rules. Why, why do you think, you think that was obviously intentional that they did that and how, like what did the lawyer say when that ha conversation
[00:33:13] Luke Scarmazzo: happened? I mean, it’s actually the law today too. It’s still in effect like ca in, in touma, feds legalize or it becomes descheduled.
[00:33:23] Um, it doesn’t matter what your re, the Feds basically feel like it doesn’t matter what your reason is for violating federal law, that it’s irrelevant in a federal court. You know, as long as they can prove that you violated the federal narcotics statutes, your reasoning for it is really irrelevant. So, yeah, I, I, I wish I would’ve realized that prior to the, to going into trial that it would be that, um, much of an uphill battle.
[00:33:53] And cuz we were offered 10 years, we were offered a 10 year plea deal before we went into trial, and 10 [00:34:00] years seemed like a lifetime to me at that time. Like, you know what I’m saying? I’d never done no, no prison time before. So I’m like, they’re like, yeah, we’ll, a, we’ll, we’ll give you guys 10 years to, you know, just plead out and avoid trial.
[00:34:11] And, and so I discussed it with, with Ricardo, my co-defendant and brother at the time. And he was like, hell no. And I’m like, bro, 10 years seems like life to me. Like at that time, like now in hindsight, I ended up doing 15 right? Way over what my, my plea, plea deal was. But you know, we thought we’d be victorious in trial.
[00:34:31] We really thought like if we go into trial and we fielded 12 California voters, that we would be able to like show ’em, you know, that we were a legitimate medical cannabis business. And that just wasn’t the case. Man. Throughout
[00:34:48] Bryan Fields: the trial where you continued to be optimistic or was there a moment during the trial where you felt like, Hey, we can’t use these words, we’re kind of feeling like we’re losing momentum.
[00:34:55] Did you ever feel
[00:34:55] Luke Scarmazzo: like that? Yeah, there was definitely a point to where we felt like we were [00:35:00] losing momentum. Um, but then there was, there would be like little like rays of hope, like where we would like, cuz I was on. Bail at that time, right? So I’m, I’m being able to like walk outta courtroom and go to lunch with everybody and stuff like that.
[00:35:13] So I would see some of the jurors sometimes and like some of the jurors would like do things like come by and be like, you know, gimme a thumbs up, or like something crazy. Like I didn’t even know how to react to some of it. Like sometimes I’d be like, uh, act like I didn’t see that, you know, because I didn’t know, like, is that if I was like breaking the law, like by even talking to him, right.
[00:35:31] One, one time in particular, a juror, were going into the elevator and I’m with my daughter’s mother and my daughter, she’s, you know, five years old at the time. And my, my daughter’s mother was kind of complaining about having to take her belts off and all that while we go in and out of the, the, um, metal detectors and security at the be at the front of the courthouse and a juror comes into the elevator with us and he starts like relating to her saying, [00:36:00] yeah, it sucks.
[00:36:00] And then, uh, he said like, oh, is this, is this your daughter? And she’s like, yeah. And then he leans down and tells my daughter, oh, don’t worry, honey, your daddy’s not going anywhere. And I’m just like, whoa. Like for real. So like, we would have like little things like that that would just be like, the trial might not have been going good, but I’m like, man, these jurors seem like they’re on our side though, you know?
[00:36:22] And then after the fact when after we got found guilty, the jurors came forward and said, like, because in a federal system, they can’t know what the penalty is for the charge right now. They could probably go look it up if they did their own research on their own right. But the, you know, nobody tells ’em like, okay, if you find them guilty of count one, this is how much time they get.
[00:36:44] If you find ’em guilty of count two, this is how much time they get. So what they thought was like, yo know, this is just a cannabis case. Like, and these guys obviously have, there’s something around it that looks like they were following some type of state law and stuff like that. So the jurors thought we were gonna get like [00:37:00] probation.
[00:37:00] Or like a year in prison. So when they’re sitting there, you know, giving us the thumbs up and you know, saying, Hey, don’t worry, your, your dad’s not going anywhere. They really thought, like, even if we find, find these guys guilty on this, like nothing’s, they’re gonna get a slap on the wrist and, and, you know, be back doing their thing.
[00:37:18] When they found out that we had a mandatory minimum attached to our, our offense of 20 years, three of ’em come forward and wanted to pull back their verdict. They actually signed affidavits and everything and said, Hey, look, if we would’ve known, like it carried that type of penalty, like we never would’ve voted guilty.
[00:37:37] And the judge was like, too late. Like, you don’t get to have like buyer’s remorse on this. You found him guilty and now it’s my job to sentence him. So
[00:37:47] Bryan Fields: obviously we take, we take the steps forward. You’re found guilty. Are you having conversations with people on the outside in understanding how the industry’s going or how are those relationships gone?
[00:37:56] Luke Scarmazzo: Yeah, I mean, I’m still like, [00:38:00] I’m still tapped in with the culture. I’m still tapped in with a lot of my people that were still in, you know, the industry back then and, and, and now, um, you know, it, it was, it was hard at first because when you go into the federal system, you go with that much time, you go to like, some really high security prisons.
[00:38:18] So, you know, my initial prison, the highest security prison you can get to is called a Penitentiary, a US Penitentiary. Um, and so when you go into those situations, it’s very restrictive. You like, you get 15 minute phone calls, writing letters, you know, is like some of your only communication on the street.
[00:38:39] Um, and then like a few years into it, we got like these email systems where we could kind of communicate with on email and stuff like that. But as the years went by and like I kind of walked my security level down when I finally got to a low security, um, There was like, phones everywhere. Now you’re not supposed to have phones.
[00:38:57] It’s illegal to have phones in there, but like they [00:39:00] were there. Right. So I walk in like my first day of getting to a low facility, right. And I’m kind of wa it’s like a, now it’s not in sales anymore, it’s like a dorm setting. So I’m walking down like this aisle of this dorm and I’m like, look inside to side.
[00:39:13] And there’s like phones on, like, everybody got phones now. So I’m like, okay, cool. Like this is a totally different gig now. So like I’m, I’m getting on, you know, we’re we, we can tap into social media and stuff like that. People can, you know, kind of stay in contact with their family more. Like, people think crazy stuff is happening on the phones, man.
[00:39:35] The, the phones really are just people trying to keep contact with their community and with their families. You know, there’s nobody like setting up no crazy things going on on their phones. Right? So that was, that really enabled me to be able to kind of just stay in contact and be like, okay, like, People can tap in now with me, people can kind of relate to me.
[00:39:55] And it was, it, it kind of like was in a way made it to where [00:40:00] I kind of jumped the learning curve of, of technology and social media. Right? Because, uh, when I went in, I had like the very first iPhone, it was like iPhone one, you know what I’m saying? So like, and it didn’t do like any of the things, like the new phones.
[00:40:15] So when I come out and I got the iPhone 14 pro Max or, or whatever it is, right? I’m looking at this thing like what the, you know what I’m saying? Like how, how do you even use this thing? Like, so the, for real, like the technology is the biggest jump, like from 15 or, or from, from 2004 till now. And, and, and like the industry is night and day two.
[00:40:40] And, and I, we can touch a little bit on that if you’d like, but you know, that’s just it. The, the technology like was the biggest thing because when I left there was like, Payphone on every corner and my space was jumping, you know what I’m saying? Just to kind of give your listeners a little dialup internet on what it was.
[00:40:58] Did you still have dialup internet? [00:41:00] Yeah. Oh yeah. The old aol. Like you’ve got mail.
[00:41:05] Bryan Fields: Yeah. Yeah. I mean, we could definitely hop into that. And I’d like to, I think just to put from context, right? You went in and there was payphone boost and now you’re coming out and cannabis is, is legal in multiple states, right?
[00:41:15] What, like what a why disparity? From, from when you first got started were, were you consuming cannabis and inside? Like, can you talk about that at all? And like what type of product quality were you able to tell anyone, Hey, like this is what I got in trouble for. Did
[00:41:26] Luke Scarmazzo: anyone believe you? I’m, I, I don’t know.
[00:41:29] Like if, if I, I could get in trouble or not, but I don’t really care at this point is yes, I smoked every single day I was in prison. Um, I even got a, a dirty test once. If you get a dirty test in, in prison, they throw you in the, in the solitary confinement for like 60 days. It’s, it’s rough. So people don’t, people really try to avoid it.
[00:41:50] But yeah, I smoked in there. Um, In California, we had, you know, we had good, good weed coming in, but when I got transferred over to like Louisiana and Mississippi, [00:42:00] no weapons. Good mean, Ooh, man, they, they got it tough out there. Like they were coming in like, yo, Luke, we got some gas. And I’d look at it and I’d be like, absolutely dog.
[00:42:08] Like this is trash right here. You know what I’m saying? Like, you guys have some of the worst weed around. So yeah, we, we definitely
[00:42:15] need
[00:42:15] Luke Scarmazzo: to help the south, um, you know, level up on their cannabis game down there, which I think they are. I think like the, some of ’em are south. Oklahoma’s doing real good out over there.
[00:42:25] Um, Mississippi I think just came online. Louisiana’s been online for a second on, on the medical stuff. So hopefully that they, they can uh, bring it around and be able to get some good, good cannabis down there cuz people need it down there. Yeah,
[00:42:39] Bryan Fields: absolutely. So let’s fast forward a little bit. You, you get that email and I know you were in disbelief and you had to double check it.
[00:42:44] Take us through that story and then we can hop in to kind of present day cannabis.
[00:42:47] Luke Scarmazzo: Okay. So I had no idea I was getting out. Like, we had stuff in court, but I had, I’ve been had stuff in court for years at that point, right? So [00:43:00] I get up on a Fri, it’s a, it was a Friday morning on, uh, February 3rd, so literally what, like 96 days ago or whatever.
[00:43:10] Um, and I get up and do my normal routine. I make some coffee, you know, getting ready to work out. Um, and I log onto that email system that, that I was telling you about. Um, and I see like just a crazy number of emails that are on there, and I’m like, damn, what the, you know what I saying? That’s, that’s kind of weird.
[00:43:30] I don’t usually get that many emails, so I click on it. The very first email is from my, my attorney, Carrie Dent from King and Spalding in dc. She’s a beast, by the way. I know like most people can’t afford an attorney like that. And I just got blessed to be able to work with them pro bono, but like, I’m telling you, she is brilliant.
[00:43:49] She’s like a sweet looking, you know, lady that you would never think like, okay, like she’s anything other than just that right [00:44:00] pit bull when it comes to the law I’m talking about. This lady is brilliant. But anyway, you know, shout out to Carrie though. But yeah, so I get a message from Carrie and the subject line says, you’re a free man.
[00:44:13] And I just like stare at this thing for literally like five minutes and I’m just reading it because man, Brian, it took so long to get to that point. Like so many disappointments, so many almost theirs. Um, you know, my family had gone through like the roller coaster of oh, he’s gonna get out. Oh, he is not getting out To the point where I didn’t even want, like, wanna share like news with him of like, Hey, we might get a ruling or anything like that.
[00:44:41] I would just kind of keep it close to the vest because I just didn’t want to disappoint him anymore. Um, But when I’m sitting there reading this email, it’s just like washing over me and just thinking to myself like, man, is, is it really over? So I log out, I go put my coffee down in my cell. I’m [00:45:00] standing in my cell for like a couple minutes and I said, man, I gotta go back and read that again.
[00:45:04] Like, did that really say what that said? Like, so I could, or am I tripping right now? So I go back, reread the email, um, and yeah, it said you’re getting out. And I then I saw a couple o other emails from Weldon, um, a few other people, um, my mom and dad of course. And then I went, I go over to my workout crew and I’m like, hell guys, I ain’t working out today.
[00:45:29] And they were like, what? Why? And I didn’t wanna say anything to them at first yet until their prison made it official. Right? Because like, I’m still like in disbelief kind of right. So I’m like, I don’t know, man. I gotta talk to my lawyer and, and see what’s going on. Well, like, you know, an hour later prison calls me into like the back offices and they say, Hey look, you’ve been granted the immediate release.
[00:45:48] Um, we gotta have you off the compound in like three hours. So I, when I come out of that room, like everybody knows now, like the whole unit, there’s like 150 like hardened [00:46:00] convicts that are sitting there hugging me and laughing and everybody’s like clapping and shit like that. Overwhelming love from all the dudes in there.
[00:46:07] And, uh, I have like 15 years worth of stuff in my cell, right? All, you know, the music stuff, clothes, you know, just stuff that you accumulate over the years. Right? So they tell me to go pack it up. I said, man, I’m not packing a thing in here. I said, you guys can have all this shit. I will, I literally will walk out with what I have on right now.
[00:46:27] You know, I just grabbed like my pictures, my family pictures and some of my legal paperwork and, and literally walked out of the door with just that. I mean,
[00:46:35] Bryan Fields: incredible. Right? I can only imagine for the ups and downs that you faced, like that feeling of seeing the email and then wondering to yourself like, is this another time of disappointment or is this for real?
[00:46:45] And I can only imagine how, how happy you must have felt when you recognized it was real. So you’re in Mississippi, right?
[00:46:51] Luke Scarmazzo: Yeah, I was in Mississippi. So how do we get home that, that’s actually funny thing, right? It is like, so [00:47:00] they have to get you back to where your release residence is. But they wanted me, they, they on, they only will pay for a bus ticket.
[00:47:08] So the bus ticket was gonna be like 66 hours or something crazy like that. I’m like, I am not sitting on no Greyhound bus for 66 hours while I’m waiting to get home. Like, what? With how I feel right now. So you can, you can get a plane ticket, but you gotta pay for it yourself. So I call, I call Weldon, um, over at Mission Green.
[00:47:28] I was like, you know, he already knows what’s going on. I’m like, Hey, we gotta get a plane ticket. I said, cuz I can’t sit on a bus for three days and drive back home. Like I’ll go crazy in that thing. Um, so if we got a plane ticket, I go to the airport. I called my daughter. I had talked to her earlier that day and told her I was getting out.
[00:47:46] She went crazy, started crying and all that stuff, but I didn’t talk to her the rest of the day. And when I’m in the airport, I call her and I’m like, Hey, I’m in the airport. I said, where you at? And she was like, I’m in the airport. I’m like, what do you mean? And you’re in the airport. She’s like, I’m coming to see you.[00:48:00]
[00:48:00] So she, she literally jumped the next plane. My daughter’s out in Newark, actually. She lives in Jersey City. So, uh, she jumped the next plane at Newark Airport to California and almost beat me to California. She, I think she was like 10 minutes behind me when I landed. So that was dope, man. Just being able to reconnect with her after so long, uh, was really the best thing.
[00:48:22] Brian, I mean, I’m talking about like, I missed her so much. She was my number one advocate, never wavered, was like in, grew up in like a prison visiting room, you know what I mean? When most girls would’ve been like shopping or going to the mall, she’s sitting there supporting her dad eating frozen burritos.
[00:48:41] You know what I mean? So, man, much love to my daughter. She, she held me down. Um, and just to be able to reunite with her and reconnect with her right there at the airport, like on my first few hours of being out was just like the biggest blessing that I ever received. [00:49:00] So after that initial like news you
[00:49:04] Bryan Fields: get home, is it like the first week he kind of just like indulged
[00:49:07] Luke Scarmazzo: in regular everyday life stuff and then kind of walk us through those like kind of couple weeks after you get out?
[00:49:14] Yeah. Um, like my main thing that I want to do, like there was all kinds of stuff lined up for me, right. And media stuff and you know, meeting with people and you know, talking business and all those things, right. But my main focus was like, I want to just reconnect with my family. It had been so long since I had been able to just be with them, you know, other than being like supervised.
[00:49:35] And then with Covid and the restrictions that happened with, with, you know, the whole pandemic. It’s like we weren’t allowed visits for years. So we, I literally had not seen my family. I think I saw ’em once in like five years, you know, so just being able to be, reconnect with them and you know, just. Eat some food, like literally on the drive home, I, I, I see a Pizza [00:50:00] hut and I’m like, pull over.
[00:50:01] Like, pizza Hut is not my favorite pizza, but I just wanted a pizza. It didn’t matter what it was, like, lit. Literally. Could have been a little Caesars or something and I would’ve been like, yo, pull over. We’re getting a pizza. So I, you know, food of course, like I wanted to just eat as much like of different food that I could, because everything you hear about prison food is true.
[00:50:18] Let me just go ahead and just say that for the, for the audience out there, it is like, prison food sucks. It’s terrible. So one of the first things I wanted to do is just eat a bunch of good food. The crazy thing was like, I was looking forward to being like in a bed, right? And, and, and sleeping in like a big comfortable bed.
[00:50:36] I lay down in the bed that first night. And I felt like I was like drowning in the thing. Like, cuz you know, beds in prison are like, they’re on steel, right? And you got a mattress that’s like, probably like this thick, you know what I mean? So for years and years I’m used to sleeping on this really hard surface.
[00:50:52] So I lay on this like big seay Posturepedic bed and I felt like I was like in quicksand, like I c I slept like crap that whole night because I’m like, [00:51:00] this bed is too soft. Yeah, it was crazy. But I’m, I’m used to it now though. I love the soft bed now, but man, it was, it was, it was a, definitely a game changer.
[00:51:11] What was it like
[00:51:11] Bryan Fields: checking out California’s cannabis scene?
[00:51:15] Luke Scarmazzo: Man, eye-opening. Just, I mean, like I said, I had kind of, you know, kept my, my thumb
[00:51:21] on
[00:51:21] Luke Scarmazzo: the pulse of it throughout, throughout my incarceration. But to come out and actually see it, like, you know, I went to Benga where I, where I connected with you guys in Miami.
[00:51:31] That was dope. Um, and then I just got, got back from Hall of Flowers, uh, last week. That was crazy. Just to see like how much the industry has just blown up and become accepted, you know what I mean? Like, I’m talking to like stocker moms and stuff that are talking about their vape pens now. You know what I mean?
[00:51:50] And stuff like that, like that like would never have happened back in oh four. Like they would’ve never, like, even if they were smoking cannabis, they never would’ve admitted to it, like in [00:52:00] front of other people. Right? So that is dope. I, I love like how it’s being just researched and be, people are being able to use it therapeutically and medicinally for array of different things, you know, because I really think like all medical can, or all cannabis use is medical in some way, right?
[00:52:18] Like, we’re either, you know, helping with our anxiety, helping with sleep, helping just relax, helping to g just vibe out on like a party scene or whatever it is, right? So, I just love that it’s more being more accepted out here. And the only thing that I would have to say is like the government has in California has gotten way too involved.
[00:52:38] Now, we wanted like government regulation back then in oh four, right? Because it was real loose. And I even felt like to have like a cool framework to where we could work within would be dope, right? But they have overregulated this plant out here to where we’re, we’re seeing like double and triple taxation on, on cultivators and dispensary owners [00:53:00] to where they’re really making it hard to survive as a business owner.
[00:53:03] So that part is really kind of, kind of, uh, you know, a depressing thing that I hope that like I can use my story and kind of advocate to help change the part of that too. You know, freeing the people that are incarcerated for cannabis is of course my primary goal that before anything right? But at the same time, we have to make this industry sustainable.
[00:53:24] We have to make it to where people can be viable business owners out here if, if we want this to survive and continue to go forward. Are there any
[00:53:32] Bryan Fields: restrictions or ways that you can’t be around the plant, obviously, uh, with you being in, in, in trouble with the cannabis, I would wonder if, if the law was a little more hesitant for you to be around it again.
[00:53:43] Was there any sort of policies around that?
[00:53:46] Luke Scarmazzo: Yeah, so I got what’s called five years supervised release, which is basically like parole or probation. Right. And within that, my, my restrictions is I can’t do any [00:54:00] plant touching. I can’t smoke. I’m, I’m tested three times a month and all that stuff, which is to me like, okay, the federal judge who let me out, Dale draws right.
[00:54:11] Thank you, Dale. Love you. But, um, the judge who let me out, let me out because. Of the injustice of my case and because the changing legal landscape surrounding cannabis and that it would’ve continued to be, you know, unjust for me to serve that long sentence. Right? So when I come out, I still have this five years probation that was attached to me when I was sentenced back in 2008.
[00:54:36] So it doesn’t make any sense. Like, so one, one of the things that Carrie is gonna, uh, Carrie Dent is gonna c try to do for me is to try to get the supervised release drop because it’s, it just, it’s, it’s, it’s unreasonable. It doesn’t make any sense to, you know, for me to be able to have these restrictions when I wasn’t breaking the law.
[00:54:58] You know what I mean? So hopefully we [00:55:00] can get that lifted, but in the meantime, like I’m just participating in whatever capacity I can, I’m get, you know, I’m doing, um, you know, a lot of the advocacy work, um, came on board with Glasshouse to be able to kind of steer that ship and, uh, use the resources of.
[00:55:17] Glasshouse to make an impact in that space. And they’ve been, it’s awesome because they’ve been super supportive of that. And it’s just good to be in a situation where people are as passionate about a subject that I am, you know, and, and releasing anyone who’s incarcerated for cannabis is huge. Um, talk
[00:55:37] Bryan Fields: about your role with them and talk about the first experience of you visiting their unicorn
[00:55:41] Luke Scarmazzo: uh, greenhouse.
[00:55:43] Okay. Yeah. So, um, I was brought on by Glasshouse as their lead brand ambassador to kind of spearhead, um, the, you know, social justice wing of the company. Um, they’ve been super welcoming, like Graham and [00:56:00] Kyle advocated for me when I was still incarcerated, and that meant a lot to me because there was not a lot of large companies that were sitting there saying, free the cannabis prisoners or saying anyone’s name and stuff like that.
[00:56:11] So when you had a large company like Glasshouse and they were actually. You know, raising awareness and vocalizing like, Hey, look, these guys, Parker Coleman needs to be free. Jose Valero, Luke Scar, Maso, like, and they’re saying our names at these different events and, and on film and stuff like that. It meant a lot to me.
[00:56:31] So I, I wanted to work with them when I got out. So it was a awesome relationship. Weldon Angelos Link linked me up and they brought me on as lead brand ambassador. And from day one, like, it’s just been an awesome relationship where they’ve been really supportive of, you know, making sure that we make a real impact in this space.
[00:56:53] Right. So I really am happy that Glasshouse recognized that I could make a [00:57:00] contribution in this space, and we’re gonna make probably the biggest impact that any company has ever made. That’s, that’s dope. Number one. So about, I’d say a month after I was, uh, uh, brought on board, You know, they, they said, Hey, we’re gonna come down and bring you down to company headquarters and do the onboarding and stuff like that.
[00:57:20] So I’m like, cool. So I fly down there, got to see their facility, which is like, nothing I’ve ever seen in the history of man, like this facility is like a cultivator dream. I mean, I I if you, if you, they’re gonna be doing tours, I think of it soon. So if you have the opportunity to go down and tour this thing, Brian, if you haven’t, or you know anybody who’s listening, if you want to go down and tour Glasshouses Farms, you have to do it.
[00:57:51] If you are like ever been in the space or if you’re just like cannabis, like this thing is like, it’s like [00:58:00] its own planet and it’s like all growing cannabis on it. Like it is that big and it’s just, it’s awe, it’s awe inspiring. Like when I grew, when I grew my first. Cycle of cannabis in 95 when I was, you know, just 15 years old.
[00:58:14] Like, I’m growing in my closet. You know what I’m saying? I got like a few plants in my closet, right? And then, you know, a big show back then for us was like a 40 or 50 lighter. That was like, mesmerizing. We’re like, damn, you’re growing like this whole warehouse. Like, that’s crazy. Like this is the biggest grow ever.
[00:58:31] These down there, they have 5.5 million square feet. That’s what the M million square feet like the, the growing on that level is huge. And what they’re trying to do is they’re really doing it sustainably. You know, they’re using solar power. It’s a completely self-sufficient grow using the sun. Um, and, you know, they’re gonna be positioned to make a, uh, really, really big, uh, [00:59:00] Contribution to on the national scale once we can get some federal legalization in interstate commerce.
[00:59:05] Um, so Glasshouse is, is, is awesome. What the, the visionaries that they have there are awesome. What they Graham and Kyle have put together over there is something that’s very impressive. And, you know, I’m, I’m happy to be a part of the team down there and I’m, I’m really excited about what we can do to, uh, bring justice and, and, and bring, you know, just the advocacy side of, of the company.
[00:59:30] Like really to, to fruition. Jay?
[00:59:33] Bryan Fields: Yeah. Shout out to Graham and Kyle for absolutely killing it. Um, would like to know, in your opinion, are there still others that are facing similar charges for non-violent cannabis offenders? And can you kind of share some information about that?
[00:59:44] Luke Scarmazzo: Oh yeah. Um, I mean, there’s thousands of people that are sitting in federal prison right now for a non-violent cannabis charge.
[00:59:51] Um, and we can’t forget about them. Like, you know, Parker, free Parker Coleman, uh, free Bubba Johnson. [01:00:00] Free. Edwin Rubis Free. Frank Rogers. Free. Danny Trevino, free. Jose Valero. And then there’s a b. There’s hundreds of women too. Uh, Mandy Lee Carlson, uh, Carrie Pearson. Uh, Deana Martin. Like, I mean, I could literally use the rest of your show and, and name people.
[01:00:22] That’s how, like sad of a situation. It is. Um, but one of the things I’m really excited about is that, you know, now that I’ve been out, like now it really begins, you know, now the work, the hard work really begins. Like, I’m out, I’m cool, I’m free, and that’s great and everything, but there’s still my brothers and sisters that are sitting in a prison cell for a non-violent cannabis, offense.
[01:00:50] What everybody does in California every day. All these big companies. What they’re doing every day is what landed these people in a [01:01:00] prison cell. There’s people, there’s moms and daughters, there’s brothers and sisters and sons that are sitting in a federal prison cell. Like, I can’t stress that enough.
[01:01:10] Like we, you know, we, there’s the taxation stuff going on. There’s stuff in the industry that, that we need changed, um, you know, regulations and all that stuff. But before we do any of that, the banking, you know, safe banking needs to pass. But before we do any of that, man, we have to let these people out of prison.
[01:01:29] Like we can’t continue to like, talk about cannabis and talk about forwarding the, the industry without, without freeing the people that are still incarcerated. When people hear your,
[01:01:41] Bryan Fields: when people hear your story and Weldons, do they understand the implications? Do they, do they recognize, especially people on DC when you guys are having those active conversations, how, how is that happening And what, what’s the disconnect?
[01:01:55] Luke Scarmazzo: I don’t think they know. I mean, when, when I share my story, like, okay, like for [01:02:00] example, even in, in Miami, like we’re at the Benzinga Cannabis Capital Conference, right? And when I got up and spoke and, and told my story and shared it, you know, with the thousands of people that were there, like the rest of the day, people came up to me and said, we had no idea that there was a licensed operator that did, was serving 22 year sentence in federal prison.
[01:02:25] Like we had no idea. This is our people, right? This is the cannabis space. Like if anybody should know about that situation, it should be, you know, our own industry. So when I saw that it was really eye-opening and I said, wow, like I really have to continue to humanize my story and share it with as many people as possible on as many platforms as possible.
[01:02:47] Because if the cannabis industry is that ignorant to the fact that we have these situations going on, The re you know, regular Joe and Jane citizen, like they’re really gonna be ignorant to it. So that’s why it’s so [01:03:00] important, like for us to meet with lawmakers, go to DC and talk to the people. Like I was just in the state capitol, uh, on Monday and, you know, two days ago and meeting with lawmakers and senators and assembly people and you know, sharing my story and letting ’em know like, hey look, this is something that we have to make an impact in this space.
[01:03:19] We can’t continue to let it go on. Um, and we will be in DC soon and I’ll be doing the same thing there. And the more that I can be able to just humanize my story and share it with people and let ’em know that we have these situations and are continuing today, that must stop. Um, I think that we can really make an impact.
[01:03:39] Another thing too is that my story is, Is really impactful in the way that it can kind of touch like both aisles, right? Like yeah, on the democratic side, you have the social justice aspect of it and you know, of being, you know, a victim and a, a, a member of a community that has been [01:04:00] harmed by prohibition.
[01:04:01] But then on the, you know, the right wing and, and republican side and conservative side is we have, you know, government overreach and fiscal, fiscal conservative Z um, you know, and, and uh, you know, state’s rights and all those things that kind of tap into to all the stuff that’s in the Republican wheelhouse too.
[01:04:18] So if I can go over and my story can kind of be like the uniting factor of both of those things, I think that will be very impactful and something that we can use to move the needle forward. I completely agree. Have you noticed, uh, the same kind of empathy from individuals outside of the cannabis community when you share your story with them?
[01:04:36] Um, they’re blown away. They’re like blown away because they’re like, they don’t understand it. You know what I mean? They’re just like, how were you? Like they think they’re, a lot of times they think there’s had to be something more to it. Like, what were you doing? Were you selling like kilos of heroin out the back of the store or something?
[01:04:52] Like, how did it, how did this happen? So yeah, like when I, when I share it with just like your lay person out there, you know, [01:05:00] they’re, they’re blown away that this happens. That this happens in their name too. This is my state. My case was the United States versus Luke Scar, Mazo, that’s the people of the United States.
[01:05:09] So these incarcerations and these prosecutions are happening in the name of the people. So when you kind of, when I share that with just, you know, your peop your people that are outside of the industry, they’re just blown away by it, man. They’re literally like, can’t wrap their minds around, you know, these type of injustices happening right now today.
[01:05:31] Any music
[01:05:32] Bryan Fields: collab on the docket
[01:05:33] Luke Scarmazzo: going forward? Um, yeah, I’m actually. In the studio now. Um, So I’m, I’m trying to tap in with, with some people I’d love to work with, like, you know, we got some, some people that are regional around here and, and on the national scale, like Mazi. Mazi just signed with Yo Gotti.
[01:05:51] I’d love to work with him. Um, yuk mouth of the Looney is my dog, you know what I’m saying? I, I’d love to get back with him and work. E 40 is, is [01:06:00] the big homie, you know what I’m saying? I love 40, 40 has always been a g in it. Go ride the whip, right? Yeah. You already know. Go ride the whip. So yeah, no, like I, I’m definitely getting back in, in the swing of music.
[01:06:14] I hadn’t had time, like up until like just. Really last week to be able to actually sit in a studio and, and, and vibe with some producers. And they’re, I mean, they’re literally just handing me a bunch of beats and they’re like, dude, go to work. And I’m like, listen, I wish I had the time, like it was back in the day for me to just sit in here and just vibe out and create a whole album.
[01:06:33] But it’s gonna come, we’re gonna do some things for sure. I’m super excited about that too, because I love music, man. Music is my thing. It’s been my thing since I was a kid, since I could first touch the keys of a piano. And, uh, so yeah, it’s, it’s something I’m passionate about and it’s like to really have like a true cannabis revolution, right?
[01:06:53] We gotta have a soundtrack to that thing. Amen. Amen.
[01:06:58] Bryan Fields: You could sum up your [01:07:00] experience in a main takeaway or lesson learned to pass onto the next generation.
[01:07:03] Luke Scarmazzo: What would it be?
[01:07:09] Man, that’s tough. I would have to say like, number one, do not give up. Do not give up no matter what the odds are against you. Um, and just continue to do what you believe. You know what I mean? Stand up for what you believe in. Cannabis and medical cannabis was something that I was passionate about, that I love.
[01:07:34] I love the plant. I love all the things that it can do. Um, and even though like I was being told I had to say it was bad or I had to, you know, be remorseful or I had to, uh, you know, discount everything that, that it, it could do, I wouldn’t do it because I was that passionate about it. I believe in it that much and I stood up for what [01:08:00] I believed in, and I will still continue to do that today.
