JB & BEAR with Jay Rosenthal on WHY PSYCHEDELICS AREN'T THE NEW CANNABIS | AFTER MARKET EP 7

JB & Bear are joined by their fifth guest on AFTER MARKET - Jay Rosenthal, Co-founder of Business of Cannabis and Report on Psychedelics. In this "After Hours" segment we tap the expert to better understand how psychedelics is presenting investors with new investment opportunities in the realm of "drug discovery" and should not be confused with the investment thesis for cannabis (which we talk about too!):

0:35 - Introducing Jay Rosenthal, Co-Founder of Report on Psychedelics / Business of Cannabis
4:17 - The crossroads of cannabis and psychedelics (and why the two are very different)
8:51 - How psychedelics is similar to blockchain (?)
12:07 - Who is using the Report on Psychedelics?
15:35 - The politics of psychedelics
21:57 - Micro-dosing - real or hype?
26:23 - The modern interpretations of ancient practices
31:13 - The psychedelics wave in the public markets
35:57 - How the US federal election can impact US cannabis operators
43:45 - Legal cannabis’ struggle to meet the “perfect” customer in Ontario
47:41 - The wrap

Related links
https://www.businessofcannabis.ca/
https://reportonpsychedelics.com/briefing/welcome-to-the-report-on-psychedelics/

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Transcript

Speaker 1: 0:00

Hey, it's James here welcoming you to this presentation of the hashtag finance podcast. This is just a reminder that if you like video, all of our CEO and expert interviews are featured on the hashtag finance playlist on CCTV, including the show that you were about to listen to remember that a CSC space TV on YouTube. And finally, this is just a friendly reminder that the views information or opinions expressed during the podcast are solely those of the individuals involved and do not necessarily represent those of the Canadian securities exchange and its employees. So happy listening, and now enjoy the show. It's Thursday night and we're back with another great show. I'm joined by my regular compatriots, my man Barrington Miller. Thank you. And tonight we have a special guest. We have Jay Rosenthal. We're going to jump right into the guest segment this week of aftermarket. And, uh, we're gonna talk about a little industry called psychedelics right after.

Speaker 2: 0:56

Yeah.

Speaker 1: 1:10

I promised that we were going to get right into the interview portion this week because frankly we called up JVs. And maybe, let me take a step back Barrington, just, just to describe why we want to talk to Jay, because I often still have to answer to people in my world. Like my parents, my family, my friends, as to exactly what it is that I do at the Canadian securities exchange. And, um, you know, a lot of people know the work that we've done in cannabis. And, uh, what we'll soon learn is that a lot of people know Jay because it was working cannabis. Um, but we also want to know about the new hot industry and share this information about psychedelics and Barrington. I know that you've got a big event coming up, uh, corporately in the psychedelic space that we're going to talk about today. Uh, but we're gonna use Jay as a sounding board because he's been doing a lot of great work in the space. Um, so maybe if I can just introduce Jay, welcome to the show, thanks for joining us. And, uh, we are looking forward to having you on aftermarket. Well, I am honored to be here. I love spending time with you guys, whether it's this way or whether it's, well, someday we'll get back to the times we spend, uh, on the road at shows, but, um, that may be a ways off. We might have to get really used to this for awhile. I'm already used to it. I used to appearance it. Uh, yeah, I'm actually just, just look at my studio. Um, before this I was on with, uh, Mika you, because we don't use last names on the show for whatever reason. And we had a, we had a nice informal dinner chat with 13 other people. Nice. I said, Hey, listen, I gotta go. Cause I'm going to put it on with a J I can use drugs. Cause he's on the show. After Rosenthal, I was complaining about my disappointment with Jerry's beard because the last time I saw him, it was gone. And then I log in, I see this magnificent, I thought, I thought it was old footage

Speaker 3: 3:00

And it was lush. It's it looks great. So, um, is that,

Speaker 4: 3:09

So you had a covert beard before colored beards were cool. I did you reversed and flipped the script and you went with the clean cut, you know, I'm in a bomb shelter, look, and now you're back with the COVID beer. I am this beer though. We can talk about this all night. I love talking about a beard, but my Barbara, who I will give a plug to a JP, the barber on Saint Clarence and Blore Dale, he's an amazing barber and I've sent a number of people there and he's the best, the best it's called beside barber. Uh, but, or, and he's cautious and is not doing beards right now. So this is what it's going to look like, but perhaps longer, every time we talk

Speaker 3: 3:46

Well, that's awesome. And I like, like you said, we could probably spend the entire show talking about, uh, talking about your beer, but, um, a little bit of background, uh, Jay's been very, very friendly with the CSC and to CSE clients, as well as the cannabis industry as a whole, the last time we really, really hung out was, uh, during MJ biz, um, what seems like eons ago, but it was just a quick 10 months, uh, in the past, but you know, we're going through a change at the, at the CSC, Jay himself is going through a change and that's not just to be associated with one sector in one industry. And I guess the real, uh, crossroads out their show is the crossroads of cannabis moving into psychedelics. And I'm being really, really cautious when I say that because the two are not the same, the industries are not the same. Um, the starting points are cannabis did a lot of heavy lifting, uh, for, for psychedelics. It paved the way it got the investors comfortable with a very, very, um, high risk high reward. Um, it was a bit of a wild West it's illegal and it was federally illegal, still federally illegal in the U S um, cannabis is, but psychedelics is not legal in Canada. And with that, I think we are at the crossroads, uh, cannabis will go left and psychedelics will go right, and enter Jay Rosenthal, Jay, what is going on with psychedelics?

