High Spirits: The Cannabis Business Podcast
Hosts Ben Larson and AnnaRae Grabstein serve up unfiltered insights, reveal their insiders' perspectives, and illuminate transformative ideas about the cannabis industry for people who want to make sense of it all.
High Spirits: The Cannabis Business Podcast
#087 - From Hedge Funds to Hash: Inside Cannabis IR with Jesse Redmond
Jesse Redmond, Head of Investor Relations and Business Development at Leaf Brands, brings his unique perspective as a former Wall Street investor and cannabis dispensary owner to discuss the challenging landscape of public cannabis companies. His insights reveal why certain companies are weathering the storm better than others and how innovative strategies like Bitcoin treasury reserves and strategic farm investments are positioning some for future growth despite industry headwinds.
• Cannabis public markets have experienced a brutal 95% decline since February 2021, creating unprecedented challenges for companies and investors
• Successful cannabis companies focus on operational excellence rather than regulation-dependent growth strategies
• Leaf Brands is developing a 187-acre cannabis farm expected to dramatically reduce production costs from $20-40/lb to approximately $10/lb
• First cannabis company to implement a Bitcoin treasury strategy to strengthen their balance sheet against dollar devaluation
• The high cost of maintaining public company status ($80-100K monthly) is driving some cannabis companies to consider going private
• State-by-state regulatory changes create complex strategic decisions, particularly around hemp/THCA cultivation versus traditional cannabis
• Personal connection to cannabis's medical benefits keeps many professionals committed despite financial challenges
• Investors should be selective rather than taking a "buy the basket" approach, focusing on companies with strong balance sheets and clear growth catalysts
If you enjoyed this episode, please drop us a review on Apple Podcasts, Spotify, or wherever you listen. Until next time, stay curious, stay informed, and keep your spirits high.
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Hey everybody, welcome to episode 87 of High Spirits. I'm Ben Larson and, as always, I'm joined today by Anna Rae Grabstein, recording Thursday May 8th 2025. We've got a great show for you today. We have Jesse Redmond on from Leaf Brands. Many of you know him for his musings on LinkedIn and X, formerly known as Twitter.
Ben Larson:But before we get there, we're going to jump into a little bit of news. We're sitting in sunny California. It's 80 degrees today here in Walnut Creek but, most importantly, governor Newsom is declaring success Mission accomplished on shutting down intoxicating hemp. Da, da da. What an idiot, oh my God. Sorry, I know I'm not supposed to say that online, but press release came out. Anyway, I don't know if you saw this. It's saying that ABC has been marching around the state shutting down intoxicating hemp and they've eliminated 99.7 percent, or something to that tune, of intoxicating hemp in its locations. And news flash intoxicating hemp's not in abc licensed stores. Well, it was in the form of beverages, but has largely been removed. Apparently they're taking some other form factors off the shelves. But what about all the smoke shops or sandwich shops or wherever else they're selling THCP gummies? Sorry, how are you doing?
AnnaRae Grabstein:I am doing fine, it's been a long week and, um, it is beautiful in California. So I'm trying to remember that as, as I deal with all of this crazy shit that's coming at me. Yeah, I just I'm a little bit over this Governor Newsom hemp whole narrative. I think that there is a path that isn't about just shutting everything down and wasting state resources and like let's actually figure out a path forward here. So, yeah, I think that the breaking news that ABC is doing all of this enforcement is fairly unimpressive.
AnnaRae Grabstein:Abc has limited jurisdiction over ABC licensed businesses as well, so it's really it's a sort of a false announcement in terms of scope. To me, it's like, if they're really trying to make a statement, make a statement that encompasses all of the different channels. But yeah, I'm also unimpressed. In the press release, they linked a table of how many visits the ABC has been making since October of 2024, which is anywhere from 200 to 1,000 per week of visits and that of those over 11,000 visits week of visits and that of those over 11,000 visits enforcement visits less about 1.2% resulted in some type of violation or issue. So it's just is this a good use of state resources? Could we be focusing on something else please?
Ben Larson:That is a startling number of resources. Though, like dealing with the Department of Cannabis Control, dc, dcc, they are severely underfunded and it's very hard for them to get a very small cannabis industry like under wraps right. And I'm seeing these numbers and, and the fact that they're counting out this, the number of products, like all these visits resulted in them collecting a little over 7 000 units. Like how much money is that per unit that they're seizing? And how else could that money be used? Like what if we had all that money in the dcc and actually like supporting an industry and making it run effectively?
AnnaRae Grabstein:like shutting down the illegal dispensaries that are unlicensed to bolster the legal marketplace in this state. That would be great.
Ben Larson:Yeah, I don't think this deserves any more of our attention, no, but it is interesting to get an understanding of how many resources ABC and these alcohol control boards do have, because one of the things that's happening across the various states, be it Texas, alabama, tennessee is this trend of putting hemp regulation under the alcohol control boards. And we've seen the challenges of spinning up cannabis regulatory agencies and how they're pretty much always cash-strapped and underfunded, largely because the tax structures of cannabis, and how challenging it is to actually generate revenue as a state through that. And and I'm not going to advocate for putting hemp or cannabis under abc's control but what I will say is like at least they have funds to clearly do enforcement, so that shouldn't be a challenge. But that does kind of like lead us into what is happening in some of the other states. We are are seeing legislation pass. It's been a very busy legislative session. We're nearing the end, thank God. It's been crazy and so, yeah, there's some movement in a few different markets.
