Speaker 1: Broadcasting live to New York Bloomberg eleventh, Rio to Washington,
Speaker 1: d C. Bloomberg to Boston, Bloomberg twelve, under It to
Speaker 1: San Francisco, Bloomberg nine, to the Country series Exam Channel
Speaker 1: one nineteen, and around the globe the Bloomberg Radio Plus
Speaker 1: Appen Bloomberg dot Com. This is taking Stock. I'm Kathleen Hayes.
Speaker 1: My co host Pim Fox is on assignment this afternoon.
Speaker 1: You know, in the private equity people start getting involved
Speaker 1: in an industry, it's got to be big and getting bigger.
Speaker 1: We're gonna be speaking to Adam Bierman. He's co founder
Speaker 1: and CEO of Medmen, and private equity firm that is
Speaker 1: investing in the cannabis industry and advising and consulting potential
Speaker 1: investors in that industry as well. Now let's go to
Speaker 1: Charlie Pett He is in the newsroom with a Bloomberg
Speaker 1: Business flash, and I thank you very much, Kathleen Hayes.
Speaker 1: I'm looking at Green on the screen and the SMP
Speaker 1: five how at index that is on track for a
Speaker 1: ten month high. Stocks are rallying as Federal Reserve Chair
Speaker 1: Janet Yellen signals the economy is still strengthening enough to
Speaker 1: withstand gradual increases in borrowing costs, despite recent signs of
Speaker 1: slower job growth. For speech in Philadelphia carried live right
Speaker 1: here on Bloomberg Radio, well, the economy has made Greek
Speaker 1: stride towards the AFORMC subjective of maximum employment, somewhat list
Speaker 1: progresses made toward our inflation objective. Inflation is whoren persistently
Speaker 1: below the FIDS goal of two over the past several years,
Speaker 1: even as the labor market strength and significantly, and the
Speaker 1: Fed chair said positive forces supporting jaw growth and higher
Speaker 1: inflation will still probably outweigh negative developments, calling additional gradual
Speaker 1: rate increases appropriate, without specifying their precise timing. SMP five
Speaker 1: hundred index up thirteen points at twelve pine of seven
Speaker 1: tenths of one percent. Nav stack is up thirty six points,
Speaker 1: also a gain of seven tenths of one percent down
Speaker 1: Industrials up one thirty eight points, a gain of eight
Speaker 1: tenths of one percent. Brexit is back investors from Australia
Speaker 1: to Thailand ducking for cover. The pound tumbled. Currency volatility
Speaker 1: surged after two poles showed more Britain's favor of vote
Speaker 1: to leave the EU at a June twenty three referendum
Speaker 1: than those who want to stay. Tenure down seven thirty
Speaker 1: second zeal there one point seven two percent, Gold up
Speaker 1: four fifty pounds to twelve forty seven, a gain of
Speaker 1: four tenths of one percent. Crude now up two point
Speaker 1: two percent, forty nine sixty seven of barrel to thirty
Speaker 1: two on Wall Street Now will look at other news
Speaker 1: from around the world. Thank you Charlie from the Bloomberg
Speaker 1: News Room. I'm Raimi in Essencio. This news update is
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Speaker 1: more details. Forecasters say threatening rains could cause serious flooding
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Speaker 1: just declared a state of emergency in thirty four counties
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Speaker 1: breaking heat in the West and historic flooding in Texas.
Speaker 1: Fifteen was a violent year in Milwaukee. Authorities say there
Speaker 1: were one hundred forty five homicides in the city last
Speaker 1: year alone. That's up from eighty six the year before.
Speaker 1: Speaking in Milwaukee, Police Chief Ed Flynn blames a spike
Speaker 1: on more lenient gun laws. Since it's been significant easier
Speaker 1: to procure firearms and sell them without background checks, we've
Speaker 1: had increases in gun related homicides, increases of non fatal shootings,
Speaker 1: increases in gun seizures, and increases in the percentage of
Speaker 1: gun seas that are our crime. Guns officials say there
Speaker 1: were six hundred thirty five non fatal shootings and there's
Speaker 1: an increasing probability of stolen cars ending up in California.
