Recently, Shawn was interviewed for a podcast on The Hemp Revolution. In the episode, Shawn talks about the organic practices of growing cannabis and the future of cultivation.
LINK TO PODCAST: https://bit.ly/ShawnPodcast
Sonia Gomez: Hey guys, Sonia Gomez and James Brinkerhoff coming to you from Denver, Colorado. This is another episode of The Hemp Revolution podcast, and I’m super excited to be here with you with another fellow cultivator and pioneer in the cannabis space.
As you know, it is our mission to share with you the truth about cannabis and hemp so that you can make empowered educated decisions about how you want to care for yourself, love, and the conditions you may be suffering from.
But more importantly, we want to make sure to lift the skirt on the industry and share a little bit about what’s happening behind the scenes through the eyes of the entrepreneurs who are pushing this incredible industry forward.
In today’s episode, we are going to be interviewing, as I mentioned, a fellow pioneer in the cultivation space, one of the first outdoor cults, if not the first outdoor cultivator in Colorado, and again, somebody who has paved the way for the evolution of the industry. Please help me welcome our guest, Mr. Shawn, Honaker, nice to meet you and nice to have you on the show. Shawn, how you doing?
Shawn Honaker: Doing very well. Thank you so much for having me on. I appreciate the time.
Sonia Gomez: Yeah, absolutely. It’s a pleasure to have you on I’m really excited. I almost never get to do my podcast with my husband, but since James has also been in cultivation for teen years, I think It would be a good mix to have us both on and let you guys hang out on, you know everything that’s happening in the industry as far as cannabis goes. But before we dive in, why don’t you share a little bit about your background and how you ended up involved with the Colorado Cannabis movement in the first place?
Getting Involved With the Colorado Cannabis Industry
Shawn Honaker: Sure. So we’ll back it up a little bit. I was actually born in Ipswich, UK, the United Kingdom on UK soil. So I have awesome dual citizenship. But I was raised in a very central rural Indiana, where cannabis is obviously a no-no. So with that being said, I grew up in a very prohibition cannabis era of my life. My father being a police officer for 26 and a half years, just simply magnified that so there was never really any cannabis experiences in my life until I got to high school and smoked a little bit that type of thing.
When I actually dropped out of college in 1999, because I was done with Indiana and I moved to Colorado. It happened to be the same year that they approved the movement 20 for medical cannabis. I didn’t show up here for that. I came out chasing dreams and aspirations. And long story short and about 2006 I had an accident with alcohol and decided I was going to give up alcohol and cold turkey on alcohol and discovered cannabis very shortly after that and decided that was a much better alternative for my vices than alcohol was. So my first question became, where’s this coming from? How’s it cultivated? What goes into this product? And no one can answer it.
So obviously back in those days getting products from all over the United States is worth coming in from and I don’t know where it’s coming from. It’s got a name on it. I don’t know what the name is. It could be [inaudible], that type of thing. So these days, we were talking all the way back in 2005. I did not even understand the difference between Indica and Sativa. I had no clue that that was.
So if you don’t want to be a knock on your door, and you don’t type on Google, what’s the difference in Indica and Sativa? So what I did was jump on a plane in 2007 and fly to Amsterdam for the High Times Cannabis Cup and walk around to every seed purveyor I could find in Amsterdam and ask him the difference between Indica and Sativa, and how can I get up knocking my get down. That’s literally how my entire career started in the cannabis industry.
That simple point right there. That magnified into me cultivating my house, not being able to cultivate enough weight. So then I took three shipping containers and buried him under the mountain up at my ranch property in Western Colorado. I just buried him right either side of the mountain to 200 amps of power adam 24,000 watts APS and started growing, and I made every feasible mistake you could possibly make in the game.
I first time I walked out and saw those beautiful buds all covered up in webs, I thought, wow, spiders really must like bud a lot. They make webs on top of them. What’s that? Quickly discovered right afterward spider mites. So that’s how literally green I was when all this started. And there’s a lot of people right now in that same position. And they’re looking at this huge wall or this mountain in front of them. And they’re like, how can I ever catch up? Like, start? It’s just that easy. You have to start. You have to make all these mistakes. You can’t just tell someone tell you, oh, this is how you present these and permanent that you have to actually have the problems to be able to solve the problem.
So I was very fortunate to be able to discover all of the ups and downs that come with cannabis, on my own time in an era where if you get caught doing it, you’re going to do some time in federal prison. And I learned a lot. And I learned in cultivating for about three years indoors, that it’s expensive. And it costs a lot of money to do it commercially because I became commercial gardener hemp. Now we’re running six rooms that have 20 lights in each room, and it’s perpetual harvest every six days, and I’m just pulling my hair out like what is going on. This is nuts. We’re started looking at prices per pound, and back in those days was costing us 800 to 1000 pounds to grow. That started motivating me to look at the sun. And so free power, free wind, free rain. Like, let’s look at this.
So it took me about two seasons to develop my own blend of soil, and I came up with a custom blend of soil. And once I perfected it, $300 in the soil, which was 16 cubic feet, produced an 8.76 pound dried trim bud of Girl Scout cookie form cut. And right then I was like– I said, this is it. Outdoor cultivation and greenhouses and live soil is the whole future of everything. I need to go back to my roots, growing up in Indiana, and I was a farmer. And unfortunately, we use herbicides and pesticides and everything in the world you can imagine. It didn’t have ammonia on it wasn’t going to grow.
