Elliot Lewis: 0:00

the same people that stole the fire aid money, or the same people stealing the cannabis money. So the management of the state is just really bad. The money that is going to the non-profits doesn't really get down to the causes that they claim to be for. But they have really nice fancy words that everybody likes and makes them feel virtuous to support these causes. But really it's just a bunch of grifting right a bunch of grifting right.

Ben Larson: 0:35

Hey everybody, welcome to episode 106 of High Spirits. I'm Ben Larson, I'm back and I'm with my co host as always, NRA Grabstein. We're recording Thursday, September 23, 2025. And boy, do we have a show for you today. We have the man, the myth, the legend, Elliot Lewis from Catalyst Cannabis, and we're going to dive into all things top of Elliot's mind, starting with California, of course. But before we get there, Anna Rae, thank you for letting me take another week off. I very much enjoyed the Mendocino Coast, the Redwoods. I needed that. It was a nice deep breath.

AnnaRae Grabstein: 1:12

Yeah, you feeling reborn from the ocean spirit.

Ben Larson: 1:15

Yeah, I kind of want to go back to it already. It's like you take, you know, as a CEO, you take a couple days off. It's really refreshing. You come back and it turns out that you have five days packed into three, and so it all evaporates quite quickly.

AnnaRae Grabstein: 1:30

Yeah, well, we're actually recording on the Jewish New Year, so Shana Tova to all the people that are celebrating.

Ben Larson: 1:37

Happy New Year.

AnnaRae Grabstein: 1:39

Yeah, Happy New Year. And you're just talking about being in nature and I was put a little thought over the weekend into kind of some intentions for the new year and where my head is that I would just want to have transformative experiences in nature as best as I can, kind of trying to balance it with all the other hectic things in life, because that's totally is what gets me grounded. I've been actually trying to put my feet on the physical dirt every single day.

Ben Larson: 2:05

Yeah Well, and you just acquired a new asset that will allow you to achieve that right.

AnnaRae Grabstein: 2:08

Yeah, I got a camper van and it's going to be a mobile podcast studio, but also for adventures and meeting with clients all over the place, so it will be super fun.

Ben Larson: 2:17

Is this gonna be one of those Instagram things? Do you have like a vision for it? Where are you gonna like remodel it?

AnnaRae Grabstein: 2:23

I'm not gonna like be a van lifer. I feel like there's a whole bunch of people doing that and you know, I'm somebody's mom and I own a business and I think that's that's a good place for me to land. But I'm gonna have lots of awesome adventures and hopefully make some good content for this show while in the sprinter van so you guys, hook up the star link and and, uh, surprise us with your next location.

AnnaRae Grabstein: 2:46

Totally. That sounds great. Well, let's jump into a quick news update and then we'll bring our guest on. Yesterday, Governor Newsom signed the tax rollback, which was a huge win for California cannabis operators, who have been fighting tooth and nail just to get the taxes back to where they were before they got raised Again. This is not good enough. We've talked about this a ton on the show, but it is a win. It's a win. That's not good enough. So we'll dive into this with Elliot more on that when we bring him on.

AnnaRae Grabstein: 3:20

But, yeah, California.

Ben Larson: 3:22

I guess small wins can take that there's. There's other bills sitting on the governor's desk. We'll see what they go through. But yeah, california, a Kentucky-based company, cornbread Hemp, has filed a federal lawsuit in Tennessee challenging House Bill 1376, which essentially is a bill that prevents direct-to-consumer shipping, and Cornbread is wagering that this stops interstate commerce and limits that. But I don't know, man, tennessee struggled to create access for cannabis but opened up the intoxicating hemp market and so people have access to it, and so it feels like this is a little greedy. I don't know. I don't want to cast too many stones to the cornbread hemp folks, but I never expected Tennessee to have cannabis, and in some ways they created it through their hemp program. It's an interesting play, it's like you know. Lawsuits have their place in business and politics, but I don't know how I feel about this one. What are your thoughts?

AnnaRae Grabstein: 4:32

Well, so Cornbread Hemp is one of the bigger hemp operators, and Tennessee is giving them a path to operate, and so they're just suing the state because it's not good enough. And I think that sometimes, when a business or a person or anyone wants to make a policy change going, the judicial route is the path. So whether or not you agree with Brett Hemp, it's their right to the government if they so choose.

Ben Larson: 4:58

I don't know if it is the path anymore, because governments, whether federal or state, have proven that you also have to play into favoritism a little bit and bringing them to the table. I mean, Sacramento has proven if they don't like you, they're not going to invite you into the room. I'm a little bit of a novice when it comes to dealing with politics. It seems like it might shut the door for further conversation and make them a little bit bitter towards the broader category.

AnnaRae Grabstein: 5:24

That's what I wonder is is if they should just be happy that Tennessee is letting them sell intoxicating hemp at all and that this just might be might be going a little, a little beyond, but I'm sure it's a calculation. They know how much they're selling direct to consumer and they want to try to maintain it. Look, I think people love to get products delivered to their homes, and I certainly envision a day where people have broad access to cannabis in many different ways, and so I don't know Good for them. This is their right. I hope that they don't dig themselves into a hole that creates unintended consequences for others that are trying to operate the right way.

Ben Larson: 6:07

It is interesting to see Kentucky residents suing Tennessee about THC. I mean, this is a world that I never expected to live in, totally.

AnnaRae Grabstein: 6:18

Totally Well shoot. I think that we should just bring on Elliot. He's going to have a lot to say about suing the government. Anyway, I'm going to cue it up.

Ben Larson: 6:26

Do it yeah.

AnnaRae Grabstein: 6:27

Today, we're joined by one of the most outspoken and polarizing voices in California cannabis Elliot Lewis. He's the CEO of Catalyst. Elliot has grown Catalyst into one of the state's largest retail chains, with over 25 stores, hundreds of employees, while also waging war on the government about taxes, corruption, unions, regulators. He's been called by different media publications the angriest weed CEO in California. But as he's been called that, he's also built a loyal following through his raw online videos and whiteboard breakdowns that strip the industry down to its numbers. From lawsuits with Glasshouse and fights against the state to pushing back on Prop 64 and trap shops, elliot has never been afraid to name names or take heat, so we're excited for an unfiltered conversation about California cannabis and what's broken, what might still be fixed and where Catalyst goes from here. Welcome, elliot.

Elliot Lewis: 7:29

Thanks so much for having me on you guys. I always appreciate some time to discuss the issues in California cannabis. I really appreciate being here.

Ben Larson: 7:37

Yeah, I mean, Elliot, I think you've gained so much traction because you are our inner monologues as fellow cannabis CEOs. You just say the shit. That really is top of mind for most of us. I think it's appreciated. I think the rawness is appreciated by the community. Thanks, I hope so Sometimes Not by everyone.

Elliot Lewis: 7:56

I think some people might take issue when they're on the receiving end. We do the best we can to just call balls and strikes how we see them try to leave the bias out of it.

AnnaRae Grabstein: 8:12

You know you're always going to have some business biases, but you know, do our best just to as much as we have a platform we think it is Well. So then let's just dive in. I want to know how do you reconcile being the guy who railed against the system but who now sits atop one of California's biggest legal cannabis businesses across the state one?

