๐๐๐จ๐ข๐ง ๐๐ฌ ๐ญ๐ก๐ข๐ฌ ๐ฐ๐๐๐ค ๐๐จ๐ซ ๐๐ง๐จ๐ญ๐ก๐๐ซ ๐๐๐ง๐ง๐๐๐ข๐ฌ ๐๐ฎ๐ฌ๐ข๐ง๐๐ฌ๐ฌ ๐๐๐ฐ๐ฌ ๐๐จ๐ฎ๐ง๐-๐ฎ๐ฉ!๐ฟ
It's been another eventful week in the world of cannabis, and we're excited to talk about it.ย
In this week's episode, we discuss...
๐จย Minnesota's botched social equity lottery application (read robbery)
๐ธย GTI's big bet on beverage through Agrify's acquisition of Seรฑorita
๐ฟย What the new Senate draft of the Farm Bill means for hemp
๐ตย Paywalls and supporting your cannabis media and niche news sources
Tune-in to find out, or simply wait for the podcast to air. As always, High Spirits is more than a podcast โ it's a dynamic conversation among leaders in the cannabis industry. We film live, and your participation is what makes our discussion richer and more meaningful. We invite you to contribute to the conversation and let us know what's important to you! What topics should we delve into? We welcome your questions and comments, so drop them into the chat and join us as we dive into the current events of the cannabis industry!
--
High Spirits is brought to you by Vertosa and Wolf Meyer.
Your hosts are Ben Larson and AnnaRae Grabstein.
Follow High Spirits on LinkedIn.
We'd love to hear your thoughts. Who would you like to see on the show? What topics would you like to have us cover?
Visit our website www.highspiritspod.com and listen to all of our past shows.
THANK YOU to our audience. Your engagement encourages us to keep bringing you these thought-provoking conversations.
Remember to always stay curious, stay informed, and most importantly, keep your spirits high.
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Ben Larson (00:06):
Hey everybody, welcome to High Spirits.
It's episode 69.
I'm Ben Larson and with me, asalways, is Anna Rae Grabstein.
We're recording Thursday,november 21st 2024.
1994?
I think not.
I'm back.
I'm getting warmed back up.
Give me a minute.
Got a lot of news to covertoday.
(00:28):
We just heard that Matt Gaetz isactually withdrawing from the
race.
But beside that, some news outof Minnesota with equity
licenses, Agrify stock goingcrazy with GTI's acquisition of
Senorita and some other thingsat the federal level.
But before we get there, AnnaRae, you haven't been swept away
in a river yet.
How are you doing with thisatmospheric river that we're
(00:51):
experiencing?
AnnaRae Grabstein (00:52):
Yeah, if, no matter where you are in the
world, you might be hearingabout the bomb cyclone that's
hitting Northern California, andit certainly is very terrifying
sounding.
Bomb cyclone sounds crazy andit is.
Um, it has not stopped rainingfor at least like 36 hours
straight, and it is the type ofrain that goes sideways.
(01:13):
It is just a lot with a lot ofwind.
But my internet's working andI'm here today, so I'm keeping
driving for the win.
Ben Larson (01:22):
There you go.
AnnaRae Grabstein (01:23):
Yeah, it's been pretty wild.
Definitely, definitely, keepanticipating the power will go
out, but it hasn't yet.
That's good.
Ben Larson (01:33):
You think Elon Musk is gonna make a run for Attorney
General?
AnnaRae Grabstein (01:37):
I think you have a lawyer to be eligible for
that job, but we could bechanging.
Is Matt Gaetz a lawyer?
Ben Larson (01:43):
Oh, my God, that's terrifying.
AnnaRae Grabstein (01:48):
Yeah, and you got back from a trip to the
Carolinas, right, you've beenall over the place.
Ben Larson (01:53):
I have been all over the place, it feels good to be
home.
I went to North Carolina, southCarolina, and immersed myself
in red state weed.
It was just a phenomenal trip.
I got to visit some majordistributors down there, shout
out to Southern Crown Partners,also some brands like High Rise,
and just got to see just howmuch the Carolinas are loving
(02:16):
THC beverages.
Literally, dreams come trueWalking through a distribution
floor, this facility.
It was one of their facilities.
I think they have like eight.
They had a 15,000 square footrefrigerator.
My facility is 10,000 squarefeet.
It was just wild to see.
But you'd be in aisles ofbeverage and there'd be pallets
(02:40):
of Budweiser or Bud Light andright next to it is a pallet of
THC beverages and they're justbeing put on this.
Like half mile of automatedconveyor belt gets to the end
and then stacked up in a pallet,all mixed, twisted tea, truly
Vita, coco, essential water andthen half of it being THC
beverages and they're like, oh,that one's going off to Total
(03:02):
Wine.
And then you go to Total Wineand they have like an entire
aisle filled with these thingsand I don't know.
I'm just so fired up about it.
It's, it's, it's crazy beinghere in california, where you
just have this totally embattledstate that seems to hate thc,
and you go to a conservativestate, so to speak, and it's
(03:23):
just everywhere.
AnnaRae Grabstein (03:23):
So are you seeing brands that are
consistent across all thesedifferent markets, or are you
seeing that there's certainbrands that are showing up?
In certain markets and not inothers.
Ben Larson (03:33):
Yeah, it's interesting.
You know, there's definitelythe mainstays that you see all
across the place, but everymarket, every store tends to
have like their favorites andthen there's always like kind of
new ones starting to emerge.
When I was there, you know, Isaw some massive buildouts for
companies like high rise Alsonowadays, who recently launched
(03:54):
their they're ready to drink 12ounce beverages.
You know had some prettysignificant buildouts on on end
caps and in some of the liquorstores.
One of the liquor stores inSouth Carolina is called Bottles
, in those like kind of primereal estate areas where they
widen the aisle in the middleand then they have some like
angular kind of mini shelvesgoing on.
They loaded that up with theTHC beverages with like signs
(04:17):
hanging from the ceiling andthey said that that footprint,
which is about 10% of the squarefootage of the store, was doing
more sales than their entirecraft beer section.
And so everyone's fired up theretailers, the distributors, the
brands.
They're just getting started.
I think they had sold 5,000cases over the last couple
(04:39):
months, but they're so excitedabout them I'm like how big do
you anticipate this getting?
And they said in two to threeyears we expect to be 10 to 15%
of our revenue.
Massive and that's huge.
I mean alcohol is real big, youknow.
It's a $1.6 trillion globalmarketplace.
The US makes up for a lot ofthat and if we can get 10 to 20%
(05:01):
of it as a category, that'sbeyond my wildest dreams.
AnnaRae Grabstein (05:04):
If we can get 10 to 20% of it as a category.
That's beyond my wildest dreams.
Also in cannabis, which iswhere we both started in this
journey, the way that productreach is a retail shelf has been
very dependent on bud tenderand buyer preferences.
How are you seeing in THCbeverage that products are being
chosen to be on retail shelves?
Ben Larson (05:26):
Brand and flavor.
Pretty much it has to be a verywell put together brand with
proper labeling and just likeall the proper sizing.
I've seen weird like nutritionpanels that you could tell were
just too small and probably werenot aligned with some
guidelines that are out there.
I'm not an expert when it comesto how to label a product.
I'm sure there's like some FDAguidelines, small and probably
we're not aligned with someguidelines that are out there.
I'm not.
I'm not an expert when it comesto how to label a product.
(05:47):
I'm sure there's like some fdaguidelines, but yeah, it's like
it has to be a professionalpackage, uh, and so we're seeing
a lot of like digital printingon the cans now or offset
printing.
Um, instead of you know theshrink wraps which are very
common, for you know the thescale that the cannabis side of
the business is at, and then ithas to just taste great I love
(06:09):
there's not a potency racehappening the way there has been
in in cannabis flower, ofbuying based on the highest
potency.
AnnaRae Grabstein (06:16):
Instead, people are actually looking for
consistency and professionalismin finished goods.
It's really really well, it's.
Ben Larson (06:24):
It's also an economic play from you know,
it's just a little bit moresophisticated goods.
It's really, really well, it's.
It's also an economic play fromyou know, it's just a little
bit more sophisticated, right?
It's like if you sell a fourpack of five milligram drinks,
the person that purchases thatwill probably come back and
purchase it again soonercompared to if it were 10
milligram drinks, right,theoretically.
Um, although there we did gointo some stores there were 10
(06:45):
milligram, five milligrams.
