Editors’ Note: This is the transcript version of the podcast. Please note that due to time and audio constraints, transcription may not be perfect. We encourage you to listen to the podcast, embedded below if you need any clarification. We hope you enjoy!
Verano’s portfolio encompasses 14 U.S. States, with active operations in 13, which includes 14 production facilities comprising over 1,000,000 square feet of cultivation.
This week on The Dime, we host Aaron Miles, CIO of Verano to discuss:
- Investment differences between organic and M&A license acquisition
- Building a national brand portfolio
- Balancing capital investments in markets ahead of adult use
- and so much more
About Verano:
Verano is a leading, vertically integrated, multi-state cannabis operator in the U.S., devoted to the ongoing improvement of communal wellness by providing responsible access to regulated cannabis products. With a mission to address vital health and wellness needs, Verano produces a comprehensive suite of premium, innovative cannabis products sold under its trusted portfolio of consumer brands, including Verano™, Avexia™, BITS™, Encore™, MŪV™ and Savvy™. Verano’s portfolio encompasses 14 U.S. states, with active operations in 13, including 14 production facilities comprising over 1,000,000 square feet of cultivation capacity. Verano designs, builds, and operates dispensaries under retail brands including Zen Leaf™ and MŪV™, delivering a superior cannabis shopping experience in both medical and adult use markets.
Verano Links
https://investors.verano.com/overview/default.aspx
https://www.verano.com/
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https://www.facebook.com/veranobrands
https://www.instagram.com/veranobrands/?fbclid=IwAR0EqjU0SQodGxgPuSDgyrQUh8E1OqVwmug5KX3xm7FHPuwuUdmOYl427C4
https://www.linkedin.com/in/aaron-miles/
https://twitter.com/_aaronmiles_?lang=en
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[00:00:00] Bryan Fields: What’s up guys? Welcome back to the episode of The Dime. I’m Brian Fields and with me as always as Kellen Finney. And this week we’ve got a very special guest, Aaron Miles, chief Investment Officer of Verrano. Aaron, thanks for taking the time. How you doing today?
[00:00:12] Aaron Mile s: I’m doing well. Thanks guys for having me.
[00:00:14] Really looking forward to it. Excited diving
[00:00:16] Bryan Fields: Kellen. How are you
[00:00:17] Kellan Finney: doing? I’m doing really well, really excited to talk to Aaron. Really excited to learn about Verrano and their footprint across the,
[00:00:22] Bryan Fields: the US markets, uh, specifically, uh, where Kell and I think before the red Aaron, we’ve got a little east coast, west coast battle, so I’m kind of leading into it.
[00:00:31] So your location, Aaron, please.
[00:00:34] Aaron Mile s: So we’re, uh, based in Chicago. Uh, Illinois was the first state, uh, we wanna license in. And I, you know, I’m sure you’ve heard this from other operators from the state, but you know, I think there’s a reason why Illinois is considered especi. Chicago is considered to be the mecca of cannabis.
[00:00:50] It’s, you know, it was really hard to get licensing here and then, you know, the regulations that were put in place were, were pretty stringent. So when you think about expanding your portfolio, to go from [00:01:00] say, like a California into a very strict state is a little bit of a challenge. And you know, for us, we really used Illinois, uh, as the base that we wanted to grow.
[00:01:09] And so for now we have a, a 14 state footprint. You know, we’re active in 13 states. And, uh, you know, we have a, you know, over 120 dispensaries, over a million square feet of cultivation. Uh, and so really, uh, happy with what we’ve built and looking to continue to expand. But, um, I’ll tell you from, from the get-go, I really think the biggest thing that has separated a verano from the rest of the pack has really been the mindset that we came to market with.
[00:01:34] It started with George Arcos, our CEO o and our founder. He had an operator mindset. So when you think about winning a license, like you know, that was the challenge for most people. But then really figuring out how to run the business was the biggest challenge. Like, how do I deal with a contractor? How do I deal with vendors?
[00:01:50] How do I negotiate contracts and. George had that all down pat. So the biggest challenge for us was getting the license and then it was just off to the races. So, uh, he knew he could make money in this [00:02:00] space and, and, you know, he’s been very, um, very careful with the way that we’ve grown in a, in a highly and rapidly, uh, evolving industry.
[00:02:08] And so I think the, the, the efficient and methodical way that we’ve gotten to the point that we’re at right now really shows up in, you know, the capital that we’ve raised, the lack of sale lease facts, and really the margin profile that we’ve been able to put. So let,
[00:02:21] Bryan Fields: let’s, let’s dive deeper into those statistics.
[00:02:22] Cause I, I really think like it’s hard for people to understand how challenging of an environment that is to operate in. So Ronaldo’s portfolio encompasses 14 US states, 13 active operations, 14 production facilities comprises over a million square feet of cultivation. Just like on a macro land point, how many different companies is that realistically running from a state by state, Boeing, because every state operates completely differently and you’ve got different challenges.
[00:02:44] So how complex is that to oversee an operation of that m.
[00:02:47] Aaron Mile s: It’s, it’s, uh, as complex as it can get. And you know, a lot of times people will try to liken us to the, the alcohol and the beverage industry. And it’s, it’s not an apples to apples because, you know, they’ll have regional distribution, you know, hubs and [00:03:00] everything else.
[00:03:00] Everything we operate in, in a business has to be produced in that state. So now here you are, you’re trying to build a national brand. You’re trying to build product that is consistent across this footprint. And oh, by the way, you have to do it on a state by state basis. And so for. Our million square feet, you know, 14 cultivation facilities.
[00:03:18] All of them look and feel a lot, uh, very similar the way that, you know, the, the, the operations flow and, and to get to the final output. And so, you know, for us the challenges are, are unprecedented, but, , you know, now let’s go back to my initial comments of, of really when you start in a state like Illinois and you’re building that framework and that blueprint for how you wanna build a vertical integration in the state, you can now take that blue blueprint and start to layer it on state by state.
[00:03:43] Now, where the challenges come in is it’s, you know, there’s certain restrictions, you know, where you can only have so many dispensaries and so much cultivation in each state. And you know, the regulation in each state is different. It’s indications. What would qualify for a medical program? What products are allowed?
[00:03:57] Some, you know, like, you know, uh, companies or some [00:04:00] states don’t allow for chocolate. Some do, some allow for a gummies, some don’t. In, in how you, you know, there’s zero marketing and advertising in each of these states. So, you know, I think that’s the challenge is how do you cons. Build a consistent brand when you can’t actually have the same product portfolio in every state.
[00:04:15] Now, on the inverse of that, it also creates a lot of opportunity for us because we can solicit a lot of feedback on a state by state basis. What’s working in Maryland we can potentially implement in an in an Illinois versus, you know, what, you know, what you’re gonna implement in other states. So for us, very proud of the 13 active.
[00:04:32] Now the focus is on a limited license, vertically integrated, uh, perspective. We do not, you know, uh, acquire assets just to, you know, beef up the map slide to show you know, how many, how big our footprint actually is. We are all about profitability in making sure that we’re driving the high highest margin profile we can.
