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Ep.157: Adam Orens, Marijuana Policy Group

Cannabis Economy Podcast
Ep.157: Adam Orens, Marijuana Policy Group

Ep.157: Adam Orens, Marijuana Policy Group

Adam Orens from the Marijuana Policy Group discusses Economic Impact of Marijuana in Colorado.  Adam and I discuss revenue, tax revenue, jobs and truly the overall impact of the cannabis industry on the economy of Colorado.

Transcript:

Speaker 2: Adam orens from the marijuana policy group discusses the economic impact of marijuana in Colorado. Welcome to cannabis economy. I'm your host Seth Adler. Check us out on social with the handle can economy. That's two ends of the word economy. If you're into more direct communication, feel free to send an email to engage. Can Economy Dot com. We'd love your feedback on the show and we're going to start featuring supporters in any minute in July. So A, I dunno, a couple episodes away. Engage@canacademy.com if interested there. Adam and I discussed revenue tax, revenue, jobs, and truly the overall impact of cannabis on the economy of Colorado.

Speaker 1: Okay. All right. So ncia cannabis business summit. That happens to be where we are. Yes. Oakland, California. It's early though. And in this industry, no one's awake yet. Yeah. Adam orens marijuana policy group. Correct. Okay. You know about those wacky marijuana policy project people do similar name. It is to get through to get us through the etymology of the, uh, of the group's nature.

Speaker 3: Uh, so I started the marijuana policy group with a gentleman named miles light who is a research faculty at the University of Colorado. We started the company, uh, to address, uh, um, the lack of research and analysis in a economics and public policy consulting research. Uh, and uh, so, uh, one of our largest clients is the Colorado Marijuana Enforcement Division, uh, and we do a lot of economic and market analytic work for them. And also, uh, we do a lot of work for private businesses across the country. Uh, and so, uh, when uh, legalization happened in Colorado in 2012, we saw this as an opportunity and we started to do work in this

Speaker 1: base. Indeed. So, uh, there are many of us, so we named it the marijuana policy group at the time. There we go. And you've just kept it. Yes. Yeah. Many of us saw the same opportunity. That's why, uh, you know, you've got what thousands of people here that's well attended. Yeah. So in terms of the marijuana enforcement division, right, that's a client. Yeah. So explain how big of a deal that is, I guess.

Speaker 3: Um, well, uh, so the state of Colorado has rules that are put on it by the federal government, uh, in a piece of a document called the Cole memorandum by the Department of Justice that basically outlines the rules that allow recreational marijuana to occur, uh, and it gives them $8 acquirements, uh, and uh, two of which the state of Colorado has to adhere to deal with, uh, issues, right in the heart of my experience, which is economics and uh, they have to manage supply and demand a two. So to minimize diversion and also to reduce the black market. So that's what we help them do is understand a, the market at a deeper level so that they can regulate it effectively and have successful businesses and successful regulations. So as you see it, they are there to enforce the Cole memo. Is, is an essential in, in, in essence?

Speaker 3: Well, that's one part of what they do, but they are, yes. So at this point, if a, any listener is hearing this and hasn't heard episode 1:40, this is somewhat self serving, but really it's for the listener, for the user. If you will, it's firstly safe patient access to information. Go listen to episode 1:40 with Jim Cole. He'll take you through the Cole memo and then come on back and now you're back. Welcome back. So, um, you're working with them. Any other, uh, are you, are you Colorado centric at least for the time being or not really? Not really. Um, we have done a lot of work with a private groups that are going for applications and states for medical marijuana business licenses, uh, of any kind. Um, we've also been involved with, uh, um, people starting up businesses in recreational, other recreational states like Alaska, Washington.

Speaker 3: We do financial modeling for them. We help them understand how to build a business in each state's unique regulatory environment. We've spoken. Yeah, we spoken to a couple folks in, in Alaska. What, what's the latest, do you have any? Uh, well, Alaska might be the first state to allow a social use in a consumption. Yeah, social consumption. So you'll have a new business type that hasn't really been opened in other states, so that would be interesting to see how that happens. But I think that's what's most interesting about Alaska, totally tiny, tiny bit in San Francisco with spark. But, uh, if we can open that up, that'd be great. Uh, demonstrate maybe once again that the sky won't fall. And, uh, so, so getting to the relationship with the mud and you guys are, are now out with a, a, a pretty dynamic report. Uh, and uh, you know, first off, where can folks go see that if, uh, if they're interested, the report will be released probably in about four weeks' time.

