Cannabis 101 With Industry Expert, David Marcus

Transcript

Full transcript page · Interactive episode

============================================================
TRANSCRIPTION WITH SPEAKERS
============================================================

[00:00] SPEAKER_00: Welcome to Canada's podcast.
[00:06] SPEAKER_00: Hi, this is Celine Williams hosting for Montereo for Canada's podcast.
[00:10] SPEAKER_00: My guest today is David Marcus, an industry expert when it comes to all things cannabis
[00:15] SPEAKER_00: with over 25 years of experience.
[00:17] SPEAKER_00: And he is the founder and president of two Canadian cannabis companies, Natural Emphasis,
[00:22] SPEAKER_00: and a Bide.
[00:23] SPEAKER_00: Welcome to the show, Dave.
[00:25] SPEAKER_01: Thanks, Celine.
[00:26] SPEAKER_01: Nice to meet you.
[00:27] SPEAKER_00: I am excited to talk to you about this.
[00:28] SPEAKER_00: I think that, as we all know, cannabis is a very fast growing and fascinating industry
[00:34] SPEAKER_00: in Canada.
[00:35] SPEAKER_00: So with the fact that you have so much experience, I'm excited to get into your story.
[00:40] SPEAKER_00: That being said, I'm going to ask how you got to do what you're doing now, how you got
[00:46] SPEAKER_00: into the industry, your entrepreneur journey at, can you tell us a little bit about that?
[00:51] SPEAKER_01: Sure.
[00:51] SPEAKER_01: I guess the now of it is we're a licensed producer and cultivator of cannabis.
[01:00] SPEAKER_01: But our first brand that we launched is called Whole Hemp and it's a CBD brand.
[01:05] SPEAKER_01: So as far as I know, we're the only Canadian cannabis company to focus solely on hemp-based
[01:11] SPEAKER_01: CBD products.
[01:13] SPEAKER_01: So that story of getting involved in hemp and the hemp business, back goes back to
[01:21] SPEAKER_01: 94, I guess.
[01:24] SPEAKER_01: I was quite decided I wanted to be an architect, but I had been accepted into business school.
[01:32] SPEAKER_01: And by the time I figured that out, it was going to be another year before I was going
[01:36] SPEAKER_01: to go to architecture school.
[01:37] SPEAKER_01: So I figured I'd do two years of business school and then do architecture.
[01:41] SPEAKER_01: And in my first year of the school, I was put in an entrepreneurial section and we had
[01:47] SPEAKER_01: to do a project, a group project on an entrepreneur of our choice.
[01:53] SPEAKER_01: And so that was the early days of sort of the agitation, I guess, towards cannabis legalization.
[02:03] SPEAKER_01: And so we actually chose a fellow Chris Clay who had a store in London, Ontario, it was
[02:09] SPEAKER_01: a school of money.
[02:13] SPEAKER_01: And he was very interesting to us because I would say a true entrepreneur, he was trying
[02:19] SPEAKER_01: to change the laws.
[02:21] SPEAKER_01: But he was more of an entrepreneur as a social entrepreneur than I would say, so interested
[02:27] SPEAKER_01: in the financial side.
[02:28] SPEAKER_01: He really just wanted to do a constitutional challenge.
[02:32] SPEAKER_01: And so he started selling seeds and they didn't bust them.
[02:36] SPEAKER_01: So he started selling clones and then they busted them in.
[02:40] SPEAKER_01: And his old one was basically to go to court.
[02:42] SPEAKER_01: So anyway, we told the school or professors that this is the guy we wanted to do our project
[02:48] SPEAKER_01: on and this is not, you can't do that.
[02:51] SPEAKER_01: And so to be honest, I was in my early 20s and I was like, give me a break.
[02:56] SPEAKER_01: This is a master's program and you're telling me I can't do this.
[02:59] SPEAKER_01: I mean, I pretty much felt like just pulling the plug and saying, all right, I don't need
[03:04] SPEAKER_01: to be here.
[03:05] SPEAKER_01: But as it turned out, that same summer in 94 chose Strobel and Jeff Kahn, got the first
[03:13] SPEAKER_01: of modern research license to grow hemp in Tilsonburg, which is just east of London there.
[03:24] SPEAKER_03: And that was, it seemed to us a reasonable alternate.
[03:31] SPEAKER_01: And so we did our project on them.
[03:37] SPEAKER_01: Their company at the time was called HempLine.
[03:40] SPEAKER_01: And you know, it was an interesting time.
[03:42] SPEAKER_01: There was, we found out about a conference in Germany, which was the first modern
[03:48] SPEAKER_01: industrial hemp conference and I convinced the school to send me there to do research
[03:55] SPEAKER_01: and I ended up writing a couple of case studies that were taught in the school with a couple
[03:59] SPEAKER_01: of my colleagues at the school.
[04:01] SPEAKER_01: And then that summer, my partner and my wife and I started our first business.
[04:08] SPEAKER_03: And we basically just started selling all the hemp products that we could find.
[04:17] SPEAKER_01: All right.
