Modern WisdomHow Does The Cannabis Industry Work? - Chris Walsh | Modern Wisdom Podcast 333
EVERY SPOKEN WORD
115 min read · 23,365 words- 0:00 – 15:00
It is a stupid…
- CWChris Walsh
It is a stupid situation where you've got 38 state legalizing medical, and then we have 17 with recreational, and you have all these businesses and billions of dollars being generated, but it's federally illegal. It's the dumbest situation I've ever seen-
- CWChris Williamson
(laughs)
- CWChris Walsh
... that we, we can't do anything about it. I mean, it's so, it's so ridiculous.
- CWChris Williamson
(wind blows) Chris Walsh, welcome to the show.
- CWChris Walsh
Thank you for having me on. Excited to talk cannabis.
- CWChris Williamson
(laughs) What is someone with an MBA doing working in the cannabis industry?
- CWChris Walsh
(laughs) Well, I was finishing it, uh, when I got involved back in 2011, and definitely got a lot of questions about what the hell I was doing. Um, I was, I was finishing my MBA and was... had a background in journalism, so I was a business reporter and editor at newspapers in the US and in South Korea. Uh, so what is a person with an MBA doing? You're seeing more and more of people like me come in. But it's, uh, it's a massive business opportunity, and it's, it's in the US, it's in Canada, it's in Europe, it's in South America. It's all over the world now. So, uh, I, I'm in it because first and foremost, it was a fascinating industry that I wanted to be part of. I don't come from the cannabis culture, but from a business perspective, uh, I thought there was, uh, a lot to like here and to helping develop a new industry. And, uh, also, you know, cannabis helps people in a lot of ways. So, it's not like we're making, you know, cups or whatever, you know. Like, we're, we're doing something, we're making a product, we're helping an industry that relies on a product that's actually helping people, and that's important to me personally too. So, uh, a lot of unique aspects about cannabis that lured me into it.
- CWChris Williamson
What makes the cannabis ind- industry so interesting?
- CWChris Walsh
Well, I would say that the rapid speed at which cannabis has gained support all over the place, uh, you know, this was something even when we started, uh, that was really taboo still. And so, this... again, we started in 2011, and even then, it was like, "What is my aunt who's a nun on the East Coast gonna say?" And, "What is my dad, a serious political journalist, gonna say?" Um, and so, you know, what we've seen is that the rapid acceptance of this industry has, has, has been phenomenal, um, way faster than I thought. So, there's just excitement around it. People are embracing it, they're accepting it. It's an industry that has come out of the darkness very quickly. It's existed for a long time, right? But not in a legal fashion. And, uh, and people are interested in it. It's, it's, it's fun, it's cool. And, you know, there's not a lot of industries that offer this level of excitement and opportunity. The people in it are different. There's great people. There's, um, not, uh... there, there's... in some cases, there's not a lot of business sophistication, which is changing. But what... you have this industry crop up, especially here in the US, where, you know, the average everyday person could get involved. Um, and that is changing, you know. But at em- initially, the regulations were really low, the cost to enter was low, and so you had kind of this American dream-type industry where you didn't have to, you know, have 15 years of experience or have started three other companies or have a million dollars in, in funding to get involved. So, a lot o- these are some of the aspects about it. And, um, and just the massive... you know, when you bring this up at a party that you're into, that you're at, um, no one, even over the le- 10 years I've been in it, most people are not like, "Oh, I can't believe you're doing that," or they don't like kind of turn up their nose and walk away. If anything, they're interested. Even if they don't support it, they're just interested. So, for all these reasons, I think it's, it's a really fun, exciting industry. It's challenging though. It's really hard. It's harder than anything I've ever done.
- CWChris Williamson
Why?