AnnaRae Grabstein:Yeah, especially while we're talking about alcohol, I think Pennsylvania is an interesting one. Pennsylvania, in their house, passed a adult use measure that would open retail via state run stores that could be co located with Pennsylvania's existing state run alcohol stores. It's it's created some really interesting conversations that I've been having on LinkedIn, so go to my thread if you want to hear what folks have to say. But I think one of the things that's really interesting about this concept well, there's so many, but you know a lot of big public companies have been investing heavily in Pennsylvania, thinking that they'd be able to transition their business and now the state is saying, hey, actually we're going to become the retailer and you'll have one single, single customer producers to to negotiate pricing with very interesting.
Ben Larson:It's also, I know, like the co-location of alcohol and cannabis has been a very touchy subject, especially that here in california, but it seems to be persistent and I know I know it's persisting in in hemp and it's been really sensitive in conversations like alabama, where one day you're you're defending the the fact that they were trying to make hemp intoxicants a schedule one drug again, which I didn't even know you could do at a state level. Maybe you can't, maybe they were just trying again can you, you can.
AnnaRae Grabstein:It's crazy, some states are on schedules.
Ben Larson:Yeah, it's like separate schedule but anyways, the complete opposite end of that. This week something just got streamlined through both the house incentives now heading to the governor for signature and that's basically a legal framework for intoxicating hemp. Uh, it's pretty restrictive. They've eliminated direct to consumer, they've capped, I think, products at like 10 milligrams, especially beverages, and they're putting it again under the alcohol beverage control. But whoa, what a swing. It just like came out of left field. I don't know who was behind that one.
AnnaRae Grabstein:Yep Well, and then Texas. There's been some big hemp legislative shifts in Texas. Give us a quick yeah.
Ben Larson:Yeah yeah, the House basically revised their HB 28, basically be a revision of SB 3, which is what was put forth by the Lieutenant Governor and Senator Perry, and so this new bill is supposed to be a compromise. But well, it depends who you ask. Oddly enough, it's like giving a lot of lee to to hemp in the fact that it's offering beverages and gummies, it is eliminating eliminating vape and and synthetic cannabinoids but it almost feels like it's going too far. So I'm like just reading into the politics and seems like neither of these bills seem to be tenable to the other side. So I'm wondering if either one pass and then we just like end up in the status quo again for another two years, which isn't great.
Ben Larson:If there's some some hemp operators viewing this show which there probably are I think they would say that neither of the bills are tenable. So there's really like three different factions here, right, there's the ban it all, there's the free, the plant, and then there's this kind of centrist middle and I don't think any any one of those parties agrees with the other. So maybe we just get status quo in Texas for another two years. Who knows?
AnnaRae Grabstein:And I don't know if anything has changed with legislation about the existing medical marijuana framework. Have you seen anything there? I haven't, I haven't there were promises that, as hemp was going to become more restrictive, they would be opening up the medical program to be more inclusive and provide more access and opportunities yeah, I mean that's.
Ben Larson:That's what we've all thought was going to happen over the last six years, but hasn't so.
AnnaRae Grabstein:I think it's more hurry up and wait, you know.
Ben Larson:Yeah, well, we've, we've gone over time talking about like a fire hose. Let's bring on our guest.
AnnaRae Grabstein:Yeah, let's bring on our guest. Today's guest is someone who sits at the intersection of being an ex Wall Street savvy investor and California cannabis credibility from operating back in the 215 days. From operating back in the 2015 days, jesse Redman is currently the head of investor relations and business development at Leaf Brands, which is a public cannabis company focused on premium extraction, and, jesse, you might recognize him from being a notable voice on cannabis Twitter. He also is the host co-host of Higher Exchange Podcast. He's our friend. We are happy to have him here and to join us today. Thanks for coming, jesse.
Jesse Redmond:Flattering introduction. Thank you very much for having me Long-time listener, first-time guest and should start with a shout out to Hirsch Jane, because Hirsch Jane was sitting with me at Benzinga in Chicago last year. We're scrolling through our phones showing the podcasts that we listen to and Hirsch said, oh, do you listen to High Spirits? I'm like, oh, that's a new one for me. So I started listening to the show and then I met Anna at another Benzinga conference I think it was in Anaheim last fall. So shout out to Hirsch and I guess, shout out to Benzinga as well, because there is a lot of value that comes out of those things, including an opportunity to be here today Amazing.
AnnaRae Grabstein:We love Hirsch. Hirsch has been on this show twice and we only have ever had two people that have been returning guests, so it's an important distinction.
Jesse Redmond:Yeah, I kind of think about it like building a menu in cannabis, like back when I read a collective. You could put anything on the menu once with a good picture and a good description and people would buy it. But it would actually have to be really good to come back to be on the menu twice and then only a few things came back three times. And going back to the podcast thing on our podcast, higher Exchangers, I think Hirsch has been on three or four times. So yeah, fantastic guy and fantastic podcast guest as well.
Ben Larson:Hirsch, you're the cheesy gordita. Crunch of high spirits. Is that a good thing? It's my favorite taco bell menu item.
Jesse Redmond:My teen daughter just got obsessed with taco bell out of nowhere, so I'm getting more versed in that menu as well.
AnnaRae Grabstein:Gross let's uh, let's talk about what the heck investor relations is and cannabis and why does it matter?
Jesse Redmond:That's a good question and I think, depending on the company, maybe it doesn't matter as much. Obviously, a lot of your audience here today are from private companies. Most cannabis companies are private and obviously in that case having an outward-facing investor relations person may not be as important. It gets more important in the public world more investors to communicate, with, more responsibilities in terms of reporting and, I guess, maybe at times more desire to promote what you're doing. Sometimes you see promotion with the private companies, but often more times around capital raises, whereas with the public companies I tend to see more consistent efforts on the investor relations side. And so for me this is the first time doing this job.
