BACK STORY with DANA LEWIS

CANNABIS - "A LESS DANGEROUS DRUG"

December 23, 2020 Dana Lewis Season 2 Episode 26
BACK STORY with DANA LEWIS
CANNABIS - "A LESS DANGEROUS DRUG"
Chapters
BACK STORY with DANA LEWIS
CANNABIS - "A LESS DANGEROUS DRUG"
Dec 23, 2020 Season 2 Episode 26
Dana Lewis

The war on drugs in America is waning. Cannabis  is widely accepted  by adults.  

As of now, 36 states have legalized medical cannabis use while 15 states and the District of Columbia have legalized cannabis for adult recreational use.

Canada was first to legalize cannabis to combat the illegal market, raise tax revenues, and make the use of cannabis regulated and safe. 

On This Back Story Host Dana Lewis talks to Tom Grebenstein, The Chief Revenue Officer, Cannabis Co. Tikun Olam USA.

And Tim Seymour, of Seymour Asset Management, an expert on everything about the billions of dollars flowing from and into the legal marijuana market. 

 

Show Notes Transcript

The war on drugs in America is waning. Cannabis  is widely accepted  by adults.  

As of now, 36 states have legalized medical cannabis use while 15 states and the District of Columbia have legalized cannabis for adult recreational use.

Canada was first to legalize cannabis to combat the illegal market, raise tax revenues, and make the use of cannabis regulated and safe. 

On This Back Story Host Dana Lewis talks to Tom Grebenstein, The Chief Revenue Officer, Cannabis Co. Tikun Olam USA.

And Tim Seymour, of Seymour Asset Management, an expert on everything about the billions of dollars flowing from and into the legal marijuana market. 

 

Speaker 1:

Public enemy. Number one in the United States is drug abuse. In order to fight and defeat this enemy, it is necessary to wage a new, all out offensive drugs are menacing our society yes. To your life. And when it comes to drugs and alcohol, just say, no. Hi everyone. And welcome to backstory. I'm Dana Lewis in the 1970s, president Nixon and then Reagan, and first lady Nancy Reagan declared a war on drugs in America, heroin, crack cocaine, but many arrests also involve marijuana cannabis. At the beginning of my career, I was a crime reporter in Toronto and remember, well, the daily police announcements, they had busted another drug ring so much so that police stats on crime solving often involved drug arrests, even as recently in 2018 statistics show four in 10 drug arrests in America were for marijuana and mostly for possession. Police made about 660,000 arrests for marijuana related offenses in the 50 States and the district of Columbia in 2018 amounting to 40% of total drug arrests in the U S that year, fast forward two years later in the presidential election of 2020, while Americans couldn't seem to agree on who should occupy the white house and still can't seem to agree. They did. However, clearly vote for legalization of cannabis. The New York times wrote drugs once thought to be the scourge of a healthy society are getting public recognition as part of American life, where drugs were on the ballot. They won handily, New Jersey, South Dakota, Montana, Arizona joined 11 other States that had already legalized recreational marijuana, Mississippi and South Dakota made medical marijuana legal bringing the total to 35 in 1969, two years before the Dawn of the drug war, 84% of Americans thought marijuana should be illegal. According to the Pew research center by 2019 91% of Americans supported the legalization of marijuana, either for both medical and recreational use or solely for medical use times have surely changed on this backstory, the money and the medicine of cannabis. And by the way, the marijuana market is by some estimates expected to be worth about $35 billion by 2025. Let's go to New York. I want

Speaker 2:

To introduce you to Tim Seymour . Uh, he is the CIO of Seymour asset management. Hi Tim. Hey Dan, how are you? Good to be here. Thanks for doing this, Tim. And I know each other from Moscow because I was a correspondent there and Tim was in asset management at a, at another company there. And so you have gone from, you know, very broad asset expertise and you have really specialized into cannabis. Tell me why you made that transition.

