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welcome I'm your host Hilary Bricken and
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this is the Cannabis Law Now podcast
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where we regularly discuss issues
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related to the Cannabis industry
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including investment day-to-day
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operational issues and potential reform
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on the horizon that will impact all
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cannabis businesses and investors in the
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United
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States on today's episode of the
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Cannabis law Now podcast I am very lucky
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to have with me the EVP of legal Affairs
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at Multistate operator juy Matt Leeth
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thanks welcome to the show thanks for
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having me of course I think I don't know
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how many years ago now but multi-state
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operator used to be a fairly scary term
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in the industry because it really in
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some people's minds represented kind of
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large marijuana big marijuana what's it
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like being general counsel to a
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multi-state operator this day and age at
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a company like Jushi well you know I had
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started my cannabis career as a lawyer
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so to speak at The Green Solution in
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Colorado where we were just focused in
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Colorado there we had some some side
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action some some national plays going on
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but predominantly was not a multi-state
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oper was a single state operator there
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but a large one at Jushi I would say uh
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you know it started out as a infusion of
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capital from investors looking to invest
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in good assets operating Assets in the
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in in the US I would say what it's like
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working at Jushi has probably gone through
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iterations over the last give or take
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six years and it really started out as
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you know making prudent true investment
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decisions based off of good financials
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and forward-looking you know outlooks on
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how those market conditions will change
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but you know as time has gone on I would
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say you know working in a legal capacity
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legal compliance at Jushi as a multi
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operator really just means my head is
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filled with with multiple states of
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regulations and relationships with
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regulators and trials and tribulations
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of you know operating a national company
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that is you know predominantly siloed
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state to state so just as the business
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at Jushi as well as M other multiple you
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know companies Multistate operators has
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evolved you know it's about scaling
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businesses without the you know benefit
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of multi Multistate uh interconnection
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so it's definitely challenging it
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doesn't really scale intellectually in
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the same way that a lot of other you
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know traditional companies do however
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it's certainly been lots of opportunity
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at every turn when we're looking to
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launch things on a national basis I know
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you've been in the game for a while I
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have two and prior to
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2013 when we got the first coo it was
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dicey I think in many states with the
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exception the lone exception probably of
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Colorado which was already highly
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regulated I think as of 2010 what now
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does your typical day look like as a
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general counsel at Jushi you concerned
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about the federal government in any
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capacity anymore you know I I certainly
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am mainly from the perspective of you
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know what's coming next you know I'm
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sure we'll we'll still talk a little bit
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about that shortly but I would say I'm
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definitely more battle hardened through
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the years I'm sure you are as well
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counseling clients through the Cole memo
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the recision of the co memo and kind of
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where we stand today of sort of
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testimony about you know adhering to the
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principles of the co memo but the co
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memo not really existing like it once
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did you know I would say when I jumped
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in the industry in 2016 I came from a
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pretty traditional Telecom industry
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background so I really went from a
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highly regulated and matured industry to
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a very entrepreneurial challenging
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industry with Regulators um at a state
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level many of whom have never regulated
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businesses before and depending on the
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state could come from backgrounds
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skewing more towards law enforcement or
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taxation or Pharmacy and seeing the the
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philosophies kind of translated into