[04:18] SPEAKER_01: So we basically we'd do festivals and we get hemp clothing and hemp paper products and
[04:22] SPEAKER_01: hats and maybe some hemp food and we did festivals and just kind of got a sense of
[04:28] SPEAKER_01: what people were interested in.
[04:31] SPEAKER_01: And you don't get all right.
[04:33] SPEAKER_01: And I actually went to Holland for a semester on exchange in the second year.
[04:41] SPEAKER_01: And so she ran the business while I was over there and I finished up school.
[04:46] SPEAKER_01: And afterwards, you know, my colleagues at school were, you know,
[04:51] SPEAKER_01: being hired by investment banks and consulting firms and this kind of thing.
[04:54] SPEAKER_01: We kept our little hemp business going.
[04:56] SPEAKER_01: At the time, it was actually called natural hemp basis.
[04:59] SPEAKER_01: And what we found out, I mean, really, I guess the entrepreneur,
[05:02] SPEAKER_01: June journey is what that was basic market research was what it was.
[05:08] SPEAKER_01: And the one thing that we found that we had a direct line on because they were the sponsors
[05:13] SPEAKER_01: of this first international hemp symposium in Germany that we went to
[05:19] SPEAKER_01: would they had launched a brand of hemp rolling papers.
[05:22] SPEAKER_01: And so I guess the idea of rolling cannabis and cannabis paper hemp paper was appealing to
[05:30] SPEAKER_01: consumers. And so in addition to making some of our own products, we made, we made, you know,
[05:36] SPEAKER_01: a bunch of textile products. We made some paper products more, you know,
[05:39] SPEAKER_01: our sort of design oriented products even at that time quite interested in design as well.
[05:45] SPEAKER_01: And let the rolling papers were the things that really sold.
[05:49] SPEAKER_01: And we ended up changing the name of the company from natural hemp,
[05:54] SPEAKER_01: from natural hemp, from natural hemp,
[05:55] SPEAKER_01: to natural hemp,
[05:56] SPEAKER_01: and dropping the age because as a long story short, we connected with another company who had a
[06:03] SPEAKER_01: really great product at Barcelona, Spain.
[06:07] SPEAKER_01: Michele Costas is the company's name. And they were launching their own better than the original.
[06:13] SPEAKER_01: We started off with hemp rolling paper. And they asked us to do it exclusively.
[06:20] SPEAKER_01: They're their whole line of papers and some of them, they want all hemp products. And we didn't
[06:23] SPEAKER_01: want to use the name hemp for a product that had the other paper types in there. And so we did that.
[06:30] SPEAKER_01: We kept the name natural hemp because it's going because we ended up continuing in research.
[06:36] SPEAKER_01: And in the early days, you know, when you're trying to figure out what you're going to do,
[06:39] SPEAKER_01: you have a product that works, you're trying us some other things. And so just poking around
[06:43] SPEAKER_01: us quite interested in what was going on here in terms of moving the laws. I mean, so even though we
[06:49] SPEAKER_01: didn't do our project on Chris Clay and his constitutional challenge, which went very well. And he
[06:56] SPEAKER_01: got there and he got a slap on the wrist, but the judge has a turtle bassie said it's not my
[07:00] SPEAKER_01: jurisdiction to talk to the politicians. So, you know, we kind of were in an early state of lobby.
[07:09] SPEAKER_01: I guess I wrote a paper while I was at business school thesis, I guess, if you will.
[07:16] SPEAKER_01: A few years later, I was invited with a bunch of other people in the industry to Ottawa.
[07:23] SPEAKER_01: At that point, as it turned out, it was right before they changed the laws to allow industrial hemp
[07:28] SPEAKER_01: growing in Canada legally on a commercial scale. But at that time, I was still me, you know,
[07:34] SPEAKER_01: 50-50 at best that the laws would change. You know, it just seemed prohibition had gone on for so
[07:39] SPEAKER_01: long, even though there was this kind of a mental building, it seemed still unlikely. And it shows
[07:45] SPEAKER_01: what can happen when you do basic research. The woman, Jean Kierk, who was responsible for the
[07:51] SPEAKER_01: hemp father of health Canada, when she met me, she said, oh, okay, I know you. She said, your paper
[07:57] SPEAKER_01: was the first thing I was given to read when I was giving this role. And so that, I mean, that was
[08:03] SPEAKER_01: one small piece. And there were all sorts of other people doing their pieces. But collectively,
[08:08] SPEAKER_01: this big sort of snowball started, you know, gaining momentum in 1998. Hemp growing was industrial
[08:18] SPEAKER_01: hemp growing was legalized in Canada. The guys who started with hemp line, they were convinced
[08:25] SPEAKER_01: it was going to be a fiber crop, because hemp is low THC cannabis and industrial variety,
[08:31] SPEAKER_01: which historically has many used fiber. So in the 17th and 18th century, even the 19th century,
[08:38] SPEAKER_01: all the sales and the rigging of the ships were all made of hemp. Hemp, clothing was made of hemp.
