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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.

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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.

A State by State Update on Cannabis Legalization with Kris Krane

kris krane

Kris Krane is founder and president of 4frontventures.
Kris gives us a quick executive briefing on legalization in about a 16 key US States.

Key Takeaways:
[1:39] – What is 4Front Advisors
[2:26] – Kris tells us about his background
[5:23] – Important updates on sixteen US States
[37:48] – Some additional state information
[42:23] – Kris talks about cannabis legislation in 2017-2018
[45:40] – Kris answers some personal development questions
[52:16] – Contact details for 4Front advisors

Learn more at:
http://www.4frontventures.com

Important:
What are the 5 trends disrupting the cannabis industry?
Find out with your free cheat sheet at:
https://www.cannainsider.com/trends/

 

Read Full Transcript

It’s getting difficult to keep up with all the different states and where they are in ending cannabis prohibition. That’s why I asked Kris Krane from 4Front Advisors to help us understand the changing landscape of cannabis opportunities across the United States. We’re going to try to put into context both the challenges and opportunities for each state. Kris, welcome back to CannaInsider.

Kris: Thanks so much for having me back.

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

Kris: Today I am actually on a farm outside of Hartford, Wisconsin.

Matthew: Nice. Big fan of Wisconsin. I think it’s not talked about enough. I think people kind of lump it in as a boring state, but I like it. I like Minnesota too. I’m going to go on the record saying it’s not boring. It’s fun to go to in the summer, and the people are super nice. They’re like the Canadians of America. They’re just nice.

Kris: It’s true. I spend part of my summer here in Wisconsin. A lot of good things to say about Wisconsin. Most of all it’s what gave me my wife. So, I’ve got a lot of in-laws and family out here. So we come and spend some time in the summer every year here. It’s quite beautiful.

Matthew: Now you were on the show once before, but for new listeners, can you tell us what 4Front Advisors does?

Kris: Sure. So, 4Front Advisors is actually a subsidiary now of our parent company 4Front Ventures. Through advisors we work with clients across the United States to first help them navigate the complex regulatory and application process in order to get their license. So, we help them through that application and licensing process. Then we provide them with operational protocols and policies and procedures, manuals and other tools that they use to run a professional, compliant cannabis dispensary business.

Matthew: So, you’ve been the cannabis advocacy business formally and informally for a long time. Just give us a quick background on Kris Krane and his cannabis career.

Kris: Sure. I actually got started in this as a freshman in college back in 1996, when I got involved with the Campus Normal Chapter at American University, which a couple years later became one of the first five SSDP chapters, Students for Sensible Drug Policy chapters. So, I was involved in the formation of that wonderful organization. From there I wound up interning, and then working for Normal in Washington D.C. I was the associate direction of the national organization and was there about six years. Then went back to Students for Sensible Drug Policy, the group I had been involved in the formation with in college. I was hired as the executive director of that organization where I served for four years. Really throughout the whole 2000s I was a professional policy advocate.

Then it was in 2009 I moved out to Oakland, California. I started working with Steve DeAngelo and some of the real luminaries of the Northern California medical marijuana industry at the time, just still fairly in its infancy. Helped start a company called Can Be, which we really developed a lot of the intellectual property and operating protocols that we still use today at 4Front. That company was a little bit ahead of its time. It lasted for just under two years, but out of it was able to start 4Front Advisors and later 4Front Ventures and some other subsidiaries of the company. I’ve always kept a strong foot in the regulatory and advocacy part of this issue. It’s where my roots are, and I think number one, it’s part of what’s made us successful at helping win so many licenses in competitive processes around the country because it really comes down to understanding how the regulations and how the laws look, in addition to being able to demonstrate operational competency.

Also this is an industry that is a state-by-state. We need to legalize for medical or other purposes in state after state, if we’re going to open up new markets. So, I feel like the business side of this industry is probably more tied to an advocacy movement than any other industry in the United States. That always keeps it interesting for me and makes me feel like I’m still contributing to the advocacy community in advancing the overall issue.

Matthew: Great. That sounds like a fantastic foundation, both from the advocacy point of view and then the business and compliance and regulatory and the opportunity. I want to leverage all your knowledge and your deep dives into all these states into kind of giving listeners a summary. Let’s kind of go machine gun through a bunch of these states and you can just tell us what you think the most important one or two things to know about where they’re at and what’s important to know about them. Does that sound okay with you?

Kris: Sure, that sounds great. Let’s do it.

Matthew: Okay, number one, Massachusetts. The politicians there are crazy. So, give us an update on Massachusetts.

Kris: Massachusetts is my current home state. Our offices are based in Arizona and Massachusetts, and I’m out of our Boston office, so been heavily involved in this one. So, Massachusetts did legalize adult use marijuana in the election in November. There is currently a medical marijuana program that is in effect. It has taken a very long time to roll out. So, as we speak, there are I believe 14 dispensaries open in the entire state of Massachusetts. There are, however, another 95 or so, 90 or so that are licensed by the state but are not yet open. They’re going through various local approvals or build out. We expect by this time next year we’ll probably see somewhere closer to 60-80 dispensary range throughout the state. That’s all on the medical side.

That program is finally moving along. It’s been slow, but it is moving. On the adult use side, it’s been quite a month or so in trying to get the initiative implemented. The state legislature decided that they largely know better than the voters and decided to make changes to the law that was passed by the voters last year. The house and the senate had very different approaches to how to do this. The house decided to completely repeal the law that was passed by the voters and replace it with something that was really largely based on the gaming bill, the gaming law in Massachusetts. The senate decided to make some amendments to the initiative, and largely keep intact the overall spirit of the initiative. The two sides spent about three weeks negotiating their differences, finally came to a conclusion last week, and actually wound up with a bill that, even the folks who were most heavily involved in the campaign could live with.

It’s very similar to what we passed. In fact in a couple of instances actually improves upon what was passed. In a couple of instances I would say it goes in the opposite direction, particularly raising the tax rate, but it did make some nice improvements. Especially around things like diversity and equality and equity in the industry that were better than what we were able to put into the initiative. So, that’s now being implemented. The state has until next April to start accepting applications for adult use businesses. There will be an initial preference for existing licensed medical businesses, but it will be a fairly short preference. So, it’s not like they’re going to get a couple year head start, as we’ve seen in some places. Whatever the medical license holders have done or medical applicants even have done in the application process to that point for a medical license will be credited towards their adult use license. So, that should allow for the adult use program to get up and running a lot faster than the medical program, and potentially even faster than the way it was written in the initial initiative.

We expect by July of 2018 that those licenses will be granted, or the first round of licenses will be granted. That is actually now in statute. So, we should start seeing adult use dispensaries, cultivation facilities, processing facilities fully operational in Massachusetts by the end of summer into early fall of 2018.

Matthew: Okay, so, this time next year we should be seeing some action.

Kris: That’s right. There’s a lot of staffing up and working towards that. The state has to create a new commission to oversee this, which will be under the Department of Revenue in the state, I’m sorry, the Treasury Department in the state. So, they have to hire those staffers and bring in the staff underneath them. So there’s a lot to do between now and then, but we should see this up and running by the middle to Q3 of next year.

Matthew: How about Maryland next? Can you give us an update there?

Kris: Sure. Maryland passed medical marijuana a year and a half or two years ago now I believe it was. It was definitely two years ago because they went through a fairly exhaustive licensing process for dispensaries and cultivation facilities. Maryland took longer to review those applications than any state that we’ve seen. The dispensary operators waited a year from when they put their applications in until the state made a decision on who to grant the licenses to. That was quite odd and frustrating for the applications in particular, those who were paying for real estate, hold on to real estate until they knew if they won a license. So, it was not only frustrating but expensive for many folks. They have granted the licenses. There are, I believe, 19 cultivators in the state. I’m sorry, it’s fewer, 12 cultivators in the state of Maryland and 90 and change dispensary licenses distributed throughout the state. Those have been granted. There have been some lawsuits filed by some aggrieved applicants, also a lot of controversy over the fact that none of the cultivation applicants when to people of color.

So, we expect that the state is going to grant a few more licenses here in the coming months to rectify that situation. In the meantime those folks that have licenses, and actually I was wrong before, it was 15 cultivation licenses, are now moving forward. A few of them have received approval on what’s called their Round Two. So, once you get provisional approval, then you have to go through another round with the state and some are now getting through that process. So, we expect to see dispensaries operational in Maryland, I would say most likely first quarter of 2018. It’s even possible that a few will be operational by the end of this year, although I think it’s questionable about whether there will be enough product to sustain a market that soon. Certainly by Q1 and definitely by Q2 of next year we’ll have a fully functioning medical marijuana program in the state of Maryland.

Matthew: Good. I hope some politicians in D.C. visit these dispensaries. Let’s move on to Pennsylvania. What can you tell us about Pennsylvania?

Kris: Pennsylvania is about six months or so behind Maryland. They just went through another exhaustive application process to grant their licenses. They ended up granting 12 cultivation licenses, and 27 dispensary licenses. Those 27 dispensary licenses each get to open 3 retail stores, and they have to be within their designated regions. So, Pennsylvania broke the state into six regions. You apply within that region, competed with folks in that regions and those who were granted the license are allowed to open three stores within that region. Then you have the 12 cultivators as well. It was a very competitive process, but we have not seen much in the way of controversy since those licenses were granted.

They were granted to a fairly diverse group of people and applicants. So, the state seems to be humming along. They have set a deadline, I believe of six months, for the dispensaries to be operational. I don’t think that’s realistic because I don’t think there will be enough product in six months, but theoretically we should have dispensaries open around December of this year into January of next year, but I think it will really be another probably three to more like six months before you have a fully functional program.

Matthew: How about Ohio?

Kris: Sure. Ohio is following a similar model. Ohio is a few months behind Pennsylvania in their process. They passed their law a few months after Pensylvania did. Ohio, about a month ago, accepted applications for cultivation facilities, cultivation/processing facilities. I should mention that both Ohio and Pennsylvania are what we refer to as no flower states. So, they don’t allow for the sale of smokeable products, although Ohio has taken a interesting interpretation of no smokable products where it seems like they are going to allow flower sales, as long as they’re not used for smoking. So, as long there’s some sort of warning saying this is for vaporization purposes only and they’re not sold in pre-rolls and the dispensaries vaporizing technology, it seems like they’re going to be able to sell flower. It’s an interesting model. It’s a little bit different than anything we’ve seen.

So, they have accepted applications for their cultivation. In Ohio it’s just cultivation facilities. In Pennsylvania it is cultivation and processing. They’ll be granting 12 large cultivation licenses and 12 small cultivation licenses. I believe the small ones are limited to I think it’s 6,000 square feet and the larger ones are limited to, I believe, it’s 32,000 or somewhere in the thirties. Expect those to be granted in a few months. In the early fall they’ll be accepting applications for processors and dispensaries. We’re still waiting for some more clarity on the number of licenses and how those are going to be apportioned, but we expect those to happen in the fall. So if all continues to go according to schedule, and so far it has in Ohio, we would expect to see the first stores opening probably second quarter of 2018, with a fully functional program likely sometime in the fall of next year.

Matthew: Okay. So those cultivation licenses are going to be very valuable if there’s only that limited number of them it sounds like.

Kris: Yeah, and we’re seeing that trend across these eastern states I mentioned. In Maryland you had 15 cultivation licenses. In Pennsylvania, you had 12, it’s a very large state. In Ohio you’ve got really 12 large licenses and those 12 smaller licenses. We’re seeing this as a trend throughout the eastern US where the states want to keep a handle on the number of cultivators, which does make these licenses incredibly valuable and then of course makes these application processes brutally competitive with applicant spending really large sums of money on lobbyists and consultants and security vendors and everything else to put in applications to hopefully give themselves a shot at winning one of these things.

Matthew: Yeah, you have a state mandated oligopoly in that sense. It’s a pretty nice thing to be. It would be much more lucrative perhaps to be in Ohio or Maryland as a cultivator than let’s say Colorado where it’s much lower barrier entry to be a cultivator.

Kris: That’s absolutely right. We’re seeing that now in a lot of these markets, and we mentioned those three, but I would also look at New York and Illinois and Florida as other states with similar restrictions on the number of cultivation licenses. In the cases of New York and Florida in vertically integrated licenses, and the valuations that these businesses are getting are pretty massive, even though they’re not doing a whole lot of revenue. We saw one the Florida licenses sell for I think it was something around $26 million. Those businesses have done virtually no revenue to date. Same in New York. One of the New York licenses sold for, it was reported, about $40 million in a program that had at the time I think 5,000 patients in a state of 20 million people. The license scarcity has created just ginormous valuations of these licenses even when the markets themselves are not really cash flowing. It’s all based on projected revenue, assuming that these licenses will stay protected as the program expands into a more robust medical program or even into some form of adult use.

Matthew: Okay, interesting trend. What about Arkansas?

