SPEAKER_07: 0:06

Hey everybody, it's Anna Ray Grabsdeen, your co-host on High Spirits. And we wanted to make sure that you had lots of valuable content in your feed, even though we're taking a little break from recording quite as often during the holidays. So we are sharing our appearance from Las Vegas on this week in Cannabis Live, a collaboration that we do with Jay Rosenthal and Jeremy Burke from Cultivated Media, along with Mark Hauser from Cannabis Musics. We were in Las Vegas and we had a great run of industry leaders who joined us in the guest seat. We have lots of great conversations from the heart of Vegas during Cannabis Week and MJ BizCon. And we think you'll really enjoy it. So let me know what you think, and I'll see you on the other side.

SPEAKER_11: 1:00

Welcome everybody to this morning in Cannabis Live from Las Vegas. Hello, hello, hello. Uh we're actually we're not really sponsored by Siegels Bagomania, but we think we are because we enjoy it a lot there. So thank you, Seagulls Bagel Mania, for making our breakfast and coffee this morning. And you can almost see it from this angle. It's on the other side of the convention center. So we are here in Las Vegas. I am Jay Rosenthal. I'm Mark Hauser. Ann Array Gravstein.

SPEAKER_10: 1:26

Ben Larson. Jeremy Burke.

SPEAKER_11: 1:28

And we do have a guest, which we'll bring on in a second, a uh great guest, and we uh a very topical conversation we'll have with him. But we'll be doing this today and on Friday as well, uh, from our hidden location at the Renaissance Hotel, right next to the convention center, uh, as the cannabis industry descends onto Las Vegas. Uh Ben, you got here this morning. Jeremy, you got in like early morning.

SPEAKER_10: 1:51

Last night. Last night. I guess it's somewhere in the middle.

SPEAKER_11: 1:54

Anna Ray and Mark, you've been here for the past little bit. Monday.

SPEAKER_07: 1:58

Got here yesterday. Oh, Monday.

SPEAKER_11: 2:00

Good for you.

SPEAKER_07: 2:00

Yeah, less than 24 hours. I'm I'm I'm gearing up.

SPEAKER_11: 2:03

First cannabis impressions of this year's show. I mean, we haven't been to the show, but like of the vibe of the people you've come across so far.

SPEAKER_07: 2:14

I I think that people are excited and ready to be connecting and figuring out what the hell is going on. But in general, it seems like people aren't really sure. Yeah. Um, so I think that the convention will help kind of set some set some direction for the year, is my help.

SPEAKER_11: 2:31

Yeah, last year on the way home, I talked to someone I called it forced optimism, was the sort of vibe last year. And this one is what the hell's going on. That's like that's the first take from NRA Grabstein.

SPEAKER_02: 2:41

Mark, you uh I say the vibe so far people I've spoken with is bleak. Um which is not that different from the past, you know, five years. And the same conversations that everybody's been having since time immemorial in its industry are the same conversations we're still having.

SPEAKER_11: 2:59

Yes, but and good lead-in. There is a different conversation, too, uh, that is uh very topical, and that's why we have our first guest, Thomas Wenstanley from edibles.com. Thomas, thank you for joining us here today as our very first guest.

SPEAKER_01: 3:13

Honored.

SPEAKER_11: 3:14

You didn't even know you were gonna be our first guest.

SPEAKER_01: 3:18

We've been doing this now. We've done MJ Biz interviews. I think this is maybe three or four.

SPEAKER_11: 3:22

Three or four, yeah. Three or four years, a variety of different locations.

SPEAKER_01: 3:25

Yes.

SPEAKER_11: 3:26

Sometimes in dispensary, sometimes trade show floor, sometimes in booth. I think this is the fourth one. Yeah, yeah. Now that I think about it. Yes. Well, welcome. Um, we never done it this early in the morning. Vegas time for sure.

SPEAKER_03: 3:37

Yeah.

SPEAKER_11: 3:38

Uh clearly a mistake. Uh, that we're doing it now, not that we haven't done it as early as before. But why it's topical conversation, obviously you're with edibles.com, hemp derived THC marketplace. And that um has been in the news, let's say, over the past, I don't know, three weeks or a month.

SPEAKER_01: 3:55

Yeah.

SPEAKER_11: 3:56

What is your first vibes uh being here?

SPEAKER_01: 3:58

Well, it's interesting coming back. I haven't come to MJ BizCon as a hemp person. So this is kind of coming back. I wasn't here last year. Um, but I've been really interested to hear kind of everybody's perspective. It's always really helpful to understand both what's happening in cannabis and then also be with a lot of the thought leaders on the hemp side who are here too. Um, and I think that's really part of the value of coming out to these conferences, is where you get all of these thought leaders together trying to figure out what is happening, what is the level of optimism. I remain cautiously optimistic, I'll say. Um, and I think it's it's helpful to start having conversations with cannabis operators too and get their perspective, because I think we all live in these bubbles of can't cannabis hemp. There are brands that are kind of floating between both ecosystems. Um, but it's been really interesting to see that hemp is very much a topic of conversation here now. Um, and I think it's gonna continue to be one, especially given what we are seeing in the market today.

SPEAKER_11: 4:57

When you say topic of conversation, uh, before we went live, like is it a little bit of fuck you guys and like cult you so? Or is it a bit of like we're glad the competition is gonna be less? Like, what, or is it like what great brands that we could bring to the cannabis market? Like, what is the, or is it all of those things at the chandelier bar?

SPEAKER_01: 5:17

Yeah, I mean it's it's all the chandelier bar for sure. Um, topping of discussion, maybe a soft way of putting it. I think there's a lot of healthy discourse where uh I've talked to folks who are like, great, you guys are gonna go away, stop stealing our business, you are a distraction to what we've all been fighting for. Um, and I think that's a healthy conversation because I don't think we are having these types of healthy conversations about cannabis and hemp and what regulation looks like. And even though, you know, there are the folks who are saying, you know, separate, treat them separately, go in different directions. There are the one plant people who are saying regulate THC as the molecule, you know, it's really a discussion about what is the path to a framework that coexistence can happen and how can we work on coexistence. And obviously, across that spectrum of that discourse, there are people who are more flagrant about wanting to see hemp go away. There are people who are very strong advocates who don't want to see THC taking away from people. And I think the really core insight that I resurface with a lot of these folks, many people got into this industry to create safe access to THC in any way, shape, or form. Both hemp and cannabis do that justice. And I think we have to remind ourselves of that. Um, where this starts to net out, it's beyond me. I think right now there's a lot of discussion about uh descheduling on the cannabis side, on the federal side. There's also obviously all of the fallout from recriminalization in the CR for hemp. And so it's I think there's a very diverse body of opinions on it. Um Wow, you're a diplomat. I think we all have to be diplomatic. I think that's a really important thing. I think we have to be diplomatic.

SPEAKER_07: 7:06

Like everybody has to come to the table for sure conversations. I I will say that the the narrative is interesting because what you're talking about is safe access. And I am seeing some of the cannabis operators lean very quickly and heavily into some of the reefer madness that we see the prohibitionists talking about pointing fingers at anomalous and bad actor products that are out in the market. Like super, super potent products, and being like, well, this is why. And it's like, okay, that's something that we can all agree on. Um, is that we don't need 10,000 milligram edibles.

SPEAKER_01: 7:45

Definitely not.

SPEAKER_07: 7:45

Um that isn't safe access, that is something else. And um, and so it's like that needs that that's that needs to go away. That's static. It's like we don't need to keep arguing about that. Let's talk about what this could look like as safe access for people all over the country and some other song.

SPEAKER_01: 8:03

There's there's no question. And I think there's also opportunity on both sides, and I think this is gets lost in the discourse where you know there's there are products that regulated cannabis markets can bring into the hemp market, and there are products that the hemp market can start to bring into the regulated market. And like I think there is right now, it's it's almost kind of a THC civil war with like mini civil wars in between cannabis and hemp. And I think altruistically, we have to find ways to coexist, you know, and I I think it would be uh a disservice to think that hemp giving access to THC in a regulatory framework through hemp over, you know, since 2018, 2019, that has introduced way more people into THC. That also will bode well for future of cannabis legalization because you have a much larger total adjustable market size who's now entering the category who is kept from it for years.

SPEAKER_07: 8:59

Can you talk more about that? I'd be interested to hear from your experience with ebbables.com, like what you're learning about consumers.

SPEAKER_01: 9:05

Yeah. I mean, our consumers are coming from, you know, are coming from states that don't have cannabis frameworks. They are 55 and older. They are, you know, we see really high retention rates on the platform, which is amazing, which means that people are really liking this. And I think hemp is a Trojan horse to reach the consumers that cannabis operations just can't today. And, you know, folks in South Carolina, we have South Carolina is a big market for us. There's not going to be a cannabis policy there anytime soon, unless there's federal disclosure, but they like the products. So this is good because when we do have to have a bigger discussion at the federal government about THC regulation, well, now you know that South Carolina is now engaged in buying THC products, they're going to be advocates for some form of protection. And right now, protections are few and far between at this point. And so we have to leverage this critical mass of consumers coming in from states who are not regulated markets who are now saying, yeah, like we want these products, we want access to them. We need those people to go tell their senators when bills come up to protect this category. You need both to get us to a place where we have preservation of category, of just THC in general. It's going to be hairy, like there's no question this is not an easy fix. But I think over time we have to continue in this direction where there is access to it, where you have consumers who are now engaged in the category who are then going to become the advocates to get policy done. That's just the simplest way of looking at it, in my view.

SPEAKER_02: 10:33

Can I I I am so I being the the the the gadfly on the panel, um but I I I try to be a diplomatic gadfly though. But um, but I where I still go back to is that this is all well and good. And I I agree with a lot of what you said, I disagree with what a lot of you said, but I you know, but but where I always go back to is that from a federal political perspective, how you know, Rampol's uh last bit attempt to get the the loophole re state reinstated was lost, you know, 76 to 24. Yeah. How are you getting to how do you know the the licensed cannabis industry came to get banking done? Yeah and um and hasn't for years. And so how do you, you know, how does the hemp space convince 60 senators that it's worth the political capital to put into place a you know a recreational uh psychotropic psychoactive drug because it is um because it's drugs and drug policy doesn't follow rational lines. And that's that's a that's the skeptic. So, you know, it's like we can make all the serious, thoughtful, rational points about the importance of this stuff as in medicine, you know, economically, and but none of it matters because it's drug policy. And the the other problem too is then all right, so let's say the the FDA regulates it, you know, they kicked it to the FDA. The FDA spent six years trying to get C V D studied and did it.

SPEAKER_05: 12:04

Yeah.

SPEAKER_02: 12:04

So like, you know, what happens in that interim period? Is it still, you know, so it's just I am I am skeptical that that that you know that it's gonna be able to be pulled off. You're always gonna be I'm always gonna be smoking. No, and I think that's a good idea. Yeah, so that's why I say I'm a gallery.

SPEAKER_01: 12:20

So I I I like what you brought up, I love that you brought up the Rand Paul amendment on the floor because that that was an amazing signal that I think people lost looking at. Because you had Bernie Sanders and Elizabeth Warren, and you had some like very liberal people supporting it. Then you also had like Ted Cruz and Crenshaw in Texas supporting it. So I want to be really clear. Yes, that was like the numbers don't look good, but if you look beyond the numbers, part of the reason, and we've talked to staffers from a multitude of other states after that vote was that they said this was not the time to have the conversation about hemp because we're talking about the Affordable Care Act. Signaling votes against continuing resolution at the time was death knell for a lot of folks on the Republican side.

SPEAKER_02: 13:09

Well, but it wouldn't have held it up. It would not if that had passed, it still wouldn't have held up. So what's the thing?

SPEAKER_01: 13:16

It was an ancillary topic of discussion under a cloak of a much darker. On an appropriations bill. In an appropriations bill, too. And so when we've talked to a lot of the folks who didn't vote, you know, their vote for the CR was not a vote against hemp, it was a vote to open the government up. And so in follow-up conversations with them, they say, yeah, as we work on a new bill that we're working on with Senator Griffith, we have a lot of bipartisan support. And I think that's where, you know, the optics of the hemp ban coming through the CR package, you know, as much as I have my issues with Mitch McConnell, it was one of the most brilliant political moves I've ever seen because he knew we couldn't fight him. We had no room to negotiate on that. But what I do think is that that was that was a battle we lost. But I think there is throughout Congress, there's still a lot of bipartisan support to get something done. And even still, I would I would argue that getting federal protection of some form of THC now with this topic that is front and center is going to help build the case for more progressive policy on cannabis as well. We need THC protections at the federal level. There's just no question about it. Watching this type of ban come through is regressive to having THC at all at the federal level. So I'm still hopeful, even though that bill, that uh appropriations language that Paul brought forward, we saw, you know, Warnock and Awsa from Georgia, who have never publicly been too out front about their support of hemp products. Well, they actually supported Paul in the first time that we've seen around protecting the category.

SPEAKER_11: 14:58

Or anything.

SPEAKER_01: 14:59

I right yeah, right. I mean, and I will I will tell you, when you look at when you look at the people on the board, when I start to look at the map of congress and seeing, again, Ted Cruz and Crenshaw in Texas in support of it, and then you have the Bernie Sanders and the OSSOffs, like that to me is well, now you have this really interesting bipartisan support around some form of THC regulation. Yes, it's hemp for now, but we're talking low dose. Over time, getting federal protection is going to become a stepping stone to true cannabis light regulation and THC regulation at a federal level.

SPEAKER_10: 15:35

So I think we need it. Thomas, just to sort of square the circle here, explain edibles.com has 340-something days with a shot clock before the hemp plan goes into effect. What are the first three things that are on your agenda in January 2026?

SPEAKER_01: 15:51

Yeah, so uh what we did was what we are looking at is, you know, we're kind of looking at it as almost like a half-year plan, right? Where we know that there's a limited amount of time between now the start of the new year and Congress going into summer recess. That's gonna be a really important window. And I think as we go through that process, we will see signals of is this happening? Is this not gonna happen? What is the landscape? And I think, you know, part of what we want to do is we put our best plans forward of, okay, we know that there's gonna have to be another CR passed in January. Is there an opportunity for an extended moratorium? Is there an opportunity to rescind that appropriations language? Is there, you know, we're working on what Wyden's got a bill that he's working on, Griffith's got a bill that he's also working on. Um, are there vehicles there? You know, really, it is a short window because I think Congress out of 365 days are only in for, you know, 200 days. So it's a much shorter window.

SPEAKER_11: 16:50

And you're talking about an election year. It's gonna be yeah.

SPEAKER_01: 16:53

I mean, and and I will also also I will also add to the point earlier, too. Would I be as bullish about getting something done and bipartisan support if it wasn't a midterm year? I don't think so. I think midterm elections are a really key part of being able to get this to happen. That's a good plan. Because when you look at the total adjustable market size again of people who are purchasing hemp products, you know, when I was talking to a reporter at the Hill, he told me after the appropriations language passed, the number one article on the Hill was not about ACH. It was about hemp. Right. And so I think because hemp all of a sudden became part of the forefront, you are gonna have a mobilization where as we get into midterm season, we think people are going to slactivism works. Like people will write to their senators if they know that their senators are on the hook for something that supports or doesn't support hemp. And so that to me is kind of part of as I look at the planning phase of next year. It is one, how do we get a strategic framework around getting policy done? What multiple avenues do we have available to us? On our business side, our businesses, we are still going full blast. Like we are not going to make any pivots, we're not gonna make any changes. If anything, we want to ramp up. And we also want to start to get a little bit more involved in activating our consumers now that they are starting to understand what is happening. And I think the other piece of what mobilization has to look like in 2026 is I don't think consumers realized what was at stake a few weeks ago, but now they do. And I think it's incumbent upon all hemp operators to start to really push the message out and keep them along on the path and give them the strategies to help keep the category open. Because I do think if it disappears, there are going to be a lot of consumers who are gonna be really upset and pissed off. And I think that those products, you know, regulated products, yes, will go away, but the black market ones won't. Those thousand milligram gummies on the shelves are still gonna be there. And that to me is where we we have to stay the course and be ready.

SPEAKER_10: 18:52

I just want to kind of add a little bit of depth to the strategy because we we do have limited time. You mentioned kind of the civil war uh between hemp and cannabis, but this is also existing in Hemp to Hemp, and then also with an alcohol, who is a very significant contributor to this conversation. And yeah, it's not just about educating the the Congress people. Correct. It's about making sure that the powers that be behind the scenes all of it are also kind of it's the wholesalers, it's the distributors.

SPEAKER_01: 19:20

I mean, it's you know, and I and I think this is where what the hemp industry needs to do, and this is something that I'm I work really hard, I'm on the phone a lot with folks, is we have to kind of put our energy behind similar goals. And we have to align on like what are the toler what is the tolerance for what we can get the largest percentage of hemp operators behind, and then strategically work to bring that message across all of these subsets. Um, and it's not easy. I mean, this is gonna be like 2026 is gonna be a pretty big make or break year. Um, and we also who knows what's gonna happen, also adjacent and politics that might take thunder from us.

SPEAKER_11: 20:03

We really are diplomatic.

SPEAKER_02: 20:12

I mean that seriously is because you know the one thing that the license industry has always sort of diluted itself. I mean I say license cannabis to cannabis is um is we've always diluted ourselves that Congress and the federal government cares about cannabis. That's why we had always heard oh yeah state banking is right around the corner. And even you know the MJ buses in 2018, I mean everybody thought that legalization was just like 18 months away. Yeah. And it's because we've always thought that then that Congress cares about cannabis.

SPEAKER_07: 20:42

Trevor Burrus Well so maybe Mitch McConnell gave us the biggest gift possible which was first the farm bill and now it's the shot clock. Gave us a loophole? Well so he created whatever it was but it doesn't matter what it was McConnell created the first opportunity. Now he's created the second one which is to like pull up our pants and get to work.

SPEAKER_10: 21:03

I just want to highlight what you just said like it doesn't matter how it happened or what happened.

SPEAKER_01: 21:08

Exactly it is it's like well that's that's where I and that's where actually some of the discourse I had last night with cannabis operators was they kept throwing the loophole and I'm like it's it's water under the bridge. Like it happened. It existed it's it's here.

SPEAKER_11: 21:24

I don't agree with something happened in Minnesota though.

SPEAKER_02: 21:26

Like that whole that was a mistake. That was well it turns out that actually was an intentional mistake by a lobbyist but I but I don't fully agree with that.

