Cannabis Capital Podcast

Transcript

Ross O'Brien    00:16

Hi, everybody, and welcome back to another episode of Cannabis Capital the podcast. I'm your host, Ross O'Brien, founder of venture capital firm Bonaventure Equity, lifelong entrepreneur, author of Cannabis Capital, the book. There will be plenty of Easter eggs of shameless plugs of the book, as always. And as you know, in this podcast, we like to go beyond the headlines. So I am thrilled to have round two with a good friend and I think one of the leading thinkers in the space and journalists in the space, Jeremy Burke. So we're welcoming him back to Cannabis Capital podcast today. Jeremy, good to see you again.

Jeremy Berke  00:53

Yeah, thanks for having me back, Ross. That intro made me seem probably more dignified than I am, but I'm happy to get into it with you. So let's do it.

Ross O'Brien    01:01

It's our story. We get to tell it like we want it, right?

Jeremy Berke  01:03

That's right. Yeah. Winners write history or something like that.

Ross O'Brien    01:09

Well, speaking of writing history, going beyond the headlines, let's jump right in because you're out there in the forefront of some exciting new projects. So, first of all, tell everybody where they can find you, and let's talk about your new newsletter, cultivated for sure.

Jeremy Berke  01:25

So last time I went on this podcast, I was the senior cannabis reporter at Business Insider. I've since left Business Insider to launch my own venture. It's called cultivated news. So you can find it WW dot Cultivated News or follow me on Twitter. I post a link to it at jfbirk. The genesis of the newsletter is really to take the reporting that I was doing at Business Insider, but build a B to B ish and I'll explain why ish a little bit in, a little bit more detail. But to build a newsletter for professionals in the cannabis industry, it breaks down everything you need to know from headlines on Capitol Hill international news to what's really going on inside cannabis companies, how they're making decisions, how they're looking at the market, and how investors like Ross are looking at the market and what they're looking for. So it's both a little bit adversarial, it's hardcore reporting, but it's also educational, and I hope it's a fun read, too. So if you work in cannabis, if you're interested in cannabis, I'd encourage you to subscribe it's free. It's weekly right now. It will be twice weekly soon, and once I get all my ducks in a row, it'll actually be a daily newsletter. So working towards that as a reader.

Ross O'Brien    02:37

From addition one, it's great. I love getting it in my inbox. And what's really interesting about it is that it seems to be a natural progression from a lot of the conversations that we have offline together and checking in on the market and the things that we're looking at doing together. I love what you said about Capitol Hill. So maybe this is the cannabis Capitol Hill episode or at least starting there. Look, so I would love to touch on policy, but maybe we should just go backwards. I read your cultivated newsletter today, and it really struck a chord, as it always does, introducing some of the what did we say? Cannabis emptor, buyer beware, sort of problems with the cannabis space. Let's talk a little bit about what you're covering today and some of your perspectives, because I think that's a great entrance point.

Jeremy Berke  03:22

Yeah, sure. I can go a couple of ways. The newsletter, the way I think about it is it's a little bit about what's interesting to me right when I'm writing it, and hopefully that's interesting to the people that are reading me. Journalists is only as good as its sources. So it's sort of a reflection of, like Ralph said, all these ongoing conversations I've had. So I can start anywhere. I mean, I think one interesting piece just by dent of me living in New York City, loving New York City, I'm very interested in what's going on with the cannabis story there, and I think there's been a lot of reporting around what the regulators are doing incorrectly. I think that's been a lot of the focus. And while they have a lot of room to improve, I try not to throw stones. Like, I'm not a regulator. I could be critical of them as a reporter should be, but I could not pretend to do a better job than they can. So the angle I took on that was, okay. Instead of just throwing more shots at these regulators, why don't we take a look at what consumers think about the industry? Right. There hasn't been a lot of data around that. There hasn't been a lot of studies showing where consumers are buying their cannabis, what they think about it, or why they're choosing to buy at these places. And just to kind of back up and set the stage there. New York City or New York State has legalized cannabis for over two years now, but there's about I think the last count was seven or eight dispensaries legal dispensaries open in the state. So go figure where all the product is coming from. It's from illicit dispensaries. These are basically just bodegas or convenience stores that open up. And now, because there's no penalties, they can sell cannabis. Right. And so I worked with a company called NUG MD. They're like a tel health platform for cannabis medical cannabis patients.

Ross O'Brien    05:08

And they what is their name again? NUG MD.

