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Welcome back to Higher Exchanges, number one independent cannabis investing show, where we break down complex cannabis markets into clear data actually used.
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Just Rit Morgan Pack.
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What is up, guys?
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We're back for you live listeners.
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We are five minutes late.
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I apologize for that.
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I am Jesse Redman, Chief Strategy Investor Relations Officer at Leaf Brands, and I'm back with the smartest cannabis investor I know.
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He's tan, he's grizzled, he's a veteran.
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He's Morgan Paxio.
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Morgan, how are you, man?
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I'm good.
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The tan definitely helps cover up the uh the grizzledness, right?
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So I know I just keep getting more and more grizzled.
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Yeah, no, I'm looking forward to the show today.
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Uh, I was just thinking as we were hearing the intro music, I was like, this today's show feels like uh especially on point.
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Yeah.
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Yeah, the uh rating suggests if you talk about political things and rescheduling, people like to hear about that stuff.
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And sometimes I get sick of it, man, but today it sure is topical.
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And I think we have a perfect guest for it.
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Christian Bax, welcome to the show, senior attorney at the Lockwood Law Firm.
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That sounds like the Ohio State University, but it's called the Lockwood Law Firm.
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Christian, welcome to the show.
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How are you, man?
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I'm doing very well.
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Thanks for having me, guys.
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Yeah, I was thrilled to see you for many reasons.
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One is that you showed up with a microphone.
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You look like you're a podcaster over there.
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Thank you.
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I want to make sure you guys have good, you know, you have good audio for your pod and for your audience.
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It is so helpful.
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Sometimes some of the guests that I love the most, I bang my head against the wall as they stare at their MacBook with bad sound and bad video, and you're showing up on on camera with a microphone.
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So, first step, very good.
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And uh nice to meet nice to meet you, Christian.
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Thank you.
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And so much to cover today.
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We have uh a packed agenda as we usually do, a ton of content.
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But before we jump into it, Morgan Paxia, we talked on the phone earlier this week about AI and cannabis, and we had a fun chat.
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Patrick on your team is doing some cool work over there.
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Before we get into it, do you care to tell me about how it is impacting dispensaries and how FlowHub might be able to help folks?
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You got it.
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Well, AI is changing how cannabis retailers operate.
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FlowHub recently launched FlowHub MCP, a new AI connector that lets you run your dispensary by talking to AI.
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Instead of clicking through reports and navigating your POS, simply tell AI what you want to accomplish using plain language.
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FlowHubMCP gives you the freedom to connect the AI tools you already use, like ChatGPT, Claude, and Gemini, so you can analyze your business, update pricing, move inventory, and create promotions.
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Learn more at Flowhub.com.
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And I can attest that uh that is very real.
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Our team already using it, and it's real cool.
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Nice.
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Yeah, I'll have to look into that more.
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I don't have a dispensary, but always curious what FlowHub is up to.
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And just in general life, man, you know, you and I were talking online about all the different things uh we're using AI for.
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And do you Claude here, do you chat over there, do you do Gemini over here?
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And yeah, it feels uh it feels like we're entering a new era where the more educated you can be, the more productive you can be.
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And yeah, shout out to Patrick Reya on your team.
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I'm excited to uh chat with him and see what he's doing over there.
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I think the ones are the innerbators and on the edge of this, I think there's gonna be a good ROI.
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So yeah, if you're a dispensary, check out FlowHub, see how their AI can integrate and help you out there.
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Yeah.
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I like the dual plug.
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It's a little bit of Flow Hub and a little bit for Patrick with the AI first cannabis um group that he's been doing.
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It's super interesting.
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I mean, just I was just on a board call earlier uh with another group that's gonna be joining in because everyone wants to know what others are doing, how they're using it, how we can learn from each other, because it's just it's it's just total white space.
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It's it's really cool.
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Yeah, and you used the word plug, which I understand why why you use the word plug, but like to me, it's just totally sincere.
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It's like here's where we are in life.
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AI is here.
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You got a dispensary, you wanting some software, with Patrick's thing, the like you know, partially a plug, but just more like how do we all work together in this industry to you know figure things out and get better.
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And I think that rolls well into you know talking about Christian.
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Christian, you seem like you're the perfect guest for the show.
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You know, super excited to talk about the hearings.
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I think that's the biggest thing that's been going on in the cannabis industry for the last few weeks here.
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Um, so it's good to get some inside perspective.
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But before we jump into all those details, Christian, tell me a bit about who you are and uh what you do at the Lockwood Law Firm.
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Sure.
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So I am a uh I'm a Floridian.
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I'm a Floridian attorney.
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I got my start in the industry as uh a regulator in Florida uh back in 2015.
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Um, worked for the state for three years and uh was the director of the OCU, which then became the OMMU.
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Uh left, went into private practice.
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I've worked in the industry for an MSO.
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And then for the last uh about year and a half, I've been with the Lockwood Law Firm.
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Lockwood Law Firm is a Florida regulatory and administrative firm.
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We are um very, very active in the Florida medical marijuana industry.
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Uh, we represent several Florida MMTCs, which are the license type in Florida.
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They're all vertically integrated, they're very large licensees compared to other states.
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Um I do a lot of that work.
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Um that's kind of that obviously that's kind of my bread and butter from where I'm uh my career has gone.
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Um and uh I'm um definitely doing a lot, uh, a lot more than I thought I would be doing last year about like federal work of working on DEA registrations, uh, helping clients kind of prepare or um understand what's happening with the federal government right now.
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And um that kind of led me to go up to that the the hearing that we're gonna talk about today, just kind of covering it and and trying to get as much information from that process as possible.
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Uh you're still digging there, Christian.
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I don't know if your notifications are on our office.
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Yeah, let me um sorry, I'm good.
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You're good, take a second, no stress.
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It's not my phone, it's my iMessages on my computer.
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Are you on a Mac?
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Yeah, I'm on a Mac.
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If you go to that upper right hand corner, maybe click that do not disturb button.
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Don't worry, we'll edit this out.
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I'm just kidding, I've never edited the podcast before.
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We'll do we'll do it live.
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Give you a second thing.
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Yeah, we'll we'll we'll we'll we'll fix it in post.
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Don't worry, man.
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Okay.
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Well, while while he's doing uh while he's getting that sorted out, I mean so Christian got connected to us via Emily because the uh Emily with uh the work she's doing at Sunburn has been doing a lot of work with Christian.
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So um this was a great opportunity to uh meet Christian and hear more about it.
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Um I've obviously heard a lot of great things from Emily and the work that they've done in Florida.
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Um so uh it's good to all be connected here today and uh digging in on this DEA situation.
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Yeah.
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How did you get into the whole cannabis industry, Christian?
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Um I'm one second, I'm trying to I'm trying to still do the do not disturb thing.
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I'm sorry.
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Um I think on the upper right hand corner.
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If you look in the hyper upper right hand corner of your Mac, mine has like a moon you can click that'll make it go into do not disturb.
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Yeah, more than it doesn't have that.
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Um how about if you go to that box?
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How about next to the time in the upper right hand corner?
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Do you see a slider box you can click on?
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Yeah, that has a drop that is a drop-down with do not disturb.
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Yeah, I see it.
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Okay, do not disturb.
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All right, do not disturb is turned on.
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Okay, cool.
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So um how I got into this industry.
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I um so I I actually did a uh a project when I was at um MBA.
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I went to uh a school that was very focused on entrepreneurship.
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And um the first class that they make you take, or one of the first class I make you take take there is called New Venture Creation.
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And so you have to pitch a business idea and then get your your classmates all kind of vote on who they think the best ideas are, and then the top five build the team for the people who weren't in that top five, and then you kind of build out a business on paper.
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Uh at the time, so my family uh does a lot of investing in like commercial agriculture, like Iowa corn farms.
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Uh my mom's from Tuscaloosa, my dad's not a huge fan of uh any kind of drugs, and so I thought, like, well, I may as well do something on paper that I would never do in real life.
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So we built my friends and I built a marijuana company on paper, and this was in 2013, right?
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So I was already uh a barred attorney at that time.
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Um and uh one of the things that my my best friend and I actually encountered was this whole concept of competitive applications for marijuana licensure.
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So being a lawyer, he's kind of a business strategy and ops guy.
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Um we we were kind of at the initial cresting of the competitive application process when people were really starting to think about that process was being professionalized.
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Um, and then I probably made the worst financial decision of my life of instead of just doing that full time, I became a regulator for the state of Florida and graded applications instead of writing them.
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So uh I looked to apply for um a job.
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I sent my resume to the state of Florida because I'm from Tallahassee.
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I wanted to come home from Boston.
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And um I I told some of the guys that I was I was sharing my resume with, hey, like show this around and and you know, feel free to edit at your leisure, like remove the cannabis stuff from it.
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Because this is this governor Scott administration, it's a conservative Republican governor.
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Um, and they were like, actually don't do that.
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There we there there might actually be kind of a something that's up your alley that where this is relevant.
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And I ended up being like employee number two at the Office of Compassionate Youth and became the director, um, which was that was my entree.
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Very cool.
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Well, it sounds like you have a great background for this, Morgan.
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Let's jump into these hearings, but before we get into the nitty-gritty, you want to help us uh set the set the stage here of what we're jumping into.
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Yeah, so what was it over the last two weeks?
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There was uh closed session hearings, right?
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There was no public uh access, so you had to be an attendee to actually hear what was going on.
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And this was, from my understanding, was supposed to be a narrow focus uh discussion for the DEA to, you know, they had a list of witnesses and whatnot that were coming in to talk about um rescheduling of cannabis.
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Um, and and again, supposed supposed to be narrower beyond medical.
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And um, and I honestly have not really kept up with much of the day-to-day because once I knew we were gonna have Christian on, I was like, I'll just get all caught up here today uh with what was actually going on.
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Where did the conversations evolve to?
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Did they get off topic?
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Like what actually happened?
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So um, so Christian, you know, for those like me that have not followed every day or what was available every day, what were the hearings actually designed to accomplish?
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Why don't we start there?
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So the hearing itself was um a hearing on the um notice of proposed rule from the DEA, which would reschedule the entire category of marijuana.
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So, as I'm I'm sure you guys and and probably a lot of your listeners are aware, is that um, you know, several months ago, the attorney general uh by final order rescheduled medical marijuana and basically said if you've already been federally approved, or if you're a licensee operating in a medical marijuana state and you are abiding by those state medical marijuana laws, you are now scheduled three.
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This was the entire category, the entire universe of marijuana.
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Um, are we going to reschedule that?
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And obviously, uh anybody follows this issue, there are people who are opposed to doing that.
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Um and they petitioned for a hearing, and um the DEA made the interesting and kind of unusual decision to exclude uh proponents.
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So the industry was not represented in this hearing.
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Um, people who are advocates for marijuana.
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And I'm going to stick with marijuana because of this particular thing.
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I understand the parlor lines between cannabis and marijuana, but the federal government, it's marijuana.
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And this hearing it's marijuana.
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So it'll just be kind of easier to stick with that, especially kind of comparing my notes.
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So I don't mean to say the wrong term, but I'm being specific with my language.
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Um so what they were basically there to do is, you know, under federal administrative law, it's incumbent upon federal government to uh to defend and support uh their proposed rule, which would reschedule marijuana, uh, against some pretty fervent um opposition from um a pretty diverse group of of uh petitioners.
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Do you and was it a cross-section of industries that these uh opponents were coming from?
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Was this a specific area?
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Just kind of like who who were like the major groups that were there advocating that cannabis should not or marijuana should not be rescheduled.
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So um the first uh uh probably the most obvious is smart approaches to marijuana, Sam, which was probably the most prolific anti-marijuana.
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He's a huge fan of the pod, by the way.
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Yeah.
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That's right.
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So Sam was there.
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Um the uh also there were three opposing states that had joined together.
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So Nebraska, Idaho, and uh Indiana.
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Um Sam and the opposing states actually have the same lawyer.
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So they both use Port and Law, they both use Bill Barr's law firm.
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So they're when they would run around doing at the beginning of the morning, every morning, when people are doing their introductions, the same gentleman would stand up and he was represent.
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Well, he and a couple other lawyers were representing both of those groups.
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Um, Tennessee Bureau of Investigation was also there.
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They are not part of that um group of three states.
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Um now there were also kind of there were there were two specific individuals.
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Um one was a uh physician and one was a uh pharmacist.
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And um they also put they put on witnesses, they made their case.
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The the physician had an attorney, the um pharmacist was pro se, so he represented himself, and he actually uh led a direct um of a of his own witness as well.
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Um then there was a basically a drug testing um company, an advocacy group for um uh basically looking for harsher penalties on marijuana, harsher restrictions on marijuana in order to prevent um intoxicated driving.
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Um so as you can see, like a very kind of wide array of perspectives um on people who would oppose marijuana.
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Do you so if the position of the DEA is only inviting those that are opposed rescheduling, does that mean they have a position on it?
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Or I'm just trying to like get a sense of what were they trying to accomplish and like what were they what what were like some questions that they were looking to discover in this in these hearings?
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So DEA owns this issue now.
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I mean, the DEA has taken the affirmative position that marijuana should be rescheduled.
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So they are not just marijuana.
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What no, yeah.
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So this this hearing, they propose they have proposed by rule to reschedule all of marijuana.
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They have put that out into the universe.
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So unopposed, if nobody said anything and there was no hearing, that would move forward and they would just reschedule marijuana.
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Um, so DEA now owns this issue.
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The reason uh I have I didn't I talked to some of the DEA attorneys.
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I haven't specifically on the record gotten them to say this, but um the the legal reason why they didn't allow industry or advocates in to speak was because they're they're really not affected parties.
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Like they're they're they benefit if the rule goes through.
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And if the rule doesn't go through, well, it's like they were gonna argue it for to for it to go through anyway.
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The people who are affected would be the people they're already in litigation with or the people who are threatening to sue them over uh rescheduling marijuana.
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Um, now the practical reason why they don't want those people in the room, they don't want industry or advocates, is because it's very important for the DEA, uh, and we'll get into what they're specifically asserting um in their case, but they don't want people testifying that marijuana has no harms.
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DEA take the position marijuana should be rescheduled, but DE on marijuana affirmatively has harms.
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That's important because they want marijuana to stay scheduled.
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If if they had people testifying that marijuana doesn't cause harms, has no propensity for abuse or very, very low propensity for abuse.
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It basically should be scheduled similar to alcohol.
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Um it disrupts their case.
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It it kind of muddies the record.
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And so in his opening statement, the lead attorney for DEA said, let me be clear, when we're talking about marijuana, one of the ways it's very important to think about this judge is that um every party you're gonna hear from in this hearing concurs that marijuana has harms.
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So boom, you have now ensured marijuana should be scheduled.
00:18:10.160 --> 00:18:11.200
That's the first step.
00:18:11.440 --> 00:18:17.200
The next step is okay, now marijuana must be removed from schedule one.
00:18:17.440 --> 00:18:22.000
And then schedule three, now we're just debating about which schedule two through five marijuana should be in.
00:18:23.359 --> 00:18:25.119
Huge implications are huge.
00:18:26.480 --> 00:18:27.519
Yeah, very big.
00:18:27.839 --> 00:18:34.640
Um so I mean their affirmative case basically comes down to like three things that they essentially need to probe.
00:18:34.880 --> 00:18:52.160
So, first is that marijuana um based on a two-part test, which they basic basically created to reschedule marijuana, um, that it should not be schedule one, that there is um that there is a medical use for marijuana.
00:18:52.400 --> 00:18:58.240
Uh the second would be that there is a moderate or low um potential for abuse of marijuana.
00:18:58.319 --> 00:19:06.960
And then the third would be that there is some accepted safety, uh, but there is accepted safety for use under medical supervision for uh for marijuana.
00:19:07.039 --> 00:19:19.839
So these are kind of the the overarching three things that when you're making a uh like a debate flow that they're trying to assert that then the opposition is then needs to attack because those are the legal criteria for what they're trying to do with marijuana.
00:19:20.240 --> 00:19:22.000
So one last remain, I'll pass it to Jesse.
00:19:22.160 --> 00:19:29.359
But uh that so I did see you shared some notes from the after day one, and it seems like this was potentially consistent throughout.
00:19:29.599 --> 00:19:35.519
But if this is talking about full rescheduling, medical's already be rescheduled.
00:19:35.839 --> 00:19:56.319
Why was there so much talk about the medical aspect of it instead of just the you know, because to me that still seemed very very much what's already been done instead of and and gave the potential opposition more to try to attack versus you know moving to just full rescheduling.
00:19:56.799 --> 00:19:58.880
Does that make sense when what I'm trying to get at?
00:19:59.200 --> 00:20:00.000
Yeah, it does.
00:20:00.160 --> 00:20:31.200
I mean, I think it's because of the procedural posture of what DEA has chosen to do, and what frankly what FDA uh recommended that they do, which is um, well, so um the way the way federal just taking a quick step back, um, and I'll and then I'll get there, is that the way that this rescheduling process works is FDA uh uh via HHS makes a recommendation to DEA, and that's partially legally binding and partially uh uh like advisory.
00:20:31.359 --> 00:20:43.039
So it's legally binding in the sense that if FDA tells HHS and HHS tells DEA, this this drug or uh or compound should not be scheduled, DEA doesn't have the authority now to schedule it.
00:20:43.519 --> 00:20:54.400
Um but if they say it should be scheduled, DEA has a decision of like how it where based on FDA's advice, where it should be scheduled or where it should be rescheduled.
00:20:55.200 --> 00:21:03.680
So because DEA is taking the position that this is a drug that should be scheduled, it's a drug.
00:21:03.839 --> 00:21:05.839
It's it's covered by the FDA.
00:21:06.160 --> 00:21:18.960
So the determinant of which schedule it falls under, one, two, three, four, or five, is based on medical criteria, what this medical science says about what it does, um what its potential for abuse would be.
00:21:19.119 --> 00:21:22.240
And this was this was a very strange argument.
00:21:22.640 --> 00:21:52.640
Um and I frankly, I think all of the attorneys involved in this case, DEA and the opposition and the judge, kind of struggle with this because never in American history, like not never in this system that we've built with FDA and DEA, um, their their collaboration for scheduling drugs, have we had a drug that's we're we're basically saying an entire you know organic plant matter should be scheduled as a drug rather than a specific identifiable compound.
00:21:53.039 --> 00:21:59.119
Um and because of this kind of very and and it's already exists, it's already very widely consumed.
00:21:59.200 --> 00:22:03.039
Um there's Already a lot of science to spec that this is Schedule One.
00:22:03.279 --> 00:22:08.319
It's the one of one of, if not the most studied drug in America right now.
00:22:09.119 --> 00:22:14.240
When you go on PubMed, it's think there's like 10,000 articles that you can pull up that are about marijuana.
00:22:14.640 --> 00:22:17.440
So it's very much a square peg and a round hole.
00:22:17.519 --> 00:22:24.319
Like the alcohol got the benefit of basically getting the treatment that it did and getting exempted.
00:22:24.480 --> 00:22:27.680
Because like alcohol would have the exact same problems marijuana does.
00:22:27.759 --> 00:22:34.400
But the problem is now they're having to kind of justify, okay, based on our scheduling system, how do we make this work?
00:22:34.960 --> 00:22:41.519
And we're focusing on like the DEA was very intentional to the judge.
00:22:41.680 --> 00:22:49.759
You need to not think about all of the elements that go into recreational use, the potential harms, the political and social impacts.
00:22:49.839 --> 00:22:50.799
That's not material.
00:22:50.960 --> 00:22:56.160
What's material is you have to look at the compound itself, at the drug marijuana, the category.
00:22:56.400 --> 00:23:17.279
And you have to analyze it based on whether or not has um you know an accepted medical use, that there's science that supports that that medical use is, you know, that is essentially effective for that use and that it's safe, and that this thing isn't so super addicted that it it should be um kept in schedule one or schedule.
00:23:17.519 --> 00:23:20.640
I mean, I'm sorry, it couldn't be in schedule one, it should be kept in schedule two.
00:23:23.599 --> 00:23:28.960
Yeah, I think the problem, I mean, the problem for me with this whole thing is that there's the the whole premise is fundamentally flawed.
00:23:29.119 --> 00:23:42.079
Like even not talking about whether cannabis could be should be descheduled, which should be a distraction to today's conversation, is that you're taking a plant and you're trying to bifurcate it into two things, medical and adult use, which to me is a flawed premise in the first place.
00:23:42.240 --> 00:23:45.680
But then you say, okay, medically this plant is schedule three.
00:23:45.759 --> 00:23:52.480
Figure out what the goddamn same same thing is for somebody who classifies themselves arbitrarily as adult use.
00:23:52.640 --> 00:23:58.480
And so I go buy an ounce of flour, I share half of it with my dad, who's a medical patient, I smoke half recreationally.
00:23:58.640 --> 00:23:59.680
What is that flower?
00:23:59.759 --> 00:24:01.440
And the flower doesn't know what it is, right?
00:24:01.599 --> 00:24:05.920
The flower just knows that it's helping you, but it doesn't know if it's schedule one, schedule three, or descheduled.
00:24:06.079 --> 00:24:12.000
And so, like, I always feel like I have some obligation to just object to the premise.
00:24:12.079 --> 00:24:16.880
And I'm sitting here on Chat GPT seeing that Xanax is schedule four.
00:24:17.039 --> 00:24:17.359
Yeah.
00:24:17.680 --> 00:24:20.000
It's just like, Jesus Christ, guys, this makes no fucking sense.
00:24:20.079 --> 00:24:24.720
Like alcohol, which kills, I don't know how many hundreds of thousands of people, cigarettes kill hundreds of thousands of people.
00:24:24.960 --> 00:24:28.640
Xanax, go take that for three months and try to get off of it and tell me how that one goes.
00:24:28.799 --> 00:24:30.079
Is that one not highly addictive?
00:24:30.160 --> 00:24:31.920
Does that that one not have potential for abuse?
00:24:32.079 --> 00:24:32.960
Oh, that's schedule.
00:24:33.119 --> 00:24:33.759
What did I say?
00:24:33.920 --> 00:24:34.240
Four.
00:24:34.480 --> 00:24:36.000
Fentanyl is schedule two.
00:24:36.400 --> 00:24:36.720
I know.
00:24:36.880 --> 00:24:40.160
So, like the whole thing, I mean, uh, this is a distraction of the conversation, but just hearing.
00:24:40.799 --> 00:24:42.799
I'll tell you who agrees with you, Jesse.
00:24:43.039 --> 00:24:44.160
I'll tell you who agrees with you.
00:24:44.319 --> 00:24:44.799
The judge.
00:24:44.960 --> 00:25:00.079
The judge in this case agrees with you in that sense that this this this distinction that we've drawn between medical and recreational, like it at the end of almost every witness's testimony, whenever when everybody was done asking questions, he would say, Okay, I have a question for you, uh witness.
00:25:00.240 --> 00:25:11.119
And he would either show or read the federal definition of marijuana, which does not make a distinction between recreational and medical, and says, Is this what you understand marijuana to be?
00:25:11.200 --> 00:25:15.440
And he's like, and made it very clear that is what he thinks about medical marijuana.
00:25:15.519 --> 00:25:20.240
I mean marijuana in general, not that he he does not draw a distinction between medical and recreational.
00:25:20.319 --> 00:25:22.720
He is considering the entire category itself.
00:25:23.039 --> 00:25:23.519
Yeah.
00:25:23.839 --> 00:25:25.039
Which just makes total sense.
00:25:25.200 --> 00:25:31.599
And so I feel like some moral obligation to object to the fundamental fundamentally flawed premise of dividing one plant into these two categories.
00:25:31.680 --> 00:25:36.000
And that the distinction between adult use and medical is also relatively arbitrary.
00:25:36.240 --> 00:25:43.039
And as Dennis Perrone said back in the day, all cannabis users or medical patients, whether they know it or not, he said it much better than that.
00:25:43.119 --> 00:25:44.960
But I think that's a valid thing also to bring up.
00:25:45.039 --> 00:25:49.680
Like if you're using cannabis regularly, take a look in the mirror and figure out if it's medical or really recreational.
00:25:49.759 --> 00:25:56.319
Because a lot of us, like me, who use cannabis on a regular basis, I'm probably using it for sleep or anxiety or whatever it is.
00:25:56.480 --> 00:25:58.960
But I just throw it in the category of, oh, you want to get stoned.
00:25:59.039 --> 00:26:03.039
It's like, no, I'm choosing a different alternative to you know the outcome that I want.
00:26:03.279 --> 00:26:05.920
So uh enough of Jesse's philosophical ramblings.
00:26:06.000 --> 00:26:06.799
Let's get back to the show.
00:26:06.880 --> 00:26:09.039
Um The DEA made the point that you just made.
00:26:09.200 --> 00:26:11.279
They threw their witness, Corey Birchman.
00:26:11.359 --> 00:26:18.240
So they everybody was allowed two witnesses, and one of the DEA's two witnesses is a pain management physician out of New Hampshire.
00:26:18.559 --> 00:26:20.480
And that that's on the record.
00:26:20.559 --> 00:26:25.680
They asked him about that distinction, and he's like, I don't draw a distinction between medical and recreational marijuana.
00:26:25.920 --> 00:26:34.640
Frequently, a lot of recreational, what we deem adult use, is really just people without a medical card or without doctor supervision treating a medical condition.
