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Speaker 1: Cannabis Song one oh one with Blue and Joe Grande,

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Speaker 1: the world's number one source for everything cannabis.

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Speaker 2: Well, hello, welcome to Cannabis Talk one on one, the

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Speaker 2: world's number one source for everything cannabis. Monday's Blue alongside

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Speaker 2: of me is the world famous Joe Grande, and you

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Speaker 2: were now tuned into the greatest cannabis show on the planet.

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Speaker 3: That's right, folks. Thank you for listening to our podcasts

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Speaker 3: platform is one of a few masterminds behind a business

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Speaker 3: entity that provides solutions for real estate owners. You guys

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Speaker 3: of cannabis use properties, we're going to learn some stuff today.

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Speaker 4: Now.

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Speaker 3: When they're in need of a timely financial financial situation

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Speaker 3: for mission critical construction, are build out for tenant improvements,

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Speaker 3: they can call on these guys. A right here joining

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Speaker 3: us today is Rob Seacrest. No relation to Ryan Seacrest,

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Speaker 3: we found out, but he's the co founder and president

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Speaker 3: of Poloris Capital Group. Did I say Poloris right?

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Speaker 4: That's correct? Okay? Cool.

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Speaker 3: Poloris Capital Group and asset managing lending to owners of

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Speaker 3: commercial properties with licensed cannabis use tenants through the Polorist Fund,

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Speaker 3: a private mortgage riit. Plorist Capital Group is a lending

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Speaker 3: provider for value ad bridge and fully stabilized commercial real

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Speaker 3: estate loans for cannabis related real estate folks. Be sure

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Speaker 3: to check out their website Equitygroup dot com. That's p

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Speaker 3: E l O r U s e q U I

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Speaker 3: T y g r o U P dot com, or

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Speaker 3: find the man himself on the I G at Rob

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Speaker 3: ccrest r O B s E, C h R I

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Speaker 3: S T. So you can see who you're dealing with.

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Speaker 3: For more information on how to take your entrepreneurship and

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Speaker 3: your aspirations to the next level without further ado, Rob Seacrest.

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Speaker 4: Is in the building up. So, Rob, how did you

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Speaker 4: get involved in this man?

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Speaker 3: How did you did you start buying homes and doing

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Speaker 3: this and that and then get into cannabis or how

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Speaker 3: do you get in this field?

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Speaker 4: Right here? Sure?

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Speaker 6: So we've been lending for decades and we've originated thousands

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Speaker 6: of transactions for billions of dollars. But how we got

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Speaker 6: into the space is our local congressman for you guys

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Speaker 6: as well?

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Speaker 4: Was Dana Robacher. Oh, he's on front of the show.

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Speaker 4: He's still a good friend today.

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Speaker 6: And Dana Roebroker passed the most consequential legislation to ever

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Speaker 6: passed in the cannabis sector, and that was the Robocker

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Speaker 6: Blooming Our Amendment that passed in twenty fourteen. And when

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Speaker 6: that amendment passed, which defunded the Department of Justice from

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Speaker 6: any prosecution of a cannabis related business, my business partner

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Speaker 6: said to me, body.

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Speaker 4: We have the skill set to do this.

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Speaker 6: Let's be the first to do it, and I said,

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Speaker 6: this is going to be a freaking, really tough sector

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Speaker 6: to raise capital for it.

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Speaker 4: But he's like, yeah, but you're going to do it.

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Speaker 6: And so if I would have known how difficult it

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Speaker 6: was going to be, we probably wouldn't have done it.

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Speaker 4: But here we are today. Why is it so difficult?

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Speaker 6: Because first of all, this was all the way back

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Speaker 6: in twenty fourteen, and traditional real estate investors aren't that

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Speaker 6: familiar with this, asked class and nobody had done it yet,

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Speaker 6: and so the crux was traditional real estate investors would

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Speaker 6: have wanted us to lend off of the alternative use,

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Speaker 6: which is not what the property is built for. With

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Speaker 6: these types of properties, the attendant improvements are the cost

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Speaker 6: of improvements are, you know, orders of macitude more than

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Speaker 6: it and then a non canvas property, but they also

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Speaker 6: generate ten to fifteen times more revenue. So they would

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Speaker 6: have wanted us to lend on what it's not. And

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Speaker 6: if we would have compromised on what our principles were

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Speaker 6: and gone that direction, the easier direction, we wouldn't be

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Speaker 6: here today. You've got to lend off of what it

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Speaker 6: actually is to be able to be an effective lender

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Speaker 6: in the space.

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Speaker 2: Right because a lot of times the inflation of it

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Speaker 2: being cannabis, everybody else is going, oh, we want to

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Speaker 2: give get more for the property.

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Speaker 4: Is that what you're correct?

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Speaker 6: So a cannabis value is going to be significantly higher

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Speaker 6: than a non cannabis And also this type of asset

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Speaker 6: traditionally doesn't sell after it's completed. There everybody holds on

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Speaker 6: to them. It's a cash flowing you know, enterprise. They're

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Speaker 6: just looking for efficiencies after that point. So we actually

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Speaker 6: lend off of the replacement cost is the most effective

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Speaker 6: way we believe to analyze these properties.

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Speaker 3: Who is your clients like, is it anybody listening? Is

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Speaker 3: it just a billionaire?

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Speaker 4: Is it? You know? Well, we have two sides to

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Speaker 4: our business.

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Speaker 6: We have our borrowers and we have everything from privately

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Speaker 6: held companies to publicly traded. We have state House, we

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Speaker 6: have Tyson, we have numerous other publicly traded and we

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Speaker 6: have lots of private.

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Speaker 4: Companies in our loan book.

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Speaker 6: But from our investor base, we have over a thousand

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Speaker 6: investors and those are mainly high net worth individuals, but

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Speaker 6: we also do have institutional investors in our structured products.

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Speaker 6: And you know, some of these investors are banks and

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Speaker 6: you know, family offices, asset managers, all kinds of different

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Speaker 6: types of investors to aggregate all the capital we've put together.

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Speaker 2: So with the have we noticed the new banking that

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Speaker 2: they're talking about needs to go to Senate and all this,

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Speaker 2: what are your thoughts on that?

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Speaker 4: Sure?

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Speaker 6: So you know, I'm pretty politically connected through some members

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Speaker 6: of some groups that I'm in, and I got a

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Speaker 6: chance to meet with Senator Danes two months ago, and

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Speaker 6: he and I spoke directly about the safe banking at

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Speaker 6: the time, and he had let me know that he

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Speaker 6: had the sixty votes at that time to get it

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Speaker 6: through fil investors. So we knew this quite some time ago.

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Speaker 6: We had telegraphed that at the time. But more importantly,

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Speaker 6: what I couldn't share is that we've been talking with

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Speaker 6: his staff and other elected official staff. And what was

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Speaker 6: the most important thing I think for people to understand

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Speaker 6: is the velocity of the response from Schumer and the

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Speaker 6: Senate was immediate, and that tells us that if they're

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Speaker 6: responding every single time there's a comment or something going on,

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Speaker 6: that means that Schumer is actually going to get it done.

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Speaker 6: And so this particular time for safe banking or safe

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Speaker 6: bank safer banking, which is now what it is is

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Speaker 6: that the elected officials the Senate and the Congressman would

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Speaker 6: not be telegraphing at this point they that this is

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Speaker 6: going through and burning that political capital unless they had

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Speaker 6: the votes, and.

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Speaker 4: They just wouldn't even pay attention to it.

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Speaker 6: Well, they don't ever take something to a committee vote

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Speaker 6: or a floor or for that matter, floor vote unless

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Speaker 6: they know they've got the path all the way through.

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Speaker 6: You're just burning political capital for no reason. So they've

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Speaker 6: got it all worked out. I'm cautiously optimistic.

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Speaker 4: Time.

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Speaker 3: We've seen this before, right, and yeah, but it was

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Speaker 3: a lot different before.

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Speaker 6: So previously the bill was not already agreed to between

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Speaker 6: the House and the Senate, so it doesn't need to

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Speaker 6: be ratified. And in addition to that, it's the Senate

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Speaker 6: is the choke point. And you'd never, well I shouldn't

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Speaker 6: say never. We didn't have the Senate the sixty votes

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Speaker 6: necessary to get it through. On the Senate side, I'm

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Speaker 6: speaking with Senator Garner and at three o'clock today, and

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Speaker 6: he was the one that got the Safe Banking originally

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Speaker 6: Our States Act originally passed, or he had the votes

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Speaker 6: for the safe banking back under Mitch McConnell.