SPEAKER_01: 21:36

But but if it was so here's so I I was talking to a uh a a federal official yesterday about this and I said to him at the conference. Yeah. And I said to him well if it was such a mistake why didn't you fix it sooner?

SPEAKER_02: 21:52

Trevor Burrus Because Congress is lazy.

SPEAKER_01: 21:54

But it's regular but again about a free you're living with a something that you deem a mistake for so long without addressing it and then creating a bigger you know category.

SPEAKER_02: 22:05

It's a great question.

SPEAKER_01: 22:06

It's a great question to the Influence why does the FDA not send more warning letters speaking of delusions right we we we live in a democracy then why don't we fix it and why are we waiting for Thomas you're gonna be on their podcast in January for the Canabev summit yes I'm not going to Canabev but so so uh we have to end this I'm sorry we could do this literally all day uh but maybe we will you're gonna end you're gonna have the same conversation a million times on the trade show floor probably less friendly uh because Mark won't be there um do you guys want to do a thumb warm no no but I I also think I also think this is the kind of conversation we need to have to air this channel sorry I don't know if we can't you're good this is a we podcast nobody's watching the podcast I think these are this is the dis this is the discourse that has to happen that has been building up for six years. Totally agree. And it's like you know what even if we may not be on the same page we still all want the same thing which is like let's get THC access. Let's get THC protections. 100% you know and we have to be very thoughtful about the avenues to get there and we have to be really smart about not shooting ourselves in the foot or shooting each other in the foot accidentally I'll just say something say one last thing as someone who's been in the industry now 10 years is when I first entered getting products into edibles.com was the dream.

SPEAKER_10: 23:32

That like getting THC into platforms like that was the dream. How it happened is what it is but like we did it and people got access and if we are a democracy we won't delude ourselves into thinking that that the voters now have access to THC and they will vote. Correct.

SPEAKER_11: 23:50

I was gonna say something much less elegant which was like I think people getting high is not good. Yeah yep again that's way less elegant we just said I think the same point. Thomas thank you so much for joining us as the first guest here on this morning in cannabis um live from Las Vegas as you can see we're gonna welcome on our next guest we will see you on the trade show floor you'll be you'll be the one having arguments with uh most of the people I don't argue I have constructive discourse real diplomat thank you so much Thomas appreciate you we're gonna welcome on our next guest Vikity Splickety Thomas you're gonna hand the microphone to Vahan. Vahan you no no warm up you're just coming in the hot seat right away. Vahana Jamie you are uh with high tide and um I don't think you know everybody that is Ben Anna Ray uh Mark and of course me um Vahan um let me tell you about one of the more frequent emails we get Dermy and I at Cultivated um and it happens like maybe once a week you're gonna tell me how often another high tide is opening somewhere in Canada you are over 200 215 as a time so that's people do come to that but like 215 would put you as one of the biggest retailers in the states for sure I I believe only TrueLeave would have more stores than mechanic amount there are seconds we're the first in the country in second round in the world yeah but an email this week was even more unique I think than 215 uh in the milestone store the milestone store in Berlin is that right correct like tell us about that because that seems to be we've talked there there's been a ton about exporting from Canada to Germany to uh Australia to other to Israel to other places but I don't think there's been a retail setup that is Canadian or really North American at all not at all not at all right if and if you look at the dynamics of the German market right that's no one else has done it no one else has tried it right and and we're getting you know ahead of the curve right just like we've kind of been you know most of this year spending a lot of time on Germany right and getting the the Remexion transaction now we have a can of cabana fully functioning in Berlin in a very nice trendy downtown just you know area of it.

SPEAKER_00: 26:02

And so I I think I think it's gonna be fantastic that people are going to go and they're gonna see the Can of cabana they're gonna sign up they're gonna be members they're gonna buy accessories they're gonna buy other you know related products obviously we can't sell cannabis until you know the FN1 happens and we know there's a process for that but these processes is as as you know always take longer than you expect. But uh yeah it's it's very big. I mean though the most of the execs were over there in the operations team to make sure that uh you know we give an authentic Canada cabanas experience in Germany um and to people Berlin which is very similar to what we have in in Canada 215 stores and you know more common. So it's uh it's it's we're really excited for it's it's you know I mean you could say it's one store out of 216 but it's a flagship international milestone store and we're really thrilled about it. Just for my own edification uh and the audience what is the 60 second like structure of of German market versus it's all medical right so there is a pillar two path which will eventually lead to legalization for adult use but right now it's all medical um there's only three uh local growers right and they're very small so 90 plus percent of the market is import market um and the biggest source of imports is Canada yeah and so what we did is you know you know we saw some companies you know four or five years ago invest 100 million in MA or you know building growth big growth factories uh in Europe because Europe was about to turn on and then nothing happened right um so we we we've been eyeing the market and uh the interesting that happened last year in April was uh really the pivotal moment the government changed the law on medical cannabis in Germany so it was no longer a narcotic more of a regular prescription medicine so whereas before I mean little things like even the doctor would have to prescribe it in this like red danger notepad right prescription pad and that makes them more you know more relic more reluctant to to actually prescribe it makes the patients more so that's gone now right so now we saw in the last year and a half patient counts go from two 2500 to nine hundred thousand and we saw the and you know the imports every quarter into Germany from seven tons to like over fifty tons a quarter right so now he's out there and say okay well this is a real market now and it's an economically viable way for us to enter um so how are you gonna do that right well um we're not gonna grow we don't grow in Canada we're not gonna grow in in Germany um and we can't buy pharmacies a we're not in the pharmacy game um and and b you could only uh own pharmacies if you're a German resident pharmacist sort of you know corporation can't come in and just start buying pharmacy that's it sounds like Ontario yeah in order to buy a dental practice in Ontario you need to be a a dentist in Ontario it's very Canadian yeah and uh so so what we found was a great partner Remexian so we we we just closed that transaction about two months ago um so they import from medical cannabis they're licensed to import from 19 countries um they've actually imported already from nine they were doing fantastic business of with 70 million euro revenue annual run rate 15 million euro Ibata and what they do is they import from around the world and they distribute to the pharmacy so they deal with hundreds of pharmacies and they sell to other distributors who have reach with other pharmacies so we sat there and we said well how are we gonna you know how do we take advantage of and be a real player in Germany while we are the largest medically you know sorry the largest federally legal cannabis company in the world in terms of revenue right we've sold two billion dollars worth of cannabis to you know actual customers and everything is well the NASDAQ everything's federally legal and we sat there we said well most of the large LPs and even the small mid-sized LPs that are exporting to Germany well we're your largest customer we do$50 million a year$40 million a year$30 million a year with you selling your products um across across the country so the ask was well you know if you want to sell 12% 15 10% of your production overseas to Germany that's fine all we ask is you sell through us and our partner rather than you know a small German distributor that you've maybe never really heard of, don't have much of a track record in some cases are stiffing you for payments um and we're not gonna grind you for price you know we just want to work together because you know we're your best friends in Canada. We should be working together overseas and we've got almost no pushback we've got dozens of LPs that said yeah we want to work with you and we want to sell through you and um some of a lot of them want to go exclusive we only want to sell through you because they see the the power that's going to be in our menu which is currently being developed in Germany where if the average distributor has 60 strains in our menu well we'll have like two or three hundred right and we'll have the you know and then once other markets eventually UK Czechia Poland Switzerland they open up well we're gonna take that same menu and basically piggyback our partners to all the other countries. So um yeah the trends spent most of the year actually working on the transaction I'm really glad that it closed tying up the loose ends and you know we've seen things now like you know Raj and the and the team go there and now their Mexion team comes to Canada we do a tour with all the licensed producers and we're starting to turn on that okay how much can you send at what price and you know start to get the wheels motion.

SPEAKER_11: 30:57

Right. And the LP is the licensed producers in Canada love it.

SPEAKER_07: 31:01

What what's your take? So in in Canada the brand landscape I would say is not as evolved as in some of the more mature states in the US um certainly in the states that have open retail experiences like California and Michigan and others. Do you see that Europe is going to be more like Canada with more restrictions on brand marketing and and just brand and products in general or do you think that we might get a more robust kind of consumer experience like the way the US has has developed what are the current foreign factors foreign factors just flower now.

SPEAKER_00: 31:40

Just flower right so well we I mean right now we're in Europe we're looking at like the baby steps right in Canada's like we've been legal since 2018 right so you know it's a matter of how big is the market and how much is it growing 5% a year right we're going 15 but you know it's in in between in Europe and Germany just is Germany is like the first one in to the party in in Europe right and even there it's like baby steps right so you know was medical now it's no longer narcotic um you know we you know obviously from our perspective we're opening up a store but we think you know gradually you'll start to see the forum factors you start to see adult use um you know it's it's good that it's legal now so with pillar one which passed last year you can walk around with cannabis and not get arrested. Now the only place you can buy it other than medical is you know these not for profit social clubs which is fine for them but you know it's not a viable business for us. Right. But now you know inching forward right so we we're seeing progress we're happy with it and obviously we're gonna you know we we would like a you know a Canadian style model in terms of you know the structure and you know being federally legal um with some of the states obviously at your point have much much better branding um capabilities than we do in Canada.

SPEAKER_02: 32:44

I heard a cannabis I've heard a dispensary radio ad yesterday driving around yeah like order pick up delivery 24 hours like all the that was like shocking my sensibilities yeah yeah yeah you don't you don't hear those often on camera no no but you're likely to see a can of cabana on your drive rather than where you go um I have I have a my less serious question is have you spoken with Barry Manilo to do a jingle based on Copa cabana feel free to use that um we'll we'll definitely reach out yes because that would be famous dunner can so uh I see I my my actual question is what is it what is the what are the economics of the German market like right now? I mean are you know whereas in the US it is very hard to be profitable on a net income basis.

SPEAKER_00: 33:33

You know Canada is closer to you know because not the same issues but the you know there's still a lot of uh lack of profitability up in Canada what it how are the German um you know retailers and operators sort of how are they doing economically so I mean again it's still early it's early yeah but it's a sign of the market right like you see in pretty much every US state uh you go from you know and here when you go from like medical to adult oh my god there's not enough weed and every single state same thing wholesale prices are high and then everybody triples their production and three years later right yeah so right now we're still in that like not enough weed area right when because the patients go from 200,000 to nine right and your imports go from seven tons a quarter to over fifty right you're you're in that like anything will sell immediately and at good prices right um now we are going to see some saturation we are starting to see some comp increased competition some margin pressure um but the uh I mean the the the business we bought 51% of Romexion I mean it did 50 million annualized of your euro of IBITA on 70 uh million euro of revenue for six months ended March and I see it's um and so margins we'll we'll see how long the the margins can hold for right but so the the the generally speaking margins will compress and we've seen some compression already in the German landscape where we think we can benefit is is in in terms of Remexian being affected the least are two things. One is culturally they're very similar to us. We are the lowest price guarantee unbeatable prices in Canada. Well price beat price match etc they're the lowest price in Germany and the second thing is so you know as there is if there is compression they'll be affected the least because you know everyone else gets squeezed much further right um one thing Raj says when you know we saw people you can walk in the office and you can see the culture of you know similar to us bang for your buck, eat it up focus, cash flow focus. And the second part is and this is why we got such a good transaction and at such a good terms with you know 3.65% on the first uh first 51% we bought is we have an un unique unparalleled ability with our own Canada and our relationships to help improve the economics of our Mexian right so even though even though the 49% shareholders they can get a lot more cannabis at a lot better prices because we sit down with somebody and says we're doing$50 million with you. So you know give me a good price and already we're seeing we can source better pricing um just on the first couple tours than our Mexian could on their own. So that's another way where if there's price compression nationally across Germany which there inevitably will be will be the most insulated.

SPEAKER_07: 36:09

Clearly you've got like a lot of purchasing power because of the relationships in Canada.

SPEAKER_00: 36:14

And at the same time there's a lot of talk about production capacity coming on globally in in places that have cheaper labor cheaper energy than than Canada people are looking at Africa and South America are you guys looking to um to be a buyer from from those production locations around the world as well we we we definitely are right so Romexian again they're they have a licensed import from 19 countries they're already done from nine so uh either they buy from South Africa Lesotho Denmark Portugal I believe Colombia um and we're not turning that off right all we're doing is we're we're bringing our own and our our ability to procure the best most consistent supply at the best price in Canada. So and what what we again the other reason why the marriage really works is the German market is around 45 50% imported from Canada whereas Remexiano is only one third. So they were already under indexing in the area that is our largest most unique competitive strength. Right? So we think we work together we can get them from 33 to 40 50 eventually maybe 60 well not by turning off other profitable areas just by increasing um you know the the volumes that come from Canada.

SPEAKER_07: 37:25

Sure a follow-up to that you talked about uh the the the revenue and the evida success or the mech Remexion uh historically what is the growth projected for 2026?

SPEAKER_00: 37:36

I mean it's tough to say we haven't given any official guidance i mean the transaction just closed in September um our year end is October 31 so we're going through the audits this quarter will be a very sub quarter where we'll have it for a little bit and the real machines in terms of um you know coming up to agreements with LPs and getting the products you know to actually sent there and actually sold you know it'll take a couple of quarters for that all to you know that that machine to work its way out until you're running full tilt. But uh look we you know we we we bought a really good business and we think we can improve it. And and the way we structured it was we bought 51% so the other 49% there are boots on the ground right we we have no interest in um you know doing this ourselves right so you know for two years we supply more cannabis at best price from Canada and they remain the boots on the ground they throw it sell it into hundreds of dispensaries today well to try to get to hundreds more dispensaries and other you know wholesalers um get the IBITA up double triple whatever we can do over the next couple of years working together with our competitive strengths and then after two years we have a five year call option to buy out the rest of the company or they have a put option to sell us at IBITA again either 3.6 or four times in the future so everybody's super incentivized to work together with their areas of strength raise the revenue raise the IBITA over you know coming years not just hey what's happening with imports this quarter for example but you're not moving to Berlin.

SPEAKER_11: 38:56

I'm not moving to Berlin I'm moving to Berlin right Omar you're moving Omar out there.

SPEAKER_00: 39:02

Omar is there actually right now he said he said he sent me the message today so he missed he misses MJ Biz I'll take MJ Biz in Vegas guy.

SPEAKER_11: 39:10

Yeah I'll take Vegas over Berlin yeah well I guess it's Berlin this time of year. This time better years although they're based in Alberta it's like that's true. Alberta and Berlin probably have a pretty similar pretty similar weather these time this time of year. I really appreciate you coming in first thing this morning or second thing this morning as we had a guest before you always good to connect and I think it's good to share with the broader cannabis community that there are companies in Canada that are doing well huge scale, doing really well, operating the most challenging business sort of at retail um we have another Canadian guest coming up after this but thanks so much for stopping by we'll see you on the trade jump. Thanks for Han that was great to hear about what's happening with high tide um in Berlin. But also I do like when they're expanding into other parts of Canada because even though Canada is big and we have a lot of weed like It is nice when they open up in pockets of like small towns.

SPEAKER_07: 40:03

It's really important to be talking about import export as well, because we're sitting in the US and US companies don't get to participate in import export at all. And so it's just another signal of this opportunity that American businesses are um are shut out from because of the lack of movement at the federal level to figure out this policy mess that's and compliance.

SPEAKER_10: 40:28

I just like the mental image of a can of cabana in Berlin. Oh, there's pictures.

SPEAKER_11: 40:33

There's pictures, there's pictures. This is John Prentiss. John, I don't know if you know Jeremy. Anna Ray, Mark Hauser. John is a longtime friend, but also um crushes the cannabis industry. We'll talk about his history. But John, I just found this. December 6th, 2017. Okay. So like almost how many years is that ago? Eight years. Look at young John.

SPEAKER_08: 40:56

Oh man. Yeah.

SPEAKER_11: 40:58

That's young John.

SPEAKER_10: 40:59

I mean, he looks pretty much more. Young John's. He has an age too.

SPEAKER_11: 41:06

He's he is he was younger then, but still young. Um I'll give a little bit of your background, then I'll let you do the talking. Um, John um started what was the first, I don't know, C to sale tracking software. Yes.

SPEAKER_08: 41:18

I don't know if we were the first.

SPEAKER_11: 41:19

Well, I'm sorry, not the first, but the one that dominated Canada, Ample Organics. Um, and scaled that, grew it, very successful. All the L not all the LPs, but it was it was the predominant technology in Canada. Um and uh sold the business, and then I'm gonna fast forward, then started being the pre-roll king of Canada.

SPEAKER_08: 41:39

Yeah, we uh was that? I mean, that's I did a lot of fast forward than we are today. We make a ton of free rolls. We do. I I actually don't think there's anyone in the world making more free rolls than we do on any given day. So what's the daily rate?

SPEAKER_10: 41:55

Okay, that's a good I love the number. Yeah, yeah, that's a lot of pre-rolls.

SPEAKER_11: 41:59

You're like the Abe Frohman. Abe Froman. Yeah, we're trying to give it a roll. But um we'll get into a lot of things, but give us um the strategy and the thought when you said like there is an insatiable appetite for pre-rolls in can in every market, but in Canada specifically, I'm gonna give most of them suck. Let's go do our thing.

SPEAKER_08: 42:20

Yeah, well, I think I think it started from like a uh a position of overconfidence. Um you know, I just all great ideas. Yeah, of course. You know, we don't do this because it's easy, we do it because we thought it would be easy. So I uh it's a great lie. We uh when we left Ample, I'm a I'm a technology entrepreneur, I'm a I'm a computer guy. I've basically grew up in my basement in front of a computer screen from the age of like seven years old. Um, you know, I I'm also a practical guy. I like working on cars and things with my hands. So uh my dad worked in manufacturing. And, you know, after I had exited Amble, I was kind of looking at the market and I thought, hey, this is uh, you know, I've got all these connections, I've been in the space a long time, I know everybody. Uh, you know, it should be really easy to launch a brand and get my products distributed across the country and give them to stores. And let's, you know, maybe we can do this asset light. I don't need to own anything, I can just be a name. Um how wrong were you?

SPEAKER_10: 43:15

Yes.

SPEAKER_08: 43:17

So a little cocksure for sure. But uh yeah, we we started a brand called Pinners and uh it started with like probably one of the smallest joints. It's a very thin uh style of joint, it's a custom cone that we designed. And unfortunately, when we went to bring it to market, uh we couldn't find a partner to make it. Uh just because the technology that was out there uh didn't work for making that style of pre-roll. So basically uh we spent the next two years figuring out how to make pre-rolls uh for our brand. And in during those two years, we uh didn't have a license of our own. We used other people's licenses or what we'd call shadow licensing. So we would you know basically contract them to be our license holder of record. Uh we would take some space in their facility, we would manufacture our product there, and they would distribute it into uh the supply chain. Can I pause? Yeah, of course.

