Podcast Episode: Whole-Plant, Whole Business: Papa & Barkley’s Recipe for Cannabis Success

Welcome back to Seed to CEO. I’d like to welcome Guy Rocourt to the show. Guy, thanks for joining us. How are you doing on this Monday morning when we’re recording?

Awesome. You know another great day in cannabis.

They’re all great, aren’t they? Yeah, they are, and challenging. We met in person for the first time at a mainstream packaging conference maybe six or eight weeks ago. You’re on the speaking circuit a lot, aren’t you?

Yeah, you know, thought leadership has always been one of my things. I started doing advocacy, whether it was with NCAA, or ASA, or MPP years ago. It’s one thing to profit off cannabis, that’s part of it. But changing and growing the industry and righting some of the misconceptions and outright wrongs that were committed during this prohibition period are very important to me. And so yeah, just even thank you for this opportunity to share more thought leadership and just my perspectives on cannabis. You know, it’s just an honor to be able to do that.

Well, you’ve helped build a very successful company with a well known name even though right now you’re only in California. Why don’t you tell listeners a little bit about Papa and Barkley?

Sure. The Papa and Barkley family of products is a California-based wellness suite. And we have an expanded view of wellness — and by that I mean cannabis is wellness. That’s how we started that’s where it should be going.

I don’t try to say we don’t try to differentiate medical versus recreational; we believe that cannabis is something special unto itself. We create under Papa and Barkley wellness products like topicals, capsules, tinctures, pain relief patches, massage oil and functional edibles for like sleep and focus.

Under our select line, Papa Select, we have award winning concentrates that are used for low temperature vaporization. And then our what we kind of call our lifestyle brand, PNB Kitchen or gourmet edibles, gummies and chocolates. And of course, all the products we create have no chemicals, no artificial flavors, and all our cannabis is extracted solventlessly through either mechanical separation, or washing with ice water. That’s it.

And we’re gonna get into that and how you built the company around that philosophy and extraction and product development. Tell us how many dispensaries are you in in California?

We are in about 85% of the dispensaries. So some 600 dispensaries, and I’d love to be in all of them. But we currently self distribute. And it just wasn’t worth the squeeze for some of the smaller dispensaries but we’re getting there. And frankly, some of the dispensaries were starting to curate. And we’re just like, we’re not going to put our premium product in that dispensary.

That’s a pretty good milestone to hit. So tell us how you got into this business. You know, how do you go from, you know, being in the Navy, to eventually you know, helping start a cannabis infused products company?

Yeah, you know, so I was in the service. I was in the Navy. And when I graduated years and years and years ago, the Soviet Union collapsed and of course with what’s going on in the world. Now, I did not see that coming in. I literally thought like most people in a liberal arts college peace on earth, like, honestly, we were taught in the 80s that we were in this Cold War. And when it ended, I thought all wars were gonna end because I believed in progress that we were all seeing. And it’s very sad right now to see some of that stuff being retarded.

That being said, when I graduated, college, I had switched to film from physics. So I was gonna go back as a new power officer didn’t think that was a career ended up switching to filmmaking. Got to New York, right in the time of low budget filmmaking was super exciting and perfect timing again.

And at one point in my career right after I joined the DGA, Directors Guild of America, I ran into a gentleman, Montel Williams, who had a talk show host now I didn’t know too much about his talk show hosts his talk show, but I did come to find out that he was in the Navy. He was on submarines, like I was on submarines. And it was like, Oh, here’s another, you know, gentleman of color that like has been successful also came up through my track, got himself out of like, where he grew up in Baltimore by going to the military, so I was like, Oh, I’ll definitely work with this guy. Needless to say that started a fast friendship, both on the moviemaking side, but of course Montel came out with his MS during that production. And all of a sudden we started advocating for cannabis and how cannabis affects autoimmune diseases, MS being one of them cancer, of course, being the big one, lupus, Crohn’s others, so really started doing a deep dive into cannabis and how it helps people.

Montel helped me get my first job out here in California with Paramount at the time that they were doing all that vertical integration, and even then that seemed right, that media would be owned by a handful of companies or seemed wrong. They kind of felt it. And so as I started my small house, Be Grow; two lights became four lights became six lights.

And I was like, you know what, maybe this there’s a career here, I kept thinking that we were going to regulate and do all the things that are happening now 23 years ago, almost at this point.

And so yeah, that’s how I got into the business start started cultivating and before you know it, cultivation gave way to advocacy, because I had to make a choice. Can I go out and do thought leadership like I’m doing now? Or can I actually provide medicine, so for a time, I provided actual medicine. And now I’m glad to be able to provide medicine and thought leadership without fear of, you know, police incarceration or something like that?

Well, I was laughing at your, you know, 23 years ago, you thought we’d kind of be where we are today. Cannabis industry is always surprising. You know, in some cases, things move way faster than anyone would expect. And in other cases, especially in California, and on the federal level. So you met Montel — key connection there. As areally quick sidenote, I was speaking at a conference a couple of years ago somewhere and Montel was on my panel, but the guy doing the introductions was older. And he didn’t really know much about the cannabis industry. I don’t know where what his background was. But he introduced me as Montel.

