Word Of Mouth Beats Ad Spend

SPEAKER_01 0:00

It really doesn't matter how many marketing dollars people are spending on advertisements or billboards or Google ads. At the end of the day, your best marketers are going to be the consumers that come into your dispensaries that walk away with a powerful, a powerful anecdote to share with their friends, to share with their family, to share with their colleagues. And they become your best recruiters.

SPEAKER_02 0:43

And I'm Anna

420 News And Psychedelic Fast-Tracking

SPEAKER_02 0:44

Ray Grabstein. And we're recording Tuesday, April 21st, 2026.

Ben Larson 0:49

And this is the podcast where we pull back the curtain on what's actually happening in the cannabis market with industry insiders living it every day.

AnnaRae Grabstein 1:00

We're trying to have conversations that matter.

Ben Larson 1:03

And today we have a guest who's quietly building one of the most interesting mid-tier MSOs in the country. And we have a lot to dig into. It's gonna be really exciting. But before we bring them on, Anna Ray, happy 421. Uh day after. How are you feeling? Are we awake? Are we alive?

AnnaRae Grabstein 1:23

Totally awake and alive. 420 on a Monday, you know, for me, busy professional. I uh I mostly worked. I made sure to like have a smoke break at the end of the day, but I didn't participate in any big events um or show up at a dispensary yesterday. So shame on me. Um, how about you? What did you get up to?

Ben Larson 1:43

Uh a lot of the same, although later on in the afternoon we brought the team together and had a little happy 420, just social session. But uh it also marks well, today actually marks uh Dr. Harold's uh birthday. And so every year we celebrate 420, 421 uh with a birthday celebration for the good doctor. And uh so yeah, uh Dr. Harold Hahn, my bit my partner in crime, turns 42, which, as many of us know, is the answer to the universe and life and everything.

AnnaRae Grabstein 2:16

Harold is totally the answer to the universe and everything. Absolutely. Shout out to Harold, he always listens and supported supports us. So I'm sure you hear this. And everybody reach out to Harold. Wish him a happy birthday. He will respond, he always does.

Ben Larson 2:32

Yep, yeah. Yeah, I mean, other than that, you know, just uh excited to get into the week. I don't know.

unknown 2:39

Awesome.

AnnaRae Grabstein 2:40

Well, we've got a couple news stories uh that are interesting, uh, both sort of centered around looking at cannabis um and or or like the medicinal value of cannabis as well as as medicine broadly. So the first thing I think that is worth discussing is that at the beginning of um, or on April 18th, a few days ago, Trump signed an executive order to dramatically accelerate access to new medical research and treatments based on psychedelic drugs, directing um federal funds and fast-tracking FDA review of psilocybin and ibogaine and creating right to try pathways um for new molecules. So this is a big deal. Uh some cannabis advocates argue that this this psychedelic pathway, built on more of a physician-led protocol, uh, is a model that cannabis should be looking at for a federal medical framework. Um, what did you think when you saw this, Ben? I mean, it's exciting, right?

Ben Larson 3:43

Like I get excited anytime the White House or anyone uh in DC mentions something positively about psychedelics or or the cannabis plant. And so I'll just say that. But I will also say uh that you know, we also had an executive order back in December uh accelerating or streamlining the process for Schedule 3. Uh, there hasn't been much progress, at least on the outside, uh, that we've seen there. Um, and it just feels like a very big change for the federal government. Like we've seen uh progress with MDMA and other psychedelics come to a halt because of the FDA's uh stance and perception on it. So it's like, is is one signal from the president with Joe Rogan at his shoulder uh going to be enough to to push the change that is necessary to actually streamline these processes? Because anytime that someone's told the FDA to jump, they've not exactly like returned with the highest leap.

AnnaRae Grabstein 4:47

Yeah, psychedelics have do not fit the traditional model of the way that the FDA looks at drugs. And it's been really challenging for psychedelic advocates to figure out a way to uh broaden access to psychedelics just because they cannot get through traditional clinical trial processes and um double blind studies are are really challenging with substances and molecules that have such strong effects on our consciousness when we ingest them. Uh, but either way, as someone that believes in these and these tools, I'm I'm happy to see this conversation happening in such a uh public platform and hope that this does find its way to people that need um that need help and support. And I've I've been reading a lot about Ibogaine and how much it's really helping people who are struggling with addiction. I have a lot of hope that people who need these medicines will have access to them.

Ben Larson 5:48

Yeah, yeah. I mean, look, it's I I I think the benefit that this arm of psychedelics has with regulations moving forward is that there isn't this pre-existing well there is, but the likelihood of it quickly shifting into kind of an adult use marketplace like cannabis did, uh is is less likely. And maybe they've m learned from the mistakes, if if you call them that, of the cannabis industry. But it's like if we can fully get a supportive medical market for psychedelics, that might be the way to progress that into like society more fully, I guess.

AnnaRae Grabstein 6:31

Yeah, so we'll we'll be keeping track. Uh we'll be keeping track and keeping you guys up to date.

Study Claims Big Prescription Drop

AnnaRae Grabstein 6:37

Uh the next story we want to cover is about a new study uh that medical cannabis cuts prescription drug use by 84%. A study of more than 3,500 patients found that medical cannabis patients reduced their use of prescription medications across all categories, including opioids and sleeping aids, by 84%. Uh the data was released and landed uh yesterday on 420. Uh, at a moment when the industry is trying to build a medical legitimacy case ahead of federal rescheduling, and uh physicians remain largely untrained on cannabis as a clinical tool. So I think that this is this is big news potentially. And we have a plant that patients are using to replace pharmaceuticals at a rate that is still being treated as a wellness story, as a niche wellness story, but this rate is really high and the stigma is still running the narrative. So I'm wondering if if this data will will start to change, stage the stigma.

Ben Larson 7:38

It might. You know, lighting the fuse with the pharma companies because I mean this is the kind of information we've always felt and known and maybe even studied and just never like spoke about too loudly. But like this being out there, right? And in and being a reputable study. Um I'm it's just like does this get the pharma lobby?

AnnaRae Grabstein 8:07

Yeah, you're afraid of the pharma lobbyists?

