SPEAKER_01: 0:06

Hi, friends of High Spirits. It's Anna Ree Grabstein, your co-host of the podcast. And today we are sharing some awesome content that we recorded in Las Vegas with our friends Jay Rosenthal and Jeremy Burke from Cultivated, along with Mark Hauser from Cannabis Musings. We were in Las Vegas, it was MJ VizCon, and we talked with a bunch of different leaders in the space about what they're working on, what's most important, and a little bit about what they were getting out of the MJ Vizcon experience. 2025 Vegas week was wild on many levels, and I think that you're going to really enjoy these conversations. So listen in, tune in, keep your spirits high, and happy holidays.

SPEAKER_04: 1:02

We are in beautiful Las Vegas here. I am Jay Rosenthal, you are Anna Ray Graphson, you are Mark Hauser, and you are Kim Sanchez Real with Azuka. And we are um starting our now second day, Wednesday and Friday, um, doing this morning in cannabis live. And it's been super fun.

SPEAKER_01: 1:21

I'm having fun.

SPEAKER_04: 1:23

Yeah.

SPEAKER_01: 1:23

I think you guys are kind of smart, and I like to wake up in the morning and hang out with you and talk shit.

SPEAKER_04: 1:28

Do you want to hear what my kid said once? She said, Dad, mommy's smart, and you're smart in your own way.

SPEAKER_02: 1:37

I think a compliment, right?

SPEAKER_04: 1:38

It was not really a compliment.

SPEAKER_01: 1:39

It was like the kid understands that women and moms rule the world, so I you know I'm up with her.

SPEAKER_04: 1:45

So I am too. I was too. And I thought that was a nice way of saying that you have some skill, it's just not like all of them. Yeah. Just intelligence is not one of them, apparently. Yeah, that's fine. But I but it's like uh when you have one of your senses taken away, the others get heightened, right? So you have to do other things, I think. So this has been good fun. We were here Wednesday, we got through a bunch of people, and then the nice part is that people saw it and acknowledged it.

SPEAKER_01: 2:10

If you're watching, thank you for caring. Um, we hope you're entertained and then you're becoming more well informed.

SPEAKER_04: 2:15

Yeah. And I said earlier just now, before we press low live, that we would do that, we would send this on the road. And Kim astutely pointed out that you are on the road. Nobody lives here. So, I mean, people live here, just not us. So, uh, welcome everybody. We're glad you're here. Kim, give us uh well, I had you on uh Cultivated Live uh a couple weeks ago, it wasn't that long ago, and you had said something about um azouka and like 3,000% growth year over year, and I sliced it up, and then so many people responded to that. Like, how does a company actually prepare for that type of growth?

SPEAKER_00: 2:49

Yeah, okay, so 3,000%, it was over a three-year period period. So I was like, Well, it's still a lot. I'm trying, I would take it over a two-year period to show. I'll take it. So that and that's the uh Inc. 5000 algorithm on how they you know rank the fastest road companies. But you know, um, I think how we prepare for that, you know, we um I had the the good fortune of um spending seven years at Intel in the 1990s and semiconductors in the 90s was how fast can you grow and maintain quality, right? It's up into the right. So I think that um experience in rapid growth, uh quality systems, scalability is just it's it's built into everything we do, even though we're in this wild world of cannabis.

SPEAKER_01: 3:36

What uh what has been the thing that has broken along your scaling path that has surprised you? That is broken.

SPEAKER_00: 3:44

Um, the thing that's trickiest, I think, is choosing the right manufacturing partners, right? Embedding everybody that you work with for quality um and consistency in their practices. Yeah. Uh we have a big focus on quality systems.

SPEAKER_01: 4:00

It's such a a good call out because as an ingredient company, um, there is this layer of the manufacturers that you depend on to really use your ingredient in the right way. But but most likely you do you think of your customers as the manufacturers or the brands? The brands are the ones that are choosing to use your ingredient in their formulation, right?

SPEAKER_00: 4:20

Right. Um, so our customers are really the brands. Um we we sort of talk about our models being the brand behind the brand, but sometimes we say the Intel inside. Um Intel was a great place to know it. Um But I really think of the brands as our as our partners. They are our customers and our partners. Uh, we have a co-branded strategy. So um all of our brands have our time infusion uh logo on them, which is really uh a stamp of quality and reliability, fast onset, trust. So people who see that stamp know that these products are gonna kick in in five to 15 minutes, predictable onset, predictable offset. So um, yeah, it's just a really a brand partnership.

SPEAKER_04: 5:05

Like, is that something you just like we did at Intel? It was amazing, and that is why we're gonna be here. Because that is like the most Intel thing ever.

SPEAKER_00: 5:12

It is very Intel. You know, back in the day when Intel was like people wanted to make sure they had an Intel chip inside their computer.

SPEAKER_04: 5:18

It was the most important part of like a Dell ad was the Intel inside.

SPEAKER_01: 5:22

I think it's really it's just one of the more brilliant marketing moves over the last like half century, honestly, is because I think largely brands have been the focus with the consumer. And Intel was the first example. I mean, they're like a case study in business pool of of how to actually not anymore market and that's a whole nother story.

SPEAKER_04: 5:42

But no, no, I'm just saying, like they there is a whole chip war going on and they are a small player.

SPEAKER_01: 5:47

Yes. Uh it it was, I think a it's become kind of the oh, okay, if you're a vendor to the vendor and you want to actually be forward-thinking with your brand, it makes all the sense in the world. But it needs to mean something.

SPEAKER_00: 5:59

Yeah, and but we do a lot of collaboration with our brand on formulation. We have a a team in our lab that does a lot of support on flavor profile. Um, we do dozens of different form factors. So pretty much anything that you would not inhale, we have formulated for. So edibles, beverages, gummies, um breath sprays, you name it. Um, so we've got a lot of experience in a lot of different form factors, but the brands are each our partners. They'll come to us and say, hey, you know, can we do a a mint, you know, a chocolate or a bon bon or like the answer is generally yes, right?

SPEAKER_01: 6:36

Oh, wait, yeah.

SPEAKER_00: 6:38

I don't think we found any ingestible form that we couldn't infuse. Yeah, yeah. Now, some of them I think are, you know, I'm not sure they're gonna take off. I, you know, hot thought.

SPEAKER_02: 6:48

Could you do a canish element?

SPEAKER_00: 6:50

Yes, I can. I can't.

SPEAKER_02: 6:52

We have a question today. I know you came from C. No, but that's I've been writing about an a THC infused canish for for years, and it's sort of my holy grail of of I gotcha. Ironics.

SPEAKER_01: 7:03

I think it's a hard thing to scale, but something that you should definitely make. I will.

SPEAKER_02: 7:07

I've got to try it just to sort of, you know, that will be my retirement gift to myself.

SPEAKER_01: 7:12

And and like what is the total addressable market for infused canishes, really?

SPEAKER_02: 7:16

One. Yeah, so you will get you one. We'll make you one. It will make me one. Fine. Um, can you talk a little bit about the business itself? I mean, some of our viewers may not be as familiar with your company yet. Um, and I honestly, you know, I know a little bit about your company, but I don't really know about the scope of it and a little bit about the story. So can you just take two minutes? Tell us a little bit more about the company and you and how you built it.

SPEAKER_00: 7:39

Sure. So Azica um set out to solve the classic edibles problem, right? Slow onset for predictability. Um and so the original formulations were invented by Ron Silver, who's a chef in New York City, uh cannabis fan all his life. And uh he created this way to make cannabinoids fast onset. And because he's a chef, um, everything that kind of fell out of his brain and that we've further developed, uh, we've also always focused on uh flavor. So everything tastes great. And then also because, you know, we started, we didn't start in a chemistry lab, we now have a chemistry lab, but we started in a in a chef's kitchen, right? So everything had to be um simple and scalable. So we sort of we put some constraints around our process early on that have enabled us to scale really well in this inherently unscalable industry, right? Um, so the business challenge was how do you then take this set of ingredients and this process? Because it's part part chemistry and part how do you do it, right? And how do you take those things and literally put them in a box? Well, we actually put them in a bottle, but um, and then enable brand partners to do these infusions that are actually quite complex, but we have to make them very simple because um, you know, kitchen technicians all over the country who don't have huge staffs have to be able to do it all, do it repeatedly every single time, hit dosing every single time. And so um we essentially modularize the process so that our brand partners um all they have to do is take our ingredient product, which is um trademark as activator, so activates the cannabinides. That's the that's the idea. We take these wonderful oil molecules and we activate them so that when human beings consume them, they um they have quick onset and they're predictable, as we said earlier. They also have, um, because they remain in the Delta 9 THC form, they have um people sort of describe it as a smoker's high in an edible form, which is also really kind of a unique um attribute for for these products. Uh, but our brand partners, all they have to do is take their active, um, it can be distillant, it can be any extract, um, and our activator and put it in um a time machine, which is a you know, a small piece of equipment, push a button, and your vision's done in an hour. And that goes into your gummy, your beverage, your cookie, your whatever you would put it in. So we just had to make it your knife, make it really, really simple simple and repeatable.

SPEAKER_01: 10:12

So you have actually brought a real time machine to life.

SPEAKER_00: 10:16

Yes. I love it. Yeah.

SPEAKER_04: 10:20

Is it a mixer? Like a ribbon mixer, yeah.

SPEAKER_01: 10:24

Would you be open to calling out some brands that you work with for the viewers that are out there that might be interested in trying an Azuka product? Sure.

SPEAKER_00: 10:31

I'm gonna call out Wana Brands, who got the MJ last night for best infused product. So uh Wana Brands, uh, you know, very well-known gummy brand all over the country. They have like country too. Yes, they have a line of uh classic gummies, and then uh we partnered with us, uh, I think we launched in 2020 with Wana. Wow. And they also have a line of they're called the Wana Quick. So they're their fast onset ones, they have their classics, and then they have uh a line of of optimals, which are functional effect-based um gummies. Then we are also in their functional gummies. So my favorite is fast asleep on socialists.

SPEAKER_04: 11:10

I'm down with that. But we can easily yeah.

SPEAKER_00: 11:13

Um we work with GTI, we're with Acridge, we work with uh we've done over 120 license agreements now. So we have uh a lot of brands. A lot of lawyers, a lot of lawyers never screwed me.

SPEAKER_02: 11:28

I love my lawyers. Mark's a lawyer, so unfortunately. He loves that. Um, what is from your perspective, being sort of um a goods and service provider to the industry? So, you know, one slight, one sort of half step removed from being sort of the operator itself. What is from what is your perspective? What is the challenge today in looking forward both for your company as well as for the industry? And getting paid on time is not other than getting paid on time, because that's an issue for everybody in this industry. So other than getting paid on time. How what is what do you see as the challenge going forward for this industry?

SPEAKER_00: 12:02

Well, I think the the challenge is is really um coming together as an industry um to advocate for a sensible policy framework for these incredible molecules. And uh, I am an advocate for a one plus approach. You know, I think we need to think um think in a framework federally of uh like what is the in in product development, we talk about like the minimum viable product, right? I think from a policy perspective, we need to kind of think about what's the minimum viable federal policy that enables states that you know to make their own decisions as well, that creates a a platform for um for the plant to thrive. I think that's the biggest problem is is really the regulatory mess. You know, I've been I think this is my ninth MJ biz. Um we all thought it would get more rational over here. Um not getting more rational and getting less rational. Less rational, yeah. But you know, the whole, you know, now the state by state, you know, on the hemp side, uh, you know, I I think it's all hemp, right? You know, the the term marijuana, that was like an artificially created term. And then, you know, decades later, Congress comes back and defines hemp, you know, in 2018 farm ball, it's all hemp.

SPEAKER_02: 13:26

Well, it's all hemp is cannabis.

SPEAKER_00: 13:28

Hemp is cannabis, right? Hemp in the communism, right? You know, so it's all hemp, it's all cannabis. Um, and I think that the you know, I think the challenge right now is getting all of us together to advocate for a women.

