Latest Interview

Most Recent Interviews

  • Anthony Wile
    Savvy Cannabis Investors Pivoting to Markets Beyond North America
  • Pete Kadens
    Running Cannabis Operations in Multiple States with Pete Kadens
  • Sundie Seefried
    Helping Cannabis Businesses Get & Keep a Bank Account
  • Dr. Patricio Stocker, PhD
    PharmaCielo is Growing Cannabis At The Equator to Export to The World
Browse All

What is CBD

(Cannabidiol)? What is cbd cannabidiol See more
 

The Cannabis Search Engine and Insights Platform Called Weave

Christian Nitu

Interview with Christian Nitu, Co-founder of Weave. Weave is both a cannabis search engine, but also an analytics and insights platform for dispensaries.

Learn more at http://www.useweave.com

Key Takeaways:
[1:18] – Christian talks about his background and starting Weave
[3:15] – What is Weave?
[4:37] – Weave from a dispensary perspective
[6:12] – Christian talks about what Big Data and cannabis
[8:31] – Do you see the need for express lines in dispensaries
[9:35] – Christian talks about integration capabilities
[11:42] – Weave from an individual perspective
[13:11] – Who can access the dispensary analytics
[15:23] – Christian discusses possible delivery options for Colorado in the future
[16:49] – Health related queries
[17:43] – Becoming a Weave alpha user

Read Full Transcript

Matthew: Hi, I’m Matthew Kind. Every Monday and Wednesday look for a fresh new episode where I’ll take you behind the scenes and interview the insiders that are shaping the rapidly evolving cannabis industry. Learn more at www.cannainsider.com. That’s www.cannainsider.com. Are you looking for a fulfilling and lucrative career in the cannabis industry? Visit www.cannainsider.com/careers. That’s www.cannainsider.com/careers. Now here’s your program.

Weave is a search engine that helps customers find cannabis products easier. Weave allows customers to view real time menus and place orders online for in store pick-up. For dispensaries Weave is a resource planning tool to make sense of sales information and buyer behavior. Weave’s data analytics platforms transforms cannabis data into money making reports and easily digestible information. I’m pleased to welcome the co-founder of Weave Christian Nitu to CannaInsider today. Welcome Christian.

Christian: Hi Matt. Thank you for having me. I’m excited to be here and talk about Weave.

Matthew: Cool. I want to jump into Weave and everything you’re doing with it, but can you tell us a little bit about your background and how you came to start Weave?

Christian: Yeah sure. So was a student here at the University of Colorado back in 2011. So I started my first company here in Boulder, and that was around the hardware IOT space. So we developed a company called the Snow Gate that produced an electronic locker system that could be controlled by your phone. So I ran that for about three years and that’s where I got my experience with entrepreneurship and startups and technology. And it just kind of captivated me into getting more information about technology and how people used it as consumers for products and product development, and that’s where I started getting really interested.

But we ended up selling that company to the largest locker manufacturer in North America last year. And that kind of freed up my time and so I started to do some consulting for an ad agency in Boulder, and they were looking at the cannabis space as kind of a new business. And so I started to work with dispensary owners and managers. And just noticing different trends on the retail side, I started to figure out that there were a lot of pieces from a technology aspect that were missing in the industry that could really help clean up a lot of the inefficiencies from managing your inventory to helping consumers find the right products and then also, I mean, one of the biggest glaring problems that we saw was that there was this huge information gap. You have millions of customers going into stores asking for certain products to feed a certain need, but they don’t have any quantitative research or information to get that from.

So that’s kind of where we started to piece together Weave, and I started that company in September of last year with four other co-founders. So right now it’s just us five. We have our headquarters in Boulder and we’re just getting ready here to launch pretty soon.

Matthew: So Weave is pretty ambitious. Why don’t you tell us what it is and who should use it.

Christian: Yeah sure. So, you know, from your description you have it down to a “T”. The only thing I would add to it is that Weave is very focused on the localized approach. We see other search engine sites for this space, you know, gathering a lot of information on stores around the whole United States. Where Weave is focused is really providing kind of a localized experience. So getting as much information as we can from our POS API that we’ve developed from getting, you know, inventory results, starting to work with lab companies to get testing results, and really starting to track kind of buyer behavior and consumer behavior. Figuring out what people want so that we can help customers find the right products for a specific need and then help them reserve it through our service. And then we can help businesses make sense of all this data that they’re already gathering, and now being able to make business decisions on data driven information.

Matthew: Okay so looking at it from a dispensaries point of view first, Weave integrates through a API into the software at the dispensary at the point of sale, and collects that information and produces it into easy to understand reports and insights.

Christian: Yeah. So that is our first product that we are developing. It allows the dispensary managers and owners to see a very intuitive, simple way of the data that they’re already capturing. We allow them to kind of parse through that data in a very easy manner. The other products that we’re developing already is going to be allowing for a more full experience on the data side. So that will be separate from the POS integration, kind of our own platform of products coming to market.

Matthew: What kind of insights would a dispensary manager or dispensary owner be able to get out of using Weave that they might not typically be able to have if they were just, you know, looking at some spreadsheets or something like that?

Christian: Sure. So I think one of the biggest key values that Weave has is being able to gather all the information they’re already gathering, but being able to forecast that and make sense of the historical data so we can find out product trends around their particular store, product trends around particular geographic locations. We can help them with staffing, but more importantly the consumer side allows us with the technology that we’re building, we’re capturing search queries and we’re making sense of certain words that people are asking about cannabis. So if people are typing in beverage, we can figure out what products they’re actually looking for or what stores they’re looking at to find these products. So we can connect the consumer behavior with the data that they’re already capturing on the storefront and connect those two together.

Matthew: Now we hear that term “Big Data” thrown around a lot. What does that mean to you?

Christian: Big Data means that there’s a lot of unorganized data pipes out here in the cannabis industry. Right now, I mean, it’s still an industry that’s growing so a lot of people haven’t been able to kind of settle down and look through all the data. So you have stores collecting information on sales records. You have product, new companies trying to understand their inventory flow, and then you have people that are trying to figure out how to capture customers’ information, figure out how they’re buying things in stores and looking for certain products. So with Big Data with cannabis it’s being able to connect all of these different data points together and produce something that businesses can make decisions on.

Matthew: Now is there an aha moment when you’re talking to a dispensary owner where they kind of have, it clicks and they get what this can do for them? Is there one bullet point where they kind of say oh, okay this makes sense. I see the benefit for me.

Christian: Yeah sure. So I mean on our reservation product which is going to be in beta later this week in Boulder, we’re going to be giving that out for free. So we’re not going to be charging any dispensaries to upload their digital storefront. So I think the aha moment is when we’re telling them this piece. They are able to kind of see that as a great online marketing tool, being able to go and find people online in a way that adheres to the law and being able to get their customers online driven into their stores, and it’s at no cost to them. So I think that’s kind of the benefit from our first product.

Matthew: Right, there’s a huge value add there because the average dispensary customer spends $1,000 to $2,000 a year, and if they get frustrated having to wait on a Friday afternoon at 4 o’clock to get their order, that could be… the lifetime value of that customer is enormous that they’re losing. But this can only go well, this order ahead if the dispensary says, you know, we’re going to treat people that order ahead a little differently. We’re going to have a express desk kind of like Harbor Side Health Center has in Oakland where if you know what you want and you order ahead, you can just come in and pick it up. Do you see the dispensaries welcoming the idea of an express desk or something so people don’t have to wait in line, like people that want to talk to a bud tender?

Christian: Sure. I see huge value and we’ve already talked to stores about that. You know there are a lot of customers that are going into stores already knowing what they want. So they want to be able to cater to those customers’ needs as well. So I think initially, you know, they want to test it and make sure that it’s being used and it’s not disrupting any of the workflow that they’ve already established with their employees. But I think over time what they’ll see is that it actually reduces the inefficiencies. So with staffing being able to know when to have employees there with certain products trending faster throughout the day or whatever it is, but being able to reserve a spot, kind of an extra station for a self-checkout experience. It think they’re already… we were to have seen stores here in Colorado already doing that. So I think it goes in line with where the retail side of this stuff is going in the future.

Matthew: And is it pretty easy to integrate with Weave then? Let’s say if I have M.J. Freeway or Bio Track or Adolis or the big software packages out there, how do I integrate with Weave?

Christian: So right now we do have one integration partner already settled. We’re already working on a couple others as well. From the standpoint of the technology companies talking to the software providers, it’s very easy. We handle, we prefer kind of a rest API, that’s how we integrate with our technologies, but we work with the software company to build a bridge between Weave. And on the storefront level it takes a manager about two minutes to set up. They just have to go into their dashboard with whatever software provider they have, whether it’s Bio Track, M.J. Freeway or Adolis and then simply turn on our API key, and then we go ahead and we go ahead and we sync that. I think right now with what we have in our beta database, we have about 5,000 products and it takes us about 2, less than 2 milliseconds to kind of sync all of those together and figure out what’s where, you know, what quantity is where.

Matthew: Sometimes I feel like the cannabis software industry is a little bit closed. Like they don’t see the value of having an ecosystem, partners, but really if they let someone like Weave in that only strengthens their offering to the end user and makes them more sticky and less likely to leave because hey we’ve got our weave integrated with our POS software and our seed to sale software. We’re happier. We’re not, you know, there’s no threat.

Christian: Right exactly, and that’s kind of what we’re trying to make aware is that we’re helping bridge consumers to the stores in an online fashion. So for the POS systems we see them as a great source of technology in the backend for operations side on the storefront level, Weave helps bridge the gap with the customer end. So we kind of go in sync and provide partnerships that are beneficial for both parties.

Matthew: Now looking at Weave from a individual’s point of view, they’re just going to Weave and it looks like a Google search bar. There’s like a flashing cursor, like what do you want to know. So maybe you would type in, you know, autoimmune inflammation strain or something and you might see search results that would say here’s some information around that that you might find useful. Is that how it works?

Christian: Yes, so that’s the goal of it. The first alpha version that we’re releasing right now is going to be allowing people to just search by product name or store. But we’ve already started developing and we’ve been working on this for a while, kind of the core technology of the Weave search engine which we think makes us distinguishable is really on the natural language processing and machine learning techniques that we’re using. So you know we’re gathering data on what is exactly available at stores, knowing the quantity, knowing all of that information.

We’re starting to track user queries, kind of the words that people are asking bud tenders as if they’re in the store. And then we’re working with cannabis doctors as well as test lab companies and hopefully at some point research companies, people who that are doing, you know, the clinical research studies on things like PTSD, child epilepsy and different diseases. And taking all that information and we compile our own algorithm to help find the right product for that search query . So that’s kind of the evolution of where the search engine is going to go, but for right now we’re focused on just providing a simple service of being able to see exactly what’s in the store before you get to it and then as we collect more data the engine will get more powerful as time goes on.

Matthew: So with all the data that will be collected at the dispensary, will you be able to generate reports or something for the industry with insights about what’s happening for people that don’t own a dispensary but are interested?

Christian: Sure so I think… our main concern at Weave is definitely privacy. We take a very hard approach about what we’re doing with people’s information. You know from a consumer perspective we don’t capture anything that’s incriminating. We don’t require you to give us an email address or require you to give us any personal information other than a phone number when you’re ordering, but we redact and erase that information within 24 hours to 36 hours. So we don’t keep anything on the personal side.

What we’re being able to aggregate though are the questions and the reasons why people are reserving certain products. So from an industry perspective, I think that’s very valuable to know insights into consumer behavior. On the store side, you know, what we’re doing is we’re pulling together a lot of product inventory levels and understanding the flow of business through a dispensary, but again we don’t want to be, you know, exposing all that kind of information out to the public. So we’re going to be aggregating all of this stuff and displaying it in a way that people will be able to see kind of generalized approaches of edibles are trending here, you know, certain products are doing well over here, and these are the questions people are asking in these areas.

Matthew: Okay so there’s a predictive component to it where a dispensary owner would maybe say okay it looks like Girl Scout Cookie strain is going to be popular for the next ten days, make sure we get more of that over here, start curing more, you know, they make decisions around that so that they have more available in the next couple of weeks. Is that how you see the dispensaries using it more?