[00:04:50] And how you do that is you have to be a very efficient operator. We started with the mindset of a very premium, high quality product. and then as [00:05:00] the market tastes have have, you know, transitioned and be, and evolved and become more complex, we’ve been able to evolve our product portfolio as well. So, I mean, it is probably a level 10 out of 10, uh, complex challenge.
[00:05:13] But, um, I think when you look at the results that we’ve been able to put up, I think, you know, you, you can see that we’re meeting those challenges head on. Is there a
[00:05:20] Kellan Finney: certain space that you guys chose to expand just based on strict regulatory framework that they had in place?
[00:05:27] Aaron Mile s: Yeah. Every state that we operate in, we have the appropriate footprint that we need at this current time.
[00:05:32] Right. And if you look at um, you know, Illinois, you know, I could go, you know, state by state, by state, but you know, you look at, in Illinois, you know, we built out ahead of the January 1 2020 adult use turn on. And then as the 185 dispensaries are potentially coming online and you could see like this is the biggest challenge.
[00:05:50] I’m sorry. Let’s go back to the biggest challenge. It’s not about creating a national brand and a footprint. It’s dealing with regulators. Because when you look at a state like Illinois, they issued the [00:06:00] 185 dispensary licenses. How long ago? Well, those are 185 million doors that we can sell into.
[00:06:04] But what you don’t want to do as an operator, Is build out your cultivation facility, bring all this supply into market, waiting for these 185 doors to open because you’re going to flood the market and the pricing’s going to come down. So for us, the challenge is trying to figure out when that growth is going to happen.
[00:06:20] So as of right now, the 14 cultivation facilities, the mil million square feet, Allow us to be a leader in every state that we operate in. And I’m not saying we’re the number one slot, but we have the ability to put the appropriate supply ahead of the growth potential in those markets. Now, states like Florida, uh, you know, at 22 million people, a hundred plus million, you know, uh, tourists a year.
[00:06:41] There’s a massive opportunity there if adult use turns on. So we have a 220,000 square foot cultivation facility by Tampa. We have another 42,000 square foot facility by Jacksonville, and we can expand that by hundreds of thousands of feet. Well, you don’t want to do that until you really have a good idea of what that growth’s gonna look like.
[00:06:58] So we were investing in Florida, [00:07:00] we’re gonna. Continue down the, you know, opening of dispensary, um, you know, path there, because Florida operates a little different. You know, it’s, it’s, it’s, it, you can’t wholesale in that market. So what you grow, you have to sell in your dispensaries. You have to make sure that you’re gonna have the appropriate amount of, uh, supply to go into those markets.
[00:07:14] So I think we’re good in Florida, but you know, if adult use starts to pick up some steam. We’re gonna invest in that market. PA was another market that we were investing in. We have a 62,000 square foot cultivation facility, 15 dispensaries that are currently open. We can open up three more, and we were building out a second cultivation facility ahead of an anticipated adult use turn on.
[00:07:35] Well that slowed. Although Shapiro, uh, from a governor perspective, Federman gets, you know, into the Senate, they’re very pro cannabis. You might see some momentum pickup around adult use, turning on, you know, again, if that happens, then we have the ability to self-fund a lot of the CapEx. That we’ve been, that we’ve been building out.
[00:07:52] And so what we want people to understand when we look at cash flow, you know, people are gonna wanna run for us to run that at least initially, [00:08:00] initially as, as close to zero as we can. Cause they, those are dollars that are being invested back in our capacity abilities. So PAs a market that we’re focused on, but we’ve pulled back on Florida’s a market that, you know, we’re focused on, but we pull back on it.
[00:08:11] And if adult use really starts to pick up steam there. Then we’ll, we’ll, you know, reinvest in those states and then you look at the, the east coast, right? I know you’re talking about, you know, east Coast versus West Coast. Uh, you know, we’re probably more, more biased towards the East coast, just given the ability there and, and the limited license nature of, of the, of the, of the states.
[00:08:29] But, you know, Maryland approved, uh, adult use and it’s gonna turn on, they say July, could be September, but you know, we’re built out there. We have, you know, the max four dispensaries allowed and, you know, a 40,000 plus square foot facility that, you know, we’ve completely built out to the Verano standard.
[00:08:44] Um, Connecticut just turned on. So we’ve invested in that. We have a 217,000 square foot, uh, uh, facility there, um, with a, you know, a bulk majority of that built out. And then, you know, Massachusetts and Ohio and some different areas that we are, we have a footprint in. Again, [00:09:00] we’re happy with the, with the capacity we can bring online.
[00:09:03] But once we see adult use pickup in some of these markets, then we’ll, we’ll continue to ship those dollars into those markets. But right now we’re very happy with our footprint. And again, that shows up in, in, in what we’ve really been able to show from a financial, uh, metrics perspective. So given all those
[00:09:18] Bryan Fields: variables and most of those being complete unknowns of this current day, is a lot of what your team does from a high level standpoint, scenario planning and understanding that if this event occurs here, we’re gonna need to invest x, Y, but we’re also gonna need not personal available for, for this situation because it’s really complex decision making on, its on a, on a granular level, understanding that there’s all these unknown variables and your team needs to be a decisive quick with resources, but also have the available capital A at the time needs to invest in these markets ahead of turning.
[00:09:45] Yeah,
[00:09:45] Aaron Mile s: it’s, it’s, um, it’s, it’s something that I think we pride ourselves in. I think we’re kind of an industry leader in the ability to identify the growth opportunity in investing ahead of that. And so when you think about these investments, we’re talking dollars, right? 2021. We invested [00:10:00] 141 million in CapEx.
[00:10:01] Produce 40 million of free cash flow that year. This year we’re on on pace and we, we guided to this on our Q3 call, um, of investing 20 million q4, which would put us at 130 million CapEx for the year. That’s 270 million, right? Our maintenance CapEx, which is just, if we did no expansions. Is around 10 million, so you can actually see the amount that we’re investing back in our capacity expansion.
[00:10:24] Next year it’s gonna be 25 to 50 million. So we’re pulling back because of some of these dynamics. Now, where the biggest, uh, challenge comes in is you can’t just turn on a cultivation facility, right? It’s, it’s not like, you know, a dispensary. You know, you can, you know, throw some paint on the walls and unlock the doors and, you know, throw some product on the shelves and you’re, you’re making revenue the next day.
[00:10:44] When it comes to a cultivation facility, you have to build out. Costs are skyrocketing. It used to be two, $300 per square foot, and now you’re looking at four or five, $600 per square foot in certain markets. And it takes months, right? So you have to do the expansion build out, and then when you actually get your [00:11:00] plants into the building, the first grow isn’t as good as the second, isn’t as good as the third.
[00:11:04] So you have to get that repetition to really get that product quality up to where you want to be at. So if you’re like, okay, Pennsylvania turned on yesterday and now let me focus my on my expansion, you’re probably a year behind the game. And there truly is a first maneuver advantage in these states.
