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Cannabis Law Now Podcast: THC Infused Beverages: Cantrip's Journey Through the Hemp-Derived Looking Glass

 

Published:

April 04, 2024

Related Industry:

Food Systems 

Related Service:

Cannabis 
 
Podcast

    

In 2023, Total Wine & More jumped into the cannabis drinks arena in Minnesota. Since then, there’s been an influx of “THC Beverages” hitting the marketplace, including in interstate commerce. How is this legally possible, and why are these libations picking up great speed with consumers? Because a lot of these “THC beverages” fall into the hemp-derived cannabinoid category.

Due to the passage of the 2018 Agricultural Improvement Act (known as the “Farm Bill“), hemp and all of its derivatives (containing no more than .3% THC and that are not synthetically derived) are no longer illegal schedule I controlled substances pursuant to the Controlled Substances Act. As a result, enterprising hemp product makers and businesses quickly took advantage of this seeming oversight, while states are just now playing catch up on the regulatory side. Some states are regulating these products, while others aren’t doing anything.

In this episode, Hilary Bricken and Adam Terry, CEO of Cantrip, which is taking the hemp-derived drinks space by storm, discuss the trials and tribulations (and successes) of navigating this emerging segment of the cannabis industry.

Read the Transcript

This transcript is auto-generated and may contain errors:

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[Music]

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[Applause]

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welcome I'm your host Hillary Bricken and

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this is the Cannabis law Now podcast

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where we regularly discuss issues

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related to the Cannabis industry

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including investment day-to-day

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operational issues and potential reform

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on the horizon that will impact all

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cannabis businesses and investors in the

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United

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States so for today's episode I have a

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really exciting guest in my opinion

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because he is probably in the most

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exciting segment of cannabis these days

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if you ask I think anyone or at least

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every social media post I get everything

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I see in marketing and advertising

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points to the popularity of THC infused

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Beverages and to talk about that today

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and specifically his company which I

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think is blowing up he can attest to

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that is Adam Terry CEO and co-founder of

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Cantrip welcome to the podcast Adam

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hi Hillary thanks for having me yes okay

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so usually in this podcast it's very

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conversational we want to know about can

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trip we want to know about how you're

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navigating I think what some would call

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the precarious legal area of these THC

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infused beverages because of the farm

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bill and we'll get into that you can

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share as much or as little as you want

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but can you tell our audience what is

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cantrip so cantrip is a hemp Drive THC

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Beverage Company we actually started out

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making what you might call marijuana

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infused beverages for lack of a better

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term working with licensed co-packers

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here in Massachusetts now we've entirely

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moved our operations into the hemp side

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of the business cantrip itself is a word

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that means a mist or playful trick I

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pull it from Dungeons and Dragons but

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it's essentially you know a call to the

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concept that these beverages were

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originally desired designed to be lowd

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dose and approachable for everybody and

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can trip in Dungeons and Dragons is

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essentially a level zero spell that you

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know most people have a c trip or two

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that they can cast it's you know just a

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little bit of magic to add to your life

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I love it my question was going to be

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how did you come up with that name but

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you already have answered that and you

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know just so we all know and to

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reiterate you started on the state

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licensed cannabis side in Massachusetts

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which is a highly regulated State

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comparing these two industries together

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the highly regulated state license side

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and the hemp dve side which I think is

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mainly evolving were you sad to depart

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the state license Canabis industry well

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you know I've been in adult use in

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medical cannabis since 2015 originally

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out in California for a couple years and

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then here in Massachusetts from 2017

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through 2020 and you know I have a lot

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of friends in the space a lot of friends

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in the dispenser system I guess we were

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in this space until last year 2023 so

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that would make about six years in

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Massachusetts I've watched it evolve

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from a vertically Integrated Medical

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space into an adult use you know

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licensed cannabis space and no I wasn't

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really sad to leave any of them I still

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go see my friends from a cage I still go

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to dispensaries they still exist all

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over the place but you know I think

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adult use cannabis policy in this

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country and particular in the state of

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Massachusetts it's been a little bit

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haphazard in terms of how they approach

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what is appropriate and what's not to be

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sold in dispensary I think it's is

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largely focused on anti-diversion laws

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and preventing you know cannabis from

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ending in the hands of anyone they deem

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is unfit to have cannabis I think that's

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especially fair in some cases especially

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unfair in other cases but it's you know

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it's a system that favors and focuses on

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security and anti-diversion which are

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very important things but it lacks any

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sophistication when it comes to

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particularly what I've done for my

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career which is extracts and in fusions

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in which they're essentially treated the

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same as smokeable flour for you know

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testing purposes for transport purposes

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you just have a there's there's no

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Nuance or sophistication when it comes

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to any product Downstream of the plant

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itself I still think after being in the

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space for a decade plus there's huge

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room for Innovation right in the state

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legal Industries when we're dealing with

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what I'll call quote unquote marijuana

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as opposed to cannabis which in my

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opinion would include these hemp derived

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products but that it's been so

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Elementary for years because of these

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state laws and the fact that the

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Department of Justice weighed in on what

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it wanted to see and that made mainly

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products and consumers suffer as a

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result but what people may not know is

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that you're a chemist by training so you

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know given that political legal

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framework for the state licensed

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Industries what Drew you to these hemp

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derived beverages this particular

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segment as a chemist I'm actually a

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chemical engineer so both chemists and

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chemical Engineers would get mad at me

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if if I didn't mention that because

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there there's a distinction when it

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comes down to practicality but uh you

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know I've done a lot of things in the in

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the chemistry range when it comes to

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cannabis and you know when I first

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joined the industry my focus was on

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applying process engineering principles

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primarily to extraction you ensure

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efficient extraction of the target

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molecule which is THC the I wouldn't say

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it's as a chemist that anything drew me

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to the hemp side of the business I mean

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there's I suppose within that there's

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the the fact that Delta 9 THC is Delta 9

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THC whether it comes from hper marijuana

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you know your Point cannabis is both

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hemp and marijuana it's the same plan

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the dividing line between it is an

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arbitrary point that was selected you

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know largely to try to prevent any sort

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of intoxicating products from existing

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which is kind of the natural results of

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having prohibition so long there was no

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one left in government who had ever

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heard of an edible you know the Delta 9

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THC being the same it was pretty

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appealing there are some nuances that

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come down in the chemistry range of what

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what is the difference between D9 THC

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when it comes from hemp versus when it

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comes from marijuana a lot of that comes

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down to how it's extracted Ed and put

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into the product you know primarily in

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hemp there are two methods of getting to

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Delta 9 THC one is converting CBD into

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Delta THC which is something as a

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chemical engineer I'm not a huge fan of

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because of the potential for byproducts

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in reaction chemistry and then there is

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natural extraction which means taking

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quite a lot of hemp and concentrating it

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down into you know distillate and then

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red diluting it back into your product

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and so you know from a from a a chemical

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perspective it's it's largely the exact

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same product my products are identical

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to the ones that we used to create here

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for the massachusett dispensary system

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the biggest difference being that as a

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small business owner and somebody who

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has you is not well connected to massive

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amounts of capital the ability to

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operate a business is materially

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different on the hemp side as it is in

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the marijuana side and that's you know

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anybody who's in the use cannabis system

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is aware of the high barrier to entry

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but cantrip started as sort of a

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licensing company where we would licens

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these products to adult use

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manufacturers for production and sale to

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dispensary systems and then on to

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consumer and what that led to is a very

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difficult you know cash situation for

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any small business which is that

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essentially from the time I would buy a

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single can to fill with my product to

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the time I got paid for that can you

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know a finished product could be

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something like six to eight months and

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so that is an enormous amount of money

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to be laying out for an enormous amount

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of time especially in an industry that

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has no financing so I'd say the case was

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largely one of business total

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addressable market demand you know

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consumer friction in marketing but from

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you know the chemistry perspective it's

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it's great because I can make the same

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product it just happens to be made from

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a plant that is designated in a

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different legal manner let's talk about

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that legal manner I still think there's

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a ton of confusion about what the 2018

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Farm Bill does and does not allow mainly

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colored by policy and intent um you have

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some in the camp that say this wasn't

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the intention of Congress where these

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other hemp derived canabo could slip

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through the net right and intoxicate

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people so long as the finished product

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contains less than 3% THC you have other

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people very vocally saying No this is

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kosher this is not a loophole this is

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the actual law and these are totally

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valid products no question then you have

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the third Camp that's probably somewhere

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in the middle and you've got the states

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that are now kind of catching on and

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they're starting to regulate or others

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are starting to ban what is your take

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especially as the CEO of can trip and

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like I've said before I see you guys

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everywhere and it really seems like

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you're making hey you're interstate

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commerce it's kind of a great cannabis

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success story in a way and the packaging

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looks great kudos to you it looks like a

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very fisticated cool product but on the

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farm bill how do you make peace with

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that so there there's a lot of stuff in

