Ben Larson: 0:05

Hey everybody, welcome to episode 70 of High Spirits. I'm Ben Larson and with me, as always, is Anna-Rig Grabstein. It's been a couple weeks, but now it's December 11th 2024. Still, we're going to catch up because, yeah, wow, what a whirlwind. We had Thanksgiving, we had MJj biz. I just got back from la in bevnet and trying to settle back in before before we hit the rest of the holidays. So, anna ray, how are you doing?

AnnaRae Grabstein: 0:34

I'm good, I'm a year older than the last time we talked, it was yesterday. Happy birthday.

Ben Larson: 0:41

Thanks I. I should know that. Why don that? I'm an asshole.

AnnaRae Grabstein: 0:46

It's cool. I didn't really make a big deal about it, but I had a great birthday, did you?

Ben Larson: 0:52

get your haircut.

AnnaRae Grabstein: 0:54

Before Vegas You've seen me.

Ben Larson: 0:57

I would say I went to.

AnnaRae Grabstein: 1:01

You can't tell on the video, but I'm an accidental redhead right now, a little bit more than I would prefer. But as one actually didn't have time for any color, because I needed to take a call with a client and she was like it's okay, I'll just put the color in your hair, you take the call in your car and then I'll come and wash it out, and she washed it out and I was like, uh, that was not the plan well, at least, at least, at least it's.

Ben Larson: 1:46

I don't know what age it becomes where you migrate from red to purple.

AnnaRae Grabstein: 1:50

But yeah, totally you didn't end up there, so that's good. I didn't end up there and I think that that's like when you're 70 or 80. But my birthday was really fun. I celebrated on Saturday with friends and then last night my husband took me out to dinner and to one of our favorite bands. The Bar Brothers was playing in San Francisco, and so we did that, and if people have been listening to the podcast, they might have heard me talk about my hobbyist passion for San Pedro cactuses and as my birthday gift I asked my husband and son to build me a new bed in the backyard for me to plant cactuses, and I took a half day off work yesterday and they had prepped Like a planter box.

AnnaRae Grabstein: 2:37

Exactly. I wanted a new area to put more cactuses in the ground, and I spent half of my day yesterday instead of working planting cacti to start my new year.

Ben Larson: 2:52

Very nice. Well, congratulations and happy birthday again. I'm a terrible friend.

AnnaRae Grabstein: 2:58

We're good. You owe me a hemp beverage Cheers.

Ben Larson: 3:03

The next time I see you, which hopefully will be next week, we're going in person, hopefully so yes, yes, man, I don't even know what day of the week it is, and it doesn't help that we're recording on a different day.

AnnaRae Grabstein: 3:15

Wow, I know, tell me about your thanksgiving uh, oh, disneyland.

Ben Larson: 3:23

I went to dis, to Disneyland with my family. That was. It was a lot of fun. We did a road trip. We went from the Bay Area down to LA. We stopped at Pinnacles National Park on the way down and did a little hiking. Really amazing rock formations and caves. You basically hike up the side of this hill but you do it inside a cave like a rock cave and it's. It was just really cool. And there's like this little reservoir up on top. And then I got to show my kids, uh, my old stomping grounds at Cal Poly. So we we stayed downtown slow. I took them around campus with my wife. We ate at Firestones Anyone that knows, uh, san Luis Obispo knows the Firestones tri-tip sandwich. Firestones Anyone that knows San Luis Obispo knows the Firestones tri-tip sandwich. And then the next morning we went out to Pismo Beach and had Splash Cafe, the clam chowder, just all the hits. And by the end they're both convinced they're going to Cal Poly. So I did my job.

AnnaRae Grabstein: 4:16

I love that. I think everybody should take their kids to visit the colleges that they went to if they did, or just a college in general. I did it my 20 year anniversary from UC Santa Cruz and we went and walked the campus. This was like yeah it was so fun.

AnnaRae Grabstein: 4:32

And there was actually. We walked through the area where the dorms are and some current residents of the dorms invited us in and let us walk around and show the kids the dorms. And I mean I don't think that anything seems more fun to like an elementary school person than getting to live in the dorms away from your parents. So fun.

