020 Fog City Farms - Roots in the Past, Flowers of the Future Pt. 2

00:02 - VO (Host)

You're listening to Cultivation Elevated, hosted by Michael Williamson, where we discuss vertical farming in the future of cannabis and food production. You'll be learning key insights for vertical farming success from leading industry operators, growers and executives. If you're a grower or owner looking to optimize your existing or new indoor cultivation facility, or anyone looking to cultivate more in less space, we've got you covered. Cultivation Elevated, sponsored by PipCorticulture.

00:32 - James Cunningham (Host)

What's up bro?

00:34 - Michael Williamson (Host)

Well, the first thing I'll say is it's nice to see you outside of the farm.

00:38 - James Cunningham (Host)

Yeah, likewise.

00:39 - Michael Williamson (Host)

And when you have a name like Fog City Farms, if you're not from this area, you don't really understand what that's all about.

00:47 - James Cunningham (Host)

Right.

00:48 - Michael Williamson (Host)

So now we're literally in the she's showing up for you today.

00:51 - James Cunningham (Host)

That's really. It's actually just been that type of year. The June Gloom has been real predominant this year and it's funny because it'll sit in this area of the county like extra heavy and I love it because it's just what I was raised with the sunny side of the county, the foggy side of the county, all of it, and there's something about this area that just is defined by it. But it does make it tough to farm outdoors. For sure, the greenhouse lessons are tough, but luckily you're indoors and you've been indoors for six years now.

01:25 - Michael Williamson (Host)

You were number one indoor vertical farm for Pip Horticulture and helped shape up most of the products that are available to farmers today, which I've seen all over the world now, and it all started and stemmed somehow from here to some degree, which is such a trip.

01:45 - James Cunningham (Host)

It was a perfect storm of experience ingenuity, networking, taking a realistic approach towards the California market and just farming in general, and just good old fashioned get it done, work hard, find solutions. And now we're here.

02:06 - Michael Williamson (Host)

I've been doing some podcasts over the last couple years now and I've been traveling with you and others, with Pip and all over the country and now starting to get into international travel. And there's no place like California. It is completely different. It's so deeply rooted in culture that it exudes into the facilities, it exudes into the brands. And now what I'm seeing when I travel and I just had this experience recently I was in Germany for a conference. In Berlin, a group came up to the Pip Horticulture booth and I said well, who are you, who are you with? And their brand was called Cali Mary. And I said, oh, that's an interesting name. What did you come up with that name for? And they said well, california cannabis is the best cannabis in the world and it's a pinnacle of cannabis. These people were not from California. I'm not sure if they had ever visited California, but they were smart enough to know that if you're trying to have a high end brand and associate yourself with the highest pinnacle of flower in the world, it's California.

03:07 - James Cunningham (Host)

Right. I mean, I'm a coal miner in a coal town. That's really the way I look at it. This is a plant that I'm super passionate about, and I enjoy the consumption of the plant on a daily basis and the medicinal effects that I personally use it for, but really it's also everything else that is provided for us from an industrial perspective the ability to find a way to pay a mortgage and raise a family in a place that is actually, as of I think last month, it is the most expensive county in the country to live, and there's this huge disproportionate spread of wealth and available careers in this town where it's like you either grow up on one side of the coin or the other, and so, for a lot of us, the looser regulations in our region contributed towards us being specialists in a way that other communities weren't able to achieve, because of proximity, because Prop 215 allowed us to gain an experience base and an understanding of farming generationally that a lot of other folks weren't able to do.

04:24 - Michael Williamson (Host)

That's the thing here is you have multiple generations. Like I was talking to your cousin earlier, he's a second gen and if you go to the East Coast states or these new emerging states, you have a lot of people that have spent time out here, maybe worked out here a little bit, but they don't have that deeply rooted culture and we're seeing that culture is becoming maybe one of the most important things for cannabis operations in terms of morale, productivity, loyalty with employment and stuff like that. A lot of people get excited about the cannabis industry and then they jump into it and if you're not from this and you're not cut from this cloth, you find out pretty quickly that it's pretty gruesome work and it's really challenging all the time and sometimes the rewards seem low compared to the amount of effort that's going in.

05:11 - James Cunningham (Host)

Totally. I think there was a huge underestimation of how difficult this is going to be in the space from all the incoming kind of opportunistic approaches towards the cannabis space. In the past five years, six years on California, where it's also not experienced in the actual industry locally, so many of these numbers are skewed. How much product is actually being consumed here? What type of product is actually being consumed here? What's going to happen and where is the timing in regards to federal legalization? And how do we build business models?