[01:08:02] So, number one, never give up. Stand up for what you believe in and just persevere and you’ll come out on the other side. That’s really well said. All
[01:08:14] Bryan Fields: right, prediction time. Luke, what is the number one way that people can align with your mission and help others to get freed for non-violent cannabis
[01:08:23] Luke Scarmazzo: offenders?
[01:08:25] Okay, number one, go to project mission green.org. Tap in, find out where, how you can become involved. If you’re a dispensary or a business owner, you can get involved in the Roundup program that we got with Mission Green Alliance. Um, follow us on social media. My social media is exactly how my name’s spelled.
[01:08:44] Luke Scar, Mazo, L U K E s C A R M A Z Z O. Um, yeah, and just continue to tap in with us and we’re gonna be launching a podcast soon too. That’s gonna be super dope. So stay, stay tuned for that. And, uh, yeah, just [01:09:00] support the companies that support us, man. Sup. If you see a company that is, is giving to this cause, support their products, support what they do, and, and, and we can, if we all come together on this, We can really make a change.
[01:09:16] Really. Well said, Kelly. I mean, I
[01:09:18] Bryan Fields: just wanna second
[01:09:18] Luke Scarmazzo: everything Luke said and then also, you know, reach out to your representatives, your local representatives, and Yes. You know,
[01:09:24] Bryan Fields: make phone calls, write emails. I mean, it’s
[01:09:27] Luke Scarmazzo: ridiculous that 70 plus percent of the US population thinks that cannabis should be legal and it’s not federally, so.
[01:09:35] Yeah. Yeah. And, and just to, to dovetail off that, your federal representatives, your federal congressmen, your federal senators, make sure you write to them. Tell ’em that you support federal cannabis legalization and support interstate commerce and support these crazy, uh, two 80 e restrictions on these businesses that they can’t write off their costs like a regular business.
[01:09:58] So yeah, tap in with, [01:10:00] with them on the federal level, on the local level, on the state level, and just continue to push that forward. I’m glad you mentioned that, Kelly. Yeah. For me, I
[01:10:08] Bryan Fields: think just sharing your story, Luke, I think if, if you hear this story, I, I think most people will probably not have an understanding on, on, on exactly what happened.
[01:10:17] And I think just by sharing that story will change people’s perspectives and recognizing that change needs to happen and we need to kind of move forward on these areas because what happened to you was extremely unfortunate and it’s inspiring for, for others to help tell that story and appreciate you being vulnerable and honest with here today because it’s a really, really powerful
[01:10:34] Luke Scarmazzo: story.
[01:10:35] Yeah. Thank you man. I had a great time and uh, I appreciate you guys having me, man. Yeah, thank you. We, we’ll only
[01:10:40] Bryan Fields: get all in the show. It was fun. Thanks for taking the time, Luke.
Editors’ Note: This is the transcript version of the podcast. Please note that due to time and audio constraints, transcription may not be perfect. We encourage you to listen to the podcast, embedded below if you need any clarification. We hope you enjoy!
An enormous victory for the US Cannabis Vaping sector happened, and most completely missed it.
The recent “definitive victory” by AVD was a critical win for the cannabis industry.
A monopoly would have jeopardized the entire category and potentially put a stranglehold on crucial hardware. This ruling ensures that competition continues and allows brands and consumers to not suffer at what could have been.
The bigger question remains, is this IP battle the first of many?
We sat down with Alex Kwon, Founder and CEO of AVD, to discuss the following:
USITC cannabis vaping dispute
Wartime CEO strategies
Building a Diversified Supply Chain
Forward-thinking disruption tactics
About AVD:
In our former lives, we were extractors and processors. And, probably like you, we were looking for vape hardware equal to our oils. Except we couldn’t find consistently reliable cartridges. That were correctly designed. Didn’t burn our oil. And were priced for the market.So we said to ourselves,
“We know exactly how the perfect cartridge should perform. After all, we’ve been in the industry for 20-plus years. From cultivation to managing licensed extraction labs to processing and formulation. We’re perfectly positioned to engineer and manufacture our own hardware.”
[00:00:03] Bryan Fields: up guys? Welcome back to the episode of the Dime. I’m Brian Fields, and with me as always is Kellen Finn. This week we’ve got a very special guest, Alex Quan, c e o, and co-founder of a v d. Alex, thanks for taking the
[00:00:12] Alex Kwon: time. How you doing today? Doing great. Happy to be on and looking forward to speaking with, uh, both you, Brian and, and, and, uh, good old, uh, friend, ke Kellen.
[00:00:22] Bryan Fields: Yeah, there’s a lot of history we’re looking to uncover today. Kellen, how are you doing?
[00:00:27] Alex Kwon: I’m doing really well. Really, really excited to talk to, uh, Alex Quan had a huge influence on me in in the space and, you know, I’m just really excited to talk to, to Alex and it’s just really nice that we’re gonna bring kind of that West coast knowledge to, to educate you.
[00:00:43] East
[00:00:43] Bryan Fields: Coasters. Hey, Brian. Yeah, I mean, listen, it’s needed, right? Uh, there’s a lot we’re not doing, let’s say, well, here on the East Coast, but the one thing we are doing really well is. Really enjoying those West coast brands and, and products. So, uh,
[00:00:55] Alex Kwon: it’s just a matter of time though. It’s just a matter of, I mean, it is ma I mean, it is
[00:00:58] Bryan Fields: happening now.
[00:00:59] It’s just a [00:01:00] matter of like, are we just gonna accept it or are we just gonna say, Hey, we still got it here in New York, but, hey. So Alex, far listeners unfriendly about you. Can you give a little background about yourself and then how you got
[00:01:09] Alex Kwon: into the cannabis space? Yeah, like look, um, the easiest way to kind of talk it, uh, I, I think it’s.
[00:01:15] Pointed out some of the other kind of media that we’ve done. Um, but we, we’ve been a little bit more private about things. But long story short, um, we cut our teeth for better part of a decade, um, eight to 10 years in Humboldt. Um, starting back in like oh 7, 0 8 ish timeline. Um, there was, you know, I started kind of a little, um, project there when it had to do with what we would do is, uh, we would do some land acquisitions, some land development, um, and, and worked a lot with a lot of growers, right?
[00:01:43] And so that was kind of the initial foray from a real estate perspective, and then understanding kind of how you had to develop properties, how you needed to understand kind of the different cultivation methods and how that kind of worked. And, and kind of at that time there was a lot of, um, you know, it was an [00:02:00] interesting age of for cannabis at that time, just because of the amount of time that had come off of two 15 and then kind of how the different areas and jurisdictions read into kind of medical cannabis and, and, and, and what each.
[00:02:14] Area would allow you to do, and, and Humboldt and the Emerald Triangle kind of, you wouldn’t have never guessed it, but like it was where, you know, a lot of kind of the brain trust and, and knowledge, um, and relationship with the PA plant, uh, the land, um, kind of understanding the history within it. I, I think there’s just an incredible amount of knowledge and, and, and, um, information that was kind of, wouldn’t have known it, it just, it was permeating throughout that.
[00:02:40] Area, you know, and Kellen can talk to you about that if he has not already from when he came at later times, uh, into Humboldt because it was just, again, all stages and ages. Right. I think that’ll probably be a more of a theme during our conversation. It’s just kind of the, the different way that, that that time kind of passes.
[00:02:55] And then, uh, when you look back now, how different it was. So, um, we spent a [00:03:00] better, a, a a good amount of time there. Um, and then that kinda led us to, as legalization kind of happened. Um, there was an opportunity in, in, in Washington state where we founded, uh, sun Grown. And uh, that was really, um, uh, a project at that time where we really wanna focus on.
[00:03:20] Kind of the derivatives of the plant, right? We really wanted to focus on, you know, we, we kind of always knew that we knew the right growers, the right connections to people that can grow really good flour, you know, targeting resin, kind of go after kind of the next stages of what we felt like the future of cannabis and at least one category of consumption would go.
[00:03:40] Um, and that, that project in Washington was really geared towards how do you grow something at the best cost per milligram, per milliliter, and really target two main parts, right? There was the cannabinoids and the terpenoids and kind of what you were going after from a chemical basis, but also doing it form from like a cultivation perspective, right?
[00:03:59] Here’s all the [00:04:00] different methods, here’s the different methods that existed, uh, through our experiences in Northern California. Um, what, you know, from, from indoor to mixed light, greenhouse, you know, depths, full sun, just name it, right? There’s a whole bunch of different modalities that you can use to kind of go after the type of exit.
[00:04:16] You know, product that you’re going for. And, and, and I think, um, the project in Washington really was all about understanding scale, understanding the ability to farm it, extract it, and then being able to understand kind of how it needs to be filled. And then you have to figure all this out, right? Early in cannabis you have to, you know, in, in other industries they allow you to be all these other things.
[00:04:38] But in, in, in cannabis, they actually force you to kind of do all of these things within one under one roof, right? And so, um, Washington had a different structure between being, uh, on the processing and producer side versus being on the retail side. And so, um, that’s actually kind of, you know, during that time period, I know, I know Kellen was a big part of that.
[00:04:58] When we were, we were really [00:05:00] targeting kind of again, the science of it, right? What, what actually was going on with the plant. And it was so new. Uh, I mean, there was information, but there wasn’t really any testing or real a, you know, quantitative data that was actually being collected. From, from kind of the methods cuz it was so new, right?
[00:05:19] And there weren’t people like mine, Kellen’s kind of operating in the space or coming into it. So it was very new at that time. We kind of always felt that that was the bet, right? Like, you know, liquid and vapor is gonna be a big part of where we go. Um, that, that, you know, we were pretty successful even though going through the trials and tribulations that any, um, early cannabis company owner can talk about, uh, their own, you know, battle scars, if you will.
[00:05:44] And, um, you know, that, that, that led us into kind of every kind of cartridge that you can kind of be in. And, um, you know, I, I know Callen firsthand at times, we, we went through some of these when we have failures and be like, not understanding like, well, there wasn’t a change [00:06:00] in the formulation or, or what happened on the oil batch.
[00:06:02] And then we’re going through the different parameters and then we’re trying to get understanding from the vendor, Hey, like, there’s a problem. They kind of like, put their arms up, they’re like, I, I don’t know. You know, or they’re, they’re like, oh yeah, we’re just gonna give you rebate. Well, It was a lot of oil in here.
[00:06:16] It cost us a lot of money, you know? And like now people don’t like our brand. Like there’s some of these issues, right? And so that was really like one of those, the, the things that was the impetus for AVD right? Was like, it could be done better. There were, there were not, there were not people that kind of knew cannabis and knew it the way that we do and the way that we kind of approached it.
[00:06:35] Um, and then also it was such a huge part of your cogs, right? So when you’re running the business also, it’s like you have 30, at that time it was like 30% something huge, right? it was in this piece of hardware, this widget that came from China that you didn’t understand. And I, it just at the time, right, the different types of cartridges coming over, what the efficacy of it was.
[00:06:56] And it’s tremendously advanced since then. But, [00:07:00] um, I think that was one of the initial parts, right? Knowing that it was a big cost, there was a problem with like service or safety or understanding the products. And then third was like they have no idea how to port this into oil that we’re dealing with.
[00:07:12] Because even as we’re extracting and going through it, like even, and Kellen can tell you all about it, right? When you’re running through, you know, when you’re, if CO2 is your initial extraction method, if we’re gonna do ethanol or we’re gonna even try to do any type of hash on a solventless perspective, any of these other ways, and even hydrocarbon obviously, right?
[00:07:26] These are all the main solvent, nons solvent ways that you can kind of, uh, or lighter solvent ways that you can kind of go through making the initial extraction. And so, and then it all became about the post-processing, the prep, and, and, and then understanding kind of all the constituents that were coming off the plant.
[00:07:43] And then you’re trying to take that, make it figure out if it’s stable, and then be able to introduce heat to it into a vessel and people are gonna vaporize it, right? So there was just so many complexities that were kind of going into that. Uh, but really it just started as like, let’s figure out if we could do this better.
[00:07:58] Uh, right. And it went from working with [00:08:00] somebody with a, you know, went from working with a trading company to a factory. Then, you know, obviously the biggest steps have always been for us growing up. And through upstream in the supply chain, which has been probably one of the most crucial things, um, cuz anything that’s made right, we, we, we have a very good understanding of where it’s made, who, who’s making it, what suppliers are, uh, and what actual, uh, what’s actually being done, uh, to be able to kind of be assembled.
[00:08:27] And it’s the kind of the same way that you think about when you grow or when you do any type of scientific extraction. You’re, there’s all these components and processes that you go through for the inputs for the whole, right? And it’s the same way any, it’s not any different with these widgets, right?
[00:08:39] It’s not any different with these engines and the cartridges. Uh, they’re all components, 10, 11, 12 different components that have their own quality controls that come in. So, um, You know, I know that, that, that might be a longer part of the story, but really cut our teeth in Humboldt. Um, it kind of sparked an idea of of of going after targeting liquid.
[00:08:58] Um, from, [00:09:00] from a perspective of cultivating right, fully from growing the oil, really from a crop plant perspective. Understand the cultivation methods that you’re going after, go after being able to scale it, do it repeatedly, understand the chemical part of it, and then also know the kind of the, the exit products that you were really going after and how’s that fit in a business model, right.
[00:09:17] That was really, that was really the kind of the thought process. But as we started thinking about, hey, our, our, our reputation or our livelihood, how well we do is based on this little engine. Um, it become, it, it was kind of a serendipitous path, right? Let’s see if we can do this better. And then it kind of took off on its own.
[00:09:34] Right. And then since then, it’s just, here we are with, with I’m sure other stuff that we’re gonna talk about. Yeah. I remember Alex, you spent like, uh, you, Leo and Mike probably spent. Months negotiating with CCE for like a couple pennies, right? Yeah. But those pennies were huge. Yeah. In terms of like the volume and then the light just clicked and you’re like, why?
[00:09:56] Why don’t I just make date pens myself? Like I’m just gonna go [00:10:00] do the cartridge thing. So, ho hold on a second. So
[00:10:02] Bryan Fields: Alex, I understand conceivably like the idea and the origin, right? Like your, your your large scale, you’re understanding the unit economics, you recognize there’s an opportunity here. Is the initial goal to try to help supplement your internal products.
[00:10:13] Are you trying to serve the wider market? Take us through like the internal strategy of what the original goal is. Was it just to be more self-sufficient or was the real plan, was it like, hey, like if we knocked this out the park, obviously in the long term, you can provide other else was the short term, what was the thinking
[00:10:27] Alex Kwon: in the early days?
[00:10:29] I mean, it was just serendipitous to be honest. Like, I mean, at that time, Callan, I think you were starting to think about doing your consulting. I think you were probably stopped, you were going off on kind of doing some other things. Cuz like we had grown how that company had grown really well. But it’s like, you’re a cap, you’re limited, right?
[00:10:46] Washington’s a very different animal, right? And so, um, uh, and I know that Callen knew that too. We always talk about like all these other places and some of the things cuz in, in any type of, you know, company that you have friends and family and the stuff that you’re [00:11:00] doing and you’re self-funded, like there’s a lot of, you wear a lot of hats, right?
[00:11:03] Sometimes like, well, shit, I don’t wanna do this anymore. I wanna go do something else. Right? So there, there is some of that, right? And, and people have to grow at their own a stage in age, right? Where they’re trying to go. And so I think at that time for us, um, you know, like. We did have early, you know, partners in our business and, and people that had experience over there.
[00:11:21] Right. And so there was, as, as kind of these opportunities came to us, it, it didn’t start as like, oh, I got this great epiphany as a new business and Hey Colin, we’re gonna get into hardware manufacturing. That was never like, there’s no way. Right. It doesn’t work like that. It’s, it’s the, it, that’s why I look, one of the things you’ll hear me say too is I think the plant chooses its stewards and it kind of takes its path, right?
[00:11:42] I think I can’t explain it any other way. The plant’s been really good to me, my friends, my family, all the people around us, and I think a lot of areas that it does good in, right? And so I, in this scenario, I don’t, I don’t take it any different, it was just kind of one of those things that they like, all right, let’s verify this.
[00:11:59] Let’s see if [00:12:00] with our knowledge that this can be improved. We can control some of these aspects. Cause that was when a big push on heavy metals was happening too. Like Cat three was just coming in into, into California. So vape gate, I think it was right up. Right before it happened, but like all this stuff kind of was, was percolating, right?
[00:12:18] Cars were becoming like this big momentum. Um, and, and, and at the end of the day, sea salt smore was like the, they were the 800 pound gorilla, right? They’re first to market had a monopoly share. That’s, but they had a product that was significantly better than what the cl what, what was before that?
[00:12:34] Because remember Kelly one on those stainless steel ones, the tra they put the little silicone wick or whatever. Yeah. Those little two do. Yeah. So, and then before that was like these little just WIC plastic ones that were cheap, right? So it, it, it, they did step up from that. But really, Brian, to answer your question, it was like, hey, you know, again, unit economics, right?
[00:12:54] That became an important aspect. Can we get a better price? Is it reliable? Is it something that we can [00:13:00] consistently do Well because that’s always the fear too. You, I’m sure other listeners and people that have gotten products from China or other, other types of trading companies and or factories that call themselves these things.
[00:13:12] But really they’re just. Kind of assembly products and selling you shit, right? Or, or are there reject products and putting ’em together and selling that to you? And it might be good on the first round or second round, but is it gonna be good on the third, fourth, sixth, seventh, and eighth round? Right?
[00:13:26] Which is super important, right? Are they gonna do the bait and switch? Are they switching out materials on you? These are all super important parts when you’re actually starting to do that, right? Our, uh, it’s the same thing from the plant touching, non plant touching, even business side, or when people just do what you say, right?
[00:13:40] So in, in our mind, it’s always about consistency. So, um, that was really one of the questions, right? Is can we make this consistent? Is this a product that’s gonna be better on our, on our bottom line? And can we influence, um, um, tweaking this thing, tuning it properly for the type of x extracts that we’re running, right?
[00:13:58] Because we, we just, we had very, [00:14:00] we’ve been very lucky to have a lot of different types of, Extraction artists within our house that were helping us. Kean is, I mean, you’re speak, you have one of your partners is one of those people. Right. That helped us very, very early in, in standardizing lot, standardizing a lot of the processes.
[00:14:13] And so, um, you know, that, that, that, that was an important part because knowing that, that if that was possible and it can grow, then great. And that’s literally, that’s all it was. It was a side hustle. It was just like, alright, cool, we’ll make some extra money on the carts for ourselves. We’ll have some more, more free cash flow to make some investments into, you know, branding or, or, uh, another place or, or maybe some other thing.
[00:14:41] And it just, it just kind of took on a life of its own. And, and, and we just had a lot of good relationships that we could validate not only ourselves, but we could validate with others. Um, and I think within one degree of us, we’re probably well connected to a lot of people in the space. And um, and I think, um, that was what really helped.[00:15:00]
[00:15:00] No, I would say just kind of the organic growth that it took off on its own. Sure. And I think that’s so
[00:15:05] Bryan Fields: important to highlight too, right? Like when you’re getting started, you, you kind of had a target of like, Hey, let, let’s try to set this up like this because I mean, your team has an intricate understanding of the plant and the specific nuances that have come with cannabis, not necessarily e-cigarettes.
[00:15:17] And I think that might have been a critical difference for some of the hardware providers because as I’ve heard you say before, the, the hardware is there to accentuate the brand and the product. Not necessarily take away from it, but to there to, to prop it up. And I think that’s a critical difference that most people don’t recognize that when they get a product doesn’t work as well.
[00:15:32] Sometimes they’re pointing the fingers. So kind of getting started on that, do you think the difference was that C cell didn’t understand the, the tiny nuances with cannabis? Or how do you think that that separated out?
[00:15:44] Alex Kwon: I mean, they’re gonna probably listen to this, so I don’t wanna give them too much.
[00:15:51] But yeah, I mean like, look, that that’s, that’s a part of it, right? It’s authenticity. At the end of the day, I’m not, I’m not knocking what any of those companies do. I don’t have [00:16:00] anything negative to say about, look, they’re, they’re, they’re doing what they gotta do. Right? What we, what we like to focus on is ourselves as in like, this is what we need to improve.
[00:16:09] This is what we need, how we need to carry ourselves within the company with each other. But ultimately we serve the customer. Ultimately we serve the client and it’s all about the client. Because if the client is making good oil, clean, good oil at good prices, and they got great hardware going out with it, then it’s just more access for people to experience cannabis.
[00:16:26] At the end of the day, everyone should have access to clean good cannabis, right? Cuz it should be their choice. And one way or another, if everybody had access to good, clean cannabis, hash, rosin, flour, vapes, whatever you want to call it, that is, you know, I’m, you know, people are, have levels of like their snobbiness or whatever they, they, they like, right?
[00:16:44] I, I, I, I have a certain preference on certain styles as well. And it’s like, if everyone had access to that right? The world would just be a, a less angry place. Right. It just would, it happens all the time. Sometimes when it’s like trying to put the kids on, it’s like, God, you just gotta get high. And then, then it’s [00:17:00] all good.
[00:17:00] They can run around, they can jump, they can do what they want. Right. But if not, you’re trying to hit that time, you get really upset. Right. So I, I look, I think, I think, I think when it comes to Sees Cell, um, they, they, they, they had a inherent, inherent advantage of being first, you know? Um, but again, they, they, they come from e-cigarettes.
[00:17:21] And I’m not saying that’s bad or wrong or all these other things. I’m just saying it’s just, it’s different than us. We’re born in cannabis. Right? And so for us, our purpose is also driven around that. It’s like I, we consume too, man. I’m like, I don’t want shit in our cartridges. You know what I mean? Like, I want fire risen, I want, I want fire liquid live, right?
[00:17:43] That’s, I want the dopest strains, I want all that. I want the complexity. I wanna know on the front end, it tastes a certain way and then when it tapers off, it’s gonna do something. I got, it’s the same thing, right? It’s all driven from that and making sure that it’s accessible, making sure that this makes sense, that we’re actually solving problems.
[00:17:58] It doesn’t make sense if we’re not [00:18:00] solving a problem for somebody, you know? So like, if, if we weren’t doing that, then we shouldn’t even be around, right? So I think, I think the thing that we try to focus on more than anything is, is, is the relationship with the company and the person that we’re working with, right?
[00:18:14] And then are we adding value to you, right? Is, is there some way that we can add value and it’s gonna come with shirt? It could be rooted in the plant, touching knowledge and doing this, but it’s also like, okay, what are you doing with your extract? How are you run? And Colin, that’s always been tough for me cuz our whole team can’t do that.
[00:18:28] But like, It’s, it’s a tough spot cuz Kellen knows there’s, we, we know a lot of things, especially about extraction methods know-how steps that people are skipping that they shouldn’t be skipping and that’s why they’re having is there’s a lot of that, right? There’s a lot of nuance in, in that aspect that goes to having reliability on, on their end product, not just one part of it, which is the hardware as well.
[00:18:51] So this is balance of, of education and doing that. But I, and, and, and, and what I would say is that like, I think the opportunity that we [00:19:00] have is because CSUN did that, right? It’s because they weren’t open in the market, did made advancement, price really high, did all these things. Great. You know, I, I’m, I’m grateful for all those things cause we wouldn’t have a company other otherwise, or have a position for us to go out and add more value in.
[00:19:16] You know, so at what point, Alex, did you kind of, because like in the beginning stages, your resources were in two different places, right? Like when did you decide that you’re like, Hey, I need both feet over here
[00:19:28] Bryan Fields: and I’m just gonna trust the team over there to do, do their thing. How was that transition?
[00:19:33] Because I wasn’t there for
[00:19:34] Alex Kwon: that, you know what I mean? Yeah. I walk, it’s kinda funny. I know exactly where I was sitting at that, that previous Seattle house. Um, I know exactly where I was. I remember you looking at the cross at the Yeah. I re I remember because like, it wa look a lot of things. I think business-wise, a lot of listeners may not know that as well.
[00:19:53] Like, I, I mentally have a strong philosophy around business and a lot of mentors around us, right? A lot of people that have, uh, you [00:20:00] know, dare I say, protect me from myself, right? And so, um, You know, have structure so that, so, so that you could, you can kind of meander around and create other opportunities and think about that, right?
[00:20:10] But you gotta have an incredible amount of trust. Uh, you have to have an incredible amount of rigor in place, uh, so that you, you, you kind of follow the fundamentals of business, right? Good cash flow. Understand your balance sheet, right? Have good ebitda, like, don’t have debt assets, don’t have liabilities that’re greater than an assets.
[00:20:25] So these are some things that you own versus things that you owe, right? Sometimes people lose sight of that, right? And how that needs to work on its fundamental basis. Um, but we’ve, we’ve, we obviously, you know, the folks that we’re talking about, and I, and I think what happened, Kellen was, um, at the time, it, it was really, you know, the structure that, that, that.
[00:20:45] Business endeavor prior to a v d was really about like, how do I build it with others? Right? How do I build something bigger? How do I do it with friends? And how do we, how do we empower others to kind of make it theirs and grow from it, right? Um, and so it was just a different stage and age of my life [00:21:00] at that time as well.
[00:21:01] And I think, um, with, with a v d it was kind of the side thing. And in a very short period of time, it did a tremendous amount of sales, right? Like, I remember like for six weeks, I was like, all right, I’m gonna work on this. And I’m like, 8:00 PM to 2:00 AM right? And you know that I don’t sleep on his work constantly, right?
[00:21:18] So some people just don’t really understand it. Like, I work 20 hours day. It’s just, it’s, I just can’t shut this thing off at times, right? And so, um, that’s why I need to smoke weed. Um, so, uh, the, the, the, uh, I remember it was like six weeks, right? And, and. And we did, I forgot what it was either like one, six or two, some over a million couple, like almost a couple million in sales.
[00:21:39] Right. And I was just like, I, I don’t know, we could ignore this thing, man. That was kinda, that was kinda literally the combo. They’re like, Nope, we shouldn’t ignore this. And so, um, you know, in a lot of, in a lot of ways it’s just very fortunate because it’s like, Hey, you guys, it was already kind of set up for that way.
[00:21:57] Right? I mean they al already ran everything anyways, Colin, you [00:22:00] knew that, right? Yeah, for sure. Um, It was just really like, Hey, I’m gonna, you know, scratch my entrepreneurial itch and, uh, I’m gonna go see kind of what could happen here. And if it works, it works, it doesn’t, we’ll, we’ll, we’ll we’ll look at other things.
[00:22:11] And I’ve always kind of viewed it from a, from a platform perspective on a lot of these other aspects. Right. So, um, it was a great stage of, of time right, of building that up with friends. And because my, a lot of my role is the land development, right? I, I, we, we created land there that was. I know at that time, no one had done before the speed with the county and like Terraform land, a city’s worth of power, 14 miles, an underground pipe, all licensed, zero to 60 employees.
[00:22:39] Like, you know, the whole story, Kelly, you were there, right? Two harvest zero and less than 10 months. Right? PE that’s just unheard of for all the things license in both places and doing all that, right? And so that was a tremendous task, right? That happened. And I’m glad that we documented it. So one day we could show people like, I see this grill, this happened.
[00:22:55] We, we built this thing. And when, when, when we had snow up to here and, and we [00:23:00] did it in record time. So, um, that was, that was a fun, fun period. But, um, you know, the, there were better people there to run that thing than me, right? And so that’s, that’s what allowed it. And I think, um, um, we, we all shared the same type of core values and culturally for kind of how we carry ourselves as humans and what we do purpose wise for the spa in the space.
[00:23:19] But, um, I think a v D was just kind of one of those things that like. Over time just took more of the attention. It just kind, it was, it was not planned. It was not like, and sometimes I try to tell other entrepreneurs that, right? They’re like, Hey, sometimes the things that aren’t planned are the things that have the greatest success.
[00:23:38] And it’s crazy, right? Because you just, it just comes from un unexpected places, you know? And, but, so that, that, to answer the question K, the resources, it was, it was tough to help them backend. But like, I, I was, we had some other ones that, that, with working with the teams in China, um, and then obviously, excuse me.
[00:23:55] And then, um, some of the team was helping on the backend and I brought someone in pretty, pretty [00:24:00] fast. Uh, and we just got super lucky with that hire. Uh, he’s a chief operating officer, Michael, and, and he’s speaking on other things. But, uh, that, that was, that was important. Getting lucky, right? In a lot of ways we got lucky for it to work.
[00:24:12] So, but we were prepared to take advantage of the opportunity in the sense that, like, we had structures in place at the other org. It didn’t really, it didn’t, it, it, you know, the market something is like, if, if, if. If I, if some of us were leave, then it would go like this, that’d be a problem. Right. But even if it dips like this and it goes up, that means you have good structure in place.
[00:24:31] Right. And, and, and you saw that it continued to grow Yeah. On its own, on, on their own. You know,
[00:24:37] Bryan Fields: I mean, it’s fascinating, right? You’re sitting there, you’ve got this hobby that’s accelerating pretty aggressively to a point where you’re really starting to thinking like, hey, like gotta put a little gasoline on this fire and see what it can do.
[00:24:46] So what are, what are those first steps? Are you looking to scale, uh, from a production standpoint? Are you looking to scale your, your sales team? Like, where are you in this? You understand that your Washington team is moving well, and now you’re like, all right, like, I’m gonna, I’m gonna let this rock.
[00:24:59] What’s the
[00:24:59] Alex Kwon: first step? [00:25:00] What was the first step for a b d?
[00:25:02] Bryan Fields: Yeah. Like when you’re, when you recognized that this wasn’t a hobby anymore, this needed to put a little gasoline on it to see if, like, you can really
[00:25:08] Alex Kwon: take this to where you, it’s getting the right people. It’s getting the right people, it’s finding the right people that already he had, and then, uh, think about what the pieces that you need to do next.
[00:25:17] You know, I, I think a lot of things that companies fail to do well at times is their org charts or, or the roles within their org charts are six month, six months outdated. Uh, I, I, we, we try to keep ones ahead of time, right? Six, 12 months in the future so that you know what you’re filling into. Otherwise, I’m wearing that hat, or Kellen’s wearing that hat, or Brian, you’re wearing that hat, or, or Johnny over here is wearing that hat.
[00:25:39] Or Michael’s wearing that hat, or someone is, right? And so you’re really trying to get to a point where you need to alleviate that bandwidth, right? Cuz there’s just, there’s only so much that you can execute. And then once you’re understanding that, then, then you have a structure to kind of build upon, right?
[00:25:55] But obviously sales is first. I mean, it’s the tip of the spear, right? Um, [00:26:00] supply and, and making sure that those things are, the QCs are strongly in place. Look, It was a helpful buffer that we knew our own volume. It was a helpful buffer to know other friends in their volume. Right? It was a helpful buffer to understand that.
[00:26:14] And then like being like, okay, well what do we need to do to establish, you know, stronger partnerships when it comes to, you know, uh, making sure that manufacturing lines are running right or, or what that means for supply chains. And so there, there was a lot of the earlier stages are very, very nitty gritty versus today, you know, uh, where it’s a lot more strategic, but yet has some of the same kind of, um, kind of just brute force that you need to have.
[00:26:41] But, but I think, um, I think, I think, you know, it just, the, the first steps that you always need to think about is, who am I gonna do this with? You can’t, otherwise you’re, you’re just signing yourself up for another job and then another [00:27:00] job and then another job. Right. And so you can’t do multiple jobs, and so you gotta really start identifying what the next piece is, because there’s people that love to do certain things that you hate to do.
