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!

Bryan Fields (Twitter: @bryanfields24) and Kellan Finney (Twitter: @Kellan_Finney) were fortunate enough to sit down with Mona Zhang (Twitter: @ZhangMona) , Cannabis Policy Reporter from Politico.

We were able to pick her brain on cannabis legislation as more states legalize cannabis.

In today’s episode you will find:

  • What will future legislation and policies look like?
  • States that are pushing forth THC Caps
  • How can we get pro and anti-legalization advocates on the same page.
  • Do limit licenses in certain states benefit the business or the consumer?
  • Big Companies vs Small Business in Cannabis industry
  • Corruption and political favoritism issues within the Cannabis Industry

Be sure to subscribe to The Dime Podcast to hear new episodes the moment they are released!


[00:00:00] Bryan Fields: This is the dime, dive into the cannabis and hemp industry through trends, insights, predictions, and tangents.

[00:00:11] What’s up guys. Welcome back to another episode of the dime as always. I’ve got my right-hand man Kellen Finney here with me. And this week we’ve got a very special guest Mona John states cannabis policy reporter from.

[00:00:23] Mona. Thanks for taking the time. How are you doing today?

[00:00:25] Mona Zhang: Thanks so much for having me. I’m doing well then crazy few months on the canvas

[00:00:31] Bryan Fields: there. Imagine we’re excited to dive in and tell him, how are you doing today?

[00:00:34] Kellan Finney: Doing good, just enjoying another sunny day out here in Colorado. Excited to talk to Mona Ramona

[00:00:38] Bryan Fields: before we dive in.

[00:00:39] I think it’d be great for our listeners to kind of get a little bit about your backstory and how you got into the cannabis.

[00:00:45] Mona Zhang: Yeah. I mean, I used to cover media. I went to school for journalism and I, you know, I worked at some media publications like media bistro and ad week. And I just saw a lack of good cannabis journalism, especially after the first states, Colorado and Washington legalized.

[00:01:01] And so, you know, I had this idea of starting a cannabis magazine that never panned out. And I thought, well, you know, I could start a newsletter. That’s like low barrier to entry. So I started my own cannabis newsletter and eventually started freelancing and doing like freelance journalism on the Cannabis That was in 2015. And that was really cool to see a place like Politico and national outlet hire a team of cannabis reporters, which they did in 2019. And so it’s been, it’s been really great to work at, you know, an organization like Politico and really delve into all of the nitty gritty of policy issues.

[00:01:37] Cause it’s just such a fascinating topic.

[00:01:40] Bryan Fields: Yeah, I think that’s really exciting and I’m excited to kind of dive in there. So what’s it like covering cannabis versus other industries? Do you think, as a whole politicos team of reporters kind of looks at canvas a little differently, like in some other industries, you know, can you kind of shed some light?

[00:01:55] What it’s like covering cannabis specific.

[00:01:57] Mona Zhang: Yeah, it’s really interesting because you know, political has a lot of policy verticals. I think cannabis is a special hole because it intersects with so many other policy issues. You know, like we’ll collaborate with our colleagues on the finance fee or the agriculture B, and these are reporters who have expertise in those areas and we’re kind of able to combine our expertise.

[00:02:20] But it’s interesting because of the federal state conflict, it just creates so many policy issues like banking, like taxes, you know, you have this state patchwork of regulations. I’ve been learning a lot about FDA, like food and dietary supplement regulations lately. And it’s just like, it’s really interesting as a policy reporter because you learn about all these other areas.

[00:02:43] Bryan Fields: Awesome. And what are those areas that I heard recently on your weak ass podcast? About anti legalization advocates. So on this podcast, we always talk about positives, but I don’t think we shed enough light on exactly why some people have hesitancy with cannabis. So what is the main driver? What do you think is the main reason these anti legalization efforts and what is their main stance?

[00:03:05] Mona Zhang: I think it really depends on the advocate. You know, I talked to a lot of anti legalization advocates and they range from just, I think like some people have still this like kind of reefer madness mentality. I think people have very valid public health concerns, you know, especially with regards to impaired driving or you use.

[00:03:25] And so it’s, it’s an interesting kind of spectrum of advocates. You know, a lot of times it’s like public health advocates or people. You know, fields like psychiatry and that type of thing, but it is. It’s interesting to see how that world has kind of evolved because I feel like a lot of anti legalization advocates are now sort of pushing things like the bill in Colorado to limit THC potency and canvas concentrates.

[00:03:51] The approach is shifting from being like anti legalization to like THC potency caps. And like, what else can we get in legalization bills from like a public health perspective?

[00:04:02] Bryan Fields: Dive in there, obviously from Colorado, that’s a big standpoint. Do you think Wayne maleness is describing that is the direction that most are taking or are there other areas that you see in Colorado that you think are kind of

[00:04:13] Kellan Finney: pausing it?

[00:04:14] I mean, I think Colorado is probably unique example because it has been legal for five years now, plus, right. And so it’s forced a lot of the people on the opposite side of the argument to mold new approaches and new angles to try to combat cannabis as it is. And I think that potentially. This is just my personal opinion.

[00:04:36] I think a lot of the advocacy and like the individuals that have a strong opinion, opposing cannabis, I think are slowly beginning to change as society. And as our culture changes and adapt. To cannabis being legal. And so with that, I think that it’s slowly starting to move that opinion from super, super far against cannabis to, okay.

[00:05:02] There could be some potential positives to cannabis. Now we need to regulate it. And, and I mean, with, with capping potency, I think that that’s important anyways. I mean, from a scientific perspective and a toxicology perspective, the dose is what makes the poison right. I don’t know anyone that really truly needs to consume 99.9, 9% THC on a regular basis.

[00:05:25] Right? I mean, you even look at like aspirin or other kind of medicines and they’re all dosed out properly, according to the person’s weight and their metabolic and all of these other. Variables so that you don’t poison them, right? Like you can drink too much water and die from drinking too much water.

[00:05:40] So I think with, with cannabis potency caps, I think that’s needed just to, to regulate it. I mean, you can’t go by 99% alcohol either. Right? You can get moonshine. And I think they cap it. Every state might be different than Colorado. 90% ethanol moonshine, right? And so there’s a need for those kinds of regulations.

[00:05:58] And I think that it’s in part, a safety feature that needs to be built into the regulations as well as it’s being driven by individuals that have started to accept cannabis as an illegal substance. With certain stipulations. What are your thoughts on that? Brian? I kind of go back and

[00:06:16] Bryan Fields: forth because at the end of the day, it sounds to me and please correct me if I’m wrong.

[00:06:21] It doesn’t sound like they’re like, Hey, we need more research in order to understand limits and putting people in safety places where like no cannabis is bad. The devil’s lettuce and all those outrageous stigmas like, oh then, and to me, maybe that’s just a more optimistic, welcoming stance of saying like, Hey, sometimes new facts are hard to quote Ben Culver and maybe some people in the older knees are a little more.

[00:06:44] Stuck in their ways. So I wonder how we kind of progress forward without the research, because even after we have the research, there’s going to be pushback, right? There’s going to be scientific saying, Hey, we need to do more extensive studies or, Hey, we didn’t study on this person. So, I mean, with all these, these areas, obviously the federal government is trying to balance this act.

[00:07:03] They’re deferring to the states to kind of go forward. Mona, what do you think is kind of the best way to kind of communicate through these anti legislation with people that there are positives in these? Yeah.

[00:07:15] Mona Zhang: Actually to the research point and the Colorado potency cap bill, there are a lot of research provisions and it is very much like we have to set up a way to research this stuff.

[00:07:25] And then this committee will do the research and then recommend like policies to us. So that’s like a really. Great thing about the Colorado bill. I think in some other states you do see a move to like, you know, Vermont was the first state to have any sort of PhD potency cap. And that was 30% for flour, which, I mean, flour usually doesn’t go above 30% anyway, and cannabis concentrates at 60%.

[00:07:50] But I think it is hard to have a policy discussion between. Pro legalization, anti legalization advocates, because the research is so recent and because the research is so mixed, you know, when I listened to these debates on state legislatures, it’s, you know, cannabis supporters citing all of this research to support their point.

[00:08:12] And then People who are against legalization, citing all this research. They, and the truth is there are studies that show youth use going up in states that have legalized marijuana. There is research showing youth use going down in states that have legalized marijuana. So the research is mixed and it’s really hard to like, you know, it’s just people taking whatever numbers, support, their

[00:08:32] opinions, last example.

[00:08:33] Bryan Fields: So what do you think would be beneficial in order to kind of help? Let’s say, get people on the same page. Do you think that’s just people on both sides of the debate, just kind of laying it down to the numbers. Like what efforts do you think would be beneficial in order to help kind of progress the conversation?

[00:08:48] Mona Zhang: I think

[00:08:49] that, you know, engaging with opposing points of view are a good thing, and I think it’s, it’s a lot easier done, I think on the state level than the federal level, especially in state legislatures where they’re debating marijuana, legalization, bill. And they’re really getting into the policy details and committee.

[00:09:07] There are anti legalization advocates saying, Hey, we don’t want marijuana legalization, but if you’re going to do it, please consider this amendment. You know, please consider, you know, doing some sort of public education campaign on impaired driving or, you know, and, and they are engaging with the issue in a more substantive way, rather than saying, we just oppose it.

[00:09:28] They’re saying we oppose it, but like here. I think this would make the legislation better. So I feel like that shift is just naturally been happening in state legislatures as the issue moves forward in the U S

[00:09:39] so then let’s kind of continue on that path. Why are states looking to overturn these initiatives that are majority approved by their local Reynolds?

[00:09:48] In

[00:09:49] theory, they are procedural legal challenges, you know, and Mississippi and South Dakota and Nebraska too. These are all legal challenges saying, Hey, these initiatives weren’t qualified for the ballot and a way that conforms to the state constitution, it violates a single subject rule that violates whatever.

[00:10:07] Provision of the constitution. However, I did talk to an illegal expert in state constitutional law, and he told me that all procedural challenges are really screened for, you know, policy issues. They don’t agree on the policy and they figure out a way to challenge it procedurally. And so I think you know, the fact that.

[00:10:29] Governor Kate Reeves of Mississippi. He’s very, very conservative. But he recently said he would be open to having a special session for medical marijuana because the court, the state Supreme court overturned the medical marijuana legalization law. And I think for politicians. You know, 74% of people voted for that.

[00:10:46] A kind of just like it causes a big issue in 74% of voters vote for something that the Supreme court overturns. It’s not great politically for him. So I think just like the sheer support for these issues are going to help move things along on that front. Even if the courts do strike it down.

[00:11:06] Bryan Fields: I think that’s really well said, and I want to go to you Kellen.

[00:11:08] Cause it seems like the cannabis wave is coming and some politicians are trying to slow the wave and others just kind of get gobbled up of it. We’ve talked about governor Rick, it’s talking about, if you legalize marijuana, it will kill your kids, which I will put on the top five best quotes of all time, because I still need to figure out how he came up with that statement.

[00:11:26] And if he just went off the Casper, if someone was like, Hey, like this is the word choices you’re going to use because we’re supporting this. So like, As a politician. Do you think that there’s a balancing act that they’re doing, trying to figure out how to keep their constituents happy, but also from a conservative nature of trying to slow down?

[00:11:44] Kellan Finney: So my disclaimer is I’m not a politician and I, my view on how a lot of these issues kind of play out is that I tend to favor. Yeah, they are playing by the rules of the law, but the motive behind how they’re playing the game. As underlying objectives that they’re trying to fit into the rules of the law.

[00:12:09] Right? So I think at the end of the day for Mississippi to overturn it, I think that there’s other people within the state that have alternative motives and they wield power and they are able to, to overturn those kinds of things based on non-legal motivations, right. Versus their own personal opinion.

[00:12:30] And I think that there’s a lot of like hidden agendas that drive these kinds of situations. But at the end of the day, I think the most important thing for people that are pro legalization of cannabis either medically or adult use that clearly this has been a very, very long. Battle. That’s been fought over the last 70 years or 80 years from a prohibition standpoint.

[00:12:53] Right. And so, or I guess 90, right, 1933 or something when it was. And so for the last 90 years or so they’ve been fighting this prohibition and we’ve made a ton of progress as a society in terms of adult use medical use across the United States. And I think that spending time to try to. Address, these underlining agendas they’re pushing, I don’t think is productive to the overall stance of marijuana legalization.

[00:13:23] Right. And so I think that just continuing to. Stand on the scientific literature that shows the positive attributes of cannabis consumption and the positive attributes of all these minor cannabinoids, as well as, I mean, hemp for instance, right. Hemp is part of the cannabis plant. Right. And there’s a ton of building benefits that it can provide society.

[00:13:46] I mean, hemp rope and create, right. So I think that if we just continue to fortify the positive sides of the. I think that eventually these kind of underlying hidden agenda topics from my perspective will kind of just fall to the wayside. I don’t think they’ll ever just completely go away, but I do think that as support continues to be generated for it, if we just continue to look at it from a positive stance and continue to have the conversations, right.

[00:14:14] I think it’s important that scientists talk to politicians and politicians talk to scientists and, and there’s this ether that all of the information is communicated. As fast as it can. I think that’s the only way to really, really approach it. I don’t think that you’re going to make any progress standing in the mud and playing the same game that the other side is playing in my opinion.

[00:14:33] I mean, I could be wrong and that’s my nonpolitical opinion, I guess. Right. What are your thoughts though? I think that’s all

[00:14:38] Bryan Fields: really well set in, and it’s such a challenge from understanding how like the policies go with politicians, but I want to kind of switch gears because there’s an area that you lightly touched on.

[00:14:47] When we’re talking about the limit licenses in certain states, obviously some states have gone ahead and limited the amount of licenses they’ve given out. And there’s obviously a bunch of different ways that that can be evaluated. So Mona is that intended to benefit the state, the businesses or the consumer when they limit the number of licenses that are given out?

[00:15:05] Oh,

[00:15:07] Mona Zhang: is it intended to benefit the state or the consumer? I mean, I think it depends on the state. You know, when Virginia was having its legalization debate, I was really surprised the lawmakers put a statutory cap on licenses and the reasoning behind it was to prevent any big marijuana companies from harming smaller businesses.

[00:15:31] I question whether that is the best way to achieve that goal from a policy perspective, because we haven’t really seen that happen in other states with limited licensing. Generally speaking, when they’re limited licenses, it is the better capitalized, bigger companies that are, you know, favored in such a market, but that was their reasoning behind it, which I found pretty surprising.

[00:15:54] So, I don’t know, you know, it really just depends on the state and in Connecticut, for example, you know, I was talking to one of the policy. People at Lamont’s office. And he was saying like, we don’t have a statutory cap on licenses and it’s going to be awarded by a lottery instead of some sort of like merit-based process, precisely to avoid some of the pitfalls that you’ve seen in other states.

[00:16:17] And so, yeah, I mean, and I think there’s also a sort of fear when it comes to legalization that you’re going to see pot shops on every corner. And I think that kind of fear also drives some of this you know, license, cap policy.

[00:16:30] Bryan Fields: What are some of those pitfalls? Some of the other states I’ve seen just in case our listeners aren’t familiar.

[00:16:35] Mona Zhang: Yeah. I mean, there’s, there’s corruption issues, especially when there’s limited licensing. There’s definitely, I mean, there’s outright corruption issues. And then there’s sort of like political favoritism issues where people who want licenses, you know, make these huge donations to certain politicians, campaigns or whatever.

[00:16:52] And then there are a lot of. Entrepreneurs who lose out on licenses. And it ends up being like in Missouri, for example, there’s this like huge legal issue with all hundreds of entrepreneurs appealing their licensed denials and the state is spending millions of dollars on like fighting these appeals on outside attorneys.

[00:17:10] And. it Can delay the launch of the market. It can delay the growth of the market. And, you know, it’s interesting because it’s a sort of area of common ground between more, you know, lefty cannabis advocates and like the right leaning, more libertarian free market types who are like, everybody should get a shot at this.

[00:17:32] And, you know, we should let the market decide the winners and losers rather than the state deciding the winners or losers. Through what is often a dubious merit based scoring process. Once you have that, it opens up a whole other can of worms.

[00:17:47] Bryan Fields: That’s perfectly said. And I think, you know, we’ve had conversations with operators who are looking to kind of expand their licensed opportunities and ask for recommendations on which personnel to put on this.

[00:17:56] And they say, Hey, we’re just looking for someone for the license. And we kind of like you were saying muddies the conversation because these people aren’t really attached and they are there just for the merit base. I can see the corruption aspect, right? If people are doing favors or even differently said making donations for political campaigns, obviously that’s a huge issue and it does favor some of the bigger players, but at the end of the day, cannabis is very expensive.

[00:18:21] And I kind of look at it like a golden ticket opportunity. In these limited licensed states, you kind of agree with that. Like in the Willy Wonka style, like you open up, if you, if you get that lottery ticket and you open it up, you’ve gotten herself out opportunity to touch some market share in an untapped market, especially here on these.

[00:18:36] Mona Zhang: Yeah, absolutely. It is a golden ticket. And because of the cap, these licenses are worth more. And it is an interesting debate because there are states that, you know, really wanted to send our social equity and their legalization bills. And they’re like, well, we need to cap the licenses because of this.

[00:18:53] And there are other states that are like, we really care about social equity and that’s why we shouldn’t capital licenses, you know? So it’s interesting. And I think, you know, I recently. Wrapped up a story on main and social equity was never really that big of a discussion in Maine, but they’re low barriers to entry.

[00:19:11] Make it really easy for anybody. You can pay a few hundred dollars and start your canvas business with a growth hat and a few hundred dollars licensing fee. Like the barriers to entry are very low. And the medical program, at least right now. And it raises some interesting issues with these other states that have approached social equity with these, like, you know, convoluted programs that they’re having trouble implementing.

[00:19:36] And it’s like, You know, some states are achieving some of those goals by not even having one of those programs and just having low barriers to

[00:19:43] Bryan Fields: entry, you know, find balance. So Kellen, what do you think they should do? Obviously, the software equity is a huge deal and letting people out of prison is a huge deal and kind of adjusting for some of the wrongs of the past.

[00:19:55] But how do you stay at school? Balancing those.

[00:19:58] Kellan Finney: I would like to say I’ve seen a successful social equity program played out in a state. I just haven’t yet, as far as what the vision has been and the execution associated with that, I think Mona makes the best point when she said that it seems that states that have completely ignored that have actually provided the best opportunity for minorities to get involved in the industry.

[00:20:22] Right. And, and better themselves from that perspective. As far as releasing individuals from prison, I think that that’s a no brainer and that should completely be the forefront of all of these discussions. I think it should actually take precedence over the social equity aspect of it. Right. I think we should fix what we did wrong before we kind of keep moving forward.

[00:20:43] Right. And so that’s my, my stance on it. As far as limited license states versus not limited licensed states. I mean, I worked in, in Washington where you could just go buy a license if you had enough money and they just kept giving them out. And it created a really Rocky start to the industry versus Colorado, because you would walk into a dispensary and there would be.

[00:21:04] 2,500 different brands on the shelf because it’s a free market. The best will survive. They want to encourage competition. And if you show up, like, let’s see what you got kind of the situation, right? It makes it a lot harder to regulate. You saw from a business perspective, I experienced a lot more shady interactions and a lot more bad actors because.

[00:21:25] Anyone could come and show up and just play the game. But it turns out the game was really challenging to play from a traceability standpoint and, and following all the rules properly. And it led to a lot of sour, a sour taste in my mouth when dealing with a lot of different companies, trying to outsource certain aspects of, of the supply chain.

[00:21:45] And so that was a huge challenge. But then the ops side of that would be Colorado where they didn’t give out a ton of licenses and yeah. I think the logic behind it was, it’s easier to regulate a couple really large players than it is to regulate everyone in their mother kind of getting involved. And so I understand the logic associated with that.

[00:22:08] What that created from a negative standpoint is it created these quote unquote almost like monopolies. Like you can look at Florida too, right? Like queen camp might have a monopoly depending on how you look at it. Right. And I’m not downplaying that or applying it. I’m just kind of stating the facts that when you own over 60% of the retail stores available for consumers to go purchase their product.

[00:22:31] Might be close to monopoly, you know what I mean? And, and you can make arguments that that could be good. It could be bad. And we’re not here to really do that. But I think that no matter limited license versus not limited license you from a conversational standpoint, it can be framed. As either positive or negative, depending on who is kind of framing it up.

[00:22:54] And so on the east coast, at this juncture with like New York being in the limited license state, there is no question that it will favor the big MSLs that are highly capitalized that have teams, lawyers that can go through these two, 300 page doc it’s to follow the rules. The barrier to entry. Is much, much greater than any other state from, from that perspective.

[00:23:18] And so it’s challenging if you’re a small mom and pop. In New York that was looking to get in the Canada space. Unfortunately you should probably consider relocating somewhere like Maine or, or even New Mexico. Right. New Mexico had these, these caps on the big licenses. Right. Which I think they have a good hybrid system right now, but they also have a small micro license.

[00:23:39] Where you can go grow 200 plants. The barrier to entry from a financial standpoint is much smaller. You can be completely vertically integrated. And so I think that that is an attractive way to approach this. I think that there’s also potentially some scientific experiments going on. I guess you could say from a social perspective.

[00:24:00] So if the federal government wants to see what works best, it makes sense to let some states have limited licenses, but some states, everyone in, I have a couple of hybrid models and then they’re like, all right, let this play out for five years and we’ll see what works the best. So when we go to, to implement this on a federal level, that it’s actually something that works and we don’t have to.

[00:24:21] Sit there and revise it year after year and cause all of these struggles, I mean, you got something to say to that.

[00:24:26] Bryan Fields: Brian, let’s hear doesn’t that make it harder for people like poor Mona. Who’s got to cover all these different states with all these different policies and all these different obstacles. I mean, what you described to me is pretty much saying that in New York, If your mom and pop moved with smaller, safe, cause you don’t have a chance.

[00:24:42] And I think that’s kind of unfair because at the end of the day, this is America, right? The land of the opportunity. And if you’re telling people that here’s their opportunity to dive into cannabis and to fulfill their entrepreneurial spirit, but they can’t do it because they don’t. Billions of dollars in teams of lawyer.

[00:24:57] I don’t think that’s really so fair. And for, for Mona, I mean how she she’s covering all these states and then she’s got to communicate to her readers. Oh yeah. That was this state. And then with this state, it’s different. I mean, we’re talking about an educational difference between all in all the information and then being able to comprehend where like over complicating the policy, if that’s the way that’s going, what do you think about that?

[00:25:18] Mona Zhang: Yeah, I think cannabis policy can be really convoluted. And you see with these legalization bills, they’re hundreds of pages long because to legalize marijuana, you have to, you have to change all these other laws that intersect with the criminal justice system or with the education system or whatever.

[00:25:36] That’s why these bills are so long. I think with the licensing issue, it’s like, it doesn’t necessarily have to be this binary of like limited licensing or not, you know, States where the law gives the power to the regulators to sort of roll out licenses as they see fit. I think that strikes a good balance between just like a free for all which leads to, you know, an Oregon situation where you have this boom and bust and like people go out of business.

[00:26:01] Cause it was just so oversaturated. But if you give regulators the flexibility to be able to like, Give out licenses as they see fit. And as the market will take, you know, that seems to be an approach that has yielded less problematic outcomes.

[00:26:20] Bryan Fields: I want to dive into a recent conversation. Your colleague now the FERC had with Bernie Sanders, and if you haven’t heard it, it’s definitely worth Googling the short story as it is.

[00:26:30] She approached Bernie to ask him a question. She introduced herself as a cannabis policy reporter for Politico and his immediate response was, are you stoned? Mon is that like a traditional, do you think, like most politicians are going to have some sort of normalized response like that? Like, I don’t think that’s a fair response, but I mean, obviously he answered honestly, but what do you feel about.

[00:26:50] Kellan Finney: I actually

[00:26:51] Mona Zhang: was surprised by that exchange. I don’t think that is a question that Natalie gets regularly when she’s reporting on the hill. So coming from, you know, a Senator that has been like a long time champion of legalization is a little bit surprising, but also just funny. I mean, the exchange is funny and if you haven’t listened to it, it’s it’s online.

[00:27:12] And we released the audio on dispatch as like a short episode. But yeah, it does. It does show how far this issue still has to go. If you’re like, you know, reporting on cannabis policy and people are asking if you’re stoned, it is like, you know, we, we were talking earlier about like, if you are, I don’t know, an alcohol industry, reporter people, aren’t asking you when you’re doing your job, are you drunk?

[00:27:36] You

[00:27:36] Bryan Fields: know, I think that’s perfectly wasn’t, especially for someone like Bernie, who, you know, they always talk about how he so far released policies for him to say that it’s kind of opening and I’m sure. There’s some Midwest states out there that are using that as like a championing ground and be like, Hey, see, like, if Bernie feels this way, you know, it’s normalized where the stigma still exists.

[00:27:55] So countless, I mean, your thoughts on it.

[00:27:57] Kellan Finney: I think it just, honestly, I think it just highlights how far we still have to go from a cultural stigma perspective, right? Like, Even individuals that live out on the west coast and in California or Oregon or Washington, or even Colorado, we cannabis has been legal for some time.

[00:28:15] Now, especially in California, that’s kind of been legal since the nineties. You could potentially make an argument, right. And the, that amount of time has allowed the society as a whole. To kind of assimilate to cannabis, being another recreational outlet for humans to consume for whatever reason.

[00:28:39] And that’s, that’s led to the change in overall opinion and perception associated with the plant and the use of the plant versus over on the east coast where it hasn’t been so prevalent and it still is treated. As it was 30, 40 years ago, you can just see that, that it takes time for these kinds of and cultural changes to actually precipitate.

[00:29:06] Right. And I think that that right there, it just perfectly sums up. Yeah, we’ve come a long way from prohibition, but we still have a long way to go to change the minds of the general population across the entire country and across multiple demographics.

[00:29:24] Bryan Fields: I think I brought that and overall, like I think it hurts the industry.