So you went out to California, and you started hobby growing? And then how did that and you had some decisions to make about where you want it to go? So what were the steps you took next?

I had a growing partners, a gentleman named Alex. Alex had Crohn’s Disease. And you know, again, another deep insight– I never had an aspiration to be a doctor. But I do realize there is this thing that you get when you help people, right, when you help people especially come out of pain, specifically, when they thank you, it’s almost like the words resonate and hit harder, and being able to help people that were suffering from pain and provide this, what at the time, and even now, I guess we call alternative medicine, but we all know it to be tox free side effect free and very effective, especially when it comes to inflammation and pain management. So when I, you know, I was still bicoastal working for Paramount.

And Alex was, you know, back in the day, not everybody wanted to get a script. So he didn’t want to get a script, I was like, I’ll get a script. I started to go in dispensaries providing him with some medicine. When I traveled, I said, Hey, watch my grow. You know, and we started learning together, you know, T used to work for Time magazine was, you know, Harvard educated electrical engineer, but because of Crohn’s disease, it took him out of his career path. And that resonated with me. And he and I then started a new career path. And at one point, it was like, You know what, let’s go ahead and like, see how much we can do. And, you know, at that time, there was a whole no doc loan thing. And, you know, because of my science background, I became obsessed with indoor environmental controls, and of course, my submarine background, keeping it stealth, keeping all the air in the house, so that, you know, quiet was kept the way we used to have to do it. Yeah, just started to grow in house lights become houses. And before you know what you’re providing safe access. And yeah, while you know, I didn’t intend to be an outlaw, it kind of happened that way. But I’ve always believed deeply in cannabis, I’ve always kind of also tried to do it the best to the best of my ability to to that end, I’ve never had knock on wood, an altercation with law enforcement, because I, you know, it’s not this has not been about money, this has always been about safe access, you know. So that’s how I kind of grew into it.

That and that runs through what you’re saying so far. And I was gonna bring that up that, you know, a lot of people in the early days of the industry on the medical side, not everyone, of course, and, you know, they were they were more into it for the money, or, or just or just the plant today, they used it themselves and said, Hey, now I can find a career kind of growing or selling cannabis. But there weren’t a lot with medical or science backgrounds at all, that were truly truly focused on the healthcare side, especially in states that didn’t have many regulations when they started. So I admire that that’s been your approach from the start. And so, you you guys had kind of you were just progressively growing what you were doing in this in this industry, and then that did that bring you to Denver?

Yeah. So at one point, you know, we’re just literally nerding out and we were blessed with the Internet. I don’t know that. You know, again, it’s all about timing. And so once I start growing, the internet incident is an it’s an infancy and we’re looking at forums we’re looking at boards like gray wolf and everybody sharing knowledge and that’s how I learned how to do a lot of the things from rewire house to build an AC.

I love hiring people now I love hiring workmen and paying them because I remember very clearly not being able to hire outside workmen and having to learn it myself. And there’s some things that you just don’t want to do yourself because they’re scary. And so at one point when we saw the first e cigs, were like, oh, cannabis needs to be in that. I think that was everybody. I mean, most of my friends’ thoughts. And so we endeavored to figure it out.

We started making a light hydrocarbon extra extract mixed with propylene glycol, like typical e cigs of the day, using the light hydrocarbon extract as the vegetable glycerin component of the e cig formula. And all of a sudden, it just takes off. And you know, by then I had, you know, I’m originally from New York, I had some contacts. And so and I still had all my contacts in the film industry. So I didn’t usually send packs of cannabis to the east coast, but I was like, Oh, I can send you 25, 50, 100 cartridges, no problem. Nobody knows what that is. Sure enough, that got in the hands of these Wall Street guys who I feel like never slept before until they got this cannabis pen. And that’s another indication when you help people get a good night’s sleep. They are very, very thankful.. So needless to say, people started trying to throw money at us.

And of course, I was a little bit not disappointed with Canada, with California. But Proposition 19 had just failed. And it wasn’t exactly right, anyway. And yeah, California just seemed like we were on a good course with our dispensaries. And there just wasn’t much to do. And the political infighting was just above my head. And these gentlemen were like, well, what do you know about Colorado? I was like, well, other than then units moving through there? Not much. He’s like, Well, you know, they’re definitely gonna go adult use and you know, we have an opportunity at this asset, would you be interested, and they didn’t even come out to see my houses or whatnot. But they flew me out there. And, you know, I found this space that used to be a bakery in a strip mall. And they were like, could you make your vape pens here, I was like, well, I don’t know about the regulations. But we have to build what will end up being a class one div, one lab, in the strip mall to make these pens. And we started checking with the fire department, we purchased a permit, what they call the distressed asset, something now lesson learned, I would never do that I would never, if I had known then that what I was doing was pushing out a legacy operator for my own game, I probably would not have done that. I didn’t see it like that at the time. But I understand that now. And those are some of my regrets.