SPEAKER_10: 44:04

You came up against this barrier of form factor. Yes. And instead of saying change the form factor, you said we're gonna spend two years trying to figure it out. That's right.

SPEAKER_08: 44:14

Yeah, John Frank's because I I didn't think it should be that hard. And so you know, it didn't take us that long to figure out how to make them. Uh, you know, we basically started in January and we shipped our first order into provincial distribution by November. Okay. So uh we did figure out how to make them. Which is pretty fast for Canadians to do that. Yeah, pretty fast, especially considering you've got like a probably six-month-ish lead time from the time you you submit a product to the province to the time that they'll actually take the first delivery or give you a purchase order. So it's it's uh it's a process. Um and unfortunately, during the two years that we were uh kind of practicing that, uh both of our license partners uh basically went bankrupt or blew up in some form or another. Uh the the first one uh shortly after we shipped our first order uh to the point where we were still within the payment terms. So we hadn't received the funds. And in Canada, if you're shadow licensing, the funds need to be paid to the license holder of record from the province. So basically you're held hostage by your partner FP, and if they're you know cash flow deficient, then they're gonna use that for operating capital. Um and you're not gonna get paid. So that's the common story amongst brands in Canada that uh try to go themselves, and I'm a victim of it too. Uh we were very lucky in that, in spite of those setbacks, while we were sort of developing this, we realized that we had created so much capacity to create pre-rolls that we couldn't possibly fill it ourselves with just pinners. So we started offering contract manufacturing services to other companies. Um and then this crazy opportunity during our second blow up, our second licensed producer blow up, we had this crazy opportunity to take over a 60,000 square foot uh facility that was built out. I think it cost 90 million dollars to build it. It's basically a spaceship. Uh it was formerly Camtrust, which was a billion-dollar New York stock exchange company. Leamington, is that uh they had two facilities. Well, they had many facilities. They had uh, but they had a big greenhouse in Fenwick. Yeah, um, that's the one that uh had the fake walls. Yeah. And then we have uh the Vaughn facility, which was basically their original facility uh that they could bring purely into processing. Oh okay. Which is perfect for us because we don't we don't cultivate. So um it was a it was a really good layout. Uh but we had the opportunity to take that over. And I remember at the time uh getting phone calls from friends in the space being like, uh, we're you why are you starting a license producer right now? What are you doing? Um but yeah, effectively it was forced on us. We we had to make a change, and what we realized at that moment was that by us having our own license, we wouldn't have this dependency on anyone else for our own success. Um and that was really important. So, you know, as we switched over from pinners into this new venture uh in the license facility, uh, we also made the decision to terminate all of our brands. So uh we don't have pinners, we don't have Woody's, we don't have AAA, um, we do make some medical gummies still. Um, but uh we went exclusively on making everybody else's stuff. Uh and and the reason for that was because our capacity just kept growing. So, you know, I I think you go out and you buy a pre-roll robot for$700,000 and it makes a thousand joints an hour, right? So, you know, you just to think about in 12-hour days, we produce 250,000 joints. So I'll let you think about how many robots we would need and the capital costs associated with that. Um, it doesn't work. So and frankly, the quality sucks. Um so we did the process that we developed really created these very high quality handmade pre-rolls. So not only do we make 250,000 pre-rolls a day, we do it exclusively by hand. There's no electricity in the process. Uh, it's all done uh by people, uh, which is really cool. How?

SPEAKER_07: 47:52

Yeah, I was about to ask we're at we're at MJViz.

SPEAKER_10: 47:55

It should be like 30 minutes to roll a time. You're not invited to join craft. I'm a little faster than Ben, but not that fast. Yeah, yeah.

SPEAKER_07: 48:03

If you talk to people about a lot of why why people are walking the expo floor, a lot of people are shopping for equipment. Like free roll and packaging machines. Yeah. Um, and as you were talking, my head was going to, well, when you talked about the process, is he talking about designing a machine? Yeah. Um is it an actual machine of some kind? Yeah, can you yeah, talk about it?

SPEAKER_08: 48:24

Like a BoFlex machine. That's basically kind of what it looks like. Uh it is human operated, uh, and it it allows us to do many joints at once. Uh, and that's that's basically it. But what really distinguishes how we make pre-rolls from everyone else is we tamp that weed all the way into the joint. Everyone else shakes the weed into the cone, right? They have these little vibrating plates that vibrates the cone up and down. They hope that like those vibrations will cause the particles of weed to like step into the cone and make a nice. It turns out weed is sticky. Weed is sticky, right? Uh weed is dusty.

SPEAKER_11: 48:55

Mechanic engineer. Yeah, yeah.

SPEAKER_08: 48:58

Every time the biomass changes from lot to lot, it's a whole new adventure, right? So it's there's so much variability in the product that trying to automate that process really doesn't work very well because you know, if you look at a pre-roll ER, I think you've got, you know, call it 12 stations in that on that rotary carousel that it uses to make joints. Um every one of those stations needs to be recalibrated every time there's a change. So you can imagine what it's like to have to go in and figure out XYZ coordinates in in 17 different locations uh just to get a pre-roll out of the other side that looks okay, just for the next one to get totally screwed up because it was slightly denser material or whatever the case is. So the reject rate is very high. Um but we push the wheat in and basically that creates uh vertical compaction, which means there's no air gaps in the in the pre-roll. Um it means longer smoke, no running, no canoeing, and no clogging. Because the clogging happens from the fine particles of the wheat moving down towards the filter, and then that heat turns it into basically a resin plug. So you can't you can't draw hair through your pre-roll anymore. Um but by pushing the weed in instead of vibrating it in, we don't get the density separation. So you end up keeping those particles evenly distributed throughout the joint. It's like a river.

unknown: 50:08

That's right.

SPEAKER_10: 50:10

It's an interesting way to think about it. Yeah, yeah. Yeah.

SPEAKER_08: 50:12

So that that and then you know beyond that, it's you've now gone into like process validation and how do we track all of the records and information that go around making 250,000 pre-rolls in a day. Uh and then the finishing of those pre-rolls. Uh, but we do every shape and size. So, you know, from keep coated to ceramic tip to you know, big two-gram blunts. You made it. Yeah. And we use a variety of techniques. So not every joint is made on our tapping solution. Um, some of our joints are literally hand-rolled with rolling machines. So those would be like your your hash donut sort of you know, how many people uh to make 250,000 joints today? Uh we have about 150 on site every day. So yeah, about 150 people. Pretty good ratio.

SPEAKER_10: 50:53

Pretty good, yeah.

SPEAKER_08: 50:54

Very efficient. Our our unit economics are better than anyone running automation.

SPEAKER_10: 50:58

Yeah. So I think I think the next episode is a how it's made in the facility that we can start to go away from that. I think a lot of people are very interested in how we do things, right? There's some risks to that. You don't want to show the rest of the industry?

SPEAKER_08: 51:14

I mean, you know, it it's uh it would be really hard to figure out uh the the level of um the the tolerances involved, the level of detail involved to actually get a process working with pre-rolls, it's such a delicate product. Like that paper, I mean, just it folds so easily. It crumples, it wrinkles, all those things. You'll never see a wrinkle on any of the pre-rolls we make. Not not uh bent filter or none of that stuff. They're they're absolutely perfect. Um but yeah, it's it's more than just the machine, it's the process and it's the technology that goes around it. Um so you know, we're according to Health Canada, during our last inspection, we found out that we are Canada's only paperless license producer. So we what does that mean? Well, in in the most regulated industries like pharmaceuticals, medical devices, uh cannabis, you have to follow these pretty intensive quality systems. Um in Canada we call it good production practice, and you'll hear a lot of guys going to good manufacturing practice for European export. Um, but basically, it means that we have to keep detailed records about every step of the process, and the process needs to conform with sort of the requirements of the standard. Um we've automated all of that. So basically, there's no paper in our facility. Our employees walk around with iPads, our scales report directly into our software. Yeah, and it's all fully custom-built in-house uh stuff. So, you know, where some of our competitors have quality teams of 20 people to keep up with their production, uh, we run with four. Uh one of our clients actually has a quality team of 89 people. Wow. So I don't quite understand. Quality team? Just quality.

SPEAKER_11: 52:48

89 people to get the biomass to use. That is, right?

SPEAKER_08: 52:53

Wow. Oh my god. So it's a it's an incredible cost in the industry. It's it's very inefficient. Uh and we've eliminated that.

SPEAKER_11: 52:58

Well, this is exactly what you were just saying. Like American businesses are missing out on the European opportunity, but also they're missing out on having to hire 89 people to do money for right.

SPEAKER_10: 53:11

Yeah, this is the economies of scale of interstate commerce. Well, welcome to Canada. That's right.

SPEAKER_08: 53:15

I would say we have the advantage of being a national market too, right? So our volumes are huge because we're servicing an entire country, like whereas in your state, it'd be a lot smaller.

SPEAKER_07: 53:24

Well, so you said that you're making all kinds of pre-rolls, hash holes, keep on the outside. Um, talk a little bit about what people are most excited about. What are the growing categories? What are the ones that are starting to decrease as as more product innovation is coming?

SPEAKER_08: 53:39

Yeah, I think, you know, I think the general observation has been that with the cannabis market broadly, um, pre-rolls are continuously replacing flour. Uh there's the people are less interested in buying buds and taking them home and grinding them up and packing them into joints. So what you've seen consistently over for as long as cannabis has been legal is that the pre-roll category continues to grow every year. Whereas the, you know, and that's eats from the other categories. What's been really interesting in Canada to watch the introduction of infused pre-rolls. So now you have all of these flavored pre-rolls and you've got them rolled in keef or diamonds, uh, you've got these kind of fancy iterations. That's now eating creating like almost 12 cents of every dollar spent in a dispensary in Canada is an infused pre-roll. Uh and that doesn't include the base pre-roll. So by the time you factor that, it's probably close to like 30 cents on every dollar on a Canadian dispensary spent on a pre-roll, and that's the only category that's still growing. Wow. So uh in terms of innovation, the really the big push is higher potencies. Um, you know, we we are making products 50, 60 percent THC and trying to push beyond that. Um, and that's a big kind of drive from our clients. We don't we don't design the products, they do. Um and then you know, flavor innovation too. Like, how do how do we make them more flavorful without it, you know, reeking like botanical turns? And you know, give you a more authentic experience.

SPEAKER_10: 54:55

It's such a scale of business now of 250,000 pre-rolls a day. Like what is your current limiting factor?

SPEAKER_09: 55:03

Uh not much.

SPEAKER_08: 55:04

We're doing that with one shift. So we could easily double our capacity overnight by adding a second shift. Um, for us, our big push right now and going into 2026 is EU GMP. Um, while some of the markets don't accommodate for pre-rolls today, we believe that you know, 12, 24 months from now, uh some of them will. Um and a lot of our clients are already exporting into these markets.

SPEAKER_11: 55:25

We're just talking to Vahan, who's importing Germany.

SPEAKER_08: 55:28

But I'm sure they would love to have pre-rolls in Germany. So um you know, that's the future, and that's the direction the industry is gonna continue to go. So we have this crazy advantage where Germany's importing, you know, what was it, 79,000 tons last quarter from from Canada? Um, some of that could be pre-rolls, you know, before too long. And if we can support that and create those products in an EU GMP way and have those compliant for export right away, that would be really cool.

unknown: 55:53

Yeah.

SPEAKER_10: 55:54

Although the continuity is great conversation.

SPEAKER_11: 55:56

Well, it's really it it it is interesting because the well programmed, but Jay. Thank you. Well, well, the the industry is I mean, John knows literally a hundred percent of the people in the Canadian industry. Yeah, I would say I think it's gonna be a lot of people. But it's like it's it's it's big in dollar amount, but relatively small in people.

SPEAKER_08: 56:13

It is very small in people, yeah. Yeah.

SPEAKER_11: 56:14

And the people have moved around and some of the companies have closed. So like it's well, also who's remained.

SPEAKER_08: 56:18

Right. Yeah, yeah, yeah. Right?

SPEAKER_11: 56:20

Well, your first correct so let's origin story at Peace Naturals, which was the first LP. First LP, first license.

SPEAKER_08: 56:28

Yeah, first, first new license. I think Prairie Plant Systems got uh Canymad issued like by grandfathering. Okay, yeah, and then uh Peace Naturals was the second license that was a new issue license.

SPEAKER_11: 56:38

Right, it's still viable via when they got bought, but viable, a viable business.

SPEAKER_08: 56:42

Uh it's chronoscrewed now. Yeah, and we talked to Gornson every week. Yeah, yeah.

SPEAKER_11: 56:47

So and but that was the first place you said I'm gonna create Ample Organics.

SPEAKER_08: 56:52

That's right. Yeah, that started with me and my brother-in-law uh sitting in a warehouse writing the application for Feast Naturals. Uh and I remember I had I had taken a job in broadcasting because if you remember back then, an application would take two, three, four years to get through the process, right? But I remember him going up to Ottawa with little dioramas of what the facility could look like, Health Canada. Uh they they did a really good job because the Health Canada obviously selected them as the as the first license to be issued. Um and then um uh the the Gorenstein team came in, uh, made a Kronos group. Um, and JJ, my brother-in-law is still there today, is chief growth officer, chief representative officer. Yeah.

SPEAKER_11: 57:28

Um, so it's that's there are so Ben there and Mark, there are so many stories. Not there aren't that many, but there is I could think of 10 that are very the first 10 licenses are very similar to this, where it's like you are a professional person, but like they weren't like compliance consultants that had done you know pharma that are saying, oh, now we're gonna create a growth facility. Like it was like John and his brother-in-law saying, like, how do we just a great startup story?

SPEAKER_10: 57:52

I love I love it. Yeah, grassroots.

SPEAKER_08: 57:54

And then we know with peace, I we learned that we needed to do record keeping it. Go figure out into the software side.

SPEAKER_11: 58:02

But then fast forward the record keeping you're doing now. Like it's right, it's all a it's a and I wonder if you've seen this like at shows like this, the same story playing out in New Mark in other markets, like New York. I mean, we see you know, there's a there's an undersupply, then there's an oversupply, then there's a crash in price, and then there's this like steady state where you what you just described, where pre-rolls continue to take an ever increasing share of the pie.

SPEAKER_08: 58:25

It's the same movie every time. Yeah, we've seen it a thousand times. Um, you know, it's a slightly different nuance to it in each market because of the regulations and sort of the you know unique nature of how different states or different jurisdictions have sort of approached cannabis legalization. But um Yeah, it's the same movie every time. You know, you're you're in a complete wheat desert to begin with, and then you know, prices are high, supply is low, then all of a sudden the outdoor comes off the field, and the prices tank, and um, you know, you get a lot of uh sort of compliance issues in the early days where you know people aren't exactly playing by the rules, and a few people get eliminated from the field. Um, you know, and then and then a lot of just really poorly thought out uh execution in this space. Yeah, yeah. Also very diplomatic. Yeah.

SPEAKER_11: 59:11

Well, John, you see I want to um ask more of an entrepreneurial question. One is that sort of ample very early in the whole life cycle of the industry in Canada, and then joint craft sort of later, I would say even wave two or wave three, whatever that is. Like, do you is there a part of this wave that you prefer to be in?

SPEAKER_08: 59:28

Like I don't know. I it's pretty fun when money's raining from the sky.

SPEAKER_03: 59:33

And that's really it's pretty funny. So that part.

SPEAKER_08: 59:40

Uh but uh besides that, I think we're we're coming into what I would I'd call it more endgame now. Like I think you know, the leaders that are going to start emerging at like in the phase that Canada's in now uh are likely to be long term incumbents. Um and to me that's really fun because what we've tried to do with joint crowd. Is not only build a business that's going to be sustainable for the next 50 plus years, uh, because I don't think pre-rolls are ever not going to be sold. I don't think you're not going to be able to find an infused pre-roll at the store. Uh, and I don't think they're ever going to get any easier to make. Uh, they're a giant pain in the ass. Uh because why a lot of people suck at making them. Um and, you know, I also think that we so we've created a sustainable business, but we've also created a business that compounds with scale, uh, which I think is really interesting. Um, you know, as we sort of look to the future of Joycraft, we have ambitions not only to sort of enable international export with the UGMP, but we also have ambitions of territorial expansion. I would love to go into some new jurisdictions. We've been eyeing up uh New York State uh and a few other key US markets. And I think what's interesting about our business is the second we do that, and we say, say we open another facility in New York City, um, all of our Canadian clients that want to participate in the New York market are going to come with us. And all of the new clients that we start working with in New York that might want to participate in the Canadian or international market uh will want to come with us. So uh we just have this incredible opportunity to build something of really meaningful scale by continuing to compound the business.

SPEAKER_10: 1:01:15

So if I'm a tobacco company, I'm salivating over this conversation. And we know BAT has put a large sum of money into organogram.

SPEAKER_11: 1:01:23

They also just my words installed, no new CEO. CEO, sorry, yeah, yeah. Retired. Yes, yeah. From the announced BAT guy. Yeah, CEO. So announced by the way, like the Wednesday and fourth.

SPEAKER_08: 1:01:36

This would be my subtle joke, is BI, I think there's a few members of the C team at Organogram that are a little miffed. I think they obviously a few people were thinking they were gonna get the opportunity to step up and uh they don't own a big enough share of the code.

SPEAKER_11: 1:01:47

Yeah, the investors obviously see different different ideas.

SPEAKER_10: 1:01:50

Yeah. Well, my my my question is like what is where's that conversation at? More broadly, I don't this is not a loaded question because I don't know like what your relationship is with with those folks. Um, but yeah, where where does this go? Like when do they really step in and be like, we own this now? Yeah, I don't I don't know.

SPEAKER_08: 1:02:08

Like I think I don't know that we would sell right now, even if someone came and knocked on our door. Like um, it would be very detrimental to allow, you know, hypothetically if we're talking about organogram, like an organogram to come in and buy joint craft, right? Because effectively you would now have control over the supply chain of all your competition. Uh, and that could be very problematic or could be weaponized very easily. Um, you know, for us, I think we want to stay as uh Switzerland as possible as we move through this. There's you know, the tobacco companies that haven't made an entrance into the space or or picked a horse. Uh that would be attractive to us, I think, or you know, large beverage or manufacturing companies. Um, but I think from from the perspective of like an incumbent uh coming in and purchasing us, like yeah, that would be probably pretty pretty bad. Um but yeah, we we we want to be that partner to industry and and be independent. Uh that's why we don't compete with our customers on the shelves. You know, they there's many co-processors out there. A lot of them have in-house brands, and every time you use their services, those dollars are being weaponized against you on the shelves of the stores uh to take your product off and put their product on. So uh I don't think that's a sustainable model long term.