Kris: Sure. So, Arkansas is gearing up to go through an application process. Technically that process has already started. The applications are due in mid September. In order to apply the company has to be at least 60 percent owned by a 7 year continuous Arkansas resident. So, they are trying to keep this pretty local. What we’re seeing is Arkansas residents teaming up with companies from out of state that have experience in the industry. They’ll be granting 24 dispensary licenses spread out around the state and 5 cultivation licenses. Again, that same trend. A very small number of cultivation licenses. This is a state of 3 million people, so it actually pencils out to the same number of cultivation licenses per capita as in Illinois where you have 19 cultivation licenses for a state of over 12 million people. So, expect, like we saw in Pennsylvania and Maryland and Ohio and most of these state, that the application process these five cultivation licenses and for the 24 dispensary licenses will be quite competitive.

Matthew: How about Nevada? It seems like there’s a lot of interesting things happening there right now. They are running out of flower I think, and I don’t know. Maybe you could catch us up on what’s going on there.

Kris: Sure. In Nevada they’ve had a medical marijuana program up and running for a few years now. There are, I believe, 55 dispensaries currently operational that were medical only up until a few weeks ago. In Nevada, in sharp contrast to say Massachusetts, where by the summer the state legislature was still considering how they could change the bill and hadn’t even really started implementation. In Nevada they decided that if these businesses that were already licensed medical businesses would just have to submit a fairly simple application, showing that they have been compliant, and they could then automatically convert to adult use businesses.

So, the first week of this month in July the state officially opened for business for adult use. All the dispensaries throughout Las Vegas and really throughout the state are now allowed to sell to anybody. The issue has been around their ability to stock their product and it’s less a cultivation constraint in that Nevada granted, I think, it was 180 cultivation licenses a few years back. So, there are a lot of cultivators in the state. There’s plenty of product right now, and a lot of them have been ramping up with knowing that this adult use program was about to come into effect. The issue with that under the adult use law, any marijuana moving from a cultivation facility to a dispensary has to be moved by somebody, with a company with a transportation license. This was not the case under medical, but it is the case under adult use.

Under the law only licensed alcohol distributors for the first 18 months of the program are allowed to hold a marijuana transportation license. What wound up happening was no alcohol distributors initially applied for one of these licenses. So there was literally nobody out there licensed to transport marijuana. What initially happened were the dispensaries, knowing that they were going to make this transition, and knowing that while they were still medical were allowed to transport themselves or the cultivation facilities were allowed to transport, they stocked up on what they thought would be a three or four month supply, knowing that there would be a legislative and legal battle over these transportation licenses. They have sold more than they have anticipated they were going to. So, those supplies are starting to dwindle.

The state initially passed emergency rules stating that anybody could apply for one of these transportation licenses. The alcohol distributors sued saying that was against the law and they won initially. So, the state legislature then had to pass emergency legislation allowing for new transportation licenses to be issued. In the interim two liquor distributors did apply for and were granted transportation licenses, so there now are two companies that can transport. We expect the state to start very quickly issuing more of those. By the time that initial supply the dispensaries stocked up on gets dangerously low, there should be these transporters in place to handle the situation. It has been an interesting one, to the point where Governor Sandoval signed a statement of emergency over the situation. It was misconstrued in the media as him having declared a state of emergency, which I thought was great. I hate to actually downplay that because the thought of a governor declaring a state of emergency because dispensaries are running out of weed is pretty awesome, but that’s not really what happened.

He did issue a statement of emergency, saying this is a real problem. We have a law that says that these businesses are allowed to operate. There are customers going to these businesses and yet because this quirk in the law there’s no way for them to get their product, and so that has allowed for these new licenses to be issued. It’s been kind of a fun one to watch. Thankfully within the next couple of months before this becomes a real state of emergency for cannabis consumers in Nevada the situation should be settled.

Matthew: Wow, a lot of moving parts there. How about Arizona?

Kris: So Arizona is an interesting one in that it’s probably, outside of California, the most robust pure medical market in the country. That’s about to change in California as well as they’re now starting to transition into adult use. It gets very little attention. Arizona has now granted something like 120 dispensaries around the state. These are vertically integrated dispensaries, but they are allowed to fully wholesale amongst themselves. So, you’ve got a really robust wholesale market with some really large scale cultivation facilities, particularly some that are coming online this year having some of the largest cannabis greenhouse in the country are in Arizona or going to be in Arizona. In fact there’s I think 40-some odd square acre greenhouse that’s currently in production. It’s not all built out for cannabis yet, but it can be and likely will be down the road.

So you’ve got a very mature market. You’ve got dispensaries that do very well. There is something like 130,000 patients now in the state of Arizona, so the medical market does really well. You had a movement of dispensaries from some of the more rural areas into the urban areas, so there’s higher concentration of dispensaries around the Phoenix area in particular, but also Tuscan and a little bit less so in Flagstaff, but that’s a much smaller area. You’ve got a really solid medical market. I think as California transitions to adult use here, we’ll be looking at Arizona as the most robust medical market in the country that is really largely flying under the radar.

Matthew: What about Florida?

Kris: Florida passed medical marijuana this past November through a ballot initiative with 70 percent of the vote. I believe it was the largest medical marijuana victory in a state to date. Washington D.C. I believe may have been a little bit higher, but they’re a city. The voters in Florida voted overwhelmingly for medical marijuana in that state. That program is currently being implemented, and it’s an interesting process because Florida has had a CBD law on the books for a while and there are already seven businesses that are up and running with cultivation processing facilities and dispensaries around the state that can sell CBD only or CBD only products. Those businesses are all going to be able to transition to now being full medical although under the enabling legislation that the state legislature passed they do ban flower sales. So, it is still all infused products and no smokable products. They’ll have the seven that are currently operational that are going to transition and they’re going to grant 10 more licenses some time this year. I believe the law says it has to be done by October 12th, although there’s a good chance that that gets pushed back. Five of those licenses will go to groups that applied in the first round for the CBD licenses and didn’t win. The others will go to people with agriculture experience to citrus grows and canners and to minority farmers, so it’s going to be quite competitive for those five additional licenses.

The way the system works is it is a fully vertically integrated market, meaning that everything you sell out of your dispensary you have to produce yourself. There’s no wholesale amongst those license holders, but they’re able to open I believe it’s up to 25 dispensaries each throughout the state with no limit geographically on where those can go. It will be a little while for this all to roll out, but by the middle of next year, to certainly late next year you’ll likely see somewhere in the range of 400 or so dispensaries operating throughout the state of Florida, operated by 15 to 20 companies.

Matthew: Okay. How about Maine? What’s new there?

Kris: Maine has had a medical marijuana program for years. Maine and Rhode Island are the two most established medical marijuana markets in the eastern United States. So, Maine currently has seven operational dispensaries, I’m sorry, eight operational dispensaries controlled by five companies or four companies, I should say. One of the controls I think five of the eight, if I remember correctly. They also passed adult use law in the November election. It was the narrowest of the victories that we had in November, but it did pass. They’re currently going through the process of implementing that as well. They’re actually moving a little bit slower than Massachusetts although it gets less tension than Massachusetts did for its dysfunction.

The governor of Maine, Paul LaPage, is (28.33 unclear) opposed to this program. He’s going to have to let it implement because it is now a law, but he may throw up some roadblocks here. There’s also an issue of how you integrate both the licensed medical marijuana dispensaries in Maine as well as the caregivers there, who is unlike Massachusetts or some other states, Maine has a very robust caregiver program where the majority of the patients, I believe, get their product from caregivers rather than from the existing retail operations. They’re trying to figure out now how you integrate those caregivers into the new adult use model as well as the existing dispensaries. So that’s all being worked out, but we expect that, similar to Massachusetts, certainly by late in 2018 there will be a fully functional adult use program in the state of Maine.

Matthew: Okay. And so they’re looking for the caregivers to perhaps play a part in that transition (29.34 unclear) part compared to…

Kris: That’s right. More than we’re seeing in other states. We’ve never seen in other states where somebody with a caregiver business is given any kind of preference in licensing for adult use. I think Maine is likely going to be the first state that does that. I don’t know exactly what that’s going to look like, but I think there will be some avenue for caregivers to also make a transition and participate in the adult use market.

Matthew: Okay. Connecticut is making a lot of headlines because businesses and wealthy residents just seem to be fleeing about what’s going on in terms of cannabis licensing there.

Kris: In Connecticut they have a medical marijuana program that’s operational. It’s a bit of an odd program in that they require the dispensaries be owned and operated by a licensed pharmacist, which I believe is the only state in the country to require that. They allow flower sales, but they require that it be pre-ground. So, you can’t actually sell flowers. You have sell little packets of pre-ground flower, which is not that appealing to a lot of consumers.

Matthew: How do politicians come up with this stuff? That’s really funny.

Kris: It’s very silly. So you do have these businesses that are operating. You’ve got separate cultivators and dispensaries. My understanding is that they’re likely going to allow a few more of those on the medical side in the coming months or the coming years. So there’s likely going to be another application process. It’s a relatively small program and the qualifying conditions are somewhat more limited than you see in some other states. Connecticut is one to watch because I think it’s a little bit more under the radar than some of the others that we’re hearing about, but I would put it in the list of states that are most likely to legalize for adult use through the state legislature.

Keep in mind to date all the states that have legalized for adult use have done so through ballot initiative. California, Oregon, Washington, Nevada, Maine, Massachusetts, Alaska, Washington D.C. have all done so by ballot initiative. Not one state legislature in the entire country has legalized through the legislative process, and there’s a real push in Connecticut to do that. I’ll give a shoutout to my colleague at 4Front, Sam Tracy, who also moonlights as the Connecticut State Political Director for the Marijuana Policy Project. With the work that they’re doing there, there is a chance that marijuana will be legalized in the legislature this year, as part of a budget process. If it doesn’t happen this year as part of the budget process, I think there’s a very good chance it will happen next year. So Connecticut is a real state to watch as one that could be the first, if not, will be one of the first of a handful to legalize for adults through the legislature.

Matthew: Okay. Let’s jump in to the neighboring states of Vermont and New Hampshire, but before we do is that any derogatory term people from New Hampshire call people from Massachusetts like yourself?

Kris: It believe it’s “Masshole”.

Matthew: I love that. Let’s jump into Vermont and New Hampshire real quick.

Kris: To be fair, I’m actually a native New Yorker, so I’m sure they call me far worse. New Hampshire has a medical marijuana program in its infancy. They have four licensed vertically integrated dispensary operations in the state. Not actually sure if any of them are up and running yet. I believe a couple of them are, but they’re very new and it’s a very limited scope program. New Hampshire did just pass decriminalization and the governor just signed that. So, New Hampshire became the last state in New England to officially decriminalize possession. They tend to be the most conservative state in New England. That is to say they probably would be considered fairly liberal in a lot of the center of the country, but they’re a little bit more conservative for New England. So, they’ll probably be the last of the New England states to legalize for adults, but they have made significant progress, both by implementing a medical marijuana program and acting a decrim policy just this month actually.

Matthew: Okay. Go ahead.

Kris: I was going to say, if you want to move straight into neighboring Vermont, Vermont also has a functional medical marijuana program. There are, I believe, also four operational dispensaries vertically integrated. They are in the process of an application process to license a fifth in the state for medical use it’s also a fairly limited program. The qualifying conditions are somewhat restrictive so that the program is fairly small, but it is operational and has been for years now. Vermont is one of those other states that I would put in the bucket of most likely to be the first to legalize for full adult use. They may in fact come back and do so this year. They actually passed a legalization bill, and I would have called for a study commission before full legalization that the governor vetoed. The governor gave very specific reasons for doing so, and so the legislature is debating coming back and passing something that would address the governor’s concerns. If that happens, Vermont would likely be the first state to do so this year, but the fact that they actually got something passed through both houses.

I’m sorry, it’s not going to happen this year, I apologize. I forgot just a few weeks ago they were unable to get it done in, I believe, the senate because of procedural vote, but they will be able to come back in January and pick right back up where they left off. I actually expect that Vermont is going to legalize for adults very early in 2018, which might make them the first. If Connecticut doesn’t do it through the budget process this year, then my money would actually be on Vermont to be the first state to do it. Although there are a couple of other dark horses, which I think we’re going to get to here momentarily.

Matthew: Okay, yeah let’s jump into those. How about Rhode Island?

Kris: Rhode Island is one of those other states that I would put in the list of potential first to do so through the legislature. So, you’ve got Connecticut, Vermont, Rhode Island and New Jersey would be my fourth and we can talk about that as well. Rhode Island has a fully functional medical marijuana program. There are, I believe, three operational dispensaries in the state. They also allow caregiver collectives to sell to dispensaries, although they’ve significantly scaled that back in recent years, and the state is currently going through an application process for addition cultivation licenses for smaller scale cultivators. I believe the largest license allows you to do up to 12,000 square feet. So, not small, but no 100,000 or multi square acre facilities.

So, there will be more cultivation capability online here in Rhode Island later on this year into early next year. Again, Rhode Island has long been looked at as a state that was likely to be the first to legalize through legislature. It looks like it’s not happening this year, due to some political squabbling, but I would still say it’s a fairly decent bet that they will do so at some point next year. I think Vermont will beat them out only because Vermont gets to pick up where they left off when the legislature reconvenes in January, whereas in Rhode Island there’s going to have to start again. So, it likely will take until a little bit longer in the year, but I think there is a very strong probability that both of those states, as well as Connecticut and New Jersey will all have legal medical cannabis for adults by sometime in 2018.

