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How Fleur Marché Is Converting The CBD-Curious Luxury Customer with Ashley Lewis and Meredith Schroeder

fleur marche ashley meredith schroeder

As cannabis continues to skyrocket and make its way into other industries, more and more entrepreneurs are looking to jump in.

But with CBD only just entering the mainstream, how do startups determine their ideal customers and then – even more difficult – win them over?

Enter Ashley Lewis and Meredith Schroeder, former directors at Goop and co-founders of online startup and “cannabis apothecary” Fleur Marché.

Inspired by cannabis’ many health benefits, Ashley and Meredith set out on a mission to bring this powerful ingredient to the beauty and wellness arena, providing a carefully-selected curation of the best cannabis products for canna-curious luxury customers.

In this episode, Ashley and Meredith share an inside look at Fleur Marché and give us some tips on how entrepreneurs should go about finding (and then converting) their correct target market.

Learn more at

Key Takeaways:

  • Ashley and Meredith’s work at Goop and what sparked their desire to enter the cannabis space
  • An inside look at Fleur Marché, including its educational resources and online curation of the most elegant, top-quality cannabis products on the market
  • Ashley and Meredith’s mission to convert the canna-curious luxury consumer and bring cannabis into the beauty and wellness space
  • How the co-founders drew on their experience at Goop during Fleur Marché’s creation process
  • Ashley and Meredith’s day-to-day work at Fleur Marché and how they complement each other as co-founders
  • How Fleur Marché targets its ideal audience and Ashley’s advice on how to niche down your demographic
  • How Meredith successfully raised capital for Fleur Marché and her advice to entrepreneurs looking to fund their startups
  • Where Ashley and Meredith see the cannabis-wellness space going over the next few years and the opportunities that excite them the most

Read Full Transcript

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

Matthew: Hello, CannaInsiders. Today we have a great show for you. We're going to hear from the co-founders, a young startup called Fleur Marché. My biggest three takeaways from this interview were that these founders thought the opportunity around CBD was so big and compelling that they left their day job at Gwyneth Paltrow's lifestyle brand, Goop, to start Fleur Marché. Two, why defining clarity around your ideal customer and your message is so important. And three, how to raise capital and refine your pitch to investors. I hope you enjoy this interview as much as I did.

Many cannabis and hemp companies are starting. But do they know who their target market or ideal customer is? Today's guests are co-founders that are doing an excellent job of defining who they want to serve. I am pleased to welcome Ashley Lewis and Meredith Schroeder, co-founders of Fleur Marché. Meredith and Ashley, welcome to "CannaInsider."

Ashley: Thanks for having us.

Meredith: Thank you.

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

Ashley: This is Ashley. I am sitting in our headquarters in Hancock Park, Los Angeles.

Matthew: Okay.

Meredith: And this is Meredith and I'm actually in my third bedroom in my house in Highland Park, which is on the east side of Los Angeles.

Matthew: Okay. And I'm in Winter Park, Florida today. So I'm glad we're all someplace warm for spring here.

Ashley: Nice. Yay for spring break.

Matthew: Yeah. Ashley, what is Fleur Marché at a high level?

Ashley: So, Fleur Marché is an online CBD boutique, whose mission is to rebrand cannabis as wellness. And we're specifically targeting women who are skeptical or outright closed off to using cannabis as anything other than a recreational drug. That's sort of what they have always thought of it as and aren't quite yet ready to accept that it's something different. So we're trying to change their minds.

Matthew: Okay. And Meredith, can you share a little bit about your background and journey and how you got into the cannabis space and came to start this company with Ashley?

Meredith: Sure. My background is actually pretty well entrenched in retail and women's fashion. So I started my career at a big box retailer called Macy's. When they were headquartered up in San Francisco. They had a West Coast headquarters up in San Francisco. So I kind of started my career there. Learned all the ways of a big box retailer and then went more and more niche from there in terms of retail experiences. So most recently, I was at Goop, where I managed the fashion vertical, the e-commerce business.

So I've been, again, entrenched in sort of like female-facing consumer businesses, primarily in fashion, my whole career, whether it be buying, planning, merchandising strategy. So, very familiar with a female audience and how to contextualize a product assortment for her. And then in terms of how I became interested in cannabis, it was much more of a personal journey for me. As Ashley mentioned, you know, we're going after a reluctant sort of like audience and consumer and that really was who I was.

Embarrassingly enough, a couple of years ago, I wouldn't go near cannabis because I still was recovering or had PTSD from a bad pot brownie experience. And once I realized sort of what the new product landscape looked like and how amazing these product offerings were sort of like out in the modern day cannabis world, my lens was changed once I tried some products and integrated them in my life for my own sort of like wellness needs. And so I became pretty obsessed with all things CBD and THC and sort of finding the right products for myself to integrate into my wellness routine and just for sort of like daily things like period symptoms, pain management, workout recovery, sleep aid, all of the things that we sort of like deal with based on daily stresses.

And once I became passionate about the category, I realized, especially given my background, that there really wasn't a great retail experience out there. And that there was such an opportunity to create something beautiful and sophisticated and really elevated so that women could more viscerally respond to this category in the way that I knew that they could because, as it existed before, the retail experience just was subpar.

Matthew: Yeah. So deep retail experience, that's great. When people don't know what Macy's is, sometimes I'll come across people and it's like they don't know what Macy's is. "And I really don't know what that is." I go, "Oh, it's the store from 'Elf.' Isn't that right?" They go, "Oh, yeah. Okay, I know what that is."

Meredith: Oh, my gosh. Yes, I'm probably dating myself by saying I started at Macy's.

Matthew: Yeah. No, no. I mean, but everybody knows it once you say that. So...

Meredith: True.

Matthew: So, Ashley, before you answer that question as well, I just want to say for, like, every woman that's listening pretty much knows what Goop is. That's Gwyneth Paltrow's kind of lifestyle site. And there's also e-commerce and fashion and a lot of things going on there. But for men that are listening, they're like, "What's Goop?" So that's what it is.

Ashley: Yeah, thank you for clarifying.

Matthew: Yes. Yes. So, Ashley, go ahead. You tell us about your background and journey as well.

Ashley: Yeah. So I think my career is mostly shaped by strategy and storytelling. I started off in the film industry as a development executive. So reading a lot of scripts and trying to figure out how to package them with writers and directors, which is where sort of the storytelling aspect comes in. I did that for a while, realized it really was not the thing that I was meant to do. So I went to business school to learn some skills, and came out of business school really wanting to focus on marketing, and figuring out how to sort of stretch that storytelling aspect of my career into something that was a bit more strategic and focused on data and thinking about sort of frameworks and things like that.

So, went to Mattel, where I was a brand manager on the Barbie brand, which was really pretty wonderful. And that's where I really learned the fundamentals of marketing, and how strategy and storytelling play into that. From Mattel, I went to a company called ClassPass that at the time was a small startup and launched their LA operation. It has since grown and is now an international fitness platform. And then left ClassPass to go to Goop where I was brought on to the team to launch the wellness business vertical.

And for the men and women out there who may not be as familiar with Goop, it's really known, first and foremost, for its wellness practices and sort of for pushing progressive, alternative, interesting conversations about wellness and health and sort of providing options for primarily women, but also men, anyone who's interested, alternative to traditional medicine. So I came...traditionally they've mostly done that in content. And I was brought on to help to put a commerce aspect next to it. And it was...I think we're going to talk about was as part of my role at Goop that I really first encountered cannabis.

Matthew: Yeah, you know, that background in the film industry and script reading and stuff, is there anything that you kind of still take away from that experience in your day to day life where you say, "I'm going to kind of take this idea that I learned from the movie industry and apply it here"?

Ashley: A hundred percent. I think in terms of as we think about messaging and brand building and what you're actually communicating to your audience, whether that's an audience of moviegoers, or an audience of CBD users, I think figuring out, first and foremost, what is it that we're trying to say has always been something that was really deeply ingrained in me and what is the point of this.

And with a script, it's actually much harder oftentimes than a marketing message because you have, you know, two hours' worth of content to sift through. But the other thing I think they've really taken and it translates, regardless of the story you're trying to tell, is the emotional connection. And that's really what makes either a film or a business successful. Are you connecting with your customers or consumers on an emotional level that really touches them and makes them feel like they need to keep coming back for more? They need to really engage and to really take part in whatever it is you're building.

Matthew: Okay. So, Ashley, you were at Goop, you have this background in the film industry and in marketing. What made you think about CBD that it was going to be a big opportunity? What was kind of the moment where you're like, "Hey, this is gonna be big, and I want to be part of it"?

Ashley: A hundred percent. So, early on, in my tenure at Goop, we started thinking about CBD, because to her credit, Gwyneth Paltrow was an early sort of adopter of the notion that cannabis could be wellness. So way before I was actually working in it, I was researching it and figuring out, what is this? What's the regulatory landscape around it? What's the science behind it? How do you vet products to make sure that they're high quality and you're not selling snake oil?

And in the course of doing that, I started to use it myself and realized that it was very effective. At Meredith's suggestion, oftentimes, I would sort of try products mainly, for me, for pain relief, substituting out Tylenol and Aleve. I realized that this was a really potent wellness tool. And of all the wellness tools and wellness healing modalities that I was being exposed to, for me personally, this was the most palpably effective. But I was also realizing that, you know, I was selling products to all of these women who were very invested in wellness and self-care, really willing to be adventurous in terms of what they were trying and the products that they were, you know, testing out or sampling.

But when you said the word "cannabis" to those same women, they almost like physically recoiled, immediately shut down and would say, "No, no, I'm not a stoner. I'm not interested in getting high. That has no place in my self-care routine." And it felt like there was really sort of an opportunity to help them understand that this could be something really valuable in terms of making them feel better. And so just, again, from my storytelling background, it felt like we really just needed to tell a new story.

We really had to rebrand cannabis as wellness and start talking to these women about how cannabis and specifically CBD could help them sleep better or manage their anxiety or deal with menstrual cramps, as opposed to just something that's used, you know, recreationally to get high. I felt like if you could effectively do that, you could take this averse consumer group, make them curious, engaged, and then ultimately very loyal in the same way that they were loyal to things like ashwagandha and crystals and tarot cards and, you know, things of that nature.

Matthew: Okay. So Meredith, you went from having a bad experience with a pot brownie to pushing CBD on Ashley.

Meredith: I had quite the evolution. Yes, it's true.

Matthew: Well, let's talk about Meredith, if we were to pull up your site right now and just be looking over your shoulder as you browse through it, what would we see?

Meredith: Yeah. I think, first and foremost, you'd probably notice some really beautiful product imagery and photography. That was a really important aspect for us. We wanted this site to feel more akin to a beauty or wellness, health and wellness site or even close to fashion. We wanted it to feel like a big departure from traditional sort of cannabis experiences that you see online. So there's big, sort of visceral images that are very stimulating.

And then we also have a lot of educational content on the site as well. So you'll kind of see equal parts product photography and product focus as well as educational elements because to us, to sort of our continuous points, our whole goal is re-contextualizing this category that otherwise, women feel icky about or still have a stigma about. So we want to make sure that we string educational components for the category throughout the entire sort of shopping experience.

Matthew: Yeah. And you've really done a great job at that. That was one of the reasons I wanted to speak with you because I was like, "Wow, this is just really well executed." And back to Ashley's point of like, "What are we trying to say?" And you get to that quickly and you have to get that point across quickly because when people come to their site, it's like, you have about three seconds to show them something before they're like, "I'm out of here," you know.

Meredith: Right. Right. Exactly. Exactly. We wanted to make an impact quick because, you know, and we thought about our audience a lot and we thought about the fact that we wanted it to be sort of non-generational when our mothers shop on this website, when our cousins shop on this website, when our peers shop on this website. So we really wanted it to feel welcoming to, really, all women.

Matthew: And Ashley, how do you define your customer and speak to them?

Ashley: Yeah. So it's really the customer I mentioned before, we call her "the reluctant consumer." That's really who we're going after. And it's more of a, I would say, a psychographic segmentation than a demographic segmentation at this point. It's that woman I just started to describe before who is very highly invested in wellness and self-care, whether that's through fitness or eating organic food or using crystals and breath work or all of the above. This is something that's important to her life, but she does not yet identify cannabis as an ingredient or a solution that's relevant to her. So we are laser focused on helping to change her mind.

Matthew: And the psychographic, how deep do you go in mapping that out in terms of what this customer avatar, you know, does for fun, what their concerns are, how they see the future, what kind of car they drive? You know, how far down that rabbit hole do you go to define your customer?

Ashley: To be fully transparent, to date, we have not gone that far down because we, we were working to get the site up quickly. But, two, I think we both have a pretty...from our past experience, it's a pretty solid understanding of who that woman is just from real-time speaking to her whether it was at Macy's and BCBG or ClassPass or Barbie at Mattel.

So we had a pretty good sense, foundationally. And then we did a bit of research before we launched the company. We did a survey with 200 of our peers, family, friends, and friends of friends to understand their thoughts on cannabis and sort of how they were using it, so that informed a ton of our sort of mapping. And then anecdotally, just every single day, I think our hypothesis proves true as we talked to women in their 80s and women in their 20s who sort of have the same questions about CBD or are interested, curious, maybe, but mostly are afraid of it.

But at the same time are not finding solutions to the needs that they currently have, and so are open to at least having the conversation. As we are now sort of putting functionality on the site, and in our email communications, that will help us get more of that actual information now that we sort of have real customers in real time, and so we'll continue to build that out.

Matthew: Okay. And we talked a little bit about the look and the feel of the site already, Meredith, but how did you come up with the exact motif and draw on your experience at Goop to do that, to convey what you were trying to do? I mean, you had an idea in your head of what you want to try to convey, but then how do you actually materialize that?

Meredith: Yeah, it was something that we talked a lot about, and we went through a lot of iterations for. We knew that we wanted it to feel very feminine. So that really was the foundation of, like, determining sort of like our logo, our typography, sort of like the color palette. We wanted it to be very non-generational as I mentioned earlier, so that it could really run the gamut of women that it would appeal to. But first and foremost, we wanted it to feel feminine because that was what we felt was missing from the traditional retail experience in cannabis.

Nothing felt overtly feminine. There was certainly, like, luxury plays in the form of dispensaries, but nothing that really spoke to women in the way that we knew we could. And then, you know, we were very thoughtful about sort of architecting the site accordingly. So, you know, all of our efforts were really focused on intuitive frameworking of the website so that the shopping experience was all sort of femininity-based and psychologically reached the woman in a way that wasn't being offered in the online retail landscape prior.

But yeah, I mean, there was a lot of detail that went into it. Having a French sort of typography for our logo is really important. The meaning of...we should probably clarify that the meaning of Fleur Marché, it sort of loosely translates to a flower market. So we really wanted to, again, re-contextualize what the word "flower" meant in the traditional cannabis space, then we wanted it to feel overtly feminine. So florals are certainly an important part of what we do. You'll see that repetitive sort of in the design of everything we've built out. And, yeah, I mentioned this earlier, but we certainly wanted it to feel beginner friendly.

Everything needs to feel really, like know, you're not intimidated by the experience at all, because that was a frustration for us early on. And then in terms of how Goop influenced it, I mean, of course, it did. I think Goop was, and Gwyneth certainly and we were so lucky to work alongside her throughout our tenure at Goop. But, you know, she's sort of a master and the team at Goop is a master at executing beautiful brand experiences and retail experiences. So I think that was an inherent part of being able to execute this beautifully.

