“We’ve been doing this podcast for over a year now, and I think if you listen to a very early one…we said this was going to be the year of mergers, acquisitions, and bloodbaths."
– Jason Laronde
– Joel Sherlock
“When you build an entire greenhouse, and you expect that it will get paid off in two crops… Even if the economics were that good, you can only assume then that other people will get into that market. … And so now, some of our customers who are the biggest clients in the world—the biggest cannabis companies in the world—they’re starting to shift, and it’s like, ‘If I can pick up 2% here and 4% there.’ And that’s such a shift from 18 months ago where it was just like, ‘I’ve got a license, how quick can I get going?’”
– Joel Sherlock
“I feel like more cool sht’s gonna come to light at MJBiz. Everybody’s going to walk around that floor and be like, ‘Whoa, what is that and where did that come from?’ I think that’s going to be the show that everybody goes, ‘Boom, that’s what we’ve been doing for the last year.’”*
– Dexter L’Amarca
As Extraction Insiders celebrates its first birthday, and in anticipation of events season, hosts Joel Sherlock and Jason Laronde sit down to take a look back as well as forward. They’re joined by Dexter L’Amarca, Ancillary Sales Manager at Vitalis and resident expert on innovation in cannabis processing and products.
It’s safe to say that it’s been a year of massive change. The world of cannabis is opening up, and there have been sweeping regulatory changes, particularly across the USA and Europe. In Canada, the next legislative hurdles approach with psilocybin, MDMA, and more. Within the cannabis industry, companies have merged, acquired, succeeded, and failed, all with an eye toward serving an increasingly educated consumer on a growing scale.
The pandemic also provided companies like Vitalis with an opportunity to hit reset and explore how new technology could solve problems, resulting in a massive surge in innovation. All in all, so much has happened over the past year and a half in the background of the industry, and our hosts cannot wait to see what this means for the future.
Vitalis is going to be at two of the largest cannabis conferences at the end of this year, east and west, and is excited to see you all in person. First, find Vitalis right up front at MJBizCon in Las Vegas from October 20 to 22, 2021, as a proud Gold Sponsor. Right after that, they’re heading to NYC for CWCBExpo from November 4 to 6, and you may even find Jason on stage for a TED-style talk. These will be shows you won’t want to miss, as a year’s investment in research, development, and innovation comes to light.
[0:00] TEASER: What is the last thing Jason YouTubed, and can Joel recover from his Bring a Trailer addiction? Would Joel and Jason go on Elon Musk’s rocket, or Richard Branson’s? What hobbies (and COVID vices) did they cultivate this past summer?
[5:03] Today’s episode of Extraction Insiders is something a little different: Joel and Jason are hijacking the show themselves for a chance to tackle the highs and lows the cannabis industry has faced this past year, and what excites them as they enter the event season.
[6:02] It’s going to be a big year. It’s already been a big year. Cannabis has been deemed an essential service by the UN. 18 states in the US, including New York, have legalized recreational marijuana. Hemp was legalized federally.
[7:20] There are completely legitimate companies with thousands of employees still paying their income tax in cash. What will happen when banking laws change and big banks step in with more tools for cannabis industry players to build their business?
[8:10] Joel geeks out over patents. Big tobacco companies have been filing swaths of IP, and the duo discuss the market impacts.
[9:10] In Canada specifically, there have been early rumblings of psychedelics. The duo discuss the fascinating medical research emerging and draw parallels between the psilocybin and hemp industries: “This is like cannabis ten years ago.” Joel explains the finer points of purification with an eye to clinical trials.
[13:36] It’s been a year of consolidation. Companies have crossed borders, come together, succeeded, and failed. A year ago, Joel and Jason predicted a year of “mergers, acquisitions, and bloodbaths”—and they were right. Getting the shelf space is important, but keeping it (and keeping it full) is as important, if not more so.
[16:08] Consumers are starting to care. Preferences have evolved from “highest amount of THC, lowest amount of dollars” to an affinity for taste, smell, and experience. Budget brands will always exist, but some amazing craft products have emerged. Joel and Jason discuss customer loyalty and the influence of budtenders.
[18:30] Time to talk about pitfalls and failures. Major price compression was expected as competition intensified. Vitalis customers, who include some of the biggest producers in the world, are more closely attuned to their contribution margins: optimizing extraction processes, reducing transfer loss—it matters now. Will these trends also repeat in the psychedelic market?