00:26:34.720 --> 00:26:37.440
That would that is something that the DEA got on the record.
00:26:37.759 --> 00:26:39.119
Well, we can't recreate.
00:26:41.920 --> 00:26:47.440
It's official, which is which is one of the most shocking things is the positions that DEA took.
00:26:47.680 --> 00:26:49.680
It's like bizarro world.
00:26:49.759 --> 00:26:58.640
It's it's it's like if you got in a time machine, DEA of of 2018 would not recognize the DEA's positions of 2026.
00:26:58.720 --> 00:27:00.480
It's striking.
00:27:02.160 --> 00:27:04.079
Yeah, last uh anecdote on that.
00:27:04.240 --> 00:27:13.519
My my son, who is 16, you know, goes to high school in Santa Barbara, and so people are smoking weed, ripping vape pens, you know, the the whole thing, you know, welcome to California in 2026.
00:27:13.920 --> 00:27:18.880
And uh he has one friend uh who uh smokes, you know, hits his vape cart all the time.
00:27:19.039 --> 00:27:24.720
So I was like digging in a little bit, like, well, tell me about the kid, because in my mind, I'm like, this kid is probably just treating something medically he doesn't know.
00:27:24.799 --> 00:27:29.920
And he's like, Yeah, he has ADHD, and his dad won't let him take you know any of those Ritalin or other medications.
00:27:30.079 --> 00:27:44.799
So the kid who's 16 is looking for an answer to how he feels, and so he you know is hitting the vape cart, you know, which people view as the kid's a stoner or you know, he's looking to get high when really the kid is probably just treating in the background this medical problem, you know, in a different in a different way.
00:27:45.519 --> 00:27:53.039
And so anyway, I just think these conversations you know are important broadly about cannabis, but getting you know back into this hearing specifically, just take take us inside.
00:27:53.119 --> 00:27:56.559
I think that's what people are really here, you know, here for Christian, is we're sitting on the outside.
00:27:56.640 --> 00:28:04.240
I'm catching some other MIDI reports, I'm catching some Dale's report, I'm reading some marijuana moment, I'm over there on uh well, MJ Biz, you know, whatever we got out there.
00:28:04.319 --> 00:28:05.839
I'm just trying to soak in what's happening.
00:28:05.920 --> 00:28:08.319
But you know, bottom line, you're the dude that was in the room.
00:28:08.480 --> 00:28:09.599
So take us inside there.
00:28:09.680 --> 00:28:11.119
Like what what stood out for you?
00:28:11.279 --> 00:28:15.440
Like if you're talking to an audience of ours and they're like, hey man, this guy was in the room, what the hell happened?
00:28:15.599 --> 00:28:17.920
Like, give us the bottom line of what what what stood out the most?
00:28:18.000 --> 00:28:18.640
What shocked you?
00:28:18.720 --> 00:28:20.000
What are the takeaways?
00:28:20.400 --> 00:28:22.720
Well, I I guess I'll start at the beginning.
00:28:22.799 --> 00:28:27.039
I was very surprised with the lack of um industry presence there, honestly.
00:28:27.119 --> 00:28:29.200
Um and frankly, media presence too.
00:28:29.279 --> 00:28:38.000
So like I I I'm one of I think three people in the gallery that was like not an employee of the DEA that was there for all two and a half weeks.
00:28:38.240 --> 00:28:44.720
And like, so the pre they they when you walk into this room, it's a very it's a small hearing room.
00:28:44.799 --> 00:28:54.880
So there's two two different uh rows, I mean two different sets of five rows of uh wooden seats that look like oversized church pews, very uncomfortable.
00:28:55.039 --> 00:29:00.319
Um, and then on the other side of the bar is uh you know three sets of tables.
00:29:00.480 --> 00:29:10.240
So one for Sam's lawyer, one for everybody else, opposing attorney's lawyers, and then uh the DEA lawyers, and then you have the you know the bench with the judge and where the witnesses sit.
00:29:10.880 --> 00:29:29.440
But you know, of those five rows, one was one row was reserved for like the DEA bench, and then the back row was reserved for media, and like there were at most like two reporters at any given time, I think a total of maybe six reporters the entire time we were there.
00:29:29.839 --> 00:29:43.519
Um, so like you'd see someone, it was it was, you know, I'm not gonna bash anybody, but like you'd see people on YouTube or on podcasts or whatever from the media talking about what's going on, and like they were no them and no one from the organization was in this room.
00:29:43.599 --> 00:29:53.759
It was basically, I think that New York Times was I might I might be missing like one person, but New York Times was really the only like general interest media that I I saw or interacted with.
00:29:53.920 --> 00:30:11.599
Everybody else was kind of um marijuana focused, but there were some people who you would think would be in that room who were not, and then the industry really wasn't some there were a couple attorneys or people who kind of represented law firms from attorneys who were there, but um it really wasn't that well attended.
00:30:11.759 --> 00:30:16.720
And I got there at five in the morning on the first Monday that it started.
00:30:16.960 --> 00:30:23.440
Um, and I did that because I kind of flew up because I was interested, my clients are interested, but I I wasn't there for a particular reason.
00:30:23.680 --> 00:30:30.960
And I thought it was gonna be, you know, lying out the door, you weren't getting into this small room, and then you can't you can't watch it.
00:30:31.039 --> 00:30:33.759
And so my boss basically paid for me to fly to DC for nothing.
00:30:33.839 --> 00:30:42.960
So I was like, I promise you, boss, like I'm gonna wake up at 4 50 in the morning, get dressed in my suit, get get a Starbucks, and then just stand outside for four hours.
00:30:43.200 --> 00:30:50.400
And there were a couple people who actually beat me there because they were like the paid line holder people in DC that like people who go pay to stand in line for them.
00:30:50.640 --> 00:30:59.920
But then um as the days went on, you still needed to get there early because if you got if you got there later than like 8 50, they wouldn't just wouldn't let you in the building.
00:31:00.160 --> 00:31:03.440
Um, and then there was always a small chance that you would get knocked out.
00:31:03.599 --> 00:31:05.039
But that was the first thing.
00:31:05.119 --> 00:31:09.599
So small room, it wasn't televised, not a whole lot of people there.
00:31:09.839 --> 00:31:18.400
And I think part of that reason is I think a lot of people, even in the industry, did not understand this hearing dealt with rescheduling all of marijuana.
00:31:18.880 --> 00:31:21.519
Um, and that's something I've tried to really beat the drum on.
00:31:21.680 --> 00:31:22.880
This is something that's being considered.
00:31:22.960 --> 00:31:24.799
Like we should all be paying attention to this.
00:31:25.279 --> 00:31:30.640
Um, the other thing, so I let I'll talk a little bit of meta about kind of the vibe.
00:31:30.880 --> 00:31:34.160
Um mentioned it's weird DEA's taking this position.
00:31:34.400 --> 00:31:39.759
Um DEA, I would say if I had to describe DEA's case, it was basically brute force.
00:31:39.839 --> 00:31:44.480
So it was like they have their theory of the case, it's very minimalist, it's very specific.
00:31:45.279 --> 00:31:58.799
Um and if the opposition made arguments outside of that case, that like a three-pronged case, basically, they pretty much never objected.
00:31:59.200 --> 00:32:10.799
So in in Florida, like if I'm in an administrative case on even like a basic rule challenge, um basically, whenever you're making traction, it's almost like calling time out in a you know an NBA playoff game.
00:32:10.880 --> 00:32:15.839
You you disrupt the other side, you try to keep the record from being pristine for them.
00:32:16.079 --> 00:32:16.640
They did not.
00:32:16.720 --> 00:32:21.920
Really, the only objections they consistently made were like relevance objections, and it was very rare.
00:32:22.160 --> 00:32:30.160
Um, and so you had this thing where DEA was basically letting these guys tee off on them.
00:32:31.680 --> 00:32:32.880
We don't we just don't care.
00:32:33.119 --> 00:32:34.720
That was very striking.
00:32:34.880 --> 00:32:37.680
Um, that particular strategy.
00:32:38.559 --> 00:32:41.119
Were there were there any compelling arguments against?
00:32:41.200 --> 00:32:52.079
Like I think we could all sit here and you know um, you know, rally each other and talk about how awesome cannabis is and you know why it should be schedule three at a minimum and probably logically be descheduled.
00:32:52.240 --> 00:32:53.680
I think we know those arguments well.
00:32:53.759 --> 00:33:01.039
And I think most of our audience sitting here is, you know, not just financially campaigning for schedule three, but I don't know anyone really involved with the cannabis industry.
00:33:01.119 --> 00:33:05.839
I don't know anyone, honestly, that uses cannabis that would argue, you know, schedule one or two makes sense.
00:33:05.920 --> 00:33:08.160
It seems like people that are pretty out of touch with the plant.
00:33:08.319 --> 00:33:11.839
But I want to be objective and say, like, is there something on the other side of this?
00:33:11.920 --> 00:33:14.880
Like, I've got this woman, Bertha, yelling at me on X right now.
00:33:14.960 --> 00:33:19.359
I don't even know who this person is, but someone named named Bertha was just yelling at you on Twitter.
00:33:19.599 --> 00:33:23.119
Yeah, she's yelling, uh yelling at me on X that cannabis has no medical use.
00:33:23.200 --> 00:33:33.200
And I'm, you know, honestly, I'd like to swear to the podcast, but fuck off is my attitude to that, because my dad, who unfortunately passed away a couple of days ago, not looking for sympathy, but I just want to you know frame the conversation.
00:33:33.440 --> 00:33:36.400
He, you know, had chronic regional pain syndrome his whole life.
00:33:36.480 --> 00:33:41.440
You know, by the time he was my age, he was, you know, retired and disabled from car crashes that he got into.
00:33:41.599 --> 00:33:45.359
He got so he's taking a thousand milligrams of oxycontin a day, an insane dose.
00:33:45.519 --> 00:33:47.680
Oxycontin usually comes in 30 milligram pills.
00:33:47.759 --> 00:33:50.799
That's 33 of those a day that he was taking, and not for fun.
00:33:50.880 --> 00:33:54.480
It's because he's in so much pain from this chronic regional pain syndrome.
00:33:54.559 --> 00:34:03.200
He got involved in cannabis in 2015 and completely changed his life and eventually completely got off opiates by using cannabis as his primary pain pain management tool.
00:34:03.359 --> 00:34:09.119
Everything about his life got better, pain got better, personality got better, all the horrible side effects from opiates went away.
00:34:09.199 --> 00:34:12.800
And then this woman online is only is yelling at me, telling me that cannabis has no medical use.
00:34:12.880 --> 00:34:13.679
And it's like, fuck you.
00:34:13.760 --> 00:34:14.800
I just watched it my in my life.
00:34:14.880 --> 00:34:17.119
I just watched it with the person closest to me, which is my dad.
00:34:17.280 --> 00:34:21.760
And I also had a dispensary where I helped thousands of people with real problems.
00:34:21.920 --> 00:34:26.800
And so, like, I get the I get and very passionate that it's not schedule one, it's not even schedule three.
00:34:26.880 --> 00:34:29.760
But if we land on schedule three now for now, fine.
00:34:30.079 --> 00:34:36.559
But my question with this drastic traumatic framing is was there what's the compelling argument against that?
00:34:36.639 --> 00:34:38.880
Because it is not what Bertha's framing to me here.
00:34:40.400 --> 00:34:45.199
So I I guess there's two categories of arguments.
00:34:45.360 --> 00:34:55.599
There's a process and procedural argument, and then there's kind of the nitty-gritty attacking the three prongs that I mentioned that that um that DEA is putting forward.
00:34:56.239 --> 00:35:03.760
So um the the procedural one is what I think is probably the most compelling.
00:35:03.920 --> 00:35:07.599
I I just for the record, I think that DEA is going to prevail here.
00:35:07.679 --> 00:35:10.960
I think they're either going to get a favorable recommendation from the judge.
00:35:11.920 --> 00:35:18.079
The way that this works is that uh not to bury the lead, but the the judge will make a recommendation to DEA.
00:35:18.239 --> 00:35:19.840
DEA ultimately is the arbiter.
00:35:19.920 --> 00:35:24.400
They get to decide whether or not they accept that recommended order, they put out something totally different.
00:35:24.559 --> 00:35:34.159
And I think DEA is either going to get a favorable ruling and just accept it, or they're gonna get a negative ruling and they're gonna be like pound sand, we're gonna do it, we're we're gonna go to appeal no matter what.
00:35:34.239 --> 00:35:36.239
So let's just see in circuit court.
00:35:36.400 --> 00:36:03.119
Um, but rewinding, the procedural argument I think is probably going to be more um fleshed out and come even more compelling at the circuit level than it was in administrative level, but it's still worth mentioning, which is the process by which uh HHS ultimately like determined that they should recommend to DEA that uh this should be rescheduled.
00:36:03.440 --> 00:36:09.920
So this is a little wonky, uh, but I'm gonna keep it kind of high level and we can we can drill down if you guys want to on any particular thing.
00:36:10.079 --> 00:36:29.199
But typically when FDA considers a drug for rescheduling, they use what's called a five-factor test because uh the the easiest way to get scheduled is f something gets FDA approved, and then they figure out what schedule that drug is is going to be because you've gone through the FDA process.
00:36:29.599 --> 00:36:40.960
Uh when you don't have an FDA approval, but you want to reschedule a drug, they they use what's called a five-factor test, and they've used this for every drug before marijuana and since for rescheduling.
00:36:41.280 --> 00:36:52.559
And that basically mimics the ultimate conclusions of FDA without kind of that precise double blind uh certainty that you kind of get from uh vetted FDA trials.
00:36:53.199 --> 00:37:05.840
Um marijuana did not use that, and it's because there are there are elements of marijuana that really it's very difficult to for it to conceivably make it through the five factor test.
00:37:05.920 --> 00:37:15.760
So, like one of the requirements of five factor tests is that it be standardized, uh, that it you'd be the drug itself that's being rescheduled, have uh reproducibility.
00:37:15.840 --> 00:37:19.440
So it's like you can you can do the same thing over and over and over and get the same result.
00:37:19.840 --> 00:37:26.559
Um that you have these kind of very precise causal uh demonstrated scientific studies.
00:37:27.039 --> 00:37:29.519
Um and that that's tough for marijuana.
00:37:29.599 --> 00:37:32.079
And so they have they created this two-part test.
00:37:32.960 --> 00:37:45.039
And so it basically for that process, you have to prove wise w widespread medical use and you have to prove credible support um for for use from like from studies, basically.
00:37:45.280 --> 00:38:22.800
And so the point that they got they got the you know, the opposition cross-examined the uh a doctor from the FDA that was part of this rescheduling analysis, and they got him to uh a concede that marijuana would not pass uh the five-factor test, and then stated that you know he worked on this for eight or nine months, this ultimate decision, and they made the decision to move to a two-factor test in like with two months left, and that that decision was basically handed down to him by his bosses, whose bosses told him to do that by fiat.
00:38:23.119 --> 00:38:32.880
So, what the opposition is basically kind of trying to create the impression that this was a political process, as this was arbitrary, that this was capricious, and that this is not backed by science.
00:38:33.039 --> 00:38:38.960
This is a they basically had a result they wanted to get to, and they engineered a bureaucratical way to get there.
00:38:39.199 --> 00:38:51.519
Um, I think that I mean, DEA obviously had answers to that, but that's some that is an issue you are going to see Sam and the opposed states focus on um at the circuit level.
00:38:52.159 --> 00:38:56.480
Um, you know, there were there were some compelling witnesses, I think, on the on the other things.
00:38:56.639 --> 00:39:07.599
I think um, you know, testifying about I but it there are things that you you would concede that you would understand, but then DEA's argument is what anyone in the industry argues, which is like things like diversion.
00:39:07.679 --> 00:39:12.880
Yes, we understand there are problems with diversion, but uh like there are problems with diversion with fentanyl.
00:39:12.960 --> 00:39:21.199
But that does not mean by definition fentanyl is a schedule one drug because it's not um that there are problems with you know intoxicated driving.
00:39:21.360 --> 00:39:26.159
Well, uh if you get hopped up on opioids and you drive a car, you you too will cause an accident.
00:39:26.239 --> 00:39:32.159
And nobody's really arguing that people should get high to like pop a 300 milligram edible and then drive a car.
00:39:32.320 --> 00:39:36.960
So how how about if I take a descheduled drug like alcohol and drive?
00:39:37.039 --> 00:39:37.760
How does that work?
00:39:38.079 --> 00:39:38.639
That's right.
00:39:38.880 --> 00:39:39.360
That's right.
00:39:39.440 --> 00:39:48.159
And so so that there's a very that's why I said DEA was very brute force, which was they said, okay, we have three things, only three things that we're pushing.
00:39:48.320 --> 00:39:52.880
First of all, marijuana should not be a schedule one drug because it has medical use.
00:39:53.039 --> 00:39:54.000
That's all we have to do.
00:39:54.079 --> 00:39:55.280
We have to show one medical use.
00:39:55.360 --> 00:39:59.920
And they focused, I think very intelligently, they were very conservative with their approach.
00:40:00.079 --> 00:40:07.840
They said, we are not trying to prove, you know, there's a couple hundred uh conditions that marijuana is recommended, recommended for if you combine all the state programs.
00:40:08.000 --> 00:40:22.639
We are focusing on pain, specifically neuropathic pain, on anorexia related to other medical conditions like AIDS, um, and nausea related to like other conditions or treatments for those conditions like chemotherapy.
00:40:23.039 --> 00:40:37.199
So, like, probably the lowest hanging fruit, and I would say from an evidentiary perspective and from a like a scientific perspective, you know, it's also smart because those are some of the hardest conditions to disprove that you like don't feel better.
00:40:37.280 --> 00:40:50.000
So if you have pain, like it's very hard for opposition to prove that the people who are feel like they're benefiting aren't actually benefiting because who else it's very difficult to objectively judge pain, which is also you know, it cuts both ways.
00:40:50.079 --> 00:40:57.360
It's it's the opposition tried to say like that that that basically invalidates the study that all of this is stuff is relative and impossible to prove.
00:40:57.599 --> 00:41:12.800
But when the federal government puts its stamp of approval on something that says we believe this, it's um the people forget how freaking powerful and resourceful and like um it's very difficult to knock the federal government off of the position once it takes it.
00:41:14.400 --> 00:41:18.559
We've been dealing with that up until this point to get to this point, yeah.
00:41:18.960 --> 00:41:28.719
And and that was really something it was so interesting to watch the federal government do this too, because it was like it's a case study in what happens when the federal government wants to admit it's wrong.
00:41:28.880 --> 00:41:43.519
Like, how does it how does the federal government admit it's wrong and change its opinion in real time when it's put I mean, like we they they refused to reschedule in the 200 teens, and and there's record of that, like that was cited by the opposition.
00:41:43.599 --> 00:41:46.559
Like, how do you reconcile changing your mind over the course of a decade?
00:41:46.719 --> 00:41:49.519
And they did their best to to try to justify that.
00:41:50.480 --> 00:42:00.559
Yeah, I don't want to turn this into something emotional for me, but yeah, my dad went through chemotherapy, and one of the last like meaningful moments that we had was he felt like complete shit from this whole experience.
00:42:00.800 --> 00:42:10.320
And uh he we have a uh CPG brand at Leaf called Himalaya, and he my dad hadn't smoked weed in two months because he was so fucked up from this uh experience.
00:42:10.480 --> 00:42:15.199
He was like in the hospital for 36 days and like it won't go to the whole thing, but about as bad as you could get.
00:42:15.280 --> 00:42:19.679
And he was home for a while and uh he looked at me and he said, Jesse, do you have any weed?
00:42:19.840 --> 00:42:21.360
I'm like, Yeah, of course I have weed.
00:42:21.920 --> 00:42:23.519
As long as you've known me, I've had some weed.
00:42:23.599 --> 00:42:25.519
You know, just tell me which form factor you like.
00:42:25.679 --> 00:42:28.480
And uh, so it seemed like easiest for him to hit a vape cart.
00:42:28.559 --> 00:42:30.960
And so I went and gave him a vape cart and he took two hits off of it.
00:42:31.119 --> 00:42:34.880
He hadn't smoked in, like I said, in two months because his his condition.
00:42:35.360 --> 00:42:37.599
And it was the thing that just made him feel the best.
00:42:37.760 --> 00:42:40.800
And he looked at me and he said, Jesse, he's like, this is magical.
00:42:40.960 --> 00:42:43.920
He's like, I can't believe how much better I feel.
00:42:44.159 --> 00:42:49.440
It's like he got really inspired for a while after being like so crushed from you know all the things that were going on.
00:42:49.599 --> 00:42:54.480
And like one of the last things that like meaningful conversations he had is he's like, where can't you get this stuff?
00:42:54.559 --> 00:43:00.159
I said, Well, if you're in Nebraska, I I don't know all the states, you know, South Carolina, like what are your what are your prohibition states?
00:43:00.239 --> 00:43:04.800
And he like gave me this impassioned speech about like what to do with my life to try to change that.
00:43:05.039 --> 00:43:11.920
And so I think that like when you look at this, it's I don't know, man, like a partially we're talking about procedural thing, but we're also talking about like a people thing.
00:43:12.079 --> 00:43:19.119
When you talk about like chemotherapy and like the benefit to those people, it's like it's an inhumane thing to continue to do what we're doing.
00:43:19.199 --> 00:43:22.480
It's a inhumane thing to have like something so helpful to people.
00:43:22.559 --> 00:43:27.760
And if you're in fucking Nebraska and you have chemotherapy and you're dying, you know, we're gonna prevent you from having access to this.
00:43:27.840 --> 00:43:36.800
And I understand there's like state level issues here and it's more complex, but man, like when you get into if you're like deep into this stuff, like all of us are, and you're deep into like the personal part of it.
00:43:36.960 --> 00:43:48.480
Some of this stuff is just like so offensive to think that like, you know, Morgan's been through this stuff personally as well, that like people trying to prevent people that need access to these things, whether you're medical or adult use.
00:43:48.559 --> 00:43:53.519
You know, I think that the whole foundation here is just like cruel and unusual in some ways.
00:43:53.599 --> 00:43:59.599
And um, it's a bit of a diversion from the conversation, but I think it's important because like this isn't a this is about money and all this sort of stuff.
00:44:00.000 --> 00:44:03.119
It's about relieving 2 ADE and I work for a big cannabis company.
00:44:03.199 --> 00:44:04.079
Yeah, yeah, I get it all.
00:44:04.159 --> 00:44:06.800
But at the end of the day, it's like, how can we improve people's lives?
00:44:06.880 --> 00:44:08.400
Like, that's why I think you should be in this industry.
00:44:08.480 --> 00:44:10.480
I think that's like the North Star for all of this.
00:44:10.639 --> 00:44:12.000
And like to hear these conversations.
00:44:12.079 --> 00:44:21.280
Yeah, you're talking about things like chemo, chemotherapy, and chronic pain, and to watch somebody, you know, in my own life go through this stuff and have the conversations about, you know, whether we should give people access to this.
00:44:21.360 --> 00:44:25.920
It's just like, you know, it's just the whole thing just strikes me as a bit insane when you take some steps back to it.
00:44:26.000 --> 00:44:28.800
Like it's cool we're going through this nitty-gritty process.
00:44:28.880 --> 00:44:33.519
But for like people that have, you know, lived through some of the stuff and people that have like dedicated their lives to it.
00:44:33.599 --> 00:44:42.719
When you just take a step back, it's like, yeah, cool story we're getting here, but we're still like some of this stuff just sounds like insane conversations to me about like whether this you know has this kind of value.
00:44:44.079 --> 00:44:44.719
Yeah.
00:44:45.360 --> 00:44:48.239
Morgan, why don't you take us uh to the next section here about reading the tea leaves?
00:44:48.320 --> 00:44:50.239
Let's talk a little bit about where we go from here.
00:44:51.519 --> 00:44:52.639
Uh yeah.
00:44:53.039 --> 00:45:08.079
So you know, I and I definitely heard a bunch about the you know, hanging on this this procedural thing and um not to kind of go back a little bit, but uh it was my understanding that they the two-part test is was not new.
00:45:08.320 --> 00:45:14.639
Like, I mean it's relatively new in history, but wasn't this like a couple years ago that they introduced this?
00:45:14.880 --> 00:45:23.760
Understanding that it is not a pharmaceutical drug, it is not processed down to the compound, it is an organic plant, so that you know it's apples and oranges.
00:45:23.840 --> 00:45:32.239
And so like I'm trying to remember when, because I thought we wrote about this to our investors, and I thought it was like two years ago, like two falls ago.
00:45:32.400 --> 00:45:34.320
Yeah, and saying this is an important thing.
00:45:34.719 --> 00:45:38.159
So, what you're we're talking about is uh is uh is actually a very important.
00:45:38.239 --> 00:45:42.239
Um I see a comment company, it's a it's an important like legal point that you're making.
00:45:42.480 --> 00:45:47.760
So legally speaking, DEA is bound by HHS.
00:45:47.920 --> 00:45:54.960
When when HHS says we picked a test and we use this test, this test is valid, DEA is bound to accept it.
00:45:55.039 --> 00:45:59.760
DEA doesn't have the legal authority to test to test the test, basically.
00:45:59.920 --> 00:46:03.119
So FDA, HHS, that recommendation.
00:46:03.199 --> 00:46:10.320
Well, HHS's recommendation to them based on the FDA analysis is gospel, um, scientist scientifically.
