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TRANSCRIPTION WITH SPEAKERS
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[00:00] SPEAKER_01: Welcome to Canada's podcast, the number one podcast for entrepreneurs by
[00:06] SPEAKER_01: entrepreneurs. Hi, this is Angela Faye from Canada's podcast, welcome to November
[00:12] SPEAKER_01: and to Joel Sherlock from Vitalis Extraction. We're super excited to have Joel
[00:17] SPEAKER_01: with us today. He is a serial entrepreneur and investor focused on finance,
[00:23] SPEAKER_01: real estate, tech and emerging markets. So we're going to touch on a little bit
[00:27] SPEAKER_01: of all that. Joel, welcome to Canada's podcast. Hey, thanks so much for having me.
[00:32] SPEAKER_01: Well, before I actually get into your entrepreneur, just tell me what that is behind you.
[00:37] SPEAKER_00: Just give me a little bit of a deal. So one of the companies I started
[00:41] SPEAKER_00: is a manufacturing business called Vitalis and we make a botanical extractor. So
[00:47] SPEAKER_00: I'm sure we'll touch on this, but with some of the changes in normal business,
[00:51] SPEAKER_00: you know, we usually do a lot of trade shows and so one of the trade shows, which was the
[00:55] SPEAKER_00: biggest one of the year, is usually in Las Vegas. That of course is not happening. So it's online.
[01:01] SPEAKER_00: So our staff, you know, this is one of the extraction platforms we manufacture and we have a
[01:07] SPEAKER_00: bit of a like a video hub, if you will. So I stole it for this podcast because it's a cool background.
[01:12] SPEAKER_01: Okay, awesome. And that is just no small botanical extraction machine back there. Let me tell you
[01:18] SPEAKER_00: yeah, it isn't. It is not maybe before it's over. I'll run over and stand next to it because
[01:22] SPEAKER_01: if the scale is lost here, yeah. Perfect. Okay, so it's bigger than bigger than you.
[01:28] SPEAKER_00: Yeah, and that's, you know, we do make, we make industrial scale equipment. So there's big and then
[01:33] SPEAKER_01: there's bigger than that one as well. Well, and I'm going, I am going to touch on that a little bit.
[01:37] SPEAKER_01: That's tell me a little bit about your entrepreneurial journey. You know what? Yeah, I can't really say
[01:42] SPEAKER_00: still right? Yeah, Vitalis was my my 16th startup when when we started. I mean, a lot of, I started
[01:51] SPEAKER_00: in, you know, background and finance, you know, was going to be a stockbroker and was doing my Canadian
[01:57] SPEAKER_00: securities and, you know, first year of college moved out, bought a house with a friend and,
[02:03] SPEAKER_00: you know, we couldn't afford much. So, you know, we bought this tiny little apartment and did
[02:08] SPEAKER_00: some rentals to it. And then he met a girl and I had the sell it and that was kind of how I was
[02:14] SPEAKER_00: forced into my first fix and flip. So got pretty active in the real estate side, which was great.
[02:20] SPEAKER_00: Put a private equity funds together to buy up some of that cheap Arizona real estate during one
[02:26] SPEAKER_00: of those downturns. Started to reinvest a lot of that into commercial property in Canada.
[02:34] SPEAKER_00: And then, you know, stumbled in really into the legal cannabis market when I became the tenants
[02:39] SPEAKER_00: to one of the early, early licensed growers in the health Canada framework. And then, you know,
[02:45] SPEAKER_00: invested in a fertilizer business and a lighting company and then started financing some of these
[02:51] SPEAKER_00: machines back there. And then we really went out to standardize to one platform and couldn't get
[02:56] SPEAKER_00: the customization we were looking for. So had a good friend who was an engineer and still is.
[03:03] SPEAKER_00: But, you know, said, hey, could you build me a couple of these and, you know, the rest, the rest
[03:07] SPEAKER_01: of this history, as they say. Can you give me an idea of just your timeline? Joel, when was that,
[03:12] SPEAKER_00: when was the start of my tell us? I mean, he and I started talking about it seven years ago.
