Ben Larson: 0:05

Hey, everybody, welcome to.

Ben Larson: 0:06

Episode 84 of High Spirits. I'm Ben Larson and with me, as always, is Anna Rae Grabstein. It is Thursday, April 17, 2025. We got a great conversation for you today. We have Mitchell Osok on the show. We're going to be diving into all things cannabis and digging into his mind and how he sees the industry. But before we get there, Anna Rae, I'm so happy to see you. I really look forward to today.

AnnaRae Grabstein: 0:36

I'm happy to see you too, Thursday. It means that we're getting to the end of the week and I know that we both have been nonstop. We've been trying to find time to check in, and it's like it's only the weekends and the nights that there seems to be time these days.

Ben Larson: 0:53

Even those have been limited as of late.

Ben Larson: 0:56

I literally feel.

Ben Larson: 0:57

it just feels so recent that I was like okay, I got to run to Sacramento, I'll see you next week.

AnnaRae Grabstein: 1:04

Well, I know you're deep in a lot of policy debates. What's really hot for you right now?

Ben Larson: 1:09

The boiling pot that I'm sitting in, I don't know. Yeah, so it's like after I left the show last Thursday I went up to Sacramento and participated in NCIA's Stakeholder Summit, which was about 150 operators, policymakers, legislators you know you name. It advocates largely from the cannabis lens, and so I found myself in this room where I was probably on the polar end of operators that you know working in hemp advocating for kind of more of this in between of hemp and cannabis, and this is often where I find myself kind of a foot in both boats. But I was the one pushing the envelope on the conversation in that room and I think it was appreciated. I had a lot of people come up to me and say, you know, thanking me for deepening the conversation and opening it up.

Ben Larson: 2:04

And we were talking about, you know, synthesized ingredients, be it chemically or biosynthesized or converted, and kind of the nuances there. We were talking about the convergence of hemp and cannabis. There's a assembly bill AB8, in Sacramento right now that is finding ways to get the supply chains to work a little bit closer together. There's new amendments that I'm actually reviewing right now and we're going to see a hearing, I think very soon. The 22nd, I believe is the hearing Anyways after that. Then I find myself kind of in these online conversations regarding the hemp side of the business and we have the US Hemp Roundtable at the polar opposite end really not appreciating kind of the efforts that we've been doing in the THC beverage space. And I say THC beverage because beverage exists in both cannabis and hemp and they're kind of the same products and so it's very confusing for a lot of people.

AnnaRae Grabstein: 3:05

So it's funny you're sort of calling out that, like on this show. We often have talked about the cannabis industry and the hemp industry, but it's almost starting to be that there's like a third party in town, which is that there's like a division within hemp there's the THC beverage, there is the hemp industry and there's the regulated cannabis industry.

Ben Larson: 3:25

Yeah, I mean, yeah, look I. There is the hemp industry and there's the regulated cannabis industry. Yeah, I mean, yeah, look I, I I don't, um, I don't envy the us hemp roundtables position, because they started in this realm of like, fighting for the rights of hemp um, largely growers and materials and and all that kind of stuff, so a rope, not dope, um, and that has evolved over time and so their constituency is very diverse, but the ones with the money are generally going to guide the direction of that organization. But they're coming from this place where hemp is legal everywhere and it's distinctly different than quote unquote marijuana, right, but, to your point, in certain circles, and especially with policymakers and legislators, all this kind of stuff, it is becoming much closer together and I think we're just reaching this very tense kind of situation where we need to have really honest and open conversations and we need to kind of consider tactics that aren't scorched earth.

AnnaRae Grabstein: 4:24

We need to kind of consider tactics that aren't scorched earth yeah, scorched earth. I think that what you're really saying is just sort of get what you want or don't take anything at all. You're talking about incrementalism.

Ben Larson: 4:35

Yeah, well, yeah, yeah, so in the cannabis industry we are. I mean, incrementalism is what we used to call it. It is very slow and arduous, and I acknowledge that, and sometimes you need to take these leaps forward. And and hemp actually has provided for the plant. These opportunities like that didn't previously exist, and and the beverage movement is an example of that, and I acknowledge that. But in the the increasing rate of which we are seeing bans being proposed in different states, like we experienced here in california, I think we have to realize that the conversation is changing, that the cat's out of the bag, so to speak, and I think we need to realize that it's like we don't want to head towards a catastrophic end where a ban does get passed and you gave up on a perfectly good compromise right, and so I think there needs to be more of an effort of creating the conversations and not just fighting for the status quo I hear that I think, um, it's.

