The US cannabis market continues to grow at a rapid pace, with less than $4B and 2 legal adult recreational markets to over $24B and 18 markets in less than ten years. Even with some headwinds from Congress and the public market cannabis operators should be doing great, right?

As we’ve noted here before, being a cannabis operator is tough whether you are a small independent company or a large-cap MSO. The lack of safe banking and 280E cuts your profit margins; strict regulations, high taxes, and a legacy market that can beat you on price also don’t help. Amidst any gold rush, inexperienced operators show up with green dollar signs in their eyes, but with little management acumen and a less-than-stellar business plan.

This is where distressed assets come into play. Distressed assets can be defined as assets such as licenses, property, and equipment that an owner must liquidate to pay creditors, or a company that is going out of business and needs to sell those assets in a hurry at less than fair market value.

What is the difference between traditional M&A activity and buying or selling distressed assets?

  • Timetable: Distressed assets may be sold rapidly, sometimes in a few days. Traditional M&A with formal due diligence can take months to complete.
  • Risk: Frequently there is limited due diligence, the asset(s) may have underperformed due to management, regulation or location, and incomplete information is often all that is available in this type of sale.
  • Court Involvement: If the business being sold is in a formal insolvency proceeding, the sale may be overseen by a court of law. Keep in mind that plant-touching cannabis businesses are not covered by US federal bankruptcy protections

Like most transactions between market actors, there are advantages for both buyers and sellers of
distressed assets.

Cannabis businesses, especially start-ups, may find that they need to pivot their business model quickly. Their initial assumptions about the market and their place in it may have been incorrect, and selling assets quickly, even at lower than market prices, gives the start-up valuable capital to extend its runway, which is the amount of funds it needs to operate before reaching profitability. Even three extra months of runway from the sales of assets and other measures can mean the difference between success and failure, as the pivot to a new strategy plays out.

Buying existing assets quickly and at a discount, like a merger or acquisition, means you don’t have to start from scratch and develop your own cultivation, retail storefront or apply for a new license that may take months, or years to be granted.

Buying distressed assets can be advantageous for existing operators. For example, a cannabis retailer that has expanded to a handful of locations can cut costs and integrate their supply chain by buying a struggling cultivation operation, and increase their access to capital going forward. This is because increased margins and growth can allow operators to raise money easier and at better terms down the road.

To take advantage of these fleeting asset sales, a company needs to be prepared to act fast, have money or financing readily available and be ready to undertake rapid fire due diligence. Here are some steps to make sure you are prepared:

  • Identify what assets are being purchased
  • Review contracts and licenses attached to the asset
  • If a receiver or trustee hasn’t been appointed, talk to the management team to make sure one is in the queue.
  • Are there other risks involved with the assets? Common liabilities might be labor, environmental concerns, and recent changes in local or state legislation that makes the asset less valuable going forward.
  • Fraudulent representation of assets and licenses for sale – do your work, do your due diligence upfront – if a deal seems too good to be true, it probably is.

As the cannabis industry grows and undergoes rapid change, distressed assets will be part of the industry landscape. For the cannabis industry, restructuring the loss of capital through distressed asset sales helps create new capital through more efficient and creative use cases of these assets. If you are a cannabis operator looking to grow during an uncertain economic and regulatory environment, distressed assets can be one important ingredient in capital efficient allocation.

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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!

This week we were joined by Oren Schauble President of Unrivaled Brands to break down their unique strategic approach to the Cannabis Industry

We discuss 

  • California Competitive Cannabis Market 
  • Process of acquiring and merging another company into your organization.
  • How Unrivaled Brands utilizes R&D to test new products categories 

About Unrivaled Brands :

Unrivaled (Unrivaled Brands Inc) is the West Coast’s leading vertically-integrated cannabis multi-state operator and the parent company of multiple dominant, cannabis brands spanning consumer products, cultivation, distribution, and retail.

The Unrivaled brand portfolio leads in our respective categories and markets by a focus on customer experience, product innovation, and organic brand building.

Unrivaled currently operates in California, Oregon and Nevada, and our brands are licensed in Arizona and Oklahoma.

Get in touch with Oren and Unrivaled Brands

https://twitter.com/unrivaledcorp/

@orenmeetsworld

This show is presented to by 8th Revolution: At Eighth Revolution (8th Rev) we provide services from capital to cannabinoid and everything in between in regard to the hemp & cannabis industry. Our forward-thinking team can diagnose, analyze & optimize every detailed nuance of your company to keep your business safe, smart, and profitable. Our flexibility and experience combined with ongoing research create unique insights into how to best grow your market share. Contact us directly at [email protected] Follow Bryan on Twitter @ BryanFields24, Kellan Finney: @Kellan_Finney 8th Revolution, Follow The Dime on Twitter, Follow The Dime on Instagram 


[00:00:00]Bryan Fields: What’s up guys. Welcome back to another episode of the dime I’m Brian Fields. And with me is Kellen Finney. And this week we’ve got a very special guests, Oren Schauble. I think I messed that up. President of unrivaled brands, orange. Thanks for taking the time. How are you doing?

[00:00:15]Oren Schauble: What’s going on. I’m doing great pleasure to be here.

[00:00:18] I’ve encountered, how

[00:00:19]Bryan Fields: are you doing? I’m

[00:00:20]Kellan Finney: doing well. I’m excited to chat with another west coast stir with the and the west coast brand. Really?

[00:00:26]Bryan Fields: How are you right now? That’s fair. He is a west coast brand, but he’s got east coast ties. And I think maybe that’s where his heart may lie still. So I think for the record, it might be,

[00:00:37]Oren Schauble: we’re doing this for a global listenership, we’re just seeing people of all race, the shape sizes.

[00:00:42] Let’s,

[00:00:42]Bryan Fields: I love it. So I guess for the record, we’ll put him in the global category and I love it or, and we’ll take it there. So for our listeners that want to learn more about you, they want to get, how did you get into this space and a little background?

[00:00:53]Oren Schauble: Got it. I asked, I guess I have a history inside regulated products.

[00:00:57] So I worked in, initially I was at an agency in New [00:01:00] York. We worked a lot with liquor companies who worked with Ciroc and grey goose, red bull companies like that. After that I was in the firearms industry is also heavily regulated. You a lot of restrictions on how you can advertise how you can talk about your value proposition, that kind of thing.

[00:01:12] Plus regulated to the customer as well. And then I was in the drone industry after that consumer drones. A big hurdle to face in adoption because, people didn’t like the word drone who is associated with kind of, remote death versus taking cameras, which I think is now that battle has been won.

[00:01:27] And people probably more commonly associated drones is what they see flying around in the park, then what they do seeing it as an act of war and and then now, and then into cannabis. And I got into this because a friend of mine called land force. We’d worked together at two previous businesses.

[00:01:39] He worked with me at some companies before this and I went to a A enterprise drone tech software company that they got acquired when he was starting a company called Letterman. And I got to watch his journey as we went through a pretty rapid journey at this other company.

[00:01:51] And then after that, they were getting up to the size where it made sense for someone, with my skillset to be a part of it is they were going through a big merger. And so then the last three years, I’ve just been [00:02:00] working in the industry bringing together all the companies inside this kind of massive roll-up, we’ve done across dispensary’s and brands and all kinds of things to become this big company.

[00:02:08] We are.

[00:02:09]Bryan Fields: And I appreciate you sharing that. I want to dive into some of those specifics about some of those challenges by guests. Before we dive into that, was there ever any hesitancy to dive in cannabis? Obviously you’ve worked in some of the challenging markets from regulation standpoint, but any challenges or hesitations to come into cabinet.

[00:02:23]Oren Schauble: No, I’ve always had an alternative backgrounds. And so it’s a, I wasn’t like worried about how that would look for professionally or for just your friends and family or anything like that. It’s always actually been really exciting to me. If you had told 15 year old me that I’d be working in cannabis, I think I’d be shocked just imagining it was legal, but now I see the opportunity is so big and so exciting in so many ways and just so positive so that you can really sink your teeth into and be emotional about that.

[00:02:46] I was a, I was ready to go. It’s just a matter of, it was good that. I was going into a viable business because there’s a lot of about these cannabis businesses that have been fly by night. So yeah, as long as I knew the opportunity was I was real. I was ready to roll. So let’s talk about unrivaled

[00:02:59]Bryan Fields: brand.

[00:02:59] Can you [00:03:00] share a little bit about the company and what your

[00:03:01]Oren Schauble: role is? Got it. No problem. So on rival brands, we are the west coast MSLs MSO stands for multi-state operator, which is a kind of term in cannabis is separates people that operate in one market for people to operate in multiple. The reason that’s important is because operating in multiple markets and cannabis is really hard.

[00:03:16] There’s different regulations in every market. There’s different product standards. There’s different just overall quality consumers are different. It’s not Hey, I’m selling widgets, in this state. And that state is strategically complex, but what we’re doing is we’re bringing together a house of brands across retail and across, Consumer packaged goods into the west coast and the markets that we’re in.

[00:03:33] And then we’re looking to make a squash with those brands that we feel can impact the globe and help us be global brands as the cannabis industry grows. And so we’ve done that through a kind of a long and complex series of mergers and acquisitions where we’ve brought now, six or seven kind of total companies together into this kind of one functioning organization.

[00:03:53] And we’re going to keep doing that, headed into the future to create this. Trusting company, we feel can represent brands and [00:04:00] the modern cannabis customer experience to the world. And so I’m the president of that company. So all of the day-to-day operations across our retail stores, our distribution, our sales, our product strategy everything that kind of goes on day to day is falls in my purview.

[00:04:13] A lot of the public markets stuff getting through the M and a. And, kinda like the financial analysis, et cetera, lives in the teams on our business that service the public facing side of the company. But yeah, all the internal operations I’m working through every day.

[00:04:26]Kellan Finney: I have a quick question. How was, how much has

[00:04:28]Bryan Fields: changed since that.

[00:04:30]Oren Schauble: Oh, I mean in the last three years so I guess we’ve had a series of mergers. We had a big merger in July where we actually went on to the couple market. Yeah, exactly. And so the previous mergers, starting three years ago, it was a completely different market, but since the actual public merger, yeah, look, there’s a lot more spotlight on exactly what you’re working on. There’s a lot more challenges because you have to maintain a large, a larger number of corporate infrastructure to actually support being a public company. And, we went from, in the traditional.

[00:04:54] The kind of traditional and rival that wasn’t on the public side and we had about 150 employees and going from that to where we’re at now, which is like [00:05:00] 370, it’s just a massive jump. And I’m looking at really what we’re focused on right now. And this quarter is just bringing all these pieces together.

[00:05:06] What are our shared values as a group? How are we making sure we know there are just no redundancy across what we’re doing? Do we have the right systems to function at this size? That’s the kind of thing that, in a different industry you could spend a year doing, but here we’re trying to condense that into 90 days at, before we go, it continued to expand.

[00:05:22] That’s gotta be

[00:05:23]Bryan Fields: so challenging from a macro standpoint and then getting down to those specific details. So how do you go about doing that obviously with your role? You’ve got your hands all over the place. And like you’ve talked about in cannabis, especially as an MSO, the challenges aren’t just, one way, the whole way it’s different state different rules.

[00:05:39] So how do you go about

[00:05:40]Oren Schauble: staying on top of. Yeah. And so I think it’s one of those things where you have to be really hands-on. But I think the the top three things are going to be just understanding what’s happening on the ground. I spend a lot of time I’m above one of our retail stores right now.

[00:05:51] I work above another one of our retail stores making sure that our kind of core teams, or just actually like in the streets and talking to customers and talking to buyers and ensuring our hand is on the pulse. Because if we’re making [00:06:00] decisions like in a corporate vacuum, that’s not going to work. So basically having our hands on the pulses is number one.

[00:06:05] Number two is communicate. Intercompany, so it’s just what are the meetings where people are actually sharing information back and forth and sharing the challenges back and forth. And a lot of what I ended up doing, it comes into problem solving into a company where it’s like, what does things that just can’t get done or aren’t getting done that should have been done like three weeks ago, and why, and like, how do we, how do I jump in and make sure that gets becomes prioritized and how do we set it up? So that works well in the future. And then the last piece is scenario planning because there’s so many things happening in cannabis. Okay, what if their organization is.

[00:06:31] What a federal legalization happens, but we can’t be vertically integrated. What if, the mark, the market pricing falls by 40%, which is, can happen in a heartbeat in cannabis. However, have we outlined at least a couple bullet points for each of these things, so we know what’s going to happen, or we know we have a, the start of a plan based on what’s going to function.

[00:06:49] And so I think those three things like, again, being in the trenches, communicating within the company and then doing planning for multiple scenarios is how I approached this on the. Oh, I

[00:06:57]Bryan Fields: love that you shared about the scenario planning. No, one’s kind [00:07:00] of brought that to our attention and for, so for so many conversations, you always wonder, is that a kind of constant consideration by these leaders of these companies?

[00:07:07] Because you’re right, like with all the happenings that go on, you need to have these scenarios playing out because you can’t be reactive. You have to be proactive. And I’m just assuming you’re in these whiteboard sessions, the variables underneath it probably constantly changing because the input that what’s coming in is Hey, maybe safe will pass tomorrow.

[00:07:22] Will you be able to get some more push for federal legalization? So how does that go down when you’re scenario planning, are you constantly tweaking those variables and moving that. Yeah.

[00:07:30]Oren Schauble: If you obsess too much about it, then you get lost in continual planning. And so really it’s at least a like edited is trying to how has the scenario changed monthly basically then going into this next month?

[00:07:40] What are the variables have changed? What more have we heard? We update any of these current ideas that we have, and then ask you the question. Okay. In the various departments, how does that impact what we do with them to either prepare for a future scenario or to act on what we seeing happening.

[00:07:53] Yeah, too much, you can get an analysis paralysis, if you’re constantly thinking about it. But a lot of this, I just learned from I’m a very like mathematically focused [00:08:00] person. And when I was more focused on sales in previous jobs, this is how I would work through my sales process would be just like, objection, planning, essentially.

[00:08:06] Okay, if they say that. What do we counter with that and preparing that the reps that worked for me and stuff with that kind of thing. And now it’s just a, like a mental model that is just really useful in, in life. And then in particular, in a business, that’s as complicated as this. I have a

[00:08:19]Kellan Finney: question.

[00:08:19] How do you blend like the hard data from a mathematical perspective with the anecdotal kind of conversations you’re having with consumers?

[00:08:28]Oren Schauble: Yeah. It’s perspective. It is interesting. We weight them both pretty heavily because we find that the data can be a little bit behind. So a lot of what happens is do deals with fluctuation in price.

[00:08:36] And so we can say, Hey, we are if we’re hearing a fluctuation in price on the ground, that might not make it into like store data or sell through data for a month or two, because the time it takes for things to go into production and things to catch up. So I w I think we rely a little more on what’s happening.

[00:08:50] Anecdotally on the ground, especially when it comes to pricing or when it comes through regulation than we do on what the data is saying. And the data is more supporting of that. When we look at the data is more of, okay, like what [00:09:00] is the market doing overall, like macro level analysis?

[00:09:02] Are these categories growing that we believe that we’re a part of, or is the market, is the California market dipping and we’re going up or yeah. How can we validate our performance versus these baselines as well? Yeah. Which one of those categories? There’s a there’s a couple things, I’m really personally excited about the drinks category and used to be posts a lot about this on Twitter.

[00:09:21] I don’t think that’s a short-term win whatsoever. I can basically tell you from what I, owning an operating multiple dispensaries right now is that it there’s just a room that takes to. Units like that. And then the value per dollar of those units went like an extract. That’s the size has a hundred dollar value.

[00:09:36] And again, a drink that size has, $6 value. It just isn’t, especially when you’re space constrained, it doesn’t make sense. And but I do think that, when we’re outside of the dispensary industry, And we’re looking at, okay, am I gonna be able to buy cannabis at whole foods or Erewhon or, whatever the equivalent is, across the country, like the drinks are probably that Trojan horse, and and so I think that’s something interesting on a macro level in the future, but I think that the companies that are focused on that now aren’t necessarily going to have any amount of leg up [00:10:00] to when that actually happened. But know other than that it’s really still a, I get excited because the California market’s moving so fast, we see constant new products and I just love new products and packaging and it just gets me excited.

[00:10:10] And so I look at all that, but really, the business is still tactical. It’s about who has great flour, who has consistent quality and the things that they are doing and, and do people feel an affinity to your brand? And so the product end of it is almost what’s exciting to me personally, it doesn’t matter as much.

[00:10:25]Bryan Fields: Yeah, I was

[00:10:25]Kellan Finney: just going to say from a, an innovation standpoint, it’s gotta be challenging to build a brand around, say like a specific product. The product landscape is ever changing. So like how do you grab on to maybe a new trendy product and hope that it, that trend lasts a year

[00:10:42]Bryan Fields: to implement it from a manufacturing

[00:10:43]Oren Schauble: perspective?

[00:10:44] So we actually, we think and talk a lot about this and part of that, and the Kroger brand is actually really based around dealing with that. So Chrome is our biggest brand. It’s focused on high potency and but the approach we take to it is we have staple skews. So we have our, of our mini cookies.

[00:10:56] And we have our. Yeah, we have our extracts. We have our flour that we always [00:11:00] have no matter what, and they’re big sellers for us. They’re all six degree presences in the category or more, and those are always there and we’re working on how do we make those consistent people always come in and shop for them, how we do good with it.

[00:11:11] But then we’re rotating in all these other basically categories or products. We have a big lineup of things because we want to keep that excitement there too. And if something does really well for instance, our thousand milligram tinctures are doing well enough that. At some point no longer be, Hey, this is an exciting thing we’re doing.

[00:11:25] And it might be one of those core products that we always have, or we’re rotating in a ton of stuff, you’ll see it online. Like we did a hot sauce seasonally for the holidays, like a thousand milligram hot sauce. We did a Delta 8,000 milligram cookie and and they come, they get.

[00:11:38] Sometimes, if they’re on the menu for a couple of months, sometimes they’re on the menu for six months. Sometimes they’re gone in a month, I’ll bring them back for four months. We’re continually throwing those things at the wall because it’s an opportunity to have a conversation with, buyers and people at stores.

[00:11:49] It’s an opportunity for consumers to get excited about the brand. And then if it’s a trend, okay, guess what? We designed some packaging, we ordered some things, we sold it, we made money and then we’re able to cut it and be like, Hey, that was seasonal. Or, Hey, [00:12:00] this doesn’t work, but also if it has legs, we can transition it over to being a core part of the brand.

[00:12:04] And this isn’t something I would ever recommend in like another industry because of the amount of work it takes to do R and D and do those. But in this industry, Just keeping up with, okay, do we think this is going to be a thing? Can we latch onto it? Can we do it well? Can it be unique?

