#027 - Corporate Responsibility, Expungement, and the New Jersey Update w/ Chirali Patel

Speaker 1: 0:00

Hey everybody, welcome to High Spirits. I'm Ben Larson and, as always, I'm joined today by my smarter half, anna Rae Grabstein. It's Thursday, january 18th. Hey, that's my birthday 2024. And we have an incredible show for you today. I'm super excited. We're going to be diving into the alphabet soup of DEI, esg, csr with MSOs. It's going to be great. We'll unpack what all of that means and a little bit of an update from New Jersey. But before we get there, let me check in with my co-host with the most Anna Rae, how's your week going?

Speaker 2: 0:42

So good. Happy birthday, Ben. Thank you. I feel so glad that you decided to record with us, even though it's your birthday. So just to everyone out there, ben is committed. We should all wish him Unmitted Great, freaking year. I think this is going to be a good one for you. And yeah, just happy birthday, huge.

Speaker 1: 1:05

Thank you. I met what I said and I said what I meant last. Sorry, I've been reading too much Dr Seuss with the kids Last week. I really do want to achieve 52 episodes this year with you and I want to do it live on Thursdays. Come hell or high water, yeah, here we are.

Speaker 2: 1:24

Well, yes. So if you've asked me how this week has been going, it's been really good. I am starting to work on some new projects, doing some stuff in the tech space, which is really fun and just overall, like cannabis in 2024 is starting the year off more optimistically I can't say that enough and I'm really hopeful and inspired by the folks that are starting the year off strong and just executing, planning and going for it, and I hope everyone is inspired to just focus and do, just get doing. That's what it's about.

Speaker 1: 2:05

Get doing. I love it. Yeah, and I'm feeling this similar momentum. You know many of the people coming back from the holidays like just guns ablazing. It's been really refreshing. And then we have a bunch of legislative sessions and government bodies, like heating back up in New Jersey notwithstanding. So I'm sure there's going to be much to talk about in the coming months, especially as the recurring topic of the intersection of cannabis and hemp that keeps coming up. I think it's going to get pretty toasty in here by mid-February.

Speaker 2: 2:41

Seriously, yeah, really wild. And I think there's other stuff cooking too. It's not just cannabis. Like 2024 is going to be a year filled with a lot of politics. We just had the Iowa caucuses this week for the Republicans, and I think that it's hard to predict how the intersection of the business environment and politics come together, but they inevitably do, and the way that cannabis policy is going to be either pushed forward or slowed down, I think, will have a lot to do with what's going on politically, and that will trickle down to what all of us are encountering in our day-to-day challenges and opportunities working in the industry.

Speaker 1: 3:29

There's certainly no shortage of those. Absolutely. Let's bring on our guest. I know she works with a lot of different companies, helping them through some of the hurdles that they might be facing. Yeah, I'll get this up.

Speaker 2: 3:41

So our guest today is Sherale Patel, and Sherale Patel and I met each other about two years ago because we shared a client.

Speaker 2: 3:50

So shout out to Lady L Cannabis in New Jersey, lily Holland, who is just an amazing entrepreneur in New Jersey who hired me to help her with startup advising and licensing, and Sherale was her lawyer. And so Sherale and I got to know each other that way, and as I started to peel back the layers of who Sherale is, I just became more and more curious. Sherale is the founder of Blaze Responsibly, which is a CSR, dei equity expungement initiative, where she's working in the community doing impact work. She also is the managing partner and founder of Blaze Law Firm, where she represents the cannabis industry in New Jersey. She's an adjunct professor at Rutgers Law School and she is New Jersey Cannabis Insider's 2023 community game changer of the year. So she is a total badass and I can't wait to do more with her, not just on this podcast but in general, because she is a force to be reckoned with in New Jersey and, I think, to keep spreading her wings and making an impact in the industry overall. So super excited to have you here, sherale, welcome.

Speaker 3: 5:11

Thank you so much for that kind introduction. It's an honor to be here.

Speaker 1: 5:15

And thanks for taking the time. You seemingly have a packed schedule I think we all have been guilty of, but yeah, I really, really appreciate you taking the time with us today.

Speaker 3: 5:28

I'm happy to be here. Thank you and happy birthday.

Speaker 1: 5:30

Oh, thank you, that doesn't get old.

Speaker 2: 5:35

So, sherale, I want to talk about expungement first. I think there's so many things that we could talk about, but will you just take the mic and tell us a little bit about the expungement work that you're doing, and then we'll go in there.

Speaker 3: 5:55

So it's been a little bit over a year. I would say that the Expungement Clinics throughout the state of New Jersey haven't happened through Blazor's responsibility, like you mentioned, and it really came about through some. Well, the company itself was personal very much, having gone through things, having had loved ones gone through the system and had records that prevented them from moving forward in life or maybe the same way that they had expected to in like minor records for a joint, you know, mere possession, not getting a job, and then the fact that it stayed on your record for so many years that it followed you, that by that point maybe you know I'm not going to say it was too late, but for some people it was too late because five years is a long time to get your record removed, a minor record and then by that point opportunities may have been lost. And so when I had conversations and I have to give credit to the companies that are helping me do this work, because it's definitely not mine only, but companies like Ascend Wellness, aware Wellness and WANA Brands decided that we're going to put our dollars where it matters and really help individuals and communities that have been impacted. And while we didn't arrest these people. We're not the reason that these people have records. We're going to make sure that some of our dollars can go back and helping them so that they can get jobs in the cannabis industry and not everybody needs to be.