05:48

Taking all the stuff in the notebook, our model came from stocking the shelves and operating for over a decade before we went legal, and so we're like okay, we could build acres of greenhouse, but that stuff's not getting consumed in California on a regular basis.

06:07

It is during the best time of the year, but not on an annual basis. And what really drives the market here is high-end indoor product that you can harvest 365 days a year and get the same exact quality, doesn't matter if it's foggy or sunny or rainy outside, not to say that some of the best greenhouse weed isn't grown under this marine layer, because it is. But there's also a host of other issues you have to sort through that make it more difficult, but it's. I think that us having that cultural influence just within my family, even allowed us to assess our business model and say, okay, we're going to stay small, nimble, we're going to try to build a brand that is built upon us actually producing something and we're going to do good work and get known for that. And I think there was a lot of like oh, let's drown out the market or let's take losses, or let's work. This is going to be easy, whatever.

07:13 - Michael Williamson (Host)

Well and look at all the people that just said we're going to be the biggest and they said. There was this like delusion of if we're the biggest, we'll be the best. We'll have the most market share, but it's clear that being the biggest isn't the best and we've seen some of the biggest operators, typically MSOs, now exiting the state of California because they simply can't compete. They seem they clearly can compete better in new emerging markets with maybe a less sophisticated end user.

07:40

Sure but here in California. Like you either are or you are not.

07:44 - James Cunningham (Host)

Right and we've now witnessed.

07:46 - Michael Williamson (Host)

You were right in the middle of it, but a cleansing process. I don't know what the total number was of applications that did not get renewed last year, but it was well over a thousand, so a lot of people are hanging up their hat.

07:57 - James Cunningham (Host)

In some counties it's over 50% of the licenses.

08:01 - Michael Williamson (Host)

I don't see that as a bad thing. I don't think that just because you can get a license doesn't mean that you should be successful and thrive in this industry. Just because you throw a bunch of money at something doesn't guarantee success. I think people that know what they're doing and understand the value of genetics and how to really dial them in and push that plant to its maximum potential, those are the people that kind of deserve to play.

08:23 - James Cunningham (Host)

Totally and unfortunately not. Every one of those groups decided to build a brand or to diversify in certain ways. So they grow really good weed but weren't able to compete with 50 lamps or whatever. But that's a natural course of things as well in the market, and so we're like it's unfortunate because there are some unbelievable operators and some real industry history that has had to tap out as well. But I think that the groups that kind of built their models anticipating taking losses, trying to drown out the rest of the market. Those are the ones that we need to thin out or at least get them to get to a more realistic scale.

09:13 - Michael Williamson (Host)

Before a craft farmer was considered, or like a micro-license or something like that I would say it was considered. Oh you're just, you're not going to amount to much. But, now people are actually pushing more in that direction, realizing that's actually more of a sustainable model, and then we can grow it as it can grow instead of trying to force growth when it's just not quite there yet.

09:36 - James Cunningham (Host)

It's corny as it sounds, man Like, the love and the passion and the weight of it all definitely comes through in the farming process. It's not everybody dries their weed for 15 days. Not everybody hand trims all of their premier flour, especially in some of these emerging markets where you don't really need to in order to people are just happy to go to the store and buy weed.

10:01 - Michael Williamson (Host)

The first couple of years of an emerging market they'll buy anything. But the consumer becomes educated quickly and then all of a sudden they realize they've been being bamboozled for the last couple of years For sure. So I got to say everything. You guys, you can tell If you open a jar, you can feel the love in this jar, you can feel the hand trim, the selection, the quality control, the variety of nose on this stuff.

10:25 - James Cunningham (Host)

It's nice to be able to smell it as strongly as I do sitting right here with this breeze.

10:29 - Michael Williamson (Host)

With the wind blowing shirts.

10:31 - James Cunningham (Host)

It's like it's a. That's what we're all about. We're all about flavor. So, unfortunately, one of the things that was fairly unrealistic in the California market was that, coming up into the legalize, to the legal market, a lot of the buyers in the state and this is my own kind of opinion on what set this expectation. But they were essentially starting to knock down the growers based off of THC results. So this is pre-branding or anything right. You show up with a hundred different bags and they go okay, what's this one test that, what's this one test that, what's this one test that? And next thing, they're like knocking you on price based off of whatever THC result it is. And I'm like are you seeing this bag? This is beautiful and it smells amazing.