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there I think I probably am in the camp

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that's somewhere you know in between

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there's a lot that goes on in cannabis

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as I mentioned I don't think the adult

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use cannabis programs actually do a

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great job of regulating cannabis in an

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appropriate way I don't think they allow

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for cannabis to make the products that

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people actually want in the way that

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they actually want them and I think that

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started at the point of flower and I

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think that goes all the way through

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finished products where you know for

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years on the SE to sales side of things

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when I would be operating extractions

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there was no good methodology in those

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SE to Sal systems for turning flour into

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extract within the system you basically

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had to hack the systems or like make up

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new formats and units because the system

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didn't was you know created specifically

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only for flow this goes back to the days

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of biotrack and it moves through metric

264
00:08:54,120 --> 00:08:57,839
you know where essentially none of these

265
00:08:55,880 --> 00:08:59,680
C to sales software are really built you

266
00:08:57,839 --> 00:09:01,320
to handle an extraction system that down

267
00:08:59,680 --> 00:09:02,800
through infusions but as far as the law

268
00:09:01,320 --> 00:09:04,480
goes I mean you can call something a

269
00:09:02,800 --> 00:09:06,839
loal you can not call a loal I believe

270
00:09:04,480 --> 00:09:09,320
it's incumbent upon lawmakers to write

271
00:09:06,839 --> 00:09:10,399
laws that meet the intent that they have

272
00:09:09,320 --> 00:09:11,640
if they have an intent that nothing

273
00:09:10,399 --> 00:09:12,959
should be intoxicating then they

274
00:09:11,640 --> 00:09:14,480
shouldn't have written a rule that

275
00:09:12,959 --> 00:09:16,680
allowed things to be intoxicating and

276
00:09:14,480 --> 00:09:18,800
the farm bill certainly was on the face

277
00:09:16,680 --> 00:09:20,440
of it you know intended to create a

278
00:09:18,800 --> 00:09:21,760
system for creating Industrial Hemp that

279
00:09:20,440 --> 00:09:23,880
could go into fibers it could be used

280
00:09:21,760 --> 00:09:25,640
for ligant it could use for biofuels and

281
00:09:23,880 --> 00:09:27,600
all those things have happened and have

282
00:09:25,640 --> 00:09:29,560
done problem is when you have a plant

283
00:09:27,600 --> 00:09:30,920
that has been prohibited for extreme

284
00:09:29,560 --> 00:09:32,800
long time there's no one in the Civil

285
00:09:30,920 --> 00:09:34,399
Service left who has any concept of

286
00:09:32,800 --> 00:09:35,880
what's going on with cannabis frankly if

287
00:09:34,399 --> 00:09:36,839
you had any idea of what was going on

288
00:09:35,880 --> 00:09:38,160
with cannabis in this country you

289
00:09:36,839 --> 00:09:39,839
wouldn't be allowed in the civil service

290
00:09:38,160 --> 00:09:41,920
because they drug test as far as I'm

291
00:09:39,839 --> 00:09:43,480
aware and so when they drafted these

292
00:09:41,920 --> 00:09:44,959
hemp rules I don't really think they had

293
00:09:43,480 --> 00:09:46,920
a strong sense of that the original

294
00:09:44,959 --> 00:09:48,640
rules that they adopted in the farm bill

295
00:09:46,920 --> 00:09:50,959
actually go back to Colorado's law I

296
00:09:48,640 --> 00:09:53,240
think that passed in 2013 and that was I

297
00:09:50,959 --> 00:09:55,440
think largely dment by Bob hovin who you

298
00:09:53,240 --> 00:09:56,920
know was an attorney who drove the buff

299
00:09:55,440 --> 00:09:58,640
when it came to him getting that law

300
00:09:56,920 --> 00:09:59,959
pass I listen to a great interview with

301
00:09:58,640 --> 00:10:01,200
him on a different podcast where he

302
00:09:59,959 --> 00:10:03,399
talked about exactly how they came up

303
00:10:01,200 --> 00:10:05,600
with that. 3% but largely speaking it's

304
00:10:03,399 --> 00:10:08,320
arbitrary the fact is if you smoke flour

305
00:10:05,600 --> 00:10:10,240
there only 3% Delta 9 THC you will not

306
00:10:08,320 --> 00:10:11,880
really get intoxicated to be like

307
00:10:10,240 --> 00:10:13,600
smoking hay it not really going to get

308
00:10:11,880 --> 00:10:15,440
you anywhere but when you concentrate

309
00:10:13,600 --> 00:10:16,800
that down into or when you not

310
00:10:15,440 --> 00:10:18,519
concentrated D but when you put it into

311
00:10:16,800 --> 00:10:20,240
an edible you can deliver an absolute

312
00:10:18,519 --> 00:10:22,079
number of cannaboids as long as you

313
00:10:20,240 --> 00:10:23,760
increase the mass in which it's measured

314
00:10:22,079 --> 00:10:26,399
against so if you have a gummy that at a

315
00:10:23,760 --> 00:10:28,279
standard say three g gummy size you

316
00:10:26,399 --> 00:10:29,880
could deliver up to 9 milligrams of THC

317
00:10:28,279 --> 00:10:31,240
without it being you know not BL

318
00:10:29,880 --> 00:10:33,720
Farmville there's a lot of you know

319
00:10:31,240 --> 00:10:35,720
murky gray area in that too where you

320
00:10:33,720 --> 00:10:37,480
know it's not totally clear you know

321
00:10:35,720 --> 00:10:39,360
what constitutes a dry weight basis a

322
00:10:37,480 --> 00:10:40,880
dryway basis for flour could be

323
00:10:39,360 --> 00:10:42,959
considered two different things you

324
00:10:40,880 --> 00:10:44,120
could consider a dryway basis as if you

325
00:10:42,959 --> 00:10:45,880
took the plant dried it out in a

326
00:10:44,120 --> 00:10:46,959
crucible and removed all moisture but

327
00:10:45,880 --> 00:10:48,440
you know if you're talking about a

328
00:10:46,959 --> 00:10:50,200
representative sample of what's going to

329
00:10:48,440 --> 00:10:51,720
actually end up on the market usually

330
00:10:50,200 --> 00:10:54,200
dry cannabis to closer where it's about

331
00:10:51,720 --> 00:10:55,399
25 to 30% moisture remaining so I'm not

332
00:10:54,200 --> 00:10:57,160
really sure what's interpreted by the

333
00:10:55,399 --> 00:10:59,920
USDA there there's also the fact that a

334
00:10:57,160 --> 00:11:01,560
USDA compliant Farm the USDA rules

335
00:10:59,920 --> 00:11:03,519
include precursors when they measure

336
00:11:01,560 --> 00:11:05,519
total Delta 9 THC essentially they

337
00:11:03,519 --> 00:11:08,120
measure what is the potential to become

338
00:11:05,519 --> 00:11:10,240
Delta 9 THC so that includes THC and you

339
00:11:08,120 --> 00:11:11,959
know because of that USDA rule I don't

340
00:11:10,240 --> 00:11:13,760
believe that thda flower is actually

341
00:11:11,959 --> 00:11:15,680
compliance which is a departure from a

342
00:11:13,760 --> 00:11:17,600
lot of hemp stuff they also just didn't

343
00:11:15,680 --> 00:11:19,560
consider any synthetic cannaboids

344
00:11:17,600 --> 00:11:21,320
whatsoever which I think is a is a huge

345
00:11:19,560 --> 00:11:23,360
policy problem and is being addressed

346
00:11:21,320 --> 00:11:25,760