[03:18] SPEAKER_00: We really started moving on the company six years ago, Vatel Uses, you know, incorporation data,
[03:24] SPEAKER_00: I believe is probably five and a half years old now. But we are the largest manufacturer
[03:29] SPEAKER_00: in the world for this type of equipment for the cannabis and hemp space. Now, it works in a lot
[03:34] SPEAKER_00: of other industries, but that's really where where we dominated. So, you know, we've got offices
[03:39] SPEAKER_00: on poor continents and, you know, service staff because selling, selling equipment like that is
[03:44] SPEAKER_00: one piece of the puzzle and then servicing it as another. When we were talking, I was looking at your
[03:48] SPEAKER_01: website, I was the image of your whole team, right, is there and super dominant. I just, can you give
[03:55] SPEAKER_01: me some insight on how you get from in five and a half years to having, you know, over a hundred
[04:02] SPEAKER_01: staff, is that right? Is that, do I get the number right? Yeah, we were up to like one, one 20 of the
[04:08] SPEAKER_01: so you're you have that many staff in actual manufacturing in BC here and you have four offices
[04:15] SPEAKER_01: in four continents in five and a half years. Just give me some insight on that scale. I mean,
[04:22] SPEAKER_00: that's pretty graphic growth, really. Well, you know, was it was it without many lessons and,
[04:28] SPEAKER_00: and you know, I think ultimately, you know, I have two partners in the business and we are
[04:32] SPEAKER_00: three very distinct specialties, right? And, you know, James is the engineer and really the
[04:38] SPEAKER_00: brains behind all of our designs. Before COVID, I was a lot of travel business development, you know,
[04:46] SPEAKER_00: exploring new markets and kind of paving away as to when we were coming in. And then, you know,
[04:52] SPEAKER_00: our third partner was more on the operational side. So that really helped. You know, I think the
[04:58] SPEAKER_00: the diverse experience that we brought forward also really helped. For me, you know, I am I love being
[05:05] SPEAKER_00: the the stupidest person at the table. It means we've got a good table together. So, you know, my
[05:10] SPEAKER_00: business mentor, relationships and well, you know, I like I'm I'm very, very comfortable asking for
[05:19] SPEAKER_00: help and listening and really, you know, there was a lot when we were scaling this business that
[05:24] SPEAKER_00: we didn't know. I mean, frankly, they're there still is. I mean, as we expand into food and
[05:28] SPEAKER_00: and flavorings and pharma and other industries, you know, there's there's still lots to learn and
[05:34] SPEAKER_00: and I guess I'm just I'm a forever student and kind of addicted to that process. Awesome. When
[05:40] SPEAKER_01: there's a benefit in a three-legged stool, you know, with your operations, your engineering and
[05:44] SPEAKER_01: your biz depth, I think that's a magic formula for sure. What continents are you on? Just out of curiosity.
[05:51] SPEAKER_00: So, I mean, manufacturing for us is all in British Columbia. So, that's actually where I'm sitting
[05:56] SPEAKER_00: right now. I'm in in one of our locations here. So, in in Kelona is where we make all of this
[06:01] SPEAKER_00: equipment and and that's been phenomenal. You know, it's a for those who haven't been. I mean,
[06:06] SPEAKER_00: it's a great four-season, you know, it's one country which I love. We've got the lake in the
[06:11] SPEAKER_00: summertime. You've got great skiing and snowboarding in the wintertime. So, it kind of touches all
[06:15] SPEAKER_00: boxes. It's been a great tool for us recruiting people. You know, there's a lot of people who want
[06:23] SPEAKER_00: to come and live here, especially if you're a top engineer in the oil and gas sector, then you
[06:28] SPEAKER_00: are usually northern Alberta. So, the idea of being able to get from northern Alberta into Kelona
[06:33] SPEAKER_00: worked very well for us. So, that, you know, that that was great. You know, we have offices east and
[06:39] SPEAKER_00: west coast in the U.S. We have an office in Latin America and Columbia. You know, and then our
[06:44] SPEAKER_00: main hub for Europe is in Rotterdam. Okay. Our equipment's big goes usually across on boats. We've
[06:51] SPEAKER_00: flown a couple, but you know, if you need it there quickly, you can put it in airplane. But most of
[06:56] SPEAKER_00: our stuff goes goes into our warehouse in Rotterdam in the Netherlands. And then, you know, we have a
[07:02] SPEAKER_00: center in Australia as well, which looks after Oz and New Zealand. Oh, wow. Is there anything
[07:09] SPEAKER_01: that is common between those countries in the in the cannabis sector?
[07:15] SPEAKER_00: Yeah, I mean, you know, the lessons, the process of sort of those evolving markets, right?
