Speaker 1: I'm Bethany McLain. This is making a killing in this show.
Speaker 1: I cut through the hype and handwringing to reframe the
Speaker 1: stories you thought you understood and uncover the ones you
Speaker 1: didn't know were important. Literally every day, a marijuana related
Speaker 1: pitch pops into my inbox, whether it's to profile a
Speaker 1: cannabis entrepreneur, to check out pot infused bath bombs and
Speaker 1: facial creams, or to look at the launch of an
Speaker 1: organic CBD infused sparkling water. That last one is a
Speaker 1: direct quote, and it's not just me. A Shark Tank
Speaker 1: episode featuring a doctor who had launched a CBD oil
Speaker 1: was the most watched episode in Shark Tank history. The
Speaker 1: craze is on investors, of course, love the eye popping
Speaker 1: predictions for growth in the cannabis industry. Global spending on
Speaker 1: legal cannabis is projected to grow two hundred and thirty
Speaker 1: percent to thirty one point three billion in twenty twenty two.
Speaker 1: According to one market researcher, pot is now leak for
Speaker 1: medical use in thirty three states, but it's still illegal
Speaker 1: at the federal level. Strange, and hence author Jackson Tilly's
Speaker 1: use of the delightful word legal ish. In his new
Speaker 1: book subtitle Billion Dollar Dimebag, An Insider's account of America's
Speaker 1: legal ish cannabis industry. A self professed true believer, Jackson
Speaker 1: calls cannabis the next great American industry. Is he right? Well,
Speaker 1: there are some serious issues. From a financial point of view.
Speaker 1: The short history of cannabis stocks is well highs and lows. Sorry,
Speaker 1: I couldn't resist the opportunities to make and lose fortunes.
Speaker 1: Of course, sound like any new industry, but is pot
Speaker 1: just like any other new industry. There's a fierce debate
Speaker 1: about whether we'll regret the rush to legalization. There's still
Speaker 1: a lot about cannabis that we just don't know, including
Speaker 1: its harms and benefits. Proponents think we're going to learn
Speaker 1: good things. Detractors argue that THHC, the active compound in cannabis,
Speaker 1: is strongly linked to psych kosis, schizophrenia, and violence. So
Speaker 1: today I get to chat with Jackson Tilly, who, as
Speaker 1: I've mentioned, is a total believer. His first job out
Speaker 1: of college was it a cannabis company now called Organic Brands,
Speaker 1: and he never left. In addition to being an author,
Speaker 1: he's now the vice president of strategic partnerships and communications.
Speaker 1: As for me, I'm interested in learning why it is
Speaker 1: that Jackson believes so strongly in this industry. So I
Speaker 1: want to start in a slightly odd place. One of
Speaker 1: the fascinating things I learned from your book is this
Speaker 1: idea that to those of you in the industry, marijuana
Speaker 1: is actually a pejorative word. Tell us the history of
Speaker 1: how it came to be. You might want to call
Speaker 1: it the War on drugs. One point now in the
Speaker 1: very first generation of cannabis being treated like something horrible.
Speaker 1: So you have Anslinger who was trying to stoke fears
Speaker 1: about anti immigrant sentiments in the United States. And this
Speaker 1: is back in the nineteen thirties, right when pott became
Speaker 1: illegal exactly. This was probably a year and a half
Speaker 1: after it was first getting to carry with it a
Speaker 1: criminal punishment. So you have Anslinger who's decided that the
Speaker 1: best way to do this is to attach cannabis use
Speaker 1: to anti immigrant sentiments. And so marijuana, I guess at
Speaker 1: the time people felt like had some connotation with Mexico,
Speaker 1: and so it sort of just took off from there
Speaker 1: and it was spelled with the H then instead of
Speaker 1: the jay. That you see more commonly now, So it's
Speaker 1: funny to look back at it. It's sort of like
Speaker 1: transparent and kind of unbelievable that that was ever a
Speaker 1: thought that somebody had, but it worked at the time,
Speaker 1: and I mean not dissimilar to what we're going through now.
Speaker 1: You know, we have a huge debate about immigration happening,
Speaker 1: and I think some of the worst parts of politics
Speaker 1: stoke those fears and people and try to leverage that anger.
Speaker 1: It's interesting everything old is new again. I was thinking
Speaker 1: that when I read it, But I thought this was
Speaker 1: also stunning from your book, that a lot of us
Speaker 1: don't remember that cannabis was once actually legal, and you
Speaker 1: write that before nineteen thirty seven, you could walk into
Speaker 1: a pharmacy and purchase of file was called marijuana tincture
Speaker 1: from behind the counter, and that it was prescribed as
Speaker 1: a remedy for a malady known as female hysteria. Yeah,
Speaker 1: so you have to get women stone don't let us vote, right, right,
Speaker 1: I mean, And I think like whether or not that
Speaker 1: was actually the impetus for any of that, who knows.