Uh, a lady who looked well to do, you know, the classic soccer
mom that everyone's targetingcame right in, came right for a
singular product.
You know, amongst all theothers that were on the shelves,
probably like 100 differentSKUs grabbed this one.
I stopped her, was like, askedher like why are you purchasing
that?
And she said because it's hardand it's strong.
(07:07):
I was like oh, okay, noted.
So I think in what we hear fromsell-through in Minnesota,
people definitely gravitatetowards the top, the 10
milligram drinks compared to the5.
But that might shift over time.
Also, policy will come intoplay.
But yeah, I'm here for it.
Either way, drink what you wantto drink.
AnnaRae Grabstein (07:27):
Nice.
Well, we're going to talk aboutmore, more about beverage and a
little bit when we talk aboutagrify and senior Rita, let's
let's talk about Minnesota for aminute.
Ben Larson (07:37):
Yeah, I saw you post about it.
It sounds, uh, sounds like aclassic cannabis shenanigans
going on again.
AnnaRae Grabstein (07:43):
I got gotta tell you, Ben, I'm in a rage.
I am in a rage.
I went to Minnesota, we went toMinnesota together in the
summer and I have been sohopeful about this market and
they just really flubbed here.
They flubbed big time and I did.
I posted on LinkedIn.
People can go see.
But what has happened after Iposted?
(08:05):
I have been getting tons ofmessages, DMs and emails from
folks that are affected by whathappened.
So I can go through what thatis.
Ben Larson (08:13):
Yeah, so just for context, there was an open
application for an equitylottery and so they wanted to
prioritize equity licenses,licensees and they received
something like 1800 applications, right?
AnnaRae Grabstein (08:28):
Yeah, so the only groups that were eligible
to apply to be in the lotterywere social equity verified
businesses or applicants, and sopeople went through a very
robust qualification process tobecome social equity verified
and then, once you were verified, you could apply to enter the
lottery, and there were a bunchof requirements like different
(08:52):
plans and entity documents,along with hefty fees that were
as high as $10,000, but usuallyin the $2,500 or $5,000,
depending on what type ofapplication you were trying to
submit.
Then there was a process whereyour application was supposed to
just be verified, that itchecked all of the boxes and
(09:13):
then you would be entered into alottery.
So, yes, they received 1,800 ofthose applications in various
categories.
Ben Larson (09:20):
If we assume $5,000, that's $9 million in revenue to
the state.
AnnaRae Grabstein (09:26):
Yeah.
Ben Larson (09:26):
That's wild.
AnnaRae Grabstein (09:27):
Yep and they denied 1,200, two-thirds of the
applicants over the course ofthe last couple days for the
lottery.
Ben Larson (09:38):
So they essentially just snatched like $6 million.
They said thank you very much.
Yeah, so don't come again.
AnnaRae Grabstein (09:44):
And these are people that they already
qualified as beingdisproportionately harmed in
some way by the war on drugs, orwho have had struggling farms
or are veterans of US serviceall types of qualifications.
They did have a pretty broadumbrella of inclusivity.
Ben Larson (10:03):
Is this Minnesota residents, or is it broader than
that?
AnnaRae Grabstein (10:09):
No, and this was one of the things that, to
me, actually signaled thatMinnesota was learning from
other states and that whenMinnesota created their social
equity qualifiers, they did notrequire the applicant live in
Minnesota no-transcript thelegal challenges that people had
(10:50):
and they did not requireapplicants to be from Minnesota.
So there were applicants fromall over the place.
I've heard from folks that havelived in Minnesota for 20 years
and had cannabis felonies thatthey were in prison for.
I've heard from social equityapplicants in Oakland.
I've heard from social equityapplicants from the state of
(11:11):
Washington, from all over thecountry, that were denied as
part of this process.
And not only were they denied,but the state is saying that
there is no opportunity toappeal.
That's allowed in the law.
And what is even morefrustrating about this process
is that within the context ofthe application process, they
(11:33):
had a deficiency notificationthat they told people that if
there was a problem with yourapplication, you would be issued
a deficiency notice and thenyou would have 10 days to
respond to the deficiency andfix your application.
And they sent out deficiencynotices in October to 300
(11:55):
applicants, and so if you wereone of the groups of people that
didn't receive a deficiencynotice, you figured that you
were probably good right.
Because they weren't giving youan opportunity to cure a mistake
that you might have made, whichis a fair process, especially
in light of their prioritizingonly equity applicants being
allowed.
You'd think that they wouldwant to create a successful
outcome for as many folksgetting into the lottery as
(12:18):
possible, but instead a numberof people 1200 groups, two
thirds most who did not receivethose deficiency notifications,
were just denied for fails thatwere unexplained, and it's just
really a bummer for many reasons, and so here's a few of the
(12:39):
reasons.
One of those reasons is thatthis was going to be the
precursor to a lottery, whichwould mean that the Minnesota
adult use market would launch,and now, most likely, there are
going to be lawsuits.
Someone is going to file atemporary restraining order and
cause the whole program and theissuance of licenses to take
(13:00):
longer.
I don't know who that group is,yet A lot of people are asking
me.
Ben Larson (13:06):
I know about 1200 people that could be.
AnnaRae Grabstein (13:08):
Yeah, and a quote from somebody who reached
out to me and I'm going to keepthem anonymous.
But they said hopefully someoneor a group of applicants can
file a joint TRO.
I'm sure most applicants, likeus, were hoping to put that
money towards standing upoperations.
Now the Office of CannabisManagement is forcing people to
(13:29):
spend limited funds onlitigation, which compounds the
injustice.
Ben Larson (13:34):
And now the state has $9 million to fight that
lawsuit.
Yeah, Thanks guys.
AnnaRae Grabstein (13:38):
The state has $9 million that they took from
equity applicants and I hopethat I'm going to wake up from
this sick nightmare and find outthat Minnesota has come to
their senses and that if theysee deficiency in these
applications, that they're goingto let people cure them.
Ben Larson (13:54):
Not to sound like a hemp bro, but for as long as
you're engaged in the regulatedcannabis space, you're not going
to wake up from the nightmare.
AnnaRae Grabstein (14:00):
You're right.
You're right.
So I am keeping a list of folkswho have reached out to me and
if there are lawyers that areworking on this that want to
reach out, I'm happy to sharethe groups that have talked to
me and see what we can do to getjustice for these folks.
I think that people knew thatthis was a lottery and so they
(14:22):
realized that they were taking achance, but they thought that
they would at least get a fairchance if they qualified with
their application to be a partof the lottery.
So this has been a big surpriseand a big disappointment.
So, yeah, now Minnesota's adultuse market is going to be on
hold and a lot of folks thathave big dreams are not getting
an opportunity to even havetheir ball put into the mix into
(14:43):
the mix with the lottery it'sjust so ridiculous.
Ben Larson (14:46):
Like there's cannabis agencies just can't get
out of their own way.
You know, it's like we see thisjust again and again and again,
every state that tries to rollout a regulated program and,
unfortunately for minnesota,like they already have medical,
they already have a low-dosehemp, and and now they're
they're fumbling the last pieceof the puzzle.
Yeah, I mean, $5,000 is a lotof money for a lot of these
(15:11):
applicants.
AnnaRae Grabstein (15:12):
Oh yeah, and there has not been clarity.
There has been some interviewswith the interim director of the
OCM, briner, I think CharleneBriner.
Please respond to my LinkedInand email messages I've sent you
.
Charlene, and her quotes havebeen about weeding out predatory
(15:35):
business relationships and zoneflooding.
And neither zone flooding norpredatory business relationships
seem to be what I'm hearingfrom applicants and and there
was nothing in the law or theapplication process that
outlined a process by whichanyone was going to be making
(15:59):
judgments about about thesebusiness structures or zone
flooding, whatever that is.
So what a mess.
Ben Larson (16:06):
Charlene was actually on my panel when we
were in Canara and was supposedto come to the breakfast the
following morning butunfortunately had to step away.
AnnaRae Grabstein (16:14):
Call me Charlene, okay.
Ben Larson (16:16):
All right, well, anything to lift our spirits,
that was.
That felt like days of old,just lamenting on unregulated
cannabis.
AnnaRae Grabstein (16:24):
It is.
It is tiring, but we can moveon to something more optimistic.
Ben Larson (16:28):
Okay, yeah, yeah, what do you have?
AnnaRae Grabstein (16:30):
There is good news, but it still isn't.
