#080 - The Cannabis Industry is in a Knife Fight - Who Survives? w/ Jerry Derevyanny, Partner @ Bengal Capital - High Spirits: The Cannabis Business Podcast

Episode Transcript
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Ben Larson (00:53):
Hey everybody, welcome to episode 80, 80 of
High Spirits.
I'm Ben Larson and, as always,I'm joined by my co-host,
Anne-Rae Grabstein, and, asalways, I'm joined by my co-host
, Anne-Rae Grabstein.
We're recording Thursday, March20th 2025.
And we have a great show foryou.
Today.
We're going to be unpacking thecurrent state of the cannabis

(01:15):
industry with our friend, JerryDerevany from Bengal Capital.

But before we go there, Anne-Rae it is good
to see you today.
Aw thanks, ben Good to see youtoo.

Ben Larson (01:26):
Back from Colorado.
Only a slight injury, but happyto be home, happy to be back
with the fam and navigating thecrazy world that is cannabis and
hemp.

I know I've been tired all week.
I think it's just too muchcoming at me and just trying to
make sure that I'm keeping theboat floating, getting my work
done and I've got my husbandtrying to buy a pinball machine.
Oh, pinballs are cool.
Pinballs are in.
You think so You're voting forthe pinball machine.

Ben Larson (02:00):
I mean I actually have a friend that has a pinball
machine in their house.
I hope your house is big enoughwhere you have a secluded unit
where you can just tuck itbecause they are loud and
obnoxious.
But it's a great center pointfor when you're entertaining
guests, for sure.

We have a real garage kind of speakeasy
scene.
At night it's the cannabis den,once the kid goes to sleep, but
during the day it's where thedrums are, and I guess we would
be adding the pinball machinethere.
But but we'll see.
And yeah, other than that, Imean the cannabis industry is
getting together on both theWest coast and the East coast.
This week there's a hall offlowers that's going on in

(02:36):
Southern California and you can.
That's happening in Boston.
Me and you weren't neither.
We've got other shit to do.
What's that say?

Ben Larson (02:49):
about us.
Yeah, it's funny.
It's like, oh, Hall of Flowersis happening and I think Hall of
Flowers for me was always veryjust California brand centric
and I think they've tried toexpand upon that.
So no offense to anyone that'sthere, but yeah, it's hard for
me to kind of have reinserted itinto to a place that I need to
find myself at.

(03:09):
And then, you know, I thinkabout what is happening in
cannabis and I, you know, usedifferent news outlets, like
marijuana moment and whatnot,and I it's just a weird state.
I feel like things are chaoticbut at the same time there's no
distinct real news happeningacross the state, with the
exception for one presser.

(03:31):
That happened yesterday.

Yeah, let's talk about that, because maybe
there's not a lot of news, but Ithink that what happened in
Texas yesterday is incrediblyworthy of some ranting.
Worthy of some ranting therewas a press conference that was
hosted by Lieutenant GovernorDan Patrick to talk about SB3,

(03:53):
the Senate bill that is awidespread ban on THC and also
puts in place pretty intensecriminal penalties, and it was a
press conference that wasattended by a bunch of law
enforcement and the senator whowas also the sponsor of the bill

(04:16):
, whose name is, remind me.

Ben Larson (04:20):
Perry, senator Perry .
Yeah, perry, senator Perry.

Yeah.

Ben Larson (04:31):
It was one of the most intense shows of reefer
madness that I have seen, maybeever in my life.
Someone forgot to remind themthat they actually have an
active CUP program, that youknow medical marijuana, and
they're sitting here just everyother speaker was forgetting
that there was a differentiationbetween the situation that they
have with hemp versus cannabisand just a broad brushstroke
that cannabis is the devil.

Yeah, and so look on a high level.
The hemp industry in Texas isconsidered to be somewhere
around $4 to $8 billion of topline retail revenue.

Ben Larson (05:04):
That was actually the first time I had heard $8
billion.

Yeah, that came out of a governor, a
Lieutenant governor's mouth andand there's 8,300 registered
hemp businesses in the state andapparently around 50,000 jobs.
With that.
I mean I think that we can takea 50,000 foot view and say,
sure, at a high level.
We know that there's a lot ofcomplication with unregulated

(05:28):
product in the market, but whathemp has done in Texas is
unquestionably proven that thereis a demand for cannabinoids in
Texas.
Texans want access tocannabinoids in a open, like,
readily accessible way, whichmeans that their medical
marijuana program that has, Ithink, only 20,000 patients

(05:49):
registered in it as of the lasttime we checked, which was about
a year ago.
So maybe there's more now, butis not filling the gap that is
the demand for cannabinoids inTexas.

Ben Larson (06:04):
What are they going to do if they shut down an $8
billion market?
Like do they think that's justgoing to go away?
Is it all going to flood intothe CUP program, Like, what's
the plan?

The plan is that this is a stimulus program
for the law enforcement industryin Texas.
What Dan Patrick was sayingyesterday is we're coming for
you, we suggest that you shutdown now, because we will close
you down.
So people are saying that ifthis passes there will be fast,
steady and aggressiveenforcement from Texas law

(06:36):
enforcement.
When law enforcement is theproponent of this policy and it
is just going to put a bunchmore money into their pockets
and away from the people thatare in the space in Texas, do I
believe that regulation isnecessary in Texas and in

(06:59):
general?
Absolutely, is prohibition everthe solution, especially in a
market that's proven like thisnow has no way?

Ben Larson (07:10):
um, yeah, yeah it it was.
It was disgusting, and just theamount of lies that were spewed
during this press conference isastounding and and the
unfortunate thing is the thegeneral public doesn't
understand that they're lies.
But equating cannabinoids to,they were saying that all these
products, all these cannabinoids, are equivalent to K2 and Spice

(07:34):
and those epidemics, and it'slike you're talking about
cannabinoids.
And then the equivalence ofmarijuana causing what?
15% of psychosis cases in thestate.
I'm just like, where are theygetting these numbers from?

yeah, it's it's really disturbing.
And it's it's disturbing on alevel because this is the
narrative that we don't want tospread.

Ben Larson (07:59):
Um, texas is a very conservative state with someone
to tell the cannabis lobbyiststhat that's not the narrative we
want to spread, because I dobelieve that.
You know I'm not going to callout specific names, but I have
heard that you know the CUPoperators, the MSOs that want to
create certain tides across theUnited States, are the ones

(08:19):
that are powering this fearmongering and like, aren't you
just like stabbing yourself inthe stomach?
Like what, while you're, you'rehaving people spread these,
these lies about the plan.