Speaker 2: Adam orens from the marijuana policy group discusses the economic impact of marijuana in Colorado. Welcome to cannabis economy. I'm your host Seth Adler. Check us out on social with the handle can economy. That's two ends of the word economy. If you're into more direct communication, feel free to send an email to engage. Can Economy Dot com. We'd love your feedback on the show and we're going to start featuring supporters in any minute in July. So A, I dunno, a couple episodes away. Engage@canacademy.com if interested there. Adam and I discussed revenue tax, revenue, jobs, and truly the overall impact of cannabis on the economy of Colorado.

Speaker 1: Okay. All right. So ncia cannabis business summit. That happens to be where we are. Yes. Oakland, California. It's early though. And in this industry, no one's awake yet. Yeah. Adam orens marijuana policy group. Correct. Okay. You know about those wacky marijuana policy project people do similar name. It is to get through to get us through the etymology of the, uh, of the group's nature.

Speaker 3: Uh, so I started the marijuana policy group with a gentleman named miles light who is a research faculty at the University of Colorado. We started the company, uh, to address, uh, um, the lack of research and analysis in a economics and public policy consulting research. Uh, and uh, so, uh, one of our largest clients is the Colorado Marijuana Enforcement Division, uh, and we do a lot of economic and market analytic work for them. And also, uh, we do a lot of work for private businesses across the country. Uh, and so, uh, when uh, legalization happened in Colorado in 2012, we saw this as an opportunity and we started to do work in this

Speaker 1: base. Indeed. So, uh, there are many of us, so we named it the marijuana policy group at the time. There we go. And you've just kept it. Yes. Yeah. Many of us saw the same opportunity. That's why, uh, you know, you've got what thousands of people here that's well attended. Yeah. So in terms of the marijuana enforcement division, right, that's a client. Yeah. So explain how big of a deal that is, I guess.

Speaker 3: Um, well, uh, so the state of Colorado has rules that are put on it by the federal government, uh, in a piece of a document called the Cole memorandum by the Department of Justice that basically outlines the rules that allow recreational marijuana to occur, uh, and it gives them $8 acquirements, uh, and uh, two of which the state of Colorado has to adhere to deal with, uh, issues, right in the heart of my experience, which is economics and uh, they have to manage supply and demand a two. So to minimize diversion and also to reduce the black market. So that's what we help them do is understand a, the market at a deeper level so that they can regulate it effectively and have successful businesses and successful regulations. So as you see it, they are there to enforce the Cole memo. Is, is an essential in, in, in essence?

Speaker 3: Well, that's one part of what they do, but they are, yes. So at this point, if a, any listener is hearing this and hasn't heard episode 1:40, this is somewhat self serving, but really it's for the listener, for the user. If you will, it's firstly safe patient access to information. Go listen to episode 1:40 with Jim Cole. He'll take you through the Cole memo and then come on back and now you're back. Welcome back. So, um, you're working with them. Any other, uh, are you, are you Colorado centric at least for the time being or not really? Not really. Um, we have done a lot of work with a private groups that are going for applications and states for medical marijuana business licenses, uh, of any kind. Um, we've also been involved with, uh, um, people starting up businesses in recreational, other recreational states like Alaska, Washington.

Speaker 3: We do financial modeling for them. We help them understand how to build a business in each state's unique regulatory environment. We've spoken. Yeah, we spoken to a couple folks in, in Alaska. What, what's the latest, do you have any? Uh, well, Alaska might be the first state to allow a social use in a consumption. Yeah, social consumption. So you'll have a new business type that hasn't really been opened in other states, so that would be interesting to see how that happens. But I think that's what's most interesting about Alaska, totally tiny, tiny bit in San Francisco with spark. But, uh, if we can open that up, that'd be great. Uh, demonstrate maybe once again that the sky won't fall. And, uh, so, so getting to the relationship with the mud and you guys are, are now out with a, a, a pretty dynamic report. Uh, and uh, you know, first off, where can folks go see that if, uh, if they're interested, the report will be released probably in about four weeks' time.