SPEAKER_01: 13:46

Well, so you have sort of opened the door to talk about what's what's going on um in federal policy. So I I can't help myself, but from a strategic business perspective, I think that uh, you know, people were looking at 2026 if they were operating in the hemp space as a year of growth up until a few weeks ago. And we're really excited about the market continuing to grow at even a faster pace than it has before. And all of a sudden that that's shifting. And um, I'm curious about how your 2026 is potentially shifting and any type of advice or insight that you can give other leaders who are navigating this time right now.

SPEAKER_00: 14:27

I think that's a really tough question. Um I like to have questions. Well, I can um, you know, we were chatting, like I, you know, I I worked on Capitol Hill. I've you know, I always have had a little toe in the political world just uh because I'm really passionate about it. Um and one of my perspectives has been like never bet your business on any regulatory body doing anything on any particular time frame, right? So um I think that making decisions assuming Congress in particular is gonna do anything is is just a bad strategy. So I think we have to we have to play the field we have. We have to get out there and advocate, right, for rational changes. Um, but I think it's really tough on the hemp supply because it's you know, when it's time to put plants in the ground, there's gonna be um I don't think there's gonna be a solution to this being I mean I hope I'm I hope I'm wrong. Or it's 2026 midterms. Um, you know, we live and breed this stuff, but we're a small issue in Washington. That is just, you know, harsh political reality. Um so I think 2026 is gonna be a year of like you know, we gotta be very agile, everybody in the industry, but you know, you know, ready to respond to the chaos in the environment. But yeah, yeah.

SPEAKER_01: 15:55

What do you think about uh brands that are only operating in the hemp space right now? Like, should they be looking at thinking about moving into the adult youth space and trying on the regulated market for size?

SPEAKER_00: 16:08

Some are. Some are actively pursuing, you know, you if you've got a great, you know, an art, you know, fused product and it's unclear what's going to be um viable in the hemp channel, um, then I think it is a great time to look for um manufacturing partners in the regulated market because um people love great products. There's some you know great uh operators in all the regulated states. So it's a great time to pivot into that. But I think it's gonna be a tough, um, chaotic year.

SPEAKER_02: 16:39

It'll be interesting to see. I certainly it's probably easier for the the food products versus to should make that shift because the because the distribution sort of supply chain or logistics, I think is the right word, is is already sort of built in. But I, you know, from what I understand, the challenge from for uh beverages within the license space has always been distribution and and sort of the logistics of getting it and then have it in the store. And so it's probably gonna be if if beverages are gonna continue, you know, to be a viable product, which they they haven't been zero at dispensaries, but they're very small, is how do you solve that that sort of logistics problem? And can the indust at scale and can the industry do that? And yeah. Yeah, it's not an easy question. But for other forms of like all the gummy stuff, I think that but oh I'm sorry, but it just let me just finish on that thought is though, is because I think the the one thing that um you know the the hemp this this sort of hemp um uh sort of experience has shown is that um is that beverage is a very attractive form factor for to expand the customer base. I mean, we've talked a lot a lot about how you know over time, you know, the the the built-in consumer base for dispensaries, for licensed dispensaries, eventually sort of peters out. And because that that core group of users or customers is satisfied. And the industry hasn't done a great job, the license industry hasn't done a great job of expanding that customer base. And you know, part of it is that it wants to stay true to the subculture, which is great, but you know, it just hasn't done that. And part of that, I think is there's a lot of reasons for that, but one of that is form factor and drinks is, you know, or like tinctures and things like that, and edibles to a certain extent, are ways of doing that. And so the hemp experience again has sort of shown that's it's very viable. How do you, you know, can the licensed industry take advantage? You know, because there's a lot built into that. So I'm not trying to that's not a backhanded way of suggesting anything, but can it sort of take that momentum and keep it going? Yeah. Yeah. So and then that's more of an existential question, right?

SPEAKER_00: 19:02

You know, I I think you you hit on it. I think the the biggest problem for beverages in the regulated markets is the way they're regulated and you know, the requirements for you know, vault and just the the sheer sort of size of you know beverages in the just that distribution channel. So um I think it's if states rethink some of those um constraints, particularly for you know low dose beverages, I think there could be an opportunity, but I don't see states doing that quickly. Again, I think over time, yeah, over time, this is all gonna make sense. Like we're gonna be sitting here, you know, with our grandkids um and go, like, wow, remember when you know you couldn't uh you know take a cannabis beverage across state, right? Our grandkids are gonna say what was wrong with you.

SPEAKER_02: 19:50

Right.

SPEAKER_00: 19:51

What were you thinking?

SPEAKER_02: 19:52

Yeah, and we and we had to go uphill both ways. Right.

SPEAKER_04: 19:55

Right. It's gonna finish the project. But it is interesting, though. I you have me thinking. I was last week I was in. Florida and liquor stores have THC beverages and gum like all gummy. Like it was and she was the the woman at the grocery, she said it's like their most popular product right now. Yeah. And like I think that's a tough thing to push against. But like she's not they're not keen on taking those off the shelves.

SPEAKER_02: 20:20

Right. That's why the wine wholesaler the wine and spirits wholesaler association, marketing that one is uh is so behind all of it.

SPEAKER_04: 20:28

Yeah.

unknown: 20:29

Yeah.

SPEAKER_02: 20:29

They want more stuff to deliver. Right. Yeah. Right.

SPEAKER_01: 20:32

People who sell things like to have more things to sell, especially when consumers like them. Yeah. Especially 20 to 30 years. Lots of lots of choice. Yeah. Uh I think that the the real question is even though that liquor store in Florida likes selling those products and those consumers like buying them, if they disappear, are those people going to fight to get them back? Well, I'm gonna I because I think that it coming from businesses is just it's not working.

SPEAKER_04: 20:59

Well, I clearly I'm also curious. This is a hypothetical like I'm not sure they're taking them off the shelves. Unless someone comes threatening their license. Oh no, I will agree. I think all kinds of illegal things, but they put them on the shelves with no authority, not at l not at liquor stores.

SPEAKER_01: 21:16

Yeah, and totally so what products will stay available to those stores. Yeah. And that means that if you know, if you're wana and you are connected to a publicly traded company, you are no longer going to be producing something that you are not allowed to produce. So so the the most compliant, you know, consumer safety focused products are going to leave the party. And then the ones that are left are going to be the ones that are willing to break the rules. And that is good for absolutely no one. Right. Yeah. Uh so that that's that's really the problem is that even if the stores are willing to keep stuff on the shelf, then all we're doing is we're punishing the people who follow the rules.

SPEAKER_05: 21:58

Well, I'm I'm not disagreeing with people that don't.

SPEAKER_01: 22:01

Yeah. But you that's where you think we're going. And I do in illicit market for in the in the liquor store channel.

SPEAKER_02: 22:08

But I but I I but I don't understand. You're not gonna get Southern Way, which is R D C there, you know, the the big liquor distribution companies are not gonna touch it. Right. And that is most of what is gonna be that's most of the logistics for the big, you know, total wine and big wine chains. You may see it at small liquor stores or something like that, but that's not gonna be that's the exception, I think. And that to me is that you know, that I don't know. I mean, you'll still have smoke shops. I mean, there's a smoke shop two blocks from me in California, even though Kemp has been banned for what a year now. So, and that thing hasn't gotten shut down. But um, you know, so but that's an enforcement problem. But but yeah, I mean that it's just well let's take it back to to V.

SPEAKER_01: 22:52

Yeah, yeah. I I want to so him, um, a Zooka, I know how to booth. And um, and I think that maybe you're the first person that we've talked to in this in this uh what are we calling this realm, yeah, roundabout of talking with people that um had a booth. And um, I'd love to hear if you think that it was successful, what you thought of the events, and you close any deal. Nice.

SPEAKER_00: 23:17

So I would say it it is it's been a good show for us. Um we have had a booth I think every every year since 2018 or so. Um so it's a it's a little less crowded, but uh what we have found is that the quality of the leads we've gotten have been on par with previous years. Um this show, every year we like we do the we do the math, we check the numbers. This show always pencils for us. Uh we always have a nice ROI from having a booth on the floor. So we'll be back again. Um, it is less crowded. Uh, and for me, I kind of like that. I was mentioning to a few people that it feels like the lighting is better than the community. It feels like the air is is fresher. I so maybe that's part of the construction, the upgrade, but it just it feels better to me uh just walking around. I I've been in a better mood.

SPEAKER_04: 24:08

Well, there's way fewer um like tire kickers at the show. The show itself itself is like it lends itself less to consumers and more to business people. Yeah. Um, but also you have to want to be there now. Like if there's not a ton to see if you're not definitely right, and I think it like honing in on who the people are there and what they want, and they're looking for I'll I'll echo the positivity.

SPEAKER_01: 24:30

On on Wednesday, I uh spoke on a panel and I was a little skeptical that there were even gonna be people in the room. Were there? That's yes, the room was ended up being packed. It's great. Um and I and I couldn't be on the panel. Yeah, it was yeah, totally. Um, I actually was a fill-in on the panel, so I wasn't even marketed as on the panel. So it wasn't because of late app. I um it was about next generation infusion technology. And uh we had uh a a beverage manufacturer out of Georgia, we had someone that owns a bunch of brands, and we had a uh ingredient group. And so yeah, I th I think it was went really well. It was interesting, and and I actually met some people myself that I would have never met because of it, and I left feeling like really, really stoked that I met some new people and that the platform was valuable. Yeah, nice. So you're you're right. I'm not here to do an MJ Biz adder. I I'm not doing an MJ Biz ad, but I am saying that like I I am grateful that that the the conference exists to bring us all here. Yeah, and that all these other events and the party I got to throw yesterday morning and that awesome dinner I had last night, none of that wouldn't happen without the the anchor. And we wouldn't be able to do this morning show. Yeah, that's right.

SPEAKER_00: 25:47

And you and I wouldn't have finally got to meet in person.

SPEAKER_04: 25:49

In person, yeah.

SPEAKER_00: 25:51

You know, um I tell it's right, like our our biggest customer, our biggest account uh came from MJ Biz. It came also from, you know, I tell my my crew, like when we come to one of these things, we've got a rule. Like we are not allowed to hang out with each other. Like, you know, you can't sit by somebody from a zooka. That's good, you know. If you're at a party, like, you know, split up because we're here to meet other people. We can talk to each other all the time. Um, but uh our biggest customer I met at one of those horrible, awkward, you know, networking luncheons on forum day at MJ Biz, and we just randomly sat down next to each other at you know, the awkward networking lunch, and that turned into our largest account. So I just they really encourage people to go out there and don't hang out with each other. Don't hang out with each other. It's so true.

SPEAKER_01: 26:35

You can't underestimate kind of the the things that you can't predict. Yes. Um and you just you have to insert yourself into places where you can just like just kind of crash into to opportunities. Yeah, right. That I think that's science. That's the physics of it all, you know. If from from home, from behind the computer, that that magic will not happen.

SPEAKER_02: 26:56

Fair enough. What kind of uh without divulging any sort of secrets, but what kind of what is sort of the future of of of the kind of products you're developing for customers? You know, is it is it faster and even more reliable on set? Is it, you know, are there other ways of sort of thinking about it that you know of that uh of approaching, you know, what goes into products to make it even better? I mean, what what's sort of the next, what's on the horizon? Technology.

SPEAKER_00: 27:22

So uh one of the things that is um is pretty new and really innovative is an activator that we developed called Whole Plant Activator. And um this is a product and a process where you use actual flour as your active ingredient in your infused gummy or whatever you want to put it in. So um, what this process does is it um it takes the whole inflorescence of the flour, the cannabinoids, the terpenes, flavonoids, and um turns them into a fast-acting ingredient. Now, this is like even when it comes out of my mouth, I'm like, do this, we'll just like it's not an it's not an extraction. So um there is a brand called Flower Union Brand, which has this, uh is using this process to make a uh a whole plant gummy. And they have launched in Colorado and New Jersey. And when I describe these, these gummies, it's like these gummies taste like a really good growth smells. And um you can see the like some of them are purple and some of them are you know pink and some of them are yellow, and that's just the that's the color of the flower from the flower. It's like um there's a line with no flavoring or coloring added, so it's really just it's it's an edible that is so true to the plant.

SPEAKER_01: 28:47

So it's a kind of a Twinsaw's edible. Yeah, yeah. It's very cool. That's cool. I love the taste of cannabis personally, and it's shocking. I've been disappointed by all of like these fake flavors that have gotten added to products. So that's so cool.