[00:12:15] Can we have the crowbar angle is a is something that I feel like has helped keep our brand alive through a lot of ups and downs and changes inside the industry.

[00:12:23]Bryan Fields: I think that’s so important because it gives a consumer just continuous reason to come back and to see new products. And I want pick on some of those details.

[00:12:31] When you’re setting up, let’s say the hot sauce is there like a minimum amount. The team is willing to invest. And then is there a metric to determine success, to say, Hey, it’s worth doubling down on this over the next quarter. How do you guys define those metrics?

[00:12:43]Oren Schauble: Yeah, the sauce is actually a great example for that.

[00:12:45] So we’re lucky to get the point where we make enough edibles and do enough things where the R and D component of this with our vendors is essentially they’re happy to develop something for us because they know that we’re going to order a certain quantity. Like for us, we don’t want to do less than 2000 to 3000 units of anything because inside of a cost model, if you’re [00:13:00] amortizing the cost of testing and R and D and things across a certain volume, like we want to be ensuring we have.

[00:13:05] For every single skew. So if we have three flavors or for instance, and so they know our partners know we’re going to be doing two to 10,000 of any given thing, even if we don’t keep it. And so for them, they’re incentivize to help keep that R and D together. So we have a constant flow of. We’re throwing at the wall that don’t even make it out.

[00:13:21] And the hot sauce is one where we’re like, oh, this actually tastes good. And the costs actually works really well. Okay. Let’s put out two flavors. We did cook a couple thousand units of each and it sold through faster than I think we thought, at the first couple of weeks where people were like, we want to do this.

[00:13:34] And then all of a sudden it was bigger on social and then it was just gone. And so then we look at that and we go, ah, Yeah, we developed this with a partner. It didn’t cost us a bunch of R and D. We, we, we made it with them. They made money on it. We made money on it. We got excitement in the market and then is it okay?

[00:13:47] Is this something that was good seasonally? We want to continue doing this. Are people going to buy a thousand milligram, hot sauce all the time? And we basically were in the middle and this one we’re like, Hey. Like this isn’t something we think is a constant staple, but it did go better than expected.

[00:13:58] Like I thought it would probably take a few [00:14:00] months to sell through them all. And so it’s like, all so maybe it’s like a feature project. We do it more frequently. Hey, let’s put on another flavor for four 20 let’s, let’s do it two or three times a year, and so we gauge that velocity on that.

[00:14:10] We’re always throwing a lot of things at the wall. Cause even with the excuse we do have, it’s can we update flavors? Yeah. I think it’s a combination of the cannabis customer. Always wanting to try something new and then millennial shopping habits in general, where it’s okay, take me to a.

[00:14:21] Exploration is part of the excitement of a shopping trip or something that is a completely different mentality that for consumers and I think was generations prior hat where it’s okay, can I just get wonder bread again? It’s the same thing

[00:14:32]Bryan Fields: also, we’re still so early on in the process that the products that you know, might become mainstream might not even been developed yet.

[00:14:39] So I love the idea that you guys constantly throwing new categories at the wall to see, what is there, because that’s how you test like new innovative products and you push the boundaries from a customer.

[00:14:47]Oren Schauble: The also the nice thing too, is we have this big catalog of things that we’ve tried that, again, we may not keep in the California market, but when we look at okay, we’re, we’re licensed in Arizona, we’re licensed in Oklahoma.

[00:14:56] We have constant people hitting us up to try to bring the brand to new states, even new countries. [00:15:00] And I get to go, Hey, here’s a. Things that we’ve done and based on your regulations, based on what you think the market works based on your capabilities and your facilities, if you want to license the brand or build the brand, you can pick from this huge range of things.

[00:15:10] And and we already have the packaging already designed. We’ve already validated the recipe. And I think that’s something that people don’t think about is like that footprint. When I look at. What can Corova be across the globe is, we can have all these different products. It’s still meet this kind of high potency concept.

[00:15:23] That’s still work with the brand, but there are differently represented throughout. And so it’s also a sneaky way to approach having a really effective, strategy for expansion when that time comes. Yeah. He also have metrics to

[00:15:34]Bryan Fields: back up how it’s sold. This sold really nicely during this month and we’re going to run out another flavor and that just provides more value when you’re having these conversations, especially with states like Arizona, or maybe even the east coast.

[00:15:44] Newer to markets and still learning about consumer. Yeah, I think

[00:15:48]Kellan Finney: for sure, demographics also probably play a role too. Like the east coast is a different culture than the west coast. So a product that maybe flopped on the west coast might have a huge success on the east coast. You know what I mean?

[00:15:59]Oren Schauble: Cause I Corova Yingling [00:16:00] collab, for, from a Philly heads, where that’s.

[00:16:04] I completely agree, demographics, time of year, all that kind of stuff matters. And so we have a lot of this data, a lot of these things together it’s a lot to manage, but just knowing we have all these things pieced together for the future is helpful as well. So let’s talk about being

[00:16:16]Bryan Fields: vertically integrated and one of the challenges so most can understand actually how challenging it is to be vertically integrated, but from your position, what’s one idea or concept that most wouldn’t understand about the.

[00:16:28]Oren Schauble: Yeah, what’s biscuit, it’s running, we run seven businesses, not one, like that’s the biggest challenge, right? Is sometimes, w I think late at night, I’m like, Hey, what would it be like to just do one thing really? It would seem much simpler, but then, you get the you’re never amazing at anything.

[00:16:40] You’re good. At many things, maybe you’re amazing at one or two, if you’re lucky, but also you’re hedged we go, the market’s changing. These prices are going down. Oh, we can lean more in this direction with the business. It just gives us more fluidity to be able to survive. Potential changes of the cannabis industry.

[00:16:53] And that’s how it helps me sleep at night, on the other side of that, knowing that like, all right, guess what if all of a sudden everyone’s vertically integrated, we can lean [00:17:00] on our own stores. All of a sudden, if, if you cultivation prices drop to X amount of level or are they, or they rise to X amount of level, we have our own, we have control of it.

[00:17:08] But yeah, the hardest part is just running. All those different businesses effectively is is never going to be, you’re never gonna be as proficient at that. As you are going to be running one or two things. Really well

[00:17:17] said,

[00:17:17]Bryan Fields: Kellen, you want to expand on that from an operational excellence standpoint?

[00:17:20] It’s gotta be incredibly challenging to do what orange. Yeah.

[00:17:23]Kellan Finney: It’s real what you’re running like an agricultural focus, big knit business chemical refineries, last pharmaceutical regulated business, as well as like a retail CPG business, all wrapped into

[00:17:34]Oren Schauble: one distribution and trucking.

[00:17:38] It’s all, it’s a whole set of things. And then like in

[00:17:40]Bryan Fields: certain

[00:17:40]Kellan Finney: states, right on the west coast, like in Washington, you’re not allowed to be vertically integrated. So like this sweet business model that you guys have worked so diligently in Califor. You can’t just plop that right into Washington with the same results you have to play almost a different game.

[00:17:54] So like what has that been like from an expansion

[00:17:56]Oren Schauble: standpoint? We already have, so in Oregon, for instance, we have brands, we [00:18:00] have farms, we have distribution, but we don’t own any stores. And we’ve just looked at the way that the retail model works there and, potentially in the future, it might all work together, but we, it’s like the presence we have, but what’s nice is we can do those versions of cutouts.

[00:18:11] Our business doesn’t have to be vertically integrated in California because it’s so brilliant. Yeah, Martin margins are super low. Prices are low. There’s a thousand brands. There’s all these stores like we need every penny, we can squeeze out of anything, and this that’s a great way to ensure we do that to survive and succeed in California.

[00:18:27] And the reason you want to succeed in California is it’s the size of all the other markets combined, essentially at this point in a. inside US And so it doesn’t matter. As long as we are a we’re surviving there, we’re building what we can there. We know, Hey, we’re well equipped to, in any market where everything else is easier by comparison.

[00:18:43] So we’re ready for that. And then we can, we know we have certain level of expertise. We’ve had to work through hyper competitively inside each of these that when we go and say, we’re going to do retail in Louisiana or whatever that is. And in X amount of time, we’re able to apply our expertise from it.

[00:18:56] But yeah, a lot of this just comes from being. fluid And just knowing, like I’m not [00:19:00] waking up today and I’m dead set, and this is exactly how we have to operate. If the conditions change, we need to move with the flow. So

[00:19:07]Bryan Fields: important. So let’s talk about some of those roll-ups your team has done. Obviously you’ve been pretty loud with some of your ropes.

[00:19:11] Can you share some information on some of the most recent ones and what’s on

[00:19:14]Oren Schauble: the. Yeah. Yeah, for sure. So I can’t talk as much about the pipeline obviously, but I think we are looking to expand. Yeah. So we, we acquired a big retail, a single store with a bunch of pending stores called peoples. And so people’s is a couple of the most prominent dispensary locations in California period.

[00:19:31] Just big freeway frontage people’s dispensary in orange county and the suspensory called airfields. In San Jose, they just got acquired by our friends over at gold. Flora are like two of the really. Yeah everyone knows on people. See them if you’re in that region. So we acquired that and which was a big deal for us to have, instead of us having a couple of small shops have a really marquee retail store that we can that we can be prominent in.

[00:19:50] And and then to be able to open those additional licenses underneath it we acquired a delivery service in Sacramento, mainly because the Sacramento. Is a, there is no huge presence from the really large delivery services [00:20:00] out there. And we thought it was an interesting opportunity to be able to get a foothold in that market where it’s a little bit more complicated to get retail.

[00:20:06] None of the big players have delivery yet. That’s really taken off. And and right now we’re, we’re looking at a kind of a wide range of things, we’re looking at. What brands fit in our portfolio and really help us work through things. What retail helps us get new locations to help, make sure we have reached all the way across California.

[00:20:21] We’re always evaluating new opportunities. This is an expansion driven industry. And I think that’s how we’re looking at what brands and categories, really fit with our portfolio and what retail really fits with our footprint. But now, we have five existing dispensers.

[00:20:34] We have the delivery service. We have the sticks brand or the cabana brand, the Corova brand district hubs and Southern California, Northern California, Oregon to era to indoor grows in Oakland to greenhouse slash outdoor grows in Southern Oregon. It’s a pretty big footprint. And so we’re just kept continuing to add to that, but, yeah, a lot of those challenges were not just logistical, cultural as well.

[00:20:52] How do you make people feel like they’re part of a team? How do you feel like you’re all fighting for the same thing? Those are things that we have not, finished and gotten to the point where we want to get them, but we’re working towards it every [00:21:00] day. What is

[00:21:01]Kellan Finney: The, what was the politics like in terms of acquiring.

[00:21:04] That people’s dispensary. How big was that talk about how competitive California is. That’s a, those two people’s dispensary’s are marquee locations. They’re beautiful stores. The two story one in Santa Ana is phenomenal.

[00:21:16]Oren Schauble: Yeah. guess the Baltics is it’s more of, we’d already had a store in San.

[00:21:18] And so we were already competing inside the mix there, but, getting that was just a I don’t, there was politics around it, but it definitely was a, it was eye-opening for a lot of people at the scale we were trying to function at and the ambition that we have going forward.

[00:21:30] Because, we have been a like a mid-sized private group prior to this kind of merger. We merged with Terra tech. They were a bit of a language. A company on the markets and you combine a ambitious kind of tenacious, medium-sized group with that.

[00:21:43] And then immediately start doing big name acquisitions, I think was a, what was eyeopening. And so there’s a lot of just kind of people saying, all right, now we’re we’re on the map. We’re on the radar people for what we’re trying to do. And we’re just continuing that trend with how we’re going to execute throughout that.

[00:21:56] When you’re

[00:21:56]Bryan Fields: looking to buy the people’s dispensary or the distribution model, how [00:22:00] does your team like look at it from an internal standpoint and knowing this is where the capital’s best going versus let’s saying, Hey, we need to hold this capital for future. Is there like internal numbers you look at from a forecasting standpoint, or you look at more about what it’s currently doing now and how you can operate.

[00:22:14]Oren Schauble: Yeah, I think there’s a couple of variables on that. There’s obviously the business variables okay, how much cash does this generate versus how much cash we’re outlining? How’s it changed the overall figures we have, what is the upside potential that we could add to it? How much can we expand from there?

[00:22:26] And then, what is it playing into a category that we feel has a greater macro level value? If we’re looking at. Take brands into different states in the future. Or if we’re looking to create a narrative that helps support, what what we’re trying to do as a group. So there’s really a lot of factors.

[00:22:40] It has to be looked at one by one, but a lot of what we’re looking at currently is like, does it have the scale where our kind of. Can I can really help build it right where we have enough people, enough brands, enough things that we’re already doing. That if we rolled into that system, it could run significantly better.

[00:22:54] And I think that’s a big part of how we look at what we evaluate. Nice.

[00:22:59]Bryan Fields: Let’s talk about the [00:23:00] distribution. If I’m a brand and I’m interested in partnering with your team, how does that work? Do I have to hit certain minimum order quantities? We get people to hit us up all the time that ask about these types of partnerships and I’m sure you do as well.

[00:23:12] How does.

[00:23:13]Oren Schauble: That’s why I basically I’ve stopped referring to, our, that operation as distribution. And now I kinda refer to it more as an accelerator because, we’re just, yes, we’re have trucks on the road, but really what we’re doing is a combination of, since we own our own stores, if you’re a brand that comes into our district, I like to basically say those stores are now essentially your stores.

[00:23:30] You want to try specific promotions. You want to try new styles of portion dicing. You want to evaluate products for you, bring them to the market. This is your playground to work with us, to work with the team, to feel like we’re one place to do that. And and then we have these different piecemeal options of whether we help you just with the trucking, whether we help you with trucking and sales to work through that.

[00:23:46] And so where our sweet spot is really, if you’ve hit a certain level of brand growth, like low six figures where you have your product market. Yeah, people are interested in excited by your brand, but you have a hard time taking it to that next level because that’s, a lot of people with a good [00:24:00] concept and decent execution can get to there, but then taking it to half a million or a million dollars a month in sales, you really need all the tactics of how to succeed in retail.

[00:24:08] You need the network of people to support it. You need that kind of trial and error basis of what we’ve built. And you need people who will tell you straight up, be like, yeah, Hey Patrick, we’re used to change, or Th this is our data. It is Christ who doesn’t work. And so if we find people that have achieved that level that are humble enough, that they know that they won’t need to work with people, cooperatively to get to the next stage, that’s really perfect for us, but we also only do things that they compliment our portfolio.

[00:24:30] I don’t want to have four cartridge brands on our menu that our sales reps are trying to sell. That doesn’t make sense. I want to have kind of one. At least by price point by category. And so you’ll see when you look at our district lineup is like we have a really prominent sun-grown brand. We have really, we have our existing outdoor brand.

[00:24:44] We have a drinks company in the category, we there’s a, a cartridge brand that’s Thor focused on all natural. We have a sustainable flower brand. Like they’re things that can stand on their own in their own niche. Rather than trying to build a full 50 company distribution, I’d rather have the right 10 that are [00:25:00] expanding in the right way to fit in the right categories.

[00:25:02] When we go to a shop, we could say, Hey here’s like a, best-in-class offering the console up a large amount of yourselves. If you want to lean in with us.

[00:25:08]Bryan Fields: Does any of those data points help lead back into what you said originally about the hot sauce in making those inferences for short-term decisions for let’s say new product.

[00:25:17]Oren Schauble: Yeah, I think all of this is just with a more open conversation with more intelligent people, seeing things in different ways than the market is great. And just the fact that we can all have a conversation between, the owners are disturbed brands and the retail partners that were really deep with our own retail stores and validate things is huge.

[00:25:30] And I think it’s a significant advantage for kind of everyone working together. Large majority of our listeners are

[00:25:35]Bryan Fields: east coast speak based. What is one concept or statistic about the California market that would surprise them?

[00:25:41]Oren Schauble: I think they’d be surprised when they see the weed versus the weed they get on the east coast.

[00:25:44] Yeah. Y’all, can’t keep smoking that sticks and dirt forever. You know what I mean? You gotta ask for more from your, if your local MSO, some of us get good stuff. Oh, Hey

[00:25:51]Bryan Fields: my guy.

[00:25:53]Oren Schauble: No. Yeah, I think that’s the biggest thing.

[00:25:55] I think we see is people will be shocked at how refined.

[00:25:58] Product experiences are [00:26:00] like you walk into you go to our dispensary downstairs from where I’m sitting right now. And if do you want stuff that’s hits you normally, do you want fast acting? We have that in within every variety, eight different types of carts, like that are, not just by flavor, but Hey, today’s live residents full spectrum.

[00:26:12] It’s know there’s a, it’s just pure. HDE, there’s just so much variety. So many experiences, so many cannabinoids, CBD, CBG, THCV, is it the Delta eight stuff, the variety and the efficacy, and then how refined those products are, find someone through a label on it. They’re fully merchandised, et cetera, is I think is shocking for people that have only experienced kind of what happens inside these dispensary’s in the kind of for lack of a better term, like what less developed markets and, just, it is, it’s a full CPG, it’s walking into a whole foods, and it’s all taken super seriously.

[00:26:39] The product quality is all extremely high. And I think for people that haven’t experienced that, and it’s similar in Washington and And Oregon, and to a lesser extent, Arizona and Nevada but if you haven’t experienced that, it’s extremely eye-opening and then people walk in and be like, oh, I didn’t realize it was like this, there’s legitimate brands, there’s hundreds of options.

[00:26:55] There’s all these things I haven’t heard of before. It’s a, it’s pretty eyeopening. [00:27:00]

[00:27:00] Oh, for sure. And that is definitely a problem with the customer too. We have to always remind, especially we talked to staff, so if we have to dumb it down, like they don’t, people do not understand these concepts, they’re not, and it takes a ton of research.

[00:27:08] It’s like, how can we enable them on that journey is a, always a conversation point.

[00:27:12]Bryan Fields: I think what you said it. It should it surprises people. I remember Kelly took me to one and tell this story and I walked in and I was just blown away. I was like, there’s a million products here I’d walked into.

[00:27:24] I was expecting to have six products, very like low experience. And I walked in there a million products. Almost dumbed down. I was like, I don’t even know what to do in counties. What do you want? Do you want edible go into that corner and like pause. And I think for a lot of people here in the east coast, I’ve never been to a dispensary.

[00:27:39] They’re going to be surprised by the experience because they are conceiving these initial thought processes because for most of them, the only experience they’ve had with cannabis is someone dropping it off.

[00:27:49]Oren Schauble: Yeah. Yeah. Completely. It

[00:27:51]Bryan Fields: controlling that experience

[00:27:52]Kellan Finney: is so important for brands right now, not only from an educational standpoint, but from a macro perspective as [00:28:00] well.

