Welcome And Blunt Takes

SPEAKER_00 0:00

I'm polite but blunt and I have strong opinions. THC beverages through the hemp channel, specifically Delta I has done more to normalize cannabis than any other effort to date in our country.

Ben Larson 0:33

Hey everybody, welcome to High Spirits. I'm Ben Larson. It's September 15th, 2026, and this is episode 153. We've got a great show for you. Anne Ray is out this week, so I've invited someone, someone, uh, who also owns a business called High Spirits. Apparently, we're gonna resolve the branding confusion by just making it worse and getting us both on the same show. Sound good? All right, Chris Fonse is here, Chris Fontes, Chris Fonch as my co-host for the news, and then my guest. Uh he's a close friend, a founder, software guy, a barefoot shoe wearer. We'll talk about all that. But uh someone uh whose first impression of me may need some explaining. We've gone on a little bit of a journey as far as becoming friends, and maybe it's a good signal of how the rest of the cannabis and hemp industry should come together. But uh, we'll get into all that first. We're gonna go through some news. And before we do that, Chris, as we're reporting on the news, what should you warn me about now filling Anna Ray's seat? About your perspective on the space.

SPEAKER_00 1:42

Oh man, well, uh I guess the warning is I'm polite but blunt, and I have strong opinions. But I'm always willing to academically debate these opinions in a calm manner, and I'm open to being wrong and being proven wrong. I've made several adjustments to my tune over the last eight years in the space.

Ben Larson 2:00

I do notice you have a knack for staying calm and continuing to push while people absolutely lose their living shit.

SPEAKER_00 2:06

My favorite thing, really. Like if someone shows an inability to keep their cool, it's so fun to just like push a little bit and watch them go nuts.

Ben Larson 2:16

Yeah. Yeah. All right. So

Cannabis Money Funds Anti-Reform

Ben Larson 2:19

let's jump in. There was an article that I saw posted on LinkedIn. It was related to something else I saw, but Nate Faulkman wrote an article about the fight that smells like skunked money and child safety. So this is a really interesting story because there's different angles, and depending on how you look at it, it might mean something different to you. But regardless, cannabis money is funding anti-reform politicians. So a Trump aligned super PAC, American First Agriculture, raised nearly $1.8 million from cannabis companies to run ads supporting vulnerable House Republicans who consistently vote against marijuana legalization. Uh, this was interesting because there's a lot of MSOs that are putting money into AFA. I think collectively they might have raised up to $20 million. So who knows where that money's gonna go? And then there's a bunch of different organizations that AFA is attracting. You know, PACs are professional fundraisers, so I'm sure they're also pulling money from hemp as well. And when we start picking apart some of these people that were supported, many of them actually supported the extension for hemp. And it's interesting to see these MSOs all in this group. So there's just a lot of um, yeah, there's a confluence of different narratives that pertain to cannabis and hemp with this. And Chris, I'm curious as to what stands out to you when you see stuff like this hitting LinkedIn?

SPEAKER_00 3:46

I mean, it's it's uh the two beacons, if you will, of light that shine out through this article are both highlighting the complexity of our space, uh, but also highlighting some of the hypocrisy of our space. To me, as a hemp operator, it's classically funny when marijuana is complaining about marijuana companies funding anti-marijuana senators when marijuana companies are funding the rescheduling of hemp THC as well. And I'm like, this is how is this different? It's the same thing to me. Also, the complexity here, right? Like uh PACs uh are how you move the needle at times, and PACs are going to inherently distribute those funds, how the PAC sees fit to distribute those funds. And it's not exactly pay-to-play, but it's as close as you can get to pay-to-play. Uh, but it still isn't pay-to-play, which means you can't say, I'm gonna give you this dollar and here's what I want you to do with it. Right? There's good bobfiscation here required for the sanctity of our democracy so that these PACs have the discretion to distribute the funds how they see necessary. Um, but and how they see necessary is gonna be a strategy that they've devised, and hopefully it's in alignment with the donors of the pack ultimately. But sometimes it's not, or sometimes it's complicated. And this is a very complicated situation, in my opinion.

Ben Larson 5:10

Yeah, there's a a lot of reactive spending going on right now. And I think this whole lobbying concept is relatively new to cannabis and have relatively, I should say, truly's been spending out a ton of money over the last several years, but still it's kind of like new money coming in, and it's probably there's conflicting spending happening. And so it's when you're trying to buy the here and now, it's interesting to think about like how are those decisions ultimately made, whether it's the lawmaker or whoever's contributing most, and what decisions end up coming out of that. What we're getting a lens into on the beverage side is the people that have been spending spending repeatedly just as an exercise over the last several decades, right? And so it's like if you're coming in with these reactive dollars, like how much is it actually going to sway the vote when you have someone that's been paying, I was gonna say paying these people off, but supporting these folks, investing in them for years, right? And so yeah, it'll be interesting to see how it all comes out, but it really does go to show like there's just a lot of financial interest driving support and a lot of blind eyes to what some of these people stand for. I Andy Harris, who's a prohibitionist. That's right.

SPEAKER_00 6:24

And and you know, it's no secret that the American democratic system is built upon dollars for campaign, right? This isn't news to anyone. When you're close to it, it feels worse than it sounds. Uh when you when you're at a distance and you hear about it, you're like, of course that's how it works. But when you see it actually impacting your business and industry, it feels a little more painful. But it shouldn't be a surprise that the there's massive fundraising needs by politicians and that that shapes their direction to some extent, which it shouldn't, but it does. And to your point, having a donor that has been a donor for decades is an indicator that donor will continue to be a donor for decades. When one comes in and has been around asking for favors, but not being a donor for years, and all of a sudden they spike a bunch of money, it doesn't probably feel very permanent. And it's probably less effective than the slow, steady, consistent dollar spend. Yeah.

Ben Larson 7:24

Yeah.

Cannabis Roundtable Vs Hemp THC

Ben Larson 7:26

Well, speaking of hypocrisy, there was another post that I saw coming from the U.S. Canvas roundtable that uh they had a fly-in last week, met with members of Congress Wednesday and Thursday to discuss closing the so-called intoxicating hemp loophole from the 2018 farm bill that led to the emergence of psychoactive hemp products like Delta VIII. The fly-in comes after Congress passed a continuing resolution delaying the intoxicating hemp ban by one month, pushing the effective date from November 12th to December 11th. Not completely true. There was some refinement in there. Not a lot, but there was some. USCR said on X that they were disappointed when the CR with the hemp provision passed the Senate back in August. USCR met with Republican and Democratic House offices, including members from leadership, the House Rules Committee, and the Freedom Caucus. House Freedom Caucus leader Andy Harris supports the intoxicating hemp ban. Really interesting because I was losing my uh proverbial shit last week about Cure Leaf and them polling the federally illegal defense card against happy farms in Michigan. And so it is really interesting, again, to see this convergence of people lobbying against freedom of the plant. And I know you feel very strongly about this, but let's keep it concise. How do you react when you hear representation of like USCR, who's got a very prominent voice, Keerleaf, who is, I believe, the treasurer of USCR, going in and fighting against uh HEP?

