High Spirits

#048 - Cannabis Business News Roundup: Vape Gate Part Deux? Pardon Me?! + HBD to us!

June 20, 2024 AnnaRae Grabstein and Ben Larson Episode 48
#048 - Cannabis Business News Roundup: Vape Gate Part Deux? Pardon Me?! + HBD to us!
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High Spirits
#048 - Cannabis Business News Roundup: Vape Gate Part Deux? Pardon Me?! + HBD to us!
Jun 20, 2024 Episode 48
AnnaRae Grabstein and Ben Larson

๐ŸŽ™ Join us for another ๐‚๐š๐ง๐ง๐š๐›๐ข๐ฌ ๐๐ฎ๐ฌ๐ข๐ง๐ž๐ฌ๐ฌ ๐๐ž๐ฐ๐ฌ ๐‘๐จ๐ฎ๐ง๐-๐ฎ๐ฉ ๐ŸŒฟ

In one of those rare occasions we find Ben and AnnaRae in one place at the same time, at the Vertosa HQ, before AnnaRae jets off on her next trip, we have much to catch-up on!

๐Ÿบ California: Vape Gate Part Deux?
๐Ÿ‘ฎ Maryland: Historic pardoning of 175,000 cannabis convictions
โ˜€๏ธ Florida: The Cannabist exits the Sunshine State
โŒ ๐—ฃ๐—ผ๐—น๐—ถ๐—ฐ๐˜† ๐—จ๐—ฝ๐—ฑ๐—ฎ๐˜๐—ฒ: All things hemp, cannabis, and Farm Bill
โž• Oh, and HAPPY FIRST BIRTHDAY TO US!!! (belated...oops)

As always, High Spirits is more than a podcast โ€“ it's a dynamic conversation among leaders in the cannabis industry. We film live, and your participation is what makes our discussion richer and more meaningful. We invite you to contribute to the conversation and let us know what's important to you! What topics should we delve into? We welcome your questions and comments, so drop them into the chat and join us as we dive into the current events of the cannabis industry!

--
High Spirits is brought to you by Vertosa and Wolf Meyer.

Your hosts are Ben Larson and AnnaRae Grabstein.

Follow High Spirits on LinkedIn.

We'd love to hear your thoughts. Who would you like to see on the show? What topics would you like to have us cover?

Visit our website www.highspirits.media and listen to all of our past shows.

THANK YOU to our audience. Your engagement encourages us to keep bringing you these thought-provoking conversations.

Remember to always stay curious, stay informed, and most importantly, keep your spirits high.



Show Notes Transcript Chapter Markers

๐ŸŽ™ Join us for another ๐‚๐š๐ง๐ง๐š๐›๐ข๐ฌ ๐๐ฎ๐ฌ๐ข๐ง๐ž๐ฌ๐ฌ ๐๐ž๐ฐ๐ฌ ๐‘๐จ๐ฎ๐ง๐-๐ฎ๐ฉ ๐ŸŒฟ

In one of those rare occasions we find Ben and AnnaRae in one place at the same time, at the Vertosa HQ, before AnnaRae jets off on her next trip, we have much to catch-up on!

๐Ÿบ California: Vape Gate Part Deux?
๐Ÿ‘ฎ Maryland: Historic pardoning of 175,000 cannabis convictions
โ˜€๏ธ Florida: The Cannabist exits the Sunshine State
โŒ ๐—ฃ๐—ผ๐—น๐—ถ๐—ฐ๐˜† ๐—จ๐—ฝ๐—ฑ๐—ฎ๐˜๐—ฒ: All things hemp, cannabis, and Farm Bill
โž• Oh, and HAPPY FIRST BIRTHDAY TO US!!! (belated...oops)

As always, High Spirits is more than a podcast โ€“ it's a dynamic conversation among leaders in the cannabis industry. We film live, and your participation is what makes our discussion richer and more meaningful. We invite you to contribute to the conversation and let us know what's important to you! What topics should we delve into? We welcome your questions and comments, so drop them into the chat and join us as we dive into the current events of the cannabis industry!

--
High Spirits is brought to you by Vertosa and Wolf Meyer.

Your hosts are Ben Larson and AnnaRae Grabstein.

Follow High Spirits on LinkedIn.

We'd love to hear your thoughts. Who would you like to see on the show? What topics would you like to have us cover?

Visit our website www.highspirits.media and listen to all of our past shows.

THANK YOU to our audience. Your engagement encourages us to keep bringing you these thought-provoking conversations.

Remember to always stay curious, stay informed, and most importantly, keep your spirits high.



Ben Larson:

Hey everybody, Welcome to High Spirits. It's episode 48. Anna Rae and I are live in person and we're recording June 20th, 2024. And we missed our first birthday. We did.

AnnaRae Grabstein:

We just realized our first episode was June 1st and we're well into June, so yeah, happy birthday, happy birthday.

