Note to our listeners: Apologies for the poor sound quality on this episode. We experienced a bit of a technical snafu in the recording. We will be back on track next week!
🎙𝐉𝐨𝐢𝐧 𝐔𝐬 𝐟𝐨𝐫 𝐚𝐧𝐨𝐭𝐡𝐞𝐫 𝐂𝐚𝐧𝐧𝐚𝐛𝐢𝐬 𝐁𝐮𝐬𝐢𝐧𝐞𝐬𝐬 𝐍𝐞𝐰𝐬 𝐑𝐨𝐮𝐧𝐝𝐮𝐩!🌿
It's been another eventful month in the world of cannabis, and we're excited to talk about it. Tune-in to find out what's top of mind for us, thus what should be top of mind for you. For this episode, that includes the following:
🏛️ Tariff Impacts: With increasing COGS, how will your business respond?
📈 Business Fundamentals: Isn't it time we focus on running profitable businesses?
🍸 MSOs Hedge with Hemp Bev: Will hemp beverages provide a lifeline to MSOs?
🤠 Texas Hemp Ban: What is Lt. Gov. Dan Patrick up to, and what are the chances he'll succeed?
As always, High Spirits is more than a podcast – 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.highspirits.media 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.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
AnnaRae Grabstein (00:05):
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Ben Larson (00:53):
Hey everybody, welcome to episode 78 of High
Spirits.
I'm Ben Larson and with me, asalways, is Anna Rae Grabstein as
always, zanna Rae Grabstein.
It's Thursday, march 6th 2025,and we're doing a Cannabis
Business News Roundup, which isour guest-free show where we
(01:14):
cover the news.
AnnaRae Grabstein (01:15):
And hi everybody, so good to be with
you today.
You know these news roundupsare a labor of love for us.
We put a lot of effort intotrying to figure out what
matters most, and one thing thatI have been really aware of is
that the pace of news is movingso fast recently that it has
been hard for me to keep up.
As I have been trying to createcontent.
(01:37):
By the time I make that content, the news is almost changing.
Ben Larson (01:41):
Yeah Well, it's also complicated more complicated
these days because I feel likewe're spanning two industries
yeah, we absolutely are it usedto be just cannabis, regulated
cannabis dues?
That was really top of mind forme.
But now, straddling both, it'slike you're jumping from one
world to the next and there'sthis like sliver in between,
(02:01):
where they do overlap.
AnnaRae Grabstein (02:03):
Well, let's be real.
I mean, any industry is part of, like, the broader global
economic environment as well.
So we're talking about alltypes of things that are going
on, be it in politics and ininternational relations, and
this is a supply chain business,and so we touch on everything
from hard goods to, you know,marketing and media I mean, we
(02:28):
actually have to talk aboutpolitics today.
It's going to be inevitable?
Yeah, totally, but I'm I'mstoked to be here.
We're trying to do this monthlyso that we um get in person to
do a recording together and umalso make sure that we're
bringing the most importantstories to the front of your
(02:49):
minds and into conversation.
Before we get started, anythingyou want to share that's been
going on in your world.
Ben Larson (02:57):
Oh man, you know I I had a period of time where I
was traveling a lot or just feltout of the office.
I was sick, I was in Colorado,miami, took family to Maui and
ever since coming back from allthat, I've really enjoyed being
home.
So I'm trying to say no to alot.
I said no to a trip to DC, Isaid no to LA this week and it
(03:25):
feels really good.
I actually love working on thebusiness.
It's important for me to be upand out, be out there, but yeah.
I'm in a period of time whereI'm just really focused on
making sure that the business isset up for success in 2021.
AnnaRae Grabstein (03:42):
Nice, that's awesome.
I don't relate at all.
I feel like I've been in thistravel decision-making purgatory
where I have like an event onSaturday and a thing.
I might do in two weeks in Vegasand I haven't booked anything
and I'm on the fence with awhole bunch of people and then
late at night I'm like or maybeI should just go with my family
(04:04):
to like a hot spring and notthink about any of it.
So I like what you're doing.
I need to either get to a yesor get to a no.
That purgatory place of plansis tough, but I am in a good
place overall, though.
I think that, within thecontext of the world moving so
fast, I know a lot of people arestruggling of just how to keep
(04:27):
up and how to manage and whatthis means for our business and
our work and our families, and Iam doing a really good job of
staying grounded in it all andfiguring out what matters most
to me and the work that I'mdoing and what I need to be
paying attention to.
So I'm feeling positive aboutthe way that I'm showing up in
(04:48):
my world.
Ben Larson (04:50):
Very glad to hear that.
Yeah, it's hard, it's constantand we're in the middle of a
legislative session which bringsyou a little bit closer to the
business.
Yep, there's a lot happening inTexas, illinois and Florida.
It's just nonstop.
I feel like a pinball,sometimes just bouncing around
with a conversation in the next.
AnnaRae Grabstein (05:11):
Yeah, and I think it's important to
acknowledge that, if people arefeeling that way, that there's a
lot of us out there that arejust trying to keep up, and that
difference between working inyour business, on your business
and balancing everything that'sgoing on outside is really a lot
.
So lean on our community andour advisors and our mentors and
(05:32):
all those things to keep usstrong and level-headed.
So what are we going to talkabout today?
Ben Larson (05:40):
Where do we start?
AnnaRae Grabstein (05:41):
We've got some key stuff, but let's jump
in talking about tariffs.
Ben Larson (05:45):
Tariffs.
Oh, jump straight into thepolitics, jump right in.
All right, great.
AnnaRae Grabstein (05:50):
So, like we just said, cannabinoids are at
their core supply chainbusinesses, and the Trump
(06:11):
administration has announcedthat it is imposing a 25 percent
tariffs on imports from Canadaand Mexico and a 10 percent
tariff on goods from China, andthat these measures are intended
to address national securityconcerns around drug trafficking
, which I think is particularlyinteresting since we are in a
drug policy, adjacent andrelated industry.
Specifically, fentanyl is whatthey're talking about.
(06:32):
The concept is that fentanyl iscoming in for Mexico and Canada
, I guess Alongside, like othergoods.
Yeah, and as I was driving heretoday, I did hear that the
Mexico tariffs were justannounced to be postponed for
one month.
It is confusing how much thesetariffs are actually planned to
(06:55):
occur or if they're being usedas bargaining chips.
But if we were to just assumethat these tariffs are what is
happening, I think that thebroader conversation for us to
have is about how does thisaffect our industry and the
businesses that are workinginside of it.
Ben Larson (07:12):
Yeah, well, it's interesting.
I won't talk too much about theadministration, but the whole
concept was like, oh, we'regoing to stick it to these other
countries, but the only thing Isee it doing is hurting the
consumer in the business uh, inthe us, yeah, and thinking about
our business in cannabis.
In general, we always have thistheme of of precipitously
(07:35):
dropping prices.
Where I'm an ingredientscompany, I I source from other
ingredient companies and it'snot uncommon for me to get
letters about increasing pricesand so like are we going to
enter a phase where we areallowed and for any of my
customers listening, don't worry, we're not yet but are we
(07:58):
allowed to increase our prices?
Because that hasn'thistorically been the case.
AnnaRae Grabstein (08:03):
Well allowed.
There's nobody telling you howto price your products, but what
I will say is that the cannabismarket in some places has
reacted what I believe to bevery irrationally to oversupply.
That has created the situationthat we're in today of so many
(08:39):
businesses struggling aninventory that companies were
holding.
That inventory started to getreally desperate for cash and
started selling product into themarket for less than the cost
of producing it, and that wasshort-term cash need desperation
as opposed to focusing onbusiness fundamentals the need
(09:00):
to create a market that'shealthy and has long-term
sustainability for businesses.
And what happened?
There were fast followers thatsaid, well, we need cash too,
and so now we're also going tosell our product for less than
it costs to create it.
And a domino effect hasoccurred that the whole market
has suffered and thosecompressed, irrational prices at
wholesale translated to cheapprices for consumers retail all
(09:27):
the way through the supply chain.
And then now, bringing it backto what we're talking about with
tariffs, is there has been anarrative a green market report,
in an article talking about thetariffs, said that experts warn
that cannabis companies facedifficult choices about
absorbing or passing alongtariff related price increases.
(09:50):
I was like what?
That is absurd.
How is it a difficult choice?
How do we just talk aboutabsorbing costs endlessly, like
we are not.
This is not a charity.
This is not like the SNAPprogram of cannabis, where we
are just choosing to subsidizeproduct manufacturing to get to
(10:12):
market.
So I will pause, but like thisis enough, like I want companies
to be healthy and be able toexist into the future.
And that means that if a costis too much to bear, if the cost
of your can is now 25% higherthan it was yesterday, you need
to think about what that doesultimately to your costs all the
(10:33):
way through the supply chainand adjust accordingly.
Otherwise, you will cease toexist as a company.
Ben Larson (10:39):
One would think, but there's still.
I mean I think I saw a numberwhere it's like 25, only 25% of
the company 26 yeah, 26 isn'tcannabis are profitable.
So that means that you're wrong, that 74 of the companies are
not profitable and and are athreat of ceasing to exist right
(11:02):
already okay, so they justhaven't ceased to exist yet, but
they're on.
I mean, how many quarters go bywhere we hear about these MSOs
that are, with the exception ofGTI, are just losing money?
You're right, hand over fistand they continue to exist.
AnnaRae Grabstein (11:17):
They continue to exist Well.
So I know that the companiesthat I admire, respect, want to
work with and help are the onesthat are actually creating
businesses that are sustainable,which means that they're going
to be able to support theirmarket into the future.
They're going to be able tosupport their operations into
the future.
They're going to be able toreturn capital to the cost we
(11:52):
are just in for long term pain.
Ben Larson (11:57):
And so the interesting thing about this
right is, like, the area wherewe see price compression the
most is on flour and vapes.
Yeah, that's true, and and alot of those ingredients are
localized well.
Vapes you have all the hardware.
I guess that overseas I'm notsure what the the cost is in the
cogs of those products it's,it's very high the cost of
(12:19):
hardware compared to the cost ofthe ingredients.
But, I am thinking that with theedibles market, the gummies and
beverages, that a lot of thosematerials actually do come from
overseas.
So you're talking packagingother ingredients, the cans as
you mentioned.
So it'll be interesting.
You have a lot of new companiesstarting up and I think, as
(12:42):
investors evaluate thesecompanies, they're going to look
at the COGS and look at thestability of the COGS.