00:46:10.559 --> 00:46:21.440
DEA is like kind of kind of an arbiter of okay, we understand what you're saying, but they they still kind of can they have some wiggle room to decide what they're gonna do with that information.
00:46:22.719 --> 00:46:26.480
So that test is legally binding, right?
00:46:26.639 --> 00:46:28.079
The test is legally binding.
00:46:28.559 --> 00:46:44.079
But just because the test is legally binding does not get is not going to keep the opposition from challenging that, like, a that the test fundamentally in and of itself is illegal or is arbitrary and capricious.
00:46:44.400 --> 00:46:49.199
Because you're you're now taking up to the circuit court, you're now in the appellate process.
00:46:49.440 --> 00:46:57.199
So the in the appellate process, you can attack not only, I mean, the the facts are kind of decided, you you attack can attack process and you can attack, okay.
00:46:57.280 --> 00:47:02.239
We understand what the law is, but like, or this what this judge said, but that was fundamentally wrong.
00:47:02.400 --> 00:47:05.360
That's inbounds for for a circuit court appeal.
00:47:05.679 --> 00:47:16.320
Um the second thing is that like even if you use that two-part test, that the conclusions that you drew from it still don't support your argument, which is what they're also trying to argue.
00:47:16.480 --> 00:47:18.159
So your point, your point is well taken.
00:47:18.239 --> 00:47:30.400
It's the the there will not be an outcome in this administrative hearing where the two-part test is uh, I think, invalidated, which is why I was like, I think this is probably more interesting for the circuit court than on for the uh administrative hearing.
00:47:30.559 --> 00:47:33.199
I think I for the record, I think DA is gonna win this.
00:47:33.760 --> 00:47:43.199
Yeah, so this is I'm I'm just gonna I'm going there because I, you know, maybe off script a little bit, but is is that where this is potentially going next?
00:47:43.360 --> 00:47:52.400
Is like instead of having a a hearing, you know, having the they say like this should be rescheduled, and then is this where Sam is gonna come out next?
00:47:52.480 --> 00:47:57.440
Is there gonna push this into the appellate court system?
00:47:57.519 --> 00:47:58.559
Like I mean, you know what I mean?
00:47:58.639 --> 00:48:06.480
Like, is that they're already there, they're already in circuit court on uh there's already an uh an ongoing circuit court case over the rescheduling of medical marijuana.
00:48:06.559 --> 00:48:12.800
And like, yes, so to answer your question, this is un unquestionably going to be going to circuit court.
00:48:12.960 --> 00:48:20.159
Um I I I mean, I guess anything is possible, but like uh this is going to go there, they're going to make these arguments.
00:48:20.400 --> 00:48:26.159
How this process moves from here is so they already did the you know the notice of proposed rule.
00:48:26.400 --> 00:48:35.920
So now um the ALJ has it's typically like on an administrative case, 30 to 90 days.
00:48:36.000 --> 00:48:40.800
Although this is kind of fairly complicated, high profile, wouldn't be surprised if it took a little bit longer than that.
00:48:41.039 --> 00:48:43.119
ALJ is going to make a recommended order.
00:48:43.280 --> 00:48:52.159
Once you put that recommended order out, um, every party to the case gets to gets 30 days to file what are called exceptions, which is like, okay, judge, we read what you said.
00:48:52.320 --> 00:48:55.440
We think that this recommendation is wrong in these ways.
00:48:55.760 --> 00:49:04.639
Then DEA reads the record, they read this recommended order, they read the exceptions, and then they make a final determination and they make their final agency action.
00:49:04.800 --> 00:49:10.960
The final agency action is the end all be all, and that is what would be ultimately challenged in circuit court.
00:49:11.360 --> 00:49:11.679
Okay.
00:49:12.320 --> 00:49:21.760
And I'm just trying to think, because like from our industry's perspective, now people are starting to project like by September this is going to be this, and by October, this is going to be all done and everything.
00:49:21.840 --> 00:49:26.239
And but if I hear, you know, circuit courts and I hear like they don't move that fast.
00:49:26.400 --> 00:49:42.079
Like, I mean, like, and and I guess, you know, just putting that aside for a second, is like, was this were these hearings beneficial in moving things forward, or was this actually helpful for the opponents to get more ammo to try to go into the courts?
00:49:42.239 --> 00:49:52.800
Like, I'm just trying to understand, like, I mean, it seems like to your point the DEA's got its mind made up, but you know, also, as you were saying a bit earlier, to some degree, the DEA is basically the cops.
00:49:52.880 --> 00:49:56.400
They don't write the rules, they're just enforcing the rules for the most part.
00:49:56.719 --> 00:50:05.199
And now, you know, so like I'm just trying to understand like what what was learned, like, is this making the DEA's position stronger?
00:50:05.440 --> 00:50:10.000
How does this set them up to then have to deal with Sam in in the courts?
00:50:11.760 --> 00:50:13.119
Well, okay.
00:50:13.360 --> 00:50:16.719
Um, high level, because there's a lot to unpack there.
00:50:16.880 --> 00:50:35.440
High level, I would say that um if you talk to any administrative lawyer that has done like has practiced administrative law for any period of time, like they will all they will tell you that they're those are uncomfortable conversations that we have because this isn't civil or criminal law.
00:50:35.599 --> 00:50:42.960
Like you don't get the certainty of a judge making a decision, pounding a gavel, and like that's it.
00:50:43.039 --> 00:50:47.440
Like the administrative process is is porous to challenges for a reason.
00:50:47.519 --> 00:50:54.000
It's it's uh like the whole decision or the whole way through, this decision faces the gauntlet of administrative challenges.
00:50:54.159 --> 00:50:55.199
It's procedural.
00:50:55.440 --> 00:51:04.239
Now, like this is why Congress acting would be a way more efficient process than what's currently happening, but that's not the world in which we live.
00:51:04.559 --> 00:51:14.639
So um it's hard to predict because like even in the meta, so even in the medical, um, medical marijuana circuit case, right?
00:51:16.079 --> 00:51:22.719
There was discussions because the opposing parties in that case or the petitioners have are seeking a stay.
00:51:23.360 --> 00:51:31.760
They're basically seeking the judge to say, stop what you're doing, that like stop registering these businesses in with DEA, stop these DEA inspections.
00:51:31.840 --> 00:51:33.599
Like, we need to keep the schedule one.
00:51:34.000 --> 00:51:40.639
And like there was there was speculation that that stay would be ruled on prior to this hearing, and it wasn't.
00:51:40.719 --> 00:51:44.559
So even there, like that's that's confusion.
00:51:44.719 --> 00:51:53.280
And I think what ultimately, like, I think cannabis companies, cannabis investors, they're like capital is probably the thing that keeps them up the most late at night.
00:51:53.440 --> 00:52:05.920
But like, in my opinion, the the capital concerns, all concerns in marijuana right now basically boil down to confusion about like regulatory certainty.
00:52:06.159 --> 00:52:12.079
And like people really don't know the rules of the game in advance, and the rules are being written as we proceed.
00:52:12.480 --> 00:52:13.920
That's what's happening here.
00:52:14.079 --> 00:52:23.119
So, like I will I will tell you illustrative of this point, is I have spoken to DE agents on the phone through a registration process.
00:52:23.199 --> 00:52:31.760
I spoke to people who work for the DEA while I was in the DEA building at this hearing, and then you listen to the lawyers and like they're saying different things.
00:52:31.920 --> 00:52:41.199
So, like, there are parts of the DEA that are not thrilled about this, there are parts of the DEA that it's their job to defend this, and then there are people who are who are happy that this is happening.
00:52:41.599 --> 00:53:06.400
Um so I think first of all, I would tell the industry is like you should be cautious about uh how like open the DEA and optimistic you are as to what the federal government's actual position is on this, because they are they are there's a difference from arguing something legally in court and then like actually making it work in real life when you're dealing with the DEA moving forward.
00:53:06.559 --> 00:53:13.360
Um, and it's possible that um they're doing this now, but like functionally working with them might be quite difficult.
00:53:13.599 --> 00:53:16.000
They it might not, but it it might be.
00:53:16.159 --> 00:53:26.000
Um, it's also like we don't really know how some of these circuit court cases or how we don't know how the administrative cases, we don't know how these circuit cases are gonna go.
00:53:26.079 --> 00:53:28.079
Um, we don't know if stays are gonna be granted.
00:53:28.239 --> 00:53:32.320
We don't know if ultimately opposition could prevail and we have to go even higher up the chain.
00:53:32.559 --> 00:53:49.280
Um, so I think I would love to talk to anyone who is like 100% convinced that they know what is about to happen or can like predict even the next six months of the future because um I think that person could make a lot of money if they're 100% certain what's gonna happen next.
00:53:50.320 --> 00:53:51.039
Calchi.
00:53:55.760 --> 00:53:56.400
Do you know?
00:53:56.480 --> 00:54:01.760
Do you I don't know if you followed this, but there was actually a funny Calci story on the rescheduling.
00:54:02.000 --> 00:54:08.719
So uh I have a buddy who bet a lot of money um on uh rescheduling not happening uh over the summer.
00:54:09.119 --> 00:54:19.840
And uh I texted him, he he he woke up in a very cold sweat that that uh that final order came out because it was you know it reschedule medical marijuana.
00:54:20.239 --> 00:54:26.559
Okay, but Cal she determined that because it was a partial rescheduling, it didn't count as full rescheduling.
00:54:26.639 --> 00:54:28.480
So we got to hold on to less money.
00:54:32.000 --> 00:54:52.880
Yeah, but but let I mean let me let me say one more thing though, on that is um ultimately this is incredibly good for the industry because if you if you if you kind of step back from the the riptide of what's happening right now, the day-to-day drama or even the week-to-week drama, the federal government is putting it on the record that this is a beneficial thing, this is a good thing, and this is the direction we can go.
00:54:53.039 --> 00:55:02.000
Which means if the federal government changes its mind at some point in the future, they're they're they're hosed in the same way that they're kind of hosed now by their previous position.
00:55:02.159 --> 00:55:18.400
Like anytime the federal government goes on the record and says, we are proponents of marijuana, we are proponents of of taking favorable action to the department, I mean, to marijuana, that is any lawyer in the country now can use that in federal court or in state court as uh to justify the positions that they're taking.
00:55:18.639 --> 00:55:33.519
And I think once you get medical marijuana anchored, you're gonna have some arbitrary and capricious system equal protection arguments for people who are trying to uh trying to get recreational done through the courts rather than through the executive branch of the government.
00:55:33.760 --> 00:55:40.559
It'd be very I don't I do not understand if you can get through this medical marijuana stuff and just medical marijuana anchored.
00:55:40.639 --> 00:55:42.639
This is legal, this is federally acceptable.
00:55:42.880 --> 00:56:08.800
I don't know how the federal government withstands our arbitrary and capricious argument when they try to enforce uh a Schedule I determination or or they try to make some adverse executive action against an adult use user or an adult use grower, an adult use distributor, um, when you walk into a dispensary and like these are the exact same products, and the federal government is is asserting there's no difference between these products.
00:56:09.119 --> 00:56:18.400
Um it's gonna be like they have cemented their position, which is excellent for the for the industry moving forward.
00:56:20.079 --> 00:56:28.960
And if you were to be, if you let's say you ran Cal She, uh Christian, what would you put the probably the probabilities of adult use being rescheduled in 2026?
00:56:29.920 --> 00:56:39.760
Administratively, I mean, I think it's I think DEA coming out and um doing a final order, I would put probably 80 or 90 percent.
00:56:39.840 --> 00:56:43.599
Like I feel pretty confident in my prediction that one way or another DEA is gonna move forward with this.
00:56:43.679 --> 00:56:57.760
And circuit court, I I don't really know, but like the the the thing that's important for people to consider on this is that once you get into circuit court appeals, you're talking like years, you're talking a lengthy process.
00:56:58.079 --> 00:57:01.119
And uh we don't know when the final order is going to be issued.
00:57:01.199 --> 00:57:03.519
There's not really a drop-dead date for this ALJ.
00:57:03.599 --> 00:57:08.000
And then once DEA gets all of the paperwork, there's not really a drop-dead deadline for them.
00:57:08.239 --> 00:57:14.079
So we're definitely going through midterms, I would I would imagine, on the ultimate DEA recommendation.
00:57:14.320 --> 00:57:22.079
I mean, and then you're talking about having circuit court cases going into the next presidency, going, we'll have at least two two sweeps at Congress.
00:57:22.159 --> 00:57:41.039
So it's like at some point when you have these uh American MSOs entering exchanges, when you've accepted the two ADE improvements, when um we've kind of these DEA you know inspections have been carried out and all these businesses are registered and are interfacing with the federal government.
00:57:41.119 --> 00:57:46.079
It's like at some point, all of these things become entrenched and become almost impossible to claw back.
00:57:46.239 --> 00:57:51.599
So it's you know, winning by inches, but each inch that we gain is like intractable.
00:57:51.679 --> 00:57:56.159
It's very difficult to claw that back once we've made progress.
00:57:56.639 --> 00:58:04.480
So what are the pro you know, practically speaking, and apologize for being naive on this on these topics, but you know, a lot of these legal things I don't get into.
00:58:04.639 --> 00:58:15.280
But if if administratively it's we we get the final rule on adult use being moved to schedule three, what's the implications of these uh circuit court cases?
00:58:15.440 --> 00:58:21.039
Like, does that for operators does that change operators finish 20?
00:58:21.360 --> 00:58:29.039
If if you're correct and this moves how you expect it, but we have these objections, appeals, whatever the right term is in this in the circuit courts.
00:58:29.199 --> 00:58:40.639
What's the impact to an oper to to a cure leaf or a verano or even you know my company, you know, leaf brands in terms of you know 280e and other things related to uh you know that classification?
00:58:40.960 --> 00:59:00.480
Yeah, the the taxes get better, 280e, because 280e is a prohibition against expensing um basically any of your expenses um as a business if you're um dealing with a schedule one drug or a schedule two drug where it's you know not legal in the jurisdiction of which you're uh like a state that's it's not legal.
00:59:01.199 --> 00:59:07.760
Um so once you what 280 is going to be an improvement.
00:59:07.920 --> 00:59:16.800
Um, I think as far as certainty for like banks, insurance, like I think probably register DEA registration is gonna be something that they ask you for.
00:59:16.880 --> 00:59:20.480
So there's gonna be kind of reciprocal certainty for on some of these processes.
00:59:20.719 --> 00:59:35.599
On the product side, I don't I don't think it materially improves as far as like legal certainty because and this is a little wonky, but when you're a schedule three drug, think about it as like, okay, now we're a schedule three drug.
00:59:35.760 --> 00:59:43.280
Um, it's a like this is ketamine, this is like test prescribed testosterone.
00:59:43.440 --> 00:59:46.239
Um this is anabolic steroids.
00:59:46.480 --> 00:59:53.280
So it's these are products that each go through their own approval and are deemed safe and effective.
00:59:53.519 --> 01:00:00.159
So when you move the entire category of marijuana to schedule three, okay, that's fine.
01:00:00.320 --> 01:00:09.679
But like marrow, the marijuana industry is composed of a constellation of products, and none of those products will be approved by the FDA is safe and effective.
01:00:09.920 --> 01:00:19.840
So the category itself moving into Schedule II is good in that you are not you don't have a Schedule I prohibition, by which means by definition, you are a drug smuggler and a money launderer.
01:00:20.079 --> 01:00:21.039
You're out of that.
01:00:21.360 --> 01:00:27.519
But uh your drugs are now a medical product without medical approval.
01:00:27.760 --> 01:00:32.800
So it you you I think the recreational marijuana and adult use programs will continue.
01:00:32.880 --> 01:00:40.400
I don't think they'll be materially changed, but that problem doesn't get unstuck because of rescheduling of marijuana to schedule three.
01:00:40.800 --> 01:00:42.239
And I hear that objection sometimes.
01:00:42.320 --> 01:00:48.320
I actually heard it the other, actually, I think I heard it yesterday about somebody saying, Well, what are you gonna do because none of your products are FDA approved?
01:00:48.480 --> 01:00:51.119
Like, how does that how do you think about that, Christian?
01:00:51.199 --> 01:00:55.280
Like, you know, there used to be products out there, you know, Morgan, you remember you remember dosist, right?
01:00:56.000 --> 01:00:56.559
Of course.
01:00:56.800 --> 01:00:58.079
Yeah, so you see products out there.
01:00:59.280 --> 01:01:07.519
I mean, not to be not to be like cynical, but like this and anybody who's been in this industry has been selling a schedule one drug for you know going on two decades now.
01:01:07.679 --> 01:01:11.199
So it's like material, it's it just it's a distinction without a difference.
01:01:11.440 --> 01:01:20.079
Like it's better to be schedule three and to be operating in a legal legal gray area than to be schedule one and operating in a legal gray area.
01:01:20.320 --> 01:01:31.199
But um so in order to like one of the situations DEA is gonna run into, and the the registration process is a perfect example, right?
01:01:31.360 --> 01:01:36.480
So medical marijuana company, we're and I'm not talking about adult use, just medical, right?
01:01:37.280 --> 01:01:50.000
These medical marijuana companies now are registering their businesses, um, but the DEA didn't build a portal like and a system or or promulgate a rule and a form for marijuana dispensaries.
01:01:50.079 --> 01:01:59.440
And so what they are forming up filling out are basically like slightly modified form 224 and form 225 for dispensaries and manufacturing facilities.
01:01:59.679 --> 01:02:03.440
Those are those are pharmacy and drug manufacturing forms.
01:02:03.840 --> 01:02:15.679
Um, there is not like an independent rule about how DEA specifically deals with these companies that have now been deemed Schedule III providers because they're compliant with the state program.
01:02:15.840 --> 01:02:24.239
And in order to do like meaningful enforcement actions, like you need rules, you need standards, you need like things that actually have to be promulgated.
01:02:25.519 --> 01:02:34.239
So um I think that I am one of the people that I do not expect crystal clear certainty from the federal government in the next couple of years.
01:02:34.400 --> 01:02:45.119
What I what I am very happy about is that my clients are no longer are likely no longer going to be operating in like an absolute legal dead zone of being Schedule One.
01:02:45.920 --> 01:02:50.719
Um let's say you're sorry, just one quick one.
01:02:50.880 --> 01:02:55.599
So your leaf brands were one of, if not the biggest producer of concentrates in California.
01:02:55.760 --> 01:03:05.280
Well, of 75, typically up to a hundred, you know, what we call fractions, which it be like, you know, you and I were talking backstage, like Gorilla Glue Shatter be a uh, you know, a fraction for us.
01:03:05.519 --> 01:03:10.559
And uh over here, I've got some garlic juice rosin, and then we sell a whole bunch of distillates.
01:03:10.719 --> 01:03:12.079
We've got all these different things.
01:03:12.239 --> 01:03:16.320
And so how do you think about those specific products?
01:03:16.400 --> 01:03:24.719
Like in that FDA context, is there any world you see where each skew that somebody has has to be somehow federally approved?
01:03:24.880 --> 01:03:30.079
I understand that seems insane going, you know, we were scheduled one, now we're scheduled three, but there is that concern out there.
01:03:30.159 --> 01:03:33.760
There is a, I think, Christian, if we're fair, there's like a bit of a contradiction going on there, right?
01:03:33.840 --> 01:03:37.440
Like we're a bit of an exception to the rule where we don't have a specific product.
01:03:37.519 --> 01:03:41.360
We have this whole category, which is cannabis, starts with our flour back here.
01:03:41.519 --> 01:03:42.559
But again, look at Leaf.
01:03:42.719 --> 01:03:45.199
We turn that flour into 75 different kinds of oil.
01:03:45.360 --> 01:03:50.159
Like, how do how do you think about that context in this FDA framework in an FDA framework?
01:03:50.239 --> 01:03:53.199
Or do you think just we're just a lifetime exception to that?
01:03:53.519 --> 01:04:21.840
Yeah, I think that the FDA, I think the gen the Attorney General's final order kind of, I think, signals how they're going to treat that, which is they've kind of put baby in a corner with the FDA, which is they say that like medical marijuana, like Florida MMTCs under that final order are operating as schedule as you know, schedule three producers and schedule three dispensers by virtue of being compliant with the state medical program.
01:04:22.159 --> 01:04:26.960
So what they've essentially done is incorporated these state programs into reference by reference.
01:04:27.119 --> 01:04:30.320
Now, there will be restrictions for like your company.
01:04:30.480 --> 01:04:43.280
There might be the the DEA might be particularly concerned about chain of custody, security, or cameras, record keeping, background screening for your employees, like they may be concerned with that.
01:04:43.440 --> 01:04:55.920
But it's that to the actual like approval of those drugs, uh the way that the federal government is handling that is they they they don't they aren't really requiring FDA approval.
01:04:56.000 --> 01:05:18.639
Um they're just saying if you're compliant in a if so if your product complies with California state law and you are a licensed and good standing entity in California, right now the federal government has said you are you know you are schedule three manufacturer, your schedule three distributor, your schedule three dispensing, as long as you register with them.
01:05:21.920 --> 01:05:23.679
Yeah, it is interesting.
01:05:26.639 --> 01:05:38.159
Well, I mean, I think I think what's important with all this is you know, like Jesse and I, you know, we talk about this a lot is trying to think about not what's just happening, but and then what, right?
01:05:38.239 --> 01:05:59.280
And and like this is just uncovering like just because we get to schedule three, obviously massively historically important to be progressing in that way, but it introduces a lot of other elements that are still murky and still living in with some uncertainty, you know.
01:06:00.159 --> 01:06:04.239
Understand, like FDA is still for you know keeping the baby in the corner kind of thing.
01:06:04.559 --> 01:06:15.679
But and maybe that's why we saw descheduling law proposed today is like this is a a wake-up call to Congress to get your shit together and finally do something.
01:06:15.920 --> 01:06:22.159
And because the cleanest thing for this industry to thrive is is got to be descheduling.
01:06:22.239 --> 01:06:23.840
Because I just I just hear this rescheduling.
01:06:23.920 --> 01:06:28.480
I'm just like, you know, for capital to move, for people to start wanting to be back in this industry.
01:06:28.559 --> 01:06:32.000
Obviously, they want tax clarity, they want regulatory clarity.
01:06:32.480 --> 01:06:42.719
And I feel like, you know, if we get final rule and 280 E stops for all of the industry, not just for medical, but we still have this overhang of these challenges in the courts and what if they prevail?
01:06:42.800 --> 01:06:43.679
And then what does that mean?
01:06:43.840 --> 01:06:45.599
Does that then go retroactive back?
01:06:45.679 --> 01:06:46.719
And like, you know what I mean?
01:06:46.800 --> 01:06:54.719
I'm just trying to put my put my hat on as if I'm an external capital group looking at cannabis and I'm seeing this landscape.
01:06:54.960 --> 01:07:07.199
Does final rule actually give me certainty that this is there is permanence here, or is there still some risk here that is, you know, this kind of court overhang?
01:07:07.280 --> 01:07:18.800
Uh, versus, like you said, if Congress would just do what the American people have wanted now for quite a long time and just deschedule it, we would we would be free of all these these issues.
01:07:18.960 --> 01:07:19.599
Is that fair?
01:07:19.920 --> 01:07:25.360
Yeah, or if you get FDA and DEA to agree with you and just re-deschule.
01:07:25.440 --> 01:07:29.440
Like they they could do it, they they could deschedule if they wanted to, they haven't.
01:07:29.679 --> 01:07:29.920
Right.
01:07:30.000 --> 01:07:30.559
Uh, but yeah.
01:07:30.960 --> 01:07:35.280
It seems like a step, that's a huge step from going from schedule one to just go right to deschedule.
01:07:35.519 --> 01:07:37.679
Though I do think, I mean, I understand.
01:07:37.760 --> 01:07:42.320
I'm just politics or no, I've I'm shaking, I'm shaking my head the wrong way, working.
01:07:42.400 --> 01:07:43.119
I'm I'm agreeing with you.
01:07:43.199 --> 01:07:46.559
I think it's it's an uh that's what we should do, but I think that jump is unrealistic.
01:07:46.639 --> 01:07:47.679
Yeah, exactly.
01:07:47.840 --> 01:07:48.320
Yeah.
01:07:48.639 --> 01:08:01.679
And and and I did even hear right in the rulings or in the hearings, there was wasn't there a physician or someone that did acknowledge that cannabis or marijuana has less harms than alcohol.
01:08:02.000 --> 01:08:02.159
Yeah.
01:08:02.480 --> 01:08:03.280
Less addictive.
01:08:03.360 --> 01:08:15.280
And obviously we know these things, but the fact that it was in the hearing, having, and I actually I think Sam was the one that was pushing back against this of like they had a descheduled substance being in the hearings, it was like conflicting.
01:08:15.360 --> 01:08:24.319
And it's like I actually thought that was a very powerful thing because to admit something like that in in court, I thought, you know, well, does that open that door?
01:08:24.640 --> 01:08:32.640
Or to your point, Christian, are they so anchored on our position is rescheduling, and that's where we're holding.
01:08:34.640 --> 01:08:39.439
I I'm trying to fight find the political way to say it, this the politically correct way to say this.
01:08:39.760 --> 01:08:45.680
I I would not attribute I told I told I t so I told someone to fuck off earlier.
01:08:45.760 --> 01:08:46.560
We're not doing political stuff.