Matthew: Ashley, what you're doing here is interesting because Fleur Marché is really a product curation and education site. You don't create your own products, but you do organize products into interesting bundles and categories. Can you talk about that a little bit?

Ashley: Yes, I'm happy to. So when we decided to start the company, we knew almost immediately that we wanted to be a curator at the outset at least, as opposed to creating our own product. And the reason for that was that all of a sudden, we were seeing a ton of really high quality, interesting, sort of strategic products come out specifically targeted towards this reluctant consumer or what we specifically targeted at least towards women.

And it felt like there was this...the problem wasn't necessarily availability of product, the problem was actually figuring out what product to use and which of those products were high quality and which of those products had the amount of CBD in them that they said they did. So education was more of the issue than supply. So that's sort of how we got to become a curator. And then once we realized we wanted to be a curator, we also then encountered the burden of having to explain to the customer exactly what it is that you're trying to do, and why they should be choosing one tincture versus another, or using a topical versus an edible.

And that's really...those issues were really what got us thinking about how to bundle products, how to create categories. And where we landed was that need-based communication is really the key here. And it's something that we saw when we were selling fashion, beauty, and wellness products at Goop. It's something that I certainly saw on Barbie and as I was working at ClassPass. Women want to understand what this product will do for them, especially if they're taking a leap in terms of ingredients or something that feels a little bit outside of their comfort zone. "Help me get what it's going to do and then I'm much more likely to start talking to you about it."

So, you'll see on the site, we created and really came out with what we call CBD starter kits. And they're purposed. So we have a CBD starter kit for pain, for sleep, for anxiety, and for skincare. Again, the goal there being if you don't know what you're doing, if you're really confused about all of this, here's something that we can just give you to help you get started. That said, if you want more, and you're not ready for a starter kit, you just want to buy one product, the way that we've organized the site is very specifically to help you on a personal level.

So you can come to the site and say, "I'm having trouble sleeping." There's a category of products for you to go look at specifically to address that issue. Or you can say, you know, "I don't necessarily have an issue, but I'm really interested in topical CBD." We've also organized it in that way so that you can go find it there. And the goal really with our categorization is to make it easy for...and Meredith talked about this, that beginner consumer, who is a little intimidated, doesn't really know what she's doing, but also wants to be able to navigate and understand without having to do too much work. So we really focused on making this very user friendly specifically for that reluctant consumer. And that's really the sort of impetus for all the categories and all the products that we create or sort of the bundles that we create.

Matthew: Yeah. And the reluctant consumer is reluctant because of just an incredible propaganda campaign, and I always marvel at that and think that has got to be the most effective propaganda campaign I've ever seen. Because it wasn't even 100 years ago, it was, what, pre-1930s that nearly every household had cannabis tinctures in their, you know, cupboard.

And then it was just an unbelievably successful propaganda campaign that you're trying to help educate consumers to unwind their mind to get to a point where they can think about this more clearly. And it does beg the question like, gosh, if this was such a successful campaign to kind of smear a plant like, is there anything else like that in our culture? I think about that. I wonder sometimes, no, don't answer. But I do, I think about that.

Ashley: I have the same thought. I mean, it's just crazy. It really is. I mean, I don't have a lot of, like, the actual data, so I won't quote things. But just to understand what started to happen in the '40s and how the government sort of scheduled marijuana and maybe didn't mean it to be long-term on the drug schedule and how it just stayed there. There's just a lot of really interesting things that you hear about how this all happened that are quite curious.

Matthew: Yeah. So Meredith, there's no real playbook for being a startup. You wake up in the morning, you know you have to do stuff, but how do you decide what needs to happen today that's going to be the most impactful just trying to get into the practical nuts and bolts of, you know, running this business?

Meredith: Yeah, it's so hard. I think for me and for Ashley and I collectively throughout this process, it's been very useful to have a teammate. I can't really imagine navigating this on my own. So I think by us sort of designing our very clear division of responsibilities early on, that's helped us prioritize our individual task lists. So I certainly think that's important, like on a daily, monthly, the sort of like annualized basis. And I think for me, I just have to have very clear goals and benchmarks but with clear time constraints to keep me on track.

And then I try to prioritize what's really going to move the needle in the business. I mean, you're always going to have an insurmountable task list. It's kind of just the nature of what we're doing. And I learned that early on, because this is my fourth startup in a row, my first own startup, but my fourth experience in a startup in a row. So I've kind of been bred for this.

But I think, you know, accepting that your task list is going to feel insurmountable is step one. And then just really sort of prioritizing looking at your task list and understanding what's going to move things forward in the biggest way possible is where you kind of start. And then communication obviously is key. So Ashley and I are in constant communication to make sure that like, collectively, we're marking things off of our list that won't inhibit the other one from making progress.

Matthew: Okay. That's good that you got that experience from other startups. So you can say, "Oh, I don't want to do this. I do want to do that." So that's good.

Meredith: Absolutely. Yeah.

Matthew: You don't have to make the same mistakes on your own. Okay. So, Ashley, the focus of Fleur Marché is that you want to be the CBD whisperer to canna-curious women. Sometimes entrepreneurs think, "If I focus on this demographic, then I can't serve this other demographic over here, and I'm excluding them." But is that really true and do we need to think about it that way? I mean, you talked a little bit about serving women. But do you ever think like, "Well, that means I'm actively not serving this demographic"? And is that okay? I mean, what's your thought there?

Ashley: Yeah. So I think one of the fundamentals, one of the first things I learned about marketing was to clearly define your audience and that if you try to serve everyone, you end up really reaching no one or actually connecting with no one. And so I actually think that a laser focus on a very specific audience is really the most important part of defining your brand, how you operate, and what you're really trying to do. And then, of course, there's a series of, like, concentric circles, sort of concentric circles of various audiences around that core audience that you're targeting.

But again, if you don't have that laser focus, it is hard for any consumer to define you and sort of say like, you know, when someone says, "Fleur Marché, who are they, what do they do?" If you have gone too broad, it's very hard to define and I frankly think it sets you up for failure. And I also kind of disagree with the idea that you can alienate an audience unless you're being extremely careless or trying to. Because, I think if you have strong brand values and you have a very clear point of view, other consumers than the ones we're specifically targeting start to become interested because inevitably, those values will be relevant to other people's lives.

And what we're seeing specific, you know, for example, with Fleur Marché, is that we are a brand that is squarely focused on women. But we see a fair share of orders come through from men, we see a fair share of orders come through from women who are not canna-curious but are, in fact, you know, cannabis veterans who have been smoking pot for years, but are just sort of now becoming interested in CBD and value the concept of quality education and transparency. Which, again, are things that we value for everyone, but are so honed in on because we believe that beginner consumer, the reluctant consumer needs to feel comfortable that those things are firmly in place, but it certainly applies to a much broader audience.

So I think that that clear focus has actually only helped us and does help us, like, put a stake in the ground of, "Here's who we are, everyone's welcome." We're not trying to exclude anyone but we're also building what we're building with a very clear consumer in mind. So I guess that's really is like the differentiation. It's you're building focused on this one, you know, consumer who's right in front of you, but that doesn't necessarily exclude anyone else. Everyone else is welcome to partake in what it is that you're building. And frankly, probably can connect to it better because you have such defined values, principles, and messaging.

Matthew: Yeah, so it's not exclusion, but it's clarity, firstly.

Ashley: Exactly. Exactly.

Matthew: Okay. It reminds me of how Lowe's, the home improvement store, said, you know, "Home Depot's got this great successful business but it's kind of rough around the edges and it's not very friendly." So they said, "Let's make Lowe's, like, clean and more well organized and better lighting and we'll attract more women to it." And then it turned out like, "Hey, men like this, too. Like, we just don't know how to articulate it sometimes." But it started attracting men as well. But that clarity just kind of drew into the tractor beam people that wanted that.

Ashley: Exactly. I think we talk about clarity and simplification versus dumbing anything down. So we're certainly not dumbing it down. We're certainly not trying to, like, operate only for the lowest common denominator. But we're trying to create like a very...yeah, exactly how Lowe's did, a very clear, clean experience that, frankly, is attractive to anyone. It's a sort of bottoms up like, you know, everyone can get on board with that.

Matthew: Yeah. So Meredith, we already talked about the survey that you sent out to friends and family and, you know, all the different feedback you got when you were starting Fleur Marché. But what questions do you get asked the most right now from the canna-curious visitors?

Meredith: Yeah, great question. I think there's still a lot of education to be done around demystifying CBD in general. A lot of people still ask us that, even as recent as yesterday, "Does it get me high?" So I think that's one of the top questions we are asked is, "Will CBD get me high?" "Will it pass a drug test?" And then understanding the different delivery formats is a big one as well. So understanding the difference between topicals, versus vaping, versus tinctures, and how they really affect you in different ways and the benefits of each format. It requires a lot of education with our customers.

Further Reading: Will CBD Make Me Fail A Drug Test?

And then beyond that, we've had a lot of in real life activations of our brand and our retail experience which has been great in gathering learnings from our audience. And these women are super engaged but they often really just want a personal consultation, to be honest. They want to know what we're using, what our favorite products are, and how to use them without...they really just don't want to do a lot of research. They want someone to sort of help them solve their issues or their needs and really understand on a one to one basis how to incorporate these products in their daily wellness routines.

Matthew: Yeah. They want a friend to tell them like, "How will this really make me feel?"

Meredith: Yeah, exactly. Exactly. Just like my friends wanted. And so that really was our goal is to sort of scale that concept of having your best friend make the recommendations for all things cannabis.

Matthew: Yeah, that's a good goal to be the friend.

Meredith: Yes.

Matthew: Ashley, as the wellness umbrella around hemp and cannabis grows and expands, what are your next areas of focus?

Ashley: Yeah. So I think when people get this question generally, and historically we've actually answered it as well with like, "Oh, new product delivery formats or new ways of using or ingesting cannabis or CBD," I actually have changed my mind on it. I think the next great frontier in cannabis is not as much a new product category as it is product efficacy. So we're starting to talk to a lot more brands who are working on water soluble CBD and nano-emulsions, emulsification, which is breaking down CBD extract into very small particles that more easily sort of assimilate in your body.

And I do think that as, you know, we're in the midst of the cannabis and specifically CBD craze right now, so much product is coming to market. And very quickly, there will start to be tiers in terms of bioavailability, which is how quickly a product makes it into your bloodstream, the CBD of a product makes it into your bloodstream, and how effectively, how much of the CBD is actually getting in. And I think that we're already seeing it happen but brands will start to just perfect more and more that efficacy so that, you know, you can take a product and, within 15 minutes, feel the desired effects. So I'm really excited for that. We've been hearing more about that.

And then I think also, there is just more and more research being done on all the other cannabinoids that we haven't yet really focused on enough. So, CBG and CBN are the next ones, but we're starting to hear about something else called CBC.
Learn more about the cannabinoid CBC (Cannabichromene)
And, you know, what does that do? Because there's 200 cannabinoids in the cannabis plant. And I think they all probably have strong therapeutic benefits in one way or another that we're just scratching the surface of. So, really excited to see how we can make the current things that we have, the CBD and THC, even more effective and just work quickly and efficiently. And then also just exploring that next frontier of what else is out there? What else can be helping us feel better?

Matthew: Yeah, that's a great point. You know, the efficacy is the next frontier. I hope that's true. That would be great.

Ashley: Yeah. Me too.

Matthew: So Meredith, let's talk a little bit about capital raising. How did you go about capital raising for Fleur Marché, and what was that process like and where are you in that process?

Meredith: Yeah, it's a long and arduous process, I would say. Anyone who's gone through it probably can relate. We really started our fundraising process back in September, after we had decided to leave our jobs. We built out a pretty robust business plan and a pitch deck to go out to investors and we were lucky enough to have... Oh, I'm hearing a little bit of noise. Can you guys hear me okay?

Matthew: Yeah. [crosstalk 00:34:23] It sounded like you were on a windy clifftop for a moment. But, no, you're back.

Meredith: But we were lucky enough to have an early believer in that first round of conversations within our sort of like clique circle or like our own little internal network. So we had an early believer early on that really allowed us to get started. So we got a yes pretty quickly, which did not necessarily pave the way for the rest of the conversations. I think we were just insanely lucky on that very first conversation. And then we kind of kept fundraising for about six months. We're just now nearing the finish line of our first pre-seed raise.

We really took meetings with pretty much anyone that was willing to listen to us and hear more about our concept. And I think that was really important to our process, because it ultimately led to a lot more conversations. And I think something important to keep in mind when you're going through the fundraising process is while you're exhausted and you don't necessarily think that the conversation you're about to have or the pitch you're about to give will be effective with that particular audience or those particular investors, it does lead to so many other meaningful connections and I think you always have to be hopeful that those doors will open for you. And for us, they really did.

And so we were able to conjure up quite a few believers between friends and family and a couple sort of more institutional players in the space. And I think when it's this early on, they're really just looking to believe in the founders and sort of like your vision and your master plan. And I think Ashley and I were extremely convicted in what it was we were building. And so, yeah, I think we just powered through for six straight months, and we're now finally at the finish line.

Matthew: Meredith, did you notice that your pitch was getting better or different as you went along?

Meredith: That's a really good question. And Ashley, you can feel free to add. But I think it really, for us, depended's a hard process, because you're doing it in tandem with also trying to get your business off the ground, and then ultimately operate it at the same time. And I think that's extremely challenging to have sort of like mindshare all over the place.

And so we would joke that, like, we were better in the morning than we were in the afternoon because all the stresses of all the meetings that we had throughout the day, like, ultimately set us up for failure in our pitches in the afternoon. But it totally varied. I mean, at some points, we felt like we were really in stride, and then in other points, even six months later, we were like, "Wow, we bombed that."

Matthew: Well, it sounds like you did a pretty good job to me. So maybe you can write a blog post on CBD for raising capital. Yeah.

Ashley: Because I will say, the only thing I would disagree with, I do think we can kind of give you our pitch in our sleep at this point. So now, at the very tail end of it, we've now perfected. But I agree with everything else Meredith said. There were some rough days.

Meredith: Well, I think we're just all so hard on ourselves, you know. I mean, we're our worst critics. So I think, you know, even our worst pitch, you know, externally was probably better than anything most people had heard. But like, at that point, we had heard it so many times. But we sort of felt like we were failing at some times even though I'm sure we weren't.

Matthew: Yeah. And most people don't remember, you know, a lot of the details in retrospect, like they say, like, you know, you feel like you screwed up something, but most people just have a big picture, you know, memory of whatever happened.

Meredith: Right. Yeah, exactly. And I think what you learn along the way is just don't sweat it. Just don't sweat it. Like, you just have to keep moving forward.

Matthew: Well, at this point in the interview, I like to ask a few personal development questions to help listeners get a better sense of who you are personally. With that, Ashley, is there a book that's had a big impact on your life or way of thinking that you'd like to share?

Ashley: Definitely. So after I graduated from college, I took a year off and traveled. And while I was traveling...I think I was maybe in India, I read a book called "Mountains Beyond Mountains" by Tracy Kidder. And it was about the sort of development of an organization called Partners In Health, which was started by Dr. Paul Farmer, who essentially, the first project Partners In Health ever did was to go into areas of Haiti that had been particularly struck by the AIDS epidemic, and try to cure AIDS not by treating sort of like the symptoms but by actually digging into the culture and trying to understand, like, many levels below what was leading to this epidemic and why it was so bad in these parts of Haiti.

