Category: Blog Post

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!

This week we are joined by Matt Hawkins founder of Entourage Effect Captial to discuss :  

• Capital Challenges & Opportunities
• Investing in the Cannabis Industry
• Cannabis Political Update

About Matt Hawkins:

He has 20+ years of private equity experience and has founded multiple $500+MM alternative firms. Matt also serves on the board of numerous cannabis companies. He is known as one of the pre-eminent thought leaders in the cannabis space and has been making major investments in cannabis since 2014 (which is a long time in weed). He’s a regular on CNBC, Fox Biz, Bloomberg, and Cheddar and he is a contributor for Kiplinger and Seeking Alpha.

Big thank you to Colin Landforce for sharing our Cannabinoid Playbook. Sign up for Free Smoke 

At Eighth Revolution (8th Rev) we provide services from capital to cannabinoid and everything in between in the cannabinoid industry.

8th Revolution Cannabinoid Playbook is an Industry-leading report covering the entire cannabis supply chain 

The Dime is a top 50 Cannabis Podcast 

 Contact us directly at [email protected] Bryan Fields: @bryanfields24 Kellan Finney: @Kellan_Finney 

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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 is ke Finney. And this week we’ve got a very special guest Matt Hawkins, founder of entourage vet capital, Matt. Thanks for taking the time. How you doing today? Great. How are you guys doing, doing well? Ke how are you doing today?

[00:00:17] I’m doing really well. Excited

[00:00:19]Kellan Finney: to talk to Matt, excited to talk about, uh, capital in the cannabis industry. How are you doing Brian?

[00:00:23]Bryan Fields: I’m doing well. Thank you. And, uh, before we dive in a quick housekeeping, a big shout out to Colin land, for sure. Sharing our cannabinoid, playbook, everyone, go check out his newsletter free smoke.

[00:00:32] And if you wanna shout on our podcast, just share the cannabinoid playbook that can be found on our website. So NA, before we dive in, can you give a little background about you?

[00:00:42]Matt Hawkins: Sure happy to do it. Um, been in private equity for gosh, 25 years now. Um, all kinds of different things I’ve done over the years.

[00:00:50] And 14 is when I got into cannabis, started doing some real estate lending back then. Uh, but then my, I call it my luck and timing moment [00:01:00] is when I realized that, uh, there’d be a bigger opportunity investing in the actual cannabis companies themselves. Cause there’s a dirt of capital that as there is now.

[00:01:10] And that’s when we started raising our first fund. Um, now we’re three funds into this and we’re, you know, one of the longest standing cannabis investors in the space. So we’re, uh, very, very fortunate and very happy to be in the space. Um, happy to chat, chat with you guys and answer any questions.

[00:01:28]Bryan Fields: Yeah. I, I can only imagine what you’ve seen over the years since 2014.

[00:01:31] So I wanna start in those early days, what was it like? And was there any hesitancy to kind of enter in the cannabis industry?

[00:01:38]Matt Hawkins: Well, there was significant, uh, there was significant hesitancy, uh, because I didn’t, you know, that I went to bed at night thinking there was a chance I could go to jail. . So, uh, you know, that’s obviously a lot different now.

[00:01:52] Uh, but back then, that was a, a concern of mine. And, um, it was also not easy to raise capital, [00:02:00] um, because it was the first time, um, you know, it was our first organized fund, obviously, uh, in the space and it was, uh, not your everyday run of the mill, uh, product that we were. So, um, so yeah, it was, it was very nerve-wracking for a bunch of reasons.

[00:02:18] Um, different ballgame now, though,

[00:02:21]Kellan Finney: how much more mature are the companies that you guys are encountering in space, uh, today than they were when you first got into the industry?

[00:02:28]Matt Hawkins: So, um, I like to say that we’ve, our firm is kind of matured along with the industry. Cause if you think about it and our first fund was kind of vintage 14 to 17, And all that, all that was around back then were effectively startups.

[00:02:44] And so we were providing a lot of angel money, you know, pardon the fund, but seed capital and, um, you know, $500,000 to a million for investment cuz that’s what [00:03:00] these companies needed. And that, that way could move the needle. Um, fund two was. 17 to 19 vintage. And we mature with the industry. We’re able to do series a deals.

[00:03:13] So usually companies with some revenue, uh, you know, but, but maybe not much else. And, uh, but we could write three to 5 million checks cuz a, we raised more money and fund two that we didn’t fund one. It was, you know, with co-invest almost 80 million. Um, and so. That was kind of, that was our first, you know, really big fund, so to speak at least big for cannabis.

[00:03:38] Um, and now fund three, we’ve matured even further. Cause we’re, you know, raised 150 million, we’ve raised almost half of that and we’re investing in later stage companies and we’re more growth equity because those companies exist. And, um, we still do a little bit of a carve out through our partner. With, uh, art view [00:04:00] on venture capital for fund three, but, but a, but a smaller we done historically

[00:04:08]Bryan Fields: when you’re writing those checks with operators and providing that capital for them.

[00:04:11] Is there any sort of understanding of where that capital’s gonna be deployed or is it up to them to have car, you know, guidance on what they

[00:04:17]Matt Hawkins: wanna do with it? No, that’s, uh, I think any private equity firm will tell you that use of proceeds is a, is a, you know, a very, very important. Uh, part of the investment.

[00:04:28] I mean, you need to know, you know, that this capital’s being used to execute on the business plan that was presented to you, uh, you know, by the management team. Um, and any misalignment on that is a, is a huge deal. So we absolutely, you know, need to know that and need to be in agreement on it and usually align contractually as.

[00:04:50]Bryan Fields: Are there certain things that you’ve learned through, let’s say fund one, that fund three are absolute deal breakers. When you’re looking for this management team or for, for, can you give us some examples there? [00:05:00]

[00:05:01]Matt Hawkins: Um, no shortcuts on the under, uh, in particular management teams, um, you know, we, I don’t think we took crazy shortcuts.

[00:05:12] Maybe we did deals because they just. Too good to be true. But there was something about the management team that just that we didn’t feel right about and shouldn’t have done those deals. Uh, you gotta go your gut on, if you don’t feel comfortable with the operator or operators. And usually, uh, if there’s where there’s smoke, there’s fire.

[00:05:33] And, um, so we just won’t ever won’t ever do that, uh, going forward. And, you know, we didn’t do it very often, but we still, you know, learned our lesson.

[00:05:43]Bryan Fields: Given the current economic, you know, environment that we’re in, we’re participating in. Do you think cannabis operators need to be more, you know, uh, strategic with their investments or now you think is the time to growth with the opportunities for new states coming online and the opportunity for big expansion?

[00:05:56] What, what do you think there?

[00:05:59]Matt Hawkins: Well for [00:06:00] firms like us, this is a, a great opportunity. I mean, it sucks for the industry. It sucks for the operators. Cause you know, there’s very, very little capital valuations are at historic low. Um, but we’ve got capital and we can deploy it at very good valuations. So that’s a, that’s, it’s good for capital right now, but we don’t have an unlimited amount of capital.

[00:06:24] And until something happens federally, you’re not gonna have institutional capital come in and, and we’re gonna be stuck in the situation, uh, going forward, whether the markets are good or bad. So, uh, so yeah, I mean, it’s a, it’s an issue. And so

[00:06:40]Bryan Fields: with,

[00:06:40]Kellan Finney: with the limited capital, how do you guys kind of deploy it from a plant touching perspective versus an ancillary

[00:06:46]Matt Hawkins: perspective?

[00:06:47] There’s, there’s no real, uh, percent, but I think our, our. Our goal for fund three is to build scale in as many verticals as we can. So for example, um, you know, we, we’ve [00:07:00] made like two single state operator investments that are in, uh, in Maryland and wellness and organic in Missouri. And both of those companies are now using the growth capital that we provided to expand into other states and to continue their dominance in the states that are in or the state they’re in.

[00:07:17] So that’s a scale building. We also invested in, uh, uh, another example is, uh, how labs, which is the only commercially available THC breathalyzer that kind of measures your THC content in your body at that particular moment. Amazing technology for, uh, not only at some point, you know, law enforcement. You know, impairment’s going to be an issue in cannabis, just like it is in alcohol.

[00:07:46] And so transportation companies, logistics, companies, insurance companies that are gonna start to get involved there. I mean, that’s a opportunity for us to the capital and help this company build scale, become, you know, even more of a dominant player. So. We [00:08:00] just take a look at that and say, okay, where do we wanna do this?

[00:08:02] What verticals they attractive of, whether they’re plant touching or not. And we go after those and usually fund three is gonna be, you know, five, 20 million of life for the investment in you, helping these companies execute.

[00:08:18]Bryan Fields: With the lack of, with the lack of access to, to capital, what can other operators do if they don’t have institutional investors?

[00:08:24] Where else can they lean to kind of get that extra lifeline in order to kind of help them in their let’s say day to day,

[00:08:30]Matt Hawkins: it’s not easy. I mean, there’s no, there’s no real. You know, business friendly, uh, you know, commercial lenders. Um, if you’ve got real estate in your portfolio, that’s one way to do it.

[00:08:42] Cause there’s a lot of real estate lenders in space that are all, you know, good reputable companies that aren’t gonna, they’re not doing, you know, loan to own type strategies. Um, but there’s not a lot of options. I mean, it’s U it’s equity or real estate. Some [00:09:00] banks are starting to kind of dip their toe in the water with working capital lines or things like that.

[00:09:04] But until, you know, say banking act has passed, uh, we’re gonna be stuck there too. The bottom line is that we’re operating in the most, you know, inefficient capital market scenario that we ever will as an industry. And so that’s the good news and the bad news , you know, the bad news is we’re there. The good news is it’s, it’s typically not gonna be for much longer.

[00:09:26]Bryan Fields: Do you think it hurts just the operators or do you think it hurts the industry as a whole with the, the limited access to capital?

[00:09:32]Matt Hawkins: No, the industry as a whole, without a doubt, I mean, it’s a trickle down effect. I mean, even the larger MSOs have incredibly high cost of capital throughout their balance sheet and they’re not operating as, as efficient as they could.

[00:09:47] Um, and then that goes all the way down to the startups that are. So it’s it’s 100% across the industry.

[00:09:58]Bryan Fields: Yeah. And it, and it kind of [00:10:00] con continues to trickle down like the supply chain. We’ve had conversations with operators that said they’re waiting for payment from one in order to pay the other. And it just kind of continues down.

[00:10:08] And, and it’s, it’s one of those where I feel like if you don’t recognize the kind of hurdles that are going on, you don’t realize how much from a global scale it affects. Te can you kind of expand on some of those issues and some of those conversations we’ve had where operations have expanded on that.

[00:10:21] You mean like in California, where,

[00:10:23]Kellan Finney: uh, I think specifically with distribution, um, it’s just challenging, right? Where you have retailers that are looking to, uh, place more orders with brands and they just don’t have the cash flow to facilitate those, those orders. And so, um, how challenging it is it as a retailer, Matt?

[00:10:43] I mean, you guys have, um, a couple. Retailer focused companies in your portfolio. Um, could you kind of elaborate on some of the challenges that specifically like Harborside has faced in navigating those problems

[00:10:55]Matt Hawkins: specifically? Yeah. It’s not easy. Um, but CA let’s [00:11:00] just stay in California. For example, the, you have to have scale in order to be successful in California.

[00:11:06] I mean, the, the dominant players are the ones that have done what we’ve done at Harborside, which is, uh, You know, execute on a, on the CRE M and a, like we did with the acquisitions and, and sub, um, or do something like, you know, glass house and parent company have done. And to a certain extent on just building their verticals that, um, don’t have that much, you know, aggregate revenue and, and, and, and scale.

[00:11:38] You’re not gonna be able to survive in California. It suck. So, you know, mom and pop dispensed trees are gonna be sold on the cheap. Um, those are buying opportunities for companies like this listed different. Um, but, um, it makes it really, really hard. And, you know, the, the lifting of the cultivation tax is gonna help, [00:12:00] but it doesn’t make it, um, still doesn’t make it a whole lot easier, um, on the retailers.

[00:12:09] You know, it’s a, it’s, it’s a tough road to ho, but we’re at Harborside. We’re excited about the future. Cause again, back to my point, we’re operating in an environment that’s only gonna get better. We’re gonna say a shit of money. Um, that goes straight to the bottom line on this cultivation tax going away and.

[00:12:29] That’s gonna drive profitability for us, which obviously will shoot for how much do

[00:12:33]Bryan Fields: you think Harbor

[00:12:34]Kellan Finney: side’s, um, brand has played a role in their survival? I mean, they’ve been around for very long time in the, in the California market and they were kind of the staple for the longest time in Oakland, as far as like the premier dispensary and retail location.

[00:12:51] Um, how much do you think that’s played a role in their survival?

[00:12:54]Matt Hawkins: It’s helped a lot. Um, You know, every, every store we’re gonna have at it’s [00:13:00] what’s state household, which is what we’re soon to become. Um, every store will be called urban leaf with the one exception and that’s the flagship hardware side, the in Oakland.

[00:13:09] Um, so yeah, that’s a, it’s a, it’s an icon it’s um, but again, it’s operating in a very, very turbulent time in a city that is an absolute. Disaster area right in Oak Oakland is an absolute unmitigated disaster. And, um, but once again, we’re at the bottom and it’s gotta get, start to get better. I think. The bay area has finally realized the air and their ways with, you know, law enforcement.

[00:13:39] And I think behind San F changing, recognizing this crime, all these locations is, is close to permanently damaging their

[00:13:54] city. So. We’ll see what happens, but luckily [00:14:00] our, the brand has absolutely sustained and weathered the storm, um, in the city, that’s like a war zone.

[00:14:08]Bryan Fields: Hypothetically you are in charge of, of California. What would be the first thing you’d change in order to kind of help the industry, you know, evolve and move forward.

[00:14:16]Matt Hawkins: You’re talking about at the, at the state level, if I was in charge. Yeah. You at the state

[00:14:20]Bryan Fields: level, what would be the first

[00:14:21]Matt Hawkins: thing you would change? Huh? Well, I would, uh, immediately say that we’re gonna. Uh, pulled, you know, completely, uh, redo our tax structure to where we are incentivized as a state to shut down the illicit market in order to generate more revenue that would come in because we’re only converting about 40% of the market right now in the state.

[00:14:42] If that, um, I think Gavin Newsome is finally come to that, understanding that, um, he can only generate more revenue by, by, you know, going after the, the, you know, The the, the carrot that’s just sitting there waiting to be taken, which is the [00:15:00] illicit market, but you have to shut it down first. Sure. You have to tamp it down and you have to reduce the tax burden on the op legalized operators in order to convert users to where the cost is gonna be similar.

[00:15:11] If you get the costs in similar range, uh, people are gonna go to dispensaries. They’re not gonna buy it on the street. Look what happened to. I mean during the pandemic, we had a surge and we did have a tamping down of the, of, of the illicit market because of that very reason we had curbside delivery. The mean, t t held the cannabis industry, pioneered social distancing, and curbside delivery and pickup.

[00:15:31] I mean, my God. Um, so it, it could happen, but we just need help from the state houses. And California is absolutely a number one on that. given the

[00:15:43]Bryan Fields: current economic climate. Do you think we’ll see M and a from, let’s say some of the big tier one operators or from a smaller side, do you think they’ll be gobbled up by the tier one operators?

[00:15:51] Are

[00:15:52]Matt Hawkins: you talking about the large MSOs coming into

[00:15:56]Bryan Fields: California? Well, I’m talking about large MSOs kind of grouping up together and, [00:16:00] and forming a, a more stronger union versus a big MSO buying. Let’s say a smaller tier three operation.

[00:16:07]Matt Hawkins: I’m not sure. I see consolidation in play at the highest level like that.

[00:16:13] I think there’s still gonna be, you know, four to seven Dom MSOs, that’ll be gobbling up different states. And at some point they’re gonna enter California. Um, you know, that’s one of the things we did when we started this process at harm side. When we took over the board was I went to all those CEOs. We know all those guys.

[00:16:36] I mean, we were early investors in GTI. I mean, I know Ben personally, I mean, we know the guys at Cresco labs, cause we laughed about how we, you know, our original name was Cresco capital partners. And like, how the hell did we just pick the same name here? And so we, you know, I know Charlie, and so we talked to all those guys, we find out, you know, what, what are they looking for?

[00:16:55] The answer is to a man and to a woman [00:17:00] when they entered the state of California, they, they want there to be. A completely vertically integrated operated handed to them on a silver platter and, and Harborside. Now state households is that, and we’re just gonna continue to refine the business. We’re gonna do the drive profitability and integrate what we’ve done.

[00:17:18] And we’re gonna be ready to start talking to those guys, but we’re, you know, not quite there yet, but we’re getting damn close.

[00:17:26]Bryan Fields: How did you both have the same name? What was the, was there any sort of overlap.