So, yeah, it's a realconsideration right now.
Yeah, Luckily, the price ofeggs are overshadowing all that.
AnnaRae Grabstein (12:58):
Maybe it's just because I live in Sonoma
County, but I have chickens inyour yard.
I don't have chickens in myyard, but I clearly have enough
chickens in the community, likeI have not had a problem getting
eggs I said it's going up 41,which is not it's.
It's not the experience that I'mhaving, but yeah, I'm I'm very
sorry and I like eggs.
That's like a really good,healthy protein source.
(13:20):
We eat a lot of eggs in myhouse.
Um, I think that you know highlevel when we're thinking about
tariffs and cannabis companies.
You're right, you touched on it.
I think it's hardware andpackaging materials, and that
that means that it's a goodopportunity also to just be
thinking about diversificationof supply chains, having
(13:41):
multiple suppliers to be able tomove things around, to deal
with, to deal with, kind of howthe market swings, and that
isn't just as it comes totariffs, but also like
availability of materials.
When we're looking atparticipating in a global market
, things like shipping.
Have you know, we saw thishappen during covid, where
(14:03):
people couldn't get thepackaging materials that they
needed and things got a lot moreexpensive.
So, just as companies arematuring, this is part of it.
But getting back to this ideaof building businesses that are
fundamentally rooted infinancial metrics that make
sense is just not a soapbox thatI'm going to get off of, right?
(14:26):
I?
Ben Larson (14:27):
fully support you.
I'm fortunate enough to besitting in a position where I
can be like yeah, totally, butthat hasn't always been the case
.
AnnaRae Grabstein (14:36):
It's a tough business to get to that point,
sure, and you know, we're bothcoming from the Bay Area, which
is where Silicon Valley is, andthere has long been a history
here of technology companiesburning money.
Quote unquote Growth at allcosts, Growth at all costs,
investing in the early stages oftheir business to reach some
(14:58):
amount of scale that then… leadsto profitability and ownership
of customer and market share.
Early cannabis leaned into thatnarrative and sure, yes, okay.
10 years into the experiment oflegal cannabis, I think that we
(15:18):
have proved that this is moreof a nuts and bolts type
industry that needs to befocused on product level, margin
and profitability.
Ultimately, that doesn't meanthat if you're a brand new
company, that it doesn't makesense to invest in building
market share, to invest ininnovation and constant
(15:40):
reinvestment into a companyTotally support into a company
totally support.
Ben Larson (15:44):
Well, here's the thing, and I've said this before
it's like the whole venturecapital investment in space that
started back in the early teenswas on the premise that we were
going to have actuallegalization and that the market
was going to continue to grow,and it just didn't happen.
We're still sitting in aprogressive state, so to speak,
(16:05):
that many people just didn'thappen, like we're still sitting
in a progressive state, so tospeak, that many people just
don't have access to to legalcannabis.
Yeah, and so this isn't legal.
AnnaRae Grabstein (16:16):
This is not what the populace intended when
they said we want to legalizecannabis so do you think that
federal policy change, if it wasto occur, would bring us back
to a big economic opportunitythat is venture scalable?
Ben Larson (16:31):
Absolutely, absolutely.
And the beverage category tellsme that we see opportunities in
Minnesota and Texas withcertain retailers, even the
Southeast, minnesota and Texas,with certain retailers, even the
Southeast, where there areliquor stores or grocery stores,
saying that THC beverages areaccounting for 15% of their
(16:54):
sales.
And when you start talkingabout 15% of the alcohol market
versus one to 2% of the cannabismarket, literally from where it
is today, 100x growth is notunreasonable and so there is
absolutely opportunity forventure, scalable growth if that
(17:16):
were to occur.
AnnaRae Grabstein (17:18):
They get, obviously with everything that's
going on, I've been reallyimpressed watching the Olipop
story, which isn't a THCbeverage but is definitely in a
beverage category that isemerging.
It's functional, healthier kindof new beverage and I hear you
and I think that's been a coolstory.
Ben Larson (17:39):
And they start a huge wave of prebiotic,
probiotic kind of movement.
And it's everywhere and I thinkit's a great product, healthy
soda.
I think there was just anarticle today about like the
soda is back, it's just in adifferent way.
AnnaRae Grabstein (17:51):
It's back in my fridge.
I've been watching it and it'simportant to, I think, pay
attention to these adjacentsimilar paths that we're seeing
other types of products follow,and to prove your point.
So, anyway, cool.
So tariffs I don't know, we'llsee what happens, but I think
(18:15):
that we're in for a ride on this?
Ben Larson (18:18):
Yeah, not looking forward to it.
Cost of goods going up, adjustyour business models and if
you're an MSO, you should justcontinue to lose money and
refinance.
AnnaRae Grabstein (18:29):
Yeah.
So, speaking of that, we'regoing to talk a little bit about
some of the MSO earnings andyou know there are lots of
people out there that areearnings report Jedis that are
breaking these people, breakingthe reports apart, posting a lot
of analysis.
We're not going to do that, butwe do want to talk about the
(18:52):
three biggest public cannabiscompanies that are all annually
bringing in over a billiondollars of revenue.
So I think it is worth bringingsome light to what's happening.
And those three companies areGreen Thumb Industries,
trueleave and CuraLeaf.
So, just running down, greenThumb Industries is the only
(19:17):
profitable MSO of the group andprofitable in actual net income.
We're not talking aboutadjusted EBITDA or EBITDA or all
of these metrics that you know.
Please make an argument to meof why they actually matter.
But the one that actually to mematters is the one at the
bottom line that says is theremoney left over?
Ben Larson (19:38):
after it all Cash flow positive.
AnnaRae Grabstein (19:40):
Yeah, and so GTI is there and they are very
much differentiated from theirpeers that look very different.
Cureleaf just reached a prettywild, staggering milestone of
reaching $1 billion of net lossfor the past five years Negative
(20:01):
milestone Negative milestoneStaggering Wow.
Negative milestone, negativemilestone staggering.
In 2024, their loss was 216million on a full year of 1.3
billion dollars of revenue,which was slightly down from
2023, truly similarly had a 155million dollar net loss on $1.2
(20:27):
billion of revenue.
Ben Larson (20:29):
Does that include the $72 million that they
invested in lobbying?
AnnaRae Grabstein (20:34):
Yeah, good question, but interestingly,
Trulieve is still celebrating a62% gross margin while also
posting $155 million of net loss.
So these are interesting waysof spinning financial results to
remind you what a gross marginis.
That would be the margin fromyour revenue minus your cost of
(20:57):
goods before your corporateexpenses.
So there's things All yoursalaries and all that kind of
stuff.
Yeah your marketing and officerent and things like that.
So they're saying that they'redoing a great job.
With the 62% gross margin,that's solid.
Yeah to me seeing that lossstill says that there's
something going on here.
(21:17):
And then, another thing topoint out that separates Green
Thumb from the rest of the groupis that Green Thumb is also
paying their federal taxes,their 280e taxes, whereas the
other peers in the MSO group arechoosing to take a position
that they do not need to paytheir 280e liabilities.
(21:38):
And collectively across the MSOgroup, those 280e liabilities
are over a billion dollars atthis point.
Ben Larson (21:48):
Okay, look, folks, I've had a lot of conversations
on the Hill about 280.
There isn't going to be anyrelief.
So if you're not paying yourtaxes, you're going to have a
big bill to the federalgovernment.
I would like to be proven wrong, but this is just a bad bet.
AnnaRae Grabstein (22:12):
And so there was, for a lot of the last two
years, this belief that therewas going to be a fast path to
rescheduling and that thebiggest benefit to the industry
would be the 280E would go away,and so people stopped paying
their 280e taxes, if that wasdefensible.
During that time, when peoplethought oh, it's months away.
Do you think that wasdefensible at that point?
Ben Larson (22:37):
No, it was hopeful thinking.
The government is not justgoing to say, oh yeah, you can
have it.
AnnaRae Grabstein (22:45):
So people are like smoking the hopium over
here yeah.
They need to get off the hopium.
What will the government do?
I don't know.
Ben Larson (22:58):
What are they doing now?
What are they not doing now?
Why not?
They would enforce it againstme if I personally, if I owe
that much money my understandingis that that doge is, you know,
eliminating half of the irsright well, so just how long
does this go on?
AnnaRae Grabstein (23:18):
but I'm with you, I think that.
Uh, back to what we weretalking about as it relates to
tariffs.
This concept of just not payingtaxes is another piece.
It's like we need to be runningbusinesses that, at the end of
the day, like when they paytheir bills, are still working.
Ben Larson (23:35):
The rubber's going to meet the road is when this
all does, hopefully somedayachieve clarity, and we are in a
legal industry and theshareholders, especially for
these publicly traded companies,will be the ones speaking with
their dollars, and you're goingto be hard pressed to find new
shareholders that want to putmoney into a company that owes
(23:55):
the federal government a billiondollars.
AnnaRae Grabstein (23:57):
Yeah, yes, it's, it's crazy outlandish.
Yeah.
Ben Larson (24:03):
Although this whole.
AnnaRae Grabstein (24:04):
So can we just talk for a minute about
doge and before we get?
Ben Larson (24:09):
there if you disagree with what we're talking
about.
If you have a goodjustification as to why you're
running up the gap, please comeon the show.
AnnaRae Grabstein (24:16):
We would love to talk about it.
Totally, yes, you don't payyour taxes.
We want to.
We want to know why.
Um, I I would like someone totell me why I don't have to pay
my taxes.
That would be amazing, yeah,well, so I guess there's a
couple more things, but before Italk about Doge, there is some.
(24:40):
There's some separation amongstthe MSOs too about the
perspectives on federal policychange coming from the new
administration, and the earningsreports are good times to hear
from CEOs of these companieskind of ways that they are
looking at the overallmarketplace and their go-forward
plans, and so sometimes we gettidbits.
(25:00):
And so Kim Rivers, the CEO ofTrulieve.
She says we remain optimisticthat the Trump administration
will work to address inequitiesfor state legal operators,
including access to banking,expanded research and normalized
tax rates.
I can see why Kim Rivers wouldsay this.
Trump supported Amendment 3 inFlorida.
(25:22):
Trump reportedly met with herduring that campaign.
She is coming from a place,clearly, of hoping, of smoking
the hopium.