[00:28:00] You know what I mean? And having the ability to cause the budtender consumer interaction is absolutely paramount to creating that successful brand awareness and brand loyal. So what do you guys do to educate your budtenders? Do you guys have like a specific system that you implement at new dispensaries that

[00:28:18]Bryan Fields: you move into?

[00:28:19] Like

[00:28:20]Oren Schauble: we do all kinds of stuff. It’s a constant working flow. So we have two really great trainers to work across our dispensary’s who kind of, that’s all they do. And so there’s onboarding training and there’s ongoing training, but it’s even more challenging than one. I think of two. Cause we have people that walk into the dispensaries every day and we’ll talk to their budtender who is in, in, we have pretenders from all walks of life, but in most cases they’re.

[00:28:38] Early to mid twenties, maybe they did a food service job before this, maybe they were at a grocery store at just new world or one of those kinds of things. And they’re moving into the cannabis industry if they have job experience prior, and they’re saying, Hey, I have you, I have osteoporosis.

[00:28:50] Like, how can you help me? And and so for that person, who’s, that’s a heavy. Yeah. And so we have to I will give like a hundred percent credit to the team. That’s worked through that training. That’s a big part of what some, what we got those [00:29:00] intangible from the people’s acquisition is because they see people will see more people a day than all the previous dispensaries we had combined.

[00:29:06] And it’s also a very different demographic. It’s like an older demographic. So they’ve really had to work through how do we have this consultative experience that, that works for that crowd and works at scale. And so we took a lot of their training methodology and. Especially for onboarding new tenders through the rest of our organization to work through, okay we’re treating symptoms, we’re not treating, an actual thing and even treating is a complicated word.

[00:29:25] So we’re helping relieve symptoms. We’re giving people the choices, we’re helping them track those choices, and we’re educating them on all the different parts of the plant. But then a lot of it comes down to there’s so many new products, so many new things. And so we do a lot of R and D sessions, a lot of product that actually gets given out to the budtenders.

[00:29:38] And then we have we have slack channels in our company where, but tenders basically review products for. And the other people can can look at, and it’s really interesting with those involved into it because I go in some of these and it’s essentially poetry. That’s like being written inside of them.

[00:29:48] Like people are really going in on these descriptions and for some people that can actually eloquently write and things like that, it’s a great opportunity for them to be able to share that knowledge. And for some people that aren’t that way, but who can consume it and to take it in and be like, oh, this [00:30:00] guy whose opinion I trust, I’ve got to get Jared to really rise, eloquent stuff inside of these.

[00:30:03] If one of our other bartenders can go, oh, I really trust his opinion because I know the things that he likes. He puts a lot of work into his reviews. I’m going to recommend this based on what he said. That’s it’s really getting that kind of peer process in there because when brands come in to train, they care about selling points and intangibles of their history and things that customer doesn’t want to know they want to is this.

[00:30:20] Why is this going to help me sleep differently than how that helps me sleep? You know what it’s like? There’s a, there’s these things that, that the brands just want to get their history across. And so we try to take a lot of that into our own hands and they give a lot of power to the budtenders to work within their own groups.

[00:30:32] But yeah, it’s constantly a conversation of how do we improve on that? How do we make sure we’re offering a modern experience? And a lot of what we’re focused on this year is translating a lot of that to. And translating that into recommendations. And how do we give people some tools for their journey above and beyond talking to someone?

[00:30:46] Is it like a downloadable PDF where you can fill out stuff about products and how you felt and what turkeys they have? Like, how do we make it more of a overall experience? Cause that’s been totally, hasn’t been unlocked, right? There’s no, when I order on a delivery app, I don’t get to say, oh, I like this product or [00:31:00] not like this product.

[00:31:00] And it recommends me things when I liked a couple of products based on the terpene profile, if we’re not there yet, but. And it’s something we’re actively thinking about as we try to build our modern cannabis experience, that delivery

[00:31:10]Bryan Fields: service

[00:31:10]Kellan Finney: would probably be really good to understand that a little deeper, a.

[00:31:14]Oren Schauble: Oh, yeah. Just, until I try to do, trying to understand every piece of the market and see what we can build there and look at, as you guys think you guys had Collin on prior, right? So he’s really focused on how do we build a, like a technology stack that really enables the business, because right now, most of the cannabis industry relies on people who’ve built these little software pieces that are all like, okay, but they don’t, they’re not really, they’re incentivized to improve their software.

[00:31:32] If they’re not incentivized to have a great customer experience and us being able to build all of our own tech internally, and we’re developing almost everything that we do now, ourselves. Is, it gives us an opportunity to look at that from the customer experience standpoint, not from the I’m trying to sell you a software standpoint, the sharing

[00:31:46]Bryan Fields: of the information internally, and then pushing it out for the outbound side.

[00:31:49] Kind of the origin of the idea of the buyer’s

[00:31:51]Oren Schauble: corner that you started really releasing. Oh yeah. No, that’s more than just a, I’m trying to put content out there. I feel like a. Yeah. Cause people see to interested in those products and I’m really interested in them and we’re we’re [00:32:00] looking at them, we analyze we’d get tons of stuff sent to us.

[00:32:02] Obviously Edward’s always trying to sell you something. And I just like to highlight what those are, but I was trying to think of, okay, everyone’s, got their videos, talking about their brands and their companies and everything. That’s come on top of what we’re seeing in the space, how we analyze and look at products what’s different and then appeal to the audience outside of cannon.

[00:32:14] I understand that not everyone that is either going to invest in our company or that is going to follow, myself or call them on Twitter or anything like that is necessarily a cannabis consumer, but are they interested in packaging? Are they interested in entrepreneurship? And can some of the things we could talk about from that Hey, this is, this is how this packaging differentiates itself on the shelf.

[00:32:30] It’s interesting whether you’re looking at cannabis or not, I’m trying to just have content out there that is more universally appealing to, to to, to CPG. I think we just see so much interesting stuff, I asked. Yeah, you commented on it earlier. Yeah, I got last night, I got these little like cordials and these little cannabis cordials, and it’s just I’ve never seen anything.

[00:32:45] Like it I’ll make a video about it and people are interested if they have questions. And it just it’s an exciting thing to share. Cause product discovery is such a big part of the cannabis industry. Yeah. I

[00:32:53]Bryan Fields: think it’s really well done. It’s informative. It’s educational and it shows value. And I love the fact that it’s not your brand.

[00:32:58] You’re bringing value and [00:33:00] education to the space. Heavy pushing your own products this way, which could be easily done. But you’re not doing that. And the cordial products were really interesting. I’d seen that. And I was like, is that a tincture? Is that a beverage? Which I didn’t think you were gonna respond to?

[00:33:11] Is that a five-hour energy replication? I was like,

[00:33:15]Oren Schauble: Yeah. It’s just like me. There’s so many unanswered. The funny part too, is I’m not really sure. I was like, have you asked the question? I’m like, because of beverage, because of the cause of the potency, it’s just it’s a, it’s interesting to see where things are going.

[00:33:24] And then also see the feedback we get from people when we when we put that stuff out there, are they commenting on the packaging or are they commenting on the product? So they want to try that, and what does it look like? And so I’m interested, I’ve got a couple of those recorded and we record a few more and just see what catches on.

[00:33:35] Like I said, kinda this new world we’re living in where, whether it’s investor relations or brand awareness, What do we put on the brand’s Instagram account? Or what do we put out in the press release? It’s like, how do we engage in a dialogue? And that’s what Colin I’ve been tried to do on spaces.

[00:33:45] Every Friday. I just wanna tell you some of these videos, but it’s never going to be hugely successful upfront. I’m not expecting to have a hundred thousand views when we start off. It’s okay, is this getting somewhere in the conversation? Are we putting enough of them out for people to care?

[00:33:56] And I want to make sure, I also feel like it’s a great way to get feedback too, especially from other [00:34:00] marketers, what excites people or what gets noticed because oftentimes it’s different than what.

[00:34:04]Bryan Fields: Yeah, and I got to hand it to you guys. You’re out there in the public. You’re building directly with the consumers and you’re taking the feedback from them.

[00:34:10] And I think a lot of episodes and a lot of these other big players can learn a lot from what you encounter doing. And I definitely tip my hat to you guys because you’re doing it the right.

[00:34:17]Oren Schauble: I appreciate Twitter’s been great. Cause I have, I probably talked to a hundred investors in my DMS, over the last couple months, I’ve toured easily 15 to 20 to our stores.

[00:34:25] Cause I’ll happily be like, Hey, you’re in orange county or you’re in, you’re coming to LA I’m there. I would prefer that you do it with me. I want to know what you think. Cause we have some people have a history, they all invest for different reasons and like that level of availability. For the investors and for me, I’m sure they’re excited and stoked to be able to have that dialogue directly.

[00:34:39] And also I genuinely want to know what they’re thinking and not just be like, okay. Some graph presented to me by an IRR firms telling me what, like the sentiment is let me know what people think in the streets. And, I was never like big on Twitter kind of before this.

[00:34:50] And I think that just having that availability is such a massive advantage and like we should leverage that community as much as we can. Yeah. A hundred. So let’s talk about legal versus

[00:34:58]Bryan Fields: legacy trends. Does your team [00:35:00] analyze, let’s say more of the legacy trends to figure out, what can be brought to the legal market?

[00:35:05]Oren Schauble: No, not really. It’s funny. Yeah. We’re competing, especially I’m in our downtown LA dispensary and there’s like a trap shop right there, like across the street. And so we, we are aware of the illegal market and kinda what’s happening there, but I think they are th they’re focused on doing things that you can’t inside of this like really high potency caps and things like that.

[00:35:20] But then when you actually. Try the product for test the products a lot. It’s just like lies that are on the packaging, and and so I think we’re more concerned about the legal trends and what we can do within our constraints and looking at what the black market’s doing.

[00:35:29] Whereas I think that might’ve been different, two or three years ago, because it’s okay, what’s selling there. I do think that, strain. It’s universal across both but what we’re seeing, and especially from this dispensary we have here is a lot of our customers here are younger.

[00:35:39] They’re more gen Z focused, which I can’t say about any of our other dispensary’s. And I think that they’re a generation that isn’t okay with that. If you’ve been in California smoking weed for a long enough time, you’ve been buying out of a trash shop. And especially if you’ve been there, it would open for 10.

[00:35:52] And so you’re used to the experience. It’s not novel to you, but for gen Z, they have it. And they’re, and so they, their ability to go in and have a different customer [00:36:00] experience and go to the legal cannabis is an interesting opportunity to get this like gen Z and older demo that would never kind of approach that middle ground.

[00:36:07] And then you get like the millennial, gen X who like it’s a 50 50, and it’s really interesting to think through, but I think that the trends were being set in the legal market in college. Do you think that it’s going to

[00:36:17]Kellan Finney: take a full generation to get rid of the legacy market?

[00:36:22]Oren Schauble: I don’t know if that legacy market will ever go away.

[00:36:23] And I only think it needs to either. I, it is look, is competing with it annoying. Sure. Is it is it destroying the, our business not necessarily. And I think it is a it’s something that like, People are, have been selling drugs person to person, and and CA cannabis for forever and the store in stores in California.

[00:36:39] It’s a part of the culture. And look, we get a lot of our best employees have come from that angle. A lot of customers have, may start there and then graduate into the legal market. And I think it’s just a, it’s something that, it’s not like some massive crackdown changes, anything.

[00:36:50] It will always continue. It’s how it is. The main thing is are people, do people have access to safe cannabis? It’s giving them the experience that they want, and and how can we continue building, awareness of the [00:37:00] efficacy of cannabis overall, going forward.

[00:37:02] I

[00:37:02]Bryan Fields: think some people are just comfortable in their routine, in their habit, right? And there’s this trust factor that they’ve had. They bought cannabis from the same guy for 25 years. Why change now? And I think it’s just hard for some people to

[00:37:11]Oren Schauble: change in those. And that’s not necessarily wrong.

[00:37:13] And the price is the price might be lower, and they’re just a lot of it goes there, but look, the market is so huge. It’s big enough for everybody essentially. And and with the, everyone has a huge desire for just massive immediate growth and wealth creation in the cannabis industry that is unrealistic.

[00:37:27] It’s a, and I think that there is the opportunity is huge in a decade. Is this market have a hundred. Size of what it is now, like a completely a hundred percent. And but like that isn’t gonna happen in six months. And if we look at it that way, like the opportunity is there to, to build those generational brands, build these real companies have that infrastructure.

[00:37:43] But that doesn’t mean that we have to stamp out every single, stolen who’s growing weed and then selling it to their friend. That’s okay. It can all live harmoniously. The thing that we, biggest thing we care about is it. Is it controllable is do people have experiences they can feel good about?

[00:37:55] Because what does hurt is if someone goes there and buys the edible, it’s too much, or from brother from a friend or for someone else, it has a [00:38:00] bad experience. It makes them never want to try it again, versus having a experience that could’ve been perfect for their first time. I think that stuff really does matter.

[00:38:07] I agree with that. That was really

[00:38:08]Bryan Fields: well said since you’ve been in the cannabinoid industry, what is the biggest mistake?

[00:38:14]Oren Schauble: No. I think the biggest misconception is that people are just doing it to get high and have fun. Whereas we see it. It’s so much more tactical than that. Like people come in, let’s say half our customers come in and just have a good time.

[00:38:23] The other half are coming in to solve a problem. They’re saying. I can’t sleep. I have this pain, whatever that is, and they’re solving it with cannabis and whether that’s a gummy or a tincture or a flower product, and it is so much more that, and it is so much like all walks of life. Like our spot dispensary in Santa Ana, where our office is above.

[00:38:39] If you get people in scrubs, construction workers, folks, young folks groups. It is every single walk of life. It’s not just like a bunch of people that are going out to party, and they’re all trying to like, a good chunk of them are trying to solve like real issues in their life. And so I think that, a lot of people assume that it’s essentially akin to alcohol, when really it’s a tool.

[00:38:55] It spans wellness, Hispanics like kind of medical relief and it spans recreation. And I think [00:39:00] that’s something that, The mass public has. You have to understand. It’s a really powerful concept. Before we do predictions.

[00:39:05]Bryan Fields: 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

[00:39:12]Oren Schauble: it be?

[00:39:16] Yeah, I would say to be to prepare yourself or your organization for for change. The biggest thing that you can do to be successful is that it’s innately humans having any problem with change. And if you can build a culture of people and you can build your own personal kind of mental model or approach where changes easy changes, natural changes a part of your day.

[00:39:32] So you can make decisions on the fly and you can move things over and you’re not stuck in your ways. Then you guys have such a higher chance of succeeding in something that’s like an emerging market or complex. And our entire world is becoming an emerging market and complex. Everything is changing around us.

[00:39:45] And so if you, can you make that mental shift, both yourself or your team or your company or your group of friends, you’re going to be really well equipped for what’s coming in the future. I

[00:39:52]Bryan Fields: like that. Yeah, me too. All right. Prediction time. Orrin. What can wide eyed east coaster east coast [00:40:00] operators duplicate from west coast markets to position themselves for potential.

[00:40:03]Oren Schauble: I would say just really focusing on refocusing on flour and strains and what can be done like consistently at high quality and like raising those quality standards. Cause I think there’s a just because in virtue of being in the light in the market, whereas only a handful of people competing and the customers are already coming, there is an opportunity to rest on your quality standards or on your laurels.

[00:40:20] And so if you’re a kind of company working there, it’s no, I think you need to be constantly working on improving that quality, whether you’re competing or have to, or not because you are the standard. What’s around you right now, the standard is okay. When you can ship anything from California, anywhere in the world, or from some of these small boutique growers in Canada, they’re amazing anywhere in the world.

[00:40:36] Are you able to compete with that? And I think that that’s a key thing to think about, and then, and for customers, I think I’d just be prepared for so many more cannabis experiences than you could ever have imagined that are going to do so many good things for you. And to be really excited about what that future is.

[00:40:49] I

[00:40:49]Kellan Finney: think the east coast, it’s a good question. I was gonna, it’s gonna take origins. Honestly I think organic growth is probably something that needs to be focused on more than anything else. From an east coast [00:41:00] perspective. I think a lot of companies on the west coast. That are no longer in business anymore, got in trouble from stars in their eyes and dollar signs and thinking that they were going to come in and just have this massive opportunity to build a tech company, if you will, and have it explode in terms of the market size and everything.

[00:41:17] So I think that by focusing on like a small organic kind of facility and an operation that’ll inherently lead to a higher quality product, and I think that’s the only way you compete in. These new markets now, especially with existing MSOE, having a presence there. It’s not going to be like when Oregon’s market came online five years ago and there was high quality stuff from a legacy grower.

[00:41:42] And there was stuff from a guy who had never grown before sitting on the shelves next to each other. I don’t think that’s going to be the case in most east coast dispensers. I think that it’s going to be a much higher competitive market, just because you have companies with so much more experience entering those markets.

[00:41:59]Bryan Fields: I think [00:42:00] flexibility and constantly demoing new product categories like Oren described. I think it’s so important to have that catalog and be able to show. Other operations, this is what we’ve done. Here’s the pricing, here’s the packaging, as well as giving consumers another reason to come back into the store.

[00:42:12] I think, you know what we’ve seen with deliveries that people like the easy convenience method, but what they can’t get in those experiences, at least as easily replicated is that one-on-one experience with the bud tender. The ability to have new products continually hit the shelves is really exciting.

[00:42:26] And I think gives consumers another reason to add it into the routine so it can be part of their habit stack. So I love that concept and I think that’s a major takeaway. And I think if you’re operating here in east coast date, it’s probably something you should probably look to do sooner rather than later.

[00:42:40] So Oren for our listeners that want to get in touch, they want to learn more.

[00:42:43]Oren Schauble: Where can they get. So I’m at Oren meets world on Twitter. That’s the easiest way to do it. Same on Instagram, but not as much on there. Just orange on LinkedIn. But yeah, Twitter’s definitely the best way. And yeah, and look, I’ll talk to people.

[00:42:54] Love, I love ideas. Cool packaging, cool products, cool feedback. Send them all to me. And yeah, let’s [00:43:00] chat again.

[00:43:00] We’ll

[00:43:00]Bryan Fields: tag up all of unrivaled brands in the show notes. Thanks for taking the [00:43:04]Oren Schauble: time. Thank you. Appreciate it.

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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!

This week we are joined by Josh Smith, President of Telic Labs. We break down the importance of working closely with your Cannabis Lab and how they are often overlooked as a valuable partner. 

We discuss:

Challenges Testing Labs face & Reverse Engineering the results.

