The Top Stories in Cannabis Trending Right Now with Alex Halperin

alex halperin of weed week

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Matthew: Hi, I’m Matthew Kind. Every Monday 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(dot)cannainsider(dot)com. That’s www(dot)cannainsider(dot)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(dot)canninsider(dot)com/consulting. Now here's your program.

Today we’re going to discuss the latest and most important stories in the cannabis industry. To help us on this journey I’ve invited Alex Halperin to the show. Alex is a freelance business and cannabis reporter based in Denver. Alex’s work has been published in the New Yorker, Mother Jones, Fast Company, Fortune, Al Jezeera, Business Insider and Rolling Stone. Alex has launched Weed Week, a newsletter that captures and distills the week’s most important cannabis news in a brief and digestible format. Alex, welcome to CannaInsider.

Alex: Thank you so much for having me.

Matthew: Alex before we get started can you tell us a little bit about yourself, your background and how you got involved in the cannabis industry and writing about the cannabis industry?

Alex: Sure. So my background is mainly in journalism. I’ve worked for Dow Jones and Business Week and so on, and as a freelance reporter for a bunch of different places. I was working as a freelancer in 2014 and I had written one story about the industry for Fast Company, and then they were nice enough to send me to the big conference in Las Vegas in November and I was coming from New York and I was just blown away by what a big deal it seemed like it was going to be. I thought wow, and I instantly was fascinated by there’s so many different avenues and issues involved. Everything from culture to the shadow economy that’s grown up around the industry that sort of mimics the real economy and some of the people involved. And I thought wow this is the business story of the decade. So I moved out to Denver in March 2015, a little more than a year ago and since then I’ve been writing about the industry for various publications and that’s what brought me here.

Matthew: Got it. And what’s Weed Week?

Alex: Weed Week is a weekly newsletter that I started last summer and what it tries to do is in the industry there are so many different aspects. There are legal aspects. There about business aspects, political. Political especially since it’s happening in 50 different states at once as well as in Washington. Culture, health, both the benefits of cannabis as well as potential dangers of it. So I wanted to put together a newsletter primarily for people in the industry or people who are interested in the industry that would really capture everything that’s going on in the industry in a digestible form and with links to articles so that readers can find out more about the stories that particularly interest them or apply to their business. Subscriptions are free and confidential and you can subscribe at www.weedweek.net.

Matthew: Great. Well I know your Weed Week newsletter for the week comes out tomorrow. Is there any stories we can go over now with listeners?

Alex: Sure. It was a pretty interesting week and I think pretty illustrative of how cannabis news is everywhere. So one interesting story comes from Rhode Island where a Catholic bishop who is opposed to legalization feared that it would turn people into zombies. Rhode Island is a Catholic state and it’s also a state that’s seen as one likely to legalize soon so it carries some weight. What I think is interesting about this story is it sort of shows that while there are compelling arguments for opponents of cannabis to make, a lot of them come from different fields. Some for Watch Out for the Children, some for health aspects, some have an aesthetic distaste for it. The bishop seems to share all three, but what’s interesting is there is still a fair amount of opposition in this country, but it’s really not a unified movement.

The groups that oppose it generally have very little money and very little traction. So whatever valid arguments they might want to make often get buried or don’t get the attention they need. Oftentimes also, and this is certainly the case with the bishop, the opponents aren’t really up to date on what’s going on in the industry so regardless of the validity of their concerns the optics aren’t necessarily very effective to promote their agenda.

Matthew: I’ve got the story up in front of me right now. It actually almost feels like it could have been in the Onion or something, but it’s from the Cannabist and it says Rhode Island’s Roman Catholic Bishop Thomas Toban, that’s his name, he’s worried people will become “zombie like”, completely stoned, filling public places. Now this is something that’s really strange. When I talk to people that have not visited a recreational state where recreational cannabis is legal they have this image in their mind of oceans of people stoned out of their mind hanging out together. Every day, like they’re just going to arrive in Colorado and just going to be oceans of people all stoned, staring at the not stoned person as they arrive. It’s really funny.

Alex: Yeah, no absolutely.