[08:43] SPEAKER_01: Paper was typically rag paper made from recycled hemp cloth and ropes and stuff that they made
[08:50] SPEAKER_01: paper out of. So it really was the dominant fiber crop. And a few of us at the time saw this potential
[08:58] SPEAKER_01: for it to be an oil seed crop, really a, yeah, the oil seed crop. And we looked at flaxes,
[09:05] SPEAKER_01: the reference point, because flaxes are like hemp, and they're interesting plants, and that they're
[09:09] SPEAKER_01: not related. But they both have a very important fiber aspect as well as an important seed aspect.
[09:17] SPEAKER_01: And, you know, I think in the 1800s, hemp really eclipsed flax and flax started getting bred
[09:23] SPEAKER_01: for seed. And so when I looked in the 90s at what was happening in Canada, Canada was growing a
[09:28] SPEAKER_01: million acres of flax. And it was all for seed, none of it was for fiber. Flax fiber is linen,
[09:34] SPEAKER_01: it's very fine, very clothing, but it doesn't have the technical properties of hemp,
[09:39] SPEAKER_01: which is a much stronger fiber, more resilient to rot and so forth. And so the early, you know,
[09:46] SPEAKER_01: when we were in Germany, the industry that was taking off there was all based on the fiber,
[09:51] SPEAKER_01: but a number of us recognized that Canada's not, I mean, we're a fiber economy from a tree standpoint,
[09:58] SPEAKER_01: but not from an agriculture crop standpoint. And so long story short, we started, we partnered with
[10:05] SPEAKER_01: that, well, I did a three year research project with a researcher at agriculture Canada,
[10:10] SPEAKER_01: Dr. Ernest Small, Ernie, is really a Canadian grandfather of cannabis research. He's been researching
[10:18] SPEAKER_01: cannabis within the context of working as a research scientist at agriculture Canada since the
[10:25] SPEAKER_01: early 70s, near early 70s. He actually had a two acre, like high TFC cannabis research farm
[10:32] SPEAKER_01: in that the experimental farm in downtown Ottawa. So, you know, from an academic standpoint, he's
[10:38] SPEAKER_01: been pushing things for quite a long time on the cannabis front of Canada, far before anyone
[10:44] SPEAKER_01: is talking about him. And he was interested in it. And so we did a three year project where we got
[10:49] SPEAKER_03: genetic material from all over the world, or what seed yielding potential it might have. And
[11:05] SPEAKER_01: that was quite interesting. We published a bunch of papers and he introduced me to a colleague,
[11:10] SPEAKER_01: Art Malkyroy, who was also at agriculture Canada at the time, and he was going off on his own.
[11:16] SPEAKER_01: And he was an oats breeder. And we started breeding hemp. And so other people did around the same
[11:23] SPEAKER_01: time. And before long, Canada was growing 100,000 acres of hemp, and it was all for seed.
[11:29] SPEAKER_01: And so as it turned out, I guess you would say we were right in that, that was really the fit.
[11:35] SPEAKER_01: And most of that seed has gone into the health food market. So initially, and this is a thing
[11:44] SPEAKER_01: that I find so interesting looking at the entrepreneurial journey, if you will, is that you have this
[11:48] SPEAKER_01: expectation going in of what that product is going to be. But what I found through my time is it's
[11:54] SPEAKER_01: actually you have to try a bunch of things and actually listen and find out what people want.
[11:59] SPEAKER_01: And so everyone thought it was going to be hemp oil. And so hemp oil Canada was one of the
[12:05] SPEAKER_01: early companies. And but really it was it was the holdhead seed, which are more commonly
[12:09] SPEAKER_01: known as hemp hearts. That's the bulk of the 100,000 plus acres that are being grown,
[12:14] SPEAKER_01: are for hemp hearts. And that's how the industry develops. So we bred and registered probably
[12:21] SPEAKER_01: four or five different varieties of hemp and stayed involved in the meantime. I started another
[12:25] SPEAKER_01: company and a good friend and colleague, Rulie kept that business going. And then as time passed,
[12:34] SPEAKER_01: medical marijuana became a thing. And so there was, you know, we always kind of were in the periphery
[12:41] SPEAKER_01: and we're kind of watching and thinking about opportunities. And
[12:47] SPEAKER_01: there were so there've been a variety of different sort of steps along the way in cannabis
[12:53] SPEAKER_01: legalization that led to full legalization a few years ago. But the first was the hemp legalization.
[13:00] SPEAKER_01: And then it was the medical legalization. And initially the government was basically did an RFP
[13:09] SPEAKER_01: and had a single producer producing for it. There's a whole long story there I won't go into,
[13:14] SPEAKER_01: but long in the short of it, the patients weren't very happy with the quality. And so they opened it
[13:22] SPEAKER_01: up. And when they opened it up, the MMA-R was called at the time. It was really letting the genie out
[13:30] SPEAKER_01: of the bottle, right? Because they were being forced to do it by the courts. And the way it all
[13:36] SPEAKER_01: played out, they really didn't have all the regulations figured out. They just kind of, you know,
[13:41] SPEAKER_01: if you have a prescription, you can grow it for yourself or you can grow it for someone else who
[13:45] SPEAKER_01: has a prescription. Next thing you know, there were people growing it quasi legally all over the place.