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those industries from those Industries
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into cannabis has created a lot of you
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know opportunity and sometimes
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roadblocks but at a federal level I
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think the biggest concern that we all
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sort of have but no one can really
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quantify yet is you know how the federal
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government will treat marijuana you know
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when it's schedule three and you know
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potentially descheduled all entirely in
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the future so it's many ways anyone's
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guess there and while I would hope that
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by the time these changes at are federal
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level are propos the industry has
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already been so entrenched in the way
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things are done in certain States but I
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do hope there'll be a dialogue with the
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federal government on you know how to
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best regulate the industry but you know
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it's it's anyone's guess and Jushi like
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most of our multi-state operators in the
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US is a publicly traded company I still
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think you have people scratching their
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heads over how a company can go public
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when it's technically illegally
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trafficking in a controlled substance
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was the go public process this difficult
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for Jushi yes it was and I'm sure it was
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difficult for every you know frankly
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every MSO that has gone in public in Jushi
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story it was a little late to the game
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in terms of formation it was formed in
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early 2018 by four key founders with
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varying backgrounds themselves but all
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of whom had been involved directly or
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indirectly in the canvas n for years
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prior to that and for gui's future it
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was a par it was Paramount that it went
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public you know pretty much as quickly
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as reasonably could and in 2019 that was
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a very chaotic year we went public in
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June of 2019 on the Neo exchange which
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has now been believe it renamed since
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then but when it went public you know
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went through a reverse merger structure
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up in Canada which was pretty much the
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the the playbook for cannabis companies
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to go public and that just like with
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spaxx in the US that Rose to prominence
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because you have these sort of shell
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publicly traded companies that could
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FastTrack incoming companies like Jushi to
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go public faster and economically which
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it just really was key to opening up the
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capital markets to the for the ability
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to expand not just necessarily
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horizontally across multiple States but
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in gui's case to really invest on going
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vertical as much as it reasonably could
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in in certain key markets so I think
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Jushi's success to date or at least its you
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know footprint is really thanks in part
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to going public when it did in 2019 you
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had sort of a a bust towards the end of
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the year in the Cannabis Market as sort
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of the I believe 2018
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Canada adult youth sort of induced
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fervor was starting to dissipate so I
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would speculate if we didn't go public
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as fast as we did we we may have been
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crowded out of the the opportunity for
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at least a couple of years until 21 or
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so when it he back up but long story
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short it was a very hectic time for the
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lawyers the financial folks and the
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leadership at Jushi going public and you
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had mentioned intellectual scaling right
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these businesses can't scale like your
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traditional business because of the lack
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frankly of interstate commerce given the
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federal illegality of cannabis truly
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hindering obviously it has multiple
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collateral effects regarding product
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Integrity the ability to expand the
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ability to organize and have oversight
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what is it like operating as an MSO
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given the current legal landscape it's
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really about trying to find efficiencies
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of scale when you can't have physical
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efficiencies created you know you've got
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scenarios where we we may have a very
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you know hot selling category in one
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state that we legally cannot produce in
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another um we've got you know
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nomenclatures or strain names that we
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can use in some markets and not others
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things like that which can really cause
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patient confusion but then really you
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know that I would say that's more the