Speaker 3:

Well, it's interesting. Cause you know , I would make an argument that, that a lot of parallels that I saw of being rusted in the late nineties and being an emerging markets investor for the next 15 years , um, are some of the same attributes that are akin to investing in cannabis. I mean, this is, this is a new asset class. This is a new, this is a , uh , this is an emerging market. And yet what would drove a lot of the investor interest in big emerging markets was this new frontier, but it was around demographics consumption trends and, and I think a rapidly evolving investment dynamic and the same thing is happening in cannabis. And, and you know, the obvious , uh, macro part of the trade is, is the , the legislation and the changes that we're seeing and we're seeing them around the world. And , and obviously , uh , Canada's legalization North of the border here was a very big moment for the industry overall. Um, but to that extent, to answer your question , uh , you know, as an investor finding opportunities where you see , uh, enormous growth , uh, where there are, I think, significant risks and , and some of the depth of the markets and some of the inefficiency of the information flow to me as an investor is an incredibly interesting place to invest

Speaker 2:

Enormous growth. And it's interesting because I'm Canadian. So I know kind of, you know, the two year debate, and then finally Canada was the tip of the spear and the legalization of cannabis. And a lot of States in the U S were saying no way, you're not going to see it here, except in maybe California and some of the other ones that started experimenting with it. And then this election , uh, is seismic in terms of the number of States who have now signed up and legalized cannabis , uh, whether it be recreational or whether it only be for

Speaker 3:

The hillside it's, you know, the election was , uh , as you say, you know , seismics seismic. I would, I would characterize it as really Goldilocks for cannabis and for cannabis investors because , um, perversely, I actually don't think a full federal legalization of cannabis is something that would be good for the industry right now. I don't think it would be good for , uh , the development of the infrastructure. I don't think it would be , uh , very good for investors because I still think that there's an enormous amount of regulatory , uh, you know , bureaucracy mates overlap of six different federal agencies that I think would be falling all over themselves. But what's proven is that on a state by state basis and letting you know state's rights and letting the States act, and this goes all the way back to , uh, you know , effectively the Cole memo under the Obama administration, which set the table for a lot of this, which is let the States do what they want to do in cannabis, without fear of , of federal intervention. And that's largely gone on. And so if you look at it

Speaker 2:

Complicated, right, because a lot of people don't understand that the S w you know, the States are legalizing it, but the federal government is still saying no. Um, and then, you know, I, I talked to somebody who runs a company in the U S in cannabis, and they said, that's very, that's , it's very upside down, because for instance, if you want to nationalize your company, or you wanna , you want to move cannabis from one state to another, or you want to move assets from the sale of proceeds of sale , uh, or health products, you can find yourself technically breaking the law with the federal government.

Speaker 3:

Yeah. And, and I, I think, you know , some of those legacy laws that go back in , in, in alcohol , uh, to prohibition of have a lot to do with some of the things that cannabis is enduring. Um, but yes, that's right. I , I think the capital markets and the banking dynamics in , in practical terms , um, also are , are the most onerous and, and, and punitive in terms of the cost of capital, but also how difficult it is for these companies to actually , uh, do traditional banking. Um, going over state lines is, is I think we're even, you know, at some point with a federal backdrop, I think that's still going to be a ways to go, but I think the tax issues , uh, as they relate to the IRS and , and treating , uh , any sales and , and kind of retail orientation from cannabis as a schedule, one drug is maybe the most , uh, debilitating, punitive, whatever you want to say about , uh, about operating in the United States. But , um , I will say that on a, on a state level, the companies that are vertically integrated, so that means that they're, they're , you know, seed to sale, right? And they're, they're growing the plant , uh, they're packaging the plant, they're taking it all the way through to a retail channel. Um, it are very profitable, very, very profitable, especially those companies that are operating in the States that have what we call limited license dynamics to them, which just simply means that , uh, there's only so many licenses that they handed out and those companies actually are very variable .