[13:49] SPEAKER_01: And they realized, oh no, like this is just getting a bit out of control. I mean, in a way, it was
[13:55] SPEAKER_01: working great. But from the standpoint of they wanted it to be very, you know, like control. I mean,
[13:59] SPEAKER_01: the first medical marijuana license they gave was to grow in the bottom of a mine as they were so
[14:06] SPEAKER_01: concerned about security. Right? So fascinating. And blow it, right? Because they were paranoid about it.
[14:12] SPEAKER_01: The next thing you know, they made this change and then everybody's growing it. And
[14:18] SPEAKER_01: is it legal? I'm not sure. It's kind of legal. And anyway, so after that, then they came out with
[14:24] SPEAKER_01: the MMPR, which was kind of a more focused, regulated form of the medical rig. So we said, okay,
[14:32] SPEAKER_01: let's do that, right? And so we put it, this is 2013, I think, and we put in our license application.
[14:39] SPEAKER_01: And we got what was called a letter to build right before they, like, because I think what happened
[14:43] SPEAKER_01: is when they came over the MMPR rigs, they kind of needed some companies that were in line. So
[14:50] SPEAKER_01: right before, you know, maybe a dozen or a couple dozen companies sort of got their letters to build.
[14:55] SPEAKER_01: Okay, so they could say their companies were, you know, I've been given the green light to go
[14:59] SPEAKER_01: ahead and build. And the plan we had was for building that was owned by a friend of mine. And so
[15:05] SPEAKER_01: when I went to him and turned out it was going to be available because they had bought it, they were
[15:09] SPEAKER_01: buying another building, that other deal fell through. So I went and bought another building
[15:14] SPEAKER_01: conditionally and told the government they, we just want to amend same plan, same security, we just
[15:20] SPEAKER_01: transferring all that to this other address. And they're like, no, no, you can't do that.
[15:24] SPEAKER_01: You can reapply, but now you're back in line instead of being number 20, say, we were number 600.
[15:31] SPEAKER_01: And so I was like, hold on, that doesn't sound like a good deal to me. And this is the other thing I've found
[15:36] SPEAKER_01: in life and business is sometimes these things that seem like the worst things are really so often
[15:45] SPEAKER_01: are the very best things. I mean, when I go way back when we started and when I got out of school,
[15:50] SPEAKER_01: we decided we were going to open a store, right? Because that seemed like the thing to do when we
[15:54] SPEAKER_01: put a bid on us based out on Queen Street West and like 20 minutes before they got our offer,
[16:00] SPEAKER_01: they got another offer that they accepted. Best thing had ever happened to me, stayed at a retail,
[16:04] SPEAKER_01: right? We just went the whole salary. And so same thing with the MNPR, when we didn't get that,
[16:10] SPEAKER_01: we just stuck back and said, okay, let's just take a deep breath and watch how things play. And
[16:15] SPEAKER_01: it really had a silver lining because what I came to realize, it was right around that time that
[16:20] SPEAKER_01: that CBD as a component, because Medicare marijuana at that time was all about THC, right? And
[16:27] SPEAKER_01: the difference between THC's, THC gets you high and CBD is non-intoxicant, but has many therapeutic
[16:34] SPEAKER_01: benefits. And so we started hearing about CBD and it's funny because I mean, you know, in the early
[16:41] SPEAKER_01: days in the hemp industry, I don't know, nobody was talking about CBD. I can't remember when
[16:45] SPEAKER_01: the Chuleum discovered it, but it was kind of around that time and it was, you know, the first
[16:50] SPEAKER_01: paper was just coming out. It just, it wasn't publicized yet. And so we heard about that because we
[16:56] SPEAKER_01: stayed in the hemp industry at one point during that period, we also did a hemp seed energy bar
[17:00] SPEAKER_01: because, you know, we're, so we were still with the breeding and a hemp seed energy bar, we were
[17:05] SPEAKER_01: really tied in. And so we're part of the hemp industry association was called the Canadian
[17:11] SPEAKER_01: hemp trade alliance. And it really is a very good organization. I have to say, for a young
[17:16] SPEAKER_01: organizing, a young industry having a very good trade organization that is representing really
[17:24] SPEAKER_01: the whole industry was amazing because they were able to be one point of contact for the government
[17:33] SPEAKER_01: and as a lobby group, it was very, very important. But I mean, it went from no one in the hemp industry
[17:39] SPEAKER_01: want to even talk about CBD because they didn't want the like hemp was seen to have been successful
[17:47] SPEAKER_01: and the and the hemp regulations that allow for hemp growing Canada were successful because it
[17:53] SPEAKER_01: wasn't marijuana. It was less than 0.3% THC by law, very structured and they didn't want to mess
[18:00] SPEAKER_01: with that because a lot of people had a lot of really a good thing going and but right at that times,
[18:07] SPEAKER_01: trying to think now probably 20, 15 maybe somewhere around there. We basically, again, a small group
[18:16] SPEAKER_01: bus convinced the bigger group. This is the time to start thinking about CBD. I mean, literally
[18:22] SPEAKER_01: the year before they kicked someone out of the symposium, the annual symposium for talking about it.