[00:29:26] I think that continues to solidify a stigma. That is a negative one. And at the end of the day, people use cannabis solely for medicine. And when you ask that question with the connotation and the perspective behind that, usually at least for me, feels like a negative one. So I’m hopeful that in the future, politicians and people will understand that that’s not likely the best initial response when being approached by people.

[00:29:49] Sort of quickly switch gears, Delta eight, very popular subject. We’ve talked about this a bunch of times. Mona, do you think Delta aid is a fad or do you think it’s here to kind of.

[00:30:00] Mona Zhang: I think it’s here to stay. I think there are people who are, you know, I’ve heard a lot of anecdotal stories from people who are legitimately helped by Delta eight, from a medical perspective who have tried CBD, who have tried Delta nine, THC and medical marijuana products.

[00:30:17] And they say Delta eight has helped me the most for like, you know, neuropathic pain and those sorts of issues. Again, all anecdotal, no science on this at this point, but I think. You know, it is a different compound that Delta nine THC. And I can see it staying, but I there’s obviously like a fad aspect of it.

[00:30:37] And it’s recent. I don’t know, recent growth in the market. Because of various factors because of, you know, states that don’t have legal cannabis because of, you know, the sheer amount of CBD isolate that’s been sitting around in the hemp market and people need an outlet for that. And there, there are all sorts of things contributing to this.

[00:30:58] It is a trend in some respects.

[00:31:01] Bryan Fields: Yeah, I think growth might be understanding it’s like an explosion, right? Especially here in, in some of the like New York, for example, where it’s not, you know, adult use is not possible. So people kind of lean towards products that they can purchase over the internet and are a little more trusting of it.

[00:31:16] So Kevin and I have kind of dove into this from understanding whether it’s a fat are here to stay. And we wonder if, whether or not this is just kind of a short term. Temporary and public, government’s kind of like, Hey, you know what? Like this is illegal, but then my opinion, and then I want to go to you telling is that maybe the CBD market will look for like another sort of compound to kind of find another offshoot for a revenue stream Kaelin.

[00:31:37] Kellan Finney: What’s your thoughts? I think that there’s no denying that when humans ingest Delta aid, it does cause Affects right. More so than CBD, but less so than Delta nine THC. There’s no denying that as far as the manufacturing practices that are being implemented to produce Delta eight, I think that’s where the majority of the questioning is now being centered.

[00:32:00] And I think that’s where Colorado has. The department of health, that’s where they took their stance on. It is just from the lack of regulations and the lack of understanding and the lack of testing associated with the manufacturing of Delta eight. And I think that’ll get sorted out in time, right?

[00:32:15] It’s just a matter of kind of trial and error and figuring out. The best way to do it, what’s the safest way. And how do we regulate it? Right? Because the last thing we need from an industry standpoint is some kid in New York to consume a Delta eight product. And it just so happened to have some sort of chemical that was really toxic in it, that wasn’t removed from the manufacturing process, and then they get really sick.

[00:32:38] And now there’s this front, this headline story. Kid dies of consuming, dealt ADHD in New York. You know what I mean? I think that’s the last thing the industry needs, but we’ll work through all of those as a society. And then as far as outlets for CBD, I do think that this is just the very beginning of the iceberg, right?

[00:32:57] Delta 10 is probably next. I know that when they start moving around that, that double bond, in terms of Delta eight, Delta nine Delta 10, it does have different binding affinities to your CB one receptor. And it interacts with the endocannabinoid system slightly differently, which is why you see these anecdotal claims associated with a better consumer experience with Delta eight versus Delta nine.

[00:33:22] I know that it doesn’t have as high of binding efficiencies. A lot of people say they can actually function. More so on Delta eight than Delta nine. But I mean, at the end of the day, there is. The, our understanding of cannabinoids and the endocannabinoid system is in its infancy. And as we continue to move forward, there’s just going to be more and more breakthroughs from a scientific standpoint on these minor cannabinoids and how they interact with the human body.

[00:33:49] And I think this is just the beginning. And so Delta 10, if I had to. If I was a Batman, I would say Delta tens, the next big one to kind of take off and we’ll see how that differs from Delta nine and Delta eight, a and then, I mean, there’s just a JC acetate, right? There’s another one that makes the water soluble.

[00:34:08] And so there is a whole plethora of different molecules that can be achieved by using CBD as a starting material.

[00:34:16] Bryan Fields: We got a lot of science and research studies. So more

[00:34:20] Kellan Finney: content,

[00:34:20] Bryan Fields: right? Delta 10, for sure. For us, we’ve already heard the rumblings there and we’re going to do another episode coming up on that because people start asking questions and, you know, the only way for us to understand is to kind of just dive in and figure out, you know, what about it?

[00:34:33] So Mona, the biggest misconception since you started working in the cannabis.

[00:34:40] Kellan Finney: I mean,

[00:34:40] Mona Zhang: I guess just to go back to the Bernie thing is like this idea that it is some sort of like silly topic, which I think the fact that, I mean, hopefully more major news organizations will hire cannabis, beat reporters, but it’s.

[00:34:58] You know, consequential subject and it intersects with so many other areas, whether it’s criminal justice or public health or financial services, or what have you. That’s a really complex and important issue that affects a lot of people. And I think one big misconception now that I think about it is that there’s this idea that like, oh, people don’t really go to jail for cannabis anymore.

[00:35:24] And. You know, there are still tens of thousands of people incarcerated for cannabis. There are people thousands of people who are serving de facto life sentences for marijuana offenses. So it, it is a really, still an important social justice or criminal justice issue. Even though a lot of states have decriminalized cannabis, it’s there’s still a lot of issues on that

[00:35:43] front.

[00:35:44] Kellan Finney: Absolutely.

[00:35:44] Bryan Fields: Well, today you could sum up your experience into a main takeaway or lesson learned to pass on to the next generation. What would it be? I think

[00:35:53] Mona Zhang: it’s important to be clear headed when looking at the impacts of policy with these social equity programs. Like I covered Oakland social equity program when it first came out and it was, sounded so good on paper.

[00:36:09] And I was like, wow, this is so innovative. It’s so cool that Oakland is doing it. And when other jurisdictions started doing it, I was like, wow. Like, it’s amazing how much this has shifted the conversation around cannabis policy and how the sort of debates in the legislature are about this issue. But I also think there is a sort of like desire to seem like you’re addressing the problem from a political standpoint.

[00:36:35] You know, we’ve have not seen one of these programs be really effective in terms of their stated goals and achieving their stated goals. So I think it’s important to just look at the data from, from all of these various different policy proposals. Really think hard about like what, what is actually effective at achieving these outcomes.

[00:37:00] And I think a lot of states are starting to do that. You know, a lot of states are looking at Illinois as a cautionary tale. Now, instead of like, in the beginning, Illinois was hailed as like, it’s going to be this leader in social equity,

[00:37:10] Kellan Finney: you know, the Illinois thing. I it’s just incredible. Right. Like, absolutely.

[00:37:15] They still haven’t given out one. Have they? Yeah.

[00:37:18] Bryan Fields: What do we think is the issue there? It’s an

[00:37:20] Mona Zhang: implementation issue. This is actually. What’s been sort of like possibly delaying the launch of new York’s market is because there is this sort of disagreement between the governor and the Senate about who should be in charge of implementing the cannabis legalization law.

[00:37:36] And you might pass a law that looks good on paper, but if you stumble on implementation, then you know, you’re not achieving those goals

[00:37:45] Bryan Fields: plays a big factor.

[00:37:47] Mona Zhang: Yeah, absolutely. I mean, with all of these licensing things, lawsuits are just one of the big reasons why things get held up. People don’t get a license and they Sue, you know, they, a judge just overturned Detroit’s licensing regime, which is supposed to favor legacy applicants and, you know, ruled it to be probably unconstitutional.

[00:38:06] And it just, it just creates all sorts of delays and

[00:38:09] Bryan Fields: problems. Yeah. Lawyers just continue to win. All right. Let’s do prediction time. Do you think. In president Biden’s first term, he will find federal legislation. No, I don’t think so.

[00:38:23] Kellan Finney: I don’t think so. Either

[00:38:25] Mona Zhang: things can change crazier. Things have happened on the cannabis beat.

[00:38:28] You might not think something’s going to happen and it happens, but as it stands now, I am skeptical that it will happen.

[00:38:34] Kellan Finney: I wrote a, I read a headline though. That might be interesting. And we talked, talked about this on a podcast last week as well. I read a headline. Amazon taking the stance that they did.

[00:38:44] It was actually in the cannabis scientists, the day that we talked to on the column and MC and it actually said that Amazon taking their stance on no longer drug testing, their employees. And I didn’t read the article, unfortunately, but then the headline also integrated the aspect of Amazon showing support for the Moore act as potentially a catalyst to facilitate federal legalization within the next couple of years.

[00:39:13] Is that where you’re gonna go, Brian steal your thunder.

[00:39:16] Bryan Fields: So I always tend to believe that like, sure. Like from a news standpoint, they haven’t made much noise. Sometimes the smaller moves and the smaller announcements kind of compound these bigger ones, right? Like Amazon making these public stance, the NFL saying they’re going to invest all this money.

[00:39:32] It just seems like people are starting to slowly adjust their thought process. And to me, these big became, this are making public stances differently than they normally had. Makes me believe. There’s some aggressive momentum that they’re like, Hey, we need to kind of change our PR tune. I’ve got a different stance on why Amazon said that.

[00:39:51] I think there was a variety of reasons that I’m not going to kind of spoil it and how you have to read it in the monthly playbook, because I just finished that pizza. Definitely. It’s definitely not just one time. Amazon is pretty strategic with how they take their stances and there’s a variety of different reasons why I believe that they said that.

[00:40:08] At the end of the day, I’m going to take the opposite of both of you and say, yes, he does. Obviously I don’t think it’ll happen, but I’ll just say it for counter stance. I think he does it. And I think it’s a, it’s a quick one. As we’ve seen on each post, I mean, a year ago, we didn’t have any of these states and now like they’re just falling like dominoes and who knows.

[00:40:25] We could meet up in six months and be like, wow, that was crazy. We all said, no, look it’s for sure. Yes. And I think in the cannabis industry, it moves super, super fast. And sometimes by not thinking something’s gonna happen. It means maybe things will happen faster than we believe.

[00:40:38] Kellan Finney: Yeah, that’s

[00:40:39] Mona Zhang: a good point.

[00:40:39] And the Amazon point is an interesting one too, because I mean, at the end of the day, it’s like, are there 60 votes in the Senate? And does Amazon change that? And with. Legislation. It’s so hard. Like people can agree on legalizing cannabis, but then agreeing on actual legislation is a different matter.

[00:40:58] That’s why New Jersey took so long. That’s why New York took so long. And so getting everyone who might support legalization as a concept, In the Senate to agree on an actual legalization bill as another matter. And to get 60 votes on that, it’s looking tough at this point, but it’s not out of the realm of possibility.

[00:41:17] Kellan Finney: And what you’ve just

[00:41:17] Bryan Fields: said is just so perfect, but also so frustrating and the same thought, right? Everyone agrees that this is supposed to happen, but to vote on it a whole nother Stanton. And at the end of the day, not saying money moves, votes. Money moves boats.

[00:41:31] Kellan Finney: Amazon has a little

[00:41:32] Bryan Fields: bit of money to John’s.

[00:41:35] So Mona, before we wrap, where can our listeners get in touch? What areas on social media are you available? And we’ll link it all in the show.

[00:41:42] Mona Zhang: Yeah, I’m on Twitter. It’s my last name. First name Z H a N G M O N a M. You can follow all of our coverage at politico.com/cannabis. And. Yeah,

[00:41:56] Bryan Fields: thanks so much for your time, Mona.

[00:41:57] Thanks for having

[00:41:58] Mona Zhang: me. This was fun. Thank you.

Thanks so much for listening to The Dime . Subscribe or follow us on Seeking Alpha, Libsyn, Apple Podcast, Spotify, Google Play or Stitcher. And we’d really appreciate it if you could leave us a review on Apple Podcasts. It helps others find our show.

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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!

In This Episode, Bryan Fields and Kellan Finney sit down with Collin and Mike, founders of MJ Research Co

Colin and Mike set out to revolutionize the Cannabis market and provide insightful and professional-grade research for investors.

This episode of The Dime Podcast explores the market trends and investments of the Cannabis industry as well as:

  • What trends do we see in the current Cannabis Market?
  • How can reading margins and scalability help Investors?
  • How will pricing be impacted as more states legalize?
  • Will the demand for Cannabis change with growing licenses increasing?

Learn More at https://mjresearchco.com/

[00:00:00] Bryan Fields: This is the dime, dive into the cannabis and hemp industry through trends, insights, predictions, and tangents.

[00:00:11] Bryan Fields: What’s up guys. Welcome back to the episode of the dime as always. I’ve got my right-hand man Kellen Finney here with me. And this week we’ve got a very special guest Colin Farian and Mike Regan of MJ.

[00:00:22] Bryan Fields: Gentlemen, thanks for taking the time. How are you doing today?

[00:00:27] Bryan Fields: Yeah, we’re still have to kind of dive into a variety of different topics. And I think before we can get into MJ research and the, and your backgrounds, I think we should start with one of the hardest questions there is in the game, which is living in your ceased.

[00:00:40] Bryan Fields: Gentlemen, who is your ideal cannabinoid session with ,Collin go first

[00:00:46] Colin Ferrain: ideal cannabinoid discussion.

[00:00:49] Colin Ferrain: So smoke cessation

[00:00:51] Colin Ferrain: session. Ooh, man, it’s hard because there’s a lot like between, you almost have to subsection it between the folks that really [00:01:00] established the industry and the folks that are moving into long.

[00:01:02] Colin Ferrain: I would say in the folks that are moving along, Ben cobbler is probably an easy option. And folks that have got us to where we are now. I mean, is Steve de Angelo to even option. I go with those two.

[00:01:17] Mike Regan: I will get certain listen in that, as you’re saying, like we’re actually, everyone’s smoking up and actually discussing everything because I’m not an enormous consumer.

[00:01:27] Mike Regan: I actually do have a good memory of one. Which was a, the fish show and Worcester in June, 2012, where I think the entire hockey arena was hotbox. So that was a pretty good stock session. No, it was really good music. And when you know, just a good vibe for nano 10,000 feet, that’s nice that

[00:01:47] Bryan Fields: 10,000 people to put that on for everyone else.

[00:01:51] Mike Regan: It is like, I’ve seen this in a minivan. I’ve never seen this in the DCU center choices.

[00:01:59] Bryan Fields: You’re going to have to have [00:02:00] us come back to that. So, uh,

[00:02:06] Kellan Finney: Elon Musk, right? Just like Joe Rogan on his podcast. It’d be nice to have him on and smokes weed. And Chad,

[00:02:12] Bryan Fields: what about you, Brian? Cuban probably you’d probably be too, too high energy for me though. I’d probably give me some anxiety because we’d just be ripping through ideas on it, like, all right. The session went completely.

[00:02:24] Bryan Fields: Let’s have back to the, to the question. So let’s dive into your backgrounds. Obviously cannabis is a really unique space. How did either of you guys get into the space? Mike, do you want to go first? Sure. In terms

[00:02:33] Mike Regan: of getting into the cannabis space I joined about two years ago. Well, it really gets more again, more about three years ago.

[00:02:40] Mike Regan: My background is, uh, basically a life-long long, short equity investor, uh, various hedge funds and on the sell side, Uh, doing primarily fundamental bottoms up, uh, research, you know, investment research, uh, but had done some quantity as well. Uh, two years ago it was [00:03:00] looking at, uh, Scott’s miracle grow on something totally unrelated to cannabis.

[00:03:04] Mike Regan: Uh, it was a pricing power thesis versus home Depot Lowe’s. And I had to figure out what this Hawthorne division was. Uh, they had, which you know, was became pretty quickly obvious what it actually was really doing so that I was like, this is actually pretty interesting. Which also coincided, I guess, with the Canadian, the Canadian stocks ripping up to same valuations, uh, through that, just doing that research, I found MJ biz daily is like good source of information for the industry.

[00:03:31] Mike Regan: You know, just looking at dedicated myself. I’m like, look, this whole thing could be, and then they had a job posting for we’re launching. Premium financial service. Uh, we need someone like we can teach you cannabis, but we need someone who knows everything. That’s not cannabis, like, you know, financial analysis, company analysis, company strategy, you know, valuation, things like that.

[00:03:52] Mike Regan: So I joined them in 2019, uh, to write for them. Their premium investment service or calling investor [00:04:00] intelligence at the time. And then that was going great until COVID hit. Uh, and they had to retrench given that, uh, there was no conference in Vegas, uh, you know, no MJ biz con. Uh, but I still thought the general concept was a good idea and yeah, pretty convinced of the overall long-term macro freight train investment theme, you know, for the next 10, 20 years, you know, I think cannabis will be a pretty interesting investment thing to, to know better.

[00:04:26] Mike Regan: And it has a lot of market inefficiencies. So I’ve launched M J research go to basically continue that concept of, you know, institutional professional grade investment research. Um, this nascent industry. Yeah, we’re going to have a lot of lights to it and, you know, Long, and I think eventually short opportunities across both the sector and other sectors and you know, the whole supply chain and disrupting traditional industries as well.

[00:04:51] Mike Regan: So that’s, that’s basically what that brings me to here. Uh, making my column jumping. So I started

[00:04:59] Colin Ferrain: like pretty [00:05:00] traditional finance background. Um, up in Craig Hallam in Minneapolis is a boutique research-driven investment bank and was lucky enough to get hired for a long short fund in Boulder, Colorado.

[00:05:11] Colin Ferrain: And after a couple of years working, uh, doing equity research analysts, uh, analysis on the bicycle. Actually underwrote a company called Mr. Dean back in 20 16, 20 17 or 2015, maybe regardless. This is at the time when cannabis companies were literally grown out of a storage locker in Boulder, they had rented out three of them put on the wall.

[00:05:34] Colin Ferrain: They had this huge cultivation, just like right off of Pearl street, which is downtown Boulder, if you’re familiar. So underwrote that, that did not go well. I can still, I think it’s publicly traded at this time, but sparked my interest in the industry and moved from equity research and want to get a little bit more empathy for the operator role.

[00:05:53] Colin Ferrain: So I switched into the cannabis industry where at first I had, co-founded a company that I was doing [00:06:00] computer vision over. Uh, called deep green, weird, sexy, and like pests and pathogens and doing a bunch of IPM work with companies and that transition into a role at urban grudge to the picks and shovels company, where I was directing all MSO accounts, uh, doing strategic operations.

[00:06:16] Colin Ferrain: Cultivations and then ongoing, uh, operations for cultivation. So like IPM and then design strategy. And then I found Mike probably like a, yeah, couple of years later, uh, listening to a podcast and it was thinking that I wanted to get back in the investment world. And so I reached out to Mike and said, yeah, okay.

[00:06:32] Colin Ferrain: I want to build the exact same thing that you’re building. Um, would you, would you have me and. It

[00:06:38] Bryan Fields: proved cannabis love story. Let’s dive into MJ research, you know, what is the value that it brings the industry and who does it really target from an informational time?

[00:06:49] Mike Regan: It’s we, we think we’re stronger together than apart as well.

[00:06:52] Mike Regan: So I was like this, this will work. Uh, we, you know, our strengths, uh, sort of compliment each other just in terms of. More [00:07:00] experience. Yeah. Living through the internet, boom and bust and resurgence and the housing, boom and bust and, uh, you know, multiple market cycles and looking at every industry. And Collin is super deep knowledge on, you know, the plants and the cannabis itself in terms of the firm, you know, we’re basically trying to target credited.

[00:07:20] Mike Regan: Institutional grade or just institutional investors. We’re basically providing what the research that we would want if we were running a fund or if we were at a fund and we’re like, Hey, this has been morning email to my portfolio manager of the things I’ve been saying that we should be doing. And we’re basically trying to bring that institutional level professional.

[00:07:41] Mike Regan: Great analysis to this sector. Uh, yeah. Cause we, we, we see a need for it. Uh, as an increasingly matures, I think that’s also, there’s going to be an increase in demand for that among a lot of investors that currently can’t, you know, because of the federal illegality of their own, you know, investment mandates or the, you know, what are [00:08:00] the things trade.

[00:08:00] Mike Regan: They can invest directly in this space, but we think that’s going to keep changing with increasing legalization. So. And on top of that, it’s a very, very complex space, especially like in the capital structure. We can go into that later. Never seen capital structures. This complex, the regulations are always changing.

[00:08:15] Mike Regan: It’s a bunch of micro markets. So that’s basically what we’re trying to do. So we’re providing, we sort of mentally divided into tools, which are, you know, the things that investors need if they want. to truly have accurate, actionable information and sort of make their own decisions. You know, these are the tools they’ll need, you know, in terms of like our, our dynamic top table, we’re working on some supply demand, analyses, normalizing things across industries to help prepare the companies.

[00:08:44] Mike Regan: Um, and then also, you know, just actionable company, specific research. Like we think this company is interesting. You should buy it. This is, we’ve done the research on it. You know, here’s the consensus view. Here’s our contrarian tape. Uh, on it, then, you know, here’s our evaluation. [00:09:00] We’re sort of bouncing those out as well as we’re building those up.

[00:09:03] Mike Regan: And then if there’s anything else I’ve missed column that you’d like to throw in.

[00:09:06] Colin Ferrain: No, I think that’s, that’s great, Mike. Um, I think what got us here and, you know, what makes us different is that when we were both evaluating the business model, we found that a lot of the folks that are providing research have a.

[00:09:19] Colin Ferrain: And a bias for whatever reason, if you’re a sell side bank, you’re trying to get a banking deal. If you’re running a research site, that’s driven by ads. You often have relationships with the folks that are providing the advertising with you. So what we have built as a no pay to play web or platform for investment research.

[00:09:36] Colin Ferrain: And I think that sets us apart as being, you know, you know, skeptics and neutral among all the ideas we’re looking at.

[00:09:42] Bryan Fields: So before we dive into some of the. Do each of you have a favorite operator from like a large scale and a small scale that you’re kind of rooting for one, that’s kind of caught your eye, that you, you know, you have some information that you can share that just kind of gives some insight into some of the tremendous value that MJ research brings to the table.[00:10:00]

[00:10:00] Colin Ferrain: Yeah, I’ll start, but I’ll do a contrarian one to kick us out. Especially right now, the Cresco labs has been trading down pretty significantly. The capital structure is not great. The financial disclosures and accounting have been. Not great, but an operational standpoint, if you look at their organizational structure and their team relative to the other, MSOC, they’re about as mature as it gets.

[00:10:22] Colin Ferrain: These folks have an entire lean manufacturing division that’s going out and figuring out how to optimize processes from dispensary down to cultivation. And this is a team of 25 to. 35, um, across the entire, um, and GTI has a similar organizational structure, but it’s, I mean, honestly, it’s been mostly replicated from the folks across the street at Cresco labs.

[00:10:44] Colin Ferrain: Um, and they do really deep data analysis on every single decision that they’re making. Um, which I think is a unique differentiator. Whereas everyone else in the industry seems like they’re just trying to keep up with operations and it’s like, they’re gonna, like, they’re gonna throw a reverse osmosis [00:11:00] system in their cultivation.

[00:11:01] Colin Ferrain: Just because they don’t exactly know where the city water is testing that. And they think that that might be a fixed. Whereas you’re going to have Cresco labs is running individual pilots in a single grow room at each of their cultivation facilities. And then making that decision, which is something that’s always really impressed me.

[00:11:18] Mike Regan: So let’s say something you’re saying it’s something you really like, and you’re rooting for. I try to, you know, Try to always be independent on the, you know, I have, you have an investment thesis, it’s a good buy at this price. I think it can go to that price versus the agrees. And, uh, well, I’ll go into a little bit that, uh, we wrote up for our premium clients.

[00:11:37] Mike Regan: Couple of weeks ago when it was about 16 was a Weedmaps, which now is just the specs that we wrote about was still silver spike, but, you know, looking forward on it, when I first came out, I was very excited about it. Cause I’ve been looking for the, uh, you know, the NASDAQ traded ancillary company that has a good business model that can, uh, you know, at this point beyond, by [00:12:00] institutions, looking for cannabis exposure that can’t actually touch the plants.

[00:12:04] Mike Regan: Uh, and also it doesn’t have, you know, it doesn’t have a lot of, any of the questions around, um, you know, supply and demand on the plant side. And then when we met, just came out and, you know, we started writing up actually back in January. Um, and those are only riots are actually available. Uh, you know, they’re free.

[00:12:21] Mike Regan: You just have to sign up. The concern was always that the, uh, illicit stores that they had in the past and the, the investigations as to whether they were still aiding and abetting that, so first it was saying, you know, they removed all the stores back in 2019 in California that were unlicensed. Uh, and when we started doing our research, we actually then found that there was, uh, you know, some stores that seem to be, to take advantage of a C uh, like a CBD only loophole where the listing is CBD only.

[00:12:50] Mike Regan: But if you look around at other sites, you know, if it’s a store and say 1, 2, 3 main street CBD, there happens to be 1 23 main street, THC at the same address with the same [00:13:00] logo. Yeah, that’s the only THC on Weedmaps. So yeah, you’re not breaking any laws, but it looks like you’re, you know, it looks like you’re doing something else on the side.

[00:13:09] Mike Regan: Then it was like, this seems a little too risky because you can’t capitalize revenue that could vanish overnight. Right. If, if there’s a risk that, um, government cracks down and says, okay, you know, 300 of your listings have to be taken off immediately then, you know, investors don’t like that. And we actually discovered, uh, than a may was they seem to have actually cleaned up.

[00:13:30] Mike Regan: You know, all those, all those listings that we had originally found back in January were then gone. And then on top of that, they, uh, also remove the unlicensed stores in Canada, which should then if you actually do the math. All the Canadian revenue was unlicensed. So they basically abandoned all the Canadian revenue.

[00:13:47] Mike Regan: And that actually in my mind is a huge positive, because it shows that this management team is actually serious. They’re actually walking the talk essentially. So then that actually then lets it have a higher multiple, if the revenue [00:14:00] stream is truly clean in that respect. And it also forestalls that the investigation.