- CWChris Walsh
But, uh, it's, um... it changes so quickly, right? And at... first of all, I'll just start with this, it's really difficult to learn the industry because in the US, and this is a microcosm of what we see internationally, including in Europe, every state is handling this differently, and every city is handling it differently. And so, they use different terms and jargon, and they, they view it differently, and there's different regulatory structures. There's no, there's no commonalities. So, you... just to learn about what the heck is going on, and so you feel like you can hold your own in a conversation even at a, at a base level takes a lo- (laughs) it takes a long time. Because just when you think you got it figured out, there's some whole other area of the industry you're like, "Oh, I didn't even know about this." Uh, or it worked that way. And so the, the international industry is that way too, the global industry. You know, um, the UK is handling it different from, you know, Greece, and they're handling it different from Denmark, and all of them are handling it different from Colombia and South America, you know. So, uh, you have to really... it's, it's constantly evolving. It takes a long time to get a handle on it. And, um, and then it changes, and you don't know how it's gonna change. You have no idea how it's gonna change, both in positive, immensely positive ways, and also in, in negative ways that can hurt your business, uh, and... because you don't know what to expect. So, these are the reasons it's challenging. And I'll go back to what I said, uh, a minute ago. The people in the industry now are different, and, um, that's often a very good thing. But if you're used to regular business norms and, and ways of, uh, conducting business, it's different here. So, that takes a while too, to learn. You know, there's a lot of people who, who won't do business unless they know you. It's not like you can come in using all this MBA jargon, right? And sell them on something. They're gonna, you know, smack you and tell you to go away. Um, so there's just a lot of unique aspects of it.
- CWChris Williamson
You once got accused of being an FBI agent at a, an expo at some point because you were the only guy there in a suit and tie.
- CWChris Walsh
Um, s- yes. Very, very close. Uh, when we first started in 2011, I was doing research trying to understand the industry myself, which is much different than it is now. But at the time, it was only legal for medical purposes in Colorado where we were based and in, in, in some other states, still illegal, you know, federally then and now. Um, so there was... a lot of the people who were forming businesses then came from the cannabis culture. They were maybe growing in their basement or, uh, buying and selling on the illicit market. And so, they didn't know if someone was gonna come in. We didn't know what the federal government was gonna do.Even though it was legal in, in the states, it was not, um, from, from the federal government. And they were operating businesses that you could find on c, on the streets. They weren't underground, hidden. And so, I went to an industry trade group. And yes, I, I actually went to the bathroom, and there was a guy in there. And you know, that kind of awkward when two dudes are kind of there going to the bathroom. And he's like, "You know what? You seem, you seem, uh, pretty cool. But, uh, you're not an FBI agent, are you?" And he really felt that. Uh, it wasn't just, uh, in jest because they didn't know if this meeting of professionals in the industry was going to get broken up and they'd be hauled off to jail. That's, that's the situation these people started in.
- CWChris Williamson
Can you explain what on earth is going on when you have something that's legal at the state level but illegal at the federal level? What... Uh, how does that even work?
- CWChris Walsh
(laughs) I... Hey, if anyone can answer that for me, please do because, um, I've been racking my brain to figure it out over all these years. Basically, the government just turns its head away and says, "This is a low enforcement priority." And that's what really changed the industry is, uh, you know, i- in 2011, 2012, there had been crackdowns because the government was going in and raiding dispensaries. Even though they-
- CWChris Williamson
Wha- when you say the government, are they deploying... Is that the FBI?
- CWChris Walsh
Uh, federal agents-
- CWChris Williamson
Right, okay, yeah.
- CWChris Walsh
... in different agencies.
- CWChris Williamson
Yep.
- CWChris Walsh
And they were going in and, and there weren't regulations really around the industry then. The states weren't regulating it. There were just people saying, "Hey, it's legal in my state, so I'm going to open up a dispensary or cultivation operation, and j- I'm just gonna do this until someone says..." So that, it just built from that and expanded, and then there was crackdowns by, um, federal government agents. And, and there was a point where after we started where we almost got out of the industry because we were like, "I, I don't know if this is gonna make it as a real business." Um, eh, but then the federal government basically, um, under Obama said, "Okay, we're gonna look the other way. This is gonna be a lower enforcement priority." They didn't say we were gonna look the other way, but they said, "Look, we got a lot to deal with, so, you know, don't, don't worry about this, especially if there's regulations behind it." That was the key. So all these states started regulating the industry and establishing, you know, this is what you gotta do. You gotta get a license, you gotta operate under these, um, rules and regulations, and you gotta be a legit business. When we started, there were, there were people on the corners, you know, for their dispensary and they'd have a, a big sign with a joint on it. They'd be spinning it around and, and, you know, pointing this way. And e- and you know, you're on major thoroughfares and, and there's kids, and, and, and there were billboards, and that... People didn't like that. Like, the community didn't like that. The lawmakers didn't like that. So you have this move (clears throat) to start, excuse me, regulating the industry. And (clears throat) I'm sorry. And that really started making it more acceptable. And so, to get back to your point, the federal situation, it just developed on its own in all these states. And it eventually reached a critical mass, and there were enough people that supported it, enough people involved, enough money coming in in taxes, and enough startup activity and job growth that it just dominoed and snowballed. And then you had more states legalizing and starting industries, and more... And the federal government really, at one... You know, it got to the point where they couldn't really do anything about it, and so they, they didn't consider it a priority. And with that basically pathway forward by saying, "Hey, we're not gonna... This isn't gonna be a top priority for us," the industry just ballooned. And so, it is this stupid situation where you've got 38, I think we just had the 39th state legalizing medical, and then we have 17 with recreational, plus our, you know, the capital of our nation, Washington DC, has legalized both. And you have all these businesses and billions of dollars being generated, but it's federally illegal. It's, it's a, it's a, it's the dumbest situation I've ever seen-
- CWChris Williamson
(laughs)
- CWChris Walsh
... that we, we can't do anything about (laughs) . I mean, it's so, it's so ridiculous when you step back, and that's where your question was. It's like, "How, how does this even happen?" (laughs)
- CWChris Williamson
Was that the final word from the government? Was the final word from the government, "This isn't a top priority," and there's been no other update since then basically?
