AnnaRae Grabstein: 0:00

Do I need to be closer to this Good?

Ben Larson: 0:09

Hey everybody, welcome to episode 71 of High Spirits. We're recording Thursday, december 19th, 2024. And we're live in person. It's the end of the year and so we're going to do a little bit of a wrap up today, checking on the big happenings, what's top of mind, and then what's going to happen in 2025.

AnnaRae Grabstein: 0:28

Stoked to be here. Thanks for hosting today, ben, of course. How are you?

Ben Larson: 0:31

doing.

AnnaRae Grabstein: 0:32

I'm good we're here at Ben's house at Burtosa and Berkeley.

Ben Larson: 0:37

Practically my house. There's a Christmas tree right over here.

AnnaRae Grabstein: 0:39

You also have a menorah.

Ben Larson: 0:41

We do. Yeah, we're very inclusive here.

AnnaRae Grabstein: 0:44

Not everyone is represented. That I see with your holiday symbolism, but like you're hitting a lot, there's a big pole right over there. What's the pole for?

Ben Larson: 0:53

Isn't that like a Seinfeld?

AnnaRae Grabstein: 0:57

Wasn't there like a pole or something? I'm not sure. People keep telling me that it's going to get quiet towards the end of the year, but I've actually been hustling hard. There's been so much work and I actually kicked off a new project last week, so people are not necessarily slowing down.

Ben Larson: 1:13

Kicking off project mid-December that's bold.

AnnaRae Grabstein: 1:16

I know, but it should be a good one. How about you? Are you guys getting slower? It's been nuts.

Ben Larson: 1:22

Finally, my travel ended last week, which was great, but I'm trying to squeeze everything into this week to really protect a couple weeks over the holidays. It's just made for a very sleepless week. And then Alistair was sick yesterday, which just you know having kids throws wrenches and things.

AnnaRae Grabstein: 1:41

It sure does. Well, having a sick kid. Did that stop you from hearing the news about the big Vireo deal that was announced yesterday?

Ben Larson: 1:50

I caught glimpses of it, but, as always, you're more informed than I am.

AnnaRae Grabstein: 1:56

Well, I want to shout out Tyson McDonald, who is both a friend and has been a mentor to me this year, but he just was appointed CFO to the new Vireo I don't know if it's, we'd call it Vireo 2.0.

Ben Larson: 2:10

So for our listeners, and maybe for me, what is Vireo Got?

AnnaRae Grabstein: 2:15

it, yeah. So Vireo for people that maybe don't walk out as much as me on cannabis companies is a public company, an existing public company that has had a fairly small footprint in some important markets. They're one of the existing operators, medical operators in Minnesota, a registered operator, which means they're a medical licensee in the state of New York, and then they also have a license in Maryland and they have been flying under the radar. Mostly People might have heard about them because they have gotten involved in some litigation with Verano over the last couple of years.

Ben Larson: 2:55

That's probably why they sound familiar. Yeah, because I'm familiar with Verano.

AnnaRae Grabstein: 2:58

Yeah, I think Verano tried to acquire them and it didn't end up working out. But either way, acquire them and it didn't end up working out. But either way, vireo has been a small, by all metrics, public MSO and yesterday a major announcement happened that they got a very large infusion of capital and have acquired four single state operators, who all are very strong and profitable in their own right, plus a technology platform, and have now positioned themselves, depending on what metric you're looking at, to be a top six or a top eight MSO with some stronger growth opportunities, based on some upcoming catalysts, than almost any other cannabis company that I'm watching.

Ben Larson: 3:48

It really spurs a lot of thought for me, and I even go as far back as to when Canopy Growth received that $4 billion from Constellation. It's like $100 million sounds like a lot. $4 billion is an extreme amount of money, but what does that mean for the future? It's like people realizing that they can come in and just become a top competitor by buying it. I mean, time will tell if they can actually be that, but it sounds like they have a good fighting chance.

AnnaRae Grabstein: 4:16

Yeah, and what I know about Tyson is that he likes to pick winners and that he wants to pick winners that he believes are going to lead. He's very thoughtful. He's one of the smartest deal engineers of anyone that I have met in the space, so I can imagine that there are a lot more deals ahead here and that this is a team that's going to want to be acquiring more great operators across the industry. And we've been talking about roll-ups and consolidation consolidation since the beginning of time.

Ben Larson: 4:47

We were actually even talking to Seth about whether it was even going to happen this year.

AnnaRae Grabstein: 4:51

Yeah.

AnnaRae Grabstein: 4:51

And then, in the 11th hour, boom this is it, and this deal has definitely been in the works for some time. But, especially because it's a public company, nobody can talk about these things and I think they've done a very good job of doing just that and keeping it close to the chest until the time that it was time to announce. But I think that it creates some optimism around a public company. It also shows that there are thoughtful investors that are paying attention to kind of a new focused cash flow, ebitda positive business model that is going to carry us through 2025. And my hope is that it will encourage more roll ups on the back of this. And, yeah, I'm excited.

