AnnaRae Grabstein: 0:00

If a leader is not truly living the purpose and the values that the company is espousing, it's a hard stop. It won't work. But when a leader does truly metabolize the values and the mission and the purpose into their actions on the daily, it actually becomes pretty easy to filter that down through all the rest of the company.

Ben Larson: 0:32

Hey everybody, welcome to episode 91. 91 of High Spirits. I'm Ben Larson and with me, as always, is Anna Rae Grabstein. We're recording Thursday, june 5th 2025. And it's been another week. In cannabis, we have an appropriations bill that's dropped. The fire keeps on burning. We're going to dive into all that, but before we do, anna Rae, how's your week going?

AnnaRae Grabstein: 1:01

My week's going really great. It's my dad's birthday today, so happy birthday dad. Happy birthday big man yeah.

AnnaRae Grabstein: 1:09

Is he a listener? Not really he. You know, sometimes I might tell him and he'll listen. He is the one that was the first cannabis consumer in my life, so he showed me the way. He didn't show me the way. I won't blame him for my interest in cannabis, but he was a significant normalizing factor in in my life for the plant. So, yeah, it's been good, although my morning was full of credit card fraud and I have to give a shout out to the robots that detected the fraud. I feel relieved but surprised at what a mess Careful when using those credit cards in Mexico.

AnnaRae Grabstein: 1:52

Yes, yeah, good reminder. How about you? How are you doing?

Ben Larson: 1:57

I'm doing okay. It's been a busy week. I've been struggling with a little bit of back pain, so that is not fun. But I'm on my third day of prednisone treatment and I am sitting upright and speaking with you, so things are looking up.

AnnaRae Grabstein: 2:13

Welcome to aging man. I've been sticking with my weight training plan and I've got this really cool trainer that keeps telling me how great I am and I keep thinking that I'm just paying her to tell me that. But it's working and I keep adding weight, so that's good.

Ben Larson: 2:34

It's not a trainer, but I have recognized how ChatGPT is really good at giving you the nice sandwich where it's like this is well thought out, really critical points, and then it'll get into kind of the criticism.

AnnaRae Grabstein: 2:52

So I really appreciate that to the designers over at OpenAI. That's hilarious that you appreciate that. I read an article this week that the positive feedback from chat GPT is actually breaking breaking our souls and making our egos inflated is actually breaking our souls and making our egos inflated.

Ben Larson: 3:07

Well, it's hard to be more inflated than me.

AnnaRae Grabstein: 3:10

Yeah, right, and so between the two of us, our teams are going to be hitting the streets next week with a bunch of different events and cannabis and beverage. So let's go over those real quick. If you want to see us folks from Wolfmeyer, folks from Bertosa yes, we will be in Chicago at Benzinga. I will be on stage on Monday. My panel is how to sell your business without getting screwed. So if you would like to learn those things, come listen to what I have to say, and I do. And and then I will be off to Denver after that for the International Cannabis Lawyer Bar Association event, which is a lawyer's event. I'm not a lawyer, but I will be talking to the lawyers and at the same time we've got Canra, which is the regulators event that's happening in Denver also. And then BevNet is in New York right, and I'm missing all of it and Ben will be single, dadding and taking care of his kids, which is most important, but his, his team, will be spread all over.

Ben Larson: 4:28

So go find him. The Vertosa troops will be, I think, at all of those with the exception of the lawyer event, but Canra, definitely look for Diane Eberlein Benzinga, I believe Sarah Falvo and Ryan Pinsky will be there, and then I'm sure we'll have some team members at BevNet. Yeah, Awesome.

AnnaRae Grabstein: 4:47

Cool. And then, ben, before we jump into our big future casting discussion that we promised our audience, will you give us a bit of the update on this news with the appropriations bill?

Ben Larson: 4:58

Yeah, so appropriations bill is similar to the farm bill and the fact that it's this recurring thing that can influence the world in which we operate. Only, the difference between the appropriations bill and the farm bill is that appropriations bill has to happen every year. It was supposed to happen back in March and, if you didn't recognize it, it did port over the language from the Miller Amendment that was introduced last year as part of the Farm Bill and appropriations, and so it's back, not surprisingly. There were some efforts done through the beginning of the year in order to influence and hopefully not bring the Miller Amendment back into it, but it's there, and so there's a lot of work to do. It is being heard today for markups and we have until September, I guess, to get this thing done, and so I don't want to spend too much time in it. There's much smarter people involved.

Ben Larson: 5:58

I'm sure if you go on LinkedIn, you'll see USM Roundtable, caba, any other organization, ncia, looking at the federal movement and realizing that this is an important one if we want to keep any element of hemp cannabinoids open in the US, and so I think the moral of it is that the farm bill work is very important to be done. But critical path right now is appropriations, and we don't really want to be revisiting this every year. So the importance here which I think we will discuss in kind of the the rest of the show is is how clarity is is super important. You know, we can't be operating in ambiguities if we're going to survive yeah, the ambi.

