SPEAKER_02: 0:00

Hey guys, it's Ben. I recently read a letter uh live at the inaugural Ignited Market Spotlight in Anaheim, California. An ode to California. You may have been there to witness it yourself or have seen the post on LinkedIn. But in case you haven't, we've included a recording at the very end of this week's episode for those that have requested it. So stick around if you'd like to hear it. Don't if you don't. And with that, on with the show. Recording Tuesday, October 10th, 2025. And we have a cannabis business news roundup for you today. It's just me and Anna Ray. Me calling in from Durham, North Carolina. And Anna Ray, I presume you're still at home.

SPEAKER_00: 1:01

I am at my home studio, but not for long. I'm uh flying to Southern California this afternoon to go to the Ignite Market Spotlight tomorrow.

SPEAKER_02: 1:11

That's right. Rendezvous in Anaheim. So if you're if you're gonna be there, come find us.

SPEAKER_00: 1:17

Absolutely. We've been so busy lately. It's it's always hard to do these news roundups because it's extra work for us. When we have a guest on and do an interview, it's can be all about them. But for the news roundup, we have to make sure that we're paying attention, thinking about things, deciding what we want to talk about.

SPEAKER_02: 1:34

News outside our own little bubble of our own worlds.

SPEAKER_00: 1:39

Yes, not breaching the confidentiality of our actual work that pays us, aside from showing up here for all of you guys. But yeah, last night I had the opportunity to try my 2025 backyard harvest. Um, my my flower was finally dry enough that we cut down a couple weeks ago. And uh it was great, very uplifting. And uh I just decided to start texting you, thinking about how I was unprepared for this recording and all the things that I wanted to think about. And then it started to feel like it was an opportunity to write a poem. My my head was spinning, I was thinking about emojis and and and beautiful formatting. I I was wondering, did you pick up on it when you were receiving my late night messages?

SPEAKER_02: 2:28

I did not, but it was of different, it was of a different kind of uh voice, and now it makes a lot more sense. It's funny, I actually think about this a lot with my business partner, uh Dr. Harold Hahn, and he definitely has his ideas in the evenings, and I can always tell. Uh, so I'm gonna be on the lookout now for you as well.

SPEAKER_00: 2:50

Nice ideas, I love that. That's not a term I knew about, and of course Harold has them. Harold, if you want to message me your ideas, I also am curious.

SPEAKER_02: 3:02

That's that is great. I am uh I was not doing that. I I am in North Carolina right now, I was visiting my friends uh open book extracts. So Dave Noondorfer, Oz Hackett. Uh, they've been at it for a long while now uh in the hemp space, and hemp space has evolved a lot, as we often talk about in on this show. And so it's interesting to hear their perspective, uh, how their business has shifted over the years, and uh yeah, just hear how things are going in North Carolina. You know, it brings up a lot of interesting thoughts when I think about just the cannabis business in general, because they've built this 75,000 square foot facility that they have here in in North Carolina, and it's you know, licensed to the Hilt, NSF, ISO, you know, GMP, all this kind of stuff. And it's just like that is the opportunity with larger scale. You know, we deal so much with these state-by-state supply chains in the regulated markets, and it's really hard to build these big, sophisticated platforms. And I think trying to bring the opportunity of these two different marketplaces a little bit closer together, it's like, how do we get the the best of both sides?

SPEAKER_00: 4:10

Yeah, Dave was uh one of our early guests when we first talked about. Oh, that's right. So I think that he had just done um a raise and brought in some pretty big institutional investors that we highlighted with him. And it's cool that you're out there seeing that. And 75,000 square feet of manufacturing, yeah, there's there's very few businesses in the regulated cannabis marketplace that would be appropriately sized at that footprint.

SPEAKER_02: 4:39

Yeah, unfortunately, I think anyone that has built for that sort of size in the space, probably with the hopes of seeing interstate commerce uh in their lifetime, have literally gone out of business or just struggling, right? We uh obviously with beverage manufacturing facilities, you know, it's a lot of capex to get up to scale to produce the high quality. And so that's why we've seen so many beverage companies flood to the hemp space, is just because consistent quality products at a reasonable price that it requires that level of scale. But you know, we saw similar things with SkyMint in Michigan, uh, when they basically were building out an old stadium. Sounded like a great idea. You know, it could produce high quality products at scale, but if you don't have the market to address, then it's all for naught.

SPEAKER_00: 5:22

Yep. Forefront did the same thing in California. Yep, it's happened a few different times in the regulated space. Well, I hope Open Book is able to figure out how to utilize all that manufacturing space.

