Podcast Episode #119: From Bootstrapped Start-Up to National CBD Brand with Ben Ripley, Co-founder, and CEO of Sunny Skies CBD

Tue, 10/6 11:29AM • 57:40

SUMMARY KEYWORDS

cbd, tincture, people, distillate, product, lab, ethanol, processing, cbg, wisconsin, cannabinoids, colorado, hemp, sunny skies, grew, extract, thc, company, nice, big

SPEAKERS

Vadim, Ben

PODCAST RECORDING

PODCAST TRANSCRIPT

Vadim  00:09

All right, and we are back in class. This is Vadim the CBD professor from CBD school.com your school to learn all about condemned everyone it's Vadim, the CBD professor, and our sponsor, and guest for this episode of the CBD school podcast is Sunny Skies CBD. Make sure to check them out at sunny skies cbd.com. It's spelled Sunny Skies CBD calm. And I think you're really going to enjoy listening in on all of the insights from the field from our guests then at sunny skies. So they have also one of the coolest, most transparent aspects I've ever seen. You can visit their facility if you're ever in Wisconsin for a tour at any time and make sure to contact them in the information we're going to leave in the show notes for this episode. So if you ever want to tour their facility, whether you're a customer or looking into doing some wholesaling with them, you can visit their facility and just drop in and check out everything that's going on there. without really making an appointment. I think you can just drop by and they'll give you a tour. So make sure to check out sunny skies CBD at sunny skies cbd.com. Thanks for listening and enjoy the show.

01:43
We are back with another episode of the CBD school podcast during these quarantine times, and I have a great guest today. I am on with Ben Ripley, the co-founder and CEO of sunny skies, CBD. So Ben, welcome to the show.

02:01
Thanks for doing that. As I was telling you before we hit record doesn't listen to you for a while. And it's a great honor to be on. Thanks for having me.

02:08
Well, yes, it's an honor to hear that. So you were telling me how you had found the podcast when you moved to Wisconsin? Is that where you're calling in from now?

02:16
Yep. Yep. So we're in Durand, Wisconsin. It's in West Central Wisconsin. About 60 miles southeast of St. Paul. And yes, it's a little town. 1900 people. My dad grew up here. My grandparents are still living here. So that's home.

02:32
Yeah. So where did you move from? I understand you didn't stay there your whole life?

02:37
Correct. Yes. I grew up in Colorado. So my dad and I have six younger siblings. So we were all raised by my dad. We grew up in Colorado, but we would come out to Wisconsin to Durango every summer to visit his parents and his best friend Pete Adler, who is now my business partner, and I'm sure I'll tell you that story.

02:55
Oh, cool. Okay, so you did you move back to Wisconsin as a home base for the business? Yeah. So

03:00
I guess taking a step back. I'm pretty young 26. I graduated from the University of Colorado Boulder and 2017 study business and foreign language, and Spanish and Portuguese. But right after I graduated, I had a sales job lined up for a third-party logistics company. And I had mostly taken that job because I had a girlfriend at the time, we'd broken up and I just thought, why the hell am I even getting in this corporate rat race. I needed a job in Denver, but now the world is sort of my oyster. So I went I traveled the world for 18 months, about a year in, I got a call from a friend's brother. The friend's name is Chris, his younger brother, Andrew had just started a CBD company. Chris and I are good friends. And he knew that I'd studied business and had all sorts of internships, you know, and supply chain management and finance and marketing and stuff. He needed a business partner that understood the business world. But cool, actually, he didn't even hire me as a business partner. He hired me as a salesperson. The arrangement was I would work remotely from wherever I wanted. I started in Ghana in West Africa. But I would do commissioned sales and the plan was, there were two founders both named Andrew. The plan was to work as a broker and buy cheap isolate and distillate from labs in Colorado and sell it to product manufacturers in states that didn't have as developed an extract market solely for the purpose of raising enough money to launch our own product line. We started in an apartment formulating tinctures which at the time wasn't even against the rules. And the company grew, you know, we started with absolutely zero sales besides you know, we'd make a few hundred bucks here and there, flip them kilos of ice distillate, but then we quickly went away from that we dedicated Zero time to brokering as soon as we had the money to launch a product, we still had some residual broker deals that came in that that floated some product expansion. But we specialized in tinctures and topicals. We did every single thing ourselves. Oh, and I actually take this step back to so when the commission sales gig, I made a couple of sales, and my commission was 50% of the profit. And so the two business partners were then splitting the other 50%. So after a couple of sales, they just said, hey, you're the only one that's had any success selling the stuff, you've had a bunch of good ideas, launching Come on as a partner. So we scrapped the 50% Commission contract and I became one-third partner, they were really handling all the product formulation. At that point, I was still living abroad. But eventually, after a few months, we got enough traction where we had steady money coming in, and it looked like we're trending towards becoming a real business. So I moved home. And we just started selling really and got tinctures into a few different retailers got some white-label accounts expanded into topicals. there's a disagreement between the three of us at one point and one of the partners parted ways. And so now I was 50% owner, and over the course of 14 months, we went from making stuff and an apartment to getting an office with manufacturing space. It's really bare bones, we hired temporary workers. And over the course 14 months, we went from zero sales to the month I left we did 170,000. And then during that time, we were selling primarily locally, as one does as a new company. But as we got bigger, we started to call out of state. Colorado, of course is kind of the mecca of CBD California is incredibly upset about that comment, but

