Speaker 1: This is Masters in Business with very Ridholts on Bloomberg Radio.
Speaker 1: This week on the podcast, I have an extra special guest.
Speaker 1: His name is Todd Harrison, and as you will be
Speaker 1: able to tell from the listening, he and I know
Speaker 1: each other for a more than a few years. We
Speaker 1: go way back. Todd has really a fascinating career in finance,
Speaker 1: and and a very atypical one. It began fairly uh reasonably. Um.
Speaker 1: He ends up on Morgan Stanley's derivative desk, He goes
Speaker 1: to Gallant, he goes to Kramer Berkowitz, and then he
Speaker 1: starts doing some really really unusual, interesting different things. I
Speaker 1: think you will find the space he's carved out presently
Speaker 1: to be both very very interesting and somewhat unique. He
Speaker 1: runs a hedge funds that focuses on health and whelming
Speaker 1: us specifically through CBD and cannabinoids. That is, um, the
Speaker 1: proper pronunciation of what I was messing up. I was
Speaker 1: calling it cannaboids, but apparently that's wrong. Uh. It is
Speaker 1: one of the many um active medical ingredients in marijuana.
Speaker 1: He believes this is a space that is uniquely situated
Speaker 1: to benefit from a number of waves uh, the changes
Speaker 1: in demographics that are taking place with the aging of
Speaker 1: American society, how expensive American healthcare and pharmaceuticals have become. Uh,
Speaker 1: not only that, but the the huge change in the
Speaker 1: science of what we're learning about the various molecules and
Speaker 1: chemicals within marijuana and all of its medicinal applications. And
Speaker 1: at the same time, he looks at this as a
Speaker 1: wildly underserved space in the investment world. You know, when
Speaker 1: I think about legalization, I think about people who are
Speaker 1: gonna go get a PAXs pen or a vape and
Speaker 1: and basically, you know, have a little bit of fun
Speaker 1: on a Saturday night. He's looking at this completely differently.
Speaker 1: This isn't about UM recreational weed. This is about the
Speaker 1: application of science to the compounds in marijuana and everything
Speaker 1: at all. That plus the opioid crisis, which UM there's
Speaker 1: a huge overlap in UM helping to solve that and
Speaker 1: some of the applications of cannabinoids and marijuana, and you
Speaker 1: end up with what is really a fascinating conversation about
Speaker 1: a fairly unique niche in in investing. And if you're
Speaker 1: at all interested in this, I think you're gonna find
Speaker 1: it fascinating. So, with no further ado, my conversation with
Speaker 1: CB one Capital Partners Todd Harrison. This week I have
Speaker 1: an extra special guest. His name is Todd Harrison, and
Speaker 1: he has quite the career uh in finance. He spent
Speaker 1: seven years on the worldwide equity derivative desk at Morgan
Speaker 1: Stanley before leaving to manage derivatives at the Galleon Group.
Speaker 1: He became president and chief trader at the four hundred
Speaker 1: million dollar hedge fund Kramer Berkowitz. At the Street dot Com,
Speaker 1: he created the Trading Diary, which, for my money, was
Speaker 1: the first real time financial blog ever. He founded the
Speaker 1: investor education site Minionville, author of the book The Other
Speaker 1: Side of Wall Street. He currently is the founding partner
Speaker 1: and chief investment officer of CB one Capital Management, a
Speaker 1: healthcare fund focusing on medical canniboyds. Todd Harrison, Welcome to Bloomberg.
Speaker 1: Thank you for having me, Barry, and I've been looking
Speaker 1: forward to having a conversation with you on air for forever.
Speaker 1: There's so much stuff to talk about. Let's start in
Speaker 1: the nineties. You go from Morgan Stanley, where you're on
Speaker 1: the derivative desk, to Galleon to Cramer Berkowitz. What was
Speaker 1: that side of trading like during that sort of crazy
Speaker 1: time the es Well, I think it's everything everybody hates
Speaker 1: about trading now and the Wall Street persona, it was.
Speaker 1: It was a lot looser, it was a lot more
Speaker 1: maverick um, and I think the industry was a lot
Speaker 1: more fun back then. You remember, we actually believed we
Speaker 1: were doing uh, real utility in our work. We believe
Speaker 1: we were facilitating the mechanism of the capital market structure,
Speaker 1: and that was noble work. Back then, it was it
Speaker 1: was God's work and so else. I stayed away from
Speaker 1: that by design, but certainly I think there was there
Speaker 1: was a lot, a lot of meaning in that. Back
Speaker 1: before this we all became algorithmic and certainly dominated by
Speaker 1: the computer world, and and also before it became less profitable,
Speaker 1: less volatile, less um, less interesting as a career. So so,
Speaker 1: Morgan Stanley, you're just a derivative trader. Are you trading
Speaker 1: on your own behalf? You're trading on behalf of the
Speaker 1: firm's clients. What are you actually doing on the desk? Well,
Speaker 1: I was trading on the equity derivative desk, So I
Speaker 1: was facilitating customer orderflow, but we also traded proprietarily back then,
Speaker 1: So I had the biotech book, I had the financials
Speaker 1: that I took as my own. But it was an
Speaker 1: interesting journey to Morgan Stanley. I know, I didn't always
Speaker 1: plan to be on Wall Street. When I went to Syracuse,
Speaker 1: I was proficient in accounting and finance, and it was
Speaker 1: really a jump ball back then. But uh, I was
Speaker 1: accused of cheating on my UH my advanced finance class
Speaker 1: mid term UH in my junior year, and as I
Speaker 1: got pulled to the professor's office, he asked me a
Speaker 1: number of questions and when I realized what the dynamic was,
Speaker 1: you know, long story short, he ended up placing me
Speaker 1: at Morgan Stanley in one in between my junior and
Speaker 1: senior year of college. And that was really the beginning
Speaker 1: of of really watching the energy and seeing the the
Speaker 1: way this business worked. And I was hooked from from
Speaker 1: the word go. So, so you dropped into the middle
Speaker 1: of that sentence I was accused of cheating. I'm gonna
Speaker 1: assume it wasn't. Oh, I have this ethicless kid who
Speaker 1: was a cheat, or let me send them to London.
Speaker 1: That's where they go he figured out, obviously you weren't cheating,
Speaker 1: and what was the basis of the accusation? Were you
Speaker 1: scoring too high on the test? Yes, I blew the
Speaker 1: bell curve. So I think I got like a hundred
Speaker 1: and fifty something on the mid term. And I thought
Speaker 1: he was going to congratulate me. But you know, as
Speaker 1: it turns out, he's Uh, he's a good man. And
Speaker 1: I was actually in a fraternity with his brother, with
Speaker 1: his with his son. Uh. It was. It turned into
Speaker 1: a good story. But at the time it was an
Speaker 1: interesting dynamic to go to London while you're in college
Speaker 1: and to sit there. I was in operations control. I
Speaker 1: brought the trade breaks to all the traders. I was
Speaker 1: screamed at, yelled at, uh, completely demoralized, and I was hooked.
Speaker 1: I said, that's where I want to be one day.
Speaker 1: I want to be, not seat. I want to be
Speaker 1: the screamer and not the scream a. So so Morgan
Speaker 1: Stanley to the Galleon Group, which was then a huge
Speaker 1: and very successful UM hedge fund prior to that little
Speaker 1: hiccup towards the later years. What did you do with Galleon? Well,
Speaker 1: I had two I had two roles there I traded
Speaker 1: my own book, but really my primary role was to
Speaker 1: manage the derivative book. Galley On when I started was
Speaker 1: five hundred million. That grew to about five billion UM,
Speaker 1: and it was it was a lot tougher than I expected,
Speaker 1: without the infrastructure and the franchise behind me of Morgan Stanley.
Speaker 1: But I think maybe some of that had to do
Speaker 1: with the environment. Now, you know, I worked there for
Speaker 1: two years only, and I think, you know, the writing
Speaker 1: was on the wall after the first year, when there
Speaker 1: was about a hundred million to whack up between five partners.
Speaker 1: There were five partners in me, I was shut out
Speaker 1: and and and subsequently the next year something very similar
Speaker 1: happened and I was told that I didn't have what
Speaker 1: it takes to make partner, which I was actually upset
Speaker 1: about for some time. But that that that has passed,
Speaker 1: I would imagine, So how do you end up going
Speaker 1: from Galleon to Kramer Berkewitz. Well, Jeff Berkelewitz was always
Speaker 1: a friend of mine and I knew they had a
Speaker 1: tough year year prior. Uh So we had started a
Speaker 1: conversation once the writing was on the wall at Galleon,
Speaker 1: and he asked me to come over and that's where
Speaker 1: I met Jim and and Jeff and it was a
Speaker 1: good dynamic there. So I came in um and I
Speaker 1: took control of the trading operation. I turned the desk
Speaker 1: over and implemented risk protocols and uh, you know, it's
Speaker 1: a terrific year that that was y two k So
Speaker 1: that was the one year that Jim and I actually overlapped.
Speaker 1: We did quite well that year, and I ended up
Speaker 1: staying there for another couple of years after. And to
Speaker 1: put for those people who may not be familiar with
Speaker 1: Kramer Berkelewitz, you know, Jim Kramer, the talking head, but
Speaker 1: I want to say their long time track record was
Speaker 1: something like year compounded. Is that about right? That's a
Speaker 1: very respectable track record. And you're gonna take credit for
Speaker 1: how much of it? Very little? Very little. So from
Speaker 1: that trading background at Kramer Berkowitz, Jim Kramer decides to
Speaker 1: launch the Street dot com. And we'll talk more about
Speaker 1: that later, but you decide to start writing for the Street,
Speaker 1: a real time online trading diary. What what was the
Speaker 1: motivation behind that? It wasn't my decision. This was Jim
Speaker 1: going on vacation in July of two thousand and asking
Speaker 1: me if I would fill in for a day, and
Speaker 1: never having written before, but certainly Jim being Jim is
Speaker 1: hard to say no to. And uh, it was something
Speaker 1: that I had fun with. I was using pop culture
Speaker 1: references in double entendres uh and and musical lyrics and
Speaker 1: I happened to be extremely barished. This was the spring
Speaker 1: or summer of of two thousands the case maybe uh,
Speaker 1: and it just it just took and developed quite a
Speaker 1: community out of that. So I think a lot of
Speaker 1: people here in New York might be surprised to know
Speaker 1: that New York has a legal medical marijuana uh set
Speaker 1: of statutes that allows, on an extremely limited basis, the
Speaker 1: prescription approachase and consumption by people UM who have very
Speaker 1: specific diseases. New York is nothing like California. Just say,
Speaker 1: you know Oregon or Colorado or any of the other
Speaker 1: places that have really moved from the criminalization to um
Speaker 1: full on legalization. What what is the New York situation? Well,
Speaker 1: they actually just expanded the access to include PTSD and
Speaker 1: that's actually how I got my cannabis card in New York.
Speaker 1: Is true? That is true, UM, And it wasn't going
Speaker 1: to talk about this, but certainly as a as a
Speaker 1: bit of a context for the card. Uh. Nine eleven
Speaker 1: was very profound for all of us. So I was
Speaker 1: going to say, anyone who worked with Cramer is Jim's
Speaker 1: a good man. Uh. So you know nine eleven, we
Speaker 1: were down there, that's where our office was. And and certainly, uh,
Speaker 1: you were right on Fulton, so we you know, certainly
Speaker 1: you know, heard the bang and saw people holding hands
Speaker 1: and jumping, and saw the second plane entering the building,
Speaker 1: and um, you know, it was a pretty horrow experience.