And it was just...I mean, I love the book. It's a great read for something that sounds so serious, it reads like a novel. It's a very, sort of like quick read, I will say. But I really became so enamored with the fact that he was trying to solve problems based on, like, the underlying issues rather than just what was apparent at the surface.

And I do think, I mean, as corny as it sounds, I know this sounds like I prepared this. I swear, I forgot, I actually didn't see this question. I forgot to think about it. So it really has shaped a lot of how I think about problem solving. Like, yes, what is the fire at hand that you have to put out? But like, is there a way, you know, what do you do next time or what can you do to prevent this from happening again? Like, how are you dealing with the underlying issues and not just solving the problem because that likely leads to it continuing? So it's been a meaningful book in my life. I've gone back and read it once since. And it, again, holds up.

Matthew: Yeah. That's kind of like the, attack the root of the problem, not the branch.

Ashley: Exactly. And he was...I mean, Partners In Health has since expanded across the world and is doing, you know, amazing work because of that strategy.

Matthew: That's cool. I don't think we've heard that recommendation before. So thank you for that.

Ashley: Yes.

Matthew: Meredith, is there a tool that you use that you find very helpful for your productivity with you and Ashley or your extended team that you'd like to share?

Meredith: Yeah. I mean, we're in super startup mode still, so we don't have a whole lot of tools in place. However, I think's not necessarily a literal tool, but it's something that we found really important early on in our process, especially as we were fundraising. And just to document our own progress was, we sent out progress reports really diligently to sort of like anyone that wanted to be on our subscriber list, really, between like friends and family and investors, just so that we could document all of our progress or setbacks and be really transparent along the way with our process.

I think that was a really effective communication tool for us with external people who ultimately then converted into an investment after they saw some progress or led to some really meaningful brand partnerships or conversation that allowed us to be more productive in the business for sure. So that was really important in our process early on. And then also, I mean, we have Google, you know, Google Spreadsheets for pretty much every single thing that we do.

Largely thanks to Ashley because she's much more OCD than I am. But I think that has been really valuable. It's a great tool to keep yourself organized. So, from very early on, whether it was like developing all the product copy for the website, the wireframing of the website, the pricing, the inventory we buy, like, everything is pretty well organized, considering what stage of the company we are. So I think keeping yourself diligent and using the tools that are accessible to you is certainly important.

Matthew: Yeah, definitely, too, that progress report, like you mentioned, that does help a lot of people that weren't sure the first time you spoke with them kind of come around if they are on the fence like, "Hey, you know, Ashley and Meredith are legit. They're making a lot of effort here and they're getting results and they're doing things and it wasn't, you know, kind of just an initial push with nothing behind it."

Meredith: Absolutely. And even if we didn't think, even if we felt that it was falling on deaf ears, which honestly, it wasn't, because we felt engagement from the email correspondence right away after we would send one. But beyond that, we would hear sort of like buzz about us before we even launched. So we knew that conversations are being had and we knew it was kind of spreading. So it was really effective for us.

Matthew: Ashley, if you were starting all over again with Fleur Marché, what would you have done differently? I know you're still a young startup, but that probably makes the pain of decisions that you wish you didn't make even more real still.

Ashley: Yeah, I mean, I guess my answer is kind of, I think we're still in the phase of making those decisions that will either make or break us right now. And so, you know, in six months, I'd love to answer this question again. I think right now, honestly, because know, everything feels so weighty, every decision feels so big. But I do think one of our strengths as founders is that we do have a little bit of levity. We are aware that like, it does, you know, "Not today, Tuesday," like whatever decision's in front of us does feel huge.

But in a week even, it probably will come second to the next decision we have to make. I think one of the reasons [inaudible 00:43:30] we're great about that. So for me right now, the only thing I probably would have done differently is started this sooner. I think it was really important for us, once we decided to start the company, to move quickly because we felt like the craze was coming and now it's here. If I had thought to do this a year earlier, you know, imagine where we'd be now. So for me right now honestly, that's the only thing I would have done differently to date. But I'm sure that will change.

Matthew: Good. Okay. How about you, Meredith?

Meredith: Hey, that's a really good answer, Ash.

Matthew: It was.

Ashley: Oh, thanks.

Meredith: I don't mean to sound cavalier, but I kind of agree. Like, I don't think...I'm not like a regretful person. I think we really did the very best we could and we are as strategic as humanly possible and thoughtful about really every single aspect of what we've done. And I think there's kind of no shoulda, coulda, wouldas for us at this point. I think we're about to learn what those are for sure in the next six months. But I kind of want to steal her answer. That's really good. I wish we would have started this sooner. But honestly, I don't think I had the balls to do it, though. I think, for me, it remains to be seen.

Matthew: Yeah, there's that fear threshold. I always talk about that. I've started a couple businesses. And it's like, I just say I was 51% courage. Like, you don't need to be like this fearless, courageous leader. It's like just a little bit more, then, just enough to get through the fear and then, you know, stick with it. So...

Meredith: Exactly. Exactly.

Matthew: Well, Meredith and Ashley, thanks so much for coming on the show today. As we close, can you tell listeners where to find your site?

Meredith: Yes. You can find us at And that's French spelling, so I'm happy to spell it if that helps.

Matthew: Sure.

Meredith: It's And then you can also find us @fleurmarche on Instagram or Facebook. And then also @FleurMarche, one word, on Twitter.

Matthew: Great. Well, thanks so much for coming on the show today and good luck in the rest of 2019, or I'll say bonne chance in the rest of 2019.

Meredith: I love it.

Matthew: Take care.

Ashley: Thank you so much for having us.

Matthew: Thank you.

Meredith: Thank you so much.

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. Promotional consideration may be provided by select guests, advertisers or companies featured on "CannaInsider."

Lastly, the host or guests on "CannaInsider" may or may not invest in the companies or 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 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.

Traditional Investors Are Planting Their Flags In Cannabis – with Codie Sanchez of Cresco Capital Partners

codie sanchez cresco capital partners

Pioneer investors with more traditional backgrounds in finance are beginning to plant their flags firmly and confidently in the cannabis space, and here to tell us about this is Codie Sanchez.

Codie is a managing partner at Cresco Capital Partners, a private equity fund in the legalized cannabis space. She previously lead First Trust’s Latin America Investment business and held positions at Goldman Sachs, State Street, and Vanguard.

In this episode, Codie shares her insights on the future of cannabis and some invaluable advice for traditional investors looking to enter the industry.

Learn more at

Key Takeaways:

  • Codie’s background in the cannabis space and her best investments to date
  • Why Codie believes there’s more opportunity than risk in cannabis investment
  • How investors, entrepreneurs, and funds can overcome the stigma surrounding cannabis and get their audiences on board
  • Codie’s advice to investors on how to go about navigating the difficulties that come with pioneering an industry like cannabis
  • The ratio of over-valued, fairly-valued, and undervalued deals Codie is witnessing in cannabis right now
  • The most noteworthy acquisitions and investments in cannabis over the last 12 months
  • Codie’s advice to entrepreneurs trying to raise capital and the do’s and don’ts for pitching decks
  • Where Codie sees cannabis going over the next 3-5 years and the opportunities that excite her the most


Read Full Transcript

Matthew: Hi, I'm Matthew Kind. Every Monday, look for a fresh new episode where I'll take you behind the scenes and interview the insiders that are shaping the rapidly evolving cannabis industry. Learn more at That's Now, here's your program. Pioneer investors with more traditional backgrounds in finance are beginning to plant their flags firmly and confidently in the cannabis space. Here to tell us about bringing traditional investors into cannabis is Codie Sanchez. Codie, welcome to "CannaInsider."

Codie: Matt, thank you so much for having me.

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

Codie: I am actually in sunny San Diego. California isn't where I typically am, I'm out of Washington, D.C. but today I will not complain.

Matthew: Oh good, good. And I'm in Dallas.

Codie: Nice.

Matthew: Codie, can you give us a summary of what you do?

Codie: Absolutely. So I recently came on as a partner at a private equity fund focusing in the cannabis space called Cresco Capital Partners. And so, you know, we exclusively sort of focus on cannabis investing, your world. And I came on board to really help us institutionalize. We'll be raising our third fund, which will be a very large one. And I think we all sort of believe we're at the tipping point for institutional investors to begin really investing in this space. So that's what I spend most of my time on now, Matt.

Matthew: Okay. Could you share a little bit about your background and journey and how you got started in investing and in particular the cannabis space, what prompted that?

Codie: Sure. You know, I can't say that it was absolutely outlined. I think like many in this space, I was very traditional prior. You know, I went from the Jesuit School of Georgetown to traditional investing on the street with firms like Goldman and State Street and Vanguard and the venture investing with a firm called Magma. And I never really imagined I would have been sort of championing the cannabis industry, to tell you the truth. And so, you know, I'll tell you something though. I started out my career as an investigative journalist, which means, you know, I was working on the U.S. Mexico border writing stories about drug trafficking and human trafficking. And it really taught me to sort of never take anything at face value, right? And so I guess that's maybe why I've had some success in investing because you'd have to question everything and find the root and you can't let others' stigma or assumptions stop you from finding it.

So when I started diving into cannabis originally, because Matt, one of the partners asked me to invest in his fund, I was amazed at what I found under the hood of all of this stigma in general, misinformation. And so I, you know, started digging deeper and invested in a slew of companies and do what I do every time I wanna go deep into an industry, which is go where the game is played, go to all of the conferences, events I could, and I saw this big dislocation happening in the market and what I think might be one of the biggest generational wealth events, you know, and perhaps societal change events in our lifetimes. And so I sort of gave up the more traditional route and said, I want to double down on cannabis in a very strategic and thoughtful way. So the whole experience was traditional Wall Street, you know. Before that was investigative journalism and now it's sort of I suppose, a mixture of asking those right questions and applying it to an investment thesis.

Matthew: Yeah. That little bit of an edge, like, if you're just a little bit scared, should I be doing this, that's my sign that I should be

Codie: Exactly. Well, that's good. I think we all believe that, but then we don't do it, right? And so, you know, after finally talking to all my mentors at Goldman and KKR and Carlisle, who thought I was crazy at first, you know, now a lot of them want to invest with us. And so it does seem that if you face that fear and the few people are naysayers, that's probably still a good thing. You know, if everybody was in on cannabis, we might be a little bit late to the game.

Matthew: Yeah. And can you talk a little bit about your investments to date in the cannabis space?

Codie: Sure. So there's a slew, this one's hard because there's so many that I'm really interested in, and don't get me wrong. There's plenty of companies that I think are absolutely just riding the wave of cannabis growth. But, you know, I think you could start with some of the exits that we've had in this space. That's what originally got me excited about cannabis private equity is I have never seen so many exits realized and unrealized so quickly in a fund before. And so, you know, in Cresco we've had seven exits thus far in two funds. Yeah, pretty wild. And you know, and that's in two and a half years. And so I would highlight, you know, Ebbu was one, it was a research company with sort of a focus on lots of different patents. They sold this to Canopy Growth for, I don't know, 160 million or something like that.

And then we were early investors in Acreage and GTI. And so, you know, they've done great. Kevin Murphy has really led from the front there. Some of the ones I'm excited about coming down the line are gonna be ones I think everybody in this world knows like Harborside, we invested early in them. And so I'm excited to see them go through their public listing, which seems like it's gonna be soon. And then a couple of them that are fun and maybe not as well known are Prohbtd, which is P-R-O-H-B-T-D. So kind of just take out all the vowels and they're media and content company. I think they're worth a follow on Instagram and YouTube to kind of see how pop culture and cannabis are colliding and to see how brands are being integrated into content in a way that users are not only engaging with the content but they're actually buying from them.

And maybe one of the last ones I'm pretty excited about is some good friends of mine started a company called Westleaf in Canada. And so we invested in them. I like this idea they're doing of, you know, experiential, sort of cafes and record stores. They're going to be building those across Canada, very high end. And then the last one was the first company I ever invested in in cannabis and not to make money. And, you know, I'm no saint, we certainly all are in this game to make sure that we're having, you know, purposeful profits. But it was called Texas for Veterans and this one is essentially working with a group in Texas to talk to the legislature in order to get reach and access and research for cannabis for veterans with PTSD. And so, you know, if that one goes through and we actually are able to get the legislature to allow for some licenses in Texas, that would be probably the one I'd be most proud of.

Matthew: Wow. Definitely. That's cool. And what about stigma here? I wanna circle around to that again. So the stigma, I still find it the more you move east in the United States, it seems like it's still there, but it's going away quickly. But, you know, how do you deal with the reticence there and do you have any examples of where you kind of maybe got someone to see the light that was kind of not a hardcore no, but kind of on the fence or what is it that kind of turns the light bulb on for somebody that's not sure or is a little too conservative? I'm curious myself because I employ different strategies to try to get people to look at it a different way. But it is really ingrained in there. And I think when your job security is on the line too, we're saying, like, you know, I'm not gonna invest in this because it might affect my standing, my community or with my peers. How do you lead people through that or do you even try?

Codie: Absolutely. Well, you know, I think there's two things. If it's about capital raising, so bringing in money, I'm a big believer of go find the people that are predisposed to already want what you're selling. So if I was talking to people who were representing our fund from a capital raising perspective, or for the people listening who are companies who wanna raise capital, don't go try to educate people. You know, there's 300 plus million people in the United States and there are many of them. They say 60% that are pro cannabis. So go find the people that are already wanting what you're selling. But I think from a sort of moral imperative, yes, you have to educate people on this asset class and on this industry overall. And I think you're right. I mean, I even think reticence is maybe too small a word.

And I underestimated this when I first bought in. You know, I grew up on the west coast and, you know, it's definitely more common out there. I certainly had some stigma and some stereotypes regarding, you know, maybe stoners and, you know, work ethic and all the typical things. And so I don't discount that at all. And, you know, how are we, how do we expect it to change ideas held since the 1970s or you could say since 1937 in an instant, right? But what I've found is the best investors have always been contrarians. You know, like Jobs said, they're the ones who think differently because if you're investing and you follow the herd, there's always a cliff at the end of the road. So I think one of the best ways that I've found to educate people on this is to say, you know, I want you to think about this from a contrarian perspective.

I want you to remove all of the assumptions and I want you to remove all of the stigma that you've heard about this plant and pretend you've never heard of cannabis or marijuana before. And then they'll kind of like, if they're curious humans, they'll get a little bit of philosophical on it, right? And I'll say, okay. So imagine I know nothing about cannabis. And I'll say, and then imagine all you know about it are the numbers that I'm gonna tell you because in my opinion, I'm an investor and nothing opens eyes like math. Math always wins. It's really hard to fight, you know, emotionally against math. And so if you talk about the numbers, then you know, it's very different. There are 147 million people give or take using medicinal marijuana in the US. You know, they're using it for AIDs, multiple sclerosis, cancer, right, Parkinson's.