She's wanting to remainoptimistic that the Trump
administration is going to enactpolicy that is reflective of
Trump's positions on leading up,like throughout his campaign.
Ben Larson (25:47):
Yeah, yeah, I mean we're positive on canvas.
It was September, October wherehe did say he supported, you
know, access to banking andlegalization in general.
So is he worth his work?
That's not for me to say.
AnnaRae Grabstein (26:03):
Um, say that I'm not in a place of believing
that solidly that there is nohope for federal policy change
under this new administration.
My perspective is more that thepriority of paying attention to
cannabis is not high on thelist compared to the priorities
(26:24):
that the Trump administration ischoosing to focus on in the
last few weeks Things likeimmigration and tariffs and
things like that.
Ben Larson (26:32):
Yeah, I love.
I'm an entrepreneur, I'moptimistic.
Our job right now as anindustry is to operate in the
current paradigm.
Sure Right and let be whathappens, but do all the scenario
planning.
Sure Right and let be whathappens, but do all the scenario
planning.
Sure Success plan, you know,plan for legalization and what
happens under that scenario, butalso plan for the status quo
(26:55):
for the next decade.
AnnaRae Grabstein (26:57):
Yeah, yeah, absolutely Well, which leads us
to the quote from Ben Kovler,who says differently than Kim
Rivers.
He says at the moment it's hardto think anything will
fundamentally change, given thenew administration's appointees,
who seem to be descendants ofthe Just Say no campaign of the
80s and early 90s.
Ben Larson (27:18):
So Kovler is, so he's a success.
AnnaRae Grabstein (27:19):
If he's like Scrooge McDuck in his current
scenario, yeah, I mean, I thinkwhat Kovler is saying is that
we're going to plan for nochange.
If change happens, great, butwe are going to build a business
that can stand on its own withthe current challenges.
And I mean I think that, ifyou've been listening to this
(27:41):
conversation for the past fewminutes, that's what we've also
said as it relates to thingslike tariffs, like we need to
not be in denial about thethings that we can't control,
which is Trump's actions onpolicy, and just make sure that
we can control the things thatare in front of us, like our own
businesses and our owndecisions Absolutely that affect
our businesses.
So, yeah, okay, well, can Irant about Doge for a minute,
(28:09):
because I have this idea that Ithink you guys think might be
kind of funny, as I waslistening and reading about some
of the things that's been goingon in the federal government, I
had this hilarious idea or Ithought it was hilarious to make
DOSI the Department of CannabisEfficiency to
(28:30):
go into all of these companiesthat are bleeding money, and I
would like to hire many21-year-olds and give them
chainsaws and we will just go inand we will tear your cannabis
company apart for you.
If you need us to, that wouldbe awesome.
(28:50):
I'm being a little sarcastic,but at the same time, um, as I
was reading these earningsreports, I couldn't help but
think that there's some majorchange that needs to happen.
And while, uh, I have beenwatching with some shock and
shock and disgust at some of thefast things that the Doge group
(29:10):
has been doing at the federalgovernment, it occurs to me that
there might need to be some bigchanges ahead for these MSOs,
given their financial positions.
Ben Larson (29:26):
yeah, I mean, it's it.
There's just a lot of toughpositions out there and what we
see across a lot of the episodes, it's just there was a lot of
mergers and acquisitions, not alot of integration, and so you
just have these beasts ofcompanies with a lot of
inefficiency, and it's a big job, and I don't know if we have
the right people in thosecompanies to, like now, accept
that we might be on thisprolonged path.
(29:47):
We're like, all right, youactually got to step up and do
the work, but there's not goingto be some savior that comes up
nowhere to save all thesecompanies.
AnnaRae Grabstein (29:56):
Or maybe it's my new Doce business.
Ben Larson (29:58):
Maybe it's Doce.
AnnaRae Grabstein (29:59):
It's Doce.
So you know, get in touch withme if you would like to fund my
Doce startup, or if you're achainsaw company, you can
sponsor us Chainsaw Well.
So what are these MSOs doing?
That isn't cutting expenses,but that is looking into the
(30:22):
future.
They're launching into hempbeverages.
Ben Larson (30:24):
They're doing a little bit of that, truly being
the most recent announcement wesaw that GTI, with their
acquisition of Senorita throughAgrify Curaleaf, has been in it
for a while already right, yeah,who else?
Public MSOs yeah, or you cankind of go a layer departed and
(30:48):
look at like Canopy Growth andJuana and you know brands like
that.
AnnaRae Grabstein (30:54):
And we already know Boston Beer is in
Canada but they haven't launchedinto the US.
Ben Larson (30:58):
But it seems like they're whispered yeah
absolutely.
Yeah, I mean everybody'slooking at it right.
AnnaRae Grabstein (31:04):
Well, so why do you think MSOs are so
aggressively entering the HEMspace?
Ben Larson (31:09):
I think it's a hedge .
I mean, you know it's a safehedge right, Especially with
beverage, because it's notcompetitive with their current
portfolio products and brands.
Yeah, the interesting thing isthat they are going into a heavy
brand space.
We can talk about the dynamicsof this, but they're entering in
(31:30):
beverage, which is all aboutbrand.
But MSOs are good at somethingelse.
They're good at limited licenseretail, vertical integration.
So I'm not really sure how thatall tracks, but I do see the
hedge and it's defensible forthem, because what we've always
said in the beverage category islike these low-dose beverages
don't really sell in thedispensaries.
(31:51):
Yeah, they sell great inmainstream retail.
And so it's like, if you canhave the opportunity to kind of
go out, build distribution,build brand residence and and
hope someday that you are ableto connect the two, but in the
end hopefully build a profitableside of a business.
AnnaRae Grabstein (32:13):
Yeah, well, I guess I would answer my own
question, too, of that.
Msos have to be looking at hempbecause they have to be looking
at how to increase their totaladdressable market and there are
only so many states they canparticipate in as legal cannabis
operators, and some of thosestates are better than others
and we've seen thisreconciliation of the markets
(32:35):
that the MSOs play in.
There have been a divestitureout of some of the more mature
price compressed markets whereverticalization isn't as
realistic, like Colorado andCalifornia, like MSOs have left,
and so now they're in themarkets that are the good
markets.
They're in Florida, new Jerseyand Ohio and you know different
(32:57):
markets where they can beprofitable and make money, and
then after that it's like well,where else can we go?
What else can we do?
And hemp is in a whole lot ofother markets that they can't be
in otherwise.
So I think it totally makessense.
It took them longer than Iexpected.
To be honest, I've beenthinking that they would be
launching into the space a lotfaster.
Ben Larson (33:19):
It makes sense from a decision-making matrix
perspective, but competitively Idon't know how much sense it
makes, because I look at someonelike Kiva, who we've seen, you
know, dominate in in regulatedcannabis and continues to do so
launch a hemp effort to addressthese States that they can't
(33:40):
access through the legal marketsand they're solely focused on
product and brand.
That's all they do every day.
Same with Keef to focus onbeverage Keef in more than 10
states, I believe.
On the regulated side, they'vealso launched a line of
beverages to address the marketsthat they can access.
(34:00):
So these are people that knowthe business and I have a hard
time believing that and prove mewrong, but, like these, MSOs
are going to have a hard timecompeting against these people
that this is all they do everyday.
AnnaRae Grabstein (34:18):
I think that they're going to have to build a
talent base for it, because Ithink what you're talking about
is that you're right thatultimately you know if the
product, once it's in someone'shouse, is a cannabinoid product.
So that's like why it makessense for them to look at the
space.
But the other elements to it interms of like how the products
get to market, how consumers buythem, it's a whole new business
(34:39):
, right?
People are using existingdistribution channels and hemp
via through alcohol and beerdistributors, or they're using
direct to consumer channels,both, which are not channels
that anybody who's beenoperating companies that are
bringing the same brands intoboth markets and, like you
mentioned, keefe and UncleArnie's is an example.
Keeva is another one of thegroups that are bringing the
(35:16):
same brand into just a broadermarket and that to me seems
simpler and more consistent.
And then they've created abrand story.
They have a whole lot offollowers, maybe on different
platforms.
People know what those brandsare and now they can just get
them in more places.
But actually the examples thatwe're leaning on of these MSOs
(35:40):
coming into hemp, it's alldifferent brands than the brands
that they have been investingin and bringing into market.
Ben Larson (35:47):
With the exception, of course, gti who, through a
separate entity, acquired abrand that was already doing it.
The founders of that brand arevery seasoned beverage
entrepreneurs and, right in linewith that, I remember seeing
GTI posts that they were hiringfive beverage professionals.
So they were hiring, like fivebeverage professionals.
So, like they were being, youknow, it's like not a surprise
(36:10):
again because, like Ben knowswhat he's doing Just focusing on
really launching a truebeverage effort.
Honestly, I haven't talkedabout strategy with the other
MSOs so I can't say whetherthey're doing this or not, but
if they aren't, guys, if you'relistening do it, you need good
talent.
AnnaRae Grabstein (36:30):
No, I did.
Actually, at Canada DataCon Imet a gentleman who was just
recently hired to be in seniorleadership on the hemp side at
Curaleaf, who comes from a longbackground in alcohol theft, and
so there is absolutely newtalent that comes from
traditional alcohol and CPGcoming in to lead this effort in
(36:52):
hemp, at least in small numbers.
I've met some of these people.
Ben Larson (36:57):
Yeah, here's the thing we're actually pretty
close to this, I think Is thatonce you reach a certain class
of distributor in the beveragegame and we're getting up there
as far as the qualitydistributors, the breadth of
them, the size of the business,that will attract the bigger
brands in from the outside andthat will be a whole new level
(37:20):
of competition that none of usare really used to competing
with.
AnnaRae Grabstein (37:24):
Say more about bigger brands.
Ben Larson (37:25):
You mean like existing brands that don't have
I mean the constellations of theworld, the boston beers you
mentioned.
You know it's like all thefriends of the total wines, you
know, like I know, a lot ofbrands are really excited about
being a total wine.
Right now.
It's like now.
I hope you cement thoserelationships, I hope you get
the traction because if themomentum keeps up, the pressure
(37:52):
is going to start flooding infrom the outside and they will
have to make that decision Do webuild or buy?
And in many cases they'll lookat how much has been spent and
you'll have to decide if youwant to sell really quickly, but
yeah, it's going to be a bigdisparity.
AnnaRae Grabstein (38:10):
When you're talking about big brands I don't
know if we've talked about this.
