PP 98 | Growing Cannabis

 

Finding a new business and taking risks is certainly a challenge nowadays, especially during a pandemic. The cannabis industry is not an easy industry to consider, but the COVID pandemic even made it harder. Join Tony Frischknecht with Matt Gillard and Chris Gillard from Jamaco, LLC as they delve into growing your business and building your organization with the right people. Supplying different areas with high quality and sustainably grown cannabis is a challenge, but it’s possible. Matt and Chris prove that entering this market is a success for them. They discuss how they successfully created crops and got some return on their initial investment. Tune in to this episode to learn more about the cannabis industry and explore the opportunities and endless possibilities.

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Passion To Product: Growing In The Cannabis Industry With Matt Gillard And Chris Gillard, Part 1

If you want to follow us and you are enjoying what you are reading, please click the subscribe button for the show or the YouTube channel. That’s the only way you can get alerts when we have new stuff coming out. Also, following some of our past guests, which I’m excited to have some past guests here. I have had them on a couple of times. I have had Chris Gillard and Matt Gillard on the show when I first started my show.

The reason we are bringing these two back is they are on this journey and I have been getting a lot of great feedback from what they are doing. I enjoy it partially because this takes me back to the days when I was just starting up. This is exciting stuff and I hope you guys are going to grasp this stuff because it’s very useful knowledge that they are sharing with us.

If you haven’t read the last couple of episodes that they have been in, they are at the beginning of the show. It was probably the first 10 to 15 episodes. They were right in there and then we had Matt on here between episodes 60 and 70. I’m happy to have these guys here. I’ve got Matt and Chris Gillard from Jamaco LLC. They started the company in 2018 but they have decades of knowledge. Guys, welcome to the show. How are we doing?

We are stoked to be here. Thank you for having us, Tony. We super appreciate the opportunity and we are happy to see you again.

The last time we left talking with Matt, you guys had half an acre Nexus Greenhouse that you spent all this money on and you were waiting for state approval. That’s a big deal like, “I’m sweating. We can just taste it now. Please let us grow some plants.” Talking with Matt, the process was supposed to happen back in January 2021. What happened with state approval? How long did that take for you guys to get?

In late December 2020, we’ve got our final inspection. They came through and gave us a fine-tooth comb. They looked at all our SOPs, camera layouts and any deficiencies they could find. Luckily, they didn’t find any. They said they have to do some paperwork and pass it on to the higher-ups. They couldn’t tell us how long of a turnaround it would be until we’ve got our final license and then it came to January 15th, 2021. We’ve got the email saying that we could commence operations, which was amazing. It was a very fun day.

That was a week or two after we talked then.

That’s when I took a little sigh of relief and thought my job was going to get easier. I passed off the reins to Chris and said, “Chris, we get to grow some plants now.” We planted maybe 1,500 seeds. I will let Chris take on this one.

People that haven’t learned about you, Chris, he has a big majority of the growing backroom. Matt does too but Chris has also spent a significant amount of time in the hydroponic world. You guys can do a little bit of research on him if you are interested in following up on him on our first couple of episodes.

We’ve got the go-ahead from the state. Our thought was instead of bringing clones into the facility, we would go ahead and start from seed from good, fresh and healthy stock from a well-known source of genetics. We’ve got 1,250 seeds we started. Initially, we had thought we are going to grow 3,000 plants. One plant per square foot was our thought but we knew we wanted to start the lighter side for airflow just to get our bearings about us.

This is also your first time in a big greenhouse like this.

It’s a 3,800-square foot greenhouse. We have 3,200-square foot benches. Our business plan said that very small plants, a plant per square foot. We said, “We are going to take this easy and hope we are going to do 1/3 of what we can smash out of that house. We are just going to do 1,000 plants.” Chris is the head grower. He knows all the knowledge. He said, “This is what we are going to run and how many seeds we are going to run with this return rate.”

We started with 1,250 seeds and hoping to have a better part of 1,000 ready to grow.

What was the most positive part about starting with seed so people understand why you did that? It’s time-consuming.

The way I look at it, it’s half a dozen in 1 and 6 in the other in the sense that we know we are going to get started on the right foot. Whereas unless we had a tissue culture source where we knew we had a plant that was free of hop latent viroid, broad mites, powdery mildew, thrips and mites. These were problems that we figured if we started from a clean seed, that we have had less of a chance of incurring those sorts of problems.