Hemp beverage, which seems tobe where the brightness is these
days.
If you're talking THC, senorita, gti and Agrify, oh my.
Ben Larson (16:45):
Oh my yeah, seniorita gti and agrify.
AnnaRae Grabstein (16:47):
oh my um, oh my yeah agrify released a press
release this morning that theyhave raised close to 26 million
in a private stock sale that ison the back of agrify, also
announcing that they're workingto close an acquisition of
Senorita, a THC beverage fromDouble or Nothing LLC, in an
(17:10):
all-stock transaction.
So this is great news for thesector.
What do you think?
You know these guys, theSenorita team, right?
Ben Larson (17:18):
Yeah, frankly, I was kind of shocked by it.
The owners of Senorita are twovery experienced beverage folks.
I started to kind of read intoa little bit.
It's like they wouldn't do adeal unless it really made sense
to them and they thought it wasreally going to help the
company, because Charles andJoel both have massive access to
distribution through their longstanding business in wine.
(17:39):
So I imagine that they'reprobably talking directly to Ben
and that there is a big masterplan going on here.
So I think it's a big deal.
Ben Kovler just continues toprove that he's playing 4D chess
with everyone and, you know,while all the MSOs are
struggling to find profitability, he's actually putting his
money to work and doing thesecomplex deals, these complex
(18:01):
deals, and I think this doesshow that we can expect GTI to
be a major player in in the hempbeverage space in the not too
distant future.
AnnaRae Grabstein (18:19):
Yeah, this Agrifia is now the first focused
public vehicle for for hemp togo and to win.
And we've talked a little bitabout Tilray and some others,
but this is real business.
Acupun, this is a team that hasbuilt and scaled in cannabis.
Built and scaled in wine.
This is the type of businessthat I want to bet on.
I believe that.
Ben Larson (18:41):
You and a lot of other people.
Their stock has gone nuts overthe last two weeks.
AnnaRae Grabstein (19:09):
OMG, the stock.
Yeah, so when the deal wasannounced the stock was, I think
, a little bit sub $5.
And it would have meant thatthe deal for the Seniorita team
was worth about $2.6 million inthe all stock deal and as of
this morning it was closer to 25million.
So you're right, I think thatmost likely the double or
nothing team from senior Rita.
They saw and see the upsidepotential in a public vehicle
and now it's just about pullingoff what's ahead and it sounds
like from the track record thatJoel and Charles and Ben bring
(19:30):
that this is like bright, sunnyfuture here that become a part
of this effort and we'll see ifthey decide to build those
brands or to buy those brands ora combination.
I think that within hempbeverage there's so many
(19:51):
different categories to touch on.
It's not just hemp beverage.
There is the cocktail categorythat Senorita is leaning into,
there are seltzers, there aretraditional sodas, there are
beer imitations, there is coldbrew coffee.
It's like there are so manydifferent places to land and I
think that they have a huge,huge opportunity to build a
(20:15):
diversified brand portfolio thatserves all kinds of unique
customers here also just likethinking about what this means
for the political conversationsthat are going on at the various
state and federal levels.
Ben Larson (20:29):
You know this is another ally that is starting to
kind of bridge the gap.
I know in the texasconversation, you know a lot of
people are wondering.
It's like who's going to bepressing on which side to get
texas going to a certaindirection.
People postulated that GTI wasgoing to be trying to shut down
the hemp market in Texas andmake sure that regulated
(20:51):
cannabis had a fighting chance,and that might still be true,
but it probably won't includebeverage.
So, yeah, really interesting tothink about the direction that
takes, and that seems to bewhere a lot of conversations are
going these days.
I participated in a brand summitthis past Sunday, of which I
(21:11):
don't think I can give too manyof the details.
I think it's just a lot to getboth sides talking the hemp and
the cannabis side and realizethat we're probably stronger
together and that we need to befinding a path forward that is
beneficial for both theregulated cannabis side and the
hemp business, and so it'll beinteresting to see where all
these conversations go.
(21:32):
But you know, I do think peopleare starting to realize that,
from a political level, peoplesee hemp, people see cannabis
and, at the end of the day,we're talking about cannabinoids
and we need to figure out astructure that works for
everyone and that seems to bebeverage absolutely.
AnnaRae Grabstein (21:46):
I'm glad to hear that some it's like that
are taking place, I guess.
Back to one more point I wantedto make about this this nasdaq
public vehicle that agrify isleaning into.
You know, cure leaf, largestglobal cannabis company, um in
the world, has gotten into thehemp-derived space, but they
(22:09):
remain a Canadian public listedcompany.
So it's strategically adifferent path that Ben Kovler
and GTI have taken by using aseparate vehicle, separate
vehicle, and I also predict thatwe're going to see more of that
(22:30):
, that there are probably a lotof companies that are looking
for the right shell in nasdaq touh to plug hemp let's say we
got to find a bunch of old, uhdefunct, mining companies.
Ben Larson (22:44):
It sounds like something that's what the old,
the old canadian deals were inin the early days yeah well,
it's all going to mean nothingif we don't get some support, uh
, or movement, or lack ofmovement.
I guess in the in the farm billand we've been seeing some, some
movement there from from theperspective of the senate uh,
there's a new draft out that isnot putting too much detail into
(23:07):
the hemp conversation.
There was a new definitionwhich kind of broadened the
definition of THC, so the 0.3%would then now apply to total
THC, not just Delta 9, but THCA,delta 8, all these kinds kind
of things, and so that mightseverely restrict what qualifies
(23:28):
as as hemp.
It also delineates betweenindustrial hemp and then hemp
destined for cannabinoidextraction.
We we could pontificate on whatthis actually, how this
actually impacts the category,but I don't even know if that's
worth doing because, like, Idon't know if we're going to see
this actually get settled onfor a year, and so it feels kind
of like we're going to be stuckin status quo until this
(23:52):
conversation richens.
What do you think?
AnnaRae Grabstein (23:55):
I agree with the status quo.
I think that the new languagethat came out shows me that the
Mary Miller Amendment isn't adone deal, and that is very
positive.
It means that there willcontinue to be a discussion
about how hemp is represented inthe Farm Bill and that we can
(24:18):
have conversations about thelanguage, and that there are
some advocates to be thinkingabout ways to make sure that
hemp is not fully banned andthat prohibition is not the path
that all folks want to take inCongress.
That said, the new language isput up by Democrats.
We're about to be having aRepublican majority across the
(24:41):
board.
I don't think that the farmbill is going to be moving
between now and the newadministration coming to be.
So the question is do we justpush forward and extend the farm
bill further?
And I think that pontificatingif that's going to happen is
more reasonable, and I thinkyou're right that it probably
will happen, which is positivein some ways, because it means
(25:04):
that status quo for thecompanies that are playing in
the space can remain, but italso continues to leave up for
debate what's happening next.
Ben Larson (25:14):
So it's buying everybody some time yeah, but
the way I'm reading this, ifthis language did get through,
did go through, um, that itwould probably largely eliminate
this THCA flower marketplace.
Yes, for sure.
And then what's left to kind ofremain ambiguous, I guess, is
how do you define the endproducts that are people
(25:36):
consuming?
It seems like beverage, forinstance, by definition, would
still be following a similardefinition, but again ambiguous
at best.
AnnaRae Grabstein (25:47):
Ambiguous at best, leaving some opportunities
for the market and making somebig changes to some of the stuff
that already we're seeingstates work to prohibit, mostly
in the inhalable category, itseems, would definitely not fly
with this new definition.
Ben Larson (26:02):
Yeah, well, very good, it's been crazy lately.
It's trying to track thedirection everything's going, I
think.
I mean, I think that's howTrump likes to rule is keep
everyone on their toes andconfused from a solely cannabis
focus.
It's been really interesting tosee the different appointees
over the last few weeks.
You know we mentioned MattGaetz, kind of withdrawing, but
(26:25):
he was very pro-cannabis leadingup to his appointment of AG.
But we'll see who the next oneis.
You know, obviously we talkedabout RFK in the past.
Dr Oz was appointed to the headof Medicare and Medicaid.
He's very pro-cannabis.
I'm not going to talk about allthe other crazy doctor stuff
(26:47):
that he does or not doctor stuff.
What kind of doctor is he?
Do we even know?
Is he a chiropractor?
AnnaRae Grabstein (26:52):
I think he was a surgeon of some kind.
Yeah, I don't know.
Ben Larson (26:58):
Yeah, and that wasn't a dig on chiropractors.