Speaker 3: 7:18

I think some people I've had actually some people come and say, like does this really matter? Like why are cannabis companies having to do this stuff? And it's like you know it's not, it has nothing to do with legalizations. Like, actually it does, because the individuals that were cannabis used to criminalize people pre legalization and it was such a minor way I call it a gateway into the criminal justice system, because you can start with such a low level offense and then it builds and it builds and it builds because that's just how it was utilized. And so I do think that helping clear these records is a real component to corporate social responsibility with these cannabis companies.

Speaker 3: 7:56

And so San Wellness, air Wellness, wana Brands, we decided let's go into impact zones in the state Newark, camden, where we know there is high arrest and people who may not have the resources to legal help to get these expungements done for free, because the average attorney will quote you anywhere from a thousand to $2,000.

Speaker 3: 8:15

And that could be cost prohibitive for a lot of people.

Speaker 3: 8:18

And so what started as myself and other attorneys getting together one, you know, one weekend a month doing an expungement clinic and helping people is now, a year, a year plus later, turned into like a whole community event where we've added other nonprofit organizations that could help with food insecurity.

Speaker 3: 8:39

We've had Boost Mobile come out to the last two clinics that gave people who were on food stamps or Medicaid free, free laptops, free internet access, and so now it's become more of a holistic approach and from because it's the expungements was one part of it and then the other part every I'd say at least 90% of people that were coming to these clinics. They're like super grateful that they were able to take this first step. And then it was like, well, I need a job, I need a better job from where I am, I need a better situation or I need help with X, y or Z, and that's how I think we've been able to kind of scale it so that we can add more partners, add more resources, so it really benefits the community. The expungements was just the, not the easiest, but it was just the.

Speaker 1: 9:21

It was just the biggest issue that I saw that was preventing people from excelling and getting ahead, because it's just like it's paper shackles essentially yeah, and we've talked about in the past about how the headline getters from the federal government when they release, you know, or the expunge federal records and how minimally impactful that is, because a lot of these records are at the state level for minor infractions, right Before we dive deeper into expungement. You said corporate social responsibility. That's CSR. It's like you know one of the words or one of the acronyms that I mentioned in the beginning. Can you just briefly kind of define for us, like what CSR is, how some of these larger MSOs you mentioned Wana and Ascend and how are they thinking about CSR is? Are they baking in as a program and into their, their operating plan? Yeah, what can we anticipate there?

Speaker 3: 10:24

Yeah, I think for me, CSR is it's bridging the gap between the MSO or the conglomerate, the corporate, and the community. And I think these companies are thinking is that we were going into states, legalized states, that are used to prohibition the community, and then the culture is used to Getting their, their medicine or their cannabis from select individuals, select communities. And now they're coming in and they're like Okay, we're here, you know, and it's like let's, it disrupts the status quo a little bit. And so then there could it could leave a negative taste in the community's mouth and for these businesses, they have a vested interest in making sure that they get by and from the community because they want to integrate and not overtake. I think that's the right way, at least that these companies like Ascend and air are thinking about it. And so they're saying what does we're coming into New Jersey? What do you?

Speaker 3: 11:18

Literally the conversations they had with me where what do the residents in New Jersey need? Is it expungements, is it education, is it food security issues, and how can we help? And they went through and they vetted organizations in the state to see how can we partner up. Because it wasn't like, hey, we're here, let's just Build a team and like have them execute things. It's let's find the people or the organizations that are already doing impactful work and then let's Give them the power and the resources to continue doing that work, and so I think that's the best part. It's like it's coming in and understanding what the market needs are and what the community needs are, and then employing the dollars and the resources to do that. I think that's corporate social responsibility. It's knowing, knowing your home.

Speaker 2: 12:02

Essentially, yeah so in it was, I think, last week or the week before Scott Galloway, who is famously has the pivot podcast and is an economy professor, economics professor, nyu, marketing and things like that, but I I listened to him endlessly. He's someone that I really respect, but he was talking about DEI, diversity, equity and inclusion, but looping it, really connecting it with corporate social responsibility, and he said that in 2023 we reached peak DEI and he started talking about how folks like Elon Musk and other public figures are starting to really question the validity of companies investments in social good and in social impact. And I read a response to To this perspective and this attitude that that really, just like everything else in business, we need to constantly be innovating and changing and adapting and pivoting into the way that we make impacts, and that 2023 was maybe the year for peak internal CSR and DEI initiatives and companies. And that 2024 is actually going to be about working externally, outside of companies, with specialists who can actually do implementation work. And it occurs to me that what you are talking about that you're doing with blaze Responsibly in terms of partnering with can existing cannabis companies to help them execute social impact work is Is just that it's instead of Ascend or air or wanna, saying we're gonna build the CSR team internally and we're gonna put on expungement clinics.

