August 8, 2025 • 50 mins
A hundred episodes in, and the journey has only just begun. This milestone celebration of High Spirits offers a candid look into what we've learned about cannabis entrepreneurship, regulation, and the future of this evolving industry.
When we first started recording our conversations with friends in the cannabis space, we couldn't have predicted the wealth of knowledge that would emerge. Now, as industry veterans share that our show has brought them hope during challenging times, we're reminded of why we press record each week – to create a community where cannabis entrepreneurs don't have to feel alone.
Our Ask Me Anything format yielded thoughtful questions that cut to the heart of today's cannabis landscape. What would we wish for if a genie could fix cannabis regulations? For AnnaRae, it's full federal descheduling paired with a tiered retail model that honors dispensary pioneers while expanding access through conventional channels. Ben took a more incremental approach, advocating for cannabinoids to be recognized as their own unique category in federal regulations rather than trying to fit them into existing frameworks.
When discussing which states offer the best cannabis business opportunities, we acknowledged a difficult truth – none are truly set up for long-term profitability by traditional standards. Yet some markets like Maryland, New Mexico, and Illinois present better conditions with their constrained license models and tax reform momentum. We caution against markets with unrealistic valuation hype and suggest looking for indicators like wholesale pricing stability and retail density before expansion.
The conversation turned emotional when addressing the struggles of legacy farmers in California. These pioneers who built the industry now find themselves crushed by over-taxation and over-regulation. Our proposed solutions include tax reform, ending local control barriers, and potentially implementing programmatic canopy caps tied to market demand – controversial perhaps, but potentially necessary to protect the value of the plant.
Looking forward to the next decade, we debated whether traditional retail channels would eventually overtake dispensaries. Will normalization mean beverages and edibles in grocery stores while dispensaries remain for high-potency products? The answers might surprise you.
What questions do you have about the cannabis industry? Let us know what topics you'd like us to explore in our next hundred episodes as we continue helping you stay curious, informed, and keeping your spirits high.
--
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.
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Ben Larson (00:00):
You guys now have a hundred episodes to listen to
before you enter the space.
But yes, you're right, there'sno better time than now, because
earlier it would be that muchharder.
AnnaRae Grabstein (00:10):
It would have been that much harder.
Ben Larson (00:18):
Hey everybody, welcome to episode 100 of High
Spirits.
We're recording Wednesday,august 6th 2025.
And I can't believe we made itAnna Rae 100.
I know I'm so grateful andtotally going off script.
So here we go.
Wow, holy shit, it's justsomething that we just started
(00:43):
to do on a weekly basis.
Decided to start pressingrecord, start calling our
friends on to the show and, alittle over two years later, I
think we've only missed three orfour weeks here and there.
100 episodes Feels pretty good.
AnnaRae Grabstein (00:57):
It feels really good.
I think that in my life I havealways struggled with discipline
and sticking to things formyself.
When I'm trying to help otherpeople with things, I'm able to
be this like great, disciplinedshaman and Jedi along the way,
and I think I've stuck with itbecause of you, because we're in
it together.
I think that if it would havejust been me on my own, it would
have been a lot harder.
Ben Larson (01:18):
It's been one of those true relationship things
where I don't know how manypeople do couples therapy, but
what you often hear is likerelationships really fall apart
when both parties give up aslong as there's always one party
trying, and I feel we've hadthat balance.
There's been weeks where we'vepulled each other into it.
There's been weeks where we'vegiven each other the space to
(01:39):
take a break, but we've nevergiven up on the show.
I think the further we go, theless likely feel really proud of
.
AnnaRae Grabstein (02:06):
We've just been getting constant
reinforcement that people areengaged and are listening and
are learning and enjoying whatwe're doing, and so it was your
idea to do this Ask Us Anythingepisode for the 100th, and at
first we didn't get a ton ofengagement, but then we ended up
getting some incrediblequestions, and so I think it
just proves that not only havewe've done this together, but
(02:27):
there's been all these peoplethat have come along some who
have been our guests, but otherswho haven't and and who now get
to be a part of this with us.
So I'm really excited for today.
Ben Larson (02:35):
It was funny as some of our guest questions were
coming rolling in, I was like,oh, what does this mean?
That it's our guests first thatare asking questions?
But then I thought about it.
I thought about who we madethis show for and who we tend to
go and invite to be on the show, and so the fact that our
guests are continuing to listen,I think, just means that we're
(02:56):
doing what we set out to do andthat's creating content for the
business leaders of the space.
So I really appreciate everyonesending in their questions and
we're going to jump into it.
AnnaRae Grabstein (03:07):
Yeah, and also today if you're just
listening and you're notwatching on YouTube or LinkedIn
we did a little thing today.
We up leveled, we got threecameras what's up cameras?
So we're just having some fun.
We're in person together.
It's always more fun when we'rein person together.
(03:27):
So before we get started, let'sjust give a little cheers.
Yes to all the high spirits.
Seth Yakatan (03:35):
Yep.
AnnaRae Grabstein (03:36):
Yeah, okay, I think we should just jump right
into our questions and getstarted.
Ben Larson (03:41):
All right, I think we have a couple of audio
recorded ones.
Seth Yakatan (03:52):
Yeah, let's jump in.
Who's our first one?
This is Seth Yakatan, wishingthe crew here the most happy of
hundredth episodes at HighSpirits.
So, anna Rae and Ben, given theduration that you have had in
the podcasting world, wonderingfor your listening audience, who
you have been so kind toeducate for the last few years,
(04:13):
what's the most gratifying thingthat has occurred for each of
you as a result of the creationof High Spirits?
Ben Larson (04:21):
Wow, the most gratifying thing I'm going to.
I'm going to take theopportunity to do a couple.
One is shout out my cohost isjust being able to connect with
you every week.
Talk about business, becausewhat you guys get to hear on the
show is the conversation thatwe have with our guests, but we
(04:42):
often have a lot of reflectionson what that conversation is.
Maybe this is like premiumcontent that we have to record
in the future, but just how wedecide to carry that information
forward and apply it to ourbusinesses, and so for me, it's
just the immense amount ofperspective that I get for
running my business with Vertosa, all these different questions
(05:02):
we get to ask.
It's just more information thatI get to put in my head, and
this is not the type of stuffyou get off of ChatGPT.
This is very hyper-specific,hyper-relevant, usually relevant
as into what's happening rightnow because industry changes so
quickly.
So that's been hugelygratifying.
What about you?
AnnaRae Grabstein (05:23):
Yeah, I guess two things too.
I think it's been incrediblygratifying.
What about you?
Yeah, I guess two things too.
I think it's been incrediblygratifying to be in person at
conferences and have people comeup to me and tell me that
they're listening and thatthey're learning.
I had someone come up to me andsay that the industry has just
been so hard and they've beenthrough the full roller coaster
and that there have been timeswhen they've really felt like
they couldn't move forward.
(05:44):
And when they've listened toour content, it's brought them
hope and brought them back tothe reason that they're doing
this, and it made me feel sovalidated, because that's
exactly why we're doing this isto make people feel not alone
and also to help them feel moreinformed.
And then the second thing thatis incredibly gratifying is just
(06:05):
how I've been able to witnessmy own personal growth in terms
of challenging myself to getbetter at making content and put
myself out there in a morevulnerable way, because we are
winning if we make this lookeasy, because it's not easy.
It takes a lot of effort andself-reflection and also just
trying to improve little thingslike the way that we ask
(06:28):
questions or the way that wemight say, or and too much.
Still working on that, stillworking on it, but it's been
gratifying to see theprogression.
So thanks, seth, for thequestion, thanks for being like
a huge cheerleader for usthrough this process and being a
great guest.
Thanks, thanks so much.
Ben Larson (06:45):
Yeah, absolutely.
AnnaRae Grabstein (06:46):
Yeah.
All right Eric cue up our nextquestion.
Melissa VonderHaar (06:50):
Hi, this is Melissa Vonderhaar from
TradeWorks, from IC StoreInnovations and chair of the
CSPC store cannabis board, andwith the two of you being some
of the most foremost experts inthe cannabis space and talking
about the many problems thatexist here, I'd like to know if
you had one wish from a magicgenie that would help fix
(07:15):
regulations to make it easierfor cannabis businesses to
thrive and expedite thenormalization of cannabis in the
United States.
What would you wish for?
And just to make it interesting, you cannot wish for the
government to have never madecannabis illegal in the first
place.
What could we do today thatwould help fix this mess?
AnnaRae Grabstein (07:36):
Yeah, melissa , it is a mess.
You're right, that's not a lie.
I had to think about this one alot and I'm just going to go
for it.
And I'm going to say that if Ihad one genie in the bottle, it
would be full federaldescheduling and legalization,
paired with a nationalregulatory framework that sets
clear and fair rules about howcannabis can be grown, sold,
(07:56):
marketed and moved across statelines.
I want to, within that context,honor what I think is the
importance of the dispensarypioneers, because I think that
as we think about whatnormalization looks like, we
also need to be intentionalabout the people who have really
jumped through the flaminghoops to create this market.
(08:17):
So, really, when I think aboutthat genie and what that
full-scale model looks like is atiered retail vision, and I
think that licensed dispensariesshould continue to exist for
inhalable high potency products,and I also think they should be
allowed to co-locate with otherbusinesses.
And then I would want toinclude conventional retail into
(08:40):
the mix Think bodegas, healthstores, grocery store chains
that would be allowed to selllow dose edibles and beverages,
topicals and wellness stuffReally like bringing cannabis
into everyday life, whereconsumers are.
And then e-commerce I wouldwant that to exist too, because
we're talking about the genie inthe bottle, and it's 2025 and
(09:01):
everything is online, socannabis should be no different,
yeah.
Ben Larson (09:05):
You went all in.
All in All right, yeah, allright.
Well, I'm going to approachthis question a little bit more
from a nuanced perspectiveunderstanding the world that
we're operating in right now,Not the genie like the reality
of it's like a genie withtoday's baseline.
Okay, great, right, good, solike we have to the full
spectrum.
(09:26):
We need achievement, a stepalong the way yeah, before I get
there, I I would just like tosay I know the question is
position, a commercialization,all that kind of stuff, but I
think it's really important thatwe don't lose the narrative of
like.
We need to decriminalize,deschedule and get the tens of
thousands of nonviolentcriminals out of jail.
(09:51):
So that's my first wish.
Second wish understanding thecurrent landscape is we need
Congress to identifycannabinoids in the FDCNA as its
own unique category, so we canstop having the discussion about
whether it fits intosupplements or as a food
additive or anything.
They're cannabinoids.
(10:12):
They deserve their ownregulatory pathway and that
allows us to start creating therules that allow us to then
determine whether it goes to theTTB or otherwise.
And so that's step one.
The next step after that is whatdo we do with hemp and cannabis
?
Obviously, calling it one plant, making sure that was legal
(10:35):
everywhere and gettinginterstate commerce.
That is the ultimate goal.
But how do we get there?
I think we have to survive witha bifurcated market for a
little while where we allow forinterstate commerce through
something like the States Act,so cannabis operators can ship
from one state to the next.
That we have this heavilyregulated system hopefully not
(10:55):
as heavily but still regulatedfor the full suite of cannabis
products, the hyperpotencies,all that kind of stuff.
And then we have the low-dosecategory that is sold in the
mainstream channels, anywherealcohol, tobacco and other adult
substances are sold.
So that's my midterm.
AnnaRae Grabstein (11:12):
Jane Fox Ben just laid out like the actual
genie in the bottle path insteadof just jumping over all the
steps to get there.
I really like what you'retalking about as it relates to
the FDCNA and cannabinoidregulatory path.
I wonder why you would keep abifurcated hemp and cannabis
(11:33):
reality within the openconstruct of what if we could do
anything?
Ben Larson (11:41):
Yeah, I don't know.