SPEAKER_00 9:01

Yeah, for those listeners that are maybe unfamiliar with me, Ben's polite request to keep it concise is a nice way to say, Chris, wrap it up. You talk too much, uh, which is the totally fair. Um, so how preemptive. Preemptive. Preemptively. Look, how I react to this is it that the hypocrisy is infuriating. Because uh in order to justify this action, you have to allow yourself to submit to a cognitive bias that is demonstrably false, which is the hemp-based THC is somehow inherently bad and not valuable, and also not cannabis. You have to believe those things in order to attempt to recriminalize the small amount of THC that has been decriminalized, the descheduled. And it and there's no way you can argue a different perspective than that. And when you do, it just highlights your bias and it quickly comes out in the conversation because you can't actually back up your opinion with anything other than, well, I feel. And it doesn't really matter. This position is advocating for the criminalization of THC, therefore putting people back in jail for simple possession of hemp products. It occurs to me, had the 2018 Farm Bill, which we can talk about intent, and it wasn't the intent, and I'm I can always concede that fact. But if the 2018 Farm Bill had called the called hemp adult use cannabis and made the limit 0.3% and said it's got to be super low, but this is the adult use program, literally nothing else different, just the name change, we wouldn't even be in this battle. The entire marijuana industry would have embraced it with open arms and fought to hold the little wedge of descheduling they had. They would have all been saying the same rhetoric the hemp industry is saying today. But because it was called hemp and not embraced in this regard, frankly, people didn't realize probably the capability. Um, I was as the first person to expose this path. I'm hyper aware that people are not aware of the capability. And uh instead of embracing it, they fight it. But it's terminology. It's everyone wants to argue, well, that wasn't the intent of the law. Well, you're right. The intent of the Controlled Substance Act was to disproportionately affect black and brown communities. So is that the intent we're protecting? That's a wild take to me to go back. Well, the intent is off. Since when do we care about intent with cannabis? Like, what did it let's free us plant, man? Who cares the why?

Ben Larson 11:29

Yeah, was it was the intent of Prop 215 to have a doctor on the beach in Ventura giving me an ID card over uh over Zoom? Yeah, 100% not. Yeah, for sure. Yeah, yeah. Well, we'll get into a lot more of that in just a bit. I

AI Panic And Market Control

Ben Larson 11:46

do want to kind of take us over to the tech world because I think there's an interesting parallel narrative going on, much bigger. The CEOs of the biggest AI companies this past week have suddenly been raising the red flag about things moving too fast, and that AI is going to kill us all in the next decade, and it's very worrisome. And in some ways, I can kind of see it because things have been just moving so fast it's hard to even keep up. That said, the president is pushing back, saying it's all a hoax, and there is this kind of sudden realization of like, oh yeah, this is a way for them to create fear, collaborate with the government, create a duopoly or triopoly or whatever it is, and control the marketplace. And when I start saying these things, it's like, oh, this feels very similar to the conversations we have between hemp and cannabis. We I thought generally agree that we should be creating more access to the plant and by any means necessary, and this gets to the conversation of hemp cannabis, but who gets to control it? Who gets to say what's safe? And now I'm wondering, I'm like, should people be fearful of AI or or not? And I know you're deeply immersed in this as well, and I don't know if everyone knows that, but you have a deep software background, you're coding an AI every day. What say you? Should we be afraid of AI killing us, or are people just trying to control the system?

SPEAKER_00 13:23

Well, I I take uh I take a position that the mutual exclusive nature of the question is on a false premise to begin with. It's both. Okay. It's both. It can absolutely kill us and correct. It can kill us. It should be concerning. Also, slowing down pace is not tenable. I think people drastically underappreciate the seismic shift of capability that AI brings, the seismic shift of power and control it can usurp. And the reality is whether you recognize it or not, we are in a nuclear arms race right now. And thankfully, no one is intending at this moment publicly to weaponize it, however, because we're not in an AI world that we know of. Um again, not publicly. Uh, but make no mistake that AI is far more dangerous than the nuclear bomb. It's the thing that makes the nuclear bombs more dangerous. Whoever wins wins the AI race, or at least finishes in the top five countries in the AI race are going to control the globe, period. And uh if if anyone thinks that it's shy of that, you're sadly mistaken and probably need to get educated. Um, so we cannot slow down. Imagine if you and five friends all sat around a table and you said, Okay, I'm gonna go make a bunch of weapons and then we're gonna go to battle. Um, and and five of you are friends, but there was like one sketchy dude in there. You're like, I don't know about this one guy. And so everyone's getting their arms ready, and then you say, This is a this is escalating too fast, everyone. We're gonna stop making weapons effective today. Put down your guns, put down your knives, no one make any progress. All it takes is not even one bad actor, it takes one good actor being afraid that there's at least one bad actor. Because if you're a good actor, you're like, Well, I'm the good guy, and I'm real nervous about this guy across the table from me. So I'm gonna secretly keep my weapons program going just in case, because I don't trust them, but I'm a good guy, so it's okay that I'm violating it. Well, you and all five of your friends are thinking the same thing. So everyone's just going to secretly produce your weapons at an alarming rate in preparation for some unknown battle in the future. And the goal to slow down is not gonna be upheld by every party. So what happens is if the US comes out with firm regulations that says, hey, I'm requiring all USAI companies to slow down and not recently need not further research, not release new models, whatever it is. Do you think Iran is gonna stop? Do you think China is gonna stop? Do you think North Korea is gonna stop? Whoever, and I'm not saying these people are necessarily superpowers at the moment, but like it doesn't take a big country with a lot of power. It takes the right amount of chips and the right amount of ingenuity. And for the first time, you can have a country as a small GDP with a small power uh network really explode on the scene and take things over very quickly. So we can't just take a back seat to the global arms race. It's not an option, but it could all kill us. Skynet is coming if we're not careful, and so it's really tricky and complicated. It can't be distilled down to an either-or, in my opinion.

Ben Larson 16:31

I gotta bring this back to cannabis. We're gonna remove the existential threat of elimination of life and focus on the piece of the the international arms race because we are losing that. Um uh because Canada is having fun with Australia and Germany, and we're still fighting over being legal. Uh so anyways, thanks for that little departure. We'll get more back into AI uh towards the end of the show.

Meet Chris Fontes High Spirits

Ben Larson 17:00

Uh, but before we do that, let's uh let's transition away from the news and and welcome our guest. That guy is now our guest, uh, Chris Fonts, is the founder and CEO of High Spirits Beverages, uh, also Trojan horse. Uh, I'll let him talk about that that that difference. And a pioneering leader in hemp and cannabis policy, uh, who brought hemp derived Delta 9 THC to the national market. A technology entrepreneur by background, he previously created the hemp exchange, Project Hemp Flower, and like I said, the Trojan Horse Cannabis, before founding High Spirits. He's a committed activist. Fonce has served in leadership and advisory roles across numerous national trade organizations, including being the president of the U.S. Hemp Authority, a board member of the U.S. Hemp Roundtable, and continues to consult lawmakers, brands while living in the first legal cannabis market in Colorado, which is where I'll be in two days. So, Chris, welcome to the show. Long overdue, as you said. Um, and yeah, it's funny. It's like I I I remember when we were launching this show. I'm like, wow, High Spirit's a great name. And I hate to admit this, but I didn't really know of you or like the relevance of high spirits beverages. And I think I was just doing a LinkedIn blast, you know, inviting people to my new LinkedIn page, like, oh, I need to get more followers, get more followers. And you dropped in my DNs, this was like 2023, and we're like, oh, this is kind of funny, and I misread that. And yeah, that was kind of when our interactions really started. But um I would love for you to set the stage of like take us back to 2023 or maybe 2022, and your first perspective of me and whether it was high spirits or even prior to high spirits, and we can kind of build from there the the journey that we have parallel uh pathed.

First Impressions And LinkedIn Sparring

SPEAKER_00 19:08

Yeah, my uh you have wolves. Uh going way back here, um, I went to a a cannabis uh drinks expo in San Francisco. CDE. Yeah, this was uh 21, I think.

Ben Larson 19:23

Okay. Yeah, the second one.

SPEAKER_00 19:25

Yeah.

