Ben Larson: 0:06

Hey everybody, welcome to episode 67 of High Spirits. I'm Ben Larson and, as always, I'm joined today with Annery Grabstein. It's Thursday, November 7th, 2024, and we just had an election, and today we're going to talk about what happened this week. But before we get there, I'm going to do a brief little check-in with Anna Rae. See how you're doing, Anna Rae. How are you doing? Let me just jump to that.

AnnaRae Grabstein: 0:38

Yeah, I'm doing good. Yesterday was kind of wild after staying up late Tuesday night kind of obsessively watching the election results come in. My family wanted no part in it, so I was hiding in the laundry room watching the election where nobody else could hear me in my house. But yeah, I'm doing OK today.

Ben Larson: 1:26

Yeah, I'm doing okay today. I am starting to be able to wrap my head around and digest the changes and the results and think about how it affects, just ride this one out in my, in my dreams and then wake up and check things. And yeah, I woke up at like 4 30 on wednesday morning and just checked it really quick before going to the gym and then I had a great workout afterwards, uh, working out some, some frustrations. But besides all that I think most people that know me I'm a little bit of a bleeding heart and an empathic leader and trying to be there for my team and kind of say the right things knowing that you know we have people on all sides of the fence or fences and trying to create the right space for people, because it could be pretty emotional depending on where you stand.

AnnaRae Grabstein: 2:07

Yeah, what I will say is and I'm no stock picker, but I did have this impulse leading up to the election that there was going to be a lot of stock performance that looked bad in the days leading up to the election, with big jumps right afterwards and I'm not talking about cannabis stocks, but the broader stock market and in my mind it was like no matter who wins the presidency, what it does is give people confidence and insight into actually what's happening, and I think that the uncertainty leading up to the election made lots of businesses and retail investors just feel insecure. And I was right and it felt pretty good to just see the overall stock market get pretty wild in the last 36 hours.

AnnaRae Grabstein: 3:04

I mean it was a record-breaking post-election day, I think, for the S&P yeah it's been really crazy and at the same time and we're going to be diving into this when we bring on Hirsch in a minute to talk about the election on the back of the election, a number of cannabis stocks, specifically companies that are over-indexed in Florida, had insane, insane drops. Ayr saw 60% drop the day after the election, Trulieve 50%, and then even companies that have a lot broader diversification in lots of markets, like Curaleaf and Cresco and GTI, all saw reductions in their stock of somewhere between 20 and 30 percent. Today there has been some recovery.

AnnaRae Grabstein: 3:55

You've seen a lot of those stocks back 5, 6, 10 percent, but from where they were on Monday to where they are now, it's pretty shocking. I think that MSOS, the industry ETF it, went below $5 yesterday, which I hadn't seen in a very long time. It's back in the low fives today, but it was in the sevens a couple of days ago.

Ben Larson: 4:22

It's so funny when I think of cannabis investing, I'm always thinking with a really long lens and that, like all the volatility is expected, no matter who's in charge. And then it's times like these where you realize how many people are trying to ride the waves and time it and yeah, it's just like, just get back in, like it's especially now after the crash, like, get back in, we will see legalization, maybe sooner, maybe later. We'll talk about that soon when we bring on Hirsch.

AnnaRae Grabstein: 4:52

I did buy some cannabis stock yesterday. Yeah, when it was low, not a lot, but I did buy. I just felt that it was a symbol of solidarity and a belief that these are temporary volatile reactions and not of the overall performance of the sector.

Ben Larson: 5:13

So we'll see, we will see, we'll see. Should we bring on our friend?

AnnaRae Grabstein: 5:19

Yeah, let's do it. I'm super pumped to bring back Hirsch Jane, founder of Ananda Strategy, a strategy consultancy advising lots of top cannabis companies across the US, canada and Western Europe. Hirsch serves as the vice chair of the Cannabis Chamber of Commerce, is on the board of directors for Normal California and has had previous roles at companies like Airbnb, McKinsey and others, and he brings a wealth of experience in policy and politics to today's discussion. Hirsch, welcome back to High Spirits.

Hirsh Jain: 5:54

Hey guys, so great to be back here with you.

Ben Larson: 5:57

Great to have you. Where are you today? That looks a little bit different.

Hirsh Jain: 6:00

I am in St Louis for MJ Unpacked and it is awesome to be here. It's really been a great, great conference, yeah, got some team members out there, I heard.

Ben Larson: 6:08

it's been a lot of fun.

Hirsh Jain: 6:11

It's been super fun and I actually went to the St Louis Botanical Garden, which, low-key, is like one of the most beautiful places I've ever been in my entire life, so pro tip if you're ever in St Louis. It's really extraordinarily beautiful.

AnnaRae Grabstein: 6:23

I love that. Well, so it's Thursday. The election was Tuesday. How are you feeling after this historic election?

Hirsh Jain: 6:36

Did you stay up late Tuesday? What was going on in Hersh's world? Yeah, you know, I think I'm still sort of processing the outcome. It's been a pretty wild and historically relevant election both for our country and has huge implications for cannabis. So full processing and in terms of how I took it, like I'll be honest, the failure of the state ballot initiatives on Tuesday night, especially Florida, was devastating, and so after those Florida results came in, I sort of privately watched the rest of the results in my room by myself. So it was a tough night, I think, especially from a cannabis perspective, and the failure of those initiatives I think really might have an impact on how cannabis policy is led by Republicans going forward. So it was tough.

Ben Larson: 7:13

I'm not going to lie. Yeah, medical in Nebraska wasn't enough to lift the spirits.

Hirsh Jain: 7:19

I mean, I think, as we'll get into, that illustrates the broad bipartisan support that medical cannabis continues to have across the country, and many of us thought that would translate to adult use initiatives as well, and we can unpack why each of those failed. I think maybe the story is different in each place, but yeah, I was hoping that we'd get more than Nebraska, but we didn't.