I try to remain optimistic, butdealing with policy for the last
several years has made me verypessimistic as far as what we
can achieve in the legislature.
But it's hard to imagineindividual states giving up
their stigmatized perspective ofwhat cannabis is or what hemp
is, and we need to preservestates' rights throughout this
(12:05):
path, right here.
And so, when I think about thenear-term solution, it's like we
have to preserve what Tennesseehas deemed is right for
Tennessee and what Minnesota hasdeemed right for Minnesota and,
I hate to say it, but whatCalifornia has deemed right for
California right.
And so in order to preservethat, we have to acknowledge
that hemp and cannabis exist intwo unique regulatory frameworks
(12:29):
, but we need to frame them upbetter, right Like we need
better regulations for hemp, weneed the federal government to
provide for consumer safety,testing standards, labeling
standards, not overdo it.
That's my big wish, and that'sa big wish, that's a genie
worthy wish is to like not havethe federal government overdo it
when they implement regulations, but they need to kind of stop
(12:51):
there and then pass it over tothe states to determine how they
want to regulate these products.
AnnaRae Grabstein (12:57):
It's fun to think about, but it also kind of
makes me feel crazy, becausethe incremental progress that
we've experienced as an industryand as a movement is the focal
point, as opposed to these bigdreams.
We aren't going after thesethings necessarily that you and
I are talking about.
(13:18):
We're instead kind of gaininginches.
So I think we're going to keepgaining inches and I think
there's a later question comingabout, maybe what 10 years looks
like from now and who wins.
So we'll touch on that a littlebit later on the episode.
Ben Larson (13:33):
Yeah, yeah.
Well, let's progress to laterin the episode, shall we?
AnnaRae Grabstein (13:37):
Okay, Next question.
Producer Eric cue it up.
Chiah Rodriques (13:41):
Hi, my name is Chia Rodriguez.
I'm a small legacy farmer inMendocino County, California,
and I am wondering how can theCalifornia cannabis industry
correct itself and honor thelegacy growers and cultivators
from where this industry startedlegacy growers and cultivators
(14:03):
from where this industry started.
So, as a small legacycultivator myself, I'm concerned
seeing a lot of my friends godown and close because of an
over-taxation andover-regulation.
As we know, it's been achallenge and it's also a
challenge for the consumers,unfortunately, who aren't
spending as much in dispensaries.
So my question is like how dowe course correct and do you
(14:24):
think it's possible?
Thank you.
Ben Larson (14:26):
Wow.
AnnaRae Grabstein (14:27):
Yes, first of all, thank you, chia.
You're voicing something that'spainful and urgent and very real
.
A system is failing the peoplewho built it, the legacy growers
, the multi-generational farmersand the small operators that
are trying to do things right,and it's painful to watch that
happen.
It's painful for it to happento you and to your friends, and
(14:49):
especially in a place likeMendocino that should be the
heart of the legal cannabisstory in California.
So when I think about coursecorrection, I think about voters
and policy reform in California, and I think, if we're going to
talk about actually creatingcourse correction as challenging
, as uphill as it is, I do thinkwe have to go back to the
(15:10):
voters in California.
The regulatory system that wehave now was born out of
well-intentioned but deeplyflawed ballot initiative out of
well-intentioned but deeplyflawed ballot initiative and
it's created a structure that'sfundamentally unsustainable and
almost impossible to fix becauseof the voter initiative itself.
So there's a lot of peopleinvolved in thinking about what
(15:32):
a new voter initiative couldlook like.
I'll focus on three things thatI think would be the key
pillars.
Ben Larson (15:38):
Yeah, Before we get there.
AnnaRae Grabstein (15:40):
Yeah, and I don't want to derail you.
Yeah, please.
Ben Larson (15:41):
We did just have Amy Jenkins on the show.
And in that show one of my keytakeaways was that it could be a
legislative like, brought bythe legislature.
AnnaRae Grabstein (15:53):
The legislature could put something
on the ballot Right Withouthaving to get all the signatures
.
Ben Larson (15:57):
So they need to bring it to the ballot.
AnnaRae Grabstein (15:59):
Yes, so you'd save like you still need the
voters to.
You still need the voters tofix the voter initiative Proceed
, yeah.
So you know there's threeelements to this that I think
are important.
Two that people talk about alot, one that is maybe a new
idea for today.
So the two that people talkabout all the time is tax reform
.
I think that that is obvious.
The tax burden is crushing theindustry.
(16:20):
It's driving people to theillicit market.
It's making it so that peopleare paying more taxes than
actual cost for their weed.
It's insane.
And then there is a localcontrol problem that has created
cannabis deserts and lack ofretail access.
So those things are tablestakes for a new voter
initiative.
We need tax reform and we needto end local control as a
(16:41):
barrier.
But the concept that I want tothrow out there today, which I
think has not been talked abouta lot because it's highly
controversial and you mightdisagree with me, but
programmatic canopy caps, whichmeans that the state would need
to tie the licensed canopy tothe actual market demand, and
right now California hasessentially unlimited
(17:03):
cultivation in terms oflicensing and square footage and
it's crashed the market andeven in the largest cannabis
economy in the US.
The demand is nowhere near highenough to support the level of
production that's happening inthe market.
And the way that I think aboutthis is that right now in the
news there's a ton of talk abouthow the Fed adjust interest
(17:23):
rates based on macroeconomicindicators.
We've got our president kind ofthrowing punches at the Fed
chair because there is kind ofdifferent ideas about where
interest rates should be.
I think cannabis needs asimilar mechanism.
Programmatic canopy allocationwould protect the value of the
plant and give cultivators,especially legacy ones, a
(17:45):
fighting chance.
This is a concept that I cameup with as I was thinking back
to the initial concept of oneacre caps in California which
was thrown out.
Ben Larson (17:53):
Yeah, I was going to say if they had not reversed
that and allowed for thestacking of licenses, like we
probably would have been fine.
AnnaRae Grabstein (18:01):
We would have been fine.
But I don't think we can putthat genie back in the bottle
and that there has been, youknow, thousands and thousands of
acres of canopy that's beenbuilt out and I don't think that
we should take that away fromlicensed cultivators If we try
to rebuild from the ground up.
But I think that what we can dois have a process, kind of like
we have the Fed at the federallevel that looks at what's
(18:24):
happening in the market,assesses the demand and
allocates how much canopy isallowed to be grown that year
and divides that, using somesort of algorithm, to the
licensees.
And it will be reallycomplicated, but I think it's
the key to not creatingoversupply in the market, which
is the biggest problem thatCalifornia is facing and that
(18:44):
legacy farmers like Chia are upagainst trying to compete.
Ben Larson (18:47):
Yeah, I don't have any disagreements there.
I just think there is thisfundamentally just a much larger
issue.
Right, like?
I spent some time on the hill afew years back talking to a lot
of the growers up there, andthey just just the sheer
infrastructure like gettingthrough, like the purchasing
(19:08):
cycles of dispensaries goingthrough the distributor.
By the time you're able tonavigate that, you're already
behind the curve as far as whatthe consumer wants.
Right, when the farmers wereable to sell directly to the
consumer, they were seeing amuch faster turn of product and
they were able to adapt theircrops to what the consumer
wanted.
And now it's just like thingsare not aligned.
(19:30):
There's the synergy that hasbeen lost between the consumer
and the farmer and it's becauseof all these layers of
bureaucracy in between that isrequired because of the
regulations, and so unravelingall that is challenging.
At the end of the day, we needto stop treating it like
plutonium, right, like it's weed.
AnnaRae Grabstein (19:48):
It's a plant, people it's a plant.
Ben Larson (19:50):
Yes, we need to make sure that people aren't like
spraying tons of pesticides onthem or that there's heavy
metals in the ground.
I don't know how we do this inCalifornia, at least with the
current state of Sacramento andhow everything is.
There's just so many interestsinvolved.
AnnaRae Grabstein (20:04):
Well.
So if we aren't able toactually change the underlying
policy and a ballot initiativeis out of reach, I want to throw
out another concept that Ithink is relevant both to
California legacy farmers, butalso to the nationwide small
business community of cannabisproducers and cultivators,
(20:24):
specifically, and many of youguys, if you listen, you've
probably heard me refer to mytime working in the meat
industry and you might haveheard of Organic Valley.
Organic Valley is a nationalfarmer owned cooperative in the
dairy industry and it's a reallycool, unique model that is a
farmer-led cooperative, and Ithink that this is a model that
(20:46):
could be really interesting forcannabis farmers that are small
and haven't attained scale as away to band together and deal
with some of the things that youwere just talking about the
complications of dealing withthe consumer and distribution
and compliance, and accountingand HR and all the things that
are not about being a farmer andand about getting to market.
(21:06):
I think that what it is is.
It is a bringing togethereveryone for shared resources
under a single, unified brand,creating cost sharing, bulk
purchasing, collectivebargaining power.
Haven't we seen this already?
Ben Larson (21:21):
Like Mikey Steinmetz .
AnnaRae Grabstein (21:23):
But that was never a co-op.
So that was Flocona, andFlocona was its own individual
corporation and they were buyingfrom small farmers, but they
could turn that off at any time.
What I'm talking about is anactual farmer-owned cooperative.
That isn't about people gettingto buy and then deciding that
they just want to go grow itthemselves instead of buying it
(21:44):
from farmers, and this is a bigdivergence from individual
farmers that have created theirown brands that they're proud of
, and I don't want to take awayfrom that.
Like, that's certainly a paththat people can choose to try,
but it's a heavier lift Well andbring back the farmer's market.
Ben Larson (22:04):
Let them take their crop, put it in the farmer's
market and let consumers go andpick it up.
I don't know.
I remember the two 15 dayswhere you get to do the deli
style and look at it, smell itand decide whether you want to
buy it or not, and that's howyou chose your strains.
It wasn't oh, is it like 34 thc, at least for me, and I I know
(22:27):
I'm a low dose, a low doserstill, so maybe my vote doesn't
count on this one I know I feelyou well.
AnnaRae Grabstein (22:33):
So, yeah, chia, I think that we both think
course correction is possiblebecause we are resolutely
committed and we care aboutCalifornia.
But I think it's going to takea lot of different levels.
Levers, it's policy, it'sbusiness models, it's channels
of access, it's all those things.
Ben Larson (22:51):
Sorry, I know you're trying to wrap this one up and
go on the next one but can wejust talk about taxes real quick
?
Because, again, I want tohighlight something that came
out of our recent episode withAmy was just that in order to
get stuff done, we need tounderstand who the beneficiaries
of these tax benefits are, andwe need to go and have an
(23:11):
economics discussion with them.
So I think the industry inCalifornia needs to band
together and put together aforward looking economic report
about, about, like, what is thesituation currently, where is it
trending?
And if we listen to, you know,john d rockefeller and his like
thoughts on prohibition andreversing, uh, alcohol
prohibition how we might be ableto benefit from lower barriers,
(23:34):
lower taxes, to create anoverall more vibrant industry
that we can all benefit from.
And so I don't think thatconversation has happened yet
and I don't think the study hasbeen done, but that is how we
get to a future that is viable,amen.
AnnaRae Grabstein (23:51):
Yeah.
Ben Larson (23:52):
Producer Eric.
What's next on the list?
Scott Wessler (23:55):
Hi Ben and Anna Rae.
This is Scott Wessler.
I'm a big fan of what you guysdo, a long-time listener.
I've got a two-parter here thatmay be a bit controversial in
the current regulated cannabisspace.
Part one 10 years from now,which market will be bigger
(24:22):
ingestible products, beverages,tablets and capsules, sprays,
etc.
Moving through traditionalretail channels or the entire
regulated dispensary market?
And part two does the currentregulated cannabis dispensary
model hold up or disappear asalternate channels emerge?
Now I want to make clear I'm inno way anti-dispensary or
anti-regulated recreationalcannabis.
