Ashwin Raj: 0:00

The only way you're going to be successful is listening to your customers. This is true in any industry. Listen to your customers, listen to what they're saying, fix their problems. You will be successful. So if you extrapolate that into a leadership principle, listening is the important part. I'm listening to my customers. I'm also listening to my team. I have a very passionate, awesome team that has a lot of experience in the industry. And they know a lot of things and they're hearing a lot of things, both from customers, both from our partners, everyone else. So listen to your customers, listen to your team.

Ben Larson: 0:53

Welcome to episode 122 of High Spirits. I'm Ben Larson, and with me as always is Anna Ray Grabstein. We're recording Tuesday, January 20th, 2026. And we've got a great show for you today. We're going to be talking to the CEO of Leaflink, and we're going to be diving into everything. Or how's your week going? And how was your weekend?

AnnaRae Grabstein: 1:27

Weekend was great. It was a sort of a three-day weekend for many people. Yesterday was Martin Luther King Day. And um I always take that time to make sure that um either I can give physical service back in my community or to make a financial donation to organizations that I support or both. So did did a little of each. Can I double-click on that just a little bit?

Ben Larson: 1:54

Isn't it a three-day weekend for everyone, or did someone change that?

AnnaRae Grabstein: 2:02

Well, it certainly was a three-day weekend for my child school. Okay. As someone that works with many companies, I will say that some of my clients took the day off and some didn't. And uh I'm not really sure what the decision was of why some people don't and some people do, but maybe you have more insight on that.

Ben Larson: 2:23

What was your take? Did you I don't know. I just so uh my birthday was over the weekend. Happy birthday to me. Um but it was always around MLK Day, and uh, you know, I spent a lot of my childhood learning about MLK, and it seemed like a very notable holiday each year. I don't know if that was just for because of my birthday, but I'm fairly certain, especially growing up in California, that it was a recognized and important holiday. And I'm curious, and we're not going to make this a political podcast, but I'm curious that that has shifted because of the current administration. Um, because it does seem like it has been de-emphasized. And I think don't take too kindly to that because I enjoy my three-day birthday weekends.

AnnaRae Grabstein: 3:08

And and truly happy birthday. I uh I admitted to you right before this that I totally forgot your birthday, and that Facebook told me that I had missed your birthday, and because I signed on to Facebook a day after your birthday and was prompted to give you a belated greeting, and I was very embarrassed. So um really glad that you are entering another year healthy and happy as you are, and from a beautiful place. You were in Mexico last week doing all types of personal, professional development, cool stuff. So just happy to see you carrying that on in every year of your life.

Ben Larson: 3:45

Thank you, thank you. And it's okay. I think I also missed yours. So uh it's a good thing we're Facebook friends. Uh, but beside that, uh, I do I was in Mexico, I was doing some relaxation, some vacationing, but also masterminding my life. And I I do this every January, and it's just a great way to kick off my year. So get centered, really focus on what I'm grateful for, what do I what I who do I want to be in the new year? What do I want to achieve both professionally, personally, and uh with my family. So coming back full and and focused, and I think we talked about this last week. You know, it's the year of the fire horse, and the fire horse is all about focus. Uh, and I feel more focused than ever, knowing what I need to execute on. So highly recommend people set aside that time, you know, after the craziness of the holidays, after the craziness of getting your team up and running and and off in the right direction to take a step back and then really, really focus and making sure that you know the leader that you want to be in the new year.

AnnaRae Grabstein: 4:58

That's beautiful. I love it. And I did not do anything quite so intentional, but I drove down Highway One over the weekend uh to Santa Cruz and also then drove back north to my home up the one after driving down the one. And for those that haven't spent time on Highway One, it is a gorgeous road that creeps along the coast, um, all along the west coast from Canada to Mexico. But I was specifically along California along the California edge. And something about the bigness of the ocean for me just reminds me and reinforces kind of the smallness of my place in the world in a way that can sometimes be really empowering and help ground me in the ability to make small impacts and big impacts in our life. But just to remember that like there's a lot of things that I can't control, like the ocean and to to let go needed.

Ben Larson: 5:57

Well, in high highway one is very indicative of that because depending on where you when you've traveled upon it in time, it has changed because the ocean uh takes uh build the California coast. Yeah.

AnnaRae Grabstein: 6:12

Yeah, there's a section when I was growing up that was called double slide, and it was a section that would wash out all of the time. And now there is an incredible tunnel that they have dug through the mountain uh that replaced double slide. And you're right, it's about this kind of reinvention because there's some things that just keep changing. Um and so one of the fun things that I was doing over the weekend as well is that my son started making these things called paracord bracelets. I've got one, I'll show it on the video. It's here. Um yeah, and quite the craftsman. He's a craftsman for an eight-year-old. But paracord bracelets I learned from him are actually survival tools. And I thought it would be a fun thing to tease and talk about here too, because the concept is that it is one long piece of rope that's woven into a bracelet, but that you can take it apart if you need it. So that no matter where you are, you always have a length of rope with you and that you can save yourself or others or do whatever you might need to do with an emergency piece of rope or fishing line or jute when things get hard. And I thought that it was a fitting metaphor for cannabis because I think that we're in a place where we need to be equipped with survival tools at all times because what we know is that the conditions aren't ideal. We don't quite know what's happening next, but uh, we've got to keep keep equipped with all our tools.