SPEAKER_02: 5:33

It's being utilized, yeah. But yeah, come find out for yourselves. It's it's uh it's a lovely team. And in actually this time of year, North Carolina is very nice. No humidity, perfect weather. Uh, it's been a nice little visit.

SPEAKER_00: 5:45

Awesome. I love the fall. It's such a such a cool season. So I I do have on a personal level, I have a question about what you think about high school reunions and if you've gone to them.

SPEAKER_02: 5:58

I have not gone to them. Uh, you know, probably because I went to high school in Utah. I don't know. I was it was kind of a transient time in my life. Like I showed up as a sophomore in high school and I knew I was leaving the state as soon as I graduated high school. I made friends and everything, but I don't know. I just don't have this desire to go back and talk about my adventures and weed.

SPEAKER_00: 6:18

So I and I asked because I just got an invitation to my 25-year high school reunion that is happening in San Francisco, right? San Francisco, yeah, in in December of this year. And it's funny because the 20-year reunion was during COVID and they canceled it. It didn't happen. And my 15-year reunion, which was the one before that, I did this crazy thing where I went a day late and I showed up to the reunion, I got all dolled up, I was excited to see all these people that I hadn't seen in years. And I got to the event space and I'm like looking around and I'm like, where is the party? Where, where is the high school reunion? And I went up to somebody that worked there. It was like a restaurant and bar, and I was like, Where's where's the reunion? And they're like, Oh, I'm so sorry, ma'am. That was yesterday. And I completely messed it up and fully missed the high school reunion. So now it's 10 years after that's happened. And I'm like, Do I want to go to the high school reunion? Is that is that a thing that people do? Do you bring your husband? Do you there's a like like I just don't know. I don't know what the protocol is for this type of thing. So I'm curious if people out there have advice or lessons learned, should you go or should you not to your high school reunion? I am I am on the fence at this point.

SPEAKER_02: 7:35

I mean, if you feel a draw for it, do it and just do whatever you feel. I I just don't think there's a right answer. I just have no emotional tie to high school. I mean, it'd be interesting to go back and see if I recognize anyone, but I'm notoriously bad at recognizing people. And sorry if you've witnessed that. I mean, do you hang out with people from high school? Do you know not really?

SPEAKER_00: 7:56

I do know people from high school. Shout out to Randall Lee from Bridge Bank. He went to high school. Yeah.

SPEAKER_02: 8:03

Randall's awesome. Yeah, he didn't go to high school with him.

SPEAKER_00: 8:08

And um, there are other notable figures in in cannabis that have gone to my high school or yeah, I don't know. I guess I'll I'll report back. But if listeners out there have any have any ideas or suggestions for me, I'm very open.

SPEAKER_02: 8:22

Amazing. Well, get get Randall to go with you.

SPEAKER_00: 8:25

I think he was maybe the class behind me, but I'll check. I'm not sure. Yeah.

SPEAKER_02: 8:29

All right. Well, should we jump into some news?

SPEAKER_00: 8:31

Sure. Yeah, we can jump into some news. Where do you want to get started?

SPEAKER_02: 8:34

Well, let's just start with the general state of affairs. Uh the federal government is shut down. As we mentioned last week, there was this video that Trump had posted about CBD and Schedule Three and the Farm Bill. Not much context has been added since then, just a lot of pontificating. But it's kind of interesting with everything kind of stalled out from a discussion standpoint, from a regulating standpoint, until we get out of this, out of this shutdown.

SPEAKER_00: 8:59

Yeah, so there's there's just this pause. Nothing is gonna happen. Yeah, you're right. We were excited last week of like, holy shit, the president's talking about the endocannabinoid system. That's a big deal. Maybe there might be policy progress.

SPEAKER_02: 9:13

Uh well, and and even Trump, Trump keeps like signaling that, oh, interesting news is gonna come out. I'm like, can interesting news come out when there's a shutdown? I guess he's the one person that could. And so maybe he starts unilaterally acting. But I don't know politics well enough to understand what he can and can't do. I don't think he really cares. I think he just does.

SPEAKER_00: 9:33

And from the perspective of of cannabis and and hemp and policy change, I think that we're just stuck in this sort of emulsion of the federal government. And so the federal government is all shut down, which means that all policy, be it the industry that we're focused on or anything else, is is stuck and is sitting without change. So our our main policy concerns are on pause, but so is everything else.