It's a really complicated time to be
navigating this policy becausebecause companies that have been
operating in the regulatedmarket do not want to be
competing with these unregulatedproducts that are everywhere,
that are cheaper, and Iunderstand that, and at the same
time, we have to be carefulabout shutting down a

(08:56):
cannabinoid market that is atleast out of the closet and
happening in the open without analternative for the consumers
to turn to, because they willjust go to the illicit market.
The worst operators will be theones that stay in business and
push the limits and createillicit channels for people to

(09:17):
purchase their product.
I've said before duringdifferent policy debates on this
show that there's no peaceaction in the pool, right, like
there isn't a good way to havesomebody pee in the pool and
have the pee knock it oneverybody else in the pool,
right.
So this is an example of whenthe worst actors that are making

(09:38):
irresponsible products andmarketing in irresponsible ways
end up getting thatirresponsibility spread on
everybody else in the market,because there are good operators
that are operating in Texas andtrying to do the right thing,
but there are also groups thatare making edibles that are too
potent and putting product intothe hemp market.

(10:01):
That is probably not hemp and isTHC flour.
Quote unquote.
That is not THC-A flour, it iscannabis and that's peeing in
the pool.
Stop peeing on me, please Stoppeeing in the pool.
So okay, should we end thisrant enough?

Ben Larson (10:20):
already, I think so, in other news.
Company behind Ed, companybehind edible arrangements,
enters cannabis industry.
No one gives a fuck.

All right, uh , let's, let's move on with the
show okay, well, so, um, we havea great guest today, jerry
derevue.
Oh, jerry, I'm gonna you Jerry,we're sorry, bring him on.
Jerry is an attorney first.

(10:47):
He became a cannabisentrepreneur and operator, first
at an OG Washington company,then later was the EVP and
general counsel at Forefront, apublic company, and is now a
partner at Bengal Capital, wherehe is a cannabis investor.
A partner at Bengal Capitalwhere he is a cannabis investor

(11:08):
and Pontificator.
He publishes some great stuffthat I have read and followed
online, and that was one of thereasons that I wanted to get to
know Jerry more.
So, jerry, really stoked tohave you here.
Welcome to High Spirits.

Jerry Derevyanny (11:17):
Hey guys, Pleasure to be here.

Tell us again how you pronounce your last
name, please.

Dereviani.

Dereviani.
Okay, thank you.
I apologize.

No problem.

So let's jump in.
Will you give us the down lowon who is Bengal Capital and
what do you guys do?

So Bengal Capital we invest in, obviously,
cannabis companies.
We're basically an investmentmanager that focuses solely on
cannabis.
It's me and my partner cannabiscompanies.
We're basically an investmentmanager that focuses solely on
cannabis.
It's me and my partner, joshRosen, who is the ex-CEO of
Vireo and Forefront and was anequity analyst in a previous
life.
We got Sanjay, who ran a fundas well, sanjay Tolia and was an

(11:58):
early investor in GTI and acouple of other companies, along
with his brother Vinay, gti anda couple of other companies,
along with his brother Vinay.
And what we really like to dokind of where our seam is in
everything is our investors arepretty hip to the cannabis
industry, so in the companiesthat are in there, so they can
go buy GTI if they want to.
They don't need us to charge afee for buying GTI.

(12:21):
So what we decided to do wasokay, let's focus on you know
it's a it's a small cap, microcap market.
Let's focus on the even smallercompanies, uh, where really
nobody like everybody's ignoringthem, uh, except for us, and
maybe sometimes roll up oursleeves and help.
Um, because some of these smallpublic companies they
oftentimes, you know they'rereally good at their operations

(12:44):
but maybe their investorrelations or something needed,
need a little bit of help.
So because of our experience,we were able to do that and
that's kind of where we focusedon.
The fund I think has donepretty well Over.
You know, it's almost been fiveyears now 2020.
It's yeah, it's gonna be fiveyears this year.
And so it's yeah, it's beeninteresting.

Ben Larson (13:03):
So be five years this year, um, uh, and so it's
yeah, it's been interesting soyou've kind of earned a
reputation of of telling peoplehow it is, and and and being
unfiltered, and so how is it?
Where are we at, like, what'skind of your, your, your lens on
the space right now?
Are we hot, are we cold?
Are there glimmers of hope?
Um, let's kind of like set thestage as far as how you're

(13:27):
seeing it.

Um, I think, we're cold, just being honest
like we're cold.
Uh, there's no, a lot ofcannabis stocks trade off of
kind of political excitement.
There's no, there's not muchpolitical excitement right now,
except for the true believers onTwitter.
Um, the financial results ofthese companies has been really
quick.

Ben Larson (13:48):
Are there still true believers on Twitter?
I haven't spent much time there.
Is there an active cannabiscommunity?

Well, there's a couple that I mean in cannabis
there are true believers, uhfor sure.
Yeah, there there are peoplethat really they take like a

(14:14):
little piece of of informationor something.
They just they just run wildwith it because, honestly, I
think a lot of it is driven bywhen you're down 80% in a stock
or MSOS or whatever you reallywant, um, you really want to,
like, you want to get that moneyback and you're anchored and I
think that drives a lot of it.
Um, but yeah, I think generallyit's kind of cold and and there

(14:40):
are a lot of reasons for it.
Um, but the one that I focus onthe most is everyone.
You know a lot of the peopleinside of the cannabis investing
community and inside thecannabis operations community.
They go, okay, we're, we'reundervalued, we, we, we deserve
to.
You know, and I focus on okay,well, what's the fundamental
reason?
Like, what are these companiesactually going to do in the

(15:00):
future and what have they donein the past and kind of drawing
that line going to do in thefuture and what have they done
in the past and kind of drawingthat line and unfortunately,
like in a lot of otherindustries, if you look at
financial history.
A lot of the early players arenot so good at the actual doing
of cannabis businesses.
They were very good at raisingmoney, getting licenses, but now

(15:23):
that advantage has kind ofdropped off and they actually
have to operate these things andwe're starting to see cracks
show in a lot of these big names.

It's interesting that you focus on
this sect of what you calledmicrocap cannabis stocks,
because I know that most of yourinvestments are in public
companies.
But because of the publicmarket performance, there's less
and less companies that aregoing public in cannabis than in
2020 and 2021, because therehas been such terrible
performance, it's hard to make agood argument of why it would

(15:57):
make sense to go public today.
Does that mean that you arelooking at more private
companies companies or are youencouraging private companies to
look at the public market?
How do you, how do you,navigate those types of issues?

We, really we, we are looking at private
companies.
We, we continue to look at youknow we'll look at anything and
we'll give fast answers.
What we really look for now arevery strong, what we feel like
are very strong operators thatare undervalued.
We think that that, you know,and some of those are private.
Some of those honestly are.
Sometimes it's even just a guyor a team that you know has done

(16:39):
really well at a certainbusiness.
Wasn't maybe like decided toleave, has been jumping around
doing their own thing, but likethat team has know-how that if
you applied it, you know.
The simplest example right isGrown Rogue is probably our best
known investment in the fund,which was like a 10 million, 15
million market cap company,canadian when we invested and is
now over a hundred.