Jeremy Berke  05:11

N-U-G-G-M-D. Do you think some of these.

Ross O'Brien    05:15

Quirky naming mechanisms are going to be some of the undoing of the real potential there? I mean, it seems weird to me to commingle NUGS with telehealth. Right. I'm like, it'd probably be the last place I would go.

Jeremy Berke  05:28

My professional answer would be I should not opine on that. My personal answer would be yes. And I make that distinction because cleverness, and I get the wanting to be a little tongue in cheek and using puns, for sure. It's not the way I would do things personally.

Ross O'Brien    05:46

Look, we used to say on this podcast we would talk about blunt truths, right? Yes, I get the plant words. But at a certain point, telehealth is a serious, real business that is an incumbent healthcare service offering that is going to be disrupted by the symptom of cannabis being legalized. That is true. Is it symptomatic of the key sort of players in the place that are players in the space that some of this might get in the way? I think if I was advising them, I'll give you my personal opinion on my professional opinion. Like, I would do a name change on that company because I don't think institutional investors or the healthcare institutions that will need to get on board with this will take them seriously.

Jeremy Berke  06:32

Totally. And look, I agree with you. Your perspective is definitely a good one and it's an educated one. You're an investor yourself. There's the aspect of it undermining and to NUG MD's perspective, like the seriousness of the work they're doing, I think the data they gave me is really good and it's rigorous.

Ross O'Brien    06:47

Yeah. I actually don't know them and I'd like to connect with them.

Jeremy Berke  06:49

Yeah, no, I mean, it's a good piece of feedback for them if they're looking for a little more money. But regardless, I don't want to go off too much of a tangent here, but I will say this. You can see it play out with my expertise and media coverage of the industry. Right. Every headline has to have some sort of stupid pun, and it's like 2023. And for some reason, old editors at Stodgy Newspapers, it hasn't gotten old for them to keep throwing those puns in there. And I think it does a disservice to the seriousness of the coverage. Right. The importance of the issues that we reporters are working on. I think it's silly. I would like to move past it, but not every article you see about Anheuser Bush says, are you getting buzed off beers? Or something like that. It's like, it's the beer industry. It's a serious industry. Anyway, that's my little tan.

Ross O'Brien    07:39

It's interesting.

Jeremy Berke  07:40

Yeah. But I think it's a huge problem, and we can get into that further.

Ross O'Brien    07:43

Episode three.

Jeremy Berke  07:44

Yeah, exactly. But going back to the survey, basically, I wanted to really understand who is buying from legal dispensaries and who's buying from illicit dispensaries, and are there consequences of these actions? Right. And I think those consequences are hard to determine. But the truth of the matter is that, like I said, there's only a handful of legal shops and the illicit ones, there's no oversight. There's no jurisdiction for any regulatory agency to say, like, hey, you have to sell to people over 21. These products have to be tested according to the state guidelines that we've set out that are evidence based and science backed and so oftentimes people are just buying at these stores. And not only that is maybe I don't know if my readers did, but I thought was sort of a shocking number of people trusted the products that they were buying at these illicit dispensaries. Upwards of 42%, I think, or excuse me, 44% said that they think the products are accurately labeled in terms of THC content at illicit dispensaries, or at least enough that they are concerned about that. Over 40% said that they trust the products are tested for contaminants, at least enough that they're not concerned about that. And the truth of the matter is that's not happening at illicit cannabis shops. And if it is happening, it's because the products have been transported illegally from states that do have the capacity to do it, like, let's say Colorado or California. So I think my message to regulators here is that there's a clear public health risk. Ultimately, it's probably a matter of time before people get sick from tainted products, whether it's heavy metals or pesticides. And the longer you don't have legal stores open, the more risk you're injecting into the market. Over time, it will catch up. God forbid people haven't gotten sick yet. But in early 2020, late 2019, the Avalli with the lung issues, with vapes, that was a concern and that was straight from the illicit market. And it's four years later, and it seems like we haven't really learned from that yet. And at the end of the day, the other data just quickly that stood out to me was that 72% of survey respondents said that price and convenience were the ultimate factors in deciding where they're going to buy their cannabis. They're pretty agnostic to whether it's a legal store or an illegal store. They might rather buy legally, but if it's too expensive and too far of the way, they're not going to that's a risk. Like cannabis legalization was supposed to solve these health risks. Clearly, it's failing right now in New York, and so it's something I'm paying very close attention to.