SPEAKER_11: 1:03:14

Um, John, uh two years ago, we were at Planet 13 in Man Germany, and you were talking about uh I'm gonna get this wrong, but you like downloaded all the sales data you could from Canada to see how many pre-rolls were made. And you did the whole calculation, you didn't have the spreadsheet, I think, on your phone. Um of that total addressable market, even though it's growing, like how many, if I buy a 10-pack of pre-rolls, or I buy pre-rolls all the time at my local dispatcher, how many are coming from your facility?

SPEAKER_08: 1:03:41

Today I would guess somewhere around one in six. Uh one in six percent. Pretty good number. It's pretty good. But it's still on a growth operation. Oh, yeah, yeah. That's right. Yeah, I think it depends looking at the other five.

SPEAKER_10: 1:03:51

Yeah, yeah.

SPEAKER_11: 1:03:52

And that's a different way because uh going back to the days when money was ranging from the sky in Canada, like everybody thought they were gonna do everything. And I won't name the LP, but I was at I was talking to LP right before legalization, and they had their whole team hand-rolling joints, not in a good way, like you're talking about, in a very bad way, like holy shit, we don't have we can't do this. That's right. How many of those five that are not being sold by you are still being done in-house in some shoddy way?

SPEAKER_08: 1:04:15

Yeah, probably I'd say four of the five are still being done in-house. I'd say one other of the, you know, five would be done by a competitor or a uh the co-processor that has brands. Um or sometimes it's just like friendly help. You know, you've got, you know, the LPs all know each other, right? So you've got the LP up the street that happens to have a pre-roll robot. So I need 10,000 free rolls and send them up there. And frankly, like joint craft is probably not the place for you if you need 5,000 free rolls. That's just two. Out of several zeros. Right. Several orders of magnitude larger than that. So it's um, you know, that so we do kind of like uh not really capture that smaller side of the market, and that is a significant chunk. Um, but in terms of the major players, I would say we have most of them.

SPEAKER_07: 1:04:59

Well, so it it it queues up a really interesting question about convincing uh people to move away from verticalization and to de-verticalize. And and it's something that I think that we see across the whole industry. And in many ways, you know, the regulations really pushed and created these vertical businesses. And and then after they were entrenched, there is an ongoing narrative about margin capture by being a vertical business and how you can make so much more money by doing it all yourself. But yeah, I went to business school, and in business school, they love to tell you to like focus on what you're good at and not do everything. That's right. It feels like from the beginning, the cannabis industry has been the opposite of that, of like doing everything and then being good at nothing. And uh, so it occurs to me that you're really good at this one thing. Yep. And you just said that your competitors that are four out of six of the market are doing a lot of things. And uh I wonder, because I think a lot of businesses across the ecosystem or ecosystem are in this position. How do we convince vertical businesses to move away from being fully vertical and work with partners, be it for uh specialized manufacturing or ingredient production or whatever it may be, to like move away from their entrenched vertical processes?

SPEAKER_08: 1:06:16

Yeah, well, there's there's kind of two views on that. One I think is that some uh guys love to hide their overhead costs in their unit economics. So they're very disincentive. It's a really good point to move anything out of their own manufacturing because really they're they're hiding the truth from their shareholders and through their financials, right? Um the other side of it is that I think they're just it's a quality thing. So from the perspective of like uh brand, a lot of the pre-rolls that would come from other co-manufacturers, I mean they would literally send you back a garbage bag of pre-rolls. And you can imagine like these delicate little things just thrown in a garbage bag and then it's a plastic tote and sent to you like you know, you've probably lost 15% of your pre-rolls just in transit from damage. Right. Um and they look terrible. So there's kind of the the, you know, I I think there's the the value proposition of a we're gonna give you a superior pre-roll. It's gonna look better, it's gonna smoke better, it's gonna perform better. And frankly, like for every one customer complaint that you get, there's probably 10 customers that just didn't buy your product again. You know, I think there's so many people that won't take the effort to actually reach out to complain, they're just gonna move on to the next thing and and and carry on. So I I that's a major value proposition. It's not hard to say to customers that have that verticalized that you know, you're you're not the best at everything. Um you can't be. It just doesn't work that way. And I think what we saw was because of the abundance of capital, a lot of these guys had the opportunity to verticalize right away. So they, you know, went very wide very quickly. Um, but now they the pressure is to produce earnings. And you you can't just sit there and continue to collect losses. Um, so a lot of initiatives going on to reduce waste, uh reduce overhead and reduce cost uh within these bigger organizations, and that's been really beneficial for us.

SPEAKER_10: 1:08:02

Well in California, because of the way we were structured, I think one of the main drivers of of verticalization was the fact that you couldn't trust partners. And and and you even talked about getting sti stiffed on bills, right?

SPEAKER_11: 1:08:14

And everybody can eventually, well, the province does pay. It's just uh secondary level, and that's right.

SPEAKER_08: 1:08:19

Yeah, just don't be in between province and someone else.

SPEAKER_10: 1:08:21

Yeah, well, in building you know, Virtosa, we just focus on building trust, right? It's like we are trustworthy, like woo, new phenomena. Like, how much did that play into it? It's like stability, all that kind of stuff.

SPEAKER_08: 1:08:32

Yeah, I like to call it like organizational integrity, right? So basically, you know, we provide short turnaround times, uh, we have a full client portal, you can log in and see in real time what's going on with all of your products that are at our facility. You get your little dominoes order tracker for everything that we're making for you. Um so we've tried to make that uh process as seamless as possible. We also have a full account management team that's basically you know white glove service for the for the clients and available whenever they need them to take care of any requests. So uh that sort of omnipresent um way of operating where we're very accessible, the information is very available, we're not going anywhere, um, and uh and just being quick to turn things around. Plus, digital document delivery is like pretty slick. We don't have paperwork problems anymore ever. Which is a very, very common thing in this business where you know you'll order something from a processor, they'll ship it to you. Somebody will have messed up something on the wrong packing slip or something. Now it's more you can't sell it until you get the paperwork sorted out. So that sometimes can take you know a week, depending on how slow their quality team is to respond to these things. So you could have product that you need to be shipping to the province that you can't, uh, and it's creating a negative impact on your business. So we've eliminated all of those sort of bottlenecks and made everything really simple.

SPEAKER_07: 1:09:48

I've I've seen it with lots of asset light brands that I've worked with that have a lot of challenges, just having transparency into the inventory of their products with all of their different manufacturers. So I think it's cool to hear that. And um, and I think that it's starting to be a big differentiator across the industry. I've seen it also with Nabis, a large distributor now in New York and in California, where it's not the distribution necessarily that they've differentiated. It's the technology that their customers on both sides have access to that makes them unique. And I can see how this whole digital move could just be really helpful for all the people you're working with to understand what what they where they are in the production cycle and what the inventory is. It's cool.

SPEAKER_08: 1:10:30

Totally. It's uh it's about transparency and then just making sure that you know the that whole experience for the customer is seamless. Uh or as seamless as we can make it. Uh, you know, I'd be lying if I said everything went perfectly smooth, right? But uh we get last minute requests and changes, and you know, sometimes those things go off the rails. But um, you know, for the most part, for you for your general production, the things that we're making, like it's it's pretty much autopilot for everyone, uh, which has been good. And our customer acquisition as a result of that, it's never been higher. Um, you know, that first the first year called uh 2024 of operating as joint craft, you know, I think that was sort of our trust building phase where everybody was sort of watching are these guys gonna go into CCAA in three months? You know, what's happening here? They have a sustainable business that you've got to do. That's chapter two, that's bankruptcy. Yes. Uh but yeah, it's it's been good. Uh now coming into 2025 has been an incredible year, and 2026 is shaping up to be even better.

SPEAKER_11: 1:11:21

So yeah. I've been at the facility, it's wild. Well, thank you. Like it uh yours, your what you've done with it is wild. How overbuilt do you think it was when it was built for what it was built for, not by you? Uh it's definitely over 50% overbuilt, 100% overbuilt. It was when the money was running from the sky.

SPEAKER_08: 1:11:38

I'll give them a little bit of defense here. They built it as a grow first. Okay. So they had to put all the environmental controls of a grow in, and then they converted it into a processing facility. So I I it wasn't necessarily overbuilt for a grow. Fair enough. Uh it is very overbuilt for a processing facility, uh, which has really paid its paid benefits like for us. Uh the ability to like control humidity in the rooms. Uh when you're working with blood wraps and things that dry out very quickly, you know, we can throw a little extra moisture in there, keep the working time a little higher with the products. And uh it's been really beneficial. Um that being said, we have like 48 rooftop units on the roof of our building. One always is broken. So there's some downsides to it, too.

SPEAKER_11: 1:12:21

Yeah. Well, it's good to connect with you, obviously. And you're you were always one of our first uh friends when we were at Business of Cannabis and still now. So it's good to see you here in Las Vegas. Um as always. Uh safe travel's back. Good luck with Jointcraft, and uh yeah, we we enjoyed the conversation a lot.

SPEAKER_08: 1:12:37

Well, me as well.

SPEAKER_11: 1:12:39

Next time we'll do it live from uh Joincraft. Yeah, we should we should do it. That's a vibe.

SPEAKER_08: 1:12:42

Anytime. I'd love to make our sensory room available for you.

SPEAKER_11: 1:12:45

Talk about that, because that is really something.

SPEAKER_08: 1:12:47

Okay.

SPEAKER_11: 1:12:48

Speaking of overbuilt that you didn't overbuild.

SPEAKER_08: 1:12:50

Yeah, yeah, we didn't really. We built it ourselves. So we we took the front of our building and we converted it into basically this really funky lounge. Uh and we have a non-therapeutic research license from Health Canada. So our customers and and their partners and their key buyers and all of these uh groups can come into our space and they can consume cannabis legally indoors um under the regulated framework, and we collect all of the the feedback about the product through a digital platform. Uh and then we give you a report. Yeah, so it's wild. Uh it's set up kind of like a bit of a speakeasy. It's got a casino room with you know blackjack tape on it.

SPEAKER_07: 1:13:25

We're all yes, yes.

SPEAKER_05: 1:13:29

It's uh it's a very cool environment.

SPEAKER_11: 1:13:31

And it's called the sensory room. That's a that's Hell Canada's name, isn't it? Uh no, no, that's what you call it. That's what we call it.

SPEAKER_08: 1:13:38

Yeah, yeah. They would I don't know what they would call it, but I guess like the tradition in the space for non-therapeutic research licenses has been like that white clinical room with the guy in the lap coat standing there with the clipboard.

SPEAKER_11: 1:13:47

An event.

SPEAKER_08: 1:13:48

It's like a nightmare. Yeah, yeah. It's like, and if you want to not get you know feedback that says this experience has induced extreme paranoia, right, right. How do we take some of that out of there? Uh so we just created this really working, you know, fun environment for everyone to come into, but I'd I've felt for you guys to come by. This is amazing and uh come see yes.

SPEAKER_11: 1:14:05

It's also like a real industrial zone. So you walk into like an industrial building, and then you're like, oh my god, this is like the best basement ever.

SPEAKER_08: 1:14:11

Yeah, we've got the front room done the last time yeah.

SPEAKER_11: 1:14:13

I don't know if it was done, but it was like it's done now. We did research in there. Yeah, much more research than follow up. A lot of research. Yeah, so much research. So much research. Great. Thank you to everyone. Great, thanks. Yeah, that was great. Thank you. That was great. That was John Prentice from Jointcraft. Um, it struck me while John was talking that the three people we've talked to, edibles.com, like they were like, we're not gonna have our own brands, we're gonna focus on what we do well, which is e-commerce delivery, e-commerce delivery. Vaughan, they were like, we do retail, we do retail in Canada, we're gonna take that and extend it a little bit to the same thing in Germany. And John talking about what he started doing and then focused on the approval that like the focus of our conversation so far has been like focus.

SPEAKER_10: 1:14:55

So now you gotta grow her.

SPEAKER_11: 1:14:58

No, no, I uh no, we got Chris, he's a journalist.

SPEAKER_10: 1:15:00

Oh, okay.

SPEAKER_11: 1:15:01

Yeah, yeah, yeah. Take the lights. He's growing words. Do you guys know Chris Kasakia? You know Jeremy. Great to see you, Chris. Nice to you. Mark, nice to meet you.

SPEAKER_09: 1:15:12

Thank you. Good to meet you.

SPEAKER_11: 1:15:13

Chris, hello. Good to see you. Is it like a homecoming for you?

SPEAKER_09: 1:15:16

I guess it is in a way.

SPEAKER_11: 1:15:19

Chris, you used to write for MJ Biz for uh not an insignificant amount of time.

SPEAKER_09: 1:15:23

Yes. Uh three years full-time covering national retail and various other beats, and I was been doing freelance with that with them since 2019-ish.

SPEAKER_11: 1:15:34

Yeah. Yes. Good old days. Indeed. Although 2019 had a vibe.

unknown: 1:15:38

Yes.

SPEAKER_11: 1:15:38

That was uh downturn vibe.

SPEAKER_02: 1:15:39

There was the beginning of the end.

SPEAKER_11: 1:15:41

Yeah.

SPEAKER_07: 1:15:41

I want to dive into what you were just saying. Yes. Because so we've been talking about these businesses that are focused, but yet, I mean, I think we also need to be real here. Like, vertical cannabis companies are still ruling the US broadly. Like, and I would say that I would have said that less before I saw the new licensees that were just um unveiled for Texas, which is the same, the same, you know, six companies that we see over and over, uh, many of whom are public and who are vertical. So if if yes, there is this kind of cannabis 2.0, 3.0, whatever 0.0 we're in, that are these very focused uh companies, but then the old vertical companies are are still getting new licenses and opening new markets. Like, what what is the future in terms of vertical companies versus focused companies? And I'm curious of what you're seeing and what everyone thinks.

SPEAKER_11: 1:16:38

I would say because they have the money. And they could they've done it before. That would be my sense like and the regulations, right? It's not because it's a good idea, it's because it's the regulations that, especially in Florida, like this is what it is. Yeah, right in Texas, it's gonna be the same. I think that's at least my sense of it.

SPEAKER_09: 1:16:53

And you've also seen companies that have been vertical the whole time actually start to um you know get out of some certain certain sections or certain states. So you're also seeing, you know, some you know getting rid of some assets too. So I think it's kind of a mixed picture, like everything in cannabis, nothing is a straight line. You know, I think you see a little bit of everything there, and everyone's obviously trying to find this right mix really to maximize efficiencies because that's really kind of the name of the game right now in terms of really just viability and and long-term growth for sure.

SPEAKER_10: 1:17:25

So you bring up viability. What about the tax bills that they all have with the federal government? Like, is that going to come up in their viability report as well?

SPEAKER_02: 1:17:34

You need the money they're borrowing from the federal government.

SPEAKER_10: 1:17:36

Yeah, yeah. It's a great interest rate.

SPEAKER_02: 1:17:38

Well, GTI is paying their GTI.

SPEAKER_11: 1:17:41

It's the anomaly. Yeah. Everyone else truly's Jeremy was writing about it.

SPEAKER_10: 1:17:46

Yeah, they're they have, I think, what it was 600 something million tax liability on their balance sheet. I mean, not the way I would run a business. But uh yeah.

SPEAKER_05: 1:17:56

It's a bet.

SPEAKER_10: 1:17:57

But like are the Texas regulators just gonna like look past that and like, oh, they're a good company? Like, shouldn't that wipe out everyone bet GTI?

SPEAKER_07: 1:18:06

It does. Now we're gonna see what Texas thinks financial due diligence looks like on that.

SPEAKER_10: 1:18:11

That's the whole list except for GTI. It gets like wiped out.

SPEAKER_02: 1:18:15

That'd be weird. Um, you know, I I mean thinking about yeah, I mean, you raise an excellent question there. It has always been sort of a a weird thing that canvas is one of those industries where um, you know, where every sort of step of the supply chain is integrated at certain companies, and it's like no other industry really operates that way. And um but you know, I think it is indeed driven a lot by regulation, but also I think it's I think the lack of interstate commerce sort of forces it more because once we have interstate commerce, the market will re I think it will resolve itself because then you will have production go to the lowest cost states. You know, other you'll either have the the again, the hyperlocal um sort of craft, but then everything else will be where is it cheapest to produce this stuff. And certainly once you have import, you know, from like the cut flowers, you know, don't come from the US anymore, other than very high-end stuff. So I I think it's it's it is driven a lot by the lack of interstate commerce, has sort of forced that more just from a supply chain perspective.

SPEAKER_07: 1:19:18

Yeah. And what Chris, you were saying about the spectrum. I mean, I think there's been, I think it's Boris Jordan at Care Leaf has always said that they would would plan to break off part of the company at Dembrand.

SPEAKER_03: 1:19:27

Right.

SPEAKER_07: 1:19:28

Different triggers of things going on. And I've I've heard exact secrets say similar things. You know, the brands would go here and the retail will go here. Uh, and but it it hasn't happened. No.

SPEAKER_02: 1:19:38

Yeah. The r I guess G GTI did sort of pawn off its its uh brands to rhythm and s a little bit of that. You know, partly also to give the rhythm more of a purpose, but you know, but it's um but it but they sucker, I mean, so it GTI is doing that a little bit to a certain extent. That's a good point.

SPEAKER_07: 1:19:55

And paying their taxes.

SPEAKER_10: 1:19:57

Chris, I wanna I wanna pull back a little bit. I wanna talk. About a topic that's near and dear to your hearts, and we can get through this quickly. Your and my hearts. Talk a little bit about how how is this about cannabis journalism? It is about cannabis journalism. Talk about how the industry has changed, right? You've been writing for MJ Business 2019. You said you've been coding this conference for six years. There are fewer and further of us in between doing the same thing.

