James Black (00:00):
Welcome back to the Exchange for Entrepreneurs Podcast. I'm your host, James Black, and this week we welcome yet another return guest in Todd Shapiro, CEO of Red Light Holland, symbol of T-R-I-P, or TRIP. In this week's conversation, we're actually going to talk about why maybe that stock symbol isn't quite as representative of the company as it once was, or was meant to be. For that reason, Todd came on and we talked a bit about, well, not necessarily a pivot with the company, but the things they're doing to diversify within the realm of mushrooms.
(00:29):
Now, this is a company that originally had been talking its story in the world of psychotropic or hallucinogenic truffles, specifically in the realm of microdosing. Now the company has expanded its business to the world of exotic mushrooms, and he'll explain in this podcast exactly what that means, where you can actually get these products, and what does this is all working towards, as far as his business, his vision, and his legacy are concerned. Without further ado, my conversation with Todd Shapiro, from Red Light Holland.
(00:57):
All right, thanks again for watching. This is the CSE's Exchange for Entrepreneurs Podcast. I'm your host, James Black, and today I am thrilled to be joined by Todd Shapiro, CEO of Red Light Holland. Listed on the CSE under the symbol T-R-I-P. That's TRIP. Todd, how you doing today?
Todd Shapiro (01:13):
Yeah, well thank you, James. I appreciate being here. I appreciate being on the CSE.
James Black (01:18):
Yeah, well maybe we'll talk a bit more about that, but maybe for those who aren't acquainted with you and your company, just give us the Cole's notes on what TRIP is up to and the mission you guys are on.
Todd Shapiro (01:28):
Yeah, definitely. We've been listed on the CSE for close to three years, and we started off as a company that went into the magic truffle business in the Netherlands. That is similar to a magic mushroom, which means there are psilocybin content within the truffles. We produced a product called iMicrodose, which would be available through consumer packaged goods and responsible use messaging, including tele counseling support and ability to learn with information in education, the way it's never been done in the Netherlands before. We've expanded a great deal from there.
(02:03):
People who listen to me doing these roadshow things, they'll hear that our company has expanded tremendously, since it has in the day. We're much more of a mushroom company now. We're like a big mushroom company. We own a farm in Halifax, which is called Happy Caps, where we grow lion's mane, shiitake and oyster mushrooms.
(02:23):
We've distributed them now to about 90 different retailers, including Loblaws, Supercenters, Canadian Tire stores, and we're looking for more expansion there. As well, we own a farm in New Brunswick called AEM Farms. We're the majority owner in that and us and our partners were growing shiitake mushrooms that get distributed to many different also Loblaws type of stores and restaurants and things. We're doing a lot, including building a tech device, which I should have brought here for the podcast because I have one in the next room available. But yeah, please shoot away. I don't want to get too into it right off the pitch, but things are going very well, including us being well capitalized at the moment.
James Black (03:00):
Good. Yeah, yeah, no, that's all great detail. I actually just, there's some definitions and stuff I want to go through. When you say you're growing shiitake and whatnot, are those meant to be called functional mushrooms? Is that what a functional mushroom is?
Todd Shapiro (03:12):
Yeah, it's interesting, right? It's a good question. People would say functional mushrooms may be the products you get with them, like the dried powder, the capsules, and then we like to call them just exotic mushrooms. Exotic mushrooms are all the new craze right now. In Europe, we read a statistic, and again, it's a little conjectural, but that 25% of all mushrooms sold in Europe are these exotics like the lion's manes, the shiitakes, et cetera, the reishi's, you name it.
(03:45):
When it comes to Canada, we're talking about 1% of all mushroom sales are within this big growth category. Us as a company, we thought very recent... Well, not recently, I guess within the last 18 months, 19 months, anyway, that let's focus on mushroom growth while we focus on the psilocybin mushroom growth as well.
James Black (04:05):
Right. Now, is that in part because the growth trajectory for the psilocybin business is a little more patchy than what you might be able to find with, I hate to say it again, that the exotic or functional mushrooms, where you can sell those in Canadian Tire, but psilocybin mushroom product or truffle product needs to be sold through one of your smart stores, in the Netherlands, where it's actually kind of legal. Maybe just talk us through what the challenges are on that end, but also the opportunity of the psilocybin mushrooms and where you see the path to market there.