SPEAKER_02: 10:03

And those main policy concerns being the appropriations bill, the farm bill, largely focused on hemp. And what people are pushing for right now is a clean continuing resolution, which would essentially bring the legislature back and give them essentially a month, maybe a month and a week, to get this all figured out, which we'd be right back, probably where we are, uh, at threat of the government shutting down again.

SPEAKER_00: 10:29

Yeah. This this has been an interesting shutdown process because I think that broadly there has been a perspective that the Democrats have been fairly un-aggressive with the Republicans and have gotten rolled over in a lot of ways over the past 18 months, which is what landed Trump in in the presidency. And um, this shutdown, along with a lot of very proactive trolling from Governor Newsome, seem is seemingly ushering in possibly a new chapter of of the Democrats pushing back on the Republicans. Yeah, possibly not gonna matter as long as the Republicans hold hold both houses and seemingly control the judiciary, but there is elections coming midterms, and and this I think is the Democrats trying to get some energy behind them, or at least to show that they have some type of cojones going into these elections.

SPEAKER_02: 11:33

We'll see. Just one last thing about like kind of the government shutdown. I I know a lot of people feel like just nothing's happening, but if you're active on the hill, if you're involved in organizations, this is the time where the the lobbyists actually really earn their keep because the Congress people are not allowed to take meetings on the Hill, um, but they sure as hell are having conversations with the people that they know and trust. And so interesting to think about you know what conversations are happening behind the scenes as we somewhat approach uh an end to the shutdown, an ambiguous end, and and how we will emerge with that with folks that are are more educated on you know the topics of of choice. And so it'll be interesting to see what kind of uh momentum certain efforts have when the legislature does eventually come back.

SPEAKER_00: 12:24

It's it's a great call out, and I hope I hope that our lobbyists are representing our voice in a really strong and proactive way right now. Some of them. Um okay, we'll set up the right ones, right? Uh depending on the side jury. The best ones. Um let's let's talk about Michigan. Um, oh Michigan. You know, Michigan has been an interesting cannabis market to follow for quite some time. There was there was a a race to the bottom in price in in Michigan, but also Michigan has been outselling California on a per capita basis as it relates to cannabis consumption. So there has been really like a roller coaster of emotions and of opportunity and challenges when it comes to Michigan. But Michigan this week passed a 24% new tax, wholesale tax, which they're saying is designed to bridge budget gaps and fund infrastructure. It's part of a broader budget deal in Michigan because the state is really facing some pretty significant fiscal shortfalls and is even looking at potentially the federal government having to step in and bail it out because of being so tight on funds. The tax is projected to generate$420 million annually. Is that a joke? Like what type of economist like decided that it was going to be$420 million? Uh wow.

SPEAKER_02: 13:55

They just reverse engineered it. They're like, we need to end up at$420 million. How much tax do we have to layer on top of the industry to achieve that?

SPEAKER_00: 14:02

Yeah, it just seems like a joke. Uh yeah, thank you. They probably did reverse engineer that.

SPEAKER_02: 14:07

It's it is a joke. It's a joke that this is happening in every legal quote unquote market. It's just this perpetual like holding down of an industry. Like you're you're shoving your hands in people's pockets and just pulling out wads of cash, like before you even have viable marketplaces, before they're even able to stabilize. Like, can we not hire economists like at the state capitals? And all of them, all of them, Minnesota, California, Michigan, like New York, it's it just goes on and on, and it's it's just really tiring. I I 24%'s an absurd tax. And why why does the cannabis industry have to show shoulder infrastructure uh improvements in a state? And I'll acknowledge I I I read the cannabis headline, so this is an atrocity to me. But is someone living in Michigan? Like, is this happening across the board to other businesses, or are we just getting picked on because it's easy pick-ins?

SPEAKER_00: 15:04

Yeah, it's it's such a good call out, and especially like we were just talking about the federal government. The narrative from the federal government is all about creating American industry again. And and cannabis is that. This is like the new great American industry, fully manufactured, cultivated, distributed, and sold all in America by Americans. And this feels as as punitive as the tariffs that we are talking about putting on countries that are bringing products into the US. When what we're trying to do is incentivize these businesses to succeed. And it occurs to me that really what this is is just going to bolster illegal sellers in Michigan who don't have to pay taxes and are going to be able to deliver products to consumers for a lot cheaper than the regulated market. The state already is is saying that this will likely decrease the overall unit sales in the regulated market in Michigan, um, I think by something like 10 to 14% or something. But that that's just that's not acceptable. That that's not okay. I I don't know how they can justify this. So and not.

