SPEAKER_03: 0:10

Welcome to an Olympic edition of This Week in Cannabis Live. We are here with Jeremy Burke, Mark Hauser, and Anna Ray Grabstein. Anna Ray, I hear you're our newfound hockey fan, as are many, because you've been enjoying heated rivalry. Does that carry over to the Olympics?

AnnaRae Grabstein: 0:27

It does. Hockey isn't my first sport that I usually watch in the Olympics, but I love the Olympics. And I'm all in it, especially for the Luge. I think that like many of us in the cannabis space like know the stories about the Jamaican luge team and Bobsled. Bobsled. Yeah, yeah.

SPEAKER_03: 0:46

You guys are you're really showing your northern your Northern California.

SPEAKER_02: 0:50

You're clearly from California. I was gonna say that.

AnnaRae Grabstein: 0:53

I can't survive in the snow, but I'll watch it on T4.

SPEAKER_03: 0:56

I would also say this, which also bridges uh Canadian hockey, is that uh in the Bay Area of California, uh uh one of the best young hockey players, Macklin Cellebrini, is on the Canadian Olympic hockey team, and that's gonna be watch. And I think he was born actually after later than Sid Crosby's first Olympic gold. If I'm not if my age is not like Sid Crosby is old and he is very young, and they are both very good, and there's lots of pictures of them together on the ice. Um that's gonna be very exciting.

AnnaRae Grabstein: 1:25

Any good ice hockey players to come out of Northern California, it's it's an anomaly because there's not really ice hockey culture here at all.

SPEAKER_03: 1:33

I know. A little bit more in the South Bay. I mean, that there's the hockey team there, they built a rank, there's more there. But Southern California actually has some hockey players. Um, Austin Matthews, who is on the U.S. Olympic team, but plays here in Toronto, grew up in Arizona, but I think played his youth hockey in Southern California. It doesn't really matter. That's way too much information for this specific show. Uh, that's gonna be my next show, um, youth hockey podcast. Um Jeremy, uh well, we're gonna go around the horn because everybody did something extraordinary this week. Jeremy, you and I had an event last, not yesterday, but a week ago, Thursday. Um, I'm gonna play a clip from it. Uh, but I want to get first your thoughts on the event, and then we'll play a clip of uh what Kirsten Gillibrand, U.S. Senator Kirsten Gilman, had had to say about Donald Trump and cannabis. But go ahead.

SPEAKER_02: 2:17

Uh my thoughts on the event are I it was it was A plus. Um, you know, I think what we are really trying to do with with cultivated and the high rise our event uh with Gotham is cultivate, and I'm sorry for using that word, a community of the smartest people in cannabis, right? People that are actually rolling up their sleeves and doing stuff every single day. And I think that was really notable in the room, how everyone had a perspective, uh, whether they were a policy, policy person, a regulator, a business leader, an attorney, wherever they're from. Um, and so I think there's a lot of that network effect that was really interesting. Um just quickly, it was very impactful that Senator Gilbrand gave us time, right? I think that it means, you know, there's a lot of things she could have been doing with her 30 minutes on a Thursday evening ahead of a government shutdown vote. And it was really impactful that she gave us all that time. She wanted to be in the room. Her team is very, very engaged on the issue. She's a very smart politician, and so I think that's a huge signal. And we should, as an industry, you know, that's that's a clear advocate in in Congress right now.

SPEAKER_03: 3:20

I I would also say, and I'm gonna play a clip with what she was joking about the president and and uh rescheduling or descheduling. She also knew what she was talking about, which didn't surprise me, but she was pretty deep in it. Uh she's smart.

SPEAKER_02: 3:32

She's really smart. Yeah.

SPEAKER_03: 3:33

She had criticism of both Democratic and Republican presidents for not getting it done. She said if any president, past or future, wanted to get it done, they could. And she was talking about descheduling at the time. Um, she had some uh I'm not sure harsh words, but a call to action of the mayor of New York about uh crackdown on uh bodega sort of cannabis sales. And then she had this to say about uh President Trump, which I thought was both funny, but also, as Anna Ray said, a little bit too insightful about where the government is right now.