But in any case, we did do that I did build the lab, we did successfully deploy. And back in 2012, it was just us a company called NEOs and open with Ralph Morgan. And I learned the hard lessons of marketing and packaging and how important they are, even if you have a quality product. And that was the beginning of my compliant cannabis career.

So you learned all everything about you know, basically, you know, extraction and everything around that just through, as you said, kind of online tutorials and figuring it out on your own.

Yeah, web education is king, you know, a guy got a shout out Gray Wolf and skunkworks. Because if it wasn’t for their online forums, I don’t think extraction would not be where it is. But they started telling us how to do light hydrocarbon extraction safely. And I do want to underscore that that while some people have gotten into trouble, similar to prohibition, in general, restrict, like, poor lack of regulations allow bad actors to act badly proper regulations allow signs to allow people to conducting safely. That being said, luckily, my partner and I were good scientists, and we figured out how to make these extracts in a safe manner. early on. But yeah, it was a really interesting time back then. And if it wasn’t for people constantly sharing how to make extracts. Yeah, I wouldn’t have learned but Bubble Hash. So both solventless and light hydrocarbon were easily done by us in a rudimentary form early on, and all that was through sharing of knowledge, which has kind of stopped, you know, in the industry, but I wish it would come back because I don’t fear people doing indoor grows, even as a manufacturer.

Now I don’t fear people making their own products, you can buy your own tomatoes doesn’t mean that people make their own tomato, grow their own tomatoes, or make their own ketchup. You know, it’s like, it’s just not a fact that people are always going to just grow their own if they can. So I’m just a big believer in sharing knowledge and not restricting it.

Yeah, and I think it has tightened up a bit in the industry, for sure. I think there was a better kind of community feel in the past. It’s still there in this industry compared to others. But it’s changed in recent years, I’ve noticed as well. So you, you were learning all these skills. You mentioned marketing and branding. What’s the lesson that you learned kind of through the school of hard knocks at that time?

You know, at the time, I won’t mention any names, but certain folks on the co2 side were trumping up this notion that they were solventless even though especially early co2 apparatus had to be refined in alcohol. I found that irritating because I tried to be a person of integrity. And more importantly, those early co2 pens just tasted like carbonic acid and just weren’t not particularly good. And while light hydrocarbon pens are true, it can be dangerous to produce in the hands of a skilled operator come back with zero solvents and often have a much tastier terpene profile. So here it is, I’m putting out what I believe is a better product. But of course, with these first VC folks, we hired no marketing people. We had no marketing department and I’m soldiering into this company with no awareness that how important a marketing company is or marketing department is, and I’m going up against not necessarily cannabis people, but expert marketers. So open is meeting us at beating us at every turn, whether it’s whether you’re like Scooby Doo, Van activations are awesome color packaging that look kind of like the Leafly colorblock. And I just, it just was a hard lesson because I literally designed the packaging it Neos, and it wasn’t it was enough in the beginning, because it was kind of like a vacuum, we were just selling these pens into a vacuum. But as soon as the branding competition started to get hard, and we needed to start marketing and activating, that’s when I started to realize, Oh, my partners were just about a quick buck. Because of course, when it came to marketing, I want it to be like, Oh, kind of like with Papa and Barkley, I want to say things with integrity. I want it to be truthful. That’s what started me on the thought leadership.

So you know, shout out to Ricardo at the Denver Post, he has his own thing that I forget, record his last name. But he even when he was working for the Denver Post, he had me on, we had the, you know, direct conversation about Lytro, light hydrocarbon v co2. And I started to realize how important it was to share accurate cannabis science. So the consumer would not just be fooled by packaging. But at the same time, I started to understand that you have to meet the consumer where they are because the masses don’t respond to education like the individual. So you can educate a person. But educating a group is a far different task. And it has nothing to do with them being smart or not smart, is it the group dynamic is real. And I started to learn those lessons. Pretty difficult lesson. So when I started Papa and Barklay, the first thing we did was get a marketing person and their feel of all our marketing directors, we’ve had a few are all additive and still felt in the brand today.

That’s a great lesson. I think the sophistication in branding and marketing changed very quickly. To your point, when you first started, you could kind of do it without much background in it. And you know, everything was kind of new for the consumer. And there wasn’t a lot of sophistication. But that did change and it became very competitive. And you needed those skill sets. Did you not go that route early on? Because you just thought you could do it? Or was it more of a funding issue? And you said we don’t want to allocate dollars to that?

Yeah, so it wasn’t exactly a funding issue, which is interesting. It was literally the gentleman I were I was working with were not operators, they were investor class and I didn’t learn that lesson right then in there. But I know it now investors, although they can be rich are not necessarily operators and operating a business is a much different skill set. Money is needed to make businesses but operators are needed to operate. So although we had the money I and my operational skills just didn’t value marketing enough because I had been coming from a place where product knowledge is King — bag appeal of your flowers, how they look is how you sold them. At most, the most branding we did was an SC lab stickers, shout out SC labs for holding us down forever. But you know, 10, 15 years ago, all you needed to do is print out your SC lab sticker and put it on your edible or put it on your batch of vape carts so that people would at least know that there was some testing because the cannabis industry has been self-regulating well before these compliant things. But yeah, it was it was definitely it wasn’t it was just ignorant, I think and the investor guys, when it came down to start to I thought of marketing more like advocacy more like truth saying because I was frustrated and I was definitely narcissistically injured, that people weren’t recognizing the product I was creating as quality over the competition. So just a ignorance, I think not necessarily funding, but I’m glad I learned that lesson.

