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Episode 44

Cannabis Testing

Improving the analysis of testing can dramatically increase consumers’ experiences, as well as operators’ return on investment. But most cannabis business owners are intimidated by the data and don’t know how to use it to drive smart, leading edge business growth.

In this episode, we talk to Len May of Endocanna Health and Matt Kurtzman of Canold about how data can support business development, as well as improve the customer experience in drastic, never-before-seen ways.

The Higher Enlightenment Cannabis Podcast #44 – Cannabis Testing Transcript

Adam Kulbach 0:08
Hello and welcome to the Higher Enlightenment Podcast brought to you by Higher Yields Cannabis Consulting, your Seed-to-Sale Business Solutions Team. My name is Adam, part of the creative team here at Higher Yields. And today’s episode is all about how improving the analysis of testing can increase consumer experience and operators return on investment. We develop context around how operators and consumers are driving change in the industry, and how data can support each side. Our special guests for today are Len May from EndoCanna Health, and Matt Kurtzman from Canold. So let’s get on with the show. So let’s begin by having you guys give a brief background on yourselves, and about your experience in the cannabis industry. Let’s start with you, Matt.

Matt Kurtzman 1:00
Sure. My background is in predictive modeling data science, business intelligence, I’ve been doing some flavor of this type of work now for 20 years. I started with doing some Lean Six Sigma Black Belt stuff. And then I moved over into E-commerce analytics. And then I spent 5 years at Boston Consulting Group building models to analyze how customers interact with loyalty programs and promotions, industry agnostic, we did health care and insurance and banking and consumer goods and retail, hospitality, transportation. And then I kind of got burned out by the travel and decided to hang my own shingle and started doing some independent consulting in the data analytics space. And five and a half years ago now, I got introduced to a vertical medical operation, just south of Boston. And they were using a seed to sale platform and had some complications using the front end reporting capabilities of that platform to identify patients that were churning out of their retail business. And that was kind of my bread and butter at BCG is to identify those people who are exhibiting churn and then do something about it. So we started building a churn identification model, and then a retention campaign. And then people left that operation and moved up to one north of Boston. And they said, “Hey, this guy, Matt was building out some really cool tools for us, you should give him a call and see if you can support some of our data analytics initiatives.” And I started getting all these different calls from different operators to support business intelligence, and reporting and data modeling. I said, I gotta figure out how to build a software to scale this up. So for the better part of five years, we’ve been building software, which enable cannabis operators to automate their analytic workflow, reduce waste, optimize processes, get beautiful new clarity into their business that they would never be able to get with the conventional software platforms that they’re using. And use that clarity to grow more weed, sell more weed and make more money.

Adam Kulbach 3:08
Well, thanks so much for being on the podcast today.

Matt Kurtzman 3:11
Thanks so much.

Adam Kulbach 3:12
Thank you. So Len, can you give us a brief background on yourself and your experience in the cannabis industry?

Len May 3:19
Sure. Unlike Matt, I only have like a brown belt. I don’t have all the belts yet, so I’m working to get that. But I’ve been in the cannabis space, I’d say on off about 26 years, not counting as a patient. I was an activist, I was a president of the cannabis action network. So like if people want to know, let’s go way back where, you know, this kind of started in the early 90s. I was one of the first people that had held a rally at Independence Hall in Philadelphia, with my keynote speaker that was getting federally prescribed cannabis, which you know, we can dive into but then I sort of did the corporate thing for a little while. My-who’s now my ex wife, my girlfriend at the time said you know enough of this cannabis and music stuff, you get need to get a real job. So I went to work for Price Waterhouse and PwC and did some venture capitalist stuff and moved into real estate-commercial real estate. I was a broker, that got me out to LA. So I from Philly to LA been out here for about 14 years and then I got into the dispensary space. So I was an owner and operator, a partner in five different dispensaries called Kush Kingdom. And one of the challenges that I was trying to figure out what was going on-why two people will consume the same exact cultivars or cannabis strain as people refer and have a completely different experience. So that sort of trigger might ADD, where ADD is you can either multitask and do a million different things or you’re hyper focus on one thing that stimulates you. And I try to figure out why this is happening. So I got into the plant genetics first, and really focused on why we’re calling these different strains or cultivars different names. Because at the end of the day, we’re looking at genetic profile, that plant which changes over time. And then the parent company, the company that was working with which is called medicinal genomics. And Kevin McKernan, who was one of the first people genetically sequenced cannabis, their parent company was called Courtagen Life Sciences. And what they did was pharmacogenomics. So basically, it’s called PGx Testing, but genetic testing for different disease predispositions, so like cancer, epilepsy, autism, etc. And I really got heavily involved in human genetics. So one day light bulb went on said, we have plant genetics here, we have human genetics here, can we bring those two things together to guide people to a personalized experience with their phytocannabinoid use? And then in 2017, we launched company called EndoCanna Health that I’m a CEO of and Co Founder. So, that’s my background.