Elliot Lewis: 8:24

of California's biggest legal cannabis businesses across the state? Yeah, no, that's a good question. Look, two things. One, the size thing I'm very cognitive of and it's funny, you know people will say so owning a chain. And you're like, ooh, do I own a chain? And you're like, I guess that's what you would say it is. So you know, we always try to play small ball. I stay in really close contact with the customers, the bud tenders and all that kind of thing, and just the best we can try to build a community that the little things still matter. When we open a new store, do my best to try to interview every employee, even though they're going to get a job. Some people think it's silly, but I think it's some of the more important work. The little things are the big big things.

Elliot Lewis: 8:59

And then you know, look I think it's in hindsight what would we do if we knew what we knew in 2016? Would we get in bed with the government and, you know, basically turn ourselves into a glorified tax collector middleman for the state of California? You know, I've asked myself this a lot of times. I mean, at this point we're pot committed. You know we've already blazed the road the best we can and try to pioneer a legal cannabis industry. So you know I'm on team legal cannabis, but you know we do have a partner that you know we're not that fond of in particular.

Elliot Lewis: 9:32

You know, not only the federal government with the 280E tax that's, you know, not really equitable. The California state government and the way they run the cannabis program is just, I mean, it's painful to be a part of. And I've definitely had plenty of online comments that say like, bro, you should have known, got in bed with the government and it's kind of like, yeah, touche, I don't really have an argument against that. But you know, look, we try to come from an optimistic standpoint and work within the legal framework. That's the framework that everybody dreamed up. You know there's some genies out of the bottle, that you know I don't think. You know we're out of Pandora's box that I don't think you're ever getting put back in. But such is life. But the best we can we try to advocate within the, you know, legal cannabis space.

Ben Larson: 10:15

Let's talk about the foundation a little bit, because everyone's bias, so to speak, comes from their baseline perspective, and you talked about the onboarding of the legal marketplace. Let's talk about your legacy roots a little bit. What was your perspective coming into legalization? What did you expect legalization to look like, so that we can get an understanding of how far departed we are from what we're actually living through? Prop 16?

Elliot Lewis: 10:40

Well look you know my roots aren't as deep as some, but you know deeper than others. But you know, really, I was in Berkeley from 96 to 01. That's when 215 passed. So we did a lot of stuff and we, you know small stuff, you know like little three-legged rows and selling pounds and stuff. So when I was going to school just whatever all sorts of hustler shit you know was one of the first medical patients I think they could get a card. Back then there was only one doctor and it was 150 bucks and whatever. That was 1997 money. So I'd probably be like, I don't know, 400 bucks today, right? So, uh, now they're like 35 bucks. You can get them online. You had to know somebody to get a doctor. So that's kind of my first exposure. You know, nothing too crazy. I wouldn't call it a business. So you know.

Elliot Lewis: 11:21

Then there's a lot of history that happened in the 2000s, you know I just wasn't around for. And then, and like you know, 2012, 2013, some of my buddies that stayed in cannabis that you know I went to school with, you know, encouraged me to do an indoor grow. Uh, I was like, all right, we'll screw around with this. And then, you know, we started doing a few indoor grows down here. We got bigger, started growing up north. So, you know, we had like three ish, really the kind of 215 when we'll pass 2016, so three or five years in the in, like whatever you want to call it the gray market.

Elliot Lewis: 11:50

And then when the first licensing came to Long Beach my hometown, born and raised you know my antennas were up just enough to, you know, get into legal cannabis and really it just started out. I only just wanted to get the one store right. Right, you know, here we are today. Somehow the second largest retailer in the state wasn't really part of the plan, but you know, I definitely thought something that you know I've been passionate about since a young age, just cannabis in general.

Elliot Lewis: 12:14

But you know, we thought the business would be a little more lucrative and didn't see a lot of the things that have arisen over the years. And then, you know, I've always been a little skeptical of government, but having interfaced with them now for nine years in the most highly regulated industry on the planet, it's just super frustrating the way that they approach things. It's hard to figure out if they're more stupid or more greedy or more evil, but an evil is a strong word, I don't use it lightly, but I'm going to give them all three, and figuring out which one of the three is worse is very hard. Sometimes it just wants to make you bang your head into the wall.

AnnaRae Grabstein: 12:52

Well, it's clear that the government has not made it easy for cannabis to be successful in California, but it was a voter initiative Prop 64, that got us in this situation. Prop 64 promised legal storefronts and equity programs and tax revenue for everybody, but the industry. We kind of call it a bait and switch at this point and what really ended up happening was high taxes, local control, endless red tape. Was it fatally flawed from the beginning? Like did we realize that we were getting ourselves into this mess and like, what's the path forward here?

Elliot Lewis: 13:29

I'll say two things. You know one the biggest problem that I don't think we could ever put the tooth back in the toothpaste is the promise to everybody that was in cannabis when they passed it into the small humble farmers was there was going to be a one acre cap right. And so late at night in some meeting somewhere I imagine a smoke-filled uh you know room somebody got real clever and what they did. So the way that works, there's three different cultivation licenses. One is a one acre, the other one's a 10 000 square foot and whatever the other one says, 5 000. So what they did is you could only have one one acre license, but you could have unlimited tier two licenses. So there's guys with, you know, 550, 400 tier two licenses. So that really kind of wiped out the diversity within the marketplace created an oversupply which led to the burner distribution problem. By their own mathematics. You know, 90% of what's grown legally is getting backdoored in the state of California.

Elliot Lewis: 14:30

And then you know the tax question. I just don't think people really understood that if a few people got it right, right, but most people didn't understand that there would be local taxes piled onto the 15% you know, and so on and so forth and that more people would come under the regulated side. But at the end of the day, if you over-regulate something and you tax it 40%, the black market and the people that have been doing this for their entire life they're smarter, they're more clever, they're more gritty, they have more will. This is their livelihood. They're always going to find a way to get it to market. So you know, I think the Pandora's box thing with the unlimited canopy is a genie that can't put back in the bottle. You know we were talking about 564 on the way in here and how the government actually works, right? So when 564, which is the taxes back from 15 to 19, I don't think I'm breaking any confidence by saying these. But now you know, because we formed COCOA, which I'm really proud of, you know, a couple of guys got together, we got all the industry leaders in California and we're doing the best we can. We got seven figure money or six sorry, five figure money and we're up against, you know, seven and eight figure money, right? So like it's not really a fair fight. Why do they take money from us? Cause they can, right.

Elliot Lewis: 15:40

So that bill was supposed to be a rider originally, not be its own independent bill and get, get the tax freeze. And what ultimately happened? Mcguire, who is the head of a committee one guy right, wouldn't do the rider. And why wouldn't you do the rider? Because the SEIU gets 20 percent of the money, the environmentalists get 20 percent of the money, and then all these fake nonprofits, which are some of the biggest problems 80% of them formed the last three years. They get 60% of the money.