AnnaRae Grabstein: 5:39

It's a challenging thing for businesses that um, the ending of the status quo as an end to their business.

AnnaRae Grabstein: 5:53

And I have been looking at the hemp space over the past few years as an opportunity to look at how is the addressable market larger of cannabinoid consumers than it maybe was before with just the adult use or regulated medical spaces?

AnnaRae Grabstein: 6:08

And hemp was really interesting and is interesting for that reason because there's more ways to reach the consumer. But it became pretty clear to me pretty fast that there was also a tremendous risk of operating in hemp in many of the product categories, specifically, in my opinion, in the inhalable categories. And so while they're presented an opportunity and remains an opportunity for some groups to participate in some places and things like inhalable hemp products, I think that I'm just going to say it that it's a bit delusional to think that that's going to stick around for long and it's just about accepting that reality is that you're not going to be able to hold on to those things long-term from a policy and legal perspective. It's just come on now and there some, some cash stacked and some profits made for some people, and no judgment there I, but I I just don't think that that's something that we can continue to depend on, and it's going to create some policy conflicts, um amongst stakeholders, because people aren't going to want to give up what they got.

Ben Larson: 7:21

Yeah, look, I mean, I could probably talk about this for days.

AnnaRae Grabstein: 7:25

Yeah, we'll have some great contributions to the conversation.

Ben Larson: 7:29

Yeah, I'm sure he's probably chomping at the bit to just jump into this one, but yeah, let's get him on, let's, let's, let's do it.

AnnaRae Grabstein: 7:36

Yeah, so I'll queue him up. Today we have Mitchell Osak, who, if if you are a person that is on LinkedIn and cannabis, you have probably seen his hot takes on what's going on in the industry. He is a longtime consultant in the space. Prior to consulting in cannabis, he started his career in brand management at Procter Gamble and has worked across a variety of sectors, including pharma tech, financial services. And has worked across a variety of sectors, including pharma tech, financial services. He's a frequent contributor in media and at events and he publishes what he calls the Cannabis Management Review, the Harvard Business Review for Weed. So welcome, mitchell Osak. Super stoked to have you here.

Mitchell Osak: 8:21

It's a pleasure. Thank you for including me to have you here.

AnnaRae Grabstein: 8:26

It's a pleasure. Thank you for including me Absolutely Well, so let's just dive in. What we're talking about is this debate between incrementalism and big sweeping policy change. Obviously, sweeping policy change is more of a utopian vision, but incrementalism seems to be more of what we've experienced in the US. Yet you are in Canada, which I didn't mention in the intro, and there was a little bit more of a sweeping policy shift. That happened in Canada with federal legalization. What do you think about this debate between getting everything that you want versus taking small steps towards a larger goal?

Mitchell Osak: 9:06

You know, it's always hard to follow really talented, smart people like you guys, because you end up making a lot of my very points when it comes to cannabis or anything political. These days we've settled into a society where we have and I mean we, because I sometimes do this as well we tend to look at things in a very reductive, binary fashion Win, lose, good, evil, and so on and so forth. And that kind of Greek drama is playing out in the cannabis versus hemp debate and even within hemp and that was an excellent point you made there, ben and even within hemp and that was an excellent point you made there, ben. Obviously, as a more as an older, maybe more seasoned, battle-hardened person, I tend to believe that perfect is the enemy of good, or even very good.

Mitchell Osak: 9:59

Clearly, along the incrementalism strategy, we will never get anything unless we take at least some baby steps. And as much as it's nice to sort of swing for the fences and hit that titanic home run at times, we're not going to get it. And we're not going to get it with the stigma, with the misinformation, with the political deadlock that's in many legislative bodies, from the US Congress right down to different states. So I'm firmly in the belief that we have to come together everybody and understand that what you talked about, anna Rae, almost this sort of Manichean nuclear option is going to set us all back and you know, with all the other things going on in the world right now and in our respective countries, we can ill afford to hit that nuclear option. So clearly we have to find common ground. People like Ben are perfectly suited to do that Influencing policy, bringing sober and sensible and mature and professional thinking to the dialogue. I just hope we get there, but I'm not always so optimistic.