And then if they say, ''Well, you know, what about addictive nature?'' You know, I think it's fascinating that we can actually see opioid mortality rates are continuing to climb in the non-legal states in the US. So where cannabis isn't legal. However, in the legal states we're seeing a decline in the rate of opioid mortality deaths. That's pretty amazing. And so I just go back to the numbers again and again. And you know, usually I go first to the heart, so medicinal and opioid. And then I go to the pocket book, which is, you know, let's talk about the, I don't know, $1.6, $1.8 billion in tax revenues that we've had since 2014, with 50 some odd percent of that going to K-12 education. And so once you get to the numbers, it's like, huh, well, let's at least have an opportunity to have a conversation and open a little bit the mind to the fact that maybe cannabis is not this, you know, reefer madness, 1960s, '70s idea.

Matthew: Yeah. Now, there's a famous quote that you can always tell the pioneers because they have arrows in their back. If you were talked about some of the exits so far, and that's been really good news, but if you were to get an arrow in your back, or you were to see other investors getting an arrow in their back, where do you think it would come from, which direction?

Codie: Yeah. You know, I think where investors most fear risk or an arrow in their back would be regulation. The number one reason why people won't invest in this space is we're scared of the government, we're scared of government overreach, we're scared of the legal ramifications period. And that is usually enough to stop a lot of investors. The ones that, you know, can speak to their attorney and talk about it a little bit further and get past it, the thing that I think is more likely to hurt them than regulation or government overreach again, you know, the government doesn't really like to bring in $1.6 billion in taxes and get reelected because of all the schools they've been building and then give it all away. So that doesn't seem hugely likely to me. But I think the way that most people are going to get hurt is picking the wrong companies.

And this is where, you know, talk about quotes, history doesn't repeat, but it doesn't always repeat, but it rhymes and there's really nothing that different in this industry than any other one in that you have to be incredibly strategic and do incredible amounts of due diligence on every single company in here. And so, you know, I actually worry about all my fellow Wall Street, you know, Goldman Sachsers who are sitting on 50th floor penthouses investing in cannabis because I think you have to get down into the soil where it grows, right? You have to know where the bodies are buried and you have to really not have your finger on the pulse, but your feet firmly planted upon it in this industry because it is moving so fast. And because there are so many regulations changing that I think where you get into trouble is picking the wrong companies and thinking that because there was a way of early that that wave will always continue and that fundamentals don't matter.

Matthew: Yeah. And then I would imagine being, having some level of diversification because, you know, a bunch of them are gonna fail.

Codie: Absolutely. Well, and that's why I get really nervous about, you know, investors investing individually in cannabis companies as their main exposure to the space. You know, typically...and obviously I'm biased. I represent a private equity fund in the space. However, when I was an outsider doing what a lot of people are doing today, the first move I did was invest with a fund. And it's what I do in every single space. The first time I was in Latin America, I invested in a fund. The first time I did credit, I invested in the fund. Then I leveraged that portfolio manager's expertise, I got exposure to all the companies in the portfolio and I learned by an expert that had already done the 10,000 hours, instead of having to do the 10,000 hours myself and losing the couple of hundreds of thousands of dollars that people typically do when they're first-time investors in venture companies. It's, you know, it's really hard to get's really easy to get into these deals and then it's really hard to get your money out of them. So you've got to have, in my opinion, got to have a team that has been there and done that previously first.

Matthew: How do you see valuations in the cannabis space right now?

Codie: Yeah. I think that's a question probably I get asked the most after, you know, how it works from a legal standpoint. So, you know, we've looked at something like 1,600 deals, let's say, give or take. And we've invested in less than, I don't know, 1.6% of the deals. So we see a lot of deals and we don't invest in very many of them. Some of the trends that I see in valuation are that, yeah, a lot of the Canadian deals have seemed pretty high from a valuation standpoint, right? Okay. And that's because they're legal. They're a little bit more de-risked than the US market. But the biggest thing that I see in valuation that's interesting is the dislocation or the arbitrage between private companies and public companies. For example, you know, when we're invested in a company, we might be looking at anywhere from three to five times forward earnings or trailing 12, depending on how we're structuring the deal.

And if you apply that to the public markets, those same numbers may be 50 or 100 times. So you essentially have this amazing premium for investing privately that you don't get when you go out and invest in the public markets. And that's because there's a lot of appetite and pent up demand for cannabis. And so cannabis stocks are the easiest way to get into it. But in my opinion, probably the best way to get into them is on the private side. Not everybody can do it. That's one of the barriers to entry, but I've just seen the valuation differential is huge. Besides that, I mean if you look at cannabis companies' valuations versus let's say the broad-based venture, either early stage or even, you know, late stage companies in tech, I actually think cannabis looks a lot more interesting. It just hasn't seen the amount of capital come into the space that we're seeing with the, you know, SoftBank's are raising, you know, $100 billion funds and literally have so much money that capital has become a commodity, meaning it's too easy to have money. And so they're giving it pretty liberally to a lot of deals where cannabis has the exact opposite effect, we're capital starved, right? So for me, I think cannabis valuations on the right deal look really reasonable and if they're not, we can usually negotiate that and given the size of our fund.

Matthew: Yeah, I was gonna ask you about that, but first just off the top of your head, we won't hold you to it, if you were to categorize the deals you look at into three buckets, overvalued, fairly valued and then undervalued, how would you sort those out? What are the percentage breakdowns would you imagine?

Codie: Well, you know, this one's interesting because the reason why we don't invest in companies is typically not the valuation to be perfectly frank. The reason why we typically don't invest in companies is because, you know, the thesis isn't very good, or the team isn't very good, the idea is half-baked. It's, you know, pre-revenue and we're not even looking at the value because they don't have the rest of the deal. So if I get rid of all of those and say, let's say of the actually a couple hundred deals we look at that we're relatively serious, I would say probably 60% of them are fairly-valued to undervalued and 40% are overvalued. But that's also because we're screening kind of a lot of the negative ones away. So you know, if you're an individual investor, accredited investor listening to this, you know, I think the process is like first, you know, talk about the team because that is the most important thing in any business, and then it's look at the thesis and then it's look at their projections. And then finally, after you're incredibly solid on those three, then you start looking at the evaluation and see if it seems reasonable. That's often pretty negotiable.

Matthew: Can you talk about how you can change the valuation and what that conversation is like?

Codie: As an investor, how can I get them to change the valuation?

Matthew: Yeah.

Codie: Yeah. Well, you know, again, this is a capital-starved industry for the most part. So usually on these deals when they're earlier stage, capital is an issue. They need more capital. And we're oftentimes the lead or co-lead on the fund, or on the deal, I would say something like 60% of the time, we're either leading the deal or co-leading it, which means we get to set the terms. And so what we're looking to do here is make sure they don't set evaluation that's too high, that they won't be able to get more capital for at later rounds. And look at the industry on average and see what do we actually think this company is, you know, worth. And typically it's really pretty easy to do because if we're this far off in the beginning and, say I look at the company and I say like, "You guys are worth three times your trailing 12 from a revenue perspective," or maybe I'm looking at it an EBITDA perspective, whatever number is right for the sub sector that we're in. And they say, "No, no, no, we're 10 to 12" and they fight me on that quite a bit, then we're probably not the right fit for them because the last thing we wanna do is have the investor be unhappy in the deal. So we might just say, "You know what, like, I hope you're worth 10 to 12, that's awesome. I hope I'm wrong, you know, come back to me if, you know, you end up having more difficult time raising. But we're more in the three to five times range." And it's pretty much like that. And if we're too far off, then we're probably not the right mix anyway.

Matthew: Yeah, that's a good way of doing it. You don't wanna make any enemies at the same time, you don't want to resentments and things like that. So that's smart.

Codie: Yeah. And typically, like, you know, our investor, our companies that we invest in, we're very, very actively-involved and that's sort of the value that I think we try to bring to the table. And so there's a trust factor. There are a lot of these guys have never raised a ton of money before so they're sort of trusting us to make sure that we're helping them set the right valuation. And there is a lot of mutual alignment that we are setting it the right way because you want to make sure the founders are incentivized to continue grinding. And if you set the valuation too low and they don't get enough equity out of it in the long term, you hurt yourself as a venture capital fund. So I actually think there's a lot of alignment there.

Matthew: Yeah, there's a lot of levers and things to consider there. Good point.

Codie: Yeah, absolutely true.

Matthew: Okay. So we're starting to see some big players from different industries step in and make acquisitions. Are there any acquisitions or mergers that you've seen in the last 12 months that were particularly meaningful?

Codie: Sure. You know, at first I, of course wanna say all the big guys, right? I think it's astounding that we've seen billions of dollars plowed in by some of the largest beverage and, you know, tobacco companies out there, like Constellation Brands. I also really thought the deal with Sandoz and Tilray was interesting in Canada since Health Pharma companies are gonna play in this space. It's not necessarily an acquisition but, you know, distribution agreement. But you know what actually amazes me is I was reading the other day, Matt, a UBS cannabis industry report, which is also fascinating that all of the firms on the street now have a very boring, very long, very traditional report on cannabis and they...

Matthew: I would imagine it'd be boring. UBS writing about cannabis.

Codie: I know. I know, but you know, you can tell they're just trying to figure out a way in the door. And they had listed 60 notable M&A events since, I believe it was the beginning of December, 2018. So to me it wasn't actually even what are the big huge acquisitions, it was let's look at the scale. It's not just a few dominant names buying in. It's a ground swell of cannabis M&A activity. And it's pretty pervasive. And these aren't deals where companies are making acquisitions and M&A without cashflow, and these are just ideas and there's, you know, no pent up demand. These are real businesses getting bought out and restructured and creating leverage. So I was amazed at that number.

Matthew: Yeah. And what do you think about a profit margin squeeze here? It's something I think about, particularly if a company is touching the plant, but not so much if they're in a market where the licenses are difficult to get. But I do think about it and then I'm like, are we just in the golden era right now where that doesn't matter so much for the next few years? What do you think about the profit margin picture?

Codie: Yeah, that's a great question and something we think about a lot. I was actually talking with Matt Hopkins who he founded Cresco. And so he's the one who brought me into the space. And it's one of the reasons why we're biased towards, you know, let's say vertically-integrated brands for example. Profit margin squeeze is just a reality. It's an inevitability in my mind that the price will come down for flower and it already has. And in fact, that's kind of a good thing, right? It's democratization of the flower, which allows for more access for all. So I think what we see is absolutely the price is going to come down and so there's going to be a margin squeeze. However, what we haven't seen yet in cannabis that we see in all other industries is a real premiumization right?

We haven't seen brands emerge that will be price elastic where users don't really care about the cost. They want the experience, they want the brand, you know, it's why you buy, so you pay so much more for one type of wine, then another type of vodka or for this type of name brand medicine versus another one, right?

Matthew: Right. The Tiffany box.

Codie: Exactly. And so...yes, which is a great example. Yeah. So I think I'm comfortable with the price coming down because we wanna be with the premium brands and then also we wanna use the different type of product variance. So, for example, if we say that flowers lost, let's say like, I don't know, maybe 10% of dollar share while vape pens have gained maybe 14 points over the comparable time on average across states, and it varies widely, the average selling price for vape pens is $37. And the average price for flowers, 26. So even while we see a decrease in, you know, the percent that flower is sold and in the margins there, we're actually seeing an increase in the more expensive product that has better margins. So I think there's a lot of ways to play this game, but it's again, why you better have your finger on the pulse because this is happening so fast and I'm not sure the trends that are happening today will be the trends that continue over the next year or two.

Matthew: Yeah, agreed. And what about pitch decks? I'm sure you look at a lot of pitch decks and there's entrepreneurs out there who are listening, but also other investors. When you look at a pitch deck, what's the kind of lens you're using and is there anything you say, oh my gosh, they forgot this or this was really helpful that they included it?

Codie: That's great. Well, yeah, I'm sure you've seen a ton of pitch decks in your day, especially in this space. But yeah, I mean, I think if I have to look at it broadly, the single biggest mistake I think investors...or I'm sorry, I think people seeking investment make is they pitch investors only once. So you get your pitch deck, you hear about everybody going up to Sand Hill Road, or in this case maybe they're talking to all the cannabis PE funds and they do 100 pitches and everybody says no. And finally they get that one that does, right? But when it comes to somebody giving you money, it's a purely trust play. And the biggest trust factor is that, you know, most businesses don't fail. Founders give up.

And so if I was a company looking for funding, I would stay in front of those that you want as investors and slowly and continuously drip on them with your results. So even if your pitch deck is pretty bad in the beginning, let's say, I would ask for feedback on it, I would ask if you could continue to stay in touch as you develop your thesis. Any, you know, investor worth their salt is gonna say that's fine. And then I would keep asking for feedback continuously. I think that is the single biggest way in which most people get big checks signed. And then the other idea I think is, you know, have an understanding of your numbers. What I see a lot of time by founders are big ideas and not a lot of particulars in how they're gonna get there. I want to know that those founders know their unit economics down to the penny. What are your costs of goods sold? How did you get to those numbers? How could those numbers change? What are your predicted sales targets? Why? You know, what are the things that have to happen in order to make that happen? What are your costs going to be overall? How are you going to eventually pay yourself a salary? What's your runway? I wanna know all of those numerical and dollar-oriented items in a pitch deck. And typically pitch decks are heavy on visuals, heavy on creative and ideas and light on numbers.

Matthew: Yeah, great points. Great points. And can you explain what a down round is and what the best way to handle that situation is? I mean, this is not something that's very fun to talk about because usually it's kind of a situation that people aren't excited about, but it happens. Can you just kind of walk through that?

Codie: Yeah, absolutely. So a down round is essentially, it really means that the company probably priced their last round of fundraising too high or I guess, you know, something could happen pretty catastrophically in business that necessitates the round being less. But essentially just means that if a company raised, you know, I don't know, x dollars at $1 million valuation, they need to go out and raise their next x dollars. But the street and investors don't value their company at $1 million anymore. They value it at $500,000. And so this has a really negative connotation in venture because it's usually investors have an anti dilution provision, which means that the investors will gain more of the company at the same price as that new round of investors. And that essentially means the founders get less money.

This can be negotiated, but it typically makes future rounds more difficult to raise because there's a feeling that something's wrong in the business. Either the founders aren't very good at determining the cost or the value of their business or their business had some sort of negative impact and so they had to go backwards. And in companies where we like to see hockey stick-shaped growth, going backwards is not great for future fundraisers.

Matthew: Right. So they're kind of saying, I have to put more money in to eventually get this money out or do I cut [inaudible 00:30:05] here and runaway. But I got to leave some money for the founders in here so they're incentivized. So, there's a lot of chess going on here. I think that's, you know, that's where the opportunity is where it's opaque like this. So it's fun to hear you walk through that and hear the thought process. Okay. So what about a business that is already generating, say seven or eight figures in revenue? And I'm thinking of some right now in my mind, but they're not a purely speculative startup. They're more mature. They don't necessarily need the money, but they say, hey, if I can get it with the right terms, I can expand, I can do more, but I just don't wanna get's not worth it to me to get the wrong terms. But at the same time, investors are saying like, "Well, I want some higher returns." So I mean you're looking for the right investor, but how would you counsel somebody in that situation, a startup that is doing pretty well already, but they don't wanna give away the farm?

