Latest / Higher Exchanges / Florida Cannabis: Who’s Winning and What Comes Next? Starring Emily Paxhia

Transcript

Florida Cannabis: Who’s Winning and What Comes Next? Starring Emily Paxhia · Higher Exchanges

• 0:01
  SPEAKER_00: Welcome back to Higher Expansion, the number one independent cannabis investing show, where we break down complex cannabis markets into clear insights.
• 0:13
  SPEAKER_00: Here are your host, Jesse Redman and World Impact.
• 0:21
  SPEAKER_02: Is that voice familiar?
• 0:23
  SPEAKER_04: I know that.
• 0:24
  SPEAKER_04: I like this.
• 0:28
  SPEAKER_01: Welcome back indeed.
• 0:30
  SPEAKER_01: I am Jesse Redman, Chief Strategy and Investor Relations Officer at Leaf Brands, and I am back with one half of the most powerful sibling duo in cannabis.
• 0:39
  SPEAKER_01: He's the grizzled vet, Morgan Paxia.
• 0:41
  SPEAKER_01: Morgan, what's up, man?
• 0:43
  SPEAKER_02: I'm back, baby.
• 0:44
  SPEAKER_02: Here we go.
• 0:45
  SPEAKER_02: Summer's over.
• 0:47
  SPEAKER_02: Back to business.
• 0:48
  SPEAKER_01: It is back to business.
• 0:49
  SPEAKER_01: It's after Labor Day.
• 0:50
  SPEAKER_01: There are no more excuses.
• 0:51
  SPEAKER_01: It is time to get shit done, and we are here to get shit done with somebody who does get shit done.
• 0:56
  SPEAKER_01: I probably shouldn't swear that much early in the podcast.
• 0:58
  SPEAKER_01: We're going to get strikes.
• 1:00
  SPEAKER_01: But she is the other half of that powerful sibling duo I was telling you about.
• 1:03
  SPEAKER_01: She is the wonderful and cheerful today, Emily Paxia.
• 1:06
  SPEAKER_01: Emily, how are you?
• 1:08
  SPEAKER_04: I'm fantastic.
• 1:09
  SPEAKER_04: Thanks for having me on, boys.
• 1:13
  SPEAKER_04: It is good to have you back.
• 1:14
  SPEAKER_04: I think it's been a little while, hasn't it?
• 1:16
  SPEAKER_04: It's been a it's been quite a while.
• 1:18
  SPEAKER_04: I've been a little bit heads down on a few things, but it's it's nice to be out here talking with y'all.
• 1:24
  SPEAKER_01: Heads down, I think of you as being a San Francisco person, but you've been uh, I don't even know if that's bi-coastal, but it's something like that.
• 1:30
  SPEAKER_01: You've been a California and a Florida woman.
• 1:34
  SPEAKER_01: Am I thinking about that right?
• 1:35
  SPEAKER_04: Yeah, that's right.
• 1:36
  SPEAKER_04: From one peninsula to another, diagonal coastal, maybe you could say.
• 1:40
  SPEAKER_04: Um, I've been spending a lot of time up and down the great state of Florida, which is a tremendous place as I've come to love, learn and love it.
• 1:48
  SPEAKER_01: So that's a sincere statement.
• 1:50
  SPEAKER_04: It's truly sincere.
• 1:51
  SPEAKER_04: I love Florida.
• 1:52
  SPEAKER_04: I have so much to say about it.
• 1:55
  SPEAKER_01: Well, cool.
• 1:55
  SPEAKER_01: We have so much to get into, but before we get into those details, Morgan, why don't you tell me about some software that you like?
• 2:02
  SPEAKER_02: Yeah.
• 2:05
  SPEAKER_02: Well, so FlowHub this week.
• 2:07
  SPEAKER_02: If you're a serious operator, you already know retail moves fast.
• 2:09
  SPEAKER_02: And FlowHub is the fastest growing technology platform in the space right now.
• 2:13
  SPEAKER_02: And it's not just point of sale, it's your inventory, payments, online order, compliance, and business intelligence.
• 2:19
  SPEAKER_02: Everything you need to run multiple locations at scale.
• 2:22
  SPEAKER_02: But what should catch your attention is what they're doing with AI.
• 2:25
  SPEAKER_02: Plenty of platforms will let AI read your data.
• 2:28
  SPEAKER_02: FlowHub's MCP connector lets ChatGPT or Cloud actually take action.
• 2:32
  SPEAKER_02: Tell it to build optimal deals or update inventory, and it does it without you even needing to log in.
• 2:38
  SPEAKER_02: There's been uh they've been at this since 2015 and they are profitable, which in this industry says something.
• 2:45
  SPEAKER_02: Nobody in cannabis is innovating like FlowHub.
• 2:47
  SPEAKER_02: If your current system is slowing you down or costing you money, go to FlowHub.com and book a demo.
• 2:54
  SPEAKER_02: So thank you to FlowHub and uh amen on that AI stuff.
• 2:58
  SPEAKER_02: We use it all the time.
• 2:59
  SPEAKER_02: I know I mentioned that last week, but I still love this uh text-to-AI or text to order AI product they've got.
• 3:05
  SPEAKER_02: So I'm looking forward to hearing more feedback from people.
• 3:08
  SPEAKER_02: But we're here today to talk about Florida and one of the largest and most unique cannabis markets in the country.
• 3:15
  SPEAKER_02: I think it's the largest medical, right?
• 3:18
  SPEAKER_02: But uh we'll find out more with uh Emily here.
• 3:20
  SPEAKER_02: So why don't you kind of kick it off?
• 3:23
  SPEAKER_02: And how do you think about Florida today?
• 3:25
  SPEAKER_02: How do you characterize Florida as a market today?
• 3:29
  SPEAKER_04: Yeah.
• 3:30
  SPEAKER_04: Um, Florida is interesting because it remains medical as it did not uh pass the adult use initiative in the last election cycle, which at the time felt devastating, but actually has proven to be really interesting as an operator in the state.
• 3:44
  SPEAKER_04: Uh what it's done is it's created a really interesting and competitive playing field that is limited by the program, which means that people have to have medical cards.
• 3:54
  SPEAKER_04: And I can even talk through all the logistics on that.
• 3:56
  SPEAKER_04: It's not the easiest thing to have a medical card, but it's not as hard as many people believe.
• 4:02
  SPEAKER_04: And with new uh response from the Supreme Court about um ownership of a gun license as well as uh participating with cannabis, there's um some changes that we're seeing there in the medical card ownership, which we're hopeful continue.
• 4:19
  SPEAKER_04: But uh it remains medical and it's really interesting because it competes almost like an adult use market in terms of some of the discount rates and the pricing of the products and the competitiveness of certain local markets as many doors have opened.
• 4:36
  SPEAKER_04: Um, I think it's something over like 40 doors have opened or relocated uh to be more competitive within 2020, within the last year.
• 4:45
  SPEAKER_04: So um it has become more uh competitive, and that's something that we're here for because we'd rather live in reality that this is a competitive industry and a place that we have to be instead of waiting for the day that adult use comes and then having to face what that competition could look like upon regulatory changes.
• 5:04
  SPEAKER_04: The other thing that's really interesting about that ballot initiative not passing is that with the change of medical marijuana or cannabis being designated as Schedule III, we were able to quickly spring into action and go for it with our DEA registration this year.
• 5:22
  SPEAKER_04: So it's interesting how it kind of cuts both ways to be adult you an adult use market, but now it's very clear for us as a medical market only that we were able to pursue that pathway as a Schedule Three company.
• 5:37
  SPEAKER_04: And what's even more beneficial is an interesting kind of symptom of this is that the preparedness to operate in the medical regulatory market of Florida was really helpful for us to invite the DEA to visit with us and to be extremely prepared and to get very positive feedback from the DEA about our operations in the in the state.
• 6:02
  SPEAKER_02: Do you think um that the ballot not passing, like was this inflection point sharpened by it not passing, where it transitioned into this much more competitive situation you're just describing?
• 6:14
  SPEAKER_02: Or was this already, you know, you know what I mean?
• 6:16
  SPEAKER_02: Like was it already kind of progressing that way and and that just maybe pulled it forward?
• 6:20
  SPEAKER_02: Or how do you how do you think about that?
• 6:22
  SPEAKER_02: Because it seemed like it was a pretty material change in the market from from my lens, but I'm just curious, you know, from on the ground, how that actually went.
• 6:32
  SPEAKER_04: Yeah.
• 6:32
  SPEAKER_04: So based on the headset data, I would say yes, it accelerated that level of competition.
• 6:37
  SPEAKER_04: And it's because of the typical thing that occurs leading into a ballot initiative around adult use where you see inventories building in the larger operators who have the capacity and the ability to do it because they're all preparing for the moment when that adult use market should open, and then they have to service that market and have product on the shelves.
• 6:56
  SPEAKER_04: And we know, for example, this happened in New Jersey.
• 6:59
  SPEAKER_04: It was a massive building of inventory for months and months and months before those doors opened and allowed for that inventory to flush through the system.
• 7:07
  SPEAKER_04: That's exacerbated in the state of Florida because it's a full vertical market, meaning you have to cultivate, manufacture, and sell everything through your vertical.
• 7:16
  SPEAKER_04: Wholesaling only occurs if something should happen in your business, and then you have to apply for a variance on a very specific product type and category with a partner to be able to purchase product from another operator.
• 7:30
  SPEAKER_04: So think about it this way: some of the bigger operators had been building inventory, preparing for that massive spigot to open of adult use.
• 7:39
  SPEAKER_04: They have to push it through their system.
• 7:42
  SPEAKER_04: And they had built the capacity, the capex had been spent, the capacity of the inventory has been invested in and it's building.
• 7:49
  SPEAKER_04: And in the state of Florida, I always say that the humidity is like another character in the play when you're growing cannabis in the state of Florida.
• 7:57
  SPEAKER_04: You know, California is very arid, very dry, very amenable to that.
• 8:02
  SPEAKER_04: But when you have a product in Florida, it's a race against humidity to protect it from the things that humidity can do to cannabis.
• 8:11
  SPEAKER_04: Um, the so I think there was that big build of inventory, and then it had to go through the system.
• 8:17
  SPEAKER_04: And and and frankly, CapEx was spent, so there's still a lot of inventory through these operators in the market.
• 8:24
  SPEAKER_04: So I know there are a couple of big operators that are very aggressively pursuing opening like 10 more stores in the state in, you know, as fast as humanly possible.
• 8:35
  SPEAKER_04: Um, I think that that remains a pressure point, but you could see that the uh discount rates went from the average was in the 30s, that very quickly it went to about 54% annualized or the last year.
• 8:49
  SPEAKER_04: This is per headset data, of course.
• 8:51
  SPEAKER_04: And um, the price per unit had also gone down to about$15 a unit.
• 8:56
  SPEAKER_04: At one point it taught it ticked down into 14, like 92 or something.