SPEAKER_00: 4:01

President Trump to want to do cannabis. Maybe we should offer him a cannabis license for New York so that he can make a ton of money and then he will be for this industry. I don't know, but that's just one theory. Money talks. He's a businessman first.

SPEAKER_03: 4:18

He is a businessman first. Um but that was that was she she did get a chuckle. She said that towards the end, but it was it was a great conversation with her. She's super insightful and actually had some words about uh what she thought might be a path forward in DC as well. Although I'm less optimistic about any of it.

AnnaRae Grabstein: 4:34

I think we've talked about that before because we just brought to the forefront that our government operates like a gumball machine. Um, and uh you put money in and maybe you get something out.

SPEAKER_03: 4:44

Uh it could it could be it doesn't need to be actually money money, it could be Bitcoin as well, uh, or Trump.

SPEAKER_04: 4:54

Yeah.

SPEAKER_03: 4:54

Yes, right. Um uh Anna Ray, uh I think it was last week as well. There was news about um Rhythm and GTI having their Signorita THC, hemp derived THC beverages available at the United Center, although not at Bulls and Blackhawks games. Although I went to a Bulls game last night, they're terrible, so it doesn't matter what they serve there, nobody's gonna go watch them play. Um Anna Ray, you had on the team from Rhythm slash GTI. Like what were some takeaways from there? Because that is garnering lots of news in this in the search in the in the realm.

AnnaRae Grabstein: 5:26

Yeah, well, so yeah, they had recently announced a partnership with the United Center, and it's the biggest arena that is serving THC beverages, not the first. There's been a number of um music festivals and smaller independent venues, including the salt shed, which is a big one that that GTI did a partnership with before and previously. Um, I think more the conversation is just about that that THC beverages really are um entering hospitality and entertainment zones, and they're they're putting good numbers on the board. Uh, they didn't have exact predictions, but there was a a slight prediction that around five to ten percent of beverages at the United Center when the THC beverages would be sold would be THC at the bar, um, which is is is substantive. Um, and we'll get to see more as it rolls out. The first event was the next day after our interview, which was a boys to men concert, which is pretty old school. They said that it was it was targeted towards uh 40-year-old women, which uh, you know, I guess the graphic that they were really targeting. But I think overall the the concept is that um the THE beverages do really well in mainstream and and outside of dispensary channels, there's a lot of excitement around these beverages, and this is just another place that we're seeing them pop up and consumers choose them within a mix of many many choices. Yeah.

SPEAKER_03: 6:57

Okay, oh sorry, go ahead. No, go ahead, Mark. Go ahead, Mark.

SPEAKER_04: 7:01

Well, you know, for those who are on the stream who haven't who haven't listened yet, I mean, I imagine that they are um there they must be very active in, you know, in in at least, if not directly in the lobbying, at least in that conversation with Congress to, you know, to to um push along some of the affirmative legislation. Uh, did they have any sort of insight into sort of where the latest is and where Congress is?

AnnaRae Grabstein: 7:28

They were very clear that that wasn't something that they were talking about, but they did say that uh GTI and Rhythm broadly do support low-dose beverages outside of the regulated um cannabis channel, and that they believe that THC beverages, specifically low-dose ones, are a strong on-ramp to introducing people to THC that then bring them into the regulated channel. And so that is something that uh that that GTI is supporting. I think in terms of kind of who knows what about legislation, um, nobody really knows anything at this point. And those that do aren't gonna give it up um on a podcast and tell us because the way that things are getting done in DC is with whispers.

SPEAKER_03: 8:14

But if they wanted to, they could come uncultivated or yours or give market.

AnnaRae Grabstein: 8:19

If anyone knows anything real, please let us know. That said, they also um it is notable that the deal that they signed with the United Center is a multi-year deal. And so it actually extends past the November 2026 deadline for these beverages no longer being legal. So I think that that shows a bit of optimism, but I'm sure that there's a backout clause that if uh if the if these products are now illegal, that they don't have to continue the partnership or at least keep uh commercializing them.