(24:44):
I've been fighting the fight inthis space for well over a
decade, but as both state andfederal regulations continue to
prevent rational growth, I'mcurious to hear how you
prognosticate the overall marketevolving.
Thanks so much, guys.
Keep doing what you do.
Ben Larson (25:01):
Thank you, scott.
That could be controversial,but it's something that I think
about a lot and I jokingly saidyes right after he said
traditional marketplaces,because I do think generally,
that's where it's going to goand that's where we've always
wanted it to go, and I think ifwe're fighting against that
happening, we're fightingagainst inevitability and what
(25:23):
we actually all wanted asconsumers, and so I do think the
answer is in through thetraditional marketplaces.
But I don't think that meansdispensaries go away.
So, you know, I mentionedbifurcated from a regulatory
perspective of the supply chain,but I'm going to say bifurcated
differently here, where it'slike I do imagine that much like
(25:45):
the alcohol industry in Utah orKansas or Oklahoma, where you
have broad access to these lowerdose products and then
mainstream consumer channels,and I think you'll see a ton of
volume there, a volume thatprobably eclipsed what we would
see in the dispensary channelthat I'm about to define.
But, like in the dispensarychannels, like that's where you
(26:06):
get your full suite of cannabisproducts, that's where you get
the 100 milligram, 200 milligramif you're Michigan or more, but
like, once you're consumingthat many cannabinoids, you're
probably pretty comfortablegoing into dispensary, and so I
think this bifurcated model iswhat the eventuality is.
I think the largest volume andthe largest revenue will come
(26:27):
from the traditional channelsand I think there's still
opportunity for there to be somebig dispensaries, just the same
as there are big chains likeCircle K and 7-Eleven.
But I don't think everydispensary and this might be the
controversial part I don'tthink every dispensary is going
to create generational wealthfor its owners.
(26:47):
I don't think that's the design.
I think, at the end of the day,you're a specialty market and
some of them are going to beakin to your neighborhood liquor
store.
Did I say anythingcontroversial?
AnnaRae Grabstein (26:59):
Yeah, I think that there are things that we
agree on and things that we seedifferently.
Scott asks specifically about10 years and that got me really
thinking of like how much policydo I think will actually change
in 10 years?
And the truth is is that Idon't think that we're going to
see true interstate commerce andcommercial normalization within
(27:21):
the next 10 years.
I don't think that we're goingto see true interstate commerce
and commercial normalizationwithin the next 10 years.
I don't know.
Ben Larson (27:24):
Look how far we've come in the last 10 years.
Have we come that far?
Well, last 10 years we weregetting ready to celebrate a
sweeping legalization ofcannabis, but what's happened?
AnnaRae Grabstein (27:36):
federally in the last 10 years?
Sure, but like Truly what hashappened federally in the last
10 years.
Sure, but like Truly what hashappened federally in the last
10 years.
Ben Larson (27:41):
Yeah, except for the Farmville.
AnnaRae Grabstein (27:43):
So here's my take that in 10 years the
regulated dispensary market andthe conventional retail
cannabinoid-based ingestiblemarket will be tied, and what
that means.
Ben Larson (27:55):
Isn't it kind of tied right now?
AnnaRae Grabstein (27:57):
No, I think that Beau Whitney says that it's
tied.
But I think that Bo Whitneysays that it's tied.
But I think that when you talkabout like what the data says
about where hemp beverages areand where intoxicating hemp
edibles are and things like that, it's it's maybe 30% of the
size of the regulated cannabismarket.
It's the data's not there, so Idon't know.
But I'm going to say that we'relooking at like a $30 billion
(28:20):
cannabis market today and a $10billion intoxicating hemp market
.
People can call me out and tellme I'm wrong, but either way, I
think that it's going to beroughly tied and I think that
what that means is that theregulated cannabis market is
going to continue to grow withinits constraints, that slowly,
more states are going to comeonline, there will be more
dispensaries.
Slowly, more states are goingto come online, there will be
(28:42):
more dispensaries.
Consumers will become morecomfortable going to
dispensaries.
But while that's happening,there will be hemp-derived
beverages and wellness formatsthat are going to continue to
hockey stick and they are goingto be cannibalizing the new
consumer that is interested infinding alcohol alternatives and
really kind of creating a newconsumer that isn't the
(29:03):
dispensary consumer, and that itwill keep expanding and it will
be expanding at a faster ratethan the dispensary market.
I'll pause because I can tellyou want to call me out.
What do you think?
Ben Larson (29:13):
Well, no, I'm just.
I'm going to change the rulesof the game a little bit.
So you mentioned earlier abouthow licenses should be applied.
Right, it's like it shouldn'tbe.
This space is designated forcannabis.
It's like this space is allowedto serve cannabis is the style
of license.
So that is something thatdoesn't require the approval of
(29:34):
the federal government.
That can be done on astate-by-state basis, and that
has to happen.
Like this whole idea of likeconsumption lounges right, it's
like we should be able to issuea cannabis consumption license
to someone who serves food orwatches move, like serves movies
or whatever.
AnnaRae Grabstein (29:54):
Like you should be able to apply for a
cannabis license, and the minutewe start doing that and start
seeing that, then you'reessentially accessing the
(30:15):
mainstream channels and I dothink that's kind of like a
hybrid, so I didn't get to tellyou all about that.
It was mind-blowing.
And at that event it was thefirst time in the history we
think of a Grateful Dead-relatedshow that legal cannabis was
sold at the concert.
And this was because it's atthe same venue as the Outside
Lands Festival that's happeningthis weekend in San Francisco.
(30:36):
And so the Embark dispensaryteam that is doing all of the
on-site sales at Outside Landsset up a week early for the Dead
Show, and so they do this thingcalled Grasslands, and I will
say it's pretty cool that youcould buy weed at the concert.
But you had to kind of exit thevenue, walk through a special
(30:57):
secondary area to get another IDcheck.
There was a whole bunch ofsecurity that you had to weave
through to get into this fencedin area where you bought weed
and consumed weed.
But you were kind of allowed tojust bring your weed in through
the security gate and there waslots of weed being smoked.
And on the way to Grasslands Imust have walked by 25 bars that
(31:19):
were right in the crowd, thatyou didn't have to go to a
special place.
So it's it's like it shows theexact dynamic of the
complication of like, yes, it'scool that you could buy weed
there, but it isn't normal, it'snot actually integrated or you
could just go to minnesota where, at a music conference, they
did allow nowadays, which is ahemp derived music festival, not
(31:40):
conference, sorry yeah festival.
Ben Larson (31:43):
I go to conferences I don't know about all you
heathens, but yeah, it's like atitle sponsor with like a big
kiosk in the middle of of theconcerts and being able to, and
that's what I'm talking about.
AnnaRae Grabstein (31:55):
That's what we need, and that's mainstream
channel, that's mainstreamchannel well, and so that brings
up this question that scottasks of does the dispensary
model hold up?
And I think that you said it.
I think that it will hold up,but it's not going to dominate.
I think that cannabis is goingto start popping up in more and
more different locations, and ifit's cannabis or if it's
hemp-derived cannabinoids kindof remains to be seen over the
(32:19):
next 10 years what happens andhow that all happens.
And it's possible we might seea state that actually chooses to
create a regulated cannabisprogram and open up channels to
retail access that we haven'tseen other states do.
It isn't off the table that astate that doesn't have an adult
use program yet could decidethat Walgreens could sell
(32:40):
cannabis at it, even though nostate has done that before.
So I do think that thedispensary channel holds up.
I think it becomes a premiumchannel for high potency
products, for inhalable products, it's a trusted environment for
education, curation and it's aplace for connoisseurs and
medical patients, but that mostconsumers are going to be
(33:02):
excited to participate in moreconventional retail channels if
they are available, have itactually be legal, because if
this were still like a medicalmarket, we'd still call it
medical marijuana.
Ben Larson (33:14):
I would understand this highly guarded dispensary
kind of like feel highly guardeddispensary kind of like feel.
But we've all celebrated thispersistent rollout of cannabis
legalization and until theintoxicating hemp movement
rolled around, I didn't reallyfeel what it was like, what
(33:35):
legalization truly was.
Like it's faux legalizationthat we're all living in the
cannabis market.
And then when you go tominnesota or places like or
texas I know it's in limbo rightnow, uh or tennessee, and you
get to order it off of a menuwhile you're sitting at dinner
or go to a bar and have it be atrue alternative to alcohol,
like that's legalization, that'swhat we've all been voting for.
(33:56):
And until we get there, likewe're just in this like
purgatory where I don't we'rejust paying a shit ton of taxes
to employ a bunch of regulatorsto.
AnnaRae Grabstein (34:06):
But that legalization that you're talking
about in Minnesota andTennessee on the intoxicating
hemp side doesn't include allthe foreign factors that
everybody wants, and so you know, yes, you are building an
incredible business focused inbeverage and beverages winning
in those places, but there'ssome people that like to smoke
weed, I know, and they like toinhale weed and they deserve to
(34:27):
be able to do so, and we need tocreate a system that works for
everybody.
I know.
Ben Larson (34:32):
I think we agree.
I'm not saying that onlybeverages should be legalized.
I'm just saying that's whatlegal looks like it's just that
isn't fully legal.
AnnaRae Grabstein (34:39):
That's what legal looks like.
It's just that isn't fullylegal.
That's all I'm saying is thatthat's like legal for some, not
for all, and like if we'retalking about legal for all, I
think that it's going to end upin this weird.
You know, 10 years from nowwe're still going to have
inhalables in some weird awkwarddispensary location, likely or
behind a counter, the waycigarettes are, maybe.
But from a business perspective, I think that it's a tie.
(35:04):
I think that and that's asignificant that means a
significant increase innon-inhalable products in terms
of their overall proportionalmarket kind of position, because
right now, inhalables betweenflower pre-rolls and vapes are
way more than 50 of of themarket, and I think that the
future is moving us more towardsa 50-50 environment.
Ben Larson (35:26):
Okay, so when we're still recording this 10 years
from now, I'll first say that weagree on 95% of what you just
said, the last piece about whatthat split is in 10 years.
I just think that you're goingto be really surprised at what
is accomplished in the next 10years.
AnnaRae Grabstein (35:43):
So how wrong am I?
What proportion of the marketwill inhalables have compared to
non-inhalables?
Ben Larson (35:50):
What proportion will inhalables have versus
non-inhalables?
I'll say 25%.
AnnaRae Grabstein (35:57):
Inhalables will be 25% of the market,
mm-hmm, okay, well, I guess thatwill be like.
How many more episodes?
Ben Larson (36:08):
About 500, I guess.
AnnaRae Grabstein (36:11):
We'll figure it out.
Yeah, 50 episodes a year, 10more years, 500 more episodes.
Scott, we'll let you know.
Let's go.
Okay, I think we are to ourlast question.
All right, we're going to readit.
Ben Larson (36:25):
Our last question, Kimberly Gamboa, out of
California, From yourperspective.
Your perspective.
We'll start with you, Anna Rae.
Chiah Rodriques (36:33):
Okay.
Ben Larson (36:34):
Which states are best set up?
As sorry reading is my secondlanguage, which states are best
set up for cannabisprofitability for both brands
and retailers?
What are the market factorsdriving that?
When you approach this question, are you thinking about things
like tax structure, licensinglimits, pricing stability,
consumer behavior or capitalaccess?
(36:56):
And what business indicatorswould you use to evaluate
whether a market is truly worthentering?
There's a lot there.
AnnaRae Grabstein (37:05):
There's a lot there, and so, yeah, kimberly,
what I heard you asking is whatstates are the best states and
where can people make money andwe're talking regulated cannabis
, just to kind of set theparameters.
I think that it's aboutregulated cannabis.
When she's talking about taxesand licensing limits, yes, but
(37:26):
maybe we should talk about both.
So let's talk about both.