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Speaker 4: Under the Trump administry.

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Speaker 3: Mitch McConnell, though, is when the one that's been shutting

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Speaker 3: it down. Though for the most part, well, I've been

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Speaker 3: hearing and.

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Speaker 6: Feeling yeah, so this is taking a step back to

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Speaker 6: the Trump administration. This is State's Act and he had

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Speaker 6: the votes back then, and McConnell would not let him

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Speaker 6: take it to a floor vote because of the risk

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Speaker 6: of being a presidential election and those votes being counted

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Speaker 6: against those senators and then the fear of them losing

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Speaker 6: of the Congress. So what I think most people don't

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Speaker 6: understand is in politics, there's a lot more gamesmanship of

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Speaker 6: things that are going on that it's that the actual

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Speaker 6: vote and what's happening there what seems to be the

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Speaker 6: primary thing. There's so many tertiary things happening behind the

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Speaker 6: scene of negotiating of what they're trying to get drawn

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Speaker 6: for other bills that everybody's trying to compromise to get

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Speaker 6: things moved through.

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Speaker 4: And I think most people don't realize that.

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Speaker 3: So as you're saying that, I want to talk about

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Speaker 3: that a little more because is it basically all politics,

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Speaker 3: like blues of you know, a congressman.

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Speaker 4: I'm a congressman, and he's read I'm blue, and I'm

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Speaker 4: going well blue.

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Speaker 3: You know, I'm not gonna say yes unless you say

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Speaker 3: yes to mine, because I need to get this over

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Speaker 3: here that I'm trying to get this.

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Speaker 4: Done for, you know, Louisiana, and you're not supporting this.

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Speaker 3: If you say, you know, yes to that, then maybe

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Speaker 3: I'll let this cannabis bank and safe banking go through. Absolutely, yeah,

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Speaker 3: not knowing that it's the best thing for everybody in

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Speaker 3: the fucking twenty seven states, that it's legal and has

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Speaker 3: nothing to do with the it's right and what's needed

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Speaker 3: and what's smart. It has nothing to do with that.

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Speaker 6: And in fact, and I meet with Corey Booker and

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Speaker 6: all these guys.

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Speaker 4: Yeah, well they're throwing around I like this. You know,

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Speaker 4: I had to educate them right for president that they.

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Speaker 6: This solution for safe banking and everything that they're they're

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Speaker 6: announcing and telegraphing that this will fix banking. There will

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Speaker 6: be no cash in the system, you know, and everybody

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Speaker 6: could bank. That's nothing could be farther from from the

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Speaker 6: actual issue here. So the issue is not that there's

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Speaker 6: no banking. There's eight hundred and four banks doing to

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Speaker 6: positive relations, which is more than fifteen percent of all

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Speaker 6: the banks in the country. We've never seen a transaction

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Speaker 6: that didn't have banking approved from one of our borrowers

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Speaker 6: or their tenants, which is Tier one which is plant touching,

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Speaker 6: or Tier two slash three, which is ancillary. So the

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Speaker 6: issue for banking is that you cannot process credit cards

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Speaker 6: on the federal system the rail and that is a

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Speaker 6: federal and that's not being addressed in this And so

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Speaker 6: if you have to pay with something by cash or

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Speaker 6: ATM or something like that at the dispensary, then you

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Speaker 6: have all that cash build up is still going to

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Speaker 6: be there and then they just start paying everything downstream.

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Speaker 4: So I don't see this being the solution that they

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Speaker 4: are telegraphing out there. I see this as.

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Speaker 6: Being a massive win for the industry and for the

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Speaker 6: employees of the sector where they're not necessarily going to

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Speaker 6: lose their mortgage, their at their mortgages at JP Morgan

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Speaker 6: sins system between important bank and they the bank finds

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Speaker 6: out that they're in the cannabis industry, they might call

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Speaker 6: that mortgage due and they couldn't get refinances.

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Speaker 4: The rates are hired today, so these are It's definitely.

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Speaker 6: Something that's positive for the industry, but it's nowhere nearly

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Speaker 6: as consequential as rescheduling from a schedule one stedu.

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Speaker 4: So it's smoke of mirrors.

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Speaker 3: Here's a little carrot, but you're not getting the pole

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Speaker 3: stew with everything.

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Speaker 4: That's what it sounds like. You're saying, right here, right,

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Speaker 4: it's going to break only coming back. What's his decision? Rob?

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Speaker 4: What could what could be the sacrist solution? It's Cannabis

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Speaker 4: Talking a home. We're right back after this break.

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Speaker 1: You're listening to Cannabis Talk one oh one. Cannabis Talk

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Speaker 1: one oh one, the world's number one source for everything cannabis.

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Speaker 3: If you're looking for quickie folks, check out Quickie pre Rolls.

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Speaker 3: The website is quickipre rolls dot com.

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Speaker 4: That's q U I c k I E.

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Speaker 3: S P R E R O L L s R

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Speaker 3: on the gram quicki pre Rolls with three s's at

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Speaker 3: the end.

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Speaker 4: Everybody loves the Quickie.

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Speaker 3: Rob Seacrest, co founder and presidents of Polorist Capital Group.

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Speaker 3: If you're looking to get in the game, you may

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Speaker 3: want to hit them up or Rob your knowledge.

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Speaker 4: I love it.

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Speaker 3: Your portfolio of people that you speak to is very

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Speaker 3: high that are decision makers in this country. I'm very impressed,

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Speaker 3: to be quite honest with you, if your name's dropping.

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Speaker 3: With that being said, I would think that you have

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Speaker 3: a great outlook on this because I too also believe

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Speaker 3: that this Safe Making Act is a plus and moving

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Speaker 3: in the right direction, but it's still not helping because

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Speaker 3: we need to be able to allow these dispensaries, to

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Speaker 3: allow these patients and clients to use those rails as

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Speaker 3: you mentioned Visa, MasterCard, American Express. Because I've done and

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Speaker 3: dabbled in the processing world, know that there's a bunch

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Speaker 3: of loop arounds and people are probably listening going, what

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Speaker 3: do you mean, I use my credit card at the

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Speaker 3: dispensary I go to I use my debit card. Well,

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Speaker 3: you're using it, but there is a loop around that

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Speaker 3: are using yeah, well not even buying clothing. It's just

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Speaker 3: either a system that's I mean, just look at the

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Speaker 3: receipt folks. It's not saying Joe's dispensary. It's not saying

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Speaker 3: Blues dispensary. And if they are doing it, they're still

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Speaker 3: on a backside rail thing. That they're doing on the

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Speaker 3: back end. That's still so you know, you're you're not

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Speaker 3: seeing what's really going on. And I see it because

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Speaker 3: I know it, and we talked all these processors.

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Speaker 4: We get it.

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Speaker 3: You get it obviously, So what is a better solution

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Speaker 3: rob that you can see.

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Speaker 4: Because I feel like you have something up your sleeve.

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Speaker 6: Sure, so I'm not an expert in the credit processing

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Speaker 6: of that particular thing, but you've got to fix that.

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Speaker 6: So the credit I think that the rescheduling from schedule

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Speaker 6: one to schedule.

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Speaker 4: Three could potentially get it there. Possibly.

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Speaker 6: I'm not an expert in that to be able to

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Speaker 6: answer it. But basically, whatever solutions that people come up

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Speaker 6: with for trying to deconflict state policy from federal policy,

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Speaker 6: there's not everybody's happy with the directions that it goes.

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Speaker 6: Some people it works out good, for some people it doesn't.

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Speaker 6: It just depends on where your interests align. I think

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Speaker 6: that ultimately, what people, most retail people in this country

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Speaker 6: don't realize is that cannabis is only federally illegal because

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Speaker 6: there's a prohibition. And why I'm saying it that way

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Speaker 6: is that if the prohibition is ended on cannabis at

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Speaker 6: the federal level. It doesn't make it federally legal. It

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Speaker 6: just makes it federally not illegal. And why that's important.

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Speaker 6: How I'm saying it that way is it still falls

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Speaker 6: back to the state's rights, and so each state would

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Speaker 6: still need to approve it. Each state has their own

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Speaker 6: compliance and testing, and so it doesn't make it so

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Speaker 6: that that cannabis is federally legal across the state. It's

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Speaker 6: not a constitutional amendment, and I don't ever see that happening.