Elliot Lewis: 16:08

And so he's running for insurance commissioner and it never made the floor right. He was just supposed to add a writer. Everything looked good and he's actually been really friendly to the humble farmers and kind of been an advocate. But now he's got to run for office. What does he need? He needs money, and everybody thought we were on a glide path to keep it at 15 and he killed it Right, just so he could. You know and again, you can't have the specific conversation, but it's the way politics works just so we can raise money for his insurance commissioner race. I think we're going to like at least send a message to people like that. We're debating where the message needs to go. But you know, my opinion is these guys only kind of respond to fear so we might plan that election, and just, you know we can't be easily steamrolled.

Elliot Lewis: 16:51

Ultimately, the bill came back and it passed, but I have mixed feelings, like I'm glad it got back to 15. You know, ab8 looks like it's going to pass, which, by the way, in its original form, would have been the end of California cannabis. You know, as we know it shout out to our guy here who caught some of the language, because now we're finally in the rooms, you know, through our trade association, to read some of these bills. So we've been, you know, going back and forth with them. And then there's an internet bill that you know limits what you can do online. But that's just back to where we started. You know, basically three years ago, before anybody foresaw the 2018 farm loophole and, you know, nobody thought they would raise the tax. So we really just made it back to where we were and, yeah, you know they're solid wins. You know, I'm proud of the work that we did at Kakoa. There's a lot of people that worked really hard just to get it there.

Elliot Lewis: 17:37

So I don't want to undermine and downplay that, but like it's kind of sick and disgusting, and I read the headline somebody sent me, you know, whatever it was. You know california reduces cannabis tax because governor newsom wants to see, you know, a long-lasting, sustainable in you know, industry. Meanwhile, half the stuff I'm looking at, you know, as of this week, is all companies going out of business and in, you know, foreclosure and in receivership and yeah, the sales, the overall sales, are down. But the other thing you got to keep in mind if people are going out of business and just putting their companies through receivership, basically as a strategy, like there's a huge systemic problem and they just want to ignore it and not address it. But the problem is that the people that get the it's not a lot of money, it's like $600 million. That's earmarked money on a $300 billion budget.

Elliot Lewis: 18:26

But the problem is the forces, in particular the SEIU, but also those nonprofits. It's all the same nonprofits that steal from everything, whether it's homelessness, whether it's the fires in LA I'm actually working on putting something together for Spencer Pratt. The same people that stole the fire aid money are the same people stealing the cannabis money. So the management of the state is just really bad. The money that is going to the nonprofits doesn't really get down to the causes that they claim to be for, but they have really nice fancy words that everybody likes and makes them feel virtuous to support these causes, but really it's just a bunch of grifting right.

Elliot Lewis: 19:04

And take CCF, which is the same company that likely stole some of the fire money. They have a $1.6 billion balance sheet. They take in 560 million in revenue. Their CEO makes over 600,000, so on and so forth. They have all these huge salaries on there. They're supposed to be a nonprofit Nobody, and they're richer probably than every single retailer balance sheet wise in cannabis. Yet they got to get their you know little hat in the ring.

Elliot Lewis: 19:32

But again, they're just. Their move is then they donate to other in quote causes that actually have the profit to then donate back to the politicians. So the cannabis money is basically just a closed-loop system of money laundering that keeps the current power brokers in power and then the extra scraps their elites and their friends get to steal. That's the system that we're currently up against, which is probably not something legislatively or executive wise that we could defeat. We're going to give it our best effort. But to your point earlier of judicial challenges, you know when the executive and the legislature basically just don't care about you and they see you as a target right, which is how they their worldview. Once you understand their worldview is they're running this government like a business and they're trying to figure out how to steal as much money from you under the guise of virtue. Then it starts to make a lot more sense and that's basically what we've been up against for the last nine years.

Ben Larson: 20:36

LA. You're obviously incredibly informed with, just like, the inner workings of all of this and I know as I've become more informed, I get more enraged or more disgusted with how things work and with that comes anger directed at certain people or entities. Where does the buck stop, like is it appropriate? Or do you have feelings about the governor and his genuineness towards actually wanting to support the cannabis industry? And maybe I'm projecting a little bit? That's certainly where I have a fair amount of anger. I don't know if that's appropriate or fair. I do remember Governor Newsom in his gubernatorial race doing cannabis-oriented events and pulling in donations through those events and feeling that and how we just feel misrepresented, how we get taxed and feel misrepresented. And I'm just curious, you know, like, because of your visibility and all this, like, where do you land? Like, where do we need to demand better support from?

Elliot Lewis: 21:37

Yeah, I mean, look, my guess is, if the governor really had the political will to do it, he would do it. You know, I just don't think we're an important issue. I don't think they put that much mind on us. Again, we're just super small. No matter what the crisis is or the industry, they'll steal from it. We're just weak, so we're easy to steal from, so they steal from us. It's really just that simple. Look, you know what I think is probably the end game and how it gets fixed is. You know it's a sad statement on what it is. But yeah, of course, you know, kind of the initial thing is to get angry. You know, I think we were talking a little bit before I got on. I'm just kind of like, you know, getting ready to throw my hands up on it all and just whatever. Like you know, is it even changeable until, you know, probably probably the inevitable happens, which is big alcohol, whose alcohol sales are down big time 10 year over year. Right, so they need to get, I think they need to get the cannabis industry. That seems to be who's knocking a little bit, so nobody's going to move until federal legalization. But if that was to happen, then they have the kind of money they can move the political system. So it's really, really I think that the question and it sounds like an oversimplification it's just money. If we had $20 million sitting in a fund to run candidates and eliminate candidates and play in the races like the machine that controls California, then you know we would be a threat and then it would be in their political interest to align more with cannabis. But since we haven't played in any statewide elections yet, that might change. You know, who knows, we might make an example or two out of a few just to say, like, don't do that. But again, the power structure is so strong and the amount of money you really need to make a difference in California sadly, that's the American political system is a mind boggling amount. So we're in the early stages. It's really cool, you know, like I said, cocoa really proud that we formed it.

Elliot Lewis: 23:35

Just about every major retailer is in there. A lot of the brands are in there. Both major distributors are in there, so there's been like a piece that's come over the industry for the most part. You know where everybody's like hey, man, let's just all work together on this stuff. I think there's a lot of good business that's arising out of there as well.

Elliot Lewis: 23:51

You know, just trying to figure out how to, you know, optimize, you know, different functions that we have business-wise, and then it's our best, you know, chance to, you know, make some inroads with the state, uh, legislatively, but again, when it just takes, basically, you know McGuire running for insurance commissioner and needing a campaign contribution to derail something that is destroying people's lives, right, I mean, for me it's just hard to watch. Everybody obviously wants a raise. If you want to work in cannabis, you're going to be underpaid. I have to monitor the money. It's the thing that I load the most but all I see is money leaving that could go to people that I love and respect, that have been, you know, standing side by side with us.

Elliot Lewis: 24:32

I see an industry that's several hundred thousand jobs short in California of what it could be, and they just don't care because, at the end of the day, they're earmarked money for their nonprofits. Friends and the SEIU is more important than creating jobs and doing the right thing, what's moral and ethical. They just don't care. And again, it's 600 million on a $300 billion budget. Just to put that in perspective. They lost 20 billion. Lost it in homelessness. I'd be in jail, right, they built a train to nowhere. There's 16 billion into the train to nowhere. It was supposed to go from SF to LA. Now I think the latest route is Merced to Bakersfield or something which nobody would take, and they shut that down. The way they torch money is so disgusting, and to take this little tiny bit from cannabis that does so much destruction, it's just really hard to watch.