[00:27:12] It’s in their d n they just love it. They get, you know, you ask, you ask a certain sales someone to go balance a, a spreadsheet, they’ll be like, shoot me now. This is the horrible thing, right? You ask a finance person, Hey, go on a cold call, sales call, I’m gonna slap you in a room. They’ll be like, that’s, they’ll, they’ll literally get visibly, you know, distraught.
[00:27:29] But yet some people just, they, they thrive in that, right? So you just, it’s finding the right people. It’s all about the right people, and it’s all about the right culture that you’re gonna create to, to help achieve the targets. Talk
[00:27:40] Bryan Fields: about building that supply chain too, and the importance of being diversified and, and understanding how critical that was in order to help your team kind of build up the sustainable success as you’re always thinking about for the long term.
[00:27:52] Alex Kwon: Well, I, I, I think that also has, has to do with like, be able to communicate with our clients well. Right. I think that’s, that’s key. And, and [00:28:00] again, we could speak plant knowledge, right? I I sure we could speak demand planning as well. Well, that’s some of the stuff that a lot of these companies don’t know, right?
[00:28:08] Is that like, Hey, yeah, we’re gonna double triple, they’re gonna show you a growth map of this. And it’s like you go see their sites. Like there’s, they don’t even have the extraction capacity to do that, or they don’t have, they don’t have the biomass to come down with it. It’s like, all right, well then you’re gonna go compete and buy biomass against some of these other toll processes that triple your size.
[00:28:25] You know what I mean? What gives you the buying part? So I’m not asking that, but this is what’s going through my mind, right? And or our team’s mind. It’s just understand kind of, okay, well what, what’s the actual fulfillment capacity you actually have to be able to do that, right? And so, um, I think supply chains not only on.
[00:28:41] That side, but this side also matters as well. Um, I think it’s developed over time, man. You know, um, the importance of diversifying is obviously clear. I think one way or another in any prudent business you should. Uh, but I, I’m gonna make a real clear distinction. This is not me like saying something negative about China, cuz like, in one, in the same, like [00:29:00] I I look at CCE Smore as their own company and their own entity, even our other competitors, right?
[00:29:05] I don’t have, again, nothing negative to say. People are operating their picture. They have employees, they have livelihood, they’re trying to make business. How they go about that on their own integrity is on them, right? What we do is different and we view that way and that’s how we’re gonna always operate.
[00:29:19] And I j that’s just, just a part of our d n A and um, and when it comes to like growing supply chains with China, like, like China’s important, like I think just geopolitical risks and there’s a lot of that stuff, you know, but. Business-wise, a lot of businesses have a lot of good relationships with China.
[00:29:35] Right. And I think, um, you met the people that are, you know, a, a part of our organization and what exists. It’s, I mean, it’s remarkable man. It’s tremendous, the amount of dedication, work, um, and love that that goes into everything that we do. And so it’s hard for me to be like, kind of just talk about it one way, cuz I know the work that goes in right on the other side.
[00:29:56] And so, um, the importance of that is, [00:30:00] Is understanding business-wise, right? Diversification’s important. Redundancy is important anyways, so you shouldn’t just rest your laurels on that. But also the importance of the knowledge base that is world-class manufacturing experience over there, and supply chains and how those suppliers work, what their QC standards are, how their QA work works.
[00:30:19] Like what’s the scrap rate, how’s that coming into, what that means specifically for us, right? And, and, and, and, and the components that are of that go into our assembly. So a lot of these kind of parts also have nuances within their supply chain. So let’s say that you’re an extractor and you’re, Hey, I’m gonna go get some, I’m gonna go get some offtake from somebody.
[00:30:36] Well, it’s like, okay, am I getting B buds? Am I getting trim? Am I getting A’s like, what am I getting whole plant? Has it been frozen? How has it been prepped? How has it, has it been dried? What’s the, like, there’s so much that goes into their raw material prep work, right? So it’s. Kind of, I’m trying to make it synonymous in, in, in, in both sides of it.
[00:30:53] Right. Um, and I think for us, you know, it just became apparent that it was necessary for us to really start [00:31:00] thinking about somewhere in Southeast Asia, separately from China, um, um, to, to, as we know that we’re also seeing this as, as a part of the mandates from other packaging companies or, or, or e-cigarette companies.
[00:31:10] Just like there is a larger push around diversifying the manufacturing risks. Obviously that incorporated with the overture of kind of the politics with China. Um, uh, but I don’t want to go political in that regard. I think it’s just a prudent business thing to do in general. Um, and I think with the level of technology that we’ve kind of grown into in our processes from different ways to automate different aspects of it, different parts of somebody also understanding different parts of supply chains where globally, uh, that’s a part of our initiative.
[00:31:40] Right? Our initiative is about not only, uh, taking the, it, it’s really looking at the global supply chain and obviously a lot of the, the. The know-how and, and, and ip, I would say right on that side of stuff is in China, right? And they, they obviously know how to make things very efficiently, quickly, at the cost and to spec if you have the right type [00:32:00] of team and people in place.
[00:32:01] So it’s understanding that and being able to augment that as we think about ways that have a diversified supply chain, not only in Southeast Asia, but dare I say, onshore, right? Somewhere here close to us. And I know some people that know me well, that’s a part of where, where my head goes in a lot of ways.
[00:32:18] But there’s a lot of, there’s a lot of hurdles to do that properly. But it’s, again, it’s all about safety and reliability. Not only for the client, but for the customers to know like, hey, these guys have thought about this. Cuz it’s not, it’s not just us, right? It’s in, in a lot of ways. It has to do with we’re, we’re fiduciary, we’re in a lot of ways, we’re service all the clients, right?
[00:32:38] So any brand that’s going out there and making sure if they don’t have cart, if they have oil, what are they gonna do? So it’s our job to make sure that we’re, it’s not only just like, yeah, there’s a lot of importance that we have on the China relations side on us, especially for how we work together. But, but at the other side of it, it’s like, make no mistake about it.
[00:32:55] It’s like, yeah, are we, we’re, we’re being Chinese, but I wanna make them America too. Right? There’s, there’s a lot of these [00:33:00] aspects that we have to do to make sure that this type of supply chain, uh, has a stable future. And I think that’s a, a lot of, from a supply or from a diversification of supply chain and reliability perspective, that’s always been on m i d risking the geopolitical aspects that could happen or could not happen that are out of our control that have to do with China.
[00:33:20] Right? Uh, I think
[00:33:22] Bryan Fields: that’s so important. I think so many in the cannabis industry are always kind of figuring out what, you know, what do I need to do today? And what I really enjoyed about kind of researching you and your team is that you’re always thinking four or five steps ahead. Just like we started in Washington with the idea of a v d.
[00:33:34] Now you’re thinking from a global standpoint, you know, Your brand and reputation is critical to help the industry, and they’re relying on you to provide this hardware because if they have oil and they don’t have carts, they can’t do anything. And that’s a, that’s a critical part of the supply chain from a trust standpoint that your team’s
[00:33:48] Alex Kwon: providing.
[00:33:48] Yeah, absolutely. And I, and I think that both of you know that we’ve just seen how much more Vapor has gone and look, it just, we’re just scratching the surface too. There’s so many other partnerships that we have going on around like new heating cores that [00:34:00] have to do with some count, some crazy tech, some nano stuff.
[00:34:03] Always. You wanna release s right now? I’m just not, I’m just like, it’s like way over my head, Ryan, someone’s some, I’m like, oh my God. They’re thinking like, like that. Like that’s tech. They put in drums and so there’s a lot of cool stuff. But as everyone knows, there’s a difference between r and d and invention.
[00:34:18] Versus like refinement and, and and, and adding value to, to, to clients, right? So you careful about what type of company you are. Uh, at the end of the day, we’re, we’re one that makes, you know, makes sure that we walk our talk and we, we like to make sure that we’re consistently reliable for our customers and they know that we’re rooted in understanding flavor.
[00:34:36] In the cannabis plant, really all of our decision making really all comes from like plant first client, client and plant first. Right? It’s like, how is this working? Right? Because trust me, no matter, yeah, we wish that everyone was just smoking live resident rossin, but that’s just not the truth, right? It’s just, and we’ve had to like learn ourselves, right?
[00:34:54] It’s like, okay, we gotta put this, we gotta put an engine out there that puts out vape higher vapor, right? And [00:35:00] so that’s, we’ve done that, right? And, and again, this is a part of ad adapting and, and, and listening to your customers and being able to, to, to, to give them what they’re, they’re asking for, right?
[00:35:09] And then being able to kind of create, uh, Future value for them. I think that’s a crucial part of it. Yeah. How much are you balancing, like innovation in terms of like coming out
[00:35:17] Bryan Fields: with new heating devices while kind of still
[00:35:20] Alex Kwon: maintaining the kind of core carts that, you know,
[00:35:24] Bryan Fields: are like the bread and butter of the business?
[00:35:25] Alex Kwon: You know what I mean? Yeah. So it’s a good question. Ke um, so, so it’s almost, it’s almost by, well, let me, let me like try to answer that in a different way. Um, so there’s, there’s like, I think what the ITTC has done, like I will, I’m sure we’ll talk about that if people know about that and stuff, but it’s like, what, what it’s done is it’s shined a light on, on our IP heavily, right?
[00:35:53] Because of the defense that needed to happen and everything that occurred with smore. Um, And just kind of that [00:36:00] action and what happened throughout taking a comprehensive view globally around what it is, what, not only our space, but what we are doing and what we’re trying to do. Um, we got very fortunate in a team that was built around it, which I believe is the strongest team in the world when it comes to IP strategy.
[00:36:14] Right? And so, like I, if you look at their track record, you look at their pedigree and I’m like, yeah, that’s, that’s pretty impressive, right? And so, um, I think when we think about our moats and the things that we build, I think inadvertently out of, out of all these things, they’ve created a, a, a leader in, in understanding how to create, protect, uh, and enforce some commercialized IP in a good way, right?
[00:36:37] To make sure that people are making sound decisions on a new form factor that they might go out with or a new or, or a new device that might have an ecosystem around it, right? Or, or other aspects that might view a different part of a category that they might be selling into that they otherwise would not have been before.
[00:36:54] So for us, I think there’s two lanes. To that Kelly, where, where, where I think on the, [00:37:00] on the innovation side from, from, from r and d and invention heating cores and doing that, that’s just a long validation period, right? I think what we, because we’re all about reliability and consistency and obviously delivering for customers, I, I think our validation period is probably super extensive, right?
[00:37:17] And, and we want to understand that it’s, you’re not gonna have issues with it. And so, um, I think on, on, on creation side, Yeah, you might have five, 10 different ideas, but maybe only one of ’em are good. But spending your time creating that is very different than saying, Hey, here’s, here’s some other existing tech that people are bringing to us.
[00:37:36] Cuz they wanna commercialize it or they don’t have the supply chain to do it or they don’t have the access to the customer base to do it well, we can work with that, see how to modernize it with a v d tech. Right. How are some of the things that we can do with it? And maybe that’s a route that we can take something quicker to market and supply to a customer that they MI might want exclusively or something next.
[00:37:54] Right. So there’s, there’s a part that we do in-house, then there’s a part that we do with partners and then there’s a part with [00:38:00] inbound, right? From an r and d perspective. And I think that’s important because that’s some of our calling cards, right? Our calling card is about we could scale manufacturing reliably, diversify it.
[00:38:11] And it be consistent at scale, right? Which is all about reliability for cartridge. Especially when you’re spending that much, you know what’s going on for a client. The other side of one of our greatest strength is understand the customer. we know what’s going, we know this space. We know what you might be going through whatnot, what type of stage struggle you’re going through.
[00:38:29] If you’re having some oxidation issues, if you’re going and I, that we can go down a, rabbit hole of different conversations that are going on, how they’re feeling, not feeling in all those aspects, right? So there’s that aspect. and then realistically, what happened with the IP side of stuff is really, it’s opened up this whole other strength of ours, right?
[00:38:47] That is, it was something that kind of, you were just running fast. You didn’t have to think about that. But now it’s it’s a part of every strategic item. It’s a part of hey, and not so much as a. Tip of the [00:39:00] spear, let’s say how others have tried to use it, right? I’m not gonna name who, but others have tried to use it, right?
[00:39:05] I think it’s more so you’re trying to build moats and fences, right? To protect your business if you’re gonna work with other people, right? So if we’re making a project, you can own this, let’s commercialize it properly, right? So there’s, there’s ways that we could start again, adding value, right? Is that gonna give ’em a product that has enough.
[00:39:19] Runway for a year or two and then they’re into another product, what, whatever that may, may look like. Right. Uh, and obviously all of that then, then helps inform some of the, some of the regulatory stuff that we want to kind of move more into. But, um, which has been super important. So a again, I think from an r and d perspective, innovation side, I think there’s multiple tracks, but really there’s the invention side that like takes ground up build and, and doing that.
[00:39:45] And then there’s the other, like some premium customizations and alterations that we can make. But again, have a, have kind of a menu of items that you’re doing. So it’s like kind of standard to premium then to like a hyper bottom up type of full build. Does that make sense? And [00:40:00] they have, they all have different timelines obviously, you know, a hundred percent.
[00:40:03] So just
[00:40:04] Bryan Fields: slightly switching gears to the issue with C C L, can you kind of set up for our listeners, you know, when the origin of that happened and then we can kind of go into some of the specifics and then the result that just was announced.
[00:40:15] Alex Kwon: Uh, I think I always forget this, I think it’s October, October of 21, they brought the suit on.
[00:40:24] Um, it T C’s International Trade Commission, uh, basically has to do with importing of products to the domestic industry of the United States. Um, essentially, man, I know I’m gonna butcher this. Uh, essentially, essentially, uh, smore, you know, broad in more cce, so CCEs parents, more broad inaction, um, against like 30 some odd different vapor companies, uh, that they’re, there’s three major patents that they’re saying they’re alleging are infringing on, and the ITTC is really to go after it’s.
[00:40:58] They’re call it the rocket docket. There’s no [00:41:00] extensions. There’s a certain period of time you go through discovery, you know, expert witnesses, depositions, then it goes to trial, then they have an initial determination, then a final one, and then a presidential period, and then it’s put out. So that’s kind of the, the, the speed of which they go through.
[00:41:15] And what they’re trying to do is establish domestic and technical industry, and then that there was actual infringement going on on their asserted patents. Um, and, and then they would issue technically an exclusion order. Right. Or general exclusion order. So technically, if they had succeeded, what, what would’ve happened to the cannabis industry?
[00:41:34] Would’ve been No more cartridges. Just more. And then you thought their pricing was bad before they were just gonna price that, right? You mean monopoly, right? Yes, exactly. You know, so, so, It’s important. Uh, I, there was obviously not just us, there were some others among the group that, that did defend. Um, I just, I think they all know.
[00:41:54] They all know, and we all know, like who, who carried a significant shoulder burden of [00:42:00] that and who the main target of that was. And so, um, we’ve heard it and not so many words from people that have settled with them, also others that have told us. So look, I’m, I’m not trying to toot any horn to doing that.
[00:42:10] I’m just, I’m, I’m just saying there was a tremendous amount of work with that legal team to go out and do that. And, and it was remarkable. And it was, uh, it was really good to see the industry kind of, and a lot of people don’t know, but that wa we, we felt like it was a responsibility. I if I told you guys a dollar amount numbers, which I won’t, you’d be like, how the hell did you do that?
[00:42:27] Right. So it’s, uh, it’s, it’s one of those things that I think was, uh, was make or break. It wasn’t, it wasn’t even a choice in our mind, if that makes sense. Right. It wasn’t like, oh, we’re gonna do, it was like, no, we have to go do this. Right. And so, um, And I think I, I think maybe they underestimated, um, maybe our, our resolve in our, or maybe they underestimated Alex Quan probably, I dunno.
[00:42:53] I dunno about that. You know, it’s just like, but uh, I don’t know a lot of people that know me. Right. And so [00:43:00] it’s, uh, did
[00:43:02] Bryan Fields: it start out in it TC Court? And when you first got that notice, were you like, fuck off? Like what’s the, what’s the thought process? Because obviously when you get that notice, you recognize that it’s not gonna be, uh, a seamless road ahead.
[00:43:15] Alex Kwon: Right. There’s, there’s a world time c e o. Yeah. I mean, yeah. I mean, we were, we had some other shit going on at that time with some previous, you know, partners and, and things that we had. So we were already in wartime. This is, I think this was all, I think all this happened at once. Like the, yeah, the, it, I think when the I TC came, it was, it was, it was more so like, what is this?
[00:43:36] You know, because it was like a, It was like a, I, I, I forgot what it was. It was huge. I was like, what is this thing? Right? I don’t even understand what this thing is. And we had been in other lawsuits before and some of these other things, right? And so it’s just like, I was just like, okay, keep cool. Don’t get all worked up.
[00:43:53] You know? I mean, I’m like, ask some questions. What does this mean? Does this have anything to do with tomorrow [00:44:00] or next week or not? Right? And so, um, I I sometimes, again, I gotta, I gotta protect me from myself, right? Because, you know, I, there, there’s, there’s sometimes it, it could get a little intense, right?
[00:44:11] So, um, yeah, man, I, I think, I think when it happened it was, it was gather information, understand what we need to do. It was, and I think that’s kind of one of the things that we do, well, at least I, I don’t know where it comes from or whatnot, and maybe Calvin has seen that before, is, uh, like when things get really, really hard, When it, when it gets really stressful, that’s when I feel like I am the most calm.
[00:44:34] That is when I’m, I can actually think and I can go through what sequences of what need to happen and where, where, where our risks may lie. Right. And I think at that time, with all the other things going on, there was just so much, we were just kind of ready in this mode to like, all right, well, well what else is gonna happen tomorrow?
[00:44:49] Right. Well, what else is gonna happen? And so I think we were prepared for that. And it’s, kudos to the team. It’s kudos to our management team to be able to keep their head down. Cuz dude, like big lawsuits can [00:45:00] really be debilitating. Like it could take focus away from people, do I have a job? Do I have this?
[00:45:04] It’s like, there’s a lot of stuff right. And then there’s a lot of noise now. Right. Especially like they’re distributors. They were loving it by trying to send out emails to our, to our clients and this, that and the other. And so, and it’s expensive. Yeah, exactly right. So there’s a lot of these unknowns.
[00:45:20] And so I just have an incredible amount of respect and gratefulness and appreciation for just our team and their resolve, and like the trust that exists. They just siloed down, Hey, I’m gonna trust it. They’re handling, I’m gonna trust they’re handling what they’re doing. And everyone kind of knew what to go do and tackled it.
[00:45:35] And that’s, I mean, we, we, we picked our head up after a period of time, and we had grown during that stage. We grown the most that had ever grown during that stage, right? While having like a lot of these headwinds against us. And so, um, again, another testament to the question we asked earlier, Hey, how’d you start?
[00:45:53] It’s like, people, man, it’s all driven by people, right? All these things, relationships you don’t do business with, you [00:46:00] know, you don’t do business with Coca-Cola or Nike. You know, you do business with somebody that’s a person, a human being, right? And so, um, to me that, that means a lot. And I think that’s, that’s what, uh, helped us through that stage.
[00:46:11] And, uh, back to. Explaining what the ITTC is. Basically what came out of all of that was, um, The initial determination came out that, um, there, one of their patents was, uh, unenforceable, uh, uh, due to, uh, inequitable conduct, which is a whole different frame that exists within it. Uh, then the other two were, uh, not infringing.
[00:46:33] And so that’s important. You can kind of read the id, I don’t wanna keep talking about that cuz then I don’t wanna throw shade where it doesn’t need to be thrown. Um, it’s a whole different animal, I’ll tell you that offline. Um, but like final determination just came out, which is huge because it’s really set it in stone.
[00:46:49] That’s why we’re talking about it. Like, if it was during like initial determination to having the final and all, everyone’s like talking and this, that, and the other, would that, that may in a small way have [00:47:00] maybe created some issues, but it hadn’t. Um, and, and final came out and, and I think, um, we’re just waiting kind of the, the last periods of, of, of the process and then we’ll see where they go from here.
[00:47:10] Right. Um, we’ll see again, we’ll see where, where, where they try to take it and or what they’re trying to do. Um, I understand that competition is, is important, but, uh, we don’t like unfair competition. So at the end of the day, I think I’ll take our team and what we do and our knowledge and, and the, and the access points that we have against anybody, right?
[00:47:29] And so, um, I, we look forward to the challenge of doing that and, and, and continue to serve clients and, uh, and add them. Again, it’s all bad if we, if we don’t, if we, if we don’t continue to add value to our clients who are our number one purpose in what we do, um, then we, then we should cease to exist as a company for what we’re doing, you know,
[00:47:48] Bryan Fields: re really, really powerful.
[00:47:50] But I mean, the emotional burden that you must have been carrying during that time, understanding the implications of that lawsuit and just kind of the response that the industry needed in case you didn’t win. [00:48:00] So, I guess my feeling was, was there any doubts during the process where you’re like, what are we doing?
[00:48:04] This is expensive. This is taking up all of my time. Like, is there ever any doubts in the back of your mind thinking like, Hey, Alex, like maybe we should just figure out like a solution, or you were like, no, like we’re winning
[00:48:15] Alex Kwon: this. You know, another say, I don’t, I dunno if this saying is appropriate or not, but sometimes wrong, but rarely in doubt.
[00:48:24] Right? And so, uh, Kelly was shaking his, that that’s very, very accurate. So, uh, my often, my wife would probably say often wrong. Uh, but, uh, but so, so I, I, you know, no man, I, I think if the stress gets to you at times, I’m human, right? I think everyone is. And so, um, and, and it was just a, again, there was a team.
[00:48:50] It was just, we, we had it set up so well that, that there was someone else that was emotionally dumping with, right? Working with, and then they were emotionally dumping. And so it’s like, it, it, but it [00:49:00] would get stopped there. And the rest of the, we sheltered it really well from the day, but we updated them.
[00:49:04] They knew what was going on, right. And they knew that it wasn’t right now, and everything that was gonna happen is we need to execute. Everyone knew like, we need to put your head down, you need to execute. We are rooted in execution. Our business does not exist without having pride around grit and being, execute, executed.
[00:49:18] Everything that we do now, we value, you know, partnerships over transactions. We value hugs over hand. We value, these are some of the core values that we have. And so like, these are the things that are super important for us, right? Because it, it, it, it helped maintain focus. I think that was, that was the crucial aspect of it.
[00:49:36] But was it hard? Um, and going through that, did I have any doubts? No, I didn’t really have any doubts because if you knew that the, if he was on this call, we had the, the, the head litigator on you, you ever meet him, by the way, ke we should go golfing with him because you’re an ex when of your arm heals.
[00:49:54] Um, but loves golfing and so I, I’m just saying in general, like[00:50:00]
[00:50:01] he was very resolute on, on, on what, what the law should do. Right. And what it should look like. We just have to trust the law system, which is hard for us. Yeah. From what we all really come from, it’s really, really hard. Let me make that really clear. Cause, you know, it is more than one time in different past lives is that, you know, excuse my French, but you know, f to silver.
[00:50:22] So, so, you know, I would normally be f bombing all over your podcast, by the way. So, but just pick, make me explicit if you want mindful of that. Um, yeah, man. Like there wasn’t doubt because it, it, there was no option really. And we all, we already kind of knew, to your point, second and third order derivatives of what needed to happen.
[00:50:42] Right. We kind of knew the second order consequence if this happens or if this happens, right. So we kind of knew where and how we would move and how, what we would do strategically. Um, but obviously we’re thrilled with the, with the outcome and how it came and where it is and, uh, and what the next stages are because I think I.[00:51:00]
[00:51:00] I think it’s important for the industry to know. I think it’s important for everybody to know and, and, and ultimately, again, it’s a part of our initiative to, to go and form regulatory some of these other aspects, thought leadership and, and, and because of our knowledge within it. Cuz I think that’s what makes us different, man.
[00:51:16] It’s, we’re, we’re a cannabis company that’s verticalized into the supply chain of, of, of a place like China, right? And, uh, whereas it’s the other way for other companies, they’re all trying to come here. They all just, they all got, they’re all trying to figure out ways to become cannabis people, right? Yeah.
[00:51:34] And, and so crucial too,
[00:51:35] Bryan Fields: right? Like what the, what the industry doesn’t recognize is that is a win for the industry as a whole at you as a cannabis company taking on a big giant who likely could be trying to bully you into submission or to just say, Hey, listen Alex, you don’t really want this. And instead you said,
[00:51:49] Alex Kwon: come get some.
[00:51:51] Yeah. I mean they just, I don’t know if we said it that way, like not, uh, you know, KA does, I like a good fight, but it’s just in [00:52:00] general, um, you know, you look, again, nothing against them in any negative way. Again, I’m grateful for them, right. If they’re listening. Thank you. All the competitors thank you as well.
[00:52:13] Right. Because that’s the fuel that lights us continually to keep us humble, to know that we gotta up our game and make sure that we’re always adding more value to customers and what we’re doing. And that we focus on making sure that we bring the, we, we come ready and we’re, when, when we’re on the field, we’re, we’re always gonna be ready to do battle in that regard, you know?
[00:52:31] And, and I don’t blame ’em for it because, man, that’s, I don’t, I, I might argue with the tools that they could have used, but they, they have a lot of tools, right? And so that was one of the tools that they chose to use. They just were wrong, you know? So we’ll see what, but d made no mistake about it. They got other tools and they’re using them right now and I’m sure they’re gonna continue to use more.
[00:52:51] So, uh, you know, I, it, it’s, it’s, it’s, again, it’s, it’s a part of the game. Just know what game you’re playing. Rooted in execution
[00:52:59] Bryan Fields: is [00:53:00] a, a saying. I’ve heard you say. What does the cannabis century miss or not
[00:53:03] Alex Kwon: understand about a v d?
[00:53:08] Can you repeat the question? Rooted in
[00:53:10] Bryan Fields: execution is a saying. I’ve heard you commonly use. What does the cannabis industry miss or not understand about
[00:53:17] Alex Kwon: a V D? Hmm. What is the cannabis industry? I, I don’t know. Cause I don’t go on and speak on a lot of these things, you know, and so it’s like, I, I don’t know what they know or they don’t know about us, but if they, if they didn’t, you know, I, I think.
[00:53:33] What I would want ’em to know is that we’re, we’re purpose driven around not only this plant, but also the value that we add to our customers. Right? And I, and I think that that’s super important. And what I mean by rooted in execution is like you can have all the greatest ideas in the world. You can, even hit the right timing in some of these things, but to do something great and to be great at it and be proud of it, you have to consistently execute over time.
[00:53:59] Right? A saying, [00:54:00] I think one of my mentors says, like, um, you know, doing ordinary things consistently over time creates extraordinary results, right? So it is, it is all about making sure that you’re blocking and tackling and executing on a daily basis, right? And so making sure that team knows that, make sure that it’s all aligned to where it’s going, because then you can, it gives you the foundation.
[00:54:23] To maybe go explore this other shiny object or explore this other aspect that could help grow the company or become creative, right? Or look at another way to solve a problem for a client in a different way that you maybe not have thought about before. But if you can’t keep executing, then I’m breaking my promise to you, right?
[00:54:40] So at the end of the day, what I want the world to know if they don’t know about a, b, d, is that like we care about the plant, we care about people, and we do what we’re gonna say. And when we say what we’re gonna do somewhere, we’re gonna walk our talk and we’re gonna execute. That’s, it’s, it’s as simple as that, right?
[00:54:56] If we’re, we’re not gonna agree to doing something with you if we can’t do it, how [00:55:00] does it feel to reflect,
[00:55:01] Bryan Fields: knowing you’ve had tremendous amount of influence on a lot of the industry’s disruptors, including Kellen, just littered all a, all across
[00:55:08] Alex Kwon: the space? Well, I don’t know if it’s littered across the space, but, um, look, man, I, I, uh, I’m more of a private person when, uh, some of this stuff.
[00:55:19] I know, I know, I know, I know. If Finny knows that, um, Look, man, I, I, I am, I’m just grateful for the opportunity. I, I think really to, to, to kind of beef both the student and the teacher, right? I learned just as much as I try to coach or, or give advice on, and, and I learned just as much from that, from Kelly.
[00:55:37] I mean, and, and others around us. And there are other people out there that, that we have positively impacted and they’ve grown in their career in the space or their appreciation for the plant, or appreciation for just life in general and how they’re growing as a personal human being and, and, and the, and, and kind of what purpose they have around their business and what they’re doing.
[00:55:57] Um, look, man, that’s, that’s, [00:56:00] that’s what life’s about, right? That’s where the journey is. Don’t, don’t, don’t forget kind of the, the process that you’re kind of going through. And I think sometimes that’s hard for me. Um, but I’m just really grateful, really, to be honest. Um, having the opportunity really to, for even people to say that it’s kind of weird.
[00:56:18] Um, uh, I, I don’t know. Any others in that regard, but I just, I guess I, I really just try to be authentic about, about, um, really being grateful for the opportunity with the plant. And again, I think the best way to surmise it is we’re just doing our part in liberating the plant. Man. You know, I, I, I, I firmly believe the plant chooses its stewards.
[00:56:39] Uh, I, I think that over the next two, three decades, it’s gonna impact every walk of life from this world on this planet in one way or another, whether it’s through a derivative textiles, chemicals, uh, thc, any other raw cannabinoid terpenoid. Just go down the list of all the different phytochemicals or, and or, you know, um, ling, you know, langdon’s fibers where [00:57:00] wherever you want to go, buyer remediators, we could, we could talk about this for days, right?
[00:57:04] CO2 sequestering, like we, you know, uh, so I, I just think that it’s a really interesting moment in time that we get to all live in and then our kids will live in, right? With the advent of AI and all these other things. But like cannabis being right in the middle of it. And also with psychedelics coming down the line, right?
[00:57:21] So these are all, these are all cool times to live in, I think. And, um, I’m just really appreciative realistically, o of the opportunity to have a, have a chance to influence others. Right. But that is, that is in a lot of ways the purpose, right? That, that’s kind of where I, I don’t feel like this is work, this is just my life.
[00:57:40] And it’s just been in cannabis for 15, 20 years. You know,
[00:57:45] Bryan Fields: before we do predictions, we ask all of our guests, if you could sum up your experience in a main takeaway or lesson, learn to pass onto the next generation, what would
[00:57:53] video1186742022: it
[00:57:53] Alex Kwon: be?[00:58:00]
[00:58:04] Fail fast and fail forward. Don’t be afraid to, don’t be afraid to take, think big and take risks, you know, especially if you’re young. Don’t be afraid to make mistakes and fail fast and fail forward. Learn from them all right. You either win or you learn. There should be no losing prediction times. Alex, the
[00:58:28] Bryan Fields: IP battle has just realistically begun.
[00:58:31] Where else do you see this battle taking place and what can companies do in order to get ahead of it?
[00:58:37] Alex Kwon: Cool. Where do I think the IP battle will be taking place? Yeah, the, the IP battles just begun
[00:58:47] Bryan Fields: where, for sure. Where do you see it moving and what can companies do today to start positioning themselves in front
[00:58:53] Alex Kwon: of God?
[00:58:54] That’s such a multi-layered question. That’s, that’s not the easy one to answer. Um, it’s [00:59:00] not, I, I think everyone has a different idea of what IP really means, whether you’re a capital allocator or fund manager or a. A guy sit in the corner trying to invent something or you’re a cannabis grower or, or, or you’re an extractor.
[00:59:16] Right, or, or you’re an astrophysicist. Right.
