#005 - Cannabis Business News Round Up | August 10, 2023

Speaker 1: 0:04

You.

Speaker 2: 0:51

Welcome to High Spirits Live, where we're serving up unfiltered insights revealing our insider's perspectives in illuminating transformative strategies for people. You trying to make sense of the cannabis industry, and here's your host myself, ben and Anna Rae.

Speaker 1: 1:10

Hey Ben.

Speaker 2: 1:11

Hey Anna Rae, how are you?

Speaker 1: 1:14

I am good. It is a glorious morning, my spirits are high. Go ahead. I'm excited to have this conversation today and to connect and hear about your recent travels.

Speaker 2: 1:26

Oh, yeah, yeah, yeah, you know, I'm looking at my t-shirt, I'm still coming off of my vacation vibes. I'd been saying for about six months that I needed to take a vacation. My wife was getting tired of hearing it. And yeah, following the excitement of the cannabis drinks expos in Chicago and San Francisco, back to back grabbed the whole family, took them out to our friend's house out in Charlotte, which I'll get there in a second Charlotte amazing city. She's moving there soon. But yeah, man, vacation it is very necessary. I'm very excited to be here.

Speaker 1: 2:04

Tell me about how the cannabis drinks expo was.

Speaker 2: 2:09

Cannabis drinks expo is great. For anyone that doesn't know where have you been, but I spend 99% of my cannabis journey in the beverage category, and to have a conference that is specific to what some people consider such a small part of the industry, but for me it is the most exciting smaller volume of folks, but very high quality. So it's like you have potential customers, all your partners, your competitors everyone's just all there in the same room and it's trying to lift up this category. This big revelation I had going to these expos over the last couple of weeks was that cannabis beverage is an industry of its own. It's got a unique supply chain. It's starting to evolve into its unique rule set and what we've seen in Minnesota is a unique opportunity to really touch the mainstream.

Speaker 2: 3:11

And so my mind has been going in this whirlwind and I'm glad I had vacation immediately following so I could really put some of this down on paper, which I guess some people would consider work. But it's just like really, what is that vision? How do we perhaps decouple cannabis beverage from cannabis more broadly and see what avenues we can leverage with alcohol? And all that Because I think cannabis as a whole is incredibly complicated and it's really hard for any of these governing bodies to really wrap their heads around holistically.

Speaker 1: 3:45

Yeah, but beverage is something that governments have been regulating and having an opinion on for a long time. So I see that and I can see how it could be a really great pathway to a broader normalization in cannabis, which is super cool to me. Interestingly, one of the things that I like best about beverage is someone that isn't actively working in the beverage space is that it is so focused, and in the cannabis space we've sort of gone against basically all of the Business 101 MBA program training that tells you to figure out what you're good at and focus on it and focus on it.

Speaker 1: 4:25

And in cannabis we tended to go really wide because the vertical models have necessitated businesses doing retail and manufacturing and cultivation and distribution and availability and, interestingly enough, for whatever reason, it does feel like the companies that have chosen to focus on beverage are really focused there.

Speaker 1: 4:50

They don't tend to be the companies that are managing large verticals and then have a beverage skew and while those exist, the beverages that are floating to the top are the ones that are really focused, and I think it reinforces that kind of core tenant of how important focusing on what you're good at and what your brand's promise is can actually deliver some equity to the customer. So I love the category. I can't wait to see how you put your stamp on it and how all these other exciting businesses come together to kind of redefine what the beverage category is in the space. So really cool.

Speaker 2: 5:33

Thank you. I think it's not to spend too much time here and I think we have a couple episodes coming up that will speak to this a little bit more broadly. I know one of the people that I ran into cannabis drink expo was Pamela Epstein, and Pamela's been a thought leader in the space for many, many years now, whether it's with CCIA and CIA or whatever alphabet soup that she's been involved with. But it was just like speaking with her talking about how the TTB, why they've been rejecting cannabis as a whole because they don't know how to govern something like a cannabis crop, like that's just way out of their realm of expertise. But they could be comfortable regulating cannabis beverage, you know, and like really focusing on that.

Speaker 2: 6:21

And then I was on this panel and the crowd asked me this question just about you know where does cannabis beverage belong and where is it going to access the consumer?

Speaker 2: 6:32

And, to your point, just within beverage, which we all know is like one to 2%, maybe 3%, of any given market, within that small percentage, it's fragmented into these different categories of like wellness, recreational and maybe even medicinal, and so it's like all three of those are like different venues, you know. It's like you shouldn't be going and shopping for an uncle Arnie's at like a GNC, but you very well could find a THC beverage eventually in a GNC. And so it's like how do we tackle that when the conversation is as broad as all of cannabis, the entire vertical all the time? I think it's just too overwhelming for people and that's why we've hit this kind of just period of time where it feels like we're not moving the needle forward with the federal government and it's because they don't know how to tackle it. It just keeps you being batted back and forth from from one department to the other.

