To Be Blunt: The Professional Cannabis Business Podcast

091 New Mexico State Speculations and Getting Into The Industry with Nate Lipton of GrowersHouse

March 14, 2022 Shayda Torabi Season 3 Episode 91
To Be Blunt: The Professional Cannabis Business Podcast
091 New Mexico State Speculations and Getting Into The Industry with Nate Lipton of GrowersHouse
Show Notes Transcript

“I don't want people to think getting in [the cannabis industry] now is a bad idea whatsoever. I think the industry right now is still really looking for a lot of smart people, people that are interested in the kind of like cannabis movement and its progression to maybe full legalization.” - Nate Lipton

In this episode, Shayda Torabi welcomes Nate Lipton of GrowersHouse as he pushes the cannacurious to jump right into the industry and consider scaling to seize the opportunity. Also, listen closely as he shares his valid insights about federal legalization and its effects on interstate transfer of goods. Also, he explains the viability of vertical integration in the continuously maturing industry. 

 

[00:01 – 07:32] Updates on Events and Intriguing Research in New Mexico

[07:33– 18:30] Nate on Cannabis Entrepreneurship - The Getting is Good Right Now

[18:31 – 23:48] The Maturity of the Industry Over the Years

[23:49 – 33:07] Being a Cowboy on the E-Commerce and Ancillary Sides

[33:08 – 42:16] The Blurry Interstate Transfer of Goods Despite Legalization

[42:17 – 01:00:21] Why You Shouldn’t Be Intimidated by Vertical Integration

[01:00:22 – 01:01:31] Food for Thought: What do you think about Nate’s views on federal legalization?

 

Nate is the Co-Founder and Co-CEO of GrowersHouse.com, GrowersNetwork.org, and CannaCribs YouTube series. He's been in the cannabis industry since 2010 working in cannabis retail, cultivation, and consulting.

Connect with Nate

Visit growershouse.com, https://growersnetwork.org/, and https://cannacribs.org/ and follow him on Facebook, Instagram, Twitter, and LinkedIn @cannacribs @growershouse

 

Shayda Torabi has been called one of the most influential Women in WordPress and now she’s one of the women leading the cannabis reformation conversation building one of Texas’ premier CBD brands. She's currently the CEO and Co-Founder of RESTART CBD, a female-run education first CBD wellness brand. And has formerly held marketing positions at WP Engine and WebDevStudios. Shayda is the host of a podcast for cannabis marketers called To Be Blunt, where she interviews top cannabis brands on their most successful marketing initiatives. When Shayda's not building her cannabiz in Texas, you can find her on the road exploring the best hikes and spots for vegan ice cream. Follow Shayda at @theshaydatorabi

Key Quote:

“I think those [vertically integrated] businesses are going to be the businesses that are going to have the most staying power in the market and they're going to be the most successful in the market. Because, exactly, you do own your own supply chain and just because you don't think you might be good at one of those [cultivation, processing, and being a dispensary or retailer] aspects. I don't want people to be scared of doing it.” - Nate Lipton

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Nate Lipton  0:00  
Being vertically integrated meaning like, let's say you go into a state like New Mexico and you want to start a cannabis business, you know, you could be a cultivator, you could be a person who starts a processing lab who maybe just gets cannabis and turns into oil or turns it into edibles. Or you can be a dispensary owner, you know, actually retailing the product, or you can be any combination of those three, when we say vertically integrated, it usually means you do the whole suite all three. And I think those businesses are going to be the businesses that are going to have the most staying power in the market and they're going to be the most successful in the market. Because exactly you do own your own supply chain. And just because you don't think you might be good at one of those aspects. I don't want people to be scared of doing it

Announcer  0:55  
you're listening to to be blunt, be podcast for cannabis marketers, where your host Shayda Torabi and her guests are trailblazing the path to marketing educating and professionalizing cannabis light one up and listen up. Here's your host Shayda Torabi.

Shayda Torabi  1:18  
Hello and welcome back to a new episode of The to be blunt podcast. I'm your host Shayda Torabi, cannabis business owner and brand marketer. If you're in Austin, Texas, then you know we are in full swing here at South by Southwest. Of course, by the time this episode airs, I will be preparing and depending on what time you're listening to this could very well be done with moderating my very first ever South by Southwest panel with Weedmaps 35 Ventures and boardroom. Since I'm recording this in the past, I can't foresee the future and I will have to provide you a proper south by southwest cannabis recap once things are all said and done. But just know I appreciate you all tuning in every week as I bring up new topics, new perspectives and new guests to help us tackle where the future of cannabis is going with as much transparency and bluntness as possible. On the episode today, I am joined by Nate Lipton. You might be familiar with Nate from Canna cribs, where he is the co founder and host interviewing pioneers leading and shaping the global cannabis industry, specifically in the cultivation space. Think MTV Cribs but for massive cannabis operation and grows. He is also the co founder of growers house.com which is the largest e commerce Store in our niche. And as an extension of growers house he runs growers network, which is the professional forum for cannabis conversation, education, networking, and Canna cribs, and most recently launched consulting offering a wealth of knowledge adopted over the last decade to help cultivators and operators get up to speed on the best practices. Before I get into my interview with Nate, I did want to provide a bit of an update from Lucky Leaf Albuquerque. And as you'll hear in this episode, May and I bring up the new Mexican cannabis market because we both actually happened to be at Lucky Leaf. And we didn't get the chance to meet IRL unfortunately, but had already had this recording scheduled. And the conference was just really packed and it was so great to see so many eyes on New Mexico, which to be honest, I'm not sure they were fully anticipating. So kind of on that thread. I think New Mexico is a sleeper state. At least it will be until we have federal legalization and or Texas legalization. And I'll explain. I gave a talk at Lucky Leaf on seed to strategy how to get the sale. And since New Mexico goes from medical to adult use on April 1 of this year. My research that I was doing for my presentation led me to come across some data points from Green Growth CPAs. That said when New Mexico goes adult use 74% of demand will come from New Mexican residents 21% will come from Texans and 5% will come from other tourists. And the total estimated revenue for adult use will go from 262 million this year in 2020 to two pretty much doubling to 512 million in 2026.

