PP 29 | Cannabis Sustainability

 

The hemp industry has long been on its road to sustainability, and farmers are making their way to economy and environmental efficiency. In this episode, Anthony Frischknecht talks to Michael Savarie, a Sustainability Enterprise Catalyst for hemp technology startup, Hemp Black. Michael encourages everyone to adopt on the sustainability process, not just for your products but also for your employees, who are your major investments. He then distinguishes the differences between Canada, the US, and other countries on hemp production. Listen to Michael as he dives deeper on how their startup can minimize negative environmental impact with lesser expenses.

Listen to the podcast here:

The Road To Sustainability In The Hemp Industry With Michael Savarie

I hope everybody’s having a great day out there. I have been looking for some unique and interesting situations in the cannabis industry and also different avenues that I believe are going to change the industry as a whole in many ways. Over the last several months, there has been a bunch of little events popping up either their sustainability for cannabis. There’s also been equitability for all minorities and races. I’ve been seeing a lot of that. I came across this next gentleman that is working specifically in the sustainability area. There’s not a whole lot of information out there about cannabis and sustainability because it’s the last thing on anybody’s mind. Either as a business owner or even the consumer, everybody’s been excited about getting medical or legal cannabis. It’s not been talked about. As of lately, it has shown up quite a bit more. My next guest is a Sustainability Enterprise Catalyst for Hemp Black, a hemp technology start-up based in Philadelphia creating innovative technologies that utilize the plant’s inherent performance and sustainability attributes. In his role at Hemp Black, he works across the company to ensure that all innovations, processes, and products are socially and environmentally responsible. I believe we’re going to see more people like this next gentleman.

PP 29 | Cannabis Sustainability

Malin Strandvall

I’m glad to have somebody here that’s doing some special work to Plant Problems. Michael Savarie, how are you doing?

I’m doing good, Tony. Thanks for allowing me to take part in this show. I’m looking forward to diving deep into the hemp industry and talking more.

I’m excited to have you. I’ve been involved in the hemp industry for quite some time and sustainability is something that I don’t think many business owners or growers think about. What’s exciting about the sustainability side of it? We’re conscious of the earth and what we’re using and trying to think about things ahead of time. What’s your passion? Why are you involved in sustainability for hemp?

You’re right, a lot of people don’t but not necessarily thinking about all aspects of business and how that ties into sustainability within, especially within the cannabis and industrial hemp industry. I would say like with me and how I got passionate about it as I’m originally from British Columbia in Canada. I grew up in the Rocky Mountains there. From a young age, I was in nature every single day, whether it’d be walking to school, taking evening walks with my family and being immersed in nature. I was able to see how ecosystems were reacting to people coming in there and others destroying it or refurbishing the nature itself. I was able to get a firsthand experience of how nature reacts and how the environment reacts to us as people. Moving that forward, I realized that’s something that could be taken into everything around us. People think that the word sustainability is only focused on the environment, but that’s not the case at all.

In a business sense, it has to do with how you’re treating your employees, how you’re looking after your customers, making sure that everything you’re putting into your product is best for them as well as best for you as well as doing no harm to the environment. Also, being profitable because to be in a business, you need to be able to make profits in order to make a change. That’s how my passion came down with this. I was given this opportunity to work within the hemp industry a couple of years ago now. Seeing that we have this amazing plant that in the United States was banned for all of the wrong reasons. It was outlawed in this country for a long time. We saw the rest of the world slowly making progress. I saw it as myself to research why this plant is amazing. The benefits it has to offer and hopefully share with the world this amazing plant and everything it has to give.

Why do you think more companies are adopting sustainable processes? Do they not know? Are they unfamiliar? Is it a new territory? What do you encounter?

It’s a bit of both. It’s familiar with and they don’t know. If you look at how business was 10 or 15 years ago, it was all about making the most number of products for the cheapest amount as possible. It doesn’t matter if you break it, you’ll put that as a write-off and then pump as many out there. Companies are still doing that. Those companies are slowly starting to diminish in size and diminishing profits in the companies that are starting to rise on the ones that are saying, “We need to look after our employees and everything there.” A lot of people don’t know. I don’t want to say a nuance thing because there have been great companies who have had sustainable missions forever.