The Importance of in-house testing for Cannabis Operators 

Why Potency shouldn’t be King anymore’

About Josh Smith President of Telic Labs:

Focused on molecular biology and designing specialized technical laboratories, Josh has 15+ years of experience in pharmaceutical R&D and highly regulated clinical fields. Having been awarded several specialized patents and leading teams to innovate DNA diagnostics, Josh’s center of activity revolves around accurate testing methods and technologies. As a member of ASTM and AOAC, he lends his knowledge towards policy, procedure, regulation, and industry standards

https://www.teliclabs.com/

https://www.linkedin.com/in/joshsmithms

This show is presented to by 8th Revolution:

At Eighth Revolution (8th Rev) we provide services from capital to cannabinoid and everything in between in regard to the hemp & cannabis industry. Our forward-thinking team can diagnose, analyze & optimize every detailed nuance of your company to keep your business safe, smart, and profitable. Our flexibility and experience combined with ongoing research create unique insights into how to best grow your market share. Contact us directly at [email protected]

Bryan Fields: @bryanfields24

Kellan Finney: @Kellan_Finney  


[00:00:00]Josh Smith: What’s

[00:00:02]Bryan Fields: up guys. Welcome back to the episode of the dime I’m Brian Fields. And with me as always as ke Finney and this week, we’ve got a very special guest Josh Smith, president of Telic labs. Josh, thanks for taking the time. How you doing

[00:00:14]Josh Smith: today? Great. And I’m always glad to be chatting with you guys. It’s always a fun time.

[00:00:19]Bryan Fields: Absolutely. Ke how are

[00:00:20]Kellan Finney: you doing? I’m doing really well. I’m doing really well. Looking forward to, to chatting with Josh who’s in the Midwest, right? We decided it’s not west coast or east coast. How are you, Brian? I’m doing

[00:00:31]Bryan Fields: good. I’m excited to figure out where Josh fits in on the map and kind of dive some of his specifics and to hear more about the, the lab side of the industry.

[00:00:39] So Josh. Before we kind of dive into some of those areas. Can you give a little background about you and how you got into the cannabis

[00:00:45]Josh Smith: space? Yeah, so I’m, uh, originally from, uh, one of the rust felt holes. Um, I was, you know, Penn Tucky is what we like to say, but, uh, and it was two hours north of Pittsburgh.

[00:00:58] I grew up in, [00:01:00] uh, if my dad didn’t hay, uh, hay fever, I would’ve been seventh generation on the same dairy farm way back when, and, uh, I got out of that and moved, went to grad school in, uh, was of all places, Wisconsin, and, um, ended up getting into clinical microbiology and did pharmaceutical R and D for 10 years.

[00:01:25] And then while I was shopping around and trying to get a patent that I’d put together, uh, licensed, uh, some people that I was kind of working with and. Came up with a great idea to start a lab in this brand new cannabis industry originally was, uh, focusing on the he CBD space and decided, because I was living in Madison, Wisconsin at the time.

[00:01:49] And I knew all about, uh, you know, some places where I could get relatively cheap rent and things like that. Plus you, my yearly permit was a hundred dollars. [00:02:00] Rather than we, we all know, uh, the multi thousands for everybody else. So it that’s kind of where we started. And now that was in 2018. And, uh, just as of last December, the MRI made it official.

[00:02:16] So we just, uh, purchased into a cannabis testing lab and, and Warren, Michigan ABCO lambs. And. That’s kind of where we’re at. Well,

[00:02:26]Bryan Fields: congratulations on that. And so let’s stay with, uh, 2018 when you first got into this space, any hesitation about kind of diving into cannabis. And did you approach the industry kind of wide eyed and kind of with big momentum thinking I can accomplish it, then, then have a big learning curve.

[00:02:41] Can you take us through that?

[00:02:46]Josh Smith: Oh, 2018 was a shit show. to be absolutely absolutely blunt. So coming from an industry, especially like a highly regulated one such as, uh, the clinical world and pharmaceuticals, [00:03:00] um, there methods are, are established, done. I mean, you have everything from the sample. Transport has been so characterized that every step of every stage has been not standardized, but at least has been characterized.

[00:03:21] So you know what you’re gonna get. In 2018, there was no published anything for just about anything. And, um, so we had to go through it and literally design all our tests and our testing methods from scratch. Because of course, no one else wants to tell you how they’re doing it because quote, trade secrets, which is not how that works, because get done at a hospital.

[00:03:48] Like, for example, if you get a, uh, diagnostic test for using PCR in a hospital in the packet, you get your results, it tells you the exact sequence that was, um, [00:04:00] amplified the exact probe sequence that was targeted, and exactly where at, in each chromosome that gene is. And they will tell you everything about it.

[00:04:10] So, That’s not the way it is in cannabis, as we all know. So we, I spent a lot of time digging through old FBI crime lab methods and kind, and my lab director down in Madison, uh, Megan, we, we spent a lot of time doing through it. It was. And then of course, was the, are you doing total THC? Are you doing Delta nine?

[00:04:32] Are you doing Delta? You know, THCA are you do, are you drying it? Are you not drying it? How’s this being done? And there was the Delta Knights only states. Oh God. It was a, just a mess. would that

[00:04:48]Kellan Finney: be exciting? Right? Cause it’s like you’re pioneering, like scientific research again, instead of just following instructions from someone 30 years know, I mean, they’re kind of

[00:04:57]Josh Smith: exciting a little bit.

[00:04:57] Well, yeah, no, that’s actually a really good point. [00:05:00] Um, when, so when I was an undergrad, uh, that was when. Sanger sequencing first kind of really came in big, like you could find people were publishing a, they would send something in sequence, a gene and publish paper, and no one knew what the hell the gene was and what it did or anything about it, but they published it because they, they did it.

[00:05:22] It was, it, it was the one of those big, big times. And those big leaps were just, you get this brand new technology. And I never thought I’d see something like that again. Now with cannabis, you know, we have all this technology, but there’s been a hundred years of a gap in the science of it. And it is a wide open field.

[00:05:45] I’ve got a list of probably 35 papers that I would like to kind of work on for, you know, publishing like stability data know, and just all these different things. It’s, it’s insane. How much is out there [00:06:00] to be taken care of and run with. So, It’s exciting. It’s very exciting.

[00:06:05]Bryan Fields: Is it daunting at the same time though?

[00:06:07] It has to be kind of mildly daunting. Absolutely. Especially when you’re starting off. Right. There’s, there’s so many obstacles and so many paths for you to kind of proceed. And then when you start and you’re used to kind of the highly regulated space where, you know, there’s a path forward, there’s instructions, there’s details and you go to open up the space and you’re like, where’s my

[00:06:23]Josh Smith: reference documents.

[00:06:25] Yeah. It it’s, it’s daunting. I at heart, even though I’ve spent a lot of time in the. In the highly, you know, in the clinical side and I am, I’m actually an R and D guy at heart like that to me is fun. Like sitting down, developing the new thing. And as, uh, assay development is actually one of my forte. Um, so it’s one side just daunting for the she, your list of things that needs done.

[00:06:54] So like every it’s that to do list that once you check off that one box, all of a sudden you’ve got 10 [00:07:00] others that spun off of it that you need to fit into. But, uh, and it, it can seem overwhelming and I can, it, it definitely, there are days, but overall I think it’s a very exciting and for one industry to be in.

[00:07:17] Absolutely.

[00:07:18]Bryan Fields: So let’s talk about kind of the exchange with the industry and how those conversations take place. Can you take us through, let’s say a normal or standard interaction you get approached by, let’s say an operator who’s interested in the test. Can you kind of take us through the standard conversation?

[00:07:31]Josh Smith: So it’ll, it’s gonna vary between your states. Um, the first biggest stepping stone is, um, do you, does the lab have to go and pick up samples or can you. On the license side, as in the CBD side, can somebody email it to your lab in a box kind of thing? So usually when somebody comes in, they’re like, oh, I want to do this.[00:08:00]

[00:08:00] I need a full panel test. Okay. Well, what state? And what’s your full panel because that’s gonna change. Thank you. Thank you, state for not being that standard. Um, and then.

[00:08:14] well also to throw it in there for the love of God. Can somebody at the state level, when you’re adding on microbial tests, ask a microbiologist before you pick the test. Oh, that’s too hard, please, please, please do. Total. Aerobic is a worthless. It is a completely worthless test. It tells you nothing, except your space was dirty.

[00:08:38] That’s it? There’s a lot of stuff there. Uh, anyway, so , as you’re going through it, you know, there, there’s all sorts of little guidelines, but it’s like, okay, well what’s your sampling amount? How are you sampling things? And every single person that I’ve ever spoken to, [00:09:00] the first thing they ask is what is your turn and around time on your results.

[00:09:04] Hands down. That is the big question. Some places that’s regulated, uh, for example, Michigan, if you, for your microbial results, you have to do plating for total use to mold and it requires, and you’re mandatory to hold it for 72 hours for it to grow up. You can’t just do PCR, which by the way, a total Eastern mold PCR, anytime you enrich a sample, that’s a no go.

[00:09:31] You cannot quantitate after an enrichment. So little, little micro nod there like it, but, uh, you know, and then eventually price comes up. It really depends on your local area and how bad, how Benley they need it and want it turn around. But for the most part, well, it’s been a while since I’ve had somebody call up and ask me, uh, how much to get the COA that they want.[00:10:00]

[00:10:00] But, uh, they happen fairly regularly. Uh, the big thing that I have seen, especially in the more unregulated side on the hemp and CBD, uh, you know, the Delta eight, the THC, all of those things is please, God guys learn how to sample properly. Two, uh, one, two gram bud does not mean. The same. It’s not going to cover a 50 acre field to know if it’s highest potency part of the plant.

[00:10:38] And that’s one plant. Yeah. I mean, but if it’s the best plant, but if it the best plant, an accurate representation of the population, it is absolutely not. I’m on IAC and ASTM committees to help put that together. And, uh, and actually, I think one’s out to ballot now for the ASTM, but this plant is [00:11:00] so variable as we all know the different side and bud size from top to bottom.

[00:11:04] Right. But actually there’s been papers that show, even from the farthest out on the plant, uh, limbs to closer to the main stock, it changed your percentages will change drastically all over. And then plant plant variability is just crazy. This isn’t like corn where you can just say, oh Nope, 120 to is a harvest.

[00:11:28] It’s you’re gonna get all sorts of, depending on your nutrient levels, your, you know, your local environments, your brain, your outdoors, your indoors, it’s so variable and hell. Even if you’re tracking a field, I always tell people if you’re one of those, if you’re going to go the he CBD or out, make sure you pick a sacrificial plant.

[00:11:51] And that is the only plant that you test for. To monitor for your THC production, because if you pick different plants, it will [00:12:00] kill you because you will never get the exact same amount in the same. You’ll never know, and you’ll probably miss it, which also if it is in the field and it’s a CBD plant, it will go hot.

[00:12:12] It’s only a matter of time.

[00:12:13]Bryan Fields: Yeah. So I wanna stay on the full panel real quick. So let’s say an operator approaches you, and let’s say in a certain state, they might not need a full panel testing, but obviously it should be encouraged. And do you, is it on you to kind of work back and forth with the operator and encourage them to take the additional test?

[00:12:29] Like how does that fit? Because at the end of the day, right, if there’s end product, that’s gonna be consumed by an individual. We want to make sure that it’s safe and, and there’s gotta be some sort of like, uh, isn’t it

[00:12:39]Josh Smith: required. Well, it depends on your state. So he CBD side, the, and this is also includes the Delta eight and except for very, very few states, the only thing that is required is that it is below 0.3% total THC.

[00:12:56] That is it. So, and that is usually just [00:13:00] the plants in the field. This usually doesn’t even go anywhere near the processors. So if you’re in the he CBD side, you really. Don’t have to do anything. Um, so from what I’ve seen in the lab directors that I trust across the us, I’ve never seen a, well, sorry. I’ve seen one legal Delta sample ever.

[00:13:23] Usually it’s somewhere around 7% Delta nine. I actually don’t think it’s shelf stable.

[00:13:30]Kellan Finney: No, it’s not. We’ve had conversations with pharmaceutical chemists who say that it readily, I smizes over, um, just in the presence of like any moisture at all. Right. So if you just have like moisture in the air, it’ll grab a proton and instantly I summarize over what we’ve been told for sure.

[00:13:44] So that literally explains the,

[00:13:46]Josh Smith: the results that you’re seeing from, well, I would also too. And have you ever played, have you ever got your hands on the, uh, like an isolate or, uh, sorry, the concentrated Delta eight. It’s like Affy. Yeah, [00:14:00] it is so pro. So in order to get it in the carts, you gotta heat it. And then you’re exposing it 100% and you’re also shipping it other, you know, an unheated trucks and you know, all these CARSs

[00:14:11]Kellan Finney: right.

[00:14:12] You don’t think they have really stable environmentally shipping

[00:14:14]Josh Smith: conditions, hazard or anything. And then you have, they’re all clear tubes as well. I mean, so you’re not even keeping ’em out of the UV light, which breaks even remote. So do you feel like a sense of

[00:14:27]Bryan Fields: responsibility though? Cause that’s gotta be kind of challenging for you where you know, you’re doing the tests here or they’re not doing tests and you’re trying to kinda encourage them to take additional steps.

[00:14:37] Is that a really conflicting

[00:14:38]Josh Smith: balance for you? Yes. Uh, cuz it is a business. Right, right. Yep. You know, and that’s, and every time somebody fails a test, there’s a good chance they won’t use you anymore until there’s some, uh, until states start cracking down on labs and actually making sure that they aren’t doing sh funny shady [00:15:00] shit.

[00:15:00] Um, but I like to tell people that.

[00:15:09] I understand that it costs a lot of money for a test. I mean, in the scheme of things like in, is it a lot when you’re actually looking at anything else? No. You know, your 500 bucks a batch for your test is, or for your imagine marijuana in the scheme of things, it’s low on the totem pole, but it’s an added cost, right?

[00:15:33] Um, from the, on the, he CBD side where CBD braces are horrible. I really understand that. I think they’re starting to climb back up, but I mean, I, I get it. What I usually will tell people is even I do what you can, if you’re trying to do it right, you can always do one and then break it down. Like if you are making concentrator, you gotta distill it.

[00:15:59] Just get a [00:16:00] full panel of the distillate once. Then edit your carts that are coming down from that. You can always point to that dis distillate, COA and say, look, I had it done here. You know, I, we only did it for here, like some states mandate of what you can do or not. Um, but you know, occasionally you run into things like in Michigan, in 2019, the concent were testing fine, but the shotty VA hardware, uh, that people were packaging him in was giving people academy and poisoning.

[00:16:32] Nickel poisoning for which one? Um, so I mean, and then the other problem is that you have all these people that are trying to skimp on costs, but as soon as federalization comes through, they’re gonna be so shell shocked when the testing requirements come through. From the FDA and the U S D a that I don’t, [00:17:00] they need to start getting, preparing themselves for that kind of thing.

[00:17:03]Bryan Fields: Why do you think they’re gonna be shell shocked?

[00:17:05]Josh Smith: Uh,

[00:17:06] the, especially the FDA side, they do not like to reinvent the wheel. They are government agency and,

[00:17:13] you know,

[00:17:13] you start looking at stability expiration dates, right? Any consumer package. Good has to have an expiration date on.

[00:17:22] Well,

[00:17:22] if you want to do that properly, that proper stability study is gonna cost you 10 to 20 grand per SKU They’re also gonna require actual beginning, middle and end of batch, or end of lot batch testing.

[00:17:37] And that to equally salmonella aspergillus is gonna turn from three into about 15 to 20. And

[00:17:44] it’s, you’re gonna be your full foodborne panel.

[00:17:47] So, you know, You can do compound selecting. You can get, do compound batch testing.

[00:17:56] I mean, it, it happens in other like meek packing industry, right? They’ll, they’ll take [00:18:00] samples from various batches and lots, and they will compound ’em into a bigger sample. So you can get a lower li limited detection. You don’t have to test as much, but all these guys that are thinking they’re gonna get away with just a.

[00:18:15] $30 potency test, better start planning because it’s gonna get expensive and it’s gonna knock out some of, I mean, there are probably gonna be grandfathered in rules. You know, if you’re just set yourself up like a food grade, kitchen, get ready for it. Cause as long as you’re trying, a lot of times they do kind of give you some leeway, but you know, if you’re not heading towards GMP, which requires all of that.

[00:18:40] Batch testing and lot testing and all that. You’re gonna get left in the dust. Yeah. And

[00:18:46]Kellan Finney: I think future proofing your company, right? I mean, we are aware that this is the testing that occurs in other consumer package, good industries. Right? So like building those in to your, your cash flow statement [00:19:00] or mm-hmm, your balance sheet, right?

[00:19:02] From a business perspective and understanding that you’re gonna incur

[00:19:04]Josh Smith: those costs mm-hmm

[00:19:06]Kellan Finney: future pu proof is your. Future proofs your organization, right? From a, a cogs perspective. So you may not be paying ’em now and you may be experiencing higher margins, but like that’s what working with someone like you, Josh can provide an, an operator, right?

[00:19:22] Is they can open up this dialogue. And be like, okay. When it is fully certified and say it’s federally legal, you have that experience from your past life. And so like that’s a huge advantage working with someone like you. Correct?

[00:19:35]Josh Smith: Yeah. Uh, I like to think so anyways. yeah. well, you know, one of those things and I like to say, and I like to tell the people that we’re a part like we’re all in this industry together.

[00:19:46] Yes. I mean, I’ve, I mean, I’ve jumped into the industry too, and if everybody fails, We all go under, like, you know, so, I mean, I’m not, I’m not the cops, I’m here to keep you honest [00:20:00] for what you’re saying it is, but I’m not the cops. I, I want to help as much as possible. You know, if something comes up, you know, I can help possibly narrow it down or give you those tools you need.

[00:20:11] And, you know, there’s always ways to work around things and to help out it, it really comes down to, are you trying to be shady and do it on the, you know, just make a quick buck or are you trying to do the right thing? and, you know, like we started offering environmental samples. So like there’s multiple things you can do at various stages of the industry.

[00:20:30] Like, so if you’re just setting up your green room or your row rooms and your clean rooms and all that, you can actually have, uh, labs. Some of them offer it. Some of them don’t, uh, go in and do environmental sampling. So you can check your. You know, mold counts in your clean rooms before you put anything in, you know, to make sure you have it set up right.

[00:20:51] Or your sterilization processes are working right. You know what a concept,

[00:20:55]Kellan Finney: making sure it’s clean before you

[00:20:57]Josh Smith: move it.

[00:20:59]Bryan Fields: is there [00:21:00] someone in particular you wish heard that Calvin

[00:21:02]Kellan Finney: no, but I mean, it it’s so crazy, cuz this is really important. Like people don’t think of these things when they, when they jump feet first into this kind of the industry.