Speaker 2:

Well , there's all this stuff. I mean, you know, you're talking about some companies that are up 24%, another company is up 75%. So far this month after the legalization and the vote, I mean, hundreds of millions of dollars, billions of dollars, this is big stuff .

Speaker 3:

Well, in terms of market cap, you're right. And we're getting into the performance of the cannabis stocks. I , I run a cannabis ETF, ticker CNBS, and it's an active strategy because I think this is exactly what, what, what you need at this time. But, but what's interesting is that the movement in a lot of the cannabis stocks , uh , going into the elections was really on the back of their own profitability. So what we're talking about, not necessarily the fact that you had a very big , uh, uh, state's follow-through , uh, remember, and the elections, again, we won't go back into that part of the conversation. I'll just simply say New Jersey Montana , uh, Mississippi, South Dakota , uh , Arizona, all turn on the , the cannabis, you know, green light. And so what's , that meant for a lot of the companies though, that either were already set up in New Jersey, for example, which is, as you can imagine, going to be one of the biggest markets in the country, this was a boom, but, but the more important part of is , uh, despite what appeared to be growth at all costs, and a lot of companies that really weren't well-run , and weren't really making any money, especially those , uh, sorry to say, North of the border, and it's not, it's not to indict Canada. Um, it's truly to say though, that the United States is the biggest market in the world for a lot of consumer products. And it is certainly in cannabis and the companies that are set up and set up with good assets here are phenomenally profitable. And the move in the stocks this year, especially off the lows from kind of the COVID lows , um, is more about profitability and companies that are actually well-run. And in fact, they're probably in their third generation of management teams at this point. So it's an exciting time in the sector.

Speaker 2:

I was going to ask you, I mean, who are these guys and how sophisticated, but you're saying a lot of the, maybe newcomers have been thinned out, and these are sophisticated companies that , uh , and some of the bigger fish are eating the little ones.

Speaker 3:

Yeah. We're seeing a lot of consolidation at this point. Um, but if, if I took the top five operators in the United States , um, and, and they would be , uh, curely, which is actually run by a gentleman , we, we might've run out to and run into in Moscow, Boris Jordan, who started this company. Um ,

Speaker 2:

Truly, yeah,

Speaker 3:

Yeah, no, he's, he's built a great business and , uh , truly, which is a single state operator. And really , uh, I sh I need to actually restate that they're , they're in multiple States, but they're known for their dominance in Florida, and they're trying to grow outside of that market , um, GTI, which is Midwest based, but has very important assets on the East coast. And then in Illinois , uh, and some of the , uh, the Midwest , um, Cresco labs, also Chicago base , but , uh , very well situated in important States and a company called true leaf, which is mostly Pennsylvania , uh, and now New Jersey. And because of the profitability in those States are two of the best in the country. Um, that company has been , uh, that company is up 350% this year. So , um , there's your top five. And, and really in all of these cases , um, there's new management teams in place. And in many cases , uh, CEOs that were formerly CPG Titans , you know, guys that really knew how to build a business that was focused on a consumer brand, not the cultivation side of it. This isn't not a commodity story, it's not an ag story. It's ultimately going to be a very sophisticated brand story. And I think those companies that , that have , uh, elevated themselves here are not only very well run companies, but have begun to , to build on that branding .

Speaker 2:

Okay. Two quick questions , um, state governments, I mean, I don't want to be melodramatic, but is this the life ring that they need, you know, struggling with budget shortfalls and, and, you know, a lot of them are, I wouldn't want to say bankrupt, but I mean, teetering that way with, with what's happened in the COVID-19 economy.