Matthew: Okay. Any other states you want to cover here? New York, New Jersey, D.C., in detail.

Kris: I think New Jersey is an interesting one to look at from this perspective. I mean, they’ve had a medical marijuana law on the books now for eight years. They have a functional medical marijuana program, but it’s a functional program that I would say is purely dysfunctional. It’s functional that it exists, but Governor Chris Christie has basically done everything he could to put road blocks up to this being a successful program. It’s taken a long time to get these operations up and running there. The qualifying condition list is very small, so it’s a very small number of patients. The interesting thing there is that you’ve got a legislature that seems to have a very healthy appetite for both expanding the medical program, as well as legalizing for adult use, but the only real impediment to that has been Chris Christie.

He said he would veto any legislation expanding access to marijuana in any form. That has been by far the biggest road block in Jersey. Thankfully that very large road block in every since of the word will be out of the state at the end of this year. He’s term limited out. I mean, even if he wasn’t, he would have zero chance of winning. I believe he’s the least popular governor in the United States. Is creeping close to being the least popular governor ever in the history of polling. I read a nice article about that a few weeks back. His approval rating is something like 12 percent. So, Christie is gone at the end of the year. The likely next governor, it’s widely expected that the democratic candidate, I think it’s Tim Murphy, definitely Murphy, is likely going to win the election this year. We don’t know for certain. Obviously it’s an election, but the polling shows that he’s got a massive lead.

He has campaigned in favor of full legalization. The legislature seems to want to do this. So, I think there’s a decent chance that when the legislature reconvenes with the support of the governor next year, that this is something that they might get done pretty quickly in Jersey. So, it’s one that I think has flown a little more under the radar because of Chris Christie, but that could actually wind up being the first state to do it.

Matthew: Okay, interesting. Anything else we missed there? Any other states or D.C. you want to talk about.

Kris: Sure, I mean Washington D.C. is a very interesting one to follow in that it has an adult use law that was passed by the voters. However, Congress I should say prevented D.C. from spending any money to implement the business side of it. So, personal possession is legal. Cultivation at home is perfectly legal. Gifting marijuana from one person to another is perfectly legal, but the state cannot license businesses to cultivate or sell. So, you have a functional and actually fairly robust medical marijuana market in D.C. You’ve got a number of dispensaries that are currently up and running in the city, but they cannot transition to adult use.

So, what you basically have now in D.C. is a genuine home grow market. Marijuana is everywhere in the district now. It’s easy to get, but everybody’s getting it from what’s really a gray market. It’s from home cultivators, and they can’t technically sell it, but they can accept donations or they can sell other products and then give away free marijuana. So, you’ve got this really large gray market that’s sprung up in D.C. that’s different than anything we’ve seen anywhere else in the country, and it’s actually kind of working. The consumers are able to access it. We haven’t seen a whole of crime associated with it because the grows are relatively small so there’s just not that much commerce involved. It’s kind of working.

I think if we ever see the democrats take control of Congress, that writer that prevents the districts from implementing a recreational market will go away. I think this is likely to stop that for a few years until we see a major change in the political control of Congress, because that’s who ultimately controls the budget for D.C., but in the interim you’ve got a very interesting gray market that’s fairly unique and unlike anything we see anywhere else in the country.

Matthew: Wow, that was a great summary. As you look ahead to the rest of 2017 and then into 2018 what are the big events you see on the horizon in terms of cannabis legislation?

Kris: What we’re looking at over the course of the next year, year and a half, I already mentioned I think the biggest news is going to be the states that will start legalizing through the state legislature. Again I look at Connecticut, Vermont, Rhode Island and New Jersey as the most likely targets to legalize through the legislature this year or next year. In fact, it’s more likely if any of them happen or all of them happen, it will be next year. So, those are the really big ones to watch. I think we’ll very likely see a full legalization ballot initiative on the ballot in Michigan in 2018, and if that makes the ballot, which it’s expected to do, I think there’s a strong likelihood that that’s going to pass.

Michigan has had a robust medical marijuana program in place for a while now. It’s been a semi regulated program to date. They’re now going through fully regulating and licensing these businesses in Michigan for medical purposes. So, the state’s used to legal marijuana commerce in the state, and so I think that makes it likely that that will pass in 2018, should it make the ballot. Again, it is expected to make the ballot. There is also potentially going to be a more limited medical marijuana initiative on the ballot in Oklahoma in 2018. There will likely be a medical marijuana initiative on the ballot in Missouri in 2018, which I think will pass, should that make it. Then there’s some other states that we may see legalize some form of medical marijuana over the course of the next year or so.

The one I have my eye sort of closest on is Texas. Texas is closer to legalizing full medical marijuana than most people realize. They have legalized CBD and actually just granted three licenses to businesses to cultivate and dispense CBD cannabis for some very specific illnesses. So, I think there’s a decent chance of the legislature in Texas will go a step further and enact some form of legal medical marijuana, full medical marijuana program. I doubt it will be as expansive as we see in some states, but I think it will be real when and if they do it. So, Texas is a real state to keep an eye on over the coming year, year and a half. Yeah, I think those are the areas that I would watch. There’s also potentially a medical marijuana initiative that may make the ballot in Utah in 2018. I don’t know how successful that’s going to be. I don’t know what kind of money is behind it, but I will look for a handful of states with medical marijuana initiatives on the ballot. Again, Oklahoma and Missouri being the most likely. Michigan being the most likely in 2018 for adult use. Then I think the real action at the legislature is largely going to be on those potentially new adult use states.

Matthew: Okay. That is a great summary. I appreciate that Kris. I’d like to ask you a few personal development questions to let listeners get to know who you are as a person a little bit better, if that’s okay.

Kris: Sure, absolutely.

Matthew: With that is there a book that has had a big impact on your life or way of thinking that you’d like to share?

Kris: Sure, I’ll stick with cannabis on this one, but really the drug war on this one, but there’s a book called Smoke and Mirrors by Dan Baum that was published in the mid nineties, and I think it’s still really relevant today. It’s a really good overview of the drug war but really sort of the movement to end the drug war, and it gives a really good history of how we got to where we are. Especially up until, and it really goes up to the late nineties when this movement really started to take off. I think a lot of folks see the progress that we’ve made over the last 10 years, in particular, and may feel like this was sort of achieved in a vacuum, but the reality is there were decades of work and advocacy that went into creating the foundation that’s allowed us to enjoy the success that we’ve had over the last few years.

So I would definitely recommend for anyone interested in the history of this, Smoke and Mirrors by Dan Baum. It was one that as I started to get into this really put everything in context for me, and really motivated me to be involved. Similarly there was a book called High in America, which is out of print now, but you can still get it on EBay. That’s really the history of Normal, but the history of Normal up through about 1980. So, it goes into even more detail about the early days of the marijuana reform movement. It’s really fascinating stuff. The early days of the reform movement in the seventies were a pretty wild time. You can read about marijuana reform parties at the Playboy mansion and reformers doing cocaine with the drug czars. I mean, there was all kinds of craziness going on back then. Parties with Hunter S. Thompson and just some really interesting characters involved back then. It also provides a really good context for how this movement got started. Where we were 40 years ago, and I think between those two books it really gives a good overview of how we got to the point when we actually started winning.

Matthew: Those are great books. They sound like great books. I haven’t heard of any of them so that’s great suggestions. Is there a tool, web-based or otherwise, you consider important to your day-to-day productivity?

Kris: My cellphone. I spend a lot of time on the phone. I spend a lot of time traveling so frankly being able to access my email on the phone, various programs are all helpful. I’ve really come to like Slack as a communication tool internally. We use it at 4Front. We have all our internal communications run through Slack, so I actually find that to be really helpful communications tool. For an internal project we also use Asana as a project management tool, both internally and with clients, and that’s also been I think a helpful tool, particularly when you’re dealing a volume of projects and projects with lots and lots of moving pieces, I found that to be a helpful one as well.

Matthew: How long did it take you, before you were using Slack and Asana kind of fluidly with your team and extended team, did it take days, weeks, months or is it pretty quick?

Kris: Well it took years but that’s more because we tried a lot of tools before we settled on the ones that we really liked, but we’ve been pretty steady with those now for a few years. It didn’t take very long. Asana takes a little bit longer because it requires some real training. Slack is very intuitive. I mean, it’s essentially a chat program, but a chat program designed for businesses. Asana takes a little bit longer to learn the program, but it’s fairly intuitive and it didn’t take that long for folks to integrate it.

Matthew: Okay, last question here. If you could share a joint with somebody living or dead, who would it be and why?

Kris: I’m going to say my father. My father passed away when I was eight years old. He was a medical cannabis patient in the last few years of his life. He passed away from a fairly rare genetic form of emphysema. We know today that cannabis is a vascular dilator. It helps open the lung sacs and draw air. He would have vaporized if he were around today, but that technology didn’t exist in the mid 1980s, but from everything I hear from my family, my dad’s side of the family, he was a really passionate advocate for this issue. He really believed in marijuana and the medical powers of marijuana. He believed in the healing powers. He believed in it as a force for good and a positive thing in his life and lives of people around him.

I was eight years old when he passed away. His story and having seen the impact that it had on him very young is a lot of what motivated me to get involved in this issue as I got older, but being so young at the time I never had an opportunity to sit down and talk with him about this and really get his views and how he’s developed. If I could, if the opportunity existed, would love the chance to sit down and share a joint with him and really talk through a lot obviously, because I never had a grown up conversation with my dad. If I’m sticking to this issue, to share a joint and really understand how he came to these views and how this fit into his world view, given that it’s been such a big motivator for me. His story has been a big motivator for me. There’s no way to really describe how meaningful it would be for me to have the opportunity to actually sit down and have that conversation.

Matthew: Wow, he certainly passed the torch of passion to you on the subject. I’m glad we got you working on it.

Kris: Thank you.

Matthew: Kris, as we close, how can listeners learn more about 4Front Advisors and connect with you?

Kris: Sure. So, you can check out our website. You can go to www.4frontventures.com. From there you can link to either 4Front Advisors, which I mentioned is our consulting business, as well as, to Mission Partners, which is our operational business. We’re now running dispensaries and cultivation facilities through that subsidiary. We actually just opened our first dispensary in the southside of Chicago just a couple weeks ago. We have other dispensaries that are branded Mission, our stores are called Mission. So, we’ll have other Mission dispensaries opening over the course of the next year. A few of them in Massachusetts, in Maryland, and in Pennsylvania. So, you can find out more about what we’re doing through both 4Front Advisors, as well as, through Mission Partners by going to www.4frontventures.com and you can click through to either of those websites. We also have a Facebook page for 4Front Ventures. You can just search that on Facebook and keep up to date on what we’re working on.

Matthew: Kris, thanks so much for coming on today and giving us a state-by-state snapshot. We really appreciate it.

Kris: Absolutely. If I can just do one quick plug before we go. For folks who are not familiar with Students for Sensible Drug Policy, I highly recommend go and check out www.ssdp.org, Students for Sensible Drug Policy I think is arguably the most important organization in the movement now, and there are some really awesome ones, so this is no knock on the Marijuana Policy Project, DPA, Normal or anybody else, but SSDP is the one that’s near and dear to my heart. It’s training the next generation of both reformers as well as leaders in the industry. They play a pivotal role in providing the ground troops so to speak and getting these laws passed. If it weren’t for SSDP, I wouldn’t be here today, neither would a number of members of my staff, a lot of members in the industry. Folks like Troy Dayton who started the ArcView Group came out of SSDP. Chris Lotlicker [ph] who hosts Marijuana Today podcast and is involved with a number of organizations came out of SSDP. I couldn’t have enough time to list all of the important folks in the movement and the industry who came out of that network. So, if anyone is feeling generous and wants to support a fantastic organization, without whom this issue and this industry wouldn’t be what it is today, go check out Students for Sensible Drug Policy at www.ssdp.org and offer some support. We’d really appreciate it.

Matthew: It’s like the big bang of cannabis advocacy with SSDP.

Kris: That’s absolutely right. That’s a great way to put it.

Matthew: Okay Kris, thanks so much.

Kris: Absolutely Matt, thanks again for having me back I really appreciate it.

Cannabis Geneticist Shares How To Have Thriving Plants

mowgli holmes

Mowgli Holmes, PhD is the co-founder and CEO of Phylos Bioscience in Portland.

Mowgli and his team provide fast affordable sex tests for cannabis plants and also offer plant genetics tests. Listen in as Mowgli shares his knowledge of plant genetics so you can have thriving plants.

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

Key Takeaways:
[0:55] – What is Phylos Bioscience
[1:20] – Mowgli’s background
[3:21] – Mowgli talks about sequencing the cannabis genome
[5:29] – Mowgli explains Phylos’s plant tests
[7:08] – Benefits of genetic testing
[9:48] – Accelerating plant growth to get more seeds
[12:47] – Misconceptions of plant science
[14:59] – Common questions about Phylos tests
[17:01] – Timeline of tests
[20:47] – Naming the cannabis
[23:43] – Matt throws Mowgli a hypothetical
[25:08] – Plant genetic sciences and testing in the next five years
[27:17] – Mowgli answers some personal development questions
[29:41] – Contact details for Phylos Bioscience

Important
What are the five trends that will disrupt the cannabis industry in the next five years?Find out with your free cheat sheet at.
https://www.cannainsider.com/trends

Read Full Transcript

Today’s guest is a geneticist bringing modern science into the cannabis industry. I am pleased to welcome Dr. Mowgli Holmes, cofounder and Chief Executive Officer of Phylos Bioscience to CannaInsider today. Mowgli, welcome to CannaInsider.

