“On the farmers' side, we had been doing this pre-regulations under a MMAR license to understand what it took to get there. You needed to understand collection and upgrading to make that happen. When we went to the growing community we had a model that had been tested to a degree. Really the sale was when we got out there, we had the equipment, we showed up and invested the capital to actually hook up to the back of the combine, and even though that equipment didn't work perfectly...

On day one we were out there, myself, our COO, Shane, all of the management team were in the field running behind these combines and making sure this was happening, working crazy crazy hours. It was a do whatever it takes mentality and what it has done is - farmers are incredibly hard-working people so when they see not only are you bringing a model that is not costing them anything but you're working alongside them to try and make them money they are definitely there to stay.”

- Brett Halvorson

Brett Halvorson is one of many proving that those in cannabis can come from the most unsuspecting corners of business - even finance. He joined, then start-up, True North in late 2017, applying his extensive background in the financial space with a resume that spans industries including mining, fertilizers, and more - and experience working internationally where he expanded his knowledge on culture, language, and a whole new way of doing business.

In a few short years, Brett and his partners worked tirelessly in the office and in the fields themselves to build True North into the Canadian leader it is today in facilitating the production of bulk, extract-ready hemp for use in the medical-grade extraction sector. The company’s grower-focused model provides grain farmers with access to the best technology and expertise to leverage what was once a by-product of their growing process. With innovative tech, the Alberta-based company is monetizing the transformation of lower potency, high volume hemp biomass into a higher potency, for an extraction product that can be cost-competitive with those cultivated indoors.

In this episode of The Extraction Insiders, hosts Joel and Jason, discuss the uniqueness of the Canadian hemp market and the metric-shattering potential of advancing extraction technology - with an appearance by special guest Kayla Mann, CFO of Habitat Life. In the cannabis industry, if you don’t move quickly, you’re left behind, and this episode is no exception, as the group deftly navigates between topics. Risks, rewards, innovation, entrepreneurship, and pulled-pork sandwiches: it’s all here.

Man in grey shirt speaking into a microphone with gumball machine in the background

[0:00] TEASER: The conversation opens with musings as to why “nobody gives a flying shit” about aquaponics even though the sustainability makes sense. Someone has to do it first and fortune favours the bold – so the group decides to head to Mars with Elon.

[2:40] Joel and Jason welcome Brett Halvorson, President & CFO of True North, to Extraction Insiders, as well as special guest Kayla Mann, CFO at Habitat Life, who’s hiding in the wings. It being SR&ED season, the CFOs suggest an acronym counter – can they hit 420 by the end of the podcast?

[5:48] Brett talks about how hemp in Canada is unique, and how True North has partnered with mature grain growers in Alberta, Saskatchewan, and now Manitoba, who were already growing for fibre, herd, and seed.

[7:55] How to separate the hemp from the chaff. How do farmers’ processes change in order to capture what was once a by-product for further use? Brett describes the technology, processes – and entertainment value - that True North brings to their relationship with farmers.

[9:19] “Certain product is deemed inadmissible.” The market for hemp grain aligns fairly closely with the organic product category, so most of True North’s sourcing is organic. But, technology within the extraction sector is improving to refine products with potentially more contamination risk.

[9:57] Joel geeks out about equipment design. True North industrialized some existing technology in the field and dialed in on specs to customize their separation and refinement process.

[11:52] Jason asks why farmers don’t do this on their own? Hemp is unique, and that comes with some capital-intensive demands. True North adds value by “defragmenting” all of these growers into one single supply source.

[13:03] Brett credits his understanding of retail-level agriculture to prior experience at Agrium and Nutrien. There’s a reason you don’t grow canola in a greenhouse…

[13:50] “You had to start somewhere!” True North is recognized globally now, but how did they go about getting that first customer? Having the equipment, and having invested the capital, and taking it to the field to work alongside farmers was what made the sale.

[15:27] Brett describes how True North’s model is similar, yet different, to traditional grain trading. Namely, pricing isn’t volume-based, but rather active ingredient-based, relative to how much CBD is in the crop. As Jason points out, you’re not buying plant material, you’re buying cannabinoids.

[16:47] True North has seen a lot, and learned “lots of expensive lessons” along the way. This leaves them in a unique position to advise farmers who are interested in optimizing the balance between grain yield and CDB yield, with tips from data collected on over 19,000 acres.