Ben Larson 8:09

Yeah, I mean, sorry, I've been spending way too much time in DC lately. I just I'm like, I I know how the powers that be work, and and with numbers like that, you know, it's very similar to understanding how uh alcohol sales are softening and seeing alcohol's motivation to try to protect hemp beverages, you know, so that they have a new category, a new growth category to lean on. If I'm a pharma company and I'm losing like I have this loss potential, like I'm absolutely going to try to protect that and and try to bring it back. So it's like all the what I used to call fear-mongering about like schedule three, it's like, uh oh, maybe there's some relevance there. Not that I want to start everyone down that path, but I don't know.

AnnaRae Grabstein 8:52

It's an interesting call out because I think that um the hemp beverage space and cannabis in general has tried to not anger alcohol and bev and point out all the reasons that the declines in their category are not because of cannabis. And um there's and they're not and there's some data to show that it is not as a result of. And it looks like this study went the other way to try to show and prove um the medical efficacy of cannabis. But I do think it's it's is for another purpose. I mean, we've got all these states that have medical programs, and it is important to show um the benefits of of these medical programs and how how it's truly helping people with their symptoms to legitimize these state programs that that are that are still kind of coming to fruition in some places. And like we were just talking this morning about Alabama that um legalized medical five years ago and has still yet to open a dispensary, but is going too shortly. And um, and it's it's places like that that need need this information in order to be able to really get their their physicians recommending cannabis and also get their programs launched. So I think it's interesting. Um cool. Well, let's uh

Meet Ianthus CEO Richie Proud

AnnaRae Grabstein 10:11

jump in. Um our guest today is Richie Proud. He's the CEO of Ianthus. Um he spent two decades running retail at scale with Abercrombie and Fitch and Hollister, and um moved through executive ranks at CuraLeaf, one of the country's largest MSOs. And in July of 23, he stepped into the CEO seat at Ianthus, a vertically integrated company with operations, operations across multiple states like Florida, New Jersey, Maryland, Massachusetts, and New York. He's a first-time CEO with a reputation for being thoughtful, direct, and genuinely obsessed with consumers in a complicated regulatory environment where it's hard to reach them. So we're excited to bring on Richie and talk to him today. Welcome to High Spirits.

SPEAKER_01 10:56

Ben Anna Marie, how are you?

Ben Larson 10:59

Can't complain, man. You're here.

SPEAKER_01 11:01

Hey, I appreciate that. Uh appreciate that uh that intro as well. Complicated, yes. Consumer obsessed, yes. Awesome.

AnnaRae Grabstein 11:10

Amazing. Well, yeah, Ianthus is a public MSO that doesn't get the same kind of coverage as curly for Green Thumb. And I think that you've got a meaningful footprint. So I'd love if we could just jump in and you could set some context for us on who Ianthus is today and what you're doing steering the ship.

SPEAKER_01 11:29

Yeah, no, I appreciate that. It's great to be able to uh to speak with you. I mean, Ianthus has been on a crazy journey, and I've joined the company, like you said, in July of 2023. We have a tremendous footprint. That was the thing that attracted me to Ianthus is a great set of assets, great states to work in. Uh, we have presence in Arizona, Florida, Maryland, Massachusetts, New York, New Jersey. We have wholesale operations and Illinois and Pennsylvania. We've got all of these great states and great assets. And so there was a unique opportunity for me to be able to come in and start to work on who is our target consumer, how are we going to define ourselves? And that journey has been uh has been very rewarding coming up on my three-year anniversary. Uh, very happy with the results we've been able to produce over those years. But uh, like you said, this industry is no short of complexity, and that's what it feels like every day.

Divesting Out West To Invest East

Ben Larson 12:19

Um just spinning off the the topic of footprint, you know, the it hasn't been purely focused on growth, right? A lot of it's like cleanup, operational efficiency, like you know, reducing some losses, and and notably actually kind of reducing the footprint a little bit uh by uh selling off Nevada and Arizona. And and I'm curious as to how you're thinking about the geographies and and the differences between those states and the ones you've you've retained.

SPEAKER_01 12:47

Yeah, I think a lot of uh Ianthus' strength sits in the footprint that was acquired privacy uh priva previously to me arriving at the organization. But when you look at where our assets are uh strategically located, we have a very strong east of the Mississippi footprint. Uh that was pretty obvious to me the minute that I walked into the organization, seeing the strength in Florida and seeing the assets that existed inside of the Northeast. Um, I think at that point we took a strategic look at analyzing our uh west of the Mississippi footprint, knowing that Nevada was a place that we weren't going to expand any further. Uh, and Arizona was a market where you have such tremendous in-state operators that you really want people with the strong time and attention to be able to do what they do best. And that positioned us to be able to look at divesting of some assets inside of the Arizona market, and then looking to redeploy that uh as part of our strategy to the east of the Mississippi. And so that's what we did. We took the opportunity to divest of three dispensaries at the end of 24, beginning of 25, and then subsequently reinvested those proceeds into some really big uh CapEx projects that are all coming online in 2026. And so uh it's been a really exciting journey for that perspective. But now we have a new edible facility coming online in Florida, we have a new processing facility coming online in Maryland, and we have a new cultivation facility coming online in New York. And for me, that's really exciting to be able to see the footprint of ianthus continue to grow where we're strongest.

Ben Larson 14:11

Wow. Like can I just double-click on east of the Mississippi, Mississippi, west of the Mississippi? You know, born and raised California, so uh far west of the Mississippi. But um when you say that, is that is is there a is there a difference on how those states operate and like makes it easier to kind of roll out systems and all that kind of stuff, or is it purely just like geography and like distance from from one market to the next?

SPEAKER_01 14:37

Yeah, I think that we see the states east of the Mississippi, you know, you have your Illinois, Florida, all the states that I just mentioned. Um, while the regulatory landscape can look a little bit different, uh, our method of operation looks pretty familiar and similar inside of those markets. Uh you don't have as many states with just unlimited license caps. Um, the competition can look a little bit different inside of the East Coast versus the West Coast. And I think just from a sheer geography perspective, our ability to be able to put resources on the ground and have people living in those markets, communicating regularly. It's nice to be similar to time zones, allows us to accomplish a few things a little bit more rapidly. And knowing how important Florida is to many uh many businesses, us included, really strategically focusing our time on Florida was important as well. And so you start to see some of the regulatory landscape, the familiarity, uh, start to create some themes that just make it make sense for us to have a stronger footprint on that side of the equation versus the far west.