Ben Larson:

Yeah, I guess that's what happens when you're gallivanting around the world and working your ass off.

AnnaRae Grabstein:

Yeah, you know, I was surprised to realize that we were able to pull off about 48 episodes in a year. To be honest, we had hoped to try to do it every week.

Ben Larson:

At 52, we're doing pretty good well, okay, so we set that intention in january of this year, that's true, which we're a little off pace, but we can catch up still. Yeah, um, last year I don't think we actually had set that intention. We, we just got going. Uh, we, we, we had our initial pilot episode a few weeks later. We had Christy and Jay Khan from Cannes and Kiva.

AnnaRae Grabstein:

That was a great episode. We talked about pride products and kind of identity politics and how cannabis companies can navigate that. It's still relevant and now we're back in pride month.

Ben Larson:

We are back in pride month.

AnnaRae Grabstein:

I think the reason we didn't set a clear goal when we started and you maybe had more confidence than I did, but I didn't know if anybody would care or listen or pay attention.

Ben Larson:

So here's the thing about me I do things, whether people care or not.

AnnaRae Grabstein:

But yeah, you know, I yesterday we had a conversation with someone in the industry who told us that someone on his team summarizes our episodes for him and gives him the highlights and the most important tidbits that were said. I think that I almost cried. I couldn't believe it.

Ben Larson:

It makes me feel unduly important. Don't feel too important.

AnnaRae Grabstein:

Stay humble, my friend, but it's really fun. We're in person at the vertosa office in berkeley today and we've done very few in-person episodes together. Uh, we, we did one in vegas when we were there and we did a live event and um, and we did one other one, uh right, when we were getting started. But mostly we've been all in different places all over the country, in the world or from our home offices.

Ben Larson:

It makes me like really understand the impact of okay, so I'm going back to like some early like tech day thoughts is like the importance or impact of latency in a conversation, even if it's just milliseconds, right. And so, like, when you're in person, like the immediacy, the visual cues, everything allows you to have just such more natural conversation. And then my brain goes down this wormhole about how, like Zoom, our Zoom life impacts, like you know, our relationships with everyone and everything. But we don't need to cover all that today.

AnnaRae Grabstein:

It's a really good point. I mean, there is so much power in the fact that we can be in all different places around the world and get to work with people and push things forward and, at the same time, it's really nice to be here looking at your eyes instead of at my own face on the Zoom screen. So, yeah, you know, I think it's an important lesson about as companies and leaders continue to figure out what is the right type of workplace culture and people lean into hybrid of like. How do you make it so that people have the flexibility to have healthy work-life balances but also not getting away from meeting in person from time to time?

Ben Larson:

Yeah, absolutely Well time to time been on the road. I think my team actually calculated for me like five of the last seven weeks, which the amount of ground both physically and proverbially covered is like it was really time well spent. You know those in-person connections and the conversations that you can have like ad hoc and not perpetually scheduled in 30 minute increments on your calendar. It's just really powerful.

AnnaRae Grabstein:

So question about that. I talk to people in different businesses all the time, all day long, and I hear kind of conflicting perspectives about the usefulness of going to conferences and networking events that are cannabis-focused or hemp-focused, and you've been going pretty deep. Some of them have been outside. I know you went to BevNet, which was not an industry event but a beverage-focused event that THC was highlighted in. What's your perspective? Do you feel like you're getting a lot out of these conferences and events? What's the strategy?

Ben Larson:

Yeah, I'm getting a lot. It's taking a lot. I'm very happy to be home. I have a clear schedule this summer just to focus on getting work done. A lot of it post-processing, kind of what was established as a, as a foundation from all these conferences, um. But really it's going in with intention, right. It's like who's going to be there? Like, who do I do I want to talk to? What are the conversations that I could potentially have? Where can I move the needle, whether it's on business development policy or otherwise, or am I just going as an observer to, as a CEO? Allow it for me to have a better understanding of what the future holds.

Ben Larson:

Bevnet was great because we had a number of representatives from the cannabis beverage community and I really appreciate how Jeff Kleinman and the BevNet team have really created space for THC. Conversely, I was at Beverage Forum a few weeks prior in LA and over a two-day period, where we're talking about the future of beverage, thc wasn't even mentioned once, almost as if it was like a prerogative of the organizers to make sure that it didn't happen. But what I did realize in that conference is that everything was about mood enhancement. It was the next mega category category, other mega categories being like energy drinks or alcohol, right. So mood enhancement being the next future category, like that is cannabis, like it is the ultimate mood enhancer, um, especially for all those, uh in the industry. I think we would all agree. Um, so, yeah, it's a little something, something different in each one, but if we choose them properly and we set the right intentions, they can be incredibly valuable.

AnnaRae Grabstein:

Yeah, and I completely understand and have empathy for the people who I talked to, who are operators running big companies that are like I don't have time for that conference or that's too expensive, and I'm keeping my head down and focused on what I'm doing. I get it. It does cost a lot, it isn't for everybody and you can't do them all, so you got to make choices. But I'm with you. I get.

