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!
After 15 years of experience in Financial services, Jason Malcolm was hungry for a challenge. As the Principal of Arcview Management Consulting, Jason helps budding Cannabis businesses flourish in the quickly changing cannabis industry.
Bryan Fields @bryanfields24 and Kellan Finney @Kellan_Finneygain insight into Jason’s knowledge on the Cannabis market by discussing:
- The competitive cannabis market
- Launching cannabis programs
- Licensing structure and complexity
- Strategic feedback that leads to success
- Hurdles that operators are faced with
- Lessons learned for future generations
- Don’t forget to hit that share button!
Become a supporter of The Dime Podcast: https://anchor.fm/thedime/support
Arcview Management Consulting is a global management firm with extensive knowledge in cannabis and hemp to better help companies succeed and scale in the industry. You can learn more by visiting https://arcviewconsulting.com.
[00:00:00]Bryan Fields: This is the dime, dive into the cannabis and hemp industry through trends, insights, predictions, and tangents. What’s up guys. Welcome back to the dine as always. I’ve got my right hand in telling Cindy here with me. And this week we’ve got a very special guest Jason Malcolm principal of Arcview management consulting.
Jason, thanks for taking the time. How are you doing today?
[00:00:24]Jason Malcolm: Doing great. That’s fine.
[00:00:26]Bryan Fields: Yeah, we’re looking forward to diving into these items. Kellan, how you doing?
[00:00:30]Kellan Finney: Doing good. Just enjoying the rain here in Colorado. We need it.
[00:00:33]Bryan Fields: Don’t bring that negativity around here. So Jason, before we get started, can you tell our listeners a little bit about your background?
[00:00:38]Jason Malcolm: Yeah, certainly. So like most people in cannabis, I come from a very different background. I spent the last 15 plus years in financial service. Mainly management consulting. I worked for the big four KPMG KPMG advisory spinoff FIS, which is a large impact company, as well as some small boutique consulting firms, my boat, which was risk management process improvement, but it was yours.[00:01:00]
I think most in certain industries, you kind of get to a point where you studied yourself. Whatever I see myself body 10 years is banking really row on a, B is risk where I was 10 years ago. It’s not so much as exciting as it used to be. And, you know, I kind of said to myself, let me try something that is completely uncertain, challenging industry.
And, you know, the view looking forward is always blurry and it’s never really clear. And I said, you know what, let’s dive into cannabis and then see how I do. So I ended up getting a phone call from a former client in blind slash friend introduced me. And I came on board and I’m loving every minute of it.
It’s been about eight months.
[00:01:39]Bryan Fields: I’m excited to kind of dive into some of those areas, but to kind of follow up with there. Was there a single moment you realize I’m going to go for cannabis? I feel like in everyone’s journey, they’re always wavering these decisions. And like you said, and then there has to be some defining moment that says, I think it’s cannabis.
[00:01:56]Jason Malcolm: know, it’s funny because I remember conversations. So I’m born and [00:02:00] raised in Staten island, New York. So I’m a new Yorker. I lived there for 27 years. I do find it to New Jersey and I’ve been in the same spot since then. But I remember talking to my friends in high school. Cannabis legalization.
I kid you not like there was a one day, this is going to happen. And I’m like, I don’t really know if going to happen. And I was like, sure, why not? Let’s say over the years, you know, you slowly see a taking form and maturing into what it is today. And I think the mature market in Colorado is really interesting.
So sophistic. That it has a spark. It really supports anybody’s interests that are into any type of new markets or emerging markets. And I think that’s what really put cannabis in the maps. And, and I just kind of bottled it all the legalization. And it was all these states that have legalized for adult use, even medical at this point.
And it’s always been a back burner. And from my career, I said to myself, I never really saw myself hanging my [00:03:00] hat up in financial services. So I have always thought to myself, What would the next best thing look like? Is it diving into a technology payments or industry right now? Is it the payment industry?
Is it completely getting out of financial services and starting something? The interesting part about RQ manager. Obviously it’s a consultant shop professional services, right? We sell our people, we sell our skillsets and the framework and consulting is pretty much universal when it comes down to strategy or tactical.
For that matter between banking and canvas, it’s very, very similar. What’s different obviously is the products and the topics, but that’s obviously come over time. But in any event, I saw this as a great opportunity for myself. One, I have difficult. I’ll just have to learn about the product itself and let’s face it.