Speaker 1: But I remember that I refused to really let myself
Speaker 1: feel bad because I felt guilty because so many people
Speaker 1: lost so much more. And I thought, and although it
Speaker 1: is doesn't seem to be the healthiest way to well clearly,
Speaker 1: but what ended up happening is over the course of
Speaker 1: the treatment protocol, I was I was um prescribed a
Speaker 1: numerous different medications anti anxiety, anti depression. Uh, and before
Speaker 1: I knew what I was stocked on four or five
Speaker 1: different medications. That was really just it changed who I
Speaker 1: was as a person and really changed how I was
Speaker 1: able to think and act um. And it was during
Speaker 1: a time that that significant and impact Ye and it's
Speaker 1: not this is not a this is not a solo story.
Speaker 1: There's a lot of people out there that I think
Speaker 1: are are going through this right now and they become
Speaker 1: dependent on these prescription drugs. And you know, that was
Speaker 1: really one of the catalysts for me to really start
Speaker 1: to dive down into the Canada space. I started to
Speaker 1: invest in a company called GW Pharmaceuticals a number of
Speaker 1: years ago, and you know, they're studying the plant right there,
Speaker 1: taking a not a noise out of the plant and
Speaker 1: studying it for efficacy. So these are people rolling up
Speaker 1: joints and striking weeds. These are people who are actually
Speaker 1: either consuming it in a pill form or or some
Speaker 1: other assumption like traditional pharmaceuticals. Sure, and that's really what
Speaker 1: what UH really enlightened me because for a long time,
Speaker 1: and I remember going on TV about eight years ago
Speaker 1: talking about cannabis is my single best investment idea for
Speaker 1: the next decade. And I was a little early, but
Speaker 1: certainly I was also wrong, and that I was looking
Speaker 1: at the job growth to tax revenue, the prison population,
Speaker 1: crime rate and saying this makes sense. I failed to
Speaker 1: realize the coordinated agenda by the big pharmaceutical companies to
Speaker 1: keep this illegal, and all of that that I studied
Speaker 1: and look back on it really what I think is
Speaker 1: criminal activities on the part of the government to really
Speaker 1: suppress this given what they knew at the time in
Speaker 1: terms of efficacy. So here's the question on that. Years
Speaker 1: and years and years ago, like the eighties and nineties,
Speaker 1: I always heard weed is going to be legal because
Speaker 1: all the big tobacco companies know that their products killing people,
Speaker 1: and they know how to grow, and they know how
Speaker 1: to roll, and they know how to do all this,
Speaker 1: and one day the switch is gonna flip and you know,
Speaker 1: Philip Morris and Brown and Williamson and all those companies
Speaker 1: are going to go from selling cigarettes to selling joints.
Speaker 1: That never happens. That's not true. It actually is happening now.
Speaker 1: It is now. I mean that never happened where where
Speaker 1: I certainly didn't happen on my timeline to be to
Speaker 1: be um precise, how much is that actually happening? And
Speaker 1: what I'm trying to tee up is how much is
Speaker 1: that same pivot going to take place with the pharmaceutical
Speaker 1: industry that's been fighting what appears to be a losing battle. Well,
Speaker 1: We've been saying for some time that the by build
Speaker 1: was going to migrate across for spaces by build by build,
Speaker 1: So it's not as easy as dropping seeds in the
Speaker 1: ground and growing a cannabis plant. There's a lot of
Speaker 1: science and we're gonna talk a little bit about the
Speaker 1: frontier science the endocannabinoid system, UH and what the science
Speaker 1: behind this is. And it's really fascinating. It's it's for
Speaker 1: those who are intellect really curious. This is a rabbit
Speaker 1: hole that I still haven't climbed out of, but we've
Speaker 1: seen it. We saw Constellation Brands take a stake in
Speaker 1: Canopy that was on the beverage side. We saw a
Speaker 1: oy by a Canadian growers, so that's on the tobacco side. Uh.
Speaker 1: And we think the next phase is going to be
Speaker 1: biopharmaceutical and then ultimately consumer goods because if you think
Speaker 1: about it, as more supply comes on, the prices will decline.
Speaker 1: That's going to help people who use cannabis as an ingredient.
Speaker 1: That's going to help their margins on the back end.
Speaker 1: That's quite fascinating. You mentioned an investment in Canada. Last year,
Speaker 1: Canada passed the law that essentially says they're decriminalizing marijuana
Speaker 1: as a country, the first G seven country to do. So,
Speaker 1: what what's gonna happen with that? Well, there, that's gonna happen, clearly.
Speaker 1: But I think part of part of the mist perception
Speaker 1: about Canadian cultivators is people are extrapolating that to the
Speaker 1: Canadian population, but in actuality, what they are going to
Speaker 1: be is a service station to the world. So they
Speaker 1: have deals with Germany, they have deals all over the
Speaker 1: all over the world, and you're seeing this sweeping across
Speaker 1: the world, whether it's followed the money, whether it's people
Speaker 1: are understanding for the first time the efficacy. What's interesting
Speaker 1: is the morning that Jeff Sessions revoked the Coal Memorandum
Speaker 1: the Australian and then explain that for people who may
Speaker 1: not the Cole Memorandum effectively protected the States from government
Speaker 1: interference under President Obama, correct, all right, and then under
Speaker 1: President Trump Sessions Sessions provoked that And then didn't we
Speaker 1: just here a deal with Corey Booker and who was
Speaker 1: blocking some of the President's appointments and President Trump it
Speaker 1: was Corey Gardner in in Colorado. But um, you know,
Speaker 1: when we've been saying for some time now that we
Speaker 1: think that the foremost dangerous words in finance, this time
Speaker 1: is different. That this time is in fact different because
Speaker 1: it's an election year and you have of the constituency
Speaker 1: that's supportive of medical cannabis. That's amazing, And the only
Speaker 1: thing that politicians like more than lobby money is being reelected.
Speaker 1: So we actually have been saying for some time that
Speaker 1: we thought that you're gonna see a pretty significant pivot
Speaker 1: this year. And sure enough, you saw Mitch McDonald, Mitch
Speaker 1: McConnell with the Hemp bill. You saw John Bayner. Now,
Speaker 1: by the way, Bayner was rapidly anti hot when he
Speaker 1: was Speaker of the House. And what happened He saw
Speaker 1: a little bit of that no pun intended leafy green
Speaker 1: stuff and suddenly he changed his view. Well, there's that,
Speaker 1: but there's also what I think the real You know,
Speaker 1: when we talk about this investment in our strategy really
Speaker 1: through the lens of four arbitrages, right, arbitrage of time
Speaker 1: versus policy. Right, we do believe this is efficacious and oh,
Speaker 1: by the way, the only way the US government can
Speaker 1: tax this as if it's through the FDA. Right, we
Speaker 1: believe it's an arbitrage of of price versus UH the
Speaker 1: high net worth individuals and the US institutions that are
Speaker 1: going to be on boarding to the space. Vanguard very
Speaker 1: quietly has become a top five holder in all of
Speaker 1: the Canadian majors. Now is that is that within their
Speaker 1: indexes or is that within the one and a half
Speaker 1: two trillion that's active. I don't know the answer to that,
Speaker 1: but I know that. But I do know that when
Speaker 1: I've gone to these conferences, I've seen Fidelity, Vanguard, Putnam,
Speaker 1: Goldman all walking around. These barbarians are massing at the gate.
Speaker 1: If if if institutions don't chase growth, it'll be the
Speaker 1: first time in my thirty years that it hasn't happened that.
Speaker 1: That's so. So here's the question. How big can the
Speaker 1: market for medical marijuana become? Well, Gallup right now is
Speaker 1: saying it's about a three and twenty billion dollar annual
Speaker 1: market all in. What is that comparable to? I mean,
Speaker 1: you know we have talked, You and I have talked
Speaker 1: about the parallel with prohibition and alcohol coming on. I
Speaker 1: think that's a non linear comparison because alcohol never killed
Speaker 1: cancer cells, alcohol never reduced epileptic seizures. We think that
Speaker 1: the third arbitrage I alluded to is perception getting well
Speaker 1: versus getting high. We think this is about getting well,
Speaker 1: and we talked about earlier with the coal memorandum. The
Speaker 1: health ministers of Australia and Canada came out that morning
Speaker 1: and said they wanted to dominate the world in cannabis. Now.
Speaker 1: Their health ministers said this, now, unless they want a
Speaker 1: nation full of stoners. We're betting that they see what
Speaker 1: we see in terms of the efficacy. And this is
Speaker 1: the untold story here. This is why it's so powerful
Speaker 1: right the people. There are people on the right thing
Speaker 1: that think this is the devil's weed. There are people
Speaker 1: on the left that like to smoke a vaporizer on
Speaker 1: a Saturday night. But all of us, if somebody that
Speaker 1: we love is suffering, we want the best care with
Speaker 1: the least amount of side effects. And that's the story here.
Speaker 1: This is a wellness story I know, and full disclosure,
Speaker 1: I know Todd for a couple of decades. We both
Speaker 1: wrote at the Street dot com back in the day.
Speaker 1: I have to talk a little bit about that. We
Speaker 1: mentioned the trading diary that you filled in for a day.
Speaker 1: How did that become a daily routine. Interestingly, I found
Speaker 1: that it helps synthesize my thought process. And I've always
Speaker 1: looked at the market and said, there's always a bear
Speaker 1: case and there's always a bowl case. And if you
Speaker 1: could you know that that friction between those opinions is
Speaker 1: where both education is found, but it's also where profitability lies, right, um.
Speaker 1: And so I I took to it, uh the online platform,
Speaker 1: and keep in mind this is before blogs and social media,
Speaker 1: so it was still, um, a bit of a pedestal,
Speaker 1: I guess, but I enjoyed it because it allowed me
Speaker 1: an opportunity to uh synthesize my thoughts and really lay
Speaker 1: it out there in a way that held me accountable
Speaker 1: to really following my own my own thought process. That
Speaker 1: that's a very um astute insight. Daniel Burston was the
Speaker 1: Librarian of Congress and his famous line was, uh, I
Speaker 1: write to figure out what I think, and besides, the
Speaker 1: bars aren't open at that hour. And uh, you pretty
Speaker 1: much said something similar. So the trading diary continues, and
Speaker 1: you did that for a long time. I recall you
Speaker 1: mentioned there's always a bull and bear case. You came
Speaker 1: up with a great metaphor for your putting on your
Speaker 1: bullsuit or your bear suit. I have one one hoof in,
Speaker 1: I have two hoofs in. You you literally explained for
Speaker 1: readers not just I'm bullish, embars hey, I'm se bullish
Speaker 1: or how did the process of writing help with your
Speaker 1: own trade? Well, as I said, I think it held
Speaker 1: me accountable, but it also it also allowed for more
Speaker 1: sequencing in my thought process. So, uh, you know, certainly,
Speaker 1: and we talked a lot about you know, there's always
Speaker 1: this bowl case and the always this bearcase, and we
Speaker 1: sort of brought them to life with the characters that
Speaker 1: we invented and animated and ultimately, you know, they won
Speaker 1: an Emmy Award for their work, and Huffy and Booch certainly,
Speaker 1: and you know, the perfect media prize, right, an Emmy award.