[00:14:06] Mike Regan: But the subpoena from, uh, you know, the, the DOJ, um, if they’re actually saying like, you know, the thesis is we’re a partner to the industry in terms of, or a partner to the regulators in terms of only having licensed stores. So then taking that risk away, then you’re just left with two-sided market, you know, high barriers to entry on that.

[00:14:22] Mike Regan: And There are markets where they dominate, you know, generating 25% margins where the pricing story that they’re both increasing the value and showing that their products are deliver more value to their customers and raising the prices on them. Which is a huge benefit for margin expansion. And then also the upsell on software as a service, the adjacent software technology that dispensary’s need.

[00:14:44] Mike Regan: So you combine that and then, uh, it’s also, you know, trades on the NASDAQ. Doesn’t actually touch the plant. Doesn’t pay 280E taxes today. You know, if I’m a big mutual fund that just wants to own a tech company that happens to sell to the cannabis industry, but it’s not a cannabis company specifically.

[00:14:59] Mike Regan: I can actually [00:15:00] buy it. You know, that all sets up for what I think is a pretty interesting long case. With a good business model that generates cash that is actually earnings positive after taxes. And, you know, Yeah. Still then benefits from, you know, uh, like the overall canvas long thesis of increasing penetration across the U S so the guide said, in a nutshell, we’ll go into sort of where I think the stock will go.

[00:15:22] Mike Regan: We, you know, I think you have something for the premium clients in terms of our actual upsides and downsides and the risks and the such, but that’s, that’s in a nutshell that, uh, I think that’s a pretty compelling case in cannabis right now in the cannabis sector. Although too.

[00:15:37] Bryan Fields: Long-winded no, I think that’s really strong.

[00:15:39] Bryan Fields: And I think you did a really good job of teasing at the end. If you want to see, you know, the other information sign up and we can plug the link right there in that moment. So I think you did a really good job there. So let’s kind of get into some of the trends that you’re seeing from a macro standpoint, obviously like you were saying, Mike, the cannabis injury has got a variety of different issues with Intuity, the state by state issue.

[00:15:58] Bryan Fields: So what macro trends are [00:16:00] you using to kind of overall guide the industry and kind of shed some light on that?

[00:16:06] Mike Regan: I just in terms of overall macro trends, I mean, it’s more understanding digital markets and, you know, sort of the individual margin structures of those on a macro basis. And this is more longer term that, you know, the trend has picked up recently, but I don’t think it ever really went away.

[00:16:23] Mike Regan: It’s just was dormant for awhile will be consolidation. Right. There’s you know, in 10 years there’s probably going to be fewer larger operators, at least in the public side versus. Yeah, the ones that we have today, uh, you’ve already seen, you know, truly is acquiring hardware. Um, and so instead of like, oh, this is, yeah, this means mega mergers are bad.

[00:16:42] Mike Regan: Cause like, I don’t think they ever really went away. It’s just the, the industry will consolidate over time. This one just happened to have happen. Now we have our own reasons why we suspect it happens, you know, on May 10th, specifically, you know, versus in a year or two years ago, uh, related to harvest capital [00:17:00] structure and voting structure.

[00:17:01] Mike Regan: But know that that’s just an overall trend of, you know, who is gaining increasing scale at this point. Has a benefit for access to capital in terms of the, you know, the large players typically have sort of better access to capital and at lower costs of capital. That probably won’t always be the case though.

[00:17:20] Mike Regan: Uh, you know, if we have increasingly realization or safe banking, you know, that’s more of a macro trend of, um, what levers within the companies actually start to change. Uh, and actually we just wrote this up about inflation and Canada. Cannabis generally has sort of, uh, the, the cottage industry nature of it and the nascent, goodness of it leads to opportunities long-term to improve with scale and new processes and automation, you know, a lot of, um, you know, they can probably cut costs a lot more.

[00:17:50] Mike Regan: And that’s more, a longer term trend that we’ve been looking at actually column. You’re probably better to speak about the, uh, you know, the, um, you know, the scalability questions, but, you know, we’re sort of looking at who [00:18:00] can operate efficiently. And that doesn’t necessarily mean who has the highest margins today because I could have a hundred percent margins tomorrow.

[00:18:07] Mike Regan: If I fired everybody. And June would be a great month, but then July would fall off a cliff. Right? You can’t operate a business that way. So it just because you have high margins today is, I mean that you’re necessarily going to be able to maintain those margins as your business gets bigger or as, you know, as the time changes.

[00:18:22] Mike Regan: So I don’t know if you want to reflect on some of those concepts.

[00:18:25] Colin Ferrain: Yeah, I’ll start with the macro trends that we’ve been looking into. I can note are the scalability and then supply demand. And so the scalability side is just that, I mean, you guys know as well as anyone that MSOE is at this point are much closer to startups than they are to establish public companies, um, like incumbents and industrials.

[00:18:44] Colin Ferrain: Right? So when you look under the hood at these companies, it’s just mayhem, you know, like they’re scaling quickly, they’re hiring quickly there. They’re acquiring companies and, you know, it’s just like from the outside, it looks really neat. And when CEO’s go and tell you, like we’ve got plans, [00:19:00] a, B, and C, but when you look at the inside and like, you know, going into the offices, it’s like people are flying all over the place, not enough desks for people type of structure.

[00:19:09] Colin Ferrain: And so you look at the scalability, it’s often that how disciplined are they being about making sure that their business grows because often. Dynamic, you have counter issue of making sure the business can, Gail is going to hurt your near term margins. And that puts this, you know, this like temporary bare thesis in front of investors, or they’re like, well, their margins are not nearly as good as X, Y, and Z, but in reality, they’re prepping for the next five years.

[00:19:31] Colin Ferrain: Whereas companies, X, Y, and Z are only prepping for today. And I think that’s really. Piece, they have to look at when evaluating these companies because you want to hold them for five to 10 years. There’s plenty of upside, um, as the industry continues to grow. Um, and so that’s one of the macro trends we’re looking at it’s everything from like, do they connect their ERP?

[00:19:49] Colin Ferrain: To, uh, their POS in the retailers, right? Like is the POS and the retailer connected to alive. Many of this got real integrations or are they basically selling inventory on their live menu that they [00:20:00] don’t have that there’s dispensary that picks off customers when they go to the store because the product isn’t actually there, right?

[00:20:05] Colin Ferrain: This stuff happens all the time. Then the other item is high demand where, you know, the companies that have the best gross margins right now are usually in states that have limited licenses. Flower prices. And so we’ve been digging into looking at the central supply in any given market, relative to the demand today, and then the demand five years from now.

[00:20:24] Colin Ferrain: So just assuming that the entire per capita population of an individual market say like Colorado, you know, scales to maturity and wherever that maturity is, Colorado continues to grow. So it’s kind of interesting to see that move on. But if you look at states like California, where we’re doing a deep dive on right now, The potential capacity of California, they could plant more cannabis than the entire state would need multiple times over.

[00:20:49] Colin Ferrain: Now it doesn’t necessarily equate it to low prices because not everyone’s putting plants in the ground and not everyone’s actually using their licenses, but if they wanted to, and as more legislation comes on to allow [00:21:00] more outdoor grows and greenhouses, and these perfect agricultural markets like, or sub markets like counties, Santa Barbara.

[00:21:07] Colin Ferrain: Uh, then sure. Uh, Monterrey, uh, Sonoma, um, that will change the entire direction of the pricing. And eventually there’ll be spine to the entire country, but for now it puts risk on the near-term pricing. I

[00:21:18] Bryan Fields: think that’s perfectly said, and I want to dive into Callan because I know we’ve been to some operators that are one of the largest in the space and been overwhelmingly surprised by the way they handled their business.

[00:21:28] Bryan Fields: And we kind of were blown away to think that like, these guys are doing tremendous numbers, we got in there and it’s like you were saying, colonnades, it’s chaotic. And we kind of looked at each other. And it’s one of those where we just kind of got like an inside look and just couldn’t believe how that was going through Kaelin.

[00:21:44] Bryan Fields: You want to shed some light on that experience and kind of piggyback off what Carl was saying. Yeah.

[00:21:48] Kellan Finney: That’s funny that you brought that up because that’s exactly where my head was at. And I was also debating, I was like, probably shouldn’t say the name of the company or anything like that.

[00:21:58] Bryan Fields: It’s

[00:21:58] Kellan Finney: completely, [00:22:00] it’s completely accurate.

[00:22:00] Kellan Finney: Right? Like we went into their facility and check it out and I was just like, What are you guys doing? I was like, this is a total dumpster fire. This is one thing you guys are not doing that. And I was like, all of this other stuff you guys already bought. No one unboxed it. It’s just sitting here in a corner and you’re outsourcing that.

[00:22:17] Kellan Finney: It’s like, what are you guys doing? It’s it’s, it’s absolutely insane. And just like you said, people are running around. They’re like, we don’t have enough boxes for the cartridges, like the throng cartridges, like this order was supposed to go out yesterday and they’re just all like, what do we do? And it’s, it’s just insane.

[00:22:34] Kellan Finney: And they need high quality people and the training and all these things are just so under appreciated and like in a, an established vendor industry where they have this system. Onboarding people and getting them trained and having them all check all these boxes and having them competent. Like all those systems are aren’t in place yet.

[00:22:54] Kellan Finney: And they’re all so fluid within these companies because they’re all still trying to figure it out because it’s not like there’s a, [00:23:00] a rubric for how you run, uh, a company that has. Operations and every different state, that’s a micro market. You know what I mean? So they’re, they’re having to figure this all out on the fly, which is clearly has been, uh, a challenge.

[00:23:16] Kellan Finney: You know what I mean?

[00:23:17] Colin Ferrain: Funny. Cause like, if you didn’t know them, you would have trouble imagining that they were multi-billion dollar

[00:23:24] Mike Regan: industry later.

[00:23:26] Bryan Fields: We kind of assume. That, that they’d be so much more put together and that none of these issues would arise. And then we kind of like took a step back and we thought about it.

[00:23:34] Bryan Fields: It’s like they’re scaling so fast that they’re not even able to consider it. Right. They bought us equipment because someone made that decision. And then it’s Callum said, he’s like, they’ve got a million dollar paperweight in the corner, just collecting dust. And they need that piece of equipment that they’re outsourcing because likely the person that made that decision got hired and moved on to the next role.

[00:23:53] Bryan Fields: And then the person that came in was like, I didn’t buy that. I don’t know where that goes. I mean, this is the part of the industry that kind of excites me the most [00:24:00] because unless you’ve been there and you don’t realize that, like that’s all easy money that they’re going to, once they get like in a rhythm and start optimizing,

[00:24:08] Mike Regan: I guess two other trends we see in the first is, you know, cannabis industry is not just, you know, people growing the plants and science dispensers, it’s the entire supply chain that will need to grow up along with this.

[00:24:20] Mike Regan: Like part of the reason that it might be so chaotic is that there isn’t the, go-to a normal company. Yeah, the go-to outsource or like, Hey, we need this to be done. Just do it. Okay, fine. They do it. There there’s a whole supply chain that hasn’t been built yet that needs to be built. So it will be all these other companies that, yeah, we don’t actually touch the plant.

[00:24:37] Mike Regan: We don’t actually, you know, we serve as the cannabis industry and help them better organize it. And then also just sort of how the margin structure changes. And this is more for investors that we try to think a lot about, you know, is, um, the margins you see today will probably change versus. In the future in terms of first it’s how many, how much you have to scale up that [00:25:00] infrastructure as you grow second is also what happens as, especially with too many.

[00:25:05] Mike Regan: I wonder if that is at least for the U S operators that are propping up some of the margins. Implicitly any margin has to sort of cover the taxes, right? So all of a sudden you take two 80 to way, you know, then it’s not like all that money just flows to investors and investors has get all that know the managing teams are going to look at it and think, well, okay, well now we’re not writing that check to the government.

[00:25:27] Mike Regan: What can we do with that? Instead, we can reinvest it in marketing re-invest and hire more people. Maybe even reinvested in, you know, either lower prices or, you know, eats in a competitive consumer industries. They quote, invest in price. The grocery stores do that all the time. And that basically it’s just a price cap.

[00:25:44] Mike Regan: So you know that if you take out that enormous cost to them right now, and then no one has. You know what I’ve seen in other industries like this happened in 2017 with the tax cut and jobs act. When, you know, the government is universally lower, the [00:26:00] corporate tax rate for everybody from like 35 to 21% businesses that had strong, you know, that weren’t very competitive and it bought back stock with companies that were in competitive consumer businesses and industrial businesses.

[00:26:11] Mike Regan: A lot of them just spent more money on the things they were already doing. Like they celebrate. Uh, strategic growth plans or they were forced to give people raises because like, well, you know, we’re, we’re reinvesting back in our employees where we are investing in price, we’re reinvesting in, you know, product quality.

[00:26:28] Mike Regan: And you know, it’s not like that money was just kept by it by investors, but since EBITDA, which is what the industry is usually valued at is a pre-tax measure. You know, you have this scenario. EBITDA margins go down net income margins or the after-tax margins actually go up. And it’s a question of our investors looking closely enough at that dynamic, because if you just need to kind of give a dumb margins, you’ll freak out.

[00:26:51] Mike Regan: They’re like, oh, this is terrible. Your margins are going down. I don’t want this. It’s like, well, they’re going down, but you’re making more money. So that’s actually a good thing. And our cost of capital is lower because. You [00:27:00] know, uh, tax cuts, the cheapest form of capital possible. Right? I don’t have to, the government is just not taking as much money.

[00:27:05] Mike Regan: Great. You know, I don’t have to like go, you know, pay interest to debt holders or dilute the equity holders with more shares. Right. So it’s actually all good, but not in the simplistic. Oh, you know, 21% of gross profit goes into my pocket, says the investor, that one. Yeah, nothing

[00:27:20] Bryan Fields: in cannabis is simple like that.

[00:27:22] Bryan Fields: So I want to ask a different question. Vertical integration. Does that help the operators you think, because we were talking about all the challenges with scaling, so vertical integration as a whole, are we in favor of it? And from an investment side, do you think it’s beneficial to be investors understand the challenges and the complications of being vertically integrated and having to have all these efforts and all these resources, and then the inability to kind of perfect a certain area of the supply chain.

[00:27:48] Bryan Fields: Colin, do you.

[00:27:49] Colin Ferrain: All, um, I might tease and then hand off to my ex. I think that there’s, there’s a bit of nuance that vertical integration is good for, from an investment standpoint and for operators right now [00:28:00] in the future. Won’t be. So at this point, you’ve got relatively wide margins across the supply chain.

[00:28:05] Colin Ferrain: You move from cultivation to processing, uh, cultivation, manufacturing to processing, to dispensary’s even. But eventually that gets more competitive. So there’s limited license, let’s back up. And these limited license, Stacey of vertical integration, you can sell from your cultivation to your retail or even doing in your cultivation to wholesale and make plenty of money.

[00:28:24] Colin Ferrain: Now you see margin compression. When you look at a competitive market like California or Oklahoma, even Colorado with the exception of this year where margins have gotten better back to a better place, but take California, for example. When the prices go down, you see margins get squeezed across the supply chain is generally starts further downstream and then works its way back up.

[00:28:45] Colin Ferrain: And you have a shakeout of operators, which is not obviously great for investors, but if you’re in Pennsylvania, you basically make money, hand over fist. Florida’s a better example, um, because you’re vertically integrated and because everyone else is locked out. And I think in the [00:29:00] future, as it gets more competitive, more players come into this space, more people are specialized, like.

[00:29:05] Colin Ferrain: A very low probability that someone that has operations in 12 different states. And has vertical integrations is going to be able to compete with a herbal in California. Right? It’s a super well run a business run by people that have former experience in food distribution. The idea that like someone will be able to compete for a core competency when that’s all they do every single day seems farfetched.

[00:29:30] Colin Ferrain: Um, so that’s my general take. Good for now.

[00:29:33] Mike Regan: Mike, the general concept is exactly it’s it’s, you know, thinking fourth dimensionally, if you will. It’s when, you know, when in the industry growth cycle is attractive right now, the lack of a reliable supply chain across the whole sector is what we were talking about before that there’s going to be this whole ancillary supply chain that needs to get built as well.

[00:29:52] Mike Regan: You kind of have to be vertically integrated because you know the one, one thing, that’s your bottlenecks, your products. If you can’t get it and you got to do it yourself, You know, [00:30:00] writing up that know Ford for model T’s during, after world war one needed to be vertically integrated. They owned forests and iron mines and railroads and glassware.

[00:30:09] Mike Regan: Yeah, because they were sick of supply chain disruptions, and there just wasn’t a reliable supply chain, but four, it doesn’t do any of that today because there’s an entire mature supply chain. Uh, we’re nowhere near that yet. So today, you know, having the, the benefit is having the greater ax, you know, guaranteed supply of product control over your quality, you know, and things like that.

[00:30:31] Mike Regan: Is more important than, you know, shaving an extra 5% off of the supply contract, but if fast forward and all of a sudden, if there’s robust wholesale markets or companies that specialize in each part of the supply chain, You know, when you have that specialization, they’ll probably be able to do it better and more efficiently because they’re, you know, like concept they’re really good at that one thing that it makes more sense to, you know, it’s cheaper and better just to hire the outsource this to the person who knows that, who knows how to do it [00:31:00] perfectly, but we’re not there yet.

[00:31:01] Mike Regan: And then, yeah, it’s also a lot of laws for us. And you can kind of get away with it because it is still micro markets, but you know, if all of a sudden you took away those micro markets, you’re going to see, I think a lot more specialization over the longer term. It says that’s a general answer, but it’s that’s I think where we’re going.

[00:31:18] Mike Regan: Over the long-term you only want to touch on that as far as vertical

[00:31:21] Kellan Finney: integration goes. I think the one area I look at it as more of a optimistic perspective. I think that vertical integration is really good for all these companies to approach right now because all of these different management teams are have strengths and they all have weaknesses.

[00:31:38] Kellan Finney: And I think in 10 years, They’re going to figure out that, Hey, our team is really, really good at this section of the supply chain. Right. And then they’re going to cut the fat and then that’s going to help establish. That robust ancillary wholesale market and that supply chain for outsourcing. Right. And you’re going to see all these companies kind of just go [00:32:00] and fit into what they’re really good at.

[00:32:02] Kellan Finney: Right. And so if they’re doing everything and they find out, Hey, we have employees that are absolutely phenomenal at understanding purity of water and all these things, right. From a cultivation perspective. And then they double down on that and then they start outsourcing the other things. I think that that’s going to be really, really strong for the whole industry as a whole.

[00:32:21] Kellan Finney: Right. And so I think that you’re going to see more and more companies start to. Put resources into the areas that they’re really skilled at, right? Whether that’s retail production or extraction, or if it, or cultivation, or even some of the ancillary services like Weedmaps and other companies like that.

[00:32:39] Kellan Finney: Right. And so I think it’s really good for the industry. I think it. It’s tough now, though, because these companies are forced to do things on their own and it’s going to significantly affect the margins because they aren’t as good at it as say another operator or a company down the line in 10 years.

[00:32:56] Kellan Finney: Right. And it also makes it really, really bad. Well, what are your [00:33:00] thoughts on vertical integration? Brian? I

[00:33:01] Mike Regan: think

[00:33:02] Bryan Fields: everyone said it perfectly here. I just don’t think people outside the industry realize actually how challenging that is in Collin. You lightly touched on that when you have all different states with all different regulations and you’re trying to be vertically scaled the challenge and the complexity of being good at everything is really, really, really hard at the end of the day.

[00:33:20] Bryan Fields: Right? Supply chain disruption. If you don’t have flour, And you are not controlling spiking, you’re not selling fire products. So at the end of the day, you kind of have to, and we all agree. And I think that’s part of the excitement that I personally have is that once some of these challenges are lifted off these operators and they can really double down on what you were saying on, on what they’re good at, you’re going to see kind of the best of the best kind of move to the forefront.

[00:33:42] Bryan Fields: And then at the end of the day, you’ll see those numbers kind of follow suit. But right now we’re all in agreement kind of has to be the way it has. Good now bad later. Well,

[00:33:50] Mike Regan: I guess the interesting part of that trend we’ve noticed recently is the larger operators are trying to invest more in cultivation.

[00:33:58] Mike Regan: Surely just. [00:34:00] Uh, whether they’re in the process of buying Los Suenos, which is the largest cannabis grower in Colorado is a giant outdoor farm in Pueblo. And that was interesting to me. You know, if you look back a year ago, you had clearly fought blue kudu, which was a little edibles, kitchen and processing.

[00:34:18] Mike Regan: It wasn’t a, by the blue kudu, random guessing it was just buying the assets and the distribution that they had in 200 stores at the time. It’s probably more now to basically convert that, to select a block of this library. But like if someone in that company has decided we need to have a better the supply and they bought the largest supplier that, you know, I think to date has been mostly wholesale.

[00:34:39] Mike Regan: You know, they sold most of their goods wholesale to other growers. You know what happens when clearly, you know, then bye. That largest supplier are they, are they looking to basically sell wholesale in Colorado or are they looking to guarantee supply? You know, H how much of that supply is just going to go into select, uh, he basically goes into the blue [00:35:00] kudu kitchen and then just pump out select products for the Colorado market.

[00:35:04] Mike Regan: I’m not sure, but it’s know it’s interesting in that we’re, we’re seeing this trend of additional people investing in additional larger scale cultivation stuff, Columbia care, uh, by that giant greenhouse in long island, uh, you know, in glass house, coming public by the stack. That’s, uh, you know, they’re going to have a giant.

[00:35:24] Mike Regan: I think they’re basically a converted giant greenhouse in California. It’s then blow out that more in a retail wholesale, you know, joints, a joint thing. And that goes back to the whole over time. You’re probably going to see greater scale. And the question is the larger operators that have probably better access to capital right now consolidating a bunch of smaller growers.

[00:35:45] Mike Regan: Then you’ll have, you know, that that can be the step function. In sort of margin and capital availability near term and the longer term, how much cultivation do they want or need. Um, but that’s a far longer term question. There’s plenty of [00:36:00] cultivation to consolidate in the near term better

[00:36:03] Bryan Fields: to have and not need the need and not have, and kind of when you relate it back to the pandemic, when you’d go to the food store and there’d be nothing left, but a couple like leftover pieces of bread and people are like, well, I guess this will do.

[00:36:13] Bryan Fields: Sometimes it feels like when people go to dispensary and they’re out of products and there’s like a couple of random pieces left. People are like, well, that’s perfect. Like I w I came here, I waited in line for two hours, like, and this is all that’s left. Perfect. I’ll take that in right now. Like, we don’t really know what the demand of cannabis is.

[00:36:27] Bryan Fields: We just know it’s more and more, but let’s go into another trends. We talked about the trends that you’re seeing. Let’s talk about trends that you’re not seeing, that you’d like to see what type of trends are out there that you think we’ll see. Fine. I guess

[00:36:42] Colin Ferrain: it’s an easy segue, like trends that we’d like to see soon would be more operators focusing on their core competencies.

[00:36:49] Colin Ferrain: So as Kelly mentioned, like that’s a great point that a lot of these folks that you’re starting to see who wants to be good at what. Sometimes we’re even seen who’s good at what, [00:37:00] but it’s not always the same. And so when you look at me, like, excuse me, securely, right? Does anybody really want to own a outdoor farm instead Colorado now?

[00:37:10] Colin Ferrain: Probably not, but if you can sell your products at a price competitive rate to go and get market share and get more distribution doors because you want to build a bridge. And it’s super, super valuable. And that’s exactly why clearly if it’s going out there. So yeah, at this point in time, it’s kind of like a necessary evil to go out and find these certain types of assets, because at the end of the day, like there’s a ton of variables you guys know, as well as anyone given exposure to Colorado, that like, it’s, we’ve got really tough weather to forecast and it’s like the growing season is long, but like the idea that, you know, the chance of you having a snow storm in September is not low and you’re literally out there hand picking.

[00:37:50] Colin Ferrain: Far at that point, like the day before the snow storm comes, cause you only had a day of warning coming back to the point though, seeing folks that go into focusing on their key [00:38:00] competencies, um, which you’ve seen, I think he’s like Cresco with wholesale. Um, they’ve shown that they really want to focus.

[00:38:06] Colin Ferrain: Pushing wholesale and getting distribution doors. Um, and that’s fine. And that’s great. There’s a place in the market for that. I think you’ve historically seen like juicy focused on retail. That’s starting to turn a little bit because they want to build margins. And so they start to get more cultivations, but I’d like to see more focus on core competency going forward.

[00:38:24] Colin Ferrain: And I realized that it’s not especially rational at this point because you have to own across the supply chain, but it will be interesting to see how that pans out.

[00:38:33] Mike Regan: Mike. I basically think of two of them, the first one. And we’re starting to say this, but, um, I mentioned before is just the complexity of the capital structures with so many warrants and options and converts that I think the overall industry will benefit when those capital structures are simpler and the share counts are simpler from just higher multiples as, uh, you know, at this point that I guess mostly investors.

[00:38:58] Mike Regan: I don’t know, or [00:39:00] they’re close enough to that. They’ve already done all the math, but as this industry courts, more and more institutional investors, it’s a question of whether they’ll be able to sort of Wade through these very complex. And it’s more of the dynamism of the share account, right? The share count changes as the stock price changes, right.

[00:39:16] Mike Regan: That’s based on what the warrants do. So, you know, if you’re doing evaluation on a company, you know, you think there’s a hundred million shares. We have, there’s a hundred million shares at $10. When the stock doubles the $20, all of a sudden there’s 15 million shares. And all of a sudden it’s not $20 anymore.

[00:39:32] Mike Regan: It’s, you know, it’s $15, something like that. Right? The industrial benefit overall, it takes them. They can use less and less issue, less and less warrants on future, a capital raises. And again, that’s been impacted. The capital constraint nature of the sector. So it’s slowly happening, but that, I don’t think it will benefit the industry.

