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Ep 349 – Hemp Vodka is Taking Off, Here’s Why…

ben williams highway

A new hemp seed vodka is winning taste tests and garnering devotees across Texas. Here to tell us about it is Ben Williams, founder of Highway Vodka.

Learn more at

Key Takeaways:

[00:45] An inside look at Highway Vodka, the first vodka created from hemp

[1:12] Ben’s background in the restaurant and bar industry and how he came to start Highway Vodka

[2:11] Why hemp produces a smoother vodka than most traditional grains and how Ben figured this out over years of experimentation

[7:08] The permits required to sell hemp-based alcohol

[13:43] Highway vodka’s unique flavor profile and how it compares to other spirits

[18:44] How Highway Vodka contains virtually no congeners, making the drink low-calorie and less likely to cause a hangover

[24:27] Books that have had a big impact on Ben’s life and way of thinking

[28:16] Ben’s thoughts on legalization in Texas and other southern states

Click Here to Read Full Transcript

Matthew Kind: Hi, I'm Matthew Kind. Every Monday, look for a fresh new episode where I'll take you behind the scenes and interview the insiders that are shaping the rapidly evolving cannabis industry. Learn more at That's C-A-N-N-A insider dot com. Now here's your program.

Today we're going to hear how a new hemp seed vodka is winning taste tests and garnering devotees across Texas. I'm pleased to welcome Ben Williams, founder of Highway Vodka to the show. Ben, welcome to CannaInsider.

Ben Williams: Hey man. Thanks so much for having me, great to be here.

Matthew: Give us a sense of geography, where are you in the world today?

Ben: I'm in Houston, Texas.

Matthew: Good place to dream up your plans for Highway Vodka. Tell us, what is Highway Vodka?

Ben: Highway Vodka basically is the result of about eight years of tinkering and messing around, learning how to distill spirits, basically a hemp-based spirit that's grain to glass using nothing but hemp, corn and water, that's it.

Matthew: Ben, share a little bit about your background and journey and how you got into this space, became a distiller of spirits and started Highway Vodka.

Ben: I owned a couple of bars and restaurants beforehand and just literally got into distilling as a hobby, just curiosity and all that kind of stuff. Just bought a little 13-gallon steel online and I started reading every book I could find, then every YouTube video I could watch, and literally just picked it up as a hobby. Just doing that for a couple of years with a business partner and stumbled across him and changed everything and just went from there with it. Like I said, it was just literally a hobby that turned into a business over the course of about eight years or so. It wasn't an overnight thing at all.

Matthew: Eight years of tinkering getting used to it, how did the idea of hemp come into the picture?

Ben: After being in distilling for about two or three years, started off with just a sugar wash, then just messing with a bunch of different grains, went to California, a friend of mine opened up a dispensary out there and he introduced me to some friends of his that were distilling with marijuana. I knew enough about distilling at the time to notice what was going on in the various stages of the process, what they were doing. I liked a lot of the things I saw, obviously, I couldn't mess with marijuana in Texas so I just started ordering every part of the hemp plant that I could find, trying to see how I could incorporate it because I liked some of the things I saw like viscosity differences and stuff like that.

Just started doing that over literally some years and a bunch of different meshes and runs, stumbled upon the thing that's right in front of you, the hemp seed. Of course, it's always the easiest thing but you don't start there, it can't be that simple. Found that, that actually wasn't simple because then it became about figuring out ratios. I'm not a scientist by any means neither is my partner, but this was literally just a trial and error, just messing around, you stumble upon this and you stumble upon that.

One of the big things we stumbled upon that was a game-changer was we were using the hemp seed and stuff like that, we would always rack the liquid off from in-between the oils that were formed during the fermentation period and the grain beneath, and then one day out of just being lazy, we just dumped all that stuff in there because racking is a messy, sticky process. We were like, "Just throw it out there, who cares?" Boom, game changer. That's how, it's interesting. That's really been this trajectory of Highway Vodka, has been a lot of moments like that that have changed everything. We're totally not planning, just like, "Who cares?" Then, "Oh, really? Wow."

Matthew: You and I were chatting earlier and you told me that the key to know if you're making good vodka and in this case, FC Vodka, is people's face, their face doesn't lie. Can you talk a little bit about that?

Ben: During the process, we would go to the bars and restaurants and let regulars taste the little stuff we're making like, "Hey, you want to try something?" In the beginning, oh man, people are just like, "Are you trying to kill me?" All this kind of stuff. As we got better and better and better and then once we introduced the hemp and then once we started distilling on the grain, completing with the oil and everything, that was one of the big things because it's like this is like the only thing I know how to cook. It was really personal to me. Every person that I've put this before, I'm watching your face to see what you think about what I cooked, you know what I'm saying?

Matthew: Yes.

Ben: I'll never forget, there is a group of women up at the bar, I knew them and I was just like, "Hey, guys want to try something?" Then everybody wanted to taste it neat in room temperature for some strange reason, nobody drinks vodka that way but that's how they wanted to do it. That actually turned out to be a gift because learning to gear it towards that palette. I gave it to them and watching their face and their face didn't curl up, it went into like, this is nice kind of face. I was just like, "Yes, that's it right there."


Matthew: If their lips and cheek curl up like they just sucked on a lemon then you're like, "Oh, let's go back to drawing board."

Ben: Yes, back to the drawing board. When I saw that I was just like, "Okay. We're really onto something here."

Matthew: That's pretty nice because you figured out a truth detector there because when you ingest something, especially like alcohol that has this level of concentration, you're going to have a facial reaction.

Ben: Oh dude, their face does not lie. I'm sitting there like-- Every time I do a sampling or tasting and meet the maker events in the liquor store, wherever and people come and they get their sample, I'm just studying your face because if your face cracks wrong-- [laughs] Fortunately, it doesn't happen often but I'm watching. Your face is going to tell the truth. Won a way lot more than the loss, so tat's what gave me the confidence to push forward.

Matthew: Do you have to get a special kind of permit for the type of vodka or how does that work?

Ben: Permitting, yes. That was a two-and-a-half-year process on getting those permits through-- You have to start all the way from the federal government, all the way down to your smallest local governing entity to get an actual manufacturing for distilled spirits permit. Yes man, it was a two-and-a-half-year process, mainly because of the hemp because I guess it's just not a thing they deal with often up there. They didn't really know, "Okay, what is this?" I had to go through so many rounds of federal testing by different labs that they okay basically, testing for THC and all that kind of stuff. It was quite a process.

The biggest thing about this too is that before you can even apply which would be one of the largest barriers of entry into the industry if you want to be a manufacturer, you have to already have your facility locked down, lease agreements, whatever the deal is and that has to be approved before you can even submit your application. Imagine in my situation of having to, say, lease a facility for two and a half years not even knowing if you're going to actually get this permit but it worked out for us.

Matthew: Man, that seems really backwards, doesn't it?

Ben: Yes. I don't get it but it is what it is, The beautiful part and other, falling backwards into something moment was my partner. He was big into horses and riding, cutting the horses and stuff like this, he had this big barn and on top of the barn he actually had his construction offices as well. We use the barn, some land that he already owned in the building, he already owned free and clear, as our site.

Matthew: Nice. Good idea.

Ben: We weren't stuck with paying rent and stuff like that, it made it easier for us to stomach the two and a half year process because we have the site. We're just still a hobby and along the way like, "That'd be cool if it happens, whatever." It wasn't anybody's primary dream, we were just trying to see it through. When we finally got the permit, another backwards moment, my partner actually broke his ankle messing with his horses and he was like, "Man, I'm done with horses. I'm finished. I'm over this." Then that was right around the time the permit came. Like, "Hey, the permit came. Let's get rid of them. Let's build the distillery in here," and that's what we did. When I tell you-- When I think about that out loud, when I say that out loud, it is funny. There's so many just weird things like that just fell in place at the right time, you know?

Matthew: Yes.

Ben: It's really interesting and same thing with my distribution. It's a similar story to that.

Matthew: I'd always rather be lucky than right.

Ben: Yes, but you know what's interesting, man, is you can be lucky but if you're not prepared for that lucky moment, it's going to go right by you. Like with distribution, same thing. I thought from my relationships in the restaurant industry and stuff that-- I had nurtured these relationships with some of the distributors and they were all like, "Yes, we got you," whatever. Right? Then, when I had to show it with my permit, I'm like, "Okay, I'm ready." You know what I'm saying? "Now, what's the next step?" "We're not going to do anything with it. This company doesn't want anything to do with anything remotely associated with the cannabis industry. They think anything cannabis related is a threat to the spirits industry--"

Matthew: The devil.

Ben: Yes, man. Meanwhile, you're selling spirits like crazy but whatever. That was just one reason for a turn down I got from a very large company that I thought I was in with, but, man, that turned out to be-- I'll never forget this meeting because this really pissed me off. We'd nurtured a relationship, thought I was good to go, called him over to the restaurant, one of my spots for lunch to eat lunch, and he just goes down this rabbit hole of why it's not going to work. Now, mind you, I had to deal with it all positive to this point. He goes down a rabbit hole of why it's not going to work, blah, blah, blah, the cannabis tie-in thing, they don't like that, whatever. Then, he's like, "[unintelligible [00:12:02] to hook you up with a broker and you can get your little pet project into a store or two."

I just got up from the table, and I was like, "Hey, they'll bring you your check. No problem, see you later." I walked out of the place, called a buddy of mine just to rant. He said, "Hey, let me call a buddy of mine and see if he can point you in another direction," or whatever. That guy that he called happened to be Tom Montague who's now the VP of Silver Eagle Distributors which is like a Budweiser house which is the largest beer distributor in the country, right? They're like, "Hey, we're about to look at spirits. Let us take a look at it. We're about to start distributing spirits." Same thing. Had that meeting, did the blind taste test against two other brands, won it unanimously, became their first spirit, and it just rolled on from there.

That's why I'm saying lucky-- How lucky can you get for a friend of yours to call this guy and ask him and then they actually be looking for a spirit. You know what I mean? I'd never even entered in the ballpark. Then, also to have a quality product that I'll put up against anything, I don't care what it is, that they liked. You know what I'm saying? Where the opportunity met preparation or however that goes. You see, that's just the whole-- You see everything that's happened, there was no master plan. It's you plan and you get this far and then you hit a wall and then as you rebound, you fall backwards from running into that wall, you fall into this. You know what I mean?

Matthew: Yes.

Ben: [unintelligible [00:13:42].

Matthew: I want listeners really to understand what the flavor profile is here and how it compares to other spirits so they can really understand that. You talked about the finish a little bit. Can you talk a little bit about how you experience it and what people's first adjectives they use when they describe it after taking a shot?

Ben: The first thing they always say is smooth. That's the first thing. No burn. Smooth. The second thing I hear-- I'm just literally just giving you the words that come out of people's mouths when you described it that way, that's perfect. I'm just running it through my head. Smooth. Sweet. Nice. I like that one too. [laughs] I want to get a lot of, "That's good," because what it is, man, is-- The whole thing, it's about-- Again, it comes back to the hemp within that oil, right? What that oil is doing is-- It's not only knocking the burn off, it's making it a little bit more-- making it easier to go down. You know what I'm saying? Giving it a little bit more legs than your standard vodka would have.

Then, also, what oil does in cooking, this whole flavor's on your palate. Then, it's snatching [unintelligible 00:14:53] to the sweetness from the corn in the [unintelligible 00:14:57] and holding that on your palate a little bit more. It gives you more of a sweeter-- but not sweet like sugar, but just a sweet finish and a smooth experience so that you can-- Often, people will say, "Hey, I could just drink this neat or I could drink this just on ice. I wouldn't need anything with this. Most vodkas you have to mix with this or that. I would just drink this smooth because there's character there." You know what I'm saying? That's basically how I would describe it, nice, smooth with a little sweet finish.

Matthew: What about the burn? The burn is-- that's why it's smooth because the burn's muted?

Ben: Yes, no burn. That's what I'm saying about the oil.

Matthew: How does the hemp affect the viscosity?

Ben: Those oils that I was telling you about that form during the fermentation period, a couple of things happen there. The hemp actually acts as nutrient for my yeast, so it makes the yeast live longer and produce more alcohol. My yields per batch got larger when I started using the plant. When you throw all that stuff in the still, that oil floats on top of the still acting as almost like the first layer of filtration with the-- Think like pot pourri, how that functions, right? Those vapors got to come up through that thick layer of oil first before they get to the copper plates in the column, right?

By distilling only six times and by collecting only the hearts of the run which is the purest part and the sweetest part of the run, of the distillate-- which you'll notice is when it comes off, it has-- If you-- Let me see, how can I just explain and make it more visual? You know how you can ring your glass with something and it tangs a little bit? You know what I mean? It just has a little cling to the side of the glass and it-

Matthew: Sure.

Ben: -creeps? That's exactly the viscosity change that I speak of that Highway has. That little nuance of body, that little extra body that it-- I like a little extra body. [laughs] That little extra body is what holds those flavors and whatnot just enough to knock that burn out of there and coach your tongue a little bit and make it just a smoother experience so there is no burn. Like I said, that's what yields to the happy face instead of the sad face that-- when people look for it. That's [inaudible [00:17:36].

Matthew: That residue is-- That's the key difference.

Ben: I don't know. Residue? It's not an appealing term. Let's just say, that oil, that light oil that's present that gives it just a little bit more density, not as dense as wine but not as watery, let's just say, as your standard vodka, right? Just a slight, almost really imperceptible-- The only reason I know it is because I look at this stuff so hard but the easiest test, ring your glass with some Highway, ring your glass with some-- whatever else, and you'll just notice the time that it takes, just those couple of half seconds that it takes creeping down the side of your glass, and that's what it's about.

Ben: Okay. There's a little bit of an essence there.

Ben: Yes. Essence. I like that. [laughs]

Matthew: [laughs]

Ben: It's only 57 calories. I didn't know that until recently.

