Jeff Wu serves as the technical director at Xylem, applying his deep understanding of chemistry, electronics manufacturing, automation, and cannabis processing. As both an investor and entrepreneur, Jeff brings a unique blend of scientific knowledge and hands-on experience to the pharmaceutical, laboratory, manufacturing, and cannabis industries.
Jeff Wu, technical director at XylemCredit: Jeff Wu
Q: What are the most significant technological advancements you’ve seen in the cannabis industry?
A: The biggest one is the automation portion. When I showed up, effectively everything, including extraction, was manual. Now, there are nearly fully automated extraction systems where you just drop in a column of flower and it will automatically push resin out for you. It used to be a fully manual process, which was crazy when I think about it now. You were running tanks of 50 pounds of butane and propane at high pressure. One spark means a blow-yourself-up type of situation. Then to get your product out, you’d start spraying the materials, still packed with butane and propane, onto a gigantic pan at the bottom of a plate in a room where the air is constantly moving. One static spark means the entire space catches fire. Now this process is fully automated and everything’s contained, and when it ejects product out, it’s partially degassed too.
Vape filling also used to be done by hand, and now—within the last four years—Xylem automatic cart filling machines that you just pour all your oil into, auto assemble and auto-fill. The flower packaging lines used to be people just putting product into jars and screwing them on. Now, it’s fully automated and even fully canned, almost like a tuna jar where you can pop it open. Inside, there’s also argon gas, which helps preserve product even longer. You also see legitimate production equipment, like gigantic X-ray machines that are used to kill mold in the product. So, there’s a lot of technological development.
Q: How do these innovations address the production and quality control challenges?
A: If we had the systems that are available now, back in 2017 and 2018, some of the companies I was with would be thriving today. Our production was just so inefficient. My old head of sales was basically in a trailer in the hills of California filling weed pens with 110 people. They were hand-filling 4000 a week. But, if we had the technology we have now, that 4000 would be done in two hours.
The extraction technology that we had at that time was also pretty bad; it was some dials that were used to control and monitor 10 different variables for an extraction process. It got to the point where people couldn’t keep up, there were just too many variables to track at the same time. Now, the new technology runs at lower temperatures and has internal vacuum control, so you can boil off butane and propane at a much lower temperature and not damage your resins. Even with automated extraction, there’s now inline mass spectrometry for remediating either the color or some taste variables inside. So, you can read exactly what’s being pushed into your column and adjust accordingly to get a good product from cannabis that looked like a pile of hay. It’s come a long, long way in four or five years.
Q: What emerging technologies do you believe will shape the future of cannabis production?
A: Absolutely AI. With the new Nvidia chips that are coming out and the new onboard processors that are basically neural processors, it’s getting to the point where I can actually start taking these microprocessors and chips and writing software for them. They say we’re on the cusp of the AI revolution and it’s true. The products and the enabling technology have gotten cheap enough and powerful enough that I think it could happen.
Q: What advice do you have for those looking to innovate or start a venture in this space?
A: Make sure you have capital. I took initial sizable losses to understand the business and identify business models and niches. The other thing is that the money is not only for development work. A lot of companies in this area rise and fall based on government regulations, which change all the time. Just the delivery regulations in California changed eight times within two years. First, you needed an armored truck to deliver product, because that’s when cannabis extracts were $25,000 a kilo. Then they dropped the armored car requirements and said you needed a cage and bulletproof glass. But all these people had already bought their armored cars. Then they dropped the bulletproof glass requirements and even the cage requirements. You can now just put it in any Toyota Camry and drive down the road. There were also requirements to livestream your manufacturing facility to the local police station. Every single one of these issues was extra operating costs, so, people were left with a ton of overhead.
For the facility we built in central California, they required us to build five bathrooms in a 15,000-square-foot facility. We were just sitting there wondering why we needed five bathrooms for five people. It didn’t make any sense, but now they don’t require that anymore.
With the current push to get cannabis to Schedule III, the market is going to get jumbled again. A lot of people are not ready to do GMP-style manufacturing. GMP isn’t that hard, but it takes money that they don’t have.
I remember as the California regs were coming down in 2019, I was reading every single draft, and I was like, “Well, it looks like you guys are out of business”. But another draft would come in, and then it was, “You guys are in business.” That was the rollercoaster ride of this industry.
Q: How do you envision the cannabis industry evolving over the next decade?
A: We’ve already had one extinction event happen, and there’s going to be a second extinction event, probably within five years. After Schedule III, a lot of people and a lot of money are going to pour in, and there will be a shakeout of the businesses. I was part of the first one. A lot of companies I was with didn’t make it. We just didn’t understand the implications of the regulations changing on us, and we didn’t understand how long it would take to get product from point A to point B. We didn’t even have standards, because a lot of the products we were making were brand new. When Schedule III occurs for cannabis, the next race will be in efficiency and scaled production. The companies that will survive will be because of disciplined business operations and the use of automation that is designed to scale production.
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A look at the technological advancements that have reshaped the cannabis industry and the trends set to define its future Read More