SPEAKER_03: 8:47

Yeah, it grabbed our attention and just shameless plug. We have an event coming up in Chicago uh March 12th called the Midwest Cannabis Forum. You can find it at MidwestCannabisForum.com. Um, some of the same people that Anna Ray is talking to about the same subject will be at our event. Um, but thank you, Anna Ray and Mark. You also I I would say at a seminal cannabis musings this week. Um give us I know, right? Um give us a bit about you or you're writing about family podcast.

SPEAKER_04: 9:12

This is a family stream. So let's um sorry, I can't help myself. Um, what about the what about I wrote about the cannabis and their forbearance agreement um with uh with their note holders, um, and which was just you know a another, you know, between them and air from last year. I mean, these are two of the biggest MSOs that are that are in you know in financial distress. Um, and it's a big sign to me. I mean, cannabis, which used to be the Columbia Care, as you know, many know, is was, you know, I mean, they were focused primarily on medical, uh, was kind of their their primary mandate, but they were, you know, they expanded very quickly, just like a lot of the other big S MSOs did. And now um, you know, they closed their um their sale of their Virginia assets to Mill Street yesterday, which was pretty that was a fast closing. I mean, it was kind of impressive. They must have been very close with the Virginia uh regulatory authorities to get that done so quickly, um, to get the approvals done, uh, which then they paid down uh a portion of the notes and redeemed a portion of the notes uh with the proceeds, but they're still in default. It didn't cure the default because they were outside of their um the the the grace period on the payment on the interest payments. You know, so I you know the it I would imagine that the you know the lenders, the note owners are still um uh you know, are still uh you know, still have them over a barrel to a certain extent. So we'll see where that goes along, but uh it's you know it's another sort of instance of of just distress in this industry.

AnnaRae Grabstein: 11:04

Yes. But air came back to life, um, you know, yes, and um and totally recapitalized their the company. Is that where this is all headed ultimately? It just seems like that's the inevitable outcome here.

SPEAKER_04: 11:20

I I suspect that's the case. I suspect that's the case. I mean, it's you know, they're still gonna have to deal with basically what I suspect will happen is the is is they're either gonna, you know, is the lenders are probably gonna um you know take over a portion, you know, they they'll convert some of the debt into equity, if not all of it. Right. The the the notes that are outstanding. Um I mean, you know, you had uh Phi Psy uh was the was one of the note holders about a year and a half ago before they sort of swapped out the notes. These were older versions of the notes that I think were due 2026, uh, you know, was was already rattling the cage um with cannabis. Um but and you you've still got taxes, you know, a still fair amount of taxes owed. I mean, there's still a large debt burden on this company. Um so yeah, but but yeah, I mean I don't think the company just poof goes away. I think you're right, is the assets will end up with the lenders and you know, and they'll they'll restructure it. But uh, you know, it'll be interesting to see. Does Mill Street own a portion of this debt like they did air? I mean, we don't know. Is it Phi CI? Uh you know, I and to me, you know, I sort of noted this in the in the in the musings, is you know, what you know, hopefully we see these assets continue to sort of, you know, uh operate because there's a lot of people who are working for these companies, you know, and and uh a lot of you know, a lot of good good people who are trying to make this this business work. Um so you know, you don't want to lose those jobs, you don't want to lose this momentum that this industry is is is, you know, even though as distressed as it is, is still, you know, we're still making progress.

SPEAKER_03: 13:02

Um can I can I use that as a segue, Jeremy, Mark, and Anna Ray, for something that did come across our emails and desks or virtual desks earlier today, actually, which um caught all of our attention. I'm gonna share it on the screen right now. I and we can talk about what it means, doesn't mean whatever, but it's from Willie, um Willie Nelson's Willie's Remedy, raised$15 million to bring it to THC drinks nationwide. This caught our attention, didn't it?

SPEAKER_04: 13:29

Yeah. Yeah. Um it's interesting, it doesn't say when they closed it.