Speaker 2: 13:51

They're saying, actually, we're gonna work with shiralee and a whole bunch of lawyers that actually know how to do this and we're gonna fund their work. And wondering if you could speak to that in terms of if you're seeing, if you're seeing smaller impact teams inside of cannabis companies and but if if you're, if you're still seeing a commitment to impact, why not?

Speaker 3: 14:14

yeah, I think I'm definitely seeing the, the companies that are doing it right with smaller companies, with smaller impact teams, because you to your point, it's about partnering up with the right organizations, and DEI can look exactly like this which is blaze responsibly is a certified woman and minority owned company in New Jersey.

Speaker 3: 14:33

So now those companies can say we partner and we work with a minority and women owned company, and then the nonprofits that we partner up with or the other organizations they have similar Qualifications or certifications, and so I think it ties in and it's an external approach Compared to internal, because I think that's where a lot of the fluff came from, like let's just hire somebody and let's just say we're gonna do this, or my favorite, let's just do a roundup program, and then everything goes there and it's like that's great, but that's not your money, the company's money, that's the community's money investing into this roundup program of yours, and so I think that Explain what around we're gonna see Right, so when you go, so when you go to a dispensary, for example, if you're you know purchase was $9.50, you can round up another 50 cents and support One of their causes that they might be promoting at any given time, and I think that's great and it's a great way for that company to get that end organization to get additional funds.

Speaker 3: 15:29

But I think that's like the easiest thing for these companies to do and it's not as genuine.

Speaker 1: 15:35

My not look is authentic actually I heard recently it's like those programs, like the way that the cash flows. It allows the companies to take a huge tax deductible write-off when they make those contributions on behalf of the community. That's been contributing. Just really interesting anecdote.

Speaker 3: 15:56

Well, exactly, it helps their bottom line and I think it. I think it's and I keep feeling like I'm plugging these specific companies, but it's because I do want the community to know I'm an LLC, so the work that I get paid for by air wellness, ascend and wine brands and cookie social impact, that's not a tax write-off for them. These, these are dollars that they're actively saying we want to spend. The ROI May not look the same as it might, you know, for other contributions, but it's worth it for us and these companies have renewed their, their investment by continuing the work. I just did an expungement clinic this on MLK day on Monday, with air wellness, and so we're kicking off 2024 with this initiative and we're gonna expand it to do more expungement clinics, obviously because now the word of mouth is so strong and I think that's the ROI that you can't buy.

Speaker 3: 16:46

It's that good, good PR, and you don't need to pay for this PR technically in the same way, in the traditional way, and I think that's part of CSR too. It's like how do you get genuine goodwill in the community? Because now they're gonna be loyal to you, they're gonna want to come shop with you, they're gonna want to come learn more about your company and at a bare minimum. Like I know, we've done our clinics in communities where they didn't even know Cannabis was legal. They had no clue that these companies even existed or that there was a retail shop that they could even go to. Now at least they can go back and say this company actually helped me clear my record and I can progress because of them, and that's gonna leave a positive light and so, I think, a benefit I look at as a triple win for the operator, the state and the community.

Speaker 2: 17:29

So expungement is clearing clearing your record and you know cannabis laws have changed and so it makes sense to go and clear these can these cannabis infractions that are on people's records. Is that a temporary, short-term need and that eventually all of the expungements will be good done and this work will need to change? How do you see that? I'm so glad you brought that up.

Speaker 3: 17:56

So every state does do it differently and in New Jersey, when we legalize, there was the decriminalization bill and there was Court orders put in place that had automatic expungements for select types of convictions. So low-level conviction convictions, for the most part possession or paraphernalia charges, those were going to be subject to automatic expungement and I think we hit To date probably over 600,000 of those cases. There's well over a million. And here here's where the universe gets lost. If you had a possession charge Plus another charge which with it that was not marijuana related, then you didn't qualify for an expungement. It had to be that charge as a standalone charge. So a lot of times you might not have just had that one low-level offense. You might have had it. The cop might have wrote you another ticket for another citation. So now you thought your record might have been qualified for an automatic expungement but it's actually not, because you had gotten charged with another conviction on that day.

Speaker 1: 18:53

So like a, like a traffic ticket or something like that.

Speaker 3: 18:57

Something or the other. That would be a violation, like even another a criminal. It would be in a criminal context. Gotcha, if you might have had like a hypodermic needle on you, for example, along with the cannabis, that's probably you're not going to be qualified for that automatic expungement because you had another charge that was not related to those Expungible charges. So you do miss a universe of people.

Speaker 3: 19:22

And then the reality is for our clinics we never focus on just cannabis related convictions. It was any conviction that was eligible for an expungement. In the state of New Jersey there were organizations and groups that were focusing just on cannabis. But having done these clinics month after month, I I don't think I've had a single person that's come in with just a marijuana conviction on their record. That is very I mean it. Just it has not happened because, like to the point that I was making earlier, once you get a charge You're more prone to getting another because you're in that system now, or it just and you're and, or you might be targeted more because you have this record but having just the cannabis ones.