[07:20] SPEAKER_00: Traditionally, the, you know, patients take a little while to get going, you know, extraction
[07:26] SPEAKER_00: facilities traditionally take a lot more time to build than you'd expect. And, you know,
[07:33] SPEAKER_00: ultimately in the cannabis space, a lot of the professionals are coming from like Pharma or some
[07:39] SPEAKER_00: other industry. So there's a lot of, there's a learning process. It's a very, very steep learning curve
[07:43] SPEAKER_00: anytime you're kind of creating a market. The other consistent is change, right? I mean, that's
[07:48] SPEAKER_00: kind of the only guarantee is, especially when you look at the cannabis or hemp markets and how
[07:53] SPEAKER_00: quickly they've moved, right? The only guarantee is that they won't be the same in a year from now or
[07:59] SPEAKER_00: as we joke it moves in dog years, seven years from now. Right. Let's talk a little bit about
[08:04] SPEAKER_01: cannabis position in botanical market. What, what, how would you define it? It's been a great
[08:12] SPEAKER_00: moment for Canadians, right? I mean, we've really led this on a global scale. There's a lot of
[08:17] SPEAKER_00: people watching us. We have made a ton of mistakes, but we were first, right? And it's certainly paved
[08:24] SPEAKER_00: away. This is, you know, be it public markets and companies like Canopy or Aurora or Africa.
[08:32] SPEAKER_00: They've made their mistakes as well, but, you know, we're leading it from a public market banking
[08:37] SPEAKER_00: side. We're leading it from a kind of industry side. I mean, the dominant players are all Canadian
[08:43] SPEAKER_00: companies right now. If they can get their feet under them and really execute well, then I think
[08:49] SPEAKER_00: it's it's our market to continue to dominate. And, and from a market of this size and with the
[08:54] SPEAKER_00: potential that's here, it's a great moment to be Canadian. I mean, I'm very proud that way, but,
[09:00] SPEAKER_00: you know, it's been a lot of fun being able to build this from BC. Well, and it's interesting for
[09:07] SPEAKER_01: me because I had a co-working space and had some events hosted some events, which was really
[09:13] SPEAKER_01: just creating a safe place for people to talk, but just prior to legalization. And so I knew to
[09:19] SPEAKER_01: the awareness of the sector, but just how professional it is and how, you know, how big it is.
[09:27] SPEAKER_01: Yeah.
[09:27] SPEAKER_01: It, you know, much bigger than I ever anticipated. And it's more public now that we are legalized
[09:31] SPEAKER_01: here in Canada. The big question that was difficult to answer a couple of years ago, and I'm curious
[09:39] SPEAKER_01: what your perspective is, is the culture of uptake, if you like, or the perceived culture in botanicals
[09:47] SPEAKER_01: and natural medicines and things like that. What, where, where do you think we sit now?
[09:51] SPEAKER_00: So, again, you know, Canada's led and, and now I think, you know, what's been very, very interesting
[09:58] SPEAKER_00: is as Canada and the Canadian LPs have been looking to go elsewhere, right? And moving into Europe,
[10:05] SPEAKER_00: where it's a purely pharma market, you know, they've had to bring in EUGMP experts. So like more
[10:10] SPEAKER_00: pharmaceutical experience and expertise, companies like Nova Nordic in Denmark or experts from,
[10:17] SPEAKER_00: you know, the Johnson and Johnson's, the, you know, the large GSK's like big pharma companies.
[10:23] SPEAKER_00: So the level of documentation and sophistication to make sure that you have an output that doesn't
[10:29] SPEAKER_00: change when you get into medicinal markets, that's essential. So that's been really interesting,
[10:36] SPEAKER_00: but one of the fascinating parts, because a lot of those pharma people coming over have not dealt
[10:41] SPEAKER_00: with cannabis before. So there's kind of this, the teams that have done it very successfully have
[10:47] SPEAKER_00: merged those two expertise is together, right? The people who may have come out of, you know,
[10:53] SPEAKER_00: California's a recreational market, and a lot of people say, oh, we're so different than that,
[11:00] SPEAKER_00: but what's been learned there and how they're separating off terpenes or how they're getting
[11:05] SPEAKER_00: broad spectrum or how they're removing THCs out of CBD so that it could be shipped across borders?
[11:11] SPEAKER_00: There's so many lessons to be learned, and when those teams can really, really work well together,
[11:16] SPEAKER_01: I think that's, that makes a successful business. So do you think we've kind of overcome
[11:23] SPEAKER_01: collectively the negative perception? No. So what are the roadblocks that we have to get over?