Ross O'Brien    10:16

I think it's one of the most important issues. And candidly, we think everybody's, most people are asleep at the wheel when it comes to the regulatory headwinds that are in front of us. So to step back for a minute and come full circle to this public health risk, which I think is very real in this illicit market, we've got a quality issue, and that exists also in the legal market, too. Everybody knows of testing labs out there that will just give you the results that you want, right? And so we're building these systems, but this is still in its infancy, right? These are still new emerging market. We're putting new business models together. I will go on record saying I think the Achilles heel to the entire recreational industry is vertical integration. And we can come back to that. But I think that is the centerpiece of where a lot of this stems from and the challenges are going to be potentially insurmountable. So it's not a space that we invest in. But I think it's very problematic when we look at the regulatory headwinds and this is where the Capitol Hill piece comes in that I think is really important. I would like to hear some of the things that you're tracking. Look, there's been a lot of tailwinds, right? And regulatory momentum and advocacy momentum has created the cannabis industry, right? I believe it's an economy, but the cannabis industry is applicable when you look at the recreational market, right? And let's be clear, like going in and buying prerolled at med men, that's not healthcare. So you can call them patients all you want, but that is not medicinal, right? It's a fallacy. So people are acquiring for intoxication. And all of this has come about because regulators were embracing easing regulations, right, so that we could bring cannabis into the legal market, which we should do, we have to do and we are doing. Right. But I think we've experienced a period of sort of like positive momentum where it's just kind of people just assume there's inevitability of like, yeah, we'll just get this change and get that change. You got a new law in the books now. We're starting to see a lot of pushback. I mean, Corey Booker himself said recently, cannabis is a dangerous drug and he is not wrong. Right, but that's the nuance with this where it's not the same as just putting chocolate bars or sugary drinks in gas stations, right?

Jeremy Berke  12:41

Look, I totally agree with you on the education standpoint there. Both regulators and lawmakers themselves often don't necessarily understand what they're regulating. I think cannabis is like one of the most clear examples of that you can look at in modern times, right. As you say, it's not a harmless product. Smoking is smoking. Adults are free to choose what they want to do. But there are effects on your lungs and there's more increasing research that there are carcinogens in marijuana or cannabis smoke. The jury is still out. I don't know, but there's some troubling research there, I think especially where there's really troubling research and I've written about this, a bunch is on developing brains and the risks of things like mental health, whether that's lower risk, like increase in anxiety, depression, or higher risk like those people who are genetically predisposed to schizophrenia. Smoking a lot of pot in your youth can maybe tip the balance where maybe it wouldn't have expressed itself in adulthood. But because of adding drugs to your system, it does. And while that's not a reason to clutch your pearls and say we shouldn't legalize this, it is information that is very useful for regulators. I'm of the opinion that regulation is good, maybe outing myself as a liberal here, but regulation is good and we should sort of bring potentially dangerous products under regulatory purview and I think that's the project of cannabis legalization. It's not saying this is harmless, let everyone do this free for all libertarian thing. It's saying, like, here's a product that we can do a lot better job at hitting sort of public health goals by regulating it, by bringing it to the light. Not only that, we can capture tax revenue and do all these other things and create industries and all these other knock on effects, but ultimately, it's like we're trying to make this safer for people who will choose to use it or not choose to use it, or sorry, will definitely choose to use it because it's legal. They're going to do it anyways. And that's the catch up aspect. And you can sort of unless you ask the question, but you can go into that further with the Safe Banking Act, which is sort of, I think, a little bit of a ham fisted way for regulators to wrap. Their heads around the industry with the cat being so far out of the bag and so far ahead of where legislation and regulation is right now.

Ross O'Brien    14:59

Look, I think clearly it's a net positive to have legal cannabis, but it's not a binary yes or no, right? And I think that's part of the issue. When Corey Booker said these are dangerous drugs and I said, I agree with him, it's not that there's a fatal dose, right? They're safe and well tolerated. It's things like what you said about what happens. There are certain things we don't know yet, right? And that research needs to be funded and understood. Like the same way that an adolescent brain reacts to alcohol, it'd be hard not to assume that there's going to be some effects on an adolescent brain. And should we have those safeguards? Is that the right way to have safe, well managed cannabis in our communities? Right? So we saw this in Oregon, and not to pick on Oregon, but generally in states like, okay, we've got dispensaries. And then it's like all of a sudden, then we ask the question, well, what do we do with people driving on this?

Jeremy Berke  15:58

Right?