Ben Larson: 11:14

I'm going to. I'm going to play devil's advocate, I guess, against myself and and and. Just put a question out there Like this is kind of just mirroring what politics is today. You know, I found myself in a lot of conversations today. God, we could just replace all these players with, just, you know, trump versus Biden and Democrats versus Republicans. And is this just the new normal in political discourse? I've never claimed to be a politician and I'm relatively new to policy and politics, and I find myself in this world that it feels gross. Right, I am used to having intellectual conversations and honest conversations, and I don't know if this is new or if I'm just like in a new arena, and so I guess not to turn you guys into my therapist, but I did have my therapy session this morning, so I'm already in the mode. So sorry, not sorry, but yeah, I'm interested in your guys' thoughts. Is this just the game? Do we have to bat the ball back and forth to land somewhere in the middle?

AnnaRae Grabstein: 12:28

anyway, if it was politics, we wouldn't land anywhere, because that's what tends to happen, is that we just bat the ball back and forth, and back and forth, and back and forth forever until, like, the next midterm and and um, I mean, look at what's happening with tariff. It's like tariffs are on, tariffs are off, tariffs are on tariffs are off tariffs are on.

AnnaRae Grabstein: 12:45

Oh, maybe we're going to hold for 90 days, so I would like to hope that it isn't just the same.

AnnaRae Grabstein: 12:55

But I think that what's happening politically is affecting a lot of things, in particular, the way that leaders are showing up in their communication and the way that they're seeing the world. I think that there has been a new cultural dynamic about winning and about things like the art of the deal, like how are we going to get things done. There's a lot of what I consider like false idolatry to some of the leaders that we're seeing right now of the styles that they come forward with, and specifically like the Elon Musk and Donald Trump style. I think that it's not that they are ineffective leaders. I just think that they are sort of the exception to the rule and that the high hubris leadership style that we are seeing them exhibit is not a path that is usually the winning path for most leaders, and we're seeing people kind of try that on and see if a winner-take-all approach is going to work, and it might, but, like I said, I think it's the exception. That's my thought, mitchell. What do you think about this?

Mitchell Osak: 14:09

I would agree with both of you wholeheartedly and just add another dimension, and that is unlike other sectors.

Mitchell Osak: 14:19

Cannabis is permeated by cannabis culture, ideology, a whole bunch of other things that you don't see, for example, in financial services, and those other nuances or X factors make it and I'll include hemp there make it a much more difficult form to reach the consensus and even to talk to each other and understand each other.

Mitchell Osak: 14:48

I find online very often and I know it's not representative of the entire industry, but whether it's in Canada or among my American brothers or sisters seemingly normal, sensible debate about what's the best way to build a brand or how do you cut cost will degenerate very quickly into a roots versus suits kind of paradigm.

Mitchell Osak: 15:15

I don't know how that happens, because you know ultimately, you know, creating a sustainable business and building brands, you know, is based on dictums and axioms that have been proven out over decades, if not hundreds of years. But we become prisoners of this ideology, this lexicon that divides us and prevents that sort of compromise from emerging today. However, you know, at a certain point, I believe, and sadly, you have to get to this point where you know when the ship is sinking, everybody's got to start bailing water or diving over the edge. There comes a moment where we have to reach some sort of solutions or companies and individuals are just going to fall by the wayside. I hope we don't get to that point, but sadly I think we might have to, particularly in this hemp versus cannabis debate.

AnnaRae Grabstein: 16:09

Well, so you're starting to kind of allude to this thing that a lot of us have been dancing around, which is just this massive shakeout that's happening in cannabis. Some people have been talking about consolidation, but the reality is it's not even just consolidation, it's companies literally going out of business. And you write a lot about using more traditional business framework structures and lessons from other industries and applying them to cannabis, but there's a lot of things about cannabis that don't really seem to add up because it isn't a traditional environment. We aren't in a free, open market where if you have too much inventory, you can sell it to the grocery outlet at a reduced rate in the next state over. It's just not an option.