Patagonia is a great example of somebody that’s put sustainability and that the social responsibility at the forefront of their entire business. They’ve been around since the mid-‘70s, ‘80s now. It’s a bit of unknowing and a bit of fear or the biggest question I always get asked this, “Isn’t that going to cost more?” Upfront, there’s no denying that it could cost more but in the long-run, it doesn’t cost more. You’re paying for quality at the beginning rather than having to replace something three times in a 10-year period. It’s showing those numbers to people and helps them realize. As I said, it’s people being unfamiliar with what it is and being afraid.

Soil analysis is key to have healthy soil and growing anything. Click To Tweet

It’s more of a long-term investment in your company is the way you need to look at it then.

A good example of that, especially within the social side of things, is an employee. No matter what business you’re in and it goes across every single industry, when you hire an employee that’s an investment. Every company that hires somebody has put up the job posting, have applicants come in, interview applicants and then doing the training. Over that time period, companies can be spending anywhere from $10,000 to $50,000 depending on the level of the employee. That doesn’t account for so as the downtime of employees and able to fully contribute to the team. If you’re bringing on an employee like this, why do you want to treat them terribly and have them leave within a week or within a few weeks and throwing out $50,000? It is an investment but it’s an upfront cost, but you recuperate that cost tenfold if everything’s done correctly.

Are you able to show owners where they can see the numbers will say start panning out where you’re like, “I’ve got twenty guys that I’ve worked with or twenty different companies that I’ve worked with to create these processes to make their businesses more sustainable,” and say their return on investment at the end of 2, 3, or 5-year period? Is that something that you work on?

In our organization, it is not so much because we focus more on the innovation of the hemp side of things. Those big facts and figures are out there. There’s great evidence coming from organizations like a B corp based here in Pennsylvania now globally, which shows that businesses caring about their employees and the customers are having their profits rise as much as 60% compared to traditional companies. You see more and more businesses only wanting to work with companies that are either certified sustainable in some aspect, whether it be their social responsibility if they’re ethical companies, fair trade. There’s more and more evidence coming out that there needs to be some aspect of sustainability within their company if they want to continue past in the immediate future as an organization.

Are there distinguishing differences between Canada and the US on hemp? Are you able to take some of the information that you know from Canada and be able to utilize that down here with some of your processes?

In any test case and anything that’s been around before, you’ll be able to use past cases. Canada has been growing. It’s been legalized since the mid-‘90s. People have been able to grow hemp for some aspect to the scale that they’ve been doing in the States. It hasn’t been happening. The growing season in Canada is a bit different, but if you look at the practices going on in Europe, in Australia, there’s now more machinery being created in Germany to help better harvest. I feel that as more and more people start to get into the hemp industry, rather than seeing the quick dollar signs that are popping up, they need to take a step back and think about we’re seeing where Canada fell within their production or we’re seeing if they’re growing this crop in this climate. It wasn’t doing well, but this crop was. It comes down to people who need to not be hasty in getting that quick buck. Learn on what’s out there because hemp is not new as we know, it’s been around for thousands of years. People who have been cultivating and perfecting this crop for thousands of years, whether it’s been on the masculine is to date, it’s not but we can still learn from those lessons whether it be from Canada, Australia or Europe. There are definitely processes and techniques that people can learn from past experiences.

That’s one of the biggest things in the hemp industry is techniques that people aren’t familiar with in the States along with equipment and processing it. I’ve talked to a handful of hemp people and they’ve gone out. I asked them simple questions because I’m a grower at heart. I ask them like, “Do you know how you’re going to harvest all this product?” It’s hysterical to me that they think, “We’ve got these couple of tents here and we’ll fill these up” All of a sudden, it comes in. They don’t have any equipment to get this stuff done. I don’t know how they can run their businesses like that.

It comes down to even taking the first steps of knowing where they want to grow it. As I have been such a bioremediator, it pulls up all of these minerals deep down in the soil. If these growers aren’t testing their soil first to see there are higher levels of mercury, uranium or chromium or all of these metals that shouldn’t be in your CBD or any product you’re producing to be ingested. They’re not taking those first steps. It’s harming them as we see with a lot of growers now having a surplus of crops that aren’t able to sell it because they are taking those initial steps to get there.

