Latest / Bloomberg Intelligence / Cannabase's Beck: Growing Online Marijuana Marketplace (Audio)

Transcript

Cannabase's Beck: Growing Online Marijuana Marketplace (Audio) · Bloomberg Intelligence

• 0:03
  Speaker 1: Broadcasting live to New York, Bloomberg eleven Glo to Washington,
• 0:08
  Speaker 1: d C, Bloomberg to Boston, BLUEMBERG twelve hundreds to San Francisco,
• 0:13
  Speaker 1: Bloomberg nine to the country. See when he set jam
• 0:16
  Speaker 1: General one nine team and around the globe the Bloomberg
• 0:19
  Speaker 1: Radio plus Zapp and Bloomberg got gone. This is taking stock.
• 0:24
  Speaker 1: Coming up on taking stock. We're going to take stock
• 0:26
  Speaker 1: of the legal marijuana industry, estimated to be worth about
• 0:29
  Speaker 1: seven billion dollars, growing between twenty and twenty five percent
• 0:34
  Speaker 1: a year. We're gonna be speaking with the co founder
• 0:36
  Speaker 1: managing director of Cannabase. This is an online whostsale marijuana marketplace.
• 0:41
  Speaker 1: We've got details right now. Let's get details about business
• 0:44
  Speaker 1: news from Catherine Cowdery in the Bloomberg newsroom. Thank you, Pam.
• 0:48
  Speaker 1: The stock market retreating from an all time highs as
• 0:50
  Speaker 1: a new report showed weak retail spending and producer prices.
• 0:54
  Speaker 1: That report showed sales at US retailers were little change
• 0:57
  Speaker 1: in July's Americans flock to auto dealers at the expense
• 1:00
  Speaker 1: of other merchants. Ken Perkins, president of Retail Metrics, calls
• 1:03
  Speaker 1: the report disappointing. Especially for brick and mortar stores, as
• 1:07
  Speaker 1: more sales go online, and there's clearly a structural shift
• 1:10
  Speaker 1: in the way people shop, how they're shopping, when they're shopping,
• 1:13
  Speaker 1: and I think that's gonna unfold here and more so
• 1:16
  Speaker 1: than ever in the back to school shopping season. You know,
• 1:18
  Speaker 1: there isn't gonna be this rush that we've seen in
• 1:20
  Speaker 1: previous years and decades as a built up you know,
• 1:23
  Speaker 1: I think you can shop mobile on your phone at
• 1:25
  Speaker 1: any time, any place and have it delivered same day,
• 1:27
  Speaker 1: within an hour in some instances. I think there's a
• 1:30
  Speaker 1: lot more by now where now hype purchases. We check
• 1:34
  Speaker 1: the markets every fifteen minutes throughout the trading day. Dow
• 1:36
  Speaker 1: Industrial leverage is currently down fifty five points at third
• 1:39
  Speaker 1: over percent trading at eighteen thousand, five hundred fifty eight.
• 1:43
  Speaker 1: Smp F I foundered down four points to tents of
• 1:45
  Speaker 1: a percent one then AzaC is down three points at
• 1:48
  Speaker 1: tenth of a percent at fifty two twenty four. West
• 1:51
  Speaker 1: Texas Intermedy accrude oil of ninety four cents of barrel
• 1:54
  Speaker 1: to point two percent to forty four forty two speckled
• 1:57
  Speaker 1: down seven dollar sixty cents announced to thirteen four D
• 2:00
  Speaker 1: two forty tenure treasury of fifteen thirty seconds with the
• 2:03
  Speaker 1: yield of one point five zero percent. Among today's top
• 2:06
  Speaker 1: business stories, Fox News is unveiling a new senior leadership
• 2:09
  Speaker 1: team and management structure. It's name Fox Television Station CEO
• 2:14
  Speaker 1: Jack Abernathy and Senior Executive Vice president Bill Shrine to
• 2:17
  Speaker 1: serve as co president's effective immediately. In addition, Chief financial
• 2:21
  Speaker 1: Officer Mark Rans will be retiring. Well, Steve Win got
• 2:25
  Speaker 1: fewer tables than he wanted for his Macau casino. He'll
• 2:28
  Speaker 1: be getting one hundred fifty gaming tables for his new
• 2:30
  Speaker 1: four point to billion dollar resort in Macau. It's another
• 2:34
  Speaker 1: signal that Macau is serious about limiting gambling growth. It's
• 2:39
  Speaker 1: two thirty two on Wall Street. Let's get an update
• 2:41
  Speaker 1: of some of the other stories were following today on
• 2:43
  Speaker 1: Bloomberg Radio. Thank you Catherine from the Bloomberg Newsroom. I
• 2:48
  Speaker 1: Nancy lyons the Seka virus continues to spread in Miami.