[00:59:19] video1186742022: I
[00:59:19] Alex Kwon: think, I think all these different people have a different, uh, ideology around what IP is. I think, I think, I think the battle will be fought globally and, and obviously in the US US is the strongest patent system, right? Trademark and patent system. I think people should educate themselves a bit on what IP really means to them in their specific category.
[00:59:47] Cuz it’s not what everybody thinks it is. It’s not like, oh, I have this patent and I’m gonna make a bunch of money. It’s not this patent and it does this. It’s like there’s so many different strategies that kind of go into what. The validity of a [01:00:00] patent is the enforceability of a patent is how many you have and what sector you’re trying to do and what category, right?
[01:00:07] It’s, it’s just, there’s a lot more nuance within it, and I think that people should educate themselves about it. I think the, the battle, it’s not just the battle that we’re talking about. I mean, the battle on IP has already begun a while ago on GW Pharma trying to go after cannabinoids. Like Kelly, you know, this, like, there’s a litany of science stuff that they’re trying to go after, trying to control the chemicals.
[01:00:28] So the, the, again, that’s a whole different category. I, I can’t even, like my brain is kind of hurting, thinking about that. Um, so again, I, I think it would be, I think it’ll be fought here in the US just because it’s the strongest system. Um, but you should be aware of the global patent system and how that works with PCTs, uh, PCTs and kind of different trade treaties that exist in the us and then educate yourself about what it actually means in the category that you’re going after.
[01:00:53] I think it’s important for you to just at least have a broad stroke or. Call someone and talk to them about it. [01:01:00] Really Well said, Kelly. I mean, I think that the next big like kind of uh, headline grabbing patent battle will most likely be fought in like the pharmaceutical world in terms of like one of these minor cannabinoids, right?
[01:01:15] Uh, delta A or H H C or something that’s not like quote unquote naturally occurring within the plant, right? That’s a, a derivative of C B D or some chemical conversion, right? It’s just, it’s an attractive target for big pharma. It fits into their normal kind of playbook of like find a molecule that does a purpose patent, either the molecule or the process to get to the molecule.
[01:01:38] Right? Um, but I agree with everything else Alex said. I mean, there is just, An endless array of different like topics that could be applied to quote unquote cannabis that someone might be able to get a patent around, right? Like, um, there’s just been an insane amount of patents since day one, right? The, I mean, like, I remember my first [01:02:00] time in the cannabis industry, I was like, let’s learn CO2 extraction, right?
[01:02:04] And I pulled up a patent from GW Pharma on 2000, from 2001 about CO2 extraction. And I was like, everyone is doing CO2 extraction. And it’s already been patented and they’re not doing anything about it. So I was like, what does this patent even mean? Right? So it is, it is really hard. Um, that, that is the other part too.
[01:02:23] Right? There has to be a scale where they decide to kind of go after it, right? Yeah. And make money. What Kellen just said is really important, right? Understanding pharma processes, why they do it the way they do it. Also, why they also lobby the way that they do, right? This is important because it has to do with their dollars.
[01:02:38] Follow the money, right? And like that process that Kellen just said, you’re funneling, they’re funneling their patent pro, their, their, their regulatory process into the funnel. So their patent process, right? What you just said, if it’s a pathway to that molecule and that molecule has been legalized a specific way, and it’s the cheapest form of giving a psychoactive ingredient in say a vapor cart, like this is what they’re doing.
[01:02:57] Right? Like ke as you know, right? Like it’s like [01:03:00] got the pathway, I’m gonna patent that pathway. Now everybody has to use that. So if anybody’s making, uh, T H C K F. Right. If they’re making anything that’s, that’s, that’s making that molecule in that way, right. They know that they can track it, they can go through that and they’ll be like, you know what, now you owe us this amount of money and this is sales and this da da da, da.
[01:03:18] Right? That’s the way that they will try to enforce that aspect of it. Um, that’s really interesting, right? Because that’s a totally different, I I could see that on the pharma side cuz you start thinking about the precursors of some of the. Some of the molecules and kind of how they’re synthesizing or adding to be able to get it to a different chain.
[01:03:34] Right. Or I don’t know how they’re binding or what they’re doing with the molecules coming. Cause I haven’t looked into that. I was gonna ask you if some of the stuff that you’ve seen in some of the psychoactive changes from like CBD D to D, we saw D eight before all these people remember a long time ago.
[01:03:48] Oh yeah. On the Pope, right? On the, on the, yeah. No. Accidentally trying to get like aqua clear right when using, yeah, trying and it’s just converted right over to Delta eight. Yeah. Trying to make water clear. This was like in [01:04:00] 2014. Yeah. Literally like 20 14, 15. We made D eight clear. Like it was like water clear.
[01:04:05] We’re like, well this is a different molecule and we sent you to get tested. And they said it was zero and I was like, no, it’s definitely something. Right. Because they didn’t have Delta eight in the chromatogram at the analytical facilities. Yeah. So they didn’t know what it was. They didn’t know what it was.
[01:04:18] And then, and then that, that, that’s what I’m saying, like a lot of that type of stuff now as it contested and it’s getting more prevalent. Right. It’s kind of interesting to see that. That’s why I remember when I seen this full da clip, I just had your, I didn’t call you, but I was like, in my mind I was like, just thinking, I’m like, oh my God, this actually became a thing.
[01:04:34] I can’t believe it. That actually D eight became a thing is crazy to me. Right. Because I was just like, no way. There’s no way. And then it was because of the little loopholes and, and hemp rules. Right. And laws. And so look, I, I, I think, um, yeah, sorry. I, I, I just wanted to touch on that subject to, to what Kellen said.
[01:04:53] He brought up a really good part about pharma’s approach, and I think that’s, look, these are games being played. [01:05:00] Some of the players on the field playing their games, that’s pharma’s in there that are trying to figure that out. That’s for sure.
[01:05:06] Bryan Fields: Yeah. I, I think that’s important to recognize. I think so much what we hear is like the cannabis industry’s operating the cannabis industry, but when you kind of pull it back, Cannabis industry is just an industry trying to disrupt other industries, which means, oh yeah, the pharma oil and gas backup, they’re gonna fight back and they’re gonna try to gobble up any market share that they can because this is a, a new world that we are going to more migrate into.
[01:05:26] And I think one of the things that you said, Alex, really important is, is being proactive and thinking about things three, four steps ahead. And I can only wish so many operators would
[01:05:34] Alex Kwon: think about those things. That’s kind of, I mean, if you think about it, the, it’s, it’s not just a disruption, it’s a displacement of these dollars being spent.
[01:05:43] If you look at tobacco, if you look at booze, pharma, nutraceuticals, these are all trillion dollar industries. They’re gonna make a transition with someone that ask. Cannabis is an asset class. Okay, I know which way you put it. Right. Could just, when it gets democratized and it gets opened up, it’s gonna have a whole different litany of, of, of areas that it’s gonna [01:06:00] disrupt because of its, its nature as a, as a literally the definition of renewable source of energy.
[01:06:06] Right. In a lot of ways that it’s gonna be able to be a renewable source of some, a lot of these pieces, cuz it’s an annual plant. It’s also a Biore radiator, so it has all these other attributes and what creates 400 plus different diverse chemicals, one of the fastest phenotype typing plants in the world, right?
[01:06:21] So like all these aspects from a chemical makeup perspective, people are just like, are not really understanding why it’s so hard to control, and that’s why it’s having some of these. Headwinds maybe on the regulatory side. Cause if it could have been controlled, I think we would’ve seen a lot of different changes in a lot of the operations in the space wouldn’t be trying to do what we’re doing.
[01:06:40] Right. So, um, I think, I think it’s a very good prudent message, right? It’s like it’s gonna continue to grow, it’s gonna continue to happen. Um, and it’s just educating yourself around some of these things. And that’s, that’s where our fears come from, right? A lot of our fears is, hey, there’s some change that someone doesn’t know anything about cannabis, uh, knows it from other [01:07:00] industries cuz we see this all the time.
[01:07:01] I mean, a great example is when people start doing testing. I remember the, the late nine calls outta account and talking about just their analytical standards. But it’s like, I’m like, well, help me understand it. And so he’d make it into really dumb layman term for me, right? And then he would say stuff and then I’m just like, oh, that doesn’t make a whole lot of sense.
[01:07:17] Right? And so like that’s a lot of stuff that kind of happens when you have people that are institutionalized, let’s say just from like their. Their, their, their, their business that they’re in, whether they’re PhDs or even their, you know, their institutional from a finance perspective, right? They just see numbers in a specific way.
[01:07:30] They don’t understand the other intrinsic aspects of value. So just, just kind of, kind of just trying to brush over that. I think, I think that’s the part where it kind of creates confusion on, on, on, on kind of the, the, the, the end part of, of, of what we’re talking about, right? Is, is, I don’t know man, I, I just, I feel like, I feel like with, with each of these companies, as it grows, people should be more prudent and aware of some of these, um, changes that can come down the [01:08:00] line and people that aren’t really understanding that space, that’s, that they could make a rule change that could really impact kind of access to cannabis in a lot of other companies, you know?
[01:08:11] Hundred percent. A hundred percent.
[01:08:13] Bryan Fields: So, Alex, for our listeners, they wanna get in touch, they wanna learn more about a v d. Where can they find ya?
[01:08:18] Alex Kwon: www.avdseventen.com. So it’s Alpha Victor delta number seven, number one, number zero.com. It’s probably the best way, right? I mean, I don’t, we’ll link it up in the show
Editors’ Note: This is the transcript version of the podcast. Please note that due to time and audio constraints, transcription may not be perfect. We encourage you to listen to the podcast, embedded below if you need any clarification. We hope you enjoy!
Consumer Packaged Goods (CPG) is a commonly used term in the cannabis industry, encompassing brands and dispensaries. When it comes to luxury purchases, the entire experience and the emotions it evokes play a crucial role in evaluating customer satisfaction. Luxury brands can command premium prices due to their positioning and the inherent value associated with their products. While the cannabis industry is gradually moving towards establishing such premium price points, it requires a deep understanding of exceeding expectations at every customer touch point.
Implementing and refining these strategic principles is a valuable endeavor. However, it presents significant challenges, including current marketing restrictions, limited capital resources, and the complex nature of establishing a consistent national brand identity in a market that operates on a localized basis.
Applying and developing these strategic principles is a valuable undertaking but comes as a steep uphill challenge.
This week we sit down with David Goubert, CEO of Ayr Wellness, to discuss the following:
How AYR is applying luxury retail principles
Implementing realignment strategy and why certain assets didn’t fit
Key touchpoints in the customer journey
Where Opportunities are in cannabis via marketing
$AYRWF
About: David Goubert
David Goubert is President and CEO of Ayr Wellness and is responsible for overseeing the Company’s operational and commercial functions, including production, supply chain, retail, wholesale and marketing.
Mr. Goubert joined Ayr from Neiman Marcus Group, one of the largest multi-brand retailers in the United States, where he helped lead the company through a transformation into one of the strongest retailers in the country. Most recently, he served as NMG’s President and Chief Customer Officer, where he was responsible for the full P&L of the Neiman Marcus brand as well as all customer touchpoints.
Prior to joining Neiman Marcus, Mr. Goubert spent 20 years at LVMH, the world’s leading luxury consumer-products company. At LVMH, David served in a variety of capacities, including Senior Vice President of LVMH’s Starboard Cruise Services subsidiary and 15 years leading manufacturing, supply chain, retail and general management at the company’s flagship Louis Vuitton brand.
[00:00:00] Bryan Fields: What’s up guys? Welcome back to the episode of The Dime. I’m Brian Fields and with me as always, as Kellen Phon. This week we’ve got a very special guest, David Gobert, president and c e o of Air Wellness. David, thanks for taking the time. How you doing
[00:00:13] David Goubert: today? I’m, I’m, I’m doing great and thanks for, for having me.
[00:00:16] So, uh, Brian Kellen, really excited to be here with you guys and, uh, doing
[00:00:20] Bryan Fields: great. Excited to talk strategy today with you, David Kellen, how are you doing?
[00:00:24] Kellan Finney: I’m doing really well. I’m really excited to talk to David and kind of learn the inner workings of, uh, air and kind of his, his background and what led him into to cannabis,
[00:00:32] Bryan Fields: you know?
[00:00:33] Yeah. I’m excited. How are, how are you, Brian? I’m excited. I think we’re gonna talk transitions and Of course, just for the record, David, we’ve got a little east coast, west coast battle, so, ah, if you could just give your location, please.
[00:00:44] David Goubert: Yeah, I’m, I’m located in, in South Florida, in, uh, near, near Miami. So I’m, I’m east coast guy.
[00:00:51] Yeah.
[00:00:52] Bryan Fields: Let the record stay, calendar, go. So, David, for our listeners, unru about, you can give a little background about yourself and then kind of how you got into the
[00:00:59] David Goubert: cannabis [00:01:00] space. Yeah, yeah, for, for sure. Um, well, you got that from, from now through the accident. And what I said, I’m French, I grew up in France.
[00:01:08] Um, I actually have an engineer background, so my, my background education was more into supply chain and manufacturing, and I did that for a few years, long time ago, about 30 years in, in France. Um, pretty quickly. Joined the luxury business with, with Louis Vuitton in 99, after a few years of working, consulting and manufacturing.
[00:01:28] Um, and, and from there, I, I spent, I. About 10 years with them. More on, with, we lived on, with the brand, more on the manufacturing and supply chain of the company. Uh, but after those years and let’s say 15 years of being focused on supply chain manufacturing, stuff like that, I got the bug for retail. So I asked, um, the leaders of Louis Vuitton at that time, if they would let me manage.
[00:01:52] Retail is somewhere in the world and turn out to be in, in the US and in, in the southeast of the us. So about 15 [00:02:00] years ago, I, I moved to the US for a second time, but moved to the US uh, to run the retail of, of Louiston. And then, then from there, the most recent 15 years have been about running retail, marketing, e-commerce, and general management.
[00:02:14] Of of companies like Louiston Starboard, Neiman Marcus, and, and before joining the cannabis industry, uh, I was for Neiman Marcus for three and a half years. So that was my, my previous, I’d say most recent experience where I was the, uh, the president and running the, the Neiman Marcus brand, which is the, the big of the bulk of the Neiman Marcus group.
[00:02:34] Um, and, and it’s about a $4 billion business in, in the luxury industry. And so that was my, Last job, I would say. So I, I got lucky to work in again, supply chain manufacturing, retail marketing, and so on. Which I think got into your second, second part of your question, which is why cannabis and how did you get into cannabis?
[00:02:54] Um, I’d say about two years ago. Something like [00:03:00] that. I started thinking, Hey, I’ve been for in luxury for about 20 years. I want to experience something different and I want to, to experience something that one, uh, plays maybe to the skillset that I’ve been able to, to develop and lucky to develop over the years.
[00:03:14] Two, in an industry that’s a growing industry, uh, where we’re, uh, we can do stuff and three where I feel like. My contribution is a contribution, so to something that’s a greater good in some ways, uh, and that was very, very important to me to do that. Um, so. I had the chance to meet John, uh, sentiment, the founder of, of Air about a year and a half ago.
[00:03:39] Um, and, and John and I started talking, and very quickly, uh, I realized how much the, the cannabis industry is actually really doing great stuff and, and helping people in their life. Uh, and at the same time, very quickly, we real, we realized that. The things I’ve done from a supply chain, manufacturing, leading retail, and so on, and [00:04:00] the other things actually can, can play in, in cannabis where it, it’s a virtually integrated business that that’s the same time a very complex business.
[00:04:09] I’m sure we’ll come back to that, uh, where you do a bit of everything at the same time. Right. But, but having that chance of having those experiences is helping and then, Um, I really bolted into the vision of the company and the, the fact that it’s about that, that greater good and greater engagement at the same time.
[00:04:27] And then the last thing that, that really made us make this decision together, John, was the fact that, um, in the life cycle of air, which let’s say four years old, right? Uh, the company has been very much about, um, growing through acquisitions and making sure that we’re building the right foundation. So, But at the same time, we’re going to a place where it’s about scaling and optimizing and making sure that we have the right focus, uh, and, and clarity on the strategy for the team.
[00:04:57] And, and that speaks very much to [00:05:00] things that I’ve had a chance to do before. So we felt the industry makes sense from that standpoint. The, the, the moment made sense. Uh, and to me, the fact that it, it is, it helping from a very good standpoint is key. Was
[00:05:14] Kellan Finney: there, uh, any other companies that you looked at prior to, to joining Air?
[00:05:19] Or was it just kind of your relationship with John and, and that whole kind of
[00:05:23] David Goubert: uh, no. Yeah. Awesome. Yeah, great question. Um, no, I, because we very early had that relationship with, with John and that, that back and forth quite a few times before even exploring anything about, okay, what’s the company’s about?
[00:05:40] What’s the vision? What do we care about? And, and tell me about the foundations and so on that I didn’t feel necessary to go looking somewhere else. So, um, and, and a few months later, here we are. Right? Um, so no, it’s, I, I didn’t look to other companies and felt that [00:06:00] that was the right fit.
[00:06:01] Bryan Fields: I’m always fascinated about that transition when you’re telling your inner circle, Hey, like, I’m thinking about leaving my job and taking a job in cannabis.
[00:06:08] People said, Hey, David, cannabis, like, what is wrong? Like, was there any of those conversations? Did they give you any of those feelings? You know, take us through those feelings.
[00:06:15] David Goubert: Yeah, yeah, yeah. No, it’s, uh, um, you never have, or you rarely have someone that doesn’t. Who’s the answer is, eh. Great. Yeah. Um, it’s either, What the hell are you doing?
[00:06:32] This is car suicide or It is, man, it’s amazing. Uh, I can see why the growth that it’s gonna have and the fact that it’s, it’s serving people this way is amazing. That’s for you. Go do it. I’m happy for you. Um, vast majority is actually that second part, but you do have a few people that are like, Hey, what, what the hell are you doing?
[00:06:57] Um, so. In my [00:07:00] case, I, I had that personal conviction that it was time to do something different and that the only place I would go work would be places where there is that combination of, of growth right moment in the, the, the life cycle of the company, uh, connecting with the people. Clearly and, and feeling that I’m, I’m useful in a way, in a, in a, in a greater way.
[00:07:23] So, but to your point, it’s, uh, it always comes up. Um, as a question, I would say that stopping talking about myself for a minute, but more as we’re building the team, um,
[00:07:37] It’s been a bit of the same thing. Like, you know, you, when you build a team like that, you always go to the people you’ve worked with at some point and be like, Hey, what do you think? Refer me to someone or Are you interested? Um, and I’ve found more than, than I thoughted, uh, not only are willingness kind of like, Hey, [00:08:00] yeah, I want, I want to jump in.
[00:08:02] So maybe that’s reflective also of the evolution in the US population about, about cannabis at the same time maybe. Uh, but, but uh, really felt that it was easier that I was expecting from that standpoint.
[00:08:14] Kellan Finney: So you make the transition. Talk us through those first few weeks. Was it just like learning by a fire hose?
[00:08:19] David Goubert: Yeah. Um, so I was lucky enough that in the transition we had decided that yeah, I would take the role of president, but not the role of c e o immediately, and that I would take the time to really visit, be with the teams and, and go to as many locations as possible. And, and I mean, to your point, learn from the fire hose like completely.
[00:08:40] So I joined November 1st. Uh, not kidding. November, December, I don’t think I spent a day in Flo in Miami. Uh, uh, I was on the road visiting stores, visiting cultivation with the teams for a full two months. Uh, and I continued to do it afterwards. To me, that’s key, but, but really that first [00:09:00] two months was that, and it was learning as much as possible and, and discovering, uh, and at the same time it was.
[00:09:09] Asking a lot of questions about why do you work in cannabis? Why do you work at air? And that was overwhelming in the sense of, I think so far I’ve met only one person, one person that hasn’t served because I need a job, which is fair, by the way. Right. Uh, but the vast, vast majority was like, I’m working in cannabis.
[00:09:31] I’m not talking about air for now, but the industry, I’m working in cannabis because, It made a difference in my life or in someone’s life around me, and it felt na, natural and necessary for me to work in this industry. Um, that’s an awesome thing for a leadership team or for a leader. That’s an awesome thing to have because you got people that are passionate about working in industry.
[00:09:55] So my first two months, Kelly, back to your question, my first two months were very much about [00:10:00] discovering and, um, The main thing was how do we make sense of this business? Uh, how do we make sense of a business where you cultivate your plants, you process them into very different form factors you sell in your own retail, but you also wholesale your products to others.
[00:10:25] By the way, you buy products from others that are also your competitors in some cases. And you’re also a C P G business that build brands and needs to build equity in your brands that you sell in your stores, but also to others. And, and by the way, to make it even more complicated, you can do that state by state because nothing can move across state lines.
[00:10:46] Um, that’s not an easy business model, that’s not an easy business model. So a lot of the work. In November, December, but even more in January was all right. How do we make sense of that so that we can [00:11:00] actually have very simple, uh, goals and, and focus as a company? Because if, if we try to do everything everywhere, we’ll fail.
[00:11:10] Um, so how do we make sense of this? And so the first two months was those visits and really having that in mind, the month of January was very much about. Making, making sense of what’s the strategy for the next three years. Uh, and, and from there, the following three months by then, actually that’s when the transition to c e o happened at the very beginning of February.
[00:11:30] And then from there it was, okay, let’s build a team based on what we’ve discussed of what the strategy should be. And the business model is let’s build a team, really organize the organization, the, the, the company, uh, to be able to answer to that and, and bring great clarity. To, to the focus for, for that growth and for that sustainable growth in the future while, hey, we’re in cannabis while at the same time, cash is king and we need to make sure that we be, we’re very, very, um, [00:12:00] focused on being cashflow positive, operating cashflow positive, uh, for this year.
[00:12:04] So that’s been the first long answer. That’s been the first six months, or, or, or seven months, let’s say. So far, uh, discovery, slow down to align on strategy and then. A team, uh, based on the, the key actions that we’ve decide and, and get going.
[00:12:22] Bryan Fields: Yeah. It’s such a fascinating, like complex puzzle that you’re kind of hopping on like a full speed train.
[00:12:27] And I know from your previous role, You came from a mature industry that had defined metrics, defined, defined players with rules. You come to cannabis and you’re kind of like understanding, okay, which metric is key for this part of the business? Which metric is key and how do they align internally? So I can only imagine the type of restrictions and challenges that kind of blame into it because Right, like, like you were saying, your Arizona business operates different than you, your Massachusetts business.
[00:12:51] And plus you’re in different stages. Each market is in different stages. So like from a time standpoint, did you spend your time working in. More mature markets? [00:13:00] Or was it more future outbound strategy? Or was it just kind of everything at the same time? It, it, it’s been
[00:13:04] David Goubert: both. I think the, the step one was, um, so, um, two things before I go into that strategy.
[00:13:11] The, the, the first one is that even coming in, before coming in, I felt that air as a great foundation from uh, um, states we’re in. Or developing, uh, but also where we are from a cultivation, if you want standpoint in terms of having, having really built the, the infrastructure that that was needed. So that part I would say was already, well, kind of well established and with, with clarity in terms of, hey, these are the type of states we want to be in, and we’re not here to be the biggest and being everywhere in every state, we’re pretty.
[00:13:49] Um, I’m not gonna say narrow, but, but focused in term of, of, uh, where we we want to be. But so that was already kind of established. Um, [00:14:00] the most important again was what do we want this business model to be? Who are we? And on that front, kind of what came pretty quickly was say, okay, uh, on one side we’re a retailer.
[00:14:16] We’re a retailer. We have 85 stores. They’re not all air uh, cannabis dispensary right now, but they will. But we have a network of, of retail and, and we’re a retailer that that’s one part of who we are. And on the other side, we are, uh, what, what I call a house of brands, meaning we’re a C P G company that build brands, uh, and, and cultivate and process products.
[00:14:45] That needs to be at the right quality for those brands based on what’s the promise of the brand and what, what are we creating in each of these brands. And so pretty quickly, uh, realize that we’re both these things at the same time. A [00:15:00] retailer and a hazard brand. First question you can ask yourself after that is, Well, if we’re two different companies, two different businesses, why are we one company and is there value in being one company or should we be two companies?
[00:15:12] Like you could split that and say on one side you’re a retailer, pure retailer. On the other side you’re a house of brands, right? That sell in different places. Um, and, and, and, and going a bit deeper on that, like, okay, if we are to be one business that has those two different business model, if you want.
[00:15:35] Uh, it has to pay off as being something that is a virtual circle or, uh, or, or to me that is what I call a flywheel of, of that. And so, uh, and it is actually, I think it is, um, I think it’s gonna pay off more in a, in a, let’s say two years than it is today. But it is meaning as a retailer, [00:16:00] Uh, and I like to take an example of from my background saying, Hey, we’re at the same time a mini Sephora and a mini L’Oreal.
[00:16:11] Uh, as a mini Sephora, the only thing you care about, quite frankly, the only asset besides your team, your people, which always is your number one asset, but your only asset as a retailer is building a loyal customer base. People are going to Sephora instead of going to Alta or going to another because they are loyal to Sephora, not because they can find products, because 99% of the products, they can find them in the other places.
[00:16:40] But because there’s something that was built from a loyalty of customers that they buy into, and it’s a community that they feel part of, and that’s the asset of any retailer was the same case at Niman Marcus. Why do you shop Neman Marcus Ex instead of sacs? You’re building loyalty. Uh, with, with that, so [00:17:00] on one side we’re a retailer and, and the only asset, the only focus is building a loyal customer base.
[00:17:05] And we can come back to what does it mean as a house of brands. Your only job is developing brands that make sense and have a real d n a story promise and making sure that the quality of the products. That you, you, you deliver, uh, correspond to those brands, right? Especially if we go in a good, better, best in terms of how do you structure your brands.
[00:17:30] So once we’ve said that, we say, okay, there’s only three assets we need to focus on. We need to build a loyal customer base for retail. We need to have str brands that have equity. Today, frankly, they don’t. Uh, and we need to make sure that the quality that we deliver corresponds to the promise of those brands.
[00:17:52] So three focus period. And where I’m saying that it’s, uh, it can be a real flywheel. Is that as [00:18:00] you build a loyal customer base for retail, you can actually expose them to your brands, which I mean, we know that everyone is around 60, 70% internalization. So here we are. Uh, but the other way around is true as well as you develop brands and really brands that start to have their own following becomes pretty easy to pull that and, and support your, your own network, while also supporting wholesale as a business, right?
[00:18:23] So you actually get to that. Flying wheel or, or or vis
[00:18:28] or virtu circle
[00:18:30] of, of growing the retail, but growing the equity of your brands at the same time. I’m saying it, it’s gonna take time on that front because I think that efforts on the retail side are actually paying faster than efforts in rationalizing the brand.
[00:18:47] Really creating the story behind the brands and creating equity in brands. And that is work we need to do now, but that’s gonna pay off. I think more in a year or two years than it will very short term. [00:19:00]
[00:19:01] Bryan Fields: So you’ve identified your
[00:19:06] feed into
[00:19:06] Kellan Finney: each other, right? Hey, you wanna,
[00:19:09] David Goubert: Kelly, you were breaking
[00:19:10] Bryan Fields: up a bit. Am I? Am I glitching? Yeah, I don’t. Gotcha. Kelly? Yeah, I totally,
[00:19:16] Kellan Finney: all right. Am I here now?
[00:19:18] Bryan Fields: You’re so far. How about now?
[00:19:20] David Goubert: Yep.
[00:19:20] Think it’s better now? Yeah.
[00:19:23] Bryan Fields: Yeah. So the businesses feed into each other. Yeah. Right? Yeah.
[00:19:26] Kellan Finney: Specifically. And so how do you balance resources
[00:19:30] Bryan Fields: on both sides?
[00:19:32] Is it kind of
[00:19:32] Kellan Finney: equal and hoping that they both feed into each other simultaneously?
[00:19:37] Bryan Fields: Um, the thought process
[00:19:38] Kellan Finney: behind the balancing of resources is for both businesses.
[00:19:42] David Goubert: And that’s a awesome question because once we’ve done that, the next job was actually to make sure that we build the organization to support those assets, right?
[00:19:51] Uh, and in some places pretty easy. Your own retail organization is very focused on retail, but the place where we had to think through what does it mean [00:20:00] is in marketing, where marketing is actually a place that’s an e-commerce at the same time that supports. Uh, at the same time you’re retail, but supports at the same time how you build brands and build awareness.
[00:20:11] So we we’re the marketing organization to really have the functions that are retail functions versus the functions that are more, um, brands, functions, and brand support. And, and, and, and yes, to your point, from an investment standpoint, it it, it is measuring. Where do we put more resources and from a people standpoint and from a CapEx and, and and opex standpoint, uh, between those different priorities and assets that we want
[00:20:45] Bryan Fields: to develop.
[00:20:47] I’m sure you made your marketing team very happy when you made that statement, cuz I can only imagine as a, as a marketer how, how happy that would make me feel to hear an executive come in and understand the importance and the value of marketing, especially given the challenge [00:21:00] of cannabis. So you align your three North stars.
[00:21:02] Yeah. Now you’re looking at your geographic map and saying, okay, which one of these assets in these different states doesn’t fit the vision? Is that kind of the steps that went into it? Exactly. Can you walk us through kind of the Arizona decision on why, you know, decided to go in a different
[00:21:15] David Goubert: direction?
[00:21:15] Yeah, yeah. No. Um, where you it’s, it’s, it’s exactly that. So, um, the only way we can actually make this work is if we build enough awareness and enough market share. And if we don’t build enough market share in the market, uh, that flywheel is not gonna fly or it’s not gonna turn. Um, and in the case of Arizona, uh, three stores in the state, uh, pretty limited presence from a wholesale standpoint and pretty disconnected from the rest of our network, uh, geographically.
[00:21:55] And when you put all that together, It didn’t fit into the strategy [00:22:00] of, of we need to gain market share in retail. We need to gain market share in wholesale. We need to build brands that will have a following and make these things work together. Arizona was complicated for us. Maybe it works for other others, but as we were looking at priority of investments and work to focus, that didn’t fit the bill and.
[00:22:19] On top of that, it was the right decision from a balance sheet standpoint, and we haven’t talked cash yet, but that’s a key, key focus. So didn’t fit the strategy from everything we talked about earlier. Uh, great outcome for us from a balance sheet standpoint made the decision pretty easy. We made the same decision at the same time, pretty much by not, uh, acquiring D 33 in Illinois because don’t have the depth yet in Illinois.
[00:22:46] Don’t have cultivation in Illinois. D 33 has a great culture. That is different from the air culture and, and would require a lot of efforts and good question. Does that make sense? At some point to, uh, to, to, to transform that? So, [00:23:00] um, was not a priority at the moment. Doesn’t mean Illinois will not be a state at some point bigger than the two stores we have today.
[00:23:06] Uh, but didn’t make sense to make that a huge priority, shorter term. So those two places were places where we said, Hey, time out. That’s more of a disinvestment that makes sense from a, a, a, a strategy standpoint. Now, if you look at the rest of the network, right, existing and what we’re developing right now, it’s in Florida, it’s in northeast, Midwest, kind of, and it’s Nevada.
[00:23:32] Um, for us, it’s important as we build one retail brand. Air cannabis dispensary, that people that travel products don’t travel people do, uh, that people that travel can identify to the retail brand as what we are trying to do is build loyalty. So being in Florida with, uh, a significant market share, uh, being in no northeast states as New Jersey, Massachusetts sets, um, uh, [00:24:00] Pennsylvania and so on, developing Ohio, Connecticut, um, looking at Illinois or what would we’re gonna do one day.