11:16

This is definitely this is not what you want to experience. Oh, test at 18%. We're going to need to, we're going to knock you down to this, and it would just. And all of a sudden you start seeing that translate into the branded market on the shelves Whereas you come in, you're talking to a buyer oh, this test at 24%. Sorry, we can't even put that on shelves. And we're like, wait, what Like? Don't you understand that some of the best genetics in the game are going to be testing sub 25%? You know what I mean. And and that there's also this whole other thing called the entourage effect involved here. That, like, definitely has an effect on this cerebral experience with consuming the product. And so, like for me, strawberry jam, this one came in at 26, which is Some people would be like oh, that's just about there yeah yeah, yeah.

12:06

But you will get lit smoking this strawberry jam and just as lit is something that tested 30 with less than 1% terpenes, yep. And so what people don't understand is that like when you're growing at a certain scale and it's not the knock scale growing because I know at some point that is going to be what it is, especially when the federal laws come down and California greenhouses are really pushing a lot of the product throughout the country, but not to say that there's not going to be huge indoors locally everywhere, because there will be a lot of the outdoor and greenhouse product I think at some point will probably come from here and it's difficult to process that amount of plant material and not degrade terpenes. You have to introduce some heat, you have to do certain things to mitigate other pathogen influences and so you start to sacrifice a little terpene, whereas for us it's like we keep it at 60 and 60 for as long as it takes to get exactly where it needs to be.

13:05 - Michael Williamson (Host)

Yeah, you're not on a schedule. It's like when the plants ready, we move it to the next stage.

13:09 - James Cunningham (Host)

And we can squeeze all of that plant material into a 15 by 15 room and that's a lot of plant material. But you could theoretically with the amount, with the small batch rotations that we have.

13:20 - Michael Williamson (Host)

But if you guys didn't have the experience that you had going into this, you wouldn't be able to do what you do in the spaces that you do it in the way that you do it in.

13:26

And so a lot of people get involved and they throw a lot of money at something and they think that, like, the equipment is going to solve the problems, or the technology is going to solve the problems, but like, at the end of the day, it's people like you, it's people like your family on your team, they're the ones that, like, are solving problems.

13:43 - James Cunningham (Host)

It's such a weird space because there were no rules or no models for any of us to develop by. So which is comes full circle to the whole PIP VAS conversation. That's like when we were first designing this thing. It was like there was nothing for us to model anything by Well, and it was for you Right.

14:02 - Michael Williamson (Host)

I made the greenhouse trays for me Right. You made VAS for you Right, because you were trying to solve a problem. I was trying to solve a problem 100%.

14:09

But, then we realized that our problem is going to be a lot of other people's problems, and we were early enough, timing wise, to have an opportunity to actually bring an ancillary product to market that helps growers to this day Totally. Hopefully it continues to help them for many, many years to come. Something on your label that I thought was interesting, and it's almost sad that it is on here Not that it's sad but it's sad that you have to state it because I don't think a lot of people know this.

14:34

But like you write on, your label says we grow our own. 100% of Fox City products are grown in our facilities. Right, and I don't think people realize when it comes to like when you say I'm building a real brand, like you have control over all of your brand, where a lot of these white label brands they're just open sourcing on the spot market and they're repackaging other stuff into their label and trying to create this brand with off of somebody else's work.

15:00

And typically there's a big difference, I think, with the product that you're going to wholesale out to the market and the product that you're going to put in your own jar with your own logo that's associated with your own name.

15:10 - James Cunningham (Host)

Totally A quality standpoint 100% man, and that's a really good point, and it and there was a time and it still continues to be that way, even though we're getting more and more established and which means we're vertically integrating more of our stuff and we become our own little kind of Fox City Island. But when you're competing with brands that are sourcing all their own product, there's almost just like this unfair advantage that comes from them being able to operate so lean in the early days of the California market and then because they get to just hammer people on price and then and fill their jars with triple A grade product. Because, like I said, there were a ton of really good producers that took that model and said you know what? We're just really good at what we do. We're going to run this high grade product and people are going to keep coming back to us. But then, when the market got reached its saturation point last year, most of those people failed, unfortunately, because there's a lot of really good operators but you just can't operate indoor at that scale, selling product to $800 a pound, which is not going to work.

