PP 61 | Cannabis And Hemp

 

Many people still interchange Cannabis with Hemp. Here to make it all clear for you is Tony Frischknecht himself as he joins the Medically Assisted CBD podcast of Charlie Piermarini. Taking the hot seat, Tony gives us the parallels between the CBD and Hemp industries as well as their differences. He shares his insights into what he is seeing in both of them in the future and whether they are going to soar or sink. Join him in this crossover episode, where he discusses more with Charlie the Cannabis and Hemp space.

Watch the episode here:

Listen to the podcast here:

The Parallels And Differences Between The Cannabis And Hemp Industries: Interview By Charlie Piermarini Of The Medically Assisted CBD Podcast

I’ve got a special episode where Charlie Piermarini from Medically Assisted CBD is doing an interview, and I’m the interviewee. Hopefully, you enjoy this next episode. Thanks for reading.

We have another interesting guest, our friend, Tony Frischknecht. He is the CEO and Founder of Plant Problems. He is also the author of From Black Market to The Man, detailing his journey from black market cannabis to legitimate medical cannabis. Thank you for coming on the show.

Charlie, thanks for having me. It’s a pleasure to be here.

I was on your show and I enjoyed speaking with you about everything. I wanted you to come back on here and give us your parallels on how you’re well-versed in the medical cannabis industry and how that is paralleling into the CBD industry and how you’re seeing what’s going the same and what’s going to be different. How all of these companies and the CBD industry are going to either soar or sink? You’ve been in the industry for many years. Tell us a little bit about your story. You went from growing in your basement to full vertical integration. Give us a little bit of background.

Originally, I grew up in construction. My father was a carpenter my entire life. What happened was building a grow room and carpentry work went together. In late 2005, I constructed my first grow room in a basement. I was on the illegal market at that point. Over the next 1.5 years, I’ve had some big successes. The biggest thing that was bothering me was the illegitimacy of the side of the market I was in. I decided, “Let’s figure out how to become a part of the medical marijuana industry.” I didn’t know anybody that has done it yet, but I knew there was some opportunity there. I followed that pathway over the next 3 to 4 years. In the end of 2009, I decided, “Let’s go ahead and step it up and go into the commercial growing side.”

In 2010, we’re growing commercially and we started our first dispensary back. That’s the general overlay of where I was in the cannabis industry. From 2010 to 2015, we built two dispensaries that have medical and recreational in it. We also built a couple of large growers where we were managing about 20,000 square foot of indoor growers. For the growers out there, we were doing soilless medium. At that time, I also got in with a couple of guys, we built an extraction company around a vaporizer. We were one of the first few companies in Colorado and probably in the US that had an eMarijuana joint. That’s a little bit of my background.

I’m trying to go back into what you talked about is the parallels between cannabis and CBD. It’s funny, the only reason there is this big distinction is regulations. I’ve been asked about it many times, “What’s the big difference?” The big difference is THC. Most plants have both THC and CBD, but the way the regulatory system has worked is we know it’s not the psychoactive, so we’re going to take that out of the regulations. We’re going to say if it is below 0.03% THC in the State of Colorado and there are other states that have adopted that, but it’s not that way across all 50 states. It could be different in different areas. What they stated is that 0.03%, anything under that and it has CBD in it, it’s legal. That’s the difference. It’s the same plants. Genetically, it’s a little different but it grows relatively the same. Some species grow longer. There are a lot of variables to it. People don’t understand, “What do you mean it comes from the same plant?” It’s only depending on the laws and stuff.

That’s what I try and tell people that marijuana and hemp are the same thing. They’re both cannabises. It’s hard for people to wrap their heads around that. It’s even taken me awhile when I first started in this industry about the similarities and the minute differences. We’re talking percentages, 0.03% THC is legal, 0.031% THC is an illegal plant. We’re splitting hairs at this point, but there are a lot of regulations that are coming in and going. One thing I was thinking about is commercially growing cannabis versus when you’re growing marijuana versus hemp. Are they similar situations that you’re growing both of them in? Are you stopping the growth cycle in the hemp a little bit earlier because you don’t want too much THC? What do you see the differences and the similarities are?

