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
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you know where essentially none of these
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C to sales software are really built you
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to handle an extraction system that down
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through infusions but as far as the law
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goes I mean you can call something a
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loal you can not call a loal I believe
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it's incumbent upon lawmakers to write
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laws that meet the intent that they have
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if they have an intent that nothing
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should be intoxicating then they
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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