The genetics created in Amsterdam by these two young cannabis entrepreneurs from California are still the dominate genetics today. Rezwan Khan from DNA Genetics joins Dan Humiston to share his company's story. He also talks about their partnership with Canopy Growth, their IP licensing agreement and their plans for the future. Produced by PodCONX https://podconx.com/guests/rezwan-khan
The genetics created in Amsterdam by these two young cannabis entrepreneurs from California are still the dominate genetics today. Rezwan Khan from DNA Genetics joins Dan Humiston to share his company's story. He also talks about their partnership with Canopy Growth, their IP licensing agreement and their plans for the future.
https://podconx.com/guests/rezwan-khan
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Rezwan Khan: [00:01:35] $100million Solidere Chicken. We're gonna bring in Russian botanist and we're going to bring in the best tomato farmers. Check, check. We've got this guy. He's from Colorado. This is the master grower. OK. Check. OK. We got our lights check. We've got new things. They spend a ton of time and energy and money on government affairs, on obtaining licenses, on attorneys and every aspect of their business.
Rezwan Khan: [00:01:56] And then when it comes to genetics and they're just sourcing from whoever and they trust whatever, first each of their master, quote unquote, grower.
Dan Humiston: [00:02:06] From MJBulls Media.It's the Raising Cannabis Capital show. I'm Dan Humiston. And on today's show, how the genetics created in Amsterdam by these two young Cannabis entrepreneurs from L.A. are still driving the industry today.
Dan Humiston: [00:02:32] Today, an Raising Cannabis Capital, we are joined by Rizwan Khan from DNA Genetics Rizwan. Welcome to the show, baby.
Rezwan Khan: [00:02:40] How you doing?
Dan Humiston: [00:02:41] Doing great. Doing great. I am really excited to finally have you on the show. We missed each other at the MJ big show. And I have so many questions for you. But let's start off by telling our listeners a little bit about DNA genetics. Over fifteen years, you guys have developed genetics and you have won over 200 or more awards in all different categories at prestigious Cannabis events around the world making DNA genetics, the global standard for breeding and growing best in class strains. Let's start this off with your company story. It's such a great story and it's so Cannabis.
Rezwan Khan: [00:03:16] Yeah, absolutely. So it's interesting. I mean, a lot of times these things grow from necessity long before the company was formally founded. Our founders, Don and Aaron, are both Cannabis aficionados from Los Angeles.
Rezwan Khan: [00:03:31] Something happened in the early 90s in L.A. where Kush really just was all the rage. You know, when that oji Kush first hit, I mean, you could tell them something very different about that in many people's opinion, just better than what was currently being circulated. And this has been watcher's crash again. Anybody who knows what Amsterdam looked like in the 90s, I mean, there's a lot of homogenous, very watered down to genetics is the same hazes, the same things that you'd find there when in here and actually went to Amsterdam to form Dena. genetics. In 2004, they did something that we none of us really could have appreciated at the time. They broke the paradigm of what a seed company was. They wanted to be authentic. Their major concern was that when you went to go buy seeds from a seed company in Amsterdam, it was like a crapshoot. You open up the seed pack, you never know what you got. Oftentimes, you know, you have to get those seeds from Amsterdam to wherever you lived in the world. And there's no way you could just return it, certainly if you grew the plant out. It doesn't work like that. So there wasn't any authenticity. There wasn't any accountability in the seed market at that time. And so what they really wanted to do was fix that. You get some seeds and it's actually what you think it is. They took all the best genetics from California to Amsterdam and put them a seed and then used that as an initial breeding stable along with other Vlade races that they picked up from European strains and so forth, and really started to develop and curate this library of genetics that were noticeably of a higher quality.
Rezwan Khan: [00:05:05] They were selecting for g profiles and morefor aromatic and flavor and just yield, for example. Right. And so what happened is they were very successful at just putting their strains out to market and people organically wanted to grow it because they were better than what was available. And so one thing that would happen is we're the all the world's cultivators started to. Time and time again, shoes. DNA genetics to put in their rooms.
Rezwan Khan: [00:05:36] You had this very real relationship with the growers from all around the world, researchers, the DNA army that started to really grow Dena. genetics.