Ross O'Brien    16:00

And there's no test for it. Do you have to use field sobriety? You can have THC in your system for an extended period of time and not be intoxicated. So it's not the same as alcohol. You can't regulate the same. Okay. If we are going to be responsible and build industries around this, there needs to be guardrails and regulations that spell out the landscape under which that we're going to operate. What's stunning to me was the statistic that you said earlier about how many people assume that they're safe and quality products are what they say they are in the illegal market. Because there's this assumption with CBD, right? When you go into a Walgreens and there's a CBD thing on CBD product, which is barely a nutraceutical, right on the shelf, people assume that there's been the rigor and research and quality control processes in place of everything else that's on those shelves. And it's not nobody has ever done any toxicity testing on cannabis or CBD in particular. Right. So those confluence of things, great. So let's not hide that in a corner. Let's put that knowledge on the table and understand how to build a regulatory environment around it because it will not be a zero regulatory environment. The question is do we want to collaborate for smart regulations or do we want to have to react to knee jerk reactions, which is typically what happens.

Jeremy Berke  17:25

It reminds me almost, and this is going to be kind of a twisted metaphor, so bear with me. But with CBD at Walgreens, it reminds me of Victorian England where you had home remedies for everything. You had cocaine and Coca Cola. Sure, there's a kernel of truth to some of these things, but there is no structured way to evaluate safety and efficacy. Right? And that is the situation we are in with cannabis right now in cities like New York. And I'll just give an example. I'm in business school right now and so I'm around a lot of otherwise smart people my age who go out and consume cannabis and drink and whatever and even they who don't aren't really paying attention to the industry, didn't know that where they were buying their cannabis was illegal. These are smart people who have access to this information and the fact that they don't know means that everyone probably doesn't know. And when you're in the cannabis industry, you think that these are inherent truths, but they're really not. And I think we have a duty to speak to that. Right? And so it's just an interesting question and I think that one other thing I'll say on that is that a lot of advocates do set up the binary you spoke to, right? They're like alcohol does all this bad stuff, cannabis doesn't, it's not lethal, there's medicinal benefits. So why is it illegal? I don't think that's the right question to ask. The right question to ask is how do you move use into safer patterns? Right? Because you can make the same argument on their side. Like you can take the sort of Alex Baronson Kevin Sabbitt approach where they sort of cherry pick studies that show negative effects. And again, I've written about this, I'll plug my newsletter again, but where they cherry pick studies and they show negative effects and they say this is a reason to put the cat back in the bag and say we're not going to legalize this because of all these effects. That's not really scientific to me. The right answer is to figure out how policy can balance both the harms and benefits of this. And that's a really hard problem and it demands a lot of time, attention and focus from lawmakers. Obviously, they're pulled in many different directions. Cannabis is far from top of mind on Capitol Hill, but it deserves that treatment, I believe, and I think especially the media has a role to play in pushing that.

Ross O'Brien    19:36

And so you've been writing recently on the Safe Banking Act, and you just mentioned a minute ago that seems to be the area where some of these conversations are happening. So what is the latest? What are you reporting on seeing and where is this going directionally? Because safe banking has been on the table for four years now.