06:51
so we started selling out of state and we were just blown away by the prices, some of these retailers in what we deemed as underserved markets. So like the south, Midwest, Appalachians, northeast, southeast, they were all paying, we would hit them up and offer 1000 milligram tincture for, you know, maybe $30 wholesale price, only to find that these guys were paying 50 and then charging 100. And so we were able to offer them much better margins for a very similar product. We were sourcing from good labs and had good ingredients. And yes, it was the out of state sales brew. And it became plainly obvious to me, Imagine how easy it would be to sell to these guys, if we weren't some random little company in Colorado that they'd never heard of. If we were based in the Midwest, and we had brand recognition and even processing, imagine if we could get down the cost of this extract by processing. But Andrew and I did not want to take on any other partners we loved being self-employed, we lived the business, you know, running our own little company. Andrew did not want to leave Colorado. And so I was able to sell my half of that company with no non compete agreement. You know, with the understanding that I would, I would go out to the Midwest and start a company of my own. My dad actually floated the idea. Pete Adler is I mentioned his best friend sound my business partner, he has been teaching his whole life. And he's just got a couple more years left until he gets his retirement benefits. And he had been talking to my dad about his dream of starting a small business and having something to work on with his sons and leave for his sons and his daughter. And it occurred to us, hey, what better business partner than Pete. And so that's when the idea was hatched, we bought the domain and registered the company in January of 2019. I helped the company in Colorado transition for a little while and then came out to Wisconsin in June when we were transplanting seeds from the greenhouse to the field. So I basically got to Wisconsin, we're immediately on the field. Sorry, long start.

09:11
Now it's alright. It's quite a startup story. A lot of the people that listen to the podcast are actually entrepreneurs, or they want to get into the space or they're on their path as you were when you started listening to it. And I think they're going to benefit from that because you went from just traveling the world as a commission-only sales in which I've done that myself. And you just totally transition to, you know, having your own company with a legitimate brand and controlling the whole operation, as I understand.

09:43
Yeah, that one thing definitely led to another and we worked hard to

09:48
make sure it's I think this business is a lot of people think it's easy or they think it's going to just sell itself it does not for sure. And it's you still have to do Like any other business you know its soul involves a lot of steps and especially with the manufacturing that a lot of work so it's sunny skies growing its own products like every just doing everything vertical by yourself.

10:13
Yep, yep so we buy seeds and then from there from basically from soil. We're vertically integrated we grew we were 10 acres last year got about 20,000 pounds of biomass from that. In the lab here we do ethanol extraction, distillation, THC remediation to bring a full spectrum distillate to a THC free broad spectrum distillate. And then we also do all the product manufacturing here in the lab. And so not only the sunny skies, CBD brand, but we do a lot of contract manufacturing as well for other brands.

10:48
Okay, okay. So you're doing like some private labeling everything. Exactly. Okay. So that's one thing I want to tell listeners. So if they want to contact you, they can get in touch for pricing and how that works.

11:00
Yeah, absolutely. My email address is Ben at sunny skies, CBD, calm sales at sunny skies, CBD calm also go to me. And then if you do have any questions about private label design, or white label manufacturing, or custom formulation, manufacturing, all that information is available on our website. And then we also have a YouTube channel, just type in sunny sky CBD. There are a plethora of videos, one about each of our wholesale services and then

11:28
some other ones. Yeah, that's great. I will put that in the show notes too. It's nice that you have a YouTube channel I miss. I really miss mine. I, unfortunately, had it ripped away from me by YouTube a number of times, they would take it away, then give it back, take it away, give it back. But this last time they just took it and took it down. And that's it. I haven't been able to get it back up. Wow. Just woke up yesterday. The reason they sided. Well, they always say you violated their community guidelines, I guess, because of a lot of my videos. Although I never gave any kind of ever I explicitly told people it wasn't medical advice until we, I mean, every video was like, This isn't medical advice, talk to your doctor. But, you know, as much as I tried to shy away from that they still decided that it wasn't okay. So it's a good way. I mean, I still have all the videos packed up, and a lot I get emails all the time from people asking how they can access the videos. So I'll be uploading them soon. I think to it just a different platform and like Vimeo or something like any there's another one but it's something I missed for sure. So yeah, I think it's it's okay though it's happened to a lot of people actually. But with sunny sky CBD, where did the name come from? It's I do like to name a lot of roles very well.

12:45
We wanted something positive. And we've there were young million names that we wrote down and floated. We crossed off probably three quarters of them when we went on GoDaddy and to see if they were available. Someone's out there just buying up every single CBD company name you can think of but we're fortunate that sunny skies was available. And we liked it as soon as it got thrown out. I can't remember the thought of it. But it says it was thrown out there. It went to right to the top of the list. We pretty much stopped our search.

13:16
Yeah, I like it. It rolls well and it goes with your with the agriculture parts and sure you're doing the growing in Wisconsin, I guess it's a good season, right like because in the it's cold now probably still but but it gets pretty hot and warm for the summer is decently long, right?

13:34
Yeah. It's definitely colder than Colorado but the weather is more predictable, which is nice. For example, like in Colorado, I think most of the the CBD or hemp is grown in Pueblo. Pueblo. They liked it. Yeah. And my dad works there. But if you look at pueblos average monthly temperatures, I'm sure it's 1015 degrees warmer than average temperature in Duran, maybe not in the summer, but the likelihood of an early frost in October in Colorado in Pueblo is much higher than it is here. So that's one benefit. And then another Wisconsin was the premier hemp producer as I mean, I've heard people from all sorts of different states say that there's used to be the number one producer of hemp, but that is a commonly cited piece of information. I don't know if I want to call it a fact. But Wisconsin has historically been a big hemp producer. So we do have an advantageous climate for that.