• 2:52
  Speaker 1: The Florida Department of Health says it has confirmed three
• 2:55
  Speaker 1: more locally acquired cases. Governor Rick Scott says the state
• 3:00
  Speaker 1: is still though a big tourist destination despite Zica. We're
• 3:03
  Speaker 1: gonna announce record tourism members for the second quarter of
• 3:06
  Speaker 1: this afternoon, so um have to keep that up there.
• 3:09
  Speaker 1: We have over one point two main jobs tours. Meanwhile,
• 3:12
  Speaker 1: Puerto Rico says there have been more than nineteen hundred
• 3:15
  Speaker 1: new cases there over the past week and more than
• 3:18
  Speaker 1: ten thousand, six hundred today. Donald Trump's presidential campaign is
• 3:22
  Speaker 1: apparently pulling out of New Jersey. Nathan Hagar reports from
• 3:25
  Speaker 1: our Bloomberg newsroom in Washington. The Republican nominee has reportedly
• 3:30
  Speaker 1: closed his campaign headquarters in New Jersey, home to Governor
• 3:34
  Speaker 1: Chris Christie. Federal election filing show he last paid rent
• 3:37
  Speaker 1: there only about a week after the office opened in May.
• 3:40
  Speaker 1: Several staffers reportedly haven't been paid since June. A New
• 3:44
  Speaker 1: Jersey state senator who supports Trump tells Politico it was
• 3:47
  Speaker 1: the campaign's plan all along to close after New Jersey's
• 3:50
  Speaker 1: June seventh primary, but the office opened after Trump's eventual
• 3:53
  Speaker 1: nomination was a foregone conclusion. Nathan Hagar Bloomberg Radio, Washington,
• 3:59
  Speaker 1: and the New York Army National Guard unit known as
• 4:02
  Speaker 1: the Harlem Hell Fighters, has started two weeks of training
• 4:05
  Speaker 1: ahead of its deployment to Kuwait. About two hundred and
• 4:08
  Speaker 1: fifty soldiers left Westchester County to head to a training
• 4:11
  Speaker 1: facility in Pennsylvania. They'll be deployed to the Persian Gulf
• 4:15
  Speaker 1: this fall after more training in Texas. Global News twenty
• 4:19
  Speaker 1: four hours a day, powered by more than twenty six
• 4:21
  Speaker 1: hundred journalists and analysts and more than a hundred and
• 4:24
  Speaker 1: twenty countries. Nancy Lions, this is Bloomberg. Back to you, Catherine,
• 4:31
  Speaker 1: Thank you. Now, let's get a quick check at the
• 4:33
  Speaker 1: benchmark Stowe Industrial leverage down fifty four points at eighteen thousand,
• 4:36
  Speaker 1: five hundred fifty eight SMP five fundered down four points one,
• 4:41
  Speaker 1: then has to act down three points at fifty two five.