state by state and so when you have all

347
00:11:23,360 --> 00:11:27,120
of these you know murky areas basically

348
00:11:25,760 --> 00:11:29,560
this kind of reminds me a lot of prop

349
00:11:27,120 --> 00:11:31,120
215 in California where the know because

350
00:11:29,560 --> 00:11:32,760
it was a ballot initiative the rules

351
00:11:31,120 --> 00:11:34,480
weren't very long it was essentially

352
00:11:32,760 --> 00:11:35,800
medical marijuana is now legal and you

353
00:11:34,480 --> 00:11:37,720
have to be part of the collective and

354
00:11:35,800 --> 00:11:39,560
like here's a couple rules but mostly

355
00:11:37,720 --> 00:11:41,800
from there you know you start with flow

356
00:11:39,560 --> 00:11:43,839
and then you end up in 2015 with a

357
00:11:41,800 --> 00:11:46,040
robust Market of all sorts of stuff and

358
00:11:43,839 --> 00:11:48,160
you know nonprofit companies that are

359
00:11:46,040 --> 00:11:50,519
with air quotes that become profitable

360
00:11:48,160 --> 00:11:52,120
companies in that space but you know

361
00:11:50,519 --> 00:11:54,480
with the farm bill you end up with this

362
00:11:52,120 --> 00:11:56,880
just generally lack rule that doesn't

363
00:11:54,480 --> 00:11:58,279
help any help understand any of these

364
00:11:56,880 --> 00:12:00,320
points and I that's why I think so many

365
00:11:58,279 --> 00:12:02,240
attorneys are confused just there's no

366
00:12:00,320 --> 00:12:03,680
Clarity a lot of it comes down to what

367
00:12:02,240 --> 00:12:05,040
has been litigated what hasn't been

368
00:12:03,680 --> 00:12:06,760
litigated what has been forced and

369
00:12:05,040 --> 00:12:08,760
hasn't been forced which administrative

370
00:12:06,760 --> 00:12:10,320
agencies under the US federal government

371
00:12:08,760 --> 00:12:12,279
have a jurisdiction here and then you

372
00:12:10,320 --> 00:12:14,440
have the whole CBD problem with the FDA

373
00:12:12,279 --> 00:12:16,519
it was only six months prior to the farm

374
00:12:14,440 --> 00:12:18,000
bill passing with this hemp rule that

375
00:12:16,519 --> 00:12:20,199
the FDA approved its first

376
00:12:18,000 --> 00:12:21,360
pharmaceutical featuring CBD and to dat

377
00:12:20,199 --> 00:12:22,760
this has been the one of the biggest

378
00:12:21,360 --> 00:12:23,880
headaches the FDA has had to face where

379
00:12:22,760 --> 00:12:25,519
they don't really know how to regulate

380
00:12:23,880 --> 00:12:27,079
it because there is a rule that says CBD

381
00:12:25,519 --> 00:12:28,839
can't be in food and uh beverage

382
00:12:27,079 --> 00:12:30,760
products specifically because it is in a

383
00:12:28,839 --> 00:12:32,120
pharmace tical and so how do you swear

384
00:12:30,760 --> 00:12:33,160
that Circle well the FDA hasn't really

385
00:12:32,120 --> 00:12:34,560
figured that out it went back to

386
00:12:33,160 --> 00:12:35,880
Congress a year ago and said we don't

387
00:12:34,560 --> 00:12:37,839
know what to do you guys have to pass a

388
00:12:35,880 --> 00:12:39,360
rule we know that Congress has no

389
00:12:37,839 --> 00:12:40,800
interest in passing a rule and there's

390
00:12:39,360 --> 00:12:42,399
just there's so many ways it can go on

391
00:12:40,800 --> 00:12:43,720
but to bring it all back to where we

392
00:12:42,399 --> 00:12:45,959
ended up with the States you know

393
00:12:43,720 --> 00:12:47,720
Minnesota essentially decided as a state

394
00:12:45,959 --> 00:12:49,279
this isn't a lole this is exactly how

395
00:12:47,720 --> 00:12:50,600
the farm bill rule reads and we're going

396
00:12:49,279 --> 00:12:52,040
to regulate this so here's how we're

397
00:12:50,600 --> 00:12:54,360
going to do it so they passed some

398
00:12:52,040 --> 00:12:56,680
cursory laws in 2022 that gave you know

399
00:12:54,360 --> 00:12:59,279
a 5 milligram per serving limits 10

400
00:12:56,680 --> 00:13:01,199
milligrams per container they went on to

401
00:12:59,279 --> 00:13:03,079
find those rules when they actually

402
00:13:01,199 --> 00:13:04,720
legalized cannabis the next year that

403
00:13:03,079 --> 00:13:05,959
those were some great rules that in fact

404
00:13:04,720 --> 00:13:07,480
they restricted some of the products I

405
00:13:05,959 --> 00:13:09,480
make I still think those are great rules

406
00:13:07,480 --> 00:13:11,320
they ban synthetic can avonoids I think

407
00:13:09,480 --> 00:13:13,360
we know too little about those to claim

408
00:13:11,320 --> 00:13:14,839
that they're safe in any way they really

409
00:13:13,360 --> 00:13:16,600
started to create a system of

410
00:13:14,839 --> 00:13:18,240
enforcement so for example products have

411
00:13:16,600 --> 00:13:20,199
been pulled in Minnesota they don't have

412
00:13:18,240 --> 00:13:22,079
coas if they don't have coas that are

413
00:13:20,199 --> 00:13:24,079
within 10% variance of the target

414
00:13:22,079 --> 00:13:26,240
potency they've pulled over packaging

415
00:13:24,079 --> 00:13:28,680
regulations so hemp is not an

416
00:13:26,240 --> 00:13:30,600
unregulated system it is still regulated

417
00:13:28,680 --> 00:13:32,560
state by States and it is self-regulated

418
00:13:30,600 --> 00:13:34,360
by the companies that operate so canra I

419
00:13:32,560 --> 00:13:36,399
just went through a huge label review

420
00:13:34,360 --> 00:13:39,040
and I was able to get lab make labels

421
00:13:36,399 --> 00:13:40,279
that are compliant in only 34 states as

422
00:13:39,040 --> 00:13:41,399
far as I can tell and that's only

423
00:13:40,279 --> 00:13:42,600
because a lot of the states don't have

424
00:13:41,399 --> 00:13:44,000
rules yet just like the adult use

425
00:13:42,600 --> 00:13:46,040
cannabis system states keep passing

426
00:13:44,000 --> 00:13:47,720
their own individual rules in fact I

427
00:13:46,040 --> 00:13:49,720
have to now because the Florida bill

428
00:13:47,720 --> 00:13:51,040
that just passed what a week ago I now

429
00:13:49,720 --> 00:13:52,480
have to actually add one more thing to

430
00:13:51,040 --> 00:13:54,160
those labels to then be compliant in

431
00:13:52,480 --> 00:13:56,440
Florida if I'm going to sell there so

432
00:13:54,160 --> 00:13:57,680
you know there there is a group called

433
00:13:56,440 --> 00:13:59,759
The Hemp beverage Alliance which

434
00:13:57,680 --> 00:14:02,160
advocates for self-right regulation and

435
00:13:59,759 --> 00:14:04,040
bringing regulation to the hemp space on

436
00:14:02,160 --> 00:14:06,040
a federal level so we have one unified

437
00:14:04,040 --> 00:14:07,959
system all of us are asking to be taxed

438
00:14:06,040 --> 00:14:10,240
all of us are asking to you know make

439
00:14:07,959 --> 00:14:12,000
this codified in some way shape or form

440
00:14:10,240 --> 00:14:13,720
and in the meantime most of us are

441
00:14:12,000 --> 00:14:15,360
self-regulating so I produced the same

442
00:14:13,720 --> 00:14:17,959
quality with the same COA I went the

443
00:14:15,360 --> 00:14:21,320
marijuana side right on I mean oh the

444
00:14:17,959 --> 00:14:23,480
irony of going from adult use cannabis

445
00:14:21,320 --> 00:14:26,199
just to another Patchwork quilt of

446
00:14:23,480 --> 00:14:27,680
regulation on the hemp side and it seems

447
00:14:26,199 --> 00:14:30,160
that states fall into one of two

448
00:14:27,680 --> 00:14:31,800
categories they either try to ban it get

449
00:14:30,160 --> 00:14:33,600
challenged legally and I don't think

450
00:14:31,800 --> 00:14:35,600
they've had much success in maintaining

451
00:14:33,600 --> 00:14:37,639
those bans because of federal preemption

452
00:14:35,600 --> 00:14:40,040
or they are regulating and they probably

453
00:14:37,639 --> 00:14:41,079
need a good amount of Education just

454
00:14:40,040 --> 00:14:43,120
like they did with these other

455
00:14:41,079 --> 00:14:46,440
Democratic experiments with cannabis

456
00:14:43,120 --> 00:14:48,639
from stakeholders policy people Etc now

457
00:14:46,440 --> 00:14:50,600
you mentioned synthetic cannabinoids and