My observation with that is clearly Texans are craving legal cannabis and they will go to New Mexico to get it So if you're in the New Mexico cannabis market, I personally would be thinking of how you can be marketing to Texans. Other than the clear market opportunity, the state is wide open in terms of branding from MSOs. There are two that I observed operating both I believe are from California, I saw bloom and then bang, but I believe it's pronounced Bong. So I anticipate it's a matter of time before we see national brands like wanna make their way there, as well as established Southwestern brands coming from Arizona and even Colorado to I also didn't see a ton of New Mexico brands that really stood out to me. Yes, there are people doing interesting things. For example, I saw mountain top extracts actually had a really cool educational card series that their brand launched. I don't really know how they're using it and what capacity but I saw that on their website, I thought it was cool. And then another one that caught my attention was a dispensary brand called Everest cannabis and I didn't get a chance to go to their dispensary. But their website and social footprint seemed intriguing. From what I also gathered Ultra runs New Mexico currently as a medical operator and will continue to dominate as things go adult use. And by the way, there are no caps on New Mexican licenses at the moment, no vertical integration requirements, although those are probably going to be better suited to whether the supply chain storm. Also they will be prioritizing New Mexico residents but there is no requirement to be a new Mexican resident either. So I expect big opportunity in New Mexico for the next two years as things open up and a race begins. And also lots of challenges as the industry stabilizes and finds its footing. So Godspeed to anyone in New Mexico cannabis. Now, Nate and I talk about New Mexico on the podcast. And I wanted to give you a little bit of background, this episode was very prolific and Nate dropped some serious insight into the structure of federal legalization, interstate commerce, his recommendations for people approaching cultivation and there were just lots of good reflections from all aspects of the industry because he's had a part in pretty much every component of the go to market for a cannabis, business or brand. And this episode is full of lots of information that I truly just hope you all appreciate. With that said, let's get straight to the episode. Please join me by lining one up and let's welcome Nate to the show.

Unknown Speaker  7:33  
My name is Nate Lipton and one of the CO CEOs and co founders of growers house growers network and Canna cribs. So those are three kind of separate brands in the industry that primarily focus on either the equipment to outfit, commercial grow operations, and even hobbyist kind of outfits. So rotating your closet and anything in between. And then we have a forum of growers no worry about org. And then we have a YouTube series called cannon cribs that we like to call kind of like in the edutainment category, where we educate and entertain people on kind of extensive walkthroughs of commercial cannabis facilities. And these are like 2030 $50 million facilities. So it's kind of like a Discovery Channel, how it's made episode. But on seeing cannabis plant grown from a tiny clone, for those who don't know, obviously the smallest kind of point of a cannabis lifecycle and then all the way to with the flowering and harvesting and put it into packaging to go to retail. So let's see, getting into the industry was the second part of that question how to get into it. Just Swan dived right into it after graduating from undergrad and haven't looked back since. So since I've graduated from undergrad, I think I've only worked in the cannabis industry. And that was about 2010 2022. Now, so, so long story, but good to say just I've enjoyed the industry thus far and don't plan on leaving. So,

Shayda Torabi  9:06  
ya know, I'm really excited to get connected to you. I mean, before we were recording, I was sharing just how important I think free information is especially to our industry and being able to learn from others because the industry is so fast paced. And obviously, you know, my listeners know that every state has different regulations, different barriers to entry and different opportunities. And so, personally, I've been someone who has consumed a lot of your content and so now to get to pick your brain, share your story and get to you know, peek behind the curtain of you and your brands is very exciting. And so I know that people can for sure Google you which I encourage them to Google you go Google all your brands and businesses and just like read up about all the great things that you've done in the industry but where I really want to kind of start the conversation for you to dive a little bit deeper into your kind of like Genesis story into the cannabis industry. Cover was reading about your progression and like you kind of highlighted it, right? You graduated college and then you found yourself working in the cannabis industry. But I really wanted to tap into my observation of your kind of hustle and determination because I think people come from kind of two sides of the coin, right? They either are not cannabis, people who have built a career in another industry and then see opportunity in cannabis like, oh, how can I transfer that knowledge into this industry? Or they are fresh, maybe graduating college or, you know, kind of starting their careers? And they're like, what steps do I take to get in the industry. And when you started in cannabis, around 2011, obviously, the market was in a much different state, just in general, because not as many states were actually legalized in any capacity, really. And so knowing that, but also just, you know, kind of going from your own journey, what made you feel so confident to get into cannabis? And how was that journey of getting involved? I mean, you know, did you have money in the bank to go invest in your company? Did you get investment? Like, what were those things that you did or didn't have that you're like, this gives me confidence to now be you know, someone who can be in the cannabis industry and not just be in it, but to see opportunity to thrive in it?