(17:00):
It's what we saw was that, hey,these guys can grow and make a
little bit of money in oregon,toughest market, in one of the
toughest markets in america.
They're going into michigan,they're already in michigan and
they're going to grow andeverybody is, you know, whining
about michigan prices comingdown.
And to these guys, you knowpeople are whining that oh man,

(17:21):
it used to be 2000 a pound, nowit's 1500.
And these guys from from Oregonare like I mean, it's 800, 900
in Oregon.
This is gravy, are you kiddingme?
Like you know, 1200 a pound isamazing, and so what we, you
know, the very simple idea thatwe had right, is that know-how
of growing a good craft poundfor X and being able to sell it

(17:43):
for Y and having some cat likemaking money that's worth a lot
more in other States, while wehave this kind of like
balkanized system.
And so let's work, let's, let'stake a position, let's start
helping these guys get into astate like New Jersey, which is
where they're at now.
Um, so I think you know, andthere are private companies that
that I think are are doing agood job that we're watching.

(18:05):
There's always kind of avaluation.
We try to be pretty disciplinedon valuation and stuff like
that.
One company I'd call out thatwe're not invested in, but I,
frankly, was really impressedwith meeting with these guys and
I wish them all the success inthe world and kind of watching
is a company called Fernway.
If you guys have heard of them.
I really like that team.
I think they're great.

(18:26):
I think there's also someprivate companies that didn't go
public because at some pointthe public markets.
Like you know, there was noexcitement anymore and at some
point the public markets justkind of shut down, but almost
for good reason, because it'salmost the worst companies that
ended up not going public, andyou know the companies that were
probably even weaker operatorsthan some of the big companies

(18:48):
that we have now.
And I think you could start tosee a hint of that with
Pharmacan and what's going onwith Pharmacan, right?

Well, and so Fernway and Grown Rogue are both
examples of non-verticalcannabis companies and most of
the largest public cannabiscompanies, or all of them.
Most of the largest publiccannabis companies, or all of
them.
All of the largest verticalcannabis companies.
Top five are vertical and I'mcurious of how you see
verticalization.

So I think it's nuanced.
I think a lot oftentimes peoplemake the mistake of thinking
verticalization is is like thebe all end all because it, you
know, it helps margins orwhatever.
But if you, if you take adeeper look, what ends up
happening, kind of in the worstcase right?
So a lot of cannabis opinions,I think right, traditional
alcohol, that no verticalizationwhatsoever, and so we have a

(19:48):
really, really competitivewholesale market and maybe a
slightly less competitive butstill pretty competitive retail
market and when you come intoone of our stores it looks like
a real store.
There's a ton of products fromall these different you know,
and that I have a strong opinion, that that's what consumers
want.
Consumers demand choice.
They don't want to be forcedinto your like, put it your

(20:11):
product, your store brand orwhatever, especially when
oftentimes companies are eitherthey're not as good on the
wholesale side, so what they tryto do is they're already, you
know, they have this bigfacility, they're trying to get
more money out of it.
So they produce a product, theyput it on the shelf and they
start to like, try to push it tothe customer and they end up
losing sales.
That way people start going toother retailers.

(20:33):
So I think verticalization can,especially in early markets, can
be really powerful Because,yeah, you want that access like
there's.
You know, you're not sure ifyou're getting a shelf space
Like, and if you create a decentproduct at wholesale, it can be
a huge advantage to have decentflour at a decent price.
In these early markets, like inOhio, people that are able to

(20:56):
execute this are going to killfor, you know, a year, two years
, three years, whatever,whenever high prices last, right
, but it's certainly notnecessary to a good business and
, as a matter of fact, sometimesthe worst case is what I think
is happening sometimes now insome of these markets is that
one side of the business becomesan instrumentality of the other

(21:16):
, where, where you're basically,the retail side of the business
is starting to support thewholesale side and ends up
losing sales and it basicallyyou get a worse retail business
and what ends up being a muchweaker wholesale business in the
long term.
If that makes sense, Does thatmake sense?

(21:36):
Yeah?

It really does, and I could talk about
this all day, because I thinkthat what you're highlighting is
that what has been happening isthat people have been building
business strategies based onregulatory capture, which is
what verticalization representsas the business opportunity as a
result of being allowed to ownit all, as opposed to being
anchored on the consumer, whichis what we're seeing in some of

(21:59):
these more competitive places,and the future is that we're
going to have to be anchored inthe consumer, and it's becoming
more and more obvious as theknife fight unfolds.
So, yeah, I hear you and Iagree, and I think those are
really, really interestingpoints.

Ben Larson (22:15):
Yeah and Jerry, in your quarterly earnings report
or your report to yourshareholders, you highlighted,
you know, one of the biggestproblems is kind of the missed
expectations of a lot of theseoperators setting forecasts and
missing them by on the healthyside, 30% if not 50%.

(22:36):
And so finding these smallercompanies and investing them and
taking them into new marketslike how do you set reasonable
expectations when, knowing thata new market like New Jersey can
be so volatile in pricing ofproduct and all that and I know
what a lot of the MSOs we'reguilty of we're setting prices

(22:58):
and then not adjusting them overtime for their forecast.
And so when you're working witha company like Grown Rogue and
you're anticipating going intoMichigan, new Jersey and so
forth, like how do you reallyset reasonable expectations for
your forward-looking earnings?

So one of the things that we do and that we
try to and I think Grown Rogueis on board with this is being
honest with investors about hey,we are going to over earn for a
couple of years in this market.
Prices are high.
They will go lower, right?
Grown rogue generally, um, theyou know for craft scarcity is

(23:39):
is a part of it.
You don't want to have like5,000 pounds that you have to
move every month.
So they kind of shoot for 1,000to 1,500 pounds and so at some
point it's like okay, when theprice goes down, you're not
selling any more pounds and so,yes, the revenue will go down,
the EBITDA will go down, we aregoing to over-earn for a couple
of years.
Let's just be honest about that.
Okay, we're going to farmhigher prices, we're going to

(24:01):
give people better value forthose higher prices.
But I think I think, in terms ofhow I think about it, I think
that it is incredibly difficultto predict.
It'll be very interesting tosee in like 10 years, when
people go back and do reallyhigh quality studies on like how

(24:22):
prices reacted to licenses andall that, to see if there was
any kind of real pattern or howyou could predict prices, what
the rate of price is going down.
I can tell you in washington,wholesale, I remember a quarter
where prices went down 40percent in wholesale.
Okay.
In massachusetts, prices wentdown 40 percent in a year and
people were crying.
Okay, illinois, prices have beenrelatively stable.