I knew that it was going to start happening. I wasn’t sure when. Have they started testing for heavy metals in hemp and rejecting it now with companies? Are they on top of it?

I know the COA, Certificate Of Analysis, I’ve heard from a few different growers that they were growing for larger companies. They were refused whether it was doing the COA, that’s tough to tell. It’s hard if they’re not doing soil analysis beforehand to know what’s in there when they’re going to produce the CBD. Whether it’s directly tied to the heavy metals, it’s hard to say without looking and doing more test cases. If it hasn’t been denied yet, I wouldn’t doubt that there will be companies coming out and saying, “You have higher levels of chromium here and you have higher levels of mercury within your CBD.” The farmer is going to have potentially no idea how it got in there unless they do some of that initial research.

Testing your soil, in general, is a good practice?

It goes much more than getting the heavy metals and all of that. If you’re growing anything in your soil, you want to know what’s in the soil. You need to know if you need to add different fertilizers, if it’s even good soil or healthy soil. It’s key to have healthy soil and growing anything.

PP 29 | Cannabis Sustainability

Cannabis Sustainability: Sustainability in a business sense is how you are treating employees and looking after customers.

 

I watched the Gold Rush show every now and then. It’s somewhat similar to how they do this process. I remember several years ago when they started mining and stuff and they would go out and start digging. They started digging away. They didn’t even know if gold was there. In the fourth season, I saw this guy, he’s like, “You should drill holes and see what you’re digging into as opposed to spending all this money.” I find that it’s similar to the hemp and cannabis side. People are, “This is a farm. I know that group, let’s say potatoes out here. It should be all good. It should be fertile.” There’s so much that can be missed in that entire process especially if you’ve got a different crop that’s been growing there for decades.

If they’re not rotating the crops or they’re taking a crop that strips all those healthy nutrients and not allowing the soil to heal, it could be planting into a field that has no fertility in the soil. It could be completely dead soil.

I know there are some simple things that you can do to create this sustainable process on your farm to where your soil is always fertile. That’s what I liked about some of the stuff you were talking about when we admit. It seemed fairly simple but there are processes in place. I assume you work with several people where they haven’t even thought about creating a process like that.

It’s true and it’s one of the things that we use within our farmers at our sister company is our best standards and practices. We want to work with the farmers to ensure they’re able to get their maximum efficiency out of their crop and soil because it directly impacts us. It’s a win-win in that. We work with them closely to be like, “We need to work on this aspect. We need to work on that aspect over there.” It comes into everyone benefits when we do that communication and we share those processes.

Even much more so when you’re dealing with a large scale, how big are some of these farms you are working on?

I’m not too familiar with what the acreages are. I’m a bit removed from that operation side of the things. I know we’re expanding and before we even go into any acres that we use or any farm that we use, we meet with the farmers. We talk with them and then we get the whole analysis figuring out what was on the field before and what cover crops they’re using because all of those aspects play into what we need to do.

As you’re working through different technologies, what are some technologies that you find that aren’t there or some opportunities for people that are trying to solve problems that you see out there that would help sustainability and help people like you? I’m sure you run into problems on a day-to-day basis, so there’s got to be something out there that you’ve seen or that you’re looking at.

One of the hardest things, in general, is because it is such a new industry. It’s running into the problems of people thinking it’s every other crop they’ve ever worked with. The difference between a fiber crop and a CBD crop is one looks like bamboo that is completely different to harvest and then one that looks like CBD. Having the right technology is adapted for this. At Hemp Black, we focus more on the fiber and clothing crops. If we look at the technology around that aspect of things, we have cotton. The cotton industry has been around and been able to progress significantly in the last 100 years. We have the hemp industry, which has not been able to progress in the last 100 years because of the law. To know where we need to get to have hemp clothing around more in the world, there needs to be significant investment and research going into the proper decortication of hemp to produce the fiber that we need.