Codie: Yeah, absolutely. Well, we actually typically invest a little bit later stage. So seven or eight figures in revenue is about right for us. We've done some real seed stage more back in the day, but we've kind of matured with the market. So this is sort of in our wheelhouse. And what I would say is a couple fold. One in my opinion, you always wanna raise when the money is easiest to raise. And so I really am a firm believer in right now in cannabis we're at an incredible period to go out and raise money. There's a lot of wind at your back. You know, we're at a 10-year bull market, more than that now, we're in 2019. But you know, we're at one of the longest bull markets in history. And if I was a founder that thinks that I'm going to need some capital in the future, I would go raise it right now today.

If you do have a strong seven or eight figure business, you probably will get good terms. So at the very least I would say my advice would be go start talking to the players that you think are aligned with your business. Go start talking to the firms or the individual investors that you want to have a smart money in strategic partners regardless, get a little bit of a feel for what would the offer be? Are they even interested? And start having those conversations now because there is nothing worse for getting bad terms than a sense of desperation. So you did not wanna have to go and raise when you really, really need it and your runway is going low and, you know, this is your last option because investors, you know, that means it's more risk for them, which means that they're gonna take more return from you.

Matthew: Okay. And I know this is a totally subjective answer I'm gonna ask you for, and the circumstances could change right after we hang up here. But if you had to put all your investment capital into one market category or segment within the cannabis space right now, assuming the valuations were fair, what sector do you feel most bullish about?

Codie: Oh, this is such a good one. So difficult because I always would say it's not about the sector, it's about the team, which sounds cliché except it's absolutely true. However that being said, we don't like to invest in grows right now, pure grow play or real estate. We've done those in the past. We don't think that's the best return, risk return trade off right now. We do really like strong, differentiated, vertically-integrated plays. So I think there's some premiumization there. And then increasingly, which is very hard to do, it's brands, right? And so, you know, our portfolio right now has the biggest allocation to brands, ancillary services and vertically-integrated. And I think we will keep doubling down on brands, but it's gotta be the right ones because brands, you know, vertically-integrated, if you can get scale and you have your capex, right, and you understand the regulatory structure and you have the right team, not that it's not difficult to do, it's very difficult to do, but it's pretty straightforward. Brand is like magic, right? You know, you've got to have this magical mixture. And so it's really important to us to find the right brands. But I think the right brands are gonna be where all the money is going forward.

Matthew: It is. There's something about brands, like there's some big brands in the cannabis space where I've been in their facilities, you know, I see the extracting oil from trim and making this or that and the end products and everything, and then they mark it and do a great job of packaging and so forth. And somehow it works on me even though I saw how the sausage has been made and I'm like, what is this about us that we, you know, we want to walk in a movie theater and, like, Pepsi won't do, it has to be Coke. It's just there's something there where we just had identified it in our mind and, like, only that will do. And that's what you're talking about there is that direct hit of a product market fit. So agreed, brand's going to be huge here. So Codie, looking ahead the next three to five years, what opportunities or even predictions make you most excited?

Codie: Sure. Well, you know, I think one of the biggest prediction that I've predicated my career on and that I've also predicated the investments that I've made is this industry of cannabis becoming completely integrated into the way that we live. And so for me, I call this plant integration, which is essentially the idea that cannabis and all of its derivatives is going to be inside of about every industry that we can think of in the U.S. And now for you and me here on this podcast, that may sound normal and it may sound like something that we already see happening, but outside of our little world, most people do not have eyes to see that cannabis is going to be, you know, inside of beverages, that we're going to have, you know, CBD in every coffee shop as an option. That we're going to have bombs and lotions all derived from maybe hemp, maybe one of the other myriad of strains. That we're going to have THC delivered by, you know, doctors and varying types of prescriptions.

And that to me is really what I'm most excited about because the implications for me in this industry are that we are amidst a generational wealth creation event. That if we do this right, those who invest now will structure the future of this industry. Those companies that are founded now will structure the future of this industry and that it can have a broad based implication on everything from, you know, veterans with PTSD, which is very near and dear to my heart too. You know, my grandma who I mentioned, invests in our fund and who, you know, also loves to go to the country club and play bridge and never would have ever thought she would touch anything to do with cannabis in her 91-year old life. And so that is what I'm most excited about. That, and you know, I'm all about the government being able to tax this industry and all of us being able to benefit as citizens from this formally illicit industry.

Matthew: Codie, I like to ask a few personal development questions to help listeners get a better sense of who you are. With that, is there a book that's had a big impact on your life or way of thinking that you'd like to share?

Codie: Yeah, absolutely. I'm a pretty voracious reader and I, you know, we were talking about this earlier, but I do kind of think that an investor has to have a curious mind. If they don't, I'm not sure how much I trust them. So I'll give you two that are pretty different on polar opposite ends of the scale. The first one is ''Letter to Young Contrarians.'' It's by Christopher Hitchens. And he was essentially this sort of political activist and known for being a sort of a rabble rouser. He really always stood against the norm. And what I love about this book is it really teaches you to question everything and it teaches you that you need to let yourself find the truth, not be told by another. And so I would recommend that book hugely. Especially for those who wanna look in this space, it gets you to open up your mind to ideas that may not be that comfortable to you.

And the second one is, it's pretty contrarian and maybe a little bit dangerous book to recommend these days given its political leaning is ''Atlas Shrugged.''

Matthew: Oh yes, heard that one. Yeah.

Codie: Yeah. And the reason that, you know, I give you this one, well first I'll give you Christopher Hitchens, who's a Communist Socialist kind of, and now I give you, you know, uber-free market conservative woman. So you know, there's cognitive dissonance there, right? You can see there's both sides and no pack mentality. But for me, ''Atlas Shrugged'' fortified the love of work, right? The absolute joy of doing what you are uniquely skilled at doing and not letting anyone stop you for that. And that's why I back companies because I think our economy and our returns are all stimulated by the production of those who love to labor. And, you know, she's got some great quotes in there too. Like how can you not love, what's that quote? It's like the question isn't who is going to let me, it's who's going to stop me? Like that's gotta be on a tee shirt somewhere, right?

Matthew: Yeah. And I rant, you know, it's fun to go on YouTube and see her on the Donahue Show way back when. I don't know if that was the '70s or '80s and just listen to her, you know, talk and there's no one that really was quite like her. She's one of a kind to her response to things and everything, it's very, it's just really worth doing. So I would encourage that too. That's a great suggestion. Great book.

Codie: Interesting. Yeah. Well, I will have to do that. Yeah. She was definitely a contrarian too, so I think that's what we're looking for. There's too much herd mentality these days in politics and probably against cannabis too. So I always like to listen to those who will make me think outside of the box a little bit. It's how you make money.

Matthew: I always noticed too, when people come from communist countries, they're not, like, communism is great, let's try it here. They're always like, we gotta make sure we don't do this, like, where I came from. Okay. Is there a tool you or your team use that you consider vital to productivity?

Codie: Absolutely. I'm a total productivity nerd. So I think we could do a whole podcast on tech stacks I love. But the normal ones, like, you know, like everybody says is Sauna, FTT, Xoom, Evernote, but I think some of my favorite quirky ones are...well, one that's kind of funny is ScreenToGif. Essentially, what this does is it turns anything into a GIF, which sounds maybe useless except I use it to record processes for our team and assistants and even portfolio companies. So you can use it when you're screen sharing, instead of screen sharing or video recording your screen, it can essentially create a GIF of a step by step process. And so when I'm explaining...

Matthew: I like it. Yes.

Codie: ...yeah, it's really nice and there's no extra time wasted. It's just screen, screen, screen, screen, screen, screen and you can forward it to the next person for them to follow. So I really like that.

And then the other one would be eCommerceFuel. This is a group. And essentially what it is, is it's a group of founders who have revenue post one or five million, something like that. And they all do things in ecommerce and it's infinitely searchable for all the things that small businesses and startups need to know by other highly-screened companies. And you can engage with these experts one-on-one. So it's a little bit of like a human tool, right? But yeah, I think it's the Library of Alexandria for companies that are doing things online and I think eventually that will happen to cannabis. So it could be interesting.

Matthew: Great suggestions. Haven't heard either of those before. I'm gonna ask you a Peter Thiel question now. What important truth do very few people agree with you on?

Codie: Oh, I mean, besides cannabis being a generational wealth creation event, I think I would probably go back and quote Hitchens again, which is that I think you should seek out argument for their own sake. And I believe he said, "The grave will supply plenty of time for silence," something like that. And so I believe that you should be very cautious if you find all around you are agreeing with you and find instead those who challenge your opinions and be very cautious if the arguing gets you emotional because emotions have no place in rationality for me. You wanna argue to understand others, not argue to sway them to your opinion. And so I'm very careful with isms and ists and all manner of classification and focus on thoughts and my disagreement with those thoughts and not people and my disagreement with them.

And so in investing, I think this is super critical because if you were a yes person all the time and investing, you're gonna get in a lot of trouble. And so instead with our team, one of the reasons I love, you know, my co-partners is we challenge each other mercilessly. And so every thought is sort of taken out that has nothing to do with the fact that we're all friends, but we can remove the thoughts from the person and say, "Do I really agree with this? Why not? What could be the absolute downside of this and why could I disagree with this idea intensely." And so I suppose my difference is there's so much time for silence in the grave. Make sure that you argue rationally now.

Matthew: Great points, great way to tease out the truth.

Codie: I agree.

Matthew: So Codie, as we close, what's the best way for listeners to find you online and for accredited investors to reach out to you?

Codie: Sure. So our website is and that's where investors would go. We are closing out our second fund and we'll be raising a third. We're, you know, relatively selective in that standpoint, but happy to talk with anybody even if we're not the right fit. So, you know, happy to have anybody reach out there. I'm also on Instagram @codiesanchez, C-O-D-I-E S-A-N-C-H-E-Z. And for anybody that wants my email, it's just If anybody's out there pushing forward, you know, sort of the right ideals and ethics and cannabis and companies moving forward the needle in that van too, I wanna know you.

Matthew: Great. Well, Codie, thanks so much for coming on the show today and educating us. We wish you the best in 2019 and beyond and keep us updated.

Codie: I absolutely will, and I'll keep listening to your podcast. I so enjoy it, Matthew, so thank you for having me.

Matthew: Thanks, Codie.

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Families Are Turning To Cannabis To Cure Their Children’s Cancer – with Ricki Lake and Abby Epstein of Weed The People

weed the people documentary with Ricki Lake and Abby Epstein

While we usually talk about the business realm of cannabis here on CannaInsider, in this episode we’re going to take a deep dive into medical marijuana and how it’s being used to better the lives of an increasing number of patients – specifically children.  

Here to discuss this growing movement are Abby Epstein and Ricki Lake, makers of the 2018 documentary Weed The People in which Abby and Ricki follow a number of families that are turning to cannabis to treat their cancer-stricken children.

In this episode, Abby and Ricki share the ways in which medical marijuana is beginning to save lives and why it’s essential we overcome the political and legislative obstacles inhibiting cannabis from joining commercial healthcare.  

Get 30% Off Weed The People Documentary Here:

Interview Key Takeways:

  • Ricki and Abby’s backgrounds in film and what sparked their desire to create Weed The People
  • Ways in which the traditional medical industry is lacking when it comes to children’s cancer treatment
  • Abby and Ricki’s documentary The Business of Being Born and the parallels they observed between the business aspects of the birth and cancer industries
  • The stigma surrounding cannabis in the medical sphere and how certain doctors are working to overcome it
  • Medical cannabis in other countries versus the U.S.
  • Why many of the families in Weed The People choose to follow a combination of chemo and a formal dosing schedule of cannabis to treat their children’s cancer
  • Abby’s advice to parents interested in exploring medical cannabis to help treat their children and how they can do so right away

Read Full Transcript

Matthew: Hi. I'm Matthew Kind. Every Monday, look for a fresh new episode where I'll take you behind the scenes and interview the insiders that are shaping the rapidly evolving cannabis industry. Learn more at That's Now, here's your program. We often talk about the business aspects of cannabis here on the show. But today, we're gonna talk about how medical marijuana is saving and improving the lives of many patients, especially children. I am happy to welcome Abby Epstein and Ricki Lake to talk about their documentary called "Weed the People." Abby and Ricky, welcome to "CannaInsider."

Abby: Thank you for having us. It's great to talk to you.

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

Abby: I'm in overcast rainy Los Angeles.

Matthew: Oh no. We don't hear those words combined very often.

Abby: And I'm sitting in the assemblage nomads in Manhattan.

Matthew: Okay. Okay. Abby, can you describe "Weed the People" at a high level for people that aren't familiar?

Abby: Sure. So "Weed the People" is a documentary that Ricki and I made. We premiered at South by Southwest last year in 2018. And the documentary took six years to make. And we followed five families who all had children suffering from cancer and were looking to use cannabis oil with their traditional cancer treatments. So we follow kind of the human story of these families of how they hear about cannabis, how they access the cannabis, how they use it. And then interwoven with the personal stories, we also give a lot of really hard science. We go to Israel, talk with some of the top cannabis researchers. We share a little bit of the history of cannabis prohibition. You know, it really starts to be kind of an eye-opener for people who either don't know that much about history of cannabis, the current science of cannabis, you know, especially medical cannabis and also for people who know, might be very closed off to that idea because they just don't really understand it.

Matthew: Okay. Wow, good job sticking with it that long. That is real persistence to stick with a documentary that long all the way through that journey, and you can really tell watching it. Ricki, can you share a little bit about how you made your way from actress to talk show host and now cannabis advocate and documentary producer?

Ricki: Sure. Yeah. I mean, my whole career has been much about reinventing myself. You know, I like trying new things. I like showing myself in a different light. And, you know, my shift from talk show to documentaries really was because of 9/11. I was living downtown, the West Village, and I had just had my second baby two months prior. And I was, you know, one of those unfortunate folks that saw it firsthand. And that really kind of shifted my...the way I wanted to live and what I wanted to put out in the world. And I was, you know, grateful to have had the platform of my talk show in my acting career for so many years, but it really wasn't my voice ultimately. And it was through the making of "The Business Being Born" with Abby over three and a half years that really I think I found my voice and I found where I could sort of be of service.

And it's just been really thrilling to kind of put these personal projects out that, you know, we don't really see, you know, the big picture of like, "Will this have an impact," you know. With "The Business Being Born," I mean, when Abby and I started the project, Abby's like, "Oh, it's boring, midwives who cares," you know. It was personal, and so to see the impact it's had 10 years later has been so fulfilling for both of us. And now with "Weed the People," it's making art that's important. It's important. This is important information in "Weed the People." People should know, you know, the history of this plant and how it's really been systematically taken away from people for no good reason. You know, you get behind these personal stories of these families and these children suffering. It's something that everyone should be outraged about.

Matthew: Yeah. Wow, I didn't know the 9/11 impetus there. That's pretty interesting there. Do you feel like there's, like, some PTSD from being down there in southern Manhattan?

Ricki: Oh, my God. You know, I went to three funerals that week. I lost, you know, somebody who worked on my show. It was so traumatizing for everyone. Everyone had their own experience. But for me, in a lot of ways, it was a gift, you know. It was a real gift. When you think you're gonna die and you have an opportunity to really shift things in your life. And I ended up leaving New York. I left my talk show and I left my marriage and kind of started over. And ultimately, it was a blessing because I really truly found my calling.

I love these projects we get to do. I mean, they're not easy to make. I mean, Abby busts our ass. I mean, we are doing everything we can to get the word out about this film because one of the issues with this beautiful film is that we are flagged by Facebook and all those platforms because of having weed in the title, because it's a Schedule 1 drug and it's federally illegal. We can't get the word out in the normal ways that other films can. You know, by talking to you, you know, a year after the movie premiered, we're still trying to kind of raise awareness about this information that needs to get people who are sick.