Speaker 1: 7:29

Oh, why are we not moving forward with cannabis policy? I guess that's one reason, yeah.

Speaker 2: 7:35

We really dove into that topic right there. How are you doing? How has your week been?

Speaker 1: 7:40

Oh, my week has been good. You know, I have been working hands on with a lot of companies that are just navigating the complicated waters that are the cannabis space right now.

Speaker 2: 7:52

Yeah.

Speaker 1: 7:53

So I've been keeping optimistic because I really believe in the people and you know, my coffee mug today is my Wonder Woman coffee mug, there you go.

Speaker 1: 8:04

I'm just trying to stay in my place of power and I realize that most challenges have solutions if we can, you know, really have clear purpose and so whether it's like rebuilding a cashflow forecast to figure out how to get over the next three months, or figuring out how to put together a partnership that is going to make all parties happy, I think that there's there's still a lot of magic happening, so I'm just happy to be there at the table and, yeah, just like shout out to everybody that is is in it, because I think that everyone is feeling some amount of stress and stress and pressure and cannabis right now.

Speaker 1: 8:51

That's just reality, because I I am hopeful, because I know that people have been consuming cannabis for thousands of years and this is not new and it is not going to stop. And so there's this moment. Like within the challenge, times is also such an incredible time to build and to be creative and to approach your business in new ways, and so for people that are willing to open up their mind and think about the future differently, it is, it's a fun time to get to solve problems.

Speaker 2: 9:27

So yeah, I'm always amazed at how resilient everyone is in this industry and how people are able to keep the optimism and you know we've been able to strike that within our team.

Speaker 2: 9:41

You know we haven't been without our challenges like we've talked about in the past, but you know we just August 2nd, we was our five year anniversary for VITOSA and it was kind of just amazing to take a step back and again to be traveling for for these conferences that feel like they were built for us.

Speaker 2: 10:02

You know, shout out to the Cannob Strengths Expo team, like Sid Patel and the team just puts on a great event and I know it's like it's smaller than everyone wishes it or wants it to be, but it's definitely kind of growing into something of its own and I think you know, with the whole category working together to drive it forward, it's just going to continue to be awesome. But, yeah, reaching that five year mark, I'm just like wow, there's a lot of just like ups and downs, tears and laughter, and just just to get to this point, but to feel like we're growing into a more mature company. Yeah, it's like a whole new kind of mindset for me in the space. You know, it's like going from. It's going from taking on venture capital with a lot of hopes and dreams and a lot of, like you know, really shitty forecasts and and, all of a sudden, having a good handle on the business, knowing what we are actually, having a category that we're serving instead of the, the potential to have a category.

Speaker 1: 11:10

It's a unique moment and, first of all, congratulations to you and your whole team. The Vertosa team is amazing. I love all of you and you guys are doing really great work. And just in thinking about businesses reaching these moments whether it's five years or one year or whatever it is like, there's been so many times, as I've been I've been in this for a long time where I've had to remind myself well, every business in cannabis is a startup and that's why we're going through these, these trials and tribulations, whether it's a software provider or a cultivator or a retail store.

Speaker 1: 11:46

like no one has been at this very long and there's no case studies, Like we're all figuring this out. You know, the classic line that everyone loves to say is like we're building the plane as it's flying. And yeah, but there has been this shift lately and it's been really cool to see like when I was trying to hire executive level talent five years ago, there wasn't people with experience in cannabis that I could have.

Speaker 1: 12:09

It was. It was bringing in other folks to help fill those gaps. Now the talent pool is full of people that have done great things in cannabis over the past five, eight, 10 years.

Speaker 1: 12:21

Yeah it's not the same. It's like we still are a young industry, unquestionably, but yeah, there is a movement from for some companies to start to be transitioning to out of that startup into something that is more of a sustainable enterprise, that has like a clear pathway, and that that that's a maturation that I think a lot, a lot of us entrepreneurs are ready for, because you just get tired and and getting to that place and I know that there's there's a real difference between building and managing, and that building and that growth phase was what a lot of us were chasing, and just to see what Vertosa is doing now, I'm excited.