Adam Kulbach 6:14
Okay, great. Thank you. So, Matt, how does your product work? And what value does your product bring to the market?

Matt Kurtzman 6:23
Sure. So what we’re doing at Canold is we are delivering the data from the back end of the platforms that generate that data. And what that allows us to do is, instead of having this data in a siloed environment, we can centralize that data, and then make it speak to each other. And when we take data from disparate sources and put it together in a meaningful way, the insight and the value that comes out of those bolster data sets tell a really interesting, compelling narrative about where there is waste or where there are opportunities in a given process to optimize. So what we do is we pull the data out of these platforms, we centralize it, nd then we assist operators building models and tools and dashboards and reports and visualizations that allow them to optimize processes, reduce waste, and get more clarity into their business.

Adam Kulbach 7:26
Okay, thanks, Matt. So Len, how does your product work? And what value does your product bring to the market?

Len May 7:35
So it’s several different products. So I’ll kind of put together in one, but the main product is our DNA tests called the Endo DNA test. And the way that it works is that you get a test either online or on endodna.com, or your doctor’s office or a retailer, you would then bring that home, you would swab the inside of your cheek, you register because we’re a HIPAA and GDPR compliant, and you mail that sample back to our lab. Or if you’ve already taken a 23andme or Ancestry or any other DNA test, you can take your raw data from that uploaded to a portal, we’ll translate that in 30 seconds and provide you a report. So the report is when you log in to your portal, you will have a personalized report, we look at about 675,000 snips, which single nucleotide polymorphisms. So basically think of it as genes that directly or indirectly impact the endocannabinoid system. We show you your genetic predispositions basically, like you would you’d use a GPS that shows you there’s a traffic jam on this road, there are potholes over here, things to avoid, so you can mitigate a possible adverse event and hone in to a more personalized experience with your phytocannabinoid use. So the idea is by looking at your genetic predispositions, you can find out what is the right cannabinoid terpene profile for you? What is the right dosing protocol based on metabolic function-how you metabolize things, because we all were always taught about milligram per kilogram right? And it’s not about milligram per kilogram, it’s about how you metabolize so if somebody is a bigger person, but they’re a poor metabolizer, they can have a pretty intense experience on the somebody’s an ultra rapid metabolizer or something of that. And then we also look at something most companies or even healthcare professionals don’t think about is drug to drug interaction. So you know, when I had COVID, I was taking 14 different supplements. Well, how do they interact together with my phytocannabinoids? Are some of them reducers? Are some of them inhibitors? So we look at over 200 different prescription medication supplements to see if there is an interaction and all that information is thent taken into consideration with our marketplace. And what we do there is we look get certificates of analysis of test results from different products. And we show you what the percentage of matches for that specific product that we can then geofence and take you to a specific product where you reside, and hopefully get some feedback and model use like, what Matt was saying use modeling to be able to guide people to their personalized experience based on efficacy. So personalized phytocannabinoids personalized cannabis basically.

Adam Kulbach 10:27
So for both of you, you can jump in as you wish. So how important is testing? And how accurate is it in today’s markets?