SPEAKER_09: 1:20:22

It is so emblematic of what is going on in the space in general. No one is immune to what everyone has kind of felt from an operator standpoint, from a grill standpoint. There's no doubt it is filtrated into the media side. You know, there's been a carnage the last two years, I would say we've lost, you know, major publications, um, green market report. We've lost so many national reporters. We are down to a handful of really national and international cannabis reporters, that that is their job to cover the industry, which is just, you know, it's just so sad on so many fronts, you know, and I understand that businesses are having a tough time because we need them to support journalism and to support media outlets in a lot of different ways. And I know that we just don't have these big companies that are, you know, taking out advertisements, sponsoring things, you know, even this is kind of interesting. This this you know, this year I've noticed, even on the party front, we're seeing the first time where parties are charging people to get into the party, which this is another iteration of what is going on in the cannabis industry, where now even that segment has become so saturated, you know, where now everyone's trying to get squeeze out anything they can out of the industry. And it's unfortunate right now what is happening in the media landscape. Um and I do appreciate what you guys are doing. Because honestly, if we talk about media, there are very few outlets out there that are doing it right, doing what they're supposed to be doing, cover the industry, how it's supposed to be covered without you know this pay-to-play, um, unfortunately, which is so much underneath so many of these kind of media companies that are now, you know, names that we hear about constantly in this space. Right.

SPEAKER_10: 1:22:02

Yeah, I mean, it it's always a fine line, right? I mean, I think you bring up a really good point that the media needs the industry and the industry needs the media. And for some reason, not for some reason, I mean I know what the reasons are, but it's getting severed a little bit, right? Um can you talk a little bit about how when you talk to sources, like what are the real impacts of the lack of coverage on the industry? Well, I think outside of cultivated, of course, who's doing a great job.

SPEAKER_11: 1:22:24

Yeah, absolutely. Um brought to you by Singlemans.

SPEAKER_09: 1:22:30

Yes, personal biases uh uh aside here, but you know, you're first of all, the stories that come out um nationally are from mainstream media outlets. You know, if you look at these stories, they are almost always negative in tone. Yep. Um a lot of times they're completely one-sided stories. A lot of times they are missing major facts or just complete misinformation pieces. A lot of times there's hit pieces. Yep. Um, so you're not getting the industry's perspective really at all. Um, reactionary is kind of how where the industry plays in most of these national stories that we see, you know, hit hit hit the wire for various publications across the country. Um, so you're not getting an insider's view, first of all. You're getting like, you know, as as daily newspapers, because I I write for some still, you know, conflict kind of leads the day. So, you know, that's kind of you know, the impetus on a lot of these stories is where is the conflict? Why is this happening? Not really kind of the underlying issues of why this is happening. Where did this come from? What is the evolution of how we got here? You know, you're not seeing very nuanced pieces, you know, you're seeing very kind of on the surface stuff. And not only that, you know, if you go to individual marketplaces, you know, operators are just not getting the information that they need from you know, vetted, reliable journalists that, you know, again, because we've had this carnage going on, and you're leading it to really the daily newspapers to cover their markets, you know, individually, we know what those kind of stories are going to be. You know, again, they're going to be tilts certain ways, they're not going to be taken from an industry's perspective. So you're losing a lot of voices here. Um, and not only that, when you don't have industry coverage, even in trade group coverages, you know, it's hard for brands and for companies to tell their story because there's just not enough outlets out there to tell them. You know, so again, you know, you're limiting voices in the space when we all should know that we should be amplifying more voices, get more diversity in the space. You know, there's a lot of trickle-down kind of effects here that you know, that unfortunately is what we're seeing here. And I don't know how this is gonna reverse itself without federal movement, which is the you know, the crux of so many conversations we have. Without federal movement, how the hell are we gonna build momentum again? You know, it's just very difficult to see you know how we're gonna reverse course.

SPEAKER_11: 1:24:42

Yeah. Well, it's like um, both in the journalistic and media perspective, but also the businesses and the industry overall, is like waiting for these inflection points, which are at some point and it could be 10 weeks or 10 years from now. Like it's like the like a lot of people are waiting for a lot of things to happen on some timeline, which is a question mark, and that is really hard to do, but or or and um mature industries of alk, food, ag, whatever, like eventually they do have industry publications, multiple of them, um, covering an industry from various perspectives, doing deep dives, like like I think it's it's a cycle, it's just this cycle is longer because it's this the road is unclear and on a timeline that is uncertain.

SPEAKER_09: 1:25:28

Yeah, and it's very difficult to kind of get in the game from a media standpoint and make it economically. Okay, we can attest to that. Yeah, I mean, you can try all these different models sub stack, advertising, paid media. You know, it is so difficult combination. Of course, everyone is kind of doing this combo play. Yeah, and I think, you know, again, it's like this vetting out period of who's gonna be the ones left standing, you know, unfortunately. And and this conversation holds to operators too. I mean, I feel like some of these conversations are talking to different constituencies within the industry, and everyone's kind of dealing with you know various pain points along the line.

SPEAKER_07: 1:26:07

So one thing that we see with our podcast is pitches from PR people um pretty regularly, and they're getting far too many. Yeah. Sorry for our PR friends. I mean, that's that's kind of what the question is about. Is like so the PR model is like in general, you know, companies retain PR companies for a lot more than it costs to be a monthly subscriber to one of your publications, and um nothing there, and they're going out there and pitching stories, and so they're driving a lot of the narrative too that we're seeing in the news because it's just the easiest thing to do, as opposed to um investing in investigative journalism and and really like news gathering. But and I I mean, I I want to know from your guys' perspective as journalists like what are PR people is that good for the industry? Do we need them to be keeping the stories moving? Like if you're an operator listening to this, yeah, should you be paying PR people?

SPEAKER_10: 1:27:05

I was gonna I was gonna check for how many viewers we have before I speak candidly. Um, and and Chris, I'll I will let you chime in here. I I will say two things on that front. We're vastly, as journalists, we're vastly outnumbered. It's been that way my entire career. You know, it's like if I have 20 PR people pitching me, like yeah, I'm not gonna read it. It's it sort of becomes like a news feed more than becomes an actual one-to-one conversation. That being said, right, um, there are so many brands, like we are doing a daily newsletter. At some point, to get in front of us, you do need some access. And it's really hard to gin that up yourself. But I think the alchemy is a bit off right now, I would say. That the disparity between the number of working journalists and PR folks in the space is very off, and like there's no possible way we can cover everything that everyone is getting paid to pitch on. Um and so so to soapbox for a second, I would say one thing I think a lot of PR firms can and should be thinking about doing is supporting media companies more directly. I understand there's confident conflict of interest problems around that, but um, if they were to sponsor us and to help us hire more writers, pay more writers, um, that would make the ecosystem a lot healthier, I think.

SPEAKER_09: 1:28:17

And I think also, you know, PR companies have also not been immune to what is going on. If you look at the biggest ones that have the most accounts or have the most, you know, staff, they have also been laying off you know, staff again the last two years. So again, you you think that these companies that are, and some of them obviously have you know some of the the biggest kind of clientele, highly recognizable names, but again, they're going through the same thing. I mean, they have flashed their staff across the board almost every single one. Now, most of these bigger PR companies are like five people now, right? You know, right, you know, so they're they're all you know, so again, and not only that because there's less publications, you know, there's less places that's true. So you're consistently seeing, you know, the same pitches again and again from the same type of people, you know, and it's and it's difficult to kind of you know get to really good stories when you know you're relying on that type of thing.

SPEAKER_11: 1:29:08

And I think I think there are probably a lot of a lot more stories from smaller companies that are either not publicly traded or aren't having repair from that are just like they're an operator that I had never heard of. I'm not even gonna say it because it's gonna sound like I'm an idiot, but like actually in three or four states, I assume they're profitable, they keep their head down, they do the work, they just don't promote themselves because it doesn't serve them. They're in the business of doing the business. Not selling stock, not increasing the share price, doing the business of doing the business. And they don't they don't need the they don't need the PR, they're just doing the business. Right. Yeah. Well, and keeping and not spending money on marketing. Right. That's right. They don't need to right there. If they are, they're spending it directly to customers who they know are shouting at the door, and it's the same 20% of the customers that are buying up, you know, 80% of the products. Like they know the business way better than we do, and they're doing it.

SPEAKER_07: 1:29:57

So the struggle is real. If if publications like the Wall Street Journal and the New York Times keep publishing stuff that is not good for the industry or straight up misinformation, uh what's your guys' advice on like who and how can we at least work with those groups better to stave off that level of misinformation?

SPEAKER_09: 1:30:15

I think when you know, because I've done a lot of different types of writing, I think um, you know, op-eds, I think a way to combat some of these stories that are out in certain markets that are usually pretty amenable to op-eds, especially they're from you know, uh highly placed executives or you know, industry insider type people. I think that's that's certainly one valid, you know, option for for folks if they think they're on the wrong side of a certain issue. Um and I I think you know, these reporters are open to to talk about the industry, but again, I think you need to find really some interesting nuggets that are not generally known out there to general readers of kind of why is why is weed important, why is this industry important? And I think that kind of gets lost in a lot of the conversation because we breathe this stuff every single day. But I a lot of the just general audience doesn't know the intricacies of you know market dynamics in certain states. So I think some bigger kind of ideas, you know, I think would probably be helpful uh in the space. And I think you know, any type of anecdotal stuff from people of how you know the plant has helped them get through certain I think really just personal stories are incredibly important now. Um, and I think that's one thing that big brands kind of lack right now is kind of just that personal storytelling. So I think there's certainly, you know, some uh some paths for folks.

SPEAKER_10: 1:31:36

Yeah. Chris, I want to talk a little bit about what you've written for us this year. Um you've written a lot of really good stories for us. I think you know, the two most recent ones are around product inversion, the Omnium scandal in New York, and around the hemp band. So um, why don't we start with New York a little bit? What did you learn in reporting that story? And if you could give the viewers who aren't super familiar with all the details.

SPEAKER_09: 1:31:56

So basically, a manufacturer in uh upstate New York basically got charged with inversion, essentially bringing in um untraced, untracked product into you know New York's regulatory system, even though New York technically does not have a track and trace requirements yet. Yes, yeah.

SPEAKER_11: 1:32:17

They've been trying to roll out well, BioTrack and then we may have.

SPEAKER_07: 1:32:21

It's not that hard.

SPEAKER_10: 1:32:22

It's a shame that no other state has this.

SPEAKER_07: 1:32:26

Nobody's ever done it before. Who could have thought that this might be a thing?

SPEAKER_09: 1:32:29

So it's a little bit quirky just on the offset in general, and now you know there is allegations at least from the regulators that you know they essentially leased out their facility to some big name brands um that we've all heard of before, you know, SDZ MPs. Um, and they basically use these facilities, you know, and kind of kind of borrowed their license you know, in accordance to New York rules, um, is against the rules. So now you have basically this uh you know that this aftermath of what happens in these markets when you have these big product recalls, you know, a lot of times retailers are kind of stuck holding the bag literally of product, you know, so they have to quarantine the product. Obviously, they can't sell the product. And now you have this back and forth with the brand, with the processors, with the retailers, you know, getting this money back, which often, you know, a lot of times the retailers do get screwed in the process, especially you know, I've been covering the California market for many, many, many years. A lot of times these mass recalls, you know, end up hurting the retailers, big time or distributors, you know, because they're kind of caught in the middle. And you know, what what's really been problematic here, I think, overall in the New York market, which we've seen, is we've seen a lack of transparency from the regulators. And I think that's kind of you know, irked everyone kind of in the in the ecosystem because they have not been transparent of what they exactly want, you know, and especially during this recently. That was a euphemism. Yeah, and they have not been, you know, even uh informing the as the operators in you know due time, letting them know, you know, trying to get them to follow up, you know, they're often just uh ghosting, you know. So that's been a major, major problem in New York, which I think everyone is kind of just fed up with kind of what has transpired on just on the regulatory side. I mean, it's kind of been you know a mess from the beginning, but we've kind of seen a mess almost in every single state because they run this kind of similar pattern. You give out licenses, they almost always get litigated every single state. So I mean there's a certain you know a path that every single state follows. But because in New York was so, you know, everyone was so optimistic on this giant juggernaut, and now it's finally getting momentum. You know, we're seeing hundreds of retailer stores open, but you know, now what are we three years from when the first store opened, I believe. Yeah, I think just about three years. Yeah, I think it was right before New Year's. Yeah, yeah. It was like December 30th. They were trying to get it open. Yeah, they were trying to get it open. Is that what's still open? It is housing work. Housing works. Yes, absolutely. Um, and now, you know, it's so that's what's going on in New York, which is obviously kind of stunted, you know, a really good growth story because obviously we are desperately needing optimism and any type of silver line, and we are all seeking that, which is I think is why we talk about Germany and the and Europe right now.

SPEAKER_11: 1:35:01

Because we don't because we don't want to talk about Pennsylvania and Florida, right? Yes, we'll talk about that later. Stunts in the world.

SPEAKER_09: 1:35:08

Germany of the Middle Manic. The demand is there. So I mean, this is the interesting thing about every market. The demand is there and demand is growing. So I mean, we have you know kind of a lot of these dichotomies where yes, one side is going really, really well, but yet it it's not really reflective in kind of the overall kind of health of the marketplace. Right. You know, more people are go are are becoming consumers. Like there's certain trends that are just on the way up, and we should all be happy about those trends. But you know, does that translate into a healthy market? Not all the time. You know, it's it's a very kind of convoluted picture.

SPEAKER_07: 1:35:41

I'm I'm wondering if through your reporting you have some predictions about where this might go, especially because there is this whole reality of regulated cannabis watching watching unregulated illicit product and being very frustrated about about that not being enforced upon. And now we have in the regulated market a kind of a this big open-ended question about enforcement. And and for companies that spend a lot of time and effort trying to follow the rules, thinking that that's the path to stability and consistency and growth, um, when companies don't get in trouble and they don't follow the rules, I think it it sets this precedent that you don't actually need to follow the rules. Um I I wonder if you have any ideas of where this might go.

SPEAKER_09: 1:36:32

Well, I mean, it's kind of interesting. Speaking of the hemp ban, you know, which obviously was another gigantic story that uh, you know, that everyone's kind of dealing with. So I I met some folks from the Carolinas uh yesterday at a at a media event. And you know, hemp basically has a little bit less than a year essentially to who knows, I mean, change the law, um, you know, find another kind of ring uh workaround. Um, you know, there's a lot of different pontificating of what's going to happen. I certainly think that beverages are where the conversation is at right now. So if I was not making beverages, I'd be very, very concerned that that's going to be the carve out because it seems to be like the the big players are really kind of talking about that single line rather than gummies, tinctures, you know, any other products, you know, the THCAs of the world. You said it, I didn't say it. Yeah. But what's interesting? Speaking of language, though. Talking to these folks in the Carolinas, they've actually started raiding South Carolina in state agencies. They've actually started raiding hemp stores, even though technically it's legal there. You know, so I think we're you know, it just anecdotally we're kind of seeing some interest things. Enforcement, though, is impossible. So let's not kid ourselves. Like when they write these laws. I mean, I live in California when Newsom uh you know temporarily banned hemp, there was no enforcement mechanism. Correct. When he extended the moratorium, there was no enforcement mechanism. The feds, what they're doing now, there's no enforcement mechanism.

SPEAKER_07: 1:38:03

Yeah, so it just pushes the the good actors out of the market and it peeps the people that are willing to bring the law in the market.

SPEAKER_09: 1:38:08

Yes, of course. I mean, this is what it's it's been you know self-perpetuating in a lot of different ways. You know, is it's the same things we're seeing, you know, not as much because like the mushroom thing seemed to be blossomed two years ago, here actually, where you had mushroom companies actually big time sponsors. Now they're like, I don't know, disappeared.

SPEAKER_11: 1:38:25

Disappeared they moved they move into dispensaries in Toronto is what they've done.

SPEAKER_09: 1:38:28

Yeah, there you go.

SPEAKER_02: 1:38:29

I I would say that I think the um with the with the point about the um about closing the loophole and you know, and then the state you're I'm sorry about Newsom and and uh you know banning state level hemp is but it you're right. It doesn't the it doesn't you know the the core the hemp the smoke shop selling you know THCA flour on the corner, that's not getting shut down. But what it does do is it is it means that the um the the uh the alcohol distributors and retailers aren't touching it. I think that's that's where you see a lot of that of that wind just get sucked out because you know the southern glazers are just like.

SPEAKER_07: 1:39:06

So that's the worst possible outcome. Well what you just described.

SPEAKER_02: 1:39:10

Yeah, it's sort of like you've got two it's like, do you make it bad or do you make it worse? And so it's like, you know, and bad is I I don't mean that I realize it's a loaded word, but it's like how you know it's like it's it's you know, it's like neither outcome is the ideal outcome for everyone. I mean, how do you come out with a better outcome then?

SPEAKER_10: 1:39:29

We can come sorry, sorry.

SPEAKER_07: 1:39:30

Yeah, go ahead.

SPEAKER_10: 1:39:30

But we can come out with a better outcome. We we pretend that we don't understand nuance or the plan. It's like when it comes to the regulated cannabis space, we come up with these crazy laws of all this detail, but when it comes to hem, it's like well, save the children, ban it all. It's like, are you fucking kidding? Sorry, right? No, no, no, you can yeah. Um, I don't just I I don't disagree with you.

SPEAKER_02: 1:39:51

I totally agree with you, and that's where I was going with my statement. Because that there is there is a middle path there, yeah.

SPEAKER_10: 1:39:57

It's like I I just yeah, I encourage people to think. Like we can come up with nuanced laws that create access and and benefit from working with Southern Glaziers and Total Wine and all these things. It's just because people are concerned that it's not them making the money. Let's call a spade a spade. We're in Vegas, right? Yeah. Um, like that's what it's all about. It's all capitalism at the end of the day. And it's we're we have people fighting for their place in purgatory, and that's what they want to keep. Chris, on that front, we we just had Thomas Winstanley on this morning at General Manager of Edibles.com. He was very diplomatically preaching cautious optimism about what's going on. When you were reporting for us, um, what did you hear and what was maybe left in the notebook and not in the final copy? How are companies thinking about this?

SPEAKER_09: 1:40:46

Um well what's kind of interesting, one of the things we did I didn't get to in the story is that you have you know some companies working behind the scenes right now to line up legislation and rules in certain states. Yeah. With the idea is that they are going to address this at some point. Obviously, we have this clock ticking situation. Yeah. Um, but there is optimism, uh like widespread optimism that they were going to work out something. And and certain companies are actively lobbying certain states right now to get regulations on the books or at least ready so when you know there is a change on the federal level that a state will be able to open up, you know, sooner than than not. So that's so that's kind of interesting, you know, that we're not hearing too much about because I was thinking all these conversations, of course, are you know at the federal level.