Todd Shapiro (04:38):
Without a doubt. When we went public, I think we all assumed that more catalysts would be coming within the sector, and there's really three different types of psychedelic companies. There's the biopharma drug discovery companies, there's the therapeutic facilitator model when it comes to therapy and ketamine clinics, et cetera. Then there's a few companies, and us being we think the prominent one, when it comes to being listed and publicly traded, and doing audits and legal opinions, et cetera, that really believes in freeing the magic, believes in giving every adult the right to try. Again, it's got to be done responsibly, it's got to be done with information.
(05:19):
But our government's looking at it that way. We were very honest as me being the CEO of the company and a director about two years ago, again about the 18, 19 months ago mark, we sort of started to think of a pivot. Originally we thought maybe we could be aligned with cannabis, and then we thought, "No, we're really nothing like cannabis. Those are two very different drugs, in fact." I don't even really like to associate psilocybin as being a drug, because I consider it, and I can't make medical claims, but I can tell you anecdotally how beneficial it can be for positive change.
(05:50):
During that pivot, James, we thought to ourselves, "Let's align ourselves around with mushrooms. Let's focus on near term revenues. Let's be very protective and cautious of the cash that we were very fortunate to raise." The capital markets give you an incredible opportunity for one liquidity for investors to, if they want to make money, if they don't believe in long-term visions, that's okay, or two access to capital. We had the access to capital, but let's be careful with it. Let's really focus on our burn as we're growing a company.
(06:19):
The mushroom space was amazing for that. The reason why I say that, is because think about the homegrown kits. We can sell these, which we're proving out and we are doing quite well. I look forward to our quarterly report on the 28th of February or 27th, I believe we announced actually, before market open, because we can show growth. I've been open about this before. It's not [inaudible 00:06:43]. I've talked about growth within the homegrown kit business. But what that also allows for us to do is get consumers information to get some of their data around them consensually of course. Then, maybe one day, and it's a big maybe and a big if, James, if there was ever legal psilocybin products, could we then blast them, homegrown psilocybin mushrooms, because we've seen homegrown cannabis plants are legal for adults in the cannabis space. Would that be a path that the government's consider? It could be perhaps.
James Black (07:12):
The idea mystifies it a bit when you can actually put it in your house and plant it and grow it, water it, and then consume it and then actually have that tangible experience with the fungi. To tie it all back to the... I guess what the core of your business is wellbeing. I want to go back to why you started this company. Maybe talk first about what you see the benefits of psychedelic mushrooms, at least on the microdose scale and the problems that you're trying to address with that type of product.
Todd Shapiro (07:44):
This world is a tough place, and I think there's a lot of distrust in big pharma right now. I also believe that people still have huge beliefs in big pharma, and so they should, I mean, listen facts are, they're doing a lot of wonderful things for saving lives. But with that being said, people are being a little bit more natural in their consumption. A trend is really about these natural products.
(08:08):
Magic mushrooms, magic truffles, psilocybin, psilocin within these different substances have been shown, and again, I can't make the medical claims, but just go and do your research and look at anecdotal evidence, have been shown to really help people with post-traumatic stress disorder with coming to terms with terminal illness. Very sadly, that we look at the big fight that Therapsil is doing that we're funding right now, we're doing a matching donation campaign for $10,000 for their charter challenge with the government of Canada, for again, for this right to try for therapeutic use.
(08:44):
Yes, a lot of people are just saying really positive stories about it. I think the history for me about why I eventually left media, which I used to do in my old days, which is why I'm really good at this kind of stuff, by the way. No, you think I'd have a better backdrop. Right now actually in my kids' bedroom.
James Black (09:00):
I like it. I like it.
Todd Shapiro (09:01):
Yeah. Well, I got a virtual picture. We have a real Red Light radio studio being set up. I'm unfortunately not there today. But listen, I've talked about this openly before. I'm a very high energy guy, but I'm a very anxious guy and I think that's okay. I've used magic truffles in the day and they helped me immensely control that anxiety. They helped me with focus and living in the moment. When I used to interview people, when I worked on SiriusXM, I spoke to a lot of artist types that were all microdosing from LA, comedians, et cetera, and every single one of them said it made them enjoy their lives a lot better, which is why I got intrigued by this.