Matthew: Let's talk about that because White Claw and these seltzers and different things are really eating into the beer market. People are concerned about calories and hangover. Talk a little about calories and hangover if you would.

Ben: It's interesting. It was never designed to be such, right? It wasn't like, "Let's make some kind of low cal--" I wouldn't even know how to do that if you asked me to be honest. Literally, I guess it's just the simplicity of our [unintelligible 00:19:13], just keeping it honest, just the good old hemp, corn, and water and run with it. I don't know, man. I just took it one day and I just said, "We need to test it."

I sent it back to one of those labs that we had to get it tested at for the government or whatever just to get the calorie stuff, and it came back at 57 calories per serving. I was just like, "Okay." I started looking that up and I didn't realize that that actually put us at the lower end of the spectrum as far as calories go, down there where the ones that actually are designed to be low calorie are, not as low as Skinnygirl or one of those other deals but not far from them at all, literally seven, eight calories. You know what I mean? It just made me wonder, "God, what are people putting in this stuff after the fact?" You know what I'm saying?

Matthew: What are they putting in there? I'm curious.

Ben: They're putting sugar in that. Oh, man. This weekend I was in a Total wine store in Austin. I was doing an event there. Before it started I was just walking up and down the aisle. I'm looking at some stuff and I'm seeing floaties and stuff like that. I'm looking at this one bottle and it was just like, "What is that? Is that sugar?" It just made me think there's a lot going on after the fact. There's coloring. You know what I'm saying? There's all kinds of things that are being added but I don't know why or what for because unless it's a flavored product, I don't get it. Maybe it's something that I'm missing I don't know about or whatever.

I have no idea what it could be but there's definitely something going on after the fact because I don't-- I didn't intend for it to be that way. I just make the stuff how I make it. Maybe it's in the cuts that I make by only keeping the hearts versus the tail. I don't know, but it really made me wonder for it not to be designed to be such and it just ends up that way. I wish I knew what it was, that's why I wish I was scientist. I have no real explanation for why, but I do know that there is some funny business going on after the fact. There has to be. As far as what's--

Matthew: You mentioned the hearts and tail thing. I know you mentioned that before but I just want to make sure listeners really understand what you mean when you say that. If you could just go over that one more time.

Ben: In distilling, there's four parts to every run. There's the four sets. The heads, the hearts, and the tail, and they all boil off at specific temperature range. The first two parts that come off are not really drinkable. You've heard moonshine blindness and all that stuff. If you drink that stuff, you're in trouble. Now, the hearts and the tails you can consume and most people that are really trying to get the most out of their batches and stuff like that part-- If you want every drinkable part of alcohol out of a batch, you'll blend those two items together to just squeeze it dry, for lack of a better word. A lot of people do that.

A lot of those continuous still operations where you get really huge and you just can't afford to turn it off, that's what you find. They never turn it on so they don't really have any going on and whatever. You can drink that stuff, but that's where a lot of the headaches and stuff lie and that's where a lot of the funny business that you don't really necessarily prefer to have in your glass. You know what I'm saying? Will you be okay? That's relative because you'll probably have a horrible headache in the morning. You know what I'm saying? If you overdo it. Well, that's with anything you overdo.

That was all just from me reading and stuff like that. Learning about the differences of the cuts and so that's why I just narrowed in on the heart because again, it was just for us and family and friends or whatever so I had no use for tails. It wasn't a business at that point. Then when it came time to scale, I didn't want to learn how to deal with tails because it took me long enough just to get this thing right. I just stayed with it. All hearts, no tails. That's basically what that means. Those temperature ranges vary depending on the climate, depending on what type of equipment you're using, and stuff like that. It's a very key part in making something unique and stuff like that. You want to really pay attention to your cuts.

Matthew: Well, you have a really interesting story how you persisted with the distribution. You worked hard. Opportunities came up and you were able to capitalize on them because you were ready. That's really the story of persistence and grit. I think that aspect of the entrepreneur is sometimes underestimated. Just that grit to keep on going when it's not clear what to do next. Well done there.

Ben: Appreciate it. Thank you.

Matthew: Well, Ben, I'd like to ask a few personal development questions before we wrap up the interview. Is there a book that's had a big impact on your life or your way of thinking that you'd like to share?

Ben: Yes. I would say there's two books actually. I was just thinking of one that's directly related to the business that I'm in. That's just The Home Distilling and Infusing Handbook. [laughs] It's like a little handbook literally. I actually talked to the guy. I reached out to him way back many years ago because he was doing little consulting classes and he was teaching people how to do it. I tried but he had since retired. I didn't realize how long the book had been in print at that point but I actually didn't touch on it, it was cool.

Anyway, that book just made me-- just opened the door as far as what, in the most layman's terms as possible, what distilling is and how you can do it because subsequently after that I read so many other books and some of them read like chemistry books. They're just too much. You know what I'm saying? That book, The Home Distilling and Infusing Handbook, was just a nice easier thing to get into or whatever. I'm sorry. It's called The Home Distiller's Workbook. That's my fault. Home Distiller's Workbook. Anyway, that was a great one.

Then the next one that led to what you were talking about at the end as far as the entrepreneurial aspect of this business would be The Alchemist. I have a ton of books. I read books all the time, but I just read this one lately and this has been really on my mind a lot. It speaks directly to what you were just saying about how as you come up to these roadblocks, how do you navigate them? Do you stop there or what? The Alchemist is the story of that guy who's just full of moments where he could have turned back but he always found a reason why and he was always propelled forward by the people that he met along the way. One person he met, the guy was more--

They have this idea of going to Mecca. A guy that he met and was working with was like, "I'm just more cool. I'm actually going to Mecca. I'm just cool with just the thought of going." I saw how that could happen. You know what I mean? Because you get these ideas and they're cool to think about. You know what I'm saying? You can just spend so much time just zoning in your own thoughts of what it could be instead of actually trying to make it happen because it's daunting. It's heavy to get out there and try to do whatever. I understood how he was-- and I find that even today. I fanciful think about, "Oh, worldwide distribution would be so great." Then I'm just like, "Well, that's going to be so hard."


It's not my thing. I still forge along towards it at my own pace or whatever. I love that because the biggest thing about being an entrepreneur, especially when you don't play with other people's money and it's your own money invested, you have no choice but to figure it out because it's easy to walk away from some investors like, "It didn't work out, guys. I'm sorry," whatever. Versus when this it's your own money and you're just like, "Oh no, no. I'm not losing this." You know what I'm saying? "I got to figure this out." That's a big difference.

Matthew: What's the most interesting thing going on in your field besides what you're doing?

Ben: You mean in spirits as a whole?

Matthew: Sure. Spirits, hemp, anything in that area.

Ben: Gosh. Well, I think the most interesting thing-- [laughs] I have one. In Texas, obviously, it's not legal but it's really interesting to watch the fine line that's being danced between CBD shops and so forth. I find that really interesting how it's just a precursor for legalization that I think is really interesting to watch. It reminds me of the game room thing. I don't know if you're familiar but where gambling isn't legal, they'll have these game rooms that run right on the line. You know what I'm saying? They're able to operate some kind of way. They operate and they do what they do. It's just a precursor for legalization.

I find that just really interesting and fascinating to watch because you got to have a lot of courage to dance on that line, number one. Number two, my God though, you're right on the forefront, so when it does break you're there. You know what I mean? I give kudos to those folks that do that but as far as spirits go, I don't know, man. I'm just learning every single day as far as this thing goes and I just find that exciting, period, because I just love to learn new stuff and see what's going on and see how I can get into it, and then learning how to mitigate your own growth, which is really a thing that I've been trying to wrap my own mind around and not ride out further than you can, even though you can technically, but really, can you? You know what I mean? I can definitely go national, but can you support and really work those markets?

Now, we're in Texas, Georgia, Southern California and Florida in brick and mortar, and then obviously, through, we're available by delivery pretty much all across the country. As far as activating new territories on the ground, you don't want to just run out there and do that. I hear people all the time, they're saying like, "Oh, we're in 20 states," and I'm just like, "Actually, you have a case in 20 states, but what does reorders look like?" That's what I want to know and stuff like that.

It's just an interesting process just trying to learn the business and trying to learn how to grow a company beyond your own city's boundaries. It's just something that's fascinating to me. I don't know if that's answered your question as far as experience goes, but as far as my perspective of experience, that's what I'm into.

Matthew: All right. Ben, final question. What is your favorite unhealthy comfort food or guilty pleasure?

Ben: Dude, that's a whole another show right there. I don't know. You can start with pizza or cheeseburgers. I love anything that's, like they say, "You should not eat that." I love it. I love it. I love it. I was talking to my brother about that the other day. I was like, "Dude." I was saying, "I really think there's something that they put in the pizza sauce or ketchup and stuff like that because it activates-- When it hits my mouth, I feel happiness." He's like, "No, dude. That's just your drug."


It does. I love all that shit. That'd be messed up. That stuff is great, dude. A good cheeseburger with bacon, fries and a coke, let's do it. I know you can't and I try not to do it often, but man, when I do it, I'm in heaven.

Matthew: Good. You mentioned again where Highway Vodka is available and also the online store and how people could connect and find you online.

Ben: On the social stuff, it's just Highway Vodka on everything. Around Texas, Total Wine, Specs and all the normal stores. Georgia, the same. I can't remember all the stores out there, but pretty much through brick and mortar stores in Georgia. I wish I could remember the names of these places, but I just can't. Southern California, Southern Florida, brick and mortar. Mainly, if you walk in any of those places, you don't just see it, or you live outside of those areas, then, or you can just go to, click the link there to ReserveBar and then you could order it right to your door right there. That's really nice and easy.

Matthew: All right. Any restaurants, bars, or alcohol distributors listening, if they want to learn more about that, is there a way?

Ben: Yes, they could go to the website, too. Right there, there's a button to push for those inquiries and stuff. We could get them linked up for sure with distributors in their area. If we're not in your state yet, we'll be coming soon. Maybe you'll be the jump off for that state, so that's always cool.

Matthew: Well, Ben, thanks so much for coming on. What an interesting journey you've had. Again, I really admire your grit and determination. Good luck with everything in the rest of 2021.

Ben: Thank you so much for everything. I appreciate it. Thanks for the opportunity to be on.


Matthew: If you enjoyed the show today, please consider leaving us a review on iTunes, Stitcher, or whatever app you might be using to listen to the show. Every five star review helps us to bring the best guests to you. Learn more at What are the five disruptive trends that will impact the cannabis industry in the next five years? Find out with your free report at

Have a suggestion for an awesome guest on CannaInsider? Simply send us an email at We'd love to hear from you. Please do not take any information from CannaInsider or its guests as medical advice. Contact your licensed physician before taking cannabis or using it for medical treatments. Emotional consideration may be provided by select guests, advertisers or companies featured in CannaInsider.

Lastly, the Matthew or guests on CannaInsider may or may not invest in the company's entrepreneur's profile on the show. Please consult your licensed financial advisor before making any investment decisions. Final disclosure to see if you're still paying attention. This little whistle jingle you're listening to will get stuck in your head for the rest of the day. Thanks for listening and look for another CannaInsider episode soon. Take care. Bye-bye.


[00:35:42] [END OF AUDIO]

Ep 348 – Cannabis Fund Eyes The Sweet Spot For Investor

patrick rea poseidon

Some investors are seeing big opportunities in post-seed stage investing. Here to tell us about it is Patrick Rea of the Poseidon Garden Fund. 

Learn more at

Key Takeaways:

[00:44] An inside look at the Poseidon Garden Fund, a $50 million fund supporting post-seed stage cannabis businesses

[1:39] Patrick’s background in cannabis, including his popular business-accelerator and venture capital fund, CanopyBoulder

[2:49] The current cannabis investing landscape and Patrick’s advice to investors looking to enter the space

[7:02] The benefits of post-seed stage investing versus earlier stages

[10:08] How the Poseidon Garden Fund helps springboard companies through its mastermind groups and large network of industry leaders

[13:53] The Garden Fund’s process for follow-on investments

[15:08] Parallels between the cannabis and supplements industries, including a new trend in product technology

[16:40] The Garden Fund investments Patrick is most excited about right now

[21:19] Patrick’s advice to entrepreneurs on the dos and don’ts of pitching your company

Editor’s Note: What Is The Big Deal About Delta 8 THC?