Ben Larson 19:26

And I think they did one in 2019, then obviously there was pandemic and then yeah, 2021.

SPEAKER_00 19:32

Yeah, I uh, you know, this this was we we had a drink mix and we were in development of a drink, hence the desire to be there. And uh, you know, got obviously updated with who Virtosa was at the time, didn't know you yet still. And uh a salesperson, which no longer is with Virtosa, by the way, for for uh the public knowledge here, um, was kind of aggressive and like a little condescending about my own ability to understand how THT worked. And it was hyper frustrating. And so my first impression was like, fuck this company. They don't they don't understand what they're talking about because they don't understand what I'm talking about. And it was just an unfortunate, like uh uh bad foot forward from an employee that um is is no longer around. Um, and then later, um, you know, uh to to see posts that you were making. And I don't know if you remember this, but we had some academically contentious interactions on LinkedIn because your original position was quite anti-hemp initially. Uh not anti-hemp, but that's probably an unfair characterization. I was anti-delta 8.

Ben Larson 20:38

I'd yeah I'll admit. Yes. I I I'd re because I remember maybe posting an article and maybe an ex post, something about it.

SPEAKER_00 20:46

Yeah, and and to be fair, I was kind of anti-delta 8 at the time as well. Um, I I you can probably pull up some old podcasts of mine where I'm like, yeah, Delta 8's a problem, it shouldn't exist. So I actually was quite anti-Delta 8 to begin with. In fact, the reason I launched a Delta 9 product in the first place was because I was like, we've broken the seal of getting high from hemp, but we might as well do it right instead of this synthetic created manufactured THC. Why not just use the actual THC the plant makes, which everyone's been using and loving for millennia? Um, so I was I was quite anticipating.

Ben Larson 21:20

So uh pre-Delta VI, does that mean you were anti-intoxicating hemp, so to speak?

SPEAKER_00 21:29

I wasn't anti. Uh I was running hemp exchange at the time.

Ben Larson 21:34

And you just weren't gonna build a business around it.

SPEAKER_00 21:37

Correct. It just wasn't my focus. I was like, someone's gonna figure this out. Like, quite literally, I I mean, uh, there was an Inc. article about this recently. I'll paraphrase that I was on a cruise ship finishing the program for hemp exchange, the actual software marketplace, when Trump signed the 18th Farm Bill into law. And the second I was like, the the news hit, like, this has been signed into law, I'm like, we have Descheduled CHC. Like I knew it immediately. I understood the opportunity immediately. I'm like, I can't wait for someone to figure this out and start shipping edibles.

Ben Larson 22:06

Did you know the language that was going into the farm bill? Or were you that one person on the entire cruise ship that was reading the farm bill?

SPEAKER_00 22:14

I knew the language that was going into it as it affected our business and was already intimately familiar with you know its position passing through the House and Senate and uh kind of where it was at. And so I I knew what it would say should it be signed. And so when I got the news that it was signed, it was it wasn't I was very on top of it, let's say. Interesting. Very on top of it. Okay.

Farm Bill Loophole Delta 8 To Delta 9

Ben Larson 22:35

So uh so that happened back in 2018. That that happened back in 2018. Correct. And then and then we're talking about 2021. So there was a time period of like the emergence of Delta 8, some initial kind of pushback on the concept, but then a realization that no one was clamping down on it, and maybe it was upheld as federally legal at the time.

SPEAKER_00 22:56

It it was, and and look, it's it's a complicated conversation with Delta 8 specifically because you have various opinions of regulatory agencies with the legislation pretty clear. And the reason we have to talk about new language today is to determine whether or not we need to make Delta 8 illegal now or not. Like this concept of it's already illegal. Well, if it's already illegal, we don't need new laws, right? We need new laws to make things illegal because they're currently legal. Now, maybe uh maybe that's that's uh um a wide perception of the word legal because there's uh regulatory issues with FDA still that everyone's aware of, but it's not a controlled substance, very clearly. Federal courts have upheld this. And we also have opinions from regulators that say that it is a controlled substance. And so this complexity and ambiguity really is frustrating and difficult to operate in. It's difficult to hold opinions about, too, because you can't really trust. I mean, as an adult, you should know this anyway, but you can't really trust the government to make the right decision here all the time. They can't be experts in everything all the time. And we've seen in the cannabis space, they clearly are not. They have no idea what they're doing when it comes to cannabis. And this is state to federal level as well.

Ben Larson 24:09

Okay. So you analyze laws, you see this movement of like Delta 8 being upheld, and you're saying, well, if that's true, then why aren't people just using Delta 9?

SPEAKER_00 24:21

Yeah, I I'd actually Delta 8 caught me off guard. I expected someone to come out with a Delta 9 product when Delta 8 launched. It makes sense in hindsight, though, right? Because Delta 8 can be vaped, and the vape market is so you can't make a delta 9 vape because of the percentage, but delta 8 has no such restriction. Oh so the vape market exploding delta 8 makes clear perfect sense in hindsight. But at the time, I was like, why don't why are we wasting our time with this compound? Like it's literally weaker, it's difficult to manufacture, we can just pull right out of the plant. What's happening here? It's because of the vape space. Um, so you know, recognizing this is happening, realizing like, okay, I don't have to be the guy that breaks intoxicating hemp. That's already happened. So let's just give everyone a safer alternative to Delta 8, um, which I contend mostly still is a safer alternative to Delta 8. Um, though Delta 8's come a long way since, you know, I originally was very down on it, and for good reason. It wasn't being made plainly, it was it was being rushed, it was being made by cowboys and bathtubs and just not great quality stuff. So yeah, I saw the opportunity, reached out to a lawyer friend of mine and said, I'm not crazy, right? I can do this. And his knee-jerk reaction was, there's no way you can do this. Wait a minute, but why can't you? Let me do some digging. So he does some digging, the same digging I did comes back and is like, you're absolutely right. This is this is totally, totally permissible. There's literally nothing stopping you from doing this outside of the FDA restriction, which is also preventing CBD, but we see how that's going. So it's no more of a risk factor from compliance standpoint than CBD. On top of that, it was already happening. This is the biggest thing I think people let's like not clicking. We were already selling THC on the regular to consumers through the mail. The difference is stupidly, we were not putting the milligram dose on the bottle because Toronto was afraid of compliance and they were afraid of enforcement, so they didn't want to say how many milligrams were actually in a tincture bottle.

Ben Larson 26:23

I mean, we went through that with CBD, even it was like, oh, do we call it do we say CBD? Just call it hemp extract. It's like, what's 10 milligrams of hemp extract?

SPEAKER_00 26:31

Yeah, exactly. And so this, you know, full spectrum, it was often labeled as full spectrum, and then they'd say 100 milligrams of CBD per serving, and then trace them trace amount of delta nine below 0.3 delta 9. Well, look, man, in a full spectrum teacher bottle, you can be getting uh, you know, 60 megs in like a in a small bottle easily. And this was actually, you know, when we first launched a delta nine product um under the brand Trojan Horse, which was intentionally named Trojan Horse Cannabis THC. Also, it is a Trojan horse into cannabis normalization, which we're now seeing come through to fruition. It was aggressively branded intentionally, also to make consumers aware, like, hey, this has a ton of C BD, but there's something hidden in here, and we didn't hide it, we labeled it, but like please read the label, there's something in here.

SPEAKER_02 27:14

Yeah.

SPEAKER_00 27:16

Um, but uh the full spectrum CBD was being sold regularly, and so I'd call the store. By the way, I made every retailer sign an NDA before I pitched them a product. Anyone in Thale uh commiserate with me on the difficulty of this channel. It's a nice little barrier. Yeah, good lord. Uh it was tough times. But I'd I'd make them sign an NDA and then I pitch them the product, and they'd be like, Well, we can't sell that in our state. I'm like, no, you can't. No, no, no, I promise we can't. That's illegal. You don't know what you're talking about. I'm like, you already are. No, we're not. I would say.