AnnaRae Grabstein:

I find a ton of value in in-person connection and the rapport. That happens when you get to sit down with someone and have a casual, free, flowing conversation, that the accelerated ability to build trust with someone in that environment is just something that can't be underestimated, and so I find that highly valuable. Especially cannabis is really relationship driven and there's a lot of deals and partnerships and in order to do that, we have to build trust with the people that we're looking at deals with, and that's a great way to do it. And then the other thing that you said that I liked was just sometimes going to really to learn and be an observer and to sit back and experience something, and that's very much the way that I approached Minnesota. It's like I am there to experience the market and to sit back quietly, even if as a wallflower, and watch what unfolds in front of me and who's talking to who and who's moving the needle.

AnnaRae Grabstein:

So yeah, I'm all for it, but you gotta make choices which ones you go to.

Ben Larson:

Well, yeah, and like, after spending a great deal of time in the cannabis industry, you started embarking on broader like psychedelics marketplace and I'm sure when you first start going to those conferences, like, oh, I know far less people, I'm far less important here than in my previous world, and that's what I get when I, anytime I go to like Expo West or Beverage Forum. I'm like previous world and that's what I get when I, anytime I go to like Expo West or Beverage Forum, I'm like I know hardly anyone here. I get excited when I run into one person that I, that I recognize, and I think that's that's healthy, especially as an entrepreneur. You know like we thrive in uncomfortable situations and and I know no one likes to hear this from me, but like as an introvert, yeah, yeah, we don't, but like as an introvert.

Ben Larson:

Yeah, yeah. We don't believe you're an introvert but okay, like the social anxiety of like not knowing anyone, like it's like I have to like go into the third person and be like, oh, this is a fun exercise, but also just like, yeah, we aren't that important. We have a very small industry and we need to realize where we sit in the grand scheme of everything and that the powers, especially when it comes to the policy side, the powers that exist that are beyond our control.

AnnaRae Grabstein:

Yeah, and on the in-person events when they're focused on policy, be them lobby days or a trade association that's having a conference. One of the things that I've always enjoyed most about those types of events is how, in the policy setting, you can sometimes lock arms in a very unique way with competitors and find alignment that you don't get to find when you're competing in the marketplace to sell your products into the same shelf or to sell your products to the same customers or whatever it may be.

AnnaRae Grabstein:

And so policy is this great kind of reckoning, of alignment. That is super important and I've always gotten a lot out of that. And that type of collaborative alignment, then has later, after being in this for over a decade, has led to opportunities down the line. When people are in new places and new companies and are doing new things, it's like, oh, we locked arms five years ago trying to get that bill passed and and now? Now let's do a deal together.

Ben Larson:

Now let's talk about how these companies that we're working with could collaborate or do a jv and like there's, there is trust, like we know we're good people yeah in a different kind of way I I posted about this after the the canara conference, um and I I came to the realization that there's a lot of people that don't understand what canara is, even though we had jillian shower on on the show. Uh, great episode, you should go watch it. Um, it was amazing to be able to like put together, kind together, this ad hoc breakfast after the last day and we had heads from the US Hemp Roundtable and the US Hemp Authority attach, the American Trade Association of Cannabis Hemp, who might be considered the polar opposite of the Roundtable.

Ben Larson:

We had the Cannabis Beverage Association, the cannabis beverage association the hemp beverage alliance, astm and cia and cia and and you invited me and you which is awesome, and our guest next week, uh, scott o'malley from clarity, um, and just so many other great thought leaders, all talking about the pathway forward for beverage, which I love, but, yeah, all those people and it was a very civil conversation. I don't think there was even an elevated voice, or certainly not a punch thrown, as one might expect, and it's like you get everyone off LinkedIn for a little bit and you can actually be human and have real conversations.

AnnaRae Grabstein:

Well, we don't want to bore people too much with our gallivanting around the country. Maybe we put a pin in this, but but you know we are recording this in person and one of the reasons is because I am on my way to the airport for another trip, but this time it is not for a conference, even though I'm going without my family. So it felt at first like I was going on a work trip. But I'm actually going to Las Vegas to go to the Dead Co shows.

Ben Larson:

Oh, it's amazing In the sphere.

AnnaRae Grabstein:

It's at the sphere which I'm so excited about, On the inside.

Ben Larson:

I've only seen the outside screen it looks so cool.

AnnaRae Grabstein:

I'm sure that people have seen the pictures and the videos that people are posting. And I'm bringing my dad and this was his request. He wanted to go, and how do you say no to that? So we are going to have a great time. I've got great dinner reservations. We've got a great hotel. We are going to have a great time. I've got great dinner reservations. We've got a great hotel. We are going to have so much fun. So I'm really pumped to go to Vegas and see the dad.