SPEAKER_02: 16:16

I don't know. I I I I keep wondering, you know, what is the point of the Cannabis Regulators Association? Like these regulators meet and talk and have a venue, and are they just not aware of how negatively like these things impact the actual marketplace? And I I I can't help but think that it's it's deliberate. I feel like they're trading notes on how to hold these markets down and and and how to basically make them fail. Like, I I I don't want to be a conspiracy theorist, but it's just like I've been to these camera meetings. I we've talked to Gillian, we've had her on the show, like people are talking, but they just keep making the wrong moves in every state. Yeah, and so it's like the entire like I don't know if it's job security, the more regulations, the more they have jobs, but it's like you're not gonna have jobs if they all fail. Like in this is happening in California, like people are celebrating the wins uh in in Sacramento, but it's like companies are still going into receivership every day, like big companies. Where does it end? I I don't think it ends in a viable marketplace. All right, so Gary Kaminsky, who was a guest a while back as well, left this comment earlier. It says Canra does not make law, they administer and enforce. We need to educate lawmakers. And I'm gonna put an asterisk next to that and say that I used to say that as well, but anyone doing business in California knows how much the DCC in particular pushes their opinion and agenda on lawmakers. And I know Canera themselves do not quote unquote lobby the legislature, uh, but their constituents, their their members certainly are. And so I have a lot of feelings. I think I've mentioned this on the show before about regulators and their ability to use their voice uh with the legislature. I just think there's a conflict of interest there. I know they don't technically write the laws, but they certainly do have a lot of influence over them.

SPEAKER_00: 18:32

Well, so with taxes on tobacco and cigarettes, they were always designed transparently to be punitive to consumers in hopes to drive consumers away from consuming these dangerous products.

SPEAKER_01: 18:45

Right.

SPEAKER_00: 18:45

And it's starting to look like the amount of taxes that is being levied on legal cannabis is punitive also. But the message is not that this is an unsafe or harmful product. And so why are we creating punitive taxes onto consumers and to businesses? It's just it's not aligned with the broader understanding that cannabis does have medical benefits, that is a better alternative than cigarettes or alcohol. Uh, we want to be encouraging people to do healthier things and also encouraging these great American businesses to be able to actually succeed and scale with some level of stability. And this isn't it.

SPEAKER_02: 19:25

It's all broken. I don't I don't know. No, thank you. You know, we're a a rich country in the grand scheme of things, but like the the decisions we make don't serve the citizens, like the the the quality of our food supply, the medicine, and and how the cannabis industry is being treated, it is not in service of the people.

SPEAKER_00: 19:46

Well, in service of the shareholders, let's move to our next story.

SPEAKER_02: 19:51

All right, come on, let's pick it up. Let's pick it up.

SPEAKER_00: 19:54

So um potentially some good news for some people for shareholders of of Vireo and potentially shareholders of of some debt of Schwaz. Schwazly trading Schwaz Schwazi. Is it Schwaz or Schwazi? I'm gonna say Schwaz. You can say Schwazi. I don't know. Uh Vireo is acquiring Schwoaz's debt, which is about$82 million of debt on the face value that they're paying$62 million in stock for. And they are basically creating a complex pathway to owning 86% of the company. This was reported in depth by Mark Hauser and his cannabis musing Substack. And Mark calls this out as a highly sophisticated restructuring play that signals increasing financial mature maturity in the cannabis sector. And while it's complicated, it's also fascinating because conventional restructuring being applied in our space is actually an example of how we are maturing as an industry and how distressed assets can become stabilized in a way that signals long-term health of the industry for those that come out on the other side. And Vireo has has really taken a strategic approach to this roll-up strategy. They've been largely rolling up single state operators. And uh Schwaz, Schwazi is almost a single state operator, but they're a dual state operator operating in Colorado and New Mexico. So now Vireo is in more markets than they were in before with strong assets in an acquisition path that I think really benefits the shareholders of Vireo because they're not even paying cash for this debt. It's all in stock. I think that that this is this is something that we're going to continue to see, but it also shows just the level of kind of financial engineering that's going on at some of these top publicly traded companies in our space.

SPEAKER_02: 21:56

Yeah, it's interesting. I'm I'm curious about your perspective about, you know, it's it's creative and sophisticated restructuring, but does it put them into a stronger advantage when we're talking about how they align with other MSOs in the space? And then just the eventuality of the potential success of this business. We just got done talking about the challenges that the regulated markets are feeling like all around the US. Are these MSOs becoming more viable over time, or is something still going to have to fundamentally change to make them viable? And are they at some point going to have to be threading a needle to stay viable in whatever that that new ultimate destination is?