- CWChris Walsh
Um, not really. There was a modification of the memo that basically paved the way for the recreational industry that they, that said, if, if it's regulated-
- CWChris Williamson
Mm-hmm.
- CWChris Walsh
... if it's regulated, the adult use, recreational, use it for anything you want, when that started cropping up, you know, the, the government was like, "Okay. Kind of same thing. We're not gonna... As long as the states are overseeing this." Uh, and there were some key guidelines in there. Um, and there's been comments on it along the way. Under the Trump administration, we weren't sure if there was going to be a crackdown. Uh, you know, a traditional longtime conservatives, older generation is usually, you know, against this historically, and has, has come around. But still, especially in Washington DC, there's still a lot of resistance from that group. And so, we didn't know what Trump was going to do. His, his, uh, Jeff Sessions, you know, our top kind of law enforcement official, he, um, it looked like he might crack down, but it never occurred. So there really... It's just this kind of gray area, but what you're seeing is that it's so big, it's so accepted now, 90, over 90% support for medical marijuana legalization across the country, whether you're in the really conservative anti-marijuana states or in the more friendly ones, and recreational marijuana is above 60%. I mean, this is a losing issue in general. So, um, so yeah. I mean, there hasn't really been. We're just kind of... People are just moving forward. And now there's been a lot of moves federally to change the laws, uh, but they kind of, they're working their way through our, our government process and, and the resistance has kind of blocked them. And so, we don't know what's gonna happen. We're in a good position now where there could be federal change because the, you know, the, the centers of power in our government are all controlled right now through next year by the Democrats, and they are, you know, they have been pushing marijuana. So it's become a big topic. They're trying to get bills through. There's still resistance. Uh, it's, it's only a matter of time. It's like is it a year or four years? I don't know. But here's w- I just want to point out that...It's interesting because people look to the US and say, "Oh, this, this marijuana industry, they're the leaders." And in a lot of cases, the US is. They're the biggest, right? And there's a lot of innovation going o- on here. If you ever visit a store, there's all these array of products. And, uh, it's really cool to see. But there's over two dozen other countries that have legalized medical cannabis federally, and some of them have legalized recreational. So, the US is actually way behind from that policy standpoint, and so, um, it's just a weird dynamic all around.
- CWChris Williamson
What do you reckon is going to happen with the UK? Can you imagine the uptight-
- CWChris Walsh
(laughs)
- CWChris Williamson
... Brits over here, gloomy skies, cup of tea, and a, a spliff on a morning?
- 15:00 – 30:00
Tha- that's a great,…
- CWChris Williamson
a beer would be. You know, it, there's no friction at all, as far as I can see. People do it on an afternoon because it's a Saturday and we're watching football, or we're going out for some food, or whatever it might be. And, um, yeah, it's crazy. I wonder, I wonder how much romance is still attributed to it being a drug as opposed to a drink or something that's obviously legalized, because you still have that layer of, um, federal scrupulousness, right? They're, they're looking at what's going on, and you know that there's still an, a tiny little 1% amount, even if you're in the most liberal state in all of America, it's still kind of a bit illegal. If the wrong person at the wrong time saw it, there's still a, a law somewhere that says no. I wonder how much that contributes to kind of the romance still of it being a bit of a counterculture, of it being something that's up and coming.