[18:27] SPEAKER_01: But a friend of mine is a lawyer who was interested in it. I got them to bring her in and we wrote a
[18:32] SPEAKER_01: white paper and really the idea was because there was this kind of noise about the government was
[18:37] SPEAKER_01: really thinking about going further with the cannabis legalizations beyond just the MMPR,
[18:42] SPEAKER_01: which came the ACMPR and actually legalizing cannabis. So the industry is like thinking, well,
[18:48] SPEAKER_01: hold on, we've been in this longer than anybody. We don't want to be left out. So at that time,
[18:54] SPEAKER_01: the hemp industry, the hemp trade alliance successfully lobbied for the inclusion of hemp in
[19:01] SPEAKER_01: the new regulations. And for us as a business, I mean, that we were interested in getting into this
[19:09] SPEAKER_01: new business of what was being made possible by these new regulations. We saw this opportunity to
[19:15] SPEAKER_01: do hemp CBD. But at the same time, what was so interesting to us about hemp as a source of CBD is
[19:23] SPEAKER_01: that hemp has grown outdoors. And when we looked at what we'd almost done, buying a building and
[19:29] SPEAKER_01: growing under the MMPR and growing medical marijuana indoors, it's kind of an ecological
[19:37] SPEAKER_01: trade wreck. I mean, you're using power for lights, you're using power for heat, or for cooling,
[19:43] SPEAKER_01: you're using power for dehumidification. I mean, it's power power power plus you got
[19:49] SPEAKER_01: bricks in mortar. So it's expensive. Plus all the security that you require. So it's not a cost
[19:54] SPEAKER_01: effective way to grow and not need to logically sound the way to grow from our standpoint. And what
[20:01] SPEAKER_01: we learned over being in the hemidestory all this time is that cannabis actually does really well
[20:05] SPEAKER_01: outside. So we had a research license and we continued to start pushing the limit, you know,
[20:12] SPEAKER_01: what the hemp plant could do in terms of CBD production. And we got interested in
[20:18] SPEAKER_01: how can we really take advantage of these new regulations as completely as possible. And
[20:25] SPEAKER_01: long story short, what that means. And so the other thing I need to say, if you're going to be in
[20:29] SPEAKER_01: a regulated industry, you have to be patient. It takes a long time. And quite honestly,
[20:36] SPEAKER_01: it takes more money than you're going to expect. Because even though we've done it
[20:41] SPEAKER_01: on the cheap as it were, I mean, our approach is very much artisanal graph,
[20:46] SPEAKER_01: you know, kind of the craft beer of cannabis, if you will, right? It's local and craft
[20:51] SPEAKER_01: and smaller scale. Even so, you know, when it takes years to get all the required licenses,
[21:00] SPEAKER_01: and we started with research licenses, and then we moved to a lab license. And then from that,
[21:05] SPEAKER_01: we were able to sort of get a foot in the door and convert that over to a processing license.
[21:10] SPEAKER_01: And then eventually we got our cultivation license. And so now we have all the licenses we need.
[21:16] SPEAKER_01: And we're in. And we're doing hemp-based CBD where we buy from farmers as we expected.
[21:23] SPEAKER_01: And but we're also growing our own higher THC material at our own farm, Trent Hills. And so now we have
[21:29] SPEAKER_01: a fully operational craft-based cannabis company that abide, which as its first product is a brand
[21:41] SPEAKER_01: called Whole Hemp, which is based on this concept of not just being grown outdoors sustainably,
[21:48] SPEAKER_01: but also that the CBD is whole plant-derived. And by that, we mean in the marketplace of CBD,
[21:58] SPEAKER_01: you have kind of two camps. One are where it's called the full spectrum camp,
[22:04] SPEAKER_01: the whole plant-based, and the other camp, I guess, would be the isolate. And isolates are just purified.
[22:13] SPEAKER_01: And the cheaper, the more ubiquitous, but there's very good research out there that shows that when
[22:19] SPEAKER_01: you actually make products of the whole plant, so that you don't just strip out the CBD, but you have
[22:26] SPEAKER_01: trace amounts of THC and other lesser cannabinoids, you have the terapines and so forth.