AnnaRae Grabstein: 16:53

We're in a very closed, unique market on the regulated cannabis side, and then hemp, while less regulated, in some ways presents a lot of complications and uncertainty because we have all of these laws, like the farm bill has to get renewed every five years. So there's just so much uncertainty and unique market dynamics. I'm curious like why you think that these old school frameworks apply, or and that we're not creating something new that we've never done before. Or maybe I'm wrong and that isn't what you think.

Mitchell Osak: 17:30

No, no, as usual, you're right. When I and I'll use your term old school, because it's a very good phrase when I talk about old school, I talk about really old school. So there are less as background. My undergraduate degree was in military history, so I tend to look at things through a historical lens and often a military lens. If you go back to real old school, like the 17th, 18th century, even the 13th, 14th century, you had trading states. You had states that had agricultural-based or craft-based economies that couldn't trade, so they individually had their own boom and bust cycles and so on and so forth. So the peculiarities and the nuances of cannabis can be found in other markets, in other countries, in other eras. I look at those for inspiration. So why am I telling you that? I'm telling you that because to a great extent, cannabis is unique.

Mitchell Osak: 18:37

I will not deny that when I do consulting work, I don't just pull frameworks and templates from other industries and apply them. That's crude, blunt and stupid. Never do that. But if you look at how do islands, using states as an example, how do states manage supply and demand when you can't ship between them? I mean, go to the papal states of the Renaissance in Italy and you can see a great example of how they managed production of olive oil and leather goods and so on and so forth. And what you had, for example, in those particular markets, was that boom and bust cycle. And to your point, anna Rae, about consolidation, what ended up happening is you had evaporation of businesses. So to your excellent point, that's exactly what happened. So the lessons that I try and impart and learn from and apply to my clients and apply to broader conversations with policymakers about markets have antecedents and precedents in other places.

Mitchell Osak: 19:49

I'll give you a perfect example Hemp beverages. I'm not sure how many SKUs are out there. Every time I put out a number, somebody corrects me. Let's say, there's 700 SKUs of hemp beverages right now. That's not that different from many of the bubbles we saw, beginning in Holland with Tulip Mania, to US railroads, to, you know, internet stocks in the late, you know, 1990s. We've been there. We've seen this kind of thing many, many times and it doesn't necessarily give any hope to certain companies and how they're going to manage about it. But it also will tell you that at a certain point there's going to be fewer companies, they're going to consolidate together. They're going to exert market power, they're going to control capacity and we're going to get to a more sustainable, albeit concentrated industry.

Ben Larson: 20:42

So let's dig into that. So, let's dig into that. So we're in this highly competitive era, whether it's the compressing, filtering out of the cannabis industry or this exuberant hemp beverage category that you just mentioned. What are the qualities that you're seeing or encouraging the operators in the industry to win in this kind?

Mitchell Osak: 21:05

of era of cannabis, to win in this kind of era of cannabis. So I'm going to tell you a sort of a tagline that my first hockey coach. I am Canadian and I did play hockey, so too bad.

Ben Larson: 21:15

Skate where the puck is going.

Mitchell Osak: 21:18

But you know his saying. His catchphrase was back, check, forecheck, paycheck, and what that basically means is do the fundamentals, work hard and you'll be a successful hockey player. So for these hemp-based companies, or cannabis companies that have gone into hemp, you know, to me it comes down to basic business fundamentals. You know cash flow management, differentiating your products where it matters to consumers, getting the product shipped on time and complete, providing great customer service and building for scalability and managing risk as you go along. There's no rocket science involved with that. The unfortunate thing is, in cannabis and hemp, that seems to be a very difficult and tall order for a lot of companies for various reasons.

Ben Larson: 22:11

What's your advice as far as how capital plays into this? The venture capital markets are very tight, with the exception of a couple of categories, but even those are becoming tight. How are these businesses getting off the ground and then growing so?

Mitchell Osak: 22:30

whenever I write a lot about you know capital. I write a lot about you know how do you deploy it and so on. I'm very reticent to have simplistic answers to very complicated questions, and you didn't ask me for a simple answer. But there is capital out there.