Unknown Speaker  11:18  
Yeah, yeah, there's a few things that I did that I would also recommend to others. And I feel like I ended up having a pretty smooth career transition into the cannabis industry because of these things. So let's let's go through them really fast. So I did go to school, my undergrad, and I got some hard skills, I got some hard skills, and like economics and finance, but I was always very entrepreneurial. And a lot of things I learned is in school, at least, where you could have a great idea in a great industry, but it can be the wrong timing. And when I was I really, really marinated in that and I was like, Okay, what industries really go the opposite side of that coin. Some people say as you can be maybe not the most well informed person, but in the right industry, and even with an okay skill set, and you can do really well. And I was like, Well, you know, I'm no Albert Einstein or Elon Musk. But you know, maybe if I find the right industry, that is really taking off. Plus, I have maybe a personal interest in, that could be the best way to spend my career. So the cannabis industry was probably the most ripe industry at the time that kind of met that criteria, then the second phase of that was, okay, I'm really young and inexperienced. How do I gain experience? So I was like, okay, work at a dispensary work at a cultivation equipment supplier. So I did that for about a year ish, those two companies, and that entrepreneurial bug in me was like, Okay, this is great working for others, but like, I need to, I need to, like, kind of jump off this cliff opened my wings and start flying. You know, I could just, I had that itch in me, did I have a ton of money at my disposal to do so? No, I had about $5,000. So not a substantial amount of money by anyone's terms. And after I built a little bit of like a, like a business plan, I realized, okay, probably gonna need $150,000. So I asked my family, and everyone around my family, family and friends, if they would be interested in coming on. And it wasn't a very casual conversation, like I had to show them my business plan, kind of model out, you know, an income statement over three years, show them how much money they'd get back. But eventually, you know, my father said he would put in money, which ended up being about $70,000. And then we got some family friends who are kind of like, you know, you always have kind of like those uncles or aunts who like aren't blood related, but you just kind of grew up with them. And they're really cool with you. So some of them came in three of them for another $75,000. And then all put together at $150,000. And we started growers house in 2011. And, you know, it's kind of funny, because I actually remember presenting to them in New York, because that's what they live, my father's from Brooklyn, at a Chinese restaurant, with my laptop. And I was like, Okay, guys, we're going out for lunch. And I'm going to just try and sell you on believing in me. And these are like, you know, my uncles, they like saw me born, they would probably change my diapers a few times. So it was good to have people like that on the other side of the business. They were not professional investors by any means. And I don't think I had people breathing down my throat in ways that I that a lot of other professional businesses have now if they're like venture backed or private equity backed, these are more of like, just call them up. Tell them how the business is doing. It's going well, it's not going so well and be like, Okay, well, you coming. You're coming out for the holidays. I'm like, Yeah, you know, so that's kind of how I got started and we were lucky enough to be kind of right, right industry right time. And the cool thing is when you get in on the ground floor. It's funny to think I'm a veteran And now, but I'm only 33 years old, but I've been in the industry longer than most other people that I interact with, which is cool. But I don't want people to think getting in now is a bad, bad idea whatsoever. I think the industry right now is still really looking for a lot of smart people, people that are interested in the kind of like cannabis movement and its progression that maybe full legalization, and not only in the US, but internationally, like Canada and Uruguay. Were some of the first dominoes to fall. But you know, the US is obviously pretty much fallen. Just a few more states like Texas, right? We gotta get in there. Yeah, but you know, there's gonna be a worldwide kind of falling of the dominoes over the next 50 100 years. Let's call it so. You know, for those of you who are like, Yeah, you know, I'm just graduated from college, I want to go move abroad and spend some years traveling great, go to go to Colombia, go to Spain, these are countries that are up and coming right now Mexico is about to have a big shift in the way they treat cannabis. You can kind of do cannabis in many places in the world right now and get it on the ground floor, much like I did in the US. And I think for the opportunists like the getting is good right now. So go get it.

Shayda Torabi  16:14  
I love that perspective, I think that is so important to kind of keep in mind because I do respect and reflect also, you have been in the industry for much longer than I have been but you know, a couple of years. And I still feel like Wow, I feel like I know a lot. But at the same time I tried to keep an approach or there's still so much more to learn, especially as states like my own state have not yet fully come online. And so looking at it from that lens, I do appreciate people, you know, feeling the opportunity in the industry, I always try to use the podcast as a platform of inspiration and not like you're late to the party, you know, it's over. But really wanting people to think fully also of what it is like to be in the industry. And I'm going to quote something you said I was doing some research about you. And I just thought it was really interesting. And I'm curious if your perspectives or thoughts have changed. You said my goal in working for diverse cannabis related companies was to understand the industry holistically and figure out my best long term place within So obviously we're talking about getting involved, you know, kind of working jobs in the industry to get you that awareness and connections and associations. And you said in the beginning, I first thought I would open a dispensary around 2011 Opening a dispensary was for cowboys, ie people with a high appetite for risk willing to take on the possibility of law enforcement raiding your establishment, depending on the current local political climate, I decided this was too risky for me. So kind of reflecting on that, quote, I don't know if your thoughts with the industry have changed. But I guess that's the other perspective that I always try to bring to the podcast too is this is a very risky industry. And so you decided and all kinds of, you know, makeup positioning against it, you decided to do in my opinion, something ancillary, right? You're not actually selling. And maybe you are maybe there's aspects of your business, but you're actually touching the plant when you're selling things you are selling the picks and shovels or the tents and the nutrients and the supplies for people to go grow very successfully. Right. But I think when you're talking about dispensary even cultivation, there is that more potential for risk. And so I think that's another aspect that people need to just be very mindful of depending on what kind of road you pick to go into the cannabis industry, I would say some are perhaps still presently even more risky than others. And so I'm just curious kind of what your thoughts are on that quote. And if you still feel the same, and kind of what your observations are on choosing different, I guess professions in the cannabis industry that might be more or less risk averse.

Unknown Speaker  18:45  
Yeah, and that quote is definitely a thinking for that time and place in the industry. And that time in place was 2011. California, specifically. So if we jump in our time capsule and then go back there really fast. What we realize is, it was very gray in California, it wasn't black and white, like we do just talking about New Mexico before we jumped on the podcast, New Mexico has like state law that they have to start selling recreational cannabis on April 1, and they are issuing out state licenses for cultivators dispensaries. In California, it was like, well, the states that says it's legal, but we don't really have a commission to issue licenses and they're kind of deferring to the city and the county and then the county is also deferring to the state, and no one's taking responsibility for it. And so some people were just opening up shop and being like, well, hopefully no one reads me. Let's just try and do business, you know, and I was like, wow, that's that that is pretty risky. And plus, I interviewed a lot of dispensary owners and yeah, it was like probably one in five got rated at some point in time when I was like, those rates are way too high. I think getting into the industry today and We're talking about 2022, if you go to any state is issuing licenses like, I would be pretty comfortable picking up licenses in those states. And you know, I've worked on the dispensary side. So the flower touching side, and I am part owner of a couple of dispensaries now in other states, and the industry is way more way more mature than it was back then. And I think you don't have to be a cowboy again in the industry now, like you had to in California back then. And I speak with very professional people. I mean, I wouldn't say the cannabis industry is mature yet, it's just a mature thing, you know. But you know, now it's these are really big companies. Some of them are public, I do consulting, because I kind of have this holistic understanding of the industry from the ancillary side and the flower touching, you know, selling equipment to people growing. I've operated dispensaries part owner of some, I work with software, since we tour all these facilities, I get to see like really deep inside to some of the best operators in the world. But we do consulting for a lot of big companies, and whether they're big companies are thinking about getting in the cannabis industry or even small people who retired. And now they want to take a little bit of the money they put away and get into the industry as a passion project. So we can totally consult with those people. And that's actually one of the most gratifying things that I do, I think because it's like, Oh, you want to learn about the cannabis industry cool, you know, grab a drink, sit down for three hours, and just let me talk at you. And I love doing that. So doing this podcast, to me is also a lot of fun, because I just, we don't have to prepare for anything in this podcast. I'm just like, cool. I'm just gonna jump on with Shayda. And then we're gonna talk about the industry. And basically, this is like, what I dream about what I think about, I don't stop thinking about it. I'm like one of those minds that's going a million miles a minute, and I need something to sink my teeth into it. And so it's like all aspects of the cannabis industry. So aside from going pretty tangential on that question, let's see what's up next?