Mowgli: Thank you. It’s good to be here.

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

Mowgli: So, I’m at my company’s laboratory at the Oregon Health and Science University in Portland, Oregon.

Matthew: Okay. What is Phylos Bioscience on a high level?

Mowgli: We are a plant genetics company that works on cannabis. So we provide genetic testing and scientific tools to the cannabis industry.

Matthew: Okay, I want to dig in to what all that means, but give us a little bit of your back story and background. How did you get started in genetics science and specifically focusing on cannabis?

Mowgli: Me and my cofounder are from Oregon, and we grew up sort of in the woods in Oregon. Our parents were hippies and we’ve been around the cannabis culture in Oregon forever. He went away and became a business guy, and I went to New York and studied genetics, and then moved back in 2013. We got together. It was just the cannabis industry was exploding and had zero science, and it was pretty obvious right away that we were supposed to apply the genetics that I knew how to do to cannabis.

Matthew: Okay, so you’re trying to bring modern science to cannabis, and you want to bring what you know how to do to cannabis. What does that mean exactly, for people out there that are in this industry and are wondering what can Mowgli do for me?

Mowgli: All the modern agriculture is run on a lot of advanced science, and in particular plant genetics have transformed how we deal with growing plants in a bunch of different ways. We’re just bringing all of those over and applying them to cannabis. The first couple ways that we’ve been able to do that is we have some genetic tests that tell people things they need to know about the plant. Is it a male or a female? What is it actually? How is it related to everything else? What variety do you actually have? Then we’re starting to track down what genes control what traits and turning those into tools that will help breeders develop new kinds of plants.

Matthew: Okay. I can see where that could be very helpful. Just so we can get a little back story, we hear about sequencing the cannabis genome and things like that. You’re the right person to probably ask about where we are in that story and what’s important about it. Can you tell us anything?

Mowgli: Yeah, so when we started out we wanted to have a test that would let people identify their variety. So, we sequenced thousands of varieties in a collaboration with the American Museum of Natural History to understand the evolutionary back story of cannabis. We were using that dataset to offer this test that lets people finally figure out what they have and to let their customers know for the first time that they’re getting what they say they’re getting. We sequenced those thousands of varieties in a minimal way. We also took one variety and we sequenced the whole genome in lots and lots of detail, just the way they did with the human genome.

That had been done kind of sketchily before us. We did a much bigger, more detailed version and published it so everyone can work on it, but there’s still a lot of work to do on finishing the assembly and then learning to understand it. So, in terms of having full understanding of the genome we’re still really at the beginning.

Matthew: I mean, when that process is done you then said, it’s interpreting or understanding what that means, what the genome means and what it can do for you and what’s important to tease out of that. Do you have any kind of vision on what you think might be possible once that happens?

Mowgli: Yeah I mean, once we have the entire sequence, I mean, essentially every letter in the book that is the instruction book for cannabis, we’ll be able to start tracking down what genes control all the different metabolic pathways, and how all the different medicinal compounds in cannabis are created and how the plant grows. We’ll be able to make a mapping between different genes and different traits. All of that information will let us understand the plant better and it will also let us have incredible control over how we do breeding. We’ll be able to make very customized plants that have very customized medical properties.

Matthew: That sounds very exciting. Tell us a little bit about your plant tests.

Mowgli: So, the two tests that we have right now are plant sex tests, and we have a genetic identity test called Plylos Genotype. The plant sex test is simple. You order these cards from us, and we send them out and you smear part of the plant on the card. Right after it pops up and send it back into us. It’s totally legal, and we do a test called Quantitative PCR that we look for the white chromosome in the DNA. There’s DNA residue left on the card, so we pull that out of the card and we do this test and we look for the white chromosome. Then you get your results online the next day telling you which ones are males and which ones are females. As you know, growers who grow from seed need to get rid of those male plants in general, and it saves them a lot of time and money because they’re not watering and feeding and housing those male plants for weeks and weeks.

The other test, the genetic identity test is like 23 and Me, which is a human genetic identity test. It’s just applied to cannabis. It lets you see who you’re related to and what plant you really have. It’s really letting growers finally make a commitment to their customers when they give them something that this is what we say it is. Finally, you can always come back and get the same thing, if you find what’s working for you.

Matthew: As a cultivator or a grower, what do you think the biggest benefits are to having that genetic test like that available to them? What does that allow them to do?

Mowgli: So, there’s a lot of different pieces of science that cultivators need. These two genetic tests just touch on two very specific parts. If you grow from clone and you don’t care what you’re growing, these tests don’t help you at all. The sex test helps people who grow from seed. The genetic identity test helps people who really care about the identity of the plant they have and the promises they can make to their customers about it and about consistent medicine. In the future we’ll have tests that help people identify what traits their plants will have when they’re mature, just at the seedling stage, and that’s very useful to breeders. I think for growers in general the important thing about genetics comes down to knowing what plant you have. Eventually we’ll understand the genetics well enough to be able to say to people, you’re buying such and such a plant. We know from the genetics of this plant that it’s going to work like this and it’s going to have these traits and here’s how you should grow it, but we’re a ways away from being there yet.

Matthew: Okay. This is really helpful if you arrive at a plant that you think is perfect that you just want to keep on reproducing over and over again. Whereas if you’re making clones from a mother plant sometimes they can over time that there’s kind of this clone fatigue where the vigor of the plant is reduced somewhat, and so you want to be able to recreate that from seed over and over again. This is where you can say look, it’s not my guess. That is the exact same thing you had before that you were happy with. This is a genetic exact match.

Mowgli: Right, though I should say that right now the only genetic exact matches that we have are clones. So in the normal world of agriculture you can buy seeds that are genetically identical or they’re essentially genetically identical. For cannabis, if you buy seeds, they’re all unique snowflakes, every one of them. They’re all different. No one has ever made batches of seeds that are all identical. That’s why people grow commercial crops from clones, because if you want a homogenous crop or anything, you have to grow them from clones. All this genetic information will help us in the future make absolutely stable seed lines, which will be a big change in the industry.

Matthew: How can you accelerate the growth of a plant to get more seeds?

Mowgli: There’s a lot of ways to do that. Many of those things have to do with environmental manipulations. Also how fast a plant grows and how many seeds it produces are a function of genetics. By doing targeted breeding for traits like that, you can enhance them. That’s just a long, iterative process where you go through many generations of selecting for plants that have improved traits, and that’s what will happen. We’re going to see people go through that process over the next few years and plants are going to improve really rapidly.

Matthew: Yeah, when you say they’re going to improve. What ways do you think they’re going to improve, the most likely ways they’re going to improve?

Mowgli: I mean so many honestly. People have a tendency to treat cannabis as a widget that you’re just supposed to make a lot of and sell. It’s a living organism, and it’s evolving. Humans know how to make plants evolve really rapidly. The truth is that the cannabis around now it seems great. It is great, but it’s not going to be around in five years. It’s not an optimized crop. It’s never been subjected to professional plant breeding. So, in five years we’re going to have plants with optimized cannabinoid and terpene ratios. We’re going to have plants to flower earlier. We’re going to have plants that are higher yielding, plants that are easier to harvest. All of the different traits of cannabis that we care about, and there’s many of them, because it’s such a Swiss Army knife of a plant. All of them are going to be optimized and combined, and we’re going to have plants that are pest resistant, which we just don’t have now in cannabis. So there’s going to be a huge change in how things work.

Matthew: Gosh, that will be incredible, just think about that.

Mowgli: Let me put it this way. Right now cannabis seems amazing, but we’re going to be smoking absolutely out of this world pot in five years that we could never have dreamed of.

Matthew: Great. Something like a Elon Musk artificial intelligence designed pot that’s from the future.

Mowgli: That’s right. We’re going to make the plant naturally, but we’re going to design the breeding program on the backend with Elon Musk wired up to an artificial intelligence machine. That’s right.

Matthew: Do you ever talk with cultivators or business owners and discover they might not be thinking about plant science correctly in particularly how it can help their business. Maybe they have some misinterpretations or some notions that are just not the proper lens to be looking at plant science.

Mowgli: I mean, I assume that’s a rhetorical question.

Matthew: I guess do you see trends in their answers that you can summarize?

Mowgli: Yeah I mean, this is an industry that has not been run on science. It’s been run on legend and lore and just the wacky accumulation of social knowledge on internet forums. It just hasn’t been based on science. So, all kinds of little factoids that aren’t true get enshrined into how people do things. So, that is changing rapidly. There are thousands of growers out there who are using pesticides who don’t even realize they’re using pesticides. They think they’re not using pesticides. They’re like this is a natural product. They just don’t know. There are people using pesticides who are talking about oh, you can apply this pesticide early on in the life cycle and then it will be gone. It just goes away. That’s not true in general, but rumors like that spread and they can often have really really dangerous consequences.

There are also lots of master growers who, even if they’re not thinking about the science right, they’re really tuned into their plants and they grow amazing plants. People are working from a really kind of superstitious and just rumor based approach to knowledge, and all of that is going to change soon.

Matthew: Now do you get any specific questions in regards to your tests over and over again where people are like hey—what do they want to know? How fast can I get this? What will it tell me? What other kind of questions do they have?

Mowgli: For the plant sex test at first people just thought you can’t identify the sex of a plant overnight. They just didn’t believe that you could do that. So, I think we went through a lot of time of just trying to prove to people well actually you can do it and here’s how you do it. That one was simple. The math was simple. It turns out that growers have never really done the math. They spend between $50-$80 per male from the time they plant it to the time that they call it. Just with light and water and nutrients and never mind space and plant counts. So, our test, we can get it down to below $10 and it just saves them a lot of money. So once that was demonstrated to people there were no more questions. We get orders for 5,000 and 10,000 seedlings at a time all the time now.

Matthew: Wow.

Mowgli: Yeah it’s just taken off. In fact we underestimated the market for the plant sex test. We did not realize how many people still grow from seed, which is great because clones spread diseases. They’ve given rise to the epidemic of pesticide use that we have now. Seeds spread diversity and they’re clean. We want the industry to go in that direction.

Matthew: That’s crazy. Are most of your customers in Oregon or California or where do they reside?

Mowgli: Most of them at the moment are in Oregon and California, as they should be. We have customers now in 26 states and 5 countries.

Matthew: Okay. So, when they go through, a seed seven days after germination, the seedling can be tested and smeared on this piece of paper and sent to you. Then once it’s sent to you, does it take a couple days and then once you receive it it’s a one business day turn around?

Mowgli: So, we say 48 hours from when we receive it, but we can often do 24. The plant genetic test, the genetic identity test, that is a much more complicated procedure. It’s a more expensive test. It takes a couple of weeks to turn around, and at the end you get a login to a place on our website called the Phylos Galaxy where you can see your plant in this three dimensional map with all the other plants that we have and you can see how it’s related to everything else in the population. That’s much more complicated and has a lot more science and data behind it. It’s way less simple than the plant sex test, but it also solves a huge problem in the industry, which is that no one has any idea what they’re smoking.

Matthew: How much do the tests cost, both tests?

Mowgli: The plant sex test is $15 for one. For bulk orders we can get it down well under $10. The genetic identity test, Phylos Genotype right now is $295 for one and we can get that one down for bulk orders too. Already there are dispensaries in Oregon that are sending letters to all their suppliers saying we’re not taking stuff anymore unless it’s been tested by Phylos, because they want to be able to promise to their customers that they’re getting what they’re being told they’re getting. Even if it’s a plant that is on its own in the galaxy and it’s hard to know what it really is and someone gave it a wacky name, we don’t have any other samples like it on the map. Then when you guarantee to something that they’re getting what you say they’re getting it might not be meaningful to them, but the important point is that they can always get it again. It’s a guarantee of consistency. In the past patients have struggled to find plants that work for them, and then when they find it they often can’t get them again. Now that’s over.

Matthew: Right. So it sounds like this is the doctors and the pharmaceutical industry said, one of the complaints about cannabis is it’s not repeatable. We can’t do math with this. We can’t decide one gram of this will produce this result because it’s not homogenized in terms of the output. And you’re saying even though it’s a botanical, it’s a plant, we’re getting closer to be able to do that exact thing that they’re complaining about and solving that problem.

Mowgli: It’s exactly that. If you think about all the reviews on a database like Leafly, you can click on a strain name, Sour Diesel and then there’s thousands of reviews of what it’s like. If you download all that data and you look through it, there’s no signal in the noise. The reviews are just all over the place. The reason is that those people are not all smoking Sour Diesel. They’re smoking tons of different things that got named Sour Diesel because there was a marketing advantage or a confusion. So, when we start to know okay all of these reviews or patient reports are associated with this genetically identified plant, all of a sudden people are going to be responding to the same medicine. Now you’re doing science and now you have a dataset that is meaningful.