[00:11:18] And so, you know, for us it’s, it’s, you know, it’s about bringing capacity online, but it’s also about transitioning your, your product portfolio as well. Like there’s recessionary pressures out there. We always had, uh, an idea of rolling out a, a value in a mid-tier brand. and we accelerated that given some of the supply chain dis, you know, disruptions and some of the, the pricing dynamics in the market.
[00:11:38] So now we’re able to compete at an even higher level, because now we have the full breadth of the, of the, you know, flower product quality. So it’s about capacity coming online, but it’s also about how you transition your portfolio as well. How do you guys prevent from
[00:11:51] Kellan Finney: being reactionary, right? Like we’re talking about Maryland just came online, Pennsylvania’s about to come online.
[00:11:56] Florida might come online, right? So if Florida, [00:12:00] there’s a bill that comes out that might be, uh, legalized adult use, same in Pennsylvania. Do you guys like respond to that directly or are there other variables that you guys are weighing, making the decision to invest resources to capture the Pennsylvania adult market versus the Florida market instead of being so reaction?
[00:12:17] Aaron Mile s: Yeah, so first of all, you, you have to make sure that you’re stabilizing your medical market cuz that’s what we were built off of from day one. And we wanna make sure that our medical patients always feel, uh, that as the top priority. And that’s what we use as a base. Cuz medical patients are very consistent and they’re very loyal, especially when you put up.
[00:12:33] You know, the, the, the product quality and consistency that we do in our product portfolio. But when you look at a, a state like Florida, you have to work with regulators. So you have to build those relationships. You have to have an idea of movements, right? Like we’re not just reading a headline. This is not when you’re insinuating, but we’re not just reading a headline one day and saying, oh, wait.
[00:12:49] Oh shit. Uh, Florida turned on yesterday. Now we gotta like, you know, ramp up our cultivation facility, you know, he’s like, Aaron, did you see this? ? Yeah, . Yeah. Yeah. I
[00:12:59] Kellan Finney: probably wouldn’t be [00:13:00] employed
[00:13:00] Aaron Mile s: if I missed that one, but, you know, we, uh, but I would say this, like when you look at it, you know, it’s, it’s building a regulatory, uh, relationships and having an idea of movement, right?
[00:13:08] And, and, and you know, markets definitely like to pat themselves on the back because once they start to go down the cannabis legalization route, , uh, there is definitely a play of tax revenue and, and new job creation and stuff like that. So you have a general idea, right? So you look at a state like Maryland, like we’re already fully built out in that state, and especially for the capacity that we wanna bring online, but we have time on July.
[00:13:28] September, that’s a long time for us. And so having that insight and hearing from the state of Maryland that they’ve approved adult use and now they’re gonna turn it on in this general timeframe. Then we would start to invest in that market to expand our capacity. But it’s all about the relationships and it’s all about having an idea of, of what that opportunity looks like.
[00:13:47] Um, and then a big thing that, you know, that we like to point out is, is, I, I can’t emphasize this enough, how, you know, salary’s facts were the lifeblood for a lot of operators in the space. It was quick money. You [00:14:00] could go, you, you would sell off your facility for 50 million bucks, you’d get 25 million of tenant improvement allowance, 25 million of cash.
[00:14:07] You have to invest those dollars, right? Like you have to justify that sale lease pack. So I think that’s what put a lot of the oversupply into the market where it’s like you, you, you had to justify going down that path of a sale lease pack. We’ve never gone down that route. So being self-sustaining and being able to leverage cash flow to build out your, your product portfolio.
[00:14:25] I can’t emphasize enough how important that was for a company like Varano. So every dollar we invest in, in expansion of our cultivation facilities is a dollar that, you know, we want to put back into that market. So we’re really careful to put too much supply into that market. So I would say this, it’s, it’s working with regulators.
[00:14:40] It’s having an idea of what the moves are gonna look like. And right now, um, I would say we’ve done a really good job through, you know, James Laus is, is, you know, um, you know, one of the, one of the best in the space, you know, government affairs and compliance. You know, there’s no one that’s tied into the space better than him.
[00:14:56] And we leverage our resources internally to get an idea of what those [00:15:00] movements look like externally. So,
[00:15:02] Bryan Fields: from a growth perspective, do you think investors sometimes struggle to understand the, the critical differences between, let’s say an organic growth win in a certain state versus an m and a, and how the differences between those markets are from an investment standpoint and understanding kind of the growth aspect, like what it costs to get in, and also what the upside could be.
[00:15:19] Aaron Mile s: Uh, New Jersey was an organic win for us, right? A couple million bucks to win a license, and you can do the math on it. We have 120,000 square foot facility in Burg, double, triple stacked in certain areas. We have the most skews in the market. You know, we have three dispensaries in the central region.
[00:15:34] We’re on the border. Of, um, you know, Pennsylvania with our Lawrence Zen Leaf, Florence facility. We’re in Neptune, uh, which is by the Jersey Shore. We have a very secure location there, and we’re in, we’re in Elizabeth, which is like, you can spit on a Lincoln Tunnel from there. So now you have an organic win, cost us $2 million, and then plus the cost to build out the facilities and now do the, the general assumptions of what those assets are producing.
[00:15:56] Right now you go in and you inquire those three assets in the [00:16:00] cultivation facility. Now you’re talking, you know, a hundred plus million. Maybe a little bit different now, just given some of the market pricing has come down, uh, you know, given some of the dynamics in the market. But you know, you have to justify not only a acquisition cost and then the cost of a buildout versus going down the licensing realm.
[00:16:17] So organic is obviously the sole focus because not only. organically is a, is a, is a lower cost of entry into a market, but then we can dictate how those assets are built out. A lot of times, you know, you’re gonna come in and you’re gonna buy an operator and then you’re gonna try to, you know, put the verano touch on it.
[00:16:34] Uh, very few times you come in and it’s, it’s turnkey. I would say the ultimate transaction for us, which. Gave us the move dispensary line down in Florida. And plus the cultivation facilities I talked about is probably as close to a verano level cultivation facility and dispensary that we’ve gotten to.
[00:16:50] So, you know, when you go down the acquisition route, it’s costly, and then it takes time. And then, you know, you think about, um, the cost of the, the acquisition and the cost of the [00:17:00] buildout. Um, it could be costly to get into certain markets and you, and it could take years to really start to see those acquisitions become accretive.
[00:17:06] So organic is, is a slam dunk all day. Yeah, and
[00:17:10] Bryan Fields: I think a lot of investors sometimes miss the differences on how critical those wins are, right? They recognize that you’re in that state, but understanding how you got in that state and the, the type of win that was, I think, is a critical difference that I think sometimes I, I wish investors just paid more attention to those specific details.
[00:17:23] So, yeah.
[00:17:25] Aaron Mile s: But I was gonna say too, just to add on, I mean, it, cause it, it’s, you know, cash is tight, equity valuations have come down and so, you know, how much do you really want to dilute your stock? To get into certain markets and how much cash do you wanna spend? When in reality what we should all be doing is focus on balance sheet strength, which, you know, we have the luxury of doing cause we already have the capacities built out.
