Agrify equipment helps cultivators utilize their facilities unused vertical space. Matt Liotta joins Dan Humiston to talk about providing growers with everything from equipment to engineering to software. With $30 million dollars of available credit their customer's can immediately start growing vertically. Produced by PodCONX https://podconx.com/guests/matt-liotta
Agrify equipment helps cultivators utilize their facilities unused vertical space. Matt Liotta joins Dan Humiston to talk about providing growers with everything from equipment to engineering to software. With $30 million dollars of available credit their customer's can immediately start growing vertically.
https://podconx.com/guests/matt-liotta
Dan Humiston: [00:00:00] The race to be the first national cannabis dispensary chain is heating up. Who will emerge as the Starbucks of Cannabis? We're kicking off the Dispensary Spotlight series featuring CEOs of twelve of the fastest growing dispensary chains. Listen in February for the Dispensary Spotlight series and you may hear the future Starbucks of Cannabis capital is one of the obvious problems in the space.
Matt Liotta: [00:00:25] And we wanted to provide that as part of our solution, too. So we get it now that we've made available 30 million dollars of financing to our customers. We're hoping that really changes how people look at their investment for these facilities.
Dan Humiston: [00:00:46] From MJBulls Media, it's the Raising Cannabis Capital show.
Dan Humiston: [00:00:54] Dan Humiston.
Dan Humiston: [00:00:55] And on today's show, how this Cannabis full service cultivation equipment manufacturer is providing 30 million dollars in credit to their customers.
Dan Humiston: [00:01:11] Today. Raising Cannabis Capital, We are joined by Matt Liotta, the CTO of Agrifood. Matt, welcome to the show.
Matt Liotta: [00:01:18] Thank you for having me.
Dan Humiston: [00:01:19] Well, it's great to have you on the show because your company is filling a need that's plague cultivation facilities really since the beginning. It's how do you increase your square footage yield and aggregates products have solved this problem by. Yes. Seems kind of obvious, but you're taking advantage of the wasted space by going vertical.
Matt Liotta: [00:01:38] Absolutely. Well, I'll tell you that we're not the first person to think of the fact that there's all this vertical space in a facility. Why don't we use that? But what we've done that's different is come up with a really ingenious way to use that, because in the past, the way people have used that vertical space is they either built multiple floors, which is a construction project, really expensive. They might build a mezzanine floor. Also, a construction project is expensive. Or the cheapest way to do it that a lot of people do is they use some sort of mobile scissor lifts or other kinds of equipment that allows people to go up and down and access very large, multi-tier racking systems. We just don't think that's the way to go. And so what our vertical farming unit does is, first of all, it provides a great completely soup to nuts enclosure for having a microclimate to grow Cannabis. So you can do really precise growing of the Cannabis in that unit. But then the unit itself is stackable and we provide a catwalk module that actually spans one unit to another. And so you actually can build your mezzanine floor just by spanning that catwalk, using the existing structural capability of our unit. I see. Yeah, that's great.
Matt Liotta: [00:03:03] So in the end, what you do is you get all of the advantages of going vertical like you would with multiple floors or a mezzanine approach without the construction expense. And what we find is a lot of people have underestimated putting a lot of construction expense into their building. So when you think about your average person who's building, let's say, a Cannabis facility, they're optimistic about their future. Their facility is going to work great. Their business is going to thrive. And what I like to tell people is, well, let's talk about that. When you're successful with your facility, what's going to happen next? Are you going to build another facility? You're going to expand your facility. How's that going to work? And when you put all of your investment into the building, it stays with the building. But with our equipment, you're putting your investment in our equipment. And if you are successful and you do want to expand to another facility, you can take the equipment with you. Huge difference in investment from that point of view.
Dan Humiston: [00:04:02] Yeah. I'm going to probably say something that is going to messed me up here, but I think there's a tax advantage, too, because if you improve your building, it takes like thirty nine years to depreciate because of the improvement. But if it's in fixtures, you can depreciate it much quicker. Is that true?
Matt Liotta: [00:04:19] Well, I'm certainly not a tax expert, but yes, I do believe that the appreciation schedule for our equipment is shorter than the depreciation schedule for a building.