I'm curious of what you thinkin terms of existing brands that
are well-positioned in alcoholor even non-alcohol brands that
are well positioned in alcoholor or even non-alcoholic.
What do you think about addingTHC into those existing brands
lineup of products, or do youthink that that is problematic
(38:32):
and that people aren't going tobe doing that?
Ben Larson (38:34):
I mean, you see, you see so much today, like, like
how many brands are launchingalcohol products Like you never
thought they would like Sunny D.
Oh, I didn't know, know, youdidn't know that.
Oh yeah, sunny d has aridiculous um.
You know coca-cola did the jackdaniels like collab right, yeah
so I don't think it's a farstretch of the imagination.
(38:56):
I think there's a lot of um,very professional non-alcohol
out there that are poised toenter the business.
But it really doesn't matter,because right now it's all about
distribution and retail space.
Unless you have a DTC brandlike Reeds right, which many of
(39:18):
these products are splittingbetween the two.
A lot of them are half BTC,half retail.
But yeah, when you come in witha relationship and you can open
up $2,700 overnight, I thinkthat'll be the big
differentiator and that's whatthese alcohol brands have.
AnnaRae Grabstein (39:36):
Yeah, okay.
Well, shall we talk about maybethe biggest hemp market in the
country, since we're talkingabout hemp, and what the heck is
going on in Texas?
Ben Larson (39:49):
Yeah, all this momentum I was just talking
about it's not guaranteed.
I'll say that much becauseTexas is seeking to ban this
proliferating hemp market andsome have postulated that it is
a $4 billion market.
In Texas alone, $7 billion,even $7 billion.
AnnaRae Grabstein (40:11):
Yeah, there's a lot of numbers being thrown
out there, but this ispotentially the biggest
cannabinoid market in thecountry.
What's happening in Texas, andso, yeah, sb3,.
Ben Larson (40:22):
Senate Bill 3.
Senate Bill 3, brought by theLieutenant Governor, dan Patrick
.
AnnaRae Grabstein (40:28):
Dan Patrick, it's a prohibition, but it's not
the only bill that has beenintroduced in Texas.
There's a lot of other billsthat are touching on this.
There's a bill to expand theexisting medical program.
There's a bill to introduceregulations for hemp products.
Why is it that SB3 is what istaking all the oxygen?
(40:51):
Well because it is a ban.
Ben Larson (40:53):
It basically would eliminate the 7,000 plus hemp
outlets that have been createdthroughout the state.
The CUP, the regulated side ofthe business, is highly
restrictive.
That's why we have these otherbills to expand access to that.
But, like right now, there'sthree licensees and it's very
hard to get good product and sothere's this huge disparity.
(41:16):
And, at the end of the day, weknow prohibition doesn't work.
And if you suddenly ban allthese products, there's good
reasons for it.
If anyone listening to thetestimonies of the Senate
hearings, there's good reason,good reason for banning.
Sure, it's like the industryhasn't helped itself in a lot of
(41:37):
cases.
Right, and I'll say thatbroadly.
When we focus on the beveragecategory, there's a certain
reason.
We feel confident that it's a.
It's a good meeting spotbecause of the low dose, uh,
nature of it, the way you cantitrate it.
But this is, this is hemp rootlarch.
So this is faves, this isflowers gummies000 milligram
(42:01):
gummies.
I don't know if that's anactual number, but you know it's
like you hear these crazystories.
Anyways, you rip all that outand you people will find another
way, but you'll also be takingaway medicine, like the good
products that people areconsuming for, like veterans,
but it's just a mess out thereright now, and so it's such an
(42:24):
interesting dynamic because amess down there right now.
It's such an interestingdynamic because a ban has
previously been brought.
The legislative session comesevery two years in Texas Two
years ago this was brought bythe House.
I was just talking about thisbill sitting in the Senate right
now.
Last time it was brought to theHouse in a cask with flying
colors.
It actually died in the Senateat the hands of Dan Patrick
(42:47):
because he didn't get what hewanted from a different bill,
and so now it's back, introducedby Dan Patrick, coming to the
Senate and largely probably withflying colors, and the big
question is what happens in theHouse?
And anyone that follows Texaspolitics which I never used to,
but now I do the one thing DanPatrick doesn't have control of
(43:09):
is the House, and there is thepotential that the House itself
has flipped on this issue.
So the big question is whathappens when the bill gets
passed in the House and that canbe debated, and I hear a lot of
things coming out of DanPatrick's office from both sides
and yeah, it's anybody's gameat this point.
But the interesting dynamichere, as it pertains especially
(43:35):
to our audiences if that billdoes get killed, there will have
to be an alternative bill thatgets presented, because
otherwise it's status quo forthe next two years.
Now, there's some people thatlove that, but generally I think
it's untenable.
I don't think anyone actually,at least on the political side,
(43:57):
wants that to happen.
So what's the alternative?
And this is what starts tocause the quarrel between the
broader hemp industry and thoseof us that are a little bit more
focused on the beveragecategory.
AnnaRae Grabstein (44:10):
Sure Well, as someone that's sitting on the
outside of it looking in becauseI don't have business interests
in Texas specifically I thinkthat… I think we all have
business interests in Texas.
Ben Larson (44:21):
I mean, we all have this interest in Texas.
It's a massive bellwether forwhat we will see.
AnnaRae Grabstein (44:28):
I guess I hear you that something does
need to happen, and I havealways believed in public safety
and regulation as a key kind ofa foundational aspect to being
able to build a real industrythat we can all depend on and
that consumers can feelconfident in and businesses can
(44:51):
kind of stand on the shouldersof in order to plan for the
future.
So, yes, I hear you that, ifthe ban doesn't move forward,
that there still needs to besomething that happens in Texas,
because there is no safetymeasures on the books right now
that are protecting consumers.
And, at the same time, withinall new legal constructs, there
(45:16):
becomes a question aboutenforceability and enforcement
priorities, and that issomething that I've been
thinking about in relation tothis of like, okay, if this ban
passes, what is Texas going todo?
It's like there's apparently50,000 people employed working
in this space in Texas.
There's all of this economicactivity that we already
(45:37):
mentioned.
Like that doesn't just go awayovernight.
What are we doing?
Are we talking aboutcriminalizing people?
Are we going to basically forcea illicit market overnight?
This is wild, and even ifthere's becomes a more what I
(45:59):
would call like sensibleregulatory pathway of maybe just
creating new safety standardsand keeping some products in the
market.
There are going to be losers inthis because, like you said,
there are groups and companiesthat have taken it to an extreme
and have put products in themarket that very if they're just
very likely will not be able toto withstand any type of
(46:21):
oversight.
They're just very likely willnot be able to withstand any
type of oversight, be that sometype of inhalable product or
product with questionableingredients or potencies or
whatever.
It is no testing Like.
What does that look like?
Ben Larson (46:37):
Yeah, it depends who you ask, right?
Because if you ask a politicianor someone on, say, the CUP
side and I'm not speaking foranyone in particular, but
they're probably perfectly finewith being like it's too out of
control, we're just going to banit and then maybe two years
down the road or four years,because it's Texas then we can
(47:02):
rebuild into it with what we'recomfortable with.
That's what's happening inCalifornia, right?
AnnaRae Grabstein (47:09):
But California has a vibrant quote,
unquote like adult use.
Vibrant, wow, that's what theywould tell you is that there is
like plenty of access for peoplethat want cannabis at legal
dispensaries.
That is not the case in Texas,like there is a basically failed
(47:30):
medical system that only has20,000 people or something that
are registered patients into it.
So there is no access.
But people are consumingcannabinoids broadly that
they're accessing through thehemp channel.
Ben Larson (47:44):
I mean, this is why bans are so stupid.
Like people now understand thatthey like these products and
they want these products, and soas soon as you have a ban on
retail, they're just going tothe USPS, as it already is, is
just going to be the biggestdrug dealer in Texas, right yeah
, and everyone's going to go DTC, and everyone's going to go DTC
.
And unless you put peopleripping apart packages in the
(48:05):
post offices, there's going tobe really no way to stop it well
, we're very much in the middleof this, folks.
AnnaRae Grabstein (48:12):
The Texas legislative session we looked it
up, it's 140 days 5-ish monthsfrom January so we're going to
keep talking about this and thefallout of whatever happens is
going to be real in some ways,like, no matter what you're
right, this touches everyone incannabis in some way and you
(48:35):
know, I will say that in termsof like, what my hopes are is
that my hopes is that there isparallel pathways going on in
Texas, that both they arelooking at their existing
medical program and expanding it.
It needs expansion.
That means that more types ofqualifiers to be a patient, more
(48:56):
types of access, broadenedperspective about form factors,
like all kinds of things.
Open up that medical programand create sensible regulations
that put consumer safety at theforefront for hemp products that
are in market and do not shutdown an industry without clear
(49:20):
off-ramp to create access whenthere is already demand, because
that is going to haveunintended consequences of
bolstering the wrong players inthe market it strengthens the
illicit market and the badplayers, because the good
players are going to like oh,I'm going to follow the rules,
so the only products that willbe available will be the worst
(49:41):
ones and I just we just can't.
It's enough already Like we'velearned our lesson.
Let's stop making the samemistakes.
So please, happily, dan Patrick, do you want to come on and
have a conversation with usabout this?
That'd be incredible, alright.
So how are we doing?
Ben Larson (50:02):
I think we're close to the top of the list, yeah
this is what we were going totalk about.
AnnaRae Grabstein (50:05):
huh, just looking through the list Yep,
that's it.
There's so much more news outthere.
Folks Like we really are tryingto just figure out what is most
important to talk about.
So if there's something that wemissed and what's most
interesting to us and what'smost?
yes, totally, but follow someother people that are putting
really great news out there.
The folks at Cultivated aredoing a great job.
(50:27):
Follow them.
Green Market Report continuesto be an excellent source,
marijuana Moment and MarijuanaMoment and then follow other
people that are just smart andhave other things to say.
Ben Larson (50:40):
Yeah, because we support all of them, not just
the loudest ones on LinkedIn.
No, some of them are cool too.
AnnaRae Grabstein (50:44):
Yeah, they are cool.
Yeah, this has been really,really good and I hope that this
felt like some sort of supportgroup for those that are looking
to decipher the informationwhile also trying to get some
perspective on it.
Ben Larson (50:59):
It's been another Cannabis Business News Roundup.