The industry’s really exciting. A lot of things happening in this space that really perks up everyone’s eyes and ears. Even though you’re not the cannabis [00:04:00] enthusiast, you don’t have to do a lot of people that are saying, oh, I suffer from anxiety. I’ve suffered from depression. Maybe I’ll take these CBD companies from XYZ.
It has a little THC, right. And they get hooked on it. And so I know some of these people, they go to the doctor working, whatever it is, just do it. Right. It’s not unhealthy or harmful. I just thought it was perfect. You know, between those discussions, when you’re young and high school, I’m a true believer of what comes around, goes around, you know, life.
So full circle between my experience and management consultant and kind of bringing it over to new space in cannabis and then cannabis being. Very interesting space.
[00:04:43]Bryan Fields: It’s kind of explore that, right. It’s it’s an exploding industry. And like you said, there’s, there’s massive opportunities across board and, and like you were saying specifically here on these phones, so take us through kind of like what a Daymond life is like for you and the type of projects and the type of conversations you’re having with [00:05:00] clients in the space.
[00:05:01]Jason Malcolm: it’s, there’s no common theme, I guess what I’m about to dive into all of our clients. Really interesting ideas. And a lot of them share some similarities and a lot of don’t. But what we’re seeing a lot today is obviously right now, I’ll start off with the licensing strategy, competitive markets, right?
New York, New Jersey, Connecticut, all new markets. Big markets it’s to tri-state space. Right? New Jersey’s making great progress there. They’re there they’re full steam ahead. I think they’re coming out more with the finalizing their rules pretty soon, right? New York on the other hand, not as put together as New Jersey at the moment, obviously homo and that whole debacle has a few pickups in the process, but we do see a light at the tunnel there as well, and Connecticut, which is something fairly new.
We’ve seen a lot of it. For our clients operated in one of the three markets or possibly two out of the three markets. So we are helping them be teamed up with cannabis capital group or a [00:06:00] licensing strategy. And we are talking to a lot of those poaching cultivation, manufacturing, retail, as well as distribution licensing.
In addition to that, being that all these new states kind of, you know, reforming, or I should say, launching cannabis programs where you are seeing a great deal of interest and existing operators and expanding. Their footprint within the country to multiple states. So a lot of what we’re doing right now is assessing which states make the most sense for their products.
So in other words, which states have pre-rolls right. So right now I think it’s Massachusetts for that matter. California is a big market for that Washington, of course, Colorado. What’s the strategy. What’s the cost. Right. And then what makes the most sense for them for like a three to five year? We have a lot of interest in state by state expansions that applies to early operators and mature operators.
And then we also see a lot of interest [00:07:00] in new operations and new, not new techniques, but very challenging techniques to make themselves unique in the market. So tissue culture, for example, is something not a lot of people do. It’s a very complex process. But we’re working with somebody. How they should be able to watch their operations within the state.
That’s pretty saturated in terms of cultivation, retail, processing licenses. Right? Well, what does that look like? How can they can make themselves competitive within that market? And what would the infrastructure look like? What would the building look like? Right. How much would it be for lands?
Right. Trying to piece all the pieces together in the puzzle so that they can actually go up and grab investors. Additionally, Oh, huge demand and investor, right. And roadmaps to, you know, high level strategy of what they’ll look like over the next one to two years. And a lot of people, you know, they have a business and then they’ve never really taken a step back, has been so focused on strategy [00:08:00] operations, right.
And growing their business. They’ve never really taken a step back and say, okay, how much is my business? And, you know, I really want to raise money, so I want to grow faster. I want to scale faster, but I can’t do that unless I have some type of valuation on my business. So licensed evaluations or evaluations of the business itself, as well as the invested back to really get them prepared to socialize their business strategy and model to potential investors, whether it’s friends, family, or you know, that’s a, that’s a fair mix of what we are operating, how we’re operating.
[00:08:34]Bryan Fields: So I want to kind of take one of the items you said and kind of go to Kellen on this one, Kellen from a license standpoint, from an east coast, obviously people are getting more and more interested in being in this space. And they’re interested in dabbling into is it is now the right time for license, or should I wait for the rules and legislation to move forward?