Ben Larson: 7:45

So no, we do not. I'm gonna put it in order for a paracord suit. Gonna need a lot of rope.

AnnaRae Grabstein: 7:53

Yeah. Well, so let's get into it today. I think we're gonna be in for a great conversation. Our guest today is Ashwin Raj, and he's the CEO of LeafLink. Uh LeafLink sits at the center of cannabis wholesale. They've uh processed over 5 billion in annual transactions. Uh, 12,000 companies plus uh use the platform. They're live in 30 markets across the US. Ashwin brings experience from multiple industries that scaled before regulation caught up. He um he's been in leadership roles at Lyft and Amazon during massive uh shifts and changes and policy. Uh, he also uh had executive leadership at uh Easy Cater as well. And he's worked on marketplaces, payments, infrastructure in highly operational and fast-moving environments. He stepped into LeafLink just seven months ago at a time when cannabis has clearly been moving out of its startup phase and into something much more complex, constrained, and demanding. So today we're gonna talk about what that looks like. Welcome, Ashwin. Thanks for joining.

Ashwin Raj: 9:01

Hey, Anna Ray, hey Ben, thank you for having me. It's exciting to be part of your podcast today.

Ben Larson: 9:07

Well, thank you. Yeah, it's really exciting to have you. Uh, just listening to Anna Ray list kind of your background, it kind of uh sprung up this conversation that I've seen happening online where we talk about how hard cannabis is, and we were talking about the paracord earlier. Um, and I've I've I've heard some people say like building businesses in emerging markets is hard everywhere, it's not just cannabis, cannabis is no different, and you know, we can argue in many ways it is, but I'm curious is your your perspective, you know, coming out of Lyft, where you know that very much has been an emerging market and you changed a lot of rules and and all that. Is cannabis that much harder than what is experienced in other marketplaces?

Ashwin Raj: 9:56

That's a fantastic question. And jump right in, and you didn't hold anything back. Um it is uh similar, but it is also different uh in a way, because uh if I look back at Lyft and how ride sharing evolved, ride sharing um when it started was was not something that customers were very clear about. Uh, you know, we've always grown up with our parents telling us, don't get into any car with a stranger, right? And it changed the social aspect of it. And and then you had the established taxi industry and the medallion structure that had its own way of operating, and regulators and policymakers were used to it. Now suddenly there comes this new technology, which is saying I'm gonna take these unused assets and I'm gonna make it available to people to go wherever they want. And by the way, I'm going to get into a car with a stranger. So there was a social shift, there was a business shift, and there was a policy shift that was happening. And so I think cannabis is similar to that uh from those respects. And I and I I use my experience to think through how did they evolve and how did ride sharing evolve. When I joined ride sharing, it was pretty illegal in almost all states. And you know, the there were seasoned desist orders that um different jurisdictions had sent both Uber and Lyft. And both of them reacted to it in a way where we developed the technology, we developed the platform to comply with the regulatory requirements, comply with the customer protection, comply with the safety requirements, etc. And that's how you convinced regulators that this was something that was better, was safer, and and consumers wanted it. And ultimately it was the customer preference that drove policymakers to also say, we have to accommodate this and we have to figure out a way to make it happen. And so um, cannabis is has that same social aspect to it where you know it has been something that's illegal, so you're not supposed to do it. I think we all experimented with it in college, but you know, we're not willing to accept it. But now, as as states have started accepting it, I see it here in California where I live, that socially this has become much more mainstream and it's getting even more mainstream. Uh, but it's not so in in certain other states. So there's a social shift that's happening. The business model has to evolve, uh, whereby cannabis operators are able to um create a business from which they can make profits. And and finally, policymakers have to realize that there is this shift happening, and we have to be custodians from the point of view of enabling this social shift in the right way, but also enabling the these businesses to succeed. And I think that's where a lot of policymakers and regulators are, you know, you can see it happened in the regulations in all the different states where they're a little bit all over the place. But that happened in right sharing as well. That happened even with Amazon, if you think about it with respect to internet commerce and you know the whole sales tax issue. If you remember, nobody knew what to do. Right? These are all new technologies and new uses that are coming in. And that that is actually the beauty of you know, hum mankind and humankind, where new things will keep coming up. You can't you can't say cannabis is new, marijuana cannabis have existed for thousands of years, but yes, the use of it, um, you know, we put some policies and regulations around it, but that will continue to evolve. There'll be new technologies, there'll be new products, there'll be new things that people will consume and use, and we have to evolve with it. And so I think there are similarities, but I think this industry is also very different in the respect that it is very emerging and it has to uh evolve and become more mature. And I think we are somewhere in the middle of that spectrum. Uh, if you just take, for example, the number of states where medical use is allowed and you know, recreational use is allowed, we have less than half the states where recreational use is allowed, but we have about 40 states where medical use is allowed. So, what is that inflection point? And when there is, and that happened in ride sharing as well, that happened in internet commerce. There was a point at which you know a majority of states shifted over into the new model and then the rest follow. So I think this there is a uh momentum that will happen. And I think that um we as industry leaders have a responsibility to ensure that that happens in the right manner, where we are helping all the participants and all the constituents achieve their goals. And that way, you are then creating that right industry outcome. Yeah.