458
00:14:48,639 --> 00:14:52,480
I should qualify that under the farm

459
00:14:50,600 --> 00:14:56,000
bill for everybody listening the

460
00:14:52,480 --> 00:14:58,079
threshold is 3% THC anything below that

461
00:14:56,000 --> 00:14:59,880
is Industrial Hemp anything above that

462
00:14:58,079 --> 00:15:03,360
is a schedule one controlled substance

463
00:14:59,880 --> 00:15:06,079
that is illegal with the caveat that

464
00:15:03,360 --> 00:15:08,120
these synthetic canabo are also

465
00:15:06,079 --> 00:15:09,360
controlled substances Adam when you see

466
00:15:08,120 --> 00:15:12,759
these other companies out there on the

467
00:15:09,360 --> 00:15:16,800
free market advertising things like thca

468
00:15:12,759 --> 00:15:18,560
Delta 8 Delta 10 you know CBG any of

469
00:15:16,800 --> 00:15:20,959
these other many many canabo in the

470
00:15:18,560 --> 00:15:23,800
plant do you think the good majority of

471
00:15:20,959 --> 00:15:26,000
them are doing this through synthetic

472
00:15:23,800 --> 00:15:27,839
derivation extraction or do you think

473
00:15:26,000 --> 00:15:29,839
it's natural what's your take on that

474
00:15:27,839 --> 00:15:31,800
because we do have at least one lawsuit

475
00:15:29,839 --> 00:15:33,319
in Georgia lff lawsuit basically a

476
00:15:31,800 --> 00:15:35,800
product liability lawsuit among other

477
00:15:33,319 --> 00:15:37,240
things that claims these are not natural

478
00:15:35,800 --> 00:15:38,720
numbers these are being pumped

479
00:15:37,240 --> 00:15:40,120
synthetically these are illegal

480
00:15:38,720 --> 00:15:42,160
controlled substance what do you think

481
00:15:40,120 --> 00:15:43,880
is the case so if there is language in

482
00:15:42,160 --> 00:15:45,759
the farm built Advanced synthetics I'm

483
00:15:43,880 --> 00:15:47,839
actually not familiar with it I know

484
00:15:45,759 --> 00:15:49,160
there is the US analoges act which

485
00:15:47,839 --> 00:15:51,639
essentially bans things that are

486
00:15:49,160 --> 00:15:53,839
attempting to mimic the result of

487
00:15:51,639 --> 00:15:55,800
intoxicating substances are or

488
00:15:53,839 --> 00:15:58,000
Controlled Substances again I'm not an

489
00:15:55,800 --> 00:15:59,920
attorney so don't take any of this as

490
00:15:58,000 --> 00:16:01,399
what the actual rules are no I'm certain

491
00:15:59,920 --> 00:16:03,160
there are a lot of people producing

492
00:16:01,399 --> 00:16:04,680
synthetic canabo that's really not a

493
00:16:03,160 --> 00:16:06,279
question for me you know that I think

494
00:16:04,680 --> 00:16:08,279
the only question really comes down to

495
00:16:06,279 --> 00:16:10,240
how much of the phyto canabo are being

496
00:16:08,279 --> 00:16:12,319
synthesized so you know we we can

497
00:16:10,240 --> 00:16:14,120
categorize this into wholly designer

498
00:16:12,319 --> 00:16:16,160
canabo which are not found in the plant

499
00:16:14,120 --> 00:16:18,680
at all and completely synthesized and we

500
00:16:16,160 --> 00:16:20,040
can look at phyto canabo which do exist

501
00:16:18,680 --> 00:16:22,360
in the plantet but sometimes are

502
00:16:20,040 --> 00:16:24,440
artificially created through uh reaction

503
00:16:22,360 --> 00:16:26,360
chemistry Minnesota is actually the only

504
00:16:24,440 --> 00:16:28,199
state I know that act really has a rule

505
00:16:26,360 --> 00:16:30,680
around this which is that they've

506
00:16:28,199 --> 00:16:32,440
divided those cannaboids into two uh

507
00:16:30,680 --> 00:16:34,560
categories synthetic and artificial so

508
00:16:32,440 --> 00:16:37,199
synthetic refers anything created from

509
00:16:34,560 --> 00:16:39,560
reaction chemistry that is wholly not

510
00:16:37,199 --> 00:16:41,160
found in the the plan actually occurring

511
00:16:39,560 --> 00:16:42,680
that might be to be honest I'm actually

512
00:16:41,160 --> 00:16:44,959
not sure which canab there are there's

513
00:16:42,680 --> 00:16:47,079
like billion you know four re are

514
00:16:44,959 --> 00:16:48,920
acronyms now but I think thcp not

515
00:16:47,079 --> 00:16:50,920
totally clear on where hhc comes from if

516
00:16:48,920 --> 00:16:52,360
that's a phyto canab or not but delta8

517
00:16:50,920 --> 00:16:54,040
is a good example of something that is a

518
00:16:52,360 --> 00:16:55,360
phyto canab Andoid but often created

519
00:16:54,040 --> 00:16:56,759
through artificial means and I'm

520
00:16:55,360 --> 00:16:58,279
absolutely certain that people are

521
00:16:56,759 --> 00:16:59,839
creating this through artificial means

522
00:16:58,279 --> 00:17:02,240
as far as that was whereare people are

523
00:16:59,839 --> 00:17:03,920
doing that legally to some extent that's

524
00:17:02,240 --> 00:17:05,959
why I'm not that I'd be surprised to

525
00:17:03,920 --> 00:17:07,120
hear that a ban on synthetics is

526
00:17:05,959 --> 00:17:09,039
actually included in the text of the

527
00:17:07,120 --> 00:17:10,280
farm bill itself and I should clarify

528
00:17:09,039 --> 00:17:12,720
maybe not in the text of the farm bill

529
00:17:10,280 --> 00:17:14,319
the dea's position oh certainly I mean

530
00:17:12,720 --> 00:17:16,559
if you want to go in the dea's position

531
00:17:14,319 --> 00:17:18,400
of things almost everything is illegal

532
00:17:16,559 --> 00:17:20,919
under the the farm bill that's not

533
00:17:18,400 --> 00:17:23,439
Industrial Hemp the DEA has published

534
00:17:20,919 --> 00:17:25,280
letters or sent letters suggesting that

535
00:17:23,439 --> 00:17:28,319
their policy position is that anything

536
00:17:25,280 --> 00:17:30,480
above 3% at any point in the chain is uh

537
00:17:28,319 --> 00:17:32,000
technically legal to date I'm not aware

538
00:17:30,480 --> 00:17:34,280
that they've ever enforced that rule

539
00:17:32,000 --> 00:17:36,720
there has been litigation I believe that

540
00:17:34,280 --> 00:17:39,039
has sort of established the concept that

541
00:17:36,720 --> 00:17:41,679
if it's hemp at the time it's grown and

542
00:17:39,039 --> 00:17:43,640
that's you know three under 3% on

543
00:17:41,679 --> 00:17:45,200
specifically USDA you know approv Farm

544
00:17:43,640 --> 00:17:47,559
you can't just grow marijuana and if

545
00:17:45,200 --> 00:17:49,200
it's under 3% call at hemp still has to

546
00:17:47,559 --> 00:17:51,200
be registered both with the DEA and the

547
00:17:49,200 --> 00:17:52,640
USDA and the USDA is during compliance

548
00:17:51,200 --> 00:17:54,919
rules and those compliance rules also

549
00:17:52,640 --> 00:17:56,640
run into Statewide hemp rules if it is

550
00:17:54,919 --> 00:17:59,360
compliant hemp at that point and if it

551
00:17:56,640 --> 00:18:01,520
is under the 0.3% specifically Delta 9

552
00:17:59,360 --> 00:18:04,080
THC Threshold at the time that it is

553
00:18:01,520 --> 00:18:05,400
sold to a consumer that uh basically

554
00:18:04,080 --> 00:18:07,280
what we call the sourcing Rule and the

555
00:18:05,400 --> 00:18:08,360
final product rule then it is compliant

556
00:18:07,280 --> 00:18:10,120
him but I don't believe that's

557
00:18:08,360 --> 00:18:12,600
consistent with the dea's position

558
00:18:10,120 --> 00:18:13,760
however the DEA is not a lawmaking body

559
00:18:12,600 --> 00:18:16,039
and so I'm not sure that they get to

560
00:18:13,760 --> 00:18:17,520
make that choice um and if they you know

561
00:18:16,039 --> 00:18:19,159
have decided that is their position I'm

562
00:18:17,520 --> 00:18:21,320
not sure they feel confident enough to

563
00:18:19,159 --> 00:18:22,840
actually prosecute anybody over it which

564
00:18:21,320 --> 00:18:24,440
why we hav really seen those I mean you

565
00:18:22,840 --> 00:18:26,720
referenced earlier that states have

566
00:18:24,440 --> 00:18:28,400
tried to ban hemp products and in many

567
00:18:26,720 --> 00:18:29,799
cases have failed I think I've seen

568
00:18:28,400 --> 00:18:31,799
several different ways in which they've

569
00:18:29,799 --> 00:18:33,080