[17:52] “Do you just knock on farmers’ doors?” Brett talks about how True North’s marketing has evolved and how quickly word of mouth has spread.

[19:06] Kayla’s question: what kind of strains is True North working with? Brett is excited that their product can match the potency levels of on-purpose CBD production. “We’re able to take chaff in, and bump the cannabinoid content within it.”

[20:21] “It’s tricky.” Does True North have plans to go anywhere beyond Canada – or into any other markets? Kayla and Brett agree – the best approach is “low and slow, like a pulled pork sandwich.”

[22:03] The four discuss financials - and financial risk. At the end of the day, it all boils down to the price per pound for the grower, which still has to make sense. Paying $225 or $250 per seed doesn’t work.

[23:53] Back to Brett, as he reviews his journey from his CFA designation, to junior mining, to agribusiness, and now here. “When you like a model and you want to take some entrepreneurial risk, you at some point need to make a decision to make a move.” The group discusses the influx of expertise from all industries and backgrounds into the cannabis industry, and its accelerating effect.

[26:08] Brett comments on the reaction of professional services suppliers to the industry’s rapid growth and constantly evolving legal and regulatory environment. All of this fluidity requires a super strong pivot game – and a decent risk tolerance. “If you can’t move at the drop of a dime, you’re left behind.”

[27:56] Kayla asks Brett about extraction processes. Given the particle size, True North’s product favours CO2 extraction. “The rate at which extraction technology is changing, I think we’re going to see continually shattering metrics.” Plus, is there potential to isolate terpenes in the future, or would the necessary machine time make this prohibitive?

[31:30] Monetizing every piece of the plant. The group envisions a zero-waste world where terpenes, CBD, and THC are all extracted, and residual fibres become car door panels or hempcrete homes. As Kayla notes, “Hemp could make the world go ‘round.”

[34:06] Brett explains why True North specifically targets experienced hemp growers. A lot of speculative new growers joined the market in 2019 and 2020 – and not all were successful. Viability is much more than yield production, so these statistics alone can be misleading.

[39:18] Time to go back a little bit. Brett’s been in the industry for two years (14 dog years!) but what did he learn before this? Working in Brazil, Brett learned a new culture, a new language, and a whole new way of doing business.

[40:42] Are all molecules created equal? At the end of the day, if you’re going to an isolate, yes. The group discusses future markets – for isolates like CBG, for broad-spectrum hemp oil, and everything in between. The point of distinction for a proprietary product will begin at the isolation stage, or even at extraction.

[45:09] The pricing conversation starts in the field. Commodity growing is all about cost and scale, which is why True North’s advantage of having commoditized a waste product is so unique. Changing the game!

[46:10] “How do we make sure that hemp doesn’t turn into corn?” Is there a risk that hemp’s future value will be artificially propped up by subsidies? For Brett, hemp’s advantage lies in its three stream applications. As a sidebar, the group debates the merits of moving to Chilliwack – potentially a result of drinking since noon.

[49:10] True North owns the middle of the value chain – why not own it all? Brett shares his belief that being a “subject matter expert” will drive the most success in the long-term. He and Kayla discuss the importance of staying humble, and the power of partnerships.

[52:09] What would Brett tell a new farmer? His advice to on-purpose growers: get a grain contract first. And on the cultivation side: find someone who’s done it before, and take their advice.

[54:20] Let’s talk failure! Brett points out common themes that he’s seen amongst bets that have come up bust. (Hint: as Glenn Miller would say, fools rush in). Plus, should Kayla consider a second career in the MLB?

[57:24] “We’ve made mistakes, too.” Brett talks about learnings from True North’s –sometimes expensive – mistakes. Ultimately, diversifying their model, and not having “the whole farm bet on one thing.”

[60:13] Rapid fire! A few closing questions for Brett: who are his competitors? Any interest in minor cannabinoids? What’s next? Also, what are hemp bath salts?

[63:51] Find True North at www.truenorthcannabis.com, on Instagram @truenorthcannabis.

Or, reach out to our friendly team here at Vitalis through VitalisET.com or through our Instagram @vitalisextractiontech.

Connect with Brett LinkedIn
Connect with Kayla
 LinkedIn

Connect with True North Cannabis:
https://www.truenorthcannabis.com/
Instagram @truenorthcannabis

Selected Links on Topics Mentioned in this Episode:
Manitoba Harvest
Canadian Hemp Trade Alliance
LEGO’s hemp plastic plans

The Valens Company

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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'.