Mitchell Osak: 22:51

The capital isn't always where people think it is and it's not always available, and the available dry powder is what they call.

Mitchell Osak: 22:58

It is also driven off a lot of macroeconomic factors like interest rates and tariffs and things like that that are beyond the control of the cannabis and hemp industry.

Mitchell Osak: 23:08

So, long story short, companies right now that I am seeing who are very successful in highly competitive markets and I'll point to Canada as an example, because it's an old market, it's already gone through the boom and bust cycle or it's in the midst of bust right now the companies that have done exceptionally well are the ones that have gotten the fundamentals right. We just spoke about that have only raised the amount of capital they need, have scoured various sources of capital to be able to get the money in place, and have prudently managed their balance sheets such that, even as they're growing, they're not creating, you know, the seeds of their own destruction by reducing their ability to raise more growth capital when they need it. So really, at the end of the day, one of those force multipliers in cannabis, and likely in hemp, will be the ability for companies and leaders to be highly capital efficient Not only raise capital at the right time in the right amount, but use it very adroitly and drive a lot of profit and revenue out of that capital.

AnnaRae Grabstein: 24:23

Mitchell, I see you as someone that has a lot of insight of the market as a whole and sometimes I will find that the things that you are saying might even come across as a little judgy or negative of like is all that he sees problems out there. What are the solutions? And I know that, within the context of looking at history, we want to not repeat the mistakes that we made in the past, and you know it's Passover right now for those that are celebrating. It's a time that we're looking back, talking about historic injustice, and I wonder who in your mind is doing it right? Who are some of the companies or leaders or products that you're out there watching with your pointed eye and saying, okay, they actually are moving in the direction that I think is the right one?

Mitchell Osak: 25:24

Okay. So if you think I'm judgy, I wonder what you think about some of the other people online. I think I'm pretty modest and balanced, so let me answer your question by saying upfront a couple of things. One is that, believe it or not, I own no shares in none of my clients, in almost any cannabis company outside of an ETF. Okay, so what I'm about to tell you is not pumping up a stock that I own or a client that I'm working with right now. So that's important because there is a lot of conflicted advice, particularly when people are asked who do you like? And I'm going to answer who I like, because that's a lot more positive than who I don't like, and the financial results of the company, of 90% of the companies out there, speak for themselves. So there are a lot of great companies that I like.

Mitchell Osak: 26:22

In Canada, there's a company called Rubicon Organics. They are a premium grower of organic cannabis. They're a mid-tier that have done exceptionally well, not only you know growing really good cannabis at a low price, but also through innovation. Decibel Cannabis is another one of those that pioneered infused pre-rolls, for example, in Canada, in the United States, there's a whole host of companies I like. I like Binsky as an example, host of companies I like.

Mitchell Osak: 27:08

I like Binsky as an example. That's one of your classic asset-light cannabis companies that chose a lane and minimized the use of and the acquisition of capital and that are focused on producing IP and other forms of technology and brands that will win in the marketplace. I like them a lot. I like a small dispensary. I think they're a grower as well C21. They regularly put up quarter after quarter of real profit. So there are terrific companies out there, without a doubt, and the industry can absolutely learn from them. But I think if you stood back and now I'm being being judgmental and you looked at what the winners or the leaders are doing, it's not rocket science.

Ben Larson: 27:50

So in my opinion to that point you've you've mentioned, you know, business fundamentals, profitability, cash management. You know those are like kind of the mechanics of it. But going a step beyond and focusing on the leaders themselves, the CEOs, what are some of the qualities that that you might find maybe resonated across all these companies? Or just from your experience and working with so many companies in the space, you know, what is it that you believe are some of the key characteristics of a of a successful CEO?

Mitchell Osak: 28:22

Okay, so I'll. I'll single out a couple only because I think they got it right in the first place and although they're not where they would probably like to be and they would be a little bashful if they knew I was mentioning their name I'm going to throw out some names only because I think they've got that alchemy down right. One CEO is a gentleman named Mike DiGiulio. He's the CEO of Village Farms. Village Farms owns Pure Sun Farms in Canada, Rose Life Sciences and, I think, CBD Botanicals. They also own a few million square feet of greenhouse in Texas, so Village will be a player.