Ben Larson: 4:52

I love it Sounds kind of fun as an adult. Yeah, Anyway, we did Disneyland afterwards and Disneyland did not disappoint and you know we had a lot of anxiety about it. In fact, we packed a lot of infused products and while we did consume them, it was also a very nice time. It's just like you know, it's a big machine but it's a well-tuned machine and it was just magical during Christmas with all the Christmas lights and music and our last night there. You know know we broke the rules. We stayed up extra late. Uh, we got to watch the fireworks show and even after the fireworks show, like my, my daughter uh got sucked into this like character dance party that was happening on the stage in tomorrowland and lilo and stitch were dancing on stage and she just gravitated towards, towards the dance floor and she proceeded to dance to the musical performances for like the next hour and a half and like saw, like Goofy and Pluto and all this kind of stuff.

AnnaRae Grabstein: 5:59

And did you join her on the dance floor?

Ben Larson: 6:01

Yes, yes.

AnnaRae Grabstein: 6:02

Good, okay, yeah.

Ben Larson: 6:04

All four of us ended ended up there, but she was definitely the first. We're like trying to keep an eye on her at first and um, you know, it was at this point getting towards like 10, 30 and um, she was like just leaning up on the stage at a certain point, just like in awe, and so it's just like that kind of um yeah, perfect, ending to to a disneyland trip nice.

AnnaRae Grabstein: 6:27

Well, I hope we're not boring people too much with our family stories. Uh, no one watches this. It's okay. Yeah, it's fine, and I think it is a great segue.

AnnaRae Grabstein: 6:37

We have a lot of news and kind of complex stuff in cannabis to talk about today but the first thing that we want to talk about is actually MJBiz and a little download, and I think I'll cue it up by just saying that who we all are as humans and as people, as individuals and like the stories that we were just telling about our families, are just one of those things that gets to be a part of going to conferences and seeing people at events, and so that was really one of the things that I loved most about being at the wild, crazy mess of Weed Week in Vegas was getting to connect on a human level with so many people. But, yeah, tell me, tell me how your time was and some big takeaways. What do you got?

Ben Larson: 7:21

Wow.

AnnaRae Grabstein: 7:23

Does anybody out there not know what mj biz is? Do we need to explain?

Ben Larson: 7:27

it's, it is the. I've heard many different labels for the the super bowl of cannabis, the, um, I don't know. For me it's vegas, is disneyland for adults and also hell, um, I, just I, I don't have a lot of self-control, I think I, you know, tuesday night I showed up, I ended up seeing like the Keefe and Can team and before I knew it it was four thirty in the morning and my Wednesday was really rough. But so sorry if I met with you and I seemed like I was struggling because I was, and that's Vegas. But you know, a lot of business got done.

Ben Larson: 8:05

What I, what I think I realized is you know, it's this kind of the same old story with the broader cannabis community. You know, still a lot of challenges, still a lot of people needing to pay their bills. Things could be better from a regulatory perspective. And then you know the, the, the tale of the other city is is hemp beverage, uh, which didn't I don't, from what I heard, didn't have a huge presence outside of the chandelier bar and and our suite, uh, where we hosted the, the morning mixer on thursday, which thank you to everyone who came. We saw a lot of, uh, old future guests, business partners, all that kind of stuff. And yeah got a lot of positive feedback and so that's what's really filling my cup. That's like. My major takeaway is how excited people are about that event, how many people want to partner on it next year and make it even bigger and better.

AnnaRae Grabstein: 9:01

So I'm excited to start planning that um, so I'm excited to start planning that. Yeah, so we had this incredible event 350 people rsvp'd to come to it.

AnnaRae Grabstein: 9:11

I was full of anxiety that our suite and the space for our party was going to be too small for all of the people and it was so sorry for everybody that came, but I really care about being an excellent host and the idea of too many people coming to our party made me feel that I would not be an excellent host. But I will say a few big takeaways. It really was the only beverage themed party and at the entire super bowl of cannabis, which is absolutely wild compared to how much people are actually paying attention to the category, and it wasn't even that much of it wasn't only supposed to be beverage themed, but we had lots of beverage sponsors and we must've had probably 40 different companies that sponsored by providing THC beverages that we were able to put on display at the party. And my favorite thing at the party was just standing near the display of products and watching people come up and explore them and pick up the cans and check them out and talk to each other about what kind of flavors and and and just like categories of beverages they're drawn to, whether they like more of a seltzer or more of a traditional soda, whether they like more of a seltzer or more of a traditional soda. It was just really fun to watch how excited people are to try these things and I even tried a few beverages for the first time that were sponsors to the event that I went home and tried to order because they were so good and then I could not because of the ban in California.