Elliot Lewis: 25:22

But again, I just think the entrenched forces, the more we bounce up against them, are just too strong and too powerful. And you know, at least on the tax issue, we've taken that, you know, to the judicial, which you know. Whatever, that's probably our, our fairest shake. But I think unless there's a ballot measure, a judicial challenge on something and or like a ballot measure, uh, which would be very hard and very expensive, I don't see a lot of change happening up there anytime soon. Uh, maybe very small incremental change, but I don't see any substantial change happening until real capital comes back into space. The other thing is all the capital left, california, for the most part right, so you're on your own as far as capital goes. California cannabis is generally considered uninvestable or you might splash a little bit, but you know, all the kind of bigger money that was in early is all out, and so the next wave of money will be even bigger money, which I'm guessing will be big.

Elliot Lewis: 26:19

Alcohol and tobacco Pharma probably does little niche drugs. Some people think pharma, but they're more into like collecting on the insurance and stuff. So like they probably develop some drugs. But then I think once that happens, sadly, and the pioneers are all bought out for pennies on the dollar, then we'll have lobbying powers. I mean, think of Southern wine and spirits, not calling them out, but like I don't know. I think they spent eight figures a year to keep their distribution monopoly in alcohol. Alcohol, right, they would never get pushed around like this. Why? Because they got the money.

Elliot Lewis: 26:51

So, and now you see the hemp guys, which is some interesting discussion, having more money than the cannabis guys. Go to chance looks like the fucking vatican city. Go to hall of flowers looks like a third world country, right. So, uh, you know, suckers, suckers. I've seen, you know again, not anything personal, but I'm looking over on the other side. I'm seeing people that failed illegal cannabis. You know that aren't overwhelmingly talented, just my objective assessment. They're crushing it now, right, uh, so there's this weird dichotomy going on now where where the hemp guys got all the money. So so you know they might end up winning the federal lobby lobbying war as well. They sure as hell look like they bought Rand Paul, which is all they really needed. So you know it's going to be interesting to kind of see it play itself out. But the hemp is not organized. They got fuck you money, money that cannabis don't have, and you know how that plays out at the Fed will be interesting.

AnnaRae Grabstein: 27:43

Well, so I want to let Ben ask you the question about hemp, but before we do that and we can get to it right after this I think that some context like you're talking about the big guys, you talked about alcohol and tobacco, but you also called out that you're the second biggest retailer in the state and it wouldn't take much for you to become the biggest retailer in the state, and so, like I want to know what your vision is, what, what are you wanting to build with California for Catalyst? What about multi-state expansion? Like how? How do you see, how do you see the levers that are in front of you and what is the level of ambition that you are taking to the future of Catalyst?

Elliot Lewis: 28:26

Honestly, I don't even know. It's so day to day. At one point I thought, man, I'm going to do this till the wheels fall off and weed for the people while they're me. Let's get California and let's move east. But there's a thing called reality that's starting to set in. And when you say the second largest company, that's true today. My guess is alcohol is going to get eight or ten of us and that's it. It's going to be like Coke and Pepsi. That's kind of what I think is going to happen. They'll have to buy the culture so people from within the culture might stick around, even if someday we monetize Cadillacs, which is not necessarily what I want to do. You have to be realistic and we have shareholders and the whole thing. You know that might keep me on for a few years as a trained monkey, but I think the future, it seems, post federal legalization, that real money is going to come in, swoop us up and try to, you know, structurally fix it. I wish that wasn't the case. You know I'm always open to something that happens in the interim.

Elliot Lewis: 29:31

You know, trying to predict this space over, you know more than a. You know, six month, one year curve is impossible. Nobody saw the 2018 farm bill coming. You know loophole coming. Nobody saw burner distributions coming. Nobody thought metric didn't work at all, right, you know. So on and so forth.

Elliot Lewis: 29:48

So it's super hard to predict the future. You know it's super day-to-day with me. You know some things like I want to go out there and start moving it east and tackle the world. And then other times I'm like, bro, just let's. You know we've slowed down a lot. It's the first time ever we've had shovels down. We might build one out later this year, but you know we always had projects going right. So to have shovels down for six months since we've been doing this, it's just hard to justify building another brick and mortar in California. Right, it's like why would we do that? You know, if there's distressed assets that we can get on the cheap, you know we're looking at really more of those now. And then we do want to eventually expand east, where it's a little bit easier ground. But again, it's just at some point Insanity is doing the same thing over and over again, as they say, and expecting different results. I kind of feel like we're getting to that point in California and I wish I had a little more optimistic viewpoint today on it, but I mean when I think it's. Four out of the top 10 companies are in receivership or they, you know, had to merge within the last six months. Those are retailers. All three of the top deliveries have busted out. The the second largest distributor has busted out, like so on and so forth.

Elliot Lewis: 30:59

Like this is like what are we even talking about? So this idea that somehow the state is giving you know any fucks about cannabis is just a joke. And like you could show it to them on a platter, like I'm litigating with them on this DCC issue and I'm just trying to get a crumb, like I know it would just be a pure victory. I'm just trying to get a crumb. They won't give us a crumb, so it's, it's and they just don't care. Right, and that's the thing you realize. Like they just don't care and it's uh, you know it's a little disheartening and and you know the the sadness turns to anger and a little bit of fight.

Elliot Lewis: 31:33

But then at some point I just kind of been in this weird reflective place over the last month or so which is like is this just a delusion? Like just fucking bend over, take it, survive and hand it off. Like that seems like the fucking way that this thing is gonna go right. I mean the fact that we're begging to get back to the status quo on the taxes again. I'm proud of all the work we did. I'm not trying to downplay. A lot of people did a lot of work on it. I'm super grateful for all that, but objectively it's kind of pathetic.

Ben Larson: 32:05

Yeah, yeah, look, I mean I, I I've been a licensed cannabis operator for the last seven years in California. I've been in the industry for 10 years. I have a lot of empathy as a, as a business owner, and so I understand what it takes to survive in this, in this industry. I'm also in the unique perspective of, you know, being an ingredient company and working on now both sides of the fence of hemp and cannabis and I know the California conversations deeply entrenched. You know regulated cannabis any threat from the outside makes it that much harder.

Ben Larson: 32:43

But I am curious from your lens of like. You know weed for the people, right? You know my North Star has always been get people access to cannabis, get people out of jail like normalize, and I have the privilege of trying to skate to the where the puck is going and seeing the convergence of hemp and cannabis and NRA and I have talked about this in the past. What is your perspective on the broader, with a broader lens of like, how hemp and cannabis works together to create greater access? You know, across the nation.