[00:17:46] We want looking at trying to really generate as much cash flow as you can and, and hoarding cash, especially in times of distress and. . So now you’re an operator that needs to build out your footprint. Well, you know, you can’t just say, I’ll, you know, I’ll pay you [00:18:00] in five years and you know, you need cash up front or you need to issue some equity.
[00:18:03] And, and again, it can be very costly, especially in times where your stock’s gonna be extremely diluted at these valuation levels.
[00:18:10] Bryan Fields: As we continue in these, uh, really challenging capital markets, does your team put any emphasis on thinking that there could be a future opportunity where a lot of distress assets can, could come online?
[00:18:20] Aaron Mile s: Absolutely. I mean, we are always looking at how we want to expand our footprint and you have to build those relationships. You have to continue those conversations. Um, and it’s. Nothing that we wanna do in the near term, but if the right opportunity presented itself and it made sense for our portfolio and it fit the Murano mold of what we’re trying to accomplish, and it could be accretive to the business, you know, we’ll evaluate that.
[00:18:41] But we have the luxury of being extremely patient, right? I mean, there’s operators again. I mean, when Safe did not pass, that was a, you know, a, you know, disappointment across the board. I mean, I, I would’ve loved to have seen the headline that Safe Passed. But for us, what changed when Safe didn’t pass?
[00:18:57] Absolutely nothing because we don’t [00:19:00] operate the business based off of assumptions of regulatory moves. There’s operators that were like, like we need safe to pass. Because if safe doesn’t pass, the lights are going to turn off here very quickly. And. You know, so that’s the sad reality of the business is that, you know, safe has always been characterized as catering to the take tier ones, giving us access to capital and, you know, uplifting and there’s going to be, uh, just a domination in the market.
[00:19:22] Well, market to market. There’s certain limitations that we have to operate under. So it’s not like we can come in and, own the entire state of Illinois because there’s. Restrictions on how many assets we can own. So what safe does is it actually levels the playing field. It allows a smaller operators to become much more relevant, and then it allows us to partner with them much more, uh, uh, I guess efficiently.
[00:19:42] So for us it’s the tide that raises all ships concept. And I think safe, not passing, uh, was definitely a detriment to, to some of the smaller operators. And so we’re gonna continue to evaluate. We’re in no hurry to do anything because you know, we have the luxury of kind of sitting back. Operating the 13 active [00:20:00] states that we have right now and, and evaluating, you know, opportunities within those states as well as opportunities outside.
[00:20:06] Um, but I would say every company’s gonna have a very similar response, especially the tier ones where you have to evaluate every opportunity. But, you know, we have the luxury of kind of sitting back and kind of waiting to see how that plays out.
[00:20:17] Bryan Fields: Are there other, uh, obstacles in DC that might be more advantageous than safe banking?
[00:20:22] For example, if they change Two 80 e
[00:20:25] Aaron Mile s: 280E uh, I think is the biggest opportunity for the space because I, I don’t think people truly understand what paying taxes off the gross profit line looks like for the business. Right? I mean, 280E it, it’s s amazing to me when there’s all these anti-money laundering concerns and you know, we got to be careful because it’s cannabis, but you’re going to overtax us and you’re going to take those same dollars that you’re concerned about.
[00:20:49] So it’s kind of really talking out of both sides of your mouth. So the concerns out of DC they’re abundant. And I think the biggest concern that I would have is that people truly just don’t understand cannabis as a whole, right? Like [00:21:00] you look at the farm bill that passed, CBD becomes legal and then Delta-8 becomes, you know, massive in the market and people don’t understand what the chemical process is to get to Delta-8 So people are like, oh we, you know, we got to avoid cannabis because it’s extremely, uh, you know, challenging of a, of a, of a product even. We got to make sure that it’s safe and, you know, effective for, for the consumer. But you know, we’re going to allow Delta-8 Flooding into the market. And so regulators don’t have a firm grasp on what can the cannabis opportunity is.
[00:21:28] So I, would say the challenge and the opportunity for us is to continue to have those conversations. We can’t compete from a lobbying dollar perspective with pharma and alcohol and tobacco. We just can’t. And those are the industries that have the most to lose if cannabis starts to become more accepted by the general, uh, us, you know, uh, population.
[00:21:45] So for us, we got to continue to have those conversations with regulators, make sure they understand what the opportunity is. But when you actually talk about the social equity component and helping to write a lot of wrongs that were in the industry, It’s not just about the tier ones [00:22:00] being successful.
[00:22:00] Again, it’s that time raising all ships concept where we can help out a lot of distressed communities and a lot of people who have been impacted by the war on drugs and cannabis and everything across the board. But we need help from dc. So I think while we’re being kind of demonized from our operating perspective, they’re actually making us stronger the longer that they actually take to push through, uh, uh, legislations So two 80 d e, it depends, right? Like we talk about safe passing. , I don’t know what safe would have looked like, right? It would’ve been a stripped down version where we would’ve just had federal bank accounts or credit cards, or we don’t know what it’ll look like, but any acceptance of cannabis at the federal level is a win.
[00:22:39] And I don’t care if it was like, you know, you can get a checking account at B of A, and that’s it. The, the government and Congress has now accepted cannabis at the federal level. And so, you know, there’s the glass, you know, half full, half empty concept here where we’ve taken the half full concept or, uh, position here, where when you look at it, safe has never gotten [00:23:00] further than it did.
[00:23:01] You know, it didn’t pass, but it never was further, it’s never been more discussed. Four years ago, people didn’t even know what the acronym SAFE stood for. And so now here we are, we have both sides of the, of the aisle talking about passing massive legislation that would, you know, would push cannabis to be accepted on the federal level.
[00:23:19] So we’re disappointed, but you can’t stop the way you’re operating your business. We never made assumptions of safe. We’re gonna keep, you know, fighting the good fight, but in reality, it’s up to us and other operators in the space to make sure that regulators understand the full opportunity of what can.
[00:23:34] Legalization could look like, or even just a safe amendment.
[00:23:37] Kellan Finney: Is there a part of you that thinks that safe should have been redrafted to include rescheduling? Because I’ve spoken with some, uh, bankers and they said that even
[00:23:46] Bryan Fields: with safe, safe passing, the
[00:23:48] Kellan Finney: big, big banks like JP Morgan or Wells Fargo, they still wouldn’t touch cannabis.
[00:23:52] They said that it has to be rescheduling. So do you think that that is something that needs to be, uh, integrated into the next safe? [00:24:00]
[00:24:01] Aaron Mile s: A lot of this is just a game of telephone. I think when you look at, um, you know, safe as a standalone without any types of provisions written in there, um, probably doesn’t get us a lot.
[00:24:10] Right. It probably gets us, again, a credit card or a checking account and maybe credit cards. Cause even Visa and MasterCard have come out and said safe passing. on its own doesn’t mean that we’re just automatically gonna start allowing credit cards to, uh, you know, come into the space. But if you look at, if credit cards were, you know, accepted, basket sizes go up, sales are gonna go up, it just naturally happens.
