🎙️ Willow Industries, CEO, Jill Ellsworth
🎙️ Willow Industries, CEO, Jill Ellsworth
We discuss recent headlines around product recalls and aspergillus. And how Willow is helping cultivators prevent contamination to improve product safety and product quality.
Summary:
How she developed a solution to clean contaminated cannabis using ozone technology, the company faced challenges in finding the right technology and successfully gained customers in the early days
Various methods of eliminating contaminants in cannabis
The challenges faced by cultivators and the importance of education and knowledge in mitigating contamination
Willow Industries’ lease revenue model, which offers cultivators a low upfront cost to deploy their solution and provides full-service support
Plans to expand internationally, particularly in Europe, where there is a need for alternative flower treatment methods due to regulations
Company Overview:
Willow Industries is the industry leader in cannabis kill step and post-harvest microbial decontamination technology. Prior to launching Willow Industries, Jill founded Vibrant Earth Juices (VEJ), a cold-pressed organic juice company, in 2010 and later parlayed VEJ into a beverage distribution company.
Founded in 2015 by CEO Jill Ellsworth, the company is built on one simple principle: cultivators should be equipped with resources to provide patients and consumers with consistently safe cannabis. Based in Denver, CO, Willow's services are currently available to all licensed cultivators in the United States and across the globe, where they implement an innovative and accessible leasing model that employs a holistic, turnkey approach for their partners. Their patented WillowPure systems use organic, ozone-based technology that is scientifically proven to reduce or eliminate contaminants such as yeast, mold and bacteria from cannabis, while protecting the medicinal properties of the plant. Willow's modern technology and in-house team of microbiology experts ensure cultivators employ best practices and quality control from start to finish. Willow Industries’ organic, patented, ozone-based technology is currently being leveraged by cannabis producers and brands in 38 states, Australia and Canada.
Background:
The "kill step" is a point in manufacturing when dangerous pathogens are removed from the product, usually by killing them. It's one of the most important steps in keeping products safe. While this is more prevalent in the agriculture and food and beverage industry, Willow Industries believes the cannabis industry should similarly adopt these standards
The standard industry solution for removing microbial contaminants is irradiation, which uses gamma rays to zap cannabis flower with the highly charged, radioactive element cobalt 60. Irradiation by electron beam radiation or x-ray radiation is also popular. Radiofrequency is another option
Cannabis cultivators who use radiation label irradiated cannabis “electronically pasteurized” or “cold pasteurized”
State regulators are still trying to figure out what microbes to guard against
Willow’s main competitors are x-ray technology providers. The largest of which is Rad Source Technologies (Quastar). A smaller, newer competitor, is VJ Scientific
Recent News:
Recalls for contamination have become more prevalent. In June 2023, The Oregon Liquor Control Commission (OLCC) issued a recall for several batches of cannabis due to concerns of mold and heavy metals. According to the OLCC, more than nine batches of cannabis tested positive for the mold aspergillus and heavy metals - cadmium and mercury. This includes cultivations owned by Nectar and Rebel Spirits
Oregon started testing for Aspergillus in April, and previously had lax testing regulations. Cultivators had one year to comply but are currently struggling with the new requirements. The failure rate for flower has increased to 8% recently, from 6% in April
At least 22 other states require there to be no or very little aspergillus detected on cannabis. KOIN 6 found there are 16 states, including Washington and Puerto Rico, that don’t test for aspergillus at all
In June 2023, Four Cannabis Products Recalled Due To Salmonella, Aspergillus Contamination In Arizona (Forbes).
Phantom Farms in Nevada tested positive for Aspergillus (2News)
Product:
Willow Industries provides two machines for long-term leases, rentals, and a mobile service in Colorado. WillowPure lease partners receive in-depth training on how to operate the WillowPure system, a microbial assessment of your facility, and continuous support from a dedicated Customer Success Team.
Funding:
The company raised a $2M Series A from Lago Innovation Fund, Phyto Partners and The Panther Group in February 2022. In total, the company has raised $4M from additional investors, with a $2M convertible note raised in 2019. Other investors include AFI Capital Partners, Achari Ventures, HALLEY Venture Partners, Flatiron Venture Partners, Advance Ventures.