How do we handle that conversation? What do you normally tell clients, come to us and say, Hey, I’m interested in being east coast. When is the right time? The east coast is going to be a
[00:08:59]Kellan Finney:[00:09:00] very interesting market. In my opinion, I think that it’s going to cost a lot of money to play that game. Right. I mean, it’s a mass.
The tri-state is massive. There’s you have all of the financial headquarters of the world in New York, right? So like, these are the biggest of the biggest players are having have the same exact ideas. It really depends on the client, right? If it’s like a couple of friends who are just trying to start a small cannabis company and they’re excited about weed and they’re like, Hey, I know there’s a lot of people that live in New York.
I was going to go after a license in New York. Then we tend to kind of try to advise them to maybe look at other markets as a starting point, just because new York’s been taking notes, New Jersey date. There’s some smart people in those states. They’ve been taking notes. They’ve seen how the Colorado market played out.
They’ve seen how the California market played. They’ve watched all of these other states come online and they, they have a roadmap for how they’re going to execute this. And the individuals that are probably drafting a lot of the regulations are [00:10:00] probably going to have a piece of who ends up getting the licenses.
And there’s nothing wrong with that, I guess. Right. But it is going to be limited licenses states, right. And so there’s going to be very, very high level competition to obtain one of those licenses and those. Because of the potential windfall, if you can license, I mean, look at Florida, they are just, people are selling paper in Florida for $50 million, just for the right to participate in, in the quote unquote limited market.
Right. And so it really depends on the case. Right. Is there a large operator who’s got experience in another state and they’re looking to become part of the MSO gang. Then I say, go for it. Right. Then you probably have the firepower and the capital, or at least access to the capital to bring on consulting firms and lawyers and all the right pieces to at least have.
A competitive shot at Jamie, one of those licenses, but it’s going to be tough, right? Like there’s probably to, I think there’s five licenses that are probably going to be released in New York. Right. Is that correct? From my last [00:11:00] reading
[00:11:00]Bryan Fields: super limited. And I always refer to it as like the golden ticket from Willy Wonka.
Right? If you win one of those, you’re provided an opportunity that is, is literally life changing. And I think what you said, calendar is really important too, from like a geographical location. East coast has so many clusters states in that, in that small little region. So you don’t have to be in all of the states.
So you can kind of hand pick the strategic location. Do you want to be. And if you don’t get opportunities in New York and New Jersey being in one of those surrounding areas, maybe it’s not ideal initially, but should be more of a conceptual thought process because the Titans you’re fighting with are the biggest of
[00:11:36]Kellan Finney: the Vegas for Jason.
How similar are the licensed structures in Connecticut, New Jersey and New York? Are they all going to be very similar or are they going to. Drastically different, like, cause in Washington you’re not allowed to be completely vertically integrated. Right. You’re not allowed to have a dispensary and the cultivation, but in Colorado, they kind of encourage that.
You want to kind of talk our listeners through how that structure is going to work. [00:12:00] Yeah.
[00:12:00]Jason Malcolm: So they’re all variable. All very different New York being the most different one out of three. So New York, if you have, if you apply for a cultivation license, you will also apply for a processing and distribution and that prostitute would just be sent there to be multiple locations.
Does that, does it have to be the same location, but you are able to be vertically integrated. There’s also a micro business. They do apply for which gives you, you know, limited canopy space with cultivation, prostituting, dispensary, retail. And I’ll just mention over your own products license that operates very similar, a little different.
So you can vertically integrate in New York. The only thing is if you own a retail, if you apply for a retail license, any other interests, Dispense a distribution and processing. So they do restrict you there. However, in New Jersey, I believe their rules are coming out in a couple of days. Now. I believe they are restricting vertical integration and Connecticut it’s very similar.
I don’t think [00:13:00] it is committed under the medical marijuana program in Connecticut, but for the adult use program right now,
[00:13:09]Bryan Fields: This is the crazy part too, is that like state to state all the rules change, which means you need to make sure when you are submitting those efforts, unless you’ve got yourself a wide ranging team that is dealing with pockets, I mean, you need to take strategic approaches because it’s expensive.
Right? I think one of the conversations we have all the time, especially with, with current operators is just the sheer costs going forward. Just to add to it, right. Just as a chance to play the game, but at the end of the day, right? Like what you’re playing for is literally a golden ticket for an opportunity to, to have a massive piece of the puzzle as it started out, come on
[00:13:45]Jason Malcolm: mind.