Some people can manipulate the plant to do what they want to do. When you’re growing indoors, you can change the situation on how you see fit. Basically, if you can imagine, you’ve got a large-scale laboratory, you’re controlling all the environment, you’re controlling the lighting, the water and the nutrients. The hemp plant produces some of the fibers that you need for a lot of these products. They’re much different than you want the genetics for a flowering plant that you’re going to use to smoke. The big difficulty I feel is there are tons of genetics out there and people are just starting to understand what they can do.

When you're growing indoors, you can change the situation how you see fit. Click To Tweet

I was talking about mistakes in one of my shows, so this popped in my mind. Unfortunately, these farmers are left to finding their own genetics. Some of these states that are new to the industry don’t have the access to these genetics. There’s a company here in Colorado that has some state-certified genetics. What that starts getting into when you get certifications for seeds, it’s tricky. You’ll see what we don’t have and what certified seeds have is they basically have like, “This is how much crop you’ll get per acre. These are all the yields that will happen.” You have all that data and this is what farmers need. This is what they’ve used for all their crops.

We’re going through especially the states that are starting up the season. If they were fortunate enough to find somebody from another state that they were able to get some seeds from, that knows how they grow and how to harvest them, it’s a huge undertaking throwing a seed in the ground and say, “Let’s see what pops up.” This has got a lot of money at risk and they’ve got a lot of time. You can’t go willy-nilly and throw seeds in the ground and expect you’re going to be a millionaire, because that’s not how it happens. There’s a ton of farmers out there that learned a lot of massive lessons in 2019 that some of them are gone already. We’re starting to see those certified seeds come out, but unfortunately the demand is high for them. To find good seeds that are quality is impossible.

I was reading some stories from 2019. I think there was a bunch of Oregon farmers that a lot of these guys are converting their farms from something that they’ve been farming for generations. They know the crop, the conditions, the harvesting cycles, they know everything. Now, they’re seeing this hemp gold rush, so they’re trying to get in on it. They don’t know how to water properly, it’s moldy. The hemp plant is hardy in itself, it’s basically where it came from. They don’t know the specific conditions that this plant needs in order to become the type of plant you can harvest. There’s a learning curve, which I didn’t realize is steep.

There are a lot of them that don’t learn the lesson until the end when harvest time comes. I talked to guys and they were like, “These stalks are 13, 14 feet high. I don’t have a machine.” They’re out there cutting these things down by hand. You can imagine the amount of labor that it takes to do this, especially in the cloning process or when you’re seeding at the beginning. You’ve got to do all this stuff by hand because they’re starting to come out with these machines that are able to do this for us. You can’t ship seeds over from another country and expect them to grow the same. We’re seeing all these little pieces of the puzzle that the farmers are trying to put together on the fly.

It’s scary. I’m scared for them because I know the feeling. I’ve done it on an indoor scale, which was much smaller when I started. When it’s all that you have and you’re risking all that you have, it’s relative to your situation. These guys might be putting up 100 acres and there might be guys that have 100 acres, they have all their money and all their farm equipment invested into it. It’s riding on, “If we don’t make this season positive and cashflow-successful, we’re not doing it again next year.”

That’s where a lot of the similarities with hemp and marijuana. Everyone is still learning. It went from being grown in basements like you were to now they’re doing certified medical cannabis and CBD and hemp. We’re all learning about this.

Fortunately, we’re learning about it. For hemp CBD, they have a head start on figuring all this stuff out because they’re federally recognized and THC is not.

It’s still a Wild West though. It’s federally illegal and legal, it depends on what your packaging says. It depends on the mode of how you’re delivering it, edible and topical. People are mixing it with different things and it’s crazy.

It’s an artisan spotlight out there. There are manufacturers that manufacture this specific product the same every day, every night and goes through this process. People are developing and designing different applications for hemp, CBD and THC. They’re putting it together and saying, “Let’s test this out.” The pharmaceutical world doesn’t operate that way. We have much more to learn. For you guys that are hardcore cannabis people and don’t like the pharmaceuticals, I get it. I’m telling you that as the manufacturing side of this whole industry, we have a lot of room to grow.