[00:24:30] Two a d e goes away. So there’s things that can happen to our space that are gonna naturally cause an uptick without us having to do anything, right. So I. I have heard that, uh, rescheduling, rescheduling is, is, is a focus. If you go from a one to three, there’s a higher likelihood of acceptance at the capital markets, uh, perspective, but in reality, we don’t know what that looks like.
[00:24:54] And banks change their mind all the time. I, I worked at the New York Stock Exchange and uh, when I was there, I actually was working [00:25:00] on the cannabis groups and, you know, when I was there at the time, I mean, there’s nothing in the bylaws on the regulations state that they can’t list. Just because we’re illegal in the state of, you know, in, in the United States, doesn’t mean they can’t list us.
[00:25:11] They’re choosing not to list us. So how do you ease those concerns? And it really is anti-money laundering and it’s the backlash that could potentially come back under the exchanges in these larger banks. So that’s what we need to figure out. I mean, descheduling would absolutely get us everything that we would want.
[00:25:26] From a, from an industry perspective, but I think you can also get creative with a safe plus like an A M L provision or something that, that really protects the banks remain type of backlash that would come back on. Do you think there’s
[00:25:37] Bryan Fields: like a certain domino or certain company or something specific that is the catalyst to have some of these things to start falling or do you think it it’s just gonna be a, a macro vent with a, a good tide that just ends up making a big switch.
[00:25:51] Aaron Mile s: I would say it’s kind of to be determined. I mean, I, I, I would say where the left probably [00:26:00] miscalculated, I think is probably the best way that I would say it is. You know, they thought, Hey, you know, we’re gonna get this through in the Lane duck session. You know, even though there’s, you know, the house is, is Republican and, and Senate remained.
[00:26:14] You know, uh, Democrat, even within each, they’re very close. So there’s like, it’s very, you know, bipartisan. It’s very close. From that perspective, I think they miscalculated the fact that they couldn’t roll it in the N D A A and then they couldn’t roll it in the omnibus. So, you know, safe as a standalone, uh, it probably is, is where you’re gonna see a little bit more of a focus.
[00:26:35] Cuz when you try to lump it on to these other bills, you’re just not gonna get the votes. McConnell came in and said, absolutely not. You want our votes? Then take this outta the Omni Bill, you know? Nancy Pelosi, you want your 60 million library in San Francisco. It’s not gonna happen if you put cannabis in there.
[00:26:50] And so, you know, I think there was some, you know, um, uh, considerations that had to be done on the left side. And I think they, they realized that they waited too long and then they kind [00:27:00] of miscalculated the fact they couldn’t lump it on one of these other, uh, avenues. And so the, the issue comes into play.
[00:27:07] You know, if you did safe as a standalone, this is one of thousands of items that Congress is gonna be looking at. And so how do you make that a priority? Right? And it’s, you know, the social equity component has to be addressed. There are, there is a war on drugs that, you know, was, uh, very overstated and, and a lot of people have been impacted and, you know, there’s a lot of right rights that, you know, um, are wrongs that need to be righted here.
[00:27:30] And, and we partnered, you know, with one of ’em, you know, the Weldon Angel. Project Weldon Angelos, who’s in jail for 13 years for holding $900 worth of cannabis. And it’s just like unheard of when you start, you know, we could go story by story by story here. So that’s the biggest component is when you actually think about, you know, writing a lot of these wrongs.
[00:27:48] I think social equity is gonna play a, a big role in this, but then you also look at like, let’s look at my old employer, the New York Stock Exchange. I p o proceeds are down. Uh, SPACs are defunding, and the lifeblood of [00:28:00] that exchange is actually listing fees. And this is a slam dunk, right? If they allow cannabis companies to come flooding in, I mean, you’re talking, there’s, there’s a massive amount of listing fees that can come in.
[00:28:09] So it’s up to us to not go to these, you know, financial institutions and say, you need to consider. Uh, partnering with us because it’s the right thing to do. It’s, you have to incentivize them to say, okay, like, look, let me show you what this total opportunity looks like. And sometimes it’s tough to get a seat at the table, but you keep pushing and, and I think, we’ll, we’ll get to where we need, need to be at some point.
[00:28:29] But what we do as an operator is you control what you can control and that’s the operations. Running the business as efficiently as we can, staying ahead of that market growth. And then from my world’s perspective, all focused on capital markets, you know, I have to talk to the dollars that can invest in the space right now.
[00:28:44] You have to stabilize that. You have to, you know, make sure that you’re tending to the debt and the appropriate fashion. You just read five 350 million, uh, and and fall. And then you look at the new opportunities that can present themselves. You can’t get caught flatfooted. Cuz another thing I’m gonna lose my job over is if we [00:29:00] see.
[00:29:00] Safe passes and we can up list and I say, oh shit, I missed that one too. And Hey Aaron, did you see that ?
[00:29:06] Bryan Fields: Yeah. Did you see
[00:29:06] Aaron Mile s: that? And I’ll be like, ah, I forgot to read the Wall Street journalist morning. And so we, I, I am, I need to be ahead of that opportunity. Right. So I think, you know, the, the basis of this conversation here, we’re really looking at market growth and opportunities, position ourselves ahead of adult use, which, you know, we absolutely feel like we’re an industry leader.
[00:29:25] but we’re also industry leading on things that people can’t necessarily see. Right now. It’s the institutional conversations with investors that we’re having. It’s, it’s making sure that we’re, you know, having the appropriate conversations with the exchanges and that we’re not caught flatfooted in if these opportunities present themselves, like we’re ready to bust through the gate and really take advantage of what the US capital markets could look like.
[00:29:45] Because, you know, uh, Brian, to your point, like, you know, two 80 e game changing for the industry, if that gets, you know, reversed, but then the capital markets component. When we’re 96% retail traded, it is unbelievable. Like, you know, what a rumor on [00:30:00] Twitter can do to your stock and, and how much it can trade down just based off of like what the chatter is, you know?
[00:30:07] And, and I’m, half my day I feel like is spent, you know, debunking rumors that are in the market. But when you get those institutional dollars that come in, I mean, there’s days that we trade under, you know, $300,000 of notional value Canadian, which is closer to, you know, $250,000. Like when I was at the C M E group, it’s 70 billion market cap.
[00:30:27] I mean, we had an investor there that owned 10% of the company, so that was $7 billion position that they had in one company. Now put that $300,000 of notional value into comparison of one investor putting 7 billion of their capital at work into one company. So when you think about institutional dollars coming in, it flushes out that headline noise.
[00:30:49] It stabilizes right? The, the, the market that you’re trading in. But what’s the, what’s the also kind of byproduct of this? Well, your stock price potentially becomes more valuable. Well now your [00:31:00] stock becomes more valuable. You can start using it more as a currency. And now you start to think about some of these distressed assets, and now you start to think about like, we haven’t been able to do much with equity, nor do we want to, we can’t issue equity to raise capital at these levels.