So we, we talked to a lot of people, all firms that their clients come to them and they say, I’m interested in. No, I can’t, I want to be a cannabis operator. And like, I want to know why I want to know about lobbying [00:14:00] before they even understand the process. Third is throwing money at lobby capabilities, right.
Lobby functions. So there’s going to be a lot of people that are going to have. A bundle of cash. Like Floyd Mayweather walks around in his private jet. You see on Instagram all the time and they’re gonna be, they’re gonna want to pay up for it to get the best chance possible. To get that license awarded now just don’t want to say no.
Give him New York to benefit it down and say, well, the first last are kind of in the middle. So maybe they will take lessons learned from other states. Right. And kind of try to perfect the process where they really want to, because on social equity and be true to those statements and be true to that hampered on the war, on drugs and everything else.
So if that’s the case, then that’s great right now, it’s all [00:15:00] about your story and about your team. And that’s, that’s more of an interesting approach in my opinion. And that’s. We’re helping some of our clients craft that story and develop those teams. And in some cases, some of our clients are working with social equity consultants, which I think is a really good idea as well.
So they really fully understand what that looks and feels like from application. Phelan
[00:15:23]Bryan Fields: for our listeners who are maybe not able to visually understand the complexity of some of these licenses. Can you kind of take us through just the sheer size of what these documents look like?
[00:15:33]Kellan Finney: Yeah. We have a client in Florida and that’s part of our due diligence process I went through and I read a lot of the licensed applications in Florida that were submitted.
From 2015 to 2017. And I mean, it is incredible the amount of information that they were able to accumulate into to a license application. I mean, some of them, I think are like 500 pages long and they have like a dozen individuals with [00:16:00] resumes that are just eye-popping in terms of some of the experiences that they’re bringing to the table.
And I mean, you got to remember that they in Florida, the way it played out is they, they only awarded a specific number of license. And then a lot of these companies went and actually sued the state of Florida to have more licenses released. But I make sense because they spent a ton of money putting these applications together and they got individuals that are just phenomenal in terms of their, their background and experience.
And for instance, in terms of the, the manufacturing portion, they were pulling people that ran massive manufacturing facilities for like Pepsi or Coca-Cola, or really, really well. Respected brands and were willing to jump over and they weren’t awarded the license. And so the complexity associated with even putting together an application, I mean, it’s a year long process and you have to pay all of these individuals to bring all of these unique skillsets to the table because it’s, most of the time, [00:17:00] like Jason said, you want to go for a vertically integrated application.
Right. And in order to do that, you need to bring in multiple people who are experts at cultivating, right? You’re talking horticulturists, you’re talking managers. You need to bring in people that are experts. Extraction from a, from a chemistry perspective, right? You need to bring in people that are absolutely experts at testing in terms of in-house analytics.
You need to bring the entire retail team together, right. And managing the real estate setting all of this up from a CGMP, common, good manufacturing practice perspective. Right. And then you need doctors to be able to, to evaluate the products. Cause it is a medical market, right. It’s insane. The quantity of highly skilled individuals that need to be brought together to even have a shot at getting one of these golden tickets.
[00:17:48]Bryan Fields: No. What I’m hearing is that the uphill battle is not really worth it. Right? And that it’s not really worth entering the space from a licensing standpoint. Is there additional outlets or ways into the cannabis [00:18:00] space If you aren’t afforded, let’s say a deep pocket of opportunity where you have an extensive team when you’re looking to get into
[00:18:05]Kellan Finney: this.
I mean, there’s, we’re talking the hardest markets to get into, right? Like Florida, 20 million people live there. If you’re trying to capture a market share, and there’s only a limited number of operators and there’s 20 million people. It’s a bigger windfall for you, if you will, right. Versus New Mexico, not, not nearly as many people live in New Mexico, you can go out and get a micro license.
If you’ve never grown cannabis, where you can be completely vertically integrated, you’re managing significantly less people, significantly less canopy. Right. And you don’t need a massive team and you can go apply for a license without nearly as much capital. Yeah. The upside isn’t as well as, as great as trying to just enter one of these massive market.
But you can still get your feet wet. I, Oklahoma, they’re just handing out licenses left and right in Oklahoma. Right? I mean, there’s states that you can go get a license. It’s just, there’s not the market opportunity that you see in the tri-states [00:19:00] or Florida or California for it. And for that matter, you know what I mean?