Speaker 1: It looks nice on the mantel, it's nice and shiny,
Speaker 1: but the zero revenue attached, you know. So but that
Speaker 1: was but that was you know, the idea behind Minonville
Speaker 1: was really to create a vertical from the A, B
Speaker 1: C s to the four one case. You know, we
Speaker 1: identified financial awareness, financial empowerment, financial literacy by another name. Uh,
Speaker 1: you know, through my writing at the Street Dot com
Speaker 1: realized that there's a lot of people out there that
Speaker 1: need the help, that want the help, that are good
Speaker 1: people who deserve the help. And I sort of took
Speaker 1: that upon myself to to do that. And for fifteen
Speaker 1: years that was a very meaningful way to spend my day.
Speaker 1: Not a very profitable way to spend my Uh you know,
Speaker 1: I traded my own account throughout the al but uh,
Speaker 1: you know, certainly, I think psychic income was at an
Speaker 1: all time high. So my colleague Josh Brown called the
Speaker 1: Street dot com the motown records of the financial web.
Speaker 1: And I could point to just about every institution that
Speaker 1: covers trading economy, markets, media UM from from from Bloomberg
Speaker 1: to the New York Times, the Wall Street Journal to
Speaker 1: you name it, and there's a huge pro publica, a
Speaker 1: huge swath of people um that trace their roots back
Speaker 1: to the Street dot Com. So I have two questions
Speaker 1: for you about that. What was the feeling like inside
Speaker 1: the Street when this new idea of democratizing research rolled out?
Speaker 1: And then what was the leaping off aha moment Frommingonville
Speaker 1: as a as an educational outlet. Sure, so I think
Speaker 1: they were the original on on community and financial media
Speaker 1: I mean, you know that Doug Cass and Wire and
Speaker 1: Bill Fleckenstein, and you know Jim obviously Greenberg. I mean
Speaker 1: these are all, but this was you know, these were
Speaker 1: good people who happened to trade, not traders who happened
Speaker 1: to write. And I think that came through you know,
Speaker 1: authenticity is very hard to fake by definition, right, So
Speaker 1: I think that was authentically um an opportunity for all
Speaker 1: of us to give back. And I think that, you know,
Speaker 1: it was lightning in the bottle for a few years. Sure,
Speaker 1: and then Minionville, What what made you say I want
Speaker 1: to attack to something that's more educationally focused and and
Speaker 1: especially focusing on teaching kids about money. It was nine eleven,
Speaker 1: you know, it was nine eleven in that it was
Speaker 1: like that catalyzed me to really ask the question, what
Speaker 1: am I doing with my life? What's the difference between
Speaker 1: having fun and and being happy? I love that quote
Speaker 1: of yous by the way, I tweeted that recently and
Speaker 1: someone said you should get Todd on the show, and
Speaker 1: my answer was, well, I'm doing my research. What do
Speaker 1: you think that world came from? Well, it's certain me.
Speaker 1: I think before that I was having those questions. I
Speaker 1: would look in the mirror, and you know, the net
Speaker 1: worth verse self worth thing certainly was a long time coming.
Speaker 1: But after nine eleven, uh, you know, I wanted to
Speaker 1: take it to a different level. My grandfather was failing
Speaker 1: at the time. I had a lot of emotions and
Speaker 1: I really wanted to just, uh you know, selfishly create
Speaker 1: a Catharsis. And after nine eleven, uh, you know the
Speaker 1: street and you know, I'm not going to get into details.
Speaker 1: It didn't end well. I think in hindsight, I regret
Speaker 1: a lot of the things that went down, and maybe
Speaker 1: some of the things that were said and done. You know,
Speaker 1: as you get older, you tend to reflect on sort
Speaker 1: of what matters and what doesn't matter, certainly, and you know,
Speaker 1: and and Jim, you know, listen, I I care a
Speaker 1: lot about the man. You know, we haven't talked in
Speaker 1: a long long time, and that's unfortunate. But uh, you know,
Speaker 1: like I said, as you get older, you start to
Speaker 1: reflect on your life and and the people in it.
Speaker 1: And certainly I have I owe him a great debt
Speaker 1: for opening this world to me and also for things,
Speaker 1: uh that nobody knows that he did behind the scenes
Speaker 1: that I think of the real definition of a good
Speaker 1: man what you do when nobody's watching. So after nine eleven,
Speaker 1: I decided I was gonna put all my efforts into
Speaker 1: starting a new platform. And after I spent about two
Speaker 1: million dollars on it, I decided that if I didn't
Speaker 1: turn this into a business, uh, then it's the world's
Speaker 1: most expensive hobby. And you know what's that all about?
Speaker 1: So uh, it turned into something pretty powerful. I think
Speaker 1: anybody who remembers Minionville can remember the energy and the
Speaker 1: events and the and the lessons and and it's something
Speaker 1: that I think after the after, you know, with the
Speaker 1: benefit of hindsight, I think I appreciate it more than
Speaker 1: than maybe I did immediately thereafter. And last question, tell
Speaker 1: me about the Ruby Peck Foundation and the rock Stars guitars. Well,
Speaker 1: the Ruby Peck Foundation Ruby Pecks my grandfather. So in
Speaker 1: two thousand and one started at children's Ruby Peck Foundation
Speaker 1: for children's education and we raised, you know, a lot
Speaker 1: of money for kids. It was part of the giving
Speaker 1: back ethos that's part of Minionville. And I remember Doug
Speaker 1: Cass and you and a number of others got to
Speaker 1: that got that all star guitar as signed by everybody
Speaker 1: from Buffett to Chainos too, you know, Peter Lane right
Speaker 1: across the board, and we auction it off for charity.
Speaker 1: So it was a past the organization. We raised a
Speaker 1: lot of money for kids. But you know, between Menonville
Speaker 1: and the Ruby Peck Foundation, it was a it was
Speaker 1: a terrific uh stretch in my life. But as people say,
Speaker 1: you are with things for reasons, seasons or lifetimes, and
Speaker 1: you know, I guess Minonville wasn't a lifetime endeavor. So
Speaker 1: let's talk a little bit about CBD. Can we call
Speaker 1: that that instead of my mangling the word, Um, what
Speaker 1: is CBD and what's it good for? Well? CBD in
Speaker 1: and of itself as an antipsychotic, right, So it's a
Speaker 1: calming influence and taking a step back cannabinoids and talking
Speaker 1: a little bit about the science because this is really
Speaker 1: the thrust of what's the most important conversation about cannabis
Speaker 1: right now, and what most people are missing is the
Speaker 1: wellness side. So everything that's alive, whether it's a dog,
Speaker 1: a cat, a plant, fish, or human being, has what's
Speaker 1: called an endocannabinoid system, right, and this was first discovered
Speaker 1: in the late eighties and early nineties, it's the most
Speaker 1: ubiquitous network of receptors in the human body, Okay. And
Speaker 1: what they found is the cannabinoids found in cannabis are
Speaker 1: identical in action to the endocannabinoids that your body produces. Now,
Speaker 1: so in other words, these aren't things that are getting
Speaker 1: you high. This has an impact on the biochemistry of
Speaker 1: the body. Well, about ten percent of carnabinoids will produce
Speaker 1: that euphoric effect or non euphoric. All of them are
Speaker 1: anti inflammatories, all of them are therapeutic, right. So what
Speaker 1: they're finding out now is that by looking at the
Speaker 1: endocannabinoid system, you can now target receptors in your body
Speaker 1: with certain cannabinoids across a wealth of indications for wellness.
Speaker 1: Right now, we my partner Lauren de falcore nine and
Speaker 1: I'll tell you his story. Uh, but we spent a
Speaker 1: lot of time talking to scientists and genealogists, and the
Speaker 1: mosaic that was painted for us effectively was over the
Speaker 1: last hundred years, we've gone from hunters and gatherers to
Speaker 1: desk jobs, and we've gone from organic foods to process foods,
Speaker 1: trans fats and chemicals, and certainly heredity plays a part.
Speaker 1: But as you get older, your body stops producing these endocannabinoids.
Speaker 1: Case in point, the Runner's high. Everybody always thought the
Speaker 1: runners high was endorphins. False. The runners high is a
Speaker 1: e A, which is an endocannabinoid. It's identical in action
Speaker 1: to th HC. This is all frontier science. Remember, still
Speaker 1: illegal to test cannabis in the United States. So all
Speaker 1: of this is happening in Israel, Israel, and Italy, Germany overseas. Right,
Speaker 1: But what they're finding now, and you might I'm sure
Speaker 1: you saw the g W Pharmaceuticals their epidialects drug. We
Speaker 1: have a position in GW. But their epidialects drug is
Speaker 1: reducing seizures and children by fifty cutting them in half.
Speaker 1: So they had their FDA expert panel a few weeks
Speaker 1: back and they got a standing ovation on top of
Speaker 1: a thirteen to nothing unanimous decisions. So this is going
Speaker 1: to move forward, which is significant, demonstrates medical efficacy. The
Speaker 1: d e A is going to have to reschedule and
Speaker 1: that's going to open up the pipe and arch. So
Speaker 1: let's talk about asthma, Alzheimer's cancer, epilepsy, park and sins.
Speaker 1: What else is on the list for things that CBD
Speaker 1: can actually, uh make a difference either in the quality
Speaker 1: of life or potentially finding a cure for these diseases. Well,
Speaker 1: the the answer is that it's frontier science and we
Speaker 1: don't yet know the scope of the wellness activity. Not
Speaker 1: just but it's not just CBD, is what I'm saying.
Speaker 1: CBD and th hc or or sort of the main players.
Speaker 1: What everybody associates with cannabin lots of other chemicals, a
Speaker 1: ton of minor cannabinoids. You think that people were mining
Speaker 1: for bitcoins and that became crazy. Wait till people understand
Speaker 1: how valuable these minor cannabinoids are. CBN as a sleep aid,
Speaker 1: th h c V as an appetite supressant. This is
Speaker 1: all coming through the pipe right now. There's about clinical trials.
Speaker 1: It's gonna blow your mind when you see the efficacious
Speaker 1: agility of this plant. Wait, weed as an appetite suppressant.
Speaker 1: Now I'm I'm stunned to you that well weed is
Speaker 1: a four letter word. Okay, we're talking about wellness, right,
Speaker 1: We're talking about extracting the cannabin voids and targeting receptors
Speaker 1: in your body. And this is literally frontier science, and
Speaker 1: this is what people don't get We've gone and spoken
Speaker 1: to big pharma analysts and biotech CEOs and cardiothoracic surgeons
Speaker 1: and they looked at us like we're crazy. Seriously, they
Speaker 1: never studied this. As a matter of fact, only nine
Speaker 1: percent of medical schools now even touch on the ECS
Speaker 1: on the endocannabinoid system and that all started last semester Oxford, Right,
Speaker 1: So you literally have a four year time line on
Speaker 1: an arbitrage here before this becomes mainstream therapeutic relief. So
Speaker 1: one of the things I read the other day, and
Speaker 1: it could just be a correlation. I'm not suggesting there's
Speaker 1: a causation because I didn't look at the study closely.
Speaker 1: But in states where there's a huge opioid addiction problem,
Speaker 1: and subsequently either decriminalization medical marijuana or legalization, the opioid
Speaker 1: addictions plummet. In states where it's kindabis friendly states, less morbidity.
Speaker 1: This is saving law. Now. People who have been following
Speaker 1: this for a long time, it want a lot longer
Speaker 1: than I have, will tell you that epilepsy cancer. As
Speaker 1: a matter of fact, Nixon's on tape burying the stat
Speaker 1: are actually blaming the Jews for all the cannabinoids but
Speaker 1: they knew this. They knew this one, and they banned testing,
Speaker 1: which I'm saying, this is you are you gonna make
Speaker 1: me lower my view of Nixon even further that he
Speaker 1: knew this was had a positive impact and ultimately still
Speaker 1: said just I mean, listen, there are so many reasons
Speaker 1: when we talked about the met but think about the
Speaker 1: racial disparity, right, how this is clogging up the prison system,
Speaker 1: and how this is the crime rate and the cost
Speaker 1: what about simple calculus. The cost of this is insane, right.
