Conception Nurseries - Kevin Brooks

Dan Humiston: [00:00:00] Today's show is brought to you by a new podcast produced by MJBulls Media called the Deadhead Cannabis Show. It combines great past and present Cannabis music with a deep dive into the social ramification of legalization of cannabis. Download the Deadhead Cannabis show each week from MJ Bulls dot com. Itunes are Spotify and join Cannabis CPA Jim Marty and Cannabis attorney Larry Micshkin for classic stories from their over 150 Grateful Dead concerts and awesome insight into the future of the Cannabis industry.

 

Kevin Brooks: [00:00:33] seed round back in February oversubscribed. For that, we launched our organ facility, which is largely are indeed with some slow commercial sales. We are under construction in California, which will be our first major full scale production facility. We expect to do well north of 5 million gallons a year out of their.

 

Dan Humiston: [00:00:58] From MJBulls's media, it's the Raising Cannabis Capital show. I'm Dan Humiston. And on today's show, how this company identified a Cannabis grow facility bottleneck long before it even existed and created a solution to solve it when it did.

 

Dan Humiston: [00:01:22] Today in Raising Cannabis Capital, we are joined by Kevin Brooks from Conception Nursery. Kevin, welcome to the show.

 

Kevin Brooks: [00:01:31] Thank you for having me to be here.

 

Dan Humiston: [00:01:33] It's a cool stuff. Well, I was prepared for this interview. I kept thinking myself. This is one of those ideas that you really need to be able to see around corners, actually, to recognize that at least you did need to see around corners, because probably when you started this, it probably wasn't super obvious that the industry was going to grow as fast as it did the needs of growers. We're going to come to the forefront this quickly. I guess before we start talking about what conception nursery does it be helpful for me? And I know it'd be helpful for a lot of our listeners if you just give us a brief education about growth facilities and specifically talk about mom room and genetics.

 

Kevin Brooks: [00:02:11] Sure, I'm happy to. So one of the challenges that we identified very early on is consistency. We would have five rooms where we grew in room one, for example, we'd have a harvest that would come out and we'd be 300 pounds in the next harvest. It would be two hundred and sixty five pounds. And then the next harvest, it's 315 pounds. The only thing consistent that we've found in our harvest was that it was inconsistent. We looked at the light. We looked at feeding the nutrients, the water schedule, the water, cleanliness, every single variable we could. And really what it came back to, these inconsistencies started really in the basic supply chain. And that basic supply chain comes from what's called a mom room. There are no real candidate nursery programs. So how do you get genetics? How do people get plants in their facilities if you can't legally go and buy them? You go out and you know somebody in, you know, a friend of a friend or a guy and you deliver cash and they give you what's called cuts or baby clones. And those baby clones, you grow up to be moms and those moms produce branches and you cut those branches and those branches then go into rooms that become flour and candidates. And the mom room really doesn't exist anywhere else in any other agriculture. It's because of that nature of that kind of great market, black market history that Cannabis has a small medium exists.

 

Dan Humiston: [00:03:28] And it doesn't really produce any revenue, just takes up a lot of space. And I assume it's a lot of work to manage a mom room.

 

Kevin Brooks: [00:03:35] That's right. It's a tremendous cost center. So you have specialty nutrient, specialty employees, specialty equipments and lot of cases, especially in indoor grows, it's very expensive real estate. So part of our business model is helping coordinators turn that call center into a profit center. So if you can outsource that mom room, just typical in other agriculture environments and turn it into a room where you're producing flour and you just took one of your biggest cost centers and made a profit center.

 

Dan Humiston: [00:04:00] Okay. And that's where conception nursery comes in. Like I said before, you saw around the corner before anybody realized that this was gonna be a problem. You guys already filled it.

 

Kevin Brooks: [00:04:11] Yeah, we did see it a while ago. It's a lot of reasons why you're seeing some of the market correction in the Canadian stock exchanges. These big cultivation facilities are struggling to meet their projections and performance largely due to the basic supply chain and these mom rooms not producing a consistent quality product.

 

Dan Humiston: [00:04:26] Okay. You know, one thing that is confusing to me and I know it's confusing to a lot of people when you say the name or the genetic, it doesn't necessarily mean it's going to have the same output. There's a lot of inconsistency here. How do you guys ensure the continuity is the same within the genetic?

 

Kevin Brooks: [00:04:46] Great question. There's two answers to this. When you talk about the meaning of the genetic, keep in mind that the genetics are registered, they aren't trademarked. So if I go out and buy blueberry, which is a very popular strain, if I buy it from one cultivator and I buy it from another cultivator, they can be wildly different products because it's not regulated, because it's not registered anywhere.

 

Kevin Brooks: [00:05:07] There's one group that we are aware of that has a certification process that certifies this is the actual genetics you're getting and that's files. And we have an exclusive with them. And they're our partners and we do quite a bit of work. You know, they can actually certify that what you're buying is what you're buying. The second part of that question is, you know, how do I create consistency? How do I know I'm getting the same version over and over again? Well, with lunch, you get slightly different versions still come from different moms. Over time, you'll start to see kind of a genetic drift where cut enough from the mom and it starts producing a slightly different genetics when you produce plants to tissue culture. What we do is we find the very best version we can, whatever strain that we're on, whatever genetic. And then we take that down to the cell level. We can clean out any of the systemic problems of that plant and then we produce it over and over again through a sample age. It starts in a petri dish and we can grow it in slices many times, but it's the exact same product every single time.