[00:17:31]Matt Hawkins: Cresco was Latin for grow and I just Googled it back. Infourteen it turns out they did

[00:17:37]Kellan Finney: greats

[00:17:38]Matt Hawkins: alike.

[00:17:39] Yeah. And then we finally started saying back in

[00:17:46] S’s ridiculous. Getting confused one another and you know, they’ve got a brand we weren’t, so we weren’t naive enough. We were tired of being thought of as Cresco labs as, uh, you know, private equity. [00:18:00] And, you know, I think it was flattering for both of us, but at the same time, it wasn’t it’s time to go do our own thing.

[00:18:07] And we just said, look, our brand is our track record and we’ve got a good one and we’re gonna change our name.

[00:18:12]Bryan Fields: From a re from a retail investor standpoint. Uh, is there any sort of words of, of guidance you can provide for them? There’s been some anger and some confusion on Twitter about the current state of the markets, but in my opinion, you know, if you’re, if you’re confident in an operator and investment at a higher valuation at a lower one, you should feel even better.

[00:18:31] But given the current status, obviously it’s hard to feel that way. What would you say to those people?

[00:18:40]Matt Hawkins: I would say, if you’re committed to the industry and you have some money that you want, you know, put into the capital markets and, um, just deploy it, but stop looking at it because the reality is is that it’s this way until something happens legislatively. But when it does, it’s going to be, [00:19:00] you know, engaging and we’re not too far off from the same banking.

[00:19:06] We’re not too far off, uh, from hopefully something at the federal level could be 3, 5, 7 years away. But I mean, we think there’s so much value in, in not only the public companies, but even more so in some of these private companies. So we think the best time to be investing in cannabis is right now,

[00:19:26]Bryan Fields: is there a specific

[00:19:27]Kellan Finney: portion of the supply chain that you’re more interested in as from investment perspective?

[00:19:35]Matt Hawkins: Um, no, but I would say that the, probably one part of the sweat chain that we’re. We’re not interested investing in, it’s just, uh, cultivation all by itself. Um, it’s, it’s in

[00:19:58] for, [00:20:00]

[00:20:01]Kellan Finney: you’s a portion of the industry that needs, uh, more investment in a specific area of the supply chain to kind of help the industry move forward.

[00:20:11]Matt Hawkins: Um, that’s hard to say. I don’t think it is. Um, I don’t think one is, you know, more needed than the other. Um, it’s a, this is a, you know, a situation that’s is, you know, throughout the entire every sector industry.

[00:20:33] Um, and to your point earlier about having you. Robbing Peter to pay Paul to try to, you know, buy more product or, or distributors trying to receive capitals. They can buy more brands. I mean, it doesn’t until there is a, you know, a, you know, working capital availability, it’s, it’s gonna be tricky. But the amazing thing is is that this is still a, you.[00:21:00]

[00:21:00] $30 billion business, uh, domestic industry right now with, like we said, 30 to 40% of the market has been, um, converted. So the upside is just absolutely tremendous. And it’s only gonna get better. Like I said, I think, I don’t think we’re far away from. Say banking act passing. And when it does, you know, you’ve got banks now that are, that are starting to lobby because they want, they wanna do this.

[00:21:26] And I think, you know, commercially available loans at that point would be not too far behind the passage of that

[00:21:33]Bryan Fields: favorite under the radar operator, you think is poised to explode over the next two to five years.

[00:21:41]Matt Hawkins: Uh, well, it’s clearly in our portfolio.

[00:21:47] it’s, it’s, it’s like asking who my favorite, uh, kid is. Come on now. Everyone’s got a favorite, right? well, you’re not supposed to admit it, right. what’s theirs to,

[00:21:59]Bryan Fields: um, [00:22:00] what cannabis business or opportunity do you think is currently overlooked by eager entrepreneurs that are interested in entering the cannabis industry?

[00:22:07]Matt Hawkins: Wow. Um,

[00:22:11] Well look at Hal LA. For example, they took, they looked at a situation that was, you know, going to be a problem down the road that may not be a huge problem right now, but will be a tremendous problem. Um, sooner

[00:22:29] vision of looking past where we are now is what needs to happen when things get a little bit more, um, say normalized. Um, maybe we don’t know what those opportunities are. So having the, the vision to, to, you know, create solutions to problems that are either just beginning or about to occur are kind of where the great entrepreneurial minds go to work.

[00:22:54]Bryan Fields: What is one concept you have learned that would shock or surprise other individuals operating [00:23:00] in the cannabis industry?

[00:23:04]Matt Hawkins: Hmm. Maybe.

[00:23:09] That, um, well, I’ll tell you what else I’ll put it this way. I think there’s a misnomer that there aren’t good operators in the industry. And I would say that within the past couple, three years, we’ve seen a tremendous influx of fantastic operator to space. Look at ed Schwartz. Who’s the CEO now of, of Harborside slash statehouse ed.

[00:23:36] A former Goldman Sachs guy. He was the CEO of short COO of Patagonia. Um, then got it. You know, there was, uh, calx and he was CEO of urban leaf. I mean, he’s got track record of success, both inside and outside the industry. And so what’s great for investors like us is the industry is now mature enough to where you can underwrite operators based on their success, both outside and [00:24:00] inside the.

[00:24:00] Um, that’s just part of the maturation process of, of, of the industry. Cause it’s still so nascent, but getting easier to navigate.

[00:24:13]Bryan Fields: It’s been around for almost eight years. What did you get? Right. And most importantly, what did you get wrong? Oh, shit.

[00:24:23]Matt Hawkins: Well, we got right. What we got right, was that this is a real industry in that we’ve returned a tremendous amount of capital for our investors, um, and fund one, fund two and fund three. Aren’t far behind, um, I’ve built a team I’m proud of. I’ve got two amazing partners. Um, and it’s a joy to go to work every day because our team is really, really special.

[00:24:47] And, um, Probably let’s see biggest mistakes. There’s too many to even think it, the deals we passed on are, are, you know, [00:25:00] thinking evaluations are too high upsell for three or four of that. But, uh, you know, there’s and we made decisions on some deals that didn’t pan out. But at the end of the day, we’re a, you’ve got 20 plus investments in each fund.

[00:25:12] And. As much as I hate to admit it, you’re you’re gonna make, you’re gonna have

[00:25:19] any other investor. We want every deal to work out, but that’s not the case.

[00:25:25]Bryan Fields: Let’s do a quick, rapid fire, true or false Texas will legalize cannabis by 2026.

[00:25:32]Matt Hawkins: Yeah. False. It depends on well, that’s like, that’s actually not true. It depends on if Dan Patrick’s in office. Who’s our Alto. The answer is it will not, if he’s not in office, then potentially will at least have a more robust medical program.

[00:25:51] So

[00:25:51]Bryan Fields: is that a true or false

[00:25:55]Matt Hawkins: caveat? It’s all. Dan’s [00:26:00] your gut. He’s gonna be there in little. I I’ve Al I’ve always said that. I think it’s gonna be legal federally before it’s legal in Texas. Um, Go

[00:26:08]Bryan Fields: ahead. What under the radar state, do you have your eye on?

[00:26:14]Matt Hawkins: I don’t think there’s really any under the radar state.

[00:26:16] I mean, every, every state never a point now where you pretty much know which states are either, you know, have gone or are going. It’d be great if Florida could go wreck sooner rather later. Um, but you know, with states on the east,

[00:26:42] almost two out three Americans living in a state where there’s some type of legalization, I mean, that’s huge and what’s happening at the, and you, and you can see it at the political level. These knuckleheads Washington realizing that their constituents want this fast. And if [00:27:00] we can just stop getting the partisan politics and realize we can all come to the middle and realize two very simple things, we both want some social reform.

[00:27:09] We both want there to be, you know, commercialization, easiness for the industry. Stop putting them both. together Don’t make this either or ridiculous. And they’re just too stuck in their ways and too stuck on they’re either far right conservative or far left. progressive You Can’t see what you’re dealing with I think that’s starting to change the louder voices in the middle are starting to say hello wake up and other than just success.

[00:27:38] But this is a very, very good example of, of a industry that’s been used as a pawn and all these, you know, You know, political bullshit games that are being played in DC, and it’s just, it’s getting louder and louder to the point to where I think we’re, we’re getting closer than we ever had that

[00:27:54]Bryan Fields: psychedelics has a medicine.

[00:27:56] Yay. Or nay.

[00:27:59]Matt Hawkins: Oh, for sure. [00:28:00] Yay. It’s not for us this point, but I think, um, absolutely a, a wonderful Medica tool. I just think it’s entirely different world than the cannabis world.

[00:28:13]Bryan Fields: Favorite product category that you think will explode over the next five years,

[00:28:22]Matt Hawkins: man? Um, well, we’re gonna see a lot of things change in the banking world. We’re gonna see a lot of things, uh, you know, payment processing, um, You know, obviously ease of lending, you know, underwriting, all these

[00:28:54] things and tools, a lot buy for them to basically buy books of business on. Any of those things. I just mentioned as [00:29:00] long as they’re not as I call ’em bandaid solutions, if they’re real sustainable platforms that, uh, benefit the industry and the, uh, uh, financial institution, then you know, that’s gonna be something to keep your eye on.

[00:29:15]Bryan Fields: What causes more disruption in the cannabis industry, interstate commerce, or federal legal.

[00:29:20]Matt Hawkins: Interstate commerce 100%. I think the, my personal opinion is that ultimately we’re gonna see a situation where it’s gonna be quasi left up to the states and you’re gonna have states, you know, fighting hard for that tax revenue.

[00:29:36] They generate it there. Um, you know, in house at their state and they’re not gonna wanna give that up. And so, uh, that, that is a, that’s gonna be a really tricky thing to overcome. And I certainly am not smart to do that. Right. What year

[00:29:54]Bryan Fields: do you think we’ll have federal legalization?

[00:29:58]Matt Hawkins: Um, [00:30:00] I think we’re, I mean, I can’t do anymore than just say, I think we’re three to seven years away.

[00:30:04] It’s not best I can do. I just think it’s gonna be in the whole period of our third fund. I like it

[00:30:11]Bryan Fields: since you’ve been in the cannabinoid industry, what has been the biggest misconception,

[00:30:17]Matt Hawkins: um, that it’s a, you know, get rich quick type situation. Um, this is, these are, these are hard working companies that have been forced with tremendous headwinds to build their businesses in.

[00:30:33] Industry that is, um, you know, harder, harder to convert than people think. Um, but by the same token, it is something that is, you know, people that have worked hard and will work hard, are gonna get extremely rewarded because of the size of magnitude scope of this industry. Before

[00:30:53]Bryan Fields: we do predictions, we ask all of our guests, if you can sum up your experience in a main takeaway or lesson, learn to pass onto the next [00:31:00] generation, what would it.

[00:31:05]Matt Hawkins: Probably to go back to what I just said is the world sleeves work hard, whether it’s in cannabis or anything else, but, but this is not a get rich quick industry. Um, it takes a lot of, you know, blood, sweat, and tears to, to build companies in this space, just like it has anything else. The good news is you’re blessed with a, like I said, an industry that has already been created for.

[00:31:26] You just gotta go out there and execute and convert.

[00:31:30]Bryan Fields: All right. Prediction time. You already kind of teased it out. Matt is cannabis being used as a political paw, if so, why?

[00:31:38]Matt Hawkins: It absolutely is. And it’s because our political machine DC is an absolute disaster and it’s just, it’s like treated like a piece of pork in this, in these, you know, in the defense bills, the reconciliation packages, all these things that the safe making act has been, you know, Put in and pulled out, you know how more times we can count?

[00:31:58] What is it? Pass the house six times [00:32:00] now. I mean, it’s ridiculous. And, um, like I said, it’s gonna take the voices of the industry. I mean, we’re no different, we’ve been quiet for a while. We’re not, um, you know, we’ve, we’re gonna, regardless of what party you’re, you’re affiliated with, if you’ve got good ideas and cannabis, we’re gonna support you.

[00:32:22] Supporters, Nancy May who’s Republican in South Carolina has a, has a very simple solution. Like the states have. So leave up in the states. Republicans should be all over that because they love state route. Um, we’re against the, the Schumer bill, because he’s trying to do too much at once. He’s trying to, you know, pander to the far left with all the social equity, bells and whistles.

[00:32:43] Again, you can do them both at the same time. It’s no big deal. But, um, but yeah, it’s been a 100% political part.

[00:32:51]Bryan Fields: Isn’t it a layup though, with 70% of Americans interested in cannabis? I mean, is that the easiest thing for, let’s say a politician to kind of grab all the horns. I just am [00:33:00] shocked that, that people aren’t kind of jumping

[00:33:01]Matt Hawkins: at that.

[00:33:02] I, well, um, you know, bill Morris said it best. He, he said that, that he thinks that the Republicans are gonna steal this as an election campaign, uh, uh, platform away from the Democrats And why not? Just for that very reason, you just said, at some point, you’re gonna have to start catering to what your constituents want, whether you’re Republican or Democrat.

[00:33:24] And I mean, with what’s happening right now with the Roe Wade thing, there’s so many me, you know, misconceptions on what the Supreme court really ruled on. All they ruled on, said it’s up to the states and the states then have to be the ones to make the decisions. That’s where it’s up to us is people to elect the people at the state house that can make those decisions.

[00:33:43] But what it is, it’s, it’s also showing that there is a huge part of both parties, constituencies, that one versus the other, and the, the, the parties are gonna have to look at that, realize that they’re not speaking to their, to [00:34:00] their, their voters. And we’re an inflection point big time.

[00:34:05]Kellan Finney: Yeah. But I also think that’s why cannabis is such a.

[00:34:08] It’s used as a political pond is because it does have the support, it current it from the masses. And so they’re just gonna continue to use it back and forth to try to push other agendas because they figure if they tag it on to this, it might get some of those people in the middle to support their other agendas.

[00:34:25]Matt Hawkins: You’re exactly right. And it’s unfortunate, but it’s the reality of the world we live in.

[00:34:30]Bryan Fields: Yeah. So how do we get, if, how do we get out of this political pond? Right. Do we need to put another pond to replace the cannabis industry? Or like how, how does that kind of evolve? So to allow us to move

[00:34:40]Matt Hawkins: forward, I think we’re close.

[00:34:43] I mean, it’s, uh, louder voices in the industry, which is starting to occur. Um, we’re a small piece of that, but we’re starting to be more vocal in our political, uh, beliefs. In our political wishes, you’ve got, um, banks [00:35:00] that are wanting to enter the space. So they’re starting to, uh, lobby for that. Uh, and then I think elected officials are starting to listen to their constituencies that are, like you said, you know, sometimes close to 70% Gallup poll wanting this legalized.

[00:35:15] Um, and two outta three Americans live in the state, whereas you know, where it’s legal in some poor fashion. It’s gonna happen. It’s just a matter of where. Yeah.

[00:35:26]Kellan Finney: And I think as new York’s market comes online in New Jersey and the tri-states and maybe Florida gets passes rec you’re gonna see the total adjustable market size

[00:35:36]Bryan Fields: increase.

[00:35:37] Probably

[00:35:38]Kellan Finney: maybe even a hundred percent. Um, and when it, when it gets to be that big of a market, I mean, money is gonna do its thing and it’ll be pushed forward in my opinion.

[00:35:49]Matt Hawkins: Great. That’s

[00:35:51]Bryan Fields: so Matt, for our listeners, they wanna get in touch. They wanna send you decks for investment. Where can they find you?

[00:35:56] Um,

[00:35:57]Matt Hawkins: uh, EUC [00:36:00] partners.com. Uh, you can send me a [email protected]. Um, Yeah. I mean, we’re, we’re still looking at deals. We’re still raising our third fund. Um, incredibly excited about what we’re doing. Um, you know, despite all this talk, I mean, we’re, we’re incredibly bullish on where the industry is going.

[00:36:20] I mean, all these are opportunities, not, not really problems there means, like we said, we’ve been operating, you know, in this environment since we started. So it’s exciting that we’re getting closer to, to, to do a change. It’s only gonna change for better. Absolutely.

[00:36:34]Bryan Fields: Yeah. Now is the time to move forward.

[00:36:36] Thanks so much for taking the time. Matt. Appreciate the conversation.

[00:36:39]Matt Hawkins: You bet guys take care.

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!

This week we are breaking down behind the scenes look at when Canada legalized Cannabis and the forward look to global trade negotiations. 

We discuss:

• How Canadians legalization violated international treaties
• Why Consumption Lounges could be a massive opportunity 
• How future global regulations might not include the United States 

About Nathan Mison:

Nathan Mison is a Founding Partner of Diplomat Consulting. As the former Vice President of Government and Stakeholder Relations at Fire & Flower, he was one of the first employees for the company, helping guide it through legalization and into its place as Canada’s largest independent cannabis retail company. Nathan is the co-chair of the National Cannabis Working Group for the Canadian Chamber of Commerce, a board member of the Alberta Cannabis Council. founding member of NorthCanvas, an ancillary cannabis incubator, a member of the Alberta Cannabis Stakeholder Group and a founding member of the Alberta Cannabis Retailers Association. He has a BA in Political Science and Philosophy from the University of Alberta and has volunteered his time as the Past President of the Valley Zoo Development Society and is the co-founder of Politics on Tap.