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front of the house things that everyone
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could see the back of the house like the
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standard operating procedures and the
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national programs I mean Jushi has you
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know National Sanitation programs uh
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cultivation programs processing programs
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retail etiquette and slps what we do is
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we nationalize those programs as much as
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we can but then we'll have to have
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addendums or or similar Concepts on a
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state-by-state basis because even if it
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can produce the same products in one
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state or another we may not be able to
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grow in the same processing procedure in
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one state that we can in another so I
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would say you know a lot of those
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operational challenges translates into
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clients and legal questions that need to
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be solved which I'm you know thankful
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this Jushi maturity you know were there
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but that wasn't by luck that was a lot
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of effort and that wasn't just the
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lawyers or compliance team folks it was
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a lot of operational knowhow so you know
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the intellectual scaling is is just very
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difficult because you can't just come up
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with you know a GMP based process and
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procedure and then just rolling out and
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that's putting aside the fact that most
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States we operate in you know if you
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change one word in an sop you may have
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to submit that to a regulator and wait
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for them to okay it so you you know
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coming up with the plans is challenging
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rolling them out is challenging and in
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some cases you know rolling them out on
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time can be very challenging and the
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states this is truly a patchwork quilt
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of state-by-state laws and regulations
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no two are the same I still maintain the
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personal opinion that there's no gold
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standard out there for some reason
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states keep copying and pumping out
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maybe even the worst from each other
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depending on the program um much to my
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chrin I would hope that they'd learn
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from each other and and build up and
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make better and your opinion what's the
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best state that's been had for Jushi now I
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will tell you the the best state right
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now is frankly and this is strictly from
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a the sentiment of having a regulator
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that is proactively listening to the
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industry and not not to be told what to
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do of course how to regulate the
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industry but to listen to stakeholders
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that have been operating for years and
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sometimes you know years outside of the
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state that I'm speaking of but in
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Virginia you know we recently trans
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regulatory oversight recently
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transferred from the Board of Pharmacy
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which itself was a was a fairly Fair
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regulator but had a lot of
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pharmacological background that itself
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brought into the industry recently that
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translated transferred over to the CCA
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canas Control Authority and that
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leadership from everything I've heard
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has been very receptive to you know not
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just taking regulations that are on the
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books and accept accepting them as
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gospel but rather you know willing to
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listen to the industry to say why this
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may not work or why this could be
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00:10:28,560 --> 00:10:32,600
refined in a different way and I I look
276
00:10:30,800 --> 00:10:35,000
at all those conversations not like you
277
00:10:32,600 --> 00:10:37,000
know steps steps backwards in any way
278
00:10:35,000 --> 00:10:39,040
for you know consumer health and safety
279
00:10:37,000 --> 00:10:41,480
but rather you know trying to help this
280
00:10:39,040 --> 00:10:43,079
industry continue to grow because it has
281
00:10:41,480 --> 00:10:44,839
been a very challenging industry and in
282
00:10:43,079 --> 00:10:46,880
certain States not Virginia is not
283
00:10:44,839 --> 00:10:50,000
necessarily one of them you know we have
284
00:10:46,880 --> 00:10:52,760
had just difficulties with
285
00:10:50,000 --> 00:10:54,240
efficiencies strictly due to you know
286
00:10:52,760 --> 00:10:57,000
operational burdens brought on by
287
00:10:54,240 --> 00:10:58,880
regulations so I really you know still
288
00:10:57,000 --> 00:11:01,519
have a very good sentiment and feeling
289
00:10:58,880 --> 00:11:03,000
towards CCA and their leadership um I've
290
00:11:01,519 --> 00:11:05,480
heard great things haven't really had to
291
00:11:03,000 --> 00:11:07,560
deal with them too directly yet but Ohio
292
00:11:05,480 --> 00:11:09,639
the transfer to all the control to
293
00:11:07,560 --> 00:11:11,600
division of cannabis control there you
294
00:11:09,639 --> 00:11:13,440
know their leadership I'm told is comes
295
00:11:11,600 --> 00:11:15,279
from a you know liquor regulatory
296
00:11:13,440 --> 00:11:16,880
background with sort of that same
297
00:11:15,279 --> 00:11:19,440
mindset whether you look at it as a
298
00:11:16,880 --> 00:11:21,279
medicine or you know an intoxicant or
299
00:11:19,440 --> 00:11:24,279
both you know the role of The Regulators
300
00:11:21,279 --> 00:11:25,920
is to ensure consumer and patient safety
301
00:11:24,279 --> 00:11:27,680
while letting the businesses run their
302
00:11:25,920 --> 00:11:29,360
businesses and I think that's sort of
303
00:11:27,680 --> 00:11:31,079
the sentiment I'm getting from Ohio
304
00:11:29,360 --> 00:11:34,040
those are my two top two right now that
305
00:11:31,079 --> 00:11:36,320