Speaker 3:

Yeah. Look, let's be clear. This is a very difficult time , uh, on the fiscal side in state and then the underlying municipalities in many, many parts of the country. So what's cannabis mean? And , and, and what has this meant for support for cannabis legislation? Obviously, cannabis is a source of budgetary revenue that is exciting for a lot of the States Washington state, which is one of the most , um, uh, call it, you know , well, well founded markets. It's one of the oldest markets. It's one of the most sophisticated markets and that's today that , uh , they raised, they've raised a billion dollars in revenues from cannabis taxes , uh , since the inception of the market. And again, Washington was one of the first, but, you know, half of that a couple of years too . Yeah. That's, that's over probably about seven years. Um, and, and, and, you know, let's be clear, we're talking about Washington and with all due respect to our friends in the Northwest , um, it's not the biggest market in the world, right. So if you think about cannabis revenues overall in 2019 , uh, the latest numbers are about a billion, nine was collected in terms of excise and taxes , uh , on the state's levels. And as you can imagine, California, which is the biggest cannabis market in the world, much in the way that, you know , we know it's , it's one of the largest economies in the world on its own , um, is, was about a third of those revenues, about $650 million in , in California, which has been much maligned in much criticized, probably accurately in terms of some of their regulation . But leaving that aside, you asked about the impact of cannabis revenues. And there's no question that this is an exciting thing for the States and has a lot to do with the legalizations we're seeing, and it changed in public perception. And this obviously then goes straight through to Washington , uh, where you can imagine that, that, especially on the Republican senatorial side, where we've had the most, you know, obstinance you're, you're going to see a change, and you're going to see this, this , uh, uh, you know, this vote in favor of federal. And, and when that happens, I don't know , um, last week was a very important week , uh , both , uh, you know, from a , a , a , a momentous in terms of the headline, which is that the house voted to legalize cannabis right now, that's dead on arrival in this Senate. Uh , but it tells you at , uh, where this conversation is going and , and it's going, not only because I think a lot of people believe socially, it's the right thing to do, and it's the right assessment of, of a drug. That's not a gateway drug and , and is proven

Speaker 2:

I think my second question, which was perception , thank you for doing that. It's saves time, but change the perception on the government side change . The perception on the public side is because continue on please,

Speaker 3:

Because , uh, look, I think there's a lot of reasons why cannabis was made illegal and we call it, we call it marijuana , uh, which, you know, I'm doing my best to never refer to the term. I think it's, you know , I think it's a prohibition term. I think it's a term that actually was, was actually targeted to, to , uh, uh, on some of the criminal justice side against minorities. And , and I think the , the , the social conscience of this industry is high. And I, and I no pun intended. I do think that there's a dynamic where there's a better understanding of where people are medicating themselves across a lot of different products and some are, are, you know , alcohol and OTC products. And some of them are the more complex and the more devastating opioid crisis in the United States. And, and, and, and the understanding where cannabis both from , uh , a full spectrum of use cases, but certainly a lot of the OTC use cases. And then straight through to some of the use cases as it relates to pain management and, and whatnot. There's, there's, there's no question about the efficacy. Um, like there's better understanding, but, but, you know , it's clear, more research needs to be done. And this is part of , of where the legislation needs to allow research on the plant . And it's an incredibly complex plant. Um, and to be clear, I think the cannabis industry , uh , is out there saying this isn't about access of cannabis to minors . And , and in fact, a lot of, some of the tax money in Washington I talked about is going just towards those programs that keeps cannabis out of the hands of, of minors . It's, it's, it's an important issue. It's important to be regulated. It's important, like any product to bring the consistency, the safety that comes with regulation. And I think that's part of the understanding of cannabis. Then there are the dynamics around criminal justice and, and , uh , awareness of where , uh, clearly , uh, this has been an unfair , uh, you know, legal environment as it relates to cannabis and incarceration , uh, against

Speaker 2:

Certainly there's a lot of trouble with during, when you take a look at the , the numbers of people incarcerated for pretty minor possession charges. And, you know, it's interesting though, that you talked about kids, right? I mean, in , in the Canadian experience that they talked about, one of the reasons to legalize is to move it away from schools and get rid of the black market, make it safer. And then a recent statistics at 40% of the cannabis market share in Canada is still held by illegal producers. So yeah , exactly. Shake all that out. Now , it , and I think the black

