4-T Holdings - Jeff Yarosz & Eric Kirkland
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Jeff Yarosz & Eric Kirkland: [00:00:24] We're not just depending on the harvest in October or November to create revenue for this year we're gonna create revenue much much earlier because we are gonna have seeds ready. That will be purchased and we also have a clone program.
Dan Humiston: [00:00:47] From MJBull's media it's the raising cannabis capital show.
Dan Humiston: [00:00:55] I'm Dan Humiston and on today's show how this Oregon hemp farm is filling to demand for CBD by increasing their facility to eleven hundred acres.
Dan Humiston: [00:01:11] Today in Raising cannabis capital we are joined by Jeffrey Yarosz CEO of 4-tholdings in Eric Kirkland the CFO and general counsel.
Jeff Yarosz & Eric Kirkland: [00:01:21] Guys welcome to the show. Thanks. Thanks for having us. Well it's fun to have two people on the show. This is crazy but let's jump right into it with the passing of the farm bill at the end of 2018 which effectively made hemp legal.
Dan Humiston: [00:01:34] It's created this unprecedented demand for hemp I mean farmers can't grow it fast enough and 40 holdings is in Oregon. And Jeffrey you've been growing home for a couple of years already. So unlike a lot of the farmers that are jumping in now you're in a state it was already legal. You're already growing it so you've got a huge jump on the field.
Jeff Yarosz & Eric Kirkland: [00:01:56] Yes we feel that we all the legalization I mean for quite a while now. And with that we were able to put together a excellent team on the business side and an excellent team on the cannabis side to really prepare for this year and next year which we feel are going to be really great years for our company.
Jeff Yarosz & Eric Kirkland: [00:02:20] And you talk a little bit about your team you don't mind if I could drop in on that one because I have seen it develop and we started talking 6 7 8 months ago and he was telling me here is the team that he's put together and why. And when I saw and he described the team I was pretty blown away. And I think that is the real big distinguishing point. I mean it's more than just the equipment it's more than just the genetics it's just more than just finding the best farmland and all the other things that you have to do well it's really having a team that can execute that scale takes a village and he's put together a really great team.
Dan Humiston: [00:02:55] The one ingredient sometimes is lacking is the talent that's run and you've done it with 40 acres for a few years now and now it's not just planning it is which is super difficult it's harvesting it. This is a different craft and really people that have experience doing it they're not alive any longer you know because this hasn't been there for a long time.
Jeff Yarosz & Eric Kirkland: [00:03:15] That's true. We've really put a lot of R and D in to mechanize ing the planning process. We have custom seating that was University tested from our genetics are really tailored to the area we're going to get. There's gonna be a lot of people trying to grow this when they hear how much it's worth an acre you know a lot of them don't know that it costs about 20000 acres to twenty thousand dollars an acre to do it but you know they they're going to hear the margin on that which is unbelievable. And the thing is is are our genetic our climate ties for the area we're growing. If you took our seed and tried to grow them in Virginia or Florida or taxes or North Dakota you wouldn't get the same yield you wouldn't get the same result. We have custom transplanting from a company out of Italy and we're actually have a custom harvesting company. There's going to be running about three different prototypes on our early crop. You get it right. So the big harvest to really be able to grab the bugs and preserve them. And up until this point there has not been anything on the market that can really do that. They're taking combines they're going out there cutting them by hand and we're just not going to do it yet because we're doing a lot of acreage and you just can not do it that well that comes from experience and it's coming to a head here.
Dan Humiston: [00:04:41] But you mentioned earlier just how insanely profitable this is. But just give our listeners an idea of what biomass right now.
Jeff Yarosz & Eric Kirkland: [00:04:49] First I'll explain to them what biomass is and then like what what you can expect in the value of this biomass from most of the industry is going to be the whole plant the whole plant though does not contain can't avoid this you know in the most popular one being CBD the CBD is mostly concentrated in the plot of the plant. We are going to be concentrating on harvesting just the buds so we get a higher concentration of CBD. Why is it important to get a higher concentration of CBD because CBD is priced by percentage point. So in other words if I were to get 14 percentage points I'd get 350 times 14 which would be.
Dan Humiston: [00:05:34] That's OK. I get the picture yeah.
Dan Humiston: [00:05:43] Just a quick reminder that you can view each of the company's confidential pitch decks including how much they're raising and the terms of their deals on the MJ Bowles Web site. Go to MJ Bowles dot com to find the cannabis investment opportunity that's right for you.
Jeff Yarosz & Eric Kirkland: [00:06:01] One thing that I'm seeing is that there's gonna be a constraint in the amount of extraction that's going to be available in the marketplace just because the cannabis marijuana industry is something that people kind of gauge in pounds. You know we're talking about tons here. So the equipment is going to be different. That does the extraction and these extractors if you are extracting 7 percent biomass you're going to have to run it through the same process to yield 7 percent as if you started with 20 percent biomass. So you're going to get three times roughly three times more with the same amount of effort. So the extractors don't want to do this whole plant. The focus that Jeffrey has died is saying well let's just take the but it's going to be very valuable because of how easy and how productive it will be to extract.