14:28
And the law there is be supportive the government

14:31
Yeah, extremely so dat cap, the Department of Agriculture, trade and consumer protection. I think they are the regulatory agency that oversees CBD in Wisconsin, and they are very, very easy to work with. They are understaffed, but they're super responsive. We're going into the third year here and 2020 of the pilot program. So we came in at the beginning of the second year. But yeah, it's been they've been great to work with no complaints.

14:57
It's great. That's great. That's it Pennsylvania, that's where I currently live in Mexico. But my dad, he grows hemp in Pennsylvania. And he, he had a really good experience with the program too. It was very easy to work with them and they were supportive and no issues. And we got a nice crop last year with about not 10 acres, right, much less than that, but it grew very well and we got the super I don't know why but we got these some reason ours grew extremely tall, like they were I'm almost six foot and they were 910 feet tall plants. And we couldn't tell why because it was, you know, is our first time but other growers were growing those like more short variety. And I forget Wyatt not sure but do you grow? Just one kind of variety that CBD rich? How do you pick that out?

15:49
This we got a suggestion on a seed company to work with. And I'm going to keep the head

15:55
close that

15:56
Jackie, because they have a limited supply.

15:59
I understood. I get why you want to keep it secret.

16:02
But so we reached out to them and said, Hey, we really want to work with you guys. We've heard nothing but great things do you have any strains that I've had successful grows in Wisconsin, and they had three dads successful growth, and two of them are sold out. And so we were left with Hawaiian haze. And so we went with the Hawaiian haze, we grew all 10 acres of Hawaiian haze last year, and we had tremendous results, we've had material tests between 16 and 21%. Total cannabinoids still way under the point 3% Delta nine, some of the best crop I've seen and all the lab results are on our site. You can check out drone footage of our field on YouTube. But uh, so you know that this next year we're going with the whole philosophies ain't broke. don't fix it. We're gonna grow. We're doing 17 acres this year. We're dedicating half to twine haze and half to a CBG dominant strain.

16:59
Oh, nice. Nice. So I just had someone on the podcast, they do CBG and CBN. isolates. So interesting. Do you think that those cannabinoids Well, what do you think's next in terms of cannabinoids, DC CBG is going to be the next big one.

17:13
Yeah, I think CBG is the farthest along for sure. CBN of course a super promising for sleep. Yeah. And that is an exciting one. But right now I think kilos. I think all the different Canadians after CBD, my prediction is that other minor cannabinoids will follow in a similar path becoming more available in genetics for seeds. And then therefore, you know, more of a grown more to process the price will drop you're seeing that already. Like when going back, you know, three years to when we were selling Iceland kilos were five $6,000 apiece, and now you're seeing you know, prices that are stirred are lower than that. And you're seeing CBG now have prices in that neighborhood and what were CBD was a few years ago. And I think it's going to keep going like that. And CB n is probably a step behind CBG and in my opinion will kind of be third. I don't have a real good sense of what number four when I would guess number four would be but yeah, right now CBN is prohibitively expensive, so you're not growing and processing it but energy is less and less so every day.

18:22
So what is the you know, you mentioned the kilos so I always look at the kilos prices like the trajectory of where the industry is going. So when I got into it in late 2016 I remember kilos were 10 k like good good price with 10 k key well what do they sell for now for just CBD.

18:38
So you can check out our pricing. My market guy will kill me if I tell if I just say the price right now because we move with the market. But if you go to our site right now and click on the wholesale extracts under the wholesale tab has current pricing for CBD isolate full spectrum distillate broad spectrum distillate as well as CBG isolate and then a broad spectrum CBD distillate that has no THC. But generally speaking right now we're in the thick of the Corona, April 2020. I've seen CBD isolate prices, consistent supply from actual lab being under $2,000.

19:17
Wow, that is cheap. That would have been crazy. If he said that when I first started. I mean, we thought back then 10 K, like I'm saying was a good price. So it just shows you how much things changed. And this brings me to a question I wanted to ask you, where do you see this space going? I mean, it's just it's moved so quickly since it got really there was kind of the first wave in 2015 where no one really knew about it. It was a more of in the it was still part of just the the marijuana world and then the second wave was the hemp waves like in 2017 18. And we're still I think in that inning, but where do you see it going next?

19:55
Well, there's so from the grower processor side. I think right now The bottleneck is in processing particularly farther down the chain, if you will. So, for example, right now, there's not enough people doing ethanol or co2 extraction to make crude for how many people grew. Now, if you take all that crude, there's not enough people are companies processing that crude into distillate right now. And you know, you keep going down the chain that a lot of companies that have a bunch of full spectrum distillate, they can't figure out where to get that processed into a broad spectrum distillate. So I think as time goes on, you'll see some of those bottlenecks in the industry, supply and demand will have its way and those will flatten out a bit. As far as product side, I think the FDA is going to grant this giant caveat, I don't spend every day reading about what the FDA is going to do like some people I, you know, hear talking, because all they can talk about, but I would imagine that the CBD is going to be designated as a dietary supplement at least ingestible products. And when that happens, there will be regulations around what kind of facilities and processes you need to have in place to legally manufacture and adjustable product. Certain municipalities like Denver, for example, they passed a law on I think, like 2018, that all ingestible CBD products that were made in Colorado and sold in Denver had to be manufactured in the licensed food processing plant, too. That means that all these labs are making product, they have to go through their state's food processing plant application process. It's not very difficult. But in order to be certified, you have to follow GMP requirements for your facility processes like record keeping and slps around everything you can imagine sanitation, and we went that route. Wisconsin does not require it yet. But I think the pattern is going to be certain municipalities taking the lead and sort of legitimizing the manufacturing part of CBD and then other municipalities following suit. Where are you seeing that's required in Colorado now, I'm sure it's required in lots of other lots of other places. But for example, in Denver, I think it was in 2018, companies selling ingestible CBD products with edibles, drinks, tinctures, those had to be manufactured in a facility by a licensed food manufacturer, the licensed food manufacturing facility. And Wisconsin hasn't gone that route yet. But it was our belief that they will A B, if we get a contract to make an edible, or a tincture from a company that has legislation, such as Denver's in their area, in order for them to sell a product locally, they would need to be also getting their product from a licensed food manufacturer. So that's just one sort of regulation I could see as more control over what kind of environment these products are made in. And you know, the processes are going into that.