This show is presented to by 8th Revolution:

At Eighth Revolution (8th Rev) we provide services from capital to cannabinoid and everything in between in regard to the hemp & cannabis industry. Our forward-thinking team can diagnose, analyze & optimize every detailed nuance of your company to keep your business safe, smart, and profitable. Our flexibility and experience combined with ongoing research create unique insights into how to best grow your market share. Contact us directly at [email protected]

Bryan Fields: @bryanfields24

Kellan Finney: @Kellan_Finney 

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[00:00:00]Nathan Mison: What’s

[00:00:02]Bryan Fields: up guys. Welcome back to the episode of the dime I’m Brian Fields. And with me as always is Kellen Finney. And this week we’ve got a very special guest Nathan Meissen, president and founder of diplomat consulting and co-chair of the national cannabis working group for Canadian chamber of commerce.

[00:00:18] Nathan, thanks for taking the time.

[00:00:20]Nathan Mison: How are you doing today? I’m pretty great. And life is pretty good. Lots of fun things going on in the world. So it’s a lots of time and lots of change in the cannabis sector and beyond. So going to be a part of it, excited, dive into a bunch

[00:00:32]Bryan Fields: of topics. Kellen, how are you doing?

[00:00:34]Nathan Mison: I’m doing well.

[00:00:35]Kellan Finney: It was a lot of snow on the ground out here in Colorado, and I’m really excited to talk internet.

[00:00:40]Bryan Fields: Yeah, I guess for the record, Nathan, you’re located north of the border. So I don’t know if that goes for either the east or the west Kellen. Do you have a. I think he’s in

[00:00:48]Kellan Finney: Toronto, it’s east, if he’s in Vancouver, it’s west,

[00:00:51]Nathan Mison: that’s right. And the rest of the country doesn’t matter in Canada. So don’t worry. It’s just all blank space. Then the rest of Canada is the only two places that [00:01:00] matter. We can also put Montreal in there as well. So yeah. They’re welcome

[00:01:04]Kellan Finney: to have an east coast versus west

[00:01:06]Nathan Mison: coast, a cold

[00:01:08]Kellan Finney: thing

[00:01:08]Nathan Mison: going on.

[00:01:09] No, it’s funny because Canadians where we would have to make everything a little bit more difficult. It’s central Canada, which we’re Ontario and Western Canada. Cause the east Canada is that Atlantic. So we even add another layer. So we make it more boring in true Canadian fashion while apologizing for it.

[00:01:29] So I’m sorry that I brought that to the table.

[00:01:32]Bryan Fields: Amazing. So Nathan Farr listeners can give a little background about you and how you got into the Canada.

[00:01:37]Nathan Mison: Yeah, so thanks very much. It’s been an exciting ride having a great opportunity to help in the cannabis space from legacy. So legacy cannabis is defined in Canada.

[00:01:47] So Vancouver, Canada had a very unique circumstance. We were moving towards legalization in Canada. But what Vancouver did was actually approved municipal retail. For cannabis prior to actual [00:02:00] legalization. So you had a groundswell of stores that actually were popping up that were selling cannabis that was not regulated federally and that is classified as legacy Canada or cannabis.

[00:02:10] So I was helping some of the legacy cannabis retailers come into the legal sector, which as you can imagine, was an incredible transition and difficult to do because when you’re used to no taxation and knew no rules, except at a municipal level, coming into a regulatory environment that a municipal provincial and federal level that is as difficult as opening a nuclear power plant was a little bit hard for those retailers to decide that they wanted to carry it through.

[00:02:35] But it really spurred the opportunity of what was coming in Canada. And because we were the first G seven and the first , I always viewed this as an opportunity. If Canada didn’t screw it up is that this could be our internet because it was such an economic opportunity that was manifesting here first, where the world would look at us first and then spread it out.

[00:02:58] And we’ve seen that the case, like when we [00:03:00] started legalization in 20 17, 2 countries in the world, we’re talking federal legalization, Uruguay in Canada. Now 59 nations around the world are going through legalization. And the interesting thing from a Canadian was that we had to build our own domestic supply chain.

[00:03:15] So there’s lots of interesting opportunities for Canadian expertise to come abroad. And I wanted to be a part of that because I thought there was some really interesting ways for us to help re write rules at a muni at a city. Providence state level and at a federal level that made sense.

[00:03:30] So I joined with fire and flower. As one of the founders, I was the first employee in Western Canada for them. And I think employee number four overall in, for four years, they have gone from, literally selling ether. Like this is coming. You have to believe it’s coming to 101 stores across Canada, four stores in the United States.

[00:03:50] And they’re in, are now partnered with circle. K. So the 16,000 stores worldwide that circle K has potentially in the future could have fire and flower. So being a part of a company that went [00:04:00] through that kind of growth with that kind of parent that a comma came on board was an incredible opportunity to help write the regulatory framework at the city provincial and federal level.

[00:04:10] And so I was very involved in helping do that running their government relations, regulatory affairs, And communication sides for fire and flower. And they really afforded me the opportunity to help set up a number of the provincial associations as well as the federal association. So that’s you threw it out there.

[00:04:26] Why I became the co-chair of the national cannabis working group of the Canadian chamber of commerce. I was the past chair of the Alberta cannabis council and the Ontario cannabis policy committee. So they really afforded that up. So that opportunity for us to help write the rules, which cannabis retail, or was written on that it’s a spurred some incredible passion in me about what the economic sector and the opportunity that it can be.

[00:04:48] And I don’t know if you guys saw the Deloitte report that was just dropped on Monday out of Canada, we had talked about some pretty fricking big numbers and some pretty exciting opportunities that maybe this is our [00:05:00] internet, if we don’t screw it up. So I think there’s lots of opportunities to represent that, you know at a municipal provincial state and international.

[00:05:09] That doesn’t happen very often. So it’s been a crazy ride and to see the explosion and acceptance of cannabis, pretty exciting.

[00:05:15]Bryan Fields: Yeah. It’s gotta be exciting. And I want to stay with kind of the original framework that you were putting together. Obviously we’ve talked about when you’re leaning on other previous policies like New York who can lean on California and Denver to do the right ways when you were in that room for the first time.

[00:05:30] And you’re saying it’s only you and another country. There’s no other countries you can lean on for framework of her references. So that has to be another layer of complexity and challenges because you’re not only fighting the stigma of the unknown. You don’t have anyone to lean on and say, look, they’ve done it successfully.

[00:05:43] This is what we call.

[00:05:43]Nathan Mison: And big up Uruguay, right? But your way is not Canada. So Canada doing it was going to be the basis of probably what everybody else like since Canada went through the legalization process and just talked about it and went from two countries in the world to 59, it was the first [00:06:00] Commonwealth nation that did it. There’s now 24 Commonwealth nations that are going through cannabis legalization. Right now. They’re probably gonna use common law based on the Commonwealth practice of Canada law to be able to do it. And I think it’s a really good point.

[00:06:14] When you do something domestically, the unintended consequences internationally are so profound. Sometimes that it impacts the follow-up. So just a quick example on that. The federal liberal party led by prime minister, Justin Trudeau, who pushed this initiative forward. This is probably one of the most significant social policy or economic policies.

[00:06:37] When people look back at he’ll be known for, right? This is building a worldwide economy that has built on, but it was fricking hard to do that because you got to push that down through three orders of government, right? Till you get the federal to legalize, then you have to have the province, build the distribution system and the retail environment.

[00:06:55] And then you have to have the cities decide how they’re going to zone it. Can it be close to [00:07:00] daycares, schools, libraries, all of that stuff. But it was, I think one of the really unique things is we were in violation of three international treaties when we actually legalized cannabis Including the controlled substance treaty, which is a little bit of a big deal when it comes to international policy, because that’s how you move drugs across the country are across the world, including pharmaceuticals.

[00:07:24] So China and Russia who had fairly significant negative feelings of cannabis, if they wag their finger at Canada and said that we were in violation, pharmaceutical drugs, could have been to stop being sent to Canada because of our legalization. So what happened is we legalized then the federal government was like, we didn’t legalize, right?

[00:07:45] Like it pretend we didn’t do anything and then get the province and the municipalities to do it all because they didn’t want to piss off the international consequences of what it would mean. And it’s interesting how sometimes how, political sensitivities and cover [00:08:00] our own ass when it comes to big decisions that sometimes politicians make that have huge consequences, both economically and society turn out to be really good things.

[00:08:10] So their decision of the Canadian federal government to lower its eyes actually meant we had to build a domestic supply chain because we were establishing a completely new domestic market for cannabis legalization from production to retail. But everybody forgets about lawyers, accountants, building.

[00:08:29] Who’s going to wrap the windows, who’s going to do security. What are the computers that are going to hold that data system, who is doing point of sales? Who’s doing merchant of financing, all of those other pieces, but what’s really crazy about that is that’s now businesses that Canadians can actually.

[00:08:45] And export to the world because let’s be honest, cultivation on retail is tough to take to the world because you have regulatory environments, advisors, and ancillary businesses. They can go wherever the hell they want. So the economic [00:09:00] opportunity, and now that we’re finally lifting our eyes up and saying, oh yeah, we did legalize.

[00:09:04] Okay. You can pay attention to us again. Is creating some really exciting opportunities for Canadian businesses and Canadians to offer that that opportunity abroad. And that’s a really exciting possibility to create a regulatory framework that looks like. We’re domestic businesses know how to work in internationally and scaling is not something that Canadian businesses are known very well for internationally.

[00:09:27] So it’s a really exciting time where if we, again, don’t screw it up, this could be our internet kind of thing. I have a quick question.

[00:09:34]Kellan Finney: How much of an impact did working at fire and flower have on your ability

[00:09:40]Nathan Mison: to speak

[00:09:42]Kellan Finney: accurately in these conversations when you guys are drafting the regulations and putting these

[00:09:48]Nathan Mison: rules in place?

[00:09:48] So I think it’s a great question because, When you’re building relationship with regulators and politicians, they of course know you’re coming in with a slant, right? Like they know that you’re advocating for a [00:10:00] municipal you a mutually beneficial solution that perhaps gives you a preference over others.

[00:10:07] But if you think about how they’re going to sell it, how it fits in with Arizona, And how it actually benefits all of the sector. There is opportunities to see significant advancement in that and because the sector was so new, and because it was start stop at the beginning of cannabis legalization, like there was nine stores in Alberta and then it was like, whoa, we don’t have enough domestic supply.

[00:10:31] We’re not going to approve any more retails stores for eight or for nine months. To have the supply catch up. Now we’re like, there’s too much supply. And now there’s too much retail stores. So it was interesting because you were telling people like, Hey, this is coming. And they’re like, wow, we don’t believe you.

[00:10:47] No. There’s not enough supply. There’s 9 million square foot facilities that have been built. There’s an extra 1.2 billion grams in Canada of cannabis right [00:11:00] now that cannot be stolen because our domestic market can’t handle it 1.2 billion cramps. It’s a really good point.

[00:11:06] You have to advocate for the middle, show them that you understand their points of view and give them speaking points that is a win for them and a willing for your company and the sector you’re looking to establish. And I think, the fact that fire and flower was so generous in letting me and financial contribution and setting up a lot of the associations that represented the cannabis sector at a provincial and national level.

[00:11:33] It allowed us to have a diverse voice while still having intrinsic ties to one player. And I think that was been very beneficial as well. Regulators often just want a solution. And if you’re willing to put in the work to help them get there, they’re willing to listen. Even though that they know that there might be a little bit of biases in there,

[00:11:55]Bryan Fields: I want to stay on that topic because it’s so interesting. And I never really thought about like the international, pure [00:12:00] pressure that would have been sued if they turned and started wagging their finger. So is that a consideration before that’s legalized? Do you think that’s like a post, oh, I didn’t realize that this was going to be received so negatively.

[00:12:11]Nathan Mison: Oh no, that’s a great question. I, it’s interesting in the fact that it’s a great question. So there’s two different elements in most policy development, right? Politicians and bureau. So we all know that the bureaucracy might’ve been running around in circles, but their hand above their heads screaming, like they were on fire, that we were in violation to that stuff.

[00:12:32] And the political class could be like, we made a promise, let’s get it over the line. Cause we’re pandering the 18 to 35 year olds and we’re going to make this happen, hell or high water. And the guys who are running around in circles that are screaming, they can take care of the international consequences because I don’t even know if I’ll be here in the future.

[00:12:48] I think you have to find that happy balance between the two. There was some movement in other jurisdictions to already see cannabis move. Australia was talking about it and New Zealand was talking about it. Germany was talking [00:13:00] about it. South Africa was talking about it.

[00:13:02] Mexico was talking about it. So I think that’s a really, that was very beneficial. And again, I think it’s also quickly just important in the Canadian context to understand cannabis legalization came through the judicial. It was patients suing for access to better medicinal cannabis. And because we have common law under the Commonwealth, that is judicial precedent in all Commonwealth nations.

[00:13:26] So when the south Africans legalized cannabis through their Supreme court ruling, it was based on the Canadian Supreme court case. So they knew that the ball could have been rolling at that point. So I think it was like, oh shit, this could be a consequence. The ball’s already out of the thing.

[00:13:46] We made a promise. Let’s go get those 18 to 35 year olds. And hopefully the bureaucrats can steer us out of the darkness if we get in too much trouble. Yeah.

[00:13:54]Bryan Fields: So that’s such a complicated puzzle pieces of such situations and [00:14:00] personalities and political understandings that I’ll never even be able to probably come from.

[00:14:04]Nathan Mison: And the thing is just as a quick aside on that is the world health organizations in the United nations in 2020, I’m sorry. Late 2019 did amend the controlled substance treaty to actually exempt CBD and ad declassify, classify cannabis from a class, a felony, right? Or as a class, a inhibitor.

[00:14:27] The also had been advocating at some of the organizations with the treaties that specifically if the Russians and the Chinese got really mad at us, there was movement to change some of that international treaties. And I’m sure that went into the calculus behind the scenes with bureaucrats who were running around and screaming that firefighter world’s on fire.

[00:14:47] So it was intellect to your point. It’s a complicated web, and it’s a bold statement for a country to go first in that environment and then have everybody chasing it. It’s it’s [00:15:00] interesting because the rules are so strict in Canada because it was easier to sell strict rules that you could roll back.

[00:15:08] And that’s one of the environments that we now find ourselves in.

[00:15:12]Bryan Fields: Yeah. It’s a lot easier to loosen the restrictions than it is to be like, put them on first and then be like whoa. We got to tighten this up because you’ve got to walk back that experience and change the customer perception as well as the business operations.

[00:15:23] So staying, yeah. One

[00:15:25]Nathan Mison: was a great example of that Colorado with the animals, right? Like the fact that there was no edible cap at the beginning, people were buying a thousand milligram cakes and then all of a sudden it’s oh my God, we shouldn’t give a thousand milligrams. It was like, we have to lower that a political rule that, and a bureaucratic rule is always give easier to give to the citizenry, then take something away.

[00:15:45] So make it as strict as possible where you can lose it in time. And I think they use some of the Colorado example specifically in that circumstance on our Caltech cannabis policy,

[00:15:54]Kellan Finney: In Florida definitely did where they wouldn’t didn’t even allow you to buy canvas flower to smoke. Which [00:16:00] is the industry,

[00:16:00]Nathan Mison: It’s wild.

[00:16:03]Bryan Fields: Do you think there was an economic influence or an economic kind of major point behind it is saying, Hey, if we do go first, we can capture like a bigger opportunity to position the businesses for potential exposure. If and when the other countries follow suit or you think it was Hey, we think this is a good idea.

[00:16:18] We should do it because it can help the citizens.

[00:16:21]Nathan Mison: I think that’s a great question. And the answer is categorically. No, they did not care about the economics, because again, this was a health Canada led thing because of a Supreme court ruling. And that’s been one of the worst things that’s actually happened for the cannabis sector, because when you have to go up against people who believe reefer madness, that you have to go up with people who are trenched in the tropes of the past.

[00:16:47] One of the ways to crack that. Hey, this is generating $43 billion of economic impact and 151,000 direct and indirect jobs in the last three and a half years, and has continued to grow during COVID as perhaps one [00:17:00] of Canada’s greatest COVID economic success stories. But that. An interesting thing, then I think this is a really important thing to keep in mind is there is not one provincial or federal economic mandate at one ministry or ministerial purview for the economics of cannabis, a sector that is now larger than dairy forestry, mining and automotive production has nobody who gives a shit about the jobs that it creates in this country.