So in those days, we weren’t really watching out for the earth. We weren’t really watching out for the soil or everything that’s associated and touches it, we were just trying to get a crop. So I just took a step to the left. And when everybody in the industry was blasting salt and building out indoor grows, and they thought doubling the computers were the best thing in the world. I’m down here staying in the middle of a 55-acre farm, putting a fence up with my bare hands trying to grow 500 outdoor medical plants and chasing my dream.
So that led me now to an about 5000 plant count we’ll have for next season. Our best yet harvest, we had 3065 plants, and we pulled extractable material just at 6000 pounds. So it’s not bad doing large commercial, but we had to get away from the individual parts of doing just 16 cubic feet to make a 9-pound plant. Because two years ago, the economics of the industry did not allow that we got all the way down into $600 a pound for a product, and the economy didn’t work, so we had to stick to the economics of scale. And so we amended our native soil that’s here through a series of adding all sorts of different compost, and we add liquid amendments, nothing salt-based everything’s 100% organic minerals that go into the ground. And then we actually put down to drip lines and a top, what’s called plastic mulch to hold the moisture in. And that’s now how we cultivate our large outdoor commercial crop.
Soil to Oil Company
We are basically a soil-to-oil company. So all of our product that’s cultivated in our one crop that we do a year, all goes into concentrates in one form or another. With that, we make every form of concentrates if there is available. Everything from the waxing shatters all the way through exotic diamonds and sauces into water-soluble distillates. We make our own cannabis terpenes, not steam distilled. We have different IP for making them. We make vape parts, and as of today, like an hour ago, we just got approved from the county to be able to start making our first line of edibles, which we’re going to call Yetibles. And they will be beyond nanotechnology. It’s miscible technology, the best way for me to describe that to you is the nanotechnology and disclose that are currently being used have fat as a carrier into the system. And for the body to burn the fat to actually get the cannabinoid takes a very long time. That’s why your uptake can be for two hours, three hours, four hours. We have removed the fat 100% from it. And our molecules of cannabinoids will uptake into your system in 90 seconds to 9 minutes, guaranteed.
James Brinkerhoff: Wow! Is it miscible?
Shawn Honaker: Yeah. Miscible technology. The best way I could explain this to you is in current nanotechnology. It’s a lot like– well because it is, it’s water and oil. So I can put that through a homogenizer. And make sure that it doesn’t make it blend. But then the next day, if I come back and look at it, they separate it again, the way ours works or miscible technology is think of it like water dies. So I drip water die into a glass. And then as I mix it, we come back the next day, that glass still has the same color as the water die. That’s exactly what our new edibles technology and very one on one simple form is doing. So we’ve come a long way–
James Brinkerhoff: That’s really extremely exciting. You’re growing practices are all organic, right? And you make a lot of your own inputs.
Growing With Organic Techniques
Shawn Honaker: 100% Yeah, I’m big on making my own teas and bokashi. And if the crowd isn’t familiar with bokashi, it’s a fermenting technique. There’s a debate whether it’s in Japan or Korea, so we just simply say it’s an Asian fermenting technique to make it simple and respectful to everybody that who could have could not go to technology. All organic fruits, vegetables, grasses, stocks, things like that, mix them into a barrel. Then we mix them with EM1, which is a fermenting solution. And some molasses. We always use powdered molasses, never use liquid molasses in your grows as a bad bacteria in it, it can cause systemic problems that your plants uptake wrong. So always use powdered molasses because it’s been cooked to the point where it killed the bad bacteria. So we’ll put powdered molasses in with our EM1. And we wait till the pH of the solution inside gets to a 3.5. And at that point, the solution has fully fermented and is ready to go.
Here’s the super cool thing about it. We can actually cut down our black-eyed Susie’s or grasses, even our weeds that we have on the farm out here, throw them into a barrel, and ferment them. And we will extract the cellular level that plants so deeply that we pull the memory of the plant. These plants have been evolving on this property for thousands of years. So what I do, is I strip the cellular memory count from them. And by fermenting them through bokashi, feed it to my plants through a systemic uptake with a proper pH balance to the water. And the plants will literally, I’m not exaggerating, they’ll grow four inches in a day, four inches. And what they’re doing is they’re uptaking, the cellular memory of these plants that have you all been here for thousands of years. Now what we do is cut the plants down at the end of the season, throw them into fermenting barrels and take that whole calculation of the memory that’s been made for the year and start feeding that to our brand new clones. They’ll be going out next year.
James Brinkerhoff: Awesome. So I bet your plants are thriving and loving it out there at this point.
Shawn Honaker: They do. Yeah, yeah, it’s taken years, and it only gets better every year. We’ve made plenty of mistakes out here that I’ve learned from, but more importantly, we’re learning from them and building on those, and trying to make a better product every year.
James Brinkerhoff: Awesome. So tell me a little bit about the economics of the operation. How’s the yields down there and Pueblo, Colorado?
Shawn Honaker: We see, on average, for commercial cultivation. We see anywhere between a two all the way up to about a 3.5. I have some research on my property that supplement with salt-based nutrients, which, of course, helps tremendously in vegetative growth and also in bud development. We choose not to do that. We stick 100% no nutrients, no herbicide, no pesticides. We are 100% organic, but you can see a variety of changes in the outputs in saying that we’re just about ready to build a 4200 square foot wide bed greenhouse. We’ll have about 3500 square foot wide bed, they’ll be broken into a series of beds, but that’ll be the whole room. And that’s where we’ll start to showcase the growing talents of true organic uptake in the plants, literally using everything from organic IPM by using nematodes and triple threat organic, our triple threat of mites take care of any sort of spider mites or russet mites and [inaudible] to take care of aphids and lifelike larvas. We’re just going to make this greenhouse a 100% showcase of what you can do with live soil and organics. I have a friend of mine, he’s on his 23rd turn in his life beds, meaning he cuts the stock and the next day put the clone right next to where that stock was he cut, and it goes all the way from clone to flower. And on his 23rd turn, and it has never done anything but top-dress and put in certain supplemental plants on top that didn’t die and then see.