Speaker 3: It's already released, I promise. Uh, well, we, uh, we've, we've got an advanced copy to seth here, but we will be releasing it a widespread, uh, from our website. You can download it, uh, and that's www.mjpolicygroup.com. And, uh, it will be out probably in about a month and we'll have a download link on the website. Okay. So now let's go through the broad strokes of the things that people love to hear, like a billion dollars plus of revenue, right? So, uh, the report, uh, we, uh, have not done for any client. Uh, we've, we've done it to demonstrate into, uh, you know, the magnitude of the economic impact of the industry because we felt that the industry isn't really talking about themselves in some of the terms that they should be about how many jobs they create, about how much economic activity is created in other industries, in other industry sectors, by the presence of the marijuana industry.

Speaker 3: Um, so we did a study of it for Colorado that we, uh, financed to start to move the conversation that way. Um, and then we're looking to make it available for sale, uh, for, uh, folks in other states that might be considering legalization. I see how it goes. Okay, fair enough. Fantastic. A thank you for the advanced copy then. Sure. Here's what I noticed. Um, you know, well, first off they don't talk about it folks in the industry because they're too damn busy working one foot in front of the other. That's it. But, uh, over a billion dollars of revenue in, in Colorado, how many jobs? Uh, right now we're looking at, uh, somewhere in the neighborhood. I have a 15, 20,000 jobs created total. Uh, and uh, these include ancillary jobs, so people that might work at security companies or law firms, uh, and then it also includes the employment created by the spending of folks in the marijuana industry.

Speaker 3: So it employs a lot of people directly in those people buy groceries and cars and uh, you know, spread it out and putting in the 14, 15,000, you're not including the grocery store clerks that does include some of that. This is how it is a traditional economic impact study that most other industry groups use and have in quantify for themselves. So, um, it's the first time that we can start talking about the marijuana industry on those terms. Got It. Because we have an influx of x, Y, and z dispensary businesses. And in Aurora we can see that, you know, x, a grocery store chain had to hire x percent more people, right? It works, it traces the linkages and the economy. And we, we, we made three new sectors of the economy for, to, to input into the, uh, the collar of the broader Colorado. And so we have marijuana cultivation, a extraction in retail, and we can all see how they, uh, work with other sectors, these sic codes or a z codes, right? Yeah, yeah. And A, I see. Yeah, that's right. All right. So, um,

Speaker 1: so here we are. We're in an industry that is actually a pumping money into significant money into the, uh, you know, into the economy, obviously building a significant jobs. What else did you notice from the study? Um,

Speaker 3: well, uh, one of the more interesting things, uh, is that due to the unique regulatory structure, each state is kind of its own silo and, and all, all, uh, uh, all of the economic activity related to cannabis or the vast majority of it has to occur inside that silo in there. You know, we can't be trading across state lines. And so that's actually part of the Cole memo. Yes, that's right. That's right. And so, um, what you have is the, what's called the multiplier effect is a lot higher in cannabis than in other industries. So more money. I guess another way that we made, another way to phrase it is cannabis is the ultimate form of buying local, I guess you can say wow. So, um, because you have to do well, right? And the whole supply chain is, is in one, one area in one state, and also a up until recently, um, although they're getting relaxed, uh, ownership requirements are, uh, also what we're required to be in one state as well.