SPEAKER_00: 29:01

Yeah, the flower union whole work. What market is that in? So they are now in um New Jersey and Colorado. Okay. And they're fantastic.

SPEAKER_04: 29:09

I like it.

SPEAKER_00: 29:10

But that's that's I think a really innovative approach to me.

SPEAKER_01: 29:13

Like digging where others are zagging.

SPEAKER_00: 29:15

Yeah, yeah.

SPEAKER_01: 29:17

It's true to me that with something like that, there could potentially be a non-sweet edible that someone could formulate that can actually win. I know that there have been. There's some savory stuff, people have been done like chips and stuff, but none of the savory edibles or non-sweet at least have really like hit a top 10 list that I've seen anywhere.

SPEAKER_04: 29:36

And as someone that doesn't love sweet stuff, but you talked to Rish Bat Rick Bashkoff about uh I'm really interested. But my guess is the sweet. People like sugar.

SPEAKER_01: 29:45

That's what the data said.

SPEAKER_04: 29:46

Have you seen Vegas?

SPEAKER_02: 29:48

The whole city is that's kind of things you can come to this salt sugar. People like sugar.

SPEAKER_00: 29:55

We did a um everything bagel bagel thing.

SPEAKER_04: 29:58

Oh, I'd love that you bet on anything, right?

SPEAKER_01: 30:01

I mean, it's uh you know, it's uh we're thinking about renaming this week the week of bagels. That's like we're surviving on bagels, yes, yes. Um bagels, stale bagels, all the bagels.

SPEAKER_04: 30:16

I want to thank you, Kim, for coming in. I always have a good time talking to you. I think the first time we talked was last year at the show, and then at least once in between, and then now, so I appreciate that. Um, yeah, and we're taking we are on the road, but we're gonna take this on the road. And if you're on the road with us, it'll be a whole I'll be there. Have a whole crew going. I like it. Thank you so much. Thank you. Join us the rest of the show and travel home and all that jazz. Thanks so much. Nice to meet you.

SPEAKER_02: 30:41

Thank you for coming.

SPEAKER_04: 30:42

We have our next guest coming in, Jason Terasek from Vicente LLP. I think he's he's busy. He's moments. Uh we're gonna talk about Minnesota. We're even gonna talk about Wisconsin, um, Jason's home state, uh, well, where he's from, from he lives in Minnesota. You can come nice, but you're gonna go that way because you're gonna need a mic. Brings in cheese skirts from Mars' Cheesecastle. Uh well, then you're not allowed to sit in the chair. Thanks, Ken. Jason, welcome. Thank you. Jason, Anna Ray Graftine. Mark Howser. Nice to meet you.

SPEAKER_01: 31:16

We've been on Zoom before. You're taller. You know, I had never met Jay in person before either. Shorter. You were shorter than I thought. I'm also tall, so I I like to surprise people with that.

SPEAKER_04: 31:28

You are. Yeah. Did that surprise you? It did. But there. It did. But thanks for having me. Yeah. Yeah, your height is surprising. That's all it's yours, but I thought people I try to warn people. They are surprised.

SPEAKER_01: 31:47

Helpful to reach the top shelf.

SPEAKER_04: 31:49

Yes. I have these big big tongs at the house, like I can get the thing on the top, top shelf. Or you can just come over.

SPEAKER_01: 31:56

Things I've never considered.

SPEAKER_04: 31:57

Yeah. I'm gonna be so distracted. I'm a golfer, and this is the most beautiful. I don't think I don't think the cameras can see. Okay, well, it's really over the ledge. There's a golf course between here and the wind course. I think it's the wind warm right out the window.

SPEAKER_01: 32:12

Yeah, in the middle of a concrete jungle.

SPEAKER_02: 32:13

It's like there's a lake too. But this being Vegas, that golf course also has a strip club and a dispensary. Yes. It does. And and an injury lawyer office.

SPEAKER_04: 32:24

Morgan and Morgan are there. Um, Jason, you you are a lawyer. Yes. Uh, you started your practice Minnesota cannabis law. I did. Now you're at Vicente L L P. He knows my old story. Yeah, I do. We've known each other. That's what I don't even need to talk. I'm on it. No, but but um from day T minus three years when the Minnesota conversation was happening, you've been the Minnesota Cannabis lawyer. And are we close? Close to the case. It's been a hundred years, Jason.

SPEAKER_01: 32:55

We're there. Can we say WTF? Close to the case. What's happening? I want the Minnesota update.

SPEAKER_03: 33:02

Yeah, I was on a panel yesterday and we had a member of our regulatory uh body there. And so I think the panel is being very nice. But uh, you know, I I try to give them some grace. It's their first time at this too. And very diplomatic. Yeah. Why? No. It's been a quonky rollout, no doubt. But we we finally do have licenses opening their doors. Unfortunately, there's not a lot of product. So the dispensaries are opening and uh selling t-shirts?

SPEAKER_01: 33:34

Yeah, so we're not allowed to sell t-shirts.

SPEAKER_03: 33:38

I know 2026 is when it'll really happen. But yeah, we're actually launching and and yeah, it's been a long time.

SPEAKER_01: 33:44

But Minnesota has been this like rainbow utopia for the launch of hemp beverages over the last couple years. And and I think a lot of industry onlookers, myself included, were really hopeful that Minnesota was going to present this uh coming together of open retail for low-dose beverages, more high potency products for that type of consumer in the dispensary channel. And it just seems like that is becoming less and less likely to be the future with the new regulations. And what really hit it home for me when was when I saw uh your attorney general's name on a letter supporting um hemp prohibition um at the federal level, which just seemed like a real surprise. Uh considering that Minnesota has put so much effort into their hemp program. It has hemp farmers.

SPEAKER_03: 34:38

What you could continue being diplomatic. Okay. But you are absolutely correct. That surprised me too. Uh I think perhaps he didn't understand the full story of what was happening and the implications of that letter. Um so Minnesota has been regulating hemp derived products for years. We make sure it can only be sold to adults. It's tested, it's labeled, etc. But every state is like that. And it, you know, it does make me uncomfortable. For instance, you mentioned Wisconsin. I was on State Street in Madison, where they were selling THCA hemp flour in a canister in a convenience store, right? Because it's completely unregulated there. And who knows what's in that, right? Nobody you don't know what you're putting in your body. So I think in the interest of public health, stepping back, I understand why um perhaps they wanted to close that loophole at Farm Bill, because you know, Minnesota's doing it right, but a lot of places are doing it wrong just by ignoring it. So it's super unfortunate. And yeah, we we had we had great plans to have this wonderful regulated hemp market and a regulated adult use market, and of course, Congress is well.

SPEAKER_01: 35:58

So you've entered both lawyers. I mean, help help me understand as a non-lawyer. I know I'm so sorry. Um, but but aside from that, like I I want to push a little more on this attorney general in Minnesota thing. What is the responsibility of a state attorney general to represent the constituency of their state versus getting to have personal opinions or the of what they think the law should be or where it should be going? How do you guys see the role of a state level attorney general in engaging with federal policy?

SPEAKER_02: 36:32

Do you want to start with that or that's yeah, I mean let's say we well, yeah, I it's probably a little easier for me to answer because uh you're you're much more in the thick of it and it's probably a little uh I I only I barely have clients, or you actually have clients. So um uh I just have a I just have a platform is um you know I no, I mean I think look, I think that um the the you got the theoretical versus the reality, and the reality is is the attorney general's way attorneys general weigh in all the time on every issue. I mean, the the the attorneys general, uh there's two main groups of attorneys general, one for the republic you know Republican and one for Democrat. And they're very powerful groups that are very active. And so the fact that they that that letter was signed by the AGs was not surprising because they weigh in on everything. And so um, you know, so I mean that's the reality, you know. I mean, who is their constituency? I mean that's a very fair question, um, as to but it is a uh, you know, it it's I you know, I I don't there's I guess whatever answer there is, he's probably not gonna be satisfied. However, they do whatever they want. Yeah, I mean they can kind of do whatever they want, it's part of the problem. But what I mean that's a problem is a lot more, it's part of the issue.

SPEAKER_03: 37:54

Yeah, but I don't think Attorney General Alison, like I said, really understood the implications of what are the implications of Minnesota? Uh you know, it's gonna crush our industry because uh yes, we may have an intrastate market moving forward, but my friends in the hemp space were making money because of it was interstate color, right? And it was keeping the lights on for a lot of our microbreweries who turned into co-packers of TSC member.

SPEAKER_01: 38:20

Minnesota's been a real leader in building a supply chain that's been serving the rest of the country.

SPEAKER_03: 38:26

It's really, really unfortunate. And you know, I've had state legislators in Minnesota call me and think, How can I help get elected to Congress? There's not much you can do from here to otherwise, yeah. You've got to handle it in DC. There's nothing you can turn the interstate commerce switch back. So I think you know, 2018 Farm Bill. I don't think Congress really knew they were legalizing the toxic. Right. But you can be I can be agree. Now you want to open it up again. Now you everyone has eyes wide open. You're essentially asking Congress to legalize marijuana if you yeah, if you want to do it now, right? And this Congress, I I don't know if they're prepared to give it.

SPEAKER_02: 39:09

That's that's I always go back to, and I've read about this. I said it again recently, is it's drugs. And drug policy is not rational. And so you you're gonna have to get 60 senators to agree to legalize drugs. And that's and it's not impossible, even with low dose, but that's a bot a barrier that that makes this hard. And um, but I I I agree, you know, and I think that it's the the challenge of with, you know, to sign assign that letter is you know, is drug policy versus um versus economics, the you know, the economic reality of that, you know, but but it also creates an opportunity that if is you know, the one of the one of the challenges for the hemp industry that they've had is that is that it's it's hard to build a long lasting, sustainable, serious business industry on a loophole. Yeah. And, you know, and have you know, bring in serious Long-term permanent capital and you know and be considered like any other true CPG, in the long run, you need, you know, so you know, in a way, maybe this is an opportunity, you know. I don't know what the solution is. And this is, you know, is it whole plants? I don't know. But but yeah, it is is for get it right from the start, you know, and build something that then is is reliable uh and and can then actually support these businesses and do it the way they can then rely on. I know. I would love I mean you've been talking about these things all week.

SPEAKER_03: 40:32

Have you heard any solutions? Nope. I've heard lots of ideas, they all seem a little too creative. It's hard. I think it's yeah, I think I think our only shot is a moon shot from President Trump, some executive order as the midterms are are approaching. But that to rely on that seems risky.

SPEAKER_02: 40:57

Yeah. I to me I I I I think it's I think it's you you have to find a way to get the alcohol producers to, they don't need to necessarily support it, but find a way to say we're gonna we're gonna be on the even playing field. You know, it's not just age gating, it's trade practice, it's labeling, it's marketing. We're gonna, you know, it's we're not gonna put you know this in energy drinks anymore because the alcohol industry, you know, things like that. We're we're gonna we're willing to at least play on the same play level playing field, at least then alcohol may be willing to step back slightly, but then but you still have to then convince to do something. Well, that's the thing, is then you gotta get Congress to be willing to take that political leap of legalizing uh you know a psychoactive psychotropic product.

SPEAKER_03: 41:44

And then yeah, if the rumors are true, the alcohol industry really was behind this push to bloat blue bowl. Okay, maybe they won the battle, but they're still gonna lose the war, right? We everyone knows younger people aren't drinking alcohol like other generals. The future is THC. So eventually eventually they're gonna have to embrace this, right? Yeah, and maybe kick the can a little bit, but we're coming back in some way.

SPEAKER_04: 42:13

Um, Jason, we talked about Minnesota, we talked about hemp related to Minnesota. You are actually from Wisconsin, you are from Milwaukee. I and you spend time there. And what is the status of a state with nothing?