On the flip side, it’s the same with the CBD crops. Some of the crops, it’s slowly starting to switch over are still being picked by hand and they’re still being spread out to ensure maximum growth within that and whether it’s a complete science for every single farmer of how far they space out their crops, potentially not. There needs to be 100 to 200 research papers coming out within the next few years of agricultural universities who are focusing on end. Sadly, due to legislation, while it might be federally legal in the United States, state by state it is still iffy. That’s not going to happen and it’s only going to hurt the farmers and only going to hurt consumers, but also they could call it cultural industry. The slower we have that top-down fix, the slower it’s going to be for the technologies to bring us to where we need to be on harvesting, on processing, as well as planting.

I’m not sure if you’re familiar with this, but a few months ago, there was a lawsuit to press on the DEA from a doctor out of Arizona because they weren’t granting research licensing for colleges. The DEA was keeping all its applications at bay. They sued and they got a response. At least now, there’s movement and they’ve gotten some of these applications approved. At least we are seeing something like that. We’re talking about different plants due to the fact that we’ve got CBD and THC. It’s still the same plant. Some of that research I believe will be able to help us. Are the companies that are in cotton starting to wake up like, “We need to be aware that this is coming now?” I imagine they are, but I’m not around any of them so I don’t know. Do you know any of them that is?

It’s interesting because within the cotton industry, cotton is used within 30% to 40% of all textiles in the world. It’s the second most popular fiber right behind polyester. The cotton industry is great, don’t get me wrong there. The organic cotton had long ways, but their solution to fixing their problem from conventional cotton is to switch to organic cotton, which uses a lot less water and no chemicals, but it’s still not good for the soil. A good comparison is the oil industry saying, “We need to start looking at renewable energy.” Exxon is slowly starting to do that. It’s not their top priority. The concern of the cotton industry is, “Hemp is not comparable to cotton yet. It doesn’t give the same feel on a mass-production scale. We’re not going to worry about it.”

To be in a business, you need to be able to make profits in order to make a change. Click To Tweet

Give it hopefully 10, 20 years, a lot of the cotton farmers will hopefully start switching because they’re able to get higher yields of hemp. They’re able to use fewer resources. It’s not damaging the soil such as cotton. Hopefully, a lot of the farmers will start switching over, but it comes down to that initial research and technology needs to be fully developed before they start looking into it. In places like India, Pakistan and most of Eastern or Western Asia, the Middle East starts to switch over to growing hemp rather than continuing to grow cotton.

I’m going to change this a little bit. Are you starting to see soybean farmers switching to hemp?

I have not myself. I would imagine so because our sister company is based in Australia, Ananda Food. They focus on the hemp seeds and protein, hemp flour, and hemp oil. They’re noticing an uptick in their sales because more and more people are demanding a plant-based protein or a plant-based food source. Soybeans are great, don’t get me wrong, but they’re the biggest drawback from my understanding because of the amount of water that they use. To be able to grow them, one of our most important resources in the world, it requires a lot of water and it’s going to come down to we see more and more droughts happening every single year around the world. These farmers will eventually start to click in that, “We’re able to make this much more money growing a plant that requires this much less water and there’s such a higher demand for it now.”

Whether it be soybean, cotton or other plant-based proteins, corn potentially or food sources, I feel more and more people will start to switch to hemp. As it is one of the only plants that can feed you, clothe you, heal you, house you, all of these aspects from one plant whereas cotton, it can kill you or it can clothe you. Some people are making cottonseed oil, soybeans and you have your milk so it can feed you. There are some new companies trying to do some interesting technology where they use it as a band itself. Out of all those other agricultural crops, they’re only able to hit 1 or 2 of the aspects that hemp can hit every single one of them. Hopefully, it’s a matter of time where they all have that a-ha moment and say, “We can grow every single crop with hemp in the world and do every single aspect for it.” Hopefully, it happens.

With sustainability, you brought up water. Over the last year, I’ve been doing a little research on some of the crops that are using an exorbitant amount of water. You’re talking almonds and avocados. Every year, you hear about California is always in a drought. Why is it always in a drought?