Speaker 1: But it's just wild to think about the sort of
Speaker 1: dramatic change back and forth and again it's not dissimilar
Speaker 1: to alcohol prohibition legal before, made illegal, and then made
Speaker 1: legal once again. Do you have any sense if the
Speaker 1: alcohol industry had something to do with marijuana becoming illegal
Speaker 1: back in the nineteen thirties, You know, I haven't read
Speaker 1: anything to that effect. I wouldn't be totally surprised, but
Speaker 1: I think largely the big push for it was hemp production.
Speaker 1: That people did not want to see hemp as a
Speaker 1: commodity used in the production of paper pulp, and so
Speaker 1: that was like a huge driver for this sort of
Speaker 1: anti cannabis sentiment. Oh, that's interesting, since they wanted the
Speaker 1: hemp to be used in paper, so they didn't want
Speaker 1: it being used elsewhere exactly. Well, that's fascinating. Okay, So
Speaker 1: again your book with these quotes from three presidents, which
Speaker 1: I think is great, and I'm just going to read
Speaker 1: them because I think it sets the stage to talk
Speaker 1: about how much attitudes are changing. Now again, you've got
Speaker 1: Bill Clinton saying I experimented with marijuana time or two
Speaker 1: and I didn't like it, and I didn't inhale and
Speaker 1: I never tried again. And then you've got Barack Obama saying,
Speaker 1: when I was a kid, I inhaled frequently. That was
Speaker 1: the point. So talk about the changing attitudes toward cannabis.
Speaker 1: You know, I think it's a lot like any big
Speaker 1: social movement where the big piece that's always missing is
Speaker 1: just time. And I think you could like in it
Speaker 1: a little bit to gay marriage, almost in the same
Speaker 1: sense that it was something that was forever enormously taboo yep.
Speaker 1: And it was not until things like social media and
Speaker 1: easier access to information at a broad scale that you
Speaker 1: saw the conversations start to tilt. So I think it's
Speaker 1: very similar with cannabis that people are just exposed to
Speaker 1: it to a greater extent now than they were previously.
Speaker 1: And I think the big piece is that you see
Speaker 1: more and more people who are both successful and consume cannabis.
Speaker 1: And for a long time those things were mutually exclusive, right,
Speaker 1: So you're breaking that historic association of the loser on
Speaker 1: his mother's coach with the right. And for as volatile
Speaker 1: as you mentioned the stock market surrounding cannabis is, it's
Speaker 1: also the first time that it's being taken seriously as
Speaker 1: a real business. I mean, for its faults, it really
Speaker 1: is and I want to come back to that, but
Speaker 1: one other thing you write in your book that I
Speaker 1: knew but had forgotten is that John Bayner, and the
Speaker 1: former House Speaker right is now serving on the board
Speaker 1: of a cannabis company. He is. You know, you can
Speaker 1: type in cannabis investments into Google and you'll be served
Speaker 1: an ad for America's Bigcashcrop dot Com. What John Bayner
Speaker 1: has to say. That's just amazing, and it's part of this.
Speaker 1: You note that the number of Americans supporting legalization is growing, right, Yeah, absolutely,
Speaker 1: I mean it's the same thing. I think it's twofold. Really,
Speaker 1: people are frustrated with the prison industrial complex the United
Speaker 1: States that huge numbers, particularly people of color, are either
Speaker 1: charged or jailed for cannabis or petty drug charges. And
Speaker 1: then I also think people are just interested in new
Speaker 1: forms of income and new additives to the American economic system.
Speaker 1: So hence the push toward legalization. So tell us about Colorado,
Speaker 1: because Colorado is obviously the first date to legalize pot entirely,
Speaker 1: not just for medical use, but for recreational use as well.
Speaker 1: What's the picture there. I think it's largely positive, certainly
Speaker 1: if you compare it to places where there's a black
Speaker 1: market that's still thriving look anywhere in the South and
Speaker 1: see exactly what's happening. In contrast to Colorado, where just
Speaker 1: like a typical day, if I were to walk off
Speaker 1: the plane in Colorado, I could head to a dispensary.
Speaker 1: In Denver, if I'm over the age of twenty one,
Speaker 1: I'll walk in, they'll scan my driver's license, and I
Speaker 1: can buy something from behind the counter as if it
Speaker 1: were a liquor store. And in turn, the state has
Speaker 1: taken a huge portion of what you've just purchased as
Speaker 1: tax revenue, and a great deal of it has been
Speaker 1: earmarked toward public schools. So in Colorado, I hadn't lived
Speaker 1: there in a long time, and then I recently moved back,
Speaker 1: and it's sort of amazing to see this city is
Speaker 1: Denver in particular, it's spotlessly clean, there's new buildings going
Speaker 1: up everywhere, and it's consistently ranked as like one of
Speaker 1: the best cities to live in the United States. And
Speaker 1: I think a lot of that is probably due in
Speaker 1: fact to this like move toward personal freedoms that people
Speaker 1: want to be in Colorado and have access interesting correlation.
Speaker 1: I'm going to go with correlation rather than causation. On
Speaker 1: that point. But I'll give you a possible correlation, And
Speaker 1: you haven't seen the explosion of violence in Colorado that
Speaker 1: some of marijuana's detractors. And I'm sorry, I can't help it.