AnnaRae Grabstein: 6:47

It's the ambiguity that's killing us. It's like we just need to know what the path is and then people can make plans and and run after the right thing and even by virtue of us saying ambiguity.

Ben Larson: 6:59

I know that in of itself is controversial in some, but at the end of the day, if we're having to revisit the language periodically, it's ambiguous. You know, it's like our future is ambiguous, and so what we need to be driving towards is finality and clarity, certainty. All those things.

AnnaRae Grabstein: 7:20

Yeah, use the thesaurus. That is what we want. We want to know an outcome that we can depend on. Well, so you know, ben, you wrote a bit of a manifesto recently talking about the past, of how we got here in terms of a bunch of legislative history, which I was really happy to read and got me thinking about where we're going also, and you and I talked about it and we thought this is a great opportunity to really speak to people who listen to this podcast and who are turning to us, for our thoughts to turn towards the future a little bit. Do you want to set the table by giving us a little bit of what was your reasoning behind talking about where we came from and what were some of the big takeaways?

Ben Larson: 8:14

Yeah, and I appreciate you subscribing to my infused insights newsletter. So thank you for reading. Totally. Look, I mean it was. It was inspired by just the, the emotional responses to what's been happening in texas, and anytime something like what happens was was senate bill 3 in texas, the banning of hemp or any other kind of movement on cannabis or hemp?

Ben Larson: 8:42

There seems to be a lot of pointing the finger, blaming, complaining, and what often happens is we're being pitted against each other hemp versus cannabis, hemp beverages versus the rest of hemp, licensed cannabis operators, dispensaries versus brands Like it's just happening perpetually and think we're we're put into this terrible situation where people are fighting for their livelihoods and that is forcing them to lose kind of perspective on the greater scope of of our overall objective as an industry. And so you know, the one thing I've always confidently fallen back on, and why I haven't been afraid to be outspoken about my perspectives, is that at the end of the day, I want to see the plant recognized for what it is and completely normalized and destigmatized and made available responsibly to society. In fact, that's embedded into our company's mission. You know, our purpose as a company is to unlock the healing powers of the plant and create accessible or create access to people responsibly around the world, right. So it's like, as long as we're doing that and we're on the right path.

Ben Larson: 9:59

And so I always kind of try to ask myself, like, how did we get here? And if we look at the greater arc of cannabinoids and people's familiarity with them, you have to look all the way back to the drug wars. You have to look at those times, those decades, where cannabis and hemp were both on the Controlled Substances Act, essentially being treated as the same plant as we often like to talk about. And it wasn't until recently where we had this bifurcation right. We had the 2014 Farm Bill that kind of started to signal the separation of hemp and cannabis and created some interesting pathways. 2018 is what really kicked off the CBD boom and it wasn't really until, like the pandemic years and beyond, where we really started to understand the opportunities with intoxicating compounds and all this and so isn't it interesting it took that, it took a few years.

AnnaRae Grabstein: 10:53

These, these legislative shifts in the farm bill, both in 2014 and in 2018, did open doors, but it was not immediate. People weren't paying attention to the language. And then what opportunities the language provided, like they are today Because now there's so much riding on it Once the door became open. Now we've got hawks looking at every word, making sure the door stays open or trying to close the door.

Ben Larson: 11:21

It's like someone cracks the door open and then a bunch of people walking by, it's like one person stops like, hey, is that door open? And then a little bit like, and all of a sudden they're like peeking around through the doors like anyone in here, and you know it's like, and then once it's open, it's like boom, kick it open, like, and then everyone's like hey, everybody, this door is open and now there's a festival inside now there's a rave and this.

Ben Larson: 11:46

We're having a great time. It's like we should do this all the time, and you know, as mark hauser said, I don't want to be flipping um, but it's kind of been like this great experiment opportunity, uh, to create access to cannabinoids, to leverage the normalcy that the legalized movement has created. And, going back to my motivation for the piece, like just trying to point out to everyone that we all need each other. We're all here today because of the work that each other has done.

Ben Larson: 12:19

And when I say each other, I mean hemp and cannabis and all these disparate groups that I was previously talking about. But I wouldn't be building the company that I am today if I didn't believe eight years ago that low-dose hemp beverages or low-dose THC beverages were a big opportunity for normalizing the plant as a whole, right, and so, whether you call it hemp or cannabis, for me, whole right, and so, whether you call it hemp or cannabis, for me the opportunity is about creating legal clarity in creating access to the plant for people. Right, and I see beverage as a really big opportunity for taking that incremental step forward. And, and I think the challenge right now is, if you narrow the lens, that feels like things are being taken away from this hemp movement. But in the greater arc of cannabis in general, I see there's actually been a lot of advancement that's been made in the last year because of just all the activity that's been occurring.