Speaker 1: That's according to a report by the National Insurance Crime Bureau.
Speaker 1: A new report which analyzed the number of thefts per population,
Speaker 1: says the Golden State is home to eight of the
Speaker 1: top ten u S hotspots for stolen vehicles in the country.
Speaker 1: That's higher than the New York and Washington regions, where
Speaker 1: people rely more on mass transit. Global News twenty four
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Speaker 1: News Room, I'm Rainey in essentio Charlie, and we thank you,
Speaker 1: and again recapping SMP five index heading for a ten
Speaker 1: month high and now at a gain of six tenths
Speaker 1: of one percent. I'm Charlie Public and that's a Bloomberg
Speaker 1: Business Flash June listening to taking Stock with pin Box
Speaker 1: and Katholene Hays on Bloomberg Radio. As voters in more
Speaker 1: and more states embrace legalized marijuana sales, this industry is
Speaker 1: going from a small sort of curiosity to something that
Speaker 1: looks like a booming market that is here to stay.
Speaker 1: In fact, a study put out earlier this year suggests
Speaker 1: that the industry could grow to something like six point
Speaker 1: seven billion dollars this year in total sales. Someone who's
Speaker 1: not waiting to find out if it's here to stay
Speaker 1: or not, someone who's been in this business now since
Speaker 1: two thousand seven, is Adam Bierman. He's co founder and
Speaker 1: CEO of med Men, and he joins us in Los Angeles. Adam,
Speaker 1: welcome to the show. Hi, thanks for having me so.
Speaker 1: First of all, tell us about med Men private equity
Speaker 1: in cannabis sounds sounds bizarre, isn't it. It's been, Uh,
Speaker 1: it's been. It's been quite a road to get here.
Speaker 1: But um, that that is where we are. So met
Speaker 1: men actually started off as a management company, so we
Speaker 1: provide management services, not unlike those that are provided in
Speaker 1: hospitality or gaming. Um. And then as of the beginning
Speaker 1: of this year, Uh, we started our private equity fund,
Speaker 1: so very algast hospitality. The fund makes investments in the
Speaker 1: space and the management company then operates those investments. So
Speaker 1: how did you get into this industry? Fell into it? Uh?
Speaker 1: You know, we live in Los Angeles. Los Angeles is
Speaker 1: the epicenter for you know, the commercial legal commercialization of
Speaker 1: cannabis in the US and North America for that matter.
Speaker 1: And um, we've had uh legal marijuana here sin And
Speaker 1: I was running a branding, design and construction company in
Speaker 1: the late two thousand's and I got a phone call
Speaker 1: from a lady who ran a was running a medical
Speaker 1: marijuana dispensary UM in Hollywood, and she wanted to hire
Speaker 1: that company to do work for her. And by the
Speaker 1: time I was done with that meeting, I knew that
Speaker 1: I had to figure out how to enter this space.
Speaker 1: So that's actually how I got introduced to the space.
Speaker 1: And um, back then, there was really there. Most certainly
Speaker 1: was nobody on Bloomberg Radio talking about the the industy three.
Speaker 1: But there was really a really little little to no activity,
Speaker 1: most certainly no institutional involvement. Um. But you know, we
Speaker 1: we we saw that we we had an understanding that
Speaker 1: there was a lot of momentum that was building and
Speaker 1: that this would be you know what it is now becoming,
Speaker 1: and the way that we would take advantage of that
Speaker 1: was to be first movers and really getting an understanding.
Speaker 1: And so we do so. I think a lot of
Speaker 1: people it's it's a it's a complicated world because states
Speaker 1: can legalize you know, the the recreational use um, you know,
Speaker 1: medical use. Federal laws though still have not don't seem
Speaker 1: to be quite in sync. And that makes it a problem,
Speaker 1: does it for companies that want to scale up, you know,
Speaker 1: they really do want to invest in big production of marijuana,
Speaker 1: shipping of marijuana, storage of marijuana. Yes, And I think
Speaker 1: you know, for US, problems and roadblocks are opportunities. But
Speaker 1: nonetheless those those do exist. I mean, the biggest thing
Speaker 1: that exists is you know, each state is its own island. UM.
