Data Meets Art In Cannabis

SPEAKER_05 0:00

Look, I think um, firstly, all good CPG is still a mix of data and science and art. Um, I I have a brand strategy background, and so consumer insights really is the core of all of it. But you you ground those consumer insights in data, then you tie to the consumer, the insight itself, this deep, deep insight. And then the art comes from that of how do we connect with our consumers and our audience and um and build a brand around that. And that's where, you know, kind of that art and science meet. So I think the benefit in cannabis is we can still do that.

Welcome And New Baby Chaos

Ben Larson 0:52

Hey everyone, welcome to episode 145 of High Spirits. I'm Ben Larson and I'm Anna Ray Gramstein. And we're recording Tuesday, July 14th, 2026. And we have a wonderful guest for you today. We have Leah Spark. Oh dear, I already messed it up. Spokojni. Leah Spokojni on, the chief revenue officer of BDSA. We're gonna go through data, AI, and all the things, consumer insights. Uh, but before we get there, Anna Ray, good to see you again. Thank you for sucking me back into the real world. Uh the baby brain is real. I am not sleeping much.

AnnaRae Grabstein 1:32

Oh, I know I have yet to come over and meet that baby, but um, I'm gonna be showing up at your doorstep at some point in the next couple weeks because you gotta meet the baby when she still smells good.

Ben Larson 1:44

Yeah, yeah. Women in this baby smell thing is really like an interesting do you not smell it?

AnnaRae Grabstein 1:51

Do you not smell that amazing baby smell?

Ben Larson 1:54

I I I don't have that undying desire to eat babies like women. I just like no, it's like they're like, Oh, I just want to eat it. It's like they they say it in a way where it's just like visceral. It's just like, oh, they actually mean it, I think. And I'm using a very broad day, and I know I'm probably gonna get roasted for this, but whatever.

AnnaRae Grabstein 2:14

At our core, as humans, we are still part of the animal kingdom, and there are little things, especially around childbirth, that seem particularly feral, in my opinion. That and uh, you know, and like nine-year-old boys that are also reminding me that uh that we are closer to the animal kingdom than uh we sometimes realize.

Ben Larson 2:36

Of which I now have both. And yeah, I'm just trying to survive right now.

Federal Rescheduling Hearings Update

AnnaRae Grabstein 2:41

Oh my gosh. Well, um, let's jump right into our news update then. Um, the rescheduling hearings are still underway. If you are living in Rook Rock, yeah, you might need to hear it from us. But if not, um they are scheduled to finish tomorrow, July 15th. And um from there, we will be waiting for Judge Julius to make their recommendation to the DEA administrator, which is Terry Cole. And then from there, Cole will review the record and make a final rule. Uh, important to note that there is no statutory deadline for either of these steps. So even though the hearing ends on July 15th, we do not know when the judge will issue a recommendation. And then from that, we also don't know when the DEA will move. So a big open timeline at this point.

Ben Larson 3:36

Loads of uncertainty. Uh par for the course for our industry, so not surprising. But um, it seems like the the general sentiment coming out of the out of the hearings is that the DEA has been doing uh a decent job at trying to represent the standing as a as moving cannabis to schedule three. And um, if I'm believing a lot of the the takes that I'm reading on LinkedIn, um that there's a good case for cannabis being cannabis and adult use uh classifying as that. So um I don't know. We'll we'll see where it all goes on the synthetic.

AnnaRae Grabstein 4:15

The threshold is some type of medical use, and it seems that the DEA has shown a few different instances over and over that there is some accepted medical use, and that is the threshold they are trying to prove. But how much there is ongoing litigation to try to get in the way of any sort of implementation of the rule, I think, is is really what people are anticipating happening next.

Ben Larson 4:39

Well, can't litigate what you haven't decided on in this indefinite timeline. Who knows? I don't know, I've learned to not place bets on this kind of stuff.

Pennsylvania Delays Adult-Use Legalization

AnnaRae Grabstein 4:48

Yeah. Um, well, next up, uh, Pennsylvania's budget came out yesterday, and Governor Shapiro signed the $50.8 billion budget, but it leaves out recreational adult use legalization, a plan that he has pitched in the budget for four years running. Um this issue is faced with also the same moment that he is running for re-election for governor and that the Senate Democrats in Pennsylvania are trying to flip their Senate. And they believe that if the Democrats hold the Senate, that they will be able to get an adult use legalization bill through. And so it seems like for now, uh Pennsylvania is in a holding pattern while we watch and see what happens with the elections.

Ben Larson 5:40

Womp womp. Yeah. Kind of. So you you hate to hear it, but everything we know about politics, especially nowadays, it just of course that's going to happen. I I don't know. The the more we're we're involved we are with the federal discussion, there's so many times where it's just like, oh yeah, that totally makes sense. But you know, politics and re-elections and all this kind of stuff, it's just it doesn't matter how much it makes sense. It just it's up to so many other things.

AnnaRae Grabstein 6:08

So many things that don't make sense about politics. I'm I'm trying to hold back bringing up um the the senator that died and the senator that seems like he was dead. Um I will hold back.

Ben Larson 6:22

Um but I mean that they're starting to stack up, like kind of literally. They're I I Lindsey Graham was the the sixth one this term. This is what I heard yesterday. The sixth one. It's like, could we please put an age limit on on Congress? Because this is getting kind of gross and and depressing.

AnnaRae Grabstein 6:44

Um yeah, it's it's like a a zombie Congress.

Can Launches A Zero THC Drink

AnnaRae Grabstein 6:47

Uh so anyway, uh maybe a little bit more optimistically, uh, or maybe more reactionary, uh, can who we all have heard of as really the the the forerunner to to the beverage movement in many ways, early beverage player and major hemp THC brand with $40 million of revenue last year, is launching a zero THC functional drink. They're calling it OMG or zero milligrams, and they're launching it as a hedge against the upcoming federal hemp THC ban that takes effect in November. CEO Jake Bullock, who we've had on the show, uh, continues to lobby in DC and says he's really optimistic. That's a quote, that a deal gets done uh by September. But the Los Angeles-based company uh is trying to make sure that they have something to put on shelves in case they are no longer able to keep their THC beverages on those shelves. So I thought this was interesting as a signal of some of the things that the existing um hemp beverage folks are trying to kind of figure out how to navigate. Uh, what do you think? Good idea?