[00:24:08] But also Nevada, where we have a high market share, uh, the highest market share in the state, um, Nevada makes sense, meaning everybody travels to Nevada, but Northeast Florida goes there. And, and between Florida and Northeast, as we know or Midwest is, is a pretty, uh, obvious kind of from a customer and geographic standpoint.
[00:24:31] So that’s how we’ve been thinking about it, which means as we think as. Developing into new states or stuff like that. That’s also the approach we need. We want to take, we want to be in a place that makes sense from a geographic standpoint, want to be in a place where we can have a significant market share.
[00:24:47] And we want to be in a place that is, uh, disciplined from a regulation standpoint, uh, that, that we can actually operate and operate in a, in a healthy way. And that’s what’s guiding So. [00:25:00] Besides, as we said, Arizona and Illinois, all the other states that we’re in makes a lot of sense. And for us, there are states where we want to invest and some are mature, but we still want to invest and think that we can do much better.
[00:25:15] Nevada, uh, some are growing fast and same thing Florida, uh, and some are just starting now, like Ohio. Or they’re steady like Pennsylvania, but we’re all waiting for adult use
[00:25:29] Kellan Finney: there. You guys, uh, have to intrinsically run like your rec businesses different, different than your med businesses, right? So the business operating in Nevada, in recreational market, do you guys handle that significantly different than say, business operating in Pennsylvania?
[00:25:46] And if so, like can you kind of talk us through some of the nuances there? Yeah,
[00:25:51] David Goubert: yeah. I, I don’t think there’s. So obviously what what differs and what we need to be very careful of is, uh, the regulation [00:26:00] and the things that are, are different from a regulation standpoint. Um, that said, I don’t think that there’s, um, major differences in term of the experience.
[00:26:13] That we want to create for a, a, a, a patient that’s in a medical state or that is a medical patient, uh, versus uh, uh, a recreational, uh, or person. Because, and the main reason for that, uh, which I, I, I love that by the way, and I think it’s untapped, uh, is that we’re in a business that creates pretty intimate relationship.
[00:26:39] And whether it’s because. You’re a patient with, uh, a need that is specific to, to your situation that you explain with a butt tender and create that very, very intimate relationship. Whether you just want someone that’s gonna help you find the best products for you, that’s gonna help you relax or, or discover something [00:27:00] different.
[00:27:00] You are in a, in a relationship that’s pretty intimate with that person and, and, and sharing a lot about yourself. Um, and I love that. In term of what we can build from a customer loyalty and customer relationship standpoint. The other thing that I love about this industry is that the frequency is very high, and by the way, the retention as well.
[00:27:21] Uh, I keep saying, Hey, I come from the luxury world where everybody’s talking about loyalty of customers. C L V, meaning customer lifetime value of customers, and so on. A customer in luxury spends five, $600 per visit. Comes three times a year. That’s like 1500 to two grand a year. A cannabis customer comes every two weeks, spends, depending on the market, 60 to $120.
[00:27:50] Guess what? Their value per year is the same as the value of, of, of a, a, a luxury customer. Um, if you ask me, I prefer [00:28:00] the cannabis customer, if I have 26 times. Per year or 25 times per year or chance to connect, not even talking about what we need to do from a, a digital standpoint and, and connection outside of the physical presence of the store.
[00:28:17] This is a goldmine compared to other industries. If you get the intimacy, a pretty high retention possibility and a lot of touchpoint, that’s a dream for a retailer. Um, so I love that about cannabis.
[00:28:34] Bryan Fields: Was that one of the driving forces internally in your mind when you were thinking, okay, like in, in luxury, I have one or two experiences with this customer, but I know in cannabis I’ll get a lot more.
[00:28:43] Did that opportunity kind of excite you, understanding that you can leverage that accelerator and learn more about the customer? Was that part of the, the transition that made you kind of interested? I,
[00:28:52] David Goubert: I did not realize that as much before coming in and it, it, it, it came through the visits and through seeing, actually [00:29:00] physically seeing in the stores, um, Customers and patients that are in the store, but they’re waiting because, I don’t know, uh, Bob, their bartender is actually serving someone else and they’re like, no, I’m not gonna go with with Joe.
[00:29:13] I’m gonna wait for Bob because I want, I want to have the time with Bob. I was like, wow, that’s gold. Um, but I did not necessarily realize that before joining. Like, I didn’t know, uh, it’s through the visits that I was like, wow, we gotta, we gotta really do something about that. Did Bob
[00:29:32] Bryan Fields: get a raise? Yeah, I hope so.
[00:29:35] What he asked did Bob got a raise.
[00:29:38] David Goubert: I
[00:29:39] Kellan Finney: said, did Bob get a raise? He’s going into HR right now. He’s gonna go into hr. Oh, hey. You
[00:29:44] David Goubert: know, um, it’s, it’s very important to take great care of our, our teams and recognize the value of the team. Uh, I’ve been impressed. Since I arrived, I’ve been impressed by the actually customer experience from that standpoint, that intimate [00:30:00] moment.
[00:30:00] And I’ve been, uh, very impressed by the knowledge and, uh, and at the same time, the care there are teams have. And by the way, if you think about it, it’s not surprising. And we’re back to the same question about why are you here, right? It’s people that care, uh, and that translates so well into the experience.
[00:30:19] So if you ask me, The improvement of the experience is not that much about that very moment. Yes, there’s work to do there, but that, that is already in a very good place. I think compared to other retail industries, I think it’s everything around, uh, and I’m not talking that much about the physical environment by the way.
[00:30:38] I think it’s everything around that we can do such a better job, um, than we are today. Um, by that I mean the, uh, overall customer journey that integrate digital and, and physical. It is how do we communicate with our patients and customers where they are not with us physically? And, and what does that look like?
[00:30:59] It’s the [00:31:00] understanding by the teams of. Um, hey, Brian was here last week. Have you asked him, have we contacted him to ask him about this experience and or Brian was here two months ago, we haven’t seen him in two months. What’s happening with Brian? Um, and those are more of the things that we need to work on.
[00:31:19] Then the moment of the experience physically that I think is already really great and always can do better. Uh, neither the environment itself. At some point we need to improve the environment. In my opinion, it’s like number four, number five in the priorities. And it’s like, Hey, yeah, we’ll do some stuff, but that’s not key.
[00:31:39] Bryan Fields: One of the challenges for you must be the fact of, from a balance sheet standpoint, it’s kind of restrictive with some of the operations you have ob obviously you’ve come flush with opportunities and ideas in order to improve this business. But as a new executive, you have to be prudent with capital, especially from a shareholder standpoint.
[00:31:52] They wanna know, you know, David’s gonna come in, he’s gonna ride the ship. So how do you balance that as a new c e O of a publicly traded company wanting to put your [00:32:00] stamp on. The company, but also the same time being respectful of what the need to happen. Yeah.
[00:32:06] David Goubert: so it’s clear that cash is king. Having a strong, healthy balance sheet is paramount.
[00:32:16] Especially for, I mean for everyone, but truly for us, considering where we are, But at the same time, we need to have clarity on where are we going to the, to in the two, three years. And, again, narrowing that focus so that we’re not trying to boil the ocean, but we’re very, discreet, very clear on the few things that will make a difference.
[00:32:39] The balance that we found is that, luckily in a way we have a lot of opportunities for optimization. From a not even a balance sheet necessarily standpoint, but even from a p and l standpoint, we have a lot of, [00:33:00] of, potential for optimization because the company has been growing very fast through acquisitions.
[00:33:06] it’s been in a different time of, cannabis at the same time. And here we are at the moment where we can say, Hey, we need to prioritize. We need to be focused. And, we need to make sure that, we leverage our assets, to, be in a good place for a cash position. So what that means comfortably for AYR we had, and we still have too much inventory compared to where we should be. And so I’m taking my supply chain hat and saying, Hey guys, we’re, running at, an inventory that is at 90 plus million dollar. For, a revenue of 117 million in the last quarter. That’s almost 90%, meaning 85, 90% of the inventory representing the sales for the quarter best in class in the industry are capable of doing that with 50, 60%.[00:34:00]
[00:34:00] and, you can see everywhere that we’re not balanced from that inventory. So that is an opportunity of 10, 20 million of, cash if you want, through a, better management from an inventory standpoint. Let’s make sure we bring the talent from a supply chain. Let’s make sure that we make the right decisions in terms of right sizing capacity, right sizing, skews, and so on.
[00:34:24] that, that’s one example in inventory margin is another one where I think we, we, despite price compression, where we have opportunities, um, it’s a, which I don’t love, but it is what it is. It’s a highly discounting, uh, industry right now. To the point that sometime we’re stacking discounts that we don’t need to stack.
[00:34:45] Um, so again, having that health, uh, of looking at really what do you, where do you stack, don’t stack and so on. There’s opportunities from a margin through internalization and other things. So that’s been a big focus from a, a [00:35:00] cash standpoint. And then the, uh, The third one is on the cost savings. I mean, we, we found millions and millions and millions of savings, uh, for, for the year that will allow us to get to a much better place from an sg and a standpoint, um, again, because we’re pausing from a, a, a very different moment that was about acquiring, acquiring, acquiring, and now it’s about optimizing and scaling.
[00:35:25] So, Even though you get upset, that constraint from a, a cash standpoint, I’d say that doing that work, what we call our 2023 optimization plan, gives us at the same time, uh, the capability to invest in the things that matter. So it’s making sure we get to a good place and we, we, uh, um, we said that we would be at 25% of EBITDA by the end of the year.
[00:35:50] Uh, we said that we would be operating cashflow positive for this year. So all that work is going into all this. But at the same time, it’s, it’s kicking the can if you don’t [00:36:00] invest in the things that actually generate growth in the second half of the year. And, and then for the, the, for the year 24,
[00:36:06] Bryan Fields: 25.
[00:36:08] Yeah, I, I think we’re on the same page with that and I think it’s critically important. And I wonder how many other cannabis companies probably need to take an inward look on optimizing their efforts. And I can only imagine from a supply chain perspective of looking out and of all the different operations across the different states and saying, okay, everybody, we’re gonna have to tighten it up and these are the type of numbers we’re gonna have to hit.
[00:36:25] And then kind of digging deep into understanding, you know, what are the root causes of these problems? You know, where’s the decision making? And then kind of correlating, is it just in Florida? Is it New Jersey? Is it in Ohio? How do like, Is it a singular problem or is it kind of a compounded problem that works through the supply chain in, in each different state?
[00:36:42] David Goubert: No, that’s where you get into the business units, and each business units is unique from that standpoint because, uh, Florida is in a very different situation in so many ways than Ash said. I mean, those are probably two really good examples, man. On one side you have. [00:37:00] Uh, Florida where you can only sell the products that, that you grow right in your store.
[00:37:04] So it’s a, it’s the most purely, uh, integrated business. But at the same time, it’s a business where, uh, there’s growth where you can open as many stores as you want, uh, if it makes sense, right? From a, from a bottom line standpoint, but also from a CapEx standpoint. Uh, so through that, it adds its own unique supply chain.
[00:37:27] Questions, and maybe by the way, the simplest one from supply chain standpoint, then you take message set, which is a totally opposite state, uh, where you have over 300 dispensaries, but you can have only three dispensaries, right? As a, as an nso. So, hey, you’re 1% of the market from a dispensary standpoint.
[00:37:47] Uh, yet, hey, if there’s 300 dispensaries, there’s a. High, uh, potential for wholesale, um, which from a supply chain standpoint, you need to be thinking completely differently in your own [00:38:00] network where you need a good internalization, but at the same time, the breadth of products that correspond to what your customers want.
[00:38:07] Medical and rec. Uh, while at the same time we’re working on that, that wholesale priority. So each state, we could talk about Nevada, New Jersey, and Pennsylvania. Each state is unique from that standpoint. Um, and in some ways it’s easier than industries, like, like fashion, stuff like that where you need to buy products about nine months in advance.
[00:38:34] And, and uh, in here it’s not the case. You actually build products. That lead time is like four months for five months, right? Between the time that you make a decision, you cultivate to the time you see it in your stores or wholesale. Um, But it’s still four months, let’s say. So you, you got the time to be wrong on your forecast and what you see the business to be six months down the road.
[00:38:59] Does that, [00:39:00] is
[00:39:00] Bryan Fields: that as hard as it sounds or is it maybe a little simpler with experience? Right, because like, that sounds incredibly complex and I’m just wondering, just hearing that easy as sound is, is it as challenging as I’m kind of processing?
[00:39:13] David Goubert: Uh, I don’t think it’s easy. Because I think it’s, it’s, it’s, again, different by state.
[00:39:20] And on top of that, it’s still a young industry, which means that it’s, it’s not as, uh, predictable and as other industries. And we all know the swings from a price standpoint and stuff like that. So it’s not easy by any means. Um, yet at the same time, I think there’s also, um, um, Lack of processes and expertise in some of these aspects that can help make it easier.
[00:39:48] Bryan Fields: So slightly switching gears, I know we talked about the fact that, uh, in cannabis there was price discounts where they get stacked on top and coming from the luxury world that doesn’t really exist like that. So do you think [00:40:00] that’s based on the fact that the brands haven’t established the type of value to demand, the type of.
[00:40:04] Price point that currently exists. Yeah. And does air plan on, uh, pushing the envelope and kind of aligning a little luxury value with the product in the future?
[00:40:12] David Goubert: Yeah. Um, so you’re absolutely right. And I mean, you’re, you’re a marketer. You’re absolutely right. It’s, it’s, if you want to have any price power, you need to have brand equity.
[00:40:24] I mean, there’s maybe other ways to do it, but you need to have brand equity. Um, if you don’t have brand equity, your, your products is a commodity. If your product is a commodity, you’re not gonna have any price power. Um, so the reality today is that accept very limited number of brands, We’re in the business of commodities And so the only way for us to actually change that and, and we’re back to that point about that House of Brands focus is to build brands that have equity. And [00:41:00] today it’s not the case, uh, on that front. Coming in, I was, we have 11, I think 11 brands that are national brands and they’re more specific by form factors.
[00:41:11] We’ve got brands on flower brand of, of, uh, pre-roll and brand in, in edibles and vapes and so on. Uh, and the reaction of the team and myself as we’re digging through the strategy, we say there’s no way, no way we can build equity in 11 brands. And there’s no way. With an average of five or 6% market share in the markets we’re in mean 2% on the overall cannabis.
[00:41:37] And let’s say that in the states we’re in, there’s no way we can divide marketing investments to create awareness on 11 brands. It’s not gonna work. So we need to actually think differently. We need to have that good, better, best, which in your way, in a way, Brian is answering question on luxury, but it’s.
[00:41:55] We need to have that good, better, best from a strategic standpoint on brands we [00:42:00] need to rationalize to, to way less brands so that we can actually invest and, and make them more visible, uh, for our, our patients and customers. And, uh, at the same time, a big question has been a brand need to accompany someone in their cannabis journey.
[00:42:21] And if I’m a cannabis, Uh, patient, customer that actually use flour, pre-roll, vapes, edibles, drinks at different moment in my, in my life. Then I should be able to have a brand that’s offering that to me as well, where I can recognize the brand, identify with a brand, and, and in the different moments, and in that sense being debate.
[00:42:44] I don’t think there’s a right or wrong, but in that sense we’re making a clear decision to say that we want brands that will actually be across. Most, if not all categories, because it’s about aligning a brand with a customer and with having a story. It’s not [00:43:00] about one form factor or one category. Um, Nobody’s surprised that Louis Vuitton, who’s a maltier that was doing handbags.
[00:43:09] If you were to go to a store in the shoes where, I don’t know, another brand, it would be like, why, why, why do they change brand like I want Louis Vuitton, right. Um, we need to get to the same place mean our key brand is kind. You should have kind, flour, kind, preroll, kind, vape kind, edibles. I’m giving you stuff that are not launched yet, by the way.
[00:43:31] But, um, that’s the core, that’s the core of what we, what we need to create. So long answer, Brian, but that’s, uh, that’s how we’re thinking about the power of brands which give the power of price. Uh, if we’re in a commodity market, it’s commodity price.
[00:43:49] Bryan Fields: The one challenge that I’ll push back on you is that in each state there’s different marketing regulations, so you can’t even display the product the same way.
[00:43:56] So for example, if I buy a product in one state and I’m like, [00:44:00] cool, this is the kind product that I like, and then I go to Florida, I’m like, where’s product? I mean, that’s an extra layer of challenge that you currently have to operate in to convince a customer, Hey, same, same, but different.
[00:44:10] David Goubert: Yeah, yeah, no, totally.
[00:44:11] So first step is making sure that even the name of the brand is allowed in the state that we’re in, right? Which we had that issue with some of the brands. So as we’re thinking about rebuilding the brand, the first question is like, Hey, let’s make sure we pick names that actually, uh, we can use everywhere.
[00:44:27] And then you’re right, in Florida, it’s all white everywhere, but you can still merch, have some merch, not products, but merch in the stores or your, your website and so on. Uh, but to your point, man, from a marketing asset, And how you think about it. It’s, it differs state by state. Um, so it’s an interesting balance actually in every function of what’s corporate support, or, I like to say support not corporate by the way, what’s support nationally versus what needs to be in [00:45:00] each, uh, market, each business unit.
[00:45:04] Easier said than done. Yeah. Well, yes. Uh, and, and, and it seems to us that the right balance right now is giving a lot of, uh, uh, power and autonomy by market, but having the expertise, so from a revenue standpoint, p and l standpoint, um, even launch of products standpoint and so on. Combining retail and wholesale together, by the way, which we don’t want to consider as different responsibilities.
[00:45:35] Um, and make sure that from a national standpoint, we bring that expertise that comes usually maybe from a different industry, obviously, except for the functions that are super close to, to the, uh, cultivation and process, um, that, that can support those regional teams, you know, on the day-to-day with a national expertise.
[00:45:57] But most likely, [00:46:00] uh, a, a decision power much more in the markets than than central.
[00:46:06] Bryan Fields: Continuing on the conversation, uh, you got announcement with the US Cannabis Council. I would love for you to share that with our listeners.
[00:46:11] David Goubert: Yeah. Uh, so, so we just announced that, meaning that, uh, we’re, we’re now, um, part of the US Cannabis Council, um, for us, I’m gonna take again, the example of coming from the luxury.
[00:46:29] when you’re LVMH and Kering and, Richemont and Chanel, you’re not that much competing. Of course, you love competing against each other, but you’re not that much competing about against each other. What matters for the luxury world is you’re gonna grow if you open up more people into, the luxury world and understand the value of luxury.
[00:46:52] And yeah, you’re gonna want to have market share from the others, but it’s about growing the pie more than increasing your [00:47:00] size in the pie. Um, did I lose you guys or we’re We’re still good. We’re okay. Cool. All right. Uh, and, and we’re thinking about cannabis the same way. It’s a young industry. It’s different players.
[00:47:20] It’s, And, we need to make efforts together to actually combine our efforts to be heard. I believe it’s true from a being known and appreciated by more, potential customers. Even though that was a surprise to me to see how much it’s actually something that’s already the case today where we’re saying, I think it’s 70% are, either consumers or thinking about it in the next six months.
[00:47:54] so it’s true from a customer standpoint. It’s also true from an overall. [00:48:00] Political standpoint and regulation standpoint. And the more we’re gonna be able to bring the, players together and the more we’re gonna be able to, actually move faster, on things. And that’s why we, chose to join the, US Cannabis Council and, that’s why.
[00:48:20] we’re, thinking about where are the efforts that we want to be part of? Meaning everybody’s asking about Florida and what we’re doing in Florida to support there and, everywhere, meaning how we supporting these efforts. If I take Florida, cuz obviously that’s the question. Kim and Tru have been driving the efforts and, putting a really significant amount of money that’s serving everyone, to, actually get to a place where it is adult use.
[00:48:50] where. We’re gonna be thinking in next steps, how do we help, right? obviously each company is different and we’re not in a position that we could have done [00:49:00] what, truly did, absolutely not. But it’s on us to figure out how do we help? And again, the best way to help is actually to be pla, to be really, connecting the dots together between the
[00:49:10] Bryan Fields: players.
[00:49:13] When you got started in the cannabis journey, what did you get? Right? And most importantly, what shocked you or surprised you?
[00:49:20] David Goubert: Um, What surprised me most, but also encouraged me most, uh, was what I shared about before, which is the passion. Really the passion, and I would say courage with it of the people in the industry.
[00:49:38] And it goes beyond air. It, it’s, it’s the industry. Uh, that’s really what, what was the, the biggest wow and surprise? Um, the. All the moments where I felt that way as well and, and, and really proud of being part of, of the industry and the company was, for [00:50:00] example, the expungement events that we’re doing where we’re helping people, uh, getting their, uh, criminal recurrence, uh, expunged and, and, and those kind of moments where we feel like, Hey, we’re really doing something that, that’s extremely helpful.
[00:50:13] Um, so that was. Great surprise, I would say, and, and, and things that, that, uh, were, were wow coming in. Um, surprise, good surprise from a business standpoint, I would say was understanding the level of where we are from a cultivation capacity and cion quality and so on standpoint. So recognizing all the work that’s been done on, on that front.
[00:50:39] And I would say a third on the very positive things was. I didn’t expect that being a company that’s, the conglomerate of 18 different small companies that were put together, I expected to be like, wow, to get numbers and understanding the business is gonna take forever. And the platform that was built by [00:51:00] the finance team, tech team on making sure that everybody’s running with the same platform, that, I mean we are at a level of data that.
[00:51:12] is as good as what I had at Neiman in 115 year old company, and that was extremely surprising in a super good way. The surprises or things were like, whoa, not as excited. the level of promotions and discounting that’s happening, the lack of equity in the brands. And what we need to build from that standpoint.
[00:51:41] Were, some of the, things that were, surprised? Um, don’t know if I answer, but that’s, that’s some of the things that, that were, uh, moments
[00:51:54] Bryan Fields: coming in. We’re sitting here five years from now, what have you accomplished?[00:52:00]
[00:52:03] David Goubert: Uh, made it through so. Very important for me is making it true to our promise of being a force for good, which means that the company is truly accompanying our patients and customers, supporting our teams, supporting the communities, and supporting on, um, writing the wrong, uh, and on, on the war on drugs, and having to do that we need to be in a healthy.
[00:52:38] Company in a healthy situation to do that. So to do that five years from now, uh, we’re obviously in a great balance sheet position, but we’ve really made it true to what I was sharing about we are the retailer of choice. Meaning that we have a loyal customer base that’s really loyal to air and we’ve [00:53:00] built, let’s say three brands that, uh, mean something.
[00:53:07] In the industry. Um, that’s what, five years is long time. And I think that we’re in dog years here, so five years feels like forever. Uh, but let’s say three years from now, that’s where I want us to be.
[00:53:21] Bryan Fields: Five years is like a full career. For sure. For sure. Before we do predictions, we ask all of our guests, if you could sum up your experience in a main takeaway or lesson learned to pass onto the next generation, what would it be?
[00:53:36] In this experience or in, in your professional experience if you could pass on one life lesson Yeah. To,
[00:53:43] David Goubert: so, um, I’m gonna share, let’s say three. Uh, the first one is don’t be afraid to change, meaning that, Um, [00:54:00] I’ve been in, in a place at some point where I stood probably too long in a position or in a place.
[00:54:05] And you need to stay long enough that you’re learning, that you’re making a difference. Making an impact. But don’t be afraid to change. Don’t be afraid to move into something uncomfortable that’s gonna help you grow. That’s the, the, I’d say the number one thing. Uh, the second thing is don’t get comfortable and actually take decision fast.
[00:54:27] Okay. You need to take the time to think through things, but don’t hesitate to take decisions fast enough and, and, and listen to your guts and people around to make these decisions. Um, I’ve never been like getting a lot of feedback and, and, and things from my teams. I, I, I, I don’t think at any time it has been about, well, we’re going too fast or we’re, why It’s been at some point more about why didn’t we do that six months ago?
[00:54:54] Uh, so. And, and I’m taking that as a, as really in a learning from [00:55:00] before for this experience for me, and trying to actually take decisions and go fast. That’s the second thing. And then the third thing that I try to stay true to, and that to me is, is key, is loyalty. Um, I’m, I care about my teams and, and, and, and I care about people around me more than anything else.
[00:55:23] And the great thing about that is that that means that you get that back from others as well. Um, and standing today in a company where there’s great talent that is here because we’ve had other experience at other moments with me or others, and, and that’s how you can build that. So don’t be afraid to change.
[00:55:43] Go fast and be loyal. Beautiful.
[00:55:47] Bryan Fields: All right. Prediction time, David. As the cannabis industry continues to mature, what developments do you foresee in optimizing the consumer journey and applying your luxury background to [00:56:00] build strong customer loyalty? How does air wellness plan to stay at the forefront of understanding and meeting consumer needs?
[00:56:07] David Goubert: Wow. Uh, to me that, that the, the key thing goes back to. Building those relationships and building that loyalty. Everything, evolves in my opinion, at least on the retail side on that. And the main changes, the main’s evolution, the main way we need to think about it is very much about how do you build relationship.
[00:56:41] so yeah, that, to me is gonna be core to the changes and, core to how we’re thinking about. About the changes and that answer to your second point at the same time about what will be different, what will be different, should answer to that from a product standpoint, from a tech standpoint, from [00:57:00] a environment standpoint, and everything else going.
[00:57:06] Kellan Finney: Uh, I’m gonna say consistency, right? I think product consistency, especially operating in all these different states, right? Um, I think that’s gonna create loyalty and that’s just gonna feed into everything you just mentioned, David, right? Yeah. So product consistency is, I think, key to, to all of those things
[00:57:23] Bryan Fields: as well.
[00:57:23] What do you think, Brian? I think brand power is, is earned right uhhuh and can command a type of value just given the, the name and the integrity behind it. And I can’t see anything more than the brands you’ve worked with David, because my wife talks about these concepts and I’m just, I honest, disgusted by the price point, but it commands that value just based on the brand.
[00:57:45] Hundred percent. And in Canada, we’re all fighting to figure out like, Which products and all we’re talking about is, is burn through, right? Like how quickly can we turn over these products and eventually we’ll stabilize and have economies of scale. Yeah. And a national footprint and people will [00:58:00] be able to put those positions in front where you walk in, you can command that.
[00:58:03] 60, 70, $80 for an eighth here in New York, probably like 400 because terrible with our, we figured out. And it’s just a matter of building the infrastructure and understanding that the footprint today is also not the footprint for the future. So having someone like yourself, David, at the helm is probably exciting, but also challenging knowing that the tides will change.
[00:58:23] You just need to fight through the water. So, uh, give you,
[00:58:27] David Goubert: yeah. Hey, you know what I love about our answers is that I went into, Customer loyalty, which is one of the three assets. Kellen, you went into consistency of products, which to me is quality. And Brian, you went into brand power, which is the third asset.
[00:58:45] So the three of us have actually just talked about the three assets. That is what we as a company, Um, are a hundred percent focused on. So I, I love it. We all
[00:58:55] Bryan Fields: see the North Star. Yay. So David, for our listeners, [00:59:00] they wanna get in touch, they wanna buy air products. Where can they find you?
[00:59:04] David Goubert: Uh, they can find me on, uh, on Twitter.
[00:59:06] They can find me on LinkedIn. They can find me on, uh, reaching out to us on, uh, at, at uh, air Wellness.
[00:59:13] Bryan Fields: Awesome. We’ll link it up on the shots. Thanks so much for taking time. This was a lot of fun.
Editors’ Note: This is the transcript version of the podcast. Please note that due to time and audio constraints, transcription may not be perfect. We encourage you to listen to the podcast, embedded below if you need any clarification. We hope you enjoy!
It’s no secret that California is one of the most cutthroat markets in the industry today. Not accepting anything less than the best is how Ted Lidie, founder of Alien Labs, has built a successful brand synonymous with quality and successfully scaled it across state lines.
This week we host Ted to discuss:
How Alien Labs have been able to grow Top Shelf Flower at scale His obsession with quality and how they do QC What is going on inside the top-shelf California cannabis industry? What he thinks of being inside almost every NY Unlicensed store
About Alien Labs
At Alien Labs, we take quality seriously. We believe that our customers deserve the very best, and we work hard to ensure that our products meet the highest standards of quality and safety. We use only the finest ingredients, and we test every batch of our products to ensure that they are free from contaminants and impurities.
In addition, we are committed to sustainability. We believe that it’s important to protect the environment, and we do our part by using sustainable packaging and eco-friendly practices in our production process.
At Eighth Revolution (8th Rev), we provide services from capital to cannabinoid and everything in between in the cannabinoid industry.
8th Revolution Cannabinoid Playbook is an Industry-leading report covering the entire cannabis supply chain
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[00:00:00] Bryan Fields: What’s up guys? Welcome back. Turn the episode of the Dime. I’m Brian Fields and with me as always, this Kellen Finney. And this week we’ve got a very special guest, Ted Lighty, founder of Alien Labs. Ted, thanks for taking the time. How you
[00:00:12] Ted Lidie: doing today? Hey, I’m doing great, man. Thanks for having me. Uh, I’ll, I’ve listened to a couple episodes.
[00:00:16] I really like what you guys are doing here, so, uh, uh, big thank you for having me on. Yeah.
[00:00:21] Bryan Fields: Excited to dive in. How
[00:00:22] Kellan Finney: are you doing? I’m doing really well, really excited to talk to Ted to learn all about, uh, one of those strongest brands on the west coast, you know, and, you know, help, uh, educate the East Coast on the, the west coast ways, if you will.
[00:00:35] Yeah. One would
[00:00:35] Bryan Fields: argue also one of the strongest brands here on the East Coast also. So, yeah. For the record, please, Ted, you’re
[00:00:40] Ted Lidie: location. Yeah. Uh, we’re located in Sacramento, California. We are, you know, we operate in three states, California, Arizona, and Florida. And, uh, we started in a little town of Redding, California, which is in NorCal, and now we’re home based out in sac.
[00:00:56] Bryan Fields: Awesome. Great. So for our listeners, I don’t feeling about you, can you give a little background about yourself and [00:01:00] kind of how you got started in cannabis and some of the origin days of Alien Labs? Yeah.
[00:01:03] Ted Lidie: So, uh, in, in California, you know, cannabis has been a thing, you know, a, a market, uh, culture, if you will, for a very long time, especially where I’m from in Redding.
[00:01:14] Um, I always joke with my friends that didn’t do weed stuff that you, there’s two choices you can do to really support yourself, you know, nicely in Redding. And one of them is be a firefighter and the other one is grow weed and sell weed. So I chose the weed route and uh, you know, here we are almost, I mean, 10 years later, pretty much coming up on 10 years and, um, you know, one of the strongest brands in California.
[00:01:39] We didn’t always know what we were doing, but we, the mo the moves that we made were right, you know, trusted our gut and just kind of went from there. And now we’re a much different place. We partnered up with connected and they, you know, we used kind of their foundation to, uh, continue to build our brand.
[00:01:55] What was the, the
[00:01:56] Kellan Finney: early days transition like from the medical market to like [00:02:00] a full rec market?
[00:02:01] Ted Lidie: Well, writing was banned. It was traditionally a banned city and county, so like what we were doing, you couldn’t really hide under the guise of medical. It was just pretty much straight up illegal, you know, or, uh, I don’t know if illegal is the right word, but it was just, you know, banned by the city.
[00:02:15] So, um, when legal hit, we didn’t really have any way to go legal. You know, we weren’t, we didn’t have the money. That’s not really, you know, we were making money, but it wasn’t like that. It wasn’t like the type of money you could use to spend and build yourself a few million dollar, uh, facility and do all the licensing.