either restricted or tried to ban them

570
00:18:31,799 --> 00:18:35,320
sometimes it succeeds sometimes it

571
00:18:33,080 --> 00:18:37,760
doesn't you know in Arkansas last year

572
00:18:35,320 --> 00:18:40,799
there was a lawsuit to you know to

573
00:18:37,760 --> 00:18:42,480
overturn a ban that was overly vague and

574
00:18:40,799 --> 00:18:44,440
targeted you know things like synthetics

575
00:18:42,480 --> 00:18:47,240
and intoxicant uh and essentially the

576
00:18:44,440 --> 00:18:49,760
federal judge ruled there that the farm

577
00:18:47,240 --> 00:18:51,039
bill essentially endows consumers with

578
00:18:49,760 --> 00:18:53,000
the right to consume these products

579
00:18:51,039 --> 00:18:54,679
because it's federal law um so the state

580
00:18:53,000 --> 00:18:55,960
could restrict people producing them but

581
00:18:54,679 --> 00:18:58,360
they couldn't restrict consumer's right

582
00:18:55,960 --> 00:18:59,960
to consume them a similar rule I think

583
00:18:58,360 --> 00:19:02,159
uh or it was a similar ruling in

584
00:18:59,960 --> 00:19:04,200
Maryland that overturned that ban also

585
00:19:02,159 --> 00:19:05,760
last year Texas this has been litigated

586
00:19:04,200 --> 00:19:07,919
a couple times particularly surrounding

587
00:19:05,760 --> 00:19:10,000
Delta eight but I think notably Virginia

588
00:19:07,919 --> 00:19:11,760
has a ban on T Delta 9 THC above 2

589
00:19:10,000 --> 00:19:14,159
milligrams per package Colorado has one

590
00:19:11,760 --> 00:19:16,000
at 1.75 milligrams per package New York

591
00:19:14,159 --> 00:19:17,720
has one at 1 milligram of THC per

592
00:19:16,000 --> 00:19:20,039
package and only if it contains 15

593
00:19:17,720 --> 00:19:22,159
milligrams of CBD correspondingly so

594
00:19:20,039 --> 00:19:23,799
there have been you know restrictions on

595
00:19:22,159 --> 00:19:25,280
this that essentially have eliminated

596
00:19:23,799 --> 00:19:27,760
intoxicating H prodcts at least with

597
00:19:25,280 --> 00:19:29,440
Delta 9 THC the problem is when you pass

598
00:19:27,760 --> 00:19:31,679
those rules you kind of just just influx

599
00:19:29,440 --> 00:19:33,000
the market with you know elicitation

600
00:19:31,679 --> 00:19:34,600
it's the same thing as any prohibition

601
00:19:33,000 --> 00:19:36,080
right if you ban it you only create a

602
00:19:34,600 --> 00:19:38,320
market for other things that you haven't

603
00:19:36,080 --> 00:19:39,880
accounted for and so or just straight up

604
00:19:38,320 --> 00:19:42,280
illegal products that people will sell

605
00:19:39,880 --> 00:19:43,720
anyway lacking enforcement if Delta ATP

606
00:19:42,280 --> 00:19:45,080
has been been in New York for years but

607
00:19:43,720 --> 00:19:46,919
I guarantee I can drive to New York

608
00:19:45,080 --> 00:19:48,559
right now and find us some Delta ATHC

609
00:19:46,919 --> 00:19:50,080
soar a smoke shop that the guy that's

610
00:19:48,559 --> 00:19:53,679
selling it to me will tell me it's legal

611
00:19:50,080 --> 00:19:55,080
so it's um it's a mess and speaking of

612
00:19:53,679 --> 00:19:57,440
enforcement you concerned about

613
00:19:55,080 --> 00:20:00,120
enforcement at all do I have nightmares

614
00:19:57,440 --> 00:20:01,960
sometimes sure um um I don't you know I

615
00:20:00,120 --> 00:20:04,720
feel pretty comfortable that where we

616
00:20:01,960 --> 00:20:06,559
are is is in a safe space where if there

617
00:20:04,720 --> 00:20:08,520
was some sort of law enforcement action

618
00:20:06,559 --> 00:20:10,400
it'd be incredibly difficult for them to

619
00:20:08,520 --> 00:20:12,000
you know succeed with that in course and

620
00:20:10,400 --> 00:20:13,679
I think we know that prosecutors tend

621
00:20:12,000 --> 00:20:15,000
not to want to prosecute cases that they

622
00:20:13,679 --> 00:20:16,400
don't think they can win that doesn't

623
00:20:15,000 --> 00:20:17,880
mean there aren't you know potential

624
00:20:16,400 --> 00:20:20,159
actions the government could take I've

625
00:20:17,880 --> 00:20:21,919
definitely seen stories out there of

626
00:20:20,159 --> 00:20:23,200
products being seized and such like that

627
00:20:21,919 --> 00:20:25,360
and I've seen stories of people winning

628
00:20:23,200 --> 00:20:26,720
in court after those seizures I think

629
00:20:25,360 --> 00:20:29,400
largely you know canant trip

630
00:20:26,720 --> 00:20:31,679
self-regulates I I we test every batch

631
00:20:29,400 --> 00:20:33,880
for potency microbials microt toxins

632
00:20:31,679 --> 00:20:36,360
residual solvents and pesticides we sell

633
00:20:33,880 --> 00:20:38,520
them within the state like parameters

634
00:20:36,360 --> 00:20:40,600
for state laws across the board so I

635
00:20:38,520 --> 00:20:41,960
won't sell a state that has a ban on it

636
00:20:40,600 --> 00:20:43,880
I won't sell them direct to Consumer I

637
00:20:41,960 --> 00:20:45,440
won't sell them retail and you know by

638
00:20:43,880 --> 00:20:47,159
following all the laws that we believe

639
00:20:45,440 --> 00:20:49,559
exist I feel like we're pretty well

640
00:20:47,159 --> 00:20:51,760
covered you know the FDA is also is also

641
00:20:49,559 --> 00:20:53,679
not a fan of selling THD across state

642
00:20:51,760 --> 00:20:55,520
lines anymore than they're fan of CBD so

643
00:20:53,679 --> 00:20:56,880
we have sort of the same Paradigm there

644
00:20:55,520 --> 00:20:59,320
I haven't seen them go after Charlotte's

645
00:20:56,880 --> 00:21:01,600
Web either yet so to be be honest we we

646
00:20:59,320 --> 00:21:02,799
exist in sort of a Lial state right now

647
00:21:01,600 --> 00:21:04,120
and that's why I think so many lawyers

648
00:21:02,799 --> 00:21:05,960
are confused because even the ones that

649
00:21:04,120 --> 00:21:07,400
are experts on this there's not a lot of

650
00:21:05,960 --> 00:21:08,880
clarity because a lot of it's going to

651
00:21:07,400 --> 00:21:10,360
come down to what actually happens in

652
00:21:08,880 --> 00:21:13,159
court when things get litigated this has

653
00:21:10,360 --> 00:21:15,679
been a real crash course for me in where

654
00:21:13,159 --> 00:21:17,600
you know law meets practicality and how

655
00:21:15,679 --> 00:21:19,880
you know things that we take for granted

656
00:21:17,600 --> 00:21:21,480
as precedent in many many laws across

657
00:21:19,880 --> 00:21:23,159
this country they still they do have to

658
00:21:21,480 --> 00:21:25,240
be worked out every time you change make

659
00:21:23,159 --> 00:21:26,720
material changes in a law the Florida

660
00:21:25,240 --> 00:21:28,679
ban that just happened that'll be

661
00:21:26,720 --> 00:21:30,080
challenged in court for sure and while

662
00:21:28,679 --> 00:21:31,840
doesn't really affect cantrip in a

663
00:21:30,080 --> 00:21:33,720
material way because the latest

664
00:21:31,840 --> 00:21:35,320
litigation would allow all the products

665
00:21:33,720 --> 00:21:36,720
that cantrip currently makes you know

666
00:21:35,320 --> 00:21:39,200
there is a strong hemp Lobby down in

667
00:21:36,720 --> 00:21:40,880
Florida I call the 34 flavors ick which

668
00:21:39,200 --> 00:21:42,360
is all these cannaboids that we don't

669
00:21:40,880 --> 00:21:44,120
actually know you know know what they do

670
00:21:42,360 --> 00:21:44,919
to people they're being sold in large

671
00:21:44,120 --> 00:21:46,720
amounts we're talking about a

672
00:21:44,919 --> 00:21:48,520
multi-billion dollar market across this

673
00:21:46,720 --> 00:21:50,200
country in synthetic cannabinoids and

674
00:21:48,520 --> 00:21:51,799
those you know producers suppliers

675
00:21:50,200 --> 00:21:53,919
Distributors even consumers are not

676
00:21:51,799 --> 00:21:55,840
going to just let that go and it seems

677
00:21:53,919 --> 00:21:57,320
like let's table federal law for a

678
00:21:55,840 --> 00:21:59,679
minute ambiguities different

679
00:21:57,320 --> 00:22:01,840
interpretations people paranoia whatever

680
00:21:59,679 --> 00:22:03,559