So there is lower hanging fruit in terms of. Trying to be an operator in the cannabis space. You know what I mean? Like right now we’re just discussing the hardest markets to get it.
[00:19:14]Jason Malcolm: And I do want to say, I do want to correct myself because she says something that reminds me of my comment on New Jersey.
New Jersey does allow for microbes. It’s not like you can have a cultivation of retail operation. You’ve got a micro business. Sure.
[00:19:32]Bryan Fields: I think this kind of goes into like the complexity of going forward and understanding like strategically which location you want to attack. So I guess then to kind of come back to you, Jason.
So when operators come to you in the space, obviously you have to do some due diligence first and kind of get the pulse of the room. Are they experienced? Do they have deep pockets? Right. If a group comes in. Jason, we were going for New York there, you’re going to have to kind of assess them and be like, Hey guys, like, I don’t mean to be the bearer of bad news, but maybe we should take a couple of miles to the left and go to this state or this state.
So [00:20:00] how do you kind of take that conversation and then kind of provide them, you know, strategic feedback on helping them best position to succeed.
[00:20:07]Jason Malcolm: It’s really, it’s a tough conversation to have. You kind of just tell them a lot of bad news upfront, right. And you have to be obviously very transparent with the clients and any kind of talk to them about, I think you have a great idea that you want to open up a retail operation and Brooklyn, New York.
That’s fantastic. But you know what? We tell our clients that you have about a million, 2,000,005 in capital sitting on the sidelines because the states would want to see some significant amount of capital on the application, at least in a bank account or an S. So that they’re have every competence in you that you could launch this operation successfully and not kind of bold in the first six months.
And then you have the location side of things, right? So it’s like, you have to, you have to confirm real location and locations in New York are not cheap to buy or to rent. Right? So now you have that. And then to, to [00:21:00] college point, I mean, these applications, I don’t know if new York’s or limit the exhibits, the amount of pages per exhibit like some other states did, but you know, you’re looking at hundreds of pages that you’re going to be submitting and the consultants that you want to have on staff to help you, if you do want that, as well as putting together a couple of hundred K for the licensing fee, whatever they like.
Right in the medical, I think there was like 200 and change. So if you don’t have access to capital, it’s going to be very, very difficult for you to operate in this business. And that’s kind of where I start my conversation, which I don’t know if it’s a good thing or a bad thing, but it’s very straightforward and to a point, and it gives everyone a really nice.
Overview, whether it’s negative or positive, what they’re about to get themselves into a lot of people love the idea of cannabis and love the idea of operating within the cannabis industry, but they also have the false impression that they think cannabis is a get rich, quick scheme because they hear all these great stories and [00:22:00] it’s the complete opposite.
of that It’s very difficult to operate within this space, right. It’s still considered a schedule, one drug. So even though states tolerate it and have rules and regulations around operating, but then each one of these states, you know, the big guy on top, it’s still kind of saying traditional financing No, thank you.
It’s not going to happen. Oh, wait. You want to get taxed? Yes. Well, we don’t admit apply to 88 and really prevent you from running off any type of business expenses and really give you a hard time in operating your business, cut into your margins. You know, so it’s a difficult conversation to have, but you know, a lot of people take it either way, right?
So they’re like they get really discouraged. Or they say, you know what? I think I have a really great story. I’m going to go for this. And we’re going to, we’re going to work with you on the strategy. I want to go out and I’m going to friends and family, but I think he could help me with this. And there’s other means of capital to support.
Obviously, you know, some of these capital, for instance, you know, we have crowdfunding [00:23:00] platforms that you could possibly launch on plan touching and non-clients. Companies as well as, you know, obviously if there’s a, there’s a big ask and a big need, there’s something that we could actually float to ECS or other investors.
Then we have those routes as well. But that’s complimentary Arco system that we have is, you know, capital is our investment banker pretty much FMR based, broken up and relicensed broker dealer ventures is memory-based managed fund. You know, deploys capital to early operators for launch opportunity than the other consultant side.
So we’re well equipped to handle all of those answers to all of those challenges, but it’s really up to the clients who really, you know, make that let’s face it. It’s, it’s a, it’s a difficult industry and nothing is guaranteed.
