رونوشت کامل 156 - Why International Cannabis Won't Save You with Deepak Anand of Village Farms

appearance. 00:02:32.240 --> 00:02:33.199 Absolutely. 00:02:33.439 --> 00:02:37.680 And I will also be running into Seth Yakitan. 00:02:38.000 --> 00:02:54.479 We'll be taking a selfie so that we can promote our high spirits morning mixer in Vegas, which um we partnering, yeah, with Seth and the Ordo Verde team to get all of you guys to our annual reunion in Las Vegas. 00:02:54.639 --> 00:02:56.000 It's going to be an incredible party. 00:02:56.080 --> 00:03:00.960 It's always the party to be at in Vegas, bright and early, lots of coffee and snacks. 00:03:01.199 --> 00:03:12.159 And for folks that are listening that want to come, you can go to our website, highspiritspod.com slash morning mixer and request an invite for our not to miss morning event. 00:03:12.319 --> 00:03:13.360 We'd love to see you here. 00:03:13.840 --> 00:03:15.599 Truly bigger and better than ever. 00:03:15.680 --> 00:03:18.400 And if you were at the last one, that's pretty vague. 00:03:18.479 --> 00:03:19.919 So I'm pretty excited about it. 00:03:20.080 --> 00:03:21.840 Yeah, Vegas, that's coming up quick. 00:03:22.560 --> 00:03:23.520 I'm the new outfit. 00:03:23.599 --> 00:03:25.199 I always get a new outfit for our party. 00:03:25.280 --> 00:03:26.080 It's a good excuse. 00:03:26.240 --> 00:03:30.319 So I hope everyone else feels like it's their excuse to go get a new outfit. 00:03:30.800 --> 00:03:31.919 Thank you for the permission. 00:03:32.000 --> 00:03:33.759 I too shall get a new outfit. 00:03:34.000 --> 00:03:34.400 Usually. 00:03:35.840 --> 00:03:38.319 Let's jump into our news for this week. 00:03:38.639 --> 00:03:39.680 Let's do it. 00:03:39.919 --> 00:03:40.400 All right. 00:03:40.639 --> 00:03:44.000 First story is about adult youth schedule three. 00:03:44.400 --> 00:03:46.479 Just encountered another delay. 00:03:46.639 --> 00:04:05.039 On September 29th, the DEA administrative law judge stayed the broader marijuana rescheduling proceeding while considering whether to reopen the record to incorporate a new government accountability office report that criticized criticizes gaps in the federal drug scheduling process. 00:04:05.199 --> 00:04:11.039 The DEA has until October 13th to respond, but the market reaction was immediate. 00:04:11.199 --> 00:04:13.840 Truly fell 16% the following day. 00:04:14.080 --> 00:04:17.600 GTI and Cara Leaf also down shortly, sharply. 00:04:17.839 --> 00:04:25.839 And the industry cannot ignore that the market is paying attention to what's going on with these Schedule III proceedings. 00:04:26.000 --> 00:04:29.360 And the GAO finding itself isn't anti-cannabis. 00:04:29.519 --> 00:04:34.800 It actually supports that HHS did the right thing, but this doesn't look good for us. 00:04:35.040 --> 00:04:37.839 The the more is I don't know if it's not looking good. 00:04:37.920 --> 00:04:43.120 Look, it's just not it's not questioning the merits of the findings, which I think is positive. 00:04:43.199 --> 00:04:50.959 In fact, DA has released new news in the last couple of weeks showing that, oh, lo and behold, there have been no overdose deaths due to cannabis. 00:04:51.040 --> 00:04:54.000 So it's like just further supporting the case. 00:04:54.319 --> 00:04:57.120 This was purely like an administrative criticism. 00:04:57.199 --> 00:05:02.480 Like they didn't do the proper steps because they didn't have proper steps to follow. 00:05:02.720 --> 00:05:08.879 So I think this is just a stay of execution, whatever the positive version of that is a delay. 00:05:09.279 --> 00:05:14.000 That all to say is indeed these these poor public companies can't catch a break. 00:05:14.319 --> 00:05:17.120 Have not been performing well either which way you cut it. 00:05:17.199 --> 00:05:24.560 I think both TrueLib and Glasshouse brands have been receding in their stock prices. 00:05:24.800 --> 00:05:26.480 I think of this shift. 00:05:26.639 --> 00:05:30.000 Yeah, it's a tough go, but I don't I don't think it changes anything. 