Elliot Lewis: 33:19

Yeah, I mean, look, I I probably am a States rights guy on this and you know I'm, I'm, I'm painfully biased here in California just because of you know what we set up, right, I mean hemp. We'll just call it what it is. It's a euphemism for untaxed weed, so we can just have an honest conversation about it, right? Um, which, again, I think it's. It's been really useful in some states that don't have access. Getting it as access, getting it as access. But, look, we've done a lot of hemp testing, you know, primarily on the vapes, 70, 80% dirty, right. So you know, if they're going to do a hemp market, it needs to be regulated. You know, my position would be, and you know, maybe this is biased by business, but if the state itself has a cannabis program, that seems to be the way to do it right. Or if you're just going to open it up, like, why are you taxing some weed and not taxing other weed? Right? So there's just like a doctrine of fairness, like, oh, like I've even said, like well, I'll just turn my can, I can, I just turn my stores into hemp stores and like get away from the regulation. So like it's an ideology, of course, like you know, let's do it. You know I'm not a big fan of government regulation, but you know the hemp is, for now, a little bit of a dumping ground for the dirty cannabis. Remember, 90 percent of it gets back door. If you know your connection and you know I don't want to paint with a broad brush you know it's probably fine. The flower is not, as you know, dirty, as the is the babes. But you know we're like 70 percent dirty on the babes, that that that we tested on the, uh, the hemp side. So you know, you know I'd say it's a state's rights thing. Uh, you know, it's kind of a sad state of affairs that, like people that in theory should be from the same camp, the weed guys and the hemp guys are, you know, kind of battling it out. You know, look, here in California we're in legal cannabis, so to allow untaxed you know weed sales, my position would be like, okay, then give us untaxed weed sales. I know I can out-compete these guys, right, but like you know, giving somebody a 40% advantage to selling untaxed weed and calling it hemp is a little frustrating from where I'm sitting. But don't get me wrong. Like you know, I'm not trying to hate on the hustle or the access.

Elliot Lewis: 35:23

We're looking at hemp out of state. There's like 10 or 11 states that are still allowing it. It's all in flux. We'll see what Texas does Sounds like a little news from Kentucky was actually new news For me. I know that's one of the states that's on there that we've looked at a little bit.

Elliot Lewis: 35:43

In short, I'd say, look, it's a, it's a state's right issue. Uh, you know, if there's legal cannabis in the state, it seems like that's a more fair framework to work through. I'll be the first one to admit my views are probably biased by the fact that I'm in a legal cannabis. But you know again, if, if you're going to tax weed, then you know, and I don't like the tactic of anything, but then you know, and I don't like the tax to give anything, then you have to tax on tax weed. Right, and you know, guys can call it hemp all they want, but 100 of what we tested has failed the hemp qualifications. And of course they like hang their hat on the d-carb thing but like nobody's under 0.3 thc with a legit test. It's very rare. Uh, if you, unless you test early, or you know, you know, manipulate it or whatever and it doesn't say anywhere. You know how you have to test it.

Elliot Lewis: 36:30

So you know, look, and I've operated under plenty of, you know, impulse loopholes in my, in my life. So you know I appreciate the hustle, you know I I think to your point. It's been great getting access and all these states. But how far do you want to take it now? We got gas, gas station sticks. You know I didn't go to chance but I understand. As these guys are now selling like at one point it was kind of like the freedom we're not going to sign up with the government. I think it's getting a little darker. You know they're selling all sorts of like fake Oxycontin and all sorts of weird shit, shit that looks like cocaine and that's not what I'm trying to be about. So, uh, you know it's an interesting conversation. You know, again, if it's a road, let me let me click on something on this, then.

AnnaRae Grabstein: 37:12

So you know you're, you're a retailer in california and so it makes sense that you are protecting your business like full stop.

AnnaRae Grabstein: 37:20

I totally get it. Let's let's think about a state where um not outside of californ, where you're not operating.

AnnaRae Grabstein: 37:26

I think one of the really interesting things that I've witnessed with hemp is that, because it's been appearing in all these different retail channels that aren't dispensaries, like grocery stores or bodegas on the corner, that there's been a different consumer that's been getting access to cannabis that we haven't been able to bring into the dispensaries in California.

AnnaRae Grabstein: 37:49

Like, I think back to when the legal market was starting, there were all these startup brands that wanted to make products for soccer moms and yoga ladies and, like, ultimately, like a lot of those products just like didn't stick in the legal market because the soccer moms didn't come to dispensaries, and it's been kind of cool for me to see that actually, like in other channels, there are different consumers that aren't touched by the dispensaries right now and I'm wondering, like, how you see that like, within a regulated cannabis market like california, we aren't serving all the customers, we aren't capturing all the people that want cannabis, be it the soccer moms or the people that are at trap shops. So what? What's broken about the dispensary model that um is making it so that all the consumers aren't aren't coming there? Aside from taxes and pricing, which could you could reason for trap?

Elliot Lewis: 38:47

Well, I mean, I think, I think taxes is the main issue. Look, we might get in half out of state. So, like you know, again, if it's going on in other states, you know, we would just bring our ethos, which is, you know, we wouldn't sell anything that wasn't, you know, full panel, tested and safe. And you know, know, I actually think that that might be a good approach to have a. It's the right thing to do. Like you know, in fact, some of the most important work we're doing is is probably, you know, we, you know, cleaned up our shelf. You know, almost entirely, you know, I think, right, we hope, or at least 99 level where it wasn't there before, right, so this is super important you're talking about. I feel like we kind of had our tobacco moment and we'll see if we can work our way out of it. Where, you know, we will look back 20 years and be like, wow, we were sure stupid, we didn't have pymetrazine, which is Endeavor on the, you know, testing schedule, and you know people were huffing stuff. That's a felony to imply. You know, on scale, in California, like I don't really buy the access issue, you know, again, to each their own opinion. It's just my opinion, you know the soccer mom, the reason those brands didn't work? They're just lighter consumers. Right, they do consume, and we love the soccer mom and we love grandma and we love everybody. Bring them all in, but they just consume a little bit less. You know, I would go out on a limb and say that a soccer mom is probably more comfortable walking into a dispensary than walking in to like a half sketchy looking smoke shop. You know, selling some untested hemp. That's just my. You know I could be wrong, but I'm just thinking that that's, you know, the kind of the reality of it. You know, as far as out of state goes, you know you are bringing access, no doubt to places that haven't had access, but those places have always had some form of access. It's just getting more affordable now because of you know, basically, it's all california and oklahoma weed is is. We're generalizing, but that's what it is grown legally, by the way, sold his hemp. Uh, I mean, when you really think about how this happened, it's uh, you know it's an interesting mind fuck. But like. But, like I said, we're looking at it in other states to get in. You know, it does seem like it's been a good vehicle for access.

Elliot Lewis: 40:52

There is a lot of good actors in the space that we don't have issue with, but if hemp wants to have a future, I think they need to look a little closer at self-regulating. You know kind of what they're doing, because you know there's no doubt that it is a dumping ground for dirty product. And you know as well as that I've seen some other weird shit making an appearance that you know, all sorts of weird synthetics and other stuff that you know seems to go against the principles of what we were trying to do here with legalization. Now, guys are whatever, th, you know, delta 10, delta 8, you know cbh, o, o, th, o, o, these fucking different compounds, they're not safe. The conversion of, uh, actual hemp leaders into cannabis, uh, you know, the science is, you know, debatable. On that some people think it's also, you know, not safe.