It’s within two weeks, especially in the format that we are growing in this high-intensity environment that they grow quickly. If I plant a seed and cutting now, in two weeks, it is not going to be that much different from my perspective as a grower and the seeds often are more healthy. They have a lot of seed vigor.

We had a big issue too. They said, “You guys can start. We are going to open up the metrics window.” There’s a Virgin Mary thing that happens, which is funny. They allowed us 48 hours or 3 days to populate our inventory into metrics and that’s our lifelong in metrics inventory. At that time, we had a choice, “Do we bring in 3,000 clones that have been growing in another location?”

PP 98 | Growing Cannabis

 

If those 3,000 clones were growing in another location, that’s most likely an illegal grow that they are coming from. With the seeds, we were able to populate them into metrics. We ended up going out, shopping around and we’ve got 10,000 feminized seeds. It’s a couple of different varieties that we liked. We put those into metrics. Now, we have a bank that we can pull off of in 2022.

For people that don’t know what metrics are, will you share with them? It’s a tracking system.

It’s the seed-to-sale tracking system in Massachusetts. It’s also used to throw out another dozen states in the country. Each state makes metrics to apply a different set of regulations and laws. Nothing is uniform.

Did they explain why they only gave you three days?

There was no explanation about anything anywhere. When you call metrics, they say call the state. When you call the state, they say call the metrics.

Some interpretation needs to happen on our behalf to say, “Here’s what it says on paper. Here’s what we think to be common practice.” We’ve got to find that common ground.

This is where you guys are at. This is the intersection of the legacy market and the regulated market. This is the true point of how do we get from A to B.

In Massachusetts, every plant that’s over 8 inches tall needs a tag. Those tags cost us $0.75 a tag. If we run 3,000 plants, that’s another $2,500 that we have to worry about.

Are you able to reuse the tags?

We are not allowed to reuse the tags and they are not very recyclable. They get thrown out, unfortunately.

Let’s round it up to $1. You said 3,000.

That was our initial goal and now we are running 1,000.

For the reader out there, just to tag these with an RFID tag, you are talking about $1,000 each round.

As soon as that’s tagged in a plant that’s 8 inches tall, it has the RFID card and that stays with the plant for life. We can always trace it back to the mother. The thing I do like about the system is we took our first round of clones in March 2021. We are growing out of those clones now and we know what mothers they came from. Where in the traditional market, we tracked what planted what but we didn’t track it that closely, where I know that tag number ten is now on tag number 2,600 and that’s the mother of that plant so I can trace the lineage back when we are cloning off a plant.

It has a lot of useful information that certainly comes with it. That’s the good news.

Before you have been to this point, could you have imagined just spending $1 on this little tag that you put in each plant?

From my perspective, having grown for some time, I realized that you’ve got to put a lot of money out before you get anything back. In the sphere of plant problems, that’s something people in the regulated market need to be mindful of. It costs a lot to get started and probably a lot more than you anticipate. We had to put a tremendous amount of money out before we see any return. Every dollar, tag and everything all adds up so does the flower. All the little buds add up to make bags of it. In that same sphere, it’s certainly a challenge.

Industries need to find reliable, hardworking people who want to hustle, have fun, and build a healthy environment. Click To Tweet

The first problem that we hit was we started our seeds right away without having our irrigation skid yet. We’ve got a rock star irrigation system that can be controlled by our computer and is tied into our environmental also.

Do you mean you are not watering by hand?

We are not watering by hand.

We did it for a couple of months.

Two months is good. I know new areas where people were doing it for years.

We are running a Dentex control system on our environmentals, which also controls our irrigation too. That’s tied into an Anderson irrigation skid. We are running the latest and greatest nutrients through that. It’s a big change. We wanted to go into this growing with soil in a traditional organic method. Chris can speak on some of the troubles in why we changed on that.

You guys are in a different medium now.

We are growing in coco, which to me it’s still a pretty sustainable medium over peat. We are doing it in a conventional model, a drip system in coco, mostly due to state regulations and efficiency. One end doesn’t seem to talk to the other. The state comes up with these rules. They defer some of the regulations onto the EPA when they have language that dictates different things like, “Your soil needs to be tested in microbial growth.” It doesn’t seem as if there are being many distinctions being made between good bacteria and bad bacteria.