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Matthew: Hi, I'm Matthew Kind. Every Monday look for a fresh new episode where I'll take you behind the scenes and interview insiders that are shaping the rapidly evolving cannabis industry. Learn more at that's C-A-N-N-A insider dot com now here's your program.
Some investors are seeing opportunity in post-seed stage investing, here to tell us about it as Patrick Rea, Managing Director at Poseidon Garden Fund. Patrick, welcome back to Canna Insider.
Patrick: Thanks, Matt. Happy to be here.
Matthew: Give us a sense of geography. Where are you in the world today?
Patrick: I am in beautiful Boulder, Colorado today.
Matthew: Good and I'm in Lisbon, Portugal. Patrick, tell us what is the Poseidon Garden Fund?
Patrick: The Poseidon Garden Fund is a very traditional VC fund, but focused on the post-seed stage in the cannabis industry. We're focusing our investment strategies right at that stage of company that is getting staged up for their series A but not quite there, and it's where we see a lot of opportunity. Invest in companies all over the cannabis industry businesses that touch the plant single state operators as well as technology companies.
The Garden Fund is a collaboration between myself and Emily and Morgan Paxhia of Poseidon Garden Fund and the team they're up beside. We've known each other since January of 2014 and we've always talked about working together and here were.
Matthew: Listeners now may remember you from earlier interviews as the founder of CanopyBoulder, can you talk about that?
Patrick: Absolutely. CanopyBoulder is the leading business accelerator in the cannabis industry. We founded that back in 2013, and follow the model defined by TechStars: Have a very actively engaged business accelerator. We make investments, run companies through a 13 to 16-week in-person accelerator program, take equity positions and help them raise capital and grow their businesses. Over the period of time that I was running it we invested in 115 companies, including firms that you might have heard of like Front Range Biosciences or Work the payroll processing firm, or BDS analytics.
Matthew: Great, and who's running it now.
Patrick: We're actually actively hiring for the person to lead the next accelerators. If you're interested, please do reach out to me on LinkedIn, and we'd love to talk.
Matthew: We could get more of that information at the close of the interview, how to contact you. We have a lot of people listening to the show that are investors or want to be investors but don't really have the lay of the land of what the cannabis industry is, how would you frame the investment landscape for them in a way that's digestible and highlights the most important things?
Patrick: Well, that's a big one. There are so many opportunities to invest in the cannabis industry. From public equities, retail investing in some of the largest companies in the industry, multi-state operators, like Ascend Wellness and Cresco Labs and Green Thumb industries, to crowdfunding of cannabis startups, through platforms like SeedInvest, or micro ventures. In between, there's early-stage funds, there's late-stage investment funds all from accredited investors. Then there's real estate, there's business technology, there's product technology, there's hemp, there's CBD, and then there's the businesses that have to get state licenses to grow, process, and sell THC.
I've probably missed something there, but the landscape is as big and growing as are the companies and the industry at large.
Matthew: You mentioned SeedInvest there and I know, I don't know personally but I know the gentlemen, Jeremy Allaire, who runs Circle, the largest stablecoin company. They bought SeedInvest. Do you hear anything about stable coins or blockchains or different crypto assets being used to raise capital or is it still too early for that?
Patrick: Here and there we've heard of companies utilizing cryptocurrencies and coins to raise capital. It's certainly not the norm. It's more of an anomaly that we hear about but it has happened as, these cryptocurrencies and coins have generated a lot of value over the years and and some entrepreneurs will accept them as investment.
Matthew: With the Garden Fund, it sounds like you're taking elements of CanopyBoulder, your background there, integrating them into the investment world and startups, can you talk a little bit about the dovetailing there?
Patrick: I think as people evolve in their careers they take lessons and learnings from past experiences and parlay them into new opportunities, CanopyBoulder is a very defined and established model of the business accelerator. It real required in-person presence, for the companies to get investment from CanopyBoulder and go through our program. I, through that process, learned a lot. As the companies learn, I think we learned as well.
When the opportunity came up to partner up with Emily and Morgan and the Poseidon team on a new Fund, the timing was right. Their interest and my interest on a strategy focused on the post-seed stage companies right, again, before the series A aligned, and we decided to join forces.
I'll tell you what? It's so fun to be learning, constantly learning, and I feel like with Poseidon, being challenged and learning so much more than I ever did, from Emily Morgan and the team there that have so much incredible experience running two venture funds in the cannabis industry since we all started back in 2013, 14, it's really inspiring. I wake up every day really excited to find the next company that's going to become the Ascend Wellness or the GTI or the BDS analytics in the cannabis industry.
Matthew: This is a sweet spot you found, initially, what happens if you have angel investors come in, they do is it typically a convertible note where they'll say, "Hey, I'll give you this money. Eventually, when a venture capitalist comes along and values your company, will look at how much money I gave you and I'll be part of that valuation." You're coming in, usually, after those angel investors and the business has a little bit more, just a little bit more traction. It's less of an idea, and more like, okay, we're doing something now and something's happening.
Patrick: Absolutely. Typically, startups in the cannabis industry begin with an idea, a couple of founders. Maybe they divert some of their resources towards starting the business, raise some money from their families and friends, perhaps go to an accelerator, like CanopyBoulder or elsewhere. Angel groups to get some seed capital. That's to create the MVP, the minimum viable product, develop their product or service, test it in the market, find out if they can generate some response and positive response or some traction.
It's at that point that we're very interested at the Garden Fund in engaging with these companies and potentially making an investment, that initial traction I would say they've cranked the wheel a couple of times and of this engine of a business and it's starting to hum and sputter and there's something there. Then the founders are looking for partners, with capital to come in who have experience and have been around the block in the cannabis industry to help them scale, grow, build their teams, define their culture, and really set themselves up for success down the road.
With CanopyBoulder, we were investing when people had ideas, or they just raised some family and friends capital, they were just about get their MVP out, because it wasn't that seed stage. It's the post-seed stage where you don't see some traction, you see some success, it's more clear whether or not, at least to us whether or not these teams are going to be successful and that's when we want to get in.
The other thing about that post-seed stage is the valuations are still reasonable. We have a chart in our deck from the data that Poseidon's collected over the years, that indicates valuations, jumping five to six times between this post-seed stage in series A. That's primarily been driven by a number of venture capital from funds that all were found in last four or five years that were focused on that series A stage.
In essence, they priced up the value of the companies. It's created this gap in the post-seed investment stage which we intend to fill with the Garden Fund. So far so good, we've been very active and making our first investments and we're very excited about this.
Matthew: You're not just a "write a check and walk away," it seems like there's more engagement here. I know that warm introductions make a big impact on a new business. You've made warm introductions for me that have been very helpful. Can you just talk about what that process is and how that just helps springboard a new business?
Patrick: Absolutely. It really does take a village for any business to get off the ground. That support structure and people willingly helping you and sometimes willing you into good situations to warrant direct introductions. All of our portfolio company CEOs that we invest in through the Garden Fund join a mastermind group. This isn't an accelerator, it's not an incubator, it's not that large commitment of time and energy that can sometimes be disruptive, but a lighter touch meeting of the minds, a peer-to-peer, founder-to-founder support group.
We created it to drive that confidential collaboration, that support that I talked about, growth and scaling strategies, but also warm industry instructions. Our team at Poseidon has, together, we've invested in almost 200 companies. That's a lot of exposure. Our team has the big network, and our team was assembled to actively help founders. We're not just writing checks and going to play golf. I don't even play golf.
We got to fill the time with something else. We love working with entrepreneurs. It's been a core tenet of our investment strategies, mine, CanopyBoulder, and Poseidon, when they started their first fund in 2013. It just carries on and it's part of our investing DNA, and, like you said, Matt, never hold back in helping people connect with one another in the cannabis industry, no matter who they are.
That's really rewarding for us. We know that it impacts our investments, the companies, and, ultimately, the exit evaluations, which are very important for us, because they're important to our investors who give us the capital that we need to do what we want to do and the impact we want to have on the cannabis industry.
Matthew: You mentioned you have some investors that just want to write a check and say, "Patrick seems like a smart guy, let him handle this," and then other ones are like, "I want to be more engaged on what investments are happening." How do you address those different kinds of investors?
Patrick: It's a great question. We're very open. Wording, a part of our thesis for investing and finding success investing in the cannabis industry is connecting good people with our founders. We do have a significant percentage of our investors who are-- They have interest, but they know the industry is more complex than they have time to understand. They hire us as managers to be good shepherds of their capital. That's the venture capital model, primarily.
We do have opportunities for investors to engage with our companies. We're not just writing checks and sitting back, we're engaged. If they do have skills or specific expertise that will add value to the teams, absolutely we engage them with our companies. It would be wrong not to, frankly. It's a delicate thing. It's often more time than many people, a lot of investors, expect. We want to make sure that they're cognizant of that commitment and they're ready to go and help out these companies. We do that a lot.
Matthew: Let's say you make an investment in a startup, do you then earmark some funds for follow-up investments for the ones that are really getting traction? How does that work?
Patrick: Absolutely. We are earmarking half of the fund for our initial investments and then half of the fund for follow-on rounds. We'll make 20 investments, maybe half a million to a million each in the companies that we're going to get behind, and then see how they develop. For those who are the top performers, we have more capital to invest in that series A and B and beyond.
In addition, our investors in our fund, the LPs, they've proven to be active and very interested in follow-on opportunities that we will set up SPVs, special purpose vehicles, to invest in the companies in the later rounds. We have the capital for that post-seed, series A, maybe a little B. If they go longer, we can help bring in more larger investors into the companies to continue funding their growth all the way to exit.
Matthew: Patrick, you have a background in the nutrition and supplement space, what trends do you see now deja vu all over again where you're saying, "Hey, I saw this with the supplement space, and it seems to be happening in the cannabis hemp space now," anything that you can focus on for us?
Patrick: Absolutely, yes. It's so clear to me, but I don't see a lot of chatter online or investment activity around product technology. Product technology is an area where we haven't seen a lot of investment, but we believe it's going to fuel the next stage of the cannabis, cannabinoid industries' innovation cycle. I saw this happen in the nutrition and dietary supplements industries in the late '90s, early 2000s.
Frankly, consumers continually want a better, more consistent, more reliable product and experience. It's like a product promise that we make in our marketing and our vision. Sometimes, it doesn't always connect. The products don't work as well or they're inconsistent. A great cannabis product is not a destination. It's a journey on a continuum that's rooted in continual investment in R&D and innovation. There's a lot of opportunity there to make things, again, more bioavailable, more efficacious, more consistent and reliable. I think that's what we're going to see driving the next stage of growth.
Matthew: Is there a particular investment that you've made with the Garden Fund that you want to highlight, to give us a flavor of what's going on?
Patrick: Yes. Probably by the time of this podcast airing, we will have announced our first investments in a business technology platform that serves the multi-state operators, order head, and point-of-sale system that's just a better alternative to the existing offering out there. The second investment is into a single state operator, in a limited license state, that has incredible assets, great locations for the dispensaries, and a very large license, the top license, the largest license one can get in that state for cultivation.
It's not only that these are great solutions or products or companies, but we're able to target them for investment at the right stage, right before the dispensaries opened, right before the first shovels in the ground with the cultivation, just as this business technology company is starting to close other multi-state operators and expand to other states. These investments opportunities are often coming to us from referrals in our network.
We've invested our time and energy running around the country and the world making investments and getting to know people and built great relationships. When these people that we've invested in and we've worked with over the years find good companies that fit our profile, they pick up the phone. We're very lucky to have an incredible network effect to help drive our deal flow in the cannabis industry. With the Garden Fund, we are aggressively taking advantage of that network so that we can capitalize on it for the benefit of our fund investors.
Matthew: Now, for seasoned cannabis investors, they probably heard you say "limited licenses," they know exactly what you're talking about. For the benefit of new investors and listeners, can you talk about why that's important?
Patrick: Absolutely. There are states where it's wide open. Most anybody, the hurdle for getting a license for a dispensary or a manufacturing facility or a cultivation is very low. Colorado is a good example of that, where there's not a lot of limits put on the number of licenses that the state is going to hand out. As a result, the valuation, it's like supply and demand. There's a larger supply of companies out there, so the demand when there's an acquisition is lower.
That means the valuation multiples for companies at exit in, say, Colorado are going to be lower, because it's a wide open, adult use state. Now, a state like Massachusetts, where it's a limited license state, they've only issued so many licenses for cultivation, only so many for dispensaries, only so many for processing and delivery. If you're able to win a license in that limited license state, the supply of licenses from the state is lower, so the value of them is higher on the market, because there's more demand for those assets from the multi-state operators or investors.
It's not a new strategy, but the strategy makes much more sense now for investors to go into the single-state operators in limited license states, because, there's a lot of institutional capital flowing into the multi-state operators and later stage businesses in the cannabis industry. That's not just money to park in the bank for a rainy day, this is money that is coming in, from the institutions into these larger companies that going to use for, to fund and fuel acquisition and consolidation strategies.
Our strategy at the Garden Fund is very clear, we're investing in the post-seed stage where we can get the greatest value in companies that are going to disrupt and be valuable assets in the industry and become acquisition targets and in the short term. We're trying to take all the lessons we've learned from seven to eight years investing in the industry and seeing so much happen in the cycles happen, and raise a fund that is timed right for not only investment, but exit in the cannabis industry.
Matthew: Now, Patrick, you've heard so many pitches, I can't imagine how many. If you were sitting down with a founder that was prepping his or her first pitch deck, and they were about to go out and say, "Hey, I need some pointers here Patrick, what would you say, one do, and one don't?
Patrick: That's a good question. I think the do, is to make sure that your pitch and narrative is cohesive with your financial model and your planning. A beautiful pitch is not going to do it, you really do have to have a full data room of that is cohesive and logical, and the narrative is consistent. If you're saying, you're going to grow and double in size in three years, in the financial model, I want to see investments in marketing and sales in year two, that will pay pay dividends to the company in year three. That's definitely one thing that I'd say you absolutely have to do.
One thing that I would say you absolutely don't want to do, is be apologetic. This is an opportunity come in there with confidence, you're presenting a great opportunity for the investors, if you've done your work. I think there needs to be more confidence displayed by entrepreneurs in the cannabis industry, not arrogance. There's this comfortable confidence that we'd like to see in our founders. They're ready for the challenge, their eyes are wide open, and they're not apologizing for digging in, and going for it.
It becomes very apparent when you have a meek founder that comes in and they don't feel completely comfortable. There's no reason to continue the meeting, come back when you can fell more comfortable, maybe you've done some more work, you engaged with the industry a bit more, you learn more, and we'd like to see that.
Matthew: Now, there's some founders that think they have to have all the answers right now, and you can see a panic go on when they're like, "Oh my gosh, I have to come up with an answer, even though I don't know what it is." It's perfectly acceptable to say, "I don't know, I'll find out and get back to you."
Patrick: Yes. Yeah. It's that confidence and self-awareness to say that, exactly that. Matt, very often, I don't have the answer, and I like to see that in our founders that humility, with the confidence to admit it. That goes a long way. If the future was so clear in the cannabis industry, everybody would be diving in and launching businesses.
One of the challenges is that, it's not always that clear and you need to be very in- tune with the industry and have your radar on, because you will have to pivot, you will have to zig and zag every once in awhile and overcome those moments that every founder has, every team has, where you're faced with adversity and power through it. Those that are aware of that, and have the confidence, then, understanding that's going to be part of the journey, they definitely have more success.
Matthew: Is there anything that a founder typically does that you think is not important, but they seem to think it is? Like the color motif of their pitch deck or something. They're straining over that one detail and you're like, "You can bleed black and white. It doesn't matter." Is there anything you see like that over and over?
Patrick: You know, every pitch is different, every pitch person approaches it differently. I would say that, the one thing that I like when I hear a pitch, and really catches my attention is when the founder or the founding team has done a listening tour for their target customers.
If they're developing a point-of-sale software-- Kyle Sherman, of Flowhub, is a great case study here. Before he started Flowhub, he went and worked as a budtender at that dispensary. He got to know what it's like to be a budtender, and what tools they use, and where the shortcomings are. That really informed his decision to launch Flowhub and joined the industry in earnest.
We had another founder, Henry Finkelstein, of Cannabis Big Data at CanopyBoulder who'd do that. He went on a listening tour for months, and just sat down and listened to the problems that operators in the cannabis industry had, and that informs his strategy. I guess, what I don't like, is when a founder comes in and has what seems like a great idea, but they haven't really gone out and talked to the market to confirm that.
There are a lot of great ideas, ideas that sound great, but either the timing is right or the market won't pay for them, and they just don't know that. It's a shame, because it just takes a little bit of effort and connection. When we see that, that a founder has done that, that's a big plus.
Matthew: Yes. It's bridging that gap between what you believe to be true, and what's actually true. They're saying exactly what their pin-points are, opportunities are, versus what you thought they are, so you get validation and say, "Oh, I heard this over and over again, I can almost finish their sentences because the last three dispensary owners said this."
Patrick: Yes, and that they'll pay for it. It's an acute problem, they're aware of it, they want to solve it, and they will pay someone to help or a company to help solve their problem. There's a lot of problems that you just let go and you don't deal with. Mason Levy who one of our founders at CanopyBoulder, now runs a business called Swvl, it's a chatbot business, very high-tech stuff. He's always said, "Some fires, you just got to let burn." We see that in the cannabis industry.
There's a lot of challenges, this isn't easy, right to run a dispensary or to run a grow or run a single state operation, you're not able to solve every problem that comes up right away, you got to let some of those fires burn. As that type of awareness getting to the, "Yes, it's a problem, and these people will pay for it." That makes a big difference.
Matthew: Okay. For a listener that's comfortable with their Schwab account or Fidelity account, their Vanguard account, they log in, they see the balance, they're happy, they're like, "What is putting money into a cannabis fund going to do for my portfolio? How should I think about it and position sizing and that type of thing?"
Patrick: Well, you know, when I think about that all venture capital in the cannabis industry, what I think about is, the potential, it's high risk, but it could also be high returns. You're investing in privately held companies, they're not liquid, they're at a stage perhaps where they could succeed or fail with or without the right help and support. There's definitely risk there, but the reward is the 10X returns, that I think a lot of investors like looking at the cannabis industry, they assume that they will get.
As the industry grows and you have these larger multi-state operators, they're great, they've earned the right to have these billion-dollar evaluations, they've done it, they've put together the assets across multiple states, they're operating, we're seeing incredible growth, but they're at that stage where they already public on investment. You may not get a 10X in a company that's publicly traded multi-state operator, you might get a 2X, or a 3X.
I think a lot of investors who joined the cannabis industry, they think about the cannabis industry in the way that we do, and they want the bigger returns. Investing in venture gives you that opportunity where you can get a 10X with the investments. Whereas in some areas in the later stages, the math doesn't work out, they're not going to grow by 10X in a couple of years, but in venture, you can still achieve those rates of return.
Matthew: There's something fun too, about being part of the germination process and just witnessing things happen and watching founders struggle, struggle, struggle, and then, succeed, and then, watch things happen. It's like a Shakespearian play in many ways because it's not easy, it's this drama that unfolds, and then, there's this breakthrough and things happen, but when you look back, it was like, "Wow, that was quite a story."
Matthew: quite a journey, you can take five to 10 years too for sometimes these things unfold. Also, it seems like having it be illiquid in some ways is less, causes less anxiety than looking at a ticker every minute on your screen. What do you think about that?
Patrick: Investing in a venture capital fund like the one that we have, we're very open and transparent with our investors. They always say, in the cannabis industry, you can be in the stands or you can be on the sidelines or you can be on the field. When you were a venture investor in a fund like the Garden Fund, you're on the sidelines and we're on the field with the founders.
It's a big difference, you're a lot closer to the action. Like you said, yes, there's a lot of growth and development and evolution and innovation in this post-seed and Series A companies, it's really exciting. It's challenging, you get to see the challenges that you maybe don't see when you're investing in just a publicly-traded company with a very curated and crafted narrative from the CFO and the PR firm, it's very different.
For me, that's not for everyone, I really enjoy that journey that the founders go on. I think all of us in the Poseidon Garden Fund feel like we can contribute to the success of the companies. Just an introduction, an introduction that would take a founder a month to get, we can do in a week. The access that we could provide them in a day that might've taken them a week, it all makes things way more efficient for them. That's a big part of what we're trying to do here and be active with our investments.
Matthew: Patrick, you've been on the show a few times over the years, so I have to come up with some new personal development questions for you. You live in a special place in Boulder, what is one thing you most love about living in Boulder and one thing you miss about when it was smaller?
Patrick: [laughs] One of the things that I love about Boulder is the easy access to outdoor activities and recreation. That's a thing for me. I get up almost every morning, the crack of dawn, and get out on my bike or take the dog on a trail run. That really energizes me and helps set the tone for the day. I love that the foothills are just a few blocks away here in Boulder.
That would be my answer to the first part of the question. My answer to the second part of the question, Boulder has gone through a high growth period. A lot of people, they like to complain about how that growth and it bugs them. It really doesn't bother me. I don't really mind the traffic, but then again, I used to live in Chicago and you have to deal with the traffic there. In San Diego, I have to deal with the traffic there. There's not a lot that bothers me about Boulder, I really do enjoy it.
Matthew: Oh, that's good. The bike paths were my favorite thing when I was there. I really enjoyed the bike paths everywhere.
Patrick: Yes, you can really tune out and just cruise for hours. That other thing, there's just a lot of ways to enjoy the outdoors here in Boulder.
Matthew: What's one trend you see in the cannabis industry that you think the market is not appreciating enough?
Patrick: One trend in the cannabis industry that the market is not appreciating enough. I don't know, that's a good question. We used to scratch our heads on why there was so much capital going into the Canadian market. That fixed itself. There's way more attention on the US market and the multi-state operators, and it's like that's been refocused. One thing that I think perhaps the market is not appreciating right now is the fact that there's so much more that's been figured out in the cannabis industry on how to run these licensed operators.
Back in 2013, '14, when we started our efforts investing in the cannabis industry, me at CanopyBoulder, and that scene here at Poseidon was the operators really didn't know what they needed. They were just trying to figure out how to stay in business and supply the market and serve the market. There wasn't a whole lot of refined awareness of what business technology and services they need.
That has changed completely. Flashing forward to today. it's much more clear what's needed. If we're very clear that IRS Code 280E, it impacts the decisions on almost all expenses including business products and services and technologies. Perhaps, to narrow it for you, we see much more interest from the licensed operating companies, the dispensaries, the manufacturers, the growers, in technologies and services where you can tie the expend on that service and technology to the generation of a new dollar in revenue.
Ideally, 16 to 30 new dollars in revenue. If you're buying your licensing or becoming a customer of a business like Happy Cabbage, they're a data and analytics firm based in the Bay Area. When a company brings them on and pays them a dollar, they can directly tie that $1 spend into 16 new dollars in revenue for that company. Because you can't deduct the expense of that $1 you spend on Happy Cabbage from what you're going to use to calculate your taxes, you got to make sure these expenses on technology are really driving the business forward. We've seen that awareness develop in the last two years and has become the norm now. I think that's underappreciated.
Matthew: What is your favorite unhealthy comfort food or guilty pleasure?
Patrick: Oh, very easy. Chocolate chip cookies. During COVID, I've been making chocolate chip cookies probably every week and a half, giving them to our neighbors, giving to friends. I don't know how it happened, I think it just became a thing. I've been baking batches of delicious chocolate chip cookies. They're pretty good. I'm confident they're pretty good. Whenever you come back into town, I will make sure that you get to try them as well.
Matthew: Thank you. My mouth's watered a little bit.
Matthew: Patrick, please spell your last name for anybody so that they don't misspell it, and tell us how they can connect with you, learn more about the Garden Fund, and all that good stuff.
Patrick: Yes. Yes, no, thanks, Matt. My last name's Rea, and it is spelled R-E-A. I would say the best way to get in touch with me would be through LinkedIn. Just look me up Patrick Rea, R-E-A on LinkedIn, and you'll find me very easily. That's a great way to get in touch about anything in the cannabis industry. This is the life that we've chosen. We've got a lot of great experiences and a lot of opportunities for everybody who wants to come in and join.
Whether you're looking to join a team, you want to make investments, you want to have some better awareness of how to do that or you're an entrepreneur who's got a little bit of a tiger by its tail and is looking to figure out what's next, that can definitely, and we can help with that.
Matthew: Patrick, thanks so much for coming on and educating us about the investment landscape. Good luck with your next batch of cookies.
Patrick: [laughs] Thanks a lot, Matt. I really appreciate everything you do and can't wait to get you back in the Boulder one of these days. It's been in a while.
Matthew: If you enjoyed the show today, please consider leaving us a review on iTunes, Stitcher, or whatever app you might be using to listen to the show. Every five-star review helps us to bring the best guests here. Learn more at
What are the five disruptive trends that will impact the cannabis industry in the next five years? Find out with your free report at
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Lastly, the host or guests on CannaInsider may or may not invest in the company's entrepreneurs profiled on the show. Please consult your licensed financial advisor before making any investment decisions. Final disclosure to see if you're still paying attention. This little whistle jingle you're listening to we'll get stuck in your head for the rest of the day. Thanks for listening and look for another CannaInsider episode soon. Take care. Bye-bye.
[00:39:53] [END OF AUDIO]