Speaker 1: But but my point being, were at the cusp of
Speaker 1: of a revolution in healthcare, which we think is going
Speaker 1: to be a healthcare disruption, and we think big farmers
Speaker 1: about to turn buyer, but uh, we don't think they
Speaker 1: have a choice. I quoted you in a Bloomberg View
Speaker 1: column a couple of months ago, and the line I
Speaker 1: said was, imagine, for a moment, you could go back
Speaker 1: in time to nineteen thirty two, the year before the
Speaker 1: twenty one Amendment to the U. S. Constitution was ratifying
Speaker 1: repealing prohibition in the eighteenth Amendment. And I raised the
Speaker 1: question if you could do that knowing what the future
Speaker 1: was going to look like with alcohol being legal again,
Speaker 1: how would you invest? So we're not quite at the
Speaker 1: repeal of all these rules against research or medical usage
Speaker 1: or even recreational usage, but it certainly feels like that's
Speaker 1: the inevitable way we're moving that, which leads me to
Speaker 1: the investing question. If everything goes as it's expected, and
Speaker 1: I imagine it will be parallel to the marriage equality rules.
Speaker 1: People felt we were getting closer and closer than suddenly
Speaker 1: the dam broke. How would you position your portfolio? What
Speaker 1: sectors would you look to invest stin? If someone comes
Speaker 1: up to you and says, hey, I got ten percent
Speaker 1: of my portfolio, I want to be a little speculative,
Speaker 1: and I think this medical marijuana thing is going to
Speaker 1: be big, how would you recommend invest I think the
Speaker 1: consistencies are you're looking for brands, and you're looking for
Speaker 1: brands at a distribution and quality of product, and certainly
Speaker 1: good management teams and all the things that you would
Speaker 1: look for in a good company. Right you're looking at
Speaker 1: management teams, you're looking at at their balance sheet, you're
Speaker 1: looking at their patent portfolio, whatever the case may be.
Speaker 1: But where I think it's different now and where I
Speaker 1: think a lot of people are gonna get hurt investing
Speaker 1: in cannabis is there's a perception that this is about
Speaker 1: cultivation and that you know a lot of the Canadian
Speaker 1: cultivators have had their run in the sun. Uh, there's
Speaker 1: a lot of them that are that are well undervalued
Speaker 1: as a matter of fact. I mean, we're looking at
Speaker 1: a company right now that has about two million dollar
Speaker 1: market cap that we think is gonna do eight hundred
Speaker 1: million in revenue in and why is it trading like this?
Speaker 1: It's treating like this because there's no institutional research analysts,
Speaker 1: no institutional holders. And we think that's about to change
Speaker 1: in a big way. You're gonna see Wall Street a
Speaker 1: job cannabis because they're gonna follow the money and that's
Speaker 1: where the money is going to go. But it's not
Speaker 1: just cultivation again. Cosmetics and vanity gonna be huge, huge,
Speaker 1: huge vertical and it's gonna have a huge talent because
Speaker 1: the cannabinoids. But the people are gonna find in the
Speaker 1: wellness attributes between makeup between consumer goods, industrial hemp and
Speaker 1: farming hemp, creet plastic composites. I mean, the I think
Speaker 1: what's gonna surprise people the most about this industry as
Speaker 1: it starts to evolve. Is is not gonna be any
Speaker 1: There's not there's not gonna be any sector that's not
Speaker 1: touched by this. It's gonna it's gonna touch every sector
Speaker 1: of society. So part of the pun. But this is
Speaker 1: a fairly sober approach to investing in a very specific
Speaker 1: sector that has yet to really gain broad acceptance amongst
Speaker 1: the investment and this is how we're approaching it. So
Speaker 1: we have exposure in Australia and Canada, in the US,
Speaker 1: and in Israel and uh in Europe and in South America,
Speaker 1: and we're looking across ten verticals, which includes cultivation dispensaries,
Speaker 1: but certainly we think that's gonna migrate to drugs. From
Speaker 1: drugs from state dispensaries to medicine prescribed by doctors that's
Speaker 1: covered by insurance. Like in Germany right now, if you
Speaker 1: want cannabis in Germany, you go to your doctor, get
Speaker 1: a prescription, go to the pharmacy to get your cannabis,
Speaker 1: and submit the bill to your insurance company. That's it.
Speaker 1: It's covered. And we think that's the model. So we're
Speaker 1: but we're investing across biopharmaceuticals or the laboratory space that
Speaker 1: the extraction space, UH and certainly industrial have been farming.
Speaker 1: We think is going to be a pretty significant market
Speaker 1: for UH, for consumers. Your your portfolio. Is it all
Speaker 1: publicly traded companies? Are there any pre public any private
Speaker 1: or venture or how do you guys approach It's all
Speaker 1: publicly traded companies. And again, I've been looking for an
Speaker 1: advantageous risk reward in this space for a long time,
Speaker 1: and I kind of got caught up on if I
Speaker 1: found a really good private equity deal and it did
Speaker 1: very well, how am I going to demonstrate that income
Speaker 1: on my federal tax return? And I always sort of
Speaker 1: stumbled there, this is UH, this is different. We are investing,
Speaker 1: and we're not touching the plant. We're not moving a
Speaker 1: plant across eight lines. Were invested in publicly traded companies
Speaker 1: only that are listed on in exchange. And we're legitimately
Speaker 1: viewing this as a healthcare play. This is not an
Speaker 1: optics We're not trying to put a wolf in sheep's
Speaker 1: clothing here. We're passionate about this because we believe this
Speaker 1: is impact investing. And I keep reading about all this
Speaker 1: usage of CBDs as treatments for pets are we using
Speaker 1: our pets as no again, no pun intended guinea pigs.
Speaker 1: Or is there a legitimate reason that we're giving CBDs
Speaker 1: to two doves? And again it's an antipsychotic. I have
Speaker 1: a very nervous dog at home, and I give CBD
Speaker 1: two and it helps relax them. Uh. And again, anything
Speaker 1: that's alive, plants, fish, dogs, human beings all have an
Speaker 1: endocannabinoid system. And again this is frontier science. We are
Speaker 1: scratching the surface of what we understand here. And I'd
Speaker 1: like to you know, there are a lot of people
Speaker 1: out there who have been fighting long and hard to
Speaker 1: bring this to the four and it feels like we're
Speaker 1: right there. This is an election year, and if the
Speaker 1: Republicans don't take this issue off the table before November,
Speaker 1: they're gonna lose the election. We I've been speaking with
Speaker 1: Todd Harrison. He is the chief investment officer and founder
Speaker 1: of CB one Capital Partners, specializing in healthcare and cannabinoid
Speaker 1: medical products. Be sure and stick around for the podcast Actras,
Speaker 1: where we keep the tape running and continue discussing all
Speaker 1: things cannabinoids. You can find that at Bloomberg dot com,
Speaker 1: Apple iTunes, Overcast, wherever finer podcasts or soul. We love
Speaker 1: your comments, feedback and suggestions right to us at m
Speaker 1: IB podcast at Bloomberg dot net. Be sure and check
Speaker 1: out my daily column. You could see that on Bloomberg
Speaker 1: View dot com. Follow me on Twitter at Riolts. I'm
Speaker 1: Barry Hults. You're listening to Masters in Business on Bloomberg Radio.
Speaker 1: Welcome to the podcast, TATO. Thank you so much for
Speaker 1: doing this. I have been looking forward to having this
Speaker 1: conversation for a while, and I think this is a
Speaker 1: wildly undercovered section of not only the political issues. My
Speaker 1: libertarian friends are on the right side of this. Hey,
Speaker 1: if you don't think the government should tell you you
Speaker 1: can't you can drink or not, then why can they
Speaker 1: tell you you can? And I don't smoke weed is
Speaker 1: the funny part of it. But why should they tell
Speaker 1: you you can or can't? And um, I I just
Speaker 1: always looked at it as as a sort of odd
Speaker 1: um a sort of by the way, I'm not saying
Speaker 1: I never smoked, don't don't send me emails, um, but
Speaker 1: you know I've I found when I stopped smoking, I
Speaker 1: suddenly became a whole lot more productive. But that's just
Speaker 1: my experience. You talk libertarian governor. Governor Gary Johnson's on
Speaker 1: our board along with Dr Ethan Russo, Dr Julie Holland,
Speaker 1: Dave Charnick, and Warren Gertner, who we're proud of that
Speaker 1: board because these are people who get asked a lot
Speaker 1: to get involved in. Certainly in this space is a massive,
Speaker 1: massive credibility chasm. So what we found is that the
Speaker 1: people who know what's going on, who have the integrity
Speaker 1: and the authenticity and mission uh, they all know each other.
Speaker 1: So it's been a very good network for us to
Speaker 1: tap into because there's a lot of good people doing
Speaker 1: a lot of good work, and there's a lot of
Speaker 1: bad people doing a lot of shady things. Out of
Speaker 1: the Out of the five hundred or so publicly traded
Speaker 1: cannabis stocks we found it, there's that many five hundred
Speaker 1: and about fifty to sixty maybe or legit of which
Speaker 1: we'll ow about half of that depending on time or price.
Speaker 1: But it's really it's really we're talking about the nascent industry.
Speaker 1: And again that's why we think the by building is
Speaker 1: going to be so pervasive, because people are gonna have
Speaker 1: to get involved in your spirit company. You have to
Speaker 1: get involved in your tobacco company, you have to get
Speaker 1: involved your healthcare company, if your consumer goods company. This
Speaker 1: is all happening sequentially. So fifty out of five hundred,
Speaker 1: right in line with Sturgeons law, famous Theodore Sturgeon, famous
Speaker 1: science fiction writer, defending science fiction when someone called it
Speaker 1: crap quote unquote, and he said, yeah, science fiction is crap.
Speaker 1: But then again, ninety percent of everything is craped. And
Speaker 1: and here here it is, so fifty companies out of
Speaker 1: five hundred. Um, is there any chance that this gets
Speaker 1: co opted by the large farmer companies, just gets taken
Speaker 1: over and these innovative, little small companies get pushed aside?
Speaker 1: Or is it going to be more like the biotech
Speaker 1: model where these small, innovative, nimble companies find new molecules,
Speaker 1: new way of processing, new applications, and eventually they get
Speaker 1: bought or or merged with some of the big guys.
Speaker 1: I think the answer is yes. I think you're going
Speaker 1: to see all of the above. Um. And again, Uh,
Speaker 1: the expertise necessary, especially when you start talking about the
Speaker 1: science and the endocannabinuting system and the compounds. This is
Speaker 1: not something that you can pick up, you know, over
Speaker 1: the course of a couple of weeks or a couple
Speaker 1: of months. This is something you have to go acquire.
Speaker 1: And that's why a lot of these companies, in our opinion,
Speaker 1: are going to be taken out as this becomes more
Speaker 1: adopted and more accepted across not only state lines, but
Speaker 1: international lines. And we're seeing that wave theory of sorts sweeping.
Speaker 1: When New Jersey's governor was elected saying they was gonna
Speaker 1: legalize within a hundred days, I said to my partners,
Speaker 1: how long do you think before Cuomo uh softens his stance,
Speaker 1: And sure enough, the next day he came out uh
Speaker 1: and and he said he was open to learning more.