Matt Kurtzman 10:37
Go for it,Len.

Len May 10:38
Well, what kind of testing? Are you talking about? Testing your as a person? Are you talking about testing the plants?

Adam Kulbach 10:47
Well, I guess both.

Len May 10:49
Well, think about it this way. You go into a vitamin shop or a GNC and you get vitamin D. You are never question that this is vitamin D, or a mixture of different, you know, multivitamins. And if I go into one in LA, or I go into one in Boston, I don’t have to be concerned that I’m getting you know, vitamin D or my multivitamin? Well, in cannabis, we have to be concerned, because there is zero consistency to product from shop to shop, from state to state, and, you know, from country to country. So testing is ideal. In order for us to move out at the Dark Ages and into a, you know, this is a supplement, or this is a medicine, you have to have consistency of testing, not only should you test every single product, and CBD products are not regulated in that way. So they’re not even tested-a lot of them.not only should you test, all the products were like consistency, you should have a standard of testing when you test for. And you should have standards for the testing labs. So one of the things-Matt probably knows this-when we create our formulations, we send out the three different labs, we usually get three different results back. Why? Who knows, maybe their equipment is not calibrated equally, there is no standard. So I’m not, you know, I’m not about pushing regulations. But in order for us to get consistency of product and really treat ourselves as an industry that is medicinal, therapeutic, supplements, etc, we need to make sure that we have testing of every product. And we have regulations on how we test every product.

Adam Kulbach 12:32
So how rigorous is the testing in today’s cannabis market?

Matt Kurtzman 12:37
In the legal market, there is a requirement that every production batch of a given product goes through some type of testing. And there’s deviations on that market to market. But if something is getting sold out, through a legal market in a standard retail or wholesale or delivery transaction, that product has some type of testing, at least in most markets that I’m familiar with. So obviously, in the original market, that’s not necessarily the case.

Len May 13:15
Yeah, and just to add to that, testing varies, it’s not the same from state to state, but also what type of testing is required, and what type of testing makes sense for the end user. So one of the things I want to know, is my product safe? So if I’m getting a legal, you know, point 3% thc product or above, in a legal state, there is testing. So there’s testing in Nevada that requires, you know, maybe terpene testing, which is not required in California. So safety, for heavy metals, for pesticides, for all those things is extremely important. But efficacy is also as important. So if you’re going to test for safety of all those different things I just mentioned, there should be a standard on efficacy. So you want to make sure that you’re getting all the-as much information on what’s in the product, as well as what you want to avoid being in the product. Like there’s pesticides and heavy metals etc. And CBD doesn’t have those standards, by the way. So what I mean by CBD is defined hemp derived point 3% THC or less.

Matt Kurtzman 14:29
One of the things just to piggyback on that a little bit that super interesting about the testing framework for cannabis is that like all of the cannabis operational insight that’s being captured from cannabis companies across the supply chain. And this includes literally every plant, every seed, every clone, every retail sale, every wholesale sale, every transfer, literally all the stuff is being captured, including the Labs Test Results for every product that’s tested and sold throughout the supply chain. And what that becomes is this huge opportunity to relate the testing back to the products and aggregate that information by product, by cultivar, or by company by time. And it really really has a fascinating opportunity to tease out insight about the change of how consumers and businesses interact with different products as it relates to the testing results that come out. And as Len was saying, not only are you testing for cannabinoids major and minor cannabinoids, but you’re also testing for terpenes. And then all of the other pieces that are relevant for testing when it comes to health and safety, heavy metals and microbials and residual solvents, and moisture levels. All these things come around as well, and can paint a very interesting picture about what the products are coming out. And again, how the end consumers interacting with them.

Adam Kulbach 16:05
So what does it take to set up the testing and what goes into the test?