Speaker 4: 5:33

So I think that's a good intro because I think many people sort of put them together as like these things that are happening, sort of opening up a society as it relates to drugs, right. And cannabis had a path let's just take the Canadian path, right. It was pushed by patients. Uh, they sued, they got access to medicine. They needed that opened the, you know, open the process to be, have your grow, allocate your grow commercial growers. Um, there was a lot of steps in between, but then legalization then retail, like, you know, there was a process by which it went, I think many people are looking at on the Canadian front, like, Oh, we have patients now that are health Canada approved to actually receive psilocybin, um, as sort of end of life care or palliative care. Great. And that is a super important step. That is not, that may seem like a, there's a analogy to what happened in cannabis patients receiving their medicine. I just don't, it's, it's, it's not going to lead in my view to a legalization of psychedelics, a writ large. And I think it's also important within psychedelics to talk about what we're talking about right. There is there silicide been sort of mushrooms. There is LSD, there is MTMA, there is ketamine, like there is a series of drugs, some of which are illegal and sort of the way you described them Barrett's and some of them are in use, um, across the board or, or in some specific cases. And some are being, you know, in proper drug trials, certainly in the States. So I think there are parallels and there are very many people who like cannabis who have used psychedelics. And so there is sort of that, um, uh, sort of kinship there. But I think if you're looking at the industries overall that they will follow a similar path, I think your point that they take a different path is right on. Um, and I think the path that's that cannabis took is probably more analogous maybe to like how Al maybe alcohol sort of went through prohibition and then non prohibition. And then there was an industry that developed, not a lot of people now are using sort of alcohol for medicine, but like, I think that that's an analogy, but I also, but I think on the psychedelic side, it's much more like a drug discovery industry, right? Like, and, and, you know, you guys talked to a lot of investors and I think there are investors now in the psychedelic space that see, you know, Oh, cannabis 2.0, like, we're going to get in on this cause it's going to be high risk, high reward. But I think the more serious players or the real opportunity is not in, there's going to be a run-up of stocks. It's much more about, there are people and you're much more versed in this than I am. There are people that invest in drug discovery areas and understand the long horizon of that and understand that it is, you know, um, you know, phase one, phase, two phase three clinical trials, those take time. Um, and even when they do take time and it's proven, it's not as if the drug comes to market and everybody, you know, goes gangbusters. So that, like, this is a long process. And I think that the serious players that sort of we're talking about or looking at, or thinking about that is the game plan that they have. It is always exciting to go public. And it's always exciting when new sectors enter the sort of public financial markets, but that does not equate necessarily to, you know, a year from now or two years from now or some date, you know, looking back like October 18th of October 17, 2018, there's going to be this big market point. Like, I don't think that's going to happen. I'll make a better, I'll make a better analog to what the public markets

Speaker 1: 8:56

Response to this industry is. And it is, um, blockchain, right? Where everyone thought, boom, now's the time Paul, your money in take these things public. Um, this is going to be a tipping point, a movement at a time and place and everyone raised money and then realized, Oh my God, there's a lot of work here. And a lot of stuff to figure out. And whereas cannabis had a bit more of a defined path though. There were a lot of, um, and our regulatory thresholds that has to get through. I mean, I look at a company today as we're taping truly leave. And thank you for sharing this Barrington and a hundred million raised, um, to, to expand their operation in the U S I mean, these businesses are establishing footprint, growing scaling, and you know, where things are at with psychedelics, just like where blockchain was a lot of great proof of concepts, a lot of great theory, but still a lot of proving ground to be tried. So we all agree that these drugs can change lives. They can change our minds. It can do a lot of great stuff, but we're years away, as far as I can tell from, you know, going into a clinic and having a reliable Mescalin treatment or, or buying a psilocybin product that we know is going to have a, uh, regulated and moderated and consistent effect on my, uh, mental, mental space. So, um, yeah,

Speaker 4: 10:21

Yeah, absolutely. Especially the ones you mentioned, right. I'm not like got a controlled masculine experience would be really something, but, but, but, you know, we're, we're much closer cause we're into it with, with ketamine, for example, right there, there's a ketamine clinic in downtown.

Speaker 1: 10:34

Sorry. And that's what I meant. I apologize. Yeah.