AnnaRae Grabstein: 13:22

So I think it leads into and thank you for that, thank you for that reflection on what you wrote about, and I hope that it makes sense then for us to be thinking about where we go from here and where we go from here and where we are now. I think you've started to open up a train of narrative that's really interesting about hemp being a great experiment to prove cannabinoid interest broadly. As someone who started my cannabis career in the medical space and then in the adult use regulated cannabis space in California, I really looked at hemp as it was beginning, as a major threat, and over time my perspective has shifted, not necessarily to let's free all of the hemp and not have regulations, but exactly what you said of wow, this has been a great experiment. That's undeniable to prove that there are unique pathways for cannabis to exist in a more normalized way.

AnnaRae Grabstein: 14:28

That moment when we went out to dinner in Minneapolis and got to sit at a fancy restaurant and there was THC beverage on the cocktail menu was really meaningful for me. It was like holy cow. This is what I've been working for for 15 years to be able to enjoy a five star meal and to get to choose whatever it is that I want to drink, whether it was tequila or water or THC all of those things, or God forbid all of the above, all of the above, and so I love this point that one of the things that hemp really has done has shown that there is this broad interest in products made with cannabis inside of them.

AnnaRae Grabstein: 15:17

And how we get there, how they come to market. What the regulatory pathway looks like yes, it's complicated for a lot of reasons, but it will never truly go back in the box to be able to say that people don't want this anymore. Even if Texas fully shuts down their hemp market and SB3 gets signed by the governor, nobody can ever say that Texans don't like cannabis, because it's clear that Texans really enjoyed buying THC and they've been buying a lot for a couple of years.

Ben Larson: 15:53

Whether it's $2 billion, $4 billion, $8 billion. I've heard lots of numbers over the last several months. 55,000 jobs in Texas, we've heard. What has happened over the last six months in particular is that the community has shown that they're very supportive of these products and that they want these products in the most conservative of states. We also have a lot of external forces that when something like this would typically happen, we'd be fearful of what it would signal, like how it would reduce the forward-looking sentiment for the category.

Ben Larson: 16:32

It's not what I'm seeing right now. I'm seeing people more motivated than ever to fight and people writing hundreds of thousands of letters to the governor in Texasxas and and like mainstream media, both conservative and and liberal, like speaking up and being like this is not how to, how we address this. Like we've talked about this on previous episodes, bans are not the answer, especially when the cat has been this far out of the back. You know, again, taking the longer lens on everything. This is like a ban may come in Texas. It's not official yet, it hasn't been signed, a veto is required and I hope that does happen. But if it were not to happen, we're not done in Texas. It's like there's a two-year legislative cycle, which is painfully slow, but you better believe that we're coming in full steam two years from now. No-transcript.

AnnaRae Grabstein: 17:48

And the challenges that hemp faces at certain states are different but not dissimilar to the dysfunction that regulated cannabis faces in some states, due to the ways that overregulation has challenged the industry, to the ways that over-regulation has challenged the industry.

AnnaRae Grabstein: 18:09

And so we have these market by market challenges. But there's a difference between chaos and transition, and I think that the companies and the leaders that are going to really show resilience in this next chapter for the sector are the ones that are wearing that lens of of transition and adaptation. Uh, because, because if there's one thing that I've learned in cannabis is that reinvention is something that you can almost depend on as a human and as a company. It's that there is going to be change, and so we have to build that into our DNA. We have to stay open to, like what you said, ben, this long view that we know that the products that we're creating are having an impact on people's lives. The plant is creating alternatives to different types of intoxication that is less healthy for people than ours over here, and it's going to work itself out. But it's this space in the middle, and how do we get through that? How do we evolve and thrive? Through transition and reinvention.

Ben Larson: 19:23

Yeah, I'm curious though You're right and I could speak to that about how we've designed our business and happy to jump into that but I'm curious about your perspective about the operators that are in the space and the ones that are showing the ability to adapt versus ones that are less likely to.

Ben Larson: 19:45

And as we kind of look at the different segments of operators in space, like you know, I talk about how the, the beverage brands, have shown the ability to kind of be pretty fluid across the various supply chains, be it, you know, regulated states, hemp or canada. They's still largely being a brand. Some of them are, are vertically integrating and getting into to manufacturing and all that. But then we have, like the MSOs, and then we have the, the, the licensed operators in the regulated States, like the dispensaries and the licensed brands, and so I don't know if I see a lot of adaptability. I see, you know, the them locked into these frameworks, that that have been established through the legalization process, and feels kind of stuck Right and it changes on state level, market and you know, what's happening in California is substantively different than what's happening in Florida and that's substantively different than what's happening in New Jersey and Missouri.

AnnaRae Grabstein: 21:00

But in terms of your question of my thoughts of what are the type of businesses that are able to reinvent themselves and to be resilient in the face of all this change, I think that when your business model is dependent on regulatory capture, it is a lot more challenging to shift and change, and a lot of the early MSOs that went into limited licensed states and that vertically integrated are who I'm talking about. I think that if your business model is dependent on not having competition, you are not necessarily setting yourself up to be able to compete. You are in this sort of engineered monopoly and it it represents a moment in time, and it might be the moment in time that we are now, but what I'm seeing is that the businesses that are in more competitive environments and are still winning with profitability and they exist, and I think that we don't talk about them a lot. The headlines are about the failing cannabis businesses and there was headlines this week about the decline by top line sales of the California market, and that might be true, but there are still businesses inside these markets that are growing and are profitable and what is the difference? That are growing and are profitable and what is the difference?