Speaker 1: Governors do not want to see tax revenue for sure
Speaker 1: going to their neighbors. It's just not gonna happen. And
Speaker 1: when we talk about tax revenue, it's it's a double
Speaker 1: edged sword because on the one hand, we spend literally
Speaker 1: tens of billions of dollars a year keeping an enormous
Speaker 1: number of people in prisons. And there's a whole another
Speaker 1: conversation to have about, Hey, you and I, a couple
Speaker 1: of white guys from Long Island get pulled over with
Speaker 1: the joint in our car. The cop is gonna say,
Speaker 1: all right, you idiots, try not to do this again.
Speaker 1: But if we're two people of color and get queens,
Speaker 1: we go to jail. That's exactly right. It's called in
Speaker 1: the courts is clogging the systems, and it's just not right,
Speaker 1: you know. But you talk about follow the money. B
Speaker 1: DS Analytics came out with the number and said that
Speaker 1: the industry owed billion dollars in state taxes in two
Speaker 1: thousand sixteen and another one point four billion in two
Speaker 1: thousand seventeen, and that it would save medicaid another billion
Speaker 1: on top of that. So all of these billions are
Speaker 1: starting to add up. And you know, the total market
Speaker 1: right now, we figure private and public, we've cuffed it
Speaker 1: around seventy five billion. That's got a lot of rooms.
Speaker 1: Is just medical message, just legal. This is just legal
Speaker 1: tradeable investable assets right now. But again, you're talking about
Speaker 1: about a three three twenty billion dollar global market before
Speaker 1: before you start seeing these end products start to start
Speaker 1: to show up, what you're gonna see because when people
Speaker 1: understand that this is not a bad thing, this is
Speaker 1: not a gateway drug, this is actually an opioid terminus. Right,
Speaker 1: We talked about the mortality rate and a decrease decrease
Speaker 1: dates where where it's friendly to cannaboids and cannabinoids. Uh.
Speaker 1: And there's a heavy opioid problem. That's right, and that's just.
Speaker 1: And this is a bit of a blessing. You hate
Speaker 1: to find pleasure in somebody else's pain, but this is
Speaker 1: a bit of a blessing for uh, this science because
Speaker 1: it's pushing the conversation to the four. But then you
Speaker 1: have pain, and you have psychological relaxation, all of the
Speaker 1: mental issues, which people say, Okay, I can see it
Speaker 1: for that, But what people aren't prepared for is this
Speaker 1: killing cancer cells? Is this so let me let's say
Speaker 1: this one by one. Cannabinoids kill cancer cells. GW Pharmaceuticals,
Speaker 1: which again we own UH in two In February of
Speaker 1: two thousand seventeen, they had their face too much studies,
Speaker 1: which is brain cancer. The primary endpoints were terrific. They
Speaker 1: couldn't release secondary end points, which is overall survival because
Speaker 1: quote too many people were still surviving. They said, we
Speaker 1: expect to have that information in the coming weeks to months.
Speaker 1: That was fifteen months ago now, so we think that
Speaker 1: that information is actually gonna come out this summer at ASCO.
Speaker 1: We're hoping, but we's gonna show pretty demonstrative efficacy against
Speaker 1: brain cancer, which is one of the if not the
Speaker 1: most most aggressive forms of cancer. Uh. And there's a
Speaker 1: lot of a lot of that's about this is there's
Speaker 1: a lot there's a lot of anecdotal science. We talk
Speaker 1: about clinical validation anecdotal or is it science, Well, there's
Speaker 1: a lot of anecdotal information because it's been illegal to
Speaker 1: test this, right, So we talk about clinical validation because
Speaker 1: let's be honest, like, let's take those those those onerous
Speaker 1: indications out of the equation. People have been using cannabis
Speaker 1: to self medicate for I mean back eight thousand BC.
Speaker 1: I mean we're talking ten thousand years now. This has
Speaker 1: been you know, this has been in existence, So staying power, right,
Speaker 1: But it's not just for what people would think it's for.
Speaker 1: There's a lot more here that science is going to
Speaker 1: demonstrate going forward. Why can um pharmaceutical companies in the
Speaker 1: United States or any medical schools or whoever wants to
Speaker 1: do research, Why can't we do research on cannabinoids and
Speaker 1: and marijuana ask Jeff's sessions. That's a good question. It's
Speaker 1: a schedule one narcotic right up there with the worst
Speaker 1: of the worst herold But but we research heroin and
Speaker 1: we research other stuff. Why we precluded from doing medical research?
Speaker 1: Is there a law that prevents that you just can't
Speaker 1: obtain There's a multibillion dollar pharmaceutical lobby that prevents that
Speaker 1: because they've been wanting the pockets of the politicians to
Speaker 1: really repress this. And then you know, you look at
Speaker 1: me like, is that conspiracy theory? That's not listen. That's
Speaker 1: why is the United States played twice as much for
Speaker 1: a medical care as any other country in the world.
Speaker 1: So it's not a big leap to say, oh, and
Speaker 1: by the way, they're repressing this. But we'll come back
Speaker 1: in a couple of years. I will tell you, you'll
Speaker 1: say that health care disruption conversation we had with spot
Speaker 1: spot on. So let me ask you. I am not
Speaker 1: a big believer in forecasts or predictions, but let me
Speaker 1: ask you a prediction. Um, And I know this is
Speaker 1: way outside of your expertise, but I'm just curious as
Speaker 1: to your views. Since you're putting hard capital, including your
Speaker 1: own money, at risk. When does the United States decriminalize
Speaker 1: marijuana for medical purposes? Across the whole country. And then
Speaker 1: when does it just become like alcohol and other drugs
Speaker 1: sold to add else like alcohol and tobacco, another drug
Speaker 1: salt adults over the counter with just a driver's license. Well,
Speaker 1: I do still believe it's going to be this year's business,
Speaker 1: even if it's framed as a state's rights issues, which
Speaker 1: it is also a states right Stuey. The way everybody
Speaker 1: who talks about states rights is wild hypocrite. They'll use
Speaker 1: it to let something goes in their way, but then
Speaker 1: something goes against them and suddenly states rights no matter.
Speaker 1: So I've always found that argument to be so disingenuous
Speaker 1: from most people, um, including myself. You know, I do
Speaker 1: think the motivation is political, al right, because this is
Speaker 1: this is going to be a Democrat, a Democratic issue,
Speaker 1: blue wave this this is gonna be a blue wave issue,
Speaker 1: if that's for sure. And you saw McConnell, you saw
Speaker 1: a banner, you saw Trump. And they're trying to very intelligently,
Speaker 1: i might say, trying to remove this issue before the
Speaker 1: midterms get here, and I think they have to. So
Speaker 1: that's on allowing that's allowing the states to make their
Speaker 1: own decisions in the states so just in other words,
Speaker 1: remove the federal so it's no longer class one narcotic.
Speaker 1: You remove the federal government from the conversation and just
Speaker 1: let the states to make their own. And I think
Speaker 1: equally important we'll see this year's is banking reform. That
Speaker 1: was the next question I was about to ask you,
Speaker 1: because literally you go to Colorado or are Gone and
Speaker 1: there's one local community bank. You can't JP Morgan Welles,
Speaker 1: far Ago City Bank. None of these companies can do
Speaker 1: it because they want to have access to the federal
Speaker 1: reserve and they operate across state lines. So the role
Speaker 1: terrified to do and Nutan has already said this as
Speaker 1: a priority for him. I mean, people walking out with
Speaker 1: bags of cash is not sustainable. Supposedly, these black ops
Speaker 1: guys are huge because they're making these hundred thousand allar
Speaker 1: cash drops every day and it's just, you know, not
Speaker 1: not a smart way to to manage business. So you
Speaker 1: think in there will be some reform that will allow um,
Speaker 1: these things to be banked, so you could pay with
Speaker 1: a credit card, you can deposit, uh, they'll be able
Speaker 1: to deposit money directly into a major bank. That this
Speaker 1: is gonna go completely legitimate, I think so, you know,
Speaker 1: I mean, listen, it's speculate at this point given the environment.
Speaker 1: But you know, look at what's happening north of the border.
Speaker 1: You have Bank of Montreal now entering the space, I mean,
Speaker 1: the biggest of the big you know, this becomes right BMO.
Speaker 1: And as a is there any business you know, when
Speaker 1: you see a new revenue source, you're going to, you know,
Speaker 1: look to capture it. But the government has to get
Speaker 1: out of the way on this. This is the horses
Speaker 1: are out of the barn. The patients aren't giving back
Speaker 1: their medicine, the states aren't giving back their tax revenue,
Speaker 1: and the people are giving back their jobs. So if
Speaker 1: you have to make a bet ten years from now,
Speaker 1: blockchain or cannabinoid which is bigger? Why I am making
Speaker 1: a bet um And I think I think cannabinoid wellness
Speaker 1: is going to be massive because I think blockchain is
Speaker 1: going to have its own role and I think I've
Speaker 1: always been a fan of I know, this is sort
Speaker 1: of become the the popular narrative now I'm a big
Speaker 1: fan of blockchain more so than trying to speculate which
Speaker 1: currency because I don't know, but cannabiniated wellness is healthcare, right,
Speaker 1: This is better care with less side effects. Uh. And
Speaker 1: when people understand that of cannabinoids are non euphork and
Speaker 1: they're all good for you in different ways. And you
Speaker 1: can target receptors. And my partner hates when I use
Speaker 1: this analogy, but it's a little crude. But rather than
Speaker 1: the Western medicine of taking a pill and hoping it
Speaker 1: gets to where it needs to go, you can actually
Speaker 1: target receptors in different parts of your body as a
Speaker 1: retrograde pathway. I mean, this is this is really powerful
Speaker 1: science here and it's just on the cusp of coming through.
Speaker 1: So I have two demographics I have to ask you about. First,
Speaker 1: we we have sixty baby boomers retiring each day. The
Speaker 1: population in the United States is aging. What do the
Speaker 1: cannabinoid group of um compounds and molecules, what do they
Speaker 1: mean for the healthcare of the elderly? Yep, it's the
Speaker 1: it's actually that that's our that's our focus market. That's
Speaker 1: why Florida is such a big focus for us because
Speaker 1: the elderly obviously take the most medication. But interestingly, the
Speaker 1: older you get, the better this is for you. If
Speaker 1: you think about how your body stops producing endocannabinoids as
Speaker 1: a function of diet, exercise, and heredity over the course
Speaker 1: of time. What we've heard all of these scientists and
Speaker 1: genealogists talk about is an endocannabinoid depression. Right, our endocannabinoid
Speaker 1: system is just it's just withered up and died at
Speaker 1: a certain age. As we get older, the cannabinoids identical
Speaker 1: in action to what our bodies are supposed to produce,
Speaker 1: but stop producing. If you ever saw have you ever
Speaker 1: seen the elderly and just cannabis, they light up right
Speaker 1: and forget like the no pun intended. But here's the
Speaker 1: here's the part that's interesting. I'm not a doctor, but
Speaker 1: what's demensia? Dementia is the degradation of the mind. Right,
Speaker 1: your mind fails your you know, it becomes decrepit. What
Speaker 1: what does THHC do? It stimulates brain cell activity. So
Speaker 1: again that is that a medical uh, but I'm just
Speaker 1: it's an intuitive one, you know, coma the same one.
Speaker 1: It opens very specific, right, that's a very specific pressure
Speaker 1: on the back of the odde, which is why your
Speaker 1: eyes get read because the capillaries and large as the
Speaker 1: as the t as the end, as the cannabinoids take effect.