Speaker 3: So I'll give you a little example to better explain this. If you buy a, say a cup of starbucks coffee, uh, you, you know, you, you give your money there, but some of that money goes to the starbucks corporation which is located elsewhere. And its stockholders in there, you know, they got their being sourced from a, you know, out of the country, somewhere in some money ends up there from your three, $5, $10, whatever. So, but with cannabis, that's not the case, right? Because all of those intermediate purchases of a kind of supplies to make, uh, your, your gram of flower that you buy or your vapor, a vaporizer cartridge, that oil had to come from the same state where it was sold. Uh, it's a owners likely reside in that state, uh, and that income stays local and is spent then spent locally. Um, and so your multiplier effects are higher than probably about 90 percent of other industries. Uh, and so, um, when Colorado, the state of Colorado reported that a billion dollars of cannabis was sold 996 million, I think, um, our, uh, economic impact model said that really created more than two point $4,000,000,000 of economic activity and the multiplier effect was quite large. Uh, and that's, that, that's that extra additional on that, that spending of 1 billion was worth to a, almost two and a half.

Speaker 1: So if I'm a governor, if I'm a senator, if I'm a congressmen, this is actually, you could argue the best or at least one of the best industries for my locality because everything stays within my borders, right? By definition must, right, right. Yeah, that's more than any other industry and I mean, I, I, my point in, in making this for Colorado is to start the, I mean, the industry's got a great story in that regard. Yeah, totally. No, it's amazing. It's the ultimate, uh, farm to fork as far as apples, I guess farm to Toke if you're talking about flower, right? Um, what, uh, what other kind of key findings, because this is really, these are great talking points. Uh, uh, I, before reading it had never conceived or considered the fact that, you know, by definition the state's borders are the walls that uh, the economy stays within and that multiplies it, you know, a much higher than, than any competitive industry. I had never conceived that before. I've certainly thrown around the, this much in revenue and this much in tax. Let's talk about tax a tax revenue to the state. Yeah. Yeah.

Speaker 3: So I'm a, I don't know the exact number offhand, but I think, you know, we, we made a what over a nearly $100, million in taxes. What's at least that certainly. And so, um, you know, what, what's not counted in that and, and this, we did not count in the first, uh, iteration of this model, but, uh, is the, uh, there's also additional taxes associated with the multiplier activity, business taxes. So the tax story is only part of the story. It's actually much more, uh, or more than what

Speaker 1: didn't get into it. What do you mean? What are your.

Speaker 3: Oh, uh, um, uh, let's just say, let's call it a $100,000,000 for the sake of discussion, but, you know, because of, uh, if, if a, a billion dollars were sold and, and we got a that much tax revenue, uh, then, uh, given that there's actually more like two point 4 billion of economic activity and also has its associated tax revenue that goes with it. Um, and so that's, that's, uh, we, we could quantify maybe in a future iteration because again, let's go to Aurora with that same grocery store clerk. Um, you know, everything that he or she is doing right is there's healthier sales tax, right? And so the people go spend money on, um, all kinds of taxable goods, and then there's also income tax, corporate taxes, all that stuff would get counted. Um, whereas here too, for he or she was potentially unemployed. So now not only is she on a ploy or he unemployed in the workforce, employed at the grocery store, paying income tax.

Speaker 3: Yeah, I mean, it, it, it further says that this is a productive economic sector. It's a productive industry for many facets of society. And, uh, I think that's part of part of the benefits that one would weigh against the negatives that come along with a legalization both in your report. What did you find? What are the negatives? Um, you know, we didn't really focus on the negative. We really focused on the economic impacts, the jobs and the multipliers and the associated economic activity. That was the purpose of this. Sure. You know, a negative affects economic wise. Um, you know, one of the only ones I really hear is that things have gotten expensive real estate wise and in, uh, Denver. Um, but you know, if we're going to strictly talk economics, I don't really feel that there's that much of a story yet, but, you know, that remains to be seen a lot of these questions about what's this worth it or did you know, was this a good idea?

Speaker 3: I don't think they can really be answered quite yet. We're still at the beginning, right? Uh, we're at the beginning. What, why are you doing this, Adam? You know, you could be doing something that's so much easier for you to do, I would imagine, right? You're talking about being in the cannabis industry and were working in this. I'm sure you saw the opportunity, but now you know, it's uh, it's difficult, right? Yeah, I think, uh, it is difficult in A. I mean, every state is different and every market's different. So a lot of, a lot of, basically everything we do is, uh, we have a handmade approach to, to that when, when we do our work, um, and uh, you know, that is part of it. Uh, I think being on the forefront of this and, and being able to contribute in, in a substantial way, um, so quickly has been a fun for me to experience.