Operating Public With Less Scrutiny

AnnaRae Grabstein 15:37

I want to talk about being a public company. Um, it means that all of us, including myself and all of our listeners, can go find out all kinds of things about you. Um your revenue, your gross margins, all kinds of stuff. So, you know, go do it if you want to. But but I want to hear about what really what it means to be traded on the CSC and the OTC for you as a company leader in terms of your day-to-day decision making and and are you happy being a publicly traded company? Does it make sense for you? It's it's there doesn't seem like there's a lot of stock being traded on the daily when a lot of retail investors paying attention to Ianthus.

SPEAKER_01 16:16

Yeah, I think the recapitalization efforts uh 2021, 2022 kind of led us into the perspective of where we have today. Uh so you have a lot of uh outstanding shares that exist inside of Canada, but we have the ability to be able to operate a little bit under the radar. And for some people, that uh provides a little bit of a benefit, and I think for Ianthus. That's uh one of the things that makes this organization really unique and interesting, is that it was one of the first publicly traded organizations. It was one of the first organizations on paper to be valued at over a billion dollars. I mean, there's a crazy storied history that took place in Ianthus over the years. And then there was the uh there was the recapitalization effort that allowed us to kind of drift into uh into the back and be able to focus on the things that matter, which is operational execution. And so that's when I joined the organization was in the summer of 23. And since that time, that's what we've been focused on is really putting uh putting time and attention on ensuring that the operations are strong. We're doubling down on the states that really matter. We're launching brands and products that really speak to the consumer. We're working to understand who our consumer is. We're recruiting world-class talent to come and work at this organization to take us into the future. And I get to do it with a little less scrutiny than some of the other larger tier one MSO operators, which allows me to go and to build out these facilities in Maryland and Florida and New York and be able to come on the podcast like this and talk about our margin growth has been strong uh since I arrived in 23 all the way to 25. Uh we've put up some of our highest gross margin percentages uh last year. Um we're producing positive cash flow. Like those are things that are really strong elements of building blocks of our business. And it's something that I'm really proud of that we've been able to do over the past couple of years.

Ben Larson 17:58

Man, there's so many directions that I want to go off of this. You brought up Florida and the investment on OpEx, but Anna Ray also mentioned like how uh consumer focused

Building A Flower-First Identity

Ben Larson 18:08

you are, and you have this history of working in CPG. Um let's start there, I guess. Like, how would you define Ianthus to the consumer? What's the what's the promise to the consumer that you are uniquely bringing compared to um the other MSOs?

SPEAKER_01 18:27

Yeah, we want to be a flower-first organization. Uh, so we spend a lot of time and attention on our genetic portfolio, making sure that we're turning out high-quality flour. We've completely revamped our entire cultivation team and cultivation strategy, really leaning on some of the strength that's been found inside of the West Coast. Uh, while I talk originally about our operations being east of the Mississippi and uh the legacy markets being west of the Mississippi, we found so many people who have such a great perspective over how to grow craft quality cannabis in a very competitive market like California. What we found is bringing those people into the organization has been uh a great opportunity for us to be able to double down on what it means to be a flower-first organization. And so what we want to do is deliver high-quality flour because we don't have unlimited cultivation space. You know, I don't have millions of square feet of cultivation space. And so it's important that all of the flour that we turn out of our facilities is of the highest quality. Uh so we brought in a great new head grower. His name's Chad Salute, came from Maven out in California. And so Chad leads our cultivation operations. Through that, we've been able to recruit numerous other uh cultivation manufacturing team members and cultivation team members to reside uh in our markets where it matters most for us to have high-quality products. So we have new people living in Florida, new people living uh in New York outside of our warwork facility, and that's people relocating to join the Ianthus journey and to be a part of this vision that we're trying to create and taking what they've learned from legacy markets and traditional markets and bringing that over to the markets to which we operate. Uh so to answer your question more directly, we want to be a flower-first organization and we want to have ties to uh the traditional market in some way so that we can learn uh the people who came before us, the things that they've done to make cannabis really stand out and to be of the highest quality, and we want to inject that into all of our operations um in each of the states to which we operate and that become part of our DNA, actually.

Ben Larson 20:15

I love that.

SPEAKER_01 20:16

Yeah.

AnnaRae Grabstein 20:17

Well, and I I figure as someone that that does have this consumer obsession, that you landed on this concept of being flour first because you think that that really matters to consumers and um that consumers care about flour. And and we've seen that for a long time, you know, that flour has been the top category for years in our industry. Um and yet that's starting to change. Consumer behaviors are moving more and more towards like more highly manufactured or convenienced products. Um, even just yesterday's review of 420 data, people are talking about how popular pre-rolls are. We know that vapes are kind of right there. Flour, um, from my perspective, will not always hold the top spot. Um, and I think it will continue to erode over time as more people come into the category that don't feel comfortable rolling a joint or packing a bong. Um, I do believe those consumers are here to stay, but um I'm curious of how you actually got to that place of deciding that you want to be a flower-first organization and what were the signals that you listened to in the market that that reinforced that that was a good idea.

SPEAKER_01 21:29

Yeah, I mean, we spent a lot of time on understanding who are the consumers that walk into our dispensaries. And so our largest consumer footprint is in Florida. We have 26 dispensaries now in the state of Florida. And so we commissioned a couple different studies to be able to really intimately understand who's shopping in our dispensaries, why are they shopping in our dispensaries? And what we kept finding time and time again is that our demographic was one that was flour consumers that came to grow healthy in Florida because of the quality of flour to which we produced, uh, and because of the quality of the genetic. That which we produced. And so we over-indexed in terms of flower distribution in the state of Florida. And as we started to take those learnings to each of our different DFDR different markets, we started to see those similarities kind of percolate, that our consumer over-indexed inside of the flower category. And so that gave us pretty good confidence that this was the right way to move for our business. And when I get to couple that with the idea that I don't have unlimited canopy, I get the ability to be able to pivot across a variety of different areas. So I get to make a good promise to the consumer that we're going to make sure that the flour we distribute out of our facility represents the highest quality product that we can possibly grow. But I don't have an abundance of product. I'm not sitting on an oversupply where I have to worry about discounting lower than everybody around me to just move the product. We sell everything that we make. So it allows me to make that flower-first consumer product promise while also being able to focus on the things that you just mentioned, which are the changing demographics over time. Can't ignore the signals that as new consumers enter the space, people have different ways that they choose to inject wellness into their lives and enjoy the plant. And so we acquired a vape brand at the end of 24-25 called Cheetah. So that's now part of our portfolio. We have cheetah products distributed across all of our different states. An amazing hardware, an all-in-one live resin rosin product, just a tremendous asset to our overall portfolio. And so we've been focusing a lot on the brands to which we build so that we're well-rounded. And so while our first starting point is we want to have the highest quality flour, I do believe that the highest quality inputs produce the highest quality outputs. And I think that that actually matters to consumers that if you have strong genetics and you have great quality flour, you should believe that the vape products, the rosin products, the edibles, the concentrates will also be of similar high quality if they're coming from uh the plants and products to which we're talking about.