Matthew: Okay. Is there going to be some names that are easier to come up with than some batch name or something. How do you do that? Do you say Sour Diesel Batch 134682 or something or how will that work?

Mowgli: It’s confusing. There’s a few different levels to that. I mean, if you look at the big Sour Diesel cluster on the Phylos Galaxy, there’s this huge cluster of Sour Diesel. There’s plants in there that have other names. We don’t need to make everybody change the names of their varieties to be correct, but we want people to know that that’s a plant in the Sour Diesel cluster. Maybe the grower had unique growing techniques and has made it a little different because of variation. Plants do vary from batch to batch. The mandatory chemical testing that plants have to get now captures that. What the genetic identity catches is all the other things that go into the identity of the plant, all the other hundreds of terpenes and cannabinoids, which are genetically specified. So even if one batch is a little bit higher in THC or a little bit lower in pinene, it’s always going to be basically the same, if it’s genetically identical. It’s going to be pretty close.

Matthew: Right, it’s just pretty much environmental factors perhaps that changed the outcome of the plant, if there’s minute differences.

Mowgli: So, thing about wine. The last thing you want is for all Sura to be the same. The whole point is it’s all different. You grow it in different ways, in different environments and it becomes different, but you want to know it’s Sura. You don’t want to walk in a wine store wanting Sura and then come out with some crappy Merlot that’s been mislabeled. When you get the Sura you want there to be interesting variation as well. So, I think people will start to think about it like wine. They’ll start to think about vintage and they’ll start to think about varietal, but they’ll also start to think about varietal and vintage and vintner and (22.50 unclear) and all of those things. So they’re all important.

Matthew: Let’s just do a hypothetical here. If you were tasked with being the breeder or master grower of a brand new cultivation facility and they wanted to make sure that we catalog and get our genetics right and everything. Just a lot of grows are just not even very organized. How would you go about kind of creating the ideal setup in terms of cataloging the genetics of your plants and over time kind of looking at things to make sure that you can go back to any point in time and make sure you have the proper genetic fit for what you’re trying to do?

Mowgli: Let’s assume you’re a grower and not a breeder and you’re just trying to organize the catalog that you’re bringing to market. We have a lot of grow operations now that have decided to genotype their entire catalogs. What you want is you want a diversity of offerings. One funny thing that we keep finding is that people often are running a couple of different varieties that actually turn out to be the same thing and for no reason. They got a whole other room running this other thing that they thought was different, but they both turn out to be the same. Someone made a mistake at some point and they’re just the same.

So, it lets people fix problems like that and it lets people kind of look and they can look on the map and they can say well I’m running these two or three varieties that are so similar, even if they’re not the same. I think I can safely get rid of two of those. I think it just lets people most importantly make a promise to their customers. Secondly I think it makes it easier to get organized around having the right diversity of offerings.

Matthew: We talked a little bit about where things will be in the future, but is there any other thoughts about where you think plant genetic sciences and testing will be in the next five years?

Mowgli: Yeah I mean, I think the things we talked about in the future are going to happen really really fast. I think that in the future people will always know what plant they have. I think genetic testing will be ubiquitous. I think data driven plant breeding will be ubiquitous. I mean we’re going to have an explosion of knowledge about the cannabis plant and the cannabis genome just in the next few years. I think the time that growers are going to be growing incredible stuff and we’re all going to be smoking pot that we never dreamed of. I don’t think that’s ten years out. I think that’s four years out.

Matthew: Where do you go to keep on top of all the developments in plant science and genetics? Is there any websites or is it universities? I mean, how do you keep on top of latest here?

Mowgli: In cannabis there’s no good place for that. In the plant science world we’re in the thick of the science. We’re reading journal articles. We’re talking with the scientists on our scientific advisory board. We’re going to conferences. We’re just keeping up with the cutting edge research that happens at universities. The scientific world hasn’t ever gotten very good at making what it does public or publically accessible. It’s out there in journal articles online and you have to know how to read that language, but that’s our job.

Matthew: Right. I like to ask a few personal development questions to help listeners get a sense of who you are on a personal level. With that is there a book that has had a big impact on your life or way of thinking? It doesn’t necessarily have to be within the realm of genetics. It could be anything.

Mowgli: I have a favorite book. It has nothing to do with any of this, but I will just tell you what it is. It’s a book called Gravity’s Rainbow by a guy named Thomas Pynchon, and I’ve read it 11 times now.

Matthew: Oh my gosh. Well give us a little brief of what it’s about.

Mowgli: You’re going to have to go and find out yourself.

Matthew: What a teaser that was. I’ll put a link in the show notes. Gravity’s Rainbow. That’s a good title anyway. So one more personal development question. Apart from your tests, is there a tool, web-based or physical, you use daily that you consider vital to your productivity?

Mowgli: Tool that I use, when I started this company I was a scientist. Now my job is to write emails, and Jess Kristoff, who is this incredible scientist who used to work with Craig Ventor, she runs the lab and it’s the tightest ship every. Alicia Holloway runs the data lab. She used to run (28.49 unclear) at UCSF. I can’t hold a candle to them. So my job is to write emails. So, yeah I have a tool I use daily that’s vital to my success. It is a very small bright pink computer. I think at this stage of the game, computers should be really small and pink. I have one now and I love it.

Matthew: Anything behind the color choice there, or were you just feeling particular flamingo-like that day?

Mowgli: It’s one of these new Mac Books. It weighs like a quarter of a pound. Of course I got the pink on. I mean it just seems so obvious.

Matthew: Okay. Mowgli, in closing how can listeners find out more about your tests and connect with you and send in samples and just learn more about you in general?

Mowgli: There’s a ton of stuff on our website. They should just dig around on our website. There’s a contact form there. The Galaxy is there for everyone to play with. It’s really fun, especially if you’ve been smoking pot, to zoom around in the 3-D world of the Galaxy.

Matthew: Okay, and can you give out your website one more time?

Mowgli: Yeah so actually I wish this wasn’t true, but our url sucks. I’m going to say it really slowly. It is www.phylosbioscience.com. If you Google Phylos or Phylos Galaxy, it will take you right there.

Matthew: Okay. Well, Mowgli thanks so much for joining us today and educating us about cannabis genetics, plant genetics and science. I really appreciate it. A lot of exciting stuff coming up, and I encourage everybody to reach out to Mowgli and Phylos Bioscience if you have test and want to know anything about your plants genome or the sex of your plants. It sounds like a very good operation, and I wish you all the best Mowgli, good luck.

Mowgli: Yeah, thank you. Thanks a ton.

Crafting Cannabis Brewed Beers & Distilled Spirits with Dooma Wendschuh

Dooma Wendschuh Province Brands

Listen in as Dooma Wendschuh co-founder of ProvinceBrands.com discusses how he and his team are creating cannabis brewed beer and cannabis distilled spirits. Dooma transitioned from the US Cannabis Market to the Canadian Cannabis Market because he saw more opportunity in Canada’s federally legal marketplace.

Interesting factoids about Dooma

He was the co-founder of the software gaming company that made the mega hit game Assasin’s Creed that has grossed over 5 billion dollars in sales

– His favorite book is The Hard Thing about Hard Things
– His favorite business tools are Slack and SmartSheet

Find Dooma at http://www.provincebrands.com
and on twitter at @doomadooma

Key Takeaways:
[4:23] – Dooma’s background
[11:02] – Dooma talks about the Assassins Creed game
[15:28] – Dooma talks about Ebbu and his transition to Province
[21:21] – Dooma talks about Province Brands
[32:54] – How do you feel the effects of a marijuana beverage faster
[34:02] – Dooma talks about dosage
[42:02] – Dooma talks about other ingredients in his drinks
[43:42] – Bringing Province drinks to market in Canada
[52:58] – Dooma talks about the fundraising process
[56:56] – Dooma answers some personal development questions
[1:04:13] – Dooma’s contact information

Important:
What are the five disruptive trends shaping the cannabis industry?
Find out with your report at https://www.cannainsider.com/trends

Read Full Transcript

Today we’re going to talk with an entrepreneur, Dooma Wendschuh, that has transitioned from the US cannabis market to the Canadian cannabis market and is making the world’s first beer and spirits brewed and distilled from cannabis. Dooma, welcome to CannaInsider.

Dooma: Thanks Matt. I got to say it is amazing to be back. To this day, I have people coming up to me and asking about the last CannaInsider podcast I did with you. It is just amazing what a phenomenal following you’ve developed and how many people are listening, and not just the number but the quality of listeners. It’s not that I’m surprised. You are one of a kind and one of the hardest working people in the industry. So, thanks again for having me. It is an honor, and I’m really thrilled to be back.

Matthew: Thank you Dooma. Flattery will get you everywhere. I appreciate that. Well, it has been a while. I think it was 2014 or 2015 since you were last on, but before we jump in to everything you have going on in your life, give us a sense of geography and tell us where you are in the world right now.

Dooma: Absolutely. I am standing in what will be the first country in the world to legalize recreational cannabis which is an amazing feeling. Do you know where that is Matt?

Matthew: Canada.

Dooma: That’s right, and a lot of people think it’s Uruguay, but the difference is in Uruguay they legalized cannabis for recreational purposes, but you have to be a citizen. Canada’s legalization will be for anyone who is of age, which is a huge deal. That opens it up to tourism and to a whole lot of different uses that you won’t see in Uruguay. It’s really changed everything. You have been following I think a lot more than a lot of the other US focused podcast and the media outlets. I know you’ve had Mark Lustig on your podcast and John Fowler of Supreme, and Brockstein who covers the cannabis industry better than almost anyone in Canada, although he’s from Texas. It’s been amazing to be here in Canada seeing an unparalleled growth in the industry. I mean Canada has a population of 36 million people. It’s one of the largest legal exporters of medical cannabis in the world, and I don’t know if you say, but there was this study that Deloit recently did that predicted that the size of the legal cannabis market in Canada in just a few years could top $22.6 billion.

If you’re in the USA and you have a 50,000 square foot indoor greenhouse grow, that’s pretty big. In Canada there are companies that have millions of square feet of cannabis grow indoors. There are companies that have valuations literally in the billions of dollars and many that have valuations in the hundreds of millions of dollars. So, it is a truly unique place to be in the cannabis industry and a world leader. That’s where I’m located. It’s the only place in the world I’d be right now to be working in the industry and doing what I’m doing.

Matthew: Yeah, there’s a lot of exciting things going on in Canada right now. I really like the aspect that you don’t have to live with one foot still in the closet like you do in the US. That’s really a frustrating thing. I think the industry in the US could really leap forward if we had a policy closer to Canada’s, I think, with the exception of dispensaries are the only thing I think Canada’s missing in terms of how it could be better. That can be changed.

Dooma: Right, and we do have dispensaries here but they’re illegal, which is crazy. In America you get your illegal drugs from the drug dealer that meets you in the parking lot of the Rite Aid. Whereas in Canada you just walk into an illegal store and buy whatever you want from a thing that looks a lot like a US dispensary, but they are illegal, they’re raided all the time. They’re shut down all the time. It’s basically a criminal activity here in Canada. Whereas in the United States it’s at least state legal when people operate dispensaries.

Matthew: Give us a little bit about your background. I know you were on back in 2014 or 15, I can’t remember when that was, and there’s a lot of new listeners since then and they want to get a sense of who you are, what industry you came from, what were you doing before this and all those juicy details.

Dooma: I grew up in Miami, Florida, so I am American. Received my undergraduate degree from Princeton University. Did my graduate school at the University of Southern California. As most people do when getting a graduate degree from USC, I went into the entertainment industry. Started a company to make motion pictures. We were not very good at that. We sold eight movies to the studios. We only managed to get one of them made. I think it was just kind my age. I was 22 years old and I didn’t know how to get these celebrities to sign on to be in our movies. That’s what it took. I wasn’t getting invited to those parties. When I did meet a celebrity, which was very rare, I remember one time I was at a party at the urinal and Brad Pitt came and urinated right next to me at the urinal, and I was like, this is my chance.

I needed to have something really smart to say, but I didn’t think of anything and he just walked away and that was it. We didn’t really succeed in that industry, but we pivoted the company into the video game industry where we had a lot of success. We helped create some of the biggest video game franchises out there. My company is called Sekret Agent Productions, and the video game franchise that the company is best known for is Assassins Creed, which has now done about $6 billion in worldwide sales. It was a lot of fun. It was crazy. We worked on the first eight of those games. We also did Batman Arkham Origins, Army of Two and a bunch of stuff that didn’t make any money. Actually we did three games in the Prince of Persia series, so those made money as well.

It was a lot of fun. You become very close with the team when you’re doing these games. We were pulling 18 hour days, month after month and crunching and they become like a family. I really don’t think there was anything that could have pulled me out of the video game industry except for what eventually did, which was November of 2012, and I was living in Canada because we had an office in Montreal, but then another office in LA and I had more or less moved up to Montreal at that point. I was over at a friend’s house, and we were watching the US elections. Oh yeah, Obama got elected, but you know what else happened, marijuana was legalized for recreational purposes in Colorado and Washington. When I saw this I was like, whoa. Who knew this was happening. It was crazy to me.