I actually go see mychiropractor in 30 minutes, so
yeah, I love chiropractors.
Sorry.
AnnaRae Grabstein (27:05):
All these appointments and it's this
pontificating.
It's the like that we don'thave a crystal ball for what's
coming.
We need to be ready to respondwhen things do create
opportunities.
Even if somebody ispro-cannabis, it doesn't mean
that it's at the top of theirpriority list, and that's really
.
I think what we're up againsthere is not a lot of
(27:26):
understanding about what thepriorities of the new
administration are going to be.
Whether or not they'repro-policy change is one thing,
but if they're going to bemoving it forward and in front
of other things that they alsowant of which there is many.
So that's what we're trying tofigure out, and once people are
(27:47):
actually in the seats and theadministration has shifted and
we're not just talking aboutwhat the transition team will
look like, but we're talkingabout people that are now in
their jobs I think that we'llhave a much better eye on it.
We are starting to see, thoughI think it was the US Cannabis
Council announced a new lobbyistthat has a longstanding
(28:09):
relationship and has been a partof the Republican kind of
political machine for manydifferent past administrations,
and there has been predominantlyDemocratic-leaning lobbyists
working on cannabis in DC, andso my guess- well, interestingly
enough, I think a number of thethe outgoing Congress people
(28:32):
had a meeting with with the U Scannabis council or the U S
cannabis round table.
Ben Larson (28:38):
Oh, that's a different one the national camp
is a different group you think Iwould know, but it's too hard
to keep track of all thesepeople.
You know the we too hard tokeep track of all these people.
You know we have the retiringcannabis supporters in Congress
that are, you know, again ontheir way out and hopefully
meeting with the cannabis sideis a good sign of telling us
(28:59):
what we need to do to makehappen.
But I know there's not a wholelot of trust in the USCC or the
US Cannabis Roundtable from thebroader cannabis industry.
Sure Well, shifting theconversation a little bit, cc,
or or the us, uh, cannabisroundtable, yeah, from the
broader cannabis industry.
AnnaRae Grabstein (29:06):
So sure, well , shifting, shifting the
conversation a little bit.
If you are a part of ouraudience, you probably like to
follow cannabis news, as myguess.
So you might have noticed thisweek that a new paywall has
appeared at one of the mostimportant and key kind of
cannabis news resources, whichis the Green Market Report,
(29:27):
founded by Deborah Borshart.
Green Market Report wasDeborah's business and was
acquired by Crane Media a coupleyears ago, which is a national
media group that's based out ofChicago, and not much changed
after that acquisition in termsof the way that the Green Market
Report showed up, in terms oftheir daily newsletters, their
(29:52):
coverage.
If anything, they seem to havesome expanded resources after
that.
From my perspective, debra is areally great journalist.
They have some other greatjournalists on their team, like
John Troyer, who's been coveringthe industry for over a decade,
and this week, if you clickedto learn more, to read any of
their headlines, you encountereda paywall of $49 a year.
Ben Larson (30:16):
Oh, that's not too bad.
AnnaRae Grabstein (30:17):
Not too bad.
What do you think about this,Ben?
Ben Larson (30:20):
It's like $4 a month .
That's fine.
I mean, have I?
Have I paid it yet?
No, but I think I would, I'd bewilling to pay that.
I think that's a totallyacceptable rate for what seems
like a cannabis focus on biasedperspective.
AnnaRae Grabstein (30:40):
I'm going to be signing up.
I haven't yet.
Ben Larson (30:43):
Yeah, and I like Debra.
I agree, it's, it's.
She's always been a highintegrity operator.
You know it's funny, it's uh.
You know?
Another news source that Ioften find myself clicking
through to they're really goodat targeting me on on social
media is new york times.
Um, I refuse to pay uh for forthat one, because of how just
(31:06):
they pretend to be liberal butthey're anti-cannabis.
I just can't wrap my headaround it.
So I refuse.
Every time.
I pay the New York Times everymonth I subscribe.
AnnaRae Grabstein (31:16):
I also subscribe to my local Sonoma
County newspaper, the Santa RosaPress Democrat, but I don't
subscribe to any cannabis newsyet, and when I was in Southern
California last week I met AlexHalpern of Weed Week who was
encouraging me to subscribethere, and I probably should,
and I think I'll be subscribingto Green Market Report.
(31:38):
I think that the niche newssources, be it local news or a
cannabis-focused news source,are critical pieces of news and
information infrastructure thatindividuals need to support if
we want to keep having access tothis information and um, yep,
fair enough, I I did, I don'tknow.
Ben Larson (32:00):
I don't know if I'm actually I'm going to check this
I don't know if I'm actuallysubscribed or if I just
contributed when jeremy wasfirst launching cultivated.
Um, I remember writing checkfor that.
Our other well, these are morenewsletters now that I'm
thinking there's like highlycapitalized newsletter that I
love.
Politico does some great stuffand I don't think I've ever hit
a paywall with Politico.
AnnaRae Grabstein (32:22):
Yeah, and we have to make choices as
consumers.
We can't pay for every mediasource, or some people can, and
if you can, then you probablyshould.
I also subscribe.
I think I pay npr or my local,my local public broadcasting
station.
I think there are lots ofopportunities as consumers for
us to support the informationthat we want to make sure sticks
(32:44):
around and do you donate towikipedia when they do their
drives?
my, my husband, does every year,every year.
I give him a hard time about it.
He, he's a real sucker.
He's like he's the guy that ifyou send him an email asking for
something like a donation, hefeels like he has to say yes.
I'm like no, no, no, these arejust marketing emails, you don't
(33:07):
need to say yes, but Wikipediahas got him.
He donates every year toWikipedia.
What?
Ben Larson (33:13):
a good hearted man yeah.
AnnaRae Grabstein (33:15):
You're lucky to have him, I'm lucky to have
him on so many levels, heprobably will never hear this.
But yeah, thank you, Justin,Cool.
Well.
So yeah, I think in the end,people let's all go support
Green Market Report and showthem that we're ready to pay for
our cannabis news.
I think that will be important.
I'm going to sign up today,once we get off this podcast.
Ben Larson (33:37):
Awesome.
Well, we are getting close tothat time.
I want to mix things up alittle bit, yeah, as we round up
the top of the show here, Iwant to see what your last call
is.
Yeah, I'm going to make you doit.
My want to see what your lastcall is, yeah.
AnnaRae Grabstein (33:50):
I'm gonna, I'm gonna make you do it my last
call.
You should have warned me thatyou wanted me to make a last
call.
Ben Larson (33:58):
I know, but I just thought of it, so I'm no one's
listening to this, so I'm justkind of we're doing our weekly
catch up.
AnnaRae Grabstein (34:01):
I know my last call.
I think I want to.
I want to lean into the theexcitement about agrify and just
say that for today, I thinkthat I predict that there is a
lot of eyes on a nasdaq listedcompany going all in on hemp
beverage and there's going to bemore.
(34:22):
So that's a big prediction andthat I'm just.
I'm just feeling inspired by itand I'm feeling like there's
there's hope within a veryfrustrating sector performance
across the board in cannabis andI'm just grateful that there
are deals and growth in funspots in our space.
(34:44):
So that's, I think, my lastcall for today.
Ben Larson (34:47):
I love that.
I'll pivot off of that and justamplify what I was saying
towards the beginning of theshows.
We all need to broaden ourscope of cannabis.
If you're on the hemp side,understanding how much regulated
cannabis has helped progressthe conversation around
intoxicating hemp.
If you're on the cannabis side,the opportunity that hemp has
created for broader access tothe consumer and that, if we
(35:11):
want to accelerate broaderacceptance and legalization,
that both sides coming togetherto make that happen is how we
get it done.
We're trying to get that donein California.
We're trying to get it done atthe federal level.
If hemp and cannabis don't do itin a broader sense, the
beverage folk are certainlygoing to try to make it happen
for themselves.
Because, like I said when I'mtraveling to Austin, tennessee,
(35:37):
south Carolina, north Carolina,a lot of red states notably, but
there's some blue states inthere too.
It's everywhere.
And the retailers and thedistributors and the people with
a lot more money than hemp andcannabis combined have a vested
interest in this.
And so you know we need to cometogether and and and make sure
that we're helping build acategory for the future that we
have some control over and thatother players aren't just going
(36:00):
to do it the way that they wantit done there, we know all right
.
Yeah, there we have it.