(09:38):
I'm also an open free spirit. I wanted to share this message, this anecdotal message, and then listen, raise some money. I couldn't believe we did that. We got guys like Bruce Litton on board early and even it's amazing the names that invested in our company early on to be honest. Here we are, we raised a bunch of money later, we're doing a bunch of different things later. But the core focus is we want to help people. If we can prove that out over time and if we can eventually get product to more people, not just in the Netherlands right now, we feel like we're doing our service.
(10:11):
James, this may sound silly to people, I literally want to do our best at Red Light Holland, between our board of directors, our management team, and everyone who works from the smart shops to the farms. If we can help be a part, and the shareholders, by the way, if we could be a part of leaving a legacy here to... If in 15 years this is just a thing that people are doing everywhere all the time and it's legal, I mean, Red Light's a big part of that from day one. We're quite proud.
James Black (10:38):
Right. I'm shocked you didn't read my prep questions because you're actually hitting on it. But I want to actually ask you another definition just before we move forward around dosing. Is it a challenge still to get reliable dosing at the micro doses scale? I mean, everyone knows what a three gram of mushroom looks like and because it's weighed, but when you actually have to distill it and make a microdose, how do you know have the right dosage and that percentage of a macrodose and the microdose state?
Todd Shapiro (11:10):
Yeah, it's a very good question. With Red Light Holland, the way we sell it in the Netherlands, in the raw, natural, unprocessed form, it is difficult to determine exactly the dosage. We sell with a lot of information around it. We also sell it with an app so people can track their dosage, what works best. We have a tele counselor support that can talk through what people find works for them.
(11:34):
The one thing though that we're really very proud of as well as a company, is we've now got, man, I should know this off the top of my head, but I think it's either four psilocybin import licenses from Health Canada. We have a partner in Montreal called Seacrest Laboratories. They've tested our truffles before. We're narrowing down the focus in terms of what that psilocybin content is, and the next batch which we anticipate landing, and maybe by the time this even is broadcasted, it will have landed in Montreal.
(12:02):
We were sending 3000 grams of magic truffles over to Seacrest, for them to, with their controlled substances dealer's license, have package and assembly to start putting into powder form, into microdose capsules, in order to have more of a standardized product. We're working on that right now. Then, hopefully there's an approach that we could go to Health Canada, and I don't want to allude to something that's not happening yet. I'm not that CEO that over promotes and whatever, promises the world and under delivers, but the hope of it is to maybe be a part of the special access program or the Exception 56s if we're finding the standardized dosage could work and if it would ever get approved from through package and assembly. We're excited by it to try to get our COAs and progress with the product.
James Black (12:52):
Right. You mentioned supporting Therpasil. Is a compassionate use sharp tip of the spear then, to get into the Canadian system?
Todd Shapiro (13:01):
I think when you think of individuals that are going through a hell of a lot more trauma than myself, and a lot of people I know, we feel very privileged and very blessed. As long as it doesn't come across as exploitive. We just want to help people. Yeah, so under compassionate grounds, if people can get access, it is a stepping stone. With that being said, and please, I don't want to take away anything from the plight of these individuals who are going through, people do have their own unique sort of traumas and some might not be as severe, but that's why we just believe in the right to try for all adults with this education information.
(13:41):
People might have tried SSRIs, they might have tried therapy, they might quite frankly not want to try those things, but have just had good experiences with illegal magic mushrooms that are everywhere, by the way, including shops on Queen Street and the Danforth and in different provinces all across Canada. But they actually want to give back to the system and buy it reasonably through paying taxes and buy it rationally by understanding where the product comes from and its testing, and to make sure there's no fecal matter on it, et cetera. We'd like to think that everyone, again should have access, but at the beginning of this all, James, if this helps people who need it right now, and there are a lot who believe they do, we want to support them. Of course we do.
James Black (14:22):
No, that's phenomenal. Now, let's just steer over to what you guys are selling at Happy Caps. Just to be clear, you guys have that again, functional mushroom or exotic mushrooms that people can grow at home. They can buy this product today at, I noticed, what, over 90 retailers now? Canadian Tires sell this home grow kits.
Todd Shapiro (14:39):
Yeah. It's wild.
James Black (14:39):
Yeah. Yeah.