16:20

And so now there's even less of us that grow our own product, and so we choose to highlight that and when I do my trainings around the state, I'm talking to bud tenders and I ask them do you know about the two different pieces that some brands source all their products and some people grow other product? And when you're buying our product, you're buying product that was literally grown by my cousins in the farm. I started this thing with my father-in-law and one of my best friends. When we first launched the distribution aspect of our company, my mom and dad were driving the weed around the state. You know what I mean Literally showing up to all the stores, do everybody?

16:56 - Michael Williamson (Host)

Delivered by mom.

16:57 - James Cunningham (Host)

it's pretty strong and it was it's what I always say, is it? Look, some of the best winemakers in the world Don't grow any grapes. So there's nothing wrong with that business model and someday that'll be a big piece of this. But there is something a little different when you show up to the family winery and they're they've taught themselves generationally how to grow this stuff. They're bringing Fresh new ideas with different people throughout the family and or their ancillary group, and they have to distribute it and they have to brand it and they have to do all these things. That are no easy task, and so I think that Grit in the heart and the soul of it really comes through in our product.

17:42 - Michael Williamson (Host)

It's what makes it special Versus just like another skew or another product. You've had to. You've had to create a lot of additional skews as well, just outside of flowers. So this is your top Cola's, your hand trim right but you have a lot of other, yeah, products as well.

17:59 - James Cunningham (Host)

So these are our foggies. Okay, this is actually an interesting one. This is the Santa Cruz dream cut, which almost became obsolete there at one point, but now it's like making a huge resurgence and we're really happy about that because, just because it produces really well and it doesn't mean that it's not unbelievable flavor profile and the so it'll get a handle for it.

18:22

Yeah, and it's undeniably Blue dream, which is something that's so cool with all these different hybrids. These days, they like oh, I can smell that. I said V, or I can smell this or that. It's like there's not really. It's unmistakable.

18:35 - Michael Williamson (Host)

There's nothing else that smells like that so. Sometimes blue dream is like there was a time where it got a bad rap, like most anything that gets overproduced, but then, just like the ebbs and flows, or almost like you almost look at like fashion, like things that become fashionable in the 80s, then recirculate 30 years later. Same thing's true here, like who's grown blue dream really well these days, right.

18:56 - James Cunningham (Host)

And it's a Santa Cruz.

18:58 - Michael Williamson (Host)

It's right here.

18:59 - James Cunningham (Host)

And so a lot of the haze based stuff is all from Santa Cruz, and so we're really looking forward to pushing a lot of that stuff in the near future. We've got a big Sir Holy crossed with our Pacific gas strain that is coming at some point soon and Some coastal muffins, which is an interesting genetic cross of some blueberry stuff in there, yeah totally, and that was all bread here.

19:25

And yeah, we've got other stuff that we're working on. We've got these shark bites that we're really excited about. These, true to like the fog city way, are really all about the flavor.

19:37 - Michael Williamson (Host)

So solvent, less raws and pre-roll rolled in bubble hash.

19:41 - James Cunningham (Host)

That's a little. That's a little different. That's a lot going on there, Okay but, exactly. It's a more refined Dusting right, so it's not the key. If it's the, we've got like straight ice water hash on there, so you've got, and then you've got rosin underneath that, so and then it's all Foggies, flour and those things, and so it's.

20:10 - Michael Williamson (Host)

Yeah, you're not getting cheap third-party flour somewhere, or or?

20:14 - James Cunningham (Host)

even we separate all our stems, like all the little granules that like they're like kind of potty pieces of the flour. We separate that stuff. This is these things are like a little work of art, each one of them. In Following up after these, we've got drips, we've got all kinds of stuff. You guys have been having fun. Yeah, it's, you've been pulling in the local region right. Totally.

20:36 - Michael Williamson (Host)

I remember the Manresa shark incident over here a few years ago. We're in a pretty sharky zone right now.

20:42 - James Cunningham (Host)

This is one of the sharkiest zones in the world right here, for sure, and for the most part sharks.

20:50

Usually a little nibble and just a pass by. I've been passed by a couple times, but it's a yeah, it's. These will chomp you. That's what we say get chomped is. So everything that we do is Regionally based and that's what fog city. From the very beginning it was like that not again not that there's anything wrong with the more can, eccentric, flora, centric, whatever type of brands but it was like how do we create something that like is representative of this region and the history here and like what we do? And at the Down in Marina they call that fog town. San Francisco is the og fog city. The central coast region is just known for the marine layer and we had a fog city og back in the day and one day I was just driving past the lookout point. I looked out up above the marine layer out of the whole thing and it was just like oh, fog city Farms just came to you in that moment.