• 9:01
  SPEAKER_04: Um, but however, that has stabilized a little bit.
• 9:05
  SPEAKER_04: Uh the discount rate has stabilized since the beginning of this year.
• 9:08
  SPEAKER_04: And in fact, we've seen an uptick in some of the unit pricing in the market, which is welcomed.
• 9:13
  SPEAKER_04: Um, so so I think that there's a little bit of stabilizing going on, and maybe also just uh the patient-based determining kind of their preferences in the market and uh some different things that are developing as the market actually matures.
• 9:28
  unknown: Right.
• 9:29
  SPEAKER_02: And obviously price stabilizing certainly helps.
• 9:33
  SPEAKER_02: But um, like how are how's patient growth going in the state uh subsequently?
• 9:37
  SPEAKER_02: I'm just trying to understand like so, like what does Florida look like from a growth trajectory after going through that, you know, pretty significant and classic, like we've seen in every state pricing cycle.
• 9:48
  SPEAKER_04: So there's I my belief, and this is just my belief, that is that there's been a few contributing factors to the stalling essentially of the patient count.
• 9:58
  SPEAKER_04: It's been kind of stalled anywhere between 920 and 940,000 um over the last 18 months.
• 10:04
  SPEAKER_04: Um, it has recently, like last week, we saw another thousand patients entered into the registry, which was welcomed.
• 10:12
  SPEAKER_04: I I click on it every single week on the AMU and it kind of goes up and down, but it had stalled out for quite some time.
• 10:18
  SPEAKER_04: And I think there are a couple of factors.
• 10:20
  SPEAKER_04: One, we do know that card counts tend to stall when people think that there's an adult use measure that will get passed.
• 10:26
  SPEAKER_04: And people would rather not get entered into a registry where they're acknowledging that they consume cannabis because there is still a stigma around it.
• 10:35
  SPEAKER_04: There are other factors to it too, such as um we try to debunk the mythology around owning a medical card and what it exposes you to.
• 10:44
  SPEAKER_04: Um, so that's that's something we have to kind of undo because there are perceptions around that as well.
• 10:50
  SPEAKER_04: Um, the other thing I do think the gun ownership, there have been a lot of concerns around having a gun uh carry license and also having a medical card.
• 10:58
  SPEAKER_04: Uh, the doctors are starting to create more clarity around what that means, and I think that will alleviate some pressure.
• 11:05
  SPEAKER_04: Uh, there's a lot of folks in Florida who do like to have their carry license, and also we have a really strong veteran population, which also has a strong belief system around that, which we are very supportive of the veteran population in the state of Florida.
• 11:19
  SPEAKER_04: We do a lot with them.
• 11:20
  SPEAKER_04: But um, and and in general, I feel like the cannabis industry has been very attuned to the veteran population.
• 11:27
  SPEAKER_04: Like Morgan, you and I remember back in the early days in Canada, that was really one of the first um groups that got addressed by the medical market up there, which is really important.
• 11:38
  SPEAKER_04: Um, but uh back to the cards.
• 11:40
  SPEAKER_04: So I think the election did not help the card ownership.
• 11:44
  SPEAKER_04: I think then just these mythologies around ownership of the card.
• 11:48
  SPEAKER_04: And then I do think some of um the hemp stores that were open that made access to some of those products, whether or not they were um good products or not, is another comment to be left aside.
• 12:02
  SPEAKER_04: But people had access to cannabis through those hemp stores, and so I do think that um curbed some of it because they could access things that way.
• 12:12
  SPEAKER_04: Now the state has um closed that down and the Department of Ag owns that, and they are going after the stores that are remaining open, and some of them are getting closed down as we see, and some are just selling through inventory and and planning to close down because they don't want to deal with that.
• 12:29
  SPEAKER_04: But um, it's just I think there were a couple of factors at play there.
• 12:34
  SPEAKER_02: Yeah.
• 12:34
  SPEAKER_02: Yeah, we probably need to do a catch-up episode at some point this year before year end about this hemp stuff because it's really interesting.
• 12:41
  SPEAKER_02: Some states are enforcing it, some states are being blocked from enforcing it.
• 12:45
  SPEAKER_02: Um, so it's just all over the map.
• 12:47
  SPEAKER_02: Um, you know, how how states are responding.
• 12:51
  SPEAKER_02: But I was w wondering, do you think and I also think it's hilarious that people have this concern about being in some database.
• 12:58
  SPEAKER_02: I mean, the government knows our eyeballs, our fingerprints, our everything about us, every moment of every day.
• 13:03
  SPEAKER_02: We're somewhere we're captured on some camera, right?
• 13:05
  SPEAKER_02: I mean, whether it's you know, a TSA or Flock, and you know, I know that's all over the news today, but Flock is yeah.
• 13:12
  SPEAKER_02: Yeah, that's uh we'll put that aside for for the moment, but that'll be a separate show.
• 13:17
  SPEAKER_04: Yeah.
• 13:18
  SPEAKER_04: There's not a video of me ripping one of those off sometimes.
• 13:22
  SPEAKER_01: Emily with a hammer at them.
• 13:23
  SPEAKER_04: Rage ripping, like yeah.
• 13:27
  SPEAKER_02: Um do you think the um rescheduling of of medical though had is do you think that's improving perception with people that might have been otherwise hesitant?
• 13:36
  SPEAKER_02: Do you is that potentially a factor?
• 13:39
  SPEAKER_04: Um I do if they know about it.
• 13:42
  SPEAKER_04: And it's not as widely known as we would all hope.
• 13:45
  SPEAKER_04: You know, the one thing about the cannabis industry is we've always had kind of an industry PR problem.
• 13:50
  SPEAKER_04: We could always have done, I you know me, I want my milk campaign for the cannabis industry.
• 13:55
  SPEAKER_04: Like, I do think there's a lot of misinformation still about what this industry is about and what legal regulated cannabis looks like and is about.
• 14:02
  SPEAKER_04: And even my conversations and getting to meet the DEA agents who are supporting this process is it's unbelievable how much we all know because we're in the chamber, but what people outside of our industry are unaware of is is tremendous.
• 14:17
  SPEAKER_04: And I get sometimes disappointed by that.
• 14:20
  SPEAKER_04: But then at the same time, to me, that's massive opportunity space to change perceptions and to drive growth in a in an industry like ours.
• 14:27
  SPEAKER_04: So yeah.
• 14:29
  unknown: Cool.
• 14:29
  SPEAKER_02: Well, one last for me and I'll pass it to Jesse.
• 14:32
  SPEAKER_02: But you know, when you're looking across landscape in Florida, it's been, as you mentioned, there's been quite a bit of activity.
• 14:38
  SPEAKER_02: There's been stores relocating, the competition is getting higher.
• 14:41
  SPEAKER_02: We've seen consolidation, Virio bringing in what Green Dragon and now Planet 13.
• 14:45
  SPEAKER_02: And so like the the deck chairs are getting reshuffled, but just looking at the players in the space and you know, who how do you how do you measure like what does success look like for operators in Florida today in this new landscape?
• 15:00
  SPEAKER_04: I mean, I think our industry just in general, but in Florida, it's kind of like a great little crucible to see how it's um getting kind of cooked up.
• 15:08
  SPEAKER_04: But the I think the industry is trending into a couple of natural ways that a consumer product industry or a hospitality industry uh would trend towards.
• 15:19
  SPEAKER_04: So you have kind of these massive operators that are addressing mass scale value, totally different focus on the service experience, the brand experience, all of that is one type of an operator.
• 15:32
  SPEAKER_04: And then you have the operators that are kind of more boutique focused, a little bit more craft oriented.
• 15:38
  SPEAKER_04: Um, and you could look at the analogs to this in coffee, in wine and spirits and beer, um, in in even hotel chains.
• 15:45
  SPEAKER_04: You know, you could think about like the Kimden brand versus the Marriott brand as a whole Marriott brand and versus the smaller brands and the unique niche brands that Marriott as a parent company owns.
• 15:59
  SPEAKER_04: And they're all serving different demographics that have different interests and qualities that matter to them.
• 16:04
  SPEAKER_04: And so I feel like the competitive landscape on a whole, yes, the consumer, to be sure, is stretched.
• 16:12
  SPEAKER_04: And the consumer in cannabis is more stretched because we do not, we're unable to, as an industry, still accept credit cards.
• 16:20
  SPEAKER_04: So you can't, you don't have that even the 30-day float on your on your weed, we have to use debit or cash or um, you know, like can pay or arrow pay.
• 16:29
  SPEAKER_04: And but all of that is immediate cash out of your account.
• 16:32
  SPEAKER_04: So you have to understand that the consumer through the month is facing uh different cycles in terms of what they have available to them, the different product types they might be looking at.
• 16:41
  SPEAKER_04: But if you're a brand that has dialed in with your core consumer and you have the offerings that can keep them with you, the loyalty piece to that is is tremendous.
• 16:51
  SPEAKER_04: But I just think that Florida is a great little window into how the different types of brands of companies will offer different things to the consumers.
• 17:02
  SPEAKER_04: So it's pretty cool.
• 17:04
  SPEAKER_01: Yeah, and what a unique window to I think something that a lot of our a lot of our audience understands as somebody not Emily is the market structure there.
• 17:13
  SPEAKER_03: Yes.
• 17:14
  SPEAKER_01: So if I in California, you know, you can be vertical and push your own things through your stores, but we also have a thriving wholesale market.
• 17:21
  SPEAKER_01: So if I'm in Santa Barbara and I go to the pharmacy, I'm gonna see a bunch more glasshouse products, but I'll probably still see fig farms in Kiva.
• 17:29
  SPEAKER_01: If I go up the street to the Juicy store beyond Telow, I'll probably see some more of their stuff, but I'm also probably gonna see fake farms in Kiva.
• 17:35
  SPEAKER_01: And that example could go to another two or three stores.
• 17:39
  SPEAKER_01: Florida, not the same experience.
• 17:41
  SPEAKER_01: So I'm curious if you can explain what the market structure is there, and then unpack a bit.
• 17:47
  SPEAKER_01: What does that mean to the consumer?
• 17:48
  SPEAKER_04: Yeah.
• 17:49
  SPEAKER_04: Yep.
• 17:49
  SPEAKER_04: Yeah.
• 17:50
  SPEAKER_04: So you do you have to have your own grow, your own product manufacturing, your own distribution, and your own retail.
• 17:57
  SPEAKER_04: And um, that that's a lot of businesses to manage in one business when you think about it.
• 18:02
  SPEAKER_04: It's like different, it's completely different core competencies across an entire organization.
• 18:07
  SPEAKER_04: However, if you dial it in cross-functionally, you can create a lot of great sharing of information flowing from the demand planning, from what you're seeing in the retail data, all the way back to your own farm.
• 18:19
  SPEAKER_04: And if, and then you back time to what you're growing.
• 18:22
  SPEAKER_04: And then of course you have to match seasonality to all of that.
