Cannacurio Podcast Episode 69 with Nohtal Partansky of Sorting Robotics

In this episode of the Cannacurio Podcast, Ed Keating sits down with Nohtal Partansky, CEO of Sorting Robotics, to explore how automation is transforming the cannabis industry. Nohtal shares the story of his evolution from working with NASA, to developing cutting-edge robotic systems designed to streamline cannabis production. From automating pre-roll manufacturing to optimizing vape cartridge filling, the conversation dives into the impact of robotics on efficiency and compliance in cannabis operations. Additionally, Nohtal highlights the importance of operator input in technology development and how integrating robotics can help businesses scale while reducing labor costs and human error. This episode offers a unique glimpse into the future of cannabis technology and provides valuable insights for operators looking to stay ahead of the curve!

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Cannacurio Podcast Episode 69 Transcript

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Ed Keating: Welcome to the Cannacurio Podcast powered by Cannabiz Media. I’m your host Ed Keating. Today we are joined by Nohtal Partansky. He’s a co founder and CEO of Sorting Robotics, and he has had one of the more interesting backgrounds of any guest I’ve had. I don’t think I’ve ever spoken to anybody who’s produced oxygen on Mars and now is automating the cannabis value chain. So can you tell us a little bit about your background and what led you to found Shorting Robotics?

Nohtal Partansky: Yeah. So my background, as you mentioned is very closely related to aerospace. So I got a master’s degree in aerospace engineering. After that, I went to work at NASA in JPL. And I worked there for about four years. I was one of the lead engineers on a project that you briefly mentioned called Moxie, which is currently on the Perseverance Rover and it produces oxygen from the atmosphere of Mars. So that was a pretty interesting experience, but I found the bureaucracy of NASA to be somewhat stifling to my creativity and like what I wanted to do with my life, and in the last year of JPL, I moonlit this company and and started sorting robotics and we weren’t in touch with …

Ed Keating: Tell us what JPL stands for, I’m going to say like jet propulsion labs or something, but

Nohtal Partansky: yeah, that’s actually exactly what it stands for.

Ed Keating: Oh, all right. And I didn’t Google that. I promise. I’m like oh, good. Okay good. .

Nohtal Partansky: And it’s it’s the one that makes all the Martian rovers. So curiosity, pathfinder perseverance, all of these Robots they were all made on lab. And actually there’s a few other JPL engineers that worked at sorting robotics as well that I recruited to the dark side

Ed Keating: Awesome. So so it was cannabis in industry that you’re targeting post nats it’s not like you were working on it on the side, but was it cannabis? Was it agriculture? Was it just Not just robotics, but was it robotics that interested you? But in, in things outside of JPL?

Nohtal Partansky: Yeah, it wasn’t actually cannabis at all. Initially for the first two years, we weren’t doing anything in the cannabis industry. So that was like 2018, 2019. And 2018 was when I was still at JPL and then I went full time in the company in 2019. But No, we were doing automation for e commerce sellers. So we designed a system called the Broca sorter. And that was a device that used computer vision and some mechanical design to sort trading cards. Think like a computer vision powered magic, the gathering card sorter, like Pokemon card sorter system. Yeah. And then actually eventually in 2019 or end of 19, we We decided we want to get into cannabis because I had a few friends that were starting companies in the industry. And this is like right after cannabis went legal in 2018 in California. And and so I, I had a few friends and they were like, if you want to build something for us that would be great. You should build literally anything because nothing is here. And this is and and yeah, we actually ended up selling the Roka sorter. So we spun it out into its own individual entity and then. Sold it to a couple of investors who then later sold it to a larger e commerce company who then later sold it to eBay. Yeah,

Ed Keating: that’s great. I hope it’s great. It sounds really interesting so…

Nohtal Partansky: yeah. Yeah. And then and then yeah, and we like completely focused on cannabis at the end of 2019 and in 2020. And and that’s what started, the cannabis version of sorting robotics. And so we’ve been doing that since 2020.

Ed Keating: So one of the interesting things that, I read about in terms of how you view the industry and what you’re focusing on is this concept of industry 4. 0 or the fourth industrial revolution, I just love things are the rule of three rule of four. And here you’ve got AI, robotic, computer vision, machine learning and automation. That’s a lot. That’s a lot to unpack, but I’m curious. You know how you are pushing promulgating this through the industry because it certainly, has a lot of buzzwords in there, but it’s not like you don’t know how all these things already work because you’ve done them. So tell us a little bit more about this 4th industrial revolution in the cannabis space.