[00:21:09] Cause they’re excited, you know? Yeah.

[00:21:11]Bryan Fields: Turns out dirty material in dirty

[00:21:13]Josh Smith: material out. Garbage and garbage out, right? yeah, shit and shit out. Yeah. We all deal with, uh, you know, and a lot of these guys, like, especially from the CBD side and the crash in 2019, you know, corn prices sucks. Soybean prices suck. I mean, everybody’s just looking for a way to dairy’s tanked, you know, they’re, they’re trying to make a buck to keep their farms alive and this was a good cash crop.

[00:21:37] They, so, but they all jumped in, got taken advantage of by a bunch of guys that had. We’re selling ’em bullshit seed that tested hot instantly. You know, these guys, they didn’t know about the, what questions to ask. So I spend probably

[00:21:56] not as much anymore, but it used to be about half of my day, every day [00:22:00] would be education talking to some client notes, a new farmer or a new grow or whatever, and just walking through steps with them because it there’s so many. The learning curve on all sides is so steep right away that, you know, if you take it some time and think about these things up ahead, it saves you so much time, but also too.

[00:22:25] I mean, it’s, there’s some pretty specialized indu areas in this. Like, you know, you can tell a lot of the cannabis industry’s been, especially on the side until now having a micro background has really kinda given me. An interesting viewpoint in this, because there’s, you can tell who was making the rules besides politicians that didn’t know, or just told what to put in.

[00:22:51] Um, so one of the things

[00:22:53]Bryan Fields: that I, I really enjoyed in our conversations is the value add in, in the exchange of the relationship with let’s say your [00:23:00] lab and the operating. So for example, if an operator, you know, puts you off a sample and it tested for pesticides, and I. Gave the example as that, but I know in the past, you’ve kind of worked through back with the operator on how to diagnose that problem.

[00:23:13] And I’d love

[00:23:14]Josh Smith: for you to share more about that. Yeah, that was actually kind of where I was gonna lean into from that last. So I I’ll just, I’ll just rattle off the, uh, the test as I’m going through and you can tell me when to shut up and move on to the next step deal. So we’ll start with, uh, potency. Um, usually most people are doing this on an H B.

[00:23:34] Sometimes it’s on a gas chromatogram when you hear that weird funky conversion rate on it, that 0.8, seven, seven from an H B, but for the total, um, that’s actually to make it in line with GC gas chromatograms spec. So when you inject something in a, a gas chromatogram. It will instantly [00:24:00] decarb your THCA into Dell nine.

[00:24:02] So you will not see any acid form of anything. And it’s just about 88% effect. Yeah. Right. About 88% efficiency. So when you take something from an H P you have to do that 87% conversion to get them to be equal so that it will match up with. You also can occasionally see things on your H HPLC, your potency, where certain food dies and certain other compounds can mask your, uh, potency numbers, uh, or some orange dyes seem to cut your, um, potency in about half.

[00:24:42] Also. I’ve seen some labors for whatever God knows reason I’ve seen strawberry flavoring and beverages cut potency levels. I can know.

[00:24:51]Bryan Fields: Why can you lean into that a little bit? What, like, can you

[00:24:53]Josh Smith: explain what that means? Yeah, so basically the orange dye, [00:25:00] so an H HP C, when you run it through it, actually, it it’s a liquid column.

[00:25:05] So high pressure liquid pro photography, which basically means you take a sample, add it into liquid and put it through a long column that export. By size time, charge, whatever. And so you’ll get these peaks at certain. They’re called retention times. Well, if you run a, there’s also the detector on it. So you’re running at a UV is one detector.

[00:25:31] So you’re running at 220 nanometers. Usually somewhere in there. There’s very two 20. Uh, if you hear a PDA or a D a D, which is a di detector, Or, uh, that means you can get a range of wavelengths that’s preferable because it has a secondary confirmation cause all your cannabinoids have different peaks, but, um, for whatever reason, at certain wavelengths of light, these [00:26:00] dyes will mask an overshadow or under light up certain cannabinoids.

[00:26:09] So orange dye or some orange dyes are known to do this. This is also why, uh, there’s such a problem with getting accurate potency numbers of chocolate because it masked, I think it’s the fats in it, but they mask kind of the true potency number. So it’s that one was a bitch to figure out. So it could be

[00:26:31]Bryan Fields: higher.

[00:26:31] The potency actually could be higher than what the, the number shows or could

[00:26:35]Josh Smith: be lower. Yes, it a little, both. It depends on your, it depends on which one it is, but yeah, with the, especially with the, uh, the chocolate, it’s usually the potency will be higher, but there’s also a sunflower, less a fit for what somebody was making a gummy with sunflower lesser than as their binder.

[00:26:56] And they were coming up about a third, third short [00:27:00] of their potency numbers that they thought, or like I’m putting it in. I literally watched them put it into a batch. Like calculations, math, everything looked right. I could not get a full extraction on it. I could not get that number. And it always came in about a third low, just whether it was being bound up or who the hell knows.

[00:27:20] But so if your potency numbers aren’t coming out the way they’re supposed to, especially in your edibles, look at your formulations. And try subtracting some of those ingredients from your, uh, from your formulations first, because it might actually, you might be fine and perfectly good, but the where your lab is getting things tested or where you’re testing things at that lab, they might be using a technology that is masked by your ingredients.

[00:27:49] This is all also why you should always have a backup lab. Always

[00:27:53]Bryan Fields: do operators have internal tests in order to kind of validate the results or to, in order to like, do some of those [00:28:00] internal testings

[00:28:00]Josh Smith: that you’re talking about, you can, and there are ways to do it, but for example, a cheap H P C UV is gonna run you somewhere around 30 to 40 grand.

[00:28:12] Um, the certified reference standards that I buy are about a thousand bucks a month and, um, you know, you, then you have to do your annual maintenance, preventative maintenance contract, which is 5% of your purchase price every year.

[00:28:29]Kellan Finney: Probably need a, some semi-intelligent human to make sure that it’s given you accurate and precise results.

[00:28:35] And I mean, this is exactly where, and then you factor in the fact that none of these companies have access to traditional financing. Right. And so like all of these create this, this kind of like mutual synergistic relationship that’s required. So like not only are third party testing labs. Providing like safety and EF efficacy testing for the consumer, but you’re almost also serving as like [00:29:00] a, a pseudo R and D lab for

[00:29:02]Josh Smith: operators.

[00:29:02] You know what I mean? Mean, and, and a lot of times, like for metrics stuff, like we will, you can do R and D you know, not. Officially in the system. Right. And we’re all about that. I would love, I have helped worked with a lot, especially on the CBD side, but you know, I’ve worked with quite a number of companies and operators and processors that they’re looking to.

[00:29:24] Perfect a system. You know, there are ways if you’re actually, if you want to do potency on your own and you are looking for a good way to do it. By a GC F I D, which is a gas pergram flame ionization detector. You can get ’em for dirt cheap, you know, like five, six grand, you, and they’re very easy to service.

[00:29:45] There’s almost nothing to break on them. And it doesn’t take a rocket science to run ’em and it know that if you do that, You’re gonna have to do all the background. You’re [00:30:00] gonna have to make sure it’s working properly. You’re gonna have to do all of the steps that we do normally. And, but it’s also not gonna be the official test so you can do in-house testing, but it still has to go out for compliance as, as it should.

[00:30:15] I mean, you shouldn’t be able to do your own compliance testing. I mean, it’s, that’s a little bit of a conflict of interest. You don’t trust me.

[00:30:23]Kellan Finney: Do you trust? I swear. I swear. No, it’s always 99%.

[00:30:28]Josh Smith: I swear. I’m from a place where banjos play. I don’t trust anybody.

[00:30:33]Bryan Fields: So Josh staying on that topic is

[00:30:35]Josh Smith: potency still king.

[00:30:37] As of right now, it is, it shouldn’t be, but it is what should be king. Okay. There’s a two part answer to this. And that still ties back in with what you were saying or with a different test. So there have been studies done and that show 16 to 18% potency is the sweet spot. [00:31:00] Anything above that seems to max out your receptors, you just get there faster is basically what happens from these papers.

[00:31:09] Um, you know, there’s all sorts of anecdotal stuff. And quite frankly, until I see it in a journal, you know, it’s. Does it lead me to believe certain things. Yes. But until you can prove it, you know, uh, there’s also, whenever you take a blind judging and you don’t show them the cos firsthand a 16, 18% will win hands down as long as it’s got a good dine profile and really when it comes down to it, and this is my take on it, terpenes are the most undervalued underutilized.

[00:31:44] Test that you can get, it is your marketing. It is absolutely hands down. That is your marketing. When you go to a dispensary nowadays and you cannot like the consumer cannot actually, they, they don’t they’re most of them are [00:32:00] uneducated, right. They know I’m going to buy some pot and I want to get high that that’s all they.

[00:32:06] So they just go for the highest THC, because they want the most for their money. But look at alcohol, you can buy grain, alcohol, moon shine. But most people don’t cuz it tastes like ass yeah. , that’s, that’s really what it is. People want to go for a good barrel aged whiskey with all those flavors and ROS, you know, talk to any IPA drinker and hear about your bricks, your hop, your IBUs, the, the five different types of hops that they pulled outta some German backyard.

[00:32:36] You know, I mean the whole thing, and this comes down to also. When as the industry grows and federalization comes in and the big boys come in, your Winston Salem, your Anheiser Bush kind of type people. They’re gonna beat you on potency. They can mass produce like Matt. [00:33:00] You gotta take the small craft brewery, craft winery route.

[00:33:03] If you’re going to survive because you cannot beat them on their margins. It’s you cannot, they’re just too big. Their economy of scale is too far gone. So take those terpene profiles and treat it just like whenever you go to the liquor store and you go to buy a bottle of wine and they have those little description cards sitting there, that is what you need to do.

[00:33:26] And that’s how you sell it to your people. You know, take notes of, you know, if it’s limiting pining and embarrassing. You know, citrus flavor and aroma with hints of, you know, X, Y, Z, and a peppery finish, right. You know, a pine notes and a peppery finish. There you go. That will give you something. I have a friend that used to work as a liquor distributor and a liquor distributor.

[00:33:53] And he said, as soon as they put those cards up, sales of that wine went through the roof, but it’s because [00:34:00] people, even if it’s wrong, cuz most of those labels are bullshit. He even said, he’s like, most of these are just somebody typed those up, you know, it’s the monkey and Shakespeare kind of thing. Um, is that even though they could be wrong, it still gives somebody something to think about all.

[00:34:16] Yeah. You know, I actually knew somebody that was planning on taking a gummy and, uh, um, with no THC in it and adding the exact blend of terpenes that was in his flower. And then giving that to bud tenderers so that they could give that to them and say, Hey, this is an approx, this is the terpene profile of this bud here.

[00:34:42] Try it. See if you like it. Just another way to kind of think, but really that’s where the education’s gonna come down the road. I mean, really that’s to me is the test. I mean, that is the one that makes you of the money.

[00:34:55]Bryan Fields: What is one concept or statistic that an industry [00:35:00] operator wouldn’t know.

[00:35:02]Josh Smith: from your experience operating a lap?

[00:35:07] Ah, uh, I don’t think we got enough time for all of that. um, , I’ll go with the, with the easiest one. Um, if you grow outside, you will fail, used to mold hands down. Um, also on the CBD side. If you’re going to be below 0.3%, 10% CBD is your max it’s at that point, it’s math. So anybody, anytime you go to a CBD shop and you see 20% CBD on that flower, that’s marijuana.

[00:35:50]Bryan Fields: what areas do you see growing in, in testing importance over the next five years?

[00:35:57]Josh Smith: Uh, couple actually I’ll spin this [00:36:00] back to those tests and what they mean. And I’ll run through these really quick pesticides are simple, right? But be careful if you’re testing semi high for a pesticide and you don’t use them, it could be because it’s your clones, myco, buttin is famous, is known for this.

[00:36:14] Whereas if you have it in your cl owns, it will propagate through and you’ll never test positive. I do think the just general, the Ana the specific test, I think you’re gonna see those panels grow. Um, and for things like heavy metals. So if you’re seeing lead your, uh, your water filters are going bad, chances are, it’s not in your soil.

[00:36:43] It’s it’s most likely bad pipes in your water. Uh, arsenic. Have you been, are you grown in rock? Woo. if you have checked your lot numbers, because sometimes they source from volcanic places and you’re gonna get higher arsenic in your, uh, in your rock wall. Also, if you got rat traps [00:37:00] anywhere else in your, uh, grow room, you could be picking up the arsenic from it.

[00:37:04] Um, I don’t know. Have you guys ever have in a lab have, uh, played around with, uh, some of the equipment? Like, do you know what ICPM S is. Yeah,

[00:37:16]Kellan Finney: I’ve run. I ran an ICPs for two or three years doing uranium bium analysis. So I’m very familiar with all the heavy metals you don’t think, uh, you’re not gonna say don’t use a mercury thermometer.

[00:37:26] That’s the one where honestly, like, I’m like, we’re really testing for mercury right now. Like, like what?

[00:37:32]Bryan Fields: Yeah.

[00:37:33]Kellan Finney: I mean, I understand it’s very dangerous, right? Like that’s, that’s a heavy metal. Right. But like, if we’re gonna throw my well test for the range, what else is dangerous? Right? Like that’s had to just one little

[00:37:46]Josh Smith: out box moment.

[00:37:47] Oh no, no, no. I. I was, I still remember I had a grade school. I actually had a teacher that would, we could poke it around on the desk with our finger, you know, nowadays that’s full hazmat places shut [00:38:00] down. um, uh, so like, but like mercury that’s, that’s gonna be in your soil, right? I mean, that’s maybe soil or water most of the time.

[00:38:11] You shouldn’t see it. I mean, there’s gonna be there, but like, for those of you out there that don’t know what an CPMs is, it’s inductively coupled plasma. Mass spectrometer, basically a gigantic plasma, welding torch, hooked up to a mass spec. That’s holidays. Very, very, very fancy one, but you know, it’s a hillbilly socket set.

[00:38:31] Um, and I. You know, so like, uh, nickel CA, and this is actually an example from that I just had, so my dad was a machinist, uh, after he got off the farm and, uh, for about 30 years. And the only reason I picked up on this and I’m actually gonna be running some tests to kind of narrow down and prove this the other day.

[00:38:52] But we had, somebody had tested deposit, did for nickel and cadmium tested hot on their, um, CBD flower. [00:39:00] And. It’s like I ran the soil tests beforehand. There’s nothing in there. It’s all good. Um, but he had a brand new Buster and his trimming machine that he brought in. Uh, he had rented from somebody. Ooh. A lot of times when you nickel and CA usually from the finishes they put on stainless steel or, and, or other machinery.

[00:39:26] So when you get a brand new piece of machinery, even if you clean it out, especially something that violently breaks things off. After you clean it thoroughly, you wanna actually run some garbage through it, things that you’re never gonna touch. You’re just gonna throw away, burn whatever, because there are little pieces and little burs and little Nicks on a brand new piece of machinery that need to be cleaned off.

[00:39:51] They get dulled off. And if you don’t run through something that just takes that, beating those shavings, those pieces, [00:40:00] that dust is gonna be on your product. And so it will then show up in your tests. So I’m 99% sure. That’s what this person was having. Cuz he had a brand new busing machine. So.

[00:40:16]Bryan Fields: How is he supposed to know that though?

[00:40:17] Like how I, I mean, it’s the

[00:40:19]Kellan Finney: same reason your mom makes you wash the shirt after you buy it, right? Yep.

[00:40:23]Josh Smith: Yeah. Like Kevin, when your

[00:40:24]Bryan Fields: mom’s not there to do that, I know right

[00:40:26]Kellan Finney: now you’re an adult.

[00:40:27]Josh Smith: well, Brian, I mean, a lot of times this is, this is why I chat with the lambs. I mean, we’ll help you. And, and we don’t, we do a fairly poor job of telling people what these tests actually mean to you and why they matter.

[00:40:41] Cause it’s not just about, uh, You know, being able to sell your shit. And yes, that’s, that’s the big part of it. But your process is gonna have a breakdown. If the, if you fail on some of these tests, it’s because your process might have broken down. So for example, uh, water activity and moisture content [00:41:00] similar, but very different things.

[00:41:02] Moisture content is the total amount of water in your product. Water activity is the amount of water that is available for microbial growth. So if you pass your water activity, but you fail your microbial tests, particularly mold Eastern mold or whatever that tells you, it happened after your drying room.

[00:41:27] That’s where your breakdown was. It could be in your storage. It could be, you know, I’ve seen total coliforms, um, in the dry coming from the drying room, but it was because they were using those mesh webbing, drying net things. And it’s just like a sponge one. They’re good until they’re not, you know, they tell you never put a sponge through the dishwasher because it only gets nasty or faster.

[00:41:49] It’s the same exact thing. No matter how much, if it’s porous. You can only clean off the surface. You will never get the bacteria that have migrated into the surface.

[00:41:59]Bryan Fields: How many [00:42:00] people get that results from you and understand exactly where to pinpoint, let’s say out of a hundred?

[00:42:07]Josh Smith: Well, I would say mostly because now I’m the one explaining it to them after they call them.

[00:42:13] But hypothet

[00:42:14]Bryan Fields: though, if, if, like, let’s say out of a hundred people, they get the results from you. How many of those 100 would know. Where to start and where to focus on like analysis 10.

[00:42:25]Josh Smith: Yeah. 10%, 10%, maybe, especially on the bacterial stuff. You know, if it’s east and molded is almost always your, he filters and your ventilation are going bad, it looks

[00:42:35]Bryan Fields: like you’re like, where’s Wal, right?

[00:42:37] He’s like, where do I even start? He’s like, well, this is.

[00:42:40]Josh Smith: Quite a problem we have now. Well, and a lot of times it’s all about your airflow. Think about, I mean, think about like when you’re, if you grow tomatoes, right? They tell you to take the leaves off the bottom of the plant so that you can get airflow back and forth.

[00:42:55] Otherwise you get blight and mold growth, same thing with cannabis. Look at your grow rooms [00:43:00] with the hands on. Are there dead spots because your overall room might be getting enough airflow. But those dense spots aren’t, they’re gonna have microclimate. So the, the, if they’re, they’re also gonna be higher humidity.

[00:43:14] And so those plants can infect other plants also it’s best. If really all, what you should do is buy a $15 Anter off of Amazon, a cheap one works just fine, just to have an idea and check an various spots around your grow rooms. And then also too, don’t buy from a cannabis vendor. You don’t wanna pay the cannabis tax.