PP 61 | Cannabis And Hemp

Cannabis And Hemp: If we don’t make this season positive and cash flow successful, we’re not doing it again next year.

That’s why back in the 1930s why cannabis fell out of favor, one of the things was not only because of the marijuana tax, but also because Bayer invented the pill. You’re now able to give a pill every time I know how much it’s going to be in there, it’s easy to take, you’re not making some tincture in your bathtub. The cannabis industry is seeing that. They’re saying, “How do we standardize this molecule on this plant, this delivery for this every time?” It goes counter against to what the cannabis culture stands for. That’s hard to replicate a plant with over 150 active molecules in it. You’re going to tell me every time it’s going to be in a pill, it’s going to be the same way. It’s going to be nearly impossible. There’s going to have to be some type of genetics where we know, “This flower planted in these conditions and six weeks from now, we’re going to harvest it. The buds have a percentage of cannabinoids within this range.” That’s what’s it’s going to be, I feel.

There will be ranges. Coming up with those baselines is key. I had a discussion with a good close friend of mine. We were talking about strain names. They’re still out there. They make no sense to the consumer, especially the new one. They’re still stuck back in the underground world market. These names mean something. There’s a lot of growing up to do is what I mean on both the hemp and cannabis side of the industry.

Leading down that path, we were talking about when you had your storefront, you got well-versed into coaching patients and consumers about different types of products give you different types of reactions. That’s a big thing in the CBD industry, same thing as the marijuana. Telling a patient, “Eat this gummy. You’re going to feel like this.” You can’t say that because everybody responds differently. You can say, “Most people feel this effect.” Walk me through what do you see and how do you feel, and how do you recommend patients and consumers about taking CBD or cannabis? What’s your go-to? Where do you start at?

One of the first things we used to do when we’re talking to customers is, “This is going to affect you differently than me.” We took a slow approach, low and slow. We even did it before the regulations. We’re pushing to talk to our customers. Being from the black-market side, people would make different edibles and they were all kinds of different strains. I was never a big fan of them because I didn’t know what I was taking. You take an aspirin, you know what you’re getting with an aspirin. I had a talk with a guy. We were talking about these edibles levels and how you can tell at least in Colorado with the growth of the market and the way that things are regulated, what’s 5 milligrams is 5 milligrams. Those guys that are inconsistent and don’t taste good are out of the market. It brings the work its way through.

What we would talk to them is we had a little system like, “You take 5 milligrams for the first hour. If you don’t feel anything, take your time with this,” especially the new people, I would say half of a half. “If you’re going to have a 5-milligram gummy, cut it in half, 2.5 milligrams.” I’m a lightweight as it is. I always started with that and build my way up. Usually after 1 or 2, I was fine. I didn’t need to fill anymore. You’ll find that the heavy medical users have a tolerance for it a lot of the times. They’re used to that. You need to tell who your audience was when you are talking to the customer. I’m sure you work the same way like, “I know this person, it’s their first time.” They may be timid about even talking to you about using a CBD product because of the old demonization of the plant.

It is still demonized.

You are still only medical in Arizona, correct?

Correct. Recreational is on the ballot in 2020.

Looking in my crystal ball, once you start seeing that happen, your patients will get a lot more comfortable because they’ll see it all around them. That will change the dynamic of the entire state. That’s what we saw here in Colorado. I think it’s common except for places like California, where they’ve had cannabis around for so long. When we talk to our patients and we would teach our budtenders. That was a big part of this because they needed to understand if a budtender was a heavy user, he needed to look at a point and say, “This person is a newbie. This person is not.” You walk them through these little steps. It’s simple, but that’s only because I was around it all the time. Like anything else, you tend to get numb to the situation. In another state if I don’t see a dispensary, I’m like, “That’s right. They don’t have dispensaries here.”