Speaker 3: I mean, I, uh, I do enjoy also being able to, um, you know, help shape and form the regulatory discussion in Colorado that's been great as well. And then I'm getting to meet and work with such a, a kind of inspired and driven individuals, uh, with some of the clients I have around the country has just been a, uh, you know, it takes a certain kind of person to enter this industry and, and uh, it's been, uh, a good experience doing work with them well as certain kind of person. So let's, let's go back. Where were you from originally? I'm from the Great State of New Jersey. I wait, you know, being a New Yorker, I've heard of it where New Jersey for what exit would ask you, right? Uh, I'm from north, northeastern, New Jersey, a town called Ridgewood, New Jersey. It's very nice in Ridgewood. Yeah. As I remember, it's been awhile since I've been there.

Speaker 3: What'd you get out in? 2,000, uh, when I was about 21 years old, I moved to Colorado. How come, uh, to, uh, work in ski resorts to lead a lifestyle which I did for a couple of years before I went back to school and finished school in Colorado. And, uh, what, uh, were you studying so that you came out this professional watch? So, uh, I, I, uh, I did my undergraduate at Rutgers University have studied economics scarlet, yes, in New Jersey a go knights and uh, um, and then I studied natural resource in agricultural economics at Colorado State University for my masters degree. Yeah, it did, it did. Uh, and you know, uh, I've 10 years' experience doing a, uh, economic and public policy consulting as well as, uh, working for, uh, individuals in the land development industry. Um, and so, uh, uh, I've always worked, I guess in my experience, uh, in between government and business in regulated industry.

Speaker 3: So it was an easy pivot into cannabis when I saw it as an opportunity for cannabis. Talk about your experience of, you know, existing in that middle ground between business and government. Um, you know, we, we do our work on a fee for higher basis and so, you know, we, we were, uh, I always felt that when I had a project for, you know, a state or a city, um, it would, it would help my work when I went to work for a large landowner or someone that wanted to open up a business in a certain location. Um, and then vice versa, what I knew more about, um, you know, how people built businesses, um, I built two businesses of my own and, uh, knowing that, uh, regulators and the public sector folks really appreciate that viewpoint when you can tell somebody, look, I know what it's like to, to be trying to open a business and, you know, this policy will work in that policy, will not work. Um, they, they appreciate that practical view. Um, and then the, the, uh, folks in the private sector appreciate, you know, understanding the mind of a regulator, I guess. Uh, and so, um, it's, it's worked for me. Uh, and uh, I, it's served me well doing work in cannabis.

Speaker 1: You're, you're, you're bilingual, you're able to translate to public to private, I guess. Sure. Well, that's, I mean, it sounds like that's what you're, you know, if I've got this, you know, business owner and, and, and, you know, we're hammering the door, the regulators and the why does it have to be this way. And what Adam can do is say, listen, when, when they're knocking at the door and they're shouting, here's what they're saying. And then the regulator can say, oh, I hadn't, I hadn't thought of that. Right. And then likewise, back to the, uh, back to the business owner, right. Then you get into cannabis and, uh, and we're in the process of writing the rest of that history, I guess. Sure, yeah. You, um, you know, as far as, uh, as far as, you know, med and, and, uh, the other work that you're doing, uh, you know, on behalf of others and in other states as we make our way into the second half of 2016, um, what do you see, you know, in your economist mind, what are you noticing? What are the big picture things that you're noticing? And I'll speak

Speaker 3: mainly about Colorado, but, uh, you know, it's a car, I think that's the furthest, the most mature market at the moment. Um, so, uh, we're, we're actually hard at work on our second engagement or a, it's our third engagement actually, but our update of our original market demand, market size and demand report of 2014. So, but this time we'll be mining in using a metric, the government seed to sale tracking data. Uh, and this will be the most data rich report coming out. This is a separate report from the economic impact when we were speaking about before. Um, and this will be down to the plant, uh, this will be this one. We'll be looking a right and this one will, we'll be using a lot of information that was not available to us in 2014. Now it will be released probably over the next month or two by the marijuana enforcement division. So in doing some of that where, um, you know, uh, we've, we've been able to observe a few things that I can share. Um, so, uh, you know, just a few surprising ones or one