[00:17:28] And I think that is one of the fascinating needing lessons that other countries have learned is if you see what Mexico did, South Africa, Australia, New Zealand, Germany, they’ve all added an economic mandate. And that’s something that Canada has given to the world because we didn’t have to do it. And the politicians realized, Hey, this creates a lot of jobs and a lot of revenue, a lot of government revenue, we should maybe build in the economics into it at the beginning as well.

[00:17:54] So I think that’s a lesson that Canada gave to the look to the world as going first, because we really [00:18:00] screwed that up here.

[00:18:03]Bryan Fields: Let’s talk about one of the challenges of advocating for some of those political stances. I know you, you have your fair share of experiences and probably some stories about maybe some vaping and some of the taxes that go into it.

[00:18:14]Nathan Mison: Yeah. Going into, ministers, board rooms and them telling you that there’s no illegal eight products in the place that you’re advocating for. And you’re like, oh, minister, please tell me more. And then they’re categorically tell you a legal cannabis is not in this jurisdiction. And you perhaps open up a large app that you can order cannabis from illegally and you order vape products for them and to be delivered to that ministerial boardroom and then hit refresh over and over.

[00:18:49] So the minister can literally see the dot, moving closer and closer to be delivering a legal cannabis to his office in a legislative building is pretty [00:19:00] emphatic on your advocacy point. It’s really fun to have those stories because it puts a real world example to the level of ignorance, arrogance and education that the cannabis sector had to provide to people who are so oblivious to actually what.

[00:19:17] The sector is trying to displace and crate too. And I think, that’s a simple example where it was literally somebody telling you like it doesn’t exist. Then it’s we legalized to this place, a sector that had an 80 year headstart that contributes six and a half billion dollars to the economy each year from your own federal stats organization.

[00:19:39] And you’re telling me it doesn’t exist because we’re in this province. Come on. So I think there’s lots of things that, you know, that it seems ridiculous in con in hindsight, but it shows the work that the cannabis sector has had to do to provide even that baseline of education. For the [00:20:00] people who are making the decisions on how the sector actually operates and legislated under that they have zero idea about what the sector is, what it is, how it works, what you’re working towards.

[00:20:11] And that’s probably a lesson that as the state’s pushes forward on legalization or other jurisdiction, the, there has to be some education on the difference between illegal and legal, so that policymakers understand why you’re making a move in that direction and the economic opportunities that came for that because Canada failed in that regard.

[00:20:33] And that’s probably a lesson that we can again, share to the world because it made advocacy much harder. Isn’t that

[00:20:40]Bryan Fields: frightening though? Like the fact that the people who are making the rules have no idea what’s going on. I love going back to the example of governor Ricketts of Nebraska. If you legalize cannabis, it will kill your kids.

[00:20:50] And I just can’t get that out of my head. How in this day and age to see say something like that, unless he’s a hundred percent tunnel visioned in, or someone’s [00:21:00] provided him a talking script and he’s this is what my lobbyist want me to say. This is what I mean.

[00:21:05]Nathan Mison: Oh, my God. Wait. It’s also interesting.

[00:21:09] The changes in attitude when money starts to come involved, when Illinois tax revenue showed that they were making more money off cannabis than they were on alcohol, it was testing out. Many states started to be like, Hey whoa, wait what they, what was that? You were saying more money than alcohol.

[00:21:29] We like more money or, form a police officers who at one time in my own country said that cannabis was the same as murder. And they now own cannabis companies. Like it’s interesting how things can evolve through the process. So what I think is, as we move through normalization and societal acceptance, some of those.

[00:21:48] Statements that are made, that people will look back and realize, oh man, I was really stupid or ignorant saying that hopefully they have enough self-confidence in themselves to realize that was a really stupid thing they said, [00:22:00] because it’s not the same, but it does leave an interesting conversation from a policy point of view.

[00:22:05] And I would imagine that considering who you guys are, that’s an interesting one. I’ve always thought it would be really interesting to do an economic analysis on a cost of government on a cross-comparison between alcohol and cannabis as a new brand. I would love for somebody to fund. I would imagine I’m probably going to get some unique feedback from maybe some of the people in the alcohol and cannabis sector, if you want to do a true cost to society on a neighbor and let’s actually have a foundation of information that we can cross reference against each other to make good policy decisions.

[00:22:37] Because I don’t know about you. I don’t see a lot of people fighting at the end of the night when they’re high over a pack of Doritos that perhaps you might see in with other indie or taking up hospital beds goes over consumption. So I think there’s some really interesting things that as the sector continues to evolve, we can see some good research, good ballsy development.

[00:22:56] The only thing that’s

[00:22:57]Bryan Fields: happening there is those people are falling asleep on the [00:23:00] couch.

[00:23:03]Nathan Mison: Yeah, that’s right. Netflix and chill actually means Netflix and sleep, they still call them. Yes. I also don’t think

[00:23:10]Kellan Finney: that we probably don’t need to conduct the experiment as far as the cost on society, when you compare alcohol to cannabis.

[00:23:17] I think it’s pretty cut and dry personally, as far as, I don’t know anyone that’s ever blacked out on cannabis and made really poor decisions, so

[00:23:26]Nathan Mison: we’ll just leave it there. But it would still be interesting, but so that’s a good, but it’s an interesting point.

[00:23:30] And it comes back to the story about the vape, right? Like vape doesn’t, isn’t illegal in my province. It doesn’t exist. When you’re facing with that level of. Misunderstanding. We sometimes have to show the cost comparison because they understand one side because it has 80 to a hundred years of familiarity and they have no reference to the other side.

[00:23:53] So we have to draw that direct comparison so that there’s an apples to apples conversation so that we can make better [00:24:00] policy from a common level of understanding.

[00:24:03]Kellan Finney: And that understanding has to come from a third party. Unbiased

[00:24:07]Nathan Mison: organization makes sense.

[00:24:09]Bryan Fields: Yes. There’s like bunch of layers of challenges here, right?

[00:24:12] From a political standpoint. And maybe Nathan, you can probably weigh in better than I can. I’m just make some assumptions here is that if you’re a political figure who’s pushing for certain policy and let’s say out big alcohol is one of your biggest fans. They might not want to see cannabis take some of their market share because when I’ve seen some of the estimates for here in New York and some of the potential numbers are just mind blowing to begin, I don’t even know how they’re making those numbers because right.

[00:24:35] There’s adoption for current cannabis consumers, which they don’t know how many people, they don’t know what’s going on in a black market standpoint, but also the users who are now consuming alcohol on a regular basis that might migrate over and capture some of that market share. I don’t know how you can put a number on that.

[00:24:49] And if I’m an alcohol company out, I’m frightened by the concept because the hangovers terrible, right? It’s quote unquote makes you feel bad. You don’t want to get up in the morning and worked out, but from a cannabis [00:25:00] standpoint, it alleviates that burden. So there has to be some fear from alcohol side that like they might lose market share and.

[00:25:07]Nathan Mison: So a couple of things that I think I, I agree with most of the things, but look at the play of alcohol companies into the cannabis sector, constellation with canopy, Molson, with trust Boston brewing with looking to enter into the cannabis space in Canada. There is a natural affiliation to that.

[00:25:26] And I think, we’ve heard some of the decelerated consumptions of beer in United States with a younger population of 18 to 13 or 18 to 35. But that’s a demographic that consumes cannabis at a higher level than other demographics. You can start making unique financial decisions on how to play in both worlds to both demographics, to continue to move it forward.

[00:25:49] And I think you really raised an interesting a point and I, one of the greatest opportunities that the Canadian cannabis market has, but I think a worldwide market abs is the establishment of a cannabis, [00:26:00] tourism and hospitality environment. So the number in Canada is 21.5 to 25% of Canadians consume cannabis based on, based on a number of different numbers.

[00:26:10] So in a country of 39 million people that’s not an insignificant population base, but it’s interesting if you think about it from a policy point of view, people aren’t fighting for the 75 to 79%, of which, by the way, the statistics are the statistics on. Most of that demographic would be interested in trying cannabis, but through ingestibles right, 66% of first-time cannabis users want to have an adjustable experience and that’s not like a combustible, that’s a drink.

[00:26:42] That’s a mocktail that has a nice letter, a distillate. That’s a food based experience. But as a measure dosing that they can have. That and to the conversation that we’re having before about that parallel between alcohol and cannabis, that they can make a direct comp or parallel to, [00:27:00] oh, if I have one shot of something, I feel the effects in eight to 12 minutes.

[00:27:04] Okay. If I have this mock tail with this Iceland, I feel the effects and eight to 12 minutes in the same environment that I can have a drink. That’s when we start to see a greater societal use of cannabis, I think in that regard and considering COVID has completely beat up the tourism and hospitality.

[00:27:25] So I can, I know the statistics in Canada. I unfortunately don’t know it in the states, but I’ll give you one in here. So the Canadian tourism and hospitality contributed $105 billion to the Canadian economy per year, prior to COVID it’s now down to 50 billion, right? A $55 billion. And the crazy thing about that number, and now I’m really policy peaking.

[00:27:47] So I do apologize for it is that is an over-representation of a sector that hires the most underemployed 18 to 20 five-year-olds. So you beat up a sector that is the bridge to get younger [00:28:00] people into the job market as well, by losing more than 48 or sorry, 55% market share. What an interesting opportunity in Canada, we’ll say as an example, to have a differentiated experience when the light bulb gets turned back on and people can start to travel that 29% of worldwide consumers want a cannabis experience when it when they arrive in that jurisdiction, why can’t we fill some of that $55 billion by creating a cannabis experience where 29% of the world travelers come to Canada, where the alcohol companies own some of the cannabis companies that are providing.

[00:28:40] That people can feel the effect with light. They do in alcohol, in an environment at pubs festivals, music, venues, stolen and so forth. So there’s a direct parallel. And I think that’s perhaps one of the most exciting developments that are coming for the cannabis sector. I think it’s really exciting that New York has talked about consumption loans, licenses as [00:29:00] well as Michigan.

[00:29:01] And I think it’s a really interesting opportunity for north America who has three of the biggest nations in it, right? The only three nations in it that are all in different stages of federal legalization to add that as something that they should be perhaps talking about as well. But I think to have a long winded way alcoholism has a law as a way to help steward and advocate for that kind of regulatory change with the relationships politically that they’ve already.

[00:29:30] And both cannabis on to get the cannabis or a sector further along on that adoption. I agree.

[00:29:38]Kellan Finney: I think that cannabis and alcohol need to hold hands and walk off into the sunset together. I know Brian’s shaking his head so excited to hear what he has to say after

[00:29:46]Bryan Fields: this. Yeah. Maybe in the situations where the big alcohol companies partner with the cannabis companies, then sure.

[00:29:53] It’s time. But I think alcohol companies

[00:29:55]Nathan Mison: take

[00:29:56]Kellan Finney: your experience, right? If you’re constellation and you then have the someone [00:30:00] enters, you get a hundred percent conversion rate when someone enters your pump, do you know what I mean? If they’re going to buy a beer or if they’re going to buy a THC drink, versus if you’re only selling the beer and then maybe it’s a, every other alcohol industry should take a, every other alcohol companies should be taking notes right now.

[00:30:16] You know what I mean? All right, go ahead.

[00:30:20]Nathan Mison: So

[00:30:20]Bryan Fields: I agree. I agree with that. That’s totally fine. But what about the alcohol companies don’t have exposure to that? To the cannabis companies? Those were the ones who were like, absolutely not. We need some more time. We need to build our strategy. We need to have more board meetings to discuss the same concept we’ve talked about for probably 10 years.

[00:30:37] And when we make that acquisition, then Nathan it’s time to open up the cannabis. The consumption lodges,

[00:30:44]Nathan Mison: th there are like the bureaucrats that were young are running around in circles with their hands above their head, screaming, fire, and fire before right now. But I think one of the things that’s interesting, and I think this is going to be a very different experience between the Canadian tourism and hospitality [00:31:00] sector and the United States tourism and hospitality sector.

[00:31:03] Canada will not allow cohabitation of India. You will not be able to have cannabis and alcohol in the same jurisdiction. You just won’t buy because there is not because in Canada we legalized medicinal. That then became adult use recreation. This lives at health Canada as the primary regulatory agency federally.

[00:31:28] And there is not peer reviewed research on how the two inebriates work together. We cannot make decisions that will allow those two things to happen together until we do 10 years of research innovation endocannabinoid measurements on how alcohol matches together with CBD, CBN, THCA, all of that stuff, it just won’t happen.

[00:31:50] And what’s interesting is, and this is where the Americans are going to have to make an interesting decision when they’re regulatory is the world’s going to follow Canada in that regard, [00:32:00] not the state. So in nations that will legalize pharmaceutical first and then go to adult regions like Australia, New Zealand, South Africa, Germany.

[00:32:11] So that’ll be a really interesting circumstance. Non-alcoholic. Infused with cannabis. Sure. DDT a full wine that has cannabis in it. Yup. But the two things together, you will not have them go habitated in the same locations, which is good. I could see it going where

[00:32:30]Kellan Finney: I’ve seen a couple of consumption lounge designs out in California here in Denver with the recent passing and like the way the loophole around that is they just literally put two locations next to each other and then they have to bypass between a door.

[00:32:43] And you can’t carry your cannabis, drink to

[00:32:45]Nathan Mison: your bar. You can’t carry alcoholic, drink back, but like you can

[00:32:48]Kellan Finney: go to the consumption lounge, hang out, maybe have a Doobie with your friends and then go back

[00:32:53]Nathan Mison: to the bar where the show

[00:32:55]Kellan Finney: is playing. I’ve seen it approach from that sense. But also I’ve even brought up the [00:33:00] fact that like Lagunitas and some of these other more established breweries have tried, have experimented with putting cannabinoids in their beer and the regulators, the alcohol regulators were like, absolutely not even with CBD, they literally pulled the plug on it

[00:33:13]Nathan Mison: faster than you could even

[00:33:14]Kellan Finney: imagine, and probably has to do with those laws that are those, the

[00:33:18]Nathan Mison: lack of studies that you were just mentioning.

[00:33:20] And even to your point, you’ll never have. That’s an interesting Canadian difference through the states as well, which is a good thing for your tourist market. Because as we know, flower represents one 66% of the cannabis sales currently of current sales. You’ll never have it in Canada. You will never have smoking indoors in Canada where somebody is smoking a pipe, a Hoka joint.

[00:33:44] It just won’t happen. And it shouldn’t it’s better for the

[00:33:48]Kellan Finney: industry as a whole that we’re not encouraging people to inhale things that

[00:33:52]Nathan Mison: are on fire, fundamental

[00:33:53]Kellan Finney: level. This is why I think the hospitality is such a attractive opportunity from a market segment perspective,

[00:33:59]Nathan Mison:[00:34:00] especially steward.

[00:34:00] Under tapped or uncapped demographic, which by the way, is the vast majority of the society that if we could bring them in it’s new market share new opportunity and politically motivated people who could actually represent, Hey, this cannabis thing, isn’t too bad. Maybe you’ve got out of the way, cause I’m not smoking it.

[00:34:21] I would like to go have a drink down at a pub or wherever it is. So that you could actually add that. So I think that’s a really exciting opportunity and I think 2020. Is going to see big advancements on that area in Canada and beyond on the cannabis, tourism and hospitality. And if I can hopefully play a small part in bashing my head against a wall to make through to get that happen I’ll be excited to see what we can achieve on that regard.

[00:34:46]Bryan Fields: I love the consumption lounge idea, and I think from educational side, you bring in consumers were maybe a little more fearful to walk into a normal dispensary and ask those questions. And you take them through the experience. When you go out to California and you have the wine experience and the, they’re [00:35:00] taking you through the grapes and how it was processed and all those beautiful things, maybe learn one or two different things and you feel good.

[00:35:05] You go back home and you brag to your family. I only drank, peanuts from Oregon. You can do the same thing in Canada where you go through that experience, and say, oh I got these great genetics and these strains are world.

[00:35:15]Nathan Mison: Local food, local cannabis, local chefs only in that jurisdiction is a cannabis.

[00:35:22] So we call them farm gates in Canada. They are moving in that regard, which is a similar model to the wineries, but they haven’t bolted on consumption yet. That is probably the come and in, in Canada we have the Niagara region for wine or the the Kalona area, the Okanagan valley for wine, just like you guys have California, Oregon.

[00:35:41] And you’ll see that cannabis opportunities, because again, the benefit is from a policy point of view is, oh, we did that for wine. And it was incredibly successful and bought a ton of tourists here with more money. I understand that parallel. So it’s easier for the politician or the policy maker [00:36:00] to see that and advance that.

[00:36:01] Cause to get us further to that, the more that we can find. Parallels to get the cannabis sector further ahead, the better, because that’s how we actually advanced the cause. And considering this is the third year of the cannabis act in Canada, October 17th, 2021 was the third year. And it has embedded in the act, something that was in hindsight, incredibly intelligent, which was a full legislative review of the act.