Speaker 2: 13:08

Yeah, it's. You brought up an excellent point, actually, because we just hired like two new critical roles and the team got so excited about their resumes and it was because they had this very relevant experience in the cannabis space and not just like they had the role in the kind of space, but that they were the first finance hire at, like a very well known, like you know, cannabis company that went through from series A to series D to, like you know, on out and not to give it away. But like, yeah, it's just the fact that we have that is such an awesome opportunity because that never existed before. You know, it was a heavy lift of onboarding, teaching cannabis or teaching professionalism. It was like one or the other.

Speaker 2: 13:56

In the beginning, you know, I remember that in 2015, when we launched Gateway, it was like this idea that we would either invest in someone coming from outside the space and and bolt on the cannabis network, or we would take someone from inside the cannabis network and teach them about venture capital and all that kind of stuff. So it was like this, this confluence of these two different worlds. But now we actually have the hybrid world that we've created over the last, you know, 10 years.

Speaker 1: 14:23

Yeah, it's, it's really wild. Yeah, similarly, it was when, when I was starting steep hill, it was like my my hypothesis was that I wanted to professionalize and legitimize cannabis industry and that that was so early and at that time there were so few business people or just people in general that were out of the closet as cannabis business owners mostly cultivators were quiet and they didn't have brands. And but it's shifted. Now I think that there's an understanding that there are professionals in cannabis. Now it's like we got to like we got to drive this thing to the mountain. We got to like get, we got to the top on some policy changes and and and figure out these supply chain issues and capital crunch and learn how to actually turn these businesses into cash flowing machines that also kind of stand up for the vision of the industry and the vision of the businesses.

Speaker 2: 15:17

Businesses and states. Right, should we 15 minutes in now? Should we? Should we get to some news? I know, I know that like New York has been popping up into my purview is like talking about one of the things that's trying to make it happen. It's like building the plane while getting sued left, right and center. You know, there's just this kind of perpetual feeling of like the regulators need to get this figured out. I know there was a really awesome article. Oh, who was it? It was. It was Hearst Jane, southern California. Hearst has been just an amazing advocate, thought leader in the space, but really coming out, it's like we need like to stop the performative policy making and we need to actually try to build industry right, because that commitment hasn't been made. So there's been a lot of moving pieces over the last couple of weeks. I know it's been a little while since we caught up. What's top of mind for you? What would you like to cover first? Maybe New York? We'd like to get rid of bad news. What should we start with?

Speaker 1: 16:26

Well, you know, I'll say that I think we can take what Hearst talked about and, and, and translate that into a conversation about what's happening in New York, because so, yeah, and Hearst, come join us sometime.

Speaker 1: 16:40

We love you, we'd love to have you on our, on our pod.

Speaker 1: 16:44

You know, hearst wrote an op-ed the other day talking about performative policy and the need to move away from that and things that actually work and that can create change and that will make sustainable businesses. And and what happened in New York is that the MRTA, the law that created adult use in New York, really made some lofty goals when it came to equity, social justice, prioritizing certain demographics of people, and and then, when the regulators had that law in their hands to implement it, I think that you know, going back to what Hearst said, I think that their intentions truly were to not be performative and to create this program, the card program, to truly stand up in industry with equity as its core focus. I believe that the intention was good, and so what has happened since then is that they first announced they were going to roll out 150 licenses to the certain group of folks, and that group of folks are people that met the definition of justice involved, plus had at least a 10 percent ownership of a profitable business for, I think, two years.

Speaker 2: 18:05

Some amount of time, so it was a very specific business of people. Okay. So like previous entrepreneurs, you know that kind of thing Okay.

Speaker 1: 18:14

Yes, and so basically like proven entrepreneurs, but who also were justice involved, and so they got a lot of applications. And these are exceptional folks. I have been to a bunch of different events in New York where I've met the card applicants and now licensees. Like these are folks you want that, you want them to win, like these are people that have had some way that they were just as involved but at the same time have have gone out and been entrepreneurs themselves, have proven themselves, like it just it's hard not to be a cheerleader for these people. And so after New York granted the first batch of licenses, they actually said you know what? These are great applicants. And they gave almost 500 licenses to this group of card applicants.

Speaker 2: 18:59

Wow.

Speaker 1: 19:00

Before opening up yeah, licenses to any of the other groups that the law said that they were required to prioritize, which includes disabled veterans, minority owned businesses, women owned businesses and a more general equity category. That wasn't quite so specific and the law did say that the applications were supposed to be made available to everybody.

Speaker 1: 19:28

And so at the beginning of this week, or a couple of days ago, four disabled veterans sued the state of New York, the regulators, and said that it wasn't fair and that they were being irreparably harmed by the card program giving all of those folks a head start.