01:08:47.279 --> 01:08:47.920
I don't know.
01:08:48.159 --> 01:08:49.359
Let's let's get the straight answer here.
01:08:49.760 --> 01:09:00.399
I don't know if they know if I honestly I don't know if they if all of these permutations have really been thought out by the administration.
01:09:00.560 --> 01:09:20.640
Like I'd I'd not I'm not sure that they're like when when you're thinking about when you're talking about this, I'm not sure everyone anyone has actually gone through these and like actually like this is organized, cogent uh like political action.
01:09:20.800 --> 01:09:24.319
I think part of this is red meat because we're going into midterms.
01:09:24.479 --> 01:09:35.199
Part of this is something where it's like we have to have some type of pressure release because uh the law has become has become so like utterly ridiculous in how it's being handled nationally.
01:09:35.520 --> 01:09:40.319
Uh, and part of this is like, you know, you know, Trump, Trump taking a win.
01:09:40.399 --> 01:09:42.000
Like Trump being like, okay, we're gonna do this.
01:09:42.079 --> 01:09:43.840
I'm I'm gonna actually make this happen.
01:09:44.000 --> 01:09:51.920
And he he you know, he he does have a tendency to sometimes uh you know shoot and then aim uh on some of this stuff.
01:09:52.000 --> 01:09:56.720
I'm not that and I don't want to say like DEA and none of these people, like the the obviously a lot of thought went into this.
01:09:56.880 --> 01:10:03.600
Like this is very but like what you're talking about are like so many permutations, it's such a complicated situation.
01:10:03.680 --> 01:10:18.000
And there might be you know think tanks or particular people in some of these agencies that have thought about pieces of this, but how the whole thing fits together, I really don't know if I don't think that there's like this grand plan about how all of this fits.
01:10:18.079 --> 01:10:25.600
And even if there is, we have elections every two years and it's gonna take more than two years, like any of those things can be accelerated or disrupted.
01:10:26.239 --> 01:10:43.840
And I mean, I think one thing that's a minor thing to, but I'm I'm keeping on my radar is if they don't get this final rule done and Massachusetts voters actually vote to repeal their adult use market, what's that gonna weigh on the calculus of the of the TEA's position?
01:10:44.079 --> 01:10:44.640
You know what I mean?
01:10:44.720 --> 01:10:51.199
So like there's like a window where I think you know, get it done, but does that give more ammo to Sam in the courts?
01:10:51.359 --> 01:10:52.640
Like maybe.
01:10:52.880 --> 01:10:56.960
I mean, but like D it it's possible, but so this is actually kind of interesting.
01:10:57.039 --> 01:11:06.159
We talk about something that specifically happened in in the court that like I mentioned the brute force thing, but I didn't really like to really give any kind of flesh that out.
01:11:06.880 --> 01:11:19.920
But um DEA treats those types of things as irrelevant to what they are, and they're arguing in front of the judge that what you just described is irrelevant.
01:11:20.079 --> 01:11:27.119
So specifically they treat like how state governments, specifically adult use state programs, have comported themselves.
01:11:27.279 --> 01:11:35.119
They think that's totally irrelevant because the case is about whether or not there is um an accepted medical use for marijuana.
01:11:35.600 --> 01:11:53.520
So, you know, you compare uh you you can have a state that's and and there were examples of kind of you know some not awesome things happening, uh, you know, as far as uh certain states with that are kind of lax on certain safety requirements or diversion prevention, and it is what it is.
01:11:53.680 --> 01:11:57.039
Uh DA's position is we don't care, that's diversion.
01:11:57.119 --> 01:11:58.880
Like there's diversion of fentanyl.
01:11:58.960 --> 01:12:01.520
That doesn't mean fentanyl doesn't have an approved medical use.
01:12:01.840 --> 01:12:03.520
Marijuana has a medical use.
01:12:03.760 --> 01:12:06.800
So same thing with uh, I mean diversion in particular.
01:12:07.039 --> 01:12:11.359
FDA, there I I would say one of the weakest parts of their analysis probably is diversion.
01:12:11.600 --> 01:12:23.199
Just saying that, like as someone who watched them, like their in their explanation for diversion was basically looking at kind of like federally involved like NIDA facilities and how much diversion there is.
01:12:23.279 --> 01:12:31.439
And they like there was no analysis as to like or very, very little analysis of like real diversion in like these state medical programs.
01:12:31.680 --> 01:12:33.520
But DEA's position is that doesn't matter.
01:12:33.600 --> 01:12:37.039
There's diversion for every drug that doesn't affect medical use.
01:12:37.279 --> 01:12:39.039
So back to like one of your first questions.
01:12:39.119 --> 01:12:51.039
That's why DEA keeps bringing back the medical, because it helps them push away things like diversion or well-run state programs, because they're like, yeah, that's that's all true.
01:12:51.199 --> 01:12:53.520
It's debatable, but it's true.
01:12:53.760 --> 01:12:54.800
You know, whatever.
01:12:54.960 --> 01:13:00.560
That doesn't, even if it, even if you accept everything you say, which we don't concede, it doesn't matter.
01:13:00.800 --> 01:13:01.680
That's their position.
01:13:02.000 --> 01:13:03.359
No, that's that's a great point.
01:13:03.520 --> 01:13:05.039
Um, and you did mention that earlier.
01:13:05.119 --> 01:13:10.479
And it's good to bring it up again because it's easy to get like too far down and get lost in it, and then that brings it back.
01:13:10.640 --> 01:13:18.640
Because I mean, at the end of the day, the states just create created these programs because the federal government was not willing to move at that time.
01:13:18.720 --> 01:13:24.239
And so they wanted to have these things, and then we created this funky thing where we had medical, and then we created adult use.
01:13:24.399 --> 01:13:32.319
Like those were all created because the federal government was not formally or was, you know, historically had not been in favor of of doing this.
01:13:32.479 --> 01:13:44.399
So um, which created all these, all this, you know, nuance and uh, you know, and the point about you know, diversion, yeah, that's that's a regulatory and enforcement question.
01:13:44.479 --> 01:13:48.239
That's not around a medical value perspective.
01:13:48.720 --> 01:13:58.720
Yeah, I mean, uh the opposition were basically trying to make the argument that like it's so pervasive that it becomes a public health issue rather than kind of like a criminal or like administrative issue.
01:13:59.039 --> 01:14:03.920
And you know, like I said, it the DA's position is what the DEA's position is.
01:14:04.079 --> 01:14:08.880
And um, some of that, you know, they provided expert testimony on that, they provided a lot of information.
01:14:09.119 --> 01:14:30.479
But like uh, I mean, they they had the sheriff from um Humboldt County come out and they gave very compelling testimony about organized crime in California and how like they their their county, there's certain parts of their county are a mess trying to deal with this stuff, and then it's very arduous and the the system needs to change.
01:14:30.640 --> 01:14:35.920
But like DEA's like, yeah, I we get it, but that doesn't impact our analysis though.
01:14:38.560 --> 01:14:45.199
So yeah, interesting hearing the Humboldt County Sheriff talk about organized crime, but that's a much longer conversation.
01:14:48.399 --> 01:14:53.119
The phrase murder mountain was said like probably 10 times during his testimony.
01:14:56.800 --> 01:15:00.720
So Chris, so so Christian, just to kind of wrap things up, we covered a lot of great ground today.
01:15:00.800 --> 01:15:02.960
It's been uh been a really really helpful show.
01:15:03.199 --> 01:15:11.359
When you kind of reflect on the the time that you spent at the hearings and what what's your single biggest takeaway you would leave listeners with?
01:15:13.760 --> 01:15:33.680
Um I think that having DEA witnesses talk about the entourage effect and DEA witnesses talking about medical use and DEA talking, uh calling witnesses who are testimony testifying about uh how patients can affirmatively be helped off of opioids with marijuana.
01:15:34.079 --> 01:15:42.800
Getting this stuff on the record, the federal government taking these positions is uh extreme it is the most valuable thing from all of these.
01:15:43.039 --> 01:15:44.319
It is more valuable than the outcome.
01:15:44.560 --> 01:15:49.199
The federal government building a record for why it believes is something that they can't ever take back.
01:15:49.520 --> 01:15:50.960
They're locked into this now.
01:15:51.920 --> 01:16:06.399
So it was a I mean, the last two and a half weeks are probably the uh I mean, definitely since the Cole memorandum, the most important, you know, federal policy shift that we've had because once you put this out there, you cannot take it back.
01:16:06.640 --> 01:16:10.720
Um so the opposition is gonna do what the opposition does.
01:16:10.880 --> 01:16:16.319
The opposite I will say that like opposition lawyers, some of some of them were terrible, but some of them were incredible.
01:16:16.479 --> 01:16:22.239
Like uh one of Sam's lawyers uh uh give credit to where he's due, he's the best litigator I've ever seen in person.
01:16:22.720 --> 01:16:33.359
Um he had this when I mentioned that he got the D the uh DA witness to concede on the record that marijuana would not pass the five factor test.
01:16:33.439 --> 01:16:37.439
To do that, he got through about 30 minutes of bit of concentrated.
01:16:37.760 --> 01:16:43.439
It was like the one time DEA actually like fought, they fought this guy for 30 minutes.
01:16:43.600 --> 01:16:47.600
I've never seen someone break through objections and be able to get a malloc moment like that.
01:16:47.920 --> 01:16:48.960
It's very impressive.
01:16:49.039 --> 01:16:53.119
So their lawyers are excellent, but some of their lawyers are excellent.
01:16:53.279 --> 01:17:00.239
Um but the the the fact is the most powerful ally that you could ever hope to have is the federal government.
01:17:00.640 --> 01:17:14.960
Uh US federal government is now the ally that we're um we have mutual interest in this particular area, and it it's incredible to see them take the positions that they've seen, I mean that they've taken.
01:17:15.600 --> 01:17:20.319
Um so yeah, what a massive shift.
01:17:20.399 --> 01:17:25.199
There's a great book uh called Smoke Signals, which uh Micah, yeah, our CEO.
01:17:25.359 --> 01:17:26.479
Did you have you read that?
01:17:26.640 --> 01:17:26.960
Yeah.
01:17:27.119 --> 01:17:27.920
I read that, yeah.
01:17:28.079 --> 01:17:29.760
I read that back in the day.
01:17:30.479 --> 01:17:32.319
Yeah, it's a bit, yeah, it's a bit dated now.
01:17:32.399 --> 01:17:34.880
Um I don't remember when when it when it when it when it came out.
01:17:34.960 --> 01:17:40.720
It was I think it I think it was before California, even uh adult use came out that the that the book the book was written.
01:17:40.880 --> 01:17:41.760
But I bring it up, yeah.
01:17:41.840 --> 01:17:42.720
It's called Smoke Signals.
01:17:42.800 --> 01:17:47.199
Uh Hirsch, one of our favorite guests, Hirsch, Hirsch Jane has read it too and liked it a lot.
01:17:47.279 --> 01:17:49.439
And yeah, I bring it up because a great book.
01:17:49.520 --> 01:17:52.800
Everyone should read it if you're into cannabis stuff and you're a nerd in that regard.
01:17:52.880 --> 01:17:54.479
The history of it is just amazing.
01:17:54.640 --> 01:18:04.000
But the biggest thing I took for the book was for thousands of years, you know, the people have wanted cannabis, and the government has tried to suppress it or oppress it.
01:18:04.239 --> 01:18:08.960
And it goes back to not even just the United States, it goes back so much further than this.
01:18:09.039 --> 01:18:12.000
Like there's this great plant that people continually want access to.
01:18:12.159 --> 01:18:19.279
And for hundreds of years, maybe thousands of years, we're trying to stamp it out, stamp it out, get, you know, get rid of it, get rid of it.
01:18:19.359 --> 01:18:21.199
Take this, don't take that, take this, don't take that.
01:18:21.359 --> 01:18:23.359
But people keep saying, I want this, I want this.
01:18:23.439 --> 01:18:30.640
It even goes back to you probably remember, Christian, the jazz musicians and all that sort of stuff, then into the beatniks, then into the AIDS movement in San Francisco.
01:18:30.960 --> 01:18:35.199
And over and over again, people want access to the plant, period.
01:18:35.359 --> 01:18:48.479
Some for really serious medical medical conditions like my dad that helped his change his life, some just for people like me, who I'd rather smoke a bit of weed at night than drink or take any pills or do any things, do any things, you know, do things like that, and to each their own.
01:18:48.720 --> 01:18:52.079
But for so long, we've taken that choice away from people.
01:18:52.239 --> 01:18:57.680
And that's a you know, I think, you know, I think it's fundamentally an inhumane thing to do.
01:18:57.760 --> 01:19:03.279
And I think it's one of the biggest things society has gotten wrong is by not giving us that choice to do something different.
01:19:03.520 --> 01:19:05.600
Hey, man, may not be for you, Mr.
01:19:06.079 --> 01:19:06.239
Mr.
01:19:06.399 --> 01:19:06.880
Politician.
01:19:07.119 --> 01:19:11.279
Mitch McConnell, don't want to get stoned, awesome, don't do it.
01:19:11.439 --> 01:19:14.159
Usually I don't want to drink, awesome, I don't do it.
01:19:14.239 --> 01:19:19.920
But I'm not there, I'm not out there with signs and trying to take take that away from me, even though alcohol is a million times worse for you.
01:19:20.079 --> 01:19:25.520
I would tell people not to drink, but hey, if they want to do it and kill themselves, feel bad, all that sort of stuff.
01:19:25.680 --> 01:19:26.560
That's a trade-off.
01:19:26.720 --> 01:19:28.720
That is a hundred percent their choice.
01:19:28.960 --> 01:19:35.119
And it's it is so important to point out that there is that shift going on.
01:19:35.199 --> 01:19:39.520
And the shift is just acknowledging a slight portion of reality.
01:19:39.680 --> 01:19:47.680
I don't even think that's acknowledging the full reality of the situation because I think we need much more medical information, not just on THC, but what about you know, CBN?
01:19:47.760 --> 01:19:48.880
What about THCV?
01:19:48.960 --> 01:19:50.159
What about CBG?
01:19:50.399 --> 01:20:00.239
Um, this great guy at um at Humboldt who helped help to help me out, put together a custom tincture for my dad of like THCA, CBGA, and maybe C B C A.
01:20:00.640 --> 01:20:01.760
I hardly know what those things are.
01:20:01.920 --> 01:20:07.920
And I've been the cannabis industry passionately for 10 years, and I'm just learning about these acidic forms of cannabinoids that may help people.
01:20:08.079 --> 01:20:23.520
So there's so much out there from the basic guy who just wants to smoke a joint at night to relax to really complex situations like you know, chemotherapy and somebody you know in cancer, where guys at work for my dad, just in case this is sadly he never got to take it.
01:20:23.600 --> 01:20:29.039
But what was what was given to my dad and formulated for my dad was a couple of tinctures.
01:20:29.119 --> 01:20:40.479
One was 50% CBD, 50% leaf GMO rosin for that you know, balanced THC CBD, bunch of great cannabinoids and you know terpenes and different things in the you know GMO portion that are helpful.
01:20:40.720 --> 01:20:45.840
Then on top of that, a separate tincture with these acidic forms and all of that works together to accomplish something.
01:20:46.079 --> 01:20:48.319
Do you guys know how hard that was for me to find out?
01:20:48.479 --> 01:20:50.319
Do you know how many conversations I had?
01:20:50.479 --> 01:20:52.399
Do you know what I went through to put that together?
01:20:52.479 --> 01:20:54.800
Thank God I worked for Leaf and you know, could get the rosin.
01:20:54.880 --> 01:20:59.199
Then I sent it to somebody else who did the formulation, then it was sent over here and eventually made it back to me.
01:20:59.520 --> 01:21:04.720
And that's just, you know, one example of the way that we can help people that's super complex.
01:21:04.880 --> 01:21:09.359
Then there's a simple things, guys just like me and Morgan who like to smoke a little bit of weed at night.
01:21:09.680 --> 01:21:13.680
And for so long, we've wanted to do that.
01:21:13.840 --> 01:21:17.920
And for so long, someone else is out there not just saying, I don't think you should do that.
01:21:18.000 --> 01:21:22.479
If you have an opinion, you say I don't think you should do that, but they're making it fucking illegal to do that.
01:21:22.720 --> 01:21:30.399
And yeah, I think your point is so important to wrap on uh here, Christian, because finally, you know, someone is acknowledging some of these basic facts.
01:21:30.479 --> 01:21:32.880
And again, I don't think they're even acknowledging the full truth.
01:21:33.119 --> 01:21:34.399
It's moving way too slowly.
01:21:34.479 --> 01:21:35.920
We want to get the descheduling.
01:21:36.079 --> 01:21:38.880
But I guess, Christian, when I look at the end, you know, we'll see what happens.
01:21:39.039 --> 01:21:42.880
But it feels like, you know, in some ways, like you're saying, there's maybe a huge win embedded here.
01:21:42.960 --> 01:21:49.600
And hopefully we get the financial part where 280E goes away, you know, that hopefully that goes back a few years retroactive on the treasury stuff.
01:21:49.680 --> 01:21:56.479
But I think your point there, Christian, is fantastic about the government finally realizing some of these things that all of us know.
01:21:57.279 --> 01:21:57.760
Yeah.
01:21:58.399 --> 01:21:58.800
Absolutely.
01:21:59.119 --> 01:22:00.479
Freedom 250.
01:22:02.479 --> 01:22:03.920
So let's wrap things up, boys.
01:22:04.000 --> 01:22:09.279
Thank you to FlowHub for making today's show possible with cannabis rescheduling, moving towards moving towards the goal line.
01:22:09.359 --> 01:22:12.560
The industry is continuing to evolve, evolving super quickly.
01:22:12.640 --> 01:22:15.520
And you operators out there, you have to be ready for that change.
01:22:15.760 --> 01:22:20.960
Man at leaf, we have never been busier adapting to these changes, whether it's on the retail front, the wholesale front.
01:22:21.119 --> 01:22:24.640
We didn't even get into the DEA stuff, but all of that is super fascinating too.
01:22:24.800 --> 01:22:28.399
But guys, if you've got a dispensary, you know, Morgan talked about these AI hooks.
01:22:28.479 --> 01:22:31.520
If you've got, you know, one store, you got 10 stores, you got 50 stores.
01:22:31.600 --> 01:22:36.399
It's really just a fantastic time to be looking across your tax stack and figure out what you could be doing differently.
01:22:36.560 --> 01:22:38.159
So just take take a few minutes, guys.
01:22:38.319 --> 01:22:41.600
Jump over to FlowHub.com and schedule that demo today.
01:22:41.760 --> 01:22:44.960
So thank you for for to FlowHub for continuing to support the show.
01:22:45.119 --> 01:22:46.319
We really appreciate it.
01:22:46.560 --> 01:22:48.720
Morgan Paxia, always a pleasure.
01:22:48.960 --> 01:22:50.880
Christian, thanks for joining the show today.
01:22:51.039 --> 01:22:51.840
Really great to meet you.
01:22:51.920 --> 01:22:53.359
Hope we stay in touch.
01:22:53.680 --> 01:22:54.800
Thank you, guys.
01:22:55.039 --> 01:22:56.960
And we'll see you guys again in two weeks.
01:22:57.039 --> 01:22:58.880
We're working on a show with a big operator.
01:22:58.960 --> 01:23:00.319
So we'll see if uh that works out.
01:23:00.399 --> 01:23:03.199
But Rain or Shine, we'll see you guys back here in two weeks.
01:23:03.359 --> 01:23:04.720
I always appreciate you joining us.
01:23:04.880 --> 01:23:07.279
If you're on YouTube, that channel continues to grow.
01:23:07.359 --> 01:23:10.000
I think we're pushing 360 subscribers over there.
01:23:10.159 --> 01:23:12.079
It is the biggest uh growth engine for us.
01:23:12.159 --> 01:23:13.119
So go check out YouTube.
01:23:13.199 --> 01:23:20.640
If you're on YouTube, do me a favor, like, subscribe, and if you're really a fan, hit that bell for the notifications so you know when new shows come out.
01:23:20.800 --> 01:23:21.600
That's it, guys.
01:23:21.680 --> 01:23:22.640
We're out of here.
01:23:22.960 --> 01:23:26.319
The views expressed this podcast are provided for informational purposes only.
01:23:26.479 --> 01:23:32.239
Nothing I said, Morgan said, or Christian said, should be considered research or or or recommendation.
01:23:32.399 --> 01:23:33.920
All investing involves risk.
01:23:34.000 --> 01:23:39.359
You're a cannabis investor, you know that, including the loss of principle.
00:00:01.280 --> 00:00:12.480
Welcome back to Higher Exchanges, number one independent cannabis investing show, where we break down complex cannabis markets into clear data actually used.
00:00:14.160 --> 00:00:16.079
Just Rit Morgan Pack.
00:00:30.399 --> 00:00:31.760
What is up, guys?
00:00:31.839 --> 00:00:33.520
We're back for you live listeners.
00:00:33.600 --> 00:00:35.039
We are five minutes late.
00:00:35.200 --> 00:00:36.399
I apologize for that.
00:00:36.560 --> 00:00:43.439
I am Jesse Redman, Chief Strategy Investor Relations Officer at Leaf Brands, and I'm back with the smartest cannabis investor I know.
00:00:43.600 --> 00:00:45.840
He's tan, he's grizzled, he's a veteran.
00:00:45.920 --> 00:00:46.960
He's Morgan Paxio.
00:00:47.119 --> 00:00:48.000
Morgan, how are you, man?
00:00:48.240 --> 00:00:48.799
I'm good.
00:00:48.960 --> 00:00:52.479
The tan definitely helps cover up the uh the grizzledness, right?
00:00:52.560 --> 00:00:56.640
So I know I just keep getting more and more grizzled.
00:00:57.840 --> 00:01:00.320
Yeah, no, I'm looking forward to the show today.
00:01:00.399 --> 00:01:07.519
Uh, I was just thinking as we were hearing the intro music, I was like, this today's show feels like uh especially on point.
00:01:08.079 --> 00:01:08.719
Yeah.
00:01:09.439 --> 00:01:14.879
Yeah, the uh rating suggests if you talk about political things and rescheduling, people like to hear about that stuff.
00:01:14.959 --> 00:01:18.159
And sometimes I get sick of it, man, but today it sure is topical.
00:01:18.239 --> 00:01:19.920
And I think we have a perfect guest for it.
00:01:20.159 --> 00:01:25.200
Christian Bax, welcome to the show, senior attorney at the Lockwood Law Firm.
00:01:25.280 --> 00:01:28.959
That sounds like the Ohio State University, but it's called the Lockwood Law Firm.
00:01:29.200 --> 00:01:30.560
Christian, welcome to the show.
00:01:30.640 --> 00:01:31.439
How are you, man?
00:01:31.680 --> 00:01:32.560
I'm doing very well.
00:01:32.719 --> 00:01:33.840
Thanks for having me, guys.
00:01:34.079 --> 00:01:36.000
Yeah, I was thrilled to see you for many reasons.
00:01:36.079 --> 00:01:37.439
One is that you showed up with a microphone.
00:01:37.519 --> 00:01:39.280
You look like you're a podcaster over there.
00:01:39.840 --> 00:01:40.480
Thank you.
00:01:40.719 --> 00:01:45.359
I want to make sure you guys have good, you know, you have good audio for your pod and for your audience.
00:01:45.760 --> 00:01:47.200
It is so helpful.
00:01:47.359 --> 00:01:55.920
Sometimes some of the guests that I love the most, I bang my head against the wall as they stare at their MacBook with bad sound and bad video, and you're showing up on on camera with a microphone.
00:01:56.079 --> 00:01:57.599
So, first step, very good.
00:01:57.680 --> 00:02:00.079
And uh nice to meet nice to meet you, Christian.
00:02:00.480 --> 00:02:01.280
Thank you.
00:02:01.760 --> 00:02:03.439
And so much to cover today.
00:02:03.599 --> 00:02:07.439
We have uh a packed agenda as we usually do, a ton of content.
00:02:07.680 --> 00:02:14.879
But before we jump into it, Morgan Paxia, we talked on the phone earlier this week about AI and cannabis, and we had a fun chat.
00:02:15.120 --> 00:02:17.840
Patrick on your team is doing some cool work over there.
00:02:18.000 --> 00:02:24.639
Before we get into it, do you care to tell me about how it is impacting dispensaries and how FlowHub might be able to help folks?
00:02:24.960 --> 00:02:25.599
You got it.
00:02:25.759 --> 00:02:28.319
Well, AI is changing how cannabis retailers operate.
00:02:28.479 --> 00:02:35.919
FlowHub recently launched FlowHub MCP, a new AI connector that lets you run your dispensary by talking to AI.
00:02:36.080 --> 00:02:43.039
Instead of clicking through reports and navigating your POS, simply tell AI what you want to accomplish using plain language.
00:02:43.360 --> 00:02:55.199
FlowHubMCP gives you the freedom to connect the AI tools you already use, like ChatGPT, Claude, and Gemini, so you can analyze your business, update pricing, move inventory, and create promotions.
00:02:55.439 --> 00:02:57.680
Learn more at Flowhub.com.
00:02:58.719 --> 00:03:01.280
And I can attest that uh that is very real.
00:03:01.439 --> 00:03:04.479
Our team already using it, and it's real cool.
00:03:04.879 --> 00:03:05.439
Nice.