AnnaRae Grabstein: 22:34

I think that some of the things that I see inside of the businesses that are thriving and are profitable is a leadership quality that I think the new terminology is multi-hyphenate. These are leaders that are wearing lots of hats, they have lots of different types of skills, they are getting their hands dirty, doing a lot of different things, and also these are businesses that are investing in humans and taking a long view, as opposed to white knuckling through making really fast, impulsive decisions, to white knuckling through making really fast, impulsive decisions, but really doing the opposite of that Investing in humans, investing in process, investing in leadership and creating deep authenticity and integrity as underlying foundations to their business, knowing what their business foundation is, leaning into their purpose, their mission and their value and values, and then making decisions that sit on top of that, just like what you were just saying in terms of the way that you delineate what is supporting your long-term purpose versus what isn't, and and if you're moving forward in the right direction.

Ben Larson: 23:45

Yeah, I want to dig into this. What is it in the right direction?

AnnaRae Grabstein: 23:50

Yeah, I want to dig into this. What is it? Hyphenate? What's the word Multi-hyphenate the less sexy term of that? Could that be like a generalist, or is that?

AnnaRae Grabstein: 24:03

Yeah, cross-functional leaders, and really what this is about is we've talked about how some of the larger MSOs have gotten really large at the top, and what that has meant is that they have a lot of corporate fat and that they've had trouble competing with a mom and pop business. Well, let's stop calling it mom and pop businesses businesses. Let's call these lean businesses that are really doing what they need to do to stay efficient and operationalize in a way that makes sense for the costs and prices that exist in the market. I spent time working in the meat industry, and in the meat industry there's no burning cash. It's like you watch your margins they're thin and you're either making money or you're not. And if you're not making money, then you're going to figure out a way to shift your operations in order to make money. And that is the same kind of profile that I'm seeing, with leaders that are doing whatever it takes shifting into different roles and responsibilities inside of their company to truly understand the elements of the things that are going to push success forward.

Ben Larson: 25:14

Yeah, one of my favorite metrics to be tracking in our company is just revenue per employee and we track it on a trailing 12 months, so it's not too reactive or anything like that.

Ben Larson: 25:26

But growing that over time and seeing how much we can do with each person in the team has been at least a big focus for the last two or three years.

Ben Larson: 25:36

And it's funny how tracking certain metrics really just changes your mindset about certain things and like decision-making, and every time we start considering like a new resource allocation, have we thought about all the ways that we could actually execute on that before we throw more cash at it or more bodies at it?

Ben Larson: 25:58

I think it's put us into a really kind of healthy mindset. But what you were saying also brought up kind of a another topic for me is how we react to the dynamics in the market and how we kind of predict them so that we're able to manage that cashflow month over month and we don't find ourselves six months later like having flown off a cliff without knowing it and, I think, being in the business and understanding what are all the metrics that you're tracking for every department, how do you know you're kind of on track and what adjustments need to be made, like every month, to be right, sizing your efforts based on what the market's doing chapter that is very metrics focused, it's very based in realism, it's based in market dynamics, it's based in solid financial leadership, because there is not the type of capital that there was six years ago coming into the industry.

AnnaRae Grabstein: 27:01

I think the perspectives about the venture opportunity in cannabis have shifted. Whereas we had people coming in and investing in seed stage companies years ago, now if there's going to be investment, that investment tends to be growth, growth capital. Sometimes it's growth debt, sometimes it's growth equity, but either way it's. It's that capital wants to see that these are companies that have traction, that understand the metrics that run their business, and that any money that's going to come into the business is for a specific purpose. That is going to come back as growth and profit and cash flow to support the business, and that is a very major shift compared to where we were when legalization and some of these early markets started coming on.

Ben Larson: 27:50

Oh yeah, I'm guilty of having taken on some investor dollars with just really stars in the eyes and high growth well at least mapped out on the pro formas. But this timeline has just been much longer than anyone anticipated. We don't have many comps or any. I really don't believe we have any comps when it comes to M&A or acquisitions. It just feels very chaotic and either opportunistic at the time or sometimes lucky. Finding any trends in any of that has been hard, and so I think early stage venture capital, or at least series A um, is going to be near zero. You know for the foreseeable future that you might get your seed capital, but you got to turn yourself into kind of a profitable, sustainable business really quick From from that moment.

AnnaRae Grabstein: 28:41

Absolutely.

Ben Larson: 28:42

Like series, a crunch is known as a thing in Silicon Valley.

AnnaRae Grabstein: 28:46

it's going to be like series, a void uh in in the cannabis industry yeah, but then within that context, I am curious of where we both think that exits land in the coming years, because I do see some interesting things happening and, uh, within the context of the, those quiet heroes that are operating in markets with profitability, I think that people will have options to sell their companies. I just talked about that. I'll be talking about selling your company at Benzinga next week, so I think that it's easy not to get screwed if you can't sell.

