Radical Transparency

Ben  43:32

Yep, absolutely. Everything is done in house. And like I said, we have this. We’re a licensed food processing plant. We have a lab tour. The Coronavirus inspired us to do a virtual lab tour. We’ve got this policy, that’s very, very important to us, that we refer to as radical transparency. So we have an open door policy at the lab. Anyone, whether you’re a retail customer, or potential business partner, or you know, just someone who’s curious that doesn’t even want to buy CBD just wants to see what a CBD lab looks like. We are open under normal circumstances, from nine to six, Monday to Friday. And we do lab tours all the time. With this Corona thing, we did a virtual lab tour and put that up on YouTube. So you can see where everything’s made and how it’s made. 

Vadim  44:19

That is cool. So, people, when this is over, they can just drive up to your facility and come in?

Ben  44:24

Yep, anytime. Don’t even have to set an appointment.

Vadim  44:27

You know, that is the first time I’ve ever heard of that in any industry. That is commendable. So people can just drive up from the labs and come in?

Ben  44:34

Correct. We’ve got, you know, give you a little booties for your shoes. But otherwise, that’s as easy as that. And the reason we did that too is, you know, I’ve told my story in Colorado. We did not have a manufacturing facility that we were proud to show off to people. And when I was a broker selling extracts too, I’ve heard all of the bullshit basically about “Oh, we’ve got proprietary extraction techniques or we’ve got R&D going on” or all these different excuses to prevent people from coming in and seeing what your operation actually looks like. Fortunately, for us, we’re well funded, we’re a professional bunch, and we have absolutely nothing to hide. And, in my opinion, our strongest competitive advantage is that we are capable of being transparent.

Vadim  45:21

I think it’s very smart. And like I said, I’ve never heard of that in any industry. Even like the hearse factory, you have to make an appointment to go see it. Or, you know, Coca Cola is not going to let you in without making an appointment. So that is commendable. I think you’re going to get some visitors.

Ben  45:40

I hope so.

Vadim  45:41

So that’s in Durand, Wisconsin?

Ben  45:44

Yep. D-U-R-A-N-D. Or you could just look us up, Sunny Skies CBD. Our lab’s address is right on there. 

Vadim  45:52

Have people ever just shown up randomly? 

Ben  45:53

Yes. We probably do have just four lab tours a week, maybe even more two, if you count the retail customers. Like I said, Durand is a really small town. And we were a big curiosity when we came to town

Vadim  46:10

I’m sure. 

Ben  46:10

And my dad is the first state champion athlete in the town and my grandparents have an amazing reputation here. So everyone in town knows us and everyone’s curious to see what it looks like. We’ve had different, you know, local papers come in and take pictures. And so we’re not doing that just to show off our labs and sell products but we want to feel like a part of the community. And that has definitely helped.

Vadim  46:36

Oh, I’m sure, especially with just increasing the consumer confidence. They’re just people coming in.  So do you have a store there too on site that people can make retail purchases right there?

Ben  46:46

Yep, we were originally planning to build a lab. And then there is a building in town that was historically a car dealership. It was purchased for one year by an architectural firm that designed all the quick trips, there’s been popular chain gas stations around here, so they’ve kind of beautified the place. So it had all really nice wood floors and big exposed wood beams and brick walls. But we had to turn that into a manufacturing facility. So we kept the reception area of that building. We kept and converted into a retail store. So you can still see, you know, the nice wood floors and everything. But then if you open the door, behind the reception desk, you see a big lab, and then my office is in the back. But as a long winded way to say yes, we have a retail store here in Durand.

Distribution: Online, Retail, Wholesale

Vadim  47:36

That is cool. And are you selling mostly online or through retail stores across the country?

Ben  47:43

Wholesale is by far the largest share of our revenue number. I can break it down a little bit for you. So currently, we are making about 50% of our revenue from wholesale. So we sell to pharmacies, CBD stores, organic grocery stores, the co-ops, and then vitamin supplement stores. Those are the shops that we go after. We also have products in lots of little random spots. But then about another 25% of our revenue comes from wholesale services, which, you know, include white label manufacturing, private label design. We do bulk solutions. So if you want a gallon of 1000-milligram per 30-milliliter solution, we do that. About another maybe 25% of the business, wholesale extracts make up the vast majority of the rest of the business, wholesale extract sales. Our retail sales are just a couple hundred, like a good day’s maybe 300 or 400 bucks. We’re a real small town. But our site is gaining momentum with Google. It takes a while for it to establish what we call domain authority. So we’ve gone from, you know, just a couple borders a week to now or maybe two three a day.

Vadim  49:03

It takes some time, it takes some time, but it’s good that you’ve got that wholesale channel and I’ve seen your products in stores too. I knew — the logo, I had recognized it from some organic food stores. So that’s a good market, you know.

Ben  49:18

Cool. And with organic foods, those co-ops too, they were some of the first places to carry CBD. And so a lot of them just went with the big brands, you know, the Charlotte’s Web and the CV Sciences of the world. So those places — as a salesperson — are ripe for the taking because those big brands are charging outrageous wholesale prices and they have worked very hard to get the brand loyalty that they have. But in such a fractured industry, going into those places with those completely uncompetitive pricing, the bigger brands has been a very nice strategy for us.

Vadim  49:54

That’s good. That’s good. And for people that want to buy online, they can just hit up sunnyskiescbd.com and they’ve got your full product offering?

Ben  50:03

Free shipping on everything.

Vadim  50:04

Free shipping? And I know you have a great guarantee, right?

Ben  50:07

Yeah, yeah. If you’re not satisfied with the product for any reason, we don’t care if you use it at all, just let us know. We’ll give you a full refund. No one has ever taken us up on that. Hopefully you don’t have too many tricksters in your audience.