Speaker 3: 20:05

And then the other problem was when we did automatic expungements they didn't make the process easy for you to find out. Did you actually get an automatic expungement? You have to go to Trent and physically present yourself so that they can confirm your identity and then you can get proof of this order that you actually received an expungement. So we have a lot of. We do have people who come to our clinics to to find out hey, can I find out if my record got expunged because I only had this marijuana conviction? And then when they come and we see in the you know database you know you actually don't have a record. It looks like it got taken care of. You're good to go. So we do have people coming to confirm, but I don't think it's going to be something that's going to become obsolete, because people are always going to have records and the and the type of work we're focusing on and the people. They're not just cannabis charges only.

Speaker 1: 20:52

On on average when someone comes to you how, how involved is, how long is that process to go through expungement? How costly is it like if we were to fix like a dollar amount. Like you know you're going to an MSO, like we want to target releasing you know 100 people, or releasing 100 people's records yeah, what's? What's the impact of that?

Speaker 3: 21:17

So the beauty of what we do is we don't tie it to a single individual. We say we're going to do clinics, we're going to do, you know, in these areas, this many hours. As many people that can come during this set of hours are the people that we're going to help. But as far as our lowest clinics, you know, we'll see like 30 people in attendance. For example, if you take 30 people and you do an average of $1,000 per expungement, that's $30,000 of impact that you've spent. But they've spent less than half of that. For example, the company itself has actually spent less than half of that to be able to produce this. So their dollars are going a long way and the impact is much longer because, just because of the sheer cost Like it's robust and the give back, I think that we've had.

Speaker 3: 22:04

The good thing that we've implemented is getting testimonials from folks, because a lot of people come and they can't believe it's real, because the process as far as when they come to us we do an intake to make sure they're eligible, they come to the clinic, they wait maybe 30 minutes on average to meet with one of the attorneys and who then walks them through the filing process and does it for them on the spot within 20 minutes.

Speaker 3: 22:26

Once that's filed, we follow up with the courts to make sure that it went through, communicate with them after the fact, and so they get cared throughout the process. But then, when they give us the feedback in the form of testimonials, now these companies can go back and show their CEOs and show their teams like guys, this is where our dollars went. Like this we have a grown. We have a 65 year old man crying because we helped him clear his record and now he can go and do youth coaching that he was prevented from a record 30 years ago Because sometimes people just they're like we'll get to it and then we forget about it, or they're just embarrassed to deal with it, and then we have a lot of that and so we're trying to reduce the stigma around a record in general, whether it's cannabis related or not, it's just I think that people make mistakes and that should be in the past.

Speaker 3: 23:07

If you're here trying to better yourselves, we're going to help you do it, and I'm definitely grateful to have companies that can support this type of work.

Speaker 1: 23:15

Amazing.

Speaker 2: 23:16

I love that. I just got chills and I think what you just said like showing up and wanting to better yourself is something that's pretty undeniable. So I just yeah, thank you so much for being a leader in this area. It's a real inspiration to me and I think that I hope that it's an inspiration to all companies that are operating in this space to think about how they can really widen their own impact by supporting people getting their records expunged.

Speaker 2: 23:49

It's really important work, thank you, you started doing this in New Jersey and I know that you're from New Jersey and your law practice is in New Jersey, but I also know some things about New Jersey law and policy and I think that New Jersey has created a very ripe environment for this type of work to exist, and part of that is because there is a requirement for community plans as part of licensing. I'm wondering if you could start start like teasing us a little bit about New Jersey and and in your work, I know, in licensing and in creation of the market there of like how this, how this has created this, this ecosystem that that fosters the work that you're doing.

Speaker 3: 24:37

Thank you, and I do think that this state is creating some accountability. And so to to your point with new licenses now that they've been open for two years now. But part of getting your license requires you to submit to the state of New Jersey, the Cannabis Regulatory Commission, a community impact plan and social responsibility statement. It's not a long plan, it's two pages, but that's the state requirement. And then, when you have to get local approval majorities, municipalities are requiring a separate community impact plan and really diving deep into what are you doing for our town, what's the give back, what's the percentage of local employees, local residents that you're going to be employing in your operations? And so I think the municipality and the state are holding applicants and operators accountable to the community and then saying if you want to operate in our state and you want to operate in our jurisdiction, there has to be a commitment here to give back, and there it can't just be you know you're going to benefit and make money and then no one's going to. You know, read from that. And so I think that that's an ideal situation in our state.

Speaker 3: 25:40

They haven't. They've teased at this idea, but it's not fully released yet, but it's the idea of like a report card, essentially for operators. And so, just like when you go to a restaurant, there's a grade like satisfactory, excellent operators are not going to be graded on how great they are, and so it's, and it's going to be on different categories on criminal justice, on medical you know, do you have access for medical patients catering to them? Different environmental initiatives, so all these different initiatives and categories, and then, depending on the work that you're doing, you're going to get a grade. And I think that's amazing because now the consumers can see, wow, this company's really invested in this is where they're spending their money, versus a company that might have a ton of money. But then you look at it and you're like, well, they've got a D, and I wonder why they got a D.