(24:45):
In Florida, you've seen, yousaw a quarter where, depending
on who you talk to, prices wentdown five to 15% or so right In
a quarter.
Um, so the way that I do it isI give it one or two years where
I take the price that I thinkis the wholesale price today I
kind of discounted a little bit.
I give it one or two years oflike $2,000, $2,500 a pound.

(25:06):
I you know, I pretty much knowwhat grown rogues costs are
going to be.
And then I turn the state intoMichigan because Oregon is
really, really competitive.
So I think Michigan is probablymore reasonable.
I basically, I basically turn itinto Michigan and then I see,
and then with a company likegrown rogue, I go, okay, this is
what am I getting kind of atthe end.

(25:27):
Right, like simple math, grownRogue puts $10 million into the
ground in New Jersey and thenone of the things that I look at
is when prices normalize, whatdo I think that facility is
going to do in terms of profitproduced off of that $10 million
investment?
What's really strange aboutcannabis, in a way, is that your
profits are very front loadedand so, because the prices are

(25:50):
high initially, you go, okay,I'm farming high prices, so you
get a lot like if you invest 10million, a lot of that 10
million comes back very quickly.
In that kind of environment itbecomes incredibly important how
you think management, whatthey're going to do with that,
that 10 million that comes back.
Well, that's 10 million theyhave available for the next
project.
What are they going to do withit?

(26:11):
Are they going to expand NewJersey to be like, okay, well,
wow, we're selling a lot, let's,let's do, let's get to 4,000
pounds in New Jersey andsuddenly the price crashes and
you go wait a second like man.
I really wish I had that $10million to go into Ohio.
Now you know what I mean, andso I think that's a criticism
that I would definitely level ata lot of the big MSOs, like the
top five.

(26:31):
If you look at their record ofcapital allocation, right,
that's probably one of thebiggest things for investors, or
it should be.
It's not good as a general rule, it is very bad, and so, yeah
and anyway sorry to get awayfrom the core question, but like
one, the way that I do it is Igive it like one or two good
years, like one good year, onemeh year and then one, and then

(26:53):
you're, you're down to thinkabout expansion and ways to do
it and how to predict futuremarkets.

So it's very reinforcing and I like the
perspective.
You talked about capitalallocation and talked about the
MSOs not doing a great job at it.

(27:19):
I think you're kind of teasing.
What I'd like to talk aboutnext, which is the earnings
report rundown.
It's been the earnings reportseason.
We've been looking at full year2024 results, the Q4 earnings,
and I'd love for you to give usyour big picture.
Take on this round of earnings.

(27:39):
What stood out to you?

Sure.
So number one, let's just behonest, like we call it earnings
, but really most of thesecompanies don't generate any
earnings.
Number one let's just be honest, like we call it earnings, but
really most of these companiesdon't generate any earnings.
The only the only one that doesis GTI.
So what generally you've seenright for many of these

(28:01):
companies is that the that thethere is as these companies have
gotten big enough, right, eachincremental state that's going
wreck or that's growing is notactually moving the needle all
that much.
So Ohio went wreck, and some ofthese companies have assets in
Ohio, but yet a lot of times,revenue is still down from last
year and profits are down, grossprofit dollars are down, and so
the picture that's beingpainted is that the price

(28:24):
compression and competition intheir legacy markets is
overtaking the growth in theirnew markets.
And what you the picture thatis being painted is that, as you
continue down this road, thatthis new market in Ohio, once it
matures a little bit, they'renot going to be making any money
there either, and so what youend up seeing is that a lot of

(28:44):
these companies are.
So what you end up seeing isthat a lot of these companies
are well, wow, they really.
You know we wrote this piece Ithink last year.
It's called Ants and Locustsand basically, you know, ants
build a hill and they kind oflike, build a business, locusts.
They come in, they strip thevegetation and then they move on
to the next thing.
And so in cannabis, somecompanies are ants right,
they're building a real businessand some companies are ants

(29:06):
right, they're building a realbusiness and some companies are
locusts.
They just a lot of people don'twant to admit it.
And so what I think we've seenI didn't see anything in the
earnings reports that thatfundamentally't own any of these
stocks.
In.
You know, the top five areCureleaf, gti, trulieve, verano,

(29:28):
cresco, terrasend, topsex Ishould say right In terms of
size, leaving out Glasshousebecause it's a single state
operator.
It's a little bit different.
I didn't see anything in theearnings reports that made me
think that anything other thanGTI was an investable company
among those right, and whatyou're seeing is cashflow

(29:49):
generation is stressed, becausea lot of the cashflow that's
coming from any of thesecompanies is just, they're not
paying their taxes, right,they're taking this 280E
position that we don't owe 280Ewe got refunds for 280E like
they're uncertain tax positions.
For a reason, right, becausethere's uncertainty.
And so when you kind of do allthe apples to apples, right,

(30:10):
when you, when you start tonormalize and go, okay, well, oh
, look, there's this cash flow,well, let's, let's just let's,
let's talk real numbers.
So GTI, I think, was $195million in cash flow from
operations, but they paid theirtaxes.
If you add in the taxes thatthey paid, it's about 131
million.
I think they would have, likeapples to apples, they would

(30:30):
have generated, you know, 320,330 million dollars in cash flow
in operating cash flow.
Right, when you compare that toapples to apples, to like
Cureleaf, that's double whatCureleaf does on an apples to
apples basis, on less revenue.

(30:52):
And obviously that's a factorlike Illinois is very, very
strong for GTI and so that'sgoing to drive the results and
stuff like that.
But ultimately, you know, someof the thinking that I've been
doing is how do you judge thesecompanies?
Like these things are, you know, yeah, prices are always going
to go down and all this stuff.
What I come, what I end upcoming back to, is okay, what

(31:15):
kind of investments have thesecompanies made over the over?
These companies are now like 10years old, right, at this point
they're.
They're mature, they've beenaround for a while.
They've made these investmentsin the first couple of years.
These investments that theymade either equity or cash
they're supposed to bear fruit,right.
They're supposed to createprofits.
They're supposed to createcashflow and to the extent that
they're not doing that, right,that tells you a lot about the

(31:38):
company and what it's probablygoing to do in the future, right
.
Let's pick an example.
Let's talk specifics.
Let's talk Verano.
So Verano has often beenpainted as like a pretty good
operator, but when I lookedrecently in Pennsylvania, it
looks like last year theygenerated about net.

(31:59):
Let me just check my numbersreal quick.
I think it's about 70 million71 million in revenue out of
Pennsylvania.
This year it's going to be less.
Did Pennsylvania, did thePennsylvania market shrink?
No, it did not.
That means that they're losingmarket share, right.
Why do companies lose marketshare?
Probably because they're notdoing a great job.