Christian: Yeah and I think it’s going to go in line with how this industry is working. I mean right now people are still figuring out the supply and demand issue and getting their operations to a point where they don’t run out of inventory. So that’s what we want to do. We want to be that layer of service that helps them plan and forecast, kind of like resource planning tools.

Matthew: So there’s an order ahead component which is, in Colorado, unlike California where you can have cannabis delivered that meets certain conditions. In Colorado that can’t happen, do you see any kind of delivery option in the future or is that just too far out?

Christian: So for our immediate roadmap, it’s not on there. We would welcome actually the opportunity to talk to other companies that are providing this service. But I think the mission really for Weave is to get information out there into the public sphere about cannabis products. You know, the landscape of consumers are changing. You don’t have your typical stigma of what a consumer is anymore going into stores. You have moms, doctors, lawyers, people from the past that have used it before and now are coming back. And some of their questions, some of the stuff that we’ve been capturing already, it’s interesting; 75 percent of the search queries are related to health and wellness.

So being able to help people find products for health and wellness reasons I think that’s a very good mission that Weave is trying to achieve. So being able to get that in a quantitative fashion, I think that would be… any service that helps us get there, I think that would be a benefit.

Matthew: Yeah, and there’s a lot of… there’s a certain demographic of people that are interested in cannabis but still kind of have this nagging bias in their head that it’s something that’s wrong, that they’re trying to get over and this is a good first step to educate themselves before going into a dispensary as well. So what kind of health related inquiries or queries do you see that maybe surprised you a little bit?

Christian: Sure. I mean we have, you know, some of the most common ones are obviously things like back pain, insomnia is a very big one. There are things that go along with finding high CBD strains. I think a couple of interesting ones are finding things that affect, you know, finding out cognitive effects. Finding out what can help with eye strains. And another interesting thing is we’ve had a lot of queries around athletes and sports. What is good for running? What is good for lifting? Things like that that you wouldn’t kind of equate to being a cannabis user. So you see there are multiple applications for the plant, and if we can help people find the right products for that reason, I think that’s a very good thing to offer the industry.

Matthew: Now you mentioned that Weave is in alpha, if listeners are interested in becoming an alpha user, how can they do that?

Christian: Yeah sure. So they can go ahead and go to our website which is www.useweave.com. We sometimes have a problem with people just going to weave.com and seeing a bunch of hair products. So we just want to make sure that people know to go to the www.useweave.com domain. Go ahead and enter an email address and we’ll add you on our list to check out our staging site, but we’re going to be releasing that here in Boulder this week with about four stores, and then the hope is that at the end of April we’ll have been in Boulder, Denver and a couple other locations that we’ve been talking to.

Matthew: Great. Great, and how about investors? Are you still open to new investors?

Christian: Yeah, I mean, I think it’s every entrepreneur’s job to always be open to getting more money. So yeah, so we’re definitely very much in our seed round still. We raised a small investment early, late last year and now we’re looking to bring in some more money so we can add some engineers. I think the cool thing about Weave is that we’re very engineering heavy and we’re very tech focused. We have about three engineers on our team, and we’re looking to add more and Boulder’s a great hot bed for attracting great talent. So we’re looking to raise some more money this month to get us out and going. But if they’re interested in contacting, you know, please reach out to me at Christian@useweave.com and I would be happy to field any questions.

Matthew: Great. Well Christian thanks so much for being on CannaInsider today.

Christian: Yeah, thank you very much Matt. I appreciate our talk and thank you for having me.

Matthew: If you enjoyed the show today, please consider leaving us a review on iTunes, Stitcher or whatever app you might be using to listen to the show. Every five star review helps us to bring the best guests to you. Learn more at www.cannainsider.com/itunes. What are the five major trends that will impact the cannabis industry in the next five years? Find out with your free report at www.cannainsider.com/trends. Have a suggestion for an awesome guest on www.cannainsider.com, simply send us an email at feedback at cannainsider.com. We would love to hear from you.

Join CannaInsider For FREE & Receive
The Five Disruptive Trends Shaping The Cannabis Industry Now

Interview with Johann Hari, Author of Chasing the Scream

Johann Hari

Johann Hari is the author of Chasing the Scream, The First and Last Days of the War on Drugs. Johann walks us through all the alarming and rarely mentioned ways the war on drugs hurts societies and how ending prohibition brings order. Johann details how countries around the world are ending prohibition and the amazing results they are seeing as a result.

*Get the FREE CannaInsider Podcast for your smartphone, CLICK HERE.*

Key Takeaways:

[1:31] – Why rats only choose drugs when they are alone and unhappy
[10:37] – What happens to the drug market in MD when a dealer gets arrested?
[14:40] – Johann discusses Arnold Rothstein and Rosalio Reta
[22:31] – Do humans have an innate desire to experience altered reality
[37:34] – The results of drug decriminalization in Switzerland and Portugal
45:13 – How to find Johann’s Book, Chasing The Scream.

Read Full Transcript

Matthew: Hi, I’m Matthew Kind. Every Monday and Wednesday look for a fresh episode where I’ll take you behind the scenes and interview the leaders of the rapidly evolving cannabis industry. Learn more at www.cannainsider.com. That’s www.cannainsider.com. Do you know that feeling when you sense opportunity, when you see something before most people and you just know it will be successful, then you're ready. Ready for CannaInsider Consulting. Learn more at www.canninsider.com/consulting. Now here's your program.

Today’s guest is Johann Hari. He has written a captivating book called Chasing the Scream: The First and Last Days of the War on Drugs. If you’re like me and you feel like you had a good understanding on the genesis of the war on drugs, you’re about to be enlightened. Welcome to CannaInsider Johann.

Johann: Hi Matt, lovely to be with you. Thanks for having me.

Matthew: To give listeners a sense of geography, can you tell us where you are in the world today?

Johann: I am in fact in London at the moment.

Matthew: Great.

Johann: London in England I should say as you can probably tell from my voice.

Matthew: Right.

Johann: Now I want to jump into Chasing the Scream, but before we do let’s talk about an article you wrote for the Huffington Post this year called the Likely Cause of Addiction has been Discovered and is not What You Think. This article has been shared over a million times I believe, and what did you uncover here and it obviously resonated with a lot of people? What about that article has people talking so much?

Johann: Well it’s a short extract from the book, and I guess… so I discuss it in much more detail in the book, but I guess it’s now a hundred years since drugs were first banned. And four years ago when I started writing about… started writing the book, I think I realized I knew that we were coming up to this centenary, and in a way I thought I knew a lot about this subject. I’ve written about it for a long time. It had been in my life for a long time. One of my earliest memories was trying to wake up one of my relatives and not being able to and as I got older realizing we had drug addiction in my family. But actually I realize that there were just loads of basic questions about this issue that I didn’t know the answer to like why were drugs banned a hundred years ago? Why do we continue with this war on drug users and drug addicts even though so many of us can see it can’t work? What do the alternatives really look like and what really causes drug use and drug addiction?

When I was looking for these answers just for myself, I realized I couldn’t find them in the books I was reading that too often we discuss this in a really abstract way, you know, as if life is a philosophy seminar, and we could talk about it in this very abstract way. And I didn’t want to do that. I wanted to find out… I wanted to find out how these, the answers to these questions have really changed real people’s lives. So I ended up going on this big journey across nine different countries and spending time with lots of different people from a transsexual crack dealer in Brownsville, Brooklyn to you know, to the hit man for the deadliest Mexican drug cartel, to the only country that’s decriminalized all drugs from cannabis to crack. And I guess what I discovered is almost everything we think we know about this subject is wrong. Drugs aren’t what we think they are. Addiction is not what we think it is. The drug war is not what we think it is, and the alternatives to the drug war aren’t what we think they.

And I guess the one that most surprised me was the one that you asked about first which is about addiction. You know if you’d said to me four years ago, I don’t know, what causes heroin addiction? I would have looked at you like you were a little bit simple minded and I would have said, well heroin causes heroin addiction. You know we’ve been told, you know, it seems kind of obvious right. We’ve been told this story for a hundred years. It’s become part of our common sense. We think that if you, me and the next 20 people who walk past your door all used heroin together, on day 21 we would all be heroin addicts because there are chemical hooks in the heroin that at the end of it our body would start to physically need.

The first thing that alerts me to the fact there’s something not right about that story was when it was explained to me if after this interview you or I step out onto the street, and you know, I’m hit by a car and I break my hip, I’ll be taken to hospital. It’s quite likely I’d be giving a lot of diamorphine. Diamorphine is heroin. It’s medically pure heroin. It’s much stronger than you would ever buy on the street because it’s not got all the contaminants that drug dealers inevitably put into it. And then you or me, if that happens, will be given that diamorphine, that heroin for quite a long period of time. Anyone listening to this, anywhere in the developed world, lots of people near you are totally, legally being given heroin in hospitals.

If what we believe about addiction is right, if the story we’ve been told for a hundred years is right, what should happen? Those people, at least some of them, should leave hospital as heroin addicts. They should try to score on the streets. There have been studies of this, that doesn’t happen. You will have noticed your grandmother was not turned into a junkie by her hip replacement operation. When I learned that it just seemed so odd to me that even though the facts behind is so robust, I didn’t really know what to do with it until I went and interviewed a guy called Bruce Alexander who is a professor in Vancouver. And incredibly important figure in the world of addiction, and I think has really revolutionized how we think about it.

Bruce explained to me, the theory of addiction that you and I have in our heads and almost everyone has in their heads comes from a series of experiments that were done earlier in the 20th Century. They’re really simple experiments. Your listeners can do them at home if they’re feeling a bit sadistic. You get a rat and you put it in a cage, and you give it two water bottles. One is just water and one is water laced with either heroin or cocaine. If you do that, the rat will almost always prefer the drugged water and almost always kill itself. So there you go, that’s the theory of addiction. You might remember there was a famous partnership for drug free America.

Matthew: Sure, sure.

Johann: Advert, yeah this thing like, you know, it will happen to you. In the 70s Bruce came along and said hang on a minute. We’re putting the rat in an empty cage where it’s got nothing to do except use these drugs. Let’s try this differently. So Bruce built “Rat Park” which is a different kind of cage. And Rat Park is basically heaven for rats. Anything a rat could want in life is in Rat Park. It’s got cheese. It’s got colored balls. It’s got tunnels, but crucially it’s got loads of friends. It can have loads of sex, anything a rat wants. And they’ve got both the water bottles, the drugged water and the normal water, but here’s the fascinating thing. In Rat Park the rats don’t like the drugged water. They hardly ever use it, and none of them ever use it in a way that looks compulsive. None of them ever overdose. There’s really import human examples I can tell you about in a second if you want, but what Bruce says is that this shows that both the right wing and left wing theories of addiction are wrong.

The right wing theory is that it’s a moral failing, you know, you indulge yourself, you know, you indulge yourself, you are a hedonist, all of that. The left wing theory is your brain gets hijacked. You get taken over. You’re left powerless. What Bruce says is it’s not your morality and it’s not your brain. To a much larger degree than we’ve appreciated before, addiction is an adaptation to your environment.

Matthew: Wow that’s crazy.

Johann: There’s huge implications for that. I mean there’s a guy called Peter Cohan, he’s a professor in the Netherlands, who says, you know, we shouldn’t even use the term addiction. We should think of it as bonding. Human beings have an innate need to bond, and when we’re happy and healthy we’ll bond with each other and with the people around us. But when you can’t do that because you’re isolated or traumatized or beaten down by life, you will bond with something that gives you a sense of pleasure relief. Now that could be, you know, it could be gambling. It could be cocaine, it could be pornography, but you will bond with something that gives you some sense of pleasure because that’s what we have to do.

And this different theory of addiction has massive implications for the drug war. You know, the drug war is based on the idea that the drug is what causes the problem, and so we need to physically eradicate the drug from the world. If in fact the vast majority of people who use that drug don’t develop addiction, if in fact it’s isolation and trauma that are the largest drugs of addiction, suddenly the fact that our whole approach looks different, because what we do at the moment is we take people who are addicts if they’re isolated and traumatize, and we isolate and traumatize them further thinking it will make them stop.