I'll start with the regulatedcannabis and I'm going to take a
realistic, not overlyoptimistic perspective, and I'm
going to say that, honestly,none of the US cannabis states
are currently really set up forlong term profitability.
Okay, that's the truth Scannabis states are currently
really set up for long-termprofitability.
Okay, that's the truth, we agree, not in the least the way that
(37:47):
other industries define it.
But some states are less brokenthan others and I can kind of
break down what I think are someof the better places to operate
.
Ben Larson (37:56):
Yeah, I mean, I would like to know, because
you're much more attuned to thisthan I am.
AnnaRae Grabstein (38:00):
So I think that when you're trying to look
for states that you can besuccessful, the first thing you
have to do is look inside ofyourself, and we had a
conversation with someone todaythat reminded me of the
importance.
It was a great metaphor aboutbeing a motorcycle and not a
semi-truck.
And the difference between acompany that is a motorcycle
compared to a semi-truck is thata motorcycle can park anywhere,
(38:22):
they can weave between lanes.
They don't have a huge heavyload that's dragging them down.
I think that if you're going tobe a company that is looking to
expand, you have to be able tobe nimble and you have to be
flexible and you can't be likethe DMV.
You have to be able to makedecisions quickly and actions
and people need to be empoweredin your company.
That's the first thing.
But every state is hampered bysome level of overregulation and
(38:51):
taxation.
If I was going to be doing anexpansion of a brand, I would
look for constrained licenses,meaning that there is not an
unlimited amount of licenses andthat there's some type of tax
reform, momentum or notovertaxation.
So some of those states wouldbe states like Maryland, new
Mexico and Illinois, the onesthat don't come up in the news
(39:12):
too often.
Ben Larson (39:13):
Yeah, it's like if, like, no news is good news when
it comes to regulated cannabis.
AnnaRae Grabstein (39:17):
Totally.
And then I would warn againsthot markets that have
unrealistic valuation hype andmassive capital requirements.
Those are states like Floridaand California, possibly New
York, but I could also make anargument for the state of New
York in the category of earlyconsumer sophistication and
semi-open distribution.
So the states that have areally flexible distribution
(39:41):
environment that allow brands tosell into all different types
of stores, to have reallyeffective in-person brand
activation.
And some of those states areNew Jersey, new York, maryland,
michigan and MassachusettsMaryland, michigan and
Massachusetts.
And I specifically think thatretailers because she asked
(40:09):
about not just brands but alsoretailers can see upside in
Maryland and New Jersey wherethere's like a really strong
consumer demand and adult access.
Adult use access is somethingthat is creating a lot of growth
from the medical transitionthat both of those states have
gone through.
So that is kind of my realisttake on some of my favorite
states to focus on and I can gointo business indicators, but
(40:30):
maybe we talk about hemp for asecond too.
Ben Larson (40:33):
Honestly, I don't know if I have much to add,
because what I would have saidat the beginning of the year has
changed.
It's been an incredibly busylegislative session.
My head is still spinning aboutit, things are still happening,
and so just absorbing where thecards have all fallen after the
last seven months it's tough,so I can't say, you know, even
(40:58):
Minnesota, which we've talkedabout about, like how awesome
it's been.
They've been rolling out a newregulated structure which I
haven't really checked in onabout the viability of that, and
there's been new rules likeconstantly being implemented.
That seems to be adding moreconstraints, more taxes, and so
it's kind of confusing aboutwhere is it optimally.
(41:20):
I think the entire marketcontinues to be embattled, but I
don't want to go too deep intothat because this is 100th
episode and we're keeping ourspirits high.
AnnaRae Grabstein (41:32):
Well, and so here's.
The thing, too is that state bystate opportunity is so
dependent on individual marketfit for the company and on the
hustle that the company is readyto bring into that experiment
with their expansion.
And a example that I'll call outa company that I watch a good
friend of mine is their SVP ofmarketing is Jetty Extracts, and
(41:54):
Jetty Extracts recently, in thelast couple years, launched
into Colorado, and Colorado istraditionally thought of as an
extremely mature market withreally cheap weed and from the
outside someone might think like, well, why the heck would you
go to Colorado and launch abrand into market that wasn't
there before?
(42:14):
But they have risen to the topin their category and are
kicking ass in Colorado and Ithink it's an example of they
are a mature organization withfocus, with clarity, on who
their consumer is and they knowhow to get after it and how to
support dispensaries.
And there's a lot of maturemarkets that have a ton of
(42:36):
individual, not very maturebrands that are operating that
are just sort of there becausethey've been there, and I think
that presents an opportunity forcompanies that are coming and
you're going to do somethingdifferent and serve consumers in
a new way, and it already in analready proven market where you
don't have to educate theconsumer, you just need to
provide them a new option thatspeaks to them.
(42:57):
And there's a shitload ofopportunity that's right there
in front of you, even in amature market, if you can make
the pricing work.
Ben Larson (43:03):
Yeah, colorado is an interesting market.
I've been spending a little bitmore time there.
There's a hemp beveragecoalition that has spun up
around, like Vicente, and anumber of brands local there.
What's interesting aboutColorado is that it's small
enough to where you can reallywrap your arms around the
constituency as a legislaturewhere, like, you can really wrap
(43:24):
your, your arms around theconstituency as a legislature
and the legislature is actuallypretty engaged in this
conversation.
You, you get to speak to thesenators and the representatives
, uh, the policymakers that thatare representing the
constituents, and you can havelike a thoughtful conversation
and they seemingly legitimatelywant to get it right, like they.
They're concerned aboutconsumer safety, of course, but
(43:48):
they don't think, you know,maybe this gets to the maturity.
They don't think it's liketoxic.
The stigma is largely gone awayand I don't think we get that
benefit in california where, yes, we have a mature market, but
it's such a large market andthere's so many layers of
bureaucracy, probably becausethere's so many constituents.
Yeah, I think just Colorado isa really, really special market
(44:10):
and I don't know what that hasto do with Jetty.
AnnaRae Grabstein (44:12):
Well, I think that what you're talking to,
though, is something that is apiece of how do you choose a
market like a market that hasreally great regulatory
efficiency is a more desirablemarket than a place like texas,
as an example, that only has alegislative policy making
session every two years, and soif you're stuck in a situation
(44:34):
where you want to changesomething and you have to wait
two years, and if you don't getit, you got to wait another two
years.
Ben Larson (44:38):
We're about to see how creative you can be at the
special session, though, sureand um.
AnnaRae Grabstein (44:42):
So let's let's talk about hemp for a
minute too, because I think thatthere are markets that that
have presented really greatopportunities for hemp
businesses to expand into, andeven markets where we're both
are functioning, and I think weyes, we have talked about
Minnesota a lot.
Minnesota has been slow to rollout its adult use program, but
it's been really great for theintoxicating hemp space.
(45:05):
I think that everyone is kind ofon the sidelines now who isn't
in Texas yet looking like isTexas still going to be great?
Because Texas has been greatand Texas has proven, better
than maybe any other state forhemp, that there is a huge
consumer base that is justhungry to access these products
in an efficient way, and sohaving that demand is huge
(45:28):
Consumer exception and adoptionmakes it so much easier than
having to educate consumers andintroduce people to something
that they just don't understandat all.
So I'd say some of the businessindicators specifically
Kimberly asked for, like this isthe same stuff that you're
looking at in your business onthe daily, but when you're
thinking about what state to goto next, you want to start
(45:49):
looking at the other companiesthat are there and how
successful have they been, andyou don't want just a whole
bunch of failing companies.
You actually want strongcompetitors to go up against.
You want companies that havereally healthy margins and are
profitable.
You want to see like wholesale.
Ben Larson (46:04):
Like true profitability.
True profitability, not justEBITDA.
AnnaRae Grabstein (46:07):
Yeah, like wholesale pricing trends that
you can predict, even if thatmeans that the prices are going
to go down.
But you should be planning forthat and make sure that whatever
your business model is going towork For instance, like New
Jersey the prices will go down.
You know, if it's going to takeyou a year to get up and
running with your production inNew Jersey, you should not
expect that you're going to beable to sell a product in a year
(46:28):
for what it's selling for today.
Overall retail density, likehow successful are the stores
going to be that you're sellinginto?
Or, if you want to open a store, like how many other stores are
there in that community?
So, yeah, supply chain maturityand supply availability.
I've seen groups try to openprocessing facilities in markets
(46:48):
that don't have enoughcultivation supply and then they
just aren't able to get thebasic biomass and ingredients
that they need to produce theirproducts.
That's a problem.
So there's just a lot ofelements like this that go into
it.
But really any market can be agood market, but it's not going
to be easy ever.
There is no easy in cannabisanymore.
Ben Larson (47:10):
There is no easy in cannabis.
Yeah, but this is easy.
It can still be fun, it canstill be fun and hard is not a
bad thing.
AnnaRae Grabstein (47:19):
Like hard just means it's well-earned.
People are still winning, andthat's.
I think what's important isjust to say that just because
it's not easy doesn't mean itcan't be done, and over and over
, time and time again, we seecompanies that rise to the top,
and if you're in the cannabisspace, you have a lot of friends
that have suffered and havelost jobs or lost companies, and
(47:39):
there's announcements aboutreceiverships all the time.
But there's announcements aboutreceiverships all the time.
But there's also people thatare doing well and I think it's
important to look at what thosecompanies are doing and learn
from them.
You don't have to reinvent thewheel every time, but you should
go at it your own way also.
Ben Larson (47:54):
Absolutely.
Yeah, yeah, mic drop, I think I, you know, especially in the
beverage category, I see a lotof people prognosticating it's
like, oh, we're seeing a bust,you know.
It's like all these, all thesebrands are going to fail.
It's like in a hard industry,in an exciting industry where
there's exuberance and investormoney, there's always going to
be a lot of failure.
(48:15):
As long as the industry keepsgrowing, which it is year over
year, yeah, and there's moreconsumer adoption, there's less
stigma, the opportunity is thereand and you're right,
everywhere that there'schallenges, everywhere there's
hurdles.
That's just more opportunity tocreate value and to sell, and
(48:37):
so this was fun.
AnnaRae Grabstein (48:40):
Yeah, I don't think it's a bad time to be
getting into cannabis, but it'snot going to be an easy time to
raise money so no, it's like no.
Ben Larson (48:49):
Yeah, if your goal is to raise money, probably not
probably not, but it's.
AnnaRae Grabstein (48:52):
It's like to not have to make the mistakes of
all the groups that came beforeand get to be able to look at
the market for what it is today,and giving people a lot of
credit, though, like for them tolook at the history and look at
all the failures, like theyshould just call me, I can help
them look at those things.
Ben Larson (49:08):
You guys now have 100 episodes to listen to before
you enter the space.
But yes, you're right there's.
There's no better time than now, because earlier it would be
that much harder it would havebeen that much harder.
AnnaRae Grabstein (49:18):
so anyway, um , I think that that comes.
That's the end of our questions.
We got some others.
Thank you to everyone thatasked questions.
We couldn't answer them all,but I think we'll do this again
because it was really fun andy'all had some great questions
to throw our way that got usthinking, so I feel really
grateful for that.
Ben Larson (49:37):
Yeah, definitely, let us know what you think.
Leave comments.
Please, definitely, let us knowwhat you think.
Leave comments.
Please stop pause rate reviewsubscribe, I guess that doesn't
help.
If they already paused, unpause, now pause.
Go do that that's right yeahanyways, thank you guys so much
for being along on this ridewith us.
I can't imagine what we will be100 episodes from now.
(50:02):
We're just going to keep doingthis, going to keep making it
better.
Send us your requests, whoyou'd like to see on the show,
what you'd like us to talk about.
Do you want more of this?
AnnaRae Grabstein (50:12):
Yeah, Thank you to our teams at Vertosa and
Wolfmeyer and to our producer,Eric Rosetti who's sitting next
to us?
Today, you guys can't see himbut, he's here, he's real human.
