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In Summary
Jose & Derek of Eco Corp join us on the HempList this week, hosted By Chase Nobles, Founder of Kush.com
After having challenges building reliable supply / distribution chains Jose & Derek decided to create a fully Vertically Integrated business plan that can help someone launch a product from seed to consumer sales. Eco Corp has it’s hands on everything from growing Hemp, to processing biomass for minor cannabinoids, and even retail/consumer sales. Learn about how the industry works, and how Eco Corp goes from seed to sale in this HempList Podcast!
Subscribe for more interviews each week, also available on Spotify and podcast apps. Learn more and create your account now at Kush.com for B2B transactions or shop.kush.com for online orders.
Transcript (Auto-Generated)
hey everybody chase nobles here
co-founder of kush.com i’ve got
jose ortiz and derek from ecocorp
how are you guys good how are you doing
well thank you for having us
doing well doing well so it sounds like
your business is based out of nevada
and california california can you know
kind of a pain in the butt regarding
regulations then nevada seems to be the
other end of the spectrum
very business friendly fairly low
regulatory
hurdles uh y’all are you know
one of the big things about ecocorp is
you all promote that y’all are
vertically integrated
what does that mean to you all to be
vertically integrated because the
definition wavers from company to
company
and i’d love to hear exactly what you
all are up to over there
sure um so you know we’ve been in
business for about six years now
my family has land in california that uh
we
we grow so we have farmed several
hundred acres over the last few years
um and we have uh indoor and also hoop
houses as well um so we
farm and then once we take it from the
farm we turn it into crude oil at our
facility in north vegas
and then from there we ship it back to
california where
we have a bottling and finished product
facility so we will formulate custom
products and then
make finished products and then it also
we do a full service fulfillment
for customers as well out of that
location
so if if somebody’s looking for a
custom branded product that they want to
sell either direct to consumer
and or retail they can contact ecocorp
and everything you all do you control
the process
100 from the farming all the way to the
packaging
industry and we actually now also
control the genetics and the seed
program as well so
in our hoop houses now we’re able to
control our own seed
um that we’re going to use for that
year’s grill as well
yep um so right now uh we’re probably
white labeling for about 20 companies
and so there’s 20 brands that
use our products and our formulations
and then we also you know have a few
in-house brands that we use to showcase
what we can do
with our products and we’re building out
a fulfillment center
uh so we can do full third-party
logistics and so we have a customer
that um doesn’t want to touch or see the
product ever they don’t need to
and so we um we grow everything for them
we make all the products for them
it comes into our warehouse and we’re
actually shipping directly to their
customers as well
so that’s something we’re beginning to
take on this year
so it sounds like y’all can be a full
one-stop shop for drop shipping and
everything that’s amazing
now there are there have to be some
downsides to this business model
otherwise everybody would do it and the
downsides are the complexities
the investment the scale
and the the the sheer volume of risk
from every phase of the business
why did you all decide to go vertically
integrated first off and then
how have you managed those risks sorry
to just come at you with this question
but that’s that is that is kind of scary
thing you all got
uh yeah you can do a few uh well let me
let me start off with um
you know originally uh we started off um
you know right at the beginning of you
know legalization of cbd
um we had a brand and um you know
with this brand uh you know we we had um
supply chain issues um so we were buying
cbd from different suppliers um none of
the suppliers had a consistent product
um you know we have to do full panel
testing which is like 400
every full panel test um and also you
know prices varied and so it was just
hard to run a business when
supply just was not like a constant and
consistent product
um so you know we decided hey you know
we should
take on the farming part of it and um we
we began to do that
uh farming definitely has been the
biggest challenge and different from
anything that we’ve ever done before
um and um you know with farming i mean
it’s it’s
really in god’s hands you know uh
if the crops if the crops good or bad
there’s there’s a lot that’s left up to
the weather
um and there’s there’s a lot of
variability there but um
in the processing stage um we’re able to
like remediate and fix a lot of the
issues as well
um so we can streamline and fix all the
products that way
too yeah i mean yeah when it comes to
the farming especially for a new company
that was starting out we
really had to test out a lot of
different genetics obviously we are
growing in nevada where it’s
very hot um so we really had to pinpoint
what genetics work well for us in our
type of soil and
in the type of heat especially when
we’re transferring gotta be really easy
to go hot
with that kind of weather conditions too
right because you know
it’s it’s long days of a lot of sun
things mature a little bit faster i
would assume than maybe
you know where we’re at up and watching
actually it’s actually
a little bit interesting for us because
in the area that we are we’re actually
one of the last
farms to harvest at the end we’re not
finishing our harvest until late
november
and it’s because the the photo period
really changes a little bit later within
the year
in our area but we i mean we always
harvest
a little bit earlier and because it’s so