Jeremy Berke  19:57

Yeah, I think I called it the 9th time the charm. It was the 9th time that the Safe Banking Act has been proposed in the House. The new piece here is that it received a full committee here or a full Senate Banking Committee hearing in the Senate. It had never received a markup in the Senate before. Sure, symbolically that means something, that senators are paying attention to this. But when you really hear the level of discourse around the nuances of legislation in the Senate, it does lead you to be less than optimistic about its chances of passing. Now, I don't want to put my foot in the ground and say it's not going to pass. I'd love to be wrong. It would certainly help my own career aspirations if it passed. So I do have a dog in this race. But at the same time, it's like when you listen to Republican lawmakers, a lot of them are just saying, like, cannabis is bad and harmful, so why are we going to allow them to bank? It's like a very kind of silly pedantic argument they're making. And then on the other side, you have progressives who I think rightfully so, don't want banking legislation to advance ahead of full scale legalization. But at the same time, if you're hearing these arguments from Republicans, it's like, maybe you should go after banking because nothing else is going to happen, right. They're so far behind the eight ball in terms of the legalization debate that I really don't see if you could get one, let alone ten Republican senators. You need to pass the filibuster into full scale legalization votes. I think a good example of that is Steve Danes from Montana. He's sponsored the Safe Banking Act numerous times, and he will continually go on record and say, I am against legalization. But here's why we need safe banking, right? And so it's like, I think it is incumbent upon Democrats and progressives to work under that framework rather than this pie in the sky, like, we're going to get full scale legalization passed and we're going to reform the criminal justice system using this. I don't see that happening. Now, the other nuance there is that there is talk of tying different pieces of legislation together to make both sides happy. One is adding the Hope Act, which would basically give states a fund to expunge cannabis related records and tying that to safe banking. That to me is a huge win win, both for progressive advocates as well as republicans, right. It's palatable to both sides. Even republicans don't want to see people unjustly imprisoned. Or maybe I'm projecting. I'd say most republicans don't want to see people unjustly imprisoned, and most progressives want to make it easier for minority owned cannabis businesses to actually have the nuts and bolts of being in business and growing their business. So that is my one sort of optimistic take there, that I'm hopeful that if hope is tied to safe banking, there is a possibility that we can get there. But the more that there's infighting on both sides, the less that becomes a possibility. The one other piece we saw recently, last week, there's a group, I think it was a minority cannabis association, I have to fact check myself on that. But they wanted to add language into safe banking that would allow more formal capital markets interaction with the cannabis industry, meaning uplifting or being able to list these stocks on the nasdaq near stock exchange, allow broker dealers and investment banks to come in and really do deal making in the industry. And obviously that's beneficial. It would free up a lot of liquidity. It would give a lot more businesses a lot more avenues to grow. But at the same time, that to me is a little bit unrealistic. Given both the limitations that republicans have on the bill as well as progressives who really are against the wall street boogeyman coming into the industry. You have to work under that kind of ideological divide and figure out the narrow path that this can get through. And the path gets narrower and narrower each time the bill gets debated. In my view.

Ross O'Brien    23:57

That's super interesting and fascinating. I mean, I was in DC for the very first vote on safe banking and working with some of the lobbyists. Some of the language in particular, the areas we were focusing on were things like uplifting and being able to have companies on us. Exchanges as opposed to going up to canada and all these things. If they're operating under the legal framework of us on a state by state basis, it's simple to sit here and say it, but that's a no brainer to me.

Jeremy Berke  24:26

Right.

Ross O'Brien    24:26

In the sense of, like, if a company is able to operate under illegally in any business in any state, then they should have access to the fullness of the financial system. Right. Morphine is a schedule two substance. You can't tell me that morphine companies a, it has a role in healthcare, can't float an IPO or bank in their state. Right. And the interesting thing when I was this had a moment where it felt like cannabis was one of the only bipartisan issues in DC. Especially in that time when we were back doing these first votes, I think we were looking to whip maybe six votes or something, six republican votes. So we got eleven, right, in a live debate on the floor that actually and everybody was over the middle, like, oh, this is really happening. Sort of both sides are like, hey, we got something here that feels like a win win. And here we are, how many turns later? And if the window is getting smaller and smaller for getting something done, and the path to thread, as you described it, is getting narrower and narrower, everybody loses, right? So at some point, we just need functional government to make some initial steps to pass this, right?

Jeremy Berke  25:40

There are other reporters who are better placed than me to speak to the nuances of who's a gay, who's a nay, and why. That may be, but two things are true, right? Safe banking as written. It was just up to the House. It would be law by now. The Senate is the obstacle. And I think when I talk to aides in these offices, these are always off the record chats. They just say, like, every single piece of social justice language you add to it, you lose a Republican vote. That's the calculus, right? When you're working under that framework, it's pretty impossible. I don't see how the math math there and how that would work. At the same time, personally speaking, when I put on my own view into the situation, it's such a common sense, no brainer piece of legislation. I totally agree with you. If states are able to legalize cannabis, why can't they list on the Nasdaq? This would help the industry so much. It's completely unfair to these companies, right? It's an unfair market that they're operating in. Not only that, I was just looking in, and I'm sure you're familiar with this. I was thinking about 280 E, which I'm sure listeners of this podcast know it, so I won't go into detail to describe it, but the genesis of that federal tax code is one cocaine dealer in Minnesota who's trying to deduct his business expenses. In 1974, he made 100 grand selling coke, meth, and weed in Minneapolis in 1974, got taken to court in 1982, basically was ordered by the IRS to file his taxes. He tried to deduct his cost of goods sold, and they said, no way. And Congress passed a rule the next year. 1982, right? So that's the world we're living under, where 50 years later, these very well established legal businesses are still operating under this bill that was really meant to slam one specific cocaine dealer in Minneapolis in the 70s. If that doesn't speak to this crazy world of cannabis that we're living in, I don't know what does. But that's it. And it's like the fact that we can't get that changed doesn't give me a ton of hope for getting really good, broad, full scale legalization passed. At the same time. I'm sure political scientists study this, but when public policy moves, or sorry, public opinion moves so far ahead of Congress on. An issue. I'm sure policy will follow eventually, but you need to do the groundwork to.