- CWChris Walsh
Tha- that's a great, uh, observation or, or question. I remember a couple years ago, I know someone who lives in the south, the southern part of the US, a very close, uh, person to me, and he said he came to Colorado, tried out all the, you know, marijuana stores and went to... I, I got him a tour of a grow, and he's like, "This is fantastic." And he had used a long time in his life. Again, I don't come from that background of using heavily, but he did, and he was like a kid in a candy store when he came here. And by the time he left, he said, "You know, I don't know if I want this to come to my state." And I said, "Why? This should be, this should be what you're rooting for. This is your heaven." And he said, "I- i- it just feels like it's going to be like everything else."
- CWChris Williamson
Mm.
- CWChris Walsh
And he... And, and so to your point, there's, there are absolutely... There's, there's resistance in, in numerous ways. So I want to make sure we're clear that, you know, there's, there's people who are against it morally, there's people who think, you know, uh, that are unsure, there's others who think it's going to ruin communities. Um, but there's also this contingent that enjoyed and part of the fun of using cannabis was the counterculture aspect and how you got it and the people you talked to and smoked with and, um, and the type of, of marijuana you were getting, right? Even though this is much higher quality and better and it's packaged nicely and there's all these products, some people say, "I just want that, I just want that really good, you know, bud that I got and I'd roll into a joint from the guy I know." You know, and-
- CWChris Williamson
Yeah, from Johnny Fat Bags on the corner or whatever he's called.
- CWChris Walsh
Yeah, Johnny Fat Bags. There you go. (laughs)
- CWChris Williamson
Yeah.
- CWChris Walsh
(laughs) I like that name.
- CWChris Williamson
(laughs)
- CWChris Walsh
Um, yeah. So, so, uh, you're, you hit, you hit the nail on the head. There are people like that, and there are others who do not like how it's progressed into, um, more of a corporate mentality. And, and that has been needed to push legalization, because the general public doesn't want to see the counterculture aspects of people-
- CWChris Williamson
Punk rockers stood up in front of Congress saying that "We need, we need more dispensaries in our state."
- CWChris Walsh
Yeah, or running sh- stores without regulations, right? That are, there's-
- CWChris Williamson
Yeah.
- CWChris Walsh
... you know, people are afraid to go in or they're, you know, whatever. And so there's definitely people who are saying, "It's gone way too far in the business/corporate direction and we're losing that counterculture element." And, uh, and they are right. They are absolutely right. Now, you can argue whether, whether that's a good thing or not, but the fact of the matter remains is it's happening. And we, uh, the counterculture is actually becoming smaller and smaller a piece as the suits, as the business people come in, uh, and start running this like every other industry. So I'm, I'm concerned about that too, because it needed to move along the spectrum. Didn't need to move all the way this way. Shouldn't be all the way over here. It should be in the middle.And that's what I like about the industry, is it's different. And if it does become like anything else, uh, you know, it's going to lose its allure. And unfortunately, it's going to block out a lot of people for business opportunities, for careers that, uh, you know, that, that might have had an opportunity in the past, um, because then you need a different skill set, and they're going to be looking for, you know, people from the mainstream corporate world. So a lot going on in this industry, uh, a lot of changes, and they're happening quickly.
- CWChris Williamson
It's, it really seems like that, man. It doesn't surprise me either that it's difficult to keep on top of. All of these different moving parts and elements, it was an industry before it was a monetizable industry, or at least on scale. Here's one of the things that I found that was really fascinating. I spent a fair bit of time in LA, uh, over the last five years or so. And going down Hollywood Boulevard, you would see a 150-foot high Ignite poster or some other big marijuana brand poster. And what I realized, or what I thought, what I figured at the time, was that when marijuana became legalized recreationally and you could advertise it as a recreational product, what was essentially happening was that the government or the state was firing the starter pistol for everybody to just decide to press go. Right? You had similar amounts of technology, that people understood the industry, abilities to grow, access to growers, so on and so forth. So what people needed to do was compete based on marketing, because the products, at the end of the day, were all going to be relatively similar. But you had an industry that was ready to go, spinning its wheels as fast as it could, launch control, the button gets hit and everybody goes. So what I noticed was you had Mike Tyson, you had Dan Bilzerian, you had other celebrities and well-known influencers that were getting involved very f- sort of at the, at the figureheads of companies, right? I wondered how much of that was companies just thinking, "Right, what is the fastest way that we can become the ubiquitous name that when you say weed, you say this, Ignite or M- M- Mike Tyson's ranch," or whatever it might be, Tyson Ranch. Um, is that, was that right? Is that what kind of happened? Was it companies just thinking, "Right, we need to capture as much of the culture as possible, therefore who's the biggest, loudest name that we can get? Strap them to the front of this rocket ship, and then when the government says go or when the state says go, we have more clout and we have more eyes on us"?