Thank you for liking,subscribing, doing all things
sharing it, thank you to ourteams after tosa here and
wolfmeyer, and thank you to youuh, next week, yeah, next week,
oh uh, we are having on umhippie water, hippie water,
(51:19):
hippie water.
AnnaRae Grabstein (51:20):
We're to talk about building from the ground
up, so tune in for that.
It should be fun.
All right, as always.
Ben Larson (51:28):
As always, yeah, go ahead, hit us out.
AnnaRae Grabstein (51:31):
Stay curious, stay informed and keep your
spirits high.
Ben Larson (51:36):
Until next time.
That's the show.
AnnaRae Grabstein (51:38):
That's the show.
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friends and sponsor over atKitPrint, the cannabis operators
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Ben Larson (00:53):
Hey everybody, welcome to episode 78 of High
Spirits.
I'm Ben Larson and with me, asalways, is Anna Rae Grabstein as
always, zanna Rae Grabstein.
It's Thursday, march 6th 2025,and we're doing a Cannabis
Business News Roundup, which isour guest-free show where we
(01:14):
cover the news.
AnnaRae Grabstein (01:15):
And hi everybody, so good to be with
you today.
You know these news roundupsare a labor of love for us.
We put a lot of effort intotrying to figure out what
matters most, and one thing thatI have been really aware of is
that the pace of news is movingso fast recently that it has
been hard for me to keep up.
As I have been trying to createcontent.
(01:37):
By the time I make that content, the news is almost changing.
Ben Larson (01:41):
Yeah Well, it's also complicated more complicated
these days because I feel likewe're spanning two industries
yeah, we absolutely are it usedto be just cannabis, regulated
cannabis dues?
That was really top of mind forme.
But now, straddling both, it'slike you're jumping from one
world to the next and there'sthis like sliver in between,
(02:01):
where they do overlap.
AnnaRae Grabstein (02:03):
Well, let's be real.
I mean, any industry is part of, like, the broader global
economic environment as well.
So we're talking about alltypes of things that are going
on, be it in politics and ininternational relations, and
this is a supply chain business,and so we touch on everything
from hard goods to, you know,marketing and media I mean, we
(02:28):
actually have to talk aboutpolitics today.
It's going to be inevitable?
Yeah, totally, but I'm I'mstoked to be here.
We're trying to do this monthlyso that we um get in person to
do a recording together and umalso make sure that we're
bringing the most importantstories to the front of your
(02:49):
minds and into conversation.
Before we get started, anythingyou want to share that's been
going on in your world.
Ben Larson (02:57):
Oh man, you know I I had a period of time where I
was traveling a lot or just feltout of the office.
I was sick, I was in Colorado,miami, took family to Maui and
ever since coming back from allthat, I've really enjoyed being
home.
So I'm trying to say no to alot.
I said no to a trip to DC, Isaid no to LA this week and it
(03:25):
feels really good.
I actually love working on thebusiness.
It's important for me to be upand out, be out there, but yeah.
I'm in a period of time whereI'm just really focused on
making sure that the business isset up for success in 2021.
AnnaRae Grabstein (03:42):
Nice, that's awesome.
I don't relate at all.
I feel like I've been in thistravel decision-making purgatory
where I have like an event onSaturday and a thing.
I might do in two weeks in Vegasand I haven't booked anything
and I'm on the fence with awhole bunch of people and then
late at night I'm like or maybeI should just go with my family
(04:04):
to like a hot spring and notthink about any of it.
So I like what you're doing.
I need to either get to a yesor get to a no.
That purgatory place of plansis tough, but I am in a good
place overall, though.
I think that, within thecontext of the world moving so
fast, I know a lot of people arestruggling of just how to keep
(04:27):
up and how to manage and whatthis means for our business and
our work and our families, and Iam doing a really good job of
staying grounded in it all andfiguring out what matters most
to me and the work that I'mdoing and what I need to be
paying attention to.
So I'm feeling positive aboutthe way that I'm showing up in
(04:48):
my world.
Ben Larson (04:50):
Very glad to hear that.
Yeah, it's hard, it's constantand we're in the middle of a
legislative session which bringsyou a little bit closer to the
business.
Yep, there's a lot happening inTexas, illinois and Florida.
It's just nonstop.
I feel like a pinball,sometimes just bouncing around
with a conversation in the next.
AnnaRae Grabstein (05:11):
Yeah, and I think it's important to
acknowledge that, if people arefeeling that way, that there's a
lot of us out there that arejust trying to keep up, and that
difference between working inyour business, on your business
and balancing everything that'sgoing on outside is really a lot
.
So lean on our community andour advisors and our mentors and
(05:32):
all those things to keep usstrong and level-headed.
So what are we going to talkabout today?
Ben Larson (05:40):
Where do we start?
AnnaRae Grabstein (05:41):
We've got some key stuff, but let's jump
in talking about tariffs.
Ben Larson (05:45):
Tariffs.
Oh, jump straight into thepolitics, jump right in.
All right, great.
AnnaRae Grabstein (05:50):
So, like we just said, cannabinoids are at
their core supply chainbusinesses, and the Trump
(06:11):
administration has announcedthat it is imposing a 25 percent
tariffs on imports from Canadaand Mexico and a 10 percent
tariff on goods from China, andthat these measures are intended
to address national securityconcerns around drug trafficking
, which I think is particularlyinteresting since we are in a
drug policy, adjacent andrelated industry.
Specifically, fentanyl is whatthey're talking about.
(06:32):
The concept is that fentanyl iscoming in for Mexico and Canada
, I guess Alongside, like othergoods.
Yeah, and as I was driving heretoday, I did hear that the
Mexico tariffs were justannounced to be postponed for
one month.
It is confusing how much thesetariffs are actually planned to
(06:55):
occur or if they're being usedas bargaining chips.
But if we were to just assumethat these tariffs are what is
happening, I think that thebroader conversation for us to
have is about how does thisaffect our industry and the
businesses that are workinginside of it.
Ben Larson (07:12):
Yeah, well, it's interesting.
I won't talk too much about theadministration, but the whole
concept was like, oh, we'regoing to stick it to these other
countries, but the only thing Isee it doing is hurting the
consumer in the business uh, inthe us, yeah, and thinking about
our business in cannabis.
In general, we always have thistheme of of precipitously
(07:35):
dropping prices.
Where I'm an ingredientscompany, I I source from other
ingredient companies and it'snot uncommon for me to get
letters about increasing pricesand so like are we going to
enter a phase where we areallowed and for any of my
customers listening, don't worry, we're not yet but are we
(07:58):
allowed to increase our prices?
Because that hasn'thistorically been the case.
AnnaRae Grabstein (08:03):
Well allowed.
There's nobody telling you howto price your products, but what
I will say is that the cannabismarket in some places has
reacted what I believe to bevery irrationally to oversupply.
That has created the situationthat we're in today of so many
(08:39):
businesses struggling aninventory that companies were
holding.
That inventory started to getreally desperate for cash and
started selling product into themarket for less than the cost
of producing it, and that wasshort-term cash need desperation
as opposed to focusing onbusiness fundamentals the need
(09:00):
to create a market that'shealthy and has long-term
sustainability for businesses.
And what happened?
There were fast followers thatsaid, well, we need cash too,
and so now we're also going tosell our product for less than
it costs to create it.
And a domino effect hasoccurred that the whole market
has suffered and thosecompressed, irrational prices at
wholesale translated to cheapprices for consumers retail all
(09:27):
the way through the supply chain.
And then now, bringing it backto what we're talking about with
tariffs, is there has been anarrative a green market report,
in an article talking about thetariffs, said that experts warn
that cannabis companies facedifficult choices about
absorbing or passing alongtariff related price increases.
(09:50):
I was like what?
That is absurd.
How is it a difficult choice?
How do we just talk aboutabsorbing costs endlessly, like
we are not.
This is not a charity.
This is not like the SNAPprogram of cannabis, where we
are just choosing to subsidizeproduct manufacturing to get to
(10:12):
market.
So I will pause, but like thisis enough, like I want companies
to be healthy and be able toexist into the future.
And that means that if a costis too much to bear, if the cost
of your can is now 25% higherthan it was yesterday, you need
to think about what that doesultimately to your costs all the
(10:33):
way through the supply chainand adjust accordingly.
Otherwise, you will cease toexist as a company.
Ben Larson (10:39):
One would think, but there's still.
I mean I think I saw a numberwhere it's like 25, only 25% of
the company 26 yeah, 26 isn'tcannabis are profitable.
So that means that you're wrong, that 74 of the companies are
not profitable and and are athreat of ceasing to exist right
(11:02):
already okay, so they justhaven't ceased to exist yet, but
they're on.
I mean, how many quarters go bywhere we hear about these MSOs
that are, with the exception ofGTI, are just losing money?
You're right, hand over fistand they continue to exist.
AnnaRae Grabstein (11:17):
They continue to exist Well.
So I know that the companiesthat I admire, respect, want to
work with and help are the onesthat are actually creating
businesses that are sustainable,which means that they're going
to be able to support theirmarket into the future.
They're going to be able tosupport their operations into
the future.
They're going to be able toreturn capital to the cost we
(11:52):
are just in for long term pain.
Ben Larson (11:57):
And so the interesting thing about this
right is, like, the area wherewe see price compression the
most is on flour and vapes.
Yeah, that's true, and and alot of those ingredients are
localized well.
Vapes you have all the hardware.
I guess that overseas I'm notsure what the the cost is in the
cogs of those products it's,it's very high the cost of
(12:19):
hardware compared to the cost ofthe ingredients.
But, I am thinking that with theedibles market, the gummies and
beverages, that a lot of thosematerials actually do come from
overseas.
So you're talking packagingother ingredients, the cans as
you mentioned.
So it'll be interesting.
You have a lot of new companiesstarting up and I think, as
(12:42):
investors evaluate thesecompanies, they're going to look
at the COGS and look at thestability of the COGS.
So, yeah, it's a realconsideration right now.
Yeah, Luckily, the price ofeggs are overshadowing all that.
AnnaRae Grabstein (12:58):
Maybe it's just because I live in Sonoma
County, but I have chickens inyour yard.
I don't have chickens in myyard, but I clearly have enough
chickens in the community, likeI have not had a problem getting
eggs I said it's going up 41,which is not it's.
It's not the experience that I'mhaving, but yeah, I'm I'm very
sorry and I like eggs.
That's like a really good,healthy protein source.
(13:20):
We eat a lot of eggs in myhouse.