Jesse Redmond:My life's had a lot of firsts. I started on the investment side and finished up doing hedge fund things there. I started a dispensary. I had no idea what I was doing. Honestly I I was a, you know, cannabis consumer. My dad got a lot of medical relief that got me into it. But when I started the store, you know I'd never run a store before, I'd never, honestly, you know, sold a quarter of weed before and next thing I knew I was responsible for this whole menu. So I've kind of gotten comfortable with being uncomfortable with firsts. It was a little bit easier in this case because I knew Leaf Brands when I was an analyst at Watertower Research. They were a company that I covered, so I've been creating content with them for about a year, writing research reports, interviewing the team, and got to know them all well, so that made things a lot easier for me.
Jesse Redmond:But really, to answer your question directly in terms of what we do on the investor relations side, I think the commonalities between other folks and me in this role is it's really leading communications. Like the first things that we focused on when I joined Leaf were updating the website, updating the presentation, updating our social media channels so that our messaging was strong and consistent across those. Another big element these days is what we're doing today right, which is content creation which used to be kind of a cringe term for me, but I think that's what a lot of the world is today is we're moving away from 50-page research reports and doing short-form videos and one-page overviews, and so I say content creation is a big part of my job. We've been planting this big cannabis farm, so we've been out there shooting videos, interviewing the team, making clips, doing long-form for YouTube, so getting the content out.
Jesse Redmond:There is a big part, and then the other big component, I'd say, are the investor introductions, and so over the last five or six years in cannabis, I spent a lot of time getting to know investors, the different things that I was doing. So I've been doing a lot of investor introductions for Leaf, letting people know about what we're doing at the company. I think the last thing I've been focused on, which I think most other IR people do, is the analyst side of the business, which is a whole different conversation in cannabis, because there's really only a few of them left. I used to be a cannabis analyst and obviously I left as well. But trying to get coverage, building relationships with analysts, I'd say, is the last piece of the puzzle on the IR side analysts, I'd say, is the last piece of the puzzle.
Ben Larson:on the IR side, it's super interesting to imagine how modern media social media is influencing how public companies are reporting to their audiences. That's a nuance I never thought of and luckily you have been very comfortable with hosting podcasts and doing newsletters and all that. As you cover the space and you were an analyst, you looked at public companies day in and day out. What was it about Leaf? And Leaf is a unique profile in itself, so maybe you can talk a little bit about that. It's smaller, it's focused. How did you decide yeah, this is a public company that I'm going to saddle up with when you had everything that was happening is a public company that I'm going to saddle up with. When you had everything that was happening in the public space and in cannabis.
Jesse Redmond:Yeah. So when I decided I wanted to move to the operator side, there were three companies that I was interested in working with. I don't want to say the other two. One other one is a big California company that rhymes with Rass House, and so I was passionate about California. I was interested in a company that I thought was going to change, and so I think, if we're really honest and we look across cannabis, if we look at MSOS, which is the big ETF, it's been now 1,548 days since it peaked on February 10th 2021 at $55.90 a share. I checked before the show it's $2.75. So 95% decline, 1,548 days of pain.
Jesse Redmond:And there's a lot of companies in cannabis if we're all just super honest with each other that are in trouble. Right, there's the top group, which will make it. There's the bottom group your forefronts, your state houses, your gold floras those are already in receivership. There's other ones that are headed there. Then there's a bunch of what I would call reform-dependent ones in the middle that are waiting to see what their fate is. You guys are talking about Pennsylvania, right? Trulieve 21 doors there. Jushi 17 doors there. Cresco 18 doors there. 13, 17 doors there. Cresco 18 doors there 133 MSO-owned doors in Pennsylvania. So it's really critical for big states like that to flip. Missing Florida last year was huge right that may have cost Ayer their business, because they're so levered to Florida and also Pennsylvania as well.
Jesse Redmond:And so I want to be really selective about what I did next, and I would say the shortest answer is that I joined Leaf because it represents an opportunity to invest ahead of change. So when the company put out the press release about me joining and I shared it some people were like huh, hey, man, looked at the financials, looked at the history interesting business, but curious what you found so compelling? And if you just looked historically you probably wouldn't. It wouldn't be like a GTI where you saw consistent growth and the strongest balance sheet and real, sexy metrics that would attract you to it. But instead it's a company that had been spending a lot of time and effort on things that are just about to pay off, and so the biggest one is we're planting Salisbury Canyon Ranch, which is going to become one of, if not the largest, cannabis farms in the world. We're an extraction business and so we make oils, we do bulk extracts, focused historically on California, and we've been sourcing material for like $20 to $40 a pound for extraction business, the farm gives us the ability to grow better material for closer to $10 a pound, and so you can start to do the math and see how that affects your margins. And so that's really. The biggest thing that we have going on is planting Salisbury Canyon Ranch. It's in Santa Barbara County, 1900 acre trophy ranch, gorgeous property, 187 acre cannabis permit, 100 acre hemp permits, and that's really going to help transform the extracts business from margin profile and take us from historically what's been a mid-30s type margin profile up to the 40s and then into the 50s. So that's one thing that was super exciting.