People put the mental stress on themselves for not getting stuff done as quickly as they should. Click To Tweet

How I talk to my patients is, “Everybody’s endocannabinoid system is different and it’s going to respond differently.” It’s an art. For most patients, they enjoy becoming part of the process rather than me just prescribing, “You’re take these two pills, come in two weeks.” It’s like, “You’re going to start this. Take a journal. Journal every day how you feel, if you feel like this, go up, go down.” They’re part of the process. They’re part of the decision-making. They’re not just getting told what to do. It gives the patient back some control of their treatment, which is cool.

I like that approach because of exactly that. It’s like, “If you don’t feel good, then why would you continue taking it?” If it makes you feel funny, then lay off or stop taking it, maybe it’s something else. For the audience out there, I was not a big fan of edibles for a long time, even up until the last couple of years. What I’ve noticed is that there’s a certain amount of CBD that I need with my THC for me to feel comfortable. That’s only come across for the last few years. Prior to that, I was a little bit nervous about edibles because the couple that I did have in the past were not consistent. I was nervous. I’m not a big fan of feeling out of place and uncomfortable if I take something.

For those of you who drink, it’s like getting drunk and you lose control of your body. I don’t like that function. It took me a long time. Since people have been creating products in Colorado with the different ratios, I’ve tried some of them. They’ve been enjoyable, not only of an aspect of feeling euphoria, but it’s got a good balance for my body. I’ve heard people talk about CBD and sativa and indica. Some people are like, “Isn’t that the one that gets you a lot of energy then the other one puts you down?” I was like, and back to your point, “It doesn’t always affect people’s body the same.” People don’t get that.

People also don’t get when I coach people on some of the medical cannabis uses, when they get their card, they’re excited, “I’m going to get high.” It’s like, “If you want the medicinal purpose of this, you need the CBD. You need the other endocannabinoids. Look for a 101 to start, then we’ll titrate you up from there.” People are like, “This stuff is strong.” These are now professionals that are breeding these things and harvesting these things. It’s not someone doing in their back alley with limited supplies. These people are funded by millions of dollars and they’re growing strong strains. Looking at the 1:1, 2:1, 1:2. This industry has a long way to go. I think in the next 3 to 5 years, it’s going to be interesting to see where it ends up. A lot of these companies, I don’t know how they’re going to survive. The CBD market is a little bit different than the marijuana because the CBD becomes more gimmicky. You’re putting it in hand sanitizer and people are putting it in beverages. Is it working? Everyone says it got nanotechnology, but no one can prove it.

It’s like everything had aloe in it for one time. It’s the new hot thing. It’s a supplemental product that people are able to sell as a supplement. They’re putting it in everything and calling it that. I’m a business person and if I saw a great idea, I would take it. A lot of people are doing that. When we talked, it was like, “What’s in it?” That’s honestly how it’s always been with these types of products with supplements like, “It says what’s on the jar, but is that what’s in it?” I always encourage whether it’s your product you’re using or anybody out there that’s reading, at least figure out the product that you’re buying has some CBD in it, at least something that says. Look for third-party research, third-party testing. That’s always a huge thing that I tell people to check out when they’re looking for CBD products because that teaches them something. They know what they’re putting in their body.

I remember being young for years and taking supplements that my dad had always taken and taught me to take and I didn’t even know what they were doing. I’m spending all this money, which a lot of people spend money on these products. A lot of them were extremely expensive. They don’t know if they’re working with CBD on the label. At least they don’t know how much CBD is in it. That’s another thing, it might say it has 1,000 milligrams in it, but it could have a quarter of that, then you’re paying for nothing. That’s one of the negatives about supplements.

It’s not regulated and that’s the one thing. I came across a couple of CBD companies where I saw that they’re getting smarter, so they’re getting the lab testing, but then you look on their website, there’s no contact information. Who’s behind the brand? You throw up a COA, you’re legitimate, but who are you? What are you doing? Is there an email address to contact you? It’s getting better. It still needs to get even better. The FDA and the DEA, they’re all releasing stuff and USDA. It’s getting there. It’s going to take time. Look how far the industry has come in the last few years. If you would have told me a few years ago during PA school for having a CBD company, I would have been like, “You’re nuts. I’m not getting high.” It’s making its way and it’s taking time. You’ve seen it in the cannabis, the marijuana industry, which is a little bit ahead of regulatory. I think it’s already gone through a lot of its bumps and bruises, and the CBD companies are waiting because they haven’t given us any regulations yet.