You know, I went out with a group of women in Arizona who were forced to go out on a chain gang wearing t-shirts saying I was a drug addict and dig graves. You know, we do that to them and actually okay that’s an extreme thing, but actually that’s pretty much what we do to addicts all over the world. We humiliate them, stigmatize them and cut them off. You know, and those women will never get a job again because they’ve got criminal records. They don’t jobs in the legal economy. We certainly do that to addicts all over the United States and in Britain. And you know in that prison at one point I asked to go to been shown solitary confinement block which they use a lot, The Hole it’s called. And I went to The Hole, and there were women in these tiny little stone cells and were put there for the month for like the most minor infractions. And I suddenly thought this is the closest you could ever get to a literal human reenactment of the experiment that guaranteed addiction with rats. And this is what we do thinking it will make people stop, but also has implications I think, much wider implications, than just drug policy.

We’ve created a society where for a lot of our fellow citizens life is… life looks a lot more like that first cage and a lot less like Rat Park. You know we talk a lot in addiction about individual recovery and that’s really important, but we need to talk much more about social recovery. Something’s gone wrong with us, not just as individuals, but as a group and I think we need to think differently about that too.

Matthew: Wow that’s fascinating and somewhat unintuitive, but once explained it makes sense. You’ve come up with a lot of unintuitive ways to think about the war on drugs and how we can think about better. Can you talk a little bit about your findings in your book about what happened in Maryland when drug dealer’s arrested?

Johann: Yeah, you know, the book is told through the stories of people I met or got to know or researched and learned about, and they’re really a broad range of people. One of them is a cop I got to know in Baltimore called Lea Maddox. He’s really an amazing person. Lea signed up to be a cop with one reason in mind. Her best friend, Lisa, who she’d know since she was a kid was murder by what she believed was a drug gang, and the day Lisa’s body was found Lea went and demanded the sign up papers and she went into the cops with one goal and one goal only which was to destroy and break drug gangs.

And for years she obsessively enforces the drug laws. She will bust people just for using a joint. But Lea’s really an honest person and Lea started to notice two things that kind of troubled her. One was the people they arrested were mainly African Americans, even though African Americans we know, and there’s lots of evidence and they’re more likely to be drug users or drug dealers than anyone else in America, and Lea really isn’t a racist so she was troubled by that. The second thing was even more troubling for her which was if you’re a cop and you arrest a, I don’t know, a rapist, the less week there’s less rape in your town. If you bust a drug dealer, Lea noticed two things, firstly there’s no less drug dealing, right? There’s someone on the corner the next day. The drug price doesn’t go up. So we know that, you’re not disrupting the supply.

But what struck her stranger was the murder rate actually goes up, and this is a pretty consistent finding. It was Lea’s anecdotal observation, but it’s proven if you do a drug bust, the murder rate increases and that’s basically because when you ban drugs they don’t’ disappear. They’re transferred from doctors and pharmacists to armed criminal gangs. And those armed criminal gangs work different from the doctors and pharmacists. If you or me walk into a doctors or a pharmacist to try to steal their prescription drugs, they’ll call the police. The police will take us a way. So that pharmacy doesn’t need to be violent or intimidating right because they’re operating with law and they have recourse to the law. If we go out to a local coke or weed dealer and try to rob them, obviously they can’t ring the cops. The cops would arrest them, so they have to be violent and intimidating. And they have to establish their patch by violence and they have to maintain it by violence.

And if you knock one of them out either, you know, they’re killed or you arrest them, what you do is you trigger a turf war for control of their patch, and there’s a huge amount of violence until someone emerges on top. The Nobel Prize Winning economist, Milton Freedman, calculated there are 10,000 additional murders every year in the United States that are the result of this war for drugs of dealers fighting out and people getting caught in the middle. And Lea, you know, Lea had gotten into this to bankrupt the drug gangs, and suddenly she realizes oh god, actually I’m the one keeping them in business. You know prohibition and the drug war are what keep them going. The alternative is to reclaim that trade for pharmacists and doctors is the way countries that I went to have tried with remarkable results.

So Lea quit the police and she retrained and now she’s a lawyer who spends a lot of her time trying to get the convictions of people like the people she arrested quashed to end the drug war. She’s a really extraordinary person.

Matthew: So this is crazy and unbelievable. You make the point that the DNA of gangs that deal in illegal drugs is to create unspeakable violence because that’s kind of how they stake out their patch. Can you tell us a little bit about Rosalio Reta in Mexico in the Zeta gang and maybe a little bit about Arnold Rothstein and how they kind of play that part?

Johann: Yeah. I basically, you know, Rosalio is someone who really… I think about him a lot. I wanted to understand this dynamic. Obviously if you think about housing project in the US right and there is going to be one here, if one is listening to this, where say 5 to 10 percent of the economy is controlled by armed criminal gangs in the drug trade. So that place is going to be a really miserable place to live. If you look at northern Mexico where I went, it’s 70 percent of the economy, 7-0 percent. So basically you just end up with a situation where the armed criminal gangs can pay better wages than the states so they end up owning the cops, and they own the state and they hijack the whole infrastructure.

One of the ways I tell that story in my book is I got to know and interviewed a guy called Rosalio Reta who between the ages of 13 and 17 was a hitman for the deadliest Mexican drug cartel and killed about, butchered and beheaded about 70 people. And I went and interviewed him. He’s now in prison in Tyler County in Texas in constant solitary confinement because he’s the only person who’s ever been in that kind of cartel who can kind of tell what it’s like from the inside and hasn’t been killed. So every time he’s ever taken out of solitary, he’s immediately stabbed by one of the other prisoners who knows they’ll get loads of money from the Zetas for killing him.

Rosolio grew up in Laredo which is just on the American side of the border, but it’s kind of twinned with Nuevo Laredo on the Mexican side. And he would kind of go back and forth, you know, when he was a little boy. He’s about 26-27 now, but when he was a little boy he would go back and forth across the border like most people do just to buy candies and things. And he was recruited when he was 13 to be a hitman. They like having, they like using kids. They call them the expendables partly because kids that age don’t really understand death in the same way I think. And yeah they kind of kept him very heavily coked up and this guy Miguel Trevino who was the, at that time, number three in the Zetas, later rose to be number one in the Zetas. And exactly that dynamic you’re asking about which is right into your question, so Rosolio did unbelievably horrific acts of violence.

It’s important to understand this has nothing inherently to do with drugs. This is to do with prohibition right. Ask yourself where are the violent alcohol dealers today? They don’t exist right. They did exist under alcohol prohibition. It’s not that they were drunk. Al Capone wasn’t an alcoholic and he wasn’t using alcohol in heavy amounts and therefore committing violence. Today the drinks isle at Wal-Mart doesn’t go and shoot the people who work in the local liquor store in the face, right. Even though nothing’s changed about alcohol, it’s the same drug that people were killing each other over during prohibition in Chicago. What’s changed is the legal regulatory framework.

Often we talk about, you know, drug related violence, and people think what that means is someone using drugs, losing it and killing people right. In the book I cite, there’s a really important study of this by Professor Paul Goldstein who looked at everything that was described as a drug related murder in New York City in 1986. The exact figures are in the book, I’m saying this from memory, but I think they’re right. Two percent of the killings were like where someone had used drugs and lost it, right, or killed someone and there was drugs in their system. I think 7 percent were an addict who was kind of committing a property crime in order to feed the habit and something went wrong. And all the rest, the overwhelming majority were armed criminal gangs killing each other to gain control of the trade, right. So actually the overwhelming majority, they’re not drug related. If we banned milk and people still wanted to buy milk and therefore criminal gangs provided it, the milk trade would work this way. Would we call those milk related murders. Well you could, I mean, it would make as much sense.

But what you get with that dynamic and I tell this story about the inside of the… it’s Rosolio’s life inside the cartels, is often when you look at what’s happened to northern Mexico, and it’s really pretty scary when I went there, but often when you look at what’s happened in northern Mexico, it looks like, kind of like Jeffery Dahmer style psychosis, right, it’s so extreme the violence that you just think oh, this is just a bunch of psychos. It’s not. It’s the function of the system. The way it works is if you’re the guy who’s prepared to breach the moral taboo a little bit more than the other guys, you will gain a brief competitive advantage. So if you’re the first person to say, we’re not going to kill the other side, we’re going to kill the other side’s pregnant women, then you get a brief competitive advantage. If you’re the person that says, actually we’re just going to kill their pregnant women. We’ll kill them and put them on YouTube, put it on YouTube, then you get a brief competitive advantage.

If you’re the first person to say, you know we won’t just kill them and put it on YouTube, we’ll cut off their faces, sew their faces onto a football and mail the football to their relatives, which is something that actually happens, then you get a brief competitive advantage because the nature of a prohibition based system is whoever is prepared to push the violence further will control a little bit more of the trade. So this insanity, and clearly it requires a degree of sadism for people to do this obviously, but that whole cruelty and violence is the product of the system we’re in. Where else, what other system would have given 13 year old Rosolio Reta an enormous financial incentive, like an enormous financial incentive, to go and butcher and behead people? Where else would have taken, what other system would have taken a 13 year old boy and taken him to a training camp where he was taught the mechanics of how you dissolve a corpse right? Where would that have happened.

I think that’s where about I tell the story of a transsexual crack dealer in Brownsville, Brooklyn called Chino Hardin who was conceived when his mother who was a crack addict was raped by his father who was an NYPD officer. So he’s a child of the drug war in the purest sense. And Chino, you know, is one of the most empathetic and decent people I know, but from the age of 13 when he starts selling crack on his corner, he’s drawn into the requirements of violence. You know you cannot be empathetic in that situation. You have to be terrifying or you’re going to be destroyed. And these dynamics are playing out, not just in, clearly what’s happening in northern Mexico is much more extreme because it’s a larger portion of the economy, but these dynamics are playing out pretty much everywhere in the developed world except the places I went to where there have been experiments with legalization and you just see this whole dynamic bleed away.

Matthew: Gosh that’s so crazy to think that, you know, the prohibition causes the violence because you’re right we’re so engrained to think it’s the drug. It’s the drug that’s causing the people to change, but it’s really prohibition. The direct result of that is this compounding and escalating violence because you’re saying if you have that escalating sense of violence, you have a competitive advantage in the trade of this prohibited substance, whatever it may be; milk, heroin, alcohol. Now is there an innate sense for humans that they just want to experience altered reality? This is something we can’t legislate a way or you know, point a gun at group or a population and say don’t get high, don’t get drunk. It’s just something that’s part of humans that we need. Would you say that’s accurate?

Johann: One of the most interesting people I interviewed was this guy called Ronald K. Siegel who is a very distinguished retired professor at UCLA who advised like three American Presidents, the World Health Organization, and one of the things Ronald K. Siegel spent his career doing was giving drugs to animals and monitoring animal drug use. And basically it turns out this applies not only to humans, but pretty much to most living species. You know elephants get drunk. Birds get drunk. You know, mongoose’s like hallucinogens. You know the massive range of animals that get, you know, mashed up in all sorts of different ways. And he argues, I think he’s right, the intoxication impulse is a really deep and innate human drive, and it’s ineradicable.

You know you look at a little kid who will spin around and around and around to make themselves dizzy even though they know it will make them sick, that’s the first manifestation, and all children do that. It’s been observed that all kids do that. That’s the first manifestation of the intoxication impulse. Obviously it manifests differently in different people, but there has never been a human society where humans did not seek out intoxicants in the environment and use them. The only society where there were no naturally occurring intoxicants were the poor Inuit in the Arctic, and they would starve themselves to get altered mental states because this is just so deep in human nature. I tell the story in the book of the Temple of Eleusis. In ancient Greece, 20 miles away from Athens, every year there was this extraordinary rivalry at the Temple of Eleusis where people would go for this massive drug party where they would this hallucinogen and they would experience states of ecstasy. And you know, it sounds pretty much like Burning Man, and it was forcibly shut down when the Emperor Constantine converts to Christianity.