00:03:05.680 --> 00:03:07.360
Yeah, I'll have to look into that more.
00:03:07.520 --> 00:03:10.560
I don't have a dispensary, but always curious what FlowHub is up to.
00:03:10.719 --> 00:03:16.000
And just in general life, man, you know, you and I were talking online about all the different things uh we're using AI for.
00:03:16.080 --> 00:03:20.080
And do you Claude here, do you chat over there, do you do Gemini over here?
00:03:20.159 --> 00:03:25.759
And yeah, it feels uh it feels like we're entering a new era where the more educated you can be, the more productive you can be.
00:03:25.840 --> 00:03:28.000
And yeah, shout out to Patrick Reya on your team.
00:03:28.080 --> 00:03:30.960
I'm excited to uh chat with him and see what he's doing over there.
00:03:31.039 --> 00:03:35.439
I think the ones are the innerbators and on the edge of this, I think there's gonna be a good ROI.
00:03:35.599 --> 00:03:40.560
So yeah, if you're a dispensary, check out FlowHub, see how their AI can integrate and help you out there.
00:03:40.800 --> 00:03:41.120
Yeah.
00:03:41.360 --> 00:03:42.319
I like the dual plug.
00:03:42.560 --> 00:03:49.280
It's a little bit of Flow Hub and a little bit for Patrick with the AI first cannabis um group that he's been doing.
00:03:49.360 --> 00:03:50.479
It's super interesting.
00:03:50.639 --> 00:04:03.520
I mean, just I was just on a board call earlier uh with another group that's gonna be joining in because everyone wants to know what others are doing, how they're using it, how we can learn from each other, because it's just it's it's just total white space.
00:04:03.599 --> 00:04:04.879
It's it's really cool.
00:04:05.199 --> 00:04:10.000
Yeah, and you used the word plug, which I understand why why you use the word plug, but like to me, it's just totally sincere.
00:04:10.080 --> 00:04:11.439
It's like here's where we are in life.
00:04:11.599 --> 00:04:12.240
AI is here.
00:04:12.400 --> 00:04:21.120
You got a dispensary, you wanting some software, with Patrick's thing, the like you know, partially a plug, but just more like how do we all work together in this industry to you know figure things out and get better.
00:04:21.360 --> 00:04:23.759
And I think that rolls well into you know talking about Christian.
00:04:23.920 --> 00:04:26.480
Christian, you seem like you're the perfect guest for the show.
00:04:26.560 --> 00:04:28.480
You know, super excited to talk about the hearings.
00:04:28.560 --> 00:04:33.040
I think that's the biggest thing that's been going on in the cannabis industry for the last few weeks here.
00:04:33.120 --> 00:04:35.759
Um, so it's good to get some inside perspective.
00:04:35.839 --> 00:04:42.560
But before we jump into all those details, Christian, tell me a bit about who you are and uh what you do at the Lockwood Law Firm.
00:04:43.279 --> 00:04:43.519
Sure.
00:04:43.680 --> 00:04:46.319
So I am a uh I'm a Floridian.
00:04:46.480 --> 00:04:48.399
I'm a Floridian attorney.
00:04:48.639 --> 00:04:54.959
I got my start in the industry as uh a regulator in Florida uh back in 2015.
00:04:55.199 --> 00:05:02.480
Um, worked for the state for three years and uh was the director of the OCU, which then became the OMMU.
00:05:02.720 --> 00:05:04.800
Uh left, went into private practice.
00:05:04.879 --> 00:05:07.920
I've worked in the industry for an MSO.
00:05:08.000 --> 00:05:13.920
And then for the last uh about year and a half, I've been with the Lockwood Law Firm.
00:05:14.160 --> 00:05:17.839
Lockwood Law Firm is a Florida regulatory and administrative firm.
00:05:18.160 --> 00:05:24.000
We are um very, very active in the Florida medical marijuana industry.
00:05:24.160 --> 00:05:28.639
Uh, we represent several Florida MMTCs, which are the license type in Florida.
00:05:28.720 --> 00:05:34.000
They're all vertically integrated, they're very large licensees compared to other states.
00:05:34.160 --> 00:05:35.680
Um I do a lot of that work.
00:05:35.920 --> 00:05:42.959
Um that's kind of that obviously that's kind of my bread and butter from where I'm uh my career has gone.
00:05:43.360 --> 00:06:03.360
Um and uh I'm um definitely doing a lot, uh, a lot more than I thought I would be doing last year about like federal work of working on DEA registrations, uh, helping clients kind of prepare or um understand what's happening with the federal government right now.
00:06:03.839 --> 00:06:15.279
And um that kind of led me to go up to that the the hearing that we're gonna talk about today, just kind of covering it and and trying to get as much information from that process as possible.
00:06:16.240 --> 00:06:17.759
Uh you're still digging there, Christian.
00:06:17.839 --> 00:06:19.519
I don't know if your notifications are on our office.
00:06:19.680 --> 00:06:22.319
Yeah, let me um sorry, I'm good.
00:06:22.480 --> 00:06:23.680
You're good, take a second, no stress.
00:06:26.079 --> 00:06:28.800
It's not my phone, it's my iMessages on my computer.
00:06:29.199 --> 00:06:30.160
Are you on a Mac?
00:06:30.480 --> 00:06:31.279
Yeah, I'm on a Mac.
00:06:31.600 --> 00:06:36.639
If you go to that upper right hand corner, maybe click that do not disturb button.
00:06:38.800 --> 00:06:40.399
Don't worry, we'll edit this out.
00:06:40.560 --> 00:06:43.199
I'm just kidding, I've never edited the podcast before.
00:06:44.000 --> 00:06:46.079
We'll do we'll do it live.
00:06:48.879 --> 00:06:49.759
Give you a second thing.
00:06:50.879 --> 00:06:53.360
Yeah, we'll we'll we'll we'll we'll fix it in post.
00:06:53.439 --> 00:06:54.160
Don't worry, man.
00:06:54.399 --> 00:06:54.720
Okay.
00:06:56.160 --> 00:07:07.120
Well, while while he's doing uh while he's getting that sorted out, I mean so Christian got connected to us via Emily because the uh Emily with uh the work she's doing at Sunburn has been doing a lot of work with Christian.
00:07:07.519 --> 00:07:12.879
So um this was a great opportunity to uh meet Christian and hear more about it.
00:07:12.959 --> 00:07:17.439
Um I've obviously heard a lot of great things from Emily and the work that they've done in Florida.
00:07:17.680 --> 00:07:26.000
Um so uh it's good to all be connected here today and uh digging in on this DEA situation.
00:07:26.720 --> 00:07:27.120
Yeah.
00:07:27.360 --> 00:07:30.079
How did you get into the whole cannabis industry, Christian?
00:07:30.639 --> 00:07:35.759
Um I'm one second, I'm trying to I'm trying to still do the do not disturb thing.
00:07:35.839 --> 00:07:36.160
I'm sorry.
00:07:36.720 --> 00:07:39.600
Um I think on the upper right hand corner.
00:07:39.680 --> 00:07:44.560
If you look in the hyper upper right hand corner of your Mac, mine has like a moon you can click that'll make it go into do not disturb.
00:07:45.199 --> 00:07:46.879
Yeah, more than it doesn't have that.
00:07:47.040 --> 00:07:49.120
Um how about if you go to that box?
00:07:49.279 --> 00:07:51.439
How about next to the time in the upper right hand corner?
00:07:51.519 --> 00:07:53.360
Do you see a slider box you can click on?
00:07:53.439 --> 00:07:56.240
Yeah, that has a drop that is a drop-down with do not disturb.
00:07:56.399 --> 00:07:57.040
Yeah, I see it.
00:07:57.120 --> 00:07:58.079
Okay, do not disturb.
00:07:58.240 --> 00:08:01.040
All right, do not disturb is turned on.
00:08:01.279 --> 00:08:02.160
Okay, cool.
00:08:02.399 --> 00:08:05.199
So um how I got into this industry.
00:08:05.439 --> 00:08:12.000
I um so I I actually did a uh a project when I was at um MBA.
00:08:12.079 --> 00:08:15.439
I went to uh a school that was very focused on entrepreneurship.
00:08:15.759 --> 00:08:22.879
And um the first class that they make you take, or one of the first class I make you take take there is called New Venture Creation.
00:08:22.959 --> 00:08:35.039
And so you have to pitch a business idea and then get your your classmates all kind of vote on who they think the best ideas are, and then the top five build the team for the people who weren't in that top five, and then you kind of build out a business on paper.
00:08:35.200 --> 00:08:41.279
Uh at the time, so my family uh does a lot of investing in like commercial agriculture, like Iowa corn farms.
00:08:41.360 --> 00:08:50.559
Uh my mom's from Tuscaloosa, my dad's not a huge fan of uh any kind of drugs, and so I thought, like, well, I may as well do something on paper that I would never do in real life.
00:08:50.720 --> 00:08:55.759
So we built my friends and I built a marijuana company on paper, and this was in 2013, right?
00:08:55.919 --> 00:08:58.879
So I was already uh a barred attorney at that time.
00:08:59.039 --> 00:09:07.360
Um and uh one of the things that my my best friend and I actually encountered was this whole concept of competitive applications for marijuana licensure.
00:09:07.440 --> 00:09:10.799
So being a lawyer, he's kind of a business strategy and ops guy.
00:09:11.039 --> 00:09:22.720
Um we we were kind of at the initial cresting of the competitive application process when people were really starting to think about that process was being professionalized.
00:09:22.960 --> 00:09:32.559
Um, and then I probably made the worst financial decision of my life of instead of just doing that full time, I became a regulator for the state of Florida and graded applications instead of writing them.
00:09:33.759 --> 00:09:36.879
So uh I looked to apply for um a job.
00:09:36.960 --> 00:09:40.639
I sent my resume to the state of Florida because I'm from Tallahassee.
00:09:40.720 --> 00:09:42.960
I wanted to come home from Boston.
00:09:43.279 --> 00:09:55.840
And um I I told some of the guys that I was I was sharing my resume with, hey, like show this around and and you know, feel free to edit at your leisure, like remove the cannabis stuff from it.
00:09:56.159 --> 00:10:00.559
Because this is this governor Scott administration, it's a conservative Republican governor.
00:10:00.720 --> 00:10:02.720
Um, and they were like, actually don't do that.
00:10:02.879 --> 00:10:08.080
There we there there might actually be kind of a something that's up your alley that where this is relevant.
00:10:08.159 --> 00:10:18.320
And I ended up being like employee number two at the Office of Compassionate Youth and became the director, um, which was that was my entree.
00:10:19.679 --> 00:10:20.240
Very cool.
00:10:20.320 --> 00:10:22.480
Well, it sounds like you have a great background for this, Morgan.
00:10:22.559 --> 00:10:28.320
Let's jump into these hearings, but before we get into the nitty-gritty, you want to help us uh set the set the stage here of what we're jumping into.
00:10:30.480 --> 00:10:33.360
Yeah, so what was it over the last two weeks?
00:10:33.519 --> 00:10:36.159
There was uh closed session hearings, right?
00:10:36.240 --> 00:10:43.279
There was no public uh access, so you had to be an attendee to actually hear what was going on.
00:10:43.360 --> 00:10:59.039
And this was, from my understanding, was supposed to be a narrow focus uh discussion for the DEA to, you know, they had a list of witnesses and whatnot that were coming in to talk about um rescheduling of cannabis.
00:10:59.200 --> 00:11:03.919
Um, and and again, supposed supposed to be narrower beyond medical.
00:11:04.720 --> 00:11:18.320
And um, and I honestly have not really kept up with much of the day-to-day because once I knew we were gonna have Christian on, I was like, I'll just get all caught up here today uh with what was actually going on.
00:11:18.480 --> 00:11:20.159
Where did the conversations evolve to?
00:11:20.320 --> 00:11:21.440
Did they get off topic?
00:11:21.600 --> 00:11:23.360
Like what actually happened?
00:11:23.519 --> 00:11:35.679
So um, so Christian, you know, for those like me that have not followed every day or what was available every day, what were the hearings actually designed to accomplish?
00:11:35.840 --> 00:11:37.200
Why don't we start there?
00:11:38.399 --> 00:11:51.600
So the hearing itself was um a hearing on the um notice of proposed rule from the DEA, which would reschedule the entire category of marijuana.
00:11:51.759 --> 00:12:13.840
So, as I'm I'm sure you guys and and probably a lot of your listeners are aware, is that um, you know, several months ago, the attorney general uh by final order rescheduled medical marijuana and basically said if you've already been federally approved, or if you're a licensee operating in a medical marijuana state and you are abiding by those state medical marijuana laws, you are now scheduled three.
00:12:14.159 --> 00:12:19.039
This was the entire category, the entire universe of marijuana.
00:12:19.360 --> 00:12:21.840
Um, are we going to reschedule that?
00:12:22.399 --> 00:12:29.039
And obviously, uh anybody follows this issue, there are people who are opposed to doing that.
00:12:29.279 --> 00:12:42.399
Um and they petitioned for a hearing, and um the DEA made the interesting and kind of unusual decision to exclude uh proponents.
00:12:42.639 --> 00:12:45.919
So the industry was not represented in this hearing.
00:12:46.080 --> 00:12:49.200
Um, people who are advocates for marijuana.
00:12:49.360 --> 00:12:52.799
And I'm going to stick with marijuana because of this particular thing.
00:12:52.960 --> 00:12:57.120
I understand the parlor lines between cannabis and marijuana, but the federal government, it's marijuana.
00:12:57.440 --> 00:12:58.879
And this hearing it's marijuana.
00:12:58.960 --> 00:13:02.879
So it'll just be kind of easier to stick with that, especially kind of comparing my notes.
00:13:02.960 --> 00:13:07.440
So I don't mean to say the wrong term, but I'm being specific with my language.
00:13:07.759 --> 00:13:34.399
Um so what they were basically there to do is, you know, under federal administrative law, it's incumbent upon federal government to uh to defend and support uh their proposed rule, which would reschedule marijuana, uh, against some pretty fervent um opposition from um a pretty diverse group of of uh petitioners.
00:13:36.080 --> 00:13:41.919
Do you and was it a cross-section of industries that these uh opponents were coming from?
00:13:42.080 --> 00:13:43.440
Was this a specific area?
00:13:43.519 --> 00:13:52.399
Just kind of like who who were like the major groups that were there advocating that cannabis should not or marijuana should not be rescheduled.
00:13:52.799 --> 00:14:02.399
So um the first uh uh probably the most obvious is smart approaches to marijuana, Sam, which was probably the most prolific anti-marijuana.
00:14:02.720 --> 00:14:04.159
He's a huge fan of the pod, by the way.
00:14:04.320 --> 00:14:04.720
Yeah.
00:14:05.759 --> 00:14:06.240
That's right.
00:14:06.720 --> 00:14:07.919
So Sam was there.
00:14:08.080 --> 00:14:14.080
Um the uh also there were three opposing states that had joined together.
00:14:14.159 --> 00:14:17.279
So Nebraska, Idaho, and uh Indiana.
00:14:17.440 --> 00:14:20.720
Um Sam and the opposing states actually have the same lawyer.
00:14:20.799 --> 00:14:24.320
So they both use Port and Law, they both use Bill Barr's law firm.
00:14:24.399 --> 00:14:34.240
So they're when they would run around doing at the beginning of the morning, every morning, when people are doing their introductions, the same gentleman would stand up and he was represent.
00:14:34.320 --> 00:14:37.200
Well, he and a couple other lawyers were representing both of those groups.
00:14:37.360 --> 00:14:39.759
Um, Tennessee Bureau of Investigation was also there.
00:14:39.840 --> 00:14:43.360
They are not part of that um group of three states.
00:14:43.840 --> 00:14:49.360
Um now there were also kind of there were there were two specific individuals.
00:14:49.840 --> 00:14:56.000
Um one was a uh physician and one was a uh pharmacist.
00:14:56.240 --> 00:15:01.039
And um they also put they put on witnesses, they made their case.
00:15:01.120 --> 00:15:13.200
The the physician had an attorney, the um pharmacist was pro se, so he represented himself, and he actually uh led a direct um of a of his own witness as well.
00:15:13.360 --> 00:15:30.080
Um then there was a basically a drug testing um company, an advocacy group for um uh basically looking for harsher penalties on marijuana, harsher restrictions on marijuana in order to prevent um intoxicated driving.
00:15:30.320 --> 00:15:38.080
Um so as you can see, like a very kind of wide array of perspectives um on people who would oppose marijuana.
00:15:39.600 --> 00:15:50.320
Do you so if the position of the DEA is only inviting those that are opposed rescheduling, does that mean they have a position on it?
00:15:50.399 --> 00:16:00.399
Or I'm just trying to like get a sense of what were they trying to accomplish and like what were they what what were like some questions that they were looking to discover in this in these hearings?
00:16:00.799 --> 00:16:02.399
So DEA owns this issue now.
00:16:02.559 --> 00:16:06.720
I mean, the DEA has taken the affirmative position that marijuana should be rescheduled.
00:16:06.879 --> 00:16:09.200
So they are not just marijuana.
00:16:09.759 --> 00:16:10.639
What no, yeah.
00:16:10.799 --> 00:16:16.559
So this this hearing, they propose they have proposed by rule to reschedule all of marijuana.
00:16:16.639 --> 00:16:18.559
They have put that out into the universe.
00:16:18.720 --> 00:16:25.039
So unopposed, if nobody said anything and there was no hearing, that would move forward and they would just reschedule marijuana.
00:16:25.200 --> 00:16:27.759
Um, so DEA now owns this issue.
00:16:28.000 --> 00:16:32.799
The reason uh I have I didn't I talked to some of the DEA attorneys.
00:16:32.879 --> 00:16:44.720
I haven't specifically on the record gotten them to say this, but um the the legal reason why they didn't allow industry or advocates in to speak was because they're they're really not affected parties.
00:16:44.879 --> 00:16:48.399
Like they're they're they benefit if the rule goes through.
00:16:48.480 --> 00:16:54.879
And if the rule doesn't go through, well, it's like they were gonna argue it for to for it to go through anyway.
00:16:54.960 --> 00:17:02.960
The people who are affected would be the people they're already in litigation with or the people who are threatening to sue them over uh rescheduling marijuana.
00:17:03.279 --> 00:17:21.599
Um, now the practical reason why they don't want those people in the room, they don't want industry or advocates, is because it's very important for the DEA, uh, and we'll get into what they're specifically asserting um in their case, but they don't want people testifying that marijuana has no harms.
00:17:21.839 --> 00:17:29.279
DEA take the position marijuana should be rescheduled, but DE on marijuana affirmatively has harms.
00:17:29.920 --> 00:17:32.799
That's important because they want marijuana to stay scheduled.
00:17:32.960 --> 00:17:40.799
If if they had people testifying that marijuana doesn't cause harms, has no propensity for abuse or very, very low propensity for abuse.
00:17:40.880 --> 00:17:43.599
It basically should be scheduled similar to alcohol.
00:17:44.160 --> 00:17:46.559
Um it disrupts their case.
00:17:46.640 --> 00:17:48.400
It it kind of muddies the record.
00:17:48.559 --> 00:18:05.920
And so in his opening statement, the lead attorney for DEA said, let me be clear, when we're talking about marijuana, one of the ways it's very important to think about this judge is that um every party you're gonna hear from in this hearing concurs that marijuana has harms.
00:18:06.160 --> 00:18:10.079
So boom, you have now ensured marijuana should be scheduled.
00:18:10.160 --> 00:18:11.200
That's the first step.
00:18:11.440 --> 00:18:17.200
The next step is okay, now marijuana must be removed from schedule one.
00:18:17.440 --> 00:18:22.000
And then schedule three, now we're just debating about which schedule two through five marijuana should be in.
00:18:23.359 --> 00:18:25.119
Huge implications are huge.
00:18:26.480 --> 00:18:27.519
Yeah, very big.
00:18:27.839 --> 00:18:34.640
Um so I mean their affirmative case basically comes down to like three things that they essentially need to probe.
00:18:34.880 --> 00:18:52.160
So, first is that marijuana um based on a two-part test, which they basic basically created to reschedule marijuana, um, that it should not be schedule one, that there is um that there is a medical use for marijuana.
00:18:52.400 --> 00:18:58.240
Uh the second would be that there is a moderate or low um potential for abuse of marijuana.
00:18:58.319 --> 00:19:06.960
And then the third would be that there is some accepted safety, uh, but there is accepted safety for use under medical supervision for uh for marijuana.
00:19:07.039 --> 00:19:19.839
So these are kind of the the overarching three things that when you're making a uh like a debate flow that they're trying to assert that then the opposition is then needs to attack because those are the legal criteria for what they're trying to do with marijuana.
00:19:20.240 --> 00:19:22.000
So one last remain, I'll pass it to Jesse.
00:19:22.160 --> 00:19:29.359
But uh that so I did see you shared some notes from the after day one, and it seems like this was potentially consistent throughout.
00:19:29.599 --> 00:19:35.519
But if this is talking about full rescheduling, medical's already be rescheduled.
00:19:35.839 --> 00:19:56.319
Why was there so much talk about the medical aspect of it instead of just the you know, because to me that still seemed very very much what's already been done instead of and and gave the potential opposition more to try to attack versus you know moving to just full rescheduling.
00:19:56.799 --> 00:19:58.880
Does that make sense when what I'm trying to get at?
00:19:59.200 --> 00:20:00.000
Yeah, it does.
00:20:00.160 --> 00:20:31.200
I mean, I think it's because of the procedural posture of what DEA has chosen to do, and what frankly what FDA uh recommended that they do, which is um, well, so um the way the way federal just taking a quick step back, um, and I'll and then I'll get there, is that the way that this rescheduling process works is FDA uh uh via HHS makes a recommendation to DEA, and that's partially legally binding and partially uh uh like advisory.
00:20:31.359 --> 00:20:43.039
So it's legally binding in the sense that if FDA tells HHS and HHS tells DEA, this this drug or uh or compound should not be scheduled, DEA doesn't have the authority now to schedule it.
00:20:43.519 --> 00:20:54.400
Um but if they say it should be scheduled, DEA has a decision of like how it where based on FDA's advice, where it should be scheduled or where it should be rescheduled.
00:20:55.200 --> 00:21:03.680
So because DEA is taking the position that this is a drug that should be scheduled, it's a drug.
00:21:03.839 --> 00:21:05.839
It's it's covered by the FDA.
00:21:06.160 --> 00:21:18.960
So the determinant of which schedule it falls under, one, two, three, four, or five, is based on medical criteria, what this medical science says about what it does, um what its potential for abuse would be.
00:21:19.119 --> 00:21:22.240
And this was this was a very strange argument.
00:21:22.640 --> 00:21:52.640
Um and I frankly, I think all of the attorneys involved in this case, DEA and the opposition and the judge, kind of struggle with this because never in American history, like not never in this system that we've built with FDA and DEA, um, their their collaboration for scheduling drugs, have we had a drug that's we're we're basically saying an entire you know organic plant matter should be scheduled as a drug rather than a specific identifiable compound.
00:21:53.039 --> 00:21:59.119
Um and because of this kind of very and and it's already exists, it's already very widely consumed.
00:21:59.200 --> 00:22:03.039
Um there's Already a lot of science to spec that this is Schedule One.
00:22:03.279 --> 00:22:08.319
It's the one of one of, if not the most studied drug in America right now.
00:22:09.119 --> 00:22:14.240
When you go on PubMed, it's think there's like 10,000 articles that you can pull up that are about marijuana.
00:22:14.640 --> 00:22:17.440
So it's very much a square peg and a round hole.
00:22:17.519 --> 00:22:24.319
Like the alcohol got the benefit of basically getting the treatment that it did and getting exempted.
00:22:24.480 --> 00:22:27.680
Because like alcohol would have the exact same problems marijuana does.
00:22:27.759 --> 00:22:34.400
But the problem is now they're having to kind of justify, okay, based on our scheduling system, how do we make this work?
00:22:34.960 --> 00:22:41.519
And we're focusing on like the DEA was very intentional to the judge.
00:22:41.680 --> 00:22:49.759
You need to not think about all of the elements that go into recreational use, the potential harms, the political and social impacts.
00:22:49.839 --> 00:22:50.799
That's not material.
00:22:50.960 --> 00:22:56.160
What's material is you have to look at the compound itself, at the drug marijuana, the category.
00:22:56.400 --> 00:23:17.279
And you have to analyze it based on whether or not has um you know an accepted medical use, that there's science that supports that that medical use is, you know, that is essentially effective for that use and that it's safe, and that this thing isn't so super addicted that it it should be um kept in schedule one or schedule.
00:23:17.519 --> 00:23:20.640
I mean, I'm sorry, it couldn't be in schedule one, it should be kept in schedule two.
00:23:23.599 --> 00:23:28.960
Yeah, I think the problem, I mean, the problem for me with this whole thing is that there's the the whole premise is fundamentally flawed.
00:23:29.119 --> 00:23:42.079
Like even not talking about whether cannabis could be should be descheduled, which should be a distraction to today's conversation, is that you're taking a plant and you're trying to bifurcate it into two things, medical and adult use, which to me is a flawed premise in the first place.
00:23:42.240 --> 00:23:45.680
But then you say, okay, medically this plant is schedule three.
00:23:45.759 --> 00:23:52.480
Figure out what the goddamn same same thing is for somebody who classifies themselves arbitrarily as adult use.