it amounts to being seems like the

681
00:22:01,840 --> 00:22:06,000
states again are the ones left holding

682
00:22:03,559 --> 00:22:07,880
the bag and supporting the net like a

683
00:22:06,000 --> 00:22:09,880
Minnesota and Minnesota is not the only

684
00:22:07,880 --> 00:22:12,880
one anymore that have embraced it full

685
00:22:09,880 --> 00:22:15,200
bore and are trying to regulate not deao

686
00:22:12,880 --> 00:22:16,720
ban and that similar to adult use

687
00:22:15,200 --> 00:22:19,000
cannabis the states are the ones that

688
00:22:16,720 --> 00:22:20,480
are going to design the ultimate policy

689
00:22:19,000 --> 00:22:22,919
of acceptance and then the feds will

690
00:22:20,480 --> 00:22:24,799
catch up do you think that's right yeah

691
00:22:22,919 --> 00:22:26,520
that's definitely how it's going so far

692
00:22:24,799 --> 00:22:28,720
whether or not the feds cash up I think

693
00:22:26,520 --> 00:22:30,640
it's like we have state legislatures is

694
00:22:28,720 --> 00:22:33,159
that because our federal government is

695
00:22:30,640 --> 00:22:35,080
constantly in its own sort of like state

696
00:22:33,159 --> 00:22:37,000
of TR of culture war and you know

697
00:22:35,080 --> 00:22:38,679
particular issues that matter you know

698
00:22:37,000 --> 00:22:40,720
there's a reason that marijuana

699
00:22:38,679 --> 00:22:42,600
legalization is maybe one of the most

700
00:22:40,720 --> 00:22:43,840
bipartisan popular issues in the entire

701
00:22:42,600 --> 00:22:45,480
country we still haven't legalized

702
00:22:43,840 --> 00:22:47,080
marijuana it's because when something's

703
00:22:45,480 --> 00:22:48,679
really popular you can't beat the other

704
00:22:47,080 --> 00:22:50,679
party over the head with it all that

705
00:22:48,679 --> 00:22:52,440
much it's not you particularly useful to

706
00:22:50,679 --> 00:22:54,159
most politicians at a federal level but

707
00:22:52,440 --> 00:22:56,240
at the state level all politics is

708
00:22:54,159 --> 00:22:58,240
really local so legislators have been

709
00:22:56,240 --> 00:23:00,360
able to act in in many cases they have

710
00:22:58,240 --> 00:23:01,440
well really seen as a big divide between

711
00:23:00,360 --> 00:23:03,360
essentially states that already

712
00:23:01,440 --> 00:23:05,240
legalized cannabis and states that

713
00:23:03,360 --> 00:23:07,679
happens you know this is in some way

714
00:23:05,240 --> 00:23:09,559
sort of a red State cannabis phenomenon

715
00:23:07,679 --> 00:23:11,080
Minnesota is the most explicitly

716
00:23:09,559 --> 00:23:13,080
permissive structure in the country

717
00:23:11,080 --> 00:23:14,279
maybe one of the the only one that I'm

718
00:23:13,080 --> 00:23:16,520
aware of off the top of my head that

719
00:23:14,279 --> 00:23:19,320
actually mentions Delta 9 THC in the

720
00:23:16,520 --> 00:23:20,880
text of the law Tennessee permits it and

721
00:23:19,320 --> 00:23:22,440
has pretty permissive structure but it

722
00:23:20,880 --> 00:23:24,200
actually calls things intoxicating can

723
00:23:22,440 --> 00:23:25,679
avonoids instead of you know referencing

724
00:23:24,200 --> 00:23:27,240
when you go to file your taxes in

725
00:23:25,679 --> 00:23:29,360
Tennessee for these products because

726
00:23:27,240 --> 00:23:30,919
there's a specific I think 6% tax on the

727
00:23:29,360 --> 00:23:32,559
retailers products you can they have a

728
00:23:30,919 --> 00:23:34,559
drop down menu and it says Delta 8 and

729
00:23:32,559 --> 00:23:36,679
it says Delta 10 but there's no Delta 9

730
00:23:34,559 --> 00:23:38,200
on that which is common I think what's

731
00:23:36,679 --> 00:23:39,840
interesting it's been tougher in states

732
00:23:38,200 --> 00:23:41,159
where there are dispensaries existing

733
00:23:39,840 --> 00:23:43,080
right they want to protect that business

734
00:23:41,159 --> 00:23:44,720
instead of dispensaries it's a silly

735
00:23:43,080 --> 00:23:45,840
game to be honest because in the long

736
00:23:44,720 --> 00:23:47,120
term I don't think they're going to be

737
00:23:45,840 --> 00:23:48,760
able to fight these foreverence these

738
00:23:47,120 --> 00:23:50,240
products are going to be in liquor store

739
00:23:48,760 --> 00:23:52,240
grocery channels at some point or

740
00:23:50,240 --> 00:23:54,760
another in some fashion or another but

741
00:23:52,240 --> 00:23:56,200
Minnesota has Adult Ed cannabis but they

742
00:23:54,760 --> 00:23:57,400
haven't opened any dispensaries yet so

743
00:23:56,200 --> 00:23:58,679
there's nothing to protect so will be

744
00:23:57,400 --> 00:24:00,400
one of the first states to watch watch

745
00:23:58,679 --> 00:24:02,360
that it's essentially split the market

746
00:24:00,400 --> 00:24:04,120
into an Edibles Market that is freely

747
00:24:02,360 --> 00:24:05,960
accessible to anyone who can walk into a

748
00:24:04,120 --> 00:24:07,840
liquor store and any liquor license you

749
00:24:05,960 --> 00:24:09,400
can sell it versus getting flower and

750
00:24:07,840 --> 00:24:11,039
concentrates which will remain ferally

751
00:24:09,400 --> 00:24:12,799
illegal but you know sold in those

752
00:24:11,039 --> 00:24:14,279
dispensaries whereas it's going to be a

753
00:24:12,799 --> 00:24:16,320
tougher push I think in you know at the

754
00:24:14,279 --> 00:24:18,200
Northeast California actually allows

755
00:24:16,320 --> 00:24:19,960
these products which is interesting but

756
00:24:18,200 --> 00:24:21,440
it hasn't become widespread there just

757
00:24:19,960 --> 00:24:23,760
yet but we're definitely seeing the

758
00:24:21,440 --> 00:24:25,080
South become a strong Marketplace for us

759
00:24:23,760 --> 00:24:26,440
that's incredible it's just incredible

760
00:24:25,080 --> 00:24:28,640
it's not anything I would have ever

761
00:24:26,440 --> 00:24:30,000
believed in the past decade and that

762
00:24:28,640 --> 00:24:31,880
point you know last couple of questions

763
00:24:30,000 --> 00:24:33,640
for you what do you think because this

764
00:24:31,880 --> 00:24:36,480
is pretty legally Rocky and

765
00:24:33,640 --> 00:24:38,799
unpredictable volatile although maybe

766
00:24:36,480 --> 00:24:42,200
less volatile than adult use cannabis in

767
00:24:38,799 --> 00:24:44,880
some respects what's been canant Trip's

768
00:24:42,200 --> 00:24:46,559
biggest success to date in your opinion

769
00:24:44,880 --> 00:24:48,200
I mean I think the most impactful

770
00:24:46,559 --> 00:24:50,840
success that we've had was becoming one

771
00:24:48,200 --> 00:24:52,640
of the first brands on toal one more

772
00:24:50,840 --> 00:24:55,120
shelves back in October it's the first

773
00:24:52,640 --> 00:24:56,640
national liquor retailer to take on

774
00:24:55,120 --> 00:24:58,520
cannabis brand selected us we were one

775
00:24:56,640 --> 00:25:00,720
of only four on their shelves that were

776
00:24:58,520 --> 00:25:02,520
not local to Minnesota as well most of

777
00:25:00,720 --> 00:25:04,200
those Brands were you know homegrown I

778
00:25:02,520 --> 00:25:05,760
think that was was of interest to them

779
00:25:04,200 --> 00:25:07,480
at the time but we were't out of state

780
00:25:05,760 --> 00:25:09,039
Brands we did have our entire supply

781
00:25:07,480 --> 00:25:10,559
chain in Minnesota at that time and

782
00:25:09,039 --> 00:25:12,640
Total Wine picked us up on the strength

783
00:25:10,559 --> 00:25:14,880
of our products and our sales I moving

784
00:25:12,640 --> 00:25:17,640
in being one of the first movers into

785
00:25:14,880 --> 00:25:19,000
the hemp space after that Minnesota

786
00:25:17,640 --> 00:25:20,559
decision I think was one of the best

787
00:25:19,000 --> 00:25:21,960
decisions that we made to date and

788
00:25:20,559 --> 00:25:23,480
really has driven our business I'm not

789
00:25:21,960 --> 00:25:25,960
sure we would exist still if we were

790
00:25:23,480 --> 00:25:27,799
just in the dispensary system the the

791
00:25:25,960 --> 00:25:29,520
cost of opening a new state even if you