Yeah this is a really deep and innate human impulse. And one of these that’s kind of surprising to me in the research actually is the, you know, quite how large the proportion of this was. If I said to most people, I mean your listenership is going to be more informed on this matter, but you know most people you say to them, what proportion of currently banned drug use do you think does no harm to anyone, doesn’t damage their health, doesn’t make them addicted, anything right? The actual figure is 90 percent, 9-0 percent and that doesn’t come from like the Drug Policy Alliance or a group supporting drug reform. That comes from the UN Office of Drug Control who are the main drug war body in the world, even they had to admit that a few years back, although I’ve noticed they’ve taken it down from their website. Rather embarrassed that people picked up on it.

So it’s important to understand this is a deep human impulse, and in the vast majority of people, the vast majority of the time, it’s a healthy impulse, you know, they have a good time. They find a chemical, they have a good time with it and they don’t get addicted. It doesn’t damage their body. It doesn’t damage their mind. Great, now the other 10 percent who are addicted which includes some people very close to me, including some of my closest relatives, they are in fact people who were seeking out the drugs to deal with a deep sense of pain that preceded the drug use. You can look at this. I cite a really interesting study that looked at, it was a really interesting and weird study, it look at five year olds, and it just monitored five year olds with their parents. I think it was only the mothers.

Basically you get a five year old, you put it with its mother and you give them like a task to do together, right, and you know building blocks or whatever. And they monitor them literally, I think it’s for five minutes. It was a very short period of time. And they monitor basically how supportive the mother is, how good their relationship is, how connected they are. And then it just follows, it goes back them when they’re 18 and figures out if they’re addicts. And what it finds is just by looking at five year old and how connected they are with their parent for five minutes when they’re five, I forget the figures. They’re in the book, but you can predict to an incredible degree of accuracy whether they will be addicts, you know, years 13 years later when they grow up.

So what that tells us is, and it really relates to Rat Park and what we were talking about there, addiction is a very real tragedy. Addiction is not the earthquake. Addiction is one of the aftershocks of underlying pain and trauma. Now aftershocks are bad. An aftershock can bring a building down after an earthquake. It’s not a trivial thing. It’s a very very serious things. But it’s important to understand what the real cause of it is and what explains, you know, I guess I would say, you know, if you want to think about this in their own lives. I forget the drug laws for a second right, I’ve got in front of me, I’m feeling a little bit ill so I’ve got one of those dissolvable vitamin C things that you put in water and you drink it.

You’ve probably got a drink in front of you, right?

Matthew: Yes.

Johann: Totally forget the drug laws, totally legally you and I could be drinking vodka now, right. We could both be drunk. You and I probably got enough money in the bank that we could go off and be drunk, buy loads of vodka and be drunk for three months, right, and never sober up, you know, until our money runs out, right. We’re not doing that and very few people do that. Not because anyone externally is stopping us, but because we’ve got things we want to be present for in our lives. We’ve got jobs we love. We’ve got people we love. We’ve got things we want to do. You know the reason why most addicts do what they do is because they can’t bear to be present in their lives because their lives are too painful. And the answer is to make their lives less painful, and there’s a place where they did that, you know, Portugal and the results were incredible and I can talk about that if you don’t mind.

Matthew: Sure, sure, please.

Johann: Yeah, yeah it’s fascinating that you know, totally honest, I put off going to the places where they’ve tried the alternatives, the drug war for one, and I was thinking to myself why was I doing that. And I guess I kind of thought what if I go to the places where they’ve tried the alternatives and that doesn’t’ work either, then this will be a book about and irredeemable human tragedy or just a, you know, a very deeply engrained human tragedy. But then I went to the places; Switzerland, Portugal, Uruguay, you know, I interviewed people from Colorado and Washington who led the successful campaigns. And it was really kind of extraordinary.

Portugal to me was one of the most striking examples, oh and Vancouver as well. Portugal was one of the most striking examples. And in the year 2000 Portugal had one of the worse drug problems in Europe, indeed in the world. One percent of the population was addicted to heroin, just kind of mind blowing. And every year they tried the American way more. They arrested more people. They imprisoned more people, and every year the problem got worse. And one day the Prime Minister and the leader of the opposition got together and they basically said look, obviously we can’t carry on like this right. We can’t, you know, we can’t have an ever increasing proportion of our population addicted to heroin.

So they decided to set up a panel of scientists and doctors, and basically they said to them go away, look at the evidence and tell us what would genuinely solve this problem and they did something really smart. They agreed in advance to do whatever the panel recommended. So it just took it at politics. So the panel goes away. It looks at all the evidence. Led by an amazing man called João Goulão, and they come back, and they said, decriminalize all drugs from cannabis to crack, but and this was the crucial thing, take all the money we currently spend on arresting and imprisoning drug addicts and spend it on turning their lives around, on learning the lesson of Rat Park which is reconnecting them this society.

So partly that was things that we think of as treatment in America and Britain like, you know, residential rehab and psychological support, and that does have real value. But the biggest part of the program is something completely different. It was subsidized jobs for addicts and microloans for addicts so they could set up businesses. So let’s say you’re a mechanic, got an addiction problem. When you’re ready, go to a garage and they’ll say if you employ this guy for a year, we’ll pay half his wages. Really simple, the goal was to make sure that every addict in Portugal had something to wake up for in the morning and something to get out of bed for. And it’s been nearly 15 years and the results; injecting drug use is down by 50 percent, 5-0 percent in Portugal. Overall addiction is down, overdose stats are massively down, HIV transmission among addicts is massively down. And one of the ways you know it’s worked so well is almost no one wants to go back.

I went and interviewed this guy called Joao Figueira who led the opposition to the decriminalization. He’s the top drug cop in Portugal. And he said to me, everything I said would happen didn’t happen, and everything the other side said would happen did, and he talked about how he felt ashamed having seen this work in practice that he had spent 20 years arresting and harassing drug users before the decriminalization because it didn’t work and this way did. And he hoped the whole world followed Portugal’s example. And it was so exciting to see that these alternatives were working. It’s important to understand there are limitations to what they done in Portugal as well.

So in Portugal they’ve decriminalized use, but they haven’t legalized sale. So the drug trade is still in the hands of criminal gangs. The best way to put it is they’ve shut down orange is the new black, but they still have Breaking Bad, right. But this is not perfect which is why you have to look at legalization. And legalization does not mean a kind of free-for-all. You know, it doesn’t mean having a crack isle in CVS, right. There are places that have tried legalization and it’s working extremely well. Obviously your listeners will know very well about the extent of the marijuana legalization in Colorado and Washington. And you know, it’s very revealing if you look at 53 percent of people voted for the legalization, but now support of legalization is way above that level which means that when people saw it in practice, they liked it and they thought, you know, a higher number of people thought it worked than before, significantly higher.

In Switzerland to where they’ve legalized heroin for addicts it’s a different model, significantly different model. And the way it works is if you’re a heroin addict, if you go to a doctor, the doctor will refer you to a clinic and that clinic will provide, will give you heroin in the clinic. You have to go there. And it’s really fascinating to go there. It looks like a kind of, I went to one of the ones in Geneva. It looks like a kind of fancy Manhattan hair dressers. You turn up and people go into a little booth and they inject the heroin, and then they leave to go to work because they overwhelmingly get jobs. When the chaos of street use ends people get their lives together. They help them get housing. They help them get employment, and what’s fascinating is you can stay on that program as long as you want, right. They’ll never kick you off. There’s no pressure to reduce your dose. But what’s fascinating is most of the people on the program, the overwhelming majority, just choose to reduce their dose and eventually stop because their lives get better, and they can bear to be present in them. So you don’t want to on smack the whole time if your life is getting better.

Matthew: They’re creating their own Rat Park.

Johann: Exactly, and that’s a good way of putting it. And you know there’s obviously, they’re not going to drug dealers, right. Heroin dealing, you know, was just absolutely decimated by this because why would you go to a street dealer to buy a much more expensive contaminated product when you can go to the doctor and get a much cheaper, purer product. Obviously you don’t do that. So what we see is, you know, there are models of legalization that work, and this is a much more sensible way to spend the money. And it’s interesting because Switzerland, you know, when I’m explaining it to Americans, I’m trying to say Switzerland is an extremely right wing country. I’m a Switzerland citizen as well as a British citizen. Switzerland is an extremely right wing, this is not like… this isn’t like San Francisco voting to legalize heroin. This is like Utah voting to legalize heroin, and they did it.

It’s very interesting the way they won the argument. Their campaign was led by an incredible person called Ruth Dreifuss who was the first female president of Switzerland and who I interviewed. Really she is an amazing person. And she ran it not on a kind of liberty based argument. A very different way, and I think such an argument that we really need to use in the drug reform movement in the US. And it was actually an order based argument. Everyone in the world where legalization has prevailed generally liberty based arguments which is like it’s your body, you can do what you want with it, which I am philosophically sympathetic to, just don’t get much traction. People don’t like those arguments. What works are order based argument, what Switzerland is.

The drug war means anarchy. It means unknown criminals selling unknown chemicals to unknown users all in the dark. Legalization means order. It means we take these criminals. We bankrupt them. We take these chaotic addicts and we put them in nice clean clinics where they’re not in our public places screwing things up and being chaotic and spreading disease and all those other things. Legalization means the restoration of order. It means the opposite of anarchy. And that really, you know, Swiss people voted twice in referenda by really huge margins; 70 percent to keep heroin legal for addicts for precisely that reason because of that argument. It wasn’t because of compassion or anything else. My Swiss relatives, you know, they met Michelle Bachmann that led Bernie Sanders. They thought they were being nice, you know, and also because of the enormous fall in street crime. I think the figure was, there was a 93 percent fall in burglary. It’s something absolutely extraordinary, once that was introduced. Again it’s very striking. That was extremely controversial before it was introduced. Once it was introduced, it worked incredibly well. It’s not very controversial anymore in Switzerland.

Matthew: The one thing I worry about here is we have entrenched interests, pharmaceutical companies, private prison systems, prison guard unions that don’t seem to welcome this ending of prohibition. Do you see that dissolving just by the mere fact that it’s so successful in Switzerland and Uruguay and Portugal?

Johann: No it’s not going to dissolve. There are corporations who have one thing. They are legally obligated to do one thing and one thing only which is maximize profit for their shareholders. They’re going to carry on doing that. They’re never going to stop. What we have to do is overwhelm them, and we have to… which of course has happened. If you look at, you know, all sorts of things, corporations are stopped from doing all sorts of things. Think about what the United States was like at the turn of the 20th Century what corporations were allowed to do then. There are loads of things, for example, promote tobacco to children which they’re not allowed to do now. That’s not because those companies saw the light. It’s because ordinary citizens organized and demanded that these companies be stopped by the government from doing, and that’s what we need to have when it comes to the drug war. They’re not going to go away. They’re not going to stop doing what they do, but we need to make our voices louder than their voices so that the government has to regulate them and stop them from committing the most kind of egregious acts.

And you know anyone listening to this who thinks oh that’s such a tall order, you know, I would tell them the story about one of the most amazing people I met in the journey for my book. And in the year 2000 there was a homeless street addict in Vancouver called Bud Osborne. And he was in a place called the downtown East Side of Vancouver which was a notorious area, has the largest concentration of addicts in North America and possibly the world. It’s regarded as like the place at the end of the line in the city at the end of the line in North America. And Bud was watching his friends die all around him. People would shoot up behind dumpsters so the cops wouldn’t see them, but obviously, you know, if you’re hiding so no one can see you and you start to overdose then no one sees you. Your body is found a day later. You die.

And Bud thought I can’t just watch this happen. I can’t just watch my friends die all around me, but he also thought I’m a homeless junkie, what can I do. And he had a really simple idea. Got together with a group of the addicts and he said, when we’re not using which is most of the time even for hardcore addicts, why don’t we have a timetable and why don’t we just… not with the police, not with nurses, not anyone else just us, why don’t we patrol the alleyways, and when we spot someone O.D.-ing just call an ambulance, right. It’s a really simple idea. And so they started to do it, these addicts, just on their own. And within a few months the overdose rate started to really significantly fall in the downtown East Side which is great. Because, you know, it mean people were live who would otherwise have died, but it also meant the addicts started to think about themselves differently.