Yeah, you learned too early. And so the talk about what led to Papa and Barkley, then.

Yeah, so in my frustration, and you know, unfortunately, some of the things are still happening. And I should let the listeners know, even this past 420, the city of Denver, I should say the MVD not the city of Denver specifically, the MVD is still causing shenanigans, as if to hold the industry back. So if you were to be 10 years ago, the folks at Denver could go around the statehouse and smoke openly and enjoy their high crimes festivals. And then all of a sudden, the first years of compliance, they’re trying to roll that back. They’re not even they’re closing every loophole for us to even enter products in the contest. And even this year, they’re still doing those same shenanigans and it’s like, Wait, we’re going backwards. Even though every stat has shown cannabis to be a positive force in the state. What’s happening there, you know, it was kind of crazy. And so, for me, I was a little frustrated with those with those gentlemen because they were not willing to back me on the thought leadership and actually thought I was being a little too aggressive. have been too vocal and I was like, I can’t stand.

And at the same time I meet my partner Adam Grossman through a through our friend Sparky Wilson rose, who’s also another OG in the cannabis game. And so Sparky is like, Oh, you gotta beat my buddy Adam, blah, blah. So I meet Adam. He shares with me his story of soaking these inhalable grade flowers and coconut oil, putting it on his dad’s back, and how his dad responded.

So of course, I get into that, we started, he started, I started checking the product and you know, start checking the potency and realizing, wow, compared to the few topicals that are in the market, this is way stronger. It’s made with inhalable grade flowers, not the extract. And we start to have that aha moment about whole plant the greenness, the chlorophyll, all the other parts of the magical plant. And luckily, I start to turn my head from solventless from solvent based and like wanting to over refine, and I, I understand why people went down the rabbit hole to distill it, we were denied toys. I mean, I remember calling hydel, dwarf America and other places that now come to MJBizCon to try to sell us all these goods under the guise of they’re new for cannabis. But we’ve been fraction oil forever. Those folks would tell us, we can’t sell you goods.

Even when we had a license in Colorado, it was hard to get some refining equipment because of insurance or hard to get clean butane gas because well, we’re not sure if we can deal with your industry. And now of course, some years later, everybody’s trying to sell to our industry. But in any case, I’m blessed to have met Adam because I was going down that road of overall refining cannabis and wanting to play with the new toys. And all of a sudden I had this aha moment. Like, wait a minute. That’s not what got us here. What got us here is plant-based medicine. What got us here is what I was growing in grandma’s garage, and making in grandma’s kitchen. And maybe we should just start there. And that’s how Papa and Barkley started in terms of the core philosophies around being 100% solventless 100%. Clean, and if dispensary is going to be called dispensaries. That means to me they should only be having wellness like products that might be dispensed. And so those started to be the core values of Papa and Barkley.

More importantly, Adam, and I’d love to say this, my original friends and family round, we have about 50 to 60 friends and family that contributed money early on before licensing. So this is early, late 2015, early 2016. We’re putting Papa and Barkley together, back then you can remember Chris, everybody was like, Oh, my friend has a license here and has a license there. And I remember telling our investors, there are no licenses in California, maybe local authorities authorization. And that’s only in Berkeley everywhere else it’s not true. Even with that we were able to raise this money because every single one of our original investment group, really believed in cannabis and and the benefits of it. So of course we start the company, we get that initial investment and the vote does go our way. Clearly.

How much did you raise?

We raised six and a half million friends and family. I didn’t know that much about investing because with my first company, they kind of found the money and I just started to deploy it. With this I was actually involved in the financial raises. And, you know, kudos to Scott Gordon, and Adam Grossman and Ellie for you know, really opening my eyes to FinTech because that was the next lesson I knew about the marketing, I had already been burned by that. What I didn’t understand is how FinTech works, how financing is put together, how money is raised, what’s the difference between a friends and family round, a series A’s round, a family office, a fund all those kinds of terms start to come into my world. And yeah, so first, we raised that friends and family, we eventually then do our Series A round eventually get some institutional investors.

Papa and Barkley is one of these companies has taken that Wall Street money, I have been blessed to be empowered by my co founders to be right in the middle and tow that line of like legacy and integrity operation, while using typical Wall Street money, it hasn’t really gone that way for everybody else.

And again, you learned you learned early, the difference between kind of a passive investor that doesn’t really understand the industry or really have a stake in it, aside from the financial investment that they just made, versus, you know, the second initiative where it was friends and family, and as you said, everyone in it, believed in cannabis and believed in what you were doing. Not just from, like, the investing side. So I love that you highlighted that. And then also that this pendulum swing of kind of over refining, you know, going in that direction, saying, Wait, let’s get back to the roots of this and build a business around that. So you you left Denver? When was this? 2015?