Ben Larson:

I can't wait to hear how it goes. I'm you're inspiring me. I want to take my dad. Do you know how long they're playing there for?

AnnaRae Grabstein:

Oh yeah, they extended there's. There's some shows that go all the way into August. It's like they're doing these three night weekend runs thursday, friday and saturday and they're doing them every weekend, at least well into july.

Ben Larson:

You can totally take your dad yeah, the geek in me just needs to go. I just want to know what it's like to like choreograph the artwork for that amazing screen that they have. I know that must be like a huge endeavor in its own.

AnnaRae Grabstein:

Yeah, it sounds so cool and I'll blow up my dad's spot a little bit. Last night, when we were on the phone talking about packing, his question to me was so can you smoke weed inside?

Ben Larson:

the sphere.

AnnaRae Grabstein:

Great question. And I was like well, I'm sure it's technically against the rules, but whether it's culturally acceptable or not, like remains to be seen. And he said, ok, well then, I'll bring a vape pen. And I was like solid choice.

Ben Larson:

I mean if the visual effects team is doing their job. They'll just have a lot of smoke machines at the right time and the crowd will understand the assignment yeah, absolutely, uh, so um biggest news in cannabis that's on your mind uh well, uh well, let's start with california.

Ben Larson:

We're sitting in california. We have our lovely, uh, california bear right here. When I saw the article released it kind of made me think of VapeGate. So VapeGate Part Deux, and we're talking about Alex Halperin and I forget the other author's name in the LA Times releasing a pretty in-depth investigative report on pesticides being present in vape carts across the regulated marketplace in California, which I haven't heard of negative impacts from these pesticides being in the vapes. But, as we know, with pesticides sometimes it's a long lasting impacts and all this kind of stuff. And it was pretty salacious.

Ben Larson:

You know the the, the ingredients that people are using. They might not be on a California list but they're on on a federal ban list. So, like, who's at fault comes into, comes into mind, but I don't know. There's just a. You know as a company that sits at the intersection of hemp and regulated cannabis. Yeah, it's like, wow, it's like there's a lot of stones being thrown in both directions and this is just not a good look and, frankly, the cannabis industry is in such turmoil, especially in California, that really doesn't need this kind of bad press at the moment. So, yeah, I'm kind of curious, you know, as someone who's been very involved with the supply chain over the years, like what was your initial reaction?

AnnaRae Grabstein:

Yeah, oh my gosh, so many reactions and so much confusion about what my real high level takeaway is. But yeah, I have started my above ground cannabis career in the lab space and then came up in vertically integrated company that was very focused on indoor cultivation. My community of has always been deep in cultivation in California and, um, the first thing I did when I read this report was sort of question. It of like how how much can we trust these lab results that are part of the investigation? How much can we trust these lab results that are part of the investigation? We know that all the products that come to the shelf in legal retail have been tested. So what this report is saying is that those results were bogus or that they also are not covering enough in terms of the type of analysis that's that's being done to to determine, like, what is present in these substances and and so that was. It was just I was immediately questioning of it because I feel protective of cultivators and I know that cultivators and I can't speak for all of them, but the ones that I know and the ones that I work with are good people that care about what they're doing. They have tremendous pride in the plants that they're growing and they consider their farming techniques to be the cleanest that are out there. People often talk about the California. Cannabis is cleaner than than organic food because of the restrictions around pesticides.

AnnaRae Grabstein:

So I just I didn't want to believe, to be honest, that what this report said was real, but after a few days of processing it, I I have come to believe that it probably is the case. That's at least some of the test results that they put forth in the article is probably true. I'm not. I'm not yelling fake news from the corner, but really what I started to think about was how?

AnnaRae Grabstein:

But? But why? What is the environment that has created the situation where a cultivator is using pesticides? Because no legal farm in California sets out and intends to use pesticides. If it's happening, it's happening out of desperation, because there is some type of impact happening in the cultivation, like a bug or mold, or something is happening that they're trying to control and to save the harvest. And when you have a farm and or a grow room and all of a sudden, a bug becomes present or some type of mildew or powdery mildew shows up, I think that that what you're what you're doing is you're weighing the risks and the rewards, and and I think that what you're doing is you're weighing the risks and the rewards and I think that one of the things that is my biggest takeaway as I process this is that cultivators have become increasingly desperate and, as a result, very few are winning and very few have financial security, and the lack of financial security is causing people to take desperate measures, and I'm not saying that those desperate measures are okay.

Ben Larson:

I'm just simply saying that I think that it's symptomatic of a larger problem yeah, yeah, the concerning factor to me is that, right or wrong, the regulators actually have not acted on complaints that they've received and that was identified in the article.