AnnaRae Grabstein: 15:13

You you draw some really interesting parallels between ride sharing and e-commerce and cannabis, and and you make this point that there ultimately became this inevitability with paw with policy because of consumers' um desire and enjoyment of the product, be it being able to buy products online or being able to get um the car when they want it, uh, when they arrive in a new city. But both of those examples seems like they moved a lot faster from a policy unlock than cannabis has. And I'm wondering if, as someone that was in the in the weeds in those spaces as policy was changing, if there was something that you see that the cannabis industry isn't doing to get policy to move faster, or what is it about cannabis? Because the consumers have clearly already spoken, haven't they? Don't don't we know that it's an inevitability that cannabis should become more unlocked from a policy and regulatory perspective, but the the states and the feds just haven't haven't caught up. What's what's the problem?

Ashwin Raj: 16:22

Uh great question, Anare. I think that I we I think we feel that the consumers have spoken, and consumers have spoken in in certain states where they have expressed their desire to use this product for for medical as well as you know recreational use. However, I still think the majority of the consumers are not as familiar with the products and the use around it. And I think consumer education is a huge gap in the industry. And by I'll I'll tell you what I mean by that. Uh I was having a conversation the other day with with several friends, and uh, you know, we had this cannabis, you know, there were there was a pre-roll, there were some gummies. And the issue was nobody knew what the impact of that was going to be on them and how much they had to consume. In alcohol, if you think about it, you know you can handle two glasses, two, two beers or two glasses of wine. You have this is 8% proof, this is 15%. That industry has created uh a standard and a way for consumers to know what the product is, how they're consuming it, and what the impact of it that will be. These are intoxicating products, but you know, we have to accept it. And we need to make sure that consumers are aware. So that is one. And so today, majority of the consumers do not know the impact of it. And I think there is a responsibility for us to educate and inform those consumers. I'm talking about end users. And and the second piece of that is um, in order to create that education and to create that awareness, we have to make sure that we as an industry are creating the product standards um and and the way the and the segmentation of it and buy the type of product. And we as an industry haven't done it. Leaflink, as you mentioned, sits in the center of this ecosystem. But I know that everybody, all the way from the manufacturing side, right, uh from the farm to the retail store, they all have different product descriptions, different uh there is no standardization. And that is a big issue in the industry. And so this is where I feel that cannabis is not doing the right things, where we need to come together, and for whatever reason, we are operating against each other rather than together. I think that is a big issue. And if you don't come together, you're not going to overcome policy and and and regulatory uh you know hurdles. No matter what, if you take I I was at Visa, uh and you know, there was this whole you know, visas issue between merchants and banks, and there were a lot of uh regulatory requirements around merchant pricing, payment processing fees, and so on. You I saw this with the sales tax issues with Amazon and all the other internet retailers, and then we saw it with Uber and Lyft. But they all came together to handle the policy issues together. And that is where the industry needs to come together. So it is a combination of things that we do, how we do it, and to create this uh structure. Structure and the standards in the industry that gives the confidence. Today there is no confidence. And we have to create that. And then, secondly, we have to operate as partners. We can compete. I'm not saying don't everybody doesn't need to join hands and you know syncumbaya, but you can compete. But you need to come together to solve these common problems together.

Ben Larson: 20:21

I love this. We we talk about this a lot right now. It's uh it seems like it's getting harder over time to get people to come together. And as someone who's actually being trolled online right now by someone that is delineating between the plant itself and then everything else, I'm like, oh, that feels like a conversation that needed to be had like a decade ago because like gummies started becoming big like a long time ago. Um, and I'm just curious, like, you know, you come in with fresh eyes. What are some of the things that we could be doing to build confidence and come together? Because like we we need it now more than more than ever. We have an ambiguous timeline for for schedule three, you know, we have the hemp conversation, which is all you know, cannabinoids at the end of the day, and then to your point, we have a consumer base that still has a lot of questions. Like, even my even my own wife like looks at a product, she's like, is this THC or CBD? And even that, like, I don't even know if she's asking me if she's gonna get higher or not, uh, which is maybe a failure on my part, but I think this is pretty common as as we deal with new marketplaces across the US. And and but it does feel, and maybe this because we're sitting in California, that it does feel inevitable, but also very far away in some in some ways. And so, yeah, I'm I'm curious as to your your kind of fresh perspective coming from these other marketplaces. You know, what's next as far as that big low-hanging fruit of of building alignment and building confidence?