very hot we’re able to dry on site as
well
so that gives us a little bit of an
easier harvest side for that and
yeah we’re we’re lucky in the area we’re
in um you know there’s there’s pretty
much there’s no
contaminants at all um so all of our
soil has been clean
it’s all you know traditionally
agricultural land but it’s all
been farmed cleanly and um we
have uh we have sixty thousand square
feet of hoop houses that we breed our
genetics in
and so you know controlling our genetics
and controlling our seed
definitely helps us you know completely
create a consistent product there
also because we are doing everything for
our own extraction for our own products
you know we can take a little bit of the
liberty of harvesting a little bit
earlier
because it’s all going to go into
extraction instead of wanting that 12
smokable flour that’s still under 0.3 so
that also gives us a little bit of a
buffer
right now there’s there’s also the
the investment in all that you know 60
000 square feet of hoop houses is no
joke
that’s a that’s a lot of hoop house um
and
to be able to grow and you know that
kind of scale and then have the facility
to extract
all that material i mean you all have
taken on a big undertaking
and uh it’s exciting to see something
like that
how’d y’all get started well you know it
sounds like you all had a brand but
what was the the iterations it took to
get to where you are
now and and how has the market kind of
fueled that
oh that’s a good question yeah that’s i
mean we’re very lucky that we’re still
family owned um so most of the
investment
came from one family that is really
dedicated to make to
making a big impact in the cbd industry
um not only for health reasons but
you know for because that’s something
that they’re very passionate about
um and really starting every process one
by one right not
going full farm full extraction full
hoop house pull everything all at once
but kind of going one by one and you
know trying to get
the most bang for our bucket every step
of the way right
yeah i mean that’s the big reward right
is the margin
the margin is going to be a lot higher
having all of that
process and one on you know under one
roof under one company
right and i think we’re still yet to see
a lot of that because the market has
gone down a little bit on the raman
materials side through
through covid and through last year
however now that we control every step
of the way
as the market stabilizes and prices go
up our prices will stay the same
yeah and you know it helps us stay at
the end of the day
um you know we’re building a business
that we believe helps people
and you know we want it to be accessible
to as many people as possible
through vertical integration and having
all these services in one stop
um you know we think that we can be the
most competitive
and get the product the best quality
product to the most
people at the best price price you know
and
in a good timeline too um but when we um
you know when when
we you know we farm for you know this
the six months
out of the year and then you know for
the outdoor
and then you know for the rest of the
six months i mean pretty much everybody
goes over and is doing extraction the
rest
of the year to to finish out that
product so it you know it’s a full
circle of a year
that it takes us to uh right to go from
seed
all the way to to finish product and
sale
so when a customer approaches you and
says hey i want to do this isn’t it
you know i want to i want to launch with
this product line what are the steps
that you take
uh take them through to be able to get
that product into market absolutely well
we
you know through our vertical
integration and our experience launching
our own brands as well i mean we can
carry everything from graphic design
packaging design not just formulation so
it really is
about sitting down with a new with a new
client understanding what their needs
are
what their hopes are what do what are
they really looking for at the end
and then that way we can formulate a
plan of everything that they’re going to
need based on our experience of our
launches
um so at that point we would say do you
need actual branding we have
in-house branding graphic design artists
that have been doing this for a very
long time do you need packaging we can
also work with that
we’ve worked with so many large cbd
companies on our white label side that
you know we have a very experienced
branding managers as well as formulation
managers
our formulation manager danny was the
youngest sommelier
in in orange county his palette is
bar none the best so it’s really about
sitting down and getting to know our
customers needs from beginning to end to
make
the right plan not just it’s not a
cookie cutter everyone gets the same
tincture flavor
it’s what are you looking for what
potency are you looking for do you want
broad spec do you want isolate do you
want water soluble
we can kind of formulate it all and and
yeah i think right now
you know as as the cbd market matures um
you know and cannabinoids become like
more and more cannabinoids come to light
one of the big things that we’re seeing
is really a transition from just cbd to
all these other cannabinoids and
effects based products we’re really
honing in
you know what each cannabinoid does what
benefits it provides
and how to use it in formulation
effectively for
the the you know as a product and and
out for what the consumer wants
as well as if you know as a as a brand
owner what what you are
gearing it towards so who is your target
demographic
and you know what is your target uh
effect essentially
so does does kush want to make a brand
well that’s a great question derek uh
you know we could
we’ve actually talked about it a lot and
we’ve approached different people and
considered it
um and it’s something that we we would
like to do but
it might not be the kush brand it might
be working with
companies like yours to be able to you
know
help smaller brands or people that want
to start a brand get up and going faster