• 18:26
  SPEAKER_04: But uh, if you get it really dialed, it's pretty incredible to have that all in one vertical and to know that you're kind of the owner of your own destiny in that in that space.
• 18:36
  SPEAKER_04: Um, but it is challenging because, for example, like you just noted, you can have more of your value product plays that are provided by maybe a massive outdoor grow in California, or just to name an idea, and um and down to like your more craft, like your canabiotics, your fig farms, and just knowing that that's like, and there will be pricing differences, likely.
• 18:58
  SPEAKER_04: Although, for example, a large outdoor grow in California, you can have a premium tier to that, but you have to basically create that tiering of products and product experiences within your own vertical in Florida.
• 19:12
  SPEAKER_04: So you have to have like your more value-oriented product brand, but also maybe category of products that kind of meet the consumer in that value space.
• 19:22
  SPEAKER_04: But importantly, if you are a fully contemplated brand, you will have a perspective on what your version of value is versus what your version of premium is.
• 19:31
  SPEAKER_04: And I think that that's where we're we're heading.
• 19:34
  SPEAKER_04: And I think that your question is a good one because the full vertical point to that does make you responsible for it from end to end.
• 19:43
  SPEAKER_04: So it's a really interesting ownership of what's going on in in each of those aspects of the business.
• 19:50
  SPEAKER_01: Yeah, huge pros and cons, right?
• 19:52
  SPEAKER_01: Like if if you could push, you know, we have the one store in uh Palm Desert, I think a bentor store maybe called the Leaf El Paseo.
• 19:59
  SPEAKER_04: Very pretty store.
• 20:00
  SPEAKER_01: Yeah, absolutely gorgeous store.
• 20:02
  SPEAKER_01: And we hit some of the high end there.
• 20:04
  SPEAKER_01: You know, there's a wealthy senior community.
• 20:06
  SPEAKER_01: The store sells a ton of gummies, just kind of an interesting data point because of seniors, it skews really high on that on that side.
• 20:12
  SPEAKER_01: But we found you got to hit the value stuff too, because even you know, the affluent people sometimes want the value stuff.
• 20:17
  SPEAKER_01: And like you said, Emily, everyone's everyone's stretched.
• 20:20
  SPEAKER_01: And so we're able to accomplish that through diversifying across different brands that intentionally hit those things.
• 20:26
  SPEAKER_01: And then, like you mentioned, the flower side, uh, this is uh you know, it inaccurate in some ways, but you have you know, your sun grown typically a little more affordable, your indoor typically a bit higher end, and you can source a whole bunch of things to build a menu.
• 20:39
  SPEAKER_01: And I think there's a pro there in the sense that you have a real diverse menu, but the con I've seen Emily is a lot of stores in California can start to feel the same because they're carrying similar products on the menu.
• 20:50
  SPEAKER_01: I'm curious in Florida if one of the benefits is potentially you can really carve out some brand identity around who you are.
• 20:56
  SPEAKER_01: Are you the jack of all trades?
• 20:58
  SPEAKER_01: Are you the you know, the headier crowd that likes the fancier stuff?
• 21:02
  SPEAKER_01: Are there are there are there people, Emily, out there just standing for value?
• 21:05
  SPEAKER_01: Or how are people kind of hitting those?
• 21:07
  SPEAKER_01: Are people how are people writing those identities through the things they choose to produce?
• 21:13
  SPEAKER_04: I think you just hit it on the head.
• 21:15
  SPEAKER_04: I think it is about like owning what you what your core competency is as a company.
• 21:19
  SPEAKER_04: And it's like, so maybe you are really known for bespoke concentrate product categories like temple balls or diamonds or whatever it might be, but then maybe you're known for having half ounces of flour in a bag.
• 21:32
  SPEAKER_04: Like, you know, it's like, what are you kind of known for?
• 21:35
  SPEAKER_04: And then you build around that so you have a replete offering.
• 21:38
  SPEAKER_04: But I'll do you one even more.
• 21:40
  SPEAKER_04: I mean, you actually just set this up too, is like you have to know the market.
• 21:43
  SPEAKER_04: So if you have stores across a state like California or like Florida, you have to understand that the consumer like out here in California, the LA consumer is actually quite different than the San Francisco consumer.
• 21:54
  SPEAKER_04: And they're both cosmopolitan locations, but it's very different in terms of their preferences.
• 22:00
  SPEAKER_04: Um, the same is true in Florida.
• 22:01
  SPEAKER_04: Like Pensacola couldn't be much more different than Miami in terms of the consumer base, kind of the vibes of the place in terms of what people are about and and where they come from.
• 22:12
  SPEAKER_04: Like there's a lot of folks from Pensacola that are Pensacola folks, you know?
• 22:16
  SPEAKER_04: And then Miami is like you're you're the international scene of all international scenes, and that's its own complexity.
• 22:23
  SPEAKER_04: So you have to also kind of fine-tune it to each of the markets where you have a retail touch point.
• 22:29
  SPEAKER_04: So I think the core, though, is to your point, is like, what are you known for?
• 22:34
  SPEAKER_04: And then you build it around that and you just kind of calibrate it so it it fits through the lens of what you're known for in each of those markets.
• 22:42
  SPEAKER_04: And I think that's how you'll win because the consumer will understand what they're coming to you for, or in Florida's case, the patients.
• 22:50
  SPEAKER_01: Yeah, that's a great way of looking at it.
• 22:52
  SPEAKER_01: If you're jungle boys or cookies, that Miami Fort Lauderdale market makes a lot more sense than you know than being in Pensacola.
• 22:58
  SPEAKER_01: And I think we've seen that with some of the store openings with those um fancier brands, especially some of the California ones that have come over there.
• 23:06
  SPEAKER_01: Well, I'm curious, like, what's working in Florida?
• 23:09
  SPEAKER_01: Like when I look at the California market, Emily, the flour market is still here, but it's evolving into more of a manufactured products market.
• 23:17
  SPEAKER_01: Here, 54, 54% of products use concentrates.
• 23:21
  SPEAKER_01: Vapes eclipse flour in California as the biggest category, which is super interesting to see.
• 23:26
  SPEAKER_01: And then the stat that intrigues me the most is that youngest generation, gen, whatever they are, lost track of the names.
• 23:32
  SPEAKER_01: They spend twice as much money on vapes as they do flour.
• 23:36
  SPEAKER_01: So you still see people like me, you know, the old guy who you know likes to ground up, grind up his flour, and do his thing with them.
• 23:43
  SPEAKER_01: But the younger kids, man, it's all about the discrete stuff, the vapes and the edibles.
• 23:46
  SPEAKER_01: So I think that's kind of shaping the that's the most pronounced trend that I see here.
• 23:51
  SPEAKER_01: I feel like value is strong here for necessary reasons.
• 23:54
  SPEAKER_01: People want the most THC for dollar, which is the most flawed concept out there.
• 23:58
  SPEAKER_01: But I'd say that preference towards those just more discrete manufactured products, that's one of the big trends I'm seeing that's working here.
• 24:04
  SPEAKER_01: What does it feel like for your experience as working in Florida?
• 24:07
  SPEAKER_01: What does that Florida consumer want?
• 24:08
  SPEAKER_04: I mean, flowers still the big baby, but the um the vape category is massive and and very sticky.
• 24:16
  SPEAKER_04: Like it's you can see it in the data, like distillate cart folks are distillate cart folks.
• 24:20
  SPEAKER_04: They're just like coming in for it.
• 24:22
  SPEAKER_04: Um, and it is definitely to your point that Gen Z.
• 24:26
  SPEAKER_04: I was so excited when this happened.
• 24:27
  SPEAKER_04: Like the Gen Z takeover of the cat drove that category to number one in California because I knew they would, because they have an affinity for the the form and the function of it and the and the way that it fits into the way that they live their lives.
• 24:42
  SPEAKER_04: And that's that is how you can see a consumer product category evolving and maturing, is is that it's no longer siloed and off to the side.
• 24:50
  SPEAKER_04: It's like, how does this fit into my lifestyle?
• 24:52
  SPEAKER_04: And that's like that's to me is where that vape thrust came from.
• 24:56
  SPEAKER_04: And then you could see it in the all-in-ones and the way it reflects people's style or lifestyle and and in their lives, even though like sometimes all in ones struggle from a functionality perspective for some people versus a cart and a pen structure.
• 25:11
  SPEAKER_04: But I think you know that that uh technology is improving.
• 25:15
  SPEAKER_04: Like active does awesome, awesome hardware for those all-in-ones.
• 25:19
  SPEAKER_04: Um but the other category, one category I've been seeing growing is is in the rosin uh oil category.
• 25:26
  SPEAKER_04: So that's also exciting to me because I think, well, I I I like rosin in in an oil form, but like or in a vape form.
• 25:34
  SPEAKER_04: But um I think that that's a category I'm seeing growing.
• 25:38
  SPEAKER_04: Another category that's growing in Florida is the um pre-roll category, which unlike California where we have infused pre-rolls, that's not approved by the DOH yet down there, uh, because it's kind of a complicated product to register with the DOH, so it's there's like concentrated.
• 25:56
  SPEAKER_04: But um, it's it's cool to see that category growing because that's that's a big category in other markets.
• 26:02
  SPEAKER_04: Like we knew in Ohio, when Ohio opened without pre-rolls that that was going to hurt, and now they finally have it.
• 26:07
  SPEAKER_04: It's you can see how that's improved that market to have that as a category.
• 26:12
  SPEAKER_04: So um that's another one that's growing.
• 26:14
  SPEAKER_04: And so I think that vape will continue to grow and be huge.
• 26:18
  SPEAKER_04: Um, but people do love their flour down there, and I think that's great.
• 26:22
  SPEAKER_04: I think there's some like cool, like kind of vinyl analogs.
• 26:25
  SPEAKER_04: Yeah, totally.
• 26:26
  SPEAKER_04: Yeah.
• 26:26
  SPEAKER_01: Yeah, I think I think it was Craig Fox said to me like a couple of years ago that he thinks eventually flour, like grind it up flour and smoke it or vape it is gonna be less than 15% of the market, one five percent of the market one what one day.
• 26:39
  SPEAKER_01: And I looked at them back then and I'm like, dude, you're crazy.
• 26:41
  SPEAKER_01: Then I look at it now.
• 26:42
  SPEAKER_01: I'm like, yeah, I'm just was living in my own little world where like me and my community loves that, but you got to look at what's going on underneath you.
• 26:48
  SPEAKER_01: And that younger generation is going towards those, towards those convenient form factors.
• 26:53
  SPEAKER_01: And you mentioned the rosin vapes, and those are gaining popularity.
• 26:56
  SPEAKER_01: But one other interesting data point from California is that liquid live resin vapes have eclipsed distillate vapes as the most popular vape form factor, vape oil.
• 27:05
  SPEAKER_01: So, what that's telling me is that as those prices got low enough, right?