[00:02:35] So, Um, you know, connected was one of the few stores that we supplied with what we did have. And, um, the O one owner at the time and the founder, co-founder, Caleb, came to us and he was like, Hey, we have a facility that you guys can occupy. And at the time I was partnered up with, um, Mya, then partner Tyler Meeks, and we were like, damn, really?
[00:02:56] And he said, yeah. And so we, we teamed up with Connected, which eventually led [00:03:00] to our partnership, but. At first we were just using their facilities and, uh, you know, they were doing all the backend licensing and selling a lot of it, which made it easy for us to, you know, do what we do best, which is grow good weed and, and brand good weed, and, um, kind of show off what good weed was at the time, it wasn’t really defined as much as it is now, you know.
[00:03:21] I wanna stay with the
[00:03:22] Bryan Fields: brand. Uh, one of the things that I liked about the aspect, it has a really calling on the demographic on who you’re speaking out to. So take us through the, the origin of the name, where’d it come from, and and who did you think about in those early days was really the, the demographic for that.
[00:03:34] Ted Lidie: So coming from re I moved to San Francisco from Redding. Um, I don’t even remember the year, but you know, early on in the medical days. And I remember going into these stores and just seeing how. There was weed and big jars, like deli style and it was unbranded. And I just remember thinking like there was no way this was gonna be how it was.
[00:03:54] And at the time, there all there really that I knew about, you know, I, in my limited scope of [00:04:00] it, um, just from like coming from just selling packs of outdoor to really kind seeing that this industry is out there, all I really knew about was cookies, you know? And it wasn’t a brand yet. It was just like, A strain that a few guys had access to and they sold it and branded it.
[00:04:16] You know what I mean? But it wasn’t like cookies yet. Um, and one of the things that struck me about that was that like, it didn’t really represent who I knew was growing the best weed, which was like up in Redding in the mountains and you know, the. The outsiders, the guys that weren’t just like freshly in it and showing their faces and all that.
[00:04:34] And that’s where the name Alien came from. Like, it does mean, you know, aliens in space, but it also means like different and outside of what was, you know, um, fast forward 10 years later and it kind of became, I mean, aliens are cool as hell now. They’re popular, you know, U F O. Aren’t even conspiracy theories anymore.
[00:04:52] And that was just kind of serendipitous. It wasn’t planned like that, but it just became like the perfect way for us to kind of slide in. And, [00:05:00] and I think that really contributed to like a lot of our success, you know? Yeah, a hundred
[00:05:04] percent.
[00:05:04] Bryan Fields: And it’s pretty crazy to think about the, the origin of ’em, like naming and alien laps and where we’ve come far, where they, uh, they’ve announced that UFOs are real.
[00:05:11] So it’s pretty wild
[00:05:11] Ted Lidie: to drastic difference. The whole nerdy subculture thing that we tried to kind of like pick up and run with is just popular now too. You know, like all the things that. When I was younger, like video games and anime and just sci-fi and all this shit, it wasn’t popular. It was like the weirdo stuff, you know?
[00:05:28] Essentially like you didn’t. Tell your high school friends that you went and rented weird anime movies and shit at, uh, you know, blockbuster. But now it’s like completely mainstream and like that is what’s cool. So it’s just interesting to me how like we were able to kind of ride that wave, you know, into, into success and into, uh, our brand being, you know, kind of a pop culture monster.
[00:05:55] What
[00:05:55] Bryan Fields: type of products does Alien Labs have underneath
[00:05:57] Ted Lidie: its umbrella? Uh, we, you know, we [00:06:00] specialize in flour. Um, that’s our number one product. That’s what we sell the most of. That’s what we, you know, care about. And then we also, you know, we do fresh frozen, so we have vapes, we have rosin, we have edibles, um, pre-rolls, all the things that kind of come with, you know, using the byproduct of flour.
[00:06:18] Um, and I love hash and rosin, so that’s one of my passion projects. You know, it’s not always the most profitable thing for us, but it’s just something that we love and. Think that it’s important to make and have out there. So, uh, that’s probably my favorite product in the lineup is the rosin. Um, I smoke, I smoke flour a lot more socially when I’m trying new stuff.
[00:06:39] You know, I smoke all the new things and smoke batches to qc, but, N day to day, hour to hour. You know, I’m smoking hash and rozen. It’s just easier for me. I have young kids and I don’t wanna always smell like flower and blunts when I’m going to pick ’em up from school and stuff. So, um, I think hash and rosn is kind of like a natural evolution of where people see themselves, unless you just [00:07:00] really like the, you know, ceremony of rolling a joint and smoking flour.
[00:07:04] Um, I think the best way to get the most flavor and the, the best effect is, is with hash and rosan. And
[00:07:11] Kellan Finney: so when you’re making hash and rosin, do you guys typically just focus on you to indoor, indoor cultivation? Yeah,
[00:07:17] Ted Lidie: only indoor, uh, fresh frozen for the rosin, and then we’re partnered with clia. Um, they make, you know, some of the best hash and rosin in the rec market and they make all of our stuff.
[00:07:28] Um, maybe eventually we’ll bring it in in house one day, but for now, you know, they do a great job with our product.
[00:07:34] Kellan Finney: Were you always, uh, an indoor cultivator? Is that kind of
[00:07:36] Ted Lidie: how you guys started with. I personally, yes, always indoor, but my family grew outdoor and that’s how I kind of got into selling, um, you know, outdoor weed is that my aunt and, well, my, my aunt and my uncle grew on the house that I was born in.
[00:07:52] But then, you know, when I was in high school, my aunt and her, uh, husband were growing just tons of outdoor and, uh, that’s where I would [00:08:00] get my packs and just sell ’em, you know, I’d get a good deal on ’em. And then, you know, story of a lot of us. Just the family just born into it, you know, that’s why it’s totally, it.
[00:08:09] It’s kind of like a, um, a product of where you’re from. You know, like a lot of us are from the same kind of areas where, you know, NorCal, Humboldt, same, just, that’s where you cut your teeth and learn about this stuff. You ever think about
[00:08:27] Bryan Fields: like what the next generation, like when your child grows up and kind of the next reigns of like how far of like a, we’ve come from like back when you started to, you know, let’s say 30 years from now with your, with your
[00:08:37] Ted Lidie: child.
[00:08:38] Oh, it, yeah. That’s crazy. My daughter, that’s what she wants to do. She always tells me, she’s like, I wanna go, I wanna work with you dad, with the plants. Like, cool, I’d love that. You know, we need more women in this industry that are killing it.
[00:08:50] Bryan Fields: Absolutely. So on another podcast, I’ve seen you talk about Tuesdays and Fridays about the Distros on Tuesdays and Fridays on the stainless steel serving trays.
[00:08:57] I’d like you QC Yeah, I’d like you to share [00:09:00] kind of the experience on like what you’re looking for and kind of lay out this scenario for our listeners. Uh, for what you’re, yeah.
[00:09:05] Ted Lidie: So every Tuesday, sometimes Friday. Actually I did it today cause, or, uh, yesterday, I mean, um, and today, but we’re trying to really like, nail down it.
[00:09:14] It’s. All right, I’ll start at the beginning. So, qc, every Tuesday I go to, um, our distro center, and I, uh, quality check every batch, like visually. The each individual section has a score, so it’s nose structure, color trim, and moisture. And, uh, each section is scored out of five points. So if the nose, they’re actually higher, some things are, even though it’s scored out of five, like some things are weighted higher, like.
[00:09:42] You know, a two in structure versus a two and nose like the two and nose is more important. So it’s like that could be something that automatically doesn’t pass. But sometimes a two in structure just means like, it doesn’t look normal. Because these aren’t like values that are, um, it’s a [00:10:00] perfect batch of that strain.
[00:10:01] Right. So it’s like a two can be. Uh, it’s not, the structure is different than it normally is, which would make it have a two, but that doesn’t make it bad necessarily. But if a nose is a two, that probably means like, it’s not good. It doesn’t have a nose essentially, you know, or one, um, and that would be an automatic fail, but a two in structured necessarily wouldn’t be.
[00:10:20] Um, so I scored, like yesterday there was 60 batches, so I scored every one of ’em in, uh, about a hundred pounds, and that was 600 pounds. Um, and about a hundred pounds didn’t pass. And yeah, just every week that’s about what we, that was a huge qc, but, so not every week is that much, but every single week we do a qc it’ll range from, you know, 20 to five to 30 batches.
[00:10:44] So let’s just say, and uh, it’s just about maintaining your, your quality. You know, you don’t want your customers to get something that they don’t want. If they go in and buy it and it looks different, they’re gonna wonder why. You know, and that’s just not a good process for a. [00:11:00] Consumer package, good company at the end of the day.
[00:11:02] And so what we’re doing now is we’re trying to build this out into a book so it can be taught, you know, cause right now the knowledge is just kind of held within my head, or Caleb’s head or you know, some of the other cultivation guys that have been here for a long time at a high level. And that’s just not scalable, you know, especially in other states like I.
[00:11:21] Um, would love to be able to be in Arizona and Florida all the time, every once a week to QC every batch, but it’s just not possible, you know? So now we’re, it’s like what we were doing today was picking out nugs and stuff that were fives in structure and fives in color, and fours in color, and fours in structure for the photographer to take pictures of so we can, uh, Like, put it in a little book so that I can go to Florida and say, here’s your manual for QCing.
[00:11:48] And you know, teach them, run them through it a couple times. So, um, we can have the same strict standards that we do in California everywhere, which we already do. I mean, they, they pretty much know, you know, but we just need to [00:12:00] kind of be able to, um, Give them the context. Like if we send them a new strain, they don’t always know that, you know, it’s half green, half purple, and it’s pretty normal for it, you know?
[00:12:10] Or if it’s not all purple, then it needs to go back. You know?
[00:12:14] Bryan Fields: When you say nose, you’re talking about the smell of the
[00:12:16] Ted Lidie: Yeah. The smell, right? Yeah. Is
[00:12:18] Bryan Fields: there ever any time where you feel like there’s any biases where you’re like, I don’t really like the way that smells, but I think the industry would like that?
[00:12:25] Or do you kind of really layer it on what you think is best?
[00:12:28] Ted Lidie: No, I always, there’s, I have strains that I don’t like that we put out, you know? Uh, it’s just, I understand when it comes to something like, that’s like subjective and objective quality, right? Yeah. So like a, the nose for something should be loud.
[00:12:41] It should jump out of the bag no matter what. Even if I don’t like that particular smell, um, it should still have like a certain level of loudness, you know, quote unquote that, uh, should carry through everything we put out, you know? But sometimes the strength, you’ll get a batch. It just has no-nos. Like, what happened to this, you know, there’s something that happened along the way [00:13:00] that, um, You know, made the nose a little more muted.
[00:13:03] It was dry too fast. The drying process wasn’t right, the curing process wasn’t right. There’s tons of reasons why that could be. But your job, you know, in my job as the person that holds these standards high is to make sure that I know that, you know, and, and that’s why we need to find a way to teach these things to our other sites.
[00:13:23] So I don’t have to do that all the time. Like I just got a batch from Arizona, or, I mean, I went there and I, I qcd a batch from Arizona and I was like, yeah, this is good. Um, but the next batch was way better. You know, first time they grew it. Second time you grew it, you can always see a difference in that.
[00:13:37] So I, you know, made the decision to hold back that batch and, and push the next one forward for the launch batch. Have you
[00:13:43] Kellan Finney: guys tried to tie quantitative results from like a G C M S to like what your objective opinion is Based on the nose? Yeah. I’m asking. I’ve seen this done with like, um, there’s a cake brand, but they’re making a cake and like one in 14 people [00:14:00] hated it and it was because there’s like a ruthenium in it and they were able to determine this by, instead of ha, instead of using a G C M S, they had a nose detector on the other side of the gc.
[00:14:12] Right. And so instead of running it through a mass spectrometer for the detection, they were just literally having a human
[00:14:16] Bryan Fields: and the
[00:14:17] Kellan Finney: human’s nose was the detector and they were able to determine all of the different qualities from like what was causing the cake to taste poorly based on that. So I just didn’t know if you guys had No, yeah.
[00:14:26] Ted Lidie: Thought about information. We definitely do. Uh, we, you know, with the moisture, we have an in-house moisture meter, so like that, all those, the scores out of five, it’s like really a one or a five. So if it’s not one within those, Uh, parameters of like, you know, 8% is too low. You know, 9%, nine to 10% is kind of right there on the, on the edge.
[00:14:46] Um, you really want it a little bit over 10 before it goes in the jar. Cause it’ll, it, it, like, it looks like this, like you put it in the jar and it kind of gains a little moisture from the stem from being in a small place, but then it drops off like crazy. So you want to be a little more moist than you’d [00:15:00] necessarily wanna smoke it when it first got in the store.
[00:15:02] Mm-hmm. Um, but yeah, so we. We try, you know, we talk about tying it to terpene percentage, and the thing is, is that those gas, uh, spectrometer tho those are just un, it doesn’t tell you the whole piece of the puzzle. No, you’re right. Show you the whole picture of the puzzle, is what I should say. Yeah, no, and you’re right.
[00:15:24] There’s something like 500 different cannabinoids and, and, and, uh, you know, flavonoids and. Esthers and so many different things that we don’t test for. And those things are really what give cannabis a complexity. Like terpenes tell you a little bit about stuff, but I could show you a strain that tests 1.8% in terpenes and 3% in terpenes, and you would say that the 1.8% are louder all day.
[00:15:48] And it just comes down to what terpenes are present, and it’s just not really telling you the whole picture. So that’s why human. Um, you know, the human element is still so necessary in this, [00:16:00] and I tell my partners and, and my friends all the time, like, if, if you could quantify what we did, that simply like, we wouldn’t even be here because these huge companies with billion dollar budgets would already figured it out, you know?
[00:16:14] Kellan Finney: It could be like the, the Crown Royal model, right? Like there is one person who approves every
[00:16:20] Ted Lidie: batch of Crown Royal. Yeah, I didn’t know that, but that’s crazy. Yeah.
[00:16:22] Kellan Finney: She literally like goes and tastes it and like it’s a, it’s a girl too, by the way, so Oh, that’s awesome. Yeah. She goes and she tastes it and like if she says it’s not okay, it’s not okay.
[00:16:30] And they make it massive. Right. So she’ll be like, I need 50 barrels of
[00:16:34] Bryan Fields: that six 16
[00:16:35] Kellan Finney: barrels of this. It’s pretty wild. So it could, honestly, the cannabis industry could just be, that’s the only way
[00:16:41] Ted Lidie: that it moves forward. Yeah. I mean, on top of that, it’s just like, if you have people like me, you know, in, in the business, it’s like we kind of have been doing this long enough to where we kind of showed people what is and isn’t good.
[00:16:54] You know, it’s not just like, um, I’m just an everyday person that’s setting [00:17:00] these, you know, it’s like we kind of defined this as we came up at Alien Labs and, and, you know, other brands too, not just us, but, uh, definitely played a big role in, in defining what quality is, you know, and, and still are trying to do that, you know.
[00:17:15] Oh, I can’t hear you. Is it me or No, he’s not good. Oh, okay.
[00:17:18] Bryan Fields: So my dog was barking. So nines and tens go into the jar. And do the others go into like a, a value brand? How does that
[00:17:26] Ted Lidie: work? Yeah, we have a brand called Misfits. Uh, and like it doesn’t hit the QC marks, it’ll go into Misfits, which is, you know, cheaper.
[00:17:33] It’s, it’s still great quality, but like, uh, for instance, if Y2K is green, We’ll pretty much tend to send it to, to misfits cuz it needs to be purple. That’s a purple strain, you know? So if it’s green, it’s, it’s going into misfits. Um, if the nose isn’t all the way there, it’ll probably go into misfits. Um, is Misfits
[00:17:51] Bryan Fields: and Alien labs like brand?
[00:17:53] Ted Lidie: Yeah, it’s Alien Labs. Mi It’s Misfits by Alien Labs. Just mi it’s a misfit, you know, it didn’t quite make the QC. [00:18:00] Uh, standards, but it, it wasn’t bad enough to not actually put out, it was just, you know, that quality wasn’t there to give it the premium price tag in the PR jar, you know, life. Got it.
[00:18:11] Bryan Fields: So I’m familiar with trends and I know that you are not someone who follows kind of the industry trends.
[00:18:15] And when you’re kind of making decisions, is it gut feel or another factor that helps
[00:18:19] Ted Lidie: influence research? Um, we do, we look at data and like for instance, we put out a sativa recently. I’m not like a sativa guy, you know, but the. People were loving them. You know, there was a few, like three in the top 10 selling strains, and we didn’t have any, you know, we didn’t have any haze lineage.
[00:18:36] We didn’t have any, you know, kind of what people would call sativa. I mean, I know that there’s like, you know, words that, whatever, there’s like, uh, controversy surrounding these words, but I think when I say sativa, people kind of know what I’m talking about, right. And, uh, that’s why I continued to use those words.
[00:18:52] But, um, so yeah, we didn’t have anything with like a haze that people would consider like, you know, more of an up feeling. Uh, so we put that out and it did [00:19:00] really well. And that’s like goes back to what I was saying, like, not everything I necessarily like, but I know it’s good. I don’t have to like something to know if the quality is there, you know what I mean?
[00:19:10] I, I can understand that not everything is for me and, uh, my taste isn’t everyone’s taste. And I think that’s important when you’re putting together a menu especially, is to understand that like, Your taste isn’t everyone’s taste. I had this really, you know, hit home with me with uh, clothes cuz you know, we do the apparel line and I pretty much.
[00:19:28] I’ve added some color into my wardrobe since the, since I started thinking like this, but like, I pretty much just wore black all the time. So like all the ts that came out would just be black and it’s like, oh yeah, that was like my design brain. But then when I started opening it up to like thinking like, damn, I can’t just design for myself, you know, I gotta design for everyone that buys shit.
[00:19:46] So we started adding colors in and people of color, you know, Do you notice a
[00:19:51] Kellan Finney: different, uh, do you guys launch a different menu in different states or do you notice a different, like this strain as well in Arizona, it doesn’t do so well in California? Do you guys like [00:20:00] this, that kinda stuff?
[00:20:00] Ted Lidie: Um, we try to launch, you know, every strain in every state, but like, it’s slower.
[00:20:06] Um, but yeah, like, I mean, I think people in California just kind of like get over things faster. So like a strange life cycle is like a little less than it would will be in like another state where like people haven’t experienced anything like that yet. Like, I’ve haven’t, we haven’t grown melanated in California in a long time, but in Arizona, you know, they love it.
[00:20:25] So what flower qualities
[00:20:27] Bryan Fields: do you think consumers should be paying more
[00:20:29] Ted Lidie: attention to? Freshness they on the package for sure. That’s huge. And that’s, you know, um, stores will overbuy sometimes and they don’t understand how much they can actually sell through. And then when our customer gets it, it’s like two months old, three months old, and it’s like, well that’s not, It’s not bad.
[00:20:49] I mean, you know, it can be good. It really depends on how it was stored, but, uh, generally I think premium and fresh kind of go hand in hand. You know? Are you testing all
[00:20:59] Bryan Fields: the [00:21:00] products that you’re putting out and if, if so, are blind testing, correct?
[00:21:03] Ted Lidie: Yeah, I do both blind and, uh, and knowing, um, we do blind tests like together, like the group of us will get together and do blind testing, but I still have like a pretty.
[00:21:17] I’ve Biases are always there. They’re, they really are. It’s crazy. But um, once you know that and you try to like, choose around it, that’s why it’s important to do both things, right? Like we’re just about to come out with, uh, indoor vape pins and. You know, we thought the temperatures were good on the p on the product, and then we did a, a blind test with all of us and it, we determined that we needed to lower the temperature a little bit and it was just a little too harsh.
[00:21:41] But that was like one of those things where I thought it was good enough and then we learned that, you know, to be better. We all kind of came to the consensus that it could be lower through the blind testing. Have you, have you always done the
[00:21:54] blind
[00:21:54] Ted Lidie: testing as a way to evaluate? No, that’s new. We, we have an r and d team led by, uh, [00:22:00] Jonathan Carol, and he’s just great.
[00:22:01] He’s comes from Cornell, um, and he really put this together for us. The whole trials thing, you know, the, um, it’s, I love it. It’s awesome. It’s very fun. It’s just different. And then I think, like even just qc, like, it’s so funny how. Like, I see people throwing around these words like QC and r and d and I don’t feel like they did ever before we started talking about it.
[00:22:25] You know, like, especially qc, like, I don’t think that was really, not to say it was non-existent, but like the way people talk about it now is so like, oh yeah, like Alien Labs started doing QC and now we, we talk about this a lot too, you know, and I, I think at where we stand, kind of, that’s our position in this industry.
[00:22:41] Like we do things and then they just kind of become standard for people that are trying to scale their company and, uh, Make quality products, is it
[00:22:51] Bryan Fields: challenging to, to try to scale and grow high quality
[00:22:54] Ted Lidie: flour? Yeah, it’s very challenging. I mean, I would say that like, we’re not the [00:23:00] only ones, but we’re definitely the best at it.
[00:23:03] Like they’re, I don’t know any other company that’s scaled to the size that we are that’s maintained the type of quality that we have. Um, and it has not been easy, you know, it takes a lot of, um, Not accepting, you know, anything less than the best. And that can, I’m not always the most loved person in our, our company, you know, because I have to be the guy that’s like, this isn’t good enough.
[00:23:28] I’m sorry, but like, it’s just not, you know? And, and, uh, I’m okay with that because like people, our name is, you know, pretty synonymous with quality in this, in these markets. You know what I mean? people ever be able to like, I don’t know if it’s possible to scale the quality that you can do in like your garage with a four lighter to like, you know, multiple states and multiple thousands of lights.
[00:23:53] Like, I just don’t know if, if, if it is, I think we’ll be the first people to do it, but as of this moment, like I [00:24:00] still think, um, you know, people in the black market are growing super fire. You can just give individual love to each plant. It’s just, it’s, it’s crazy. And I, I love that. I mean, I love That’s great.
[00:24:11] You know. What do you think
[00:24:13] the
[00:24:13] Kellan Finney: biggest challenge is to scale from the four lineer to like, that you guys
[00:24:17] Ted Lidie: have experienced and, um, just dynamics within, like, everything’s more expensive now, so you have to get the shit out. You have to turn and burn your rooms. Like there’s no waiting, you can’t, you know, drive or maybe as long as you want it.
[00:24:32] Um, or, you know, individual hand watering is always gonna be, you know, probably better in my opinion than, uh, Just cuz of the little spouts that you put in there, the drippers, you know, you’re not really getting that whole surface area wet. And really the drying and curing, I think is the toughest thing.
[00:24:52] And then, you know, waiting on test results and, and then jarring it and having it sit in places where you’re not in control of the environment. You know, [00:25:00] those jars that we put our weed in, they’re not like, You know, environment proof, you know, so eventually they’ll equalize to what the humidity and the temperature is where they’re stored, you know, which we’re not in control of.
[00:25:13] So that, that’s tough. But when you have four lights and you come off with, you know, eight pounds, like those go to the people that they smoke, that smoke it, you know, pretty much right away. There is no waiting period. They’re not sitting on a store shelf, you know, degrading. And also the freshness. Like they’re not, if you have eight pounds, you could sell one pound to eight different people and those things are gonna be gone in two weeks and then, you know, in two weeks we’re probably not even on the shelf yet from being packaged, you know?
[00:25:41] So the quality, like I said before, the quality and the freshness go hand in hand. And. The black market is always gonna win when you’re regulated as heavily as some of these states are in, in that regard, you know, in regard to freshness,
[00:25:53] Bryan Fields: you think that’s misunderstood by, you know, let’s say most of the people in the industry or people outside the industry, they just don’t recognize how many steps go [00:26:00] win and some of the challenges with rowing, high quality flour.
[00:26:02] Oh
[00:26:03] Ted Lidie: yeah, definitely. They just, you know, they think it’s the same and it’s just not, you know, we have to wait for weeks and move things. You can’t, you know, if you don’t have your, uh, If you don’t have a distribution in your cultivation center, then you, it has to be moved. So you have to pick it up and put it in a truck and move it.
[00:26:21] And that’s just all different, you know, temperature and relative humidity going up and down and just then it take it to the vitro center where you store it, you know, cool. And package it up. And then, you know, it goes to a store or you know, another distro center. And then that’s just three touchpoints where you’re going from A to B with a, with a, in, you know, a home grow or you know, something like that.
[00:26:42] It’s not like so many touchpoints. How
[00:26:45] Kellan Finney: long are, how long away or how far away do you think we are from like, uh, an experience where you can go to a, a facility where they’re growing the cannabis, they cut it, you can consume it right there. Kind of like an all-inclusive experience, if you will. You know, I’m thinking of like Sierra
[00:26:59] Ted Lidie: Nevada, [00:27:00] if you ever been there.
[00:27:00] Yeah, no, totally. You know, I think Maine just released some new legislation that like, makes it more like a, uh, Like a vegetable or fruit. Yeah. I’m trying to think
[00:27:09] Kellan Finney: of like that
[00:27:09] Ted Lidie: experience, you know? Yeah. I, I have this idea, you know, this, this idea for an experience that’s like crispy kreme, like you get
[00:27:17] Bryan Fields: exactly.
[00:27:19] Ted Lidie: Hand rolled joints that were rolled in ground that day, and there’s a fucking light on in your store window that’s like fresh rolls. You know what I mean? And like there’s no state right now that you could ever do that in because it’s just not, you have to grind, you know, you roll it up, then you send it to testing and there’s all these different steps where you can’t make things as fresh as they need to be.
[00:27:39] But like, how cool. And, and that’s why I think, you know, A big part of the reason why the traditional market still exists and still beats the, the recreational market because they’re just, the regulations artificially add time. They, they keep you from doing things that are like, like that, you know, where you can get fresh rolls or freshly pressed rosin.
[00:27:59] Like [00:28:00] imagine that, like a jar where you, you freshly press your rosin. I remember in the two 15 days, jungle boys would press your shit right in their store lobby. You know what I mean? And you’d get that right then and there and, um, I think we need more of that, especially if we’re gonna see more innovation.
[00:28:16] I feel like, you know, as, as, um, as much as it’s regulated that it all, that stifles innovation. So like, we’re gonna be here where we’re at for, you know, quite some time unless things change in that regard. You know, these states kind of. I was hoping that New York did a better job of learning from the mistakes of some of these other states, and it just doesn’t seem like they did.
[00:28:43] And when I see, you know, my boys out in New York going to real, um, licensed stores just to check ’em out, it’s like, oh, $110 for a dis distillate blue Dream cartridge. And, you know, $70 for dis distillate gummies. It’s like you guys dropped the ball. You had every. Colorado is, [00:29:00] and California to an extent also have like excuses for being bad, right?
[00:29:05] Yeah. And like these new states that open up, they don’t have an excuse. They’ve seen it done and they’re not learning from that. And I think that’s like the, one of the, the cons, right? Of the state by state process instead of, um, just the whole entire United States saying, Hey, okay, this is what we need to do, even though they would fuck it up too.
[00:29:23] So there’s no doubt about that, but at least, um, if. Each state isn’t different. That makes it hard for, you know, like a operators in each state to go. Cuz like Florida is so much harder to, not harder, but it’s just so much different branding. Like you have to have a white jar with black, uh, you know, font and there’s no logos and none of that.
[00:29:45] Where in California we’re pretty much free to do whatever the hell we want to do, you know? So it’s just like, if. That’s another thing that just like isn’t great for what we’re trying to do here. Like having to go to each state and learn those regulations and, and take what we do in California and turn it [00:30:00] into something that’s, um, you know, legal in Arizona, for instance, just like it’s.
[00:30:05] The state by state process just isn’t great.
[00:30:08] Bryan Fields: It, it is not great. And the one area I will push back on for New York is that I don’t think we have opened up yet. I think when you have only five stores open, I don’t think you can classify yourself as opened up yet.
[00:30:18] Ted Lidie: But even just though, like not having indoor licensing yet, like what that’s doing is because they’re not gonna have a lower price product.
[00:30:26] Like if they set out and it was in okay, indoor licenses or go greenhouse licenses or go outdoor licenses or go. You, they would’ve settled at like 80, you know, 50 30 or whatever, like, like they did in California. But now what’s gonna happen is greenhouse weed in New York is $80 an eighth, right? I mean 80, 90 bucks an eighth.
[00:30:46] Well, how much is indoor gonna be? Hundred 20 bucks? You know what I mean? And like that we’re going the wrong direction. Yeah, exactly. And that is $15
[00:30:56] Bryan Fields: a
[00:30:56] Kellan Finney: Colorado by two eight you could pay for your plane
[00:30:58] Ted Lidie: ticket, you know, and, and [00:31:00] foundationally that is baked right in, and that’s wrong. That’s just how it, it shouldn’t have been done that way.
[00:31:04] Right. They should have had the foresight in understanding to, uh, to stave that off where they, you know, opened up either, you know, don’t do this trickle down where it’s like, oh, one store gets to open every three months, you know? Or, um, you know, versus somewhere like California where it’s like, okay, you know, we’re gonna open up the whole state and start giving licenses where still there’s not enough stores.
[00:31:28] I think there’s only like a thousand, but it’s much better than having five where, and then, you know, the, those one stores get all the press when they open up from huge places. Cuz New York’s just a media, you know, playground when, you know, a year from now when there’s. 700 stores, it’s like no one’s gonna really care.
[00:31:48] So it’s like, it, it seemed rigged in a way that wasn’t, like, not good for the consumer. You know, I have a, a random
[00:31:55] Kellan Finney: question. So you operate in Arizona, which is probably as [00:32:00] starkly different from a, a market opening perspective than New York. Has there been any like catastrophic. Errors or, or hiccups when they transition because they transition in 70 days to a
[00:32:12] Ted Lidie: wreck market.
[00:32:13] Right? Yeah. It wasn’t too long ago either. Has there been any like
[00:32:15] Kellan Finney: really big problems from that quit transition?
[00:32:18] Ted Lidie: The difference, the difference between medical and recreational is theater, you know what I mean? Like, it’s not, it, it, it isn’t really, it’s like. The people that made the rules made it slightly different and that’s it.
[00:32:31] You know what I mean? So Arizona was a good example of a, a place that went from rec to or medical to rec, like really easily. And I think, um, we’ll see what happens in Florida this year. I think maybe they’ll try for rec. I think they’re close or they already gathered enough signatures to get it on the ballot.
[00:32:47] Do you think that transition will be as smooth as Arizona’s? I don’t know. It’s tough to say dude. Air or Florida’s a a different beast, you know, especially with. The government that is in place, they’re, you know, [00:33:00] they’re, they don’t, it’s gonna be an interesting time for sure. You know, I like, what I do like about Florida though, is if you get your license, you’re good.
[00:33:08] You just can pop up your stuff. You don’t have to, you know, so in that regard, it’s like a better. Licensing system, but then there’s no, you know, no vending essentially. You can’t just be a cultivator and, and sell the stores. You have to be fully ver vertical, which is tough. And then obviously the price of the license is just insane.
[00:33:26] Outrageous. So the good part for you
[00:33:29] Bryan Fields: in Florida is that you’ve got a pretty premier partner, and truly I’d like for you to talk about kind of that partnership and why you thought that was a good one to,
[00:33:36] Ted Lidie: to take. Yeah. You know, truly it was just proven that they can operate and just like us, we, we wanted to be able to, um, Do what we do best and do, you know, have the best product that we could possibly have reach the most people.
[00:33:51] Which, uh, you know, if we don’t have a lot of capital, we’re not that kind of company where we’re out raising and just, you know, spending money like that. So [00:34:00] going into situations that we can do the most with the least is really like what we want to do. And in Florida and truly, truly just helped us get there in Florida.