Jesse Redmond:Second one is we're entering New York, and so we're in the process of doing that right now, acquiring a tier one processing license which will allow us to do hydrocarbon, solventless and ethanol extractions. And you guys have probably talked about New York a bit, but folks that don't know off to a really slow start initially, but starting to pick up a lot about a billion dollars in revenue last year, expect about 1.5 billion this year and much healthier margins. A jar of live resin here that's 20 bucks sells for about 60 bucks out there, and so that's going to really be helpful from a revenue and from a margin perspective. So we have some other interesting things going on. We're dipping our toe in the Bitcoin pond. We have some Bitcoin on our balance sheet, looking to expand that as well. We have some proprietary advances in extraction technology that are really exciting that we'll be talking about in the future. But I'd say, to go back to your original question, I joined Leaf Brands because it presents an opportunity to invest ahead of change, and that got me really excited.
Ben Larson:Man, there's so much to dive into there. I just want to give a quick shout out to Leaf Brands. The quality of the oil you guys have produced over the years has been really top notch. As a big oil consumer in California, thank you. Yeah, we do a lot of purchasing from Leaf. But NRA Bitcoin New York, largest California farm like where do you want to go with this?
AnnaRae Grabstein:companies can go. And and, jesse, you talked about some of what you saw as pitfalls in the opportunities ahead of some companies who have made decisions that maybe haven't panned out, like Florida or what's happening in Pennsylvania, and what that could mean for all of the, all of the MSOs that are there and have made massive investments. And I think we should talk about what is required of leadership in cannabis today, especially in public companies who are having to share every quarter what is going on inside in order to actually build businesses that make sense. What are we seeing with the leaders that we believe in in the market, jesse, in particular, what are you seeing?
Jesse Redmond:So I would compare and contrast. And so on the public space. I think GTI is really the example to use in terms of having a strong balance sheet and historically a strong growth profile as well. I expect that to slow this year and expect that to slow for all of the top five, what we call the tier one MSOs. They're looking at mid single digit growth at best, and the reason for that is because Florida didn't pass and Pennsylvania we're still waiting on. So while we wait, historically new markets usually provide about a 2x revenue when they flip to adult use, but also at really nice margins for the first year or two. So, absent those flips, you don't have the revenue jump, but you also don't have that margin improvement for the new states, and so instead you just get largely price compression from the old states, and so I think that's going to make this a tougher year for most of those companies.
Jesse Redmond:But to answer your question, I think ideally right, a crystal ball would be helpful, because the most important thing to predict would have been federal or state level reform. I think that would have informed your decisions the most. And since we've been really slow on both fronts, right, we haven't gotten safe banking, we haven't gotten schedule three, we haven't gotten uplisting, we certainly haven't gotten federal legalization and at the same time, we've been slower on state rollouts. We talked about PA and Florida, but we're also waiting on Minnesota, right? I mean, that was a market we hoped to be spring of this year and now we're looking at like spring of spring of 26 for Minnesota, so kind of stalled out on a growth basis. So I think what good leadership has done is largely been more conservative. They haven't gotten over their skis and they've made timely capital raises, like GTI has done.
Jesse Redmond:Fantastic at raising capital. They raised near the peaks in 2021. They haven't had to take any toxic debt in the last couple of years. They're getting interest rates that aren't too far from normal companies, and so I think that that's the timing of the capital raises and the markets in which you choose to operate. Did you go all in on California? That probably would have been tough, unless you're one of a couple of companies. Did you have too much reform dependent exposure? So contrast GTI with AIR. Right, air raised a bunch of money, issued a ton of shares, ton of debt, really levered up, expecting these new markets to convert, and so they're big in Pennsylvania. Go ahead.
AnnaRae Grabstein:Let's double click on that a little bit. And that one of the things cannabis is highly risky. So it's not that there's some companies that aren't into risk, but I'd say that GTI is is a little more careful. They haven't made as many acquisitions. I would say that, like on the risk spectrum in cannabis, they've been a little more conservative than than some others. Um, and and you pointed them out, them out as a strong leader and at the same time, you brought up that Leaf is investing in Bitcoin and I'm curious of the spectrum of risk, how you see it, and that choice to go do something so far outside of what we've seen other companies do before and take on a risk like Bitcoin treasury. So how do you define risk?
Ben Larson:I was just going to say it really depends who you're asking how risky it is.
AnnaRae Grabstein:Yeah, I guess that's a great question. I think in this case, what I'm thinking about is things outside of the norm that have not been proved in market necessarily. So just tell us more about that, about Bitcoin and what you guys are doing.
Jesse Redmond:Yeah. So the way I would think about it, anna Rae, is that in businesses, we have the income statement, the cash flow statement, and then we have the balance sheet and, at Leaf, we have strategies to drive the income statement and cash flows. And those are things like the farm to improve margins, those are things like New York to improve revenue and improve margins. But what are you doing on that other side of your business? What are you doing on the balance sheet? And so since what?
Jesse Redmond:2020, you've seen M2, the money supply, increase by about 40%, so the value of your dollars just keeps going down. And meanwhile, you have things like Bitcoin, where that dilution just isn't possible. I think it's 19.7 million coins have been mined. I think there's 21 million in total, so don't quote me on the math I think 1.3 million left. So much more, much less of that dilution that you see typically in fiat type investments.
Jesse Redmond:And so what we're looking to do with Bitcoin specifically is to invest in an appreciating but very liquid asset and put that on our balance sheet. So, while we grow our P&L, our income statement, our cash flows and the operations of the business over here, you can grow the balance sheet through the appreciation of Bitcoin while also having something liquid and also something diversifying. So that's the idea there, and it's really based off of what you're seeing. You know, micro strategy, or strategy as we call it these days was the first one to do it. You've seen over 80 public companies adopt the Bitcoin treasury reserve, so we're the first in cannabis, but not the first, you know, across all public companies. Currently, 19 states in the US have measures to add Bitcoin to their balance sheets as well, and so it's innovative, it's new, but I would say it's not uncharted territory People out there trying to strengthen their balance sheets using Bitcoin.