Ben Larson 8:06

Yeah, I mean, uh good or good idea or not, I I think it is telling because of who can is, right? Can has been born in the cannabis industry, they're probably about eight years, eight years old at this point. Um, so they've done that, they've done the regulated space. There's I I don't even know if they're still doing it uh in large, like across the states, but uh, we know they went heavy into hemp. And while other brands are trying to decide whether they want to do a regulated play or do this diversification outside of cannabinoids, um, I think it's certainly worth looking at if you're if you're another brand, like why is Can deciding to do this versus going heavier into the regulated market? Um, even with all this talk about schedule three, because there's been a lot of just pontificating on on what does schedule three mean for legal cannabis, so to speak. We've we've heard this from you know Eric Berlin and others about like, oh, this is cannabis legalization, but it's like maybe it's not from a from a from a beverage perspective. Um, I do love the omg zero milligram like reference just for the can brand, I think it really works. Um, so as far as a branding guy, you know, branding perspective goes, I I think I think it's good play. And and look, even even in a upside scenario where we have can uh THC beverages on mainstream shelves, at some point it would be good for brands to kind of like expand beyond this and and offer a zoom zero milligram or dare I say 0.4 milligram. I know there's a lot of debate whether that's even feasible in in that kind of in-between scenario, but um yeah, just just really interesting. I I think the one thing I love seeing is that cans still fighting, you know, they're they they've been at it for for a long time now, and and they're they're kind of that cockroach that you have to be to to survive cannabis.

SPEAKER_02 10:03

Wow, what a metaphor. Uh um, Jake, if you're listening, how do you feel about Ben calling you that cockroach? I guess I think it's a badge of honor.

AnnaRae Grabstein 10:13

I I I think you're right. It's it's kind of the spirit animal that that keeps coming back, right? Uh well, let's um cue up our guest, who I think will have some great insights on everything that's going on in the news and even more for

Meet Leah From BDSA

AnnaRae Grabstein 10:27

us. So our guest today spends her days swimming in more cannabis data than most in the industry. Leah Spokoshny is chief revenue officer at VDSA, uh, which is a leading market research and analytics firm serving cannabis brands, retailers, investors, and the industry broadly, and is also our high spirits data partner. Uh, the numbers people turn to when they want to know what's actually happening in the market, not what just what they think is happening. Uh, before cannabis, Leah spent over a decade in CPG and healthcare market research. So she knows a lot about translating messy data into decisions that people can act on. And today we're gonna use her seat at BDSA to get a real read on data that's happening in the market. So, really excited to have Leah here today. Welcome to the show. Thanks, guys. Hi. Hi, so glad you're here.

SPEAKER_04 11:20

Thank you. Yeah. Ben, congratulations on your new edition. Oh, everything excused when you're getting, you know, two hours of sleep a night.

Ben Larson 11:32

Last night was especially special. Um, but thank you. Yeah, we we we feel truly blessed. It's but yeah, it is everything is like riding a bike except for the whole sleep deprivation thing. That's the one thing that is just I was not ready for. Totally got it.

AnnaRae Grabstein 11:50

So so Leah, for listeners that don't live in spreadsheets and in the BDSA platform, um, will you tell us a little bit about what BDSA does, who uses it, what are you guys tracking?

What BDSA Tracks And Why

SPEAKER_05 12:03

Absolutely. So we track quite a few things actually. Um, primarily what people best know us for is tracking the sales in cannabis. And when I say sales, I mean the depths of what is driving those sales, um, category insights, attributes insights, of course, brands, and what's happening state by state. Um, and so really our clients use that to understand trends, to understand where markets are going, really fine-tune their pricing for product development. Um, anything you can think of, the data really often helps to support making, making truly informed decisions for, you know, what are what are the risks, what are the opportunities where you can put your um put your dollars? Um, and then we also have consumer insights to really understand the why behind the buy and what's happening on the consumer side. Sometimes they don't tell the exact same story, and that's as important as it would be if they aligned, um, where a good opportunity might be is we're still a baby industry, even when we start talking about markets maturing. Uh, we are forecasting where each state and actually about 25 countries are going over the next five years. Um, so we really are very plugged in and understand how markets are evolving, obviously using a lot of our own proprietary data in order to do that. Um, we are tracking hemp beverage sales now and it from liquor store specifically. Um, and we have um a uh retail site IQ product for uh retailers or those who are working in licensing to look to expand. So um, so much of this is based in the data that really helps brands, retailers, and investors make decisions. That's what it comes down to.

Ben Larson 13:36

Oh, so interesting. I'm gonna have to dig into that hemp beverage side because I I believe like we talked to Jason Zelensky from Nielsen IQ, and I think they largely uh weight on convenience stores, and so like the data put together could be really interesting. Um, but before we get there, you have a deep history in CPG and medical research, and you decided to jump into cannabis, and I'm curious as to what drove that decision, and then once you were here, what was your res what was your reaction to it

From CPG To Cannabis Data Reality

Ben Larson 14:11

all? Like what what were you expecting? Did it live up to it? And does does cannabis data uh deserve all the kind of criticism it gets compared to the data that lives outside of our beautiful little garden here? Yeah.

SPEAKER_05 14:26

Well, uh, so I came in in 2019, uh, where you know everything felt possible still. Um no, but the the reality is it was really, really exciting. Uh uh, the prospect of helping to build the industry, to build up data which CPG, healthcare, the rest of um the major industries across um the world use to drive their decisions in a fundamental way, cannot function in their roles without the data that they're using. And we didn't have it in cannabis. And BDSA was building it, and I was so excited to go and be a part of continuing to push what was possible. At the time, we were, you know, going state by state, launching new markets and had just rolled out consumer insights, which was a strong part of my background. I was so excited to learn something new about cannabis every day. Um, and in general, I'm I'm very well driven by learning. And so when you have access to the amount of data that I have access to, the the rabbit holes and the trends and all of that, um, it's it's exciting. Um, and obviously back in 2019, that was all changing so rapidly. Um, there's been so many phases since then, some more exciting, some more depressing. Um, but in every case, kind of leaning back on the data to understand what's really happening and where there are opportunities. And there are always opportunities.