As always.
Ben Larson (50:23):
Stay curious.
AnnaRae Grabstein (50:24):
Stay informed .
Ben Larson (50:25):
And keep your spirits high.
AnnaRae Grabstein (50:27):
Keep your spirits high Until next time.
Melissa VonderHaar (50:29):
That's the show.
AnnaRae Grabstein (50:31):
High five.
You guys now have a hundred episodes to listen to
before you enter the space.
But yes, you're right, there'sno better time than now, because
earlier it would be that muchharder.
AnnaRae Grabstein (00:10):
It would have been that much harder.
Ben Larson (00:18):
Hey everybody, welcome to episode 100 of High
Spirits.
We're recording Wednesday,august 6th 2025.
And I can't believe we made itAnna Rae 100.
I know I'm so grateful andtotally going off script.
So here we go.
Wow, holy shit, it's justsomething that we just started
(00:43):
to do on a weekly basis.
Decided to start pressingrecord, start calling our
friends on to the show and, alittle over two years later, I
think we've only missed three orfour weeks here and there.
100 episodes Feels pretty good.
AnnaRae Grabstein (00:57):
It feels really good.
I think that in my life I havealways struggled with discipline
and sticking to things formyself.
When I'm trying to help otherpeople with things, I'm able to
be this like great, disciplinedshaman and Jedi along the way,
and I think I've stuck with itbecause of you, because we're in
it together.
I think that if it would havejust been me on my own, it would
have been a lot harder.
Ben Larson (01:18):
It's been one of those true relationship things
where I don't know how manypeople do couples therapy, but
what you often hear is likerelationships really fall apart
when both parties give up aslong as there's always one party
trying, and I feel we've hadthat balance.
There's been weeks where we'vepulled each other into it.
There's been weeks where we'vegiven each other the space to
(01:39):
take a break, but we've nevergiven up on the show.
I think the further we go, theless likely feel really proud of
.
AnnaRae Grabstein (02:06):
We've just been getting constant
reinforcement that people areengaged and are listening and
are learning and enjoying whatwe're doing, and so it was your
idea to do this Ask Us Anythingepisode for the 100th, and at
first we didn't get a ton ofengagement, but then we ended up
getting some incrediblequestions, and so I think it
just proves that not only havewe've done this together, but
(02:27):
there's been all these peoplethat have come along some who
have been our guests, but otherswho haven't and and who now get
to be a part of this with us.
So I'm really excited for today.
Ben Larson (02:35):
It was funny as some of our guest questions were
coming rolling in, I was like,oh, what does this mean?
That it's our guests first thatare asking questions?
But then I thought about it.
I thought about who we madethis show for and who we tend to
go and invite to be on the show, and so the fact that our
guests are continuing to listen,I think, just means that we're
(02:56):
doing what we set out to do andthat's creating content for the
business leaders of the space.
So I really appreciate everyonesending in their questions and
we're going to jump into it.
AnnaRae Grabstein (03:07):
Yeah, and also today if you're just
listening and you're notwatching on YouTube or LinkedIn
we did a little thing today.
We up leveled, we got threecameras what's up cameras?
So we're just having some fun.
We're in person together.
It's always more fun when we'rein person together.
(03:27):
So before we get started, let'sjust give a little cheers.
Yes to all the high spirits.
Seth Yakatan (03:35):
Yep.
AnnaRae Grabstein (03:36):
Yeah, okay, I think we should just jump right
into our questions and getstarted.
Ben Larson (03:41):
All right, I think we have a couple of audio
recorded ones.
Seth Yakatan (03:52):
Yeah, let's jump in.
Who's our first one?
This is Seth Yakatan, wishingthe crew here the most happy of
hundredth episodes at HighSpirits.
So, anna Rae and Ben, given theduration that you have had in
the podcasting world, wonderingfor your listening audience, who
you have been so kind toeducate for the last few years,
(04:13):
what's the most gratifying thingthat has occurred for each of
you as a result of the creationof High Spirits?
Ben Larson (04:21):
Wow, the most gratifying thing I'm going to.
I'm going to take theopportunity to do a couple.
One is shout out my cohost isjust being able to connect with
you every week.
Talk about business, becausewhat you guys get to hear on the
show is the conversation thatwe have with our guests, but we
(04:42):
often have a lot of reflectionson what that conversation is.
Maybe this is like premiumcontent that we have to record
in the future, but just how wedecide to carry that information
forward and apply it to ourbusinesses, and so for me, it's
just the immense amount ofperspective that I get for
running my business with Vertosa, all these different questions
(05:02):
we get to ask.
It's just more information thatI get to put in my head, and
this is not the type of stuffyou get off of ChatGPT.
This is very hyper-specific,hyper-relevant, usually relevant
as into what's happening rightnow because industry changes so
quickly.
So that's been hugelygratifying.
What about you?
AnnaRae Grabstein (05:23):
Yeah, I guess two things too.
I think it's been incrediblygratifying.
What about you?
Yeah, I guess two things too.
I think it's been incrediblygratifying to be in person at
conferences and have people comeup to me and tell me that
they're listening and thatthey're learning.
I had someone come up to me andsay that the industry has just
been so hard and they've beenthrough the full roller coaster
and that there have been timeswhen they've really felt like
they couldn't move forward.
(05:44):
And when they've listened toour content, it's brought them
hope and brought them back tothe reason that they're doing
this, and it made me feel sovalidated, because that's
exactly why we're doing this isto make people feel not alone
and also to help them feel moreinformed.
And then the second thing thatis incredibly gratifying is just
(06:05):
how I've been able to witnessmy own personal growth in terms
of challenging myself to getbetter at making content and put
myself out there in a morevulnerable way, because we are
winning if we make this lookeasy, because it's not easy.
It takes a lot of effort andself-reflection and also just
trying to improve little thingslike the way that we ask
(06:28):
questions or the way that wemight say, or and too much.
Still working on that, stillworking on it, but it's been
gratifying to see theprogression.
So thanks, seth, for thequestion, thanks for being like
a huge cheerleader for usthrough this process and being a
great guest.
Thanks, thanks so much.
Ben Larson (06:45):
Yeah, absolutely.
AnnaRae Grabstein (06:46):
Yeah.
All right Eric cue up our nextquestion.
Melissa VonderHaar (06:50):
Hi, this is Melissa Vonderhaar from
TradeWorks, from IC StoreInnovations and chair of the
CSPC store cannabis board, andwith the two of you being some
of the most foremost experts inthe cannabis space and talking
about the many problems thatexist here, I'd like to know if
you had one wish from a magicgenie that would help fix
(07:15):
regulations to make it easierfor cannabis businesses to
thrive and expedite thenormalization of cannabis in the
United States.
What would you wish for?
And just to make it interesting, you cannot wish for the
government to have never madecannabis illegal in the first
place.
What could we do today thatwould help fix this mess?
AnnaRae Grabstein (07:36):
Yeah, melissa , it is a mess.
You're right, that's not a lie.
I had to think about this one alot and I'm just going to go
for it.
And I'm going to say that if Ihad one genie in the bottle, it
would be full federaldescheduling and legalization,
paired with a nationalregulatory framework that sets
clear and fair rules about howcannabis can be grown, sold,
(07:56):
marketed and moved across statelines.
I want to, within that context,honor what I think is the
importance of the dispensarypioneers, because I think that
as we think about whatnormalization looks like, we
also need to be intentionalabout the people who have really
jumped through the flaminghoops to create this market.
(08:17):
So, really, when I think aboutthat genie and what that
full-scale model looks like is atiered retail vision, and I
think that licensed dispensariesshould continue to exist for
inhalable high potency products,and I also think they should be
allowed to co-locate with otherbusinesses.
And then I would want toinclude conventional retail into
(08:40):
the mix Think bodegas, healthstores, grocery store chains
that would be allowed to selllow dose edibles and beverages,
topicals and wellness stuffReally like bringing cannabis
into everyday life, whereconsumers are.
And then e-commerce I wouldwant that to exist too, because
we're talking about the genie inthe bottle, and it's 2025 and
(09:01):
everything is online, socannabis should be no different,
yeah.
Ben Larson (09:05):
You went all in.
All in All right, yeah, allright.
Well, I'm going to approachthis question a little bit more
from a nuanced perspectiveunderstanding the world that
we're operating in right now,Not the genie like the reality
of it's like a genie withtoday's baseline.
Okay, great, right, good, solike we have to the full
spectrum.
(09:26):
We need achievement, a stepalong the way yeah, before I get
there, I I would just like tosay I know the question is
position, a commercialization,all that kind of stuff, but I
think it's really important thatwe don't lose the narrative of
like.
We need to decriminalize,deschedule and get the tens of
thousands of nonviolentcriminals out of jail.
(09:51):
So that's my first wish.
Second wish understanding thecurrent landscape is we need
Congress to identifycannabinoids in the FDCNA as its
own unique category, so we canstop having the discussion about
whether it fits intosupplements or as a food
additive or anything.
They're cannabinoids.
(10:12):
They deserve their ownregulatory pathway and that
allows us to start creating therules that allow us to then
determine whether it goes to theTTB or otherwise.
And so that's step one.
The next step after that is whatdo we do with hemp and cannabis
?
Obviously, calling it one plant, making sure that was legal
(10:35):
everywhere and gettinginterstate commerce.
That is the ultimate goal.
But how do we get there?
I think we have to survive witha bifurcated market for a
little while where we allow forinterstate commerce through
something like the States Act,so cannabis operators can ship
from one state to the next.
That we have this heavilyregulated system hopefully not
(10:55):
as heavily but still regulatedfor the full suite of cannabis
products, the hyperpotencies,all that kind of stuff.
And then we have the low-dosecategory that is sold in the
mainstream channels, anywherealcohol, tobacco and other adult
substances are sold.
So that's my midterm.
AnnaRae Grabstein (11:12):
Jane Fox Ben just laid out like the actual
genie in the bottle path insteadof just jumping over all the
steps to get there.
I really like what you'retalking about as it relates to
the FDCNA and cannabinoidregulatory path.
I wonder why you would keep abifurcated hemp and cannabis
(11:33):
reality within the openconstruct of what if we could do
anything?
Ben Larson (11:41):
Yeah, I don't know.
I try to remain optimistic, butdealing with policy for the last
several years has made me verypessimistic as far as what we
can achieve in the legislature.
But it's hard to imagineindividual states giving up
their stigmatized perspective ofwhat cannabis is or what hemp
is, and we need to preservestates' rights throughout this
(12:05):
path, right here.
And so, when I think about thenear-term solution, it's like we
have to preserve what Tennesseehas deemed is right for
Tennessee and what Minnesota hasdeemed right for Minnesota and,
I hate to say it, but whatCalifornia has deemed right for
California right.
And so in order to preservethat, we have to acknowledge
that hemp and cannabis exist intwo unique regulatory frameworks
(12:29):
, but we need to frame them upbetter, right Like we need
better regulations for hemp, weneed the federal government to
provide for consumer safety,testing standards, labeling
standards, not overdo it.
That's my big wish, and that'sa big wish, that's a genie
worthy wish is to like not havethe federal government overdo it
when they implement regulations, but they need to kind of stop
(12:51):
there and then pass it over tothe states to determine how they
want to regulate these products.
AnnaRae Grabstein (12:57):
It's fun to think about, but it also kind of
makes me feel crazy, becausethe incremental progress that
we've experienced as an industryand as a movement is the focal
point, as opposed to these bigdreams.
We aren't going after thesethings necessarily that you and
I are talking about.
(13:18):
We're instead kind of gaininginches.
So I think we're going to keepgaining inches and I think
there's a later question comingabout, maybe what 10 years looks
like from now and who wins.
So we'll touch on that a littlebit later on the episode.
Ben Larson (13:33):
Yeah, yeah.
Well, let's progress to laterin the episode, shall we?