AnnaRae Grabstein: 7:36

Yeah, yeah. Well, to set the stage for the way we want to go through this conversation today, I think that there is state initiatives related to cannabis that we want to touch on, but that starting the conversation talking about federal elections and the GOP landslide is a good place to start. And looking at Donald Trump's incoming presidency what's going on in the Senate, the House and some appointments and things like that would be a good place to start, and then we'll ladder down into talking about the states.

Ben Larson: 8:11

I like that little Freudian, slip right there.

AnnaRae Grabstein: 8:18

So let's dive into that Totally GOP landscape.

Hirsh Jain: 8:22

Tell us what happened from your perspective, hirsch, totally that sounds like a great agenda. And just one quick thing I'll say at the outset right, Obviously, this was a pretty wild and historical election. I think we can still have a productive conversation about what this means for our space and what we do going forward. But I think there are points in the conversation where there'll be a lot of uncertainties. There'll be a lot of I don't knows. There'll be some places where things kind of look bleak. So I guess I just want to say I see this. You know I don't have all the answers. I see this as part of the conversation. There's a lot of smart people that watch your show. So I think this is an initiation of the conversation we're all going to have to have going forward as we navigate uncharted territory. So uncharted territory. So, with that caveat aside, I mean, let's maybe one place to start and I think your agenda is great, anna Rae. One place to start is just like what the election results were. And look, this was a landslide, right.

Hirsh Jain: 9:14

I think it's important for us to acknowledge that the GOP obviously won the presidency. Donald Trump won more than 300 electoral college votes. This is the most electoral college votes that a Republican has won since 1988. So that's pretty significant. The Republicans won the popular vote by 5 million votes. Again, in our lifetimes, you know, the Republican had only won the popular vote like once before 1988. And I guess I'm kind of bringing that up because in our adult lifetimes, guys, the way that Republicans would win the presidency is they would lose the popular vote and narrowly win the electoral college. You know that's what happened with George W Bush a couple of times. That's what happened with Trump. So I think it's important for all of us to acknowledge, regardless of our politics, that this was a seismic sort of conservative wave, and the only analogy that I can sort of make is to, you know, ronald Reagan's landslide win in 1984. This might be the most seismic political event in the past 40 years.

Hirsh Jain: 10:12

So I know that's not good news to some people, but I think it's important to acknowledge the scope of the landslide. The other thing I'll just say about the sort of mechanics of the election and then we can talk about Trump himself is the GOP also won the Senate right. So the GOP, as of now, has won 52 seats in the Senate. There's still some Senate races that are waiting to be called, so the GOP could win 53 seats in the Senate. So the GOP will go in with the commanding majority in the Senate. And again, I'm just kind of setting the table here. I know this might sort of concern some people. The GOP has such a strong margin in the Senate that number one right it'll be able to confirm almost any appointment that Donald Trump puts forward to the cabinet. It's important for us to acknowledge that the GOP has such a wide margin in the Senate that they will have the latitude to confirm perhaps multiple Supreme Court justices during this first term. The GOP has such a wide margin in the Senate that they will control the Senate for probably at least the next four years, perhaps through the end of the decade. So I think that's important for all of us to acknowledge its impact on cabinet appointments, its impact on potential Supreme Court justices, and obviously this is relevant for American life, but it's also relevant for cannabis, as we have cases going through the Supreme Court. And then maybe a couple more things I'll say and then I'll pause, and then we can talk about Trump or whomever.

Hirsh Jain: 11:31

On the House side, we're still waiting for the House to be called. I think this is really important if you want to see a balance of power in the United States. It'll probably be another week before we know who controls the House of Representatives. If the Democrats win back control of the House. The speaker will likely be Hakeem Jeffries, who is someone who is quite friendly to cannabis, although, again, he'll have limited power. But that will essentially be the only check on the Republican Party's ability to pass legislation. And then the final thing I'll note is, as you mentioned, anna Rae, we saw losses in those three state ballot initiatives. So that's basically what happened on Tuesday and now we can talk about where we go from here, but that's kind of what happened.

AnnaRae Grabstein: 12:10

Well, let's pause for a minute. I'm curious how surprised we are. I will say for myself, living in Northern California a liberal stronghold that nobody even considered would be a place that the Republicans could win I did start to see a lot more signs for Trump, flags for Trump, than I ever had before, and there started to feel like there was a cultural shift going on around me in the days leading up to the election and I had a feeling that this might happen. I didn't predict what a landslide it would be and I was caught by surprise. Ben, what did you think? Were you surprised?

Ben Larson: 13:04

It's hard to be surprised by anything in politics these days. I'm not surprised, unfortunately. I've been sorely disappointed with how the DNC has been running their strategies and I think they've been fumbling it for the last eight years, you know. Even with Biden winning, I just thought it was the complete wrong strategy. So I can totally understand how people have a hard time getting behind it and anyone left in the middle. They're going to look for something that is clear and definitive and we just didn't feel like that. Like slotting Kamala in with 107 days left is probably the best chance that they had given the situation, but it was just a very poor strategy. So not totally surprised. I am surprised by some of the cannabis stuff, though.

Hirsh Jain: 13:47

Yeah, and I mean I think you know I'm glad you kind of raised this, anna Rae, and I think you, you know there's a bunch of interesting things that you kind of invoked here right on whether we should be surprised, first, I think the answer is to some extent we should be, because the polling right for the third election cycle in a row in this presidential cycle in a row was off dramatically right For the past three presidential cycles. Now we've seen that polling has underrepresented Trump's support, and so that's why I was surprised, and I guess I will say, like I did, a lot of soul searching after this, because, as someone who likes to look at polls as an empirical way of trying to determine what outcomes are, I think we learned that there is a problem in the American information system, complex such that we are not capturing the attitudes of a lot of our fellow citizens, and so I bring this up because I think it relates to the state ballot initiatives. There were many of us that were really myself included maybe the most guilty one rigorously looking at that polling number and had developed some sense of confidence about the outcomes here, particularly in Florida. But I think what we learned is that the polling sort of profession in this country is not working as it should right now, both in cannabis and outside, and I think Trump's results show that.