21:51 - Michael Williamson (Host)

Huh Well, I love that you guys are like Undeniably yourselves, right? Everyone's trying to pretend or be something. I Know that a lot of this brand is you. What are some of the challenges of building a brand and then trying not to necessarily Be the brand, build something that's bigger than you? Sure? I always find that to be challenging, especially when you're this intimate with the product and you do really well on camera and you know taking time to educate bartenders. I've heard you've been traveling around the state quite a bit and I can't tell you how important that is. I'm so disappointed in my typical retail experience because of the lack of knowledge on the other side of the counter totally.

22:31 - James Cunningham (Host)

Yeah, you know, that's the thing it's. So what I always say is that we're more and I you know you can use alcohol as a comparison a lot. We're more on like the regional wine or like a Sierra Nevada beer space rather than a Budweiser right, it's, sierra Nevada is something that has Effectively branded the West Coast region and, coming from the Chico area, in the foothills underneath the Sierra Nevada's and the history behind all of it, and they might not be as big as a Budweiser, but it's still a gigantic brand and they've done very well, staying true to themselves, and so that that's the way that we look at it. We look at the history here, we look at the team that's doing this, we look at our practices and our experience and we try to bring in the whole cultural and like the regional kind of effect, because we're also lucky to be from here. So this is where a lot of people go for vacation, we live. It's a magical spot.

23:36 - Michael Williamson (Host)

Like I told you earlier, I lived just down the street from here. My second daughter was born in this neighborhood, or we so walk through this cliff all the time and there's really no other Landscape that's this dramatic, and I know that this film isn't gonna totally take in what it actually looks like behind us and what it looks like when you look back from the water at the cliff and there's just this is some of the most dramatic Landscape I've ever seen in my life.

23:59 - James Cunningham (Host)

Yeah, man, big sir, to San Francisco. That's Been the thought process from the beginning. This is our home territory, and how do we represent it?

24:09 - Michael Williamson (Host)

Well, well, effectively, authentically well, I think you're doing just that. Thanks, man, and you I don't know. It's just so cool to watch your brand grow. It's also been interesting to watch you go through so many genetics in a multi-tiered environment. I remember talking to you early on. You had said something to me that was like we're trying all this different stuff, trying to see what works in our system. But then I had talked to you maybe it was probably a year or two later and you could just feel a confidence switch. You were basically like I can grow anything in this system.

24:40

Sure sure, it's just really managing my veg times, understanding what plants I'm working with and what their traits are and then timing and planning and some slight manipulation after that.

24:51 - James Cunningham (Host)

Totally. Yeah, experience really played a part, I think in our learning curve. We had an idea of what genetics we were going to run right off the bat with it, but it definitely. We definitely are crosslipping a couple of times with leg ear OGs and different things like that we had to wrestle with a little bit. Make sure we're training the canopy to avoid high light intensities and things like that. But at this point, another thing again is our genetic library and our experience with it. We have an idea of stretch rates and so we're always trying we'll start off a room one genetics here, one genetics here, one genetics here and they all just find a way to wrap up at the right elevation.

25:33 - Michael Williamson (Host)

It's almost like how the law of the jungle works If there's light to be taken, some low sapling from below is going to come fill that void.

25:42 - James Cunningham (Host)

Especially if the genetics lend to it and so trying to make sure that you're playing to the genetics. And then we've got a little bit more forgiveness on our upper tier for things, because we do all of our veg work in greenhouses and so that's something that, regionally, is an option for us and that's not an option for everybody Like almost no one else Exactly right, so that adds a complexity to things that is a little different, based off of time of year and light intensities and all that.

26:14

So you're going to deal with hiccups. This is a biological process. Even if you're vegging indoors, things can happen, and so learning how to mitigate those and assess those things is important as well.

26:28 - Michael Williamson (Host)

One of the things that you used to say to me a lot was like this is a glorified R&D facility. Right, yeah, but it's so fascinating too, because when you think of like R&D, you don't always think about building a brand. It's like the dirty work that someone has to do to sift through all the stuff or to figure out what a winner is, and then a brand is usually built like at another location or something and you've actually been able to do both.