[00:36:27] We can actually advocate for the change that we want to actually lessen. Some of that stringent onus that we started with, that we talked about earlier, but we can start having conversations about Hey, can we do infuse restaurants with a dosing station or the creation of a cannabis chef or a cannabis mixologist.

[00:36:46] Now the act is open. Can we push that? We can get into that point of view. And that’s a really exciting opportunity for us to see regulatory change to get us to that environment. So it’s going to be a big year,

[00:36:58]Bryan Fields: so I want to slightly switch [00:37:00] gears on the topic standpoint. Canada’s perception of us and how they’re handling the process or the rollout of

[00:37:08]Nathan Mison: cannabis.

[00:37:08] That’s a great question. So Canadian license holders, which are the cultivators are pleased for the love of God, hurry up and federally do it so that we can push our 1.2 billion, extra grams of cannabis down there into your market. While Oregon, Washington and Colorado are like, please, for the love of God, lets federal legalization happens so that we can push our hundreds of thousands of bounds to the rest of the country.

[00:37:35] That’s an interesting circumstance. We’ll figure out how that plays out in the markets. I think bolting that on to the. Movement as well is a really interesting one because you have potentially cannabis potentially be a part of the U S MCA negotiations in the future. So you have a north American purview.

[00:37:54] Hell. Even if we just start at hemp, which we’ve approved across, now you have a north American CBD[00:38:00] and non-psychoactive cannabinoid market. That’s a really interesting point of view. I think Canadian companies and regulators have started to lose faith that federal legalization is imminent. I think, the political discourse in the states is pretty fragmented.

[00:38:16] So Canadians are looking at other jurisdictions and I say this a lot on conversations with the states and I feel bad cause I feel like I’m always like the negative Nancy of opportunity for Americans. But the fact that there’s going to be a worldwide standard. For cannabis, it probably based around EU GMP production because of the size of the European market and because the federal government isn’t involved in that conversation, it could potentially lock Canadian or American cannabis in America.

[00:38:49] Canada is starting to look at Germany, France, Europe, as a significant place to divert their attention to because the Americans [00:39:00] are trapped in their own border, but there, so I think that’s a really well, so again, it’s that Germany. They do because because we legalize the same way because it’s medicinal first.

[00:39:16] So it’s pharmaceutical grade based on EU GMP standards of production. And because the states hasn’t legalized in the same manner would that same kind of regulatory environment. And the benefit is that’s medicinal to medicinal, not recreational to recreational. So you can have medicinal products that is pharmaceutical grade flow between countries of which there’s potentially 58 around the world that are going through that process while the states is trying to figure out what it is.

[00:39:49] So you’re going to see much more attention from Americans are from Canadians regulators and. Companies to those jurisdictions, I will flag one, just one quick thing for an [00:40:00] interesting point of view. So Canada has had a fairly protectionist experience when it comes to cannabis domestic supply from outside sources to the point where Jamaica and Columbia has threatened the Canadian domestic market with protectionism at the WTO for for not fulfilling its world international treaty obligations between nations.

[00:40:22] So that is actually starting to pop off, which is going to be a really interesting thing to watch when it comes to domestic or international flow of cannabis. Because could you imagine the world trade organization leaning in on trade agreements for cannabis and the states as an asphalt, that, that table, that’s a weird thing to happen.

[00:40:40] So there’s some really interesting stuff internationally. And the states being where they’re at is really hurting their commercialization opportunities. I

[00:40:48]Kellan Finney: just have one quick question. What does the U S MCA, what does that acronym that you threw in there for our

[00:40:52]Nathan Mison: listeners United States, Mexico, Canada agreement.

[00:40:55] That’s not as sexy as it was when it was called NAFTA. That is the new NAFTA. They didn’t [00:41:00] like the name NAFTA because the feedback was us have to be in front of the other countries when they renamed it. So I literally, that was the reason for it. So it is now the United States, Mexico Canadian agreement.

[00:41:12] That is the new year for NAFTA. It’s

[00:41:14]Bryan Fields: good that we didn’t let our ego get in the way when we were naming an agreement. Being left out of those sorts of like conversations, just because we can’t get our act together is so complicated because like you were saying, Nathan, like here in the states, we’re, it’s a state, it’s a state led story.

[00:41:29] And what we don’t have as a federal level is a somewhat of an understanding of a plan moving forward. Or at least that there is, it doesn’t seem like there’s a clear one. When Canada’s looking to, let’s say, expand their operations and they’re limited with which direction they can go. They can either be passive and wait for the U S which is challenging, or they can take that to Europe.

[00:41:46] It’s a bad sign for us because there’s good opportunities as well. But from an exposure standpoint, right? The economies of scale, just based on the sheer location, that’s gotta be another layer of hurdle that the U S operators is going to fall before. [00:42:00]

[00:42:00]Nathan Mison: Yeah, for sure. I completely agree. And, but I think, America will do what America has always done very well and better than most other nations on.

[00:42:09] Build great brands and have great access to capital. So when they do come to market, it’ll be like gobble, right? You’ll have foreign entrance into those markets by acquiring other nations. They, especially, because when you go through federal legalization, you can see some of the bigs who are listed financially on large stock exchange, where they can’t get involved with cannabis because they would avail themselves off of the proceeds of crime.

[00:42:37] Move off the sideline. The other one too, that I think is under talked about, is family trusts that have vice clauses in them. You have big hedge funds and big family trusts who are sitting on the sidelines, but not watching the cannabis sector because they’re not allowed to, because it is a vice because it is not legal.

[00:42:53] I think when the, when that light turns it’ll be just acquisition, like how look [00:43:00] cookies just opened a location this week in Spain. So you’re already seeing brands move in a true way that Americans are great at Americans build better brands than almost any other nation on earth. So you’ll export brands.

[00:43:15] You’ll figure out how to work in that jurisdiction. And then you’ll acquire those domestic companies when the bandaid is ripped off or get put on that analogy is a weird one. But yeah, however that would work. It’d be a

[00:43:26]Bryan Fields: wild time when that goes down.

[00:43:29]Nathan Mison: It will be very, it’ll be very interesting because all of the money who’s been sitting on the side, we’ll just push.

[00:43:37] And the interesting thing that when you have all the money sitting on the outside is you don’t have all the places to put it. So the valuations and the stupidity that are going to come on, the other side of that is going to be pretty problematic because Canada can show you when you have speculated companies.

[00:43:56] The problem is when you get high valuation, You have to show [00:44:00] profitability and sustainability at a certain point. Then when those come crashing down together, it’s not always a good thing. So that’ll be an interesting thing to see when when that happens. And I look forward to enjoying the ride and crying on the way down.

[00:44:12]Bryan Fields: What is one idea or concept about Canadian cannabis policy that Americans wouldn’t know?

[00:44:19]Nathan Mison: That the provincial governments in almost every jurisdiction is the only wholesaler and supplier for retail. So you only have one person to buy from in most jurisdictions and in Canada, who is the government who takes money on the front end from the cultivator and the back end from the retailer to the point where that Deloitte report that came out, that we referenced earlier, show $43.5 billion of economic contribution to the Canadian economy since legalization and 15 billion of that went to tax policy.

[00:44:53] Our taxation, that is a big nut. And that’s because the government was smart, depending on [00:45:00] what insider you are and put themselves in. So you can’t go anywhere else. They’ve given themselves government monopoly where they get the set up prices and negotiate the cut on what they’ll buy for. So it’s a pretty tough,

[00:45:13]Bryan Fields: you think that’ll be the same way long-term or you think that eventually the companies will look to push?

[00:45:18]Nathan Mison: No, we’ve been pretty proud that we’ve already seen some significant change. Alberta, the jurisdiction where I live in just close there. Government monopoly e-commerce website. So in the province that I lived in, they were the only e-commerce and delivery website. They’ve now closed that so that private companies can actually have act test that e-commerce and delivery.

[00:45:38] So I think there will continue to be changes. And it’s not like the government can’t get its touch and get out of the business of being a wholesaler and distributor without taking the capital cost of it. We have lots of other sectors that we could probably point to. I dunno, like alcohol that you do the exact same thing in where you still take taxation on the top, but private sector has got to be the [00:46:00] wholesaler and distributor.

[00:46:00] So I think it’ll get there, but it made sense when it was easier to give it to citizenry than take it away. So they controlled supply at the begin. And they control the revenue because nobody knew what the hell this was gonna look like. Cause we were the first G 20 country in the world to do it. So it was a safer alternative to tell the citizens you control it.

[00:46:22] Yeah, it makes

[00:46:22]Kellan Finney: sense. Honestly, especially with an emerging market like that. And who knows how police service could have been from a startup company, that’s trying to figure it out on the fly and they don’t have that professionalism that comes with the government organization. I think it’s smart from the beginning and it’s cool that they’re able to change it now.

[00:46:39] Yup.

[00:46:40]Nathan Mison: Yup. Some of us employed are with consulting contract, so that’s also a good thing too.

[00:46:45]Bryan Fields: It probably looks really nice on an Excel sheet. They’re like, see, we’re making twice as much.

[00:46:50]Nathan Mison: Yeah. Yeah. 43.1% is the taxation on cannabis and the province that I live in. How do you displace an illegal market? When the [00:47:00] consumer, without markup at a retail level pays 43.1% before the product is even on the shelf for sale.

[00:47:07] That’s insane. It’s

[00:47:10]Bryan Fields: hard to understand that, like hearing you say that, like you just think about it from like a numerical standpoint, it’s still hard to understand. That’s

[00:47:16]Nathan Mison: crazy. That’s crazy. I I can call her

[00:47:19]Kellan Finney: even here in Colorado, like there’s dispensaries or storefronts that I’ll pay 20, 30% taxes on, but the cannabis is still cheaper now than it was 10 years ago in the legacy market.

[00:47:32] Like

[00:47:32]Nathan Mison: significantly cheaper, like insanely cheaper compared to at least in Colorado, right? Industrial agriculture’s industrial agriculture is a whole hell of a thing, right? Like when you open your and millions of square feet and acres and acres of outdoor grow, you all of a sudden have a cheaper product because now there’s more of it.

[00:47:51] So that’s a good thing for consumers, a bad thing for the growers. So that has to be the counterbalance between the two, but they [00:48:00] don’t have to worry about the

[00:48:00]Kellan Finney: feds rolling in now. That would be the kind of point, I guess

[00:48:05]Nathan Mison: they’re not going to go. I think that they’re talking 25% taxation at a federal level as well.

[00:48:10] So that’ll be interesting to see how that works out if that bill goes forward. So the taxation policy is going to be very interesting to watch it, the states. And I would recommend that American companies look at Canada cause there’s some really good stats based analysis that we would love to share so that hopefully we can help arm you with some of that policy and research to advocate for better decision making.

[00:48:31] So one of the things that you asked, what people can know about the Canadian space, that American companies don’t. We’ve done a lot of this. Give us a call because we’d love to share with you so that we can make better policies and we hopefully prevent you from falling on your face as it really hurts to fall on your face and then step up and try and fix it.

[00:48:50] So if we can work together to create a better example of what a cannabis market can be Canadian companies are happy to share that a lesson with with American compatriots

[00:48:59]Bryan Fields: since you’ve been in the [00:49:00] cannabinoid industry, what has been the biggest misconception?

[00:49:03]Nathan Mison: That’s a really interesting conversation.

[00:49:04] So I, that I didn’t support. Because I work for a licensed producer or a retailer that was seen as like one of the real white collar corporate cannabis companies that was so out in front and significant development people didn’t see that we were advocating for the entire sector. They saw that we were just advocating for better fallacies for for fire and flower and for corporate cannabis and not understanding that, to build a better sector that displaces the elect the illegal.

[00:49:35] I was advocating for as many of legacy people to come into the market as easy as possible because we want their better cannabis and you’re going to displace the elicit sector by bringing people in as quick as possible and easy as possible. And I think that was a real challenge that I got beaten up a whole bunch from people who thought, I wasn’t supportive of the whole sector.

[00:49:55] It was just the big corporate. And that was not the case [00:50:00] as I’m sure, there can be some vitriol from certain segments these days on social media and stuff like that. You could get beat up pretty good about it, but, considering argue with politicians for a living, I’m pretty lucky to have thick skin.

[00:50:11] So I only cry inside, not on the outside. That’s the only thing that matters. Yeah.

[00:50:17]Bryan Fields: If you can set up your experience in the cannabinoid space, any main takeaway or lesson learned to pass on the next generation?

[00:50:26]Nathan Mison: It’s an economic opportunity that is unfettered. My kids are going to grow up in a world where cannabis is going to be larger than alcohol and accepted by more people and utilize more diversity.

[00:50:40] Hurry up and get us there instead of fighting for beliefs from 50 years ago, that would be one of the things I would love to see. Okay. That’s well said.

[00:50:50]Bryan Fields: All right, prediction time. I wrote this one on the fly, so I apologize for mumbling it. How do we get the NAFTA [00:51:00] or formerly known NAFTA agreement to allow for cannabis sales across us, Canada and Mexico.

[00:51:07] And does it need federal legalization to occur?

[00:51:12]Nathan Mison: Great question. I am very involved with the Canadian chamber of commerce. I believe that the chambers of commerce, because they represent everybody in the supply chain, cultivators retailers and ciliary businesses is a great way to do it. I believe that the political relationships that he have with traditional economic actors representing it towards politicians who are thinking that it’s just a cannabis company coming in there and whining for better policy that they can take advantage of to the point of the past.

[00:51:41] And I would start with non-psychoactive cannabinoids, like CBD CBN, THC, because they’re already approved in all three locations. So start there and then let’s work to a neighbor is when. The next USM CA review is in 2023. Let’s roll up our sleeves and let’s get her done, right? [00:52:00] Let’s have a north American perspective.

[00:52:02] It’s on the books. You pass the farming act. We have it federally legislated and the Mexicans federally legislated. Have you heard one person talk about it? Why not? Why not? It’s just a simple question to ask. So if we put it out there, maybe we can force it to actually be a part of the conversation and from a political politician point of view, it’s an agricultural product, not an, a neighborhood.

[00:52:26] So maybe they feel safer doing it.

[00:52:28]Bryan Fields: Convinced governor Ricketts county.

[00:52:30]Kellan Finney: First we did pass the farm bill, but that did not seem to do much for CBD as far as rescheduling it or saying it’s safe or really anything it’s still in that gray area. You know what I mean? So

[00:52:42]Nathan Mison: what,

[00:52:42]Kellan Finney: we should probably figure out what we’re going to do with CBD first, and then we can move forward, but I think it does require federal legalization, honestly, at least on the U S as part, because.

[00:52:52]Nathan Mison: U S is going to just look like an outlier

[00:52:54]Kellan Finney: sitting on a table with two countries that have robust established matured [00:53:00] markets, where even when we talk about representatives, not knowing that they’re still illegal the products on the market.

[00:53:06] I can’t even imagine the ignorance that the U S representatives approach that conversation with never even having a real marketplace to, to have cannabis sales from a federal perspective. You know what I mean? And so I don’t think there is a conversation. I think the point is moot

[00:53:23]Nathan Mison: or it’s like this.

[00:53:25] Yes. Buyers and cover my eyes. So please go ahead and talk about it. Like I, I think that’s probably where that, but like jury. Is going through adult use recreation, France is going throughout and use recreation. Like these are not small other nations. These are traditional American allies who are going through that process and you’re surrounded on both borders.

[00:53:49] So it has to get there where you’re not taking a political risk anymore, and it’s a huge economic opportunity. So I think it’ll when the light [00:54:00] bulb turns, it’ll go very quickly. The question is what is the policy that you get that you have to live within? Because I think when you rush the consequences of rushing are more scary than taking the time.

[00:54:11] So that would be the one thing that I would worry about when America turns that light our, when flips that switch, what the policy will come out the other side, because the cannabis sector might advocate for the next five to 10 years, the roll back, some of the things that were embedded in the legislation during the.

[00:54:29] I agree with what you

[00:54:30]Kellan Finney: said, except the only caveat is you do have to do something. We can’t just hang out with your patient.

[00:54:37]Nathan Mison: Twenty-five years. Eventually have to take a step forward. We can’t just talk about, and there are five bills in both houses there isn’t stuff to talk about. You know what I mean?

[00:54:49] Like there’s and I think it’s isn’t the majority of American states are

[00:54:54]Bryan Fields: 63% or 68. I think it was 68.

[00:54:58]Nathan Mison: And by the way, this is the [00:55:00] most popular public policy position in the United States for the citizenry is cannabis legalization at a certain time, maybe a politician is going to be like, wait a second.

[00:55:10] So 70% of people like this, why aren’t I jumping on that? Cause I like 70% of American voting for me. So I think, sometime hopefully we’ll combine that political opportunism with common sense policy make,

[00:55:23]Bryan Fields: it seems like a layup, right? Just to think about that. Statistical standpoint, you got to feel pretty good going in knowing seven out of 10, like it, I’m not going to feel good laying here, but what I never thought about until you said it, Nathan was the international peer pressure, that kind of goes into it, right?