Hirsh Jain: 14:58

The second thing I'll say is I agree with you anecdotally right, I've seen plenty of examples, like in blue communities, of people expressing their support for Trump and, without venturing too far into politics, I think what we saw in these results is a repudiation of sort of the idea that a more diverse American electorate would inevitably lead to a Democratic majority. Right, there was a line of thinking during the Obama years that demographics were destined, that the steady sort of like development of a multicultural country would lead to the Democrats obtaining power. I think, whether you agree or disagree, whether you're happy or unhappy, we saw a strong repudiation of that yesterday and I think it's notable that you know, donald Trump made significant inroads with every demographic group in America, with the exception of white college educated women. Again, that is just a really remarkable fact. Whether it's Latino men, you know Latino women, um, you know all all across the board. So, uh, yeah.

Ben Larson: 15:58

Can I ask a controversial question? Yeah, do you think America's ready for a female president?

Hirsh Jain: 16:05

That is a that is a controversial question. Um, here's what I would say. I think bias of all forms continues to exist in American life, right?

AnnaRae Grabstein: 16:11

That is undeniable right.

Hirsh Jain: 16:12

Gender bias continues to exist, racial bias continues to exist, so that's all a way of saying I think a female candidate is like an inherently racist or sexist country. I will say I don't believe that narrative. I think you know prejudice and discrimination have been reduced over time. So that's the second thing I'll say. And the third thing I will say is, although bias continues to exist, I think it should concern a Democrat if that is the explanation that's invoked for this failure here. Right At the end of the day, this is a contest, this is a game. This isn't really about fairness, and I think you know the Democratic Party does not do itself a service when it when it provides that as the explanation for the loss here. A different way of putting this is like a black man named Barack Hussein Obama, one commanding electoral majorities like 15 years ago, and so I think you have to acknowledge those limitations, but figure out how you're going to navigate them. And that's just my take. I'm curious of your take, of course. Yeah.

AnnaRae Grabstein: 17:27

Yesterday night I spoke with Erin Gore. She's the CEO of Garden Society, a multi-state cannabis company, and she said I'm not surprised. As a woman, I have encountered so many challenges that are unique to being a woman in an executive role that I never for a second thought that America would elect a female president. Wow, that America would elect a female president. And that was based on her own learned experience and I thought that was really telling.

AnnaRae Grabstein: 17:58

So yeah, ben, I was hopeful that the fact that the Democrats had a female at the top of the ticket would not have anything to do with the outcome, but I think that there's a lot of men and maybe a lot of women too, that didn't want to vote for a woman, and I think that, in the end, a big takeaway for me is that it wasn't so much about who the Democrats had up front, but I think that there was a lot hopeful economic agenda than the Democrats were, and that all the other things didn't matter. It didn't matter the type of vitriol that was being expressed by a certain candidate. It didn't matter how hopeful the Democrats were about the future of equity and diversity. None of those things mattered. What mattered was what people thought was going to happen to their grocery bills and the price of gas.

Ben Larson: 19:24

Well, let's use that as a transition point to get focused on the cannabis economy and the things that we generally try to talk about on this show. So I appreciate you guys opening up a little bit about the heavier side of all this. But what does a Trump presidency mean for cannabis? And to Hersh's point earlier on, there's a lot of uncertainty. He's flip-flopped a lot on the conversation everywhere, from, you know, executing people to legalizing, and so are we feeling hopeful, you know, with this new trajectory and might we see legalization, you know, in the next four years.

Hirsh Jain: 20:06

Yeah, I think if you were a Trump supporter and you wanted to make the case for Trump being good on cannabis and why we shouldn't be concerned, this is the case you would make and then we can explore the case against it. So again, if you wanted to make the case, you would say something like look at Trump's recent support for cannabis. It's been incredible. Right? You would say you know Trump came out in support of Amendment 3 in Florida, which is the first time that a presidential candidate has weighed in on an issue like that. You would also note not only that he's been supportive, but he's articulated that support with the precision that's kind of remarkable for someone like him. Right, like he has said, he supports Amendment 3 in Florida. He has talked with nuance about the medical utility of cannabis. There are reports that a number of his cronies and Mar-a-Lago are older and find immense relief from cannabis, and that has sort of resonated with him. One of his chief advisors, roger Stone, who he controversially pardoned, has been very vocal about his longstanding support for cannabis and has pushed Trump in that direction. Again, if you were making the case here, you would say something like you know, one of Trump's main allies is a guy named Joe Gruters, the guy who convinced him to support Amendment 3 in Florida, the guy who will be the future CFO of Florida. He's on board, so you can make those comments. You could also say Trump has historically supported states' rights and that's good for cannabis. So I think those are the comments in support.

Hirsh Jain: 21:27

I think the counter arguments to that are sort of familiar to us by now. One person might say you know, trump has been known to make contradictory comments and I think, no matter your politics, that's something you have to admit. A candidate and that candidate fails, the stink of losing really impacts Trump, and so he doesn't want to be associated with that candidate. So that could change his sentiment. And then perhaps the last thing I'll say is a critic or a skeptic might say well, trump historically has appointed attorney generals that are hostile to cannabis, such as Jeff Sessions, and he might do so again and derail rescheduling, and we can talk about that in a second. And a skeptic might also say well, the GOP is going to control the Senate and so even if Trump is pro-cannabis, you know, if we have another Mitch McConnell-like anti-cannabis Republican there, maybe we make no progress for four years. So I think those are the competing arguments there, yeah.

AnnaRae Grabstein: 22:30

I think that Trump has been pretty clear on his support of cannabis recently, and so I'm going to take the for those that want to see the cannabis light in Trump's recent positions. However, it's also very clear that the Senate and the House have a massive impact on the ability for any type of cannabis policy to move. Like we've seen, no matter who's in charge of which house. Like we've seen safe banking move in one side and not in the other, and it just it's been going on and on. So I'd like to explore what's going to happen with Senate leadership and what we can anticipate from the Senate supporting the positions that Trump has espoused.