• 4:44
  Speaker 1: And that's a Bloomberg business flash the whole pat and
• 4:56
  Speaker 1: I guess he brings his own music with him wherever
• 4:57
  Speaker 1: he goes. Matt Miller, my co host, filling in for
• 5:01
  Speaker 1: Kathleen Hayes. This is taking stock. I'm pim Fox. The
• 5:04
  Speaker 1: legal marijuana industry is estimated to be worth about seven
• 5:08
  Speaker 1: billion dollars, growing between twenty five percent a year. This
• 5:12
  Speaker 1: despite the current action by the Drug Enforcement Administration rejecting
• 5:17
  Speaker 1: petitions to remove marijuana from its most highly restricted classification
• 5:21
  Speaker 1: of drugs. Here to tell us more about the marijuana
• 5:25
  Speaker 1: industry is Jennifer Beck, the co founder and the managing
• 5:28
  Speaker 1: director of Cannabase. Jennifer, thanks for being with us. Thank
• 5:32
  Speaker 1: you so much for having me. What is Cannabase? How
• 5:35
  Speaker 1: do you describe it to people that are not familiar
• 5:37
  Speaker 1: with the industry? Great, So, Cannabase is the largest and
• 5:42
  Speaker 1: oldest online exchange platform for licensed cannabis businesses. So we're
• 5:46
  Speaker 1: the oldest and largest wholesale platform. UM. The core is
• 5:50
  Speaker 1: our wholesale market where we represent sevent of marijuana licenses
• 5:54
  Speaker 1: in Colorado, and we're a one stop shop for retailers
• 5:57
  Speaker 1: to stock their shelves and allow cultivators to flower or
• 6:00
  Speaker 1: trim to either retailers or extractors. So I can understand.
• 6:05
  Speaker 1: We all know where you can get cannabis legally now,
• 6:10
  Speaker 1: but I wonder where you can grow it. Can you
• 6:12
  Speaker 1: grow it in all the same states that it's legal
• 6:15
  Speaker 1: to buy it? Absolutely so, because interstate commerce actually isn't allowed.
• 6:21
  Speaker 1: You have to grow it in the state that you're
• 6:23
  Speaker 1: going to sell it. Um, and then it's a matter
• 6:25
  Speaker 1: of whether or not that state is vertically integrated. So
• 6:29
  Speaker 1: Colorado's market, our medical market is still vertically integrated, which
• 6:33
  Speaker 1: means that if you have a retail center, you actually
• 6:35
  Speaker 1: have to grow sev of your own products. But hang on,
• 6:38
  Speaker 1: you can't get Does that mean if I go to
• 6:40
  Speaker 1: Colorado to buy marijuana, I can't get anything from Humble County. No?
• 6:44
  Speaker 1: Absolutely not. All of the product has to be grown
• 6:47
  Speaker 1: within Colorado. So our wholesale exchange is a state by
• 6:50
  Speaker 1: state exchange. Now the state by state exchange, tell us
• 6:55
  Speaker 1: how it would actually work. Give us an example. So
• 6:58
  Speaker 1: how it would work is you that either have a
• 7:00
  Speaker 1: cultivation license, a retail license, or an infused product manufacturer
• 7:05
  Speaker 1: license which would allow you make edibles. And then some
• 7:07
  Speaker 1: people have both, um, you know, a combination of the
• 7:10
  Speaker 1: two or the three. Um. Then you go on Cannabase
• 7:13
  Speaker 1: as a cultivator retailer and you would list the product
• 7:16
  Speaker 1: you have available flower trim, extract, oil, candy bars, whatever
• 7:22
  Speaker 1: you're looking to sell. Or as a retailer, you can
• 7:24
  Speaker 1: log on and you can shop products and you can
• 7:26
  Speaker 1: buy it. Help me figure out the margins at these dispensaries. Um.
• 7:33
  Speaker 1: When I was a kid, I mean, we always thought
• 7:35
  Speaker 1: about an eighth as like a thirty dollar purchase. Uh,
• 7:38
  Speaker 1: I guess fifty dollars if you're in New York City.
• 7:41
  Speaker 1: What are we looking at as far as wholesale levels.
• 7:44
  Speaker 1: Wholesale wise, UM, we're seeing that we have two types
• 7:47
  Speaker 1: of markets, medical and recreational. The medical market has actually
• 7:51
  Speaker 1: helped steady. The medical market is still vertically integrated, so
• 7:54
  Speaker 1: you have to have both licenses UM, and you have
• 7:56
  Speaker 1: to be a Red card holder to buy Red card
• 7:59
  Speaker 1: holders buying metal product are going to see around those
• 8:01
  Speaker 1: prices like you're saying thirty bucks, UM, taxes are going
• 8:04
  Speaker 1: to be a bit lower. On the medical side. Recreational
• 8:08
  Speaker 1: vertical integration expired, so now we have stand alone cultivations
• 8:11
  Speaker 1: and stand alone retail centers, which means there's been a
• 8:14
  Speaker 1: real supply gut. We've had a lot of products coming
• 8:17
  Speaker 1: into the market from large standalone grows. So on the
• 8:20
  Speaker 1: recreational side, product has actually become way cheaper. Where says
• 8:24
  Speaker 1: we were seeing about two thousand dollars a pound since
• 8:27
  Speaker 1: recreational came into the market, now it's selling about thousand
• 8:30
  Speaker 1: dollars a pound, So those prices are beginning to impact
• 8:33
  Speaker 1: the consumer. It's becoming cheaper for consumers to buy recreational product.