There are a lot of good bacteria in soil that when they test it in the Massachusetts market, it’s bacteria and makes you fail the test.

It’s not to say that it’s not something that we can do in the future. Certainly, I’m a proponent of that. I do hope to get back to that model at some point but there’s learning to be had in all of it, which is good.

It sounds like they don’t understand agriculture and that’s pretty common.

It’s an opportunity for growth. You might have seen it in Colorado or other states, whereas they start pretty stringent. In Massachusetts, it’s still in the beginning infancy stage of legalization. They start and plant, then they begin to let it grow, build and take suggestions from people who are operating in that market. Things have the opportunity to change. We are hopeful that as the state, public and consumers become more educated about these various aspects of the industry, we can hopefully bring our special touch to it.

We had a state representative from a different district tour our facility because of us being in the greenhouse and being sustainable, she had no idea what she was voting on. She was very pro-cannabis and was happy that the laws that she was voting on were to loosen it up or legalize and regulate it. We gave her a walkthrough tour.

I told her about all the regulations and problems we are having. She said, “Thank you so much. These are the little nuances that we didn’t know existed. I can take this information now and go back to my groups. When we are passing the next round of regulations, I will definitely consider these thoughts.”

Now, you’ve got a political connection like we were talking about associations last time. That’s where you get into helping mold these regulations.

These people are coming to us to learn now.

It’s not what you know. It’s who you know sometimes.

 

We started our first crop on January 20th, 2021. We don’t have our irrigation skid so we have to hand-water. We are hand-watering everything. We moved them out of the little baby room. We put them into the bedroom, which is still in LED lights and we keep watering them. When they grow up, they touch the lights. There’s a snowstorm in Oklahoma. They shut down the whole Midwest so they couldn’t ship our irrigation skid for another fifteen days.

You guys improvised.

We are hand-watering, cutting the plants and topping them down as much as we can. We finally get the skid to get it up and running. We are excited. We put the plants into the greenhouse. Now, instead of doing very small plants into the greenhouse, we are putting 3-foot plants into the greenhouse. My brother did an amazing job with the environment and the nutrients getting delivered. Those plants quickly went from 3 feet to 6.5, to 7 feet, which is awesome. You are like, “Look at all this weed,” but at the same time, it starts falling over, mildewing and getting bud rot. You are growing stuff that was thrown away. There’s that terror line right there.

You’ve got the height, which is awesome when there are no flowers growing. Explain to the reader a little bit more because it’s hard to understand until you see it happening.

They grow quickly and start small. That’s one thing we reiterate. The plants go very fast, especially with this hyper-accelerated environment of a greenhouse and the dual spectrum lighting that we have because the greenhouse does have some HPS light as well as sunlight. The plants rage and take off. That was just one challenge but we did pretty well with it.

You guys are staking them up.

We did some staking and that’s a normal standard operating procedure. Our goal always is to make sure the plants are well supported with a lot of airflows. That was certainly a challenge.

When we are going through this greenhouse too, we have to think that we just hired our fourth employee. At that time, we had one employee who is the head of the office that was taking care of all the paperwork. It’s me and my brother in there watering these things and battling huge plants. Trying to de-leaf a 3,200 square feet is a whole challenge in itself. It’s not a day of de-leafing. Maybe it’s two weeks of de-leafing.

That has been one of our certain challenges with the new business is finding with COVID times, in 2020 and going into 2021, staffing, finding good help. Not just the cannabis industry has felt that but a lot of industries in finding good, reliable and hardworking people who want to hustle, have fun and build a healthy environment. We have been able to find some and everyone we have now is awesome.

We have a small stellar workforce but we didn’t go out and hire 40 people with some of these facilities that run with 2 to 3 shifts operating where we have one shift. There are a lot of sweat equity to say, “We have ground through it.” We are still in the hiring process, team-building process and company culture-building process. It’s all growing and super new. We are figuring it out as we go.

You’ve got to be careful what you wish for. Chris and I had this dream. We knew that we could grow the highest quality cannabis that anybody can see but we didn’t necessarily figure if we are going to grow half an acre and how many people it’s going to take in the trim room. We have a post-production team and how many people do we need in the greenhouse to de-leaf because the guy trimming can’t go de-leaf a greenhouse.