Hirsh Jain: 23:23

Totally yeah, and I think, as you pointed out, I think that's really critical right. What will the Senate look like? Who will lead it? That'll determine what is likely to happen going forward. So, again, as we were just discussing, the Republicans won the Senate. Right, they had 49 seats before. Now they have 52. So they just won Senate races in West Virginia, they knocked off an incumbent in Ohio, they knocked off an incumbent in Montana and again, if you kind of look at those states, those are all red states that had a Democratic representative, but those folks are all kind of gone now. It's the reddening of the Republican Party. So they have 52 seats. They might get 53 if they can win Pennsylvania. So they have command and control of the Senate.

Hirsh Jain: 24:01

And then you know, I think your question, anna Rae, is like who might lead the Senate? My short answer is that there are, I think, four potential people that could lead the Senate. One would be positive and three would be quite negative, and we should really acknowledge that. So I think the one person that we should be rooting for to become Senate majority leader is a guy by the name of Steve Daines. Steve Daines is a Senator that represents Montana.

Hirsh Jain: 24:23

Montana is a small state but Montana is actually a very robust adult use state. It was actually one of the first red states to actually opt into cannabis four years ago in 2020. Montana again, it's a small state but it's like a $330, $340 million market for a state of 1 million people, so it has some of the highest per capita cannabis sales in the country. It's, you know, big tourism spots so people come there. That's all a way of saying Steve Daines, who used to not really like cannabis, you know kind of had his come to Jesus moment once Montana had such a robust cannabis economy and, you know, has been a big advocate for safe banking.

Hirsh Jain: 24:58

Steve Daines and you know, just to get into the weeds here a little bit, he also has, you know, trump's support to be the Senate majority leader, which is important, and he was the guy who was responsible for helping the Republicans win back the Senate and because they did so well, it will be seen that he has done a good job and so that kind of puts him in contention. So we can talk about the other three folks in a second who are not so good. But I think the takeaway is that's the best possible outcome for cannabis legislation is to have Steve Daines as the Republican leader in the Senate.

Ben Larson: 25:30

It's kind of crazy to also think I'm sitting here staring at a map showing that the GOP on the House side is currently sitting at 207, which is 11 away from the 218 mark.

Ben Larson: 25:41

Democrats are at 194.

Ben Larson: 25:44

I mean, we could very much see an entire administration stacked in the GOP's favor. And so I've been, like you know, going through all the machinations of what could happen for cannabis and I felt like a democratic administration kind of gave us this middle of the road we knew we were going to get cannabis across. Progress kind of that, you know, in the typical form that we've seen in the regulated states, where this kind of iterative probably highly regulated, something that lands in the middle, where I now feel that we might enter a situation where legislation, whether good or bad, can just get, you know, streamlined through the process and it might be this really polarizing event where it could actually go really bad or it could go really good, where we could see a less regulated but more open and faster legalization pathway. In particular, also thinking about RFK being appointed to health and human services and where he's historically stood on psychedelics and cannabis, it's just really wild to think about how each one of these players starts to signal the direction that we might be going for the cannabis industry.

Hirsh Jain: 26:54

Totally, yeah. I'll say a few things in response to what you said, ben, right. So first, you're highlighting that the control of the House is still outstanding, which is right, and this is this is a totally critical thing Right, as you pointed out, if the Republicans win control of the House, they will essentially have unified control over all branches of government and can pass any laws that they want. And so, if you were concerned about a potential national abortion ban, for example, right, if republicans win control of the house, they will have, in theory, the the ability to do so. So you're right that that is super important for issues outside of cannabis. Um, as I mentioned earlier, it will probably be another week or so before we know who wins control of the house and, interestingly, it'll probably come down to like a lot of races in purple parts of New York or purple parts of California, which shows you that, even if you live in a blue state, like, you want your purple citizens to not feel terrible about the state that they live in, because it can impact national politics. So that's important as well. And look, I know some parts of this conversation are kind of bleak. Maybe I'll point to what would be a best case scenario, I think, for cannabis and I think this is unlikely A best case scenario, I believe right would be if the Democrats won the House and that someone like Hakeem Jeffries were the speaker of the House.

Hirsh Jain: 28:04

They would have a super narrow majority if they did. But Hakeem Jeffries is someone that I think many of us in cannabis have been meeting for meeting with for five, six or seven years now, believing one day he would be, you know, the first black Democratic speaker of the House, which will probably happen one day, even if it's next week or two years from now. So he's a pragmatic, pro-cannabis Democrat. So I think an ideal scenario would be one in which he were the speaker of the House and Steve Daines were the Republican Senate Majority Leader, because they are both pragmatists. And so, again, you know there is some bad news here today which we're discussing. But if you believe Donald Trump's conversion to cannabis, as Anna Rae was mentioning before, is really sincere, if you believe that you know he's sincere and it's actually a priority, the two people that I think that would allow him to enact that agenda would be, you know, hakeem on the Democratic side and then Steve Daines on the Republican side.

AnnaRae Grabstein: 28:57

So, yeah, what about if the Republicans win the House?

Hirsh Jain: 29:03

You know, if the Republicans win the House, I think it's going to be tough. So I noticed that when Trump gave his victory speech on Tuesday night, mike Johnson, who's the current Republican speaker of the House right, was right there, like alongside him, and if you guys were watching that speech, you may have noticed that. You know Trump said I think Mike Johnson's doing a hell of a job, right, which is his kind of way of saying okay, it's up to your caucus to sort out who the leader is, but this guy has my tacit endorsement and, as you may know, you know Mike Johnson is a fairly evangelical Christian from Louisiana who is not particularly pro-cannabis. So, you know, maybe if this were enough of a priority for Trump, you could make the argument that Trump could exert some influence on him and get him to move cannabis forward. But it's a much tougher path with him being the head of the. The speaker of the House.