Speaker 4: 10:37

But I, but I mean, shit, if you want to take a 12 hour jam on masculine, you should make sure you tape the whole thing. Um, that would be something, uh, but, but again, you know, but it also, you know, I've been struck that, um, you know, I've had, we've had conversations both on business cannabis side and on the report on psychedelic side, which is another media property that we run or our partners on. Um, and the idea that, um, there is, uh, there are doctors that are, that are much more open to psychedelics writ large than they ever have been to cannabis. And I think it's because what I described before is that there is going to be a proper drug discovery, um, roadmap and, and things that people follow. And that is, and we know this from cannabis, like doctors, like specific paths to use, right? They like dosage, they like effect. They like knowing exactly what's going to happen. They know that it's been tested and we know that this actually holds back medical cannabis. And that it's not, you can't say to a doctor, can't say, take this thing this many times a day and hear what we think of the results are going to be. It's just not there yet. Maybe ever because the interaction is just so, um, just so varied, especially sort of in the dry and doctors are scared to death in malpractice suits. They're scared to death of the repercussions from their college. It's an issue

Speaker 3: 12:06

I'm jumping in here because I know, I know that the amount of data and the amount of research that's been done, uh, on psilocybin and psychedelics in the United States since the 1950s is volumes it's tombs, it's, it's massive, massive amounts. Um, you know, if we want to get some real proper research, uh, we need to head to Israel. Cause that's where they, I mean, they have, they have the most, they are the leaders when it comes to research. Um, and so it's, it's actually a little curious as to the, the hesitation, um, when we have the information, when we have the information about this, uh, as well, I also want to, I want to pick Jay's brain a bit about who's coming to you, what type of, what type of companies, what type of businesses and, or people are coming to, you know, report on, on psychedelics.

Speaker 4: 13:05

Yeah. So it's, it's interesting because, um, we launched, uh, you know, Q1 2020, so not, not that long ago. Um, and almost as soon as we did, you know, the world sort of closed in on itself and it wasn't sort of out networking for sure. Right. Which we actually had a game plan that was similar to business of cannabis, where we produce, uh, insightful content. We do it on a regular basis. We marry that up with events. So we sort of build a networking component and, and use those events to create content and more connections. But, um, what we have seen and what we've done and it's, it's led, of course we're, we're sort of partners in it, but Alex Blumenstein formerly of Lee forward, um, which is a networking and sort of a accelerator,

Speaker 3: 13:45

Alex was at the dinner I was at.

Speaker 4: 13:47

Great, great. I mean, just a really thoughtful guy and it knows the sector and certainly knows cannabis too. Um, so, you know, part of what it is is, uh, it does remind me of, I mean, 2017 cannabis days where you can call it, it does seem like you could call people at the biggest quote, unquote biggest companies in the space, most respect to companies in space, and they will give you time, right? Whether it's, you know, compass or a tie or, uh, you know, uh, a field trip or, you know, any of it, right. Um, maps, like all of the people in this space, um, they will give you time because this is what they're doing now. Right. But, but again, it's not as if that cohort of companies that are some of them going public, some of them doing trials, like, like the work that's being done and others doing sort of political advocacy stuff, which, which we should absolutely talk about. Um, like it's not as if they're ramping up for mass production, like cannabis was, which it becomes really busy. Like research is not necessarily, you know, building a million square foot facility to grow mushrooms. Like, like that's just not how the industry is working. And while it is capital intensive, the capital intensive nature is to do trials, right. And do proper drug discovery and do research, which is not the same as raising capital to do infrastructure. Right? Like you look at the companies in Canada on the cannabis side, they raised capital, uh, to build facilities. The best way to raise more capital was to build more facilities. And we entered a space now where there's oversupply, right. It was just this sort of self fulfilling prophecy. That's not, I don't think the way it's going to go and in psychedelics, because again, it's a, it's a drug discovery method. And, and I actually think this what I want to sort of touch on as well as the politics of it. And, and we see in Washington DC, we see an Oregon, uh, uh, we see in some cities like Denver and Santa Cruz and Oakland, sort of the decriminalization of cyber specifically, um, or really the non-enforcement of, you know, non-existent laws. Like it's just, it's sort of a hands off approach, uh, while that is interesting and it drives conversation. I'm not sure that is related in many ways to a company that wants to do phase one phase two phase three discovery, because it's not, it's not super related. They're not really intersecting and in real ways, other than to move the ball forward on the conversation, you know, in, in society, which is always helpful. Um, but again, like, I don't think you're going to see a massive wage of decrim efforts around the country lead this country or other ones leading to like everybody being able to access, you know, mushrooms at a dispensary. Like I just, I, I think that's, it's a different kind of substance, a different kind of drug and, you know, they are, they are interesting and parallel and drive conversation, but I'm not sure, you know, that I'm not sure that has a massive impact on companies going public and what they can raise and sort of how they'll deal with investors.

Speaker 1: 16:48

Yeah. Yeah. So on a couple of points there, so one is, um, the motivation for politicians to ease regulations. So I think about the opioid crisis and mental health, um, you know, issues that are occurring in our world today and are you least sinking. Those are motivators for politicians to look at, uh, easing and encouraging this industry to grow. Um, cause when you look at what's out there now, it's not doing its job, it's not working. Um, there's a lot of sick people, uh, in North America, at least that we know of that are not accessing the right therapies for their issues. Do you think this is one of the big issues that we can, we're going to start seeing influence, uh, change? Uh, maybe, I mean,