AnnaRae Grabstein: 29:25

Yeah, exactly. All you have to say is no, and then you're not screwed. That's, that's the, that's the my panel for dummies. But I mean, who do you think, or do you think there are acquirers in the next 24 months coming into the space, be it regulated cannabis, hemp, what, what's? What's happening from your perspective?

Ben Larson: 29:48

oh man, um, I mean, look it's. I'm in a weird mental space today just because of the appropriations bill, uh, that I got to read through yesterday, and so if we don't have like an existential crisis on our hands in september, that I do think beverage is like. There's just really interesting opportunities in beverage, my company included. We are in that middle kind of growth stage profitability, focusing on just providing better and better service and innovation to the marketplace, and we have great relationships with large ingredient manufacturers, like the large beverage entities looking at the space. And so whenever that time comes, whenever there's a little bit more certainty about the runway and I do think there's some general sentiment that even if we did get status quo from the farm bill and appropriations which we were also discussing that, the challenges of status quo but if we did get status quo, that would be kind of a signal that it's like all right, well, we have another several years to further ingrain, ingrain this marketplace, and so that would be looked at as an opportunity by these bigger companies.

Ben Larson: 30:58

The brands, too, the brands that are being built. There's some serious revenue being done by by some of these, the, these hemp brands, and so the reason beverage is so interesting is, they're always on the bleeding edge of introducing new categories, new ingredients, like this is how red bull was created beverages willing to push the envelope more than any other cpg category. So I think that's where, for a multitude of reasons, that's where we'll see a lot of uh, m&a. To start, there's also just internally, uh, you know, the cannabis and hemp companies coming together to get bigger and more sustainable. So I think there's, you know, the, the investment bankers are probably going to be really busy trying to, in a more intelligent way than than, say, the past, like you know, weave some of these companies together to create healthier companies well you.

AnnaRae Grabstein: 31:48

you highlighted that a lot of the opportunity on the hemp side of the market is dependent on legislation and I think you're right and I think that with some level of certainty there will be massive opportunities for some of the companies at the top who have really gained traction and proven themselves to to have some nice exits. But there is more certainty in the regulated cannabis part of of the sector.

AnnaRae Grabstein: 32:17

And while the regulated cannabis companies have experienced more pressure, be it downward pricing pressure, complex tax structures, a lack of efficient supply chains. Those that have clean balance sheets, who didn't take on too much money and have gotten to a place of profitability, have options, and I think that private equity is becoming more comfortable coming in to these types of companies, and we're seeing that more and more and I think we will continue to. And then the other model which is really interesting, and I am seeing more and more, is employee stock ownership through ESOP models. Oh yeah.

Ben Larson: 33:01

Shout out to Darren.

AnnaRae Grabstein: 33:03

Yeah, we had Darren Gleeman on the show. It was a pretty new concept for me at that time and since then there's been more announcements of more cannabis companies doing it, and I've even been a part of a discovery process with a client who is a company that really bootstrapped and didn't take on a lot of capital and as a result, they have a clean balance sheet and they're profitable and it's a really good option to be able to continue to invest in the culture that a company has created the people as opposed to selling through a process where the leadership shifts and changes and could really actually change the internal culture of a company. I think ESOPs are a great way to do that and it can all be done with seller's notes, and so if a company can take on the debt of being able to pay off the owners over time, over certain terms, it can be a great way, I think, to maintain continuity of mission and purpose while also providing an out for the early founders or capital partners into the company. So I'm excited by that path also.

Ben Larson: 34:23

It's episode 38, if anyone listening wants to go back and listen to the ESOP episode.

Ben Larson: 34:28

So yeah, 55 episodes ago, so probably over a year now oh yeah, over a year wow, time flies it is really interesting I if I, if I recall correctly to be eligible or to have it make sense, you would want to be doing, you know, at least 20 million in revenue and and not be growing a rapid pace. So like if you're happy with 10 to 15% growth year over year, you have a clean balance sheet and you're doing, like I said, in excess of 20 million, then it's a really good option and provide some liquidity to the founding team.

Ben Larson: 35:03

And again, like you said, puts the ownership into the hands of, hopefully, a unified employee base. And I do want to kind of jump into that part of the conversation like how to build those companies and build those cultures for this phase of the industry that we're entering, right, how do we build strong cultures and how do we make sure that we're building a company that the employees would want to own anyway? What are your thoughts?

AnnaRae Grabstein: 35:34

oh, oh, I wish you'd warned me on that one ahead. How do we build culture? I, I truly believe you don't.

Ben Larson: 35:42

You don't have to like call anyone out. I'm in fact. I encourage you not yeah uh, but I know you work with a lot of different companies of varying culture and success and I'm just curious what are you seeing in the industry? What do people need to be focused on?