[00:39:52] Mike Regan: I think, you know, more traditional companies in their supply chain aspects, you know, we’ll start to see more traditional companies start to look at [00:40:00] supplying this space as just another customer. You know, I guess the, the, the money laundering laws and the banking laws that can complicate things and you know, or the insurance, you know, you may be perfectly legal to decide, but you call up your insurance agent and they’re like, Well, if you supply this cannabis company, all of a sudden your insurance rates are going to quintuple because you know, this is crazy risky for us.

[00:40:20] Mike Regan: We’re not going to let you do it. So it’s effectively, you know, effectively can’t service them. I think that’s a trend I like to see. Change is just the industry gets more, you know, you have more normalized, just like it’s just a standard consumer pharma product. It’s going to have a whole agricultural industrial supply chain, just like any other business.

[00:40:40] Mike Regan: And it needs to be supplied by, you know, you do the exact same thing for soft drink company. Why can’t you do it for, you know, this cannabis company, right. I think that’s coming. And that’s the trend of like, it’s I like to see more of that. And I think you’ll, I think you’ll see more traditional companies start to get involved in the space.

[00:40:57] Mike Regan: Can I

[00:40:57] Colin Ferrain: add one more? [00:41:00] This is not investment based, but lower THC product. We don’t all need to have 25% THC flower or a hundred milligram THC drinks. This is gotta be a thing of the past. And as we get more people that are new to the industry and it becomes a liability more than anything, right? Like a 10 milligram piece of chocolate, just breaking down.

[00:41:24] Colin Ferrain: But less THC in it, more companies will have more log cans shown that that, that, that can happen. I realized there’s barriers to the idea, but, uh, it’s gotta be something that happens in the near future for the CPG companies.

[00:41:35] Bryan Fields: It’s another conversation for another time, because in some people’s mind more is always better.

[00:41:40] Bryan Fields: Right. And when you are first time into a dispensary and you’re not really sure. The higher, the number, the more attractive it is. And sometimes the budtender is more likely to recommend it. And then you’ve just got yourself with circle of issues because whose role is what, and that’s a whole another conversation for another time, but I want to kind of quickly switch gears and go back to the margins conversation.

[00:41:59] Bryan Fields: We talked about kind of [00:42:00] comparing operators. And margins is, uh, an easy way to likely do that, but sometimes it’s very misleading. So in your opinions, can you compare operators in the cannabis space solely by margins? And if not, you know, what sort of other initiatives, if you’re new to this space, would you use to kind of compare operators to make.

[00:42:19] Bryan Fields: And investment into that space. I

[00:42:21] Mike Regan: think you start with margins, but then it’s understanding the stories behind why those margins are the way they are, because you have a low margin for two reasons, you can have a low margin because you’re investing for the future. So if you sort of break it into, well, my, you know, my sustainable margin is, you know, I haven’t been make up numbers here that, you know, 30, but I’m investing 10% of sales for this infrastructure in the future.

[00:42:45] Mike Regan: That’s why it’s 20. That’s a very different story than. Yeah, our product just doesn’t have very good branding power and we just have to keep cutting prices. Because our product sucks and that’s how we compete. You know, that that’s a [00:43:00] very different reason of why are you at 20% margin instead of 30 just to make up around numbers, right?

[00:43:04] Mike Regan: Yeah. That would require us like billing in and understanding, you know, what is the largest structure? Why is it that way? Uh, and then con I’ve talked with this also just properly adjusting for them because, and this may also be a trend for the overall industry. They would all benefit if they, you know, try to show their.

[00:43:21] Mike Regan: Yeah, try to report their financials and, you know, sort of as clean a way as possible. And more information is always good to make. Let investors make more adjustments. As they see fit. Um, but sometimes, you know, the headline, you know, adjusted EBITDA might include things that investors would be like, well, is that really one time should really be excluding that, you know, are you just, that’s sort of a trick and it’s not just cannabis.

[00:43:43] Mike Regan: A lot of companies will do that. They’ll throw recurring things into the one timeline it’s like, wow, your one-time expenses are always. Something big, the individual thing, maybe one time, but like, you always have a big one-time expense. I’m just going to keep that recurring. Right. So that’s, it comes down to understanding [00:44:00] why they are the way they are.

[00:44:01] Mike Regan: And then I think monitor charm, you know, comparing it to what similar industries do that aren’t even in your same space, right? If you know, most consumer companies earning more, only 20% margins. How sustainable is a 40% margin. Well, you know, that’s the question and then saying, okay, well it’s different because of this, this and this.

[00:44:20] Mike Regan: Okay. Well, this probably goes away. This may change and this actually may be permanent. So maybe it’s, you know, 30, I mean, I’m just throw around round numbers, but that concept of what’s the story behind them. I mean, you do ultimately have to compare them both on the level, but also the sustainability.

[00:44:36] Mike Regan: Right. That’s what I think is most important from like an investment standpoint is it’s great what they are, but what are they going to do?

[00:44:42] Colin Ferrain: Yeah, I think that’s, that’s a pretty inclusive answer. Um, you know, we would add that, like we, we were, we do checks. Behind the margins of the more qualitative items, you know, like who are employees turning over?

[00:44:55] Colin Ferrain: Are they, uh, recruiting other employees from competing MSOE? How is [00:45:00] talent acquired basically or lost? Um, where are they investing on their infrastructure side, whether it’s capital equipment or they’re investing in technology platforms to make, as we talked about before the scalability, everything more efficient, and then generally, how do they make decisions, which is a tough one to gauge because he kind of.

[00:45:16] Colin Ferrain: The speaking with the, the core operating team, because generally from the executive team, you get like a pretty templated answer about stuff like that, but you can kind of parse a lot of the takeaways out of looking how historically they’ve made investments in the past. Um, yeah. Then even how they shape those investments in the public view, because obviously there’s always a deeper read than what’s in the press release.

[00:45:39] Bryan Fields: Yeah. I think those are both really well said. And I think that’s exactly the value that, you know, your team brings to the space. So I would encourage anyone. Who’s kind of interested in learning about the industry to kind of dive into MJ research platform and to kind of get involved. Right. Because the only way to really know is to work with experts like yourself to kind of go there.

[00:45:55] Bryan Fields: So before we go into prediction time, we ask our guests a couple of different questions. We’ll start with [00:46:00] you. Biggest misconception in the cannabis space. Other

[00:46:04] Colin Ferrain: some is quite a bit in the podcast. It’s, uh, that these billion dollar industry leaders are all buttoned up and smooth sailing and it operates like apple or, you know, some other big industry incumbent.

[00:46:18] Colin Ferrain: Um, I think that is misunderstood to say the least.

[00:46:23] Mike Regan: I guess from an investor perspective, I guess maybe see sometimes this more on the, some of the companies themselves, but you know, that the cannabis industry is its own unique thing, has its own special valuation metrics and special things. As I see it, it’s, you know, it’s a rapidly growing growth industry, but it’s still, you know, a consumer products with, you know, like capital intensive supply chain that needs to be built out, uh, in a capital intensive business.

[00:46:49] Mike Regan: And. You should view it within the lens of whatever that, of the consumer or industrial or cultural portion that, you know, you have to figure out which individual [00:47:00] company is actually what it has more or less of each of those things, but it’s not like cannabis is really special because of this. This is one of the business standpoint, um, to be clear, you know, it’s, it’s a consumer product it’s rapidly growing, but if you’re going to do evaluations, you should look out to when the growth slows down.

[00:47:17] Mike Regan: So look out five or 10 years, and then. Yeah, but normal consumer multiples on that five or 10 years out and then discounted back, but it’s not like, oh, you know, this should trade it 50 times revenue because it’s cannabis. It’s like, no, that’s no one should do that analysis of like, oh, I think I’m going to go to 55 times revenue.

[00:47:35] Mike Regan: The reason you do that is because. Yeah, we’re putting a normal consumer multiple on the far out growth and discounting it back implies 50 times a day, but it’s really just, you know, three, four or five times revenue or, you know, a more reasonable net income PE of 20 times PE on my 2013. Estimate, right.

[00:47:56] Mike Regan: That’s how it should be viewed. And that’s how we try to view it as, you know, whether [00:48:00] you actually do okay, you cultivate a product and then you process it and then you sell it in a retail establishment. You know, how has that compared to other companies that do something similar,

[00:48:11] Bryan Fields: some of your experience into a main takeaway or lesson learned to pass onto the next generation?

[00:48:20] Bryan Fields: Or would that be all experience? Yeah. Like any experience, something that you’ve learned in the cannabis industry, that for the next generation you wanted to pass on a lesson, something that a wide-eyed freshman walking into a college, who’s eager to get into the cannabis industry and they’re ready to start their career when they graduate.

[00:48:36] Bryan Fields: What lesson have you learned or main takeaway that you’d want to pass on to them? Something that you could share as like a guidance lesson. I’ve

[00:48:44] Mike Regan: got two sons. They’re not quite college age, they’re nine and 11, but I try to do that every day in terms of like, how am I, what am I trying to teach these kids to prepare them for the next 30 years?

[00:48:54] Mike Regan: And it’s, I don’t know. My general concept is to think critically for yourself. [00:49:00] Study history to see what has happened before, because human behavior tends to, I think, repeat itself or, you know, people tend to operate and pattern. So we get good at pattern recognition, but also think critically for, you know, don’t just be stuck with certain analogs of the past.

[00:49:14] Mike Regan: Like, oh, this Amazon was like, oh, alcohol is prohibited and then went legal. It’s going to look exactly like that. You know, that can be a model to help you to think about will happen in the future, but you still have to think critically. Yeah. And I guess the other key lesson is just to always try to disprove yourself, right?

[00:49:30] Mike Regan: It’s the logical concept of like the, what the black Swan example, you know, the thousandth white Swan doesn’t prove that all swans are white. It’s that the one black Swan disproves that all swans are white. So try to find the thing. If this is my hypothesis, what would this prove it? And then look for that.

[00:49:48] Mike Regan: But those are the general lessons I think, apply in sort of any environment and helps you react quickly to the macro hand that the world, these deals. Well,

[00:49:59] Colin Ferrain: I [00:50:00] don’t think I’m going to top a, seem to lab analogy, life experience. I’ll go higher level. Uh, just cause I don’t want to compete, but I think it’s, you know, it tends to be like that stereotypical phrase of like, you know, building your network is I think network is net worth.

[00:50:16] Colin Ferrain: Right. Um, but what I’ve learned, especially through like coming through equity research and then getting into the cannabis industry is always that there’s always someone that’s smarter than you. That’s going to be able to provide you. A ton of information that will shortcut your ability to get to where you want to go, whether it’s in a career or a life decision or whatever it is.

[00:50:35] Colin Ferrain: And if you are proactive on reaching out to those folks more often than not surprisingly, they’re willing to share their advice. Then, you know, I think he realized that as you get older and older, but like being able to find those folks that were, are willing to just help, despite even like, not necessarily having a full relationship with you first off, it builds a relationship, but then second off it gets you to where you need to be much faster than if you were to [00:51:00] go out and try and do all of the digging on your own.

[00:51:03] Colin Ferrain: Um, so I found that valuable both in cannabis, but then also just, um, having like Cheryl mentors from my past roles at all their companies. And it’s been super.

[00:51:13] Mike Regan: Those are two of my favorite answers that

[00:51:14] Bryan Fields: I’ve heard so far since we’ve done that last time, either of you have consumed any cannabinoids. Um,

[00:51:20] Colin Ferrain: last weekend I tried the cookies pancakes.

[00:51:27] Colin Ferrain: Uh, pancakes. I actually have it right here. It’s sitting across my desk, but yeah, it’s called cookies, pancakes. Um, I’ve never tried cookies before, so I just wanted to see what it’s all about. That is relatively new to Colorado, I think like last year. Um, and I know the farm that’s been growing the strains.

[00:51:43] Colin Ferrain: Um, so. Tastes sweet. Um, maybe like pancakes maybe might be a self-fulfilled taste, but otherwise good.

[00:51:54] Mike Regan: Let’s say you think about a week ago. I, uh, I had an edible, uh, like a little gummy, [00:52:00] uh, you know, it was, it was fine. And then went to sleep soon as afterwards and had a nice, nice sleep. So nothing crazy. The sleep edibles are the hypothetical smoking up with Trane associates, which yeah, from the beginning of that, we’ll say it better becomes a reality, the full circle experience.

[00:52:21] Mike Regan: All

[00:52:21] Bryan Fields: right. It’s prediction time, 2030, which big operator outside of the cannabis space has now entered the cannabis space and taken a big.

[00:52:32] Colin Ferrain: Are we talking operators to

[00:52:34] Bryan Fields: ancillary? Yeah. So it can be anyone that’s outside currently outside the cannabis space that has aggressively moved in to try to claim some market share in any of the verticals or any of the revenue opportunities in cannabis.

[00:52:47] Colin Ferrain: I’ll go first. I’ll do a, maybe a sleeper and then. Obvious sleeper. I think Mike and I have gone back and forth on this, but we’re going to see packaging companies live in this oligopoly of like five [00:53:00] that own the entire market share. And the idea that someone’s going to innovate something completely new and special when these guys have been doing it.

[00:53:10] Colin Ferrain: Decades or even longer, um, seems like it’d be really, really tough. And so I expect, I fully expect that, um, you know, the balls of the world will be going in and taking a run on all things, packaging, especially given that you’ve right now, you have. Just so much just like wasteless plastic. And it’s really hard to build a packaging company in the first place because molds costs a ton of money and you can’t really raise startup capital for it because it’s a relatively low margin business.

[00:53:37] Colin Ferrain: So I like that one from the outside. And I would say like the, I’m not sure the CPG company just seems like a, like too, too easy. So maybe I’ll hand off to Mike I’ll, you know, I’ll come back. I think of a better one.

[00:53:51] Mike Regan: Big alcohol and probably big pharma with the caveat that this all depends on what future regulations,

[00:53:58] Bryan Fields: 2030, no.

[00:53:59] Bryan Fields: Which [00:54:00] one w if you had to take eight company

[00:54:02] Mike Regan: is soon by 2030, you know, there’s general legalization and interstate commerce. Then you will look for someone with large distribution capability. Uh, the obvious one, there is Amazon. I’m not saying that Amazon is a cannabis stock by any means at all.

[00:54:23] Bryan Fields: Um, we’re going to remove them.

[00:54:27] Mike Regan: I’ll say like, you know, go by Amazon for the, you know, the cannabis long-term option opportunity. That’s insane. Testing their

[00:54:35] Colin Ferrain: employees though.

[00:54:37] Mike Regan: Well, that’s the thing, right? But here’s the thing, that’s my point. Exactly. That is actually significant in that like, look, they see what is Amazon. Amazon is basically a distribution platform of stuff to your house and they just want to get more stuff.

[00:54:53] Mike Regan: Through their pipes to your house. So. That actually makes [00:55:00] perfect sense. Assuming the laws go that way and you know, they’re already set up for it. It’s just, it’s just another brown box to them. Right. So yeah, the larger companies moving back side of these on GM also is not going to, you know, test for cannabis anymore, which I think is a positive that’s part of the whole normalization angle.

[00:55:17] Mike Regan: But so that, you know, that, that comes a little bit again. I also assume. It makes a million assumptions between now and nine years out of how long has actually happened. Right. But that’s probably one. And then I think this is one of the supply chain aspect. You’ll see, more sort of just traditional, you know, traditional companies having like, oh, when we have a lot of the cannabis division, it’s just even just an agricultural division that, you know, we here’s our five.

[00:55:41] Mike Regan: Divisions. We’ve got our oil and gas division and we’ve got our aerospace division and now we’ve got our plant division, right. Like, which encompasses everything. You’ll see stuff like that. But I guess that’s less sort of like the one company I’ll get into it, but there I’ll throw in Amazon because.

[00:55:56] Mike Regan: They’re already, they are involved in everything. Now, why wouldn’t they be in the [00:56:00] future? Right.

[00:56:01] Bryan Fields: Amazon was the one

[00:56:02] Kellan Finney: I was going to say, so, but I had a backup one just cause like, you know, they’re going after the healthcare industry, like Amazon’s goal is to conquer the whole world and you cannabis is part of the world.

[00:56:12] Kellan Finney: So like, um, I think Uber, Uber or Lyft, um, I know that delivery has high margins and I think it’s a really, really attractive. Business in the cannabis space, right. Um, from a startup perspective and Uber already has the platform and the software and the drivers. And just like Mike was saying, it’s just another brown box to Amazon.

[00:56:35] Kellan Finney: I think that to Uber drivers, it’s just another trip that they can make some money on is same with the food delivery that they launched a couple of years ago. So I think Uber is, is going to be a mainstay in the delivery space of cannabis. Um, by 2020.

[00:56:51] Bryan Fields: I’ve other my third choice, uh, obviously Amazon and Uber are my go tos.

[00:56:55] Bryan Fields: And for the reasons you’ve said, obviously it makes a ton of sense for both of them to be in this space. [00:57:00] And it’s just another addition into whatever they’re doing well. And obviously the theme of this podcast has been understanding what your unique selling point is in both those companies, understanding nextly, what they do well, and you can provide a NASA of added value to the industry and kind of take off the burden to the operators because it’s just an additional headache for them at this moment.

[00:57:18] Bryan Fields: So. If I were going to choose a company, I would choose Johnson and Johnson. I can likely for the sleep aspect of it, obviously people that need to relax, go to some sort of products. Sometimes alcohol. And from a sleeping standpoint, if, if there can be some advancements with the CVN and some sort of compassion to help people go to sleep, then obviously these, these large scale companies are best positioned with their assets now to take advantage of that.

[00:57:43] Bryan Fields: And I think that’ll be the easiest way to adopt, I think from a mass consumption standpoint by 2030, I don’t think it will be heavy THC personally. I think it will be one of these other minor cannabinoids that it just becomes a mass adopted and is looked at as like. Vitamin into the asset, into the body.

[00:57:59] Bryan Fields: [00:58:00] So that’s my standpoint, gentlemen, before we wrap, tell our listeners where they can learn more, where they can get involved and get some of this information from MTV.

[00:58:09] Mike Regan: Uh, well then you can go to our website, which is M J research co.com. Uh, so MJ research, CEO, uh, dot Tom, and Matt has, uh, all of our research is up there, uh, where you can sign up to be a free member where it gets some free stuff.

[00:58:27] Mike Regan: And then, uh, also the premium sign-ups, uh, for the real media analysis that we provide. If, you know, if you’re, uh, an actual institution, we also offer an outsourced analysts, you know, higher fee bespoke research service as well. That’s that can all be found there and free members could sign up for our, uh, our regular email lists as well as sort of a newsletter type thing that we, we publish for everyone

[00:58:52] Bryan Fields: for free.

[00:58:53] Bryan Fields: Yeah. It’s one of the few ones that I consume on a regular basis. So I appreciate all your guys’ hard work and look forward to connecting soon. We’ll link [00:59:00] all the links. Thanks for your time. Thanks

[00:59:03] Colin Ferrain: so much. Appreciate it.

[00:59:05] Mike Regan: Okay.

Thanks so much for listening to The Dime . Subscribe or follow us on Seeking Alpha, Libsyn, Apple Podcast, Spotify, Google Play or Stitcher. And we’d really appreciate it if you could leave us a review on Apple Podcasts. It helps others find our show.

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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!

In this episode, Bryan Fields (Twitter: @bryanfields24) and Kellan Finney (Twitter: @Kellan_Finney) sit down with Dr. John Abrams, The Chairman, and CSO at The Clinical Endocannabinoid System Consortium (CESC), to discuss:

  • What and who is The CESC?
  • What is the endocannabinoid system?
  • Receptors in the human body
  • Research that’s currently underway to illuminate how to properly use cannabinoid products
  • Introduction to The Dosing Project
  • Understanding how cannabis interacts with the human body
  • Future studies that The CESC will dive into

About The CESC: The CESC is an experienced committee of scientists who hold the passionate belief that the pursuit of knowledge involves the collaboration of diverse communities.

Website: thecesc.org

Twitter: @TheCESCorg

Facebook: @TheCESCorg

LinkedIn: The Clinical Endocannabinoid System Consortium (CESC)

The Dime Episode 57 Transcript: The Leading Non-Profit of Cannabis Science Research ft. Dr. John Abrams Chairman of The CESC

Dr_Abrams edited

[00:00:00] Bryan Fields: This is the dime, dive into the cannabis and hemp industry through trends, insights, predictions, and tangent.

[00:00:10] Bryan Fields: What’s up guys. Welcome back to another episode of the dime as always. I’ve got my right hand, man. Tell him Finney here with me. And this week we’ve got a very special guest, Dr. John Abrams, chairman and founder of C E S C.

[00:00:22] Bryan Fields: John. Thanks for taking the time. How are you doing today?

[00:00:25] Dr. Abrams: Oh, I’m great. Thank you for providing the opportunity. I’m looking forward to this discussion.

[00:00:30] Kellan Finney: How are you doing? Just enjoying another sunny day out here in Colorado. Cool.

[00:00:35] Bryan Fields: Ready to dive in. So John, before we get started, Tell our listeners a little bit about yourself and how you got into the cannabinoid space.

[00:00:44] Dr. Abrams: I have been interested in this field for over 50 years. I’ve come from the bay area. I grew up in Palo Alto and this was starting to become common cannabis use. As I was in late high school. It was one of the experiences that we add [00:01:00] and it has been part of my life ever since I’m a biochemist and I’ve been in biotech and pharma for a good part of my career, the major part of my career.

[00:01:11] Dr. Abrams: And this has been an under a theme or a, you know, in the background until perhaps the last decade, when I decided I would really try and understand. The bases of cannabis science, the cannabinoid industry, and most importantly, how cannabis can unlock the human potential and understand the cannabis mind.

[00:01:38] Bryan Fields: Let’s kind of dive into that and you’ve accomplished many, many things in your career here. So the CSC, what is it?

[00:01:46] Dr. Abrams: Can you start that? So the CSC is an acronym for the clinical endocannabinoid system consortium. It’s a nonprofit, a 5 0 1 C3 type of [00:02:00] corporation that we started about five years ago. My illustrious clinical colleague, Dr.

[00:02:05] Dr. Abrams: Joel tolerant, whom will also be on this podcast at a future point. And I started recognizing that to be in. Healthcare space to be able to get grants donations and all it’s felt best. And the best structure was to be in a non profit format. In choosing the name. We decided that we were focusing on the endocannabinoid system.

[00:02:34] Dr. Abrams: We were taking a medical approach, thereby clinical endocannabinoid system. And because we’re intensely focused on the need for collaboration. And partnership and sharing. We looked at this as a consortium. And so our name says it

[00:02:51] Bryan Fields: all. I know cannabinoid system, for those who are maybe on familiar, can you kind of shed some light on exactly what that is?

[00:02:57] Bryan Fields: It’s a,

[00:02:58] Dr. Abrams: another system, [00:03:00] another physiological system that has been. Recently described and discovered as we, first of all, came to understand the structural and chemical basis of the prime active ingredient in cannabis, namely tetrahydrocannabinol or THC. As, and this discovery was pioneered by race.

[00:03:22] Dr. Abrams: Mushu long back in the seventies. I believe along with that, then a couple years later came in understanding of what receptors that is. If the THC is a key, then the receptor is the lock that, that key fits into to unlock. Physiological signaling. These are components then of a larger system, which has become to be called the endocannabinoid system.

[00:03:51] Dr. Abrams: It has also evolved our understanding to include the natural ligature, the natural compounds that our own [00:04:00] bodies. Right. That trigger and function in this system. The endocannabinoid system is like any other system we might learn in biology, the circulatory system, muscular skeletal system reproductive system.

[00:04:15] Dr. Abrams: It’s a, another collection of ligands Keys and receptors lock and binding entities, binding protein. It’s a whole system that we need to understand and discover, and it is majorly influenced by phytocannabinoids as opposed to our own indogenous logins. Endocannabinoids phytocannabinoids are produced. By the plant, the cannabis plant.

[00:04:43] Dr. Abrams: And that was the entry

[00:04:47] Bryan Fields: from the endocannabinoid system. The majority of people understand those areas. Is this like, can you kind of shed some light on that? Because I feel like we have conversations with some people in the space, and they’re surprised to hear some of this

[00:04:58] Kellan Finney: information [00:05:00] and more people are becoming aware of the endocannabinoid system.

[00:05:03] Kellan Finney: The entourage effect is really prevalent now within kind of the. Popular culture of cannabis, right? People are realizing that if they ingest just the THC molecule, they have a different experience than if they ingest the THC molecule with some of the other phytocannabinoids like turpines and, and other ubiquitous molecules within the cannabis plant.

[00:05:27] Kellan Finney: I would say probably the most well-known aspect of the endocannabinoid system comes in terms of how CBD and THC differ in how they interact with the human body. There’s this CB one receptor and CB two receptor that kind of the general public has grouped into two categories that the CBD molecule interacts with.

[00:05:47] Kellan Finney: Your CB two receptors. And the THC molecule interacts with your CB one receptor and one’s in your brain and one’s not, that’s why one gets you high. And the other doesn’t, I think that’s kind of like the general understanding right now, [00:06:00] which is there is so many more receptors and variables to consider when truly trying to understand how those molecules are interacting with your endocannabinoid system as well.

[00:06:12] Dr. Abrams: And so one of the issues is that perhaps some of the popular knowledge that’s out there. Is maybe not. Absolutely correct. And so I’m not sure I’m comfortable with a dichotomy the way you just described with THC affecting CB one and say CBD affecting CD two, if you will. I think that’s probably not born out by the gamut or scientific literature that’s being created in this.

[00:06:45] Dr. Abrams: It’s probably better to understand that there are multiple different classes of receptors a lot on, in, beyond CB one and CB two. And these important entities are affecting other [00:07:00] classes of receptors. And my own view is that one of the principal roles that CB two is triggering on a, another class of receptors.

[00:07:10] Dr. Abrams: Called the trip channels, TRP channels transient receptor protein channels. And this then fits in with many of the defined effects that these lie Gans that these phytocannabinoids are creating. But I think it’s overly simplistic to simply divide it as well. One hits one kind of receptors. the other login hit CB two.