SPEAKER_03: 42:26

Oh, I'm really excited. No one believes me, but we have a very good shot at passing a medical cannabis bill in Wisconsin soon. Maybe as soon as the dynamics are changing in Wisconsin. Historically, it has been one of the most gerrymandered states in the country. Uh, there's a Democratic governor, but vast majority control by the Republicans in the legislature. But for various reasons, the legislative maps are getting redrawn, uh, and it's getting more competitive. And so that means that the GOP is taking a harder look at medical cannabis. I mean, the polling, you know, it's off the charts, right? It's I think it's in excess of 80%, right? And so Wisconsin is surrounded by states now, Michigan, Minnesota, Illinois, that have all legalized cannabis. So it's there. And medical cannabis, obviously, is a great first step, you know, help patients who are suffering. We have plenty of people ready to testify about how their lives are negatively impacted because they don't have access to medical. And plenty of Wisconsin state senators, frankly, are ready to do this. That the the Wisconsin Assembly is the harder part, but we have a pretty sophisticated lobbying group with the Wisconsin Wellness Campaign, which is comprised, this may surprise you, by a lot of Native American tribes in Wisconsin who would love to see the ability to have medical cannabis programs on their tribal lands because they have problems with opioids and alcohol addicting and medical cannabis. Can you help with that too?

SPEAKER_01: 44:04

Is there no voter initiative process in Wisconsin? Yeah. You know, I never realized that there weren't voter initiative process. That's because you're a California states until I started paying in the economic legalization. Right. I'm thinking, well, if everyone wants it, why can't we have it?

SPEAKER_03: 44:20

Yeah, yeah, and so we needed the electoral policy lineup and uh Wisconsin. So, you know, all the states that legalize adult use cannabis, not all of them, but I think the vast majority did it through voter in support. If you put the question to the people, the people are gonna say yes. Yeah. Uh moving the legislators is right.

SPEAKER_01: 44:40

Which is like what what's been happening in Pennsylvania, it's just like a never-ending cycle of legislative paralysis or infighting. Because they have to play to the base to get voting, you know, to it can be a shortcut. Yeah, like like what you're saying is that it could happen in February, it's December now. That's that's nice and quick.

SPEAKER_02: 45:02

I'm very encouraged. That's great. Yeah, can we like I mean, maybe if you can get like you know, old style to say we're gonna involve you in all in these old style, uh that would that would rally support LimeCoogle? Well, it's you know, the tavern league the tavern league is super power.

SPEAKER_03: 45:21

Yeah, and as soon as I heard that the tavern league at least would remain neutral on this, I thought, oh it's a big deal. Here we go. Again, they're looking at the numbers and they realize the feature is cannabis. Yeah.

unknown: 45:34

Yeah.

SPEAKER_04: 45:35

It's really called the tavern league? It sounds like a like a men's softball league that you play in the summer. Oh, you play in the tavern league? Yeah, totally.

SPEAKER_02: 45:45

What going back to the rollout of licensed in of licensed cannabis in Minnesota? I mean, it's it's both disappointing yet completely unsurprising to hear that um you've got sort of uh a rollout with lack of supply, and which means, you know, and and so you're gonna have this again, the sort of the supply-demand curve or whatever are gonna be completely messed up. And then, you know, likely what'll I'm guessing what'll happen because it happens everywhere else, is then there'll be too much expansion too quickly, too much oversupply, prices will crash, and you know, so it is the is there is the space, is the industry there trying to figure out how do we prevent the same problem from happening that's happened in like nearly every other state? Is the industry uh okay, maybe that's good. Well okay. I meant that it is an injurious question, but I recognize the folly.

SPEAKER_03: 46:43

So I I I spoke on a panel at NJ Business yesterday. I'm sorry if you attended that and you have to listen to me say the same thing. Um, but the uh we we drafted the Minnesota Bill to to uh keep well we the legislators drafted the the uh legalization bill with very low canopies to keep MSOs out. And I think that is needed to a large degree. So I yes, you're right about everything you said, but to the extent there will be a vast oversupply, it I think it'll be stunted a bit by those canopy limits. The biggest cultivation license gives you 30,000 square feet. Wow, yeah, yeah, right.

SPEAKER_01: 47:27

It's actually a perfect amount of canopy, in my opinion, 30,000 square feet to create a robust market. So I I think that you're you make a really interesting point, and that it it could be a healthy market with less price compression too, if if it's is smaller operators, but there's a lot of licenses given out with those 30,000 square feet, Stephen. And actually, there are not them.

SPEAKER_03: 47:49

Yeah, just agree, but there are relatively few. There are um maybe only a few dozen of those. And I don't think many of those were operationalized. Yeah, we do have a thousand microbusiness licenses floating around. Oh wow, that's a vertically integrated license. That's 5,000 square feet of canopy. I mean, we're relying on the little guys to band together. Uh you needed$500 and a pulse to get that license. And a lot of those folks thought, oh, once I get the license, the investment money will find me.

SPEAKER_04: 48:24

How's that working out? That's yeah.

SPEAKER_03: 48:26

Uh that is not happening. You don't think so? I think sort of our more sophisticated operators um who are already capitalized will use those micro business licenses to grow, but we need a lot of them, yeah, right to meet the demand.

SPEAKER_01: 48:41

Can you stack licenses?

SPEAKER_03: 48:45

You're not supposed to.

SPEAKER_01: 48:47

But can you?

SPEAKER_03: 48:49

There are creative solutions.

SPEAKER_01: 48:50

Yeah. I mean, do you guys realize how expensive it is to build and pay for a 30,000 square foot grow? I mean that that's still like more than five million dollars.

SPEAKER_03: 49:02

Yeah. I think we're see a lot of situations where there might be a very big facility and you have different suites, different suite numbers with microbusiness can.

SPEAKER_04: 49:15

That's what they want to do in Nelson, DC. Like all these legacy growers and put them in like a condo of a grow facility. Like, you know, they each get their own cabinets because that's where all the sweetweed is grown in BC. I don't think they ever go though. A good idea.

SPEAKER_01: 49:31

I think it's both smart, but also not smart, because I think that these are things that just point to the the complexity of a lot of regulation. Yes, right. And what it does to create this just inherently inefficient business models. The word I had in my head. Yeah, that are kind of designed for not optimal business um environments, but designed to create opportunity and fairness. But but when you put caps on things like canopy, you're also capping fairness, you're capping opportunity of how much opportunity there can ever be. So you can only get so much cannabis out of 5,000 square feet. And it's while this isn't the same as some of the social equity programs that we've seen have failures in other places. I do think that when you have two small caps, what you're doing is kind of giving somebody golden handcuffs. Like it at first seems like, oh, this is great. I got this license. I can I can go grow cannabis in Minnesota now. But you might not ever be able to grow enough cannabis to be able to hire enough staff to actually be able to support your business at the levels. You're just always going to be hamstrong. Yep. Like you you can't have a true executive team. You could maybe have a general manager, but you're not ever going to be able to hire a CFO or you just can't reach the scale to have the the basic internal business functions. Yeah. So I don't I I don't know what the longevity of that is. We'll see. Yeah.

SPEAKER_02: 51:03

Let's hope they're if they launch the more flexible.

SPEAKER_04: 51:06

Just kidding, Jason. Jason, one more thing before we let you go and bring on Rick and Jeremy who's here. Um we talked about it on our Friday show a couple weeks ago. In Minnesota, a city is opening up their own dispensary. Yeah, that's cool.

SPEAKER_03: 51:18

Uh there will be many cities.

SPEAKER_04: 51:20

Oh, yeah? They look at it as uh they can control where it goes or they may make money. Like, what is the drive in's one?

SPEAKER_03: 51:26

That is so we have several unique features of our legalization bill, one of one of which is allowing cities to operate their own dispensaries. I don't think that exists anywhere else in the country. I think there were experiments with this in the past. I've heard it happen in Canada here and there. Uh, but I think we're gonna have uh potentially dozens of really we have municipal liquor stores. Oh wow, and so the municipal cannabis store is like the answer to that. And it's not always the cities you'd think. It's they're gonna be, I think, smaller towns, sure, rural areas. They wouldn't get one otherwise. Well, yeah, you're gonna make money doing it, right? Right. You're gonna be the only game in town, possibly. And it's really interesting. Yeah, I will say talking about supply. I think a lot of folks in Minnesota thought our tribal nations would come to the rescue because we have this unique feature which allows them to not only grow on tribal land but participate in the off-tribal um cannabis business as well. But they've been having their own problems. Uh, you know, they're new to cannabis too, and uh they just haven't been able to fill the gap, unfortunately. Love that.

SPEAKER_01: 52:33

Love that. What are you excited about for 2026?

SPEAKER_03: 52:36

Well, I guess this it'll be the true launch, and I'm optimistic. You know, we have lots of lots of very eager entrepreneurs. And I, you know, unfortunately, we all know that entrepreneurs in any techno system fail. And I'm sure we're gonna see lots of failures. We have many people who I think are gonna do it right. So I'm really hoping I come back next year and I can talk about how great the the the market is, but I'm an optimist, and even as I'll boy, I hope I'm right.

SPEAKER_04: 53:06

I hope you're right.

SPEAKER_03: 53:08

Don't say nothing has been smooth so far, but I really hope we get it get it rolling this year. Yeah, good.

SPEAKER_04: 53:18

Well, thank you for joining us here today, Jason Terasek. Everybody seems to be on their way to the airport, everybody's coming in with their bag. I like that, and so I know you're on your way out. Thank you so much, and we'll see you. Well, we'll see you before this, but have a big OS a parting gear. Yeah, yeah. I will.

SPEAKER_01: 53:33

Bye.

SPEAKER_04: 53:33

Bye, Jason. Thank you so much. See? We started talking about height and is he okay? Yeah, click that there. Oh uh short people don't. We're not gonna take a break, but Jeremy, you're gonna come sit down. Rick, you're gonna come sit down. You guys talk for a second. I'm gonna use the washroom.

SPEAKER_01: 53:52

Are we still lives? Oh okay, great. Don't take your mic in there, would you? Yes.

SPEAKER_03: 54:00

Hello. Good morning. Good morning.

SPEAKER_01: 54:01

You're gonna go with a backwards high.

SPEAKER_03: 54:04

That's yeah, it's my travel fit.

SPEAKER_01: 54:06

Travel fit.

SPEAKER_03: 54:12

I was your MGR when it's yeah. But but it's been the only good one. I I you know, I thought the conference was a little sparse. Um, but it's still very good to see everyone. I mean, yesterday was like my wall-to-wall-to-wall meetings day. So, you know, it's good to see everyone. It's at the end of the day, but but you know, not a lot of uh heartwarming conversations about the industry. I would say like that's finding that a little bit.

SPEAKER_02: 54:39

I mean, because you're hearing it also from a different perspective, too. People will say things to you to you as a reporter differently than uh to our computer.

SPEAKER_03: 54:47

Yes, so I yes, very good point. I I deliberately did yesterday not doing formal interviews um because it changes the way people talk to you. And so I wanted to to try and figure out what everyone was thinking about. Um, the industry is very capital-starved. Like everyone talked to me about some specific challenge that they had um that was very reminiscent of all the other challenges that I heard about that same day. Um, so yeah, I I think it's it's just a very, very challenging time for operators. Very, very challenging. Um and you know, when you do a formal interview, uh you hear the highlights, right? And so when it can talk person to person, it's a little bit more.

SPEAKER_01: 55:26

Did you stumble into any stories that you're excited to start working on following? A couple.

SPEAKER_03: 55:32

Um I'm not gonna say that live, but but yes, um, yes, more, more. I mean, not necessarily tips, but more trends and things that will be top of mind for January. Cool.

SPEAKER_01: 55:44

Um hot, hot news, hot tips.

SPEAKER_03: 55:47

Yeah, I I I did get a lot of hot tips. I think about 80% of those never pan out. Um, so I try not to get too excited when I was 25. I got really excited every time I saw a tip, but not so much anymore.

SPEAKER_01: 55:58

So yeah, I've I've got some hot tips I'll share with you off air. Nice. Share with me right after this.

SPEAKER_04: 56:05

Yeah.

unknown: 56:07

All right.

SPEAKER_04: 56:08

Awesome. Well, we're all back. Hey everybody. Rick Bashkoff, Jay Rosenthal, Anna Rick Rothschild, Mark Hauser, Jerry Burke. Do you know everybody here? No, you're not. I don't know. I don't know you don't know. He writes uh cannabis musings.

SPEAKER_03: 56:20

Oh, I read, I read Mark.