I mean, I had know about medical marijuana, sure, but there’s medical cocaine and no one thinks cocaine is going to get legalized for recreational purposes any time soon. It just seemed so far off to me that this had actually happened. It kind of got me thinking, and when I thought back at my life, the moments that really mattered me weren’t moments where I’m sitting on a couch with a game controller in my hand. That was fun, but the moments that mattered to me all involved some kind of a psychoactive. I know I say that, I sound like a drug addict, but I’m the furthest thing from that. Think about it. Those video games, we never would have sold them if we didn’t have drinks with the publishers to get to know the publisher, to develop the rapport, you learn to trust people after you’ve had a couple late nights with them in a business setting.

We never would have made those games if it wasn’t for tons of caffeine fueling the workforce. Caffeine makes you a super human and people forget that’s a psychoactive as well. In college all my best friends are folks I met and sort of intensified those friendships often under the influence of alcohol and certainly the most important business deal I ever closed, which was asking the woman I love to marry me, would not have been possible without a good amount of Champaign. I believe that psychoactives provide a lot of benefit to our world. They break down boundaries. They do so many great things for people. I also believe that they have a lot of problems. With the legalization of cannabis, I saw an opportunity to perhaps bring about a better class of psychoactive. I didn’t know what it was, and we’ll talk about Province and sort of how my thinking has evolved since then, but at the time I was like, there’s something here. Because I knew, even back then in 2012, I knew what a lot of people still don’t know, which is that marijuana is not a thing. It’s not a single active ingredient psychoactive. It’s very different from the other legal psychoactives in our world.

If you look at the three legal psychoactives for social and recreational purposes, alcohol, coffee, tobacco. Each one of them has a single active ingredient. For alcohol it’s ethanol, for coffee it’s caffeine, for tobacco it’s nicotine, but cannabis has all of these different compounds. It’s basically a polypharmaceutical. There’s 144 phytocannabinoids that have been identified to date. There’s hundreds of terpenes and these individually in a different combination can create varying psychoactive effects. So, I wanted to see what that could be and how those things could create a better class of psychoactives. I ended up selling my shares in the game company in 2013, and using some of those funds to start my very first cannabis company, which was in Colorado. That’s kind of how I got into the space.

Matthew: Gosh, I just want to rewind for a second because Assassins Creed is like a household name at this point. I know they’re making that into a major motion picture I think.

Dooma: They did make it into a motion picture. If anyone out there saw it, I’m sorry.

Matthew: It was bad.

Dooma: It was so bad. It was so bad and it didn’t make any money. It’s hard. There haven’t been a lot of successes. The only one is Resident Evil. That’s the only success that’s ever been a successful translation of a video game into a motion picture. They’re different media and it is very hard to make that jump. I am really disappointed in the Assassins Creed movie but I wouldn’t say that I’m surprised.

Matthew: What captured the imagination of the public with that game? Do you think it was the narrative and production value or the quest? What is it that you think really resonated?

Dooma: Well, at the end of the day I think it’s a lot of things that my cofounder of that company, and I probably can’t take credit for, and I think the most important thing about making any kind of a business, but in particular a video game is it is a team effort. It is something you really rely on every person on that team and they all have to be working at top speed. I think the number one thing that made that franchise successful is not any individual element, whether it’s the story or the game play, but the sum of all of them. I believe, as an entrepreneur and as a business leader, that execution always trumps innovation, and Assassins Creed had a lot of innovation. Certainly the crowd system was way ahead of its time. The open world, the different aspects of the open world were very innovative, but the execution, it all hit together very well.

I think the execution contributed in a major way to its success, but I’ll tell you a little story about one element that I can take and that we can take no credit for that made it a success. The game was funded and published by UBSoft and they put someone on the team whose job it is is to make sure that this game is going to be marketable. This woman would go to all the meetings and she would give her feedback and input, let’s put it that way. At that time, what we had pitched, what UBSoft was developing and what we were making was a game that set in the Third Crusade. It was entirely a period piece. Keep in mind this wasn’t that long after 9/11 and you were basically playing an Arab, a Muslim guy and the bad guys are Christians. There’s a little bit of unease around that.

She kept saying, this woman kept saying we can’t sell this. No one is going to buy this game. Nobody wants to play a game where it’s a period piece and you play a Muslim and the bad guys are Christians. This is going to be a disaster at the Box Office. Can’t you put in some aliens, put in some science fiction. Let’s make it edgier so that we can have a hook and sell it. My cofounder, Corey and I, we fought this tooth and nail because keep in mind, we had just done three games in the Prince of Persia series. Prince of Persia is all about time travel. We were definitely not doing another time travel game because every time you go back into the past you have to change the future, which is so annoying. Then one of the guys on the team had read something. I think it was a short story that talked about genetic memory, and we were like okay, that could work.

That’s not time travel. You don’t have to change the future. You’re just going back and learning from the past and it was amazing because that little tweak is what made it so that every game in the Assassins Creed franchise did not have to take place in the Third Crusade, and that little tweak is what turned this from a single game that probably would have done pretty well, but not really had a following, into a worldwide know franchise that generated about $6 billion.

Matthew: Wow, maybe you could just summarize quickly what genetic memory means for people who don’t understand.

Dooma: Yeah, for anyone who hasn’t played the game, genetic memory is this theory that by analyzing someone’s genes, you can understand specific events that happened in their heritage before they were who they were. What we did is we imagined that in the distant future they would have a technology that could read your genetic code and would allow someone to effectively replay or relive moments from their own ancestry. So each Assassins Creed game takes place in a different time period and a different location because it’s all along the lineage, the ancestry of the main character, of the people who were his great grandparents, great-great grandparents, great-great-great grandparents and all the adventures that they had you’re reliving when you play those games.

Matthew: Speaking of going back through history, let’s talk about Ebbu and them Province. What was Ebbu, that’s what your endeavor was before Province, what you’re doing there and your transition to Province.

Dooma: That was a very good transition that you made by the way. I like that. Ebbu was the first company that I founded in the cannabis industry, and you have to believe me when I tell you that it was the hardest thing that I’ve done in my life, and I’ve done a lot of hard things. We started this in Colorado. We set out to raise $10 million. Keep in mind, we were doing this in the United States where cannabis is federally illegal, but also in Colorado where at the time, they had a residency requirement that meant that you could not own equity in a company unless you were a two year resident of the state of Colorado. That made fundraising a tremendous challenge, almost impossible.

On top of that, we had to solve one of the most challenging problems in the cannabis in the cannabis industry which was to try to make products, and eventually we succeeded at this, but to try to make products that when consumed would be both reliable and predictable. Cannabis is definitely unreliable. It’s unpredictable. You never know what you’re going to get. At Ebbu we made vapor pens and the company still makes vapor pens that every time you tried it you would have that same sensation guaranteed. The long term goal was also to make products that would predictably give everyone who tried them the same sensation. If you and all your friends tried it and it was called Energy, you would all have an energetic sensation when consuming cannabis. To do this we had to hire world class scientists, and it was hard.

I had a cofounder that wasn’t able to take the time off, take the risk to launch a startup, at least in the beginning. He was working a full time job, while I worked Ebbu full time, put my heart and soul into it. I barely slept for two years and whenever I did it was in airports. I was traveling the world raising capital and recruiting the scientists to join the team, and in the end my friends and family and people I’ve known since high school in some cases or college or in the case of my family, my entire life, came through and made investments despite incredible risk. We raised $10 million. We hired a world class team, including Dr. Linda Klumpers who is a world renowned cannabinoid researcher who now has her own startup that’s really exciting. It might be someone you want to talk to in a future episode.

More importantly, the company succeeded in creating phenomenal products. The Ebbu Genesis that’s out now is one of the best vapor pens on the market. It nearly killed me, but I am really proud of what we accomplished, and I’m proud of all of Ebbu’s success, although it did not end well for me personally. The crazy thing is I ran a video game company for 13 years. Was involved in some of the world’s biggest entertainment franchises. I never once got sued and I never once had to sue anyone, and I used to be so proud of that. I thought I was litigation proof, but I guess you can’t hide from it forever and if you’re an entrepreneur, as I assume many of those listening to your podcast are, then you haven’t been through it, it’s going to catch up to you. I never wanted to do anything to hurt Ebbu, as I mentioned, the investors are my friends and family, but I was put in a situation where I had no choice but to file an arbitration lawsuit, an arbitration against my cofounder and against the company. This has been what I’ve been dealing with the past year and a half.

The costs are approaching now half a million dollars of my own money and it keeps going. It’s incredibly expensive to be in litigation. It’s forced a company, which my wife and I own together, into bankruptcy. It’s been really hard, and the money is not the worst part. The worst part is just knowing that you’re basically, at least in my case, filing suit against something I help create. My friends and family who invested in the company, to be pitted against them is terrible. Most of them understand, obviously. I think whether I win or lose the major battle I’ve sort of already lost and a reason for the lawsuit is that there was information in large part not true that was leaked out to media sources and has done a lot of damage to my reputation and made it very difficult to start the second company, Province. It’s been challenge. It doesn’t matter in the real world whether you win or lose in a court of law. It matters a lot whether you win in the court of public opinion and I think I may have already lost in that court and that’s been the hardest to deal with.

So it’s been really rough, but it’s also a great learning experience. I was very fortunate for 13 years to run a successful video game company and to be able to exit that. My cofounder, that’s still one of my best friends and one of the smartest and most capable people I’ve ever met and to be able to have good relationships with him and it’s a good learning experience to see it from the other side and to realize things don’t always work out that way. When you’ve been through something like what I’ve been through you can certainly empathize with a lot of others who’ve had experiences like that. So anyway, thanks for letting me vent.

Matthew: I appreciate that Dooma. I appreciate you giving the details and some context there. That really helps people understand what happened, because we hear a little bit here and there, but it’s great to get some more straight from the horse’s mouth, and we wish you the best on that. I mean, that sounds very taxing on you personally, you and your wife. I hope that there’s a revolution soon. Let’s move on to the next chapter. Let’s talk about Province Brands. Tell us about that.

Dooma: Province is pretty unique. There’s really not a lot like it out there. We are one of the first products companies in Canada. What we’re making is something truly revolutionary. Imagine a world where there were no psychoactives. Just no one ever figured it out. No tobacco, no alcohol, no coffee, no anti-depressants, no stimulants, no anti-psychotics, none of that stuff. That world would probably be a boring world, and in a lot of ways it would be worse than the world we live in. Imagine that a flying saucer came and the aliens showed up and they’re like, hey humans, check all this stuff out and they gave us everything. Crystal meth, heroine, anti-depressants, anti-psychotics, coffee, all of these and they flew back into space.

Then it was up to the governments of the world to decide what are we going to do with all of this stuff that the aliens left behind. What will they decide. I’m pretty sure that there’s no way in hell that they would make marijuana illegal. They would do a cost benefit analysis because obviously a lot of these things have benefits. A lot of psychoactives are really important for treating ailments. Anti-depressants save people’s lives, prevents them from committing suicide. That’s a perfect example of a psychoactive that has a very strong social and individual benefit. I think they’d do a cost benefit analysis. I think they’d find that things like marijuana should be legal. I’m also pretty certain that when it came to alcohol it probably wouldn’t pass the test. I think it’s very unlikely that alcohol would not be legal.

Why is it that alcohol is a $1.2 trillion industry? It’s so huge. It brings people together. It enriches our lives in so many ways. It’s got this pass. A pass like a get out of jail free pass because it has been around for so long. You could think of alcohol as sort of being grandfathered in. Up until now there really hasn’t been anything which could be legal, which could be a substitutional product. Again, to go back to these hypothetical scenarios, imagine a world where that wasn’t the case, where alcohol wasn’t grandfathered in and maybe there was something different. Imagine what the healthcare costs would be like in that world. When you go to the hospital now you’re paying your bill, but you’re also paying for alcohol because you’re paying for the person who drank too much and crashed his car or the person he crashed it into. You’re paying for the person who is possibly gotten cancer. Alcohol causes eight types of cancer and it’s not if, it’s a when. If you drink alcohol and you live long enough, it will give you cancer.

Heart disease, liver failure, depression, dementia, it contributes to so many ailments and has such a burden on our society. I think a lot of people just look at this and say, that’s the way it is. Me, I’m an entrepreneur, and I think where others may just see a cold beer, I saw an opportunity to change the world. I knew right away that it wasn’t going to be with smoked marijuana, because let’s face it, nobody likes to step outside to smoke. I don’t think that product is going to go away, but it’s not going to be the thing that replaces alcohol. Besides, smoking marijuana isn’t all that good for you anyways. The rolling paper, if you’re making a joint, could be carcinogenic. It contributes to bronchitis and myocardium infractions, all these different things, pneumonia. It’s unpredictable. It’s unreliable. It’s very confusing with all of these different strains of cannabis that you have to learn about, what all these different names mean.

There’s also the experiential aspect. Marijuana, it feels great. I love it, but it doesn’t have that sort of feeling quality that you get with alcohol, the mainstream appeal. Let’s take another example. Alcohol is a $1.2 trillion industry. What about the other legal beverage psychoactive, which is coffee or caffeine. Both are consumed primarily by adults. Both are consumed socially in a bar, in the case of alcohol or in a café in the case of coffee. Why is it that alcohol is a $1.2 trillion dollars whereas coffee does about $200 billion a year. Why is it that people are willing to pay six times more for alcohol than coffee. Matt, what do you think?