[00:07:36] Dr. Abrams: I would encourage us not to be going down that pathway. However, it is useful if we looked at how the endocannabinoid system interacts. Other systems in the body. And you mentioned that CB one, the receptor may be predominantly brain or nervous system oriented or localized CB two, [00:08:00] probably a little more general, but it has a much more prevalent localization in cells of the immune system.

[00:08:06] Dr. Abrams: And it makes sense rather to look at the result in biology as effective. Are you turn hearing through CB one or are you triggering through but of course, CAC triggers both CB one and CB two. So it reacts, it works in both. The system is nuanced and then it goes on, there are other receptors in the class that.

[00:08:31] Dr. Abrams: And CB two are in, they all have complicated names and complicated biochemistry associated with it, but the devil’s in the details. And our mission is to deconvolute and explain this as clearly as possible to both the scientific and the light community. So let’s go

[00:08:52] Bryan Fields: back to one of the first things you were saying about different with the way Ellen approach that right.

[00:08:57] Bryan Fields: It seems like we’ve got to understand and laid the groundwork for [00:09:00] understanding exactly how it works. We

[00:09:02] Dr. Abrams: even began well, again, the biochemistry and physiology of this is not novel. Many of the other systems that we study or understand in biochemistry utilize similar mechanisms or similar pathways.

[00:09:20] Dr. Abrams: It’s just an essence, expanding the vocabulary list of what is in the human or what, what is in the organism. To understand how this works. It’s not reinventing, it’s just reapplying or fine tuning or expanding the vocabulary. We add new receptor classes. We have new. Well, again, new keys that interact with that.

[00:09:48] Dr. Abrams: I hope that that’s kind of clear. It’s not, we have to do a lot of heavy lifting for novelty. It’s more, how do you, what we learned in pursuing studies [00:10:00] in the end of cannabinoid system fit into our existing. Understanding of how it works in the first

[00:10:06] Bryan Fields: place is the endocannabinoid system commonly taught in school.

[00:10:11] Dr. Abrams: I think, you know, the answer to that, but unfortunately not. And it has been said that many med students are not even reached in that yet. You know, it’s only a couple of decades old and med school curriculum can often. B you know, going back centuries or so, you know, there’s a large historical record here.

[00:10:31] Dr. Abrams: So a little bit, we’re the victim of novelty in trying to place this into our overarching hierarchy. Like I was just saying. And so part of our mission, I think, is to explain and understand. In the context of what we already know about existing system, but at the end of the day, we do our programs, right.

[00:10:53] Dr. Abrams: And we need our goals. Then the endocannabinoid system will be core curricula in med schools [00:11:00] going forward. What are those goals? Well, there’s trying to develop programs. That can allow us to understand the deconvolute some of the problems or, or puzzles that we’re seeing in this. I mean, and this sounds a little kind of, not so clear, but one of the main issues that we’ve been facing in this is what we call a many to many problems.

[00:11:28] Dr. Abrams: That is the plant. The botanical source, the plant has a lot of different components. That interact is Kellen was referring to entourage effect or synergy or whatever. And we have many different receptors, many different locks that these fit into. And there are many different situations or doses or times of day or whatever.

[00:11:53] Dr. Abrams: So it’s this huge many to many problems. And our job is to try to deconvolute [00:12:00] this and find system systems or systematic taxonomy descriptors that will help us understand and simplify this. So we can clearly understand this has this effect in this context. Another agent or another phytocannabinoid has a second effect in this system together.

[00:12:21] Dr. Abrams: They synergize that is they add the effects together or they compete. They block each other’s effect. All this has to be worked out so that we can understand how optimally to use this product and enjoy it. Whether it’s for lifestyle or for medicinal purposes,

[00:12:41] Bryan Fields: they will sit. And I want to tell them to kind of dive in here from undertaking of what John described.

[00:12:46] Bryan Fields: I mean, the complexity of that challenge is, is, sounds like an uphill battle. Is that the way you hear it? Yeah, I

[00:12:51] Kellan Finney: mean, but anything in the scientific world is an uphill battle and I think that. The CSC, how John described it is the only [00:13:00] way that the human race really tackles these kinds of daunting obstacles, if you will.

[00:13:04] Kellan Finney: Right? These kinds of projects of understanding the physical world around us. Right. It’s not going to be one group that’s, it’s going to be collaborative effort individuals across the globe. Right. And you can even see that we’ve just, we’re on the precipice of kind of a logarithmic curve, in my opinion, associated with scientific research, directed at understanding how this cannabis plant and the chemicals, it produces changes.

[00:13:31] Kellan Finney: Human’s perception on the world, around them, right. In terms of the psychological and the psychedelic experience that people have when they consume the plant. And I mean, the amount of literature that’s published daily now is, is pretty phenomenal, right? If you look at it from even 10, 20 years ago, and it’s only increasing every day, and I think that that’s really what it boils down to.

[00:13:53] Kellan Finney: Is it haunting task to try to understand all how five or 600 different chemicals in one plant. [00:14:00] Affect the human mind. Right. And it’s not going to be accomplished by 5, 6, 10 scientists with some pipe hats and some Erlenmeyer flasks. Right. And the, in a lab, like it’s definitely going to take a collaborative effort and a consortium to be able to push the scientific knowledge associated with this forward.

[00:14:21] Kellan Finney: And the other thing is it’s, you could throw a giant army of people at it, but it’s going to take time. These things aren’t just. Checking the box, achieving the goal. Like it’s, you’re working with the real world it’s messy and you never really know what what’s going to come out of. A lot of the experiments you do.

[00:14:35] Kellan Finney: It’s, it’s going to be guessing and going out into the real world and seeing what happens and then reporting on it. And then a lot of other really, really smart individuals look at what you did, kind of provide them your critiques. And then they’re going to go out and try to build on what you do. You did and that’s science, right?

[00:14:51] Kellan Finney: It’s it’s the only way to kind of move these kinds of projects forward is. Taking that scientific approach, if you will.

[00:14:58] Dr. Abrams: And if I could just follow up [00:15:00] on that, because that’s an excellent narrative there. I think fundamentally our approach in this is to provide some kind of overarching systematics or systematic approach.

[00:15:14] Dr. Abrams: And I would outline that is understanding on the one hand. The chemo type thing, the understanding as well as we can, the list of products that are in this complex, mechanical and making that list understanding what is there that we’re talking about. And then on the other side, being able to quantify effect that we’re studying in a reputable manner, whether it’s physiological effects, mental effects biomarkers, we use that term.

[00:15:48] Dr. Abrams: That’s where a biomarker is a key indicator of a state change. In a biology or in a physiological response. But you have to [00:16:00] approach this systematically. So if you can get your content lexicon established and you can get a series of reputable affects or outcomes on to fight or measure. You just start putting it together and become ballooning as you go and drawing your conclusions.

[00:16:19] Dr. Abrams: And I think fundamentally this is the basis of the CSC approach. We’re trying to develop and bring. That kind of systematic into this

[00:16:31] Kellan Finney: field circle back on one thing you did say and tracking. So you mentioned tracking the effects that individuals have from different chemovars and this is something that the CSC has already embarked upon in terms of the ghosting project.

[00:16:46] Kellan Finney: You want to kind of elaborate a little more about the dosing project and how that has been pivotal in humanity’s effort to try to understand how these different chemovars.

[00:16:58] Dr. Abrams: No, certainly thank you for that [00:17:00] prompt show. The flagship program of the CFC is in fact, the dosing product that Kellen was just alluding to.

[00:17:08] Dr. Abrams: This was a program that grew out of a challenge that my colleague Joel tolerant. Back in 2016, when as a cannabis clinician, he was being challenged by his patients, recommend to them, what should I use? How much should I use? What is best for this indication? And sadly, there was no basis of this. And we came up with the idea that folks that are using these products, this medication.

[00:17:43] Dr. Abrams: Preparations might actually be able to report on their responses and guide these kinds of ads or provide answers and help guide our knowledge in the space. John tolerant is a bit of a rebel, and I really salute [00:18:00] him for his view that rather than clinicians necessarily dictating patients, his approach is let the patient explain to you what is working for them.

[00:18:11] Dr. Abrams: And you keep track and correlate that. So in essence, that was the heart of what we were putting together here. And we decided we, we would likely be able to do this where they crowdsource web based query platforms. And so back in 2016, we put together a proof of concept version of this, where we would be asking folks.

[00:18:34] Dr. Abrams: How much flour. And this was initially limited in scope because we knew this program, this project, or this problem is broad again in systematics. If you need to get started, define your scope, narrow it to the point where you could draw some conclusions. So we concentrated on asking folks about flour, not other processed cannabis products.[00:19:00]

[00:19:00] Dr. Abrams: Because they’re just so complex and asking them simply how much they were using by route of administration of inhalation, thereby smoking combusting, blazing cannabis or vaping it, but it was restricted to that mode. It was restricted to flower and it was restricted to the two top indications. That was tolerant.

[00:19:24] Dr. Abrams: We’re seeing in his clinical practice, namely pain and disordered sleep. And so we put out a web-based platform for this, and we were trying to ascertain, could we, based on this kind of crowdsourced. Come up with dosing guidelines for pain and disordered sleep for what people were using. And the answer was a resounding yes, and proof of concept.

[00:19:52] Dr. Abrams: And we’ve presented on this at Amarillo conference in 2018. We’ve written up reports, some of that can be seen [00:20:00] on our website. So it is a very useful and fruitful approach. And now our goals. Is to produce version 2.0, which will be much more, which will be expanded beyond that. It will now include multiple modes of administration.

[00:20:17] Dr. Abrams: It will be expanded to not just flour, but various process forms of cannabis. Well useful for oral and ingested motive administration or topical, the indications will be expanded out and the clinical survey platforms are expanding as well. And the proof of concept phase we simply ask what kind of response on a four category scale, no response, partial response, almost complete or complete response.

[00:20:50] Dr. Abrams: And we coded and analyzed the data that way. Now we’re inserting other survey modules into that, including [00:21:00] mood assessment, psychedelic altered state assessments. These are all standard surveys that are being used in the medical fields or psychology fields. We’ve asked about adverse events, side effects in proof of concept dosing products.

[00:21:18] Dr. Abrams: That will be slightly expanded and modified so that we can come up with what. Negative effects or what bad events may be occurring, but basically this work in proof of concept. And so we’re very excited to be able to expand this. And it is one of our key flagship initiatives under the clinical correlates program with the CSC that we plan to pursue in the near term

[00:21:46] Bryan Fields: for individuals.

[00:21:47] Bryan Fields: Did you need to feel comfortable with that study? And then I have a

[00:21:50] Dr. Abrams: follow-up question. So it’s a great question, Brian. And let me just say that what we’re basically doing is what’s called a [00:22:00] phase. Clinical study, if you will. Clinical drug development typically follows a three phase development program phase one where you’re looking for toxicity in the preparations that you’re administering to people.

[00:22:18] Dr. Abrams: Phase two is looking to try and ascertain what that dose should be. And phase three is looking for efficacy. Am I getting the desired effect? This is a classical paradigm that EU FDA, China, PRC, China, FDA uses. This is very useful drug develop. Once your drug is approved. You do post-marketing surveys and these are typically referred to as phase or where you’re actually looking for what kind of responses beyond what the drug may have been identified for?

[00:22:58] Dr. Abrams: What about [00:23:00] side effects that were not part of the initial studies? So they tend to be broader in our case because of the way. Our models work. We were looking for statistical significance in our models and we could just keep going. Accruing respondents until we hit significance. So it’s not like we had to go in and negotiate with any agency up front that we will put 50 or 60 or a hundred to get those kind of answers.

[00:23:33] Dr. Abrams: But it’s fair to say that for the THC responses that we were trying to measure in smoke flower, as we hit about a hundred respondents, it became real. And so that answers your question it’s at that level. But of course, if you’re trying to find nuances, you’re trying to find what interacts with that. THC, what turkeys or other components [00:24:00] that are present.

[00:24:01] Dr. Abrams: You need more respondents in order to tease out that complexity in order to deconvolute that many to many problems. So I think, I mean, I’m answering your question simply it’s on the order of a hundred or so to get started, but of course our goal is to do much larger data. So that we can begin to deconvolute and understand what either minor cannabinoids or terpenoids or other components, files, esters that are present in.

[00:24:32] Dr. Abrams: In this botanical, how they affect the response,

[00:24:36] Bryan Fields: the reason how many is because obviously everyone handles flour differently may on women, time of day. Wait. And for me personally, every time I consume flower, I’m hungry. And then Sleepy’s. I might not be the best for that, but others might have a different experience.

[00:24:51] Bryan Fields: So I was wondering how you could feel comfortable in, in kind of segmenting all of those data variables and then feeling comfortable with the output you have and understanding that. Okay. Because [00:25:00] we’ve seen enough significant enough difference to go forward with the next

[00:25:03] Dr. Abrams: one. I mean, that’s a great question, Brian, but if your survey methodology specifically is asking about fast and in essence, we are, we’re talking about mood survey.

[00:25:17] Dr. Abrams: And mood surveys specifically can address or do address questions of fatigue, calmness, tension, et cetera, that comes out of the analysis. Doesn’t it? Because you can tell if the bulk of your respondents are reporting that way, then you know, that’s what the response is. If it’s. And I believe it will, or it does.

[00:25:39] Dr. Abrams: You begin to understand how that subsetting occurs and you begin to look at well, what is behind that sub setting? Is it gender? Maybe, maybe, probably not. Is it genotype you might be able to you know, you’re marrying these kind of work with genetic screening that is [00:26:00] increasingly popular. And so you’ve got that parameter.

[00:26:03] Dr. Abrams: You can ask questions or we know about when did you dose How much did you smoke? And most importantly, what did you take it with? And that is another aspect of this that we’re seriously thinking about how to incorporate into this next version or the one after the interaction term with other agents. We know we don’t live in a world where all we’re doing is consuming cannabis in isolation.

[00:26:31] Dr. Abrams: What about with that beer you had? What about those with tobacco? What about other dietary supplements or sleep aids or something like that? And we think that this crowdsourcing approach can help be convolute or understand that, but we just have to ask the questions right. And have it in a form where the data will speak for itself.

[00:26:54] Dr. Abrams: When

[00:26:55] Bryan Fields: you said that I had so many friends that came to mind of just wanting to just sit there and consume [00:27:00] canvas all day for a research study. So that’s what you’re looking for. I’m sure we can put up an announcement. I’m sure we can love the number of applicants for you

[00:27:07] Kellan Finney: do count, huh? No, I’m too. I get bored.

[00:27:11] Kellan Finney: You know what I mean? I’m not a big fan of video games. Like I don’t need to need to find something to keep myself busy while I consumed that kind of cannabis. You know, you started from

[00:27:19] Bryan Fields: a popularity standpoint, I’m sure you can find a couple of people that come to mind that would be interested in participating in such a study.

[00:27:25] Kellan Finney: Oh, we could totally make brochures. It would be sold out. I mean, we could really get a big bonus.

[00:27:31] Dr. Abrams: Well, interestingly for proof of concept phase, we were recruiting through Google ad words because as a nonprofit. We got access to free Google ads or Google supported onwards capability. And so we were experimenting with, can we change the recruitment profiles who are our Google searches or directed Google searches?

[00:27:57] Dr. Abrams: And there’s a whole story [00:28:00] about that concept, how we were able to, for example, channel more respondents into our system. Indication arm when we saw that most respondents. Checking the pain box, but not checking the sleep box. And we wanted to boost that number. And in fact, that’s how you go. If you get significance in your model for pain, because you have enough respondents and you go, oh, well, I don’t have quite enough for sleep.

[00:28:27] Dr. Abrams: I can’t draw any conclusions yet. You try to recruit in sleep and then you start to see, oh, I’m at the same number that we’re responding in pain. And I. Significance in my, my models and I don’t have it and sleep, therefore, either something is not working right. Or it is not so efficacious for sleep, which of course we know is not necessarily the case.

[00:28:52] Dr. Abrams: I’m just kind of quoting an example here. But the point is this approach is dynamic. It’s ongoing. [00:29:00] You don’t have to upfront postulate what your study size is going to be. And then open it and close it. I can keep going. I think that’s one of the advantages of this crowd source web-based phase four approach.

[00:29:14] Dr. Abrams: I hope that’s

[00:29:15] Bryan Fields: clear. Yeah. Yeah, it definitely is. And I can only wonder if you use Google ad words to try and attract people to your study. If I would’ve seen a Google ad that said consumed cannabis for sleep study, I would have assumed immediately it was a lie or a trick or some ception technique, because that seems way too good to be true.

[00:29:31] Bryan Fields: And I’m curious in order for them click that. Good for those guys. It was

[00:29:34] Dr. Abrams: more nuanced than that because in those days, Google had inhibitions on what you could use and we were not able to. Those kinds of terms in, so we had the slalom around the Google restrictions, which we did successfully, but there are, you know, of course there’s always ways, I guess, of getting these announcements out, but it worked, it worked, you know, we could, [00:30:00] we could show.

[00:30:00] Dr. Abrams: Increases in responding cohorts, just based on the terminology that we’re using. But now, Brian, it was not quite as blatant as yet smoked cannabis and respond to this study. I don’t think it would have cleared Google back in 26 and 2017.

[00:30:16] Bryan Fields: That would’ve shut down your site because Google would have been like, there’s a lot of clicking going on here.

[00:30:21] Kellan Finney: I want to just elaborate a little bit or they’re on the dosing study. So the survey is one portion of it. Is there any scientific techniques or technology that’s currently utilized to kind of understand what’s going on in the brain? And is that something that the CSC is looking to. To embark on or already has, is you want to kind of elaborate on, on some of the techniques that are used to look inside the skull to see how this is really interacting with you from a biochemical perspective.

[00:30:51] Kellan Finney: No,

[00:30:51] Dr. Abrams: that’s a great, great question. And we are extremely active in this space through a very fruitful collaboration [00:31:00] that started a number of years ago when I was director of Emerald science the Emerald county. And received across the desk. A very interesting abstract from Dr. Jeff Karen clinical psychologist, out of Eugene, Oregon who had proposed and executed a study of smoked cannabis, runnings, and Q E G quantitative EEG measurements.

[00:31:26] Dr. Abrams: So what that is in essence is putting electrodes on the surface of the brain of the surface of the, of the sky. It’s done very routinely. Medical sleep assessments. Cetera. It’s been a part of neurology for many, many years. That’s not invasive, it’s not a problem. And so he approached us at Emerald at the Emerald conference with this great abstract that really piqued my interest, but he had chosen a couple of strains.

[00:31:56] Dr. Abrams: For the study. And my sense was that was [00:32:00] fine, but he was not really surveying the whole kind of versus it will, as it were. And I was interested in seeing if he would be receptive to expanding that initial study, to include strains on the other side. And for those of you who are listeners who understand sprain, he had not included initially was the sour diesel, or what we call the fuel aroma.

[00:32:26] Dr. Abrams: Chemo type side. And so even as receptive, we added that in and produced the study with these three strains reported on it at Emerald 2019. And that presentation is available on Emerald website. It’s also available through CSC website, but the results have been very interesting to deconvolute and study.

[00:32:49] Dr. Abrams: And out of that, we do see a pattern. Of response in cannabis users with these different strains that we can begin to [00:33:00] understand maybe what some of the underlying fundamentals are. So this gives you. A bone, a feed, a biomarker, if you will, on beyond simple survey responses, it’s almost akin to being able to do blood work or something like that.

[00:33:17] Dr. Abrams: It’s a bone of feed, a bio marker. In addition, in this study, he included surveys, which I referred to earlier regarding mood, the standard Bruno mood assessment, and an altered state, such a delicate questionnaire, which is also part of. That field and we’ve been calling correlating and co-leading the responses.

[00:33:39] Dr. Abrams: And trying to map them to brainwave patterns and we are making good progress. So going into the future, one of the clinical correlates initiatives of CSC is to expand that clinical, the clinical trial work, if you will, based on quantitative EEG. [00:34:00] Ingested smoked or ingested cannabinoids or cannabis product.

[00:34:06] Dr. Abrams: We’re going

[00:34:06] Bryan Fields: to dive into prediction students. Before we do that, we ask all of our guests a few final questions. John, if you could sum up your experience into a main takeaway or lesson learned to pass onto the next generation. Oh, would that be?

[00:34:20] Dr. Abrams: Wow. Follow your heart and your interests. It took me many, many decades to get to the point where I could say I am completely involved in kind of the science and understand standing the cannabinoid industry and the underpinnings of the cannabis.

[00:34:40] Dr. Abrams: Mine. It was a process to get there, to throw in. Wholeheartedly in this space I am exceedingly happy and content at the progress we’re making. And so my advice, I guess, to those that come now or afterwards is try to recognize as early as possible what your goals and dreams are [00:35:00] and go do it. I think that’s

[00:35:01] Bryan Fields: perfectly said your personal experience with cannabinoids.

[00:35:05] Dr. Abrams: Well, I don’t think it’s a, you know, it’s a secret that Been a fan of, of the plant, particularly smoked cannabis for over 50 years. I find it very beneficial for numerous reasons. Certainly the calm, calming, and relaxation component, but for me, I find it at least what I hang on the THC component, age, strong associative ability and ability to kind of lay.

[00:35:35] Dr. Abrams: Concepts and disparate ideas to come up with valid hypotheses that can be tested. It’s almost for me like a brain booster. And I guess I might put myself in the realm of what you might and I mean, this is. Not self-aggrandizing but successful stoner. And I think I probably have been, in addition, [00:36:00] I’ve been trying to understand the best way to consume and use CBD or CBDA because of course there’s so much interest in that.

[00:36:08] Dr. Abrams: And one of the approaches that. Pioneer, not pioneer. That’s an old approach. It’s decoction that is boiling botanicals and creating a tea out of it. But in contradistinction to a tea, which is perfusion or infusion here, you’re actively boiling it. And so not only are you extracting components, but you may be changing them advantageous.

[00:36:34] Dr. Abrams: In the case of cannabis, we know that there’s a decarboxylation chemistry. That’s important. That is you have to take off one of me, functional groups, part of the molecule in order to have a certain range of activities. And I’m being a bleak here because we’re a big proponent of non decarboxylated cannabinoids for biological effects.

[00:36:57] Dr. Abrams: But the point is, is that kids a. [00:37:00] Approachable way to get CBD and or CBDA medication in a cheap. And what I believe is an effective way, simply boil hemp or CBD bud and drink it. And I find that that works. Quite well. So we’ve presented on the approach and the content that comes from this at the 2019 ACS American chemical society, Canada subgroup.

[00:37:31] Dr. Abrams: Meeting here that was in San Diego then. And again, details can be seen on presentations that are on our website. Interesting approach on how to acquire CBD or ingest CBD meditation. So I guess I would say between THC cannabis inhalation, and I’m a big vape user at this point and CBD decoction that’s all I get through my day.

[00:37:57] Dr. Abrams: I love the

[00:37:58] Bryan Fields: brain booster technique. That was, [00:38:00] oh, that was one of my favorite ones are likely going to steal that. So let’s go onto prediction time. 10 years from now 2031, John, will we have enough data and research to have personalized cannabis menu?

[00:38:14] Dr. Abrams: Well, I’m going to just answer that by saying, I’m going to drop off the word cannabis medicine and say 10 years from now, what will the stage of personalized medicine be?

[00:38:26] Dr. Abrams: Because we have to move that forward as well, right? I mean, we’re not going to have personalized cannabis medicine without personalized medicine. I’m an optimist. I think we will get there. And I think it is the key. There’s some paradigm changes. Of course. First of all, we have to be able to generate what is the person or generate information on who or what is that person?

[00:38:55] Dr. Abrams: And that’s a heavy lift because it’s expensive to get that. I mean 10 years from [00:39:00] now. I hope we have the resources that more people, not just wealthy elite have access to that kind of personalized diagnostics along side or on the second truck, you have the evolution in cannabis or cannabis science can adenoid industry and cannabinoid medicine.

[00:39:20] Dr. Abrams: And so yeah, there probably will be a marriage sometime in the future for this to be the best. But it’s, it’s still a heavy lift. Brian, I mean, 10 years is that it’s coming fast. I’d like to

[00:39:35] Kellan Finney: believe that it’s there. You know, I mean, 20 years ago we were still in the middle of the human genome project, right.

[00:39:43] Kellan Finney: In 2001. I could be mistaken on my dates, but it costs SWAT $13 billion to analyze the first full human genome. And now. I can go to 21 and me right as a 21 of me and they 50 bucks, they [00:40:00] send me a, a Q-tip. I swab my mouth, put it in there, send it back. And they’re going to give me a pretty decent understanding of my genetics from, for a significantly lower costs.

[00:40:12] Kellan Finney: So I think that. As we continue to improve the techniques associated with understanding biomarkers inside the human body, as well as genetics, that that cost will continue to fall. And as that costs continues to fall more and more of the population will be able to afford that kind of testing. And as more of the population.

[00:40:39] Kellan Finney: Gets tested for their genetics. You created larger data sets and efforts. Like what the CSC is embarking on with the dosing project. It’ll be easy to kind of look at interdisciplinary data to be able to pull these correlations. Right. And so I think in 10 years it may not be like, What you would see in Hollywood as far [00:41:00] as like personalized medicine.

[00:41:01] Kellan Finney: But I think that someone with enough motivation will be able to pull their 21 and me genetics data and put it into probably some sort of free software too. Pull correlations between say the cannabis, they consume their genetics and how they feel about it. And I think that that would be a form of personalized medicine associated with cannabis.

[00:41:23] Kellan Finney: So I know that’s a long-winded answer, but that is my thoughts on it. I mean, Brian coming from a less traditional scientific background. What are your thoughts on cannabis being a personalized medicine in the future? I mean, kind of walk us through that optimistic.

[00:41:40] Bryan Fields: Brian wants to say yes and wants to agree with you guys.

[00:41:43] Bryan Fields: But the other side, Brian, here’s our friend, Dr. Matt Morton says groundbreaking science is expensive and takes time. And I think 10 years is just not going to be enough time to learn everything. We need to learn, to understand all the datasets. There’s a ton of variables and [00:42:00] teams like the CSE. They’re doing incredible, incredible efforts, right?

