WEBVTT - MedMen's Bierman on Navigating the Marijuana Industry (Audio)

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<v Speaker 1>Broadcasting live to New York Bloomberg eleventh, Rio to Washington,

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<v Speaker 1>d C. Bloomberg to Boston, Bloomberg twelve, under It to

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<v Speaker 1>San Francisco, Bloomberg nine, to the Country series Exam Channel

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<v Speaker 1>one nineteen, and around the globe the Bloomberg Radio Plus

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<v Speaker 1>Appen Bloomberg dot Com. This is taking Stock. I'm Kathleen Hayes.

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<v Speaker 1>My co host Pim Fox is on assignment this afternoon.

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<v Speaker 1>You know, in the private equity people start getting involved

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<v Speaker 1>in an industry, it's got to be big and getting bigger.

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<v Speaker 1>We're gonna be speaking to Adam Bierman. He's co founder

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<v Speaker 1>and CEO of Medmen, and private equity firm that is

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<v Speaker 1>investing in the cannabis industry and advising and consulting potential

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<v Speaker 1>investors in that industry as well. Now let's go to

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<v Speaker 1>Charlie Pett He is in the newsroom with a Bloomberg

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<v Speaker 1>Business flash, and I thank you very much, Kathleen Hayes.

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<v Speaker 1>I'm looking at Green on the screen and the SMP

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<v Speaker 1>five how at index that is on track for a

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<v Speaker 1>ten month high. Stocks are rallying as Federal Reserve Chair

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<v Speaker 1>Janet Yellen signals the economy is still strengthening enough to

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<v Speaker 1>withstand gradual increases in borrowing costs, despite recent signs of

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<v Speaker 1>slower job growth. For speech in Philadelphia carried live right

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<v Speaker 1>here on Bloomberg Radio, well, the economy has made Greek

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<v Speaker 1>stride towards the AFORMC subjective of maximum employment, somewhat list

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<v Speaker 1>progresses made toward our inflation objective. Inflation is whoren persistently

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<v Speaker 1>below the FIDS goal of two over the past several years,

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<v Speaker 1>even as the labor market strength and significantly, and the

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<v Speaker 1>Fed chair said positive forces supporting jaw growth and higher

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<v Speaker 1>inflation will still probably outweigh negative developments, calling additional gradual

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<v Speaker 1>rate increases appropriate, without specifying their precise timing. SMP five

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<v Speaker 1>hundred index up thirteen points at twelve pine of seven

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<v Speaker 1>tenths of one percent. Nav stack is up thirty six points,

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<v Speaker 1>also a gain of seven tenths of one percent down

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<v Speaker 1>Industrials up one thirty eight points, a gain of eight

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<v Speaker 1>tenths of one percent. Brexit is back investors from Australia

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<v Speaker 1>to Thailand ducking for cover. The pound tumbled. Currency volatility

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<v Speaker 1>surged after two poles showed more Britain's favor of vote

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<v Speaker 1>to leave the EU at a June twenty three referendum

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<v Speaker 1>than those who want to stay. Tenure down seven thirty

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<v Speaker 1>second zeal there one point seven two percent, Gold up

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<v Speaker 1>four fifty pounds to twelve forty seven, a gain of

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<v Speaker 1>four tenths of one percent. Crude now up two point

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<v Speaker 1>two percent, forty nine sixty seven of barrel to thirty

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<v Speaker 1>two on Wall Street Now will look at other news

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<v Speaker 1>from around the world. Thank you Charlie from the Bloomberg

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<v Speaker 1>News Room. I'm Raimi in Essencio. This news update is

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<v Speaker 1>brought to you by Elbow Beach Bermuda in ocean front

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<v Speaker 1>Go to Elbow Beach burm You to dot com for

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<v Speaker 1>more details. Forecasters say threatening rains could cause serious flooding

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<v Speaker 1>across the coast of Florida. Here's Governor Rick Scott. I

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<v Speaker 1>just declared a state of emergency in thirty four counties

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<v Speaker 1>that are looks like they'll get the brunt of tropical

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<v Speaker 1>Storm Colin. This storm is just the latest in a

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<v Speaker 1>series of severe weather events across the country. From record

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<v Speaker 1>breaking heat in the West and historic flooding in Texas.

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<v Speaker 1>Fifteen was a violent year in Milwaukee. Authorities say there

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<v Speaker 1>were one hundred forty five homicides in the city last

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<v Speaker 1>year alone. That's up from eighty six the year before.