Shayda Torabi  21:57  
No, that was super helpful to hear just your perspective, I think where I come from is maybe a little bit more, and especially because of Texas, right? I mean, we are certainly not getting rated. But there is still I think, a gray area, because regulations are not firm, because there is still certain aspects when you're dealing with him to marijuana of just you know, especially with a 3% and didn't go over and is it hot? And what's happening? And I think we often feel like the rug is being pulled out from underneath us. And so I feel sometimes I get in conversations where people are like, Oh, well, what's going to make me, you know, the most bang for my buck? What's the best way to get in the industry? And I'm like, Well, if you're in Texas, and you opened a CBD dispensary thinking that the state was going to legalize last year, obviously you are wrong, because the state did not legalize marijuana last year, and now you are waiting. Is it going to be in a year when we have our next legislative session? Is it going to be in three years is going to be in you know, five years? And so I think that's kind of where I sometimes come from the conversation is, yes, obviously, so many new states are opening, we were just talking about New Mexico, their their restrictions are very low, their barriers to entry are very low, there doesn't seem to be any caps on licensing, they don't even have restrictions on if you are resident or not in the state of New Mexico, even though they say they're gonna prioritize me Mexico residents. It's just that is a very different program than Oklahoma is a very different program than California. And so I very similar to you, but definitely not to the degree that you were having these conversations and going into these businesses and kind of getting the true pulse for it. But I do I see you here from California, oh, well, California as taxes are so high. So the cost of you know, operating and investing in the industry is going to take a lot more capital than perhaps getting online in a state like New Mexico. So I do think that there are some, you know, again, different opportunities based on geography, financial situation and still risk but where I want to kind of turn the conversation and throw you another one which I really love that you talk openly at least from what I've observed. And it is such a huge component of your business, which is a big component of my business and also my background I professionally used to work in the technological platform integration ecommerce space. And so e commerce is hard. Ecommerce in cannabis is even harder. So can you kind of you know, introduce us to how did you get into opening up an E commerce like what why was it ecommerce? Why not retail? And how has getting online with your business and our businesses kind of changed as the industry has opened up? But kind of the punchline to me that I think we both know is it's still very hard to do things online in the cannabis industry for a myriad of reasons but knowing that you to me are very knowledgeable about e commerce and you've obviously seeing success in it, it is something that I don't think a lot of people talk about in the cannabis industry primarily because if you're selling marijuana prior to COVID, you really didn't have any purpose of being online other than, you know, showing your products and your address and kind of, you know, a presence online. If you were not doing transactions online, hemp, you are able to do transactions online, then you're getting an ancillary you absolutely, obviously can do transactions online. So kind of what about e commerce was like, you know, I'm gonna do that and I'm going to succeed in it and and kind of what was the journey that you went on to be operational online?

Unknown Speaker  25:33  
Yeah. And I, you know, full disclosure, I definitely am a glutton for punishment. So I click on way more than I actually can physically do and our business has just turned into like these multi headed beast as businesses really. And the funny thing is, I said, like, you have to be a cowboy in 2011, in California to open a dispensary. Little did I know, you actually have to be a cowboy to enter the E commerce space in the ancillary cannabis industry. And I've been shut down by a dozen banks, I would say every couple of months, something happens. That is related to us being close enough to the cannabis industry, even though we don't touch the plant, where it's like, oh, yeah, this advertiser shut us down. This credit card processor shut us down. It's just like, it just never stops. I'm like, I want this banking bill to pass so, so badly, that it would just make like the amount of headaches that they have probably go down by like 80% In our business, but I did do the retail thing, and we continue to do it. We have two retail stores, one in Tucson, Arizona, one in Phoenix, Arizona, we did the E commerce thing, because on the dispensary side, you know you were talking about different states are really different economies for cannabis. And I like to think about them that way. When I do any education for people or consulting or anything like that. I tell people like think of every state has its own micro economy and its own country for cannabis. It has its own rules and regulations. It has its own incentives and disincentives. And you can't right now in the US and actually don't think this is going to happen anytime in the near future. Even if it goes federally illegal. You can't move cannabis legally overstate borders. So even though it's recreational and Arizona and New Mexico, you still it's illegal to take cannabis from one side to the other in any type of economic capacity. So like by economic capacity, I mean, like, let's say you're a dispensary, you know Shayda Shayda. Arizona dispensary, right? And then you have Shayda New Mexico dispensary. You can't transfer inventory between those two dispensaries, that's illegal. So really, you have to think of them as a closed border economy. And that also means your market size is related to the population of that state and their propensity to maybe smoke cannabis or ingest cannabis. So you know New Mexico's about 2 million people, Oklahoma's about 4 million Arizona, I thought I forgot seven to 9 million, something like that. I do ecommerce for cannabis cultivators. And in the US, I have what 350 plus million people I can sell to, I can cross state borders with all the equipment that we sell, which is great. Not only that we're doing a lot of international business now. So we're speaking to people on like, Portugal, Thailand, or Maguey, Colombia, South Africa, sending equipment Israel, like, you know, we're sending equipment to all of these cool countries that are getting they're getting their toes wet in the cannabis industry. So that's one reason I really liked the the E commerce side and being on the ancillary side, the market potential is much larger. And I get to interact with a wide diversity of different cannabis economies, you know, micro economies, and it's cool. I get to see them kind of do all these weird and interesting things like you know, people have heard about to deepen the cannabis industry, you'll realize that like the price of cannabis in these different states is vastly different, right? So like wholesale in Massachusetts, let's say it can be like $2,500 a pound wholesale for cannabis for good cannabis. You go to Oregon, right after they had a glut and it was like 300 a pound for like outdoor cannabis. Like literally that's like a 10x difference. It is crazy. And you see those little differences in states and like, it's kind of nice being on the E commerce side because as these markets kind of increase in size and then have some turbulence in pricing. Our business is pretty diversified across the country. So yes, I try and ride the good times. And yes, there are some bad times but luckily since we sell into so many states, it kind of normalizes and it's a little more even keeled. So I'm not pulling my hair out as the price of cannabis fluctuates, like some operators might be doing in some states like Oklahoma right now it's starting to see that glut calm where glut of cannabis, meaning oversupply, price is gonna go down. Unfortunately, it doesn't mean that probably some inefficient operators might be going out of business in Oklahoma over the next 12 months. And that's kind of what happens with open markets, when you have an unlimited amount of licensing, a lot of people start growing cannabis, and they realize they produce more than there's demand for, and then they all kind of shoot each other in the foot. So there are other states that are limited licensure like Massachusetts, Arizona, those limited licensing states, the prices are much more stable. But there's not as much opportunity for new entrepreneurs to get into the market. So there are pros and cons to both I don't want to say one is better than the other because I don't necessarily believe that one is better than the other. It's just how do you respond to the market dynamics? You know, how do you make a successful business? That can be around for five years plus, and answering those questions is going to be dependent on what the laws are and the regulations in your state? Or whether you're touching cannabis, or you're on the ancillary side, you know, so, yeah, maybe that's my way to answer that question.