23:03
I think, you know, what you said there is pretty likely to happen as well. And and I think it'll be good. I think the more regulated it gets, and the more safer. It is for consumers and more to standards there are you know, it's going to be better, it's just going to be more organized. And and consumers can choose instead of choosing like, hey, which one is safe, they can choose which one they like as far as like product features, pricing, branding, whatever they want, you know, but they don't have to worry that it's like, you know, when you go buy like protein bars or something you never think like was this made in someone's kitchen? You kind of already expected you know? Yeah, you know what I mean? So you pay more like on like, I don't know what how many carbs that has Whatever you're looking for. But nowadays with CBD is like, there's that additional element of people are still I think a little bit. It's gotten better, but like, they're still a little skeptical, probably because it's just a new industry. But it's definitely gotten better from where it used to be for sure.

24:05
Yeah, from a consumer safety standpoint, it's obvious needs to happen just from being you know, like a selfish person in the industry. My career trajectory, I guess, and CBD would have been a lot different had these kind of regulations already been in place. So I admitted we were making products and in an apartment and it's not we weren't the only people doing it. It's still it's still going on. And you know, those barriers to entry is it's going to be tougher for the little guy and that's going to help out more established companies. But you're right, it needs to happen for consumer protection for just the legitimacy to get the kind of Monkey off the back of the CBD industry that you know it is kind of a wild west.

24:44
Yes. Yes. So one thing I haven't asked yet I'm surprised we've already been talking for quite a bit I haven't asked how did you first get into CBD What made you did you try it and what how did you first hear about it?

24:56
So growing up in Colorado, I you know grew up around cannabis So CBD, for example, I knew that CBD was a cannabinoid and that it had certain medicinal properties, but I had never experimented with it ever. So, Andrews older brother, my old partner back in Colorado, he was the first person who ever told me about it. He had been working as a master grower in Las Vegas, and these guys were growing a bunch of CBD. And he was fascinated with it. So he had some laying around at some point, I tried some but I lucky I have no pain, very low anxiety. So I I use it regularly for for recovery from exercise, but took me a long time it took me you know, months of owning a CBD company before I even started to use it regularly. But yeah, it was definitely I was almost into the CBD industry working in it. Before I had used CBD. No more than a handful of times. Of course, I went online Read all about it. Yeah.

25:59
It's cool. Yeah. So where did you grow up in Colorado in Boulder?

26:02
No, I grew up in a town called monument. It's just north of Florida springs.

26:07
Okay. Yeah, cuz I lived in Colorado for short periods of time I lived in Boulder and Longmont and nice. Yeah, I mean, I remember cannabis has always been obviously popular there. But CBD even wasn't that popular in like when I lived there in 2016. It wasn't as big as it is now because the whole hemp thing wasn't big yet. It seems like the hemp movement is really what pushed the CBD movement. Yeah. I'll probably agree with you. But it is remarkable how quickly it emerged. Yes, yes. You said you had traveled the world did you come to places that you saw that were was also gaining in popularity from your travel?

26:46
Spain is the only spot that I saw CBD everywhere. I like to travel in the developing world to lots of Latin America and Africa and Asia. And there you'll never find CBD. Eventually. Hopefully you will. But Spain I saw a lot of it. And other than that, I do not remember CBD catching my eye.

27:06
Yes, I agree with you. Every time I've been to Spain, it was everywhere, actually. And they have a long history of cannabis. And did you go to the museum there in Barcelona? Yeah, I did. Yeah. Yeah, I think. Yeah, so that museum is a beautiful building to inside. And you can tell they've known about CBD for a long time, just just from the the history going back with Amsterdam and then just researching it for a while. It's It's funny how people are just learning about these cannabinoids, but they've been researched for quite a bit. You know? 5060 years people have been researching these cannabinoids.

27:44
Do you know when the first time CBD use was was recorded?