Speaker 1: I'm going to keep using the word marijuana. I just fine,
Speaker 1: bad word or not. I say it too. It's totally fine. Okay,
Speaker 1: you haven't seen that explosion of violence that people expected, right, No,
Speaker 1: absolutely not. And as a matter of fact, violence has
Speaker 1: largely gone down in Colorado. There was like a brief
Speaker 1: spike three years ago, but still far below the national
Speaker 1: average and significan currently below what the projected national average
Speaker 1: was when they did a study of future violence in
Speaker 1: the United States as a whole. So I think that
Speaker 1: that has largely been debunked. And I make this point
Speaker 1: in the book that the sky just has not fallen
Speaker 1: in Colorado. There are certainly issues, as there are with
Speaker 1: any developing market, but these fears about children having easy
Speaker 1: access to cannabis, the opposite has proven to be true.
Speaker 1: And as far as crime, I think probably the biggest
Speaker 1: crime that you see is robbery as it relates to
Speaker 1: the transportation of cash in Colorado. Because there's no banking
Speaker 1: system that will the banking system won't won't take cannabis money,
Speaker 1: right exactly, So people are forced to use these private
Speaker 1: armed car services and bank at credit unions instead of
Speaker 1: just being able to conduct business like anybody. So it's
Speaker 1: crime as a result of messed up regulations rather than Yeah,
Speaker 1: I think the point you made is, while an obvious one,
Speaker 1: it's one I often forget, which is that the black
Speaker 1: market will exist. We're not talking about pot or right,
Speaker 1: we're talking about legal pot or illegal pot. But it's
Speaker 1: going to be one or the other, which I think
Speaker 1: is an interesting point. So tell tell us about your
Speaker 1: personal story, because you're an advocate for this industry and
Speaker 1: yet you don't use it yourself. I don't, and I
Speaker 1: did at one point in my life, but I got
Speaker 1: sober in the midst of working in this industry actually,
Speaker 1: and you know, my drug of choice was always prescription pills,
Speaker 1: like I think many people in the United States, and
Speaker 1: so for me it was sort of an awakening about
Speaker 1: what's the root of this issue in the United States,
Speaker 1: Like why are prescription drugs so prevalent and so easy
Speaker 1: to get in cannabis, which carries far less of the
Speaker 1: same dangers, Almost impossible in so much of the country,
Speaker 1: And so that's like in one bucket, and then the
Speaker 1: other piece is just And I've hit on this all
Speaker 1: the time in the book, and I say it all
Speaker 1: the time in real life too. But for me, it's
Speaker 1: just a personal freedom's issue. It's like, I don't know
Speaker 1: that it's harming anyone, and in fact probably has a
Speaker 1: net positive effect. So the of the day, if you're
Speaker 1: not hurting anybody, and we can make the rest of
Speaker 1: the world safer by making it legal, why wouldn't you
Speaker 1: advocate for that. We're going to come back to that,
Speaker 1: but but I want to pause on your point about
Speaker 1: prescription drugs because I thought that was a really interesting
Speaker 1: point that opioids available legally prescription drugs kill people and
Speaker 1: marijuana does not, and that there is some hypocrisy around
Speaker 1: complaints about making pot legal when you compare it to
Speaker 1: what is legally available and dispensed crazily in the pharmaceutical system. Right. Yeah,
Speaker 1: I mean, and for me, I was an eighteen year
Speaker 1: old fresh out of high school, dropped off at college,
Speaker 1: and was getting a prescription for exorbitant amounts of xanax
Speaker 1: from a doctor who just didn't think to question why
Speaker 1: an eighteen year old needs to be taking six or
Speaker 1: seven zanex a day. And wow, And that case isn't
Speaker 1: unique to me. That's a widespread problem of over prescription
Speaker 1: in this country. So when it comes to cannabis, I
Speaker 1: just think it just doesn't carry the same risks. And
Speaker 1: I hate to say that because I know they're detractors
Speaker 1: who say that it's certainly does carry risks, and I'm
Speaker 1: not saying it's risk free, but I think if you
Speaker 1: look at the two and a vacuum, it's evident which
Speaker 1: one carries a higher risk. I hadn't actually realized that
Speaker 1: you couldn't kill yourself by overdosing on marijuana. I'm naive
Speaker 1: about the industry and marijuana itself, I have to contest.
Speaker 1: I think it's a study that they did said you'd
Speaker 1: need to eat thirty six pounds of cannabis in order
Speaker 1: to be able to overdose. And it wouldn't even be
Speaker 1: from the THHC content. It would be from your stomach
Speaker 1: expanding too rapidly from all of the plant materials. So
Speaker 1: it's a high bar. Okay, that is a really disgusting image. Okay,
Speaker 1: So let's start with some of the basics, just for
Speaker 1: people who are listening who may know. What's the difference
Speaker 1: between CBD and THHC. Sure, so it's most simple level.