AnnaRae Grabstein 15:47

Well, so when you think about that trajectory from 2019 to now, not only has cannabis been changing a lot, the data landscape has been changing a lot, and the technology landscape has just been at this pace that's insane to keep up with. Literally, like the last 12 months, there's been kind of more new technology created through AI than in our lifetimes before that. And uh I'm wondering how how you are adapting to that and how BDSA is adapting to that as both the industry and the AI and the technology landscapes keeps shifting.

SPEAKER_05 16:20

Yeah, well, the benefit to really, I mean, sure, certainly us data providers, but also everybody who gets to benefit from it having access to data is I'm sure your point of methodology and the um the accessibility of data and insights has um has grown so dramatically that we have um more detail, more

AI Speed And Messy SKU Problems

SPEAKER_05 16:39

insights, more accuracy. Um, and that that is helpful for us to make better decisions. We don't have the benefit of universal SKUs and cannabis. And so that makes everything harder. Having messy data and making sense of it. That's been one of BDSA's core tenants from the beginning is making sense of messy data. Uh, we're very good at that. And so um as the uh the data becomes more and more accessible, we keep pushing the boundary. And what's the next thing that's hard to clean and make sense of that everybody is um really, really desperate for to help make those informed decisions. So on a you know, larger scale, to your point, the innovation of data technology, forget just in cannabis. I mean, everywhere is dramatic. And so you do have to kind of pick some lanes and really double down and make sure you don't get too distracted. It's um it's an amazing opportunity, but also um, you know, you can't do everything at once. Um, and for us personally, myself, all of our employees, we have to personally just stay as up to date as we can and um mess around with what we have in the various tools. And so there's personal experimentation. It's too easy to kind of get left behind um because it feels so big. You I listen to some AI podcasts, and it's it's like for me listening to stock podcasts, I only understand sometimes 20% of what they're saying. And it can feel very um uh, you know, like I'm already too far behind, right? And and I'll just wait for the next trend or the next wave. And I just think it's really important that we don't do that. We I don't mean just we at BDSA, anybody, um, because I this isn't going away. And the person next to you who is leaning in and using data and using technology, using AI, um, they are going to have an advantage.

Ben Larson 18:25

It's funny because I feel like the cannabis industry, at least for the last 10 years, has been so much built around the art of cannabis and the art of branding and people just swagging it and kind of um, you know, doing their brand building by ear, and that them feeling like that was enough. So it's like already kind of like behind that curve, you know, we're not used to like fishing for data, data insights or consumer insights, and now things are accelerating on the data side and getting that much stronger. And so, like when you're you're engaging customers for the first time, what are some of the big revelations that they're having? Like when they're engaging the data for the first time, like are there are they validating their hypotheses or are they like learning something new and just like is it changing the direction of how they're building their companies? I'm just really curious about that because like we've seen so many brands where it's just like it's you know, they're building it from the ground up with like it's like, oh, I found the perfect strain and I'm gonna name it something ridiculous, and then I'm gonna blow up like this huge, like you know, bro brand around it. Like, how have things changed?

SPEAKER_05 19:32

Yeah.

Brands Learn Their Real Rank

SPEAKER_05 19:33

Look, I think um, firstly, all good CPG is still a mix of data and science and art. Um, I have a brand strategy background, and so consumer insights really is the core of all of it, but you you ground those consumer insights in data, then you tie it to the consumer, the insight itself, this deep, deep insight. And then the art comes from that of how do we connect with our consumers and our audience and um and build a brand around that. And that's where, you know, kind of that art and science meet. So I think the benefit in cannabis is we can still do that. I do think, you know, to your point, Ben, like there were a lot of people, I don't want to say they were lucky. There's amazing, passionate, very um, incredibly um like artists in cannabis who have built really great products and great brands. Um, and I again I don't want to say that's luck, but there's a lot of people who have done that same thing who haven't then been successful. And so using the data to help guide you helps you to increase your chances of success. And where you decide to divert from that data is deliberate because I think there's a lot of opportunities where that lives rather than going in blind and making assumptions and hoping. So, an example of you know, where people get surprised by is um what they think is happening with themselves, the competitors, the number of people who come to me and in initial conversations tell me they're one of the top five brands in their market and like they are not even in the top 50. Um, you know, that's I don't know how much of that is just like um the need to lead with confidence in investor conversations and that sort of thing. How much of it is just sort of what the frame is, like in their local market, they may be right where in their um local city. So we now have regional data that has really helped with that, to be honest, um, to really break down when brands are emerging and expanding to be able to paint more specific stories of where that brand or product might be. Um, but even in terms of some outside cannabis companies who are looking into cannabis, the the assumptions that are made based off headlines sometimes are dramatically um off base in terms of what percent of the cannabis is sold in certain categories. Um, it's all over the board.

Ben Larson 21:44

I I'm chuckling because before we jumped on recording, you made me think of ELF, the movie. And I once again found myself, I don't know why I'm thinking about this movie today, because it's the middle of summer. Um, but like when he runs into a little coffee. Shop in New York and it has a neon sign that says world's greatest cup of coffee. He's like, Congratulations, you did it. You're number one. Right.

SPEAKER_04 22:09

Yeah. Well, that's because I resemble Will Farrell, right? That's there you go.

AnnaRae Grabstein 22:15

Um, well, so you know, I am thinking about this consumer behavior that you guys are talking about and what is real and what isn't real. And we have a bunch of data that we're gonna be talking through this whole episode. Leah, you guys at BDSA put together a bunch of interesting market insights that you shared with me and Ben. And um, I want to dive in and talk about them and share them with our audience and figure out what they mean. So, to get started, we're gonna jump into some of that consumer

Gen Z Vapes Millennials Roll Joints

AnnaRae Grabstein 22:44

behavior. And you pulled some really interesting data on the difference between Gen Z and millennials as it relates to inhalables. Uh, why don't you share that for us?