everything from the sell through
all the way to the production and um you
know we wouldn’t be able to do that
without partners in reach
uh we’ve got the reach it’s about the
partners so meeting people like you all
is a
great opportunity to kind of have that
conversation so we should continue that
um sure absolutely so let’s do the spin
zone okay
i would absolutely love to have that
conversation and introduce you to the
team but that being said
you know with all the products and the
brands that you work with
there has to be a limit to the different
type product types that you all offer
um one because you can’t do everything
all at once
what types of products do you currently
have going into the market and where do
you see that production extending
over the next year so
so currently um we’re doing topicals in
the form
of like lotions and creams um we’ve got
soft gels
um and you know tinctures topicals
um smokeable flour pre-roll cbd vape
vape juices um right now um
our biggest endeavor is a gummy machine
so uh we got a gummy machine that was
supposed to arrive last year
and we just got it and um because of
cobit it was
you know super delayed and you know we
get it to our building and
our building power uh is less than it
was advertised and
um you know i mean we basically have to
revamp uh the entire building’s
electrical in order to get our machine
running so
we’re working with the power company uh
in our neighborhood to upgrade our power
so that we can
start this gummy machine up but i mean
you know that that’s one of the big
things
about you know setting up all these
businesses is really
the timelines for things you know um
farming
well it was supposed to take a question
of time and it’s like triple that
extraction was a year and a half almost
two years behind or gun machines
you know derek it sounds it sounds like
you’re in the hemp industry
because i think everybody’s dealing with
that if it’s not
building power it’s the local
regulations and the packaging changes if
it’s not
the you know if it’s not getting your
the right genetics on time
it’s the fire marshal and so it’s just
for anybody
anybody out there because we have a lot
of people that listen to us thinking
about joining the industry
anybody out there go ahead and multiply
your timelines by three
on production yeah because no one can
take it’s
if it’s not you know if it’s not you
know delays on
equipment it’s gonna be uh bank shut you
down right like it’s it’s
always something it seems like in this
space and so
i i i think everybody’s dealt with their
handful of those issues so
just psa multiply it by three and you’re
probably more accurate
than what you think you can do it in
yeah would you would you all agree with
that that’s i guess that’s a good
question would you all agree with that
yeah i would agree yeah yeah definitely
three three is a pretty good number
and even even if you get up and running
as well once you’re running you know
it’s such a
new industry that you start learning so
much that for example for our extraction
machine we’ve probably modified
the process in the machine itself like
four or five times
so now we’ve rerouted a lot of the a lot
of the systems and have
upgraded or changed them so it’s been a
continuous learning
learning curve for sure yeah i mean
there’s there’s always improvement
um to be made um you know we’re always
figuring out oh this can be done a
little bit better this can be done a
little bit better
and so you know it’s a monthly thing
just basically rebuilding all of our
equipment and reconfiguring things so
that things can move faster and better
no one knows the more the more you know
the more work you create for yourself it
seems like
all right that being said let’s jump
let’s jump into a hot topic something
that
a lot of people have a lot of questions
on uh minor cannabinoids
and what’s gonna happen there because
you know as you mentioned derek the
price has changed drastically on the raw
materials side
fortunately with the vertical
integration y’all are y’all aren’t
eating that
nearly as much because the profit margin
has to be higher for that model that
makes sense
but right minor cannabinoids is a sector
of the market that a lot of people are
investing a lot
time and money into making work
uh with shifting regulations how do you
all look at that market
um whether it be cbg cbns you know
delta eight all of these different
cannabinoids
what’s the plan there and how do you see
the market picking that up
especially the consumer side of the
business
well i mean really the hot topic here is
delta eight right
that’s what a lot of people are really
asking about we know there’s certain
states that
have already started to ban delta eight
however we already
you know have ways and we we can make
delta 10 and delta 11 as well
so i don’t you know i think it’s going
to be a little bit of a thing that state
states are going to be behind to
regulating them
so it’s really going to be you know
which states will allow not only the
production but the sale
of certain uh deltas right i think out
of the whole industry the delta side is
the most controversial cbg well you can
run a genetic that is all cbg on it and
that’s full
hemp right so that that you can extract
yeah i would guess cbg is the
least regulated right because of the
if you’re harvesting cbg there’s not
going to be much if any thc in it
because it’s so high up in the
deviations of of the cannabinoids right
and then
even things even some minor can
ambiguous like cbn which is the other
most popular is a lot of people don’t
realize if you store your biomass
properly you will have you will convert
a lot of the cbd into cbn you have to
store your
biomass for a year or longer right so
there’s obviously ways that we can
that cbg and cbn are going to be fine
within the industry i believe
especially because you know they’re
naturally occurring within the plant and
they’re easy to
extract i think it’s mostly the delta a
10 11.