Mitchell Osak: 29:08

What separated Mike, in my opinion, from a lot of his peers was that he always saw cannabis as an agricultural product. He didn't come in like a lot of people who said you know, cannabis is beverage, alcohol, or cannabis is CPG or cannabis is medicine. He saw cannabis as an agricultural product, so he focused on growing the best cannabis at the lowest possible price. That has held his company in very good stead. They're fantastic growers. They've got a beachhead now in Holland with one of the 10 licenses there for the adult use market. I like Mike because he's a grower and I think people who can grow and who focus on growing and whose values and corporate DNA are around cultivation industrial scale cultivation are going to win. That's one example.

Mitchell Osak: 30:05

Another example is another Canadian company, but, I think, a dual citizen. His name is Zach George. He's the CEO of SNDL. Zach is a consummate gentleman.

Mitchell Osak: 30:20

One of the many reasons I like him is that from the early days when I spoke to him, he was all about corporate governance, the adroit use of capital, buying low and rebuilding. And he, according to some I'm not sure I would say this because I'm not privy to a lot of their strategy conversations but his strategy of buying distressed assets in the United States at a low price, turning them around, plus the affinities he's developing through retail and cultivation, as well as alcohol retail and cannabis retail, I think is going to generate some very interesting synergies in this industry in terms of running high performance retail operations, in terms of understanding cannabis consumers, particularly alcohol consumers that are transitioning over to cannabis. Zak and what they're doing at S&DL is a very interesting model of how some of our winners might evolve. So those are two. There's a host of many others that are doing great work, but those are two companies that most people might know if they're investors or operators I love that companies that most people might know if they're investors or operators.

Ben Larson: 31:38

I love that. So understanding your business for what it is and obviously the consumer kind of makes me think about my own company. I told Harold in the early days I'm like, no offense, we're building the company around the science, but the science isn't rocket science and so we have to build more than just an emulsion right isn't rocket science, and so we have to build more than just an emulsion, right?

Mitchell Osak: 32:00

So can I jump in for one second, just to your point, ben? And I just wrote about this two weeks ago and I'm unplugging myself, but you know there's one. There's one thing having a great strategy. I know your firm does, I know Anna Anna Reid, there's a lot of that kind of stuff, but you know execution matters more much, if not more, in cannabis right now than I think strategy does. There's a lot of great companies that have similar strategies and doing similar things. You see that in the United States, especially in certain markets. But what I think is separating the winners or the high performers from the pack is their ability to execute, and that means getting stuff done on time on budget, hitting those market windows, making fewer errors and sort of doing the right things right, as the late Stephen Covey would say. So to me, execution is so critical right now, and the good ones are doing it great and the also-rans not as well.

AnnaRae Grabstein: 33:01

Diving into execution a little more. I think it's interesting because there's a lot of companies that have had bad performance up to now and there are sometimes outsiders or sometimes it's the existing team that are trying to turn it around and steer the ship the right way. And if you are a leader who is tasked with trying to improve execution, what advice would you give people or how would you think about getting started? Where do you start?

Mitchell Osak: 33:34

Oh boy, that's a big question. You know, like a lot of things in business and a lot of things in life, which the right answer is multifactorial and dependent on the organization, their culture, their strategy and the people there. In terms of general truisms, what I like to say to clients when I'm talking to them is you know a couple of things. One strategically focus. Don't try and be all things to all people in every market. That seems obvious, but in cannabis that's not so obvious, particularly for an industry and we talked about hemp earlier that likes to chase growth or chase the next sexy category that's being launched. So one thing Anna Rae is for these firms is you know, pick a few lanes, probably no more than three, and really double down on them, number one.

Mitchell Osak: 34:26

Number two is you know what we've been seeing in cannabis for the last couple of years and what was an Achilles heel from the very beginning and I won't say it for the United States of years?

Mitchell Osak: 34:35

And what was an Achilles heel from the very beginning and I won't say it for the United States, because I wasn't necessarily there at the time, but I was in Canada we didn't bring in all the best talent.