Rezwan Khan: [00:05:46] And this started to really build the brand and the company. And it created something that I don't think donein Erin or any of us really saw coming out as time kind of started to pass and the legalization in the United States started to take place.
Rezwan Khan: [00:06:01] I had decided to go to law school senior to go to law school.
Rezwan Khan: [00:06:06] Josh Hamlyn, who's our Ciello a Dena. genetics. Now, the two of us, we just jumped right in the saddle, more like, what are we going to do with this? Let's really take this to the next level. At that time, there was a young company and they weren't even called kanika yet. They were called Tweed at the time. And so Bruce, when he came to us and said, look, I Canada's going to legalize, this is my vision for Canopy. This is what it looks like. Let's enter into this global partnership. Josh and I had kind of been working on putting together what would be a global licensing platform where we would be able to license our genetics to a licensed producer, to somebody who had the legal ability to cultivate whichever territory they're in. And in return, pull a royalty. The heartland, really an IP company, if you think about it that way. Yeah. Again, at the time we had an advantage. Other companies weren't able to file intellectual property protections at the USPTO because of the United States position federally against Cannabis. We were a Dutch company. We had the advantage of Benelux registration and then as soon as we did the canopy deal and Canada legalized and we had the advantage of Canadian registration, we really had a lot more teeth behind our IP than some of our competitors. And then, Patty, the ability to ship seeds legally from Amsterdam to Canada through our phytosanitary certificate, certificate of origin, all of the other paperwork that is required to do so. Other companies can do that. Wow. Just ahead of them in having the phytosanitary certificate. Ahead of them and having the genetic library ahead of them and having all the IP protection, we've got all these advantages in terms of being able to really monetize this special opportunity that we believe we had. And we kind of framed that all under this this licensing agreement. Now we showed up to Smith Falls, abandoned Hershey's Chocolate Factory to meet Bruce and Mark and the entire team over there.
Dan Humiston: [00:07:54] For the listeners we're talking about at the time, it's tweed, but it eventually becomes canopy growth. Correct?
Rezwan Khan: [00:07:59] Yeah, it eventually becomes kind of a growth. Bruce was like, look, we're going to move fast. We have a global vision. That's why we're so interested in working with you guys. Bruce understood that you can't invest the amount of money that people are investing in Cannabis without accounting for the genetic variable. This is probably the single biggest point that every investor in Cannabis and all these new Cannabis companies have missed.
Rezwan Khan: [00:08:21] Well, I can't get rid of 100 million dollar facility check. We're going to bring in Russian botanists and we're gonna bring in the best tomato farmers. Check, check. We've got this guy. He's from Colorado. This is a master grower. OK. Check. OK, we've got our lights check.
Rezwan Khan: [00:08:34] We've got new leads.
Rezwan Khan: [00:08:35] They spent a ton of time and energy and money on government affairs, on obtaining licenses, on attorneys and every aspect of their business.
Rezwan Khan: [00:08:43] And then when it comes to genetics and they're just sourcing from whoever and they trust whatever person told them, their master, quote unquote, grower traveled the world, all of these things, then they're failing.
Rezwan Khan: [00:08:53] There's so much variability in the Cannabis as is. So to not have that accounted for and controlled. It's very difficult to be successful.
Dan Humiston: [00:09:01] And the reason that you guys don't run into the same problem is because you had so many years over in Amsterdam in an illegal environment to pefect and to work out all the imperfections and variables so that your genetics is really tight and stable. Is that why you have such an advantage?
Rezwan Khan: [00:09:19] Absolutely correct. And it's not just Amsterdam. Remember, California legalized for medicinal purposes in 96 and we operated in a closet gray area for about 20 years where you didn't have real regulation, but all you needed was to have enough patients that we're in your collective circle of distribution and call it to be able to have an affirmative defense in court. So we grew a lot of weed in California. In addition to Amsterdam. And you're right. We had the opportunity to study the optimal conditions that each cultivar needed to really thrive.