Ben Larson 27:45

What's the first state that you focused on? Like, where were these conversations we had? Because like Colorado doesn't seem like the right place.

SPEAKER_00 27:50

Carolina's. North Carolina's. South Carolina was the first. Our very first retail partner was Trek CBD, which still exists uh North Carolina. I'm still uh casual friends with Nick Pion over there. Um, great guy, great retailers. Our first distributor actually was out of Nebraska, so we pretty quickly moved into the Nebraska market um and the Utah market. Um, we did a lot of business in Utah in the early days.

Ben Larson 28:16

Um okay, so going from there to like the Trojan horse name, like that's something that resonates a lot with me. I wasn't as bold as calling my company Trojan Horse. Uh, but we did believe that Lodos beverage was going to be the tip of the spear that kind of normalized. And so, like, that's where our stories start to converge. You were still on him, I was still very much on cannabis. You were kind of launching the first Delta 9 product. I think what slapped me upside the side of the head was when Minnesota legalized, and it was just like to your point, like whether it's intent or not, like now we have other regulators and legislators reacting to this. And you know, some of our brands in California are like, well, screw California, this is just not working out. We're gonna go play in Minnesota. You're either coming or we're gonna go use someone else. Um sorry if you're watching. Um, but yeah, it was at that moment I'm like, whoa, well, like we believe in creating access and safety of the cannabinoids and making sure that people are at least consuming good products. And so that's like that was our crash course in in 2023. What was that journey like between when you launched Trojan Horse and when Minnesota legalized? Like that seems like a fairly quick period of time and must have been kind of crazy, just like navigating these conversations, going from signing NDAs with shops to all of a sudden we have a legal marketplace.

SPEAKER_00 29:46

Very wild experience. I mean, uh, quite literally, we were in the business of calling every state agriculture and health department and saying, How do you handle this right now? This is happening in your state, whether you recognize it or not. What are your regulations? Nothing seems to address this issue. How are you handling it as a regulatory body? And it was a lot of education. It was a lot of sitting on the phone with a commissioner of the agriculture department saying, You know, hemp is being grown. Yeah, yeah, we issued hemp licenses, we're growing hemp. Great. Do you know what they're doing with it? Do you know it's going into full spectrum products? Do you know full spectrum products?

Ben Larson 30:21

Is this what got you into policy? Or was it running the hemp exchange that got you into policy?

SPEAKER_00 30:26

Well, hemp exchange first. Uh same story with hemp exchange. We called all these people and said, uh, how do you handle the import and export of crude? And they're like, what is the what is crude? Like, okay, well, let's start from there and then let's teach you about distillate, let's teach you about isolate.

Ben Larson 30:41

One needs to be having these conversations right now with with all these bills starting to circulate again.

SPEAKER_00 30:45

Yeah, it was it was painful initially because I literally blocked and tackled almost every state in the education of the supply chain during hemp exchange time and then during Trojan Horse was the same conversation, but like, okay, I already taught you what the supply chain looks like. Now let's talk about the distribution chain, what the products look like. In fact, uh, because of my attempt to educate departments, uh, we got kicked out of Utah. Um the Department of Ag Commissioner at the time rotated out, and a new individual came in who was much more law enforcement focused and much more conservative, picked my brain, tried to help this person out, understand the space, and he used the information I gave him to craft an extremely precise, narrow emergency regulation change that put me out of business overnight in a 72-hour period. So I had to literally pack family in my office and leave the state and move to Colorado and function my business out of a friend's basement. And so we got an office space and sold our house. Like we quite literally were refugees from Utah to Colorado. Then about a year at Colorado, uh, we faced the attack on the home front in Colorado with companies trying to ban hemp products here in the state, which is hilarious now that these same people are talking about uh, you know, they're like, we're pro-hemp. They've been saying they're pro-hemp the whole time despite shutting it down in Colorado. Now they're cheering on the U.S. cannabis roundtable efforts to shut down hemp as well. And they are a hemp company that sells hemp products, and it just the hypocrisy is is infuriating. Uh so moving the church and horse to Minnesota specifically, tumultuous time, chaos, a lot of education, a lot of people you still talk to, and they're like not understanding the Delta 9 concept still. Um, and uh, you know, we had been really, really focused on label adoption and good solid labeling, participate with ASTM. I believe we're the first company to put the ASTM intoxicating cannabinoid logo on our on our labels and uh adopt the label standard they created before it was even voted in, just because there was nothing. We had nothing. And so I'd rather take a draft ASTM label uh than a nothing label and just hope for the best. At this time, people were still consulting with just generic FDA, not I don't mean that negatively, but normal non-cannabis FDA experts on like, oh, this has to be a dietary supplement, and here's how you have to label it. And no one knew like 50-50 if the hemp was a dietary supplement or a food. And it just depended on what your consultant told you. And so I was very happy to jump on with ASTM, make you know, start adopting standards, start pushing good thought processes out in the space on how to do this safely, cleanly, and appropriately, and pushing for regulation legislation really hard.

Why THC Drinks Win New Users

SPEAKER_00 33:20

Um, and while selling edibles, we had a lot of early traction, but it also occurred to me that edibles are kind of a big lift for some people. Like smoking is a huge lift. If you're not a can smoker and you don't smoke or vape anything yet, and someone says, You should try we, here's a bomb. No one no one's created a bomb that isn't currently smoking.

Ben Larson 33:45

Edibles that on on the regulated side, right? It was like when we first started after we launched our company in 2018, we were attending parties and setting up infusion bars, and we had people in their 60s and 70s trying cannabis for the very first time because they could sip it. And and then and then loving it and calling the party host the next day and being like, What was that? That was amazing. And it's like you've had access to it your entire life. Yes, it just happened to be in a liquid form, so they were trying it.

SPEAKER_00 34:18

It look, inhaling a substance is a big turnoff for a lot of humans, they just aren't into it and they are like, I don't want to ever put anything in my lungs other than the air I breathe. And I don't think that's an unreasonable stance for people to take. So offering another alternative is hyper-important for cannabis normalization, and edibles was the first step in that, you know, habitually across the board. Drinks took it to the next level. There were drinks before mine in the adult use of marijuana space and the medicinal market as well. And there were Delta 8 drinks on the scene, but there weren't any Delta 9 drinks, and Delta 8 drinks were, you know, 500 milligrams and synthetic or converted at least. And it wasn't exactly like uh calming to a new consumer. And so uh I was reading this book called The Power of Habit. And in short, it was talking about how it's easier to replace a component of a habit than obliterate the habit altogether. And so it clicked like put THC in a can, it normalizes it. It's a habit people already have. And so uh we launched our first drink, um, uh first hemp drive delta nine drink available in the free market, not in a marijuana system. We created that category, and we came out publicly on a cannabis talk 101 podcast, which is still floating around out there. And then our first product launch was at to date, I still think the only Hemp Drive Delta 9 Expo. It was hosted by the CBD Expo Tour, which is now defunct, but was prominent at the in the early uh 2020s, if you will, and uh and even in the late teens. And uh we sponsored it called it the Delta Nine Expo, and uh we launched our drinks there, and it was nuts. We went through so many drinks, and people were just their minds were blown, and we knew right away it was gonna explode. And it was all just based around literally how do we make THC accessible to people who are interested, but they're not a stoner and they have no interest in smoking. And edibles, I was gonna say this earlier. Edibles have a reputation for being a ticket to ride that you can't get off of and you don't really know how intense it's gonna be. And we've made a mistake. Look, I'm not picking on the industry, but it's not uncommon to go into a dispensary and hear a butt tender say, oh, this 10 milligram edible, it's like a microdose. Take two or three of them and see how it goes to a brand new consumer. And it's the bias of being a stoner or a high frequency, high-tolerance consumer, is a more PC way to say that. And I mean, I call myself a stoner, so it's not derogatory, but you have to realize that the tolerance spectrum in cannabis is unlike alcohol. It's such a different thing, it's so much wider that you can be the type of person that takes a thousand milligrams a day and just rattle on down the road and it barely affects you. That doesn't mean that other people can take 30 milligrams their first time and have a good experience. In fact, we're seeing through drinks, some people, their jam is one milligram, like legitimately, right?