Ross O'Brien    28:00

Get there and that's you also run the risk of the pendulum swinging in the other direction as well. Like there's all this exuberance and enthusiasm. Then the recorrect is even more back to, oh, all of a sudden, now we're back to complete prohibition. Somewhere in the middle is where everything shakes out, right?

Jeremy Berke  28:17

Exactly.

Ross O'Brien    28:17

And clearly this pendulum is swinging in the other direction. And I would hope that the folks that are advocating for the issues that are important to them are able to see the forest through the trees. Right. And we need the foundational frameworks of some wins here. We can't have just all losses across the board on the regulatory side.

Jeremy Berke  28:35

Right, exactly. And look, if you are I mean, I don't invest in cannabis stocks just to maintain editorial independence, but at the same time, if every catalyst not a.

Ross O'Brien    28:47

Great place to invest. So you're fine.

Jeremy Berke  28:49

No, sure. But look, if I was an investor, it's like you do want you do need a win here, right. The whole sector needs it like the entire sector just trades basically on the whims of what a couple of Republican senators think. If St Baniac passes, it's going to go up. If it doesn't pass, it's going to continue to tumble. And that's a crazy situation to be in, not only if you're an investor, but if you're running a public cannabis company. That's hard to deal with. I don't envy that job right now.

Ross O'Brien    29:18

Yeah, it's challenging for sure. And look, people love to and you probably see this a lot when you're out there talking with folks in the space. And I would imagine you get a barrage on a regular basis of just like the bitch sessions, right, of like, hey, oh, this has been done and that's been done and oh, this is unfair, and big Wall Street, wall street, boogeyman and blah and all this stuff. Okay, look at the medical device space, right? How many medical device companies are started every year and how many of them fail? It's going to be maybe 10%, maybe less. I don't know. I'm making this up, but there's no way it's more that actually succeed. So why would we expect those ratios to be any different in any other industry, right? So starting companies is hard. Startups are hard. Emerging industries are hard, emerging sectors are hard. You don't get a free pass just because you love cannabis. And unfortunately, or fortunately, the cream rises to the top in any economic system. That's an open market, a free capitalist market like we're in. So the capitalist perspective has to play a role in this. Right? Otherwise, what do we have? State run cannabis dispensaries.

Jeremy Berke  30:33

Look, I'd say my own opinions are a little bit more pro capital, but many people I talk to I think would be just fine with that. And that's the dynamic. I think that when the two sides talk to each other, they just don't really get I think there's a lot of people who would just say, like there's a lot of people who, like capitalism, do not think it's effective, don't want to see it. And while sure, they want a little money in their pocket, everyone does. I think they would be just fine with a government run ration of cannabis. Now, I don't know if the product was shitty sorry for my language if the product was bad no, we can.

Ross O'Brien    31:11

Say whatever the fuck we want.

Jeremy Berke  31:12

I mean, if the product was shitty, like, look, that might change. But I think there's more people when I talk to investors, there's a lot more people that I think they think that would be just fine with a completely socialized cannabis system.

Ross O'Brien    31:27

Right. And then they'll be the first people that will say, oh, the government's putting, like, nanobots in my cannabis to track me.

Jeremy Berke  31:33

Sure. And I think the Ven diagram where does this go? Look, it's not my opinion, but the Ven diagram there, I think it's larger than I think people give credit to. And it's an important function of how advocacy works. I think, especially on the nonprofit side, there are people who would say that the desire to generate wealth for yourself that may take away from someone else is wrong. And that's the standpoint they're coming at this from. And that is why you get such vociferous opposition to safe banking. Now, personally, do I think that's right? No. Do I think that's a useful way to regulate in the economic and political and social system we have right now? No. I think it lacks nuance and I think it lacks an understanding of reality. It's quite idealistic. But at the same time, it's useful to understand that perspective when you hear this opposition in order to target more effective arguments against it.

Ross O'Brien    32:29

Look, when I started, I opened up my book. Oh, shameless plug.