Okay.
All right, folks, anothercannabis business news round up
a week of just myself and annaray.
We're gearing up for a big runinto the end of the year
thanksgivings next week, we havemj bizcon, after that I'll be
down at bevnet in la thefollowing week and then
(36:22):
hopefully, things start to calmdown.
But we're starting to gear upfor 2025, starting to align new
guests.
If you want to be on the showor you know someone who should
be on the show, something thatwe should talk about, a topic
that we should dive into, pleaselet us know.
Leave comments to us onLinkedIn.
Make sure that you like,subscribe, just do all the
things Really help us promote it.
(36:42):
Please, if you're stilllistening, stop and subscribe
and like in all the places thatyou can find us Apple, spotify,
linkedin, youtube but until thensorry, I just brain farted.
That's a wrap, folks.
That's a wrap.
Stay curious, stay informed.
Most importantly, keep yourspirits high.
All right, we'll talk to yousoon.
Bye, get me out of here.
Hey everybody, welcome to High Spirits.
It's episode 69.
I'm Ben Larson and with me, asalways, is Anna Rae Grabstein.
We're recording Thursday,november 21st 2024.
1994?
I think not.
I'm back.
I'm getting warmed back up.
Give me a minute.
Got a lot of news to covertoday.
(00:28):
We just heard that Matt Gaetz isactually withdrawing from the
race.
But beside that, some news outof Minnesota with equity
licenses, Agrify stock goingcrazy with GTI's acquisition of
Senorita and some other thingsat the federal level.
But before we get there, AnnaRae, you haven't been swept away
in a river yet.
How are you doing with thisatmospheric river that we're
(00:51):
experiencing?
AnnaRae Grabstein (00:52):
Yeah, if, no matter where you are in the
world, you might be hearingabout the bomb cyclone that's
hitting Northern California, andit certainly is very terrifying
sounding.
Bomb cyclone sounds crazy andit is.
Um, it has not stopped rainingfor at least like 36 hours
straight, and it is the type ofrain that goes sideways.
(01:13):
It is just a lot with a lot ofwind.
But my internet's working andI'm here today, so I'm keeping
driving for the win.
Ben Larson (01:22):
There you go.
AnnaRae Grabstein (01:23):
Yeah, it's been pretty wild.
Definitely, definitely, keepanticipating the power will go
out, but it hasn't yet.
That's good.
Ben Larson (01:33):
You think Elon Musk is gonna make a run for Attorney
General?
AnnaRae Grabstein (01:37):
I think you have a lawyer to be eligible for
that job, but we could bechanging.
Is Matt Gaetz a lawyer?
Ben Larson (01:43):
Oh, my God, that's terrifying.
AnnaRae Grabstein (01:48):
Yeah, and you got back from a trip to the
Carolinas, right, you've beenall over the place.
Ben Larson (01:53):
I have been all over the place, it feels good to be
home.
I went to North Carolina, southCarolina, and immersed myself
in red state weed.
It was just a phenomenal trip.
I got to visit some majordistributors down there, shout
out to Southern Crown Partners,also some brands like High Rise,
and just got to see just howmuch the Carolinas are loving
(02:16):
THC beverages.
Literally, dreams come trueWalking through a distribution
floor, this facility.
It was one of their facilities.
I think they have like eight.
They had a 15,000 square footrefrigerator.
My facility is 10,000 squarefeet.
It was just wild to see.
But you'd be in aisles ofbeverage and there'd be pallets
(02:40):
of Budweiser or Bud Light andright next to it is a pallet of
THC beverages and they're justbeing put on this.
Like half mile of automatedconveyor belt gets to the end
and then stacked up in a pallet,all mixed, twisted tea, truly
Vita, coco, essential water andthen half of it being THC
beverages and they're like, oh,that one's going off to Total
(03:02):
Wine.
And then you go to Total Wineand they have like an entire
aisle filled with these thingsand I don't know.
I'm just so fired up about it.
It's, it's, it's crazy beinghere in california, where you
just have this totally embattledstate that seems to hate thc,
and you go to a conservativestate, so to speak, and it's
(03:23):
just everywhere.
AnnaRae Grabstein (03:23):
So are you seeing brands that are
consistent across all thesedifferent markets, or are you
seeing that there's certainbrands that are showing up?
In certain markets and not inothers.
Ben Larson (03:33):
Yeah, it's interesting.
You know, there's definitelythe mainstays that you see all
across the place, but everymarket, every store tends to
have like their favorites andthen there's always like kind of
new ones starting to emerge.
When I was there, you know, Isaw some massive buildouts for
companies like high rise Alsonowadays, who recently launched
(03:54):
their they're ready to drink 12ounce beverages.
You know had some prettysignificant buildouts on on end
caps and in some of the liquorstores.
One of the liquor stores inSouth Carolina is called Bottles
, in those like kind of primereal estate areas where they
widen the aisle in the middleand then they have some like
angular kind of mini shelvesgoing on.
They loaded that up with theTHC beverages with like signs
(04:17):
hanging from the ceiling andthey said that that footprint,
which is about 10% of the squarefootage of the store, was doing
more sales than their entirecraft beer section.
And so everyone's fired up theretailers, the distributors, the
brands.
They're just getting started.
I think they had sold 5,000cases over the last couple
(04:39):
months, but they're so excitedabout them I'm like how big do
you anticipate this getting?
And they said in two to threeyears we expect to be 10 to 15%
of our revenue.
Massive and that's huge.
I mean alcohol is real big, youknow.
It's a $1.6 trillion globalmarketplace.
The US makes up for a lot ofthat and if we can get 10 to 20%
(05:01):
of it as a category, that'sbeyond my wildest dreams.
AnnaRae Grabstein (05:04):
If we can get 10 to 20% of it as a category.
That's beyond my wildest dreams.
Also in cannabis, which iswhere we both started in this
journey, the way that productreach is a retail shelf has been
very dependent on bud tenderand buyer preferences.
How are you seeing in THCbeverage that products are being
chosen to be on retail shelves?
Ben Larson (05:26):
Brand and flavor.
Pretty much it has to be a verywell put together brand with
proper labeling and just likeall the proper sizing.
I've seen weird like nutritionpanels that you could tell were
just too small and probably werenot aligned with some
guidelines that are out there.
I'm not an expert when it comesto how to label a product.
I'm sure there's like some FDAguidelines, small and probably
we're not aligned with someguidelines that are out there.
I'm not.
I'm not an expert when it comesto how to label a product.
(05:47):
I'm sure there's like some fdaguidelines, but yeah, it's like
it has to be a professionalpackage, uh, and so we're seeing
a lot of like digital printingon the cans now or offset
printing.
Um, instead of you know theshrink wraps which are very
common, for you know the thescale that the cannabis side of
the business is at, and then ithas to just taste great I love
(06:09):
there's not a potency racehappening the way there has been
in in cannabis flower, ofbuying based on the highest
potency.
AnnaRae Grabstein (06:16):
Instead, people are actually looking for
consistency and professionalismin finished goods.
It's really really well, it's.
Ben Larson (06:24):
It's also an economic play from you know,
it's just a little bit moresophisticated goods.
It's really, really well, it's.
It's also an economic play fromyou know, it's just a little
bit more sophisticated, right?
It's like if you sell a fourpack of five milligram drinks,
the person that purchases thatwill probably come back and
purchase it again soonercompared to if it were 10
milligram drinks, right,theoretically.
Um, although there we did gointo some stores there were 10
(06:45):
milligram, five milligrams.
Uh, a lady who looked well to do, you know, the classic soccer
mom that everyone's targetingcame right in, came right for a
singular product.
You know, amongst all theothers that were on the shelves,
probably like 100 differentSKUs grabbed this one.
I stopped her, was like, askedher like why are you purchasing
that?
And she said because it's hardand it's strong.
(07:07):
I was like oh, okay, noted.
So I think in what we hear fromsell-through in Minnesota,
people definitely gravitatetowards the top, the 10
milligram drinks compared to the5.
But that might shift over time.
Also, policy will come intoplay.
But yeah, I'm here for it.
Either way, drink what you wantto drink.
AnnaRae Grabstein (07:27):
Nice.
Well, we're going to talk aboutmore, more about beverage and a
little bit when we talk aboutagrify and senior Rita, let's
let's talk about Minnesota for aminute.
Ben Larson (07:37):
Yeah, I saw you post about it.
It sounds, uh, sounds like aclassic cannabis shenanigans
going on again.