Matthew: I think the perceived value from a craft beer or a high end spirit is something people are willing to pay up for if it delivers on what they think it will. What do you think?

Dooma: Yeah that’s good. What do you mean it delivers on what they think it will? What are they looking for?

Matthew: It’s more of a euphoric sensation versus caffeine which is like let’s crack the whip, like a focusing drug.

Dooma: Yeah. It comes down to different sensations. I mean, alcohol has a sensation such that it’s totally normal to go to a bar and have three drinks, but if you go to a café and have three coffees in a row, you’re kind of weird. People don’t really do that. I think that that’s also one of the issues that cannabis has to face. At Province we do make beverages, but we’ll talk about that in a little bit. We’re not the first, but we have a very different approach. I think part of our approach is solving a lot of the problems that the other cannabis beverages have. Not the least of which is the onset time. You drink any marijuana beverage it’s going to take an hour, an hour and a half to hit you. That’s a long time. It’s like you go to your business drinks you don’t feel anything until you’re driving home. Because of the way marijuana is metabolized when it’s drank, it goes through your liver. It creates a metabolite called 11 hydroxy THC, which has different properties from cannabis when it’s smoked. As a result, a single serving of marijuana when consumed as a beverage could keep you intoxicated for six hours or more, which doesn’t mesh with how we like to drink. At some point you have to drive home. You don’t want to be intoxicated for that long.

We like to self-titrate. We like to go to the bar and get another drink every so often, because that’s social, otherwise you would have to talk to the girl you’re on the date with. Also another issue is the calories. Most of these cannabis beverages are basically soda pops and juices to which they’ve added marijuana oil. When you do that you have to cover up the taste of the marijuana oil, and to do that you end up adding a lot of sugar. So it’s not uncommon for a single cannabis beverage to have three or four hundred calories, which is kind of insane.

At Province what we’re doing is basically coming up with solutions to these problems. We make beverages. We basically have a technology that allows us to brew and distill cannabis to make beverages that are alcohol free for the most part and that are designed to intoxicate using marijuana or its cannabinoids and which are designed to take on the $1.2 trillion alcohol industry. I know that’s a really bold thing to say, but think about it for a minute. Alcohol or adult beverages in general, this is an industry which really hasn’t seen a lot of innovation in the past several centuries. If you walked into a bar in the year 1800, what you’d get then is pretty much what you get now.

At Province we’ve developed a patent pending process to actually brew a beer from cannabis. That’s pretty interesting. Why does that matter? Well, let’s take an example from Japan. In Japan Kirin figured out how to make a beer from soybeans. They put it on the market and you know what, people liked it. When others wanted to make their own soybean beer to compete they found that Kirin had surrounded it with this sweet of pence, and as a result there are still to this day companies who pay a licensing fee to Kirin in order to make and sell their own soybean beers to compete. In the same way, Province intents to own this entire category of beer brewed from cannabis, whether it’s help or marijuana, either type of cannabis, whether it’s alcohol free like almost all of our products, in which case it intoxicates you using marijuana or cannabinoids from the marijuana plant, or whether it’s an old fashioned beer that does contain alcohol. We will make just one of those for a lot of reasons, but the main reason being to gain market acceptance.

If you’re not used to drinking cannabis, you’re going to a bar every day, this is a way you can drink cannabis. It’s made from hemp. It has no marijuana in it. The only psychoactive element is the alcohol, but you can get used to the flavor. You can get used to drinking a beer brewed from cannabis and then maybe when you walk into the dispensary and you see a bunch of stuff you’ve never heard of, but there’s one bottle on the shelf that looks familiar and there’s a brand that you might have tried once before at your local bar, that’s probably the brand you’re going to pick. That’s why we make the one product that has alcohol in it. Because we brew from cannabis, our products are naturally low calorie. We clock in at about 60 calories for one of our beers, 80 calories for another and we are developing a gin which has 10 calories per 1 ½ ounce serving. They are low sugar, low carb. They’re almost entirely, almost all of our products are gluten free. They’re (32.06 unclear) too, actually. From a high level that’s sort of what we’re doing and what we’re developing at Province. So, our product is designed to solve a lot of the problems that the alcohol industry causes and also a lot of the problems that other marijuana beverages face.

Matthew: How do you arrive at the come on of the experience? You were saying the problem before is that if you were to take a cannabis infused beverage, a traditional cannabis infused beverage, it might be an hour and a half before the come on starts. How do you change that around so it’s more similar to alcohol in that the experience is faster?

Dooma: There’s a lot of technologies that people are using to do stuff like this. The particular technology we use is an excipients that we add into the product. It’s a natural excipients. It is something that could be grown organically. It basically changes the way your body processes the cannabis so you process most of it before it gets into your liver. As a result, you start feeling that sensation as quickly as you would start feeling alcohol. It does grow in intensity in a slightly different way than alcohol does, but it’s going to peak and hit you with a dose response curve very similar to that of alcohol.

Matthew: Okay, interesting. In terms of dosage, considering people metabolize cannabis at different rates, some are fast metabolizers, slow metabolizers, but at least that’s consistence. If you’re a fast metabolizer, you’re pretty much always going to be a fast metabolizer, but what are you thinking in terms of dosaging to arrive at what people want their experience to be?

Dooma: I love this question. I’m going to go on my little soapbox for a moment, but I think we’re thinking of dosage all wrong in the cannabis industry. With alcohol it’s so simple. You pick up a beer and it says 6 percent ABV, which stands for alcohol by volume. You pick up a spirit and it’s 80 proof, which for some reason is twice as much alcohol it has in it, which is a little confusing, but most people who drink know what that means. That makes sense when it comes to alcohol because alcohol is a single active ingredient psychoactive. The only thing that is going to intoxicate you in that alcohol is the ethanol. With cannabis it doesn’t work like that.

With cannabis you have 144 different phytocannabinoids. You have all these terpenes and both the intensity and the type of effect you get from cannabis is dependent on a multitude of different compounds. Most states and most countries where medical marijuana is legal have gravitated towards an approach where they measure the dosage based on the percentage of just one of those compounds, the tetrahydracannabinol. That’s not a problem per se, but it’s not a very accurate measure of how strong the product is. If I had, let’s say, two vials and both of them contained 10 milligrams of THC and nothing else. They were completely empty other than that. One of the vials I added (35.43 unclear) and I gave both of them to a consumer . The response from the one to which I added a little bit of cannabichromene would be different and it would be more intense and more intoxicating than to the one which only had the THC.

That’s my message is that you shouldn’t really think of dosage in terms of THC because it’s not the only thing that’s affecting the way that you feel. To go back to our products, our goal is to refocus the industry when it comes to thinking about dosage in a very fundamental way. We dose all of our products such that one beer or one shot of our gin is intended to intoxicate you, if you’ve consumed cannabis, and that’s a very important if, about the same amount as one alcohol beer or one shot of gin would intoxicate you if you’ve consumed alcohol before. There is some aspect there of habituation and certainly just as you can become habituated to alcohol—I remember the first time I drank booze I was 11 or something and I had one beer and my parents gave it to me and drank it and I was retarded. I was out of my mind from one beer. Nowadays, one beer, I don’t even feel it.

The same is true for cannabis. If you’ve never consumed cannabis before and you take one of our beers, you’re going to get pretty rocked, but if you’re a normal consumer you probably don’t even feel that first one, but the second one does a pretty good job and we want to make it so you drink the whole six pack. You go back for multiple drinks at the bar, if this product could ever be sold at bars, because we want to encourage social consumption and responsible consumption. If you just take one and you’re rocked all night, that isn’t either of those in my mind.

Just to go back to the dosing thing one more time, I think the way we like to think about it is the dosage is really important, but it’s not the most important part. If you look at alcohol as an example, if what we cared about was how strong was the drink, then the most expensive alcohol in the world would be Everclear and it’s not. Everclear is one of the cheapest, even though it contains the most intoxicating, it contains the most ethanol, it’s one of the cheapest alcohols you can get. What’s expensive? It’s stuff that contains very little intoxicant. Stuff like Opus 1, fine wines and champagnes are really expensive. We’re willing to pay a lot more, even though they contain very little of the intoxicant. Scotches that are 40 percent alcohol by volume, we’re willing to pay a lot of money for a fine scotch. The fact that if it had a little more alcohol in it that wouldn’t necessarily make us want to pay more.

In cannabis we need to get away from this mentality that something that contains more THC or more psychoactive compounds is somehow better than something that contains less. It’s about the full picture. It’s about the terpenes. It’s about the experience. It’s about the flavor. It’s about so much more than the strength. I think this mentality comes out of this drug dealer mentality. If I was a drug dealer back when cannabis was illegal and I wanted to maximize my profits, I would want to get as much, as strongest weed I could put in my backpack and smuggle from California to wherever I was going to go sell it. For me, I was valuing strength. I wanted to have the most active ingredient and the smallest possible physical space. That would make me the most money, also limit the chance that I’m going to get caught because I could carry another backpack. That mentality needs to shift as we move away from an illegal system to a legal system.

I sort of wonder, I wasn’t around then, but I bet in 1934 when alcohol prohibition ended I bet there was this similar thing. Back in the thirties during prohibition, everyone was making moonshine, which is pretty strong. It was the same idea. You wanted the strongest booze you could pile in the back of your car and smuggle across state lines or wherever and that is what you valued. Over time we evolved to a taste for the finer things in life and to appreciate the other aspects. So we really focus on making products that express quality across the board as opposed to just being the strongest thing.

Matthew: It makes a lot of sense. I mean, it’s really about how the customer frames the whole situation in their mind. What’s my expectation? How does this drink deliver in terms of my expectation? Then the consistency like how often can I repeat this over and over again where I get predictable results. That is a big part of puzzle. I am definitely guilty of not thinking about it, but if you can crack that I could see where you’d definitely make a dent in the alcohol market share. I did hear a professor once at a university talk about the same idea that you were talking about is that when there’s a drug that’s illegal, was formally legal and then it’s illegal, it becomes much more concentrated and potent to maximize taking it across state lines or wherever it has to be transported. You said you need to look no further than a college football game where beer is legal in the parking lot, but oftentimes there’s no booze in the stadium. So instead of smuggling beer into the stadium, people smuggle in—

Dooma: A flask.

Matthew: Yeah, a flask of alcohol. I was like wow that’s pretty similar to what you’re talking about and definitely you can see a lot of proof of that idea around.

Dooma: Yeah I love that. The flask is actually a really good metaphor that I never thought of before. I’m going to use that.

Matthew: What other interesting ingredients are in your drinks Dooma?

Dooma: I think what’s more interesting is what ingredients are not in our drinks. We have a patent pending process for actually brewing a beer from cannabis. That means we brew the beer actually from the cannabis, not from barley, and when you don’t use barley you don’t have any gluten. So if you have celiac disease or gluten free, most of our beers won’t bother you at all. Also we don’t add sugar or other sweeteners or flavorings. Our beers are lower calorie and as a result should be healthier for you than most other marijuana beverages. Our products are very simple. They’re craft beer is designed from quality ingredients and very few ingredients.

The only ingredients in our beers are cannabis, obviously, water, because you have to have water, brewer’s yeast and a little bit of hops because you need hops to make it a beer. There are some trace amounts of excipients that help with the dose response curve. Those are all natural and organic as well, and that is it.

Matthew: So again, the excipients are something that kind of makes a more predictable delivery, accelerated delivery response.

Dooma: That’s right. We use excipients for modifying the dose response curve to make it more similar to alcohol.

Matthew: Okay. What’s the next steps here in Canada that you’re going to be doing to bring Province drinks to markets?

Dooma: Since founding the company we have been working really hard to figure out how to do this. It’s not an easy thing. When you think about brewing beer you typically think about starting with grains because they have carbohydrates. Those carbohydrates can ferment into sugars and the sugars can then ferment into alcohol in the brewing process. It took a lot of work to be able to brew something from a starting material that does not contain carbohydrates. This is a real challenge. Then once you figured that out, making it taste amazing was even harder. I’m happy to say that we have had a really positive response in the past few tastings that we’ve organized to our product. That says to me that the next steps are probably a little more refining on the flavoring and then putting this into the market.

I’ll just tell you a little story to give you an idea of what we’ve experienced on the tasting perspective. We work with a brewer who is based in Colorado. Went down to his brewery and he had prepared a batch of the product for us, and went and picked it up and I was walking out the door, put it in the truck. He said, hey can two of my bartenders try this. I was like, yeah I mean, why didn’t you give it to them before. Didn’t you try it? He’s like, no I never tried it. I didn’t know how much you had and I didn’t want to waste it. Alright let’s do this. We poured four glasses and cheers and take a drink. This was made from hemp and not from marijuana and it had alcohol in it, as I mentioned. We do one product that’s made from hemp instead of marijuana that has about a 6 ½ percent ABV, and that’s an introduction to our product for people who enjoy alcohol.