SPEAKER_05 22:54

Yeah, I mean, anecdotally, this is where you know you can come to some assumptions to start, and then we look at the data. So we know we've heard Gen Z are vaping. They vape, you know, I might say too much. I think we were seeing a uh decline in smoking. Millennials started to get, we had we grew up at Dare and all these anti-smoking campaigns, truth. Um, and vape blew up, and it's huge with Gen Z. And it's showing in the data as it relates to cannabis. So millennials um actually prefer to roll their own pre-roll. Um, it's it's not even, you know, pre-purchase. And that's the difference in can in consumer insights, right? We really get to what are they buying versus what are they doing with it? And, you know, how does that interact with their daily routine? But millennials prefer to roll their own pre-rolls, where or sorry, roll their own joints, I should say. And um Gen Z are preferring vape. Um, they're also preferring inhalables as a whole compared to millennials who um are leaning towards um more edible format. And so um overall, the as Gen Z comes in, they have more spending power and frankly more trend power. Um, you know, I think we're starting to see that shift in the sales data as well.

SPEAKER_03 24:07

Hmm.

Ben Larson 24:08

Man, we're coming out of the gate strong because for a long time I was just like, oh, obviously edibles are gonna grow because there's always this stigma around smoke. Uh, but this is saying the opposite. And I just want to push on on a little bit, is do we think it's a generational thing or is it an age thing? Like when we were Gen Z's age, like were we more inclined to do inhalables? And now that we're getting older, you know, gravitating more towards the edible formats. And um, do do we have the data to know whether that's that's migrating with the generation or if it's a potentially like an age age group thing?

SPEAKER_05 24:50

Yeah. Well, one of the fun and also challenging things about cannabis data is so much is changing at the same time. You know, we call that confounding variables. It's very difficult to actually separate what the different forces are. We have been trending our consumer insights data since 2018. So we do, we can look at millennials, we can look at specific age groups and see how their preferences are shifting over time. And they are, but the whole industry is shifting over time. The access to brands and um also, you know, aging and having different ailments that I'm trying to address with cannabis is also shifting. Um, so that that is um something I don't have in front of me. We can look into, but again, I I will definitely tell you we will probably come out with just as many questions as we go and answers. And and that's kind of my my um my view on consumer insights as a whole is I always come out with more questions and the next one to ask, the next one to ask, because um, you know, that's what takes us down to to get to the really you know the root of what we what we can really do about it.

Why Cannabis Beverages Stay Small

AnnaRae Grabstein 25:44

Totally. Well, so moving on to our next consumer insight is about beverage. And we see beverage sales in dispensaries at around one to two percent of total market penetration by form factor. Um, and it's as high as 3% in Washington. Uh, and some states it's even below 1%, but generally you're in that one to 2% of total. And that's while hemp beverages have been exploding outside of the dispensary channel. And I'm wondering if you can dive into this for us and give us an insight from your perspective if you think that hemp beverages are going to be a signal to increase the overall percentage in the market of beverage. Do you think that we're gonna be seeing all the markets get closer to where Washington is at 3%? Do they likely end at 5%? Are they gonna stay at one to two? What's your prediction there?

SPEAKER_05 26:42

Yeah, uh, so well, firstly, Washington is such a unique market in general. So um, I wouldn't call it a leading indicator. In total, we have, you know, once again, all these different forces. So it looked at the data and said, okay, what is happening in hemp beverage outside of dispensary and liquor channel in liquor channel and convenience? What's happening in the dispensary? And there's not enough markets that show any kind of similar trends to really know what is happening with cannibalization or what's happening with people actually, you know, having brand awareness and kind of category awareness and interest. And that's in some cases likely driving more sales in the dispensary channel. Um, and and there's just um such a state-by-state look at this in every between the regulations different state by state on the hemp side and the cannabis side, like in Colorado, we can't get beverage on shelf, hemp beverage on shelf. Now I actually we can get, I think it's up to two uh milligrams, but you know, it's different everywhere. So, you know, the the reality is we have seen beverage percent increase in New York, in California. That, you know, personally, my interpretation is I think that the buzz, no pun intended, the trend is actually driving more awareness and interest and demand into the dispensary channel. Um but I think time will tell. And I think there's a milligram component to it as well, high versus low potency, that again, um yet yet to be determined what that looks like when regulations, because I think it is a when, not an if, but when they find their way, um I think there's gonna be definitely a um a uh settling over the next few years. But I I think that people will go to dispensary for a different reason than they're going to liquor channel and and convenience and they're looking for different types of products. But ultimately it's an operational um uh issue today in dispensary more than it's a demand issue. And I think that's clear with the explosion of hemp beverage in liquor stores. Um, BDSA uh was predicting 5.7 billion in hemp beverage in 2029. I think we can all put a big fat question mark on exactly what's gonna happen over the next year and how that's gonna be impacted. Um, but this is this is a a force to be reckoned with for sure. Ben, you know that.

Ben Larson 28:58

I mean, you're you're yeah, I was just gonna say like my humble opinion uh is that you know, you go to a dispensary if you're looking for cannabis and cannabis alternatives, and you go to a liquor store or a grocery store liquor section and you're looking for beverages or beverage alternatives. And and that's the big difference. That's where your consumers are. And and Leah, you said it, it's it's a milligram thing. Like in dispensaries, you essentially have liquid edibles, and again, in the liquor channels, you have beverage alternatives, and so the low dose versus the high dose, and this will vary state by state. You know, Massachusetts, they they cap it at what, like five milligrams, and so it's still, I still think it's a very small percentage of the sales there. So we've we've seen different anecdotal you know situations like here in California where there were hemp beverages available on liquor store shelves and they were selling very well, and then you took them off, and there was not a commensurate bump in in the dispensary channel after the ban. So um, I do think it's just a completely different offering. However, uh, it is kind of a uh a gateway, so to speak, to acquiring new consumers for cannabis as they get comfortable with it, and then those consumers may eventually find themselves in a dispensary.

