How did Vanguard Scientific grow to become one of the world’s leading technological integrators in the hemp and cannabis space, serving clients in seven countries? And what does a winning technological integration blueprint even look like for these industries?
Vanguard’s success certainly didn’t happen overnight. In a recent interview, Green Flower sat down with founder and CEO Matthew Anderson for a deep dive on the pivotal role they continue to play in the rapidly evolving cannabis and hemp industries. Much like the labs they work with, Vanguard has followed their own step-by-step process, keeping a methodical approach at every turn with their focus on not just today – but the future of cannabis and hemp.
Rising Above A Crowd Of Unqualified Consultants
When Vanguard Scientific was founded in 2015, the initial goal wasn’t to start making sales from day one. If Vanguard was going to be a trusted authority and leader in the cannabis space – a period of research and development would have to be first on the agenda.
“Early on, we looked at the cannabis boom and saw that the fastest growing category in the industry was consulting,” Anderson recalls. “Everybody who knew how to grow marijuana in their closet suddenly became a master grower. People who were doing butane extractions out of their garage became extraction artists.”
The emerging cannabis industry was inundated with cannabis-loving consultants that, however well-meaning, had no business offering guidance to enterprises with serious plans to develop and scale. “We knew that we really had to battle-harden our assumptions and take a position of authority,” Anderson says of Vanguard’s initial phases. “We had to become experts and to do that, we would have to walk the talk because actions are louder than words.”
The Midas XII & Beyond
One of the first things Vanguard did was develop the Midas – a medical-grade CO2 extraction system that processors and manufacturers could rely on for high-terpene efficiency and consistency. To get the system just right, Vanguard brought in top lab directors, technicians, and extraction professionals for guidance. “We had to learn from them because there were no books at that point on what good extraction looks like,” Anderson reveals. “If we were going to provide the ability for disruption, we had to be very disciplined on how we came to market and how we were perceived.”
It was through Anderson’s work as a partner in the MacArthur Investments Fund, which also funded Vanguard, that he had access to a number of serious operators in the space, enabling them to put the Midas system into some of the earliest, most sophisticated labs in North America. Yet, getting Midas into these labs was just the beginning of a much greater need and opportunity.
Discovering The Downhill Slope In Cannabis
During the process of launching Midas into the world, Vanguard learned where the real downhill slope was in terms of adding value to all these cannabis labs beyond just setting them up with the right equipment. “We learned that it’s the space between the equipment where the greatest need really is,” Anderson explains. “At the time, and even today, a lot of consultants in the space knew only one extraction modality, and for their clients that was the best method because that’s all they knew.”
Essentially, when you have a garage extractor who can make great shatter or concentrates from home – and then goes to work with a multistate operator looking to make controlled ingredients, it can create a lot of unwanted challenges and inefficiencies because there’s a big difference between the two, Anderson explains.
Vanguard understood they had to become technology integrators in the cannabis space, setting these labs up with the necessary equipment, teaching them how to use it, and giving them processes on which they could build and scale. “We realized we had to meet the client where they are through a needs-based analysis, that all of our recommendations have to harmonize with where they are today, and where they’re going tomorrow,” Anderson says. “And all of that is filtered through, not just a botanical extraction or biochemical lens, but really we look at it through a techno-economic and process engineering lens as well.”
When considering a potential client, Vanguard exercises plenty of due diligence as a first step in the process. Checklists and pre-feasibility studies are all part of the initial equation. “We work with potential clients to make sure their eyes match their appetite, so to speak. We aren’t necessarily their best friend because we are likely telling them information that others aren’t due to so many people just trying to win their business,” Anderson notes. For businesses to be sustainable on both sides, this upfront due diligence is a must to ensure the client has the wherewithal to move forward. “We’ve had to approach the business with a lot of prudence and humility because the industry still isn’t completely built out.”
Preparing Cannabis Operators For Future Industry Success
One of Anderson’s ultimate goals in working with any client is not only to prepare them for economic success but to also prepare operators for the big-picture vision of where cannabis is heading.
“Coming at it from a real understanding of commercial viability, not only does our client have to make the specific oils, extracts, isolations, and titrations they’re seeking to provide to the market, but they’ve got to do it at a price and a value that can actually make the market. It doesn’t do us any good if their unit economics never get them to the shelf at a price that the consumer will buy,” Anderson explains.