Transcript (lightly edited):
@0:06 - Dai Truong (Arlington Capital Advisors)
Hey, we have Jill Ellsworth, CEO of Willow Industries on the show. Jill, can you give us a quick background on yourself and the company?
@0:15 - Jill Ellsworth (Willow Industries)
Sure, first of all, thank you for having me. I'm excited to chat with you. So I am a serial entrepreneur.
I come from the food and beverage industry. Previous to Willow, I owned a cold-pressed juice company based in Santa Barbara and Denver.
We were in national retail chains, and had a direct-to-consumer business. I sold some of the assets of that and started a beverage distribution business where we distributed a bunch of cold beverages in Colorado.
I sold that company and around that same time, recreational legalization had occurred in Colorado. I was starting to look at my next move and found that there was an opportunity to bring over my...
I have a food science background and am into cannabis. And so at the time I came up with an idea to find a way to clean weed.
And that was based on regulations being required to cultivators to test all of their flour and pass total yeast and mold testing.
But there wasn't a solution if you were presented with contamination. So we invented a kill step for cannabis called willow cure.
@1:27 - Dai Truong (Arlington Capital Advisors)
Yeah, and I only touch upon how you started in the early days. How did you go about figuring out what's the best solution and how do I actually build this?
@1:38 - Jill Ellsworth (Willow Industries)
That's a great question. It took a lot and a long time to really make it happen. But I mean, I, you know, having been in the food industry, I'm also a registered dietitian with a master's in food science and nutrition.
So I really understood kill steps. I understood food production, had plans, and safety in mind. And thinking about cannabis, I looked at all the traditional pasteurization types in food and beverage and realized like the traditional technologies weren't going to work on the plant.
So we first went down the road of high pressure pasteurization, which is typically used in cold press juices and that was a disaster.
It destroyed the flower. And so I pivoted, did a lot more research and came across ozone. Now ozone. And has been used historically in food and bev and ag and felt that that could be a really interesting technology.
So I employed an ozone manufacturing company to build this design that we had made up. And we got a prototype and I started essentially knocking on doors in Colorado.
@2:53 - Dai Truong (Arlington Capital Advisors)
And so what resonated with customers in those early days to sign up and What was the killer sales pitch?
@3:04 - Jill Ellsworth (Willow Industries)
First of all, no one was doing this. We essentially invented this category for the industry because we were the first.
No one was even talking about how to get rid of contamination. But at the time, the cultivators were like, oh my gosh, I'm faced with contamination.
I didn't pass my test and you're telling me you have a solution to get rid of total yeast and mold bacteria, E.
coli salmonella. And so we started working with cultivators in Denver to trial and do a ton of R&D within our system.
And that and, you know, them passing tests was like the biggest issue on their mind.
@3:46 - Dai Truong (Arlington Capital Advisors)
Yeah, and let's talk a bit more about where regulations are across the US. So, you know, from my understanding and headline news very recently, Oregon stepped up its standards for contamination.
@3:59 - Jill Ellsworth (Willow Industries)
We're kind of the standard took a Across the US and some of these legal states, whether that's medical or adult use.
What's really interesting is that it's very much ebbed and flowed as states legalized. You would have thought a lot of the states would have looked at historic cannabis regulations such as Colorado and say, well, let's just copy paste that.
But that really hasn't been the case. As states have legalized towards the East Coast, testing has been very strict.
If you look at the East Coast, Illinois, Michigan, Midwest, the testing regs are very strict. So you're being required to test for total yeast and mold aerobic bacteria and aerobic bacteria, salmonella, E.
coli and aspergillus. Now, if you look at the West Coast, the regulations historically have been fairly lax. Oregon and Washington, and like you mentioned, Oregon recently added aspergillus testing.
Oregon and Washington had very, very lax tests. Stacey, California has always tested for Aspergillus, but no other test comparatively.
Nevada. strict testing. So it's been interesting to see what the regulators have adopted and what they haven't, and how that has impacted the growth of that segment.
@5:20 - Dai Truong (Arlington Capital Advisors)
Is it safe to assume that you have more customers in states where the regulations for testing are more stringent?
@5:28 - Jill Ellsworth (Willow Industries)
Correct. Absolutely. I mean, I would say we have very few customers on the West Coast.
@5:37 - Dai Truong (Arlington Capital Advisors)
Got it. And then help me understand, what's are some of the more prevalent contaminants?
