Matt Terrill, Co-Founder & CEO of Operations, Innovet Pet Products
Matthew Terrill is the Co-Founder and CEO of Operations at Innovet Pet Products. He is an avid Mechanical Engineer/Inventor and obtained his Bachelor's Degree from the University of California, Santa Barbara. Matthew has over 15 years of experience in formulating and patenting products specifically for pets and also has over 3 years of hands on experience in the lab formulation of CBD products. He has implemented his extensive experience and prodigious passion for dogs in order to develop products that will effectively enhance the well-being and health of all animals.
https://www.innovetpet.com
https://www.facebook.com/InnovetPet/
EPISODE TRANSCRIPT
[00:00:01] You're listening to Thinking Outside the Bud where we speak with entrepreneurs investors thought leaders researchers advocates and policymakers who are finding new and exciting ways for cannabis to positively impact business society and culture. And now here is your host Business Coach Bruce Eckfeldt.
[00:00:30] Are you a CEO looking to scale your company faster and easier. Checkout Thrive Roundtable thrive combines a moderated peer group mastermind expert one on one coaching access to proven growth tools and a 24/7 support community created by Inc. Award winning CEO and certified scaling up business coach Bruce Eckfeldt. Thrive will help you grow your business more quickly and with less drama. For details on the program visit Eckfeldt.com/thrive. That's E C K F E L D T.com/thrive
[00:01:07] Welcome everyone this is Thinking Outside the Bud , I’m Bruce Eckfeldt. I'm your host. And our guest today is Matt Terrill and he is co-founder and CEO of operations of Innovet Pet Products. And we're gonna learn a little bit more about him. This is fun. I always love talking about pet based applications, pet based companies in the cannabis space, a fascinating area. It's a fashion area that has huge possibilities. So I'm excited for this conversation. Matt, welcome to the program. Hi, Bruce. Thanks for having me. So let's talk a little bit about background. I would love to hear how people kind of got into space, what they were doing professionally before they started their cannabis business. Give me a little bit of background. What were you kind of what what's your professional background and how did cannabis come up and how did you start into that pet products?
[00:01:48] Well, actually, our story is as it's very unique. It's I've never heard any other any other company that started out quite like us. We we started in 2005 making unique pet products that solve problems for my pets that were unsolvable through conventional means.
[00:02:08] Ok, so give us an example. Yes. So what are some examples of things that you're solving?
[00:02:11] Yeah. Specifically what? In 2005 we it was we got started because my Labrador had a severe ear infection that was going to result in in a major surgery of major risky surgery or I had to find a solution to get medicine and clean or deep into his ear.
[00:02:26] So I came up with I got our and a tool that resulted in our first patent and it gets medicine and clean or deep into a dog's ear while they're moving and fighting. So it kind of does the job of a real expensive veterinarian, you know, a veterinarian cleaning under anesthesia. You know, it's comparable to that. We can't directly say that, you know, that's out of place.
[00:02:48] But in reality, that's my ex my own personal experience. That's that that's how effective it was. Yeah.
[00:02:53] So, you know, we got we were building products like that really unique niche pet products. We know we made my Labrador went blind, so we invented tracer scented markers for blind dogs. It was a fantastic niche. But, you know, and I couldn't work weren't at.
[00:03:06] We weren't gonna build the we weren't going to build a large business based off of a niche that small. Yeah. Yeah, it wasn't. We were business like that for 10 years before we before we got into CBD.
[00:03:17] Interesting. How did CBD come about? Was there something that just kind of came across your radar as potential solution or was there a bigger picture?
[00:03:24] Yeah. Well, actually in 2014, 2015, we had we had three or four different companies come in to us and asking one to partner with us. And they wanted us to do the to do CBD for pets because they said that there was such there was such bad CBD products for pets time. A lot of a lot of shady stuff coming from China.
[00:03:44] So they wanted to they wanted to partner with a reputable pet product company like ours. And I got the impression at the time that they really just wanted us to take the risk of growing cannabis, essentially.
[00:03:57] And yeah.