[00:43:35] Go to a cheap farm supply company, get one of those gigantic ass fans that they use to blow up and down the, uh, barn aisles and put that in your grow room at pot level, not at canopy level pot level. So you can get more airflow through your plants as they’re growing, rather than just coming in from the top that will help with your Eastern [00:44:00] mold problems.

[00:44:02] So at, for tests. As things grow and where I see things expanding plant wise, I think it you’re gonna see a lot more yeast and mold being tested for. You’re gonna have people starting to pick up on like hop late and Viro, which we test for. It’s a, it’s an RNA piece, CR which RNA is a pain in the. In grad school and my first job outta grad school, you would mark off with tape your corner if you’re doing RNA work.

[00:44:35] And then if anybody would walk near it, you’d shoot them because it was the only way to be sure that they would never touch your stuff. And cuz RNAs are everywhere. They break down everything and it’s such a pain in the ass to work with. Um, but, uh, you’re gonna see as we characterize the plant more and we find out what we should actually be testing for.

[00:44:55] Cause you know, and. Here in flying over country in, in the rust belt, [00:45:00] you’re gonna look at for different microbials than you would and desert, you know, in Arizona and California and Tennessee, and they’re all gonna be different. And so that’s gonna change to be a more regional thing. Uh, the consumer package, good side.

[00:45:17] I mean, that’s gonna increase on your microbials hands down. You’re gonna be looking at a 15 to 20 foodborne panel, just like in every other industry under the sun. I mean that little Debbie cake off the corner, you know, off the, the gas station shelf goes through a huge testing regimen that we’re gonna have to adapt to cuz the feds aren’t gonna change things.

[00:45:40] Um, I think from my standpoint as a cannabis lab I think focusing on it being strictly cannabis is the wrong move. Um, psychedelics are next. You’re not planning for them. You’re gonna get left behind. I also think you’re gonna start seeing the other drugs coming up [00:46:00] personally. I think the psychedelics are gonna go legal before federally, before marijuana in cannabis.

[00:46:05] Whoa, whoa.

[00:46:06]Kellan Finney: Hot

[00:46:07]Bryan Fields: take right that

[00:46:09]Josh Smith: yes, sir. Take a, take a look at who is spending the money on psychedelic research. It’s a lot of money. It’s all coming from the VA or the department or defense. They wanted PTSD treatment and nont treatable depression for, yeah. So that’s why it’s gonna go federally legal first.

[00:46:31] All right. Well, you’re on the record, so, well, welcome there and now live. I will be happy to be wrong on that one, but, um, you know, with, with that though, then we’re gonna have to do this whole thing again, right? It’s gonna be 2018 all over again. How do you get yours? Ibin your solo, all the different other.

[00:46:51] Uh, molecules that people are aiming for, then you’re gonna be typing these things. I mean, no, I mean, you can grow them, but no, one’s actually gone through and characterize and [00:47:00] fungi are a pain in the ass. So now you’re gonna have to be able to type and strain type all of these. They’re also soil remediators.

[00:47:06] So you’re gonna have to do your heavy metals, your pesticides, your antibiotics, anything that is in that growth media will be in that mushroom. And they have SIM

[00:47:14]Kellan Finney: synergistic relationships with bacteria too, right? Like that’s a symbiosis symb.

[00:47:18]Josh Smith: That’s what I was looking for. Yep. And, uh, your contamination will be bacteria, so you’re gonna have to do all the same microbial testing for it.

[00:47:27] So, you know, It’s gonna be the wild west for a little bit as it gets settled in, but think we’re just used to living in the wild west at this point. Right? We are the wild west. totally. Yes. So, but I think, you know, and then you’re gonna be, I mean, ketamine Ika I have a gain, you know, and then I still think you’re gonna start seeing all the other ones as they start.

[00:47:52] You have some states and some countries that just decriminalize all of it. You know, if you’re not. [00:48:00] And Portugal.

[00:48:00]Kellan Finney: Oh yeah, Portugal too. That’s right. I forgot. I always forget

[00:48:03]Josh Smith: about that one. I think isn’t didn’t Oregon and Washington basically just decriminalize everything. Yeah, I

[00:48:09]Kellan Finney: think so. Something like that.

[00:48:10] I mean,

[00:48:11]Josh Smith: one step at a time, the one step at , but I mean, that’s, that’s the future and I don’t think that’s too far down now. Do I think it’s gonna be recreational psychedelics right away? No, I think it’s gonna be a lot more like consumption lounges kind of thing, but. Josh.

[00:48:26]Bryan Fields: There’s people here in the United States who think if you smoke cannabis, your kids will die.

[00:48:31] So like, I, I mean what you’re talking about and where we need to go from, let’s say United States standpoint, I’m hopeful. there is, there is Brian lives in New York

[00:48:40]Kellan Finney: and they still haven’t figured out how to

[00:48:42]Bryan Fields: sell legal cannabis in New York. By the time this drops. But hopefully we’ve done

[00:48:47]Josh Smith: it. No, there’s no chance at all.

[00:48:49] No, there’s no chance. Wisconsin doesn’t even have a medical program yet. So I can’t say much there. I dunno the whole, the whole

[00:48:55]Bryan Fields: drug industry. You’re right. There’s a lot to be remain seen and it’s gonna be exciting, but I think your [00:49:00] poise and I think the educational direction you’re doing is so, so important.

[00:49:03] And I know where I believe a lot of those conversations, things are likely challenging because operators are looking at you more of like a, as a necessary evil versus a value add in the relationship. And I think. Hearing these insights are so important. And I would encourage operators to take that approach and to speak to people like yourself, to align more with the end direction so that you guys can work in synergy moving forward.

[00:49:26] So I got two final questions and then we’ve got your prediction. Since you’ve been in the Canna industry, what is the biggest misconception?

[00:49:35]Josh Smith: Uh, surprisingly. That hemp and C D is still cannabis. Like people don’t put together that it’s all the same plant, you know, it’s just one is like, it’s like, pitus, one’s got a blue flower, one’s got a red flower.

[00:49:54] I mean, they’re the exact same plant. And. That

[00:49:58]Kellan Finney: was a good description. I haven’t heard it. [00:50:00] That was really good. I liked that for tune years. I’ll

[00:50:02]Bryan Fields: remember that one. I like the same, same but

[00:50:04]Josh Smith: different. Yeah, same, same, but different. like when I talk to people, now I try to say high THC and low THC cannabis smart.

[00:50:14] Try to. Try to move things that way. Um, you know, that would freak

[00:50:19]Bryan Fields: people out here in New York. I think a majority of people would be like, I understand, am I gonna get high or not? And you’re like, that’s not really the threshold

[00:50:26]Josh Smith: for a thing. All right.

[00:50:28]Bryan Fields: If you could sum up your experience in a main takeaway or lesson, learn to pass onto the next generation, what would

[00:50:33]Josh Smith: it be?

[00:50:35] Oh, uh, well, I’ll give you this. Oh, if you’re just looking to jump into this industry to make a buck don’t. It is you, especially if you’re looking to start your own business. And I mean, this is kind of the whole thing, you know, if you’re just looking to start a business to make money, there’s always easier ways to do it.

[00:50:57] Right. But especially [00:51:00] in a plate, in a, in it’s the industry that is still growing this much, that regulations can change on a dime. From state to state, you know, you really gotta have a strong stomach and you really, really gotta have to want to be in this industry. Otherwise it’s gonna chew you up and spit you out really quick.

[00:51:24] that’s really well said. Yep. All

[00:51:27]Bryan Fields: right. Prediction time, Josh. I’ve dropped you off in Washington, DC. You’re in charge of everything right now. You can implement, change or influence. Any one policy to help move the cannabis industry forward.

[00:51:41]Josh Smith: What would you change? Deschedule it and bands down. That’s it? You wanna make things easier?

[00:51:50] Deschedule it completely because if you, if you put it into where they were talking about it, [00:52:00] moving the schedule two, that puts it into the pharmaceutical industry and then, you know, They’ve already got this figured out. So who’s they

[00:52:10]Bryan Fields: all, or I haven’t figured

[00:52:11]Josh Smith: out, uh, a few pharma places. So I, I, I’m not gonna name names on this one, but you can look this one up pretty quick.

[00:52:19] I, if, if I were in pharma and still, and I were looking to up on this train, which everybody expects them to be doing, they don’t want to deal with plants. They don’t wanna deal with farmers. They don’t wanna deal with any of the inconsistencies. If I was going to do it, I would do it just like they do insulin.

[00:52:42] I would clone the machinery, the genetic machinery for creating cannabinoids and do a yeast vector, which I could then put into a 5,000 liter bat fermentor, grow it up to a, a, a, a massive cell density, tossing an induction molecule, and then spin out [00:53:00] the yeast. And I have almost completely 100% pure cannabinoid.

[00:53:07] There are two companies now that are multibillion dollar lawsuits for that exact technology, because it’s finally came out, fighting over the, the

[00:53:16]Kellan Finney: synthesis right now. Right. That’s what

[00:53:18]Josh Smith: they’re doing. Fighting over the use effect. One was a British company partnered in the us. And I think the other one was a Canadian company partnered in the us.

[00:53:28] Yeah.

[00:53:29]Kellan Finney: Al TRIA owns one of them. I’ll drop the

[00:53:32]Josh Smith: names.

[00:53:33]Kellan Finney: I mean, metabolic engineering is like a little heart straight. You just plucked for me cause oh no. Yeah. That was my, that was my background. Right. Is metabolic engineering, so.

[00:53:39]Josh Smith: Oh, gotcha. Yeah. I mean, so that’s, that’s how I do it and they did it. So again, with that whole trying to compete with those guys, you’re not going to, because they can, the amounts, the asked for them to produce that single VA is a 10th.

[00:53:56] Or less of what it costs you to have a growth [00:54:00] for everything. So they’re gonna beat you. Do you think

[00:54:03]Bryan Fields: that helps drive down the end price of these products? Like, do you think that the consumer ultimately wins in some areas on there because the price decreases or you think it kind of levels out and their margin just

[00:54:13]Josh Smith: raises?

[00:54:14] Uh, well, it, because it’s pharma, they’re gonna gonna lock it under a patent and they’re gonna keep the price high forever on that one. Um, and I say this lovingly coming from pharma. Uh, and a guy with a few patents. Um, well, Kelly hates you now. oh, that was a pain in the ass. Um, that process four years, I think for me, for the one of ’em.

[00:54:36] Um, but eventually yes, that will bring prices down, but. This is where the entourage effect, this is where the terpenes, this is where all those other molecules that are part of that plant come into effect. Again, if you want a good dis uh, comparison, you’ve got your a hundred proof. Barrelage 12 year [00:55:00] whiskey with all of those extra notes and aromas, you, you know, the experience where you add that drop of water to really let the oils bloom compared to hams.

[00:55:15] PDR, but like, you know, in Wisconsin, we all, we call them mineral water, you know, it it’s, it, it it’s shit. And it gets the job done, but you’re not enjoying the process very often. Right. I think it was the founder of Dogfish brewing, like to say. If you can’t drink your beer warm it’s shit. Beer. I can drink a

[00:55:37]Kellan Finney: warm PBR on a river though.

[00:55:39]Josh Smith: I’m just,

[00:55:41]Bryan Fields: on a river

[00:55:42]Josh Smith: is one

[00:55:43]Bryan Fields: thing though.

[00:55:45]Josh Smith: If that’s on the option or, or, uh, you know, wait over New York, you, you might have American over there or iron city. I’m sure. You’ve scene. Uh, Ugh, [00:56:00] Keystone key on the blind, you know, beast. There you go. We’ll go with beast. That’s a good universal one. Milwaukee’s best.

[00:56:05] It is horrible. It tastes like garbage. It tastes like it’s warm all the time. Well, thanks for it. May not be the best

[00:56:11]Bryan Fields: Milwaukee Milwaukee’s best. So Josh, for our listeners who wanna get in touch, they’ve got questions and they wanna know how you can help them. Where can they reach you?

[00:56:20]Josh Smith: Uh, [email protected] that’s T E L I C L a bs.com.

[00:56:26] Uh, my email address is just [email protected]. Um, and I spend my days between Madison and Detroit. So kind of it’s a crapshoot to find me in per person, but most likely it’ll be in Detroit for a while. Awesome. Hopefully I’ll also be on, uh, presenting at the analytical cannabis. Northern, uh, north American expo here in a couple weeks.

[00:56:51] And, uh, anytime you guys wanna bother having me back on, I’m sure I could find me around. absolutely love. Yeah, we’ll definitely do that. Thanks so much for your [00:57:00] time. Josh only get all open the show notes. Oh, absolutely. Thanks guys. It was.

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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!

This week we are joined by the CEO of the Parent Company Troy Datcher, Troy joins us to discuss his first few days, Parents Companies purpose and 

  • Portfolio of Brands
  • Jayz and Roc Nation 
  • Making the leap from Clorox to Cannabis

Troy Datcher represents the first time a Black CEO has lead a major public U.S. cannabis organization. Previously in his career he served as Senior Vice President and Chief Customer Officer at The Clorox Company where Troy was responsible for the Company’s worldwide sales organization. During his tenure, Datcher deployed global sales plans for over $6.7 billion in annual revenue across The Clorox Company’s vast portfolio of brands…no big deal. Mr. Datcher’s business acumen has lead his career down many other interesting paths, including NASCAR and The Procter & Gamble Company

https://www.linkedin.com/in/troy-datcher-9a84664/

https://ir.theparent.co/governance/executive-management/default.aspx

This show is presented to by 8th Revolution:

At Eighth Revolution (8th Rev) we provide services from capital to cannabinoid and everything in between in regard to the hemp & cannabis industry. Our forward-thinking team can diagnose, analyze & optimize every detailed nuance of your company to keep your business safe, smart, and profitable. Our flexibility and experience combined with ongoing research create unique insights into how to best grow your market share. Contact us directly at [email protected]

Bryan Fields: @bryanfields24

Kellan Finney: @Kellan_Finney 


[00:00:00]Bryan Fields: What’s up guys. Welcome back to another 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 Troy Datcher CEO of the parent company. Troy, thanks for taking the time. How are you doing today?

[00:00:15]Troy Datcher: I’m doing great guys. It’s great to be here.

[00:00:17] Cited

[00:00:17]Bryan Fields: dive in Kellen. How

[00:00:18]Kellan Finney: are you doing? I’m doing really good, excited to, to breed back to the west coast, to the roots. How are

[00:00:23]Troy Datcher: you, Brian?

[00:00:24]Bryan Fields: I’m doing well. And yes, Troy is on the west coast, but I think there is some east coast level we’ll get into today. So Troy, for our listeners that want to get a little background about you and how you got into Canada.

[00:00:34]Troy Datcher: Yeah. Yeah. Six months ago I was sitting at my desk at Clorox managing supply and demand issues during a worldwide pandemic. You can probably say my job was pretty cake as the leader of global sales for disinfecting products company. While we don’t wish any of those bad things on any one across the globe.

[00:00:52] And it’s been tragic. Clark’s worked for a hundred years to build a brand for that very moment. And that trust that comes along with that brand really [00:01:00] kicked into action. So yeah, my. Six months ago, I was managing those tough conversations with retailers. It was we’re balancing supply and demand across the globe.

[00:01:09] And I got this random phone call from a recruiter and I always take phone calls because they’ve led me to some interesting places across my career. So I was at Proctor and gamble for many years, left Proctor and gamble to go to Clark’s because I was. And heard the opportunity. I left clocks, went and worked in NASCAR for a number of years because I was listening.

[00:01:29] I went back to Clorox because I was listening. And then this call came through about cannabis. And I was one of those guys who was poking holes in the industry from the house. As it was developing, Monday morning quarterbacking, everything that was happening. And I thought it was pretty hypocritical for me not to at least listen to the opportunity.

[00:01:45] And then at the parent company, I got a chance to see all the ingredients and just felt like they had all the right ingredients is something great. And then you toss in the opportunity to shape an industry and be a part of that conversation. And working with JC and rock nation, [00:02:00] puts it over the top.

[00:02:00] So that’s why I’m here. And but I was in my dream job. I worked my entire career for 30 years to be a C-suite executive at a fortune 500 company running a global organization. That’s what I thought I wanted to do until I got this phone call.

[00:02:16]Bryan Fields: I am so grateful that you shared that, but given the timing of the situation, it wouldn’t have surprised any people if you didn’t, if you pass on that.

[00:02:23] So I want to stay with that conference. Was there something in that moment, was it someone that pitched to you? Was it something that connected with an intercourse, take us through behind the scenes on that conversation?

[00:02:34]Troy Datcher: I think w what really sparked it for me was the purpose piece of the conversation.

[00:02:39] The parent company has a stated objective to be the most impactful company in the cannabis industry. That’s not just dollars and cents of bottom line stuff. It’s also, how do you bring inclusion diversity? Equity into the marketplace. And that really spoke to me. One of the things about working for a company like Clorox was that we were grounded in purpose.

[00:02:59] Like [00:03:00] we actually knew who we were and why we existed and blended, they started to speak to me about purpose. They really lured me into the conversation. And that’s really the only way I could explain to my friends and family and my mom, by the way that I was going to go work in cannabis. And it was really about this purpose driven objective.

[00:03:19] And, we’re doing some things around social equity that are really important. We want to be the example when it comes to that work. And I’m having some great conversations with folks who are trying to figure out how to change some of these antiquated drug laws and get some people out of prison who are doing.

[00:03:34] Something that I did, I’m doing illegally today. That was considered illegal just a couple of years ago. And those kinds of things are really interesting and important. And, I think if we can shape the right equitable industry from the beginning and the parent company had a little bit to do with that, then it’s been all worth it.

[00:03:49] So that. The purpose piece was the reason why I came over. Other than that, like I would’ve never, ever left my opportunity to clocks. I, I’ve been with the organization for 22 years, you actually develop a [00:04:00] bit of comfort. I was part of the DNA of the company while the company had been at Ralph for a hundred years, I’ve been around for a large part of that a hundred years and was shaping culture as a company.

[00:04:10] I had a lot of freedom to be who I am. And that there’s a lot of cover that comes with that. But this was just too interesting opportunity to pass up for sure. I have a quick question

[00:04:20]Kellan Finney: about the Clorox experience. Working for Clorox, it’s a global company in over a hundred different countries and they manage chemicals, right?

[00:04:30] So probably a super highly regulated industry. How much of that experience translated over to two candidates

[00:04:37]Troy Datcher: from a regulatory perspective? The good news I think is that I understood that regulations have to be considered. You have to really understand the landscape you’re competing in. So that was helpful.

[00:04:47] Other than that, nothing translates. The regulations that a couple of like corks deals with the FDA and the EPA and others those. Those organizations, we know all the key stakeholders there. We know all the [00:05:00] rules and we were able to to, to work hand in hand with them.