So you guys test for like, I know from the website, there's like eight things that are common, right? So mold, Aspergillus, Mildew, Yeast, Ecoli, Bacteria, Salmonella and Coliforms. Give me a rough understanding of like, you know, what's your Contaminants are more prevalent than others when you guys are doing your kill step.
@6:04 - Jill Ellsworth (Willow Industries)
We typically see across the board, total use to mold, typically high failures there because, I mean, that can come from anything.
can come from, you know, growth of your plant, contamination of your soil, water, air, human contamination. We do see a lot of bacteria, contamination, coliforms, of being in the same vein there.
We rarely see E. coli salmonella. I mean, we've seen it before and when we see it, it's been very bad and our recommendation is, yes, you can most likely get rid of this, but we always recommend.
This is probably not a product that you want to sell into the market despite it passing testing. And then aspergillus.
Now that aspergillus is being required in almost every state, it's very, it's a very hard mold to eliminate.
And also, it's hard to get rid of.
@7:00 - Dai Truong (Arlington Capital Advisors)
I've found a way to...
@7:01 - Jill Ellsworth (Willow Industries)
Yes, I mean, yes, we can get rid of it. One thing that's important is working with the testing labs and understanding actually how they're testing for Aspergillus, because it's a pass or fail.
And it's dead DNA versus live DNA. a lot of the labs are starting to qualify their fails. So ensuring that it's not live DNA, that it is dead DNA, and that that would equate a pass.
But it's all very new, and we're all still learning, and the regulators are learning. And so it's kind of this very much unknown.
@7:38 - Dai Truong (Arlington Capital Advisors)
And then, you know, just as such upon the Canvas labs, you know, that's another space that's kind of had a lot of players in it.
And some have had issues in the headlines the past few years and have failed. Like, what are some of the labs that work in, you know, a certain state or multiple states that you guys kind of, you know, trust what they're doing and trust the standards and the way they're testing things.
@8:00 - Jill Ellsworth (Willow Industries)
I really like ACT Labs. I think they run a very serious organization. care about clean products. K-Cha, there's quite a few, I would call them multi-state operator labs that are doing the right thing.
I see we work with, I mean, work with so many different labs. And I would say some of the single state operators, that's sometimes when we run into the problems with the labs being honest, if they're actually doing the thing they say they're doing.
But, you know, we've heard so much about the potency inflation, but there's also a lot of, I don't know, corruption around passing tests.
@8:49 - Dai Truong (Arlington Capital Advisors)
Right, it's like you can kind of pay for your results and certain actors are more interested in sort of getting the revenue and then running a standard business that has.
@9:01 - Jill Ellsworth (Willow Industries)
Yeah, I mean, we've heard a lab was charging like $5,000 for a passed test.
@10:00 - Dai Truong (Arlington Capital Advisors)
If companies are not using Willow's solution, what are they doing to eliminate contaminants?
@10:06 - Jill Ellsworth (Willow Industries)
So if they're using decontamination outside of utilizing our technology, what we're seeing in the space is the use of a radiation, radio frequency, and then also vaporized hydrogen peroxide.
@10:23 - Dai Truong (Arlington Capital Advisors)
And is that just like a cost decision or, you know, maybe told me this when we first met, you know, obviously you believe in sort of the way you guys are eliminating contaminants.
So is this more like a margin play why they're using these other solutions?
@10:42 - Jill Ellsworth (Willow Industries)
That's a great question. I really think it depends on how, I think it depends on how you run your cultivation.
Now those that very much care about the health and the cleanliness of the cultivation can employ a kill. We're getting rid of microfuels on the surface.
Now some of the other methods like radiation and radio frequency can sometimes penetrate inside the flower, hitting higher levels of contamination, but that also comes from really the lack of, I guess, lack of oversight in the cultivation.
So, I mean we built this in as we built this company and we built this technology as a true kill step.
And with a kill step, you only run it for a couple hours. But, you know, sometimes we're seeing cultivators run their radiation systems from 10 to 12 hours.
And, you know, that's, that certainly wasn't like the intention of this. But I do think it comes from the onus of the cultivator and the owners of the cultivation and how they run their operation.