Speaker 1: THC is the psychoactive part of the cannabis plant, and
Speaker 1: CBD is the non psychoactive. So CBD offers, according to some,
Speaker 1: a lot of the same benefits as THHC, but without
Speaker 1: feeling high essentially, And do you believe that these claims
Speaker 1: about CBD are pretty astonishing? This Shark Tank episode with
Speaker 1: this doctor that became this most watched episode in Shark
Speaker 1: Tank history, is that it's been clinically proven to help
Speaker 1: dozens of ailments including I just have to do the list,
Speaker 1: chronic pain, arthrit a, stress, depression, anxiety, heart healthy diabetes,
Speaker 1: improve cognition until hey, the onset of horrible conditions like dimension. Also,
Speaker 1: I mean, seriously, you might be able to moonlight as
Speaker 1: a narrator for prescription commercials on television. That was very quick.
Speaker 1: You know, I don't know, and I think most people
Speaker 1: don't know whether it's actually true or not. And a
Speaker 1: huge piece of that is that there's no situation in
Speaker 1: which you could do a controlled clinical study on the
Speaker 1: effects of CBD because there's no regulatory body to oversee that.
Speaker 1: So that's one issue, yep. And then beyond that, anecdotally,
Speaker 1: most people believe in this thing called the entourage effect,
Speaker 1: which is where you have to have multiple cannabinoids in
Speaker 1: order for them to all vire at full power, if
Speaker 1: you want to think of it that way. So CBD
Speaker 1: works in its most effective way if it's paired with
Speaker 1: some type of THHC or other cannabinoids that are present
Speaker 1: in the plant, and there's hundreds of them. So taking
Speaker 1: like a straight up CBD seltzer water for example, I
Speaker 1: don't know that that necessarily does anything. However, there might
Speaker 1: be a placebo effect and if that makes people feel great,
Speaker 1: then more power to them. Why not, right? And it
Speaker 1: sounds good. So we are really you mentioned that these
Speaker 1: hundreds of strains in the cannabis plant, we're really at
Speaker 1: the nascent stages of research about this, right, because the
Speaker 1: research that was going on in the twenties and thirties
Speaker 1: into the medical benefits of cannabis just went caput when
Speaker 1: it became illegal exactly. And it's a huge issue. I mean,
Speaker 1: I think there's a lot that the plant can do
Speaker 1: more than we probably understand right now, and The only
Speaker 1: way that we're ever going to figure it out is
Speaker 1: if there's federal legalization, because until then, who can really
Speaker 1: say no, one is equipped to be running those types
Speaker 1: of studies. So where are we in understanding how useful
Speaker 1: marijuana can be in treating various diseases, not just DBD,
Speaker 1: but but thhc are we you hear these reports of
Speaker 1: miracles of people seizures being cured, of cancer patients being
Speaker 1: able to eat and tolerate their medication. Is this the
Speaker 1: first inning? Is at the ninth inning? Where are we
Speaker 1: in our understanding level? This is probably the third inning.
Speaker 1: Baseball is not my strong suit. It's like the first
Speaker 1: twenty minutes of the Academy Awards. Okay, that's that's a
Speaker 1: concept I'm familiar with. We're waiting to see large scale
Speaker 1: studies that happen, and I think, again, I hit on
Speaker 1: this all the time, but it's until there's better legalization.
Speaker 1: It's tough. However, anecdotally you can see it firsthand. There
Speaker 1: tons and tons of people who move to places like
Speaker 1: Colorado and California who have chronic health issues that rely
Speaker 1: on cannabis. And I think, at the end of the day,
Speaker 1: whether it's for pain, or for seizures, or for nausea, whatever.
Speaker 1: If people are finding relief through something that is largely
Speaker 1: free of many of the downsides of prescription pain medication,
Speaker 1: our prescription alternatives, I would advocate for that one hundred
Speaker 1: times over. So in the interim, I think people should
Speaker 1: just continue to try products in a responsible manner and
Speaker 1: see what works for them. There's powerful anecdotal evidence, I
Speaker 1: will give you that, if no systematic scientific study. What
Speaker 1: are you seeing in terms of the money coming into
Speaker 1: the industry. I saw statistic earlier this year. I think
Speaker 1: that a company got one hundred and twenty five million
Speaker 1: dollars of venture capital money. Are you seeing the amounts
Speaker 1: of money begin to skyrocket on the whole? I think
Speaker 1: it's begun to level out a little bit. But in
Speaker 1: the last two years, yes, an exorbitant amount of money
Speaker 1: has been pumped into the cannabis industry. Our own company
Speaker 1: as well, want public at the beginning of the year.
Speaker 1: And in Canada, right because in Canada pot is legal,
Speaker 1: so therefore yeah, okay, actually our friendly neighbors to the north,
Speaker 1: so it's the way of just avoiding the patchwork of
Speaker 1: US laws. Yeah, exactly, And there are other ways to
Speaker 1: do it in the United States, but it's more complex.