• 27:09
  SPEAKER_01: If people will people were like, oh, well, if it's 20 bucks for distillate, 25 bucks for live resin, let me give that a try, then they have the whole plant experience.
• 27:18
  SPEAKER_01: Like, oh my gosh, this is better.
• 27:19
  SPEAKER_01: So I think that's kind of a kind of a cool data point that I think will trickle down, you know, as those, as the costs come down and people are willing to say, I'm gonna go up one category to explore a little bit more.
• 27:30
  SPEAKER_04: Yeah.
• 27:31
  SPEAKER_04: We saw that too in like the great financial crisis.
• 27:34
  SPEAKER_04: There's this funny thing that happens where at first when people are feeling stretched, they go very value and then they kind of tick up just a touch, just to like it's a little treat yourself, but it's very, it's still fiscally responsible-ish.
• 27:47
  SPEAKER_04: So, you know, I think it's like that's where like the what was that wine?
• 27:51
  SPEAKER_04: It's like you go to the box first and then and then you go to like the yellow tail kind of larger one.
• 27:57
  SPEAKER_04: Yeah, I can't, but you know the deal.
• 28:00
  SPEAKER_01: Yeah, you're stepping out of the full the fully embarrassing, low, lower, low, fully low category to going up a notch, which makes you makes you feel better.
• 28:08
  SPEAKER_01: But I think in this case, you're getting a better product too, which is cool.
• 28:11
  SPEAKER_04: Well, that's the thing.
• 28:12
  SPEAKER_04: Yeah, it's true.
• 28:13
  SPEAKER_01: There's actually a difference.
• 28:15
  SPEAKER_04: Although people love the flavors of the distillate uh stuff, you know, vape, you know, they love flavor folks.
• 28:24
  SPEAKER_01: 100%.
• 28:25
  SPEAKER_01: And yeah, shout shout out to Lori Holcomb um for something that we talked about years ago, which is her talk, she was talking to me about how much vapes of the nicotine variety are informing vapes of the cannabis variety.
• 28:38
  SPEAKER_01: First in that you're right, first in that form factor, like a lot of the boxier all-in ones getting away from the the bigger pens.
• 28:45
  SPEAKER_01: I actually like the boxier form factor, so that one doesn't bot bother me too much.
• 28:49
  SPEAKER_01: But man, miss me on most of these flavors, right?
• 28:51
  SPEAKER_01: Like, you know, watermelon, skittles, sprite, runts, you know, whatever those flavors are.
• 28:56
  SPEAKER_01: Those are largely coming from the push in the nicotine nicotine space.
• 29:01
  SPEAKER_01: And I would even argue to get a bit nerdier, that's what's been informing and driving this candy wave on the flower side is just more and more of that turp preference is coming from those really bright, loud flavors that you get at the nicotine vapes.
• 29:12
  SPEAKER_04: Yeah, you're probably right.
• 29:13
  SPEAKER_04: I mean, I do think it's a the consumer pendulum swings, right?
• 29:17
  SPEAKER_04: Like there's now Pop Tart buzzballs in the fridge at the store.
• 29:21
  SPEAKER_04: So I feel like it's just like, well, just let it all go, I guess.
• 29:24
  SPEAKER_04: But but I'm one of those folks who actually loves the taste of cannabis and the smell of cannabis and the the true terpenes.
• 29:32
  SPEAKER_04: Like I love to sniff a flower, but um, you know, some folks are looking for something a little fruitier.
• 29:37
  SPEAKER_04: So yeah, that's their jam.
• 29:39
  SPEAKER_01: So talk to me about the retail scene there too, Emily.
• 29:44
  SPEAKER_01: I'm curious, like it's easy to say that discount is working and people want cheap stuff, but I'm curious on a different level, which is like absent the discounting of like what is it that draws people in and what is it that creates that repeat business?
• 29:57
  SPEAKER_04: Yeah, I do think it's um if you're if you're not going just all out, heaviest discount in this market, you have to offer something else else, right?
• 30:05
  SPEAKER_04: So it's the in-store experience, it can be very cool and designed and fun vibe inside of there, and also um just unbelievable attention and service from or not also the the option to engage or not to be so engaged with the folks working in the store, the retail associates, the bud tenders.
• 30:24
  SPEAKER_04: Uh, and so I think that that's another thing that as a brand, having a point of view about, you know, walking into a store and feeling welcomed immediately and and yet having and knowing that you could instead focus on a digital kiosk experience versus having to engage with a representative if you're someone who's shy or just has an in-and-out type of a request, order ahead.
• 30:47
  SPEAKER_04: I think that you have to make the experience um tailored as much to the consumer.
• 30:51
  SPEAKER_04: And in Florida, being medical, we are focused on medical offerings and and folks who come in for medical reasons, truly and solely for that reason, um, which is what they're what the program's about.
• 31:05
  SPEAKER_04: So we really, I think the market does have a a little bit of an extra nuance to it because people trying to understand, you know, obviously, you our industry, you're not supposed to like make a claim or a medical recommendation, but what you can do is share what you've heard and learned from other people who are looking for a similar result when they're dealing with different conditions.
• 31:26
  SPEAKER_04: So there's there's a lot of that too, of just being really open to it and also being able to pass them along to a good um physician who's you know treating the industry, so are people who are interested in cannabis.
• 31:38
  SPEAKER_04: So I think there's the vibe of the store, the perspective of the store and how it represents the brand of the company.
• 31:45
  SPEAKER_04: And then I think there's the the consumer experience, the patient experience, what you know, if depending on the market, but in Florida, the patient experience.
• 31:54
  SPEAKER_04: And um, I oh, and then there's another piece to it, which is of course like the way that you create a loyalty program and platform so that people feel like with each dollar that they spend with you, they're getting an opportunity to gain access to something or uh get a discount at a special time or get access early to products.
• 32:14
  SPEAKER_04: That's something that we're doing, is um with some of the new bespoke products, you have access to it through the loyalty program just signing up.
• 32:22
  SPEAKER_04: So, so and I was seeing other companies doing similar things.
• 32:26
  SPEAKER_04: And I think that's another piece to it, which is again just a sign that our industry is maturing to be like um, you know, Target has a really robust loyalty program in the Target rewards circle, I think it's called.
• 32:39
  SPEAKER_04: Um, and you can see it across uh different retailers outside of cannabis, but I think that those are some of the ways you can do it.
• 32:47
  SPEAKER_04: But I think, you know, ideally your product is matching what the expectations are or exceeding it for the consumers, and that's how you get them to continue to come back.
• 32:58
  SPEAKER_01: Yeah, I love the point thing.
• 33:00
  SPEAKER_01: I don't get that a lot in my cannabis experiences, but I go with my kids and I take in this place called Backyard Bowls.
• 33:05
  SPEAKER_01: You know what backyard bowls is?
• 33:07
  SPEAKER_01: Do you guys have that?
• 33:07
  SPEAKER_01: It's like an asay bowl place.
• 33:09
  SPEAKER_01: You have that Morgan in San Diego?
• 33:11
  SPEAKER_02: Is that a thing?
• 33:12
  SPEAKER_02: Acci bowls are for sure, but I haven't heard of a backyard bowl.
• 33:15
  SPEAKER_01: Okay, maybe that's Santa Barbara.
• 33:17
  SPEAKER_01: But anyway, the point of the story is that I'll go in there and I'll spend, you know,$30 on two Osai E bowls, but they'll tell me, oh man, you have a$5 credit.
• 33:24
  SPEAKER_01: Would you like that today?
• 33:25
  SPEAKER_01: Or occasionally I get a free bowl, and it disproportionately feels so good.
• 33:29
  SPEAKER_01: Like, forget the fact I spent$500 here in the last three months.
• 33:32
  SPEAKER_01: The fact that you just gave me one free bowl, man, does that feel good?
• 33:35
  SPEAKER_01: So I feel like that's that that kind of stuff does work and could really drive loyalty.
• 33:39
  SPEAKER_04: Yeah, I've seen that out here in San Francisco, and I know how I respond to it, and I know how I respond to it with the other exogenous retailers that I work with.
• 33:50
  SPEAKER_04: And um, sorry if that siren was loud.
• 33:53
  SPEAKER_04: Um, but the you know, I I do it works.
• 33:56
  SPEAKER_04: And what you just described works really well.
• 33:58
  SPEAKER_04: Like, oh, just like and you get this.
• 34:01
  SPEAKER_04: Like it's a little teaser.
• 34:04
  SPEAKER_01: You said one other thing that I loved too, that that I loved, which is to engage or not engage.
• 34:09
  SPEAKER_01: Because don't assume dispensaries, that every consumer that could that comes in there wants to have a huge conversation with with you about weed.
• 34:16
  SPEAKER_01: Like when I had our our our business, um, we did mainly delivery, and I personally delivered to like the first thousand or so patients that we had.
• 34:24
  SPEAKER_01: And you can tell if you're a connected human being whether somebody wants to have a conversation with you or whether they just want to politely pay for their cannabis and have you move on.
• 34:32
  SPEAKER_01: And especially once you do it three or four times with that person, you'll either develop that relationship where you're chatting, oh, how were the dogs today and all that stuff, or you know, they just don't want to engage.
• 34:41
  SPEAKER_01: And sometimes, especially around cannabis, like we're weed folks, and you know, we can sit here and talk about it.
• 34:46
  SPEAKER_01: But for a lot of people, that conversation doesn't feel that good.
• 34:48
  SPEAKER_01: Either there's a little shame in it or they don't feel like they know enough, or they don't feel like they they have to that they know how to ask the right questions.
• 34:55
  SPEAKER_01: And so I like that you said engage the option to engage or the option to not engage, because man, sometimes you don't want to engage.
• 35:02
  SPEAKER_01: Sometimes I go to dispensary, I don't want to have the conversation, I just want to buy the stuff and move on.
• 35:05
  SPEAKER_01: Like I don't need to have the bud tender you know conversation.
• 35:08
  SPEAKER_04: Yeah.
• 35:09
  SPEAKER_04: And that's you're absolutely right.
• 35:10
  SPEAKER_04: That's just human intuition and just being uh, you know, having your Emily post rules of engagement on at all times.
• 35:20
  SPEAKER_04: So I I agree with you.
• 35:21
  SPEAKER_04: I I like sometimes I just want to browse and then make a decision on my own.
• 35:26
  SPEAKER_04: And that's perfectly acceptable.
• 35:29
  SPEAKER_01: So yeah.
• 35:30
  SPEAKER_01: One more for me, Morgan, that'll kick it back over to you.
• 35:32
  SPEAKER_01: And on the uh on the Twitter, on the LinkedIn, um, I sure see a lot of store openings, Emily.
• 35:39
  SPEAKER_01: Seems like there's a new store opening every day in Florida.
• 35:42
  SPEAKER_01: And so sometimes for these larger MSOs, Florida dominant players, you'll continue to see you know revenue grow, especially on the Florida side, but you're not clear like how much of that is just coming from opening new stores?