Ben Larson 37:08

Yeah. So you have this broad foundation of hemp, you get into the edible space, you realize the opportunity with beverage, and then it really does start taking off. And in the last few years from both of our vantage points, has just been something incredible. It's like something that we had dreamed of for cannabis broadly, but we knew it could happen in beverage, and it has, and like the the exposure it's created, the alliances it's created, like it's all come true. But it's interesting for people on the outside, they still like question the validity of the category in space. And you've seen it, like we get called hemp or bev bros all the time, hemp bros, bev bros, it's like a subsect of hempros. And what do you wish people would understand on the outside about what has happened over the last three years with low-dose hemp beverages and how someone like you who does sit as president of US Hemp Authority, who has participated in all these different regulatory groups, like why does beverage get a special lens?

Dispensaries Access And Gas Station Weed

SPEAKER_00 38:24

I have a lot of opinions about this. Uh I'll try to keep it concise per your earlier recommendation. Uh look, um, what I think depending on who I'm talking to, what I wish they would understand are different things. I think the majority of it all falls into at least one camp. Uh I wish people would understand that Delta IX is normal T. That it is descheduled from Hemp. This is not an opinion, this is legislative fact. Um, otherwise, Anheuser Busch could not move it on their truck. They're not moving a Schedule 1 drug on their trucks, it's just not happening. And that the truth is THC beverages through the hemp channel, specifically Delta 9, has done more to normalize cannabis than any other effort to date in our country. Now, that's not in a silo, that's not stealing credit from the shoulders of giants that hemp beverages stand on. It's not to discredit that worker to say that it didn't wasn't enough. Hemp beverages probably could not have been successful without some of that early foundational work. So it's not an either or, it's a bull. But that we reached a tip em a tipping point with access. When one highlights the fact that dispensaries are a failing um or may not failing, dispensaries are not the right model or the best model for widespread market adoption. People still don't like going to dispensaries. I know people that would call themselves a stoner and will not go to a dispensary. This is not uncommon. The dispensary system is onerous, it's egregious, it's frustrating, it's difficult. You feel sketchy walking in and out. The operators don't like what they have to do in order to operate. They always complain about overregulation and 24-hour surveillance cameras and just the chaos that the mayor won't industry has to deal with. What happens when you make access difficult? Well, we're lazy. I'm lazy, right? I will buy something if I can stop on the way home and fill up my gas tank and pick something up. I might not stop if I know it's 30 minutes out of my way. It's one person at a time or two people at a time. So I might be there for a half hour waiting for my turn to go in. And then I'm gonna have to I have to talk to someone. I can't just casually look around in a lot of these places and they're gonna hound me about what is it you need. I got other customers, let's figure it out. That's a difficult experience. And you have to like, okay, I gotta really actually go and be intentful about this. The casual purchase, the spontaneous purchase is like 99% of purchasing for Americans. So not making it easily accessible is doing the entire plant to disservice. It needs to be readily accessible everywhere. I mean, this goes into the gas station week concept. We have gas station beer, we have gas station ibuprofen, we have gas station chips. These aren't special chips for the gas station. They're regular chips sold in a gas station. The beer is not special, shitty beer. It's just beer sold in a gas station. There's no reason weed should not be sold in a gas station. And if you think it shouldn't, then you somehow think it's scarier than alcohol. And like you can't hold both. It shouldn't be sold in a gas station, but it's also super friendly and way less scary than alcohol. Well, what are we talking about here? It's buying. I wish people would understand that beverages normalize cannabis to a demographic of people that would not have ever been won over by the dispensary system. And for that alone, it should hold a special place in every cannabis activist's heart in instead of being a point of contention.

Ben Larson 41:49

Yeah. I think a lot of the progress that we've made over the last couple of years is that on both sides, there are groups of people that are starting to realize that there is a special opportunity here. And what I always kind of understood with the beverage category was that we were designing it to be a beverage alternative so that it had to show up where other beverages were sold. If you were selling it as a cannabis alternative, like it wasn't going to win out in a dispensary because people that were going into dispensaries, to your point, were there to get large quantities of THC. And so it's like thinking of it as that opportunity to give an adult an alternative and then open their mind and their world to understanding how they dose, what they're comfortable with, and then maybe start to explore from there. And we are starting to see that. I've talked to operators in Florida that said, you know, we get a lot of consumers coming into our dispensaries because they tried to have beverages that are available.

SPEAKER_00 42:49

Yeah, look, uh, the tolerance acquisition is a real thing in our space. Um, if someone becomes, look, like just economically speaking, from a business standpoint, your most of your revenue is going to come from regular customers, like high frequency use customers, right? You have one customer that's a high frequency, high tolerance user, they account for like 50 infrequent low tolerance consumers as far as percentage of revenue. They buy more frequently, they spend more money on it. Those people didn't start out as high frequency, high tolerance consumers. Everyone started out with their first hit or their first drink or their first edible, and over consuming multiple times developed a tolerance. This is this happens rapidly in our space with high frequency. So anyone that starts out as a casual drug consumer has a not small probability of turning into a high frequency, high tolerance consumers, which in dual markets where you have hemp and marijuana legalization, it's a feeder program for the dispensary system. Right? It makes people more comfortable. It makes them go, well, now I do want more. Where can I get more? Like here in Colorado, we can sell hemp drive THC beverages, but they're 1.7% Five milligrams. We tried to get it raised to five. It was originally wide open. The marijuana industry and some interesting hemp folks in our state banned it and locked it down to 1.75 with a ratio as well, 25 to 1 ratio required. Or sorry, 15 to 1 ratio required. So we have a very low amount here. What happens when you were drinking a six-pack of 1.75s a night and it's not enough? Well, you're probably going to go to the dispensary system and find an edible option or some other option, or even a stronger drink, a 50 or 100 mil pack drink in the dispensary channel. On the whole, with multiple subdivisions of types of consumers. Your dabber is not your 1.75 milligram drinker. They're completely different demographics. I didn't mean to imply. Yeah.

Ben Larson 44:52

So one of the early tensions in our relationship was naturally kind of where our foundations lie. I

Caps Ratios And Survival Strategy

Ben Larson 45:01

think hemp was free and open. The 2018 Farm Bill blew it open. And my lens was coming from Prop 64 world in California, where we went from Prop 215 down to even more constrictive, more tax, you know, like more control. And it was not everything that we thought it would be. And with the same thesis of like, okay, beverages is how we break out. Uh you know, I think I was anchored in like what's acceptable, you know, from the marijuana lens to getting out into the mainstream shelves. And so that was like low-dose beverages, just minimal form factor caps, which I know you uh we used to kind of you know spar on this. You were Mr. No Cap guy, uh, and I was like, you live in a fantasy world, man. Like, and you're like, well, you know, it started from here, and then it was this progressive kind of like, oh well, we might have to give this up. We might have to give this up. And fast forward, I'm not gonna say I was right, I was right. Uh, but like here we are today. We just passed the CR with a bit of hemp language in it, and we're trying to get something done this year. How has your thinking evolved? What do you need people on the hemp side to hear? And if you want to say something on the cannabis side, you can too. Or sorry, the marijuana side. Clean distinction, all cannabis. Um but yeah, like you've been fighting this fight since day one, and you still see a lot of loud voices being like, we need this. Like, we even have some alcohol folks coming and be like, we need 10 milligrams. Like, man, like that's not gonna happen. Um yeah, so what is it?