AnnaRae Grabstein:Really interesting. Thanks for that.
Ben Larson:So we're talking about leadership and how certain publicly traded companies are putting some distance in between themselves and the rest, or maybe everyone's kind of leveling up at the same time realizing that, okay, we're in this for the long haul. We can't rely on some like substantive change at the federal level. So we got to, we got to run good business. Is that being rewarded on the investor side, the public company investors? Are they becoming more savvy and becoming less susceptible to just the pump and dump press release cycle that we used to? Yeah, tell us a little bit about that.
Jesse Redmond:Yeah, not even the pump and dump stuff man. But we put out game-changing things. We are starting to plant one of the largest cannabis farms in the world and we put out that press release and the stock just hardly moves and volume remains slow, and so sometimes that's a little bit depressing from an IR side. Ir is a heck of a lot more fun if there's meaningful investor interest. And we're just in a climate where there's so little interest in cannabis stocks period that, yeah, it doesn't move the needle a lot, just putting out press releases and I'm talking about putting out good, real press releases, not just hype-y type stuff.
Jesse Redmond:And the way I think about it is I think cannabis is the ultimate show-me story right now, and so my approach with the way we're handling things with Leaf is to tell them what we're going to do. So we're going to plant this farm. Show them we're out there planting this farm. Just to carry through this example, that will take about two months of growing the plants. We'll do a harvest this summer and then we'll start putting it in products this fall and we're going to plant a second harvest for the fall harvest. But the idea there is show them what we're going to do, show them the execution on it, show them the harvest.
Jesse Redmond:But then it's not really, guys, until the third quarter, until those financials come out, that you'll start that when we start to introduce that material and you start to see the margins improve. Third quarter doesn't come out till what? Sometime, you know, mid to late November, and so we're on a bit of a journey here and you just have to get comfortable with the fact that saying something and promising something in this environment isn't going to move the needle on your stock. So just say, hey, I'm going to show you what you're doing, what we're doing, we're going to document it and be a little bit patient. But when the third quarter financials come out and you start to see those improvements, then you can tie it back to all the stuff we showed you before. But absolutely great point, press releases do not move the needle in this environment.
AnnaRae Grabstein:As it relates to companies going public, we haven't seen very many cannabis companies choose that path, and it makes sense. After you just talked about what's happened over the past thousand plus days and MSOS just decreasing, decreasing, decreasing. Do you see that as something that will change and that there would be some reason why companies start to think about going public again? No, how do you think about choosing that path?
Jesse Redmond:It's a great topic. I see it going the opposite way, where I hear about companies trying to go private. You know I don't want to name the business, it's not my story to share. But you know I was just talking to the CEO of one company who's in the latter stages of taking their company private.
Jesse Redmond:That used to be public and the reasons for that is, in this environment there just isn't a heck of a lot of benefit to being public. Right, there's scrutiny, a heck of a lot more work, a heck of a lot more reporting and a heck of a lot more cost. It's about, depending on the company, something like a billion bucks a year to be a public company, $80,000, $100,000 a month, and so that's a big deal. And if there are benefits to it in terms of capital raising, quicker pass to uplisting and financing things you can do because you're public, that's why you do it, that's why you bear that expense. But in this environment there hasn't been too much benefit to that.
Jesse Redmond:So A I can't think of one. Maybe you guys can tell me. I can't think of a reverse takeover, ipo or anything cannabis public equity-wise in the last year or so, and, if anything, I see that going in the other direction. I think the catalyst for change there is kind of like the catalyst for change in most of cannabis, which is federal reform. I think if we were to get Schedule 3, if we were to get safer banking and you were to see investor interest pick up, then I think there might be more desire to be public. But in this climate I don't see a ton of benefits.
Ben Larson:Just really quick for my own naivete as a solely private operator. You talked about speed to uplisting. So if you're currently a publicly traded company and all of a sudden we do hit legalization, is there a benefit to getting uplisted sooner than, say, someone that was preparing from the private side and waiting for that moment to go public?
Jesse Redmond:Yeah, nra might even be more informed than me on this because I'm far from an expert, but I know certainly if you got to the TSX, which is the route. So most cannabis companies are listed on the CSE and dual listed on the OTC. If you're a plant touching operator in the US, you can't be at the NASDAQ or the New York Stock Exchange. Very perversely, the Canadian plant touching companies can be in the US exchanges. So it's a really strange system that we're sitting in right now, but I don't honestly know the answer. Going from CSE to the NASDAQ would be easier, but I do know that going from the TSX is easier and that's part of the reason I think that Jason and Boris made that move with KiraSend. They're all the same.
Jesse Redmond:They should merge and call it.
AnnaRae Grabstein:KiraSend, that was an announcement, folks.
Jesse Redmond:KiraSend trades in the TSX. So I think in that route it is. But talking to my friend who's going private, his thoughts are if things do improve and he wants to do an IPO, he'll just eventually do that financial company on the NASDAQ and go that route. So not a great answer to your question, but I think if you take the CSC, TSX, NASDAQ route I think that is a more expeditious path.
AnnaRae Grabstein:Yeah, you're right. It has to do with reporting requirements and just building the internal infrastructure so that you are ready to go. I mean, I think being on the CSE prepares you more than being private, because at least you're going through audits and different types of reporting already.
AnnaRae Grabstein:That would be familiar, and you are also right, jesse, that there haven't been any big cannabis IPOs in the last 18 months or so, but interestingly there has been some action around hemp and public companies on the hemp side, most notably of GTI's investment into Agrify and its pivot to becoming a hemp beverage company, and I think that there are some other examples of NASDAQ-listed companies touching and getting involved in hemp, and I find that to be pretty interesting, considering that hemp is legal as a result of the Farm bill, which is a law that has to get renewed, and that NASDAQ is somehow letting that happen, even though things could change. And then what happens? Have you been following the hemp market much?