- CWChris Walsh
Yeah, and I th- I would compare it to traditional business in general, uh, you know, the s- the use of celebrities that resonate with your target customer is widespread, at least in the US, in many, many ways. And it's a tried and true method, uh, that companies use to build a brand and, and to get traction. And so as more, uh, famous people or semi-famous... You know, some of these people were famous, like, 30 years ago, you know, (laughs) and were tied to the cannabis culture, like Cheech & Chong. You know, all of a sudden they're back, back at it. Uh, but they, they felt comfortable attaching their names to this, and then it started to expand. And the companies, yes, to your point, are saying, "How do I, how do I build a brand that's different? What's familiar to my target customer base?" Right? And in a lot of case, is, and a lot of cases, it's people who had... Initially the first couple waves of this were more well-known people who had this cannabis tie, whether they were in movies, whether they smoked personally and, and were open about it, whatever it was. And it's what you've seen more recently is an, um, uh, an iteration of this. And so now companies are getting former federal regulators, former politicians on their boards.
- CWChris Williamson
No way.
- CWChris Walsh
Yeah, the former Speaker of the House, the US House, is a, is on the board of a cannabis company. Um, you also had celebrities that, uh, want, had nothing to do with cannabis. So money talks, right? M- money, money, money talks in this country. And so that has helped bring more people into the fold as it's becoming more normalized. But, you know, we had an event, uh, I think, I believe it was two years ago, one of our business trade shows, and, uh, we had Gene Simmons, the, you know, lead singer of KISS. And, and he, because he was, he was actually signed up as the spokespe- kind of brand ambassador for a cannabis company. He never used drugs in his life, ever. He never even tried cannabis. Uh, but again, money talks. Um, so you've seen another iteration, poli- former politicians high up in, in Washington DC, former state politicians, and other people with brands and with names that aren't associated with cannabis traditionally that have jumped in. And the can- c- companies are. You're, you're absolutely right. They're like, "How can I stand out as I see this progressing down the road and it becomes-"
- CWChris Williamson
Yeah.
- CWChris Walsh
... "more of a bigger national industry? Uh, how am I going to build my brand?" And that's one way they're doing it.
- CWChris Williamson
It's fascinating to look at as an industry, because the barriers to entry are relatively low, as you've said. Even if you want to become fairly sophisticated, it's not going to be as hard to make a range of edibles and vape pens and pre-rolled joints as it is to create an iPhone or a competitor to the iPhone. Also, because this industry is just starting now, there aren't these established players. You know, how many iterations do Apple and Samsung and Huawei have on creating electronics? And you now need to reverse engineer all the shit that they've done for the last God knows how many years. Whereas with this, it's, it really does feel like everyone's kind of going at the same rate. Just how big is the industry?
- CWChris Walsh
Well, and just to address your first point, uh, the, the US is, uh, just like Europe. It's a, it's a tapestry of different, you know, communities and viewpoints and, and so what's the, i- when, when you apply that to the marijuana industry, California's industry is way different than Florida's, and that's way different than Colorado's, and that's way different than New York's emerging industry. And, um, and so in some cases, the reason I bring that up is, in some cases states have tried to keep the barriers low.... and they've tried to say, okay, there's going to be low application fees. Uh, we're going to, you know, have social equity components that help people that might not have the money that have been traditionally marginalized. There's a lot of different ways they're looking into these things. But there, the trend has been that it's getting harder and harder. So those barriers are, yes, not to the level of creating an iPhone, but, um, it's also to the point where you usually, in a lot of states now, have to have a million or two lined up to be able to-
- CWChris Williamson
Just to get started.
- CWChris Walsh
... just to, like, get a license, prove that you have the money to operate an effective business, and then start your operation. So it's, it's-
- CWChris Williamson
Yeah. That's... I mean, that's a barrier to entry, right?
- CWChris Walsh
That's a big one. Uh, and that's where it's changing. But again, other states, it's a lot lower. It just depends on where you're looking. So it's all, it's all over the board.