AnnaRae Grabstein (13:37):
Okay, Next question.
Producer Eric cue it up.
Chiah Rodriques (13:41):
Hi, my name is Chia Rodriguez.
I'm a small legacy farmer inMendocino County, California,
and I am wondering how can theCalifornia cannabis industry
correct itself and honor thelegacy growers and cultivators
from where this industry startedlegacy growers and cultivators
(14:03):
from where this industry started.
So, as a small legacycultivator myself, I'm concerned
seeing a lot of my friends godown and close because of an
over-taxation andover-regulation.
As we know, it's been achallenge and it's also a
challenge for the consumers,unfortunately, who aren't
spending as much in dispensaries.
So my question is like how dowe course correct and do you
(14:24):
think it's possible?
Thank you.
Ben Larson (14:26):
Wow.
AnnaRae Grabstein (14:27):
Yes, first of all, thank you, chia.
You're voicing something that'spainful and urgent and very real
.
A system is failing the peoplewho built it, the legacy growers
, the multi-generational farmersand the small operators that
are trying to do things right,and it's painful to watch that
happen.
It's painful for it to happento you and to your friends, and
(14:49):
especially in a place likeMendocino that should be the
heart of the legal cannabisstory in California.
So when I think about coursecorrection, I think about voters
and policy reform in California, and I think, if we're going to
talk about actually creatingcourse correction as challenging
, as uphill as it is, I do thinkwe have to go back to the
(15:10):
voters in California.
The regulatory system that wehave now was born out of
well-intentioned but deeplyflawed ballot initiative out of
well-intentioned but deeplyflawed ballot initiative and
it's created a structure that'sfundamentally unsustainable and
almost impossible to fix becauseof the voter initiative itself.
So there's a lot of peopleinvolved in thinking about what
(15:32):
a new voter initiative couldlook like.
I'll focus on three things thatI think would be the key
pillars.
Ben Larson (15:38):
Yeah, Before we get there.
AnnaRae Grabstein (15:40):
Yeah, and I don't want to derail you.
Yeah, please.
Ben Larson (15:41):
We did just have Amy Jenkins on the show.
And in that show one of my keytakeaways was that it could be a
legislative like, brought bythe legislature.
AnnaRae Grabstein (15:53):
The legislature could put something
on the ballot Right Withouthaving to get all the signatures
.
Ben Larson (15:57):
So they need to bring it to the ballot.
AnnaRae Grabstein (15:59):
Yes, so you'd save like you still need the
voters to.
You still need the voters tofix the voter initiative Proceed
, yeah.
So you know there's threeelements to this that I think
are important.
Two that people talk about alot, one that is maybe a new
idea for today.
So the two that people talkabout all the time is tax reform
.
I think that that is obvious.
The tax burden is crushing theindustry.
(16:20):
It's driving people to theillicit market.
It's making it so that peopleare paying more taxes than
actual cost for their weed.
It's insane.
And then there is a localcontrol problem that has created
cannabis deserts and lack ofretail access.
So those things are tablestakes for a new voter
initiative.
We need tax reform and we needto end local control as a
(16:41):
barrier.
But the concept that I want tothrow out there today, which I
think has not been talked abouta lot because it's highly
controversial and you mightdisagree with me, but
programmatic canopy caps, whichmeans that the state would need
to tie the licensed canopy tothe actual market demand, and
right now California hasessentially unlimited
(17:03):
cultivation in terms oflicensing and square footage and
it's crashed the market andeven in the largest cannabis
economy in the US.
The demand is nowhere near highenough to support the level of
production that's happening inthe market.
And the way that I think aboutthis is that right now in the
news there's a ton of talk abouthow the Fed adjust interest
(17:23):
rates based on macroeconomicindicators.
We've got our president kind ofthrowing punches at the Fed
chair because there is kind ofdifferent ideas about where
interest rates should be.
I think cannabis needs asimilar mechanism.
Programmatic canopy allocationwould protect the value of the
plant and give cultivators,especially legacy ones, a
(17:45):
fighting chance.
This is a concept that I cameup with as I was thinking back
to the initial concept of oneacre caps in California which
was thrown out.
Ben Larson (17:53):
Yeah, I was going to say if they had not reversed
that and allowed for thestacking of licenses, like we
probably would have been fine.
AnnaRae Grabstein (18:01):
We would have been fine.
But I don't think we can putthat genie back in the bottle
and that there has been, youknow, thousands and thousands of
acres of canopy that's beenbuilt out and I don't think that
we should take that away fromlicensed cultivators If we try
to rebuild from the ground up.
But I think that what we can dois have a process, kind of like
we have the Fed at the federallevel that looks at what's
(18:24):
happening in the market,assesses the demand and
allocates how much canopy isallowed to be grown that year
and divides that, using somesort of algorithm, to the
licensees.
And it will be reallycomplicated, but I think it's
the key to not creatingoversupply in the market, which
is the biggest problem thatCalifornia is facing and that
(18:44):
legacy farmers like Chia are upagainst trying to compete.
Ben Larson (18:47):
Yeah, I don't have any disagreements there.
I just think there is thisfundamentally just a much larger
issue.
Right, like?
I spent some time on the hill afew years back talking to a lot
of the growers up there, andthey just just the sheer
infrastructure like gettingthrough, like the purchasing
(19:08):
cycles of dispensaries goingthrough the distributor.
By the time you're able tonavigate that, you're already
behind the curve as far as whatthe consumer wants.
Right, when the farmers wereable to sell directly to the
consumer, they were seeing amuch faster turn of product and
they were able to adapt theircrops to what the consumer
wanted.
And now it's just like thingsare not aligned.
(19:30):
There's the synergy that hasbeen lost between the consumer
and the farmer and it's becauseof all these layers of
bureaucracy in between that isrequired because of the
regulations, and so unravelingall that is challenging.
At the end of the day, we needto stop treating it like
plutonium, right, like it's weed.
AnnaRae Grabstein (19:48):
It's a plant, people it's a plant.
Ben Larson (19:50):
Yes, we need to make sure that people aren't like
spraying tons of pesticides onthem or that there's heavy
metals in the ground.
I don't know how we do this inCalifornia, at least with the
current state of Sacramento andhow everything is.
There's just so many interestsinvolved.
AnnaRae Grabstein (20:04):
Well.
So if we aren't able toactually change the underlying
policy and a ballot initiativeis out of reach, I want to throw
out another concept that Ithink is relevant both to
California legacy farmers, butalso to the nationwide small
business community of cannabisproducers and cultivators,
(20:24):
specifically, and many of youguys, if you listen, you've
probably heard me refer to mytime working in the meat
industry and you might haveheard of Organic Valley.
Organic Valley is a nationalfarmer owned cooperative in the
dairy industry and it's a reallycool, unique model that is a
farmer-led cooperative, and Ithink that this is a model that
(20:46):
could be really interesting forcannabis farmers that are small
and haven't attained scale as away to band together and deal
with some of the things that youwere just talking about the
complications of dealing withthe consumer and distribution
and compliance, and accountingand HR and all the things that
are not about being a farmer andand about getting to market.
(21:06):
I think that what it is is.
It is a bringing togethereveryone for shared resources
under a single, unified brand,creating cost sharing, bulk
purchasing, collectivebargaining power.
Haven't we seen this already?
Ben Larson (21:21):
Like Mikey Steinmetz .
AnnaRae Grabstein (21:23):
But that was never a co-op.
So that was Flocona, andFlocona was its own individual
corporation and they were buyingfrom small farmers, but they
could turn that off at any time.
What I'm talking about is anactual farmer-owned cooperative.
That isn't about people gettingto buy and then deciding that
they just want to go grow itthemselves instead of buying it
(21:44):
from farmers, and this is a bigdivergence from individual
farmers that have created theirown brands that they're proud of
, and I don't want to take awayfrom that.
Like, that's certainly a paththat people can choose to try,
but it's a heavier lift Well andbring back the farmer's market.
Ben Larson (22:04):
Let them take their crop, put it in the farmer's
market and let consumers go andpick it up.
I don't know.
I remember the two 15 dayswhere you get to do the deli
style and look at it, smell itand decide whether you want to
buy it or not, and that's howyou chose your strains.
It wasn't oh, is it like 34 thc, at least for me, and I I know
(22:27):
I'm a low dose, a low doserstill, so maybe my vote doesn't
count on this one I know I feelyou well.
AnnaRae Grabstein (22:33):
So, yeah, chia, I think that we both think
course correction is possiblebecause we are resolutely
committed and we care aboutCalifornia.
But I think it's going to takea lot of different levels.
Levers, it's policy, it'sbusiness models, it's channels
of access, it's all those things.
Ben Larson (22:51):
Sorry, I know you're trying to wrap this one up and
go on the next one but can wejust talk about taxes real quick
?
Because, again, I want tohighlight something that came
out of our recent episode withAmy was just that in order to
get stuff done, we need tounderstand who the beneficiaries
of these tax benefits are, andwe need to go and have an
(23:11):
economics discussion with them.
So I think the industry inCalifornia needs to band
together and put together aforward looking economic report
about, about, like, what is thesituation currently, where is it
trending?
And if we listen to, you know,john d rockefeller and his like
thoughts on prohibition andreversing, uh, alcohol
prohibition how we might be ableto benefit from lower barriers,
(23:34):
lower taxes, to create anoverall more vibrant industry
that we can all benefit from.
And so I don't think thatconversation has happened yet
and I don't think the study hasbeen done, but that is how we
get to a future that is viable,amen.
AnnaRae Grabstein (23:51):
Yeah.
Ben Larson (23:52):
Producer Eric.
What's next on the list?
Scott Wessler (23:55):
Hi Ben and Anna Rae.
This is Scott Wessler.
I'm a big fan of what you guysdo, a long-time listener.
I've got a two-parter here thatmay be a bit controversial in
the current regulated cannabisspace.
Part one 10 years from now,which market will be bigger
(24:22):
ingestible products, beverages,tablets and capsules, sprays,
etc.
Moving through traditionalretail channels or the entire
regulated dispensary market?
And part two does the currentregulated cannabis dispensary
model hold up or disappear asalternate channels emerge?
Now I want to make clear I'm inno way anti-dispensary or
anti-regulated recreationalcannabis.
(24:44):
I've been fighting the fight inthis space for well over a
decade, but as both state andfederal regulations continue to
prevent rational growth, I'mcurious to hear how you
prognosticate the overall marketevolving.
Thanks so much, guys.
Keep doing what you do.
Ben Larson (25:01):
Thank you, scott.
That could be controversial,but it's something that I think
about a lot and I jokingly saidyes right after he said
traditional marketplaces,because I do think generally,
that's where it's going to goand that's where we've always
wanted it to go, and I think ifwe're fighting against that
happening, we're fightingagainst inevitability and what
(25:23):
we actually all wanted asconsumers, and so I do think the
answer is in through thetraditional marketplaces.
But I don't think that meansdispensaries go away.
So, you know, I mentionedbifurcated from a regulatory
perspective of the supply chain,but I'm going to say bifurcated
differently here, where it'slike I do imagine that much like
(25:45):
the alcohol industry in Utah orKansas or Oklahoma, where you
have broad access to these lowerdose products and then
mainstream consumer channels,and I think you'll see a ton of
volume there, a volume thatprobably eclipsed what we would
see in the dispensary channelthat I'm about to define.
But, like in the dispensarychannels, like that's where you
(26:06):
get your full suite of cannabisproducts, that's where you get
the 100 milligram, 200 milligramif you're Michigan or more, but
like, once you're consumingthat many cannabinoids, you're
probably pretty comfortablegoing into dispensary, and so I
think this bifurcated model iswhat the eventuality is.
I think the largest volume andthe largest revenue will come
(26:27):
from the traditional channelsand I think there's still
opportunity for there to be somebig dispensaries, just the same
as there are big chains likeCircle K and 7-Eleven.
