"I think that the industry is going to evolve as it has been in the last little bit to where the indoor guys are going to struggle and cost of production is going to become more and more of a play. It may not on the flower side, it may not on the dry side, but I certainly think on the liquid side, when you look at our cost of production versus somebody growing indoors, I just think it’s not sustainable. Those types of changes are going to evolve.”
– Rob Jones
“Prior to the cosolvent coming on stream, we were running 24 hours a day, seven days a week. And the simple math was saying we weren’t going to get completed all the biomass we had in the barn by the end of next crop year…You’re only as fast as your slowest piece of equipment…Our young guys are just absolutely thrilled with that piece of equipment. You come to work every day and it’s pristine, it’s clean, and they treat it like it’s theirs. It’s a Rolls Royce, and they treat it like a Rolls Royce, so much appreciated.”
– Rob Jones
Rob Jones is the President of Christina Lake Cannabis, and formerly Executive VP of Business Development and Sales. Located near the American border in the intersection of two lower BC valleys, Christina Lake Cannabis is uniquely positioned to use the natural outdoor environment to grow healthy, robust cannabis plants. The “outdoor advantage” brings with it a lower cost structure and results in a natural, high-quality product which treads more lightly on the planet.
Before getting into cannabis, Rob had a professional hockey career and then gained 35 years of experience in trading agricultural commodities around the globe. When Rob relocated to Palm Springs in December 2019, he thought it would be for retirement. But a few months later, after the pandemic hit and Rob returned to Canada, an encounter on a golf course led him to sign on as a mentor for agricultural startups. Not long after that, Rob learned that a cannabis company was looking for someone to sell oil. Within the week, Rob was visiting Christina Lake Cannabis, looking across a “magical” 18 acres of pot plants. The rest is history.
In this episode, hosts Jason Laronde and James Seabrook welcome Rob to share his expertise and industry insights, including lessons to be learned from the commodities industry, the importance of COAs, and why outdoor growing represents “agriculture at its best.” A satisfied Vitalis customer, and the first recipient of the Vitalis Cosolvent Injection System, Rob also gives his honest advice to industry newcomers on capital expenditure decision-making and finding the right partner for your business.
[0:00] TEASER: “Life kind of took a bit of a turn.” Rob describes how in a matter of months he went from considering retirement in Palm Springs to jumping into a new chapter of his career in cannabis.
[5:10] Vitalis welcomes Rob Jones to ‘Extraction Insiders,’ the show about entrepreneurs and industry innovators sharing “aha” moments, pitfalls, and tough lessons they’ve learned along the way, so others don’t have to. Rob, the newly-promoted President of Christina Lake Cannabis, talks about his steep industry learning curve and his gratitude for the Christina Lake team.
[7:23] Coming out of the agricultural commodities industry, Rob shares his observations about the commoditization of cannabis: consolidation, indoor vs outdoor growth, and pricing strategy – what parallels can be drawn?
[9:04] Outdoor growing comes with its own challenges (one turn per year, variable conditions), but for Rob, it’s “agriculture at its best.” Location scouting, high-tech irrigation and fertilizer systems, and some prayers and rain dances help along the way. With 18 acres growing 25,000 – 27,000 pots, a lot of monitoring is needed by drones and humans alike.
[14:13] How do you know what the consumer wants a year in advance? Rob talks about CLC’s learnings as they extract the 8 major strains planted last year. Talking to buyers, customers, potential customers, the current marketplace in Canada seems to want THC and THC only, above 90. “The CoA is the license to play” which is why extraction and post-processing are so important.
[16:03] Trading a commodity, or trading a brand and reputation? Both ways work, but both have a lot of risk attached to them. For Rob, the best strategy is to first get product out into the market and working, and then rely on “sun-grown, BC bud” branding.
[17:32] Coming from an agricultural sector highly regulated by the Canadian Food Inspection Agency, Rob was used to dealing with labs and government officials, but not to the extent that Health Canada wants to go to with cannabis. Rob points out some inconsistencies: a salesperson can transport 50 kg of oil to a customer in their trunk, but only 7.5 g of product to the lab to get tested.