Shayda Torabi  31:11  
I thought that was insightful, because again, I don't think there's a right or wrong answer. I just think the general, I don't know if the general public like the general public, who wants to be a business owner in the cannabis industry is obviously trying to look at, well, how do I understand I love the way you were positioning this these micro economies, and it really is that way. And for some people, they are restricted, because like using myself as an example, I was born raised in Texas, so this is my home, I could go do business in another state, but I don't maybe know that state as well. So it's not impossible. It's just maybe I need to get a partner, maybe I need to spend some time learning about that state's operation. So it makes the most sense for me to do Texas. Well, my understanding of the industry is that Texas will probably be a limited licensure state just because that's what our medical is operating under right now. And because Texas is more conservative state, and so I have to prepare myself that there are perhaps not going to be as many license opportunities. And if that is something that I want to be a part of, I have to think Well, how am I going to get the funds to be able to afford the license and all the overhead that comes with it? Do I have the funds to get the facility that I'm going to need to be I always think Texas is going to be vertically integrated this because that's again, how our medical is. And so those are other things that again, I never want people to think, oh, there's all these doors that are shutting. It's just this is the reality of our market here. And you have to understand what Texas is doing different than what New Mexico is doing different than what Oklahoma is doing. But I want to go back really quick. You were talking about even if we go federally legal. You don't think that there will be interstate commerce. And I'm curious why you think that because I think the assumption, kind of have, you know, the general community in the cannabis industry, at least from and I'll call them out those Oklahomans who thinks that I 35 corridor is going to open up when we get Texas legal and federal legality, they think, Oh, well, I'm going to take my Oklahoma product, I'm just going to drive it down into Texas. And it's going to be awesome. So again, I think you have people who are getting into business in Oklahoma, for example, thinking that one day I'm going to be able to take my product to Texas to these other states. And for a myriad of reasons that I have beliefs on, I just don't really see that actually happening in the way that people are glamorizing it or thinking that it's going to happen. And so with your background and knowledge, I'm curious, just because you kind of said that, why do you think that even if we get federal legalization, we might not see the interstate transfer of goods from one state to the next, even if those neighboring states are both legal?

Unknown Speaker  33:41  
Yeah, so we have donated money towards pro legalization measures in multiple states. And in doing so I've also interacted with a fair amount of lobbyists who also participate on the state level, but also on a national level, some of them based out of DC. And I've also been on a few panels with CEOs of MSOs molto MFO is multi state operator. So those are the really large cannabis businesses, such as like curaleaf, Cresco, Trulieve, aravis, those those kinds of companies, they're very large, they're like multibillion dollar companies with 1000s of employees. And they're also really tapped into lobbying on a state and federal level. And what we found out is, each state, like New Mexico, we've been chatting a lot about, they had to build a new division governmental division called the cannabis Corporation Commission. And that's the commission that oversees the entire cannabis industry who's in the state and issues out licenses make sure that they are applying the right products, whether it's like pesticides, makes sure that cannabis is safe for human ingestion. So there's a lot of investment from the state into building that commission. And that commission is also what takes in the revenue from the cannabis industry and then divvies it out to things like, let's say education, health care other things in the state that they earmark it for. So New Mexico is not interested in basically they're gonna, let's say, let's say they have 2000 cultivators and dispensaries in 24 months from now. They get annual renewal from them plus tax revenue from each one of those. Let's say we go federally illegal, what's going to happen if you cannabis can cross state borders, you're going to get like five ginormous growing operations in the country. Like think of it like tobacco, five ginormous farms. And they're going to distribute and manufacture everything because it's just going to be whoever has the most money when, because there's this thing called economies of scale, which just means the bigger you get, the cheaper it is for you to produce a gram of cannabis. And when that happens, what would happen to New Mexico, New Mexico is probably not the best state to grow cannabis in, there's probably better places that would work for year round production. All those other cannabis businesses would dry up, New Mexico would now get no tax revenue from those businesses that have to wind down that corporation commission. And do you think the senators, representatives of New Mexico are going to be interested in removing jobs away from New Mexico and tax revenue? Now, so there's going to be there would be like, you know, in this back end lobbying, there's like three states that want there to be federal legalization with cross state commerce. And that's like, maybe California, and like Kentucky, and maybe like one other ones, basically, the places that are best to grow cannabis where these mega facilities would live. The other 47 states are like, No way, we've already invested so much time, energy and money into getting this going within our state. Why would we just light that on fire for the benefit of a few mega corporations and a couple states. So that's why the cannabis industry, you know, going into the future is going to be this very kind of interesting kind of local, operational way. And look, the smartest largest corporations in the cannabis industry are also banking on that, like they're building out large multimillion dollar cultivation facilities in each state. And they're doing that because they know that in five years from now, if they just build one giant, massive facility in Kentucky, they can't export to other states or California and export to other states. So you can see the smartest people in the industry acting according to what I just spoke about. So in the federal government, there's going to probably if they legalize it, they're probably like, cool, it's legal now. So there's some federal laws you don't have to worry about. But we're gonna leave a lot of kind of the way that cannabis gets treated to the states, kind of like the way alcohol is done. In some states, you can buy alcohol only until like nine or 10pm. In some states like Utah, they kind of manage what the alcohol limit is. So there's a lot of autonomy left to the states. And I think it's going to continue to be that way for the foreseeable future. Hello,