[00:55:37] Because if the U S is being left out of these conversations, because we can’t get our act together, besides the economic standpoint that we’ll miss out on, God knows how much money, but like it’s also an embarrassment as someone who takes themselves as like the world leader, we need to be at the forefront of this.

[00:55:51] And if we’re sitting back because whoa, we haven’t gotten our act together, it’s going to be embarrassing. So I wonder if the cabinet or the political leaders help push that a little [00:56:00] faster to be like, Hey, like these conversations are happening with, or without us, we need to do something first.

[00:56:05] So we can partake in these conversations because we would like to influence how that arrangement goes. And that might expat the timeline a little differently than I ever thought.

[00:56:14]Nathan Mison: You’re on.

[00:56:15] You’re closer aligned with Russia. and China than you are with Germany, France, Mexico, and Canada.

[00:56:22] Oh my God. Just to throw it out there.

[00:56:25] Oh my

[00:56:26]Bryan Fields: God. If I want to stinks that one hurts, throw it out there. That one hurts. That one really hurts off the clip that, and maybe remove it. Cause that one’s a little too painful for some of our listeners.

[00:56:36]Kellan Finney: Maybe our strategy is just let Mexico legalize it, then they can grow it all. And then we’ll just import

[00:56:41]Nathan Mison: it somewhere.

[00:56:44] Nancy is spinning in her grave. So I’m like, oh my God, it’s terrible. That’s so terrible. That will help our trade deficit. It’s true. I do have to run. I am really sorry. I would really love to carry the conversation that I have to jump to another one. [00:57:00] Thanks so much for your time, Nathan. Appreciate it. No problem. [00:57:02] It was a real pleasure. I look forward to having it again, guys. Absolutely talk soon. Thanks. Be well.

Editors’ Note: This is an excerpt from our Monthly Playbook. If you would like to read the full monthly playbook and join the thousands of others you can sign up below.

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!

This week we are joined by Natalie Katz and Wayne Nasby of Ocean Groves Ventures to discuss

• Israel researched backed medical trials 
• Big Pharma’s view of Cannabis
• Challenge of Education/ Marketing Misinformation
• And so much more

Ocean Grown Ventures mission is to shape the cannabis industry with revolutionary Research & Development through international scientific partnerships and pharmaceutical grade products for the benefit of humankind.

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This show is presented to by 8th Revolution:

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At Eighth Revolution (8th Rev) we provide services from capital to cannabinoid and everything in between in regard to the hemp & cannabis industry. Our forward-thinking team can diagnose, analyze & optimize every detailed nuance of your company to keep your business safe, smart, and profitable. Our flexibility and experience combined with ongoing research create unique insights into how to best grow your market share. Contact us directly at [email protected]

Bryan Fields: @bryanfields24

Kellan Finney: @Kellan_Finney 

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[00:00:00] What’s

[00:00:02]Bryan: up guys. And welcome back to the episode of the dime I’m Brian Fields. And with me as always is Kellen Fiddy. And this week we’ve got a very special guests, Natalie Katz and Wayne NASBE from ocean grown ventures, Wayne and Natalie. Thanks for taking the time. How are you doing today?

[00:00:16]Natalie: Well, thank you.

[00:00:17] Thanks so much for having

[00:00:18]Wayne: us. Great. Thank you very much.

[00:00:21]Bryan: Appreciate you guys joining and I guess for the record, your locations would be.

[00:00:26]Natalie: Los Angeles. We are in LA

[00:00:29]Kellan: it’s a west coast. Bascos here we

[00:00:31]Wayne: go.

[00:00:32]Bryan: Going to have to edit that part out count. So cool. So I’d love for our listeners to get a little background about both of you and how you got into the cannabis space, Natalie.

[00:00:43]Natalie: Absolutely. So I’ll speak on behalf of myself and my father. We kind of got into this together. Um, in 2017, we really wanted to honor my grandfather’s legacy. He passed away from cancer in 2002, and one of the biggest things in his life was being philanthropic and making the world [00:01:00] a better place for people.

[00:01:01] And he had escaped the Holocaust when he was only 13 years old. I’m one of the last boats out to what is now known as Israel. And to honor his legacy, we decided to invest in Israel and kind of. Figure out what they’re doing that are helping people right now. And it turns out they’re actually the leaders in medical cannabis research, which is something we were not aware of.

[00:01:19] Uh, it really all started with Dr. Raphael Meshulum in the sixties, but ever since then, they’ve been the world leaders in medical cannabis research. And we thought that that was the perfect way to honor his legacy is, is providing, um, a product and a solution to help people’s quality of life. And that was our biggest goal.

[00:01:36] So I am the brand manager. Uh, helping kind of create the tone and messaging of the brand, what the packaging looks like and who we are as a company. Um, unfortunately my dad, Jerry is unavailable. He is flying back from Israel as we speak right now, but we do have Wayne RCLO with us. So Wayne, you can give them some background on yourself to.

[00:01:56]Wayne: Yes. Most certainly. Thank you for that. Um, [00:02:00] uh, guys, nice to meet you. Um, my background is a little bit unique. I’ve I’ve been in a pharmaceutical biotech industry for over 30 years and my areas of expertise are really, um, GMP operations, product commercialization, anything related to compliance with the FDA, as well as, um, helping do conceptual designs and build out.

[00:02:25] Of of manufacturing facilities. So really it just encompassing all of GMP operations. And then I started early on in Amgen and then from there, um, I started, uh, co-founded a drug delivery, uh, technology company here in California. Um, and that just took off and we were just doing great stuff there as far as working with molecules and figuring out the best way to deliver them.

[00:02:52] And then, um, it was at that point. That I hooked up with Jerry and Natalie. This was around [00:03:00] 2000 and late 2017, 2018. And they were trying to, um, get me involved in the cannabis industry and taking what I had done in the pharmaceutical world and apply it in the cannabis space. So, uh, needless to say, I wasn’t really interested at the time for various reasons, but, um, at one point.

[00:03:21] I had a very, you know, mind opening event where I was given the opportunity to meet the research scientist at a very well-known university here and there. They’re focusing on, um, pediatric pediatric, excuse me, pediatric cancer. And it was just unbelievable what they were doing. And I realized then that my perception.

[00:03:47] Of cannabis, um, was completely wrong. And I wanted to focus all of my energy and trying to help develop the methodologies and the, and the, and the science behind cannabis from a, from a [00:04:00] commercialization perspective. And I’ve been doing it ever since. So it’s pretty exciting for us.

[00:04:05]Bryan: I appreciate you sharing that.

[00:04:06] And Wayne, I can hear some of that hesitation, so I don’t need to ask you if you hesitated to jump in the space, but Natalie, I want to, I want to start with you. Was there ever any hesitation to kind of come into cannabis? Obviously has Wayne really shared, there was that stigma and there still is the stigma of cannabis.

[00:04:20] So any hesitation for you to kind of attach yourself to.

[00:04:24]Natalie: Funny that you say that because something that my father Jerry always says is, you know, he would never bring me into this business just to create a rec brand for whoever gets some of the most high that is not our goal here. And while we have no issues with recreational cannabis that’s to each his own, this is truly a medical.

[00:04:41] Uh, brand that we’re promoting and that we’re focusing on and it’s really about improving people’s quality of life. So for me, it was an absolute, no brainer. I’m realizing that a natural solution like CBD and also teach, see products can improve people’s quality of life is amazing. So knowing. Whatever you’re doing every day is making someone else’s [00:05:00] life better is very rewarding.

[00:05:01] Um, so although we hadn’t anticipated, when we went to Israel to kind of see what was going on there, that they would be the world leaders in medical cannabis research. It, it almost felt like his man, like I was saying, we wanted to honor my grandfather who passed away from cancer and Israel is conducting clinical trials on cancer research with cannabis.

[00:05:18] So it all seemed to fit. Um, and so, yeah, no, it’s, it was honestly a very easy jump. I came from social media and marketing. And so it kind of just made sense

[00:05:28]Bryan: where the conversations in Israel eyeopening, obviously what they’re doing is pretty impressive. So I’m sure hearing some of the advancements that they have has got to be pretty simple.

[00:05:36] It’s

[00:05:37]Natalie: it’s unlike anything you would ever expect. I mean, they’re around a decade ahead in terms of medical research, just because of the illegal landscape that’s there. Um, you know, our, our partner is actually the first company to be granted a licensed by the Israeli ministry of health to produce pharmaceutical grade CBD and THC products.

[00:05:55] So. our partner, all of their products in [00:06:00] Israel are manufactured, uh, you know, to pharmaceutical standards and then prescribed by doctors and patients get them at a pharmacy. So we’re basically kind of. Taking that same product, but selling it online because of the legal landscape in the United States. So it’s a pharmaceutical grade product, but it’s not going through the same typical channels just because of the current legal landscape and pinata is able to conduct clinical trials and do research and weighs on their product that is just not allowed in the United States.

[00:06:27] And it’s really unfortunate, um, that the U S is so behind in this respect, but we’re really excited to. Bring this technology, this science to the space, we really want to legitimize it. And it’s something we always talk about is we want to bring all the benefits of pharmaceuticals, you know, pharmaceutical manufacturing, the standardization, the quality management, the quality of the raw materials, the consistency, all the things that you like about pharma without any of the negative aspects of it, you know, where it comes to being highly addictive or potentially negative side effects.

[00:06:57] So we have this natural solution of CBD, but [00:07:00] then we’re making it to the same standard that you would take in. I would never question with your Advil that, that, that tablet is going to be different than another one. It’s going to have a different amount of the active ingredient that doesn’t happen in those kinds of products.

[00:07:11] Whereas in CBD, as we know, it’s kind of the wild west in the United States right now, and there’s a lot of mislabeling and there’s a lot of adult traded products. And so we wanted to kind of create a new standard for the CBD industry and match it to that of the pharmaceuticals.

[00:07:29]Bryan: I love it. And it’s quite daunting to hear it because we know some of the challenges that you’re up against and especially with the advancements and where Israel is.

[00:07:36] And especially here in like the east coast, for example, I still have field conversations for people who try CBD products and their first question out of that. Will this get me high it’s concerning because there is an educational gap. And then when you’re talking about marketing a pharmaceutical gate product, there are so many challenges from that sense, because not everybody is handling things, let’s call it quote unquote, the right way.

[00:07:59] So [00:08:00] Natalie, in your opinion, from a marketing standpoint, discuss some of the challenges that go into us and discuss how your team overcome some of those.

[00:08:07]Natalie: Yeah, I would say one of the biggest things is, is misinformation and false claims. So although we know that CBD can help with so many things, legally speaking in the United States, we cannot make those claims.

[00:08:20] So, you know, we cannot say that it helps with pain or anxiety or any disease state. And we’ve actually learned a lot about what we can and cannot say, thanks to Wayne and his. Uh, expertise in this category and with compliance. So what we’ve come to realize is we really need to come from an educational standpoint and explain.

[00:08:39] How CBD actually works in the body and kind of get rid of this whole supersizing culture in America, where they tend to believe that the more CBD the better, oh, this has 5,000 milligrams. Like that’s going to work better than this one that has a hundred. Unfortunately, that’s just really not how medicine works.

[00:08:55] Um, you know, from a pharmaceutical perspective, you always want to start with the lowest dose and increase as [00:09:00] needed. And so one thing we’re trying to convey to consumers is just that is that you need to have. A true pharmaceutical grade product, and it needs to have high bioavailability, which is actually the amount of active ingredient that’s being absorbed into your bloodstream.

[00:09:13] And so it’s able to have an active effect. So it’s not even about the milligram dosing, it’s about the actual absorption of the product, and that has to actually be tied to study. So there’s a lot of companies that also claim that they have high absorption. Where are those claims coming from? They’re anecdotal.

[00:09:30] Right? But because they’re in Israel and able to conduct clinical studies has conducted something called a pharmacokinetic study, which measures the active ingredients flow and metabolism throughout your body and the distribution throughout your body. So unless they have those studies, there’s no backing up the claims that they have high absorption.

[00:09:48] So our products have that pharmacokinetic study testing, and that also helps determine the dosage and the Milgram crowd of our products. So everything behind our products is intensive. And there’s a reason why their dose that way and [00:10:00] why they have that milligram count. So it does take a bit of education to explain that, but we’re trying to partner with doctors and physicians that want a brand they can trust and know is properly dosed and properly manufactured.

[00:10:12] So that is kind of the direction we’re going in. Is the health care practice.

[00:10:16]Kellan: I have a quick question. How challenging has it been knowing that a similar product or identical product from a formulation perspective in Israel can be tied to these claims? Right? And then you are trying then to communicate that same messaging to.

[00:10:31] The is in a different country, but you can’t like how challenging has that been to navigate that world? If you will. I

[00:10:37]Natalie: say it’s frustrating as an under, so a lot of it has to do with semantics as well. Like for example, you said, you know, we can’t mention any disease states that we can’t specifically claim that it helps with something, even though we know.

[00:10:50] That it, it, you know, it does their clinical trials to back it up. Um, but hopefully in the near future, you know, is conducting clinical trials on THC products as [00:11:00] well. And we hope to have clinically proven claims within the next few years, uh, which will be a huge differentiator for us as well. But yes, it’s really difficult.

[00:11:08] We’re also seeing a lot of, um, claims made on packaging, pain, relief, you know, all sorts of things. And if you notice that on a packaging, that should be a little red flag to you. Um, They’re not quite listening to what compliance rules are stating. So that should be a warning sign. Um, obviously every, not every brand is breaking the law, but you do need to be aware of the claims that these brands are making and realize what that actually indicates about how that brand off.

[00:11:38]Bryan: There’s there’s so many, there’s so many challenges here from perspectives too, right? Like, and I want to stay with the supersizing one because in my experience I’ve found most people when they’re purchasing a product more is always better. It doesn’t matter. It’s always, always, always better. And I wonder if that’s just like a cultural stigma, if that’s a global [00:12:00] phenomenon or if it’s trying to get the best of value bang for your buck, but you’re right.

[00:12:03] Like having, having that challenge there. Let’s say all things equal to people who don’t know what they’re doing. Look at the two different products. Sometimes people will, may be more leaning towards the more in just that scenario. I need to make a difference what it is it. So communicating that and educating them, but understanding that from a long-term perspective, the value is so challenging.

[00:12:25] And I give your team a ton of credit for putting up the fight, because it takes individuals like yourself doing it the right way to help set the industry.

[00:12:34]Natalie: Thank you. Yeah. Wayne, do you have anything you want to add to that?

[00:12:37]Wayne: Yeah, I think you’re, you’re absolutely right. And that’s the reason that’s the, you know, the foundation of why we are focused on the healthcare practitioner channel, because we realized early on in the, in the retail channel, the distributor channel, we didn’t have.

[00:12:57] That we’re educating the consumers [00:13:00] and telling the story and having the conversation with the consumers so they could get a better understanding of why they don’t need a super dose and why bioavailability was so important. Right. So when we started to get doctors that were interested in, um, helping their patients with alternative, um, products.

[00:13:25] Uh, not, not synthetic drugs, right? They didn’t have a brand. They could recommend, they didn’t know if a brand was safe. They didn’t know if it worked. They, they were clueless because they didn’t have enough information. So we’re seeing now when we started to approach. Physicians and share with them the information from a compliance perspective, from a pharmaceutical perspective, um, their eyes just opened up and they’re like, where have you been?

[00:13:58] We’ve been waiting for, for [00:14:00] a brand and people in a company like yours. So. W our, our, our goal is it’s the physicians that are going to be our champions. And they’re the ones that are going to be out there helping people when people come, uh, their patients, I should say, you know, and they say, Hey, you know, doc, what do you think about CPD?

[00:14:20] You know, for, for whatever their indication is, you know, that’s when the doctor will say, well, I think you might want to explore this. You know, if, if a doctor recommends something nine times out of 10, You’re probably going to give it a shot. You’re going to give it a try. I know I do. Um, and that goes far for us.

[00:14:38] And I think by going with the HCPs, we’re really going to have a huge impact and do some good. Yeah, I agree.

[00:14:46]Bryan: And I might say your nine out of 10 might be a little low from a real statistical standpoint on people’s purchasing factors recommendations. So staying in that direction, though, when you’re speaking to these physicians, is it more educational focused?

[00:14:58] Are you using the research to let it stand for [00:15:00] itself? How do those conversations go?

[00:15:03]Wayne: Yeah, I would say

[00:15:06]Natalie: I was going to say Wayne. Yeah, it’s a combination, but I’ll let Wayne take this since he has the expertise in this industry. So go ahead, Wayne.

[00:15:14]Wayne: Well, I think the, you know, the pharmaceutical model really, there’s a couple things that are going on here.

[00:15:19] One is that. Doctors strictly focused on science, they focus on results. So that’s the foundation of the discussion. So you have that. We have that from our partner Panex. Yeah. We have the trial data. We have the information and what we’re doing with CPD Or at least our brand is we’re saying, look, we’re going to tie this to a specific indication and that indication will be tied to the dosage of the product.