At any rate, we did cheers. We had a drink and I’m holding it in my mouth and I just don’t know what to say because I’m honest with you. Prior to this, the past five batches we had done did not taste very good, and in fact they tasted a lot like rotten broccoli. I was sort of expecting a little bit more of the same. Actually it wasn’t that bad, but I wasn’t really sure because these guys are the real beer connoisseurs, and the female bartender finishes her drink and she says, when can we get a keg of that and the male bartender says yeah I would pay for that. That’s great. What is it. I was like, oh my god thank you. It was amazing. This bar is attached to a brew house and this brew house is known for brewing these really crazy experimental beers, and there’s four customers sitting right there. Hey, we want to try, because these guys go to this bar to try the new hot beer. They want to know what it is.

I was like, sure. We poured them some beers. Two guys across the bar want to try too. Gave out two beers to those guys and everyone drinks. They finish their glass and the brewer can’t hold it in anymore. He says alright guys, what do you think you were drinking. Customer is like, a pilsner. He’s like, yeah it’s a pilsner, but let me give you a hint. This beer is made from a starting material that you’ve never had in a beer before. One of the customers is like what is it millet, which is a grain, millet. I can’t hold it in anymore so I’m like guys, what you just drank was the first beer in the world ever brewed from cannabis. Then they freak out. The guy’s like what! Is this going to get me high? Then the other guy is like wait, I have to take a drug test for work. Then I have to say, listen. This is made from hemp, not marijuana. It will not impact your drug test and it will not get you high. The only intoxicant in this is the alcohol and they loved it.

I felt like I had had a baby, but it was like a beer baby. It was so weird. This weird moment of pride and excitement. We’ve made a lot of progress. After that we did a bunch of tastings in Toronto. Got really favorable response from those. We need to tweak a few things to the flavor profile, but we’re pretty close. The next steps immediately for the company are firstly to put an alcohol product on the market here in Canada, which is not as easy as it seems. In the US you can brew and just put it on a shelf somewhere. In Canada you have to submit for approval, which we’re certain we’ll get, but it could take about three months. We’ll be pretty close to submitting that.

Similarly to figure out how to get our cannabis, marijuana version for sale in a place where it’s legal to do that. Marijuana beverages and edibles have not been legalized yet in Canada. So, as of right now the product would not be legal for sale. The marijuana version of the product would not be legal for sale in Canada, although we could manufacture it here and ship it to various countries in Europe where it would be legal, and we’re just waiting for recreational legalization to hit and following that, beverages to be legalized so that we can sell our products here in Canada. In the meantime we’re building the world’s first cannabis brewery. Nothing like this has been built before. It is groundbreaking. An offer was just put in on a space that will allow us to build 100,000 square foot brewery, which is truly game changing. We’re very excited with that as well. Those are probably the next steps for us right now in the short term.

Matthew: You mentioned your first couple iterations tasted like broccoli or something undesirable you wouldn’t want to drink. Do you have someone on the team? Can you tell us a little about your cofounders or team members that maybe have specializations in different areas that help you bring the product to market in a way that you think will make it successful?

Dooma: Yeah, we have a world class team, although you do not have to be any kind of an expert to know that our early iterations tasted terrible and they were really bad. One of my cofounders started a gin brand and did pretty well, and he sold that company. Following that, he created a distillery and launched a vodka brand that is a household name vodka and became a worldwide brand, worldwide bestselling brand and then sold that to one of the largest alcohol companies in the world in an absolutely tremendous exit for himself. He’s full time with me in this venture. Has tremendous experience in the alcohol industry.

Also my brother-in-law, who is an advisor to our company, created the bestselling ultra premium vodka in Canada and got that through the distribution system here in Canada with the (50.42 unclear) Alcohol Monopolies, and got that into every providence and territory in the country. We have a few folks with a lot of alcohol experience. Then we have folks with a lot of cannabis experience. One of my cofounders has won now 22 Cannabis Cups, owns a dispensary in California and also one in Las Vegas. Another cofounder was formally an in-house counsel for Privateer and also worked very heavily on their Marley Naturals brand. A really amazing group of founders, a great team.

One of our scientists has an incredible depth of knowledge on chemical engineering and chemistry that’s enabled us to get as far as we have. He’s also really good at managing teams. We have our own in-house product designer and graphic designer who is incredibly well known, has launched products that sold in Nikea and (51.45 unclear) and actually designed the primary design work for an Audi automobile that went to market. So a really well know designer. I think when it comes to marketing and branding if it’s not done in-house, it’s done in the outhouse. Obviously we will work with a lot of outsource advertising agencies, etcetera, but when it comes to actually figuring out the branding, what the brand is going to look like, what it’s going to stand for, we do all that in-house and have our own two person team that’s managing that.

We are right now 11 entrepreneurs and early stage employees at Province, which is a reasonable number of people. Between us we have had four successful exits. We’ve had 14 years experience in the alcohol industry, 13 years experience in the cannabis industry. If you add it all up collectively for previous projects we’ve raised more than $75 million. So, it’s a group of guys who really know how, guys and girls, to put a business together.

Matthew: Where are you in the fundraising process right now?

Dooma: We are in a very unique situation. In my previous business in the United States and for all the entrepreneurs who are listening who are in the United States, it’s a lot different up here in Canada. You have access to things. Because cannabis is federally legal for medical purposes in Canada, and has been since 2001, you have sort of a support system that’s grown up around this industry that you don’t have in the United States, and that enables us to do things that you couldn’t really do in the United States. For example, our law firm is Bennett Jones, which is a major international law firm with offices in nine countries. You can’t really work with those big international law firms as easily in the United States.

In Canada there’s a whole industry that has grown up around supporting marijuana companies, mostly medical marijuana companies in the capital market and helping them with fundraising. So, we’ve been very fortunate at Province to attract the attention of Thought Launch Capital Advisory to help us with our fundraising. These guys are a well known firm out here. They just completed a very successful and substantial fundraise for one of the major licensed producers here in Canada. They’re sort of taking the lead on fundraising efforts, which is great for me as a CEO because it enables me to spend a lot of my time doing things other than raising money. I always believe that a CEO’s job is to raise money for their company, and I think to some extent that’s always true, but you can get a lot of help from that that you can’t ordinarily get in the United States.

We will be attending the ArcView Conference here in Toronto. We’ll be presenting. We were selected to pitch on stage so we will be presenting at that event. We have a little bit of money left in our current round. I expect shortly after ArcView it will be complete, but we are going to open another round around September/October timeframe in which we’ll raise about $10 million. Fundraising is something we’re always doing. The cost of putting together the world’s first cannabis brewery is not inexpensive. We’re looking at needing to raise, assuming revenue hits the targets we’ve set out for ourselves, we would need to raise an additional $40-$50 million Canadian dollars over the next three years.

Matthew: That ArcView, which is a fundraising event for angel investors in the cannabis industry to come together with entrepreneurs. That is July 16-18 in Toronto for accredited investors that are listening, outside of Canada as well that might be interested in going. You’re doing a lot of fundraising. It sounds a lot different. I would love to dive into that, but that’s really not what we’re talking about here, but that seems like a totally different process from what we’re used to talking about. That’s interesting.

Dooma: It is a lot better. I’ll just say on the ArcView front, to date our single largest investor in Province is someone that we met at the ArcView event in Los Angeles. If anyone out there is an entrepreneur raising money for their company or an accredited investor looking for the best deal flow in the country or in the world, I think ArcView is probably the top spot. I’m a big supporter. They don’t pay me to say this, but I really believe in the organization and it’s done a lot for me.

Matthew: Great. Before we close let me ask you a couple of personal development questions. Is there a book you would recommend to CannaInsider listeners that has had a big impact on your life or way of thinking that you would like to share?

Dooma: If you are in this industry or thinking about getting into this industry and you have not read The Hard Thing About Hard Things by Ben Horowitz, you should do that right away before you do anything else. Have you read it Matt?

Matthew: I haven’t read it, but is this Andresson Horowitz the VC Firm?

Dooma: Exactly, and also Loud Cloud and Opswear. He’s a very successful entrepreneur. He breaks it down in a way that it was so eye opening. I read it recently actually. I read it just when I was starting up Province. I was like okay, entrepreneurship it means so many different things to so many different people. There’s a whole class of people for whom entrepreneurship means let’s just do this easy thing, make some easy money like flipping houses, buying apartment buildings. That’s entrepreneurship. You can do that, but if you really want to change the world, if you really want to do something that is fundamentally going to change the direction of society, that’s a hard thing and it’s not going to be easy.

Running a business is never easy. Running that kind of a business is almost impossible. The number of hurdles that you have to face and the challenges associated with operating a business in any industry, specially one that’s trying to make change, is overwhelming. To do that, to do anything in cannabis you’re facing so many challenges. I mean, this is the hottest industry in the world right now, bar none, but it is also the most difficult industry in which to succeed. So I think that book is amazing. The other one that I would recommend also to anyone who wants to start a company in cannabis is by Ashley Vance and it’s the Elon Musk biography. (59.00 audio cuts) how to run your own business by watching how he has run his and started his so successfully.

Matthew: I got the whole answer there for the first book, but then the whole second part on your second book just totally dropped out. So, let’s just do this. You just jump in and go, and there’s a second book.

Dooma: The second book I would recommend is Ashley Vance’s biography of Elon Musk. He is such a phenomenally talented entrepreneur and there’s so much you can learn about starting and operating your own business by seeing how he has done it so incredibly successfully.

Matthew: He made a cameo appearance in this comedy called Why Him with James Franco. I don’t know if you’ve saw that, but it’s a really funny movie. James Franco is like this Silicon Valley entrepreneur that’s super rich. If anybody missed that, it’s just really worth watching on Netflix or Amazon streaming or something. It’s really good. Why Him? Let me ask you another question here. Is there a tool, web-based or otherwise, you use weekly or daily that you consider very useful that you would recommend?

Dooma: Yeah I could do a whole podcast on this, but I’ll try to keep it short. We use Smart Sheet at Province. It’s a fantastic tool. It’s great for long term planning and project management. There’s this debate. There’s two different schools of thought around project management. One group of people likes the Waterfall where you do a GANT chart and plan things out well in advance. The other group of people like the ConBon boards and the Agile workflow. They argue about these different sort of approaches to productivity on the internet all day and all night. What’s so great about Smart Sheet is you can do them both.

It has a ConBon functionality. It also has GANT chart functionality. It is a really amazing tool. I love it. It reminds me, in the video game business we used tools like Jira and Greenhopper. Those tools were amazing for tracking productivity, but they cost an insane amount of money. For just a tiny fraction of what we would pay for those productivity tools, Smart Sheet does almost all the same thing. So, I think it’s way ahead of its time. It’s a great tool. We also use Slack. If anyone from a company sends me an email, I delete it without reading it. Slack is the only way I communicate on phone or in person with people who are team members at Province. I think it’s very efficient as a great way to clean out your inbox and also a great way to foster communication with folks who may not be sitting right next to you.

Matthew: Why has it transformed your life compared to email? What do you think the benefit is for Slack?

Dooma: I don’t have any junk in my email, first of all. I never give out my personal email on any of those web things, like when you buy something and they want an email address, I never get it. I don’t get any span, but even without spam I get 200-400 emails a day, mostly from outside folks. It’s not feasible for me to respond to all of them in the same day. So, if people from my company need something from me and they send me an email, it just gets caught in that clutter and it gets weighed down and it adds to that clutter. The most important thing to me are my team and my employees and what they need. That always has to be first priority, but it saves trouble reading through all my email looking for things that were sent for people in my company because when people need something from me, they either ask me in person or they put it in Slack and I can see it right away or they put it in Smart Sheet.

If someone is asking for me to do something that I can’t do in a split second, it typically ends up in Smart Sheet and then the task gets done because that’s the tool we use for tracking all of our tasks. I think what makes Slack amazing from my perspective is just the ability to have a different way. If you think about it email was made a long time ago and it was made for some kind of military defense purpose. It’s a really inefficient way to communicate. You got to type in someone’s ID, which is their email address. Then you have to decide what you’re going to call this thing that you’re going to say to them, so that’s your subject heading. You have to say “Dear so and so” and write it like a paragraph format. If there’s other people, you have to decide who to copy. There’s a bunch of buttons to press along the way to making that happen. With Slack, you just open the window, type the thing and send it and it doesn’t have to be fully formed. It doesn’t have to have as many steps involved in communicating. I just find it way more efficient, so I’m a big fan of that tool as well.

Matthew: Dooma, what’s the best way for listeners to connect with you and find you online?

Dooma: We have a website, www.provincebrands.com, there’s nothing on there and there probably won’t be anything on there until we’re ready to launch our products, but in the meantime it will allow you to put in your email address. If you put your email address there, we will get in touch with you. I promise. We’re very good about that, or you can find me basically on every social media platform; Facebook, Twitter, Instagram, LinkedIn and you can find Province brands on all of those platforms as well. If you direct message us on any of those, we will get back to you. We’re very good at following up with folks.

Matthew: Great. Dooma, thanks so much for coming on and telling us about Province and good luck with everything you’re working on.

Dooma: Same to you man. Thanks for this opportunity. It really means a lot to me and I really enjoyed it.


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