SPEAKER_04: 56:22

Oh, much. Rick, I saw you holding court at the Cosmo. It was part of it. Rick really had an audience. That's a lot of courts. What are you seeing at the show? Question mark.

SPEAKER_03: 56:40

Much more intention. I mean, everyone's here for like two or three reasons and they're ready to tell you. Yeah. Um, I think I think previously actually you know, I you know, I actually I I appreciate that perspective, but it's actually been quite refreshing because the answer is usually like, well, I gotta be. Yeah. You know, and to me, that's like never really good enough because these are operators. So I always think of like, okay, you're here. What's what'd you give up to come here? Right. So um, I think this year it's like we're meeting with new suppliers, we have meetings on Wednesday and Thursday, we're gonna walk the floor Thursday afternoon, and then we're all out, right? It's like there's a lot of people who have like these 48-hour windows that they're coming in for and are pretty tactical. Um floor's dead, um, but I don't think that um I think there's things to that though. I I don't think it's I don't think the whole story is just looking at how crowded it is because it's a much larger space. Yeah. Um, they really they really busted it out. Um and and I think that look, I think it's a different time for cannabis. I'm sure most of the folks that you're talking to, like you know, I think booths are unless I I've seen some really successful stuff with like straight up buyers' clubs type things, right? How the original Hall of Flowers, which is like my favorite show for years, right? Was like I was there always as an ancillary or an investor, but like just being able to be a fly on the wall and just listening to buyer-seller discussions was beyond the value of being there, right? Here at like this much more big bangin' show, I think that this industry is gonna have to start either progressing by changing the location, changing the time of year, changing the focus, having like a specific focus um each year. Um but all that being said, I think that, you know, I I I liken to a little bit of how I think about Benzinga in that like everyone's coming there for an intention. And for a while it was capital, right? It was the Benzinga Capital Conference, and I know it's ignite it now, right? Um, but you know, the last like two years that I've been there, the reasons that people are showing up, probably by uh by the need, are starting to um to get a little bit more dynamic. I'm here to talk strategic partnerships. We're thinking about selling off three of our locations. So we have a couple people here, we're expanding into this state. And so I think that we're kind of maturing as an industry from less of the flash, right? Um, and and more of the substance when it comes to events.

SPEAKER_01: 59:14

Well, so you're not here like you were at Hall of Flowers as an investor, you're now here as an operator with little art.

SPEAKER_03: 59:21

I'm just here it's all Jeremy good news. I want to hear it.

SPEAKER_01: 59:26

And are you in the club of coming here with two to three things that you're here to do? And what were those things? What are those things?

SPEAKER_03: 59:34

Yeah, so um a couple things. So uh we kind of view events as much more meaningful to spend time with existing customers as opposed to net new business. The net new business conversations here are quite noisy. So um we find value in in really focusing in on our existing customers. So we get to have dinner, we get to talk with them at the booth for 30, 45 minutes sometimes. And honestly, it it's it's More valuable to me than half of the time, no offense to everyone I'm on the video calls with, but like it's so much more valuable to just sit down for 30 minutes. And for us as a software company, we're problem solvers. So I don't really have much of an agenda. Like, we don't have this like big banging suite of features that we're selling everyone constantly. We have the luxury that we sell one product. And so it's really nice to be able to just sit down and be like, what's going on with you? What's your biggest problem right now? Um, you know, not to get too corny, but like, what are you excited about? What are you not excited about? Like, and of course, I'll throw in like, you know, are we are we taking care of you? But like we're really focused on existing customers. So we set up a lot of those meetings here. Um, secondarily for us, um, and that's what I'll be doing the rest of the day. I'm actually not flying out today. I'm just moving hotels. Oh, wow. Um, but uh sounds terrible. I'm actually well, not too bad because MJ Biz was nice enough to have me speak and cook me up, put me up. So you're inspired. Wow. So so um, which I very, very much appreciated. Um, and so tonight I'm actually here. Uh myself and the co-founders um are here. So today, uh my MJ Biz is over after this discussion. I'm normal with them, we're locking ourselves in a suite to plan 2023. Um, and so we'll fly out tomorrow morning. So those are my those are my two or three.

SPEAKER_02: 1:01:20

Yeah. For our viewers that don't aren't really familiar with with you or your business, can you just take them in and talk about what you know what y'all do?

SPEAKER_03: 1:01:29

Sure, yeah. So very straightforward. We're a data tool for cannabis operators. So that is just about everyone across the supply chain. Uh, we have brands, wholesalers, distributors, manufacturers, processors, retailers. Um, we actually do know have um, which I I would love to say that we thought that we were gonna have all these types of customers. We really thought we were only building for brands and wholesalers. We do have some ancillary uh companies now that that use our tool as almost like a prospecting tool, right? Um and so the way that we uh source data is we do it through sourcing publicly available information on retailers' uh websites, typically their shop or menu page. Now, once we um uh view that, observe that information, uh that data, that raw data goes through a few different layers of what we loosely call a predictive. It's your third talk for a bunch of algorithms that stare at this data all day and are specifically looking for the changes in that data. Um, those observations of the changes in the data then get put through another set of logic, and the output of that is a meaningful um raw data set of events, pricing changes, new products on all this mass millions and millions of rows of raw data. Um, and so that's the backbone is creating an optimized uh data set. And then what we sell is just a couple of very simple UIs that you can access that tool with a very, very heavy um focus on decision making. So that was the white space that we tried to fill was the data platforms that we compete against and came before us, which we respect all of them, much tougher times to build way back when. Um, you know, the tools that we have available to build today are nothing compared to what Headset and BDSA had 10 years ago. So much respect to them. Um those tools are very, very powerful, uh can be a little challenging for your account manager, your brand ambassador, your inventory manager, your buyer, your G your GM or your owner with one or two locations. Like those data tools can be a little heavy. Um not a lot of data analysts in cannabis, right? And so like we've built some very, very simple interfaces that what we call the operators, the people on the ground, use. Rick, let me let me ask you this. We've Cultivated Readers Know, we've partnered with you guys, we've ran your data every Tuesday for the past few months. Readers love it. Um, when you're sitting down and your team is sitting down to help put those together for us, how do you decide in this grand world of cannabis data? Like, how do you decide what's interesting, what our reader should know about? Calendar, right? In terms of the seasonality of the industry, people want to hear about Green Wednesday right now. I really love talking about those things. But um, but but um, you know, I look like I think that those types of data stories were a little more exciting, maybe like four or five years ago, right? But I think that even when you talk to the average retailer, like Green Wednesday is part of the routine now, right? There's really not, it's it's it's routine, right? And so you see these um these little trends pop up here and there and they're interesting to read. Um, I don't know how much action there is that comes from those, right? So what we try, what I try and do when I sit down is we're looking at the calendar. We're also like, we're constantly doing analysis, right? Either for our customers or because we're trying to problem solve something within our own tech stack, right? And so a lot of the time, I'll just earmark a couple of those things. I think that's a good thing for cultivated media. Yeah, so some of it is kind of organic, and other times, you know, I'm rarely staring at a blank screen because our our whole team is like nutty about this stuff. We find a lot of this stuff just super interesting. And so, um, so yeah, yeah, I go through, but I do really like I try and think about the calendar because that really does drive that gets people to kind of stop and click. So yeah.

SPEAKER_01: 1:05:10

You said that the data that you share helps people make decisions.

SPEAKER_03: 1:05:14

Yeah.

SPEAKER_01: 1:05:15

And I want to dive into that. I think decisions are challenging, hard to do. Yeah, how do how do you make decisions with data? What's an example of something that someone could be doing with your data?

SPEAKER_03: 1:05:25

Yeah, sure. So I think that, you know, if you're an account manager in like, let's say, a state like New York, right? You just inherit an account uh uh territory, 150 locations, right? Um, you can spend the next two weeks going to every one of those locations' websites and looking at what products they have and how they price and all those things, right? You can enter it in a Google spreadsheet and do your own data collection and then try and sift through all these lines of data. Um, or you can subscribe to Lit Alerts and in a matter of moments, you can get a really good sense of what products these store, your the stores that you're responsible for carry, how they price, how your competitors sell through at those stores, um, as well as just getting a very broad sense of who are those brands that I'm gonna, right? Like a lot of the especially if you're uh uh representing a new brand or even in the in the middle of the pack, like understanding within your category and probably you want to understand in your subcategory, like who are your two or three closest competitors? I mean, if you're an edibles brand, you're not really a competitor with every single edibles brand on the market, right? You're a gummy. Or, you know, you've you've sold, like there's a great brand in New York Eating Botanicals that I'll give a shout-out to. Um, they've done a wonderful job of building a brand story. And so that's a perfect example of a customer that can log in and very quickly gain share by seeing where they are, where they're not, and in those stores that I'm not in, very quickly compare. Okay, I'm not in 10 stores. Who should I focus on next week? Which three should I call next week? Right. And so the interface is what the original co-founders of the company really felt was the white space that we could fill. So more decision making, like on the on the wholesale side. Um, just straight up high-level competitive analysis in minutes, right? And I'm talking like I'm sitting in the parking lot, I have a meeting with a buyer, I've been running all day. I've been like, I just drove for three and a half hours, right? I'm in the parking lot, and I need to know right now an answer to my question because it's the one thing that I didn't have time to look at before I left, right? So I need to understand how garden greenies is priced at this store for eights. And I go boop, boop, boop, and in three minutes I go, okay, they're at this price. I now have that information from out. Like the average, this is one of my favorite stats about our software, average time spent, 13 minutes. Right. And so we and we track the um the actual events that are are happening. And like most of those sessions are driving to an export. Um, we there's a couple of different ways that we can look at the URLs and just kind of like time spent, understanding how, like, what kind of elements of the page that they're clicking on. But this is like this is a pocket tool, right? Because the the unique insight that the co-founders had was the data tools that are out there are very powerful again, but they don't move fast enough. I need my answers right now. I have five minutes to look at data. I can sit here all day and sift through stuff, right? So those are some examples of, but like on the retail side, it's super, it's great. It's like three use cases spying on my competitors, what are they carrying? What pricing, right? Um, validating vendor pitches. Everyone's got the best flower, sell through at premium prices. I'm in a hundred locations, right? Now I have this pocket tool where I go, oh, wait, he's at 98. Look, I'm telling the truth. Look, keep talking with these guys, right? Um, and then the the the last use case on the retail side that we see a lot of, and this is particularly in some of the growth markets, is where I my next location. In our tool, you can go in our analytics screen, filter by a group of counties, a zip code plus radius, and very quickly you're looking at what brands sell, what retail stores are performing, what's an average sell-through rate look like. So um, you know, those are those are some of the other decision-making, you know, uh aspects of the tool.

SPEAKER_02: 1:09:19

What are you seeing is I'm sorry, you're um what do you see from your perspective as the challenges for the industry, you know, going forward, um, you know, and your customers, you know, other than getting paid.

unknown: 1:09:32

Yeah.

SPEAKER_02: 1:09:32

The challenge for everybody's challenges.