Nohtal Partansky: I wouldn’t say the 4th industrial revolution is like Kind of happening in the cannabis space. I would say it’s almost like starting in the fourth industrial revolution. I started a cannabis co packing company in 2020. I got with a, another group of friends when we decided to get into cannabis and I started this co packing company in Oakland and I ran that for about three years. So I was like in it, I was like a plant touching operator. For several years, we had 60 employees, people were hand trimming, putting bud into jars and knockboxing pre rolls and stuff like that. And so it was, that was a very eyeopening experience. And and so it was more like we started in like the cottage and then we’re just jumping a bunch of different industrial revolutions and going from hand to like computer vision powered robots. And so it’s a, it’s a. Pretty large leap. And when when you ask how has the cannabis industry kind of embracing this? I would say they’re just skipping all the steps in between. So when you had the industrial revolution, it was like mechanizing things and you don’t see a lot of operators trying to mechanize things many times they’ll go from doing it by hand to doing it just straight with the latest and greatest. They’re not like going through those other industrial revolution steps. They’re just going from a team of 20 people doing everything to now they buy one of our machines and there’s like computer vision, quality control, and like robotic arms flying all around and everything, as opposed to taking out, intermediate steps in between.

Ed Keating: Yeah. It makes me think of the the it’s an analogy, but how. Some countries that didn’t have great telephony infrastructure said, yeah, we’re not going to go with the wire system. We’re just going right to cell phones because it just makes more sense. And it’s this big leap, but it’s a lot easier to provide that service than to run wires out into rural areas or places far away. And, they wind up having a better infrastructure than, sometimes places in the United States. So very,

Nohtal Partansky: yeah, it’s very similar to that. Yeah. Very actually that’s a cool analogy because I’ve thought about that. progression a lot. I have a lot of family in Mexico and you don’t see that in the United States so much like people don’t put their WhatsApp on the company billboard or whatever. But in Latin America, it’s everywhere, right? Because they didn’t have the infrastructure before. And then they got cell phones. And within 10 years, Places that didn’t have internet or landlines or like addresses now just do everything off of whatsapp It’s just wild.

Ed Keating: Yeah Oh, that’s yeah, it’s this. Technology that has been able to I don’t know maybe path of least resistance flow to where it’s needed without all the Strictures that sometimes come into play when it’s a big giant. Company trying to push it out there and manage it and own it So very interesting now in terms of You know what Sorting Robotics does it seems that you’re addressing, automation shortcomings that you witnessed in the sector. So like when you were a plant touching operator and I’m curious, do these apply to other industries like for other row crops? Is this applicable or is it good just to focus on one industry, go deep and do it well?

Nohtal Partansky: Yeah, like both of those answers are not wrong, right? So I would say our technology can be applied because it’s not, it’s like a platform.

Basically, we spent seven years effectively building a small scale, high precision manufacturing robotic platform. And so what does that mean? It means anything that’s Small scale and requires proficient manufacturing. We can work on, maybe we swap out an end effector to change some of the guts, but 80% of whatever that challenge can address is already done. And so yeah, we can apply our technology to a plethora of other industries. We’ve looked into some things like the, like IVF industry, a lot of healthcare and. It’s probably the most interesting just because it’s the most difficult thing to tackle but in terms of your second kind of proposal, is it better to just do as well as you can in one single industry? I think for the growth of the business and to like penetrate as deeply as possible it’s that right. So can we do other things? Yes, for sure. But should we, before we’ve, completely dominated this industry probably not. This industry is continuously growing. Like even though, um, we still don’t have federal legalization. It’s like the industry itself is still adding 25 percent year over year. So that’s an insane growth rate for any industry. And we have trouble keeping up with demand, much less trying to, try to find new markets or take market share for anyone. Who wants to come in? And yeah we’re just working specifically in this industry as like kind of beachhead niche, and then we will move from there.