Furthermore, as buyers in the cannabis space become more sophisticated, quality, standardization, and good manufacturing processes begin to take on greater significance. “With the void of bodies like the FDA coming in and providing regulation, we look at other industries such as the nutraceutical space pre-regulation, and we understand that it’s not just the extraction and processing that has to be controlled, but also everything before it – all the way into the field,” Anderson says. “And for the client and the buyer to actually get the finished ingredient they want, quality control, good manufacturing practices, inventory control, and supply chain management are all required.”
Due to the current situation in cannabis, Vanguard moves up and down the supply chain to provide a holistic understanding and feasible solutions for their clients to meet their success objectives. “It’s a brand-new industry, and when we say it’s a new industry, it’s everything. It’s material handling, it’s logistics, it’s aging inventories, it’s the fact that operators are young and don’t have experience, the fact that our clients aren’t Fortune 500 companies with a lot of infrastructure,” he explains.
“We are providing very specific support to clients inside of varying regulations and compliance environments that are looking at our work either as advancing plant medicines and science for the betterment of humankind – or aiding and abetting criminals to the point of felony charges, depending on what country you’re in.”
Now that Vanguard is operating in seven countries, their mission to be good stewards of plant science continues to grow, empowering others along the way. “As we work with our clients, helping them provide the best oils, extracts, and formulated products to the market – we are the connective tissue in between their processes and lifecycles; we are their subject matter experts and that extra bench strength in their specific project endeavors.”
Quality With A Capital ‘Q’
As the cannabis industry moves on from the get-rich-quick-bubble-economics phase of unrealistic evaluations, projections, and expectations – a much smarter, more streamlined version of the industry is gearing to take its place. Amidst this shifting industry landscape, increased focus is turning toward good manufacturing practices and quality control.
This is where companies like Vanguard play an important supporting role. Since the COVID-19 shutdown, they’ve put even more focus in this area, coming up with new ways to serve and educate their clients. “We are currently finishing our Center of Excellence in Aurora, Oregon, which is a new hub of innovation for Vanguard,” Anderson reveals, explaining that Vanguard is collaborating with Oregon State University on a hemp-related project to extract terpenes and minor cannabinoids for a variety purposes.
“By creating this environment where clients can come and see a running GMP processing facility, they can experience those current good manufacturing practices, process engineering, material handling, and the specific steps in extraction,” Anderson says. “We are bringing to life the very things that they and their investors are endeavoring to do, providing virtual and in-person tours to really demystify a lot of what currently lives on spreadsheets and proposals when you work with competitors.”
For Anderson, this entire effort comes back to that core value of meeting the client where they are today and prepping them for tomorrow. “Because in order for the next evolution of the industry to come, standardization is mandatory. Securitized supply chains are mandatory,” Anderson says. “And we have been doing a lot of heavy lifting behind the scenes to be able to provide our core clients and those clients to come with the ability to work with stabilized supply chains from seed all the way to final formulation.”
Acquisition of quality operations have been a hallmark of the industry to date. Anderson estimates that around half of Vanguard’s clients have been purchased by bigger companies, and at some point in the near future, when Big Alcohol, Big Food, Big Agriculture, and Big Pharma move further into the cannabis industry, they’re either going to buy or build, Anderson says. Part of Vanguard’s mission is to ensure their clients are ready.
“We will continue to move our client participants to a more sophisticated environment, so they are ready to meet the FDA when they formally begin regulatory enforcement. It is imperative that our clients are ready to adhere to those GMP standards,” he says. “Because otherwise there is going to be a point when the constituents looking to come into the market won’t buy, they’ll build their own and outcompete the initial participants that are in the market today.”
Putting On A Green Badge Of Courage
As the cannabis industry continues to grow and evolve, Anderson hopes that people don’t continue to see the space as a get-rich-quick scheme but rather enter with a sense of discipline and big-picture perspective. “By coming into this space and putting on a green badge of courage as it were, you are committing to being scrutinized, and you’re committing to saying that you are outside of the core base of what’s seen as acceptable – that you’re comfortable with your individuality,” he says.
“We’re seeing it throughout the world, special companies being led by very special men and women throughout the entirety of their divisions. And it is very much the heartbeat inside the company that makes the difference. It’s not only what you do, but how you do it, and the culture in this space needs to be nurtured more than anything else.”