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<v Speaker 1>Speaking in Milwaukee, Police Chief Ed Flynn blames a spike

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<v Speaker 1>on more lenient gun laws. Since it's been significant easier

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<v Speaker 1>to procure firearms and sell them without background checks, we've

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<v Speaker 1>had increases in gun related homicides, increases of non fatal shootings,

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<v Speaker 1>increases in gun seizures, and increases in the percentage of

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<v Speaker 1>gun seas that are our crime. Guns officials say there

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<v Speaker 1>were six hundred thirty five non fatal shootings and there's

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<v Speaker 1>an increasing probability of stolen cars ending up in California.

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<v Speaker 1>That's according to a report by the National Insurance Crime Bureau.

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<v Speaker 1>A new report which analyzed the number of thefts per population,

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<v Speaker 1>says the Golden State is home to eight of the

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<v Speaker 1>top ten u S hotspots for stolen vehicles in the country.

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<v Speaker 1>That's higher than the New York and Washington regions, where

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<v Speaker 1>people rely more on mass transit. Global News twenty four

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<v Speaker 1>hours a day, powered by our journalists in more than

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<v Speaker 1>one fifty news bureaus around the world. From the Bloomberg

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<v Speaker 1>News Room, I'm Rainey in essentio Charlie, and we thank you,

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<v Speaker 1>and again recapping SMP five index heading for a ten

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<v Speaker 1>month high and now at a gain of six tenths

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<v Speaker 1>of one percent. I'm Charlie Public and that's a Bloomberg

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<v Speaker 1>Business Flash June listening to taking Stock with pin Box

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<v Speaker 1>and Katholene Hays on Bloomberg Radio. As voters in more

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<v Speaker 1>and more states embrace legalized marijuana sales, this industry is

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<v Speaker 1>going from a small sort of curiosity to something that

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<v Speaker 1>looks like a booming market that is here to stay.

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<v Speaker 1>In fact, a study put out earlier this year suggests

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<v Speaker 1>that the industry could grow to something like six point

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<v Speaker 1>seven billion dollars this year in total sales. Someone who's

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<v Speaker 1>not waiting to find out if it's here to stay

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<v Speaker 1>or not, someone who's been in this business now since

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<v Speaker 1>two thousand seven, is Adam Bierman. He's co founder and

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<v Speaker 1>CEO of med Men, and he joins us in Los Angeles. Adam,

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<v Speaker 1>welcome to the show. Hi, thanks for having me so.

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<v Speaker 1>First of all, tell us about med Men private equity

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<v Speaker 1>in cannabis sounds sounds bizarre, isn't it. It's been, Uh,

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<v Speaker 1>it's been. It's been quite a road to get here.

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<v Speaker 1>But um, that that is where we are. So met

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<v Speaker 1>men actually started off as a management company, so we

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<v Speaker 1>provide management services, not unlike those that are provided in

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<v Speaker 1>hospitality or gaming. Um. And then as of the beginning

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<v Speaker 1>of this year, Uh, we started our private equity fund,

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<v Speaker 1>so very algast hospitality. The fund makes investments in the

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<v Speaker 1>space and the management company then operates those investments. So

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<v Speaker 1>how did you get into this industry? Fell into it? Uh?

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<v Speaker 1>You know, we live in Los Angeles. Los Angeles is

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<v Speaker 1>the epicenter for you know, the commercial legal commercialization of

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<v Speaker 1>cannabis in the US and North America for that matter.

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<v Speaker 1>And um, we've had uh legal marijuana here sin And

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<v Speaker 1>I was running a branding, design and construction company in

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<v Speaker 1>the late two thousand's and I got a phone call

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<v Speaker 1>from a lady who ran a was running a medical

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<v Speaker 1>marijuana dispensary UM in Hollywood, and she wanted to hire

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<v Speaker 1>that company to do work for her. And by the

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<v Speaker 1>time I was done with that meeting, I knew that

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<v Speaker 1>I had to figure out how to enter this space.

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<v Speaker 1>So that's actually how I got introduced to the space.

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<v Speaker 1>And um, back then, there was really there. Most certainly

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<v Speaker 1>was nobody on Bloomberg Radio talking about the the industy three.

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<v Speaker 1>But there was really a really little little to no activity,

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<v Speaker 1>most certainly no institutional involvement. Um. But you know, we

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<v Speaker 1>we we saw that we we had an understanding that

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<v Speaker 1>there was a lot of momentum that was building and

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<v Speaker 1>that this would be you know what it is now becoming,

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<v Speaker 1>and the way that we would take advantage of that

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<v Speaker 1>was to be first movers and really getting an understanding.