[22:31] SPEAKER_01: That there's a synergistic effect called the entourage effect that actually
[22:37] SPEAKER_01: makes the CBD more therapeutically available. And so that's what our focus on. And strangely,
[22:46] SPEAKER_01: we thought, I mean, strangely because it was what the industry thought in the early days of hemp
[22:51] SPEAKER_01: industry that we thought CBD oil would be the thing. And so I mean, I bought 10,000
[22:57] SPEAKER_01: liters of organic sunflower oil and got ready for cranking up the CBD oil. And then with the time,
[23:05] SPEAKER_01: I mean, once you're licensed with health Canada, well, you still have to get approved by the Ontario
[23:10] SPEAKER_01: cannabis store because they're the LCBO cannabis and Ontario. And that takes time. And so
[23:16] SPEAKER_01: as time goes on, it turns out, well, they weren't really interested in the CBD oil because they had
[23:20] SPEAKER_01: other people doing that by that time. And so we started with products made with the oil. So we do
[23:26] SPEAKER_01: topicals. We do a CBD crane, which, you know, it's amazing. It's so fun to be in an industry that
[23:35] SPEAKER_01: helps people. We get these incredible emails and posts and stuff from people who use a product
[23:41] SPEAKER_01: and all the ways to helping them. And so really, it's nice to be in a business like that. It's one
[23:47] SPEAKER_01: of the really, I think, the wonderful things about this business we're in. But we also decided,
[23:53] SPEAKER_01: you know, those things are great. But when you buy a pot of green, it lasts you for a while. So
[23:59] SPEAKER_01: there was, there was some good orders, but it wasn't really enough to sustain the business. So
[24:04] SPEAKER_01: you keep trying new things in the product that really we found surprisingly to us that are now
[24:12] SPEAKER_01: our bread and butter are what we call the flower based products and then flower in the standpoint of
[24:16] SPEAKER_01: cannabis flower. So but flower, you know, cannabis flower. In this case hemp flower that
[24:22] SPEAKER_01: is nicely beautifully manicured and comes in a bud and you grind it up and roll it up and you
[24:26] SPEAKER_01: smoke it. And so I mean, at the issue, we're like, well, who and what that? I mean, it doesn't get
[24:32] SPEAKER_01: you high. It turns out a lot of people want it. And we've kind of come at it to figure it out. We
[24:39] SPEAKER_01: realize it has a bunch of therapeutic benefits that people can get and smoking for a lot of people
[24:45] SPEAKER_01: is a good way to get it, especially if there are cannabis consumer cannabis smoke. We're already
[24:51] SPEAKER_01: you find people who like to mix it with their higher THC material because it sort of balances it
[24:59] SPEAKER_01: out. It takes some of the less desirable attributes in marijuana like the paranoia and so forth. It
[25:06] SPEAKER_01: really does it way down. It's kind of like mix in a way, right? You know, not everyone's just
[25:10] SPEAKER_01: drinking straight vodka in the alcohol world. But it also has benefits on its own. So we know we've
[25:16] SPEAKER_01: heard from people who are trying to quit smoking cigarettes. And so they roll the CBD instead. And so
[25:21] SPEAKER_01: here we are in a business that is the business we anticipate yet with a product that was not the
[25:27] SPEAKER_01: product that we anticipated would be kind of the mainstay of our business. And so now we are as
[25:34] SPEAKER_01: the businesses growing, we're starting to do some blends of the hemp phase CBD with some of our
[25:40] SPEAKER_01: higher THC material where people are blending their own. So we are pre-blending at different ratios
[25:47] SPEAKER_00: for the customer. And that's how we got here. It's always so interesting how what we think something
[25:55] SPEAKER_00: is going to look like, especially as an entrepreneur is rarely what it actually ends up looking like
[26:01] SPEAKER_00: because people have opinions, demand changes, the industry changes in these ways where it's like,
[26:08] SPEAKER_00: oh, well, I guess I'm, so I hate the term pivot because I'm not talking about a pivot where you're
[26:14] SPEAKER_00: like entirely changing industries or anything, but where you're responding to market demand or
[26:18] SPEAKER_00: you're responding to market changes. And I think that one of the, you know, one of the threads inside
[26:24] SPEAKER_00: your story is that ability to do that over and over again is why you are still in the industry,
[26:30] SPEAKER_00: even as the industry has changed 20 years later. My business plan for a while was changing,
[26:36] SPEAKER_01: we believe. As I learn, I mean, really, because I don't, I'm not one of those bright business
[26:42] SPEAKER_01: planned down, but you still have an idea in your head of where you're going. But it's this general
[26:47] SPEAKER_01: direction and you're tweaking all the time as new information comes up. I mean, outdoor cultivation
[26:53] SPEAKER_01: was part of the draft regulations when they came out. So we're getting ready for that. Next thing,
[27:00] SPEAKER_01: we hear we see a new version and it's like, well, there's a question mark beside outdoor.
[27:06] SPEAKER_01: Well, so when I did some digging, it's because the incumbent publicly traded cannabis companies,
[27:11] SPEAKER_01: the big guys, they had already invested in all the indoor, right? So they were lobbying hard
[27:17] SPEAKER_01: to bury the outdoor. And then some things happened and outdoor was back in again, right? So,
[27:27] SPEAKER_01: every, literally, week or two, new information came in or whatever you just had to subtly adjust.
[27:33] SPEAKER_01: I mean, a new reg, you know, the regulations coming. You haven't seen the regulations. The draft
[27:37] SPEAKER_01: is different than the final regulations. You know, I mean, we actually were going to launch a
[27:40] SPEAKER_01: product as CBD oil and it was in a 240-mil bottle. And we didn't realize that when they changed
[27:47] SPEAKER_01: from the original cannabis regs, which allowed oil, CBD oil, to what they called the 2.0 version,
[27:55] SPEAKER_01: which sort of moved oil into other categories, extracts or edibles and these types of things.