ju's dealing with and on the flip what
306
00:11:34,040 --> 00:11:39,480
have been the toughest States and and
307
00:11:36,320 --> 00:11:41,200
you may be surprising people here on
308
00:11:39,480 --> 00:11:42,560
what the toughest states have been and
309
00:11:41,200 --> 00:11:44,560
you know what do I mean when I say tough
310
00:11:42,560 --> 00:11:46,959
versus best you hit the nail on the head
311
00:11:44,560 --> 00:11:49,079
from the regulatory perspective with an
312
00:11:46,959 --> 00:11:51,160
eye to Consumer safety eye to public
313
00:11:49,079 --> 00:11:53,399
health and safety but also being
314
00:11:51,160 --> 00:11:56,000
business intuitive friendly investing
315
00:11:53,399 --> 00:11:58,000
and Innovation from that perspective
316
00:11:56,000 --> 00:11:59,920
what have the toughest States been maybe
317
00:11:58,000 --> 00:12:02,040
one or two if you don't mind
318
00:11:59,920 --> 00:12:04,760
so I'm not sure that I would necessarily
319
00:12:02,040 --> 00:12:06,399
tell you who states I I dislike
320
00:12:04,760 --> 00:12:08,120
currently especially ones that Jushi is
321
00:12:06,399 --> 00:12:09,720
currently operating within but I would
322
00:12:08,120 --> 00:12:11,760
say philosophically a lot of the things
323
00:12:09,720 --> 00:12:13,920
I was saying earlier about what makes a
324
00:12:11,760 --> 00:12:16,360
you know quote unquote good state to to
325
00:12:13,920 --> 00:12:18,199
operate in or or communicate with it's
326
00:12:16,360 --> 00:12:20,000
it's really the opposite of that one of
327
00:12:18,199 --> 00:12:22,079
the most frustrating things I think in
328
00:12:20,000 --> 00:12:24,199
operating in a state would be knowing
329
00:12:22,079 --> 00:12:25,720
there's a rule on the books that makes
330
00:12:24,199 --> 00:12:28,240
no sense from a patient health and
331
00:12:25,720 --> 00:12:30,279
safety perspective or truth and
332
00:12:28,240 --> 00:12:32,360
advertising perspec effective or is just
333
00:12:30,279 --> 00:12:35,160
otherwise Draconian without really much
334
00:12:32,360 --> 00:12:36,720
you know rationale for it being so and
335
00:12:35,160 --> 00:12:39,800
having a regulator that that's not
336
00:12:36,720 --> 00:12:40,920
receptive to listening and potentially
337
00:12:39,800 --> 00:12:43,399
of course you know going through a
338
00:12:40,920 --> 00:12:46,000
formal room making process to address so
339
00:12:43,399 --> 00:12:49,560
I will say historically um Nevada was a
340
00:12:46,000 --> 00:12:52,320
very tough State uh for Jushi um primarily
341
00:12:49,560 --> 00:12:54,600
from a entrance perspective they had a
342
00:12:52,320 --> 00:12:58,000
lot of we to say political drama and
343
00:12:54,600 --> 00:13:00,959
baggage um that had developed in 2018
344
00:12:58,000 --> 00:13:04,160
2019 under the Department of Taxation
345
00:13:00,959 --> 00:13:06,279
and then that transferred to the uh CCB
346
00:13:04,160 --> 00:13:10,000
but that wasn't an overnight switch that
347
00:13:06,279 --> 00:13:11,839
created a was audaciously long backlog
348
00:13:10,000 --> 00:13:13,880
for any changes of ownership
349
00:13:11,839 --> 00:13:15,639
applications or anything else that
350
00:13:13,880 --> 00:13:17,639
ultimately became the regulatory
351
00:13:15,639 --> 00:13:19,600
approval factor for us to be able to
352
00:13:17,639 --> 00:13:21,199
operate within those States and when
353
00:13:19,600 --> 00:13:22,880
you're in an industry that you know once
354
00:13:21,199 --> 00:13:25,600
you've made the investment decision and
355
00:13:22,880 --> 00:13:27,360
you've tied up the capital to enter aate
356
00:13:25,600 --> 00:13:29,480
every day you're not actually closing
357
00:13:27,360 --> 00:13:31,440
that transaction is is a lost
358
00:13:29,480 --> 00:13:34,519
opportunity so that was a very
359
00:13:31,440 --> 00:13:37,120
challenging State there were some uh you
360
00:13:34,519 --> 00:13:40,079
know interesting ways to help expedite
361
00:13:37,120 --> 00:13:42,480
the process here and there in Nevada um
362
00:13:40,079 --> 00:13:43,920
we we got through those processes you
363
00:13:42,480 --> 00:13:45,839
know had everything approved of course
364
00:13:43,920 --> 00:13:48,680
before we stepped into these licenses
365
00:13:45,839 --> 00:13:50,959
but at the end of the day um
366
00:13:48,680 --> 00:13:53,480
substantively having a regulator that
367
00:13:50,959 --> 00:13:55,519
listens to you and is willing to change
368
00:13:53,480 --> 00:13:57,160
the way things are done for for the good
369
00:13:55,519 --> 00:13:59,199
of the industry and for patients and
370
00:13:57,160 --> 00:14:01,040
consumers substantively it's very
371
00:13:59,199 --> 00:14:03,240
important but procedurally too having
372
00:14:01,040 --> 00:14:05,720
Regulators that respond quickly to
373
00:14:03,240 --> 00:14:08,160
Applications of any sort is is critical
374
00:14:05,720 --> 00:14:10,399
so well I won't name you know currently
375
00:14:08,160 --> 00:14:12,720
states that you know I dislike dealing
376
00:14:10,399 --> 00:14:14,240
with on a daily basis I would say if if
377
00:14:12,720 --> 00:14:16,240
you're a state regulator listening to
378
00:14:14,240 --> 00:14:18,440
this and you respond to Applications
379
00:14:16,240 --> 00:14:20,360
quickly and you know take a phone call
380
00:14:18,440 --> 00:14:23,880
from the industry then you're not one of
381
00:14:20,360 --> 00:14:26,240
those States I like that criteria okay
382
00:14:23,880 --> 00:14:29,519
now other question and I think a lot of
383
00:14:26,240 --> 00:14:31,720
people do want to know this from the MSO
384
00:14:29,519 --> 00:14:34,399
perspective because within have
385
00:14:31,720 --> 00:14:36,160
interstate commerce potentially Jushi has
386
00:14:34,399 --> 00:14:37,759
to set up a new entity with new
387
00:14:36,160 --> 00:14:38,720
licensing every time it enters a state
388
00:14:37,759 --> 00:14:40,720
or it's in these thirdparty
389
00:14:38,720 --> 00:14:42,680
relationships to expand the footprint
390
00:14:40,720 --> 00:14:44,480
whether that's IP licensing management
391
00:14:42,680 --> 00:14:47,440
companies whatever um could spand the
392
00:14:44,480 --> 00:14:49,480
gamut how are you dealing with what I'm
393
00:14:47,440 --> 00:14:52,040
going to call the banking epidemic and
394
00:14:49,480 --> 00:14:55,120
for everybody listening whether you're a
395
00:14:52,040 --> 00:14:56,399
seasoned cannabis operator or a newbie
396
00:14:55,120 --> 00:14:58,000
obviously access to financial
397
00:14:56,399 --> 00:15:00,240
institutions is very difficult because
398
00:14:58,000 --> 00:15:02,920
of federal illegality we really when I
399
00:15:00,240 --> 00:15:05,079
say we the industry only have one path
400
00:15:02,920 --> 00:15:06,880
to legitimate banking through the
401
00:15:05,079 --> 00:15:09,360
financial crimes enforcement Network
402
00:15:06,880 --> 00:15:11,519
guidelines from 2014 that enable
403
00:15:09,360 --> 00:15:13,240
financial institutions to just Bank the
404
00:15:11,519 --> 00:15:15,759
industry I'm not even talking about
405
00:15:13,240 --> 00:15:18,480
lending or anything else that are still
406
00:15:15,759 --> 00:15:21,160
around that did not get rescinded in
407
00:15:18,480 --> 00:15:23,040
2018 so how do you deal with that and
408
00:15:21,160 --> 00:15:25,759
especially as a legal counsel I know
409
00:15:23,040 --> 00:15:27,320
it's no picnic I represent a few Banks
410
00:15:25,759 --> 00:15:29,199
and just dealing with their compliance
411
00:15:27,320 --> 00:15:31,399
and reporting to their regulators this
412
00:15:29,199 --> 00:15:33,279
is a heavy lift with which to comply
413
00:15:31,399 --> 00:15:35,839
those guidelines yeah it's something
414
00:15:33,279 --> 00:15:37,560
that I'm sad to say that six years
415
00:15:35,839 --> 00:15:39,360
actually eight years into the industry
416
00:15:37,560 --> 00:15:41,319
there hasn't been much material change
417
00:15:39,360 --> 00:15:44,639
you know how cannabis company's bank I
418
00:15:41,319 --> 00:15:46,279
would say msos typically have I guess
419
00:15:44,639 --> 00:15:49,000
the the privilege I think of working
420
00:15:46,279 --> 00:15:51,160
with more banks that are willing based
421
00:15:49,000 --> 00:15:53,319
on their own risk perspectiv and their
422
00:15:51,160 --> 00:15:55,279
tolerances which cannabis companies they
423
00:15:53,319 --> 00:15:57,279
would work with I think I think we
424
00:15:55,279 --> 00:15:59,480
probably have more opportunities than a
425
00:15:57,279 --> 00:16:02,199
brand new upstart that's not well funded
426
00:15:59,480 --> 00:16:04,040
or well capitalized however it's still
427
00:16:02,199 --> 00:16:06,279
very challenging I don't know what the
428
00:16:04,040 --> 00:16:07,880
total count is currently as of today but
429
00:16:06,279 --> 00:16:10,279
you know we have many banking
430
00:16:07,880 --> 00:16:12,839
relationships and dozens of banking
431
00:16:10,279 --> 00:16:14,440
accounts across the US I would say
432