SPEAKER_03: 1:09:35

Yeah, one of our customers posted uh a post that I think really resonates with a lot of people is like, you know, this is the week where you get to go see someone do a big uh you know display on the floor of MJ Biz when they owe you$100,000. So um, but look, I think I think the biggest challenge is uh I think we're living through the last ditch era uh last ditch effort era of prohibition, right? Like the um the most recent uh uh hemp ban or whatever you want to call it, it's not hemp ban, it's you know, whatever you want to call it. Um, what's going on in Massachusetts, um, you know, doctors uh having the you know the ability to prescribe, take it away for veterans. I mean, it's like we're living through this like last push of, you know, we're gonna try and push out a lot of headlines that say maybe we made a mistake. Um and I I I feel very strongly that most of this will be defeated, but it's unsettling, right? And so I think that you know, for someone like myself who's kind of sat on the sideline for advocacy because it was convenient, um, it's not my strong suit. I'm a bit of a loudmouth, so maybe at times like I didn't I didn't think I was like the right person to be in the room. I think it's time for us all to get over that. And I think we all got to participate now because like if we get past this last push, I I I do kind of I probably stop predicting, right? But um I feel like I feel like if we get over this, I mean these are to me, these are like we're grasping at straws here now. Like we're really like looking for reasons to to peel this thing back. And you know, we just I mean, we just need some of the old fogies to just move on with their lives and focus on something else. Um and I and and I think that's the that's the time, you know. And and there's there's you know, and it's true. I mean, like I I battle this even in my own personal circles, right? When I have conversations with people, and um, I've had some really rewarding uh I got a guy on my block who didn't like me when I moved in because we um and he knew that from being on your bot of course out in the student car. Yeah, I got kids, I can't smoke inside. So so he wasn't really a big fan of me. Um and Irish guy, big drinker. Um, and I just saw him at a restaurant the other day. He had stopped drinking because of health problems and he eats edibles. Good for him. So and I've had a lot of these things. My wife and I bought our a house that we currently live in. Um, you know, the the real estate agent was an absolute delight to work with. And so, not unlike you might say, like, hey, can we get you a gift basket or what's your favorite drink? A total common question, right? So I'm like, hey, you got a favorite drink, or can I get you cannabis or something like that? And the guy looked at me like I was nuts, right? And he's like, What do you mean, cannabis? I'm like, dude, it's 2021. You look in my life. Like, what do you mean? Like, and so I give it to him, and you know, like two or three, you know, your real estate agent keeps in touch. Let's how's everything going? You know, and so like he's sending me all these like you know, Jimi Hendrix references. We got really lit last night and all this bullshit. You could play. I see him, it's a true story. I see him in the hardware store in town like six months later, and he pulls me aside and he's like, I got level with you, man. I I wasn't using those party. I have severe, severe pain in my feet. I've been battling this for 15 years, and I have to tell you, man, the gummies that you gave me, I've got first good night's sleep in 10 years. Yeah, that's what I've been using it for. That's amazing, you know. And it's like I I I get these stories constantly, and it it's a good reminder for me that like, you know, look, like I read the headlines, I get pissed off about them too. You know, like Sabbath and his crew, you know, still in terms of it. Um I think you share that. A lot of people, you know, and they are another another, you know, another headline out there, you know, like I get pretty worked up as well, but I think about those kinds of things and just reminding myself that like you know, there's a lot of people getting a lot of use out of this. Adults should be able to make their own choices. Um can I go on a rant for a second about something else?

SPEAKER_04: 1:13:45

So, like about Vegas?

SPEAKER_03: 1:13:47

No, also about like the argument about uh harm to children, right? So I watch football every Sunday with my kids because they like it too. Um, and I I gotta be honest, like the commercials that come up during an average NFL uh or any other type of story. I mean, we watch baseball too in the playoff. Um so like alcohol ad, right? Dad, what is that? Pretty easy to explain. They're adult beverages. You know, we were at, you know, we're at Uncle Perry's barbecue, we were all drinking it, you know, same thing, you know, adult beverages. Cool, dad. Um, gambling. Yeah. Next is a gambling ad. I mean, dad, what's that? Oh, you know, dad plays fantasy football, or like, you know, the it's an adult thing because it's super risky. You can lose a lot of money. Okay, dad. You know, it's that. Um, the next ad is probably one of the most terrifying visuals I've ever seen in the new horror movie that's coming out, right? And so there's all this like buildup about like what are our children seeing? And I'm sitting at it with a three and a half and seven-year-old saying, like, man, a cannabis ad is the is one of the least things I'm concerned about. It's an easy thing to explain away. I've already done it with alcohol ads. But what is my kid upset about when he goes to sleep? The horror film that he saw. It's a big gambling, which is probably one of the biggest risks for him. I got two boys. Yeah, boys, right? So for gambling is the biggest risk for these guys. And so I I I really think that you know, the the concern for our children, like with all due respect, like we're living in a time of kind of limitless access. This is way worse, yes. And so, and so you know, I I think that that is going to happen that storyline of theirs has to specifically be attacked because it is and and even like I think we've like hit ourselves on a lot of this stuff. Like, let's talk about age gating, right? Like, are you kidding me? Like today, it's a yes or no checkbox. Right. If I'm 16 years old and I would be this kid, right? Like I I my math, my mom's credit card was on the counter. I wrote down the numbers and everything, right? I know where I live. Right. So I go to the website, I click yes, I enter the information, I just gotta make sure that my mom's not home when you get here, right? So like I think that we've convinced I'm not suggesting that age gating shouldn't be because it's a great deterrent, but I think that the you know, kind of child use and all that as a as a like center point for prohibition is the weakest, but it's also the one that gets the most attention. And so I think that's the one we have to attack. Well, but I mean, but the kids has been an escape for any sorts of you know, relatively authoritarian crackdowns are I I thought you were gonna even go simpler and say that you know the football is worse for kids than the head injury. Like it's just as simple as that we could have. I'm gonna punch the brain the premise and use it. Right, right, right. No, I mean I I did sports as a kid, too. It stands for cool right, right, right.

SPEAKER_01: 1:16:50

You are so right about television though.

SPEAKER_03: 1:16:52

No, that's that's right.

SPEAKER_01: 1:16:52

Yeah, yeah. I go to Taco Tuesday, and oh yeah, and sometimes like and there's all these TVs at at the talker, and and if there's sports on, I'm like, I'll let my kid I'll be like, okay, we can sit where we can watch the TV because the sports is on. If the news is on, I've been like, you know, I cannot like eat dinner and I don't want you looking at that while we eat. Sometimes it's just like pictures of war, and it is so disturbing.

SPEAKER_04: 1:17:16

And there's a there's another paper promotional sky riszy. Like I swear, I I this country must be riddled with plaques the riot. That is a thing, yeah.

SPEAKER_03: 1:17:30

The pharmaceutical ads, and I moved to the US. It's unbelievable. I was not used to that. It it's it's crazy. Like they don't advertise pharmaceuticals. It's yeah, yeah. Yeah, I mean, I I think that like the ads um can be far more disturbing also because a lot of the time they're watching um uh on a on it something like a YouTube, right? So I had to intervene at one point and say YouTube Kids is all you know, the app that you guys can watch now. Right. Unless I'm in the room and I can oversee. Um, so yeah, I think the butt the kids thing is is uh is something we should really try and attack. I mean, like and also like there's a there's plenty of data that suggests that underage use is decreasing.

SPEAKER_04: 1:18:13

It goes down Lily.

SPEAKER_01: 1:18:14

You know, it goes so Rick, you said that you really hadn't thought of yourself as an activist or an advocate. Sure. And I had a similar story. I really thought of myself as an entrepreneur when I started my first cannabis business. And then it was through that feeling of feeling like I needed to protect this baby of my business that that really sent me into learning about policy. And so it sounds like you're thinking about your 2026 plan, you're gonna be meeting with your partners strategically. How are you thinking about um engaging in policy?

SPEAKER_03: 1:18:44

I don't remember to answer for you yet because I think I really just came to this realization in the last few weeks. And so I think I'm working through that process right now. Um, I still I'm I'm still a loud mouth, so I don't know if I'm the I'm the one who should be the talking piece because I do think that there is, it's the same reason I don't work at a big corporation, right? Like my brother, uh big corporation guy, has been very successful, and a lot of that is he knows how to play the game. Um, and I don't think I know how to play the game yet, but I'm good at math and I'm good at data. And so what I've been trying to do out of the gate is helping though empowering those people with information that I have access to.

SPEAKER_01: 1:19:22

Yeah, there's lots of ways to participate.

SPEAKER_03: 1:19:27

I might go farther. I I'll tell you, I participated in um a few of the comment periods for new for New York regs, and I was kind of blown away at how difficult it is to thread the needle. Yeah, even as I was making my own suggestions, I was like, well, that doesn't work for processors, right? Or yeah, that's gonna create an awful situation of intake for retail or something, right? And so it's it's I don't think I'm the one who has the full view of a supply chain to really make those suggestions. I actually think operators are probably in the best uh position to do that because they're living And breathing this. So I'll probably, you know, just try and um but but also encourage others that are my peers in the data space to do the same. I think might be another good thing for me to do.

unknown: 1:20:11

Yeah.

SPEAKER_02: 1:20:12

It does seem like uh a a theme I've heard a lot this week is, and it may just be the folks I'm talking to, but that uh advocacy realization that advocacy on all ends isn't working. The way the way the industries approach advocacy is just and uh there does, you know, uh one plants is probably whatever that even means is is uh you know it is is sort of the base this sort of idea that everybody needs to be working together here and and having all these diverse groups, not just you know, not just hemp versus non-hemp, but also within, you know, there we've cut it up so many different ways, and none of that's working. And it's just a full-on press, full, you know, towards one goal, you know, is the only way that it's is this is gonna work out because otherwise it all this is just we're continuing to spin our wheel.

SPEAKER_03: 1:21:04

I think that I think what just happened with the um the bill that went through that changed the game for him. I think I think we've probably learned that we don't understand the game as as much as we thought we did, right? Right. That's and I think that somebody put it, yeah. And I think that um again, I don't I don't know all the details, right? But one story that has been suggested is you know, bourbon lobby calls Mitch and is like, you really want to be, you know, uh known for legalizing gas station weed, right? If if that's really what what pushed this thing through, um, you know, there and I think the people who are in the rooms should think about how we lobby and how we raise money. Um, I know raise money is a funny thing in this industry, but like, you know, unfortunately, our government's coin operated, and you know, there's gonna come a time where um you know the right players are gonna have to make the right moves. And and look, I mean, even as I say that, I think about you know, the MSOs who have um contributed large sums of money to these types of effort, and even um, you know, single state operators and even the mom and pops who've who've contributed. But I think I you know, I I I'm not sure if I think it's really we don't understand the game and we don't have the right players who are who who have the the ears of of the people who actually can push these things through. But again, I I do need to disclaim uh I'm really not in the inner circle on Wills Howard. We'll get you there. You'll get there.

SPEAKER_01: 1:22:26

It's a big year. I don't think you need to be on the inner circle. I think it's just about participating.

SPEAKER_03: 1:22:31

There's a lot of disparate concentric circles, I think. That's what I'm that's the key challenge.

SPEAKER_02: 1:22:36

How many trade groups are there in this group?

SPEAKER_04: 1:22:39

Right. Well, fewer than a year to be, but probably too many. Yeah, still probably too. Rick, thank you so much for making the time. It's good to see you out and about. I'm glad you're on a successful show. Safe travel's back, but not today. Yeah, um, sometime over the weekend. And uh good to see you, we'll see you back on the East Coast. Looking forward to appreciate it. We have one last guest coming on. Okay, Chris. Uh Chris, you gotta take your mic from from Rick. Um Jeremy's gonna go. Are there two? Two mics.

SPEAKER_01: 1:23:08

No, two bathrooms.

SPEAKER_04: 1:23:08

Oh, the two bathrooms, yeah, yeah, yeah, yeah. Are you leaving, leaving? You're just going to the lock?

SPEAKER_03: 1:23:13

No.

SPEAKER_04: 1:23:16

Oh yeah, Chris, you're you're our last you're our last guy. Oh, it's okay. And as soon as this is done, we're all you can be all right for me and I gotta read it.

SPEAKER_03: 1:23:30

Yeah, alright. We'll see you later. Bye bye. Mark, been a while.

SPEAKER_05: 1:23:34

Yeah.

SPEAKER_03: 1:23:35

We'll do for another coffee. Uh down to your neighborhood.

SPEAKER_04: 1:23:38

Where are you, man? So I tell you, sure.

SPEAKER_03: 1:23:43

20 minutes away.

SPEAKER_04: 1:23:44

Yeah. Well, well, as we wait for Anna Ray to come back, you are Chris Emerson from Level. I'm Jay Rosenthal, Mark Hauser, for those that are joining us uh midway through. Thanks for being here.

SPEAKER_03: 1:23:53

Yeah, thanks for the invite.

SPEAKER_04: 1:23:54

You're our last guest. All right. Well, hopefully you're standing in the way, you're standing between between me and the airport right now. Um but give us a little, give, give us a little bit of the footprint uh of level. Because uh when we say you're coming on, there was more than one person that was like, oh, Chris is awesome.

SPEAKER_03: 1:24:11

Okay, wow.

SPEAKER_04: 1:24:11

That really happened last night. It's true.