[28:01] SPEAKER_01: They put in this weird regulation that an extract, which is what app oil then is considered,
[28:07] SPEAKER_01: right? Ampion, Guadal, larger than 90 milliliers. I mean, it's not like you think that the regs would
[28:14] SPEAKER_01: say you can't have more than this, you know, psychoactive component. But it's the worry about.
[28:21] SPEAKER_01: And they're just like, no, you know, the container can't be bigger than this. So I'm sitting on,
[28:26] SPEAKER_01: you know, a container full of containers that are too big. Yeah. So you say that.
[28:33] SPEAKER_00: Yeah, right? So I'm curious because, you know, the industry you're in is, as you've mentioned,
[28:40] SPEAKER_00: very regulated. It is a very specific world to be in. And I know that there is a lot,
[28:46] SPEAKER_00: there, we have a lot of people in Canada right now who are interested in or starting to step
[28:52] SPEAKER_00: into or looking to step into the industry in some way. And I'm curious what advice you would give
[28:58] SPEAKER_00: them or what you would note for them based on your experience in as regulated in industry. Because
[29:04] SPEAKER_00: I think, and I want to give the context for the listeners as well, I think that stepping,
[29:11] SPEAKER_00: when you have no experience in a regulated industry, it is such a different world to step into,
[29:15] SPEAKER_00: especially as an entrepreneur that I think it's an important piece of the conversation to have.
[29:23] SPEAKER_00: So that they're not just like, oh, you know, I started a tutoring company. I could totally start
[29:28] SPEAKER_00: a cannabis garden. No big, it's not the same thing. So you need to be patient.
[29:35] SPEAKER_01: Really do. You just need to be patient. And you have to be diligent. You have to dot your
[29:42] SPEAKER_01: eyes and cross your teeth. I have, you know, you need a team. I have a partner for a friend of mine
[29:50] SPEAKER_01: who's a partner in the company who's an intellectual property lawyer. And so he's been with us all
[29:55] SPEAKER_01: the way along. And it really helps in that sense to have in house counsel. You know, we did a
[30:03] SPEAKER_01: trade of legal work for equity. That was a great thing to do early on, for example. I have other
[30:10] SPEAKER_01: colleagues I work with in my other businesses who I'm able to pull in at certain times because,
[30:17] SPEAKER_01: you know, they have a very strong background in audits and, you know, really detailed oriented.
[30:27] SPEAKER_01: You know, so if we need a question, you know, like that answered, I can call someone in my
[30:33] SPEAKER_01: sort of broader circle who can help. It really helps. I mean, you can do it otherwise, but that's
[30:39] SPEAKER_01: really helped us a lot. And then, like I said earlier, it takes more time and time cost money. So,
[30:48] SPEAKER_01: I mean, we've always taken a low cost approach. And that's why we're still here. You know, we haven't
[30:55] SPEAKER_01: done an IPO. We're not looking for a lot of investment capital. I'm an entrepreneur. I like
[31:03] SPEAKER_01: to make my own decisions. I don't know what I'm telling you what I should be doing. And so we've
[31:09] SPEAKER_01: spent, but you're able to do that way if you really keep things tight all the way along because,
[31:15] SPEAKER_01: I mean, I've seen in the hemp industry in the early days too, right? People just spend like crazy
[31:21] SPEAKER_01: at the outset because they're so sure and they spend all this money and they're going the wrong way.
[31:26] SPEAKER_01: And so all that money's wasted. And it makes it much harder to be adaptable
[31:31] SPEAKER_01: when you're, you've already deeply committed financially to a very specific path.
[31:36] SPEAKER_00: Yeah. I think those are really important for people to be aware of. And I appreciate you sharing them
[31:42] SPEAKER_00: as openly and explicitly because it's good. It's a good lesson and it's good awareness for anyone
[31:48] SPEAKER_00: who's like, yeah, this will be easy. No big deal. I have all this money. I'm going to burn up front,
[31:53] SPEAKER_01: which happens all the time. Yeah. It's no joke that most startups, you know, that fail fail because
[32:00] SPEAKER_01: of lack of access to capital because you go through a festival and you expect 100% and it's part
[32:06] SPEAKER_00: of the reason, you know, I've had a few conversations on as part of the series where people have
[32:14] SPEAKER_00: gone out into the world and they have procured investment in the business. And that is a viable
[32:20] SPEAKER_00: option as long as you are aware of what you're giving up and you are okay with that and not
[32:26] SPEAKER_00: not every entrepreneur wants to do that. And that's okay. And for the entrepreneur, that's all they
[32:33] SPEAKER_00: want. That's also okay. That's a different way of diving into an industry. So it's just the awareness
[32:38] SPEAKER_00: and, and, you know, speaking into all the different ways that this could work. Because that's real.
[32:44] SPEAKER_01: The other thing I'd say about this industry and this is less about the regulated art, but in an
[32:49] SPEAKER_01: early stage industry, which cannabis is in terms of legal essentially. Sure.