(32:20):
How did, how did Verano get intoPennsylvania in the first place
?
Well, one of the ways they gotinto it was they made a couple
acquisitions let's review, andthey could have modified this
stuff later, but I'm pretty sureI'm right on this.
They purchased a 62,000 squarefoot cultivation facility for 66

(32:40):
million in cash, 50 million instock and a potential $32
million in earnouts back in like2021.
They picked up a granum ed $60million in cash and stock.
I think that was threedispensaries, but I think each
dispensary gave you potentiallyanother license, so it's maybe a
little bit more.
And then they also picked up, Ibelieve, the healing center,

(33:02):
thc cute, three dispensaries,but again probably opened more.
I believe it was $55 million incash, 55 million in stock.
So so this year long paybackperiod this year.
So, yeah, so let's.
So, let's take a look.
So this year, right, they um,they took, I think I think they

(33:23):
took like a $290 milliongoodwill impairment on
Pennsylvania, and then they'vetaken impairments on
Pennsylvania before.
And so you look at that andpeople often investors go man,
impairments are not, it's notcash, let's adjust it out of
EBITDA, but it was cash.
A lot of it was cash when theytook the cash and they gave it

(33:47):
to someone.
And now, like, if you look atit and you go, ok, let's take
2023, 71 million dollars inrevenue, let's apply like a 25
percent EBITDA margin, whateverit is, like you're talking about
them buying and it's going downRight, they were buying it at
like five X plus revenue, butmultiple on multiple years in

(34:08):
advance, right, and now theoperation is getting more and
more stress and going down.
Like you look at something likethat and go, man, that was a
like, that's a problem, that'snot very good.

It sounds absurd when you break it down
like this and this is also youbroke down Pennsylvania and
Verano's questionable choices inorder to get to that $70
million of revenue that, asyou're explaining, is decreasing
.
Cura Leaf also made lots ofheadlines of reaching a pretty
big milestone of a billiondollars of net losses.

(34:45):
Is there a coming back fromthis?
I mean, these companies seemlike they have nine lives.

So I think this is again where it gets a
little nuanced and I thinkpeople oftentimes they take what
I say to this like oh so you'resaying these companies are
going to be dead?
No, I think Cureleaf is goingto survive.
But that's not the question.
For people like me and forregular investors, the question
is if you buy a share of theirstock, are you going to do well

(35:13):
or are you not going to do well,especially given the risk that
you're taking?
Would you rather buy the S&there, right?
Yeah, curaleaf's going toprobably survive, right, just
like a lot of these companiesare going to limp along.

(35:34):
Last I checked, iAnthus has alittle sliver of publicly traded
equity and I think MedMen isstill around somewhere, but that
doesn't mean it was a very goodinvestment for the equity
holders.
For the equity holders Leavingaside the guys, like you know, I
think, wolf of Weed Street,jason Satapora, like great
trader and knows a lot more thanI do about trading, some of

(35:55):
these guys will be able to makemoney on, like the trading or
whatever I'm focused on.
Okay, if you buy a share of thestock and hold it for a number
of years, are you going to dowell or are you not going to do
well, and what I see for a lotof years are you going to do
well or are you not going to dowell?
And what I see for a lot ofthese companies is okay, revenue
is going down, profits aregoing down even faster than
revenue, cash generation isstressed.
You have debt maturities comingup.

(36:17):
Yeah, I think they're probablygoing to be able to refinance,
but ultimately, what's left forequity is probably getting
smaller and smaller and smaller,and what I like to do as an
investor is have you know a lotof different ways to win.
So, with GTI, which is not aperfect company, there's
definitely some issues with GTI,but like GTI, you, because of

(36:37):
the buyback I can kind of get, Ican kind of create the reality
of okay, if the stock goes downreally low, at least they're
buying it back at a really at areally good price.
With these other companies,what, what seems to be happening
, is that the only thing theyhave left is somebody, something

(36:58):
happens at the federal level orwhatever, and people get
excited and then the stocks goup, right, and that's the only
way that people are going to winkind of long-term, and that's a
really difficult position to bein as an investor, and that's
not one I want to be in.

Ben Larson (37:10):
So it sounds like a better title might have been Ant
and Locusts companies.

What's exciting to me like again not to
be all negative, nancy, becauseI think this is I got to
reiterate this like we try tomake this point but it's usually
towards the end of the letterwhere people are so sick of what
we're saying but negative aboutthe MSOs that didn't even get
there.
What's exciting is that, like alot of these investments that
the MSOs have made that createdthis infrastructure, the
companies that actually the, theguys that know guys and girls
that know what they're doingthey're going to be able to

(37:51):
potentially leverage off of themistakes of the MSOs and it's
going to create like you havethese big facilities that you
know that parallel walked awayfrom a $50 million facility in
Pennsylvania right In the future.
I think that $50 millionfacility like a great outcome is
you get a couple of craftgrowers from California to go in

(38:13):
and kind of split that facilityup, so it's not like all 50,000
square feet of cultivation isone company and we'll work
together somehow and bring theirgreat craft products into the
Pennsylvania market byleveraging off of kind of the
mistakes of others and beingable to get in there.
That's going to create a reallyinteresting vibrant market for
cannabis.
I think cannabis is going to bemuch more like wine than beer.

(38:36):
I think you're going to havefewer really top brands that
control a huge portion of sales.
I think it's going to be muchmore fractured and it's going to
be.
I think it's going to bewonderful for consumers.
I think it's going to be great.
It's there's going to be a weedout period, but what's really
exciting is that, man, there'sthese green shoots of these
companies that have been kind ofdoing the right things quietly

(38:59):
for a long time that are nowgoing to have the opportunity,
like grown rogue to to enterinto the next state, and I think
there's a lot of green spacethere to take market share from
MSOs that have been that are nowin a position where they're so
focused on making their debtpayments and everything they've
lost focus on the customer andthat's you know.

(39:19):
I think that's kind of thedeath knell of the equity for
the longterm.

Ben Larson (39:23):
Things that Anna Rae and I've talked about in the
past on the show is just ifyou're going around and you're
doing all these acquisitions $50million acquisition, $100
million acquisition and thenyou're not actually focused on
the integration and creating thevalue you know post acquisition
, you kind of fall into thesetraps and I don't know if that's
what your perspective of Gtiand their differentiation is.

(39:46):
Are you know, are they puttingmore effort on that kind of
post-acquisition effort?

so I don't think so.
Gti has not.
Um, I don't think they'vebought nearly as many companies
as some of the other ones Ithink they mostly build.
They mostly build althoughthey've bought.
So they did buy essence innevada and you know when I
roughed into the numbers theypaid, paid, you know, maybe a
little bit higher price but it'sa cash flowing asset.
Like they didn't.
They didn't absorb losses and Ithink there was some.