Speaker 1: is on the edge of their seats right now. Surprising ones, I can't wait. Well, I was surprised that,

Speaker 3: uh, how much the medical market as still persisted. Right? And it's still about 40 percent of all the sales in Colorado is medical

Speaker 1: that's under. He's speaking about talking points that aren't used. That is certainly one of them, right? I mean, that's damn near 50 percent right now. So there's still

Speaker 3: so lot of the, of activity in Colorado going on in the medical market.

Speaker 1: Another is, uh, you know, there's a lot of consolidation in Colorado

Speaker 3: and I think, um, you know, a lot of, uh, from what we hear, a lot of the smaller shops that have closed or sold, they often cite that it's a very expensive business to be in. The regulatory costs are really high. Um, uh, you know, the operating environment, it takes a lot of effort and time and expense. Uh, and so, um, we are seeing consolidation in often compliance costs and regulatory costs are cited as the reason why I'm. So that was another one. Um, you're not surprised by that though, are you? Or are you surprised that it's happening this quickly? Yeah, I, I, the speed I guess is what I consolidation. I'm not surprised in the longterm, but, you know, there were, there were a lot of small operators if you're going back to 2011 and the, when it was medical only and then even into 2014 and um, you know, it's uh, uh, I guess I, it's only a year after or two years, two years later that for years, right.

Speaker 3: There's a lot of consolidation happening. Um, so I think we just over twofold, right? So I think we'll be a sharing some of that. Um, and then, you know, we've seen prices come down quite a bit that that's a, you know, that that signals that it's regulated market is, is working, right. Then more people are participating in it. I'm the Qa, there's competition, the price is being driven downward. That will only lead to more people, uh, participating in the regulated market. So that's encouraging to see. Um, also another interesting thing, we were able to see a differentials in prices in tourist areas of Colorado. So in the ski resort areas, we're seeing premiums on recreational prices of over 30 percent higher than like in Denver. Uh, I would, uh, just that's also a luxury market. So yes, it's recreational, but also it's a luxury market.

Speaker 3: The prices would be higher there no matter what. Well, right, it's across the board, but it's interesting to kind of see how it is, you know, cannabis is no different. And uh, it also just the, how much it's marked up, right? How much we were able to see that 30 percent is pretty high, you know, but, um, I dunno, uh, it also is interesting to see now that we have, Nevada is on a, you know, could a legalized for recreational in the fall. I'm considering listing to see what the tortoise premiums would be in Las Vegas. Well, we've got, I mean, that's an interesting one because they've got to get that passed on the ballot and no, it's not, it's touch and go. Yeah. It's not a, not a done deal by any means. Yeah, sure. All right, so the, all the interesting stuff. So the metric, uh, the, the uh, the down to the product that'll be available in a few months is what we're saying. Yeah. We, it's not really up to, we're going to give a draft to the state, um, probably, uh, in a few weeks here and then they'll release it.

Speaker 1: All that stuff coming out of MPG. Yeah. Yeah. How you refer to when we do the MPG. Alright. Um, so we kinda got into your background, we kind of understand how you are seeing these things. We kind of understand the reports, we kind of understand how you see things going into the future here. Um, do you understanding the pace, you know, um, we talked about the, you know, the immediate future, 2017, 2018, 2019 slash 20 slash 20. How much do you get into kind of prognostications is as far as an economist, you know, hey, in 20, 20 we expect,

Speaker 3: um, you know, I don't do a lot of it because, uh, you know, when I'm reading a projections and things, I, I, I don't really look past the next year or two because I think it's anybody's guess no matter what you're doing. Uh, so, but, you know, I, I that being said, uh, in 20 slash 20, I expect, I expect to see several more states, uh, with, to have legal markets. Um, I think prices will continue to drop until they reach, you know, kind of compliance and business costs plus a certain, you know, margin that's acceptable, but those margins will end up slimming down. Uh, I think in the long run, um, you know, I, I, uh, I don't think it will be in 2020, but I look forward to a day when, you know, it'll, a cannabis can be traded freely across state lines that this could work a little more efficiently.