SPEAKER_03: 1:24:14

Uh yeah, footprint of level. You know, we um we've been operating in the regulated market for better part of 10 years. The thesis of the company um is around effects-based or targeted effects from cannabis formulations from emergent cannabis not accessible from the plant alone. So combinations of acidics, neutrals, and you know, non-degradative or degradative enzymatic byproducts, things like that, right? So like CBN, THCV with acidics and and neutrals. So that was the the thesis of the company. Um and then you're a scientist. I am a scientist, yes. PhD in small molecule chemistry. Um, so that's you know, I think really influenced.

SPEAKER_02: 1:24:50

But it wasn't clear how the first couple how we went about this.

SPEAKER_03: 1:24:54

Down it down for it. And then uh yeah, we just really focus on hey NRA, uh on a solid oral dosage forms. So sublingual and uh and tablets, right? A solid oral keys. Solid oral dosage forms.

SPEAKER_02: 1:25:08

Oh, solid tablets. I thought you got it. Okay. Yeah.

SPEAKER_03: 1:25:11

So um that's what we've been focusing on for for the past 10 years. Like that, and that's that's our our entire focus.

SPEAKER_04: 1:25:19

Why why was that the focus? Well, I I never was it a gap in the market, was it something you felt pat like what what was the well a uh it's an it's an amazing delivery vehicle, right?

SPEAKER_03: 1:25:30

It's one of the reasons why pharma nutraceutical supplements, 60% of all of them are in this form factor. Um, once you have manufacturing down, it's very, very efficient. Plus, back in 2016-17 when we were developing this, trying to put THCV in a cart, it was like a$500 cart. But the effect wasn't interesting enough to, I think, get really widespread adoption. The supply chain wasn't mature enough to really support it. So um, and I never really wanted to be in inhalables or traditional adjustables. I wanted to have a very clean, simple, um, minimum ingredient product that was consistent, effective, standardized, and this is the way to do it.

SPEAKER_01: 1:26:08

I have to first of all really good to see you. Good seeing you. We got to hang out at the airport um on the way to Vegas. And and you know, you are outnumbered. You've got three out of four of us live in Sonoma County in Northern California right now.

SPEAKER_04: 1:26:21

I'm used to live in the Bay Area, but not.

SPEAKER_01: 1:26:25

But um, Chris, I have to give you credit for introducing me to some minor cannabinoids for the first time. I um I had never tried some of the different letters of of cannabinoids before, and you were creating um these really different, unique products that I had never seen before. And um what's come from that now is a lot of people I think that have followed behind, often in in in the kind of synthetic and conversion spaces of taking CBD isolate and creating Delta Eight, like you had a Delta Eight product inside the the legal cannabis regulated market. Um I'm curious of just what what you have learned about bringing minor cannabinoids to consumers for the first time when nobody had ever heard of these things. Like, do people just try cannabinoids if they don't know what they are? Or is there some level of education? Like, I I was a little like, what is this gonna do to me? I didn't know. And I work in the industry. Right. So, what has that been like?

SPEAKER_03: 1:27:24

Yeah, that's a good question. I mean, yes, education, education, education, uh, which is very can be very challenging. It's a high-touch industry, tends to be a lot of turnover uh within retail. You have to educate, train, staff, bud tenders, they're the gatekeepers still. Um, and we run really lean as an organization, always have. So that it's always been been a big challenge. And, you know, we started putting yeah, THCV on the market in 2017, CBG. We we came out with Delta 8, which it's it's very unfortunate. It's a little side tangent, but it's very unfortunate because Delta 8 is actually an amazing cannabinoid and it has some very, very powerful therapeutic benefits, especially you know, anti-emesis or you know, helping to calm stomachs and things like that, um, mitigate pain. And just and I love having it in formulations because it really helps complement. But we've had to remove it all since you know it blew up in the on the hemp scene in the unregulated space because the insurers were going to the the retailers saying you can't have this in there, even though it's allowed by law. So, you know, it's uh kind of um an unfortunate byproduct of of everything that was happened. But but getting them to market, you know, we did them in low dose first, uh, you know, like a three milligram sublingual, because yeah, we're kind of experimenting in real time. And although that these compounds, you know, are naturally occurring and have been in the plant, humans have been consuming them in minor ratios for thousands of years, we haven't really looked at them in a purified sense and what that could do. So, you know, we we we thought about it a lot and um you know, looked at um, you know, like thresholds of toxological concern and tried to use best practice from pharma to okay, what could be put on the market and feel we're still doing it ethically and morally, but we're still trying to push the space. And so um, you know, all of those things kind of coalesced and we were out there for years before finally some of the larger adjustable companies finally came out. When CBN really started coming out, then other people were jumping into the the emerging cannabinoid space a lot.

SPEAKER_01: 1:29:19

Aside from THC, uh, what are the most popular cannabinoids that consumers? I mean C B D Oh okay, okay. Um of the ones that people really know, like what are some of the other ones?

SPEAKER_03: 1:29:31

So yeah, CBN, THCV, you know, CBG has a very, very strong following. And I think when people discover it and understand how amazing it actually is, I think for um to really help with calming, right? It's really good stress relief. It can help with people who suffer from anxiety or high stress situations. And like anything in cannabis, it's not a silver bullet. It's not going to solve your problems, but it it takes the edge off to give you the ability then to make a behavioral change or take the time you need or change your diet or do these things, right? And so it's one of the things I love about cannabis, and then all these other cannabinoids that that have these somewhat nuanced effects, but I think um, you know, dose properly in the right delivery vehicles, you know, they can have profound impact for for human health. It's wild.

SPEAKER_02: 1:30:15

It seems like the um anti-nausea would be is perfect for the rise of GLP1s, um, which one of the major side effects is is nausea. Okay. Um, so uh, and with the ontake of those, um, you know, that maybe maybe maybe you you mix the GLP one, you titrate and some you throw it energy, and then equalize. I like that. Um uh what I where is then the uh the challenge for I mean what what's what I've always found neat about your company is you are really making something different. Um, in an industry where there is an ocean of flour, there's an ocean of other edibles. Um, you know, but but what I what I like is that is that uh it is um it's about as discreet as possible. And so and it's it's easy. I mean, you know, it like tinctures in a way, but even more so than tincture because the dose of tinctures, yeah, the and it's you know, and and you don't even taste it. Um and so you know, there is an ease to it uh that you know makes adoption very simple. Um, but you know, with that, you know, where is the challenge? But also is there an opportunity, uh, you know, assuming that the the the hemp loophole closure does actually take effect in 340-ish days or whatever, 330, you know, to sort of step into that consumer base of life that has been trying this and wants to expand out.

SPEAKER_04: 1:31:42

You're getting your delta eight back.

SPEAKER_02: 1:31:44

Yeah, yeah.

SPEAKER_03: 1:31:46

Uh yeah, so there were a few questions in there, Mark, that you have to hear about it. Yeah, one, yeah. Uh and remind me of the first part.

SPEAKER_02: 1:31:57

Well, the first part was just my my forcocked idea about and yeah, the DA to the DLT one, yeah. As a time release, yeah. I mean, where do you see the challenge, but also is there an opportunity for um from somewhat unique um form factors such as yours?

SPEAKER_03: 1:32:12

Yeah, yes. I think you know, one of the things that so we're really known for higher dose formulations. That's that's how we've built the company with Delta 9 uh in the regulated markets. I didn't get into this to get people high. We're very good at it. It's not hard, it's THC, but it keeps the lights on and then allows us to keep pushing in this other ways. You know, I think we're you know, we're a top five ingestible in California, but we don't make a gummy, right? Everyone else is all gummies. And so I think education of hey, this isn't just this product doesn't belong just in the wellness section. Like we should be sitting directly with gummies because that's that's where we operate. But a lot of times we get pigeonholed into wellness, and I think that is a challenges how much customer awareness we can get. So we have to be creative about really driving that awareness. Um, that's one of the issues. I I think when we first launched, there was a significant amount of pushback. Like, we're not taking pills, right? This is a plant. This is we're not doing pills. You're like, yeah, it's the plant in a tablet, right? And it's one of the reasons why we are um very diligent about talking about as a tablet and not a pill. I think it's important and we always have. Um, so so those are some um challenges to overcome, especially in more mature markets. Now, when we look at emergent markets, New York, New Jersey, or Pennsylvania medical market, people get it. It's a lot, you know, they they don't have any qualms. They I don't think they have all of the um you know historical cannabis culture that is influencing how they're viewing it. Um, so there is a lot of opportunity that way. And then as far as the the impending hemp ban, you know, if it does um come into effect as it's written, you know, we should be able to navigate it pretty well because our focus in the the hemp DTC space is either very, very low amounts of THCA or no T at all. And so those formulations that we use, a little bit of THCA, because it it really has a big impact, I think, on the benefit of all formulations, we can easily remove those and they will still be very effective. And so, yeah, it's we're all gonna see what's gonna happen, right? It's gonna be a nail-biting 300 and some odd days to see uh what actually happens. And, you know, I think there's going to definitely be fallouts in different ways because, you know, supply chain is going to get disrupted. How is, you know, how will our banking and credit card solutions be impacted by it? Even if there is actually now a federal statute that says here is the explicit definition. I think we don't understand what's going to happen as we go out on the risk curve to keep pushing in it. So, yes, I think a lot of opportunity, but uh again, a ton of unknowns. It's cannabis, hem, blind error.

SPEAKER_04: 1:34:48

That's the one known is the unknown.

SPEAKER_01: 1:34:52

You're bringing up an interesting point as you're uh kind of diving into this hemp discussion, that one of the things that the the beverage space has been really loud about is how dispensaries aren't the right channel for beverages. And that's why they're really pushing uh to whether it's a carve out or just an opportunity to be outside of the dispensary channel. And um, your form factor is similarly unique in that it's not the thing that people think of necessarily when they think about going to a dispensary to buy joints or vape parts. And um in a utopian world, like where where is the best channel for consumers to buy level products if you could if you could start from scratch?

SPEAKER_03: 1:35:37

Yeah, I mean, I think uh, you know, Walgreens, CVS, go to the pain aisle, you want advil tylenol or some cannabinoid formulation, right? And that that's that's always been the vision of the company. I think a lot of cannabis companies have this kind of like, you know, vision too. But yeah, we can make a product that has a minimal impact on the environment. We can do it in ways that are, you know, regenerative, that we essentially are leaving a smaller footprint than we're taking, and then do it in a way where we provide a plan-based solution for individuals that is actually it's effective. It works. And in line with that, then yes, can we continue to push the science and really understand how this works, what it really works for, what doesn't work for it? You know, that's that's another aspect that we are continually pushing on. We've run, we've run a couple of you know, IRB approved, you know, um, you know, blinded studies looking at cannabinoids for different impacts. Um, you know, we've we've run them on our own. Uh, we've we work with um more better, with they have a really good real-world data collection um platform. And we're we're just finishing a sleep study with them. So all of these are important because it's for one thing to be like, yeah, we should just be on the shelf of everything. But we're not saying that, understanding, hey, we there is so much about cannabinoids and how it impacts physiology and different pathologies for humans that we really need to tease out. But we do know that there is a there is a very inherent level of safety built in because this is a plant that we have co-evolved with as a species for at least 10,000 years, but probably hundreds of thousands of years. Like this is a plant ally for humans. So, yeah, how do we coalesce all of that and do it in a way where we can have rigorous science to help support it and then you know build consumer products that are effective and safe?

SPEAKER_04: 1:37:19

Amen.

SPEAKER_01: 1:37:20

Yes, yeah, I mean, well, so you clearly have a a pharma mindset, you understand, you understand that side of the world, even though that isn't where you're playing right now. And and I wonder why you're not. I mean, I think that epidialects and sativax, it's incredibly expensive to get through the FDA. I know that. And so maybe that's the reason, and it's that simple. But these businesses on the other side of that highly expensive process um also have been able to generate tremendous amounts of of revenue. Um and I just I wonder if you have thought about it, if you're doing studies.