Speaker 4: 17:36

There are not, I used to work in politics in the States on Capitol Hill and in California. Um, and God bless the people I worked for, but they are, they, politicians in general are sort of regulators, especially are so cautious. Like I don't think you will find someone saying, you know, we think mushrooms is the cure to mental illness or, you know, MDME like, I just don't think you'll see that just like they don't sort of stand up and raise the flag or wave the flag about, you know, potential cures for diabetes. Like it's just not sort of where they go in those cities that are, you know, the Denver, the Santa Cruz, the Oakland's, they have a special place in sort of left leaning hearts. And, you know, I think what you're more likely to see is that not related to psychedelics, but people saying, look, the opioid crisis is real and we need to rethink how we approach this. We see a bunch of that in Vancouver, right? And in some other sort of West coast, U S and M and Canadian cities that is about, you know, what we're doing now does not work. Therefore we need a different approach or we're going to have more and more people dying on the street that, that, that is true. Sort of the harm reduction, the safe injection site type of thing like that I think is much easier. In some ways, even though it's really difficult for elected officials to say, this is going to be something we know, because we are seeing now it's not working. Um, I think it's different on psychedelics per se. I think as more research gets done, I think you'll see, you know, real health advocates saying if this has real potential to help, you know, PTSD or treatment resistant depression, like let's, let's discover what that is and use it. Right. And, and I think you will see that, but I don't think you will see many people saying, you know, let's, you know, let's invest, let's invest public money, uh, right. Government money into research into mushrooms. I think we are a long way off from that. Maybe I'm wrong. And I think, but I think we are, it's not,

Speaker 3: 19:44

There were some reverses during cannabis though. And again, I don't want to keep going back to it, but, uh, you know, in the early days when applications started trickling in, I remember sitting there going no way, no way this is nuts. Forget it.

Speaker 4: 20:02

And I think the one thing that cannabis did have going for it is that, uh, to produce it at scale is a pretty, um, juicy economic development proposition for some communities. Right. I think we are like, and so I just don't think, I mean, there are major facilities even around sort of the GTA that produce pharmaceuticals. They're Hughes drug creators too, but that's the, we are long ways from these things being produced at scale that actually creates tons of jobs, like an economic development thing. So there's lots of, well, this is the whole point. There is lots of conversation to have, which is why we launch report on psychedelics, because we want it to inform who, I mean, first and foremost, a cannabis industry that was curious, we wanted to inform people who are thinking about putting money in sort of big dollars or small dollars into these companies. I think we really wanted to, um, draw, uh, to highlight the point that there was a drug decriminalization effort and there was a drug discovery effort, basically two broad things and, and maybe a third thing like tourism or wellness or wellness, tourism. Right. Um, those are different things and it's hard to be across all of those things because drug discovery is a real rigorous process that is well established and people don't have around like the FDA doesn't around. Um, and so like all these things are interesting from a society perspective, from a business perspective. Um, and the topic is interesting because psychedelics are interesting, you know, just in general. And I think anybody who's ever used them bad or good experience or somewhere in the middle interesting is not something you can debate.

Speaker 1: 21:53

No, you can talk, James, I'll leave it at that. Um, okay. So let me, let me, let me shift a little bit. So microdosing is, is something I'm actually fascinated by. Cause look, I love the concept of like the movie limitless, you know, where you can take a pill, expand your mind. We've always been told that, you know, we're using like a portion of our brain power. Um, and yeah, I mean, look, you know, is there, is there some formulation or elixir, um, whether it's psilocybin based or something else that helps you. And again, I'm going to go through another cannabis analog and you're like CBD where, you know, it's kind of like a background thing, but it does give you, you know, a little bit of an enhancement to your, uh, acuity or your mindset, whatever. It's a pick me up. And I I've always been attracted to that concept. Maybe I got caught up a bit in the Silicon Valley narrative around, you know, it's a bit of a life hack or a mind hack or whatever, is that all BS or do you feel like microdosing has, you know, some real validity to it? And I'm saying this from someone who has a very open mind about it. And, uh, I also don't want to be conflict with some of our clients, but I have a huge, I'm just very open minded about it. I want to know what you think.