- CWChris Williamson
Did you watch Murder Mountain?
- CWChris Walsh
I haven't, no.
- CWChris Williamson
Oh, man. You need to watch... (laughs) It's, this is, this is your jam. This is completely about your jam. It's on Netflix. It's a fly-on-the-wall documentary about a bunch of different... Uh, it- it- it- you, you need to watch it. Anyway, and there's, there's-
- CWChris Walsh
I've heard about it. I've just, I've been so busy keeping up with the changes in the cannabis industry, (laughs) I haven't had time to watch things anymore.
- 30:00 – 45:00
Getting people hyped up…
- CWChris Williamson
and a hype man for a DJ. So he's asking everyone, "Yeah, guys, you going to party this weekend?" "Yeah, yeah, yeah." Like, "What are you gonna get?"
- CWChris Walsh
Getting people hyped up and, yeah.
- CWChris Williamson
God, I couldn't believe it. I was like, "This is..." It was mind-blowing. Like, just a crazy experience to go into a place, and that was the waiting room. And then you go into the actual thing, and there's a, a bar set up with, um... I don't know what you call it, where you put resin or concentrate into those special type of bongs. So-
- CWChris Walsh
Mm-hmm.
- CWChris Williamson
And it was... There was a guy doing special blends, like a bartender, essentially, behind this bar. And there's people sat down on these stools. He's like, "So we, uh, we recently have this in. We have our sativa blend, and we've got this, this in." And it's mad. It's so funny.
- CWChris Walsh
Well, and then you go to Vegas, right? Las Vegas, and you want a completely different experience, and you go, you go to one there near the Strip, it's called Planet 13, and that's like a Vegas dispensary. You walk in they've got, like, this LED floor-
- CWChris Williamson
(laughs)
- CWChris Walsh
... and it's like you're walking on water. And then you get in and there is these, these, um, circular drones every hour that come out of the ceiling, and they do this, like, performance, and they just all in s-
- CWChris Williamson
No way.
- CWChris Walsh
... you know, all synchronized. They got lights and, you know, that, that, that's awesome too, and that's what people want when they're in Vegas. That (clears throat) that may or may not work, you know, (laughs) in, uh, Alabama.
- CWChris Williamson
Shit, did you see... I'm pretty certain it was in Vegas, I got... 'Cause I'm on MedMen's, uh, mailing list, and they sent out an email towards the start of last year, before COVID hit, saying, "If you land at..." Is it McCarran? In-
- CWChris Walsh
Uh-huh.
- CWChris Williamson
Yeah. Mc-
- CWChris Walsh
Yeah, airport.
- CWChris Williamson
McCarran Airport. "We will pay your Uber, or we will get a taxi to collect you from the airport to come to MedMen straightaway."
- CWChris Walsh
Absolutely. The, the, the innovation in Vegas on this front is huge, so yes. We have our MJBizCon, our big event there, uh, Industry Trade Show Global, and when we went one year, yeah, MedMen had plastered the... a lot of the taxis with ads. So, the taxis, the cabs were red and they had MedMen.
- CWChris Williamson
No way.
- CWChris Walsh
And that's where it... So, people coming in the airport... You're seeing it all over town, so, you know, you're, you're getting the best and perhaps worst of American branding-
- CWChris Williamson
(laughs)
- CWChris Walsh
... expertise ins- in a, in a city like Vegas, right? It's just in your face, it's there, it's splashy.
- CWChris Williamson
Yeah.
- CWChris Walsh
Some people love it, but it, you know, it works.
- CWChris Williamson
What about scaling out now, then? How much is the cannabis industry worth, sort of to America overall, and then have you got any idea globally?
- CWChris Walsh
Yeah, I mean, i- in the US, we've seen tremendous, tremendous growth since 2011, uh, as I mentioned earlier, 38, 39 states with medical, 18 with recreational, and we have billions of dollars on tap with new markets that are launching, new states that have legalized recently. But in general, you know, w- we ha- we make... we've done our market research on this industry for a decade, and it's really hard to pin down numbers because the government doesn't track it. There's a lot of ways to look at it, but... So, we've honed our methodologies around the way, but by our best estimates, with a wide range, saying this is a more conservative view, this is a more aggressive view, you know, is that, uh, sales were up to 20 billion, $20 billion with a B, in, uh, in retail sales, so that's through dispensary, through recreational marijuana stores last year. And we expect that to grow about 30% this year.