Ben Larson 23:52

So you teed us up with a pretty good segue there, uh talking about Florida and the customer in

Florida Medical Market Constraints And Signals

Ben Larson 23:58

Florida. Uh you also mentioned earlier that you've invested in this this CapEx project for edibles manufacturing. So an acknowledgement of you know the variety of products that you want to offer that customer base. I'm curious, Florida being the medical market that it is, and before we hit record, we were discussing a little bit about the limitations in packaging and accessing that customer. Can you talk about that dynamic a little bit and and what the customer in Florida looks like in this medical market compared to what you might experience in in some other markets?

SPEAKER_01 24:34

Yeah, absolutely. I mean, we we always say that every state looks different from a regulatory perspective. And Florida for me is actually a little bit of a unique outlier. Uh, you don't get the ability to wholesale in the market, and so you have to grow and manufacture all of your products. So it forces customers to vote with their feet. Uh so you start to see what customers prefer and brands to which they prefer based upon what dispensaries they're visiting. So you can get some good signals in that way. It's a highly desired market. I mean, there's 925,000 patients that are that are in Florida. There's 700 plus dispensaries inside of the state. So we're all learning a lot of information about this highly valued medicinal consumer. And through that, we're learning how to communicate with them just a little bit differently. I think the Florida consumer historically has uh has navigated to a flower first product. I think that they have uh over-indexed from their age because you have a lot of retired military veterans that are in the state, uh, you have a lot of retirees that are in Florida. So you get some different signals from a consumer perspective that you just don't see everywhere because you have those dynamics at play. A little bit of an older demographic that's visiting dispensaries, certainly well educated in their understanding of cannabis products. Customers vote with their feet, they can only go to your dispensary to buy your products. Those three things together make Florida feel a little bit different. And so we all get different signals out of the market, and we know that it's a it's a really valuable market at some point. I have to assume that it will go adult use, uh, although our fortunes haven't turned that way uh recently. I have to assume at some point that it will that it will take shape, but it's a it's in a complex market because it's very capital intensive. And so I anth this historically through the Grow Healthy brands. Uh, we have a rosin-based edible uh that we distribute called Moods, but we haven't had a distillate-based edible or a pectin-based edible. And so that was a market segmentation that represents 15-20% of purchases that we were missing out on. And so that's a new upside opportunity for us to deliver to uh the consumers and the patients of Florida.

AnnaRae Grabstein 26:36

Gosh, there's so much on Florida that I want to ask you about. I think that on the one hand, um, Florida is maybe your biggest market, is your biggest market. You've got 26 dispensaries, you just opened another one. Um but that is is like a David versus Goliath kind of footprint compared to how many stores TrueLeave has. Um and and there's others so that aren't aren't just True Leave. We don't need to mention them all. But how how do you figure out how to compete in a market that is so closed um and and has has competitive competitors

Competing With Bigger Florida Footprints

AnnaRae Grabstein 27:16

that are so so overbuilt compared to where you're at? Uh yeah.

SPEAKER_01 27:23

I mean it's a unique dynamic, right? I mean, TreeLoop has over 170 dispensaries uh that exist in Florida. And how many, how many MSOs have 170 dispensaries in total, right? It's a very unique kind of footprint that exists out there. But coming from lifestyle branding and uh consumer products, like I always have this innate belief that if you can connect with a consumer, regardless of the industry, there's always a playing field uh for for you to exist. There's always a proposition for you to have the opportunity to communicate with people just a little bit differently, um, to be able to talk about the things that matter to you, to be able to uh siphon off the consumer, to be able to have one-on-one conversations. Like in Florida, some of those things really matter. And so while there are a lot of dispensaries that exist in Florida, there's a tremendous patient base. I mean, there's 925,000 patients that exist. We've been operating as one of the original MNTCs in Florida uh from the origination point. So we have a great reputation inside of the market. Uh, that reputation has actually served us really well. And because you have a pretty knowledgeable base of consumers, um, they know what they're getting when they walk into your dispensary. They they call you by name, like our dispensaries associates know so many of the patients. And so we think about consumer engagement versus consumer experience very differently. We show up at different events very differently. Our partnerships with some of the legacy brands from California have been very powerful for us to just learn how they communicate with brands in different ways and the methodologies that they use to espouse their brands and their ideals. Like we've really learned a lot about how to communicate with people from a different perspective. So we're showing up differently, we're at different events, we're focusing more on how to communicate with doctors and um different uh operations inside of the state of Florida to be able to expand that consumer base. And all of those things are ways that you have uh different arrows in your quiver just to be able to uh make your business look a little bit different. Now, you did touch on one thing the marketing regulations in Florida can make it a little complicated. Uh you don't have the same ability to be able to show your product as you do in other markets, but um, because we're one of the original operators, I think our reputation has been very strong inside of the market and continues to grow as such.

Ben Larson 29:30

Well, and in Richie, you you come from some companies that, you know, before cannabis that have really built these kind of cult-like consumer identities, you know, Abercrombie, Hollister, Garage. And I'm wondering like how much of that transfers to the cannabis industry and helps you like develop these these this this brand recognition, or how much have you learned kind of like on the ground in cannabis that's unique? Because you know, we mentioned Florida, and we can work away from Florida as that that unique case, but there's a lot of limitations there, right? You you can't put an Abercrombie model, uh, or maybe you can. I don't um but yeah, like what's the what's

Consumers As Marketers And The Vault

Ben Larson 30:12

the what's the trick? What's the key to building these strong brands like um the vault that you just launched in New Jersey is a good example.