There are a whole bunch of staffing issues. We are trying to relay those issues to our other business partners who don’t necessarily enjoy, respect and like cannabis but they don’t necessarily know how much work it is. They are fast learning and seeing what we are going through. Chris is saying, “We need fifteen employees.” I’m saying, “We can get by with twelve.” They said, “We have eight parking spots upfront so can’t we do it with that?” Suddenly, everybody is pulling their hair out because we need more staff.

This business partner relationship, from what I understood, they are entrepreneurs as well but their expertise was in fishing and other things. I know there are challenges and that it happens. How do you find yourself working through those issues? What have you found that does work the best? Are you in the middle of trying to figure out what works the best?

We have had a lot of good team-building exercises. They have been good to us in the sense that they are here to help us and we are a team. We realized that we need to figure out how it all works before we can have somebody else do it. It has been challenging.

We all jumped into business together not knowing each other. We knew each other distantly. We are learning each other’s faults pretty quickly, too. I have a bunch of them for sure. They see that I and Chris sometimes go at it. We argue, “You should have put these many milligrams and not that many milligrams. It’s week 2, not week 4.”

Part of the challenge, too, is combining common goals, whereas Matt’s business success is slightly different than mine. Our business partners’ vision of success is slightly different than mine and Matt’s. It’s trying to find those common threads. It has been a good challenge. We are all team-building and coming together.

We are fortunate that the deal that our partners signed up for was over double what they originally signed up for. There have been a couple of different contracts that have gone back and forth with us. Some of them had to be renegotiated between us. There are a lot of checks we are doing. I can say nice things about them for sure.

Every dollar and every tag all adds up. Click To Tweet

The one thing is that communication becomes so key. Tell me how hard it is to create that while you are trying to grow, water the plants and hire.

Chris has his own business up North, IPK with people up there running. One of our partners has a fishing company, a small one and a real estate company. One of them is a lawyer. They are all independent people. We have all never been employed by anybody. We are all unemployable. Chris can talk about that balance a little bit.

Communication has come up. We’ve got to communicate. We’ve got to have text streams, email streams, physical meetings and phone meetings. Communication is king. Having an open dialogue and being able to be frank as quiet and cordial as we can but be as direct as we can to recognize our deficiencies or shortcomings because we are not sitting here like, “What do we need to do to be successful?” We have a lot of the answers to all of them but given the experience that we all come with, we have great things we can add but it’s, “Who is good at what?”

It’s like if you had to work in a restaurant for a day or with a group of new people, you’ve got to find who fits where, who is good at what and who does what’s best. That’s still growing, developing and unfolding. A lot of it is about communication and we have been fortunate to have a lot of it. Being that it’s such a small company, there are a lot of accountability. I can call our partners and Matt three times a day. We have a lot of talks and constantly have an open dialogue.

We never stopped working at the same rate.

We are always after it. We all want to be successful. Those have come through communication.

Now, we are at that relationship where it’s at a very tight point, which is a good thing because that harvest that we planted that had to veg for way too long came down. We are now drying and trimming it. Every 15 pounds in Massachusetts has to be sent out for testing. We sent that test sample out.

The big question is, “Are our first 15 pounds going to pass testing?” If it doesn’t pass testing, we can send it to extraction but we are going to get half the money for it. If the first 15 pounds we grew passes, all of a sudden, we went from a company that is bleeding money to a company that is starting to produce the capital.

You start to attempt to recover your overhead. What do you guys do? It creates a lot of stress. Good or bad, some stress’s happening in between. What do you guys do to blow off steam?

I like mountain biking, going to the beach and hiding in the gardens. Gardening for me is still pretty peaceful. It’s learning to manage it. Everyone has stress in their lives and experiences that. The fact that Matt and I, at least the two of us, enjoy plants. We love cannabis and like to consume cannabis. It’s a dream and vision that we want to try to fulfill so that’s very much satisfying in and of itself. There are a lot to be in a room to say, “We have to get the tags done with 1 or 2 people.” That sense of accomplishment is a big part of it and it might not be fun.