27:48
I think in Israel when they were researching THC, they would research the other ones as well. So when Miss shulam the guy in Israel that synthesize THC, him and his team would I think experiment with the different cannabinoids but CBD The interesting thing it was discovered in Minnesota, you know, your neighbor there in way back. And it was the first cannabinoid it was discovered before THC actually from hemp. It was isolated from him way back. And like I think the 1940s by scientists, I forget his name, who was studying him just like field him growing outside. And they found CBD but they didn't. I don't think they knew what to do with it, or it was not used for anything, really. But you know, going back to your question, when was it first used? I mean, thousands of years ago, because it's always been part of the plan. So a lot, right? Yeah. Right. Just people didn't know what they were doing and thinks the history of the plant is really is really what's cool. And that's always attracted me to it. Yeah, I agree. So what do you do? I know you earlier you were you're in your lab, I guess your office, your lab right now. And you were saying what kind of extraction methods do you use there sunny skies. So we use ethanol extraction,

29:02
and then the next step of the process. So with ethanol extraction, I should talk about that a little bit, we use a super cooled ethanol is cooled a negative 80 degrees Celsius, and the crude oil that we use in that process is fully winterized. Next to the process is alcohol evaporation. So you're going to have some residual ethanol in your rock crude. So we process the rock crude to a refined crude by evaporating off alcohol and water. So then you have a refined croods, typically in the neighborhood of 55 to 60%. So you can use that crude to formulate products, lots of companies do you hear it called like a fully or a truly full spectrum product, because as the full terpene profile, the sunny sky CBD product line uses distillate though, for our tinctures and most of our white label accounts due to that we use crude and plenty of product formulation. So we use a wiped film molecular still distillation system. That will bring your crude it'll process it from that 55 60% up or over 80% CBD. And then obviously that's a concentrated your plant material. So that distillate will be up around 80 to 90%, CBD, and one to anywhere from, you know 6% if you've got some bad ratios on your material, but for our material, we're up over 80% one to 3% THC. And then that to get back under that point 3% THC, you need to mix that extract into a carrier oil for a tincture or, you know the rest of the makeup of an edible or a topical solution.

30:42
Interesting. So you're not doing it co2, it's all ethanol. It's all ethanol. And what what made you choose that

30:48
scalability a with the co2 systems, please space us the research I did. It is hard to compete with ethanol machines at a lower volume or lower extraction capacity, co2 systems, they tend to be more advantageous for larger extractors as far as cost is concerned. However, at a large scale, co2 is no more expensive than ethanol. So we could start relatively small and scale up with an ethanol extraction setup. That was the primary benefit. And then number two, as long as you are remediating the ethanol, or purging it rather, there is no difference in the quality between a co2 extract and an ethanol extract. In fact, some co2 extracts, you'll see some some liquid contamination, although most companies have figured that out. But the ethanol is that those are the main reasons is,

31:45
well, I've heard that in addition to what you were saying the benefits are also that it doesn't preserve the minor cannabinoids and terpenoids better than co2. Is that accurate?

31:56
I'm not sure like I told you my backgrounds in business and fortunately I have people on staff. That's I handle all the processing stuff. But I do know that we are retaining all of the minor cannabinoids, we have the exact same cannabinoid ratios in our original hemp material that come out in our distillate. So we are not experiencing any minor Coonamble and loss.

32:19
Okay, okay, great. That's good. And I'm not surprised if the business sales guy doesn't know that stuff. No, no worries.

32:26
That's pretty normal. Like, I hear that. If I handled the process, and we'd be in trouble. Yes, I know, with a lot of aspects of the business.

32:33
Yeah, that's fine. I completely understand that. And I think it's good if it's that way. So yeah, I know a lot of people are always wondering what's better with ethanol or co2, but I keep hearing from a lot of people that ethanol is superior for for just a number of reasons. And one of them is scalability. Like like you mentioned.

32:52
Yeah, actually, I think you hit the nail on the head I was gonna add to but it's basically just repeating what you just said.

32:58
Cool. So we talked a good bit about the business side, I'd like to get more on to the retail side because half the people that listen are probably, you know, more the entrepreneurial type and the other half are CBD users. So for someone that's new to the brand sunny skies, if they've never heard of you, what products would you recommend that they check out or they're just getting started? What product would you push them towards?

33:21
We're a believer in the tincture as a delivery mechanism. We specialize in tinctures, topicals pet products and edibles. But we push almost everyone towards the tincture. The bioavailability is great. The dosing is extremely easy for self experimentation is more affordable in most cases. And it's convenient but however we do really believe in topicals we have three different topical formulas. I personally always push people towards our CBD freeze which is a bio freezer Icy Hot inspired, topical so it has the ingredients that give it that heating and cooling sensation or menthol tea tree oil, aloe vera and that is by far our highest selling topical, however some people don't love that heating and cooling sensation. We have two other top goals are CBD savs which has a beeswax coconut oil and grapeseed oil base and a nice blend of essential oils to really good savs that's you know obviously sort of the the standard CBD topical format and we make a great one. The third is our CBD moisturizing cream that has a shea butter and cocoa butter bass has a subtle fragrance of fear wood lavender, tangerine. That one is amazing for anyone who wants to use CBD topically for pain or inflammation, but also would like to moisturize their skin. So we're seeing a lot of people using it for their face or sensitive areas. Those are the three topical options as far as going back to tinctures we have three different extract varieties. available, we do a full spectrum, a broad spectrum and an isolate. The isolates are the most affordable. The broad spectrum are the most expensive because I teach the remediation process isn't cheap. We offer three different flavors currently unflavored, peppermint and vanilla. But if you are a white label customer, of course we can add whatever flavor you want. We also have a pet tincture. It is an isolate tincture, because we did some taste testing with various flavors and carrier oils and extracts and some dogs just hate that desolate taste. Yeah. Yeah, they don't know like that. And the flavor that that did the best in the taste test was bone broth collagen. Yeah, that makes sense. And that product has been really popular. And then as far as we have three specialty tinctures too, which are sort of unique formulas. One is our CBD plus CBG tincture, it's a one to one, fat one. I've actually got a story about CBG we can save if we have time, but we got that one. Then we have our two terpene infused tinctures, the morning drops and the sleep drops. The morning drops are flavored with limonene terpene isolette. And the sleep drops are flavored with a linalool and cumulating terpene. Islip

36:18
Oh, nice. I like that. What's the story about the CBG?