AnnaRae Grabstein: 29:46

Well, so let's talk about the other thing that Ben brought up, which is health and human services, about I don't know. Six weeks ago we saw Robert F Kennedy Jr endorse Trump and withdraw his candidacy and with that it seemed to be a bit of a quid pro quo that if Trump won, that RFK would be brought into the administration. And RFK has been very vocal about wanting to change the way that we look at health in this country. He's talked about things like abolishing the FDA. There have been some viral social media posts where people are espousing that he will support psychedelic legalization, cannabis legalization, legalization of raw milk, all kinds of things. Do we think that it is a sure thing that RFK Jr will become the head of HHS, and will he be an advocate for cannabis inside the administration?

Hirsh Jain: 30:53

Yeah, you know, I would say normally a nominee like RFK again, regardless of what you think about him could be too controversial to get through a Senate confirmation process. One of the impacts of the Republicans winning such a wide kind of like majority right in the Senate is they can confirm whoever they want. So historically controversial nominees run into trouble. That check is no longer there on the Trump administration. That's all a way of saying if he wants him to be the head of HHS, he will be the head of HHS. So that's on the likelihood. On his potential impact, there is some line of thinking that his presence at the head of HHS would be helpful to cannabis. As you mentioned, anna Rae, he's expressed a skepticism of kind of prescription medicine which is common in our space. He's, you know, voiced a support for legalizing cannabis, has voiced support for plant medicine, so I think you could make the case that his appointment further confirms Trump's belief right in plant medicine. I think what that misses, though, is that at least the HHS's role in the rescheduling process has already occurred, right. So, like RFK, even if you were the head of the HHS would not really have too much of a role in the rescheduling process going forward because they've already kind of put out that memo. So it might be a good signal, but as a mechanical matter I don't think he would have much influence over rescheduling.

Hirsh Jain: 32:15

And lastly, I'll make kind of the obvious point that the person that probably matters the most from a rescheduling process is who the next attorney general is. And I think, again, the unfortunate news is that there are some potential appointees that could give us great heartburn in the same way that Jeff Sessions did right, and I think the best example of that is someone like Ken Paxton, who's the attorney general of Texas, is very anti-cannabis Again, the kind of nominee that historically would not make their way through a Senate confirmation process because he's been charged with all of these crimes and is controversial. But he is someone who could make it through, and so I think maybe the last thing I'll say is I believe this process is now an administrative one. So I'm still quite optimistic that rescheduling gets done almost regardless of who the attorney general is, but there is some uncertainty there.

Ben Larson: 33:03

I do think it's interesting that he is quite critical of the FDA and a lot of us in the cannabis industry are afraid of cannabis falling into the FDA's hands and him wanting to make medicine more broadly accessible to the citizens I think bodes well when we go a couple steps down the legalization path.

Hirsh Jain: 33:28

I do think it's funny that he's kind of appropriated the MAGA phrase and turned it to Make America Healthy Again, so it's MAHA instead of MAGA confidence to you guys Like, look, the Republican Party has like unprecedented control over the levers of state government, but we just saw these red states opt into cannabis, and so we will not see an attorney general derail that progress. We will see the Senate majority leader respect that. Unfortunately, we did not see that, and so that's. I think those are the reverberations of those failed ballot initiatives and how it impacts the calculus of who the next attorney general is and who the next Senate majority leader is. That's the bad news.

AnnaRae Grabstein: 34:14

So let's dive into them then. So, despite strong support for cannabis, there were three major state-level ballot losses Florida and then both Dakotas. In Florida, the recreational cannabis measure failed to meet the 60% threshold, but it still received a majority of the votes, landing at least 55%, and I think we should start with Florida. What we saw in Florida was a massive capital investment to pass Amendment 3. There was $149 million spent on the campaign, of which over $140 million of it was funded by Trulieve, and Trulieve reportedly sat down with Donald Trump was able to get support for Amendment 3. I think that probably all three of us thought Amendment 3 was going to pass and were hopeful, as cannabis industry stakeholders, about the opportunity that Florida was going to present from a business perspective. However, there was a lot of complex issues like environments at play here.

Ben Larson: 35:35

I was going to say I don't know how global the we is, because I know a lot of people that were kind of like anti, truly, even in this.

AnnaRae Grabstein: 35:43

And that was hemp right. There was a lot of of anti amendment three. Folks on the hemp side, the hemp industry, came out and supported DeSantis and then DeSantis came out against amendment three. Like what? What happened here? Why were we so wrong?

Hirsh Jain: 36:00

I think it's really important to you know to answer that question that you asked Anna Rae, like what happened here? What can we learn from this? I just want to say that it was really bewildering to me that all three of these cannabis initiatives failed. If we just zoom out a little bit, cannabis initiatives historically have been very successful in presidential elections. They've had a mixed record in off-cycle elections, but if you think about 2012, 2016, 2020, that has always been a giant leap forward for cannabis initiatives and that supported the idea that presidential elections bring out the whole electorate and that the American people broadly are supportive of cannabis and that it'll succeed in presidential elections. And you know, cannabis initiatives had been 15 wins and one loss in presidential elections. The only loss was a very narrow loss and that was Arizona in 2016. So it is pretty shocking that we lost three different initiatives not only during a presidential year, but during a year when both presidential candidates had voiced support for cannabis.

Ben Larson: 36:58

And also one of those initiatives where it had previously passed in the last presidential election, exactly right.

Hirsh Jain: 37:04

South Dakota, which had passed by a wide margin in 2020, now failed. So yeah, it was pretty remarkable and the question I was asking myself that night was is Sam right like smart approaches from marijuana when they, when they saw all three initiatives failed, put out press releases showing like this is a backlash against cannabis and there isn't kind of support there, and I think that's the question we have to ask ourselves um, let's talk about Florida. Um, so Florida did not um pass, I think there's. There's a few comments. I'll make here.