But I don't think everydispensary and this might be the
controversial part I don'tthink every dispensary is going
to create generational wealthfor its owners.
(26:47):
I don't think that's the design.
I think, at the end of the day,you're a specialty market and
some of them are going to beakin to your neighborhood liquor
store.
Did I say anythingcontroversial?
AnnaRae Grabstein (26:59):
Yeah, I think that there are things that we
agree on and things that we seedifferently.
Scott asks specifically about10 years and that got me really
thinking of like how much policydo I think will actually change
in 10 years?
And the truth is is that Idon't think that we're going to
see true interstate commerce andcommercial normalization within
(27:21):
the next 10 years.
I don't think that we're goingto see true interstate commerce
and commercial normalizationwithin the next 10 years.
I don't know.
Ben Larson (27:24):
Look how far we've come in the last 10 years.
Have we come that far?
Well, last 10 years we weregetting ready to celebrate a
sweeping legalization ofcannabis, but what's happened?
AnnaRae Grabstein (27:36):
federally in the last 10 years?
Sure, but like Truly what hashappened federally in the last
10 years.
Sure, but like Truly what hashappened federally in the last
10 years.
Ben Larson (27:41):
Yeah, except for the Farmville.
AnnaRae Grabstein (27:43):
So here's my take that in 10 years the
regulated dispensary market andthe conventional retail
cannabinoid-based ingestiblemarket will be tied, and what
that means.
Ben Larson (27:55):
Isn't it kind of tied right now?
AnnaRae Grabstein (27:57):
No, I think that Beau Whitney says that it's
tied.
But I think that Bo Whitneysays that it's tied.
But I think that when you talkabout like what the data says
about where hemp beverages areand where intoxicating hemp
edibles are and things like that, it's it's maybe 30% of the
size of the regulated cannabismarket.
It's the data's not there, so Idon't know.
But I'm going to say that we'relooking at like a $30 billion
(28:20):
cannabis market today and a $10billion intoxicating hemp market
.
People can call me out and tellme I'm wrong, but either way, I
think that it's going to beroughly tied and I think that
what that means is that theregulated cannabis market is
going to continue to grow withinits constraints, that slowly,
more states are going to comeonline, there will be more
dispensaries.
Slowly, more states are goingto come online, there will be
(28:42):
more dispensaries.
Consumers will become morecomfortable going to
dispensaries.
But while that's happening,there will be hemp-derived
beverages and wellness formatsthat are going to continue to
hockey stick and they are goingto be cannibalizing the new
consumer that is interested infinding alcohol alternatives and
really kind of creating a newconsumer that isn't the
(29:03):
dispensary consumer, and that itwill keep expanding and it will
be expanding at a faster ratethan the dispensary market.
I'll pause because I can tellyou want to call me out.
What do you think?
Ben Larson (29:13):
Well, no, I'm just.
I'm going to change the rulesof the game a little bit.
So you mentioned earlier abouthow licenses should be applied.
Right, it's like it shouldn'tbe.
This space is designated forcannabis.
It's like this space is allowedto serve cannabis is the style
of license.
So that is something thatdoesn't require the approval of
(29:34):
the federal government.
That can be done on astate-by-state basis, and that
has to happen.
Like this whole idea of likeconsumption lounges right, it's
like we should be able to issuea cannabis consumption license
to someone who serves food orwatches move, like serves movies
or whatever.
AnnaRae Grabstein (29:54):
Like you should be able to apply for a
cannabis license, and the minutewe start doing that and start
seeing that, then you'reessentially accessing the
(30:15):
mainstream channels and I dothink that's kind of like a
hybrid, so I didn't get to tellyou all about that.
It was mind-blowing.
And at that event it was thefirst time in the history we
think of a Grateful Dead-relatedshow that legal cannabis was
sold at the concert.
And this was because it's atthe same venue as the Outside
Lands Festival that's happeningthis weekend in San Francisco.
(30:36):
And so the Embark dispensaryteam that is doing all of the
on-site sales at Outside Landsset up a week early for the Dead
Show, and so they do this thingcalled Grasslands, and I will
say it's pretty cool that youcould buy weed at the concert.
But you had to kind of exit thevenue, walk through a special
(30:57):
secondary area to get another IDcheck.
There was a whole bunch ofsecurity that you had to weave
through to get into this fencedin area where you bought weed
and consumed weed.
But you were kind of allowed tojust bring your weed in through
the security gate and there waslots of weed being smoked.
And on the way to Grasslands Imust have walked by 25 bars that
(31:19):
were right in the crowd, thatyou didn't have to go to a
special place.
So it's it's like it shows theexact dynamic of the
complication of like, yes, it'scool that you could buy weed
there, but it isn't normal, it'snot actually integrated or you
could just go to minnesota where, at a music conference, they
did allow nowadays, which is ahemp derived music festival, not
(31:40):
conference, sorry yeah festival.
Ben Larson (31:43):
I go to conferences I don't know about all you
heathens, but yeah, it's like atitle sponsor with like a big
kiosk in the middle of of theconcerts and being able to, and
that's what I'm talking about.
AnnaRae Grabstein (31:55):
That's what we need, and that's mainstream
channel, that's mainstreamchannel well, and so that brings
up this question that scottasks of does the dispensary
model hold up?
And I think that you said it.
I think that it will hold up,but it's not going to dominate.
I think that cannabis is goingto start popping up in more and
more different locations, and ifit's cannabis or if it's
hemp-derived cannabinoids kindof remains to be seen over the
(32:19):
next 10 years what happens andhow that all happens.
And it's possible we might seea state that actually chooses to
create a regulated cannabisprogram and open up channels to
retail access that we haven'tseen other states do.
It isn't off the table that astate that doesn't have an adult
use program yet could decidethat Walgreens could sell
(32:40):
cannabis at it, even though nostate has done that before.
So I do think that thedispensary channel holds up.
I think it becomes a premiumchannel for high potency
products, for inhalable products, it's a trusted environment for
education, curation and it's aplace for connoisseurs and
medical patients, but that mostconsumers are going to be
(33:02):
excited to participate in moreconventional retail channels if
they are available, have itactually be legal, because if
this were still like a medicalmarket, we'd still call it
medical marijuana.
Ben Larson (33:14):
I would understand this highly guarded dispensary
kind of like feel highly guardeddispensary kind of like feel.
But we've all celebrated thispersistent rollout of cannabis
legalization and until theintoxicating hemp movement
rolled around, I didn't reallyfeel what it was like, what
(33:35):
legalization truly was.
Like it's faux legalizationthat we're all living in the
cannabis market.
And then when you go tominnesota or places like or
texas I know it's in limbo rightnow, uh or tennessee, and you
get to order it off of a menuwhile you're sitting at dinner
or go to a bar and have it be atrue alternative to alcohol,
like that's legalization, that'swhat we've all been voting for.
(33:56):
And until we get there, likewe're just in this like
purgatory where I don't we'rejust paying a shit ton of taxes
to employ a bunch of regulatorsto.
AnnaRae Grabstein (34:06):
But that legalization that you're talking
about in Minnesota andTennessee on the intoxicating
hemp side doesn't include allthe foreign factors that
everybody wants, and so you know, yes, you are building an
incredible business focused inbeverage and beverages winning
in those places, but there'ssome people that like to smoke
weed, I know, and they like toinhale weed and they deserve to
(34:27):
be able to do so, and we need tocreate a system that works for
everybody.
I know.
Ben Larson (34:32):
I think we agree.
I'm not saying that onlybeverages should be legalized.
I'm just saying that's whatlegal looks like it's just that
isn't fully legal.
AnnaRae Grabstein (34:39):
That's what legal looks like.
It's just that isn't fullylegal.
That's all I'm saying is thatthat's like legal for some, not
for all, and like if we'retalking about legal for all, I
think that it's going to end upin this weird.
You know, 10 years from nowwe're still going to have
inhalables in some weird awkwarddispensary location, likely or
behind a counter, the waycigarettes are, maybe.
But from a business perspective, I think that it's a tie.
(35:04):
I think that and that's asignificant that means a
significant increase innon-inhalable products in terms
of their overall proportionalmarket kind of position, because
right now, inhalables betweenflower pre-rolls and vapes are
way more than 50 of of themarket, and I think that the
future is moving us more towardsa 50-50 environment.
Ben Larson (35:26):
Okay, so when we're still recording this 10 years
from now, I'll first say that weagree on 95% of what you just
said, the last piece about whatthat split is in 10 years.
I just think that you're goingto be really surprised at what
is accomplished in the next 10years.
AnnaRae Grabstein (35:43):
So how wrong am I?
What proportion of the marketwill inhalables have compared to
non-inhalables?
Ben Larson (35:50):
What proportion will inhalables have versus
non-inhalables?
I'll say 25%.
AnnaRae Grabstein (35:57):
Inhalables will be 25% of the market,
mm-hmm, okay, well, I guess thatwill be like.
How many more episodes?
Ben Larson (36:08):
About 500, I guess.
AnnaRae Grabstein (36:11):
We'll figure it out.
Yeah, 50 episodes a year, 10more years, 500 more episodes.
Scott, we'll let you know.
Let's go.
Okay, I think we are to ourlast question.
All right, we're going to readit.
Ben Larson (36:25):
Our last question, Kimberly Gamboa, out of
California, From yourperspective.
Your perspective.
We'll start with you, Anna Rae.
Chiah Rodriques (36:33):
Okay.
Ben Larson (36:34):
Which states are best set up?
As sorry reading is my secondlanguage, which states are best
set up for cannabisprofitability for both brands
and retailers?
What are the market factorsdriving that?
When you approach this question, are you thinking about things
like tax structure, licensinglimits, pricing stability,
consumer behavior or capitalaccess?
(36:56):
And what business indicatorswould you use to evaluate
whether a market is truly worthentering?
There's a lot there.
AnnaRae Grabstein (37:05):
There's a lot there, and so, yeah, kimberly,
what I heard you asking is whatstates are the best states and
where can people make money andwe're talking regulated cannabis
, just to kind of set theparameters.
I think that it's aboutregulated cannabis.
When she's talking about taxesand licensing limits, yes, but
(37:26):
maybe we should talk about both.
So let's talk about both.
I'll start with the regulatedcannabis and I'm going to take a
realistic, not overlyoptimistic perspective, and I'm
going to say that, honestly,none of the US cannabis states
are currently really set up forlong term profitability.
Okay, that's the truth Scannabis states are currently
really set up for long-termprofitability.
Okay, that's the truth, we agree, not in the least the way that
(37:47):
other industries define it.
But some states are less brokenthan others and I can kind of
break down what I think are someof the better places to operate
.
Ben Larson (37:56):
Yeah, I mean, I would like to know, because
you're much more attuned to thisthan I am.
AnnaRae Grabstein (38:00):
So I think that when you're trying to look
for states that you can besuccessful, the first thing you
have to do is look inside ofyourself, and we had a
conversation with someone todaythat reminded me of the
importance.
It was a great metaphor aboutbeing a motorcycle and not a
semi-truck.
And the difference between acompany that is a motorcycle
compared to a semi-truck is thata motorcycle can park anywhere,
(38:22):
they can weave between lanes.
They don't have a huge heavyload that's dragging them down.
I think that if you're going tobe a company that is looking to
expand, you have to be able tobe nimble and you have to be
flexible and you can't be likethe DMV.
You have to be able to makedecisions quickly and actions
and people need to be empoweredin your company.
That's the first thing.
But every state is hampered bysome level of overregulation and
(38:51):
taxation.
If I was going to be doing anexpansion of a brand, I would
look for constrained licenses,meaning that there is not an
unlimited amount of licenses andthat there's some type of tax
reform, momentum or notovertaxation.
So some of those states wouldbe states like Maryland, new
Mexico and Illinois, the onesthat don't come up in the news
(39:12):
too often.