Ed Keating: Yeah, it makes sense. We follow the same path where we have stuck with cannabis information specifically on licenses. And while there are occasionally some interesting, bright, shiny things that. Might catch our eye. We’ve just chosen to focus on it. And like you were we say this all the time in the podcast, we’re serious, it’s the only industry we’re in, whereas other people may be. Putting a toe into this industry or they may be farther away and thinking, Oh my goodness, it’s, time to mint money in cannabis. And, those are the kind of clueless people who don’t have really any idea what’s going on. It’s clueless, curious and serious. I think both our companies are in the kind of serious realm and, which Has its pluses and minuses, but at least it gives you focus and it makes it easier to make decisions. I found now as your customers and prospects look at what you offer, I have to believe that this is a gigantic ROI kind of sale, like in terms of why somebody would do it. Like I imagine the math is not super complicated, but you walk us through how your customers think about that, because it looks like you are automating a lot of this value chain. And I would imagine the more you do, the higher the ROI, help us understand that.

Nohtal Partansky: Yeah. A lot of the kind of product roadmap or decisions that we make along the path of what we try to automate. A lot of almost all of it comes from my experience and my manager’s experience and actually running a co packing company and like clearly and viscerally feeling all those problems. And so we basically just hit the highest ROI things and then go down that list. You do the calculations, it becomes like pretty, pretty significant, right? And we’ve even created markets, right? So our our first product that we started back in 2021 was a device called the GECO robot. It was an injection style infusion system. And it’s interesting even how I explain it right now. I say injection style infusion system, because when we started it, there was no styles, there was no infusion systems. It was. just us. And a are you injecting joints? you can infuse them in a 2021. No one was really infusing their joints maybe mixed in some THCA or maybe sprayed some terpenes on it or so having any formalized process. And then now there’s this whole injectable skew, which is like what we invented, right? So it’s kinda,

Ed Keating: You created the category. Really?

Nohtal Partansky: Yeah. Like we created the category. And so we we have a very strong ethos of making these like very high value things. And so for that skew is very unique because. It was like very much front running what was to come and the only reason we could do that is because one, we’re in California and I feel like California leads the rest of the country when it comes to trends. And then two, we were a co- packer. We weren’t just like a brand trying to follow people or follow trends. We had people coming to us. Or like I had people coming to me and asking like, Hey I want to do this new SKU can you help me figure it out? Cause we had already packaged their flower or I was trimming their material. And it gave me a very unique perspective. And we saw moving forward. Okay, cool. People are going to start infusing. How do we do that? And so it was interesting in the beginning of selling that system because the ROI wasn’t very clear because you’re not dropping in a device to replace a team of people. You’re introducing a new way of doing something for them to move into for subsequent SKUs. So the ROI was very difficult, I would say initially for that machine, because. It wasn’t like obvious. You can only make analogies to like quality or like returns. Or if you compared it to like different hand infusion methods, like painting joints on Keefe and saying this is a better way of doing it. And that made it very weird. But it was still there and we’ve sold, hundreds of those machines now. And so that’s not a, it’s not too crazy, but then when you look at our newest machine Stardust, which is actually a robot that keef codes joints. That ROI is like obvious, like that one’s very easy. That’s you have 10 guys doing this now. When you throw in the robot, you’ll have one guy and then you just do the difference of salary for nine guys. And then that’s the math, right? That one’s very easy. So it’s interesting how we’ve done it.

Ed Keating: I know in the past when I’ve spoken to folks on the manufacturing automation side, often it’s like with trimming it can be hand trimmed or machine trimmed and you get the head grower saying it must be hand trimmed. You get the CFO saying, forget that, let’s just, have machines do it. Who is the internal champion when you go to these businesses? Is it the owner? Is it the head of engineering? If they have such a person, like who’s the decision maker who’s Oh my gosh, where have you been all my life? When you walk in there?

Nohtal Partansky: I would say the people that are saying where have you been all my life are usually like the production managers or the VP of manufacturing or whatever, but the actual decision makers are normally the owners, like either the owners or the CEOs, depending on if they’re big companies. And so, that is, that’s how it breaks down. I would say the champions are the people that are on the floor and then the decision makers are usually the people that, normally write the checks. And the people that write the checks, I don’t know, depending on who they are and how big their company is, they could be very excited or they could be like, is this going to help? And then they just look at their champion and then he’s yeah, like you should definitely do this. And they go, okay, fine, forget it. Like I’ll just sign this. And it depends on the size of the company though.