It’s going to change a lot. There are going to be a heck of a lot of people that go out of business. That’s when you said see who you’re getting it through. I’m spoiled because I knew a lot of these people that were creating it. I knew what the products they were putting in. Know who these people are. Did they just start this two months ago or have they been doing this for at least a year? Is there anything in the news that’s about them? We live in the world of information. It’s easy to google stuff. We’ve also got YouTube. I love you YouTube. That’s one of the great spots to go to search for people and see who’s doing anything, especially in the CBD world, you can see that. Go from there and do your due diligence.

We were talking a little bit before about some of your prototype extractions, getting into the nerdy science stuff. Talk a little bit about that, what you were doing with that and where that’s going.

PP 61 | Cannabis And Hemp

Cannabis And Hemp: Look for CBD products because that teaches you what you’re putting in your body.

 

Thanks for bringing that up. I have a lot of little projects I’m working on. This one is a fun one for me because I’m taking some of my knowledge and experience from extraction. We hope to have an end consumer version where people can take and extract their own oil if they want to make their own edibles. You can extract any herbs, whether it be cannabis or mint or the lemongrass, olive oil, and all that stuff. We think that there are some interesting spots in the cooking side of this. There are many people that are growing their herbs in the summertime. At the end of the summer, they’re dead. They’re not going to make it through the winter time, at least in Colorado. They could be extracting these oils from their herbs out of their garden and use it all year around.

This is a fun little project. We’ve got a little CO2 mini-extraction machine. We’ve got three prototypes in some labs of some friends of ours that have been doing some testing with it and creating some different types of extraction with it. It’s been fun. It’s something that I haven’t been able to do because I’ve been in this rat race of cannabis for so long. Once you hit the ground running, whether you’re in CBD or cannabis, you feel like you’re going to miss out unless you are moving. There’s somebody else that’s bringing on a new product and you’ve got a new system that’s going to be better than mine. I try to talk to entrepreneurs about this as much as possible. Taking your time to understand not only what you’re selling, but understanding your customer is such a huge part of this whole thing. I made many mistakes in the past where I was rushing to get something done because I had to have it done.

To whoever out there that’s working on some, I give you all the power for sure to keep doing what you’re doing, but remember that this thing is going to be here for a while. You’re not missing out on anything. At the time when we were in this little window, it felt like, “Now we can grow this legally. I don’t know how long this is going to last.” Now that I think about it, that’s probably what got in my mind. I’m like, “We’ve got to keep doing it.” All of a sudden, it becomes a habit. It’s like, “What’s the next thing we’ve got to get out? We’ve got to get this done.” All of a sudden many years later go by and I’m like, “I didn’t even come up for Erhard.”

We’re in an extremely fast-paced we’re living now. We’ve had the changes happen in our world. With video and conferencing all the time, people are still busy, at least I feel that way. The mental stress that people put on themselves for not getting stuff done as quickly as they should, it’s not a good thing. The mental stress that we add to ourselves as entrepreneurs will affect you for years to come. For you guys out there, you aren’t missing anything. If you guys are starting now and you’re enjoying what Charlie’s talking about and stuff, it’s going to be here. If you’ve got a good idea, it’s going to be here in the next year or next two years, it’s not going to go away.

Everyone is seeing how much people are making in the CBD industry, I think the long play is going to be giving value rather than value above a product. Education is what I’ve built my stuff, all of my products and my company on. I’m not just selling a product, I’m giving back to people and they can hopefully come to look to me into my website and my stuff, to trust some of the information I’m putting out. People are going to come. People are going to go. People are going to come in, make a lot of money, then as soon as everyone starts to get smart up about what’s coming along, all these companies start to go to the wayside. A few years from now, it’s going to be super interesting, especially Arizona is voting again in 2020 for adult rec. What’s that going to do for the marijuana industry and the CBD industry? It’s going to be interesting in the next couple of years. I’m excited to see where this goes. I was on your show. Talk a little bit about your show and what you hope to accomplish with it and where you’re taking it and who you’re interviewing. Give us a little background of what your podcast is about.