Speaker 3:

Market, the gray market , uh, will continue to , uh, [inaudible] at least be a dynamic. And look, if you're changing perception , uh, the people that, at one point we'd had a big problem with that, the illegal head shop down the road was, was, you know , selling cannabis in through the back door. Um, when it's generally legal on the state level and 70% of the country believes it should be legal. The, you know, the gray market, the black market actually gets a benefit here. Right? A lot of people just don't care that it's going on, you know , in their neighborhood or they, they, they may not seek to , to, to, to bring in a, you know , enforcement again. So I , I think there's still a lot of work to be done. And I think it's all about, and I remember when I was 12, you know, my grandfather used to say to me, you should legalize cannabis to get the mob out of it. Um, and you've probably seen marijuana by the way. Well, I mean, he, his point was simply that it's there, it's out there. People are consuming it, people want it. And so why not? Why not tax it? Why not regulate it? Why not make it safe? And , and I think that's, you know , I think that's, what's going on

Speaker 2:

Anyway , huge growth to come, Tim Seymour of Seymour asset management, Tim. Great to talk to you, Dana . Great to be here. All right. I want to take you out to Jackson, Florida, and introduce you to Tom Grinstein, who is the chief revenue officer with Tikkun Olam. Hi Tom.

Speaker 4:

Thanks for having me. Thanks

Speaker 2:

For doing this. It says online to Tikkun. Olam is the most trusted name in cannabis.

Speaker 4:

We like to think. So. Um , you know, we spent , uh, about 20 years now , uh, doing actual , uh, double blind placebo controlled research , uh , pharmaceutical style research on our , uh, strains and our products. So we feel that, that gives us the title of a most trusted brand in cannabis,

Speaker 2:

Tikkun Olam was an Israeli company. Right. And , uh, as I understand it from, from one of your colleagues who I know very well, who works in the company, that , um, the problem is that when you started talking about a new industry in America of cannabis, a new legal industry, nevermind the illegal one , um , that a lot of people wanted to boast health benefits, but companies were, you know, six months old or a year old and suddenly, how could they claim any kind of research, but that's where companies like yours came in. And they're not very many of them Tikkun Olam that actually had, had been experimenting for a long time on the health benefits of cannabis.

Speaker 4:

Correct. Um, so we were actually the first company company in the world licensed to produce medical cannabis. Now, certainly before we came up to the scene, there were caregivers systems as in California and Colorado. Um, but , uh, as soon as we were able to achieve our licensure through a kind of interesting sequence of events in Israel , um, Dr. Raphael, Meshulum the gentleman who originally discovered THC in 1964 , uh , kind of took our founder under his wing. And so we were able to really start doing research from are , are very honest .

Speaker 2:

So now you have all of these States on election night that have come around and legalized marijuana. So you have like some 35 States now, right? The vast majority of them. Whereas just a few years ago, we were talking about, you know, those first few States that were willing to have legal cannabis. So is that good news?

Speaker 4:

Um, I think it's wonderful news , uh, you know, from a , uh, from a corporate standpoint, it may not be, but , uh , from a compassionate standpoint and myself as an active patient as well, you know, the expanded access to , uh, effective medicine is , is a wonderful thing. Uh, and, and even for those who do not have a qualifying condition, you know, access to cannabis , uh, is, is, is something that I , I feel is a rights that all should have.

Speaker 2:

So how much of this is recreational and how much of it is medicinal?

Speaker 4:

Um, obviously that vary , varies from state to state. You know, I live in Florida where we are technically a hundred percent , uh, medical market. Um, but you know, you see States like California , um , Arizona, certainly having their adult use legislation coming down New Jersey. You know, these are our burgeoning markets that are going to convert from strictly medical to medical and adult use. Uh, it's an exciting time.

Speaker 2:

What is your, if you don't mind me asking, because you refer to it, what is your personal story medically? I mean, how has cannabis been important to you then?