Matthew: And the article ends it says, “The bishop was disturbed by a recent report of a woman smoking pot in the back of a cathedral during a morning service.” So maybe that’s what got his hair up. Who knows. He does say one interesting thing in this article and I’m glad you have this in here. One thing I thought that was a valid point is the technology has the young people so engaged. They’re head’s down and they’re not even living a real life. They’re so consumed by the digital world. And recently going to San Francisco, I mean you see it everywhere in every big city in the world now, but some cities adoption is just higher than others. And in walking around San Francisco I was really like wow we’re kind of merging with these machines that are supposed to be serving us. They’ve totally captured our attention. A lot of us can’t go five minutes without getting a little fix, like a little update of what’s going on. That point, I thought that was a pretty good point he made about that. The technology probably could be more of a threat than the cannabis in that way but I did feel like he did deserve some recognition for that one point.

Alex: Sure absolutely.

Matthew: How about any other stories in Weed Week this week?

Alex: A fun, not a fun story but sort of an interesting story was that in Colorado it turns out, at least in one county near Denver, probably fair to say in other areas of Colorado as well, there’s been a big uptick in dogs getting sick because they ate marijuana or ate some cannabis or ate some edibles or something like that. It says it’s rarely fatal but there’s a tradition I guess blowing smoke in a dog’s face and watching him sort of stumble around a little bit. If you put some gummy bears in front of a dog, it’s going to eat them all and it could get very sick. So it’s an issue and sort of an unexpected one but an issue.

Matthew: Yeah especially since dogs have no throttle. Like oh I’ll just eat this whole thing, whatever it is. I wonder though if it’s one of these situations that you can’t hear the dogs that don’t bark. I don’t know if you’ve ever heard of that expression, but when cannabis was illegal in Colorado it’s like people would probably be scared to report that because if my dog ate pot, that means I had pot. You know what I mean.

Alex: Yeah sure. I mean that’s actually you thought of as an explanation for the increase in humans visiting the emergency room as well. They’re not as scared as they would be in an illegal state.

Matthew: Yeah that’s a good point. Please keep an eye out for your dogs. Keep it locked up because no one wants to see a dog have a bad trip.

Alex: Yeah. Dogs and kids, keep it away from them.

Matthew: Yes. Okay anything else in Weed Week this week?

Alex: There’s an interesting story in the Atlantic, I think the headline is a little overdone, but it says “The Failed Promise of Legal Pot”. It’s an article about economics and it talks about why the black market is still in business, although in greatly diminished terms than it used to be in states like Washington and Colorado. The reason for is pretty simple, price. People who have sort of street dealers often pay less for it. And there are different ways that states can try and break the black market. Both Washington and Colorado it says taxes but not very much. And as a result there’s still a gray area between the profit margins that legal businesses want and the profit margins that illegal dealers are willing to accept. And there were similar issues coming out of prohibition. Sort of a compliment to this piece was a piece in Buzz Feed which talked about a report from Colorado that came out a little while ago where it says that arrests, since legalization, arrests of black and Latino youth have actually increased. It plays to the racial disparities that have always accompanied illegal drug markets in this country and remain probably one of the most compelling arguments for legalization.

Matthew: Yeah. That is a tough dilemma. I think states are always loathed to, they’re like hey this is a golden goose. We don’t want to get rid of our tax revenue, but they can increase the base by cannibalizing the black market if they lower the taxes enough. Also the arbitrage opportunity with the medical cannabis because there’s no tax. It’s a tax free sale for medical marijuana in some places. So if you can avoid that tax you automatically have a double digit percentage cheaper cannabis than the rec cannabis so there’s an arbitrage opportunity there where you can go make a little spread if you’re a street dealer. So that’s definitely something. Gosh it seems like it’s a problem of both opportunity and there’s a lack of opportunity and then there’s an incentive for profit. Those are kind of the two driving forces. At least from my outside perspective. It’s hard to tell for sure, but it’s like how do you balance those.

Alex: Sure. One interesting thing about this article is that it did some reporting in Seattle and it hung out with a small time dealer who is also a dishwasher. And while it made clear that this isn’t the case for everyone, this sort of swinging a few bags of weed. It’s really not a very glamorous life although some people may think it is or aspire to it. He was doing this, he started doing it when his mom lost her job.