Ep 347 – Michigan Is The Most Interesting Cannabis Market, Period

fabian monaco gage

The Michigan cannabis market isn’t on everyone’s radar, but it’s large and growing faster than you might think. Here to tell us about it is Fabian Monaco of Gage Cannabis.

Learn more at

Key Takeaways:

[1:17] An inside look at Gage Cannabis, one of the largest vertically-integrated cannabis companies in Michigan

[1:45] Fabian’s background in investment banking and how he came to be president and CEO of Gage Cannabis

[3:01] Michigan’s history in medical marijuana and how the state’s cannabis market has evolved over recent years

[5:18] Why Fabian believes every cannabis brand needs to be vertically integrated right now

[7:05] The pros and cons of contract growing versus buying wholesale

[11:05] The most popular cannabis products in Michigan right now and surprising new trends to look out for

[17:49] How Gage Cannabis has successfully employed curbside pickup to gross almost 99 percent of their profit

[21:29] The importance of brand continuity and how this has helped Gage grow so quickly

[24:38] Cookies aka the “Coca-Cola of cannabis,” a popular California-based cannabis brand that has partnered with Gage to expand into Michigan

Click Here to Read Full Transcript


Matthew Kind: Hi, I'm Matthew Kind. Every Monday look for a fresh new episode where I'll take you behind the scenes and interview the insiders that are shaping the rapidly evolving cannabis industry. Learn more at That's C-A-N-N-A, insider dot com. Now here's your program.

Michigan is a market not on everybody's radar, but it is big and growing super-fast. Here to tell us about it is Fabian Monaco, CEO of Gage Growth, a vertically integrated cannabis retailer in Michigan. Fabian, welcome to CannaInsider.

Fabian Monaco: Thank you. Thank you for having me on. I appreciate it.

Matthew: Fabian Monaco sounds like a character from a spy novel. I feel like my name is vanilla in comparison. What do you think about that, Fabian? Should I change my name? Can I be Matt Monaco?

Fabian: Hey, look, [laughs] I'll admit, Fabian Monaco is a nice, interesting and unique name. I don't come across too many Fabians. That's for sure.

Matthew: Yes, that's great. Give us a sense of geography, where are you in the world today?

Fabian: Right now, I'm in Toronto. I go back and forth between Canada and Michigan. Right now, I'm in Toronto, Canada.

Matthew: You could almost jet pack from Toronto to Michigan. That's pretty easy, right?

Fabian: Yes, very, very quick flight. Very, very quick.

Matthew: What is Gage on a high level? Give us a picture.

Fabian: Gage is one of the largest vertically integrated cannabis companies in the state of Michigan. That's pretty much Gage at a high level. It is the premier brand in the space right now in Michigan. We continue to command some of the highest price points in the state of Michigan, put a lot of effort and time into the products that we bring to the consumer and the medical patient in Michigan, and something that we're very, very, very, very proud of what we built.

Matthew: Can you share a little bit about your background, journey, and how you got into the cannabis space?

Fabian: Yes, good question. My background started actually more in capital markets. I used to be a lawyer and went into investment banking at this place called GMP Securities. GMP Securities was at the forefront from a capital market standpoint in the cannabis game. They had brought Tweed public. I joined them shortly after that and frankly got to work on a lot of the first of the industry. The first acquisition when Tweed bought Bedrocan, the first $100 million financing, the first IPO.

I got to, again, work on a lot of the first in the industry and really transitioned to more on the operational side of things a couple years ago when I started Gage with a couple of my former colleagues and, frankly, two of the best operators I know in the space. I'd seen probably over 100 gross and cultivation assets and operators. These two founders of Gage really stood out. We're really one of a kind and, frankly, the rest is history. That was three and a half years ago and here I am today as the CEO of Gage.

Matthew: You're pretty young guy. How old are you if you don't mind me asking?

Fabian: 35.

Matthew: Yes. Well done. Tell me, why Michigan?