Hirsh Jain: 37:34

One we found that the polling was wildly off in Florida, right, and it was the same thing that we were talking about earlier in the show. I think that's why this came as such a great surprise to many of us. Like, much of the polling had this passing in the mid 60s, and I think what we learned is the same polling that was inaccurate when it came to our presidential election was inaccurate here. Election was inaccurate here. But that's challenging. I mean, these were some of the most respected pollsters in the United States talking about how this was winning with a very healthy margin. So I think that kind of came as a surprise.

Hirsh Jain: 38:05

I think the second thing, if we're just clinically analyzing what happened here, part of the reason this initiative failed was because of the GOP dominance in Florida, which is to say, this initiative passing was always dependent upon the idea that Democrats would support the measure at like an 80% level and Republicans would support this at like a 50% level, and the electorate would be made up of, in roughly equal parts, of both of those parties. But you know Democrats, you know Trump won in Florida by 13 or 14 points, which is the most that anyone has won in Florida. You know a Democrat has lost in Florida in almost 40 years. And so you know I guess that's just a way of saying the Republican Party's dominance in Florida trickled down and helped the initiative fail.

Hirsh Jain: 38:47

On the initiative itself, I think what we learned is that some of the opposition attacks in Florida worked and you know there was like sort of allegations that this initiative was monopolistic and that it did not allow a home grow. There was a lot of criticism of this initiative from within the hemp community, and so if we want to get into those criticisms, we can. But I think what we saw is that legalization can still you know, support for legalization can decline if it's perceived that that legalization bill is not structured in a way that most stakeholders find is appropriate. So there's more I could say, but maybe I'll just kind of pause there.

Ben Larson: 39:25

You know, I know Kim Rivers was often pointing to the single topic voting requirement and you know we just saw Nebraska pass medical and there was two initiatives that passed at the same time there and they have a similar requirement. So it's easy to play Monday morning quarterback right, but next time around maybe it has to be two or three initiatives to kind of address what the opposition was saying in.

Hirsh Jain: 39:52

Florida, totally. You know I'm of two minds about this, right. Obviously, this criticism, this initiative was attacked for many reasons and initially, when I saw folks in cannabis saying they wanted to vote against legalization, there was a little bit of frustration there, right, and my sort of thinking was like, hey guys, you know, actually the way to think about this is that the Florida Republican Party you know, in Florida the Republicans have a supermajority and they will never legalize cannabis and the only way to legalize it is via a ballot initiative. And because of the way that Florida laws work, you know, ballot initiatives have to touch on a single subject and there was an effort to include home grow a couple of years ago and it didn't succeed. And look, I know you may not like Trulieve, but the way this is going to work is in this very narrow fashion, we're going to have our unique opportunity to legalize cannabis and then the Republican Party has so much power afterwards that they will structure what the market looks like. So that for the past six to eight months is what I've been telling people, you know, trying to, in my sort of mind, communicate to them that, like no, you should actually support this.

Hirsh Jain: 40:48

What I learned is that, like that, just went over people's head and, quite frankly, they don't care right, I'm here at MJ Unpacked, as I was telling you, and yesterday talking to a bunch of folks, there were folks that were happy that Florida did not succeed, and I bring this all up to say Cannabis folks and not hemp folks.

Hirsh Jain: 41:04

Cannabis folks yeah, correct, believing it was monopolistic.

Hirsh Jain: 41:07

I guess I'm narrating all this to say, throughout the past six to eight months, I had this idea that if we could just explain this enough to people, if we could say like, look, dude, Florida has a really anti-democratic governing structure, so you're never going to legalize weed in Florida unless we do it in this very narrow way, and I promise you that will lead to a broadening of the market.

Hirsh Jain: 41:24

I thought that, and that's what the campaign attempted to do for six to eight months, for whatever reason, that did not work. And so I think maybe the takeaway here is that, like, if we have cleavages within the cannabis community, we will not succeed, and that we have to find a way of making all stakeholders feel like they have a stake in legalization. And so it's a way of saying like, yes, people have legitimate reasons to be concerned about a restricted market and we will not succeed unless we figure out a way to allay those concerns, even though I think in this instance those concerns were just like disingenuous propaganda that was being put out there by people like Ron DeSantis.

AnnaRae Grabstein: 42:00

So those are kind of my complex views on all this, do you think that there will be an ongoing appetite in Florida to try again?

Hirsh Jain: 42:11

You know like it's so expensive to do this via the ballot, right that the only realistic way to do it again via the ballot would be four years from now, in 2028. And that was sort of my frustration about the way this played out. It's like, look guys, you basically only have a chance every four years to do this, so let's get this done and build on it. But my perhaps naively optimistic way of looking at this NRA is that this has started the adult use conversation in Florida, right. This got 55, 56% of the vote, demonstrating that it has the support of Floridians and the Republican party.

Hirsh Jain: 42:43

When they were attacking this initiative, they were not attacking cannabis. They were attacking the structure of the initiative and suggesting that it was monopolistic and that it would be enshrined in the constitution and that you couldn't grow your own, which implied that you should have the right to grow your own cannabis. So I know that the Smart and Safe campaign has come under tremendous criticism. I could not disagree with that more strongly. I think they were walking a real tight rope to put this on the ballot, and I think they have created the momentum to have an adult use conversation in Florida over the next couple of years. The problem is the Republican Party dominates Florida, so it'll still be something of a challenge.

Ben Larson: 43:20

Well, and DeSantis still has a very significant voice there, and he seems to be on the hemp side of the equation.

AnnaRae Grabstein: 43:26

Yeah, yeah. I perceive this is a win for hemp in Florida. What do you guys think?

Ben Larson: 43:33

Yeah, I mean it's going to keep moving forward and there will probably be resurfaced legislation to kind of put some more controls around it. You know that failed earlier this year, but I wouldn't be surprised if we see it resurface next year, but without the competition of a recreational cannabis market yeah. I see it continuing to gain momentum.