Elliot Lewis: 41:42

So again, my thing is if we're going to do it, let's just do it. They'll put everything above board and you know not get into this game of like, you know, I mean just to do it. You kind of have to game the test out. I guess there's no, you know, prohibition against that and because of the D carb you get yourself plausible uh, deniability. But you know, look, I can get into the argument that it's definitely brought access to other states. I just think California, like, if you want access, you have access. The only thing I would say is, if you want 40% off and you're willing to gamble on you know something that's probably not as well tested or vetted and you're on a budget, then kind of what it is. But like there's a million ways to get weed and you know, uh, you know california. But I'll push back a little bit on this idea that I think the soccer mom feels more comfortable in a legal cannabis store, uh, than anywhere else.

Elliot Lewis: 42:34

My take is the soccer mom only brands didn't work just because they're, you know, lighter consumers that the youngsters and I'm talking you know like 34 and under you know they're really the more heavy consumers. Again, we, we market to everybody, try to get them all, but you know that's really the the fat of the bat in the industry, working class. You know 34 and under, really 44 and under. You know I'm out of, you know I'm half out of the demo. Even me. I smoke weed every night. It still takes me a while to get through a vape, like whatever. If I get through one or two a month. That's a lot for me. So there's some guys smoking three or four vapes a week and I think that's the consumer that a lot of the dispensaries are relying on. So if you're only relying on the soccer mom, I think the reason those brands failed is not because the soccer mom is all of a sudden getting access some other way. Mom is all of a sudden, you know, getting access some other way to have.

Elliot Lewis: 43:27

I will say there's probably one carve out, which was when the edibles and the drinks were at the grocery store.

Elliot Lewis: 43:32

Uh, I kind of put those in their own, you know, category cause they're digestible, they're probably not as dangerous and those are more for the catacurious, or whatever you want to call it, and you could kind of, you know, bring them in.

Elliot Lewis: 43:44

So there was a time, you know, in California, not that long ago, where they had chocolates and, you know, gummies and drinks right there at the grocery store. California looks like it's going to be full ban. If I had a bet, because the alcohol boys are already in there, basically taking it over after doing zero pioneering, as the world would have it, I think most of the other 49 states are never going to get rid of beverages and most of the anti-hemp laws will go towards smoking. And then, funny enough, once alcohol has a foothold in drinks, they will also be on team ban the rest of hemp. That's just how this thing works. But it looks like I think alcohol is going to keep the drinks in almost every state, and you'll see those. You know, I think California is going to kill them. Uh, that's what it looks like right now. Uh, but I think in those states you're going to see drinks that are, you know, five, ten milligrams or whatever, here to stay for, you know, indefinitely.

Ben Larson: 44:37

Those aren't going away yeah, yeah, look, I totally agree with you on the quality needs and we do. We do a lot of self-policing on that. Everything that we learned in the Regulate Cannabis place we've taken to at least what we sell. We have a very targeted network that we sell that into. Right. It's like beverages, some gummies, at the federal level. The people I work with also agree. It's like we need to have this level of safety enforcement. We need to allow states to decide what's right for themselves. Like we need to have this level of safety enforcement. We need to allow states to decide what's right for themselves and we need to protect that, because I mean, that's american right, one of the other.

Elliot Lewis: 45:12

But as soon as you start regulating up in a real way? Let me just ask you this question as soon as you start regulating heaven in a real way, do you think the outlaws just call them the outlaws are an outlaw culture is coming along?

Ben Larson: 45:24

no, I I mean champs turns into something else, right, like you mentioned. Like that, that always exists. There's always going to be an underground that we're going to perpetually fight. You can't stop demand and you can't stop supply. That's why countries like portugal moved to a like let's try to regulate it.

Elliot Lewis: 45:40

I think that probably failed and let me ask you the next question then. So let's say, let's say you, let's say you regulate hemp right and you actually now have to go to a real lab to get a test right and there's testing standards that basically test it after it's cured because that's when it should be tested and none of it qualifies for hemp. What happens then?

Ben Larson: 46:02

yeah, I think it's. It's. It's a great question. I think people are trying to, in parallel, get qualifications for what is hemp. You know, there's the total thc conversation that isn't in stone. There's the the source argument. You know, was it hemp at one point? Uh, is is like the other, like legal argument that is being done and what is actually being put in.

Elliot Lewis: 46:27

So the ultimate end game in your mind of hemp is to be able to sell untaxed weed against people that are selling tax free. Just so I understand your argument.

Ben Larson: 46:34

No, I don't think that is the argument. I think the argument is like how do we do something that's fair and leverage this national supply chain that has been set up? Like we've understood that low dose beverages in particular that's the bulk of our business is creating access points, safe access points. You know, these are tested products that have clean product. There's no residuals in them, People aren't smoking them, obviously and it's creating new on ramps for for consumers, and so it's creating opportunities where it's like are there ways to manipulate the frameworks that we have in place today to get us to a better end that has more access to people, more normalization of a product?

AnnaRae Grabstein: 47:18

It seems like nobody is arguing for like within this context. It seems like, really, what we're all arguing for is access broadly, and that there is not access in a lot of places, and hemp is is filling a void in in a lot, a lot of states that don't have any legal access.

Ben Larson: 47:36

And then, ben, what you're talking about is beverages, filling a different niche that is separate than what ellie, yeah and I'm I'm very clear I only advocate, I really on the hemp side, like I really only advocated for the beverage category, and that really pisses some people off on the hemp side. Right, they, they want me to go full bore advocating for one plant. You know, it's like I don't know if I can go that far, because I did come up through the, the regulated california system, and I do understand both sides of the argument, but I guess the question is okay.

Elliot Lewis: 48:10

So you know, and I hear hemp folks say, oh, we want to regulate. Okay, so if you wanted to regulate then we would get rid of the word hemp, Right, but we were also sold a really bad bill of goods with cannabis and like you know, we talked to Aaron Smith the other week.

Ben Larson: 48:28

He's like this is not what we meant when we said we wanted to legalize. It's a bad bill of goods.

Elliot Lewis: 48:33

So then hemp gets to write their own rules or the government's going to write them, and then the outlaws are just going to stay outlawed and find another way to get to the consumer. I mean, I've heard the hemp guys say, hey, we're ready for the regulation, but as soon as that happens and there's any taxes that need to be paid, right, then you're going to lose 90% of the industry. That's my opinion, right. Maybe there's 10% good actors. It's mostly and it's not that they're bad people, but I'm just saying people willing to be good actors. So what you're really advocating for, in my opinion, is untaxed cannabis, which is fine. But if we're going to have an honest dialogue about what we're advocating for and again, I'm open minded to like, hey, let's advocate for untaxed cannabis, but, like you, don't get to manipulate a definition that was accidental in the farm bill, right, and then manipulate the testing and then have an honest discussion about, in quotes, hemp, anytime somebody says hemp, just substitute in the word for hemp as untaxed cannabis, where we don't have to deal with all the government bullshit, and then we could have an honest debate about what hemp is. But hemp is not hemp. Hemp is untaxed cannabis.

