First of all, how are you and your family doing in these COVID-19 times?
Troy Ivan: Along with everyone else, everything has been much more difficult than usual. I have three children in school, and it’s been hard for them not to have a normal amount of in-person interaction with their friends for nearly 7 months now; I think that is what’s taking the biggest toll on them. Other than that, I count ourselves extremely fortunate to be healthy and live in an area where we have plenty of space and fresh air. I know there are so many people suffering terribly and my thoughts and prayers go out to them.
Tell us about you, your career, how you joined ExtractCraft.
Troy Ivan: I worked overseas in the finance industry for a number of years. It was great and honestly an unbelievable experience, but I put in enough time and was senior enough that I had to make a choice of putting the job or my family first.
I had two small children ages 7 and 3 with another on the way, and I decided I wanted to retool my life and spend as much time with my children as possible while I had the chance. I chose to roll the dice and take the chance, retired from the financial industry, moved from Tokyo to Boulder, Colorado, and started flying airplanes and looking for opportunities.
After 2 years in Colorado, I’d made one investment in a local startup that was floundering and probably not going to make it. I received my Certified Flight Instructor (CFI) certification and was teaching at the local flight school, but I was still searching for that elusive ‘something’ I knew was waiting for me.
In 2014 at an early morning Longmont Startup morning coffee group, I saw Lee Sutherland do an investor pitch for ExtractCraft’s seed round. The idea was so far out there, nearly a pipedream, in the dreaded hardware manufacturing sector, in an incredibly uncertain cannabis-related market at the time, but I could see the application and a glimmer of opportunity where nothing like this had ever existed. The fairly complicated tech solved a problem no one had been able to solve before. The product made a very complicated process unbelievably easy. I became one of the original investors, spent another 2 years hunkered down in my garage figuring out how to make what we had into a real product with reliable processes, I joined the management team, and here we are.
How does ExtractCraft innovate?
Troy Ivan: Our main disadvantage is that we are not a well-funded startup like you hear about often with VC money to throw at whatever we want in order to stoke and accelerate growth. Our funding has been thin up to this point, where we are much closer to a bootstrap development model. For the most part, we can only eat what we kill. We have been successful because of our great ability to not only innovate but efficiently execute innovation. Lee is the founder and CTO with a very long engineering career history, and we have a second engineer in-house as well. We have the skill set to design, model, produce, and test ideas very quickly and inexpensively compared to companies without in-house talent like ours. We are still small enough where we have the ability to make changes and iterate on very short notice.
How the coronavirus pandemic affects your business, and how are you coping?
Troy Ivan: It’s been a mixed bag. On the sales side, the business has been strong through the whole ordeal. I think a combination of people spending time at home and the initial stimulus were the main support there, but fulfilling those orders, in the beginning, was problematic. We fell in a gray area that wasn’t explicitly clear if we were “essential” or not, so we closed the office for the most part, with some production work being done from home and me running the minivan, all seats removed, back and forth to FedEx.
While those difficulties have been alleviated by having all staff back in the office, supply chain, and production order fulfillment out of China are causing problems and restricting our ability to execute growth. We are generating considerable increased traffic and traction but servicing that is going to be the problem going forward. The bad news is we have left a lot of growth opportunities on the table this year, but the good news is that we should be able to recover that in the medium term if the pandemic situation and economy continue with positive forward momentum.
Did you have to make difficult choices, and what are the lessons learned?
Troy Ivan: I was paying very close attention from the beginning when this was developing in China at the end of 2019, so I began positioning early. My primary concern was being able to keep our employees safe and paid while keeping the company as strong as possible. Everyone was paid full salary the whole time regardless if they were working or not. The most difficult decisions arose from and continue to be related to production orders from China. We needed to order a lot of inventory to push growth for 2020, but I also needed to conserve capital in case the situation deteriorated.
As I mentioned, we are mostly bootstrapped and on a thin budget to facilitate growth, so there is nothing more critical to our survival than capital and cash flow management. We really needed to execute a large order at the beginning of 2020 but tying up that much capital on inventory purchases that might never show up was dicey. I cut back the order to a third of what I wanted to order and half of what we needed. As the situation played out, my decision proved to be correct because even the small order I placed at the beginning of March that was supposed to be completed in 6-8 weeks didn’t arrive until October. And the last order that was placed in June, also targeting manufacturing completion of 6-8 weeks, will probably miss the holiday season and not land until after the New Year. Sacrificing growth is a difficult choice but living to fight another day is a blessing many others may not have.
How do you deal with stress and anxiety? How do you project yourself and ExtractCraft in the future?
Troy Ivan: I would love to blow some great CEO wisdom about stress and anxiety management, but the truth is I don’t have time for it. With keeping the business afloat, working 80-100 a week, and three young children, I just buckle up my old-school farm boy pants and work through it. In a perfect world, I would be making it to the gym in the morning, but until it’s a much safer environment, I will forgo that and just walk the world’s most demanding 90-pound poodle every morning for at least a little exercise.
