Ep 309 – Investors Are Helping Cannabis License Holders Access Capital

anthony coniglio new lake

Cannabis license holders are using an interesting new way to free up capital and grow their business. Here to give us the details is Anthony Coniglio of New Lake Capital Partners.

Learn more at https://www.newlake.com 

Key Takeaways:

  • Anthony’s background in real estate and how he came to start New Lake
  • An inside look at New Lake, a newly-formed Maryland real estate partner that leases industrial and retail properties to state-licensed cannabis operators
  • Why cannabis has been deemed essential across the country and how this is influencing investors and license-holders
  • Factors to consider when choosing the most valuable states and cities to buy real estate for the cannabis market 
  • How New Lake has raised $100 million in capital to build its diversified portfolio
  • How much New Lake’s investors can expect in returns and Anthony’s predictions for where dividends are heading in the next few years
  • What Anthony looks for when considering cannabis operators looking to lease his properties, from their business strategy to their ability to raise capital
  • How COVID-19 has affected the commercial real estate market in the US and where Anthony sees it heading
Click Here to Read Full Transcript

Matthew Kind: 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 cannainsider.com, that's C-A-N-N-A-insider dot com. Now here's your program.

Cannabis license holders are using an interesting new way to free up capital to grow their business. Here to help us understand how this works is Anthony Coniglio of NewLake. Anthony, welcome to CannaInsider.

Anthony Coniglio: Well, thank you for having me.

Matthew: Give us a sense of geography. Where are you in the world today?

Anthony: I am currently in Connecticut riding out the coronavirus wave.

Matthew: What is NewLake on a high level?

Anthony: We're a real estate company. We own 21 properties across eight states, and we're focused on building a diversified portfolio of retail and industrial properties that we lease to companies in the cannabis sector for use as dispensaries, as cultivation, processing, and manufacturing facilities. We acquire those properties using sale-leaseback transactions, and our tenants are some of the most experienced and well-run businesses in the industry.

If I had to summarize it, our business model is quite simple. We earn revenue by charging rent. Our investors receive a nice, healthy quarterly dividend. We believe there'll be significant appreciation in the value of our portfolio as the legal status of cannabis changes over time.

Matthew: Just give people a snapshot. You work with license holders, and you say, "Hey, I'm going to give you a whole bunch of cash for your real estate and lease it back to you. That frees up your capital, and that allows our investors to make money." That's pretty much it in a nutshell, right?

Anthony: That's pretty much it, yes.

Matthew: How much money have you raised so far?

Anthony: We've raised $100 million so far. We've been able to deploy a lot of that. We're out raising more capital today.

Matthew: I know we're all serious people here and serious investors, we're wearing collared shirts and you have sport coats on, but the moment you raise $100 million, do you just take some $100 bills and throw them up in the air and fall back on your bed and say, "Money"? Don't answer that question. It's going to make you sound unprofessional. Let's move on.

You've raised 100 million, that's great. Let's talk a little bit about what's going on in the general commercial market here for real estate. It's a bloodbath. There's malls, office buildings, general retail, commercial real estate. It's a mess because of COVID-19. Where are we at the 10,000-foot level for people that don't follow it day by day?

Anthony: I would say we're in the early innings, to use a baseball analogy. For me, I tend to believe that most of the early prognostications will be overblown as it relates to commercial real estate. For instance, I think the depth of the office is exaggerated. I've managed distributed workforces before. It takes the right person or the personality to operate remotely and maintain the same level of productivity.

I believe that this early enthusiasm that we've been seeing for remote working on both the employers and the employees side, I think that's going to fade. I think people want to be with other people. I think employers want to have their people around. Now, let me say, I do think that some trends have been accelerated for sure, whether it be retail or industrial real estate with respect to last mile and those types of distribution strategies. Yes, there's some of those elements that have changed. Perhaps there'll be some change in office, but I think we're still in the early innings.