Ashwin Raj: 21:58

As I said, one is the industry participants in uh in various states have to a come together, but then you we have to create this joint across state way of operating to overcome the to help with the federal uh policy changes as well. And I think that's just a uh a piece that needs to come together in a manner where all operators are uh engaged in in the right way. Uh I think that's a that's a broader underlying theme, but very specifically, what I would say is um I I believe, uh at least this is the right sharing example, I believe that technology and and the platform helped overcome a lot of the concerns that regulators had, because they were sure that, you know, you could put if if you you all are well aware of this, you know, each county, each city, uh, each local jurisdiction has their own right sharing requirements, and those are very different. San Francisco Airport has its own set of requirements, whereas San Francisco City has a different set of requirements. And every city in between San Francisco Airport and San Francisco City has their own requirements. And so that could only be solved through technology, and cannabis is still the same way because you have different regulations in every state, at least it's at a state level. There are some local jurisdictional, you know, um uh uh uh distance-based limitations, but that's still applied broadly. Technology can solve that, and you need these participants to create that compliance, create that confidence in terms of these are licensed, uh valid operators transacting. Because the big piece that we are not talking about is that whole illicit segment, which is creating a lot of pressure and is also giving regulators the concern, right? That they are going to that part is going to explode if they allow any policy changes and so on. So you have to help them push more into the mainstream, into this regulated way of operating, and that is through leaders in the industry who are playing different parts of the value chain. This is all the way from metric to you know, uh leaf link on the wholesale side to uh participants on the on the retail side. And I think they all have a role to play, and it is through the technology and the platform that you to drive those outcomes. And then you need to take that to the policy because that's what we were able to do in the right-sharing and e-commerce industries, where we were able to show that the platform will help. And today, technology is omnipresent and it's everywhere and it's used everything. So why not take advantage of this here as well? And the other byproduct advantage of that is you can drive more efficiency in our industry, which is margin constrained. And it's significantly margin constrained. It is because of the complexity of the regulations, it is because of all the 280 uh pressure, all of this. Uh and so they don't have the everybody's fighting for survival, that they're not looking at how do we come together. And this is almost like, you know, I I I go back to the olden days, you know, the pre-industrial days where we were all small villages, each fighting for survival because somebody's going to come and take over and and and and and finish this off. And that's kind of how the way cannabis is operating almost uh today. And that can come through by opening up those, you know, uh breaking down those walls, opening it up, using technology to drive efficiency so that operators benefit, regulators benefit, and consumers benefit because now they know that they can trust the source from whom they're buying, and they get the right product with the right data, with the right information. Um, I'll just give a simple example. If you remember the early days, you were not sure what which car you were going to get when you order a uh a Lyft or an Uber, right? You don't know what was going to show up. But then the standards were set up. You know, there is a vehicle verification. You had to meet certain standards. My car, by the way, was rejected by Lyft because it was an old car, and they're like, no, this doesn't meet the standards, right? And so uh there's a there's a level of standardization and there's a level of checks and and uh verification that come in, and that's what this industry needs.

AnnaRae Grabstein: 26:57

Well, I think it's interesting, you're you're really pushing on this tech as this neutral and also incredibly critical infrastructure that creates confidence. And when legal cannabis started rolling out, there were a lot of and continue to be track and trace programs that use technology that are supposed to be sort of the underlying layer for compliance. And uh I think some operators at the beginning thought that the track and trace tools were also going to provide business intelligence. And that hasn't been the case. And they're not actually tools for running a business, they really are tools for tracking compliance. And so on the back of that, lots of new technology was birthed to support the infrastructure that the industry needs to create that efficiency and optimization on the technology side. And um, that's where LeafLink came from. And LeafLink is in the middle. You guys are are the wholesale layer uh between between brands or cultivators or manufacturers and retailers. And I think that it's a fascinating place to sit because you get to see how the transactions move, um, how much things are getting sold for in ways that that uh that other people don't. Um I'm wondering kind of what you see as the signals of industry health sitting in that position in the middle in this important technology layer.

Ashwin Raj: 28:32

You're spot on. And that it's uh it's an awesome uh position to be in in the in this value chain and ecosystem. And and you're right, we are the glue that connects the operator cultivator side, brand side to the um retailer side. And and we have the ability and the advantage to connect all those dots all the way from, you know, uh I was using compliance and the and the track and trace, the seek-to-sale aspect of it. But the but the issue is not everyone subscribes to it. And they want to do it in a in a in a different way. And we have to educate them, we have to almost plead with them and beg them to say, you know what, we can make this very simple. We can just connect your metric keys to, you know, and and process this transaction without you having to go and repeat the do something else manually at a at a later stage of time. And I think there's uh uh again this evolution and maturity that needs to come where they they don't uh haven't fully embraced the technology uh utilization and and the use of it, and they're still you know operating in a very manual, uh inefficient manner. And I think that is uh one key uh aspect of it. Uh and the second aspect of it to your question on on the health, um, we see this in in different states, and and for example, there are some states which you know issued too many licenses. And what happened was that created uh outcomes that weren't great for a lot of the participants, and you can see them jump in and jump out because they just can't sustain. And there are some states which totally restricted it, you know, to very few. And so, again, this is you you can see the connection between how policymakers are influencing uh outcomes here, and the health of the industry in different states is very different. While California has been at the forefront, the health of the California cannabis industry is not great. It's it's various factors, but it is not great.

