WEBVTT - Cannabase's Beck: Growing Online Marijuana Marketplace (Audio)

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<v Speaker 1>Broadcasting live to New York, Bloomberg eleven Glo to Washington,

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<v Speaker 1>d C, Bloomberg to Boston, BLUEMBERG twelve hundreds to San Francisco,

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<v Speaker 1>Bloomberg nine to the country. See when he set jam

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<v Speaker 1>General one nine team and around the globe the Bloomberg

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<v Speaker 1>Radio plus Zapp and Bloomberg got gone. This is taking stock.

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<v Speaker 1>Coming up on taking stock. We're going to take stock

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<v Speaker 1>of the legal marijuana industry, estimated to be worth about

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<v Speaker 1>seven billion dollars, growing between twenty and twenty five percent

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<v Speaker 1>a year. We're gonna be speaking with the co founder

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<v Speaker 1>managing director of Cannabase. This is an online whostsale marijuana marketplace.

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<v Speaker 1>We've got details right now. Let's get details about business

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<v Speaker 1>news from Catherine Cowdery in the Bloomberg newsroom. Thank you, Pam.

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<v Speaker 1>The stock market retreating from an all time highs as

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<v Speaker 1>a new report showed weak retail spending and producer prices.

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<v Speaker 1>That report showed sales at US retailers were little change

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<v Speaker 1>in July's Americans flock to auto dealers at the expense

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<v Speaker 1>of other merchants. Ken Perkins, president of Retail Metrics, calls

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<v Speaker 1>the report disappointing. Especially for brick and mortar stores, as

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<v Speaker 1>more sales go online, and there's clearly a structural shift

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<v Speaker 1>in the way people shop, how they're shopping, when they're shopping,

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<v Speaker 1>and I think that's gonna unfold here and more so

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<v Speaker 1>than ever in the back to school shopping season. You know,

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<v Speaker 1>there isn't gonna be this rush that we've seen in

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<v Speaker 1>previous years and decades as a built up you know,

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<v Speaker 1>I think you can shop mobile on your phone at

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<v Speaker 1>any time, any place and have it delivered same day,

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<v Speaker 1>within an hour in some instances. I think there's a

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<v Speaker 1>lot more by now where now hype purchases. We check

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<v Speaker 1>the markets every fifteen minutes throughout the trading day. Dow

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<v Speaker 1>Industrial leverage is currently down fifty five points at third

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<v Speaker 1>over percent trading at eighteen thousand, five hundred fifty eight.

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<v Speaker 1>Smp F I foundered down four points to tents of

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<v Speaker 1>a percent one then AzaC is down three points at

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<v Speaker 1>tenth of a percent at fifty two twenty four. West

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<v Speaker 1>Texas Intermedy accrude oil of ninety four cents of barrel

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<v Speaker 1>to point two percent to forty four forty two speckled

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<v Speaker 1>down seven dollar sixty cents announced to thirteen four D

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<v Speaker 1>two forty tenure treasury of fifteen thirty seconds with the

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<v Speaker 1>yield of one point five zero percent. Among today's top

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<v Speaker 1>business stories, Fox News is unveiling a new senior leadership

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<v Speaker 1>team and management structure. It's name Fox Television Station CEO

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<v Speaker 1>Jack Abernathy and Senior Executive Vice president Bill Shrine to

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<v Speaker 1>serve as co president's effective immediately. In addition, Chief financial

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<v Speaker 1>Officer Mark Rans will be retiring. Well, Steve Win got

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<v Speaker 1>fewer tables than he wanted for his Macau casino. He'll

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<v Speaker 1>be getting one hundred fifty gaming tables for his new

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<v Speaker 1>four point to billion dollar resort in Macau. It's another

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<v Speaker 1>signal that Macau is serious about limiting gambling growth. It's

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<v Speaker 1>two thirty two on Wall Street. Let's get an update

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<v Speaker 1>of some of the other stories were following today on

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<v Speaker 1>Bloomberg Radio. Thank you Catherine from the Bloomberg Newsroom. I

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<v Speaker 1>Nancy lyons the Seka virus continues to spread in Miami.

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<v Speaker 1>The Florida Department of Health says it has confirmed three

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<v Speaker 1>more locally acquired cases. Governor Rick Scott says the state

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<v Speaker 1>is still though a big tourist destination despite Zica. We're

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<v Speaker 1>gonna announce record tourism members for the second quarter of

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<v Speaker 1>this afternoon, so um have to keep that up there.