(40:14):
You know, the Essence team wasreally good and I think there
was some.
Really there was some goodstuff there.
They bought Leafline inMinnesota, which you know wasn't
the greatest operator from whatI've heard.
Uh, but Minnesota I think isgoing to be a great market, um,
great setup.
Obviously, with Vireo, twolicenses there, I think they
have an opportunity to reallygrab some market share there.

(40:35):
Um, but other than that, like,they've had a couple of small
ones, but they've been, um, Ithink you know, maybe Bebo is
the edibles company can becriticized, but it's pretty
small.
A lot of what they've done,from what I remember, is organic
and they haven't done these bigswing acquisitions that are

(40:56):
really difficult.
The funny thing is whatintegration is there?
These setups are all siloed.
You're buying, usually,generally speaking, these big
acquisitions that are buying newstates.
So you go in and then you knowa Florida operator buys a New

(41:16):
York operator.
What's the like, theintegration oftentimes like you
kind of got to either replacethe whole other team or there's
not.
There's just not a lot ofcrossover and there's not a lot
of synergy, and Josh and I havetalked about this.
But for big MSOs there's almosta diseconomy of scale, which is
crazy to say.
But the more states you have,the more overhead.
Sometimes you seem to need Thena single state operator.

(41:37):
If you think about that, evenBoris from Curaleaf I think he
mentioned it offhand in a call.
I don't think people reallyunderstood the import of what he
was saying, but I think he wastalking about colorado or
california is like the onlypeople that are making money are
mom and pops.
Wait, if you, if you as ascaled operator don't have an
advantage over a mom and pop,what like?

huh, and because they're so lean, yeah,
right totally yeah, and it'sinteresting.

The crazy thing to me is like you know you
put together these littlethings and when you know they
talk about institute.
One of the reasons prices arelow is because institutions
can't invest.
They go back through theearnings calls and they see this
and they're going to be likewait a second, what's the

(42:26):
competitive advantage here?
Okay, you guys are early, youguys have some.
You know, I'm looking at thecomments.
Yeah, you have some real estateselection.
You know you were first toselect some of the better real
estate, potentially, Although Iwould argue that sometimes the
second comer actually has alittle bit more choice sometimes
.
Yeah, and you ultimately lookat that and you're like man,
there are a lot of problems withthese companies, so why would

(42:49):
they be worth more than whateverthey're trading for now?

Well, so let's talk about trading and
access and sort of a newfrontier in hemp In that GTI
we've been talking about a bunch.

Hemp Is that a thing?
Hemp is a thing.

You heard us rant about it at the beginning.

By the way, I'm just going to say Dan
Patrick.
I much prefer ESPN's DanPatrick to Texas's Dan Patrick.
Yes, agreed, I have a favorite.
Dan Patrick is not the Texasguy.

Thank you for saying that.
I'm not a big fan ofprohibitionists myself either
myself either and it was a bigmove for GTI to go into Agrify
and then to acquire Seniorita inthe midst of a lot of the
larger MSOs also investing intohemp, but not doing so through

(43:42):
the NASDAQ.
From when we talked before, itsounds like you guys have not
made any investments into hemp.
At the beginning of the hour,we clearly talked about a lot of
the complexity and risk that'shappening in hemp, but one of
the things that you have alsobeen talking about is anchoring
in the consumer, and I thinkthat one of the interesting

(44:02):
things about the hemp space isthat in some ways, it has been
able to anchor with the consumerin a different way because of
the channels of where product isbeing sold in liquor stores and
grocery stores, gas stationsand things places where
non-cannabis consumers ornon-previous cannabis consumers

(44:23):
are.
Today.
I'd love to get your thoughtson how you see, or if you see,
hemp-derived THC fitting intothe future of the cannabis
industry.

So, first of all, I think there's a big
difference between the THCAflower that is going out and the
hemp beverage, and I think theTHCA flower is competitive with
the regulated market.
These are people that are, youknow, I call it carpetbagging.
They're basically just notsuffering any of the regulatory

(44:57):
load that these companies, thatthe cannabis companies, had to
do.
Whether you agree with it ornot, like a lot of this
regulatory load was necessaryfor the broader population to be
comfortable with a regulatedcannabis system and, whether
it's smart or not, like, thesecompanies had to bear that cost
and now these people arebasically free riding off of
that in this loophole.
And, frankly, the hemp beveragestuff is also kind of riding on

(45:22):
the loophole.
Where I think it's different isthat hemp beverage.
Based on the early data thatI've seen and conversations with
Josh who, at Vireo when he wasat Vireo, I believe, they
invested in some hemp beveragestuff.
They have a little hempbeverage project, so you got
really into the sector.
I think what the data isshowing is that cannabis

(45:45):
consumers are not leaving to goto hemp beverage.
By and large, it is alcoholconsumers that are trying hemp
beverage and potentiallystarting to.
You know if they did take 10drinks a week of alcohol, are
now doing eight drinks ofalcohol and two of hemp beverage
, starting to.
You know, discover this product, discover this form factor.

(46:08):
To you know, discover thisproduct, discover this form
factor.
And that, to me, is that hempbeverage angle, is actually a
huge benefit long-term a forsociety.
Um, because I drink alcohol, Ihave nothing against drinking, I
love a good bourbon, scotch,anything, Um, but I think, as a
broader society, if you'retrading alcohol drinks for some

(46:29):
cannabis drinks, I think, as ageneral rule, that's probably
going to be better.
Uh, long-term um for drunkdriving, livers, all sorts of
stuff, where I think it's peopleare kind of missing is that
some of these people that arecoming in through hemp beverage
are going to continue on topotentially other form factors,
right, Other edibles, maybe avape, you know, like a vape that

(46:52):
lasts them a year, but still,and that's, I think these might
not be your highest valuecustomers, right, Because they
don't buy all that much, butthey might be premium customers.
In any case, I don't think youknow.
So for hemp beverage, I thinkit's a really interesting sector
when we don't.