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Speaker 6: So people really have to understand how government works and

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Speaker 6: how these things play out. So, you know, I do

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Speaker 6: think at some point we will get the end of

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Speaker 6: prohibition on cannabis, and at which point that for sure

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Speaker 6: that would fix the credit card situation.

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Speaker 4: But the issue for.

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Speaker 6: Cannabis has mainly been around anti money laundering, and anti

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Speaker 6: money and laundering is one of the things that I

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Speaker 6: think going from Schedule one to Schedule three you might

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Speaker 6: clear some of these hurdles. It would be clearing some

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Speaker 6: of the issues that banks have because now cannabis, by

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Speaker 6: being Schedule three means that there is a viable means

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Speaker 6: of what that drug is being used for, and that

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Speaker 6: moves it down.

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Speaker 4: So there's a lot of laws in drug or plan Yeah.

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Speaker 3: Yeah, the same thing that these plants that they're making

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Speaker 3: that are killing people out there as well, that they

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Speaker 3: don't call drug.

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Speaker 4: They'll call those a plant.

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Speaker 3: And all those industry folks, could you know the pharmaceutical

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Speaker 3: companies can do whatever they want and have no problem

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Speaker 3: buying a big building, no problem, depositing money, no problem,

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Speaker 3: make it more fentanyl.

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Speaker 6: Yeah, it's it's it's insane. And you know, I'm happy

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Speaker 6: that of our five hundred and forty million that we've

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Speaker 6: put out in seventy four transactions, we think that that

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Speaker 6: represents probably more than fifteen percent of the entire twenty

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Speaker 6: seven billion dollars of revenue per year through our facilities.

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Speaker 6: So that's more than four million square feet. So we're

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Speaker 6: trying to shape provide alternatives to people using opiates and

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Speaker 6: things like that. Whether it's for recreational or for medical use,

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Speaker 6: it's up to the people out there, and we're just

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Speaker 6: for something that's close to my heart is being able

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Speaker 6: to support those businesses and provide alternatives that make it

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Speaker 6: a better path for this country.

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Speaker 4: Wow, what companies, what buildings? Are there? Big names that

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Speaker 4: we know? I mean, you guys have helped a lot.

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Speaker 6: Yeah, So we did Terrace End, which is a publicly

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Speaker 6: traded company. They're probably just I have a billion dollar

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Speaker 6: market cap. We lent forty six million to them on

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Speaker 6: their new Jersey and that all facility. We did the

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Speaker 6: roll up for State House to do loud Pack, Harborside

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Speaker 6: and Oakland.

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Speaker 4: Yeah, and one other brand.

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Speaker 6: I'm just losing my trainer thought on what then now

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Speaker 6: they're name of that brand was. But that was about

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Speaker 6: a seventy seven point seven million transaction. So we have

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Speaker 6: the ability to do very large transactions which banks would never.

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Speaker 4: Be able to do these types of that. That's all

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Speaker 4: is that institution money? Is that private?

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Speaker 6: I mean, so the aggregate of all of our investors

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Speaker 6: is all primarily private. We did we were the first

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Speaker 6: to get investment grade rated, and we did bring in

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Speaker 6: institutional type investors through our bond offering.

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Speaker 4: And we also.

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Speaker 6: Recently closed the first securitization ever closed in the cannabis space.

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Speaker 6: So a couple of things that we did first was

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Speaker 6: getting investment grade rated as a private private company, which

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Speaker 6: nobody had changed. We have the highest rating of any

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Speaker 6: company even concluding publicly traded a flat and then the securitization,

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Speaker 6: which every attorney in the country said would be impossible

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Speaker 6: to do. We cleared a path through for regional, state

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Speaker 6: and federally chartered banks to participate, whether their cannabis friendly

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Speaker 6: or not, in our securitization because it's it's based off

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Speaker 6: the real estate, because it's based off the real estate,

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Speaker 6: and just the way that we were able to structure

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Speaker 6: these things. So we're an institutional asset manager that has

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Speaker 6: come to a sector that needed this type of financing,

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Speaker 6: and we've we've built in the vehicles in which we'll

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Speaker 6: be able to compete directly with banks. So we've got

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Speaker 6: those all in play right now, and come twenty twenty four,

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Speaker 6: twenty twenty five, we'll be able to start tightening in

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Speaker 6: our rates to our borrowers and be able to go

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Speaker 6: directly head tohead with the banks.

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Speaker 4: Now.

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Speaker 2: So in a sense, I mean on a smaller scale,

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Speaker 2: let's just say there's a you know, Harry down in

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Speaker 2: you know Alanto, he owns a license, he has the property,

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Speaker 2: or he's looking for the property. Is that what you

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Speaker 2: would loan on that with something like that, or use

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Speaker 2: this for the whole entire company to grow.

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Speaker 4: Yeah, So we only land on the real estates.

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Speaker 6: You have to own the real estate or be buying

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Speaker 6: real estate, and unfortunately, we have to work with experienced

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Speaker 6: operators that have a proven track record. There's just so

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Speaker 6: many places in this industry. It's so complicated. We can't

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Speaker 6: take the risk of somebody trying to figure it out.

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Speaker 6: So startups, yeah, we wouldn't be able to do that.

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Speaker 6: And then the other thing that we've learned after doing

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Speaker 6: seventy four transactions is that the amount of due diligence

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Speaker 6: and the legal costs to get these transactions done is

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Speaker 6: so disproportionately higher than a traditional transaction that we can't

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Speaker 6: even do transactions anything less than ten million because of

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Speaker 6: the legal fees that are necessary that the borrow has

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Speaker 6: to pay and we have to pay to be able

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Speaker 6: to get these transactions across the Finnis line.

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Speaker 4: For example, the State House transaction was over half a

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Speaker 4: million B. Yeah. So just just and what kind of

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Speaker 4: rates that you guys offering. Yeah, so we have two

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Speaker 4: loan products.

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Speaker 6: Our rates prior to everything going crazy with the rates

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Speaker 6: going up, we're in the mid teens and on our

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Speaker 6: bridge lending product and then are fully stabilized.

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Speaker 4: It was in the low double digits.

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Speaker 6: The what I try to make sure that people understand

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Speaker 6: is those are enormously high rates, but we're lending off

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Speaker 6: of the basis of the replacement costs.

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Speaker 4: So let me just give you an example.

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Speaker 6: If it was a five million dollar purchase for the

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Speaker 6: property and another five million of improvements or build out

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Speaker 6: for ten million costs, we would lend up to six

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Speaker 6: million on that. A bank that same asset would maybe

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Speaker 6: utilize that five million dollar purchase price and then they

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Speaker 6: maybe give you fifty percent value off of that, so

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Speaker 6: two point five million, and then would probably give you

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Speaker 6: another half fifty percent loan of value. So you're looking

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Speaker 6: at one point two five million, sure, and you'll get

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Speaker 6: nine percent there, or you can get six million with

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Speaker 6: US at mid teen rates.

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Speaker 4: So when you're looking at if having to come in

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Speaker 4: with praise all that extra equity which you're.

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Speaker 6: Selling at the worst point, and you're possibly in your

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Speaker 6: firm life where you don't have the cash flow to

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Speaker 6: support it in your stock as little as possible, do

442
00:21:10,560 --> 00:21:12,080
Speaker 6: you want to borrow as much as you can't because

443
00:21:12,080 --> 00:21:13,760
Speaker 6: it's a fixed for a rate of return.

444
00:21:13,920 --> 00:21:15,760
Speaker 4: You only have to pay us back to the note.

445
00:21:15,800 --> 00:21:17,520
Speaker 4: You don't have to pay us back forever as an

446
00:21:17,560 --> 00:21:18,440
Speaker 4: equity investment.

447
00:21:18,800 --> 00:21:21,600
Speaker 3: Wow, that was well said. I followed those numbers around

448
00:21:21,640 --> 00:21:22,640
Speaker 3: a little easy, right there.

449
00:21:22,720 --> 00:21:23,280
Speaker 4: Yeah, Nope.

450
00:21:23,320 --> 00:21:25,639
Speaker 3: Normally I'm like, wait a minute, hauh hoo huh. But

451
00:21:26,240 --> 00:21:28,280
Speaker 3: you're making it very clear on what the banks you

452
00:21:28,520 --> 00:21:31,000
Speaker 3: normally do. You're able to give out a lot more,

453
00:21:31,200 --> 00:21:34,359
Speaker 3: even in a climate where it's cannabis and everybody knows

454
00:21:34,359 --> 00:21:36,680
Speaker 3: it's cannabis. We're going to take a break real quick.