- CWChris Williamson
(laughs)
- CWChris Walsh
Uh, and the growth was mu- much bigger in the past percentage-wise, but now our base is 20 billion, right? So, it's hard to double that. So, 30% growth is massive for any industry. And, you know, that's billions of extra dollars in sales, and, uh, we expect it to double by 2025, 2026, um, and, and could even go higher. Again, we try and take a realistic conservative view. There's a lot of people just throwing out numbers, and they're like, "Look at this," and they make it look all shiny. We try and be careful, um, because we don't want to steer, steer people in the wrong direction. But, you know, put that in perspective, uh, for your UK audience, I don't know how familiar with some of this they are, but we... the, the current size of the industry that we expect this year, um, already is well above the National Football League, the NFL, which is massive here, right? That's... We're all based around the sport in the US. It's already well above that, and that's saying something. And it's actually catching up, and we expect next couple of years, we'll surpass craft beer, and that's another big industry that has really exploded. Craft beer is, is the beer situation in most of Europe, but it's a, you know, 10, 15-year thing here. Everyone used to drink the cheap mass-produced beer. So, that's a big thing. It's, it's actually surpassing elements of the alcohol industry. It's going to surpass the global opioid market soon. So, there's a lot of ways you can, you can, uh, look at this. But regardless, it's a... it's becoming a, a big industry in the US. Is it one of the top 10? No. But it's, it's huge.
- CWChris Williamson
What did COVID do for the cannabis industry? Because I imagine that a year ago or maybe a year and a couple of months ago, everyone in the cannabis industry was squeaky bum time.
- CWChris Walsh
Um, is what we... squeaky bum. I like that. I'm going to have to use that. Um, we... You know, in, in Europe and a lot of other regions, there was, uh, kind of a slowdown. A lot of the legalization efforts there and industries, uh, and programs were kind of in the formation stage or the early stages. So, that kind of went way to the back burner in a lot of other countries, and everything was kind of mo- more or less put on pause. What we saw in the US though was this remarkable situation. It's just, it's remarkable to me. This is one of those changes I mentioned before that was immensely positive that I could have never predicted five, six, seven years ago, and that we had this pandemic that shut down the entire world and almost our entire economy, and one of the few industries, few types of businesses allowed to stay open were medical marijuana dispensaries and, in a lot of cases, recreational marijuana shops. And not every state went this route, but the majority of states that have legalized deemed these businesses essential during a pandemic. I mean, think about that. This was a, a drug I couldn't even talk about or was nervous to talk about publicly 10 years ago and let people know I was in this industry. Uh, and I was worried about, like, searching 'cause we were doing a lot of research, and I was like, "I don't want someone to be tracking my internet and I'm, you know, googling marijuana all the time." And 10 years later, it's deemed an essential business in a global pandemic that has shut down the entire economy. I mean, so is what happened, to answer your question, is that move allowed the industry to thrive. They were allowed to stay open. They, uh... yeah, they had to shut down in those early days in March and April when every- everything was shut down, but they were able to resume sales. And is what you saw is not only did they survive, they thrived.And that's because you had people sitting at home-
- CWChris Williamson
(laughs)
- CWChris Walsh
... and, and the US was giving a lot of money to people-
- 45:00 – 58:36
Have you registered the…
- CWChris Walsh
things, so ... And there's medical parts to it. So I see the, I see the reasons why companies are doing this, but I don't know if it's the right thing. Like, um, uh, you know, is there enough crossover that cannabis companies can, can enter this or do this effectively? I, I don't know. I mean, should this be a healthcare thing? Should this ... You know, is there something else? Um, so the, s- part of me is a little puzzled and I don't know if it's the right route for cannabis to be l- leading this charge, although I understand why. And so, you know, again, identifying what the crossovers are. And so for us, when I talk about, how do you fail, you go in a million different directions, right? "Ooh, psychedelics. Now I'm going here." This is a perfect example. So we as a business and how I try and run MJ Biz, you know, we, we have to figure out, does this fit with what we're trying to do or is this the shiny new object that we go chase? And for our business, are we gonna have an event on it? Are we gonna have a lot of coverage? Are we gonna have a newsletter? Maybe. But this is an example of how you can go down another path that may or may not have to do with what you're doing now. So I don't know where this is going. I think there's potential here. And look, when we started in 2011, as I said, people were like, "What the hell are you doing with marijuana?" Like, "This is crazy." You know, or, "You closet pothead and you're starting this little, you know, magazine." And, uh, and so I, I always catch myself and say, "You can't view things like that." Because I could easily say that about psychedelics now and say, "Really? Okay, mushrooms? Come on." And we used to joke at MJ Biz Daily, we used to say, "Hey, one day we'll have magic mushrooms daily," as a joke, like five years ago. Um, so I don't, I don't know where we're going with that, but, uh, there's a lot to unpack there.