Speaker 1: So and then the second UM demographic. I have to
Speaker 1: ask UM for partially selfish reasons, because my office we
Speaker 1: have a significant number of veterans we've hired, and that
Speaker 1: group has an enormously disproportionate amount of medical issues, including depression,
Speaker 1: and there's some sixteen suicides a day. Not all veterans,
Speaker 1: but a high number of veterans are in that group.
Speaker 1: What what can cannabinoids do for that? That group of
Speaker 1: people coming back with PTSD, coming back missing limbs, coming
Speaker 1: back with all sorts of permanent pain and ongoing trauma.
Speaker 1: What could this do for that? Here's the difference between
Speaker 1: opioids and cannabinoids. You have opioid receptors in your brainstem, right.
Speaker 1: Your brain stem controls your lungs and your breathing, right,
Speaker 1: That's why people overdose from opioids. You have very, very
Speaker 1: scarce endocannabinoid receptors in your brainstem. That's why nobody's ever
Speaker 1: died from cannabis. So right there, you're talking about pain
Speaker 1: relief or or emotion in a relief without the possibility
Speaker 1: of death, much lower risk type of medication. Clearly, the
Speaker 1: adverse effect profile is is to monstrably be better for
Speaker 1: starters that. That's quite that's quite interesting. You're very comfortable
Speaker 1: speaking in public, but you weren't always very comfortable peaking
Speaker 1: speaking in public. We want to have a conversation about that.
Speaker 1: You said, everything's on the table. Sure. Do you remember
Speaker 1: you and I doing an episode of Dylan MSNBC show. Dude,
Speaker 1: you were Albert Brooks on Broadcast News. I listen. I
Speaker 1: think it was one of the best lines ever. Verse
Speaker 1: said on TV. If we don't stop being Democrats and
Speaker 1: don't stop being Republicans and we start being Americans, this
Speaker 1: thing is just gonna fester. And what happened, it's festered?
Speaker 1: It well there, that was almost a decade ago, and
Speaker 1: you're right, it did fester. But what I'm bringing up
Speaker 1: is not that we got off the set and you
Speaker 1: were drenched. I'm bringing up you're so much more comfortable
Speaker 1: discussing this than you were talking about out whatever we
Speaker 1: were talking about. Is it just you've gotten used to
Speaker 1: this or is it you're just so enthusiastic about the
Speaker 1: subject that whatever. Butterflies just well, I'll tell you this.
Speaker 1: I've you know, and some people will maybe disagree with this,
Speaker 1: but I've never really been interested in doing the whole
Speaker 1: media thing. And I did it for a long time
Speaker 1: at Minnonville because I felt like obligatory. It was part
Speaker 1: of the part of the just to get more sort
Speaker 1: of page views and clicks. And it's also see from
Speaker 1: everything we've talked about, writing is a way to distill
Speaker 1: what you think and being able to share your perspective.
Speaker 1: I've always looked at it as at first of all,
Speaker 1: it's fun too. I started doing Cudl and Cramer two
Speaker 1: thousand three, it was they were fun to have the
Speaker 1: conversation with. You got to help shape the debate. Especially
Speaker 1: they really weren't a lot of people talking about subprime
Speaker 1: housing and derivatives and and c d os. Prior to
Speaker 1: the were on the money for Nothing Federal Reserve by documentary,
Speaker 1: you and I both were, and and there were very
Speaker 1: few people talking to that and just being able to
Speaker 1: move that debate forward. I especially when you say I've
Speaker 1: seen something that's unique, no one else is talking about it.
Speaker 1: I want to have this discussion. You seem to be
Speaker 1: doing that same thing with with the cannabinoids today. It's
Speaker 1: the parallel to two thousand and six seven, maybe even
Speaker 1: two thousand five six seven before the market. Well, I
Speaker 1: think I think that's just there. I mean, I've always
Speaker 1: been somebody that needs a purpose. I need a purpose
Speaker 1: to get up in the morning. I need to be
Speaker 1: passionate about what I do. And it hasn't always been
Speaker 1: that way. And I think for a long time, you know,
Speaker 1: when the writing was on the wall with Minonville, and
Speaker 1: I still was, you know, sort of you know, going
Speaker 1: through the motions because I had that sense of duty
Speaker 1: to finish that thing. Uh, it lost a lot of
Speaker 1: its passion, a lot of its spontaneity, a lot of
Speaker 1: its enthusiasm. This to me, this to me is powerful. Right.
Speaker 1: I've seen the parents, I've talked to the parents, I've
Speaker 1: this is the stories. The stories are hard break. I
Speaker 1: was sitting there watching them speak at the g W
Speaker 1: Expert panel when I was swelling up. Watch I have
Speaker 1: a little girl at home. I have three kids at home.
Speaker 1: You know, any parent is going to see that, and
Speaker 1: really it's gonna hit home with my kids disease and
Speaker 1: you're not letting They're going. There are kids I have
Speaker 1: to run over with a steam roll. There are kids
Speaker 1: going from three hundred seizures a day to two a month, right,
Speaker 1: And they're saying that this is illegal and they have
Speaker 1: to run from the fees. They have to move to
Speaker 1: Colorado to get there. It's criminal. This is the time
Speaker 1: has come for this issue. And and what's why we're
Speaker 1: passionate is because people are so off sides here. They
Speaker 1: think this is a gateway drug. Yes, it is a
Speaker 1: gateway drug. It's a gateway off of opioids, right, But
Speaker 1: it's also a wellness play and that's what people are missing.
Speaker 1: They think of Cheech and Chong. Even still, you said
Speaker 1: to me just before during a break, you know, maybe
Speaker 1: do you have any samples with you? As a joke,
Speaker 1: but we hear that all the time. People think this
Speaker 1: is about getting high. The more people who think this
Speaker 1: is about getting high, the war of an opportunity is
Speaker 1: for the wellness strategy because people are looking on the
Speaker 1: wrong side of the pipe. I mean, it's but it
Speaker 1: really is true. I'm assed on us. By the way,
Speaker 1: there's a bunch of stuff I have to nobody's talking
Speaker 1: about this, nobody's married the science in the strategy. It's
Speaker 1: it's so amazingly clear that this is a wildly undercovered space.
Speaker 1: It's shocking. Um. So we have an office in Portland, Oregon,
Speaker 1: and when we're out there. The first time we were
Speaker 1: out there, I said, uh to our employee Joey, I've
Speaker 1: never been in a wheed shop. You gotta take me.
Speaker 1: And it was the craziest experience. First, like there's a
Speaker 1: they buzz you in and this door slams behind you
Speaker 1: like you're in a vault. And then you have to
Speaker 1: show I D and they photo I D. And then
Speaker 1: they take you to the next thing. And it's sort
Speaker 1: of like the Starbucks of weed. They are all these
Speaker 1: different things and the you know, the mellow caramel flavor.
Speaker 1: And I'm right, well, there's different, strange, different cannabinoids. Everybody
Speaker 1: has the same same coffee slash, wine slash. There is
Speaker 1: a certain type of um obsessive deep dives in a
Speaker 1: own a file type of I'm drawing the blank. People
Speaker 1: are passionate about their cannabis. I mean not just from
Speaker 1: a wellness standpoint, but again, I think I think from
Speaker 1: a semantics and lexicon craft beer is probably the best
Speaker 1: parallel I could come up with. Their Like I like this,
Speaker 1: I don't like hops. I like a white beer, and
Speaker 1: it's the same sort of uh is this Indica is
Speaker 1: it's sativa. What's the the depth of enthusiasm is really
Speaker 1: But but I'll say this though, just because I think
Speaker 1: it's important. I was at a Wall Street dinner a
Speaker 1: few months back, uh, and they were talking about cannabis
Speaker 1: and framing it as a discretionary vice, framing it as beer.
Speaker 1: That's my frame of reference, right, that's most people's frame
Speaker 1: of reference for this, But it's in our opinion it's
Speaker 1: off base because this is, well, again, it's not all medical.
Speaker 1: I think a lot of its semantics people it's self medicated.
Speaker 1: And certainly there's a contingent that does this recreationally or
Speaker 1: is it's called it don't use, but I certainly think
Speaker 1: that's there's there's blurredlines that people who believe that they're
Speaker 1: they're doing this recreationally, but really they're self met acicating
Speaker 1: in a way that maybe they don't realize. I remember,
Speaker 1: I know you, well, I know Jim Cramer. Well, I
Speaker 1: read the first book, Confessions of a Street Addict. The
Speaker 1: one aspect of that book that stayed with me was
Speaker 1: Kramer taking a keyboard and smashing it and literally there's
Speaker 1: somebody is signed to before the keys stopped dancing across
Speaker 1: the desk. Someone has to walk into the closet, get
Speaker 1: a box from a stack of keyboards, come back, plug
Speaker 1: it in. So he's ready to trade. Literally the keys
Speaker 1: haven't even stopped moving. And there's another Is that an
Speaker 1: exaggeration or is that a fairly accurate occasional occurrence. It
Speaker 1: was the best of times, it was the worst of times.
Speaker 1: But again I owe Jim a great deal of of
Speaker 1: debt for, you know, really being kind to me. You know,
Speaker 1: my father as as an example, when I was this
Speaker 1: is why two K we're in the middle of a
Speaker 1: y two K. I don't know how else to put it,
Speaker 1: you know, fifteen points wing things in a day, and
Speaker 1: you know, I got a call my father, who I
Speaker 1: hadn't talked to him many years was uh in a
Speaker 1: in a jail and MAUI uh. You know it was
Speaker 1: really like emotional sort of like. And Jim turned in
Speaker 1: the middle of the trading day, gets off the desk
Speaker 1: and he calls up his people in in Hawaii and
Speaker 1: gets an attorney and says, go, we'll take care of everything.
Speaker 1: I mean, these are things that people don't know about
Speaker 1: Jim's how kind he is when nobody's looking. And I think, uh,
Speaker 1: I think the rest of it. You know, he's a
Speaker 1: passionate guy. You know, he he hates to lose. But
Speaker 1: if you're his friend, will do anything for you. If
Speaker 1: you're his enemy, like I still appear to be, I guess, uh,
Speaker 1: you know you're persona on ge. So so the thing,
Speaker 1: I've always been amazed by Cramer. So people have told
Speaker 1: me I don't have much of a filter, and that's
Speaker 1: sort of true. I guess I have to cop to that.
Speaker 1: But Jim literally, like whatever voice instide your head that
Speaker 1: says you shouldn't say that, he is completely filterless. You
Speaker 1: you've never and anyone who's never spent time with him,
Speaker 1: for for good and for bad, no one in the
Speaker 1: universe is more honest. There's zero filter. There's just nothing between. Hey,
Speaker 1: maybe I should hedge this a little bit. Maybe I
Speaker 1: should put a little maybe I should make this a
Speaker 1: little white lie, put it pretty it up. That filter
Speaker 1: is congenerally not there. And that's what makes him such
Speaker 1: a unique and fascinating individual. Because say what you will
Speaker 1: about him, you know you're not getting spun by him.
Speaker 1: He is telling you exactly what he thinks. I don't
Speaker 1: know how else to describe that. I think I think
Speaker 1: Bill Flecknstein said it best. Sometimes right, sometimes wrong, always honest.
Speaker 1: I mean, you're getting that, You're getting you're getting the truth.
Speaker 1: And I think there's something to be said for that.
Speaker 1: And it's a shame you guys had your falling out.
