Dan Sutton is the Founder and CEO of Tantalus Labs, British Columbia’s largest locally-owned and operated licensed producers of regulated cannabis. Tantalus Labs believes in sun-grown cannabis, and are wholly owned and operated in British Columbia.
How did the vision for Tantalus Labs come to be?
Tantalus Labs was built from the desire to marry elite agricultural science and greenhouse operations that we have in abundance in BC, and that some members of my family were lucky to be involved in through the 80s and 90s, with the cutting edge of cannabis talent. Weed knowledge is also luckily abundant in BC, and thus we brought together two groups of highly specialized individuals and figured out what they could teach each other. That's really the cornerstone of the genesis and Tantalus Labs.
Tantalus is taking a unique approach to cultivating cannabis Can you share some of the things that are foundational to the way you think about cultivation?
For Tantalus Labs, purity is number one. We want simplicity of inputs: sunlight, rainwater, simple nutrient profiles, and then meticulous detail in every step of our process. We see ourselves as a day spa for cannabis that's facilitating the best of the genetics that we phenotype and that we cultivate. We stay focused on the thousand tiny things that go into the healthy growth of the crop.
Your facility is called the SunLab. Can you share a bit about what this means and how it impacts the cannabis people come to have expecting?
SunLab is a dream cannabis greenhouse. It combines a meticulous level of environmental control with the natural power of sunlight. It was designed to align the best of nature with the best of diagnostics and control.
In building a state of the art facility there were surely an enormous amount of obstacles, from capital to operations. Can you share a few of the hurdles you and your team faced in the early days and how you overcame them?
SunLab was an exceptionally long permitting and licensing process, and that was the most difficult new problem that we had to solve. The construction process was Design Build Operate, and there had never been a building permit issued for a cannabis specific greenhouse in Canada, ever.
How do you eat an elephant? One bite at a time. We had to convince a skeptical municipality, and a skeptical regulator in Health Canada. We had to build the specialized environmental control necessary for cannabis in our region, and that challenge was unique. It was a finessed dance of chopping down little obstacles as we went the whole time.
Tantalus has attracted some very notable financiers and backers, how did you go about finding the right partners for the venture capital catalysts needed?
The short answer is: very carefully! I was lucky to spend about 10 years in the finance industry before I started Tantalus Labs, and we talked to a lot of different groups. We were looking for investors that aligned on the long term vision that was going to be necessary to see this company through a build stage, through a commissioning stage, and then into operations. We also benefit from founding investors who understand the values that are necessary to deliver a premium brand in the Canadian cannabis space.
Tantalus always stood out as a company in Canada that was committed to staying private and building a superior product. How did you manage to avoid the noise and mania of the public markets during the height of the cannabis excitement and are you happy with that decision now?
We're exceptionally happy with that decision now! Tantalus Labs has been able to focus 100% of its executive energy on the systems, the product, and the customer experience while others were running around all over the world making big promises. We're building a great business. Tantalus cash flows with positive EBITDA which is more than I can say for a lot of our publicly traded counterparts, and we don't really necessitate a massive treasury to be able to go out and build alongside the growth of the Canadian cannabis market.
This market has probably three to five years before it reaches equilibrium from now, in the context of the amount of retail endpoints and the amount of consumers that they serve. And so the rapid growth trajectory, the “land grab”, that was pitched by so many of our publicly traded competitors hasn't played out. As a result, I personally would rather run a business where I can focus on my team and our mission and and not be distracted by capital raising and and roadshows.
You have spoken a lot about the healing power of cannabis, especially on a medical level. Could you share your views on how you currently see cannabis as a medicine?
My views rest on the hundreds of thousands of anecdotes from people that are using cannabis to enhance their wellness, sometimes using it to treat serious health conditions and as a therapeutic input that's part of their program in combination with with other drugs and therapies.
Every week I'm deeply moved by a story of how cannabis has positively affected someone's life, how someone has access to reprieve from the pain or suffering that they may be going through in a medical context. I firmly believe that cannabis has a strong substitution effect for a variety of other higher risk compounds that carry stronger side effect profiles.
Tantalus has built an incredible reputation for really being a premium cultivator. How have you been able to build and grow that brand, in the middle of so many critics saying legal cannabis is far too expensive, even on the lower end. What has contributed to your raving fans from your view?
We spend a lot of time talking to our customers. Our sales team is talking to our broad network of retailers that we have across the country doing things like Net Promoter Score surveys and highly datafied one-to-one feedback on a daily basis. We really strive to understand what those retailers are talking to their customers about in a granular way. Our best retailers are ambassadors, and those bud tenders are the ones that are advocating for our products, especially when they see us taking notes on their recommendations and making improvements. They know that they have a long term partner for life.
We are blessed by just an inherent passion for cannabis based on where we come from. Tantalus Labs is majority British Columbian-owned and operated, and as a result our team was born into a sophistication around the cannabis that we consumed growing up. I think everyone on the Tantalus Labs team is a cannabis nerd. Not everyone necessarily smokes cannabis, but most do.
Moreover, our whole team really nerds out on cannabis and dreams about how to drive this plant forward and continue its evolution. And we're lucky to have found a customer base that reciprocates that energy and sees the world through the same lens.
When you think about where Tantalus is going moving forward, and what would you say is the current roadmap?
Tantalus Labs is going to remain focused on products that are grounded in elite cannabis genetics. This is not just the flower and pre roll segments where we're really thriving, but also concentrates where we've just taken our first steps into the hash market. We've got some excellent hash makers on our team so it's super exciting to be able to deliver that experience in the great British Columbia hash tradition, especially across the rest of Canada.
Our roadmap is growing great weed, making products out of that great weed, and continuing to get people excited with the best our customers could expect, and some they could never expect. From there we aspire to touch more and more customers, over the next five years.
Will Tantalus ever become a publicly traded company?
It's hard to say. I think our default position right now is to just build to a place where our business is growing and profitable, we're consistently increasing cashflows over multiple quarters, and maybe even returning some money to shareholders and team.
Right now the public markets for cannabis are struggling. Based on the amount of pent up inventory I think it's very likely that we're going to continue to see massive write downs and business struggles for large LP’s over the course of the next couple of years. Thus, I don't believe we are going to see a rational cannabis market recovery in that time.
Thus, the appeal of going public is not very exciting for us for the foreseeable future.
Who is someone who you think is doing incredible work in the world of cannabis that more people should know about?
If you're a micro producer and you're just getting licensed, power to you. The future is yours.