AnnaRae Grabstein: 35:57

Well, it starts at the top, unquestionably, and that means that if a leader is not truly living the purpose and the values that the company is espousing, it's a hard stop, it won't work. But when a leader does truly metabolize the values and the mission and the purpose into their actions on the daily, it actually becomes pretty easy to filter that down through all the rest of the company and so what percentage of companies do you think, actually have a solid brand foundation to refer back to?

Ben Larson: 36:35

Like when you go and engage with new companies, do they say here's our brand foundation, here's what we stand for, here's our purpose, here's our mission, here's our habits? Do companies do this?

AnnaRae Grabstein: 36:45

No, and I'd say that most companies and I don't wanna call anyone out, but often say that they do. They say they have a mission in place, or they say they have values, or they say they have some pieces of it. And I'll be clear I call it the foundational pillars, you call it the Brown Foundation. What I'm talking about is purpose, mission, vision and values and, as this underlying structure, that if you have that, then you can build a strategy on top of and a company on top of it, and so usually people think that they have some piece of it, and then I'll say well, can you share it with me? It would be really helpful, as I'm getting to know you and and sometimes they can't even find it, or it's not written down, and and or it is, and it's a it's a page long mission statement that reads like like a chapter out of out of you know, a book written in the 1920s. So almost nobody has has that, and so I think that it's really important to have that solid foundation, but then, not only that, you don't just create it and then put it in a folder in your Google Drive.

AnnaRae Grabstein: 37:53

You figure out how to embed that purpose into all of your work. How is it effectuated inside of your meeting structure? When you do quarterly business reviews or monthly business reviews, are you reminding people about the mission that the company is after, who your consumers are, how you're centered on them, how you're showing up for them? All of those elements like creating a vessel for humans to have purpose is almost one of the most important elements, so that people remember why their work is a part of something bigger. It's just part of a human impulse to be a part of something that's meaningful. We have to create meaning in our work, Otherwise we won't feel good about investing our time and energy in it and staying a part of it, right, Right.

Ben Larson: 38:43

Which is, I think, why so many people are committed to the industry itself, zooming back out, like if you are serving the progression of the industry through advocacy, through entrepreneurship, we inherently are part of something bigger, and so it's like if you have a company within that, you need to be able to mirror that and be able to point to, like how, how you're a part of that, or else, like, the cracks are going to start to show right.

Ben Larson: 39:10

And and I think that's where I get into these frustrating conversations sometimes on on linkedin, where I know that, yes, sometimes when I'm speaking from a place, it is speaking from a place that benefits my company. I just see that as a responsibility as an entrepreneur to kind of like build something that's viable in the way that I see the world. However, the way that I see the world does go back to this place of like progressing the industry, creating access and like trying not to lean on something, like, you know, regulatory capture to do so and I think that's what keeps my team so motivated is that, like, every time we make a decision, every time we post something, it's always built and rooted into that brand foundation and if it doesn't have that integrity at any point in time. It can be called into question by anyone on my team and I'll be the first to stand up if I make a mistake. If I do something that's out of line with our foundation, then I owe a great number of people an apology.

AnnaRae Grabstein: 40:13

Yeah, it's interesting Culturally. Right now we're at this funny place and you know I always make connections to the broader reality of the world. But people are looking for something to believe in and it's coming out in our politics. It's coming out in actually politics. It's coming out and actually a resurgence of people are becoming more religious. In America, for the first time in a generation, we're starting to see certain religions start to bring more people into the fold. Younger people are starting to go back to churches and synagogues and mosques at rates that are actually kind of turning after years of decline, and I think that people just truly need something to believe in, and we look for that first in the things that we do most often, which is our work. So having something to believe in is really meaningful, but that isn't enough. So having something to believe in is really meaningful, but that isn't enough. It can't stop there, because those foundations are often lofty and broad, and so when you talk about how do you create the right culture and how do you build a company, I think more and more we're not building from scratch.

AnnaRae Grabstein: 41:28

In the cannabis sector, we are building from an existing base, whether that foundation is strong or not.

AnnaRae Grabstein: 41:35

Got a foundation, but you have to build something on top of it, and that's like what are the walls, what are all of the elements that really are the backbone of success?

AnnaRae Grabstein: 41:58

And I think that that's really what business strategy is, is what comes after the foundation.

AnnaRae Grabstein: 42:05

It's figuring out what your real objective is, these more concrete, execution-oriented goals that you can put numbers on, that talk about your traction in the market, the ways that you're going to guide innovation in pursuit of very specific business goals, what types of margins you're going to demand in the market, how you're going to regionally focus or how you're going to distribute all of these questions that then become ways that you can take that mission and put it in the hands of people to focus their work. And people are looking for that. They want to be successful, they want to know if what they're doing is contributing to the big goal. And so you start at the top with that lofty goal, and it's not just lofty, it's also with the people. You know it's like the leaders have to embody it and then the structure has to support it, and then that goes all the way down to all the individuals understanding what what winning looks like here for them and seeing how it relates to that purpose that we talked about.