SPEAKER_00: 22:39

So, so much about what has created a situation where they might be considered unviable as debt. And that's, you know, there was there was equity that came into cannabis early on, but then the next chapter of capital came in the form of debt and often senior secured debt, with debtors holding incredible power over these companies. And it really became servicing the debt that created such stress on the companies, on their day-to-day and on their ability to continually operate. So deals like this that create a pathway for restructuring the debt into equity and making it so that the company can free up its cash flow to not have to service debt in the same way, I think does actually create a pathway for more long-term viability. It's the debt, it's not necessarily the business as a standalone entity. And I don't know much about the Colorado and New Mexico operations of Schwaz, but I do know that the folks at Virio are really focused on the companies that they target being independently sustainable on an operational level, and that those companies can support themselves and that are profitable. But being profitable does not necessarily mean that you have enough cash to service your debt. Right. Those are different things. And so when a company has too much debt and it becomes unserviceable, even if they're profitable on a standalone basis, they might be in a situation where they are no longer a going concern without some major shifts to the way that their balance sheet is organized. So that that's what I do think is is the long tail that getting out of debt and transitioning some of that debt to equity could could create a more stable pathway here for sure.

SPEAKER_02: 24:26

Yeah. Yeah. Really interesting. There's a non-cannabis related story I kind of want to chat about. And that is Mana Beverages closing its bottling plant in Sacramento after acquiring the legacy California business in in 2024. So Mana Beverages abruptly shuttered its West Sacramento bottling plant and ended all California operations, telling workers it was exiting the state entirely. That's 400 employees. Um this comes amid broader weaknesses in the alcohol and beverage sector as consumers shift toward moderation and non-alcoholic alternatives. I said it was not cannabis related, but you can probably already tell where the thread is in my mind. Yeah, I think there's a number of different things that we can talk about here. We can talk about what it's like doing business in California. Uh, I have thoughts about that. We can also talk about how California has recently passed and signed AB 8, uh Assembly Bill 8, which essentially turns uh hemp anything above 0.3% at any point in the supply chain, which is different than the definition being applied across the US. It's now being called cannabis in California. And so essentially putting everything into the regulated system in California and blocking out the opportunity for manufacturers like this participating in the national uh hemp beverage opportunity, uh, like is what's happening in in many other states. It's kind of sad. It's a it's it's sad to see the beverage industry in general struggling the way it is and then being blocked out from accessing opportunities in in hemp and cannabis.

SPEAKER_00: 26:05

Yeah, this is an example of an asset that's been around for a long time with a lot of people who both work there and have jobs, but also production capacity. That as alcohol sales are declining, that capacity could have been used for something else, like like how beverage production. And and as a result of the policy change that recently happened uh with AB8, that that's not an option for this infrastructure. And and these factories that do bottling and beverage manufacturing, it isn't a it is a multi-million dollar investment to build to build this type of equipment. And and it's part of the reason why I think hemp beverage companies are so invested in an interstate commerce model is that the infrastructure is so complex, takes up so much space, and and it already exists in many places around the country already with existing beverage supply chains. So to be able to utilize infrastructure to expand opportunity where other categories are declining just makes sense uh from a basic level. And and this is an example of for whatever reason, uh Mana Beverages decided that California was no longer for them and what was going on in their business was untenable and it wasn't worth expanding, and they couldn't expand into this category at least.

SPEAKER_02: 27:28

Well, yeah, in California we know, especially even in Sacramento, right? Like the the cost of just doing business is infinitely more expensive than than in other places. So it probably lasted here longer than than maybe even it should have. But to your point, like these are facilities that could cost anywhere between 20 to 100 million dollars, depending on their scale. And that kind of capex just can't be covered in in the the regulated cannabis space responsibly, and and and we're seeing a lot of those struggles. And you know, obviously, I I've been hyper focused on on the beverage category for for a while now. And we're in this place where the the regulated cannabis market generally ignores the beverage category. And and we see this in legislation, we see this in rules like AB8, where it's so focused on the dispensary marketplace, and the consideration is taken out about that we can actually produce these high-quality products like at scale if we're relegated to the state-by-state markets. And and this is the catch 22, right? We always want higher qual, we talk about this all the time. We talk about this as a benefit in the dis in the regulated channels, is like quality product, consumer safety. It's like when you go into a interstate commerce design facility that has scale, like you see what quality really could look like. And so we're caught in this place where it's like, you know, we're talking about the national marketplace being not where you go to find like quality products, but in fact, it's the only thing that can actually support it.