SPEAKER_01 30:19

Yeah, I think that I wish there was a uh one size fits all way to be able to track consumers across all the different states. It takes a lot of work, it's a lot of groundwork that's involved. But when you talk about the things that we've learned from our past, I think one of the things that makes cannabis so unique and interesting is that so many of us have found our way into this space, whether it's through personal connection to the product or something that just tugs at us. Uh, but a lot of us has found our ways from traditional industries into the cannabis market. And we've been able to kind of modify our playbooks a little bit. Um, from the time that I entered cannabis in 2019, I've watched playbooks fail left and right. Like it's hard to come into the space and to say, here's what I did at Company A, and now I'm gonna do it inside of the cannabis space. It doesn't work. It fails over and over again because you have such an established base uh that has an intimate understanding of this plant and this um and all of the different benefits that this plant provides to people. And so you've got to take it from a different perspective. But what you learn from traditional retail or from a CPG space is how to communicate with the consumer that's inside of your store. And what you learn is that your consumers are your best marketers. And if you can find a way to connect with your consumers, it really doesn't matter how many marketing dollars people are spending on advertisements or billboards or Google ads. At the end of the day, your best uh marketers are going to be the consumers that come into your dispensaries that walk away with a powerful, um, a powerful anecdote to share with their friends, to share with their family, to share with their colleagues, and they become your best recruiters. And so we really double down on that consumer engagement. I keep referencing that because it's a little bit different than the consumer experience. Uh when you talk to people about what consumer experience really means, so many times you find people that are really talking about that engagement. They walk in, the consumer walks into a dispensary, they know somebody's name, they know their products. How do you upsell somebody who's been coming into your store for two years in a row? Well, it's how do you strike up organic conversations and get to know things about their lives and introduce something because you know their medical routine and you know their dosing routine? Like there's always ways for us to expand our business in that in that capacity. And so I've been really excited to be able to see this transition over time. I mean, I thought that cannabis would be farther along the lifestyle journey uh than it is. I think you have some brands that really stand out from a lifestyle perspective, but I for the most part, we're all trying to figure out how to have that intimate connection with a consumer so that when a consumer walks into a dispensary, and I'll pivot off of Florida, when they walk into a dispensary in New Jersey or they walk into a dispensary in Maryland, they're asking for cheetah vapes, they're asking for fruitful vapes, they're asking for fruitful edibles, they're asking for the vault strains. And so we've taken those kind of ideas to try to inject that DNA into what we do. Uh, The Vault is a new brand that we launched that's all focused on quality genetics from yesteryear. Like it's really designed to be nostalgia genetics that uh really harken back to where you were in the 80s or the 90s or some of these strains. And what was the first strain you remember smoking? We want to have that strain available, and so we put that into the vault to be able to tell those stories, and that's the connection point is how do we tell stories to consumer uh on a one-on-one basis? That's what we're really focused on.

Ben Larson 33:21

Blue dream, white rhino, green crack. You know, it's just like you're making me rifle through my head.

AnnaRae Grabstein 33:29

Wowie, wowie, and New York sour diesel.

SPEAKER_01 33:33

Because you can go back to like so many times, like you hear a song and you remember where you were, you you smell something, like those the senses matter. And you know, I'll take you back to my time at Abercrombie. Uh, most teams refer to their uh their in-store teams as visual merchandising, but Abercrombie referred to it as the brand census team. It was how do you focus on the consumer's touch, taste, uh, sense of sound, their sense of feel, like all of those things really matter.

Ben Larson 33:59

Definitely smell.

SPEAKER_01 33:59

Yeah, definitely, right? That alone, you smell everywhere, but you remember things when you start to uh you start to put that smell with uh something that mattered a lot into your life. And so when you can capture that with a consumer, like you can watch these individuals come in and you've got this strain that they haven't seen uh in a long time. Like Oaksterdam was one that we released where we had, I mean, so many people come in just to be like, man, I remember being in Oakland in this time period and the underground scene when I first saw this. And like that's what makes this industry so fun is being able to capture those stories with consumers.

SPEAKER_02 34:33

That's so cool. Yeah.

Hemp As An On-Ramp To THC

AnnaRae Grabstein 34:35

Well, so when you're talking about engaging with existing consumers, uh, but when we we talked last, we talked a little bit about hemp. And um, I thought you had an interesting perspective that we don't always hear from cannabis uh licensed operators, which was sort of an openness and an acknowledgement that that hemp is is providing a pathway for people to be introduced to cannabis sometimes for the first time, who are then finding their way to dispensaries. And I think we're in this very complex time right now for hemp. And and without getting into a debate about hemp so much, I am I am curious to hear your perspective about the consumers that we're not reaching because they haven't come to a dispensary yet. And and and and maybe a little bit about how hemp has been an unlock for that, um, if you've seen it, because I think those are stories worth telling as as we consider different channels and pathways to access and what's appropriate in each of those channels.

SPEAKER_01 35:38

Yeah, I mean, you unpack a there's a lot inside of that, right? There's a lot to uh to be able to unpack. I think on the starting point of it, uh we operate within the rules to which we're given. We do the best that we can to be able to understand the rules that are set in front of us and we we operate within those rules and those guidelines. And so as a THC operator, uh we understand what it means to be a THC operator, and so we play within the playing field of what it means to be a THC operator. While on the reverse side, on the hemp side, we get to watch operators do things that we don't have the luxury of doing, but feel so familiar to what I've experienced in my past life. Like you see Instagram ads, and you know, Mark, Mark Thorne, uh Mark Zuckerberg won't let me put up an ad on cannabis, but yet I can't not get served an ad over hemp-based beverages or hemp-based edibles. Like all of these things keep changing over time. But what you see is that there's an industry that's I don't know, $20, $30 billion that's been invented over a period of time that has some consumers, and you don't see a lot of crossover between hemp consumers and the THC consumers. There's not as much crossover as you might expect. And so that industry has been able to speak to people in ways that we aren't able to. And I think what we're starting to see now and what we hope to see in the future is that these people have found their way into some type of intoxicating products that they've been utilizing for something inside of their wellness routine. It's not for me to pass judgment on how people came to find the products, but they found products that speak to either their sleep habits or something to do with their anxiety, or in some way they've been able to come accustomed to utilizing these products. And as states start to put more tight regulations around it, we have an obligation as a business, as a regulated business, to be able to talk about the ways that THC provides similar benefits that they've been able to discover. And I think Florida is a very pro-hemp market. Uh, and so we do see a little bit more crossover inside of that, uh, inside of that industry. And what I see is really with retirees or vets, um, the people that aren't necessarily stumbling into a dispensary because they just don't know what to expect. And so they're shopping in a place that feels familiar to them and a new product is there. And somebody's talked with them about their uh ability to impact sleep. And that's really the starting point of where I really uh got in depth with some of this research was around how people handle sleep. And you saw so many people in Florida visiting um vape shops or convenience stores or any place that sold some type of a hemp-based gummy to try to wean their way off of an ambient or some type of uh sleep prescription. And so we now have an ability to be able to talk about the way that CBN is able to impact people and the way that the regulated market is, and we're seeing those conversations uh improve over time. But it's really like if I'm really getting down to a microcosm in Florida, and I was trying to synthesize this, it's how do I communicate with a retiree market that is largely using prescription-based medications, that I sell a product that is able to naturally resolve and improve in some way the same things that they're dealing with. For the people who hear that message, it's powerful. For the people who are taking benzomedications or sleep medications and they want the ability to be able to wean off of it, there's a message there. There's a communication point that is there to be able to talk about the wellness routine that our store associates and many of our patients and myself to some degree are be able to inject in their lives. That's the close connection point that you get to see the evolution, but it's picking off consumers one uh one at a time. And we're seeing it take place in some of these markets. We're seeing states put tighter regulations around the hemp industry, but I give them credit for the amount of new consumers that have come into the space. It's now our job to find a way to communicate them a little bit more openly and more consistently.