455
00:21:36,720 --> 00:21:39,000
Speaker 3: When we come back, I want to hear the process.

456
00:21:39,560 --> 00:21:42,200
Speaker 3: How many pages? How much life do I got to

457
00:21:42,240 --> 00:21:43,679
Speaker 3: get my firstborn's blood?

458
00:21:44,080 --> 00:21:45,840
Speaker 4: What do I got to give to do to sign

459
00:21:45,960 --> 00:21:48,159
Speaker 4: up to get ten million? It's Cannabis Talk one on one.

460
00:21:48,320 --> 00:21:49,760
Speaker 4: I'll be right back after this brink.

461
00:21:50,440 --> 00:22:03,040
Speaker 1: You're listening to Cannabis Talk one on Cannabis Talk one

462
00:22:03,080 --> 00:22:08,160
Speaker 1: oh one, the world's number one source for everything cannabis.

463
00:22:08,200 --> 00:22:10,400
Speaker 4: I got to tell you guys about Chalmers Wellness.

464
00:22:10,400 --> 00:22:14,320
Speaker 3: It's a full service rehabilitation and recovery facility. Plus he's

465
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Speaker 3: Tony for Financial Friday's personal doctor. They work with patients

466
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Speaker 3: to identify, treat, and manage a wide variety of issues,

467
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Speaker 3: including weight loss or gain, digestive problems, chronic for two

468
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Speaker 3: pain injuries, sciatic diseases, chiropractic problems, FI fibromyelogia, carpal tunnel syndrome,

469
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Speaker 3: and planner fast side.

470
00:22:32,040 --> 00:22:33,960
Speaker 4: Is so many things they can do for you, guys,

471
00:22:33,960 --> 00:22:34,400
Speaker 4: you might.

472
00:22:34,720 --> 00:22:37,920
Speaker 3: Matter of fact, medical doctors regularly prefer patients to doctor

473
00:22:37,960 --> 00:22:41,480
Speaker 3: Chalmers when traditional medications and treatment are not working for

474
00:22:41,520 --> 00:22:45,520
Speaker 3: their patients. But more information, check out the website Chalmerswellness

475
00:22:45,560 --> 00:22:48,360
Speaker 3: dot com or call them direct area code two one

476
00:22:48,440 --> 00:22:51,720
Speaker 3: four four four six five three zero zero. He's in

477
00:22:51,760 --> 00:22:54,399
Speaker 3: the Dallas area. He's actually working with the Dallas Cowboys.

478
00:22:54,440 --> 00:22:56,000
Speaker 3: That's why they're working doing so well this year.

479
00:22:56,200 --> 00:22:59,119
Speaker 4: The Cowboys are gonna win it all the time. I

480
00:22:59,160 --> 00:23:01,880
Speaker 4: want to thank everybody. I'm just he is really working

481
00:23:01,880 --> 00:23:04,240
Speaker 4: with the Cowboy exactly, Amir.

482
00:23:04,480 --> 00:23:06,320
Speaker 3: I want to thank you for doing what you do,

483
00:23:06,480 --> 00:23:10,479
Speaker 3: always being open to do whatever. Adrian Alex c Alex

484
00:23:10,560 --> 00:23:13,680
Speaker 3: A Mondo, Madison holding it down over there, doing so well.

485
00:23:13,680 --> 00:23:15,359
Speaker 3: Put the camera on you guys over there when I'm

486
00:23:15,400 --> 00:23:19,400
Speaker 3: mentioning you. Elber, Teddy the show Dog, Daniel connor Vey,

487
00:23:19,560 --> 00:23:24,720
Speaker 3: Kicky Camp, Baxter Beach, barceloar Ali Muffins Sunday Goldie Brother Pitt,

488
00:23:24,720 --> 00:23:29,880
Speaker 3: Mark Carnes, Chris Frankino and Elvis, Jennifer and Erica. Thank

489
00:23:29,880 --> 00:23:32,200
Speaker 3: you guys so much for doing what you guys do.

490
00:23:32,520 --> 00:23:37,439
Speaker 3: I really appreciate everybody here. Rob Seacrest, co founder and

491
00:23:37,520 --> 00:23:41,320
Speaker 3: presidents of Polaris Capital Group. If you're looking to grow

492
00:23:41,359 --> 00:23:44,159
Speaker 3: your company, you guys, go check out their website at

493
00:23:44,240 --> 00:23:49,000
Speaker 3: Poloris Equitygroup dot com. Give me the breakdown, Rob, how

494
00:23:49,080 --> 00:23:51,919
Speaker 3: long I'm me and Blue owned a company. We have

495
00:23:52,000 --> 00:23:54,800
Speaker 3: a big dispensary. We have our grow whatever it is,

496
00:23:54,840 --> 00:23:57,320
Speaker 3: and we want to make it bigger. We've been around

497
00:23:57,359 --> 00:23:59,959
Speaker 3: for five years, so we have a track record.

498
00:24:00,119 --> 00:24:03,359
Speaker 4: Now a different ones. We need one on one.

499
00:24:03,840 --> 00:24:06,840
Speaker 3: So we want to do a ten million because it

500
00:24:07,119 --> 00:24:10,600
Speaker 3: sounds like ten millions the low in buy so you

501
00:24:10,640 --> 00:24:12,560
Speaker 3: know that's the magic number to play with you guys.

502
00:24:12,880 --> 00:24:15,040
Speaker 3: So we want to do ten million because we want

503
00:24:15,040 --> 00:24:16,920
Speaker 3: to do something else and we're trying to build out

504
00:24:17,119 --> 00:24:18,040
Speaker 3: our facility.

505
00:24:18,320 --> 00:24:20,400
Speaker 4: What's that process look like for us? Sure?

506
00:24:20,440 --> 00:24:23,359
Speaker 6: So it would start by you submitting the information on

507
00:24:24,160 --> 00:24:27,680
Speaker 6: that loan request, which would be what is the existing

508
00:24:27,720 --> 00:24:31,280
Speaker 6: debt on that property or what's the purchase price? What's

509
00:24:31,320 --> 00:24:33,840
Speaker 6: going to be the buildout of the property, what's the scope,

510
00:24:33,920 --> 00:24:36,199
Speaker 6: scope of work, how much? How much is the actual budget,

511
00:24:36,320 --> 00:24:39,239
Speaker 6: what are the line items for that budget. And then

512
00:24:39,280 --> 00:24:41,360
Speaker 6: we also need to look at the OpCo or the

513
00:24:41,560 --> 00:24:44,040
Speaker 6: or the tenant the operator it's licensed as well.

514
00:24:44,080 --> 00:24:45,479
Speaker 4: We need to verify your license.

515
00:24:45,520 --> 00:24:48,520
Speaker 6: And so we're going to divide that transaction into two parts,

516
00:24:48,560 --> 00:24:52,240
Speaker 6: the property company which is our actual primary borrower, and

517
00:24:52,280 --> 00:24:55,359
Speaker 6: then the OpCo, which is the tenant, and we're going

518
00:24:55,400 --> 00:24:58,240
Speaker 6: to underwrite both of those elements for that transaction and

519
00:24:58,280 --> 00:24:59,600
Speaker 6: make sure that that it works.

520
00:25:00,320 --> 00:25:02,760
Speaker 4: We're going to record a first lean on that property.

521
00:25:02,760 --> 00:25:05,120
Speaker 6: We're also going to take a share pledge in the

522
00:25:05,160 --> 00:25:07,920
Speaker 6: OpCo because we need to have the collateral.

523
00:25:07,480 --> 00:25:08,200
Speaker 4: Of that license.

524
00:25:08,280 --> 00:25:11,080
Speaker 6: If for some reason you're unsuccessful, we need to be

525
00:25:11,080 --> 00:25:13,560
Speaker 6: able to replace that tenant in that property with somebody else,

526
00:25:13,600 --> 00:25:17,320
Speaker 6: and we that licenses is important. We're also going to

527
00:25:17,320 --> 00:25:22,120
Speaker 6: have to look at your individual, corporate, your individual financial statements.