[00:03:58] And they said so many positive things about it. And everything that I read was so overwhelmingly positive that honestly, it seemed like snake oil. So I really just I truly dismissed the idea. And it wasn't until my business partners, Don, got gravely ill and tried that conventional conventional therapies and it failed.
[00:04:17] There was no other. There was no other option for his dog. So you ordered CBD? Unfortunately, the company that you ordered it from. They were turned out to be one of the less reputable ones. And they didn't ship the order. They waited. They waited a long time to ship the order. And it actually arrived that CBD arrived after his dog passed away. Oh, tragic. And my. Yeah, it was it was horrible. My dog was my dog. That was the founder that, you know, that the company was founded off of in 2005 to cure his ear problems. My dog was 16 at the time and he was about you was about to pass. And I had this pollo CBD next to me. And I was going to you know, I knew he was going to he was going to go really soon. So I wanted to know that I had tried everything.
[00:05:01] So that was the literally the only reason I gave him CBD was because I wanted to have the peace of mind, that I had tried everything and I didn't expect anything to happen. And I gave him the CBD and and walked. It was in the front of our remember, our warehouse area. I gave in the CBD and I walked to the back and I'm doing something in the back for a warehouse. In about 15 minutes later, I hear this huge commotion and it's my dog. You stood up on his own for the first time in a month, and he was just as appetite was back.
[00:05:28] He was a. It was it was basically all the things that people told me that somebody could do. And it was just a big giant life lesson right into my face. Undeniable. It was undeniable. It was it. It helped him so much. This dog was was happy for the first time in a long time. Truly happy. And it gave me it gave me another it gave me five real true quality weeks with him to say goodbye. And that was priceless. And that was that was it. After that, I look back on it. And that was that was that was life. That was the universe telling me. Yeah, we you know, my goal needs to be to provide quality CBD to pets. And that's I've just made that my mission.
[00:06:11] And so it was at a turning point in terms of really pivoting the company into the space or was this a an addition to all the other things you were doing? I mean, give me a sense of strategically how CBD played a role.
[00:06:22] You know, honestly, we just we knew it was the right thing to do.
[00:06:25] We saw how much help our own pets. It was just undeniable. We saw how difficult it was to get it even for ourselves and how there is so much disinformation out there. And we thought this is really you know, this is perfect for us. This is perfect for us to provide a quality product and transparency about it and cut through all the, you know, all the disinformation out there and really, truly help people. Yes. So we were gonna go for what we. We just we felt it was the right thing to do. We felt there was a good chance of of opportunity. And so we didn't you know, we just went forward with it alongside our other products. We just you know, it was just a freight train moving forward. We just added some more some more cargo to it now.
[00:07:05] So you had this experience. You realize the potential of CBD products for pets.
[00:07:10] What was the next step? I mean, was this start bringing some plants in the back of the office? What was the like how did you actually start working on developing CBD products? And what parts of the production process were you doing internally? Where did you look for partners? Give us a sense of how you executed on them on the business plan.
[00:07:26] That was actually funny. There was one to one aspect of the business. There were there was no plan. We just went we just went forward with things as fast as we possibly could. Yeah, we you know, we thought at first that we were going to have to grow the cannabis in India and get that get the special seeds with the strains that are high in CBD and and all that. We bought out all the equipment and we were about to actually start growing when we when we found a manufacturer in Colorado that was was already growing and refining that CBD and how to add would deal with us at a small quantity that was actually the biggest hurdle was just the barriers to entry into the market.
[00:08:05] The minimum orders in that. Yeah. Yeah. Once a month, we spotted a company that would had a minimum order in a size that we could that we could handle. And their quality test came back confirming what they said the CBD was. At that point. We knew we went forward that way on a small scale. And I think we I think we started with just like 10 bottles and we made sure. Yeah, I think we may. I think we made 10 test bottles. Yeah. And and just get scale and just scaling it up from there.
[00:08:32] I mean, I guess give us a sense of how you kind of educated yourself or how did you get familiar with CBD and cannabis. I mean it's a it's a fairly complicated and somewhat unstructured and, you know, world full of science and fiction.