Speaker 3: 26:25

And now I think that's going to hold the industry accountable to one another and to the community, because this plants all about that and I that's the optimism me that I really feel like the plant can filter out the bad and the people that are doing it for the wrong reasons, because I just, I don't know. I feel like this there's enough out there for everybody. There's just so many pieces to this plant where I don't think it has to be controlled by select few. And so I think when you give transparency to the industry by holding them accountable to all these different initiatives, it helps level out the playing field to see who's authentic and who isn't. And so I think that, and that's why this type of work is only going to flourish and continue, and it has to grow because it's embedded as part of the requirements to be not only to get your license, but to stay operational.

Speaker 1: 27:14

And I think that's that's a really innovative and cool way to approach it that you know we see so many municipalities, states, often virtue signal their support for social equity and impact and you know the I think we have all seen kind of these broken. You know licensing structures. You know we've talked about New York endlessly and how they kind of just completely abandoned a program that they were working on. But to actually create some social capital around being a responsibly acting company and creating the frameworks that actually promote action Right, so really excited. What are some of the mechanisms for getting that actually put into place? How soon might we see that in the market?

Speaker 3: 28:10

I'm hoping by the summer of this year, and specifically the Office of Diversity and Inclusion has been talking about it for months now. But I think it's just a matter of getting the different criteria fleshed out enough, because it can't just be bucket, it can't just be broad like, hey, let's just, you know, let's keep criminal justice, for example, as an initiative. It actually has to be. If they're doing, let's say, four to six expungements, that's going to be worth X points. So we have to qualify all of these different, I think, criterias for it to make sense as to why they're getting graded a certain way, so that it's not just arbitrary and out there.

Speaker 3: 28:47

I think there's a lot of that happening with these application scoring already. So the last thing I think they need is to have a scoring mechanism that's not based on some objective factors. I think that's what's been taking time is to figure out how to do it the right way. But I think I'm hoping by the summer of this year we'll see it, because now we're. Now we're well into the not well still infancy stages to a degree of the market, but we're getting into it where we need that level of accountability before it gets really crazy.

Speaker 1: 29:17

Yeah, can we dive in a little bit into just the broader kind of state of the market is like you know what, where are we at? You know what's access to retailers? Like you know what's the breadth of products that we're seeing in the market. You know, do we have beverages yet Selfishly, yeah, yeah.

Speaker 3: 29:37

So we as a, we just had a CRC meeting yesterday and so they did put out some new numbers. But we're at over 90 dispensaries in the state of New Jersey, which might sound like a lot. But 10 million, just about a 10 million population, it's not too many, but we have 21 counties and I think there's 20 counties that are represented, so it is fairly dispersed throughout the state of New Jersey. Our state's probably like from top to bottom, like a four hour max drive. I would say so just to give an idea. Those of the 90 that are operational retail, there is a mix of medical only, medical end adult use and then just adult use only, and that's just because of the way we've had licenses roll out in the past few years. So there's a blended mix of those. And then we have cultivators that are operational. 12 of the largest ones that are operational are primarily MSOs, multi-state operators, and then some of the newer ones that have been licensed. I think two are now operational. The others are in the process of getting built out and or coming to, you know, coming to market. Same goes for manufacturers. We're seeing a lot of licensing deals happen in their state. So we've seen brands that are in other Ms Grass, for example, edie Parker we've seen a lot of those types of licensing deals happen WANA brands, so they might not have a license in our state but we're seeing those products.

Speaker 3: 30:57

We do not have beverages yet. We don't have baked goods yet. We don't have the amazing edibles because our rules are not. So we have a waiver in place. So let me take that back. We don't have finalized, we have manufacturing rules, but we don't have flushed out rules for actual baked goods and beverages to be produced at scale.

Speaker 3: 31:20

However, the CRC is giving manufacturers like a waiver form, essentially a process. So if you submit your formula, you tell them how you're doing the product and there's a couple of other criteria that's involved in this. But the CRC can give you a waiver and then you can produce that product and bring it to market. So there is that process in place, but we don't have the rules finalized yet to have the full scale. It's a little disappointing, but I think that's just because of where we are. We have tinctures in the market. We do have topicals very limited. So if anybody is listening that can produce topicals please, because they're a necessity. We don't have transdromal patches yet. It's primarily, it's like because it's a newer market. I'd say 75% is flower shake and then you have 25% of it be pre-rolls and concentrates and the rest.

Speaker 1: 32:11

So just to dial back really quick. Did you say 20 out of 21 counties have retail?

Speaker 3: 32:18

That's correct.

Speaker 1: 32:19

That's amazing. And where are we at? In California, I think it's still hovering around 50%, right.

Speaker 2: 32:26

Yeah, yes, it's something like that. So, yeah, that's huge. But I did pull the data. California is a huge state. Yeah, it is.

Speaker 1: 32:36

But yeah, 20 out of 21 is incredible. Like we, I would love to have that in our state.

Speaker 2: 32:42

But I think Shirali's right that, in terms of the population and how many businesses actually have applied to become operational, we're so far from seeing a mature market in New Jersey.