Len May 16:11
I mean, neither. I’m not a testing company. So what goes into testing is you send a sample to a third party testing lab, different testing labs have different sample requirements. So depends where you’re testing, you can test flour, which will require, you know, anywhere from a gram to you know, some of them require up to a 3.5 grams to be able to test their flour or you have your tincture, you have your edible, and you will send it to a lab. And then there’s different testing packages, I guess, that you can use. So some of them say “Okay, I just want to potency test.” And the potency test is to make sure that what is level of THC, which is probably the most common test, the least effective test, in my opinion, but the most common test. And then you have as Matt was saying, you have testing that does that looks at mass spectrometers. Basically, they use, you know, equipment like that, they look for presence of different cannabinoids, which you can extract from the cannabinoid. And you can see on the mass spec, what is the level of the different cannabinoids. Interesting enough. There’s certain compounds that come up in the mass spec that we have not been able to identify in different cultivars. So meaning that if we’re looking for major minor cannabinoids, maybe there’s a series of 12 of them, but maybe this plant has 35, we have no idea what they are. but there is a presence there. In addition to that, we’re looking at the terpenes, which are the essential oils of the plant. And then it’s those things that Matt was mentioning, the residual solvents, the heavy metals, all those other things, and we get a report on what that is. Now, different states have different requirements for does it pass, it does not pass, can I then remediate my non pass. So it all depends, there is no standard-federal standard on testing guidelines. It goes from, you know, state to state, and especially on the cannabidiol-CBD space, there’s even fewer testing requirements. But you can send them samples across state lines for testing in regulated states, legal states, you can only send that sample to a lab that’s within the state with THC.

Adam Kulbach 18:38
So it seems like both of your products serve different parts of the industry. And both could overlap and bring a tremendous amount of impact to this industry. So how could this go forward in the future?

Len May 18:51
It’s funny, you should mention that. I mean, it’s a no brainer, right? You think about it. And you know, Matt can chime in, but you think about this way. And to kind of help our company is about personalization. Well, the biggest gap that we have in our business and in the industry is to serve people identically in the same way that we would, as I mentioned in California versus, you know, Massachusetts. So the challenge is that now that I know what works for me what my cannabinoid terpene profile is, well, where do I get that product? So but you know, Matt’s company having the ability and insight to where the products are, one of the things that we can collaborate on is to provide the user, the patient, the consumer, and also the manufacturer, the cultivator all, both sides of the supply chain, we can provide them tremendous insight on the consumer side, we can take them geofence specifically to Have a series of products that may be you know more aligned with them that they can find, you know in dispensary store A, B and C. In addition to that, on the efficacy feedback now that we can get feedback from the end user on how that cultivar or how the chemical variety how that you know, tincture what the efficacy was there, you can take that upstream to the manufacturer-the cultivator and give them some insight.

So, here’s a real life example, when we first created our initial cultivation facility for one of our dispensaries actually service all of our dispensaries. You know, our master grower and I’m doing air quotes for the word master grower, but our master grower decided he’s going to try 40 different strains or cultivars. Well, why? Just because, there’s no insight. So we’re going to find what we wanted to find is what yields the best in the shortest amount of time. Okay, well, you know, I was a big proponent of I’m old school. So I’m like, I remember when I was in Amsterdam, Northern Lights was great, and kosher Kush. All these different strains are great. Nobody cared. Nobody really purchased them. But we had to still go through the process of growing these things. In addition to that, our number one product was this Gorilla Glue number four cultivars that we and when we were a wholesaling that people were coming back and saying, oh, man, this is great. How much THC is in them? I said, 16%. Like none of them know, what do you mean? 16%? I said, Yes, 16%. And they couldn’t get their mind around why it has such low THC. And it’s so efficacious. And it’s because that plant was fully expressed to the, to the best ability of that specific cultivar. So meaning all the terpenes were expressed, it was cured correctly, and the yielded a decent amount. Now you want to go through and check, does that gorilla glue-is it efficacious? So now you can come back to the manufacturer and the cultivator and say, Hey, maybe it’s more efficacious to grow cultivars that are more like this. So having that data and have the modeling, the man is going to be able to provide really solves, you know, mutual challenges in the industry.