[00:42:03] Bryan Fields: They need help from outside parties. Like you were saying, John, like your team can do as much as they can, but need participants from outside studies. And I think that involves more people getting involved in contributing to the cause. So while I’d love for that to happen, I think the only way that happens is if more organizations kind of align with the CSC and people like you, and I tell him, continue to contribute toward the car to help raise awareness and to get people out there to contribute whether it’s information or that donate their funds.

[00:42:33] Bryan Fields: I don’t know, I’m going to have to say no, but I think that’s the next line where Don, if people want to get involved with the CSC, Where can they do that?

[00:42:42] Dr. Abrams: Well, I would start by looking at the website and then thinking about what your level of interest in participation might be. We have donation programs, we have sponsorship programs and we have partnership programs depending on.

[00:42:58] Dr. Abrams: What your level [00:43:00] of interest in this is. And I think that’s where, where I would start. We are interested in collaboration. We are interested in consortium building. We are interested in working with top tier folks who really do want to move this forward. This is a huge effort and, you know it takes a lot more than a village.

[00:43:20] Dr. Abrams: And so we have to be open to that. We have to kind of make sure our egos don’t get in the way we have to make sure. While intellectual property protections are very important and that we’re aware of them that they too don’t get in the way to inhibit this. It has to all be pulling in the same direction, nuanced as it is.

[00:43:43] Dr. Abrams: I’m optimistic that we can move this forward 10 years and it’ll be, it’ll be a challenge, but if you don’t start, you don’t get it.

[00:43:53] Bryan Fields: Perfect. Well, I appreciate your time, John. We’ll link everything up in the show notes so that people want to get involved in and find the link and [00:44:00] look forward to kind of keeping up to date on what’s going on with CSC and having you back soon.

[00:44:04] Dr. Abrams: But thank you so much for the opportunity. It was a very enjoyable discussion.

Thanks so much for listening to The Dime . Subscribe or follow us on Seeking Alpha, Libsyn, Apple Podcast, Spotify, Google Play or Stitcher. And we’d really appreciate it if you could leave us a review on Apple Podcasts. It helps others find our show.

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Synthetic Cannabinoids Manufacturers?

This month, we want to touch on a topic that’s been circling the news quite a bit; how yeast may become the method in which cannabinoids are produced. You probably saw the headline “Vancouver biotech company produces CBG from yeast”, but this isn’t the first company to have successfully produced cannabinoids using a micro-organism such as yeast.10 Chronos Group, as well as several other companies like InMed Pharmaceuticals and CBYeast, have been working on successfully commercializing this technology for quite some time.

A Gmo Feast For Cannabinoid Yeast

The way the technology works is by providing sugar to yeast, and like brewing beer, the yeast uses the sugar to create the target cannabinoid. The difference between this technology and brewing beer is that, in this case, the yeast has been genetically engineered to create a specific cannabinoid. This is done by providing the yeast with a “blueprint”, or genetic code, of the cannabis plant enzymes that are needed to create the target cannabinoid. Even if this technology is successfully commercialized, it will be interesting to see how the consumer market reacts to a “GMO” cannabinoid and if it can economically compete with the traditional production methods.

The main area we believe this technology will be valuable to be the pharmaceutical sector, as it could be easier to obtain a minor cannabinoid such as CBC or CBN through synthetic methods rather than standard agricultural practices. Only time will tell how disruptive this technology will be in space. The important part to remember with synthetic cannabinoids manufacturers is working with a synthetic cannabinoid expert.

As always, please reach out if you have any feedback or there are specific topics you would like us to elaborate on in the future.

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From executive-level strategy to technical know-how, our actionable insights keep you ahead of the pack!

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!

In this episode, we answer questions like

• What is the MSO Gang?
• Why did the Governor of Nebraska say what he said?
• Which companies are crucial to moving the needle forward?

and explore
• our favorite cannabis industry leaders.
• the pharmaceuticals vs cannabinoid medicine.
• cannabis and its endless benefits.

All this and more on this week’s episode of The Dime.

Hosted by the founders of Eighth Revolution, LLC. Bryan Fields @Bryanfields24 & Kellan Finney @Kellan_Finney

Follow us on IG (@thedime_8th) and Twitter (@thedime_8th) to submit your listener questions.

Kevin Carrillo is the COO of Cannabinoid Nation, the industry’s premier brokerage and consulting firm, and the host of Cannabinoid Connect, a cannabis podcast about news, policies, tech trends, social justice, investing, cultivation, and the plant’s environmental, economic and medicinal benefits.

Website: https://cannabinoid-connect.com/

Spotify: https://open.spotify.com/show/06g2V0Jee6Gp71zhfJzVk5?si=Bnd8e9WnSOewLLC_nZqKTA

Apple Podcasts: https://podcasts.apple.com/us/podcast/cannabinoid-connect/id1513621707

Google Podcasts: https://podcasts.google.com/?feed=aHR0cHM6Ly9jYW5uYWJpbm9pZGNvbm5lY3QubGlic3luLmNvbS9yc3M%3D

YouTube: https://www.youtube.com/channel/UCNNoKid-G1uBCHCAxpZVRNA

Twitter: https://twitter.com/canna__connect

Instagram: https://www.instagram.com/cannabinoid_connect/

Facebook: https://www.facebook.com/CannabinoidConnect1

[00:00:00] Bryan Fields : [00:00:00] What’s up guys. Welcome back to another episode of the dime as always. I’ve got my right hand, man, Kellan Finney here with me. And this week we’ve got a very special guest, Kevin Carillo. Kevin, thanks for taking the time. How are you doing today?

[00:00:14]Kevin Carillo: [00:00:14] I’m doing well, Bryan, thanks so much for having me on and Kellan what’s up? Good to see you guys.

[00:00:19] Kellan Finney: [00:00:19] Good to be seen, you know

[00:00:21]Bryan Fields : [00:00:21] Absolutely today, we’ve got some special topics, ones that I know the internet waves have been seen for a while. And Kevin, before we hop in, I’d love for you to kind of give a little bit about your backstory, how you got into the space and kind of educate the listeners on the value you bring to the industry.

[00:00:35] Kevin Carillo: [00:00:35] Sure. Yeah. I mean, I won’t go too deep. We might get into that later, but at a high level I started cannabinoid connect podcast back in April, or excuse me, March of 2020 ,  with the central mission to dispel all the lies and stigma that’s associated with cannabis. You know, we live in 2021 now and there are. A number of testimonials, but people that have used CBD and [00:01:00] THC and other minor cannabinoids to improve and enhance their daily lives. So, you know, the mission of the podcast is just to have smart people on from different disciplines that ,  really educate and inform people, you know, about the plants, endless benefits, because there’s a lot of them.

[00:01:15] Bryan Fields : [00:01:15] I love it. And a little bit about your background.

[00:01:19]Kevin Carillo: [00:01:19] Yeah. So my background ,  grew up in the land of enchantment, New Mexico, 30 minutes outside of Albuquerque town called Belen. And it’s actually timely because New Mexico and we can get into this, but they’re actually have less than 24 hours to get their bill passed ,  for, for rec. This legislation season, but ,  any who I grew up in, in Belen. I wrestled all my life, came from a wrestling family. I was recruited to Bucknell in Pennsylvania to wrestle. I wrestled for one year there and after I hung up the shoes ,  that was when, you know, I wanted to live a more kind of fulfilled life and cannabis was part of that lifestyle. So that’s really where I started to become a big consumer of cannabis.

[00:01:59]Bryan Fields : [00:01:59] Just [00:02:00] curious to know how that first eighth of the plant was right after you hung up  the shoes.

[00:02:05] Kevin Carillo: [00:02:05] Yeah. I mean, you know, like we talked about it before we started recording, like wrestling’s a, a grind, it’s a tough sport, right? I mean, there’s so many variables, not only as a D one athlete for all sports, you’re working, you know, working out hard, you got two a days, but then there’s that weight management factor, right. You’re, you’re constantly cutting way, meaning maintaining your diet. And it gets rough when you’re going to class and doing all that. So I really. Give those, those athletes a lot of respect at the college level. So yeah, I mean, after that intense kind of lifestyle, you know, being able to just go to class and, you know, do my studies and then smoke cannabis and, and unwind ,  it was a great, great transition man. And it has to stop, you know, I’m 32 now, so ,  I’ve just been continuing to, to make it part of my lifestyle.

[00:02:53] Bryan Fields : [00:02:53] Awesome. So let’s get into the questions for today as a fellow tribe member of the MSO gang, Kevin. The [00:03:00] people out there that are unfamiliar, what is the ?

[00:03:04] Kevin Carillo: [00:03:04] The MSO gang is a movement,

[00:03:06] Bryan Fields : [00:03:06] in my opinion. You know,

[00:03:08] Kevin Carillo: [00:03:08] if you’re familiar with the Twitter world and you’re, you’re kind of within the financial markets and you’re following different people, Bitcoin’s kind of a big revolution.

[00:03:15] Right. And I see the MSO gang,


[00:03:17] Emerging as that same type

[00:03:19] Bryan Fields : [00:03:19] of,

[00:03:19] Kevin Carillo: [00:03:19] of coalition in that group. And so I think what the MSO gang means is it’s it’s awareness around. The,

[00:03:26]Bryan Fields : [00:03:26] The

[00:03:26] Kevin Carillo: [00:03:26] high caliber companies that are currently operating within the United States, you know, on the, on my podcast, we’ve talked a lot about how there was this focus in 2018,


[00:03:37] With the Canadian LPs, right?

[00:03:39] Because they were one of the first list within the Canadian exchanges, the Tilray’s

[00:03:43] Bryan Fields : [00:03:43] raise

[00:03:44] Kevin Carillo: [00:03:44] the Aphria is the auroras and,


[00:03:46] You know, you didn’t really hear much about the multi-state operators, but you know, now as more States are coming online in the U S with either medical or adult use, these MSO’s are really starting to shine.

[00:03:59] Bryan Fields : [00:03:59] And [00:04:00] so I

[00:04:00] Kevin Carillo: [00:04:00] think that these, the MSO gang is the early adopters that really see the value of these companies. And they see that this is an opportunity for generational wealth and, and we’re all about the mission and the movement to just, you know, make cannabis more accessible to people.

[00:04:14] Bryan Fields : [00:04:14] Yeah, it’s definitely a movement.

[00:04:16] And when you think about it, you got like the Elon Musk is like the die-hards right. The Bitcoiners and the MSO gang. And just seeing the three of those operate on the end of that. Sometimes they all bleed together telling, have you any experience with the MSO gang? Are you a part of that tribe? Well, I’m definitely a part of that tribe.

[00:04:30] I like it because ,  I’m not ,  investing is like a new. New hobby for me, I’m only like two years into it. Right. So I just started like two years ago, but I was always like getting frustrated, trying to like invest in cannabis. Cause I’d like, I’d pick one company and I’d watch it for a month. I’d be like, it’s not doing anything.

[00:04:46] And then I’d like move over to another top company. And I was like, Oh, now that company is doing something. And I’m like playing this back and forth game. And I was like, I wish there was a sweet ETF that I could invest in that gave me exposure to all of them. And then lo and behold, the [00:05:00] MSO. Right. MSLs right.

[00:05:02] Came out and ,  and it was perfect. So I just reallocated all a lot of my cannabis. Assets into MSLs and I’ve been very grateful ever since. So that’s my experience with it. I mean, you probably could speak a little on a higher level about today. Brian, it’s more about an educational movement. I think the biggest, at least in my opinion, the reason MSO gang was formed was because people on Twitter took to  the internet and said, we’re sick of having US leadership on the television and them showing Canadian tickers.

[00:05:32] Something, the massive disconnect. And I think it took that sort of movement for people to be like, okay, like let’s just break it down. The companies that operate in Canada are not US-based companies. How to determine that they’re not MSLs. And I think that’s kind of the MSO gang, and I think it continues to come back to what you do really well on your podcast.

[00:05:52] Kevin is, can do the educational movement, right? If it’s an education moment of kind of opening the eyes to the [00:06:00] rest of society about the fact that differences between us and Canada, and then some differences, the operators in the U S for growing substantially. And I think that starts with understanding from an educational level where we need to go.

[00:06:11] Yeah, I couldn’t agree more, Brian. I mean, education is key in so many different facets of this industry, you know ,  you mentioned on the investment side and the education awareness around ,  these multi-state operators, right. That are performing very, very well in States like Florida, you have truly right.

[00:06:29] You’ve got the Cresco labs and curely and ,  terrorists and out of New Jersey. And so it’s so important that that people. Understand and are aware of these, these companies, right? Because ,  there’s a, there’s a window, you know, and we’re kind of in that ,  that opportunistic window where ,  they’re not really heard about and known about.

[00:06:48] And when that time comes, when safe banking happens, institutional investors come in and ultimately these episodes are listing within the NASDAQ exchange. It’s going to be a whole different story. You know, [00:07:00] and, and education, like I said, in, in different facets, you know, also on the stigma side, right.

[00:07:05] And the, the medicinal benefits side, right. There’s been so much misinformation and distance formation over the years due to prohibition that it’s really on, you know, the MSO gang and consumers of cannabis, advocates of cannabis to really step up and, and, you know, be comfortable, get out of that cannabis closet and, and just be part of this movement because it’s inevitable it’s going to happen.

[00:07:29] Yeah, it’s going to really change the world for the better on, on multiple reasons. So continuing on that, my question to you, Kevin is you’ve had a ton of really great guests with guests on your podcast has surprised you the most. I’d say one that really stuck out to me the most was sitting and talking with Len may ,  from endo Canna health.

[00:07:52] And

[00:07:53] Kevin Carillo: [00:07:53] the guy is really articulate and savvy when it comes to like our endocannabinoid [00:08:00] system and how these ,  cannabinoids and secondary compounds like terpenes and flavonoids, how they interact with each of our unique body chemistry. And, you know, being in a state like Texas, where we have a barely a medical program, right.

[00:08:17] It just fascinated me because if you’re, if you’re buying in the illicit market or, or even, you know, if you’re buying CBD at a retail shop, for the most part, like. We still don’t really understand everything what’s in those strains. I mean, like again, the terpene profile, the cannabinoid ratio and we, and then two to add to that, we don’t even really have a clear understanding of our endocannabinoid system and our genetic makeup.

[00:08:43] So we don’t really know, you know, if we’re. Super sensitive when it comes to this cannabinoid or that cannabinoid. So in our conversation, the way he was explaining this stuff was just, it blew my mind and it just really level set me in the way that we still have so much to learn. Not [00:09:00] only about the plant, but also ourselves and how, you know, we both biologically ,  you know, synergistically come together.

[00:09:10] Kellan Finney: [00:09:10] No. I think that was really well said. And I think that that right there is where ,  a lot of excitement, at least in the, in the scientific industry is, is just from, I mean, it’s this brand new opportunity for scientists to come in and just be able to publish low lying fruit. I mean ,  There’s just no fundamental research out there, right.

[00:09:28] Because of prohibition and kind of like the scientific blackout, if you will associated with the prohibition. And so like when I got in the industry, he couldn’t look up the boiling point of THC. Right. And so it’s just insane how far we’ve come. And I mean, there’s just ample opportunity for discovery in terms of the endocannabinoid system.

[00:09:47] Additional cannabinoids. I think they come out with like, they discover new canabinoids like every month now it’s, it’s pretty phenomenal. So like, that’s probably one of the most exciting things from a scientific perspective in terms [00:10:00] of ,  this opportunity right now, how long is it going to take? I figured that out.

[00:10:04] I

[00:10:04] Bryan Fields : [00:10:04] mean, we’re talking about personalized medicine about endocannabinoids. We’re talking about cannabinoids are coming out each month. Well, is that going to take Kellan to, to kind of get the ball rolling on, then us to start kind of putting these pieces of puzzle together?

[00:10:15] Kellan Finney: [00:10:15] I don’t think it’s going to take long, like from a scientific perspective, in terms of like doing the science and developing like the actual conclusions from these experiments.

[00:10:26] What I think is going to take a really long time, it’s going to be the red tape and the regulations and actually getting these. Madison’s into a ,  a channel to be delivered to consumers. That is the federal government’s comfortable with. It’s really where I think is going to be the biggest obstacle.

[00:10:44] But I mean, in the twenties, I mean, just look how fast they came up with a vaccine. You know what I mean? If there’s the resources there. Right. But I mean, if it’s true, though, if the resources are there, we can make in men, stride, scientifically speaking in a [00:11:00] short amount of time.

[00:11:02] Kevin Carillo: [00:11:02] I agree. I mean, if there’s that focus and see, and that’s the thing, right?

[00:11:06] We just need to get people past that point of the stigma. And the misunderstanding of the plant and, and that’s where that education factor comes in. That Brian mentioned of, if we can really start to communicate the benefits, you know, even if they don’t want to be a part of it or have it near them, at least be open to, you know, reform legalization on the legislative.

[00:11:28] Right. You know, side so that we can really start to improve lives and in so many different ways, whether it’s therapeutic or medicinally economically or environmentally, right. Because there, there is just so many benefits, but education is just, you know, it’s, it’s gonna, it’s a central kind of key, you know?

[00:11:45] Bryan Fields : [00:11:45] Right. And I think the first step with that is kind of. Fixing what’s wrong with society with all the people that are obviously in prison for the plan. And then starting to look at the plant from the positive saints, who much of society is like looking at things from a negative standpoint [00:12:00] of you got to take a drug test and it’s like, okay, you had a little THC in it by maybe use it for medical reasons.

[00:12:05] Maybe it doesn’t. He doesn’t have a job anymore. We have to stop the ball that we have to, we have to put the fundamental truth in front of us, which is it is plant helps people. And then from there we can start the building block from an educational standpoint. I don’t know how that’s going to take and yeah.

[00:12:19] Helen. I disagree. I think it’s going to take a long time. And while I wish it’d be fast, because obviously, you know, speed for me is always crucial. They’re not going to operate in warp speed. It’s just impossible. There’s going to be too many legislative hurdles. There’s going to be too many lobbyists, holding things back and big pharma is I think gonna cost more and they’re going to help.

[00:12:39] I think they’re looking to get in and by looking, I mean, they’re jockeying for position as we speak in different areas. And I think that involves them continuing to. Kind of build that moat of patents to protect themselves so that when the green light comes on, they’re not starting at zero they’re 50, 60% into the industry.

[00:12:59] Kellan Finney: [00:12:59] They [00:13:00] want go. I think one of the biggest misnomers about big pharma where I think they’re going to struggle in the cannabis space is there is a law. It’s not law. It’s you just, you can’t patent nature. Right? And so pharma can’t patent THC. Pharma can’t patent CBD, right? GW has a patent on CBD and other plant chemicals and some other formula chemicals that they formulated in there.

[00:13:27] They have a patent on that formulation specifically, but it’s the molecule CBD. That is the ABI within their, their pharmaceutical drug. Right. And so. I think that that’s going to be one of the biggest challenges, which why they haven’t jumped into this right. Is because they can’t patent plants and they can’t patent the natural extracts.

[00:13:45] They can’t plant the actual flower itself. And so there’s not this, there’s not like a free monopoly that they can come grab. Like they can’t in all these other ,  health sectors. Right. And then the other really complicated thing about cannabis and hemp as a [00:14:00] pharmaceutical is. Pharmaceutical companies hate side effects.

[00:14:04] The way that they mitigate all of those side effects is by doing single molecule drugs. Right? So it’s a single molecule, it’s an API, right. And that’s just one specific molecule and then they eliminate everything else. So they know that if something, if some side reaction that’s happening inside this individual, it’s because of this one molecule versus.

[00:14:24] Cannabis is hundreds of molecules, even the extract you’re talking turpines, flavanoids THC CBD, all these other different minors. Right. And like trying to decide, like what is causing a specific side effects through clinical trials with that kind of a cocktail, if you will, is going to be ,  an obstacle that pharma has never tackled before.

[00:14:45] Right. That’s why they do the single molecule API. Right. And this is, this is the staple of big pharma. So I think that those two factors are going to make it really, really challenging for pharma to come in and just wipe the floor [00:15:00] with everyone. You know what I mean? That there will be a big, there’ll be a, a large sector of pharmaceutical related cannabinoids that they, it’s not going to be THC.

[00:15:08] It’ll be like ,  a derivative of THC that nature doesn’t make that. Has a similar interaction. Right. And there’ll be able to patent that and there’ll be, there’ll be a little up a channel for them to kind of ,  own their little lot if you will. But I don’t think that they’re going to come in and mop the floor with all of these other big companies because of those two ,  those two factors.

[00:15:27] I mean, I could be wrong, but that’s just my perspective perspective on it.

[00:15:31] Bryan Fields : [00:15:31] What do you think Kevin.

[00:15:34] Kevin Carillo: [00:15:34] I mean, I don’t know enough about it to like, in that particular area. I know that you’re right. Like when, when Kellen mentioned that ,  GW created that it’s a synthetic, it was just called like Marinol or something with an M.

[00:15:47] Yeah. And it was, it was like for epilepsy, right? It was there. Kind of entrance into the farmer pharmaceutical space with synthetic cannabinoids. So ,  that was interesting. And so, I mean, that makes more sense [00:16:00] when you explain it, that way of why they went that route because ,  they’ll, they’ll always do that, I guess, or ,  but, but when I, when I think about it, Brian, you, which you mentioned, I, I think you’re right in the sense of like they’re playing both sides right now, pharmacy pharmaceuticals.

[00:16:12] There’s the pharmaceutical industry there. They’re playing the one side where they’re beefing up their lobbyists and continuing to distribute the misinformation and the propaganda right. To, to protect their interests. But then I think that on the side, of course, they’re doing their own R and D and, and studies to really see where they can play in this space space once it inevitably becomes about.

[00:16:33] Right. And so ,  I just think it’s interesting. I think that where, where we can kind of step in and really move the needle is like, like doing what we’re doing here. Podcasters really getting the word out. And then groups of people like you’re seeing celebrity brands come out, right? You’ve got Seth, Rogan’s a houseplant.

[00:16:52] You’ve got Jay Z a monogram. So those celebrities, those pro athletes, they have influence, they got people following them. So there’s one way [00:17:00] to remove the stigma. Start to educate on the benefits, but then there’s also, you know, the people that actually need it. So those testimonials that we mentioned earlier, those are super important.

[00:17:10] We need to get those out. How can you argue with someone who’s saying that, you know, what they took makes them feel better as opposed to the other 15 medications that they’re on? You know, and then the last group, I think that could really be a huge voice in proponents. Move the needle forward is women.

[00:17:25] You know, I think that there’s tons of benefits when it comes to women’s health and wellness. When it comes, you know, with, with cannabinoid therapeutics, we’ve seen it in history, play out with queen Elizabeth and others. And so I think that if that group kind of got together and started to raise of what go on, you know, The today’s show and all those accepted mainstream media shows to start to de-stigmatize this, I think that, you know, that that will really start to move the needle and maybe put pressure on the pharmaceutical companies to work with us more, instead of trying to do their own thing, you know?

[00:17:59] The women for [00:18:00] sure. Decision makers, right? That’s the, as a marketer, that is your target demographic. When you want the sweet spot of understanding, who are the power players in the space, they are the decision-makers are the ones that understand exactly. Like I’m going to get this. And then they’re the ones at home and being like, you’re going to take this Brian, like my wife’s like, by the way I saw this, like, you’re, you’re taking this product and it’s like, okay, like this is something I’m definitely interested in taking now.

[00:18:21]And to kind of continue on your first point though, about the pharmaceuticals. No one that I’ve spent some time digging around the patent space. And I can tell you that as a rabbit hole, any rabbit hole, and when you get down into the minor cannabinoids and understanding the direction they’re going, big pharma is already lining up their moat.

[00:18:38] Bryan Fields : [00:18:38] And it’s not that challenging to go find it. It’s just a matter of like, these guys are here and not only are they here, they’re already positioning kind of their fortress of saying like, this is the route we’re going to take. And whether it takes six months, 12 months, two years, We’re here. We’re ready to play.

[00:18:55] We’ve done the research in some aspects. We think this is the direction we want to go. And it’s [00:19:00] exciting to say the least, because obviously you could just be, you know, pre pre studies and kind of taking early steps, but just showing that they’re advancing, it is really, really exciting.

[00:19:11] Yeah. I mean, it just legitimizes everything, right.

[00:19:14] Kevin Carillo: [00:19:14] It starts to really flip the conversation from that’s a schedule, one narcotic it’s bad. It’s illegal too. Wait a second. Wait, what it does, what? And we have an endocannabinoid system and what’s the CB one receptor. What’s the CB two, you know, it starts to open that dialogue. It’s great. Yeah. Awesome.

[00:19:32] Bryan Fields : [00:19:32] So Kevin favorite company in the space and why favorite company in the space?

[00:19:39]Kevin Carillo: [00:19:39] I like, I like cure leaf. I like their recent announcement where like, you know, I, it was new, it was a chain, it was different from what the other episodes are doing, because they’re really, you know, you’re seeing terrorists end, really try to get their foothold in the East coast. You’ve got, you know, Florida hyper-focused with, I mean, truly hyper-focused in Florida ,  gage in Illinois.

[00:20:00] [00:19:59] So I like to cure, leave Bay that announcement about. Purchasing that European medical company. I forget the name of it. Or something like that. Yeah. So it kind of tells me that they’re looking even outside the U S they’re really trying to be, you know, the major player. And so ,  and I liked their, their leadership team, you know?

[00:20:19]I’ve listened to the CEO on their, on their earnings. Yeah. Calls Joseph. I forget his last name starts was a, B. Bear and yes. And then you’ve got Boris, Boris, of course. So yeah, I mean, I liked them and ,  but they’re all great. You know, I mean ,  these are savvy investors that have been in the space for a long time and they’re, you know, they’re, you can tell that their legacy as opposed to some of the other private equity guys that are stepping in ,  cause they just, they know the industry, you know, they, they know it from end to end and that’s what is exciting just to be a part of it as this, as the stakeholder, tell them who’s your favorite.