They started to think oh maybe we’re not like the pieces of rubbish people say we are. Maybe we can do something. So they started to organize. First thing they did is they would turn up at public meetings to talk about the menace of the addicts, and they would sit in the back and they’d… after a while they would kind of put up their hands and they go oh, I think you’re talking about us. Is there anything we can do differently. And sometimes people would be really angry and sometimes they’d, you know, they’d say things like oh you leave your needles lying around. And Bud said, that’s fine we’ll extend the patrol, we’ll pick up the needles and they started doing that. And as they got more involved, Bud had learned that in Frankfort in Germany they had opened safe injecting rooms where addicts could use the drugs legally and be monitored by doctors and that it had virtually ended overdosing in Frankfort. And he was like great we got to do that here, but there had been nothing like that in North American since Harry Anslinger, the birth of the drug war in the 1930s.

But Bud thought alright we’ll start demanding it, and they decided to at this very large and dedicated group of addicts, their friends and supporters decided to target the mayor of Vancouver. It was a man called Phillip Owen, he was a very unlikely person to target. Phillip Owen was a rich right wing businessman from a very wealthy family who had no idea about addiction and so the addicts should be taken and forcibly detained at the local military base and never let out, this was the idea where he was coming from. If you pitch at Mitt Romney, that’s kind of like the American equivalent to Philip Owen. And they started… everywhere Phillip Owen went, they turned up in huge numbers and they had with them a coffin, and the coffin said something like who will die next, Phillip Owen, before you will put a safe injecting room. And this goes on for years. And they will say things like at public meetings like, you know, do you remember our friend who asked you a few months ago who would die next Phillip Owen before you open a safe injecting room, well she was the next person who died. She’s dead now because you didn’t open a safe injecting room.

And after 10 years, totally to his credit, Phillip Owen says who the hell are these people and incognito he goes to the downtown East Side and he just spoke to loads of addicts, and he was totally blown away. He had no idea their lives were like this. He had no idea there were people in such pain, and he then went and met Milton Freedman, the Nobel Prize winning economist who was really good on the drug war partly because he had grown up in Chicago under alcohol prohibition. And Phillip Owen came back and he held a press conference and he had the Chief of Police and a Coroner and a representative of the addicts, and he said he was never going to speak about addiction again without an addict present, and he was going to open the first safe injecting room in North America and the most compassionate drug policies in North America and that things were going to change.

And Phillip Owen opened the first safe injecting room, and his conservative party was so horrified they deselected him and his political career ended, but they selected a right wing candidate who was opposed to it and he was beaten by the more liberal candidate who then won and kept the injecting room open. And when I went to the downtown East Side and interviewed the people involved the injecting room had been open for 10 years and the results were in. Deaths by overdose were down by 80 percent, and average life expectancy had increased by ten years which are like, you don’t get figures like that in epistemology except when a war ends which is what this was. And Phillip Owen told me and it was the proudest thing he ever did and he would sacrifice his entire political career all over again. And Bud, who I got to know well, and you can hear the interviews with him on the website www.chasingthescream.com he died last year. He was only in his early 60s, but he had been a homeless addict during a drug and it takes a toll on you.

And when Bud died they sealed off the streets of the downtown East Side where he had lived as a homeless person, and they had this incredible memorial service for Bud. And there were lots of people in that crowd who knew that they were alive because of what Bud did. You know as a direct result of the activism, the Canadian Supreme Court has ruled that addicts have an inalienable right to life and that includes the right to have a safe place to use drugs. That can never be taken away now. Anyone listening to this thinks uh, the drug war is such a big thing, the forces ranged against us are huge. I would just say to them, you are so much more powerful than you know. It’s hard to think of a more disempowered person than a homeless street addict. Bud didn’t wait for a leader. He didn’t wait for someone else. He didn’t ask permission from anyone. He didn’t sit there and ring his hands and say oh it’s so hard. He just started, and because of what he did an enormous number of people who would have died is still alive. If he can do it, we can do it.

Matthew: Great points Johann. I think that’s a good place to close. What a wonderful summary of your book and your travels and your discovery you’ve given us. Again that book’s called Chasing the Scream. It’s available at www.amazon.com and most places online. How else can listeners find your work Johann?

Johann: They can go to www.chasingthescream.com and they can hear all the people we’ve pretty much talked about like Rosolio Reta, the serial killer and Bud and Chino and Lea Maddox, the cop in Baltimore. You can hear interviews with all of them at the website as well. And you can hear like, you know, I think particularly people are interested in marijuana, you know, the story of why marijuana was first banned. It was a crazy story. The story of the man who launched the modern war on drugs, Harry Anslinger. The story of how he stalked and killed Billy Holiday the jazz singer and just the, you know, and what happens when you legalize marijuana. So yeah loads of stories there as well.

Matthew: And this audience is definitely partial to listening to books. That’s how I have Chasing the Scream on the audible app.

Johann: Oh great.

Matthew: Just so everybody knows when you sign up to be with Audible they give you one book for free. It’s a great first book to get if you like to listen to audio books.

Johann: Crazy I probably shouldn’t say this, but if you sign up, you claim that as your free book and then you cancel, you get to keep the free book. So you can in fact get the audio book for nothing if you want to. Maybe I shouldn’t say that. I’ve been hearing really good things about the audio book. Apparently the guy who read it is really good.

Matthew: Yes.

Johann: I was slightly worried because the poor guy has to do like, you know, Mexican voices, Portuguese voices, he has to do the voice of a transsexual crack dealer from Brownsville Brooklyn. He has to do the voice of the president of Uruguay.

Matthew: Yes. It’s a wide range.

Johann: Yeah it’s slightly torturous for him, and he has to be my posh English voice. It’s very, yeah, problematic. I feel sorry for him.

Matthew: Well Johann, thank you so much for coming on CannaInsider we really appreciate it.

Johann: Great. Thank you so much.

Matthew: If you enjoyed the show today, please consider leaving us a review on iTunes. Every five star review helps us to bring the best guests to you. Learn more at www.cannainsider.com/itunes. What are the five disruptive trends that will shape the cannabis industry in the next five years? Find out with your free report at www.cannainsider.com/trends. Have a suggestion for an awesome guest on www.cannainsider.com, simply send us an email at feedback at cannainsider.com. We would love to hear from you.

Join CannaInsider For FREE & Receive
The Five Disruptive Trends Shaping The Cannabis Industry Now

The Size of the Cannabis Market – Diving into the Numbers and Insights of Cannabis Legalization with Matt Karnes

Matt Karnes

Matt Karnes, founder of GreenWave Advisors takes his keen analytical eye and helps us understand the cannabis industry in size and profit potential compared to other “sin” industries.

Get 10% off Matt Karnes industry report at: http://www.greenwaveadvisors.com/
with the coupon code: cannainsider

Key Takeaways:
[1:25] – Matt’s background
[3:31] – Matt talks about the content and numbers in his research report
[5:42] – Matt discusses the difficulties in analyzing the cannabis market
[6:57] – Comparing cannabis to alcohol
[7:50] – Matt compares the marijuana and alcohol industry in terms of size
[11:09] – Matt discusses why cannabis business can’t write off certain expenses
[15:11] – The big takeaways from Matt’s report
[17:27] – Matt talks about the new tax numbers coming out of Colorado
[21:06] – Matt discusses the marijuana industry moving forward
[22:42] – Contact details for GreenWave

*Get the FREE CannaInsider Podcast for your smartphone, CLICK HERE.*

Read Full Transcript

Matthew: Hi, I’m Matthew Kind. Every Monday and Wednesday look for a fresh episode where I’ll take you behind the scenes and interview the leaders of the rapidly evolving cannabis industry. Learn more at www.cannainsider.com. That’s www.cannainsider.com. Do you know that feeling when you sense opportunity, when you see something before most people and you just know it will be successful, then you're ready. Ready for CannaInsider Consulting. Learn more at www.canninsider.com/consulting. Now here's your program.

We hear a lot of wild speculations thrown around about the size and scope of the cannabis industry. A lot of it without any real substance or data behind it. Today we’re going to take a much closer look at the size of the cannabis market from an industry researcher that has dug into the numbers and can paint a picture of the size and potential of the cannabis opportunity. I am pleased to welcome Matt Karnes of GreenWave Advisors to CannaInsider. Welcome Matt.

Matt: Thank you , good to be here.

Matthew: Now Matt to give listeners a sense of geography, can you tell us where you are in the world today?

Matt: I am in New York City in Manhattan.

Matthew: Matt you have quite a media report on the cannabis industry, but before we get into that, can you tell us a little bit about your background as an analyst and why you started GreenWave Advisors?

Matt: Sure. I served as an equity analyst both on the sell side and as an analyst on the buy side for a hedge fund. And during my tenure as a sell side analyst, I authored various industry reports on different emerging technologies, disruptive technologies, etcetera, and analyzed those type of companies when I was an analyst on the buy side. Prior to that I served as an auditor for Price Waterhouse. I had varying financial roles during the course of my career. And about a year, year and a half ago I just really took an interest in the cannabis sector realizing that there’s tremendous growth opportunity. And as I was doing my due diligence on the industry it occurred to me that there was really no information that was available in terms of, you know, quantifying the industry that provide, you know, real transparency into how you could take it, go about determining what the market size, potential market size is.

So I took that opportunity to conduct my own further due diligence and analyze the information that was available in those markets where marijuana is legally sold, and use that as a basis to prepare this report, this industry report which is, you know, a pretty lengthy, detailed report on where we are right now.

Matthew: Yeah it’s such an opaque market. It’s state by state. There’s the information can be slow to come out. It’s very difficult for someone that wants to get a macro sense of what’s going on to get real true information. What subjects are explored in your research report so listeners can get an idea of what you dig into.

Matt: Sure so basically what the objective of this report, our first report is sort of like a primer for those new to the industry, and you know maybe just puts things in a different perspective to those who are well familiar with the industry. And what we do is we kind of provide an overview of, you know, basically what cannabis is, what are the different components of the ecosystem. We also talk about federal laws, why we believe federal laws are likely to change, and we also provide an overview of some of the state laws. And then we do a deep dive, and we also have a long term view, a thesis on which direction we think the industry is going to ultimately… how it’s going to end up ultimately.

And a big part of what our report is is that we do a deep dive into those states where marijuana is legally sold, and we analyze the data and we look for commonalities among the states and we use that as a reasonable basis for our projections for those states that have not yet legalized. And we did this, we approached this in two ways. We looked at the medical marijuana market, and then we also looked at the recreational market, and we built two models. We have a detailed model state by state, and we map out our methodology. We indicate exactly how we get to our assumptions, why we use our assumptions. And then we consolidate both of our models to have, you know, to provide the industry estimates.

Matthew: So your background as an analyst, publically traded companies have so much information as far as, you know, the financials that it’s much easier to do due diligence on a company and figure out what they have going on. In contrast, what kind of information do we have for companies for people that want to dig into it, but they don’t have the readily accessible information of say a publically traded company?

Matt: Well it is really difficult and particularly trying to analyze the recreational market because we just don’t have the data available. On the medical side, you know, we know what the patient data is, we know sales are. There’s certain metrics that we’re able to calculate and we’re able to identify trends. But on the recreational size it’s much more difficult. And so looking at, you know, publically traded companies, what I believe is that everything is going to trade. At some point there are going to be more and more publically traded companies that are going to trade on exchanges that provide more liquidity and are, you know, more acceptable from the institutional standpoint. And these type of stocks whether or not, you know, in any type of ancillary business I believe that these stocks will trade in tandem with how the industry is moving as a whole.

Matthew: Now how can we thing about the cannabis industry in terms of prohibition ending similar to let’s say alcohol and then something that’s never been really in prohibition, cigarettes perhaps? I mean what kind of lens do you use to compare cannabis to alcohol?

Matt: Well there is actually a lot of similarities between prohibition with alcohol and where we are now in marijuana. So for example back in the day if somebody had some type of ailment, their doctor would prescribe whisky to alleviate that. We kind of go… we do an analysis and we do talk about the similarities between prohibition then and now. What we also find is that after prohibition the growth rate in alcohol sales was pretty significant. It was north of 20 percent. So we kind of factored that into what we are forecasting from the recreational standpoint, taking a haircut to that assumption.