AnnaRae Grabstein: 30:52

And let me let me jump in when you when you say something like that, is that because you're able to see, well, an eighth of weed in California is selling for way less than an eighth of weed in other markets?

Ashwin Raj: 31:04

And so I'm there is price compression. The you can uh there is um, you know, you can see businesses go, you can see operators going out of business on a on a regular basis. And we have the advantage of seeing it both on the marketplace as well as from our banking, you know, financial services uh platform. And and and we see that, and we we have a sense of we can actually foresee that to some extent because you can see the banking you know deposits you know just go down, and we're like, okay, here is here is something that's going to be coming up, right? And and so it is sad to see that. You want to try and and help uh in a way, but if they've already in that downward spiral and they're not making profits, um, they just are not able to come out of it. And I think that is a problem where not just the industry, but from uh again, this is where policy is also super important at this point in time, has to step in to make sure that we are protecting, nurturing, and growing this industry. Michigan is a great example where I actually feel the opposite is happening of this protect protection and nurture, where this new wholesale tax that they've implemented now, which started on Jan 1, uh the 24% wholesale tax that was passed, is horrible for the operators. It is the uh you know, it is not, I want to say it's the dumbest thing I've heard that somebody has done, but you know, but people are not uh policymakers are not looking at it to make sure that they are growing an industry, they're just using it as okay, how am I going to siphon off cash from here to fund some of my public policy projects? And I don't care what happens to this industry. And that is not the right way to think about it from a policy perspective. Unfortunately, we as participants in the industry have no way of influencing that. We we can come together, and all the Michigan operators have come together and a huge shout out to them to you know try and take legal action against that wholesale tax. And I think that's uh very commendable, and we and other operators will support them, uh supporting them on it. Uh, but that's going to go through its course. Meanwhile, on day one, on Jan 1, we had to put the 24% tax into play for all those transactions that happened. That is the reality, and that needs to change. And I think that's where the industry coming together to head off and address these challenges is going to be important. Technology will solve part of the problem, but technology will not solve all the issues around around this.

Ben Larson: 34:10

It might not solve all the issues, but there's a lot of power and data. And we we had SciScott on uh two episodes ago, episode 120, and we were talking about you know the way a headset looks at their data, and that's that's their business, right? Their data analytics, but transacting you know, five billion dollars worth of transactions is also there's a lot of data baked into there. And so I'm curious how Leaflink leverages that data to influence these conversations, perhaps. And like, do you guys put out reports or you know, just being able to track what happens to the sales after you implement that 24%? Like, that's just very raw data that that could be very useful in these conversations.

Ashwin Raj: 34:52

Yeah, we have market reports that we publish, the wholesale pricing um report that we we publish annually. Um, we provide data to regulators. Um I I don't know if this is news, but uh there is um a series of activities in the Virginia market that are underway to consider a bill uh to be passed um for opening up the market. And we actively work with regulators to provide the data around not just the uh it's not transactional data, but it is you um you know abstract the data in a way to show you know what are the issues with respect to if you have too many uh the examples I meant, too many licenses, what does this do to the to the pricing? If you have very few licenses or you put restrictions around delivery or cash on delivery restrictions, what happens? We we share those learnings with with the regulators and to educate them that in terms of how they should be thinking about policy. And we do this not just in Virginia, but with all other state uh policymakers, and we feel we take our role of educating policymakers very seriously and and and we give um we use the data for it. But primarily our data is meant to help our customers. Our data is being used to drive value to our customers in terms of how they can become more efficient, and uh both on the brand side as well as on the on the retailer side. Yeah, as you all are well aware, one of the biggest issues in the industry is this whole inventory management aspect of it, you know, excess inventory and so on. So um operators are trying, you know, when they have produced too much, they're trying to get rid of that excess inventory. Uh the industry operates in this, you know, a relationship-based way, uh, which is which is a good thing. But what the downside of that is, you know, the brand reaches out and says, hey, I have some excess inventory, I'll give it to you at a discount, uh, and the retailer buys it. The problem is the retailer is not able to sell that quickly. And now suddenly everybody's stuck. And there's not only an inventory management problem, but there's an accounts receivable problem. And so, how do you solve for this inventory management? How do you give the education? Uh, which is what headset, which you mentioned, you know, that that's how they're thinking about it. Uh, but they're coming at it, they have to gather all the data. We have the advantage of having this data flow through our systems, and we're able to say, yeah, you know, you shouldn't buy so much. This is kind of your inventory turnover. And so those insights and that aspect of it is what we are offering to both sides of the marketplace to help them become better and become more efficient. And the value of the platform is also that we can give them comparable products, uh comparable pricing, so that they can make better decisions that drives to what I was talking about earlier: the efficiency, how they can make the best decisions in terms of what they are carrying, how long they're carrying, and what they need to pay for it. I think that's what it ultimately boils down to. And if we can make that process efficient, which, if you think about it, it should, the nature of the marketplace and the technology itself should drive that outcome. This is what happens in any marketplace in any other industry, whether that's Amazon or whether that's Etsy or eBay, you know, the market addresses that um those issues, but we are still evolving because we are a bunch of statewide marketplaces operating in within that state. And so that marketplace efficiency hasn't come in in each of those individual state marketplaces. Right.