SPEAKER_05 30:18

Um the consumer between dispensary cannabis beverages and hem THC beverages and other channels look more similar than I think people give it credit for. They still it still skews male, it still skews younger, it still skews people looking for higher potencies, but it's where there's a larger percent and where it's growing. So, yes, the female demographic is growing dramatically every wave that we've done for our hemp beverage. Um, but they still don't consume as much as high potency and as frequently. And so when you look at this, it's another thing I think we're I'm always trying to remind people of that it's not just the percent of the consumers, you have to look at how much they're really spending. Um, and that's something everybody assumed the soccer mom was the next big cannabis target. You know, they've been talking about that forever. And I still think that's true, but it doesn't mean that it necessarily overtakes the existing opportunity and the existing focus and what you know what's happening in dispensary.

unknown 31:13

Yeah.

Ben Larson 31:13

Well, and Anna Ray, if we if we apply Zach Weprin's lens to it, right? Like a low-dose beverage does not help the volume sell through of the base ingredient, the plant, right? Yes. And so it's a completely different like like business approach to like you're you're actually selling branded products versus trying to sell more of the plant. And this probably goes for a lot of these vertically integrated states.

AnnaRae Grabstein 31:42

And Ben is referring to last week's episode, uh, episode 144, folks. Go check it out. Well, so I'm I'm curious, Ben, too, on your take from what Leah said, she talked about what BDSA was um was predicting hemp beverages would do by 2029, which sounds like it was close to six billion. I think you said 5.7, Leah. Uh and that is, I'm sure, now changed by obviously the upcoming hemp ban. And if the ban stands and the industry gets shut down, and then we get some sort of legislative fix in the future, do you think, Ben, that we're starting from square one or that getting back to that point that these folks were predicting from data of where it could be will just be a quick blip and will immediately be able to bring all the consumers back that that got cut off from Total Wine and Specs and wherever else they've been buying their hemp beverages.

Ben Larson 32:41

I think the the whiplash would probably be pretty dramatic just because of the clear consumer demand, the pull-through. Like, um, I think there's still a lot of people, especially on the cannabis side, that that doubt the the viability of the category still. Um, but we've been talking to the distributors and the retailers and the sophisticated business folks that that really do pay attention to this stuff and they're more motivated than ever, whether it's this year, next year, or the year after, that they're committed to making this category happen and and they know that the consumer is there. And so you'll go from zero to hero uh in a month or two or however long it takes to back up a category with a viable supply chain, because that is the biggest thing that's at risk. You know, you take a category away and you lose the supply chain. And so, how long does it take to rebuild a supply chain after you've eliminated it? That's the big question.

AnnaRae Grabstein 33:35

That is a tough question. Um,

Georgia And Ohio Regulation Shockwaves

AnnaRae Grabstein 33:39

all right. Well, so we've got some really cool data also, Leah, to share about state by state. And um, why don't I just give you the mic? You chose choose what state you want to start with, and let's talk about some of these major data points that you're watching in different markets.

SPEAKER_05 33:56

Yeah, I mean, we talked a little bit uh when we spoke earlier about you know, what are some of the larger trends and restricted and and unlimited markets and mature and less mature, East Coast, West Coast. The reality is it is very, very fragmented state by state. And that makes it much harder to give big headlines. I mean, you can aggregate anything and give a headline, but to get to the to the real insights. So it is worth really diving into what's happening. And so if you are trying to predict what might happen next in a Michigan, you're thinking about, yeah, what happened in Colorado and this part of California and this part of this market. Um, and so a few, you know, very recent things uh or relatively recent is um we had Georgia, for example, who passed their expansion of their market in May. Um it's been, you know, a very limited market. It's a small market overall in comparison. It was very um edible heavy. Um they removed the 5% cap, they allow vape now, which that is, you know, I think really um part of the biggest change. And um we're almost halfway through the month, and we've already got 650K over half a million in vape sales um in the market. So it's moving fast, it's changing fast. Um, I think that's one an interesting one to keep an eye on, also, because I think it does have a fairly um high hemp beverage focus. And so that'll be, you know, I think an uh one that's gonna have a lot of movement over the next year.

unknown 35:24

Okay.

SPEAKER_05 35:24

Ohio also changed some regulations. They went from in pre-roll essentially zero um over a year ago. That was due to regulations, to now they're about just over 7% in June. Um, and in that same time, we had vape growing a couple percentage points. And this has all pretty much uh been taken from flour um as as it relates to share. Um and then even within pre-roll, you've got 26% of that is infused. So um I think one of the things that we really just I think people know this, but have to focus on is when a regulation is shifted. What does that do to both that state and all of the surrounding states? So you've got Ohio, Michigan, Illinois, they're all connected. When something happens to one, you know, they all get impacted.

AnnaRae Grabstein 36:08

Well, so let's talk about Ohio then for a little bit on that pre-roll piece. So yes, they were zero percent a year ago and now they're 7.2%, but that's still way less than most markets, right?