@11:59 - Dai Truong (Arlington Capital Advisors)
Yeah, and I guess I was making a sound. Which is that you guys are more expensive than the other solutions they're using right now, but it sounds like, from an electricity perspective at least, that's not the case from an overall cost.
How does that cost compare actually?
@12:14 - Jill Ellsworth (Willow Industries)
We're actually fairly inexpensive compared to our competitors. I mean, we're a third of the price of an irradiation system.
And then with that, you don't have to upgrade your electricity or out of water chiller. It's simply a plug into a standard outlet.
And so it's not pulling an extreme amount of electricity from your cultivation. And then, I mean, also, it's a very small footprint.
So it can roll inside of your hallways into the doors and be a very plug and play solution.
@12:54 - Dai Truong (Arlington Capital Advisors)
And then, you know, you guys recently launched a consulting solution. So here's how that's going.
@13:00 - Jill Ellsworth (Willow Industries)
you give us an. There is a lot of interest around it, kind of going back to my previous point of, you know, a lot of cultivators have struggled understanding mitigating and controlling contamination.
I mean, this is not something that they were really thinking about when they started, you know, legally cultivating. So what we do is in addition to our technology, we have a team of microbiologists that will go into your cultivation, give you a full facility assessment.
Giving you insight into where contamination is coming from, how can we fix your soil and air and water? How can we help mitigate cross contamination with your employees?
So we give you a full detailed report to help you start, you know, focusing upstream and eliminating contamination, ensuring that our technology is very successful on the back end.
And the response has been huge because it's kind of a black hole and there's not a lot of knowledge around it.
So that's what we're trying to do, is provide that education and knowledge.
@14:03 - Dai Truong (Arlington Capital Advisors)
And on that point, you guys do a great job of being at industry events. What's sort of been some of the more effective business development activities that the company has taken?
@14:14 - Jill Ellsworth (Willow Industries)
I mean, the trade shows are great for us because the cultivators can talk to our team. You know, there's a lot of misinformation out there, misinformation about ozone, about willow, about decontamination.
So we get to get in front of you. You get to see the system. You can touch it. You get to talk to our team and kind of let those misconceptions lie.
And then, you know, we partner. We do a lot of partnering with different companies in the space and we're actually working on, you know, more of a software partnership play in the future and how that's going to integrate within our system and integrate within the whole supply chain and what the growth of cannabis, clean cannabis looks like in the future.
@15:00 - Dai Truong (Arlington Capital Advisors)
I guess I should ask the question on the business model as well. In order to use your product, you kind of have two different offering. One that's much larger, higher capacity, and one that's smaller. If you're a customer, do you lease that? Do you buy that? then what's sort of the continuing revenue screen for you guys with a customer?
@15:23 - Jill Ellsworth (Willow Industries)
So right now, we offer a lease revenue model. So the cultivator will sign a one to three year term depending on their needs.
And then typically it's a monthly payment. Now with that comes all of the maintenance, access to our science team to really understand what's going on in the cultivation.
We have a strong customer service, customer success, excuse me, a customer success team. That's there to help you through any problems that may arise.
But it's a full service lease model.
@15:59 - Dai Truong (Arlington Capital Advisors)
Got it. Nice of you to start with that just because it's then not cost prohibitive for our cultivators to deploy your solution. It's not a huge CapEx investment at the outset.
@16:09 - Jill Ellsworth (Willow Industries)
Yeah, we felt like it's an easy way to get technology in very quickly and start utilizing it, start passing tests, start really understanding what's happening with the holistic, you know, holistic piece of your organization and your cultivation.
So I would say the low upfront cost is, you know, one of the biggest benefits.
@16:33 - Dai Truong (Arlington Capital Advisors)
And then on that point with sort of an emerging European scene, you know, are you guys operating out of the US today or are you looking into operating out of the US and how is the Canvas cultivation scene in some of these other countries?
@16:47 - Jill Ellsworth (Willow Industries)
So we currently operate in Australia. We have a partner there, but we, you know, we're starting to slowly expand into Europe into the further international market.
What's been really interesting is in the international market, typically you are required to irradiate your flower. And I was just at ICBC in Berlin and it's really interesting to hear from the international cultivators that they're looking for an alternative to irradiation.
And so, you know, I think there's been some excitement and interest around our technology there. So we are currently working on getting our EU GMP certification so that we can, you know, officially play in that market.