[00:34:11] You know, they have 120 something stores that are just, you know, gray and people out there love California cannabis. It, it, it’s a good match for us for sure.
[00:34:21] Bryan Fields: Absolutely. And one of the talking points we’ve seen a lot is that MSOs grow shitty pot. Now with your partnership with truly can we expect that Alien Labs quality to kind of be in Florida?
[00:34:30] Yeah, definitely.
[00:34:31] Ted Lidie: You know, we, um, we sent some growers out there, they work for Tru Leave now, and, and we, they, Uh, built our buildings to our SOPs, our spec, our cur, and dry to our spec. And, um, it’s just, it’s, it’s just different, you know? Uh, what we do is just different and, and that comes from just that knowledge of us doing it for so long.
[00:34:52] It wasn’t, we learned the hard way. You know, we set up and failed and set up and failed until we figured it out. Right. [00:35:00] And, uh, I think we also just helped out truly in that regard, but kind of. Giving them some tips and pointers. You know, I think their quality, um, has gone up since we’ve been working together too.
[00:35:12] Do,
[00:35:13] Kellan Finney: do you guys have fundamentally different, like cultivation, SOPs if for, for instance, in Arizona, I. Desert, very dry versus Florida. Very, very humid. Right. So I know you, you’re cultivating indoors, but does that change
[00:35:26] Ted Lidie: the spectrum? Uh, not really. It doesn’t really change too much. You know, you, you might need more humidity or, uh, more dehumidification in Florida, or might need to add some in Arizona, but it’s pretty much the same everywhere.
[00:35:40] Um, testing is kind of different everywhere too. You know, it’s funny to see. Strains in, in California, go in 30, mid thirties, and then that same strain in Arizona will be 22. And it’s like, this makes no sense, but it does make sense because, you know, it’s, it’s the, the testing labs, like [00:36:00] they don’t have a standard, so there’s no, if, if the testing standards were all over the place in the state, um, I mean in the, if the testing standard was the same in the whole country, you would see the similar numbers.
[00:36:12] But since like some. States required to do this, and some states required to do this. You just see different numbers everywhere. It’s crazy.
[00:36:19] Bryan Fields: Just quickly going back to New York, I just wanted to get your perspective for those who’ve been in the unlicensed stores and have seen your products everywhere. Is that something that you feel good about, bad about?
[00:36:28] Not really sure, but it’s one where I’ve got friends all the time who say, oh my God, I just scooped this alien lab product. But I understand with your feeling of quality must be challenging and knowing whether or not it’s a legitimate product or not, how do you feel about that?
[00:36:39] Ted Lidie: Yeah, I like, I mean, I don’t mind at all.
[00:36:41] It’s cool that people were sought after like that, you know? But a lot of that is, Fake. And that’s tough. You know, it definitely hurts your bottom line when there’s people out there I see all day, every day people sending me like, I bought this cartridge. I’m like, where’d you get it? And they’re like, oh, I got it here.
[00:36:54] And I’m like, send me a picture of it. And it’s like, oh, well that’s not even real, dude. Like, we don’t make full gram all in ones. That’s a [00:37:00] problem. Or that’s a uh, a common tell. Like I see full gram all in ones a lot, and it’s like, we don’t even make those here in California, dude. We don’t make full grams.
[00:37:08] So, Um, if it’s a full gram, it’s fake. I see knockoffs of the fonts off, but then I see the real stuff too. You know, people come to California and buy their store out and take it home with them, you know, so it’s just crazy. Um, but I think it’s cool. I’m, I’m not, you know, we don’t hate it. You know, prime in the market for when we actually come there.
[00:37:26] Bryan Fields: You know what I mean? Yeah. Ex I mean, you’re building, you’re building brand presence in a state that is desperately seeking out
[00:37:32] Ted Lidie: California products. Yep, exactly. And California products, you know, there are the best, it’s, there’s no competition. I, we talked about this a little bit, um, before we got on, but, uh, you know, it’s different.
[00:37:43] People don’t understand that like California’s had this market and people have sought after the weed for. Years, 30, 40, 50 years. You know, it’s not just like something that is new because California legalized or whatever it, it, it’s well known as having the [00:38:00] best, the best stuff and, and the most innovative strains and, you know, the most innovative everything in it.
[00:38:06] And that’s, you know, can’t really be replicated by another state. You know, like Oregon, or no one’s asking for Oregon packs, no one’s asking for Oklahoma packs. You know, they want the, the California stuff. So, um, I think, well it’ll be really interesting when that opens up, if it opens up federally, um, to see where the price of, you know, sought after California cultivators and brands, you know, having fresh, you know, New York has a store that gets.
[00:38:34] Fresh deliveries every morning of, you know, connected and Alien Labs products. Like, I think that’ll probably be a pretty a destination. You know what I mean? Can we beat one 20 an eighth? Yeah. I don’t know, man. That’s crazy to think about, but, It’s gotta be
[00:38:48] Kellan Finney: good margins, right? If you’re on the other side.
[00:38:50] Yeah. I mean
[00:38:51] Ted Lidie: it, it must be, um, for sure. But like, whew, I don’t know. It’s interesting. Red 60 Scale, you learned that like one 20 and eight is cool, [00:39:00] but you know, you’d rather just sell all your shit for fucking 80 than have it sit, you know? Sure, sure. Let’s do a quick
[00:39:05] Bryan Fields: rapid fire number one homegrown tip.
[00:39:09] Ted Lidie: Oh.
[00:39:10] Um, Have enough dehumidification and, and air conditioning. The, the environment is important. Most important, maybe
[00:39:20] Bryan Fields: true or false, you had a brand called Revolution.
[00:39:23] Ted Lidie: True. It was like the first brand I ever made, uh, was like when I was in sophomore, maybe freshman
[00:39:29] Bryan Fields: year. I don’t know. I like it. Sativa, indica, hybrid.
[00:39:32] Think it should stay or go?
[00:39:35] Ted Lidie: Um, I think it should stay because it’s just already known and I think like trying to come up with new like. Nomenclature for something like that. Just, uh, who has time for that? You know, customers, like our customers don’t really care to be educated that much anyway. Some do. I mean, you know, very few.
[00:39:54] But, um, like just stick with what, you know, stick with people already understand it. [00:40:00] It, if, if we’re gonna educate and, and push something like that, it should be on, you know, THC percentages and stuff like that. I, I think it’s just a fool’s errand to try and. Um, change naming conventions at this point in the, you know, dream smoking
[00:40:16] Bryan Fields: session.
[00:40:16] Three people dead or alive.
[00:40:18] Ted Lidie: Ooh, that’s a tough one, man. Um,
[00:40:24] damn, I don’t even know. Holy shit. Steve Jobs for sure. Um,
[00:40:33] Tupac. And we’ll just throw Biggie in for my New York fans, you know, I love it.
[00:40:41] Bryan Fields: Besides OG one strain for the rest of your life,
[00:40:44] Ted Lidie: um, Skittles, what’s the
[00:40:47] Bryan Fields: strain you’re giving aliens on their first experienced
[00:40:50] Ted Lidie: to earth? Uh, og for sure, without a doubt. Uh,
[00:40:58] Bryan Fields: C bn Alien Lab [00:41:00] Edible in the future?
[00:41:00] Ted Lidie: Yeah, we were working on one for a while.
[00:41:02] Definitely. It’s there. I use C BN a lot. I I every night. I mean, I u uh, I two, uh, I think it’s called Conna. They have a five milligram c b n five milligram, C B D five milligram thc. That’s really good. And then, um, the. I don’t know what the name of the brand is, but they’re called Knockout and I think it’s 20 milligram cvn, 20 milligrams tc.
[00:41:24] And they, it just makes you sleep really well. It really works. It’s effective as hell
[00:41:29] Bryan Fields: under the radar state you have your eye on.
[00:41:32] Ted Lidie: Hmm. Good question, man. I don’t know. Uh, Maine, I think that new legislation to Maine is pretty cool. You know, if I just, I don’t know if it was released recently. I just read about it this morning though, but it just treats it like a agricultural product, which is how it should be.
[00:41:48] You could pop up at farmer’s markets with your homegrown, you know,
[00:41:51] Bryan Fields: be sick. What is the most expensive lesson you’ve learned in cannabis?
[00:41:56] Ted Lidie: Ooh, choose your partners wisely. [00:42:00]
[00:42:00] Bryan Fields: What do most not know about
[00:42:01] Ted Lidie: Anion Labs? Um, man, I don’t know. I think we’re. Probably that we just start really started from nothing and came from nothing.
[00:42:14] You know, we both, me and my former partner came from just poor households. We just really made this from nothing. And if, if we can do it, I, I think the big lesson that I’ve learned is that you can do things if you just, you know, put your mind to it. And really, I, that’s so cheesy, but it, it is true. And especially when you see what Alien Labs has done from, you know, not having much, uh, it’s something to believe in, you know?
[00:42:38] When you got started
[00:42:39] Bryan Fields: in the cannabis space, what did you get? Right? And most importantly, what did
[00:42:42] Ted Lidie: you get wrong? Um, we got right the quality, but we got wrong. Just, um, damn. I don’t know. We did really good at both things. It’s crazy. Both the main things that I think about, but not having the foresight to like, save money and, and, uh, you know, we were trapping.
[00:42:58] We weren’t like, [00:43:00] Trying to make it legal and trying to go legal like that a a or, you know, we didn’t know how REC was gonna play out. So it’s just like, if you’re doing this and you’re having a good success, like save some money so you can, you know, not have to get investors and not have to, you know, get percentages out and those things cuz that can, it went really well for us with connected.
[00:43:21] But I’ve seen, um, And I’m sure we all have seen like plenty of times where it didn’t work. I, I think we’re like the, you know, the 1% in that, in that manner,
[00:43:31] Bryan Fields: you could solve your experience in a main takeaway or lesson learned to pass onto the next generation. What would it be?
[00:43:38] Ted Lidie: Man, do what you love and, and just, you know, uh, be confident in it.
[00:43:43] And that’s really, that separates people for sure, separates businesses. Um, you know, stand on what you’re doing.
[00:43:52] Bryan Fields: Prediction time. Ted, when interstate commerce happens, does this alter how you think about branding and [00:44:00] positioning for newer consumers? If so, how? If not, why not?
[00:44:05] Ted Lidie: Um, not so much. We haven’t really been the type of brand that like changes who we are for that type of thing.
[00:44:13] You know, we are, we’re, we’re known for quality and I think quality will stand a anywhere, any state. Um, but I think if, if I were to build like a newer brand, uh, in, in that case, like if, if I went and out and built a new brand, it would just be more appealing to women. I think women are just left out of this a lot.
[00:44:33] Not to say that like alien laps is a masculine brand cause I don’t think it is, but I think that’s part of the success, right? Is that, is that it’s kind of like, um, Gender neutral, if you will. Uh, but I think women, you know, they’re, they’re a big consumer and they’re the next big consumer base. And, and companies should be catering to them in a way that’s non pandering.
[00:44:51] Like, I don’t think, like I would make a brand for women, but I think that I would, um, encourage and, and, uh, you know, help a [00:45:00] woman make a brand for women. I think that’s just a big thing that is being missed right now in our, um, Because there is some, right, but it, it, it’s mostly like corporate, corporate se corporations saying, uh, we need to make a brand for women, you know, and not like empowering women to make brands, which is what I think that we should be doing.
[00:45:25] Well said, Kelly.
[00:45:28] Kellan Finney: Um, I think, uh, the only big transition I think that interstate commerce could potentially have on brands is in terms of like Appalachians. Right. And so I think that, uh, like with champagne, right, like that whole lawsuit and everything, like technically champaign is that grape that’s grown in Champaign, France, right?
[00:45:50] And makes sparkling white wine, right? Uh, right. And I think that that
[00:45:56] Bryan Fields: will happen with cannabis
[00:45:57] Kellan Finney: eventually. Right? Especially with interstate [00:46:00] commerce. And I think that that. Just plays into brands like Alien Labs who have that kind of founder story from, uh, like, you know, an Appalachian, like the Emerald Triangle, if you will, who’s been doing it for multi-generations.
[00:46:14] I mean, like some of the, the conversations we were having before, right? In terms of a multi-generation family farming the same land. Like that’s, that’s the American dream. And just because it’s cannabis. Yeah, it’s kind of looked at in this like, This kind of weird lens, if you will, and, and it shouldn’t be,
[00:46:31] Ted Lidie: you know what I mean?
[00:46:32] Like I agree.
[00:46:33] Kellan Finney: You know, you go just on the other side of the Sierra Nevadas over to Sonoma and there’s people that have been growing. Just a different type of plant for multi-generations on land in the hills too. You know, the only difference is one makes alcohol and one makes cannabis. So I don’t know.
[00:46:49] That’s my opinion on the whole interstate commerce. Uh,
[00:46:52] Ted Lidie: yeah, the Terri Air or whatever it’s called, like the, you know, Humboldt Cannabis will be hugely sought after. You know, hopefully if [00:47:00] the industry isn’t decimated by then, um, yeah, hopefully if there’s still growers up there. Yeah, exactly. Because that, that, that area is suffering.
[00:47:08] Man. So bad. So bad. It’s sad to see, you know, someone that I was going there my whole life, you know, and uh, I go there now, I’m like, damn, I hope you guys can survive, like, and show the bear some support people. Yeah.
[00:47:23] Bryan Fields: Agreed. I, I think in my opinion, that when interstate commerce happens, that companies are gonna really need to lock in on who they are and what they do best better than anyone else.
[00:47:32] And I think what you said, Ted, about not being the most popular person in the room, I think is incredibly critical for adhering to that high quality standards when people get an alien, that product, because I think there are a lot of companies out here who are still trying to figure it out, and that’s gonna lead to.
[00:47:45] A, a big mass extinction for those companies who don’t do anything well, they’re just kind of like navigating along. And I think understanding your North Star what you do better than anyone else. And sometimes that means making a not popular financial decision, especially for a company like yourself where operates in California, [00:48:00] I think is really gonna want
[00:48:01] Ted Lidie: separate the Yeah, I completely agree.
[00:48:03] A lot of these companies are doing like a bunch of things not that great and Yep. Once there’s actual competition out there, you’re gonna have to focus on what you do best, like we do, which is just flower. And, you know, the, the rest of the things come with, with having great quality of flour, but if you’re trying to grow and, you know, um, make edibles and produce extracts and have hundreds of stores, it’s gonna be tough once there’s more competition out there.
[00:48:27] Absolutely.
[00:48:28] Bryan Fields: So for Ted, for our listeners, they wanna get in touch and they wanna buy Alien Labs products. Where can they find
[00:48:32] Ted Lidie: you? Uh, we’re in, you know, 500 stores in California. We’re in damn near every store in Arizona. We’re in true leave stores in Florida. Um, our website has apparel, merch more, more, uh, places to find us for the, the cannabis side and, um, you know, dm me on Instagram, return to the Alien or Alien labs.
[00:48:53] Both of ’em, you know, they get to me if you have questions. I’m always, I try and respond to every dm, so Cool. We’ll link it up in the
[00:48:59] Bryan Fields: show [00:49:00] notes. Thanks for taking the time.
[00:49:00] Ted Lidie: This was a lot of fun. Yeah, no problem man. That was great. Thank you. Thanks for.
Editors’ Note: This is the transcript version of the podcast. Please note that due to time and audio constraints, transcription may not be perfect. We encourage you to listen to the podcast, embedded below if you need any clarification. We hope you enjoy!
Nature vs. Nurture plays a critical role in cannabis. Understanding how and why these traits are expressed can help the cannabis industry how to create a consistent, reproducible product.
This week we dive into cannabis genomics with Dr. Daniela Vergara, Founder Agricultural Genomics Foundation. We discuss
Theory behind breeding Defining synthetic plant-based or full synthetic Minor Cannabinoids Cannabis genomics And so much more
About Dr. Daniela Vergara
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Dr. Daniela Vergara is an evolutionary biologist, data analyst, educator, scientific writer, and public speaker. In addition to her multiple publications, she founded and directs a non-profit organization, the Agricultural Genomics Foundation (AGF; AgriculturalGenomics.org). AGF aims to make hemp and cannabinoid science available to a broad public. Vergara has been part of e scientific teams at private companies including Steep Hill, Inc. who are a global leader in agricultural testing, and the biotech company Front Range Biosciences.
At Eighth Revolution (8th Rev), we provide services from capital to cannabinoid and everything in between in the cannabinoid industry.
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[00:00:00] Bryan Fields: What’s up guys? Welcome back to the episode of The Dime. I’m Brian Fields with me as always, this Kellen Finney. And this week we’ve got a very special guest, Dr. Daniela Bera, founder of Agricultural Genomics Foundation, Dr. Daniela, how you doing? Good. How are you? Excited to talk to you, Kellen. How are you doing?
[00:00:19] Kellan Finney: Doing really good. Really excited. Excited to talk to Daniella, uh, especially cuz it’s a, a science-based episode finally. So
[00:00:26] Bryan Fields: it certainly is. I think it’s really important though, we get to exactly where Dr. Daniella’s current location is so that we can make that little East coast, west Coast Palo. So, Dr.
[00:00:34] Daniella, your location please. Bloomfield,
[00:00:38] Dr. Daniela Vergara: New
[00:00:39] Bryan Fields: York.
[00:00:40] Kellan Finney: I think we were talking though before the show, and she might have some loyalties on the west coast though
[00:00:47] Bryan Fields: she certainly might have some loyalties and experience on the West Coast, but her current location would put her on coast team, so that is another one for us.
[00:00:54] So you’re, yeah, I’m making up the rules as we go for, I like it. I [00:01:00] like it. You know, Dr. Danielle, if our listeners aren’t familiar by you, can you give a background about
[00:01:04] Dr. Daniela Vergara: yourself? Uh, okay. Where, where do you want me to start? Like, I am Colombian originally. Um, and I moved to the US to do a PhD in evolutionary biology.
[00:01:19] I then met, who’s now my husband, and decided to stay. And when, and we moved to Colorado. I did a postdoc there at the University of Colorado in Boulder. I still have a lecture and researcher appointment there. Um, and that’s where I started studying cannabis. It was by chance I was gonna study sunflowers, but you know, it was a Friday night with my husband and his friend, and then it turned into cannabis that Friday night.
[00:01:51] Um, and, uh, From then I started doing genomics, um, and bioinformatics, which was the lab that I was [00:02:00] in at Nolan King’s lab at U Boulder. And he and I still have a strong collaborative environment and a grant that’s ongoing with one of his, uh, graduate students. And then a, on late 2021, I moved to New York State.
[00:02:14] Okay. Before that I worked for the private industry. I was funded by Steep Hill Labs, so I worked for Steep Hill Labs for about two years. Um, while doing research at CU Boulder and then the r and d team from Steep Hill got purchased by Front Range Biosciences, so I moved to Front Range Biosciences and continued doing research and then there were some financial issues with Front Range and I had to find a job.
[00:02:40] I looked for a job, found this one at Cornell Cooperative Extension, and moved for three days between Colorado and now where I am in Bloomfield,
[00:02:50] Bryan Fields: New York. I love it. So for our listeners that maybe are un familiar about genomics, can you give them the, the basic definition of what that means and how it work fits into cannabis?[00:03:00]
[00:03:00] Dr. Daniela Vergara: Absolutely. So genomics is the study of entire genomes, right? So a genome is all of the collection of dna, n a, of genetic material of an organism. So all of the, you know, agcs, you know, ninth grade, like all of your d n a, all of the collection. So one genome. I have a genome of myself, right? I have my genome, right?
[00:03:19] Brian and Kellyann, they have their own genomes. If we compare the three genomes, we’re comparing our three genomes. They’re gonna be similarities and differences. Um, and then what I did was that I looked at genomes in cannabis, so hemp type, marijuana type, and I look at differences and similarities. Steep Hill was very interested.
[00:03:40] I I come, my PhD was on. Sex. Why is there sex? Why do organisms reproduce sexually instead of cloning themselves? Like that was, and this was a question that Darwin himself asked, like, why would organisms not clone themselves? And so my thesis was on that. So when I [00:04:00] jumped into cannabis, I was coming with that mindset and I was interested like, oh, it has monia, so, so what people call Hermes.
[00:04:07] So it has monia individuals and males and females, and that was what I was interested in. But, you know, I started being paid by the industry and Steep Hill was like cannabinoid jeans. So I started doing cannabinoid jeans, which I absolutely love. Like at the beginning it was like, oh, I don’t wanna, but then I was, this is so fascinating and I absolutely love them.
[00:04:29] So I really know a lot about cannabinoid jeans. Um, and that’s what I did for a, for, I have several papers on cannabinoid jeans. That’s, so when we
[00:04:37] Bryan Fields: say
[00:04:37] Kellan Finney: cannabinoid genes, are you referring to the sequence and the D n A that codes for like the enzymes that make these cannabinoids? Is that what you’re looking
[00:04:46] Dr. Daniela Vergara: at?
[00:04:46] Absolutely. That’s a great way to say it. Yeah. The enzymes that make T H C A or C B D A or C B C A, yes.
[00:04:54] Bryan Fields: Why would
[00:04:55] Kellan Finney: that be valuable to like a steep hill? Just kind of like filling in the P puzzle pieces, you know what I mean? Does it [00:05:00] help with economics for
[00:05:01] Dr. Daniela Vergara: them? Well, and at the end of the day, if you want to, for example, silence the gene for hemp, you don’t want hemp to produce any cannabinoid.
[00:05:08] Do you need to have the sequence to know where do I silence it or how do I silence it? Or if you want to enhance it, You need the sequence. So because at cannabinoids are the most valuable thing from marijuana, right? Both medically or recreationally. That was the thing. And we didn’t know much about the cannabinoids at the time.
[00:05:31] Now we know much more, but that’s how I started in my cannabis stuff, was mostly cannabinoids.
[00:05:38] Bryan Fields: So give us, give us a breakdown on one of the things that surprised you when you started getting interested in in it. So in
[00:05:46] Dr. Daniela Vergara: cannabis in general or on Canada? Yeah, in cannabis in general. So in cannabis in general.
[00:05:51] Okay. So first, my dad is a university professor. I grew up in a university. I’ve never left a university. I come from academia. [00:06:00] My uncle is a PhD. My cousin’s a PhD. Like that’s what my family did. You know, like I didn’t know that you could do other things in life until I got into the cannabis industry where I met, for example, for the first time, I’m marketer.
[00:06:13] Or, you know, there were, uh, architects or, right. And uh, and, and that was like, oh, this is an industry, this is like, my mindset completely shifted. And I don’t know if you guys have prospects with Marine McNamara. Uh, from cannabis trainers in in Colorado, she taught me how to talk to people. Like I was coming from academia and I was used to talking to academics.
[00:06:39] Yeah. And I didn’t know, and besides English is my second language, so I didn’t know that much of the jargon from academia is jargon from academia. Like people do not really. Use those terms. So it was Maureen that, that taught me like, okay, now you need to talk to the rest of the world. And, and so she, she taught me how to, how to do that.[00:07:00]
[00:07:00] And it opened my, my world basically like, you know, like besides academia, there’s other things in life. I, I didn’t really understand that until working in the cannabis industry.
[00:07:11] Bryan Fields: So are, are breeders switching, slightly, switching gates are breeders when they cross breeding the, the different strains, are there an understanding of what they’re doing?
[00:07:18] Is it guest test revised? Take us through the process now and what you think should be actually
[00:07:22] Dr. Daniela Vergara: be happening. Okay. Yeah, that’s a great question because at the end of the day, evolutionary biology is the, um, theory behind breeding, right? You’re selecting for plants whose phenotypes you like, whether it’s THC or whether it’s height or whether it’s.
[00:07:39] Lemon smell. So when you are breeding for a plant, you’re choosing individuals that have physical characteristics or phenotypes that you desire and those phenotypes, so those physical characteristics come usually in parallel with some sort of genomic trait, right? Like it for there, there’s some characteristics that are very, [00:08:00] very, Um, heritable.
[00:08:02] So heightened humans is the perfect example. If your parents are tall, it’s likely that you’re gonna be tall. So if you select the tallest individuals, it’s very likely that you’re gonna have tall offspring, right? In cannabis, ideally, we would be able to do that and we would be able to, um, associate physical characteristics with particular genomic locations.
[00:08:25] And we know, for example, for THC that there’s a particular gene. A particular sequence that gives you the possibility of having a lot of THC now every single physical characteristic. Is a, is a product of genes and environment, so nature and nurture. So if you grow your, your cannabis in, in shitty environments, it’s probably not gonna produce as much cannabinoids as it could produce if you grew it in a very good environment with good lights or good nutrients.
[00:08:55] So, so yeah. So the idea of starting the genome is, at the end of the day, being [00:09:00] able to predict, uh, what’s gonna happen. Is your plan gonna be a female or a male? If it’s gonna be ha have high THC or not for hemp, for example, if it’s gonna produce big, eh, size seeds or uh, the fiber, is it gonna be tall or all of those things, right?
[00:09:19] Bryan Fields: So are, are breeders now, when they make, looking into making those decisions, are they thinking about that and then are they making tests in order to try to correlate that? Or is it kind of a, a guest test for advisor where they, they, they take two, look at two different strains and they say, these two we think are the strongest, and then we cross read those.
[00:09:34] Do you have any idea on how that goes today typically, and what you think people can do in order to do a more effective job?
[00:09:40] Dr. Daniela Vergara: So there are some traits, you know, whether. Your plant, you, there are some sex tests, for example, that you can, you can know whether your plant is gonna be a male. So yes, if you’re breeding and you wanna know whether that plant is gonna be a male, you can do a sex test.
[00:09:59] It doesn’t tell you if [00:10:00] it’s gonna be asis. Right. If it’s gonna be a Herma or that, or if you, if you stress it out, if it’s gonna produce Poland. But yeah, for males you have, we, there is a possibility of doing it for THC also. Flowering times, there’s also, so, yes. I don’t think that breeders for marijuana in particular have, there are some that use these.
[00:10:24] Um, there’s some companies in out West usually that are using some of these techniques, but breeders in general, like the breeder that breeds instilling closets and basements, I, I don’t think that they’re using any of these techniques.
[00:10:39] Kellan Finney: How useful do you think it is to, for breeders to actually get the genomics of say, two different strains, and then try to piece together what they think the offspring is gonna have from a characteristic standpoint?
[00:10:53] How close are we to like being able to do something like that? Does, is that, does that make sense?
[00:10:59] Dr. Daniela Vergara: Yeah, it [00:11:00] does make sense. And I think that for particular traits, we, we can Right for, yeah. Again, for cannabinoids, for, um, sex. We can predict, um, or we can tell you how the plant is gonna be when it’s very tiny.
[00:11:14] When it’s small. There’s other traits that we have no clue. Like I, I don’t think that we know much about what terpene, like terpenes are a big kind of worms. Um, but I don’t know if it, if it’s gonna be good for a breeder that is breeding low scale in their basement. I don’t know whether that’s a good idea, because if you look at.
[00:11:37] Other crops, like if you look at corn for example, you have big companies that are breeding companies that are the ones that do that. And then the farmer already buys the seeds from these companies. And to be honest, breeding at a large scale is not an easy endeavor. [00:12:00] Like you need highly qualified personnel, and especially if you’re doing.
[00:12:04] Marker assisted selection, which is what I’m talking about, where you look at the DNA in order to select for those individuals that whose DNAs you like because they’re related to a trait that you like, right? That is not easy, that is not uneasy by informatic task, especially if you’re talking about hundreds of thousands of plants.
[00:12:23] Um, so, so I don’t know how, I think that people need to understand genomics and understand because. I think that that makes it easy for them to understand what the companies are doing, especially if the companies may not have your best interest as a farmer. Um, that allows you to understand more of what the company is doing.
[00:12:45] How is the company doing it? When is the company doing it? Why is the company doing it right? And that a allows you to make more, uh, educated decisions, but I don’t know if you necessarily need to be the breeder [00:13:00] yourself. You mentioned
[00:13:01] Bryan Fields: marker
[00:13:02] Kellan Finney: assisted selection, uh, selection, right? And so there’s kind of two different buckets as, as it stands in terms of trying to get, uh, a plant to have a specific characteristics, right?
[00:13:16] So marker select selected is one. What is the other one? Is it uh, actually going into manipulating the genome itself to create that characteristic? Um, like genetic engineering, for example. Providing that that gene to the plant is that kind of technology that’s possible within the breeding process?
[00:13:37] Dr. Daniela Vergara: Yes.
[00:13:38] That is a technology that is possible within the breeding process. It’s not easy again. And then you need a molecular biologist that actually can take the gene and take and put it there. Right. And, and do that stuff. Um, it’s not easy. It’s possible it’s been done right. Like that is gmo, right? Like that is such a modified organism.
[00:13:59] Um, [00:14:00] it depends on where you draw the line of what is A G M O and what is not a G M O. Um, because there are things that do not necessarily occur in nature, right? Like seedless watermelon, they were bred for, I don’t know if they, I don’t think that they were genetically in engineered, but in nature alone, if you, we were not to touch nature at all, that wouldn’t have happened.
[00:14:25] Seedless watermelons, right? Or. right? Like that is a lot of breeding that went into Ash Chihuahua and if you see all of the dogs, there is a cost for the amount of inbreeding. Like when you think about Ash Chihuahua, you don’t picture a German Shepherd. You picture Ash Chihuahua and you know that they’re very different.
[00:14:50] They’re used for different things, and there’s a lot of inbreeding that went into that. You know, like father mating. Daughter mating, father, mating [00:15:00] brother, right? Like there’s a lot of inbreeding and that comes with consequences. All of those nasty diseases like cancer or these ulcers that these dogs have due to inbreeding, that comes with consequences and it also comes with consequences in plants.
[00:15:18] And now with genetic engineer, I mean, I guess that it depends on your personal susceptibility. Whether you go to the store and eat strawberries that are polypoid, right? That are these huge strawberries that look like an orange that is also developed in the lab. Um, so I mean, I am a big g m proponent. Um, I give talks about GMOs.
[00:15:41] I have my issues with GMOs. Yes. But yeah.
[00:15:44] Bryan Fields: Where do you see the, the line. Where do I see the line? Yeah, you said, it says, you said it depends on where you see the line with GMOs and in cannabis. So where do you see the line with is what you think is GMO and what is [00:16:00] non GMO for what is currently happening?
[00:16:02] Dr. Daniela Vergara: So, in my opinion, and this is my definition of GMOs, if you ha if you need a lab in order to do it, that is G M O. If I can do it on my closet, on my my basement, that that is not. So if you’re just
[00:16:14] Kellan Finney: naturally breeding and doing kind of like the Mandel process, right? Um, with his beans, for those of you who don’t know, it’s a great thing to go look up, uh, Nelson Mandel.
[00:16:24] But if you’re doing that, you, I wouldn’t count that as G M O either, because I mean plants do will do that on their own, right? Naturally, we just help facilitate it and actively put. Like the two tall people together, hope, hoping they fall in love, I guess you could say. Right.
[00:16:41] Dr. Daniela Vergara: So, okay. So first I think, okay, first, like Gregory Mendel had a lot of time, he was a monk.
[00:16:47] I, yeah. I’m assuming that monks have a lot of time. Hopefully, I don’t really know much about the life of a monkey except for him that was just crossing peace, you know, like, [00:17:00] but he’s dedicated. Exactly. Uh, but again, even if you are breeding, like all of these breeds of dogs have been the work of multiple generations.