Speaker 1: So you write in the book that despite the seeming
Speaker 1: popularity of the cannabis industry in the United States, there's
Speaker 1: never been a worse time to get started. And all
Speaker 1: of the companies here is included, I think lose money.
Speaker 1: Why is that? Why is it so hard to make money?
Speaker 1: People ask all the time, they say, should we get
Speaker 1: involved in cannabis? And the answer I always say is
Speaker 1: five years ago was the best time. And we actually
Speaker 1: just at our quarterlies a couple of days ago bottom
Speaker 1: line profits for something that's very exciting. But yeah, I
Speaker 1: mean it's an incredibly expensive industry. Number one, talent retention
Speaker 1: is super difficult. Payroll as a high expense across the
Speaker 1: cannabis industry. If we're talking about big CpG geared cannabis
Speaker 1: companies like Hours and like Cannapy Grow, what do you
Speaker 1: mean by CPGA geared that it's a consumer package essentially? Yeah,
Speaker 1: so it's that. And then just raw materials are incredibly
Speaker 1: expensive though they've been compressed significantly or over year. The
Speaker 1: cost of the actual cannabis flower that's being turned into
Speaker 1: other goods, it is it volatile it's not. It's actually
Speaker 1: consistently gone down that because more and more people are
Speaker 1: growing as they see it becoming more legal. Right, okay,
Speaker 1: and what about part of the problem with making money
Speaker 1: are these quite contrary regulations. You talk about one section
Speaker 1: to ade explain what that is. To ad, e is
Speaker 1: the bane of every cannabis entrepreneurs existence, strong language. Indeed,
Speaker 1: it's the section of the US tax code that excludes
Speaker 1: any businesses that function in an illegal fashion from claiming
Speaker 1: any expenses on their tax reports, any normal business expenses.
Speaker 1: So when we talk about the incredible cost of running
Speaker 1: a cannabis business in the United States, none of its
Speaker 1: tax deductible exactly. So it's a realized tax rate of
Speaker 1: eighty percent for some people. So it's incredible. Wow. And
Speaker 1: then on top of that, you've got this complexity of
Speaker 1: state law, right, no overarching federal law, and the state
Speaker 1: law is really complicated in patchwork, absolutely, and I think
Speaker 1: that also contributes to the high costs of operating in
Speaker 1: the industry. If you were to work at McDonald's, all
Speaker 1: of your supplies, all of the goods that you use
Speaker 1: in your restaurant are coming from one or two or
Speaker 1: three central warehouses. So that's all been brought into one place.
Speaker 1: And in the cannabis industry, it's not the It's not
Speaker 1: the case if I run an operation in Colorado and
Speaker 1: I also have one in California. I'm creating those products
Speaker 1: in a vacuum, separate from one another. And you can't ship, say,
Speaker 1: raw material grown in California and use it in your
Speaker 1: product in Colorado, right, and nothing has to stay within
Speaker 1: the state. Wow. Yeah, Wow, it's a big logistical nightmare
Speaker 1: I can imagine. So what do you think the picture
Speaker 1: looks like for federal legalization. You seem mixed on it.
Speaker 1: I'd say, yeah, I think it's farther away than a
Speaker 1: lot of people would like to believe. That said, our
Speaker 1: current political climate is extremely unpredictable. Interesting may you live
Speaker 1: in interesting times? Right? Isn't that the old Chinese proverb?
Speaker 1: So I wouldn't say it's out of the realm of
Speaker 1: possibility that it happens in the next two years. But
Speaker 1: it may. But you know, I think we're on the
Speaker 1: right path, and I think eventually we hit this tipping
Speaker 1: point where enough states have legalized that it's just a
Speaker 1: no brainer to happen at the federal level, and I
Speaker 1: think largely to infect us to the banking issues that
Speaker 1: we spoke about. I think that's probably the thing that
Speaker 1: will tip the scales in order to allow banks to
Speaker 1: take money from cannabis entrepreneurs, right, so you don't have
Speaker 1: this almost black market system of banking running in parallel
Speaker 1: to the legal ish cannabis industry. Right is part of
Speaker 1: the push for legalization. Will the move toward criminal justice
Speaker 1: also help, do you think? I think so. I think
Speaker 1: people are really frustrated by the amount of resources that
Speaker 1: are spent on jailing people for petty drug offenses, especially
Speaker 1: when we've seen there are better ways to rehabilitate people
Speaker 1: than throwing them in jail. Like if people are being
Speaker 1: arrested for drug charges because they have a drug problem,
Speaker 1: going to jail is not the solution to that, not
Speaker 1: going to do much. Right, So, how prior to legalization,
Speaker 1: assuming it ever happens, how is a consumer do you
Speaker 1: navigate all these different brands. I walked into a medman
Speaker 1: when I was in Venice recently, and it's just it's
Speaker 1: really hard to know what you're buying, what something is,
Speaker 1: whether there's any consistency between products. Is that part of
Speaker 1: the issue too, and how as a consumer do you
Speaker 1: navigate that there's a couple pieces to it. Number one
Speaker 1: companies like ours and we're certainly not the only one
Speaker 1: to do this, but are called multi state operators, So
Speaker 1: we have products and multiple states in the United States.