00:23:52.640 --> 00:23:58.480
And so I go buy an ounce of flour, I share half of it with my dad, who's a medical patient, I smoke half recreationally.
00:23:58.640 --> 00:23:59.680
What is that flower?
00:23:59.759 --> 00:24:01.440
And the flower doesn't know what it is, right?
00:24:01.599 --> 00:24:05.920
The flower just knows that it's helping you, but it doesn't know if it's schedule one, schedule three, or descheduled.
00:24:06.079 --> 00:24:12.000
And so, like, I always feel like I have some obligation to just object to the premise.
00:24:12.079 --> 00:24:16.880
And I'm sitting here on Chat GPT seeing that Xanax is schedule four.
00:24:17.039 --> 00:24:17.359
Yeah.
00:24:17.680 --> 00:24:20.000
It's just like, Jesus Christ, guys, this makes no fucking sense.
00:24:20.079 --> 00:24:24.720
Like alcohol, which kills, I don't know how many hundreds of thousands of people, cigarettes kill hundreds of thousands of people.
00:24:24.960 --> 00:24:28.640
Xanax, go take that for three months and try to get off of it and tell me how that one goes.
00:24:28.799 --> 00:24:30.079
Is that one not highly addictive?
00:24:30.160 --> 00:24:31.920
Does that that one not have potential for abuse?
00:24:32.079 --> 00:24:32.960
Oh, that's schedule.
00:24:33.119 --> 00:24:33.759
What did I say?
00:24:33.920 --> 00:24:34.240
Four.
00:24:34.480 --> 00:24:36.000
Fentanyl is schedule two.
00:24:36.400 --> 00:24:36.720
I know.
00:24:36.880 --> 00:24:40.160
So, like the whole thing, I mean, uh, this is a distraction of the conversation, but just hearing.
00:24:40.799 --> 00:24:42.799
I'll tell you who agrees with you, Jesse.
00:24:43.039 --> 00:24:44.160
I'll tell you who agrees with you.
00:24:44.319 --> 00:24:44.799
The judge.
00:24:44.960 --> 00:25:00.079
The judge in this case agrees with you in that sense that this this this distinction that we've drawn between medical and recreational, like it at the end of almost every witness's testimony, whenever when everybody was done asking questions, he would say, Okay, I have a question for you, uh witness.
00:25:00.240 --> 00:25:11.119
And he would either show or read the federal definition of marijuana, which does not make a distinction between recreational and medical, and says, Is this what you understand marijuana to be?
00:25:11.200 --> 00:25:15.440
And he's like, and made it very clear that is what he thinks about medical marijuana.
00:25:15.519 --> 00:25:20.240
I mean marijuana in general, not that he he does not draw a distinction between medical and recreational.
00:25:20.319 --> 00:25:22.720
He is considering the entire category itself.
00:25:23.039 --> 00:25:23.519
Yeah.
00:25:23.839 --> 00:25:25.039
Which just makes total sense.
00:25:25.200 --> 00:25:31.599
And so I feel like some moral obligation to object to the fundamental fundamentally flawed premise of dividing one plant into these two categories.
00:25:31.680 --> 00:25:36.000
And that the distinction between adult use and medical is also relatively arbitrary.
00:25:36.240 --> 00:25:43.039
And as Dennis Perrone said back in the day, all cannabis users or medical patients, whether they know it or not, he said it much better than that.
00:25:43.119 --> 00:25:44.960
But I think that's a valid thing also to bring up.
00:25:45.039 --> 00:25:49.680
Like if you're using cannabis regularly, take a look in the mirror and figure out if it's medical or really recreational.
00:25:49.759 --> 00:25:56.319
Because a lot of us, like me, who use cannabis on a regular basis, I'm probably using it for sleep or anxiety or whatever it is.
00:25:56.480 --> 00:25:58.960
But I just throw it in the category of, oh, you want to get stoned.
00:25:59.039 --> 00:26:03.039
It's like, no, I'm choosing a different alternative to you know the outcome that I want.
00:26:03.279 --> 00:26:05.920
So uh enough of Jesse's philosophical ramblings.
00:26:06.000 --> 00:26:06.799
Let's get back to the show.
00:26:06.880 --> 00:26:09.039
Um The DEA made the point that you just made.
00:26:09.200 --> 00:26:11.279
They threw their witness, Corey Birchman.
00:26:11.359 --> 00:26:18.240
So they everybody was allowed two witnesses, and one of the DEA's two witnesses is a pain management physician out of New Hampshire.
00:26:18.559 --> 00:26:20.480
And that that's on the record.
00:26:20.559 --> 00:26:25.680
They asked him about that distinction, and he's like, I don't draw a distinction between medical and recreational marijuana.
00:26:25.920 --> 00:26:34.640
Frequently, a lot of recreational, what we deem adult use, is really just people without a medical card or without doctor supervision treating a medical condition.
00:26:34.720 --> 00:26:37.440
That would that is something that the DEA got on the record.
00:26:37.759 --> 00:26:39.119
Well, we can't recreate.
00:26:41.920 --> 00:26:47.440
It's official, which is which is one of the most shocking things is the positions that DEA took.
00:26:47.680 --> 00:26:49.680
It's like bizarro world.
00:26:49.759 --> 00:26:58.640
It's it's it's like if you got in a time machine, DEA of of 2018 would not recognize the DEA's positions of 2026.
00:26:58.720 --> 00:27:00.480
It's striking.
00:27:02.160 --> 00:27:04.079
Yeah, last uh anecdote on that.
00:27:04.240 --> 00:27:13.519
My my son, who is 16, you know, goes to high school in Santa Barbara, and so people are smoking weed, ripping vape pens, you know, the the whole thing, you know, welcome to California in 2026.
00:27:13.920 --> 00:27:18.880
And uh he has one friend uh who uh smokes, you know, hits his vape cart all the time.
00:27:19.039 --> 00:27:24.720
So I was like digging in a little bit, like, well, tell me about the kid, because in my mind, I'm like, this kid is probably just treating something medically he doesn't know.
00:27:24.799 --> 00:27:29.920
And he's like, Yeah, he has ADHD, and his dad won't let him take you know any of those Ritalin or other medications.
00:27:30.079 --> 00:27:44.799
So the kid who's 16 is looking for an answer to how he feels, and so he you know is hitting the vape cart, you know, which people view as the kid's a stoner or you know, he's looking to get high when really the kid is probably just treating in the background this medical problem, you know, in a different in a different way.
00:27:45.519 --> 00:27:53.039
And so anyway, I just think these conversations you know are important broadly about cannabis, but getting you know back into this hearing specifically, just take take us inside.
00:27:53.119 --> 00:27:56.559
I think that's what people are really here, you know, here for Christian, is we're sitting on the outside.
00:27:56.640 --> 00:28:04.240
I'm catching some other MIDI reports, I'm catching some Dale's report, I'm reading some marijuana moment, I'm over there on uh well, MJ Biz, you know, whatever we got out there.
00:28:04.319 --> 00:28:05.839
I'm just trying to soak in what's happening.
00:28:05.920 --> 00:28:08.319
But you know, bottom line, you're the dude that was in the room.
00:28:08.480 --> 00:28:09.599
So take us inside there.
00:28:09.680 --> 00:28:11.119
Like what what stood out for you?
00:28:11.279 --> 00:28:15.440
Like if you're talking to an audience of ours and they're like, hey man, this guy was in the room, what the hell happened?
00:28:15.599 --> 00:28:17.920
Like, give us the bottom line of what what what stood out the most?
00:28:18.000 --> 00:28:18.640
What shocked you?
00:28:18.720 --> 00:28:20.000
What are the takeaways?
00:28:20.400 --> 00:28:22.720
Well, I I guess I'll start at the beginning.
00:28:22.799 --> 00:28:27.039
I was very surprised with the lack of um industry presence there, honestly.
00:28:27.119 --> 00:28:29.200
Um and frankly, media presence too.
00:28:29.279 --> 00:28:38.000
So like I I I'm one of I think three people in the gallery that was like not an employee of the DEA that was there for all two and a half weeks.
00:28:38.240 --> 00:28:44.720
And like, so the pre they they when you walk into this room, it's a very it's a small hearing room.
00:28:44.799 --> 00:28:54.880
So there's two two different uh rows, I mean two different sets of five rows of uh wooden seats that look like oversized church pews, very uncomfortable.
00:28:55.039 --> 00:29:00.319
Um, and then on the other side of the bar is uh you know three sets of tables.
00:29:00.480 --> 00:29:10.240
So one for Sam's lawyer, one for everybody else, opposing attorney's lawyers, and then uh the DEA lawyers, and then you have the you know the bench with the judge and where the witnesses sit.
00:29:10.880 --> 00:29:29.440
But you know, of those five rows, one was one row was reserved for like the DEA bench, and then the back row was reserved for media, and like there were at most like two reporters at any given time, I think a total of maybe six reporters the entire time we were there.
00:29:29.839 --> 00:29:43.519
Um, so like you'd see someone, it was it was, you know, I'm not gonna bash anybody, but like you'd see people on YouTube or on podcasts or whatever from the media talking about what's going on, and like they were no them and no one from the organization was in this room.
00:29:43.599 --> 00:29:53.759
It was basically, I think that New York Times was I might I might be missing like one person, but New York Times was really the only like general interest media that I I saw or interacted with.
00:29:53.920 --> 00:30:11.599
Everybody else was kind of um marijuana focused, but there were some people who you would think would be in that room who were not, and then the industry really wasn't some there were a couple attorneys or people who kind of represented law firms from attorneys who were there, but um it really wasn't that well attended.
00:30:11.759 --> 00:30:16.720
And I got there at five in the morning on the first Monday that it started.
00:30:16.960 --> 00:30:23.440
Um, and I did that because I kind of flew up because I was interested, my clients are interested, but I I wasn't there for a particular reason.
00:30:23.680 --> 00:30:30.960
And I thought it was gonna be, you know, lying out the door, you weren't getting into this small room, and then you can't you can't watch it.
00:30:31.039 --> 00:30:33.759
And so my boss basically paid for me to fly to DC for nothing.
00:30:33.839 --> 00:30:42.960
So I was like, I promise you, boss, like I'm gonna wake up at 4 50 in the morning, get dressed in my suit, get get a Starbucks, and then just stand outside for four hours.
00:30:43.200 --> 00:30:50.400
And there were a couple people who actually beat me there because they were like the paid line holder people in DC that like people who go pay to stand in line for them.
00:30:50.640 --> 00:30:59.920
But then um as the days went on, you still needed to get there early because if you got if you got there later than like 8 50, they wouldn't just wouldn't let you in the building.
00:31:00.160 --> 00:31:03.440
Um, and then there was always a small chance that you would get knocked out.
00:31:03.599 --> 00:31:05.039
But that was the first thing.
00:31:05.119 --> 00:31:09.599
So small room, it wasn't televised, not a whole lot of people there.
00:31:09.839 --> 00:31:18.400
And I think part of that reason is I think a lot of people, even in the industry, did not understand this hearing dealt with rescheduling all of marijuana.
00:31:18.880 --> 00:31:21.519
Um, and that's something I've tried to really beat the drum on.
00:31:21.680 --> 00:31:22.880
This is something that's being considered.
00:31:22.960 --> 00:31:24.799
Like we should all be paying attention to this.
00:31:25.279 --> 00:31:30.640
Um, the other thing, so I let I'll talk a little bit of meta about kind of the vibe.
00:31:30.880 --> 00:31:34.160
Um mentioned it's weird DEA's taking this position.
00:31:34.400 --> 00:31:39.759
Um DEA, I would say if I had to describe DEA's case, it was basically brute force.
00:31:39.839 --> 00:31:44.480
So it was like they have their theory of the case, it's very minimalist, it's very specific.
00:31:45.279 --> 00:31:58.799
Um and if the opposition made arguments outside of that case, that like a three-pronged case, basically, they pretty much never objected.
00:31:59.200 --> 00:32:10.799
So in in Florida, like if I'm in an administrative case on even like a basic rule challenge, um basically, whenever you're making traction, it's almost like calling time out in a you know an NBA playoff game.
00:32:10.880 --> 00:32:15.839
You you disrupt the other side, you try to keep the record from being pristine for them.
00:32:16.079 --> 00:32:16.640
They did not.
00:32:16.720 --> 00:32:21.920
Really, the only objections they consistently made were like relevance objections, and it was very rare.
00:32:22.160 --> 00:32:30.160
Um, and so you had this thing where DEA was basically letting these guys tee off on them.
00:32:31.680 --> 00:32:32.880
We don't we just don't care.
00:32:33.119 --> 00:32:34.720
That was very striking.
00:32:34.880 --> 00:32:37.680
Um, that particular strategy.
00:32:38.559 --> 00:32:41.119
Were there were there any compelling arguments against?
00:32:41.200 --> 00:32:52.079
Like I think we could all sit here and you know um, you know, rally each other and talk about how awesome cannabis is and you know why it should be schedule three at a minimum and probably logically be descheduled.
00:32:52.240 --> 00:32:53.680
I think we know those arguments well.
00:32:53.759 --> 00:33:01.039
And I think most of our audience sitting here is, you know, not just financially campaigning for schedule three, but I don't know anyone really involved with the cannabis industry.
00:33:01.119 --> 00:33:05.839
I don't know anyone, honestly, that uses cannabis that would argue, you know, schedule one or two makes sense.
00:33:05.920 --> 00:33:08.160
It seems like people that are pretty out of touch with the plant.
00:33:08.319 --> 00:33:11.839
But I want to be objective and say, like, is there something on the other side of this?
00:33:11.920 --> 00:33:14.880
Like, I've got this woman, Bertha, yelling at me on X right now.
00:33:14.960 --> 00:33:19.359
I don't even know who this person is, but someone named named Bertha was just yelling at you on Twitter.
00:33:19.599 --> 00:33:23.119
Yeah, she's yelling, uh yelling at me on X that cannabis has no medical use.
00:33:23.200 --> 00:33:33.200
And I'm, you know, honestly, I'd like to swear to the podcast, but fuck off is my attitude to that, because my dad, who unfortunately passed away a couple of days ago, not looking for sympathy, but I just want to you know frame the conversation.
00:33:33.440 --> 00:33:36.400
He, you know, had chronic regional pain syndrome his whole life.
00:33:36.480 --> 00:33:41.440
You know, by the time he was my age, he was, you know, retired and disabled from car crashes that he got into.
00:33:41.599 --> 00:33:45.359
He got so he's taking a thousand milligrams of oxycontin a day, an insane dose.
00:33:45.519 --> 00:33:47.680
Oxycontin usually comes in 30 milligram pills.
00:33:47.759 --> 00:33:50.799
That's 33 of those a day that he was taking, and not for fun.
00:33:50.880 --> 00:33:54.480
It's because he's in so much pain from this chronic regional pain syndrome.
00:33:54.559 --> 00:34:03.200
He got involved in cannabis in 2015 and completely changed his life and eventually completely got off opiates by using cannabis as his primary pain pain management tool.
00:34:03.359 --> 00:34:09.119
Everything about his life got better, pain got better, personality got better, all the horrible side effects from opiates went away.
00:34:09.199 --> 00:34:12.800
And then this woman online is only is yelling at me, telling me that cannabis has no medical use.
00:34:12.880 --> 00:34:13.679
And it's like, fuck you.
00:34:13.760 --> 00:34:14.800
I just watched it my in my life.
00:34:14.880 --> 00:34:17.119
I just watched it with the person closest to me, which is my dad.
00:34:17.280 --> 00:34:21.760
And I also had a dispensary where I helped thousands of people with real problems.
00:34:21.920 --> 00:34:26.800
And so, like, I get the I get and very passionate that it's not schedule one, it's not even schedule three.
00:34:26.880 --> 00:34:29.760
But if we land on schedule three now for now, fine.
00:34:30.079 --> 00:34:36.559
But my question with this drastic traumatic framing is was there what's the compelling argument against that?
00:34:36.639 --> 00:34:38.880
Because it is not what Bertha's framing to me here.
00:34:40.400 --> 00:34:45.199
So I I guess there's two categories of arguments.
00:34:45.360 --> 00:34:55.599
There's a process and procedural argument, and then there's kind of the nitty-gritty attacking the three prongs that I mentioned that that um that DEA is putting forward.
00:34:56.239 --> 00:35:03.760
So um the the procedural one is what I think is probably the most compelling.
00:35:03.920 --> 00:35:07.599
I I just for the record, I think that DEA is going to prevail here.
00:35:07.679 --> 00:35:10.960
I think they're either going to get a favorable recommendation from the judge.
00:35:11.920 --> 00:35:18.079
The way that this works is that uh not to bury the lead, but the the judge will make a recommendation to DEA.
00:35:18.239 --> 00:35:19.840
DEA ultimately is the arbiter.
00:35:19.920 --> 00:35:24.400
They get to decide whether or not they accept that recommended order, they put out something totally different.
00:35:24.559 --> 00:35:34.159
And I think DEA is either going to get a favorable ruling and just accept it, or they're gonna get a negative ruling and they're gonna be like pound sand, we're gonna do it, we're we're gonna go to appeal no matter what.
00:35:34.239 --> 00:35:36.239
So let's just see in circuit court.
00:35:36.400 --> 00:36:03.119
Um, but rewinding, the procedural argument I think is probably going to be more um fleshed out and come even more compelling at the circuit level than it was in administrative level, but it's still worth mentioning, which is the process by which uh HHS ultimately like determined that they should recommend to DEA that uh this should be rescheduled.
00:36:03.440 --> 00:36:09.920
So this is a little wonky, uh, but I'm gonna keep it kind of high level and we can we can drill down if you guys want to on any particular thing.
00:36:10.079 --> 00:36:29.199
But typically when FDA considers a drug for rescheduling, they use what's called a five-factor test because uh the the easiest way to get scheduled is f something gets FDA approved, and then they figure out what schedule that drug is is going to be because you've gone through the FDA process.
00:36:29.599 --> 00:36:40.960
Uh when you don't have an FDA approval, but you want to reschedule a drug, they they use what's called a five-factor test, and they've used this for every drug before marijuana and since for rescheduling.
00:36:41.280 --> 00:36:52.559
And that basically mimics the ultimate conclusions of FDA without kind of that precise double blind uh certainty that you kind of get from uh vetted FDA trials.
00:36:53.199 --> 00:37:05.840
Um marijuana did not use that, and it's because there are there are elements of marijuana that really it's very difficult to for it to conceivably make it through the five factor test.
00:37:05.920 --> 00:37:15.760
So, like one of the requirements of five factor tests is that it be standardized, uh, that it you'd be the drug itself that's being rescheduled, have uh reproducibility.
00:37:15.840 --> 00:37:19.440
So it's like you can you can do the same thing over and over and over and get the same result.
00:37:19.840 --> 00:37:26.559
Um that you have these kind of very precise causal uh demonstrated scientific studies.
00:37:27.039 --> 00:37:29.519
Um and that that's tough for marijuana.
00:37:29.599 --> 00:37:32.079
And so they have they created this two-part test.
00:37:32.960 --> 00:37:45.039
And so it basically for that process, you have to prove wise w widespread medical use and you have to prove credible support um for for use from like from studies, basically.
00:37:45.280 --> 00:38:22.800
And so the point that they got they got the you know, the opposition cross-examined the uh a doctor from the FDA that was part of this rescheduling analysis, and they got him to uh a concede that marijuana would not pass uh the five-factor test, and then stated that you know he worked on this for eight or nine months, this ultimate decision, and they made the decision to move to a two-factor test in like with two months left, and that that decision was basically handed down to him by his bosses, whose bosses told him to do that by fiat.
00:38:23.119 --> 00:38:32.880
So, what the opposition is basically kind of trying to create the impression that this was a political process, as this was arbitrary, that this was capricious, and that this is not backed by science.
00:38:33.039 --> 00:38:38.960
This is a they basically had a result they wanted to get to, and they engineered a bureaucratical way to get there.
00:38:39.199 --> 00:38:51.519
Um, I think that I mean, DEA obviously had answers to that, but that's some that is an issue you are going to see Sam and the opposed states focus on um at the circuit level.
00:38:52.159 --> 00:38:56.480
Um, you know, there were there were some compelling witnesses, I think, on the on the other things.
00:38:56.639 --> 00:39:07.599
I think um, you know, testifying about I but it there are things that you you would concede that you would understand, but then DEA's argument is what anyone in the industry argues, which is like things like diversion.
00:39:07.679 --> 00:39:12.880
Yes, we understand there are problems with diversion, but uh like there are problems with diversion with fentanyl.
00:39:12.960 --> 00:39:21.199
But that does not mean by definition fentanyl is a schedule one drug because it's not um that there are problems with you know intoxicated driving.
00:39:21.360 --> 00:39:26.159
Well, uh if you get hopped up on opioids and you drive a car, you you too will cause an accident.
00:39:26.239 --> 00:39:32.159
And nobody's really arguing that people should get high to like pop a 300 milligram edible and then drive a car.
00:39:32.320 --> 00:39:36.960
So how how about if I take a descheduled drug like alcohol and drive?
00:39:37.039 --> 00:39:37.760
How does that work?
00:39:38.079 --> 00:39:38.639
That's right.
00:39:38.880 --> 00:39:39.360
That's right.
00:39:39.440 --> 00:39:48.159
And so so that there's a very that's why I said DEA was very brute force, which was they said, okay, we have three things, only three things that we're pushing.
00:39:48.320 --> 00:39:52.880
First of all, marijuana should not be a schedule one drug because it has medical use.
00:39:53.039 --> 00:39:54.000
That's all we have to do.
00:39:54.079 --> 00:39:55.280
We have to show one medical use.
00:39:55.360 --> 00:39:59.920
And they focused, I think very intelligently, they were very conservative with their approach.
00:40:00.079 --> 00:40:07.840
They said, we are not trying to prove, you know, there's a couple hundred uh conditions that marijuana is recommended, recommended for if you combine all the state programs.
00:40:08.000 --> 00:40:22.639
We are focusing on pain, specifically neuropathic pain, on anorexia related to other medical conditions like AIDS, um, and nausea related to like other conditions or treatments for those conditions like chemotherapy.
00:40:23.039 --> 00:40:37.199
So, like, probably the lowest hanging fruit, and I would say from an evidentiary perspective and from a like a scientific perspective, you know, it's also smart because those are some of the hardest conditions to disprove that you like don't feel better.
00:40:37.280 --> 00:40:50.000
So if you have pain, like it's very hard for opposition to prove that the people who are feel like they're benefiting aren't actually benefiting because who else it's very difficult to objectively judge pain, which is also you know, it cuts both ways.
00:40:50.079 --> 00:40:57.360
It's it's the opposition tried to say like that that that basically invalidates the study that all of this is stuff is relative and impossible to prove.
00:40:57.599 --> 00:41:12.800
But when the federal government puts its stamp of approval on something that says we believe this, it's um the people forget how freaking powerful and resourceful and like um it's very difficult to knock the federal government off of the position once it takes it.
00:41:14.400 --> 00:41:18.559
We've been dealing with that up until this point to get to this point, yeah.
00:41:18.960 --> 00:41:28.719
And and that was really something it was so interesting to watch the federal government do this too, because it was like it's a case study in what happens when the federal government wants to admit it's wrong.
00:41:28.880 --> 00:41:43.519
Like, how does it how does the federal government admit it's wrong and change its opinion in real time when it's put I mean, like we they they refused to reschedule in the 200 teens, and and there's record of that, like that was cited by the opposition.
00:41:43.599 --> 00:41:46.559
Like, how do you reconcile changing your mind over the course of a decade?
00:41:46.719 --> 00:41:49.519
And they did their best to to try to justify that.
00:41:50.480 --> 00:42:00.559
Yeah, I don't want to turn this into something emotional for me, but yeah, my dad went through chemotherapy, and one of the last like meaningful moments that we had was he felt like complete shit from this whole experience.
00:42:00.800 --> 00:42:10.320
And uh he we have a uh CPG brand at Leaf called Himalaya, and he my dad hadn't smoked weed in two months because he was so fucked up from this uh experience.
00:42:10.480 --> 00:42:15.199
He was like in the hospital for 36 days and like it won't go to the whole thing, but about as bad as you could get.
00:42:15.280 --> 00:42:19.679
And he was home for a while and uh he looked at me and he said, Jesse, do you have any weed?
00:42:19.840 --> 00:42:21.360
I'm like, Yeah, of course I have weed.
00:42:21.920 --> 00:42:23.519
As long as you've known me, I've had some weed.
00:42:23.599 --> 00:42:25.519
You know, just tell me which form factor you like.
00:42:25.679 --> 00:42:28.480
And uh, so it seemed like easiest for him to hit a vape cart.
00:42:28.559 --> 00:42:30.960
And so I went and gave him a vape cart and he took two hits off of it.
00:42:31.119 --> 00:42:34.880
He hadn't smoked in, like I said, in two months because his his condition.
00:42:35.360 --> 00:42:37.599
And it was the thing that just made him feel the best.
00:42:37.760 --> 00:42:40.800
And he looked at me and he said, Jesse, he's like, this is magical.
00:42:40.960 --> 00:42:43.920
He's like, I can't believe how much better I feel.
00:42:44.159 --> 00:42:49.440
It's like he got really inspired for a while after being like so crushed from you know all the things that were going on.