SPEAKER_05 36:21

And so it was delayed. I think it's still growing. Yeah, it's still growing. Um, I think it got a slow start. Uh, it wasn't, you know, talk about zero to here. It wasn't an immediate um change. And I think uh again, you've got some dynamics between Michigan and Ohio. You have a lot of cross-border purchasing. Um, and uh so there is a component of people have some habits that they're adjusting. And when you have the price dynamics of of how cheap Michigan is, um, we're gonna have to just keep a really close eye on how that impacts Ohio's uh myth. But Michigan is a really different market. Michigan is so flower heavy. And

Michigan Price Compression And Bulk Buying

SPEAKER_05 37:01

again, you talk about two mature markets of California, where vape just overtook flour in terms of number one category, which is huge. That happened at the end of 2025, to um Michigan, which is very flower heavy. Um, you have to, you have to really look at what's happening um at a pretty um specific level. I have a hypothesis that in California, a lot of the same flower dynamics that are happening in the regulated market are happening in the gray market in California. So it just doesn't show up in our sales data. Um, but maybe there's some of the similar dynamics that are, you know, kind of behind the scenes. Say more about Michigan. Um Michigan is the cheapest market. And um recently they had a tax increase, a wholesale tax increase that um everybody had to ask ourselves how much more price compression can Michigan take? Um and I personally thought, okay, we've reached it. This is has to hit the consumer again. We have to see a point at which these prices at least level out, if not increase based off this tax. And it's not the case. It's continuing to drop. Um, prices are um declining um over and over. And then you also have a bulk purchasing um dynamic in Michigan as well, where um especially if you look at flour, larger and larger pack sizes of flour are being purchased. You have um multi-packs of pre-rolls going up. So it is a value market.

Ben Larson 38:30

But it all has to break at a certain point, right? I mean, it's like like you can only produce flour for so cheap. And I think Michigan has already, you know, gone through that floor.

SPEAKER_05 38:43

I like I said, I absolutely positively would have assumed that we would be there at this point, and it's still finding its way lower and lower. Again, the pack size um bulk purchasing helps it to you know get those economies of scale where you know every everybody is still finding that. Now, what I don't have the exact data on is how much is coming from Illinois, how much is coming from Ohio and other places that are, you know, still, you know, looking for that bulk purchasing, not just because of price, but also, you know, just as a uh sort of part of how that that purchase is taking place. But it's 61% flour um in Michigan.

AnnaRae Grabstein 39:25

It's so interesting, too, to hear you talk about this cross-border uh consumer, because we are facing this debate that's about to get very heated in public, I believe, about interstate commerce. And um and it maybe isn't happening between businesses now, but it clearly is happening with consumers crossing the border. Um, I am just really surprised to see your data that Michigan is still growing in market size, even though you're making all of these points about pack size and um larger formats, things like that. It's just that the narrative around Michigan is so negative. Businesses are struggling there so much. There's been so much distress. And then they came out with that huge increase in the excise tax um to consumers. And so it seemed like at that point that that tax was going to be the thing that just kept people out of dispensaries and was the death knell to all these companies that were already struggling just to make any type of profit. But the data shows that it still keeps growing. So I guess that that's one of those instances where the gut doesn't really match the numbers, huh?

SPEAKER_05 40:38

Well, and it doesn't mean it's good long-term business, right? In in back to what we talked about earlier in the podcast of building brands and loyalty and actual uh companies that can make money in the in the industry. Um we need to find a point at which there's you know value and this doesn't uh become commodity. And there are in many, many markets, we're seeing this push uh both directions of value. Yes, we can see that increased pack sizes um and decreased prices, but we also see increase in um looking towards the more premium infusion types and infused flour, infuse pre-roll is increasing dramatically. And uh that's definitely two forces that um I told Anna Ray I was going to look into and didn't quite have time of like, is this the same consumer or are these two unique consumers that you know are are both uh pushing and pulling the market? Um I have a little bit more digging to do there because we do have basket analytics data that helps us to really unpack what's happening in a single purchase. Um, but it is um it is back to what I said about individual market dynamics. And I think we can't remove the um the brand presence concept too. So New York being a new market, everybody's eyes are towards it. It's gonna be big. It's grown fast, quickly. Its prices are actually already starting to come down while it's still in its growth phase, which is a bit unique. Um, there's some similarities, one of my colleagues pointed out, to um to actually how Missouri uh matured so quickly. Um, but it is driven by a few very large brands in some cases. Heirloom has such a large presence and such a um um big brand share there that beverage is higher and they are in vape is higher, and those are their two big categories. And you can't discount that force, right? Um, and so uh as a market matures, more brands come in. I think you know, you do start to see some changes just because of time, right? When we define maturity, that can be by price compression, it can be by time, it can be by a lot of different dynamics, but it is still new.

Ben Larson 42:54

It is really interesting to think about, like, you know, Anna Ray, if we get that legalization, the the interstate commerce, it brings back this old discussion we used to have when anything was possible, uh, you know, in the early days. And, you know, we would think about other industries and how they all kind of went through their mass market eras, right? It's like, you know, beer, Budweiser, Coors, Miller, like they they were the the lion's share for a very long time. I mean, still kind of are, but coffee had Folgers, chocolate had Hershey's, right? And and these were decades-long eras of of just mass market appeal, and then it created the foundation and the desire for people to want more craft product. And cannabis, in a way, has building been building it all at the same time because you have these controlled like micro markets. And if we find ourselves in this era, like maybe Michigan's a model of what we see nationwide in the future, it's like who can survive and scale the biggest and just create a consistent product for the masses. And then once that's just kind of a given and established as a foundation, is like then you find the people who desire a craft product. And it's weird to be building this in these kind of like small markets and then try to imagine what happens

Market Maturity And Interstate Commerce

Ben Larson 44:14

when we might migrate to something that's much larger and gets to benefit from economies of scale.

AnnaRae Grabstein 44:20

It's crazy. You know, I'm a student of Costco. I think that their model is so interesting. And as you were saying that, what occurred to me is these sort of personalities that each of these different states have. Like may Michigan is Costco. And then you've got, and then you've got, you know, um New York that is a little bit more craft. And um Trader Joe's, maybe. Yeah, maybe they're more Trader Joe's. And then it's all going to come together into this new strip mall where you'll have all these choices if interstate commerce happens. Otherwise, you'll just each state will continue to have its own personality. Yeah, so interesting.

SPEAKER_05 44:56

Well, and and who can survive nationally building a business that way, right? Like that there's no ability to truly build economies of scale and to produce the right product at the masses to your point, Ben. And then what does craft really mean? I mean, right now, for example, the MSO is trying to do both at the same time, even within their companies of, oh, this is our more premium, more select, the strains are more um uh, you know, fine hand picked versus the one for the masses. And that's happening under the same company. Um, again, while we're still a young industry and while they still can't do interstate commerce. So yeah, it's it's definitely like Colorado has no business, probably growing our own cannabis as it relates to our climate. Um, and a lot of the trends still still do naturally come out of California. Everybody does still, like I can tell you when we have clients looking for trends, they are looking to California first.