26:53 - James Cunningham (Host)

Yeah, it just brings just rush of kind of memories and energy from the past five years, because it definitely hasn't been easy.

27:05

I think we were built to learn on the fly on this platform and we definitely did, and we were able to take the best of the best and build a brand as well, and so that was the goal from the very beginning.

27:18

It was to make sure that we set ourselves apart as a brand, because that's the only security that I see in this market, and when the state's growing a thousand times more product that could ever be consumed here, you've got to figure out a way to carve out your own little chunk that's impervious to all that. That can go like this, and we've set a consumer expectation and they can rely on us to do what we do, and we didn't outgrow the demand of our brand or just start here and try to build a brand that grows into that. We did it the opposite way, and so, yeah, for us to manage to do both those things at the same time was without getting too far into all of it. It was crazy, but I would say that our uniformity that we have right now with the vertical farm it allows you to have a consistency that in our crop rotations, being indoor farmers that other groups aren't able to have, so that's another thing to think about when you're developing these spaces.

28:23 - Michael Williamson (Host)

Do you find a lot of loyalty, brand loyalty, with a higher level of consistency in the product, yeah, yeah.

28:30 - James Cunningham (Host)

And so you know what I always tell people when I'm helping them design their facilities and I'm like okay, so why are you lumping all of this into just these huge spaces? Like, why don't you break it down a little bit? It's easier on your supporting pieces, like your dry room and your veg space and all of that.

28:49

And then your labor, and then you have more consistent turns. You have fresh products, small batch, and so that, paired with having that close proximity blanket of light, blanket of airflow, enables you to have this very consistent jarrable flower. That doesn't need to be. That's the beauty of the vertical platform is that you don't have these. You have higher yields, but it's almost deceiving because you've got thousands of tennis balls all throughout the space instead of a couple hundred baseball bats, sure, sure, and so you don't have to mess with it as much and break it down the same way in order to get that jarrable flower. It's all like fairly jarrable right off the bat, and so that's definitely a contributor to this, I mean, I haven't seen your flower in two years, and this is what I love about.

29:44 - Michael Williamson (Host)

Cannabis is like in the last two years, your flower is better.

29:47 - James Cunningham (Host)

Right on.

29:48 - Michael Williamson (Host)

It usually smells. It's improved. And I don't know that it's like a significant improvement by any means, but I can see that there's an improvement.

29:54 - James Cunningham (Host)

Thank you.

29:55 - Michael Williamson (Host)

And some people just get. They're like I've been doing this for 20 years and they're like they're already the best in their head and they just start to plateau and they're not pushing and they're not trying new stuff and they're not looking at others and being collaborative, and I don't know. It's just always good to see continuous improvement with good brands.

30:15 - VO (Host)

Appreciate it.

30:15 - Michael Williamson (Host)

I really for sure see continuous improvement here.

30:19 - James Cunningham (Host)

I appreciate that very much. Yeah, lot of process is going to getting it to this point. It's like the QC process, the sorting process, obviously the cultivation and the processing, and so I say this a lot.

30:33 - Michael Williamson (Host)

I'm like a lot of people can grow great flower and it looks really good on Instagram and you're in the grow and the big colas and everything and it smells great.

30:41

But then none of that matters If I don't when you open it. All matters is when you open the jar and you look inside and like it's either on or it's off and you can have the prettiest packaging, you can spend the most money in marketing, but if the flower inside is trash, it's trash Straight up, 100%. But yeah, I don't even want to smoke some of these. They're so pretty.

31:02 - James Cunningham (Host)

Well, you get to take them with you.

31:06 - Michael Williamson (Host)

Speaking of continuous improvement, we've been making some modifications to vertical air solutions. Can you do you want to talk a little bit about that for a moment?

31:14 - James Cunningham (Host)

Sure. So I know that as it stands right now, we've got the version 1.5 that's coming out with some of the kind of physical improvements to the construction and engineering of the system to add for a more balanced and stronger delivery of airflow. It's also going to lower the cost because it's all made out of gal volume and we're shrinking some of the dimensions, so we're using less material. This is something that we want to release now as we understand the benefits of the further engineering that we've done with PIP at this point, with the goal to really drastically drop the price of the product by using other materials in the future. I think that is the ultimate goal and that could happen here within the next hopefully six months or something like that. As it stands right now, we've got an unbelievable solution. I don't want to put a percentage on how much we're able to drop the price tag on it yet because we're not all the way finished, but it's going to significantly decrease the price and increase performance, which is amazing.