• 35:54
  SPEAKER_01: Is that cannibalizing existing stores?
• 35:56
  SPEAKER_01: What does same same store sales look like?
• 35:58
  SPEAKER_01: So I'm curious, besides just adding on new potentially dilutive doors, what are the other opportunities for your operators themselves to drive more revenue or just that Florida market to get bigger?
• 36:10
  SPEAKER_04: It's a great question.
• 36:11
  SPEAKER_04: Um, I think continuing to grow and evolve the product categories and offerings is one way to do it with a specific perspective.
• 36:20
  SPEAKER_04: Again, I'm gonna go back that aligns with your brand.
• 36:23
  SPEAKER_04: Um, and so that's a way to just drive things beyond the because there's the lever of discounting and and all the promotional activity that can drive sales, but that's actually a very low sticky way to engage uh patients or consumers.
• 36:40
  SPEAKER_04: It's it's better to have like new products or variety or different ways.
• 36:44
  SPEAKER_04: So just having that as an industry continuing to raise the bar in terms of what we're all offering out there is a is a good way to grow it.
• 36:52
  SPEAKER_04: I do think there's still room in the markets to grow.
• 36:56
  SPEAKER_04: There are still some untapped uh municipalities and regions in the state that could benefit from stores.
• 37:04
  SPEAKER_04: There are certain municipalities that are quite saturated.
• 37:07
  SPEAKER_04: Um, and I do think that some of the larger operators who have more resources can be thinking about how they're relocating to those lighter populated areas, um, meaning lighter retail located areas.
• 37:20
  SPEAKER_04: Um, so I think there's just a lot of opportunity to optimize the footprint in the state that will reach more patients that would actually drive growth.
• 37:29
  SPEAKER_04: I also just think this uh medical card hold holding stat that's really held static or churned at a certain level, that has a lot of room for growth.
• 37:41
  SPEAKER_04: And that is something that I'd I'd love to see for the state too, just to have that opportunity to see more people having access to it.
• 37:49
  SPEAKER_04: So I think the state as a whole could see an improvement through medical card holding um numbers going up.
• 37:56
  SPEAKER_04: And then also kind of the locating of retail to the municipalities that are underserviced by the industry as it stands today.
• 38:04
  SPEAKER_04: But I do think a lot of the operators are continuing just to try to open footprints in order to carry the sell through of the product that they have in the vertical and reach as many people as possible.
• 38:16
  SPEAKER_04: I think that um there's different decisions around the revenue per door that some operators might be having just because they want to have that total footprint versus making sure, like for the smaller operators, I would imagine they're thinking about what's a high impact footprint that we could establish, because you have to be very careful about how you're allocating your capital.
• 38:39
  SPEAKER_04: And I would imagine that's where you're going to see different strategies in terms of, and again, that kind of doesn't that kind of work with what we're talking about is like how many drunk and donuts in the world are there?
• 38:49
  SPEAKER_04: Like a billion, like so, so, so many, right?
• 38:51
  SPEAKER_04: And that's more of like a massive footprint strategy versus a smaller coffee brand approach.
• 38:58
  SPEAKER_04: Um, even I think Starbucks has realized they had to, they went very, very far and wide.
• 39:03
  SPEAKER_04: And I feel like they realized they had to like dial it back and get recalibrated on their footprint selection.
• 39:08
  SPEAKER_04: So I think that those are kind of the differences we'll see in how footprint uh the Florida market continues to grow.
• 39:15
  SPEAKER_04: But I am optimistic about the medical card piece as a lever that the whole industry in Florida could work on to achieve real growth.
• 39:25
  SPEAKER_04: Yeah, it's interesting.
• 39:26
  SPEAKER_04: I mean, the if you think about it just real quickly, it's like we have one pie that everyone just keeps slicing smaller and smaller slices of.
• 39:34
  SPEAKER_04: If and so we need to we need a bigger pie.
• 39:38
  SPEAKER_02: Um yeah, it's interesting because like Florida's at least from the news, uh, Florida's population has grown quite a bit over the last several years.
• 39:46
  SPEAKER_02: So I guess is that saying the if the patient count turning around that 920 to 940, does that mean per capita has actually declined?
• 39:55
  SPEAKER_02: And so there's room just to even catch back up to where it was before.
• 40:00
  SPEAKER_02: And it's just kind of interesting with so many people coming from out of state, there's hesitancy, I guess, around adopting the card.
• 40:09
  SPEAKER_02: Yeah.
• 40:10
  SPEAKER_04: Yeah, you know, even just another in like a facet of Florida is the snowbird behavior.
• 40:16
  SPEAKER_04: And you can have a medical card if you're a person who splits your time and you have an address in Florida.
• 40:22
  SPEAKER_04: So, but that's another area that I think people are not informed about as um people who are snowbirds in Florida.
• 40:28
  SPEAKER_04: And that's a great demographic uh for the state in general.
• 40:32
  SPEAKER_04: Um, so um, where is Morgan's bill's background?
• 40:36
  SPEAKER_04: Sorry, I'm seeing comments, it's distracting me.
• 40:38
  SPEAKER_01: Um sorry, I thought I thought it was a valid question for our CFO, Kevin Wilson.
• 40:43
  SPEAKER_04: I'm very for it.
• 40:44
  SPEAKER_04: Um, but yeah, that's I I agree with you, Morgan, though.
• 40:47
  SPEAKER_04: Like, and especially because a lot of folks who have been moving to the state of Florida, if the data is correct, are coming from markets where there is legal cannabis.
• 40:57
  SPEAKER_04: But again, it may have been assumptive, like they came from adult use markets.
• 41:00
  SPEAKER_04: Oh, I don't want to get a medical card.
• 41:03
  SPEAKER_04: Um, you know, a medical card in Florida, you have to have an in-person visit the first time, and then you can go to telehealth.
• 41:09
  SPEAKER_04: And you have to pay, and you have to pay again, and you have to renew it.
• 41:13
  SPEAKER_04: And there's also, this is an interesting fact is that there's uh allocation limits, allotment limits.
• 41:20
  SPEAKER_04: So you have an allotment limit for oral, for inhalation, for oh shoot, the different category.
• 41:27
  SPEAKER_04: Anyway, um, I'm drawing a blank at the moment, but they have different windows.
• 41:31
  SPEAKER_01: How much weed can I buy in a month?
• 41:33
  SPEAKER_01: Like flour.
• 41:34
  SPEAKER_04: It depends on what your doctor's prescription indicates.
• 41:38
  SPEAKER_04: Yeah.
• 41:38
  SPEAKER_04: So you can have different different patients have different allotments.
• 41:42
  SPEAKER_04: Um, and then the date, for example, for concentrates, it's like 70 days versus flour, which is 30 days of a cycle.
• 41:50
  SPEAKER_04: So it's, you know, when you're a retailer and you're thinking about, okay, 710, huge holiday, right?
• 41:58
  SPEAKER_04: And if you're a concentrate focused company, that's a great blowout.
• 42:02
  SPEAKER_04: But then you have to think about did people max out their allotments in the days leading up to 710?
• 42:07
  SPEAKER_04: Same thing with 420.
• 42:08
  SPEAKER_04: So there's like, you have to think about those things.
• 42:11
  SPEAKER_04: And again, that's where more medical patients would be just so helpful.
• 42:14
  SPEAKER_04: Um, and then the doctors have gotten more dialed in on how they do write the scripts.
• 42:20
  SPEAKER_04: Um, because there was sometimes there used to be like blanket scripts that would have like a suppository, which is not a very popular category, actually.
• 42:28
  SPEAKER_04: And so then people would have a allocation for that that they were never using versus a little bit more of inhalation or oral.
• 42:38
  SPEAKER_02: Florida's different than that.
• 42:40
  SPEAKER_02: It's like this basically mandatory vertical integration, right?
• 42:46
  SPEAKER_02: I mean, we see limited license markets, there's like a a preference to have vertical integration on and um, but some of these legacy markets look very different.
• 42:55
  SPEAKER_02: Like I was there was a great headset thing this week um that I commented about was um just the share of shelf in Colorado from these vertical operators, they went from 25% to 10%.
• 43:09
  SPEAKER_02: And like in California, like that was kind of a baseline number anyway.
• 43:13
  SPEAKER_02: It was like kind of 10-ish for a lot of groups, and they just had a lot of either wholesale or just not as much back end.
• 43:19
  SPEAKER_02: And then some of these limited license markets, we see like some preference in like New Jersey, like 80, 90 percent uh shelf from your own products, but in you don't really get that choice, right?
• 43:29
  SPEAKER_02: I mean, it's just you it's just all your own products in Florida, right?
• 43:33
  SPEAKER_02: Like America, yeah, yeah.
• 43:35
  SPEAKER_04: Unless you and you can license brands, right?
• 43:37
  SPEAKER_04: So like 710 is there through flowery, like um Oni Genetics is there through Planet 13.
• 43:44
  SPEAKER_04: Like there's different brands that you can have a licensing agreement with, but you have to cultivate that, right?
• 43:51
  SPEAKER_04: And and put it on your shelves.
• 43:53
  SPEAKER_04: Um, and so that that is something, but even when we thought we were going to get adult use potentially in that lab.
• 44:00
  SPEAKER_04: Uh election, there was conversation about what implementation would look like.
• 44:05
  SPEAKER_04: And from what I understand, there was going to be heavy resistance to creating that wholesale market.
• 44:12
  SPEAKER_04: The desire to keep it vertical was very strong by the legislature.
• 44:15
  SPEAKER_01: So why it why is that, Emily?
• 44:17
  SPEAKER_01: What's the what's the root of that?
• 44:18
  SPEAKER_04: The only thing I've gathered, and this is just like through asking that exact question, is um the the point around diversion of product that could be tighter through a full vertical versus, I mean, I guess I would say, you know, folks throw a lot of comments out about distributors in California and Oregon and how that more how product might get to New York through that.
• 44:42
  SPEAKER_04: Um, and that I'm not saying anything that's not my I'm not weighing in at all on that.
• 44:46
  SPEAKER_04: I'm just sharing that that has been said.
• 44:48
  SPEAKER_04: Um, and so I think that thinking if you are responsible literally to from the seed you plant in the dirt, all the or where however you grow it, your whatever your medium is, um, through to the point of sale, you are responsible for what happens with that product.
• 45:03
  SPEAKER_04: And actually, this is the big line of focus for the DEA is diversion of product.
• 45:08
  SPEAKER_04: So that read really well with the DEA is that ownership and the SOPs that you can have around that, that you own it and you have, and again, like just like anywhere else.
• 45:18
  SPEAKER_04: So you have to destroy it out and document that if you have a problem with anything else like that.
• 45:23
  SPEAKER_04: But owning that vertical, I think, is perceived to create a tightness on what happens with the product.
• 45:30
  SPEAKER_04: I don't know if that's true, but I know that that's a perception.
