Growbuds CEO Andrew McMahon and COO Samuel Belanger join Midas Letter to introduce the company. Founded in 2018, Growbuds is a media house production and E-commerce company focused on the homegrown cannabis market. It aims to motivate and encourage cannabis enthusiasts to pursue the dream of cultivating their own crop as an alternative to their current means of consumption. Andrew and Samuel discuss their one-kit-fits-all solution, the Canadian market for homegrown cannabis, and James shares his experience using their grow kits. Growbuds has operations in Canada and the USA, with a network of over 4,000 growers and 7+ figure revenue in its first year.
James West: I’m joined by Andrew McMahon and Samuel Belanger, who are President and CEO and Vice-President and COO, respectively. Gentlemen, welcome.
Andrew McMahon: Thanks for having us.
Sam Belanger: Thanks for having us.
James West: Your company is Growbuds, and you provide home-growing equipment for anybody in Canada who wants to grow their own cannabis, correct?
Andrew McMahon: Correct, exactly.
James West: And, full disclosure, I am a client of Growbuds, and this is why the guys are here, is because I’m very pleased with the gear that I’ve been given. It has produced a lot of the comedy that has gone on here, indirectly, because sometimes we smoke it before we start the show.
But, okay, so, you guys – I mean, in Canada you can grow four plants. And so you have a, in your website, I’ve noticed that you’ve got very specific, in fact, the reason I came to you guys in the first place was because I first started with a company that was associated with Aurora Cannabis. And I said, I want my four pot-system, and because it’s legal, blah, blah, blah. And the guy immediately starts trying to sell me a 10-pot system. And I’m like, why are you trying to sell me a 10-pot system? I live in Canada, I have this show. It’s not like I can bend the rules at all; I have, like, a big microscope up my ass all the time. So I want four pots.
No, he wants to sell me this…I’m like, okay, you’ve lost my business. And that’s how I came across you guys. So how many, like, what kind of volume are you guys doing now? What portion of Canada is growing weed at home?
Andrew McMahon: Well, we first started the business, the main idea was to, so, we started by reading the report from the Deloitte. So we noticed that 20 percent of cannabis consumers in Canada would actually grow their own. Like –
James West: Only 20 percent?
Andrew McMahon: Twenty percent of the daily smokers in Canada.
Sam Belanger: Considered growing their own cannabis.
Andrew McMahon: So that’s why we got the idea to actually start this way, because we didn’t want to enter a segment of the market where there was a lot of competition. So that’s why we chose home growing, and…
James West: Okay. And how did you, how do you determine what equipment to recommend? I mean, there’s lots of things out there, in particular, the enclosed single unit where you’re supposed to just throw in your seeds and the rig does the rest.
Andrew McMahon: Grow boxes. And that’s where we wanted to, you know, step away a bit from that in the beginning, because we already saw, you know, a lot of companies trying to sell that plug and play option. However, you know, cultivating cannabis is a bit more complicated than just, you know plugging a box in. you have a lot of variables you want to take into account when you start doing this.
So what we basically did is, we partnered up with experts in the matter, you know, and we started designing these kits that, like the one you bought, and having, you know, these different options that we could offer to clients. So they’re directly on the website, so you can choose from, you know, low-end lights from high-end lights, and, you know, low-end tents, and all the, you know, major variables. You can just choose from there what you want to go with, depending on your budget, depending on what you’re looking for, because there are, you know, so many things.
So we wanted to kind of simplify as much as we could, but at the same time, we didn’t want to, you know, simplify it too much and just giving people a one-kit-fits-all solution. We wanted to give people the option to…
James West: Right. Growing cannabis, I mean, for somebody who’s never done it – and this is the main thing I want people to understand – is that, while it is a little bit more complicated than buying a single standalone system and expecting to get a great result, you can throw seeds in a flower pot and water it and you’ll get cannabis. But if you want those big, fat, terpene and THC-rich colas, then you have to take a little bit more care, and you have to take some time to understand the plant and what it wants.
So, but having said all that, it’s not that hard. Like, anybody can do it.
Sam Belanger: Absolutely.
James West: And, what is the cost – I haven’t warmed you up for this question, so if you don’t know the answer off the top of your head – what does it cost per gram of dried flower to grow cannabis at home, assuming, say, just any White Widow or, like, what kind of – what is the cost per gram?
Andrew McMahon: So, the yield will always depend, like Sam said, it will depend on the light that you choose, the growing environment, there’s a lot of variables to take into consideration. So let’s take the cost, the initial cost of the set-up light, for example. For a four-plant system, it starts at, like, $1,200. With the set up you can grow for years and stuff.
So the average yield, like I said, it always depends, but for the average yield for four plants –
Sam Belanger: We’ve actually made an experiment just, you know, because we – a lot of people are actually asking this question, you know, and the answer is always different. It will depend on the strain you’re growing, it will depend on the experience you have as a grower, it will depend on many different variables. But we did kind of an experiment to have a rule of thumb to give people, and we grew four Blue Dream plants in a $2,400 set up. So we had, like a great LED, we had a great medium, great nutrients, all that stuff.
And we were able to yield 750 grams in that tent.
James West: In one crop?
Andrew McMahon: In one crop.
James West: So Blue Dream is like a 10-week flower?
Sam Belanger: Somewhere around there.
James West: Eight week veg…
Andrew McMahon: We actually ended up, it took four months in total to get to the final yield, but after four months, we had, like, 750 grams, and it cost, you know, $2,400. So already, there, it’s $3 and something.
Sam Belanger: For the grow, but then you still have the system.
James West: Right. So if you were to amortize the cost of the tent over 10 years, and it’s $204 per year, 750 grams then becomes, like, one-tenth of that. $0.30 per.