00:16:12,839 --> 00:16:16,360
cannabis dispensaries are still very
433
00:16:14,440 --> 00:16:18,839
much so a you know a cash driven
434
00:16:16,360 --> 00:16:21,839
business of course there has been you
435
00:16:18,839 --> 00:16:23,720
know one point credit card transactions
436
00:16:21,839 --> 00:16:26,000
that pretty much got shut down quickly
437
00:16:23,720 --> 00:16:28,279
you know five six years ago by by Visa
438
00:16:26,000 --> 00:16:31,120
Mastercard and has never really come
439
00:16:28,279 --> 00:16:33,480
back there there has been most recently
440
00:16:31,120 --> 00:16:36,000
uh point of banking terminals or in some
441
00:16:33,480 --> 00:16:37,920
cases debit terminals um those have had
442
00:16:36,000 --> 00:16:39,600
their own trials and tribulations
443
00:16:37,920 --> 00:16:41,600
they're fairly expensive I think when
444
00:16:39,600 --> 00:16:43,240
you consider when you go to any other
445
00:16:41,600 --> 00:16:45,079
retail store and use your debit card
446
00:16:43,240 --> 00:16:47,639
you're not being charged as a consumer
447
00:16:45,079 --> 00:16:49,560
any anything for the ability to do that
448
00:16:47,639 --> 00:16:52,399
but in almost every dispensary you walk
449
00:16:49,560 --> 00:16:55,079
into many of DUI's included you know
450
00:16:52,399 --> 00:16:57,040
there is a you know three or 350
451
00:16:55,079 --> 00:16:58,480
convenience fee and that's typically not
452
00:16:57,040 --> 00:17:00,959
a profit center for the cannabis
453
00:16:58,480 --> 00:17:03,440
companies that's just a uh you know
454
00:17:00,959 --> 00:17:05,199
basically a mitigation of the costs it
455
00:17:03,440 --> 00:17:07,319
it costs those companies to take that
456
00:17:05,199 --> 00:17:10,360
charges and that's generally because
457
00:17:07,319 --> 00:17:13,000
when you have rules and procedures in
458
00:17:10,360 --> 00:17:15,120
banking rules that crowd out all the
459
00:17:13,000 --> 00:17:16,679
federally chartered Banks and you're
460
00:17:15,120 --> 00:17:18,520
only dealing with State chartered Banks
461
00:17:16,679 --> 00:17:21,520
and you're only dealing with sort of a
462
00:17:18,520 --> 00:17:23,360
subset of uh Payment Processing vendors
463
00:17:21,520 --> 00:17:25,240
everything gets more expensive and then
464
00:17:23,360 --> 00:17:26,839
as the legal compliance side of things
465
00:17:25,240 --> 00:17:29,360
you have to be very scrutinous of these
466
00:17:26,839 --> 00:17:31,360
opportunities you know we I myself I
467
00:17:29,360 --> 00:17:34,039
have to put in the spam folder on a
468
00:17:31,360 --> 00:17:36,559
daily basis multiple credit card debit
469
00:17:34,039 --> 00:17:38,600
card point of banking type uh uh
470
00:17:36,559 --> 00:17:40,320
offerings because you know everyone is
471
00:17:38,600 --> 00:17:42,080
sort of blasting the industry trying to
472
00:17:40,320 --> 00:17:44,039
get each other's business but a lot of
473
00:17:42,080 --> 00:17:46,880
times you just have to really do your
474
00:17:44,039 --> 00:17:48,600
own kyc diligence on on knowing who
475
00:17:46,880 --> 00:17:51,160
you're working with it's you know for a
476
00:17:48,600 --> 00:17:52,919
company like Jushi we're very critical
477
00:17:51,160 --> 00:17:54,880
ensuring that you know our transactions
478
00:17:52,919 --> 00:17:56,640
are coded appropriately and that we're
479
00:17:54,880 --> 00:17:59,880
not dealing with any sort of kyc
480
00:17:56,640 --> 00:18:02,400
shutdown events from Merchant Banks
481
00:17:59,880 --> 00:18:05,280
however you know it's just a sort of a
482
00:18:02,400 --> 00:18:08,600
black box right now still for a lot of
483
00:18:05,280 --> 00:18:10,039
um those on the outside of of those
484
00:18:08,600 --> 00:18:11,600
companies those payment processing
485
00:18:10,039 --> 00:18:13,840
companies to know how the inner workings
486
00:18:11,600 --> 00:18:15,559
work it's just it's highrisk that's why
487
00:18:13,840 --> 00:18:17,640
they call it highrisk processing and
488
00:18:15,559 --> 00:18:19,679
that's only because of you know we don't
489
00:18:17,640 --> 00:18:22,440
have access to you know safe Banking Act
490
00:18:19,679 --> 00:18:24,559
enabled relationships with big Banks so
491
00:18:22,440 --> 00:18:26,960
I'm sure our CFO would love the ability
492
00:18:24,559 --> 00:18:28,960
to have you know one main bank account
493
00:18:26,960 --> 00:18:31,600
at a I'm not just saying any one you
494
00:18:28,960 --> 00:18:33,760
know Bank of America some large credible
495
00:18:31,600 --> 00:18:35,200
too big to fail type bank but you know
496
00:18:33,760 --> 00:18:37,120
those just aren't available to the
497
00:18:35,200 --> 00:18:39,120
Cannabis industry and it's incredibly
498
00:18:37,120 --> 00:18:41,600
challenging and frankly expensive to to
499
00:18:39,120 --> 00:18:45,000
operate in the current regime I to put
500
00:18:41,600 --> 00:18:48,480
those cannabis banking Solutions emails
501
00:18:45,000 --> 00:18:51,440
and promotions into my spam so you are
502
00:18:48,480 --> 00:18:54,760
in good company another question just to
503
00:18:51,440 --> 00:18:56,720
Pivot because msos to me are still
504
00:18:54,760 --> 00:18:59,840
fascinating I think they're carrying the
505
00:18:56,720 --> 00:19:03,440
load of a lot of progress definitely a
506
00:18:59,840 --> 00:19:06,200
lot of Market action let's talk briefly
507
00:19:03,440 --> 00:19:08,320
about hemp derived intoxicating
508
00:19:06,200 --> 00:19:10,039
cannabinoids and for those of you who
509
00:19:08,320 --> 00:19:12,440
don't know this at least to me in my
510
00:19:10,039 --> 00:19:15,280
opinion is a separate segment of the
511
00:19:12,440 --> 00:19:18,320
entire marijuana industry derived from
512
00:19:15,280 --> 00:19:20,080
the passage of the 2018 farm bill and
513
00:19:18,320 --> 00:19:23,320
without getting into the excruciating
514
00:19:20,080 --> 00:19:26,080
details of that law they apparently
515
00:19:23,320 --> 00:19:28,320
allegedly is a path for hemp derived
516
00:19:26,080 --> 00:19:32,280
intoxicating cannabinoids that don't
517
00:19:28,320 --> 00:19:34,919
amount to more than 3% THC and these
518
00:19:32,280 --> 00:19:37,400
products are taking the form of
519
00:19:34,919 --> 00:19:40,360
beverages Edibles you name it and they
520
00:19:37,400 --> 00:19:42,520
seem to be ubiquitous and also moving in
521
00:19:40,360 --> 00:19:45,080
interstate commerce and there's a very
522
00:19:42,520 --> 00:19:46,760
healthy amount of debate regarding the
523
00:19:45,080 --> 00:19:49,640
legality
524
00:19:46,760 --> 00:19:52,679
legitimacy the origin of how these
525
00:19:49,640 --> 00:19:55,799
products are made and as an MSO Matt and
526
00:19:52,679 --> 00:19:58,120
a GC for an MSO popular one what do you
527
00:19:55,799 --> 00:20:00,799
think of these products and are they
528
00:19:58,120 --> 00:20:03,799
crowding market share is there concern
529
00:20:00,799 --> 00:20:06,400
over them what's your general sentiment
530
00:20:03,799 --> 00:20:09,320
well I would say look at the end of the
531
00:20:06,400 --> 00:20:12,080
day Jushi exists for its shareholders and
532
00:20:09,320 --> 00:20:15,520
if Jushi found a pathway that it felt
533
00:20:12,080 --> 00:20:17,640
reasonably and legally confident in the
534
00:20:15,520 --> 00:20:19,840
ability to enter that market I wouldn't
535
00:20:17,640 --> 00:20:22,000
say that Jushi wouldn't enter it but as it
536
00:20:19,840 --> 00:20:24,799
stands right now as you sort of
537
00:20:22,000 --> 00:20:26,760
mitigated the way you were framing it I
538
00:20:24,799 --> 00:20:28,320
think there is a lot of ambiguity here
539
00:20:26,760 --> 00:20:30,640
there's a lot of gray area and there's a
540
00:20:28,320 --> 00:20:32,120
lot of interpretation um going on right
541
00:20:30,640 --> 00:20:35,120
now which has sort of
542
00:20:32,120 --> 00:20:37,480
fostered frankly you know explosion of
543
00:20:35,120 --> 00:20:40,000
the industry in the last 18 months or so
544
00:20:37,480 --> 00:20:41,960
Jushi went public in 2018 just for example
545
00:20:40,000 --> 00:20:45,600
the farm bill that is currently in
546
00:20:41,960 --> 00:20:47,360
effect that enabled this 3% THC carve
547
00:20:45,600 --> 00:20:49,000
out to the definition of marijuana under
548
00:20:47,360 --> 00:20:51,840
the Controlled Substances Act was also
549
00:20:49,000 --> 00:20:53,640
in 2018 but I think anyone who was
550
00:20:51,840 --> 00:20:56,080
reasonably close to the industry at the
551
00:20:53,640 --> 00:20:59,440
time knew very well that that was meant
552
00:20:56,080 --> 00:21:03,320
to be a non- intoxicating cannaboid
553
00:20:59,440 --> 00:21:05,760
Carval I.E CBD which is why you saw the
554
00:21:03,320 --> 00:21:08,760
CBD industry sort of Unleashed almost
555
00:21:05,760 --> 00:21:12,039
overnight once that farm bill was passed
556
00:21:08,760 --> 00:21:15,000
um and then you sort of had this glut of
557
00:21:12,039 --> 00:21:17,520
over production in the CBD space and it
558