Fabian: It's a great demographic in terms of just the people there and the consumption habits of the people in Michigan. They're a very proud state as well. They've been consuming cannabis from a medical standpoint for many, many years since 2008 when their caregiver program came into place. Michigan was actually the second largest medical card holder system only behind California. We had this great underlying base. We knew Michigan was going to be a massive, massive market. Now today, Michigan already is the third largest market based on run rate.

Matthew: Yes. I think people don't realize that. Also, when you talk to people in Michigan, there's no resistance, it's like, "Yes, cannabis should be legal." "How about you?" "Yes." "How about you?" "Yes." I haven't met anybody from Michigan who's like, "No, forget-- this is crazy. Potheads everywhere." You don't hear that?

Fabian: No, not at all.

Matthew: They have a huge background as cannabis medical market, and growing like crazy. Talk about the locations of your retail operations.

Fabian: Yes, we now have eight different retail locations across the state of Michigan. We have 13, we'll have all those 13 open by the end of this year. We're actually trying to get to 20 by the end of this year via acquisition. We have a whole bunch lined up for us in the next little short while here and look to have that full 20 portfolio of retail locations open by the end of this calendar year. We really, really took a lot of time and spent proper analysis to finding markets where we knew they were going to be big markets and properly situated from a geographic standpoint.

We can reach 90% of the population within a one-hour drive with the 13 locations that we have currently. Again, only eight of those are operational. By the time we get to 20, I'm hoping that we can reach close to 100% of the population within a short 20, 25-minute drive, and that's our goal. That's how we're really setting up our retail. Really trying to make sure we have the best access to all the consumers. Delivery is available in Michigan. Is dynamic delivery as well. It's something that's going to really explode that market. It's, again, already so big, can't wait to delve into the delivery aspect of the strategy as well.

Matthew: You're vertically integrated as I said during the intro. You grow your own plants, you're doing your own processing, selling your own goods at your own retail stores. What do you think are the biggest benefits of being vertically integrated? The tradeoff would be maybe you're not focused, but others would say, "No, we're very focused on everything from bottom of the funnel to the actual transaction." What do you say to that? What are the benefits?

Fabian: Yes, I think you need to be vertically integrated in the space right now. The way the market is going, you need to control every aspect of how your brand as a company is presented to the consumer. If you literally have no aspirations of being big cannabis brands, you can go set up a cultivation asset, sell wholesale, probably make good money. That can be your strategy. For us, we really want to make Gage the biggest and best brand out there. With that, you need to be vertically integrated, you need to control every aspect from seed all the way to smoke. You can't necessarily give that opportunity to another third party to potentially misstep and have a scenario where they represent your brand poorly.

Even for us, we actually sell the majority of our product through our retail channels. We don't actually sell much wholesale. That's again by design, it's by strategy. We wanted to ensure that we get every single grain of cannabis to the consumer. Every single process that goes into that, we control it. We control the narrative, we explain to the consumer what they're getting when they come to our retail stores. They only have access to Gage and Cookies-branded product when they come to our retail stores. Again, in Michigan being slightly competitive especially if you're trying to grow a brand, vertical integration is very, very key.

Matthew: What's the difference? Let's talk a little bit about contract manufacturing and wholesale. What's the difference for people who are like, "Wait, what's contract manufacturing and what's buying wholesale? Or contract growing and buying wholesale?" What's the difference between those two?

Fabian: Wholesale is a scenario where Matt is growing a couple pounds of cannabis, Gage will come and purchase that particular strain or flavor that Matt is growing. Contract manufacturing is a little different. These are licensed entities that came to us that wanted to grow Gage branded products. We give them those starting materials, those cuts to essentially grow for us. It's a very capital light model, and actually something that's not really been widely available to every cannabis company out there. We've been blessed again, with the fact that our brand is very, very well known in Michigan and very, very well recognized and respected.

We've had the opportunity where we now have 10 different exclusive contract growers within our network. This spans across 10 different facilities. For us, it gives us an opportunity to expand exponentially our cultivation footprint. Also, doing so in a capital light way. We don't pay for the CapEx, we don't pay for the OpEx of these facilities. In fact, most of the time they cover our packaging, our testing and secure transporting. I'm getting product on my shelf for $0. I'm making 50 plus percent gross margins.

More importantly, the difference between wholesale and contract manufacturing, you're controlling your supply chain. You know what product's being grown, you know when it's going to be harvested, you know when it's going to be packaged, you know when it's going to get on your shelf. With buying wholesale, you don't know how many pounds this person has, what flavors they have, when can they deliver it, et cetera, et cetera, what price it's going to be.

Here for us via our contract manufacturing agreements, we've kept it really, really simple step by step process throughout the growing process and then obviously selling that product to us, which just makes it very, very simple and very easy for us to control our supply chain.

Matthew: Yes, and this is helpful for the growers too because they get predictability. They're like, "I know who's going to be buying this at the end after I've cultivated this, cured this and everything. I have some comfort knowing that there's someone at the end here, and if I do a great job, they're going to keep working with me." You're both incentivized to work together.

Fabian: Totally. Totally. It's a win-win scenario for both. They benefit financially, and then more importantly, they get to intangibly benefits where they're dealing with one counterparty all the time, one purchaser, they don't get to go chase multiple parties for their money. It's just a great relationship. It's truly a win-win scenario for both parties.

Matthew: The first time I saw this was in Dairyland of Wisconsin, and there's all these dairy farms and you can see they have out front they say, "We're a craft farm," or-- I can remember the other big dairy companies.

I would think like, "Wow, do you want to do this?" Then you talk to some of the dairy farmers because who doesn't talk to dairy farmers in Wisconsin, Fabian, you're probably doing something a lot more interesting, but they would say, "Oh, yes, we do like this because of predictability. We have what keeps us up at night, what's the price going to be when it's time to go to market and stuff like that?" It takes away a lot of that stress for them. I think it is a win-win when both partners are properly aligned.

Thanks for explaining the difference between contract manufacturing and wholesale. I think it's an interesting model. I can certainly see if you're making a 50% profit margin with a contract manufacturing partner that you like, that's a no-brainer and something that scales probably pretty well, I would imagine.

Fabian: Exactly. No, exactly. Just the speed at which the company can grow the flavor offering when it comes to flower just expands exponentially as we get more and more of these contract growers online. Right now, five of them are operational. We'll have the full 10 by the end of the year and even looking to add potentially even more on top of that 10.

Matthew: What's selling the best right now in your retail stores? Is there anything that's surprising like, "Hey, this is unusual that we're seeing a purchase of this and it's a little bit out of pattern?"

Fabian: Yes, flower sales are super strong. Michigan, or Michiganders as they like to call themselves, they consume some of the highest amounts of flower on per capita basis. For us, we specialize in flower. That's where we built our brand. We didn't try to be the jack of all trades trying to get into a variety of product categories. Again, we focused on flower. On 4/20, as an example, we had over $500,000 in sales from just seven stores. Of that 500 plus, 73% of it was flower sales. For us, we continue-

Matthew: That's high.

Fabian: -to see strong demand for flower. Yes, I would say over 50% of our sales are flower and pre-rolls. With that being said, it's still a market and category that we focus on quite a bit and one that's selling well.

Matthew: 4/20 is the Amazon prime day of cannabis and a lot of times, there's through that whole supply chain through the-- A lot of technology goes down that's connected to the cloud intermittently, but I notice that some of the technology partners and integrators in the space have adapted to this and they know these big traffic spikes are coming, is there any way to smooth out the 4/20 experience? Or does it go totally smoothly?

Fabian: No. You know what to expect, right? Our operations team and the founders have deep experience in space right now, they know what to expect. You embrace it. It's a wonderful day. It's an exciting day. It's something that as chaotic as it can be, even for us, it was pretty wild especially fighting with the big long lines trying to get customers in and out as quick as we could. It's something that you embrace and something you appreciate. It's a blessing. It's a blessing to be in an industry that's in such high demand right now in terms of product that we can't complain whatsoever.

Matthew: Let's talk about the basket size of the store at Gage. Can you talk about basket size and what you think about that?

Fabian: Yes, that's a good point to bring up actually because that's where we really, really excel. We really, really show how deep the team is in terms of knowledge and how they run dispensaries, and more importantly just indicates how big of a brand we have. Michigan averages about $85 the last study that we saw. That's a very good basket size. If you compare that to most other states, it's exceptional. For us, we're nearly double that. We had 164 average basket size in 2020. So far in Q1 of this year, we've been averaging depending on the month between 150 and 170. On 4/20, it was 171. The week leading up to 4/20 it was about 165.

We've been in and around that zone pretty consistently now. Keep in mind that 2020 number I just gave you, that was across the whole year across all the retail. No cherry picking, no saying, "Hey, this is with our best store, this is what basket size we get." This was across our retail channel. There's some longevity and consistency in the numbers that we're seeing. Again, if you compare that to anybody in the industry, we're completely head and shoulders above everybody else.

Matthew: Yes, that's really big. Do you provide like debit card check out or ATM in stores? Or how can people pay?

Fabian: Yes, we predominantly accept cash. We've been trying a variety of options to get debit and credit cards in the stores. We do have some of those options, but again, it's not widely used just yet. It's a shame that the industry continues to be plagued by a variety of banking and insurance issues. To have the ability for someone to just come and put their Visa down or Amex down and buy a product. Not only I think is it going to make it easier for us and less risky for us as a business, but then even the consumer, you know what I mean, does have the propensity to potentially even spend more.

It can even increase the sales that we see once we get this potentially SAFE Banking Act passed which who knows if we're ever going to get that passed any time soon. Again, I think as the industry opens up more and more and we actually have that ability to-- as if you're walking into a liquor store and having that same payment capabilities. I think you're going to see the industry explode even more than it already is.

Matthew: Yes, I agree. You're making 3% less profit margin because of all the charge costs but people are much more comfortable. Also, when you're not handling bills, money seems a little less real. Like when you go to Disney World, they let you charge everything to a bracelet and man, you're just flying through stuff because it's like money's not real. I'm dealing with these pretend dollars, Disney dollars. It's that type of thing.

Fabian: Exactly.

Matthew: It's like there's zero friction. I definitely see that coming. You probably really feel being in Canada and then working in Michigan, it's like you get to see like, "I live in a market where it's federally legal, cannabis is, and there's none of these banking shenanigans. Then I go down to the US where it's this crazy madness where they picked one thing to get upset about and ban and then they did that. Now we have to deal in cash." Probably is super frustrating because you live in a place where it's like, "We don't have these problems."

Fabian: No, very, very frustrated. If you go to a store here in Canada, again, similar to what you said. If you go there and you have $100 or $200 to spend, sometimes if I go to a store and say, "Hey, I want this or that," and then the budtender says, "Have you tried this new version? Or this new flavor?" At times, again, because you're paying with your card, you say, "Yes, sure, throw it in." If you came only with cash, there's also that ability to potentially not even be able to pay for it and you have to say, "No. I just got to come and get what I came here for." The ability to up sell consumers as well is reduced.

Again, that's not the name of the game always, just trying to get the consumer to spend more. The risk associated, again, with handling cash all the time and even during a pandemic, it is there. You'd expect and you'd hope that sometime soon we're going to get some changes there. Especially at a state level, it's a no-brainer. It's really a no-brainer. There's absolutely no reason why you can't get proper banking to this industry.

Matthew: Let's talk about curbside pickup. How big has that become in the last year or so for you?

Fabian: Our curbside pickup is pretty much 99% of our business right now.

Matthew: Oh, wow.

Fabian: Yes. All the numbers I gave you, especially on basket size, keep in mind, those are actually on the curbside pickup numbers. We only had the store open I think a little bit near the late summer in 2020. Since then, the stores have been closed. You cannot enter the store. It's a little bit of a frustrating scenario as well there. You'd love for people to come see the stores. We've opened up a bunch of new stores actually more recently and no one's really been able to come and see inside them.

We're really proud about our retail footprint and assets. It would be great to have people walk through the door, but for us, as well, you got to keep safety in mind. Safety of the employees and safety of the consumers and medical patients. Everyone follows strict protocols but again we haven't really had the comfort to go and open up the store. Curbside pickup's a big, big game changer for us.

Matthew: I get emails pretty much every day or several times a week from people asking how can they get in the industry? You said you're trying to expand to 20 stores in Michigan. When you're trying to fill positions, what are the key positions you're looking to hire for just so people can get an idea of the holes you're looking to fill?

Fabian: Pretty much across the country, you're always expanding your accounting and finance department. You're always expanding the employees at retail as well as you continue to open up more and more retail locations. Even for those that are looking to get in the industry, sometimes it's growing so fast that even the entry job that you initially get with a company, you could see yourself four or five levels above that so quickly like within a year's time. Where can you get that opportunity or that type of career expansion so quickly? You just can't get it anywhere else besides the cannabis industry.

We have people that came in as budtenders, moved up to the assistant manager of the store, then manager of the store, then manager of a regional part of the state and then moving up to director of retail as well. There's just so many opportunities to really grow fast, especially if you're performing well because every single company out there, especially the ones that are doing a good job, are growing so exponentially that they can't get enough people to come work for them.

Matthew: Great points. A lot of people don't have a background in retail or finance or accounting, but they have some complimentary skill you're looking for. How big a piece does attitude and ability just to solve problems come into your hiring decisions?

Fabian: You don't always get that opportunity to really figure that out with the individual that you're hiring. You look to references, you look to the things that they're saying about the industry and why they're interested in the industry and that's where you really got to base yourself on. It's funny, it's not as easy to hire people in this industry as people think. You think that, "Oh, someone who's working at Pepsi or Red Bull or some of these other great CPG type companies, they should be an amazing addition because cannabis is similar."

At the end of the day, it's a different base study. There's a lot of learning especially for those that don't have much knowledge of the cannabis industry and it's not always easy to attract people that fully get it. For us, it's about having, like you said, someone that has the right attitude, that's hungry to learn, that's hungry to dive basically headfirst into a brand-new industry. That's what attracts us to candidates and that's the people we usually hire.