James Brinkerhoff: Yeah, for anybody that’s getting in the game as a cultivator. That’s really the future of all cultivation because it’s the lowest cost, right?
Getting in the Game as a Cultivator
Shawn Honaker: That’s a hundred percent, and that’s why we do it. You cannot keep spending money at the grocery store every two weeks to buy more nutrients and more nutrients and more bud bloom, and you cannot do that; you have to come up with practices. This is a commodity we’re talking about here, and this commodity will change, and people tend to forget pets. And the reason we tend to forget that is because you used to be able to walk into a bar on Friday night with a 1/4 pound your backpack and walk out with two to 3000 bucks can how far you broke it down. There was no sales involved. It sold itself. Well, we’re no longer in that market. Now we’re in the market. But we have to watch every single penny and watch where it goes. Because Yeti farms have no partners, no investors, it’s me. I’m responsible for everything at the end of the day: the good, the bad, the ugly. We watch every single penny. And I watch every check that gets written and how it goes.
So when I look at my neighbors, and I say, how much is your weekly propane bill for those heaters that you have in your greenhouse? And they go, we’re so excited, we’ve got it down to $3,000. So you’re spending $12,000 a month to buy propane. And you get no return on that. Is that correct? No. Like when we get the return of the garden. I’m like, but what happens, and for those of you that don’t know you cultivate in a greenhouse in the wintertime, you create a thunderstorm and the top of the greenhouse, and it will begin to rain in your greenhouse. You don’t want this. So with that, you have to evacuate the air when It hits a certain humidity point or a certain temperature. So what everybody does is heat the greenhouse was up to 85 to 86 degrees, and then blast all the air out of it. Because it’s too humid, then it put fresh air into it, of cold air, and then they have to heat that up, we’ll start the process over and over and over again. It’s a horrible practice.
So what we decided to do on our 4200 square foot greenhouse is by a propane fire generator and use that generator inside of a building. We’ll build a building around it, and I’ll build ductwork off of that, that sucks the heat out of that building that’s produced from the combustible engine, and from the radiator, no exhaust, the exhaust piped up elsewhere. And we’ll run the heat from this generator room into the greenhouse, and I can open the other end of the greenhouse if I want; let it constantly blow because a radiator is going to be 180° to 200°F. I don’t need the room at 82°. So we have free air or free heat, free power, and I don’t have to buy a $20,000 generator to make that happen. I don’t take back to the power grid, and I create all of my own HVAC and all my own power on my farm, and I own my generator, and it’s a depreciating asset for my farm.
James Brinkerhoff: Sounds like you got your numbers locked down really good, and you’ve figured out how to really make it as a cultivator. And I’ve been talking to a lot of people, recently, old cultivators from Northern California, and that’s where I spend all my time as a commercial cultivator for the most of my careers in Mendocino and Humboldt County. So I’ve seen a lot of what you’re talking about these containers buried in the ground, and I’ve seen every different version gardens way on the top of trees and all kinds of stuff. But a lot of people are telling me I quit growing the flower because it doesn’t– there’s no money in it anymore. And it’s really expensive to operate. But you’ve kind of got kind of niche down to where there’s a lot of upsides there, right?
Shawn Honaker: We grow pounds for this year, and I’m not exaggerating, I’m a little bit upset because we’re all phone number. It cost me $38 a pound to grow this year.
James Brinkerhoff: Wow. Unbelievable. You guys were here 3 years ago. [inaudible] pounds and the indoor cultivators like– and I’ve been consulting people around here on, you know where to grow, and I’m like, you know the numbers don’t lie 60% of all the cannabis is being grown in downtown Denver, and that’s gonna be a major disruption.
Shawn Honaker: Yeah, when you start looking at the way I’m doing things, and I’m not the guy to stand up. I’m very blessed to be on this podcast. I’ve never been on a podcast before. So the type of information I put out, and I’ll step off my humble stamp for one second, I just went to Kansas City, and I have some clients I’m working within Missouri. I’m on 18 different licenses over there. And they bring in people who’ve never even met me before, and they try my product. And they just straight-up say they’re like, Listen, we’re not trying to build you a big head we smoke product across the entire country. Yours is the best this concentrate is out of this world. What is it? [inaudible] the all-organic inputs, it’s also that we are extracting techniques for them.
We make a very high-level extract. But what I’ve done is I’ve looked at this from soil to oil even at the dispensary model, the dispensary model right now for me doesn’t work. You have to go vertically integrated seems like the next step. But it’s not because I can’t write off anything for 280E at the dispensary. So right now I’m kind of sitting in the sweet spot, I get to write everything off, I still get to enjoy my market and explore all these new ways to do it. But I honestly believe that the industry is going to have to go this way of live beds, because the perpetual cost that comes with salt-based nutrients, cultivation, is going to just break everybody it’s going to come down to that much it’s going to come down to did you spend $150 on your nutrients for this run? Or did you have renewable soil that’s actually investing back into you? I hope we got life soil that’s investing back into us. Well, that makes a difference when you’re talking about thousands of pounds. So we see that’s the future. I wish everybody the best and whatever ways they want to do it. But I’ve owned two grow stores, and I don’t see any reason to pay for 98% water and 2% solution. So I gave that up years ago and went to the sun and the water and the earth, and it seems to be working very well for us.