AnnaRae Grabstein: 13:39

Uh they just announced it though, so that's a good point. It could have been previously, uh, but it is a it is a surprise. I would say that the THC beverage sector and the hemp space in general, ever since November, has had a very challenging time bringing capital into the space. And rightfully so, I think as any investor would be pretty hard pressed to write a check right now with the the policy environment so uncertain. Yeah.

SPEAKER_04: 14:08

No, it may be there may, you know, maybe the investors demanded a clawback or something like that, you know, if there's if if the you know, if something isn't done by November, I I mean who knows? But yeah, it I agree. It is very strange because anecdotally I've heard, you know, the same thing, Annary, that that every deal, you know, that was on the table, every investment deal in the space is dried up like that in November, because why, you know, why would you take that risk as an investor? Um, you know, there's what there's an interesting statement in this press release. I'm just scanning it now. It says that the brand has already sold more than 400,000 bottles, Mickey, the number one THC beverage sold online. Um, which is an interesting statement, you know. I mean, because you know, and I'm not calling them liars. I mean, I'm not doing that public. It's more just like it's how do you, you know, how do they know that? You know, that's it's an interesting claim, um, because there's there's not a lot of there's some information, but there's not a lot of great data yet still.

AnnaRae Grabstein: 15:14

But yeah, and so one of what Nielsen recently said that it at a store level that nowadays is the largest THC beverage um that is on moving through any of the platforms that they're tracking. And um nowadays has Michelle Bodien as their in-house attorney, who often posts, shares a lot of regulatory and policy updates. And they've recently just hired someone that I think you guys maybe announced in the newsletter, um, who is a former uh employ, longtime employee at TTB. And this is this is important and interesting just because online sales are are very challenging in alcohol. They're not completely prohibited. There's certainly like ways that people do it under certain circumstances. But as folks have been talking about the the uh the hopeful kind of perspective of what could happen for hemp beverage or hemp broadly, there's often a discussion of do we get to keep online sales or not? Um and so uh this statement from Willie's Remedy, I've always felt when I am working on diligence projects that if if you're looking at revenue, that revenue should be valued differently from revenue that's traveling through traditional distribution versus online sales for hemp beverages. And and I think that it should be valued at a lower multiple uh because it's a lot less secure ultimately than uh any sell-through that's happening at a store level, which I think people could have a little bit more confidence in, although not in this environment. Right.

SPEAKER_04: 16:56

Yeah, I mean, that's the you know, that's always been the biggest sort of challenge for the wine industry is you know, is the difference between selling direct to customer DTC versus selling through the wholesale channels, um, because you your margins are better, DTC. Um, but you know, but the but the you're you're relying upon the stickiness and the hope hopes for stickiness of those customers. And you know, but at the same time, wholesale is a little more guaranteed, uh, but your margins are much lower. And also your you the r the problem is is getting wholesale distribution. Um, and how do you you know, unless you're big enough, how do you stand out with the wholesalers, the distribution, sorry, the distributors. Well, that's it. And certainly with the three-tier market or three-tier system of alcohol, um, it raises their challenge. So it's yeah, I mean, I agree with you. It's it's very it's very complex.

SPEAKER_03: 17:54

Yeah, which is which is actually, I mean, I which is why the edibles um marketplace, I don't know what we're gonna call it, is actually kind of interesting because they do have the wholesale distribution model and they actually go to direct to consumer and they have a physical footprint. That's not where they're distributing the THC, the sort of hemp derived stuff, but they are using the same distribution system direct to consumer that they have and have big marketplaces. Like I it's interesting because I listened to um Thomas Wynstanley on Ben's um on Brian Fields podcast and talking directly about this, about the logistics behind their operation. And they don't have their own brands yet. So it is interesting to sort of unplug at least that specific example.