[00:05:03] And I think as any emerging industry, you’re just trying to find your way. You’re trying to push the envelope to get the right conversation started around. Aren’t helpful to the industry. As we’re trying to to build it from the ground up, Clorox had decades of experience of working with those agencies and helping to shape and influence policy.

[00:05:23] And we’re just at the start of that but understanding that there are rules and regulations and that. Sandbox that you must play within that, that is very familiar to me and something that I took from that experience and brought to this one, for sure. Timelines and deadlines are often dictated and impacted by those regulations.

[00:05:39] And so those are the things you have to consider, especially as someone who’s trying to drive innovation and change in industry, you gotta keep those things.

[00:05:48]Bryan Fields: And then with Clorox, right? There’s an established industry. There’s big mega players. And right now we are still so in the infancy stage.

[00:05:54] So when you’re taking the reins, you’re like opening up the force and leading the direction, which I hand you a ton of [00:06:00] credit for kind of diving in and being ready to be uncomfortable again, because obviously with cannabis, there is that. So let’s start with your first couple of days on the job.

[00:06:07] Obviously cannabis is full of challenges and there’s tons of opportunities and tons of unknown. So for you. Who’s at the helm of a vertically integrated large player. What’s the first couple of days, like what’s the first objective you’ve taken on, take us through that.

[00:06:21]Troy Datcher: Yeah, for me, it was all about learning and the, at the core of that is listening.

[00:06:25] I spent a great deal of time trying to put myself in the shoes of people in the organization. So I’ve been playing a bit of undercover boss, showing up in places inspecting like. Happening across the organization. I should change the word it’s not really inspecting sexy observing I don’t have enough information to inspect anything or enough experience.

[00:06:44] They expect anything or tell someone they’re doing something wrong. It’s really just observation. On, on day two, I got a chance to meet with folks from Z team to really understand. The quality that’s expected for monogram and the rules of engagement with them. But on day three, I was actually out [00:07:00] on a delivery.

[00:07:00] Route with my delivery drivers to better understand that part of the operations I spent the better part of the week in our operations to understand cultivation all of our call it, the back end work that goes into developing a product and spent some time in our dispensaries next to our bud tenders.

[00:07:18] And they’re making recommendations to folks as they enter in in our location. So I really spent time across the entire. Ecosystem just trying to observe and learn. I think one of my jobs is to service as a general manager for the business, say, looking at all the the puts and takes of building a really great organization that, that includes seeing everything from seed the sale and.

[00:07:42] Really tough trade-off too, which is in between. And so my job is really to just listen. And next week, for example, I’m headed out to see our retail outlets. We have a new VP of retail, and I’m going to go out and just talk to our store managers and our, and the folks that work on the front [00:08:00] lines to just better understand what would we be doing differently.

[00:08:02] So a lot of listening is what I’d say the first couple of months have been. It’s really about taking some action Brought in a consulting group, the Boston consulting group, BCG, who I’ve actually have some experience with it at Clorox building a corporate strategy. They helped me just take a look at our strategy as a company, put a fine tune on that narrative.

[00:08:24] And then we’re now deploying that internally. And I’ll be talking about that externally to key stakeholders over the next couple of months, but observing. Now that I’ve observed a bit, gleaning into some decisions to really providing a really clear true north for the organization, which I’m really excited about.

[00:08:39] Oh the parent company

[00:08:40]Kellan Finney: is vertically integrated, meaning they touch each portion of the supply chain. So was there one portion of the supply chain that kind of came a lot easier for the learning perspective and another one that was more challenging?

[00:08:51]Troy Datcher: Yeah, no I’ve been in sales for 30, some odd years.

[00:08:55] And so understanding. The sales component of what we do was [00:09:00] easily translatable to the things I’ve done in the past. My, my family’s farmers, I grew up in Alabama, my. Farmers back there. I knew as a young kid, I didn’t want to be a farmer. So like I stayed away from all the cultivation stuff.

[00:09:13] And so I’d say I’m learning a lot about that. That’s been a interesting learning curve for me. I’ve spent a lot of time. Obviously in my consumer products pack skews days, and a lot of that stuff translates in terms of, how do you create an experience for shoppers and what things are important?

[00:09:29] So those things translate really well. What I’m not accustomed to is something you mentioned at the very top of the conversation is a lot of the rules and regulations. There’s a lot of that I’m learning. And just understanding the boundaries in which we’re.

[00:09:41] The box that we’re placed in a ticket compete is something I’m spending a lot of time learning. But the other, the vertically integrated approach is a very interesting one. One is expensive to do this, and and two it’s challenging because you really need to be good at everything.

[00:09:58] And what I find is most [00:10:00] organizations can be great at some things and okay. And I think the advantage though, of being vertically integrated is obviously we’re trying to build brands here. And in building brands, you have to build up, make a promise to consumers. And when you own every aspect of the relationship from seed to sale, you can make that promise in ag you an example.

[00:10:22] If the product colleague’s not good, we can blame ourselves. We don’t blame a third party cultivator. Because we own that part of. The relationship. If you walk into our dispensary and we, you have a really bad experience we own the dispensary and we own the relationship between the consumer and the folks who are in that dispensary.

[00:10:42] If your order shows up. At your home at your doorstep and it’s late and incomplete, we own that relationship. And so I know you guys have probably all use third-party companies to deliver something to your home, whether that’s a meal or something from your favorite store. And if the word is not on time and complete, who do you think.[00:11:00]

[00:11:01] Do you blame the store itself, the restaurant itself? Do you blame the entity? Who do you call? Like you guys know all the challenges associated with that, and this gives us the opportunity to own that relationship and learn along the way. Now, what I envision longterm is we won’t be doing all these things long term that the industry will mature.

[00:11:21] There’ll be people that you can rely on to help deliver the promise with. You will understand what your expectations are and making that promise, and you’ll be able to lean on them, but we’re just not at that stage yet in terms of maturity in the industry. I think we’ll get there. But we’re not there quite yet.

[00:11:38]Bryan Fields: And operational excellence that comes with that, owning every support of the supply chain means you have to spend resources and time and cost and have experts in every level, which has its own challenges, but then allows for extra data insights. And I know you’re a big fan of some data insights.

[00:11:52] So I want to pick your brain on that. Are there certain metrics that you use internally that applied from Clorox over to the parents company in order to understand more [00:12:00] about. That consumer experience and then be able to replicate that back through the supply chain to make more informed, better decisions.

[00:12:07]Troy Datcher: Yeah. Data is, in my DNA. And we, we don’t have as much, I, robust data as what I’m accustomed to. It’s actually been a bit liberating to, we can lean on our experience. I got a bit more here and I liked that actually it allows you to move with more speed.

[00:12:24] So you’re not waiting for more data to make a decision but data is our friend and one of the benefits of having this, see the cell relationship. This is director customer platform that we have is we’re collecting data along that journey. So we can be better innovators because we actually know what’s working.

[00:12:40] We know that we should have a more personalized relationship with consumers because we are collecting more data. That’s an expectation. Every. As today. And so I’m excited about the data journey that we’re all on. And I think that’s going to be our best friend but we have some advantages there that we’re starting to lean in and take advantage of.

[00:12:58] And I’ll give you an example. We now [00:13:00] know, for example pricing strategies, like what really works for what brands, we, that’s a really big learning, new learning example for us, you don’t have to discount everything that you sell. Somethings don’t respond. We know what brands really move the needle.

[00:13:12] So when we take our resources and put it against the brand that featured in our ecosystem, like what brand really moves the needle, instead of just throwing things at the wall, we can actually have a more. Intelligent cadence of promotional activity based off of what really works. So that’s, what’s exciting.

[00:13:28] And, I was just having a conversation with one of our partner brands and they wanted to move into a new category space primarily because. It’s a fast growing segment where we looked at our data and said, Hey, we actually don’t think your brand can travel to that new form factor, but here’s in our data.

[00:13:50] We’ve uncovered. Here’s a place where it can go. And so we can now make more intelligent bets when it comes to innovation and evolving our [00:14:00] portfolio based on the data we’re collecting. And so that, that part is really exciting, but we’re just on the very. Tip of what data can really do to help us be better and be smarter.

[00:14:09] And that I’m really excited about, but it’s going to take an effort bringing in the right level of expertise. People used to working with data to turn it into insight. Something I’m very accustomed to. And then secondly making sure you’ve got the right tech structure to to bring that to life and make it turnkey for folks.

[00:14:25] We’ve got some work to go make some investments in that area to really become the company that we want to be in that. How do you guys balance

[00:14:33]Kellan Finney: that like a kind of emotion, I guess in terms of that brand approach to, you said, we want to be in this for backer. So clearly there’s some sort of emotion driving that besides just the, they think it’s a good opportunity, right?

[00:14:45] With what the data says, because this industry is so new. So that mentality of making data driven

[00:14:52]Troy Datcher: decisions is probably not. Very

[00:14:53]Kellan Finney: robust in terms of how traditionally the decisions have been made in the space. So how do you balance that emotional aspect

[00:14:59]Troy Datcher: with [00:15:00] the data? If I don’t win the war by giving them the data, which I’m not convinced that always that works.

[00:15:07] The good news is that we actually have a contained ecosystem to test these. Before we bring it to the rest of the market. So for example, the case I just mentioned, I won’t mention the brand name of the person who’s pushing me on this, but I will give you this worst case scenario. What we’re going to do is we’re going to take the.

[00:15:26] We’re going to put it in our 11 dispensary’s and on our delivery platform, we’re going to test it. And then we’re going to bring the data back and say, Hey, either we were right. Like the data told us beforehand. And now we actually have confirmation that has no traction or. We were wrong and let’s lean in and pour fuel on the fire.

[00:15:45] And let’s bring this to the rest of the market, but we have an opportunity to, do a micro test and contained test of these ideas quickly, assess if they’re worth it or not, and then expand them out if they are that’s something unique [00:16:00] and not something that I had at my disposal, whether working at Proctor and gamble, Clorox really didn’t have that opportunity to test things before bringing the rest to market Most companies in consumer products, packaged goods, they’re working really hard now to build their.com business, that director consumer business, so that they can use it as a testing ground. But it’s something they’re trying to retrofit into their playbook versus the opportunity that we have here, which is just to do it from the ground.

[00:16:26] I think it’s all,

[00:16:27]Bryan Fields: it’s also so interesting too. You can do limited quantity drops to build the hype. And if it plays and aggressively moves, you can go back to the drawing board and say, Hey, maybe we need to do more established drops with this brand and push this because you’re right.

[00:16:39] Owning every piece of the supply chain allows you to understand these different areas and then allows you to test things and then pull them off the shelf. If it’s not working, it never really existed. But if it did. Now we’ve maybe uncovered something that allows that. So when you were joining the parent company, was the brands, one of the key assets in that decision making process, you were saying, Hey, the ability to align with these brands that are maybe just local [00:17:00] now, but could translate globally in the future.

[00:17:02] Was that one of the key parts in your

[00:17:03]Troy Datcher: decision? Yeah, that’s the exciting part. You really hit it on the head, Brian. I To have an opportunity to bill brands that can travel outside of the state of California. It’s really exciting. And I’m a big believer that California will have a large say.

[00:17:17] On what this industry looks like longterm, and I think brands will be at the center of that. I joke around with my friends, I say, Hey, they grow grapes in Georgia and in North Carolina, but you buy your wine from California. And I do believe the same. Thing’s going to be really true with cannabis.

[00:17:30] There’ll be. A lot of I think energy from California that was translated into. Building brands outside of the state. And if we can make it here, we can make it anywhere because the term like for New York, right? If you can survive California, where there’s thousands of brands and tons of clutter, if you can come out of this standing with a brand that makes a place in the market, you can then take that and translate that out to the rest of the market.

[00:17:57] I firmly believe that. And that’s, what’s exciting about [00:18:00] this opportunity. There are a few brands who have a headstart there, but not a lot. There’s going to be some folks who choose to be there, Walgreens or Costco of cannabis. Like they’re going to have a dispenser on every street corner that won’t be us.

[00:18:13] That’ll be some folks who are like the best cultivators. In the entire industry, those folks have a really good headstart and that likely will not be us. But what we can do is we can build brands that deliver against the promise that has not been fully captured. I think yet it hasn’t been that market hasn’t been cornered.

[00:18:31] And I think there’s an opportunity for us to do exactly that. And

[00:18:34]Bryan Fields: I think you have another asset rolled up your sleeve, which is the influencer partnership, because the reach that your team can bring is almost unpair mounted, right? There’s almost no one who, if you sent out a mass email, We’re making an announcement about this.

[00:18:46] Every one sent on our social channels. I can’t even imagine what that type of impressions would be. You would be off the charts. So from an influencer partnership standpoint, in the cannabis industry, it’s split perspective on if it’s beneficial or not given the relationship. So is that [00:19:00] a core strategy piece?

[00:19:01] And can we expect rock nation members to be a part of product categories in the.

[00:19:06]Troy Datcher: Yeah. I won one of the other things that attracted me to this opportunity, as I mentioned, was just relationship with JZ and rock nation and in a very crowded, cluttered space, you actually need people that can help you cut through that.

[00:19:18] And to influence culture. I think you got yourself a halftime show that JG produced. Like these folks can really drive and shape culture American culture, global culture, and that’s, what’s different about what we have in our back pocket versus everyone else. But the way that we think about influence in celebrity is it actually has to be born in authentic.

[00:19:40] And I think that’s, what’s probably missing what, some relationships that you see. And I was a lot of folks as I’ve joined the organization who say, what are we going to see? Jay Z in an ad for monogram? That’s not how this thing works. There’s never been the promise that we made with that relationship.

[00:19:56] JJ is a visionary he’s behind the scenes. He [00:20:00] actually helps provide that, that that long-term vision that any industry needs, any company needs any brand needs as they’re trying to be relevant, not only today, but for decades. And you’re not going to see billboards with, with Jay or being featured, they’re the way they they build brands is through.

[00:20:18] Authenticity and connection. And, the fact that monogram is really grounded in pointing out the POC prosy and the drug laws. And and that is built on the promise of providing equity and inclusion to the industry. That’s what’s great about monogram is it’s less about the Jay Z connection.

[00:20:36] It’s more about the purpose and which is grounded now, which J stands for, as I think about our relationship with Mariah. And Santana, it’s all about borne and authenticity. Cannabis has been a part of his life forever. It’s not, it’s not, we’re not looking for relationships with people that are interested in this industry because it’s an emerging growth industry that can collide people’s pockets.

[00:20:58] And it has to be born in [00:21:00] authenticity of like how the person’s used the product, how they incorporate with lives, something that is more born out of a connection. To, to what they’re trying to get accomplished versus just a name and and awareness because you’re famous. And so I think what you’re going to see from us is partnerships that are born in authenticity.

[00:21:19] If it makes sense authentically we’ll lean into those conversations. And trust me, we’re saying no to a lot of potential partnerships. When you’re entrusted to build a brand with Jay Z it gives you some Mr. Credibility. So I’m getting a lot of inbound phone calls from people I won’t tell you about on this call, who we have to say no to, because it actually is not, I can’t make the authentic connection to why they’re in the industry other than it’s a hot industry to be a part of.

[00:21:44] It’s pretty cool to tell your friends, you have a cannabis. And that’s really not enough to to really build something that’s going to be meaningful and sustainable. Long-term

[00:21:53]Bryan Fields: from a brand strategy standpoint, the, this question’s from AB, from Twitter, he wants to know about the higher end mids to [00:22:00] compete against local farms and cookies.

[00:22:01] Is there a plan in the future for

[00:22:03]Troy Datcher: that? Yeah. Mean if I tell you all the plans that I have to kill you guys. But yeah, we, we are right now we’ve got. Brands that are I think too crowded in terms of where they compete. And so we got to pull some of those things apart and make sure that we are developing brands that that deliberate gets a wide swath of consumers.

[00:22:24] I think we’ve got to figure it out on the high end. If you think about the luxury and a cannabis, which is only about 4% of the marketplace, that’s where monogram and Jay’s brand sits. And then we’ve got some brands in that mid tier range that are competing with each other. So we’ve got to do this work and we’re going to do some consumer work.

[00:22:40] And my next big hire will be a chief marketing officer someone that can help us with our brain journey and making sure that we’ve got the right portfolio that meets. A wide swath of needs in the, in, in the cannabis category. So we’ve got some work to do to pull those things apart, but yes, we are going to [00:23:00] be competing in a sec, all segments in tiers.

[00:23:03] And we have lots of ideas in that space. And it’s just not, it’s not no lack of ideas. It’s really around the strategic direction that needs to be. At the foundation of building those bands and we need to go do some work and we will be doing some work in that space. Yes, to answer the question more, to come there and about competing,

[00:23:24]Kellan Finney: Especially in the flower space, it’s probably the largest sector, especially in California and other states as well.

[00:23:30] And it is going towards more of a commodity marketplace or. And so I know that there is a movement within the California marketplace, if you will, to try to emphasize on like the appellation. And I don’t know, like where do you fall on that spectrum? Are you more favoring

[00:23:46]Troy Datcher: regulated.

[00:23:48] To, to

[00:23:48]Kellan Finney: shake the market as a, an Appalachian kind of marketplace somewhere to why, or do you think that regardless of that, it’s just going to totally head towards commoditization of the

[00:23:57]Troy Datcher: flour? Yeah, I do [00:24:00] think, the commoditization, the largest link largely seen as been on out. And the good news is that really quality indoor flower has as has held up a bit more resiliently in the face of commoditization.

[00:24:12] So hopefully that continues to play out. I do think that these Appalachians and regions will become important. Especially as you think about federal legalization and the ability to export the product to other states, I think people will look to region. I, as I entered this industry, I had a lot of people giving me some advice.

[00:24:31] A lot of people who I didn’t know were cannabis consumers until I came with the industry, a lot of people came to me and said, Hey, let me get you my point of view and perspective. And I’ve got some friends who, they come to my house and they, they they look at our portfolio of products and they ask questions around Appalachians and regions.

[00:24:49] And they’re like, I only spoke things from Humboldt. So I’m like, Very. Okay, cool. And without asking about quality or, or anything of that nature, like Humboldt, is it, that’s the [00:25:00] only reason I spoke and so I think there is something there I do. I’ve been spending some time talking to some folks who are, have a really long-term view of this industry who are working to build out destination opportunities in these Appalachian regions.

[00:25:17] And you go to Napa today for wine tasting and there are hundreds of wines. So I know that these towns that are known for their cannabis cultivation and the products that are grown there, the quality of the products they are thinking about, how do I create a destination for people who are interested in this industry to come out and visit, and they’ll build tasting experiences and sampling experience and education.