James Brinkerhoff: There you have it, folks. That’s your competition, you’re going to have to grow your cannabis for less than $100 a pound to be viable in the marketplace, and that’s pretty awesome. And I hope you hold on to your technology, your IP and I know there’s probably going to be some very big organizations knocking at your door here if they haven’t already.
Shawn Honaker: They’re starting, and I’m a pretty humble guy keep my mouth shut a lot. I’m just one of those, you know all facts, no brag, man, I just look at it. That’s what it is. I’m much more that person. Maybe if I took a little bit more to brag fact, people would see it a little bit more. But I think that the industry will grow up to eventually mature into the area where they understand what I’m saying.
Sonia Gomez: Yeah, I think it’s really important. I say the same thing and a lot of the education that we’ve been providing in our– and everything that we have done since we’ve left California and came into Colorado has been to focus on the education that we’re providing to sort of bridge the gap. I think the industry grew faster than the consumer could reconcile. And there’s this really significant gap and where the customer base doesn’t really understand what products to select, or how to effectively use them to get the results that they’re looking for. They either blow themselves out and get way too high, or they’re finding brands and products that have lost the advertisement, but absolutely no meat on the bone. And so a lot of what we focus on is education. And I know you’re huge on that, too. You’re traveling. I would say globally right now educating people on cultivation practices, sustainable farming, things like that, right?
Educating People on Cultivation Practices
Shawn Honaker: Yes, ma’am. Yeah, it’s become out of nowhere. It’s just one phone call came, and someone asked me to come to speak at a federal event for the Division of Water Resources. About three years ago, I spoke for about 1500 people. And it’s kind of like a slow trickle, right? It is started, you know, another organization called, then six months later another called. Now I’m getting phone calls every month. We went from supposed to be Mexico. Yes, I’m traveling internationally on shelving all over the country. It’s kind of a joke that my employees laugh now they’re like, you’re here for the whole week. And I’m actually going to be here. You’re gonna have to put up with me for a whole week around here. So giggle out of it because I’m out spreading the word now. And because I’m very direct, I’m very black and white.
I’m not trying to sell anybody anything. I’m just not. I’m trying to tell you about the experience that I have and warn you of pitfalls, that I did not know where there, they’ve crippled me at the time when it happened. And I’m trying to protect these people from having to run into these issues is really my true goal by sharing all my experiences for the cannabis industry so far. And 15 years have gone by it’s– I blinked I can’t believe it’s been 15 years and now I can’t believe we’re looking at a bill that could possibly legalize this nationwide even states rights. This I’ve been saying it’s gonna happen states right from like it’s 2020 states right, that’s when it’s gonna happen, and here it is now it’s on our fourth run. I have a lot of faith that will happen.
The reality is maybe won’t because who’s controlling what and we will get in politics, but that is a huge progressive step in the right direction. I was like, you know, it’s just I couldn’t be happier somehow I’m blessed in life too. I always thought I was holding on to the tip of the tiger’s tail on this industry, like the last few hairs of the tiger’s tail. I seriously felt like that for years and years and years. And then it was like one time I just grinned and bared put my head down and work. And then I opened my eyes, and I looked down, and I wasn’t holding on to this tail. I was holding on to the tiger’s whiskers. And I’m riding on his neck, and this industry is going fast, and it’s just like wow if you slip up because we’re really serious now, these consequences are really serious now.
So me being in a position I am, I don’t want someone to slip up and get their hand bitten, I want them to be protected and able to get further than I did. That’s the greatest success of the world to me is to watch anybody I can help get somewhere get further than I did with proper ethics in life, that’s the win for me. I couldn’t be happier. I’ll stand behind the crowd or behind the curtain and applaud for them as they’re on stage accepting their award. That’s true winning for me in life now at this point. So education and knowledge is where I’ve kind of started to invest all my time.
Sonia Gomez: I love that. I think that there are so many different points of collaboration for us because we have this incredible platform online. And we’ve really, you know, with all of the work that we did, we came over in 2009. To support legislation and to buy into the industry. We got involved with– we owned and operated one of the first hundred licensed cannabis companies in the state. And we were doing cultivation. We were doing the MIP we had our retail center, and it was so competitive, it was so tough in the very beginning to stay relevant.
Even though we have the best product and the best practices and all of these things, the demand and the supply was just so difficult to keep up with the big money that was coming in and buying these huge warehouses in downtown Denver and blowing out a shitty product. You know, but they had 50 jars on their countertops like the subpar product, and we would get bought out in two days because we had great products, but it was gone in two days.
So it was really tough for us and beyond that interface with all the different folks inside of the details setting. Anyone from parents of children who had lupus or leukemia or seizure conditions, all the way through to the baby boomers or retired veterans, who were just fighting for their rights to safe access and looking for anything that would eliminate, I don’t know, phantom pains from being an amputee or something like that, all the way to the professionals who were helping to write the legislation and we’re, you know, accountants and lawyers and all of the things like, there was just such a, there was no middle ground for everyone to come to that gave them a basic level of understanding, and that’s why we moved into education. And similar to yourself, travel the country, I’ve traveled internationally to educate and empower really around the truth to give people some perspective and some hope that there is, in fact, an alternative and there is a method of care that you can depend on, that isn’t blown full of chemicals that isn’t, you know, built by profit, hungry moguls and that there are real people behind the products and brands that we love. Are you primarily a wholesaler with your oils? Or do you have a front-facing consumer brand as well?
Shawn Honaker: 100% wholesale. At this point, I’m just not interested in dealing with the actual retail side of it. There’s a lot of arms on the octopus, and I deal with enough arms on the current octopus that I wrestle every day. So yeah, I’m good with what I have.