Matthew: Looking at the video of your stores and your marketing and your message, it seems like a very clear, crisp marketing message. How do you create that? Because, well, even the fact that the name is short, I think is helpful to own one word in the prospect's mind, Gage. I think that's very helpful, but then your whole branding is very consistent. I was wondering if you could just open up the curtain at least. What are the marketing meetings like when you talk about like brand touchpoints, how we want the brand to be conveyed, and those types of things?

Fabian: That's some good analysis there. Not to give too much of our secret sauce away, but you hit on a lot of points that we focused on. Obviously, the name being quite short, obviously to the point. The fact that for us, if you compare us to a lot of the other cannabis names out there, which always baffles me, you can go into a store, a dispensary, and not even know that a specific company owns that store because they're so bifurcated in their branding strategy. They have branding for retail and then branding for the product.

For us, we try to keep it pretty simple. You have Gage as the legal publicly-traded name that trades on the CSE in Canada under the symbol Gage, G-A-G-E. You have the dispensaries that are Gage branded. You have the product that we sell that's Gage branded. You just have this continuity in the brand where it's all just Gage, Gage, Gage. I think that helps. Probably why we've been able to grow our brand so quickly, it's not a scenario where you go into a dispensary and say, "Who owns this dispensary? What's this about? What is this product? Is this grown by the company that owns this dispensary? Is it not?"

You have a little bit of that scenario where the branding is just not consistent. Some cannabis companies, don't get me wrong, do do a good job of this as well. Trulieve as an example in Florida, I think a lot of their success is, again, Trulieve as the legal entity name, Trulieve as the publicly traded entity, Trulieve dispensaries, and Trulieve product that they sell within their dispensaries. It's really, really a straightforward strategy.

I'm baffled as to why not a lot of other companies follow it in this industry, but again, we put a lot of time into our social media, a lot of time into interacting with our consumers. That's how you learn what the consumers are liking, what they actually want from you. We have close to 30,000 followers on our social media, on Instagram for our Gage Cannabis profile. We have close to 30,000 followers for our Cookies Michigan profile.

We're constantly interacting with our consumers, again, to find out what they're really looking for, what they're saying about our company. Are they happy about a new strain that drop? Are they happy with the bag of art that was associated with that new strain? Et cetera, et cetera. It just helps in a big way. To us, it seems pretty simple but not a lot of companies are following a similar strategy and we're frankly happy they're not right now.

Matthew: Tell us about Cookies there because I think you're talking about the California brand Cookies. I just want to make sure everybody knows what you're talking about and why you're excited about it.

Fabian: Yes, sure. I should have brought this up earlier. We have an exclusive arrangement with the Cookies brand out of California. Cookies is hands down the best in the space. They're the Nike of the space. The Red Bull, the Coca-Cola of the space right now. A couple of years ago, over two years ago, they weren't at that time but we knew they were really gaining in prominence. They'd been around for a good solid six, seven years and recognized, "Hey, this is a brand where the street culture, the subculture of cannabis is really, really appreciating."

We partnered on an exclusive basis with them and still have that exclusivity for the next step three years here where we essentially run the brand for them in Michigan. We run two different Cookies-branded dispensaries in Michigan, one on 8 Mile in Detroit, one in Kalamazoo. It's the first adult-use store, the latter, the Kalamazoo one, in the Midwest, and obviously in Michigan. Obviously, the Cookies medical one in Detroit was the first store in Michigan. We opened that up last year in January.

These are some of the best-performing dispensaries in the state. We just really learned so much from that company. Again, it's like starting a sneaker company with Nike in Michigan. It's been a scenario where we get to learn so much from the company and more importantly, continue to grow with them. We put a lot of effort into their branding as well within Michigan making sure that we're representing them the best that we possibly could.

That again helps elevate our brand to another level. I'd say when we first opened our dispensary in September 2009, our very first one, probably the majority of the people in the line were there for Cookies products. They didn't really know who Gage was. Now, these days, I'd say Gage and Cookies are pretty synonymous with each other in Michigan, and more importantly, Gage is on a similar level from a branding standpoint.

Matthew: Great explanation. Thanks. Well, Fabian, I'd like to transition to some personal development questions to let people know more about you personally. Is there a book that's had a big impact on your life or way of thinking that you'd like to share?

Fabian: To be honest with you, not really. I used to be a big avid reader, but I'd say over the past decade, not a lot of time for reading. I'm reading so much for my work that at the end of the day like most of us out there, you're just looking to either go out with some friends or more importantly, just sit down and watch some TV, watch some Netflix. From a book standpoint, it's a little tough to say. Haven't really been swayed or moved by anyone.

I'm a big fan of Malcolm Gladwell, have read a lot of his books, a lot of the ideas that he puts forth in his books. The way he looks at things, his analysis that he's done, his research is always intriguing. Especially the one where it's like you got to put 10,000 hours into something to really become an expert, I think that's pretty key. Myself and all the people at Gage are putting in tons and tons of hours into this company on a consistent basis, always trying to learn, always trying to be better.

I think that's particularly important because when you become overconfident or arrogant about your branding or your company, that's when you start to slip up. We always try to view ourselves as a company that can always learn, can always be better, can always achieve higher. Even if we're achieving some great success, our motto within our company is not good enough. We should achieve 10% higher. Those are some of the ideas that generally I got from my previous reading, but generally, no, I can't say one particular book.

Matthew: When you're looking at the industry from a 10,000-foot level, do you think there's any trend or anything you see that's going to be big, but the market or the general public at large doesn't seem to see it quite the same way you do?

Fabian: I know it's funny. This is a 50/50 question, but I think the size of the market is being underestimated in a big way. I think a lot of the studies that are coming out are being done and people are not fully aware of just how big this market is. We are achieving outrageous growth generally as an industry with so many constraints, so many handcuffs on us when it comes to banking, when it comes to the ability as we were talking earlier to predominantly just operate in cash and not having the ability to use any credit cards or, frankly, any debit cards in most scenarios.

I think once the industry really starts to open up, once supply starts to open up in the various states across the US, I think it's going to surprise a lot of people. If you take a look at Colorado, Colorado six, seven years into their program, their adult-use program, and yet I think they grew 20% from December 31st, 2019 to December 31st 2020, which is just crazy. I think people are really underestimating the size and the power of this industry.

Matthew: How about this, Fabian, what's your favorite, key here, unhealthy comfort food?

Fabian: My background is Italian. I'd have to go with Italian food and more importantly, pizza. I can eat pizza every single day of my life. A close second to that it'd be a cheeseburger. I absolutely do love burgers. I got a couple of friends that I went to law school with that I probably get together with him every couple of weeks for us to go try a new burger spot where I live. I think I've tried probably close to 100 places here in the city of Toronto.

Matthew: Oh my God, you're serious about that. I like that level of commitment. Speaking of Malcolm Gladwell, you're an outlier for cheeseburgers.

Fabian: 100% a fan.

Matthew: You've put in 10,000 hours then.

Fabian: Yes.

Matthew: As long as we have you on here, there's a lot of people from Canada that listen to the show and Ontario specifically, what's the best cheeseburger in Ontario?

Fabian: The chain that really got me on burgers was The Burger's Priest. They have a small little location in the east end of the city that they started. Every time you go there, there will be lines and lines and lines. I have to give them credit. That was the thing that really got me on this artisanal burger craze and I haven't looked back since. The Burger's Priest, hands-down, one of the best burgers in the city.

Matthew: Fabian, tell listeners how they can find your stock ticker and how they can visit one of your stores.

Fabian: For sure. First off, you go to our website, Really easy to remember. Again, that's Just learn a whole variety about our company, the products we have. You can look at all the menus of all our stores online, both on the rec side of things and the med side of things. If you have any questions from an investor standpoint you can go-- you can email us, sorry, at Again, that's

As I previously mentioned, we are a publicly-traded entity. We trade on the Canadian Securities Exchange like pretty much the majority of the other MSOS like Trulieve, Curaleaf, et cetera. We trade under the symbol G-A-G-E, really easy to remember Gage. Again, that's G-A-G-E. We don't have our OTC ticker yet for those listeners in the US. Working hard to get that and we should hopefully have that in the coming weeks giving obviously the US investors the opportunity to buy our stock as well, because it's a little difficult to buy CSE traded stocks in the US right now, unfortunately.

Matthew: How about job seekers? If they're in Michigan and they want to apply for a job to help your team grow, is there a way they can find open job positions?

Fabian: Yes. Go to our website, You'll see we're always hiring. I feel like we always have a long list of people that we're looking to add. Follow us on social media as well. We do have certain announcements about when we're having a big hiring push as well. Our social media and I would just say, you can find us on Instagram @gagecannabis, pretty easy to remember. Again, that's @gagecannabis. Follow us there. It gives you a little taste and flavor of the brand as well to make even see if you want to work with us to see how we look at the industry and how we run our company. We do have some announcements there as well when it comes to job postings and other initiatives that we're working on. I encourage everybody to follow us there as well.

Matthew: All right. Fabian, thanks so much for coming on the show. We really appreciate it and good luck with trying to get 20 stores open. That's a huge goal. It sounds like you're executing really well and we wish you all the best.

Fabian: Thanks so much, Matt. I really appreciate you having me on.


Matthew: If you enjoyed the show today, please consider leaving us a review on iTunes, Stitcher, or whatever app you might be using to listen to the show. Every five-star review helps us to bring the best guest to you. Learn more at What are the five disruptive trends that will impact the cannabis industry in the next five years? Find out with your free report at

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Ep 346 – Cannabis Retail Sales Are Expected to Double by 2025, Expert Explains Why

chris walsh mjbizdaily

Despite a global pandemic, cannabis is one of the few industries that has grown throughout 2020 and 2021 — and that’s nothing compared to the gangbuster growth expected through 2025.

Here to tell us more is Chris Walsh, President and CEO of Marijuana Business Daily.

Learn more at

Key Takeaways:

[1:05] An inside look at Marijuana Business Daily, the most trusted business news outlet for professionals in the cannabis industry

[1:41] Chris’ background in business journalism and how he came to be CEO of Marijuana Business Daily

[4:04] How cannabis regulations have changed over the last five years and what that could mean for the industry going forward

[7:36] Surprising reasons cannabis managed to survive and adapt during Covid-19

[10:51] Why cannabis retail sales could double to put the industry at a 38 to 45 billion valuation by 2025

[13:23] Aspects of the market Chris believes investors and business owners might be underestimating

[17:14] Surprising new trends that are quietly taking hold in cannabis right now

[23:43] How more legalization for recreational cannabis could diminish the medical cannabis market

[30:24] The last states standing between the US and full cannabis acceptance

[34:59] How job growth in cannabis doubled from 2019 to 2021 despite Covid-19’s economic recession and spiking unemployment rates

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Matthew Kind: Hi, I'm Matthew Kind. Every Monday look for a fresh new episode where I'll take you behind the scenes and interview the insiders that are shaping the rapidly evolving cannabis industry. Learn more at, that's C-A-N-N-A insider dot com. Now, here's your program.


Matthew: Despite a global pandemic, cannabis is one of the few industries that has grown over 2020 and 2021. Even with all that growth, we're looking at a gangbuster growth rate through 2025. Here to tell us more about it is Chris Walsh, President, and CEO of Marijuana Business Daily. Chris, welcome back to CannaInsider.

Chris Walsh: Thanks for having me on again. Excited to talk about this crazy business.

Matthew: It's been five years since you've been on if you can believe that.

Chris: [laughs] Feels like 20.

Matthew: Well, give a sense of geography. Where are you in the world today?

Chris: MJBiz is based in the Denver area and I live in a suburb of Denver. That's where I'm talking from today, from my house.

Matthew: Okay. What is Marijuana Business Daily for the person that doesn't know out there?

Chris: We provide news and analysis and market research on a daily basis for executives and investors and professionals in the cannabis industry. Then we also have another side Hemp Industry Daily for the same audience anyone who's in or looking to get into the hemp business. We run large B2B trade shows and conferences including a big one every fall in Las Vegas, MJBizCon.

Matthew: Yes, that's a lot of fun. I've been to that. Since it's been half a decade, could you just share a little bit about your background and journey and how you got into the cannabis space?

Chris: Yes, absolutely. I was a long-time business reporter and editor at mainstream metropolitan newspapers. I had moved to South Korea in my early 30s and figured I would live abroad for a while. I worked as an editor at an English language newspaper there on the business desk. Then I came back to Denver in 2011. When I left two years prior to that, there were no dispensaries to speak of, medical marijuana wasn't an industry. I worked at the newspaper in Denver and we weren't covering that on the business side because there was nothing to cover.

In just two short years while I was gone, when I came back there were more dispensaries than Starbucks in Denver and we realized there was this huge opportunity to serve the industry with news and market research and analysis, all the things we're doing now. It was about that time in the spring of 2011 that MJBiz Daily launched. I helped build the content and the strategy around that then we expanded into professional business events. I eventually turned more of my attention to the business side and helped grow the company from that perspective.

In January of 2020, I became CEO, and then two three months later we hit the pandemic [laughs] and went into that chaos for the last year. We've grown a lot along the way and really chronicling the industry and helping the industry professionalizing it, giving it good objective news and insights, and our MJBiz Daily and our conference, MJBizCon, and everything we're doing has grown along with the industry as well over these years. It's been a fun experience over the last decade.

Matthew: Is there any good Korean barbecue in Denver or did you just skip that since you can't get it?

Chris: There are actually a couple of good places here. It's a fun experience if you haven't tried it because you basically grill your own meat at the table in a little fire pit in front of you. There's a couple here that do that. It's an enjoyable experience.

Matthew: Good. Well, Chris, the last time you were on the show, as I mentioned was 2016 and the industry was so much smaller back then and the regulatory framework was very edgy. Things didn't look as certain as they do now. Where are we now? What do you think the biggest challenges and opportunities are in front of us?