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<v Speaker 1>We have over one point two main jobs tours. Meanwhile,

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<v Speaker 1>Puerto Rico says there have been more than nineteen hundred

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<v Speaker 1>new cases there over the past week and more than

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<v Speaker 1>ten thousand, six hundred today. Donald Trump's presidential campaign is

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<v Speaker 1>apparently pulling out of New Jersey. Nathan Hagar reports from

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<v Speaker 1>our Bloomberg newsroom in Washington. The Republican nominee has reportedly

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<v Speaker 1>closed his campaign headquarters in New Jersey, home to Governor

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<v Speaker 1>Chris Christie. Federal election filing show he last paid rent

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<v Speaker 1>there only about a week after the office opened in May.

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<v Speaker 1>Several staffers reportedly haven't been paid since June. A New

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<v Speaker 1>Jersey state senator who supports Trump tells Politico it was

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<v Speaker 1>the campaign's plan all along to close after New Jersey's

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<v Speaker 1>June seventh primary, but the office opened after Trump's eventual

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<v Speaker 1>nomination was a foregone conclusion. Nathan Hagar Bloomberg Radio, Washington,

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<v Speaker 1>and the New York Army National Guard unit known as

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<v Speaker 1>the Harlem Hell Fighters, has started two weeks of training

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<v Speaker 1>ahead of its deployment to Kuwait. About two hundred and

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<v Speaker 1>fifty soldiers left Westchester County to head to a training

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<v Speaker 1>facility in Pennsylvania. They'll be deployed to the Persian Gulf

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<v Speaker 1>this fall after more training in Texas. Global News twenty

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<v Speaker 1>four hours a day, powered by more than twenty six

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<v Speaker 1>hundred journalists and analysts and more than a hundred and

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<v Speaker 1>twenty countries. Nancy Lions, this is Bloomberg. Back to you, Catherine,

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<v Speaker 1>Thank you. Now, let's get a quick check at the

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<v Speaker 1>benchmark Stowe Industrial leverage down fifty four points at eighteen thousand,

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<v Speaker 1>five hundred fifty eight SMP five fundered down four points one,

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<v Speaker 1>then has to act down three points at fifty two five.

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<v Speaker 1>And that's a Bloomberg business flash the whole pat and

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<v Speaker 1>I guess he brings his own music with him wherever

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<v Speaker 1>he goes. Matt Miller, my co host, filling in for

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<v Speaker 1>Kathleen Hayes. This is taking stock. I'm pim Fox. The

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<v Speaker 1>legal marijuana industry is estimated to be worth about seven

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<v Speaker 1>billion dollars, growing between twenty five percent a year. This

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<v Speaker 1>despite the current action by the Drug Enforcement Administration rejecting

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<v Speaker 1>petitions to remove marijuana from its most highly restricted classification

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<v Speaker 1>of drugs. Here to tell us more about the marijuana

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<v Speaker 1>industry is Jennifer Beck, the co founder and the managing

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<v Speaker 1>director of Cannabase. Jennifer, thanks for being with us. Thank

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<v Speaker 1>you so much for having me. What is Cannabase? How

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<v Speaker 1>do you describe it to people that are not familiar

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<v Speaker 1>with the industry? Great, So, Cannabase is the largest and

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<v Speaker 1>oldest online exchange platform for licensed cannabis businesses. So we're

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<v Speaker 1>the oldest and largest wholesale platform. UM. The core is

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<v Speaker 1>our wholesale market where we represent sevent of marijuana licenses

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<v Speaker 1>in Colorado, and we're a one stop shop for retailers

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<v Speaker 1>to stock their shelves and allow cultivators to flower or

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<v Speaker 1>trim to either retailers or extractors. So I can understand.

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<v Speaker 1>We all know where you can get cannabis legally now,

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<v Speaker 1>but I wonder where you can grow it. Can you

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<v Speaker 1>grow it in all the same states that it's legal

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<v Speaker 1>to buy it? Absolutely so, because interstate commerce actually isn't allowed.

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<v Speaker 1>You have to grow it in the state that you're

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<v Speaker 1>going to sell it. Um, and then it's a matter

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<v Speaker 1>of whether or not that state is vertically integrated. So

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<v Speaker 1>Colorado's market, our medical market is still vertically integrated, which

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<v Speaker 1>means that if you have a retail center, you actually

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<v Speaker 1>have to grow sev of your own products. But hang on,

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<v Speaker 1>you can't get Does that mean if I go to

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<v Speaker 1>Colorado to buy marijuana, I can't get anything from Humble County. No?

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<v Speaker 1>Absolutely not. All of the product has to be grown

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<v Speaker 1>within Colorado. So our wholesale exchange is a state by

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<v Speaker 1>state exchange. Now the state by state exchange, tell us

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<v Speaker 1>how it would actually work. Give us an example. So

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<v Speaker 1>how it would work is you that either have a

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<v Speaker 1>cultivation license, a retail license, or an infused product manufacturer

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<v Speaker 1>license which would allow you make edibles. And then some

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<v Speaker 1>people have both, um, you know, a combination of the

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<v Speaker 1>two or the three. Um. Then you go on Cannabase

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<v Speaker 1>as a cultivator retailer and you would list the product

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<v Speaker 1>you have available flower trim, extract, oil, candy bars, whatever

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<v Speaker 1>you're looking to sell. Or as a retailer, you can

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<v Speaker 1>log on and you can shop products and you can

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<v Speaker 1>buy it. Help me figure out the margins at these dispensaries. Um.