Ross O'Brien    32:39

Shameless book plug. That's a new trick for the podcast. Jeremy first here, when I opened up the book, the first thing I did was acknowledged advocacy as creating this potential for an industry, right? Like, you have to start there, but it's a building block, and then you build upon that. Right. So it seemed, from my perspective, smart regulations is the building block from which that gives us the opportunity to advance. Right. It's always so weird to me when the word progressive has a negative connotation to it. Everything should be progressive. We should be progressing, not regressing. There's no certainty other than the status quo will change. Right. So when we think about the regulatory environment, the size of the market, and this distinct bifurcation now developing from our vantage point between real medical applications versus holistic. Right. It's a challenging the recreational market is challenging. I said they're shitty stocks or whatever, but investors are fatigued. There is no question I talking with one of my investors this week, and it's like to be doing some of these deals, but I've been getting beaten up, right. And I hate to say it, but what somebody said early on, somebody who I knew in the space, was like, listen, don't ever confuse a bull market with brains, right? And so I think we are still unwinding this bull market. So this irrational exuberance drove valuations into the stratosphere, right? And you're having this reset that was happening whether there was a pandemic or not, right. Or whether that happened pre pandemic, the reset of the collapse of the public cannabis securities anyway. But these are cycles that run through. When you have a functioning economy, there will be cycles and everything. There's no just one way. I mean, that's what got us into the housing cris problem 2008. Every model just showed the value of houses only going one direction, right? They go the other direction, everything falls apart. So, look, we've got to navigate, and this is a new frontier market. It is going to be choppy, right? It is certainly not for the faint of heart, but the silver lining to all that is we've accepted that cannabis is part of our communities. And to me, that feels like the biggest heavy lift has been done, right? Yes. You can have conversations around, are there health benefits, are there challenges? Whatever the sort of arguments are. But at the end of the day, people are spending money on it. There's an economic system that's working. Regulations need to catch up.

Jeremy Berke  35:15

Yeah, totally agree. And I think one of the things you can look at is Canada. I'm Canadian as you are.

Ross O'Brien    35:25

Yeah. I'm going to be there this week. I'm going up to Canada on Sunday.

Jeremy Berke  35:29

But the point is that if five years into the Canadian federal legalization experiment, if there were things that would cause the sky to fall, the sky would.

Ross O'Brien    35:39

Have fallen for sure.

Jeremy Berke  35:41

Even people who did not like it, even communities like Mississauga, which is a big suburb right next to Toronto, just allowed cannabis stores a month and a half ago, even though cannabis was legalized in 2018. And if you go around downtown Toronto, every other block, for better or worse, has some sort of dispensary on it. Right. So the thing is that people react very strongly to social change, and cannabis legalization is a huge social change and you can debate the merits and the pitfalls of it, but ultimately, when you get a cannabis store in your community, it doesn't really change much. Right. You can just not shop there and that's probably the only thing you'll see, is it's? What was once an empty storefront or something else is now a cannabis shop. And that's like, really all the change.

Ross O'Brien    36:26

Maybe you're getting a lot better music coming around.

Jeremy Berke  36:28

Yeah. Or even you're getting more people visiting your community. There are tangential economic benefits to this, for sure, and I want to be clear eyed about that. But at the same time it's like, what I don't understand, and I can speak more freely because I'm not sort of employed by mainstream publication anymore, is like, I just don't understand the reticence change that many lawmakers have. And I feel like you find that the reticence is further entrenched the more ideologically extreme on either side the lawmakers are.

Ross O'Brien    37:01

I think that's interesting because I think it is incumbent upon all of us that are in this space, us as investors, you as a journalist and entrepreneur, founders, advocates, it doesn't matter sort of where at play. It is not the job of regulators to be cannabis experts. Their job is to regulate, right? And let's just assume that government at least tries to function the way it's supposed to, right? Which is ultimately enacting policy on behalf of the interests of the majority of their constituents, right? It should make things easier to do business, not harder. It should make things safer, not more dangerous. Like just the general tenets of government. It's incumbent upon us to educate those people. We can't show up to have these conversations with regulators and expect that they know the story of Charlotte's Web. Right? I was talking to somebody that was actually a lobbyist. I worked with a lobbying group at Google and I asked the question, that's interesting, like, Google, huge organization, huge company, what do you lobby for as Google? Aren't you already so entrenched and said, no, it's our job to educate regulators, to give them the information, even if it's not skewed towards a specific objective. We just want them to have the fullness of information and be able to collaborate where we can help. I was like, wow, that's a really sensible, non nefarious way to engage with government. Right? And I feel like if you get too entrenched on these certain agendas and individual opinions or life experience, it gets in the way of things that can be done for the broader good. It just seems that way to me.