Speaker 1: 19:50

And this comes on the back of another lawsuit that was filed that did not create a halt in the program, like this lawsuit did, through an injunction from the group of existing medical operators, most of whom are MSOs, who haven't been quite as relatable as this group of disabled veterans. So that's where we are, and so a judge said okay, while I decide if you truly have been irreparably harmed, the card program is halted and it's going to court tomorrow, friday.

Speaker 2: 20:29

Wow, and they're my understanding that they're doubling up this conversation and being heard at the same time, so it's like it's going to be a big conversation. But it's not the only fire like the OCM in New York is facing, because just a couple of weeks ago we talked about, like, how they overnight shut down the hemp-derived cannabinoid space and that resulted in a lawsuit and I think they were pushing for an injunction and it's brands that had been selling, like Cycling Frog, into New York. I know the Hemp Everde Alliance signed on with a number of others local operators too, so New York is certainly going through it.

Speaker 1: 21:12

They rejected the injunction request from the beverage company that brought it forward. So they don't get to overrule those emergency rules quickly, they need to go through the whole legal process.

Speaker 2: 21:28

They need to go through the whole legal process Wow.

Speaker 1: 21:30

I mean New York. The word I've been using all week is a roller coaster. Yeah, it's really challenging for anyone to wrap their head around what the real opportunity is in New York and if it makes sense to be operating there right now. And I feel for everybody, like, I think that these card licensees they have been working at this, getting through the regulatory application process for the last year, and whether or not it was to the word of the law has nothing to do with them. They were offered an opportunity to apply, they did. They are clearly worthy founders of companies, as are the disabled veterans, and so, like, what's going to happen next?

Speaker 2: 22:22

Yeah, it's interesting, though it's like a lot of it does seem rooted in good intentions, right Like I know, for, like the hemp drive cannabinoid perspective, the OCM was standing on. It's like we aren't against you know, load doses of TAC, hemp or cannabis. We just need to go through the regulated system where we're creating this opportunity for the you know, the justice impacted operators and you know. So it brings up an interesting point. In going back to the article that Hirsch wrote is like is Is it performative or is it just? I mean, it's just that hard to create like force, this equity opportunity in the license, in the limited license rates.

Speaker 1: 23:17

What they're doing is the least performative of all the equity programs.

Speaker 1: 23:20

I think that because they truly have been trying to figure out ways to stand up these small businesses, to encourage, encourage ownership and create pathways for capital. It has not been an easy path. I think that the more performative programs have been the ones that truly have failed, that haven't gotten businesses into market. Like mostly throughout California, the equity programs in this state have just been really just failure to launch restrictive, performative, and a lot of the performative stuff that he's talked about is not just on the social justice side and on the equity side, but I think it's part of.

Speaker 1: 24:07

It is also the way that the laws get passed have to do with so many special interests all getting their hands in them, and so I think that the easiest way to point to this is unions, like the unions are written into the laws in most states, and that means that there's some type of requirement for a labor peace agreement or some type of way that the unions have created relevancy for themselves in the law. And you know, without getting into a union debate today, I'd say that you know labor policy is different than the discussion around cannabis prohibition and so like. Why are these special interests showing up in laws as opposed to just focusing on, like, the central issue of prohibition and safe access? It just makes things complicated and harder to read through and makes regulators have their jobs even harder as well. It's like the more that we layer that they need to regulate on, the harder it is for for them to make it easy for businesses to actually wade through.

Speaker 2: 25:22

So yeah, like every special interest, every additional line of regulation is just more expense. At the end of the day for the business is more to navigate, more taxes to pay, and you know, everyone understands that our effective tax rate is, you know, 70 to 80%. I don't know hacker that statistic is, but that's what I've heard. So I'm saying it. It's a lot, it's a lot and it's like if these businesses are going to survive, we need to treat them like every other business. We shouldn't have a 20x effective tax rate compared to the alcohol industry that we always get compared to. It's just, it's not, it's not even ground, but taking it in a little bit more of a positive direction.

Speaker 2: 26:06

There was in New York. They, they, they are launching the, the farmers market, or what is it called? The, the cannabis growers showcase, and I love this. This is, this is an awesome opportunity. It's an opportunity for smaller businesses to kind of get out there and and connect people with the plant, which I feel like we used to have in California, like everyone loved the kind of deli style of going in and be able to smell and look and choose your, your nug, and that's all gone away. So it's like, really like decoupled the original consumer nature of the plant and and now the retail markets that we get to shop. So I'm excited to kind of see, see what this looks like as as it rolls out.