00:21:15,000 --> 00:21:18,799
was determined by very people smarter
559
00:21:17,520 --> 00:21:21,720
than me that you could chemically
560
00:21:18,799 --> 00:21:24,520
convert CBD to Delta 8 THC through a
561
00:21:21,720 --> 00:21:27,039
fairly rudimentary process um so then
562
00:21:24,520 --> 00:21:29,159
you saw this influx of you know mildly
563
00:21:27,039 --> 00:21:31,799
but still mild moderately
564
00:21:29,159 --> 00:21:33,559
uh intoxicating products called Delta a
565
00:21:31,799 --> 00:21:36,000
and then more recently there's a couple
566
00:21:33,559 --> 00:21:38,039
of different sub interpretations to it
567
00:21:36,000 --> 00:21:40,080
but the bottom line is there there is
568
00:21:38,039 --> 00:21:42,520
now a sort of a camp and or there's an
569
00:21:40,080 --> 00:21:45,799
industry that believes that because the
570
00:21:42,520 --> 00:21:48,880
hemp being grown is very low and THC but
571
00:21:45,799 --> 00:21:50,720
is high in thca the precursor to THC
572
00:21:48,880 --> 00:21:53,480
that it still fits within the confines
573
00:21:50,720 --> 00:21:56,039
with that exception in the mean time
574
00:21:53,480 --> 00:21:58,640
with legalization of the state regulated
575
00:21:56,039 --> 00:22:00,679
marijuana Industries you you've seen
576
00:21:58,640 --> 00:22:02,600
over time even in states that aren't
577
00:22:00,679 --> 00:22:04,480
legal for adult use like here where I'm
578
00:22:02,600 --> 00:22:06,000
in in Florida you you can't just walk
579
00:22:04,480 --> 00:22:08,240
into a dispensary you have to have a
580
00:22:06,000 --> 00:22:11,000
medical marijuana car that's recertified
581
00:22:08,240 --> 00:22:13,039
every every seven months um and a state
582
00:22:11,000 --> 00:22:15,640
C that's issued every year just for the
583
00:22:13,039 --> 00:22:20,240
ability to buy medical marijuana let's
584
00:22:15,640 --> 00:22:22,400
say with 15 20% thca in in the regulated
585
00:22:20,240 --> 00:22:24,320
Industries as I call it maybe that's
586
00:22:22,400 --> 00:22:26,679
that's too aggressive you know when you
587
00:22:24,320 --> 00:22:29,279
look at THC you're looking at THC from a
588
00:22:26,679 --> 00:22:31,240
conversion factor which includes thca
589
00:22:29,279 --> 00:22:33,159
included in that but because of the way
590
00:22:31,240 --> 00:22:36,200
the farm bill was crafted there are many
591
00:22:33,159 --> 00:22:38,640
that believe that you do not count thca
592
00:22:36,200 --> 00:22:41,000
per purposes of determinate determining
593
00:22:38,640 --> 00:22:43,720
if the source product is hemp or
594
00:22:41,000 --> 00:22:45,440
marijuana and if you can come to the
595
00:22:43,720 --> 00:22:48,360
intellectual conclusion that what you're
596
00:22:45,440 --> 00:22:50,559
holding in your hand is hemp then you
597
00:22:48,360 --> 00:22:52,080
can extract it you can concentrate it as
598
00:22:50,559 --> 00:22:54,520
much as you want and it's still
599
00:22:52,080 --> 00:22:56,640
considered hemp there's been so much law
600
00:22:54,520 --> 00:22:58,600
enforcement and general regulatory
601
00:22:56,640 --> 00:23:00,960
enforcement ambiguity over the years
602
00:22:58,600 --> 00:23:04,200
years it's also sort of opened up the
603
00:23:00,960 --> 00:23:07,039
opportunity to having very aggressive
604
00:23:04,200 --> 00:23:09,200
sales of these products going on and I
605
00:23:07,039 --> 00:23:11,440
will say a personal opinion it's very
606
00:23:09,200 --> 00:23:14,039
frustrating having been in the state
607
00:23:11,440 --> 00:23:15,640
regulated side for eight years and seen
608
00:23:14,039 --> 00:23:17,360
you know a dozen different states up
609
00:23:15,640 --> 00:23:20,559
close and how they regulate their
610
00:23:17,360 --> 00:23:24,480
products um how you know aggressively
611
00:23:20,559 --> 00:23:27,480
taxed uh and tested and frankly limited
612
00:23:24,480 --> 00:23:29,720
on how we can Market our products while
613
00:23:27,480 --> 00:23:32,640
now you've got the sort of parallel
614
00:23:29,720 --> 00:23:34,159
industry that has essentially no rules
615
00:23:32,640 --> 00:23:36,480
subject to even you know subject to the
616
00:23:34,159 --> 00:23:39,279
FTC stepping in that you you can't
617
00:23:36,480 --> 00:23:41,559
blatantly copy you know trademarks of of
618
00:23:39,279 --> 00:23:42,559
other food products um but other than
619
00:23:41,559 --> 00:23:44,480
that there's been very little
620
00:23:42,559 --> 00:23:46,200
enforcement against this industry you
621
00:23:44,480 --> 00:23:48,159
are seeing some states start to clamp
622
00:23:46,200 --> 00:23:50,000
down on this and that's coresponding its
623
00:23:48,159 --> 00:23:53,320
own state-based
624
00:23:50,000 --> 00:23:54,960
leg lawsuits and litigation challenging
625
00:23:53,320 --> 00:23:58,159
whether states can do that when the farm
626
00:23:54,960 --> 00:23:59,400
bill arguably supersedes it so you know
627
00:23:58,159 --> 00:24:02,080
there are a lot there's a lot of
628
00:23:59,400 --> 00:24:04,640
tentacles to that question I would say I
629
00:24:02,080 --> 00:24:06,400
would say the most frustrating part is
630
00:24:04,640 --> 00:24:08,640
um you know this is an industry that I
631
00:24:06,400 --> 00:24:11,440
live in that live and work in that is
632
00:24:08,640 --> 00:24:13,600
highly taxed highly regulated we have
633
00:24:11,440 --> 00:24:16,360
always looked at ourselves like we are
634
00:24:13,600 --> 00:24:19,120
out there proving to the general
635
00:24:16,360 --> 00:24:20,880
populations that this is a safe product
636
00:24:19,120 --> 00:24:23,200
that can be sold that can be marketed
637
00:24:20,880 --> 00:24:24,720
appropriately it can you know they take
638
00:24:23,200 --> 00:24:26,559
a look at the coal memo we can do all
639
00:24:24,720 --> 00:24:29,240
the things that the coal memo wants us
640
00:24:26,559 --> 00:24:31,399
to to do or not do and yet this is sort
641
00:24:29,240 --> 00:24:34,399
of an unregulated Wild West industry
642
00:24:31,399 --> 00:24:36,520
with the thca intoxicating cannaboids
643
00:24:34,399 --> 00:24:39,600
that's that's unfolding and it's it's
644
00:24:36,520 --> 00:24:42,000
fairly it's enigmatic because it's not
645
00:24:39,600 --> 00:24:43,640
really clear other than analyst
646
00:24:42,000 --> 00:24:46,039
estimates how big the industry is
647
00:24:43,640 --> 00:24:48,159
getting because these are predominantly
648
00:24:46,039 --> 00:24:50,399
almost exclusively privately held
649
00:24:48,159 --> 00:24:51,960
companies not publicly traded companies
650
00:24:50,399 --> 00:24:54,399
which if you ask me that that's
651
00:24:51,960 --> 00:24:56,520
indicative of how uncertain the legal
652
00:24:54,399 --> 00:24:58,520
landscape is with that industry and at
653
00:24:56,520 --> 00:25:00,760
the outset of our conversation you
654
00:24:58,520 --> 00:25:02,679
mentioned the potential move to schedule
655
00:25:00,760 --> 00:25:04,520
3 for cannabis from schedule one to
656
00:25:02,679 --> 00:25:05,919
schedule 3 we know the Drug Enforcement
657
00:25:04,520 --> 00:25:08,320
Administration is reviewing the
658
00:25:05,919 --> 00:25:10,720
recommendations from the department of
659
00:25:08,320 --> 00:25:12,520
human health and safety they're Bound by
660
00:25:10,720 --> 00:25:13,799
the medical and scientific findings
661
00:25:12,520 --> 00:25:17,640
they're going to take as long as they
662
00:25:13,799 --> 00:25:19,840
take to make a rule either keeping it on
663
00:25:17,640 --> 00:25:21,799
schedule one or moving it lower
664
00:25:19,840 --> 00:25:25,840
potentially to schedule 3 what would a
665
00:25:21,799 --> 00:25:27,840
reschedule to three mean for Jushi and
666
00:25:25,840 --> 00:25:30,520
potentially the other msos that are in
667
00:25:27,840 --> 00:25:33,240
this very bizarre inability to
668
00:25:30,520 --> 00:25:35,799
intelligently scale somehow scaling
669
00:25:33,240 --> 00:25:38,320
anyway siloed state to state what would
670
00:25:35,799 --> 00:25:40,720
it mean for cannabis to become a
671
00:25:38,320 --> 00:25:43,559
schedule three controlled substance yeah
672
00:25:40,720 --> 00:25:44,399
it it's on on its face and I think most
673
00:25:43,559 --> 00:25:47,399
would
674
00:25:44,399 --> 00:25:50,960
agree the biggest clear effect it would
675
00:25:47,399 --> 00:25:52,200
have is eliminate the IRS code 280e
676
00:25:50,960 --> 00:25:56,840
which I know we're not going too deep
677
00:25:52,200 --> 00:25:58,279
into but um IRS IRC rather 280e apply
678
00:25:56,840 --> 00:26:00,640
specifically to schedule one and
679
00:25:58,279 --> 00:26:02,440
scheduled to drugs disallowing business
680
00:26:00,640 --> 00:26:04,399
deductions and other sort of ordinary
681
00:26:02,440 --> 00:26:07,039
deductions that ultimately creates a
682
00:26:04,399 --> 00:26:09,520
scenario where msos are paying effective
683
00:26:07,039 --> 00:26:12,159
tax rates which could exceed net income
684
00:26:09,520 --> 00:26:14,640
that's a huge Catalyst for the industry
685