SPEAKER_00: 29:01

It's it's a great point because I think about the evolution of the team structure that I've seen in the regulated cannabis markets, and that um early on, as the markets were launching, we had a lot of compliance and quality people that worked in-house in in regulated cannabis companies. And over time, as the markets matured, a lot of those roles just couldn't be financially supported anymore. And as a result of companies needing to build infrastructure in multiple states, you just you can't have a quality manager in in every single place and a compliance manager. And and so your point is well taken in that scale provides the opportunity for certain levels of expertise to have a place in the broader structure. And and scaled beverage is certainly an example of being able to do scaled manufacturing in one place, means that there can be investment and consistency in a different way than if you're having to set it up. Over and over and over in 50 different markets.

SPEAKER_02: 30:03

Yeah.

SPEAKER_00: 30:04

Well, I'm I'm really sorry for these folks um in West Sacramento that lost their jobs. And it's just it's no good. California is a very challenging place to run a business. And just it keeps coming back to that over and over again.

SPEAKER_02: 30:21

Yeah. I have a little bit to say about this. I'll save it for tomorrow when we're in Anaheim. But yeah, doing business in California, which is, you know, we love to tout that we're the fourth largest economy in the world. Uh, we are the home of a lot of innovation. Uh Silicon Valley, an important one. But and and then there's just cannabis, and and we've often be been identified as the largest contiguous cannabis market in the world. And I just I just don't see how we're investing in in either of them right now, uh be it innovation or or cannabis. And it's really unfortunate.

SPEAKER_00: 30:55

All right. Well, looking at some more business news, cultivated this morning covered that LeafLink, which is the largest wholesale marketplace for cannabis, regulated cannabis, just adjusted its pricing model after a backlash that moved them from a monthly flat fee to a structure that took a percentage of transactions. And there was a huge uprising of their customers. And uh people said that their change in their business model would result in price hikes of up to 700% for some of their customers. And very quickly, a lot of other tech platforms entered the conversation who thought that they would never be able to compete with the broad market penetration that LeafLink already had and started offering competitive products. So really interesting moment to see how when a company changes a business model, it actually creates this opening for others to enter. And instead, what did they do? They just announced that they are rolling back their decision and going back to a flat fee model.

SPEAKER_02: 32:05

All right.

SPEAKER_00: 32:05

Well, what's the lesson here?

SPEAKER_02: 32:08

A number of lessons. Uh so we call this FAFO, right? F-A-F-O. Um, but no, I mean, the the main point that I pull away from this, uh, and I'm gonna give credit to one of our board members, Menno, um, who has been an advisor to me over the years. And she always she's famous for always saying, like, do things for your customers, don't do it to them. And I think this was just one of those examples of they made a business decision, rolled it out, and people probably found out via like a mass email that they're that their payment structure is changing. And if there's anything that we've learned in the cannabis industry, is people very sensitive to price. Uh, it's like top of mind for for it's this probably true across all business, but definitely in the cannabis industry where cash is super tight. It's just don't do things to your customers, like do things in service of them and and and just think it out. Like, I do wonder about the the move to just roll it back and and change it back to flat fee. Like, is that going to be sustainable, or they're are they putting themselves into a tough position to eventually have to change it again? But I don't know the the full workings, like maybe, maybe it's a more sustainable structure. I'm sure there's a bunch of thought went into it. I believe it's a new CEO. Is that right?

SPEAKER_00: 33:25

Yeah, it's a new CEO who's been been with the company about three months, and I think he came in after the the change in the Yeah, maybe we'll have him on and see what he has to say. It it brings up for me this this concept too about market leadership and how confident we can be in always being the market leader, compared to needing to look at that as a position that that could be lost and that we need to hold on to because Leaflink really has been the market leader in this space for for a while. And I wonder if they just had a little bit more confidence that that that was a sticky position for them, but that maybe it wasn't quite as sticky as they thought.

SPEAKER_02: 34:10

Yeah, I I I feel not I'm trying not to be holier than thou, but like it's just a such a foreign concept for me, right? It's like I've long subscribed to the idea that it's like only the paranoids survive. And so just constantly looking over your shoulder and constantly believing that someone's gonna be looking for a better service at for cheaper. Clearly, it was a misstep. I think that was very obvious within the first week, and hopefully the the new CEO got his his arms wrapped around it. Um, pricing is not easy in this space.

SPEAKER_00: 34:43

That's very, very true. Yeah. Well, that is our last news story. Is there anything else you want to share before we wrap for today?