Speaker 1: 26:51

Oh yeah, let me just say, separate from cannabis. In general, farmers markets are are. I consider them to be one of my hobbies. Like I, I specifically carve out time on Sundays to go to one of my favorite farmers markets locally. I love picking out my produce, buying it directly from the farm, getting to to show my son like all the different unique varieties of apples or tomatoes or whatever right in front of us.

Speaker 2: 27:22

And is that Sonoma or like where's? Where's the best one up in the north bay?

Speaker 1: 27:28

So there are three different farmers markets that I love there and they all have different vibes and personalities, but the the Sebastopol farmers market is amazing. That's on Sundays and that competes with another farmers market that is in San Rafael, and the San Rafael farmers market the Civic Center is the biggest farmers market that happens in the Bay Area and chefs come all around to buy for their restaurants and they give them these cool extra big carts that the chefs. If you're a chef, you get to roll it around, so you can tell the chefs that are there, which is cool.

Speaker 1: 28:06

And then I also go to a market on Saturdays in Santa Rosa and open and yeah, and summer seasonal and some are. But I just love this and I can't wait to to not only see more more direct to consumer events or brands and farmers get to interact with consumers, but I hope to see canis more integrated into traditional agricultural and and kind of like product experiences, be that like a tasting room type atmosphere that you could also buy the vegetables that that farm is growing Like. In the next month we're going to have our friends from florist farms. Carly Miller hornick is going to be on from New York.

Speaker 2: 28:53

Right.

Speaker 1: 28:53

They are a. They are an organic farm in upstate New York and they go to their farmers market every week and sell vegetables anyway, and so how cool is it to be able to buy some vegetables and to buy cannabis from that same farm? I just love that idea. I think that what New York is doing isn't that by any means yet, but the more that we experiment with these different models, the more options I think it's going to open. As people realize, ok, this didn't break anyone and yeah, we're any laws flagrantly broken. We can pull this off and do cool shit.

Speaker 2: 29:32

Yeah, awesome. Speaking of different models, I'm going to take a hard left and take it back to to my beloved category of beverage. And there's news I don't know if everyone saw it, but Tilray, the Canadian publicly traded company, purchased eight brands from from AB and Bev, and it's I don't know, it just sounds like such a power move, like for like for cannabis, to be purchasing acquiring brands from from a major beer company, and we're talking a deal that was, I think, eighty four, eighty five million dollars from AB and Bev, and so the the brands that they got were Shocktop, breckenridge Brewery, blue Point Brewing Company, ten Bale Brewing Company, red Hook Brewery, widmer Brothers Brewing Square, miles Cider Company and Highball Energy, and so they are continuing to build out this diversified portfolio, which is quite impressive. I think beer and alcohol now makes up 30 percent of their portfolio. Plus, they have their medical cannabis inside and out of Canada, canada and and, of course, the recreational.

Speaker 1: 30:49

Looking at this list, Red Hook, Widmer and Highball are all brands that I would recognize. Yeah yeah, strong, strong recognition on the consumer side. So well it adds.

Speaker 2: 31:03

It adds to their their sweet water, montauk and in green flash as well. So it's like they're really going for it and the cool thing here is that I mean, look at that lineup, that's that. That's quite a portfolio. But I think this is where where the rubber really hits. The road is that they're building out a distribution network throughout the US and, and when the opportunity comes to integrate the beverage category with their cannabis category, they're going to be set up to really quickly get distribution. And when, that is only time will tell. It's going to be a while. I hope they're patient. I hope they are able to remain profitable throughout that time point.

Speaker 2: 31:49

But the Irwin Simon they're their CEO here. They have a great video and shout out to Dytron highly objective, highly recommended Subscribe to the newsletter. He just does an incredible job of diving into a lot of these things. But in this interview on CNBC their CEO very clearly states is like when the US legalizes, there's no reason we couldn't put weed into any one of these beverage brands. And so just like a really kind of high level strategy coming from a really big brand out of Canada. I don't know, I'm kind of here for it. I think it's super interesting.

Speaker 1: 32:30

Well, certainly, like on the back of the discussion about beverage, I can see why you're here for it and it gets me thinking, looking at that map that you showed about this national distribution network, because while Irwin Simon might have said when and if federal policy change happens, there are still right now a lot of beverages that are legally including different hemp-based cannabinoids into their beverages pretty successfully. And how long until Ray gets into that game. If they want to talk about it, they should give us a call, Irwin Simon, come on, talk to us about it, we might have some conversations already going.

Speaker 1: 33:23

That's as much as I can say no.