Yeah, 2015. You know it, it started to like kind of I started just getting more and more frustrated because I wanted them to do more and more around advocacy. And at that point around marketing, but they were kind of satisfied. And the good news is the company still exists today, it switched to solventless. It’s run by Nate Wilson, he’s actually coming to California with his brand, which they’ve changed the name to Votto, and still have a small percentage equity stake in it. But I’m glad to see that Nate has been able to get the investors to just quiet down, do some marketing himself and kind of grow that small brand into something that’s now going to try to do its thing in California.

So yeah, that’s funny. You were like, kind of shoving marketing and importance of it to the side. And then it got to the point where you were such an evangelist for it, you wanted them to go even further?

Exactly. Yep.

So talk about the early days of Papa and Barkley. You raised the money and, you know, how did you navigate through the California environment, especially upon launch and crazy market, and I want that thread to run through the rest of our discussion, because it’s very difficult to be successful in California. And a lot of people on the outside, you know, biggest market by far. They see immense opportunities, but the situation there is pretty ugly. And it’s it’s very hard to be successful there long term. So, in those days, when you were starting it, talk about some of the key moves that you made to establish your brand and get out in front of consumers.

Yeah, so luckily for myself, and the organization, I had a deep root in California, especially in SoCal, where the majority of businesses made I was in you know, I had several dispensary contacts. I had been moving cannabis through these dispensaries for a while. So I was already a known quantity. I had already spoken and started to get myself out there for thought leadership. So with that kind of platform, when I first met Adam, one of the first things he was like, well, let’s go ahead, let’s raise the money and whatnot and figure out how to deploy it. I was like, I can’t do that. That’s not how we operate here in California. It’s like, if you want to make a product and you want to get in dispensaries, that’s fine. And at the time, I knew nothing of like FinTech and typical corporate structure, I was just very much in that OG world, right. I think my Denver company was not as formal and not as well set up as what we did here in Papa and Barkley.

So, to that end, I just said to Adam, hey, look, I have this grow house that, you know, I still have some plants downstairs, I have a lab. If you want to do this, let’s do it. So we did some preliminary preliminary testing. My first thought was to put a regular extract in; it did not work as well. We did some testing. It’s like night and day. So then I started to see the lipid infusion process, which is soaking the flowers and oil, straining off that biomass testing it and whatnot. I started we started to figure out how to scale that process. And this is still in our grow house in Los Angeles. And we start to make the first bomb. I immediately want to sell that into dispensary. So early in 2016, we have our first sales folks. And again, it’s a very traditional market – like, I didn’t even want the salesperson to know where my house was because that’s how I always operated the less people know where your grow houses are the better you off. So we’re meeting our salespeople, like in Starbucks, and they’re going out and they’re starting to sell products, one of our sales folks, their dad’s retired, we’re like, oh, can he does he want to work as a driver? So he’s got this Prius; I’m loading up with boxes of bomb and he’s now going to dispensaries and this is still under 215 and selling bomb so that first-mover advantage.

I can’t deny that it helped us; a lot of it is because we were here first and we grew with the market and some people credit Papa and Barkley specifically for growing that quote unquote wellness sector. Those value added products that weren’t really in the traditional market –capsules, pain relief patches, tinctures were pretty prevalent, but accurate consistent tinctures. Right whole plant tinctures as opposed to like and of course, they outlawed alcohol, which is the traditional way of making tincture. So we were already doing lipid infusions. So we had a good chance to take our big market share in in the tincture market and we took a big share in the topical market immediately.

We were getting all this good money from New York and had a good investor base. We set up a scientific advisory board that had the likes of Oren Divinsky on it. So I had like key information from like somebody that wrote the book on childhood epilepsy and knows everything about autoimmune diseases. On my branding side. I had folks like Barry Harlem, from you know, CVS fame. I had the co-founders of Bobbi Brown cosmetics, you know, we had Gary Furman on our board, so a lot of deep CPG knowledge and yet we were told to go narrow and deep stake our claim and be known for something and make the brand and then expand and that’s the model we followed. We went narrow and deep and we were known as a quality wellness brand for this topical, winning awards and dominating and getting market share there.

And then we just started to branch out. And a lot of folks are like, Oh, why don’t you go multistate? Well, first I wanted to touch all sectors. I look at Papa and Barkley or the PNB Family of Brands, kind of like Nike. Nike is all athletics. It’s not just soccer, or baseball or football or wear or athletic gear, it’s all of it. And for us Papa and Barkley is the same thing. It’s premium quality cannabis products across all sectors. And now we’ve achieved that and we are ready to go multistate.