AnnaRae Grabstein: 38:52

So it's interesting as you're as you're starting to touch on the marketplace and and the users of the marketplace. It's it's important, I think, for us to bring up that last year there was a big shakeup with LeafLink. LeafLink had been in a very strong position. I think many other technology platforms would have looked at Link LeafLink at that time and said, okay, these guys are leading in terms of wholesale transactions across the board. Really seemed like from the outside, uh, as someone that doesn't work in technology specifically, that LeafLink was the leader in your space amongst a small group of competitors. And uh at some point in the spring or the summer, there was a major shift in the way that LeafLink was uh transacting with its paying customers in terms of the way that you guys were charging people. You decided to move from a um flat rate or subscription service to a percentage of every transaction made on the platform. And it caused a massive uproar. There was Lots of kind of pundits on LinkedIn being all pissed off, talking about this a lot. And also very quickly, people started launching their own wholesale marketplaces. Competitors saw this as an opportunity because they saw how pissed off a bunch of the customers were about this shift. And so folks that were maybe in some other piece of the technology ecosystem decided that okay, this is our chance. We are going to also now launch a marketplace. Um, or some people even started brand new companies to compete with you guys in the market space, in the marketplace space. You weren't the CEO yet when this happened. You came on pretty shortly after this happened. It seemed like leaf like pretty significant crisis at that time. Yeah. And uh so it sounds like there was probably uh a need for a new perspective on this. And I'd love if you could now give us looking in the rearview mirror, um, some insights on what changed, what you learned, and kind of what the what the future plan is for Leaflink now.

Ashwin Raj: 41:06

Definitely. No, thank you for uh bringing up what was obviously uh a very painful um part of last year, both for LeafLink and itself.

AnnaRae Grabstein: 41:16

Welcome.

Ashwin Raj: 41:18

I've publicly acknowledged this, and you know, um we uh at Leaflink and made that decision to charge uh uh a variable fee. And if you actually think about it, the variable fee model is how marketplaces operate all over the world. Every marketplace operates in a manner. So there was not something irrational about it. Um I think what took customers by surprise is the fact that the model had changed and they were used to uh treating LeafLink like a SaaS platform with a certain flat fee that they were comfortable with and they were um, you know, they could predict and they had uh predictability and consistency to it. And suddenly this changed. And when I came on board, my initial and the way I operate typically is I start by talking to customers across the industry, and that's what I started doing. And very quickly, customers were like, you know, this pricing is a problem. And I was like, why is it a problem? And they actually raised the fact that there was no predictability and and consistency in that pricing, and they would not be able to manage their costs because every dollar that goes into through the platform uh has a variable component to it. Yes, you can you can model it out, but what it did is it kind of created a uh uh a volatile pricing aspect of it. If they pushed more volume through, it actually worked against them. And that for me was the bigger issue on the platform. You cannot have a model where there is a disincentive for customers to push more volume through your platform, that just doesn't work. You want to create a platform where customers are incentivized to push more through. And why is that not an issue in other marketplaces? That's because they have the margins to be able to do it. We don't. We are a margin-compressed, price-compressed industry, and prices are further compressing. And so that is why that model doesn't work. And at this point in time in this industry, I do feel that as you know, cannabis evolves and becomes a mainstream mature industry, there will be variable fee pricing. And today, there is variable fee pricing on the uh, if you think uh some of these competitors that you mentioned uh who are starting uh marketplace wholesale type are charging a variable fee to their consumers for point of sale transactions and so on, which is significantly higher. And and so the model does exist. Um, but we as uh at at Leafling, my philosophy is we have to do the right thing for the customer. And the moment that they said that this was an issue where they will not be able to manage their costs and they had to think through what they were going to put through the platform, I said, no, that cannot be how we we move forward. And so I made the decision to reverse that uh variable fee pricing structure and go back to a flat fee model. I also used the opportunity to simplify it into a uh previously it was three-tier, simplified it into a two-tier model, make it extremely easy for our customers to understand what they were getting in each tier. And we started engaging with our customers to you know transition them into this uh flatter fee model. And I've gone publicly on record and you know apologized for for uh you know for this change. And uh again, I'll I'll say that to all our customers who are listening that we're very sorry that this happened. And but it is a sh you have to believe in Leaflink and the leadership at this point in time that we want to do the right thing, we are willing to take that revenue hit and sacrifice those revenues for doing the right thing for the industry. And that is the philosophy that I am taking forward uh in the company, where we will always put the customer first. And we will make sure that if the customer is successful, we'll be successful. And once they become successful, you can you can charge them more, you can charge them less, that's up to you. But you have to make your customer successful. You can't put them in a position where they're not going to be successful, and that is what creates the industry. So that's the that's that's how that's is the history on on what happened. What I subsequently unfolded is a lot of the customers appreciated the fact that I was public about expressing my uh uh my apology to uh and reversing this and and doing it very quickly. And they've repost their confidence in us. We have actually seen customers come back. Uh, some of those who took those um angry knee-jerk reactions and went to other competitive platforms have come back to us. I'm not saying all of them have, but several of them have, and they've indicated that it was a mistake to leave the platform because the platform adds a lot of value. I will be very uh straightforward and and this could be you can call me you may say this is being arrogant. We are still the best wholesale marketplace platform there is in the in the cannabis industry. There is no one that comes and has the level of feature functionality and capabilities and value that we offer to all the operators in the cannabis industry. And competition will always be there. We actually welcome competition, uh, it helps keep us on our toes. And yes, we created an opportunity for others to step in. And if they have a way of delivering more value, that's great. And consumers should use it. But I'm very confident that none of them come close to delivering more value than what Leaflink does today.