• 45:35
  SPEAKER_02: Do you think overall like the like pros-cons of it, of having a kind of mandatory model versus what we've experienced uh from investments in other markets?
• 45:47
  SPEAKER_02: Like, do you think it's a I mean, obviously it complicates the hell out of a business, right?
• 45:52
  SPEAKER_02: Because you gotta be you gotta be great from beginning to end.
• 45:55
  SPEAKER_02: Like you gotta you gotta succeed not only making the great products, knowing what your customers want, having them in those specific stores in those, you know, in those municipalities of that kind of uh consumer buying.
• 46:05
  SPEAKER_02: So like, you know, it's makes for a you know, you've got to be really good at so many different things, but you get better control over the margin profile, you have better control over your end customer because they're buying from your store.
• 46:20
  SPEAKER_02: Like, so just trying to think like is the pros cons of it overall, you know, do you think that's a model that is net positive, or do you think longer term there's you're there's opportunity like what more of these legacy markets where you can have more you know trading amongst partners and and having a wholesale market?
• 46:40
  SPEAKER_02: Like just trying to think of like is it net net?
• 46:43
  SPEAKER_02: Because like, you know, it's an interesting thing about just our industry overall is we're just so there's just so many like test markets, like let's see how this structure works, will this be good or not?
• 46:51
  SPEAKER_02: And yeah, so just kind of curious what you think.
• 46:54
  SPEAKER_04: Yeah, I mean, I kind of like it because it helped I mean it's hard.
• 46:58
  SPEAKER_04: It is hard.
• 46:59
  SPEAKER_04: There's no end to how hard it is because you're working with plants, so just start there a fickle creature that you're dealing with, and and weather, really.
• 47:10
  SPEAKER_04: I mean, even if you're because okay, we're in a super El Nino cycle right now, that will create more cloud cover and more rain in the state of Florida, and that matters to you know, greenhouse growers and to growers that have to interact with the sunlight.
• 47:25
  SPEAKER_04: And so you have to think about all of those factors as it pertain also shorter day cycles at that point.
• 47:31
  SPEAKER_04: So everything can impact your productivity on the back end, and then you have to manage that on the front end at the retail side.
• 47:39
  SPEAKER_04: So again, that comes back to like the very sensitive demand planning you have to do.
• 47:44
  SPEAKER_04: You have to be cyclical, you have to understand the holiday cycles, the consumer spending cycles, the allotments coming out of the high holidays.
• 47:52
  SPEAKER_04: Like there's a lot of inputs on the front end, and you have to also then back time for everything that has to happen in cultivation, manufacturing, and processing of the plant and processing and manufacturing, and then the distribution.
• 48:05
  SPEAKER_04: So it's really, really hard, but it does give you actually to something Jesse said, you actually made me really happy to be involved in a vertical market because it does let you have a very specific point of view of what you're putting on your shelves and what you're doing for your consumers.
• 48:22
  SPEAKER_04: Because out in California, to your point, and in other markets, it's like, of course, you have to have like a kiva, um, a steezy, uh, what's it wild?
• 48:30
  SPEAKER_04: Like you have there's like certain things like you just gotta have it.
• 48:33
  SPEAKER_04: And then you have to figure out how to fill in your perspective as a brand beyond that.
• 48:39
  SPEAKER_04: Um, and in Florida, you own the whole shelf.
• 48:43
  SPEAKER_04: Um, and so that's a really interesting kind of brand uh uh exercise and opportunity.
• 48:52
  SPEAKER_04: So it's just an interesting, it's such an interesting market.
• 48:55
  SPEAKER_04: It's been truly uh eye-opening.
• 48:59
  SPEAKER_04: I mean, and you and then we have Georgia opening, right?
• 49:02
  SPEAKER_04: As a the country, which is exciting as a medical market.
• 49:06
  SPEAKER_04: They have a very different medical card program, which is far more accessible, which is why you see the patient counts exploding right now, which is awesome for them.
• 49:16
  SPEAKER_04: And they're both vertical and allow you to do some wholesaling.
• 49:20
  SPEAKER_04: So already some of the brands are in that state.
• 49:23
  SPEAKER_04: So, I mean, but to your point that each state is its own kind of like consumer kind of like experiment to see how these different things work.
• 49:31
  SPEAKER_04: And you and I went through, you know, what it was like in Washington with the separation of growers and retailers, and and we've seen what goes on in Arizona, California.
• 49:41
  SPEAKER_04: I mean, it's just so unbelievably different in every market.
• 49:44
  SPEAKER_04: It's it's amazing.
• 49:46
  SPEAKER_01: I think back to um Troy Datcher, who was CEO, executive chairman of the parent company, something along those lines.
• 49:53
  SPEAKER_01: The late the late Troy Dacher.
• 49:56
  SPEAKER_01: Yeah, I heard he's a great guy.
• 49:58
  SPEAKER_01: Um, never had a chance to meet him, but um one thing he said really stuck in my mind.
• 50:02
  SPEAKER_01: I think it was a quote that I read somewhere, which is through growing great flour, we get permission to do other things.
• 50:10
  SPEAKER_01: And so think about that from a supply chain perspective.
• 50:12
  SPEAKER_01: Like if you screw it up in California, you've got an out, you can go dump that for cheap someplace and go pick up something else that'll work and you eat some margin, but you're out you're out of the woods on it.
• 50:20
  SPEAKER_01: If you're growing something terrible in Florida, not only is your flour terrible, your live resin is terrible, your rosin's terrible, everything you're gonna make, your pre-rolls, those are gonna be terrible too.
• 50:28
  SPEAKER_01: And so it puts a lot of pressure on you at that top end of the supply chain that if you start with fire, then everything can trickle down and be super good.
• 50:36
  SPEAKER_01: If you have problems or you're just a bad grower, then everything trickles down and nothing is good.
• 50:40
  SPEAKER_01: And so I think that's an opportunity, right?
• 50:42
  SPEAKER_01: Also a huge opportunity, but also a huge risk and challenge too.
• 50:47
  SPEAKER_04: 110%.
• 50:49
  SPEAKER_04: It's it's that gives you the space to breathe if you do have a good flour.
• 50:55
  SPEAKER_04: It's like, you know, when you sit down at an Italian restaurant, if they put bread in front of you and it's crummy, you're just like, oh no, what's gonna happen next?
• 51:05
  SPEAKER_04: Um, but I think that like, yeah, if you're if you got good flour, your inputs are good.
• 51:10
  SPEAKER_04: Um, and and then that allows you to have a lot of play space.
• 51:15
  SPEAKER_04: And but you have to have amazing people along the way.
• 51:17
  SPEAKER_04: I mean, it's all everything, everything in the world is about people, but um, I think you have to have people all along the way that are truly dedicated here because it is so hard.
• 51:28
  SPEAKER_04: Don't tell AI that um question if they want to grow weed, like bless bless Claude and Chad, go fly.
• 51:38
  SPEAKER_02: Optimist, optimist plant robots grow weed.
• 51:42
  SPEAKER_02: Um, so one last for me, I'll pass it back to Jesse because um I'm curious about this next session.
• 51:47
  SPEAKER_02: But that particular model in Florida to me seems like it could open up the door for it to consolidate to just a very few players because there's not like retail caps.
• 51:59
  SPEAKER_02: And to your point, like you could actually have like different specialized facilities to make a broader array of certain end market products.
• 52:10
  SPEAKER_02: What do you think of like the landscape of what Florida could look like in the next five years?
• 52:15
  SPEAKER_02: Do you think it'll consolidate further?
• 52:16
  SPEAKER_02: Do you think it's already kind of reaching its consolidation point?
• 52:20
  SPEAKER_02: Like, or is am I wrong on that idea that the way that license structure is is makes it prone to more consolidation?
• 52:28
  SPEAKER_04: Well, so like, okay, so where we are in the consolidation cycle is that paper has been signed to consolidate, but then we have to see what that looks like as assets are digested and also culled.
• 52:40
  SPEAKER_04: So I think that we're about to go through some really interesting shifts as the consolidators make decisions about what they will be keeping and what will be being set free.
• 52:53
  SPEAKER_04: And it creates space for operators that are growing to potentially have uh opportunities in that space.
• 53:02
  SPEAKER_04: So I actually think there's like right now what we've seen is the execution of consolidation, but in terms of documentation, but we're we have to see the execution in terms of what that will look like from a business operations standpoint.
• 53:14
  SPEAKER_04: Um, so I think we're about to go through a really interesting cycle.
• 53:18
  SPEAKER_04: And I do think there will be more papers signed between companies coming down the line.
• 53:23
  SPEAKER_04: Not any that I know of in particular, but just doing an assessment on the market at constantly, I could see how there will be more of that coming for sure.
• 53:34
  SPEAKER_04: Um, so I think, but I don't know where the resting point is because we will see what happens.
• 53:40
  SPEAKER_04: We have a new, we have a governor election coming.
• 53:43
  SPEAKER_04: We have obviously another big election coming, whether or not this will get on the ballot is another thing, and then how long implementation could take.
• 53:52
  SPEAKER_04: Also, I think we're all waiting for to see what happens with the scheduling and the impacts of that.
• 53:58
  SPEAKER_04: I mean, I will just say, as an investor who's been in the industry for over a decade, um, having participated early in the Canadian market and then the US market, and now seeing the Canadian players like names popping up all over the place and all these headlines, and then you know, realizing about the balance sheet activity up there, which has been really interesting.
• 54:20
  SPEAKER_04: There's just the dynamics are so still early stage in this industry, and then there's these big levers of regulatory changes that may occur that could change everything about that all at once.
• 54:35
  SPEAKER_04: So there's like the the Florida microcosm, and then there's the national cosm, and then there's this international situation, which you know it is interesting to think about how Canadian players could play with medical operators, you know, um differently than they could just even five months ago.
• 54:55
  SPEAKER_04: So just really interesting times all the way around.
• 54:59
  unknown: Right.
• 55:00
  SPEAKER_02: Because there's nothing to stop a Canadian company from coming and buying a Florida only company at this point.
• 55:06
  SPEAKER_02: With the a publicly traded, I should say.
• 55:08
  SPEAKER_02: Correct.
• 55:09
  SPEAKER_04: Yeah.
• 55:09
  SPEAKER_04: I mean, New York Stock Exchange would say thumbs up based on what we are seeing.
• 55:16
  SPEAKER_01: So yeah, lots of potential reshaping at the national level.
• 55:22
  SPEAKER_01: You know, Morgan and I were having a conversation offline as we occasionally do the other day, and you know, working through some stuff and you know, just what it is his opinion on something.
• 55:30
  SPEAKER_01: And essentially we were talking about like what does building a national supply chain for cannabis look like.
• 55:36
  SPEAKER_01: And for a long time, Emily, like we thought if you were just to use us, you know, as an easy example, if you were a really skilled California operator and you wanted to get into other states, you would have to punch out cultivation, labs, you know, distribution, whatever your model is in every state and do that a dozen dozen times over.