[00:23:43]Bryan Fields: Yeah. And I think what you said about the mindset is so important too, because if you’re going to go on and get deterred early on in the process of all of these obstacles, you’ll never make it in this space because unfortunately in cannabis, there’s all these additional obstacles.
And while we all can agree until we’re blue in the face, that they’re silly and [00:24:00] ridiculous, the way the game is played and everyone has to deal with it. And it’s not our decision that that federal legislation is like this, but that the rules are like this. This is just how the space is. And I think it goes back to understanding.
When you do make that commitment with a resource like yourself, Jason, like with art view, you’re looking for a strategic partner to help you every step of the way, because you’re going to run into these ridiculous obstacles time in, in time out, and you have to have the right partner to help you get through all of those.
And I think that’s one of the important conversations I don’t think are understood enough for some of the operators in the space. Consultancy sure has some sort of bad stigma sometimes attached to it. But at the end of the day, the type of resource and the value that your firm firm brings to the table is almost unparalleled to the type of need that exists between these operations that meets these challenge.
[00:24:49]Jason Malcolm: I completely agree. It’s important to have someone to help you one, grab that story and know what the state representatives are looking for, because we’ve done it before in other states and [00:25:00] two, you want somebody to really have the eyes and ears to the ground to adjust and amend for any type of last minute changes.
Which Does happen? Let’s face it, right. It always happens within each one of these states. So that’s, those are definitely some of the benefits. I think the big question here is will this operate or function the same way when the fed legalizes Cannabis Would it be as complex? Would it be easier? I don’t know the question.
And it’s funny. It’s interesting. Whatever, what happens to two 80 E does that still exist? If the legalizes cannabis at the national level? I think it’s a lot of tax dollars. They replicate
[00:25:40]Bryan Fields: that a very different way. I think they like their money and I think it does get removed. Obviously I would want to consult with someone as a professional, but I think it does remove because I think it was based on, I think.
Neil was telling us how it was based on a ridiculous story of how a drug dealer kind of was writing off his business expenses.
[00:25:59]Jason Malcolm: And [00:26:00]
[00:26:01]Kellan Finney: then they were like, okay, you were in this side, but no one else is going to wait
[00:26:06]Jason Malcolm: for that judge for that person ruin the fall.
[00:26:09]Bryan Fields: So let’s, let’s continue on the trial. With Gomo out.
I’m going to butcher her name. Kathy hotel is in, is that good for New York? Obviously, we’re kind of not doing so well right now. I don’t want to speak it well about my home state, but we’re not doing so great. And new Jersey’s chugging along. They’re getting things through there. They’re looking at early twenties.
And for New York, I mean, I don’t even know how, how
[00:26:31]Jason Malcolm: far we’ve gotten to appoint someone to, to lead the program. That’s the starting point. That’s the bottleneck in mind, but he no longer seems to be the front runner. And look, I think for a lot of people that are following the New York program or a better engaged time.
New York politics. I think it was very clear that governor Cuomo’s priority was not cannabis. It was everything, but I think [00:27:00] cannabis came along in the conversations because of the loss of all that tax revenue from the city tourism and everything else. Right. So I think that was an easy way to fill in that gap.
Now, with that being said, there’s really very little that’s been done. Our one of our own has been a legal counsel has been tagged as one of the candidates for a lead role within the organization. I’m not sure if it’s the executive director role, but it might be a sub director role and he’s pretty close to those conversations.
And I think New York will be Avery or leaning towards someone of color or a woman. I think the latter might make sense. You know, if you want to have a political spin on it, which I’m sure, you know, every politician or especially in New York, would like to have given everything to have FOMO, but once that person is appointed, then things.
And let’s not forget New York [00:28:00] slated. They already budgeted some cannabis revenue in their 2022 budget. And it’s in their best interest to move forward. As quick as possible know, kind of ended here with this kind of icing on the cake. For her, this is a quick and big wins. So if she wants to pursue politics, if she wants to run for the governor, this could be one of in her tool belt to say, Hey, this was lagging for months under my predecessor.
According to the table. And I think that will go over very well, especially in a lot of communities. It does.
[00:28:38]Bryan Fields: It’s an easy layup for her, and I’m hopeful that things move fast. But I’m going to ask you this question, Jason, because I think the one thing that makes things move faster than anything is money.