Ben Larson 39:18

Man, Richie, it's very refreshing to speak with you, um, especially because it I get such like a kind of a granular perspective of of the consumer, their journey, the discovery, like getting into the getting into the regulated marketplace, all this kind of stuff.

First-Time CEO Lessons And Forecasting

Ben Larson 39:36

And um perhaps we can attribute this to the fact that you're you don't have the typical CEO track in the in the MSO space. You kind of uh previously were the EVP of revenue, and and you know, I I know with that role you you are looking at all these things. You're looking at how you're connecting with the consumer and how they're going through that whole life cycle with the company. I'm curious as to how that evolution from a role like that has been to now the CEO role, where it's clearly paying off, you know, the visibility and the brand building. But what has come along with the CEO role that that you didn't anticipate? You know, where have you kind of expanded into the uncomfortable um in this this new part of your journey?

SPEAKER_01 40:23

I wish there was a handbook. I mean, it would have been nice to be able to uh to read that handbook uh before coming over here. Um I the journey has been very rewarding to me. I mean, I go back to my career uh early in the 2000s with my time at Abercrombie. My first job at Abercrombie at Fitch was as a merchant. So I traveled around the world putting all the product together and negotiating with factories over how we want uh fabrics to feel and the hand feel of product products and the colors of products. And so I was really obsessed with the idea of like how consumers make choices. And the example I always use with people was around denim. I mean, everybody functionally wears a pair of jeans or a pair of denim, yet there are hundreds of denim brands. And you can pay thousands of dollars for a pair of jeans, or you can pay $15 for a pair of jeans. If you get so many choices available to you, wow, that consumer mentality just kind of followed me throughout my career journey. And then I started to really uh spend my time in the financial forecasting, the product uh forecasting, the financial and strategy side of the world. And I think that's the part that has benefited me most inside of cannabis is trying to equate accuracy to forecast, whether it's wholesale or retail or overall net revenue or margin expectations, product expectations. Like how granular can I get in terms of forecasting product? Can I, do I have to do it at the day level? Do I have to do it at the day product level? Like those questions have just uh been curious to me for the time that I've been inside of the space. And I think that I've brought that perspective inside of cannabis and through all of my career journey is how do I set the most accurate forecast possible? Because this industry is very unpredictable. And you make the best decisions that you can with an imperfect set of information that you've got available to you. And if the one thing that I can provide is an accurate forecast, then at least you've got uh a 95% batting average that you can, okay, within 5%, this is right. So let's make some decisions based upon that margin of error. And I've tried to bring that into the way that I've managed things that I anth this is I wanted to be able to get a strong foothold in the business, make sure that we were in a strong operating perspective, perspective. Let's analyze the assets, let's make sure that we have the right resources necessary to be able to compete in 26 and 27. Let's place some of these bets on the states that matter to us. Let's go to town with understanding who our consumer is. Let's make sure that we're releasing new products consistently. And through that, can I establish enough of a runway to be able to surround myself with people who are able to round out the skill sets that I might not possess? And so that's been important for me. I mean, I think that the most important lesson I've learned as a CEO is that one, I don't know everything. Two, I'm not expected to know everything. But I think a lot of people feel like they need to do so in this seat. And for me, I've just recognized the idea that I need to surround myself with great people. My cultivator is going to forget more about cultivation than I'm ever going to learn. So I get to be a student of the plant, I get to walk into facilities, I get to ask questions, and I get to learn. I get to learn something new every time I'm around some employees, every time I'm in a store, every time I'm in a cultivation facility. And I think that teacher mentality or that humble walking forward with um kind of a humble attitude to be able to just learn something new and to be able to embrace that mentality, embrace uncomfortable. Uh, I've embraced certainly that over the past uh the past six years of my life. And so that that mentality has served me well over the past several years of this journey.

SPEAKER_02 43:39

Incredible.

AnnaRae Grabstein 43:39

Let's let's dive in a little bit deeper into

Central Strategy With Local Execution

AnnaRae Grabstein 43:42

the team. Um, I want to talk about the structure of your organization. Uh, MSOs have taken a lot of different paths in terms of the way that they look at their org charts, in terms of um are they managed on a state by state basis? Um, what are the functions that sit at the corporate level? Compared to our at each market, combination of both. You've also done a lot of acquisitions. The company has bolted on different pieces. I would love to hear about what your philosophy has been about the most functional way for your humans to be organized inside the company and if that's something that has changed since you uh came into the role in 2023.

