Claims by manufacturers

September 7, 2017

Andy is on a panel of experts, answering questions from the community.

Question:

Every day I get emails from companies making extraordinary claims (huge yields, short runs, amazing results, best in the business). There’s no Better Business Bureau in this industry to fact check these claims, and weed out the fraudsters. How do you suggest we whittle down to reputable companies before making a decision to buy? It’s a big investment and I want to be sure I’m getting value for money.

Answer:

Thanks for the question – an unfortunate reality in the cannabis industry today. I have said for a long time that the cannabis industry is an entrepreneur’s dream. Explosive growth combined with just enough risk to keep the big players out has allowed many Ma & Pop companies to flourish. It has also made for a very competitive space with new entrants almost daily. Choosing a vendor can be tough in this environment, but there are definitely some criteria to look for to help choose the best equipment vendor.

Despite the number of new entrants in the cannabis space, the same rules for purchasing equipment in more established industries apply – i.e. oil & gas, aerospace, automotive, etc. Look for the following criteria, and don’t just take the vendor’s word. Make them back up their claims with data! One of my engineering professors in college always said “In God we trust…all others bring data!”.

A short list of items to help vet an equipment vendor in the cannabis industry:

  • Look for experience, both in the cannabis industry and out. Look for an equipment supplier that started outside of the cannabis industry and then entered with an already proven product. The cannabis industry is new, but most of the equipment that is being used is not! Every new company has to spend money and time developing their product. Don’t let them use your money as an interest free loan for their R&D project unless you are getting something in return for it (discounted price, future tech, etc.)
  • Ask for certifications, and make sure they are real. Is the equipment UL/ETS certified? Does the equipment comply with manufacturing and building codes like ASME or NFPA?  Do your homework and follow up on the claim. Most equipment certifications will have a listing on the corresponding site, like ASME.orgUL.com. There are a couple of industry specific certifications as well, such as Engineering Peer Reviews.
  • A long warranty is a good thing. Carrying the liability of a multi-year warranty over hundreds of pieces of equipment can be a major balance sheet burden to an equipment manufacturer. Only a well-established (and well financed) company can carry such a burden, which means stability for their customers.
  • How many systems have you sold? This question should be asked of every equipment vendor. While the cannabis industry is new, it isn’t that new. Established vendors should have hundreds of customers, even better several hundred.
  • Outrageous claims? RUN! Generic claims with no data to support them are a major red flag. A quick Google search on “CO2 extractor” provides some wonderful examples of just a few of the outrageous claims to sort through. They can’t all be the fastest, but it doesn’t seem to stop them from claiming it!
    • “The fastest and highest-yielding extraction and distillation systems on earth”
    • “The highest flowing CO2 extraction system on the market today”
    • “Our machine is the industry’s fastest, producing extracts at record speed”
    • “The only SFE system on the market to incorporate three collection vessels with independent pressure control”
    • “Highest Yield On Market”
    • “Our equipment is the fastest and most energy effiecient CO2 extraction equipment available anywhere”