528
00:25:22,400 --> 00:25:25,679
Speaker 6: This is a traditional bank loan process, personal and corporate

529
00:25:25,880 --> 00:25:28,800
Speaker 6: or corporate guarantees. If you're publicly traded of people that

530
00:25:28,920 --> 00:25:33,320
Speaker 6: would qualify for that size loan both on net worth,

531
00:25:33,920 --> 00:25:37,840
Speaker 6: liquidity and income. So this is by no means just

532
00:25:37,880 --> 00:25:41,280
Speaker 6: the transaction that anybody could just come up and put

533
00:25:41,280 --> 00:25:44,880
Speaker 6: their equity up, and if there's equity coming in from investors,

534
00:25:45,240 --> 00:25:47,320
Speaker 6: we're going to source all that money as well. We're

535
00:25:47,320 --> 00:25:50,240
Speaker 6: going to verify where that came from, and those investors,

536
00:25:50,240 --> 00:25:52,840
Speaker 6: if it wasn't didn't come from you, they're going to

537
00:25:52,840 --> 00:25:55,679
Speaker 6: be to be the ones that are guaranteeing or code guaranteeing.

538
00:25:56,119 --> 00:25:57,840
Speaker 6: So a lot of times people will come to us

539
00:25:57,880 --> 00:26:01,239
Speaker 6: that that had investors that raise the capital, and so

540
00:26:01,920 --> 00:26:04,800
Speaker 6: in that scenario, we need to bring those guys to

541
00:26:04,880 --> 00:26:06,080
Speaker 6: the errantory.

542
00:26:06,320 --> 00:26:07,320
Speaker 4: So they know what's going on.

543
00:26:07,400 --> 00:26:10,760
Speaker 6: Yeah, everybody, we are everybody. We're going to make sure

544
00:26:10,800 --> 00:26:14,080
Speaker 6: that everything everybody's interest is aligned, everybody is on the

545
00:26:14,119 --> 00:26:16,760
Speaker 6: same page and knows exactly what's going on. Then from

546
00:26:16,760 --> 00:26:21,480
Speaker 6: there we're going to analyze your business, your performance, your budget.

547
00:26:21,840 --> 00:26:25,280
Speaker 6: But more importantly, we have the data of all thirty

548
00:26:25,400 --> 00:26:28,919
Speaker 6: thousand businesses that are licensed across the country. We know

549
00:26:29,160 --> 00:26:31,840
Speaker 6: every single owner of every single one of those licenses,

550
00:26:31,880 --> 00:26:34,680
Speaker 6: what type of licenses they have, who own, what real

551
00:26:34,800 --> 00:26:37,400
Speaker 6: estate they're situated at, is it been built, And we're

552
00:26:37,440 --> 00:26:40,840
Speaker 6: monitoring every single state what the size and capacity is

553
00:26:40,840 --> 00:26:43,280
Speaker 6: to that market for each part of the supply train,

554
00:26:43,359 --> 00:26:46,280
Speaker 6: and so we know what the current universe of cannabis

555
00:26:46,280 --> 00:26:50,280
Speaker 6: consumption is in that state, whether it's only medical, whether

556
00:26:50,320 --> 00:26:52,680
Speaker 6: it's recreational, and where they're at in what we'd call

557
00:26:52,720 --> 00:26:55,600
Speaker 6: the maturation to a fully stabilized market. So it's something

558
00:26:55,640 --> 00:26:58,280
Speaker 6: that we have more insight than anybody in the world.

559
00:26:58,320 --> 00:27:00,879
Speaker 6: So we could pretty much understand and where the market

560
00:27:00,920 --> 00:27:03,040
Speaker 6: is more than anybody in the country because we see

561
00:27:03,080 --> 00:27:05,600
Speaker 6: more transactions, we have more data. And why we use

562
00:27:05,640 --> 00:27:08,560
Speaker 6: that information is that we've been able to glean for

563
00:27:08,600 --> 00:27:12,399
Speaker 6: the last several years of what the average mean price

564
00:27:12,520 --> 00:27:15,480
Speaker 6: is to build, what the average energy cost is, what

565
00:27:15,560 --> 00:27:18,040
Speaker 6: the price is for per per square foot, what you

566
00:27:18,080 --> 00:27:20,800
Speaker 6: can grow at different latitudes if it's indoor and outdoor,

567
00:27:21,400 --> 00:27:23,440
Speaker 6: and we factor all this in and so now we

568
00:27:23,520 --> 00:27:25,920
Speaker 6: know when you submit your numbers to us, we can

569
00:27:25,920 --> 00:27:29,119
Speaker 6: look at that and say you are way off either

570
00:27:29,240 --> 00:27:31,120
Speaker 6: underperforming or overperforming what.

571
00:27:31,080 --> 00:27:32,880
Speaker 4: The mean is, and that's okay.

572
00:27:33,080 --> 00:27:34,800
Speaker 6: We just need to explain to it why is it

573
00:27:34,840 --> 00:27:36,520
Speaker 6: that you think that this is the case when we

574
00:27:36,560 --> 00:27:39,159
Speaker 6: have all this data, and if you can't explain that

575
00:27:39,240 --> 00:27:41,040
Speaker 6: to us, then we're probably going to tighten it up

576
00:27:41,080 --> 00:27:42,960
Speaker 6: and say, we're going to have to make some adjustments

577
00:27:42,960 --> 00:27:46,280
Speaker 6: in the underwriting to bring you to where we believe.

578
00:27:46,000 --> 00:27:46,960
Speaker 4: Is the mean average for this.

579
00:27:47,480 --> 00:27:49,480
Speaker 6: On the other side, we also have all the data

580
00:27:49,480 --> 00:27:53,080
Speaker 6: from our existing borrowers, and so we know who's outperformed

581
00:27:53,119 --> 00:27:55,440
Speaker 6: in our book and who's underperformed, and we've learned from

582
00:27:55,480 --> 00:27:58,199
Speaker 6: all of them what it was that they did to

583
00:27:58,440 --> 00:28:01,400
Speaker 6: add thirty percent to their yields, what they did to

584
00:28:01,520 --> 00:28:05,080
Speaker 6: reduce their labor costs by eighty ninety percent. You share that,

585
00:28:05,320 --> 00:28:07,720
Speaker 6: so we do anonymous that data and we push that

586
00:28:07,840 --> 00:28:10,800
Speaker 6: back out. So on the underwriting process, when you come

587
00:28:10,840 --> 00:28:14,480
Speaker 6: to us with your transaction, we'll say, look, your numbers

588
00:28:14,480 --> 00:28:19,439
Speaker 6: are okay, you cover the transaction, but we're willing to

589
00:28:19,600 --> 00:28:22,040
Speaker 6: add these elements to the loan so that you can

590
00:28:22,119 --> 00:28:25,240
Speaker 6: remain competitive in the landscape against your peers.

591
00:28:25,720 --> 00:28:27,080
Speaker 4: Wow, that's awesome.

592
00:28:27,119 --> 00:28:29,480
Speaker 3: Actually, that sounds like a lot of things are former

593
00:28:29,520 --> 00:28:33,199
Speaker 3: President's going through right now all the assets and make it.

594
00:28:33,200 --> 00:28:34,520
Speaker 4: But if you're trying to make them look.

595
00:28:34,359 --> 00:28:36,640
Speaker 2: Bigger or make them look smaller, what happens You guys

596
00:28:36,680 --> 00:28:39,560
Speaker 2: got the data when it becomes if it's not federally

597
00:28:39,640 --> 00:28:43,520
Speaker 2: legal or banking does get involved. And you guys just

598
00:28:43,640 --> 00:28:46,160
Speaker 2: lower your rates and be competitive and stay in the game,

599
00:28:46,400 --> 00:28:47,600
Speaker 2: or how does that work?

600
00:28:47,640 --> 00:28:50,880
Speaker 4: I mean, because it may happen, right.

601
00:28:50,800 --> 00:28:53,640
Speaker 6: Yeah, So we do fully expect there to be a

602
00:28:53,760 --> 00:28:57,000
Speaker 6: legislation that deconflicts state policy from federal policy, whatever that

603
00:28:57,080 --> 00:29:01,360
Speaker 6: might be in different timelines. Most likely the banks are

604
00:29:01,760 --> 00:29:03,520
Speaker 6: are never going to be able to lend on a

605
00:29:03,560 --> 00:29:07,160
Speaker 6: specialty asset class like this ever to the way that

606
00:29:07,200 --> 00:29:11,120
Speaker 6: we can. And that's because of the specialty use nature.