Sonia Gomez: Yeah, awesome. Share with me just really quickly at in. I do a segment inside of the podcast called the words of wisdom. And this is really an opportunity for us as evolved entrepreneurs who are a little bit further down the trail to support what I call budding entrepreneurs who are trying to jump into the green rush. And everybody is looking at this industry as this huge cash-rich opportunity, and there’s tons of international buzz around this industry. It’s one of the top three fastest-growing industries in the world next to sports gambling and cryptocurrency, but somehow cannabis and hemp are at the very, very top of the pyramid. As far as conversation and relevancy go. And a lot of these budding entrepreneurs are facing challenges that you would, that they were not expecting and have no idea how to navigate their way through.
You gave a lot of really key advice as far as cultivation, but when it comes to business ownership, I’d love to hear some key pieces of advice that you would offer maybe two or three pieces of advice that you could offer a brand newbie who’s trying to figure out how to get involved in this industry. And what steps that they could take to fast track or avoid any of the inevitable pitfalls that come along with getting involved with this space?
Words of Wisdom
Shawn Honaker: And you’re 100% correct. As far as people get into, this is the newest, greatest thing everybody wants to get in. Everyone wants a piece of it. That’s a lot like the hemp side and CBD side. Everyone wants to be a farmer. A quick side note on that the first hemp auction ever in the United States was just held 10 days ago in Tennessee. And a bunch of hemp farmers showed to hear with the top bid first off for three hours. No one did anything. Did you hear what the top did was for CBD point, so that’s obviously the CBD is purchased by–
James Brinkerhoff: Like $1 a buck 50?
Shawn Honaker: 20 cents!
James Brinkerhoff: Oh my gosh. Yeah, I heard it’s a mess.
Shawn Honaker: So what that means for the people that don’t know is if you have one pound of CBD flower, or biomass, if you will, that comes at 10% CBD from your analytics to cannabinoid profile that’s gonna pay you $2 for that pound. The clone costs you $3, so there’s a big vacuum and backlash coming in that industry right now. It’s already happened in the cannabis industry once it’s going to happen again. But it’s already happened once to us.
The advice I can give, the first piece of advice, number one piece of advice in any business you do, don’t let pride pay your bills, you will tank this thing so fast if you let pride pay your bills. And what I mean by that is, so many people love to invest in the cannabis industry so they can run and brag to their friends that they’re involved in the cannabis industry. A lot of people like to get involved in the hands-on industry to be able to brag to their friends that they’re in the industry. That’s perfectly fine. I have no problem with that. But it’s tough to make money in this industry, very tough to make money in this industry. So when you’re out flashing around everybody how cool you are. Really what you’re doing is just showing off to me that you don’t know anything about the industry because if you’re driving a Mercedes 26-inch rims and you’re a farmer. There’s a big problem. I don’t care if you’re an indoor farmer. You can’t afford that unless you have a trust fund.
There’s a big joke in the cannabis industry. How you make a small fortune in the cannabis industry? You start with a big, and it’s real people don’t believe me, but it’s real. And I can take you to a friend of mine right now that– Tim is a partner of a $25 million debt to the IRS right now because of their cannabis business. $25 million guys. That’s an astonishing number. Yeah, cuz I don’t think– No. And the thing is, they have CPAs they had everything to try to figure this out that nobody knew. We’re all standing in this dark room and had no idea what we were doing. Our CPAs didn’t– our attorneys didn’t, nobody did. And then the IRS starts creeping around. And now they want to know everything about you.
I’ve been in an audit with the IRS for three years this November. I’ve been an audit. They’re trying to charge me $782,000 for a year that I did $1 million of business they’re trying to charge me $780,000 in taxes and penalties. So what I highly suggest is you find somebody, and I’m not trying to tempt myself out here, but you find somebody you can trust that knows what they’re talking about in this industry. And it won’t be crazy for you. They won’t charge you $100,000 to consult or advise you. They’ll charge you a normal nominal fee. But find somebody that actually is humble and knows what they’re talking about. If they show up and they have a crew of eight people, and they’re going to come through and walk, you’re paying all eight of those people’s salaries along with the one person that’s walking through the door. So it’s pretty simple. Go back to basic business 101.
If your nephew comes up to you and says, Uncle Jimmy, Uncle Jimmy, I need to borrow two and a half million dollars for this grow together and build this lab out. He said, Great. Let me see the business plan. He puts it all together. The first question I’m going to ask this kid, do you have a buyer for this product? Do you have an end-user for this product to buy it from you? Well, my guess is No. I’m not giving you $2 million. But right now, it seems like if you’re in the hemp or the cannabis game, you can go and smoke a Jimmy for $10 million. He’s never going to ask you if you have an end-user for your product or he’s gonna keep seeing your money until he realizes there’s no money coming back.
I’ve got a guy in Northern Colorado right now has 160,000 pounds of hemp biomass to get rid of. He sold his company invested everything he had into the hemp game. I asked him, do you have a contracted buyer? No. I said, Then why the hell did you do this? I honestly thought people were just going to show up and buy it. You put everything on black thinking someone just cuz you know why he did that. Because you used to be able to go into a bar with a quarter pounder, we eat on Friday night, walk out with two to $3,000. That’s why. He just saw something that was cool. Said I’m going to take this company. I’ve been running for 20 years. It’s extremely profitable. And I’m going to sell it, and I’m going to dump all this money on this huge farm and this big processing facility and everything. And he’s like, well, I’m building a lab next. I was like, cool. When you don’t win the Kentucky Derby with one horse, why not put it in two. So that’s my business sense for you is use your fucking brain.