Speaker 2: 33:28

There's a lot of interest, this hemp-derived cannabinoid space. We're definitely going to have an episode about this in the coming weeks, but it is really unlocking a lot of interesting conversations. There's so much activity in it and I'm going to set aside the kind of moralistic advocacy license business perspective right now because that is fraught with just a lot of emotion and valid counterpoints. However, on the hemp side of the business, just nothing has been really shutting it down, and so it's just kind of proliferating, those hundreds of brands now producing in Minnesota, outside of Minnesota, shipping around the United States and, frankly, getting access to a consumer base that just wasn't in the dispensaries. And so we have very big brands reaching out to us like can you educate us on this? What are people doing? And so there's a lot of curiosity from the bigger players about getting involved.

Speaker 1: 34:29

Yeah, I mean just to put some comedy on it all, but a lot of it has to do with the Farm Bill and what the Farm Bill allows or doesn't and what the loopholes are. And so I recently Jordan Zager is one of my clients and a wonderful colleague and friend, super smart PhD and he and I were talking about will the loopholes be filled or closed in the Farm Bill, and he thinks that they will and I think that they won't, and so we made a friendly bet on a case of avocados.

Speaker 1: 35:04

So if anybody wants to get in on this, depending on if the loopholes in the Farm Bill for hemp derived cannabinoids shifts, I might owe someone a case of avocados or someone might owe me a case of avocados. So if you'd like to join me in that bet, you let me know.

Speaker 2: 35:23

Who wins? If it's like a big nothing burger, if it just like that's me?

Speaker 1: 35:28

I get the case of avocados. If it's a nothing burger All right.

Speaker 2: 35:31

So if it's like status quo, nothing changes yes, I mean I'm just gonna. It'll be like a depressed laugh, but like if the whole hemp section just remains the absolute same and everything else changes. That would be one of the most comical jokes that I've had in years. Yeah.

Speaker 1: 35:52

I mean, I think and you're right, we are gonna talk about this in more depth, because it's so true that there are consumers that are finding their way to exploring cannabinoids that are outside the dispensaries, and I'm there for that. I like the idea of people having access to most things honestly and at the same time, as a person that has lobbied, built and invested my career in legal cannabis, it's hard to not be frustrated that not every thief seems like they're playing by the same rules, and that's, I think, where the rub is.

Speaker 2: 36:36

Yeah, but it's really tough and we have exposure to a lot. We have exposure to people that are very much rooted in the legal cannabis market. We have people that are rooted in hemp, cbd, and then we have the people that have kind of crossed over the two and ended up in this realm and it's like, depending on where you started, it's really affecting your growth mindset and your ability to kind of leverage a multitude of different markets. And so it's like I think people on the low-dose hemp side like, well, nothing's stopping you from coming in and joining us. Water's warm, jump in. And I get why some people don't. There are, for a lot of the equity applicants, for instance, there are people that are formerly incarcerated. They don't want to do something that is in the gray area for the fear of potentially going back to jail Like that would be tragic. So it's a very tough conversation. We'll kind of like maybe put a pin in it so that we can revisit it with, maybe someone with a little bit more expertise.

Speaker 1: 37:45

Yeah, yeah, I think that makes sense, but we're going to keep talking about it because it matters to everyone that's participating in this space. I think, like maybe just to put that pin in it I think that one of the reasons why people care so much is that, even though I said earlier that so many businesses in cannabis are starting to become more mature, like we are, still this culture of people that are building and when you're building something, like a parent, I think of it like the mom of air and me, like you got to protect what you're building, not to protect your baby that business. And it feels like I think for a lot of businesses, whether you're on the hemp side or you're on the legal cannabis, thc side, that these other businesses are coming for your business and so our natural instinct is to become defensive against that, and I'm all for a clear path forward for everyone.

Speaker 2: 38:44

Yeah, I don't know about clear path. I don't know if we're going to get that because.

Speaker 2: 38:50

I've often equated our journey to being like Indiana Jones in the top of the doom and you're like jumping from rock to the next as it like falls away and you're grabbing onto one hand hold, thinking it's a solid hold, and then it breaks free. But the goal is to get out of that damn cave and slide under the door at the last minute and with the golden arc or whatever it is, I'm not that big of an Indiana Jones fan. I've taken this analogy too far.

Speaker 1: 39:20

I can't meet you there, but yeah, I believe you.