Chris: Well, the regulatory situation is still challenging and it shifts very frequently. Every state is handling this industry very differently from the jargon and terminology used by legislators and in the regulations all the way up to how the industry operates. It's still a very piecemeal industry and it depends on the state and oftentimes the city that you're operating in that really define the business opportunities and define what you can do in cannabis.

What we've seen since then is a lot of states there's a newer model that's emerged particularly in the Midwest and the Eastcoast that is much more planned out from a regulatory standpoint. Then the initial states did it a decade ago like Colorado and Washington and Oregon. You do have a split in this industry. You've got the western side which is the old school players and the more mature markets. They've done things very differently from a regulatory standpoint than the eastern half of the country which are newer states to the game.

They've taken a different approach and they're different players involved. It's a lot more costly to get started. It has a lot more influence from the regulators and business people. That's what we've really seen crop up. There's still no really uniform way on the regulatory front that states are using. Even the newer ones, they pick and choose from what they see working elsewhere. They avoid the things that they think are mistakes that other states have made but there's been no cohesiveness around a regulatory scheme that works in multiple states.

Not much has changed from that perspective in that it's still this tapestry of differing regulations and different approaches. What we do have is this evolution over the years of states figuring out what works for them and what works for their patients and their consumers and they're still a long way to go, still a lot of trial and error and experimentation that's going on. This is a brand new area for everyone. It's likely going to be in this type of a situation for the foreseeable future. When we look at opportunities again, it's really on a state basis.

That's what's fascinating is the opportunities in California are completely different than those in a newer recreational marijuana state like New York. Whether it's allowing delivery or consumption lounges or capping licenses or having a free-for-all, you're just really seeing the opportunities vary by state. If you're in this business or you're getting in it, you have to be really aware of that. There's no one-size-fits-all approach. Much of that is dependent on the regulations but the consumer bases are also developing differently across the country and the wants and needs of the people buying cannabis are different in different areas.

You have to approach it with that framework and really get to know each market on its own.

Matthew: Is there anything that's surprised you in terms of how the cannabis industry has survived and adapted during COVID-19?

Chris: I'm floored at how the industry did. It's just an amazing success story. When you put it in historical perspective and think that it wasn't that long ago when marijuana was demonized by a fair percentage of the population. When we first started in 2011, the looks you would get, the questions when you said, "Hey, I'm involved in the marijuana industry," were very interesting. Even for someone like myself where we didn't touch the plant and still don't and we're just providing information and connections and networking opportunities, people were wondering back then what the heck you were doing getting involved in marijuana and think you went off the grid.

What's really surprised me is that in a very, very short period of time you have just the sea change in the approach. You have states that are now legalizing medical and recreational through their legislators not just the population. That's been a big change. Also just how quickly this caught on, how public opinion towards this has changed, with poll after poll showing strong overwhelming support for medical marijuana legalization and now strong overwhelming support for marijuana legalization in general. I did not think we would see this type of change happen.

When you look at the map of states that have legalized, we've been running maps of the US since 2011 and when we first started it was mostly blank in terms of states that had legalized at that time just medical. Now you look at the map and it's mostly filled in because the majority of states have legalized medical and an increasing number are obviously legalizing recreational. That rapid change in how this industry is viewed and perceived, the business opportunities, the immense growth that's come.

Then I have to say that the other two quick things are the mainstream interest in the industry has really been taking off for the last couple of years. I thought it might be a little while before you had the big alcohol and tobacco companies coming in because we've been chronicling this for a long time and they're hesitant because it's not federally legal but you're seeing an increasing number of mainstream companies coming to cannabis, making investments, buying up companies, developing products.

That has been surprising over the last couple of years that more and more big, big names, big household names, and brands are coming into the industry. The last thing I'll say which completely caught me off guard was that this is becoming an international industry and movement. We were really focused on the US for a long time and then we saw what was going on in Canada, we focused on Canada too, but you have more than two dozen countries that have legalized at the federal level medical cannabis.

Now you have discussions in Germany and other countries, obviously, Canada already legalized recreation and Uruguay but that kind of global development of this industry caught me off guard and those walls came down really quickly.

Matthew: How big is the cannabis market today and where do you see it going, what's your estimate by 2025?

Chris: Well, for this year we expect the retail sales in the legal market to be between $22 and $26 billion and that's a wide range I admit but tracking actual sales across the industry because every state handles this differently is very difficult. We put a range in, there's a lot of factors that go into it every year, every month, in fact, every week there's a different unexpected development in this industry, so it's really hard to project what's going to happen in two months, let alone in two years.

We use all of our experience doing this and we provide a range, on a low end we expect $22 billion and on the high end we expect $26 billion, it may fall somewhere between there. If everything goes right, we'll hit that higher number and that's very, very significant. We're approaching the point where marijuana sales are going to catch up to craft beer sales and the global opioids market, it's already past the NFL. That gives you least or some bigger perspectives of what these large numbers mean.

When we go forward, we look at what are going to see as more states legalize, as mature markets continue to grow and expand as there's the potential for this federal change at some point, hopefully in the near future, what is that going to mean for the industry? When we look forward, we think the industry could double in terms of retail sales by 2025 getting up to around $45, $46 billion if you're looking at this through an optimist lens.

Again, having done this for many years, a couple of years down the road is very hard to determine what's going to happen in this industry but we're comfortable with this range of $38 billion to $45 billion, anywhere from 70% growth all the way up to a doubling of the industry. We're not at the tip of the iceberg, we're below the water level and we can see how big this industry can be and the potential. There's still massive opportunities but a doubling from where we're at today is another $20, $25 billion in additional sales which translates to tons of business opportunities, investment opportunities, and more rapid growth in general in the next couple of years.

Matthew: What aspect of the market do you think investors and business owners are underestimating but you think are going to be big?

Chris: I think there's this hype right now about the potential for federal change and most people including myself are seeing the most likely scenario would be a shift in federal banking laws versus some kind of outright legalization bill which I do not think is in the courts any time soon. There's another potential for some type of move whether it's decriminalization, rescheduling or just allowing states under federal law to determine their way forward. There's those types of moves that could happen too which would change the industry tremendously but I think the most likely is a fix to our banking laws which accomplish a lot of what we want in this industry.

It would really open it up the types of banking services and investment money and funding that we don't have now and business certainty which is lacking when you have trouble finding banks. If that type of move happens which everyone is hoping and a lot of people are actually expecting and making bets that that's going to happen, I think what we're not really recognizing is that that's going to change things tremendously. It's not no like, "Hey, here's a panacea if this happens, we're all going to be millionaires overnight." It's not going to work like that.

Once the federal government is involved even on the banking side things will change. As we hope to see this easing of federal laws whatever that looks like, there's going to be a lot of new struggles and challenges ahead. Whether that's the banking authorities getting involved, whether that's the FDA, the way that the industry has evolved to date has been very haphazard and it hasn't had any of this federal guidance. We look to hemp right now to see what that looks like. Hemp was legalized through the 2017 Farm Bill and there're still many things that the federal government is working through and there's a lot of uncertainty.

If we use that as an example of what might happen when we see change on the marijuana side, it's going to be a long evolution and businesses are not all of a sudden going to have all the certainty they need and want. There's going to be new challenges on the horizon, new places we're going to have to spend money and then you're going to have this wave of I mentioned mainstream companies, that is going to explode even with banking. That changes the dynamics of the competitive situation.

That's not to say it's not on the radar of everyone, I just think that companies do realize this, they do realize the competitive landscape is changing, new skillsets are coming in, new experiences from the corporate world that's already disrupting parts of the industry. As that plays out, we all have to be prepared for another decade of fast growth combined with uncertainty, combined with a shifting landscape. How you compete is going to be a much bigger element of the industry than what it has traditionally been which is, "Hey, this is new, stores are opening up for the first time, there's these new products out there and this is rising tide for all the boats for lifting all the boats."

You're seeing this play out some of the more mature markets, you've got to be more competitive. I think some of that is things that we all need to prepare for, companies are at different stages and reading these tea leaves and getting their business in shape to meet these new challenges in the future.

Matthew: Chris, you talk to a lot of people in the industry, when you talk to executives, people operating businesses, what kinds of trends do you hear, and what keeps them up at night?

Chris: Well, I think you had the pandemic which kept everyone up at night for various reasons whether it was for your business or your personal situation. The industry faired pretty well during the pandemic. Overall, there were definitely pockets of pain in different niches of the industry and different geographic regions and different types of businesses. Some did experience pains, some went out of business, some are still struggling to get on their feet but in general, the last year has been pretty decent for the industry, companies are now coming out of this.

The industry deemed essential in many states and so we saw record sales across the country. Significant growth last year in retail sales of around 30% to 50% again depending on the ranges. That's good in any industry. I feel really comfortable and optimistic about how the industry moved forward in this time over the last year. Now, as we turn the page and we come out of this, what are companies focused on? They're focused on how they're going to survive going forward and how they're going to thrive.

I'm hearing more from some people who've been in the industry for a while, some entrepreneurs, the OGs of the industry, a lot of people are now looking at exit plans or at least getting the heads around what that might look like. That is something that is a relatively new trend. Not for maybe the newer entrants with more business savviness or investors who demand to have some outlines for an exit plan but for many, many years it wasn't even on the radar of people in the industry. They were just excited to be able to start a company in the cannabis industry.

A lot of them had a personal or previous connection with cannabis in whatever way they consumed it themselves. Maybe they were part of the illicit market but they had an affinity for the plant in many, many cases. They were just happy to be here, growing their businesses and absorbing all this excitement, and helping lead the industry forward without real thought on what the long term held for them. That's something that we experienced. You could not plan very far in this industry until recently.

Even now it's really hard but I mentioned earlier even doing estimates for sales there's a million factors that could come into play that no one can predict right now, what states are going to come online, how regulations might shift, how the federal government's approach might change, how new players will enter. All the things that I've mentioned made it very difficult to have a business plan that looked more than six months out. Now you're at a point where the industry, even though there's all these uncertainties, it's almost becoming a requirement to look further out than we ever have as an industry overall. You're seeing a lot of focus on midterm planning and even long-term planning, including exits.

Some people are tired. This is a grueling industry. It's exciting, but it takes a lot out of you. I think some people are considering new chapters for themselves or their companies. I'm hearing a lot more of that. They're also looking at the trends and you've got the mainstream companies, the mainstream investors coming in. If you've got a green rush going on and people are willing to and eager, and in some cases almost desperate to get involved, they'll pay a pretty penny. It's this exit strategy it's longer-term planning than in the past. It's where do I focus?

That's what a lot of companies are going through now is, what's changing the industry, what forces are at play? As I look at my spreadsheet of opportunities, which in many cases is huge because there are opportunities everywhere you look, everyone's trying to figure out, "How can I take a disciplined approach and a strategic approach for the future versus just winging it?" which many of us did. That's what I'm hearing from a lot of people, it's where do I fit in in the new dynamics of this industry and how do I focus my company around a core vision, a core strategy so that we're not getting distracted and going off here or there applying for licenses in any state that opens.

Whatever it is, and just randomly choosing how you're going to go forward, doing it with a much more focused lens.

Matthew: You have the factbook that just came out, when you had the very first draft of this factbook in front of you, was there anything that jumped out at you and surprised you?

Chris: Yes. Having done this for a while, it's hard to surprise me now [chuckles] because you just learn to be surprised all the time. As we were going through this, it's really the continued momentum and the shifts when it comes to product preferences. Flower is still, and as we've known it, it's the biggest part of the industry, and it's been eroding as you've got this array of new products and ways to consume. I think that that's a trend that we're really focused on and seeing what the true potential of edibles and beverages and vape pens are and all these other products out there, all the innovation going on versus flower.

As you look at just consumer behavior in general you look at smoking in general, people are trying to live healthier lifestyles. They don't want to inhale anything anymore, except for oxygen, of course. I'm interested to see how this plays out because now that you have these big beverage companies getting in and big CPG companies, they're seeing a big market here. I don't know what the true potential of it is and how much more share of the market they will take versus flower. Continuing to see this area of the industry grow, I think is fun to watch. It was fun to look at that this year too.

See, this is a huge area that I wouldn't say is untapped at all, but that represents a significant growth opportunity, and what the limit and what the ceiling is on that, we don't know but I think it's pretty huge.

Matthew: A lot of people don't talk about or hear about the medical cannabis market much, but it's still large and relevant. What do you think is most important to know about that?

Chris: I think the future of the medical market is very uncertain right now. As you've seen states legalize recreational, you over time start to see the medical program diminish and dwindle. There's still a base of patients absolutely who prefer going that route. It's usually cheaper in terms of taxes and there are some benefits for staying in the medical structure, but we're seeing a bigger migration away from the medical it's just easier on the recreational side. You don't have to get a card, you don't have to see a doctor. In some cases, there's a wider array of products available to you.

Where this goes in the long-term and whether states take the route of Washington, which basically merged its medical into its recreational, so it's just one marijuana industry or whether they try and keep them separate and what that means going forward, we don't know. There's still a big focus on the medical side in some areas. There's companies that are really focused on that patient base and doing things more from a health and wellness standpoint. It's hard when you've got the much, much, much larger recreational market and consumer base over there.

A lot of companies are tempted to just go in that direction. There's less of an emphasis in some cases on the medical side, from the companies that are out there. I don't know where this is all going to go on the medical side. It's definitely part of the discussion. It's great to see states continue to legalize medical, which is the 38 states have done that. It's the largest market in terms of number of states, but in terms of dollars and the opportunities, it's heavily on the recreational marijuana side.

In this grand experiment that we call state-level cannabis legalization and this experiment with this marijuana industry across the country, we have to see how it plays out. The early results in terms of medical, that it is becoming a smaller and smaller part of the market with less attention paid to it.