The name of the show is called Plant Problems. I interview different CEOs of companies in the cannabis industry. I talk to a lot of the people that are starting their companies and they’re going through some issues. I try to expose as many of these problems at the time to either discuss or think about ways to fix them in your company or as you’re moving along the way to legalization in a lot of states. I find that there are different perspectives across the US and Canada. It’s interesting to see what regulatory problems are happening. That’s generally some of the biggest stuff we see especially coming into new states. It’s mostly regulatory. If you’re growing a plant, you’re usually in good shape. However, the regulations are what take place. I try to take a lot of my experience and share that with the audience. Also, I try to open up their eyes to opportunities that are available because it’s ever-changing. What happened in 2019 year is completely different from 2020.

I think you’ve got an interesting niche in your podcast of the business side of marijuana, which a lot of people forget that this is a big business. There are people making and losing a lot of money, especially now it’s publicly traded and MedMen and all these places that are going under, getting bought, getting sold. I’ve been approached with dispensary stuff here in Arizona and the amount of capital to start it. I don’t know anything about it, so it’s talking to people like you, there’s a lot to learn. These people are losing money because they’re seeing it as like, “This is a great new thing. Let me throw $100,000 at this.” They’re getting into an industry that they know nothing about. They just want to make money, which is fine. Then 1.5 years, 2 years from now when it’s not making money, they don’t know why, then they’re starting to pull money, the industry starts to reconfigure. It’s an interesting space.

The ultimate goal, Charlie, is I honestly want to make other millionaires in cannabis. That’s what it comes down to. I know that I have a passion for it. I would love to open people’s eyes to these opportunities that are available. I’m a simple guy. We grew up, we didn’t have anything special. There were times in my life going through high school, we couldn’t even afford a phone. These are all things that I dealt with, until I started making my own money. I didn’t even have health insurance. This was a part of my life. What I’m trying to do is make the opportunity visible whether they are interested in creating a product or whether they’re growing or whether they’re partnering with somebody. These are all different niches in cannabis that can be filled by people that know nothing about growing.

It’s probably one of the biggest things that probably holds people back. They go, “I don’t know anything about growing.” I had never grown a plant in my entire life until I started growing cannabis. If I can do that, I can show you how to get some success there. That’s something that drives me. It’s something that is possible for many people. Many smart business people think, “We can start to grow.” I talk about so much about, “What are you good at?” If you’re a marketing whiz, you can find other people to grow. You can partner with some other guys that have retail experience. There are a lot of people that jump into our industry and they think they’re going to make money. It’s much further from the truth. You’re going to lose a lot of money most of the time.

Mental stress is not a good thing that we add to ourselves as entrepreneurs. Click To Tweet

That hurts our industry. It gets a black eye because I think companies come, people get used to the products, people like the products and the company is gone. People are scaring and the industry doesn’t have their crap together somehow.

It’s a double-edged sword.

I love your show, Plant Problems. I think it’s great. There are a lot of problems around this plant that a lot of people don’t understand. The behind the scenes of cannabis is huge and complex.

There are also some major opportunities for investment. These guys that are getting into it from the investment world into cannabis, it’s not as easy as they think either. Most of them are barely showing what their P&Ls are at the end of the day. People don’t know how to judge that because they haven’t been around it. We do have some IPOs that are out there, but they’re still new. There are a lot of things you have to look out for when you’re getting in the investment world.

If you want to learn more, go read your blog, Plant Problems. Do you got anything last to leave us with?

PP 61 | Cannabis And Hemp

Cannabis And Hemp: Cannabis is huge and very complex.

 

If there is anybody out there that has any questions for me, please reach out to me at Tony@PlantProblem.com. You can also go to my blog site. It has all my episodes. It’s PlantProblem.com. Charlie, thanks for having me on.

Thanks for coming on. We’ll keep doing some work together. Maybe you can help me make millions.

I am open. I want to see some success stories. You’re doing some fantastic work. I like people like you that are pushing forward.

Thanks for coming on. I can’t wait to catch up with you again in the future.

It sounds good. Thanks, Charlie.

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