00:42:49.599 --> 00:42:54.480
And like one of the last things that like meaningful conversations he had is he's like, where can't you get this stuff?
00:42:54.559 --> 00:43:00.159
I said, Well, if you're in Nebraska, I I don't know all the states, you know, South Carolina, like what are your what are your prohibition states?
00:43:00.239 --> 00:43:04.800
And he like gave me this impassioned speech about like what to do with my life to try to change that.
00:43:05.039 --> 00:43:11.920
And so I think that like when you look at this, it's I don't know, man, like a partially we're talking about procedural thing, but we're also talking about like a people thing.
00:43:12.079 --> 00:43:19.119
When you talk about like chemotherapy and like the benefit to those people, it's like it's an inhumane thing to continue to do what we're doing.
00:43:19.199 --> 00:43:22.480
It's a inhumane thing to have like something so helpful to people.
00:43:22.559 --> 00:43:27.760
And if you're in fucking Nebraska and you have chemotherapy and you're dying, you know, we're gonna prevent you from having access to this.
00:43:27.840 --> 00:43:36.800
And I understand there's like state level issues here and it's more complex, but man, like when you get into if you're like deep into this stuff, like all of us are, and you're deep into like the personal part of it.
00:43:36.960 --> 00:43:48.480
Some of this stuff is just like so offensive to think that like, you know, Morgan's been through this stuff personally as well, that like people trying to prevent people that need access to these things, whether you're medical or adult use.
00:43:48.559 --> 00:43:53.519
You know, I think that the whole foundation here is just like cruel and unusual in some ways.
00:43:53.599 --> 00:43:59.599
And um, it's a bit of a diversion from the conversation, but I think it's important because like this isn't a this is about money and all this sort of stuff.
00:44:00.000 --> 00:44:03.119
It's about relieving 2 ADE and I work for a big cannabis company.
00:44:03.199 --> 00:44:04.079
Yeah, yeah, I get it all.
00:44:04.159 --> 00:44:06.800
But at the end of the day, it's like, how can we improve people's lives?
00:44:06.880 --> 00:44:08.400
Like, that's why I think you should be in this industry.
00:44:08.480 --> 00:44:10.480
I think that's like the North Star for all of this.
00:44:10.639 --> 00:44:12.000
And like to hear these conversations.
00:44:12.079 --> 00:44:21.280
Yeah, you're talking about things like chemo, chemotherapy, and chronic pain, and to watch somebody, you know, in my own life go through this stuff and have the conversations about, you know, whether we should give people access to this.
00:44:21.360 --> 00:44:25.920
It's just like, you know, it's just the whole thing just strikes me as a bit insane when you take some steps back to it.
00:44:26.000 --> 00:44:28.800
Like it's cool we're going through this nitty-gritty process.
00:44:28.880 --> 00:44:33.519
But for like people that have, you know, lived through some of the stuff and people that have like dedicated their lives to it.
00:44:33.599 --> 00:44:42.719
When you just take a step back, it's like, yeah, cool story we're getting here, but we're still like some of this stuff just sounds like insane conversations to me about like whether this you know has this kind of value.
00:44:44.079 --> 00:44:44.719
Yeah.
00:44:45.360 --> 00:44:48.239
Morgan, why don't you take us uh to the next section here about reading the tea leaves?
00:44:48.320 --> 00:44:50.239
Let's talk a little bit about where we go from here.
00:44:51.519 --> 00:44:52.639
Uh yeah.
00:44:53.039 --> 00:45:08.079
So you know, I and I definitely heard a bunch about the you know, hanging on this this procedural thing and um not to kind of go back a little bit, but uh it was my understanding that they the two-part test is was not new.
00:45:08.320 --> 00:45:14.639
Like, I mean it's relatively new in history, but wasn't this like a couple years ago that they introduced this?
00:45:14.880 --> 00:45:23.760
Understanding that it is not a pharmaceutical drug, it is not processed down to the compound, it is an organic plant, so that you know it's apples and oranges.
00:45:23.840 --> 00:45:32.239
And so like I'm trying to remember when, because I thought we wrote about this to our investors, and I thought it was like two years ago, like two falls ago.
00:45:32.400 --> 00:45:34.320
Yeah, and saying this is an important thing.
00:45:34.719 --> 00:45:38.159
So, what you're we're talking about is uh is uh is actually a very important.
00:45:38.239 --> 00:45:42.239
Um I see a comment company, it's a it's an important like legal point that you're making.
00:45:42.480 --> 00:45:47.760
So legally speaking, DEA is bound by HHS.
00:45:47.920 --> 00:45:54.960
When when HHS says we picked a test and we use this test, this test is valid, DEA is bound to accept it.
00:45:55.039 --> 00:45:59.760
DEA doesn't have the legal authority to test to test the test, basically.
00:45:59.920 --> 00:46:03.119
So FDA, HHS, that recommendation.
00:46:03.199 --> 00:46:10.320
Well, HHS's recommendation to them based on the FDA analysis is gospel, um, scientist scientifically.
00:46:10.559 --> 00:46:21.440
DEA is like kind of kind of an arbiter of okay, we understand what you're saying, but they they still kind of can they have some wiggle room to decide what they're gonna do with that information.
00:46:22.719 --> 00:46:26.480
So that test is legally binding, right?
00:46:26.639 --> 00:46:28.079
The test is legally binding.
00:46:28.559 --> 00:46:44.079
But just because the test is legally binding does not get is not going to keep the opposition from challenging that, like, a that the test fundamentally in and of itself is illegal or is arbitrary and capricious.
00:46:44.400 --> 00:46:49.199
Because you're you're now taking up to the circuit court, you're now in the appellate process.
00:46:49.440 --> 00:46:57.199
So the in the appellate process, you can attack not only, I mean, the the facts are kind of decided, you you attack can attack process and you can attack, okay.
00:46:57.280 --> 00:47:02.239
We understand what the law is, but like, or this what this judge said, but that was fundamentally wrong.
00:47:02.400 --> 00:47:05.360
That's inbounds for for a circuit court appeal.
00:47:05.679 --> 00:47:16.320
Um the second thing is that like even if you use that two-part test, that the conclusions that you drew from it still don't support your argument, which is what they're also trying to argue.
00:47:16.480 --> 00:47:18.159
So your point, your point is well taken.
00:47:18.239 --> 00:47:30.400
It's the the there will not be an outcome in this administrative hearing where the two-part test is uh, I think, invalidated, which is why I was like, I think this is probably more interesting for the circuit court than on for the uh administrative hearing.
00:47:30.559 --> 00:47:33.199
I think I for the record, I think DA is gonna win this.
00:47:33.760 --> 00:47:43.199
Yeah, so this is I'm I'm just gonna I'm going there because I, you know, maybe off script a little bit, but is is that where this is potentially going next?
00:47:43.360 --> 00:47:52.400
Is like instead of having a a hearing, you know, having the they say like this should be rescheduled, and then is this where Sam is gonna come out next?
00:47:52.480 --> 00:47:57.440
Is there gonna push this into the appellate court system?
00:47:57.519 --> 00:47:58.559
Like I mean, you know what I mean?
00:47:58.639 --> 00:48:06.480
Like, is that they're already there, they're already in circuit court on uh there's already an uh an ongoing circuit court case over the rescheduling of medical marijuana.
00:48:06.559 --> 00:48:12.800
And like, yes, so to answer your question, this is un unquestionably going to be going to circuit court.
00:48:12.960 --> 00:48:20.159
Um I I I mean, I guess anything is possible, but like uh this is going to go there, they're going to make these arguments.
00:48:20.400 --> 00:48:26.159
How this process moves from here is so they already did the you know the notice of proposed rule.
00:48:26.400 --> 00:48:35.920
So now um the ALJ has it's typically like on an administrative case, 30 to 90 days.
00:48:36.000 --> 00:48:40.800
Although this is kind of fairly complicated, high profile, wouldn't be surprised if it took a little bit longer than that.
00:48:41.039 --> 00:48:43.119
ALJ is going to make a recommended order.
00:48:43.280 --> 00:48:52.159
Once you put that recommended order out, um, every party to the case gets to gets 30 days to file what are called exceptions, which is like, okay, judge, we read what you said.
00:48:52.320 --> 00:48:55.440
We think that this recommendation is wrong in these ways.
00:48:55.760 --> 00:49:04.639
Then DEA reads the record, they read this recommended order, they read the exceptions, and then they make a final determination and they make their final agency action.
00:49:04.800 --> 00:49:10.960
The final agency action is the end all be all, and that is what would be ultimately challenged in circuit court.
00:49:11.360 --> 00:49:11.679
Okay.
00:49:12.320 --> 00:49:21.760
And I'm just trying to think, because like from our industry's perspective, now people are starting to project like by September this is going to be this, and by October, this is going to be all done and everything.
00:49:21.840 --> 00:49:26.239
And but if I hear, you know, circuit courts and I hear like they don't move that fast.
00:49:26.400 --> 00:49:42.079
Like, I mean, like, and and I guess, you know, just putting that aside for a second, is like, was this were these hearings beneficial in moving things forward, or was this actually helpful for the opponents to get more ammo to try to go into the courts?
00:49:42.239 --> 00:49:52.800
Like, I'm just trying to understand, like, I mean, it seems like to your point the DEA's got its mind made up, but you know, also, as you were saying a bit earlier, to some degree, the DEA is basically the cops.
00:49:52.880 --> 00:49:56.400
They don't write the rules, they're just enforcing the rules for the most part.
00:49:56.719 --> 00:50:05.199
And now, you know, so like I'm just trying to understand like what what was learned, like, is this making the DEA's position stronger?
00:50:05.440 --> 00:50:10.000
How does this set them up to then have to deal with Sam in in the courts?
00:50:11.760 --> 00:50:13.119
Well, okay.
00:50:13.360 --> 00:50:16.719
Um, high level, because there's a lot to unpack there.
00:50:16.880 --> 00:50:35.440
High level, I would say that um if you talk to any administrative lawyer that has done like has practiced administrative law for any period of time, like they will all they will tell you that they're those are uncomfortable conversations that we have because this isn't civil or criminal law.
00:50:35.599 --> 00:50:42.960
Like you don't get the certainty of a judge making a decision, pounding a gavel, and like that's it.
00:50:43.039 --> 00:50:47.440
Like the administrative process is is porous to challenges for a reason.
00:50:47.519 --> 00:50:54.000
It's it's uh like the whole decision or the whole way through, this decision faces the gauntlet of administrative challenges.
00:50:54.159 --> 00:50:55.199
It's procedural.
00:50:55.440 --> 00:51:04.239
Now, like this is why Congress acting would be a way more efficient process than what's currently happening, but that's not the world in which we live.
00:51:04.559 --> 00:51:14.639
So um it's hard to predict because like even in the meta, so even in the medical, um, medical marijuana circuit case, right?
00:51:16.079 --> 00:51:22.719
There was discussions because the opposing parties in that case or the petitioners have are seeking a stay.
00:51:23.360 --> 00:51:31.760
They're basically seeking the judge to say, stop what you're doing, that like stop registering these businesses in with DEA, stop these DEA inspections.
00:51:31.840 --> 00:51:33.599
Like, we need to keep the schedule one.
00:51:34.000 --> 00:51:40.639
And like there was there was speculation that that stay would be ruled on prior to this hearing, and it wasn't.
00:51:40.719 --> 00:51:44.559
So even there, like that's that's confusion.
00:51:44.719 --> 00:51:53.280
And I think what ultimately, like, I think cannabis companies, cannabis investors, they're like capital is probably the thing that keeps them up the most late at night.
00:51:53.440 --> 00:52:05.920
But like, in my opinion, the the capital concerns, all concerns in marijuana right now basically boil down to confusion about like regulatory certainty.
00:52:06.159 --> 00:52:12.079
And like people really don't know the rules of the game in advance, and the rules are being written as we proceed.
00:52:12.480 --> 00:52:13.920
That's what's happening here.
00:52:14.079 --> 00:52:23.119
So, like I will I will tell you illustrative of this point, is I have spoken to DE agents on the phone through a registration process.
00:52:23.199 --> 00:52:31.760
I spoke to people who work for the DEA while I was in the DEA building at this hearing, and then you listen to the lawyers and like they're saying different things.
00:52:31.920 --> 00:52:41.199
So, like, there are parts of the DEA that are not thrilled about this, there are parts of the DEA that it's their job to defend this, and then there are people who are who are happy that this is happening.
00:52:41.599 --> 00:53:06.400
Um so I think first of all, I would tell the industry is like you should be cautious about uh how like open the DEA and optimistic you are as to what the federal government's actual position is on this, because they are they are there's a difference from arguing something legally in court and then like actually making it work in real life when you're dealing with the DEA moving forward.
00:53:06.559 --> 00:53:13.360
Um, and it's possible that um they're doing this now, but like functionally working with them might be quite difficult.
00:53:13.599 --> 00:53:16.000
They it might not, but it it might be.
00:53:16.159 --> 00:53:26.000
Um, it's also like we don't really know how some of these circuit court cases or how we don't know how the administrative cases, we don't know how these circuit cases are gonna go.
00:53:26.079 --> 00:53:28.079
Um, we don't know if stays are gonna be granted.
00:53:28.239 --> 00:53:32.320
We don't know if ultimately opposition could prevail and we have to go even higher up the chain.
00:53:32.559 --> 00:53:49.280
Um, so I think I would love to talk to anyone who is like 100% convinced that they know what is about to happen or can like predict even the next six months of the future because um I think that person could make a lot of money if they're 100% certain what's gonna happen next.
00:53:50.320 --> 00:53:51.039
Calchi.
00:53:55.760 --> 00:53:56.400
Do you know?
00:53:56.480 --> 00:54:01.760
Do you I don't know if you followed this, but there was actually a funny Calci story on the rescheduling.
00:54:02.000 --> 00:54:08.719
So uh I have a buddy who bet a lot of money um on uh rescheduling not happening uh over the summer.
00:54:09.119 --> 00:54:19.840
And uh I texted him, he he he woke up in a very cold sweat that that uh that final order came out because it was you know it reschedule medical marijuana.
00:54:20.239 --> 00:54:26.559
Okay, but Cal she determined that because it was a partial rescheduling, it didn't count as full rescheduling.
00:54:26.639 --> 00:54:28.480
So we got to hold on to less money.
00:54:32.000 --> 00:54:52.880
Yeah, but but let I mean let me let me say one more thing though, on that is um ultimately this is incredibly good for the industry because if you if you if you kind of step back from the the riptide of what's happening right now, the day-to-day drama or even the week-to-week drama, the federal government is putting it on the record that this is a beneficial thing, this is a good thing, and this is the direction we can go.
00:54:53.039 --> 00:55:02.000
Which means if the federal government changes its mind at some point in the future, they're they're they're hosed in the same way that they're kind of hosed now by their previous position.
00:55:02.159 --> 00:55:18.400
Like anytime the federal government goes on the record and says, we are proponents of marijuana, we are proponents of of taking favorable action to the department, I mean, to marijuana, that is any lawyer in the country now can use that in federal court or in state court as uh to justify the positions that they're taking.
00:55:18.639 --> 00:55:33.519
And I think once you get medical marijuana anchored, you're gonna have some arbitrary and capricious system equal protection arguments for people who are trying to uh trying to get recreational done through the courts rather than through the executive branch of the government.
00:55:33.760 --> 00:55:40.559
It'd be very I don't I do not understand if you can get through this medical marijuana stuff and just medical marijuana anchored.
00:55:40.639 --> 00:55:42.639
This is legal, this is federally acceptable.
00:55:42.880 --> 00:56:08.800
I don't know how the federal government withstands our arbitrary and capricious argument when they try to enforce uh a Schedule I determination or or they try to make some adverse executive action against an adult use user or an adult use grower, an adult use distributor, um, when you walk into a dispensary and like these are the exact same products, and the federal government is is asserting there's no difference between these products.
00:56:09.119 --> 00:56:18.400
Um it's gonna be like they have cemented their position, which is excellent for the for the industry moving forward.
00:56:20.079 --> 00:56:28.960
And if you were to be, if you let's say you ran Cal She, uh Christian, what would you put the probably the probabilities of adult use being rescheduled in 2026?
00:56:29.920 --> 00:56:39.760
Administratively, I mean, I think it's I think DEA coming out and um doing a final order, I would put probably 80 or 90 percent.
00:56:39.840 --> 00:56:43.599
Like I feel pretty confident in my prediction that one way or another DEA is gonna move forward with this.
00:56:43.679 --> 00:56:57.760
And circuit court, I I don't really know, but like the the the thing that's important for people to consider on this is that once you get into circuit court appeals, you're talking like years, you're talking a lengthy process.
00:56:58.079 --> 00:57:01.119
And uh we don't know when the final order is going to be issued.
00:57:01.199 --> 00:57:03.519
There's not really a drop-dead date for this ALJ.
00:57:03.599 --> 00:57:08.000
And then once DEA gets all of the paperwork, there's not really a drop-dead deadline for them.
00:57:08.239 --> 00:57:14.079
So we're definitely going through midterms, I would I would imagine, on the ultimate DEA recommendation.
00:57:14.320 --> 00:57:22.079
I mean, and then you're talking about having circuit court cases going into the next presidency, going, we'll have at least two two sweeps at Congress.
00:57:22.159 --> 00:57:41.039
So it's like at some point when you have these uh American MSOs entering exchanges, when you've accepted the two ADE improvements, when um we've kind of these DEA you know inspections have been carried out and all these businesses are registered and are interfacing with the federal government.
00:57:41.119 --> 00:57:46.079
It's like at some point, all of these things become entrenched and become almost impossible to claw back.
00:57:46.239 --> 00:57:51.599
So it's you know, winning by inches, but each inch that we gain is like intractable.
00:57:51.679 --> 00:57:56.159
It's very difficult to claw that back once we've made progress.
00:57:56.639 --> 00:58:04.480
So what are the pro you know, practically speaking, and apologize for being naive on this on these topics, but you know, a lot of these legal things I don't get into.
00:58:04.639 --> 00:58:15.280
But if if administratively it's we we get the final rule on adult use being moved to schedule three, what's the implications of these uh circuit court cases?
00:58:15.440 --> 00:58:21.039
Like, does that for operators does that change operators finish 20?
00:58:21.360 --> 00:58:29.039
If if you're correct and this moves how you expect it, but we have these objections, appeals, whatever the right term is in this in the circuit courts.
00:58:29.199 --> 00:58:40.639
What's the impact to an oper to to a cure leaf or a verano or even you know my company, you know, leaf brands in terms of you know 280e and other things related to uh you know that classification?
00:58:40.960 --> 00:59:00.480
Yeah, the the taxes get better, 280e, because 280e is a prohibition against expensing um basically any of your expenses um as a business if you're um dealing with a schedule one drug or a schedule two drug where it's you know not legal in the jurisdiction of which you're uh like a state that's it's not legal.
00:59:01.199 --> 00:59:07.760
Um so once you what 280 is going to be an improvement.
00:59:07.920 --> 00:59:16.800
Um, I think as far as certainty for like banks, insurance, like I think probably register DEA registration is gonna be something that they ask you for.
00:59:16.880 --> 00:59:20.480
So there's gonna be kind of reciprocal certainty for on some of these processes.
00:59:20.719 --> 00:59:35.599
On the product side, I don't I don't think it materially improves as far as like legal certainty because and this is a little wonky, but when you're a schedule three drug, think about it as like, okay, now we're a schedule three drug.
00:59:35.760 --> 00:59:43.280
Um, it's a like this is ketamine, this is like test prescribed testosterone.
00:59:43.440 --> 00:59:46.239
Um this is anabolic steroids.
00:59:46.480 --> 00:59:53.280
So it's these are products that each go through their own approval and are deemed safe and effective.
00:59:53.519 --> 01:00:00.159
So when you move the entire category of marijuana to schedule three, okay, that's fine.
01:00:00.320 --> 01:00:09.679
But like marrow, the marijuana industry is composed of a constellation of products, and none of those products will be approved by the FDA is safe and effective.
01:00:09.920 --> 01:00:19.840
So the category itself moving into Schedule II is good in that you are not you don't have a Schedule I prohibition, by which means by definition, you are a drug smuggler and a money launderer.
01:00:20.079 --> 01:00:21.039
You're out of that.
01:00:21.360 --> 01:00:27.519
But uh your drugs are now a medical product without medical approval.
01:00:27.760 --> 01:00:32.800
So it you you I think the recreational marijuana and adult use programs will continue.
01:00:32.880 --> 01:00:40.400
I don't think they'll be materially changed, but that problem doesn't get unstuck because of rescheduling of marijuana to schedule three.
01:00:40.800 --> 01:00:42.239
And I hear that objection sometimes.
01:00:42.320 --> 01:00:48.320
I actually heard it the other, actually, I think I heard it yesterday about somebody saying, Well, what are you gonna do because none of your products are FDA approved?
01:00:48.480 --> 01:00:51.119
Like, how does that how do you think about that, Christian?
01:00:51.199 --> 01:00:55.280
Like, you know, there used to be products out there, you know, Morgan, you remember you remember dosist, right?
01:00:56.000 --> 01:00:56.559
Of course.
01:00:56.800 --> 01:00:58.079
Yeah, so you see products out there.
01:00:59.280 --> 01:01:07.519
I mean, not to be not to be like cynical, but like this and anybody who's been in this industry has been selling a schedule one drug for you know going on two decades now.
01:01:07.679 --> 01:01:11.199
So it's like material, it's it just it's a distinction without a difference.
01:01:11.440 --> 01:01:20.079
Like it's better to be schedule three and to be operating in a legal legal gray area than to be schedule one and operating in a legal gray area.
01:01:20.320 --> 01:01:31.199
But um so in order to like one of the situations DEA is gonna run into, and the the registration process is a perfect example, right?
01:01:31.360 --> 01:01:36.480
So medical marijuana company, we're and I'm not talking about adult use, just medical, right?
01:01:37.280 --> 01:01:50.000
These medical marijuana companies now are registering their businesses, um, but the DEA didn't build a portal like and a system or or promulgate a rule and a form for marijuana dispensaries.
01:01:50.079 --> 01:01:59.440
And so what they are forming up filling out are basically like slightly modified form 224 and form 225 for dispensaries and manufacturing facilities.
01:01:59.679 --> 01:02:03.440
Those are those are pharmacy and drug manufacturing forms.
01:02:03.840 --> 01:02:15.679
Um, there is not like an independent rule about how DEA specifically deals with these companies that have now been deemed Schedule III providers because they're compliant with the state program.
01:02:15.840 --> 01:02:24.239
And in order to do like meaningful enforcement actions, like you need rules, you need standards, you need like things that actually have to be promulgated.
01:02:25.519 --> 01:02:34.239
So um I think that I am one of the people that I do not expect crystal clear certainty from the federal government in the next couple of years.
01:02:34.400 --> 01:02:45.119
What I what I am very happy about is that my clients are no longer are likely no longer going to be operating in like an absolute legal dead zone of being Schedule One.
01:02:45.920 --> 01:02:50.719
Um let's say you're sorry, just one quick one.
01:02:50.880 --> 01:02:55.599
So your leaf brands were one of, if not the biggest producer of concentrates in California.
01:02:55.760 --> 01:03:05.280
Well, of 75, typically up to a hundred, you know, what we call fractions, which it be like, you know, you and I were talking backstage, like Gorilla Glue Shatter be a uh, you know, a fraction for us.
01:03:05.519 --> 01:03:10.559
And uh over here, I've got some garlic juice rosin, and then we sell a whole bunch of distillates.
01:03:10.719 --> 01:03:12.079
We've got all these different things.
01:03:12.239 --> 01:03:16.320
And so how do you think about those specific products?
01:03:16.400 --> 01:03:24.719
Like in that FDA context, is there any world you see where each skew that somebody has has to be somehow federally approved?
01:03:24.880 --> 01:03:30.079
I understand that seems insane going, you know, we were scheduled one, now we're scheduled three, but there is that concern out there.
01:03:30.159 --> 01:03:33.760
There is a, I think, Christian, if we're fair, there's like a bit of a contradiction going on there, right?
01:03:33.840 --> 01:03:37.440
Like we're a bit of an exception to the rule where we don't have a specific product.
01:03:37.519 --> 01:03:41.360
We have this whole category, which is cannabis, starts with our flour back here.
01:03:41.519 --> 01:03:42.559
But again, look at Leaf.
01:03:42.719 --> 01:03:45.199
We turn that flour into 75 different kinds of oil.
01:03:45.360 --> 01:03:50.159
Like, how do how do you think about that context in this FDA framework in an FDA framework?
01:03:50.239 --> 01:03:53.199
Or do you think just we're just a lifetime exception to that?
01:03:53.519 --> 01:04:21.840
Yeah, I think that the FDA, I think the gen the Attorney General's final order kind of, I think, signals how they're going to treat that, which is they've kind of put baby in a corner with the FDA, which is they say that like medical marijuana, like Florida MMTCs under that final order are operating as schedule as you know, schedule three producers and schedule three dispensers by virtue of being compliant with the state medical program.
01:04:22.159 --> 01:04:26.960
So what they've essentially done is incorporated these state programs into reference by reference.
01:04:27.119 --> 01:04:30.320
Now, there will be restrictions for like your company.
01:04:30.480 --> 01:04:43.280
There might be the the DEA might be particularly concerned about chain of custody, security, or cameras, record keeping, background screening for your employees, like they may be concerned with that.