[00:20:50] Kellan Finney: [00:20:50] I’m a little biased. I like a smaller company called Swazi. Have you heard of them? They ,  I think they’re only strictly focused in Colorado right now, but they’re going [00:21:00] through buying a bunch of ,  Dispensary outlets, the dispenser outlets called Starbucks. And so from the very beginning, Starbucks has been around and like, I just, the way that they run their business from a storefront and the education and just like their branding, I was a big fan of them and I’m a Colorado local, so like support mistake.

[00:21:20] Right. And so that’s the ,  I think they were formerly known as medicine men. Right. And then they went through like a merger and rebranding, and now they’re Swazi. They’re not really as well known. They don’t nearly have as much volume, but they aren’t, they aren’t publicly traded as an OTC. But as far as like one of the bigger players goes, I would say Columbia care, probably just because ,  I’m ,  I think that from a business perspective, they’re, they’re really sound right.

[00:21:46]They’ve, they’ve done a lot of organic growth. The really, really strategic acquisitions ,  the green solution and Colorado, which is probably this, one of the top two, my second favorite ,  dispensary brand in Colorado. Right. And then their [00:22:00] strategic acquisitions out in California, I think that they were very patient and they’re really thoughtful on how they’ve been expanding and kind of growing that ,  footprint.

[00:22:09] And so that’s kind of why I’m a big fan of Columbia care as well. And so those are, those are my two. James, what about you, Brian? I think from a leadership perspective, we’re really spoiled. The top MSO is all have really, really established, strong leadership. They have different skill sets with an understanding strategically on the direction they want to go some focus on operations, someone financing, you can literally pick any of them.

[00:22:32] They’re really good. My favorite is ,  bend from green thumbs. I mean, he, he’s awesome. He’s been killing it. Yeah. He’s been carrying if people on the, like on CNBC, they’re like talking to him, they’re throwing him like. Stupid questions. Like we believe in science and we believe in, we like far facts are hard, right?

[00:22:51] Like new facts, I think you said are like hard to understand. He fucking them. And he, he doesn’t really bend with it. Like they continuously ask [00:23:00] him silly questions and he continues to push really informed of information. And it starts with understanding that the consumer wants more candidates and that.

[00:23:09] Bryan Fields : [00:23:09] The consumer, is it just going to be the one buying flower they might be having the drink can, which can nicely displayed on the media, right. Perfect product placement. And it shows it’s not a, it’s not a replacement for the person consuming flower, it’s replacement for the alcohol industry. And I think once people understand that.

[00:23:27] That they’re going to be competing in multiple product categories. The cannabis industry can go a million different ways and can kind of explode in a million different ways. And it’s an exciting opportunity. It’s not just this vertical. It is like the takeover effect.

[00:23:41] Kevin Carillo: [00:23:41] Yeah, no, no doubt about it. I’m so glad that you called out Ben, because that was awesome, man.

[00:23:46] Like I, and you saw everybody just kind of come to support him because he was just so composed, so articulate and, and, you know, he just came back with facts straight up, like, you know,

[00:23:57] we need to start holding these policymakers [00:24:00] accountable for the statements that they’re making like that the governor from Nebraska,


[00:24:04] Ricketts, who, who, you know, basically when, and these are his.

[00:24:07] Verbatim his exact words were, if you legalize marijuana, you will kill your kids

[00:24:12] statements. Like those ,  need to be challenged. And Ben did that. To a T he did a great job. And ,  yeah, I think, I think you’re right, man. The more like you know, of these, of these leaders within the industry that step up, like Ben’s doing, it’s only gonna help because it’s gonna make these policymakers change their, their, their game plan.

[00:24:33] You know, they’re going to start to realize that those ridiculous statements don’t play out in 2021, we’re too savvy as consumers, or even non-consumers to understand that, you know, there’s no addictive properties to cannabis. There’s no recorded death of an overdose of cannabis. Right. So that was, that was awesome for sure.

[00:24:53] Well, why does he say that? Why do you think Kelly’s like, why is he making that sort of outrageous statement?

[00:24:58] It’s such a good [00:25:00] question, because I’ve asked that question too. It’s gotta be one of two things. It’s either he’s ignorant and he’s heard the same rhetoric and has no experience with the plant.

[00:25:10] And so he’s just kind of going off of what he’s heard or he’s protecting interests, right? We know that they’re super PAC money for both of these parties. You know, we know that big tobacco and big pharma play a big part in those super pack, you know ,  efforts. And so I, you know, I could be that also where, you know, he’s, he’s talking to these people, but again, like if it’s that case, then he’s going to need to come up with new material because that shit is not going to work, you know?

[00:25:38] Bryan Fields : [00:25:38] I mean both. Those could definitely be it. I could just imagine he’s like circling something with a Sharpie being like, this is exactly where I think the death spot it. And you’re like, sir, like, I don’t know what you’re doing here. I mean, that’s an outrageous statement though, that he made and the fact that there are no recorded deaths and that Heath of opinions, like pushing against the, the huge momentum, right?

[00:25:58] Like we’re moving, [00:26:00] it’s going forward. We’re going to legalize more and more States, right? We’re going there. And for him to say something that’s so asinine in 2021. Wow.

[00:26:11] Kellan Finney: [00:26:11] Helen, you have thoughts on why he would say something like that? That’s a guess. I would say it’s the latter. I mean, I wish that could play ignorance in that and that it’s rhetoric and all those things.

[00:26:23] But like at the end of the day, like I think that, I mean, he’s politician, he needs money to run for his elections. And like, literally he is pleasing. One of his donors is the only thing that makes any sense. Like we could entertain the other factors, but like, let’s be real. Like, he’s probably just like.

[00:26:42] Doing a favor for his old buddy who wrote him a big check, you know what I mean? Like that’s, that’s how that world works. And so like, it’s nothing wrong with it. It’s just how the world, that’s how that politic world works. You know? So, I mean, especially with something as just audacious as that kind of a comment, you know what I mean?

[00:26:58] Like, just so [00:27:00] out in left field, like your children could die. If we legalize it, like. Well, if we legalize it, like everyone’s going to, we’re going to have militias and ananarchyD anarchy exactly.

[00:27:08] Kevin Carillo: [00:27:08] That’s what I thought. Like, like what kind of like finish your thought when you say that, like, what do you mean? There’s so many different ways you can interpret that statement.

[00:27:15] Kellan Finney: [00:27:15] And he’s like, literally at a press conference. So like everything’s Britain written down. I mean, we live in a world where you tweet something and it, you know, it’s, it’s crazy. I can’t believe he would say it. Yeah. This is how I envision like that scenario in my head. And maybe this is just me taking a dive.

[00:27:29] Is that. He got this piece of paper and it was from his donor. And he’s like, do you want me to say this? He’s like, exactly like that. So he’s like filtering through and he’s like, but I don’t agree. They’re like, you’re going to say that and you’re going to need it. And he’s like, you got it, like get up there.

[00:27:46] And like, he’s like, I know you’ve heard in the news that every state is looking to legalize it because we need tax money. But if we do, you’re dealt and we’ll die and he’s like, thank you for listening. It’s just, it’s wild. Yeah, I [00:28:00] tweeted. I was like, I hope that more politicians say that ridiculous stuff, because it’s only going to help our movement, you know?

[00:28:06] Cause we saw the, they saw the backlash with ,  with governor Ricketts, you know, so it’ll just give us more fuel to the fire. Absolutely. Keep getting that Moscow gang getting louder and louder.

[00:28:17] Bryan Fields : [00:28:17] So I can for you, Kevin, biggest misconception since you started working in the cannabinoid space.

[00:28:25] Kevin Carillo: [00:28:25] Biggest misconception. That’s a good question. I think the misconception, at least in my eyes was ,  the amount of people that are locked up for cannabis, like the real, real harsh reality of, of the social and racial injustice that has been related to cannabis. Cause you kind of talk about it in passing, you know, and, and especially, it’s kind of a, it’s kind of a ,  a bullet point, you know, now that there’s so much momentum for legalization and reform, but.

[00:28:54] Man, it’s an issue like I’ve had core Vancouver on who was recently ,  released on clemency from [00:29:00] president Trump’s administration. And I had Evelyn Chappelle on that last Chappelle, they were you involved in the same ,  cannabis conspiracy and just the unfairness man, like core vein. Had this conspiracy had two knocks against him before.

[00:29:14] So two other strikes that were minor cannabis offenses, and this guy’s live in life three years later after his ,  you know, after his set last charge. And so he’s thought nothing of it, he’s living his life. He’s got kids and the guy who was put in prison off of that cannabis conspiracy. Basically had the right to just one day say, Hey, core vein was involved in this.

[00:29:37] And so was Evelyn. And we, they need to get, come to jail too. And there was no investigation into their, you know, involvement. There was no checking to see evidence of their correspondence through texts of what they really talked about. They literally took that guy’s word that was in jail, who was the accomplice or involved and brought, they brought core vain and Evelyn and gel also.

[00:29:57] And, you know, Evelyn, I think served [00:30:00] was it. I don’t know, I don’t want to butcher that. I know that core vein sort of 10 years and he was sentenced to life. So ,  I was just surprised about how that process of like, once you’re, you know, you’re, you’re, you’re taking in from, for a cannabis offense, how they don’t do their due diligence, even they don’t look at your even track record to see, are you a prior offender?

[00:30:20] Do you have a record? No, it’s just kinda like they treat cannabis just like, you know, heroin or methamphetamine or, you know, And it, it just blew my mind, man. So that’s one thing that when we talk about education and you mentioned it initially that there’s just more focus and effort around that, especially with these big MSLs to make that part of their value proposition, their pillars within their company, to make sure that, that, you know, those injustices are rewritten because it’s a big problem.

[00:30:50] Bryan Fields : [00:30:50] Definitely. Before we wrap, we ask our guests three questions.

[00:30:55] So the Firstone, you could sum up your experience in the cannabinoid space into one main [00:31:00] takeaway or lesson you pass onto the next generation. What would that be?

[00:31:06] Kevin Carillo: [00:31:06] Keep learning. We have a lot to learn still about this plant. And ,  it’s exciting and it’s, it’s a plant that’s supposed to bring people together for, from whatever demographic, whatever background, whatever skin color.

[00:31:23] It’s a plant that brings people together to community and it helps to enhance their life, whether it’s through ,  material goods that can be produced through it, whether it’s therapeutic environmental. So just always keep that front and center that, that this plant is, is just for use for good and to keep learning because we’re barely scratching the surface.

[00:31:43] And it’s just exciting to be a part of this.

[00:31:47] Bryan Fields : [00:31:47] The last time you consumed any cannabinoid product. 20 minutes ,  before this podcast started,

[00:31:56] Kevin Carillo: [00:31:56] I had some slurry cane. All right. We’ll chat [00:32:00] out for them. So prediction time, let’s do two of them. Does New Mexico get it, Don. We are recording on March 19th. This won’t be released until April, so you’ll have a chance to kind of go back. We can record it both ways. If your bike doesn’t get done today. Hey, let’s, let’s bring it back.

[00:32:16] I’m happy to do it. I’ve had a great time. It’s such a good question, Brian. So I’m literally in New Mexico right now. This is my home state, so I have family here. I’m staying with my parents, but I’m here on business because, you know, everybody’s just kind of on their tippy toes waiting to hear what’s going to happen.

[00:32:32] So that the landscape right now is that ,  it’s gone to the Senate floor. And there’s been three amendments to this bill. And just to kind of back up, this has played out two years before, so they’ve, they’ve made this a major, you know, cannabis legalization, a major topic within the legislative session.

[00:32:48]And internally they weren’t able to come up with a resolution of what they agree on for what that bill looks like to get it to the governor’s desk because the governor’s ready to sign it. So they’re in the same [00:33:00] situation down in this legislative session. There’s three amendments that they need to resolve and agree on.

[00:33:04] Once that happens, they need to go to the house to implement those changes, and then they send it to the governor’s desk. So they got less than 24 hours ban. I’m hoping it happens cause it would be great for the state of New Mexico and obviously the consumers of the state. So I, yeah, let’s run it back ,  to, you know, the taco, if it’s, if it happened or it didn’t, you know, but.

[00:33:25]I, I there’s a lot that they have to do, so I’m on the side of being a little more pessimistic, but I hope of course, that it does. Now when you want to guess ,  I think I’ll go the other way. Why not? I think it happens. Optimistic, Brian agreed. I’m going to think it happens a lot. So I think it, with politics, it always comes down to the wire and all of a sudden they’re like, you know what, we’re good with these, sorry for holding it up.

[00:33:47] But life let’s get this done. They need the money for sure. Like every other state does and the job opportunity. So the last question, six months from now, and that’s again, bad here to stay. [00:34:00] And are they taking on the big pointers? The the game stopped Reddit guys and the Bitcoiners. I think that they’re going to be right in that mix, man, for sure.

[00:34:10] For sure. So they’re not going away. We’re going to see, I’ve kind of mentioned, I talked about this in two phases or three phases, so we’re going to see ,  first with safe banking come in whenever that’s going to happen, right. We’re going to see kind of an uptick and a spike, right? Because again, that’s when it’s not going to be just a cash business anymore, we’re going to be able to bank with banks.

[00:34:31] And then that’s when the institutional investors are going to come in at some point, right? The big private banks are going to invest in these companies. That’s going to be huge, eventually the NASDAQ things. So that’s going to kind of bring the elevation, the awareness of MSO gangs ,  at a higher level.

[00:34:44] And then, you know, after that, it’s just going to be, we’re riding the momentum of what we’ve been riding and that’s the States legalizing. You know ,  I see that the States are going to legalize ,  probably faster than the federal government, meaning like there’s going to be more States in the U S that are legal and that’s going to put [00:35:00] pressure on the federal government.

[00:35:01] So that’s going to be another wave, right. And spike where we’re going to get that awareness. And, and ,  and then the last is the, is the eventual federal legalization at that point, you know, that’s where you look at when there’s going to be major consolidation. Right. When we talked earlier about. Big pharma, big tobacco stepping in and buying some of these, these ,  top performing FSOs.

[00:35:22] So, you know, I see a lot of back and forth on Twitter and it’s like, you know, people are scared and they’re seeing the prices drop this day and that day. But I agree with, you know, like you said, all the. The investors and leaders in the space, the Jason Wiles, the ,  the Brady cobs, they’re all saying, this is a long game, Todd Harrison, right?

[00:35:40] Like we’re, we’re in this for the long haul. So if you’re, if you’re every day staring at your, you know, your portfolio and ,  I don’t know, that may not be the right approach because this is going to take time. But if you believe in it, Hey, it’s going to happen. What’s that final words. I couldn’t agree more.

[00:35:58] Yeah. The rap, [00:36:00] like you said, Kevin, like we’re in the bottom of the first and at the end of the day, we’ve got a ton of innings to go and the journey is going to have a bunch of bumps and entered it. Yeah, exactly. Whereas we’re still so early on there, they’re literally building the foundation for how the game is going to be played.

[00:36:17] And it’s a fun thing to walk with the same time he paid him. Right. We’ve had tons of progress, but still in the grand scheme of things still in the first, they’ve got a ton way to go. So. Appreciate your time today, Kevin, for all of our listeners that would love to get in touch with you. And like more obviously we can definitely connect is a great podcast.

[00:36:34] It’s a really educational tool for them. Where else can they get in touch with you? Yeah, no, first and foremost. Thank you guys so much. I had a great time today. You guys are really easy to talk to. It was really fun. So ,  great job and what y’all are doing. Yeah. So as you mentioned, Cabernet connect ,  is streaming everywhere.

[00:36:50]On, on any type of audio streaming service that you like. We also have a YouTube channel. And then I just launched my new website. So it’s cannabinoid, hyphen connect.com. [00:37:00] And ,  yeah, all over social media as well. So Twitter, Facebook, and Instagram. And ,  if you want to get in touch with B, my email is [email protected].

[00:37:11] Cool. We’ll link that up all in the show notes. So all the listeners out there continue to listen for us, give Kevin and listen, give them a review and then give us a review also because we’re competing for reviews. So thanks everyone for your time. Appreciate it. Kevin, talk to you soon. Awesome, man. Thank you guys.

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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!

Bryan @bryanfields24 and Kellan @Kellan_Finney sit down with Dr. Jordan Zager , CEO of Dewey Scientific to discuss

• How Dewey Scientific uses data to make better crop decisions
• RNA sequencing to maximize the expression of genes
• How to set up a breeding scheme
• The role of tissue culture in the cannabis space
• How brands can replicate their product to provide consistency across state lines
• Genetically engineered cannabis
• Cannabis as medicine

[00:00:00] Bryan Fields: [00:00:00] This is the dime a 10 minute dive into the cannabis and hemp industry through trends, insights, predictions, and tangents. What’s up, guys! Welcome back to another episode of the dime as always. I’ve got my right-hand man. Kellan, sitting here with me. And today we’ve got a very special guest Jordan Zager CEO, and co-founder of Dewey scientific, Jordan, thanks for taking the time. How are you doing today?

[00:00:25] Jordan Zager: [00:00:25] Hey. Yeah. Thanks for having me on. I’m doing, I’m doing good. How are you doing?

[00:00:29] Bryan Fields: [00:00:29] Awesome. It’s a beautiful day here in New York, the end of  March. And we’re excited to kick it off.

[00:00:34] Kellan Finney: [00:00:34] And it’s pretty warm out here in Colorado, so

[00:00:36]Jordan Zager: [00:00:36] I’m jealous. It’s about 42 degrees and sleeting here in Washington right now.

[00:00:42] Kellan Finney: [00:00:42] It’s, it’s, it’s a normal spring,

[00:00:44] Bryan Fields: [00:00:44] I think before we get started, I think it’d be great. If you could share with our listeners a little bit about you and what Dewey brings to the space.

[00:00:51]Jordan Zager: [00:00:51] So a little bit about Dewey. We, we like to say that we’re bringing incredible science to the cannabis industry. And when we’re talking about credible science, we’re talking on the plant [00:01:00] genetics and biochemistry side. Cause you know, that’s really what cannabis is. And the end is it’s a plant that has very unique genetics and biochemistry. So we really try to apply modern science techniques to understand that. And then how to leverage that into the commercial cultivation and plant breeding.

[00:01:15] My background, I have a PhD in plant biochemistry and it was one of the early people to work with cannabis, genomics within academia. And I’ve discovered a few terpene genes, some synthesis. In the terpene family.

[00:01:29] Bryan Fields: [00:01:29] How did you get started in cannabis?

[00:01:32] Jordan Zager: [00:01:32] Yeah, so I ,  I’m going to go pretty far back here to my days in college, I worked in a plant biochemistry lab and you know, I was a college kid. I was smoking weed all the time. I was like, wait, I’m learning some really cool stuff about plant biochemistry. I happen to love this plant. Let’s, let’s make this my career. At that time, like there was medical and some States, and then recreational just, just started in Washington and in Colorado. So when I applied to grad schools, I only went to, looked for States where I could work with [00:02:00] cannabis, maybe at home, not necessarily in the lab that, that brought me to Washington. I found a lab whose main focus was the biochemistry of glandular tricombs and terpene production within secretary cells. So I, you know, I knew enough about plant physiology at the time.

[00:02:17] Oh, tricombs, terpenes sounds like cannabis, and it’s going to be pretty close to working with cannabis. So I joined that lab and then eventually I got to work with cannabis ,  part of my, my PhD project. And it was about that time that that project started. I decided, you know, let’s, let’s try to apply this into the cannabis space and it’s not like they’re, you know, at the time there were a bunch of large companies.

[00:02:38] Like there are today, at least in Canada, where they have like pretty in-depth research teams. And so in the time, since we’ve found a Dewey more and more companies have incorporated us in, but that’s, that’s how that was my path to the cannabis industry. Just a love for biochemistry and a, a love for cannabis.

[00:02:53] Bryan Fields: [00:02:53] Perfect combination. So before we happen to the questions. Take it back to Dewey. How, how did that start? Was that another [00:03:00] cannabis induced idea and kind of take us through that?

[00:03:02] Jordan Zager: [00:03:02] Yeah. So Dewey scientific it’s ,  it was founded by me and a plant breeder. When, you know, we, we started out as, as friends ,  umpiring baseball, actually, we were baseball umpires. And after a game, I think we went and smoked some weed and it turned out he was a plant breeder as a biochemist. And so we thought, Hey, let’s, let’s try to apply what we know to cannabis. So I think that that was in like 2015, 2016. We set up like a little makeshift lab in my house. We bought like some laminar flow hood on eBay, started doing some tissue culture in my house, and that’s how I liked it really started.

[00:03:35] And then, you know, fast forward a few years, we start pitching to investors. And we, we get funded. So really what we do is ,  we work with other companies, breeding programs, and we, we sort of supply them with, you know, the scientific expertise ,  as it relates to genomics, genetics, biochemistry to improve their breeding program. And so we work with a few folks in the space. We work with a couple of different farms in the [00:04:00] recreational space. Farm down in California, a couple of farms in Washington. And then of course we have our own recreational cannabis brands doing cannabis company. That’s in Washington and that’s it. And it’s whole ,  we, we do work with a couple of international companies. We’ve worked with some folks in, in ,  in Costa Rica. They, they recently just changed their laws. They’ve got a CBD market now. So we, we actually, we helped with the first import. Hampstead to Costa Rica because those seeds came through the Dewey lab ,  at one point. So that’s, that’s really what we do.

[00:04:28] Bryan Fields: [00:04:28] The classic tech garage story turned for the cannabis industry. So it’s, it’s awesome to hear the evolution of it for our space. So let’s, let’s kind of dive. Yeah. Sorry. Continue.

[00:04:38] Jordan Zager: [00:04:38] I was just going to say the first right to do tissue culture. You need an autoclave. So just like high pressure, high temperature. So we bought a Shopko down the street was, was going out of business. So we, we picked up like a $20 pressure cooker. And ,  that was how we, we made our first batch of media, $20 pressure cooker in my, in my garage.

[00:04:56] Bryan Fields: [00:04:56] Do you live in at home at the time?

[00:04:58] Jordan Zager: [00:04:58] No, this was, this was while I was in grad [00:05:00] school.

[00:05:00] Bryan Fields: [00:05:00] And imagine what your mom would say that if she opened up some, what the hell is going on here?

[00:05:04] So let’s, let’s dive into some of these things on the websites is better crop decision in its simplistic version. How Dewey do we do that?

[00:05:12]Jordan Zager: [00:05:12] So we are big fans of collecting data on your crop. If you’re going to want to improve something, you need to know what is going on. All right in the first place. So that’s, that’s sort of our approach there is, is capturing as much data, whether it’s plant performance data in the field, or if it’s data related to the genetic makeup of the plant, we take a full view of that too, and make better breeding decisions.

[00:05:36] Bryan Fields: [00:05:36] Let’s talk about those better breeding decisions. Are there ones you can specify, ones that are common in this space?

[00:05:43]Jordan Zager: [00:05:43] I, you know, I think with the increase, no, if we back up to when it became legal ,  with the, with the 2018 farm bill. You know, since then, there’s been a lot of progress by many companies in improving the genetics that are out there. I think the first couple years, everything was like a [00:06:00] cherry wine background. Now there’s, there’s, you know, maybe eight, you know, a few dozen of solid backgrounds that are out there. So, sorry, I’m going down a rabbit hole here. Genetic uniformity was a big problem with it. With the 2018 farm bill, like crops were varied, uneven. A lot of crops were hot. I mean, that’s still a big problem in the hemp space.

[00:06:18] You guys know that. So it’s, it’s a matter of, right. If you’re just breeding for, for low CBD or sorry, low THC abundance in a CBD backgrounds, you want to have the tools that can speed up your breeding decisions and your timeline to getting to what you achieve is that I don’t think that answers your question.

[00:06:38] Kellan Finney: [00:06:38] When I was thinking about this and you correct me if I was wrong, have you heard of the myostatin gene that was recognized it’s called the mighty mouse gene. Right. And so when I was actually thinking of what Dewey does, I was thinking about this kind of work that’s being done like by biohackers, I guess is the best analogy I could think of.

[00:06:56] And so, the presence of this gene or the actually [00:07:00] the absence of it causes muscles to increase dramatically, right? And so when I was thinking about doing it, I was thinking that’s exactly the type of work they do in terms of analyzing the plant to say, okay, like I see that say this specific strain has massive tricombs, right? And then all of a sudden it’s testing higher, but, but what is the exact reason that it has those larger tricombs and why is this strain yielding better when I extract it versus this strain isn’t, right? And so is that a good representation in terms of Dewey is going to come in and help me learn exactly genetically what’s going on from a expression standpoint. And then I can try to replicate that in my breeding program. Is that something that’s similar?

[00:07:39]Jordan Zager: [00:07:39] Absolutely. Yes. So, , you just have to have your trait of interest and when I say, yeah, you need the data on it, you know, you want to know, let’s say, let’s go back to your, your, , this plant is extracting extremely well. So, what will you do is, is to really learn the genetics behind that. You have to set up a breeding scheme. You want to have something that you want to set up a what’s called a segregating population. You want to have one [00:08:00] parent that has the trait. You want to have another parent that doesn’t have the trait you cross those. And then you, you look at the, the progeny, the children of that cross. And if some of them have the trait you want, and some of them don’t, you have, what’s called a segregating population. And that’s sort of the best way to go about understanding the genetics behind a specific trait of interest. You know, whether it’s powdery, mildew resistance or it’s extraction yield, that’s, that’s sort of the approach, the approach we take. So, specific examples of what we’ve done in the past are; One, is powdery, mildew resistance. We have developed more like molecular markers for that. So once we have these molecular markers in hand, it speeds up our breeding process. So rather than, you know, okay, we’ve got this Skittle Mintz, and we’ve got this lemon merengue that we want to cross.

[00:08:43] And this lemon merengue super susceptible to powdery mildew, but the Skittle Mintz is not, we can make the cross instead of, you know, going through the whole timeline of phenotyping, all those progeny. You then just have a quick genetic test at the time. They, they sprout their first leaves to identify what is [00:09:00] going to be powdery, mildew resistant.