Speaker 1: He he seemed to feel that you, uh, you stuck
Speaker 1: a knife in his back. You just had enough of
Speaker 1: what you were doing and moved on. Yeah. No, And
Speaker 1: this is sort of the you know, this is I
Speaker 1: guess my cross to bear. But you know, after after
Speaker 1: nine eleven, I had my own issues and I wanted
Speaker 1: to do some thing meaningful and and kind of strike
Speaker 1: out on my own. And you know, having I was
Speaker 1: a writer on the street dot com and I was
Speaker 1: at the time president of his hedge funds, So I
Speaker 1: understand sort of the animus of of me leaving and
Speaker 1: doing my own thing. But you know, again, things were
Speaker 1: said and done, and certainly on my part that I
Speaker 1: take full responsibility for. But you know, life's too short
Speaker 1: to kind of hold these things going from I've I've
Speaker 1: always thought you've had a very healthy attitude, not only
Speaker 1: about stuff like this, but about money and the pursuit
Speaker 1: of it. And understanding it's just a tool, and I
Speaker 1: fits your whole life their promise. I mean, listen, Manyonville.
Speaker 1: You know when you know Manyville still, did that really
Speaker 1: push your two million dollars? It costs me twenty two
Speaker 1: million on paper? Well, I mean in actually yeah, I
Speaker 1: put a few million in, but I put fifteen years
Speaker 1: in my life and and and every part of my
Speaker 1: body and soul and purpose into it. So you know,
Speaker 1: it was like losing a child. And you know, I
Speaker 1: say losing Listen, the digital media model broke. You know,
Speaker 1: I got in, I said, I literally wrote an article
Speaker 1: said the digital media model is broken, you know, and
Speaker 1: I'm putting this up for saying. And we sold some
Speaker 1: of it, which was you know, the proceeds were used
Speaker 1: to pay back everybody that was owed money, uh, for
Speaker 1: the most part. And you know, certainly I have the
Speaker 1: uh you know, it's still up you know, I have
Speaker 1: the I have the the archives are still there, everything there,
Speaker 1: and you know it's still up there. So you know,
Speaker 1: in the back of my mind, I sort of think
Speaker 1: that maybe a revival one day, But you know, I
Speaker 1: think part of it also is there's a lot of
Speaker 1: very good lessons in there. There's a lot of good
Speaker 1: content and and really it was a real time assimilation
Speaker 1: of probably the most interesting fifteen years in financial history.
Speaker 1: So through that lens, I mean from Y two k
Speaker 1: to uh, you know, to two thousand and call it fifteen.
Speaker 1: You're you're talking about a lot of changes in the
Speaker 1: financial Well, you haven't seen the next fifteen years, and
Speaker 1: I have just sneaking suspicion it's going to be, uh,
Speaker 1: perhaps just as interesting. All right, So let me get
Speaker 1: to my favorite questions. These are the things I ask
Speaker 1: all my guests, and I found that they are both
Speaker 1: fun and intriguing and revealing. Um and a lot of
Speaker 1: these have come from listeners, so I've I can't take
Speaker 1: full credit for alities. So let's jump right into this.
Speaker 1: Tell us the most important thing people don't know about
Speaker 1: your background? I think there's a lot of there's a
Speaker 1: lot that people don't know. But you were, you were
Speaker 1: starting forward at Syracuse right now, what what do people know?
Speaker 1: What give us? I think it's, you know, I think
Speaker 1: it's really, if anything, it's the fact that it's just
Speaker 1: you know, I've been working since I'm thirteen years old,
Speaker 1: and you know, from from working in a bagel shop
Speaker 1: of turning bagels at thirteen at five o'clock in the
Speaker 1: morning on a Saturday too. You know when I lived
Speaker 1: in California for high school and going out to see
Speaker 1: me Valley and picking weeds for fifty dollars a day,
Speaker 1: picking what I'm picking weeds out of a field like
Speaker 1: literally like literally reading for fifty dollars. First, I keep
Speaker 1: hearing subconscious weed references. I understand that about Malle in California,
Speaker 1: Alle like everything has a menial labor, my point being,
Speaker 1: you know, backbreaking labor. Yeah, but I think it's the
Speaker 1: best thing that ever happened to me. You know, when
Speaker 1: I was a young kid, my mom said, if you
Speaker 1: want money, to get a job, and it stuck with
Speaker 1: me because we didn't grow up with money. We lived
Speaker 1: on the other side of the tracks, and I always
Speaker 1: wanted to be the guy with the money. And it
Speaker 1: taught me at a very early age if you wanted something,
Speaker 1: you better put the work and makes sense. Tell us
Speaker 1: about your early mentors, Who who goded your career? Who
Speaker 1: do you who did you take a lot of lessons from? Well,
Speaker 1: I gotta say in early when I started at Morgan Stanley,
Speaker 1: there were a few people there. Jack Skiba, Uh, you
Speaker 1: know I would come in at five five thirty in
Speaker 1: the morning and right up the tea accounts and write
Speaker 1: up the point and figure charts. And uh certainly Jack
Speaker 1: was was a meaningful purpose person in my development. Tommy Cardon,
Speaker 1: David Slain, these are people who were there early and
Speaker 1: and they didn't really care about anything other than seeing
Speaker 1: me succeed. And I think that's uh something to be
Speaker 1: said for that. People don't realize what those desks were
Speaker 1: like back in the desk. I had friends on on
Speaker 1: the Meryld desk, Um, I knew other people on other
Speaker 1: That was a big family, wasn't it. Yeah, it was.
Speaker 1: You know when I was Stanley, we were you know,
Speaker 1: we used to put on our hats and go to
Speaker 1: war against Goldman sacks every day. I mean it was
Speaker 1: Morgan and Goldman a right, So we were We took
Speaker 1: that seriously and we would go out there and try
Speaker 1: to get all the customer business we could and try
Speaker 1: to trade out trade these guys who remember back then
Speaker 1: there were no tape lines. You know, your name was
Speaker 1: your word. If you wait, if you picked up a
Speaker 1: phone and made a trade, you're bound by your own
Speaker 1: you know, yeah, and that's it. But it worked for
Speaker 1: a long time until until it didn't. I guess. So
Speaker 1: what traders influenced your approach to either trading or invest in.
Speaker 1: You know, I've always had a respect for Peter Lynch
Speaker 1: and and the obvious, uh, the obvious reason would be,
Speaker 1: you know, getting to know your investment and really believing
Speaker 1: in your investment and having a stake in your investment.
Speaker 1: But I also like the fact that he was that
Speaker 1: you know, he adapted his style to the market. And
Speaker 1: there are a lot of different markets. You know. There
Speaker 1: are times when you want to you know, fade the
Speaker 1: market and trade around the core. There are times you
Speaker 1: want to hit it to quit it. There are times
Speaker 1: you want to you know, uh, invest for the long
Speaker 1: haul and trade uh, you know, against it. And I
Speaker 1: always admired Peter Lynch for having the ability to sort of,
Speaker 1: uh to adjust his style to the type of market
Speaker 1: that he was in hit it to quit it, which
Speaker 1: is a phrase I love. And most of my young
Speaker 1: colleagues have no idea who James Brown is. Um hit
Speaker 1: it then quit it. Um. Let's talk about everybody's favorite question.
Speaker 1: Tell us about some of your books that you like
Speaker 1: best Um when I mentioned the book you wrote, But
Speaker 1: what do you read for fun? What do you read?
Speaker 1: Uh for finance? Fiction, nonfiction? Tell us what you enjoy well.
Speaker 1: I think from a book standpoint man Search for Meaning
Speaker 1: by Victor Frankel is probably the most powerful book I
Speaker 1: ever read UM, and I strongly suggest it if you
Speaker 1: haven't read it. But you know, I'll tell you. Given
Speaker 1: where we are right now, I'm reading NonStop, but I'm
Speaker 1: reading about clinical trials, and I'm reading about research studies,
Speaker 1: and I'm reading about everything that's happening around the world.
Speaker 1: In Connabinoid own this that people don't get. So we're
Speaker 1: actually to that end. We're building ACB one capital. We
Speaker 1: had our website, we're building a research repository that should
Speaker 1: be up this week so you'll be able to go
Speaker 1: in by indication, whether it's cancer, pain, epilepsy, and be
Speaker 1: able to access all of the research that we've been
Speaker 1: reading because we want to share this with people. We
Speaker 1: want people to understand what's going on here. Have you
Speaker 1: plowed through any UM book on health and wellness that
Speaker 1: really stood out with you, Because I know you've read
Speaker 1: a ton of that stuff. They all kind of blur together.
Speaker 1: In my mind, anything that stands out well. You know,
Speaker 1: Dr Julie Holland, who's on our advisory board, has written
Speaker 1: some terrific books. The Pop Book is one of them.
Speaker 1: She's also done great work with M D m A
Speaker 1: and depression, which I think is probably on the horizon.
Speaker 1: Is the next like, oh my gosh, is that really medicine?
Speaker 1: Uh So, there's a lot being done for particularly for veterans,
Speaker 1: for PTSD and things of that nature. But she's certainly
Speaker 1: the first step that I were taken in learning. Normally
Speaker 1: at this point, I would ask you what are you
Speaker 1: most excited about today? But I don't think I even
Speaker 1: have to ask that. I've never been this excited. I
Speaker 1: think this is the best risk a war that I've
Speaker 1: ever seen. And the next question is what's the next
Speaker 1: major shift that you see coming? But you've you've already
Speaker 1: answered that. Also, you think politically this is gonna be
Speaker 1: just the next domino we marge equality fell under Obama administration.
Speaker 1: You think this is gonna fall soon around. I think
Speaker 1: it has to. I mean, the world is not waiting
Speaker 1: for the US. This is an outside in global bull market,
Speaker 1: and we we are we are way behind and by
Speaker 1: our own doing right, but certainly not too late. We
Speaker 1: have this This is a great country. We have the
Speaker 1: resources and the intellect and you know, uh, you know,
Speaker 1: we talked about it. We have the capital, but we
Speaker 1: also have the human capital. Right. There's a lot of
Speaker 1: these kids who are coming up right now who don't
Speaker 1: know what to do, and and a lot of these
Speaker 1: uh industries that I think we grew up on I
Speaker 1: have changed so dramatically. I'll put Wall Street on the
Speaker 1: top of the list in terms of the way it
Speaker 1: used to be versus the way it is now. But
Speaker 1: I gotta tell you, like, I have kids, and I
Speaker 1: think I think cannabinoid wellness. Learned the science, right, there's
Speaker 1: gonna be such demand for people who understand this science.
Speaker 1: You're talking six figures out of the gate for your
Speaker 1: entire career. In my opinion, you just got to put
Speaker 1: the work and you gotta learn the science. So this
Speaker 1: is always an interesting question. Tell us about a time
Speaker 1: you failed and what you learned from the experience. How
Speaker 1: much time you have. I've got a lot of failures.
Speaker 1: I actually give us one that stood out that perhaps
Speaker 1: people could take a lesson from. Well, Um, I remember
Speaker 1: when I was at Morgan Stanley. I think this is
Speaker 1: about uh. I was what twenty four at the time, maybe, uh,
Speaker 1: And I was just coming into my own I just
Speaker 1: you know, and I never, I never was prepared for
Speaker 1: wife on a trading desk. I came out of Syracuse University.