I live five minutes from the facility. I’m on the other side of town. We have the latest and greatest technology. I can check all the environments and cameras on my phone. I still refuse to do that. Granted, I do it occasionally. Every morning, seven days a week, after I wake up, I do 1 or 2 things. I drive immediately to the facility. I do a walk-around for about an hour to make sure that all the ramifications are where we want them to be. Maybe I will work for 2 to 3 hours during the weekends and then I come back in the afternoon again to check it to make sure she’s going to sleep.

Matt, why are you not using that technology more?

It’s our baby and there are a lot of things. That technology covers 90% of what’s in the facility. It doesn’t cover 100% of it. Some aspects aren’t smart yet. Our water tanks aren’t hooked up to that. We have to manually check those. It’s just more walking to the facility and feeling. You are not going to notice that the bug outbreak is happening over the camera and little things like that or that the door in the middle of winter is sweating. It’s icing up and tough to get through.

It’s more peace of mind. To me, if you love what you do, you will never work another day in your life. The building maintenance, plant growing, plant processing and trimming 1,000 pounds a week is a great time for me. Dealing with relationships gets tough for me. My brother and I had been at the throat’s ends.

It’s a good thing you are brothers.

We can shake it off and don’t take it so personally.

Chris is talking about some very big deals like you’ve got your door sweating. There’s something that’s off-base that’s happening and not being able to catch that for people that are like, “I don’t understand why a sweating door would be a big issue.” These little things that you see, how has that helped build or create your standard operating procedures? I know I had a discussion with Matt about this last time. He said that these are tricky things to do. It takes some time to build these. How are you coming around to creating these with them and working? I know there can be some issues. How is that working for you guys?

PP 98 | Growing Cannabis

 

It’s working well. In New England, we have four different months. We have to remain nimble and flexible. All the little things add up to having a successful garden, happy and healthy plants. We are learning. There are a lot of unknowns. How we thought it was going to be, it’s certainly sometimes different than how it actually is.

Let’s talk about how you thought it was going to be.

Gardening is a lot of full control, too, like indoor growing. That’s what I base it all on. If I set the controller to 75 or 78 degrees and 60% humidity, I expect to see that. If it’s not, then it’s like, “Let’s go back to the drawing board.”

You guys spent a lot of money on a greenhouse.

We are in a fancy greenhouse. The salesman was an excellent gentleman. He was nice to us but it was much like buying a car. “Do you want power windows, power locks and tinted windows? What rooms do you want?” We picked what our budget would allow us, thinking that it would be the greatest combination.

There were a lot of things. We are coming from small gardens and we are going into a huge facility. There are things that we designed perfectly and things that we designed or chose that were horribly incorrect. We are going through throwing away brand-new stuff and trying to figure out, “We should have done it this way.”

I don’t think it’s uncommon. As far as I have heard it, it’s pretty common to have to do some of these like to re-evaluate where we are at and add some new equipment.

We are in an open-air greenhouse but we have a gable vent that sucks in fresh air and gable vents that dump out the air. We are constantly sucking in the fresh air. How do you keep the garden from not getting powdery mildew when it’s 90% humidity out and your fans turn on every ten minutes and were sucking that air that’s 90 degrees in? The way the greenhouse does it was we turn on the heat. We blast our heat all day, open up the windows and try to dry off the air a little bit as it goes across the plant.

Your climate is causing these issues. I have had this discussion with dozens of people. Let’s say you go to one city over. You could have a completely different problem. Chris has been growing for a long time. When you break down, when you set up in a new spot, it’s like, “I don’t have this issue this time. I have this one.” All of a sudden, you’ve got to, “I agree with you. This isn’t uncommon. The stuff that you are going through is hard.” How do you tell somebody that something you spent $20,000 on is shit?

It’s very difficult.

Especially your investors, that’s part of it.

Our cold air intake is on the roof of our building. It opens up and cold air comes into the hallway. It goes across a wet wall and then it goes into the greenhouse. Those are 24 feet in the air. There’s a screen that’s supposed to stop all these little pests and bugs that were entering but as soon as it gets a little pollen on it, it completely blocks out the airflow. It starts sucking in all the air from the cracks of the building, the doors and everywhere. We need to increase our air intake by 100%. We have to double it easily. We will say, “We just bought this building. Why didn’t we plan for this?”