607
00:29:11,160 --> 00:29:14,560
Speaker 6: So cannabis cultivation facilities typically, for example in California, you

608
00:29:14,600 --> 00:29:17,280
Speaker 6: have to be in a green zone. Typically secondary markets

609
00:29:17,480 --> 00:29:19,040
Speaker 6: banks aren't going to do that. Even if they could

610
00:29:19,080 --> 00:29:20,560
Speaker 6: take one down, then they're going to have too much

611
00:29:20,560 --> 00:29:23,479
Speaker 6: geographic concentration in that particular area. So they're never going

612
00:29:23,520 --> 00:29:25,400
Speaker 6: to be a fit that's a specialized lender. They're never

613
00:29:25,400 --> 00:29:27,480
Speaker 6: going to have the data access that we have, and

614
00:29:27,560 --> 00:29:29,680
Speaker 6: most likely they're never going to be able to lend

615
00:29:29,720 --> 00:29:34,760
Speaker 6: off the cannabis replacement costs, even if the cannabis is deconflicted,

616
00:29:34,800 --> 00:29:38,440
Speaker 6: you know, from state policy from federal policy. But we

617
00:29:38,480 --> 00:29:41,480
Speaker 6: do expect other competition. We do expect some lenders and

618
00:29:41,480 --> 00:29:43,760
Speaker 6: some asset managers to come head to head with us,

619
00:29:44,040 --> 00:29:47,040
Speaker 6: and so that's why we've structured the combination of debt

620
00:29:47,080 --> 00:29:50,360
Speaker 6: and equity products. So we have our own line of credit,

621
00:29:50,600 --> 00:29:53,120
Speaker 6: we have our own bonds that we do with institutional investors,

622
00:29:53,120 --> 00:29:55,880
Speaker 6: We have our own securitization. We have a mix of

623
00:29:55,960 --> 00:29:59,880
Speaker 6: other tools that will start increasing our debt to equity

624
00:30:00,160 --> 00:30:02,840
Speaker 6: leverage of the fund and be able to be competitive

625
00:30:02,920 --> 00:30:05,320
Speaker 6: against banks if if, if, and when that becomes, when

626
00:30:05,320 --> 00:30:06,280
Speaker 6: it's Apple sapples.

627
00:30:06,360 --> 00:30:09,320
Speaker 3: Wow, man, you guys gotta let you said. You guys

628
00:30:09,360 --> 00:30:11,920
Speaker 3: have done billions in your seventy five transactions, or.

629
00:30:12,880 --> 00:30:15,120
Speaker 6: More than half a billion in this sector. We've done

630
00:30:15,200 --> 00:30:16,760
Speaker 6: billions prior to coming in.

631
00:30:17,000 --> 00:30:20,400
Speaker 2: And the last and final hard question, how many people default?

632
00:30:21,720 --> 00:30:23,960
Speaker 4: So you know what I mean? Yeah?

633
00:30:24,000 --> 00:30:26,520
Speaker 3: So the building though, I mean they owned the building

634
00:30:26,520 --> 00:30:28,760
Speaker 3: and the license, well, they don't define and they end

635
00:30:28,840 --> 00:30:30,280
Speaker 3: up they end up with firing at all.

636
00:30:30,360 --> 00:30:32,040
Speaker 4: Yeah. But I mean, does I mean, is this something

637
00:30:32,040 --> 00:30:35,280
Speaker 4: that you've noticed? How many have? Yeah? Is it? Quite

638
00:30:35,320 --> 00:30:37,120
Speaker 4: a few? As seventy plus, So.

639
00:30:37,120 --> 00:30:39,400
Speaker 6: We have to be prepared for that. In every transaction

640
00:30:39,960 --> 00:30:42,560
Speaker 6: out of seventy four, we had one that.

641
00:30:42,600 --> 00:30:44,240
Speaker 4: We took back.

642
00:30:44,800 --> 00:30:47,640
Speaker 6: We we sold that for non cannabis values and it

643
00:30:47,720 --> 00:30:49,360
Speaker 6: was just an easier way to get out of that one.

644
00:30:49,680 --> 00:30:51,959
Speaker 6: We have another one that we took back in Humble

645
00:30:52,200 --> 00:30:55,560
Speaker 6: in that particular property. We have brought in State House

646
00:30:55,600 --> 00:30:58,560
Speaker 6: to operate that state that property for us, and that's

647
00:30:58,560 --> 00:31:00,840
Speaker 6: going to be an amazing transact on our books. It's

648
00:31:00,880 --> 00:31:04,080
Speaker 6: not what we want to take for sake it to do,

649
00:31:04,440 --> 00:31:06,840
Speaker 6: but we have to be prepared to complete the build

650
00:31:06,920 --> 00:31:09,200
Speaker 6: part of the business, put the operator in, and then

651
00:31:09,280 --> 00:31:11,200
Speaker 6: sell that acid after the fact. You can't do it

652
00:31:11,240 --> 00:31:13,240
Speaker 6: on a specialty asset unless it's performing.

653
00:31:13,360 --> 00:31:15,280
Speaker 2: So you've brought in state House to operate it because

654
00:31:15,320 --> 00:31:17,440
Speaker 2: you've seen their numbers. You watch what they're doing, so

655
00:31:17,480 --> 00:31:18,959
Speaker 2: you just move them right in.

656
00:31:19,200 --> 00:31:22,680
Speaker 4: Ask what a brilliant idea? Well, it's just it helps

657
00:31:22,680 --> 00:31:23,200
Speaker 4: you not lose.

658
00:31:23,400 --> 00:31:27,200
Speaker 6: It's fantastic, right. We realize that that's not our expertise.

659
00:31:27,280 --> 00:31:28,880
Speaker 6: It would be a bad use of our time. So

660
00:31:29,200 --> 00:31:32,920
Speaker 6: we're going to get that now. Typically you know, hopefully

661
00:31:32,920 --> 00:31:35,960
Speaker 6: it doesn't come to that with a transaction. But to

662
00:31:36,080 --> 00:31:38,600
Speaker 6: no fault of these guys own there's things that just

663
00:31:38,720 --> 00:31:41,680
Speaker 6: change in the landscape out there. The costs start going

664
00:31:41,760 --> 00:31:44,880
Speaker 6: up on their build, they get delayed because they had

665
00:31:44,880 --> 00:31:47,680
Speaker 6: somebody that was running the construction project that was way

666
00:31:47,680 --> 00:31:51,920
Speaker 6: over their skis and they burned up their interestries are

667
00:31:51,960 --> 00:31:54,400
Speaker 6: just trying to figure things out, and now that transaction

668
00:31:54,560 --> 00:31:56,880
Speaker 6: is technically in default because they're never going to have

669
00:31:56,960 --> 00:31:58,840
Speaker 6: enough interestries or of remaining left to be able to

670
00:31:59,080 --> 00:32:01,880
Speaker 6: fund that de bleet that transaction. So if they're a

671
00:32:01,880 --> 00:32:04,680
Speaker 6: good sponsor of good steward of the capital, we will

672
00:32:04,680 --> 00:32:07,080
Speaker 6: do everything that we can to work with them as

673
00:32:07,080 --> 00:32:11,240
Speaker 6: long as we find that they're doing what it was necessary.

674
00:32:10,760 --> 00:32:11,400
Speaker 4: From their side.

675
00:32:11,440 --> 00:32:13,719
Speaker 6: Now we have limits of what we can do, so

676
00:32:13,880 --> 00:32:16,680
Speaker 6: you may need to bring in an additional equity check

677
00:32:16,760 --> 00:32:19,040
Speaker 6: to match what we're going to increase in proceeds to

678
00:32:19,120 --> 00:32:21,840
Speaker 6: do that that work out, But it is the enormous,

679
00:32:22,040 --> 00:32:23,560
Speaker 6: enormous amount of bandwidth.

680
00:32:23,160 --> 00:32:24,800
Speaker 4: For us to have to take back a property. And

681
00:32:24,800 --> 00:32:27,320
Speaker 4: it's the last thing we ever ever ever want to do.

682
00:32:27,360 --> 00:32:30,280
Speaker 4: Oh yeah, keep paying, we don't want it. My in

683
00:32:30,360 --> 00:32:30,920
Speaker 4: my career.

684
00:32:30,960 --> 00:32:33,480
Speaker 6: In two thousand and nine, we took we foreclosed on

685
00:32:33,600 --> 00:32:36,960
Speaker 6: hundreds of properties. I've personally repositioned one hundred and twenty

686
00:32:36,960 --> 00:32:40,840
Speaker 6: of those. It is the last thing in my freaking we.