Matthew: Okay. Abby, in the documentary, the audience follows along kids going through cancer treatments. What patterns did you notice in terms of how the traditional medical industry treated these patients and what was lacking? But also, was there any support there as well?

Abby: I would say generally, like, traditional allopathic medicine. Most of the oncologists were absolutely not interested. And most of them continued to be completely uninterested in prescribing cannabis and learning about cannabis. In the film, you know, what we saw were some of the physicians that work with these children, you know, were kind of like, "Yeah. Yeah. Don't ask, don't tell. Okay. Yeah. You wanna do some cannabis. Sure. Go ahead. You know, do whatever makes you feel good." But then once they started to see the result in these children, then they perked up, then they became really interested.

So, you know, you can see the trajectory of, like, one of the oncologists in the film who's treating one of the children. And, you know, he was pretty dubious or didn't know much about it. And then at the end of the film, you know, he basically ends up telling them that, you know, he had learned so much and now using this for other patients. And he's joined the board of cannabis collective. So I think it's really a lot of times the physicians who really see things firsthand with their patient. But unfortunately, I think within the medical know, there's been some movement with epilepsy. I think there's definitely been, you know, more action in the pediatric neurology community. But in general, you know, I would say they kind of range from being open but not really that interested.

Matthew: Okay. Ricki, you partnered with Abby on another documentary called "The Business of Being Born." What parallels did you notice between the business aspect of the birth industry and the business aspect of the cancer industry?

Ricki: I mean, it's know, it's such a hard thing to navigate. You know, this is about choice. This is about the information, you know, being available to these families. It's the same kind of issue I think, you know, the parallels that came up both with when, you know, women try to fight to have the birth that they want and to be respected. And I think, you know, these parents try to navigate all the issues that come up with using, you know, this, alternative medicine, which shouldn't be alternative at all.

Matthew: Okay. Abby, in the film...I wanna circle back to the doctor thing and the medical industry because I'm curious. How much of the doctors...You know, they're not totally open to cannabis. But how much of that do you think it's from their colleagues and kind of the medical associations and the peer pressure that kind of pushes them into this acceptable window of what's considered normal treatment?

Abby: I mean, look, I think cannabis has a really deep stigma and taboo. And I think most doctors don't wanna be affiliated with it. You know, they don't wanna have that reputation. It kind of lessens their stature to be like, "Oh, I work with cannabis." At the moment, you know, it's sort of like, "You know, I work with naturopathic herb." I mean, the same way that, you know, medicine just is not integrated enough with, you know, naturopathic methods is kind of same thing with those. Look, I mean, I do think it's changing. I do think science is changing. I mean, I think there are more studies being done. But I mean, I think doctors are used to looking at studies that are done a certain way and cost millions of dollars and are funded by pharmaceutical companies and go through clinical trials and they get very specific information on how to dose and what the side effects are. You give, you know, five milligrams for this and cannabis is not that medicine, you know, yet. Cannabis right now, it functions much more as a botanical and it works differently on everybody's endocannabinoid system. And there's a lot of experimentation needed to find the right dose and the right strain. And I think all of that is just really like [inaudible [00:10:00] for traditionally trained physicians.

Matthew: Yeah. Ricki, in the documentary, we go through conversations with researchers in both Spain and Israel. One of the researchers, Dr. Christina Sanchez, we actually had on the show a few years back. But can you talk about what they're doing in other countries versus what's happening in the U.S. and, you know, how you see the contrast there?

Ricki: It's, you know, federally illegal here, as I said. And so they're unable to do the research. You know, the research they're doing is basically studies that show that cannabis is bad, you know. And, you know, places like Israel where they're free to test, they're able know, Deddy Mary [SP] is the scientist that we follow who's doing incredible work. And, in fact, you know, we've shot with him I think over three years ago. And the advances he's made since we filmed with him, he said is like night and day. But they're able to pinpoint the different strain of the plants that work for the specific type of cancer. You know, then we showed it in the film a little bit. But it's really exciting that they're able to really be that specific with narrowing down what works for each type of cancer. You know, obviously places like Canada where it's now legal both recreational and medicinally, they're now gonna be able to do more of the testing and research, which we really need. So hopefully, the U.S. will follow these countries. They don't wanna look bad, I don't think. So I'm hoping that the U.S. is gonna do something about the scheduling so that we can actually get in the game of the science of this plant.

Matthew: Yeah, for sure. It seems like Israel's really leading the pack with a lot of the technological discoveries there. It doesn't seem like there's as much as a stigma going on over there. Abby, the movie shows cannabis and chemo being used together in concert, not one or the other. Can you talk a little bit about the decision there by families to use them together as opposed to one or the other?

Abby: Sure. Why? I mean, I think a lot of the studies that have been done are mostly studies that show the use of cannabis with chemotherapy. And I think that, you know, there seems to be a synergistic effect in some cases, which isn't clearly understood, but there have been some theories around it. You know, for us, I mean, we were definitely looking for families in the film who were following traditional cancer treatments. And we did not wanna follow any families who were kind of going rogue or, you know, turning down allopathic medicine, you know, just to do cannabis. Like that wasn't the kind of film we were making. Although there is one character, one family in the film where they actually do stop the chemo and just do the cannabis. But that was basically because they didn't think their child was gonna survive the chemo. And so they have, you know, the doctor's permission to stop. You know, one thing is the choice. Like we were only looking for families that were doing that. But I also think that, you know, in the research, that is really how the research is being conducted in, you know, a chemotherapy agent in combination with cannabis.

Matthew: It also helps the nausea quite a bit too, in appetite. So there's kind of synergistic benefits there.

Abby: Yeah. I mean, there's all the palliative benefits, exactly. That's what I think most doctors are familiar with and even most people. They're like, "Oh, yeah, you know, cannabis for cancer because it helps you with the side-effects from chemo." But they don't really understand the anti-cancer agents and the anti-tumoral properties of the cannabinoids. And that's what we, you know, try to illustrate in the film and give back up for that.

Matthew: Okay. Ricki, as you step back and take a 10,000 foot view of what you want the takeaways to be here for the audience that watches this documentary, what do you want those to be and how can people talk with their families, doctors and community in a way that kind of opens this up, you know, gently but gets the conversation moving forward?

Ricki: My hope is that what happened with "The Business of Being Born" happens with this film. You know, it's about education. And I don't even think people really understand, you know, the smear campaign that took place both with home birth and with cannabis. So it really starts with, like, when your child is sick, when your loved one is suffering, you will do anything to find, you know, something to alleviate the pain and the suffering. So my hope is that this film is an educational tool that people will use to, you know, fight for their right to having access to anything that works to help their loved ones.

Matthew: Abby, I don't wanna give the impression that it's just have cannabis and your cancer goes away. Can you talk a little bit about Dr. Goldstein from the documentary and, you know, how she dives in and creates kind of a dosing schedule and a formal treatment plan and kind of follows up to make sure everything's going just right, because I think sometimes there is that perception like, "I just don't need to take more" or if there's not talk about dosaging and things like this.

Abby: Yeah. That's right. I mean, one of the researchers that Ricki mentioned, Deddy Mary in Israel. You know, one of the things that his lab is doing is isolating which strains or patterns of cannabinoids work on which cancers. So he would find in the lab that, you know, a certain strain would work for prostate cancer. But then they would put it in the test tube with the breast cancer cells and it wouldn't have any effect on the breast cancer. You know, the first thing is you need to have some guidance in doing this. And I think any cancer patient, pediatric, you know, or adult if possible, you know, you really need to have some physician guidance in this. And so, Dr. Goldstein, who is a pediatrician by training who's now practicing solely cannabis medicine, she's featured in the film, she treats a lot of the children. She has a protocol and she has kind of the best thing that we can really hope to have right now, which is patient experience.

And you see that with Mara Gordon of Aunt Zelda's in the film as well who's not a physician but also has a lot of patient experience. You know, that's really all we have right now is to kind of look at what other people are doing, what's working for other patients, you know. So I think Dr. Goldstein draws a lot of her protocols from the science that she's constantly reading but also from her own patients and what she's seeing work for other people. But you know, there's definitely a lot of nuance to this. And it's not just THC and CBD anymore. There's a lot of other cannabinoids in the plant. It's really important to understand how to take this medicine in a way that it can be tolerated.

Children actually have developing endocannabinoid systems. So they actually have much better tolerance for cannabis, which is unusual, than adults do. So sometimes children are actually able to take pretty high amounts where with an adult, you know, you just might feel too high to function. So that's one of the challenges right now with the medicine is, you know, finding different preparations that really mitigate that high because, for the most part, you know, nobody wants to feel that. Nobody is, you know, taking this recreationally or to have the psychoactive effect. People are taking this to fight their cancer. It is hard right now to find those practitioners. There aren't that many, but most of them are in our film, so it's a good place to start.

Matthew: Okay. Ricki, you and Abby have focused on the birth industrial complex now letting go of the stigma around cannabis. Are there any other areas of our daily life that you think, "Hey, we accept something that's really not optimal or even destructive"? Is there anything else that you wanna focus on next that you think is kind of the same opportunity?

Rick: Well, I'm glad you mentioned it, Matt. We have our new film that's coming up really in the next few months. It's about hormonal birth control. So, yes. I mean, it just feels like a natural progression from birth to birth control. Yeah. I mean, there's a lot of, you know, things that...issues that are important to us that we wanna explore. You know, it's about being curious and asking questions. Yeah. I think, you know, the pill and all these other drugs that are given to women for reasons outside know, in many times outside of controlling our reproduction need to be really questioned. And you know, are they good for us? Are they not? You know, should there be other options available at this...You know, with all technology and all the advances we're making in medical science, you know, why are we still using our grandmother's birth control? Yeah. That's our next topic at hand.

Matthew: Oh, okay, great. Great. I didn't know you had one right in your back pocket there. Great. Okay. So I like to ask a few personal development questions to help listeners get a better sense of who you are. With that, Abby, is there a book that's had a big impact on your life or way of thinking that you'd like to share?

Abby: You know, I don't really think there's so much a book, but I think there's a play. And I actually come to documentaries from, like, pretty long history in directing theater. And that's actually how I met Ricki. I was directing her in an off-Broadway production of "The Vagina Monologues." So I would kind of maybe go to that play and that experience of doing that play because I think what that play accomplished was really giving women a voice around subjects that have been completely silent and repressed forever. You know, I think the experience of like know, really I think the humor and the bravery of that play and seeing hundreds of actresses be able to, you know, really, like, free themselves on some level just by performing it was really profound. So I think that going forward, you know, it really showed me, like, how movements can be created, you know, and how art can transform, not only people on a personal level but how art can really transform consciousness. And I think it's one of the only things that can.

Matthew: That's great.

Ricki: That is great, Abby. That's a good answer.

Matthew: So, Ricki, speaking of transforming consciousness, can you tell us about your experience with using ayahuasca medicinally for self-reflection and what those experience have been like for you?

Ricki: I mean, it's major. I mean, it's major. Again, I have to thank my beloved husband who passed away, Christian Evans, for bringing me on that path. I was so closed-minded. If you had talked to me back when I was hosting my show, you would think I was this open-minded person, but I was so judgmental about drugs and plant medicine and psychedelics. You know, I've come a long way. You know, I found incredible benefit from my ayahuasca experiences. I've done it about, I think 11 or 12 times over a period of about five years.

Matthew: Wow, you go deep, Ricki. That's a lot.

Ricki: There's a lot more to me than people think. I mean, it's hard to sum up in, like, a soundbite. But basically, what they say is you do 10 years of therapy in one night of drinking ayahuasca. And it's not for the faint of heart. It's really, like, it takes a warrior to really go there. But I found it to be incredibly beneficial for my mental health, for my dealing with past trauma. It's a powerful medicine.

Matthew: And then, you know, weeks later you say you have trauma come up, you kind of work through it. And then weeks later, does it feel lighter then?

Ricki: Oh, you feel lighter...for me. I can only speak for myself. But I felt lighter after every ayahuasca experience. It's a hard journey to go...I mean, you go through the dark to get to the light, but yeah and then it percolates. You know, just stays in your system and you integrate, you know, the messages you get or...I've had visuals. I've had voices. I've had stuff be super abstract. I've had it be super clear. It's different every time. And they say that Mother Ayahuasca gives you only what you need.

Matthew: Yeah. Well, before we close, I wanna let the listeners know how they can get a discount on this documentary, "Weed the People." And it's riveting. I watched the whole thing. And it will make you cry, just a disclosure there. You can get a discount on this documentary at for "Weed the People." That's Abby and Ricki, thanks so much for coming on the show and educating us and thanks so much for doing this. I mean, this is really profound documentary. It took a long time to make and a lot of effort and a lot of persistence. So, thank you so much for doing this, putting it out there. I've already forwarded it to my parents, you know, trying to melt some resistance in that department. I think it's just a great thing to watch and a great talking point for people that have resistance areas in their lives. They can use this as a tool.

Abby: It's our pleasure. Thank you for taking your time.

Ricki: Thank you so much, Matt.

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. Promotional consideration may be provided by select guests, advertisers, or companies featured in "CannaInsider."

Lastly, the host or guests on "CannaInsider" may or may not invest in the companies or entrepreneurs profiled on the show. Please consult your licensed financial adviser before making any investment decisions. Final disclosure to see if you're still paying attention. This little whistle jingle you're listing 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.

Creating The First Cannabis Wine That Actually Tastes Good

chip forsythe rebel coast

We knew it wouldn’t be long before the cannabis industry started taking market share from the wine and spirits industry, and here to showcase that trend is Chip Forsythe, CEO of Rebel Coast Winery.

Founded in 2013, this California winery is making a major splash with its alcohol-removed, THC-infused wine – a beverage that offers a very different kind of buzz (and skips the hangover).

In this episode, Chip shares a behind-the-scenes look at the meticulous process involved in creating cannabis wine, Rebel Coast’s plans for the future, and his insights on where the cannabis beverage market is headed in the next few years.

Learn more at

Key Takeaways:

  • Chip’s background in wine and what led him to start Rebel Coast Winery
  • How Rebel Coast’s cannabis wine compares to traditional wine in terms of taste, aroma, and calorie count
  • The difficult process behind infusing wine with cannabis and how long it took Chip and his team to get it right
  • Regulatory and logistical hoops Chip still has to jump through in order to keep Rebel Coast alive and kicking
  • Difficulties in scaling the production of cannabis-infused wine and the ways in which Rebel Coast has worked to overcome them
  • Chip’s work educating regulators and politicians so that the cannabis industry can continue to grow and become more diverse
  • What’s on tap next for Rebel Coast Winery and where Chip sees the cannabis beverage market going over the next 3-5 years


Read Full Transcript

Matthew: Hi, I'm Matthew Kind. Every Monday I 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 Now here's your program. We knew it wouldn't be long before the cannabis industry started to take market share from the traditional wine and spirits industry. Today we have a perfect example showing how that trend is accelerating.

I'm pleased to welcome Chip Forsythe from Rebel Coast to discuss his cannabis wine. Chip, Welcome to Canna Insider.

Chip: Thank you so much for having me, Matt.

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

Chip: I am in sunny Los Angeles right now.