Ben Larson: 43:12

I think the biggest challenge is that a lot of what you were just saying often relies on having a decent understanding of where you're going and what the future looks like. And what we know in established markets is that we can go into the press and we can figure out roughly how large a market is and what the TAM is and how to execute and how to differentiate and all that and generally what a timeline should look like. You know you put X amount of resources in. This is how many customers you can get in front of and you can make some assumptions. You can make some assumptions.

Ben Larson: 43:50

The problem is with with with cannabis in particular, is that we've just had to make way too many assumptions as far as what the forward looking pathway is, and in doing so, sometimes we start to believe those assumptions and we build business models that just travel that kind of narrow path where I think things are just very different. And I'm curious as to your thoughts on, like removing this certainty of the future and understanding that it can go a multitude of different ways on multitude of different timelines. Like, how do you build your business differently from like a kind of a strategy perspective to make sure that you're not falling into these traps of like oh, I built my business on this cost structure, understanding that, oh, maybe legalization is going to make things a little bit easier over time. It's not. And what have we learned over the years? And how do we like enter a space and responsibly build a business where we're not quite certain how big the total addressable market's going to be in a certain given amount of time?

AnnaRae Grabstein: 44:51

Yeah Well, to not answer your question, but we do need legislative clarity. The industry deserves it. We need to keep fighting for it. We need to build some level of clarity of what the laws and regulations are that we exist inside of. So we can't give up doing that, but knowing that we exist in this place of lack of clarity and, putting that aside, of how do we keep moving forward.

AnnaRae Grabstein: 45:23

I think that we look at things in amounts of time that we still can depend on realistically, like six and 12 month increments of truly being able to plan, but based on what is in existence today.

AnnaRae Grabstein: 45:42

And, granted, we're talking about an appropriations bill that could have significant implications.

AnnaRae Grabstein: 45:48

But broadly, we could talk about the next six months in our industry with some level of true understanding of what the market opportunities look like right in front of us, and make some clear plans, not getting too far in front of our skis, not over-raising, not over-promising, standing next to and building relationships with people that we think are going to be long term partners to our, to our business, just doing the right thing, always in the short term that supports the long term, while just building the DNA of reinvention, of making it okay to realize that the thing that you were doing before doesn't have to be the thing that you keep doing in the future, because that is the cycle of denial that we have to get off of.

AnnaRae Grabstein: 46:40

Yeah, you just this concept, you know. I know you want to talk about it next, so I'll let you take it, but I think that what we have to do is we have to get to a place of normalizing the reality of what's right in front of us, still having lofty aspirations that are that's where our purpose and our vision lands about the world that we hope to get to live in one day. But what about the world that we're living in today? Staying grounded in that, planning for that in ways that we can control? Six months, 12 months we got that. It's hard to plan financially past 24 months in cannabis, so don't do it.

Ben Larson: 47:20

Don't do it. I I've historically refused to do like detailed three to five year models as like the you know, the detailed three to five year models.

Ben Larson: 47:31

As, like the, you know the the investors always like to ask for, I'm like I will give you a somewhat accurate, hopefully projection for what the next year looks like. Here's what it could be, with a bunch of asterisks, over the next two years. Three to five years is your guess as good as mine. As long as we're not, you know, crashing into the earth, we're, we're in a good place exactly it's just.

AnnaRae Grabstein: 47:49

Don't spend your time on that. It's just not worth it.

Ben Larson: 47:53

Okay so. So one thing I wanted to get at, just because it kind of keeps going in my head and and kind of helps us kind of circle back to like, where are we in in this phase of the industry? And I keep thinking about the Tuckman model and if you're if you're not familiar, the Tuckman model and if you're not familiar, the Tuckman model is often described as a way that teams develop and so, like, every time you added a significant new team member or you're bringing a team together, hemp and cannabis industry we we kind of jumble this up sometimes like cannabis was going through the forming stages, this very painful, iterative kind of process of implementing new rules. There was the storming period. A bunch of venture capital came rushing in and then we started figuring things out. And we're in this normalization period where we're trying to figure out how to run sustainable, successful businesses and how to like kind of really kind of emerge from this doom and gloom, if at all possible In 2018, and the years that followed possible in 2018 and the years that followed, hemp had this opportunity to do a bit of storming without a lot of the forming, and there have, as we said, been a lot of benefits that that this has created for exposure of cannabinoids to society and normalizing of the plant, and it was built again a lot off a lot of the progress that we'd been making in the regulated cannabis space.

Ben Larson: 49:34

And so, after the storming, what is happening now is this combination of forming and norming at the same time. People are believing that they should have access to it, that it's kind of normalizing, but the rules are being formed as we go and anyone that's out there raising their hand saying we already have rules, it's already legal, it's like it's not clear, like you have to use the structure that's given and we have to have the right rules in the right places, and so that's why there are organizations that are pushing very hard for regulatory clarity. So I just wanted to kind of bring this up because it's breaking my brain a little bit as to like why we're in the situation that we are and it's just like this whole, like forming then storming, not storming then forming. But here we are. I don't know what are your thoughts on this? Are you familiar with the Tuckman model, and am I bringing this out of nowhere?