Matthew: Yeah, The Failed Promise of Legal Pot. You know I think about there’s this perception like when cannabis becomes legal everything isn’t perfect than the detractors say. There you go, especially in the beginning there’s kind of this balancing act, the working things out I feel like it’s kind of tipping over a Coke machine. You go back and forth a few times before you get it right.

Alex: Sure, no, exactly. There was also a chart I’ll bring up in the newsletter this week just on industry profitability. Since so many of the companies are private it’s really hard to get an idea of how much companies are making. It’s not necessarily a huge surprise but companies seem to be doing pretty well. And it’s the companies that report themselves to be the highest rate percent of being very profitable, ancillary services firms. Whereas dispensaries tend to be less profitable, but pretty much across the market companies seem to be doing pretty well.

Matthew: Yeah it’s interesting that everybody has this perception that once you get into the cannabis industry you’re just printing money, but the ancillary businesses do the best. I wonder if it’s because they have a lower risk, lower startup cost perhaps, not always but sometimes, and then the regulatory burden is way less because they’re not dealing with a controlled substance.

Alex: Exactly. I could say technically Weed Week is an ancillary services firm and I’m probably not profitable yet.

Matthew: So any other surprises on that chart where you felt like; so there’s ancillary services, cultivators, who else? What other categories?

Alex: Wholesale cultivators do pretty well because it sounds like they can basically be cash flow positive as soon as they start harvesting. I was a little surprised, I believe this data is all self reported so it’s hard to say what very profitable and modestly profitable is, but I was sort of surprised that infused product manufacturers seem to be doing better than dispensaries because if you’re making products you need all sorts of expensive equipment and there are pretty strict regulations. Of course there are regulations for dispensaries as well but it doesn’t necessarily involve the sort of machinery and fixed costs that manufacturers have to deal with.

Matthew: That’s true, but at the same time that is a little counter intuitive, but now that I hear you talk about it I’m thinking okay if you’re processing, you’re buying some cannabis wholesale, you’re infusing it with some fat of some kind like a butter or an oil and then you’re making something and then you’re selling it to a dispensary. So you don’t need a staff, a retail staff and you don’t need this big grow operation. So I guess that makes sense in some ways.

Alex: Yeah, no definitely.

Matthew: Well any other stories for Weed Week or is that a wrap?

Alex: Usually in the newsletter I get through about 20 stories in 1,000 words or so, but just one more I’ll bring up was a piece in the Guardian and it was picked up by Fortune as well about the so called ex-pots and these are people moving to Colorado from other countries essentially for medical reasons, for the same reasons that kids have; some American families have done the same thing when they have sick children. I think it’s a cool dynamic and it illustrates how the weird asymmetries in this industry lead to unexpected changes. I think that’s what makes this such a great story and why I’ve enjoyed covering it so much.

Matthew: Yeah that is an interesting trend with this cannabis refugee type situation. I interviewed a family from Australia that moved to Canada to support their two kids that had a degenerative lung disease and the only thing that could help them was cannabis oil but when they consumed the right amount they essentially became symptom free. The mom was saying I haven’t seen my kids like this in years and they were worried about going back to Australia, but it sounds like they’re coming around in Australia which is great but it’s like sometimes you can’t wait for that to happen and you’ve got to do something. It does frustrate me a little bit because it raises the question are we truly free people. If you can’t do what you need to get a plant that makes a massive difference in the quality of your life from a medical perspective, are we truly free. I don’t know. That’s a good question. I feel frustrated that we even have to ask that from like these gatekeepers. It’s a crazy thing.

Alex: That’s a big, big question.

Matthew: You’re right. One of the things I love about Weed Week is how brief, digestible and distilled it is. You really break things down into great bullet points and I do read it every week and I recommend it to a lot of friends. I forward it to friends and so forth. So you’re doing a great job with it. Two more questions before we wrap. Personal development type questions, Alex. Is there a book that has had a really big impact on your life where you look over the arc of time and you say looking back this really had a big impact in my life and I would really recommend it to CannaInsider listeners?