Matthew: Great. And I'm in Orlando, Florida. Chip, what is Rebel Coast at a high level?

Chip: Yes. So Rebel Coast started out as a traditional winery, making wines with alcohol in it. And we transitioned about two years ago into making cannabis-infused alcohol removed wines.

Matthew: Okay. I wanna dig more into that. But first, tell us a little bit about your background and journey and how you got to this point with Rebel Coast.

Chip: Yes. So I started off, I moved out to California from Texas when I was in, I just graduated high school to go to college out here at Cal Poly. And the first day, first week of school I found out you could get a degree in winemaking.

So, I went that direction and got an internship apprenticing under a couple of different winemakers while I was studying there. Studied winemaking for the five years that I was going to school there. And then, while I was doing that, me and my buddies would make wine in trash cans in our backyard and sell it to kids in the dorms because we had no money. It was awesome.

Matthew: Did it taste okay or...?

Chip: Not really. I mean, we reinforced it with brandy and sugar. And we were just doing anything to get the effect of it, I think. And then, when I graduated I started a winery called "Sexual Chocolate." And what we would do is we'd buy wine on the bulk market, blend it, bottle it and then rent the equipment we need to get it into the bottle, and then go out and sell it.

I started that in 2009, we grew pretty quickly. In 2012, I always....I did not get along with my co-founders very well so I ended up selling the winery, traveling, kind of like what you're doing right now, traveled the world for a year, and then came back to United States in California and decided to start Rebel Coast Winery, same guts of it. It's called a virtual winery where you buy on the bulk market, blend, bottle and sell. We'd made one wine called "Reckless Love." That took off again.

And about two years ago, 2017, we decided to, we saw a prohibition for cannabis coming to an end. So we decided to see what would happen if we removed the alcohol from wine and infused it with cannabis.

Matthew: So, Chip, how does that work exactly with making cannabis wine? Is there alcohol in there, removed, what do you do exactly?

Chip: Yes. So alcohol is a federally granted license to make and sell alcohol. And cannabis is still federally illegal. So it's completely illegal to have alcohol and cannabis in the same building or even in the same product.

So, when we found out that that was where everything was going back in 2017, we decided to see what would happen if we removed the alcohol and if the wine would still retain its flavor compounds, and it would still taste like wine and then infuse it with fast acting THC. And it turned out it was really hard to do and took a lot of time but turned out great now.

Matthew: Just circling back to your "Sexual Chocolate," a great name. So you were essentially like buying, you were kind of like a brokering wine and then bottling it yourself with your own label. And really, you're kind of targeting people that are trying to make a statement for the evening that are buying that wine, is that it?

Chip: Exactly. Yes. The fancy word for it in the industry's a negotiant. It was too hard to get a loan or raise money right out of college for $5 million to build a brick and mortar winery with the equipment pumps, land and actual building. But I knew I wanted to make wine. So, the virtual winery was the direction I took.

Matthew: Okay, it's funny how in the wine world, everything just sounds just a little bit more sophisticated.

Chip: Yeah, absolutely is.

Matthew: Okay. Do you think sometimes that's unnecessarily so, like, we really don't need to call it that but...?

Chip: Every day. Absolutely every day.

Matthew: Okay. So, man, that's great. You're in college and you're like, "Hey, I could major in some boring, bland middle-market management major or winemaking sounds like the road less traveled," that sounds interesting. And you probably haven't been disappointed by choosing that as your major, I imagine.

Chip: No, I love it. But my parents at first, like, when I told my parents I was gonna be a winemaker, they're from Texas and my mom cried and my dad laughed. He's like, "That's not a real job." I was like, "All right. Well, let me try. Let me see what happens."

And I planted my first vineyard my sophomore year, and they came out and looked at it. And then they were like, "Wow, this is actually real," and they've been insanely, insanely supportive ever since. The cannabis, they're still a little apprehensive about that side of the direction of my life.

Matthew: Yeah, I'd imagine.

Chip: But they still support it.

Matthew: So they're apprehensive about the winemaking, so the cannabis wine is like, "What is he doing? He's combining every element into..."

Chip: Don't go to jail.

Matthew: Okay. So, take us back to when you really had the thought of like, "Wait, cannabis wine," and then it went from a thought to an actual business. Can you just describe what you were thinking back then?

Chip: Yeah. So, back in 2004, a lot of winemakers are, I guess, they're called enthusiasts now for cannabis. So, a lot of winemakers, they are a little bit rebellious or whatever. They'll make their own cannabis-infused wine. And it's pretty easy the old school way of doing it. You take a pound of shake, throw it into a halfway fermented barrel of usually white wine or red wine will do it. And then five days later, you strain out the shake like tea leaves, and you've got alcohol. The alcohol extracts the THC, it also extracts a lot of chlorophyll and polyphenols and terpenes and stuff.

But the end result is you have cannabis-infused alcohol wine, and it's totally illegal. But it's just a little make 20 cases of it a year, give it to friends and family and yourself. So that was when I really got interested used to it. That kind of fell off the radar when I graduated college.

And then, it was 2017 I think mid-2017 we kind of sat down and looked around like, "Hey, the wine space is highly competitive. And there's a lot's a very price-conscious market." We're like, "Okay, I wanna start, I wanna do something with no competition, high-profit margins and try to be the first at it. So we saw cannabis prohibition coming to an end. And then we're like, "Okay, how do we make cannabis wine?" Let's take that...what does it tastes like if you take the alcohol out because most people have never had alcohol-removed wine because we tasted everything on the market, and it tasted like garbage, just seems like grape juice, bad grape juice, whatever. And so, we really started down the road of trying...I'm a pretty good wine maker. So I was like, "Well, I can make this taste better."

So then we went down the road of what it would take to make alcohol-removed wine taste like actual wine. That was kind of the "aha" moment when we tried our first R&D project. And it was like, "Oh, wait. We may be onto something. This actually does taste like wine now."

Matthew: What are some of the mechanics of that? How do you make that work? I'm sure there's a lot of struggles and difficulties there.

Chip: Oh, yeah. Are you talking about infusing it with THC or just...

Matthew: I'm talking about just making it taste good.

Chip: It's really hard. You really have to have a good palate. And it takes a lot of blending of acid and sugar levels. And then, it's not technically terpenes, but terpenes are just like essential oils or whatever. But the grape has a lot of flavor compounds, polyphenols in the wine. So you have to have to really start with good wine. And then you have to have a really good partner to remove the alcohol, is the overarching idea behind it.

Matthew: And how tricky is that removing the alcohol once you get to mass scale?

Chip: So hard. It is absolutely really...Bringing it down in the wine industry, there's a law where if your wine is over 14% alcohol, you're taxed as a liquor, so you don't ever wanna go over 14% alcohol. But if you pick your grapes too late, they have too much sugar in them, the yeast eats the sugar, turns it into alcohol. And if you have too much sugar, it'll make too much alcohol. So it's pretty traditional for wineries if they have too much alcohol to remove a couple of percent points so you get down to the 12 or 13% alcohol thing. So there's companies out there that do remove alcohol. But bringing a full wine down to zero, I mean, I pretty sure we were the first to try that as well.

Matthew: Do you go around to friends and family and be like, get to a point where you think it tastes good. And then you give it to them and say, "What do you think of this?" Is that what you do?

Chip: Every person I can find. Yeah. And at first too, when we first started, I went off the assumption that cannabis wine should taste or should smell like cannabis and taste like wine.

So we got really heavy into terpene extraction, doing steam extraction, and using hydrosol to reintroduce it into the wine. And it tasted, or it smelled great. It smelled like you just walked into a room that had just been cut down, smelled like really, really good bud. Spent months doing R&D on that, made samples, gave it to about 1,000 people. We did case studies and used surveys and stuff like that. And every single person we gave it to was really disgusted by it. They did not want it to smell or taste like cannabis at all. They made the manufacturing process easier. But we spent a couple, too many months going down that rabbit hole.

Matthew: Well, that's good to find it out before you go into mass production, though.

Chip: Oh my gosh, yeah. I would be really sad if nobody bought what we made yet.

Matthew: So how does the calories work then? If you're removing the alcohol from the wine, what does that do to the calorie count per glass?

Chip: Oh, yes. So it almost, it cuts it way down. So, a traditional glass of white wine is about 150 calories. And once you remove the alcohol and even with the THC in it, I guess the THC doesn't have too many calories, but ours comes out to about 40 calories a glass right now instead of 150. It's great.

Matthew: Wow, that's massive. So you can call it healthy cannabis wine or like, light.

Chip: Yeah, and it's gluten and vegan. But in all fairness, all wines are gluten free and vegan.

Matthew: Right. Why not highlight the benefits.

Chip: Yeah, go for it.

Matthew: Was there a time when you were going through this process of dialing it in, and you're getting negative feedback and you have a bit of a dark night of a soul and wondering, "Hey, is this gonna be a viable business? Am I a little bit crazy? Maybe there's a reason why there's no cannabis wine?" And did you struggle with that? And how did you overcome that?

Chip: Yes. So, I want to say that we've got a calendar reminder every two or three months where there's a company ending-decision that needs to be made or not made. So, there's been plenty of those rough nights.

From the very beginning, I knew that one of the things that I knew I needed when I was starting the traditional wine side of Rebel Coast was a good CFO. So that in 2017, met Josh, he's my co-founder, best friend. Having someone that's down for the cause with you every step of the way, not always encouraging. But we work together and we disagree on things and work, figure out the best way to move forward. That's been absolutely essential for this company. But yeah, every couple of months, the California government passes a company-ending law or potentially company-ending law. It's gnarly.

Matthew: Now, we've talked about some of the difficulties in making the wine and all the negative feedback you got initially and getting it just right. But then, just in terms of scale, like producing thousands of bottles, what are the kind of particular problems there?

Chip: So, our biggest problem was finding a facility large enough, a cannabis-licensed facility large enough to store our tanks. So, even though we were still pre-revenue right now. We've only been really selling for about three weeks in all of 2018, but we know that this is something special, and people are incredibly curious about it. And everyone wants to try it at least or is curious about it.

So the way we built the winery for the cannabis side of things is, you know those tanker trucks that go down the road that carry gas, like, the big stainless steel ones?

Matthew: Mm-hmm.

Chip: So those also carry wine, you know, they're food grade or whatever. But that's 6500 gallons, so we wanted to be able to buy wine, or buy from our buddies that make it, buy the wine in tanker truck loads, get it to our facility, or get the alcohol removed in tanker truck loads, get it to our facility and bottle tanker truck loads it.

So we bought these huge tanks, these 6500 gallon tanks, they're 15 feet tall, and they don't fit in most buildings. So that was the main, the first thing, is finding a facility, cannabis facility large enough to put them in. And then we had to get a bottling line which is kind of expensive. They're a couple hundred grand sometimes.

So we got a bottling line to do that. And just scaling up everything is...just the scale of what we're doing's the largest operation for a cannabis drink in, I don't know everyone's, but definitely, the largest in California.

Matthew: And so the reception has been good. It's're right. People hear about that, and they're curious I would imagine. That's the first reaction. Like, "What does that taste like?" Is that the first question?

Chip: Yeah. Usually, it's what we...what we found is mainly people are asking how strong is it? Because it turns out a lot of people have had at least one terrible experience with a too strong of an edible. And a lot of the cannabis drinks out on the market are 100 milligrams for a 12-ounce serving. So everybody asked like, "How strong is it? What does it taste like?"

And we kind of dosed it exactly like a glass of wine where you can always drink more, but you definitely feel it. You don't get drunk off of one glass of wine, but you may catch a buzz. But if you drink two or three glasses, you'll get drunk.

And that's the approach we took for our wine. We don't wanna...this is not a conveyor mechanism for T...not only a conveyor mechanism for THC, but it definitely works. It's definitely there. But it tastes and smells like wine. And it's dosed just about a little bit stronger than a glass of wine but right around there.

Matthew: Okay. And how do you educate bud tenders and people in the industry on what they should know about this? Because there's, you know, there's kind of a flood of products. This is obviously unique. So there's interest, but how do you approach them and talk with them?

Chip: Oh, yeah. So, customer-education, we're spending a ton of time, effort and money on because like you were saying, nobody's ever had weed wine before.

So, every time a dispensary orders a case or I think our minimum is three cases of wine. Every time a dispensary orders for their first time, we have a team of brand ambassadors all over California. And they're just waiting to get a date and a time and then they do a customer appreciation day for that dispensary.

And our real goal for the customer appreciation day, someone shows up, someone on our team comes into the dispensary, pours our non-infused, non-THC wine so people can taste it and see what it tastes and smells like.

But the real goal isn't to educate the 300 or 500 people that come in the door that day. The real goal for them to be there is educate the bud tenders. Because those guys, they're there every day. And we're gonna do about 500 or 600 customer appreciation days in 2019 just in California.

Matthew: Oh, wow. That's smart.

Chip: It's...

Matthew: Yeah.

Chip: Yeah. And it's the only way to, I mean, we try and say as much as we can about that the product on the wine label, but it's really the only way to get out there.

Matthew: And so the non-THC version, how close does that taste to the THC version?

Chip: I'm super proud of it, really, really close. We were astonished. It was kind of an afterthought when we were bottling. I mean, we planned to do it, but we didn't have any high hopes for it.

And then we bottled it and tasted it. And holy cow, it tastes good. People, I mean, apparently just drink it just because it tastes good, even though doesn't have any alcohol or THC in it.

Matthew: Yeah. This is a perfect example of creating a new market category. Because why compete in the insanely competitive wine industry where the margins are tough. It's huge, huge capital requirements when you can create this new segment and be top of mind. So that's a great way to do it.

Chip: Yeah, we're...the future is very bright, that's how we see it.

Matthew: So you're in a difficult regulatory environment in California. What's it like working with regulators and politicians? And, are they understanding of how their laws and regulations have a cascading effect? Or do they seem, like, totally oblivious to that? And what's that process like working with them bringing this product to market?

Chip: Yeah, so the laws come out in you...when the laws are published, and they seriously come out, and they were coming out every three to four months, something would be written in stone, and then it would be rewritten and completely contradictory all through 2018. I think, actually, there's gonna be a lot of...I predict there's gonna be a lot of companies that end up going under because they spent all their cash trying to follow these laws with legal fees and packaging, repackaging, repackaging, repackaging expenses. I've already had a couple of friends, cannabis companies go under because they just run out of cash. They didn't, they couldn't get to market, their product out there and it had to come back. And it's gonna's a really hard thing to do.

But the regulatory bodies are not malicious in my opinion of them. They're not malicious. They just don't have any clue what the laws that they write, what they do to the companies trying to follow them. They wrote a law that said, "You can't use the word wine in your product." And this is targeted directly at us because there's no one else doing it. But the thing is, is we make alcohol-removed wine, and we say that on the label because that's what it is. And they were like, "Dude, you can't even use the word wine, even though you're saying, we say, like, five times that there's no alcohol in it, it's completely removed. This is what the product is. So we've had to re-label our products at least a half dozen, or not to half dozen. Yeah, maybe like...I think we're on number five right now, for relabeling. It's hard. It's really hard.

Matthew: Yeah. They're probably protective of that word up in Northern California I imagine.

Chip: It's not even that, they just don't want to mislead the consumer. And they just did a blanket statement, "Don't say wine, beer, spirits, or you can't use ale, you can't use margarita, you can't use..." And they just did a blanket statement, said, "Don't use those words no matter what."