Speaker 4: 23:12

Yeah. I look, I, I take the word for people who are much smarter than me. That's generally my, I have no choice about that. Um, cause, cause almost everybody is, but, but I, I, I like harken back to a conversation I had with, um, or we had blamed Pearson and I, my cofounder business of cannabis with Ronan levy, uh, a field trip field trip, and this was, it must have been over. I'm trying to think if I was wearing boots, I think it must have been January, um, in, um, and the way he describes both the, what happens physiologically, what happens medically, um, the impact of that microdose over time, like you and he, you know, he comes from a camp, he has a cannabis background too. So he, he speaks of it very eloquently, but, but he believes, and I, and others do too, that this has much more potential longterm. Um, as both wellness, medical, whatever you want to call it, that the microdosing does have major, major impacts and not, not necessarily only right when you take it, right. Like the impacts could be longer term. So like, I think that is probably true at the same time. Um, you know, these are as, as cannabis, like can have serious impacts, um, beneficial and otherwise. And so I, I think, you know, I don't want to be here prescribing micro doses of mushrooms that you get, um, right online right now. Like, but I also think there will be a time where you will be able to do that. You will be able to get a prescription for it under medical supervision. And I think people will find, people have been longing for that type of wellness for a long time. Um, and uh, you know, spiritual and mental health and um, all those things are super important. And one of the biggest drivers of all kinds of illness, you know, uh, uh, you know, so I think, I mean, there's hope, but I also think there's there's benefit. And I, and I believe that that unlike cannabis that's unlike cannabis, we may actually get some trials that actually prove it. Interesting. So you, you think this will be medically, uh, you don't see a world where you can go to a, um, a vendor retail store and get a microdose, uh, of mushrooms. I, not the ones we're talking about. I mean, you can do all, everything is described you can basically do now. And like, I don't think I'm like anybody can do a search Toronto psilocybin and you can get something delivered to your door tomorrow, but I wouldn't, but, but that's the way people have been doing it for, you know, 50, 60 years, um, or forever, I guess, as, as the other way. Um, so, so like, I, I, I don't see that on the horizon at the same time, like there, this is going to sound awful towards the medical profession. You could get a prescription for almost anything, right? Like that's not a secret that's how many people get, um, you know, into this sort of opioids. Right. I also want to touch on one of the things we haven't touched about, but I'd be remiss if we didn't. And that is, there is a long history, you know, generations, thousands of years using some of these substances for religious purposes. Right. Um, and, and I think, uh, there was actually several episodes of the show, billions, which I assume you guys watch or know about. That would basically just about what we're talking about, where, you know, these hedge fund guys were trying to corner, uh, trying to, um, line up a guru, basically. Who'd been doing this in the woods and Oregon or Washington, I think, um, taking people on, uh, Iowasca trips, I think it was, um, right. And like, there is something to that. And interesting, I think is that, you know, there's, um, you know, um, psychedelic assisted or psychedelic aided psychotherapy, right. Or therapy, which, you know, there is a direct parallel or similar scenario for, for gurus or shamans that walk people through, you know, this, these type of trips. Right. Um, and I think some, I think actually his field trip came up with an app, right. To get you through one of these trips. Like I th th there is, these are modern versions of ancient, um, ancient approaches to this type of medicine. Um, and, and sometimes those are the ones with the deepest insights, right. And the ones that, um, you know, people have found most effective. So like there's so much happening and so much to discuss that, which is why we started reporting psychedelics. Not that there are easy answers or a clear path, but maybe because there aren't clear answers and no clear path is what makes it most juicy.

Speaker 3: 27:56

A couple points. One, I think there is a need, I think people want and need that spiritual guidance need, or want that spiritual connection. Um, you know, bringing the woods to the big city. That's what, uh, that's what it is. And I, and I'm not taking away from either side, um, where I have a hesitation is somebody who isn't licensed prescribed, like there are clinics. And I know there are in the States where there is not one person who has any real type of experience, background degree, something that would make me feel comfortable as an insurer that's. And we haven't even touched on the insurance, the insurance side, because we know where insurance is going with the cannabis industry. Uh, you're paying a lot, lot more and you're getting a lot, lot less, and it's just shrinking and getting smaller. Um, yeah, go ahead.

Speaker 4: 29:09

I didn't do the interview, but Alex did, I think either today or it's happening this week, according to psychedelics for an interview podcast, we're doing, um, with Mark Mueller of PRL insurance. And I think the point is that Merck awesome. He is awesome. And he's obviously steeped in cannabis and often talks about with us and others that it's, you know, the industry like insurance is expensive now that's true. Insurance and cannabis is also expensive insurance and cannabis given the past sort of two year track record, especially around DNO insurance is like astronomical. He said, that's like nothing compared to now with psychedelics, which what you get, right? Like, you know, insurance it's based on risk. It's based on, you know, decades of knowledge and data and, you know, actuarials, there's basically none of that. Right. So new new industries, plus insurance do not, are not particularly, um, they don't love each other. And I think that's yeah.

Speaker 1: 30:07

And you can collateralize the cannabis businesses. A lot of the time through all this things you mentioned, you know, the farming, the, the infrastructure licenses in psychedelics a little more like you're running an expense.

Speaker 4: 30:19

Yeah. And this is why I say like, experiment and it's new and it has the word psychedelics attached to it. But even, you know, even insurance, I don't even know what it's like to insure what you're doing on a, you know, phase three clinical trial, like, or earlier phases. Right? Like what does that even look like? I honestly don't know. I assume there's a market for it, but people you're, you're basically in many cases, giving people something, you, you have a theory about how the is going to go.

Speaker 1: 30:48

It's human Guinea, pigs, and they can see you if you do something wrong to their body. For sure. I would assume they sign liability. Waivers, liability waivers. Yeah. True. He knows. Cause in college he was a regular. No, I know, because I worked in the pharmaceutical industry for months, nine months. It's not like enough, that's a whole other episode. It will save that one.