792
00:25:27,799 --> 00:25:31,320
are Co pack brand and not opening your

793
00:25:29,520 --> 00:25:33,159
own license is just you know it's

794
00:25:31,320 --> 00:25:35,039
measured in the six figures and unless

795
00:25:33,159 --> 00:25:36,960
you can continually fundraise which is I

796
00:25:35,039 --> 00:25:39,159
think getting harder in today's Capital

797
00:25:36,960 --> 00:25:41,080
environment there's really no path for

798
00:25:39,159 --> 00:25:42,799
small businesses I think in ad do use

799
00:25:41,080 --> 00:25:44,840
cannabis and there there lies the Crux

800
00:25:42,799 --> 00:25:46,640
of the issue where a lot of people will

801
00:25:44,840 --> 00:25:49,039
cry foul at hemp and say you know this

802
00:25:46,640 --> 00:25:50,320
is averse to our social Equity goals in

803
00:25:49,039 --> 00:25:52,000
fact I don't think there's an adult use

804
00:25:50,320 --> 00:25:53,760
campus program that really nailed social

805
00:25:52,000 --> 00:25:56,200
equity in one way or another because

806
00:25:53,760 --> 00:25:57,760
it's so disastrously expensive I mean I

807
00:25:56,200 --> 00:25:59,399
always look at Cambridge which I think

808
00:25:57,760 --> 00:26:01,039
eventually did succeed in getting some

809
00:25:59,399 --> 00:26:03,000
social Equity applicants open but there

810
00:26:01,039 --> 00:26:04,799
was essentially moratorium for years in

811
00:26:03,000 --> 00:26:06,320
Cambridge Massachusetts over you know

812
00:26:04,799 --> 00:26:07,919
you had to be a social Equity or

813
00:26:06,320 --> 00:26:09,320
economic empowerment applicant to open

814
00:26:07,919 --> 00:26:10,679
up there they were essentially asking

815
00:26:09,320 --> 00:26:12,440
the poorest people in the state to open

816
00:26:10,679 --> 00:26:14,039
in the most expensive rent Market in the

817
00:26:12,440 --> 00:26:15,360
state and so how is how do you square

818
00:26:14,039 --> 00:26:16,760
that you have to raise a lot of money

819
00:26:15,360 --> 00:26:18,720
and those people basically they're

820
00:26:16,760 --> 00:26:20,039
giving away 49% of their company half

821
00:26:18,720 --> 00:26:21,679
the time when they're raising that money

822
00:26:20,039 --> 00:26:23,559
because it's incredibly difficult and so

823
00:26:21,679 --> 00:26:26,120
you stand up with you know moneyed

824
00:26:23,559 --> 00:26:28,039
interest deao running the the all these

825
00:26:26,120 --> 00:26:29,720
adult use programs but nobility survive

826
00:26:28,039 --> 00:26:31,840
for small mom and pop shops I mean

827
00:26:29,720 --> 00:26:33,640
recently there was that that company

828
00:26:31,840 --> 00:26:34,679
that was caught on camera talking about

829
00:26:33,640 --> 00:26:36,039
how they don't pay their bills because

830
00:26:34,679 --> 00:26:38,159
they just wait for the mom and pop shops

831
00:26:36,039 --> 00:26:39,880
to go out of business that in many ways

832
00:26:38,159 --> 00:26:42,559
you know does that happens a lot it's

833
00:26:39,880 --> 00:26:44,440
not uncommon to be overextended cantrip

834
00:26:42,559 --> 00:26:47,159
has had AR from dispensaries that

835
00:26:44,440 --> 00:26:49,600
numbers in the 150,000 range before

836
00:26:47,159 --> 00:26:51,760
people we would extend net seven terms

837
00:26:49,600 --> 00:26:53,360
and people would pay 60 to 90 days later

838
00:26:51,760 --> 00:26:54,720
or you know we would ship multiple

839
00:26:53,360 --> 00:26:56,679
orders before they even considered

840
00:26:54,720 --> 00:26:58,279
paying part of it and so that kills a

841
00:26:56,679 --> 00:27:00,039
lot of small businesses there's really

842
00:26:58,279 --> 00:27:02,200
no path for a lot of these companies and

843
00:27:00,039 --> 00:27:04,120
margins are just squeezed really hard on

844
00:27:02,200 --> 00:27:05,640
manufacturers and suppliers so you know

845
00:27:04,120 --> 00:27:07,640
being part of the hemp system where we

846
00:27:05,640 --> 00:27:09,760
work with Al Distributors that you know

847
00:27:07,640 --> 00:27:11,480
they generally pay right on 30 days or

848
00:27:09,760 --> 00:27:12,640
even sooner sometimes it's not really

849
00:27:11,480 --> 00:27:14,000
they're so established it's not really a

850
00:27:12,640 --> 00:27:15,520
question if they can pay their bills or

851
00:27:14,000 --> 00:27:16,799
not and be able to operate in a direct

852
00:27:15,520 --> 00:27:18,279
consumer environment where essentially

853
00:27:16,799 --> 00:27:20,039
the money flows directly to you our cash

854
00:27:18,279 --> 00:27:21,679
Cycles have have shortened dramatically

855
00:27:20,039 --> 00:27:23,840
and that has improved the health of the

856
00:27:21,679 --> 00:27:25,440
business and allowed us to expand we

857
00:27:23,840 --> 00:27:31,000
were we had our first profitable year in

858
00:27:25,440 --> 00:27:34,000
2023 and we expanded 565 in revenues big

859
00:27:31,000 --> 00:27:35,200
difference big difference B2B and on the

860
00:27:34,000 --> 00:27:36,399
back of that and I just have two more

861
00:27:35,200 --> 00:27:38,360
questions for you number one do you

862
00:27:36,399 --> 00:27:41,000
think more multi-state operators on the

863
00:27:38,360 --> 00:27:43,679
adult use state license side will start

864
00:27:41,000 --> 00:27:45,880
exploring launching products in the hemp

865
00:27:43,679 --> 00:27:47,440
industry you know especially having seen

866
00:27:45,880 --> 00:27:48,919
what canant trip has been able to do I

867
00:27:47,440 --> 00:27:51,799
mean I'm sure everybody would love to

868
00:27:48,919 --> 00:27:53,480
partner with Total Wine sure I mean a

869
00:27:51,799 --> 00:27:55,960
lot of them have this is not really even

870
00:27:53,480 --> 00:27:57,840
a question for them anymore GTI launched

871
00:27:55,960 --> 00:27:59,399
their Minnesota product their hemp

872
00:27:57,840 --> 00:28:01,240
products Minnesota despite being one of

873
00:27:59,399 --> 00:28:02,240
only two medical licensees I think they

874
00:28:01,240 --> 00:28:03,360
saw there's no way they were going to

875
00:28:02,240 --> 00:28:04,640
compete with the Edibles Market

876
00:28:03,360 --> 00:28:06,519
otherwise they you know they have The

877
00:28:04,640 --> 00:28:08,279
Incredibles brand which is a very strong

878
00:28:06,519 --> 00:28:10,360
chocolate bar brand but even recently

879
00:28:08,279 --> 00:28:12,320
I've seen pictures of them on shelves in

880
00:28:10,360 --> 00:28:14,039
smoke shops in Illinois with their with

881
00:28:12,320 --> 00:28:15,720
an Illinois H place that's attached

882
00:28:14,039 --> 00:28:17,320
ronic because as far as I am personally

883
00:28:15,720 --> 00:28:19,200
aware I think they are also spending a

884
00:28:17,320 --> 00:28:20,679
lot of money lobbying against hemp

885
00:28:19,200 --> 00:28:22,279
derive products in Illinois because they

886
00:28:20,679 --> 00:28:24,000
have a big business to protect there but

887
00:28:22,279 --> 00:28:26,159
we know Kea Confections is launched in

888
00:28:24,000 --> 00:28:28,320
the hemp space 1906 is launched in the

889
00:28:26,159 --> 00:28:30,360
hemp space kir Leaf has a hemp Direct D

890
00:28:28,320 --> 00:28:31,760
THC and to their brand so I think it's

891
00:28:30,360 --> 00:28:33,880
inevitable that everybody's going to do

892
00:28:31,760 --> 00:28:35,080
it how they go about it and how they try

893
00:28:33,880 --> 00:28:36,840
to separate that business away from

894
00:28:35,080 --> 00:28:38,760
their 280 ebound business is I think a

895
00:28:36,840 --> 00:28:41,320
more complicated question but at the end

896
00:28:38,760 --> 00:28:43,159
of the day I see a lot of people in the

897
00:28:41,320 --> 00:28:45,000
dispensary space crying foul about this

898
00:28:43,159 --> 00:28:46,760
I get it I've watch people get licenses

899
00:28:45,000 --> 00:28:48,600
I participate in that process it sucks

900
00:28:46,760 --> 00:28:50,480
it takes years the beverages are one

901
00:28:48,600 --> 00:28:52,159
less than 1% of Revenue at dispensaries

902
00:28:50,480 --> 00:28:53,799