I also think we're early because when you look at some of the defaults happening in retail or an office or even, to a lesser extent, in industrial, that's really only been from the shutdown. We're just now entering this recession. I think there's going to be a rolling occurrence of events that will further shape what happens from here. That's why I say I think we're in the early innings.

Matthew: You've carved out this niche here and a lot of people would be hesitant about investing in commercial real estate right now, but this very specific niche where cannabis has been deemed essential, it's a different thing. Investors can say, "Well, governments all across the country are deeming this essential, state governments, local governments." How has that affected the conversation and affected your business, both in terms of the license holders and the investors?

Anthony: You're absolutely right. It's amazing how things change in only 90 to 100 days. We're sitting here in a world where only 60% of retail rents are being paid. Shopping center REITs are collecting only 50% to 55% of their rents, and there's even probably upwards of 10% of office tenants aren't paying their rent. We're very happy with our hundred percent collection rate and our hundred percent occupancy rate. We think it's a testament to our disciplined underwriting and focus on diversification.

Yes, as you pointed out, our tenants did benefit from the essential designation, but there are some real estate platforms out there that focus on cannabis that are dealing with some delinquencies and default issues. Listen, we're not declaring victory by any stretch of the imagination, but we think the last three months remind us why we focus on diversification and why we emphasize sound underwriting practices.

Now, let me pivot a little bit to talking about that opportunity around COVID-19 and about how cannabis is a really different sector. While COVID-19 is taking a toll on-- actually taking whole all of us, our communities, our families, our friend or neighbors, and we're leading into the recession. As many of you are listeners know, this industry has really weathered the storm better than other industries, and not just because of the essential designation, but really, I've been so impressed with the way the industry has risen up in the face of this challenge, come together.

I think they've changed the perception at the state level, at the legislative level, at the regulatory level, and also in their community level. I think that's going to bode really well for the industry and just fuel that long term secular growth trend that the industry is in today. I'm pretty bullish on the opportunities in cannabis. I think the essential designation helps, but this industry is growing very rapidly, and it's just so exciting to be part of it.

Matthew: Not all geographies are the same in terms of cannabis. What states and cities do you think are the most desirable to buy real estate in?

Anthony: Well, you're absolutely right. While we look at opportunities in all markets across the country, we do like to focus on states and jurisdictions that have a more limited licensing regime. Examples of those would be Pennsylvania, Ohio, Illinois, New Jersey, Connecticut. Those would be just a few of those states that you see a more limited number of licenses being granted by the regulators.

Matthew: Limited licensing. That's key. That's the moat. Also, I would say difficult governments is a moat too, as perverse as that sounds. I think I'm thinking of Chicago and Boston, not calling you both out but I kind of am, difficult environments make it, so people are like, "Wow, I have to put up with so much dysfunctional government," that it's really a barrier to entry. Is there anything else besides limited licensure that you look at? Obviously, population is a factor, population density. What else do you think about?

Anthony: We definitely look at density. We definitely want to make sure that the properties, whether they're retail or industrial, we want to make sure we understand what the alternative use is for and what they could be applied to outside of cannabis. It's critically important to understand how you can mitigate your downside risk. In some of the deals that we see quite frankly, you have to zoom out 8, 9, 10 times on Google Maps simply to see another building. Literally, some of these are in the middle of nowhere. I don't know how they get power and water into some of these locations.

You're right. The limited license jurisdictions do provide that moat. It's a better operating environment for the operator, meaning hopefully they have an easier time generating cash flow and profit. There's intrinsic value in those licenses. If an operator does fall on hard times or is not able to operate the location to profitability, there's a long list of people who've been waiting for on-trade at the state that would be happy to step into the location and operate in. Therefore, we think those companies in distress would seek to monetize that intrinsic value in the license.

Matthew: $100 billion raised. When did you close your first acquisition?

Anthony: October 15, 2019.