Speaker 2: 39:23

Yeah, well, yeah, sorry, I'm about to go on like a complete tangent of like AI and CGI and Harrison Ford, so we'll just that's for another day. Anyways, getting back to what we were talking about, you know, let's take it back to Tilray for a second. Like they are representative of, like this very large organization thinking of something very differently compared to most cannabis companies, ourselves included, right, and that's kind of a privilege that these very large companies could do, whether it's a Canadian publicly traded company like Tilray, which we've seen several perish along the way, so I hope they actually have some staying power. But also kind of like the big brands outside of the space looking in. You know, we all remember that constellation put in their $4 billion chip and didn't go so well, but they're still around, they're still kicking and I'm sure they'd still take the opportunity to come in and own their chunk of the space. Same with Altria and a number of others.

Speaker 2: 40:29

And so Mark Houser and I found this through our friend Jeremy Burke and his Distribute. What do you call Jeremy's thing? It's like he started his own sub stack Sub stack, that's what it's called, and it's called Cultivated. Definitely check it out, cultivatednews, but he was reposting this article by Mark Houser, who's a former attorney, now strategist, in his listing called Cannabis Musings, and he just really talks about this hourglass concept where the industry will largely gravitate to this world of having very large CPG umbrellas and then a lot of smaller operators with a lot less kind of notable in between.

Speaker 2: 41:23

And so I think what he goes on to say here is that you know, this is very indicative of pretty much every CPG market. You know you have, you know the large beer companies AB and BEV, you know Heineken and that kind of stuff, and then you have a lot of craft beers that come in and hope to get acquired by these big companies. I don't know about cigarettes anymore. I did just read. I just I know there's big cigarette companies. I also read that cannabis has surpassed the number of regular consumers when it comes to cigarettes, which is I don't like being compared to cigarettes, but I think it is like an interesting social topic.

Speaker 1: 42:03

Yeah, yeah Well so I think that the marks on doesn't thing with this hourglass and, and to circle it back to Tilray, I think that it is interesting and unique to see what Tilray is doing, but I think that it also can't be forgotten that Tilray has not been able to execute and win in cannabis and in Canada, and it has been a pretty shitty market.

Speaker 1: 42:29

It's been years of shitty performance and losses, but they've continued to have a pretty large cash reserve and and so it really puts them in a position, because of their balance sheet, to have the privilege to try to figure out alternative and creative ways to stay relevant and to not to not crash their ship, which, you know, if you've been reading analysts, takes on Tilray for the past 10, 15 quarters. It hasn't looked very good for a long time.

Speaker 1: 43:02

And so these guys have that privilege because they sit at the top of that hourglass that they have a balance that gives them the opportunity to roll up brands and to create a more multi category portfolio of brands, which is what we're seeing and and, yeah, cannabis is going that direction. It already has and it's just going to just going to keep. It's just going to keep going in that direction and I think, as things get tougher, we're seeing more small companies come together to be a part of a bigger company in order to scale efficiency and and be able to kind of weather the storm.

Speaker 2: 43:42

Yeah, very good. Well, that about covers it on the news articles that's popped into my purview this past week. It's good to reconnect with you. We don't have a guest today, but I want to give an opportunity to kind of do a last call, like what's been top of mind for you? What's? Yeah, I don't know what have you been thinking about lately? I know we were talking about this thing called, like tea breaks or tea bills.

Speaker 1: 44:09

I don't know if it was an investment thing or a yes, I, yeah, yeah, I'll do my last call on tea breaks, I guess. I just I'm curious if people have taken them. So tea breaks is a tolerance break, is what it stands for, and I've seen just a lot of musings about folks that are talking about taking them.

Speaker 1: 44:29

basically, like taking a break of some amount, be it seven days or 30 days, or a couple months or something from cannabis, if you've been a regular cannabis consumer, and while I've certainly like taken breaks over the years, I haven't done it in a way that has been like all right. This is going to be a 30 day tea break and I've been thinking about it just because I think that I want to experiment, see if, maybe, if, after taking a break, that I'll have a different experience. Coming back to cannabis and that's what I've heard other people's experiences is, after taking a break, maybe they feel the effects differently or being more drawn to some different form factor. So I'm curious if you have taken a tea break, let me know.

Speaker 2: 45:17

And if you have opinions about tea breaks.

Speaker 1: 45:20

I'm curious to hear.

Speaker 2: 45:22

Yeah, I mean I do have opinions, like most things. If you ask my wife too, too many. Personally, I need to take less tea breaks because I'm still eight years in the industry and I'm like very good with like five milligrams of an infused product. So it's kind of shameful to be such a lightweight when I am trying to consume as many of the products that we help create as possible.

Speaker 1: 45:48

Oh yeah, I've got to put up that tolerance, which is the opposite.