SPEAKER_01 44:28

It has. I walked into the organization with uh a regional team that was in place. Um, it didn't feel like Ianthus was large enough to have regional teams, uh, certainly not uh three regional teams, is what it looked like at the time at which I joined the organization. And so I wanted to try to pivot towards centralized strategy, but local execution. That's kind of the way that I phrase it to people. Is I've got a core group of team members who understand the strategies to we're trying to pursue. And then on the ground in each market, we have the local experts who are able to take those strategies and put them into play based upon the regulatory environment to which we sit. And so it's a bit of a hybrid approach. You cannot have everything centralized, it's almost impossible. Uh, we don't have a centralized office where a majority of Ianthas employees operate. And so many of us are remote. Um, and so as a result of all of that, it's important to be able to have people inside of the state that functionally report into the strategy uh epicenter of the organization, which is really uh a few key um a few key functions. So our finance team uh sits at uh one side of the equation, overseeing IT and overseeing FPA and accounting. So that keeps the backroom moving. Um that kind of sits mostly in a remote environment. Our revenue team uh works to set all of the demand plans and all of the forecasts for retail and wholesale. So that's where a significant amount of our time is spent is making sure we have right inventory, right place, right time, right form factors in each of the different markets. I mean, PS, one of the largest complications from retail, uh traditional retail into cannabis is I don't get a transfer state product across state lines. So when denim is off uh off kilter in California, just ship some jeans from Florida there. But here you everything stays inside of the state. So it forces you to really understand your demand plan, uh, which puts me in a bit of an advantage because I don't have unlimited capacity. So as long as we have strong sell through of all the products, that puts us in a good perspective. But you need to have strong facility managers in the operations footprint. And because we want to be a flower-first organization, we've invested significantly in terms of our cultivation team. And so whether that goes to uh the way that we capex each of our different facilities, the way that we opex our facilities, uh, the headcount that is there, the technology that we're doing inside of the facilities, we've worked to try to ensure that each of our states that have cultivation facilities have the best resources available to them. And I couldn't be more proud of each of our team members involved in that side of the business. Like it's been such a great uh transformation. You know, just specifically uh by name. We have Heather up in Massachusetts, which has been doing great. Justin in New Jersey, uh, which has been amazing. Uh, Chad, our new cultivators, relocating to Florida. So he's making a big West Coast move from California uh to the Florida market to help oversee our Lake Wales facility and the rest of our national cultivation. Like such a great perspective over what teamwork means and how they all need to communicate collectively. And like I said, we bring in great team members, we try to learn from those team members, and then we spread it across the rest of the organization. Centralized strategy, local execution. And uh, I'll try to double down upon that inside of 26. I expect to make a few more personnel moves to ensure that we're strengthened up inside of the Northeast a little bit further. But outside of that, I think our team is in a really good position.

Ben Larson 47:46

Centralized strategy, localized execution. I love that.

SPEAKER_01 47:49

Centralized strategy, localized execution.

Ben Larson 47:52

So, Richie, over the last three years, you've done a lot, right? You you've changed the operating structure, the you know, kind of uh restructured the team for this execution, uh refined your regions, invested in these CapEx uh projects in Florida, Maryland, New York. That's a lot. That's a lot of building, refining, and and it all seems to be kind of like coming to fruition, a large number of the projects like within the next year. What do you hope to see out of the next three years in in your role? Like what do you think if if this was kind of the the rebuilding and refining phase, what's how would you define the next next phase and what do you hope to accomplish at the end of the three years?

Three Facilities Opening And EBITDA Focus

SPEAKER_01 48:36

Each of the different years that I've been here, we've tried to have a separate theme. So 23 was my first year here. That was the year to make sure that we have the ability to be able to fight in 27 and 28. So let's make sure that we have strengthened and stabilized the balance sheet. That was 23. 24 was all about making sure we had operational efficiency with the assets. We didn't make a ton of moves in 23 and 24, just wanted to make sure that we were doing our best to monetize the assets that we had. If you go back to my original comments, Ianthus has great assets, always had great assets. It's just making sure that we're operating them to a really strong degree. So 24 was about operating the assets that we had at our disposal. 24 into 25 was making a few moves that would advance us into 25 and 26. And so we made the acquisition of Cheetah at the end of 24 into 25, and we divested of Arizona and then redeployed that capital inside of the 25-26 time period. So we're actually gonna have all three facilities open, knock on wood, in the next 30 days. I never would have started on this journey saying I wanted three facilities to open within 30 days of each other, but probably gonna have all three facilities open in the next 30 to 45 days. Um, and so now it's about operating those facilities. So this is now our growth projects that we've invested in, is now making sure that we're operating those to our best extent in 26. 27 and 28 are all about EBITDA expansion. It's making sure that the profitability of the business is one that uh becomes a self-sustaining business. It's one that is investable, it's one that is exciting to consumers, it's one that's exciting to our employees, and we're always keeping our eyes out for different bolt-on acquisitions, for different brands to partner with or to acquire, for different assets to acquire. Um, but I'm pretty heads down for 26, and I think 27 will start to make a few more moves along those lines.

unknown 50:25

Wow.

SPEAKER_02 50:26

So clear.

AnnaRae Grabstein 50:27

Yeah, I'm very interested to hear more about this opportunistic uh kind of watching of the market. And and even if you you don't need to share who you're trying to acquire, who you're going after. I know that's private information, but I would love to hear about what companies in the space that you're watching that maybe you aren't working with, but that you think are great companies or great leaders that are doing good things. Uh I think that that would be telling. So yeah, what are you paying attention to?

SPEAKER_01 50:56

Yeah, you know, I've uh I talked a little bit about uh lifestyle

Brands To Watch And Culture Fit

SPEAKER_01 51:00

branding is where cannabis probably moves in time. I think we're all trying to figure out what exactly the roadmap of cannabis is going to look like. But on my retail hat, I believe that you have lifestyle consumer consumers choose your brand for a specific purpose. And I think large-scale operators have struggled with trying to understand that identity. And it's honestly it's no fault of their own. It's because we have to do so many things as multi-state operators. We don't get to just focus on one thing. We have to do all of these things, which makes it complicated. So the part that I'm most interested in, which harkens back to my uh love of brands, is like, what are the brands that are going to stand out? And I think that there certainly been some strong edible brands and vape brands over time that have been able to really focus and capture to the best of their ability this lifestyle mentality. Um, I've been very focused on uh some friendships and partnerships that I have with Groon, with Timeless. I think the guys at Timeless have just done an amazing job with their business and their expansion. So I have a close relationship with that team. Uh, was happy to see the uh Groon and Wilde, um, Wilde acquiring Groon. That was a great move uh for certainly for Wilde, but happy for my team and my friends over at Groon for that to be able to come to fruition. I think that those businesses have done a great job with connecting with consumers. And so I think what Aaron Morris is doing out there at Wilde is uh is tremendous. Um I think that he's got a very strong visionary perspective. I think he's playing a game of chess that not a lot of other people are playing. And so I'm always interested in uh what their next move is because they're creating unique platforms. And I think if I was synthesizing down like the cannabis industry and where everybody pivots, it's like what platform can you create in order to be able to bolt on new businesses, to be able to have new businesses thrive, to be able to have partnerships thrive. You know, we're just now scratching the surface about what that means. And I think this industry in general is just now scratching the surface as to what that means. And it's not easy. It's not easy to take different businesses and different cultures and to combine them into what you're building. And so you try to find alignment, uh, you do your best to find that strategic alignment from a culture perspective, making sure that we're all playing on the same game. Are we all in the same game? Do we understand where the goalposts are located? Like if the answer to that is yes, it helps to further along conversations. But this industry's been hard to find that cultural alignment. But that's what I'm chasing. That's the elusive unicorn is trying to perfect the culture of Viantha so that you have a place that employees are proud of, consumers are excited about, and the market's excited about. That's the trifecta.