[11:30] SPEAKER_00: Not even close. The conversation in Canada is totally different than it has been. I mean,
[11:35] SPEAKER_00: if I think back to when we made our first investment, I mean, you know, I became the tenant to that
[11:40] SPEAKER_00: cannabis company, I mean, calling Royal Bank and saying, these guys have a legal
[11:46] SPEAKER_00: marijuana cultivation operation. Like, are you going to call my mortgage if I take them in?
[11:50] SPEAKER_00: And, you know, that that was unheard of at the time. And ultimately, you know, in full transparency,
[11:57] SPEAKER_00: I did usher them out of my office after they said, hey, we have a license and I laughed and said,
[12:02] SPEAKER_00: yeah, sure. But, you know, looked into it and, and, you know, invited them back and, you know,
[12:10] SPEAKER_00: admitted that I was wrong. But, you know, it was, it's, it's, it's evolved very quickly,
[12:15] SPEAKER_00: but we're still not there yet. I mean, we've, we've opened the doors for natural medicines. I
[12:23] SPEAKER_00: think, you know, anecdotally, the, the patients are driving and the results that some patients have
[12:29] SPEAKER_00: seen getting off opioids or managing pain in a different way or whatever it may be,
[12:35] SPEAKER_00: your vase syndrome and seizures and CBD, right? There's been some undeniable benefits,
[12:40] SPEAKER_00: which is getting some of the physicians to open their minds a little bit to, to this type of
[12:45] SPEAKER_00: medicine, which has been great. And I think that's, that's going to continue. I mean, we're starting
[12:50] SPEAKER_00: to see it now in the psychedelics industry, you know, clinical trials with psilocybin or clinical
[12:54] SPEAKER_00: trials with MDMA. So there's still lots of work to be done. And we are still, you know, in the,
[13:00] SPEAKER_00: in the first or second inning of, of really what, what can be done globally here. And I think,
[13:06] SPEAKER_00: as soon as we get out of Canada and you go to, you know, Europe or United Kingdom or somewhere,
[13:12] SPEAKER_00: they're still, you know, it's very early there. So how, from your perspective,
[13:18] SPEAKER_01: one of the dangers of being in an emerging market is, and I think it, I'm kind of bouncing back
[13:25] SPEAKER_01: your own words is coming out too hard too fast or, or hard and fast and being able to maintain
[13:30] SPEAKER_01: that momentum. What are your insights, Joel, on helping keep Canada at the forefront? How do we
[13:39] SPEAKER_00: maintain our position as a leader in this emerging market? I mean, I think we need to not be too
[13:45] SPEAKER_00: apologetic like we made some mistakes and, and, but at least the Canadian federal legalization
[13:50] SPEAKER_00: framework is together. It's not perfect, but it's together. If you look at the lack of
[13:56] SPEAKER_00: federally legal cannabis in the US makes, you know, you have like the, the 50 countries of cannabis
[14:02] SPEAKER_00: essentially, right? Like Oregon operates completely different from Washington, completely different
[14:07] SPEAKER_00: from California. You know, our banking side and taking companies, public, some have done exceptionally
[14:13] SPEAKER_00: well and really moved the industry forward and some have sort of spiked and maybe there were some
[14:18] SPEAKER_00: bad actors involved. But again, I think we need to take the lessons and learn and, and move on
[14:25] SPEAKER_00: as we go into other markets. But ultimately learning from those mistakes and not repeating them
[14:31] SPEAKER_00: is very important. But also being being thoughtful about like it took some time for our physicians
[14:38] SPEAKER_00: to get on side the the patients, you know, some of the groups who may be against it. I mean,
[14:44] SPEAKER_00: that's going to happen again as you roll out into any new market, right? The UK and the NHS,
[14:49] SPEAKER_00: you saw a very similar back and forth. I mean, Italy and, and what they've just done with CBD,
[14:54] SPEAKER_00: it's, it's still very much in flux. I mean, they're, they're essentially going through what we went
[14:58] SPEAKER_00: through three or four years ago, depending on who you ask. Right. And what if, if we could kind
[15:05] SPEAKER_01: of wave a magic wand and have a, an ecosystem, if you like, in Canada, what are some of the gaps
[15:13] SPEAKER_00: that are missing that you'd love to see filled? It's a great question. Some of the gaps, I mean,
[15:18] SPEAKER_00: again, I think I'd love to see it when it when it comes to cannabis. I'd love to see those,
[15:23] SPEAKER_00: those groups work very well together, right? You know, the people who have that legacy cannabis
[15:28] SPEAKER_00: knowledge and then the, you know, the farm of the documentation, the consistency, right? To kind
[15:33] SPEAKER_00: of keep elevating that level of outputs, right? I mean, anytime you look at a medicinal product or
[15:39] SPEAKER_00: recreational product with recalls, you know, that's, that, that doesn't do much for trust, right?