AnnaRae Grabstein: 10:41

You can't ship to me. So Louie, louie, I loved that beverage. I loved flavor, so good.

Ben Larson: 10:50

Yeah, I was. I got to hang out with Eric Becker again in LA for BevNet. That this week Awesome, awesome product. A huge thank you to Sarah Falvo for for really heading the leading the charge on on the organization of all that. Uh. To our recruiting partners, jbc, for for hosting or or sponsoring Um, it was just a great. I mean really leveled it up from the year prior. I think we probably had three times as many beverages, um, and and. Look, I mean I guess this kind of helps create a segue for just like. I guess another takeaway from MJBiz is I heard less flattering things about a lot of the other events, and not that I want to invite a whole bunch of competition, but I heard a lot of the other events were pretty bro-tastical or just like dark and hard to have conversations.

AnnaRae Grabstein: 11:45

Did you just say bro-tastical? I love that word. Wow, I'm going to use it. Yeah, so our event was in the morning and you know, ben, you talked about staying up late and there's a lot of that in Vegas. But people also do come to work and want to form new relationships. Like I like to get to know people on a deep level, and if you're at a loud nightclub at 11 PM and there's super bumping music, it's really hard to get to the heart of who somebody is, and so I loved that. We got to meet with people for their first event of the morning when everybody was fresh and ready and, you know, their feet didn't hurt from being on their toes all day, all that stuff. Yeah, I think we should do more. I want to hear from people what type of other times they want to have events like this.

Ben Larson: 12:36

I was trying to think of other conferences that might be fun to host, stuff like this or or other things for us to piggyback on when people are together to have more experiences to get to try beverages and get to know them yeah, and, and you know, I I know we're guilty of talking about beverages a lot on the show and maybe it's because I'm surrounded by them and because of what I do, but I like kind of like feel like I need to remind our audience that you and array, you know, are interested. But, from a perspective of, this is what is important in the hot in cannabis right now. And it's interesting for me to hear that there wasn't a large presence outside of uh, outside of our event or or our suite, and it's crazy because the meetings that we were having and I have to not give too much transparency into who is coming into the room, but there's a lot of like just a beverage conference, but a lot of participation from hemp and THC brands. Steve Jabbour from Spex, the Texas retailer, was on stage and just talking about this emerging category For him as a mainstream alcohol retailer.

Ben Larson: 14:03

He said on stage, this is the fastest, most exciting category that he has ever experienced and that all these other brands, all these other products, the mushroom seltzers, all this kind of like all this kind of like cutting edge uh categories, he's like they just all pale in comparison as far as like the interest level, uh, of these, and so you know I ran into brands that I've admired in the mainstream space a long time, that I would, you know, love to see getting into the space, and they're warm to it. Now they're getting in. You know, marketplaces that focus on non-alc retail, they're going to get in. You know it's like it's just it's happening and people are ready.

AnnaRae Grabstein: 14:45

Well, it's the same thing. Like you said, my work is across the different categories of cannabis, with ancillary companies, with supply chain operators, but everybody's paying attention to beverage and is looking at different paths to growth, and this is one of them, and it's a serious one. And if you're someone that makes a mushroom beverage, my guess while that is not my expertise is you're realizing that your addressable market is only so big and that people are coming back time and time again for THC beverages, but they might not be coming back for your like apple cider vinegar, adaptogenic brain drink. And part of that is that THC makes you feel a certain way and you consume, whether it's a beverage or a gummy or whatever the form factor is, but you know that you took it. It's the same problem that you know the FDA was just having with their double blind studies for MDMA and they're saying well, the people that took the placebo knew and the people that took the MDMA knew, and it's like, of course, they did. You know MDMA. And same thing. Like you know, if you consume some THC and if you like that, you're going to come back and have more, and what we're seeing is that people seem like they like it. They like it a lot and and yeah, I will say there were some other wins.