36:21
So back in Colorado, we were making a broad spectrum tincture that was had, you know, off the charts CBG for just a regular broad spectrum CBD tincture, enough so that we could mark it as a CBD CBG tincture, and we had a customer Do you know what Bell's Palsy has? Yes. Yeah, so Bell's Palsy is a nerve condition where the nerves and typically just one side of your face stopped functioning for time. Yeah, my friend had it from we had a from value and that's common. It's often from a virus for brought on by a virus. I'm not sure exactly how but we had a guy who's a he's a wall street guy. And he had Bell's Palsy for a while, and he would get sometimes some people will, it'll flare up sometimes, but the vast majority of people get Bell's palsy. I think it's 80%. The condition it goes away after a month or so and typically never any residual side effects or recurrence. But with this gentleman he would get it would flare up about a month every year, and you'd like to drink and when he would drink it would get way worse. And he was in just a tailspin where it had gotten bad for a month and it was not getting any better. And a mutual friend of ours connected us and we sent him a tincture and he tried it. And again, this is completely anecdotal. But his Bell's palsy. The pain subsided almost immediately said 90% pain reduction within the first half hour. And then over the course of the next two weeks, the droopiness in his face got gradually better until it was almost gone completely and then after a month it was gone completely. And then he's been on a steady regimen since we asked him if it was okay to contact us a news agency a website about it. So we sent out a tweet kind of rewrote a little story about him got it approved and sent it to some media outlets got picked up by a few big ones like fresh toast and MSN several. And from there on about once about an order a day we're getting for 1500 milligram broad spectrum CBD plus CBG tincture with varying degrees of success. I mean, we don't know how many of the people that ordered those bottles did have Bell's Palsy but many of them would reach out and ask questions. And we tracked it. And you know, over the course we had two or three dozen people with Bell's Palsy or direct tinctures. Some people did absolutely nothing. Some people they had, you know, benefits with the pain. But there were several amazing stories from Bell's Palsy patients with that. So I think CBG has might have some interesting implications with nerve issues.

39:10
Wow, that is cool. Can you link me to that article? I'd love to share that with people.

39:14
Yeah, absolutely. Give those companies some extra viewership.

39:19
Oh, that was before I see that was before sunny skies. Well, you know, I don't I don't mind at all.

39:23
I don't mind at all. Yeah, but I'm great friends with the guy. I would love to help them out. Absolutely share that article.

39:30
Okay, okay. Well, yeah, I mean, I think CBG a lot of people wonder what it's good for. And I know, it's shown to have some antibacterial properties. And I don't know what else but I guess in this nerve condition, it was quite helpful.

39:44
Yeah. And I remember we were read. I mean, this is again, this is two years ago, and just something I read online, but there was a study that showed that it might cause neurogenesis and mice which is the the repair of damaged brain cells. So that was very specific, but it hits that there could be is that CBG could could help repair damaged nerves.

40:06
That's cool. Wow, that's interesting. And it was the product like a one to one like a high like almost even amount.

40:12
No I think it was closer to like a four to one. Okay CBD the CBG

40:17
okay do you guys now make something like that similar

40:22
for people if they want sunny skies, CBD makes a one to one and then we're now getting into processing some CBG biomass we didn't grow any of it this year, like we will this upcoming year but we are we're purchasing CBG biomass and processing and making CBG broad spectrum distillate. The last CLA we sent into the last batch was 69% CBG 28% CBD and 0.00. THC and pricing for that's also available on the website.

40:56
But you have a one to one is that a tincture then? Yep,

40:59
yep so we're just we're adding CBD isolate to bring up the CBD levels to be a one to one okay and and you're making the product for people that can't use THC right the THC free product, right. So the only product that we make that has trace amounts of THC is the full spectrum tincture every single one of our other products are made with either a broad spectrum THC for distillate or with isolate. Okay, so

41:24
is that has that been a challenge to get the THC out of there? Or is it pretty straightforward.

41:29
It has been a challenge and we've had the equipment in here for months and has been running through lots of hearts are distillate refining the process. But we we just started doing runs for other companies here at the beginning of this month. We're already all booked out till mid May. So it's going really well I think might have misjudged the markets or raised the price of that. But uh, but yeah, it's going It's going great. We use reverse phase flash chromatography to purge that THC. And with very minimal cannabinoid loss to

42:04
get good, that's good. So I know you guys said you're focused on right now pet products, topicals tinctures and edibles. What kind of edible can people get from you?

42:13
Oh, I should have mentioned that we have gummies 10 milligram gummies. We sell them in 12 packs. And we also sell them in 50 count jars. Okay, we make those with isolate. However, we've made full spectrum tinctures in the past, and we can make, you know, different milligram options and different extract options for white label as well. But the 10 milligrams are great with the gummies. There's small, which we wanted to make the gummies smaller rather than bigger because the harsh reality is that eating this sugary gummy isn't the healthiest way to take CBD. Yeah. And so we loaded those also with as much CBD as we could well without affecting the taste profile,

42:54
because they have sugar just but a small amount. Yeah, well, the thing with sugar too, is it's not the worst thing. It's just if it's not too much, so I don't understand it post sugar fear I eat sugar. I mean, don't overdo it.