Ben Larson: 5:47

Now I have a new thing to think about over the next few weeks when I'm trying to create some white space for my brain, just like what would happen if someone decided to bring a $100 million check into the beverage category and launch a highly competitive beverage vertical.

AnnaRae Grabstein: 6:04

Yeah, and interestingly, every single one of these acquisitions at least from the announcement that they made yesterday is a no-cash deal. So it's all stock into the new company, and so the capital that came into the company is for growth, and my guess is that there's more capital behind it, depending on the different levers that these folks are getting ready to pull as things unfold, and for more acquisitions.

Ben Larson: 6:32

So you have a number of EBITDA positive companies with $100 million bankroll now.

AnnaRae Grabstein: 6:38

Yeah.

Ben Larson: 6:39

Wow, interesting, and there was a tech platform involved in the middle of all this. That made it an interesting deal, but I don't know why it was interesting.

AnnaRae Grabstein: 6:48

Yeah, the tech platform is called Arches. To be totally honest, I have never heard of this tech platform and I texted a few people yesterday when the deal was announced, and nobody else had either. So this is the one piece of the deal that is a bit of a mystery to me. I am open to learning more.

Ben Larson: 7:08

If you know, let us know.

AnnaRae Grabstein: 7:09

If you know, let us know. They've said in the announcement that the tech platform is going to be a tool. They've used terms like POS delivery platform, e-commerce. I'm not sure if this is an erp solution or if it's a pure retail play. I think um more to unfold. Interesting. I mean, I do pay attention to the different retail tech stack opportunities and options in the space, so I'm a little surprised. I haven't heard of it and it was just acquired, yeah, so you're gonna have to go revisit that tech map that we were.

AnnaRae Grabstein: 7:46

Yeah, how did I miss this one if it's so great, but I trust these guys. I think there's. There's probably a purpose behind it all, um something bigger going on so okay, so keep an eye on vireo keep an eye on vireo, totally, and I think their stock doubled yesterday.

AnnaRae Grabstein: 8:03

No big surprise. Um, we'll see if it keeps up and is able to withhold that. But I'll say, like you know, when we went to Minnesota, top fastest is that the two existing medical licenses which are owned by Vireo and GTI have an incredible early mover advantage in the state, and the fact that they already have infrastructure built that they're going to be able to get to market faster than a lot of the newcomers it puts them in a great position. So that's when I started paying attention to the company, and then I realized that their New York assets seemed pretty underutilized as well, and that isn't always a good thing. But if you're trying to find a good platform for growth, and underutilized asset base is a good place to start.

Ben Larson: 9:01

Yeah, yeah. Well, what I like about the regulated market, and especially in minnesota, is we've seen, uh, in the beverage category where low-dose beverages rule, kind of the open markets. You know, if you go into total wines and all that kind of stuff, that's what you're seeing in those markets. But in the regulated channels and dispensaries you'll find 100 milligram drinks and our friends at uncle arnie's who work very closely with GTI have been doing really well in these states and so it's kind of I know a lot of people when they were thinking about Minnesota it's like, all right, they already have medical market, they already have low dose hemp, like how does like what is the regulated piece really fulfilling? And it's like that higher dose product category.

AnnaRae Grabstein: 9:47

Oh yeah, and exploration of form factors, more combustibles there's a lot there for sure. Yeah, I love what you said about if someone brings $100 million to really any category you called out beverage, but what happens and what does that look like? Um, I hope to be faced with a lot more of those questions in 2025, I think we will.

Ben Larson: 10:12

yeah, I don't think I'm giving anything away by saying that I'm receiving a lot of emails lately that are just from people poking around or trying to gain an understanding of the landscape, especially like when it comes to our category so like investment bankers, m&a, like groups and you know we're not out soliciting or anything like that but it's like, oh, I might as well take these meetings just to see what, how they're thinking about things.

AnnaRae Grabstein: 10:39

Absolutely, and and I know we're going to be reflecting back on the year but in my work I'm starting to see companies instead of companies that are coming to me that are distressed and trying to figure out how to get out of distress, I am now having companies that are doing well and are profitable and efficient and are trying to figure out what next. No-transcript how do we grow a category that isn't going to be growing at the same pace that it maybe was when every new market was coming on, but that winners get to see incremental and sustainable steps forward?

Ben Larson: 11:38

It's funny. Emmett Bush on my team this morning sent out an image they had asked ChatGPT, like what is the difference between a startup and a company? And it went through these like five items about talking about like sustainable growth and focus on profitability and all this kind of stuff. And I just started reflecting I'm like, hey, it's nice to be in that position as a company ourselves, Like I'm like check, check, check. But also I feel like, hey, it's nice to be in that position as a company ourselves. I'm like check, check, check.