[00:09:01] So we’ve done that with a few traits, a few different traits.

[00:09:03] Kellan Finney: [00:09:03] That’s awesome.

[00:09:05] Bryan Fields: [00:09:05] Yeah. How long, how long does that take? I know that’s ballpark and then that’s a pretty specific request, but just ballparking.

[00:09:12] Jordan Zager: [00:09:12] Yeah. So it’s, it’s really a matter of if you know the plants you’re working with. We’re talking about a 13, 14 week timeline.

[00:09:21]And if you don’t, well, then you got to start collecting data. So that that’s sort of where we come in with the cultivators. And, and just like, you know, provide them the scientific assistance to get what they want, right? Because most operators in the space right now, they know of what’s in their genetic library. What does well, for certain things, whether it’s terpene accumulation, whether it’s, you know, purple flowers or what have you, or, you know, resistance to different. You know, antibiotic factors or biotic factors ,  such as like, you know, right now doing we’re, we’re trying to tackle a fit resistance and at least develop some markers, race resistance. And so of all the different varieties [00:10:00] that are recreational grow ,  is growing. We do know some are incredibly susceptible and we know that some, I don’t want to say that they’re fully resistant, but they almost never, almost never gonna find aphid on them.

[00:10:12] So that’s, that’s sort of the next trait that we’re, we’re trying to capture. And so with this, because, because we haven’t really categorized our plants for this specific trait, the trait of aphid resistance, it takes a little bit of time there. So maybe, you know, maybe three or four flower cycles. So that is sort of a long timeline. If there’s there’s five flower cycles in a year ,  but a year to 18 months, I think is a good timeline.

[00:10:34] Bryan Fields: [00:10:34] And what exactly is that? What are aphids?

[00:10:37] Jordan Zager: [00:10:37] Yeah, aphids or ,  a, an insect pest. One of the bigger problems in the cannabis industry are aphids. You know, most, most folks control it by just having a really clean grow environment. But even then, like they can, if it’s consultant liberate. So what they do is they latch onto the plant and then they suck the sap, sort of the moving sugar water through the plant. And so it just leads to lower [00:11:00] lower production  from a plant standpoint, overall yields, cannabinoid, content, terpene content.

[00:11:05]Kellan Finney: [00:11:05] Change gears a little bit. You mentioned tissue culturing. Could you kind of provide a simple definition for listeners of what tissue culturing is. [What’s the] why is that different from traditional breeding methods where you’re just kind of crossing two plants and letting them grow and kind of doing the Punnett square? What was the guy with the beans?

[00:11:28] Jordan Zager: [00:11:28] Gregor, Mendel, green wrinkled and yellow, yellow round. Exactly.

[00:11:38] We seem to be so proud to him.

[00:11:41] Oh man. So actually tissue culture is not something that we use in our breeding.

[00:11:47] Kellan Finney: [00:11:47] It seems? 

[00:11:48] Jordan Zager: [00:11:48] You know, at the very basic level, we do go back to punnet squares. That’s what we refer to as Mundelien genetics. So like when we’re capturing all this big data, you know, genetic sequencing data, you can start to see traits segregate and [00:12:00] what we call it, mundelien fashion where it’s like one to two to one. Which is exactly the point of doing those Punnett squares. So, but, but to, to get to your question on tissue culture, tissue culture is a way for clonal replication, meaning right in the cannabis industry, people are always taking clones of their plants and, you know, cutting, you give it some rooting hormones, put it in some rock wall, or maybe some soil you get roots.

[00:12:22] Tissue culture is just a different way of doing that. And it’s done on a much smaller scale from a plant perspective, right? For a clone, for a healthy clown, or you wanna take like a six inch cutting for, I don’t even know the number, but for micropropagation or tissue culture based cloning, you know, you’re taking something that’s a few millimeter.

[00:12:43] Millimeters in length. And so it’s this the same thing you’re giving a cutting of the plant nutrients that it cannot get without roots and you’re tricking it to grow roots is, is the goal. So that’s tissue culture in the cannabis industry. There’s some companies that do their cloning methods that way, rather than the traditional cup cloning.

[00:12:59] And it [00:13:00] gives, it provides the benefit of young clone is grown in a completely sterile environment, which there’s evidence out there that you can remove some, you know, old accumulated systemic diseases or something from a tissue by using tissue culture. We’ve never done that. And I don’t want to make the claim that we can do that.

[00:13:19] Cause I have no idea on the legitimacy of those claims, but that’s tissue culture as it relates to cannabis in the short.

[00:13:25] Kellan Finney: [00:13:25] Appreciate that.

[00:13:26] Bryan Fields: [00:13:26] Yeah, I’ve got another site for you can really play a major role or can it play a helping role in the future with the personalized medicine by understanding exactly how. What the whole process works is that somewhere you see Dewey playing a role in the future?

[00:13:41] Jordan Zager: [00:13:41] Well as for personalized medicine, you know, I, I think that. You know, th the, the combination of all of the phytocannabinoids and the turpines within the plant are consistent, you know? Right. If you have, and this ties into it’s, it’s the entourage effect, right? If someone is using cannabis for medical [00:14:00] purposes ,  they want to get that same mixture every time. Just, just like you do with like aspirin.

[00:14:04] It’s always going to be the same ingredients, time and time again. So for, for folks going after a more natural means of pain relief or whatever reason you want to know, you want to find out what works for you. And then you want to make sure that those chemical constituents are always there. So where we can come in is, you know, we will know that in a given environment, this strain will always produce this chemical profile. And so the right there is there’s multiple factors there, it’s the environment, it’s the genetics, and it’s what the end-user’s getting, which basically comes down to the processing of the flower or the extract, whatever it may be. So from a genetic standpoint, it’s making sure that the plants that are being sent to the growers of, you know, medical cannabis growers, or even, even the patient themselves [that] the genetics that they’re receiving, or at least capable of providing the chemo type that, that [00:15:00] treats their ailments. There are variables in it that are out of the genetics control. But for the most part, if the, if the genetic makeup is there, the ,  the chemical profile will be there to help.

[00:15:10] Bryan Fields: [00:15:10] The environment, it’s gotta be such a complex variable to account for, and especially given all of the restrictions now with large MSO is kind of growing across different States. I mean, That’s how it worked, Jordan. I mean, you got major companies across state lines, all trying to grow roughly the same style products that when you go dispensary materially in California versus New Jersey, you can kind of feel familiar with the products, but there’s gotta be a ton of different variability. So how does that work?

[00:15:36] Jordan Zager: [00:15:36] Yeah. So from a genetic and biochemical perspective, like the, the major pathways that are producing medicinally relevant, or even bioactive components, right. We’re talking about the cannabinoids, we’re talking about the terpenoids and we’re talking about the flavonoids. All of these pathways are heavily influenced,at the genetic level in terms of genetic expression, which is really the driver, right? So if you think of back to the something you learn in, in [00:16:00] biology with ,  with Gregor Mendel is the central dogma of biology, which is  genes are at the first level. They get transcribed into RNA, which is the gene expression. And that gets translated into proteins and the proteins are like the chemical reactant reaction factories. So all of these pathways, cannabinoids, flavonoids terpenoids are incredibly sensitive to environmental interactions. And so in a genetic space, we call this gene by by environment interactions G by E. And so that is something that. Is I think the next big hurdle to clear in the cannabis space, you know, folks are getting really good with their genetics. The next hurdle, I think, to clear in producing that consistent product from state to state to state is ensuring that the environment is the same. So that the, these, these metabolic pathways that produce these biometric compounds are operating the same.

[00:16:54] Now from a recreational standpoint, you know, maybe the chemical. The, the chemo type isn’t as [00:17:00] important for the consumer. Maybe somebody just wants like super frosty buds or, you know, they only want purples. Those are two traits, you know, that ,  are absolutely controlled by the genetic makeup. But you know, if we’re talking about purple, you know, you could, you could have a purple plant when it flowers at 72 degrees. It’s purple. And when you flower it, 82 degrees, it’s mostly green. So that that’s an example of a G by E trait is, is plant color.

[00:17:26] And then, you know, something else like Tricom preservation, that’s, that’s like another big thing in the processing space right now. Making sure your, that your tricombs don’t wither because you want to have big frosty nugs for the recreational consumer that also, you know, might lead to a more potent flower, but also you’re retaining the turpines better. So it doesn’t matter how good genetics are. If these other steps aren’t taken care.

[00:17:49] Kellan Finney: [00:17:49] Is there a way that you could potentially implement like genetics testing throughout the life cycle of a plant, as like a quality control mechanism?

[00:17:58] Jordan Zager: [00:17:58] Yeah, it’s a technique. That’s a little [00:18:00] pricey at the moment, but it’s referred to as RNA seq. So RNA sequencing and what that does is it gives you an idea of. How the genes are being expressed. And so that’s actually a service that we do offer at Dewey with other folks is, we’ll look at your plants at different times. And so we can see when terpene genes are, are at their highest. And then, you know, we can modify that the grow environment to try to then, okay, how can we maximize expression of these genes? And that’s something we offer and, and, and have done at Dewey.

[00:18:31] Kellan Finney: [00:18:31] So say like I have a, my HVAC goes down one night, right. And I come in the next day and it is a completely different environment. I didn’t call you up. You come in, we are, we’re able to determine kind of what’s going on from a genetics perspective. Is that something that you could then coach us through on like how to correct the environment to try to get that RNA sequence back to where, where it should be, or is that kind of like a while you just accept it and move on kind of a situation.

[00:18:55] Jordan Zager: [00:18:55] Yeah, the, the results aren’t going to be immediate, right? If your HVAC goes down, [00:19:00] you got to get your HVAC back up and running or your house, right? But you know, let’s say right, you’re, you’re a company in California, and you’re growing indoors and you got a license for a New Jersey and you want to make sure your products are the same. Well, first off your genetics need to be the same.

[00:19:19]But yeah, so, so let’s say you start growing in New Jersey, your plant, you know, the, the chemical profiles is not there. This, this strain that just smelled so good in California, just doesn’t quite smell as good in New Jersey. We could answer that question with RNAC it’s w w we look at the, the gene expression profile from the same plant grown in what you think are identical conditions, and then diagnose what’s wrong using that gene expression ,  fingerprint.

[00:19:44] Bryan Fields: [00:19:44] Sounds like you’re the Ghostbusters to me.

[00:19:47] Jordan Zager: [00:19:47] Yeah. That’s the thing, a project like that, you know, that that’s not an immediate timeline. That would probably be a, a year to two year project.

[00:19:54] Bryan Fields: [00:19:54] We’re going to cut that part out from the two year timelines that people just here, these guys can come in, he can solve problems immediately.

[00:20:04] [00:20:00] Jordan Zager: [00:20:04] Yeah. Let’s raise expectations, please.

[00:20:06] Bryan Fields: [00:20:06] Kellan, did you have a question you wanted to ask?

[00:20:09] Kellan Finney: [00:20:09] I was just gonna ,  I thought you brought up a good point because I have consumed say like a N O G in Colorado, and then you go to California and say, I’m in Southern California and I purchased another OJI. Completely different versus even up in Northern California, there’s another hoagie. And it’s like, they’re three completely different plants, but they could have all started. Do you think they all start with the same genetics, but based on the environment that’s going to change it or is it we’re just at the point where people don’t really know what genetics are really starting with yet? Like, could you kind of walk me through why that is the reason from a genetics perspective?

[00:20:43] Jordan Zager: [00:20:43] Yeah, I think the first reason is that it’s probably not the same genetics. I think it’s really unlikely that clone from one source is going to be found all over the place. I mean, that’s, that’s what the cannabis industry has is, you know, it’s right with copycats, which is fine.

[00:20:54] But when it comes to understanding that from genetics, you know, there are tests out there that [00:21:00] you said that question, you know, medicinal genomics has a great product. For determining the lineage of something. So the first step would be okay, are the three OGs in these different locations? Actually the same genetically if no. Well, there’s your problem. If yes, then absolutely. Gene by environment is, is most likely driving that change.

[00:21:16] Kellan Finney: [00:21:16] Appreciate that.

[00:21:18] Bryan Fields: [00:21:18] Yes. My next question would be what percentage of the industry is using kind of techniques similar to the ones do we provide and is it based on the sheer size, that’s the determining factor, whether they move forward or not?

[00:21:32] Jordan Zager: [00:21:32] What do you mean by size, the sheer size?

[00:21:34] Bryan Fields: [00:21:34] So the size of the company, right? So we’ve got like boutique style growth who, who might be more geared or using it. And you’ve got like kind of larger ones where I’m curious to know, like, from your standpoint, what percentage of the, of the industry at this moment, both hemp and cannabis is using and doing scientific work, similar style analysis.

[00:21:52] Jordan Zager: [00:21:52] Oh man. Very pro probably 1% or less. Really the, the companies that are doing this are in the hemp space, the breeders, like the [00:22:00] really good breeding companies and in the correct space. Yeah. There’s a few folks that are doing, doing stuff. I think mostly in the rec. space, the companies that are doing this are in Canada and we’re talking right.

[00:22:09] Th the, the giants up there and because, you know, for the size of the company, That’s that’s really, our, our tools are, are more built for companies that are trying to get the same consistency in their products from different locations. So right, like a small farmer in Washington that is craft premium flower probably won’t have much benefit from working with us, but the, the, you know, folks that are trying to replicate their product, provide consistency to their brand.

[00:22:35] Those are the folks, sorry, their brand in multiple locations are the folks that would benefit most from what we offer.

[00:22:43] Bryan Fields: [00:22:43] It seems like a no brainer for the large Ms. Especially the ones that are like opening up shop in, in new locations, as fast as humanly possible. You need to have some sort of consistency, especially at people want that. So it seems like a no brainer for them.

[00:22:56] Jordan Zager: [00:22:56] Yeah, I think to some degree it ties so much into consumer [00:23:00] expectations of the brand. And because like some States don’t have vertical integration where the retailer is actually growing. It. It’s something that’s, that’s sort of hard to control, but for yeah, multi-state operator that is plant touching only, it makes no sense because, right, they want their brands to be the same, no matter where it is. Like Coca-Cola, Coca-Cola at my Chevron down the street is the same as the Coca-Cola where you are. And so for these multi-state operators, Hey, you’re got to have these quality control pieces in place. And genetics is a huge component of that.

[00:23:30] Kellan Finney: [00:23:30] Is this a technology that’s kind of unique to the cannabis industry or is there, is this used in other big ag?

[00:23:37] Jordan Zager: [00:23:37] Yeah, it’s, it’s definitely use another big ag. You know, I think a really good model is the Berry industry, the largest Berry provider in the US at least is Driscoll’s. I’m sure you guys have Driscoll’s in New York and Colorado, their entire business model is built on their R and D program at the genetic level. So that’s their first step of, of quality assurance is they have kick-ass [00:24:00] genetics. The next is may select their partner farms and [they’re there] they set pretty tight rules on what the farms can do and how they grow their berries and that everything from the pesticide treatment to the fertilizers that are ground prior to that, that comes down to the G by E gene by environment interaction. And then beyond that, they have, you know, very strict and standardized ,  processing procedures, right? Like everything, that’s A quality, it goes into their Driscoll’s brand. Everything that’s B quality goes into their other brand. Anything below that gets sold to somebody else or they turn it into a puree. So that’s an example of a different industry using the same tools that we’re talking about here at Dewey.

[00:24:40] Bryan Fields: [00:24:40] What’s the future roadmap or do we look like future roadmap?

[00:24:43] Jordan Zager: [00:24:43] Right now? We are ,  building our consumer brands. We are breeding breeding, breeding, breeding, always breeding and you know, we’re, we’re almost to the point where we’re going to start licensing our varieties to folks in Washington and [right?] these are varieties that are [00:25:00] resistant to a myriad of, of pests confirmed genetically. And then, you know, that are that complete with ,  with some of the popular varieties out there from a cannabinoid and terpene perspective.

[00:25:13] Bryan Fields: [00:25:13] Your biggest misconception is you started working in the cannabinoid space.

[00:25:18] Jordan Zager: [00:25:18] So from, from the time that I, I started working with cannabis to now, what was my biggest misconception? Oh, geez. I thought that we would have a larger barrier to entry ,  than we did. Right. I, I got Dewey was founded three years ago. I think at the time there was like, Eight States that have legalized it recreationally, not many. And now it’s now we’re in the twenties close to the twenties. So I think that that was this misconception. I was like, Oh man, no, one’s gonna be able to do this anywhere else, except for a handful of places. Now it’s like, Oh shit, it’s everywhere. But, but before, you know, starting Dewey, I I’ve worked in like medical collectives in California. I’ve been smoking weed a long time. So I shouldn’t say there was any major [00:26:00] misconception. I started knew what I was getting into. Also, I think the, the passing of the 2018 farm bill legalizing hemp threw me for a loop. I was like hemp, who cares? Like who’s going to be using CBD. You’re not getting high from hemp. So that threw us for a loop. And like, you know, made us question if we should do anything. And he’s sort of pivoting and ,  we, we did, you know, of course we started working with some hemp folks, but yeah, I would just say the growth of both sectors have been in adult use cannabis. I didn’t think it was going to be this fast.

[00:26:31] Bryan Fields: [00:26:31] Yeah. The industry moves just incredibly fast and it’s, it’s funny, right. As we go on this journey where the States announced, you know, they’re, they’re coming online, there’s huge progress, but at the same time, it’s like incremental and we’re still, we’re still in the first inning, which is like the craziest part. We’re literally just beginning.

[00:26:49] Jordan Zager: [00:26:49] Yeah, exactly, exactly. It. I don’t remember who said it, but they, you know, a week in the cannabis industry is like a year in anything else and split at the same time. Right? Like we, we don’t have [00:27:00] our act together on a federal level. Like we can’t even, you know, neighboring States can’t trade product. It’s we, we do still have a long ways to go despite the speed of the last few years.

[00:27:10] Bryan Fields: [00:27:10] We’re still trying to figure it out banking, which by the time this podcast is released, we’ll have it figured out is my whole foods.

[00:27:16] Jordan Zager: [00:27:16] Oh man. I really hope so. Oh man. That’s that’s

[00:27:22] Bryan Fields: [00:27:22] and then this podcast out until it goes down, no, it’ll happen we’re going to get it done. I mean, you can see they’re close, but it’s crazy, right? Like we ask people all the time that are outside industry that want to get in and are just perplexed by the type of obstacles that are kind of like self-imposed on an industry that is still fighting and thriving at the same time. And I think that’s the most impressive part is that some of these companies, including yourself, are doing really challenging next level things. And working with partners that are, rolling for all these additional obstacles.

[00:27:53] Jordan Zager: [00:27:53] Yeah. It’s, you know, you mentioned banking as a big obstacle. The other one is the tax situation. Like we have [00:28:00] to yeah, two yeah,. I don’t know if you guys have discussed this on your show, but this tax code that says the only thing that a, you know, provider of, of. In our narcotic, which of course cannabis is still labeled as, as such. The only things you can deduct, right? You can break the law by trafficking narcotics, but you better not write off your accounting expenses. Like the only thing you can write off are the costs of the goods sold. So like for a producer, like a cannabis grower, it’s like the soil, the lights, the pots, the fertilizer, and the people that grew it, but like their salaries. So like, that’s, that’s something that when I talk to folks outside of the cannabis industry and they learn about that, but like, are you, are you kidding me? And it’s just something that’s ludicrous. And it goes hand in hand with banking, like the financial perspective of how the cannabis operates right now. It’s, it’s amazing that there are companies, like you said, Brian, that are thriving the way there are some of these MSOE and all the hoops, they have to jump through. Like I do, we, we have to deal with one governing board [00:29:00] of the Washington state. Cannabis and liquor board. And like, I can’t imagine what, like, clearly it has to deal with like dealing with one entity. One, one government regulator is enough. So prop props to them.

[00:29:14] Bryan Fields: [00:29:14] I think that’s what they have a team of lawyers. So my team, like an entire baseball team full of lawyers, because it’s gotta be nearly impossible in the acuity. I don’t want to dive into that because that’s a whole nother topic on its own. But when that gets removed, these operators will just have a hold on, more profit. And people are like, Whoa, these guys made a huge amount of money this year compared to last year, like what did they do different? And it’s like, it’s not the government stop screwing them over.

[00:29:39] Jordan Zager: [00:29:39] Yeah, that’s a, that’s a, that’s a good investing tip, Brian.

[00:29:42] Bryan Fields: [00:29:42] I got to have a disclaimer at the end of this podcast. Now we’re not professional investors. You’re not take our advice, but yeah, absolutely. Before we wrap, we’re going to do two questions. We ask all of our guests. You could tell us your experience in the cannabinoid space into one main takeaway or lesson [00:30:00] learned to pass down to the next generation. What would that be?

[00:30:04]Jordan Zager: [00:30:04] Keep your end goal in sight. You don’t know what’s gonna get in your way of getting there, but as long as you have your eyes on what you want to get in the cannabis world ,  I think you can achieve it.

[00:30:13] Bryan Fields: [00:30:13] The last time you consumed any cannabinoids.

[00:30:16] Jordan Zager: [00:30:16] Oh, Jew. Before this podcast, I took my dog on a walk and then smoked a joint with him.

[00:30:21] Kellan Finney: [00:30:21] Love it.

[00:30:25] Jordan Zager: [00:30:25] I was going to ask you guys, if you ,  if you guys want to do to have a little tote stash before we started this, I’ll get on the same level, but we just got it.

[00:30:32] Bryan Fields: [00:30:32] We’ll have to save that for the patriotic members for the video subscription.

[00:30:36] Jordan Zager: [00:30:36] There we go.

[00:30:37] Bryan Fields: [00:30:37] But yeah, we should definitely get together as now off to a virtual one, but pursuing in person.

[00:30:43] So prediction time, will the future be genetically engineered cannabis? If so, what does that look like from a timeframe perspective? If not. Why not.

[00:30:55] Jordan Zager: [00:30:55] That is a great question. I don’t know if it’s tough [00:31:00] because like cannabis is an industry that has its own subculture that has thrived within America, right? And it’s, it’s often associated with, with, you know, preserving nature, right. It stems from, from the hippie movement, the free love movement. And so. For those types of consumers, GMOs are, they’re never going to consume GMO cannabis. So I think any, any company that is producing GMO cannabis is alienating sort of the, the, the base of cannabis users.

[00:31:28] Now that’s not to say it’s not being used today by certain people. I just don’t. I think that it’s GMO cannabis will ever really hit shelves just because of the makeup of consumers. Now, using it in breeding programs, as a tool to learn is probably the way that it’s going to be used. And it’s already being used by, by a few companies. And then, you know, that’s in the, you know, the plant aspect of cannabinoids. The other side is there are a bunch of companies right now that are either currently producing [00:32:00] or on the verge of commercially producing, engineered yeast grown cannabinoids, where they have genetically engineered yeast to have the entire cannabinoid pathway, including the precursors.

[00:32:10] So they’re feeding these East sugar and they’re in turn producing cannabinoids. And that that’s that’s. I think going to be a very useful tool as it relates to cannabinoids as a medicine and is going to be key for, for production of what, you know, call it the rare cannabinoids or even, you know, cannabinoids that don’t really exist in nature, but might have clinical relevance for ,  a certain disease or ailment

[00:32:35] Bryan Fields: [00:32:35] Kellan, thoughts?

[00:32:37] Kellan Finney: [00:32:37] Genetic gene ,  metabolic engineering is really close to my heart. It’s what I studied for a long time. And so, I agree with everything that Jordan said. I don’t think that, I mean, GMOs aren’t even allowed in Europe right now. Like there’s no way this, the plot, the demographic of canvas users that are going to entertain the thought of consuming a genetically modified cannabis plant.

[00:32:57] So, but as far as the genetically [00:33:00] modified organisms go like yeast, and E Coli, I, I do think that that is just going to continue to gain traction. And, but I do think at the end of the day, it’s only going to be for pharma. Because it goes back to the thing. If you aren’t producing say a THC molecule from E Coli and you’re using it to make a bait pen, that bait pen is going to have to say it’s from a genetically modified organism and they’re not, no one’s going to buy it at that point.

[00:33:25] So I think it’s going to be strictly regulated to kind of the pharmaceutical land. Brian, what do you think? What are your thoughts here? Would you consume some genetically modified cannabis?

[00:33:35] Bryan Fields: [00:33:35] If Jordan was bonded. Absolutely. Yeah. But then as a day, I mean, I crossed Jordan blindly.

[00:33:41] So the average consumer is not going to beat like just too many things going on guys.

[00:33:47] Like they’re not going to evaluate a product. At least I don’t think they will. I don’t think they’re going to pick up a product read the back. Like I don’t do that in it now when I buy products. So like, I can’t imagine. When you go to dispensary, buy these products. I don’t think that people are going to [00:34:00] be as informative in that.

[00:34:02] And I think you’ll have your slice of, of individuals who are really well-read and understand exactly what they want to consume like you do in other industries. And I think for the most part, it’s all about money, right? At the end of the day, what makes the most sense? What’s the cheapest way to mass produce the thing from a lean standpoint to get past regulations and then go from there.

[00:34:18] So I’m thinking the other side.

[00:34:20] Kellan Finney: [00:34:20] Well I like that. .

[00:34:22] Jordan Zager: [00:34:22] Well-stated for sure, for sure.

[00:34:24] Bryan Fields: [00:34:24] Jordan, before we wrap up, where can our listeners get in touch with you? If they want to learn more,

[00:34:28] Jordan Zager: [00:34:28] If you want to learn, check it out. deweyscientific.com. If you’re interested in our recreational cannabis brand, check us out on Instagram, [we’re] @Deweycannabis.

[00:34:35]And then of course, deweycannabis.com for our recreational features.

[00:34:40] Bryan Fields: [00:34:40] We’ll tag them all in the show notes so people can find you guys. Thanks Jordan, so much for your time and thank you everyone for listening.

[00:34:46] Jordan Zager: [00:34:46] All right. Thanks, Brian. Thanks, Kellan. Had a blast. [00:35:00]

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