Speaker 2: 32:53

I pulled some of the data from that same CRC meeting that you were talking about and we have over about around 1700 conditional applications, which is sort of a preliminary step that happens in New Jersey before someone gets an annual license which means they can actually start operating, and so there's about 300 annual licenses that have been issued, 1700 conditional and of those annual licenses we think that maybe 50% of them are operational. So if less than that, and even less so if all those annual licenses become operational and then maybe a number of those conditional licenses of that 1700 group open soon, we have a whole new environment that the New Jersey cannabis industry is going to be operating in like in a pretty short amount of time. How fast do you see that shift happening? Like our businesses opening every day, like are we seeing 100 new businesses come on every month? Or is this a slow drip? What's the vibe?

Speaker 3: 34:02

I think it's going to be a little like a. It's going to be on a rolling basis. We're going to see a lot of retailers opening up I think that that's just inevitable and then the bulk of licenses happen for retailers. So that's what we see month after month openings for retail, not the case for cultivators and manufacturers. And I think it just comes to.

Speaker 3: 34:22

The reality is a lot of the real estate on this market does not have adequate, you know amps required to do these buildouts, and you're. If you need a switchboard, you're nine to 12 months out of getting an upgrade to your switchboard. That's an extensive period of time. You might have equipment that you need that's back ordered. That's going to take time, and so I think these buildouts are taking you a lot longer than anticipated because people were quick when we at least at least what I saw with you know, my firm and clients and even working at the old firm and the clients that they had access to it was a.

Speaker 3: 34:58

It was a rush to the market. Let's just grab real estate and maybe the due diligence wasn't happening there. And so I know people myself clients who won licenses in 2021 are still not operational. Yeah, whether it's funding or electric upgrades or yeah it. Just I think we're going to. It's going to take time for this market to ramp up because funding continues to be an issue and I think that the real estate here was really expensive upfront. But again, people wanted to secure their licenses and so they did what they had to do, and so now you're sitting with, you have a great piece of land and you have a great opportunity, even no money. It's a sad reality.

Speaker 2: 35:35

Yeah, and people think of New Jersey as a unlimited license market because there are no license caps at the state level. But you've reminded me in our conversations that it isn't necessarily as simple and straightforward as that and that New Jersey is a good investment opportunity because there is more limitations than people realize. Can you talk about that a little bit?

Speaker 3: 35:59

Yes, and so the reason it's been such a it's been so difficult for businesses to come operational is where I think the opportunity is because it's going to take time for our market to mature and for us to even see issues like price compression happen at least five to seven years in my opinion and it's because municipalities are already making it difficult. So of the municipalities that we do have, at least anywhere between 65 to 70% of those municipalities have opted out, still in some capacity. They just don't want cannabis businesses, and so of the ones that have opted in though, they've then created zones where they want these businesses and distance requirements. That, in effect, creates even a smaller area, and now you have to find real estate that's affordable and viable within that zone. So the market's already making it difficult.

Speaker 3: 36:48

In a state like New Jersey, where it's really dense population, you've maybe 10% of land that's viable in general for any type of agricultural or industrial use. Now you add cannabis, add the restrictions with the local municipalities and all of that. It isn't as easy as people think, and so, while the state doesn't have a cap and it's not limiting the number of licenses, the nature of the municipal and home rule jurisdiction is limiting the licenses and I think, and you need capital because of the limited real estate, the landlords are well aware that their property properties can go at a premium.

Speaker 1: 37:25

Yeah, we've seen that before.

Speaker 2: 37:28

Yeah, exactly the green tax. So New Jersey is an interesting place because it's in this immature phase. You're talking about the amount of licenses that could be available at the state level compared to the restrictions at the local level, and you talked about the time for the market to mature, and your prediction was five to 10 years. When people think about the market maturing, I think now in many ways people think about price compression, and price compression is often driven by oversupply, and there are some states that are taking taking actions to control supply and that usually looks like limited licenses or limits on canopy size. That hasn't happened in New Jersey, which does create an environment where there ostensibly could be an oversupply if there was enough production.

Speaker 3: 38:31

Yeah, I brought that up to the CRC. Sorry, I cut you out Because I'm like guys at some point this has to stop because we don't want to hit that number. And so I think it was last year where the executive director had put out a report on project, on whatever numbers they had projected the demand to be by 2024, there had to be 4 million mature square feet of canopy to satisfy the demand. Right now we're under a million square feet for mature canopy, so we're not near the demand that they've projected. And so I've told the CRC now that you see how many are in queue of getting licensed. At some point you have to anticipate if X percentage become operational. What number are we at for the canopy? Because you don't want an oversaturated market, because nobody's going to win there except for the select few, and so it's not going to. Just it's like we've seen in other states. We don't want that to happen. And so I'm definitely having these conversations with the regulatory body. I think I need to take it a step further this year, and I've been avoiding it because who wants to get into the politics side of things? But ultimately the legislature is where things are happening, and so I think conversations needs to start happening with senators and assemblymen and women and educating them about the realities of market dynamics and where this is headed, if we don't start to pump the brakes Because let's just say, like you said, what's 1,700 conditional licenses?