Dan Humiston: [00:04:28] Yeah, that's a that's a huge advantage. And that same line of thought, if they completely build out their facility and they can't get any more, you offer another thing, which I think is a game changer. And that's the container firms, which to me just look like the back of a semi-truck container.
Matt Liotta: [00:04:45] Farms actually offer a number of different solutions. It could be for the purpose of expanding an existing facility very easily outside of that facility, like in its parking lot or if you have some extra land. Some people also use our container as a way of speeding up the start of the facility. For example, their facility is under construction and they'll put the containers at the facility and start operating with the containers first and then transition their operations inside once their facility is constructed. And then there's oh, sorry, there's a there's also a third thing that we saw one particular customer do that we think is actually a really great idea. They were having some disease problems in an existing facility. And what they did was they used one of our containers to put their mother plants in there and they were able to sort of have a clean environment to start over without having to shut down their operation, their existing facility. So they were able to move some plants out of their facility, get everything cleaned up, and then move it back in and really overcome their disease.
Dan Humiston: [00:05:56] What a great option. And basically all they do is just plug it in and add water. And it's good to go.
Matt Liotta: [00:06:02] Yeah, there's utility hookups that you'd expect, water, electrical, what have you, some minimal amount of site work just to. Profits so that the containers can be leveled and accessed by people. But it's very minimal compared to a typical construction project.
Dan Humiston: [00:06:17] That's so cool. That is so cool. I think what a lot of people when they're getting into say you just get a license. It seems overwhelming. What I like about what you're doing is that you expanded beyond just the equipment. You're really oh, now a one stop shop. You formed a joint venture with Valiant, which is a cultivation design engineer construction firm. So now people can just say, hey, here's what I want to do. And then you guys take it from there that there's not a lot of subcontractors. It's all under one roof. I think that's really important.
Matt Liotta: [00:06:48] Yeah. I think people do not appreciate just how challenging it is to be in the Cannabis space. You get your license, as you said, and then you're next on to designing a facility. And then from there you're constructing the facility. Then you have to operate it. And then only then if you've done all of those things. Exactly correct. Can you actually produce some product and maybe make some money. So that doesn't deal with anything on the retail side, for example. You also have a dispensary that you have to design, construct packaging for all the units. So there's just a lot of complexity in this business. And obviously it's a new and fast growing business. So there's a lot of things that people are learning. And so what we're trying to do is to really help these new businesses with that learning curve by being their cultivation partner. We know how to design a facility. Valiant has extensive experience constructing facilities. And we really understand the equipment that you go inside that facility. The standard operating procedures to optimize the results coming out of that facility. And we can really help a customer go from, you know, that license with what do I do, too? We've got a whole plan and they just have to follow through on on that plan. And then they're up and growing and they have a product they can sell.
Dan Humiston: [00:08:14] Yeah, it's interesting to stick with what they know. They don't need to become an expert in construction. They don't need to be an expert in equipment. They just stick with what they know and they can focus on what's important to their business. And let you guys worry about that other stuff. But under the same, heading into sticking with what they know. You also provide the software. So once the facility is in place, you have the software that's integrated with everything that you already have. You really a one stop shop.
Matt Liotta: [00:08:39] That's absolutely correct. You know, so much of this industry is vendors that sell a piece of the solution. They don't sell the whole solution. And that requires people to integrate disparate technologies from many different vendors and integrations. Tough. In fact, there's whole businesses that offer you integration services because of how tough it is. We designed everything from the ground up the hardware to HP, AC, the software to work together specifically for Cannabis. We've done all of that engineering work. We've thought through all the design applications, all the tradeoffs. And we made them. And in that process, we didn't just do this in a vacuum. We have actual experience, growing facilities. We know what it's like to be an operator. And we know that, among other things, it's not simply enough to have equipment and software to control the equipment, to grow the plants. You also have to concern yourself with managing people and their workflow and their processes. You also have to concern yourself with how many different strains of genetics are you going to run? And are there slight differences in how you grow those? And that may lead to scheduling complexities that are very difficult to overcome. We see so often growers compromise on what they know is the right thing to do for the plant because they can't handle the complexity of having 20 different strains, all with slightly different schedules for different parts of the grow process. Our software takes care of all of that for you because we know that growers, they don't want to compromise. And the business owners who are expecting a facility to operate consistently, they need help doing that. And that's really what I think our software and our technology is going to bring to our customers and ultimately to the industry is consistent. Cannabis.