(47:12):
We have not invested in hempbeverage, partially because
here's my view on it.
Josh might have a differentview.
The number one it's verydifficult for me to see who's
going to be a winner ex ante.
It's very much an open field.
It's very hard, Like a lot ofguys are doing, you know, they
seem to be doing well, sales areaccelerating it's, but it's

(47:36):
tough to see, like who's gonna,who's gonna really make a
connection with the consumer.
You know, it's just, it's justdifficult because it's a very
wide open field.
Versus with cannabis operators,I think we have a better sense
of okay, this is what you get.
You know, this is your yieldper square foot.
This is your this, this is yourthat.
Okay, we can kind of start topredict, I think, whether you're

(47:56):
going to be successful or not.
Um, number one.
Number two um, yeah, I think.
Uh, actually, hemp is reallyinteresting because a lot of
alcohol guys went into cannabisand they just took their alcohol
playbook and they applied it incannabis without you know,
which is funny, because cannabisis exactly like alcohol, except

(48:17):
when it's completely dead.
And so you get like this youknow, oh, yeah, you have to grow
the hops and then do the on thebrewery as well, Like that's's
not something that you see Inhemp beverage.
I think the alcohol guys have amuch better advantage, actually
have an advantage.
They understand the pipes, theyunderstand the distribution,
they understand that that's ahuge portion of it and you know

(48:39):
I'm happy that you're talkingabout getting on the shelf.
I think that's a critical thingfor hemp beverage.
Where I think it's interestingis that one of the big cells of
hemp beverage investments islook, we can go direct to the
consumer.
We can sell online.
Alcohol has been sold onlinefor a long time and I'm pretty
sure a relatively smallpercentage of alcohol gets sold
online.
People like to go to thesethings and see the pretty

(49:01):
packages, to try it some variety.
There's an experiential.
I like going to TotalMind andBevMo.
There are some veryknowledgeable people there.
I learn stuff.
It's nice, you know, and so Ijust I think that some of the
companies are really overindexing on the direct to
consumer and I don't think thecustomer acquisition cost and

(49:21):
linkedin value actually pencilout.

Ben Larson (49:24):
Can we bring it back to the MSO really quick,
because you were talking aboutthe general inefficiency of the
MSO model and how scale hasn'treally helped them, how they're
seeding market share in some ofthe markets where they were
early movers.
It is about earning marketshare and owning the consumer

(49:48):
and building brand and acompletely different business
model of getting on shelves andreally understanding the
beverage market.
So do these MSOs stand a chanceto succeed in this new market
that they're hedging with?

There's always a chance.
You know it's like dumb anddumber, like one in a million,
You're saying there's a chance.

Ben Larson (50:06):
You're telling me there's a chance, yeah the um I,
I think.

To me it reminds me of when we we first
took a company called can xpublic and when I was going to
all these cannabis conferenceslike can accord and all this
stuff, and I was watching thesepresentations of the early lps,
like aurora and all that stuff,and they were talking about
their big 800 000 square feetit's going to be almost fully
roboticized growing cannabis.

(50:31):
And I looked over at the guynext to me and I'm like I was
about to like bump him and belike this is all bullshit.
Like anybody that's been in areal facility knows it's crazy.
And these guys were just eatingit up, you know, just with a
spoon.
And it was funny because allthe LPs were making these huge
claims of what they were goingto do.
And then you ask if they'veever operated before.

(50:51):
And they weren't.
And it's like to me it was theequivalent of going hey, you
know, a guy coming up to me andgoing, hey, I'm going to go
climb Mount Everest.
No, that's awesome.
What mountains have you climbedbefore?
None, never even been on a hill, you know.
But I'm going to go climb MountEverest.
Like you would never believe.
You think the guy was nuts, butthese LPs were basically saying
the same thing.
Msos are a little bit better,but like, if you haven't, if you

(51:12):
don't, if you have a lot ofevidence that you have not built
a successful business inanything you've done or most of
the things you've done, and nowyou're entering this totally new
space where now you have anexcuse to spend a bunch of money
on online advertising and, ohlook, we're generating losses
for growth.
Like it's all it's.
It's all kind of follow theleader type stuff where you know
, purportedly, when Alexa andSiri came out at Microsoft,

(51:35):
there were some urgent meetingswhere the CEO was like, hey, my
investors are calling me, likewe need to have something.
Like, oh, let's, cortana, let's, let's do this.
It was a total like follow on,not well thought out project.
And and because of all thispressure, and if you look at you
know my favorite punching bag,cureleaf like when federal
legalization looked like it was,you know that we could have
interstate or it was coming safe, whatever there was all this

(51:57):
talk about, oh, what's your youknow glass house?
What's your interstate play?
What's your interstate play?
Cureleaf went out and boughtLos Sueños in Colorado.
If people don't remember, Ithink they paid $60 million plus
for it and they just sold offthat real estate for like two
and a half when they shut itdown.
Like it's it.
You know, you look at the stuffand you go, okay, if I have this
history of all these differentlike, oh, you, you kind of

(52:20):
rushed in and then didn't dowell, like what, why are you
really going to do well?
To me it's like okay, gti isthe highest quality company.
If you want to be, if you wantthe upside from hemp beverage,
why don't you just invest in gti?
Because it's like okay, you geta decent, pretty good cannabis
business.
Yes, there are some issues withall of them.
Yes, their profits may go downthere's, we could talk about it
all day long, but if you wantthe hemp stuff, you're getting

(52:42):
it for free, basically rightthrough their position in
agri-fi.
So why don't you know to methat?
That's kind of my thinking onit.
But we're definitely watchingthe space and there's a couple
operators, um, you know fromwhat I've heard that are really
really good.
Um, trail magic.
Uh, there's um green street.
Um, there's a couple of guysthat I think are are really

(53:04):
solid, and we're, you know we're, we're watching.

Nice.
I want to ask one more questionbefore we wrap you.
You scoffed at the idea of ofinterstate commerce being
something that we could dependon or even should plan for, kind
of laughed at the idea of safebanking.
I appreciate that We've allbeen waiting a long time.
We've watched these things justnot happen forever.
We've watched these things justnot happen forever.

(53:28):
Is there any federal policychange that you do think will
happen in the foreseeable future?
Maybe just in thisadministration?
And if so, what is it?

I think you're .
I still think that there's adecent chance that you're going
to get Schedule 3, although itis a little know the lawsuit.
I don't think village farmswould have brought the lawsuit
against the da and and thrownkind of gum into the works
unless they really thought therewas a strong chance that the da
was actually going to sabotageit.
So that's, you know, a littletroubling.
But I don't actually put a lotof stock in trump.
You know president trump reallycaring about cannabis, like he
tweeted about it once.
He's tweeted about a lot ofthings.
I think people areextrapolating way too much about

(54:13):
Doge and all this kind of stuff.
Like, I think ultimately thisprocess is bureaucratic more
than political and it's justgoing to work its way through.
I still think there's a decentchance of schedule three.
I think it's probably at thispoint 2026, if we're being
honest that people are alwaysoverestimating this stuff.
That said, for a lot of bigMSOs like, schedule three