I watched a documentary on Netflix. It’s called Explained and they look at the food industry. They look specifically at the avocado industry and how much water it’s using. It’s somewhere in South America where avocados because it is such a large part of their economy that avocados have first rights to water before people. Avocados are good but is it worth putting somebody’s life over to give plant water? If you look at America, we throw away 40% of our food anyway. We had the big thing with blood diamonds back in the day. We have the same thing with avocado. We have blood avocados. To my understanding, any food that we eat, we were never supposed to be eating mangoes and oranges in Canada or in the Northern States year-round.

You can do it everywhere now. You can find avocado everywhere. Everybody’s got avocado toast for $9.

It comes down to as we’ve become a globalized world. We needed to eat no longer seasonal, no longer have gardens and no longer have any of this. By not being seasonal with our fruit, we have to pick up the slack then. Let’s say Pennsylvania or anywhere in the Northeast isn’t able to grow apples in the wintertime, then they’re going down to South America or somewhere else where they can grow apples. South American is not only having to make apples for all of their local communities but for the rest of the world that isn’t able to grow apples that time of year. They have to do more and more other deforestation, use more and more resources to meet that demand. Whereas if we went back to how it was or we’re limited in our production like that. We don’t need avocados in the middle of the wintertime. We don’t need any of that stuff that we can’t grow in this area offseason because it’s harming everyone whether it’s agriculture, it’s the soil, it’s the farmer. It’s harming people.

This goes back to what you were saying before where it’s thinking about sustainability. Being a company that is not only profitable but also working towards a better climate, better earth for ourselves and for our future generations. I wonder what it’s going to take to force the farmer to think, “I know this is the most profitable crop.” When it comes down, I wonder where the pressure point is there to make them make that switch there. I need to think of sustainability. I might have to grow a couple of different crops a year to do it especially in those all year climate.

It comes down to the tipping point. As Malcolm Gladwell said, “There’s always going to be a tipping point for every single farmer.” I know within the cotton industry, the number of chemicals going into the soil and killing people. It goes back in Silent Spring by Rachel Carson. She outlined it perfectly with the use of DDT. How everyone back in the ‘60s and ‘70s was using DDT on every single one of their crops until they realized people are getting sick, animals are dying, people were dying. It’s sad that those things happened, but it’s drastic measures. It’s going to be whether these farmers are all going solely broke because they’re not able to sell their crops or they’re not able to yield any crops anymore or they’ll start to make the switch. I know not solely around us, but one of the reasons that the Farm Bill was passed is because of where it was happening. If you think of who the lead person was on getting the Farm Bill passed, it was Mitch McConnell coming down from Kentucky.

PP 29 | Cannabis Sustainability

Cannabis Sustainability: We don’t need any of the stuff that we can’t grow in this area offseason because it’s harming everyone, whether it’s agriculture, soil, or the people.

 

Kentucky is famous for growing tobacco. How many farmers are no longer able to make a profit off tobacco anymore because it’s now bad for us? Nine out of ten doctors would say it’s bad compared to 30 years ago they’d all say it was good. You see all of these farmers losing their income and losing their revenue off of a traditional source of the agricultural crop from tobacco. Whereas now, all of these farmers in Kentucky are starting to see the flip side that they’re able to make all of this revenue using hemp. Anyone doing adoption of anything, the first 10% or 20% are the trailblazers. They’re the ones that jumped on the new trends. There comes the 30%, those who were like, “We see it happening.” The third chunk of people that was about 20% to 30% says, “We’re on it now.” There’s the last percentage of people that they see it happening and they keep saying no and no. By the time they get into it, the industry has completely changed and they’ve already missed the boat. That’s what’s going to happen slowly. I wish it wasn’t that way.

Change is hard, nobody likes it. It’s a matter of adapting to new situations. I feel with this day and age with how fast technology is progressing, we see change happening a lot faster than we used to, at least that’s how I feel my perception is. They’re having you adapt or they’re out of business quickly. There are many different factors that come along with having a successful company. Keeping that momentum going and not adapting to change because you get complacent, that happened to me and it happens to many other companies. You have to put your neck out there and say, “We’re going to do this because we think this is the right thing.” That’s what I enjoy about seeing the sustainable side of this industry. I’ve seen it happen so many ways for so long and in most agriculture there is, but especially in our industry because it’s so new and people aren’t familiar with how to truly do it right and grow correctly. I applaud you for pushing yourself out there and wanting to make a change and making a career out of it. It’s for people like you that are going to make this slowly happen. I thank you for doing that.