Todd Shapiro (14:40):
We're so proud of this. When we first made our pivot into the mushroom industry, this was the first company we bought a majority stake in. To watch the progress, we found two incredible founders at Halifax, Andrew Kobayashi and Andrew Hatfield, Kobo and Hattie. They're such salt of the earth, amazing guys. When we acquired the majority stake, one of the things we promised them was support. Support in marketing, support in our outreach from our relationships. We have an incredible CMO that comes from Bacardi, Ridley Doolittle, who's incredible, who really helps with the operations of Happy Cap.
(15:14):
Yeah, to be in 22 Canadian Tires, to be in 13 super centers, to have support from production from our partners at AEM Farms now, because we were doing so much volume that we needed the support to get these homegrown kits into these types of stores and be able to handle the volume. We think it's an incredible success story, but one that we hopefully believe is just in the early stages.
James Black (15:36):
Wonderful. I want to talk about media for a second. You mentioned your background for media, for those who know you were a notable radio host and had many experiences on at least with Toronto and Satellite Radio.
Todd Shapiro (15:50):
Yes, that's correct.
James Black (15:50):
Yeah. You obviously have a good handle on that, and if it's not obvious just by talking to you, but just the branding, what I've noticed is on your investor call that I watched on your website, which was great, you have these people who identify as being part of the Red Light Army. I thought that was a very strong advocacy for your brand and your company. Can you talk to me about who's a part of the Red Light Army? What is this concept and why is it important to your company?
Todd Shapiro (16:16):
Yeah, I mean, it's easy for me to toot my own horn a little bit, but the truth is I'm not academia. I haven't run publicly traded companies before. I don't have this massive resume, but I'd like to think I've connected with people most of my life. I did it as an entertainer. I was always accessible. I would host a million parties, I'd do a million things. I was like a face and I got to know a lot of people.
(16:41):
Again, it's easy for me to say this, but I never judge people. I love all people. I'm very optimistic. I want people to come together. I believe in community. When it comes to this sector who is like, we were polarizing. Because people didn't really get it. A radio show host and a comedian as a creative director and a realtor as your chairman. By the way, don't underestimate Brad Lamb. I mean, this guy is the real deal when it comes to entrepreneurship, success, investing, et cetera, developments, buildings with his name on him, that will last for thousands of years.
(17:14):
But we came out just saying the message of the right to try and that we're the people's company. We wanted to represent people in general. I think the branding helped. We made it very friendly. There's a smile in it. There's a heart in it, but it's designed by Karim Rashid, a famous designer. We did it with these interesting colors that went against red light. It's actually pink, but we want it to be super inclusive. I think it took time, but ultimately we're a very widely held company in terms of the stock on the CSE. A lot of retail investors wouldn't say it's heavy on the institution banking side or family fund side or anything, but I think that speaks to the support that we're getting.
(17:58):
Me being as transparent as I'm allowed to be, of course I got to be super careful of all the regulations, material information and all that kind of stuff, but whenever I get an opportunity to put myself in front of shareholders, I will. Branding helps with that. By the way, brands are more valuable than a commodity any day. Anyone can make a t-shirt, but can you make a t-shirt and put Supreme on it and sell it for a hundred times what a regular t-shirt should be sold for? I used to collect Air Jordans and I did that for a reason. The brand. I'm wearing a Canada Goose hat. I mean, I like brands, and I think Red Light one day down the road beyond mushrooms and mental health, the brand recognition is super important. We'll always focus on that because there's value there.
James Black (18:38):
No, that's an interesting part about brand, because brand can outlive you, it can be your legacy, so to speak, and it can represent a lot of things that you don't get to be anymore when you're not here anymore. That is kind of my last question, or at least second last question, which is, you mentioned legacy. You mentioned what you're trying to build through this company, but how do you know when you've achieved it or at least even made progress toward that goal?
Todd Shapiro (19:01):
Yeah, listen, at the end of the day, a company's got to be a profitable company. How do you it? You have longevity. You run a real business with real profits. While you're growing a company, I think the market expects that there'll be a bit of a burn while you focus on increased revenues. I love the fact that this company has done that very well, looking at that burn rate, being very cautious with it, not overspending. Then ultimately, we would like to increase these revenues, continue brand growth, continue potential M&A opportunities to see what companies could help through accretion that revenue growth and of course that brand growth as well.