Mitchell Osak: 34:45

That's a euphemism, it means a lot of things to a lot of people, but I would say there was a lot of people who actually didn't know how to in marketing, who didn't know how to build brands yet they were given million dollar budgets sales people who didn't know how to sell according to professional competencies, that kind of stuff. So we brought in a lot of people, we trained them up, they became battle-hardened, many of them were laid off or they left the industry. And now we're faced with a situation where we tend to underpay people, we underappreciate them, we overload them with work, so it's hard to execute through a demoralized, underpaid, very cynical workforce now. So we're just, you know, as an industry, and now I'm judging okay, we just treat our people, our teammates, like shit, pardon my language and that's not true of every company, but it's true of a lot of companies. And if anyone wants to disagree with me, show me a very healthy corporate culture in a mid-sized to large-sized cannabis company.

AnnaRae Grabstein: 35:51

I've yet to see one, so obviously I will disagree, but I want to jump in and push on it a little deeper, in that I think that one of the reasons that corporate culture has degraded so much is that companies haven't actualized the promise of profit and that has resulted in companies not being able to to execute on some of their more lofty internal culture focused aspirations that were in place years ago. Um, there were people that were leaders of corporate social responsibility in cannabis. Like, those roles don't exist anymore and um and and. Part of that is based in the fact that there hasn't been great execution, which is what you were just alluding to.

AnnaRae Grabstein: 36:41

But I think that part of great execution has a lot to do with pricing in the market has been so challenging for cannabis companies is pricing because there has been oversupply in lots of markets and companies have responded with just cheaper and cheaper products, which ultimately has driven down margins. It's driven down dollars per transaction to be adding to the bottom line. I mean, it's just had this massive ripple effect and it seems like it is almost a game of like who can hold on longest with the cheapest prices, and I think that there's going to have to be a reconciliation at some point. Most operators are really nervous to raise their prices because it doesn't seem like the consumers have the appetite to spend more money, especially in these economic times. And if your competitor down the road is also selling something for cheaper than you are, it makes it very difficult to raise your prices. And you talk about pricing a lot. I would love to hear your thoughts of how we might get out from under these bad pricing strategies.

Mitchell Osak: 37:59

Oh my gosh what a huge question that we can speak hours on. I completely agree with you. I mean, cannabis is a prisoner's dilemma situation in many, many markets. I mean the obvious answers, the 10,000 foot answers is going to be you know you don't want to compete on price unless you have some unique advantage like cost or something along those lines, or infinite amounts of capital. Companies have to figure out how to compete in other dimensions around price and that can be convenience, brand, whatever you want to call it such that they can sustain price premiums or higher prices relative to the competition pricing in our industry.

Mitchell Osak: 38:55

I do some pricing work. I should be doing three times more than I do right now and it bothers me because there's only so many levers to drive up margin and drive profitability. And following the market down to even lower and lower, like $79 in Canada, ounces, which is what you can get an ounce in Canada for a flower, is ridiculous. No one is going to make any money and it's just going to ruin the entire industry. One of the things that we don't do a lot in cannabis that we need to do are more pricing tests, and what do I mean by that is raising pricing of certain categories or at certain times and what have you, and try and find those moments or those customers where you face inelastic price demand. So if you raise your price you're not going to lose customers.

Mitchell Osak: 39:44

And if we can find those bits and pieces, even within local markets, where we can take pricing up, I think a lot of companies will be much better off. By the way, nothing I'm advocating here is nothing that's not done in financial services and CPG and other retail. So this is not a rock star kind of recommendation, but it does take work and a lot of analysis and a little bit of courage and a little bit of persistence to try this out and to hold the line for a week or two weeks or a month and see what happens. I think if a lot of companies do that, they'll find that they'll be able to generate a lot of nickels and dimes and quarters and enough of those will be able to buttress their margins and their profits at the end of each quarter.

Ben Larson: 40:31

I think the biggest challenge here is what you're saying makes a lot of sense. And even if we had 99% penetration into the market with this message and got through to people and convinced them, like, don't do something unsustainable, there's going to be some idiot that comes in with a pile of cash that thinks it's infinite and what we've all been terrible at in the cannabis industry is judging timelines and so they think that cash will last and that they'll starve people out of the market. But there's always someone new coming into space with a smaller pile of cash but can also come in with that approach, and so it's just this perpetual driving down of costs and it'll level out at some point. But I don't know if I'm not convinced that suddenly, you know, convincing 90% of the market to be responsible with their pricing is going to fix the problem. Unfortunately, because we're just in this kind of emerging space that's been emerging for decades. But, not to end on a cynical note, we are approaching the top of the hour.