Yeah, that’s a different approach than obviously a lot of companies have taken in recent years, the kind of MSO model, a lot of brands are doing that as well, on the infused product side. And so it’s interesting that you did choose the narrow and deep. I mean, California has like, you know, 10 different markets itself, right. Just to figure it all out. Every region has different different regulations. So even cracking that code for California is a big chore. So as you were building this, you know, over the years, you were really leaning into kind of the solventless, whole plant infusion process, and also using sungrown cannabis. You talked about the marketing side and education? What did it take to get over that hurdle and that hump with the consumer with the patient – to, I guess, get them to realize the benefits of this. You mentioned you were frustrated in the past, that this was a key component that was difficult, you know, when you were in Denver to get the consumer base to understand it. So how did that evolve over time? How did you get people to, to really back this and understand it, and then prefer it over the other options?

Well, it’s definitely been a campaign of several battles. And I think we’re only now starting to come to the other side of it. And so I definitely want to thank any of my investors and board members, I know they listen to your show, for sticking with us. But it’s only now starting to pay off Chris. And a lot of the money that we raised, went to thought leadership and education, I think through 2018, through the pandemic, we had what can only be called as a small army of dedicated full time brand ambassadors. So when I say full time, we’re the kind of company that matches 401 K, and gives everybody health benefits. So those of you who are in business understand what kind of cost that is to have 40 to 60 people on constant payroll, and all they do is go to dispensaries and parent your truth.

So we spent a bunch of marketing dollars constantly being a pillar of cannabis. And always putting people in stores educating around solventless educating around cannabis can taste good. Cannabis can smell good, because all our products smell and taste of cannabis. But they also smell good and taste good. And those two are real things that can be true. And so yeah, we just spent a lot of money educating and it took a while because folks didn’t even understand what solventless was. They didn’t understand what the value proposition was. Every single thing in a dispensary is premium. With all these new brands and CPG money pouring in. Everything says premium. There’s so much noise in dispensaries, and we had a hard time cutting through that clutter. Now of course, we find people are starting to understand the term solventless. And of course, I knew it was the right thing to do. Because when you think about everything else in the world is already going to less refinement and more natural consumers in general. And Nevermind the younger generations already keyed towards understanding that they want things more natural, less refined, they’re already thinking about things like sustainability. That’s where Sungrown really comes in. Because when we say Sungrown, and when we say solventless, it proposes two things. One Sungrown means that the the actual farmer is not using a huge carbon footprint of electricity. solventless means that same farmers not using any pesticides, or anything on their land, because it would show up if you only use ice water and have no opportunity to refine solventless also suggest that in an industry that’s going to be as big as tobacco, or Pharma.

 

What kind of contribution of extra butane and alcohol would we be doing if most of the industry goes that way? Right. So all these kind of intertwined lessons are now starting to be seen and understood by the computer, the consumer. And it’s not even the consumer, it’s the revolving door of these bud tenders that are the primary force of education. And for a while they were just about milligrams of THC, a lot of them are younger, and still in that scarcity mindset of not understanding that we have tons of cannabis and now start to look for other things besides potency. Because you don’t walk into a bar and say give me moonshine, you understand the levels of quality of craftsmanship. That’s only starting to come to cannabis now, and we’re only starting to benefit benefit from it.

What are the challenges in this approach in solventless?. You know, I think I think a lot of people would see the benefits, but obviously there’s still a decent amount of companies that haven’t gone in that direction. So what would you say? Is it is it additional costs, different skill sets that you need to bring on? What are those hurdles?

You know, it’s so funny. It’s not It’s neither, right? It’s neither. I think that what happened in the beginning is folks didn’t realize that we’ve all been programmed for 100 years with cannabis shame. And in their bias, they were most people were unable, including myself early on, unable to separate this notion of high extraction rates from the abundance that was coming. We were so most of us were so in a scarcity mindset, you know, that had been working in the industry that all we wanted was 20%, extraction rates from light hydrocarbon newbies, were coming in and wanting some kind of IP, some kind of barrier of entry, some kind of expensive apparatus that would make their business have a leg up. Well, in solvent list, you don’t need expensive equipment, what you do need is an abundance of the cannabis input.

But for us, it was never a challenge, because one of the tenants that we raised money on is we were going to create products with the best cannabis science. And the more people knew about cannabis, the more likely they would come to find our products, we always raise money on this as a long term deal, we are in it for the marathon, we’re trying to be we even in 2016, we’re looking 1020 years out when this industry is mature. And we are a cornerstone of it never having broken our integrity, because you can always make more money, you cannot reclaim your integrity once you’ve stepped back from it. So making clean quality canvas products was just always going to be the thing. And we were going to hold that line and have been holding that line until the market caught up with us.

That being said it that part was a little bit challenging, for sure. Waiting and only now starting to have people really see our actual value. We got a lot of respect for being first movers for supporting the industry, you know, for our thought leadership, but revenue wise and consumers wanting to look for our products, that’s really only starting to take fire. Now, that took some time to get there. And as the industry, the consumer base matures, you’re finding this acceptance and understanding what you’re trying to do.

So let’s talk about the product development side. You were Chief Product Officer before taking the reins of CEO earlier this year. Give us some insights into how you approach product development how you figure out what what the patient consumer base needs and and how you build products around them.