AnnaRae Grabstein: 16:08

It wasn't just beverage at MJBiz. I did spend some time at the conference on the expo floor. I walked the whole thing and um, I think that there was an area where um, genetics and seed companies were highlighted. That was very different in years past because of the farm bill and of seeds being qualified as hemp without having THC in them. The seed companies were actually selling seeds on the floor at MG Biz and I don't think anybody has.

Ben Larson: 16:45

So this is not my world. Are people like growing from seeds, like we always talk about clones, like cloning was a big part of the industry still, as I'm sure?

AnnaRae Grabstein: 16:55

oh, it still is yeah, but people do grow from seeds still apparently yes, uh, well, so wow, this is a huge can of worms to open and we should talk more about this on its own episode.

AnnaRae Grabstein: 17:08

But yes, commercial cultivators do buy seeds. They generally aren't growing individual plants to cultivate for commercial harvest. From seed they're growing out mother genetics and then they take clones from the mother plants that are grown from seed to populate like a whole grow room. But part of what is worth talking about is there are a whole bunch of genetics groups now that are starting to breed more stable seeds and are marketing them as crop seeds for crop, so that you would plant out the whole room and you would skip the clone and the mother phase and just go straight into growing from seed at a on a large, on a large scale yeah, I guess that'll become super important, especially in a post-legalization era where you're talking about just planting fields of it and wanting consistency, because you're not going to go plant a field of clones yes, you can still plant a field of clones yeah, oh, that's right.

Ben Larson: 18:12

I've seen it on the videos where they sit in the little thing and it's like absolutely can.

AnnaRae Grabstein: 18:16

It's even done in certain other types of vegetable crops and things like that. But there there are some benefits on both sides. But anyway, the the genetics people, I think had a better and different presence than they had in years past and they actually got to make revenue from the price of their booth. So that's pretty cool. Yeah, I don't think that there was really anybody else in that category of driving revenue.

Ben Larson: 18:43

Did you go to the show? I did. I did not go to the. Did you go to the show?

AnnaRae Grabstein: 18:46

I did. I did not go to the conference panels, but I walked the whole floor. That day I walked close to 40,000 steps. It was crazy. My legs felt like they were going to fall off at the end of it.

Ben Larson: 18:59

That's insane. Yeah, that's a lot of booths.

AnnaRae Grabstein: 19:03

So many booths and you know, there were some things that I had to kind of look a side-eyed at, Like I don't know how many vape hardware companies or packaging companies the industry can really support, but there were a lot of those types of booths and I don't know it doesn't make any sense to me how that many companies can can sustainably operate in the state in the space and sustainable is the wrong word because just the vape hardware and packaging at its core are not sustainable in almost any way. But what I meant was financially sustainable. But yeah, so the event was was I think that they tried to innovate the company and to really make MJBiz more relevant in today's times. They also included brands and retailers in a different way than they had in the past. Not a ton of participation there, but definitely some important participation. So I enjoyed it and I will probably go and walk the floor again next year. They actually thank you, mjbiz. They gave me a press pass because of this podcast, so thank you very much, mjbiz.

Ben Larson: 20:13

Thanks for the invite, MJBiz Thanks for the invite.

AnnaRae Grabstein: 20:20

Anything else that we want to mention about MJBiz before we go on to some breaking news and some more in-depth discussion.

Ben Larson: 20:27

No, I don't think so. That was. I'm excited that MJBiz is still going strong. It is like the thing you know I think I talked about this last year. It's like it's that time of year where you just like reground yourself like how far we've come as an industry or haven't, but it doesn't seem to be slowing down at all. So we'll see all next year at our next morning mixer. But maybe we don't have to wait till MJBiz.

AnnaRae Grabstein: 20:55

Maybe we do something in the mean.

Ben Larson: 20:56

We're not going to wait.

AnnaRae Grabstein: 20:58

We're not going to wait. I'm going to put that flag in the ground. I'm not sure when it's going to be, but sometime before MJBiz we will do another morning mixer with wake and bake, THC beverages and some bagels and donuts.

Ben Larson: 21:12

It works pretty well. I'm a big fan.

AnnaRae Grabstein: 21:15

Yeah.

Ben Larson: 21:15

Yeah, so what's next? What else is top of mind for you?

AnnaRae Grabstein: 21:19

Breaking news today, as of a couple hours ago Minnesota.

Ben Larson: 21:25

Minnesota, my favorite state totally so.