Speaker 1: For US it's twelve, so you see some consistency among
Speaker 1: those products. And then you obviously have state mandated testing
Speaker 1: that you know, there's a label on the back of
Speaker 1: every product that at its most basic level tells you,
Speaker 1: here's how much THC is in it, here's how much
Speaker 1: CBD is in it. It's cleared all of its besticide testing,
Speaker 1: so you can get a general sense based on that
Speaker 1: of what it's going to do to you. But it
Speaker 1: would be there would be more consistency if we had legalization,
Speaker 1: right absolutely, because you would probably walk into a Walgreen
Speaker 1: and be able to buy it and it would all
Speaker 1: be ABNBEV brand. You make pretty big claims for legalization,
Speaker 1: both in terms of jobs. You think it might save
Speaker 1: us from the next recession and not because we'll be
Speaker 1: too stone to notice that there's a recession going on,
Speaker 1: and also and also tax revenue. Right, those are those
Speaker 1: in my right in thinking those are your two of
Speaker 1: the big arguments you have for legalization. Yeah. Absolutely, And
Speaker 1: I think the job creation we've seen it be the case.
Speaker 1: In Colorado. We have one of the lowest unemployment rates
Speaker 1: in the country. And whether you want to say that's
Speaker 1: from cannabis or something else, that's I will leave up
Speaker 1: to people to decide. We'll go for correlation again. And
Speaker 1: then tax revenue, it's the same thing. It's we crossed
Speaker 1: the billion dollar freshold and tax revenue in Colorado I
Speaker 1: think a year and a half ago, two years ago.
Speaker 1: I mean, so the money is coming in and on
Speaker 1: a federal level it would be at an even greater scale.
Speaker 1: But if you legalize federally, doesn't doesn't having it available
Speaker 1: all over the country, then start to no pun intended
Speaker 1: cannibalize from other from other areas. So do you really
Speaker 1: get the tax benefit? You think maybe to a certain extent,
Speaker 1: but I think I would have to pull the numbers up.
Speaker 1: But in Colorado, I think it's something like only twenty
Speaker 1: percent of people that come into dispensaries are out of
Speaker 1: state visitors like it. Really it's mostly people who live
Speaker 1: in Colorado. There's a ton of tourists in some cities. Yeah,
Speaker 1: but you know, if you look on most small towns
Speaker 1: outside of Denver and Boulder, people are going to dispensaries
Speaker 1: that live in Colorado. So back to this idea that
Speaker 1: these companies don't make money, I think the security is
Speaker 1: an Exchange Commission even issued a warning about a year
Speaker 1: ago warning investors about fraud in the pot industry. Because
Speaker 1: if so many of the companies are traded on the
Speaker 1: over the counter market there they're or they're based in,
Speaker 1: they're traded on a Canadian exchange, and there's there's just
Speaker 1: a lot people people don't know. What would you look
Speaker 1: out for. What's a warning sign to you, as someone
Speaker 1: who's now a veteran of this industry, what makes you
Speaker 1: say this company is not one of us. It's tough
Speaker 1: to say. And I think it's like with making an
Speaker 1: investment in any novel industry. The onus is on both
Speaker 1: sides for a retail investor to scrutinize what they're investing
Speaker 1: in in the first place, and then I think to
Speaker 1: a pretty significant extent, most people are not successful in listing.
Speaker 1: Even if it is OTC, most people are not successful
Speaker 1: in doing so. If it's an illegitimate business. Now, that's
Speaker 1: not to say there's not plenty of hot air in
Speaker 1: the pot stock market at the moment, but by and large,
Speaker 1: there's about ten companies that you consistently see in business
Speaker 1: media that are the real deal. Nason Stage company. So
Speaker 1: there's a lot of risk, like with Canopy Brands, which
Speaker 1: has a multi billion dollar backing from its parent Constellation
Speaker 1: right but still went through a shakeup this year with
Speaker 1: its CEO being ousted, And it's this we talked about,
Speaker 1: harder to make money than they expected. I think so,
Speaker 1: And I think I can't speak for anybody from Constellation
Speaker 1: or Canopy, but I think my read is that they
Speaker 1: probably didn't make their money back as quickly as they
Speaker 1: wanted to. And it's a long term play, and that
Speaker 1: has long been you forget. I forget because I've worked
Speaker 1: in this industry for so long that all of that
Speaker 1: stuff isn't immediately apparent to people from the outside. But
Speaker 1: for me, when I got into it five and a
Speaker 1: half years ago, it's thinking, Oh, this is a long
Speaker 1: term play. Fifteen years from now, this is going to
Speaker 1: be a fantastic business to be a part of. Wow,
Speaker 1: that's actually interesting that you were thinking that far in advance,
Speaker 1: I'm probably giving myself more credit than I deserved as
Speaker 1: a fresh from college kid. But you know, pretty quickly
Speaker 1: on you can realize that like, okay, it's great now,
Speaker 1: but it's going to be even better in the future.