And then we came to them and we're like, "Hey, we say it's alcohol-removed, non-alcoholic wine or whatever." And they were like, "No, still, that doesn't happen."

So then we had to hire a lobbyist, and help get this law changed because now we're just a cannabis beverage, is what it's called. But that's not what we are. We make wine and then remove the alcohol. It's been tough, man. It's really tough.

Matthew: Yeah. That is tough. And you can have a whole business set up and then, with a stroke of a pen, it's like, nope. That's frustrating. I've seen it.

Chip: Yeah, they got rid of ice cream. I didn't know it was a big thing. But they said no cannabis-infused ice cream. And that put a couple of companies under.

Matthew: Can you say cannabis-infused creamed ice?

Chip: Yes. I don't know. It's because you can't use dairy, it has to do with the shelf stability and refrigeration and stuff like that. Like, so no dairy products.

Matthew: This is such an interesting space. Where do you think the wine and spirits markets' going in the next three to five years? And where's it dovetail with the cannabis beverage market?

Chip: I mean, that question I've been asked a lot in front of large audiences. I don't think, and this is just my opinion. But I don't think the cannabis space is gonna truly cannibalize.

If we make this cannabis-infused wine and it takes off and we sell millions of cases of it, I don't necessarily think that that's gonna cannibalize the wine industry. Because my opinion is, people have their vices already.

If you're over 21, you've tried both, you picked one, you kind of go with it, you know, one or the other, usually. And the first joint wasn't smoked in California in January of 2018. The industry has been around for 20, 30 years, however long you wanna call it, and it hasn't...they've co-existed up until that point. That being said, now that there's more products and stuff available, and you don't have to go to a drug dealer to get anything, it's...the access is there. I don't know. I guess that's the billion-dollar question if you've got the crystal ball.

Matthew: I guess you just create it, is what the answer is. I don't know. I know as I create it.

Chip: Yeah, exactly. I can tell you people are insanely curious about cannabis-infused wine. Everyone's like, "Where can I buy it? Where can I buy it?" So it's awesome.

Matthew: Now let's talk a little bit about patents and intellectual property. What do you see happening there in the cannabis space and with drinks?

Chip: So when we were making this to make to...THC is an oil, and all drinks without alcohol are basically juice, like water. Oil and water don't mix. So to make the THC liquid soluble, so it does mix into the water, there's three ways that I know how to do it. Everyone's inventing new stuff all the time. So, I hope there's still three by the time this goes live. You can either nano-emulsify it, which you just shake up the T molecule with an ultrasonic rod and make the little oil globs really small. You can do a lipid-soluble THC, where you attach it to a lipid molecule, the oil to a lipid molecule or you can do a hydrophobic hydrophilic surfactant. And that's the way we went. Basically, the THC behaves like it's water soluble, even though it's not truly technically water soluble, but it goes into the product and stays in suspension indefinitely.

A lot of people are having problems with getting their THC to stay in suspension when they use nano-emulsification because it'll form a ring at the top. I don't know. It's a complicated thing. But Canopy acquired a company out of Colorado called Abu, and we've...we were using Abu's, we were licensing Abu's technology for the water-soluble surfactant.

When that, when they got acquired, Canopy at the time could not invest in U.S. plan touching companies. So they had to cancel all their THC contracts and licensing deals with all the companies that they were licensing it to except for us.

We took it as a signal that they liked what we're doing and want us to grow and keep blazing the trail creating this category. So, we've got the patent granted to us for liquid soluble technology for seven states for 10 years here in California in the United States.

Matthew: Oh great.

Chip: Yeah. I'm sorry. I kind of rambled off for a second.

Matthew: Good job, good job. Well done.

Chip: Yeah, I guess it...Yeah. And then back in November of 2017, we did have this idea and we're like, "Wait, how has nobody ever done this?" So we hired a patent lawyer. They did a search and they were like, "Hey, honestly, nobody's ever done this. It's not in the office." We're like, "Okay, cool. Let's write the patent for this." So then we had talked about it because this is gonna be published publicly by now. But what we did is, we wrote a patent. And the invention isn't removing alcohol from wine and the invention isn't making THC liquid soluble, the invention is putting the two together.

So anybody who makes beer or wine, removes alcohol from it and infuses it with any cannabinoid, THC, CBD, CBG, whatever, is going to...and if we get the patent granted, will end up having to license that technology from us. And we don't know if it'll get granted. Patents are a very tricky thing in the cannabis space. But if it does, it could be a game changer for us.

Matthew: Wow. Very interesting. There's so many dimensions to this. You have to wear a lot of hats and really be convinced that you're doing the right thing to really move the ball down the field.

Chip: Relentless is the right word for it. And sometimes you go down the wrong rabbit hole, but having a good team helps you come out the other end.

Matthew: You were a college, or high school wrestler, was it?

Chip: Yeah. I was one of the best in Texas.

Matthew: Wow, that's saying something. So you're wrestling this pole, whole, all these problems to the ground?

Chip: Yeah, hopefully. I think we're very, very, very close to just really rocking and rolling with this thing. But there's no guarantees in the cannabis space. Every time I give a guarantee, like over the last year, I'm like, "I don't know." I mean, it's always like, I'm 99% sure that this is gonna happen because there's so many curve balls being thrown at this. I mean, a startup is hard enough on its own, but a startup in a regulatorily uncertain environment is even harder.

Matthew: Yes, I agree with that. And where are you in the capital-raising process?

Chip: Yes, so we raised a seed round. And we've pretty much exhausted that. We've got, we just started our Series A about two weeks ago. So we've met with...and because of the product in the first to market, people, every VC, large or small pick up the phone when we call or calls us back.

So we're headed up to Canada next week to be in Toronto for a week and then New York for a week to talk to all the large LPs up there in Canada in the publicly traded companies.

But VCs, just like consumers are incredibly excited. They all want in. "All right, cool, it's a good idea. Let's taste it. Does it taste like wine? Does it smell like wine?" And so far, we've gotten really, really good, really good feedback from everybody. So we're hoping to have a couple of term sheets here by the 19th of April.

Matthew: And for accredited investors that are interested in just learning more about that, can they go to your website and fill out a contact form or anything or is that...?

Chip: Yeah. We actually... it's just, it's, And then there's a Contact Us page. And we've actually had three or four potential investors inquired, just cold-calling us through the website. We follow up with everybody.

Matthew: They're coming for you. They're coming for you, Chip. Finally.

Chip: We are in Los Angeles. But yeah, we get back to everybody, follow up. Because we're in this position, we definitely wanna...we're fortunate enough in this...This prettiest girl at the party thing won't last much longer. I mean, maybe in three or four more months before, I'm assuming, I can't believe nobody's tried to do this. We're a year into legalization in California, like the cannabis and wine capital of America and we're still the only ones doing it. So, I keep assuming someone else is gonna try it but it is incredibly hard to do it.

Matthew: That's what I was gonna say, you've...this whole podcast has been about huge Goliath-size problems. So you're like, "I can't believe no one's doing it." I can. I can totally believe it.

Chip: It sounds easy. Just get wine, remove the alcohol and infuse it with THC. That's the general thing. And I thought when we went, when we first launched, we'd have competition springing up left and right.

But no, but there's one company that said they made a rose, the world's first cannabis-infused rose, and it was just a bunch of liars doing a press release. They've never made it. They're not in market. They're not legal. They're not compliant. But that was our first potential competition. It was just a joke. So, I don't know, it's exciting.

Matthew: Well, Chip, I'd like to ask you a few personal development questions to help listeners get a better sense of who you are personally. But before I do that, is there anything you can tell us to help us, just make us a little bit smarter about wine in general? A lot of people think it's an esoteric subject. And you're so deep in this world. How can we sound a little bit more educated, and be a little bit more educated about wine so we can understand it better?

Chip: Oh, yeah. I guess, so everybody always asks like, when someone's smelling or tasting wine, they rattle off, like the flavors of whatever, that it reminds them of. And it's not that like, there's grapefruit or white peach or citrus used to make the wine, it's just the characteristics of the wine that reminds you of that. So, the best way to get better at tasting wine and being able to talk about it is find someone that loves wine and that does that, that's really good at talking about what they smell and taste in their wine, and then just have them talk to you about it. Like smell the glass of wine with them, have them rattle off what it sounds like, and then when they say what they're tasting and smelling, then for some reason, this always happens, but for some reason, you'll be able to pick up.

You'll be like, "Oh, no way. There is...I smell the grapefruit. Now, that's what that it." So, find a good tasting buddy. And wine's not that pretentious, it's just a delicious way to catch a buzz with someone.

Matthew: Have you you remember a time when someone used a word to describe the taste of wine that you thought was just so creative or off the wall that you couldn't believe it?

Chip: Yeah. It's usually to describe flaws in wine. There's a compound called VA and it smells like a wet Band-Aid or wet cardboard or wet dog. You don't want that characteristic.

But usually when someone's like, "Oh, I'm getting real, real nasty Band-Aid smell," we're like, "Oh no. Your winemaker's got his work cut out for him. Because to get rid of that, it takes some serious equipment."

Matthew: Oh, my gosh. Well, thanks for that. So back to the personal development questions. Is there a book that you've read that's had a big impact on your life for a way of thinking that you'd like to share?

Chip: Yeah. So, I thought about this one a lot because I've listened to almost every single one of your podcasts also. You're pretty incredible in helping me learn about the industry from years ago when information sharing wasn't really there. So thank you for that one.

Matthew: Sure.

Chip: I used to live in Australia. I used to study winemaking over there. And I spent a week fasting out in the bush and I read "The Alchemist" randomly.

And it was the perfect book at the perfect time. And that kind of just helped guide me throughout the next 10 years, 20 years of my life. Just like, if you put it out there, what you want into the universe, it usually provides it for you. Sounds a little hippie but whatever.

Matthew: No, that's...I found that to be totally true. I walked out of my corporate job 10 years ago, and it was really good job. And I was just like, "I'm doing this," and it's like the universe is, when you commit, the more you commit the universe just comes in and just provides for you right as each step seems like a cliff.

Chip: Yes, absolutely. And it's like, "Hey, this isn't gonna kill you, just it's gonna be really hard for the next couple of weeks. Yeah, it's good."

Matthew: If you could go back in time to when you were just starting this business again, what would you do differently?

Chip: Oh, that's one...that's a tough one. How far back in time, like five years?

Matthew: Sure.

Chip: I would have started back then. I wish I would have been able to see prohibition coming to an end when it did. I thought it was gonna take a couple of more years, so I thought I had more time to perfect a formula for the wine. But I would have started working on this day one in college. I was started studying this, figuring it out so that we could have already been in the market right now.

I'm always kicking myself like, "Oh, if I'd just done this a year ago or two years earlier, we would...all this would be out of our way and we would just be rocking and rolling, selling this stuff." So I would have started sooner.

Matthew: I realize, like, your marketing, you have clever marketing techniques in your illustrations and everything, and how you present yourself has done really well. And I realized that alcohol and the beverage, wine, and spirits industry, that's so important how the brand sits in the prospect's mind even more so than other types of businesses. Like I saw at, was it George Clooney that just sold that mezcal or the tequila.

Chip: Casamigos?

Matthew: Yeah. And I see how he positions that, with him driving, like, vintage motorcycles through the fields, like high deserts of Mexico and stuff like that. It's like, how do you want the prospect to think about this? So you have to really think deeply about that.

Chip: Yeah. Well, for the wine industry, I studied marketing, wine marketing in college. And the one thing I took away and implemented day one for "Sexual Chocolate" and on was, you've got to tell a story.

Because all wines, you know, if they are a California Wine, they're usually gonna be pretty good. The quality of the juice inside the bottle, and then you've got to tell a story on, about who you are, or whatever story you wanna tell on the label.

So for our "Reckless Love," I have a huge handlebar mustache. So I just put it on the bottle, and then wrote a story. And every year we write a story of where we are in our lives and why we're making this wine. And then we printed it with glow in the dark ink because it's one more thing you know, and we like glow in the dark ink. And then all of our cellphone numbers are on the corks just for fun, and it's just a way to engage with people on another level.

Like one of our wines, I make a white wine called "Sunday Fun Day" and we have a scratch and sniff pineapple on it.

Matthew: Someone just drank a bottle of wine and messaged you, Chip.

Chip: Yeah. I get text messages and calls 5 or 10 times a day now. I answer all of them if I can. I love talking to people about it.

Matthew: Yeah. Well, before we started recording, you had mentioned that you did a virtual reality simulation with HTC set. And every time I've heard about virtual reality or augmented reality in the past, it's like not quite ready yet, almost there. This is totally unrelated to cannabis wine. But what did you think about it?

Chip: I mean, I don't wanna use the word "life-changing" because I don't feel like I'm a different person. But I definitely have a different perspective on what reality is versus where it can go. Virtual reality is the...once it's indistinguishable from real reality, things are gonna get really wild, and it's getting close. It's getting really, really close. But it's awesome. It's cool.

Matthew: Oh my gosh. Oh my gosh. I got to give that a try. I tried...the last time I tried it, it was pretty good. And we were talking about this too, before the call, like, I'm worried that it's gonna be too good. So it's like, you don't're just like, "I wanna stay in this world and do all these crazy stuff."

Chip: And Elon Musk, as crazy as it sounds, he's got a pretty good theory that we could be living in a virtual reality world created by some other super being, and with unlimited computing power and unlimited energy. It's hard to conceptualize. But once you try virtual reality, and you're like, "Wait, if this felt, if this, 10 years from now indistinguishable from reality, it's gonna be pretty crazy."

Matthew: Yeah. It's like, well, how do we know this is real? Just because it's persistent. And it seems real, like, okay. We don't, that doesn't necessarily mean it is.

Chip: Yeah, that's a whole other rabbit hole.

Matthew: Right. You need at least one bottle of Rebel wine down before you go down that hole.

Chip: Honestly, if you've had a couple of glasses of our cannabis wine and then you play virtual reality, I played for eight hours straight, it was awesome. And I do not play video games. So it was awesome.

Matthew: Well, Chip, thanks so much for coming on the show today and educating us. This has really been an interesting subject. And congratulations to you for all the work it takes to do this, and all the persistence. I think having a background as a wrestler is really probably helpful because this is a lot of discipline, a lot of pain, and just a lot of feedback you're getting as you try to go through the process. But as we close, tell listeners your URL and the best way to find the wine and connect with you.

Chip: Yeah. Absolutely. So I mean, the one that's easiest to remember is just probably Google "cannabis wine." There's no one else doing it. So we'll always pop up. But our website's And what we're most active on and honestly, I kind of feel nerdy saying this but we're most active on is Instagram. So, our Instagram handle is rebelcoastwinery.

People listen to every word we write, everything we say out of curiosity. And we've got 15,000 people on Instagram that are actually genuinely enjoyed following what we're doing because we're very transparent with our ups and downs, and manufacturing, and our team, and our girlfriends, and having fun at the same time. So it's pretty exciting to watch what we're doing, apparently.

Matthew: Good. Well, I've got to check out your Instagram account now. All right, Chip, thanks so much for coming on the show. We appreciate it and good luck with everything in 2019.

Chip: Absolutely, thank you. And please, keep doing what you're doing. It's helped me out a lot. Just navigating the industry and seeing what everyone else is working on.

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