SPEAKER_03: 1:38:01

Yeah, well, I I don't think that the I don't think access to this medicine and this plant should be gated by like this should be freely accessible and it should be it should be affordable. And that's that's what I want. I don't want it gated behind, oh yeah, we know it's incredibly expensive to get an FDA monograph. Right. Well, now we're gonna overcharge for it. No, it's literally CDD from a plant, right? Let's make it let's make it so we get widespread mass adoption and we help drive the narrative forward. So yeah, I don't I don't want it locked up somewhere. I want to make it accessible and and have a have an impact on a huge support of the population. So that's why it's and I totally get that.

SPEAKER_01: 1:38:37

But then while it's you want to make it accessible, but the FDA path would make it more accessible in some ways from a legal perspective. Right.

SPEAKER_03: 1:38:44

Yeah, I just you know it is not my world. I only understand it a little bit. Yeah, the amount of time, resource, energy, politics go into this, you know. We're talking about compounds you can't patent because of naturally occurring. So a lot of these companies now are, you know, they're med cheming it, they're making derivatives, they're just trying to find something that'll work that they can own that chemical space to push forward. Um, yeah, I don't know. It's it's just not interesting to me. Yeah, yeah.

SPEAKER_01: 1:39:09

I'm just I'm just asking.

SPEAKER_03: 1:39:10

No, I I really appreciate it. I think it's a very valid question.

SPEAKER_01: 1:39:13

Yeah.

SPEAKER_02: 1:39:13

No, I I got asked the question yesterday by somebody asking about, you know, why isn't pharma in this or is pharma just sort of waiting in the wings? And yeah, I mean, a lot of it is that FDA, you know, I mean, there's only a handful of DEA licenses out there where you can be doing federally approved, you know, sort of uh phase one, phase two, and all do the work that's necessarily in order to get a a drug a drug, what is it, a new drug application approved. And so that I, you know, so yeah, I mean, it really is so much about money and time. Um that but but but it does exist. And there are a handful of companies that are trying to do that, but that's also, you know, it's also a very different sort of outcome that they're going for, um, for better and for worse.

SPEAKER_03: 1:40:00

Yeah, and I mean I I think you know the the I think it's the Botanical Drug Act. It's been around for like 25 years, and only one naturally occurring drug formulation I think has actually made it to the final stage and gone to monograph, right? That's that's um that's a very, very low percentage. Uh so I'll fair.

SPEAKER_04: 1:40:20

Yeah, yeah. Um you've been in the industry a long time. Um and and you came in trying to fill uh fill this gap of what you're interested in. Like are do you see anybody else doing something interesting that is adjacent to you or cousins to what you're doing? Uh or does everybody else still suck?

SPEAKER_03: 1:40:35

No, no. There's there's really solid great operators in the industry, you know.

SPEAKER_04: 1:40:40

Um I talk shit here. Nobody's watching. Yeah, I'm just I I was looking for the screen where you're how many how many people are nasty comments uh on any team. Uh not just on Jeremy Twitter.

SPEAKER_03: 1:40:53

I think that um, yeah, well, and so in my world, uh I think anyone pushing genetics, like what interesting things can we do with genetics, right? Not only on the D9 side and you know, whatever the new flavor of the month is, but can we express new cannabinoids? Can we change the ratios of them? That really impacts the supply chain, right? It helps drive costs down when we have better genetics, higher expressions of cannabinoids. Um, any type of delivery technology, uh, people who are working on that, right? There's for cannabis, right? It's uh it's lipophilic. So it's like oil and water when you put it in the body, hence why we have to do these. If you're not ingesting it, why you people play these tricks with them, if you will, but ways to solu, solubilize them, make them so they're more bioavailable. There's a handful of them to help with that. So, and a lot of it is older technology. So people working on newer technology to solve this, I think is is really interesting. Um and, you know, I mean, there's there's big brands out there too that I just really admire because you know, we we aspire to be a you know a well-known national brand. It's it's harder in our category to do that. So when I see a lot of these companies, you know, really scaling and and building great brands, um, it's it's good for me to see because I'm like, okay, there's some hope.

SPEAKER_01: 1:42:04

Talk about uh how you've looked at your state-by-state expansion and how you've chosen both what markets to target and um and also your partnership strategy within those markets if you have any.

SPEAKER_03: 1:42:19

So yeah, when we when we look at it, it it's you most um obviously we want to take a an asset-light approach as much as possible. Can't stand up um infrastructure in every state. So looking for partners that um don't have a competing product to ours, which most don't, but that also means that they don't have the you know the manufacturing uh knowledge for it or the equipment needed for it. So we have a mobile facility, essentially. The way had one in the Midwest, we have one in New York that can service Pennsylvania, um, New Jersey, and New York. So my team flies in, we pick up our equipment, go to our licensed processor partner, manufacture for a week. You know, we can manufacture a million tablets in a week, leave them tablets, they fill finish as needed, do distro, weed run sales. So that's our model because if a good fucking model it can't isn't it in this if he's available at the end of the day.

SPEAKER_01: 1:43:17

Oh, I have a car.

SPEAKER_04: 1:43:19

I can get there.

SPEAKER_03: 1:43:21

Um so it's good. We we can minimize the amount of capex needed. The partners don't have to rely on needing uh you know equipment lines for it. We can manufacture in 300 square feet. Like we don't need a lot of space, we don't need a lot of power. Um, the product is very amenable for this type of strategy. And so, and we have a couple patents on our process, which allows us to do it. It's a completely dry process where most people, if they're doing things like this, they would have two extra steps because you would you it would be a wet chem, it would be a wet process for infusions and things like that. And our process is completely dry, which is why we can roll in in five days and do this and then leave with under these kinds of conditions. So looking at all that, you know, finding partners, um, single state operators, we've worked with, you know, large MSO, smaller MSOs. We kind of did a design of experiment, like, okay, let's figure out what kind of partnership we think works best. And so, you know, six states, we probably had four different types of partners in that. And uh yeah, learned a ton of painful lessons over the past 18 months. Um things haven't worked. Um, we had to divest Michigan because right when we launched, the market just started like crashing. So we gave it a shot for a year. Um recently, um, you know, our partner in Ohio needed to change kind of how they were doing business, so had to leave there. So we've lost a few states over the past uh year and a half, which is unfortunate, but um, you know, still going strong in the other five.

SPEAKER_01: 1:44:45

It's interesting that you bring up Michigan, uh, because we know that the industry in many in many markets like suffered from extreme price compression, and you mentioned that. But I wonder if if your category uh is is subject to that in the same way as flour.

SPEAKER_03: 1:45:01

Yeah, we don't miss it's really challenging in markets, especially mature ones like Michigan, where I, you know, I don't know, at some point it was like get six gram carts for$30. When you're when the the consumer, when they're buying 200 milligram gummies for four dollars off the door, you you just that mindset you can't overcome. And for us, it's like we're not gonna race to the bottom, yeah. So we we went in and yeah, we uh we just didn't sell that. I think there was a several reasons why for it, but pricing structure just just works too. And I think how much the consumers have been trained there, and not inland there, it's happening in California, you know, price compression everywhere is it's challenging.

SPEAKER_02: 1:45:40

Yeah, it's a big problem here in Vegas, too. Oh, yeah, because there's so many dispensaries and it's so easy to get to the next month. True. But I mean, Michigan's also funny. I mean, I think it's just like southwest Michigan on the Buffalo border, right over right over from Indiana. There's over 20 dispensaries within like this tiny little space. Somebody told me though that they did like 300 million of sales in last year, you know, in the past 12 months or whatever, in that it was this concentration right over the border, and it's nuts.

SPEAKER_04: 1:46:08

Well, they're saying that the most common uh unit sold on that part of Michigan on that border was uh two ounce bags.

SPEAKER_02: 1:46:17

Ah nice, nice. And on the other side of the border are are the world's largest uh fireworks stores. So yeah.

SPEAKER_03: 1:46:25

Sorry, one goes better. I I think anytime, yeah, you can have you can have retail right on next to Probi Prohibition Estate. Yeah, it's perfect. Really? Yeah.

SPEAKER_01: 1:46:34

Well, any states on the roadmap for 2026 that you are looking for partners that if anyone out there is listening, that they should get in touch with you.

SPEAKER_03: 1:46:42

I mean, we've you know, Missouri, I think, is still really interesting. We looked at Illinois and Missouri quite a bit last year, but I think the uh think Missouri is probably a better opportunity for us when we look at the landscape. Florida's still really interesting, but you know, there's there's inherent challenges either way. We originally had a 10-state three-year roadmap and we did seven states two years. And then I was very naive, did not understand that running seven states would be seven unique businesses. Even when you have good partners, it is still just like it is a full-time job. So uh that was a that was a big miss on my part and a big learning experience. So we've backed off on regulated expansion. We're you know, shoring up the states we're in. We're gonna go much deeper where we think we'll do better that way in those states. We think we have the opportunity to really win in those states. Um, and then right now, just really pushing on the the um DTC hem side. So that's really our expansion right now.

SPEAKER_04: 1:47:37

Yeah, well makes sense. This is great. We connected with you, was it a month ago? You uh it was summertime. Yeah, yeah, summertime. No, no, no, December.

SPEAKER_01: 1:47:45

I have one more question that's maybe a little more personal, but something I'm really curious about is um you and and your wife are business partners, and and you guys work together. Um, and I sat behind you guys on the airplane coming out to Vegas, and I could just tell that you still like each other. You're like you're laughing. I think like one of you even like leaned over and gave some each other a kiss. Wow, this is I thought, damn, this is awesome. Like they work together and they still like each other. And um it would be crazy if you're like not really. I will say I I know they did, I witnessed it, and um, and I think it's that's it just that's like how do you how the heck do you work with the person you're married to? That's amazing. No, well, thank you, thank you very much.

SPEAKER_03: 1:48:33

All right, uh, and I still love my wife, yeah, more than like very much. You know, uh we've been together 27 years, and we just had our 22nd wedding anniversary in July. So I think we've been working together for eight years. Um so I founded the company and then about a year and a half, two years, we needed help. She came in, like she's sales marketing, that's that's her skill set. She's amazing at it. I know nothing of it. We were needing to build a little sales team, and she was in between kind of her work. Like, oh, I'll come in and help you for a second, you know, help you get a stand up a sales team. And she got in there, and then my original co-founder was like, I'm out of here. So she she moved right in, right? And then it's we've been running it since. Yeah, incredibly challenging at times. If we, if we were a newer couple, if we didn't already have almost 17 years under our belt together, never would have worked. Both the business and the relationship would have failed. But um, as I said, very complimentary skill sets. The we couldn't we couldn't have built level if it wasn't the two of us, right? She she's amazing at I think helping to um pull out the vision that I have and get it actually working in different operational ways, especially sales marketing people. So um, yeah, that that aspect's amazing. But yeah, it it's been hard. We've we've gone through some really hard times of trying to figure out, you know, are we business partners? Are we married? Are we what is going on here? And so we've gone to a place where it's like very hard and fast rules. There are places in the house that work is never discussed, and you know, we find ourselves catch ourselves like, uh oh, I can't do this in this room. And you know, I think really defining and defining those boundaries and then both of us respecting them. And um, you know, she's amazing because I I would work myself to death, and she's always like, Stop, we have to pull back. So it's uh boundaries.

SPEAKER_01: 1:50:20

That's a hot tip. Sure, nice. Yeah, I know. I know real people. I didn't really learn what a boundary was until I was like over 40. So I'm still I'm trying to figure it out. I like paint my hand.

SPEAKER_04: 1:50:35

Good luck. Good luck. Yeah, well, Chris, thank you so much for helping in. Anna Ray and Mark, thank you for this. This is so fun. We are we know this is on the road, we can take it on the road even more. Uh, thank you all for watching, uh, both today and actually a little bit yesterday, but also um uh on Wednesday. I thought it was great. Yes, this is really fun. Thank you all for watching. We'll be back doing this at some point. We'll be back to our Friday regular show. Yep. Next week, yeah. Next Friday. I have to do one computer thing before we actually stop going live. So sorry everybody, you get to see my get to see my laptop.

SPEAKER_01: 1:51:08

Um and um thank you for Eric Rossetti, who is our high spirits producer that came to Vegas and has been helping us get to have multiple cameras. So if you think this looks cool, let Eric go. Yeah, yeah. Thanks, Eric.

SPEAKER_04: 1:51:22

Thank you, everybody. We'll uh we'll see you down the road. Yeah, thanks very much. Bye.