SPEAKER_02: 34:50

No, I'm really excited about uh Anaheim and the Ignite uh conference. Uh, this is a market spotlight for California. Elliot Lane and and uh Patrick Lane, Javier, uh Hesse, they've teamed up after running the Benzinga events and are now relaunching it under the Ignite platform. And so excited to support that. I know there's a whole number of them rolling out. I I've also believed that I'll be attending the DC one in in just a few weeks. And I think there was a couple more that that are scheduled as well.

SPEAKER_00: 35:22

So yeah, I think we're doing two more before Thanksgiving after the California one, DC and something in the northeast, maybe like New Jersey, New York. I'm not sure. Much love to those guys. It's it's those have been great conferences for a lot of people over the years, and we'll we'll see if people show up like they did and follow them on this new path.

SPEAKER_02: 35:42

But you and I both are, so yeah, and that's that's a that's just one group out of many that are having events right now. October, I don't know. October just feels insanely busy. I don't know if it's coming off of the summer months and it's just the whiplash, but travel for for conferences on top of starting planning for for 2026. You know, we're we're going through our operating plan planning and and really trying to identify who we want to be next year and what we're going to achieve. And and I think doing that while still trying to achieve our our 2025 plan, it's just feels really intense right now. So if you're also feeling this, you're not alone.

SPEAKER_00: 36:17

And if you're not feeling it, then you're doing something wrong.

SPEAKER_02: 36:20

Ooh, yeah, tell us more about that.

SPEAKER_00: 36:23

I mean, I think that it is planning season. So while it might be conference season for some, it's also planning season. And so for those that are doing it and that are feeling the pressure of trying to close out the year strong, but also set intentions for 2026, it's good. You should you should be doing it. And if you're not planning for 2026 right now, then WTF, what are you doing? Uh well, okay.

SPEAKER_02: 36:50

So so uh I will now that we're pretty far into the year and it's been a relatively good year for us, um, I will admit that we did get started in October last year with our operating plan, but because of the intensity and the pressures of that Q4, we didn't actually ratify it or launch it until the end of Q1. We might have gotten started, but things definitely got delayed. And I I felt very very bad about that as we were getting our way through Q1. And so the goal this year is to actually deliver it in December so that we can hit the ground running come Jan 1. And maybe that in of itself is is also what we're feeling. It's like this this pressure because we we didn't deliver when we wanted to last year, and so now we're doing the extra effort to make sure that we get it carried through um before the new year starts.

SPEAKER_00: 37:42

Self-imposed deadlines are super important, and so it's great. It's like it's okay that you didn't finish it last year, but you're gonna do better this year. And you've you've dropped a pin on the board. A little help from my friends, it's yeah, with a little help from your friends, um, for sure. So good stuff, everybody. Do you have a last call for us, Ben?

SPEAKER_02: 38:02

Oh, I don't think so. I I think just come find us wherever we are in the world, be it Anaheim, Anna Ray, and I will both be there, DC, uh, with the next Ignitic conference, and then a bunch of beverage things coming up for me. We have NBWA in Vegas, which is the beer wholesalers. There's a lot happening there. Who knows what else? So come find us, come say hi. And I think we're getting ready to book new guests on the show. So if you have anyone you want to hear from, if you have anyone that might be an expert on a topic that we'd like to dive into, please uh shoot us a recommendation, make a connection, and and we'll get them on the show. But besides that, Anna Ray, I'm excited to see you in just a few hours as I depart from the East Coast.

SPEAKER_00: 38:46

Awesome, for sure. Yeah, we'll we'll share a nightcap in the hotel lobby.

SPEAKER_02: 38:50

What about you? Uh any any final calls for you?

SPEAKER_00: 38:53

Yeah, I think the same thing. Just just let's let's keep the community vibes rolling. I've I feel like through these challenging news cycles and struggles in business, the relationships that I have in this community and the people that reach out to me and tell me their wins or or bring me into their struggles just keep me moving. And I'm really appreciative for that every day. And uh I've I wake up ready for the challenges that I just can't even anticipate. And uh it's exciting and invigorating, and I'm I'm not giving that off. So sticking with it here for everybody.