Speaker 2: 45:51

I do and I try. It's just it's a gift really. I'm a cheap date, with what it comes down to, because we all know these, these dispensary prices are can't can break the bank. It was funny. I actually I went to a dispensary the other day and I was stocking up for a party infused beverages, of course, but I bought $350 worth of infused beverages and it was just like I had this like little mountain set up at the at the register, and once I got over the pain of handing over that much cash to someone I was very excited about like how much product I was like carrying home and like what I was going to be able to display for everyone. So that was exciting. But back to your topic, adelia Carrillo. Do you know her? She's, I know she. She's been with event high for some time. Yeah, and she runs the brunch, the women's brunch.

Speaker 1: 46:50

One brunch, that's right, one brunch.

Speaker 2: 46:52

Yeah, anyways, I've known her in the industry.

Speaker 2: 46:55

She had she used to have a media startup of her own in the space, but she posted recently about a tea break that she took and it was really interesting to hear her perspective on it because she talked about regaining kind of mental clarity and some energy that she didn't realize that she was kind of missing. So there was that benefit. But then she also described like how her ADHD kind of really came back in full force and like there was certainly that trade off. But you know, just alone, and I don't remember if there was a necessarily a conclusion about what it might change. But having that healthy understanding of how it is affecting you is important in knowing that it's like, oh, it's like you are making that, that, that decision, it's like it is worth the trade off because there are potentially it's not a, it's it's not all roses and sunshine when it comes to consumption, and you know we've seen more extreme cases. Oh Christ, I'm forgetting what what it's called like that that condition that people are, are are starting to realize is what's that?

Speaker 1: 48:13

the barfing syndrome?

Speaker 2: 48:14

Yes, the barfing thing. That's the technical term, I think. But yeah, so it's just. It is an interesting concept but if for anything, I do find that people's tolerance is kind of reset pretty quickly and I've had employees that have just decided that they aren't going to go back to to consuming as much because they like it but they don't like the, the extensive side effects of like the more chronic or or constant consumption.

Speaker 1: 48:46

Sure, yeah, well, I'll let you guys know if I decide to do it At this point. I'm not there yet. I love my. I love my cannabis, but I might take a break. We'll see what happens, yeah well, you got.

Speaker 2: 48:58

You got to wait till after next week because we are having our anniversary party in Berkeley. Yeah, if for some reason you're watching this you haven't received an invite, reach out to me. It's going to be a blast. I like a good party, so there'll be a lot of infused beverages.

Speaker 1: 49:14

And I think the other thing was worth mentioning is that we are really picked up with our content calendar and have been talking to some exciting, super smart, super engaging guests that we're going to be bringing to you guys on Thursdays. So, yeah, watch, watch the channels to to hear about when those events are going to be happening, and we'll be posting the recordings afterwards so that they can live on and be listened to and enjoy later so hopefully all the topics that are on your minds.

Speaker 2: 49:50

I'm super excited about this, like we've. We acknowledge that it's kind of been fits and starts and kind of not as predictable about, like when we're going to release stuff. That's not the intention, but we have just been getting it going and forcing ourselves to get on here. We came out of the club, we came out with a bang. We had, you know, christie and Jake come on for our first episode, followed by Kershid, who has just dropped a ton of knowledge on the policy side. But continuing that, that, that that quality of guest, is kind of really been been our focus. We have a great lineup over the next three months and our goal is to bring this to the audience every week. And so we're. It's going. I mean, the calendar is filling up, so now we're committed bad back or not, like we're going to be on the air. So, um, yeah, yeah, stay tuned.

Speaker 2: 50:51

So, all righty. Well, as we wrap up, what's that?

Speaker 1: 50:57

Why don't you read us out? I think we're done.

Speaker 2: 50:59

Yeah, yeah, okay, all right, oh, there we go. I just maximized and, yeah, I'm going to read. So, as we wrap up, remember that the dialogue doesn't have to end here. We invite you to continue these conversations and we'd love to hear your thoughts and reflections and, you know, if you know, if you, if there's someone you'd like to see on the show, or or or topics that you'd like us to cover, please don't hesitate to to drop a comment or or a message, or or whatever it is. We're going to try our hardest to bring the best conversations to you right here and keep it as live and unfiltered as possible, unscripted, but we are immensely grateful to have you as our audience, our community supporting us, listening here, joining the conversation. If you've enjoyed this episode, please, please, like, subscribe and share high spirits with your colleagues, friends, heck, your family as we send you off, remember to always stay curious, stay informed and, most importantly, keep your, keep your spirits high Until next time. This has been high spirits. We'll see you soon.

Speaker 1: 52:18

Bye everyone.