Shayda Torabi  38:08  
just want to take a quick moment to thank my sponsor, and full disclosure, my company restart CBD, restart. CBD is a brand that I built with my sister. So we are family owned and women owned, we do operate a brick and mortar in Austin. So if you ever find yourself in Central Texas, we'd love for you to come say hi. But we also ship nationwide and we carry a wide range of CBD products. We really care about this plant, we really care about educating our customers, this show would not be possible without their support. So please go check us out at restart cbd.com and use code to be blunt for $5 off your next purchase. Thanks. And let's go back to the show. That is so fascinating. I have not ever heard that. I guess nuance of an opinion related to federal legalization. Obviously, I think, and I share this thought on the podcast me as a cannabis consumer prior to getting in the industry, obviously, like I want legalization. Me as Shayda, who now professionally works in the cannabis industry and has the opportunity to talk across state lines and to all these different economies is like oh my god, we have so many things that we have to fix before we can actually go towards federal legalization and even using the words federal legalization, obviously, it still has unique state applications. It's not just going to be okay, it's legal, and then you can do whatever you want. And I think that is really interesting, just to think of how some of these bigger multi state operators are. Yeah, why would they be investing all this money into all these different states? If two years, six years from now it's all going to be able to go across state lines. And so I imagine it'll be some version of what you're expressing right here. So very cool. kind of in a similar vein, a follow up to that is, I'm curious because and I want to kind of get into Canada cribs now just because it is. So like we need cultivation as an industry like you do not get all these products you do not get all you know, you don't need cannabis unless you've built a nation of cannabis. Especially coming from we haven't talked a lot about New Mexico. And so I'll just kind of reflect on that, because that's kind of Top of Mind. And I was speaking on seed to sale, you know, how do you strategize and ultimately get your product to market. And so I think that people can have the idea to be cultivators. But if you don't have the output of where you're going to sell that product, and you kind of were talking about that a little bit, too, you know, the price in Massachusetts is going to be much different than the price in Oregon. But I think that there's people who don't realize, they don't see that they don't fully understand the different economies that are at play, they don't understand the different trajectories that go into making a successful cannabis cultivation versus not obviously everybody who's like, oh, I grow in my backyard, that doesn't make you a good cannabis grower. And so I had a lot of people at the show who were like, What do I do? Should I cultivate? And do I grow? And I'm thinking, you know, that's a loaded question. Because if you're actually good at growing, obviously, owning your supply chain, even though the state is not requiring you to be vertically integrated is probably a good solution for some where it makes sense. And for others, maybe if you're not the best grower, investing in cultivation is not going to be as lucrative as you might think. And so kind of the the bulk of the question is really around people who are looking at cultivation as the best step into the industry. Like, what does that look like, from your perspective, from exploring all these conversations with maybe closet grows to these full, you know, multi operational, and even multi state players who are trying to sell grows, I just was reflecting on your jungle boys video, you know, they're based in California, they're now setting up operation in Florida, they've built this semi semi scale of a business. But people again, we need cultivators, but there is limited licensure there is I mean, you were even talking about, you know, just because you can grow in New Mexico, which is kind of my attitude with Texas, just because you can grow in Texas doesn't mean Texas is going to have the best cannabis, then you get into indoor versus outdoor, obviously, there's different degrees of cultivation with their within their. But so looking at kind of the conversation and cultivation of someone's like, hey, Nate, I really want to get into cultivating. I know, it's a loaded question, because there's so many other you know, aspects about it, but kind of how do you look at it? And what has kind of been the sentiment of cultivation, from your perspective in terms of it actually being viable? For let's say, the 99 people who want to go into cultivation? What is the percentage of those people who actually find success? Doing it?

Unknown Speaker  42:41  
Man, I will say Shayda, there's a, I have a lot to say about this question, there's gonna be a lot to unpack. Okay, so see if we can, I can even like hold on to every nugget of kind of the this conversation. But