Um, I think that you know highlevel when we're thinking about
tariffs and cannabis companies.
You're right, you touched on it.
I think it's hardware andpackaging materials, and that
that means that it's a goodopportunity also to just be
thinking about diversificationof supply chains, having
(13:41):
multiple suppliers to be able tomove things around, to deal
with, to deal with, kind of howthe market swings, and that
isn't just as it comes totariffs, but also like
availability of materials.
When we're looking atparticipating in a global market
, things like shipping.
Have you know, we saw thishappen during covid, where
(14:03):
people couldn't get thepackaging materials that they
needed and things got a lot moreexpensive.
So, just as companies arematuring, this is part of it.
But getting back to this ideaof building businesses that are
fundamentally rooted infinancial metrics that make
sense is just not a soapbox thatI'm going to get off of, right?
(14:26):
I?
Ben Larson (14:27):
fully support you.
I'm fortunate enough to besitting in a position where I
can be like yeah, totally, butthat hasn't always been the case
.
AnnaRae Grabstein (14:36):
It's a tough business to get to that point,
sure, and you know, we're bothcoming from the Bay Area, which
is where Silicon Valley is, andthere has long been a history
here of technology companiesburning money.
Quote unquote Growth at allcosts, Growth at all costs,
investing in the early stages oftheir business to reach some
(14:58):
amount of scale that then… leadsto profitability and ownership
of customer and market share.
Early cannabis leaned into thatnarrative and sure, yes, okay.
10 years into the experiment oflegal cannabis, I think that we
(15:18):
have proved that this is moreof a nuts and bolts type
industry that needs to befocused on product level, margin
and profitability.
Ultimately, that doesn't meanthat if you're a brand new
company, that it doesn't makesense to invest in building
market share, to invest ininnovation and constant
(15:40):
reinvestment into a companyTotally support into a company
totally support.
Ben Larson (15:44):
Well, here's the thing, and I've said this before
it's like the whole venturecapital investment in space that
started back in the early teenswas on the premise that we were
going to have actuallegalization and that the market
was going to continue to grow,and it just didn't happen.
We're still sitting in aprogressive state, so to speak,
(16:05):
that many people just didn'thappen, like we're still sitting
in a progressive state, so tospeak, that many people just
don't have access to to legalcannabis.
Yeah, and so this isn't legal.
AnnaRae Grabstein (16:16):
This is not what the populace intended when
they said we want to legalizecannabis so do you think that
federal policy change, if it wasto occur, would bring us back
to a big economic opportunitythat is venture scalable?
Ben Larson (16:31):
Absolutely, absolutely.
And the beverage category tellsme that we see opportunities in
Minnesota and Texas withcertain retailers, even the
Southeast, minnesota and Texas,with certain retailers, even the
Southeast, where there areliquor stores or grocery stores,
saying that THC beverages areaccounting for 15% of their
(16:54):
sales.
And when you start talkingabout 15% of the alcohol market
versus one to 2% of the cannabismarket, literally from where it
is today, 100x growth is notunreasonable and so there is
absolutely opportunity forventure, scalable growth if that
(17:16):
were to occur.
AnnaRae Grabstein (17:18):
They get, obviously with everything that's
going on, I've been reallyimpressed watching the Olipop
story, which isn't a THCbeverage but is definitely in a
beverage category that isemerging.
It's functional, healthier kindof new beverage and I hear you
and I think that's been a coolstory.
Ben Larson (17:39):
And they start a huge wave of prebiotic,
probiotic kind of movement.
And it's everywhere and I thinkit's a great product, healthy
soda.
I think there was just anarticle today about like the
soda is back, it's just in adifferent way.
AnnaRae Grabstein (17:51):
It's back in my fridge.
I've been watching it and it'simportant to, I think, pay
attention to these adjacentsimilar paths that we're seeing
other types of products follow,and to prove your point.
So, anyway, cool.
So tariffs I don't know, we'llsee what happens, but I think
(18:15):
that we're in for a ride on this?
Ben Larson (18:18):
Yeah, not looking forward to it.
Cost of goods going up, adjustyour business models and if
you're an MSO, you should justcontinue to lose money and
refinance.
AnnaRae Grabstein (18:29):
Yeah.
So, speaking of that, we'regoing to talk a little bit about
some of the MSO earnings andyou know there are lots of
people out there that areearnings report Jedis that are
breaking these people, breakingthe reports apart, posting a lot
of analysis.
We're not going to do that, butwe do want to talk about the
(18:52):
three biggest public cannabiscompanies that are all annually
bringing in over a billiondollars of revenue.
So I think it is worth bringingsome light to what's happening.
And those three companies areGreen Thumb Industries,
trueleave and CuraLeaf.
So, just running down, greenThumb Industries is the only
(19:17):
profitable MSO of the group andprofitable in actual net income.
We're not talking aboutadjusted EBITDA or EBITDA or all
of these metrics that you know.
Please make an argument to meof why they actually matter.
But the one that actually to mematters is the one at the
bottom line that says is theremoney left over?
Ben Larson (19:38):
after it all Cash flow positive.
AnnaRae Grabstein (19:40):
Yeah, and so GTI is there and they are very
much differentiated from theirpeers that look very different.
Cureleaf just reached a prettywild, staggering milestone of
reaching $1 billion of net lossfor the past five years Negative
(20:01):
milestone Negative milestoneStaggering Wow.
Negative milestone, negativemilestone staggering.
In 2024, their loss was 216million on a full year of 1.3
billion dollars of revenue,which was slightly down from
2023, truly similarly had a 155million dollar net loss on $1.2
(20:27):
billion of revenue.
Ben Larson (20:29):
Does that include the $72 million that they
invested in lobbying?
AnnaRae Grabstein (20:34):
Yeah, good question, but interestingly,
Trulieve is still celebrating a62% gross margin while also
posting $155 million of net loss.
So these are interesting waysof spinning financial results to
remind you what a gross marginis.
That would be the margin fromyour revenue minus your cost of
(20:57):
goods before your corporateexpenses.
So there's things All yoursalaries and all that kind of
stuff.
Yeah your marketing and officerent and things like that.
So they're saying that they'redoing a great job.
With the 62% gross margin,that's solid.
Yeah to me seeing that lossstill says that there's
something going on here.
(21:17):
And then, another thing topoint out that separates Green
Thumb from the rest of the groupis that Green Thumb is also
paying their federal taxes,their 280e taxes, whereas the
other peers in the MSO group arechoosing to take a position
that they do not need to paytheir 280e liabilities.
(21:38):
And collectively across the MSOgroup, those 280e liabilities
are over a billion dollars atthis point.
Ben Larson (21:48):
Okay, look, folks, I've had a lot of conversations
on the Hill about 280.
There isn't going to be anyrelief.
So if you're not paying yourtaxes, you're going to have a
big bill to the federalgovernment.
I would like to be proven wrong, but this is just a bad bet.
AnnaRae Grabstein (22:12):
And so there was, for a lot of the last two
years, this belief that therewas going to be a fast path to
rescheduling and that thebiggest benefit to the industry
would be the 280E would go away,and so people stopped paying
their 280e taxes, if that wasdefensible.
During that time, when peoplethought oh, it's months away.
Do you think that wasdefensible at that point?
Ben Larson (22:37):
No, it was hopeful thinking.
The government is not justgoing to say, oh yeah, you can
have it.
AnnaRae Grabstein (22:45):
So people are like smoking the hopium over
here yeah.
They need to get off the hopium.
What will the government do?
I don't know.
Ben Larson (22:58):
What are they doing now?
What are they not doing now?
Why not?
They would enforce it againstme if I personally, if I owe
that much money my understandingis that that doge is, you know,
eliminating half of the irsright well, so just how long
does this go on?
AnnaRae Grabstein (23:18):
but I'm with you, I think that.
Uh, back to what we weretalking about as it relates to
tariffs.
This concept of just not payingtaxes is another piece.
It's like we need to be runningbusinesses that, at the end of
the day, like when they paytheir bills, are still working.
Ben Larson (23:35):
The rubber's going to meet the road is when this
all does, hopefully somedayachieve clarity, and we are in a
legal industry and theshareholders, especially for
these publicly traded companies,will be the ones speaking with
their dollars, and you're goingto be hard pressed to find new
shareholders that want to putmoney into a company that owes
(23:55):
the federal government a billiondollars.
AnnaRae Grabstein (23:57):
Yeah, yes, it's, it's crazy outlandish.
Yeah.
Ben Larson (24:03):
Although this whole.
AnnaRae Grabstein (24:04):
So can we just talk for a minute about
doge and before we get?
Ben Larson (24:09):
there if you disagree with what we're talking
about.
If you have a goodjustification as to why you're
running up the gap, please comeon the show.
AnnaRae Grabstein (24:16):
We would love to talk about it.
Totally, yes, you don't payyour taxes.
We want to.
We want to know why.
Um, I I would like someone totell me why I don't have to pay
my taxes.
That would be amazing, yeah,well, so I guess there's a
couple more things, but before Italk about Doge, there is some.
(24:40):
There's some separation amongstthe MSOs too about the
perspectives on federal policychange coming from the new
administration, and the earningsreports are good times to hear
from CEOs of these companieskind of ways that they are
looking at the overallmarketplace and their go-forward
plans, and so sometimes we gettidbits.
(25:00):
And so Kim Rivers, the CEO ofTrulieve.
She says we remain optimisticthat the Trump administration
will work to address inequitiesfor state legal operators,
including access to banking,expanded research and normalized
tax rates.
I can see why Kim Rivers wouldsay this.
Trump supported Amendment 3 inFlorida.
(25:22):
Trump reportedly met with herduring that campaign.
She is coming from a place,clearly, of hoping, of smoking
the hopium.
She's wanting to remainoptimistic that the Trump
administration is going to enactpolicy that is reflective of
Trump's positions on leading up,like throughout his campaign.
Ben Larson (25:47):
Yeah, yeah, I mean we're positive on canvas.
It was September, October wherehe did say he supported, you
know, access to banking andlegalization in general.
So is he worth his work?
That's not for me to say.
AnnaRae Grabstein (26:03):
Um, say that I'm not in a place of believing
that solidly that there is nohope for federal policy change
under this new administration.
My perspective is more that thepriority of paying attention to
cannabis is not high on thelist compared to the priorities
(26:24):
that the Trump administration ischoosing to focus on in the
last few weeks Things likeimmigration and tariffs and
things like that.