Speaker 1: And because of the fact that this is still scheduled
Speaker 1: the way it is, and because of all the UM
Speaker 1: federal illegality, there is no crossing state lines. And because
Speaker 1: of that, UM, you know, you talk about scaling up,
Speaker 1: you can't scale up in that traditional sense and gain
Speaker 1: those economies of scale, most specifically as an operator. UM.
Speaker 1: If you have a license in New York, for example, UM,
Speaker 1: you can't go ahead and produce you know, medical marijuan
Speaker 1: and ship at the Pennsylvania So UM. You know that
Speaker 1: is I guess on one hand, and impediment on another hand,
Speaker 1: it's an opportunity. Right. There's we are a very very
Speaker 1: quickly evolving industry. The laws, the regulations, everything is evolving
Speaker 1: alongside you know, the UM, the industry itself. So everything
Speaker 1: is evolving all at once, from regulatory all the way
Speaker 1: to access to institutional finance and you know and capital UM.
Speaker 1: All that's evolving kind of contemporaneously UM. And as that happens,
Speaker 1: you know, there's a there is some confusion. There's a
Speaker 1: serious learning curve UM. And we we actually we use
Speaker 1: a more positive spin. We call it informational arbitract so
Speaker 1: that's how we like to look at it. The uh
Speaker 1: your fund, right, the first nine figure fund that directly
Speaker 1: invest in the cannabis industry. This is very interesting because
Speaker 1: as the industry gets bigger, and if it's growing, there's
Speaker 1: a lot of institutional investors. I would think at some
Speaker 1: point when the industry is large and I would like
Speaker 1: to put some money in, and then of course the
Speaker 1: people think, hey, this is a great business opportunity. How
Speaker 1: does this fund work? Would tell us about it? Well, so, yeah,
Speaker 1: I mean you are right, the institutional players they want
Speaker 1: to be in this industry. I mean I've been taking
Speaker 1: those meetings on my trips to New York now for
Speaker 1: the last couple of years and then the last you know,
Speaker 1: a couple of months. Um. The speed at which the
Speaker 1: velocity at which that that interest is growing is just
Speaker 1: you know, tremendous and significant. There are very large you
Speaker 1: know a u M funds dollar a u M funds
Speaker 1: that I know because I've been having the meetings that
Speaker 1: have had you know, LP say hey, we want you
Speaker 1: to go ahead and figure out how to invest into
Speaker 1: this industry. You know, they're working on carve outs, are
Speaker 1: working on bites funds they're working on that. They don't
Speaker 1: move as swiftly as for example, family offices can move
Speaker 1: when they're investing their own dollars um And so there
Speaker 1: is that that information, you know, we taught we have
Speaker 1: the information arbitrage. They're trying to get smart on it,
Speaker 1: they're trying to figure it out, and then they're trying
Speaker 1: to be able to put themselves in a position to
Speaker 1: be able to invest in the space. And so for us,
Speaker 1: we've been in this industry for a while, we understand
Speaker 1: the nuances from a regulatory perspective. From an operational perspective,
Speaker 1: we actually believe that the biggest risk in investing in
Speaker 1: the spaces operational risk at this point in time. Then,
Speaker 1: because that is our background and we have a commanding
Speaker 1: understanding of that, we have the management company were uniquely
Speaker 1: positioned to really take capital, deploy capital directly into the space,
Speaker 1: you know, be able to get tech likes upside. Uh
Speaker 1: all right, Avan Bierman, thank you so very much. Co
Speaker 1: founder and CEO of med Men. They are a cannabis
Speaker 1: private equity firm based in Los Angeles. Just a quick
Speaker 1: programming note Tomorrow Wednesday, taking stock broadcasting live at Pershing's
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