Fortunately, the controllers that we have allows us to analyze and look at this information. We have more ability than we have ever had to look at it from a different perspective. Whereas I would assess a lot of that by just look and feel in the past. Now, I can go on a computer and print a report that tells me, “Over the last week or month, what has it been? What’s the airflow been?”

You are finding out in your first six months that it could have taken you maybe two years sometimes without having that data. You make an excellent point. You are learning these hard lessons but you are also learning them fast.

I feel like we have a lot of the answers, what we need to do and we know what we need to do. It’s just a matter of how quickly we can be successful with creating crops and getting some return on our initial investment. It goes to putting some money back into the business.

You’ve got 15 pounds out of your first crop. If it passes, that’s a successful growth for your first crop.

Our first harvest, wet-weight hanging, was over a ton. That goes to the big question. Now, we’ve got to wait 30 days before it sells. We know the metric system that we grew over a ton of wet weight. It’s hanging up but does that dry down to 5% or 10%? If it’s 10%, we’ve got 200 pounds maybe. If it is 5%, how much is moldy? Now, we are trying to say, “We’ve got 15 or 20 pounds in the vault but we are still trying to figure out what does it get you.”

Let your business grow and build and take suggestions from people who are operating in that market. Click To Tweet

You guys tell me if I’m wrong but it’s probably one of the most uneasy times of growing just that part of like, “How is it going to cure and dry up too?” I’m a little superstitious and I don’t want to jinx myself and overpredict and then under-deliver. It can make your guts hurt on the inside when you estimate half.

We have tried to be conservative in the entire process.

It’s interesting now rolling this facility open. We didn’t fill every room at once. We grew 1,200 seeds and that went into the first greenhouse. We took loans off of those. Those went to the second greenhouse. Now, we have two greenhouses full growing. We have our first harvest down that’s in our harvest post-production room trim room. I have been in the trim room with the whole trim guy. My brother has been fortunate enough that he is on to grow 2 and 3. Looking at those plants and doing his whole thing over, he is not necessarily in the trim room to deal with that. Now, it’s a department of the company, which is interesting.

Are you guys trimming everything by hand? How are you guys trimming?

We purchased one of the GreenBroz Model M trimmers to assist us. It gets our hands on it throughout the process but we are using some mechanical means to try to get us up to speed just based on the volume of product that we have. Every piece of cannabis and herb will be hand-touched and have it hand-trimmed and inspected for quality control.

We bucket it down by hand and throw it into the GreenBroz. I have been standing over that, working on it down a little bit. When it takes the big leaves off but it doesn’t start breaking up the buds, we pull it out of the machine and then we stick it on some stainless steel tables. We’ve got three trimmers. The guy is great. They are doing the best they can and I can’t say enough of them.

It takes a bit of time to get good at it, too. It’s one of the jobs that day in, day out doing that constantly, it’s probably one of the toughest jobs in to grow.

It does give you a lot of time for podcast listening, too. I’ve got to read to every one of your episodes while trimming.

It gives you a lot of time. We talked to the guys in trimming like, “Less talking, more chopping.” It was the motto because it can be easy to get lost in a new conversation. You want these guys to be teammates but you also want to be productive at the same time.

It goes a lot to the design of the facility too, things that I was thinking about. We have two stainless steel tables we can fit 4 to 6 people at them. Those stainless steels are on walls that don’t face each other. Those three guys are back-to-back, which I don’t know maybe it helps cut down on the chit-chat a little bit. It more makes it a teammate thing where one table is working against the other table. If we are all sitting around a folding table, we are all facing each other. It tends to open up the conversation a little bit more.

Important Links:

About Matt and Chris Gillard

PP 98 | Growing CannabisJAMACO supplies the Massachusetts adult-use cannabis market with high-quality, full-spectrum, sustainably grown cannabis.

 

 

 

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PP 100 | Against The IRS

Free 280E & 471(c) Documents

If you have been listening to the show you know that my cannabis business got Audited by the IRS! Not fun let me tell you.

However, Rachel my awesome lawyer who specializes in tax law sent me these two gems to share with my audience!

 

Cannabis Taxpayers Find Flaws in New Accounting Method Rules

The Growth of the Marijuana Industry Warrants Increased Tax Compliance Effort

 

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