687
00:32:40,880 --> 00:32:43,360
Speaker 4: Want to do. Everyone don't give me away from it.

688
00:32:43,520 --> 00:32:45,560
Speaker 4: And do you guys, do you guys leverage the license

689
00:32:45,600 --> 00:32:49,960
Speaker 4: as well? Do we? Yeah? Is the loan based on

690
00:32:50,000 --> 00:32:52,000
Speaker 4: the property as well as as a license, that's what

691
00:32:52,080 --> 00:32:52,719
Speaker 4: you said earlier?

692
00:32:53,040 --> 00:32:55,680
Speaker 6: Yeah, great question, But I'm going to delineate, so we

693
00:32:55,720 --> 00:32:58,080
Speaker 6: do colladalyze it, but we don't give any value to it.

694
00:32:58,600 --> 00:33:01,320
Speaker 4: Gotcha? Well sir, that's awesome.

695
00:33:01,480 --> 00:33:04,760
Speaker 2: Well listen, is there anything else that we forgot here

696
00:33:04,800 --> 00:33:06,400
Speaker 2: that you want to bring up before we let you

697
00:33:06,440 --> 00:33:07,040
Speaker 2: get on out of here?

698
00:33:07,080 --> 00:33:07,280
Speaker 4: Yeah.

699
00:33:07,320 --> 00:33:09,239
Speaker 6: I think one thing that a lot of people don't know,

700
00:33:09,400 --> 00:33:11,360
Speaker 6: and I don't know if you guys know this as well,

701
00:33:11,560 --> 00:33:14,120
Speaker 6: is that there is a federal system of licenses out

702
00:33:14,120 --> 00:33:16,480
Speaker 6: there as well, and most people have no clue that

703
00:33:16,520 --> 00:33:17,480
Speaker 6: this exists.

704
00:33:17,480 --> 00:33:20,080
Speaker 4: So the DEA has licenses as well.

705
00:33:20,240 --> 00:33:23,080
Speaker 6: The University of Mississippi was the first, I think forty

706
00:33:23,160 --> 00:33:27,840
Speaker 6: years ago. Today there are seven cultivation licenses, which the

707
00:33:27,960 --> 00:33:29,000
Speaker 6: University of Michigan was.

708
00:33:30,240 --> 00:33:31,360
Speaker 4: Mississippi is one of them.

709
00:33:31,800 --> 00:33:34,400
Speaker 6: We lent on we did the first loan to another

710
00:33:34,440 --> 00:33:37,560
Speaker 6: one and Desert Hot Springs. And what's different about these

711
00:33:37,640 --> 00:33:40,960
Speaker 6: licenses is that they are totally legal today. They're not

712
00:33:41,000 --> 00:33:43,200
Speaker 6: affected by two adye they could go on the public

713
00:33:43,520 --> 00:33:47,280
Speaker 6: major stock exchanges, and they can cross state lines. They

714
00:33:47,360 --> 00:33:52,720
Speaker 6: must stay within research for who the their counterparties are

715
00:33:52,760 --> 00:33:56,560
Speaker 6: for that, but they can sell to Department of Homeland Security,

716
00:33:56,600 --> 00:33:59,360
Speaker 6: the veterans and all this thing. So most people don't

717
00:33:59,360 --> 00:34:02,000
Speaker 6: aren't even a that there's a whole nother license system

718
00:34:02,320 --> 00:34:05,280
Speaker 6: different than the states, that the state medical license system,

719
00:34:05,280 --> 00:34:08,040
Speaker 6: which is is not really medical in any any real,

720
00:34:08,280 --> 00:34:09,160
Speaker 6: real meaningful way.

721
00:34:09,520 --> 00:34:11,520
Speaker 2: And is that Is that what we're looking at because

722
00:34:11,719 --> 00:34:14,400
Speaker 2: I'm hearing you know through through the gravevine that the

723
00:34:14,400 --> 00:34:17,560
Speaker 2: announcements served out to be made, that you know that

724
00:34:17,560 --> 00:34:21,719
Speaker 2: that the UH they're going to start allowing it through

725
00:34:21,719 --> 00:34:23,239
Speaker 2: medical insurance, right?

726
00:34:23,360 --> 00:34:26,200
Speaker 4: Is this what's gonna So you need to have research

727
00:34:26,280 --> 00:34:27,520
Speaker 4: to prove what it is.

728
00:34:28,000 --> 00:34:30,960
Speaker 6: And it's a totally different channel, but that's we'll have

729
00:34:31,000 --> 00:34:33,560
Speaker 6: to see which way it goes. So this particular channel

730
00:34:33,680 --> 00:34:37,000
Speaker 6: is just for doing research. It doesn't necessarily mean that

731
00:34:37,080 --> 00:34:42,360
Speaker 6: they could sell products to retail customers because that's outside

732
00:34:42,400 --> 00:34:44,399
Speaker 6: of that chain. But to be able to get ever

733
00:34:44,440 --> 00:34:47,640
Speaker 6: get it approved for an insurance company, for the state's

734
00:34:47,800 --> 00:34:51,080
Speaker 6: UH license people, it needs to have research completed. So

735
00:34:51,360 --> 00:34:54,400
Speaker 6: that's what we're we're we're helping to provide the capital

736
00:34:54,480 --> 00:34:56,640
Speaker 6: for these researchers to be able to.

737
00:34:56,560 --> 00:34:59,520
Speaker 4: Have this information. So look, we're just trying.

738
00:34:59,280 --> 00:35:01,600
Speaker 6: To accelerate the problem process so that people aren't having

739
00:35:01,640 --> 00:35:04,279
Speaker 6: to raise equity from day one, every single and just

740
00:35:04,280 --> 00:35:05,200
Speaker 6: getting annihilated.

741
00:35:05,280 --> 00:35:06,840
Speaker 4: They do all the work and they get none of

742
00:35:06,880 --> 00:35:08,799
Speaker 4: the money. Are you worldwide or nationwide?

743
00:35:08,840 --> 00:35:12,560
Speaker 6: We're nationwide, but we have underwritten and looked at stuff worldwide,

744
00:35:13,200 --> 00:35:16,160
Speaker 6: and we're just so busy here that there's no reason

745
00:35:16,200 --> 00:35:19,520
Speaker 6: for us to start looking at that stuff yet. And

746
00:35:19,560 --> 00:35:22,080
Speaker 6: there's some problems in different parts of the world. So

747
00:35:22,480 --> 00:35:25,239
Speaker 6: the European Union we looked at very closely, but they

748
00:35:25,280 --> 00:35:27,640
Speaker 6: had a kind of what we call a systemic issue

749
00:35:27,719 --> 00:35:29,960
Speaker 6: in the beginning. When they started their license, they allowed

750
00:35:30,080 --> 00:35:33,640
Speaker 6: importation day one. And if if you give three months

751
00:35:33,640 --> 00:35:35,920
Speaker 6: off to your employees and you've got the highest energy

752
00:35:35,960 --> 00:35:38,799
Speaker 6: costs and all of Europe in Germany, and you're going

753
00:35:38,880 --> 00:35:41,400
Speaker 6: to allow importation, there's just no way you could compete

754
00:35:41,440 --> 00:35:43,239
Speaker 6: with somebody that's importing into your own country, So you

755
00:35:43,280 --> 00:35:44,320
Speaker 6: just blew up your own market.

756
00:35:44,800 --> 00:35:47,200
Speaker 3: Let me ask you, with all your research that you know,

757
00:35:47,239 --> 00:35:49,160
Speaker 3: I've been thinking of this question in my head and

758
00:35:49,200 --> 00:35:53,440
Speaker 3: seeing all these states and giving loans everywhere. Where's the

759
00:35:53,480 --> 00:35:56,640
Speaker 3: best bang for the buck that you see? Because you're

760
00:35:56,719 --> 00:35:59,560
Speaker 3: seeing all these operations, You're seeing the cost of the building,

761
00:35:59,600 --> 00:36:01,960
Speaker 3: you're seeing what they make, You're looking at all this

762
00:36:02,160 --> 00:36:05,359
Speaker 3: underwriting of the product that's being produced. What is your

763
00:36:05,440 --> 00:36:08,440
Speaker 3: theory on this is the place to probably get your

764
00:36:08,480 --> 00:36:09,520
Speaker 3: best bang for the buck?