Yeah, so like I said earlier, I always wanted to create products that were like I remember that commercial when I was a kid on educated consumers our best customer I think it was like members only or something like that. But like that’s how I want it to be. It’s like the more educated you get on cannabis, which people are the closer you’ll find me the more you’ll find our products. I also wanted to make sure that we created products that had a cultural heritage and, and legacy that was steeped in where we’ve come from where I’ve come from. I also know now from CPG that like people really buy into those brand stories. And that’s how you get the crazy margins. People are willing to pay more when they’re educated and understand your craft and your story. Right. So for Papa and Barkley, it was super important for all those like guardrails, but as a product maker, I like guardrails as a creative person. I like you to put some parameters on it and let me work creatively in that. So between the compliance parameters, and our solventless guardrails or our tox, free formulation guardrails, all of a sudden I’m like in this lane of products that are going to be pristine, so very easy to do the capsules and tinctures, the pain relief patches and the topicals.

When we do our first set of edibles, of course, I tried to stay on brand. So we create the first sugar free edible, which right now is still on the market, but because of supply chain issues with allulose I may have to suspend that for a little bit. But that was our first product, right? It’s like again, if dispensaries are going to be dispensaries? Why do all these gummies have high fructose corn syrup, artificial flavors artificial dyes. So I want to bring to market something that was sugar free clean in its extraction methodology cleaning all the excipients that were in the product and that was our first edible offering, of course on on on our ice water hash product. Again, that was a no brainer.

You know, I the only thing I wish that we could do now is bring some of the more ancient Moroccan hashes back kind of like Frenchy – rest in peace-, but the market is so hell bent on fresh frozen right now that I’ll have to wait before I put that SKU out. But as a product formulator pretty much I want to create products that are premium cannabis products. And it occurred to me in in in wrestling with my marketing colleagues, where they would say things like, well, you need to meet the consumer where they are and you know, you don’t understand CPG and at one point I realized, hmm, I will meet the consumer where they are but the only people that should do that are those of us who are qualified to know where we’re going, because we’re not there yet.

So a lot of these new folks that I was seeing coming in from CPG. Again, weren’t doing the work to deprogram You’re going to cannabis shame and thinking, oh, let’s drop anchor here. And this is where the industry is going to be at. That’s, that’s not accurate. And then another thing I realized, that I reflected to them is, I don’t want to be CPG. CPG is for Walmart and Target. I’m trying to be Fifth Avenue. Where’s that premium shelf of awesome cannabis that? Yeah, I understand Bud Light is the most popularly selling beer. But that doesn’t mean on a special occasion, weddings, birthday holidays, that you don’t go out and get a nice craft bottle of beer. That’s where I’d like to play.

And it’s about being the biggest largest, you know, whatever superlative you want to use. So that’s, that’s an interesting play. And I totally understand how you got there. I’m wondering, how have you navigated those through some of the challenges in California? I think, you know, they had those big packaging changes a couple years ago, that affected a lot of a lot of companies in in your area. Can you give us a real world example of, because I think that’s important for people to know, getting into this as, as you mentioned earlier, even in Colorado, you know, years down the road, there’s still regulatory changes that don’t seem to make sense, or that kind of roll the industry back, it seems like in some ways, so what have you done to to navigate that in California?

Lots of hard work. So again, shout out to my financers because, you know, money makes the dream work. So we’ve had to, yeah, there’s been a lot of regulatory changes. And we’ve been blessed to be able to just do what we needed to do. So for instance, in the time you were talking about when the regulations change, at one point, we had to recall all our products and put them in exit bags because everything had to be in recyclable childproof. At the same time, we deployed over $100,000 to create some childproof packaging for our bomb, and then all of a sudden the regulations changed. And it only needs to be single use childproof, which meant just like a thick shrink wrap on there that had to be taken off with scissors when you bought the product, not a recyclable top, that I already spent a bunch of money, excuse me designing.

So yeah, package, gate, sticker gate, those things were very difficult. But to the business folks out there, the real reason that we navigated it was other good basic business, blocking and tackling systems can’t be understated in a business, so because we had decent ERP and MRP systems, and we’re tracking everything, and even without metric parallel to metric because as most people know, metric is not a good ERP system, you need to have some other parallel way of managing all your other inventory. We also knew where all our products were, we knew how many of them were there. We had, you know, early on started manufacturing. So kudos to the people here in Eureka, because we got our first facility even before the vote in 2016. So we were in a facility, we were already looking at things like GMP s where you had hands working. So whenever there needed to be things stickered things needed to be remediated, we could just throw bodies at it, shout out to Darkstar staffing, because without that ability to get Timpson that were already vetted, and you know, bonded, because back then everybody had to be like, fingerprinted and whatnot, every single employee, but we were able to get bodies in to sticker and remediate products every time things change. And, you know, I think most business people know this stay on shelf by any means necessary. Because if you go off shelf, somebody will take your spot. And so during those packaging changes, we were hyper focused on that. And basically use whatever resources at our disposal to either take back products that weren’t compliant and make them compliant or re sticker current inventory before deploying.