AnnaRae Grabstein: 21:30

Um, if you guys have been listening to the podcast and more of you have all the time you would know that I have been yelling um from the mountaintops about the injustice that has happened in minnesota over the past couple weeks with this mass rejection of social equity applicants into their adult use lottery process. And today Minnesota announced something that might be a move towards justice. In my opinion, there are mixed opinions, but they have decided to cancel the lottery and create a new process whereby applications will be reassessed in February, all of the projected applicants will be invited to participate again to fix the deficiencies in their applications, and a lottery will still be conducted, but it will be both for social equity applicants and general applicants at the same time, and that will happen likely in May or June. So the big injustice here to present both sides is that the lottery was supposed to happen basically now. So the whole adult use program in Minnesota is being pushed forward six months.

AnnaRae Grabstein: 22:43

And also the folks that did make it into the lottery and weren't rejected the one third of the applicants were excited that they had less competition in the lottery and felt that they had done everything right. So those groups are disappointed in this outcome. However, I think that Minnesota made a whole lot of mistakes and I think that where this is landing is going to be a lot more fair, so I'm really hopeful and excited and feel that this is justice, so woohoo big proponent of this is like this the every effing time they try to roll out, a system is botch it and yes and even after it gets rolled out, then it's like it's still not good and it's just like overly regulated and the businesses are just dying left and right, like it's crazy to go.

Ben Larson: 23:40

You know we I've been traveling a lot the the second half of the year here, going to Charleston and Charlotte and Austin, nashville. It's just like to see what red state weed looks like. It's not perfect, probably needs a little bit more guardrails, but just to have that unfettered access in places where you would hope to see it is just so incredible. It's like how do we meet in the middle? Like how do we bring this all closer together and realize that the consumer wants it, that they deserve to have access to it and that the world's not going to fall apart if we actually create that for them?

AnnaRae Grabstein: 24:23

I mean, I'm with you, I believe in open access at its core.

AnnaRae Grabstein: 24:27

But I would push back and just say that a huge part of what I try to do is to not be in denial and accept the reality of what's in front of us. And I find it very unlikely that a world that free and unfettered access to anything that looks like, even in even red state, weed is is going to continue for much longer. And that is because we already know we've been talking about for weeks and there's not any new news about it. But you know, the farm bill, which is the unlock for hemp, is up for debate and what that looks like could go a lot of different ways. But it doesn't seem likely that the Republican establishment, that the Democratic establishment, really that the politicians and the powers that be want to allow unfettered access to THC and even the states that have allowed it, are creating more regulations for safety. So in the end, let's accept reality that there is going to be some sort of regulatory and licensing regime. Like how you skin that onion is complicated, there's lots of.

Ben Larson: 25:40

I mean I'm okay with regulations and licensing. Like the alcohol industry has regulations and licensing, the cigarette industry has regulations, licensing, but they also have like economies that work, they do but they also have limited licenses.

AnnaRae Grabstein: 25:54

Like you want to go open a bar in san francisco, like there's a limited amount of liquor licenses, and so there is people, people buy and sell liquor licenses because they're not issuing new ones, and that has created some amount of safety in the market for the people that choose to invest in one of those licenses. Yeah, it would be amazing if the market could just take care of it and there could be an unlimited amount of licenses and you could just go register, like in Texas.

Ben Larson: 26:25

But I just I don't think that's where it's going yeah, speaking of speaking of texas, uh, I I heard the the. Uh, the numbers have really shot up. Last time we were talking to when ben megs came on from howdy, I think we're saying there was something like 7 000 licenses had been issued and it's pretty easy, like, if you're a retailer, you apply it's probably like 1500 bucks or something like that,000 licenses had been issued and it's pretty easy, like if you're a retailer, you apply it's probably like $1,500 or something like that, and then you have your hemp license.

AnnaRae Grabstein: 26:50

Way, way less.

Ben Larson: 26:51

But yeah, is it less? Yeah, they should up the price. But at BevNet I heard that it might be even in excess of 20,000 now, which is an insane number. But at the same time the Lieutenant Governor, dan Patrick, is putting out legislation that would essentially ban all of intoxicating hemp. So interesting to have a Texan following in the footsteps of a California governor.

