Will the future of extraction be franchised? For over a decade, Bhogart has manufactured Large and small-scale Hydrocarbon extraction equipment. CEO, Tom Lynch and System Designs, David Zell join Dan Humiston to announce the opening of their first retail extraction location in Oklahoma. They intend to then replicate this concept with franchise locations throughout the country. Produced by PodConX MJBulls - https://podconx.com/podcasts/raising-cannabis-capital Dan Humiston - https://podconx.com/guests/dan-humiston Bhogart - https://bhogart.com/ David Zell - https://podconx.com/guests/david-zell Tom Lynch - https://podconx.com/guests/tom-lynch
Will the future of extraction be franchised?
For over a decade, Bhogart has manufactured Large and small-scale Hydrocarbon extraction equipment. CEO, Tom Lynch and System Designs, David Zell join Dan Humiston to announce the opening of their first retail extraction location in Oklahoma. They intend to then replicate this concept with franchise locations throughout the country.
MJBulls - https://podconx.com/podcasts/raising-cannabis-capital
Dan Humiston - https://podconx.com/guests/dan-humiston
Bhogart - https://bhogart.com/
David Zell - https://podconx.com/guests/david-zell
Tom Lynch - https://podconx.com/guests/tom-lynch
Dan Humiston: [00:00:00] Today at MJ bulls, we are joined by CEO, Tom Lynch in systems design specialist, David Zell from Bogart extractor, guys. Welcome to the show.
Tom Lynch: Thanks for having.
David Zelle: Yeah.
Dan Humiston: Well, I appreciate you doing this on such short notice. This is really exciting. I started looking into your business and preparing for this show and I gotta say one thing about the cannabis industry that most people outside the industry don't immediately connect. It's just how vast it is.
Literally every type of business is in the cannabis business, including what you do. Manufacturing Bogart has been an industry leader in hydrocarbon extraction for over a decade, manufacturing, both large and small scale to extraction equipment. Now Tom, a large portion of our listeners are investors.
They get all mad at me when I get too technical. So let's just start by talking about your customers. Who are they and why do they select your equipment?[00:01:00]
Tom Lynch: The customers are marijuana or cannabis processors that typically have a large volume or a flower or. Trim that they want to convert into oil
Dan Humiston: Okay. And what are some of the advantages of, the type of equipment that you manufacture?
Tom Lynch: and propane tend to have a higher end product than other solvents, like ethanol that are a little more aggressive.
David Zelle: Right. So even for a, distillet producers who are going to be further refining their product, the crude oil that comes out of a hydrocarbon extraction with butane or propane actually starts out cleaner. And so you don't have to do as much work to clean it up afterwards because it's a little more.
And not only that, but the hydrocarbon extraction also leaves behind, things like turpines, which are largely responsible for the flavors and the tastes of the higher grade extracts. So those solvents can create things like the sauces and the sugars that have that real top shelf [00:02:00] appeal.
Whereas, things like ethanol are going to have a lot more trouble making a product like that.
Dan Humiston: Okay. I heard I, one of your interviews. That you did, where you talked about bringing the temperature way down. I'm over my head, but I just thought at the time, I'm like, why would they need to bring the temperature down? So.
David Zelle: Right. So, one of the main reasons why people are going to do that is because you actually pull out a cleaner product from the plant material when you run at such a low temperature. So. Below about negative 20, most people shoot for like minus 60, but below about negative 20, the solubility of the fats and lipids and other kinds of.
Really drops off significantly. And especially below freezing, you don't pick up water or any of the water-soluble stuff like chlorophyll, which, makes it turn more green. And so, dropping down that temperature ensures that you pretty much get the cannabinoids and the turpines, much more selectively than you otherwise would be pulling out of the plant [00:03:00] material.
Dan Humiston: Now you make equipment for, as I mentioned, for both larger operations and smaller operations, so that the bigger operations let's just focus on that for a second. Like how much would your equipment process say in an hour.
David Zelle: Well at a facility that we operated up in Arcata, California , for about a year. I think we were processing in terms of dry biomass just made into crude oil. About 500 pounds per extractor per day. And so between the two extractors running at the facility, we could chew up, 5,000 pounds in a workweek
Dan Humiston: Well,
David Zelle: and still go home for the weekend.
Dan Humiston: That is impressive. You've been doing this for a long time and you probably over the years have probably built up a lot of SLPs , just from working with different clients and techniques that worked really well. If you incorporated a lot of those techniques into your [00:04:00] development and also in helping your newer clients make sure that their product is the best.
David Zelle: Absolutely. Yeah. A lot of these post-processing procedures, like, the procedure for crystallizing diamonds in a jar, That's going to be the same, whether you do that in California or Oklahoma or Michigan, or I think Mississippi didn't, they just legalize it. So you know, that's going to be the same, no matter where you go.
And we already have. Operating procedures pretty much dialed in for the California market, which is, notoriously highly regulated. So, these procedures should be easy to drag and drop pretty much anywhere in the country. We feel at this point,
Dan Humiston: Speaking to the rest of the country, I know you have a project going on in Oklahoma. Maybe you can tell us a little bit about that project.