[00:08:47] What was your. Did you kind of wrap your head around it?
[00:08:49] Yeah. Luckily, I've got my business partner who is a chemist from UCSB. And so he between the two of us, we were able to handle the research load. I don't think I would have been able to handle it myself, if that's for sure. Basically, I think the biggest hurdles really were perceived legal hurdles because everything is a gray area. So if this if we stopped and looked at all the different all the different legal risks, we would never would have got anywhere.
[00:09:17] We just we just you know, we saw it. We saw a legitimate path to go forward with it and we went forward with it. And really, supply chain was it was the biggest the biggest barrier for us. I mean, I remember at one point we fought to get organic hemp oil. We were so we were so we couldn't find any in any kind of a sizeable quantity. So we actually drove. We drove all through Southern California, too. I think with Whole Foods and a couple other a couple other stores buying up all of their 2 and 4 ounce bottles of organic hemp oil.
[00:09:50] So we had like hundreds. You know, it's like a day of driving around and we had hundreds of bottles pouring them all out into a big a big pot to mix everything. So as you know, a lot of a lot of crazy. Yeah. Yeah. We we went above and beyond just to keep going.
[00:10:08] Well, until, you know, talk to us a little bit about the evolution of the operations side.
[00:10:11] So, you know, once you formulate a product, how what's the process for actually putting in place, you know, the supply chain and the actually fabrication or the formulation process and what parts of it, I guess have you focused on where I've been, the big challenges? How has growth and expansion of the business, you know, tested that part of the.
[00:10:29] Operations well, every aspect of it of this business is is challenging and constantly changing.
[00:10:36] So the one the one thing that I've found that really helps us and secures us long term, gives me peace of mind, is making us as adaptable as possible. So that I mean, we have we have a mentality that at any given moment, the laws will completely change. And whether it's labeling or shipping or that. So we we we manufacture very lean and mean. We make our own labels in-house so we can change. We can change any kind of a any kind of a detail about 48 hours notice we'll have. We can have a we can have a change to a label or a product done and actually, you know, introduced into the into the manufacturing process in making into completed units that are shipping to customers from conception to actual shipping to customers in 48 hours. Yeah, that's right. Yeah. Anything short of that will always lead to problems, whether it's legal problems or logistical supply chain problems. If we're not fully adaptable, then there's always gonna be problems.
[00:11:36] Yeah, I like it. I've my background was an agile software development and and, you know, borrowing a lot of the lean terms and lean ideas. And we always had the phrase of, you know, that you want to be able to turn on a dime for a dime, make it very hard to be able to pivot quickly. And certainly in these kind of markets where, you know, whether it's regulatory changes, whether it's market changes, whether it's new science that comes out and, you know, new product opportunities, you know, being able to quickly pivot the operations, but new product into the market, you know, change you know, change labels, you know, just in time kind of manufacturing can really help. I've seen I mean, I've talked to a lot of companies who have had just nightmare stories of producing three months of supply of some product to only find out that the label, you know, the labeling requirements are changing. And so they've got to either relabel or worse, they've got a manufacturer of these products because it's no longer usable in the market because of some change. Exactly. So I guess, what have you done? I mean, how did you how did you implement it? How did you get that kind of agile with your production process? What did you have to do or or what did you have to kind of set up to be able to do that? Well.
[00:12:34] Well, to get the manufacturing process as agile and adaptable as possible, we really had to do everything imaginable in-house. That includes buying the manufacturing equipment for bottling, printing, labeling, applying the bottles, formulating all of that. And, you know, anyone with a large budget can can purchase and, you know, can stock up on all those things. But we we never took on investors. We always reinvested the sales into into infrastructure, especially when CB was taking off. We'd poured everything back into the business. And so, you know, we were very careful about what equipment we bought because our budget was so tight and that was one of the biggest, biggest hurdles. But what was really bigger than than just finding the equipment was was finding people to maintain it. There's a huge gap in men in manufacturing in America. And it's gone on long enough that there's not really any people and there's not very many people around anymore that know how to fix the equipment that's used for the manufacturing.