[18:54] Financing in the cannabis space is tough. Rob’s advice is to attract “good partners, good investors, people who believe in the business.” Rob believes that a breakthrough catalyst for further funding will be US legalization, permitting US banks to become involved in the industry.
[20:25] Christina Lake has been the first test facility for Vitalis’ Cosolvent Injection System (Vitalis CIS). For CLC, it has been a “game changer,” allowing for a 160% increase in processing volume per day and growing, and a much more realistic extraction schedule. The Vitalis CIS has also pushed optimization down the line, in winterization.
[23:20] The strain of changing strains. Intensive rules and regulations require the entire line to be cleaned between strains. CLC’s solution was to move distillation into a separate room, to allow a different strain to be distilled than is being winterized.
[24:00] Staying focused. “You can’t do everything all at the same time.” When CLC was “all over the map,” Rob made the move to make winterized oil and distillate only, with everything else in a parking lot.
[25:45] Vitalis’ cosolvent injection system gives Christina Lake the opportunity to sell their own “basket of goods” but also purchase hemp and other cannabis material to process, or form joint ventures to put more volume through their plant. Rob also elaborates on the benefits he’s seen from the system in reducing waxes, other plant oils, and inconsistencies.
[28:12] Rob harkens back to his hockey days and talks about forming a comprehensive, committed team at CLC. It’s hard to describe “a day in the life” at the company, because no two are alike. There’s always new equipment, new processes, and new challenges, like harvesting, securing a sales license, optimizing equipment, or deciding to make kief.
[31:22] Where does Rob see the cannabis industry going? Right now, he feels we’re just at the “tip of the iceberg.” Rob talks about strategy (selling molecules vs selling product) and new ideas (using new tech to unlock new products from biomass).
[33:15] COVID challenges. Being restricted to Zoom has prevented the lunch meetings and site visits that can build relationships. Rob believes that CLC’s “go to guy” is out there - but they haven’t met them yet. Rob also discusses what it’s been like starting a new operation during a global pandemic.
[35:58] Rob talks about Christina Lake’s customer experience working with Rob Murray, Vitalis’ account manager. With Vitalis three hours away from CLC’s facility, it was a match that needed to be made. Rob
[37:00] What does the future hold? Expanding to new acres, growing for other people, introducing new harvesting technology, in-field flash freezing – they sky’s the limit for future growing years. From a selling standpoint, Rob shares his hope to find international markets in the future.
[39:30] GMP is important, particularly for the EU market. Rob walks through his history with the EU regulatory environment and the implications for this and other markets as it evolves. Early legalization, like in several US states was quick and reactive. Future expansion will be more controlled, with a more commodity-type business model. Will brands have to be big to be viable? For Rob, the US presents a bigger opportunity for Canadian players.
[45:37] Biggest piece of advice to sector newcomers? Cost of production is key. Rob shares his belief that the industry is going to evolve to where the indoor producers will struggle due to cost of production, especially on the liquid side. Post-processing and extraction costs also have to be considered; extraction equipment is often considered from a capital expenditure standpoint, and not in the context of ongoing operating expenses. It all goes into every gram manufactured.
[48:18] “2020 is always wonderful hindsight.” With a magic wand, Rob would go back and spec out the best equipment available, and match it up with each room in the CLC production process. Despite the slightly winding road to get here, Rob is excited about CLC’s position now - every week the sweet spot gets closer and closer.
[49:45] Turning the tables, Rob asks Jason and James some questions, first being: what Vitalis production solutions are coming in the future (and is the market ready for it)? Rob teases an exciting nanofiltration project, and the trio talk about the hours, changes, and modifications that go into product development.
[55:36] Rob once again sings the praises of CLC’s Vitalis cosolvent equipment – which, despite the proliferation of nicknames at Christina Lake, doesn’t yet have a nickname.
This episode was filmed in March of 2021.
Hosted by Vitalis, we bring you wise, humorous, and sometimes shocking conversations with entrepreneurs and extraction industry innovators on 'The Extraction Insiders'.