Matthew: Moving fast here. If I'm a license holder listening right now, how does this work? Do I find real estate I want to buy then reach out to you, or do you buy real estate and then a license holder comes in? How does this work?

Anthony: In multiple ways. I will say what we don't do is we don't purchase a property and take tenancy risk or vacancy risk. We won't purchase a property and then go in and title it and then try to find an operator. Right now most of our transactions are where operators own the property and they come to us and they want to unlock capital and raise that non-dilutive capital to invest in their business. We will do a sale-leaseback transaction where they don't have to leave the facility, there's no interruption to the operations, it's all on paper. They sell us the property at the same time they enter into a long term lease with us. What we're starting to see more of and doing more of is a situation where an operator has identified a property they want to be in because it fits either their retail desires or their growing desires in terms of location, and they are securing a purchase agreement for the property. We will step in. We will assume their role in the purchase transaction. We will buy that property with our dollars and we will concurrently enter into a long-term lease with them. In that instance, the property never has to be funded by the operator, we fund it right from purchase.

Ultimately, over time, as the industry normalizes, I'd expect our dialogue with our tenants and other operators in the industry to evolve where we are bringing them properties that we think fit what their particular needs are. We will transact only after they've agreed that that's a particular property. We do see it in phases.

Matthew: If I'm an investor listening or even even a licensed holder and I'm thinking, "Is leverage or a lot of debt going to be deployed here, and does that put me at risk?" Can you talk about how you view leverage or where its place is, or there's no place at all for it?

Anthony: There is a place but there's, in our opinion, a very careful place for it. We think there's very attractive returns to be had right now without adding in the added risk of meaningful leverage. What we would want in leverage is a debt facility that had some term to it. There is no what I would call regular way refinance market for cannabis real estate. Quite frankly, that's part of the big opportunity here for us as a company, is banks aren't serving the needs in traditional credit providers and capital providers for commercial real estate, aren't serving the needs of the sector.

If we do layer in some debt over the near term, it would have to have three to five years of maturity. It would have to provide us some meaningful flexibility in order for us to get comfortable in taking on that type of risk. I wouldn't foresee it for a meaningful amount. On a $100 million, perhaps we might look to layer in $20 million. I think of that debt more as a bridge to additional capital raises than I do as what I would traditionally call structural debt, where we're leveraging a portfolio to drive a return.

Matthew: What kind of returns are you paying and can investors expect? You can only really talk for sure about dividends paid, and then this pro forma or it's, our best guess, based on where everything's at right now on a shifting landscape of probabilities. What's your best idea of where dividends are going?

Anthony: We've paid a 8% dividend yield quarterly for the last few quarters since we started purchasing our first building. We feel comfortable being able to pay the 8% dividend yield as we continue to go along. For our investors, the opportunity is not just to get paid the dividend yield. There may even be upside on the 8% given we think we could generate a net 10% after expenses for our company. Beyond that 8% to 10% yield, that's unlevered, we also see the opportunity to realize gains by getting a public listing of our company, and having our meaningful above-market yield with a long duration get valued by public market investors at potentially two to three times our book value.

Matthew: Well, that sounds juicy. People are like, "Hey, I can get these dividends, but also at some time in the future, there might be a public offering." No one knows the future, but how far out would that be?

Anthony: Well, right now what you're seeing in IPO markets are companies that would typically lead the way in this environment. Healthcare companies, tech companies, anything that plays into the theme of what we're going to continue to see around COVID for the next six months or so. Even Albertsons filed for an IPO last week. It's not for the next six months at least, it's probably a next year event at the earliest when the market is willing to consider non-down-the-middle, the fairway type of offering documents.

For us, we're going to continue to raise capital. I mentioned we're raising another 50 million of capital. We'll be at 150. We're going to continue to get our company ready to jump through that window of opportunity when it presents itself because we think not only does it provide liquidity for our investors and provide a potential valuation bump as well, but more importantly, in order to continue to grow our business, scale our company, we need to have access to a ready and deep pool of capital. The public markets are that deep, robust pool of capital that we would gain access to.