For both now and into the future, ExtractCraft is the world’s first true crossover company bringing together cannabis (THC) and hemp (CBD/CBG) with the mainstream culinary, scenting, apothecary, and home remedy markets. Chefs, as well as cosmetic makers, are using our equipment with traditional ingredients but now also incorporating cannabis and hemp extractions into their creations and formulations. My crossover dream is to see people using our equipment in a world where cannabis is an ingredient that’s as unsurprising and accepted as lavender.
Who are your competitors? And how do you plan to stay in the game?
Troy Ivan: At the moment, we don’t really have any head to head competitors. For home processing of cannabis, there are three distinct types of processes: infusion, rosin pressing, and solvent extraction. Infusion is as easy as warming cannabis, typically decarbed cannabis, in a pot/slow cooker/instapot with some kind of cooking oil or butter for an hour at 180°F-250°F, stirring once in a while.
That’s all there is to it, but people still overcomplicate it and even go out and pay good money for “infusion machines” when they are completely unnecessary. A couple of companies have been remarkably successful at marketing to cannabis consumers that simply don’t know better. The price point is low, and it’s familiar, like cooking, so people are comfortable paying for it anyway.
Unfortunately, at the end of the day, all you can make with these “machines” are infusions, meaning relatively low potency medicated cooking oil of your choice. These devices are in the same arena, but at a much lower level on the crafting ladder, so they aren’t really competitors, but they provide us with a great benefit. Their wonderful marketing and low price-point attract people that would otherwise not be willing to get involved with processing cannabis themselves. Once they become comfortable working with cannabis and figure out the limitations inherent with infusion, they seek us out. The infusion machines are a very cheap introduction that we aren’t able to provide.
Rosin presses are super safe and have become hugely popular. I like rosin a lot, and some great concentrates are made this way, so it’s definitely a general competitor, but more importantly, it’s also complementary to our equipment. Rosin has two weaknesses; it picks up a lot of waxes and fats, and the process is quite inefficient. Rosin squishers can use ethanol and our equipment to winterize their beautiful concentrates. While they will no longer be ‘solventless,’ the perfectly safe food-grade alcohol we use will clean up their rosin and increase potency. The inefficiency in the rosin process leaves behind a great deal of oil, so the big payoff for rosin guys is that they can recover all the wasted cannabinoid content and goodies left behind in the already pressed chips, pucks, and bags.
Lastly, the only head to head home extraction equipment are alcohol distillers and rice cookers. These still work to make rudimentary low-quality, high temp RSO, but that’s all. ExtractCraft equipment works under vacuum at low temps to recover nearly all the ethanol for reuse and protects the delicate components in the extraction. Distillers and rice cookers are dangerous because they evaporate highly flammable ethanol vapor into the surrounding areas and are limited to decarbed RSO only.
Using ExtractCraft equipment, users can make THCA, THC, CBD, and CBDA products depending on preference and if they decarb or not. This means in addition to RSO. Our customers can also make stable concentrates like budder, crumble, wax, pull-n-snap, sugar, sauce, shatter, and such at low and controlled temps. We are very different than anything in the market and provide the most flexibility and control for home concentrate crafting while keeping it food-grade, simple, and safe.
To stay ahead of the game, we will continue to leverage our advantages. Pushing our ability to engineer at a very high-level in-house is what we count on to help us push innovation and stay ahead of the game. We have some pretty cool stuff in the works to complement the other two successful products we’ve designed, developed, and launched. If we can accomplish what we have so far on a generally bootstrapped budget, imagine what we will be able to do when we find financing with the right partner. We’ve been pushing hard, and we plan to push even harder, so we intend to continue to lead for a while.
Your final thoughts?
Troy Ivan: We’ve spoken a lot about the products, processes, and company, but what I’d like to point out is the real center of all this is people. People in need of help to maintain or regain health and improve their lifestyle. We aren’t a stoner centric, cannabis culture leading company. We’re more in the background with the general population of ordinary people medicating and using cannabis for health and healing, what I see as the coming new normal.
Working with, educating, supporting, and improving our customers’ lives before and after they purchase our equipment is where we really shine. ExtractCraft isn’t just the equipment. It’s also full of supporting resources and an amazing online community. Our user groups are often called the “best groups on Facebook.” We encourage beginner questions, and the entire community supports those learning and those with problems. The groups are highly engaged and positive, while anyone making posts or comments that aren’t helpful, supportive, and positive are removed immediately. The groups are very special, and we work hard to keep them that way because behind every purchase on the sales report is a person, and often it’s a person dealing with a difficult affliction. We value the people and appreciate them putting their trust in us, so we want to give back with as much support as possible. We are in this fight for putting healing in the hands of those that need it most, and we stand beside them.
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