SPEAKER_02: 18:33

Um, Jared, you were saying, Yeah, no, I I was just gonna say to Mark's point, I think it's I found it interesting that the first quote in the press release was the CEO of Juneshine, um, which from what I understand handles the Willie's uh what is it, Willie's remedy, um, their their distribution, right? And so I, you know, I it's a it's a curious investment to me, right? Like, you know, if I had 50 million dollars, I don't think I would park it into cannabis beverages, but um clearly there's some broader distribution play happening here. And so it'll be interesting to, you know, uncover that.

unknown: 19:12

Yeah.

SPEAKER_03: 19:12

I will say, um, we were listening to music in the car on the way to hockey, of course. And my son did ask what roll me up and smoke me when I die actually means when Willie Nelson sings it. So we had that discussion. He actually knows, but he wanted me to describe it to him, which is funny. Um the kids do know uh Willie for sure uh from car rides and you know the rest of it. Um we launched something that I actually want to ask your thoughts on. We launched something with our um uh analytics partner at Lit Alerts, and I'm gonna show it here. We call it the brand power rankings. This is specific to New York, uh, and they come together with a um with a formula that uses weighted index that balances um uh market dominance with retail health and pricing strategy, integrating uh estimated unit sales volume and estimated dollar value and uh uh discount uh frequency. But this is the first iteration of that for it's for January, but we launched it in February of the brand, uh, the brand power rankings in New York. And not for nothing, but those first three were all at our event um in New York as sponsors of some of the other ones. Um, but it is an interesting way to think about it. It's not just the top-selling brands, although it mostly is, but it has it has another factor as well. This is something we're gonna be tracking. Think of it like college football, where people will be up, people will be down, and we'll also capture sort of um brands on the rise as they move up the food chain in New York, but it is uh we're calling it the brand power rankings. We may be doing it in other jurisdictions, but we're certainly starting it in New York. Um, but it was interesting.

AnnaRae Grabstein: 20:46

Uh well, yeah, there's a lot, there's a lot here for sure. And and one of the things, and so for people that are listening and not watching, um, top brands, top five are um Heirloom, Jaunty, MFNY, Flores Farms, and Dink by definition. And then even the next two brands, off hours and Ruby Farms and Six and Seven, these are all New York brands. Yeah. Uh these are not national brands. And I think that the first national brand that we see on this list is number eight, Fernway, which isn't even quite national, but I would say more regional at this point, but multi-state. And then rhythm following that at number nine, uh, a GTI brand. But New York is a very unique market when it comes to the brands that are performing well in the market. And whether that has to do with the New York consumer, the strength of these entrepreneurs and these founders, or potentially even the way that the licensing unfolds, unfolded in terms of who got to come to market first, kind of remains to be seen. I think that uh the national brands are working hard to find a footing in New York, and especially the folks that are connected to the original medical operators that are more of the MSOs in New York. I think that we will start to see those brands on the top lists and start moving up as they commercialize further. But it's it's really exciting, I think, to see these New York born and bred brands. And my question for those brands is um, are you gonna stay in New York? Or is is this kind of strength that you're finding in the market something that you see that is ready to be translated into adjacent areas? Like are you are you going to New Jersey? Are you gonna move into Ohio and Pennsylvania? Or do you want to call me and come to California? Um, I think that all those things are are on the table. And and this is how it starts. A lot of the brands that we call national brands, they started somewhere. And New York is showing that it can be a place that that brands can be born, uh, which I think everyone predicted. Yeah.

unknown: 22:51

Yeah.

SPEAKER_03: 22:52

And and don't underestimate um the market is still early and new, and people with uh built-in sales teams like Heirloom certainly had, and distribution like Heirloom certainly had, because they have other, I would say adjacent businesses with operations dating back 100 something years. Like those things about being a real operator actually matter in real markets. Um, and I would also say New York is a very complicated state to operate in, uh, and it's big and varied, and um distribution is not easy. It's very it takes a very long time to distribute from western New York into sort of Long Island, like it's a very big and complicated state to move around uh product in. Um, but it was interesting to see this, and we're gonna continue to do this the first week of every month. We'll be releasing the brand power rankings in New York, and next month will be the one that actually has some tracking data as well. Yeah. And I know we have um some hard outs because we want to get ready for um the Olympics. Uh we have some some stretch, we have some stretching to do, some flights to catch. Um, yes, uh Anna Ray has to watch a couple more episodes of um of uh her show before she catches.