Speaker 4: 31:14

What do you, what are you, I mean, let me ask you guys questions. Like, what are you guys seeing? Cause you obviously have a number of listed companies. There's a number of listed companies on other exchanges, um, compass going public on NASDAQ. Like that's that hasn't happened, but it's going to be a big deal. Um, like what are you seeing? And maybe give ranges as opposed to actual company names, but like, you know, from, you know, companies that have sort of really thoughtful approaches to it, to ones that are like not winging it. That's not what I mean, but like, you know what,

Speaker 1: 31:49

There's a wave and some companies will catch a wave and this is not at all a negative thing. Cause we, we really support, um, people who take, you know, the, the approach that they may be really. And they're using the public markets to fund that concept very early that's. Okay. Um, and when you can cap, when you can raise capital to fairly low costs using a public market like CSC, um, yeah. That this, this industry and what these guys are trying to do, these people, um, could be a great fit and a start to something. Great. Um, you have to caution against those who are raising a lot of money. You talk about compass and raising big dollars. Um, you start getting institutions evolve. Their expectations are going to be a lot higher than a retail investor. I bought a board lot at 20 cents a share. So I guess all trying to say to your question there, Jay, is that we are seeing a lot of early stage. We're seeing a lot of, you know, we have a formulation, we have a concept, this is something we want to test. It's going to take time that we see a lot of that. And then Barrington, maybe you can describe sort of what we're seeing, um, you know, overseas with companies like trip.

Speaker 3: 32:56

Um, yeah. We're seeing companies that are operating in jurisdictions that are legal, more legal on the verge of becoming legal, um, and not only operating there, but also exploring opportunities in other international jurisdictions. Uh, having established a framework in one country and sort of exporting that framework, not the product, um, but the idea and the concept, not the product. Um, and so now it's, it's again like, like James said, the early stage is, is revenue. So now as an investor, you want one idea is that you want to invest in companies that, uh, can get to revenue or close to revenue. And if there is a company who is operating in a jurisdiction where they're able to do that, or very, very close to that's attractive, and again, they have first mover advantage because now they're not just researching, they're not just, um, phase one, phase two phase three, they're they're selling product and getting revenue. They're a business. And so that's very, very attractive. And the cost of capital to start that business is nowhere near, as intensive as other industries that are green that have those words, C letter C under mass. And they've gotten that that's attractive my money that I'm going to invest in. I'm going to take, I don't know, whatever$20,000. And I put that into a company that was just starting in cannabis versus one that's on the verge of getting revenues and psychedelics. And not as the only one, I don't know, maybe you'll see that your 20,000 could go a lot further, um, or not. I dunno, it's a Barbie where

Speaker 1: 34:54

Yeah, yeah. We're still getting, as you can tell, we're still getting a feel for it. I mean, we're not, we're not seeing as many companies as we did with cannabis. Like I said, the wave is not as big. Um, and I think that's partially because investors and this is again, that cannabis analog, we can't avoid it. I think they're starting to have learned a few things or at least responding to, uh, what they learned, um, with cannabis, uh, 1.0 and 2.0, which was, yeah, there's, there's gotta be some meat on the bones here. Like I can't go to my client and then put them into this, this deal. And then six months later, you know, they're out of cash, uh, cause they didn't fund their, their research enough or they didn't have partners coming on board or whatever, like it took longer or yeah, I think people are a little wiser

Speaker 4: 35:38

Now that about, you know, just catching like drugs market skyrocket going up. Like, no, it's not about that. And uh, so I think this is a little more intelligent, a little more methodical. Um, but still a lot of risk. I mean, we get that that's yeah. Um, now I'm interviewing you guys, like can we shift for a second? Cause I think, um, one of the things we are talking about, uh, not on the psychedelic side, but on the, although there are, there are election issues in the States that that will be effect, effect psychedelics. Um, but I think more broadly on the cannabis side, right there is, um, you know, the federal election I think will have a major impact. Um, well federal and state elections will have a major impact on what's happening in the States. And some of those companies are already crushing it and you know, our positioning to crush more, um, in the States. Um, and I guess the, like how do, how are your listed companies sort of thinking about that or gearing up for that or, or is there anything to gear up for? I actually see, I think you've mentioned truly, like I just saw right before we recorded, they acquired two companies in Pennsylvania, I think. Yeah. Yeah.

Speaker 3: 36:52

Five, five States. Yeah. Um, so with the elections, sorry James,

Speaker 4: 36:59

You do, you're the expert on this James also in, um, New Jersey you're uh, ex home state, uh, Barrington, sorry.

Speaker 3: 37:09

Yeah, I was like James Jameson

Speaker 4: 37:14

Springsteen. I don't know he isn't going to Princeton.

Speaker 3: 37:18

Um, so what, uh, we, we had a very, um, actually I thought it was a good interview, uh, with Jason Paltrow. It's from

Speaker 4: 37:29

Fully my hat. I'm just,

Speaker 3: 37:31

Yeah, I'm just fixing my sweater and you know, he was, uh, he was reflecting on the upcoming elections and you know, he commented that usually, uh, you take a look over the last four years and if you were further ahead than you were four years ago, then it was usually a good run. And if you're not, the news is usually a bad run. Uh, that doesn't seem to be the same criteria being used for this upcoming election. Um, more importantly, people just want to know, they just want to know it's less about Republican Democrat, some of the characters that are involved. Um, but they just want to know, and it's not really about November. It's more like about January and once the market, once the States, once North America wants the world has an idea just one way or the other. Cause at this point with everything gone on in 2020,

Speaker 4: 38:37

Just, just some information, that's all, that's all that people want and we'll go from there. So that was, that's his thought. I thought it was pretty good stability. So I'm not going to, you know, knowledge is power. So I'm not going to stray from that.