Ben Larson: 12:08

But also I feel like the supply chain, the industry as a whole, is kind of trying to make that evolution, and you mentioned it. But it made me also think that this year kind of rolled out as expected. I don't know if you feel that way, and that's not for everything. Politics was crazy, California hemp ban was crazy. There's a lot of craziness, as always. But I remember coming into the year when we were recording this episode last year of being like I'm actually really optimistic going into 2024. And I think it's going to be a good year and we thought people were going to be focusing on on profitability and building sustainable companies and and they have, and they have we got it right yeah, I think the year just got it right.

Ben Larson: 12:52

Like I don't want to take credit for getting anything right, it's just like the optimism and everything that we kind of anticipated uh happened, and so it's kind of nice. It's the first year I felt like I've been able to experience that in the recent past.

AnnaRae Grabstein: 13:07

Yeah, well, let's dive into it. I think that for this last episode of the year, we want to think about first the things that really will leave a lasting impression on us and reflecting on the biggest news of the year, and then we'll talk about what we think is going to happen next year, both in the industry and maybe with us. Yeah, what do you think?

Ben Larson: 13:30

I like it. Okay, you want to go first?

AnnaRae Grabstein: 13:33

Sure, I'd say that I'll start with some of the darker moments. Some of the biggest things that happened this year is that a number of companies ended up calling it. It was these threats. We've talked about extinction events of small farmers, but there were some extinction events from some large substantive companies MedMen, high Times Statehouse, which is Harborside, and Urban Leaf.

Ben Larson: 14:00

Speaking about hundreds of millions of dollars.

AnnaRae Grabstein: 14:03

I mean this represents probably billions. We didn't run the data before uh of of capital invested into these companies and um, they all ended up in the receivership, uh, in the receiverships, in the receivers hands, and um, all of them mostly held assets in californ. They all held assets in California. So the California market really had a hard 2024, unquestionably, and it will leave a mark for a long time. There's almost no MSOs that are operating in California anymore public MSOs.

Ben Larson: 14:41

And it's not getting any better. I just saw a post today that the DCC was considering increasing the licensing fees.

AnnaRae Grabstein: 14:49

Yeah, yeah. So so 2024 was a hard year for California, but you say it's not getting any better. I would. I would maybe look at it differently. I I think that it is. I think that what's happening is that the companies that fundamentally don't work are finally stopping trying and that there are operators that are making it work in this state, ones that carry the torch forward Like let's stop lighting money on fire, let's run good companies that have futures, that are built on something real. Um, if, if somebody at a retail store is losing 50 cents for every dollar of product that they sell, they're doing something wrong. That is no longer the way to run a company in this space. So, um, so, yeah, that's. That's a big takeaway for me for for 2024, as as the companies finally hit the rocks.

Ben Larson: 15:49

Yeah, and to counterbalance that, we did see some success where there was this impending debt wall and there were some companies that actually pushed through, refinance their senior debts and and live to fight another day. Yeah, and so not everything burned down, which was great, but some, some, some did perish yeah well, so what do you got?

AnnaRae Grabstein: 16:12

what's the next one big, big news of the year? Yeah, I mean it'll be more flowery right and positive, absolutely a little bit more liquid.

Ben Larson: 16:20

Um, you know it's for me it's just like status quo in the most status quo sort of ways, but also like the benefits that came out of that for us. Um, so like when we're talking about cannabis, you know it's like the same old story with rescheduling, safe banking, all that kind of stuff. It's just like when's it going to happen? Is it going to happen? How's it going to happen? I don't know, I don't have the answers. No-transcript it.

Ben Larson: 17:30

You know a category that was historically one to 2% of cannabis sales and even worse for low dose. Low dose beverage in California is about 0.3% of total cannabis sales and all of a sudden you put it into the alcohol market and people are planning on it being 10 to 20 percent of alcohol sales. Yeah, it's just a massive opportunity. And I had the opportunity to travel with you to to minnesota, um, then to austin, charlotte, charleston, nashville, on and on, and you just you're walking into these liquor stores and to total wine and it's not like a little well, I mean, end caps are always nice, but it's not just like one shelf, like we're talking five, seven shelves in some cases of every low-dose thc beverage that you could want so basically, 2024 is the year that beverages really soared.

Ben Larson: 18:27

They soared, the business is doing great and I had to stop selling the dream and just live it, and that is the greatest gift you can give an entrepreneur.

AnnaRae Grabstein: 18:37

Yeah, that's amazing. I have been really amazed at how much beverages have increased not only in mindshare but in selection and in quality this year. It seems like everyone's making one now. The question at the beginning of the year was should we make a beverage? And now the question at the end of the year is are there too many beverages? And now the question at the end of the year is are there too many beverages?

AnnaRae Grabstein: 19:08

I'm sure you smile and say no, there's never too many beverages and there's so many more beverages that we need to bring to market, and that's probably true because they're not widely available enough to enough people, but there really are so many more choices and the categories of flavors and experiences and stuff, it's just. It's just a whole nother world. And so to see how much the category has shifted and changed in the last 12 months, if, if it keeps moving at this pace, who knows in 36 months when it's going to look like?