• 55:52
  SPEAKER_01: We've seen how freaking hard that is.
• 55:54
  SPEAKER_01: I mean, you guys have seen how hard that is.
• 55:56
  SPEAKER_01: It is one thing to say how hard it is, another thing to like live through it and see how hard it is.
• 56:00
  SPEAKER_01: Um, but now that might be shifting, Emily, with this DEA registration, where maybe we can swap products you know through through those rails sooner than we expect it's that's gonna evolve differently market by market.
• 56:13
  SPEAKER_01: But for folks that aren't familiar, can you just give a high-level overview of what this DEA registration is and what specifically what's been happening with some of the Florida folks?
• 56:21
  SPEAKER_04: Yeah, so the DEA put the hammer down and came around Florida for I think the entire month of July.
• 56:28
  SPEAKER_04: So I got a phone call from an agent on July 3rd, and I was like, Yay, I'm so glad you called.
• 56:35
  SPEAKER_04: And the agent was like, I've never heard that before.
• 56:39
  SPEAKER_04: And I was just like, we're so excited to host you.
• 56:42
  SPEAKER_04: We can't wait to have you.
• 56:43
  SPEAKER_04: And I said, What can we do to prepare?
• 56:45
  SPEAKER_04: And she said, Um, well, we we have not been to a facility yet, so we have not decided what that is, but we went through the process, they were incredibly kind and open.
• 56:56
  SPEAKER_04: And um, you know, so we hosted them at our first uh facility.
• 57:00
  SPEAKER_04: They were, they had gone to one retailer that morning before visiting with us, and and then we had them around the state.
• 57:08
  SPEAKER_04: And um, you know, it the way I it's just did not have this on my bingo card when we started Poseidon is like, yeah, like we're gonna be hanging out with the DA, like calling the DA, and like, and um, they just were so cool and very responsive.
• 57:23
  SPEAKER_04: You know, we shared our SOPs with them, they they responded very well to that.
• 57:27
  SPEAKER_04: They actually told me they were building some of their questions around what we were sharing with them.
• 57:33
  SPEAKER_04: But the their primary feedback is is about like the focus is on um divergence.
• 57:39
  SPEAKER_04: And in fact, they pulled agents from the Caribbean into Florida to help, because this is a huge lift for the DEA to physically inspect all of these locations, and then they'll be inspecting these operators going forward.
• 57:52
  SPEAKER_04: So um, you know, the feedback is really positive.
• 57:55
  SPEAKER_04: One of the things one of the agents told me is that so far the cannabis company that I was really proud of the industry for this, but also a testament to how if you can operate in the Department of Health's uh regulatory framework in Florida, you're pretty well set up.
• 58:10
  SPEAKER_04: They said that a lot of our compliance is actually tighter and stricter than some of the pharmaceutical manufacturers, because they they inspect more pharmaceutical manufacturing facilities that have um what's it called, uh, you know, the regulated um products in them.
• 58:27
  SPEAKER_04: So anyway, uh I I thought that was a good coup.
• 58:30
  SPEAKER_04: It's kind of like how we all hear about how our compliance to age verification is so far superior to spirits and vape stores or tobacco stores.
• 58:40
  SPEAKER_04: So, you know, it's good on us to show a good face.
• 58:42
  SPEAKER_04: Um, so got great feedback from them.
• 58:45
  SPEAKER_04: Um, so they're continuing their investigation.
• 58:48
  SPEAKER_04: I know they're investigating facilities now, so that means the manufacturing side of it.
• 58:54
  SPEAKER_04: Um, and then, you know, I know they put forward their feedback for the red the full registration, but that is a requirement in order to be considered a Schedule III medical company is to be registered with the DEA.
• 59:07
  SPEAKER_04: Um, and so I know some of my colleagues at other companies have been doing this in Pennsylvania.
• 59:13
  SPEAKER_04: Uh, I heard that was not as smooth because uh those regulations are not as strict as Florida.
• 59:19
  SPEAKER_04: So I think they just didn't have the SOPs in place that the Floridian operators do.
• 59:24
  SPEAKER_04: Um so just really interesting process all the way around.
• 59:28
  SPEAKER_04: But I mean, in general, it sounded like uh the word came from on high that these inspections needed to start and get done, meaning I think uh kind of the White House, and um, and that it went down from there and that they needed to proceed with this.
• 59:44
  SPEAKER_04: So um I don't it'll be interesting to see what happens with the adult use um aspect.
• 59:49
  SPEAKER_04: And and I would I would anticipate we'll all be under the same level of scrutiny as an as a complete industry um because that's what they're looking for is diversion across the board.
• 1:00:01
  SPEAKER_01: And so why does a Florida operator like Sunburn, for example, want to have a DA DEA license?
• 1:00:06
  SPEAKER_01: And so I asked that in the context of you know, we applied for our licenses back in May with an obvious intent that we have a lot of scale in California, we're getting a heck of a lot bigger, and that's an opportunity for interstate export for the DEA channel to be the rails, rails for that.
• 1:00:21
  SPEAKER_01: But with in Florida, I would assume you're eating most of your own capacity through your stores, you're mandatory vertical, so I don't see us see you bringing your stuff in from other states.
• 1:00:30
  SPEAKER_01: So what does that what does that license do for you?
• 1:00:32
  SPEAKER_04: I think it's optionality.
• 1:00:33
  SPEAKER_04: I think also, you know, just knowing the tax considerations so far around it and wondering what will happen with the back looking 280E um accruals is like a different piece of it.
• 1:00:46
  SPEAKER_04: I think if if to Morgan's point, uh there's a shift in perception around being a true medical, designated as a medical cannabis company registered with the DEA, I think like if credit card companies, if banking reform should come, you know, you just want to be set up to succeed and participate in anything that is kind of deemed available to a company that has taken those steps and kind of gotten that check mark and that blessing.
• 1:01:12
  SPEAKER_04: That's that's my perspective is keep make sure you're setting yourself up for success at all times whenever things should improve for our industry.
• 1:01:20
  SPEAKER_01: So would you be allowed to export from Florida if you did have if you did have more capacity?
• 1:01:27
  SPEAKER_01: Would the laws allow for that?
• 1:01:29
  SPEAKER_04: So I do it federal or state.
• 1:01:34
  SPEAKER_01: Um I guess start with state.
• 1:01:35
  SPEAKER_01: Yeah, I was I guess I was thinking more.
• 1:01:36
  SPEAKER_01: I was thinking more state, yeah.
• 1:01:38
  SPEAKER_04: Yeah, I do not anticipate that the state of Florida will run to allow for importing or exporting of cannabis at this point, just from what I've gathered from the political tea leaves down there.
• 1:01:51
  SPEAKER_04: And now, I mean, I don't know what the we have a pretty hot governor uh race coming and and already in process, I guess.
• 1:01:59
  SPEAKER_04: Um, so we'll see what the attitudes are based on that change.
• 1:02:04
  SPEAKER_04: Um, but currently, and I think this is a very open understanding.
• 1:02:09
  SPEAKER_04: I mean, we had, you know, and truly substantially carried this, is that it had to be a um, oh geez, what's the phrase?
• 1:02:17
  SPEAKER_04: Um, you know, like the legislature wasn't going to push through adult use.
• 1:02:21
  SPEAKER_04: So it had to happen on a ballot initiative that's like a citizens' initiative.
• 1:02:26
  SPEAKER_04: And that's why she had to get all the signatures, which as you know, got um contested and thrown out in this last round, which was an unfortunate turn of events because the AG kind of seemed that's another thing.
• 1:02:38
  SPEAKER_04: The AG was not on board with it.
• 1:02:40
  SPEAKER_04: So there's a lot of headwinds in that kind of aspect of the state of Florida.
• 1:02:45
  SPEAKER_04: So um I don't, it's again the same thing that's I think holding back the wholesaling within the market um on an implementation basis, based on what I was hearing from people who are involved in Tallahassee leading into that election.
• 1:02:59
  SPEAKER_04: So I think it's just the same thing of like, let's hold it as close as we can to keep an eye on it.
• 1:03:07
  SPEAKER_03: Yeah.
• 1:03:08
  SPEAKER_01: Last one for me, Morgan.
• 1:03:09
  SPEAKER_01: Then you can take us home with our final section.
• 1:03:12
  SPEAKER_01: Um, you mentioned a lot of inspections happening in Florida, and my read is some pockets around the country have big kind of hotbeds for inspections.
• 1:03:19
  SPEAKER_01: And it's you think D DA inspection, you think a horror, a horrible thing, but you're actually excited if you know the phone rings in this case and you're you're going you're going to get an inspection.
• 1:03:28
  SPEAKER_01: Have you seen any any licenses issued there, or do you have any opinions around how quickly you could start to see really a wave of those happen?
• 1:03:35
  SPEAKER_01: Because I'm guessing you're going to see first a couple and then maybe a bunch.
• 1:03:39
  SPEAKER_04: Yes.
• 1:03:40
  SPEAKER_04: Yeah, no, of course, um, no inquisitive mind here asked every single person I could ask at the DEA about the timeline, and and the answer was definitely like, not sure.
• 1:03:51
  SPEAKER_04: Um, you know, they were hoping to get the facilities inspected around or by the end of the year.
• 1:03:57
  SPEAKER_04: Uh, and I know they're inspecting some of the facilities in Georgia, is what I'm hearing.
• 1:04:02
  SPEAKER_04: So um I would love it if we are wrapped up within 2026, but we'll see.
• 1:04:07
  SPEAKER_04: I know they've got their hands full, and I I empathize with that because they've got their hands full on the pharmaceutical side.
• 1:04:13
  SPEAKER_04: I mean, this is a lot to manage um for an agency at this point.
• 1:04:18
  SPEAKER_04: Um, so uh I think it's a it's a new, a brave new world, and we're we're doing it together.
• 1:04:25
  SPEAKER_04: So um, but I you know, we'll see.
• 1:04:27
  SPEAKER_04: And again, I think it also matters what happens with this adult use because yesterday what something happened yesterday.
• 1:04:36
  SPEAKER_04: I see I'm so focused on Florida, I was just like, okay, what what happened yesterday?
• 1:04:42
  SPEAKER_04: What the striking down of Sam's uh it was there.
• 1:04:46
  SPEAKER_04: Yeah, yeah.
• 1:04:47
  SPEAKER_04: Okay, that's what I thought.
• 1:04:49
  SPEAKER_04: Okay.
• 1:04:50
  SPEAKER_04: Too bad.
• 1:04:51
  SPEAKER_02: Um, so yeah, just talking about the adult use though in Florida, because I mean that's we're two times going through that.
• 1:05:01
  SPEAKER_02: Um and we'll have to see.
• 1:05:04
  SPEAKER_02: I I think we you know, from my perspective, is like we'll have to see how the DEA responds on following through the judge's recommendation to just consolidate all into one, which should be.