(54:36):
doesn't really matter all thatmuch in terms of actual cashflow
.
They're already not paying it.
Um, maybe for some of thesmaller operators it makes a
difference.
I also think that it's a goodit's.
It's clearly like a necessarypolicies.
Cannabis, by all rights shouldbe schedule three or lower, like
descheduled, regulated atotally different way, like
alcohol or cigarettes orwhatever, the.
I think that, um, the, the bumpin profitability from schedule

(54:59):
three is not going to last allthat long because it's
competitive market, you know, ifyou saw, remember California,
when they changed their taxesand everybody's like, oh, look,
how fast did that go to theconsumer?
Like like that, yeah.
So I think you know there's a.
If you look at the tax cuts andjobs act and I think 2018, when
they cut the corporate taxesright from 35 to 21, and you

(55:20):
look at net profitability in acompetitive industry like
grocery, didn't change becausethe profits it's competitive
profits, you know went to theconsumer.
I'm not listen.
Safe banking is, let's be real,right.
The reason why safe banking isimportant is because I think a

(55:40):
couple of years ago there was atleast one death in a robbery in
Washington state of a cannabisstore because of the hike.
You know robbers understandthat there's a high cash load at
these things.
Okay, because they don't usecredit cards.
They have to do all thesepickups.
Um, you know, some of thestores run maybe a little bit
too much cash because they'resaving money on their, on their

(56:02):
armored car pickups, but in anycase you had at least one death.
I'm pretty sure there were morenationwide.
I checked the statistics.
There were zero bank robberydeaths that year None, okay,
safe banking unfortunately,senator Booker, laying down for
safe banking back in the day hasprobably effectively cost lives
, okay, but when you look at whypeople the MSO say safe banking

(56:27):
is important, really it's allabout stock price, right,
because they, they're all banked.
It's not like you know they're.
They pay a little bit more andthen they're like, well, there'd
be bank loans available ifthey're.
Well, they already have bankloans right now, right.
So, yeah, maybe it might be alittle bit cheaper.
And there is a big problem withum.
You know I, when I, when Iapplied for a mortgage, I

(56:48):
actually got bounced because ofcannabis from the first mortgage
that I applied for.
So luckily there was.
You know there were other.
You know we went to anotherprovider but it did cost.
It's going to end up costing mebecause the rate was a little
bit higher, um, and so, likeI've experienced that problem.
It is annoying and it is badfor a lot of cannabis.

It doesn't fix that stuff.
It doesn't.
It doesn't turn credit cardprocessing on and force
MasterCard into it.

So yeah, listen, it's nice, but really
what the, what people wink, wink, nudge, nudge.
What people really are talkingabout when they talk about safe
is is look, we want to getuplisted Like that's the really,
that's really what MSso, thesemsos really want.
And now you look at it and yougo, oh, you get uplisted, you
get more liquidity, you get allthis stuff, well, okay.

(57:34):
Well, what's?
What's the stock actually?
Is it going to be?
Is it actually worth more?
Can some of these companies,can you even uplift?
Do you even qualify foruplisting to nasdaq in a couple
years?
You know, because are you goingto be big enough as the market
caps continue to fall and like,a lot of the market cap now, a
lot of the enterprise value now,is debt?
I don't know.
So color me skeptical on thatstuff.

(57:55):
Interstate here's my call oninterstate.
If interstate were legalizedtomorrow, the first material
interstate shipments would nothappen for two years at least,
because you would need toharmonize all the different
there's.
The states have alreadydeveloped all their own programs
.
You would need to harmonize allthe different states, figure
out like, oh, how are we goingto track metric versus bio track

(58:17):
or whatever, like you know,between Illinois and California.
You know figuring out dealsbetween people getting shelf
space, the vertical guys beinglike oh, okay, do I need to like
?
Are these competitive pressuregoing to force me to stock glass
house now?
I think you have at least twoyears.

Okay, wow, so much here.
This has been like a collegeclass in cannabis Wow.

That's.
That is sad.
A good one.
A good one.
You're taking me back to like,like my, my last class in
undergrad dinosaurs.
Like, really, this is, this isa college class.
Just like sitting herelistening about the
Tyrannosaurus.
That's what I've been like,thanks.

It is time for our last call.
So, jerry, what is your finalmessage for our listeners?
Advice called action closingthought.

Well, first I'd encourage, encourage, like
we have a free sub stack.
Uh, you knowbengalcapitalsubstackcom.
Uh, I'd encourage people to to,you know, to subscribe, it's
free.
Like we share our thoughts onthe market.
Um, if people disagree with me,I'm always happy to like get
reason, pushback and debate andget new information.
So happy to have people contactme and and you know, I'm always

(59:32):
happy to chop it up.
My last, my last call would bethat I would really encourage
investors to kind of take along-term view on this stuff and
sometimes the best strategy isto wait, like that's a that's a
valid strategy and I thinkpeople should really think about
that.
I think that it's going to betough for MSOs for a while, but

(59:53):
that there will be winners, andI think people need to stop
anchoring on who the leaderboardis now.
People think it's like you knowthat it's like the Olympic
finals sprint, you know, wherethere's 10 guys and one of these
guys is going to win.
That's not what this market islike.
There are going to be winnersthat are not in the top 10 right
now, and I think people reallyneed to internalize that.

(01:00:16):
Jerry.

Ben Larson (01:00:18):
Dereviani from Bengal Capital.
Thank you so much for joiningus.
I really appreciate the soberinsights.
I feel like it was just reallyreally informative and
insightful.
So thank you for spending thetime with us, thanks for having
me Real pleasure Awesome.

(01:00:38):
And thank you to everyone thatwas engaging during the show,
during our recording Robert SeanDavis, samit Tool, jamie
Campbell, taylor Eileenileensewell our last guest so many
others and this makes it so muchfun to know that you guys are
watching while we're recordingand then listening to us as we
upload to apple podcast andspotify.

(01:01:01):
So make sure you download theirrate, review us, do all the
shares, do all the likes andthen engage with us.
Continue to tell us who youwant to have on the show, what
topics you want us to cover,what's top of mind for you as
far as the news go, of course,big shout out to our teams at
Virtosa and Wolfmeyer, ourproducer, eric Rossetti.
Thank you for pressing all thebuttons, getting all the clips

(01:01:23):
out and helping us show up theway we want to show up in the
digital world.
As always, stay curious, stayinformed and keep your spirits
high Until next time.
That's the show.

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#080 - The Cannabis Industry is in a Knife Fight - Who Survives? w/ Jerry Derevyanny, Partner @ Bengal Capital

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.css-14f5ked{margin:0;word-break:break-word;display:-webkit-box;-webkit-box-orient:vertical;box-orient:vertical;-webkit-line-clamp:2;overflow:hidden;}#080 - The Cannabis Industry is in a Knife Fight - Who Survives? w/ Jerry Derevyanny, Partner @ Bengal Capital