Hirsh Jain: 43:57

Yeah, I mean I agree with Ben, right.

Hirsh Jain: 44:04

I mean I think this gives, like hemp products, the ability to to to dominate the market in Florida.

Hirsh Jain: 44:06

I do think this could be a liability for Ron DeSantis going forward, right, if there is some, like you know, public health incident with these hemp products in six to nine months, he's going to be potentially criticized for not being supportive of regulated cannabis.

Hirsh Jain: 44:17

So we'll see how that plays out and how that impacts his thinking. And maybe just one other thing on this, as I've been searching for explanations about why Florida didn't turn out the way that we thought it might. Some people have suggested that the connection between Florida and this is just a hypothesis, maybe one for us to all think about, and whether we think it's credible or not that the connection between Florida and New York played a role right, that New York's legalization right came under much criticism and that there were people in Florida right, given the cultural cross-pollination between the states, who developed a more negative view of cannabis because of that New York rollout. And how credible that is I don't know, but I think it's a reminder that if these rollouts do not take place in a way that generates public support, it risks future legalization efforts.

AnnaRae Grabstein: 45:03

I think it is unfortunate that the measure needed 60%, because the fact is that they did win a large majority and I want the Republicans in Washington to remember that when they think about Florida and they think about the electorate there, it's not that legalization lost, but that it had the majority of the voters behind it.

AnnaRae Grabstein: 45:30

We brought up hemp and I do want to talk about the Dakotas, but I think it's important to talk about the Farm Bill and I think Florida is an interesting segue to the Farm Bill, because we may see that this loss of Amendment 3 in Florida is a win for hemp in Florida. But what the hemp industry needs is the Farm Bill to the ability of hemp to like be in market in some way, shape or form or form, and we are going to need the house and the Senate to move the farm bill forward in some way. Do we have any ideas here? This is this is a confusing kind of gray space at this time to understand who on the Republican side is going to be an advocate for the hemp industry and the Farm.

AnnaRae Grabstein: 46:22

Bill.

Hirsh Jain: 46:23

It's a good question, ben. I'd be curious not to throw it over to you, but if you have thoughts on that question and then I can build on it, yeah.

Ben Larson: 46:30

Well, yeah, I mean, you know I look at the again, the momentum that hemp is building in a lot of these red states. You know, I just got back from Texas where, walking through a Total Wine, you have three full bays full of THC infused beverages and it feels incredibly normalized and big retailers in Texas you know Spex and Total Wine they're very much in favor of these products and I think I generally know how the Republican Party works, and so one thing I feel more confident in is that the Miller Amendment's going nowhere. You know we'll be a full like maintaining of the opening that the Farm Bill created. I'm sure we'll get some more guardrails, but I think this is going to bode well for the hemp category.

Hirsh Jain: 47:18

Yeah, I mean I don't really have any genius answers here. I would say one thing I've been thinking about is if the way we read these adult use ballot initiatives is that there continues to be lingering stigma against cannabis, especially in red or deep red America. If that's a conclusion of these ballot initiatives, can a category like hemp beverages be a way of destigmatizing cannabis further? Right? So that's one thing, and I think we've always thought that right. We've always had the hypothesis that these beverages, by virtue of their form factor right and not being combustible, would generate support. But, like if I, if we were naive and thinking that we were on a linear path towards cannabis normalization, if there continues to be lingering stigma in red America, do we need to think about other ways to change the image of what cannabis is? So perhaps that's the opportunity in hemp and in hemp beverages in particular.

Hirsh Jain: 48:08

And then the other thing I will say is, if you know, the thinking was that you know the farm bill would not get resolved because the federal government is so dysfunctional and can't agree on anything. If the Republicans do indeed get unified control over government, then you will have, for the first time in a long time, the ability for the federal government to move in a direction. We might not like that on all issues. We might not like that on abortion rights, for example, but perhaps that creates momentum for the Republicans to stake out the way they want this to look. And then, as we all know, you know, given the robust nature of hemp industries in many Republican states, perhaps that bodes well for hemp as a category.

Ben Larson: 48:47

Yeah, focusing purely on cannabis and cannabinoids and getting them into people's hands. There is just nothing more normalizing than this. Right. And it doesn't say hemp, it says THC infused, and so when you see this in your grocery stores like this is kind of the tip of the spear that normalizes cannabis writ large. Most people don't like that. That's how we get there, but I do think it is the pathway.

Hirsh Jain: 49:15

Yeah, I think that's the optimistic way of looking at this. Right If unified Republican control and this is all speculative, of course right. But if unified Republican control and GOP dominance means the persistence of the hemp category right across this country, does that not start a conversation about how nonsensical this artificial distinction between hemp and cannabis is? Right? And I think, again, even critics of the hemp industry have to acknowledge that in places like Texas, the proliferation of the hemp category is a visible illustration of how prohibition doesn't make sense. So is that the back door? There's a lot of steps between here and there, but I think it's plausible. Yeah.

AnnaRae Grabstein: 49:53

I'm curious of a little bit of future casting here. We just had this election, but there is going to be future elections, future legislative change in 2025. Do any of us have ideas of what states are going to be likely to make significant moves? We've been talking about Pennsylvania. Is that going to actually happen? What are some other states that are on the roadmap for significant cannabis policy change in 25?