Ben Larson:

And there's like products that could have been taken off the market, that were tainted, supposedly um or allegedly um, and the dcc did nothing about it, and you know I've seen a little bit of chatter online. It's like we pay an inordinate amount in taxes, in licensing fees, every year and like to not have like the industry supported with the regulation that we pay for, and when I say supported, I mean like upholding the image of the regulated market, the real california cannabis market, as they have spent 60 million dollars on a, on a marketing campaign for like it's a total stain. Uh, on the on the regulators, I feel um, which I'm not pointing out to any particular regulator. It's, you know it's, it's a, it's a complicated infrastructure. I know um, and we've had, you know, certain regulators on as guests, and so I'm not. You know it's a complicated infrastructure, I know and we've had, you know, certain regulators on as guests.

AnnaRae Grabstein:

And so I'm not pointing the figure at any one person, but the construct is pretty fucked up at this point. Yeah, so what you're highlighting is a lack of enforcement, and you're right and I maybe have said this before on this podcast. I certainly say it all the time in my work with clients as that compliance is a spectrum, it isn't black and white. And and within that spectrum, when a licensee, a licensed cannabis business, is assessing the spectrum of compliance, of of how to participate in something that might at first seem black and white, the first place you go is the likelihood of compliance, of how to participate in something that might at first seem black and white. The first place you go is the likelihood of enforcement.

AnnaRae Grabstein:

And so when you're trying to decide, in that desperate moment, when you maybe have bugs in your grow and you're trying to decide, okay, I am faced with two choices here. I'm faced with either my entire crop becoming loss. I'm faced with either my entire crop becoming loss or having to use a potentially banned substance to save my crop. What do I do?

Ben Larson:

Well, within that really complex and shitty decision.

AnnaRae Grabstein:

You then think about well, if I do the thing that technically is against the rules, what might happen and then if the outcome of what might happen is likely nothing, then it's a lot more likely that someone's going to choose that path because there isn't a fear of enforcement. I'm not over here waving the flag for more enforcement, but you're right that when the regulatory groups that are supposed to be enforcing the laws don't it, it makes the likelihood of participants in the market choosing to comply with those rules less likely.

Ben Larson:

Yeah, yeah, I. I'm particularly sensitive to it because there's another California agency that has been putting out salacious messaging around the safety around THC beverages and they're just it's a lot of fear mongering that is going on and they're actually doing some enforcement and it's like if you're going to enforce these rules where actually technically there's very little potential for harm, if not none, I guess you can't say none from a probability standpoint. But in this particular case it's like these are like proven carcinogens, right? Um? Which quick sidebar do you know? Jill from Willow Um, is that? Is this, as you, the remediation, uh technology that she has? Is this a potential use case?

AnnaRae Grabstein:

I don't know. My understanding is it has more to do with microbiological contamination and not pesticides. Okay, but Jill reach out to us.

Ben Larson:

Jill, you want to be on the show? Yeah, come on.

AnnaRae Grabstein:

Yeah, tell us about it. Yeah, yeah, I mean, I totally understand why it feels incredibly frustrating to have a government agency saying that that an edible that isn't combusting, you know is, is potentially unsafe when they're not enforcing the rules that exist. Right, so, absolutely, I think I. I guess, luckily, there have been no adverse events that have been reported as a result of this and I I hope that there are none Like.

AnnaRae Grabstein:

The last thing that we want is any kind of public health or safety problem to come up, and my takeaway is that the brokenness of an over-regulated environment like California is trying to manage through has a lot of unintended consequences in terms of trickle-down effects, of operator choices, and this is a bad choice that people are being forced to make because they haven't been able to realize successful businesses that can help them to have more freedom to make good decisions.

AnnaRae Grabstein:

And I'm certainly not trying to say that it's okay if people choose to use a pesticide, but I think it is important to understand the environment that puts people in the situation that they're forced to make that choice, or they feel forced to make that choice, forced to make that choice. So, yeah, I mean, and and I hope it doesn't become vape, vape gate, part de. So if you're out there and you're listening and you're a cultivator and you want to share with us any of the insights that you have about this, I would be interested to hear what cultivators think about the pesticide rules and how they could be improved, changed. You know if they're working, if they're not. Yeah, those voices matter in this conversation.

Ben Larson:

Okay, all right. Well, let's pick up the mood a little bit. Let's go over to the East Coast. Oh yeah, maryland, maryland, 157,000, 175,000, 175 sorry dyslexia, uh, 175,000, um pardons, pardons, that's huge by governor westmore, go westmore we need more, more more more, more so cool.

AnnaRae Grabstein:

It was so exciting to to hear this news this week and it's such a big number.

Ben Larson:

Maryland is not a huge state and I think in comparison, we got really excited the other month when Minnesota pardoned 68,000.

AnnaRae Grabstein:

Something like that, I believe.

Ben Larson:

So yeah, more than two times that in a smaller state.

AnnaRae Grabstein:

Yeah, and so when you definitely smaller by? Physical size by land mass yeah, I think there are probably more people in Maryland, but I'm not sure.

Ben Larson:

So on fact check.