[00:31:13] We can’t, you know, necessarily look at doing, you know, m and a because, you know, we don’t wanna dilute our stock too. But the byproduct, there’s a trickle down effect, right? Where it’s like you, you have capital markets, inclusion, institutional dollars come in, stock becomes more valuable. Now you can start using it more as currency and you can issue, you know, stock for m and a.
[00:31:32] You can also raise capital and pay down, you know, so it’s just like, it’s a never ending list of really what you can take advantage of once these opportunities start to present, present themselves. But I can tell you day and night, this is what I think about. And you know, we. You know, George Arcos, who again is he, he’s the best operator in this space and, and I want anybody to disagree with him and and go head to head with him.
[00:31:52] And, uh, and you know, we have, you know, Darren Weiss, our COO is an industry vet, and then you have me on the capital market side with all the relationships I have. I [00:32:00] mean, we are looking to take advantage of every opportunity we can. So
[00:32:03] Kellan Finney: when you guys are out talking to, to shareholders and potential investors, and you’re kind of laying out varano as a, a whole, what is kind of like the sexiest thing that moves the needle when you’re chat chatting
[00:32:12] Aaron Mile s: with shareholders?
[00:32:13] Right. It’s, it’s, you know, when you look at the focus is gonna shift really to, to who can and, and can focus on free cash flow generation. Right. And, and, and for, you know, the bulk majority of our existence, we’ve been free cash flow positive. We’ve had a couple quarters down, we’ve had some significant investments we’ve had to make in the business.
[00:32:30] But you’re gonna wanna to, to. Invest in an operator that has, you know, the, the best footprint. We all very similar footprints. And so now you have to start to, to kill the layers back. So, you know, you look at those and we hate, there’s no other way to do the map slide. You go to wear investor presentation, everyone’s gonna have that stupid map slide up where it’s gonna have, they have the arrows pointing and this is dispensaries.
[00:32:51] But there’s a lot that goes behind those numbers, right? So you look at the quality of those operations when you think about hospitality and, and, and George [00:33:00] opening up restaurants and bringing that mindset and that capability into this space. Go to any of our Zen Leaf dispensaries or any of the move dispensaries down in Florida, and you are going to get the best customer service.
[00:33:12] The the lighting’s gonna be on point, the music’s gonna be on point, the product’s gonna be displayed appropriately, like you’re gonna be in and out. Because we want your experience in all of, all of our locations to be, uh, at a top notch because we. Our operations on what your experience is gonna be, because our customers are the lifeblood of everything that we do.
[00:33:33] So if you have a bad experience, that’s what you’re gonna judge us on. And we wanna make sure that even these conversations, you’re gonna judge me on this conversation and we wanna make sure that the last interaction you have with a bud tender, or if you’re not wholesaling into a, you know, a certain dispensary or you’re talking to me, that you know you’re gonna walk away with the best, uh, opinion of varano.
[00:33:51] So I think what sets us apart, And what’s gonna set investors, uh, or companies, part two investors is quality of operations. [00:34:00] So don’t listen to me, cuz of course I’m gonna say we’re the best, right? Like, you know, I’m gonna tell you the da, the data does
[00:34:04] Kellan Finney: too, right? Like, I watched New Front, I watched new Frontiers and move the move.
[00:34:08] Brands are always, always in the top three in those product categories on new Frontiers data. So I’ll give you a shout out for
[00:34:14] Aaron Mile s: that . Anyway, keep keeping, gimme some more shout outs. I’ll tell, but, you know, but, but if you look at, so look at this. Let’s use Florida as an example. Look at the O M M U. So what people will do is they’ll look at this report, they’ll look at Graham sold, and they’ll be like, oh, well this operator has the, the most Graham sold.
[00:34:29] They must be the best. Well, we’re gonna say, well that doesn’t necessarily show the dollars behind those Grahams sold, and it doesn’t show you the quality. So don’t take my word for it for, again, like, you know, I can say I’m the fastest person in the world, but Hussein Bolt’s still gonna blow me outta the water.
[00:34:43] Right? I’m just gonna go on record saying that I probably wouldn’t, uh, be able to, to keep up with them. But when you look at our. Go test us out. Go look at our dispensaries. If you’re in Florida, go to move, test our products out and see the quality in your experience with those. Look at our zen leaf, like we will go head to [00:35:00] head with anybody in the market from, you know, your experience at one of our dispensaries and our products.
[00:35:05] Our second to none. And when I talked about that value and that mid-tier product coming out, we’ve always focused on premium, right? So when you think about that premium mindset and then you start to roll out a value in a mid-tier, this isn’t garbage product that we’re putting into the market. It’s the same genetics.
[00:35:20] It’s just the automation and the efficiency behind getting it from seed to sale is where it differentiates. So I would put our value brand up against most other operators premium. So that’s what we want investors to understand is that, you know, we are one of the best operators in the space. It shows up in our numbers, but don’t believe me.
[00:35:41] Come see it. And so we do a lot of facility tours. We have people come visit our dispensaries, people sample our products, because again, I’m gonna tell you how great we are all day long. But don’t listen to me. Go test us out and don’t tell me you’re going either, because I won’t give you the v i p tour. I want to see if you get that v i p tour, right?
[00:35:57] So I think investors want to know that they want to know [00:36:00] self-sustainable, uh, nature of the business. You know, how dependent are we right on bringing capital and cash in? Or can we actually expand ahead of these opportunities, uh, on our own? What is our margin profile look like? And then you have to shape the overall industry, uh, um, opportunity, right?
[00:36:17] So when Safe didn’t. We kind of revamped the way that we were gonna go out and. You know, we, you kind of mature your investor presentation as the market develops. And if safe passed, then we would be marketing a a completely different way. But what we did is we took a step back and we said, okay, let’s go back and look at why we’re all in this space to begin with.
[00:36:38] Again, I could go work in corporate America and be bored outta my mind all day, but I see the opportunities that are, that are here. And so for us it’s shaping those opportunities. To the appropriate investors and making sure that you get some money that’s just gonna stand on the sidelines. And if you get some type of passage at the, at the federal level, it’s not getting caught flatfooted and it’s people getting ready to write checks, you know, [00:37:00] once and once and if that time comes.
[00:37:01] So, um, you know, the biggest thing for us that separates us is, You know, the conservative way that we raise capital, the efficient way that we run our business, and, and truly just, you know, um, you know, the, the focus that we’re gonna have on positioning ourselves ahead of growth. And, you know, again, don’t believe me, you know, wait till you see our, you know, uh, just listen to our quarterly numbers.
[00:37:20] Uh, you know, look at the numbers that we put up. Look at the operations that we have at hand. Go check out our dispensaries, judge us based off of those variable. Because again, you know, I’m a spokesperson for the company and, and, but you know, I’ve also, you’re getting a good job, . I think I, I’ve worked at other, I’ve worked at other places and I’ve had opportunities to move to other places, but there’s no place I’d rather be, than Baro.