Hirsh Jain: 50:23

I think here's what a good 2025 would look like, like I'm not going to lie, at least for me, like this election on the state ballot initiatives was a gut punch about the progress I think I thought we were going to make. But then the question is like OK, where might we realistically make progress? And like, gain the momentum we need over the next 12 to 18 months. So here's what I think a best case but plausible scenario is one right, we start to see adult use rollouts. I mean, in places like Minnesota and Delaware that have been long delayed. I think Minnesota is the biggest one. You guys have covered Minnesota extensively. So I think in a, in a best case scenario, minnesota would finally roll out, would become the program that we believe is possible. Right, we'll have those 600, 700 dispensaries. They all won't open next year, but they'll start to and, you know, will exist alongside a robust beverage category. Right, and we'll, you know, bring in people from North Dakota and South Dakota who just rejected initiatives. So I think that's a best case scenario, but a plausible one. Minnesota starts growing and a little bit of Delaware too. I think another best case scenario is that we start to see a lot of these. You know, remaining states opt into medical and I think we start to see you know we just got 39 medical states with Nebraska recently we get into the forties maybe, and thereby even with a hostile attorney general like create support for schedule three right through medical initiatives.

Hirsh Jain: 51:37

And here I'm thinking about, you know, a state like Indiana. What's interesting about Indiana is that maybe it can show us that in fact, you know, the GOP does support cannabis, and I mentioned this because Indiana, now that Ohio has gone online, is surrounded on all sides. Like every person in Indiana can drive like an hour and a half to Michigan or Illinois or Ohio to buy cannabis and their new Republican government there has expressed support for passing a medical program. So maybe Indiana can be number 40, right and get us to 80 percent of states and then again, in a best case scenario, next year you would see some of these reds you know red or purple states that have held out for a while like a Wisconsin right because of the GOP legislature, or if you guys have been following the Carolinas that every year like flirt with medical but fail at the end.

Hirsh Jain: 52:21

I think a best-case scenario is over the next 12 to 18 months we get from like 39 to like 43, 44. I think that provides the kind of conceptual and ideological support for rescheduling. And then no-transcript remain a challenge, just because it's as divided as America is. You have very rural, like white Republicans, and very urban, you know minority communities. But in a best case scenario Pennsylvania would go adult use and would get us to 225 states.

Ben Larson: 53:12

It seems like it really should go. It's surrounded by a great legal markets right and you know it is known as kind of a significant state on the eastern seaboard. It's just. It would be really shocking to see it hold out races in Pennsylvania, like I'm seeing.

Hirsh Jain: 53:39

Like Gen Z, republican women right Like run for the Pennsylvania House on a pro-cannabis. Like a 25 year old, like Gen Z, like you know, republican woman running on a pro-cannabis platform. That's the next iteration of the Republican party that we need to see if we're going to get cannabis passed in a place like Pennsylvania Fingers crossed.

AnnaRae Grabstein: 53:53

Amazing, hirsch, you have given us so much to think about and we've all been thinking, both ben and myself, but also all of our audience uh, these last few days, what to make of all of this? And it's clear there's not answers, but uh, things will become more clear as we get more information about what this administration will look like and action starts moving. I would love for you to give our audience your last call as we close out the hour.

Hirsh Jain: 54:25

Yeah, I mean. Thanks, guys, so much for having me. I think I'll make a couple of points on this last call, you know. First, I feel like you know, this conversation was a little bit more somber than our previous conversation. I hope that, you know it didn't kill too much of the vibe. I still enjoyed the conversation but it was maybe a little bit more of a serious conversation about the challenges ahead.

Hirsh Jain: 54:43

So maybe I'll just say like I don't know if there's anyone out there who finds working in this space hard, like I'm with you, right, I think there's a lot of people. Cannabis, most of the time, Like I feel like this has been one of my best life choices and I love all the people I've met in the work, but the past few days have been hard for me. So I don't know I'm just kind of putting that out there If there's anyone else out there like that, I feel you Um and and um, you know you're just probably not alone, um. And the second thing I'll say is I think what we saw in Florida right as we were talking about earlier, is that when there are internal divisions in cannabis, then we end up not succeeding, and so I think we have to do a better job of talking to one another, and a lot of cannabis discourse just consists of shouting at each other online.

Hirsh Jain: 55:28

I think that reflects a lot of the discourse that surrounded the election. But now the election has happened, you know, even on an issue that divided the cannabis community. So now that we're kind of behind the eight ball from a governmental perspective, I don't think we're going to succeed unless we learn to overlook kind of superficial differences. Right, the cannabis community needs activists, it needs operators, it needs ancillary providers, and I hope we can all remember that we have a common stake in the progression of plant medicine because we've devoted so much of our lives to this right, and so hopefully we want to make that investment worth it and we should learn how to work together as best we can.

Ben Larson: 56:04

Amazing. Thanks so much, hirsch. I really appreciate you taking the time and yeah, it was a little bit more serious than normal, but it was certainly due and I appreciate you especially taking the time out of your travels to brief us on everything that has happened, taking the time out of your travels to brief us on everything that has happened over the last couple of days. So we'll touch base soon and see what's happening and hopefully we'll get our spirits lifted by some of the activities in the coming months here Totally.

Hirsh Jain: 56:30

I hope to see you guys, and maybe other people, at Benzinga Anaheim next week and we can lift our spirits.

Ben Larson: 56:36

Very good, we'll see you then. All right, anna Rae? Well, do you feel like you got to exercise some of those anxious thoughts that have been swirling around in your head?

AnnaRae Grabstein: 56:47

Yeah, I just want to see the path through it. I said to you yesterday like a lot of what I try to do in my work is take in all the information and the data and then figure out what I think might be a path through it all. And it's not super clear right now, when you're thinking about business, how to predict the future and what the right path is through the uncertainty. And I think that we all just need to keep taking it all in and having these types of conversations to make sense of how to make good choices.

Ben Larson: 57:23

Yeah, what do you think folks? Did we miss anything? Did we get anything wrong? What's your take on the election and our prospects for cannabis in the future? Thank you, thank you. Thank you for joining us and listening and interacting and engaging, liking, subscribing, doing all the things Huge. Thank you to our teams at WITOSA and Wolfmeyer. Thank you so much for supporting us as we've gone through this journey this year. This past week has felt a lot of gravity, but we got more to come. This journey does not end, as you know, so until next time, folks, stay curious, stay informed and keep your spirits high. That's the show.