Speaker 4:

Sure. Um, well, I have a few spine , um, which , uh , basically has me constantly in pain and until I discovered medical cannabis , um, I , uh, had not slept more than three consecutive hours in 14 years. Um, but through horrible. Yes . Um, and it's compounded by the fact that I'm also allergic to opioids, which for most back pain sufferers that you might actually consider that a blessing because back then certainly has led people a lot of down the route into , uh, addiction. Um, so this has been a life-changing , uh , medicine for me it's kept me healthy and happy in my quality of life has improved a thousand percent .

Speaker 2:

So is that where there's the sea change in public opinion in the U S where, you know, when the Reagans years you had this war on drug and cannabis was just another street drug that they, you know, locked people up for, but really in the last decade, you know, there's been so much talk about it, reducing pain about it, helping people. And so then when it's on the ballot, you see, I mean, a huge percentage of Americans supporting it. Whereas if you had done it 20 years ago, they wouldn't have voted that way with that.

Speaker 4:

No, very much so. Um, I think what you're seeing is , uh, you know, the , the progression or the , the propagation of information. So you have so many patient successes in California and Colorado and, and Israel , uh, you know, as, as medical markets grew , um, that information becomes viral and expands. And so now you have , um, as opposed to, you know, the Nancy Reagan era of just say, no,

Speaker 2:

I was just trying to find my notes, or because it was 84% of Americans in 1969 thought marijuana , um, should shouldn't be legal, right? And then in 2019 pure research, 91% of Americans supported legalization.

Speaker 4:

You know, you , you, the, the , the, the success stories have given birth to what I think of as the skeptical boomer. You know, there are folks out there who have been told their entire life, that cannabis is evil, that it's a gateway drug. Uh, and now the data , uh, is skewing in the other direction. And it's giving those folks a justification to say, maybe there's something there. Maybe this can help me or somebody, I know

Speaker 2:

What don't you like about this? When you see all of these companies suddenly opening up in all of these markets, what are the pitfalls, do you think, what I mean, is it standards? Is it testing? Is it regulation?

Speaker 4:

It's, there's a confluence of a number of things, and it's all generally propagated by the folks who , um, are either a profiteering or do not really understand , um, cannabis itself , uh , especially from the regulatory standpoint. So my fear is, is going too big, too fast , uh, without the , uh, without the proper sets of regulations in place , uh , without those regulations being set by folks who really do understand cannabis as medicine

Speaker 2:

Like THC levels, because I know in Canada's experience, there was wildly vastly different measurements of THC and the quality of cannabis that was going to be sold legally and retail nevermind, illegally.

Speaker 4:

Uh, well, I think that there are a number of things, testing standards , uh, understanding what , uh , can happen to the plant and understanding how legally , uh , testing should be done around that. Um, from the consumer standpoint, yes, I think there's, there's a huge emphasis, you know, most people's experience with intoxication comes from alcohol. So they associate higher percentages of potency with , uh, that level of intoxication. When that's not necessarily the case with cannabis, you're talking about receptor occupancy that can be manipulated by a number of things aside from just THC. So yeah, you can see 30% THC cannabis on a shelf in a dispensary and think that, wow, that's going to be the most powerful thing in there when really it's a better , uh, there could be something down the lower teens that's going to affect somebody's level of intoxication much differently because of the combination of minor cannabinoids and terpenes affecting receptor occupancy.

Speaker 2:

Let me, let me take you to another topic, which I don't quite understand because in Canada, it was legalized nationally with federal standards in the us. You have States that have now passed it, but federally it's still, should I use the term illegal

Speaker 4:

A hundred percent illegal. So what

Speaker 2:

Does that mean? How does that translate into what happens then in the market?