[00:37:42] As frustrating as this space is, um, I know we have, uh, the total capability to, to, to really succeed in this space and, and we’ve been successful. So I think that’s the biggest, uh, overshadowing is everyone thinks it’s doom and gloom, but in reality, Take away cannabis, [00:38:00] give us inclusion in the US capital markets, and then have us put up our Q3 numbers and be a normal US based company.
[00:38:07] And then you’ll see who wants to invest in our space. It’d be, it would be night and day difference.
[00:38:11] Bryan Fields: The way, the way I’m hearing it is like your team has all these tools locked behind in a box that you know you can use eventually and soon you’ll be able to unlock them and use them just like everyone else operates.
[00:38:20] And eventually when that happens, you should be able to be assessed kind of compared to the peers that people see on the other markets, like the tech companies, like the oil gas companies, which will happen hopefully sooner rather than later. But I wanna slightly switch gears real quick, Aaron. The internet has a working theory that cannabis executives, a, don’t consume products and B, would never consume their own products.
[00:38:37] So I gotta ask, do you feel differently about.
[00:38:40] Aaron Mile s: I absolutely do, and I will fully admit, uh, in 2018, uh, veer and whiskey guy here, and, uh, you know, I, I didn’t know I pitched the opportunity to go to another tier one and help take them public. And to be honest with you, I didn’t know the difference between indica and sativa, right?
[00:38:58] So here [00:39:00] I am. Fast forward, I now have it as part of my daily. I might not be a huge flower, uh, consumer. It’s probably more for, for the golf trips with my buddies. Uh, you know, when we do that. But this, that’s the beauty of cannabis, right? Like, I think, you know, like I have uncles who think that, you know, you just gotta light up a bowl, and that’s literally the only product form that you can have, but,
[00:39:20] Um, if if you don’t know your product, then you can’t sell your product. And so for me, I know our product from A to Z and we also want to have products that can tailor to any lifestyle and people from all different demographics. If you’re down in Florida and you wanna improve your golf game, you have a, you know, an a c l tear in your right shoulder.
[00:39:40] We’ll go get some of our, you know, pain bomb. And if you’re a, a connoisseur, and you know your stuff and you can tell the differences between terpene profiles, then, you know, we have that premium level product for you there. But I would say, um, you know, I would be a hypocrite if I’m out here pitching the best product, uh, and not being a, a consumer.
[00:39:58] Um, uh, I [00:40:00] haven’t before this podcast, so I want to go on record to say that, uh, we’re gonna edit that part out we’re talking about now. But, um, it’s a part of your daily routine. It helps you fall asleep, it helps you relax. You can have fun on it, you. There, there is a product category, uh, for every, for every lifestyle, but there’s also a lot of opportunity to continue to evolve and adapt that portfolio.
[00:40:19] So our r and d program, looking at beverages, looking at everything across the board, is fully up and running. Now. Go back to the self sustaining and being able to invest dollars back into your portfolio. We have a luxury of being able to invest in r and d as well. So I would say, um, if you don’t understand your product, , uh, you can’t operate in efficient business.
[00:40:38] And so I would say everybody in our company is fully aware of what the product quality is. And it’s not even just our product, it’s it’s product. You have to know what your competitor’s products are like as well. So you go to different dispensaries, you see what those experiences are like. You see what the, you know, the, the product quality of, of different, uh, uh, cannabis companies are.[00:41:00]
[00:41:00] I might not have, you know, uh, 10 eights in front of me and I’m, you know, rolling up each one and trying to figure out, you know, what the different levels are. But we do have people that do product testing all day long. So, you know, we’re very in tune to what our product, uh, quality is. And, um, I can tell you personally, uh, uh, there’s not, uh, a competitor product in my, in my portfolio just because I know I’m always gonna get the best quality.
[00:41:22] Uh, coming from Broo. What is one
[00:41:25] Bryan Fields: aspect operating in the cannabis industry that would surprise or shock others to.
[00:41:32] Aaron Mile s: Surprise or shock others? Um, you know, I would say, you know, the ability to adapt, right? I think people don’t really understand the layers that we have to encounter every day. And so when you think about. , um, staying ahead of those opportunities, like, it, it, it’s, it’s tremendously challenging to operate what’s available but then continually level up and so I would say the adaptability of not only the executive team, [00:42:00] but you know, our employees at all levels again, We’re all steering the ship in the right direction.
[00:42:05] So I would say adaptability is, is probably, uh, the biggest thing that people don’t maybe understand is that like, you know, you can’t ever get into cruise control in this space. Um, so I would just say always being able to take advantage of the opportunities that are heading you. So what scenario keeps you
[00:42:21] Bryan Fields: up at night?
[00:42:22] Regulation
[00:42:23] Aaron Mile s: all day. Yeah. , uh, well, I mean, how, how long do we have? Cause I can talk about quite a few other things, but, um, I would say this, I would say regulation keeps us up because of the uncertainty of it. And it’s the one thing that like if people could just get out of our way, Uh, and, and we had a clear path of how we could operate and, and, and really invest back into the business ahead of growth is, is is one thing, but regulation is something that keeps me up.
[00:42:51] Um, you know, and I would say this too, I mean, you know, it doesn’t keep me up, but it’s something that we really wanna focus on is. You know, culture in our company is very important, and [00:43:00] so, you know, you wanna make sure that you don’t get caught in the weeds where I’m so focused on making sure that we’re positioned ahead of uplifting and institutional dollars and all this stuff across the board where you’re not showing gratitude back to your employees because at the end of the day, you’re, you’re developing careers, you’re making sure that people feel that they’re a part of the ride in the journey.
[00:43:20] Um, so we definitely want to make sure that we’re never overlooking employees and giving people plenty of opportunity to, to excel, uh, and, and, and really succeed here. And, um, I think if you interviewed, uh, a lot of our, our employee base, they would realize, you know, they would tell you the same thing is that, you know, we’re focused on career development and making sure that they understand how much we appreciate ’em.
[00:43:38] So, I would say doesn’t keep me up at night, but it’s definitely something that we need to be focused in on. But regulation all day long, you know, if Schumer and Booker are involved in any part of your business, you should probably not sleep. So, You can tell him I said that .
[00:43:51] Bryan Fields: Yeah. I’ll make sure to DM that.
[00:43:54] When you got started in the cannabis space, what did you get? Right? And most importantly, what did you get wrong? [00:44:00]
[00:44:01] Aaron Mile s: Cannabis space. So you were talking about me personally when I got, uh, started. So listen, you know, in my world, capital markets, uh, de depend. It doesn’t matter what investment banks you, you use, um, I would say.
[00:44:13] What I got right, was being able to institute a blueprint for investor relations and, you know, treasury and, and, and layering on how we need to do business the right way. Now what you get wrong is you make assumptions. And so 2018, I just assumed we were gonna use computer share as our, uh, you know, our, our transfer agent.
[00:44:32] And, you know, I called up my contact there and they hung up the phone on me. And then, then, then you start to have a few oh shit moments. And then you’re like, wait, every vendor that I used to work with isn’t. To me. So I would say the assumption aspect in 2018 is really, I think a lot of us got, you know, we had to work very closely and you don’t really share a lot of trade secrets with, with your competitors.