Rezwan Khan: [00:09:55] And then we were able to codify a lot of that and come up with strange specific S&Ps, the standard operating procedures so specific to each phenotype of each cultivar, rather than just a standard operating procedure for cultivation and pretending that that was going to work for everyone. And that's a piece that becomes very important when you try to do this on a large scale.
Dan Humiston: [00:10:18] I think a short break to let you listen to a quick preview of our next episode.
Michael Scherr: [00:10:23] Take a liking to this product idea of being able to celebrate with a joint in your cake and shoot that network, I was invited to Spook's kind of pan L.A. to have a birthday cake with 20 birthdays and I got to carry it out and sing Happy Birthday to him as well as once in a lifetime. Opportunities that you clearly fragment till after it happens and you see a picture do you're like, wow. I just say happy birthday to you.
Dan Humiston: [00:10:50] Tune in on Thursday to hear Michael share from ARIA Brands. And now let's get back to the show. So back to your story.
Rezwan Khan: [00:11:00] So you've got to imagine that time in a Bruce and. Were you a global vision? We're going to be the biggest producer in Canada. You're going to be the biggest Cannabis company in the world. And we said that we're going to be able to provide you with, you know, obviously license to the brand, which has an incredible reputation. But then also make sure that we can get your product to a point where we can all sign off on the quality. And, you know, you fast forward a little bit and Cannabis sets the standard in terms of, you know, market cap of what a Cannabis company is. And we were the Intel HomeSide that helped get them there. Yeah. And so it was amazing to see the success that we had together. And then it became OK. Well, now supplicating you know, a lot of people started paying attention as well. So as you can imagine, we started to entertain discussions about taking our company public and going out, getting our own boat out into the water. And what that will look like, because a lot of people were very fascinated by our business model. It's really strong in terms of the minimal amount that we need to put out to get the job done. It's an IPO. You got to really think of it like that. It's an incredible opportunity for everybody. And I think that's what kind of prompted the reformation of the company. It became more like, OK. Let's replicate this. Let's reform the company so that we can build value for a, you know, call it a group of shareholders or eventually for the investing community.
Rezwan Khan: [00:12:27] We'll start to replicate the success that we've had with Canopy in Canada all over the world, in every territory that legalises and activates for a commercial Cannabis activity, whether it be medical or adult use.
Rezwan Khan: [00:12:40] It's our job to find the best partner, somebody who shares the same vision and alignment on a variety of things and letting us, you know, continue to put quality products out and the vision we see for our brand. And then providing them access to our library, proprietary genetics and then connecting the dots as we find, you know, market penetration in each one of these markets. And so since the initial kanika deal resigning extension for an additional five years with Kennedy because it's just going well so well for both of us. We also signed a deal with them for Jamaica and then also for some a couple of key European territories. And then really started to hit the states hard. I mean, we've gotten a battle, Arizona, Oregon, Massachusetts.
Dan Humiston: [00:13:31] When I'm listening to this story, it so much reminds me of the software slashed hardware story where IBM and Compaq are the computer companies are making. And then they say, well, we need some software, let's just get some software in here. And Microsoft goes, yeah, we'll build that for you. No big deal.
Rezwan Khan: [00:13:49] It's exactly it's exactly what it is. I mean, there isn't a better analogy.
Dan Humiston: [00:13:53] You guys are like, you guys are going to be Microsoft someday. They can be looking back saying, oh, no cultivation facilities. They can do it. We can build us anywhere, but we can kill the genetics. That is so cool.
Rezwan Khan: [00:14:05] I mean, if you want to be successful recently, there is a scenario where we walked into a massive facility, massive greenhouse, like we're talking about like 10 acres in greenhouse or flowering canopy. And they were having incredible problems and they were doing their best. They brought in what they thought were experts and thought that they had accounted for every variable. And as soon as we showed up, we were able to take them from, you know, production numbers where they were getting a little over a pound, a like three pounds light, almost four. And the quality of their greenhouse flower better than even the indoor flower. So, I mean, all of a sudden we were able to flip the entire operation intuiting ratably, attractive model Mishkin and tons of revenue, the bottom line increase as opposed to what it looks like when you cut the three and a half pounds back down to one and a half pounds and the quality from better than anything in the market to something that you don't even feel comfortable releasing. And it really is that big of a range. And it's really awesome. I mean, really proud to be able to make people that successful.