[15:46] SPEAKER_00: Even the regulators, you know, learning and talking to each other, right? Learn from what,
[15:51] SPEAKER_00: when, when other countries are putting their regulations together, you know, learn from what
[15:55] SPEAKER_00: did Canada do well? What did Canada do? Do poorly? And hopefully we can sort of pave the way.
[16:02] SPEAKER_01: Let's just add the layer of the current economic climate into the conversation.
[16:07] SPEAKER_01: Not so much the last 10 months, because, you know, the worst investment we all made was a 2020
[16:14] SPEAKER_01: plan or this year. Let's talk about like the next sort of, you know, 12, 24, however many years
[16:21] SPEAKER_01: that little recovery will take for you guys. Where would you like to see some momentum happen
[16:28] SPEAKER_00: from your perspective? I guess, you know, if we talk about some of our assets like, like Fatalis,
[16:33] SPEAKER_00: for instance, right? I mean, we, we have had to adapt and adjust. We can ship equipment, but,
[16:39] SPEAKER_00: you know, shipping technicians to go and train and install, you know, from Canada to globally,
[16:45] SPEAKER_00: wherever we, we service. I mean, that's become far more problematic. You send somebody for one
[16:50] SPEAKER_00: week and then they have to, they have to quarantine for two on the way home. So, you know, we've
[16:56] SPEAKER_00: been training different teams. We've been doing a lot more things virtually. I think some of that's
[17:00] SPEAKER_00: been fantastic, right? I mean, a lot of the travel that I did in the last couple of years, maybe
[17:04] SPEAKER_00: I didn't need to, right? So it's been an eye-opener that way. You know, to go from 250 days to zero,
[17:10] SPEAKER_00: I definitely miss some of it, but I don't know if I need to go back to the crazy pace that I was,
[17:15] SPEAKER_00: for sure. So, you know, there's been some learnings there. We've actually had the time to reinvest
[17:22] SPEAKER_00: in a lot of R&D, which has been fantastic. There were sort of projects and innovations that we
[17:28] SPEAKER_00: really wanted to move forward on the pre and post-processing. So, you know, like we see the
[17:34] SPEAKER_00: bottlenecks and, you know, we really want to be able to help our clients streamline their processes.
[17:41] SPEAKER_00: You know, so we've been able to invest a lot of time and effort and resources into
[17:45] SPEAKER_00: innovating some technology after the extraction step. So that's been fantastic.
[17:51] SPEAKER_01: Okay, I'm going to ask a little bit about your ideal client. Can you describe them?
[17:57] SPEAKER_01: Is it a grower or a producer or who... Sorry, I mean, our clients here are definitely on the
[18:05] SPEAKER_00: processing side. So they'd be, you know, some are growing and processing. They'd be vertically
[18:09] SPEAKER_00: integrated. Others are just buying biomass, processing it, and then, you know, selling a final product.
[18:16] SPEAKER_00: You know, I guess going back to your wave of magic wand question, one of our ideal clients is
[18:21] SPEAKER_00: really truly somebody who understands the business they're getting into or, or, you know,
[18:27] SPEAKER_00: understands what they don't know, right? So that we can properly educate them through it, because
[18:33] SPEAKER_00: deciding on a piece of capital equipment like that, you know, you really need to know how much
[18:37] SPEAKER_00: are you going to be putting in and what kind of products are you going to be looking to make
[18:42] SPEAKER_00: in your lab, right? Both now and in the future. Where's the tipping point for... And I'll describe
[18:50] SPEAKER_01: it as a client or a buyer to be a grow to be vertically integrated. Where's the, where's that cost
[18:57] SPEAKER_01: point, right? Where maybe you should consider being both. So interestingly, some states require it,
[19:05] SPEAKER_00: right? Like Florida, for instance, you have to be vertically integrated all the way through.
