Interview with Ebbu CEO Dooma Wendschuh by 420 Investor (Public Version)

I spoke with Dooma Wendschuh last week, and he is a member here at 420 Investor (through our complimentary Corporate Access program). I asked if "ebbu" has any signficance, and it doesn't. The company is taking a very scientific approach to product development, with a goal of standardization, which is very absent from the rapidly growing edibles category. The following interview with Dooma was conducted by an associate, Elias Simpson:

Tell us about your background and how Ebbu got started. You were first involved in the video gaming business?

Yes, I started the company Secret Agent. We were basically IP generation, creating some of the bigger video game franchises. I built up Secret Agent and had a great experience doing it, but it got a little stressful at points. I remember six months ago I was pulling 18 hour days working on Batman “Arkham Origins” and losing my mind. I needed something to distract myself, and I said maybe I should make an investment in the cannabis industry--that's what everyone is doing right now.

I started looking into it 15 minutes here, 15 minutes there. I would just do some research on the Internet. Every possible investment opportunity I found would either be a grow operation or a dispensary. It didn't add up to me. I think that in the future cannabis will be a commodity, just like corn or potatoes, and I just couldn't imagine that there would be a long-term benefit to those opportunities.

I started looking at the different brands in the industry and saw that there were some brands out there, but there was nobody who was able to effectively brand what I thought was the most important component of cannabis. There were a lot of people branding the form factor: the pens and different delivery mechanisms. There were also a lot of people who were making the sweeteners, the sugar coatings and the candies—which is fantastic—but if you're using cannabis, you're not typically using it for the way that it looks in your hand when you're holding the pen. You're not using it because of the taste or the sugar additives. You're using it because of how it makes you feel. I just couldn't imagine that no one was able to brand that psychoactive response.

I came out to Colorado on a visit with Jon Cooper, he's my business partner in Ebbu. He's also one of my best friends, and I've known him for 12 years. We were both looking for investment opportunities at that time and couldn't find an investment that made sense to us. We saw this problem that needed to be solved and we felt that we could solve it. So we decided to start Ebbu.

You're addressing a market with interesting and creative potential. Why did you choose to do business in cannabis extraction?

I feel like it was the opportunity. We have the opportunity to create a new product category. We are effectively a distillery. We take a raw product in the same way that someone takes potatoes and turns it into vodka. We take cannabis and turn it into something new. What we turn it into--is that cannabis? It's a form of cannabis. I think that we really have the opportunity to make something new through the extraction processes.

How do you explain the process?

Ebbu is all about a very specific, unique, artisanal process. Like I mentioned before, we do our business as a distillery. We take the raw product of cannabis and we distill it into its most basic ingredients, which are effectively cannabinoids and terpenes. After that we're able to combine those ingredients and create entirely new products that are different from what you get if you consume the plants whole.

Do you intend to be publicly-traded in the future?

We are absolutely looking into being publicly-traded. Right now we are limited because Colorado has rules which would prevent anyone who is not a resident of the state from owning equity in a cannabis company. So long as we are subject to those rules, we are not able to be a publicly-traded company.

What is the source for your plants?

Ebbu is raising money with the intent to operate our own grow operation. Until that time we are limited to purchasing trim from other growers.

How do you envision the customer experience when they go to buy this and consume this. What would the consuming process be like?

Ebbu manufactures five different delivery mechanisms that we make ourselves. We have a pre-rolled joint, which has real flower material that has been altered to give the desired feeling. We have a soft-gel for people who like to swallow cannabis—in the form of a pill. We have a sublingual spray, a sublingual delivery, an oral mucosal, Listerine-style strip, and a refill for your vapor pen. To be clear, we do not make vapor pens, but we will make the fluid that can be used to refill almost any vapor pen. Those are the ways that we are currently marketing or selling our products.

At the same time, we are looking to sell our products to other marijuana infused product makers: people who are doing brownies, cakes, cookies, these things that are really more of an art. We can sell them our formulations, and they will include our formulations in their products. So they can make a chill brownie or an energy soda using Ebbu’s specific formulations. All we ask in return for that is for them to put a little sticker on the box. When you get a laptop it says “Intel Inside.” We really want to be the juice that fuels the cannabis infused products industry while at the same time launching a few of our own delivery mechanisms.

Have you successfully produced all five of those mechanisms?

We're focused on really trying to make our initial prototypes, refine them, and then perform a product study. Once we're through with a product study, which is basically testing it on a small group of people—an iterative process until the formulations are pretty well understood. At that point we commission our trials. We can't call them clinical trials because the FDA's not involved, but they are effectively just like clinical trials—equally vigorous. We're calling them marketing trials, and our trials will have our clients compare our products with an active competitor and also with a placebo over thousands and thousands of iterations. Those will be used to really fine-tune the efficacy of the product. After the trials, when we take a product to market, we will know that it gives most of the people who use it the feeling that they want.

Can you explain why you chose to partner with Stevia (STEV) and explain how you both will benefit from that?

The relationship with Stevia is something that I really hope comes to fruition. It was an opportunity for them to leverage what we're doing here with Ebbu in terms of our extraction capabilities, and also a chance for us to leverage their specific horticultural expertise as we get closer to opening our own cultivation facility here in Denver. We're optimistic in hoping it works out.

Thanks for all the participation we've seen you on the 420 Investor website already. In the future do you think we can expect to hear from you, and should we set up a place on the site for you to monitor and answer questions?

I would be thrilled to have an Ebbu forum. As I said, we do intend to become a publicly-traded company. We have already had several members who are part of your community who are accredited investors and have invested in our company. You can count on us to do anything we can to give back to 420 Investor. I may not always have time to respond quickly to people's questions, but I will always respond to any questions that are asked.

For more on Dooma, check out his Linkedin profile. Here is an interview, with some more information as well. Here is a link to the STEV press release. Finally, here is an in-depth analysis of STEV from Youngstown Cannabis News, a great source of information on the industry.

Posted to 420 Investor on Apr 27, 2014 — 4:04 PM
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