But I think there's, you know, I think there's a need to treat flower with something other than irradiation.
@17:41 - Dai Truong (Arlington Capital Advisors)
Yeah, that makes sense. And then especially if the regulations are in your favor, that should be really good from a business development and customer acquisition standpoint.
@17:50 - Jill Ellsworth (Willow Industries)
Yeah, I mean, it's so interesting to see, you know, how international operators, they're required to have strict cultivation operations.
@18:19 - Dai Truong (Arlington Capital Advisors)
And I think that's great to see.
@18:24 - Jill Ellsworth (Willow Industries)
thing in that's a great thing great think thing Yeah. And more organic solutions or requirements that may favor Willow. Well, I mean, in Ag and also in Food and Bev, kill steps are required. So you don't get the choice.
You don't get the choice to decide if you want to have one or not. That's required, especially in food and beverage.
So there's many options in the food and beverage industry as to what you can use. And if you want to be considered an organic producer,
Of a CPG product, you can't use certain types of kill-step methods. You couldn't use radiation if you want to be considered organic.
So that's why, you know, looking at the cold-pressed juice category, they typically use high-pressure pasteurization or flash pasteurization. And I think that's going to look very similar in cannabis.
Sure, there's going to be a light approach, a light touch organic. You're going to want to move away from some of these more intensive treatment methods.
@19:39 - Dai Truong (Arlington Capital Advisors)
And yeah, we've seen some ancillary or technology cannabis companies kind of enter other verticals where their solutions are logical, whether it be food and bev or alcohol or ag. Is that something that you guys are exploring in what you just mentioned to me about kill-step in food and beverage?
@19:59 - Jill Ellsworth (Willow Industries)
We would love that. And that is something we have been actively exploring recently, is how can we utilize our ozone technology in different verticals, in food and beverage?
Ozone's already being used. I mean, most of the bottled water that you drink is ozonated. A lot of the fruits and vegetables are washed with ozonated water.
And so, you know, for us, it's because it's another opportunity to be really innovative.
@20:39 - Dai Truong (Arlington Capital Advisors)
Yeah, and that kind of. Different points, what got investors excited about putting money into the company?
@20:57 - Jill Ellsworth (Willow Industries)
Well, when we started the business in 2015. We were fully self-funded. And then in the beginning, we actually started selling our systems because for us, being so small, leasing didn't work.
So we were able to sell the systems. We actually became profitable fairly quickly. And then knew that we were going to have to scale.
Scale this company to be competitive in the industry. So we raised a convertible note round in April of 2019, brought in cannabis VCs who have been amazingly supportive.
But they saw the vision and they saw the vision of the future. Because we built this company for the future.
Future compliance. But we already knew what was going to happen based on everything that I saw in my personal experience in food and beverage.
So that convertible note round of $2 million really helped us ramp. And that's when we pivoted to the lease model.
So Bruce, really crazy in those first, you know, 2019, 2020, 2020. And then we've raised our series A in 2022, February of 2022.
We raised $2 million, had some of our current, our original investors recapitalize the company and then brought in a bunch of new ones that again believe in the future of this.
They believe in the future of compliance of safe products of consumer safety. And they've been incredibly supportive since then.
@22:29 - Dai Truong (Arlington Capital Advisors)
And in sort of given the environment, we're in, you know, Canvas cap raises are tough. A lot of struggles across the industry.
How are you doing things differently now than let's say, you know, two or three years ago, as it relates to sort of running your company where challenges you're seeing with your customers and just the general ecosystem.
@22:48 - Jill Ellsworth (Willow Industries)
Well, our MRR has grown pretty significantly over the many years that we've been doing our leasing. So that's been a huge value add to the growth of the
Our yearly revenue and our year-over-year growth. And then, we've also been very scrappy. Regardless of us raising venture capital money, we've still continued to run this as like a scrappy startup.
And so we still have a really great runway still. Our burn is really low. watch our spending to a T.
We don't hire unnecessarily. We actually took our time. I think this is definitely a benefit to what we saw in the industry, is that we slow-rolled our hiring of executives and growth within all departments.
So we didn't have a lot of redundancy and we don't have a lot of redundancy. And I would say that, sure, a lease model in this environment right now is challenging.