[19:10] SPEAKER_00: But if we remove ourselves from cannabis for a second, right? A lot of groups would become
[19:16] SPEAKER_00: vertically integrated once they've mastered one step. If you look at, you know, McDonald's growing
[19:21] SPEAKER_00: their potatoes and, you know, all the way down to owning the beef farms, there's pros and cons to it,
[19:28] SPEAKER_00: right? And they may not have started like that, but they've sort of gained buying power or bought
[19:34] SPEAKER_00: businesses because it made sense, right? So ultimately, if you try and tackle everything,
[19:40] SPEAKER_00: you're increasing your risk. And if you have experts in growing and an understanding of what it's
[19:46] SPEAKER_00: going to take, you have experts in extraction and an understanding of what it's going to take.
[19:51] SPEAKER_00: And you're a consumer products goods expert and you know what that's going to take. You know,
[19:56] SPEAKER_00: then maybe it's a good idea. If you have to for just the way the, the laws in your state or
[20:05] SPEAKER_00: country province, wherever you are, then, you know, you may be forced into it, but ultimately,
[20:10] SPEAKER_00: it's probably best to start one master it and then look at the others.
[20:15] SPEAKER_01: Is there any, and forgive me if I'm asking a question if you have client privilege, but
[20:21] SPEAKER_01: are there any examples that you can think of where they mastered the growing, even if it's
[20:26] SPEAKER_01: collective, mastered the growing, mastered the extraction and mastered that consumer good reveal?
[20:31] SPEAKER_01: Yeah, boom, this is a great example.
[20:34] SPEAKER_00: Yeah, I mean, we're still so early in these markets that, you know, if you look at like when
[20:38] SPEAKER_00: Alan Gertner used to say this all the time, you know, when you look at the coffee market,
[20:43] SPEAKER_00: when it came out like good coffee with strong coffee. And I think we're at that phase right now.
[20:48] SPEAKER_00: We, so there are some people who love, you know, these niche products are like, you know,
[20:53] SPEAKER_00: ice water hash or, or, you know, in the cannabis industry, there's all these sort of subsets of
[20:58] SPEAKER_00: dabs and pre-rolls and vape cartridges that so many of us have heard about, but there's so many
[21:04] SPEAKER_00: different levels of quality within there. There are some people who are shopping on price. There are
[21:09] SPEAKER_00: some people who are, you know, shopping on purely just chirping profile or so it's still so very.
[21:17] SPEAKER_00: And I think that's important to think about when like the consumer hasn't finished evolving,
[21:23] SPEAKER_00: right? Those trends are still very, very fast to move. So when you're putting your infrastructure
[21:28] SPEAKER_00: together, you really have to be thoughtful about how wide are the operating parameters of my lab
[21:33] SPEAKER_00: because the consumer preferences are varying at such a wild rate. Do you have any young people in
[21:42] SPEAKER_01: your life that you influence kids or nieces or nephews or anything like that? I, you know what? I
[21:48] SPEAKER_00: still have a lot of family in Winnipeg. I'm from Winnipeg originally moved great place to be from.
[21:53] SPEAKER_00: So still have lots of nieces, nephews there. And, you know, at lots of kids running around on
[21:59] SPEAKER_01: the ventilation front here, none of, none of my own. The reason for my question and so I'm going to
[22:04] SPEAKER_01: just kind of dig in from a personal perspective is I am a new consumer, right? As far as doubled
[22:11] SPEAKER_01: a couple of years ago and I started these events and a girlfriend said to me, and she can't host
[22:15] SPEAKER_01: an event if you've never tested. So I walked into dispensary for the first time a couple of years ago
[22:21] SPEAKER_01: and went, okay, so I'm in the age where I grew up and cannabis was illegal, right? So it's
[22:29] SPEAKER_01: never, never entered my mindset as a viable consumer experience. Now, you know, my kids and my
[22:37] SPEAKER_01: friends kids are growing up where cannabis is legal, you know, there's probably going to be a
[22:43] SPEAKER_01: store on one corner that says liquor store and then there's going to be a store on this corner that
[22:47] SPEAKER_01: says cannabis store. And so this next generation is growing up with a totally different mindset.