Matt Kurtzman 22:25
Yeah, it’s fascinating. And you can imagine a framework where a supplier, whether that is a retailer supplier selling to the end consumer, or a wholesale supplier selling to the retailer, they have a, you know, arbitrary level inventory levels of an arbitrary amount of products, right, some of those products are going to have high velocity, meaning they sell a lot every day that they’re available to be sold. And some will have low velocity where they don’t sell a lot when they’re available to be sold. But at the end of the day, inventory relates back to money that you’ve put in in some capacity, either through manufacturing or through purchasing it. And so you have money, and time that’s locked up in this inventory. So in a framework where you have exposure to all these inventory levels, across all these different products, every product in some capacity is going to be optimal for some type of health benefit. So you can imagine a situation where you have inventory levels of specific products. And you know, by using lens technology, what those products are optimally designed for, you can create pathways where you can connect the people who need it to the products that are going to help them with their specific ailments or conditions. And there’s this democratization of the data in a way that allows everyone access to the right informations to solve something to some solve some type of problem. So a retailer who has inventory levels of a product that’s not necessarily moving that well can now get access to a cohort of patients or people that need that inventory to solve a specific problem. And that is creating a bridge where now the inventory is freed up-they get the cash back into their business. And then the consumer that needs the product now has very clear access as to like not only that it is available, but when they purchase it and they use it in the way that’s prescribed, it’s going to help them ideally relieve some of the things that they’re trying to relieve. So it’s a fascinating framework and this is like completely a function only a function of you know, building something bigger than ourselves for the 2 technologies into two companies can collaborate together to offer something bigger than ourselves. It’s very, very fascinating.

Adam Kulbach 25:08
That sounds great. So who has the greatest opportunity to drive innovation in the cannabis industry? Operators or consumers?

Matt Kurtzman 25:17
Really good question. I mean, I guess, innovation is like, in my opinion, it’s using information to solve a collective problem. And the end consumer at the end of the day are the ones that are responsible for moving the industry, right/ If there is no end consumer, there is no industry. So when consumers and this is-and Len can probably speak better to this than I can. But when consumers are enabled to share information with their peers, and with a collective public, that information can be used to curate products and experiences that are designed for that benefit. And that is only a function of those consumers through any means possible, but through relating how they interact with the products and the services that they’re buying. So in one shape, or form, it’s the consumers that have a lot of leverage in moving the industry forward. However, you could make the same inference on the manufacturing and the cultivation in the retail side, these people are at the forefront of product manufacturing. So they are pushing things out into the marketplace. And they have leverage to be able to control the narrative about what is out there. And at the end of the day, in my opinion, it all comes back to communication in this democratization of data information, the more information that’s flowing bidirectionally between consumers and manufacturers and brands and retailers, the better that everyone is. And I think the more that that happens, the more insight that can be generated, and then the rising tide lifts all ships.

Len May 27:17
Yeah. And just to add to that, consumers have always driven this industry. If you look at the background, this industry, we’re standing on the shoulders of the people that fought for legalization, based on specific conditions like AIDS and cancer, etc. And there’s federal programs in place for that there have been I think there’s only three survivors left of the original 9 program. But we can cultivate and manufacture whatever you want, but it’s always driven by consumer demand. Now, when we get to a point where cannabis is truly a medicine, and what I mean by that definition, there is a, you know, FDA approved products specifically for conditions, there’s only one of them now, which is Epidiolex by GW or jazz pharmaceuticals now. When we get to that state, it’ll be more of a collaborative thing, because doctors usually tell their patients, hey, take this, and a patient doesn’t really question not too much. However, in what I would say, you know, traditional therapeutics, you have a more interactive and collaborative discussion with your healthcare professional, because now, if functional, integrative medicine is moving towards that, but still the I believe in this, and there’s plenty of evidence of this manufacturers consumed, they come out with new products, and they try to, you know, market these products. But if the consumer doesn’t connect to that product and doesn’t meet the demand, the product still stays on the shelf. So I believe that it’s always going to be driven by consumer demand. And like I said, the caveat that’s a little bit of a difference would be healthcare professional suggesting that, you know, the consumer takes this product. And that’s the caveat to that and then they’ll come back to the manufacturers, they need those specific products.