01:04:43.440 --> 01:04:55.920
But it's that to the actual like approval of those drugs, uh the way that the federal government is handling that is they they they don't they aren't really requiring FDA approval.
01:04:56.000 --> 01:05:18.639
Um they're just saying if you're compliant in a if so if your product complies with California state law and you are a licensed and good standing entity in California, right now the federal government has said you are you know you are schedule three manufacturer, your schedule three distributor, your schedule three dispensing, as long as you register with them.
01:05:21.920 --> 01:05:23.679
Yeah, it is interesting.
01:05:26.639 --> 01:05:38.159
Well, I mean, I think I think what's important with all this is you know, like Jesse and I, you know, we talk about this a lot is trying to think about not what's just happening, but and then what, right?
01:05:38.239 --> 01:05:59.280
And and like this is just uncovering like just because we get to schedule three, obviously massively historically important to be progressing in that way, but it introduces a lot of other elements that are still murky and still living in with some uncertainty, you know.
01:06:00.159 --> 01:06:04.239
Understand, like FDA is still for you know keeping the baby in the corner kind of thing.
01:06:04.559 --> 01:06:15.679
But and maybe that's why we saw descheduling law proposed today is like this is a a wake-up call to Congress to get your shit together and finally do something.
01:06:15.920 --> 01:06:22.159
And because the cleanest thing for this industry to thrive is is got to be descheduling.
01:06:22.239 --> 01:06:23.840
Because I just I just hear this rescheduling.
01:06:23.920 --> 01:06:28.480
I'm just like, you know, for capital to move, for people to start wanting to be back in this industry.
01:06:28.559 --> 01:06:32.000
Obviously, they want tax clarity, they want regulatory clarity.
01:06:32.480 --> 01:06:42.719
And I feel like, you know, if we get final rule and 280 E stops for all of the industry, not just for medical, but we still have this overhang of these challenges in the courts and what if they prevail?
01:06:42.800 --> 01:06:43.679
And then what does that mean?
01:06:43.840 --> 01:06:45.599
Does that then go retroactive back?
01:06:45.679 --> 01:06:46.719
And like, you know what I mean?
01:06:46.800 --> 01:06:54.719
I'm just trying to put my put my hat on as if I'm an external capital group looking at cannabis and I'm seeing this landscape.
01:06:54.960 --> 01:07:07.199
Does final rule actually give me certainty that this is there is permanence here, or is there still some risk here that is, you know, this kind of court overhang?
01:07:07.280 --> 01:07:18.800
Uh, versus, like you said, if Congress would just do what the American people have wanted now for quite a long time and just deschedule it, we would we would be free of all these these issues.
01:07:18.960 --> 01:07:19.599
Is that fair?
01:07:19.920 --> 01:07:25.360
Yeah, or if you get FDA and DEA to agree with you and just re-deschule.
01:07:25.440 --> 01:07:29.440
Like they they could do it, they they could deschedule if they wanted to, they haven't.
01:07:29.679 --> 01:07:29.920
Right.
01:07:30.000 --> 01:07:30.559
Uh, but yeah.
01:07:30.960 --> 01:07:35.280
It seems like a step, that's a huge step from going from schedule one to just go right to deschedule.
01:07:35.519 --> 01:07:37.679
Though I do think, I mean, I understand.
01:07:37.760 --> 01:07:42.320
I'm just politics or no, I've I'm shaking, I'm shaking my head the wrong way, working.
01:07:42.400 --> 01:07:43.119
I'm I'm agreeing with you.
01:07:43.199 --> 01:07:46.559
I think it's it's an uh that's what we should do, but I think that jump is unrealistic.
01:07:46.639 --> 01:07:47.679
Yeah, exactly.
01:07:47.840 --> 01:07:48.320
Yeah.
01:07:48.639 --> 01:08:01.679
And and and I did even hear right in the rulings or in the hearings, there was wasn't there a physician or someone that did acknowledge that cannabis or marijuana has less harms than alcohol.
01:08:02.000 --> 01:08:02.159
Yeah.
01:08:02.480 --> 01:08:03.280
Less addictive.
01:08:03.360 --> 01:08:15.280
And obviously we know these things, but the fact that it was in the hearing, having, and I actually I think Sam was the one that was pushing back against this of like they had a descheduled substance being in the hearings, it was like conflicting.
01:08:15.360 --> 01:08:24.319
And it's like I actually thought that was a very powerful thing because to admit something like that in in court, I thought, you know, well, does that open that door?
01:08:24.640 --> 01:08:32.640
Or to your point, Christian, are they so anchored on our position is rescheduling, and that's where we're holding.
01:08:34.640 --> 01:08:39.439
I I'm trying to fight find the political way to say it, this the politically correct way to say this.
01:08:39.760 --> 01:08:45.680
I I would not attribute I told I told I t so I told someone to fuck off earlier.
01:08:45.760 --> 01:08:46.560
We're not doing political stuff.
01:08:47.279 --> 01:08:47.920
I don't know.
01:08:48.159 --> 01:08:49.359
Let's let's get the straight answer here.
01:08:49.760 --> 01:09:00.399
I don't know if they know if I honestly I don't know if they if all of these permutations have really been thought out by the administration.
01:09:00.560 --> 01:09:20.640
Like I'd I'd not I'm not sure that they're like when when you're thinking about when you're talking about this, I'm not sure everyone anyone has actually gone through these and like actually like this is organized, cogent uh like political action.
01:09:20.800 --> 01:09:24.319
I think part of this is red meat because we're going into midterms.
01:09:24.479 --> 01:09:35.199
Part of this is something where it's like we have to have some type of pressure release because uh the law has become has become so like utterly ridiculous in how it's being handled nationally.
01:09:35.520 --> 01:09:40.319
Uh, and part of this is like, you know, you know, Trump, Trump taking a win.
01:09:40.399 --> 01:09:42.000
Like Trump being like, okay, we're gonna do this.
01:09:42.079 --> 01:09:43.840
I'm I'm gonna actually make this happen.
01:09:44.000 --> 01:09:51.920
And he he you know, he he does have a tendency to sometimes uh you know shoot and then aim uh on some of this stuff.
01:09:52.000 --> 01:09:56.720
I'm not that and I don't want to say like DEA and none of these people, like the the obviously a lot of thought went into this.
01:09:56.880 --> 01:10:03.600
Like this is very but like what you're talking about are like so many permutations, it's such a complicated situation.
01:10:03.680 --> 01:10:18.000
And there might be you know think tanks or particular people in some of these agencies that have thought about pieces of this, but how the whole thing fits together, I really don't know if I don't think that there's like this grand plan about how all of this fits.
01:10:18.079 --> 01:10:25.600
And even if there is, we have elections every two years and it's gonna take more than two years, like any of those things can be accelerated or disrupted.
01:10:26.239 --> 01:10:43.840
And I mean, I think one thing that's a minor thing to, but I'm I'm keeping on my radar is if they don't get this final rule done and Massachusetts voters actually vote to repeal their adult use market, what's that gonna weigh on the calculus of the of the TEA's position?
01:10:44.079 --> 01:10:44.640
You know what I mean?
01:10:44.720 --> 01:10:51.199
So like there's like a window where I think you know, get it done, but does that give more ammo to Sam in the courts?
01:10:51.359 --> 01:10:52.640
Like maybe.
01:10:52.880 --> 01:10:56.960
I mean, but like D it it's possible, but so this is actually kind of interesting.
01:10:57.039 --> 01:11:06.159
We talk about something that specifically happened in in the court that like I mentioned the brute force thing, but I didn't really like to really give any kind of flesh that out.
01:11:06.880 --> 01:11:19.920
But um DEA treats those types of things as irrelevant to what they are, and they're arguing in front of the judge that what you just described is irrelevant.
01:11:20.079 --> 01:11:27.119
So specifically they treat like how state governments, specifically adult use state programs, have comported themselves.
01:11:27.279 --> 01:11:35.119
They think that's totally irrelevant because the case is about whether or not there is um an accepted medical use for marijuana.
01:11:35.600 --> 01:11:53.520
So, you know, you compare uh you you can have a state that's and and there were examples of kind of you know some not awesome things happening, uh, you know, as far as uh certain states with that are kind of lax on certain safety requirements or diversion prevention, and it is what it is.
01:11:53.680 --> 01:11:57.039
Uh DA's position is we don't care, that's diversion.
01:11:57.119 --> 01:11:58.880
Like there's diversion of fentanyl.
01:11:58.960 --> 01:12:01.520
That doesn't mean fentanyl doesn't have an approved medical use.
01:12:01.840 --> 01:12:03.520
Marijuana has a medical use.
01:12:03.760 --> 01:12:06.800
So same thing with uh, I mean diversion in particular.
01:12:07.039 --> 01:12:11.359
FDA, there I I would say one of the weakest parts of their analysis probably is diversion.
01:12:11.600 --> 01:12:23.199
Just saying that, like as someone who watched them, like their in their explanation for diversion was basically looking at kind of like federally involved like NIDA facilities and how much diversion there is.
01:12:23.279 --> 01:12:31.439
And they like there was no analysis as to like or very, very little analysis of like real diversion in like these state medical programs.
01:12:31.680 --> 01:12:33.520
But DEA's position is that doesn't matter.
01:12:33.600 --> 01:12:37.039
There's diversion for every drug that doesn't affect medical use.
01:12:37.279 --> 01:12:39.039
So back to like one of your first questions.
01:12:39.119 --> 01:12:51.039
That's why DEA keeps bringing back the medical, because it helps them push away things like diversion or well-run state programs, because they're like, yeah, that's that's all true.
01:12:51.199 --> 01:12:53.520
It's debatable, but it's true.
01:12:53.760 --> 01:12:54.800
You know, whatever.
01:12:54.960 --> 01:13:00.560
That doesn't, even if it, even if you accept everything you say, which we don't concede, it doesn't matter.
01:13:00.800 --> 01:13:01.680
That's their position.
01:13:02.000 --> 01:13:03.359
No, that's that's a great point.
01:13:03.520 --> 01:13:05.039
Um, and you did mention that earlier.
01:13:05.119 --> 01:13:10.479
And it's good to bring it up again because it's easy to get like too far down and get lost in it, and then that brings it back.
01:13:10.640 --> 01:13:18.640
Because I mean, at the end of the day, the states just create created these programs because the federal government was not willing to move at that time.
01:13:18.720 --> 01:13:24.239
And so they wanted to have these things, and then we created this funky thing where we had medical, and then we created adult use.
01:13:24.399 --> 01:13:32.319
Like those were all created because the federal government was not formally or was, you know, historically had not been in favor of of doing this.
01:13:32.479 --> 01:13:44.399
So um, which created all these, all this, you know, nuance and uh, you know, and the point about you know, diversion, yeah, that's that's a regulatory and enforcement question.
01:13:44.479 --> 01:13:48.239
That's not around a medical value perspective.
01:13:48.720 --> 01:13:58.720
Yeah, I mean, uh the opposition were basically trying to make the argument that like it's so pervasive that it becomes a public health issue rather than kind of like a criminal or like administrative issue.
01:13:59.039 --> 01:14:03.920
And you know, like I said, it the DA's position is what the DEA's position is.
01:14:04.079 --> 01:14:08.880
And um, some of that, you know, they provided expert testimony on that, they provided a lot of information.
01:14:09.119 --> 01:14:30.479
But like uh, I mean, they they had the sheriff from um Humboldt County come out and they gave very compelling testimony about organized crime in California and how like they their their county, there's certain parts of their county are a mess trying to deal with this stuff, and then it's very arduous and the the system needs to change.
01:14:30.640 --> 01:14:35.920
But like DEA's like, yeah, I we get it, but that doesn't impact our analysis though.
01:14:38.560 --> 01:14:45.199
So yeah, interesting hearing the Humboldt County Sheriff talk about organized crime, but that's a much longer conversation.
01:14:48.399 --> 01:14:53.119
The phrase murder mountain was said like probably 10 times during his testimony.
01:14:56.800 --> 01:15:00.720
So Chris, so so Christian, just to kind of wrap things up, we covered a lot of great ground today.
01:15:00.800 --> 01:15:02.960
It's been uh been a really really helpful show.
01:15:03.199 --> 01:15:11.359
When you kind of reflect on the the time that you spent at the hearings and what what's your single biggest takeaway you would leave listeners with?
01:15:13.760 --> 01:15:33.680
Um I think that having DEA witnesses talk about the entourage effect and DEA witnesses talking about medical use and DEA talking, uh calling witnesses who are testimony testifying about uh how patients can affirmatively be helped off of opioids with marijuana.
01:15:34.079 --> 01:15:42.800
Getting this stuff on the record, the federal government taking these positions is uh extreme it is the most valuable thing from all of these.
01:15:43.039 --> 01:15:44.319
It is more valuable than the outcome.
01:15:44.560 --> 01:15:49.199
The federal government building a record for why it believes is something that they can't ever take back.
01:15:49.520 --> 01:15:50.960
They're locked into this now.
01:15:51.920 --> 01:16:06.399
So it was a I mean, the last two and a half weeks are probably the uh I mean, definitely since the Cole memorandum, the most important, you know, federal policy shift that we've had because once you put this out there, you cannot take it back.
01:16:06.640 --> 01:16:10.720
Um so the opposition is gonna do what the opposition does.
01:16:10.880 --> 01:16:16.319
The opposite I will say that like opposition lawyers, some of some of them were terrible, but some of them were incredible.
01:16:16.479 --> 01:16:22.239
Like uh one of Sam's lawyers uh uh give credit to where he's due, he's the best litigator I've ever seen in person.
01:16:22.720 --> 01:16:33.359
Um he had this when I mentioned that he got the D the uh DA witness to concede on the record that marijuana would not pass the five factor test.
01:16:33.439 --> 01:16:37.439
To do that, he got through about 30 minutes of bit of concentrated.
01:16:37.760 --> 01:16:43.439
It was like the one time DEA actually like fought, they fought this guy for 30 minutes.
01:16:43.600 --> 01:16:47.600
I've never seen someone break through objections and be able to get a malloc moment like that.
01:16:47.920 --> 01:16:48.960
It's very impressive.
01:16:49.039 --> 01:16:53.119
So their lawyers are excellent, but some of their lawyers are excellent.
01:16:53.279 --> 01:17:00.239
Um but the the the fact is the most powerful ally that you could ever hope to have is the federal government.
01:17:00.640 --> 01:17:14.960
Uh US federal government is now the ally that we're um we have mutual interest in this particular area, and it it's incredible to see them take the positions that they've seen, I mean that they've taken.
01:17:15.600 --> 01:17:20.319
Um so yeah, what a massive shift.
01:17:20.399 --> 01:17:25.199
There's a great book uh called Smoke Signals, which uh Micah, yeah, our CEO.
01:17:25.359 --> 01:17:26.479
Did you have you read that?
01:17:26.640 --> 01:17:26.960
Yeah.
01:17:27.119 --> 01:17:27.920
I read that, yeah.
01:17:28.079 --> 01:17:29.760
I read that back in the day.
01:17:30.479 --> 01:17:32.319
Yeah, it's a bit, yeah, it's a bit dated now.
01:17:32.399 --> 01:17:34.880
Um I don't remember when when it when it when it when it came out.
01:17:34.960 --> 01:17:40.720
It was I think it I think it was before California, even uh adult use came out that the that the book the book was written.
01:17:40.880 --> 01:17:41.760
But I bring it up, yeah.
01:17:41.840 --> 01:17:42.720
It's called Smoke Signals.
01:17:42.800 --> 01:17:47.199
Uh Hirsch, one of our favorite guests, Hirsch, Hirsch Jane has read it too and liked it a lot.
01:17:47.279 --> 01:17:49.439
And yeah, I bring it up because a great book.
01:17:49.520 --> 01:17:52.800
Everyone should read it if you're into cannabis stuff and you're a nerd in that regard.
01:17:52.880 --> 01:17:54.479
The history of it is just amazing.
01:17:54.640 --> 01:18:04.000
But the biggest thing I took for the book was for thousands of years, you know, the people have wanted cannabis, and the government has tried to suppress it or oppress it.
01:18:04.239 --> 01:18:08.960
And it goes back to not even just the United States, it goes back so much further than this.
01:18:09.039 --> 01:18:12.000
Like there's this great plant that people continually want access to.
01:18:12.159 --> 01:18:19.279
And for hundreds of years, maybe thousands of years, we're trying to stamp it out, stamp it out, get, you know, get rid of it, get rid of it.
01:18:19.359 --> 01:18:21.199
Take this, don't take that, take this, don't take that.
01:18:21.359 --> 01:18:23.359
But people keep saying, I want this, I want this.
01:18:23.439 --> 01:18:30.640
It even goes back to you probably remember, Christian, the jazz musicians and all that sort of stuff, then into the beatniks, then into the AIDS movement in San Francisco.
01:18:30.960 --> 01:18:35.199
And over and over again, people want access to the plant, period.
01:18:35.359 --> 01:18:48.479
Some for really serious medical medical conditions like my dad that helped his change his life, some just for people like me, who I'd rather smoke a bit of weed at night than drink or take any pills or do any things, do any things, you know, do things like that, and to each their own.
01:18:48.720 --> 01:18:52.079
But for so long, we've taken that choice away from people.
01:18:52.239 --> 01:18:57.680
And that's a you know, I think, you know, I think it's fundamentally an inhumane thing to do.
01:18:57.760 --> 01:19:03.279
And I think it's one of the biggest things society has gotten wrong is by not giving us that choice to do something different.
01:19:03.520 --> 01:19:05.600
Hey, man, may not be for you, Mr.
01:19:06.079 --> 01:19:06.239
Mr.
01:19:06.399 --> 01:19:06.880
Politician.
01:19:07.119 --> 01:19:11.279
Mitch McConnell, don't want to get stoned, awesome, don't do it.
01:19:11.439 --> 01:19:14.159
Usually I don't want to drink, awesome, I don't do it.
01:19:14.239 --> 01:19:19.920
But I'm not there, I'm not out there with signs and trying to take take that away from me, even though alcohol is a million times worse for you.
01:19:20.079 --> 01:19:25.520
I would tell people not to drink, but hey, if they want to do it and kill themselves, feel bad, all that sort of stuff.
01:19:25.680 --> 01:19:26.560
That's a trade-off.
01:19:26.720 --> 01:19:28.720
That is a hundred percent their choice.
01:19:28.960 --> 01:19:35.119
And it's it is so important to point out that there is that shift going on.
01:19:35.199 --> 01:19:39.520
And the shift is just acknowledging a slight portion of reality.
01:19:39.680 --> 01:19:47.680
I don't even think that's acknowledging the full reality of the situation because I think we need much more medical information, not just on THC, but what about you know, CBN?
01:19:47.760 --> 01:19:48.880
What about THCV?
01:19:48.960 --> 01:19:50.159
What about CBG?
01:19:50.399 --> 01:20:00.239
Um, this great guy at um at Humboldt who helped help to help me out, put together a custom tincture for my dad of like THCA, CBGA, and maybe C B C A.
01:20:00.640 --> 01:20:01.760
I hardly know what those things are.
01:20:01.920 --> 01:20:07.920
And I've been the cannabis industry passionately for 10 years, and I'm just learning about these acidic forms of cannabinoids that may help people.
01:20:08.079 --> 01:20:23.520
So there's so much out there from the basic guy who just wants to smoke a joint at night to relax to really complex situations like you know, chemotherapy and somebody you know in cancer, where guys at work for my dad, just in case this is sadly he never got to take it.
01:20:23.600 --> 01:20:29.039
But what was what was given to my dad and formulated for my dad was a couple of tinctures.
01:20:29.119 --> 01:20:40.479
One was 50% CBD, 50% leaf GMO rosin for that you know, balanced THC CBD, bunch of great cannabinoids and you know terpenes and different things in the you know GMO portion that are helpful.
01:20:40.720 --> 01:20:45.840
Then on top of that, a separate tincture with these acidic forms and all of that works together to accomplish something.
01:20:46.079 --> 01:20:48.319
Do you guys know how hard that was for me to find out?
01:20:48.479 --> 01:20:50.319
Do you know how many conversations I had?
01:20:50.479 --> 01:20:52.399
Do you know what I went through to put that together?
01:20:52.479 --> 01:20:54.800
Thank God I worked for Leaf and you know, could get the rosin.
01:20:54.880 --> 01:20:59.199
Then I sent it to somebody else who did the formulation, then it was sent over here and eventually made it back to me.
01:20:59.520 --> 01:21:04.720
And that's just, you know, one example of the way that we can help people that's super complex.
01:21:04.880 --> 01:21:09.359
Then there's a simple things, guys just like me and Morgan who like to smoke a little bit of weed at night.
01:21:09.680 --> 01:21:13.680
And for so long, we've wanted to do that.
01:21:13.840 --> 01:21:17.920
And for so long, someone else is out there not just saying, I don't think you should do that.
01:21:18.000 --> 01:21:22.479
If you have an opinion, you say I don't think you should do that, but they're making it fucking illegal to do that.
01:21:22.720 --> 01:21:30.399
And yeah, I think your point is so important to wrap on uh here, Christian, because finally, you know, someone is acknowledging some of these basic facts.
01:21:30.479 --> 01:21:32.880
And again, I don't think they're even acknowledging the full truth.
01:21:33.119 --> 01:21:34.399
It's moving way too slowly.
01:21:34.479 --> 01:21:35.920
We want to get the descheduling.
01:21:36.079 --> 01:21:38.880
But I guess, Christian, when I look at the end, you know, we'll see what happens.
01:21:39.039 --> 01:21:42.880
But it feels like, you know, in some ways, like you're saying, there's maybe a huge win embedded here.
01:21:42.960 --> 01:21:49.600
And hopefully we get the financial part where 280E goes away, you know, that hopefully that goes back a few years retroactive on the treasury stuff.
01:21:49.680 --> 01:21:56.479
But I think your point there, Christian, is fantastic about the government finally realizing some of these things that all of us know.
01:21:57.279 --> 01:21:57.760
Yeah.
01:21:58.399 --> 01:21:58.800
Absolutely.
01:21:59.119 --> 01:22:00.479
Freedom 250.
01:22:02.479 --> 01:22:03.920
So let's wrap things up, boys.
01:22:04.000 --> 01:22:09.279
Thank you to FlowHub for making today's show possible with cannabis rescheduling, moving towards moving towards the goal line.
01:22:09.359 --> 01:22:12.560
The industry is continuing to evolve, evolving super quickly.
01:22:12.640 --> 01:22:15.520
And you operators out there, you have to be ready for that change.
01:22:15.760 --> 01:22:20.960
Man at leaf, we have never been busier adapting to these changes, whether it's on the retail front, the wholesale front.
01:22:21.119 --> 01:22:24.640
We didn't even get into the DEA stuff, but all of that is super fascinating too.
01:22:24.800 --> 01:22:28.399
But guys, if you've got a dispensary, you know, Morgan talked about these AI hooks.
01:22:28.479 --> 01:22:31.520
If you've got, you know, one store, you got 10 stores, you got 50 stores.
01:22:31.600 --> 01:22:36.399
It's really just a fantastic time to be looking across your tax stack and figure out what you could be doing differently.
01:22:36.560 --> 01:22:38.159
So just take take a few minutes, guys.
01:22:38.319 --> 01:22:41.600
Jump over to FlowHub.com and schedule that demo today.
01:22:41.760 --> 01:22:44.960
So thank you for for to FlowHub for continuing to support the show.
01:22:45.119 --> 01:22:46.319
We really appreciate it.
01:22:46.560 --> 01:22:48.720
Morgan Paxia, always a pleasure.
01:22:48.960 --> 01:22:50.880
Christian, thanks for joining the show today.
01:22:51.039 --> 01:22:51.840
Really great to meet you.
01:22:51.920 --> 01:22:53.359
Hope we stay in touch.
01:22:53.680 --> 01:22:54.800
Thank you, guys.
01:22:55.039 --> 01:22:56.960
And we'll see you guys again in two weeks.
01:22:57.039 --> 01:22:58.880
We're working on a show with a big operator.
01:22:58.960 --> 01:23:00.319
So we'll see if uh that works out.
01:23:00.399 --> 01:23:03.199
But Rain or Shine, we'll see you guys back here in two weeks.
01:23:03.359 --> 01:23:04.720
I always appreciate you joining us.
01:23:04.880 --> 01:23:07.279
If you're on YouTube, that channel continues to grow.
01:23:07.359 --> 01:23:10.000
I think we're pushing 360 subscribers over there.
01:23:10.159 --> 01:23:12.079
It is the biggest uh growth engine for us.
01:23:12.159 --> 01:23:13.119
So go check out YouTube.
01:23:13.199 --> 01:23:20.640
If you're on YouTube, do me a favor, like, subscribe, and if you're really a fan, hit that bell for the notifications so you know when new shows come out.
01:23:20.800 --> 01:23:21.600
That's it, guys.
01:23:21.680 --> 01:23:22.640
We're out of here.
01:23:22.960 --> 01:23:26.319
The views expressed this podcast are provided for informational purposes only.
01:23:26.479 --> 01:23:32.239
Nothing I said, Morgan said, or Christian said, should be considered research or or or recommendation.
01:23:32.399 --> 01:23:33.920
All investing involves risk.
01:23:34.000 --> 01:23:39.359
You're a cannabis investor, you know that, including the loss of principle.