SPEAKER_02: 1:41:37

I guess what's you know, I I thought about this, that that sort of thought though, and I I wrote a little bit about this, is is though you the downside is you're still is then all of a sudden though you you are now subject to 20 E and you can't cross state lines. And so then you're just like another, you know, you you're in the same purgatory as license can. So, like, how far does that read?

SPEAKER_10: 1:42:01

I was I was thinking about like an elegant solve to all this, right? It's like if if we have these regulated hemp markets like Tennessee, where they grow it and they have access to it. It's like, wouldn't a simple piece of legislation that does allow for interstate commerce between two legal markets, like wouldn't that one focal point be a big step forward that allows hemp and cannabis to kind of coexist?

SPEAKER_02: 1:42:22

It would be great. Uh, you know, no, and and I mean there's folks, you know, Adam Smith, who is now um running uh uh the marijuana policy project was he really pushed the um the interstate compacts for cannabis. Yeah, so very similar idea.

SPEAKER_07: 1:42:39

Well, and I think with what for that reason is is kind of nice, although I obviously I like a federal market and interstate commerce, but I'm not hearing uh any of these states that are talking about doing their own hemp laws try to create a dispensary only model. And I think that there's this is this acknowledgement from the the great hemp experiment that we've been living that more open and traditional retail is is worthwhile for a lot of reasons. And we could talk about it from a business perspective, but I think there's a strong argument for uh the governments to look at it too as a revenue driver when they're trying to push taxes to be able to go into the places that the consumers already are and not force consumers into new, you know, highly stigmatized dispensary doors. So um I I would hope that if those efforts are moving forward, that there is a protection of more traditional retail outlets as a path forward for him. That that would be a win in my mind.

SPEAKER_09: 1:43:39

Yeah, I think that's gonna be it'll depend on what they look at and what products are gonna be included and what's not. Because if it's BEVs only, you know, you hear the conversation a lot. We want this regular, like alcohol, and you talk to the big players like edible arrangements, um and you know, they already are, you know, they already have mobilization on the lobbying fronts with the biggest alcohol distributors in the United States. They have, you know, they have lawmakers ear, which cannabis is not. Um, you know, and that's what you hear about is that we're gonna regulate it like alcohol, because you know uh age gating, you know, it they're already kind of the way the system is already set up, it's pretty much the three-tiered system like alcohol uses, producer, distributor, retailer, uh, at least for which has kind of been, you know, you know, the great one of the great successes uh in the in the hemp product lines. Uh that's also not only you know it's it's just so interesting. So HEP has been this like unregulated, widely unregulated product, but it you know, but D9 drinks have done probably more to normalize cannabis use than anything else.

SPEAKER_10: 1:44:48

Yeah.

SPEAKER_09: 1:44:49

Yeah. You know, statewide, nationwide, direct to consumer, social uh settings, you know, um music venues, the salt shed in Chicago, GTI is kind of a little operator within the salt shed. It's an awesome venue um in the city. You know, they sell uh drinks that I mean it's already being normalized in so many different ways, um, which is kind of interesting if we're gonna try to unravel all that too and just bring that back in the box.

SPEAKER_11: 1:45:16

I I texted German. We were in Nashville, yeah. Jeff and I at a bar at a at the listening room, like uh it's like a real place you go. Yeah, in a non-alcoholic section on the menu is THC beverages. Yeah, it's so close. It's technically not alcoholic. It is technically alcohol, but I was like, oh my god, the sky's not falling. I'm having one, nobody's even looking at me, and I'm in Tennessee, like this is better than I can get at home.

SPEAKER_10: 1:45:37

The the thing wrong with with beverage is is I think Chris, to your point and and Jay to your point, is that states and governments have the framework to regulate intoxicating beverages already. It's almost plug and play. I mean, there's certain nuances versus creating a dispensary model. And Newsom actually proved this because he claimed 99.5% success after that's exactly where I was going. No, no, that's exactly right.

SPEAKER_09: 1:45:59

Like, like no, no, he he he he did. Yeah, yeah, yeah. Right, right, right. Right. We're done here.

SPEAKER_10: 1:46:05

He did say that. So so the point being is that if you are if you are a red state, if you are a Texas, right, I think I think the chances now of pursuing a ballot measure or a state legislature passed regulation bill are are pretty low. But the chances of getting some sort of carve out for a low dose, five or ten milligram, 2.5, 5, 10 milligram hemp drive beverages in concert venues, in sports arenas, in bars is actually a pretty viable pathway. I think.

SPEAKER_09: 1:46:32

And I think people, when they talk about you know, this new number that they put out, I don't know, 0.4 or something like that, uh all all in fabinoids, you know, per product, you know, people are pretty happy that there is actually a number because they think that's networking.

SPEAKER_10: 1:46:46

Yes, now you can raise it. Yeah, move the decibels. Yeah, yeah, yeah. It's really easy. If you move it over one, these you have a market. I mean, like literally.

SPEAKER_02: 1:46:54

So how I I still go back to though, like, how does that is I think it though still fundamentally changes if you if you just have a state level uh you know allowance, it really though fundamentally changes the nature of the business. You can't you can't see it anymore because none of the common carriers will carry right, right.

SPEAKER_10: 1:47:12

The market.

SPEAKER_02: 1:47:12

Yes, so how you know it really fundamentally changes the whole business model and does that become economically sustainable? Well, if you know it sounds like a great idea on paper, but you know, does it actually pencil out? And I just don't know the answer, but it doesn't work for licensed cannabis.

SPEAKER_10: 1:47:28

Yeah. So I would I would guess. I mean, from from our conversation with the Levia folks who who recently bought back their business, like I I would guess that taking your product off of total wine shelves and going into dispensary will kill many businesses. Yes. I I I mean, just the margins get compressed.

SPEAKER_02: 1:47:46

But let's say you let's say you could sell it at the local grocery store. Sure, you know, in the within the state. How are you getting it to that local grocery store? You're not putting it on a southern truck.

SPEAKER_11: 1:47:57

Well, it's gonna be like a microboom.

SPEAKER_10: 1:47:58

Like, I see, yeah.

SPEAKER_02: 1:48:01

It totally changes the nature of the business. Yes, that's a great point.

SPEAKER_10: 1:48:05

The whole beer distribution network is is made up of regional distributors. Like California has three or micro.

SPEAKER_11: 1:48:11

You're doing like you're filling it on Safeway shelves.

SPEAKER_07: 1:48:14

Like, I think the bigger question is less about distribution and more about manufacturing because also because hemp drug beverages have benefited from being able to have scaled manufacturing and scale to you know, ingredient production and that's they're also much easier to make, yeah, too.

SPEAKER_09: 1:48:28

Right. You know, I mean you can make them in a couple of days, you know, where you know it so even the time to market is so short.

SPEAKER_11: 1:48:35

What the fuck are we doing here then? What are you doing here?

SPEAKER_09: 1:48:39

I ask myself that all the time.

SPEAKER_11: 1:48:41

Yeah, Ben, what are you doing here?

SPEAKER_09: 1:48:42

And it's really just like the emulsifier that they throw in there. So it's not a huge undertaking to make these type of tricks. And essentially canning lines are already there. I mean, you look at breweries. I mean, this is what's so interesting again, these cottage industries, you know, the the uh manufacturing partners that have been set up here, it's given a lifeline to so many breweries across the country, which are dealing with their own issues with you know growth problems because of you know the alcohol definitely on the low end are declining. So it's giving them you know a new runway for manufacturers too. So again, to like close up, there's so many different constituencies that are really benefited so greatly because of had drinks. You know, I I hope that you know they somehow find some consensus because then it's so difficult because you know, big players, little players, you know, consumers, big elk, consumers, you know, consumers, uh, you know, it's gonna be hard to find a consensus because there's so many different kind of agendas here at play. And and not not only that, you know, drinks have not done well at dispensaries.

unknown: 1:49:43

Yeah, right.

SPEAKER_09: 1:49:44

No one dispensaries do not want drinks. They're a you know, they're a bulky uh item, they take up a lot of space, they're heavy, you know, it's you know, the the the margins are not good, you know. So it's another thing. They did they haven't performed well.

SPEAKER_11: 1:49:57

It's it's interesting, and I wish we had kept Thomas Wynne Stanley here all day because when he was at Theory Wellness, ironically, um, they actually I think they even used MJ Biz as an announcement point. Yeah, yeah. Opening up a beverage only dispensary adjacent to one of their dispensaries because they realize that people only buy drinks in a drink sort of venue as opposed to like in a dispensary. So they actually open up a do I have this right?

SPEAKER_07: 1:50:19

Yeah, no, that's exactly right.

SPEAKER_11: 1:50:20

Yeah, yeah. Like a beverage-only dispensary in Massachusetts.

SPEAKER_07: 1:50:23

Well, and I I talked to because we're at MJ Biz, so we're all talking to everybody that we can talk to. And I talked to a small chain retailer of California yesterday that I ran into at the chandelier bar, and um and everyone was already talking about hemp. And and so I said, you know, what do you think? You saw how competitive did you feel that it was when there were hemp beverages being sold at Total Wine a couple miles away from your dispensary? And this guy said, It really wasn't a big deal to me. I really didn't care. I I do think that that hemp beverages are opening up the category. And he said, and now that they're now that they're banned, I haven't seen an increase of beverage purchases in the dispensary. Right. And he said, and to be honest, that most of the people that come to the dispensary to buy THC beverages are alcoholics that no longer are drinking alcohol anymore. And it's like people are coming to buy these beverages almost medicinally. Um, and it's and it they're coming specifically for them, and they're sort of outliers. And and so going back to like what you were talking about about telling the stories of consumers um and the stories of business owners, I think we need ambassadors to be telling the story of who are the people that are buying these beverages. And if if it is people that have chosen to be sober from alcohol, like that's an important story that people should be hearing. That's like a real public benefit.

SPEAKER_09: 1:51:43

Absolutely. I mean, you you're it was so interesting you're finding such a different consumer base between all these different types of cannabis products, you know. We especially when you're talking about have drinks and you know, traditional, you know, edibles, you know, uh concentrates. I mean, just completely different. But even who goes into the retail stores, you know, you're skew you're they're skewing, you know, 35 to 45 is like your typical dispensary shopper, you know, that goes into the store. So I mean there's there's all these kind of interesting, you know, just dynamics playing out in the consumer bases, you know, and how to reach down the best way possible. Of course, you have all these uh roadblocks, of course, with advertising and marketing and et cetera.

SPEAKER_11: 1:52:26

But isn't it funny that like it just happened, right? I mean, this is like a lesson in capitalism, really. Like things can just happen, and then there get to be a place where it's a billion, multi-billion dollar market because someone I'll use your word, loop like loophole, mistaken loophole or intentional loophole, like people just filled it. Yeah and they fill it efficiently, they fill it effectively, sometimes they fail, sometimes they succeed. And in markets where there's not regulated cannabis, like it's fucking exploded. Yeah, like it really tells you what consumers want.

SPEAKER_10: 1:52:56

Yeah. I mean, I it's it's funny you say that. Like I had a NRA brought up business school, so I'm gonna do the horrible NBA thing and bring it up. But but are you gonna use PowerPoint? Yeah, I have a slide deck ready. I was just gonna say, I I had a professor who who told me that that you know, money is like a liquid, it expands to fill an available opportunity. I think the hemp, the hemp, I thought that was an interesting way to think about it, and the hemp loophole is exactly that. The the money came in, it filled the opportunity, and as long as that opportunity exists, it's gonna keep filling it as long as it's profitable to do so.

SPEAKER_02: 1:53:25

I think the the challenge for though is that it's hard to build a sustainable industry on a loophole. Yes. Yeah. And because you always had that risk. You know, unless with licensed cannabis, we we know it's still, you know, it's like, but you've always had that risk. And so, you know, to me, I, you know, I I again as as conflicted in my mind about what the path is and what the answer is and what's right, and what you know, what should be, what could be, um, you know, is to me, the answer is not, you know, restoring the loophole. Like, because that just puts everything back to, you know, sure, sure. The answer is coming up with, all right, then do it right. You know, and write right as in do it the way that is that of create actual legislation so that investors and partners can uh can appreciate that this is not going anywhere. Instead of always being on sort of research.

SPEAKER_10: 1:54:18

I I take a little bit of a different perspective of it as in and I might be in the minority as like an operator dabbling in in the hem space. Um I don't think it was ever about establishing a viable industry on a loophole. It was about getting access to the consumer and creating that moment of inertia. And sure, where we're at as a collective industry would benefit from an extended loophole, so to speak, is further access, further capital. And those are the two things that will move the needle when it comes to legislation. Like we've talked about the pseudo-democracy that we live in and capitalism. Like those are the two things that will move the needle capitalism when it comes to the policymakers. Like we've seen like how cannabis just keeps falling down to the bottom of the priority list when it comes to these conversations. The only way to keep it up at the top is capitalism and the people. And so that's where a prolonged loophole would benefit. It's not about building a sustainable industry on top of it, it's about creating more access for longer.

SPEAKER_02: 1:55:20

That that's fair. And I don't know that my my thought and your thought necessarily are completely at odds. I think there is some overlap there. I will say though, that a lot of the conversations I remember having in 2018-ish, when money was still raining from the sky into the license industry, was was from some of the big big MSOs was we don't want legalization just yet. We want to have our, you know, we want to have our um our exclusivity to get, you know, share. And, you know, and and that just look how that worked out. Well, we don't even see that right now.

SPEAKER_10: 1:55:53

Like a bunch of them launched their hemp initiatives, they got started, they were a little bit behind. If you gave them another year of doing that, they'd be more invested and more open to it just because they would have their foot holding. Right, right.

SPEAKER_07: 1:56:04

And a lot of a lot of what's happened with alcohol stepping in to lobby for prohibition of hemp is because the brands aren't in it themselves yet. They're behind. They want more time to figure it out themselves.

SPEAKER_10: 1:56:16

Right. And yes, yeah.

SPEAKER_07: 1:56:19

I mean, there's a couple, but but the the the other liquor brands. Yeah. Like these there's a number of companies that are just like, crap, we're behind. So now we need to figure out a way to slow it down so that we can be in charge. Uh so it's it's the same old game of capitalism. It's like they're just using policy to try to create opportunities. Well, but yeah, it is about the kids. Well, but yeah, what yeah, exactly. What about the kids?

SPEAKER_10: 1:56:44

That's that's right.

SPEAKER_02: 1:56:45

I don't know that that's a hundred percent fair because I it is. No, no, no. Well, that's just that's you know, I mean, you know, the the the alcohol distributors like to say that the free tier system is important because of safety. You know, that it's like that only goes so far. And I think see the the fair there is a fairness side to this, to the argument, which I think is legitimate, which is that the alcohol industry is very um uh uh bound by tr by very strict trade practices, by very strict labeling laws, by very strict uh advertising laws, which the hemp the hemp beverage industry and ever and the rest of the hemp industry has just not been subject to. Yes. And you know, and I recognize that part of the, you know, so the and so what what you know, if it's gonna work, the only way the alcohol industry is ever gonna say, all right, we're willing to try to find some compromise here, is if, you know, is it it can't be par, you know, you can be putting THC in an energy drink. You know, you can't be saying this is good for something.

SPEAKER_07: 1:57:51

It's the same argument that the MSOs have. That's not fair. We've invested in all of the compliance. And we have all these.

SPEAKER_02: 1:57:56

And we have all the groups of it. My point is that you can't ignore that.

SPEAKER_07: 1:58:00

Sure.

SPEAKER_02: 1:58:00

So is it is the is the is that is that that is a fair argument.

SPEAKER_07: 1:58:06

It's unrealistic to think that forever that you could operate with. Correct. Is that is that that's where the compromise needs to be.

SPEAKER_10: 1:58:12

But there's a lot of these conversations. It needs to be a metal crown. There's a lot of these conversations that are perpetual in the alcohol industry, separate from from him. And so what I've tried to tell people is that we're we're in the infinite game. We need to we need to clock a win so that we could enter that conversation and be a part of that conversation. This comes to like DTC, this comes to energy drinks. It's like those conversations are happening constantly. Like, wouldn't you like to be a part of the conversation? Like, right. I feel like we're yeah, we're trying to put all these stipulations into what progress looks like instead of just accepting that next step so that we can at least be in the same room as those conversations.

SPEAKER_02: 1:58:47

I totally agree with that. And that's why I, you know, I think it's it would be a mistake for the hemp industry to fight alcohol on this, because alcohol's not going to back down for that very reason. Instead, they should, you know, is is basically ought to be engaging with each other to figure out where's in middle ground we can all come to. That you know, is is is that is that because both sides have a legitimate rational argument here, and you know, and and they're not gonna back down unless there is some sort of middle ground.

SPEAKER_10: 1:59:14

My only correction is you say they, you mean we because that's the cannabinoid economy. And since we're talking about our fall, we all said it's like generally people are gonna benefit from from THC beverages getting on the mainstream shelves.

SPEAKER_02: 1:59:27

I I I say I say they because I I'm wearing my pundit hat, and that's not me. You can tell probably about anything. So yeah we're all high right now. Yeah.

SPEAKER_07: 1:59:37

Not not dance in the morning, I'm on coffee. Yeah.

SPEAKER_02: 1:59:40

That is it's just it's a very fair point. It's we're sorry, we just and we hijacked this this no yeah, that's great.

SPEAKER_11: 1:59:47

Well, this appears in addition to the focus part of the conversations that we've had, faps is really true.

SPEAKER_09: 1:59:53

Yeah, yeah. Yeah, we didn't even talk about you know what which I did a story with uh with you guys earlier in the years, is the VC movement. Movement on I mean again this is like one of these again. We're having so much problems on the capital side everywhere in the cannabis space. But yet D9 uh VCs are you know investing millions upon millions of dollars. I mean we until about three weeks ago. You know, so I mean again, do we you know that's another just aspect that really hasn't been talked about that much again? But this is one of the few you know avenues that folks are investing into the cannabinoid space, you know. And they've pretty much left the regulated licensed state markets. I mean, you know, it's it's almost impossible to hear uh you know funds, maybe about the you know, some of the biggest fund managers. But I mean, beyond that, that you know, there is nothing. There, you know, there's not even talk of it. So this is just another aspect of you know this type of situation is that you know there are investors that are looking at these at the spaces, they are putting you know their money where their mouth is, millions of dollars into certain funds.