[21:19] Joel and Jason discuss the demands of EU GMP. As the regulatory environment continues to evolve and players jump from one regulatory environment to another, it takes an entirely different way of thinking and an ability to anticipate everything that could possibly happen. What’s the right balance between quality assurance and cost—and why is “pharmaceutical bread” a terrible business idea?
[24:20] In cannabis, similar to other sectors like organic food, consumers are gaining a better understanding of the products they consume, what might contaminate them, and their planetary impact. How will buying habits—and demand elasticity—change accordingly?
[26:15] Let’s talk some innovation (welcome, Dexter!) Topicals, tonic waters, and equipment have proliferated this year. In Dexter’s opinion, “more cool sh*t is going to come to light at MJBiz.” At the show in October, the past year’s projects and innovations will emerge—with Vitalis being no exception. The pandemic has provided an opportunity to pause for a moment and consider new solutions to persistent problems.
[29:19] New at-scale commercial solutions for THC remediation were one of the coolest systems to emerge this year. Traditionally, high-performance liquid chromatography would be done on a gram scale, with an 8- to 24-hour processing time. New solutions can handle higher volume and guarantee zero THC.
[31:40] Also exciting: a lot of people have re-vamped old products, with faster run times and throughputs. For example, simultaneous decarb and solvent recovery has been “beefed up.” At a time when square footage for processes is at a premium, modular equipment for packaging and labelling has helped to save facility space.
[33:50] A brief foray into the economics of farming—and Joel shows his love for Jeremy Clarkson’s farming show.
[35:00] Back to innovation: Dexter talks about the benefits of interchangeable equipment—“different trays, different nozzles!”
[36:18] Some innovations this year have been a bit silly (Easy Bake decarb?), but some have been super cool, like PAX Labs’ pod that can tell the pen what parameters to use while burning.
[38:20] What else has Dex seen? “Everybody getting into bed together…some dating, some marriages, some divorces, some adultery”—talking about mergers and motion amongst industry players, of course! The cannabis industry is big, but small at the same time.
[38:53] MJBizCon will be “complete chaos” and a telling display of who is leading the charge in innovation. “It’s a full sprint, and I love it.”
[39:39] Joel is happy to see people asking better questions when buying equipment—such as, “Have you made this before?” Joel describes how Vitalis products are battle-tested before being rolled out—and takes a brief interlude for some F1 commentary.
[41:50] In Dexter’s opinion, the biggest industry change this year hasn’t happened yet on the pre- and post-processing side; it’s still to come as the industry picks back up. Will a switch from glass to stainless be “the cat’s meow” (or its pajamas)?
[43:47] Martha Stewart, Jeff Bezos—there are a lot of people talking weed! Big companies like Sam Adams and Pepsi are getting into beverage divisions. When big names from other markets come in, this changes the game.
[45:08] Speaking of game changers, Vitalis will also be exhibiting at CWCBExpo in New York City in November—featuring their Cosolvent Injection System. This crazy technology takes the best of both worlds: the selectiveness, safety, and cleanliness of CO2 and the speed, aggression, and comprehensiveness of ethanol processing—combining them into a single process.
[48:36] Given the year we’ve had, some shows are having record attendance. How will shows evolve: growing, extraction, product, food? There’s so much to explore.
[50:01] How many companies took the pandemic as an opportunity to branch into other industries? Probably not many—“It’s terrifying to be in a global pandemic and invest money in R&D.” But after starting with the most complex botanical, Vitalis found themselves ready to apply their tech to new avenues, like coffee.
[51:21] “Let’s crystal ball this.” What will be seen at the upcoming shows? Joel predicts a much higher level of sophistication and education on the floor. “They will ask hard questions, and you’ve got to have those answers.” For Dexter, it’s increased fluency in the science behind the equipment.
[55:12] We can’t wait to see you all in person again! If you’re going to be at any of the events or in the surrounding areas around the same time, give us a shout at firstname.lastname@example.org.
And don’t forget you can watch this podcast on the Vitalis Extraction Technology YouTube channel.
Hosted by Joel Sherlock & Jason Laronde, Vitalis brings you wise, humorous, and sometimes shocking conversations with entrepreneurs and extraction industry innovators on 'The Extraction Insiders'.