[00:44:52] But we all had to come together and, and a keep each other sane, but then also say, okay, I’m using this vendor, you should do this, this website [00:45:00] vendor. You know, so I’d say assumptions are probably the biggest mistake we made. But, you know, then you think about my transition over to Murano without a hitch, like, you know, every box was checked.
[00:45:09] Everything was ready to go. Cause we went public a little bit later than, than the other, uh, peers. In, in our, in our peers said,
[00:45:16] Bryan Fields: before we do predictions, we ask all of our guests, if you could sum up your experience in a main takeaway or lesson, learn to pass onto the next generation, what would it be?
[00:45:25] Aaron Mile s: Take on opportunities like this, right?
[00:45:27] Corporations in America pay you to give up on your dreams. And, and so when you look at the cannabis, We’re a a billion dollar startup company and everybody feels like they’re an owner in this company. And, and so for me personally, it’s like I’m invested in cannabis, but I’m even now more aggressive on what I could do on my own and, and how I could invest in different industries and, and start to look from that, that perspective.
[00:45:50] So I would say just the pure sense of ownership of this company is, is just the most appealing aspect to this, because again, there’s nothing [00:46:00] wrong with working in corporate and there’s nothing wrong. Trying to get a pension and, and going to work and knowing what to expect, you know, day by day. But there is so much opportunity in this space.
[00:46:10] And I will say, and I know this across the board cuz you know, we’re very close with a lot of companies. If you come in and you’re smart and you’re aggressive and you, and you work hard, most likely that’s gonna be recognized. And you might be hired for X. But then opportunities Y and Z present themselves and you’re gonna get pulled into that.
[00:46:28] Because again, as these companies develop and grow opportunities, contin continue to present themselves. So I would say there’s not an industry. In this space right now, not even just in in this space, but just in general where a person can come in and have that startup feel and as many opportunities as they do.
[00:46:45] So I wouldn’t change it for the world. I, if I went back to US corporate, I would be tremendously bored. And I, I, I, I wouldn’t survive. I, I don’t even know if my khakis fit me anymore. So I, I, you know, whole, uh, you know, we’ll see.
[00:46:56] Bryan Fields: Well said. All right, prediction time. Aaron, [00:47:00] we are sitting here a year from now.
[00:47:01] What does the cannabis landscape look like? What has changed for the good or the
[00:47:05] Aaron Mile s: bad? So for the good, um, you just naturally assume that Washington is gonna have more and more conversations about some form of, of legislation, so that’s good. The more conversations you have, the more you can push, the more we can get in front of regulators and financial institutions, I would say, uh, would be good.
[00:47:24] I would say you’re gonna look at markets continue to either adopt an adult news program and or turn on. Right. So Maryland is scheduled to turn on within the year? No, there’s no guarantees on that. And again, we’ll, we’ll stay ahead of that. Um, you know, the bad, uh, I would say is just, you know, kind of the norm and, and you’re gonna, you’re, you’re gonna see, you know, potential for consolidation in the space as operators become more and more distress.
[00:47:49] So that’s, you know, it’s kind of like both sides of the fence. That’s good and bad. So, you know, bigger operators would have the ability to, you know, potentially add to their portfolio and expand their footprint. [00:48:00] But that means that some of these distressed assets have to get out of the business and, and that’s bad.
[00:48:04] And so again, we don’t want that scenario, right? Like, we want everyone to be successful in this space. So I would say the negative is just kind of the same, but I would say the prediction would be, you know, you, you potentially will see consolidation in the space. But I do think you’re gonna see more conversation around some form of legislation, and I think you’re also gonna see, you know, a rescheduling or rescheduling or something along those lines.
[00:48:29] Pickups and steam as well. Challenge. Uh,
[00:48:33] Kellan Finney: a year from now, I think New York will have opened their fourth. No, I’m just kidding. . . Like also, maybe
[00:48:40] Aaron Mile s: it might be up to about thousand dispensaries by then, so who knows. But, uh, uh, no,
[00:48:46] Kellan Finney: a year from now I’m gonna be positive. I think that New York kind of gets it together.
[00:48:49] Honestly, from the East coast perspective, I do think Maryland has legal sales, but I think California, I think this year is gonna be a huge. Consolidation on the entire West [00:49:00] coast, not just California. And I think that by this time next year, you’ll start to see signs of the opportunity that everyone was excited about in California when it first came legal.
[00:49:10] I think that you’re gonna get a lot of bad actors that kind of leave the state. It’s gonna get a lot cleaner from a regulatory environment, I hope. And then that’s gonna create this opportunity. These larger entities to go in and actually have success in, in these, in that market. Right? So I think that that will happen, and I do think from a regulatory standpoint, there’s gonna be at least maybe one bill kind of being talked about that is gonna kind of change the landscape of banking and taxes and those kind of things.
[00:49:38] Um, I don’t think it’ll be passed probably till the summer of 2024 is my guess. I’m gonna stick with my prediction that if you are a small operator, um, or even a tier two organization, if you can survive until 4 20, 20, 24, I think that you really have the, the generational wealth opportunity. You know what I mean?
[00:49:57] So that’s my
[00:49:59] Bryan Fields: opinion. What, [00:50:00] what? Right. Well, obviously anything New York base is pretty triggering for me, , uh um, but I unfortunately don’t think new will have it together at this time next year, and I think next year or the following year will be the year of lawsuits, and I’m expecting there to be a bunch of lawsuits coming down the pipe.
[00:50:13] One, I think interstate commerce actually happens, whether that’s the three states that they’ve talked about, kind of all being in agreement and hoping that the federal government just stays outta the way. I think that could be a critical one. I also think. There will likely be some lawsuits here in New York in order to open up the opportunities because I think the dormant clause has shown that there are chances that things could be done slightly differently.
[00:50:32] And, uh, I’m hopeful that by this time next year, New York has done a different job. So a Aaron, for our listeners, they wanna get in touch, they wanna learn more, and they wanna buy verano products. Where can they find ya?
[00:50:43] Aaron Mile s: So, um, our, our main national, uh, dispensary brand is Zen Leaf. Uh, that’ll be in the 12 markets outside of Florida.
[00:50:50] Florida is Move m uv. Uh, our products, uh, range from Varano, uh, to Encore to the move product on Florida to [00:51:00] Obia. Uh, you can find, uh, more [email protected]. You can go to investors.baro.com. You can invest, uh, investors. baro.com is actually the email address if you wanna get in touch with me or my department.
[00:51:12] Uh, ticker symbol V R N O on the cse. And if you’re US based and have, uh, you know, a discount brokerage, you can go vn o f on the OTC market. Uh, and if you go to brono.com, there’ll obviously be much more information on product, uh, uh, selection and, and, and dispensaries and whatnot. We’ll link this
[00:51:28] Bryan Fields: up in the show notes.
[00:51:28] This was fun. Thanks for taking the time. Absolutely. [00:51:30] Aaron Mile s: I really appreciate it. This was fun.