00:26:12,159 --> 00:26:17,159
in and of itself how El you quantify
686
00:26:14,640 --> 00:26:19,240
what's to come I think it's a lot more
687
00:26:17,159 --> 00:26:21,080
subject to debate something schedule on
688
00:26:19,240 --> 00:26:23,480
schedule three is not necessarily
689
00:26:21,080 --> 00:26:25,960
something that you can sell over the
690
00:26:23,480 --> 00:26:27,840
counter without a prescription I.E this
691
00:26:25,960 --> 00:26:31,640
is not going to legalize adult use on
692
00:26:27,840 --> 00:26:34,640
its face there's always possibilities of
693
00:26:31,640 --> 00:26:36,679
sort of semi interstate commerce opening
694
00:26:34,640 --> 00:26:38,880
up on the medical space and potentially
695
00:26:36,679 --> 00:26:41,520
on the adult youth space um but it
696
00:26:38,880 --> 00:26:43,919
really remains to be seen how can a
697
00:26:41,520 --> 00:26:46,679
product that is sold both recreationally
698
00:26:43,919 --> 00:26:48,760
and medically on schedule three will
699
00:26:46,679 --> 00:26:50,640
exist in the interstate construct it's
700
00:26:48,760 --> 00:26:52,679
it's to me at least it's really not
701
00:26:50,640 --> 00:26:55,000
quite clear and until we start seeing
702
00:26:52,679 --> 00:26:58,720
real guidance come out either from the
703
00:26:55,000 --> 00:27:00,799
doj or the DEA or the FDA or anywhere
704
00:26:58,720 --> 00:27:03,520
else in between I would say it's all
705
00:27:00,799 --> 00:27:06,360
just speculation but I think the 280e
706
00:27:03,520 --> 00:27:08,440
solve in and of itself it is is worth
707
00:27:06,360 --> 00:27:10,240
dying on the hill over because that is
708
00:27:08,440 --> 00:27:12,440
crushing the industry as it continues to
709
00:27:10,240 --> 00:27:14,480
mature I think you're right about at
710
00:27:12,440 --> 00:27:17,279
least what the world would look like
711
00:27:14,480 --> 00:27:18,520
post rescheduling there's not a lot of
712
00:27:17,279 --> 00:27:21,279
scenarios where you can buy
713
00:27:18,520 --> 00:27:23,799
pharmaceutical drug and then it's twin
714
00:27:21,279 --> 00:27:24,799
recreational partner at 7-Eleven I think
715
00:27:23,799 --> 00:27:26,520
you're right there's a lot of
716
00:27:24,799 --> 00:27:28,880
speculation out there but I'm with you
717
00:27:26,520 --> 00:27:30,760
on the 280e release
718
00:27:28,880 --> 00:27:33,600
if you could choose today I'm just
719
00:27:30,760 --> 00:27:35,960
curious as GC for Jushi what federal
720
00:27:33,600 --> 00:27:37,600
regulator would you pick to oversee your
721
00:27:35,960 --> 00:27:39,880
business I cannot imagine that it would
722
00:27:37,600 --> 00:27:41,880
be the FDA even though they would be
723
00:27:39,880 --> 00:27:43,519
collateral because obviously we're
724
00:27:41,880 --> 00:27:44,880
talking about potentially Food and Drugs
725
00:27:43,519 --> 00:27:46,880
but who would you pick if you had your
726
00:27:44,880 --> 00:27:49,600
brothers when I started out I always
727
00:27:46,880 --> 00:27:51,600
looked at the products like a dietary
728
00:27:49,600 --> 00:27:54,039
supplement but that was a pretty naive
729
00:27:51,600 --> 00:27:55,640
sort of introductory Viewpoint I think
730
00:27:54,039 --> 00:27:57,480
on the product because the product can
731
00:27:55,640 --> 00:28:00,240
take so many different forms of
732
00:27:57,480 --> 00:28:02,720
ingestion inhalation intake and
733
00:28:00,240 --> 00:28:05,159
depending on the product and how perhaps
734
00:28:02,720 --> 00:28:07,320
the derivatives are compounded it can
735
00:28:05,159 --> 00:28:10,080
truly be a medical product or it can be
736
00:28:07,320 --> 00:28:12,080
a psychoactive recreational product so I
737
00:28:10,080 --> 00:28:16,600
think you know to your point I think
738
00:28:12,080 --> 00:28:19,720
treating the entire marijana sphere of
739
00:28:16,600 --> 00:28:21,840
of of product uh categories as one is
740
00:28:19,720 --> 00:28:23,600
problematic to me I think that means
741
00:28:21,840 --> 00:28:26,240
that you regulate it more like an
742
00:28:23,600 --> 00:28:28,480
over-the-counter a recreational product
743
00:28:26,240 --> 00:28:32,000
than you do a medical product which to
744
00:28:28,480 --> 00:28:33,840
me means you probably have a ttb type
745
00:28:32,000 --> 00:28:35,840
oversight I'm not saying regulate it
746
00:28:33,840 --> 00:28:37,720
like alcohol per se there's not a whole
747
00:28:35,840 --> 00:28:40,440
lot of you know therapeutic or medical
748
00:28:37,720 --> 00:28:42,640
reasons to you know take alcohol but at
749
00:28:40,440 --> 00:28:44,799
the same time I think that's probably
750
00:28:42,640 --> 00:28:46,360
the most analogous to what I see of
751
00:28:44,799 --> 00:28:48,320
successful Regulators at the state
752
00:28:46,360 --> 00:28:50,279
levels I think if you if you over
753
00:28:48,320 --> 00:28:53,960
regulate it like a medical product you
754
00:28:50,279 --> 00:28:56,080
you you start getting uh paralysis by
755
00:28:53,960 --> 00:28:58,120
analysis from the regulatory bodies in
756
00:28:56,080 --> 00:29:00,320
terms of allowing consumers to make
757
00:28:58,120 --> 00:29:02,159
informed decisions about the products
758
00:29:00,320 --> 00:29:03,399
certainly pre-market approval for
759
00:29:02,159 --> 00:29:05,120
cannabis products is totally
760
00:29:03,399 --> 00:29:07,760
inappropriate for something that's been
761
00:29:05,120 --> 00:29:10,519
legal or not existing for Millennia so I
762
00:29:07,760 --> 00:29:13,559
I think you know if you have a more
763
00:29:10,519 --> 00:29:15,760
alcohol analogous um regulatory
764
00:29:13,559 --> 00:29:17,440
oversight at the federal level I think
765
00:29:15,760 --> 00:29:20,840
that makes the most sense whether that's
766
00:29:17,440 --> 00:29:23,360
truly the ttb or you know newly formed
767
00:29:20,840 --> 00:29:24,919
body I don't know the answer to that at
768
00:29:23,360 --> 00:29:27,120
the end of the day though I think I
769
00:29:24,919 --> 00:29:29,159
would hope that any federal regulator
770
00:29:27,120 --> 00:29:31,519
stepping into this obviously within the
771
00:29:29,159 --> 00:29:34,320
confines of what the law allows them to
772
00:29:31,519 --> 00:29:36,240
do I I do hope they they listen to the
773
00:29:34,320 --> 00:29:38,159
industry as they step into it and not
774
00:29:36,240 --> 00:29:40,200
immediately think that they know how to
775
00:29:38,159 --> 00:29:41,960
regulate this industry just like I've
776
00:29:40,200 --> 00:29:44,080
seen at certain State levels that's
777
00:29:41,960 --> 00:29:46,600
where it's most problematic because this
778
00:29:44,080 --> 00:29:49,720
is still a very Nation industry dealing
779
00:29:46,600 --> 00:29:52,640
with issues operationally with OSHA
780
00:29:49,720 --> 00:29:55,640
other sort of run-of-the-mill Industry
781
00:29:52,640 --> 00:29:57,720
Regulators you know you see that these
782
00:29:55,640 --> 00:29:59,200
Regulators are all stepping into this
783
00:29:57,720 --> 00:30:02,000
you know not knowing how cannabis
784
00:29:59,200 --> 00:30:04,000
cultivation works or processing Works um
785
00:30:02,000 --> 00:30:05,880
so while their oversight and regulation
786
00:30:04,000 --> 00:30:07,919
is important it's also important for
787
00:30:05,880 --> 00:30:09,760
them to take an opportunity to listen to
788
00:30:07,919 --> 00:30:12,120
us and and explain you know how things
789
00:30:09,760 --> 00:30:14,559
are done where we see safety hazards
790
00:30:12,120 --> 00:30:16,399
where we see patient and C consumer um
791
00:30:14,559 --> 00:30:17,840
you know testing concerns things like
792
00:30:16,399 --> 00:30:19,519
that because I think we all need to have
793
00:30:17,840 --> 00:30:21,720
a Level Playing Field so we need to have
794
00:30:19,519 --> 00:30:24,279
a regulator that is regulating everyone
795
00:30:21,720 --> 00:30:26,240
whether it's you know hemp or cannabis
796
00:30:24,279 --> 00:30:27,519
or however you want to coin the products
797
00:30:26,240 --> 00:30:31,960
and treating it on an equal playing
798
00:30:27,519 --> 00:30:33,240
field final question and this one you
799
00:30:31,960 --> 00:30:35,200
know back to the beginning of our
800
00:30:33,240 --> 00:30:36,960
conversation msos I think used to strike
801
00:30:35,200 --> 00:30:39,360
fear in the heart of small cannabis
802
00:30:36,960 --> 00:30:41,880
businesses craft businesses smalltime
803
00:30:39,360 --> 00:30:44,200
Farmers Etc do you think msos are the
804
00:30:41,880 --> 00:30:46,679
future of regulated cannabis in the
805
00:30:44,200 --> 00:30:49,080
United States or at least the most well
806
00:30:46,679 --> 00:30:51,080
positioned to survive all of these
807
00:30:49,080 --> 00:30:54,360
macroeconomic issues that we're now
808
00:30:51,080 --> 00:30:56,639
seeing the turn and whims of regulators
809
00:30:54,360 --> 00:31:00,000
on a state-by-state basis if the states
810
00:30:56,639 --> 00:31:02,000
continue what are your thoughts on that
811
00:31:00,000 --> 00:31:04,519