Ed Keating: So obviously there’s a big ROI play as you described, or at least there can be what up. About what role does innovation play for people? For example, you guys created that one category you mentioned earlier do people see when they bring this in, oh, this is going to allow us to make something that we couldn’t make very cost effectively before. Or is the fact that you guys are pretty innovative helping these businesses perhaps perform ahead of their peers?

Nohtal Partansky: Yeah. So it’s interesting because the machines are so different in terms of their value proposition, but let’s say Jiko, for example, that machine does what humans physically can’t write, which is why the ROI was very weird because there’s no like direct comparison. And to give you an example on that side, in terms of like people having an edge or growing their business, I’ll give you an example this year we sold, we worked with a company to help design their new SKU and then sold them a machine that like was enabling them to make this new SKU. And. They got their machine in February and then in September they were doing a half a million dollars a month on that SKU . So like a half a million a month, right? So they added 6 million to the top line of their company and they were able to Enabled by our machine and it just would not have been possible otherwise,

Ed Keating: it makes me think that thing shut up, take my money,

Nohtal Partansky: yeah, but keep in mind, right? It’s enabled by our machine. But they have to sell it. They have to source it. They have to do all these things. And they have to, have to do their part, right? Like the machine is just a hammer, but if you don’t have any nails or wood or building plans, it doesn’t matter. You could just have a hammer that sits in the corner. And and so that’s how that’s how Jiko has really benefited people. And there’s many stories like that. There’s another company in Canada that they have several machines. They weren’t even in pre rolls at all. And they wanted to just find outs for their extracted material. They’re like, okay we have all this extracted material. We can only sell this much in wholesale. We can only do this much in big cars. Like, where else are we going to put it? Okay. Let’s put it into pre rolls. Like, how do we put into pre rolls and they bought our machine. And then six months later, they bought another one. And six months later they bought another one. And then they’re like one of the top infusion brands or infusion co packers in the country. And so there’s many stories where the tools, when paired with good execution have completely changed people’s businesses, entirely. It’s adding millions of dollars to their top line.

Ed Keating: Wow. Wow. And one of the metrics I saw repeatedly in reading about sorting robotics seems to be one that I guess is pretty simple for most business to understand. Joints per hour. And it seems that, machines are going to do that way better than people can.

Nohtal Partansky: Yeah, that metric is generally what people are most interested in. It’s also a good way to actually do ROI calculation. So when you look at Stardust, the easiest thing we do with people is we say, how many full time employees do you have on your production line, painting joints and keefing them. And they’ll say, I have two people full of time. I have 10 people full of time. I have 20 people full of time, depending on who these guys are. And then you can boil it down, right? Maybe it’s like teams of two or four or six or whatever. And then you say, okay, cool. You are getting, I would say on average, we’ve talked to hundreds of people at this point, normally. One person does about a joint and a half keefed per minute, and that’s like how we’d dial it down, right? We say we’re doing about, 75 ish or something between 75 and like 90 a minute. Sorry, an hour. So if they’re doing 90 an hour, we introduce a machine that’s doing 1200 an hour, and so if you had that same operator, that same person now operating the machine, you would like 15 X their output. Maybe it’s not the same operator. Maybe it is the same operator that you upskill to have a better understanding of different machines and maybe, or maybe it’s a more expensive operator that you bring in or whatever. But in that case, it’s very clear.

Ed Keating: Yeah. And the machines don’t take breaks, all that other stuff, but that really matters. That’s a pretty hard metric to argue with. Now, one of the things I wanted to ask you, because so much of this thing takes me back to a presentation that a CEO did many years ago in the software compliance industry where I used to work. And. They didn’t understand the customers very well until they went out and did a ton of research. Like they talked to people and talked to people and they asked them this great question that I’ve repeated probably too many times on this podcast, but essentially boils down to, what were you doing the 10 minutes before you use my product and the 10 minutes after? And they were able to build out products for investment bankers, research people, et cetera. And the phrases he used were, we want to own a greater share of your day. And. I just love that because when you’re talking about understanding somebody’s workflow, you’re really doing that. So as you look at the automation value chain, Nohtal I’m curious, is a hundred percent your goal? Can you get there? How much of the value chain do you think can be. Roboticized if that’s the right word.