SPEAKER_02: 39:27

Amazing. All right, folks. Thank you, Gary. Thank you, everyone else, for engaging and leaving comments during the show, and for liking and subscribing and sharing uh the recordings everywhere you listen to the podcast. Thank you to our friends and our family and our coworkers at Virtosa and Wolfmeyer, and of course our producer Eric Rossetti. If you've enjoyed this podcast, please drop a review in Apple Podcast, in Spotify, wherever you listen. Subscribe, share, do all the things like I asked. And as always, folks, stay curious, stay informed, and most importantly, keep your spirits high. Until next time, that's the show. California. What the hell? The fourth largest economy in the world, the birthplace of Silicon Valley, and avoiders of the innovators' dilemma. Once the largest, most promising cannabis market in the world, a state that built its identity on innovation, risk taking, and rebellion, is now chasing its entrepreneurs and innovators out of state, including this one right here. I was gonna read you the letter I recently wrote to Governor Newsom, but I figured I'd do us all a favor and tailor it to this audience. If anyone does want to hear the original, I have it right here. But this is what I think we all need to hear. We've become defenders of the status quo, a state, an industry, more interested in protecting profits and bureaucracy than building the future. And I say that as someone who loves the state dearly. Born in the Bay, raised in Sacramento, schooled in San Luis Obispo, raising my family in Wanna Creek, and now building and scaling what is my third business in Berkeley. But I've had enough. I've seen a lot of celebrating online lately from Kakoa, from licensed operators about AB 564, AB eight, SB 378. Look, I know a lot of work went into these efforts from good, well-intentioned people, but I'm left wondering, what exactly are we celebrating? AB 564 was lauded as avoiding an existential threat. But hasn't that threat existed all along? Doesn't it still exist? If losing four percent of margin was truly a death knell, then wasn't the game already lost? Most operators were already in trouble with CDTFA, or justifying not paying at all. Fighting just to maintain the status quo isn't victory. It should make you mad as hell. And AB eight. Really? We're demonizing any detectable level of THC in hemp derived products, banning full spectrum CBD from drugstores, tolerating a three-year DCC onboarding period, shoving everything into a dying, overregulated marketplace that doesn't value low-dose therapeutic products, and pretending it's about saving the kids? Nah. It's about competition. It's about protectionism. And it's perpetuating a stigma of the one plant we all claim to love and represent. You're telling me we don't understand this plant well enough to write nuanced language that preserves access where it should exist? But if the answer is to permanently shove everything into a broken system and isolating ourselves from the outside world, then what exactly are we protecting? Certainly not our future. Because this is not legalization. This is not what we fought for when we said legalize it. This is not the will of the voter like so many like to claim. And for the record, access is not a 30-minute drive to a dispensary in an industrial zone. You want to know what legal looks like? Legal is what we're building in the TAC beverage category. Legal is economies of scale, centralized manufacturing, interstate commerce, real quality assurance, national distribution, and access to capital. High dose products in dispensaries with low-dose products on liquor store shelves or perhaps behind a drugstore counter. And look, I know hemp is far from perfect. There's much work to do. But it wasn't long ago we felt the same way about regulating cannabis. Perhaps we still do. Legal is walking into a supermarket and adding THC to your basket next to your beer, Zen, or cold medicine. It's ordering one at a restaurant, knowing it's regulated, tested, and safe. It's partnering with manufacturers who hold CGMP, ISO, and organic certifications. It's truckloads heading to supermarkets, not partial pallets destined for inadequate shelf space. That's what legal looks like. That's what's happening across the country. And California, once a leader, is falling far behind. So when you celebrate, make sure you're celebrating a step toward that vision. Because California, this isn't it. Preserving the status quo year after year is just a slow death. Allowing our representatives to misrepresent us, letting our regulators speak louder than our operators, that's not progress. That's surrender. We've outlawed innovation under the guise of safety. We're busy building walls when we should be building bridges and doorways. And we've mistaken control for leadership. When those who understand this plant most intimately still choose to legislate out of fear, fear of hemp, fear of competition, we lose sight of the bigger picture. The movement that once stood for access and healing, and yes, leveraging loopholes and interpreting rules to advance the cause is now defending a framework that excludes and suffocates. We've turned the spirit of yes we can into the bureaucracy of no you can't. If California was once a lighthouse, we've now become a cautionary tale. And if we keep this up, by protecting turf instead of purpose, we won't just lose leadership. We'll lose relevance. If there's one thing the cannabis industry has taught us, it's how to pivot. I get it. We're all tired, but we are truly leaving our roots behind when we have given up on finding alternative solutions and pathways forward and kill innovation that could lead to a better world for our businesses and the consumer. Just because I'm moving the core of my business out of state, I'm still a licensed cannabis operator after all, doesn't mean I'm giving up on California. Quite the opposite. Once I'm no longer under the thumb of Sacramento, I plan to be an even bigger pain in the ass. Because this fight isn't over, because I still love California and this industry, and I still believe California can reclaim what made it great. If we choose vision over fear. One plant for the people. Thank you.