Ben Larson: 19:42

And it's just, it's really interesting the conversations that we're having. You're talking about like everyone's getting into it. Uh, I've been talking with amber center, who you know uh, she's a co-founder of supernova woman and has has had a number of different uh companies under her belt. Um, she's even looking at the beverage category in a really exciting way. You know, she sees opportunity there from the lens of like this is actually creating equity opportunities because the barrier to entry is so low and we can actually find supportive partners to help accelerate products to market and give people a fighting chance instead of diluting them to thinking that this lottery ticket of a retail dispensary is going to provide generational wealth and print money for them.

AnnaRae Grabstein: 20:27

The golden handcuffs of equity programs that have never really worked out for anyone. I hear you and I of course agree that there has been a much lower barrier to entry to bring hemp to market, and I also am with you in the prediction that the farm bill will probably be punted for another year or a significant amount of time.

Ben Larson: 20:51

It's becoming a little less of a prediction, I mean yeah, it's becoming clear. Yeah, it's becoming very clear.

AnnaRae Grabstein: 20:56

However, what is shifting is even if the feds aren't going to shift their hemp policy, there is more state level policy that's coming into place. It was huge in California this year that hemp THC was banned. There's more regulatory hopes and dreams kind of coming down the pipe and some other States about kind of clamping down on the availability of THC products, and I expect that that is going to continue next year, absolutely so. When we're talking about the barrier to entry, is it risky for companies to be developing products in hemp now? How do you think about that when people come to you?

Ben Larson: 21:45

I'll give you the consulting answer. It definitely depends.

AnnaRae Grabstein: 21:50

That's what I say too.

Ben Larson: 21:55

If you're launching a THCA flower, hopefully you have deep pockets like Uncle Snoop and you can weather a complete and outright ban on it. I wouldn't do it if I had limited funds. I'd go a little bit safer. It does seem that when we're talking to the policymakers in these various states, that there's a lot more receptivity to at least the beverage category, and then your risk profile increases as you kind of go up the value chain. So it's like if you want to talk about gummies, okay, it's not a smokable, a little bit safer, but there's a big fear about whose hands those might get into and what they might be mistaken for, and so I do think the beverage category is interesting and you also have just a very supportive environment, like anyone in the space generally knows about in the past, it's something that the hemp industry has been accused of forgetting is really lifting up the roots of the cannabis industry.

AnnaRae Grabstein: 23:21

I'll answer my own question. Here's what I tell people is that the hemp opportunity remains and is still massive and huge. The consumers love it. It's really the policymakers that are going to create a decrease of opportunity in certain categories and in certain markets, and so to stomach it. If you want to move into the space, I think that the best way to think about it is how do we manage supply chains to be able to pivot fast enough so you're not overbuilding inventory, and also that you're maybe not relying on certain product lines or form factors to exist forever? And if you're going into something understanding that there's an element like, for instance, if you're going to make a 10 milligram beverage because you understand that the data tells you that that has the largest amount of sell through and moves through fast enough, just don't make so many that if you get 30 days notice that a state or 60 days notice that a state is moving and the package size now needs to be five milligrams, that you can't pivot and you're left with a whole bunch of inventory that you can no longer sell, but does that mean that you shouldn't make a 10 milligram beverage?

AnnaRae Grabstein: 24:32

I think that if you can manage your supply chain and if you can manage your inventory, then the idea of just being flexible to take advantage of what's in front of us now to build brand affinity, to build market share, to get distribution in place and then to pivot with the regulations and just be ready for it and open to it, I think it is manageable. I'm with you that as you move towards more combustible form factors, that those are really short-term, think that. I think that you will see the the farm bill, when it does change eventually most likely clamp down on the ability for people to bring combustible hemp products to market, but it might be another 12, 24 months I don't know when that's going to happen and so then any of those restrictions will actually fall on the states. And then it just becomes more of a distribution management challenge of if you're making a THCA flower product, making sure that you're only selling it into the markets that allow it and managing it. And it's most likely a short-term play, but still there, still big.

Ben Larson: 25:46

Yeah, and to your point in focusing on building a brand and building a consumer base. If you're really good at it and you build great products, then people are going to want to find them in the future. And maybe you could find your way into a dispensary channel if that became the only outlet and drive your customers there. I don't know. Actually, I'm really interested in checking out some of the headset data for this year in California. Following the ban, did beverage sales increase in dispensaries?

AnnaRae Grabstein: 26:16

because of the ban. Well, and we have seen in 2024, a lot of cannabis companies that are in the adult use regulated side finally realized that there was this huge opportunity in hemp and start to explore it. You've mentioned Cureleaf. Gti has gotten into hemp beverage. There's a number of other examples and so what they're doing is they're going from regulated marijuana into hemp, but hemp has been this incredible brand building opportunity for folks who are able to be doing online marketing direct to consumer. I think that 2025 could be the year and it might be till 2026, but where we'll start to see some of those really well-developed hemp brands start to explore being able to move into different form factors in the adult use market and go back the other way, because they are well capitalized, they have free cash flow, they've learned to build great businesses, they've got email lists all kinds of things that position them to be able to play on both sides of the fence, like vertosa, which also plays on both sides of the fence yes, we do get accused of that sometimes.