SPEAKER_07: 2:00:57

Well, that's absolutely shifted since since this federal policy shift. Yes, and and so now operators and hemp are subject to moving into the same kind of phase that so much of regulated cannabis has been used to for years, which is cash conservation and efficiency mode. And and it's unfortunate because it's at the same time there does need to be continued investment in policy engagement. I think it's hard for companies to justify all expenses right now. But at the same time, like this is not the time to uninvest in in advocacy to get the message out because it has to be on board.

SPEAKER_09: 2:01:34

It's an hour member. Yeah, right, right.

SPEAKER_07: 2:01:36

It's an interesting time for that.

SPEAKER_02: 2:01:38

Yeah. A lot uh I think a lack of capital has really always hampered licensed cannabis from doing proper lobbying. Yeah. They just, you know, it's it's the last thing they've money for. And so, yeah.

SPEAKER_11: 2:01:49

But or and the other industries we just talked about, that's where they put all their money. Yes. Well, yeah, protecting their moat, they're they're building bigger and bigger moats.

SPEAKER_10: 2:01:59

Well, and this I'll give it a quick plug. This is why we created the Coalition for Adult Beverage Alternatives to like bring together the conversation of alcohol with Kaba.

SPEAKER_11: 2:02:06

Kaba. See? Yeah, from our last conversation.

SPEAKER_10: 2:02:10

That's right.

SPEAKER_11: 2:02:10

Chris, sorry, this is an awkward transition. Chris, thank you. I appreciate it. We will see you, I don't know, an honor.

SPEAKER_02: 2:02:17

And thank you for all you do for the industry as we're for you. Thank you. Thank you, Jack.

SPEAKER_10: 2:02:22

Thanks, Chris, so much.

SPEAKER_11: 2:02:24

Keep writing. Yeah. We like you on this side of the hall anyway.

SPEAKER_03: 2:02:29

Just kidding, MJ.

SPEAKER_11: 2:02:36

Uh uh, we have one last guest. She's here. Uh, we're gonna talk more Canada, but I think she has lessons for everybody in the cannabis space, certainly on the retail side. I'm okay for now.

SPEAKER_07: 2:02:51

I'm almost ready for a bagel from our sponsor.

SPEAKER_11: 2:02:54

From our sponsor, Siegel's bagel mania. Um you're in the hot seat over here. It's not so hot. You're good. Should watch your watch your step. Yeah, she's got an official. You gotta hold the mic. Yeah, she's already been in the shift. We're gonna wait for um wait for Jeremy to come back. But I'm Jay, obviously. Mark. I sugnaki. Anna Ray, Ben, Elisa, right? I've pronounced it wrong before, but I know that. Elisa, I actually saw you uh and your family, and I didn't say hello, but uh because I was running for a plane last was it last week? Last Tuesday.

SPEAKER_07: 2:03:28

You're never supposed to admit that.

SPEAKER_11: 2:03:29

I know, but it was I have I've already admitted, I've already admitted it. Um, but it took me a while to remember because I haven't seen you in a while. Uh, and it was it was morning Thanksgiving travel, American Thanksgiving travel.

SPEAKER_10: 2:03:41

Uh time and place.

SPEAKER_07: 2:03:42

I I love that you brought that up because we're all at a conference. Like, how many of us are guilty in the last like even 24 hours of seeing someone that you know and kind of looking the other way because you felt a little antisocial at that moment?

SPEAKER_11: 2:03:52

A little, I will say every yeah, but I also went to a hockey game last night. We it was so you guys are so first of all, Connor Bernard.

SPEAKER_07: 2:04:02

So Canadians come to the US and and come to the Well, it wasn't just any hockey hockey.

SPEAKER_11: 2:04:07

One is that Mystery, two, Connor Bernard is in town with the with the Blackhawks, so you don't know who that is.

SPEAKER_02: 2:04:13

I know.

SPEAKER_11: 2:04:14

Oh, um, and he was incredible to watch, and also Mitch Marner now is on uh uh Vegas, and it's I think they like him here. It's hard to tell because they don't really understand hockey. All due respect to all you people who live here. Like it was a fun experience, and then the hockey starts and it gets dead quiet until like something riles them up again, like not hockey, but like the experience. Then they're all riled again, and it's like they don't understand what's happening on the ice, which is I guess is fine. Um, but the game was awesome. Connor Bernard is awesome. Uh Mitch Marner is as Mitch Marner as he was when he was in Toronto, like he's great, and it doesn't look like he cares. Sorry. Um, anyway, so it was great, but I saw a lot of people as a non-Canadian.

SPEAKER_10: 2:04:56

Uh are are there still a lot of fights in hockey?

SPEAKER_11: 2:04:59

Not these two.

unknown: 2:05:00

Oh.

SPEAKER_05: 2:05:02

What's the best fight I highlight for? I was gonna say, like, basketball in the 80s and 90s was great.

SPEAKER_11: 2:05:06

No, but I would say I yearn for the 76 Flyers for the Yeah, that's the fighting tune. But but I will say this it is the it is a golden age of hockey right now, and that's why I went to the game because Connor Bernard is like a generational talent and he showed a little bit. He's on the other. Uh yeah, but I will say Toronto. Um you opened up Kay's pot shop very early days. Give us the background about the shop because I have a bunch of questions about how you've stayed open, but also lessons you may have for other folks like you.

SPEAKER_06: 2:05:49

When legalization happened, they had a lottery. Yeah. And had another lottery, and it really didn't make any sense to us, but we didn't win the lottery. So when they opened up applications, we were like right on the dot. We had a lawyer, we got everything ready. We got in there, we rented a space, you had to lock down a space, we locked down that space, uh, paid all the the the money for all of the licensing. The world shut down and COVID hit doing. We really didn't know what we were getting into. As much as we tried to make a business plan, the lottery stores were millions of dollars a year. And that was like everybody was talking about how cannabis stores were like the golden ticket. We didn't think it would be that way when there were a thousand stores as opposed to twenty-five, but we really wanted to open a cannabis store. Kind of store that we opened was a little bit different from the norm. It's very much like a neighborhood hub as opposed to uh get in, buy a weed, let's upsell you, and get out. We have people that stop by every day. They want to chat, they trust our our selections, they want to know what they're supposed to smoke because uh we really invest in learning about our product and our menu, and we're just having fun with it. You know, we go with the owners or stoners. And and my husband is the elite tester. Yes, the elite stoner.

SPEAKER_11: 2:07:17

Oh you're joking about this.

SPEAKER_06: 2:07:25

And I always tell people there's nothing on the menu that we won't consume ourselves, and if something comes in that I don't like, I I make and smoke at all and I don't reorder. So they really just quality control is high because I'm not here to like make a million dollars. I'm here because I enjoy having my shop, which is okay. Um, and I enjoy being there. I spend a lot of time there, and I spend a lot of time with the community. Dog treats, everybody brings their dog in. I know everything about everybody. Like it's like the hub, it's like the convenience it's like cheers. Yes.

SPEAKER_11: 2:07:58

Well, yeah. I will say when I I came, I think it was during COVID. I feel like we were ma wearing masks, so like it it must have been COVID, although we've worn masks for chronic and related stage COVID. Yeah. Um but the this the the things you just described, you're saying them almost um, you know, it seems obvious, but like some of that is retail 101 that I think a lot of dispensaries and new operators are not in retail, don't know. But like the hub part being friendly, but the dog treats. The first time I was there, you're like, Yeah, we put dog treats out, and then people have to come by every time they're walking a dog. Because it is in the hub of an it is in a great location as well. But it and it it's like those things are um make a difference.

SPEAKER_06: 2:08:43

You know, it personalizes our store. Okay. And it's not a high velocity store in terms of like some of the downtown stores, it's in, it's out, it's a tourist spot. But when we first opened, the way the government rolled it out, they were like, March there, put your application in. You have to have lockdown uh a location in order to put your application in. Because it was like a I think it was four thousand dollars for the location license. But if you decided to change your location, you had to resubmit and you had to repay. Another form. But the worst part of it is you went to the back of the line. When we applied, so we got our RSA, which is the license to open for July, I think it was the end of July, and we ended up opening mid-August. We applied in March. It gave us enough time for build-out. It it was a bit of a long wait, and everybody had to pay rent that entire time that they were sitting waiting for their RSA. I was within the first wave of RSAs once they started reissuing when COVID happened. I know people that gave up after 16 months.

SPEAKER_05: 2:09:49

Yeah.

SPEAKER_06: 2:09:49

So 16 months of rent, that's just like it eats up all of your capital. If you don't have deep pockets, you're not staying. There were 22 stores within two kilometers of us. Yeah. That's like a lot of pieces of pie to split. And I don't know how like there had to have been a better process so that people knew, oh, I'm opening right next to another cannabis store. We had one kitty corner across the street, and then we have another one about seven or eight blocks east of us, and then we don't have another one west of us for about a a kilometer and a half to two miles.

SPEAKER_01: 2:10:27

Thank you.

SPEAKER_06: 2:10:29

Cannabis stores are more like convenience stores rather than um like you can't win by trying to price better. You can't you have to serve a neighborhood unless you're in a tourist neighborhood or like a real downtown hub. If and if you're outside of the city and you're drivable. My community isn't drivable because there's no parking. There's no parking in it. So you're serving the people that sort of live and work around you, and you just want to make sure that they're happy. But it's gotta for me, it has to be more genuine. I'm not looking on for ways to trick people into my store.

SPEAKER_03: 2:11:04

Okay.

SPEAKER_06: 2:11:05

You can do that once, but if you don't deliver with product and you don't deliver with an experience, uh they'll find somewhere else because there are still more stores along the way on all their walks.

SPEAKER_11: 2:11:15

So not not all of those 22 are still open.

SPEAKER_06: 2:11:17

I think that there are I think that there are seven.

SPEAKER_05: 2:11:20

Oh wow.

unknown: 2:11:21

Okay.

SPEAKER_06: 2:11:21

So right. I mean that's it was a game of deepest pockets. And you know, I I think that a lot of people when they renewed their license the first time were like, this is really expensive. I'm getting out, I'm cutting my losses. We knew that we had a steady clientele, we were doing okay. And we knew that if a few stores closed, that it would be reasonable and we're happy with what we bought. We really we really enjoy the store. Yeah.

SPEAKER_05: 2:11:50

Nice.

SPEAKER_07: 2:11:51

Fortnite are um well, so yeah, I was so you know, I've I've worked mostly in the US, but in lots of different retail markets and licensing and things like that. And and it's actually very common, unfortunately, that there's like oversaturation of retail stores in certain areas, especially in places where their cities or the state are try trying to foster growth of small business, and they'll do some sort of incentivization program, be it a social equity program or a program for veterans or locals or whatever it is, and they'll give out more licenses than the community can support. And um, I was recently in New Jersey, I think Jersey City is an example of this, where there's like 50 stores. Um, San Francisco, which is in my home community, did the same thing, way too many stores than the city can support. And um, so you have stuck it out, which I hear a lot of operators in these cities talk about of like, well, if just that store across the street just closes, I'll be fine. Um, but you also talked about customer service. And and I think there's a lot of lessons there uh for these stores that are in oversaturated cities, and and you make it sound very natural and authentic about this customer service experience and retaining customers. But I think there's probably some kind of magic to it because you're here in Vegas, and my guess is that your store is still providing great customer service um while you're here. So, what is that? Like, how do you take the passion and the authenticity that you have clearly for the store and the community, but get other people to have it also and to pass that on?

SPEAKER_06: 2:13:32

You know, I have to say I've loved every bud tender that I've had work with us. And I always we always talk about this. I can't, I can always teach you how to bud tend. I can teach you about weed if you don't know more than I know what I like to smoke, or I like my edibles and that's it, that's fine. I can't teach you how to be awesome.

SPEAKER_05: 2:13:52

Yeah.

SPEAKER_06: 2:13:55

Teach that. I can teach you how to sell weed and I can teach you about cannabis products, and I so I'll hire people based on personality who don't have to have experience, but you have to have a passion for it. You have to have an understanding of it. I've had I've had bed tenders that love their CBD and don't use um anything psychoactive, and that's fine too. Um what I don't like is if you're just coming in and you're just sitting there for your shift and just waiting to get out. I that's not that's not what the culture is about. Before we had um before we had stores, we had dealers. And you knew the dealer you like to go to, and you knew the dealer that was gonna keep you in your living room and people. That was my least favorite. Um the whole of the deal. Um in a store, I've like we don't have a lot of turnover. Our bed tenders like staying, uh, we treat them well. Lots of sampling, lots of, you know, little things. But they also are those people that really enjoy the community. Their job isn't to pack shelves and and and make sure everything's perfect and upsell and look at numbers. Their job is to keep up with the customers coming back because they enjoy being there. And when someone doesn't enjoy being somewhere, you can see it. If someone is like racing to get back on their phone after they've given you and gotten you out of the door, then that's not the right person.

SPEAKER_05: 2:15:28

Okay.

SPEAKER_06: 2:15:29

But we've had great luck. And I think that our longest, we've been open five and a half years, and she's been there four and a half. And then our next full timer's been there four, and then and then three. And then we have a couple of part-timers that people in the neighborhood need a job. And like I on Hulk, we have we don't have a lot of people in the store at the same time, but we have a small staff, and and on haul, people love working in the store. I don't know. I get asked a lot by our our our customers, and occasionally I'll allow them. You know, I'll teach them that how to do this. And if there's a shift someone doesn't know what they come in, they're not regularly on the schedule, but they're super happy to come in once in a while.

SPEAKER_11: 2:16:10

Sure. So that's how we do. It is the also the exact opposite of many of the shopping experiences that I'll call them the bigger chains that have survived in the Canadian landscape, some of which were here today. And great for them. But like it is the exact opposite of what is most the most common experience now of buying reason. Certainly in Canada in Toronto, yeah, but even here, like Vegas.

SPEAKER_02: 2:16:33

I mean, Vegas is the same problem with there are too many dispensaries. Yeah. Um, and it is and it's very easy to go to another store because everybody tries. Um, and so and so it it's very hard to for a dispensary to distinguish itself.

SPEAKER_07: 2:16:48

So everyone leans into promos all day long. Well, yeah, it's very much promos. Um that's the promo environment that you enter.

SPEAKER_06: 2:16:58

Dog treats.

SPEAKER_10: 2:16:59

Yeah. Dog treats. Dog treats.

SPEAKER_06: 2:17:01

Really honestly, like we waited for five months while building our shop, and and we have we have a dog. And so Sean would always be sitting out on the bench smoking a joint, and when dogs would come by, he'd they'd he he loved playing with the dogs, and he'd start keeping dog treats on him for these dogs. And when we opened, the dogs were looking for him on the behind. Brilliant. We have them in the store, and we also have a container by the door so that because I've seen dogs drag their people across the so I don't want people to feel they have to buy weed every time they they walk by. It's not bad if they do.

SPEAKER_10: 2:17:37

Yeah, but while they're there, yeah. And it's like use Starbucks bathroom. Yeah.

SPEAKER_06: 2:17:45

See, but we realized that it was it was great for the dogs, great for the people. Some people use it as an excuse to come in because some people still need an excuse to come into a weed store. They feel bad that they want to buy weed, but they want to buy weed. So come in, get a dog treat. Okay, look.

SPEAKER_07: 2:18:01

I'm I'm obsessed with this idea. What are some other non uh non-margin negative ways that you inspire the community to come into the store?

SPEAKER_06: 2:18:12

So there are a lot of um board games and movie. And we have like a nice seating area, and that catch is the most comfortable catch. I have fallen asleep while I'm ringing.

SPEAKER_05: 2:18:24

Better than this one. It's the one.

SPEAKER_06: 2:18:29

There's a Scrabble game on the table, but there's a ton of board games. Well, if you want to come in and hang out, um, I'll teach you how to roll a joint. You don't have to come and buy a weed, but I will teach you because I can't believe how many people don't roll joints.

SPEAKER_11: 2:18:40

Well, we just talked about it because John Prentice, who makes right, he he's rolling everybody's joints. Yes. Because he says that's the biggest category that's grown because people want, I mean, it's like, yeah, this generation doesn't want to roll their own joints, so he's rolling them for you. 250,000 a day.

SPEAKER_06: 2:18:54

It's crazy. And they also don't you know how to use hash. And so like I carry a lot of infused hash joints because I love hash. And I find a lot of people don't know what to do with it. They don't fucking botch.

SPEAKER_05: 2:19:06

Yeah, correct.

SPEAKER_11: 2:19:07

Do you guys know what that is? Right. What's American, but will you describe this? This is the most I've never heard anywhere else except for people who grew up in Toronto. It's a very Toronto thing, yeah.

SPEAKER_10: 2:19:19

E even in the early 2000s, like in the test, yeah.

SPEAKER_04: 2:19:23

And my favorite were always like the fairly juice bottles from the diamond side, and then you bang it on the bottom of your shoe.

SPEAKER_06: 2:19:31

We're like you snap it until it's a hole in the side of the bottle. That hole, and now you've got like a little hole to put a cigarette in. So you take a piece of hash, you put it on the heater of a cigarette, you put this like fla like you're holding it between your fingers this way, and you slide it into the bottle. It is disgusting.

SPEAKER_02: 2:19:59

Wow.

SPEAKER_11: 2:20:03

But yeah, there's a real weed I mean I mean there's a weed culture everywhere, but some things are pretty specific. Wait, you can crack a hole in a bottle without well you can you can think whatever you want.

SPEAKER_05: 2:20:14

You can screw your driver. Yeah.

SPEAKER_06: 2:20:18

I mean, I was a teenager in the 80s, and that's how we did it. And there was always one kid who would cut his hand open. Sure. Every time.

SPEAKER_07: 2:20:26

So now how are you teaching things?

SPEAKER_06: 2:20:31

I've told people about the bottle, but hash kettles are a great thing. So these haples and hash kettles, you take a like a a snake of hash and you put it over. It's like um so a happle looks like an apple and it has an opening, a lid. You put the strand of hash over it, you light it, you put the lid on, and you let it smolder. You don't need a cigarette, which is really nice. Smoke and so um, but it smolders away and when it's finished smoldering, you just it has a like a straw like you stick through it and you can breathe it in. So you can you dig the head that way, which is much the quicker. Most people go for the infused joints because like it's still you need your gear. People might go with more of a happle or a hash kettle, but on the go, just pre-rolls is way easier.

SPEAKER_11: 2:21:21

Yeah. Have you seen the not to get too technical on the numbers, but like have you seen an increase in uh pre-roll sales slash infused pre-roll sales?