[00:17:15] That probably didn’t happen out of the blue, like there were dedicated. Mendels that were breeding for these dogs. Same for, you know, all of the species or, or brassica. I think it’s a greatest example. Brassica, the wild mustard is the same, is the same species for, for, um, kale, cauliflower, broccoli, brussel sprouts is the same species.
[00:17:43] So you selected Yes. Yeah, exactly. That phase is the correct phase. What exactly? So Kale, you selected for the flowers. Brussel sprouts for the lateral buds. Cauliflower for the flower. Right. And it’s the same species. It didn’t happen. Willynilly out in the [00:18:00] wild like it was work that that went into that.
[00:18:04] Those things I could maybe, if I dedicate my entire life, I could do it in my. Shower, right? I don’t need a lab. Like I don’t need to introduce a gene, right? So in my opinion, those are not GMOs. What is a GMO A GMO is when you necessarily you need a lab. You need a lab in order to do that. Whether it’s polyp, ployed because you added chemicals cautiously and then right, or whatever it is.
[00:18:32] But you need a lab. So are we talking
[00:18:36] Bryan Fields: synthetic cannabinoids? Is this where we’re kind of, we’re moving towards. Is this what we’re talking about?
[00:18:41] Dr. Daniela Vergara: I, I wasn’t going there, but if you wanna go there, let’s, well,
[00:18:44] Bryan Fields: I, I, I’m just curious, right? Like, I’m trying to, like a, attach the lines because we talk about synthetic cannabinoids and then what is naturally occurring in the plant.
[00:18:51] So I’m curious to know like, where is this line? Because in cannabis it always feels like everything is very gray and it turns out like everything kind of just ends up in [00:19:00] there. So is this, are we in synthetic cannabinoids or are we talking about something different?
[00:19:04] Kellan Finney: I mean, could you classify a synthetic cannabinoid as a cannabinoid that’s manufactured from a genetically modified organism?
[00:19:12] Dr. Daniela Vergara: No, I think that those are more like chemically producing the lab. Right. But if, if I were to produce GM O cannabis, what would I do? I think I would make this as resistant plants. I think I would make, um, maybe plants that produce a bunch, like they yield a bunch, like. What, 35%? T hc 75, you know, like something to the moon.
[00:19:40] Yeah. Like ultra lemon, 75%. Yeah. You know, like the huge trichomes, like I would just do, you know, like a, a huge tricom or, or multiple mi I would actually make trichomes grow in the leaves and in the stamps. And those are not regulated. They only regulate the bug. So why, why
[00:19:59] Bryan Fields: [00:20:00] has anyone done that? Because
[00:20:03] Dr. Daniela Vergara: engineer the plant.
[00:20:04] Exactly. And in order for you to do that, you need a lab. And in order for you to have a lab that has these capacities, it’s usually universities that have that. And in order for you to do that, you need federal legalization. Yeah. You cannot take marijuana into a lab. And I mean, yeah, you can take C B D, I guess.
[00:20:23] Yeah.
[00:20:24] Bryan Fields: So staying on synthetic cannabinoids because it’s, it’s a very hot topic. How, how do we define that and how then we ensure that the, the end customers understand what they’re consuming, whether or not it is naturally occurring in a plan or, or not.
[00:20:40] Dr. Daniela Vergara: Sy is, is synthetic cannabinoids a hot topic? Is that really, I didn’t know.
[00:20:43] Kellan Finney: I mean, if you think like Delta eight and Delta 10, right? A lot of those cannabinoids have kind of proliferated a lot of these markets and so. I mean the, it’s just tough. Cause a lot of these can, a lot of the cannabinoids, so like the federal government says that [00:21:00] like the reason Delta eight is legal right now mm-hmm.
[00:21:02] Is because it’s like a loophole around Delta nine because the cannabis plant technically only makes Delta nine th thc. And so cannabis, the plant is illegal because it has Delta nine t hc. Right. And so if they’re making Delta a t hc. It’s technically legal, right? And they’re saying that it’s naturally occurring cuz it’s in low levels in the plant.
[00:21:26] But I, I personally have never seen a cannabis plant with Delta eight levels in it that high at all, honestly. Um, and so that’s a, an argument for another day, but if you’re able to manipulate the genome of cannabis to manufacture this Delta eight cannabinoid that was considered synthetic, is it a way around the, the federal laws regarding Delta nine, T H c.
[00:21:50] Dr. Daniela Vergara: So, okay. So I think, is that defining what is a synthetic canna? You know, I think it’s a difficult thing, right? Because yeah, [00:22:00] it’s something that you do in the lab, right? So I can take, I don’t know, T hc, like delta nine THC and do it in the lab or from delta nine, then produce delta eight, or from thc, then produce cbn, right?
[00:22:14] And then at the end of the day, the plant does produce. T H C A, right? Delta nine, t h c a. And then when we heat it up, decarboxylation, then you have Delta nine T hc, and then it ages and oxidation. And then you have C B N, right? And then the difference between T H C A Delta nine and delta eight is a bond between twos.
[00:22:39] And so it’s, it’s kind of very easy to go from one place to the other. And I have analyzed data that has Delta eight in low quantities, but it is present. But there are other cannabinoids. There are other synthetic cannabinoid, it’s like the spice thing, right? That are very, [00:23:00] very toxic. So there are cannabinoids that are produced.
[00:23:06] Therapeutically, right? So you have all of these drugs like Epidiolex or uh, dronabinol or Navone that are produced in the lab, but they are based on what the plant produced. But there’s other cannabinoids like that or the spice that are not produced by the plant. And, um, Are much stronger. Right? So Delta nine T HC is a partial agonist of the endocannabinoid system and it’s partial.
[00:23:47] And that’s a partial agonist, right? And that is compared to our own cannabinoids that we produce our endo cannabinoids. Then you have this other synthetic cannabinoid. It’s like that Alpha is the one that I [00:24:00] know the most. Cause I wrote at some point about it. It’s not partial. It’s entirely an agonist, so it is much stronger.
[00:24:11] And so I, I don’t know. I, I think that we need to define what those things are and what is synthetic and what is not, and it is if it’s synthetic plant-based or if it’s full synthetic, that has completely been engineered in the lab. I think that those defin, those definitions are, are important.
[00:24:29] Bryan Fields: A hundred percent.
[00:24:29] And and that’s really why I wanted you to clarify that because it is so complex and so difficult. So for the people who are making decisions down in DC who are unsure of some of these nuances and details, it just layers on the complication that when these rulings go down and it’s like, well, it’s not as black and white as that.
[00:24:44] So for example, when I was in Miami, someone offered me T H C P and I had no idea what T HCP was. And they said, well, it’s like T H C O but better. And I was like, define better. And was frightened, right? Like to think that like this was something that could all of a sudden pop up and they’re just like [00:25:00] literally going down the alphabet, right?
[00:25:01] L m n, op. Like, is this really what we’re doing here, guys? Like that? That’s what I was fearful of. Like how, how, how are we doing this? How are we defining this? And is there any sort of basis before like quote unquote better? So your thoughts.
[00:25:15] Kellan Finney: Better is just the pharmacokinetics, right? So T H C P has seven carbons on the Alcan tail, I think instead of normal five, which is a Delta nine T hc.
[00:25:26] And so it binds better. Right. And that’s also what’s going on with uh, the Alpha Pak. Is that correct? Dr. Daniella, right? It just, it sits in your CD one receptor longer, so it causes that your high lasts longer, and it’s a more intense feeling because it’s just sitting in that enzyme in your brain for a lot longer.
[00:25:45] But,
[00:25:46] Bryan Fields: but my fear right, is that a consumer walks into a store and doesn’t understand the differences between they won’t cannabinoids and grabs a product that goes, ah, t h ccp like. Just gonna get high, right? Ask the person behind the counter that’s selling the unlicensed products and he is like, yeah, [00:26:00] you’ll get high, has no idea.
[00:26:01] It goes home, has a terrible experience, and is immediately offput by cannabis A and B. Like if we could have a really bad reaction setting off, you know, a negative sentiment towards the industry, when ultimately what is, what is he consuming? And
[00:26:13] Kellan Finney: this brings up a really good point from kind of this trend within breeders right now.
[00:26:17] And so I don’t know if you’ve heard, there’s a couple breeders out in California that are. That have high, like T HCV strains. Right. And so T HCV is just one less, two less carbons. Right? It’s three. Three less
[00:26:32] Bryan Fields: cumber carbon, I think. Yeah. Yeah. I think,
[00:26:33] Kellan Finney: I can’t remember. Right. It’s just they mess with the, the chain.
[00:26:36] So again, now we’re seeing these plants be bred to make these minor cannabinoids that could have stronger interactions than what someone would be used to with cannabis. Like what is your thoughts on, on those kind of. Trends from a breeding perspective.
[00:26:54] Dr. Daniela Vergara: I think it’s awesome. Great. I I, I love that they’re going for something else besides [00:27:00] tht is that cannabis is, look, I have been a cannabis consumer for a very long time, but my taste is kind of like a yes no type of thing.
[00:27:11] You know? It’s like, yes, this tastes good, and no it doesn’t, and it’s usually a yes. I am a great eater. You can invite me to eat anything, and I’m always gonna thank it. So just don’t eat anything I cook, you know, for your safety. Um, but, um, so when I, I didn’t believe all of these things that, you know, cannabis people said like, oh, and this one smells like blah, blah, blah.
[00:27:33] And I was like, really? Until two things happened. First I started working for Steep Hill and they threw a bunch of data at me and I started analyzing the data. And it’s like, yeah, this is true. There’s a bunch of different compounds that are produced in different ratios, different strains, produce different things.
[00:27:48] Um, Straight names do not mean much. It doesn’t matter. But in any case, yes, there’s a bunch of different things. And then I was pregnant and when I was pregnant I smelled everything and I was, [00:28:00] I was selected to be a judge for high times and I wasn’t able to do it cuz I was pregnant. So my husband did it and I was able to smell all of the things that he, and, and I could tell you right then, like, this smells so different from this one.
[00:28:16] Right. Like this one definitely smells more strawberry like. And this one definitely smells like a skunk. And so I, so then and analyzing the data, like this is real, right? So right now that it’s going into mainstream and people go to a liquor store and it’s like, give me the highest, like, you know, 75% ethanol, that’s the one I wanna drink and I wanna be wasted.
[00:28:40] Same thing happens with cannabis. Like give me, you know, like the 38% thc, which at the end of the day, first we don’t think it acts the same way as alcohol. And second, there’s so many other things, like I, I do believe in the centage effect. I think that there’s a little, there’s a tiny bit of evidence, but I do [00:29:00] think that it’s likely right, that you’re putting a bunch of different things in different ratios.
[00:29:04] They act in different ways, right? So I do think that that is true. Um, and so why not breed for these other different things that you could, right. High C, B, C, um, C B D V. Uh, why not? I think that that is awesome for breeders. Like, yeah, go for it. Like the sky sky’s the
[00:29:26] Bryan Fields: limit. Any, any fears of the unknown that we haven’t consumed high amounts of CBC for long periods of time, and kind of we’re walking down this path of unknown where there could be ultimately bad results.
[00:29:39] I know that’s kind of a pretty negative feeling, but just wandering to this unknown. We’re kind of adjusting these plants in order to maximize these different analytes. I’m curious to know if you have any fears of what could be waiting for a similar side.
[00:29:53] Dr. Daniela Vergara: I, yeah. Like, you know, with great powers comes great responsibilities.
[00:29:56] Yes. But, um, [00:30:00] I, I love that.
[00:30:04] Um, I don’t, I don’t think there’s anything worse than the opioid epidemic that we’re currently having. Right? Like, is there gonna be something worse than that? I don’t think so. Um, of, of course, this is a. Personal opinion, redundancy, you know, sample size of one me here, like, but, and going back to the question that Killen was asking about T H C P and T A C O and all of that stuff, um, I remember when Colorado just legalized, so this was, this was probably 2015.
[00:30:39] And there was, I think this New York Times, uh, article that came, A reporter went to, uh, a dispensary, got, um, some edibles and got ultra high and was not able to leave her room in her bed. And it was an entire story of. This is awful. And it’s like, yes, it comes with [00:31:00] education. Like, I don’t know. I mean, here in the US it’s a little different, but when I was, you know, 14 and in Colombia, everyone drinks and I was, you know, like the first time I drunk, I was younger.
[00:31:11] But they tell you like if you drink a lot, you’re gonna get drunk and then you’re not gonna remember it. So you have to educate your consumers. And especially I think there’s two types of consumers that are the most important ones. The very younger ones and the very older ones. The very younger ones, because they’re dumb and like, oh, I wanna get super high.
[00:31:32] And the very older ones, because they actually go there because they are in pain, they have hip pain, they cannot sleep. They need something that helps. They need and, and then, You get a person, you know, a dispensary above tender that lives in Colorado and it’s leaving the dream and it’s snowboarding in the winter, you know, and I work at a dispensary.
[00:31:49] Oh my God. Yeah. Take the one that has the most T hc and that is not the case necessarily. So you really need to have good education until people, okay. We, we do not know [00:32:00] entirely the effects of cbc. We, we don’t know, but try it. And if you like how you feel, come back and order the exact same thing. Right.
[00:32:09] That’s what I recommend. Start, start little by little. Don’t eat the entire gummy, eat half of the gummy. Make sure that you’re not gonna drive, that. You’re not gonna use a chainsaw. Just watch a movie, right? And then if two hours later you feel okay, or three hours, then eat the rest of the gummy. But start with a quarter or a half powerful message.
[00:32:35] Bryan Fields: Byebye. Is cannabis just one
[00:32:39] Dr. Daniela Vergara: species? Yeah. Cannabis is one species, yes. With a lot of genomic and PPIC diversity. Yes.
[00:32:48] Bryan Fields: Can you kind of expand on, on how that works? I’ve seen you compare it to the, the chimps and humans. I’m curious to know if you can give us a breakdown. Oh yeah. Where did you see that? I can’t tell you where I did my research.[00:33:00]
[00:33:02] Dr. Daniela Vergara: Yeah, I mean, it has a lot of diversity. It has as much diversity as maybe two different species, or at least with some sort of preliminary results that I did at some point. It has maybe two or three times as much genetic variation than we do, which is exciting because then you can do a bunch of combinations, right?
[00:33:22] If it were not regulated the way it is, we could. Do a bunch of different combinations and, and can you give us an example? For example, I think that it would be super cool to have very, very stinky plants that are very small flour, very early and are all purple. Just poor ornament, right? Okay. Very small out of flowers, big stinky buds all purple.
[00:33:54] Why not? And that produced trichomes in the, in the stems. Why [00:34:00] not OID content? Maybe, but you don’t. You wanna be Cause it’s stinky and it’s, it’s it’s ornament. Yeah. You don’t need to smoke it
[00:34:12] Bryan Fields: slightly. Yeah. So do i, I was thinking about that so slightly. Cannabis Sativa, the production manual. We got a quick glimpse into it. It’s absolutely beautiful. I’d love if you could share some, some insights in it and kind of what people can expect when they take a look.
[00:34:28] Dr. Daniela Vergara: Yeah. The cannabis production manual, that was exciting.
[00:34:31] That was my first big, um, big endeavor at Cornell. And it was really exciting because I learned a lot. Um, I learned that I know very little and I know just a little tiny part of the entire plant. Um, I was able to interact with a bunch of people, um, because I was leading the project and I needed information from a bunch of people.
[00:34:56] Um, and, and so in my opinion, that manual [00:35:00] is a 1 0 1. On if you want to start growing cannabis for any particular reason, you know, if you wanna grow fiber, hemp or grain, what do you need? How much money do you need? What space do you need? What equipment do you need? Uh, how do you plant it? What is the space between plants?
[00:35:17] How many plants, uh, what to expect? How do I harvest it? When do I harvest it? Um, so this one-on-one, of course, you can go deeper and deeper and deeper. For example, the high cannabinoid part. There’s so many cannabinoids and all of the biochemistry, like we didn’t really explain, okay, this is THC and this is C and this is cbc and this is how THC goes into, right?
[00:35:39] And C, C into, uh, C b, A and cb, right? We, we didn’t explain all that of that part and, and this carbon and this other carbon, but you can always go deeper and deeper or extractions. I’m lately fascinated by the biochemistry of extractions. And resins and rosins and, you know, solvent and solvent less. And why would you pay [00:36:00] more for this one than this other one?
[00:36:01] And the, but the biochemistry behind it. So that is, we, we don’t talk about it. I mean, it’s still 208 pages and we don’t talk about it. So it could be, you know, 600 pages if we talked about all of the stuff. But it’s kind of like an overall glimpse, I think.
[00:36:18] Bryan Fields: Did you learn anything that surprised you or shocked you when you were helping put it together?
[00:36:25] Dr. Daniela Vergara: Did I learn? Yes. I didn’t know that there were so many diseases that cannabis was susceptible for, um, and so many insects and I didn’t know much of. I’ve been in touch with, in Colorado, I was very in touch with indoor gros, but here there’s more outdoor grows, and of course going from indoors to outdoors is a completely different thing.
[00:36:50] So, Learning about nutrient and soil management, that was totally new to me. And, and, you know, and all of the ion that you do [00:37:00] indoors, you really do not do that outdoors. Or there’s other options outdoors. Right. People here use chicken manure, so, so you can do that. Right. Um, so that was, that was new to me.
[00:37:12] Yeah.
[00:37:14] Bryan Fields: On a scale of zero to 100, with a hundred being, we know everything about the plant. In your opinion, where are we today with our understanding of the cannabis plan?
[00:37:25] Dr. Daniela Vergara: Zero to 120, 30 maybe? I mean, the understanding of of,
[00:37:32] Bryan Fields: of what, what we currently know about cannabis and how the, the human body interacts with it and what its potential benefits are and what we could potentially leverage it for.
[00:37:43] Future opportunities, whether it’s medicinal, recreational, Just from an understanding standpoint, information wise, where do you think we are today and what, like how long do you think it’ll take us to get to 60 or 80?
[00:37:57] Dr. Daniela Vergara: I think, yeah, I think that we’re about in a 30. And how [00:38:00] long does it take us? I mean, it depends on federal legalization, so, but I, it, it’s gonna be much faster than with other species cuz we have tools that were not there.
[00:38:13] You know, when I started working in cannabis at Boulder, they’re like, I remember, yeah, it was literally a Friday night. My husband had a friend in town and they were like, Hey, so why sunflowers? Why not weed? And I’m like, well, everyone knows everything about weed. And I started looking at what was out there.
[00:38:30] There was not much. And that was 2013 for 10 years. And what we’ve a, the, the advancements in 10 years have been. Incredible. So, so I do think that things are happening fast and there’s a lot of, um, biotech promise, not only in the marijuana front, but also in the hemp front, right? Like there’s a lot of biotech companies that are [00:39:00] coming out and that are breeding and that are producing different things, different products that are exciting.
[00:39:05] So, do think,
[00:39:07] Kellan Finney: do you think CRISPR gets involved in cannabis? Do you think those two fields merge here sooner rather than later? Oh yeah,
[00:39:13] Dr. Daniela Vergara: absolutely. Like CRISPR and other things like Oh yeah, like absolutely like, and I will do it like no bra like for hemp. It’s no brain for hyper hemp. Oh yeah. Just silence all of those cannabinoid genes in fiber hemp.
[00:39:25] Just send it
[00:39:26] Bryan Fields: as
[00:39:26] Kellan Finney: tall as they can get
[00:39:28] Dr. Daniela Vergara: E. Exactly. Like why do you need them there? Right. Like just silence those guys out and then you don’t care cuz they’re not gonna produce any economic, you’re totally legal. Right. Totally.
[00:39:40] Bryan Fields: Yeah. What’s the biggest hindrance for doing that? Is it money to get that off the ground?
[00:39:46] Kellan Finney: Yeah. And you got a paid beam or someone else that’s already licensed the technology, right?
[00:39:52] Dr. Daniela Vergara: Yeah, but I also think that it’s, the labs that need to do it are labs that may be federally controlled. I mean, I know that there’re [00:40:00] some institut in California that are working like a south institute in California is working.
[00:40:05] Big time on, on certain cannabis aspects. I know that there are some universities in Canada that are doing some G M O E type of thing. Um, I don’t know, Israel, right? Like Israel, they, they, they should be, they agree.
[00:40:22] Bryan Fields: So, yeah. Are there any aspects of the plant that intrigue you or in the back of your mind you’re
[00:40:28] Dr. Daniela Vergara: wondering about?
[00:40:30] Oh yeah. So many, so many. I mean, I think that the white chromosome is fascinating and the ESE individuals, I think that those are fascinating. And the Y chromosome in cannabis is very different from the Y chromosome in humans. So in humans, the Y chromosome is the smallest chromosome, right? In humans, the Y chromosome basically have one gene, and that one gene is the one that tells the rest of the genome, Hey guys turn on.
[00:40:55] You know, like, Hey, we’re gonna produce hair, testosterone, right? So basically, [00:41:00] As a female human, I have all of those genes, but I don’t have that one gene that turns everything off more or less. That’s more or less how it works. Um, in cannabis, the Y chromosome is the biggest one, and it’s, it’s huge and it has a lot of repetitive content and repetitive content.
[00:41:19] As the word says is, is repetitive, so it’s hard to know where it starts and where it stops, right? Because it’s a lot of blah, blah, blah, blah, blah, blah. So putting together, assembling the white chromosome, it’s hard. And where on the street is that there is. Some Y chromosomes that have been assembled in Canada and another one in the South Institute in California.
[00:41:40] So that’s a word on the street. Um, let’s see what happens. They’re not still publicly available. Um, so I think that that’s fascinating that monia individuals are fascinating, right? Because they apparently have two X chromosomes, but they still produce. Male flowers, like, what are you turning on? Or where, where is [00:42:00] that gene?
[00:42:00] Right. I, I, I think that that is, and that’s what drew my attention at the beginning, but the cannabinoids, I think are also super, the terpenes. Oh, the terpenes are, because the terpenes, it seems that one gene can affect multiple traits. And then there’s one trait that can be affected by multiple genes.
[00:42:19] Right? So that’s philanthropy and epistasis, that’s how it’s called. So they’re in play. And then, so I, I know that, you know, um, Jordan Sager.
[00:42:29] Bryan Fields: He’s a shout. He’s a friend. Jordan.
[00:42:31] Kellan Finney: Yeah. Dr. Long, really? Mark Long is the man, not ma. Yeah,
[00:42:35] Dr. Daniela Vergara: but they have, they’re
[00:42:35] Bryan Fields: not man Jordan like that on his shot. Well, I
[00:42:38] Kellan Finney: mean like, I’m sorry, but like Jordan learned under Mark, right?
[00:42:41] Like, I’m gonna give respect to Mark. We’re, I mean, I, I have mad respect for Jordan too, right? They’re doing big
[00:42:47] Dr. Daniela Vergara: things, but, but they, they have this 2019 paper. I always, because yeah, in my top five papers, That they showed that all of these genes may be acting in a network, right? And all of these genes may be acting together to [00:43:00] produce these very complex phenotypes.
[00:43:02] And I, I think that they may be right. Um, yeah. So
[00:43:07] Kellan Finney: also just shout out one of the most, the coolest things I’ve seen, um, That’s, uh, been achieved by scientists in canvases, Mark Long getting time on the super computer at Pacific National Labs to run a lot of that data through in order to pull those, uh, conclusions
[00:43:25] Bryan Fields: out of the data.
[00:43:25] So a little quick shout. Oh really? Yeah. He got time on it. I was like, what? Oh, that’s pretty cool.
[00:43:31] Kellan Finney: I know, right? It’s pretty cool just cuz it’s federally funded right? To do like, uh,
[00:43:36] Bryan Fields: cannabis enzyme work, so. Mm-hmm. Yeah. Dr. Daniella, when you got started in the cannabis space, what did you get? Right? And most importantly, what did you get wrong?
[00:43:46] Dr. Daniela Vergara: What did I get right? What did I get right? I, I don’t know. What did I get right? But I know that I, there were many things that I got wrong. So again, um, so first [00:44:00] when I started in the, in cannabis, we thought that, THC and C B D were one gene, right? That it was a one locust to allele type of thing. So you had either C, B, D that you got from your mom or THC that you got from your dad and you expressed them both, or only c, b or only T hc.
[00:44:20] So we thought that that was a case. Now we know that there’s a gazillion genes that they’re all in close pro proximity. So, and that happened in 2015. So while I was working in cannabis, we, we found that out. Uh, we know that, um, Yeah, so, so we know, um, that there are many, many compounds in different ratios.
[00:44:44] Um, so all of those things I kind of had them wrong. Also. There was, there’s a paper that, uh, we published in 20 21, 20 22, uh, with Leafly. Um, I love that paper. [00:45:00] Um, and, um, I had my hesitancy between labs. I was like, yeah, labs are, you know, they don’t tell the true story. You give them more money, they spike your T hc.
[00:45:14] And then we analyzed the lab data and the labs were very consistent between each other and they’re in completely different places. So one lab was in Washington, the other one was in Oregon, the other one was in Florida, Alaska. Michigan. Right. And they were super consistent. So there are labs that are doing a really good job, and that gave me a lot of faith and hope and in the cannabis industry, that despite not being regulated, despite being illegal, like despite having the federal government maybe shutting out your business, these labs are doing a good job.
[00:45:50] And, and I don’t know, I was just like, I love these labs. I don’t know who they are, uh, but I love them.
[00:45:58] Bryan Fields: If you could sum up your experience in a main [00:46:00] takeaway or lesson learned to pass onto the next generation, what would it be?
[00:46:06] Dr. Daniela Vergara: Why do you ask me this hard, philosophical question?
[00:46:09] Bryan Fields: We wanna learn from you.
[00:46:15] Dr. Daniela Vergara: Um, if I could say that
[00:46:19] again,
[00:46:20] Bryan Fields: you could sum up your experience in a main takeaway or lesson learned. To pass to the next generation, what
[00:46:28] Dr. Daniela Vergara: would it could be?
[00:46:34] Okay, so two things. Like you never know what you’re gonna be and ending up doing in life. You never know and what you’re learning as an undergrad or in grad. In grad school, whenever. That is the time that you’re gonna learn that you’re not going to. It’s like, oh no. Yeah, I’ll revise that in 10 years from now.
[00:46:56] Like, that’s not gonna happen. You learn that [00:47:00] then and there, or you did not learn it, so, so do it then. Make sure that you do it then. Love
[00:47:10] Bryan Fields: it. Alright, prediction time. Dr. Daniella. I gave you a magic wand. You can do an experiment or study with money not being an issue or ethics being involved at all. What would you do to help us expedite our learning and understanding of the cannabis plan?
[00:47:29] Dr. Daniela Vergara: What would I do? Money or ethics or not? And I can do anything. Okay, perfect. This is what I would do. I would have a bunch of plants that. I would, I would give people a bunch of weed for them to try. I would know, or it would be a double blinded study. Right. So I wouldn’t know, or the [00:48:00] consumer wouldn’t know exactly.
[00:48:01] I. What they’re taking, it doesn’t matter what strain it is, but I would know. But we would know the chemotype, right? We would know how much th hc, c, b, d, hopefully terpenes, et cetera. And then we would gather information from them about how they felt, uh, what they felt, Wendy, and, and we would gather a bunch of other information.
[00:48:20] Are you, uh, did you exercise? Did you sleep? Did you eat? Um, are you depressed? Right? Like all of this information. And then we would pinpoint. What compound does what, that’s what I would do. And whether you ate it or whether you drank it, or whether you smoked it or you vape it. And so we would have, I don’t know, 10,000 participants like a true clinical trial.
[00:48:52] Like a clinical trial. Yeah. And not even, you know, like we would just gather questionnaires like from there you could go a [00:49:00] step further to actually withdraw blood and see al cannabinoid levels or Right. Or, but not even there, like just the first step of asking the questions. What did you feel? What did it smell like?
[00:49:13] How, how did it make you feel? Right? Because if you go to Lively’s website and you Google, I don’t know, um, Tangerine Dream, it’ll tell you, oh, this one, it makes me active, blah, blah, blah. So you already have that preconceived, right? You already know more or less. But if you have no straining name and you don’t know what’s there, then it’s a blinded study.
[00:49:40] Right? That’s what I would do.
[00:49:42] Bryan Fields: Like it ke
[00:49:44] Kellan Finney: uh, I think, I mean, I agree with Dr. Daniella. I think that looking into the entourage effect or the endocannabinoid system in any fashion from like, uh, well funded n I [00:50:00] h like. Study that’s executed at like a John Hopkins or like, you know, uh, a major institute that’s used to running these kind of really large trials on how human physiology interacts with different substances.
[00:50:15] Right? I think something like that is probably what’s most needed in, uh, cannabis research right now. Whether that’s understanding the true nature of every endogenous. Cannabinoid that’s floating around in your system right now and how deficiencies affect different illnesses or anything under the sun from a polypharmacy entourage effect perspective.
[00:50:37] What do you think, Brian?
[00:50:39] Bryan Fields: I’m fascinated by personalized medicine. I’m wondering if by understanding deeply about the plan and then being able to, to cross-breed, to have a specific. Plant profile, then we can align with people’s personal endocannabinoid system to maybe potentially help some of these therapeutic areas we’ve kind of leaned into.
[00:50:57] And I’m fascinated in understanding [00:51:00] that and wondering if cannabis can be, you know, really close to helping unlock that. So how that happens and how we get there, I’ll leave it up to the two of you, but, uh, that would be the, the study that I would, uh, lean for.
[00:51:13] Dr. Daniela Vergara: But yeah, it would also do. Leafy trichomes and trichomes in the stamp and trichomes, you know, like, and then like, I really, really like it when people do stuff that are kind of like obvious against the super regulations, right?
[00:51:33] So my best example, I, a friend of mine gave me these cookies that are made outta hemp. So all of these plants were less than 0.3%. But the cookies have a lot of THC because they take it, they concentrate it, and then they make the cookie. But it’s made outta hemp, so. Right. I love that. I was like, ah, you’re smart people.
[00:51:54] Yes.
[00:51:57] Bryan Fields: Industry just full of entrepreneurs operating in [00:52:00] straight gray area. Exactly,
[00:52:01] Dr. Daniela Vergara: exactly. And laws that do not make sense agreed
[00:52:04] Bryan Fields: by, by people who don’t know why they made them. Right. Dr. Moore.
[00:52:08] Dr. Daniela Vergara: Yeah. And one of my. Biggest one is the 0.3% thc. They, they do not understand the biochemistry. They do not understand how these enzymes work, how these components are produced.
[00:52:19] The 0.3% THC is like one of the biggest ones. And then they’re calling like CBD hemp. Like no, you just wanna call it hemp because you don’t wanna call it marijuana. But really that is low T HC marijuana. It has another compound. Yes. But it’s not ham for fiber. It’s not ham. Like we’re not making this T-shirt out of that plant.
[00:52:38] Bryan Fields: No. So, yeah. So Dr. Daniel, for, for those who wanna get in touch and they wanna learn more, where can they find
[00:52:44] Dr. Daniela Vergara: you? Where can they find me? You can find me in social media in all of the, I mean, I don’t use TikTok. Or Reddit. I don’t know how to use Reddit either. And I am pretty bad on the other ones, but you can find me there.
[00:52:59] Um, [00:53:00] in Twitter and LinkedIn. And Instagram, you can find me there. I’m Kana So means school. So it’s basically Kana Cool. But in Spanish, right. So Kana at KANA in Instagram and in Twitter and in Ding 10. I’m Daniel.
[00:53:16] Bryan Fields: Awesome. We’ll link it up. Thanks for taking the time. This was fun. Yeah,