Elliot Lewis: 49:45

The amount of actual industrial hemp is being sold as hemp is less than 1%, right? So let's just start there. I get the beverages, you divide by the amount of liquid and you get there that way, right? But that is Delta nine, fully carved, put into a thing, distillate, that would go through a process and violate, you know, all definitions of what you know any reasonable person thought hemp would be. Now it's real clever.

Elliot Lewis: 50:13

They picked up on this THCA thing, you know pre-decarb, but in order for it to be classified as hemp, you have to cheat or manipulate, since there's no clear standards on the test. If the hemp market came out and said, well, I'll tell you what we'll do, we'll make sure that the testing happens after the product is cured and we will anything that has been turned into Delta 9, we'll classify that all as cannabis, then you wouldn't have anything to advocate for. So what you're asking, what you're really advocating for through hemp, if we're having an honest conversation, is not look, we're probably going to end up doing a little bit out of state, but what you're advocating is for unregulated or less regulated or currently unregulated, untaxed weed.

Ben Larson: 51:00

I mean, let's just be honest with the people with the most resources to fight things either direction are the ones who are skirting the laws the most and it puts the rest of us, be it, you know, entrenched in regulated cannabis or those of us in the middle that are trying to straddle both lanes, like it's hard to outshine or out influence those that have just a ton of resources. So these broad brush strokes that that are defining, you know hemp, so to speak, is being represented by a few with just deeper pockets than than the rest of us that are willing to shoulder taxation, fair taxation, represented taxation, but just broader access to the plant, because the regulated markets haven't delivered on it.

Elliot Lewis: 52:08

The taxation that hemp would lobby for in California, I would hope, would be substantially less than the taxation on cannabis. So then, what you're really arguing for is a subset of cannabis businesses to be taxed at a lower rate than other subset of cannabis businesses. That's what you're arguing for in essence, correct.

Ben Larson: 52:26

We had a conversation with cannabis operators where we were willing to cede and have tax parity with a pathway of lowering it for both sides. When it comes to the California conversation, well, in California.

AnnaRae Grabstein: 52:38

if they put it on parity, the hemp guys would lose, lowering it for both sides when it comes to the california conversation well in california, if, if, if they put it on parody, the hemp guys would lose in california.

Elliot Lewis: 52:45

If you put it on parody, not all but like, generally not in the beverage category, because we know, low-dose beverages don't sell in those shops.

Ben Larson: 52:52

We can, to your point the the low-dose consumer consumes a lot less products and it just doesn't make economic sense to stack. Like you know, you can go to headset. The top 100 beverages or the top 10 beverages sold in dispensaries are 100 milligram products. The quote unquote soccer moms are not gravitating towards those products, they are going to total wine and picking up four packs of five milligram drinks, and so that's the big disparity that we see and that's the opportunity we see to create access and normalization of THC in general.

Elliot Lewis: 53:25

But again, at its root you want a different tax structure.

Ben Larson: 53:32

I'm not saying anything about taxes. I'm talking about access. We can include taxes.

Elliot Lewis: 53:37

When the hemp guys say we want to be regulated right and again I'm open to the dialogue and to me it's sad that we can't get all on the same page. But let's just have an honest conversation. You don't want to be regulated like they regulate cannabis. You want to be able to sell cannabis in a different subset of regulations that are much more favorable than they. Leave these other guys over here I think everyone should want that.

Ben Larson: 54:00

Yeah, I I do. I do think everyone should want that.

Elliot Lewis: 54:04

I think everyone should be want to be out from underneath the thumb of prop 64 and the bullshit that is sacramento you're going to lose 95 of the 95 of the hemp market as soon as it gets regulated, just because they don't want to be regulated. And of the the 5% that stays, very few of them will succeed because they can't beat the people that have lasted this long.

Ben Larson: 54:24

I'm actually okay with that, because at least then we don't have to have the hemp versus cannabis conversation anymore.

Elliot Lewis: 54:31

It's weed versus untaxed weed. Let's just be again. If we're not purposeful with our language, then like hemp is a made up thing, let's just start with that premise. Like it's a made up thing. We're not talking about the Mayflowers sales, those were hemp. We're not talking about covered wagons, those are hemp. Actually interesting history Even the oil used for the wheels, those are hemp. Right, that's hemp. We're not talking about that. We're talking about the very cannabis that gets grown legally. In the track and trace system and metric, we have discovered that even red states love fucking weed. I agree with you. Like my point is is that I'll tell you what it's. It's shown that and, of course, like every like, the weed is fairly non-partisan at this point. It's like 70 some odd percent approval, uh, which is why I hope they do?

Ben Larson: 55:36

we don't even have 70 access in california, and that's the bullshit that we've, we've been forced to to swallow we don't have 70 access.

Elliot Lewis: 55:44

No, like like other, than from counties in california that have accepted it 95 of people are within like 30 minutes driving distance of a uh, a dispensary. If bakersfield came on, I think that would be every then bakersfield's like the last big cannabis desert there isn't a dispensary. If you live in California, you're 20 minutes from a dispensary, maybe outside you know you live way out there you're 30, 40 minutes. But the access argument, I agree, local control is an issue. But again, you want to talk about political powers and why local control exists. The League of Cities is the one of the most powerful political powers in the state. They're never, never going to get rid of local control. The other states did. It is a top down. Look, we agree. I just again, I'm just trying to have it like a, just call it untaxed weed and we could fucking talk about it.

Ben Larson: 56:32

It is currently. It is currently untaxed weed, with the exception of whatever your normal retail taxes are.

Elliot Lewis: 56:37

The hemp guys won't say that, right, which is like, again, when your whole entire premise and I'm not like above the hustle or above even getting involved in, in quotes, hemp, but when your entire premise is based on, hey, we test the plant, when it's like it's seven weeks and we manipulate the testing and then we call it something that it's not, like it's very hard to regulate, uh, that that situation, right, it's a mistake made by mcconnell who didn't understand what thca you know was. And even in spite of that mistake, right, you're, you're, you're you're still not at a low enough level that it pencils out it would be anything but untaxed cannabis. But you know, turning to the red states, I think it's been a great way where, like the genie's out of the bottle there. Take Texas, we'll see what they do. You know that thing was political. They were trying to make Abbott veto that because they thought it would be unpopular.

Elliot Lewis: 57:35

So I think what's going to happen in texas because of the hemp debate, by the way, texas has surpassed california. It is now a, uh, larger market than california. Their hemp market is larger than our cannabis market, which, you know, is kind of hilarious in itself. But what happened? Because of hemp, texas wouldn't even be having the conversation, they had this super limited gummy only, whatever weird medical program. I'm not super familiar with it, but I have bombed through Texas looking at the hemp thing, and so now what's happened is they're going to expand the cannabis program, right, and eventually stomp out hemp, I think. But they couldn't do that had hemp not got there in the first place. So there's no doubt that it's been, you know, an amazing trailblazing experiment.

AnnaRae Grabstein: 58:21

Well, and that's what Texas hemp has shown. Like what could California cannabis could have been if Prop 64 wasn't so broken? And I think you've been like very clear throughout this discussion about all the different ways that the laws in California are broken, and so I think it's just a challenging debate as it comes to hemp in California, because the cannabis operators are screwed, they're stuck in this system that doesn't work for anybody, and so trying to put anything new into that is pretty irreconcilable overall. But what we know is that the full opportunity is not realized because of the bad laws, whether it be in health or cannabis all of it Like there's, there's more, there's more, there's more out there that is not coming through dispensaries.