Getting people to pay is challenging. But they see the value, the value of having this technology. And so... It's not that hard of a conversation.
We're like, you owe us money.
@24:05 - Dai Truong (Arlington Capital Advisors)
Yeah, because if you're not, I mean, this is like a conversation I've had with friends who put money into some of these campus lab testing company and they think that's actually one of things that, you know, even in a tough environment like right now, it doesn't go away because you certainly need to test your products.
So you guys are right there along with testing, right, in terms of killing contaminants and actually getting products to market.
So while they're there are things that may be lower on the stack of things that should get paid.
@24:35 - Jill Ellsworth (Willow Industries)
You guys are certainly higher up there, right? It's definitely, this technology is definitely a “need to have.” I mean, you don't have to have it right now, but you need to have it.
You need to be ensuring that you're passing your testing. You're putting out clean, safe products and you're preventing recalls.
And I know you and I talked about that in the past about, you know, the many recalls that we see super frequently.
And how, you know, cultivators can. And like, prevent that. Stop that pattern.
@25:04 - Dai Truong (Arlington Capital Advisors)
Yeah, I want to ask you this earlier. It's good you brought this back up again. So from a contaminant standpoint, if you guys sort of help after the fact and things have been found, can you help with remediation where that product bank can go and actually be sold versus destroyed?
How does that work when contaminants are found?
@25:29 - Jill Ellsworth (Willow Industries)
Well, so like I mentioned, our product was originally developed as a kill stuff, but that requires prevention. You know, that requires thinking about this stuff preventatively.
Whereas the industry wasn't there for prevention seven years ago, and it's still still not really there. Although we are starting to see our adoption of utilizing our technology as a prevention measure.
But yet our technology can be used for remediation. So if you're you fail a test, you can run it in our
And depending on the type of contamination and the level of contamination, you typically will pass your testing and you can get that product into the market.
So you don't have to destroy it because there's no reason cultivators should be destroying flour unless it's too far gone because that's not going to benefit the growth of our industry.
There's innovation and technology available to prevent that and, you know, there are many that use it that way.
@26:30 - Dai Truong (Arlington Capital Advisors)
So I got to imagine that's a pretty good way for you guys to sell into potential customers, right? So let's say they're not a customer, they go through testing and I'm sure you have conversations or even, you know, somewhat partnerships with some of these testing labs.
They find mold or aspergillus. They use willow as sort of a remediation technique and then, you know, I'm making up the numbers, but rather than, you know, wasting $10,000 of flour, you pay Willow, you recover it and your net revenue is like $8,000 now. So you've at least saved, you know, money in terms of products and preservation of products. So isn't that like a larger growing revenue for you?
@27:15 - Jill Ellsworth (Willow Industries)
Absolutely. I mean, you think of it as this pants on fire problem. A lot of the inbounds we get, like, oh my gosh, I just failed a test.
I don't know what to do. I've never failed a test before. I'm in a new state. We just started having tests.
Like, what do I do? And so we can walk you through the process. But yes, we can get you a machine.
You can treat the product that failed. You can pass your test and get that product into retail. So we really had to pivot with where the industry was at that point.
And really still is. It's like that, especially in Oregon. Cultivators, they're failing tests because they are just now having to test for us for Jill us.
So how can we help you? How can we get you on the right path? not going to think about prevention right now.
Start putting in mitigating technology, mitigating procedures to ensure the future success of your cultivation.
@28:08 - Dai Truong (Arlington Capital Advisors)
Yep, that makes sense, especially with the headlines. This is why I wanted to catch up with you, get you in the podcast, talk more about this because I've just been seeing it more every week than I did in prior years.
So it seems like it's an interesting inflection point with where some of these state regulations for testing have gotten more mature.
Even in a very mature market like we're in.
@28:30 - Jill Ellsworth (Willow Industries)
I agree. And I will say it's been interesting to see the reticence to testing, to testing for a very dangerous mold spore, like Aspergillus.
I think a lot of the pushback is, well, we haven't seen anyone die from Aspergillus, so I don't know why I have to test through this.
Well, yeah, maybe no one's died from it yet, although there was a confirmed case in California in 2000. The fact of the matter is, we do not want to be an industry where someone does die from that because we weren't taking proactive and preventative measures.