And if New Jersey comes online, let’s say early 20, 22 and New York is still just playing in the mud. I mean, there has to be some spreadsheet and Helen’s favorite way of [00:29:00] just multiplying the number and just watching the spreadsheet, just shoot up. I mean, there has to be just an insane amount of revenue that is going to be crossing over the bridge into New Jersey because people from New York want cannabis and if they can drive 15 minutes, but realistically, probably 50 crossings.
To get cannabis, they’ll do it. And I wonder when and how fast they move, because I think as soon as New Jersey announces a date, it’s no longer an F it’s a, it’s a really fast clap. So you think that’ll help make New York get their stuff together?
[00:29:31]Jason Malcolm: Probably. I mean, I was kind of hoping that the markets in New Jersey kind of go in line together.
It’s really important. It was such easy to access, right. It’s really important to not over enforce, not overtax one over the other kind of had our standardized format so that you really. Right. It’s kind of more about convenience, more than price. And obviously that’s not changed. I think New [00:30:00] Jersey is a huge influx of new Yorkers and new Jerseyans come in you know, mature smokers and very early on, you know you know, want to experience cannabis in some way or some form discreetly, but we want to be flooding to New Jersey and.
People are already driving to Massachusetts from New York and New Jersey and Connecticut to purchase a tested, regulated product from a state so they can feel safe in consuming, but whatever reasons. So I think New Jersey is going to have a nice big pop. I’ll be interested. I’ll be really interested to see.
Impact on Massachusetts program, right? When both states are up and running, especially when genetic and it’s running down, but we’ll add this conversation. My buddies, it’ll be interesting to see how they will operate.
[00:30:51]Bryan Fields: I think the, the original intention was to try to do some sort of tri-state agreement, but obviously we’re not doing so great there.
So let’s kind of switch, we’re switch [00:31:00] gears. The biggest misconception since you’ve been in the cannabis. I didn’t
[00:31:04]Jason Malcolm: expect. I knew what was going to be challenging because of the uncertainty, right? The taxation, all that stuff. But as you talked to a lot of your clients or prospects that matter, and they really share with you some of the burdens and some of the challenges, I did not expect that side of the story.
I mean, a lot of these cases, a lot of, a lot of operators opening close within 12 months because they just can’t. Don’t have the means to capital, to burn over the first six to nine months of operations. And that’s something that I didn’t really think too much about when I entered this market. I thought things are going to be.
These are cannabis programs and they would be turning into a dog years. That’s going to happen across the whole Eastern seaboard. I was thinking like very optimistic, but I didn’t think about [00:32:00] the challenges. And I didn’t know about two 80 when I walked into this business either. Right. So I think that was the biggest misconception is, is really understanding.
The true hurdles that these operators are faced with. Let’s face it in some cases, some of that’s truly capitalize or fantastic location and a lot of foot traffic and really deal with these hurdles as much as the others. But there’s a lot of people that don’t. And look without capital. You’re not gonna be able to operate within the cannabis space, right.
From friends, family, or PCs, et cetera. And then you also can hire professional services to help you with your strategy. Right? I think that’s the, that’s the biggest misconception that I knew somewhat about when I walked into this, but not, I didn’t fully understood it until I experienced it. As really well
[00:32:48]Bryan Fields: set, you could sum up your experience into a main takeaway or lesson learned to pass onto the next generation.
What would that.
[00:32:57]Jason Malcolm: Well, I think everyone that starts to kind of [00:33:00] branch out on their own, you know, like myself went to a different industry David and Jake, my partners that are better at helping me, you know, manage this business and deal flow and everything else. I think the, one of the biggest challenges is sometimes you almost feel, you know, in some cases you get a little defeated in some days, right?
Because of all these challenges that are out there. But I think the message here is if you’re passionate about. You see that there is momentum and traction, then I just stay the course and keep your head down and continue with your original business plan. And, you know, I think it has a passion for something.
I think if someone feels strongly about something, you know, I think you should explore it. I think you should move forward and should give it your best shot. Yeah. I think that’s
[00:33:42]Bryan Fields: really well said. I, especially in our industry. So let’s prediction time. We’re going to be on the record, New Jersey. There’s going to give a fake.
Yeah, he is set to legalize and adult rec can start, let’s say January 1st, 2022. So just a date to put on the calendar. [00:34:00] How soon after New Jersey comes online is New York and soon
[00:34:05]Jason Malcolm: after does New York come online after New Jersey?