Andrew McMahon: Exactly.
James West: So that’s the bottom line. You can grow your own at home, and it’s organic, if you – well, this I the other thing I want to talk about.
Andrew McMahon: It’s actually a choice.
James West: So I first ordered, like, I’m like, no, I’m going organic. And it had been years since I’d grown in a hydroponic system, and once I started to get, you know, like rotting nutrient solution and gone, like, oh, yeah, that’s right. That’s why you don’t grow organically, because it grows algae and other pathogens way too quickly. It’s too organic.
So, but so then, by switching to the mineral-based nutrient system, you’re not actually sacrificing, you’re not using chemicals, per se; you’re just using salts derived from minerals that don’t qualify as organic according to the rules, but it’s still more or less organic.
Andrew McMahon: So yeah, you know, like some people, they want to go the organic way, like, 100 percent. And they’re doing great. Some people are just, you know, they’ve developed their skills accordingly, and they have great results with this. But like you said, it can get a bit complicated, sometimes, dealing with all these organic factors.
So yeah, mineral-based is not necessarily chemical. You know, chemical is really more going to be when you’re using pesticides, for example, and stuff like that, which is not necessary if you’re keeping your environment clean and you don’ have any pest issues and stuff like that. So yeah, I mean, it’s really clean cannabis, that’s for sure.
James West: So the – if you wanted to grow pure organic, you can get the pure organic liquid nutrients, but what do you have to do? Like, what are the extra, what’s the extra workload and pain in the ass that has to happen to grow organic?
Andrew McMahon: It will depend. I mean, if you’re growing in a tent, which is really like a sealed environment, and you’re taking really good care of, you know, keeping it really clean, and you don’t have any contamination coming in to this environment, you can grow organically using a good soil and a good, like, liquid organic nutrients, and you won’t have a lot of problems. You know, some people do it, and we’ve actually done it. With the experiment that we did, we actually wanted to compare, you know, these two different mediums, so we went with mineral nutrients on two pots, and then on the other two, we went with just organic nutrients and an organic soil, and we didn’t have any issues, you know.
So if you do it right, it can be hassle-free in a certain way.
James West: Right. So, but you couldn’t use the auto-pot system with organic nutrients, could you? Because I found that, as soon as you’ve got still water, that’s when you start to get problems.
Andrew McMahon: They will probably say Yes, you know, and I don’t want to –
Sam Belanger: There are ways around. The thing with the auto-pot system is that the tubbing – like, the –
Andrew McMahon: Organic nutrients tend to be, like, more concentrated –
Sam Belanger: The pipe is really small, so they tend to clog the system. And it’s also like you said, you know, water is sitting, so it’s better from the bottom. But there are ways around it, that’s for sure. You know, just cutting the growing medium with a, for example, pearlite or clay pebbles or stuff like that, is going to allow more oxygen to access the roots, and so there’s ways around it.
James West: Sure. Okay, so what is the cheapest entire kit that you guys sell for four plants?
Andrew McMahon: For four plants…
Sam Belanger: The cheapest one would be, we actually have one kit from, the one from –
Andrew McMahon: No, but I think that the cheapest kit that we do, that we would sell, is around $1,200, and that’s having, you know, a Chinese light and a Chinese tent, and it is, you can do something good with this, of course.
James West: But it won’t last as long?
Andrew McMahon: It is quite surprising. I mean, like, Chinese lights, they have improved, and there’s like a three years warranty on them. So I mean, you can do, it’s gonna last, it’s going to be good, it’s just that you’re not going to have maybe the…
Sam Belanger: The material quality. The tents will be cheaper, they won’t support as much weight, like, for the lights and stuff. So, that’s where you…
James West: Right. So the top of the line, which I think I went for the top of the line, which was mostly built around your light choice. So the Spectrum King lights.
Andrew McMahon: That’s what I was about to say, yeah.
James West: Are, you know, they’re amazing. Like, I just love those lights, because when I used to grow a long time ago, you had 1,000 watts hal-lights with these ballasts and these systems that were like, you were in danger of getting electrocuted all the time.
Andrew McMahon: Yeah, yeah, yeah.
James West: And the ballasts are expensive to maintain and to change, and the bulbs are crazy.
Andrew McMahon: Yeah, you had to change the bulbs…a lot of people, you know, are moving away from this. There are still a lot of people who have great results doing that, and they’re used to it, so it’s great, you know, some people. And we do offer that option as well, right. But LED’s definitely the new thing, and especially like the LED you went with, so, like, white light full spectrum LED, and that is what I was about to say. It is going to be the light that is going to change most of the – I mean, all of the other variables are going to change the results, but the light is going to be the one who’s going to change, you know, especially in terms of price.
James West: Sure. So your website is growbuds.com?
Sam Belanger: No, it’s wegrowbuds.ca
James West: WeGrowBuds.ca. Okay, so we’ll leave it there for now, gentlemen. Thanks very much for joining me today.
Andrew McMahon: It’s a pleasure.
Sam Belanger: Thanks for having us.
Midas Letter is provided as a source of information only, and is in no way to be construed as investment advice. James West, the author and publisher of the Midas Letter, is not authorized to provide investor advice, and provides this information only to readers who are interested in knowing what he is investing in and how he reaches such decisions.
Investing in emerging public companies involves a high degree of risk and investors in such companies could lose all their money. Always consult a duly accredited investment professional in your jurisdiction prior to making any investment decision.
Midas Letter occasionally accepts fees for advertising and sponsorship from public companies featured on this site. James West and/or Midas Letter may also receive compensation from companies affiliated with companies featured on this site. James West and/or Midas Letter also invests in companies on this site and so readers should view all information on this site as biased.