[32:57] SPEAKER_01: It's really good, I think, at least from my standpoint to Carva, your own niche. It's amazing how
[33:04] SPEAKER_01: many people, I mean, I joke in our industry that the cannabis industry is like a bunch of six
[33:10] SPEAKER_01: year olds play in soccer, right? And the ball is how THD, right? And they're all like huddled
[33:16] SPEAKER_01: around the ball running all over the field, you know, chasing after the high THD ball. And that's
[33:21] SPEAKER_01: like when I talk to people, it's like a lot of people think that stuff's always too strong, right? So,
[33:27] SPEAKER_01: you know, coming up with other products, not just other categories drinks versus gummy bears versus,
[33:34] SPEAKER_01: but actually just looking at the product in a different way. Well, okay, yeah, lots of people
[33:40] SPEAKER_01: want to smoke something that's very strong. Fine, but, you know, it's an intoxicant. When I look
[33:45] SPEAKER_01: at the world of intoxics, the obvious reference is alcohol. Most people I know, rather have a beer or
[33:52] SPEAKER_01: glass of wine, they don't want to chug a Mickey anymore. I mean, maybe he's standing alive, right? But
[33:57] SPEAKER_01: right. Right. People who usually get over that pretty quick. Yeah, they're skipping that 100 poof,
[34:01] SPEAKER_00: they're skipping the 100 proof aram at a certain point. And that's right. Yeah. But I think we're still,
[34:07] SPEAKER_01: I think the cannabis industry in a way is still stuck in a prohibitionist mindset,
[34:13] SPEAKER_01: growing indoors under heavy security, growing the strongest stuff. I mean, an prohibition alcohol
[34:19] SPEAKER_01: was all whiskey because it's it's concentrated. It's easy to move after prohibition. That's
[34:24] SPEAKER_01: mostly beer and wine. Yeah. And so that's where I, you know, I always like to look cold when
[34:29] SPEAKER_01: everyone's zinging you look for his egg. And yeah. And if it's a big enough industry, there's lots
[34:34] SPEAKER_01: of these little niches that you can you can you can find and develop. And then you got to be
[34:40] SPEAKER_01: expecting a whole lot of competitions. All you get is a brief first mover advantage in the
[34:45] SPEAKER_01: the next thing, you know, and for us, that's branding. And so the whole hemp brand, we put a lot of
[34:51] SPEAKER_01: energy into really trying to establish that as a really high quality product,
[34:55] SPEAKER_01: sort of the go-to in that in that category because invariably, and then probably not to
[35:01] SPEAKER_01: disinfuse, there's going to be lots of coffee cans. And so quality ultimately, quality and a good
[35:07] SPEAKER_01: price point with good branding ultimately becomes your your rock, I guess. Yeah. But being there a
[35:14] SPEAKER_01: little earlier helps you carve out a bit of dirt. Yeah. And it's also there's also an opportunity
[35:22] SPEAKER_00: when as to your point, when you can see everyone chasing around the high THC soccer ball,
[35:27] SPEAKER_00: someone who steps in, even if they're not there early, but can see that from the outset,
[35:31] SPEAKER_00: from the outside and go, oh, there's an opportunity that's not that soccer ball. That's really
[35:36] SPEAKER_00: important as well to be able to do that. So I think that, you know, for someone who might be stepping
[35:41] SPEAKER_00: in to not look at the shiny soccer ball object that everyone's chasing, but look at the rest of the
[35:46] SPEAKER_01: field and see what's happening. Yeah. For us, we were lucky because we got because we didn't get that
[35:52] SPEAKER_01: building in both times, right? But both having cannabis, we tried to do something based on a piece
[35:57] SPEAKER_01: of real estate that didn't work out. And it seemed like this problem in both cases have really
[36:02] SPEAKER_01: helped our business. And in that case, we were we were chasing the IDHC ball indoors like everybody
[36:08] SPEAKER_01: else because that seemed like the only game in town. And it was only when we were forced to kind of
[36:13] SPEAKER_01: take a deep breath. And then you actually start not rushing the decision and thinking about it
[36:19] SPEAKER_01: more broadly and looking for other ways of looking at it that you've come to very different
[36:24] SPEAKER_00: conclusions. Yeah. Yeah. Dave, I really appreciate your time today. This has been super interesting.
[36:30] SPEAKER_00: And I'm really informative. I for all the listeners, this will also be in the show notes, but you
[36:38] SPEAKER_00: can find out more about Dave and what his business does at whole hemp.com. Is there any other
[36:44] SPEAKER_01: social media that they should be directed to? Our social media, we use the tag, whole hemp CBD is our
[36:51] SPEAKER_00: app. There you go, whole hemp CBD. So thank you, Dave, for your time. I really appreciate it.
[36:57] SPEAKER_00: It's been fascinating conversation. And for the listeners, thanks for listening to Canada's
[37:02] SPEAKER_00: podcast, like, comment, and subscribe to all our channels to get the latest podcasts from entrepreneurs
[37:08] SPEAKER_03: across Canada.