Adam Kulbach 29:15
Okay, well, thanks. And before we go, could you leave a little information about yourselves how people can get in touch? And do you have any final thoughts?

Matt Kurtzman 29:26
Sure. Well, we’re available online, we have a website which is canold.com you can find that at www.canold.com. You can also reach out to me my email is matt@canold.com. That’s canold.com. And we are always looking to connect with savvy cannabis operators both on the plant touching side and the ancillary technology side to help solve the problem of information availability.

Len May 30:03
Yeah, and our website is endodna.com. EndoDNA on all the different platforms, social media, my name is Len May, I’m on all the platforms as well. I think Len May DNA on like Instagram and Twitter. I also have a podcast that I do. It’s called Everything is Personal, you can get that wherever you get podcasts. As far as plugging a business, our business, we were a global company. So it’s, the idea is, in order for us as an industry, to elevate ourselves, this world is getting smaller and smaller. So understanding how we can actually utilize this amazing plant. That’s basically we evolve with, we have receptors for how to do this. So we can actually remove the stigma. There is a tremendous amount of stigma. You know, I’m in LA. So you walk around the streets, you smell cannabis everywhere I was in New York, it’s very similar that you go to Oklahoma or you go to some other states or you go to some other countries. I mean, I don’t have to mention, like A-not a political conversation. But Brittney Griner kind of situation, you go to different countries, and they still have these draconian archaic laws. So by us being able to guide people to mitigate these adverse effects, to be able to personalize their experience with phytocannabinoids, and they’d be able to do research. We’re in the middle of a phase two clinical trial with Harvard right now. We’re publishing PubMed for a study that we did on something called Cannabinoid Hyperemesis Syndrome. We just completed two other studies at CU Boulder, etc. So if people want to, and we’re doing a large sleep study in Montreal in Cambridge right now, so if individuals are interested in doing studies, and actually, you know, documenting the efficacy of this amazing plan, you know, reach out to us as well, because we’re involved in all those things. And the way we’re going to get out of these dark ages is doing just that. More research. And there’s a tremendous amount of research, but not specifically on humans. And this law that was passed recently now allows us to do research on phytocannabinoids that are outside of the state of Mississippi because prior this we have to use the cannabis that was cultivated in University of Mississippi, which is probably about four to 6% THC, which is unrealistic phytocannabinoids. So if you look at the studies have been conducted, they haven’t been even been conducted with the quality of phytocannabinoids that we have now. So studies are really important. Getting consistency is important. And then the last part of that is if we can help in any way through research, through getting healthcare professionals to be able to end prohibition, I think there is already a platform in place. We ended alcohol prohibition, and we knew exactly what to do. So remove that create a schedule for medicinal cannabis five or six, I would suggest that that way, you can have doctors actually prescribing for specific diseases and conditions. So that’s what I would end with.

Adam Kulbach 33:30
Okay, well, thank you so much, guys. It was a very informative podcast, thanks to you.

Matt Kurtzman 33:35
Thanks so much for having us. It’s been a pleasure.

Len May 33:38
Appreciate. Thank you.

Adam Kulbach 33:39
Thank you very much, and have a great rest of your day.

Matt Kurtzman 33:43
Thanks so much. See you later. Bye bye.

Adam Kulbach 33:49
Well, thank you for listening, everybody. For more information about our podcasts, or to add suggestions, or if you want to be a guest on our show, check out the description below. Or please call us at (844) HI-YIELD, that’s 844 H-I-Y-I-E-L-D. And also check out our website at higheryieldsconsulting.com. There you’ll find all sorts of great information and all of our previous podcast episodes. We hope that you’ll join us for our next podcast coming up very soon. So until then, thank you very much, and have a great day.

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