Speaker 1: They gave me a black shoals model in a Wall
Speaker 1: Street journal and they're like, good luck, right, but none
Speaker 1: of that was applicable really, so having to teach myself
Speaker 1: the derivative business, and uh, certainly, UH stumbled more often
Speaker 1: than I would like to admit, but got to where
Speaker 1: I thought I was in a pretty good space. And uh,
Speaker 1: you know, one day we had a customer come in
Speaker 1: and the biggest bank trader on the street and wanted
Speaker 1: to buy first Interstate calls and you know it was
Speaker 1: an a it was a hundred and twenty stock. I
Speaker 1: think he was buying the eighty calls like forts in
Speaker 1: the money. And you know, we started buying him after
Speaker 1: the first five hundred, af the first thousand, after first
Speaker 1: two thousand, I said, what's going on? And he tells
Speaker 1: me a story that he thinks it's gonna get taken over,
Speaker 1: so right, so he ends up buying eight thousand calls,
Speaker 1: which at the time was position limit. I sold the
Speaker 1: most of them, and against that, I pretty much was
Speaker 1: long everything under the sun against this stock. It was
Speaker 1: gonna make a lot of money if this happened. And
Speaker 1: I also told a lot of my friends on the desk,
Speaker 1: you know, like you said, it was a very collegiate community.
Speaker 1: So I told everybody who would listen, this is where
Speaker 1: you want to be in this stock right now, and
Speaker 1: I'll never forget it was. It was about three fifty
Speaker 1: one afternoon and my sales trader, Kim dispec Nuk, said,
Speaker 1: how you making a letter I And I'm thinking to myself, cheese.
Speaker 1: You know he's position limit. I thought he knew that,
Speaker 1: and I showed him an offer and she said, no,
Speaker 1: I needed two sided market. He wants to sell them,
Speaker 1: so I try to get the story. I assumed the
Speaker 1: deal is off, and I bought the first five hundred
Speaker 1: and I got myself in shape, sold a lot. Bade
Speaker 1: him on the rest of it, which is a terrific
Speaker 1: bid at the time calls. I said, I'll you know,
Speaker 1: I'll bid you X for these, and I said it's
Speaker 1: a great bid, but we'll pick it up tomorrow. Morning,
Speaker 1: So right right, that was my thoughts. So the next morning,
Speaker 1: I come in early and I'm sitting there and and
Speaker 1: I'll never forget Bobby Groscoffer ran the banks on the
Speaker 1: on the listed side of Morgan Stanley runs up to
Speaker 1: me said, are you still involved letter I and I
Speaker 1: kind of looked at him. I said yeah, and he said, well,
Speaker 1: you're still long right And I said why, and yeah,
Speaker 1: I said, I can't tell you. And then sure enough,
Speaker 1: you know, fifteen minutes later, I went to the bathroom
Speaker 1: and I hear the just cheers on the trading four
Speaker 1: everybody's excited thing got taken over for like a hundred
Speaker 1: and eighty dollars or whatever it was. And Morgan Stanley
Speaker 1: was the banker, so I was restricted. I was probably done.
Speaker 1: I would have been up four or five million. I
Speaker 1: was down, you know something in the Severn figures, and
Speaker 1: I thought I was done. I was like, wow, you
Speaker 1: know which I thought I was done. I waited till
Speaker 1: the end of the day. I was last one there.
Speaker 1: My how much money came back from that trade to
Speaker 1: the firm because the guy, I have no idea, I know.
Speaker 1: And then then I had to execute agency and I
Speaker 1: had to error for hung I was and um, long
Speaker 1: story short, I got pulled in. My boss asked me
Speaker 1: what was going on? What happened? I told him, play
Speaker 1: by play what happened, and he said, he traded it right,
Speaker 1: That's exactly what you should know. How you should have
Speaker 1: handled it, you know, coming tomorrow to to fight and
Speaker 1: end up getting promoted that year was the youngest vice
Speaker 1: president of Morgan Stanley. But it really what it taught
Speaker 1: me was you have your process. You stay to your process.
Speaker 1: Sometimes it's gonna work, sometimes it's not gonna work. But
Speaker 1: if you stay true to your process over the course
Speaker 1: of time, it's gonna work out pretty well. There's nothing
Speaker 1: more nunciating that then sensation when you have a giant
Speaker 1: position and suddenly you realize, oh my god, this is
Speaker 1: just going time. I'm sweating. I'm sweating talking about it.
Speaker 1: Like I remember that I have a pretty iron constitution
Speaker 1: my gut. I can eat anything, as you know, but
Speaker 1: I just remember that sinking feeling and the pity of
Speaker 1: stomach business breakfast, here comes Eric comes and uh god,
Speaker 1: you had to you had to look at that and
Speaker 1: go five. Yeah, But I mean listen, when we were
Speaker 1: at Kramer Berker, which you know a few years later
Speaker 1: we were having thirty million dollar swings in a day,
Speaker 1: up or down. We're both ways well. Kramer tells the
Speaker 1: story of being on was it the Asian contagion and
Speaker 1: he's on the beach getting shell lacked the markets up
Speaker 1: that year, He's down fIF from the beach. His then wife,
Speaker 1: who he called the trading goddess, picked up the phone
Speaker 1: and literally said by del Baya, who by went down
Speaker 1: the whole list and basically in a bikini from the beach,
Speaker 1: saved their year. True, more or less, I wasn't there
Speaker 1: for that. It's definitely in one of his it was
Speaker 1: they were interesting times the turn of the century. They were.
Speaker 1: They were certainly interesting times, something I'll never forget. And I,
Speaker 1: you know, we didn't talk about in in two thousand,
Speaker 1: so I was lightly bearished. Then nobody knew who the
Speaker 1: hell I was. So no matter how barrassed I was,
Speaker 1: it wasn't relevant. You were full on bear come March
Speaker 1: two thousand, like you went full on. I said, we
Speaker 1: were going to the War of eighteen twelve, and we
Speaker 1: were at five thousand something at the time, So lucky
Speaker 1: and smart better lucky and that I had actual platform too,
Speaker 1: you know, otherwise it beressed if you're a barish in
Speaker 1: the woods and the market goes down to I was
Speaker 1: bearish in the woods in two thousand, no one newer
Speaker 1: care of who the hell I was. Um, what do
Speaker 1: you do for fun? What do you do to stay
Speaker 1: either mentally or physically fit outside of the trading room?
Speaker 1: You know, I got a peloton from my wife for
Speaker 1: the holidays and sec and I live on that thing
Speaker 1: as much as you can. Yeah, it's terrific. You know,
Speaker 1: I try. You know, it's tough. I get out. You know.
Speaker 1: We just took an office in Port Washington, which is
Speaker 1: a stone's throw from my uh from my house, and
Speaker 1: you know, I thought this would allow me to do
Speaker 1: some more in the morning. But now I just get
Speaker 1: to the office like at six o'clock, six thirty, and
Speaker 1: I just can't wait, you know, to be able to
Speaker 1: get up every day. And this is another one that
Speaker 1: I've always said in kind of lost its luster. You
Speaker 1: say it enough, but it's so true. You know, if
Speaker 1: you do what you love with people, your respect while
Speaker 1: serving the greater good, I mean, that's not work, that's
Speaker 1: professional nirvana. That's as good as it gets. If you
Speaker 1: can get up every day with purpose and and do
Speaker 1: something you love and actually have a knock on effect
Speaker 1: for society, or or at least believe you do. I
Speaker 1: think you're you're You're a blessed man. You're more or
Speaker 1: less just answered the question I'm about to ask. So
Speaker 1: if a millennial or recent college graduate came up and said, Hey,
Speaker 1: what what sort of career advice? UH, can you give me?
Speaker 1: What would you tell them? If they said I want
Speaker 1: to go into either trading or investment investing, what would
Speaker 1: you say to them? I would say, to prepare yourself
Speaker 1: for a very long, very long process. I mean, listen,
Speaker 1: the cream will always rise to the top, and they'll
Speaker 1: always be demand for the exceptional talent. But certainly the
Speaker 1: playing field has changed. Uh. And I'm not even talking
Speaker 1: about the seventy percent of trading that's done by computers now.
Speaker 1: I'm just talking about, you know, the efficiencies. I mean, listen,
Speaker 1: when I start to do do Morgan Stanley in the early nineties,
Speaker 1: the Dells, the Microsoft, the Intels of the world would
Speaker 1: all sell puts rather than buy backstock because they were
Speaker 1: capital gains instead of There are lots of reasons to
Speaker 1: do that. But my point is we would price that
Speaker 1: and we we would win, you know, by seventy vols
Speaker 1: because we were the only ones in the market. So
Speaker 1: we make seventy volves pricing this this paper. Uh, and
Speaker 1: in a couple of years we were winning business by
Speaker 1: maybe a quarter penny, right, So the inefficiencies were such.
Speaker 1: Those inefficiencies, in my opinion, now exist in the cannabis space.
Speaker 1: You have no institutional presence, you have no institutional analysts,
Speaker 1: and you have a lot of inefficiencies that because you
Speaker 1: have all retail holders in a lot of these names.
Speaker 1: They're very emotional, and you have these moves that are
Speaker 1: outsized relative to what they should be. So if you
Speaker 1: have the time horizon and the risk profile and the
Speaker 1: fortitude to kind of see through that, I think you
Speaker 1: can make a lot of money here. And our final question,
Speaker 1: what is it that you know about the world of
Speaker 1: investing in trading today that you wish you knew twenty
Speaker 1: or even thirty years ago. I think you would be
Speaker 1: just to hold onto your winners and let your winners run. Uh.
Speaker 1: You know, I think you have to. Somebody once said
Speaker 1: to me, don't be afraid of losing money or don't
Speaker 1: be afraid of making money. I should say right now,
Speaker 1: I've always heard, hey, bulls and bears get uh, bulls
Speaker 1: and bears make money, but pigs gets slaughtered, and I
Speaker 1: always thought it was terrible advice. So you're up hit
Speaker 1: that bid when especially in a world of Amazon and Apple.
Speaker 1: But there are different strategies you can trail your stops.
Speaker 1: There's a lot of different things that rather than just
Speaker 1: say okay, I'm up what you we might have a
Speaker 1: preconceived notion of how much we should make. Okay, I
Speaker 1: hit that and I will get out. If you do that,
Speaker 1: you can make money, but you're never gonna get wealthy, right,
Speaker 1: You're never gonna get like like I listen, I say
Speaker 1: to these guys all the time in the office. You know,
Speaker 1: we sell for dimes, we buy for dollars, right, so
Speaker 1: I will you know, listen to if I think a
Speaker 1: stock gets over at Skis, I own two fifty while
Speaker 1: I sell fifty because it's up in a matter of
Speaker 1: two weeks around. But I'm not going to sell the
Speaker 1: position because it reached some uh you know, some P
Speaker 1: and L that I deemed to be adequate. That way,
Speaker 1: I'm never gonna really to turn this from, you know,
Speaker 1: from a trading operation to an investment shop. We have
Speaker 1: been speaking with Todd Harrison. He is the chief investment
Speaker 1: officer and founding partner at CB one Capital Partners, a
Speaker 1: health and wellness medical cannabinoid hedge funds. If you enjoy
Speaker 1: this conversation, be sure and look up an Inch or
Speaker 1: down an Inch on Apple iTunes or Bloomberg dot Com
Speaker 1: overcast wherever fun or podcasts are sold, and you can
Speaker 1: see any of the other two hundred plus such recordings
Speaker 1: we have made over the past four years. We love
Speaker 1: your comments, feedback and suggestions right to us at m
Speaker 1: IB podcast at Bloomberg dot Net. I would be remiss
Speaker 1: if I did not thank my crack staff who helps
Speaker 1: put together all of our weed related podcasts. Uh. Taylor
Speaker 1: Riggs our booker slash producer. Medina Patwana is our audio engineer. Producer.
Speaker 1: Michael Batnick is our head of research. I'm Barry Ritults.
Speaker 1: You've been listening to a Masters in Business on Bloomberg
Speaker 1: Radio