Nohtal Partansky: Yeah. Automated roboticized. That’s fine. Let’s see. A hundred percent. I don’t know why you wouldn’t be able to do a hundred percent, but it is different. Okay. So it’s different than let’s say industry 2. 0 or industry 3. 0, right? You can think of industry 2. 0 as a Coca Cola bottling factory. You have a bunch of conveyors, you have a bunch of sensors. Those sensors are like clockwork mechanisms. And if something goes wrong, the whole line goes down. It’s chaos, right? You can think of industry 3. 0 as maybe having those devices be connected, right? Maybe you have warehouse management systems or manufacturing management systems that kind of control everything. And then when you think of industry 4. 0. You start to change the fidelity of what that looks like, because now you have robotics and the difference between robotics and automation is that one of them closes the loop and that is the biggest difference, right? When you just have sensors, those sensors don’t really close the loop. They don’t adjust themselves to continue to perform the task. They just blindly do things, and if something goes wrong Then it may or may not stop itself. It may or may not make adjustments. It may or may not do something, but in industry 4. 0, you have things making decisions for you, as opposed to you just pressing the button and hoping that it works, which is what very traditional automation is. It’s if it starts fucking up, it’ll, it will just continue to like, like you might just like labelers as like a big thing, because when I was in my co packing company, I used a lot of labelers and those things are very industry 2. 0, right? They’re just. motors with maybe a light sensor and it just does its thing and there is no feedback after it’s done. If you were to make like a robotic labeler, it might look very similar, but maybe at the end it has like a computer vision check that checks to make sure the label is properly placed. And then if it isn’t properly placed, it makes an adjustment earlier on the upstream where it now starts changing things slightly. And then that feedback loop is continuous. So it can adjust to variabilities that are in all the tolerance of Yeah, it’s I think that’s like a big change.

Ed Keating: Wow, that’s great. That makes a lot of sense to in terms of how that would work. Like I could see the barcodes being scanned at the end. Are they readable or has the ink smudged or moved and you’d need to make a fix on that so that you’re not producing a bad batch.

Nohtal Partansky: Or even more high fidelity like. You see the barcode and then that barcode references the harvest ID for that plant. And is that actually the right thing that you started with? And is it still running the same thing? All of those are connected. And then if it’s not, what does it do? Does it just stop? Or does it like send a push notification to your phone or send an email to the manufacturing team or something like that? Really? That is the level of intelligence that like an industry 4. 0 manufacturing company will have. And so when you ask the question can you automate everything? It’s not a question of can, it’s a question of when, and if the question is when, then the next question is who, and I, yeah. Only see really like one player in the space that can do that at scale. And that’s us. And I see other people that, attempt to do that, but like not having that visceral understanding of what it’s like to be an operator. We’ll just leave. It always leaves something to be desired in terms of how things work, how they work for an operator to make it function. So that’s our goal.

Ed Keating: I had a CEO many years ago who was trying to change this company around, and we had a lot of attorneys and accountants who wrote law books essentially. And His point was that pretty much all of them lacked what he called a practitioner’s perspective. They weren’t running a law practice or an accounting practice. They were sitting in a big corporation, going over the new rules and regs and writing them up. And by lacking that, they didn’t do what you did, which is you ran a business And you learned what it was like to run that business and succeed in it and understand those real pain points were as for these folks, some of those pain points are more theoretical or just so distant or so far past in their career that they didn’t remember it. So I appreciate, what you’ve done to to really do that. I want to dig into your customers a little bit in terms of profile, earlier on, you said that, these. Robotic products are probably a six figure purchase for somebody. So does that mean that you mostly focus on, capitalized customers, how does that work? Are there small mom and pop grows that are going to embrace this or not yet?