(19:41):
We're doing what we'd like to think is a proper path to success. To me, the ultimate success would be in 20 years from now for my seven-year-old boy, maybe even 14 years from now, to be working at the facility we're building in Peterborough on 100 acres there, that's going to be this massive 70,000 square foot exotic mushroom farm.
(20:04):
If my son can learn the mushroom business, also for him then and his friends, to have a lot of education around psilocybin and if they felt that it was right for them to use, they would make that choice responsibly. This is really the long game for me. I've been super blessed. I say this once in a while, if I'm going on long-winded, cut me off anytime, but it sounds so cocky, dude, it sounds so cocky. I lived a life of privilege, man. Even just being a D-list radio show host, I got to fly private jets. I got to go to two Super Bowls by Budweiser that I was like the MC at. I got to hang out at club services or clubs and what are they called?
James Black (20:39):
Yeah, yeah. I get it.
Todd Shapiro (20:39):
[inaudible 00:20:41] service.
James Black (20:42):
Yeah, I get the picture.
Todd Shapiro (20:43):
I did all that stuff. What can I do now that... This isn't about fun and access and living a life of a CEO. This is about growing a massive company to give back to people. It sounds terrible to say, but I'm going to die trying. We're just going at this carefully, but sort of aggressively now. We're looking forward to growing a company and making our best shot at success for everybody and create shareholder value.
James Black (21:08):
No, it's good. The fact that you're not at bottle service or the Budweiser Super Bowl parties is a good sign for investors. Just want to ask one last thing here then, Red Light Radio, if you're watching this, we also have people listen to it, but if you're watching it, Todd is sitting in front of the Red Light Radio fake stage, the Zoom stage.
Todd Shapiro (21:25):
Yes.
James Black (21:26):
But what is that? How are you empowering or leveraging media and that media expertise to help spread your word? I assume this is one of your big flagships.
Todd Shapiro (21:35):
Yeah, great question. I mean, I'm going to be as candid as possible. I always careful what I say because I always want to say so much in the radio days. That's what I did. I didn't think before I spoke, but when we took the company public, there was a lot of pressure. It was a very new pressure for me that I ever faced in my life. You have an opportunity, your stock goes up, your stock comes down, you're judged on daily performance based on a stock price. Often a lot of people aren't looking at what you're building behind the scenes. Truthfully, I lost a lot of confidence getting in front of the camera or in front of a microphone.
(22:08):
Over time, I've recognized that it's silly for me to judge myself on a stock price. It's silly for me to not try to get a message out, which is something I do very well. Our board of directors encouraged me and picked me up and said, "Todd, you're the face to this company. We know what you're doing. We know your intentions. Get out there. By the way, save hundreds of thousands of dollars on hiring a promotional company or a PR agency. Like leverage your own media, leverage your own connections, leverage your social media falling," which isn't massive like a Wiz Khalifa, who by the way, we've signed on a licensing agreement.
(22:42):
But it is big enough to get the message out there and I'm really looking forward to getting podcasts going and some video interviews going with people from the science and R&D field with individuals who just like to use magic mushrooms with hopefully getting to some spiritual leaders or some really cool old school mushroom farmers. We're really looking forward to get the messaging, everything mushroom out there. We're going to do that with me being a host and some of our team hosting some shows as well.
James Black (23:11):
That's awesome. Well, I look forward to tuning in and I hope to have you back on very soon, Todd, to follow up on red hot, Red Light Holland, T-R-I-P on the CSE. Thanks again for joining us. I really appreciate your time.
Todd Shapiro (23:23):
Yeah, thank you man. By the way, there's probably positions open at SiriusXM and you're way better than half their hosts, so you should be going doing that.
James Black (23:29):
Yeah, shh. Quiet.
Todd Shapiro (23:32):
Yeah. All right. No, thank you very much.
James Black (23:33):
Thanks, Todd. All the best.
Todd Shapiro (23:34):
Okay, cheers.
James Black (23:37):
Thank you again for listening to the Exchange for Entrepreneurs Podcast, a proud presentation from CNSX Market, Inc. Operator of the Canadian Securities Exchange. As a reminder, the viewpoints on this show do not reflect those of the Exchange and are solely those of the guests and do not constitute investment advice. For more information about the exchange, its services, enlisted companies, please visit www.thecse.com. Until the next show, thank you for listening and don't forget to hit the like or subscribe button on your favorite listening platform. Thank you so much.