it's such a small proportion of business

903
00:28:52,159 --> 00:28:55,080
it's really the main the Ed like the

904
00:28:53,799 --> 00:28:56,679
chocolate bars incomings I think they're

905
00:28:55,080 --> 00:28:58,519
mostly worried about and I think there's

906
00:28:56,679 --> 00:29:00,320
there are intelligent ways to solve this

907
00:28:58,519 --> 00:29:01,840
through policym I don't know that

908
00:29:00,320 --> 00:29:03,240
there's any policy makers out there

909
00:29:01,840 --> 00:29:05,200
interested in solving that problem in an

910
00:29:03,240 --> 00:29:06,600
intelligent way but there's absolutely

911
00:29:05,200 --> 00:29:09,000
you know good ways that we can make

912
00:29:06,600 --> 00:29:11,200
quality product and I think you'll see

913
00:29:09,000 --> 00:29:12,679
pretty much every major brand Opera in

914
00:29:11,200 --> 00:29:14,200
that space because there's more total

915
00:29:12,679 --> 00:29:16,159
addressable market and then if people

916
00:29:14,200 --> 00:29:17,559
really like it and they see GTI attached

917
00:29:16,159 --> 00:29:19,000
to Incredibles maybe they want something

918
00:29:17,559 --> 00:29:20,679
stronger they walk right into a GTI

919
00:29:19,000 --> 00:29:22,200
dispensary so I think it's a win-win for

920
00:29:20,679 --> 00:29:24,640
everybody if we do it right that would

921
00:29:22,200 --> 00:29:26,440
be a nice scenario okay last question

922
00:29:24,640 --> 00:29:29,120
specifically around beverages do you

923
00:29:26,440 --> 00:29:31,080
think the kinds of THC in beverages that

924
00:29:29,120 --> 00:29:33,799
you all are making on the hemp Drive

925
00:29:31,080 --> 00:29:37,600
side do you think that's the future and

926
00:29:33,799 --> 00:29:39,519
why in April of 2022 wor Jordan got up

927
00:29:37,600 --> 00:29:41,039
on stage in Miami at in Singa and said

928
00:29:39,519 --> 00:29:43,399
that he believed that Canabis beverages

929
00:29:41,039 --> 00:29:45,559
would be 50% of the Cannabis Market in

930
00:29:43,399 --> 00:29:47,559
the future and everybody panned him for

931
00:29:45,559 --> 00:29:49,440
that at the time I think it had just

932
00:29:47,559 --> 00:29:50,640
been announced that this bill was

933
00:29:49,440 --> 00:29:52,120
working its way through the Minnesota

934
00:29:50,640 --> 00:29:54,279
Legislature so I don't know if Boris is

935
00:29:52,120 --> 00:29:56,559
getting briefed by his staff you know

936
00:29:54,279 --> 00:29:58,360
things like that or not the timing seems

937
00:29:56,559 --> 00:30:00,039
pretty close on it it was also Al right

938
00:29:58,360 --> 00:30:01,840
at the time that cure Leaf would go to

939
00:30:00,039 --> 00:30:03,399
try to launch a beverage product in

940
00:30:01,840 --> 00:30:05,200
Massachusetts so he could have just been

941
00:30:03,399 --> 00:30:07,159
you know self marketing but my point

942
00:30:05,200 --> 00:30:09,200
being that most people do not want to

943
00:30:07,159 --> 00:30:11,240
move towards a smoking lifestyle or an

944
00:30:09,200 --> 00:30:12,960
inhalation lifestyle there's only nine

945
00:30:11,240 --> 00:30:14,840
compounds that are on the FDA approved

946
00:30:12,960 --> 00:30:16,480
excipient list for inhalation you know

947
00:30:14,840 --> 00:30:18,120
there's thousands and thousands of

948
00:30:16,480 --> 00:30:19,840
things you could put in a pharmaceutical

949
00:30:18,120 --> 00:30:21,760
product that the FDA has approved only

950
00:30:19,840 --> 00:30:23,240
nine of them can you inhale inhalation

951
00:30:21,760 --> 00:30:24,519
is not a great method for staying

952
00:30:23,240 --> 00:30:26,039
healthy I think a lot of people don't

953
00:30:24,519 --> 00:30:28,000
want to smell like smoke I think it's

954
00:30:26,039 --> 00:30:29,440
hard to control it I think it's

955
00:30:28,000 --> 00:30:31,120
phenomenal way of ingesting if you're

956
00:30:29,440 --> 00:30:32,679
comfortable with it but it's hard to get

957
00:30:31,120 --> 00:30:34,559
people there it takes a lot of Education

958
00:30:32,679 --> 00:30:35,960
a lot of training I think a beverage is

959
00:30:34,559 --> 00:30:37,919
the simplest and easiest thing to

960
00:30:35,960 --> 00:30:39,760
explain to somebody just open it drink

961
00:30:37,919 --> 00:30:40,960
it see how you feel in 10 to 15 minutes

962
00:30:39,760 --> 00:30:42,640
and move forward it's a lot of

963
00:30:40,960 --> 00:30:45,320
advantages over traditional Edibles it

964
00:30:42,640 --> 00:30:46,799
sets in Faster I can be it's more easily

965
00:30:45,320 --> 00:30:48,760
understood by Distributors on how to

966
00:30:46,799 --> 00:30:51,039
distribute it if you go to toore you can

967
00:30:48,760 --> 00:30:51,760
buy gummies right now uh in Minnesota

968
00:30:51,039 --> 00:30:53,960
what you're going to do is you're going

969
00:30:51,760 --> 00:30:54,880
to pick up like a card off a shelf and

970
00:30:53,960 --> 00:30:55,919
you're going to take that card to the

971
00:30:54,880 --> 00:30:58,000
register and then they're going to hand

972
00:30:55,919 --> 00:31:00,519
you the gummies as opposed to you know

973
00:30:58,000 --> 00:31:02,760
having live beverages on the Shelf uh Al

974
00:31:00,519 --> 00:31:04,279
B Distributors are picking up beverages

975
00:31:02,760 --> 00:31:05,960
I haven't seen them pick up a ton of

976
00:31:04,279 --> 00:31:07,279
them pick up gummies it's because they

977
00:31:05,960 --> 00:31:09,320
know how to deal this there's a

978
00:31:07,279 --> 00:31:11,760
pre-existing infrastructure Network for

979
00:31:09,320 --> 00:31:13,720
doing this across the entire country and

980
00:31:11,760 --> 00:31:15,399
it's that coupled with consumer demand

981
00:31:13,720 --> 00:31:17,360
and something interesting and something

982
00:31:15,399 --> 00:31:19,120
new that I think is going to get the can

983
00:31:17,360 --> 00:31:20,919
curious into the market because to be

984
00:31:19,120 --> 00:31:22,840
honest I still think there's a large

985
00:31:20,919 --> 00:31:24,480
multiple of people outside the Cannabis

986
00:31:22,840 --> 00:31:26,000
market today that are interested that

987
00:31:24,480 --> 00:31:27,440
would come in if they only they found

988
00:31:26,000 --> 00:31:29,639
the pathway in then there are actually

989
00:31:27,440 --> 00:31:31,480
people in it you know what is what A50

990
00:31:29,639 --> 00:31:34,039
billion doll US market right now I think

991
00:31:31,480 --> 00:31:36,000
could be a $250 billion dollar US market

992
00:31:34,039 --> 00:31:37,519
but those other $200 billion dollar

993
00:31:36,000 --> 00:31:39,039
Revenue don't know how to get there and

994
00:31:37,519 --> 00:31:41,159
I think beverage is a pathway in for

995
00:31:39,039 --> 00:31:43,679
them well I will certainly be watching

996
00:31:41,159 --> 00:31:46,519
the can of curious and can trip I think

997
00:31:43,679 --> 00:31:49,919
it's a wild ride arguably maybe the

998
00:31:46,519 --> 00:31:51,720
faster Catalyst to definitely better

999
00:31:49,919 --> 00:31:54,320
availability of cannabis related

1000
00:31:51,720 --> 00:31:57,240
products and States since they've gotten

1001
00:31:54,320 --> 00:31:59,440
their crash course with adult use may

1002
00:31:57,240 --> 00:32:01,760
eventually hopefully fingers crossed do

1003
00:31:59,440 --> 00:32:03,880
a better job with him derived products

1004
00:32:01,760 --> 00:32:05,799
as they regulate but we'll be watching

1005
00:32:03,880 --> 00:32:07,480
thank you Adam for coming on the podcast

1006
00:32:05,799 --> 00:32:09,840
it's been a real pleasure thank you

1007
00:32:07,480 --> 00:32:16,240
Hillary it's good to meet

1008
00:32:09,840 --> 00:32:16,240
[Music]

1009
00:32:17,880 --> 00:32:23,039
you and that concludes today's episode

1010
00:32:20,360 --> 00:32:26,840
of the Cannabis law Now podcast until

1011
00:32:23,039 --> 00:32:29,840
next time stay alert stay

1012
00:32:26,840 --> 00:32:29,840
alive

Professional:

Hilary Bricken

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