Unknown Speaker  42:57  
I would say this first being vertically integrated, meaning like, let's say you go into a state like New Mexico, and you want to start a cannabis business, you know, you could be a cultivator, you could be a person who starts a processing lab, who maybe just gets cannabis and turns into oil or turns it into edibles. Or you can be a dispensary owner, actually retailing the product, or you can be any combination of those three, when we say vertically integrated, it usually means you do the whole suite, all three. And I think those businesses are going to be the businesses that are going to have the most staying power in the market, and they're going to be the most successful in the market. Because exactly, you do own your own supply chain. And just because you don't think you might be good at one of those aspects. I don't want people to be scared of doing it. Because there's actually a lot of people out in the cannabis industry who are consultants who can make you very good at something very quickly. So don't think you have to figure it all out for yourself. Like literally lean on lean on tons of knowledge in the industry in really any one of those three, I would not say is overly complicated. Yes, you might not know it. So it's very intimidating. But that does not mean that it is extremely hard to do. But what I will say is, there are many small growers hobbyist growers, who now want to scale up, do not think that growing in a small scale is similar to growing on a large scale. It's like other than it being the same plant, almost everything is different. So as long as you have that in your head, you'll probably do pretty well. But when you try and take methodologies for small growing operations, like a four by four Tange or a four by eight tent, even a 10 by 10 room, and you bring it up to 25 5000 10,000 square feet, totally different set of kind of operational parameters that you're gonna have. And that's something that we kind of focus on we're doing that in New Mexico, you know, we were just out of the trade show that you were at, and we were there as growers house, which is the equipment side and then Kenya cribs consulting, which is the consulting side and we spent Kenny cribs consulting, because Kenny cribs, we basically started filming our customers. So if you watch the candidates Youtube series, you see literally some of the best cannabis cultivators in the country, and we help outfit and help build their operations. And then after we started doing Kenick groups for a while, I started getting a lot of messages on Instagram into my email people saying like, Hey, can you come out and consult us? And I'm like, Well, I mean, I could talk to you, but they're like, no, we want you to fly out, and like, help us with a six month design and build process. And I was like, wow, I kind of have a day job. Like, I can't really go do that. So we had to spin up a consulting division. And we ended up hiring people that were amazingly smart, much smarter than I am a cultivation. These guys have PhDs, like when I was the first PhD of cannabis cultivation in North America, he had to get in Canada, because it's federally illegal there. But these guys are amazingly good. They help build out the Aurora facility for people are familiar with that company in Canada. We're the largest cannabis companies in the world. And the cool thing is, when we go and tour our customers and some of the best cultivation facilities in the country, we learn a lot from them. They teach us a lot. So the cool thing is, we can end up bringing that those benefits to like our customers on the equipment or consulting side. And we think it gives us a little bit of an edge over maybe some other consulting companies out there because of because of that, and it's kind of like a chef, like, let's say you're having a wedding, I think you said you and sage are gonna get married soon. So like, let's say, there's an awesome chef in Austin, who like, yeah, he started his own restaurant. He's a really good chef. You tried his food, it's great, right? Now say, there's a chef who just came into town. And it turns out that this chef also has a great restaurant. But at the same time, there's that show on Netflix or Chef's Table, right? So imagine there's a chef who has toured the top 30 best restaurants in the world and got to go work at them and learn from those chefs. And then comes to Austin, and was like, oh, yeah, you know, I can also cook for your wedding, like, Who are you gonna choose the one who like kind of started with his own restaurant, or maybe the person who learned from 30 of the best restaurants in the world was able to take all that knowledge and condense it down. And they have larger diversity of experiences, larger diversity of methodologies. And usually, when it comes to growers, just like chefs, there's a few things they're really good at, but they're not good at everything. Right. So when we go to growing operations, it's like that a lot. So they're good at certain things. And we like to take the best of what they're great at. And then we can put it all together into the best methodologies for growing cannabis. And like, we could take someone who's like, yeah, I just raised $150,000. And I know nothing about growing, we can take that and we can just like, transmit that information to you. So like, since we, you know, we can do that on cultivation, there's people that can do that on processing, there's people that can do that on retail, don't be intimidated. By going after that stuff. Everyone can be an all star in the cannabis industry. Just be smart, and leverage other people's knowledge. Don't try and make all the mistakes yourself that 10,000 people have already made before you. So that's what I'd kind of say on people looking to get in the cannabis industry or thinking about growing.

Shayda Torabi  48:18  
That comment of people can be good growers. I've been really curious because as a marketer, you know, you kind of look at the best and I equate it to every town, I feel like there's a frickin sign that says this is the best burger. And best is relative. Right? And so you've toured and worked with and I'm sure tried a bunch of different cannabis. What do you believe make something the best? And is the best really? Not even attainable? Is it more around the branding of the business? Then the actual quote like to me, I just don't even know really what is quality? Are we looking for potency? Are we looking for certain formation and try combs? Is it the height of the plant? Is it the amount of flour, you know that it is produced? Like what goes into making something the best? And since you have literally walked through some of the best setups that are producing the best flower? I'm just curious is best really something real that we can achieve in the industry? Or should we maybe be chasing consistency and quality? And maybe that is more attainable for people to be good at something versus I gotta be the best grower or the best? Whatever.

Unknown Speaker  49:41  
Yeah, really great question. And I would say my answer is there is no best cannabis. I think there is a best for you cannabis versus chip invest in like an objective sense. It's gotta be more subjective. And what I mean by that is, is there Our best alcohol in the world. No, there's like, you know, some of my friends like mirlo, some like tequila, some like an IPA. And it's a little bit just more about your subjective experience. And if I could educate cannabis users going into the future, and I wanted to like really impart them with something, it would be that consistency is probably more important than a lot of other things like THC percentage. We've done tests actually where we take flour, different THC percentages all the way from like 10% to 30%. And you just take away all the numbers, just put a number like a number one strain, one strain to strain three to that to 10 send it out to 10 people. And sometimes, you know, they'll be like the 11% thc. And they'll be like, Oh my God, that floored me. And what we're finding out is we kind of use like THC as a proxy for how strong something is. But it turns out, it's a lot more complex than that. And I'd want people to kind of disassociate THC percentage with the quality of cannabis, I think it's more, try a few things and then see what your subjective experiences which one makes you feel best. Everyone's endocannabinoid system is a little bit different. So processes, you know cannabis a little bit differently. So but once you find some that works, well, you want to have that over and over again. So that's where the consistency comes in. So a grower who consistently grows a strain that ends up working well for people, and can keep it consistent. They don't have genetic drift, and they're able to kind of keep the mothers healthy so that maybe they do tissue culture, so they keep the genetics very strong and healthy. I think that's where a lot of value is in the industry. I'm not just on maximizing THC percentage, like maximizing THC percentage is like, it's kind of like going out and buying like the $10,000 Louis Vuitton purse. Why? Oh, because you said you did it. Because you could, you know, you bought 30% cannabis, but really like, did it hold your cell phone and your chapstick better than the $30 pairs? Now it's like, so kind of figure out what works best for you. But if you want to buy the cool is strain, you know, someone can probably make some extra margin from selling it because it has that extra THC. But don't expect that to necessarily mean that you're going to have a better subjective experience using that cannabis.