Jesse Redmond:Yeah, all the time we talk about it on Higher Exchanges with Morgan quite a bit. They do some investments over there and we do have public companies on. We always ask the question because everybody's thinking about it. At Leaf Brands we have the hundred acre hemp permit at Salisbury Canyon Ranch. We're not using that this year. We're kind of thinking about it similar to how Glasshouse is thinking about it.
Jesse Redmond:So Glasshouse Brands has the big greenhouses in Camarillo, about 90 minutes south of where I am right now in Santa Barbara, and they've been growing historically just California-compliant rack flower out of that facility. But they have a new greenhouse which is going to be a little bit fancier, a mixed light greenhouse, and they're evaluating do they grow what Graham calls farm bill flower out of that greenhouse or are they going to grow California cannabis out of that greenhouse? And actually, interestingly, the farm bill Farm Bill compliant flower sells for quite a bit more right now. The THCA flower sells for quite a bit more right now than the California flower. So for people like us who have the 100-acre hemp permit or glasshouse with the big greenhouses you're trying to weigh, do I want to grow California cannabis or do I want to grow this THCA farm bill flower. And I think it's a really tough call right now because, like you were saying, we don't know what's going to happen with the farm bill, and you guys were talking at the top of the show about the state-level bans you're seeing out there and that a lot of the big states, especially that real strong market in the Southeast and in the South, have been starting to clamp down. So it's hard to see the future and say, hey, do I want to make this investment? Do I want to grow thousands and thousands of pounds of THCA flour when that market could vanish overnight if the farm bill were to change? And so I think that the way I see it, guys, is I think that hemp right now is living the cannabis dream. I'm so envious of what's going on in the hemp world.
Jesse Redmond:Direct-to-consumer no 280E. Usps will ship it for you. The costs are just insanely different. Our DCC licenses this year for Salisbury Canyon Ranch cost $700,000. Do you want to guess what the hemp licenses were? It's like $1,200. I'll guess $1,000. Yeah, I think it was either $900 or $9,000. I can't remember which one it was, but let's say 9,000. To be aggressive, I think it was actually 900, but let's say 9,000. I mean you're talking. What a crazy order of magnitude difference from 700,000 down to under $10,000.
Jesse Redmond:And so I think where we need to get is to this notion of one plant, one set of rules, where we have the best qualities of the legal market, which to me are the testing requirements of the age gating. But let's do, let's blend that with the open architecture of the intoxicating hemp market and give people more access. No 280E interstate commerce, so much lower from a cost perspective. But you can't just do that and let it be the Wild West, because then you get a bunch of terrible products and kids using them.
Jesse Redmond:You know, my kids are 15 and 17 and I've worked in the cannabis industry most of their adult life, but I want them to wait as long as possible to start using cannabis. The last thing I want is my 15 year old son and his skateboarder friends at the skate park sucking on a you know hhc pen or whatever it is. So I want that stuff to stay away and that's through age gating. I want clean products and that's through the testing. But let's blend that with a more open architecture. I think that would be the best, would be to put together those two worlds, but I think it's hard to figure out if you're a public cannabis company or any cannabis company don't be public. If you're a cannabis company, you look at that market. You see the revenue, you see the margins, you see the opportunity over there. But when it's so fluid from a regulations perspective it certainly is risky to make that bet right now.
Ben Larson:Amen, jesse, you have such a great voice online and it's really important for people like you to be able to get this word out there. I think this year is really the opportunity for us to be talking about the One Plant Initiative, and I'm hearing it more and more, and so, as we get through this legislative session, I think we'll have a better understanding where everyone's footing is and time to bring the voices together. You mentioned higher exchanges and Morgan and the work that you do there. You also have built quite the voice on Cannabis X, formerly Cannabis Twitter. I'm just curious what have you gotten out of this over the years, has it?
Ben Larson:been great for educating the investor community or the investee community? That's not even a word. Or do you just enjoy it? Do you just enjoy being a part of the narrative? How are you leveraging the platform that you've built?
Jesse Redmond:Yeah, it's a good question. It's something I often ask myself. So, taking a step back, I was in the investment business 20 years, ran a store for three years in California and, in 2020, decided to focus on that intersection of cannabis and investing. The thing is, nobody knew who I was in this world and I didn't know who anybody was in this world. I found Emily Paxia because she was in an interview with Montel Jordan.
AnnaRae Grabstein:Is that Montel Jordan? Yeah, yeah.
Ben Larson:Yeah the in an interview with Montel.
Jesse Redmond:Jordan. Is that Montel Jordan? Yeah, the talk, the talk. Yeah, it was Montel Jordan, yeah, yeah. So I saw Emily on an interview with Montel. I'm like she seems smart, I should reach out to her. And then I met Morgan and then I met more people.
Jesse Redmond:But the reason I got an ex and started talking more on LinkedIn was because I wanted to build a business, had a consulting business on investing in cannabis it was called Higher Calling. We focused on cannabis investing and I had a few core family office clients. But I was looking to grow that business and so I started a blog called GreenGiantsnet, which no longer exists, but wrote on that for a couple of years, and I started sharing it on social media and, honestly, I wasn't getting a lot of traction. And then I learned about Glasshouse. I met Kyle and Graham and I wrote a three-part series on Glasshouse and a few people online I think Todd Harrison shared it, Jane, though, does Jungle Java and X shared it and I went from like a few hundred to a couple thousand followers pretty quickly. And then I started writing more research about public companies. I realized that's what people want to hear. So I wrote about Cresco, I wrote about Trulieve and I kind of did this series on public companies and built up my profile that way.