Speaker 1: And so if you use your crystal mirror and you
Speaker 1: think about five ten years, do you think there's going
Speaker 1: to be a constant flood of new companies offering I
Speaker 1: don't know, gold whatever, whatever's or do you think the
Speaker 1: industry is going to consolidate into a couple of big companies.
Speaker 1: I think we're headed toward large scale consolidation. I think
Speaker 1: you'll always have your sort of boutique, bespoke cannabis products
Speaker 1: and brands, but I think those will make up a tiny,
Speaker 1: tiny portion of what's sold on the market. I think
Speaker 1: we'll see it become a lot like alcohol, where it's
Speaker 1: three or four big companies that own everything. It's interesting.
Speaker 1: I've read a history of the automobile industry this summer,
Speaker 1: and I hadn't known that they're with that of little
Speaker 1: auto companies in the late eighteen hundreds and early nineteen hundreds,
Speaker 1: and of course we ended up with three, right, So
Speaker 1: maybe that will be the history here too, So talk
Speaker 1: a little bit about the culture inside the industry. One
Speaker 1: of the things that I thought was fascinating you had.
Speaker 1: You had this observation about the culture that's quite ironic
Speaker 1: that marijuana does have these really deep anti establishment and
Speaker 1: anti capitalist routs, and yet now people in the industry
Speaker 1: are rooting for government regulation and capitalism. So how does
Speaker 1: that sort of contradiction in terms play out. It's funny.
Speaker 1: I think we're in a growth stage right now where
Speaker 1: people are sort of reckoning with this notion that they
Speaker 1: got into the industry to fight back against the man
Speaker 1: ten years ago, and now they're very much the man themselves, right,
Speaker 1: So I think we're seeing a lot of that play
Speaker 1: out in I think a lot of these IPOs speak
Speaker 1: to that that people are ready to be taken seriously
Speaker 1: as business leaders in the space. So I think from
Speaker 1: the top down that influences a lot of the culture
Speaker 1: where people have had to sort of pull themselves up
Speaker 1: and like get everything done at the highest possible degree
Speaker 1: because the stakes are just higher now than they were previously.
Speaker 1: So it's certainly, you know, I wouldn't say it's as
Speaker 1: bad as being on a trading floor. But it's certainly
Speaker 1: high stress, high pressure because there's just so much at
Speaker 1: stake right now. That's a huge cultural shift within the
Speaker 1: industry that would be fascinating to live through. So what
Speaker 1: was the industry's reaction. It's just one of many critiques.
Speaker 1: But my journalist named Alex Berenson published a book I
Speaker 1: think earlier this year called Tell Your Children, basically arguing
Speaker 1: that marijuana is the THC, is linked to psychosis, schizophrenia,
Speaker 1: other really really terrible things. And his major point was
Speaker 1: that this fresh to legalization is very premature, and you
Speaker 1: hear that from other groups as well. What's the industry
Speaker 1: reaction to that? I mean to his book in particular,
Speaker 1: it's not just the industry who has pushed back against
Speaker 1: And I think there was an open letter from one
Speaker 1: hundred different clinicians and psychologists who said that he had
Speaker 1: cherry picked the data in his book and was drawing
Speaker 1: conclusions that just aren't rooted in science. And that's certainly
Speaker 1: my belief as well as far as schizophrenia and cannabis,
Speaker 1: that's an argument that's been made over and over again,
Speaker 1: and the science for either side of the argument is
Speaker 1: just not there. There certainly can be a relationship between
Speaker 1: the two, but it's like a chicken and egg. Argument
Speaker 1: is that that people had psychosis first, and as many
Speaker 1: people with mental health issues do or self medicating with cannabis,
Speaker 1: or were they using cannabis and it triggered the psychosis.
Speaker 1: I tend to think that it's probably that the psychosis
Speaker 1: was underlying first. But those cases are also exceedingly rare,
Speaker 1: more rare than I think his book would lead you
Speaker 1: to believe. Yeah, it's that correlation causation issue again. Right,
Speaker 1: what do you in the industry do to push back
Speaker 1: because it's not just his book, there's plenty of this
Speaker 1: criticism everywhere. No, absolutely not. I mean, and it's funny
Speaker 1: we've been talking about this a lot lately because of
Speaker 1: even just issues with companies like Jewel where vaping is
Speaker 1: becoming like a larger and larger issue among children, whether
Speaker 1: intentionally or unintentionally. Right, but they have certainly found themselves
Speaker 1: on the wrong side of the regulatory apparatus. Yeah, I
Speaker 1: would not want to be sitting over there at the moment.
Speaker 1: A big piece of it is, as with everything else
Speaker 1: in the industry, that we're fervent believers in regulation and
Speaker 1: that We're happy to comply with the law because it's
Speaker 1: both in our best interest and in the best interests
Speaker 1: of the consumer. Products are safer, they're difficult for children
Speaker 1: to get, and at the end of the day, like
Speaker 1: that benefits all of us. I'm hesitant to even say it,
Speaker 1: But no marketer is going out and thinking like, oh,
Speaker 1: I'm going to think of a way to market cannabis
Speaker 1: to kids, because at the end of the day, they're
Speaker 1: not our consumers and they can't come into a dispensary.