Alex: Well it’s not really a cannabis book, well it’s not a cannabis book but forms to some extent my journalistic sensibility which is Friday Night Lights which was subsequently made into a movie and then a TV show as well. It’s about a year in the life of a football team at a high school in West Texas and the reporting is so immersive. It’s about football but it also uses football as an entry point to discuss so many of the other issues of life in this rather desolate city in West Texas. It talked about race issues and class issues and sort of the ambition an all of these important things, and football serves as sort of a unifying node for the author, Buzz Bissinger the great journalist, to explore so many other things. That’s sort of how I think about cannabis. I kind of think in some ways the least interesting thing that happens to the football team is what happens on the field. And to some extent, to least interesting thing that happens with cannabis is what happens after somebody takes it. I mean from my view I think the most interesting thing is all the crazy dynamics that have surround the emergence of this legal industry.

Matthew: Yeah. Great points. I went to a football game in Texas. Being a northerner I went to one once, a high school football game about 20 years ago and I was absolutely floored at the scale and size and the athleticism of these kids because it almost seemed like a college or pro game. I mean it was a huge stadium, there was so much energy and enthusiasm I just couldn’t believe this was a high school game. I don’t know if anybody has had that experience going to the south for a football game but it’s really quite a spectacle. Pivoting to the next question, is there a tool web based or otherwise that you use daily or weekly and feel like it’s really indispensible to your life that you would recommend to CannaInsider listeners?

Alex: Actually the tool that’s indispensible for me to put together Weed Week is an app called Pocket and it’s just a way to save stories that I come across on social media and then at the end of the week I can go through the list of stories and put together the newsletter from them, but it’s just a great way to save things you want to read if you don’t have time right now to read them and you can also save videos or whatever else.

Matthew: Wow, I haven’t heard anybody else talk about Pocket but I use it daily. It’s this little icon that goes on your browser. If you see a story, you click on the Pocket, it saves into your Pocket account but also you have an app on your phone so when you’re out and about you can read it if you didn’t have time when you came across a story. But then there’s this other app that works with Pocket called Audiofy that I use and will take all of your Pocket stories and read them to you in this computerized voice while you’re walking around or doing whatever if you can’t read. I love Pocket, I love Audiofy so I’m glad you mentioned that.

Alex: Cool. Well Audiofy I will have to check that out.

Matthew: Yes it’s really cool. Well Alex as we close tell us one more time how listeners can find Weed Week.

Alex: Thanks so much for listening. You can get a free and confidential subscription at www.weedweek.net and the newsletter comes out on Saturday mornings.

Matthew: Alex thanks so much for being on CannaInsider and good luck with Weed Week.

Alex: Thanks so much for having me. It was a lot of fun.

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(dot)cannainsider(dot)com/itunes. What are the five disruptive trends that will impact the cannabis industry in the next five years? Find out with your free report at www(dot)cannainsider(dot)com/trends. Have a suggestion for an awesome guest on www(dot)cannainsider(dot)com, simply send us an email at feedback(at)cannainsider(dot)com. We would love to hear from you.


Key Takeaways:

[1:21] – Alex’s background
[2:49] – What’s Weed Week
[4:19] – Weed Week’s top stories of thew week
[21:15] – Alex’s book recommendation
[23:48] – Alex’s indispensable tool recommendation
[25:09] – Where to find Weed Week

Matthew Kind and Alex Halperin sit down to discuss the top cannabis-related news stories that are trending right now. Topics include; Which kind of cannabis businesses are most profitable, why dogs are eating more pot, A Catholic Bishop coming out against pot, and why the black market isn’t disappearing entirely in states where cannabis is legal.

About Alex Halperin:
Alex Halperin’s work has been published in the  NewYorker.com, Mother Jones, Fast Company, Fortune, Al-Jazeera, Business Insider and Rolling Stone. Alex has launched Week Week a newsletter that captures and distills the week’s most important cannabis news in a brief and digestible format. You can follow Alex’s work at: http://www.weedweek.net

Important Update:
What are the five trends that will disrupt the cannabis market in the next five years?Find out with your free guide at: http://www.cannainsider.com/trends

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