Speaker 4:

Uh, well , uh, in, in a couple of manners , it really, we're getting into the kind of obscure , uh, you know , looking into the crystal ball here. Um, but currently the federal government , uh , has said that they will not interfere with state's rights to regulate themselves in reference to cannabis. Of course, that means that there is no interstate commerce on cannabis, therefore , um, it does make banking a bit of a challenge because then you're moving, you can be moving money between States that are the proceeds of , uh , of producing cannabis, but so far the federal government has, let's just say, they've been cool with it. Um , but , uh, you know, as that changes, either we go towards a federal D schedule, which I think we're all hoping for, but should that fail? I think you'll see state compacts , uh , where interstate commerce has permitted , um, or at least not restricted by state laws. Of course the da may have another opinion on that and decides to interfere. But I think you'll see, for example, you know , uh, if New York comes to an adult use in Pennsylvania and New Jersey , uh, are all adult use as well. I think you'll see those three governors get together and say, Hey, we're going to permit interstate commerce here , um, on a, on a regulated basis , uh, with a, a nod, a wink and a nod from the federal government that they won't interfere

Speaker 2:

Because technically as a , as a producer or , um, a commercial outlet, then you could be charged, then could you buy them ? Absolutely. So there's risk there and the people want it sort it out. You know, I want to ask you about something else really quick, John , before I let you go. And that is that in Canada, one of the biggest arguments by the prime minister Trudeau government was that, you know, let's legalize it. Um, let's, let's take the retail outlets away from, you know, kids , schools let's control quality, let's squeeze out the illegal market , um, and , and control this on a better level. So that it's , it's more healthy. It's, it's , uh , more healthy in all sorts of ways, right. But 40% of the cannabis market share in Canada is still being held by illegal producers. So-called illegal producers. Do you think you're just going to experience a lot of the same thing in the U S

Speaker 4:

I think you will , uh, for , for a certain period of time, you know, until , uh, the, the outweighs the reward, obviously with federal D schedule as a nation , we'll see competition rise to a point at which , uh , pricing is suppressed to the black market rate, but that doesn't happen overnight. Um, and , and it really is a factor of production . Um, I think one of the issues that has prevented Canada from getting there is this kind of concept of , uh, of over-investment , uh , which has led to ghost canopy and production issues , um, that are present . Um, there are greenhouses that were built , um, strictly so that a company can say, Hey, we've got, you know, X, million square foot of canopy up that we convergence cannabis on it . Well, there aren't enough people to buy the cannabis that would be produced by that amounts of, of greenhouses that was just done as an investment play to , to bolster share price. Um, as a result of that, you're still seeing quite high retail prices , um , which is facilitating the black market , um , or even gray market , uh, workings within Canada. And as I said, the same will happen here in the U S um , but eventually prices will be, in my opinion, prices will be suppressed to the point at which , uh, the gray market is no longer profitable. You , the chief revenue officer, last question on revenue. I mean, everybody thinks that , uh , you know, this is the it's striking gold. Now it certainly is for some States, right. But in terms of companies and you guys have been doing this for years now, I understand , um, there's a lot of challenges in terms of being able to being able to make a go of it and do well in an industry that keeps getting turned up, turned upside down every few months. Right, right . Um , there certainly are challenges. Uh , the main one in the us , uh, would be, you can't operate as a single entity. I mean, if you, if you take into account the , uh, you know, DC, Puerto Rico , uh, et cetera, you know, if you were to be present nationwide, you'd need to have 52 separate operating entities all with their own infrastructure and , and all with their own legal oversight. So , um, it's, it's a challenge every day to, to be able to, or to have to manipulate the nuances between regulation .

Speaker 1:

So in until the federal government gets online with state governments, that's what you're going to face.

Speaker 4:

Of course. And he will continue to see , uh, you know , inflated prices as a result of that here, because you can't consolidate operations from a, not only from a growth standpoint.

Speaker 1:

Well , Tom grievance, Dean of Tikkun, Olam, thanks so much, Tom. And that's our backstory for this Christmas week, 2020 I'm Dana Lewis, please subscribe to backstory and share our link wherever you are, please stay healthy and safe. And I'll talk to you again soon.