Ben Larson: 27:31

Um, it's not a bad thing no, no, it's not.

Ben Larson: 27:34

But you know, everyone has their angle, especially when it comes to lobbying and all that, and so it's um, we, we often find ourselves playing switzerland. Um, especially in places like like California, where we have relationships with the various policymakers and want to preserve both sides of our business, we believe that everything needs to be responsibly shepherded. So enough about us. The interesting thing about the hemp beverage category is that it also adjacent to another like fast burgeoning category, and that's the, the non-alcohol movement. And um, I've been talking to a lot of players in that realm and and what I'm also seeing is that a number of these, uh, hemp beverage brands are launching just non-cannabis, non-hemp products and, yeah, and that's a really interesting opportunity. You know the folks at Colexo. I know that they were shipping their just flared seltzers basically out to Japan and getting distribution out there, and everyone generally knows about Breeze. Breeze has their Lion's Mane only product that really acts as the main vehicle for their social media marketing.

AnnaRae Grabstein: 28:47

Well, and seltzer and non-alcoholic you know, lion's mane beverage is one thing I'd say that it's interesting to start thinking about these non-alcoholic beverages as adult beverages, where we've always just thought about them as for all, for all the, the part of the non-alcoholic space that I think, outside of hemp, that's the most interesting, is the non-alcoholic beer category, and I just say this probably because it's a huge part of my refrigerator at home and do you have a favorite brand?

AnnaRae Grabstein: 29:20

Well, my husband does, and so I will just promote his favorite brand, which is athletic brewing hands down. And so I will just promote his favorite brand, which is Athletic Brewing hands down. And he's been trying them all. He's been trying the local Sonoma County craft beers that are putting out non-alcohol options. He's tried the Sierra Nevada ones and he likes them all. But he really feels that the Athletic Brewing is just the best. It's pretty solid, it's pretty solid.

Ben Larson: 29:44

It's pretty solid.

AnnaRae Grabstein: 29:45

Yeah, and it is pricey. It is the same price as buying craft beer. I can't believe it. They sometimes sell it at one of our local Costco's but not the others, and so we have been going specifically to the Costco in Marin County where they will sell 12 packs of athletic brewing, because we just can't seem to keep it on the shelf in our house. So I think it's a huge opportunity to really disrupt the alcohol category, and I think that we're going to see non-alcoholic beer, hemp beverages and other kind of non-alcoholic beverages really, uh, really kind of staking a claim in in the overall market share there there are a few people that have either attempted or are doing right now uh, infused non-alcoholic beer and people.

Ben Larson: 30:40

It's very polarizing. People like, just like, don't put THC in my beer, like no one wants that, and then there's other people that just love it, and so I'm curious to see where that sliver, the category uh goes.

AnnaRae Grabstein: 30:53

I think it will win you think? So, but to be honest, the ones that I've tasted I just don't think are very good. Yeah, um, so if you make a thc beer it to me, I'd love to try it, because they have not impressed me, and I think that's why they're polarizing is because you can easily deny it.

Ben Larson: 31:12

Based on the sentiment that I was getting at BevNet and I'm not making any claims here, but I wouldn't be surprised if some of the names that you mentioned previously that are in your fridge wouldn't be getting into the space.

AnnaRae Grabstein: 31:26

Yeah, I hope they do. That sounds great.

Ben Larson: 31:29

Funny enough back in the early days. Do you remember House of Saka Cynthia?

AnnaRae Grabstein: 31:34

and Tracy Wine. Right yeah, infused wine, and.

Ben Larson: 31:39

I remember sitting down like wait, okay, so you're taking this high quality Napa Valley wine and then you're putting it through a process where you high quality napa valley wine and then you're putting it through a process where you have to remove the alcohol and then we're going to add thc into it and so you have this very expensive product that, as a wine lover, I'm like kind of pales in comparison to the original um yeah anyways, uh, I, I think I can say all this right now because they, uh, they no no longer are around, but yeah the company.

Ben Larson: 32:08

They are just fine the people are good.

AnnaRae Grabstein: 32:12

Well, let's talk about this next year and and what's ahead, um 25, 2025. It just keeps stacking yeah just keep moving? Is it because we're old that it feels like it happens faster, or is the world just moving at a faster fucking pace?

Ben Larson: 32:29

Okay, so I can answer this a number of different ways. I did have this like psychological explanation that every year is shorter, if you're thinking about it, relative to your life. Yeah, exactly so the older you get, the faster it goes. Faster it goes. But also I do think you said piling on, like we just do over time, pile more things on. It's like I have two kids, I have this business, the business is getting bigger, we have more employees, like the industry is getting larger, and so it's it is moving faster. There's more to do. I feel like I traveled way more this year than I had in previous years. Yeah, and I think 2025 is probably is getting larger, and so it's it is moving faster. There's more to do. I feel like I traveled way more this year than I had in previous years. Yeah, and I think 2025 is probably going to be even busier. Yeah, god willing. I mean like busy is great right now, I'm loving being busy.