Shayda Torabi  52:21  
Yeah, it's so fascinating to me as a marketer, kind of looking through the industry. It's like what makes someone purchase something. And I think we have to deal with the industry and educating ourselves. Because I do think you have cultivators and growers who they do, like you said, they want to grow the highest percentage because they can do it. But then you also have the consumers who are not as educated and they think the highest percentage is going to get them the most zoot ID, and then you have everything in between that's like, no, no, no, that's not actually what you're trying to look for. But it's, it's you know, it goes into packaging, labeling the growers picking the genetics, all of it kind of breathed life into that, you know, eight baggie or package that you're purchasing. And so it is just, I think, a slow and steady kind of transition of conversation, where I think people do they want to find the best, but it is really what is the best for you. And so as people are going into the industry, operationally wise, I just I really want people to not be so hung up on like, Well, how do I be, you know, not be the best, like, I want you to be the best, but it's like best is relative. And so I think especially further based on every state that's operating so I am curious, given how many people that you know, grows you've gotten to walk through I was reading there some like level of category that the growers have to be at for them to make it on Canna cribs. And so if you could just kind of like briefly kind of go into that because I do think you are highlighting you know, the best but it's like the best in Los Angeles the best in let's say Colorado the best in you know, different parts of the country. What makes something qualified to make it on Canada cribs and kind of what is your observation then of those people who have kind of achieved that level of status? Is it really going back to well, they just grew really great, you know, buds or they built brand around it kind of what goes into making these businesses qualified to then end up on Ghana cribs.

Unknown Speaker  54:22  
Yeah. So we do some cool things on that side that I really like. But the way we film kind of cribs is actually we go out to like a region. And then we film like four to six episodes at once. And that originally used to be like a state. So like one of the most recent ones we did actually later today. Like literally when I get off this podcast, I'm jumping into Uber and going to the airport to film Dizzy in California. So cool. Yeah, so s t i z y y very big brand in California. Amazing reputation over there. And it's a combination of a few things. We're going out to California. So there there we are. Ask the local cannabis connoisseurs in the area before we go out there. What are the big brands? What are the ones that are well respected by the cannabis industry? And they fill out polls for us, and they helps us know, like, Okay, who are the big brands, we kind of go in there with some idea, but we don't pretend to go into a market and just say like, we know who the best are, we're just going to walk over there and choose them. And, you know, it also has to be a combination of them saying, Yeah, we want to let you in, we're down to kind of show off what we're doing. Some people are very, like, hold things close to the chest, you know, they don't want to open up the kimono, so to speak. So we appreciate the people that do do that. But it has to be a combination of well respected in that area that built a good brand. They're using like they're growing operation has to be doing things that are unique and large, we're not going to go film an operation where like, things are duct taped together and zip tied over a year. Like that's, that's not people operating at their best. And we think people, they want to learn from the best. So we want to show them the best. But we're actually also coming out with some content, that we're really about smaller growers almost like entry level or like really craft boutique growers, caregivers, things like that, because we noticed that a large part of our audience are growers like that. And I think it's, there's value in being aspirational and looking to the absolute best. But there's also a lot of value to like looking at someone that you can relate to who's doing a really good job. So we recognize that and we're going to be creating content really on both of those sides. And we hope that both of them can be valuable to all growers out there.

Shayda Torabi  56:41  
Very, very cool, I think. Yeah, it's just as the industry continues to open up it is people want to see themselves. And I think that there is a little bit of fear, at least from my perspective, you know, speaking transparently as someone who is very much in the industry, and the state isn't quite open yet. And it's will do I even have a fighting chance if Texas goes online, because you're going to have these multi state operators or these legacy people, growers, businesses, operators who have already been doing it. And so how do you kind of rise to the occasion rise to the opportunity to have some skin in the game. So I think what you're doing is certainly very important just to be highlighting these stories, and obviously it ties into your businesses. And as a result, it's helped you continue to grow everything that you're doing. So I'm just like very grateful to get to, you know, bend your ear a little bit and share it with the listeners so that they can get some insight into some of the things that you're seeing and coming across and the conversations that you're privy to. And so final question, I started asking my guests this, and you touched a little bit on, you know, kind of your hope for the future of cannabis. But what is the future of cannabis look like to you, to your businesses to usher in what an opportunity could be it could become with your influence?

Unknown Speaker  57:56  
Yeah, here's the cool thing. I think there's probably a lot of will call it, maybe they're not focused on it now. But maybe they'll use it as like a case study, economist will be looking at the cannabis industry. And they're gonna say, Man, what a peculiar industry. There's so many like smaller operators, it's a product that's 21 Plus, in most states, you can't move across state borders, is not following the path. Like everyone's said of alcohol and tobacco. It's like there's a few things that are reminiscent, but it's very different. It's like an a category of its own almost. And I like that, like I like that there's a lot of small operators, and it's this thing just isn't being like, basically, you know, zipped up in a giant duffel bag from the pharma industry and handed over to a whole bunch of politicians or something. And that's the thing I'd be most scared of. So I would say the cannabis industry as it is today is pretty cool. And I wouldn't want to see it change over to the other side. Like if you if you look at Canada, they have some really big operations, kind of like we were talking about, like, do hot weather States wouldn't want to have really big ones. But they also have some small operators. And I would just love to see diversity in the cannabis industry of business types, business sizes, and for the laws around cannabis to help support that. So that we see a lot of boutique growers that are relevant. And we see medium sized growers that are relevant emerge, you know sized growers that are relevant, and they can help maybe bring in some inexpensive cannabis if we weren't breaking the bank to use it. So like, I would love to see a place for everyone in it. And it not just turn into some corporate overlord farmer thing, like, as long as that doesn't happen. I'm pretty good. You know, are we going to be perfect now? A lot of people gonna like lose businesses. Yes, but I think a lot more people will be employed by the cannabis industry than people thought 10 years ago. People were like, holy crap. This is like It's gonna like have more tax revenue than alcohol, it's gonna have more people working in it than alcohol. And like, that's awesome. So, I would say I hope that the cannabis industry just tries to stay true to its roots while at the same time becoming a little more professional

Shayda Torabi  1:00:22  
I'm super curious, do you agree or disagree with how Nate views federal legalization he makes a great case the states are building infrastructure to help their local economy and they're not going to be too thrilled without leaving if we can all of a sudden ship cannabis freely across state lines. So what do you think? Reach out on Instagram at to be blunt pod connect with me on LinkedIn? Shayda Torabi and let's discuss this why or why not? As always, thanks for keeping up long with me. I will be back next week with another episode of The to be blunt podcast every Monday and encourage you to keep championing cannabis in your community by y'all.

Announcer  1:01:03  
Love this episode of To be blunt. Be sure to visit the Shayda torabi.com/to be blind for more ways to connect new episodes come out on Mondays. And for more behind the scenes follow along on Instagram at the Shayda Torabi

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