Ben Larson: 27:24

All that to say and I, you know, I was, I tuned into Emily and size podcast and they had highlighted it but boots on the ground, at the beverage conference I got to speak with, with Steve from specs, the howdy team. There's a lot of confidence that this doesn't get go through as written and so so, um, you know, as we talked about before, texas is on this two-year cycle where you have a very limited time to have the legislative session. If nothing goes through, or if it does go through, you have another two years before you get to fix it. Um, and so it seems like there's a lot of acceptance around the low dose beverage category to kind of like maintain that opportunity, and it seems like the political appetite is that if that's there, then people will come to the table and compromise, but if it's an all out ban, highly unlikely that it goes through.

AnnaRae Grabstein: 28:24

So people say that the lieutenant governor has basically a golden pen and the priorities set by the lieutenant governor are the priorities that are going to push forward with the legislative agenda. Breadth of discussion around policy as it relates to THC in Texas and I get that Lieutenant Governor Dan Patrick has a ton of power has made this broad sweeping proclamation about banning THC. But there's just so much more to this puzzle. We've got this really unrealized medical marijuana program we had on Richardson from Texas, from texas original, earlier this year. There's only a deplorable system it's a deplorable system.

AnnaRae Grabstein: 29:14

There's two operators. They're doing less than 50 million dollars significantly less collectively for the whole entire state, while the hemp space is doing potentially whit economics as $8 billion a year. So it's like we've got this crazy disparity between the legal system and the unregulated hemp system. So there are other bills that are being proposed to address this in what I perceive to be much more sensible ways than what the Lieutenant Governor is promoting. We have a bill that's been introduced by Representative Jessica Gonzalez it's a house bill and that is a recreational adult use bill to allow and create an entire adult use THC program that isn't specific to hemp. We have another bill that is by a different House of Representatives member to expand the medical program, to expand the qualifying conditions and the form factors, to basically create more of like a Florida-style medical program in Texas. And then, lastly, we have another bill that is being proposed to actually lead efforts to regulate hemp products and um so how this all comes to be.

Ben Larson: 30:36

Maybe it's true, maybe the lieutenant governor wields, wields the gold pen and anything I think he does, from what I, what I've heard, I think he does with half of the legislative body, but I don't think he has the power to kind of unilaterally get something through, yeah. So he's almost there, and he's been known for expanding his power as well. He's been lieutenant governor, so he just hasn't been fully successful with that yet.

AnnaRae Grabstein: 31:05

Yeah, and I mean good on him. Great, that sounds wonderful to have that much power, and yet there's just there's a lot of stakeholders that are a part of this discussion and, like you said, you spoke with some of the leading beverage folks that we've talked to here. I know that the folks at Texas Original are really really clever and smart when it comes to policy and I'm sure that they're interested in more than just banning hemp THC, but really expanding their market opportunities. Like you can't just take away. Even if he was successful at banning hemp THC, it would just create a massive illicit marketplace without in some other way, with some other complementary policy to allow new types of access. So, lieutenant Governor, if you're listening, the people in your state like THC a lot and we can't ban something without creating some other regulated solution to access. So please, like, like, let's not be short-sighted here. Texas, this is way too big of an opportunity to do something that is sensible, please yeah, it's, uh, it's all the rage these days.

Ben Larson: 32:20

uh, just was it. Yesterday I got a text message being like oh, uh, representative lashawn ford from illinois is in la, would you be willing to meet with them? Because he's concerned about the governor in illinois doing the same thing, which we all know is msl land, so I wonder why that is. But, um, so he actually came through and because it was a beverage conference, I got to pull in a few friends which we had diana eberlein, who's the president of the coalition for adult beverage alternatives. We had, uh, shreyas from from delta bev. It's a mate like he's got like a 22 million dollar facility in southern california that's doing co-packing like large scale.

Ben Larson: 33:05

Um, we had ken from colex, uh, one of our beverage sponsors at the uh, the morning mixer. And then, um, oh, shoot, I'm probably missing someone. Uh, but it was so great to actually sit down and give them all the talking points Like here's the impact, here's the negative effects of a ban, here's why you don't need to do it, here's why you don't need to do it, here's why it's actually bad precedent about what he did, because it was on the heels of failed legislation rejected by the legislature and, yeah, sending them back up to Illinois, hopefully to, to, to work some magic, but it's it's. It's interesting to see these politicians just trying to yield like unilateral power. Um, I don't like, uh, the precedent that it sets no, and it's unfortunate that it came from california.