Ben Larson (26:32):
Yeah, I love.
I'm an entrepreneur, I'moptimistic.
Our job right now as anindustry is to operate in the
current paradigm.
Sure Right and let be whathappens, but do all the scenario
planning.
Sure Right and let be whathappens, but do all the scenario
planning.
Sure Success plan, you know,plan for legalization and what
happens under that scenario, butalso plan for the status quo
(26:55):
for the next decade.
AnnaRae Grabstein (26:57):
Yeah, yeah, absolutely Well, which leads us
to the quote from Ben Kovler,who says differently than Kim
Rivers.
He says at the moment it's hardto think anything will
fundamentally change, given thenew administration's appointees,
who seem to be descendants ofthe Just Say no campaign of the
80s and early 90s.
Ben Larson (27:18):
So Kovler is, so he's a success.
AnnaRae Grabstein (27:19):
If he's like Scrooge McDuck in his current
scenario, yeah, I mean, I thinkwhat Kovler is saying is that
we're going to plan for nochange.
If change happens, great, butwe are going to build a business
that can stand on its own withthe current challenges.
And I mean I think that, ifyou've been listening to this
(27:41):
conversation for the past fewminutes, that's what we've also
said as it relates to thingslike tariffs, like we need to
not be in denial about thethings that we can't control,
which is Trump's actions onpolicy, and just make sure that
we can control the things thatare in front of us, like our own
businesses and our owndecisions Absolutely that affect
our businesses.
So, yeah, okay, well, can Irant about Doge for a minute,
(28:09):
because I have this idea that Ithink you guys think might be
kind of funny, as I waslistening and reading about some
of the things that's been goingon in the federal government, I
had this hilarious idea or Ithought it was hilarious to make
DOSI the Department of CannabisEfficiency to
(28:30):
go into all of these companiesthat are bleeding money, and I
would like to hire many21-year-olds and give them
chainsaws and we will just go inand we will tear your cannabis
company apart for you.
If you need us to, that wouldbe awesome.
(28:50):
I'm being a little sarcastic,but at the same time, um, as I
was reading these earningsreports, I couldn't help but
think that there's some majorchange that needs to happen.
And while, uh, I have beenwatching with some shock and
shock and disgust at some of thefast things that the Doge group
(29:10):
has been doing at the federalgovernment, it occurs to me that
there might need to be some bigchanges ahead for these MSOs,
given their financial positions.
Ben Larson (29:26):
yeah, I mean, it's it.
There's just a lot of toughpositions out there and what we
see across a lot of the episodes, it's just there was a lot of
mergers and acquisitions, not alot of integration, and so you
just have these beasts ofcompanies with a lot of
inefficiency, and it's a big job, and I don't know if we have
the right people in thosecompanies to, like now, accept
that we might be on thisprolonged path.
(29:47):
We're like, all right, youactually got to step up and do
the work, but there's not goingto be some savior that comes up
nowhere to save all thesecompanies.
AnnaRae Grabstein (29:56):
Or maybe it's my new Doce business.
Ben Larson (29:58):
Maybe it's Doce.
AnnaRae Grabstein (29:59):
It's Doce.
So you know, get in touch withme if you would like to fund my
Doce startup, or if you're achainsaw company, you can
sponsor us Chainsaw Well.
So what are these MSOs doing?
That isn't cutting expenses,but that is looking into the
(30:22):
future.
They're launching into hempbeverages.
Ben Larson (30:24):
They're doing a little bit of that, truly being
the most recent announcement wesaw that GTI, with their
acquisition of Senorita throughAgrify Curaleaf, has been in it
for a while already right, yeah,who else?
Public MSOs yeah, or you cankind of go a layer departed and
(30:48):
look at like Canopy Growth andJuana and you know brands like
that.
AnnaRae Grabstein (30:54):
And we already know Boston Beer is in
Canada but they haven't launchedinto the US.
Ben Larson (30:58):
But it seems like they're whispered yeah
absolutely.
Yeah, I mean everybody'slooking at it right.
AnnaRae Grabstein (31:04):
Well, so why do you think MSOs are so
aggressively entering the HEMspace?
Ben Larson (31:09):
I think it's a hedge .
I mean, you know it's a safehedge right, Especially with
beverage, because it's notcompetitive with their current
portfolio products and brands.
Yeah, the interesting thing isthat they are going into a heavy
brand space.
We can talk about the dynamicsof this, but they're entering in
(31:30):
beverage, which is all aboutbrand.
But MSOs are good at somethingelse.
They're good at limited licenseretail, vertical integration.
So I'm not really sure how thatall tracks, but I do see the
hedge and it's defensible forthem, because what we've always
said in the beverage category islike these low-dose beverages
don't really sell in thedispensaries.
(31:51):
Yeah, they sell great inmainstream retail.
And so it's like, if you canhave the opportunity to kind of
go out, build distribution,build brand residence and and
hope someday that you are ableto connect the two, but in the
end hopefully build a profitableside of a business.
AnnaRae Grabstein (32:13):
Yeah, well, I guess I would answer my own
question, too, of that.
Msos have to be looking at hempbecause they have to be looking
at how to increase their totaladdressable market and there are
only so many states they canparticipate in as legal cannabis
operators, and some of thosestates are better than others
and we've seen thisreconciliation of the markets
(32:35):
that the MSOs play in.
There have been a divestitureout of some of the more mature
price compressed markets whereverticalization isn't as
realistic, like Colorado andCalifornia, like MSOs have left,
and so now they're in themarkets that are the good
markets.
They're in Florida, new Jerseyand Ohio and you know different
(32:57):
markets where they can beprofitable and make money, and
then after that it's like well,where else can we go?
What else can we do?
And hemp is in a whole lot ofother markets that they can't be
in otherwise.
So I think it totally makessense.
It took them longer than Iexpected.
To be honest, I've beenthinking that they would be
launching into the space a lotfaster.
Ben Larson (33:19):
It makes sense from a decision-making matrix
perspective, but competitively Idon't know how much sense it
makes, because I look at someonelike Kiva, who we've seen, you
know, dominate in in regulatedcannabis and continues to do so
launch a hemp effort to addressthese States that they can't
(33:40):
access through the legal marketsand they're solely focused on
product and brand.
That's all they do every day.
Same with Keef to focus onbeverage Keef in more than 10
states, I believe.
On the regulated side, they'vealso launched a line of
beverages to address the marketsthat they can access.
(34:00):
So these are people that knowthe business and I have a hard
time believing that and prove mewrong, but, like these, MSOs
are going to have a hard timecompeting against these people
that this is all they do everyday.
AnnaRae Grabstein (34:18):
I think that they're going to have to build a
talent base for it, because Ithink what you're talking about
is that you're right thatultimately you know if the
product, once it's in someone'shouse, is a cannabinoid product.
So that's like why it makessense for them to look at the
space.
But the other elements to it interms of like how the products
get to market, how consumers buythem, it's a whole new business
(34:39):
, right?
People are using existingdistribution channels and hemp
via through alcohol and beerdistributors, or they're using
direct to consumer channels,both, which are not channels
that anybody who's beenoperating companies that are
bringing the same brands intoboth markets and, like you
mentioned, keefe and UncleArnie's is an example.
Keeva is another one of thegroups that are bringing the
(35:16):
same brand into just a broadermarket and that to me seems
simpler and more consistent.
And then they've created abrand story.
They have a whole lot offollowers, maybe on different
platforms.
People know what those brandsare and now they can just get
them in more places.
But actually the examples thatwe're leaning on of these MSOs
(35:40):
coming into hemp, it's alldifferent brands than the brands
that they have been investingin and bringing into market.
Ben Larson (35:47):
With the exception, of course, gti who, through a
separate entity, acquired abrand that was already doing it.
The founders of that brand arevery seasoned beverage
entrepreneurs and, right in linewith that, I remember seeing
GTI posts that they were hiringfive beverage professionals.
So they were hiring, like fivebeverage professionals.
So, like they were being, youknow, it's like not a surprise
(36:10):
again because, like Ben knowswhat he's doing Just focusing on
really launching a truebeverage effort.
Honestly, I haven't talkedabout strategy with the other
MSOs so I can't say whetherthey're doing this or not, but
if they aren't, guys, if you'relistening do it, you need good
talent.
AnnaRae Grabstein (36:30):
No, I did.
Actually, at Canada DataCon Imet a gentleman who was just
recently hired to be in seniorleadership on the hemp side at
Curaleaf, who comes from a longbackground in alcohol theft, and
so there is absolutely newtalent that comes from
traditional alcohol and CPGcoming in to lead this effort in
(36:52):
hemp, at least in small numbers.
I've met some of these people.
Ben Larson (36:57):
Yeah, here's the thing we're actually pretty
close to this, I think Is thatonce you reach a certain class
of distributor in the beveragegame and we're getting up there
as far as the qualitydistributors, the breadth of
them, the size of the business,that will attract the bigger
brands in from the outside andthat will be a whole new level
(37:20):
of competition that none of usare really used to competing
with.
AnnaRae Grabstein (37:24):
Say more about bigger brands.
Ben Larson (37:25):
You mean like existing brands that don't have
I mean the constellations of theworld, the boston beers you
mentioned.
You know it's like all thefriends of the total wines, you
know, like I know, a lot ofbrands are really excited about
being a total wine.
Right now.
It's like now.
I hope you cement thoserelationships, I hope you get
the traction because if themomentum keeps up, the pressure
(37:52):
is going to start flooding infrom the outside and they will
have to make that decision Do webuild or buy?
And in many cases they'll lookat how much has been spent and
you'll have to decide if youwant to sell really quickly, but
yeah, it's going to be a bigdisparity.
AnnaRae Grabstein (38:10):
When you're talking about big brands I don't
know if we've talked about this.
I'm curious of what you thinkin terms of existing brands that
are well-positioned in alcoholor even non-alcohol brands that
are well positioned in alcoholor or even non-alcoholic.
What do you think about addingTHC into those existing brands
lineup of products, or do youthink that that is problematic
(38:32):
and that people aren't going tobe doing that?
Ben Larson (38:34):
I mean, you see, you see so much today, like, like
how many brands are launchingalcohol products Like you never
thought they would like Sunny D.
Oh, I didn't know, know, youdidn't know that.
Oh yeah, sunny d has aridiculous um.
You know coca-cola did the jackdaniels like collab right, yeah
so I don't think it's a farstretch of the imagination.