Speaker 3: Um, I think is where this is going. Um, unless, uh, you know, the flip side of that I hear too is that a, it'll become kind of, each state will be pretty protectionist about their market that they have and uh, um, won't allow for interstate commerce for awhile. Um, but, uh, so yeah, that's another thing, uh, but I don't spend much time trying to make these projections because the, the, the world's changing a little too fast right in front of me. So especially in this industry, more on that. Um, but, uh, yeah, I think that there will be rescheduling pretty soon. They keep talking about it. Yeah. So I, and I think that'll shake things up a bit in, in the industry. Um, and uh, you know, I think that'll allow probably some other players to come in, some more corporate players to come in on the medical research side. So I think that'll be interesting to see what that does. But

Speaker 1: totally, you're, you're kind of talking about it being rescheduled to, to. Yes. Uh, so schedule to, do you have further thoughts on that, the, the, the greater cannabis economy at that point?

Speaker 3: Um, you know, I, I, I think that, um, that will allow some of the Pharma pharmaceutical companies if they want to enter the space more into, uh, you know, their style of research on this planet. Um, so I think that'll, that'll change. Uh, I think, uh, those that have medical dispensary's only in states that are medical only can change that and how it's retailed, how it's sold to me could be retailed and sold through a walgreens. Um, so, um, you know, I think that's a, to those that have small businesses, a dispensing are in retail, I, you know, I think they should be monitoring that situation very closely, although, you know, they would, if I were them, I would say you need to be talking to your, your local Congress people, uh, your state legislators and to have them a preserve or a think about a system that would work to have the small businesses still running

Speaker 1: survive and even thrive. Do you see, you know, uh, the opportunity understanding on the ground the reality that is Colorado. Do you see small dispensary just taking Colorado as the example, um, existing with walgreens? Obviously there'll be shakeup, but do you, do you see a, uh, a market that addresses everyone, you know, personalized and customized to everybody's own? Um, you know, uh, desires. Yeah,

Speaker 3: I mean, I guess to a certain extent, um, in the beginning you would see that I think, uh, you know, it just depends on if they're able to still have competitive prices with the walgreens of the world, but I don't think, uh, you would get the retail experience that you would get a going to walgreens. Um, you know, when people get their prescriptions refilled, they uh, you know, um, they don't really shop around, but you know, you need a, what you would really need for that system to work. Those you need a, you know, the, the pharmacy system on referring to is uh, you know, the doctors would have to get into really prescribing cannabis products, right? And to, to add pharmacy and then you go and pick it up. So,

Speaker 1: and then probably way off at the end. Right? Exactly. And the pharmacists would actually have to understand what a, they were dispensing, if you will. And so that really, for me, gets to the value proposition of what the dispensary and the bud tender is, that relationship that's created and the very personal medicine that's a, we don't want to say prescribed, but at least a recommend. Right, exactly. So I do, I agree with you that we're a long way off of, you know, just cannabis at walgreens even if they rescheduled to two tomorrow. Right? I do, I stink. I

Speaker 3: think there's always gonna be those that want a flower. And I don't really have a system in my mind that I can see a pharmacist dispensing flower. You know, what we are seeing in Colorado is that in the medical market, a flower is still about 70 percent of sales in medical and in rack it's only about 60 some percent, about 62. So, you know, I'm still seeing, I mean, medical patients want their flower and uh, you know, there, I think a dispensary environment at least is I bet what's preferred by them. So this is a good final point. By the way, 70 percent of medical sells you the economist find his flower. Yeah. Uh, no one would believe you based on what is shared anecdotally, uh, everyone, uh, uh, that I talked to an edible sales are through the roof. A 70 percent flower in medical.