Dan Humiston: [00:06:52] And Jeffrey just ballpark eleven thousand acres. How many pounds are we talking here.
Jeff Yarosz & Eric Kirkland: [00:06:57] We're talking anywhere between 2000 to 4000 pounds of dry biomass per acre. Holy cow. That's crazy and that's not your. You do not get those yields and a lot of other places. But in southern Oregon that's par for the course.
Dan Humiston: [00:07:12] So you've done your homework and you know it and those aren't your only income streams. You have potential to sell the seeds that you guys have created. And you also can sell the flour. Explain those two channels and give us an idea and a forecast from what they can expect from those two channels.
Jeff Yarosz & Eric Kirkland: [00:07:28] Sure. So we have a number of seed projects currently but we have what are called feminised days. That just means that the jury to see their female because you want to plant emails when you're going for biomass because they produce the larger bugs in the higher yield. We have a seminar save project. We have a regular seed project. Our first term through those projects we're expecting two pound disseminates seed feminized seeds are going for twenty eight thousand dollars a pound. They are two regular seed projects. We're expecting about 8 million from our first strand and about fifty thousand pounds from our other strand regular seeds are still selling for between 2000 to 10000 dollars a pound. We're not just depending on the harvest in October or November to create revenue for this year we're going to create revenue. Much much earlier because we are going to have seeds ready. That will be purchased and we also have a clone program selling between five dollars to fifteen dollars a piece. You can run the math on all those numbers and it's pretty eye popping.
Dan Humiston: [00:08:43] I stopped keeping count Lego because they said I never said that. Oh my gosh congratulations. It is so exciting. But see the problem right now though is that this is moving so fast. You do not take your time on this one. I think I read some place. Correct me if I'm wrong but you're going to start planting in a couple weeks. Is that the case next week.
Dan Humiston: [00:09:05] Oh my gosh as you mentioned twenty thousand dollars per acre This is not an inexpensive venture to get started but the other side of this is so profitable. What are you doing right now to raise capital maybe give her give her listeners an idea how they can get involved.
Jeff Yarosz & Eric Kirkland: [00:09:21] You know Jeffrey maybe I'll drop in on this one. We've already raised quite a bit of money to date for all the equipment is being paid for either by the principles or money that has come in the seeds repaid for the clones or paid for. We're looking at the end of the year or leading the capital to do the harvest to do the curing and the different things and to take advantage of some of the opportunities that just come along.
Dan Humiston: [00:09:43] So how much are you raising right now.
Jeff Yarosz & Eric Kirkland: [00:09:45] The initial offering is 10. I think that we're at a point we're going to close it out with about two more million dollars is where we want to close the offering.
Jeff Yarosz & Eric Kirkland: [00:09:53] We're looking at you know investors at about 200000 is a minimum. We've made a few exceptions as the people have some strategic value beyond the capital budget but we're looking about you know for five to 10 good investors and a two to four hundred thousand dollar range to come in and participate.
Dan Humiston: [00:10:13] It sounds like a really good deal I can imagine that it's going to sit for very long.
Jeff Yarosz & Eric Kirkland: [00:10:17] You know just to jump in on that point that under this particular offering if it goes toward projection you would have a return of your capital probably within six months.
Dan Humiston: [00:10:26] Well that's unheard of. That's why I'm saying that's why I think it's such a unique deal. You have two things going.
Dan Humiston: [00:10:31] One is that the big one is that you have a small window because in five years from now probably the opportunity won't be there probably in two years this opportunity won't be there for the next two years. You guys are going to be in a great position.
Jeff Yarosz & Eric Kirkland: [00:10:46] I really do agree with that because you know the equipment is not out there so there's no companies that can really scale big acreage but within a couple of years that problem will be solved there will be a big increase in the amount of it being cultivated. I tell you. The explosion of the industry no one including me could foresee how big CBD is getting.
Jeff Yarosz & Eric Kirkland: [00:11:07] Nobody solved the broad base use of CBD is going to be in toothpaste and pancake mix and gummies and tinctures and lotions and higher tonics. I mean it is going to be ubiquitous.
Dan Humiston: [00:11:22] You're not the first person who said it in a. I mean I just seen it explode over the last six or seven years so when we were speaking with Jeffrey barrows and Eric Kirkland from 40 holdings and we have all of their contact information and investor information and the MJ bulls website Jeff and Eric thanks for being on the show today.
Dan Humiston: [00:11:44] Thanks for listening to raising cannabis capital to learn more about today's guest or to become a guest. Visit our Web site at MJbulls dot com. Today's show is produced by MJ bulls media with original music produced by Jamie Humiston. I'm Dan Humiston and you've been listening to the raising cannabis capital podcast.
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