Matthew: Okay. Now in terms of size, what is the size of the legal cannabis industry versus the alcohol industry so we can get a sense of comparison.

Matt: Well the thing is it’s really hard right now to figure out, you know, what the terminal value of marijuana is. So the alcohol industry is a mature industry as other sin industries. And the alcohol industry is, you know, triple digit in the millions, $100 million, $200 million. The spirits is about $72 million, wine about, I guess about a $30, I’m sorry, billions not millions. $72 billion for spirits, about $30 billion for wine, beer is about $100 billion. So that’s north of $200 billion. So where does that… how does marijuana compare to that, and also cigarettes, tobacco is about $290 billion.

So if you look at marijuana, what we anticipate under the trajectory, our anticipated trajectory for legalization. By 2020 we would expect a combined medical and recreational market to approach about $20 billion, and if you just then in 2020 say okay, all those remaining states, if they were to legalize by 2020, in that first year the market would be about $35 billion. So clearly from there we have a lot of growth. So it would not be unreasonable to assume that the marijuana industry could surpass the alcohol industry as well as the tobacco industry.

Matthew: Yeah and cannabilize it as well at the same time as it exceeds it. You know a lot of people turning to perhaps edibles or drinks infused with THC versus having a glass of wine or a beer. So I imagine that you know the big alcohol companies are really looking at this closely.

Matt: Absolutely.

Matthew: So the fact that most cannabis that are traded publically are penny stocks or what some people refer to as the OTC stocks, over the counter stocks, do you anticipate this keeping out the big Wall Street money from trading these shares?

Matt: Oh absolutely because there’s really a very limited liquidity. That’s a big concern. And also there’s, you know, very little transparency from some of these smaller companies. And you know, they need to be traded on a more stringent type of platform such as the New York Stock Exchange or the NASDAQ or what have you. That’s what’s going to attract the institutional investor base. Those exchanges also provide added comfort in the fact that, you know, there are more restrictions to list on those type of exchanges. So that’s another reason why institutional investors would be looking to invest in companies that are listed as opposed to the current environment.

Matthew: Now you mentioned you’re also a CPA. As you’re probably aware cannabis cultivators can’t write off a lot of their expenses. Can you just talk a little bit about how a normal business writes off expenses and then how a cannabis business can’t really do the same thing and how that hampers their profitability?

Matt: Yeah sure so basically, you know, any other type of business you have your revenues and you have your expenses. Your normal operating expenses are tax deductable. But in the case of cannabis, those companies that touch the plant are prohibited under Section 280E from writing off their operating expenses. So their rent and their, you know, utilities or what have you. The exception to that is the cost of sales which is the cost of the product, the actual flower, you know for example that a dispensary would purchase, and then also for a grow facility, you know the cost of producing that plant. But those are the cost of sales, but you know that’s it. That’s where the buck stops. And the IRS is scrutinizing all these type of businesses because there have been loopholes in which for example a medical marijuana dispensary would set up a separate consulting division within their dispensary to consult patients on various types of marijuana that would be advisable, you know, for a particular ailment.

And so by doing so they would justify writing off that pro-rata portion of the rent and all the overhead expenses. And so the IRS is really cracking down on this. The silver lining behind this though, at least the State of Colorado I know does allow normal operating expenses as tax deductions. So while you can’t take those write-offs, you know, at the federal level, you still have some benefit at the state level.

Matthew: Okay. So do you think there’s the prospect of cannabis as a medicine being something people individually put on their tax return and saying hey this is a tax deductible medical expense?

Matt: Well the federal government will disallow that because it’s illegal. Well there are still some questions regarding the tax deduct.. the personal tax deductibility of marijuana for medical purposes. But because it’s a Schedule I drug, you know, it’s likely that they’ll follow suit with how they’re viewing cannabis businesses from writing off operating expenses. But from a state perspective it would not be unreasonable to assume that if the state is allowing these type of deductions for a business, that they would also allow an individual to claim these type of medical expenses on their individual tax returns, you know, for their state income tax filing.

Matthew: Gosh that seems just crazy that, you know, unfair on how they’re treating cannabis businesses. Is there any other business out there that gets treated this unfairly in your mind?

Matt: It really comes down to, you know, being a Schedule I, you know, drug and you know when that changes tax laws will change and profitability will increase. And that’s in answer to the second part of your question, you know, how is it affecting profitability. Well essentially a business entity that is in this business that is touching the plant can conceivably pay more taxes. They can pay taxes even if they have a net loss. So you know it really is very challenging for these businesses.

Matthew: Now turning back to your report. It’s a big media report as I mentioned. What are some of the biggest benefits prospective customers would have in reading this report? What are their takeaways going to be? What are they going to learn?

Matthew: Well I think it really identifies certain trends that we’re seeing in those markets where marijuana is legally sold. And the takeaway would be like if you’re looking to invest in a state that is going to implement a marijuana program, you would you know have some insight as to what you could expect. We go to great lengths to identify the market size for the medical marijuana market. And by so doing we identify the different ailments and we come up with, you know, the potential market size and it’s very interesting, our observations, in terms of what we’re seeing that’s consistent among the states. And also, you know, we can look, we can clearly identify spending habits for medical marijuana users.

So you know while clear our model is not bulletproof and you know there’s definitely a broad range of assumptions that we make, but we believe that the analysis that we did in those states where marijuana is legally sold, provides a reasonable basis for our projections as well as the trajectory of, you know, when we think a different state will come on board. We expect once legalization occurs, we anticipate about a year before sales are actually transacted because it’s going to take about, as we all know, about you know that amount of time, maybe even a little longer to implement a program. However as time goes on we believe that best practices will be followed, and it will just make it that much easier for the new states that are coming on board to implement. So that actual timeframe could conceivably compress from a year plus to, you know, less than a year.

Matthew: And that is happening as you mentioned. I’ve talked to some state regulators, and they mentioned that other states are reaching out to them asking for advice, what’s worked, what hasn’t worked. So they iterate and they get better with each state coming online which is nice to hear. Now I understand that the Colorado tax figures just came out. Can you tell us a little bit about what those numbers said?

Matt: Well yeah so the interesting thing is that we are seeing, as we outline in our report, the medical marijuana is declining. Year over year is, I think it’s roughly negative, it’s decreased about one percent or so. And the recreational market is growing. It’s yet to be seen, you know, how everything’s going to play out. The number of patients also is declining, and so we believe that the recreational market is disrupting the medical market. And long term we believe that they’re just going to be one market. And now from a tax standpoint, you know, fell a little short I believe from expectations. That could be in partial because of an excess supply.

So because of the excess supply prices came down, and as a result of that, there’s less sales tax. Now bear in mind that’s about half of the revenues because if you make the assumption that about 50 percent of the retail sales come from edible products and 50 percent are from flower. It’s really the flower that has that exposure to the oversupply because for the most part the edible products and the infused products the price points pretty much stay consistent. So it’s that’s flower. And I think this is a lesson learned that for any state you really don’t want too much supply out there. While it’s nice to get these application fees from everybody, you know, longer term if there’s an oversupply, that’s going to continue to put pressure on pricing, and as a result of that we’ll see lower excise tax collections and we’ll see lower sales tax collections.

Matthew: It really is about finding that balance as a state too because you know a black market still exists for a lot of different reasons that people listening to the show may not really think about. So it’s like you want the price to be low enough where it gets rid of the largest bulk of the black market possible, but you don’t want it so low that they don’t make any tax revenue and you know don’t get any benefit from having legal cannabis from… that’s states’ perspective anyway.

Matt: Absolutely. And you know the interesting thing is there’s so many opportunities in this industry. It’s not all about the products that contain the THC. It’s the cannabinoids, you know, the industrial hemp, that’s another huge area that we will explore. And the non-THC products, it’s just amazing how the elder generation are now warming up to the idea of marijuana legalization. I can tell you I have a 87 year old aunt who suffers from chronic nerve pain. She’s tried everything possible. I convinced her to get a medical marijuana card in Arizona. She got one, and she tried different ointments and so forth and it’s really helping.

Matthew: Oh that’s great.

Matt: And you know I think that’s kind of the buzz around the retirement community.

Matthew: I bet. That’s some juicy information. Okay so you were just recently in Colorado. You’ve kind of done your tour around here, and what do you see that kind of excites you or looking ahead, how do you see the industry changing because it is moving so quickly. What are your general thoughts about where we are versus what’s coming in the next year or two?

Matt: Well you know clearly branding is very promising. There are many companies, not many, but there are a handful of companies that are really very appealing from a branding standpoint, and I believe, you know, they’re going to continue to expand and look at opportunities in other states via licensing deals. And I just think you know certain subsectors of this industry are either going to be irrelevant or insignificant, you know, at some point when laws change. Not every aspect of the ecosystem is sustainable, but there’s going to be a lot of changes I believe.

Matthew: We now can you give an example or two of what you mean might go extinct?

Matt: Well for example if you go to a dispensary, as you know they don’t… there’s limited banking capabilities so most just deal in hard cash. And as a result of that and because there’s so much cash on hand they have to hire armed guards. And the security costs are a lot more than they would have been otherwise if banking was permitted. So those type of companies I don’t believe will be needed to the extent that they are now when laws change.

Matthew: Yes, that’s a great point. That’s an excellent point. Well Matt as we close here, how can listeners learn more about you and find your report?

Matt: Well we are at… you can visit us at www.greenwaveadvisors.com. We just issued our State of Colorado report. It’s a one year anniversary. It’s a look at what we’ve seen, the first state with a dual market for one full year. So we look at the dynamics from the recreational market and the medical marijuana market and what patterns we’re seeing. And we do a real deep dive and we look at, you know, information across different counties within the state, different trends. And we hope that readers will find it of interest as they evaluate investment opportunities either within the State of Colorado or look to that as the bellwether for or best practices for other states, for investing in other states.

Matthew: Well that’s great. I really encourage readers to check out Matt’s website. He does bring a high level of knowledge as he mentioned from another industry and focuses that right on the cannabis industry. He’s really digging into a lot of information at a granular level that no one else is really doing right now. Matt, can you give out your URL one more time?

Matt: Sure it’s www.greenwaveadvisors.com. And I would like to also offer your listeners and your visitors to your website a 10 percent discount code off the price of the product and the coupon code is CANNAINSIDER.

Matthew: We always like that, thank you Matt. Well Matt thanks so much for being on CannaInsider today we really appreciate it.

Matt: No problem.

Matthew: If you enjoyed the show today, please consider leaving us a review on iTunes. Every five star review helps us to bring the best guests to you. Learn more at www.cannainsider.com/itunes. What are the five disruptive trends that will shape the cannabis industry in the next five years? Find out with your free report at www.cannainsider.com/trends. Have a suggestion for an awesome guest on www.cannainsider.com, simply send us an email at feedback at cannainsider.com. We would love to hear from you.

Join CannaInsider For FREE & Receive
The Five Disruptive Trends Shaping The Cannabis Industry Now

Growing Cannabis and Hemp from Seed Versus Clones with Ben Holmes

Ben Holmes - Centennial Seed

In this episode Ben Holmes of Centennial Seeds helps us understand the importance of cannabis and hemp seeds and where we are in terms of having a good seed stock. Ben also talks about why it is often preferable to grow cannabis from seed instead of growing clones from a mother plant.

*Guess What? You could be listening to this interview on your commute. Get the FREE iPhone app or Android App*

Key Takeaways:
[1:28] – Benefits of cloning
[3:17] – How to get better seed
[4:30] – Why taking too many cuttings from a mother plant causes issues
[6:56] – Ben explains what he grows from
[8:07] – Ben talks about exciting things going on in the seed industry
[9:54] – Ben talks about the hemp industry
[12:34] – What is autoflowering
[13:36] – Contact details for Centennial Seeds

Read Full Transcript

Matthew: Hi, I’m Matthew Kind. Every Monday and Wednesday look for a fresh episode where I’ll take you behind the scenes and interview the leaders of the rapidly evolving cannabis industry. Learn more at www.cannainsider.com. That’s www.cannainsider.com. Do you know that feeling when you sense opportunity, when you see something before most people and you just know it will be successful, then you're ready. Ready for CannaInsider Consulting. Learn more at www.canninsider.com/consulting. Now here's your program.