Can you imagine if this happened in the food industry and sure recalls happen in food. I mean, you know, it's hard to prevent and mitigate all contamination.
But like if you look at when pasteurization was invented, the milk farmers weren't saying, oh my gosh, I can't believe I have to do this.
No, they were saying, thank God we have technology to ensure that we're not going to kill anybody, that our product is going to stay safe, fresher.
And that we have an opportunity to sell all of our products.
@29:46 - Dai Truong (Arlington Capital Advisors)
Yeah, like I would, you know, I think it's probably just a cost and a margin and you know, dollars are being squeezed left and right in this industry right now.
But just like what's going on in Oregon, you know, the companies mentioned are more recognizable.
@30:21 - Jill Ellsworth (Willow Industries)
Well, I'm listening to your point about the margins being squeezed and now it's more more costs on top of more costs.
And we already know that that's like a prolific issue in the industry. So we certainly sympathize with that. But again, we can't, we can't, and we just can't mess with consumer safety.
And so I do hope that at some point the thought process and like the conversation around Oregon starts to change.
@30:54 - Dai Truong (Arlington Capital Advisors)
But I just don't know. It's very, it's very fiery right now. A lot of the newspapers that are interviewing some operators in Oregon, there's definitely pushbacks about how it's going to needlessly drive up the cost.
It's going to wreak havoc on farms. It's going to make it impossible for consumers to buy organic cannabis. So there's all this fear from operators today that, you know, if you're in Oregon, you're probably feeling it already from a price compression, you know, kind of oversupply standpoint, you've been facing these issues for a few years.
And now here comes, you know, that we need to do remediation and Aspergillus, right?
@31:33 - Jill Ellsworth (Willow Industries)
So it's just adding more to their plate. It's a beast. Testing is a beast. Tasting these tests is incredibly hard.
And, you know, that's what I saw seven years ago. I saw this. I saw all of this. And I knew that this was going to be a huge problem in the industry.
So, you know, that's why we came up with a solution. But it's, I mean, it will be interesting to see, like, you know, if we get federal legalization,
What, who's going to step in and have, you know, kind of a blanket mandate across the US? Are we all going to be required to have GMP?
Because my gosh, that's going to be hard. Especially as a small business. I mean, when I had to input a Hazard Analysis and Critical Control Points (HACCP) plan and a kill step for my cold press use company that was super small, you know, so hard.
But it was just, you know, if I wanted to scale and grow, that was something that I just had to do.
@32:26 - Dai Truong (Arlington Capital Advisors)
So, given that you have this interesting sort of food and bev experience before you got to Cannabis, you know, myself and a lot of other people, we make comparisons of Cannabis to other industries.
Like, is that kind of your parallel industry that you try and compare Cannabis to in terms of how the industry will look as it matures?
Yeah. So I always compare it to beer, right? So you have your large companies, like, Anheuser-Busch and Coors.
You have some larger craft beer that are national and call it in 40+ states. Given your background, how do you think this industry plays out in terms of the mix and sizes of companies?
@33:08 - Jill Ellsworth (Willow Industries)
I do, yes, I do make a very strong parallel between food and beverage. And so do I compare huge large players to conglomerates, food conglomerates across the country that we see right now?
Absolutely. And then you have like my cold-pressed juice company was a small, cold-craft cold-pressed juice company. So, you know, seeing the micro-businesses and the ones the craft growers, like I really empathize with them because I know what that feels like.
But I do see, you know, very similar rollouts of regulations that we saw in food happen because it's a consumable product.
And we can't, like I said, we cannot mess with consumer safety. And so I do think that regulations will be strict and swift more so than they are.
Now, and there will be an incredible amount of oversight on that when and, you know, when we get, I won't say it.
@34:07 - Dai Truong (Arlington Capital Advisors)
I will say when we get federal legalization. Oh, yeah, no, it's, it's definitely when not if, but the when keeps moving.
@34:15 - Jill Ellsworth (Willow Industries)
I know.
@34:17 - Dai Truong (Arlington Capital Advisors)
when? Yeah, it's, I, I stopped trying to predict because you're just going to be wrong. So it's going to happen. You just don't know when.
https://cannabisindustryjournal.com/feature_article/cannabis-lab-testing-problems-continue-nationwide/