Speaker 1: 38:54

Yeah. For having a four year just, just knowing what you can expect or at least, you know, the guy who's going to be making the decisions for the country is always useful to know that's going to be the next four years. Um, and I think Jay, one thing you've noticed too, and I think one thing that COVID slowed down, but is now starting to prove out is that the cannabis industry was still very early days in consolidation. Um, there was a lot of, um, you know, and look, it's a chicken and egg concept right now because, because of the state, um, infrastructure in the U S and regulation, you know, how many States do you want to sew up as a national brand without the ability to move your scale across border? Right. And I think that's where people are trying to measure and carefully grow and intelligently grow without knowing as Barrington alluded to what that certainty, certainty or timeframe is for federal legalization. So, um, you know, truly will buy and other companies will, will do deals and continue to consolidate. But at some point it kind of, to me, based on our discussions with the CEO is the only kind of makes sense if they can start moving the product across borders and consolidating brands and being better integrated. That seems to be the dream

Speaker 4: 40:12

Also interesting. We do a weekly spot on business of cannabis with a partner of ours BDSA, which is a consumer insights company they're based in Boulder. But, uh, this week we did a, uh, uh, a deep dive into California and to hear what California is experiencing. And they're just further ahead on lots of things than Canada is. Um, but similar, they they're predicting pretty similar sized markets, even in 2025, like six point something, billion dollar markets, like, but what, um, they have also had some brand sort of, um, Dom, not dominance, but like there's five leading brands of edibles that have 55% of the market share. Like that's a lot, um, as well, you know, flour of course is King, but lots of retailers have their own flower because, um, you know, they can procure it, right? Like it's, it, it is when we talk about market to market and sort of federalization like if every state is going to implement a different, like we do sort of, sort of here and kinda like, it just is a different world state to state. Um, and then of course there are trends to see and, uh, every state is slightly different in sort of their uses, but like, you know, we are, it is so early days you just look at their projections, they beat us. BDSA about where we're going every year, like 25% every year. And I think we've spent a lot of time lamenting like, Oh shit, cannabis in Canada, we're getting screwed. They getting killed. Like, but even here, like 25% growth of an industry

Speaker 3: 41:44

And in Canada, it's grown, it had a 22% growth during COVID during the cold pandemic, it had a 22% growth. Yeah.

Speaker 4: 41:57

And it's made in other States and the States did too, except for Nevada, which has heavily, you know, tourism, but also they closed the stores. Like they had to figure out delivery. Like it was a, it was a, there's a Hebrew word, polygon it's it was a disaster. Well, I got a good word. Um,

Speaker 3: 42:17

That's going to make another appearance,

Speaker 4: 42:19

But the, but it's true. But like every state that has, um, uh, adult use, um, you know, huge sales coming down, like normalizing now, but, but it really was a spike cause people were sort of stockpiling just like, just like I have a 50 pound bag of rice above my head right now. Um, but like it, it's, it's one of those things people don't want to do without. Um, but, but it is like I, as you know, we talked about sort of psychedelics and what the future may hold sort of in the near and sort of a little bit more time horizon, but on cannabis, like I am really bullish on what the sector's going to look like year over year. And as long as you know, it is a tough business to be in. But I think even you see the big guys in Canada, almost retooling, like they they're taking the body blows and then retooling and figuring out what the future holds. And I think when they look at the same numbers and say, this is what the market's like, they're going to have a big chunk of that market. Even if they're taking body blows and getting killed right now, like it's going to be an interesting and probably fruitful ride for some of them. And I think we'll continue to see new brands, new products, new retailers. I think you'll see bad retailers fall by the wayside. A new retailers sort of take the spots. It's going to be a wild, but also grow.

Speaker 3: 43:39

I'm going to see this the way what we're seeing today is not the way it's looking at

Speaker 4: 43:43

Three to five. Let me give you a very personal anecdote about this. Myself. Since cannabis has been legalized in Canada, it's been over two years. I have not walked into a store, whether it's a dispensary or anything else or online and bought a cannabis product. Okay. And I am the person I'm the perfect customer for a cannabis company. I'm a perfect customer. And I haven't felt compelled whether it's because of brand or just use or use case or whatever, I just haven't done it. And there's a lot of things. I spend a few dollars on a lot of other things, not, not drug related, but clearly, but you know what I mean? So until I feel like I've gotten to that point, I feel like the industry hasn't met me in the middle yet. And that to me is just not to like personalize it too much. I'm not everybody okay. One of 35 million people in Canada, but I feel like if I'm the perfect customer and I haven't yet felt compelled to spend even five to$10 on this stuff, work is probably still yet to be done, which I think is a positive. I mean, it's about that you haven't been in, but I think it's, I think it's a positive because there's room to grow. I also think in Ontario specifically until really recently, there's basically been zero stores. I mean, for all, you know, it's like, unless you are brutal, it is, but now it's not like I live in the West end and like we have stores bursting, you know, and, and, and it does change and, and it does change the dynamic. And I see in our neighborhood is going in and it's it's everybody. And we only have one store open right now and lots of signs about coming. But like, it really is. It does change the dynamic if you see it on a regular basis, which is by the way would many of these companies were saying for a very long time, I remember Hexo put out something early days of like the industry taking a shit in 2019. It said like, we are severely impacted by the stores, not opening it Ontario. And then I think people are like, well, that sounds like a cop out. But then you look at the average daily sales of these stores. And like every store that opens has a, an industry wide impact almost right. Just the numbers of PR like the dollar amounts, just being sold.