Ben Larson: 41:34

Mitchell, I have one last question that's kind of tangential for you. You know you spend a lot of time on LinkedIn. You've chosen to go kind of in this long form newsletter. I'm curious are you happy with your approach? You know I spend a lot of time on LinkedIn doing various forms hosting a podcast, various forms hosting a podcast.

Mitchell Osak: 41:59

What's been one of your biggest learnings or surprises in putting out this newsletter. Okay, so, one of my biggest learnings? Well, there's two big ones. I would say One of them is purely selfish. I publish a lot because it's a manifestation of a lot of my learning and my synthesis of lessons and data and connecting the dots from other industries and other eras to cannabis. So I do this selfishly because it keeps me on the cutting edge of the focus areas that I want to prioritize strategy, development operations, capital markets, that kind of stuff. So I do it for me, I don't do it for anybody else. That's one thing. The second thing is that I want to be different.

Mitchell Osak: 42:43

Getting back to my point 20 minutes ago, my difference in the market isn't to rail against the lack of legalization or the delays in rescheduling. There are way smarter people, closer to the actual decision makers, that can talk about that. I wanted to go to white space within the cannabis industry and the conversation where there aren't a lot of people discussing the media issues and the complexity of this, much like you guys do on this podcast, and the complexity of this, much like you guys do on this podcast. So one of my major learnings I've discovered is how many senior connections I've made and senior conversations I have with CEOs, cfos, brand managers, policymakers around the world. They want to talk to me quietly, off the record. They don't want it public, but they want an talk to me quietly off the record. They don't want it public, but they want an exchange of views and and that kind of quiet um exchange is what makes me hopeful for this industry, because there are people that listen to the three of us.

Mitchell Osak: 43:46

We don't always see it online, we don't always see it through likes and comments, but there are kindred souls that want to do the right things and build a healthy, sustainable industry and an industry that pays attention to social justice issues, by the way, and safety and education. They are happening. It's just very often below the water surface. So that big learning for me was that if you do enough of this and you're mature trying to be mature and professional, not judgmental, balanced I try and be very, very balanced you one will create a discourse with a lot of the right people in this industry, and that's at least the beginning of when Anna Rae was and you were talking about at the beginning in terms of influencing policy, at least I hope.

AnnaRae Grabstein: 44:38

Mitchell, thank you so much. I know that we are a little shorter than we usually are because we started late, but it is time for our last call. So, mitchell, this is your chance to give a final message to our listeners. Advice, call to action, closing thought Mike is yours.

Mitchell Osak: 44:55

You know, be brave, you know, hang in there. You know this is hard work. It's not going to get any easier. There are, there are a lot of people myself included, but but others who will help. But but look at this industry through clear, clear eyes. No more rose-colored lenses. This is becoming a real industry and we all have to act as such. It's going to get a lot harder before it gets better, but when it gets better, it's going to be amazing. I know this because I see this in other parts of the world and how cannabis is evolving there. Canada and the US are a bit of an exception. The world is doing it right and they're offering a good model for how we can improve things here. So good luck to everybody. Amazing.

AnnaRae Grabstein: 45:40

Thank you so much.

Ben Larson: 45:42

Mitchell Osok. Thank you so much for your time and knowledge and everything that you're doing in the industry, Looking forward to the next time we get to catch up.

Mitchell Osak: 45:51

Thank you, and right back to you guys as well, and your contributions as well. I appreciate it All right.

AnnaRae Grabstein: 45:57

It means a lot.

Ben Larson: 45:58

And thank you to our live studio audience for engaging during our recording. Love seeing the comments flowing in. We'll drop into the comments and interact with you there. If you're listening via our podcast on Apple or Spotify or YouTube, please like, subscribe, share, review all the things. That really helps us get seen. Thank you to our teams at Vertosa and Wolfmeyer and, of course, our producer, eric Rossetti. As always, folks stay curious, stay informed and, most importantly, keep your spirits high Until next time. That's the show.