AnnaRae Grabstein: 33:16

Busy is good. I think 2025 is going to be a great year in this space. I think that there will be ongoing troubles for operators that aren't running good businesses, but those that are having a mind towards underlying fundamentals, are building foundational structures into their business, are going to be really well positioned. I am starting to see companies really start to think strategically again in a way that I think 2024 was all about just like fixing stuff and getting out from under a lot of bad decisions that had been made in the past be it debt or way too many products or bad margins on products or inefficient supply chains, whatever it is and 2025 is now like all right, we've got the house in order. What are we going to do now? How are we going to grow?

AnnaRae Grabstein: 34:14

I'm working with a company that is starting to think about overhauling their internal governance and transforming their leaders and their leadership structure and to start thinking about how they can be ensuring that there is kind of a new generation of leaders inside of their company and succession planning and like this is the kind of thing that real companies do, like companies that know that they're not just going to be around for two years until the money runs out, but that are looking at the next 10, 15, and 20 years to really think about who they are and how they're going to build something strong. So I am just really hopeful to see people doing that type of work and I think it's going to keep happening and I think there's more and more of the good people rising to the top.

Ben Larson: 35:04

So it's a good prediction. I love that. I hope to be one of those people. Yeah, you know we invest a lot into our employees and you know there's employees now that are here for five years and realizing that this is a major step in their career and the responsibility that comes along with that, and so we've. You know I'm a member of Vistage. I've been getting more of our senior leaders into various groups like that, and then also, you know, helping our finance manager get her CPA and just really think of different ways Like how can we make people thrive and be happy to be here long-term and it's nice to think long-term in the cannabis industry. That's a privilege that we haven't always had.

AnnaRae Grabstein: 35:56

Well, on the flip side of that, as we think about kind of up-leveling of teams, the other thing that is going to be happening in 2025 is is the integration of assets, as companies are coming together after M&A activities whether it be the roll up that we just talked about with Vireo, bringing together five disparate companies that operate in different markets or or the M&A that we can't even yet predict, and that integration work, I think, is going to be a big part of 2025.

AnnaRae Grabstein: 36:29

And some people will win at this and some people will fail, and I think that integration is a bigger deal than lots of groups realize, because integration is about humans, but it's also about systems. It's about it's about uh, reconciliation of vendors and supply chains and marketing plans. Uh, there's so much to handle when it comes to integration, and there are companies that are really, I believe, truly underestimating the importance of it and thinking that it will just happen naturally or it's not important, and I think that we're going to see some integration challenges this year. That would be a prediction. I don't know who yet, but there will be some that are failed as a result of not putting in the effort to get it done.

Ben Larson: 37:22

Yeah, I mean it's hard enough to like integrate like new senior leadership into a company when you hire them and just thinking about taking a whole new company and bolting it on.

AnnaRae Grabstein: 37:32

Yeah.

Ben Larson: 37:33

Yeah, interesting when looking at 2025, I just keep thinking about these major topics that we've talked about, like farm bill, rescheduling, all this kind of stuff. I'm going in and I wrote this into my Christmas cards that we sent out to everyone. I'm like all right, everyone needs to be optimistic, we need to be adaptable and we need to believe that we can thrive under this new reality that we are entering, which is even like just hearing these messages from Vivek and Elon about like just involving themselves. Like wait, no one elected you. Like, why do you have so much control? This is kind of scary, but I am optimistic that we will see rescheduling, maybe even enter a realm where we could start talking about descheduling in a public way. I know that's a bold prediction. That's a bold prediction, but I'm going to put it out there. Uh, with with RFK entering the fold, uh, is he still? I don't know, I don't follow everything. He's in the fold.

Ben Larson: 38:39

He's still in the fold.

AnnaRae Grabstein: 38:40

Okay, good.

Ben Larson: 38:41

I mean good. I mean good. Yeah, I don't know. I just am optimistic that we see some real change. I guess that's what we can hope. To see is like a thinning out of the FDA and maybe a talking about CBD being a perfectly fine ingredient for food products, because we still haven't had that conversation. Yeah, I don't know. I just feel so much has been gummed up in the federal government that good or bad like just shaking it up and lighting it on fire might return something positive. I'm curious, for sure, and optimistic, and optimistic Totally. I'm curious, for sure and optimistic.

AnnaRae Grabstein: 39:28

And optimistic totally.