Speaker 1: So do you think some of the pushback is coming
Speaker 1: from the alcohol industry or the tobacco industry, and that
Speaker 1: there's some threat to them if pot becomes illegal substitute? Right?
Speaker 1: Isn't there some line you had in your book about
Speaker 1: getting rid of beer bellies, I mean, which maybe they
Speaker 1: might be replaced by munchy bellies. I don't know. That's
Speaker 1: such a trite thing. I'll get yelled at for having
Speaker 1: even said that. You know, I think I think largely
Speaker 1: the alcohol industry is in favor of it, and as
Speaker 1: you've seen with Canopy Growth Corporation, Constellation made a four
Speaker 1: billion dollar investment in them. So I think the tides
Speaker 1: are turning to a certain extent, and I think people
Speaker 1: are choosing different intoxicants aside from alcohol now, and I
Speaker 1: think alcohol companies are wise and now that if that's
Speaker 1: the way that history is going to play out, then
Speaker 1: they're going to be involved in it, not fight back
Speaker 1: against it. If indeed the legalization trend does continue, it
Speaker 1: will be interesting to see how that plays out. I
Speaker 1: think you might be a little bit optimistic on that front,
Speaker 1: or perhaps naive about the competitive forces at work. Absolutely,
Speaker 1: but whatever, maintain some happy naive to take if you can.
Speaker 1: A last question for you, do you think this industry
Speaker 1: is going to look like any other industry in ten
Speaker 1: or fifteen years If you put back on your your
Speaker 1: future hat and say, what is it going to be like?
Speaker 1: Is this justin industry like alcohol? I think it'll always
Speaker 1: have a certain cultural cache to it that makes it
Speaker 1: seem like the outsider industry. But you know, fifteen years
Speaker 1: from now, I think it'll be federally legal. I think
Speaker 1: we'll have seen huge consolidation, so it's just a few companies,
Speaker 1: maybe even alcohol companies that have acquired and absorbed them.
Speaker 1: Who knows, But I really do think there's this huge
Speaker 1: push and especially at a company like ours, to really
Speaker 1: move towards this CpG model, focusing on the highest value
Speaker 1: portions of the consumer package goods. For those who have
Speaker 1: forgotten the agronive, there's this increased focus on the highest
Speaker 1: value portion of the supply chain. And so I think,
Speaker 1: while there's always going to be this cool factor to
Speaker 1: cannabis and to working in cannabis, I don't think it'll
Speaker 1: be dissimilar to anything else that you walk in and
Speaker 1: buy off the shelf in the store. And maybe it'll
Speaker 1: take longer than fifteen years to get there, but we're
Speaker 1: certainly headed there right now. It's going to be fascinating
Speaker 1: to see if your predictions pan out. So before I
Speaker 1: read Jackson's book and talk to him, I think I
Speaker 1: would have been anti legalization. Why take the risk? Isn't
Speaker 1: the safer route to just say no? But he makes
Speaker 1: some compelling arguments, whether it be the inevitable existence of
Speaker 1: the black market or the hypocrisy of allowing ads for say, alcohol,
Speaker 1: to run freely on billboards across America. His most powerful argument,
Speaker 1: I thought, was the comparison between pot and prescription opioids,
Speaker 1: a topic we've covered here on making a killing he
Speaker 1: writes for the skeptics, I beg you to look at
Speaker 1: these two drugs side by side and tell me which
Speaker 1: one has the highest likelihood of causing harm. Even so,
Speaker 1: I'm going to bet that Jackson might be just a
Speaker 1: tadbit optimistic about the future of this industry. I'd think
Speaker 1: that they're going to be some big scandals and some
Speaker 1: billion dollar losses. But then again, isn't that just like
Speaker 1: any other industry. I'm Bethany McLean, host of Making a Killing.
Speaker 1: We're taking a short break. We'll be back in a
Speaker 1: couple of weeks and I'll talk to Kyle Pope, the
Speaker 1: executive editor of the Columbia Journalism Review, about how journalism
Speaker 1: is changing looking forward to it. Making a Killing is
Speaker 1: the co production of Pushkin Industries and Chalk and Blade.
Speaker 1: It's produced by Ruth Barnes and Rosie Stouffer. My executive
Speaker 1: producers are Alison McClain no relation in Making Casey. The
Speaker 1: executive producer at Pushkin is Mia Loebell. Engineering by Jason
Speaker 1: Gambrell and Jason Rostkowski. Our music is by Jed Flood.
Speaker 1: Special thanks to Jacob Weisberg at Pushkin and everyone on
Speaker 1: the show. I'm Bethany McClain, thank you so much for listening.
Speaker 1: You can find me on Twitter at Bethany mac twelve
Speaker 1: and let me know which episodes you've most enjoyed.