[22:53] SPEAKER_01: So how do you imagine this consumer evolving in a good way for that next generation? Like, really,
[23:03] SPEAKER_01: we're kind of dreaming the next generation of consumers. Yeah, you know what I mean, there's some
[23:08] SPEAKER_00: there's some retailers because I think a lot of that education is going to happen at the retailer
[23:12] SPEAKER_00: level, right? I mean, you know, cannabis was sort of taboo and you know, at one point alcohol
[23:18] SPEAKER_00: was as well, right? So imagine if all of a sudden these liquor stores open up that had all this
[23:22] SPEAKER_00: choice and you just walked into it, it's kind of hard for people to imagine, right? But
[23:28] SPEAKER_00: you need somebody to talk you through what's the difference between this grape and that grape when
[23:32] SPEAKER_00: I'm looking at the swine, what's the difference between bourbon and vodka. But when you go to cannabis,
[23:38] SPEAKER_00: there's so many other nuances because a lot of people may be using it to treat an ailment or
[23:44] SPEAKER_00: anxiety or wherever whatever your use may be. But the retailers can't necessarily, well,
[23:49] SPEAKER_00: they in Canada, they can't make any of those claims, which is reasonable. But, you know, part of
[23:56] SPEAKER_00: that experience is going to be retailer led, right? Is the store well organized? Is there the right
[24:01] SPEAKER_00: staff behind the counter to answer those questions? And you know, if you look at someone like Mimi Lam of
[24:07] SPEAKER_00: Suprat, they have a brilliant way of, you know, different baskets mean different things. You know,
[24:12] SPEAKER_00: you pick up this color. It means I'm just here to get my stuff by and leave.
[24:16] SPEAKER_00: I pick up this color and it's like, hey, I could use some help. This is new.
[24:21] SPEAKER_01: Super simple way of just kind of saying this is how much help I need with,
[24:27] SPEAKER_01: especially as a new emerging market. Okay, this is totally interesting. I just want to ask
[24:31] SPEAKER_01: one question in relation to, you know, that's a big piece of equipment. So is there
[24:37] SPEAKER_01: financing available? How does somebody decide to be a lab?
[24:41] SPEAKER_00: You go back to your question of what weaving the magic wand, right? I mean, traditionally,
[24:46] SPEAKER_00: if you're building a brewery or if you're, you know, buying a tractor to plant carrots or,
[24:52] SPEAKER_00: you know, traditionally farming or corn or anything, you usually have finance support.
[24:58] SPEAKER_00: Still, even though we have federal legalization in Canada, a lot of the banks are still kind of
[25:04] SPEAKER_00: at arm's length here. So, you know, usually in capital expenses like a piece of equipment or,
[25:11] SPEAKER_00: you know, bakery ovens or a brewer's equipment or a wineries equipment, you can get financing.
[25:19] SPEAKER_00: It's just starting now, but it's still usually at higher rates. It's usually private investors.
[25:25] SPEAKER_00: So we do have some financing support, but it wouldn't be like, like getting a mortgage at
[25:30] SPEAKER_00: these great rates that exist now or buying a car at 0%. That's not quite here yet,
[25:35] SPEAKER_00: because the big banks aren't supporting the companies who are buying with leverage at reasonable
[25:40] SPEAKER_01: rates. So we're at, it's a catch 22, right? We're an emerging market. We want to stay ahead,
[25:46] SPEAKER_01: but access to capital is probably a bit of a challenge or a roadblock right now. Big time,
[25:52] SPEAKER_01: especially now. But so tell me, you know, talk about integrated ecosystem here. Yet,
[25:58] SPEAKER_00: you have a finance company? Well, so we, yeah, I mean, you know, much like when we started a lot
[26:04] SPEAKER_00: of our ventures, it's kind of been out of demand, right? So there were a lot of banks who wanted to
[26:09] SPEAKER_00: get into the space, but didn't understand cannabis, right? I mean, you know, as Michigan comes online,
[26:14] SPEAKER_00: somebody says, oh, I'll lend to you, but I need three years of audited financials. Well,
[26:19] SPEAKER_00: the program hasn't been around for three years, so that's an impossibility. So you really can't
[26:23] SPEAKER_00: support this entrepreneur. You know, there is a lot of startups. It is an emerging market. You
[26:27] SPEAKER_00: kind of have to understand the risk and, and you know, the lenders, traditionally borrowers,
[26:33] SPEAKER_00: we're looking at equity or debt. And so it's still expensive debt, but oftentimes, if you know what
[26:38] SPEAKER_00: you're doing, that's that can be cheaper than equity, but still early days. People can connect with
[26:44] SPEAKER_01: you, Joel, not just for for extraction equipment, but for financing in the sector. So financing,
[26:50] SPEAKER_00: again, you know, really, I was one of the founders, but there's a really, really great team there. Leo
[26:57] SPEAKER_00: or CEO of spectrum leasing, Susan, our controller and Rebecca, who's we're all on that team, but
[27:03] SPEAKER_01: I can absolutely put you in touch. Perfect. Now, you already touched a little bit on Kaloana, but
[27:08] SPEAKER_01: let's talk a little bit about Western Canada being hub, you know, in a reason for doing business here
[27:16] SPEAKER_01: in British Columbia, maybe in the sector, just generally what's happening in the lower mainland
[27:21] SPEAKER_00: and in Kaloana. You know what? I mean, Kaloana's had had a lot. I mean, there's once you get involved in
[27:26] SPEAKER_00: the community here, there's some really innovative manufacturing businesses here, which, you know,
[27:30] SPEAKER_00: to be honest, before I was in the space, I didn't know them all, right? I mean, Kaloana flight craft
[27:35] SPEAKER_00: was one that lots of people talked about, but there's a lot of smaller, really, really impressive
[27:40] SPEAKER_00: ones as well. So that's been fantastic. The technology space in Kaloana has been booming. And,
[27:46] SPEAKER_00: you know, the city's been doing a lot of initiatives on its own marketing. So it's been really nice
[27:52] SPEAKER_00: for talent acquisition, even from the East Coast. There's a lot of people who want to get out this way.