Ben Larson: 47:31

I I don't think that makes you arrogant. I think it just makes you a CEO. Um otherwise you wouldn't be a CEO of your company. Um, but I I want to go back to just like the price compression, the price sensitivity. It is interesting how that drives like an otherwise very obvious like business model. You know, it's like we all use like DoorDash and we're used to putting like you know, um, but understanding that and understanding that's a key pain point of of your your customer, it I'm I'm assuming that there's a nexus between that and your acquisition of Dhamma Financial. And I want to dig into that a little bit because it's a I wouldn't call it an obvious acquisition, um, but now that we're talking about it, you know, I'm I'm guessing there's something baked into in there. And um, you know, Dama on its own was was actually a really interesting, you know, uh growing startup in the space. And so can you unpack that a little bit and just explain to what that that vision was in in the acquisition and the benefits it brings to to the customer base?

Ashwin Raj: 48:35

Definitely. And uh again, great question. Um so the rationale behind the Dharma acquisition is based on the core industry issues that I was highlighting earlier. Uh, I mentioned the inventory management, which is more of a marketplace issue, but the related issue that's arising out of it is this whole accounts receivable, accounts payable issue that has plagued this industry for years, is still a huge problem. And what we don't have is a way for confident payment settlement and reconciliation that needs to happen. So, Dharma as a financial services platform provides you know core banking. And my vision is to uh create this digital banking solution for cannabis operators where you can do complex, even very significant manual tasks like your cash storage, your cash management, etc., digital manage it digitally. What we want to now connect it to, how we want to connect it to the marketplace is this whole payments, accounts receivable, accounts payable, working capital management aspect of it. And that I think is a is a gap that nobody has stepped in to address. Um, traditional banks obviously are not participating. The few smaller banks who are operating in these various states don't have the sophistication or the ability to do it. They they lack the sophistication even to serve as just a regular cannabis compliance with related to banking. Um I I don't I you're probably aware, but every cannabis transaction has to have a positive paycheck that needs to be completed for it. Banks aren't set up to do that. Um we are able to do it because we've set up the technology to do it. So now if you think about it, you can actually track, if you take this compliance aspect of it, the seed to sale, which is the inventory flow, but you can also connect that to the financial flow. And now our platform offers that end-to-end compliance all the way from manufacturing to the shelf through both the flow of products and through the flow of funds. And that is the ultimate vision of bringing this together. But in the short term, the goal is to solve for this payment accounts receivable, accounts payable problem and to provide a form of um, I want to say not guaranteed, but a confident system that where operators can rely on to receive their payments on time and to make their payments on time. And that is what we are we are that's the vision that and that's what we are building to bring about uh through this acquisition of Dhamma.

Ben Larson: 51:40

Yeah, that's super interesting. I I was just you're reminding me of some of the earlier days of dealing with some of these digital platforms of like having to personally verify like the KYC. And since you already have verified users on this transactionary platform, you've already kind of set up that framework. That's exactly that. That's exactly that. Yeah.

AnnaRae Grabstein: 52:02

So as we're nearing the end, uh I wanted to ask kind of a different question outside of the financial services piece about verticalization versus specialization, because I think that where you guys sit to in the middle, both on the banking services side and in the wholesale side, you get to see a lot of transactions, money moving. And uh broadly, you know, the cannabis industry is broken up into these groups that have been become vertical from seed all the way to sale with cultivation and retail. And then folks that specialize in in one area of the supply chain, be it cultivation or retail or certain brands in the middle. And um, I'm wondering if you have any insights into if one or the other is is winning currently and where you think it's all going as the industry continues to evolve.