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<v Speaker 1>When I was a kid, I mean, we always thought

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<v Speaker 1>about an eighth as like a thirty dollar purchase. Uh,

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<v Speaker 1>I guess fifty dollars if you're in New York City.

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<v Speaker 1>What are we looking at as far as wholesale levels.

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<v Speaker 1>Wholesale wise, UM, we're seeing that we have two types

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<v Speaker 1>of markets, medical and recreational. The medical market has actually

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<v Speaker 1>helped steady. The medical market is still vertically integrated, so

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<v Speaker 1>you have to have both licenses UM, and you have

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<v Speaker 1>to be a Red card holder to buy Red card

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<v Speaker 1>holders buying metal product are going to see around those

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<v Speaker 1>prices like you're saying thirty bucks, UM, taxes are going

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<v Speaker 1>to be a bit lower. On the medical side. Recreational

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<v Speaker 1>vertical integration expired, so now we have stand alone cultivations

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<v Speaker 1>and stand alone retail centers, which means there's been a

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<v Speaker 1>real supply gut. We've had a lot of products coming

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<v Speaker 1>into the market from large standalone grows. So on the

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<v Speaker 1>recreational side, product has actually become way cheaper. Where says

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<v Speaker 1>we were seeing about two thousand dollars a pound since

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<v Speaker 1>recreational came into the market, now it's selling about thousand

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<v Speaker 1>dollars a pound, So those prices are beginning to impact

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<v Speaker 1>the consumer. It's becoming cheaper for consumers to buy recreational product.

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<v Speaker 1>Since taxes on recreational product is slightly higher than medical,

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<v Speaker 1>that two are starting to even out on the consumer side, Jennifer,

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<v Speaker 1>how does cannabase make money? So, because we are really

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<v Speaker 1>not allowed to be too involved and we aren't allowed

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<v Speaker 1>to buy the product and market up and sell it

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<v Speaker 1>because it isn't a three cheered system here in Colorado.

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<v Speaker 1>So Cannabase utilizes an online marketing model where we fell

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<v Speaker 1>gus on bringing in the most clients, the most engagement,

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<v Speaker 1>and then we make money off the data that we're

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<v Speaker 1>aggregating from those users and from marketing tools. We have

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<v Speaker 1>the most targeted platform for ancillary businesses to come in

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<v Speaker 1>and actually reach cannabis business decision makers, and we have

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<v Speaker 1>a full suite of online marketing tools available for them

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<v Speaker 1>to do so. So, how is the banking end of

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<v Speaker 1>this working out? I know that for a long time

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<v Speaker 1>it was very difficult for cannas cannabis businesses um to

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<v Speaker 1>do banking because banks, even in legal states weren't willing

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<v Speaker 1>to form those relationships. Has that changed a little bit, Um,

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<v Speaker 1>It's still very very difficult to get traditional banking. I'd

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<v Speaker 1>say most dispensaries, UM and cultivators at this point are

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<v Speaker 1>able to get a checking account, but mostly it's because

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<v Speaker 1>they'll use an LLC name that isn't related to their

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<v Speaker 1>cannabis name that they're doing business as UM, so that

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<v Speaker 1>allow them to get a basic checking account and you

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<v Speaker 1>have checks, but getting credit cards, loans, traditional financing is

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<v Speaker 1>still completely out of the question. Now. Can of As

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<v Speaker 1>was acquired by Helix TCS in July. What is Helix TCS.

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<v Speaker 1>Helix TCS is a provider of integrated operating environment solutions

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<v Speaker 1>for cannabis businesses, So the TCS stands for Technology, Compliance

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<v Speaker 1>and Security. Helix came into the market as a security

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<v Speaker 1>provider and has grown into the largest security provider in

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<v Speaker 1>the state UM in the last year, so absolutely explosive growth.

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<v Speaker 1>And Cannabase has come on board to not only use

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<v Speaker 1>Helix logistical infrastructure to make our marketplace more powerful, but

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<v Speaker 1>also to accelerate our own growth. So since we've been

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<v Speaker 1>here with Helix, we've solidified major partnerships with see the deal,

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<v Speaker 1>tracking companies and data companies. All right, Jennifer, thanks very much.

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<v Speaker 1>Jennifer Beck There, co founder and managing director of Cannabase

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<v Speaker 1>fought by Helix uh In earlier in the summer. You

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<v Speaker 1>can find out h l i X on the Bloomberg.

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