AnnaRae Grabstein: 39:30

I am optimistic and skeptical. I choose to be optimistic while being well-informed. I think that feels like the power We've talked about, pattern recognition and, I think, pairing optimism with a deep understanding of the market and all the things that are happening in all the places, which is another element. While we, while we talk about federal policy, like you've like you've mentioned, and some of the ways that those could lever into to market opportunity or growth or shifts, shifts in the dynamics, we will most likely in 25, see some new state markets come on in the adult use space or in the medical space. It's a little hard to know and there's less and less new state opportunity than there was the year before as states turn on. But it seems very likely that there will be progress in Pennsylvania, which could be a really big market and already has a lot of public companies that are operating there. So I can see that that could be a pretty big lever for growth of some public companies.

Ben Larson: 40:39

Sucks for those dispensaries that popped up on the borders.

AnnaRae Grabstein: 40:43

Yeah, absolutely yeah. Pennsylvania is losing a lot of tax money to the border dispensaries, unquestionably, I think New York is going to continue to grow. I think that it's it isn't quite hitting a billion dollars in 2024, but it could. It could easily double that in 25.

Ben Larson: 41:03

I think that was one of the positive highlights of 2024.

AnnaRae Grabstein: 41:06

Yeah, we forgot to say that. Yeah, New York.

Ben Larson: 41:08

New York like finally Finally coming to life.

AnnaRae Grabstein: 41:11

Yeah, it's not there yet, but at least I think everyone can show up with a little bit of confidence that New York is on the right path to actually realizing an adult use market. And yeah, I'm seeing some growth shutting down a ton of the illegal stores, which I think is generally positive. Yeah, new york, new york was good this year and I think this prediction will be better next year yeah, are there other markets that you're excited about? Uh, any predictions on texas?

Ben Larson: 41:46

yeah, I do have predictions on texas, um and this comes, I guess, well informed, to use your term uh, that I do think we'll see beverage preserved in the mainstream marketplace in texas in the,000 plus now hemp licensed retailers. But I think there will be a strong crackdown on most of the form factors beyond that, definitely on flour and vape, and I think it's going to be a hard fought battle and I think that if beverage doesn't get protected in it, that nothing will pass and you'll have status quo for another two years. It's a lot of horse trading going on and it's a it's a divided house that isn't completely under the pen of Dan Patrick.

AnnaRae Grabstein: 42:43

Sure. Well, so you think beverage will be preserved. But you always think beverage will be preserved, Is there?

Ben Larson: 42:50

any way that you think that beverage won't be preserved With the exception of California?

AnnaRae Grabstein: 42:55

Okay, so you said it, so you're not totally myopic in believing that beverage will always be preserved in every one of these state debates. And of course, you have to be optimistic about it, and we all want access.

Ben Larson: 43:10

I think that's clear.

AnnaRae Grabstein: 43:11

I mean not everybody who listens, I think, wants free market hemp access, but I think that we both agree that hemp beverages in mainstream retail have been positive on many levels for most and look, I am overtly optimistic and we have more support than we've ever had before.

Ben Larson: 43:32

Uh, but it's not unanimous support from the alcohol industry and I think that's important to know. Like in california, you know, abc is not convinced. I think the beer institute also put out a weird like-THC newsletter that got a lot of backlash. So we still have a lot of bridge-making to do.

Ben Larson: 43:55

But attending Bevanette just last week, it was just so eye-opening to see how excited everyone was about it and having steve jabor on stage saying that, like this is a massive category, everyone needs to be supporting it, like it's just so cool, right, like I was at beverage forum, which was also in la at the beginning of the year, in a two-day beverage conference and no one mentioned thc, uh, which was equally like bizarre. But um, yeah, I think.

AnnaRae Grabstein: 44:27

I think it's evolving in the right direction yeah well, so we've talked about a bunch of industry kind of cannabis, thc related predictions. What are your intentions going into the new year? What are you? How are you leaving it behind and looking forward?

Ben Larson: 44:45

Yeah, so this year was. I mean, I'm guilty of like having business totally envelop my life, but I look at this year as really kind of leaning into the foundation that we had built in 2023 and capitalizing on it, and so we were able to grow the business and not increase our overhead too much. It was just like kind of like lean into the systems that we've developed. It has created the space for me and the desire to really as you were mentioning for other companies, like think about what's possible. Like you know, we had the morning mixer the other day and just the people that were in the room like it really inspired me to think bigger.

Ben Larson: 45:32

You know, what would I do with $100 million and you know what is the future? And you know, outside of beverage, I've been having, you know, fun conversations with, like, the medical community and we do a lot of work with Johns Hopkins. And how do we address that part of the market that has largely been ignored because of all the excitement and necessity to drive towards the recreational marketplace? And so, kind of going back, can we actually create great therapeutic cannabis products?

AnnaRae Grabstein: 46:06

Yeah.

Ben Larson: 46:07

So you know, I'd like to explore that in the new year. But yeah, just what is the direction of all this going? How can we educate the conversation, Maybe influence it a little bit?

AnnaRae Grabstein: 46:21

Yeah.

Ben Larson: 46:22

Yeah, how about you?