765
00:36:09,920 --> 00:36:12,320
Speaker 4: Yeah, So I would take it a little bit differently.

766
00:36:12,480 --> 00:36:14,520
Speaker 6: So I think that you want to specialize in what

767
00:36:14,560 --> 00:36:17,319
Speaker 6: you're good at and not go chase the market. It's

768
00:36:17,360 --> 00:36:20,400
Speaker 6: just too complicated to figure it out that way. And

769
00:36:20,520 --> 00:36:22,839
Speaker 6: even if you were to go at it and look

770
00:36:22,840 --> 00:36:25,360
Speaker 6: at our data and see what each of these markets

771
00:36:25,400 --> 00:36:29,480
Speaker 6: is evolving. What California, for example, all you hear about

772
00:36:29,520 --> 00:36:32,200
Speaker 6: is the alto wholesale market, and it's how it's.

773
00:36:32,040 --> 00:36:33,120
Speaker 4: Not doing well. Well.

774
00:36:33,160 --> 00:36:36,240
Speaker 6: You've got basically one crop coming out once a year.

775
00:36:36,640 --> 00:36:38,840
Speaker 6: That's the most inferior product that there is, and it

776
00:36:38,880 --> 00:36:44,120
Speaker 6: can't compete against greenhouses or indoor flower So those indoor

777
00:36:44,160 --> 00:36:47,160
Speaker 6: facilities can perpetually harvest crop products, and as a brand

778
00:36:47,160 --> 00:36:51,280
Speaker 6: starts to expand, they can't rely on the inconsistent cost

779
00:36:51,360 --> 00:36:54,640
Speaker 6: and or quality coming from outdoor, So that market we

780
00:36:54,719 --> 00:36:58,640
Speaker 6: knew was going to eventually be reduced because the brands

781
00:36:58,640 --> 00:37:01,319
Speaker 6: are now making investments in their own facilities, and so

782
00:37:01,800 --> 00:37:03,279
Speaker 6: this is just part of what we would call the

783
00:37:03,320 --> 00:37:06,840
Speaker 6: maturation to a fully stabilized market in each state. And

784
00:37:06,880 --> 00:37:11,160
Speaker 6: there's a different path path that it goes for limited

785
00:37:11,160 --> 00:37:14,680
Speaker 6: license versus unlimited, and how medical rolls out, and then

786
00:37:14,719 --> 00:37:18,120
Speaker 6: it goes to recreational or concurrently. And it also matters

787
00:37:18,160 --> 00:37:21,040
Speaker 6: what latitudes you're at if you've got outdoor, So all

788
00:37:21,080 --> 00:37:23,239
Speaker 6: of these things have factors. So what we could tell

789
00:37:23,280 --> 00:37:28,400
Speaker 6: you today is that California has an additional fifteen hundred

790
00:37:28,440 --> 00:37:30,960
Speaker 6: dispensaries that would be needed to be able to support

791
00:37:31,000 --> 00:37:34,360
Speaker 6: the entire population. But that's not perfect data because seventy

792
00:37:34,400 --> 00:37:37,160
Speaker 6: percent of the counties in California are still non Cannabis

793
00:37:37,560 --> 00:37:39,400
Speaker 6: are still illegal in those counties, but you might have

794
00:37:39,440 --> 00:37:41,880
Speaker 6: a city in that county that is legal, like Desert

795
00:37:41,920 --> 00:37:45,319
Speaker 6: Hot Springs where riverside is not legal or they're not

796
00:37:45,400 --> 00:37:48,680
Speaker 6: pro cannabis, So you still don't have the state have

797
00:37:48,800 --> 00:37:51,840
Speaker 6: the distribution throughout the whole state, the whole forty million

798
00:37:51,840 --> 00:37:55,160
Speaker 6: people there. So you're trying to figure out how does

799
00:37:55,200 --> 00:37:57,120
Speaker 6: that matturate across the entire straate.

800
00:37:57,160 --> 00:37:59,440
Speaker 4: How do you get distribution to the entire state. How

801
00:37:59,440 --> 00:38:00,359
Speaker 4: do you make that work?

802
00:38:00,640 --> 00:38:02,799
Speaker 6: And that that is different in each day, and you

803
00:38:02,800 --> 00:38:06,400
Speaker 6: have to analyze each one's. Las Vegas has tourism and

804
00:38:06,440 --> 00:38:10,040
Speaker 6: you've got to factor that in Colorado has six hundred

805
00:38:10,080 --> 00:38:14,040
Speaker 6: and eighty too many dispensaries per capita. So you have

806
00:38:14,120 --> 00:38:16,600
Speaker 6: to look at all this stuff and realize, Okay, they

807
00:38:16,640 --> 00:38:19,960
Speaker 6: overbuilt there. And also you have to look at efficiencies.

808
00:38:20,000 --> 00:38:23,200
Speaker 6: So what we're calculating for what the maximum square footage

809
00:38:23,200 --> 00:38:26,560
Speaker 6: is for indoor cultivation might be one number today, but

810
00:38:26,600 --> 00:38:28,360
Speaker 6: we have to embed in that there's going to be

811
00:38:28,360 --> 00:38:31,120
Speaker 6: more efficiencies picked up by switching to le D lights

812
00:38:31,200 --> 00:38:34,040
Speaker 6: or different things that now that square footage can produce

813
00:38:34,080 --> 00:38:37,000
Speaker 6: more than what the universe was what we thought previously.

814
00:38:37,560 --> 00:38:40,560
Speaker 3: Yeah, well said a lot of things that we think about. Yeah,

815
00:38:40,600 --> 00:38:42,840
Speaker 3: there's no quick answer there. Yeah, I like that, but

816
00:38:43,040 --> 00:38:44,439
Speaker 3: it's true. Everything you said is great.

817
00:38:44,640 --> 00:38:48,080
Speaker 2: Well, Rob, thank you so much for joining the show. Yeah,

818
00:38:48,400 --> 00:38:49,160
Speaker 2: if I could.

819
00:38:48,920 --> 00:38:51,680
Speaker 6: Just add one thing, what I would tell everybody feels

820
00:38:51,719 --> 00:38:53,600
Speaker 6: like they're going to miss this market, And if you

821
00:38:53,760 --> 00:38:56,840
Speaker 6: and the number one thing mistake that we saw on everybody.

822
00:38:56,960 --> 00:38:59,680
Speaker 4: They went and spent all their money trying to.

823
00:38:59,640 --> 00:39:02,400
Speaker 6: Figure out out it would be much better to just

824
00:39:02,719 --> 00:39:06,600
Speaker 6: start slow, take a couple, just just just baby steps,

825
00:39:06,640 --> 00:39:08,960
Speaker 6: go work for a company and understand the market, and

826
00:39:09,160 --> 00:39:10,760
Speaker 6: just just grow it very very small.

827
00:39:10,840 --> 00:39:12,000
Speaker 4: You're not going to miss the industry.

828
00:39:12,480 --> 00:39:15,320
Speaker 6: You're you're you want to always be building efficiently and

829
00:39:15,600 --> 00:39:17,719
Speaker 6: trying to be cash flow positive from day one at

830
00:39:17,719 --> 00:39:18,640
Speaker 6: a very small scale.

831
00:39:18,719 --> 00:39:21,200
Speaker 4: You can always scale up. But once you spent that money,

832
00:39:21,239 --> 00:39:22,200
Speaker 4: you can't go get it back.

833
00:39:22,480 --> 00:39:26,440
Speaker 6: And I think that that's the number one miss uh mistake.

834
00:39:26,760 --> 00:39:29,359
Speaker 4: But Canada, the Canadian LPs, and it happened in here

835
00:39:29,400 --> 00:39:30,000
Speaker 4: in the United.

836
00:39:29,840 --> 00:39:32,120
Speaker 6: States as well to a lesser extent, But that would

837
00:39:32,120 --> 00:39:33,680
Speaker 6: be my number one advice.

838
00:39:34,000 --> 00:39:36,720
Speaker 2: Oh, thank you so much. Set Well, there it is guys.

839
00:39:36,719 --> 00:39:38,120
Speaker 2: It's Cannabis Talk one on one.

840
00:39:38,200 --> 00:39:40,840
Speaker 4: And remember this. If no one else loves you, we do.

841
00:39:41,320 --> 00:39:45,880
Speaker 1: Cannabis Talk one oh one, the world's number one source

842
00:39:46,040 --> 00:39:48,440
Speaker 1: for everything cannabis. Cannabis