Dan Humiston: [00:10:47] I want to take a quick break to thank you for listening to today's show as the exclusive Cannabis podcast network. We're constantly adding new Cannabis podcast to support our industry's growth. And that's why we're so excited to welcome the Seed to Sound podcast to our network. The team at Seed to Sound has produced over 50 exciting and thought provoking Cannabis podcasts. And now you can listen to all their previous episodes and all their new episodes at MJ Blaze.com. So welcome seed to sound. And stay tuned for new exciting Cannabis podcast on the MJ Ables Cannabis podcast network.
Dan Humiston: [00:11:27] I would say if there was one thing maybe missing from this mix was capital and you've solved that too. I saw in December I think I saw an announcement that you guys are providing your customers with a line of credit.
Matt Liotta: [00:11:40] Well, sure. Capital is one of the obvious problems in the space, and we wanted to provide that as part of our solution, too. So we get announce that we've made available 30 million dollars of financing to our customers.
Matt Liotta: [00:11:55] We're hoping that really changes how people look at their investment for these facilities. You probably know most people are raising capital via equity and they don't have access to traditional kinds of debt vehicles to help them. And so they could really give up a lot of their company on the equity side by providing them dad opportunity. They can mix some of the equity raise with some of the debt from us and really have a better cost of capital for their operation.
Dan Humiston: [00:12:29] Yeah, it's tough to get into a business as complex as cultivation in the size and the scope of the operation. It's tough to go into that on a limited budget. I'm sure it's very helpful for companies to have this access to the capital 30 million dollars. I mean, it's a serious commitment to this industry.
Matt Liotta: [00:12:47] We do think it's a serious commitment, but we also don't think it's enough. We expect that we're going to use up that 30 million of capital relatively quick and we're going to need to come back to the market with even more capital.
Dan Humiston: [00:13:02] Well, speaking of that, maybe give us an idea what your plans are.
Matt Liotta: [00:13:06] Well, we just had a successful . We were really excited to participate in that show. He's got a enormous pipeline of customers.
Matt Liotta: [00:13:15] So we're really excited to deliver these solutions in a number of jurisdictions throughout the United States and Canada. We even have some international projects we're working on. So we're truly excited about that. We are also working on some new products that we hope to introduce in the second quarter of this year. And in those cases, those will be some improvements to our existing products, as well as some new category changers that we think that the industry overall will benefit from.
Dan Humiston: [00:13:46] Will you be raising capital or maybe going public?
Matt Liotta: [00:13:50] Yeah, those are excellent questions. So I can tell you that we have decided to close a series a round in our business this month and then we do have plans of going public this year. So we're super excited for that. And we hope that we can talk to you more about that as we're able to know for sure.
Dan Humiston: [00:14:10] It will definitely come back on the show and give us more information about that. We've been speaking with Matt Leotta from Agrifood. And all of his contact information will be in the show, notes and agrifood. His information will be in the show notes Amboseli on MJ Blaze.com. Matt, lot to talk about. It's really exciting stuff. I appreciate you being on the show today.
Matt Liotta: [00:14:28] Well, thanks so much for having me.
Dan Humiston: [00:14:30] This is good stuff. Again, promise me you will be back when you guys make plans for going public.
Matt Liotta: [00:14:35] Absolutely. Happy to talk about it.
Dan Humiston: [00:14:40] Today's show was made possible by the generous support of our sponsors. Like all 36, the country's premiere blockchain payment processing platform that's providing dispensaries and its customers with a safe and secure payment option other than cash. To learn more. Go to ulp 36 dot com. Today's podcast was produced by MJ PBL's Media, the industry's premier Cannabis podcast network with original music, produced in part by Jamie Humiston. I'm Dan Humiston and you've been listening to the Raising Cannabis Capital podcast.
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