probably we’ll figure out a way to make
- that’s good that’s a little bit of
the hot topic what do you think
um you know regulation is always a
moving target
and you know all we i think all we can
really hope for
is that the you know i i think
the healing properties are the most
important thing to focus on
um as we you know there’s there’s more
and more studies every day that
you know hemp and cannabinoids and are
are helping people and i think
i think the cat’s out of the bag you
know in in general
um that you know there’s a medicinal thc
market and uh you know with the
legalization of hemp i don’t think
i don’t think there’s really anything
that can take it back
so it’s just really i think you know how
regulated is the hemp market compared to
the thc market and
which which is going to be regulated
under
uh like marijuana law versus which is
going to be regulated under hemp law and
will at some point these two converge
right now with your
production you know divided into two
different states
what has it been like working with the
you know the
nevada department of agriculture and
the 15 regulatory agencies that you
probably have to talk to in california
what has that been like comparing the
two states and operating in both of them
uh we actually have a really good
relationship with with the state of
california
um they you know the department of
agriculture
really likes those we’ve been working
with them for a very long time now
but we’re not to name any names but when
we
started farming we’re you know one of
the earliest to farm in california
when they actually came out uh to test
us
um they actually asked us how to
regulate ourselves
and so they actually asked us well you
know can you help us
give us guidelines on how we should be
testing you
and so we probably have influenced
how some of the testing regulations have
been done
um for good or bad but you know it was
still obviously following
the bill yeah we’re doing it as it
should have been done but they you know
unfortunately the department of act just
didn’t have a good idea on how to do
this testing obviously it was all really
thrown on them last minute
so they they we we’ve even consulted
with them on what type of genetics where
are they coming from what should be a
genetic the california
says that it’s an approved genetic what
licensing does the seed
company need to have for it to be an
approved cultivar so
you know we’ve worked really close with
them this this entire time and we
actually
farm all in california and then we
extract everything in nevada
gotcha is there a reason for that uh
the simple reason is we we own the land
yeah
it was it was a like legacy um legacy
land
legacy farmland um that we uh
were able to convert to production
however that legacy farmland is
in the state of california but it’s only
about an hour away from las vegas so it
only made sense for us to be based out
of las vegas and drive
out there for one hour yeah right
awesome now that sounds amazing and
finally you know before we wrap this up
where do you all plan to go in the next
year
you know you kind of you can you can
build the brand out of the box
for anybody listening if you want you
don’t want to launch a hip product quick
and easy
it sounds like eco uh eco corp is a good
place to start
but where do you see yourselves in the
next year uh that way
12 months from now we can check in and
see how you guys are doing
yeah i like that i like that so um i
the the biggest thing for us right now
um you know
is is really the 3pl we’ve had the most
requests for full third-party
fulfillment services
so we have all the product we make
everything all in-house
and just just drop shipping everybody is
really really pushing us towards that
and so you know we’re
we’re you know we’re met with the
challenge to create you know different
you know unique products for different
companies
and then basically help them sell it all
right
you know and help them do all the
warehousing and fulfillment for all of
that and so
the logistics part is probably the
biggest thing for us this year
um for sure yeah and i think a lot a lot
of it
it’s also going to be rnd you know
really really honing down on some of the
minor cannabinoids that are coming out
understanding them a little bit better
and hopefully be able to produce new
new products that they can help even
more people as well
right on well that sounds like a
beautiful mission i’m excited for you
all
congratulations on everything that
you’ve been able to accomplish
uh since you started and i look forward
to checking in and see how you guys are
doing
it’s a pleasure to have you apart as
part of the cush.com network
and i can’t wait to see what you all are
able to do awesome thank you so much for
having us
thank you of course we’ll talk soon