Jesse Redmond:And going back to your question, it was super helpful from a career perspective because that's how Water Tower Research found me, where I became an analyst. They're like, oh, a few people have shared your work with us and we're looking for somebody to run our cannabis sector and build that out for us. And I already had a library of content. I was also doing a ton of spaces on X. I also was doing a different podcast called CEO Interviews on Seeking Alpha, and so I started over in my career when I was in my, I guess, early 40s.
Jesse Redmond:I was managing a hedge fund, put that away, started a dispensary, started over there, then started over again trying to put together the cannabis and investing side and really I mean, if I'm being, I guess, the most honest, it was kind of like out of desperation and necessity. They said I've got to let people know who I am, and so I started using the platform that way. Ultimately it's been super helpful from a career perspective. I've made a lot of great friends and so I do enjoy it. But I think you need to figure out how to make the platform work for you and not kind of get used by the platform. So I try to be conscious of how I spend my attention and I do find myself going over there and checking it out of habit. Or someone once said are you checking social media or are you microdosing attention?
Ben Larson:And I was like oh shit.
Jesse Redmond:Oh, checking social media or are you microdosing attention? And I was like, oh shit, and it still makes me cringe because I know I do it, I know I do it, I think we all do it right, like you post something, and how good did those first few likes feel right? And then this guy retweeted it? Oh boy, that stimulates a little bit of dopamine and so yeah, so I guess the answer is that it has been helpful, but I do try to be conscious in how I use it these days.
AnnaRae Grabstein:What you're talking about is a theme that I have found with the folks who are working in cannabis and have for a while now, who remain optimistic and I count all three of us in this discussion in that which is a theme about reinvention, ultimately, and it sounds like you really leaned into using the platforms as a way to reinvent yourself and a new vision for who you wanted to be out in your professional career, and I think that's really interesting, and I think, as we're getting towards the end of the episode, it would be interesting to go a little more personal in terms of what it is that's keeping you engaged and what you're finding most rewarding about working in cannabis through so much tumultuous, constant need for change and challenge.
Jesse Redmond:Yeah, I would say there's a couple of reasons. I'd say one is for me, it's personal. And so when I was a kid I was like 16, 17, my dad got in a couple of bad car accidents back to back over two or three years and by the time he was my age I turned 50 this year. My dad never worked again after he was 48 years old and instead he developed a chronic pain problem called chronic regional pain syndrome. Super long story short, went down the opiates route, for pain management was taking hundreds of milligrams of OxyContin a day and eventually found a cannabis doctor and, through a series of tinctures and using flour for immediate relief, he went from those hundreds of milligrams to zero milligrams of OxyContin and I saw his pain get better and I saw his life get better. And that's why I closed the hedge fund stuff and that's why I started the dispensary was because I saw an opportunity there to go from a really greedy career in investment management to something where I thought there was a financial opportunity, certainly, but also a way to help people, and so I think that's been helpful for me and having the dispensary just reinforced that. You guys have seen it in the business. How many people's lives have you seen just changed and improved from using cannabis. So I think that keeps me here, because I'm just definitely a believer, because I've seen it firsthand in my family and firsthand with all those patients at the dispensary. So that's number one.
Jesse Redmond:Number two is I think the destination is inevitable. I think we get to 50 states. I think we get safe banking. I think we get to schedule three. I actually think eventually we get descheduled. I think we get to the NASDAQ. I think we get to federal legalization. I think we get interstate commerce. I think all of those things happen.
Jesse Redmond:I think the problem has been that we've been pretty consistently too optimistic about the timeframe under which that will happen, and so that's what I think has made it wrong from an investment perspective. I always, often talk about there's a fine line between being early and being wrong, and we're walking it, and I don't think we're wrong necessarily the thesis. I think we're wrong about the timeframe under which it would happen, and so if I still believe that Pennsylvania flips, florida flips, like I said, we get to 40, 50 adult use states. I think we get to schedule three. I think we get to safe banking. I think all those things happen. I even think we get to the NASDAQ over time, and so I'm not here for a trade, I'm not here for a year or two, I'm here for the long term, and so I think that's what keeps me here is the belief on a personal level, and also the belief that over time, we're definitely going to get there.
Ben Larson:I love that you're used to the word inevitable. It was like a big trigger for me to get into the space as well and hang up my previous careers. This is a freight train, a slow moving freight train that is moving towards a destination, and, yeah, I really, really appreciate that perspective. I'm going to pull you back in into the investment pillar of that decision. And how much does that weigh on you as you spend year over year? Because you know, as a former hedge fund manager, like the timeline of investment, how you could be spending your time and the return on it, like do you just have this immense amount of patients because it's overweight by, like the purpose of being here, or do you believe that the ROI is going to come within the next call? You know, five to 10 years, hmm.