[00:15:46] And then the dosage and the product will be tied to the delivery method. Is it a tablet? Is it a liquid? Is that a topical and those three things. Is a very common way of looking at a product [00:16:00] in the physician’s world. So they get that and they think, and they’ve always gotten that and that’s how their programs.

[00:16:06] So we’re very excited to have the conversation and the, and the marketing materials, the physician detail aids, all that. Is tied around the pharmaceutical model and that’s what makes us stand out because, you know, we are representing to a certain degree of pharmaceutical company. We’ve got pharmaceutical grade products and we’re having almost like a pharmaceutical grade conversation.

[00:16:28] So the combination of all three really makes a good business sense and it, and it makes sense to the physician. I have a question

[00:16:35]Kellan: about education and how challenging has it been dealing with physicians in the U S where the endocannabinoid system isn’t really even taught in medical

[00:16:43]Wayne: school? It’s a huge challenge and it was even worse a few years ago, but now positions are starting to think otherwise, because now they’re, they’re starting to hear more information.

[00:16:59] Yeah. They’re [00:17:00] starting to read more articles and more of there are more of their patients are starting to approach them and ask them questions about it. And the last thing a physician in my mind wants to do is not have an answer for a patient, right? So they want to have at least some knowledge, some good working knowledge where they can respond to the patient.

[00:17:19] And if we can provide that information to the physicians, then the entire. Um, session with the patient goes so much better. So it’s a win-win for the, for the patient, for the doctrine for us.

[00:17:31]Natalie: And to tag onto that, we also have access to as official physician’s desk reference guide. So anoxia in Israel, in conjunction with Israeli ministry of health actually created.

[00:17:43] You know, a physician’s desk reference to go over how CBD THC works, how it interacts with the body dosing, protocols, indications, everything like that. So they truly have the expertise and knowledge to educate. And we do plan on having continuing medical education courses that [00:18:00] are provided to doctors so that we can educate them in this field.

[00:18:04] And that way they can feel confident actually recommending products to our, to, to their patients. And.

[00:18:10]Bryan: It’s so important to, right, because you’re not just fighting the stigma from a customer standpoint, you’re also fighting the doctors who are, some of them have practiced medicine for God knows how many years trying to put a number to it.

[00:18:22] But life right now, you’re, you’re opening up their eyes to possibly. Endless possibilities. So I can imagine the compliance standpoint is probably a really beneficial aspect when you’re communicating them right. Having a reproducible product, one that’s compliant, and one that follows a similar standard.

[00:18:37] So I’d love to kind of stand on that topic too. Now. So Wayne, in your perspective, what, what compliance aspects now are really differentials for your.

[00:18:47]Wayne: What compliance aspects are unique to us? Is that what you’re asking

[00:18:50]Bryan: me? Yeah. What compliance aspects are important that maybe the most, the industry isn’t following are ones that kind of separates your team from some of the peers.

[00:18:58]Wayne: So this could be a long [00:19:00] call.

[00:19:04] It’s really interesting because. Just about every company that manufacturers are distributes and sells CPD. They all say the same thing to the most part. They all say that, um, their product is third-party tested. They have a certificate of analysis and they claim to be a GMP. So with that being said, if every single product on the shelf, whether you’re in a gas station or a convenience store or wherever you are, if everybody says and claims the same.

[00:19:33] Um, then how are you unique? What makes you different? And, and the reality is as well. Okay. You know, industry metrics tell you that 25 to 30% of everything that’s out there in the industry is adulterated. So there isn’t the amount of CBD in there as they’re claiming, et cetera, even though it’s, third-party tested there’s, there’s ways around that, as we all know.

[00:19:55] So it it’s, it’s, it’s definitely a huge mess from an industry perspective, [00:20:00] but let’s talk about the good guys. So if, if, if you’re a regular decent manufacturer and you are trying to do the right thing, it’s the mindset of the leadership team of these CPD companies. So what I mean by that is when you manufacture a product, even if it’s not.

[00:20:18] If you have a quality assurance department or a QA person, and you say, that’s the person that’s responsible for quality for my product. That’s the person that makes sure we do the testing. We count on this department or group to make that happen. And that’s why you should buy my products. That’s absolutely the worst possible thing you could say.

[00:20:36] Okay. And the reason why. Quality is done by everybody in the company. Everybody that touches that product right from the CEO, making the decisions that the cost of quality isn’t cost. It’s the reality of manufacturing and selling a superior product. So if everybody in the company contributes to [00:21:00] quality, Then your QA persons simply just manages the quality management system of a company.

[00:21:07] They oversee it. So that means the person that’s actually doing. Um, you know, the, the manufacturing or the package. Or the extraction that person is trained. That person is educated. That person has the documents to back it up. They’ve gone through a thorough analysis to make sure that every step of the process has been done to meet the quality management system.

[00:21:33] And at the end of the day, you’re going to have a superior product because your system is going to generate it. And everybody involved is going to be part of that. So that fundamentally is a huge difference between what people do from a testing perspective. When they say, well, we test our product and we, you know, third party tested and it’s good versus truly taking a step back and looking at your entire organization.

[00:21:58] And that’s what we’ve done. [00:22:00] We have a quality management system. With anoxia that allows us to be able to prove to the physicians. This is exactly the type of product that we want to not only manufacturer, but sell to consumers that really need our help. And it seems to work extremely well for us. And I would

[00:22:17]Natalie: say to add on to that, you know, when we talk about quality and everyone talks about the testing at the end, We always care about quality from the way beginning.

[00:22:26] And that includes our raw materials. So our pre determined specifications from Panax CFR, hemp, biomass far exceeded most of the farms, uh, testing specs. So we spent over a year. You can ask Wayne that the, you know, brain damage, he went through to go find a farm that actually passed Maxia specifications.

[00:22:46] But what you’ll find is a lot of companies or, you know, farms left to use marketing terms like organic and all natural. But unfortunately that actually means very little when you look at the FDA and USDA requirements, um, it, it’s kind of just a certain [00:23:00] word that is used in the marketing field, but it actually really means very little when it comes to quality.

[00:23:05] So, you know, our testing. Seeds USDA requirements. So although our products not certified organic, it’s actually a higher quality raw material than an organic biomass. So that is also something to consider as well. So we really take it seriously from the raw material that has to have a predetermined specification.

[00:23:23] Each product has a pre-determined specification. It has to be manufactured in the exact same way. You know, even our packaging is GMP compliance. So we had to source, you know, different bottles from all over the world to make sure that it was in accordance with pharmaceutical studies.

[00:23:38]Kellan: Yeah, so the organic, I mean, I still ended up paying more for my broccoli when it has, you know, but I think it’s, I want to stay on the quality, uh, call the aspect.

[00:23:47] And I think that for our listeners, um, CGMP gets thrown around very actively in the industry. Right. It’s it’s a, it’s a really big buzz word right now, but technically there is two very different [00:24:00] classifications of CGMP, correct? There is, uh, a nutraceutical CGMP. Kind of guideline and then there’s a pharma CGMP guideline.

[00:24:07] And so could you guys kinda, uh, just educate our listeners on some of the differences from a quality perspective when you truly are following that pharma kind of guidelines from a pharma GMP perspective versus the more or less stringent nutraceutical GMP kind of guidelines, could you guys kind of educate our consumers on that aspect as well?

[00:24:31]Wayne: It’s very, um, it’s been a while since someone’s asked me that question. So I’m really excited. And by the way, I am a lot of fun and parties. So.

[00:24:44] So basically, so the code of federal regulations look at it this way. There’s two levels. Um, there’s, there’s the code of federal regulations for pharmaceuticals and there’s the code of federal regulations for dietary supplements. So dietary [00:25:00] supplements that CFR is 1 10, 1 11. You can look it up. And then there’s 2, 10, 2 11 for pharmaceutical, basically the CFR.

[00:25:08] Are the requirements. So the industry, the regulatory agency, the FDA and others, they don’t tell you how to do something. They just tell you what’s required to do something. You have to interpret how to meet that requirement and that requirement and how you do that. Are your GMPs, your current good manufacturing practices.

[00:25:34] So sometimes people get a little bit confused about what GMPs means versus the CFR. So always remember at the end of the day, when you’re being audited, they’re going to come in and they’re going to bring the CFRs and they’re, you know, there’s 35 40. And they’re going to go down the list and they’re going to ask you to demonstrate and show how you’re in compliance with, with each CFR and the CFR can be [00:26:00] anything from how you’re testing the biomass.

[00:26:02] As, as Natalie indicated, how are you designing your packaging components or do your packaging components meet these requirements, et cetera, et cetera. The difference between pharma and dietary supplements is the complexity in how stringent it is. So they are this, they relatively the same, but the depth of what’s required for each CFR is significantly higher for pharmaceuticals than it is for dietary supplements.

[00:26:28] But, um, you also have to take into consideration, you know, the reason why they’re there, where your drug or your product falls into a category, um, how. Uh, is, you know, is it a drug where it’s a scheduled one drug? You know, all of this takes them to play as far as how complicated and how intense the audit could be and, and the regs that you have to meet.

[00:26:51] So there’s a lot of variables to it, but when we’re, you’re making a dietary supplement as a pharmaceutical drug, a lot [00:27:00] of the, um, requirements that you’re doing, like we did, aren’t really that complicated because. At the end of the day, the type of product we have, doesn’t require a significant additional amount of work to make it in compliance.

[00:27:15] Does that make sense?

[00:27:17]Bryan: Yeah. Okay. And I want to kind of piggyback off what you said, kind of prior about the importance of instituting the internal aspects from a culture standpoint and not looking at it as a cost because Kevin and I have had a bunch of conversations where people ask us if we need to do something and the need is.

[00:27:34] Should you do you need to depends on really what you want to accomplish here and the type of game you’re playing from a short-term and long-term perspectives. Right? Because I would argue that a lot of people are taking short-term steps in order to, you know, get through today until tomorrow and not think about it from the long-term perspective.

[00:27:50] So I want to S I want to expand on Wayne, what you said on ask how many, let’s say other CBD providers, competitors of yours are going through the same [00:28:00] rigorous testing from a pharmaceutical standpoint as your.

[00:28:05]Wayne: Um, that’s an excellent question. I haven’t found anyone so far. Maybe Natalie you’ve come across a brand or a product, but I haven’t come across anyone that has taken it to the level we have.

[00:28:18] Um, you know, it took us, um, two and a half years. Two-and-a-half years. We were stealth. We didn’t make a dime for two and a half years because it took that long to develop and commercialize these products to be. Uh, the, the pharmaceutical regulations, even though we knew it was only going to be a dietary supplement, look you at the end of the day, you have to make a decision.

[00:28:42] Are you going to plan for success? When you know, 12, 14, 16 months from now, your product is going to be regulated by potentially the FDA. We already know the California department of public health is already considering rolling CPD, and it’s a dietary supplement. So you either do the [00:29:00] work now. Get your, your product ready.

[00:29:03] And when the, the requirement is acted and they give you 60, 90 days to be in compliance, you’ll be ready to go. Or you’re going to have to fast track everything that you should have done, you know, a year and a half ago, um, without damaging your brand and without losing sales. So it’s really, and it does cost a lot of money to do this.

[00:29:23] No argument there, but it could be more damaging to you later. Um, if you’re not prepared for it because of the disruption. Right. So it’s like, are you going to build a house? Right. And, and with the, with the amount of money that you have, are you going to build it right? Or are you going to try to, you know, To a certain degree where it’s just good enough.

[00:29:43] So it all depends on your philosophy

[00:29:46]Bryan: and just the pig and sorry, just to piggyback off that, what you said when they have 60 or 90 days to get into compliance, what took you two and a half years to try to do? And let’s say three months, what was expensive in two and a half years, I’d imagine would be a little more expensive if [00:30:00] you had any.

[00:30:01] Oh yeah,

[00:30:01]Natalie: that’s it.

[00:30:04]Wayne: Can you imagine having, you know, $300,000 worth of packaging components that you can no longer use? Yeah, just that alone is a sunk cost.

[00:30:16]Natalie: That’s actually, what I was going to add is our packaging components. One of the longest parts of, uh, of our process before launching the brand was having a law firm that specialized in FDA compliance review every last detail of our packaging, even to the boldness of the font in certain.

[00:30:33] So we basically, you know, with Wayne’s expertise for saw that the FDA, or at least state by state would start regulating CBD as a dietary supplement. And as Wayne said, just a moment ago, we’re already seeing that happen in California. So we, we kind of, we positioned our, our packaging and our brand to be a dietary supplement in anticipation of that.

[00:30:51] So everything is fully, fully compliant with dietary supplement guidelines. And you’ll also notice that’s why there are absolutely no claims on our packaging, on our [00:31:00] website.

[00:31:01]Kellan: I think that’s, couldn’t be stated loud enough. Brian and I have a little experience on really understanding the amount of

[00:31:07]Bryan: information that needs to be communicated

[00:31:10]Kellan: on a package label for these

[00:31:12]Bryan: kinds of products.

[00:31:14] It’s it’s wild as a marketer, it was challenging to try to fit everything on it. And it just was like, I don’t know. They’re a smaller,

[00:31:26]Natalie: I sell it with a magnifying

[00:31:27]Bryan: glass

[00:31:29]Natalie: and, uh, certain information has to be visible. It has to convey, you know, at the right time and space. It’s very

[00:31:34]Bryan: complicated. When, in your opinion, why do you think a lot of these other brands and companies are not positioning themselves for a longterm, you think it’s financial base, you think it’s education, do you think it’s more of just like let’s get through today?

[00:31:47] What do you, in your opinion, what do you, what do you think the reason.

[00:31:51]Wayne: I don’t think they’re focused on the medicinal opportunity there, their holes there, their brand, their strategy, everything. I don’t think they’re [00:32:00] focused as a health and wellness product. I think they’re focused as a CBD product and what their interpretation of what that means.

[00:32:07] Yeah. We, we were at a show. We did one show before the pandemic hit and we were approached. As why, why are you here? People kept coming up to us from different booths that the competitors are saying, what is a pharmaceutical company doing it? A CBD show. People continuously looked at us like we don’t belong here.

[00:32:29] You know, it’s just not right. And they weren’t being mean, but we looked like a pharmaceutical company because we. We’re representing a pharmaceutical company. We have a pharma brand. So it’s clear to me that the industry isn’t focused on that. And the reason why is because it’s just not in their business model, they don’t want to do the HCP channel for all of the reasons that makes sense for them.

[00:32:52] Whereas it’s exactly opposite for us. I don’t want to compare. With Joe CPD, gummy bears at, you know, [00:33:00] some seven 11 to me, that’s just not what it, that doesn’t make sense to me. Uh, edibles, aren’t going to work any way to the degree on the bioavailability side. We all know that. So why don’t we just focus on.

[00:33:12] The products and the indications that make really the smartest sense to help people with, you know, what they’re, what they’re going through. And it just it’s clear to me that the industry doesn’t have that same frame of mine. Yeah,

[00:33:27]Natalie: I agree with that. And I would say a lot of companies are just jumping on the kind of CBD bandwagon because it’s an emerging industry and we’re seeing things like CBD candles, right.

[00:33:36] So, I mean, what is that going to do? So I think a lot of the times people are just looking for. You know, a quick buck in the industry, they’re not here longterm, but our whole goal isn’t just to make a lot of money and then disappear when the regs change we’re actually trying to, like I said, create a new standard in, in the CBD industry and as regulations get more stringent, I think we’re going to see a lot of drop-off from [00:34:00] brands that just.

[00:34:01] Meet those regulations. They’re just really not able to perform and create a product that’s safe and consistent in that way.

[00:34:07]Bryan: Yeah. That going to kill a lot of companies that just don’t have the capital investment in order to switch their, their operations. So let’s talk future roadmap, any, any minor cannabinoids on the radar, any up and coming products that you’re excited about, that you can share.

[00:34:23]Natalie: I would say something that we’re really excited about is down the line. When we do have our THC products, because with the CBD industry, we’re not allowed to have certain delivery methods. Thanks to Wayne explaining that to us, they’re considered over the counter delivery methods. So down the line, we’re going to have sublingual tablets that dissolve we’ll have.

[00:34:40] Positories pain patches and other delivery methods like that. And as we mentioned earlier, that can be clinically proven. So is doing, uh, clinical trials on migraines, epilepsy, psoriasis, and other indications.

[00:34:54]Wayne: And then piggy back onto that and to piggyback onto that back to the CBD side, [00:35:00] um, we can’t share with you that we are very focused on doing additional research, um, uh, in the sleep category.

[00:35:07] So we’ve got a very good sleep product, but I’m confident that the cannabinoids that we’re looking at right now at specific levels combined. Um, with, um, with melatonin and other API APIs, um, really could do something really great for us. So I think parallel work. We’re going to continue to look at that and see if we can develop a new form of.