43:06
I personally get sad. I've cut it out of my diet completely. But my one cheat is my CBD gummies. And the reality is, if you've just seen, you know, 123 gummies. So it's Yeah, it's a lot different than busting into a bag of Skittles.

43:19
Yeah, exactly. And you're using like a natural sugar. Not like some I'm assuming not like a corn syrup or something.

43:27
Nope. Yep, we're using just regular cane sugar.

43:30
Yep. Okay. And you make those all in house as well.

43:32
Yep, absolutely. Everything is done in house. And like I said, we have this. We're licensed food processing plant. We have a lab tour, the Coronavirus, inspired us to do a virtual lab tour, we've got this policy that's very, very important to us, that we refer to as radical transparency. So we have an open door policy at the lab. Anyone, whether you're a retail customer, or potential business partner, or you know just someone who's curious that doesn't even want to buy CBD just wants to see what a CBD lab looks like. We are open under normal circumstances, from nine to six, Monday to Friday. And we do lab tours all the time. But this kind of thing. We did a virtual lab tour and put that up on YouTube. So you can see where everything's made and,

44:18
and how it's made. That is cool. So people when this is over, they can just drive up to your facility and come in.

44:24
Yep. Anytime don't even have to set an appointment.

44:27
You know, that is the first time I've ever heard of that. in any industry that is commendable, so people can just drive up from the labs and come in.

44:34
Correct. We've got a, you know, give you a little booties for your shoes. But otherwise, that's as easy as that. And the reason we did that, too is you know, I've told my story with in Colorado, we did not have a manufacturing facility that we were proud to show off to people. And so I've heard when I was a broker selling extracts to. I've heard all of the bullshit basically about Oh, we've got proprietary extraction technique or we've got r&d going on or all these different excuses to prevent people from coming in and seeing what your operation actually looks like. Fortunately for us, we're well funded, we're professional bunch, and we have absolutely nothing to hide. And, in my opinion, our strong competitive advantage is that we are capable of being transparent.

45:21
I think it's very smart. And like I said, I've never heard of that in any industry like Guinea. Even like the hearse factory, you have to make an a, an appointment to go see it. So or, you know, Coca Cola is not going to let you in without making an appointment. So that is commendable. I think. You're going to get some visitors.

45:40
I hope so.

45:41
So that's in Duran, Wisconsin.

45:44
Yep. D u r a nd for you could just look us up sunny skies, CBD. Our labs addresses right on there. Yeah. Have people ever just showing up randomly? Yeah, yes, we probably do have just four lab tours a week, maybe even more two, if you count the retail customers. Like I said, Duran is a really small town. And we were a big curiosity when we, when we came to town, I'm sure. And my dad is the first state champion athlete into town. And my grandparents have amazing reputation here. So everyone in town knows us. And everyone's curious to see what it looks like we've had different, you know, local papers come in and take pictures. And so we're not doing the just to show off our labs and sell product. But we want to feel like a part of the community. And that has definitely helped.

46:36
Oh, I'm sure with especially with just increasing the consumer confidence. They're just people coming in. Right? So do you have a store there too, on site that people can make retail purchases right there?

46:46
Yep, we were originally planning to build a lab. And then there is a building in town that was historically a car dealership. It was purchased for one year by an architectural firm that designed all this the quick trips that's been popular chain gas station around here, but so they've kind of beautified the place. So it had all really nice wood floors and big exposed wood beams and brick walls. But we had to turn that into a manufacturing facility. So we kept the reception area of that building, we kept and converted into a retail store. So you can still see, you know, the nice wood floors and everything. But then if you open the door, behind the reception desk, you see a big lab, and then my office is in the back. But we do run as a long winded way to say yes, we have a retail store here in dread.

47:36
That is cruel. Yeah. And are you selling mostly online or through retail stores across

47:42
the country, wholesale is our by far the largest share of our revenue number, I can break it down a little bit for you. So currently, we are making about 250 percent of our revenue from wholesale. So we sell to pharmacies, CBD stores, organic grocery stores, co Ops, and then vitamin supplement stores. Those are the shops that we go after we also have product and in lots of little random spots. But then about another 25% of our revenue comes from wholesale services, which you know, include like white label manufacturing, private label design, we do bulk solutions. So if you want a gallon of 1000 milligram per 30 milliliter solution, we do that, that's about another maybe 25% of the business wholesale extracts make up the vast majority of the rest of the business, a wholesale extract sales are retail sales are just a couple hundred, like a good day's maybe three or 400 bucks. We're real small town, but our site is gaining momentum with Google, it takes a while for it to establish what we call domain authority. Um, so we've gone from, you know, just a couple borders a week to now or maybe two three a day.

49:03
Yeah, it takes some time online, but it's good that you've got that wholesale channel and I've and I've seen your products in stores too, like the I knew the the logo, I had recognized it from some organic food stores. So that's a good market, you know,

49:17
cool. Yeah, the end with organic foods, those co ops two, they were some of the first places to carry CBD. And so they a lot of them just went with the big brands, you know, the Charlotte's Web, so the CV sciences of the world. So those places are as a salesperson are ripe for the taking because those big brands are charging outrageous wholesale prices and they have worked very hard to get the brand loyalty that they have. But in such a fractured industry, going into those places with those completely uncompetitive pricing, the bigger brands has been very nice strategy for us.

49:54
Yeah, that's good. That's good. And for people that want to buy online, they can just hit up sunny skies, CBD Calm, and they've got your full product.

50:03
free shipping on everything.

50:04
Free shipping. And I know you have a great guarantee. Right?