Ben Larson (39:13):
Yeah, it's like if, like, no news is good news when
it comes to regulated cannabis.
AnnaRae Grabstein (39:17):
Totally.
And then I would warn againsthot markets that have
unrealistic valuation hype andmassive capital requirements.
Those are states like Floridaand California, possibly New
York, but I could also make anargument for the state of New
York in the category of earlyconsumer sophistication and
semi-open distribution.
So the states that have areally flexible distribution
(39:41):
environment that allow brands tosell into all different types
of stores, to have reallyeffective in-person brand
activation.
And some of those states areNew Jersey, new York, maryland,
michigan and MassachusettsMaryland, michigan and
Massachusetts.
And I specifically think thatretailers because she asked
(40:09):
about not just brands but alsoretailers can see upside in
Maryland and New Jersey wherethere's like a really strong
consumer demand and adult access.
Adult use access is somethingthat is creating a lot of growth
from the medical transitionthat both of those states have
gone through.
So that is kind of my realisttake on some of my favorite
states to focus on and I can gointo business indicators, but
(40:30):
maybe we talk about hemp for asecond too.
Ben Larson (40:33):
Honestly, I don't know if I have much to add,
because what I would have saidat the beginning of the year has
changed.
It's been an incredibly busylegislative session.
My head is still spinning aboutit, things are still happening,
and so just absorbing where thecards have all fallen after the
last seven months it's tough,so I can't say, you know, even
(40:58):
Minnesota, which we've talkedabout about, like how awesome
it's been.
They've been rolling out a newregulated structure which I
haven't really checked in onabout the viability of that, and
there's been new rules likeconstantly being implemented.
That seems to be adding moreconstraints, more taxes, and so
it's kind of confusing aboutwhere is it optimally.
(41:20):
I think the entire marketcontinues to be embattled, but I
don't want to go too deep intothat because this is 100th
episode and we're keeping ourspirits high.
AnnaRae Grabstein (41:32):
Well, and so here's.
The thing, too is that state bystate opportunity is so
dependent on individual marketfit for the company and on the
hustle that the company is readyto bring into that experiment
with their expansion.
And a example that I'll call outa company that I watch a good
friend of mine is their SVP ofmarketing is Jetty Extracts, and
(41:54):
Jetty Extracts recently, in thelast couple years, launched
into Colorado, and Colorado istraditionally thought of as an
extremely mature market withreally cheap weed and from the
outside someone might think like, well, why the heck would you
go to Colorado and launch abrand into market that wasn't
there before?
(42:14):
But they have risen to the topin their category and are
kicking ass in Colorado and Ithink it's an example of they
are a mature organization withfocus, with clarity, on who
their consumer is and they knowhow to get after it and how to
support dispensaries.
And there's a lot of maturemarkets that have a ton of
(42:36):
individual, not very maturebrands that are operating that
are just sort of there becausethey've been there, and I think
that presents an opportunity forcompanies that are coming and
you're going to do somethingdifferent and serve consumers in
a new way, and it already in analready proven market where you
don't have to educate theconsumer, you just need to
provide them a new option thatspeaks to them.
(42:57):
And there's a shitload ofopportunity that's right there
in front of you, even in amature market, if you can make
the pricing work.
Ben Larson (43:03):
Yeah, colorado is an interesting market.
I've been spending a little bitmore time there.
There's a hemp beveragecoalition that has spun up
around, like Vicente, and anumber of brands local there.
What's interesting aboutColorado is that it's small
enough to where you can reallywrap your arms around the
constituency as a legislaturewhere, like, you can really wrap
(43:24):
your, your arms around theconstituency as a legislature
and the legislature is actuallypretty engaged in this
conversation.
You, you get to speak to thesenators and the representatives
, uh, the policymakers that thatare representing the
constituents, and you can havelike a thoughtful conversation
and they seemingly legitimatelywant to get it right, like they.
They're concerned aboutconsumer safety, of course, but
(43:48):
they don't think, you know,maybe this gets to the maturity.
They don't think it's liketoxic.
The stigma is largely gone awayand I don't think we get that
benefit in california where, yes, we have a mature market, but
it's such a large market andthere's so many layers of
bureaucracy, probably becausethere's so many constituents.
Yeah, I think just Colorado isa really, really special market
(44:10):
and I don't know what that hasto do with Jetty.
AnnaRae Grabstein (44:12):
Well, I think that what you're talking to,
though, is something that is apiece of how do you choose a
market like a market that hasreally great regulatory
efficiency is a more desirablemarket than a place like texas,
as an example, that only has alegislative policy making
session every two years, and soif you're stuck in a situation
(44:34):
where you want to changesomething and you have to wait
two years, and if you don't getit, you got to wait another two
years.
Ben Larson (44:38):
We're about to see how creative you can be at the
special session, though, sureand um.
AnnaRae Grabstein (44:42):
So let's let's talk about hemp for a
minute too, because I think thatthere are markets that that
have presented really greatopportunities for hemp
businesses to expand into, andeven markets where we're both
are functioning, and I think weyes, we have talked about
Minnesota a lot.
Minnesota has been slow to rollout its adult use program, but
it's been really great for theintoxicating hemp space.
(45:05):
I think that everyone is kind ofon the sidelines now who isn't
in Texas yet looking like isTexas still going to be great?
Because Texas has been greatand Texas has proven, better
than maybe any other state forhemp, that there is a huge
consumer base that is justhungry to access these products
in an efficient way, and sohaving that demand is huge
(45:28):
Consumer exception and adoptionmakes it so much easier than
having to educate consumers andintroduce people to something
that they just don't understandat all.
So I'd say some of the businessindicators specifically
Kimberly asked for, like this isthe same stuff that you're
looking at in your business onthe daily, but when you're
thinking about what state to goto next, you want to start
(45:49):
looking at the other companiesthat are there and how
successful have they been, andyou don't want just a whole
bunch of failing companies.
You actually want strongcompetitors to go up against.
You want companies that havereally healthy margins and are
profitable.
You want to see like wholesale.
Ben Larson (46:04):
Like true profitability.
True profitability, not justEBITDA.
AnnaRae Grabstein (46:07):
Yeah, like wholesale pricing trends that
you can predict, even if thatmeans that the prices are going
to go down.
But you should be planning forthat and make sure that whatever
your business model is going towork For instance, like New
Jersey the prices will go down.
You know, if it's going to takeyou a year to get up and
running with your production inNew Jersey, you should not
expect that you're going to beable to sell a product in a year
(46:28):
for what it's selling for today.
Overall retail density, likehow successful are the stores
going to be that you're sellinginto?
Or, if you want to open a store, like how many other stores are
there in that community?
So, yeah, supply chain maturityand supply availability.
I've seen groups try to openprocessing facilities in markets
(46:48):
that don't have enoughcultivation supply and then they
just aren't able to get thebasic biomass and ingredients
that they need to produce theirproducts.
That's a problem.
So there's just a lot ofelements like this that go into
it.
But really any market can be agood market, but it's not going
to be easy ever.
There is no easy in cannabisanymore.
Ben Larson (47:10):
There is no easy in cannabis.
Yeah, but this is easy.
It can still be fun, it canstill be fun and hard is not a
bad thing.
AnnaRae Grabstein (47:19):
Like hard just means it's well-earned.
People are still winning, andthat's.
I think what's important isjust to say that just because
it's not easy doesn't mean itcan't be done, and over and over
, time and time again, we seecompanies that rise to the top,
and if you're in the cannabisspace, you have a lot of friends
that have suffered and havelost jobs or lost companies, and
(47:39):
there's announcements aboutreceiverships all the time.
But there's announcements aboutreceiverships all the time.
But there's also people thatare doing well and I think it's
important to look at what thosecompanies are doing and learn
from them.
You don't have to reinvent thewheel every time, but you should
go at it your own way also.
Ben Larson (47:54):
Absolutely.
Yeah, yeah, mic drop, I think I, you know, especially in the
beverage category, I see a lotof people prognosticating it's
like, oh, we're seeing a bust,you know.
It's like all these, all thesebrands are going to fail.
It's like in a hard industry,in an exciting industry where
there's exuberance and investormoney, there's always going to
be a lot of failure.
(48:15):
As long as the industry keepsgrowing, which it is year over
year, yeah, and there's moreconsumer adoption, there's less
stigma, the opportunity is thereand and you're right,
everywhere that there'schallenges, everywhere there's
hurdles.
That's just more opportunity tocreate value and to sell, and
(48:37):
so this was fun.
AnnaRae Grabstein (48:40):
Yeah, I don't think it's a bad time to be
getting into cannabis, but it'snot going to be an easy time to
raise money so no, it's like no.
Ben Larson (48:49):
Yeah, if your goal is to raise money, probably not
probably not, but it's.
AnnaRae Grabstein (48:52):
It's like to not have to make the mistakes of
all the groups that came beforeand get to be able to look at
the market for what it is today,and giving people a lot of
credit, though, like for them tolook at the history and look at
all the failures, like theyshould just call me, I can help
them look at those things.
Ben Larson (49:08):
You guys now have 100 episodes to listen to before
you enter the space.
But yes, you're right there's.
There's no better time than now, because earlier it would be
that much harder it would havebeen that much harder.
AnnaRae Grabstein (49:18):
so anyway, um , I think that that comes.
That's the end of our questions.
We got some others.
Thank you to everyone thatasked questions.
We couldn't answer them all,but I think we'll do this again
because it was really fun andy'all had some great questions
to throw our way that got usthinking, so I feel really
grateful for that.
Ben Larson (49:37):
Yeah, definitely, let us know what you think.
Leave comments.
Please, definitely, let us knowwhat you think.
Leave comments.
Please stop pause rate reviewsubscribe, I guess that doesn't
help.
If they already paused, unpause, now pause.
Go do that that's right yeahanyways, thank you guys so much
for being along on this ridewith us.
I can't imagine what we will be100 episodes from now.
(50:02):
We're just going to keep doingthis, going to keep making it
better.
Send us your requests, whoyou'd like to see on the show,
what you'd like us to talk about.
Do you want more of this?
AnnaRae Grabstein (50:12):
Yeah, Thank you to our teams at Vertosa and
Wolfmeyer and to our producer,Eric Rosetti who's sitting next
to us?
Today, you guys can't see himbut, he's here, he's real human.
As always.
Ben Larson (50:23):
Stay curious.
AnnaRae Grabstein (50:24):
Stay informed .
Ben Larson (50:25):
And keep your spirits high.
AnnaRae Grabstein (50:27):
Keep your spirits high Until next time.
Melissa VonderHaar (50:29):
That's the show.
AnnaRae Grabstein (50:31):
High five.
Popular Podcasts
Stuff You Should Know
If you've ever wanted to know about champagne, satanism, the Stonewall Uprising, chaos theory, LSD, El Nino, true crime and Rosa Parks, then look no further. Josh and Chuck have you covered.
Dateline NBC
Current and classic episodes, featuring compelling true-crime mysteries, powerful documentaries and in-depth investigations. Special Summer Offer: Exclusively on Apple Podcasts, try our Dateline Premium subscription completely free for one month! With Dateline Premium, you get every episode ad-free plus exclusive bonus content.
On Purpose with Jay Shetty
I’m Jay Shetty host of On Purpose the worlds #1 Mental Health podcast and I’m so grateful you found us. I started this podcast 5 years ago to invite you into conversations and workshops that are designed to help make you happier, healthier and more healed. I believe that when you (yes you) feel seen, heard and understood you’re able to deal with relationship struggles, work challenges and life’s ups and downs with more ease and grace. I interview experts, celebrities, thought leaders and athletes so that we can grow our mindset, build better habits and uncover a side of them we’ve never seen before. New episodes every Monday and Friday. Your support means the world to me and I don’t take it for granted — click the follow button and leave a review to help us spread the love with On Purpose. I can’t wait for you to listen to your first or 500th episode!