Jeremy Berke  38:50

No, I think it's a really good point. And I think one of the things that I hear from advocates mostly on the left is that and I think rightfully, in a lot of cases, they're very concerned with regulatory capture. Because ultimately, the groups that have the ears of lawmakers and potential regulators are well funded groups and well funded groups in cannabis are generally a few pretty well monopolized entrenched multi state operators. And look, they're incentivized by their shareholders to make more business for themselves. That's what they should do. If I was the CEO of one of those companies, that is what I would do. If I was invested in one of those companies, I'd expect my CEO or my C suite to be doing that.

Ross O'Brien    39:32

But it's not some hidden agenda, right? That's my thing.

Jeremy Berke  39:36

Of course they want to make money for themselves, right? It involves like, yes, there maybe should be a little more consideration made because of what cannabis is and what it means. And it means both historically and socially and personally to many people. But it's not nefarious. It's not evil. That's what companies are doing all the time in every single industry. When your first interaction with it is cannabis, maybe that puts people on the back foot a little bit, but that's a system that can be worked around. There's a world in which Cure Elise can make a lot of money, but progressive advocates can have their own micro cultivation, home grow where they're sharing with each other, right. That all can exist under the same umbrella. It's just you have to be careful to keep yourself aligned on these objectives, I think, and that may be easier.

Ross O'Brien    40:26

I was just having this conversation with one of my investors before we jumped on this call just around generally the lack of sort of public discourse right. And the willingness to have conversations and have tough conversations and debate. Right. It's okay to change your mind. It's okay to say, you know what? I didn't actually have the fullness of information, and maybe this way is better than the way I thought it was. It doesn't matter what side of an issue that you're on. Right. You can only get to resolutions if you can evolve your thinking. And I think that's my point is that the more we are focused on putting facts on the table and representing truth and science, which I think is one of the most important parts of this, certainly from our healthcare. Vantage point and that regulatory pathways can exist and should be open for business. Then you get into the nuances of, like, how do you put those together and how do you adjust them and how do you tinker with that?

Jeremy Berke  41:27

Right.

Ross O'Brien    41:27

But trying to take big, broad strokes every at bat isn't going to get us there.

Jeremy Berke  41:31

You should see my Twitter DMs every time I release a newsletter to see if people really want to productively disagree or they want to catch, I can't.

Ross O'Brien    41:41

Wait till they hear this.

Jeremy Berke  41:43

Look, it's fine. That's sort of part of the role that I've chosen to take, like being a little bit public and my sort of opinions and perspectives. You're going to get that, as you should.

Ross O'Brien    41:52

Yeah.

Jeremy Berke  41:53

But ultimately, by and large, you can generally discount the hysterical opinions, and you can talk to really smart people who might have an opposing viewpoint. That's a really good one. Right. There are people both on the left and right that are really smart and differ from me in a lot of these issues we've talked about that I'm always willing to hear out, and they're always willing to hear me out. And I think that's at the end of the day, it's like you do have to kind of pick and choose your battles in terms of these little personal conflicts. But overall, it's a microcosm of the broader debate around honing in on a strategy that benefits both the industry and the movement as two separate but mutually intertwined pieces of cannabis legalization. And I think that's where the challenge is. It's like right now, the movement could not be further apart from the industry, and ultimately all that's going to do is undermine the overall goal that both sides share.

Ross O'Brien    42:45

Look, as always, such an interesting conversation. I love hearing directly from you things that you're working on, Jeremy. I would encourage everybody to sign up for Jeremy's newsletter and let's put the podcast up on Twitter and see if we can have some healthy debate around some of the more controversial things. So thanks for joining us for the Cannabis Capitol Hill episode with Jeremy Burke. And Jeremy, again, tell everybody where they.

Jeremy Berke  43:13

Can find you WW dot Cultivated News or find me on Twitter at jfbirk. And please subscribe to the newsletter. Let me know what you think. It's free, so not a huge ask.

Ross O'Brien    43:23

Brilliant. Well, love what you're doing. Really important voice in the space. And I always really enjoy our conversation. So thanks for joining us today.

Jeremy Berke  43:45

You. Thanks for listening to today's show. To check out more Great Cannabis podcasts, go to podconnects.com. Here's a preview of one of our other shows.