David Zelle: I'll let Tom take the lead on this.
Tom Lynch: Yeah, that's going to be a Bogart. Master vapor store, which sells hydrocarbon pumps. And we're going to have the ability to have an extraction facility in the store and a dispensary.
Dan Humiston: Wow.[00:05:00]
Tom Lynch: it's going to be a pretty cool store.
Dan Humiston: That's gotta be the first of its kind.
Tom Lynch: It probably will be yeah. Where we can actually extract cannabis in the store.
It should be a useful tool for us to be able to test the equipment and showcase that and just advance everything a lot quicker.
Dan Humiston: Oh, yeah. And a lot of people are really curious about the whole process. Would you make it so that people can actually watch the process?
David Zelle: Yeah, we can probably even do hands-on training and that kind of stuff for clients or people who want to consulting services as well. So, there definitely would be some opportunities for that. You know what, one of the biggest problems we have when selling large equipment is that people who are specially trained in running a large extractor, that takes up pretty much an entire room.
Sometimes few and far between. And so offering those kinds of training services and hands-on experiences when you actually are buying the equipment, it gives a lot more reassurance to the client that there'll be [00:06:00] able to do something productive with it, that it will be worth their money.
Dan Humiston: Yeah, of course your cause is a significant investment. It's not cheap. And I think this kind of rolls into one of the things that I got most excited about. We talked about. before we went on, you were telling me about this really cruel project that you're working on. Can you tell everybody about the franchising idea that you're working.
Tom Lynch: Yeah, sure. Our Oklahoma store is going to be the first model that we're going to roll out. And we hope to be able to expand in the Southeast and up in the Northeast as well with finding the appropriate partners to just set up extraction facilities in each respective municipality.
Dan Humiston: Wow. So , in other words, the one you're building in Oklahoma is going to be sort of the prototype. , this is the idea. And then you're just going to cookie cutter this throughout the country.
Drag and drop. I love it. I love it. And so if somebody wants to become like a master franchisee, or wants [00:07:00] to, maybe buy the rights to their city, is that how the branch sizing operation.
Tom Lynch: Yes. That's how we're envisioning it. Yeah. State by state.
Dan Humiston: Good, good, good. That's one of those things that I think is going to really be exciting because I know so many people are curious about a franchising operation and . There aren't that many in the cannabis industry right now, yours is one of the first that , that I've really talked to about franchising.
Big interest in this, especially from our listeners. So when do you think this will be available?
Tom Lynch: We hope to have Oklahoma open in April.
Dan Humiston: Oh, wow. So this is happening right now. This isn't on the drawing board. This is on the way.
Oh my gosh. That's awesome. So if somebody was interested in becoming a franchisee, what's the next.
Tom Lynch: But we have a person that's kind of working out the whole backend enrollment process into it currently. Now. In regards to the exact details, we haven't quite worked those out yet.
Dan Humiston: But if somebody was interested, there's definitely somebody that [00:08:00] you can talk to about it. It, again, back to one of my earlier questions where you have all of this institutional knowledge from years and years of doing this, and you'll be able to share this knowledge with the franchisee.
David Zelle: there's one more quick little story that I would like to tell you, which really emphasizes why it might be beneficial to join in with a program like ours. So, in the past, I've done consultations as well for legal facilities in multiple different states, and, one thing I've seen before is people make the wrong equipment choices, or they try to use equipment for things that's not really designed for.
Or the probably the worst case I've seen is they hired someone who. What I think they did was they probably just bought some SLPs off the internet, cause there are people that'll just sell you operating procedures. So I think he just bought the SLPs, read them and thought he knew everything, sold himself as more than what he was and got into the facility, tried to run things and basically butchered about a hundred thousand dollars [00:09:00] worth of product that had.
I ended up being retreated with CRC media to clean it up and make it presentable or reprocessed is distillate in order to get it to a state where it was actually sellable. And when I got there for the con consultation as well, he also was using. $10,000 a month, I think in consumable chemicals, like a liquid CO2 to chill down his extractor.
And when I made a chiller recommendation for him, he was able to swap in the new equipment and he ended up paying it off in terms of the savings and maybe two or three months. And so it's those kinds of decisions that we can help.
To avoid making, which can really help a business sink or swim.
Dan Humiston: I'm really glad that you shared that information with us because , that's the kind of stuff that people that are just getting into this. Even people that are involved with. I may not be aware of. And that's why it's great to work with somebody that's much experienced as you folks have. , we have all of Bogarts information in the show notes. So if you want to, yeah. So if you want to check out their [00:10:00] extraction equipment or learn more about maybe potential franchise opportunities, just click the links in the show notes, guys. I am sorry that we didn't get super deep into the technical aspect of your business. I really enjoy what we talked about, especially the franchising thing. I just think you're onto something. I really appreciate you being on the show.
David Zelle: Sure, thank you for having us.
It was great being here.
Tom Lynch: Yeah. Thanks, Dan.