• 8:37
  Speaker 1: Since taxes on recreational product is slightly higher than medical,
• 8:40
  Speaker 1: that two are starting to even out on the consumer side, Jennifer,
• 8:45
  Speaker 1: how does cannabase make money? So, because we are really
• 8:49
  Speaker 1: not allowed to be too involved and we aren't allowed
• 8:51
  Speaker 1: to buy the product and market up and sell it
• 8:53
  Speaker 1: because it isn't a three cheered system here in Colorado.
• 8:56
  Speaker 1: So Cannabase utilizes an online marketing model where we fell
• 9:00
  Speaker 1: gus on bringing in the most clients, the most engagement,
• 9:03
  Speaker 1: and then we make money off the data that we're
• 9:05
  Speaker 1: aggregating from those users and from marketing tools. We have
• 9:09
  Speaker 1: the most targeted platform for ancillary businesses to come in
• 9:13
  Speaker 1: and actually reach cannabis business decision makers, and we have
• 9:16
  Speaker 1: a full suite of online marketing tools available for them
• 9:18
  Speaker 1: to do so. So, how is the banking end of
• 9:22
  Speaker 1: this working out? I know that for a long time
• 9:24
  Speaker 1: it was very difficult for cannas cannabis businesses um to
• 9:27
  Speaker 1: do banking because banks, even in legal states weren't willing
• 9:30
  Speaker 1: to form those relationships. Has that changed a little bit, Um,
• 9:35
  Speaker 1: It's still very very difficult to get traditional banking. I'd
• 9:38
  Speaker 1: say most dispensaries, UM and cultivators at this point are
• 9:41
  Speaker 1: able to get a checking account, but mostly it's because
• 9:44
  Speaker 1: they'll use an LLC name that isn't related to their
• 9:47
  Speaker 1: cannabis name that they're doing business as UM, so that
• 9:50
  Speaker 1: allow them to get a basic checking account and you
• 9:52
  Speaker 1: have checks, but getting credit cards, loans, traditional financing is
• 9:57
  Speaker 1: still completely out of the question. Now. Can of As
• 10:00
  Speaker 1: was acquired by Helix TCS in July. What is Helix TCS.
• 10:08
  Speaker 1: Helix TCS is a provider of integrated operating environment solutions
• 10:13
  Speaker 1: for cannabis businesses, So the TCS stands for Technology, Compliance
• 10:17
  Speaker 1: and Security. Helix came into the market as a security
• 10:20
  Speaker 1: provider and has grown into the largest security provider in
• 10:23
  Speaker 1: the state UM in the last year, so absolutely explosive growth.
• 10:29
  Speaker 1: And Cannabase has come on board to not only use
• 10:32
  Speaker 1: Helix logistical infrastructure to make our marketplace more powerful, but
• 10:37
  Speaker 1: also to accelerate our own growth. So since we've been
• 10:40
  Speaker 1: here with Helix, we've solidified major partnerships with see the deal,
• 10:43
  Speaker 1: tracking companies and data companies. All right, Jennifer, thanks very much.
• 10:48
  Speaker 1: Jennifer Beck There, co founder and managing director of Cannabase
• 10:52
  Speaker 1: fought by Helix uh In earlier in the summer. You
• 10:54
  Speaker 1: can find out h l i X on the Bloomberg.
• 11:01
  Speaker 1: This Hampton's Commuter Minute is brought to you by land Rover.
• 11:03
  Speaker 1: When towers seem like trees and roads become rivers, the
• 11:06
  Speaker 1: range Rover Evoke is there to guide you through the
• 11:08
  Speaker 1: twists and turns of the urban jungle. Visit your Tristate
• 11:10
  Speaker 1: area Landrover retailer for special offers. Land Rover above and
• 11:14
  Speaker 1: Beyond