Matthew: If a tenant can't pay, for some reason, we kick them out, and then we start to sell tickets for a rave, right?

Anthony: [laughs]

Matthew: No, I'm just kidding. What do we do? It's, obviously, you're thinking that when you're looking at a property, you're saying, "Well, who else can come in here? What other industrial uses are? As you mentioned. Could have been used for something else? Obviously, you don't want that prospect, to begin with, of someone not being able to pay, so you look at their credit-worthiness, how well their business is going, talk about that a little bit.

Anthony: Yes. This is probably one of the most important things that we do. This is our entire business, and we would call it layered risk mitigation. It starts with understanding the operator, how they manage their business, how they run their business, what's their strategy, and, very importantly, what's their ability to raise capital. There are a number of people that can run a good business, but they don't run it well enough to be able to raise capital on it. That is critical because, in this industry where the industries are so dynamic, capital is so important, so one's ability to raise capital is important to assess.

Beyond that, clearly, we look at the balance sheet, we look at the P&L, we look at their projections. We further then look at the property itself and understand how critical is this property to the overall strategy of the business. Is this a tiny portion of their operations or is this mission-critical piece of real estate that they will need to protect at all costs in order to maintain their own cash flow. We go further to then look at the contract we have with them and building features that provide us additional protection, like security deposits and parent guarantees.

In many cases, non-traditional covenants that do give us the opportunity to understand what's going on at the property, what's the revenue being produced, what's the condition that it's in. Then we look at the alternative use. We understand if we're wrong on all of that, and you can't be right 100% of the time as much as we try, but if we're wrong on all of that, here's where the limited license state kicks in. For wrong on all of that, they just don't do a good job with it. There are many, many folks and companies that would love to enter into these limited license states. In that period of distress, we don't expect the operator to toss the keys, or to give up and risk losing that intrinsic value to the license.

In some of these states, licenses are trading for $8 million, $15 million, $20 million, over $20 million. We think the operators, instead of going dark for just giving up, are likely to sell that license, garner the intrinsic value of the license. Since the license is typically attached to the property in the in these limited license states, we then have a new tenant that will go in and operate the dispensary or operate the cultivation facility and pick up the cash flows. That layered risk mitigation is really important.

I guess then lastly, I should have mentioned, is understanding that alternative use. If, for some reason, we can't get a cannabis business to take over the lease and to step into the facility, making sure we're in a location that isn't in the middle of nowhere that has no alternative us but that there is a well-developed market in proximity to our location that we would have a reasonable likelihood of being able to redeploy to other industries.

Matthew: Is this only for the big boys like the MSOs, the multi-state operators? Who's the right fit for this type of scenario and sale buyback or the sale lease scenario? Is it only the big guys? Is there medium and also small guys, and how do they fit into this, and girls?

Anthony: It's a great question. We get it asked a lot. It is up and down the spectrum. We do have some large MSOs in our portfolio, names like a Columbia Care or Grassroots or PharmaCann. We also have a single-state operator. In the state of Pennsylvania, we think they're probably the best or one of the best cultivators in the state of Pennsylvania. Our property is nice proximity to Pittsburgh. Yes, we will do business with a single-state operator. We've looked at regional operators. Really, what sets businesses apart is management teams, their capital structure, their ability to raise capital. Then also something quite simple is audited financials. We've come across some folks who don't have audited financials, and as much as we want to trust people, as good stewards of capital on behalf of our investors, we do have to have an independent assessment of the assets and liabilities of the entities we're entering into a long term contract with.

Matthew: Sure. Just at a high level, what's the breakdown in terms of cultivators, extractors, processors, people that do all the above? How's the real estate broken down?