Nohtal Partansky: No, definitely. I think it, it spans the whole range, right? And you can’t. Be doing no volume, right? Like you need to be doing a sufficient amount of volume, but the bar is actually significantly lower than a lot of people think they think, Oh, I’m not going to be able to buy this automation unless I’m doing a million joints a month. When in reality you have to be doing like 30, 000 or 40, 000 joints a month. Which 40, 000 joints a month is actually not that many joints. That’s only 20 pounds of joints, depending on the size of the joints that you’re doing. And if you’re not making more than 20 pounds of flour a month, then That’s not even a room, right? So there is I think there is a misconception that these things need to be crazy scale because the truth of the matter is no one really in the cannabis industry is at any reasonable scale by traditional standards, right? Traditional standards is. Coca Cola bottling 5 million bottles in a single day, right? That’s, and they, then they service all of the United States with six plants strategically placed in highways across the country. And then they send the overflow to Canada or something. But that’s not how it is in cannabis. Cannabis is a series of craft breweries and liquor stores. To be blunt, right?

Ed Keating: Absolutely.

Nohtal Partansky: Every dispensary is basically a liquor store with a better customer loyalty program, right? And and every grow is is in one way or another, a craft brewery. They don’t have significant scale, but you wouldn’t say open a craft brewery and then do everything in barrels. Like that would not But that’s really what cannabis is right now. Everyone’s doing things in barrels. But if you look at traditional craft breweries or current craft breweries that have boomed up over the past 15 years yeah, they have their own automation, right? They have huge vats that are doing thousands of gallons of Like hot fermentation at a time and those aren’t massive manufacturing companies. They’re, they’re maybe doing five, 10 million a year. And if that but that is the, that’s the cost to enter really. And I think when we look at these kinds of smaller operators, say the ones that maybe only have five or six rooms they’re doing a couple hundred pounds a month. They’re not doing a couple thousand pounds a month or something like that. A couple hundred pounds a month. I would say it’s like majority of our customers where every six weeks they’re kicking out. 50 or 60 pounds and half of that’s going to jarred flower. And then the other half is going to pre rolls. And for them, having the automation allows them to be extremely efficient. Do they have an insane balance sheet? No, they don’t. But they’re profitable. They’re making money. And for them, we do like seller financing. We do leasing plans. We have third party financing companies and all of those things are made to make it more reasonable because. The thing with automation is that the moment you get it, you actually become more lendable than you did before. Cause before all of your goods were dependent on having an army of people,

Ed Keating: it’s like a step function increase, right? Like suddenly you’re way up here. Exactly.

Nohtal Partansky: Like one, one, one of our devices can improve the gross margins of your SKU by 30%. What would you do if your gross margins on a SKU. Were 15 percent and then later they became 45%, you’d be like, Oh my gosh this is wild, right? This is this is insane. Or how about these other customers who like, they didn’t have this automation and then they’re like, Oh, now we just have, 6 million extra dollars of top line a year, right? So they become more financially stable, the more automation they get, which is actually really cool. And it’s good for me because then they buy more machines, right?

Ed Keating: And yeah, but I was going to say that phrase you just said is such a powerful way to explain this concept to people who might be a little bit reluctant, you’ll become way more financially stable. The more automation you get so ed what percentage automated are you now? Zero, okay I just imagine you can walk people through this progression to see The your top line and then your bottom line too looks really good, too. So really cool. Some of the other questions I want to ask you know now looking a little bit forward looking and market looking You’ve been in this industry. You’re serious like us. There’s this whole discussion I’ll say of hemp versus cannabis or hemp and cannabis does this come into play at all for you or is it just a plant and a molecule and it doesn’t matter

Nohtal Partansky: what do you mean by it doesn’t matter like as well? I don’t have a bias towards one or the other or

Ed Keating: we’re just Maybe market interest like we know in some states like texas. It’s a it’s been described as the biggest cannabis market in the U. S. that doesn’t have legalized cannabis there because it’s all hemp derived. Does the hemp derived products become a portion of sorting robotics market, or is it still mostly traditional cannabis?

Nohtal Partansky: Oh no. We have several customers that are on the hemp space, especially because of the drive for THCA. So now we have many customers that have Stardust because they’re coating their joints in THCA. And, if you’re coating a hundred thousand joints a week in THCA, you would probably prefer to not do that by hand and probably prefer to have a robot do that instead. We have, yeah, we’ve seen a lot of more growth in the past year because of the move to THCA in the hemp market before we only had a handful of customers. And now I would say 20 percent of our customer base is hemp.