AnnaRae Grabstein:

Yeah, but come on now, Like. So the Biden administration made a pretty big deal about about the ways that they were going to um expunge people's records, and my understanding is that it has been less than 10,000 people who have benefited by those efforts. So that has been a bunch of lip service, and to see Wes Moore take this flag and carry it forward gives me a lot of hope that there is a generation of younger politicians that truly understand the work to be done to get cannabis off people's records, Like let's be done.

AnnaRae Grabstein:

Let's have that be in the rearview mirror right.

Ben Larson:

Yeah, well, it's a huge step, and for it to happen this week while Juneteenth is happening and just kind of every step that we can take to kind of reverse the impacts of the war on drugs, is huge. So huge applause to Maryland. More of that, please, yeah, and hopefully that starts to infiltrate the federal discussion a little bit.

AnnaRae Grabstein:

Absolutely. I love it. Now let's from Maryland, let's travel south. Let's talk about Florida for a minute.

Ben Larson:

Ah, the Sunshine State. Is that right? Is that what it's called? Yeah, I think it's the Sunshine Bridge, right? Yeah?

AnnaRae Grabstein:

Sunshine State and also another call out. We want to have a solid Florida stakeholder on the show to talk in more depth about Florida in the coming weeks leading up to the election in Florida. So if that's, you, let us know. But there, yeah, there was a bunch of interesting things that have been happening in Florida the last couple of weeks, but the one that that made the headlines this week is the Cannabis, which is a public MSO, previously called Columbia Care, announced that they are pulling out of Florida, divesting, selling their assets there.

AnnaRae Grabstein:

And, to remind people that are listening, in Florida it is a very limited medical market where there are less than 30 companies that have licenses and those are strictly vertical licenses, fully closed supply chain.

AnnaRae Grabstein:

Those businesses don't even transact with each other except under very specific and kind of unique circumstances.

AnnaRae Grabstein:

So when you are a Florida operator, you grow everything that you sell, everything that you manufacture and that trickles down into your own retail footprint, and so it's a big move because, in general, the companies that are in Florida and the market has viewed Florida as kind of a golden crown, so to speak, because that vertical environment has led to some pretty insane regulatory and legislative capture for those businesses that have been participating, and Trulieve is the one that people know about the most in terms of the level of scale that they've achieved there with over 150 stores.

AnnaRae Grabstein:

Wow, the Cannabis only has 14 stores in Florida. So you look at that scale. Of that, trulieve is 10x plus bigger than them, but they've been losing just in Q1 of 2024. They lost $5 million in Florida and so getting out of Florida makes sense, I guess, but at the same time there's a lot of people that were looking forward to Florida transitioning to adult use, and the public markets have been responding to a belief that those companies that have a foothold in Florida are going to do well. So this is notable.

Ben Larson:

Yeah, yeah. And the undercurrent of policy in Florida is just really interesting and everything DeSantis is doing as far as vetoing the hemp bill, which in essence kept the kind of unregulated kind of nature of of the of hemp in florida kind of at least alive for the next year, um, it'll be interesting to see what happens with regulations, um, as that bill is revisited in the next session. And then there's also the cannabis, the recreational cannabis bill.

AnnaRae Grabstein:

Yeah, that will be going to voters in November.

Ben Larson:

It's a high bar. It's a 60% vote. That's necessary and very few states have passed with 60%.

AnnaRae Grabstein:

That's right. But at the same time, if we look back to when Florida passed their medical law, which was also a voter initiative, it passed with 72% of the vote, which was the highest percentage of voter initiative ever passed. Apparently, I think it was Hirsch, jane, who told us that, so I'm quoting you, hirsch, on that, if you want to fact check me.

AnnaRae Grabstein:

But, so medical passed with 72% check me. But so medical pass was 72%. So if you compare it to that and you say, okay, well, if adult use only needs 60% to pass seems possible. But the polls are showing that adult use is kind of fluctuating between 58% and 63%. So I don't think anyone feels very comfortable with that and we're going to see it play out that DeSantis is going to come out strong against the adult use market while we're getting a ton of money inflows into the yes camp through the existing Florida operators led by Trulieve and then the kind of the group around Kim Rivers and, yeah, Interesting, I don't know.

AnnaRae Grabstein:

I I have spent a good amount of time thinking about the Florida market and, um, if it makes sense to be there and and if you could show up there and as a, as a smaller operator, the way the cannabis is in that market and and compete and it it does really seem like in Florida the name of the cannabis is in that market and and compete and it it does really seem like in florida the name of the game is a large retail presence and there is, and in many states, if you have 14 retail stores, that's a very large retail presence, but not in florida when you've got a number of groups.

AnnaRae Grabstein:

Many of those uh operators have over 50 stores, but then there's ones that are still really pushing. Green Thumb Industries announced, I think, that they're opening their I think it's 17th store in Florida this week and so they're still investing, they're still growing. They have a long way to go to be able to get to the amount of stores that Trulieve has, but I think Floridians really like mind-altering substances. I think it's a culture that has had a lot of opioid addiction in the past and also an older population, and so there has been a real openness to embracing medical cannabis in the state and also all of the tourists. So Florida could be an amazing adult use market.