Anthony: Today we own 17 dispensaries and four cultivation facilities. When I look at the opportunity, I'd say the opportunity is across the spectrum. I think we'll need, undoubtedly, we will need more dispensaries across this country as the industry continues to grow. Undoubtedly, we will need more growth facilities across this country as the industry continues to grow. Then I think we'll start to see more and more processing opportunities, and then ultimately logistics properties. I'm really excited to watch all of those evolve and develop.

Matthew: The lease length. Are you pretty open to what the tenant needs, or are you looking at a certain duration for your investors? How does that conversation unfold?

Anthony: Duration and risk are key to that analysis. I would say that the retail leases tend to be a little on the shorter side versus the longer side, so there'll be under 15 anywhere from call it 12 to 15 years. On the cultivation side, they'll typically be 15, sometimes up to 20 years.

Matthew: Is there any kind of improvements that a tenant wants to do that you say, "Hey, that's not really going to be valuable in a secondary market. You want to put in a chocolate river like Willy Wonka like I don't think that's a good ROI investment." Do you get involved in that at all, or you just let them do what they want?

Anthony: Well, we certainly get involved because we own the property. We want to make sure we understand what they're spending money for that we ultimately will own, and again, mitigating risk. What we found to date, though, is most people are very, very responsible about what it is they're looking to buy. These are expensive facilities. Everybody wants to have a world-class cultivation facility, or a beautiful, comfortable, and inviting dispensary environment.

I don't want to say no expenses or sparred, but these are significant investments. We spent a lot of time understanding what those improvements will be and then quantifying how we could possibly recover those improvements relative to the market we're in. So far, it's been a very, very reasonable dialogue. We've had nobody that's wanted to install chocolate rivers yet.

Matthew: Too bad, lack of imagination, I say, but, hey, it's just me. Actually, if I'm consuming cannabis on a Saturday and I'm told that someplace has a chocolate river that I can dip a cup into and get a drink of that, I might go just for that.

Anthony: That sounds like a new cannabis experience theme park that you can start, man.

Matthew: Yes. Gosh, I'm thinking small. Thanks for pointing that out, Anthony. The tenants involved in the build-out, but as long as it's reasonable, you pretty much say yes. It's not like you're the business of saying no, you want to get as many sales as possible and people aren't doing anything outlandish, typically.

Anthony: Yes, that's exactly right. When you look at the revenue that's generated in the cannabis industry relative to other industries on a per square foot basis, we have some of this data where our properties generate approximately six times what an alternative use business would generate for those particular properties, and that speaks to, I think, what a lot of people who operate and invest in the cannabis industry are after. This is high-quality business with high-quality products that drives pre-tax that is, high-quality margins. We think that improves the risk profile of the business, and so if there are reasonable improvements to the property that can further enhance revenue, we're all for it.

Matthew: People are listening that either, a, want to connect with Anthony, their investor, and this sounds interesting to them, we'll get all of his contact information here shortly. Then if there's anybody that has a big or has a facility, and they're interested leasing it back and having to buy it, we can give Anthony's contact information out at the end of the show, as I mentioned, so we'll do that.

Before we do that, let's shift to some personal development questions here, Anthony. Is there a book that's had a big impact on your life or your way of thinking that you'd like to share with listeners?

Anthony: There are a few that just actually jumped into my mind if I could have some latitude and give you a couple.

Matthew: Sure.

Anthony: I put these in categories and I try to read a lot. One that really shaped me a long time ago and really sticks with me today around management is Straight From the Gut by Jack Welsh. Just really understanding how he brought management into the GE environment. I think Jack these days is becoming a little bit of a controversial figure nowadays past, but in any event, there is some unbelievable lessons in that book that have worked really well for me.

I've also managed businesses that have undergone change and there's a book that sticks out, Three-Box Solution, the author is escaping my memory but The Three-Box Solution, which really talks about how do you take a business that's somewhat mature and continue to drive profitability and cash flow from that while investing in the future and being able to give those new ideas the space and the capital to just stay and grow and become that new barn burning product if you will.