Elliot Lewis: 59:09

Yeah, that's, that's the black, that's the black market argument, though, too Right. I mean, to me it's basically just a black market argument, which is, like you know, which is fine, right, but it's just a black market argument. Hemp's just a black market, that's all it is Right. So, and again, like you know, I'm sure Ben runs his company very responsibly and he's, he's on the drinks, but like that's not going to be the majority of the uh, of who's in hemp and in so much as I've heard a hemp person ask to be regulated, the two things I've never heard him say is we want to actually be tested the same way cannabis is tested, but whoops, there goes your whole supply chain and we want to be taxed at an equal level to cannabis. Those are two things you'll never say. What you're really saying is we want a license to be outlaws, right, and not pay any tax, which, honestly, what hemp has shown is how powerful the free market is and how the hemp guys now have all the dough and they're all fucking working on 70% margins, having a good old time, and we're just middlemanning for the government, which just shows you, if they took hands off everything, it would be great, but if they even that playing field, this idea that the hemp guys who the vast majority of them and I'm not saying Ben, that I know of have failed in cannabis and they've reinvented themselves in hemp. So if the playing field was equal and they've already failed in cannabis and they had to take their ball and go home because they couldn't make it, how would they succeed without a 40 tax advantage and all the heavy regulation? And the majority of that market has always been black market, forever guys, which god bless them, those guys will always exist, but they just were like oh, now I can call it hemp has some plausible deniability. I got a fucking friendly lab. I'll test that shit with the fucking stems and the roots and the soil. Oh look, it's under 0.3. But we all know it's coming in around one percent once it's cured and it's not something that is hemp, right. So again, define the regulation. And if you even the playing field, hemp wouldn't even be a thing. Just like if you did a tax holiday, black market weed and hemp would barely even be a thing, right. If California did full tax holiday right, we don't pay any taxes to anybody. The soccer mom would come to us, right, everybody would come to us. You know there'd be, instead of 30 percent legal market, probably go 20, 25 percent black market. There always be a niche for the inclusive. There'll always be a niche for that.

Elliot Lewis: 1:01:25

But I've never heard the hemp guys yet say that we want to be regulated at parity with the cannabis guys. What they're basically saying is we want to sell the same products but we don't like the current regulations and because we didn't jump in on the cannabis side, or because we failed on the cannabis side, now we want to call it hemp and not and be able to do whatever the hell we want. Fuck, I wish I could call my shit hemp and I ever have to deal with the government either and make 70, 80 percent margins. It sounds like fun. Shift to people's front doors, have a fulfillment center like yeah, we're about to get into that shit in some other states.

Elliot Lewis: 1:01:58

I'm just saying that we have to be honest about what it is and what is the debate really right? You can't even get the premise of hemp to hemp. If you put in testing that was properly done after the product was cured, you would have nothing to sell, right, like that's just what it is. And then on top of that, but you're essentially asking the states is. We know all these people went through this complicated and look, we're suckers for doing it. Like I think that's a fair argument. Like why did you get in bed with the government?

Elliot Lewis: 1:02:27

But, now the hemp guys are saying, oh, we really want to get in bed with the government. We're not really saying is we want to get into the bed with the government the same way that you guys are. We want to have all these other freedoms that you, that the cannabis guys don't have, right, and we want to sell the same product. So it's like that's the argument. You can make the argument, but if we're being honest about what the argument is, there's no doubt that's the argument, which is we sell weed, it's not hemp. We want to be taxed differently, we want to be regulated differently and if we were forced to test the same way cannabis was forced to test, we'd have nothing to sell look, I I, if you if you, I'm all ears look, I I agree with a lot what you say.

Ben Larson: 1:03:08

I could probably argue certain aspects till the cows come home, I'm not going to. I really appreciate, uh, the conversation, ell, elliot, and, like I said, I have a lot of empathy for anyone that has operated through Prop 64 and, frankly, has survived and in some ways thrived, and you've built a great brand and I feel like we didn't give you adequate space and time to really just promote the brand.

Elliot Lewis: 1:03:36

It doesn't matter. I'll say this If we could call it all hemp, I'd be on board for that. Call it all hemp, get the government out of our.

Ben Larson: 1:03:45

I'm down with weed for the people man.

Elliot Lewis: 1:03:49

No tax, nobody. Let's all get to work right. But what would happen is again they would have guys that go away pretty fast. They need a 40% pricing advantage to even have a have a you know, a chance and help to compete, not to mention all the two gram products and stuff that you know we can't sell. But we'll leave that one be, and just you know. Again, like I said, I don't rule out that we're getting into it in the red states. You know where we're hoping to avoid the kind of regulation that we get here. But ultimately that is, you know, hemp in quotes. Untaxed weed is just freedom Weed is really what it what it is. You're asking for freedom Weed Right, which is again, the government is never going to allow for freedom Weed to be taxed differently than their current existing cannabis programs. It's always going to have to be like this two 15 loophole niche vibe to exist in the current state it's in. As soon as they start bringing in the regulation, the whole thing falls apart because there is no heck. It's like there's no heck.

Ben Larson: 1:04:55

We can uh, we can joint venture on your eventual uh weed launch and call it Freedom Weed.

AnnaRae Grabstein: 1:05:01

Sounds great. I love it, elliot. You know we have so many things that we could have touched on, and I'm glad that we had what seemed like a debate, but I think that there's really more that we agree on than than that we disagree and ultimately, we have to move to our last call, which is when we turn the mic back to you for one last final message for our listeners Advice, call to action, a closing thought to leave the audience with. So, elliot, what is your last call?

Elliot Lewis: 1:05:28

My last thought get married, have babies, be of service, love God. That's my last thought.

Ben Larson: 1:05:35

Fucking love it. Oh man, Elliot, this has been amazing. I really do appreciate the open conversation. I always appreciate the rawness and what you bring to the community and thank you for always speaking your mind and being a strong voice for the space.

Elliot Lewis: 1:05:51

No, I appreciate you guys. Lively discussion, I agree, we're more in agreement than than not. But you know, just trying to, but just trying to flush out the broad swaths from which I've heard the freedom weed arguments come from.

Ben Larson: 1:06:06

You got it.

AnnaRae Grabstein: 1:06:07

Thanks, buddy.

Ben Larson: 1:06:10

All right, elliot Lewis from Catalyst Cannabis Not as volatile as I thought it might have been.

AnnaRae Grabstein: 1:06:16

Yeah, totally Super well overall.

Ben Larson: 1:06:19

What do you think, folks? Thank you for engaging and watching and doing all the things. Man, I feel so lucky to have conversations like this. It gets my day off on the right, but thank you to our teams at Virtosa and Wolfmeyer and, of course, our producer, eric Rossetti. If you've enjoyed this episode, please like, subscribe, share, do all the things. Definitely subscribe to us on Apple Podcasts or Spotify or wherever you listen to your podcasts. As always, folks stay curious, stay informed and keep your spirits high Until next time. That's the show.