Ben Larson 53:25

Well, and it's extra difficult when the culture is constantly shifting because you're always inbounding the the new new consumers, right? And so it's like you have the old culture of cannabis and how that then kind of that narrative, which you guys are a big part of, like how you're trying to bring that along uh with with the developing industry. That's right.

New States To Watch And Closing

Ben Larson 53:47

As we kind of near out the near towards the end here, um, I want to kind of just ask an open question um about what's catching your attention right now. Like what's what story in cannabis do you think is not getting enough play or or or how's it changing the way you're looking at the at the industry?

SPEAKER_01 54:05

You know, you talked a little bit about some of these executive orders. I feel like from the time I entered in cannabis, we've been waiting for federal legalization or something to happen. Uh so for me, like we try to pay attention to the things that are taking place behind the scenes, great connection points within lobbying networks, uh just to keep our ear on the ground. But I think the part that really matters to cannabis organizations and what should matter more is just trying to use the information you've got available to you today to do what you do best. Find the thing that you do well and just double down on it because it's hard enough for us to predict tomorrow. And we don't have any crystal ball, we don't have the ability to do that, which is why when there's changing regulations in Florida and something might uh change the marketing regulations, we do the best that we can with the information that we have. We've been successful in the past. Let's just keep down that track until there's some signal uh that tells us we need to pivot. But I'm very interested in which new states are gonna come online, interested to see what Wisconsin does. I'm always paying attention to things that are taking place uh in the South. Little known uh fact, I grew up in Georgia, uh, so I'm a southerner at heart, so I'm fascinated at what's taking place inside of that uh cultural demographic as to whether that's going to embrace cannabis at some point into the future. But uh trying to see which states are gonna come online next. We're very active in applying for licenses and writing license um applications in different markets as they become available. Texas, oh my gosh, like I mean, we'll see what happens inside of that market, but no reason to think that Texas won't be huge. Uh, there's some businesses that I think that have done a really good job in managing their assets and have expanded into Texas. And so we'll see what uh what's on the horizon for many of these businesses. But those are some of the big stories to which I'm trying to pay attention to today.

Ben Larson 55:48

Yeah, I mean Georgia being one of the ones that Anna Ray and I were talking about very recently.

SPEAKER_01 55:53

That's right. Yep, that's right.

AnnaRae Grabstein 55:55

Cool. Well, geez, Richie, this has been really fun. And actually, I'll do a quick plug in that Richie and I are both going to be on a panel together next week. I think it's next week in Ohio at the Ignited conference. So, you know, if Ohio is convenient, come see us in person. Um but Richie, um, it is time for our last call. So give us your final message for our listeners. Advice, call to action, a closing thought.

SPEAKER_01 56:21

Absolutely. Well, it's been great to be able to speak to you all. And uh I love that I've been able to share the journey of what Ianthus uh has been and where Ianthus is going. And I hope everybody was able to learn something just a little bit more unique and a little bit different. But uh the cannabis industry is rewarding. I think that we're all in this space because of something that has gripped us. We all love a little bit of chaos, we all love a little bit of uncertainty, but if we can just buckle down, make sure that we're doing the best that we can with the information we have in front of us. You're gonna get to know your consumer, you're gonna learn the brands that are out there, people are gonna find the products uh that really resonate to their wellness routine. And I hope Ianthus is part of that consideration set. We're on an exciting journey. We've done many exciting things in Florida and throughout the Northeast. I couldn't be more thrilled about New York coming online. What a tremendous market for uh for the entire country. And it's gonna be great to be a part of all of that. But uh, I'm really excited to see what cannabis has in store for 26, 27, and thrilled that Ianthus gets to be a part of that journey for many people.

Ben Larson 57:18

Amazing. Richie, proud CEO of Ianthus. Thank you so much for spending the last hour with us. Super informative. You have a lot to be proud of.

SPEAKER_02 57:28

Appreciate that then.

Ben Larson 57:29

I had to get the dad joke in there. That was a good one. You never heard before, I'm sure.

SPEAKER_01 57:36

That's right, that's right. Proud to know, you know what? Every proud that I enter that I meet, I'm related to in some way. It's a rather uncommon name. So I haven't met one I'm not yet related to.

Ben Larson 57:46

Very cool. Very cool. Well, thank you so much, and I look forward to catching up soon.

SPEAKER_01 57:51

Good to see you. Great to spend time with you, Ben. Thanks, Ana Ray.

Ben Larson 57:55

All right, folks. What do you think?

SPEAKER_02 57:57

Thank you for engaging in our in our live broadcast. Uh, especially Maris Cott, uh, Chief Executive Officer at Pegasus Mercantile out of Boca Boca Raton, Florida. All right. What do you guys think?

Ben Larson 58:11

Please like, subscribe, share, do all the things on Apple Podcasts or Spotify, YouTube, wherever you listen to this show. Uh make sure to share with your friends, and like I said, subscribe or review, do all the things, help us be seen.

SPEAKER_02 58:27

Thank you to our teams at Virtosa and Wolfmeyer, and of course, our producer, Eric Rossetti.

Ben Larson 58:33

If you've enjoyed this episode, yeah. Review. I'm just dramatic pause. Like, please, like, I we say this every week. We get a a a little trickle on here and there. Maybe I'm gonna flip it to the front of the show to make sure that you guys are actually listening. I know you're listening here to the end. But that's all. Stay curious, stay informed, and keep your spirits high. Until next time, that's the show.