Virginia Forecast And Medical To Adult-Use

AnnaRae Grabstein 45:54

That's interesting. Well, so let's do one more state before we move on because I don't think we can skip Virginia. There's been so much discussion around Virginia and its recent finally move to figure out how to implement adult use, even though their adult use has been a law for a while. So why don't you give us some of like the current data on what's been happening and what you guys believe Virginia will become?

SPEAKER_05 46:20

Um, so there's the medical program right now is doing 93, about 93, 94 million year to date and 103 brands, which is um not bad. It's definitely um one of the smaller markets. But looking to 2030, we forecast it to be 100, uh, sorry, 750 million in total legal sales. And that's once adult use um actually does launch. So we do have it, uh adult use sales taking effect in 2027 in our forecast, um, and then um overtaking the medical program size immediately same year. Um, and what we always see pretty much is that medical program declines as the um the adult use uh really takes over. So yeah, seven, seven hundred and fifty million by 2030. Um, right now they're a flower dominant, they're following a fairly predictable path in terms of the the makeup. So 42, 43% flower, 28% vape, 15% um edible. So it looks pretty predictable. And um, you know, we do uh we'll keep a very close eye on what the personality of Virginia becomes once they're really um, you know, eyes move closer towards it.

AnnaRae Grabstein 47:32

Fascinating. Uh yeah, I was surprised to see that Virginia isn't predicted to become a $1 billion market uh because it's just in my mind that's sort of a threshold of that it moves the needle because there's been so much discussion around Virginia. It's like, ah, it's not even a billion bucks. But um, I think that a lot of the existing companies that operate in other states are in Virginia and are really looking to that boost to kind of 10x what they're currently doing there, or at least 5x of just a lot of growth and not anticipating a lot of new entrants.

SPEAKER_05 48:07

Um with um with every new market, too. I mean, we do see the total cannabis industry is still growing. That is happening from new entrance to the market primarily. And uh the reality is with every new entrance, there's surrounding states who already have programs make the new entrance less impactful than we used to see when new um states came online and basically represented a whole region in some cases when it when it flipped to adult use. And so I think that's part of where you know some of the softening of new markets comes in.

Ben Larson 48:40

Okay.

Using AI Without Getting Fooled

Ben Larson 48:41

I want to you mentioned AI earlier, and AI is always top of mind, so I kind of want to like jump over back into that conversation. Um, one of the things about AI is its ability to crunch data and everything is been what it's what it's been lauded for. And you mentioned that BDSA has been been looking at it, been working with it, and I'm excited to hear, you know, how how are you guys leveraging AI and how does it change the landscape of of the offering and and kind of like what are the ways that people can work with it today? Um, just because I don't know, I think I think it really is at the top of everyone's minds right now.

SPEAKER_05 49:26

From a BDSA lens, we've been using AI for a long time behind the scenes and building our products and cleaning um data and things like that. From a client-facing perspective, um, as we move forward, it's gonna look more and more like how you interact with the product. Right now, we've got um one solution right now that's a mobile solution that's in beta that really um utilizes AI to translate the story for salespeople to um move away from people. You know, if you don't know how to think about data, we're always reminding ourselves that it is a bit of a foreign language for people who don't have exposure to it, looking at a chart, looking at a table. It it for someone who's fluent in the language, it seems like obvious. And for others, you can go cross-side and say, like, okay, I know this market really well. I this is just distracting from you know how I know to do my job really well. And so translating it into other audiences, I think is a really important use of it for us. Um, and then also overlaying it with other data source sets, other data sources, um, and really getting to the bottom of insights that otherwise independently um don't necessarily tell the full story. So that's going to be really important as well as we continue to advance for us, looking at healthcare data, looking at other, looking at wholesale data, looking at other data sets outside of what BDSA has historically reported on. Um, and then overall, I think the um the most important thing for us all to realize is it's young, it's not yet um at a place where um I think we should overly trust or rely on um too much if it's not spoon served in just the right way. So that spoon serving can be I'm very careful about how I'm using it. We have an MCP to Claude, so I'm constantly, constantly using our data through Claude. But you better not ask it a simple question and just trust everything is going to happen exactly how your brain is um interpreting the question if you don't tell it to do exactly that. You have to basically, with your words, if you are have ever looked in any of the data platforms, how you use filters and how you define what it is, the time frame, you want to look at the market, you want to look at the definition of where you're using. Um so I think that's that's easily overlooked. How it's still something that needs really careful guidance. It's an assistant. It is not your senior analyst yet. Um, what BDSA is working on is solutions. How can we turn it into a senior analyst for those companies who don't have it without having to have those inputs? And so we're certainly working on that. But um, but today, you do not want to just unleash it and expect it to do all of its work for you. You will end up with silly results.

SPEAKER_03 52:02

Yeah.

MCP With Claude Changes Data Access

AnnaRae Grabstein 52:03

The MCP Claud integration, for those that don't know what that is, I'd like to dive into it and understand you said that you have it and that you're using it. Is that something that's available to customers? And how does that relate to what you're seeing in the market in terms of the customers that you work with, which are really customers across the supply chain of all different sizes, how they're using AI in their own companies? Yeah.