50:07
Yeah, yeah. If you're not satisfied with the product for any reason, we don't care if you use it at all, just let us know. We'll give you a full refund. No one has ever taken us up on that. Hopefully you don't have too many tricksters in your your audience know, yeah, we stand behind our products. And if it doesn't work for you, you know, we want to make it up to you. But we really feel constantly that it will,

50:29
you know, between that and your open door lab policy, I think you're doing things right. You know you that's very respectable.

50:36
Thanks. Appreciate that.

50:38
Yeah, the last thing I wanted to touch on with you was, before we go here was the the labs, what are you guys doing for your labs? Are you using a Wisconsin lab? Or do you use one of the big labs across the country to check your products?

50:52
Yeah, if you're interested in looking at our lab reports, you can click on the lab results link on our site, we also have QR codes on every single label. For white label customers, too. We provide those at no additional cost. But we use botanic or the lab that was working with in Colorado, I would love for a Wisconsin lab to be able to compete or even a Minnesota or Iowa anywhere nearby to be able to compete with botanic or on their lead times their customer service, their consistency, but we have not found it. I've heard all sorts of nightmare stories, send it in product to a lab in Wisconsin, you'll find in two samples who get the results back for one of them in a day. And the next one they get back a month later. Put had of course been around a while. And they've already made their way through some of those obstacles starting a testing facility.

51:44
Cool. Cool. So and that you guys have those up to date and everything by batch.

51:48
Yep. So each batch of products we make we take a random sample from that batch, ship it off to botanico, or for third party test, and then the results from that test ends up both on our site and on on the QR code.

52:02
Okay, and one thing I think I want to touch on is are you testing because this is something that consumers are confused about, as a company? Are you testing the raw product, or both the raw products and the bottle product he tested in the bottle as well

52:18
as the you know, the batch? Good questions. So we first I don't I know this isn't exactly what you asked. But with the contamination testing, we do all of that the hemp material used in processing is tested for everything. So that'll be your heavy metals, your pesticides, your microbial contamination, then further testing is done on extracts for potency, residual solvent. We don't retest for anything that didn't show up. So we'll say your material had had zero heavy metal contamination like ours did. You wouldn't introduce heavy metals into that distillate unless you weren't cleaning your equipment between runs. But firstly, we only run one material. And when we start processing another company's material, we go through extensive cleaning procedures. So all the contamination is done on the plant and the extracts we, as far as the batches, we have not reached a size like the joy organics, where they have a full panel done on a sample from every batch of product. So and since the there are no contaminants being introduced back into that product, we've found that to be satisfactory for every customer we've come in contact with. But then to answer your question, as far as when the product is tested, we bottle everything, we take a random sample from that bottle and send it off to the lab for testing. We use 15% extra distillate in each formula and 5% extra Iceland each formula to account for just natural variants to make sure that all of our products are within an acceptable range of the reported milligram content.

53:59
Oh, cool. So there are a lot of times people actually may be getting more

54:02
probably Yeah, more times than not so but what we strive for is 95% of the samples that we send off for testing 95% need to be within a range of negative five to plus 15%. If we cannot make that happen, we go back to the drawing board on improving the product formulation process, or we don't sell that product.

54:27
Right. Nice. Yeah, that is again between that and you're open door policy and guaranteed that's that's great. You guys are are certainly an example of what I think a good CBD company is so very exciting to to have learned more about you. And before we go here, do you have anything else you want to mention for either just new people listening or new private label customers or just anybody that wants to learn more? The floor is yours.

54:53
Well, first of all, let me give a shout out to different people here in sunny skies. This has been more about me And less about these awesome people that I work with, and I would have liked it to be but my partner Pete, he's the man, my dad's best friend, he treats me and all my siblings, like his own kid. His wife, Terry is our president. And she is, you know, like, she's the matriarch of the company. She runs the day to day operations of the lab. And it's just so on top of it keeps everyone organized and kind of the heart and soul of the company. their two sons. Hunter is our lead processing engineer. And Peter is a processing engineer as well. They're twins. And then we've got Tiffany is in charge of the product. She's the production lead, got Matt doing sales, my brothers jack and Max working at the lab. Coogan running the equipment, Scott run the equipment, Charlie, my little brother as well Can't believe almost got my little brother. Yeah, just amazing bunch of people to work with. But then no one cares about that. So sorry for wasting your time, I had to do it. And then as far as if I had to speak to anyone in the CBD industry, it would be you know, the guy that was in my shoes three years ago. And I would say just, you know, keep your head down, work hard. Don't lie to people, you'll be amazed that you bump into three years down the road, and the way that they remember you. So just be honest. And eventually, you'll you'll make it.

56:20
Great. Well, thank you very much. It was a pleasure to have you on I'm sure we'll have you on again. And stay on for a little bit. We'll talk a little more. I've tried

56:29
recording one last thing, Rob. Oh, yeah, I can't believe I forgot you robbed man.

56:34
No worries, Rob, you're the man.

Vadim 56:40
Hey, everyone. That concludes our episode for today with Ben of sunny skies CPD. Make sure to visit them at sunny skies cpd.com where you can get all the information you need about their brand and trying out their CBD products. If you want to get in touch, I'm going to leave everything you need in the show notes. So all the information is there. And also if you want to take them up on that free tour, make sure to get in contact with them and drop by their facility in Duran Wisconsin. That's it for today. I hope you enjoyed this episode as much as I did. And until next time, this is the dean, the CBD professor from CBD school.com signing out. Thanks for listening.

57:23
Bye for now.

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