[00:34:07]Bryan Fields: Yeah. So hypothetically New Jersey does it the first appointing plane to which we know not going to be a real date, but just as a placeholder.
How soon after?
[00:34:16]Jason Malcolm: Well, I was saying by earliest. And bye
[00:34:21]Bryan Fields: earliest two quarters after Helen.
[00:34:24]Kellan Finney: I agree. Awesome. I’m excited because I wanted to work this into the conversation. So I’m glad we came back to, this is some of the best Dysport performing dispensaries in Colorado when they first for the, like, for the last five years, I think has been dispensary’s out in the middle of nowhere on the border of Colorado and Kansas.
There’s no town. It’s just, they literally parked in dispensary. Right? And they’ve just been killing it because people are coming across the border. Like we were just talking for Kansas to buy legal, legal cannabis, right. Or Wyoming. Right. And so I think that new York’s a lot more progressive as far as the politics go and they’re going to want to [00:35:00] push it through quicker.
Once they see. The first few quarters of revenue posted by these dispensaries that are just sitting right across the bridge, if you will. Right. So I’m going to get quarter three, the end of Q3, beginning of Q4 next year. If, if New Jersey goes legal, cause these rules take a long time and like, okay, they get the rules in place.
You still have to build a facility to grow. And build a retail location, so then sell the cannabis. Right? It’s not like the rules are stamped and they’re like, okay, everyone can start selling weed. Right. There’s this whole infrastructure thing too. So it’ll light a fire under them. If it happens in Q1 of 2022.
You still got to build the industry, right? It’s not like you just turn the lights on and everyone’s buying cannabis left
[00:35:49]Jason Malcolm: and right. Earliest end of Q2, but the latest Q4, but it’s a large band. Yes. And to Kevin’s point, that supply chain has to be created. Everything has to really start from [00:36:00] scratch. It’s a medical market, but it’s going to be completely different.
And they’re gonna miss out on a lot of revenue next year. Right? So optimistic
[00:36:12]Bryan Fields: of those responses. I’m definitely wrong, but I just can’t, I can’t imagine, I can’t imagine that New Jersey is going to come online and we’re just going to sit on. So I’m going to say 30 days after
makes people move. And I think what happens is they get the politicians in the room. When they say, guys, this need Babin. Like there is, I couldn’t even possibly imagine how much money New York is going to miss out on. If they just like this, like, it will be a catastrophic mistake and just a monumental failure across.
Party lines, the globe, whatever you want to call it from a New York standpoint to miss out on what is so much needed tax revenue, just because we can’t get [00:37:00] out of our own way, it’s unacceptable. And I think that gets people to move a little faster and shore the supply chain issues, going to have a huge, huge problem, but all the operators already said, there’s going to be massive shortages.
The supply is not going to work from the beginning. Even if everything was queued up, we’re still going to have shorter. So I’m not really so concerned about that. And I wonder if there don’t have the infrastructure in line, if they start kind of being a little more leniencies on some of these medical dispensary’s and say like, Hey, like you might be able to switch.
I don’t know if they have these weird exceptions and how that works, but at the end of the day, money moves.
[00:37:36]Jason Malcolm: I would say let’s place a bet on this. And, you know the losers would take went out to dinner
in Colorado. So it’s gonna be hard for that to happen, but I would say, okay, let’s go with this stuff. You say 30 days out. So bad about that. When he, 22, I say two, two, I will stick with my early projection. And then Helen, what are you going to do? [00:38:00]
[00:38:01]Bryan Fields: This? Isn’t the price is right style, right? This isn’t one of those we’re 31 days and I’m out and you’d be closest to the home.
[00:38:10]Kellan Finney: You can have all of Q1.
[00:38:11]Bryan Fields: I think the important part is like, if you’re listening to this podcast, you should let us know how you feel. Do you think New York is going to miss out on it? And if so, what sort of timeframe after New Jersey kind of blocks a day and, you know, do we think you’re going to go for it?
Jason before we wrap, where can our listeners get in touch? If they have any questions that they, they have consulting projects, where can they reach out to Akio
[00:38:31]Jason Malcolm: consulting.com? Just hit the link, discuss your project and write us a note and we’ll get back to you within 24 48 hours. Awesome. Thanks so much
[00:38:40]Bryan Fields: for your time, Jason.