James Brinkerhoff: There was a reason that we’re seeing that all the time gross overspending on equipment and lab build-out and there’s it looks like to me from my foresight that the next 12 to 18 months is going to be a big bloodbath in the hemp industry.
Shawn Honaker: Oh, I’ve been saying that for two years. My girls involved with it directly every day. And I feel the pulse of that industry every single day. It’s tough. If hemp industries dealing with what the cannabis industry had to deal with a few years ago, regulations and overpopulation of growers supply and demand economics 101. If the hemp industry grew eight times the amount that the consumers can consume in one year, one of two things has to happen. You need to grow the consumers by eight times or the cost by eight times. What do you think is going to happen?
James Brinkerhoff: Yeah, we’re already seeing that [inaudible] wholesale just steep drop.
Shawn Honaker: 20 cents a CBD point last year was $3.
James Brinkerhoff: Yeah, that’s– If you want to get involved, use CBD as an ingredient in your brands and build your brand.
Shawn Honaker: Yeah, and to be honest, CBD alone is a molecule disintegrates as soon as it goes in the blood membrane anyway, so it’s useless. It has to have THC as a shield to be able to block it to go through the blood membrane. So that can actually be useful for your body. So why is the whole world all hyped up about one single molecule and a cannabinoid profile of a plant? When we know for a fact, there are over 100 different cannabinoids inside of a plant. And we’re all excited about one. Now, I’m more excited about CBN News and x bar in new antianxiety. I’m so I’m excited about getting people Off opiates is great as CBD has been for a rah rah rah cannabinoids. It’s great, but it’s useless for me. It’s an additive to a product sweet green. For me, it’s all it is.
Sonia Gomez: Yeah. The thing I do appreciate about the CBD craze right now is how much awareness it’s brought to the mainstream and how it’s humanized the conversation around a candidate like I was at strawberry hot springs, and I was just trying to have like a relaxed day with my family, no big deal. But I heard these little grannies who all had like the city slicker accents from like, down south or like Alabama and Mississippi girlfriends who’ve been getting together for 400 years and they decided to come to Colorado and go up to Steamboat Springs on a tour bus, right. So, so they come up there, and they’re talking back and forth, and they and I said just something really random about CBD, and all of them flipped around. It’s like their bridge club; they all flipped around. And for the next 35 minutes monopolized my attention, and we’re like, you know about that marijuana and that CBD it was that they were just like totally pecking at me trying to figure out what the heck the difference was. And I’m guaranteeing you that even 12 months ago, they would have never had this type of conversation beyond complaining about their grandson’s involvement with that devil’s lettuce. So the one–
Shawn Honaker: Yeah, I couldn’t be happier with Sanjay Gupta. That’s he started at all. I mean, anybody that says they’re different, I’ll debate with you. He went on to his little Dr. Oz show, or whatever it was, or Oprah or something–
Sonia Gomez: It was Dr. Oz and made a fool of themselves.
Shawn Honaker: And but what he said was I take back what I said there is medicinal value to this. That alone flipped every soccer mom in the United States. And that’s what we needed. We needed mom in the household is the head of the home to approve this. And once mom says it’s okay, on now, she’s talking to her mom about talking to her sister and her auntie and now the husband. You know he’s got a source [inaudible] let’s put a little bit of illusion on there, see how that works. Here’s a tincture so you can sleep better tonight so you don’t have to take your Ambien anymore, and you don’t need to slam a scotch before you go to bed have one of these cookies this is what happened for one for Sanjay Gupta none of that would have ever happened. He was a huge influence in the progression of the cannabis industry ever meet the guy I’ll buy him a fast steak.
Sonia Gomez: Yeah, I absolutely agree, and I got so that’s what I definitely appreciate about what’s happening right now was CBD and at the same time, I am an absolute 100% advocate for the fact that it’s a full spectrum of the plant or having that full panel in the extraction process is the closest thing that you can get to God’s medicine, and he created it the way that he created it for a reason, and the more that we extrapolate and pull these things apart, the harder it’s going to be for us to feel that full, the medicinal value of what the plant is actually capable of.
And I’m speaking from personal experience, you know, I was in a surfing accident when I was a teenager, and I had to go through, 10s of thousands of dollars, dozens of doctors, intravenous pain medications, years and years of despair and you know, feeling totally discouraged, and really abandoned by the medical system and it was a holistic neurologist from Europe who actually introduced me to my endocannabinoid system taught me about micro-dosing strain selection phytonutrients the difference in hemp and cannabis cannabinoid content, and that’s what really kicked off my whole journey here.
So I’m a full advocate for how things are being cultivated all the way through to how things are being packaged and delivered to me as a patient, and really making sure that that education is available for other people to make those same kinds of educated decisions and really enrolling themselves and immersing themselves in the culture of holistic wellness that includes cannabis and hemp, but is not solely dependent on cannabis and hemp.
Shawn Honaker: So a year ago, I would have been standing right with you and holding up a flag and saying she’s 100% correct. My education level has changed. The future of all cannabis intake to your body or uptake in your body is actually separating every cannabinoid out of the plant and then recombine it back for a custom mixture for your bodies to help with excesses and deficiencies within your cannabinoid system to target us.
So right now, if someone says UK Cheese is the best strain for you, anybody that tells you this is a bag of UK Cheese, and it smells something like UK Cheese, you’re going to buy. It doesn’t matter how it was cultivated; it doesn’t matter if it was run short of water and vege; doesn’t matter if it had high TH in the wrong foot. None of that matters. But every bit of that changes the cannabinoid profile of the plant. So what we’re really doing here is Indica and Sativa at the end of the day really don’t make a difference. What makes the difference is the cannabinoid content in combination with those.