AnnaRae Grabstein (07:43):
I got gotta tell you, Ben, I'm in a rage.
I am in a rage.
I went to Minnesota, we went toMinnesota together in the
summer and I have been sohopeful about this market and
they just really flubbed here.
They flubbed big time and I did.
I posted on LinkedIn.
People can go see.
But what has happened after Iposted?
(08:05):
I have been getting tons ofmessages, DMs and emails from
folks that are affected by whathappened.
So I can go through what thatis.
Ben Larson (08:13):
Yeah, so just for context, there was an open
application for an equitylottery and so they wanted to
prioritize equity licenses,licensees and they received
something like 1800 applications, right?
AnnaRae Grabstein (08:28):
Yeah, so the only groups that were eligible
to apply to be in the lotterywere social equity verified
businesses or applicants, and sopeople went through a very
robust qualification process tobecome social equity verified
and then, once you were verified, you could apply to enter the
lottery, and there were a bunchof requirements like different
(08:52):
plans and entity documents,along with hefty fees that were
as high as $10,000, but usuallyin the $2,500 or $5,000,
depending on what type ofapplication you were trying to
submit.
Then there was a process whereyour application was supposed to
just be verified, that itchecked all of the boxes and
(09:13):
then you would be entered into alottery.
So, yes, they received 1,800 ofthose applications in various
categories.
Ben Larson (09:20):
If we assume $5,000, that's $9 million in revenue to
the state.
AnnaRae Grabstein (09:26):
Yeah.
Ben Larson (09:26):
That's wild.
AnnaRae Grabstein (09:27):
Yep and they denied 1,200, two-thirds of the
applicants over the course ofthe last couple days for the
lottery.
Ben Larson (09:38):
So they essentially just snatched like $6 million.
They said thank you very much.
Yeah, so don't come again.
AnnaRae Grabstein (09:44):
And these are people that they already
qualified as beingdisproportionately harmed in
some way by the war on drugs, orwho have had struggling farms
or are veterans of US serviceall types of qualifications.
They did have a pretty broadumbrella of inclusivity.
Ben Larson (10:03):
Is this Minnesota residents, or is it broader than
that?
AnnaRae Grabstein (10:09):
No, and this was one of the things that, to
me, actually signaled thatMinnesota was learning from
other states and that whenMinnesota created their social
equity qualifiers, they did notrequire the applicant live in
Minnesota no-transcript thelegal challenges that people had
(10:50):
and they did not requireapplicants to be from Minnesota.
So there were applicants fromall over the place.
I've heard from folks that havelived in Minnesota for 20 years
and had cannabis felonies thatthey were in prison for.
I've heard from social equityapplicants in Oakland.
I've heard from social equityapplicants from the state of
(11:11):
Washington, from all over thecountry, that were denied as
part of this process.
And not only were they denied,but the state is saying that
there is no opportunity toappeal.
That's allowed in the law.
And what is even morefrustrating about this process
is that within the context ofthe application process, they
(11:33):
had a deficiency notificationthat they told people that if
there was a problem with yourapplication, you would be issued
a deficiency notice and thenyou would have 10 days to
respond to the deficiency andfix your application.
And they sent out deficiencynotices in October to 300
(11:55):
applicants, and so if you wereone of the groups of people that
didn't receive a deficiencynotice, you figured that you
were probably good right.
Because they weren't giving youan opportunity to cure a mistake
that you might have made, whichis a fair process, especially
in light of their prioritizingonly equity applicants being
allowed.
You'd think that they wouldwant to create a successful
outcome for as many folksgetting into the lottery as
(12:18):
possible, but instead a numberof people 1200 groups, two
thirds most who did not receivethose deficiency notifications,
were just denied for fails thatwere unexplained, and it's just
really a bummer for many reasons, and so here's a few of the
(12:39):
reasons.
One of those reasons is thatthis was going to be the
precursor to a lottery, whichwould mean that the Minnesota
adult use market would launch,and now, most likely, there are
going to be lawsuits.
Someone is going to file atemporary restraining order and
cause the whole program and theissuance of licenses to take
(13:00):
longer.
I don't know who that group is,yet A lot of people are asking
me.
Ben Larson (13:06):
I know about 1200 people that could be.
AnnaRae Grabstein (13:08):
Yeah, and a quote from somebody who reached
out to me and I'm going to keepthem anonymous.
But they said hopefully someoneor a group of applicants can
file a joint TRO.
I'm sure most applicants, likeus, were hoping to put that
money towards standing upoperations.
Now the Office of CannabisManagement is forcing people to
(13:29):
spend limited funds onlitigation, which compounds the
injustice.
Ben Larson (13:34):
And now the state has $9 million to fight that
lawsuit.
Yeah, Thanks guys.
AnnaRae Grabstein (13:38):
The state has $9 million that they took from
equity applicants and I hopethat I'm going to wake up from
this sick nightmare and find outthat Minnesota has come to
their senses and that if theysee deficiency in these
applications, that they're goingto let people cure them.
Ben Larson (13:54):
Not to sound like a hemp bro, but for as long as
you're engaged in the regulatedcannabis space, you're not going
to wake up from the nightmare.
AnnaRae Grabstein (14:00):
You're right.
You're right.
So I am keeping a list of folkswho have reached out to me and
if there are lawyers that areworking on this that want to
reach out, I'm happy to sharethe groups that have talked to
me and see what we can do to getjustice for these folks.
I think that people knew thatthis was a lottery and so they
(14:22):
realized that they were taking achance, but they thought that
they would at least get a fairchance if they qualified with
their application to be a partof the lottery.
So this has been a big surpriseand a big disappointment.
So, yeah, now Minnesota's adultuse market is going to be on
hold and a lot of folks thathave big dreams are not getting
an opportunity to even havetheir ball put into the mix into
(14:43):
the mix with the lottery it'sjust so ridiculous.
Ben Larson (14:46):
Like there's cannabis agencies just can't get
out of their own way.
You know, it's like we see thisjust again and again and again,
every state that tries to rollout a regulated program and,
unfortunately for minnesota,like they already have medical,
they already have a low-dosehemp, and and now they're
they're fumbling the last pieceof the puzzle.
Yeah, I mean, $5,000 is a lotof money for a lot of these
(15:11):
applicants.
AnnaRae Grabstein (15:12):
Oh yeah, and there has not been clarity.
There has been some interviewswith the interim director of the
OCM, briner, I think CharleneBriner.
Please respond to my LinkedInand email messages I've sent you
.
Charlene, and her quotes havebeen about weeding out predatory
(15:35):
business relationships and zoneflooding.
And neither zone flooding norpredatory business relationships
seem to be what I'm hearingfrom applicants and and there
was nothing in the law or theapplication process that
outlined a process by whichanyone was going to be making
(15:59):
judgments about about thesebusiness structures or zone
flooding, whatever that is.
So what a mess.
Ben Larson (16:06):
Charlene was actually on my panel when we
were in Canara and was supposedto come to the breakfast the
following morning butunfortunately had to step away.
AnnaRae Grabstein (16:14):
Call me Charlene, okay.
Ben Larson (16:16):
All right, well, anything to lift our spirits,
that was.
That felt like days of old,just lamenting on unregulated
cannabis.
AnnaRae Grabstein (16:24):
It is.
It is tiring, but we can moveon to something more optimistic.
Ben Larson (16:28):
Okay, yeah, yeah, what do you have?
AnnaRae Grabstein (16:30):
There is good news, but it still isn't.
Hemp beverage, which seems tobe where the brightness is these
days.
If you're talking THC, senorita, gti and Agrify, oh my.
Ben Larson (16:45):
Oh my yeah, seniorita gti and agrify.
AnnaRae Grabstein (16:47):
oh my um, oh my yeah agrify released a press
release this morning that theyhave raised close to 26 million
in a private stock sale that ison the back of agrify, also
announcing that they're workingto close an acquisition of
Senorita, a THC beverage fromDouble or Nothing LLC, in an
(17:10):
all-stock transaction.
So this is great news for thesector.
What do you think?
You know these guys, theSenorita team, right?
Ben Larson (17:18):
Yeah, frankly, I was kind of shocked by it.
The owners of Senorita are twovery experienced beverage folks.
I started to kind of read intoa little bit.
It's like they wouldn't do adeal unless it really made sense
to them and they thought it wasreally going to help the
company, because Charles andJoel both have massive access to
distribution through their longstanding business in wine.