Jesse Redmond:Yeah, I paused because that's been hard, right, I mean, all of us, financially and otherwise, in our careers. I don't think really expected to be here right now, right, I thought there'd be a lot more opportunity, I thought I would be a lot further along, and I've had periods over the last few years where I've made less money than I did when I was 25 or 30 years old, and so I paused because, partially, you know, there's some embarrassment associated with it, some pain, some frustration associated with it, right, I mean, I know people that we all respect in the community that are, you know, sharing rooms when we go to Benzinga these days, because it's been so goddamn hard in this space, right, and so, you know, sometimes people flex the things online showing how great it is, but it's been really fucking hard, right, how great it is, but it's been really fucking hard, right, and um, and so I guess, you know, for me, I believe, I guess I just I don't know under I don't know the slope of that curve, I think you're kind of getting at like do things, you know, do all of us in this space, you know, see things. See, you know our incomes, you know, double over the next three years and we get equity and stuff and it goes up three, four, x over time. Yeah, I do hope that happens, of course, but I think, more so, going back to this inevitable nature, I think we do see a recovery and I think we do see an improvement. I think we do get there long-term, and so I hope this is the last thing I do, right, like I don't want to jump here and do IR for a coffee company, or you know, I was thinking about going and covering, like beverage and alcohol when things got so hard in cannabis, and I don't want to do that. I want to stay here and I think we will get to the destination, but I'm willing to be a little bit more patient to get there still.
Ben Larson:Yeah, you mentioned your kids earlier and I really appreciate the vulnerable response. I've thought about it in recent years as I'm building my legacy, as in the place I hold in my kid's head, like will they be proud of what I've done and like what I've invested in, and that really kind of changed the equation for me a bit. So, yeah, I really appreciate you opening up about that.
Jesse Redmond:Yeah, I think that's a great perspective too. Yeah, absolutely, you want your kids to be proud of you. I think cannabis is something to be proud of, right. I mean, my kids, like I said, are 15 and 17. And I don't, you know, take bond grips in front of them, but I do let them know what I do for a job and I do teach them responsibility around that, and so, yeah, I think that's a great point is, you know, maybe that does matter more than anything that you say, ben, you know, doing something your kids will be proud of is huge, and I think we have an opportunity to be, to be at the cutting edge of something. It's kind of cliche, but cannabis, I think, can change the world and really improve people's lives. So maybe that's another reason I stick around.
AnnaRae Grabstein:The resolute commitment from people that are really in this for the long term is something that I respect and that I feel connected to myself. I've also thought at different times like, well, maybe I should go do something like what all my friends from business school are doing. Their lives look pretty good and they're driving really nice fancy cars and buying second homes and things, but somehow we choose to walk this line because I think we are a very purpose-driven industry and the people that have chosen to stick around. We believe in many different levels of the opportunity. It's not just about the dollars and the win on the other side, but it's about something even bigger, which feels like a great way to start wrapping up this discussion. So, jesse, why don't we move to our last call? This is our time for you to give any final advice or call to action. Just a final thought for our listeners what's your last call?
Jesse Redmond:Yeah. So I guess my last thoughts are this has been a brutal period. We talked a lot about it today. I talk about it a lot in my life. I talk about it a lot on the podcast, but this has been a really hard period and I guess for me, talking about it helps. This has been the worst period investing-wise in my 25-year career. It's been worse than the dot-com era, which I was in San Francisco for around 2000. It's been worse than the credit crisis in 2008. We talked about earlier. Msos peaked 1,548 days ago at $55 a share. Now it's under $3. So that's a 95% loss, and so it's been a massively frustrating period for investors.
Jesse Redmond:So I think, if you're an operator, my last call perspective is to keep going. I really do feel confident that we're going to get there and I see all of you doing great work and it's very much appreciated. So I would say for the operators it's just be persistent, follow your instincts and just keep going. We will get through this. On the investor side, I look at it a little bit differently. I think now is the time to be more selective, and I think that creates opportunity.
Jesse Redmond:This is no longer a buy the basket market. On the investing side. Don't just go buy the five biggest companies, because those aren't the five best companies anymore. That mindset is gone. You need to be selective and I would focus on two key criteria. One is the strength of their balance sheet Make sure they don't have so much debt and interest expense that they can't get out from underneath it.
Jesse Redmond:And number two is look for companies that are going to grow, tying this back to why I joined Leaf Brands. I think we can grow as much or more than any cannabis company in the country over the next two years due to planting the farm and entering New York. And I think there's other businesses that have great opportunities as well. You know, look at I talked about Glasshouse Brands earlier. Turning on another greenhouse, they're going to continue to grow. Grown Rogue is another interesting company, you know, with roots in hard markets like Michigan and Oregon. That's going to New Jersey and Illinois. So I think there are opportunities out there. But my last remark is that now is a time to be selective, but I think that baby is getting thrown out with the bathwater in a lot of these cases. So you can find businesses that people are saying these are all terrible, these are all terrible, but they're missing the point. I just think you need to be more selective.
Ben Larson:Wow. Thank you so much, jesse. It's been a real pleasure having you on and I appreciate all aspects of this conversation we had. I'm happy to report that the Leaf stock ticker is up since this show started so you're welcome. Folks, if you're looking for it, it's Leaf with three E's. Jesse, just keep going, man. Thank you so much and appreciate the force that you are in our category. Great, I really appreciate you having me.
Jesse Redmond:Thank you so much and appreciate the force that you are in our category. Great, I really appreciate you having me. Thank you very much.
Ben Larson:All right, we'll talk to you soon. All right, everybody. Thank you so much for joining us today. We really appreciate it. Don't forget to engage, leave comments on our LinkedIn feed, like, subscribe, do all the things. Share this conversation. I see that we had a couple hundred people watching during the live recording. We do record live on linkedin every thursday, almost every thursday, and then you can find us wherever you'd like to listen to your podcast. Thank you to our teams at virtosa and wolf meyer. Can't do it without you guys and, of course, our incredible producer, eric rosetti. If you enjoyed this episode, please drop us a review on Apple Podcasts, on Spotify, wherever you listen, really does help us get seen Until next time. As always, folks stay curious, stay informed and keep your spirits high. That's the show.