Now the terpenes make a big difference, but we are going to get so in-depth in the next 4 or 5 years of this that you’re going to go see a doctor, they’re going to take a blood draw or saliva draw, and they’re going to tell you you were excess and deficiencies are, and you’re going to get a custom ordered uptake of your choice of cannabinoids and of your flavor.
Sonia Gomez: Absolutely. I’m already seeing that. I’m already seeing that [inaudible 00:41:57]
Shawn Honaker: It’s the whole future. But the problem is we haven’t had Humana testing on this cause it costs $20 million to do a human test.
Sonia Gomez: Yes.
Shawn Honaker: We’re getting to that. Once we start to have funding and research, then we’ll be there. So that’s the entire future for right now we’re kind of throwing a dart against a dartboard and saying we hit a bullseye every time when sometimes we don’t even hit the dartboard.
Sonia Gomez: Yes.
Shawn Honaker: So the future changing. But for right now until that resource is available, full-spectrum, 100%. I couldn’t agree with you more.
Sonia Gomez: Yes.
James Brinkerhoff: Let me ask you something. For somebody that’s just getting in right now, like, I’ve, I’ve got some relatives that they’re seeing. They’re feeling their comfort level. They’ve been in other industries, they’ve done well and their comfort level now. With the way that the laws are, they want to get in. Where do you think the biggest opportunities are in the industry right now?
Shawn Honaker: I have this a lot. I have a lot of people calling me with the exact situation, and I’m very blessed with this, most of the time, which makes me really happy is somebody between 45 and 60 that has got an opportunity to retire a little bit early or has a significant amount of savings that they want to invest into the industry. They’ve been getting, if you will, too sunk their teeth in. And so what I’d like to do is actually physically meet with these people to kind of read their personalities a little bit, but I’m not going to be able to do that with your relatives. I mean, I could if you wanted me to, but I can’t do this with everybody that’s listening. So what I would say is you kind of got three sectors. If you want to be hands-on with a plant, you’re going to cultivate, you’re going to extract, or you’re going to sell it.
So you need to figure out which one of those fits your personality the best. If you just tell me, Shawn, give me the economics of this, screw the personalities, economics. Be a grower and people are going to be like, no, no, no, no, no, no. My cousin Jimmy, he was a grower. Should they set that thing down, they lost $2.5 million. Yes, he didn’t know what he was doing. The best cannabis I have purchased in the last three years came from a little tiny dispensary outside of Bellingham, Washington.
I was very fortunate. This summer, we took three weeks off of life and rode Harleys from Seattle all the way to Anchorage, all the way back to Denver, Colorado. We took three weeks off at this fabulous trip. I walked into a dispensary and just tell this kid, don’t care about cannabinoid counts, don’t care about terpene profile. What’s the best shit you have in this place?
He spends on 180 walks downstairs. I’m like, that’s a good plan. So he’s back up, has this little tiny box. It has a cherry and a lemon on the top. He opens it up and all I can tell you, and listen, I know trichome count on a plant, doesn’t matter to the high it and don’t let, he may tell you, Oh, it’s got so many trichomes it’s gonna extract higher percentages or did you hire, has nothing to do with that. But this thing looked like they’d been dipped in sugar and rolled and maybe subbed through a sugar sib. It was so frosty. He opened the jar, or you know the candle from the drama Washington. I looked out at us at our; I’ll take a half-ounce on it. I had like 14 hours, so I was like, let’s do this. That weed was unbelievable.
I went out of the parking lot, drove down the street, burned one, came right back, pulled the guy, and I was like, “Hey, what’s the story on that weed right there?” He’s like, okay, there’s this guy, he’s been growing this strain for 16 years. This is the only strain he grows, and it grows 18 pounds every two months. I said, okay, and he said, he glasses it up and these little tiny glass jars, and he sells it. And he sells in dispensaries is a little bit [unintelligible 45:16] spot. I said, okay, well, I can tell you I just paid for a half-ounce of weed in Washington state. I paid $240 in a state where you can buy ounces for $50, way over flooded market, way over flooded market right now, and this guy is still commanding on his pound prices, $3,200 wholesale. Because the guys are paying $500 for the ounce, by the time they leave the store because it’s the only package in quarters. It’s the only way you can buy them, can’t buy it any other way, in quarters. That’s it. So this guy is getting $3,200 for a pair on a wholesale in a state where pounds are being sold for $600 to $800. How’s he doing that? Live soil beds, a completely boutique grow that him and his girl are the only ones that work on it. No one else comes in it. No other genetics come in it. Nothing changes. Same thing every single time. And homeys pulling down some money. He’s pulling down some dough. It isn’t too hard to figure. He’d make a $64,000 on Pronto pop if he pulls 20 peas. So there I’ll take 30K a month. We’re going with just me and my old lady, never leaving the property, completely legal. Yes. I’ll take 30K a month all day. Yes. Pay my fees, pay my licenses, and move on in life. So if you want to get in, if you want to protect your money and you want to have a good livelihood and actually be able to leave and have a life, that’s what I would do.
I would start a little tiny boutique greenhouse grow that’s live soil, and I would grow one exotic strain that you are so intimate with. You can see it from literally four tables away and be like, that’s mine. That’s my Jackie cookie. I know what that plant is. I can tell you from here it’s in a week free of vege. And by the way, you didn’t prove it right. Should it prove it to internode six instead of seven? Let me tell you why you get that intimate with a plant. There’s not a dispensary in the state and won’t buy your product from me.