Ashwin Raj: 52:56

Good question. I wish I had a crystal crystal ball, uh, but I'll give you my perspective of what is happening right now. I think right now there is a trend towards verticalization. And I think a lot of the larger operators are taking advantage of this opportunity to set themselves up for a descheduled world. And they want to become uh all these large uh brands and MSOs uh want to become like a true CPG um operator. And I think they're making a play for it. And the way they want to do it is in this moment, because once the descheduling happens, at least even you know, even if it's happening in steps, there is going to be an influx of capital and there is going to be an improvement in margin, which is now going to increase valuations. So the time to buy is actually now. And if you can see that a lot of them are making place to buy up more retail dispensaries and so on, uh, they already have cultivation. I have seen less of retail brands extending into uh the manufacturing side of it. So I think it's more of the supply, similar to kind of how alcohol evolved in some of the earlier days. Um but I think that's that's one aspect of it. However, I in the long run, I don't think that pure verticalization alone is going to be sufficient because specialization is going to win out. You I believe in this concept of you have to stick to your core competencies. And one or two of them may become so good in operating that they are they have multiple core competencies and they can operate across the entire value chain. But I think that's only going to be not more than two or three. I I don't think more than that will be able to do that. And so specialization is going to become very, very important. You become extremely good, drive the efficiencies in manufacturing, and you're supplying to a broader swath of operators, brands that are buying from you across the country and maybe even across the world, right? Over time. And so that sort of specialization is what will ultimately win. And there will be uh room for both. Uh, but I but I do think that the more specialization that happens, consumers benefit from it ultimately.

Ben Larson: 55:26

Amazing. Yeah. And just since I think we have time for one more question, coming off my my leadership retreat, you know, I I want to ask you, you like you have this rich uh professional history. Um, we all kind of like start to collate the these leadership leadership principles that we believe drive successful companies or or the cultures that we that we seek to have in a company. So I'm curious, what leadership principles did you bring into Leaflink and you know, the top three or whatever it is? And is there anything that maybe you thought was uh transferable and maybe wasn't, or something new that kind of picked up that is required uniquely for the cannabis industry?

Ashwin Raj: 56:13

I think the beauty of leadership principles is it transcends industries, right? That's kind of why they um exist and in a way add value uh across companies and my various different sectors. For me, the most important thing is very simple. This is, I wouldn't, I don't know if there's a leadership principle or, but this is kind of how I what I believe in. A, you have to listen to your customers. The only way you're gonna be successful is listening to your customers. This is true in any industry. Listen to your customers, listen to what they're saying, fix their problems, you will be successful. I think I I so if you extrapolate that into a into a leadership principle, at least for me as a as a leader, as a CEO and leader, uh listening is the important part. I'm listening to my customers. I'm also listening to my team because the team has a lot of, I have a very passionate, awesome team that has a lot of experience in the industry. And they they know a lot of things and they're hearing a lot of things, both from customers, both from our partners, everyone else. So listen to your customers, listen to your team, bring those two together. You'll you'll you'll be super successful. But I think the other piece that uh just that I've brought over that I've applied to Leaflink is when you were mentioning uh this in your in your retreat, where you were you you you brought you spoke about focus. I think focus is critical. I think one of the things that we didn't had lost a little bit was a lack of focus, and we started trying to do too many things. That is something that I've brought back into Leaflink to say, let's be extremely focused, let's do one or two things that our customers want that are high impact, and let's just that prioritize that. And the third thing that I I always believed, and this is the uh Amazon lift aspect of it, is build for the long term. Always build for the long term and and make sure that something that you're building is sustainable. Don't build for short-term outcomes, because that is not sustainable. So I think those are the things that I'm I'm bringing from uh others, which I think are equally applicable for the cannabis industry, because I I am here to build for the long-term success of the cannabis industry. And my vision is that you know, cannabis is a mainstream product as good or even better. I think it'll be even better than alcohol uh as a as a product that consumers use.

Ben Larson: 58:35

Amazing. I love that.

AnnaRae Grabstein: 58:37

Yeah. And so, Ashwin, it is time for our last call. Uh, so we want to turn the mic back to you one last time for any advice, call to action, or a closing thought to leave our listeners with.

Ashwin Raj: 58:49

Uh again, thank Ben. Anare, thank you so much for the time. It's been an absolute pleasure talking to you about this wide and varied uh topics. Um, the only thing I would uh tell uh uh I would ask of our listeners is you know, you heard from me, I've mentioned it, that our focus is listening to our customers, doing the right things for our customers. Please reach out. Please reach out to myself, please reach out to any of our team members. We're here to listen to you, and we want to we want to make this industry great, and uh, we are here to support you in that.

Ben Larson: 59:26

Ashwin Raj of LeafLink. Thank you so much. It was a great hour. Thank you for letting me jump right into it. I we actually have this uh saying in the group that I was hanging out with this past week of like no small talk. So it's like just jumping deep into the conversations. I guess I was a little bit in that mode, so uh jumped in a little bit, but you did great, thank you.

Ashwin Raj: 59:47

Thank you. You you guys are awesome. Thank you for having me. It was a pleasure.

Ben Larson: 59:51

Amazing. Talk soon. All right, everybody, what'd you think? Please let us know in the comments if you're on LinkedIn or other. Otherwise, uh drop us a review on Apple Podcasts, Spotify, or wherever you listen to your podcasts. Thank you to our teams at Vertosa and Wolf Meyer, and of course, our producer Eric Rossetti. As always, folks, stay curious, stay informed, and keep your spirits high. Until next time, that's the show.