 

Kevin Brooks: [00:06:04] Okay. And the second biggest thing I would say would probably be contaminants. I know that owners of growers are fanatic because it can kill their entire company if something goes wrong with pest or disease. How do you make sure that your plants are pest and disease free?

 

Kevin Brooks: [00:06:20] You know, I think when we. Talk about seen around the corner and you kind of mentioned things that are coming up. I can tell you that virtually every cult leader, including myself, has experience at one time or another is testing disease. And so when you think about where a person's disease typically comes from, we look at not only is it is the mom term, the tremendous cost center, but we also see this as a huge risk. You've got people coming in and out of there. They may or may not be properly cleaned or disinfected and they bring things in on their clothing or their hair. Most of the types of disease start from their mom and then carry through the rest the facility. One of the things you get from tissue culture, it comes from a clean room with a lab environment, a sterile environment. There's no pests or disease. It's it's essentially you're getting the cleanest product that you could possibly imagine.

 

Dan Humiston: [00:07:06] Again, I know that's a big thing. And I I suspect it probably makes it better if you don't have room just because, like you said, that's a great source of contamination.

 

Dan Humiston: [00:07:21] I want to take a quick break to think all of our Raising Cannabis Capital listeners and to remind you that you can support the show by subscribing to MJBulls premium. It's only four dollars and ninety nine cents per month and you gain access to all previous Raising Cannabis Capital episodes as well as all other MJBulls produced podcast and exclusive content, including companies, investor pitch decks, good MJ bowls, dot.com and enter promo code raising to get your first month free jumping ahead.

 

Dan Humiston: [00:07:52] I mean, I'm thinking if I'm a grow facility, two things come to mind when I think about outsourcing. One is I have some sort of proprietary genetics that I don't really want the world to have. I'd be my first concern and into my second son concern would be I want to make sure that if I need it, you have the inventory is there, because now if I don't have a mom room kind of taking a little bit of a gamble, because if I need inventory and it's not available, I'm sunk. So maybe you can walk us through how you protect us on both of those sides.

 

Kevin Brooks: [00:08:22] So I think there's two different deliverables that we provide our customer base. Like you said, there's the generic kind of workhorse stream that we see out of the market that every grower has access to and the country's open source genetics. One of the things that we are doing with these plants is we're looking for very specific genetic traits that are pester disease resilience or drought resilience. We have plants that have been essentially identified as resilient or resistant to the stranger, those issues. So genetics that are our past disease or drought resistant or a larger yield in a shorter harvest time. So you can get more terms per year, more harvests per year. And those are our elite genetics that we are going to see in the market. Like you said, we have customers that come to us and say, hey, we have these five or six proprietary genetics. We would like you to take these down. Tissue culture them and then provide us with as many cuts or as many clones as we want throughout the year and store them in the same place. So as long as we have the proper lead time, we can produce as many cuttings as you like, as many clothes as you like or whatever else.

 

Dan Humiston: [00:09:20] Okay. I mean, I think that's the answer that I'd want to hear. But so moving forward, what's next for you? Where do we go from here?

 

Kevin Brooks: [00:09:28] Yeah, we close our seed round back in February, oversubscribed for that. We launched our Oregon facility, which is largely are indeed with some small commercial sales. We are under construction in California, which will be our first major full scale production facility. We expect to do well north of 5 million. Clumsy. You're out of there. I'm actually currently in Massachusetts. We're looking at another facility out here. So for us, it's about very aggressive growth. We think that there is a wide open market right now and in an execution.

 

Kevin Brooks: [00:09:59] I agree with you. Everyone in group would agree with you. This is a land grab right now. You mentioned that you close your seed round in the spring. Are there or will there be opportunities for investors to participate in?

 

Kevin Brooks: [00:10:10] Oh, most definitely. We just picked up our series a week and a half ago. Certainly anyone is welcome to jump on our Web site choosing e-mail. And I'm happy to kind of run them through the investment thesis and financials.

 

Dan Humiston: [00:10:22] We'll also have all of Kevin's information on our Web site, MJBulls Web site, and any investor information will be on that Web site. So. Well, Kevin, good stuff.

 

Dan Humiston: [00:10:33] Good luck with this.

 

Kevin Brooks: [00:10:33] Wonderful. Thank you so much. Thanks for having me. Pleasure speaking to you.

 

Dan Humiston: [00:10:37] Thanks for listening to Raising Cannabis Capital. To learn more about today's guest, do become a guest. Visit our Web site at MJBulls.com. Today's show is produced by MJBulls Media with original music produced in part by Jamie Humiston. I'm Dan Humiston and you've been listening to the Raising Cannabis Capital podcast.

 

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Dan Humiston