(17:39):
So I imagine that they'reprobably talking directly to Ben
and that there is a big masterplan going on here.
So I think it's a big deal.
Ben Kovler just continues toprove that he's playing 4D chess
with everyone and, you know,while all the MSOs are
struggling to find profitability, he's actually putting his
money to work and doing thesecomplex deals, these complex
(18:01):
deals, and I think this doesshow that we can expect GTI to
be a major player in in the hempbeverage space in the not too
distant future.
AnnaRae Grabstein (18:19):
Yeah, this Agrifia is now the first focused
public vehicle for for hemp togo and to win.
And we've talked a little bitabout Tilray and some others,
but this is real business.
Acupun, this is a team that hasbuilt and scaled in cannabis.
Built and scaled in wine.
This is the type of businessthat I want to bet on.
I believe that.
Ben Larson (18:41):
You and a lot of other people.
Their stock has gone nuts overthe last two weeks.
AnnaRae Grabstein (19:09):
OMG, the stock.
Yeah, so when the deal wasannounced the stock was, I think
, a little bit sub $5.
And it would have meant thatthe deal for the Seniorita team
was worth about $2.6 million inthe all stock deal and as of
this morning it was closer to 25million.
So you're right, I think thatmost likely the double or
nothing team from senior Rita.
They saw and see the upsidepotential in a public vehicle
and now it's just about pullingoff what's ahead and it sounds
like from the track record thatJoel and Charles and Ben bring
(19:30):
that this is like bright, sunnyfuture here that become a part
of this effort and we'll see ifthey decide to build those
brands or to buy those brands ora combination.
I think that within hempbeverage there's so many
(19:51):
different categories to touch on.
It's not just hemp beverage.
There is the cocktail categorythat Senorita is leaning into,
there are seltzers, there aretraditional sodas, there are
beer imitations, there is coldbrew coffee.
It's like there are so manydifferent places to land and I
think that they have a huge,huge opportunity to build a
(20:15):
diversified brand portfolio thatserves all kinds of unique
customers here also just likethinking about what this means
for the political conversationsthat are going on at the various
state and federal levels.
Ben Larson (20:29):
You know this is another ally that is starting to
kind of bridge the gap.
I know in the texasconversation, you know a lot of
people are wondering.
It's like who's going to bepressing on which side to get
texas going to a certaindirection.
People postulated that GTI wasgoing to be trying to shut down
the hemp market in Texas andmake sure that regulated
(20:51):
cannabis had a fighting chance,and that might still be true,
but it probably won't includebeverage.
So, yeah, really interesting tothink about the direction that
takes, and that seems to bewhere a lot of conversations are
going these days.
I participated in a brand summitthis past Sunday, of which I
(21:11):
don't think I can give too manyof the details.
I think it's just a lot to getboth sides talking the hemp and
the cannabis side and realizethat we're probably stronger
together and that we need to befinding a path forward that is
beneficial for both theregulated cannabis side and the
hemp business, and so it'll beinteresting to see where all
these conversations go.
(21:32):
But you know, I do think peopleare starting to realize that,
from a political level, peoplesee hemp, people see cannabis
and, at the end of the day,we're talking about cannabinoids
and we need to figure out astructure that works for
everyone and that seems to bebeverage absolutely.
AnnaRae Grabstein (21:46):
I'm glad to hear that some it's like that
are taking place, I guess.
Back to one more point I wantedto make about this this nasdaq
public vehicle that agrify isleaning into.
You know, cure leaf, largestglobal cannabis company, um in
the world, has gotten into thehemp-derived space, but they
(22:09):
remain a Canadian public listedcompany.
So it's strategically adifferent path that Ben Kovler
and GTI have taken by using aseparate vehicle, separate
vehicle, and I also predict thatwe're going to see more of that
(22:30):
, that there are probably a lotof companies that are looking
for the right shell in nasdaq touh to plug hemp let's say we
got to find a bunch of old, uhdefunct, mining companies.
Ben Larson (22:44):
It sounds like something that's what the old,
the old canadian deals were inin the early days yeah well,
it's all going to mean nothingif we don't get some support, uh
, or movement, or lack ofmovement.
I guess in the in the farm billand we've been seeing some, some
movement there from from theperspective of the senate uh,
there's a new draft out that isnot putting too much detail into
(23:07):
the hemp conversation.
There was a new definitionwhich kind of broadened the
definition of THC, so the 0.3%would then now apply to total
THC, not just Delta 9, but THCA,delta 8, all these kinds kind
of things, and so that mightseverely restrict what qualifies
(23:28):
as as hemp.
It also delineates betweenindustrial hemp and then hemp
destined for cannabinoidextraction.
We we could pontificate on whatthis actually, how this
actually impacts the category,but I don't even know if that's
worth doing because, like, Idon't know if we're going to see
this actually get settled onfor a year, and so it feels kind
of like we're going to be stuckin status quo until this
(23:52):
conversation richens.
What do you think?
AnnaRae Grabstein (23:55):
I agree with the status quo.
I think that the new languagethat came out shows me that the
Mary Miller Amendment isn't adone deal, and that is very
positive.
It means that there willcontinue to be a discussion
about how hemp is represented inthe Farm Bill and that we can
(24:18):
have conversations about thelanguage, and that there are
some advocates to be thinkingabout ways to make sure that
hemp is not fully banned andthat prohibition is not the path
that all folks want to take inCongress.
That said, the new language isput up by Democrats.
We're about to be having aRepublican majority across the
(24:41):
board.
I don't think that the farmbill is going to be moving
between now and the newadministration coming to be.
So the question is do we justpush forward and extend the farm
bill further?
And I think that pontificatingif that's going to happen is
more reasonable, and I thinkyou're right that it probably
will happen, which is positivein some ways, because it means
(25:04):
that status quo for thecompanies that are playing in
the space can remain, but italso continues to leave up for
debate what's happening next.
Ben Larson (25:14):
So it's buying everybody some time yeah, but
the way I'm reading this, ifthis language did get through,
did go through, um, that itwould probably largely eliminate
this THCA flower marketplace.
Yes, for sure.
And then what's left to kind ofremain ambiguous, I guess, is
how do you define the endproducts that are people
(25:36):
consuming?
It seems like beverage, forinstance, by definition, would
still be following a similardefinition, but again ambiguous
at best.
AnnaRae Grabstein (25:47):
Ambiguous at best, leaving some opportunities
for the market and making somebig changes to some of the stuff
that already we're seeingstates work to prohibit, mostly
in the inhalable category, itseems, would definitely not fly
with this new definition.
Ben Larson (26:02):
Yeah, well, very good, it's been crazy lately.
It's trying to track thedirection everything's going, I
think.
I mean, I think that's howTrump likes to rule is keep
everyone on their toes andconfused from a solely cannabis
focus.
It's been really interesting tosee the different appointees
over the last few weeks.
You know we mentioned MattGaetz, kind of withdrawing, but
(26:25):
he was very pro-cannabis leadingup to his appointment of AG.
But we'll see who the next oneis.
You know, obviously we talkedabout RFK in the past.
Dr Oz was appointed to the headof Medicare and Medicaid.
He's very pro-cannabis.
I'm not going to talk about allthe other crazy doctor stuff
(26:47):
that he does or not doctor stuff.
What kind of doctor is he?
Do we even know?
Is he a chiropractor?
AnnaRae Grabstein (26:52):
I think he was a surgeon of some kind.
Yeah, I don't know.
Ben Larson (26:58):
Yeah, and that wasn't a dig on chiropractors.
I actually go see mychiropractor in 30 minutes, so
yeah, I love chiropractors.
Sorry.
AnnaRae Grabstein (27:05):
All these appointments and it's this
pontificating.
It's the like that we don'thave a crystal ball for what's
coming.
We need to be ready to respondwhen things do create
opportunities.
Even if somebody ispro-cannabis, it doesn't mean
that it's at the top of theirpriority list, and that's really
.
I think what we're up againsthere is not a lot of
(27:26):
understanding about what thepriorities of the new
administration are going to be.
Whether or not they'repro-policy change is one thing,
but if they're going to bemoving it forward and in front
of other things that they alsowant of which there is many.
So that's what we're trying tofigure out, and once people are
(27:47):
actually in the seats and theadministration has shifted and
we're not just talking aboutwhat the transition team will
look like, but we're talkingabout people that are now in
their jobs I think that we'llhave a much better eye on it.