Ben Holmes is the owner of Centennial Seeds and is a s subject matter expert on cannabis and hemp in particular when it comes to seeds. Before talking with Ben I was caught up on the efficiency of growing only from clones for a lot of reasons, but as you’ll see growing from seed is something we should all know more about. Welcome to CannaInsider Ben.

Ben: Hi, thanks for having me.

Matthew: Ben to give listeners a sense of geography, can you tell us where you are today?

Ben: I’m in Lafayette, Colorado which is in East Boulder County.

Matthew: Now a lot of listeners out there don’t think much about seeds. Most cultivators today get a prize train of cannabis then have a mother plant. From that mother they then cut off little sections of that plant to create a whole new plant. Can you tell us first the benefits of cloning and then why it might be optimal to grow from seeds at time?

Ben: Well it all boils back to where the state of the cannabis seed industry at this point and over the last few decades and that is that there are sort of people operating, you know, I don’t want to say, slightly above the hobby level. You know, somewhere in a professional capacity they make seed, and they sell them into the market via the internet or what have you. A lot of those seeds are made quickly. They’re single generation crosses. It’s two parents that are unrelated that they find interesting. They make the cross. They write some ad copy, and then they release the seed.

So when it gets to the end buyer that person will germinate a dozen seeds, and you’ll get, you know, eight different types. You know it will be sort of short ones and tall ones and heavy yielders and scraggly plants. The point is that no one’s gone to the trouble of stabilizing those varieties or those seed types so that it forces the grower, the end user to rely on special plants. You get one good plant out of the packet, you save that plant and then you propagate. You cut it and cut it and cut it and clone it until it collapses, until it no longer is clonable. That’s kind of why people rely on clones.

Matthew: Okay. And what in your mind is a better way of doing it?

Ben: Well if the market would produce a stable seed that breeds true for a particular type and particular traits, those seeds can be reliable and a grower can expect when they put them in the ground for them all to product, you know, desirable plant types versus the variation we’re getting now.

Matthew: Okay so if someone’s looking to buy seed, is there any kind of diligence they can do to ensure they’re getting something better than most?

Ben: The industry is so immature there really isn’t… there’s not much to pick from. I mean you have to know your breeder, and you have to kind of ask the questions is this stable. Not just for things like gender where plants can switch from female to male in the middle of a grow, and that’s terrible for a seedless gardener, you know, that creates seeds. Stability just in a sense that you get uniformity across the individuals from seed.

Growing from seed versus growing from a cutting, the plant will always be more vigorous, all things being equal. And then that’s because you’ve brought a seed from, you know, this is billions of years of evolutions that’s created these things. They’re near perfect. I mean you take seeds that are completed on the plant, they pretty much all germinate and pretty much all turn into a plant. Nature’s really incredible that way. But we lack that uniformity and that reliability, and we really even lack metrics, you know, by which to compare these things. It’s sort of a fragmented market. There are hundreds of seed producers and really no dominant players, you know.

Matthew: Now can a mother plant become fatigued or injured over time if too many cuttings are taken?

Ben: Yes, and that’s another…it’s a function of the industry being very immature. And this is not, you know, this came out of dirt. This came out of nothing. This industry was out of the crawl spaces in the basements. So to learn aseptic technique where you clean your tools and you work on a clean surface, you clean the plant before you cut it. You clean the tool after you cut, before you cut another plant and everything is handled in gloves. It gives those plants a longer life span, the mother plants, because like you said every time you cut them, you introduce some biological insult be it a virus or a mold spore or a bacterium. You’re infecting the plant a little bit at a time. And over time the plant doesn’t have the normal resources in healthy outdoor soil that would allow it to build defenses for those, those disease, and eventually they just succumb and they die, yeah.

Matthew: Okay so a mother plant can start to look droopy or even diseased after a while. You mentioned the gloves and cleaning the scissors, but is there anything else we can do to ensure that you not introduce any kind of bacteria or foreign bodies to the mother plant?

Ben: The grow space has to be kept clean. You know a lot of these places are run, you know, they’re pretty messy. There’s a lot of opportunity for infection and cross infection of material. You can avoid clones from the community. You don’t want to take clones that come out of grow operating for instance because when they sell you their clones they’re really selling you their culls. They’re not selling you the best looking clones. They’re taking the last 12 that they really don’t think are going to do very well, and they take them out to the store and they sell them. It’s not geared to give you the best plant that they can produce. It’s not in their best interest.

And second a lot of those places have contantly overturned, perpetual, harvest-type grow rooms. Those rooms develop colonies of bugs that become super resistant to whatever measures are available to you through the retail channels in terms of pest control. So you’re really introducing bugs into your room and into your situation when you bring clones from other people’s gardens that you’re not in direct control of. It’s just a risk.

Matthew: Do you pretty much only grow from seed done yourself personally or do you also sometimes grow from a cutting?

Ben: Once in a while something comes along where there’s no opportunity to grow it from seed. A good example would be the Harlequin CBD line which is a high CBD, low THC cultivar that’s grown for a CBD extraction. It’s a clone only. It’s never been released in seed form that I know of, and I wanted to at least have the opportunity to outcross some of my material to it. So somebody gave me a clone, and I set it in a room by itself, put up some sticky traps and watered it really heavily to see if I could drive any bugs out of the soil, any fungus gnats. And then you take leaves and you go under the scope and make sure that they’re clean, that there’s no mites or any kind of thrippy looking bug, eggs. And you know you have to sort of quarantine these plants when you bring them in. Once they’re inside your room and they’re clean and you’re using aseptic technique and you’re making clean cuttings, it’s you know, then it’s inside your system and you can deal with it. But it’s just bringing that material in for the first time I think is risky.

Matthew: What do you think is the most exciting thing going on in the world of seeds right now?

Ben: I would have to say the Cannabis Genomic Research Initiative out of the University of Colorado at Boulder. That’s being administered and investigated by the Kane Laboratory. It’s Nolan Kane and Daniela Vergara. And that bit of science, most people roll their eyes. So if they don’t do it outwardly, at least, you know, sort they shy away from it because it really isn’t something that people understand, but I can tell you that the tools and the resources that are developed as a result of mapping the genome of cannabis are going to be commonwealth technologies that any company or any innovator can utilize to make better stuff, better pest control, better pest resistance, better yields. All of the things that we want, all of the characteristics that we want are traits that can be identified and screened for. And we’re not talking about genomic engineering or GMO work.

We’re talking about just very very precise technology assisted selections just like using an instrument to measure THC. You can look at their genes and decide whether or not they have more or less of the gene for expression of THC synthase. They may have a very large amount of that and it’s visible in a assay that can be done at a very young stage, maybe from the seedling stage. So the technology is so far beyond where we are right now, but it yields so many benefits to us. I would urge anybody out there to find it and support the heck out of it.

Matthew: Now switching gears to hemp, you’re really involved in a young but growing hemp industry here in Colorado. What do you see is the biggest problems and opportunities surrounding hemp right now?

Ben: Well the regulatory environment is the best in the country. I’ve read the programs from the other states and Kentucky and Tennessee and so on and so forth, even Florida has some CBD-ish kind of hemp-ish type law. And the platform is very simple. The rules are very reasonable. We have light bright lines in terms of what we can and can’t do, and it really revolves around concentration of tetrahydra delta-9 THC in the plant material. And as long as you work around that bright line it’s really, it’s a wonderful platform to watch be developed. But what’s missing right now is reliable seed. It’s the same as on the drug resin side. It’s just a lack of a reliable seed supply.

You know, this has been held under water for more than 75 years. In 1937 it went prohibited. And just now are we allowed to begin to play with it and study it and work with it, innovate with it. The seed supply has just been completely abolished. It’s gone. Whatever the USDA held in their sessions in lost to time, poorly stored, what have you, it’s seed. The biggest problem we face is without a doubt seed. Having said that, it’s also for me the biggest opportunity. It’s what I see that I can do to contribute. So I see it as both a hindrance and an opportunity.

Matthew: Now you test hemp in your lab. Does anything surprise you in your findings of samples that are sent to you?

Ben: Not really. I’m probably testing a dozen different varieties in a week’s time. You know people bring me samples of things they are growing, and I see a lot of the same material, and that’s just because of the limited amount of seed. In some ways that limited amount of seed you know that it went to people who are going to utilize it, you know, it’s put to use because they paid big premiums for it in most cases and some people went to great lengths to smuggle it or whatever they had to do to get it here. I don’t judge. But it’s clear that people are putting that seed down, and they’re trying to make more seeds. So we’ll see after this season how people do and how people are able to work around the embargo on seed and maybe bring in more material to the state. This novel material is really what we need. It’s not that we need a supplier in Ukraine or Canada to ship us seed. That’s not what we want to be is reliant. We want to be self-sufficient in terms of the industry and make our own.

Matthew: Now for people that are not familiar with the term autoflowering, you see that term thrown around a lot when it comes to seed, can you describe what that means?

Ben: Yeah. It’s a short day crop which means it will flower when the days reach a certain length. Going down from the longest day on June 21st, the day length will shorten all the way down to September 21st when the days are equal and it will lose about two or three minutes a day let’s say. So at some point around the first week of August in our latitude that’s the trigger length of day and the plants will begin to flower. So autoflowers come from material that was bred up in the Arctic Circle way up there, you know, Finland, really really high latitudes where the days are super long in the summer so they would never get that signal of a short day to begin flowering. So it does flower regardless of the day you put them down and then 45 days later you harvest them regardless of the time of year. Obviously you can’t grow in the winter, but it’s irrespective of the length of the day, it will flower.

Matthew: What an amazing adaptation that is.

Ben: Yeah.

Matthew: Great. Well Ben in closing how can listeners learn more about Centennial Seeds?

Ben: Oh you can go to my website. It’s www.centennialseeds.com. I maintain a blog. I write a lot of tech pieces and just sort of help pieces. And you know I encourage people to just check it out and see what it is that we do.

Matthew: Cool, well Ben thanks for being on CannaInsider today.

Ben: All right thanks for having me.

Matthew: If you enjoyed the show today, please consider leaving us a review on iTunes. Every five star review helps us to bring the best guests to you. Learn more at www.cannainsider.com/itunes. What are the five disruptive trends that will shape the cannabis industry in the next five years? Find out with your free report at www.cannainsider.com/trends. Have a suggestion for an awesome guest on www.cannainsider.com, simply send us an email at feedback at cannainsider.com. We would love to hear from you.

Join CannaInsider For FREE & Receive
The Five Disruptive Trends Shaping The Cannabis Industry Now

Cannabis Kills Cancer Cells – Molecular Biologist Cristina Sánchez PhD

Cristina Sánchez PhD

Cristina Sánchez is a molecular biologist from Complutense University in Madrid Spain.  She has been studying cannabis for fifteen years and has discovered that cannabis sends a message to cancer cells to commit suicide.

*Guess What? You could be listening to this interview on your commute. Get the FREE iPhone app or Android App*

Key Takeaways:

[1:39] – How long has Cristina been researching cannabinoids
[2:13] – Cristina explains how cancer cells die when exposed to THC
[3:10] – How chemotherapy is different in treating cancer
[4:51] – How long it takes cannabis to kill cancer
[5:53] – What’s the cannabinoid profile being exposed to the cancer cells
[9:19] – Would you advise a friend with cancer to take cannabis for treatment
[13:02] – Cristina shares her thoughts on CBD
[14:17] – Cristina talks about cancer cell death
[15:11] – Are pharmaceutical companies interested in Cristina’s research
[16:39] – How is cannabis treated by the government of Spain
[18:03] – Learn more about Cristina’s research

Disclaimer: The information provided about cannabis is for informational purposes only. Please consult your physician before making any medical decisions. The opinion of the guest are purely her own and do not reflect the opinion of CannaInsider or Matthew Kind.

Read Full Transcript

Matthew: Hi, I’m Matthew Kind. Every Monday and Wednesday look for a fresh episode where I’ll take you behind the scenes and interview the leaders of the rapidly evolving cannabis industry. Learn more at www.cannainsider.com. That’s www.cannainsider.com. Do you know that feeling when you sense opportunity, when you see something before most people and you just know it will be successful, then you're ready. Ready for CannaInsider Consulting. Learn more at www.canninsider.com/consulting. Now here's your program.