AnnaRae Grabstein: 33:58

California really needs to get out of its own way. The, the ban that california started with, was not intended to set the stage in a domino effect to encourage states all over the country to levy bans as well. It was intended to be a push to figure out a way for both sides hemp and cannabis to work together and to do some type of positive integration.

Ben Larson: 34:26

Which we have heard right or we are doing. I should say If you watch this show, you're probably relatively plugged in and have seen that there are brands on the hemp and cannabis side that have come together that are doing some horse trading, figuring out what makes sense and hopefully makes it viable for both sides to participate in the California market and, in turn, enable California to actually truly lean into the California weed branding that they're so proud of and play in the the national marketplace, because that's what's at stake right now. Like Governor Newsom made it impossible for California brands to really play on the national stage of what's happening in hemp and it's big. You go to these other states and there's entire aisles of THC products. If you're going to make it so like a California company can't participate in that, it's like what are you even doing?

AnnaRae Grabstein: 35:21

And even not on the brand level but on the manufacturing side. California has been the center of agricultural production for years and on the back of that has gotten really good at post-harvest manufacturing of all types of products, but in particular wine and beer. There's a ton of that that has been produced here for a long time and some of those beer companies are struggling Exactly time.

Ben Larson: 35:47

And some of those beer companies are struggling exactly like I was actually speaking with the head of co-packing for for a brand that we all know in the bay area 21st amendment. They have a large facility out in san leandro and up until the band that they were just they were about to flip on the switch to get into co-packing for THC beverages and they were really hoping to fill up that extra capacity that they had with that option. But yeah, so that's revenue, that's tax dollars, that's jobs, Jobs infrastructure, all of these things, and we need those things here.

Ben Larson: 36:23

Yeah, yeah, so a lot of work to do.

AnnaRae Grabstein: 36:35

Yeah, I'm, I'm, I'm hopeful. I don't know why I stay hopeful, but I do. I stay hopeful on all of this and and I not not that governor Newsom needs to change the law just for me, but it is. It has been a bit of a surprise. I thought more brands were going to be pushing the limits with their direct to consumer uh fulfillment because it is so hard to track. And I have noticed, as someone that lives in California, if I have gone and tried to purchase um uh hemp derived THC product, every single brand that I have gone to has chosen to be in compliance and has said oh, your shipping address is in california, we cannot send you this product, and it's. It's been a bit of a surprise.

AnnaRae Grabstein: 37:21

I thought there was going to be more refreshingly responsible yeah, and there's a lot of humans you can still find them.

AnnaRae Grabstein: 37:28

You just have to look a little harder well, the brands that I love their products for have chosen, and no big surprise that the ones that I like are also choosing to be compliant.

AnnaRae Grabstein: 37:38

I'm sure there are others out there, but, um, yeah, that's been interesting. Um, some other things that have come up since, uh, since we last checked in on the news is there has been some shifts, um, in terms of the process for schedule three. Um, while we didn't have any big news come out of the december 2nd hearing, um in front of the administrative law judge, we do have more clarity on what the process is now and what that process looks like is. Witnesses have been scheduled and they have dated that. They're going to be testifying and that starts, I think, towards the end of January and it goes into March and then after that, theoretically, the ALJ judge would make a recommendation and ruling moving more towards Schedule 3. But I think that the more interesting part of that news is just starting to think about what might actually happen in a new Schedule 3 space, and I know you had some thoughts. You were thinking about GTI and spinning out their performance. What are you thinking about with Schedule 3 and what that might mean for 2025?

Ben Larson: 38:53

Yeah, good question. Before that, just like huge shout out to my colleagues at NCIA, and specifically Khurshid Koja, who got a very nice compliment from the judge for a fine piece of lawyering, because really the only witnesses really were supposed to be people that were negatively impacted by the decision for rescheduling, and so they did a very good job, after being selected, of being like hear this, we are actually very much in support of this move, but this is the aspect of it that might negatively impact us. Um and so at least we have some representation there, like for you know, like, uh for the just making sure that our voice is heard, because it was very scary, like seeing how many uh people were going to be having that opportunity to be heard and to not have any defense against. It was scary. All that to say, you know, schedule three process still moving forward, likely to go through, and I people used to say, oh, how's it going to affect your business? I'm like, largely not, like you're just going to keep operating, things probably aren't going to change. It's not like it's not coming through to like shut anything down. If anything, it's just to, like you know, hopefully remove 280e and and that sounds nice a little bit of extra money in people's pockets, but then I started thinking about it's like not just a little bit of extra money, it's a lot of fucking money.