Ben Larson:

Absolutely. I just I am curious as to what some of the shareholders are feeling when they see a proposed hemp bill I felt was pretty liberal, right, I know there's a lot of hemp operators like you know. It kills kind of the, the vape component um, but it allowed for up to like 50 milligrams of thc and kind of you know the the less regulated market um, and that's kind of a leaky bucket problem for this protected limited license kind of structure which I've never been a huge fan of. So I'll just put it out there. But for that bill to be vetoed, I'm wondering if they're like, oh shit, like what's the actual bill going to look like that eventually does get passed and how much of it is going to eat into to the, the revenue of, of the regulated marketplace?

AnnaRae Grabstein:

I think what you're touching on is sort of this broader question about can states that have adult use and open hemp commercialized hemp products play well together or are we going to see this like it's either one or the other? And we've talked about Minnesota a lot. Minnesota has plans to do both, but they haven't launched adult use.

AnnaRae Grabstein:

So we don't know yet. It's a really solid point. It's a solid question. We just don't have enough data to know. What I will say of what data we do have is that consumers certainly don't understand the difference small industry niche and go on LinkedIn and you see CEOs of companies kind of calling each other out or debating this question about if we should ban hemp or if we should regulate hemp or what. Whatever we should do, in the end, what actually matters is what the consumers understand and how they relate and interact with and engage in these products.

AnnaRae Grabstein:

I was talking to a friend who's a brand strategist, who lives in New Jersey and doesn't work in cannabis at all and was telling me about how she went to this really fancy wedding in Maine and that there were celebrities there and famous musicians and it was just super beautiful, well curated, lovely event, and that they had right next to their bar they had a table of of Rose Delights edibles and that they were so good and everyone was enjoying them. And I was like oh yeah, those are hemp and and she was like no, no, no, I got high from them and and I was like, yeah, yeah, yeah, I know you got high from them, Um, but those are, those are hemp.

AnnaRae Grabstein:

And she's like, no, no, I'm positive, that was THC. And I was like, yeah, yeah, that's that, that, that is THC. And I was like, yeah, yeah, that is THC, but that's hemp. And then I realized, okay, I'm not going to fight with her. She is just like so many consumers. She doesn't understand the difference between hemp and cannabis and shouldn't be expected to understand the difference between hemp and cannabis.

Ben Larson:

It's an important anecdote, because I've got another one to layer on top of it. Diana Eberlein, from the Cannabis Beverage Association, was telling me this story about TAC beverages being at the Grand Ole Opry and a consumer asking about, oh, can I have a TAC beverage? Asking about like, oh, can I, can I have a thc beverage, and the the uh guy at the cashier was, uh, basically like, oh, those aren't thc, that's hemp. And that is probably the worst scenario that we could have, because it's like you're, you're causing confusion yeah, because it's both THC and hemp.

Ben Larson:

Yes, they can exist together.

AnnaRae Grabstein:

So, yeah, we have a very particular branding issue here and I think you know, working with Pamela Epstein and Neil Wellner and you know ASTM on kind of standardizing packaging and labeling across the segments is hyper important um yeah, and I think that that is what american consumers, I guess and I'll just speak for american consumers, but, like you know, part of living in a civilized society with all of of these layers of government bureaucracy, for better or for worse like there is an ingrained cultural belief that when you buy a product at a store and you pay sales tax on it and it's in a package, that that is something that you can trust, and I think that that's really important.

AnnaRae Grabstein:

And when you talk about you know, back to the original point of like, well, what might it look like in Florida if they have a very open hemp environment and an open adult use space?

AnnaRae Grabstein:

And like, I think that, like, ultimately although we're very far away from it, but you and I would both agree that like, regulating as one plant and regulating cannabinoids is the most obvious solution. Like let's stop having to to horse trade or specify the difference between hemp and regulated cannabis when we're talking about the same compounds inside these products. We're just so far away from that and so we have to take these incremental steps. Um, that hopefully will lead us to this, you know, beautiful rainbow with the pot of gold at the end, where we have an integrated supply chain. At some point that just makes sense and is sensible. But in the meantime, I think we're just going to keep having complex supply chains to navigate through, and it's going to be the company's jobs to help consumers to understand what it is they're consuming, and we're just going to be playing in this gray space for a little bit.

Ben Larson:

Yeah, but I think what we will see and if we can transition a little bit and it'll be a short segment on just kind of talking about the Farm Bill and where things seemingly are heading After the CanRAC conference conference, it became very clear that it's like the regulators, the legislators, everyone knows now, like, what hemp is and that it's not just rope, that it's potentially dope as well, um, and they want to do something about it and so, um, you know, the miller amendment is problematic for a number of reasons for the broader hemp industry and I think there's a lot of people who are like we have to kill this amendment.