And then also you I just want to make sure we highlight this, we’re almost out of time here. But you also sourced a lot of your flour from smaller growers in Humboldt. Is that right?

Oh, yeah. So up until recently, exclusively, and the reason for that, again, is like, look, Chris, I think, you know, most people know the right thing to do. The question is do they do it and it pop? And Barkley, as you know, we decided early on that if companies are going to be corporations are going to be citizen, pop and Barkley is going to be the best citizen. And so right from Jump Street, we were like, why would we want to grow? Because when we came to Humboldt, we partnered with a grower and we were about to start a mega grow. And I was like, Wait, something is wrong here. You have all these legacy farmers like grandchildren who remember their parents and their grandparents seeing the camp helicopters seen jackbooted thugs raid their farm real trauma in the community, and I’m going to take this Wall Street money to make a grow and marginalize them that just did not sit right with me or anybody on the team for that matter. And we’re like, how about we don’t have a grill? And how about we secure the top of the supply chain because back then it was important. It’s like where’s the supply chain coming from who’s going to be legal to supply your quote unquote, legal market, but we then started to help empower over 200 small farmers, not only with getting licensing, you take off agreements where we could give them money before they gave us the product, then pay them in a structured fashion after so that they could start to understand cash flow management. And that was the right thing to do, because there’s tons of great farmers here. And the reason why we’ve won so many awards and ice water hashes, because ice water hash is very much like wine, like you have to have good grapes, you have to know who grew the grapes and how they grew them, to process them into this awesome end product known as six star hash that’s working with coat with close with the farmers hash is still a very cultural thing in cannabis. And so the notion of new strains every year over year that only comes working with small craft farmers. And so that was an honor to have that like aha moment. Again, when we had one year, I think we grew the fall of 2015 into 2016. And then all of a sudden, it was like, this is a mistake. And of course there was pushback from the community. Because immediately some of that Wall Street money was starting to wash in. And there was we were already feeling that original resistance. And so for us to just stay in integrity, say we’re new to this community. What this community doesn’t have is good manufacturing practices, we’re going to bring that and create value added products. But what this community does have is a bunch of legacy farmers who really know how to grow quality cannabis, and we’re going to partner with them. And we’re going to build a top premium level of this industry. And so to that end, we are committed to humbled farmers and emerald triangle farmers by extension to build this appellation like Napa. And one day, 20 years from now, cannabis from here will be premium and pricier than let’s say something that’s grown in the Finger Lakes region in New York, which I think will also grow good cannabis, by the way.

Well, it’s a little bit of a non sequitur, on my end, but I wanted to make sure we highlighted it. Because I think it does highlight and emphasize you know, your bigger picture, look at what you’re trying to do in this industry beyond just making money to give back to communities to help smaller growers. And I think you’ve highlighted some others along the way. So my last question for you is, you know, you again, you took the reins of CEO, and where do you want to take the company? And how are you kind of looking beyond California at this point?

Yeah, so of course, that’s, that is the question on every, every person’s mind. And so one of the reasons why we haven’t gone multi state is like I said, I wanted to bring the whole portfolio because that model of like having one or two skews and putting them in five or six states was not our model. Now we have over 50 SKUs. And we were bringing the whole portfolio to like let’s say, Massachusetts, or something, which will likely be one of our next states. It’ll be awesome. But to your I’m sure, you can understand that. Most of the folks we talked to have not deployed in solventless. And they think they have these big lab while they do have these big, awesome labs and whatnot, but can’t create our products because they’re like, Oh, well, we have this expensive co2 apparatus and like, what about the solventless apparatus, so they’re only now starting to cottoned on. And now a lot of them do want to partner with us. So we can bring some of that IP and that understanding of solventless. But that wasn’t around before. And it wasn’t until actually a couple of last week, I had a conversation with a gentleman out of Alberta, Canada, and they’re already doing song lists and mix like Roland Canada was like You had me at mixed light. It’s like if you’re in Canada, and you your integrity is so strong, that you’re only doing two turns because it’s freezing cold in Alberta, and you’re trying to process solventless you might have the heart that it takes to create our products because you know, without being cheesy, the main ingredient in pop apart and pop and Barclay products is not THC, it’s TLC, I need to find that operator in other states that is willing to put love into my products. And I haven’t really found that yet. You know, I’m sad to say that that you know, outside California, some of these other states have kind of allowed, quote unquote corporate cannabis to take root and don’t really have the legacy fighters that we have here in California. But that’s okay, because we’re coming out and we will be coming out to these other states, we will be bringing premium solventless clean products that should be in a Wellness Center to these other states.

I love your takeaways on how you partner and finding the right companies and people to work with as you expand outside of California. I think will help others because I’ve seen a lot of companies get in bed with the wrong companies that don’t share the same values. Thank you very much for being on Seed to CEO. I really appreciate your time, and it’s been fun to watch. Pop and Barkley grow.

Yeah, thank you for having me. I always appreciate the opportunity to share some thought leadership with folks.