We are starting to see, thoughI think it was the US Cannabis
Council announced a new lobbyistthat has a longstanding
(28:09):
relationship and has been a partof the Republican kind of
political machine for manydifferent past administrations,
and there has been predominantlyDemocratic-leaning lobbyists
working on cannabis in DC, andso my guess- well, interestingly
enough, I think a number of thethe outgoing Congress people
(28:32):
had a meeting with with the U Scannabis council or the U S
cannabis round table.
Ben Larson (28:38):
Oh, that's a different one the national camp
is a different group you think Iwould know, but it's too hard
to keep track of all thesepeople.
You know the we too hard tokeep track of all these people.
You know we have the retiringcannabis supporters in Congress
that are, you know, again ontheir way out and hopefully
meeting with the cannabis sideis a good sign of telling us
(28:59):
what we need to do to makehappen.
But I know there's not a wholelot of trust in the USCC or the
US Cannabis Roundtable from thebroader cannabis industry.
Sure Well, shifting theconversation a little bit, cc,
or or the us, uh, cannabisroundtable, yeah, from the
broader cannabis industry.
AnnaRae Grabstein (29:06):
So sure, well , shifting, shifting the
conversation a little bit.
If you are a part of ouraudience, you probably like to
follow cannabis news, as myguess.
So you might have noticed thisweek that a new paywall has
appeared at one of the mostimportant and key kind of
cannabis news resources, whichis the Green Market Report,
(29:27):
founded by Deborah Borshart.
Green Market Report wasDeborah's business and was
acquired by Crane Media a coupleyears ago, which is a national
media group that's based out ofChicago, and not much changed
after that acquisition in termsof the way that the Green Market
Report showed up, in terms oftheir daily newsletters, their
(29:52):
coverage.
If anything, they seem to havesome expanded resources after
that.
From my perspective, debra is areally great journalist.
They have some other greatjournalists on their team, like
John Troyer, who's been coveringthe industry for over a decade,
and this week, if you clickedto learn more, to read any of
their headlines, you encountereda paywall of $49 a year.
Ben Larson (30:16):
Oh, that's not too bad.
AnnaRae Grabstein (30:17):
Not too bad.
What do you think about this,Ben?
Ben Larson (30:20):
It's like $4 a month .
That's fine.
I mean, have I?
Have I paid it yet?
No, but I think I would, I'd bewilling to pay that.
I think that's a totallyacceptable rate for what seems
like a cannabis focus on biasedperspective.
AnnaRae Grabstein (30:40):
I'm going to be signing up.
I haven't yet.
Ben Larson (30:43):
Yeah, and I like Debra.
I agree, it's, it's.
She's always been a highintegrity operator.
You know it's funny, it's uh.
You know?
Another news source that Ioften find myself clicking
through to they're really goodat targeting me on on social
media is new york times.
Um, I refuse to pay uh for forthat one, because of how just
(31:06):
they pretend to be liberal butthey're anti-cannabis.
I just can't wrap my headaround it.
So I refuse.
Every time.
I pay the New York Times everymonth I subscribe.
AnnaRae Grabstein (31:16):
I also subscribe to my local Sonoma
County newspaper, the Santa RosaPress Democrat, but I don't
subscribe to any cannabis newsyet, and when I was in Southern
California last week I met AlexHalpern of Weed Week who was
encouraging me to subscribethere, and I probably should,
and I think I'll be subscribingto Green Market Report.
(31:38):
I think that the niche newssources, be it local news or a
cannabis-focused news source,are critical pieces of news and
information infrastructure thatindividuals need to support if
we want to keep having access tothis information and um, yep,
fair enough, I I did, I don'tknow.
Ben Larson (32:00):
I don't know if I'm actually I'm going to check this
I don't know if I'm actuallysubscribed or if I just
contributed when jeremy wasfirst launching cultivated.
Um, I remember writing checkfor that.
Our other well, these are morenewsletters now that I'm
thinking there's like highlycapitalized newsletter that I
love.
Politico does some great stuffand I don't think I've ever hit
a paywall with Politico.
AnnaRae Grabstein (32:22):
Yeah, and we have to make choices as
consumers.
We can't pay for every mediasource, or some people can, and
if you can, then you probablyshould.
I also subscribe.
I think I pay npr or my local,my local public broadcasting
station.
I think there are lots ofopportunities as consumers for
us to support the informationthat we want to make sure sticks
(32:44):
around and do you donate towikipedia when they do their
drives?
my, my husband, does every year,every year.
I give him a hard time about it.
He, he's a real sucker.
He's like he's the guy that ifyou send him an email asking for
something like a donation, hefeels like he has to say yes.
I'm like no, no, no, these arejust marketing emails, you don't
(33:07):
need to say yes, but Wikipediahas got him.
He donates every year toWikipedia.
What?
Ben Larson (33:13):
a good hearted man yeah.
AnnaRae Grabstein (33:15):
You're lucky to have him, I'm lucky to have
him on so many levels, heprobably will never hear this.
But yeah, thank you, Justin,Cool.
Well.
So yeah, I think in the end,people let's all go support
Green Market Report and showthem that we're ready to pay for
our cannabis news.
I think that will be important.
I'm going to sign up today,once we get off this podcast.
Ben Larson (33:37):
Awesome.
Well, we are getting close tothat time.
I want to mix things up alittle bit, yeah, as we round up
the top of the show here, Iwant to see what your last call
is.
Yeah, I'm going to make you doit.
My want to see what your lastcall is, yeah.
AnnaRae Grabstein (33:50):
I'm gonna, I'm gonna make you do it my last
call.
You should have warned me thatyou wanted me to make a last
call.
Ben Larson (33:58):
I know, but I just thought of it, so I'm no one's
listening to this, so I'm justkind of we're doing our weekly
catch up.
AnnaRae Grabstein (34:01):
I know my last call.
I think I want to.
I want to lean into the theexcitement about agrify and just
say that for today, I thinkthat I predict that there is a
lot of eyes on a nasdaq listedcompany going all in on hemp
beverage and there's going to bemore.
(34:22):
So that's a big prediction andthat I'm just.
I'm just feeling inspired by itand I'm feeling like there's
there's hope within a veryfrustrating sector performance
across the board in cannabis andI'm just grateful that there
are deals and growth in funspots in our space.
(34:44):
So that's, I think, my lastcall for today.
Ben Larson (34:47):
I love that.
I'll pivot off of that and justamplify what I was saying
towards the beginning of theshows.
We all need to broaden ourscope of cannabis.
If you're on the hemp side,understanding how much regulated
cannabis has helped progressthe conversation around
intoxicating hemp.
If you're on the cannabis side,the opportunity that hemp has
created for broader access tothe consumer and that, if we
(35:11):
want to accelerate broaderacceptance and legalization,
that both sides coming togetherto make that happen is how we
get it done.
We're trying to get that donein California.
We're trying to get it done atthe federal level.
If hemp and cannabis don't do itin a broader sense, the
beverage folk are certainlygoing to try to make it happen
for themselves.
Because, like I said when I'mtraveling to Austin, tennessee,
(35:37):
south Carolina, north Carolina,a lot of red states notably, but
there's some blue states inthere too.
It's everywhere.
And the retailers and thedistributors and the people with
a lot more money than hemp andcannabis combined have a vested
interest in this.
And so you know we need to cometogether and and and make sure
that we're helping build acategory for the future that we
have some control over and thatother players aren't just going
(36:00):
to do it the way that they wantit done there, we know all right
.
Yeah, there we have it.
Okay.
All right, folks, anothercannabis business news round up
a week of just myself and annaray.
We're gearing up for a big runinto the end of the year
thanksgivings next week, we havemj bizcon, after that I'll be
down at bevnet in la thefollowing week and then
(36:22):
hopefully, things start to calmdown.
But we're starting to gear upfor 2025, starting to align new
guests.
If you want to be on the showor you know someone who should
be on the show, something thatwe should talk about, a topic
that we should dive into, pleaselet us know.
Leave comments to us onLinkedIn.
Make sure that you like,subscribe, just do all the
things Really help us promote it.
(36:42):
Please, if you're stilllistening, stop and subscribe
and like in all the places thatyou can find us Apple, spotify,
linkedin, youtube but until thensorry, I just brain farted.
That's a wrap, folks.
That's a wrap.
Stay curious, stay informed.
Most importantly, keep yourspirits high.
All right, we'll talk to yousoon.
Bye, get me out of here.
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