- CWChris Williamson
Have you registered the domains, just in case?
- CWChris Walsh
(laughs) No.
- CWChris Williamson
Get them registered, Chris. Come on. Come on. You know how to hedge your bet. It's 10.99 on GoDaddy or something.
- CWChris Walsh
Right. (laughs) Right, right.
- CWChris Williamson
Get them, get them registered-
- CWChris Walsh
Get them all.
- CWChris Williamson
... once we've finished up on here.
- CWChris Walsh
Yeah.
- CWChris Williamson
I think, I th- uh, the, there does seem to potentially be a, a bit of a difference between the cannabis industry and the potential psychedelics industry in that the potency of the drug and the potential effects are magnified fairly significantly. It's ... The, the difference between having half a spliff and having one to two grams of mushrooms is fairly profound. And I don't think it's the sort of industry ... If it gets to the stage where it's recreational use of magic mushrooms, I would be very, very surprised. I think it would be therapeutic use with guidance, because as anyone that's taken psychedelics knows, set and setting are very important. And if you just let someone wander in, an uninitiate, go into some store somewhere, MedMen's, uh, psychedelics wing, they go into the, the genius bar at the back and they say, "Well, we can try this and you can try this and you can try this," the aftercare that you need with psychedelics is significantly greater than it is with weed. Um, I don't know enough about weeds to know how big of a difference set and setting makes. I imagine it would make a bit of a one, but nowhere near as much. There's a, it's a power law, right? It's, it's a, uh, uh, a real sort of magnifying effect when you do have psychedelics. So I would be surprised if we see it end up being fully recreational. But the therapeutic effects seem to be outstanding, so definitely-
- CWChris Walsh
Well, especially, especially if you can do what they do with, with cannabis now and you can extract the certain elements out of it and, and get to a point where you're not ... you don't have the, you know, um, psychotropic effects, that you're ... it's not affecting you that way, but there are health benefits. So there's a lot on the health side that's, that's exciting to explore. I mean, I agree with you on the recreational side. I can't see that developing like the marijuana industry did.But if you asked me 10 years ago-
- CWChris Williamson
(laughs)
- CWChris Walsh
... if adult-use marijuana-
- CWChris Williamson
I would say never mind.
- CWChris Walsh
... would be legal, and you could walk into a store and see gummies and chocolate bars and bath bombs and, you know, jars of weed, that you could just go in and, and buy it, and then put it on the seat of your car and drive home and not worry about getting arrested, I would've never thought that either.
- CWChris Williamson
What are the craziest iterations or the funniest or most interesting iterations of delivery mechanisms for weed that you've seen?
- CWChris Walsh
Um, (laughs) I, I mean, you know, there's suppositories. That's-
- CWChris Williamson
Is it really?
- CWChris Walsh
Well, that's on the medical side, and it has a medical, uh, uh, pur- purpose. Yeah, um, you know, I, I don't have any really, really good examples, um, myself.
- CWChris Williamson
You can get this... I- I've seen some topical ones, right? There's sort of subdermal things that you rub on your skin, but your skin-
- CWChris Walsh
Yeah.
- CWChris Williamson
... can absorb it, and you can still get some psychotropic effects from that?
- CWChris Walsh
Oh, yeah. T- Um, yeah, topicals are big, that you put on your skin. Uh, they're not huge part of the market, but they're appealing to some people. So that's all out there. You know, there's, there's products out there to enhance your sex life, uh, gels and, and creams and other things that you can-
- CWChris Williamson
I can't do much when I'm high.
- CWChris Walsh
... use your imagination. (laughs)
- CWChris Williamson
When I'm high, I can't do much. I don't want to use it as some sort of-
- CWChris Walsh
(laughs)
- CWChris Williamson
... like, pre, pre-bed warmup routine.
- CWChris Walsh
S- for some people, it works, um, apparently.
- CWChris Williamson
Fair enough.
Episode duration: 58:36
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