Ed Keating: Interesting. So looking at sort of other industry sectors, I know that in some parts of the sort of the ancillary space, we’ve seen a lot of mergers and acquisitions, a lot happening with software companies, but I’m curious. Is any of that happening in the automation space? Are some companies coming together or are you all putting out so much ROI that hasn’t happened yet?

Nohtal Partansky: So I think the ROI comment you made is definitely playing a part in the lack of mergers because It’s hard to, it’s hard to, it’s hard to get people to merge when they’re doing just fine by themselves, right? There’s yeah, why would I do this? Unless I’m going to, cash out super hard, but the industry doesn’t have big enough players to support something like that. However, I have seen a couple things that did something like that. So I don’t know if, did you ever hear of bloom automation?

Ed Keating: Huh? It doesn’t ring a bell, but.

Nohtal Partansky: So they were one of the early automation companies in the space. Really cool technology, like super, super cool. So there was this guy who used to work at Boston dynamics. And he like went to MIT as well or something. And I think he was back in 2017 or 2018, he started this company, which the goal was to make a hand trimming one to one robot. And the idea was. Hang like a indoor stock that had been before it got bucked and then rotate it around, computer vision, scan the whole thing, build a 3D model of it, and then path plan. These little scissors or shears that would trim away all the leaves, and then you would have perfectly manicured buds, and and you would have, you wouldn’t have to have hand trimmers because this thing would recreate hand trimming look one to one. That one didn’t seem to ever really take off.

Ed Keating: And then it would have been some great Edward Scissorhands branding, but I’ll just, yeah.

Nohtal Partansky: But it was really cool. I think the, I think it was just, maybe he never got the speed there or whatever. I don’t exactly know what the problem there was, but it never really seemed to catch on. And then they combined with EOS, which is the company that makes Mobius. And I think that happened. Maybe 18 months ago or a year and a half ago or two years. I don’t know, like a little over a year ago or something. And so I know that was a merger. And then I think now from that, they’re starting to make something that we actually developed back in 2019, which was like a biomass sortation system. That was neural network, computer vision powered. And I think that’s what they’re focusing on now. But aside from that, I haven’t really seen. Any major mergers or acquisitions. It seems like everyone is doing fine and no one’s walked in with a piggy bank of money to do like a rollup or anything like that. Yeah. But I think it, it’s a matter of time. It also just depends on if that matters on the software side, I think it’s easier to merge disparate systems. Then it would be on the hardware side and I think also on the hardware side There might be many players, but many players doesn’t mean there are many qualified Candidates to merge if that makes sense.

Ed Keating: One that we’ve done since 2017 18 Is our point of sale software report where we? Call around to every store we can find and ask them what POS you’re using and we track the changes over time And the number of vendors really has not come down much. It still hovers around like 70 vendors we don’t need that many and It’s going to happen. There’s going to be a roll up at some point, but that leads me to the last couple questions it sounds like you guys are in a unique position where you’re we’re You’re finding plenty of customers who are willing to make that investment. But do you think just maybe looking a bit more broadly that our industry has hit bottom yet? And, maybe we’re starting to come out of it or, we’re still in the valley and we don’t know where we’re going to head back up.

Nohtal Partansky: Yeah, I think it’s a bottom. I think California has found its legs and is more stable now. It found its like Oregon, Colorado sort of Steady state, like flower prices really haven’t changed in the past six months when before they were like wild. Like when I was running my co packing company, shit, like it was nuts. One month, Q2, like pounds were going for 2300 and then Q3 pounds were going for 1500 and then Q4 pounds were going back up to 1900 and it was just like nuts. Like it was. You’d get 30 percent price swings depending on the weather. And but these days it looks like indoors going for, like average indoors going for a thousand to 1400 depending on where you’re at. And I haven’t really heard that change all too much. And so I think that’s been a very strong indicator of stability, regardless of like where that stability like levels out. And then I think even with this harvest right now, we’re seeing roughly the same prices for outdoor and mixed light that we saw last year. And then if you look at Michigan, which is also the number two market in the space, they had a really hard time in the beginning of the year and the end of last year, but it seems like even that has stabled out. There’s the boom bust cycles have leveled a little bit. And then with New York coming online and, we got in six weeks, the the schedule three vote, which I, unless they push it or do some stupid nonsense again,

Ed Keating: like slow walk it if it gets past,

Nohtal Partansky: yeah, I think even if they slow walk it, it will still be significant, at least for the banking side of things, right? Because, If they slow walk, if they just approve it, right? Like that will just like smash, it’ll just immediately drop to schedule three and then like how they regulate or how the FDA gets involved. Like it won’t matter. That’ll just be like on someone’s to do list somewhere that yeah.