Speaker 3: 45:56

Jay, we could spend, we could spend an entire podcast. In fact, if you want to check out some of our earlier podcasts, um, I was railing against the Ontario cannabis stores and its decision to, you know, once phase three opens to clawback, curbside and online, Dilip like, Jay, I don't, I don't want to go over there.

Speaker 4: 46:26

And, and I, and I, and I, and it deep breath, deep breath. And it's interesting. Cause this week we had a, um, a program business of cannabis. We had a networking education event online, obviously focused on Quebec. Um, which if you don't like the Ontario cannabis store, you're really gonna hate what goes on. But Quebec, a lot of cannabis, a lot of it, and they are opening stores and people doing business, there are doing like people who are selling to the government or they're doing really well because it's one buyer, one seller, one buyer, one seller, all the product we can send, they will sell it. And it's a totally different model. But I think your point is like the blended model where the government is the wholesaler and the government is the online retailer and it's just, it's not working. And it's like, it's not working for the Ontario cannabis store real well. I mean, they're making lots of money, but it's not, it's definitely not working for the retailers because they're just getting screwed both ways. They're getting screwed on the price. They pay

Speaker 3: 47:26

The person that's getting screwed as the customer. Yeah. See, that's what I meant. Yeah. Like, I'm sorry. You want to squeeze the black market open more stores. Yeah. That's what home Depot does.

Speaker 1: 47:39

Yeah. Alright. We'll get to the wrap. Okay. Jamie, we somehow we, we, we couldn't avoid the cannabis conversation. I'm sorry. No, it's okay guys. We can't avoid it. We can't avoid it. And I think it's interesting, all the things you talked about with psychedelics and how we're still trying to frame what it is, the opportunity we know it's not going anywhere, but we know that there's, um, uh, there's still a lot of proving points to, to, to play out here in the next few months and years. So, uh, anyways, I know you're not going anywhere. Jay CSE in Barrington and myself are not going anywhere. We're here to support, uh, innovation, entrepreneurship. Um, so I appreciate your thoughts and insight. I know you're one of the experts and, uh, I dunno, bear anything else you want to sign off with or say to Jay before

Speaker 3: 48:25

I want Jay, if, if I want to reach you, if I want to reach business of cannabis, if I want to reach, report on psychedelics, where do I go?

Speaker 1: 48:34

A business of cannabis.ca report on psychedelics.com. That's where everything, but we're also on Twitter and LinkedIn. You can find us, um, we have podcasts, we have video series, we have newsletters. Uh, we actually launched a business of cannabis, new newsletter. It actually launches this launch today. This morning, we brought over Jamison Berkow who is a former reporter for the global mail for canopy rivers. He's going to be writing a subscription newsletter for us, but the first four weeks starting today are free. So you go to our website, sign up and you'll get it. Um, which is a big step for us on the business of cannabis front, because we'll have a proper news editor in chief of that newsletter. And the first story was about the entourage effect of cannabis.

Speaker 3: 49:18

And is it

Speaker 1: 49:20

Really a thing? And it's a, it's a really good read. Well, okay. So in the next show, we will, we will dig into that deeper. Um, really appreciate it, Jay, uh, love what you're doing. Um, good on you to, to adapt to the new environment. And, uh, we love the content you guys are putting out. So we can't wait to have you back on the show. And, uh, again, if you're watching, please, uh, feel like this content, first of all, subscribe. Cause we keep bringing it every week. Smash that like button like button, man, I'm liking this. If you don't like Barrington or me, you definitely like J you know, like the button, um, and then go visit him. We'll put it in the show notes where to access that content to your own education, get informed. Do your homework. A lot of this is high risk. So a be smart before you invest or at least be educated and, uh, without further ado, uh, wish you a good evening. Thank you for watching aftermarket. And, uh, that's it for me. I'm James and I'm with Baron tomorrow. Have a wonderful night.

Speaker 3: 50:18

Yes,

Speaker 1: 50:21

James here reminding you that if you just enjoyed this episode of hashtag finance, there's a lot more, make sure you subscribe to this show

Speaker 5: 50:28

Available on Apple podcasts, Spotify, SoundCloud, Stitcher, and Google podcast shows coming out at least twice a week. So please do not miss out. Also, if you're on Instagram, please don't forget to follow us at Canadian exchange. That's all one word Canadian exchange. We're hosting live daily content with great guests, discussing the capital markets, entrepreneurship, investing, and much more. And finally, if you like video, please subscribe to CSC space TV, that CSC space TV on YouTube. You can find more great stuff, including exclusive series content like cannabis month, 2020, and our new series investing in psychedelics as always. Thank you for listening.