It’s funny when you look at companies that have a technology company. I’m going to give two examples here. If we think of when Uber came out, Uber is revolutionizing the taxi industry. There’s no doubt about that. The one thing that they missed at the very beginning was they weren’t getting all the quality of drivers because they weren’t paying that much and they weren’t treating their employees that well. Lyft comes around and gives their drivers more money. It’s treating them a lot better. More and more people are slowly starting to use Lyft and a lot of the better drivers are going to Lyft. That’s a good way of showing that you could be first to something, but if you’re not doing it correctly or the way that the world wants you to do it, you’re leaving the door open to everybody else. It can come to swoop in. The next example I want to talk about is if we think about the hemp industry and the cannabis industry as a whole, one of the largest expenses is the operation cost of running the building. Whether you’re doing an indoor crop or not outdoor crop, you have to have lights going all the time and you have to have energy constantly being used.

There was an example we heard in Denver when we met of the one company that they made their entire facility of net-zero, so they weren’t using any electricity to run their facility. When the bubble bursts on our industry, all of these other farmers who are having $5,000 to $10,000 a month bills, are having to go under because they couldn’t afford to pay those bills whereas a company that from the very beginning who said, “We realized the operating costs is high, why don’t we invest a bit more money to this now and make the facility that doesn’t use any energy?” That’s one of the things that we’re doing with our facility down in Kentucky. We’re building a building that we’ll be targeting LEED platinum in building standards. For those who are unfamiliar with that, that’s Leadership in Energy and Environmental Design. Platinum is the highest rating it can get. We’ll be having solar panels on the building, geothermal to help the power and heat it. It’s coming down to minimizing the aspect of our impact on the environment which will also be profitable for us by not having to spend those expenses. Any farmer can take that message to know any manufacturer of anything within the cannabis industry is to minimize your expenses and you’ll be able to succeed.

The tough hurdle for a lot of these startup people to get over is funding. Being illegal, they could have this plan in place, but they couldn’t capitalize on the plan because they can’t access capital to create something for the long-term. It’s challenging. I know exactly the person you were talking about, I can’t remember his name. He went into it thinking about it already. He got funding somewhere, but he had to invest for five years in advance. There are few people that are able to come up with that capital. That’s one of the major challenges for us getting to that sustainability side. I hope that changes soon.

The operation cost of running a building is one of the biggest expenses of the hemp industry. Click To Tweet

As it comes down to it, they’re not able to look at it in a long-term picture. They won’t be there long-term. You don’t build a house out of straw or out of sticks. If you want to live in it along, you build a house out of brick quoting the big bad wolf. It goes into that exact same thing. If you want to have a good foundation and be able to be there for a long time. Without a good foundation, you’re not going to be there.

Michael, I want to give the readers out there a chance to reach out to you if they have any questions or want to contact you. What’s the best way to reach you?

You can reach us through our company website, HempBlack.com. We have a Contact Us there. Also, on my LinkedIn or on Instagram @Michael.Savarie. I’m always available on those platforms. I’m happy to talk to anyone that needs any help within the sustainability realm of cannabis or talk about sustainability in general.

Thank you so much, Michael Savarie. To our audience, I appreciate you reading this. Feel free to reach out to me at PlantProblem.com or BlackMarketBook.com. You can leave reviews. You can give me a review on iTunes as well. Thanks for joining me.

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About Michael Savarie

PP 29 | Cannabis SustainabilityMichael is the Sustainability Enterprise Catalyst for Hemp Black, a hemp technology startup based in Philadelphia creating innovative technologies that utilize the plant’s inherent performance and sustainability attributes. In his role at Hemp Black, Michael works across the company to ensure that all innovations, processes, and products are socially and environmentally responsible.

Originally from Canada, Michael has worked in social and environmental sustainability for 5 years. He has recently completed his M.S. in Sustainable Design from Thomas Jefferson University, where he researched the sustainability of hemp and its technological uses for Hemp Black.

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