[00:25:43] And I’ve had the opportunity to talk to some folks who. We’ll have some interest in those areas. And so I do see that being something that we have all pay attention to long-term but yes, I think there’ll be a lot of that marketing and appeal because very similar to wine there’s there is some magic to the [00:26:00] topography and climate and those things that produce really good product.

[00:26:04]Bryan Fields: What’s one concept or fact that you’ve learned in the cannabis industry that would shock, let’s say, outside industry executives, looking to make the jump.

[00:26:14]Troy Datcher: That’s a good question. I it’s a great question. Always was me that one so far. I, the one thing that’s been shocking to me is really the quality and care.

[00:26:23] And in terms of the product that’s being developed I don’t think people understand that not Mt. Research development and science that goes into what we’re doing. I’m actually fortunate enough to have someone that I’m very familiar with who leads our innovation at the parent company.

[00:26:38] His things. Steve went to Steve actually was the R and D lead innovation leader for bird species, which is a part of clocks. And he actually was the R and D leader for Clark’s the billion dollar brain. And so I, when I got here, I knew that there was likely a lot of science technology. Quality behind innovation because Steve was leading it.

[00:26:58] And I know that’s what he’s [00:27:00] done for the last couple of decades. And I think for folks who are on the outside, they probably don’t understand like how much goes into that. And actually it goes into telling our story versus the illicit market. It’s a really interesting. Story that I think hasn’t been told incredibly well yet.

[00:27:17] But I think most people would be shocked at how sophisticated these operations are. It’s been shocking for me as I’ve traveled the U S and I was just with a a competitor. I used to worry loosely a competitor. Last week I was touring their facility and just taking a look at their operations and, the amount of And investment that people are putting into this industry is remarkable.

[00:27:39] And it’s actually reassuring because it, then you can really make promises that you can keep when it comes to quality and safety. And that part is pretty remarkable. And I think I, as an outsider, people probably don’t know the amount of regulations that are a part of this industry. That things are tracked really from C to say meticulously and and the costs [00:28:00] and complexity that adds to operators like ourselves and others.

[00:28:04] And I think those things would be very interesting, but I tell my friends, the water’s warm here. The S the ground’s pretty solid, you should take a look at the industry. And and I think that, as I continue to to talk to people who are only other side of the fence I, I’m sharing them that this is a legit industry that has a lot of longevity to it.

[00:28:25] And I’m seeing a lot of interest from consumer products, packaged goods and executives to, to move into the space, which I think has gotta be good.

[00:28:32]Bryan Fields: Long-term yeah, I think it’s good for everyone involved. And it really says something for you to say with your background about the regulations. If there’s a lot there, I can only imagine.

[00:28:40] Kind of the perspective you had pre and then going in and all that you’ve learned. So I want to stay with the science real quick. From the branding standpoint, is the parent company doing any science to validate the brands and to stand behind the products they create?

[00:28:53]Troy Datcher: Absolutely. And we spend quite a bit of time doing that work and.

[00:28:58] Th the really the [00:29:00] interesting thing that I’ve found in being here is we’re making, quality decisions, promised decision around, building a promise behind these brands that the consumer doesn’t even know about yet. We haven’t even found a way to talk to them about the amount of science and technology that goes into the product that we’re producing.

[00:29:23] And so I actually see it as a really a big upside for us when we get a chance to actually do a bit of that. I want to take people behind the scenes to, to look at. The science that goes into developing our products. I want them to go behind the scenes to see the things we say no to that they never see that comes to market because it doesn’t meet the quality or expectation.

[00:29:43] I don’t, I’m not, I don’t think people probably stay in that part from the outside, and I’m not sure if the illicit market has that same level of rigor. If you get a bad crop in the illicit market, do you still bring it through. Probably so with us, we’re saying no to things because [00:30:00] again, brand stand on a promise and if you can’t deliver on that promise on quality first, and then, it you can erode the trust.

[00:30:10] You’re building pretty quickly. And we take that stuff very seriously. I think it’s also

[00:30:14]Kellan Finney: serious for the industry from a cultural stigma

[00:30:16]Troy Datcher: standpoint. You know what I mean? Yeah. No, So

[00:30:20]Bryan Fields: one of my favorite things about what your team is doing is a social equity venture funds. So can you share more about that, the origin of that, and current aspects and the hopes of going forward?

[00:30:30]Troy Datcher: Yeah, I’m really excited about this work. As a matter of fact, I’m meeting with our leadership team next week to to work on our strategy. For the coming year in this very important area, you’ve seen the headlines on a couple of the partnerships that we brought to market in the course of the last year.

[00:30:45] One is Josephine and Billy’s, which is a female black owned a dispensary in Los Angeles. Shout out to Ebony and the team there. They’ve done a great job of creating a really interesting environment. For women to, to come in and learn and get educated [00:31:00] about the industry. They’ve curated some really great products and great line out to speak to that consumer and really proud of the work that Ebony and Whitney are doing in Los Angeles.

[00:31:10] And then Jesse Grundy. Who’s a young entrepreneur here in Oakland where I live. I love a lot about this town and this town has produced people like Jesse, who has created a brand called peaks, which is a brand that brings cannabis and culture and music together. And we were featuring Jesse’s brand in our ecosystem and spending time making sure that he has the capital means, but also the infrastructure and the know-how to be successful in an incredibly crowded space.

[00:31:39] And so we think that it’s important to. To invest in these young entrepreneurs to build equity and an opportunity for folks of color, to be a part of this industry. And, I mentioned in an interview just the other day that, I worked in a consumer products, packaged goods industry for 30 years, and we spent a great deal of time trying to retrofit the [00:32:00] industry to include folks where this industry has an opportunity to do it at the beginning.

[00:32:05] So you don’t have to go do. Other work too, like retrofit and have programs to dress it. If you can just build it from the ground up, then it will be reflective of the communities in which we live, work and serve, which I think is all that we’re all trying to do together. And so I’m excited about this work.

[00:32:23] I’m not very preachy, so I don’t tell people this is right or wrong. You should be dealing with. What we want to do is be the example of how to do it. And so we’ve got those two successful launches out in market. We’ll continue to work with them to ensure their success. And then we’re looking to add a couple other examples to our roster partnerships over the course of the next year.

[00:32:46] So important action over the. Absolutely words and pictures always have to match for service. I have a question about it.

[00:32:53]Kellan Finney: Can we say on that topic

[00:32:55]Troy Datcher: that, is that gone? No, I

[00:32:57]Bryan Fields: just want to

[00:32:57]Kellan Finney: Do your thing. All right. All right. [00:33:00] My question is what size of what size and stage of companies do you guys focus on what that equity fund is it any entrepreneur that’s got a business plan and kind of a glimmer in their eyes?

[00:33:11] Are you looking for more of a. Later stage post revenue, they’re looking to pour gas on the fire kind of opportunity or is it

[00:33:17]Troy Datcher: everything in between? It’s really, I’d say it’s probably been more the latter up until now. I think we want to open the door for entrepreneurs at all stages because if you think about most of these entrepreneurs, this is the first time they’ve actually.

[00:33:31] Venture into owning a business. And we’re doing a lot of work up front saying here are the types of things we’re looking for in order to make an investment. And so one of the things you’re going to hear from us is a call to action from other operators to join us on this journey. That we don’t see this as a competitive advantage.

[00:33:50] Like this, we’re not doing this for like market share reasons. We will actually want to do it as an example, inspire others to be a part of this and invite them to bring money [00:34:00] to the table so that we can service all of these entrepreneurs. The really sad thing is we’re going to have to say no to a lot of.

[00:34:06] We’ll have to say no to a lot of ideas because we don’t have the capacity or the bandwidth to executing this, all of them. And that’s, what’s really disappointing about this work is there’s no shortage of folks who need the help. It’s just a shortage of resources, time, energy in order to invest.

[00:34:22] And so we’re we’re trying to really expand that funnel to get with people who may just have an inkling of an idea. And that’s not been what we’ve done in the past, but we’d like to do more of that. So Tiffany McBride leaks at workforce. And the thing that Tiffany and I have talked about is setting aside a portion of our dollars for these call it long ideas.

[00:34:46] Now, any successful business when I was at Clorox or or my previous experiences, there was always call it 10% of. Investment fund called innovation fund. That was set aside around these like moonshot [00:35:00] ideas, like these really crazy ideas that you’re not betting the farm on because you’re actually, it’s like a 10% chance they’re actually going to be successful.

[00:35:09] But if it actually comes to fruition, it could be major. But the small, like the, it will be successful. I want to make sure we set aside dollars for that 10% that we take. So we lean in and take some chances and some areas where we’re not quite sure if it’s going to work, but somebody has a really crazy idea.

[00:35:29] I’m a really, and we like the entrepreneur, I liked him. We were more than, understand their business plan. I’ve seen so many examples of. Who’ve said I invest in the person because I liked them. I didn’t understand what they were up to. I didn’t know the plan, but I just believe in that person.

[00:35:44] I want to do a little bit of that. And right now we’re not built for that, but I love to get to a place where we can do more of that. And it’s so

[00:35:52]Kellan Finney: important

[00:35:52]Bryan Fields: To bet on the jockey, that in those opportunities. So I was eager to add. New York strategy, obviously with Jay Z and your [00:36:00] team, is there a thought process?

[00:36:02] Can we expect some parent company presence in the tri-state area in

[00:36:05]Troy Datcher: the. But we’re working really hard at that. And, we have a ambition to be in that Northeast corridor. As cannabis becomes recreational legal, we want to be there, but the first and foremost it’s about the quality of the.

[00:36:23] And whether or not we have the right partners to help get us the quality that’s required to meet the expectation that we have for monogram. I mentioned at the early part of the conversation, monogram is competing really in that really upper echelon of cannabis consumers, that four top 4%. Expect high quality.

[00:36:43] We’re having some interesting conversations with partners around where they are today with quality and what we need to see before we can say yes, the great news is there’s a lot of interests and there are people working really hard to get to that level of quality. But I can’t actually put a title.

[00:36:58] Line on it because it’s really driven [00:37:00] by the quality, not by like my timing as a CEO, I’d say yes. Let’s go to every state that cannabis is legal tomorrow. And the good news is that because we. JC and rock nation behind the initiative. There’s a lot of interest. The question is, can we deliver against the quality and we can be patient, we will be patient.

[00:37:19] And we ask for all those folks who are who are looking for. Experiencing the product to be patient with us because when we do deliver, we want to meet that expectation. Actually, we want to exceed it and that takes time and the right partners to do that. But I’m anxious to make those announcements.

[00:37:36] I’m interested in going to that Northeast corridor and beyond actually. And we’re just trying to make sure we have the right partners to help us execute that plan.

[00:37:44]Bryan Fields: Said, let’s do a quick, rapid fire. Sounds good. Most bullish category over the next 10 years.

[00:37:53]Troy Datcher: Wow. That’s a great one beverages, and I think cannabis consumption will be we’ll move to this [00:38:00] really social area where it’s not about if you’re going to take it out of the shadows.

[00:38:05] I think right now things are about being discreet and yeah. Again, I think people are stepping away into a. Being open about their use of cannabis. And I think I think different form factors will help with that. Beverages will be one of those. And the second thing is that there will be places where consumption will be allowed.

[00:38:27] And so that would the development of consumption lounges it’ll take away that stigma, I think as well. And so beverages, I think, will be at the center of that. And I’m excited about that being a part of that.

[00:38:39]Bryan Fields: Five to 10 years from now, a parent company brand will sponsor a world tour.

[00:38:45]Troy Datcher: Absolutely.

[00:38:47] And no doubt about it. We’re having some interesting conversations with partners today about that. Now we’re just waiting for the right opportunity, but absolutely part of what I think you’ll see from brands like ours [00:39:00]

[00:39:00]Bryan Fields: a year from now, we’re sitting here having a conversation. What has the parent company.

[00:39:05]Troy Datcher: Expansion of our brand portfolio outside of the state of California, in a limited focused approach. The other thing is I think 22 is going to be a year of carnage in 20 in California. And with that little access to capital, and I think in 23, we’ll be well positioned to go on a expansion, even further expansion aggressively in California.

[00:39:28] One of the things we have going forward versus others, candidly is our balance sheet and I’m working really hard with my team to protect that over the next 12 months. In 2023, we can look at what’s available. And I think there’ll be a lot of interesting assets available in 23. We want to be positioned for that since you’ve been in the

[00:39:47]Bryan Fields: cannabinoid industry, what has been the biggest misconception?

[00:39:50]Troy Datcher: I think that it’s that I think American sentiment is way ahead of. Like the, where our politicians and the laws [00:40:00] are. And so I think there’s a misconception of that. This is not as mainstream as it really is. One of the things that we’ve seen in the course of the last past year for us is a mainstreaming of mainstreaming and locations and where our dispensary said, I’ve got a couple of locations now that are in parking lots.

[00:40:23] Retailers like Costco and others. And I’ve got some locations that we had at the very beginning of legalization in California that looked like you’re going down an industrial road to do a drug deal. It feels like, why would I go down this road? Like it is only to do a drug deal.

[00:40:38] And so the more that we can actually mainstream it, I think American sentiment is already there. It’s about how do we catch up with. Zoning laws and all these other things, get those things fixed so that we can bring center my closer to the reality

[00:40:54]Bryan Fields: before we do predictions, we ask all of our guests, if you could sum up your experience in a main takeaway or [00:41:00] lesson learned to pass onto the next generation.

[00:41:05]Troy Datcher: Take the risk. I, I think this is my move to this. Industry’s all about taking a risk and I didn’t know what it was going to be. Like. I didn’t have many friends that were in. It’s gonna take real practical business experience from, these industries that have stood the test of time for hundreds of years to bring to this new emerging industry.

[00:41:22] And I’d say don’t be afraid to make the leap really well said. All right,

[00:41:27]Bryan Fields: prediction time, Troy, what mega policy causes more disruption to the future of the cannabis industry, federal legalization or interstate commerce.

[00:41:37]Troy Datcher: Ooh, you got to make me choose between those two.

[00:41:42]Bryan Fields: I’m going to have to last. So I got a

[00:41:43]Troy Datcher: worse situation than you.

[00:41:45] That’s a fair. I think federal legalization is just so far off. It just, it can’t, I can’t even wrap my head around it. So I have to say interstate commerce. I have to lean on that. Yeah.

[00:41:56]Bryan Fields: Why do you think it causes more disruption?

[00:41:57]Troy Datcher: I just think that We’re seeing a now a [00:42:00] microcosm from CA like Kennedy county, municipality, Ms.

[00:42:03] Fatality in California, if someone wants to attract cannabis to it’s it’s city, it just lowers the taxes. So you got like this really wonky thing where like I was meeting with a mayor of a city just a couple of weeks ago, and I was explaining to him like, Hey, you do understand that the NIS valley next door.

[00:42:24] As a very different tax rate, I’m not threatening you. I’m not saying that we’re going to pack up and move next door, but it wouldn’t make sense as a business owner to do that. And I think the stakes are going to compete. I think it’s going to be very interesting. If we don’t get in front of this thing, we could have a really wonky industry that is not built the way you would build any.

[00:42:44] For success. So I think we’ll have to wait and see how it plays out. I was

[00:42:47]Bryan Fields: going

[00:42:48]Kellan Finney: to go legalization, but that point you just made about taxes. I think that honestly, interstate commerce will be more disruptive because you could factually illegalize it. And every state could figure out how to do what they want with it.

[00:42:59][00:43:00] But if you. But interstate commerce happens. There could be states that never ever grow cannabis at all. They just literally import it the whole time. They never even had the opportunity to build a brand or build any market or anything. They just accepted what California has been building, for instance.

[00:43:15] So I’m going to go with. I’m going to jump on that boat. Sorry, Brian.

[00:43:21]Bryan Fields: No problem. I’m going to take the other side. So I think federal legalization is going to cause more disruption because I think currently in cannabis, we’ve got big MSOC, we’re all competing for market share, but I think the one missing piece of the current puzzle is these monster fishes outside, like Clorox, like Pepsi and Coke that are ready to come into the space.

[00:43:39] And I don’t think they enter the space. Maybe. Legal work, I guess on top and out loud until federal legalization happens. And when that happens, the game completely changed because it is just Titans fighting Titans and it is a very different game space. So I think federal legalization caused us more industry disruption.

[00:43:58]Troy Datcher: I can go, like I said, I think is a [00:44:00] very tough question. The interesting thing, I think, the company that I’m trying to build is one that That has that in state of mind. I think that if you think about the companies, the consumer products, companies that are sniffing around the industry, and it’s one of the reasons why actually I hired the Boston consulting group to help us because that’s the company people are calling, it’s just sniffing.

[00:44:22] So they actually know us better than probably any other company in cannabis. So that’s part of the secret sauce. But what was interesting is I think that those companies will look to. One of the balance sheet can they run a business, but to who’s running the business. And I think none of them will integrate these companies into their portfolio right away.

[00:44:44] They’re gonna acquire the company. Look, they want the benefit of owning it, but they’re not going to integrate. So they’ll leave them like on the sideline and they’re going to need really complex. People who have done this in major industries to [00:45:00] be the people that they trust to run those at those companies.

[00:45:03] And I want to build a company that speaks that language, people that have big corporates, fortune 500. Industry experience. They’ve talked to investors, they met with analysts, like bringing that experience to the table will make it more comfortable for those companies to invest in companies like ours, because they said, Hey these folks have done that, but they understand our language.

[00:45:26] They know what we want out of leaders, and they’re going to build a kind of couple we’re going to be product. And then at some point, federal legalization comes in. You integrate these things and it just becomes to your point, the Titans, I think, as we. 15 years from now. It’d be interesting to see who actually owns this space to your point.

[00:45:45] We should get together for a cocktail in 10 years, and maybe

[00:45:49]Bryan Fields: off the record, we can have our predictions, cause I don’t want to

[00:45:54]Troy Datcher: throw it away. And then that’d be great. Meet me in Vegas. We’ll have a bottle of ASIS spade and [00:46:00] have some monogram and talk about it.

[00:46:03]Bryan Fields: So for Troy, for our listeners, they want to get in touch.

[00:46:05] They want to learn more about you and the company, where

[00:46:07]Troy Datcher: can they be? They can go to you can just Google the parent company and find this there I’m on LinkedIn. And, I’m the only tour data in the world. I think I’ve found out. And and so it’s easy to find me. I can’t really escape or go anywhere.

[00:46:20] I’m looking forward to hearing from folks and trying to build team. W if you’ve got some talents you want to bring to California, bring those talents, you got some ideas, send them our way. We’re looking for good ideas partners in and like-minded people. Awesome. Will they get off in the show

[00:46:35]Bryan Fields: notes?

[00:46:35]Troy Datcher: Thanks so much for your time. Try. Thank you. We’ll talk soon.

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