[00:13:38] So I wound up I wound up having to want to do it all myself. I want to get a grease monkey wrench. And, yes, I'm a mechanical engineer so I can do it, but. But yeah, it was. That was tough.
[00:13:52] That was I it was it was something where I know there's someone out there that knows that this experience with this.
[00:13:57] But, you know, with with repair, with industrial equipment repair. But God, I could not find anyone for the longest time.
[00:14:03] Yeah. Well, especially because I think, you know, most businesses now say a lot, a lot of businesses when they're really kind of looking at growth and looking at scaling and, you know, how do we build up this company? You know, it generally kind of falls on the sales and marketing side is how do we create enough demand or how do we increase our demand? I think in this case and in many kind of cannabis companies, you know, it's kind of the flip problem is that there's so much demand. It's really a function of how do I create an operation that's going to meet my demand now, but also in the future, like create a sustainable, you know, sustainable process, make what's what. How did you balance this kind of short term versus longer term decisions around? Well, you know, I could I could go with this manufacturing process, you know, quickly, and I would double my production now. But, you know, I'm going to camp out fairly quickly versus investing in something more sophisticated that may take longer to put in place. But, you know, it could be 10 times the production in the coming months or years. I'd like it. Did you have was that a big kind of factor in and looking at operation strategy?
[00:14:57] No, because our budget dictated only one option and that was do what whatever is the most whatever is the most affordable with with it and make it just make it work. And that resulted in me having to do having to do a lot of just a lot, an immense amount.
[00:15:15] I mean, I was essentially living in our office most weeks. I said, yeah, I'm really grateful that I've got a team now that can that I've been able to teach these things. I actually never did find anyone that could could repair the kind of. Meant that we have I had to train our own our own team, our in-house how to do it. Yeah, yeah. It was all these things were just basically, here's the cards you're dealt. Make the best of it. I wish I could have planned more, but there was just didn't happen that way. Things move too fast.
[00:15:44] Well, it just gets it. I mean, the constraints, it sounds like the constraints forest a certain amount of innovation and self-sufficiency, which I don't know. I don't if you've got into the stories of Toyota and the whole development of Toyota production system and lean process. But it really was one of the interesting factors of why, how and why they developed that, you know, just in time processing or just in time manufacturing was because they didn't have the capital. They didn't, you know, as post-World War to Japan. They didn't have access to capital. They couldn't do they couldn't invest in huge production facilities and and investing in huge amounts of inventory. And it forced them to be this just in time. But that inadvertently gave them the benefit of being able to respond to markets very quickly, get product to the market quickly, and be very capital efficient company. And it sounds like kind of a similar learning, you know. Yeah. Sixty years later. And then they got office space. Yeah.
[00:16:32] In a lot of the equipment and in just the the logistics necessary to start a CBD business.
[00:16:40] It's all. It's all. And it was all new territory. There is you know, there's a lot of analogy with the beer and in brewing industry. But you can't and it's not as simple as buying the equipment, it's the equipment for cannabis. It requires so much specialization. And so it's only it's only in the past couple of years that affordable equipment that specialized for handling cannabis has really come out.
[00:17:03] I mean, just one of the things people don't understand is just how sticky the substances are, the refined substances after extraction, just handling it is a massive logistical challenge.
[00:17:14] It just as it gets everywhere possible. Yeah. Yeah. You can use it. You can use one knife to scrape it off of another knife.
[00:17:20] And if you have another knife and not being able to handle it without having a tremendous amount of material lost along the way or wasted along the way. That was really the really the challenge.
[00:17:33] Fascinating. Interesting. So tell us a little bit about, you know, as the company has grown, as the demand for product has increased, as you ramped up production capabilities. What have been some of the bigger challenges within the business in this growth period?
[00:17:46] It would be on the marketing side. It would be keeping up with all the different ad policies and tactics. Yeah, it is. Yeah. That is a known as a daily team collaborative effort. That is I don't see any I don't see any any end for that in the near future. And there's always people getting edgy, trying to find some edge, some new new tactic.