• 1:05:14
  SPEAKER_02: And I know more people would love it.
• 1:05:16
  SPEAKER_02: Descheduled certainly agree, but just this is where we are right now.
• 1:05:19
  SPEAKER_02: But what do you think the prospects are for adult use in Florida?
• 1:05:24
  SPEAKER_02: Is that really predicated by how the next governor is?
• 1:05:28
  SPEAKER_02: Like what what's kind of the thinking around adult use in Florida?
• 1:05:35
  SPEAKER_04: Well, it depends on this the funding to get it on the ballot.
• 1:05:39
  SPEAKER_04: So we start there.
• 1:05:40
  SPEAKER_04: And then the next thing, because that's a heavy lift, and getting those signatures done is huge.
• 1:05:46
  SPEAKER_04: Um so I think that would be a true coalition effort by the industry to get that done.
• 1:05:52
  SPEAKER_04: And I think, but I think the temperature setting of whoever the governor is is going to be critical to that.
• 1:05:57
  SPEAKER_04: Um, I mean, it's really unfortunate.
• 1:06:00
  SPEAKER_04: If I mean the way it cuts, you just this is the way it was meant.
• 1:06:03
  SPEAKER_04: This is where we are.
• 1:06:04
  SPEAKER_04: So there's no point.
• 1:06:05
  SPEAKER_04: But we know what DeSantis did, and it was really unfortunate and gross and yet kind of expected.
• 1:06:12
  SPEAKER_04: Um, I've come to expect not great things from folks like that.
• 1:06:17
  SPEAKER_04: So I think, you know, the challenge is where there are a lot of unknowns between here and there.
• 1:06:24
  SPEAKER_04: Um, but I think so the way from an operator perspective, I think what what do we always know is like operate as though nothing changes.
• 1:06:32
  SPEAKER_04: And then when it does, you'll be set up for success in many, many ways because you operated in the toughest conditions possible.
• 1:06:40
  SPEAKER_04: And then when it gets a little bit easier, you can really thrive.
• 1:06:43
  SPEAKER_04: So um, in the meantime, I mean, I love the medical market in an interesting way.
• 1:06:49
  SPEAKER_04: I love the patients.
• 1:06:50
  SPEAKER_04: I mean, it's a really I spent a lot of time in the retail last year, and you know, I got to interact with a lot of the folks who come in and shop, and I think like it's pretty cool.
• 1:07:01
  SPEAKER_04: People are like really excited to come buy cannabis in the state of Florida, and that's really fun.
• 1:07:05
  SPEAKER_04: Like, I hadn't seen that in California in a while.
• 1:07:08
  SPEAKER_04: I mean, it's I mean, California is so fun.
• 1:07:11
  SPEAKER_04: You get like a basket, you get to shop around, and all the products are in different packaging, and Florida, it's a far different consumer experience because of the requirements, which is great.
• 1:07:21
  SPEAKER_04: But um, it's fun to be in a place where people are so excited to both go and buy cannabis.
• 1:07:26
  SPEAKER_04: So I think there's there's really good things to come no matter what happens on the next election.
• 1:07:30
  SPEAKER_04: Um, but yeah, yeah.
• 1:07:33
  SPEAKER_02: So speculative question.
• 1:07:34
  SPEAKER_02: Do you think operators have learned after the two previous cycles of trying to front run by building capacity?
• 1:07:41
  SPEAKER_02: Do you think they'll see if it happens before actually changing?
• 1:07:45
  SPEAKER_02: Like to your point, is like, you know, play the game as it is today and not try to guess about the change.
• 1:07:52
  SPEAKER_02: Um, or are we gonna potentially, you know, you know what I mean?
• 1:07:55
  SPEAKER_02: Like, is that you think we've learned operators as an aggregate in Florida?
• 1:08:01
  SPEAKER_04: Um mayhaps.
• 1:08:05
  SPEAKER_04: I think some, yes, and some probably no.
• 1:08:08
  SPEAKER_04: But I think some have sophisticated demand planning and and data-driven decision making, and some do not.
• 1:08:14
  SPEAKER_04: So I think that's actually going to be a really interesting way that a competitive market shows operational chops.
• 1:08:22
  SPEAKER_02: So just one more on this uh adult use, because it's like talking about the limitations, obviously, in branding, limitations in form factor, like can't have infused pre-rolls, or it's it's something that you're working on.
• 1:08:34
  SPEAKER_02: But do you think that would just in itself like how much growth are we leaving on the table in Florida?
• 1:08:42
  SPEAKER_02: I mean, talking about the patients as we did earlier, talking about form factors, like is that do you think there's a lot more in Florida?
• 1:08:49
  SPEAKER_04: Yes.
• 1:08:49
  SPEAKER_04: I mean, early the way the market was growing um before the ballot kind of came up and things started to slow down and the market opened, it should have probably been more around 2 million patients by now.
• 1:09:02
  SPEAKER_04: Um that, or at least that's like the project.
• 1:09:04
  SPEAKER_04: It's funny, I went back and was looking at some political projections um from way back at the opening of this market.
• 1:09:11
  SPEAKER_04: And yeah, I think we should have been a double on in terms of patient size.
• 1:09:16
  SPEAKER_04: And that was even before all of the growth due to people moving to the state of Florida.
• 1:09:21
  SPEAKER_04: So I think that it's actually shown, to your point, an an actual even bigger delta in a potential opportunity for that.
• 1:09:30
  SPEAKER_02: So Yeah, I had that two million in my mind too, but then I was like, that's a dated number because of how much Florida's grown.
• 1:09:38
  SPEAKER_02: So like that should be.
• 1:09:40
  SPEAKER_04: So it should have, yeah.
• 1:09:42
  SPEAKER_04: Yes.
• 1:09:43
  SPEAKER_02: Well, this has been very interesting.
• 1:09:45
  SPEAKER_02: I just want to be mindful of time.
• 1:09:46
  SPEAKER_02: So, Jesse, I'll I'll pass it back to you.
• 1:09:49
  SPEAKER_01: I'm honest stuff to say, Morgan.
• 1:09:51
  SPEAKER_01: I think we've said all the smart stuff, but we can say one we can say one more smart thing, which is thank you to FlowHub for making today's show possible.
• 1:09:58
  SPEAKER_01: Rather than give you guys just a canned read, I called Emblem before the show and asked what she loves most about FlowHub across Sunbird's 15 stores.
• 1:10:07
  SPEAKER_01: And she told me, she said, she said that they treat Sunburn like a partner.
• 1:10:11
  SPEAKER_01: They own their own platform and data, and that gives them the freedom to use AI, AI tools like Claude, however they want.
• 1:10:18
  SPEAKER_01: And I think in all of our lives, the ability to integrate data into AI is huge.
• 1:10:22
  SPEAKER_01: And you can do that with FlowHub.
• 1:10:25
  SPEAKER_01: And don't forget, one of my favorite features too, customers can order right through the messages app.
• 1:10:30
  SPEAKER_01: If you're like me, you want to get quick in and out, you don't like using a dispensary, you know, dispensary app, go right through messages and hit them up that way.
• 1:10:38
  SPEAKER_01: So if you are like, you know, Emily over there at Sunburn, you've got 15 doors.
• 1:10:42
  SPEAKER_01: You're like Boris, you've got 100 plus doors.
• 1:10:45
  SPEAKER_01: Maybe you've just got one or two stores, go over to Flowhub.com, schedule a demo today, and see what is possible.
• 1:10:53
  SPEAKER_01: Well, this is fun, powerful sibling duel.
• 1:10:55
  SPEAKER_01: Did you guys have a good time today on the show?
• 1:10:57
  SPEAKER_02: Yeah, I feel like I got to catch up with Emily.
• 1:11:01
  SPEAKER_04: Nice to see you again, dude.
• 1:11:03
  SPEAKER_04: Um Jesse, it's so nice to see you.
• 1:11:06
  SPEAKER_04: I uh I do love your your podcast, you guys.
• 1:11:08
  SPEAKER_04: Thank you for continuing to bring information to the industry while we continue to discover who we're gonna be when we grow up.
• 1:11:17
  SPEAKER_01: That is that is very well said.
• 1:11:18
  SPEAKER_01: We always feel like it's gonna be our year.
• 1:11:20
  SPEAKER_01: And I've kind of accepted that it could be quote unquote our year, like we're having these huge budget reform opportunities.
• 1:11:26
  SPEAKER_01: But I've also accepted like I don't think it's gonna be like the barbarians at barbarians are at the gate and all of a sudden there's gonna be insane interest and you know the stocks are gonna go up, you know, four or five X.
• 1:11:35
  SPEAKER_01: That would be fantastic if that does happen.
• 1:11:37
  SPEAKER_01: But I think there is an opportunity still to have a lot of incremental growth.
• 1:11:40
  SPEAKER_01: You know, we're seeing that in our audience.
• 1:11:42
  SPEAKER_01: I forget the data, Morgan, but I think higher exchanges listeners are up like 38% or something like that year over year.
• 1:11:49
  SPEAKER_01: So besides admitting that we're awesome, it also means that you're seeing maybe some incremental growth, you know, in the industry and a few more eyes on the story.
• 1:11:57
  SPEAKER_01: And I do feel like if we can get Schedule three adult use, and if we can get Emily clarity on those UTPs, that we might start to see some cool stuff happen in the industry.
• 1:12:08
  SPEAKER_01: You said it.
• 1:12:10
  SPEAKER_01: Do you agree?
• 1:12:12
  SPEAKER_04: I do.
• 1:12:13
  unknown: Okay.
• 1:12:13
  SPEAKER_04: Maybe maybe we were just a slow burn all along.
• 1:12:16
  SPEAKER_01: No pun intended.
• 1:12:18
  SPEAKER_04: Yeah.
• 1:12:20
  SPEAKER_01: All right, guys and girls, let's wrap this thing up here.
• 1:12:22
  SPEAKER_01: Thank you, Emily.
• 1:12:23
  SPEAKER_01: Thank you, Morgan.
• 1:12:24
  SPEAKER_01: Thank you all for listening.
• 1:12:25
  SPEAKER_01: We're due to gonna do a quick turn here.
• 1:12:27
  SPEAKER_01: We owe you guys some episodes.
• 1:12:28
  SPEAKER_01: So we're gonna be back on Tuesday for a fun conversation with Grown Rogue.
• 1:12:33
  SPEAKER_01: So thanks for being here, and I hope we'll see you next Tuesday.
• 1:12:36
  SPEAKER_01: The views expressed in this podcast are provided for informational purposes only.
• 1:12:40
  SPEAKER_01: Nothing we said should be considered research nor recommendation.
• 1:12:43
  SPEAKER_01: All investing involves risk.
• 1:12:45
  SPEAKER_01: You're a cannabis investor, you know this, including the loss of principle.
• 1:12:50
  SPEAKER_01: We're out of here.