Ed Keating: I think you’re absolutely right. That The changes in expectations will be something you can’t put back in the bottle. Like it’s just going to move. And I was doing some research for a panel I was on a few weeks ago and just saw somebody spell it out that right now the cannabis industry has an effective tax rate of 70%, whereas the rest of the industry is 20%. That’s not hard ROI or math to understand. So yeah, I think that these rescheduling pieces is going to be key. Are there other trends, looking out that you’re keeping an eye on or things that you think people should be mindful of?

Nohtal Partansky: I would say the trend to move into pre rolls has been pretty significant in the past 18 months. When we first started doing stuff in pre rolls, like that was very much a afterthought, like in 2020, 2021, 22 became a last year and this year. It’s been very clear that the market is moving towards that. And I think a trend that I would just. For the plant touching operators of the brands in the space is to be very mindful that what, like you have to live in the future if you’re going to be able to build it, and flower jarred flower, isn’t going to be 40 percent of the market in 10 years. That’s just as much as there might be a large OG crowd that like loves to roll their own thing. That’s just not going to be how it is, right?

Ed Keating: So someone said that market is super well served now, probably oversaturated, but how do you get the people who aren’t there and who are looking at beverages, let’s say, which seems to be the other big trend.

Nohtal Partansky: Yeah, beverages are coming up a bit more. I think just the idea is like, Be prepared to diversify out of jarred flower like that. I think that is probably the most important thing that a lot of our customers this year have bought into. We’re a little bit farther down the life cycle for a brand, right? We don’t really make a pre roll machine. We make things for infused. So like you first got to be in pre rolls and then you got to get infused pre rolls. So we see people After they’ve made that decision. But I know plenty of people this year at geez, at least 20 that for six years, they were just offering jarred flower. And then in the past 18 months, they noticed, like you said, it’s oversaturated, there’s flour everywhere. Maybe they have a strong following. But even that following is saying I like your flower, but I want it in a pre roll, because I’m not always in front of the bong ready to crack it up, and you grind it out and get my whole like ceremony going. Because that’s just not going to be how it is. People want convenience, and people want things quickly. And whether it’s a vape cart that maybe moves into, even though that market’s remained relatively static for the past few years. But, pre rolls are going to be, pre rolls are going to be different, right? Or just, jarred flower is not going to be 40 percent of the market in 10 years. Jarred flower is going to be like 10 percent of the market. So where’s that other 30 percent going to go?

Ed Keating: Great point. Great. That’s your wallet again. In terms of sorting robotics, any thing new that we should expect from you all, you’ve got a pretty impressive product suite already. Is there anything that’s, you can tell us it may be coming down the pike that you can chair.

Nohtal Partansky: Yeah I would just say, keep a lookout on the. The proliferation of the Keef coding automation, because we’re the only ones in the market that even have a machine working that can do distillate and glue, and we debuted it at MJViscon last year, and then this year we’re going to have a few customers that have it and have been running it and they’ll be providing testimonials and stuff, and that’s another one of these things that you have to live in the future, right? So. If you live the past three years of people making Keefe coated joints and wholesaling them for two bucks a joint or a dollar 50 a joint, and like these more mature markets, yeah, they were working in labor until the cost of goods. What’s it going to be like when that guy has a machine now and his cost for that labor went from 30 cents to three cents. You got to be mindful that you’re going to need to compete and the robots are how you do it. Unfortunately, as one group improves, everyone has to improve. Otherwise you get left behind. And I think just. I just want people to be mindful of that.

Ed Keating: Excellent. I couldn’t think of a better way to end our discussion. Really, it’s the old skating where the puck’s going to be, not where it was, or don’t fight the last battle, fight the next one. So Natal, thank you so much for joining us today. It was a pleasure getting to understand your business and hear about your fascinating background. Yeah. Thank you.

Nohtal Partansky: No, this was fun. Nice talking to you Ed.

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