[00:18:10] And this is just around the issues of which platforms will you market, what kind of products in Europe. A lot of platforms are still prohibiting or kicking off cannabis related products from advertising. That's the challenge that. Yeah. Yeah. Yeah.
[00:18:23] Like you'll have for a lot of a lot of platforms and an advertising for a lot of platforms for the logistical aspects of the business and platforms for the marketing aspects of it. We'll have one side, one side of that platform like that in our marketing side, pitching to us, trying to get our business while we'll have the other side of their business, their legal department saying that they don't, that they can't. We get the business is schizophrenic and schizophrenic as its advertising is going out live with with, you know, the companies that host our website there with that for logistics and shipping. Facebook advertising, Google ads, all that. It's all. Yeah, I expect their policy to change everyday.
[00:19:09] Yeah, well, it goes back to your earlier point of kind of the best strategy right now is being able to change quickly because that's that's the strategic advantage.
[00:19:16] Yeah. That and then and then being able to balance the the new just the way that people were. Now we really have to have a balance of about 50, 50 actual physical people working in our warehouse and virtual employees to freelance employees.
[00:19:35] It's across the board. We have to we have to have a blend of both.
[00:19:40] Got it. I'm curious because there's been changes to the legislation. The last while the last couple of years has been changing, stood up to the home side of the farm bill, the 2013 farm bill.
[00:19:49] It really impacted how you operate and, you know, either operations or marketing.
[00:19:53] Actually, it no, it hasn't really changed anything.
[00:19:57] In reality, all it's done is give me peace of mind that I don't mean that there's not going to be some confusion with the DEA or, you know, some some big crazy exaggerated thing, you know. When Jeff session when when Jeff Sessions was the attorney general, I had this paranoid nightmare that he swooped in and broken through that, you know, through a window with a DEA SWAT team slept with one eye open.
[00:20:22] Yeah. Oh, yeah. All that's done is it's always been a gray area.
[00:20:27] I knew that I. Just knew that it was. I knew that we were doing the right thing morally and I knew that there was a legal good, plausible legal argument for what we're doing. I also knew that there were lots of legal legal arguments against it. But as long as I felt there was a good legal argument and I were on solid moral ground, I knew it was the right way to go to talk to me about where the company is at this point.
[00:20:51] What are the future plans like?
[00:20:52] What are your what are your goals, ambitions? What kind of strategies going forward?
[00:20:57] Well, at this point, we we really want to just continue our expansion and do so without compromising what got us here. So we we are we're branching into new branching into more more retail stores were changing our and we're we're changing the advertising routes that we're going just basically trying to go through all the the marketing avenues that we have that we in the past didn't focus on. We started by focusing 100 percent on the end user direct through e-commerce because we needed to get feedback we really needed back on.
[00:21:38] There was no there was no evidence, there was no studies on what worked and what dosage and that. So it was really a data. Do you want to think you can think about it in terms of the first three years being a data mining operation? Yeah, we just needed to gather data because it just did not exist anywhere else.
[00:21:56] So now now we've we've collected that data, analyzed it and applied it to the products, to refine the products, to refine how we explain the products and, you know, things as specific as the dosing guides, the dosage a matter.
[00:22:10] It's all it's you know, it's all it's all it's all calibrated to to combine user feedback and the grow in the evolving studies that evolve evolving clinical studies every every few months and use a new clinical study will come out and support and a new higher dosage for CBD.
[00:22:30] Working on some condition.
[00:22:31] So we know we constantly monitor that and and apply that into our instructions, our dosing guides.
[00:22:38] And really this this entire time we've we've done everything human quality.
[00:22:43] So it kind of it kind of made it obvious to us that we we need to also expand into the human side of it, because we're we're already here. We're already making human quality CBD for pets.
[00:22:55] Missile ethical is I'll sell to humans to and from kind of a market regulatory legal kind of environment as if I if I give you a magic wand and you could change anything about the way things work right now, anything that is particularly problematic or that you would love to see changed kind of more structurally in the industry right now.