Speaker 3: 40:02

I mean 50% of that's a substantial number. So I think, and that's the percentage of 50% to 60% are the ones that are going to typically convert, because a lot might not. Because for conditional license Ben, I don't know, because I know in our right you've done licensing work in New Jersey, but Ben, there is, it's, yeah, it's difficult here to convert your license Because for conditional licenses you don't need a proposed location you can apply with. I mean, you only need a proposed location. You don't need a secure location so you can use an address that's particularly that's on the market for something that you like. But then when you go to convert your license, you actually have to have site control and local support. So to get from point A to point B, 50% or more are not going to succeed just because of the limitations and the local restrictions and whatnot. So it's interesting to see the numbers, but it's really difficult to predict the percentage that are actually going to be successful at the end of it.

Speaker 1: 40:58

Yeah, interesting Speaking of being successful. One of the big impacts that we've seen from market to market is the emergence of the intoxicating hemp compounds, and I'm just curious, with New Jersey in particular, how is the state approaching this? What are the general rules? Are there any cautionary tales as far as hemp companies trying to enter the space or cannabis companies having to compete with it?

Speaker 3: 41:28

So we are one of the few states that doesn't have legislation yet banning Delta 8 or Delta 10 products. But there are bills that are in committee right now, that have been introduced, and so there is this notion, because I guess a few people you always have the one or two stories where somebody went to the hospital and they had something and they were like this was Delta 8. And I didn't know what I took and it's not regulated, and I found it at the gas station. So that happened and so that did prompt. I think there's actually two bills, if I'm not wrong at least, that are floating around that have been introduced to ban products altogether, which I don't think is smart. I don't think it's an outright ban, I think it's more about testing and regulating. And so we're seeing that initial approach which is I'm not surprised. The initial approach is like let's just ban it all and then we'll figure it out instead of the right way to do it. And so I do see we haven't again, we don't have anything passed yet.

Speaker 3: 42:25

And as far as these cannabis companies, I think now that the consumer base is getting a little bit more sophisticated and understanding, ok, what's at my local gas station is not the same as when I go and I get ID'd and I go into the store and so there is a difference.

Speaker 3: 42:41

Because I've had friends of mine who have purchased products I know they went to a hemp store and I'm telling her you're smoking hemp, and she's like, but it's THC. I was like it's less than 0.3% THC and the store is telling her that this is the THC product. And now when she goes to a dispensary and she sees the difference and she can compare the difference. They're aware. So I think it takes a little bit of that education that's required so the consumers are getting a little bit more smarter with knowing. But I don't know. I mean I haven't been diving more into the issue beyond the fact that I know there's bills pending and it's more about hysteria-based response instead of an educated response. And I don't think the companies, as far as I know, are having difficulty as far as the market or having too much product that are taking away from their consumers.

Speaker 2: 43:28

I know that New York City just right across the river from you guys has a ton of these hemp CBD credum shops everywhere that are selling all of these hemp derived cannabinoid products. Do you see as many of these stores like you see in New York City, in cities in New Jersey?

Speaker 3: 43:52

Not as many. There's a few in certain cities and you know, but this isn't a licensed shop but really nowhere near as many as New York, I think New York has. They take the cake over 1,500 shops in the state right now that are not regulated or licensed, and it does cause a lot of confusion and it causes a bigger problem with consumer safety, I think, because you don't really know what you're getting and that's not safe, that's not good for anybody.

Speaker 2: 44:22

Yeah, that's what Ben and I have been talking about. A lot is just the difference between banning versus implementing consumer safety, public safety, regulatory oversight of products, and I think that's ultimately where this is going. So, accepting that as something that everyone should do on both sides of the aisle of the regulated THC and the hemp side, accepting the future.

Speaker 3: 44:49

Yeah, yeah, I'm trying to focus more on that this year. Actually, I had a conversation two weeks ago with a friend about just education on safe consumption methods and dosages and products and how to identify things, because I feel like there hasn't been that concerted effort and that's part of what I've been wanting to implement in Blaze Responsibly, because it's about being like a responsible company, a responsible consumer, responsible as a community, and so what does that look like? And part of it it started as free education and content for the community and doing workshops for the community and that's what I did with Cookie, social Impact and then it evolved into education I mean sorry, expungements and then I feel like education kind of it didn't fall off because I was still doing it as part of these clinics and throughout the work I was doing. But I think that there is still a huge need both on the educating the everyday consumer and then the entrepreneur. There's two totally different worlds there and I've seen a lot of programming that's catered to the entrepreneur but then there's no business foundation to it and it's all cannabis specific and it's like that's great that you have a cannabis specifics, but I've learned now having my own business, that you don't know anything about business until you actually are an entrepreneur and you have to fail a lot to get to being successful.