Speaker 3: What about in a wreck? What was your adult for a flower was about 60 to 62 percent of sales. So why are you, why are you making that a, because it's not by, by quantity or weight or milligrams of thc or another way to measure it by, of sales or of transactions. So if I buy a $100 worth of cannabis, right? Sixty two percent of it is flour, right? For every hundred dollars you have cannabis sold, right? Sixty two. So that's still more than edibles. Edibles was edibles was somewhere. I mean, if we can, you can think of it as a, you know, uh, over half is flower and then the remaining portion is split evenly between concentrates and edibles, right? Um, and uh, um, so, but those edibles and concentrates are the fastest growing, uh, concentrates, especially as the faster growing segment. When do you expect them to overtake flower?

Speaker 3: On the adult use side or I'm in, I don't know how far. I don't know. I don't know if I, I don't really expect them, uh, to anytime soon. But, you know, I, you to not very, not very soon. I don't. I don't think so. Interesting. Um, but, you know, I, I think it'll take a while, but, um, uh, due to the growth rate that you can see, uh, do think that, uh, you know, I can imagine a day when that, when that happens, but I don't think it's going to be anytime soon. Interesting. Anytime soon. So it's not happening this week. No. Right. A three final questions. All right. I'll tell you what they are and then I'll ask you them in order. What has most surprised you in cannabis? What has most surprised you in life and on the soundtrack of your life named one track one song. Those are the three questions we'll ask you them in order now. What has most surprised you in cannabis?

Speaker 3: I guess just how fast it moves, uh, how things change so quickly. Uh, and, uh, you know, uh, also those of you as an economist, what do you mean by that? It pinpoint what you're saying as far as pace. Uh, I'm talking about right regulations, uh, you know, one can wake up tomorrow in the, is completely different as far as how business is done. This is what you have to stamp on your product. This is how you have to package your product. That stuff is some of that. And then also, you know, the edibles issue I guess is what really crystallized this for me, uh, that all of a sudden these businesses had to really change some of their processes and uh, you know, the package, the portion sizing, just, you know, they set a date in the future and after that, I mean, I, I could absolutely see why it was necessary at the time.

Speaker 3: But, uh, it was, it costs a lot of, uh, expense for businesses and it was very difficult for them to, uh, kind of, uh, incorporate some of these requirements. So that, that, to me, it's part of the risk of this business. And part of why this is kind of interesting and exciting, I think to so many people, um, is, uh, you know, that that becomes part of it. But, uh, so that's, that was one of the more surprising things. Also, just the level of professionalism of some people that I've met, um, in some of the operations that I've seen. Um, you know, I definitely think that, uh, I was very surprised the first time I went to and visited a, a, a large scale, a grow operation, uh, uh, back in 2013. Um, and so, you know, those, those in how professionally it was run, uh, and so that was surprising as well.

Speaker 3: Um, so what was question two, question two, what has most surprised you in life? Um, I guess, uh, that, uh, you know, there's, there's opportunity around every corner and uh, you know, I never thought I, you know, I'll try and target it a bit towards cannabis, but, you know, just a sort of experientially, uh, when I first started doing work in this space, I had no idea that it would evolve this quickly as far as you know, projects that we're working on in and how we've been able to kind of grow our, our business here in consulting that I never thought when, when I first kind of waded into this and 2012 that it would end up like this, this quickly. A Pretty Cool Huh?

Speaker 3: Alright. So, uh, on the soundtrack of your life, one track, one song that's got to be on there, you know, I'm an a name, what I have on my phone that plays when I wake up every morning is my alarm clock a and that is a, it's a song by James Brown. Uh, and it's called the boss. I liked that one. Wow, that's a, that's strong. That is a strong effort from you. Uh, I feel like we should put that on right now. I'm uh, yeah. I'm trying to think of the lyrics, you know, is it ain't no cost to be the bond. What's the cost to be the boss? I think it's paid. Paid the costs. Paid the cost to be the boss. That's exactly what it is. Adam. Warren. Thank you so much. Thank you. All right. And there you have Adam orens.

Speaker 2: See, I think that's important work, you know, legitimizing the cannabis industry and all. So thanks to Adam and thanks to you for listening. Very much appreciate your time. We'd love your feedback and engage. Can Academy Dot Com or just keep listening.

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Cannabis Economy is a real-time history of legal cannabis. We chronicle how personal and industry histories have combined to provide our current reality.