Ben Larson:

I think we need to recognize that the amendment, from a high level, is indicative of where Congress is at on this topic um, maybe not all of congress, but many of them and and what was kind of reiterated over and over again from a number of different folks is, like, don't kill, adapt, like, take it as, like like an opportunity to engage and understand, like, why they're trying to implement certain restrictions and then identify which of those restrictions are problematic and why and what an alternative is to do it that achieves a certain end goal, and that end goal is consumer safety at the end of the day, and so, as we see, revisions come out and language come out. It's about using the different pieces of the federal government and the state level governments in the ways that they're meant to be used and putting in the legislation and the hard work that needs to be done to get it done. And it is going to take years to do all this, but it has to start at some point and it has to start now.

AnnaRae Grabstein:

Well, we'll see what happens.

Ben Larson:

We will see.

AnnaRae Grabstein:

Yeah, it's going to be a long road and there's just so much when it comes to navigating Washington and politics of legislation and even just thinking about, well, what happens if the farm bill doesn't get moved forward or have substantive shifts before the November election, and and then all of a sudden we've got a whole bunch of new players, um, in the senate and in the house that's not an unlikely situation exactly and and who?

AnnaRae Grabstein:

who are those people and what is going to be their approach to looking at him? Not to mention like, if, if the white house shifts and we have a different president in in that chair, it's just there's about westmore for majority leader oh yeah, westmore for president maybe vice president, I don't actually know enough about him, but I will say that people it's okay, I'm a single issue voter yeah, sure, yeah, exactly, um westmore, you're invited to talk to us.

AnnaRae Grabstein:

We'd love to learn more about you. Um, yeah, we will see november. It's going to be here before we know it and uh and yeah all right.

Ben Larson:

Well, uh, we have about five minutes left. Um, no one again? Uh, thank everyone for supporting us over the last year and three weeks. Um, it's been an awesome show, um, an array, like we typically do, last call, like at the ends of the shows, and I'm just bringing this on to you. That's why you're looking at me like this. Uh, I'll stall a little bit more so you can keep thinking um, but, yeah, I mean, over the last year, you know, like, what have you picked up? Like, what's your biggest takeaway? What do you? What's your last call? I guess is what I'm about to ask, uh, and what do you want to leave the people with today?

AnnaRae Grabstein:

oh my gosh. Okay, I think I know what my last call will be, but before I do make my last call, uh, I want to also just call you out and thank you with tremendous gratitude for just being the behind the scenes producer of all of this to everybody that's listening, like we do not have an editor.

AnnaRae Grabstein:

Well, we have an editor, but his name is Ben Larson and he's also a CEO and has a whole team of people that rely on him, and we've just made, um, made, a lot with a little, and, uh, I could not have done it without you so thank you so much.

Ben Larson:

It's been really fun and um we're not gonna stop shout out to belinda on my team for making us look great in the digital sphere absolutely um and okay, last call, and what have I?

AnnaRae Grabstein:

and the last call focused specifically on what I've learned this last year doing this podcast, and a huge takeaway has been how far the conversations that we are having have traveled and have impacted people. And I think that the last call is just to never underestimate the impact that small actions can have on business, on people and on opportunities. We have seen that conversations that we have started on this podcast have led to policy change, have led to business partnerships, have led to friendships, new connections, and it has just been endlessly reinforcing to hear from all of our listeners about the impact that this content has made on their lives. So, yeah, just try new things, get out there and don't be afraid and be open to the the ways that that small actions can have a domino effect in the world.

Ben Larson:

I love that. I love that. Um, I'll offer my own. Uh, just cause I. Just because I was listening to this great podcast this morning, adam Grant. He was interviewing Richard Branson and they had this whole segment about how you treat people and how that is indicative of how you will be as a leader, and this one quote I pulled was how do you interact with people who can do you no good? And another way to say is like how you treat anyone is how you treat everyone, and it's a kind of a look into the soul of the person. And I think what I appreciate about you and what we both try to put out in the world is just that goodness without expectations, and that's why we've named the show High Spirits, it's why we go about the world that way we do, and I've just really enjoyed this journey so far with you and look forward to many years to come.

AnnaRae Grabstein:

Okay, we're not supposed to cry, but yeah, thanks, and for everybody, let's read it out All right, well, and thank all of you, obviously.

Ben Larson:

Yeah, seriously, it's huge. Thank you to our teams. Bertosa and Wolfmeyer, you know, let us know what you think. Who would you like to have on the show? We have many more episodes to come. Next week we have Scott O'Malley from Clarity it's a THC beverage brand based out of Minnesota and, yeah, a lot of great things to come. We're also this morning talking about the morning mixer coming up in Las Vegas. I'm just going to put it out there. It's happening. That's how we do things. We say things and then we have to do it. Anyways, until next time, folks, stay curious, stay informed and keep your spirits high. Until next time, that's the show.

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