Dan Humiston: [00:15:06] Well, you've done a lot of things that are sort of cutting edge. I mean, in addition to the genetics, also putting together business model in the in the licensing agreements and all that is the framework that has got you in a position like the Microsoft position. And we could go on and on. I wish we had more time in the show to talk about this stuff. But I know what I right now, all of the people that are listening are saying they're going to we're gonna be an opportunity for people to invest. I know you talked about going public, but prior to that, is there are you in any capital raises right now? Are there opportunities now or in the future that you can talk about?
Rezwan Khan: [00:15:40] You know, that's a great question. There was an initial round when we reformed the company and then we were looking at possibly going and doing another raise.
Rezwan Khan: [00:15:49] But obviously, you know, a lot of factors. You look at what your plans are in terms of spending the money, whether there are hard assets.
Rezwan Khan: [00:15:57] Secure. In addition to do this genetics company and really being an IP company. We're from California and we have a landmark in Amsterdam. Do we want to drop another brick and mortar in L.A.? So a lot of the question of is there going to be another raise or another opportunity to invest?
Rezwan Khan: [00:16:15] Really would depend on how fast we want to grow and in what direction. The other thing, too, is the markets as of late have been just absolutely volatile and just horrible.
Rezwan Khan: [00:16:28] There's a major consideration. Do you want to jump into the storm? Do you make a decision to jump in and me as a fiduciary?
Rezwan Khan: [00:16:37] I think I'll be kind of responsible to say, hey, there's market conditions were horrid. Let's get out there. There isn't a rush. I guess you could say we've got a, you know, strong company, a strong team, strong model and are healthy all around. So I don't think that there's really a need for us to go grab capital, you know, unless we actually need it.
Dan Humiston: [00:16:54] If you're profitable right now, why give it up? Why give up any aggrey? Yeah, well, when you do, you gotta come back on the show because that's going to be a time where everybody is gonna be waiting for that.
Rezwan Khan: [00:17:06] Oportunity Oh absolutely. Things move so quickly that I firmly believe that there will be opportunities and I'm really excited about getting to that point again. It's one of those things everybody has to watch closely because the windows open and closed. Most people that are that are doing something that's valuable, they're oversubscribed before they even tell anybody really that they're looking in, they're out. Yep. That's the difference. Because when you're not exciting and people don't really like or buy into what you're doing, it becomes really difficult, especially if you're doing the same thing everybody else is doing and they're all losing money. Well, those guys can't raise money. I mean, to save their lives. Look, the announcement a couple of weeks ago is coming in as an investor to the. That alone, as you can well imagine, drummed up quite a bit of interest from prospective investors, from just people that are watching and the Cannabis industry. I mean, he jumped out on a series of talk shows with that t shirt that had the five companies on it. And that was prior to the deal. Know, even announcing the deal, it was going to those things where it's like, boom, that little fire. I'm really grateful to be one of those few companies that everyone's still talking about and interested in analysis, you know, really important to make the best decision moving forward for everybody. And I think we're in a good place. And you're gonna do that.
Dan Humiston: [00:18:17] When you do, we'll definitely have you and everyone of our listeners.
Dan Humiston: [00:18:21] This is could could be viewed more as a teaser episode because there is an opportunity today.
Rezwan Khan: [00:18:26] But I have a feeling when we'll be down the road and if you want any information, we have all of DNA genetics information in the show notes and we'll also have it on the MJBulls Web site. So, Juan, thanks for being on the show today. This has been really.
Rezwan Khan: [00:18:41] Thanks. Yeah, anytime. Anytime.
Dan Humiston: [00:18:44] Exciting stuff. Wow. Keep it up.
Rezwan Khan: [00:18:47] Thank you. Thank you.
Dan Humiston: [00:18:51] 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 all 236.com. Today's podcast was produced by MJ Bulls Media. The industry's premier Cannabis Podcast network with original music, produced in part by Jamie Humiston.
[00:19:18] I'm Dan Humiston and you've been listening to the Raising Cannabis Capital podcast.
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