SPEAKER_00 46:54

Yeah, so uh I will say that my own ideal, not ideology tactics have also evolved, right? As they should. Um, anyone that has the same tactics from eight years ago, you're running up failing playbook because it didn't work then, you know. You should things have changed. You need to be aware of that. I wasn't a no caps guy from I don't think we should permanently end up in a state with no caps. While that's a utopia, it's not uh it's not practical. And I never thought it was practical. My original intent to not talk about caps was more about the speed of education. What do we need to educate them on? What's our highest risk? Our highest risk is kids getting access to this. Why don't we all just push all THC meets 21 plus? End of story. If we had simply got that past, who's gonna argue against it? No one. It's a good policy in general to keep kids away from THC. What would that have done for our industry if six years ago we simply just said 21 plus only? All of the you're selling shit to kids, blah, blah, blah. All that's gone. The whole argument is sucked out, the wind would be just sucked out of their lungs. And so we'd be talking about it.

Ben Larson 48:01

I mean, I think they would have quickly countered with direct to consumer.

SPEAKER_00 48:04

Direct to consumer, we have direct talents in the line, and that could be sold with proper checks and balances. And there's no reason that we couldn't have made legislation around that too. We couldn't even could have even banned direct to consumer. I would have been like maybe not pro that stance, but the whole goal was to take away the argument, the most dangerous arguments they have against their space, which is you're selling it to kids. And I was more about let's just focus on this one thing that everyone agrees on. Milligram caps are the tail end of the conversation. This is where you're going to get the most contention from the entire industry, from regulators, from prohibitionists, from medical trade association. Why start there? Let's start with the things that we can all agree on. Let's inch our way into the more complicated chats instead of going right to it. I still stand by that would have been the best option. That's not our option anymore. This option, we lost the option when McConnell slipped in his appropriations language. As soon as that happened, the conversation wasn't how do we properly educate people? And it turned into what do we need to do in order to not go extinct? It's a very different climate. We don't have the luxury of time anymore to slow educate people and get little wins and have a strategy of building on successes. It became an extinction event that needed immediate uh response in in like terms. And so it became quickly, well, what can we pass? Not what's ideologically perfect, but what's practical in the time we have. And I still think it's possible we might end up with 10 megs on beverage because there's some appetite for it, but I think it's more likely we'll end up at five. And I think that's fine. I think at this point, if we can secure five, this is an industry that succeeds. This is an industry that wins. This is an industry with growth potential. If we end up with three milligrams on the edible side with a required uh ratio in order to meet the CMS requirements, that's an industry win. That's something we can all operate in. Um I think it's time to recognize both on the marijuana side and on the hemp side, of the reality of where we're at. And where we're at is dangerous for everyone in our space. Um it's time to be pragmatic about what we can get across the board and stop fighting for things that are absolutely ludicrous. I'm not fighting, I'm not gonna die on a 10 milligram hill. Would it be great? Sure. If someone says, well, you can have five or nothing. Five. You can have three or nothing, I'll take the three, two or nothing, I'll take the two, right?

Ben Larson 50:34

This is just real Well, I mean, to that point, even with the current language, it's like, yes, point four is very restrictive, but it will be a legal threshold for THC. And that's really interesting. That is paradigm breaking when you're thinking about the structure of legislation and and how that might evolve in the future. Not a scenario I want to live through, but you know, it it and of itself is is interesting to think about.

SPEAKER_00 51:04

It is. It's tricky though, because people are using the language about the 0.4 to say it's it's a little, but it's still a market. But the reality is pragmatically, it's not a market.

Ben Larson 51:13

No, I'm not saying it's a market. I'm just saying structurally gives you a number to negotiate over in the future.

SPEAKER_00 51:18

It does. Um, the problem with the legislation as it stands, if it's not altered, is work in progress is explicitly also held to 0.3% total THD, which is for literally impossible. You can't extract. Um there's uh the the Spock of cannabis, Darwin, for anyone that knows him, uh, pointed out that it is technically possible, but essentially you have to add a ton of volume, then extract, then add a ton of volume, then distill, then add a ton of volume. And it becomes this laborious process that is so incredibly ridiculous that it doesn't make economic, it's not economically viable by any stretch of the imagination. So I have to I have to stop saying it's it's 100% impossible. It's pragmatically impossible. Um yeah, the the the language as it stands right now is an extinction event. Uh anyone pretending that oh, I can still sell CBD isolate. No, you can't, because you can't isolate it. Um, it's it's impossible pragmatically. Um we need to recognize that. Take whatever milligram we can get, be happy about it. And look, there's plenty of trade associations out there right now that and everyone's at each other's throats. And frankly, it's one of the reasons I have been a little bit less active in the last six months. Um, I've been active, but less publicly, though. I'm trying to coordinate less with other people because they just got burned out of it. Like the silly high school clickishness of these trade associations fighting each other over small things is like so infuriating. We're talking about the freedom of a plant that should have never been illegal in the first place, and we're gonna argue over small things and hyper religious ideology, and it's it's it's infuriating. The own goals is is ludicrous.

Ben Larson 53:04

Um, yeah. And and and one of them being like, you you identified a few things that we could have very much just eliminated and created a a more controlled, safer environment. But what happened is the removal of all quote unquote uh synthetic uh ingredients, and on the surface that is applied to you know what people imagine as as chemically converted uh intoxicating compounds. But there are many processes by which you can create a clean cannabinoid, and many of those are being used in the regulated channels right now. That's right. And so it's like the most popular products that are being sold in dispensaries may become unavailable because of how this hemp legislation is being written. And again, just the cognitive dissonance that exists in this conversation is is insane.

SPEAKER_00 54:01

People don't realize that somewhere between 30 and 40 percent of the THC sold in dispensaries is actually hemp-derived converted deltanine right now. It is a way larger percentage than people realize.

Ben Larson 54:14

Where does that come from?

SPEAKER_00 54:15

Let me the that I have not heard that before. Like, where where does that come from? Processors that are selling it to them, like talking to the people selling the products to MSOs, saying, Yes, I know you're doing it because you're my client.

Ben Larson 54:28

I we it's funny because I I I hear both ways, right? There's a lot of California growers and extractors that say, Oh, like Texas has been great for business. And so now you're just describing it basically a singular market where everything's flowing kind of back and forth.

SPEAKER_00 54:44

This is the truth that people will not agree to that are ide ideologues on either side. It is already the same market. A lot of MSOs are properly in hemp, and if they're not, they're likely selling through the hemp channel uh quietly, and they're definitely inverting from the hemp channel to offset their own distillate costs. Um, when you have a marijuana market where a distillate is $9,000 a liter, but you can pick it up for $1,500 and it's the same compound. In fact, arguably, I can get into the science of why I actually think uh type three fractionated distillate is actually a better quality product than type one distillate. But um, regardless, it's uh it's it's 10 times cheaper. And we all know marijuana industry is struggling to keep their books above water because of the insane 2AE and everything else they have to deal with, which I'm sympathetic for. I'm not I'm not happy about it. Um but they resulted to inverting and diverting to just stay afloat. And I don't blame them for it, but let's not pretend that you're not we're not all the same market now. And we definitely are. And to your point, the big win of haha, we got you guys, hemp's all illegal again. Yay! Oh no, where do we get our CBC and CBN from? Oh no, where do we get our C BD from? You're really gonna grow CBD indoors, like you're gonna grow through type three under LEDs? Like, are you kidding me? Absolutely not. Like, you're gonna you're gonna pay the fees necessary to grow a hundred acres of C BD product outside. No, you're not. Like this short-sightedness of misunderstanding the supply chain of cannabis baffles me.