Then one just most recently that really is sticking in my head is a book called Range. It's gotten a lot of press, David Epstein. Really what that spoke to me about was this concept about being a generalist, and through my career, I've done a lot of different things, in my career. I've always questioned, boy, would I have been better being highly, highly specialized instead of being a little bit more of this generalist.

Maybe it resonates with me because it speaks to what I've done, but Range really, I think, was a great example of how-- Maybe it's not so good to be this highly, highly, highly specialized person and maybe we're more effective as business people and husbands, wives, friends, relatives, if we're a little bit more broader in what we do in our lives.

Matthew: You're the Swiss Army knife is what you're saying.

Anthony: [laughs] Without the edge.

Matthew: Okay. All right. What do you think is the most interesting thing going on in this field where you're just looking around and you're like, "Wow, I'm focused on what I'm doing here, but that's just, straight-up, interesting"?

Anthony: In real estate, it has to be this debate about how coronavirus will impact the real estate industry. I think it certainly will, but I do think that people are exaggerating what that impact will ultimately be. I'm a pendulum guy, which is to say that the pendulum swings back and forth, back and forth, and at certain times, it'll be higher in its swing then lower, but I do think at the end of the day, the pendulum spends more time in the middle than it does at its endpoints.

Matthew: I would say I would agree with you on that. I definitely think that way too, but I am challenged a little bit here because I think we're possibly in the midst of another secular trend. I don't know if you've ever heard that book, the Fate of the States by Meredith Whitney. She was a famous financial analyst years back, and she wrote this book about how these wealthy big cities in the United States, mostly on the coast, they have kind of peaked, and they'll come back at some point, but they're not treating their citizens well.

Places like New York City, where I've heard estimates that 60% of the operating side is still not even there in their homes, that might come back, but have these big cities in some ways peaked in that they're overtaxing and overburdening their citizens with property taxes, income taxes, and they're just straight up leaving? I'm guessing you're probably certainly connected? Are you in Fairfield County, Connecticut?

Anthony: Indeed.

Matthew: Okay, so here we go.

Anthony: I lived in Manhattan for 20 years.

Matthew: There's so many people, and I'm sure you know so many people too, that are in the Tri-state area of New York City, and now they are buying real estate and putting their center of gravity in Florida and spending six months in a day in Florida and like slowly minimizing their exposure to the Tri-state area because there's so much intellectual capital and actual capital there, but they're slowly minimizing exposure from these tax-sucking entities.

When I see someplace like New York City, I think the best of the best will always be there, but maybe people that run that, like marginally, they're saying, "Maybe I'll go somewhere else. Maybe I'll go to Boise, or maybe I'll go to Salt Lake City," or something like that. We have these two trends intersecting, which is kind of the secular trend away from these cities that are trying to extract everything from their citizens on top of the COVID response where people are moving virtual. Any thoughts there?

Anthony: Yes, I'll give you some thoughts on how throughout, what I see as a real wildcard in this dialogue and how it plays out. I think you're right at the margin. I think we all can have examples where somebody fled for Florida or somebody went to Nashville or somebody went here. You're right, a lot of the people from the Upper East Side are SoHo, certain parts of the city have been able to flee to other areas, either a second home that they have out of the city or maybe they rented a home out of the city.

Here's what I would say, cities have grown because they've provided something that people really want, whether it be the cultural opportunities, whether it be the experience of being with other people, whether it be education or jobs. When we think about the heartbeat of these cities, it's not someone that's at the point in their career where they could spend six months in a day in Florida and then come back to New York for their weekend trips, the heartbeat of these cities are the 25- to 50-year-olds and the people who are starting out in their careers and then starting a family and then developing a family.