SPEAKER_05 52:27

Um, I am not an overly technical person, but MCP stands for model context protocol. And basically it translates the large data set in a way that Claude is able to read it. So um for us, it means I can ask it a simple language question of, you know, what are the top 10 brands in California in the last year? Um, or it can mean I can ask it to do very deep analytics on the data and use it as a source. For uh for our clients and who's using it. Um, that's well, actually, I should go to first year question, which was do our clients have access to it? Yes, um, they do. And um, the use of it ranges that dramatically, right? You have to, if you want it to be your analyst, you have to know how to teach it to be your analyst. Um, but it is bringing really quick answers to people who otherwise may not have the patience to go into another platform. Um, it's also bringing the questions into where they're already working. So if they're doing an investor deck or they're writing some insights for their executives or whatever the sales story might be that they're pulling for um for a store or that a salesperson might be going after. If they're already working in Claude, it puts the data where you are in the context of everything else that you already have access to. Also overlays it with other data that you have, also coming into Claude. So that's where I mentioned, you know, the opportunity of overlaying other data sets. Um it definitely is going to advance what every company is capable of doing with data, but it's leveling everybody up. So those companies who previously were pretty data savvy are now investing really heavily in the entire systems built for their whole companies that's that are surrounded by not just BDSA's data, but their internal data sets, um grow data, um, customer data, all of those things um in one and basically running their whole business of how AI is um packaging it all for them. Whereas those who maybe weren't using data at all now have the opportunity to ask it some basic questions and do some um some maybe price analytics on it that you otherwise may not have known. So it really kind of at this point is leveling everybody up.

Ben Larson 54:35

Wow. Yeah, it's uh it's funny. It's like go ahead, Andre. Yeah.

AnnaRae Grabstein 54:41

I was gonna say it just it occurs to me that a lot of these uh social posts that I've been seeing about how user interfaces are dead is true when you're talking. Because if you can take all of your data and talk to it and claude in this conversational way, it starts to feel like like you're just in a text thread with a friend, getting everything that you need. And this investment in user design and interface and the way people navigate platforms, which has been such an important part of engineering and and design over the past 20 years, is starting to just disappear in terms of how things all connect to one centralized platform.

SPEAKER_05 55:22

So really data quality becomes that much more important uh in terms of the products you're looking for, more so than to your point, the user interface, because as you look to rely on it and it be things become automated around it or big um uh systems are built around it without a human eye to you know really deciphering exactly what it's representing, you have to know not only what is available in the data to be pulling from, but also how much can you trust different pieces of it, what does it really represent? Um, and so that's you know, definitely something I would encourage everybody to think about, um, depending on how you're using data. If you want something directional, great, it's out there. But if you want something to really make decisions around, you have to um really look towards what are the relevant pieces of information around that decision. So, for example, if you want to update your pricing, knowing the infusion type and the pack size and the um, you know, all the minor attributes around this, if it's an edible, the minor cannabinoids, the claims, is it sugar-free, all of that is relevant to how you then price. Um, and so you know, that's where more detail becomes important.

Are We Still Early In Cannabis?

Ben Larson 56:29

What's so interesting? What it did for me was draw a very definitive line between like SaaS versus data and like the the how much more solid of a business BDSA must be compared to like something that's simply a SaaS interface in between the data. Um but that makes me want to zoom out, especially as we approach the top of the hour here. Um, so much has changed since 2019 when when you got in and you know the industry has matured. We're talking about rescheduling this year, AI has come on in a big way. Like on this trajectory in your mind, like where where are we where where's BDSA? Where's the industry? And like what do you see ahead of us? Like, are are are we still on the first inning, like we've had to be saying for the last 10 years, or are are we maturing as an industry? Like, yeah, what what's what's your take on everything?

SPEAKER_05 57:23

Um, so I saw tons of people come in from CPG between you know 2019 and 2020, and so many of them were asking for some of the same data that they were using in their previous companies um in CPG to make their decisions. And those same people, some of which are still around, um, are using that. But the reality is I think the the challenges in cannabis are so great, as long as we don't have interstate commerce, as long as we have so many restrictions on advertising, as long as so many the regulations change every five seconds. Um there's a lot of distraction as it relates to, you know, how do you really use some of the sophisticated um, you know, pieces that are even available to you that you might know how to do? So I'd say I think we are in in, or I don't know if it's a first inning, but we're in an earlier inning until things really do, until there is federal legalization, truly, or at least interstate commerce. Um, I and we are living in a state-by-state world when we technically have national brands. None of it aligns, and and we're not gonna see the same level of sophistication we see in CPG brand and product decision making.

Last Call And Listener Requests

AnnaRae Grabstein 58:35

All right. Well, it has been a joy to have this conversation with you. And it is time for our last call. So, Leah, what's your final message for our listeners? Advice, call to action, or a closing thought?

SPEAKER_05 58:48

Um, well, if you would believe how much data I have prepared to share, and I'm barely, barely scratched service because I tend to talk too much. There's so much more here. I, if you aren't talking to a data provider, go talk to um one whether it's just to get you will get a tremendous amount of free insights. If not, um, you know, actually find the value that it's it's an investment um coming back to your to your company to make these decisions from a data back perspective. So you will get a wealth of information, even just talking to some folks at BDSA or um, you know, different data providers. So if you're if you're not already going down that path, just know that your competitors are and they have an advantage. Um, and so take you know, take that.

Ben Larson 59:29

Awesome. Awesome. Leah Spagajny, BDSA, thank you so much. Yeah, I got it this time. Thank you so much for spending the last hour with us. Uh tons of information. And and ladies and gentlemen, if if you want to hear more about BDSA's information, just tune into some of Anna Ray's LinkedIn posts. She's been putting out a bunch of data-driven driven posts.

SPEAKER_04 59:51

I'm due up for another. I will soon. Wait till she gets her hands on the on the MCP and Claude. Oh my gosh. I would like to.

Ben Larson 1:00:00

Power user down here. All right. Leah, thank you so much. We'll talk to you soon.

SPEAKER_04 1:00:04

Thanks, guys.

Ben Larson 1:00:06

All right, folks, what do you think? Uh, go get your data if you're if you're making decisions without it, even if it is in the face of it. And uh just it's better to know. Better to do it deliberately, as Leah said. Thank you to our teams at Vertosin Wolf Meyer, and of our cur, of course, our producer, Eric Rossetti. If you've enjoyed this episode, please share, like, review, do all the things wherever you listen to your podcast, especially on YouTube. We're growing on YouTube. That's a thing, I guess. Uh, thank you for listening. As always, folks, stay curious, stay informed, and most importantly, keep your spirits high. Until next time.