(38:56):
I think there's a lot of um,very professional non-alcohol
out there that are poised toenter the business.
But it really doesn't matter,because right now it's all about
distribution and retail space.
Unless you have a DTC brandlike Reeds right, which many of
(39:18):
these products are splittingbetween the two.
A lot of them are half BTC,half retail.
But yeah, when you come in witha relationship and you can open
up $2,700 overnight, I thinkthat'll be the big
differentiator and that's whatthese alcohol brands have.
AnnaRae Grabstein (39:36):
Yeah, okay.
Well, shall we talk about maybethe biggest hemp market in the
country, since we're talkingabout hemp, and what the heck is
going on in Texas?
Ben Larson (39:49):
Yeah, all this momentum I was just talking
about it's not guaranteed.
I'll say that much becauseTexas is seeking to ban this
proliferating hemp market andsome have postulated that it is
a $4 billion market.
In Texas alone, $7 billion,even $7 billion.
AnnaRae Grabstein (40:11):
Yeah, there's a lot of numbers being thrown
out there, but this ispotentially the biggest
cannabinoid market in thecountry.
What's happening in Texas, andso, yeah, sb3,.
Ben Larson (40:22):
Senate Bill 3.
Senate Bill 3, brought by theLieutenant Governor, dan Patrick
.
AnnaRae Grabstein (40:28):
Dan Patrick, it's a prohibition, but it's not
the only bill that has beenintroduced in Texas.
There's a lot of other billsthat are touching on this.
There's a bill to expand theexisting medical program.
There's a bill to introduceregulations for hemp products.
Why is it that SB3 is what istaking all the oxygen?
(40:51):
Well because it is a ban.
Ben Larson (40:53):
It basically would eliminate the 7,000 plus hemp
outlets that have been createdthroughout the state.
The CUP, the regulated side ofthe business, is highly
restrictive.
That's why we have these otherbills to expand access to that.
But, like right now, there'sthree licensees and it's very
hard to get good product and sothere's this huge disparity.
(41:16):
And, at the end of the day, weknow prohibition doesn't work.
And if you suddenly ban allthese products, there's good
reasons for it.
If anyone listening to thetestimonies of the Senate
hearings, there's good reason,good reason for banning.
Sure, it's like the industryhasn't helped itself in a lot of
(41:37):
cases.
Right, and I'll say thatbroadly.
When we focus on the beveragecategory, there's a certain
reason.
We feel confident that it's a.
It's a good meeting spotbecause of the low dose, uh,
nature of it, the way you cantitrate it.
But this is, this is hemp rootlarch.
So this is faves, this isflowers gummies000 milligram
(42:01):
gummies.
I don't know if that's anactual number, but you know it's
like you hear these crazystories.
Anyways, you rip all that outand you people will find another
way, but you'll also be takingaway medicine, like the good
products that people areconsuming for, like veterans,
but it's just a mess out thereright now, and so it's such an
(42:24):
interesting dynamic because amess down there right now.
It's such an interestingdynamic because a ban has
previously been brought.
The legislative session comesevery two years in Texas Two
years ago this was brought bythe House.
I was just talking about thisbill sitting in the Senate right
now.
Last time it was brought to theHouse in a cask with flying
colors.
It actually died in the Senateat the hands of Dan Patrick
(42:47):
because he didn't get what hewanted from a different bill,
and so now it's back, introducedby Dan Patrick, coming to the
Senate and largely probably withflying colors, and the big
question is what happens in theHouse?
And anyone that follows Texaspolitics which I never used to,
but now I do the one thing DanPatrick doesn't have control of
(43:09):
is the House, and there is thepotential that the House itself
has flipped on this issue.
So the big question is whathappens when the bill gets
passed in the House and that canbe debated, and I hear a lot of
things coming out of DanPatrick's office from both sides
and yeah, it's anybody's gameat this point.
But the interesting dynamichere, as it pertains especially
(43:35):
to our audiences if that billdoes get killed, there will have
to be an alternative bill thatgets presented, because
otherwise it's status quo forthe next two years.
Now, there's some people thatlove that, but generally I think
it's untenable.
I don't think anyone actually,at least on the political side,
(43:57):
wants that to happen.
So what's the alternative?
And this is what starts tocause the quarrel between the
broader hemp industry and thoseof us that are a little bit more
focused on the beveragecategory.
AnnaRae Grabstein (44:10):
Sure Well, as someone that's sitting on the
outside of it looking in becauseI don't have business interests
in Texas specifically I thinkthat… I think we all have
business interests in Texas.
Ben Larson (44:21):
I mean, we all have this interest in Texas.
It's a massive bellwether forwhat we will see.
AnnaRae Grabstein (44:28):
I guess I hear you that something does
need to happen, and I havealways believed in public safety
and regulation as a key kind ofa foundational aspect to being
able to build a real industrythat we can all depend on and
that consumers can feelconfident in and businesses can
(44:51):
kind of stand on the shouldersof in order to plan for the
future.
So, yes, I hear you that, ifthe ban doesn't move forward,
that there still needs to besomething that happens in Texas,
because there is no safetymeasures on the books right now
that are protecting consumers.
And, at the same time, withinall new legal constructs, there
(45:16):
becomes a question aboutenforceability and enforcement
priorities, and that issomething that I've been
thinking about in relation tothis of like, okay, if this ban
passes, what is Texas going todo?
It's like there's apparently50,000 people employed working
in this space in Texas.
There's all of this economicactivity that we already
(45:37):
mentioned.
Like that doesn't just go awayovernight.
What are we doing?
Are we talking aboutcriminalizing people?
Are we going to basically forcea illicit market overnight?
This is wild, and even ifthere's becomes a more what I
(45:59):
would call like sensibleregulatory pathway of maybe just
creating new safety standardsand keeping some products in the
market.
There are going to be losers inthis because, like you said,
there are groups and companiesthat have taken it to an extreme
and have put products in themarket that very if they're just
very likely will not be able toto withstand any type of
(46:21):
oversight.
They're just very likely willnot be able to withstand any
type of oversight, be that sometype of inhalable product or
product with questionableingredients or potencies or
whatever.
It is no testing Like.
What does that look like?
Ben Larson (46:37):
Yeah, it depends who you ask, right?
Because if you ask a politicianor someone on, say, the CUP
side and I'm not speaking foranyone in particular, but
they're probably perfectly finewith being like it's too out of
control, we're just going to banit and then maybe two years
down the road or four years,because it's Texas then we can
(47:02):
rebuild into it with what we'recomfortable with.
That's what's happening inCalifornia, right?
AnnaRae Grabstein (47:09):
But California has a vibrant quote,
unquote like adult use.
Vibrant, wow, that's what theywould tell you is that there is
like plenty of access for peoplethat want cannabis at legal
dispensaries.
That is not the case in Texas,like there is a basically failed
(47:30):
medical system that only has20,000 people or something that
are registered patients into it.
So there is no access.
But people are consumingcannabinoids broadly that
they're accessing through thehemp channel.
Ben Larson (47:44):
I mean, this is why bans are so stupid.
Like people now understand thatthey like these products and
they want these products, and soas soon as you have a ban on
retail, they're just going tothe USPS, as it already is, is
just going to be the biggestdrug dealer in Texas, right yeah
, and everyone's going to go DTC, and everyone's going to go DTC
.
And unless you put peopleripping apart packages in the
(48:05):
post offices, there's going tobe really no way to stop it well
, we're very much in the middleof this, folks.
AnnaRae Grabstein (48:12):
The Texas legislative session we looked it
up, it's 140 days 5-ish monthsfrom January so we're going to
keep talking about this and thefallout of whatever happens is
going to be real in some ways,like, no matter what you're
right, this touches everyone incannabis in some way and you
(48:35):
know, I will say that in termsof like, what my hopes are is
that my hopes is that there isparallel pathways going on in
Texas, that both they arelooking at their existing
medical program and expanding it.
It needs expansion.
That means that more types ofqualifiers to be a patient, more
(48:56):
types of access, broadenedperspective about form factors,
like all kinds of things.
Open up that medical programand create sensible regulations
that put consumer safety at theforefront for hemp products that
are in market and do not shutdown an industry without clear
(49:20):
off-ramp to create access whenthere is already demand, because
that is going to haveunintended consequences of
bolstering the wrong players inthe market it strengthens the
illicit market and the badplayers, because the good
players are going to like oh,I'm going to follow the rules,
so the only products that willbe available will be the worst
(49:41):
ones and I just we just can't.
It's enough already Like we'velearned our lesson.
Let's stop making the samemistakes.
So please, happily, dan Patrick, do you want to come on and
have a conversation with usabout this?
That'd be incredible, alright.
So how are we doing?
Ben Larson (50:02):
I think we're close to the top of the list, yeah
this is what we were going totalk about.
AnnaRae Grabstein (50:05):
huh, just looking through the list Yep,
that's it.
There's so much more news outthere.
Folks Like we really are tryingto just figure out what is most
important to talk about.
So if there's something that wemissed and what's most
interesting to us and what'smost?
yes, totally, but follow someother people that are putting
really great news out there.
The folks at Cultivated aredoing a great job.
(50:27):
Follow them.
Green Market Report continuesto be an excellent source,
marijuana Moment and MarijuanaMoment and then follow other
people that are just smart andhave other things to say.
Ben Larson (50:40):
Yeah, because we support all of them, not just
the loudest ones on LinkedIn.
No, some of them are cool too.
AnnaRae Grabstein (50:44):
Yeah, they are cool.
Yeah, this has been really,really good and I hope that this
felt like some sort of supportgroup for those that are looking
to decipher the informationwhile also trying to get some
perspective on it.
Ben Larson (50:59):
It's been another Cannabis Business News Roundup.
Thank you for liking,subscribing, doing all things
sharing it, thank you to ourteams after tosa here and
wolfmeyer, and thank you to youuh, next week, yeah, next week,
oh uh, we are having on umhippie water, hippie water,
(51:19):
hippie water.
AnnaRae Grabstein (51:20):
We're to talk about building from the ground
up, so tune in for that.
It should be fun.
All right, as always.
Ben Larson (51:28):
As always, yeah, go ahead, hit us out.
AnnaRae Grabstein (51:31):
Stay curious, stay informed and keep your
spirits high.
Ben Larson (51:36):
Until next time.
That's the show.
AnnaRae Grabstein (51:38):
That's the show.
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