They're there for different reasons. They're there for jobs. They're there for relationships. They're there to capture opportunity. I think that continues. Will we see, in my opinion, 5% maybe leave? Yes, I think we definitely could see that. Here's where I'd get to the wild card. The wild card is safety. Without getting political about what's happening in our country and the dialogue around defunding the police, well, I think city legislators need to figure out a way to thread the needle, because if they reallocate funds from policing in a manner that results in higher levels of crime, then I think all bets are off the table because I think people will vote with their feet in terms of their safety.

What you end up having, I worry about, is a self-fulfilling prophecy where as more people leave, there's less of a tax base and less of a service economy that's needed to serve those folks, which means there's fewer jobs, which just maybe only puts more pressure on it. To me, that's a real wildcard. I think we have to watch and make sure that the cities can manage the policing budgets in a manner that ensures that safety and crime maintain themselves at a level that has really drawn people back into the cities. My last thought on this, many people said, after 911, New York City was dead, and it came back stronger than ever. Yes, things are a little different here, but, again, sometimes yearly prognostications are a little exaggerated.

Matthew: Well, I really hope so because it's really a big jewel of the country and certainly people from all over the world look to New York City for a lot of different leadership, so I hope you're right. Here's one other question for you. You already gave me one thought that's counter-trend here. What's another thought that you have that most people would disagree with you on? That's a Peter Thiel question.

Anthony: [chuckles] For your listeners, here's another place where I'm a contrarian. I think all of this talk about the haves and have nots in the cannabis industry and there's going to be mass carnage in 2020 and everybody's going out of business except for a select few that are able to do this, that, and the other and there's going to be massive waves and consolidation and the landscape is going to look totally different by the end of the year, I don't buy it. I will say I'm being dramatic, but yes, for sure, there will be M&A, but there was a lot of M&A last year and there was a lot of M&A in the year before that.

Yes, there will be companies that go out of business, but there were companies that went out of business last year and companies that went out of business the year before. What I think will drive less of it is the fact that there's so much money sitting on the sidelines, and these businesses have such great promise that I do think there's enough capital to continue to provide a lifeline for some of those companies that are in the middle, that quite aren't there but they're not really dead yet. I think there's enough capital where people will be able to get enough of that lifeline to keep their business going, hoping for the better days.

Then the other thing is, I just wouldn't underestimate people in this industry. I think people in this industry are scrappy, they're smart. They're resourceful, and look at what they've been able to do to date. I don't think you're going to see a large part of this sector decide, "Well, I just can't make a go of it. It's too hard." I think they're going to figure it out to a large part. That's where I'm a bit of a contrarian. Yes, we'll have M&A, yes, we'll have some businesses fail. Will it be five x what it is over the last few years? No, I just don't see it.

Matthew: Okay. Well, you're an optimist, and I think it's a good thing to be. Anthony as we close, can you tell listeners how to reach out to you, a, investors. I'm sure it's accredited investors are looking for. Then, b, license holders, how can they reach out to you and see if they're a fit?

Anthony: Yes, accredited investors, for sure. For everybody, there are two ways that you can do it. You could either go to our website, which is newlake.com, N-E-W-L-A-K-E.com, and click on the info button and submit your information and one of the team will get back to you. We typically get back within 24 hours. Also, feel free to hit me on LinkedIn at Anthony Coniglio. I'm happy to respond to that. I prefer it all go through the website because it'll be easier for us to track it and make sure that everybody's getting the response that they deserve.

Matthew: How about if everybody just sends you funny memes on LinkedIn? Will that be good forever, not just for a couple of weeks.

Anthony: As long as I can resend them out, yes, I love funny memes.

Matthew: Okay. Well, Anthony, thanks so much for coming on the show. We really appreciate it. I think you picked a really good niche at a really good time. Lucky and right. I think those are two great things to have, two circles overlapping. Good luck with everything and keep us updated.

Anthony: Thank you. I appreciate the opportunity to chat with you, and I enjoyed our discussion.


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