AnnaRae Grabstein: 50:27

Totally. It's definitely come up and I like this idea of normalization of cannabinoids being an outcome. That is the result of what we called today the hemp experiment. But you are absolutely right that the storming happened before the forming and I don't blame the humans involved. I think that there sometimes is an opportunity that arises and the instinct is to grab it, and that's what that storming was. It was holy cow. There is an opportunity for hemp-derived cannabinoids to fill a void in the market right now. Let's go do it, let's go get them out there. But because the forming didn't happen, we are feeling the pain overall. Everybody, whether you're an operator that started a business or you are a regulated cannabis company that feels that you're competing with the hemp businesses- or you're just being lumped all together in these press conferences that are happening down in Texas, where it's just reefer madness all over again.

Ben Larson: 51:35

It's hurting all of us, right.

AnnaRae Grabstein: 51:37

But norming is certainly what we're going for here, and I think that the experiment has proved that normalization is something that the consumers want. But can we get the ecosystem to support what it is that the consumers clearly want? You know, we'll see. Wow, we've been talking about some big things here. I hope that people are enjoying it and that we're not too out there and thinking about the future, but the thing is, if you're listening to this, what you need to know is that Ben and I are both in this. We are so deep in it. Ben is building his own business and I am working inside of multiple businesses helping them navigate all of this, and we're both not going anywhere, and so there's a lot of challenge no matter how much you want me to.

AnnaRae Grabstein: 52:32

Yeah, it's like yeah we're going nowhere.

AnnaRae Grabstein: 52:36

We're here this is, this is my greatest and best use is to help solve problems in cannabis and and make marriages between cannabis companies and all the things that we're all doing. So I think we're not given up, and I know I'm here because I believe this work matters. But I also love the challenge of it all. I love that we're getting to plant the seeds for what is the future, and I love that I am personally being challenged to constantly reinvent myself and reinvent businesses, because that's just endlessly fascinating, even if it's hard. But we can do hard things right.

AnnaRae Grabstein: 53:20

We can do hard things, people, and if you're listening to this, you know that cannabis is hard. There is nobody that is existing in cannabis today that thinks that it's easy. But we can do hard shit and we have to wake up every day with a resolute commitment to dive into the shit and to somehow dig our way out of it, because there is a future that is like what Andrew Livingston said last week that is affordable, accessible, with a great assortment for consumers. I believe that we're moving in that direction. It just there is some pain along the path Hell yeah, hell.

Ben Larson: 53:54

Yeah, annarie. Yeah, you're still bullish, right? Ben? Absolutely yeah. I mean, look, on the grand scheme of things, everything is up and to the right. It's just it gets a little volatile the closer that you that you zoom in. I I think what we have proven this year in particular is that people want cannabinoids. Cannabinoids still generally don't kill people. We're on the right trajectory. Everything is generally still up and to the right and the public sentiment that we have is that people want to fight for this, like we have people fighting for hemp, for cannabis. That we've never had in our corner before and after doing this for the last decade. It is. It is tangible, like how much momentum that we actually do have, despite any legislative headwinds that we're feeling in the current session and in the sessions ahead, all intents, and we are getting more access to more people every year that passes. So still very bullish.

AnnaRae Grabstein: 54:58

Stay strong. People Face the hardest things.

Ben Larson: 55:02

Yeah, to that end, it is important that, in some way or another, get involved with the federal movement, whether it's hemp or cannabis, both are constantly being deliberated at this point. There are very tactical ways to do it. Creating more voices in the room isn't necessarily the way Any of the existing organizations doing good work. On the Hill the ones that speak to you most get involved, contribute your dollars. The hill the ones that speak to you most get involved, contribute your dollars, contribute your support. And, yeah, let's get some serious change, clarity implemented at the federal level in the coming year.

AnnaRae Grabstein: 55:39

Amazing. So we hope you liked this episode and, if you did join the conversation, a bunch of people did comment during this live recording, so thank you to all of you. We pay attention, we listen and we will reply later.

Ben Larson: 55:55

Being that it's our 91st episode and there are a number of you watching, so please go and subscribe to our podcast. Like, share, review. Leave five stars. Please Help us get seen. Our listenership is growing every week, every month, and we just are thrilled with with the progress. I don't know what we're gonna do for 100th episode. It'll be big, it'll be the biggest, it'll be big and beautiful, so tune in. Thank you so much.

AnnaRae Grabstein: 56:23

Beautiful episode.

Ben Larson: 56:25

A big, beautiful BBE. We don't have enough reviews on Apple, though.

AnnaRae Grabstein: 56:28

Guys, we need more reviews on Apple, so please go on and give us a review. It would be really meaningful.

Ben Larson: 56:35

Absolutely. Thank you to our teams Evertosa and Wolfmeyer, Thank you to our producer, Eric Rossetti, and thank you for tuning in. Until next time, folks Remember, stay curious, stay informed and keep your spirits high. That's the show.