Cristina Sanchez is a molecular biologist from Complutense University in Madrid, Spain. She has been studying cannabinoids for more than ten years. Her research includes findings that THC induces cancer cells to kill themselves while leaving healthy cells alive and undisturbed. Cristina, welcome to CannaInsider.

Cristina: Thank you very much Matt.

Matthew: Can you tell us where you are today in the world just so listeners get a sense of where you are and where you study?

Cristina: Well I’m a biologist, and I’m currently study the anti-tumor potential of cannabinoids of marijuana derive cannabinoids.

Matthew: Okay and you’re in Madrid right now?

Cristina: Yes I’m in Madrid. I’m based in Madrid, and I perform my work, my research at Complutense University as you very well said.

Matthew: Okay great. And so you’ve been doing this for a while now. Is it more than ten years or ten years is it?

Cristina: It’s been actually around 15 years already. We study, yeah we started with this study at the late 1990s, and we published our first paper regarding this issue in 1998. So we’re talking about more than 15 years already, yes.

Matthew: Wow, and so there’s a variety of ways that cancer cells can die, but you noticed a particular way that they die when they’re exposed to cannabis or THC. Can you tell us a little bit about that.

Cristina: Well yes as you said cells, not only cancer cells, but every cell in our body can die in different ways. One could be similar to an accident, a car accident, a traumatic death which is called necrosis. And there is another way to die which is a clean death and by clean I mean no inflammation of the surrounding tissues. And this cancer cell death is called Apoptosis. And when someone’s dealing with anti-tumor compounds, one wants this particular kind of death to happen because the other one is associated to inflammatory processes and things like that that you don’t want in a patient.

Matthew: Right, and so can you talk about how chemotherapy is different in treating cancer?

Cristina: Well it’s completely different because chemotherapy attacks every single cell in our body that is undergoing proliferation. Every cell that is dividing will be attacked by chemotherapy. And which cells are dividing in our body? First cancer cells of course, those are the ones you want to kill, but also the cells of your immune system, the cells of your stomach and a lot of tissues. So that’s why chemotherapy is so toxic because it’s not only attacking cancer cells but other cells that are proliferating inside our bodies. And the difference with cannabinoids is that these compounds only attacked cancer cells. We don’t understand why yet in molecular terms. We don’t know what makes a cancer cell different in terms of the sensitivity to cannabinoids, but we know that this is a fact. Cannabinoids kills cancer cells and they do not affect the viability of non-cancer cells.

Matthew: Gosh this is incredible research you’re doing. This is so needed. So chemotherapy is like a bomb that just kills everything, and THC—from your research—sounds like a sniper that just kills the cancer cells which is exactly what we want, and it caused no inflammation or no kind of problems. It just kills the cancer cells and that’s it. Now how long does it typically take? How many treatments or exposures to THC before the cancer cells decide to kill themselves?

Cristina: It depends on the model of cancer we are using. When we treat cancer cells grown in plastic plates we add cannabinoids just once, and cancer cells die in one day, two days.

Matthew: Oh my gosh.

Cristina: But this is cancer cells culture in plastic plates not in an animal or not of course in a human body. When we use animal models of cancer, we treat the animals every 2 days for 15 days, 3 weeks, and we start to see effects basically from week one, but we have to treat the animals 3 times a week, 4 times a week. It’s not just one single injection.

Matthew: Wow this is incredible research. Now the, you say cannabinoids, but is it pure THC or what’s the cannabinoid profile you’re exposing to the cancer cells?

Cristina: Okay. We have used many different compounds, a few compounds. Cannabinoids is extracted from the plant. We have used many different tools, and our hands, cancer cells respond basically the same way to cannabinoids either if they are fewer compounds or if they come from the plant and they’re accompanied by other compounds.

Matthew: Right. I’m sure you’ve heard of the entourage effect in that the cannabis plant works best when the cannabinoid profile has some sort of complete structure with diverse cannabinoids in there. Do you think that doesn’t really matter so much, just any kind of cannabinoid or do you think one that’s from a full plant works best?

Cristina: We have tried them both pure and extracted from the plants, and we see slightly better effects when we use a botanical extract, isolations from the plant that are accompanied by other cannabinoids and terpenes where we have the entourage effect that you mentioned. But for cancer patients I think we should find the precise combination of cannabinoids that work best for each individual patient. We are testing now in the lab different cannabinoid combinations. We are combining THC with CBD in different proportions, and we think that for each individual patient a specific cannabinoid combination would work best. So our work is to find that combination for every patient.

Matthew: Okay. And now there’s a lot of different kinds of cancer. What do you think, is there certain kind of cancers that are most receptive to this cannabinoid treatment?

Cristina: I don’t have an answer for that question. We and not only our group but many others in the world are taking this anti-tumor potential of cannabinoids, and as far as I know basically every cancer model that has been tested is responsive to cannabinoids in one degree or another. In our hands I would say that those cancers that are characterized by more proliferation are the ones that are most sensitive to cannabinoids, but as I said I’m not aware of any single cancer type that has not responded to cannabinoids. So apparently cancer cells have something different from non-cancer cells that make them sensitive to cannabinoids.

Matthew: Now there’s a lot of people listening that may be suffering from cancer or they have a friend or family member that is suffering from cancer. And in certain states, the state I’m in and California and others, you can find cannabis oil and cannabis extracts. I know you can’t really advise patients over a show like we’re talking about here, but let’s say that you were talking to a friend or someone and said hey look just take as much cannabis oil as you can and that should help with your tumor, is that what you would advise?

Cristina: Well we don’t know if cannabinoids can help cancer patients in terms of the anti-tumor potential. We know and we are very sure of that that these compounds work very very well in the animal models we have used. Unfortunately there are no serious control studies performed so far in human patients. I hope these compounds can be used with them as well, but as far as I know and I’m pretty updated in this issue, there are no human studies that can allow me to say that. So what would I say to a friend or what would I say even to me if I am diagnosed with cancer tomorrow? What I would say is this is the pre-clinical information we have, and I would stress out the word pre-clinical meaning that there’s no information on human patients yet, but on the other hand these compounds are very safe. So basically you have nothing to lose. The worst that can happen to you is that the cannabinoids do nothing to your tumor, and you would probably feel better because the effects are exegetic and appetite stimulating effects and all these things that cannabinoids do.

But in terms of the anti-tumor response, no, we don’t know if they work in human patients. We hope they do, and we are working very hard to provide pre-clinical evidence to the doctors and the medical community to make them check these compounds in human patients, but we don’t have that answer yet. So again if it was me the one with cancer I would probably try the compounds. Knowing that they have not been tested in humans for this purpose, but also knowing that they are very safe. If you are not a teenager or if you don’t have psychiatric disorders, these compounds are very safe. So basically you have nothing to lose.

Matthew: Right so that’s a great point. We don’t have any evidence for human trials yet. But for people listening who are trying to get a sense like what would a minimum effective dose mean? So let’s say you have a tumor that’s the size of your thumb somewhere in your body, how much cannabis oil would even be enough before they say that’s enough, that’s the treatment. The amount you’re taking is enough. Like what would be the minimum effective dose in your mind? I know you’re not suggesting people do this.

Cristina: We have no idea.

Matthew: Okay so maybe just a lot.

Cristina: We have no idea. We have no idea because we don’t work with human patients. We just work with animals, and we cannot compare does between mice and humans. That’s basically impossible to do. What I would say is take as much as you can. And as much as you can means stop increasing the dose or stop taking cannabis as soon as you feel something that you don’t like. But as far as those side effects don’t appear, I mean take as much as you can because we don’t know the dose that is needed for this anti-tumor responses to accure, if they ever accure.

Matthew: Now let’s talk a little bit about CBD. We talked about THC, we talk about cannabinoids in general, but in your research what are your thoughts about CBD?

Cristina: Well we are big fans of CBD because we have used these compounds in the lab and at least in breast cancer which is the type of cancer I work in. CBD is as effective as THC in killing cancer cells. And it has the advantage of not producing side effects which in the eyes of the doctors at least is very good news. It is in fact good news because the lack psychoactivity allows you to use higher amounts of cannabinoids. So this is also good news. But as I said, in our hands in cancer cells grown in plastic plates, in our animal models of cancer, CBC is as effective as THC.

Matthew: Really, wow. And so you focus almost entirely on breast cancer, and from what you’re saying CBC is just as good. That’s incredible.

Cristina: Yes.

Matthew: So we don’t know how the CBD or cannabinoids or THC are killing the cancer cells, but we know they’re dying. Is that accurate?

Cristina: Not really. We have a lot of information about the molecular mechanism that produces cancer cell death. We know, actually that’s what we do now in the lab. We have been analyzing what is going on inside the cells, inside the cancer cell when it is exposed to cannabinoids, and we know that cannabinoids bind to cannabinoid receptors in the membrane of the cancer cells, and we know the complexity of the molecular signal that is occurring inside the cells. We have a lot of information about that. So I wouldn’t say that we don’t know how cancer cell death is produced. I wouldn’t say so.

Matthew: Now is there pharmaceutical companies or the government or different parties coming to you and saying hey we want to create medications for this. Is that happening in Spain and Europe?

Cristina: Well it has happened in fact in the past. GW Pharmaceuticals.

Matthew: Sure, sure, yes.

Cristina: You know who these guys are. They were financing our research for many, many years, and they are now trying to perform clinical trials on the analyzing the effect of this compound in combination with chemotherapy that is given to glioblastoma patients, to brain tumor patients. So this is the only contact we have had with pharmaceutical companies, and we would like them to be faster in their movement toward the clinics because we think that we are wasting precious time and we deserve that, I mean, we have to dedicate our time to patients. So we are trying to force them to perform more clinical trials because we think that the clinical evidence we have so far is more than enough to move to the clinics.

Matthew: It’s incredible because there’s many doctors, I would say most doctors if you’re in the United States, have no understanding, zero understanding of how cannabis could be a legitimate medicine for cancer patients. So here in the United States cannabis is a Schedule I drug. We can’t even use it for medical research. How is cannabis treated by the government of Spain?

Cristina: Well it’s a funny situation because we are allowed to perform research with cannabinoids. There is no problem at all in doing research focused on cannabinoids, but medicinal cannabis is not in the agenda of our politicians at all. And in fact they are very against these global movement around the world pushing towards legalization of medicinal cannabis. So we have general elections pretty soon, and we hope that the new government will change a little bit because what is funny is that the basic research community focused on cannabinoids is huge in Spain. We have a Spanish cannabinoid research society with more than 200 members, and it is probably one of the biggest in Europe, and there are a lot of groups, not only ours, but a lot of groups doing very good for clinical research and a lot of them on medicinal uses of cannabinoids. But for reasons that I really don’t get medicinal cannabis is not a question even for our politicians.

Matthew: Well how can listeners learn more about your research you’re doing there?

Cristina: Well we publish our papers in the regular scientific journals. So in websites like PubMed which is an NIH resource, public resource. You can find our publications. We have a small and pretty humble website, our group, where you can also find our publications and the things we do. And that’s basically it.

Matthew: Can you give out your website for people that want to visit?

Cristina: Actually it’s a very complicated name. But if they find my name Cristina Sanchez with no “H” and Cristina in cannabinoids, they will find the website very easily.

Matthew: Very good. Well Cristina thank you so much for being on CannaInsider today and educating us. We appreciate it.

Cristina: Thank you very much for your invitation, thank you.

Matthew: If you enjoyed the show today, please consider leaving us a review on iTunes. Every five star review helps us to bring the best guests to you. Learn more at www.cannainsider.com/itunes. What are the five disruptive trends that will shape the cannabis industry in the next five years? Find out with your free report at www.cannainsider.com/trends. Have a suggestion for an awesome guest on www.cannainsider.com, simply send us an email at feedback at cannainsider.com. We would love to hear from you.

Join CannaInsider For FREE & Receive
The Five Disruptive Trends Shaping The Cannabis Industry Now
Page 20 of 37« First...10...1819202122...30...Last »