32:28 - Michael Williamson (Host)

And the increase on performance. And don't hold me to it, my understanding is it's almost double.

32:33 - James Cunningham (Host)

Double the velocity.

32:35 - Michael Williamson (Host)

Yeah.

32:35 - James Cunningham (Host)

Yeah, totally.

32:37 - Michael Williamson (Host)

You're getting a 2X for a significant discount of what it is today and that's exciting, and this is all part of continuous improvement. This is that kind of mentality at work.

32:48 - James Cunningham (Host)

Yeah, we need to take into account everybody's goals in configuring these systems, and sometimes some of those higher elevation changes need stronger airflow, and so you might as well make sure that you can do that without just using a stronger pan and fan and using more power.

33:09 - Michael Williamson (Host)

A lot of people don't realize the length of the row dictates so much in how you move and balance air.

33:16 - James Cunningham (Host)

Totally.

33:17 - Michael Williamson (Host)

And I think that's an area with the statistics that I've seen on some of the fluid modeling and some of that stuff, that and some of the airflow modeling, we're trending in a really strong direction and there's not a lot of other competitors that will be able to meet those specifications in the future, which is exciting.

33:36 - James Cunningham (Host)

Yeah, this is the forefront of it. This stuff wasn't and hasn't ever been studied to this extent until now, which is super interesting to think about. That's a big reason why we had to develop our own solution, because it didn't exist and we were going to the foremost authority in vertical farming from a traditional ag perspective and multiple groups were like well, this is what we do and that's not going to work for us, we've got to figure something else out.

34:04 - Michael Williamson (Host)

Well, and one of the challenges was, I think, on the airflow modeling. It's really the cannabis plant itself, right, If you take the plant out of the equation can you do a bunch of airflow modeling, tracking and stuff Absolutely. But as soon as you enter the cannabis plant, due to its shape and biomass and other stuff, it just changes the whole thing and they're really like you said. No one's really done that work at that high level. It's really happening as we talk.

34:28 - James Cunningham (Host)

Totally. Yeah, it's a pretty unreal experience to have gotten into while just trying to develop our farm and we had no expectation in getting into global equipment manufacturing. But it's been an unreal journey and I wouldn't trade it for anything. We've had great partners every step of the way and we're still learning.

34:54 - Michael Williamson (Host)

I'm curious it's a hope of mine, but after spending a little bit of time in Europe and seeing that market start to get its feet, but also looking at that market and saying, wow, this really feels 10 years ago in the States. I'm really hoping that countries outside North America can learn some of the hard, can learn the lessons that Canada, specifically, and the United States have learned and hopefully not go down those same paths. It's clear unregulated oversupply hurts the farmer.

35:24 - James Cunningham (Host)

Oh yeah, and there's even other influences there in these more kind of in dealing with some of the municipalities in Europe and different places that are. It's going to be interesting to see how they go about it for the word that comes to mind as traditional and the way that they approach the development of some of these business cultures is a little bit different than we are out here and so. But there's some cool partnerships that are happening right now with some of the power producers out there and looking like really forward thinking business models in indoor act, and so we've got some cool stuff that we've been talking to and working on out in Europe and even Australia, new Zealand and things like that.

36:11 - Michael Williamson (Host)

Yeah, it's all over right now.

36:13 - James Cunningham (Host)

It's going to be a cool space to be in, seeing these markets emerge. We saw it happen in the States, and in the US that didn't have anything before, and it's just like I said, people couldn't go to the store for the past 20 years and buy weed like we've been able to in California, so it's interesting to see it happen.

36:34 - Michael Williamson (Host)

Yeah, California is like no other place in the world. I'll just say that as like someone who's lived here but also been outside, or like there's no other place like it in the world, in the cannabis space.

36:44 - James Cunningham (Host)

My man.

36:45 - Michael Williamson (Host)

Dude, I appreciate taking the time.

36:49 - VO (Host)

Thanks for listening to Cultivation Elevated. Full show notes for each episode, which includes a summary, key takeaways, quotes and any resources mentioned are available at piphorticulturecom forward slash podcast. Be sure to follow and subscribe wherever you listen to podcasts and if you're enjoying the content and getting value from these episodes, please leave us a rating and a review at ratethispodcastcom. Forward slash cultivation elevated. We'll be sure to read these out on future episodes.