[00:23:12] Well, customs, the U.S. Customs at the last place where I feel like where it's is just know where everything's open to some different persons interpretation. It's yeah, it's it's completely hit or miss, depending on which of the you know, there's hundreds of different ports of entry and the policies seem to be different in each of them. And that's so, you know, without customs brokers, I don't know how we would be able to navigate these waters.
[00:23:40] And I mean, most of our lawyers don't even know where to go. We with some of the customs challenges.
[00:23:45] And that's just because of the issue that you're transporting this cannabis plant derived product or what's the what's the rub that you're finding with customs is what it is?
[00:23:55] Yeah, it's what the limits are, what the rules are.
[00:23:59] And especially with with THC amounts. Well, you know, all of our products have a trace amount of well, not all of our products.
[00:24:07] So using a full premise run, you've got a broad spectrum. Yeah, yeah, yeah.
[00:24:11] Yeah. So there's there's at least some tea, there's a trace amount of THC in some of our products. Yeah. And the question of how trace does it need to be.
[00:24:20] Does it need to be, you know, a point 0 0 1 or point 1 or point three percent if everyone has a different, different opinion on that.
[00:24:29] And do you think the international market or the international side to this market is going to be a lot of growth? Is that. I mean, yes. What's your take on? Yeah, well, that's going to develop.
[00:24:37] In fact, you know what? I think it's a situation where the the industry, as it is, wants to move forward. And it's just the only thing holding it back is that that that regulatory hurdle is more than a regulatory hurdle.
[00:24:52] It's it's it's like it's a regulatory obstacle course.
[00:24:58] And there's and there's it kind of reminds me of like stories of businesses having to deal with them up. It's a different it gets a day, depending on who you talk to you, it's a different amount. You know, they say, A, you could pay us, you know, you could pay us, you know, this small amount now, but it might cost a lot more in the future.
[00:25:17] You could pay us a little bit more and you'll be cool. But I know a guy that knows a guy. Yeah. You know, you're you're amazed that this is actually coming out of a out of a hat representing. Of our government, do you think it's that you think it's a like a thug or someone trying to it?
[00:25:36] What do you think? I just give a. So you mentioned you're getting into the the human side or the products for people, not just pets. Or what do you think the size of this market is? I mean, do you think that, you know, the pet side is, you know, some of some percentage or what? Give us the size of the markets from from your point of view. Where are these markets are going?
[00:25:56] Honestly, I think it's one of the first things in human history were the where the market size is. It's as big as you can imagine. It could go it could go anywhere. The CBD has the potential to replace billions of dollars of of current current commerce and the pharmaceutical drug industry. So that that right there is you know, it's also you know, it's it's a it's a replacement for some pharmaceuticals. And it's it's something that technically people could grow in their backyard. Yeah. So. Yeah. So why every single human, every mammal has a has an indoor cannabinoid system that benefits from having CBD. So the potential is unlimited.
[00:26:42] And also it's one of the only times in history where we're in industry, in a market and in demand was created and established for decades and held back by by governments. And then in during that having having capital and having capital, big capital in big banks and not holding money in reserves to invest into the industry.
[00:27:05] And so I think we're just on the leading edge of seeing that big banks and big money start coming in to this industry. And when that happens, that's a whole nother multiplier.
[00:27:18] Yeah, yeah. It's going to unleash the capital.
[00:27:20] I would really be surprised if CBD and in cannabis related products weren't the single biggest industry in over the next in the next few decades. Not a century.
[00:27:32] Well, you heard it here first. We'll check in with you and see how that plays out. Matt, if people were to find out more about you. What about find out more information about any of that? What's the best place to get that information?
[00:27:42] The best place is going to be our Facebook, our Facebook page. Innovate pet products on Facebook or our Web site. You know, vet pet dot.com. And yes, that's everything we are. Is there?
[00:27:54] Perfect. I'll make sure that both of those links are in the shutouts so people can click through and get those. Thank you so much for taking the time today. Great conversation. I love this facet of the industry. I think it's one that not many people cover. So I appreciate era getting into with me and giving our audience some really good insights.
[00:28:08] Well, thank you for shedding light on these subjects. It's definitely needs needs a lot, a lot of attention.
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