Ben Larson: 40:28

Like in gti has been on the tips of people's tongues uh, lately, because it's just their power moves that they're profitable, all this kind of stuff. They will be extra profitable, uh, in a schedule 3 era, and extra profitable means 150 million dollars of extra cash flow and so, like, if they're making power, power moves, now, what's 150 million dollars of extra cash every year, if not more uh gonna do for them, um, or for the rest of us? Right, like, obviously, bills will probably get paid. I'm sure they're fine at paying their bills. Uh, acquisitions, obviously, uh, obviously will happen and just money will be flowing. And so that's just one operator, right, it might probably save the ass of another handful of MSOs and hopefully the smaller operators too, but I have less visibility into those impacts those impacts.

AnnaRae Grabstein: 41:34

I have confidence that the GTI won't be guilty necessarily of passing those savings back that they get from the tax man if schedule three moves forward back to by reducing prices to the consumer.

AnnaRae Grabstein: 41:42

But what I one thing that that I have seen happen in the market in every state is that, you know, the price of cannabis continues to go down for consumers and that has had all types of trickle down effects across the industry.

AnnaRae Grabstein: 41:57

And I've been trying to figure out why, when we have retail stores that are not profitable even if wholesale prices are dropping, why are people just using the same markup and not making it so that they have profitable sales? It doesn't matter if you've got a great margin if you still aren't covering the cost for your rent and your staff and all these things. And it seems to be the pattern in the race to the bottom that has been adult use cannabis to just keep lowering prices endlessly and that when we get any type of savings, that that gets transferred down to cheaper weed to the consumer. And I just don't think that weed can get any cheaper at this point in many markets. There are some markets where it is still a profitable venture, markets where it is still a profitable venture, but we're looking at like this massive tax issue in California, with it's estimated of over a billion dollars of taxes that are owed to the state from retailers, and then why are retailers selling $1 joints? That's what I want to know.

AnnaRae Grabstein: 43:05

It's like you can sell the joints for five dollars and people will still buy them and we're just, we're breaking the consumer. Um, as as inflation and the prices of everything in the market have gone up? Uh, we have. We have seen the opposite, uh, in cannabis, where prices just keep going down. I don't know, I'll get off my pedestal, but I am confused of why people don't understand the way that the economies of commoditization are affecting their retail businesses and why that is the cause of so many retailers being unprofitable. They just keep lowering their prices. Of course they're not going to make money.

Ben Larson: 43:47

Yeah well, $1, $5, $18. People's bills are not getting paid. Keep lowering their prices, of course they're not going to make money. Yeah well, one dollar, five dollar, eighteen dollars. Uh, people's bills are not getting paid. So, um yeah, I don't know what the answer is.

AnnaRae Grabstein: 43:56

The answer is deschedule and yeah, light it all on fire. Um. So I think that's all of our news for today, I think that's all.

Ben Larson: 44:10

Yeah, it's good to be back it is we, kind of unannounced, took a little bit of a break, but I think it was very needed. I think everyone else was doing so many other things. Anyways, no one, no one missed it, but it is good to be back. We have our end of the year wrap up next week and then and then it'll be the new year shortly thereafter. So kind of wild, another year in the in the bag.

Ben Larson: 44:32

Everyone, if you're listening, please go like and subscribe, share. We're going to be investing in the show, going into the new year and excited about all the things that we're going to do. Apparently we're planning more morning mixers and so we'll have more information about that in the not too distant future. But really, really just so grateful for all of our fans, people that come up to us at these events even non-cannabis events now and coming to the mixer and hanging out with us. All of our beverage sponsors slinging beverages at 10 am ona morning in Vegas, really energized to see that Love the community that we're building. Thank you everyone for tuning in every week and supporting us. It means a lot. Until next time, stay curious, stay informed and keep your spirits high. We'll see you soon.