AnnaRae Grabstein: 46:26

My business really grew a lot in 2024. So, yeah, yeah, how about you? My business really grew a lot in 2024. And as someone that's mostly been building it on my own, with a partner here and there and some people that I've brought in, I've looked back on the, on thinking about creating in myself and in all the people that I work with just an ongoing commitment and culture on peak performance, and I've just been thinking about peak performance a lot and, yeah, an optimization of my time and my health and my brain and my information.

AnnaRae Grabstein: 47:06

And how do I create that just as part of the DNA of my work and my life in an integrated way, and then that ends up being kind of the way that the business grows as well, because we can be known for being so smart and astute and efficient and optimistic and execution oriented and all of those things. So, yeah, I'm excited about next year.

AnnaRae Grabstein: 47:38

There's a ton of really unique opportunities and it's about feels like what I want to keep doing is is playing three dimensional or four dimensional chess as best as I can with, with my career, with my company, with my community, with my favorite people that I want to work with and build with, and and how to create kind of just ongoing mutual alignment with, like aligned incentives for everybody that deserves to be at the table, like keep picking winners. Um, that is that's what I want to focus on in 2025. And then also, I'd say, specifically, since we are here in the high spirit studio at Vertosa, is, uh, what we want to do with with this community as well.

Ben Larson: 48:25

Um, and I think we have a lot of ideas. We have coasters.

AnnaRae Grabstein: 48:29

Yeah, we have a coaster, so that's our first piece of merch.

Ben Larson: 48:34

A fancy piece of swag? Yeah, but in the merch store.

AnnaRae Grabstein: 48:39

But I think in 2025, we need to be really paying attention to the momentum that we've built with the High Spirits community and listening to our audience, and what I am hearing our audience tell us is that they love access to good information with other leaders in the space, and creating spaces to collaborate and be authentic together can lead to unintended positive outcomes in business, and I want to. I want to engineer more of those opportunities to create magic between humans in business.

Ben Larson: 49:21

I love that, yeah, and I, and it's going to happen Like it is being extracted from us.

AnnaRae Grabstein: 49:27

It is.

Ben Larson: 49:28

And shout out to Eric, who's sitting right here off camera.

AnnaRae Grabstein: 49:31

He's going to be helping us out. We just got a producer, you guys.

Ben Larson: 49:36

It's been official. It's a big deal.

AnnaRae Grabstein: 49:39

Of course, Sarah Falvo has been a big, big part of our community and helping drive our morning mixer part of our community and helping drive our our our morning mixer belinda on the vertosa team has created uh brand assets for us all year long.

Ben Larson: 49:52

The entire team, both wolfmeyer and vertosa, is just like hugely supportive of of this, uh, what I used to call a boondoggle, but it's actually becoming a, a big love child of the, of the companies and yeah, it is, it's growing like big love child of the companies. Yeah, it is.

AnnaRae Grabstein: 50:10

It's growing. It feels like a love child. It is, I agree, and our high spirits children, all of you out there, we just want to keep doing this for you. We want to be making an impact on your life and inspiring you to be the best leader that you can be, to be creating the best companies that you can be, to be creating the best companies that you can be, to be building access to cannabis for anyone who wants it.

Ben Larson: 50:31

That's right.

AnnaRae Grabstein: 50:31

Yeah.

Ben Larson: 50:33

And over the next couple of weeks, which we're not going to air until. January beginning of January we will be thinking about all those things and so if you're watching and you have ideas about how we can be better, what we can do to really amplify the value of the show, uh drop us a message.

AnnaRae Grabstein: 50:51

Yeah, events that we can activate around. Um, we want to be doing more, more in-person events, so let us know.

Ben Larson: 50:59

Uh, if your city needs us, maybe we'll be coming through yeah, and if you or you know someone that wants to be on the show, we're building out that list for next year as well.

AnnaRae Grabstein: 51:15

Yeah, I'm super excited about 2025 and thanks Ben for just being a creative partner again. It feels great to be getting to thank you again this year for being my creative partner and my accountability partner and doing something that's hard. Showing up every week and making this content and putting ourselves on camera is not easy. It's scary, it's vulnerable, but we can do hard things. And it's easier to do the hard things with the people you like and the people that you love Also a great podcast, I hear.

Ben Larson: 51:48

Have you heard this one? We Can Do Hard Things. No, my wife's a big fan. Oh yeah, check it out.

AnnaRae Grabstein: 51:53

Okay, yeah, thanks, thanks for a great year.

Ben Larson: 51:56

Yeah, thank you. This has been great and thank you, thank you everyone. If you're watching, please, please, uh, here at the end of the year, go give us a subscribe, a like, a share. Uh, the community is growing. I think we're almost about 1100 on on on linkedin and the the viewership is is going up a lot on youtube and our podcasts. Uh, I think that's it yeah, read us out I can't read anything.

Ben Larson: 52:25

Stay engaged. How about you do it? What do you do? What do we say? It's your turn, it's the end of the year.

AnnaRae Grabstein: 52:29

Stay curious and stay informed. Stay informed and keep your spirits high.

Ben Larson: 52:36

Until next time, until next time. That's the show. That's the show you.