SPEAKER_02 56:25

Yeah, yeah.

Burnout Factions And 2027 Planning

Ben Larson 56:27

So you mentioned kind of pulling back a little bit, being burnt out, like running a business, doing policy work, being a keyboard warrior, so to speak. It is it's a lot uh to be in this business right now as an operator. And I mean, I I'll say it right now, like high spirits is kind of like a family business. Like you're you're all in. How do you balance that? How do you balance about focusing on what's best for the business? And I'll put air quotes around that, because I have this conversation with my board and everything, versus the time and energy and money invested in doing the policy work and all that. Like, how do you balance that?

SPEAKER_00 57:11

It's a daily conversation with myself. Um, and I try to remain unemotional about it, but the emotions definitely sway the needle on what I focus on from time to time. I don't know how to say this without sounding arrogant or without hubris, but the amount of times I have jumped into a conversation and heard the supposed experts arguing about something where I'm like, you're both wrong. You're missing the key point, which is one, two, and three. And everyone goes, Oh, I didn't even think about that. You're totally right. And I'm like, this is why I can't, this is why I can't leave. Because apparently we don't have that many intelligent people at the table having conversations at an academic level about this stuff. Or if we do, they're not in the right rooms to affect the actual change. And so I have this consistent pull that has been backed up anecdotally literally a hundred times or more, that if I step away, there's real ramifications for me not being in a room and having a say or getting my voice in if I drop off of LinkedIn, things get gross. And I'm not the only person doing this, and it's not just me, but I am one of people that one of many people that have this ability to see things as they are and speak reason into these conversations. But there's not that many of them. We're we're few and far between. There's a lot of ideological conversations and people that are getting paid to be an attorney in the space or a lobbyist that aren't actually cannabis people and don't actually understand cannabis. Like I'm not gonna throw any names out, but a particular individual that gets paid a whole lot more than anyone I know in our space will blatantly say, Well, I'm not really a cannabis person, so I don't have an opinion here. Well, you took a lot of money to be a lobbyist for our space. You probably should have an opinion, and it's infuriating. So I I feel compelled to get involved and stay current and push the narrative because I don't feel like it's happening it this at the way I want it to happen otherwise. At the same time, it's not a one-man show. I'm not the only person that can do this, and I have to recognize sometimes it's okay for me to focus on my business alone. And so this year I tried really hard to get the different trade associations aligned, and January seemed indicative of a possibility of getting true alignment between the association and the different factions, and very, very frustratingly, one individual was subversive to my attempt to get alignment in an interesting way and threw the whole thing out of alignment, and that really took me over the edge. Like, I'm I'm fucking done. Sorry, I don't know what language is okay on the podcast here. Um I was just fucking done. Like, I was like, I'm gonna probably jump off a bridge. Like, I was I was getting depressed, like legitimately depressed. Uh anxiety was through the roof, wasn't sleeping at night, and I was like, I can't, I can't continue to push this hard. Um, plus, like, I need to do my own business planning strategy. So, for the listeners that don't know, um, my business is bootstrapped. We don't have big investors. Um, I put my house and my credit lines on the line. My wife is a full-time co-founder, founded this from the hemp exchange days all the way through. Um, Ben knows my wife and has met her. Uh, our our cousin Carly is our other co-founder who's been with us since hemp exchange. Um, and uh we're a family business. And I had the realization that if hemp goes away, my wife and I both lose our income at the exact same day. We can't, we got to do something about this. I've got kids, I've got I'm in my 40s, like I can't just not have an income. And especially since we put everything on the line for our company, which means any reserve we may have had is gone because it's invested into the space. And uh, so I I turned my focus back on the company for a good amount of time. It's not that I'm not involved in those things, but I wasn't trying to be the driving factor anymore because I got tired of trying to convince people of anything. That there's some people are just so set in their ways that you gotta cut your losses. And I just got burned out of like with all due respect, Ben, you were you were one of those people that like we went at it and we went at it and we went at it, but you were academic, you were calm, you were willing to have a conversation, and we were going tit for tat. We weren't yelling at each other, we weren't being like, Well, you're a piece of shit because blah, blah, blah. Like, that never entered our conversation. Plenty of those people, that's right where it goes to. You could see a recent argument I'm having on LinkedIn right now, uh, over the fact that quote unquote, no THC's ever been descheduled. That's a lie. Like having to educate these people and go through the pains of dealing with idiocy is so taxing that I just burned out from it. And so I just kind of said, fine, let's see what happens when you know I'm completely out of the picture. And like, we we have we are back to a completely fractured state. We we almost learned we're back to totally fractured. The bev bros, if you will, are a real problem. Not all the bev bros are bev bros, though. Um, the marijuana industry is a real problem, but not all the marijuana industry is a problem. The uh vape sales in hemp are a problem, but not everyone in that space is a problem. And so, like, I don't believe that there's one monolith right or wrong group. I think everyone's an individual, um, and their individual positions matter, um, but they're at each other's throats. They've created these camps that they're at each other's throats. There's like seven factions, probably. Like I won't count them, but like probably five to seven different factions amongst cannabis proper. And they all think that they're ideologically correct and just very, very unwilling to compromise with the other side. It's it's I think it's greed-driven, which is hyper frustrating to me. To your point, I have sacrificed my own revenue thousands of times since 2018 in order to better serve the industry. I taught people how to be a competitor. I gave them my contacts. I figured out how to get this oil fractionated and use natural D9. Here's the number of the guy that I taught how to do it. I told him to sell to you as well. Right? Like I've sacrificed my own revenue so many times. I could have sold Delta 8, I could have sold uh Delta 9. There's lots of things I could have done that I intentionally didn't do because I wanted to, I wanted the industry to succeed. So to still eight years in have people arguing that the industry shouldn't even exist is just absolutely exhausting. Absolutely exhausting.

Ben Larson 1:03:53

Yeah. Did to your point, the the biggest problem that we face is the factions, the the the infighting. And we talk about this from the cannabis side, we talk about this from the hemp side. It is true for the entire plant. Like it's all THC when you get up to the levels of Congress and the FDA and the TTB, and the one saving grace, and this is why the Bebros are going to catch so much heat, is that you have much louder voices now having conversations in the back rooms that want to see this category exist. And so you might blame the category, but at the end of the day, it's because the category spoke to an existing marketplace that has a lot more gravity than us. Okay, well, we're we're gonna have to land this ship at some point or land this plane. Uh whatever.

SPEAKER_00 1:04:44

No, I'll just keep going the rest of the day. We'll talk about four hours. We'll be industry's problems.

Ben Larson 1:04:48

Yeah, yeah. Um beyond December, what are you planning for? What are you anticipating happening? Uh I'll leave hope out of it. Hope's not a strategy. Like, how are you preparing yourself for 2027?