I don't know how I would characterize
812
00:31:02,000 --> 00:31:06,120
them as the future per se I would say
813
00:31:04,519 --> 00:31:08,480
that they were it was an it's a
814
00:31:06,120 --> 00:31:10,720
necessary construct still today if
815
00:31:08,480 --> 00:31:13,200
you're an investor in the industry and
816
00:31:10,720 --> 00:31:15,279
want a diversified portfolio because as
817
00:31:13,200 --> 00:31:17,120
it stands today and frankly even you
818
00:31:15,279 --> 00:31:19,360
know after rescheduling it's still going
819
00:31:17,120 --> 00:31:21,519
to be predominantly State regulated
820
00:31:19,360 --> 00:31:23,679
State market conditions are are very
821
00:31:21,519 --> 00:31:25,559
much so in a vacuum in it all themselves
822
00:31:23,679 --> 00:31:27,279
so I think it's important for investors
823
00:31:25,559 --> 00:31:28,960
to be able to diversify their
824
00:31:27,279 --> 00:31:31,320
Investments with management teams they
825
00:31:28,960 --> 00:31:33,000
trust that said there are you know as
826
00:31:31,320 --> 00:31:34,880
far as the industry on the whole I don't
827
00:31:33,000 --> 00:31:37,320
think msos will be the only ones to
828
00:31:34,880 --> 00:31:39,720
survive you know the next phase of this
829
00:31:37,320 --> 00:31:42,000
industry there are certainly many good
830
00:31:39,720 --> 00:31:45,279
small operators sometimes at the quote
831
00:31:42,000 --> 00:31:47,159
unquote mom and pop shops I think msos
832
00:31:45,279 --> 00:31:49,960
that have been formed to dat for the
833
00:31:47,159 --> 00:31:51,919
most part of course Jushi included have
834
00:31:49,960 --> 00:31:53,960
put together you know have had the
835
00:31:51,919 --> 00:31:56,600
ability to put together great management
836
00:31:53,960 --> 00:31:59,200
teams that um come from other Industries
837
00:31:56,600 --> 00:32:00,720
as well or come from you know decade or
838
00:31:59,200 --> 00:32:02,679
more in the Cannabis Industries in
839
00:32:00,720 --> 00:32:05,320
certain states to really marrying those
840
00:32:02,679 --> 00:32:07,399
different professional backgrounds into
841
00:32:05,320 --> 00:32:09,200
growing these businesses in a healthy
842
00:32:07,399 --> 00:32:11,120
sort of risk adverse way and I think
843
00:32:09,200 --> 00:32:13,000
Regulators like when companies
844
00:32:11,120 --> 00:32:14,519
themselves are risk adverse so that you
845
00:32:13,000 --> 00:32:16,799
know they're not the ones having to find
846
00:32:14,519 --> 00:32:18,519
these things out after the fact so I
847
00:32:16,799 --> 00:32:21,799
don't know that we're the future in the
848
00:32:18,519 --> 00:32:23,480
sense of only msos Will Survive but I do
849
00:32:21,799 --> 00:32:25,000
think that when you start looking at
850
00:32:23,480 --> 00:32:27,320
when more and more money starts coming
851
00:32:25,000 --> 00:32:29,080
into the industry ideally through
852
00:32:27,320 --> 00:32:31,720
cannabis us cannabis companies being
853
00:32:29,080 --> 00:32:33,320
able to uplist into US markets you will
854
00:32:31,720 --> 00:32:35,279
see investors that will want to look at
855
00:32:33,320 --> 00:32:36,559
that pedigree of the management teams
856
00:32:35,279 --> 00:32:38,440
and you know how long they've been
857
00:32:36,559 --> 00:32:39,720
operating and that's a level of
858
00:32:38,440 --> 00:32:41,320
transparency I think you don't
859
00:32:39,720 --> 00:32:43,639
necessarily get with the small-time
860
00:32:41,320 --> 00:32:46,000
private operators but again you know
861
00:32:43,639 --> 00:32:48,080
especially in juu history when they were
862
00:32:46,000 --> 00:32:50,519
more on the acquisitive side of things
863
00:32:48,080 --> 00:32:53,039
we've met tons of good operators you
864
00:32:50,519 --> 00:32:54,480
know including ones we didn't acquire to
865
00:32:53,039 --> 00:32:56,720
that are in the industry that I think
866
00:32:54,480 --> 00:32:58,679
will be just fine but you know last
867
00:32:56,720 --> 00:33:00,279
comment I would say is
868
00:32:58,679 --> 00:33:02,120
you had mentioned about you know
869
00:33:00,279 --> 00:33:04,320
surviving the you know sort of the
870
00:33:02,120 --> 00:33:06,360
economic climate and you're really
871
00:33:04,320 --> 00:33:08,279
seeing that over the last you year and a
872
00:33:06,360 --> 00:33:10,519
half two years um anyone who could look
873
00:33:08,279 --> 00:33:13,080
at you know stock charts you know from
874
00:33:10,519 --> 00:33:15,720
2021 when there was a feror that you
875
00:33:13,080 --> 00:33:18,279
know the new uh Federal Executive Branch
876
00:33:15,720 --> 00:33:19,639
was going to you know do this or that
877
00:33:18,279 --> 00:33:22,120
which was going to open up the markets
878
00:33:19,639 --> 00:33:24,120
for cannabis companies you saw a big
879
00:33:22,120 --> 00:33:25,679
jump in stock prices because there's a
880
00:33:24,120 --> 00:33:27,279
lot more certainty towards growth and
881
00:33:25,679 --> 00:33:28,360
then as that certainty is kind of
882
00:33:27,279 --> 00:33:30,039
dwindling
883
00:33:28,360 --> 00:33:32,799
subject to the more recent you know
884
00:33:30,039 --> 00:33:35,039
schedule 3 announcements you've seen a
885
00:33:32,799 --> 00:33:37,000
real drying up they say of the capital
886
00:33:35,039 --> 00:33:39,320
markets which I think has really
887
00:33:37,000 --> 00:33:41,120
affected the smalltime operators the
888
00:33:39,320 --> 00:33:43,000
most I would say that the midsize
889
00:33:41,120 --> 00:33:45,120
private companies I would think are
890
00:33:43,000 --> 00:33:46,559
suffering the hardest right now um
891
00:33:45,120 --> 00:33:48,559
because it's very difficult to raise
892
00:33:46,559 --> 00:33:50,320
capital for larger companies let alone
893
00:33:48,559 --> 00:33:53,039
smaller companies and this level of
894
00:33:50,320 --> 00:33:55,240
uncertainty so you know I think msos
895
00:33:53,039 --> 00:33:57,399
just like going back to ju's history of
896
00:33:55,240 --> 00:33:59,919
going public as quickly as it reasonably
897
00:33:57,399 --> 00:34:02,519
could that was key for us to have the
898
00:33:59,919 --> 00:34:05,000
financial backing when the stock prices
899
00:34:02,519 --> 00:34:07,120
are are bad so to speak that we're not
900
00:34:05,000 --> 00:34:09,359
diluting our shareholders more than we
901
00:34:07,120 --> 00:34:11,960
than we really reasonably would need to
902
00:34:09,359 --> 00:34:13,760
to in order to withstand these issues um
903
00:34:11,960 --> 00:34:16,320
and we think these all are all fleeing
904
00:34:13,760 --> 00:34:18,359
issues that we will see progress in the
905
00:34:16,320 --> 00:34:20,800
industry certainly not as fast as we
906
00:34:18,359 --> 00:34:23,760
would like to have seen but nonetheless
907
00:34:20,800 --> 00:34:26,200
I think msos May survive as the time
908
00:34:23,760 --> 00:34:29,000
goes on more than the small operators
909
00:34:26,200 --> 00:34:30,919
but I don't know that just like in I I
910
00:34:29,000 --> 00:34:33,000
don't know that there will be a great
911
00:34:30,919 --> 00:34:35,040
Purge or anything and only msos are left
912
00:34:33,000 --> 00:34:36,919
standing I think when you look at the
913
00:34:35,040 --> 00:34:38,720
alcohol industry you've got macro
914
00:34:36,919 --> 00:34:40,480
breweries you've got micro breweries
915
00:34:38,720 --> 00:34:42,599
you've got single site Brewers you got
916
00:34:40,480 --> 00:34:44,240
Regional Brewers and while I don't think
917
00:34:42,599 --> 00:34:46,079
cannabis and alcohol is wer of the same
918
00:34:44,240 --> 00:34:48,159
the distri distribution models have kind
919
00:34:46,079 --> 00:34:50,280
of been created in very analogous ways
920
00:34:48,159 --> 00:34:52,280
state to state so I think you're going
921
00:34:50,280 --> 00:34:55,359
to see sort of that you know craft
922
00:34:52,280 --> 00:34:57,359
cannabis versus bigname cannabis sort of
923
00:34:55,359 --> 00:34:59,520
dichotomy grow in the industry as time
924
00:34:57,359 --> 00:35:02,760
goes up on but even the biggest names in
925
00:34:59,520 --> 00:35:04,480
cannabis AR in most of the states are
926
00:35:02,760 --> 00:35:05,920
currently so at the end of the day
927
00:35:04,480 --> 00:35:07,359
there's still a huge opportunity for
928
00:35:05,920 --> 00:35:09,760
brand recognition that's not yet
929
00:35:07,359 --> 00:35:11,079
realized hey well I appreciate that
930
00:35:09,760 --> 00:35:12,920
answer and I want to thank you for
931
00:35:11,079 --> 00:35:15,400
coming on to the podcast taking the time
932
00:35:12,920 --> 00:35:17,280
to talk with me today and I wish Jushi the
933
00:35:15,400 --> 00:35:18,839
best of luck we will definitely be
934
00:35:17,280 --> 00:35:20,599
watching great thank you so much for
935
00:35:18,839 --> 00:35:23,200
having
936
00:35:20,599 --> 00:35:26,000
me and that concludes today's episode of
937
00:35:23,200 --> 00:35:30,800
the Cannabis law Now podcast until next
938
00:35:26,000 --> 00:35:30,800
time stayler stay alive guys