Vadim  50:22

No.

Ben  50:22

But yeah, we stand behind our products. And if it doesn’t work for you, you know, we want to make it up to you, but we really feel constantly that it will.

Vadim  50:29

You know, between that and your open door lab policy, I think you’re doing things right. You know, you that’s very respectable.

Ben  50:36

Thanks. Appreciate that.

Lab Test Results

Vadim  50:38

The last thing I wanted to touch on with you, before we go here, was the labs. What are you guys doing for your labs? Are you using a Wisconsin lab? Or do you use one of the big labs across the country to check your products?

Ben  50:52

If you’re interested in looking at our lab reports, you can click on the lab results link on our site. We also have QR codes on every single label. For white label customers too, we provide those at no additional cost. But we use Botanacor, the lab that was working with in Colorado. I would love for a Wisconsin lab to be able to compete, or even a Minnesota or Iowa, anywhere nearby to be able to compete with Botanacor on their lead times, their customer service, their consistency, but we have not found it. I’ve heard all sorts of nightmare stories, sent it in product to a lab in Wisconsin. You’ll send in two samples who get the results back for one of them in a day and the next one, they get back a month later. Botanacor has been around a while. And they’ve already made their way through some of those obstacles starting a testing facility.

Vadim  51:44

Cool, cool. And did you guys have those up to date and everything by batch?

Ben  51:48

Yep. So each batch of products we make, we take a random sample from that batch, ship it off to Botanacor for a third-party test, and then the results from that test ends up both on our site and on the QR code.

Vadim  52:02

Okay. And one thing I think I want to touch on is are you testing —  because this is something that consumers are confused about. As a company, are you testing the raw product, or both the raw products and the bottled product? Are you testing in the bottle as well as, you know, the batch?

Ben  52:20

Good questions. So first, I know this isn’t exactly what you asked. But with the contamination testing, we do all of that. The hemp material used in processing is tested for everything. So that’ll be your heavy metals, your pesticides, your microbial contamination. Then further testing is done on extracts for potency, residual solvent. We don’t retest for anything that didn’t show up. So say your material had had zero heavy metal contamination like ours did, you wouldn’t introduce heavy metals into that distillate unless you weren’t cleaning your equipment between runs. But firstly, we only run one material. And when we start processing another company’s material, we go through extensive cleaning procedures. 

So all the contamination is done on the plant and the extracts. As far as the batches, we have not reached a size like the Joy Organics, where they have a full panel done on a sample from every batch of product. And since there are no contaminants being introduced back into that product, we’ve found that to be satisfactory for every customer we’ve come in contact with. 

But then to answer your question, as far as when the product is tested, we bottle everything, we take a random sample from that bottle and send it off to the lab for testing. We use 15% extra distillate in each formula and 5% extra isolate in each formula to account for just natural variants, to make sure that all of our products are within an acceptable range of the reported milligram content.

Vadim  53:59

Oh, cool. So there are a lot of times people actually may be getting more probably.

Ben  54:02

Yeah, more times than not. But what we strive for is 95% of the samples that we send off for testing, 95% need to be within a range of negative 5% to plus 15%. If we cannot make that happen, we go back to the drawing board on improving the product formulation process or we don’t sell that product.

Shout-out and Wrap-up

Vadim  54:27

Nice, nice. Again, between that and your open door policy and guarantee, that’s great. You guys are certainly an example of what I think a good CBD company is, so very exciting to have learned more about you. And before we go here, do you have anything else you want to mention for either just new people listening or new private label customers or just anybody that wants to learn more? The floor is yours.

Ben  54:53

Well, first of all, let me give a shout out to different people here in Sunny Skies. This has been more about me and less about these awesome people that I work with than I would have liked it to be, but my partner Pete, he’s the man, my dad’s best friend. He treats me and all my siblings like his own kid. His wife, Terry, is our president. And she is, you know, she’s the matriarch of the company. She runs the day to day operations of the lab and just so on top of it, keeps everyone organized and kind of the heart and soul of the company. Their two sons. Hunter is our lead processing engineer and Peter is a processing engineer as well. They’re twins. And then we’ve got Tiffany in charge of the product. She’s the production lead, got Matt doing sales, my brothers Jack and Max working at the lab, Coogan running the equipment, Scott running the equipment, Charlie, my little brother as well. Can’t believe I almost forgot my little brother. 

Yeah, just an amazing bunch of people to work with. But then no one cares about that. So sorry for wasting your time. I had to do it. And then as far as if I had to speak to anyone in the CBD industry, it would be, you know, the guy that was in my shoes three years ago. And I would say just, you know, keep your head down, work hard, don’t lie to people. You’ll be amazed that who you bump into three years down the road and the way that they remember you. So just be honest, and eventually, you’ll make it.

Vadim  56:20

Great. Well, thank you very much. It was a pleasure to have you on. I’m sure we’ll have you on again. And stay on for a little bit. We’ll talk a little more after recording.

Ben  56:29

One last thing. Rob, I can’t believe I forgot you. Rob, you’re the man.

Vadim  56:34

No worries. Rob, you’re the man. Awesome.

Hey, everyone, that concludes our episode for today with Ben of Sunny Skies CBD. Make sure to visit them at sunnyskiescbd.com where you can get all the information you need about their brand and trying out their CBD products. If you want to get in touch, I’m going to leave everything you need in the show notes. So all the information is there. And also if you want to take them up on that free tour, make sure to get in contact with them and drop by their facility in Durand, Wisconsin. That’s it for today. I hope you enjoyed this episode as much as I did. And until next time, this is Vadim, the CBD professor from cbdschool.com, signing off. Thanks for listening. Bye for now.