SPEAKER_00 1:05:03

Look, I fully expect us to not be extinct December 11th. I am, and I've gone through I've gone through all positions here in the last eight months on how I feel about this. I've been previously, the last three months leading up to recent changes or recent Senate and House victory, where it's completely down and like almost certain we were gonna not pull it off, at least not right away. My initial thought was we'll go illegal, we'll have extinction, and Q1, Q2, Q3 of next year, it'll come back with different champions, different dollars, different actors, but same industry. I don't think that's the case anymore. I don't understand anyone that thinks that there isn't appetite for getting this done. If there wasn't an appetite, we wouldn't have got a four week extension. Flat out. No reason to extend something four weeks if you don't plan on saving it further. There's no it's painful, it's contentious. Why go through the hoops if it's all gonna die? What we get, I have an opinion on. I don't know where it's going to land. To your point, I'm leaving hope out of it. I think at minimum we'll end up with a three milligram serving limit on edibles with some ratio. And I think we'll end up, worst case scenario, the same exact ratios in caps on beverages. I think beverages will probably walk away with no ratio in a five milligram cap per serving. I suspect we'll end up with large format, probably five milligrams per serving, probably one and a ounce, one and a half ounces serving restriction to stop saying, like, oh yeah, every milliliter is a every 0.2 milliliters is a serving. So, you know, whatever, whatever crazy. We're we're pretty good at packing THC into things if you give us wiggle room, right? So that'll probably be gone, which is fine. And what I'm looking at, which I'm not sure everyone is fully up to speed on, what happens to our supply chain Q1 of next year? Right? For those that don't know, in our country, uh October is the big harvest date and for outdoor cannabis and uh mostly. And all of that requires that those crops were planted usually in April or May. And uh with the extinction event facing, we've had record lows in hemp planting, which means we're gonna have record lows in yields this October, which is coming up now, which means until October of next year, our entire supply chain is hyper-choked out restricted at the farm. And if we get legislation that also requires American ground hemp, that's a double whammy because now we can't import in order to band-aid the lack of the crop for a season. Which I'm not opposed to requiring American-grown hemp because that's how we take care of our farmers. Literally, the entire architecture from 2014 on was to stop relying on external hemp supply. If we don't force it, we're likely to not ever fix the problem. However, we need a grace period, otherwise, we're gonna have major supply chain crunch, Q1, Q2, Q3 of all of next year. And it's gonna be the haves and the haves nots. If you locked up your supply chain ahead of time, you can survive and make a business because you can actually make product. If you can't get your hands on THC, what are you gonna do?

Ben Larson 1:08:14

I know I said I was gonna try to land this plane, but we already broke the seal, so what the hell? Yeah. Um, in one of the threads that you're engaged with on LinkedIn, there's this narrative. There's this company called Kismira, um, and they deal in CBD and they seem to completely dismiss that there is non-US hemp coming into the space. And I thought it was a given. I I thought people like Chin Chinese CBD or whatever it is, like I thought it was just a known thing. And what is this faction that exists in hemp where you have MMJ International and you have or I guess that's cannabis? Uh, it's like pseudo-medical pharma trying to like insert themselves in the current narrative right now, where they were very quiet for a number of years. And I'm just curious is your perspective on on these kind of few people that are bubbling up into all the conversations now.

SPEAKER_00 1:09:12

Well, that company in particular has not been quiet. In fact, they were part of the tip of the spear to ban hemp in Colorado. Oh, oh, interesting. They as a hemp company, as a hemp company, yeah. They they are a hemp company who wanted no THC traceable whatsoever in any products sold in the state and were part of the initial group to push so part of the initial lobbying effort. Uh, they later founded or were part of the founding group of One Hemp, uh, which One Hemp has taken interesting positions over the time over the years. None of them are super pro-hemp. They're they're they've they landed on a spot, I think, where full spectrum is acceptable, but that's the only option with hypertight limitations. Um, Kashmir is incredibly infuriating. This is the same group that is accusing me online of misunderstanding the descheduling of any amount of THD and saying that that's a lie, which is like, how are you in the hemp space for eight years and a co-founder in the space, and you still think that the THD firm hemp is not bescheduled? Like this is hemp 101 for eight years now. Uh but regarding the Chinese imports, look, I think that there's again, the truth is in the middle between the ideologies. A lot of people are saying it's all Chinese CBD and that's blah, blah, blah. There's people that are saying there's zero Chinese imports right now. That was yesteryear's problem. And the truth is in the middle. I think my my read, and I don't know, right? This is my opinion. My read is that there's two or three groups prominently importing CBD from China and making conversions, therefore adding to the confusion of it's all conversions are all coming from Chinese TV. But there's still tons of CBD in our country, right? We I mean, we're still we still have oversupply from 2019. Um, right, like it's sitting in in biomass baled in in crude buckets uh and barrels.

Ben Larson 1:11:12

And and that is that is the hopeful buffer for Q1 and Q2, is that there are these stockpiles of the hope is that there is enough laying around still.

SPEAKER_00 1:11:21

But I uh I mean, you tell me, man. Like, I don't know if we still have some of that enough of that supply to last 12 and not just let's say eight months of of hemp industry action, eight months of hey, it's illegal, Pepsi's joining the chat, right? Like we need the ramp up that 2019 created that we didn't use the 2019 ramp up was in expectation of the big pluggers coming into the space. That one year of oversupply we're still eating off of. That shows you the amount of product we actually need when this goes legal. And we're nowhere near I don't think we have that supply layer end.

Ben Larson 1:12:01

Yeah, yeah. All right, I think we're gonna call it because we have gone well over time. I could obviously keep going. Maybe we'll we'll change this more to an acquired style podcast at some point and do four-hour podcasts. But until then, I'm looking forward to seeing you in Colorado in a couple days here. Uh anyone out there, if you're going to ignite it, get in touch. Let's meet up. It's gonna be a quick one, uh, but we'll try to squeeze it all in. Chris, it's time for our last call. What's your final message for our listeners? Any advice, a call to action, closing thoughts, cannabis or otherwise. Uh

AI Warning And Closing CTAs

Ben Larson 1:12:40

Mike is yours.

SPEAKER_00 1:12:42

Look, I think uh I hate to I hate to bring up like an AI thing when it's mostly a hem podcast, but the reality is if you're not on top of AI and how fast it's moving, then uh you won't have a business in 24 months. So AI is not a new tool. AI is a complete revolution of our entire digital society as we know it today. Get on top of it. It should be part of your business strategy. You should be leveraging it in smart intentional ways. If you don't know how to do that, talk to someone that's deep in it and understand what's capable. It's this is this is more transformative than the internet itself was by a hundredfold easily. And so if if you're saying, well, I'm not really gonna mess with AI right now, that's like saying I'm not gonna really make a website. Like, yeah, I'm not gonna have an email. Okay, buddy, good luck operating your business. Um, AI is gonna be the same way. So pay attention to that. Um, I'm working on a program called Hemp Century right now to help hemp operators understand with AI where their products are legal and how they can move into states and their label compliance. Um meanwhile, high spirits is still pumping, so go to drinkhighspirits.com and buy some product and support small business and a family-owned business, please. That'd be great.

Ben Larson 1:13:52

High Spirits is still pumping and still recording. Both are trademarked, by the way. Yeah, uh I knew you looked. Um, Chris, always a pleasure. Thank you for spending the last hour and 18 minutes with me. Uh appreciate you. You're a true mensch. Uh, and I'll see you in Colorado. Yeah, looking forward to it. Cheers, everyone. All right. Thank you everyone for listening, sticking on. I saw a couple of viewers holding on the whole time. Uh and if you didn't, you're watching this recording or listening to it on YouTube, podcast, wherever it is. Thank you to our teams at Virtosa and Wolfmeyer, and of course, our producer, Eric Rossetti. If you've enjoyed this episode, please share, like, review, do all the things, do your AI summary and call it your own content. I don't give a fuck. Thank you for listening. As always, folks, stay curious, stay informed, and most importantly, keep your spirits high. Until next time, that's the show.