Speaker 3: 46:09

And it's not easy and it's not for everyone, and I think there's a lot of that in the industry, where we dangle the carrot and we create this facade of all this, I don't know. There are opportunities, but we can't lie to ourselves and think that it's just going to be handed to us Just like anything. We're going to have to work hard for it, and I think sometimes in the industry can be like I don't know if that's how the licensing schemes are created when it's like social equity is going to get priority and you're going to get your applications reviewed. First you think I have an advantage and then you realize at the end of the day it's about the bottom line and it comes down to business fundamentals, and a lot of that seems to be missing. And so I'm trying to build more of that in 2024 with Blaze, responsibly and the partnership that I have to say. Let's build successful entrepreneurs, because it doesn't matter what they do. They need these skills though.

Speaker 1: 47:05

Yeah, well, amazing. And I'm just thinking about the CSR work you're doing in general, and I know that there's a little bit of a branding issue that the hemp market has and there might be an opportunity there for them to start thinking about their CSR and maybe you can open with that, because I know that's a big criticism. It's like, all right, you're coming in creating confusing products. Some of them are trying to be very above board and being very clear about what they're selling, but at the end of the day, it's like not being forced into these frameworks that require them to hire locally or work on expungements or whatever it is. Maybe if they proactively did it, it would start helping the brand of that segment on the whole.

Speaker 3: 48:01

I think so, and that's a great point you brought up, because even in New Jersey the HEP licenses are regulated under the Department of Agriculture. It's totally different. You don't have the same guidelines, you don't have to do the same work to your point, but they I know there are select companies that are focusing on I don't know elements for menstrual cramps and only creating products and only having a target audience. You know that's very specific and I feel like they're doing really good because they have a focus and they have a mission and they're doing it the right way. And I think anytime you have a, anytime you do anything with good intentions, it usually works out. But then also, when you do the right storytelling, it works. And so I think that's where there is that opportunity in the HEP industry, because it's like, especially for those companies that are doing the right things, like hempcrete, for example, I think that that's it's not going to we're not going to like replace concrete, because it's not we're not there yet, but I do think that it's a great.

Speaker 3: 48:54

It's a great alternative for partition walls or certain things where local farmers can get invested in that supply chain, and I think there's a lot of opportunities that cannabis has probably took over the limelight I guess I'll call it in the industry, and so the hype has died down and the investments have died down in the hemp, but not in the global hemp market.

Speaker 3: 49:16

The global hemp market is booming and countries like, like I know in India I just want to like my friends are doing great work in India with hemp companies that are Ayurvedic formulations and it's working for them for medicine and for textiles and for all these other things, and so I think that and there's an infrastructure in place, that's where I think it makes it a lot easier in some of these other countries, whereas here, with so much interest in the adult use and medicinal side rightfully. So I think I have kind of I kind of forgotten, like I saw a peak and then I just feel like it's died down and I don't I don't know if that's because, like, the strategy hasn't been there or anything like that, but there are some good people doing it. Sorry for the rant.

Speaker 1: 50:01

Yeah, great.

Speaker 2: 50:04

Well, shirali, we could, as as usual, talk all day about so many different things, but this is coming to the end of our conversation, so this is time for your last call, where we want to hand the mic over to you, to leave a lasting impression. Plug your business whatever you want. So, shirali, what's your last call?

Speaker 3: 50:27

Yeah, thank you. Well, definitely follow Blazor's responsibly on social media. I don't know if you already do, but Instagram, linkedin and X and our website. You can subscribe so you can find out when we're doing free events with the community.

Speaker 3: 50:40

And as far as a call to action, I want to say that just getting educated is probably the most important thing you can do. Get educated and that can take. It can take years. It took me a long time to find my way, but I think that when you do it with the right intentions and you have a focus in mind, you can execute really anything, and finding the right people and attracting those people and opportunities to and part of when you get educated is helping educate other people, and so having conversations and getting your voices heard really does matter If you want to get into this industry and network. I've built some of my best relationships networking, and so get yourself out there, get educated and have conversations with people, because you're always learning and you don't always know everything, and so I think that there's this industry has a lot to teach one another, and so, yeah, blazor's responsibly.

Speaker 1: 51:37

Charlie, thank you so much. This has been an amazing conversation. Thank you for just letting us pepper you with questions. Thank you.

Speaker 3: 51:44

Thank you for having me.

Speaker 1: 51:46

I now feel knowledgeable about New Jersey, which was definitely a void for me. So have a great day, Thank you. Thank you for taking the time. We really appreciate it.

Speaker 3: 51:55

Thank you.

Speaker 1: 51:58

All right, anna Ray, thanks for killing that one up. A great relationship that we now have. Well, you've had the total badass, yeah I can.

Speaker 1: 52:10

All right, folks. Well, as we wrap up, remember that the dialogue doesn't have to end here. We invite you to continue these conversations. We'd love to hear your thoughts. Who would you like to see on the show? What do you want us to talk about? So we're here for you. We're immensely grateful for your support and if you want to support us more, go in, subscribe to our podcast, like rate. All those things share. Just help us build this audience. We're going to continue to build steam and we can't do it without you. Thank you to our teams at Wolf, meyer and Vertosa helping us keep the lights and mics on, and just once again, thank you. As we take off, I'm about to go enjoy the beach here in Mexico. I'm looking forward to being back in my studio next week, but until then, stay curious, stay informed and keep your spirits high Until next time. That's the show.