[27:57] SPEAKER_01: So is the big move to out west? To me, that just reinforces the connection between, you know,
[28:05] SPEAKER_01: the need for a community to position itself, not just with, you know, activities that they can do,
[28:11] SPEAKER_01: but, you know, the business culture and the business climate in order for the local companies to
[28:16] SPEAKER_01: track talent and expand. If you could, if you could brand Kaloana in a global market for
[28:24] SPEAKER_01: person, for a total self-serving purposes, what would you brand it?
[28:28] SPEAKER_00: You know what? I mean, honestly, it's so funny where maybe we wouldn't, right? For total self-serving
[28:33] SPEAKER_00: purposes, right? I mean, if Kaloana had a million people in it, it might not have the same charm.
[28:38] SPEAKER_00: Right. You know, I mean, the vineyards, the lake, you know, the the the world class skiing all close,
[28:44] SPEAKER_00: you know, I couldn't tell you which one of those three, you'd almost have to like make a hybrid
[28:49] SPEAKER_00: of all of them. But I think once people understood what's here, you know, it's nice that it's kind of a
[28:55] SPEAKER_01: a small, great community. Well, and I think, you know, we have to build on the fact that we are
[29:03] SPEAKER_01: globally renowned for BC, but, right? As far as anywhere in travel in the world, even as a
[29:11] SPEAKER_01: non or a new consumer, the reputation precedes us with the true. A lot of local expertise, is this it?
[29:19] SPEAKER_01: Exactly. Joel, any final comments for our listeners here?
[29:25] SPEAKER_00: Yeah, you know what? You can find us on Vitaleset.com. That's Vitales Extraction Technology.
[29:31] SPEAKER_00: And then you can find me on most of those social channels and reach out if you've got any questions.
[29:34] SPEAKER_01: Love the chat. Well, and I'll add to that Joel has another initiative that you've got your own
[29:39] SPEAKER_01: podcast. Just give me a quick quick snops of the Extraction and Siders.
[29:45] SPEAKER_00: Yeah, again, one of those sort of innovation pieces, right? I mean, you know, as we were saying,
[29:51] SPEAKER_00: we used to do a lot of trade shows and we love the concept of family dinner where we'd have clients and
[29:58] SPEAKER_00: people knew to the industry and get them together. And usually there was good food and good wine and
[30:02] SPEAKER_00: good conversation. So can't do that right now. So we started the podcast, which as we're doing our best
[30:08] SPEAKER_00: to just continue those conversations, learn from the lessons that some of our Mark's experience clients,
[30:15] SPEAKER_00: mistakes they've made, how to avoid that best practices and some of the surprises along the way.
[30:21] SPEAKER_00: So we don't take it too seriously. It's usually a pretty casual conversation with great people.
[30:25] SPEAKER_01: It is an oil, totally mimicked that. The great conversations with great people, I think is what
[30:30] SPEAKER_01: your podcast is all about. So if you're in the business and want to have a little inside scoop on
[30:34] SPEAKER_01: Extraction and where it's going at, check out Joel's, or Vitalis's, is it Vitalis that's actually hosting it?
[30:41] SPEAKER_01: Yeah, Vitalis. Awesome. Joel, thank you so much. We learned a lot about Kallona and about
[30:45] SPEAKER_01: the equipment that you're producing and that and proud to of course have Vitalis here is one of the
[30:52] SPEAKER_01: world's biggest manufacturers of botanic literature.
[30:55] SPEAKER_00: Thanks for having me.