Matthew: One thing that's really hard to measure is the size of the unregulated or illegal market. Do you have any guesses or the best estimate of the size of that market in the US, or even any state?

Chris: I could throw out some numbers for sure, but hesitant to do that. We used to do estimates for the black market but what we learned over time is that there's really no good way to track it. Everything you're throwing out there, no matter what you justify it with, is really a big guess. You'll see now there's estimates from 30 billion to 100 billion, to 150 billion, it's all over the board. I say that because I'm hesitant to provide any type of numbers or range. What I can tell you though, is the black market or the illicit market varies by state as well.

In some states, it's been diminished for sure, as legalization has taken root and the legal market has grown. There's no doubt about it, that in every state, it has some type of impact on the black market. You just look to the sales numbers I provided earlier, we're talking $20, $25 billion in sales. Where would that be if it weren't for the legal market? Perhaps the biggest chunk would be in the underground market. Now, not all of it would be, there's people who are only using now who never used before and never would unless it was legal.

There's a big percentage that certainly fit that description but if you just take it on the base level and say, "If you've got $20 billion in retail sales, where was that money before, or had there not been a legalized market now?" I think there's a significant impact there. However, is what you do see is the illicit market is thriving in some areas because of poor enforcement, because of huge gaps between the cost with taxes, with regulations, the cost on the legal market versus the illicit market.

Then you are seeing this unfortunate situation where there's easy diversion because there isn't much oversight. People can buy mass quantities and go sell them on the illicit market or they can home grow and then sell even if they're not supposed to be selling it or even home growing. In some cases, it's opened the door for bigger aspects of the illicit market in pockets. That's worrisome. I don't think the black market's ever going away, but what we can say is that the legal market has not only generated all this money that's above board.

It's also gaining more traction with a lot of people because, let's face it, even if it's cheaper on the illicit market, there's a huge benefit for most people to be able to walk into a store, do it legally have the product selection that you only get in that regard have trusted brands have testing. All of the things that go along with that retail experience is a big benefit for many people. When you weigh that about saving some money and go into the guy down the street and going in his basement and having to share part of it with them or how that's done these days, I don't even know, that's only appealing to some people.

I think over time the legalize industry as more states come online and more people come into the fold and there are more options, more innovation, more trusted companies and brands out there, you'll see a bigger hit on the illicit market. It also will require better enforcement of the laws, which I don't know if we're going to get there because it's very difficult to do. States aren't investing a ton of money into that aspect. They're investing a lot into regulating the legal industry but not a ton of enforcement on the illicit side. There's still a thriving illicit market in California and some other states. That was just a long way of saying that the industry's absolutely had an impact on the illegal market. I expect it to continue to but it's never going away.

Matthew: We're at that cultural shift moment in cannabis acceptance, are there any US states that you look at and you say, hey, they're really symbolic of the last vestiges of resistance and when they fall, it's really just a whole different chapter?

Chris: It's really the south. When you look at the map, it's the south and it stands out like a sore thumb. The good news is that we have had some traction in the south over the last couple of years with Florida legalizing medical and having a thriving industry, even though it's limited from a business perspective because there's only basically a handful of licenses available. We made some good progress as a movement and a nation and an industry in that regard, but in general, that's where a lot of the holes are. Why that is important is the remaining markets right now, we basically have some of the biggest states that have already legalized medical and now recreational.

Whether it's California, now you've got New York, you've got New Jersey, you've got Ohio with medical, you have Michigan. Most of the big population centers where the big opportunities are have legalized in one form or another. There's an increasingly smaller pool of new attractive states, but why I mentioned the south is Florida, if they go recreational at any point-- and it doesn't look bright for that prospect this year based on some recent developments. If Florida can go recreational, that's a massive, massive market that is very attractive.

It will likely spread further into that region in terms of other states legalizing or feeling the pressure to do it. That's what we've seen elsewhere like with New Jersey going then New York, does that convince Pennsylvania? Does that convince Ohio, et cetera? We've seen it play out where once a state in a particular region goes in this direction, the ones around them end up following. Not in every case, but it does happen. Then you look at I'd say the really, really big prize left on that map and that's Texas.

That they have a very, very limited-- some people call it the medical marijuana program. We do not classify it as a legal medical marijuana state because it's basically a CBD and hemp program. Just essentially trace amounts of THC are allowed. We don't put it in into the same category as the states with what we call full medical marijuana programs. If Texas expands its program into one of these more traditional medical ones, which it looks like there's some opportunities it might do this year, that opens up a huge market.

If Texas goes the direction of recreational, that's even bigger, you've got a lot of power players there, a lot of money there in oil and gas, and that spreads out across the industry. It's not just the size of Texas or Florida, it's the influence and it's locking down that region. To your earlier question, that's where that last bastion has traditionally been. We've seen some cracks in it with states legalizing in recent years. There's still resistance though when you look down there.

I just want to highlight why this is all so important because when we look at federal laws, the biggest holdup in any real change has been people in Congress and particularly the Senate and particularly Republicans who are against these types of changes to federal law, with marijuana. A lot of them cling to these old stereotypes about marijuana in general. A lot of them are older in general and they represent more conservative states. Even though these states are starting to legalize medical, they have held up this movement at the federal level.

The more states that legalize that these congressmen and women represent, the better chance we have at federal change because they have to reflect their constituencies. It's hard for them to argue there shouldn't be federal change if their own state, particularly if it voted and the population voted to legalize medical recreational. If we can get some of these states, Tennessee, South Carolina, Texas on the medical side, if we can get Florida on recreational, you're talking about a potential shift in federal laws because you will now have that support in the halls of power.

Matthew: What can you tell us about job growth in the cannabis industry?

Chris: Job growth has been tremendous. You can look at our retail sales estimates and the history of retail sales and there's direct correlation, not completely apples to apples, in jobs in general. You have a couple hundred-thousand people employed in the industry, nowhere near America's most dominant industries, but you have job opportunities cropping up everywhere. I think it's important to circle back on something I said before is the job growth isn't just coming from a state legalize, and there's going to be a need for cultivation operations, and growers.

There's going to be a need for product manufacturers and all the people who make that happen. Then this retail side, and you're going to need bartenders and general managers, all of that happens when a state legalizes. Then you have this whole ecosystem out there of those support services, so that the ancillary companies like what we do, and we don't touch the plant but we support the industry in other ways. You have all of these types of companies that crop up or expand as new states legalize. The important thing here is it's the mature states or states that have already legalized and have industries up and running where we're seeing job growth as well.

It's not like you legalize and after two or three years you plateau. We have many case studies on this now across the country. Whether you're looking at medical or recreational, what you find is that the programs grow over time. It's as people, as legislators, as the population becomes more comfortable and understanding of what this industry is, and they see that those negative aspects that people say the sky is going to fall and you're going to have people walking around like zombies, eating Funyuns, that doesn't happen or it doesn't happen to a degree that sways a lot of people's opinions on the industry.

Yes, there are some downsides, there's people who complain about it but in general, states are accepting this and on the medical side, people are seeing the benefit. They're having family members, friends that are using it for various ailments. They're saying, "Hey, this isn't bad. This is actually good." These states start expanding their programs. They lift the license caps, they expand access, they add medical conditions. You're seeing job growth, even in these states as the regulatory barriers come down and access opens up. That growth in jobs is all over the board.

Colorado hit record sales last year. Colorado was the first state to launch recreational sales in 2014. It's still growing. I believe it grew by 25% last year, retail sales. It's not a direct correlation again to jobs, but there's still lots of job growth across the country. I encourage people to widen your mindset if you're thinking about getting in this industry, because it's not just again, growing, processing, or selling the plant. Basically anything you do in your professional life before cannabis can likely be applied in some way to this industry.

You're seeing people come in and start marketing agencies focused on cannabis and consulting and equipment and everything you can think of that services a normal industry has a need here and you're seeing a lot of job growth there as well.

Matthew: When is the MJBizConference coming back?

Chris: Oh, we are so excited. The pandemic did not treat us well. Even though the backbone of the industry was really strong and growing, and it was a fun story to cover in the sense that, "Wow, look at this, this is now an accepted part of our country and all these businesses have to close but are you kidding? Cannabis stores can stay open. Wow, have things changed? That was the thought over and over. For us, it was really difficult because we are fueled by live in-person events and getting people together for business deal flow and networking, and education and we couldn't host our events last year.

Our business took a hit. It was some tough sailing over the last year, but we have full confidence. We're rallying around MJBizCon. We are seeing tremendous interest. Our show floor is getting sold out. We're going to launch registration soon, massive interest from the industry to get back together. We've all missed out on that in all aspects of our lives. There's a novelty in just like, "Hey, let's get everyone in the industry together again." This is the largest show in the industry and it's the center gravitational point each year that people come to for various reasons even if it's just a party in Vegas with other people in the industry.

With that said, we are gearing up for a big return to MJBizCon and to live events and we're seeing a lot of interest in it right now. We are 100% confident we're going to be able to toast it in Las Vegas.

Matthew: That's great. What's the date that it's scheduled for it now?

Chris: MJBizCon is October 20th to 22nd in Vegas. We'll be back at the Convention Center with what we hope is a critical mass of people that are going to be networking and doing business deals and learning. As I mentioned before, partying I'm sure.

Matthew: Live come early and stay late, there's a lot of fun stuff going on. That's great. I want to ask you how people can find that and register. Before we do, just a few personal development questions. Chris, what is the best piece of advice that you've ever received from anybody?

Chris: Best piece of advice I've received is that you always have to rethink what you're doing. You have to be open to it and accept it, and you have to embrace it. I'm bringing this up because in a previous life when I was a reporter and an editor, you get used to doing something a certain way. That's all your training is based on, that's why you go to school. In your early job, you're figuring out the way to do something and do it well. It's easy to just think that that's the way you always have to do it because you were trained and educated that way because it's worked in the past.

The rate of change, not only in cannabis, but in the world in general, and particularly in cannabis dictates that you can not have that mentality. You have to be willing to rethink what you're doing and why all the time. It may vary significantly from what made you successful or what you learned in the past. To me, that's been the best piece of advice. I have to consistently remind myself of it and it's becoming more of a habit now, but it takes a while to get there. If you don't do that, you fall behind, you lose your competitive edge, you miss trends, you miss opportunities and you become irrelevant.

That's really served me well, especially in the last five years.

Matthew: What do you think the most interesting thing going on in the cannabis industry right now, I'm sure it changes for you a lot, but one thing you're just like, "Wow, that's cool"?

Chris: I just think the continued evolution of the products. I'll go back to that again and really trying to get at the heart of what consumers want and maybe what they don't even know they want. One of the interesting products it's starting to gain some traction is these soluble powders that are flavored and you can put them in anything you're drinking. It's not already an infused beverage, it's just something that if you want to have a beer with your friends at a party, or have some people over, or maybe you want a LaCroix or maybe it's just water, you can make whatever you're drinking into a cannabis beverage.

It's not rocket science, there's drink powders in every way imaginable outside of cannabis. I just think it's exciting to see and track what we're going to see on that infused product side going forward. How companies are really trying to up their game and say, "Hey, we have this wide-open area that we can explore and figure out new ways to consume." We're going to try out all these ideas.

Matthew: Lastly, what is your favorite unhealthy comfort food?


Chris: This is very embarrassing. There's a very short backstory. I'm not a big fast-food person, I didn't eat it for many years. I started traveling internationally a lot for work, always traveled internationally but started doing it for work as we looked at a global strategy. I was speaking in other countries about the cannabis industry and doing market research. I would come back from these long trips to Israel or Greece, or Columbia, and on the ride home, I had one craving and it was Taco Bell.

It was something I ate all through college and then really never had, or very infrequently had maybe once every five years. I got on this thing where I'd travel abroad and I come back and on the way home from the airport, I'd stop at Taco Bell. I occasionally still have it. It's now my eight-year-old daughter's favorite fast food. I'm not proud of it, but it is my guilty pleasure.

Matthew: I like that you had to do it on the way home from the airport, like it was that urgent.

Chris: Oh, I could not wait. No, I get in at midnight, hadn't seen my daughter or wife in a while and I had to carve out time, go to that drive-through.

Matthew: Well, Chris, again, tell us the dates for the MJBizCon, how to find the factbook, and for people that don't get your daily e-mails, how can they sign up for that?

Chris: MJBizCon this year is basically the week of October 18th. We have stuff going on all week, but the main conference is October 20th through the 22nd at the Las Vegas Convention Center. Our site, we're going to launch registration soon. We've been selling booth space on the show floor for a while now it's You can also get to it through our main portal. You can also see our Marijuana Business Factbook if anyone's interested in that, where we chat the trends in the industry and make projections and estimates.

Then also, maybe I can get some tips from you, but I've launched a podcast from MJBiz called Seed to CEO, where we're really helping people navigate this industry, these new entrants that are flooding in. Those are some of the main endeavors, and you can get to all of that through

Matthew: Well, Chris, thanks so much for coming on the show and educating us. I think I'm going to have to find a way to get some Taco Bell now, you've planted that seed in my mind.

Chris: I don't recommend it, I'll tell you that. You might be [crosstalk] for a couple of hours.

Matthew: I know, I did say unhealthy, so you've got that. All right, well, thanks so much, Chris.

Chris: All right. Thanks for having me on. I appreciate it.

Matthew: If you enjoyed the show today, please consider leaving us a review on iTunes, Stitcher, or whatever app you might be using to listen to the show. Every five-star review helps us to bring the best guest to you. Learn more at What are the five disruptive trends that will impact the cannabis industry in the next five years? Find out with your free report at Have a suggestion for an awesome guest on CannaInsider? Simply send us an e-mail at We'd love to hear from you.

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Matthew: Final disclosure to see if you're still paying attention, this little whistle jingle you're listening to will get stuck in your head for the rest of the day. Thanks for listening and look for another CannaInsider episode soon. Take care. Bye-Bye.

[00:47:34] [END OF AUDIO]