[00:35:28] That’d be

[00:35:29]Kellan: awesome. And so many people in America suffer with sleep deprivation. So if it works, it would literally impact so many, so many people’s lives in a really positive way.

[00:35:38]Natalie: One of the favorite things that we see from our reviews is people saying they’ve gotten off their, their pharmaceutical prescription drugs that often have those potentially negative side effects and are very addicting.

[00:35:49] Um, and they’ve replaced it with our products. So that also, you know, we have that CBD melatonin, which is amazing for sleep. And another product that we’re really proud of is our CBD. Myo-inositol And this once again, I [00:36:00] see your face. You’re like, what is Myo inositol This is why working with a company like Panaxia is just so different than any other CBD brand.

[00:36:06] Uh, myo-inositol is a naturally occurring compound in the brain that affects serotonin and dopamine and other chemical transmitters. And then a clinical trial is proven to be as effective as Prozac at reducing anxiety and panic attacks. So we have this amazing nutraceutical that combines two natural compounds that it’s amazing for stress.

[00:36:24] So we have. Truly unique formulations can act. He has seven patents on their, on their formulations and delivery methods. So when we say it’s proprietary, we actually mean it. We’re not just marketing, um, nano park, you know, nano CBD and all organic and all that kind of stuff, which sounds great. But. Truly pharmaceutical grade manufacturing and formulation development, but it’s using, you know, ingredients and compounds that won’t have those negative aspects of the pharmaceutical industry.

[00:36:54] So that’s what we’re most excited about with

[00:36:56]Bryan: that. And just to kind of expand on the sleep when we met Jerry, I [00:37:00] shared with him the story about my mom and the sleep and how many products that she’s tried and, and Jerry was fortunate and nice enough to share with me. And I gave it to my mom and her response is usually very quickly it didn’t work.

[00:37:10] And this one. I think it worked. And Danny that is such a step forward to think that possibly it could work, right. It was a massive, massive difference maker. And you know, you’re right. Like the sleep aspect is a game changer. If that can go down, it can help so many, so many

[00:37:25]Natalie: people, your whole health and wellness, you know, overall your sleep really impacts all of that.

[00:37:31] So that is, um, probably our best seller I would say is our CBD melatonin.

[00:37:36]Bryan: So what is w one concept or facts. That would shock an everyday consumer about the cannabinoid industry.

[00:37:46]Natalie: Wayne, do you want to take that one?

[00:37:48]Wayne: Hmm. Well, I’m processing. That’s a really good question. What’s one fact that would show.

[00:37:57]Natalie: I mean, I think the one we were talking about before where people [00:38:00] think more is better, I think it’d be really shocking for people to realize that just because something says it as 5,000 milligrams or 500 milligrams, it might not. That is actually the most shocking part is you might think you’re absorbing it and you might think you’re digesting it, but you’re not.

[00:38:14] So even if it says it has that. amount A lower dose product that actually is formulated to have high bioavailability and the pharmacokinetic testing to back up those claims. That is the biggest difference. So I think the biggest misconception about CBD right now is that more is better. Um, besides all the obvious, you know, will it make me high those kinds of questions, but

[00:38:34]Bryan: yeah.

[00:38:36]Wayne: Yeah. Yeah. I think going back to the average consumer does think CBD will continue to make them high. Right. So I think that that has never gone away. The education about CBD is just unbelievable. It’s just, it has to be, um, We have to do a better job of communicating what CBD is and what CBD isn’t. Um, but [00:39:00] again, because people will test positive on a drug test for THC, when they’re taking CBD, they have to be, they have to be educated to understand why.

[00:39:09] You know, so you get yourself into a pickle where you tell them, no, there’s no possible way. You’re going to get high. Trust us, the science, here’s the endocannabinoid system here. Here’s all of the background that you need to know, but don’t take a drug test because you’ll test positive and they look at you, like, what are you talking about?

[00:39:26] So you’ve got to get over that. And it’s very confusing for

[00:39:28]Natalie: people. Yeah. And I would say that actually ties back into a lot of people don’t realize that CBD is just a compound and it’s available at hemp and Marilyn. So, if anyone is telling you that CBD is only from him, that is incorrect information, it is a compound, it is a molecule, right?

[00:39:44] So it can come from marijuana plants as well. It’s just that, that plant overall, the hemp plant has very low amounts of THC, but it’s there they’re cousins. It’s not like an actual distinction there. Um, so I think that’s also very confusing for them. [00:40:00]

[00:40:01]Bryan: Wayne. What’s your opinion? Big pharma has for the cannabinoid industry.

[00:40:05] Are they threatened to, they see it more as an ally, an intersection, a let’s say a new revenue stream, in your opinion, what do you think big pharma thinks of, of the cannabis industry

[00:40:16]Wayne: CPD? And the reason why I say it that way is if the, if the science and the research looks promising, they will pull the trigger in this.

[00:40:28] Absolutely. There’ll be all over it. But until the science and the research justifies them taking a serious look at it, they’re going to keep an eye on it. It’s in the room, it’s over in the corner. But soon as something lands on the desk that shows that this is an opportunity to do some really good things.

[00:40:47] When I say good things, as, as it relates to an indication or health and wellness, then they’re going to go on. They’re going to go after a big time and nobody can be in their way. And it’s just a matter of time because the research [00:41:00] is increasing is getting more solid and like everything that’s happening in Israel, you know, that’s a country, but guess what guys, you know, we have the internet, everybody’s going to know what’s going on.

[00:41:11] So it’s just a matter of time before a farmer just takes. Do you think someone,

[00:41:16]Bryan: a big pharma company will pull the trigger a little early in anticipation of their peers, because if it is an arms race, right to acquire some of these assets and these formulations, you can’t be second to the party. You have to be first.

[00:41:28] So you think some of them will be more willing to let’s say, take a chance and a gamble on some of these acquisitions, or do you think they’ll try to play conservative depending on you know, who is the company?

[00:41:39]Wayne: So they will not be. I think that we’re already,

[00:41:42]Kellan: I think we’re already there though, right? Like Pfizer’s $7 billion entry, um, purchasing or in a pharma, right?

[00:41:48] Like that is as big of a cannabinoid play as you possibly can. It’s from a pharma

[00:41:52]Wayne: perspective, right? Yeah, absolutely. Yeah. You don’t have to, you don’t have to be conservative when you have deep pockets. [00:42:00] Yeah, we have deep pockets. You can do whatever you want. Amen.

[00:42:04]Bryan: And a quick Google search of any of the patents that Pfizer has, would lead you to have over 3000 different patents on cannabinoids.

[00:42:11] So you could see they’re pretty invested in just a matter of time. I’d wonder if, if there’s another acquisition that’s free for, let’s say someone else in order to try to compete with them or Pfizer doubles down and continues to expand in the space.

[00:42:24]Kellan: That’s a good question.

[00:42:24]Wayne: Yeah. Only time

[00:42:25]Bryan: will tell exactly right.

[00:42:28] So Natalie, since you’ve been in the cannabis industry, what has been the biggest misconception?

[00:42:34]Natalie: I guess misconception. That’s a good question. Uh, I think we touched on it a little earlier. I was saying, you know, a lot of people don’t understand the difference between, you know, hemp, marijuana CBD as a molecule.

[00:42:48] And as, as Wayne was touching on, you know, full spectrum versus an isolate, um, I think there’s a lot of misconception about. Y you would take an isolate over a full spectrum product. And in our mind, [00:43:00] the only reason you would ever want to take an isolate or even a broad spectrum is if you’re being, you know, drug tested for your job, it’s in terms of efficacy and the research, and that kind of ties into our pharmacokinetic studies that Connexa conducted.

[00:43:13] The reason that they demanded that we’re full spectrum. We wanted to offer broad spectrum, uh, for people who are drug tested, but they said that will drastically affect the efficacy of the product. So I think. People think there’s a lot of talk about the entourage effect, but they don’t really realize how deeply scientific that, like how rooted that is in science and testing and formulation making, um, and all the trials and studies that these, these people are conducting.

[00:43:37] So. I also think there’s a lot of misconception about how difficult it is to make a product that is made from plant material consistent. Um, Wayne was talking about this earlier, you know, the difference between making a synthetic drug versus making a plant based product. It’s not the same and it’s actually extremely difficult to standardize.

[00:43:58] So I think [00:44:00] people often think that they’re getting the same product every time, but if it’s a new batch, there’s a big chance if they don’t have those standard operating procedures and quality management systems in place that it’s not going to be what you think it is. And so I think that’s the biggest misconception.

[00:44:14] Like not all CBD is created equal and science really does play a part in.

[00:44:20]Bryan: Before we do predictions, we ask all of our guests, you could sum up your experience in a main takeaway or lesson learned to pass onto the next generation. What would it be? Wayne, do you want to go first

[00:44:34]Wayne: lessons learned or as, or from a business perspective or you mean for our consumers? Help me out here. Any

[00:44:41]Bryan: new life it could be live, could be business. Could be.

[00:44:47]Wayne: Um, well, you know, guys, I’ll just say this, the cannabis space right now. It’s probably one of the most difficult [00:45:00] industries to start a company in.

[00:45:02] And the reason why I say that is because you could start an over-the-counter drug manufacturing company, or a lot less. A lot less pain, um, much faster and be in compliance with the FDA in a much shorter time. From a business perspective. When, when, when you know my past history with the companies I’ve worked for, I hadn’t absolutely not near the amount of pain and suffering and living nightmare that I’ve gone through with.

[00:45:37] And the bus is out of control from a regulatory perspective, from an operational perspective. And, you know, I would tell someone that is coming behind me if they wanted to, you know, start and build a manufacturing, uh, cannabis company and sell and distribute. You know. Okay. But you [00:46:00] better really do the research and understand what it’s going to take to make this happen, because there’s not a clear path, you know?

[00:46:08] Um, you know, we talked about the CFRs, the code of federal regulations. There are less, you know, CFRs for an over-the-counter drug company than there are, uh, rules for a cannabis manufacturing company. This is like three times. Uh, regularly regulations for a cannabis company. Then there are an over the counter drug company.

[00:46:29] That’s insane. It’s insane. And, and the margins aren’t there from it because of the taxes. So I would caution someone to really do the research before they pull the trigger on this, because I don’t think they understand how difficult it’s going to be, but if they have the resources and the intelligence and the time to make it happen, it will be rewarding, but it’s going to be a very different.

[00:46:53] Industry to be successful in plain and simple. That’s a marathon. Yeah, it is a marathon. It [00:47:00] isn’t a marathon and you have to have the passion for it. Right? The passion has to be there. If we could take somebody off a synthetic drug, if we can make someone that has, let’s say arthritis and they put a cream on their knee or whatever the case may be, if we can give somebody an alternate.

[00:47:15] To help them feel better. How could you not want to do that? If you want to do that, then it’s the right industry. But if you’re just out there trying to make people feel happy and fun and your product is just recreational. Okay, great. That, that works for you, but that’s not what we’re into. That’s not where our passion is.

[00:47:33] So. Um, it’s an exciting time for us and it’s been, it’s been hard, but, um, at the end of the rainbow, so to speak, I think we’re going to have some really great stories as hell.

[00:47:46]Natalie: And I would say for mine, um, I agree with everything Wayne said, and I also think, you know, we have to realize that not everyone is going to play this game face.

[00:47:55] Um, that in terms of, you know, competing against brands that are [00:48:00] mislabeling making claims, et cetera, and how hard it is to break through that noise. I would say that’s the biggest lesson learned is realizing how we need to communicate effectively and educate not only doctors, but even the people taking these products.

[00:48:13] I mean, they’re really, there’s a lot, we know there’s so much interest, but there really is a lack of, of information and a lot of misinformation. So the amount of times I’ve seen an article talking about. CBD is from hemp and THC is from marijuana and it, it, you know, it makes my day, it just upsets me because they’re trying to explain something, but then they’re actually giving this information and those people are then taking that and spreading that as well.

[00:48:38] So I think the educational aspect of it and getting people on board with the medical side of things is the biggest.

[00:48:46]Bryan: The game is not fair.

[00:48:51]Wayne: Go

[00:48:51]Kellan: ahead. Run. No, you can. You can. I was just gonna say it doesn’t help that we’ve been missing the massive institutes that provide standardization from an [00:49:00] educational perspective for the last eight years.

[00:49:02]Bryan: Right?

[00:49:07]Natalie: And Israel, it’s a totally different world when it comes to cannabis there at like the university level of education. Um, the, the stigma is not there. It’s just not there. And the education for, you know, people in university. You know, there’s, there’s kids that are going to college and actually doing research on cannabis there, which is kind of unheard of in the United States.

[00:49:33] You wouldn’t even think that that’s an opportunity. Right? So, uh, we actually know of people from the U S that went to Israel to study cannabis, because that’s just not an option in the United States.

[00:49:44]Kellan: Ben, who house, who we had on a little while ago and talking to you was doing that exact reason.

[00:49:51]Natalie: I’m just goes to show how far ahead they are.

[00:49:54] And they’re, you know, they’re even doing research, showing that different extraction methods affect the efficacy of [00:50:00] the, of the product on a specific indication. It gets really that, that specific. So it’s pretty cool

[00:50:06]Bryan: prediction time. What medical area do you think long-term cannabinoid therapy will be the most beneficial.

[00:50:16]Natalie: I mean, as we kind of talked about before, I would say sleep, I would say sleep, anxiety and pain are the

[00:50:22]Bryan: three,

[00:50:29]Natalie: all three. So Wayne has nothing to say. I think, I think sleep is probably the biggest category because that impacts your anxiety. Um, and also, you know, physical pain. So I think sleep having and maintaining a restful sleep schedule and good sleep hygiene is one of the most important things you can do for your wellness.

[00:50:47] So that’s probably one of the biggest ones

[00:50:49]Bryan: for sure.

[00:50:51]Wayne: I agree a hundred percent, but I also think that the science and the research in the future is going to focus a lot more [00:51:00] on inflammation. And I think we’re going to find out that inflammation is going to be here. Huge for the cannabis space. And I think there’s going to be opportunities that we don’t, we’re not even aware of right now where the science and the research is going to direct us down paths that are really going to do some great things.

[00:51:18]Kellan: I’m going to go with oncology. I think that, um, there’s some really exciting clinical trials that just got underway in Israel showing, um, how, uh, effective treatment of a specific whole plant extract had on a cancer line. And so I’m really excited to see that kind of research, expand the clinical trials, get more people involved and kind of see what really the benefits cause.

[00:51:43] I mean, I think. Cancer and cannabis have kind of been hand in hand for the last 20 years. I think it’s probably been one of the more, um, Popular use case scenarios for cannabis is individuals that are on chemo, utilizing it for help. And I think that there’s [00:52:00] originally right. It’s, it’s used for appetite to stimulate appetite, but I think that there potentially could be a lot more to the,

[00:52:11]Natalie: you say that because one of our other partners, who’s just a straight up analytical research labs.

[00:52:15] So they’re not making products, but they’re actually doing research on notch. One mutation cells from routine. Without having Whitesell, Dr. Daddy, Mary, um, is one of our partners as well. So he’s one of the lead leading researchers in Israel doing all

[00:52:32]Kellan: the clinical trials.

[00:52:34]Natalie: I had a feeling you were

[00:52:38] we’re partners with him. Um, and he’s doing some of the most amazing work. You know, he really has kind of picked up where Raphael Meshulum left off and is carrying on that legacy. So.

[00:52:51]Bryan: Yeah, that’s a, it’s kind of , I’m going to go with focus, I guess. Right. The list is kind of it’s, it’s [00:53:00] kind of small at this point.

[00:53:00] I think if you think about all the people, especially in college that use, let’s say Adderall in order to kind of keep themselves. Attentive or for other purposes, I think if they could find a more natural solution to help them and feel that same sort of attentiveness that they’re looking for. I think that can be beneficial.

[00:53:17] And especially if it’s an all natural one, I know there’s already a bunch of other products out there that try to be a replacement for Adderall. I would hope that there’s a variety of different medical benefits. And I think with some advancements, and I think with some individuals like yourselves, doing things the right way and cutting through some of the noise, it’ll help change the stigma and help the advancement of the industry pretty aggressively and really commend you guys for taking those steps and doing it the hard route, but the right way, which is what this industry really needs so far listeners, they want to get in touch.

[00:53:47] They want to learn more and they want to see some of the products. Where can they find.

[00:53:51]Natalie: Yeah, so they can find us at the health. T I K B a H E a L T h.com. And all of our social media is also take the health. So we’re [00:54:00] on Facebook, Instagram. That’s where you can find us. We’re also, you know, um, in some pharmacies across the country, but I would say e-commerce is the easiest way to access us.

[00:54:09] So yes,

[00:54:10]Bryan: we’ll link it all up in the show notes. Thanks so much for your time guys.

[00:54:13]Natalie: Thank you. It was great speaking with you guys. Yeah.