James Brinkerhoff: So you’re basically saying for the person out there that has a few hundred thousand dollars or maybe a half a million or a million that wants to get started or at least figure out you know, there’s going to be a long-lasting niche. You’re saying the craft cannabis market where you create a unique situation with your own brand.
Shawn Honaker: That’s correct. And once your brand actually begins to gain some traction and people realize who you are, you start crossbreeding it. You get all the way up into F3s and F4s; people don’t know what that is, you take a male and a female, you cross them. That’s an F1. You take the seeds that come male and a female that come off that you cross those, that’s enough to so on and so forth. So on and so forth. By the time you get to an F3to F6, generally speaking, the genetic is stabilized, the male and the female stabilized what you want it to be. That’s what I do. I would get intimate with the plant, and then I would start breeding out the cuts of these frames that have bred. I bred them, and then I would start selling seeds and clones of those, but constantly keep coming up with new ones. So take your cherry lemon and cross it with Matt and then do that 4x and then pull that Mack back and back, cross it to a peanut butter breath male and then run those out and then back across it to a Sunday driver and run those up. And you keep doing this. People will fucking sleep outside of dispensaries waiting for your strain drop.
James Brinkerhoff: That’s awesome. That’s great advice cause I think a lot of people out there and a lot of my friends up in Northern California actually, they’ve had a hard time getting into the legal industry.
Shawn Honaker: Got to say, I have to say to those people if any of them listened to your podcast or anything, this is something that I try to always say when I’m in a public forum is we all, everybody today needs to stop and think and, OG, you need to find that really cool uncle back in high school. You need to find your buddy’s mom. It was super cool. Would hook you up, or you need to find these people and thank them. Find someone who’s done real-time for prison from Muslim big packs. Shake their hand and buy them a drink and a steak and tell them thank you without you risking what you, you did. None of this would be saving. Whereas your ODSP at a Northern Cali, I’m not going to teach them a damn thing about cultivating. I’m not going to teach them anything about how the cycle of that plant works. Again, teach them about business.
James Brinkerhoff: yes. That’s really where they need help. Because they [inaudible] their craft. You know That’s where they’re really–
Shawn Honaker: Oh, they know what they’re doing. But now you get all these regulations, and you’ve got people knocking on your door and you gotta do a Michael fungus test. And they’re like, what So Michael fungus test? I get it; I get it. Well, I came from that side to this side, and I’m well versed in this. This shit doesn’t scare me at all. Now I have no problems with this. So I’ll often tell people, if you’re in that position, reach out, get ahold of me, man. Listen, I can’t offer my services for free, but I’m all about trade, man. I like hooking up with knowledge, and I like hooking up people that can share their knowledge with me. It’s not always about the dollar. So if you’re struggling with that, maybe you’re in the wrong community, maybe you’re in the wrong state, maybe didn’t expand your wings and fly a little further from your home to expand your knowledge base to other markets so you can be respected instead of looked down upon.
And if that affects anybody, if for what it’s worth, pack your shit and move. Life is short. [inaudible]in front of you.
James Brinkerhoff: It’s awesome advice.
Shawn Honaker: Enjoy it and chase it because there are people out there, big corporate showing up in Colorado right now, and I applaud it. I’m all for it. I have no problem with it. I’m not the guy being like, Oh, it’s bad. But it’s coming guys. So the more craft people we have, everybody, Oh, this isn’t the time to get in. Yes, it is. If you want to jump in, now’s the time to get in. Make your Mark be different. Do it your way, and I promise you’ll stand up.
Sonia Gomez: Hell, yes.
James Brinkerhoff: How can our listeners find you online. Do you have any social media handles or websites?
Shawn Honaker: yes. Yes. Yetifarms.co, on Instagram, you can look up the Yetifarms.co on Google. You can look me up on Facebook. It’s Shawn, S H A W N, Honaker, H O N A K E R., and my Instagram handle is blondesugar76. You can find you can type around and find me. I’m all-around a very accessible, my cell phone numbers plastered all over the internet, like an orange on a bathroom wall at a truck stop. So anybody and everybody can get ahold of me, and I’m pretty just shooting a text. You don’t get ahold of me. I’m very open to, I mean I’ve got a truck driver. I talked to her every morning from Louisiana that wants to get in the game down there, and he tells me where he’s at in the United States every day. And he tells me about his passion every day, and I give him a little bit more advice and a little bit more knowledge on how to move forward and a little bit more words of encouragement. I’m a very accessible person to get ahold of. So anybody wants to get ahold of me, feel free.
James Brinkerhoff: Awesome, man.
Sonia Gomez: I love it. Well, all of the social media handles and websites will be posted inside of this blog right here that is surrounding the video. Make sure that you guys check out Shawn and everything that he’s doing on Yeti Farms. I literally almost never get to just sit back and enjoy the advice that is coming through on the line during these interviews. It’s often like very heavy on my side sharing. It’s so refreshing to be able to just sit back, and I literally feel blessed by the energy of your work and the amount of time and focus and attention that you pay to excellence and what you’re doing. I also really appreciate how you’ve niched down, and you do the piece of it that you’re really great at and really passionate about, and you’re not trying to be everything to everyone.
I always say that the riches are in the niches, and that translates both in impact and in income. So I really appreciate your approach. For those of you guys who are tuning in, thanks so much for being a part of this incredible community. We live to serve you with the truth about cannabis and hemp so that you can make empowered and educated decisions about how you want to care for yourself. So people that you love, conditions that you may be suffering from or otherwise enjoy and preserve. This beautiful gift of life as a healthy, happy human.