AnnaRae Grabstein: 24:00

No, I I stayed up way too late and watched them all. Uh if anyone there is also watching Heatled Rivalry, uh, you reach out to me. I would love to hear your thoughts.

SPEAKER_03: 24:09

Everybody's watching it. Mike, we're we're watching it uh as a family. I know it's not a family show, but we are watching mostly as a family. Yes. Uh it's not a family show. Uh it raised more questions than Willie Nelson's roll me up and smoke me when I die, but all good questions. Um, no bad questions as a kid and a parent. So um, oh geez, uh that never happens. Uh I would give a shout-out for some of our things, March 12th in Chicago, uh, Midwest Cannabis Forum. Uh for the first 150 or so people that applied to the application, their tickets went on sale today. We'll be releasing more tickets as we go. Um, Anna Ray, Mark, anything else to announce?

AnnaRae Grabstein: 24:48

Um, come hang out with me at the Can of Bev Summit in Miami, uh, February 26th and 27th. I will be moderating a panel on investor perspectives on what's happening in uh THC.

SPEAKER_03: 25:00

I like it. You can talk United Center and Willie's reserve Willie's remedy.

AnnaRae Grabstein: 25:04

Absolutely.

SPEAKER_03: 25:05

Mark, what are you writing about?

SPEAKER_04: 25:07

Oh, me? Yeah. Oh, oh. I I you know, I I maybe I'm trying to think about whether to write about um what's going on in Florida for next week. Um but I but also if you're a lawyer out there um and needs some continuing legal education credit, uh, I'm gonna be uh one of the one of the presenters on PLI's annual cannabis uh law um uh conference or or day day-long event, which is uh which you know is is always a lot of fun, always very interesting. So uh so make sure to sign up for that. I don't remember the date off the top of my head, but PL the everybody knows every lawyer knows PLI, so it's easy to find out.

SPEAKER_03: 25:53

Thank you, Professor Hauser.

AnnaRae Grabstein: 25:55

I will add one thing. Um, for those who have figured it out on their own, awesome. But we are publishing these recordings of a cannabis live this week in cannabis live on the high spirits audio platforms. And so you can listen um to these episodes as well on the High Spirits podcast, on Spotify, Apple, or wherever you get your audio podcasts. And we are seeing a lot of you show up there and listen to them. So thank you for doing that and follow along, um, rate us all of the things, and it gets the word out. So thanks everyone who is tuning into the episodes on audio as well.

SPEAKER_03: 26:33

You just won't see my Canada gear. That's all.

unknown: 26:36

Yeah.

AnnaRae Grabstein: 26:37

Jay doesn't think that audio matters, he thinks the video is the only thing, but so all you audio listeners, that they're gonna be able to do it. You don't even know you don't even know.

SPEAKER_03: 26:48

I'm the co-host of a the the most widely listened to daily business nude podcast in Canada. You don't even know that, and there's no video, so no video.

AnnaRae Grabstein: 26:58

Um if it's so widely why do we not know this?

SPEAKER_03: 27:01

Okay, did you care about Canadian business at all? I should a lot of business. Then you should subscribe to Speak Daily. Subscribe to Peak Daily, it's quite good. Quite good.

SPEAKER_02: 27:13

I read it, I listen.

SPEAKER_03: 27:14

Jeremy reads the newsletter, I do the podcast, it's a whole thing. All right, yeah. Enough of this ridiculousness. Everybody have a good and safe weekend. Go team Canada. The women start, I think this week, uh the men start. I'm talking about hockey in particular. Yeah, yeah. They start this week. The women had their first game canceled yesterday because the Finnish, the women's Finnish hockey team all has normal virus.

AnnaRae Grabstein: 27:36

Jay.

SPEAKER_03: 27:38

All right, that's the next one. We're gonna record that later. All right, thanks everybody. We'll talk to you soon. Have a good week.