SPEAKER_04: 2:21:30

When we infused pre-rolls hit the market, they went crazy. I have never seen anything like it.

SPEAKER_06: 2:21:35

I feel like general admission brought the first round to market and it couldn't keep them in stock. We could like the the OCS is our the Ontario cannabis stuff. Wholesale. It's our wholesaler. Couldn't keep it in stock. They went it was crazy. And we saw it build and build in build. It was so fast because they're so strong. And so for people that like to to um da, this is sort of there. It's a lot a joint. And the strongly a strongest joint. And we have I think six sixty percent is about as high as it gets. And now we're not talking terpenes, now we're not talking anything. We're talking like the hardest hit of creatures you can get. And they sell really well. And the crazy thing is because they're so high in resin and some of them are diamonds, some of them are resin, some of them are rosin. But it makes it really gummy. So when you smoke them, we have to tell people like you kind of if you lean forward a little bit so they're on a downslope, and you pull, like you're breathing in, not like you're taking a drag, because if you pull too hard, they get really resin and they don't smoke well. And people are pretty careful about their smoking because they can get as high as they want now on the gut.

SPEAKER_07: 2:22:50

It it's so interesting just to hear you talk about the way that you describe products, because I can see why you're a great teacher for your customers to introduce them to different product form factors and and um in in these saturated retail environments, I think that there's often this um sort of knee-jerk feeling for operators that it's all about just like being as competitive as they can with their neighbor on a from a price perspective and and watching trends. And I could see from you being able to explain about these infused joints that like you might have completely different patterns of purchasing from your customers than your neighbors down the street, just because people are are being able to discover things in new ways in your store. Do you do you see the the average kind of mix of of pre-rolls to flour to edibles that the whole industry sees? Or are you seeing sort of anomalous behavior amongst your customers? I feel like we sell a little bit more hash.

SPEAKER_06: 2:23:49

Yeah. How fellows can't remember. But a lot of um there are are like in Pusion products, like if you want to eat, it consume like eat or make your own edibles. And a lot of people are looking for a higher high when they have edibles, and our 10 milligram per package thing just changed. So we can have more in a package because of like this summer. But a lot of the time you're looking, and that that's for gummies. There were other products. We have something called mod drops, they're really interesting. And when I finally heard about these things, I was like, this is crazy. Why isn't this the best-selling product on the market? It they're like, you know, the meow water. Okay, it's this is what it is, and each drop is one milligram of THC. I find it slightly light. So maybe 60 drops is 50 milligrams, something like that. And you can, I tell people all the time, like, if you're gonna make edibles, like forget if unless you're really into it, forget decarbing and then the oil and then cooking because it's smelly, it's hard. I I I've done it before. I used to do a lot of baking. You take these drops, you put it into your icing, you whip up a batch of like cupcakes, you ice each cupcake, and everybody's gonna get an equivalent dose of however many drops you put into you can put it in water, in tea, and your coffee, and your in your rum and coke leak. Put it into whatever. I've been in restaurants where I've seen a customer. I love it.

SPEAKER_05: 2:25:18

I love it. That's very funny.

SPEAKER_06: 2:25:20

So, how is this not one of the and they're cheap. So 60 milligrams is under$10. This is like crazy considering a pack of 10 is$5. A couple milligrams cheaper, but around four or five dollars for ten milligrams by the package. It's a wonderful product. So um there used to be a product on the market by T God that was an infusion powder.

SPEAKER_05: 2:25:44

Yeah.

SPEAKER_06: 2:25:45

And they told me, like, I sold all of it.

SPEAKER_05: 2:25:47

Yeah.

SPEAKER_06: 2:25:47

And when they were going, that product was being delisted. I bought all people were coming in droves, people were coming in from all over the city because like you have it. It was a smart product. Their mistake was not making larger packages, it was still a 10 milligram package. But that's how you easily make infused products. The product was better than the company.

SPEAKER_05: 2:26:08

Okay. That's a function.

SPEAKER_11: 2:26:11

The products, I and this is the the California thing. Like, a lot of those products didn't start in Canada. They they like found a partner to do it in Canada, but actually started, I think, in California, right? Like people would go to Hall of Flower, say, Oh, we're gonna do that kind of infused pre-roll, bring it back, do whatever you want there. But it was like it's easier to do it at scale in Canada because you only have nine cus you really only have nine customers, the provincial bodies, right? But once you get that contract, you're selling in hundreds of stores. And so there are there are some great benefits and some terrible drawbacks to the way Canada has set up. But one of the benefits is you can like you can bring a product to market and have incredible scale.

SPEAKER_06: 2:26:49

One of the things we do really well is the diversity of products. Yeah. I like there's been everything, including suppositories. Yeah. I've been really surprised at how how wide and how broad the product range has been. I thought that was going to be the limiter when we first launched, because when we first opened in 2020, like we'd been legal for a couple of years, there wasn't enough being produced. Sometimes you couldn't find very basic products. Um, but very quickly we expanded the product categories. And the OCS was really good in product calls. Uh, they were very good in keeping prices equ like when you when I buy from the wholesaler, if I buy one widget and the big corporation buys 5,000 widgets, we each pay the same price per widget. So I can stay competitive. Because if you could buy based on quantity, I independent stores wouldn't stay open because I would not be able to. There's a little bit of competition on price. You have to price fairly. Um, we have stores that are, I'd say, predatory where the pricing is a couple of percent above margin. Above the margin is a couple of percent above cost. I can't compete with that.

unknown: 2:27:56

Yeah.

SPEAKER_11: 2:27:56

But you're not but you're doing a totally different thing. I don't want to compete. They also put your prices on their menus.

unknown: 2:28:01

Yeah.

SPEAKER_06: 2:28:01

I can't ignore them movely. I have one of the one of them about two kilometers from me. It's just under the bridge. And the bridge is another community. Like it's just on the up-bat side.

SPEAKER_10: 2:28:11

So no, the side of the tracks.

SPEAKER_06: 2:28:14

Closer to the city. It's whatever. I've gone in, I don't love their menu. There's nothing on it that I think stands out. They have a lot of it's a complicated system of kickbacks and companies that are producers owing those companies. And so they fund themselves a little bit differently than I do. I don't take kickbacks. It's the one thing I'm really proud of is that I choose the all of the products in my store are products that I have picked. I don't have to be like, well, I want a few more dollars. I'll buy this thing. I'm not really loving it. Everything in the store is has to get past us. I don't care how much you're gonna give me, I'm not carrying it. These stores that work on predatory pricing need to get the income somewhere. They can't just sell 2% above cost and and survive. Right, right. So I don't compete with them. I don't carry what's on their menu. I I'm very careful about what we pick on our menu. And because when I did, people would come in and be like, Well, can't you price match? Oh, price match my neighbors. That's fine. We all do it. But I'm not gonna price match someone that's trying to close we do.

SPEAKER_11: 2:29:18

That's more fraction of the rent and making half their money somewhere else. Yeah.

SPEAKER_06: 2:29:22

Sometimes I have to explain to people that I pay a living wage, I keep the lights on, we're in a family business, and if they want to go up to it's only two kilometers, and they're welcome.

SPEAKER_05: 2:29:34

Especially in winter. Go. Yeah, please. Once or twice in the back in the lake, it's yeah, yeah.

SPEAKER_02: 2:29:41

I I work with the uh uh Hardine here in Las Vegas and um the the dispensary, not the restaurant. And um and you know, and I think the way we try to sort of distinguish ourselves in a very saturated market is I mean, it's it's the same model. And the and what works is is that incredibly high level of customer service and the very highly, you know, to use a really trite word, curated. But you know, we know everything that's on that menu, and it is very high quality, with you know, but not overwhelming with too many skews. And, you know, having a diversity of product, a lot of concentrates that that really, you know, they that focus on the connoisseur, all everything you said. I mean, that it's you know, it resonates very strongly because it is otherwise, yeah, you're not going to compete on price. And so you have to compete on something else. So then I mixed total set.

SPEAKER_07: 2:30:32

What about five years into this journey? Are you happy with your one store? Do you want more stores? What's in the future?

SPEAKER_06: 2:30:39

I toy with it all the time. And sometimes we get approached because our store is very different. We've been there, you walk in, it's full of kitsch and my husband's collectibles. He's a Star Wars guy. So there are a ton of Star Wars collectibles and like old gains and old toys, and it's fun to look at. There's so much to look at that you could people come in just to look around, and that's fine too. I I enjoy it. Um, and so people love the model because collectibles are very popular. And we came by this model, actually. I should tell you this. When we were opening, we didn't know like what our stores should look like. And all of the stores were very Apple store-like. I didn't like the criticalness of a lot of stores, and neither did my husband. And we sat down, we thought for a long time, like what what we culture is. And we really like landed on love, like I said before, go over to your dealer's house, you sit on the couch. So good to wait. Hang out. And uh so we went, we call it we we started with this idea of lo-fi, a couch, some records, a record player, um, lots of pictures on the wall, lots of art, and it grew from there. He's got a lot of collectibles that has allowed him to collect her own. Yeah.

SPEAKER_11: 2:31:56

It's a book. Yeah. It's not a storage unit, you're at another location. Yeah.

SPEAKER_06: 2:32:03

I'd love to see like I would love to see another store, but at the same time, they're a lot of work. And I don't know that I I don't know if we can do it. Uh, we toy with it, and we haven't found a great location where we're really confident and comfortable. Um, we came down because we'd like to see the climate of the what's going on in the United States and see if that's potential for us. We have one kid that goes to school in Jacksonville. We have family in um southern LA. And so is this the market for us? I'm not sure. We've been approached by in other countries. Yeah, well, it's canceling.

SPEAKER_11: 2:32:43

I could be Jake's end. So like fold the city in half and make them equally inside of town.

SPEAKER_10: 2:32:49

It's like King Fain Street. I don't love that one.

SPEAKER_11: 2:32:52

It's like I live as far west as your shop is these. We are inundated though. Although a couple have closed in our neighborhood. And then the others, the other thing that has happened in Toronto, I don't know if it's happened at the East End, but um, a couple of the licensed dispensaries have like gone back to be guests. They have same motors, same location, they must be paying the same rent, right?

SPEAKER_06: 2:33:13

Like So one of the problems, and so I sit on the retail cannabis council of Ontario. I have found it, and we're doing we're trying to do some work in the area of that. Yeah. Um, the police don't close the unlicensed stores. Um, indigenous stores or not indigenous stores. They're they don't care. And when they first tried to go after one of the big chains, they ended up spending so much money closing one down only to be told they had to undo what they did. And it was such an embarrassment. Like it just made no sense. Yeah. Now the police are telling us the OPP are involved.

SPEAKER_11: 2:33:50

That's our state. Oh, okay. I was going somewhere else with that.

SPEAKER_06: 2:33:56

How can I explain it? We'll take a frame. So the OPP are working in areas that don't have um metro police, and they have been closing down some stores. It they've been building business cases for closing down stores. There is no focus on closing down stores. So I have two, three, four, five, six, seven for block. Nine unlicensed stores within those two kilometers. Oh wow.

SPEAKER_05: 2:34:22

Oh yeah. Oh wow.

SPEAKER_06: 2:34:23

Um more opening all the time. The big brand has I don't want to say their names, but the biggest brand has two, and then the biggest indigenous brand has four. Yeah. And then there's like one other one. There was there were more. They they close and open all the time. Yeah. But it's not that the police have had very little success closing up. One closes, it opens right back up. They've tried going after landlords, they've tried seizing products, they've tried all kinds of things, and nothing is working with it. So that's the other thing I don't compete against. I don't compete against unlicensed stores. I don't want to criminalize cannabis ever. And so I'm never going to use the term illegal store. They're just unlicensed. Um, they've put they've put it on the municipal license and standards, and those people do not want to go into an unlicensed store and start bothering them. That I think it's a bit dangerous in some cases.

SPEAKER_11: 2:35:15

Not as dangerous as the mushroom dispensaries, which keep getting like driven into and like quasi-firebound.

SPEAKER_07: 2:35:22

Do you think that your customers understand the nuance of what is a licensed store and what is an unlicensed store, especially if one was licensed before and then isn't?

SPEAKER_06: 2:35:34

It's a it's a total mystery to everybody. We have black decals on our front door that say something. And it doesn't say this store is licensed, it's just like a registered retail store.

SPEAKER_05: 2:35:44

It's an interior. Yeah.

SPEAKER_06: 2:35:46

Whatever it is, it's like so. I tell people that's how you know it's licensed, but that's the only way you know. Um, my brother-in-law has a store in Parkdale, uh, like a collectible store, oddly enough. And there Which one? Uh Nerdgasm. Okay.

SPEAKER_11: 2:36:02

Yeah, I live over there. I mean, I live north of there, but yeah.

SPEAKER_06: 2:36:04

So Nerdgasm is his, and there's a store right across the store, right a couple doors down. I think it's called Lit. Yeah. I think you know the one. Yeah. And he tells people he's licensed and they're like, but you're allowed to be open 24 hours. He's like, Well, we have that license. It's very hard to get.

SPEAKER_05: 2:36:19

Wow.

SPEAKER_06: 2:36:21

I mean, you if you're gonna not have a license business, you gotta do what you gotta do. I totally get it. But if you're telling somebody, like if someone had told you that, yeah, we have a license and we got a special license and we can be up in 24 hours, you'd be like, oh, you guys must be great.

SPEAKER_05: 2:36:36

Right.

SPEAKER_11: 2:36:37

Right. We have a lot in our too. A lot. There are. They don't feel as good. I mean, they don't you gotta get buzzed in. They're like, it's like old school.

SPEAKER_10: 2:36:46

You gotta get buzzed in, yeah.

SPEAKER_04: 2:36:48

That's the no. The one near us. There's a lot of kids in there.

SPEAKER_03: 2:36:53

Yeah.

SPEAKER_06: 2:36:54

That's the part that really I think bothers me. If you want to sell weed, sell weed. You know, I bought I bought before it was legalized. I started smoking in the 80s. So it hasn't been legalized most of my journey. So I I can live with that. But you're selling to kids very openly. I mean, I was a I was probably their age when I was buying it. But um that it doesn't get shut down. And I like there's really the council's done some work. There's really not a lot of people like understanding what an unlicensed store is, why they shouldn't go there. I find it hard here. We went to a bunch of dispensers and I asked you, like, you know, what do you do about it? Because we went to one and there's I don't know the brands, and the one store was like, Oh, these are our brands. And I'm like, Oh, I don't know.

SPEAKER_02: 2:37:44

Yeah, absolutely. That's unnecessarily a good thing. Yeah.

SPEAKER_06: 2:37:49

Um, the pricing varies wildly for vapes. Like one place wanted$90 for a gram vape carb, one place wants$30 for a vape gram vape card. I'm like, just the mere best quality. They're like here. This is like whatever's most expensive is clearly the best quality, right? Um, you know, and I said, so I was sent to people like, oh, just impress me. And like I'll come back. And it's it's hitting this. I I don't understand.

SPEAKER_11: 2:38:16

Not only well, you tell Lee and people. It seems they're all over the place. Like, I mean, they're like really the quality and the even the strangeness of when you walk in is I find Las Vegas to be well, anywhere in Las Vegas to be strange. Yeah. I mean honest. No matter whether buying weed or buying booze or buying groceries, because it's all very, very strange. Uh, thank you for coming in and thank you for making time. You are our last guest today. Um so thank you. It was a great conversation to hear how you're doing. Nice to see you. Um, and I'll be back to the shop uh anytime. Anytime.

SPEAKER_07: 2:38:45

Yeah, everybody should go to the shop. Why don't you tell everybody we're shop at Austin?

SPEAKER_06: 2:38:48

My shop is in Lesleville in Toronto. It's 1342 Queen Street East. Oh what? Oh, yeah. Get there.

SPEAKER_10: 2:38:55

No, I really appreciate this perspective because yeah, I know ever since I got into the industry, everyone wanted to be the Starbucks of cannabis, and not everyone was going to do that. There's only one Starbucks, right?

SPEAKER_11: 2:39:06

And so it's like And they're closing down too. Right. Right, right.

SPEAKER_10: 2:39:12

Well that's value Vlads. Sorry.

SPEAKER_05: 2:39:14

One lost camera command. Shots of the fire. Yeah.

SPEAKER_06: 2:39:19

I didn't want to say their names, but like there is a I I don't think that's that's that was never our goal. And I, you know, looking at it logically, you're getting into a a space that's very expensive to be in. The licensing, the overhead is extremely high. The margins are low. So I don't like I don't think anybody thinks they or nobody should think they're getting into a million multi-million dollar business. It's it's not the way it's it is. You need insulation in them, it is. But who is there? Sfika?

SPEAKER_05: 2:39:47

Yeah.

SPEAKER_06: 2:39:48

That's quite a and that one. I think they have eight or ten people out at a time from morning till night. Wow. And they do I think it's the number one store in the but they also close one in our mall, in the Duffer Mall. The mall ones are Like they don't work. You're you have to be in mall hours. Oh yeah. Like and then it's hard in a mall because the weak NGCO's rules had come backdoors.

SPEAKER_11: 2:40:09

Yeah.

SPEAKER_06: 2:40:10

People still go to malls?

SPEAKER_11: 2:40:11

This mall they go. Where it's very cold they do. Yeah. Where it is very cold. It's very cold they do.

SPEAKER_04: 2:40:18

I feel like that's where you're going and buy your weed. No. Yeah. You're buying from your neighborhood. You buy you have a local. You develop it's like a convenience for you and develop.

SPEAKER_11: 2:40:27

Well, thank you again for bye. Thanks. Thank you, Mark. Den, Jeremy. We'll be Jeremy and I'll be back tomorrow.

SPEAKER_05: 2:40:34

Yes.

SPEAKER_11: 2:40:35

Array will be back on Friday at 8 30 ish Pacific, 11 30 Eastern, roughly. It's gonna be hard three days in to be doing that, but thank you all for joining us. Remember, we're sponsored by Siegel's Bagel Mania today, so please.

SPEAKER_07: 2:40:49

So please go send us a check.

SPEAKER_11: 2:40:51

Yeah.

SPEAKER_02: 2:40:53

Or for the varnish kids.

SPEAKER_11: 2:40:58

Bellylock. No, we're see us on the trade show floor. Say hello. We'll be there later today. Turbine and I, probably everybody else. Or the out and about tonight. Um, thanks everybody. We'll see you soon. Thank you. Bye.