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<v Speaker 1>And so we do so. I think a lot of

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<v Speaker 1>people it's it's a it's a complicated world because states

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<v Speaker 1>can legalize you know, the the recreational use um, you know,

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<v Speaker 1>medical use. Federal laws though still have not don't seem

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<v Speaker 1>to be quite in sync. And that makes it a problem,

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<v Speaker 1>does it for companies that want to scale up, you know,

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<v Speaker 1>they really do want to invest in big production of marijuana,

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<v Speaker 1>shipping of marijuana, storage of marijuana. Yes, And I think

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<v Speaker 1>you know, for US, problems and roadblocks are opportunities. But

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<v Speaker 1>nonetheless those those do exist. I mean, the biggest thing

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<v Speaker 1>that exists is you know, each state is its own island. UM.

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<v Speaker 1>And because of the fact that this is still scheduled

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<v Speaker 1>the way it is, and because of all the UM

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<v Speaker 1>federal illegality, there is no crossing state lines. And because

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<v Speaker 1>of that, UM, you know, you talk about scaling up,

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<v Speaker 1>you can't scale up in that traditional sense and gain

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<v Speaker 1>those economies of scale, most specifically as an operator. UM.

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<v Speaker 1>If you have a license in New York, for example, UM,

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<v Speaker 1>you can't go ahead and produce you know, medical marijuan

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<v Speaker 1>and ship at the Pennsylvania So UM. You know that

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<v Speaker 1>is I guess on one hand, and impediment on another hand,

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<v Speaker 1>it's an opportunity. Right. There's we are a very very

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<v Speaker 1>quickly evolving industry. The laws, the regulations, everything is evolving

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<v Speaker 1>alongside you know, the UM, the industry itself. So everything

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<v Speaker 1>is evolving all at once, from regulatory all the way

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<v Speaker 1>to access to institutional finance and you know and capital UM.

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<v Speaker 1>All that's evolving kind of contemporaneously UM. And as that happens,

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<v Speaker 1>you know, there's a there is some confusion. There's a

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<v Speaker 1>serious learning curve UM. And we we actually we use

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<v Speaker 1>a more positive spin. We call it informational arbitract so

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<v Speaker 1>that's how we like to look at it. The uh

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<v Speaker 1>your fund, right, the first nine figure fund that directly

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<v Speaker 1>invest in the cannabis industry. This is very interesting because

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<v Speaker 1>as the industry gets bigger, and if it's growing, there's

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<v Speaker 1>a lot of institutional investors. I would think at some

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<v Speaker 1>point when the industry is large and I would like

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<v Speaker 1>to put some money in, and then of course the

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<v Speaker 1>people think, hey, this is a great business opportunity. How

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<v Speaker 1>does this fund work? Would tell us about it? Well, so, yeah,

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<v Speaker 1>I mean you are right, the institutional players they want

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<v Speaker 1>to be in this industry. I mean I've been taking

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<v Speaker 1>those meetings on my trips to New York now for

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<v Speaker 1>the last couple of years and then the last you know,

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<v Speaker 1>a couple of months. Um. The speed at which the

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<v Speaker 1>velocity at which that that interest is growing is just

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<v Speaker 1>you know, tremendous and significant. There are very large you

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<v Speaker 1>know a u M funds dollar a u M funds

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<v Speaker 1>that I know because I've been having the meetings that

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<v Speaker 1>have had you know, LP say hey, we want you

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<v Speaker 1>to go ahead and figure out how to invest into

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<v Speaker 1>this industry. You know, they're working on carve outs, are

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<v Speaker 1>working on bites funds they're working on that. They don't

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<v Speaker 1>move as swiftly as for example, family offices can move

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<v Speaker 1>when they're investing their own dollars um And so there

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<v Speaker 1>is that that information, you know, we taught we have

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<v Speaker 1>the information arbitrage. They're trying to get smart on it,

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<v Speaker 1>they're trying to figure it out, and then they're trying

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<v Speaker 1>to be able to put themselves in a position to

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<v Speaker 1>be able to invest in the space. And so for us,

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<v Speaker 1>we've been in this industry for a while, we understand

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<v Speaker 1>the nuances from a regulatory perspective. From an operational perspective,

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<v Speaker 1>we actually believe that the biggest risk in investing in

0:10:20.760 --> 0:10:23.400
<v Speaker 1>the spaces operational risk at this point in time. Then,

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<v Speaker 1>because that is our background and we have a commanding

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<v Speaker 1>understanding of that, we have the management company were uniquely

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<v Speaker 1>positioned to really take capital, deploy capital directly into the space,

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<v Speaker 1>you know, be able to get tech likes upside. Uh

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<v Speaker 1>all right, Avan Bierman, thank you so very much. Co

0:10:40.440 --> 0:10:44.760
<v Speaker 1>founder and CEO of med Men. They are a cannabis

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<v Speaker 1>private equity firm based in Los Angeles. Just a quick

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<v Speaker 1>programming note Tomorrow Wednesday, taking stock broadcasting live at Pershing's

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<v Speaker 1>Insight Conference in Orlando. This is when they're Radio Bloombergtaking

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