00:05:30.720 --> 00:05:31.759 Yeah, I'm with you. 00:05:31.920 --> 00:05:37.759 I think that if anything, we just are reminded that it's not about the intent, it's about the process. 00:05:38.000 --> 00:05:48.000 And there's gonna be a million hiccups along the way in the process, and things that you didn't realize could be hiccups last week, might be a hiccup next week. 00:05:48.079 --> 00:05:49.920 So we'll see what we're in store for next. 00:05:50.160 --> 00:05:56.079 Look, if that's the one hiccup that the prohibitionists can exploit, then I feel like we're doing pretty well. 00:05:56.959 --> 00:05:58.000 I'll take it. 00:05:58.480 --> 00:06:01.199 Let's talk about Kira Leaf and Aurora. 00:06:01.439 --> 00:06:08.160 We've just increased its hostile bid for Aurora by 25% to$5 per share. 00:06:08.319 --> 00:06:09.439 Previously it was$4. 00:06:10.480 --> 00:06:15.759 And that's an 86% premium to Aurora's unaffected August price. 00:06:15.920 --> 00:06:20.160 The maximum consideration was also raised to$6 a share. 00:06:20.399 --> 00:06:26.639 Aurora has thus far refused to engage and argues CuraLeaf undervalues its international medical business. 00:06:26.879 --> 00:06:31.759 CuraLeaf is making an explicit bet that global cannabis scale matters. 00:06:32.000 --> 00:06:46.319 And what I'm thinking about is, are we entering a new cannabis MA cycle where buyers aren't simply consolidating state licenses, but assembling federally defensible medical international platforms? 00:06:46.639 --> 00:07:00.879 Clearly, CuraLeaf is hearing that Aurora is making a strong argument for their business being undervalued in the market and that they've got something special, which is what the Cura with the Aurora board is contending very publicly. 00:07:01.680 --> 00:07:04.800 It sounds like Kira Leaf is buying it, raising their fist. 00:07:06.079 --> 00:07:06.480 Sure. 00:07:07.040 --> 00:07:08.480 This is just such an interesting case. 00:07:08.639 --> 00:07:11.439 I have very little

experience with this, so I'm not going to opine on it too much. 00:07:11.519 --> 00:07:13.759 But it's yeah, of course they're not cooperating. 00:07:13.839 --> 00:07:15.040 It's a hostile takeover. 00:07:15.199 --> 00:07:17.759 I guess you keep trying until people start saying yes. 00:07:18.000 --> 00:07:18.319 Yeah. 00:07:20.319 --> 00:07:23.759 It's the shareholders at the end of the day who have to make a move, right? 00:07:23.839 --> 00:07:25.920 Unless it's so sweet that the board is going to be a good thing. 00:07:26.399 --> 00:07:28.079 The shareholders will decide. 00:07:28.240 --> 00:07:40.560 But as anyone who owns public company stock, there's often times that shareholders are asked to vote on things and there's very low turnout where it's a small group of shareholders that control most of the stock. 00:07:40.720 --> 00:07:44.319 And those are the shareholders that will end up driving the decision, likely. 00:07:44.480 --> 00:07:48.639 But you're right, it is up to the shareholders, not up to the board, technically. 00:07:48.879 --> 00:08:05.040 I wanted to bring up this story just because I think it is relevant in light of what we'll be talking about today with Deepock, who really also has his sites on international export of cannabis from Canada to the rest of the world. 00:08:05.279 --> 00:08:09.759 And that is exactly what Cure Leaf is betting on here with this bet. 00:08:10.319 --> 00:08:10.959 Great point. 00:08:11.040 --> 00:08:12.560 I'm just gonna defer to Deep. 00:08:14.480 --> 00:08:16.000 Should we bring him on? 00:08:16.959 --> 00:08:20.399 Uh yeah, I I think there was one more thing that was that was one more story. 00:08:21.199 --> 00:08:21.439 That's good. 00:08:21.519 --> 00:08:22.160 Yeah, one more story. 00:08:22.480 --> 00:08:22.879 New York. 00:08:22.959 --> 00:08:23.040 Yeah. 00:08:23.279 --> 00:08:23.600 New York. 00:08:23.839 --> 00:08:24.399 New York, yeah. 00:08:24.560 --> 00:08:27.040 They crossed a billion in revenue in total. 00:08:27.199 --> 00:08:40.879 The Q3 alone was 512.6 million, which annualized would make them about a$2 billion marketplace, which puts them in the kind of third to fourth place ranking as far as states go. 00:08:41.039 --> 00:08:49.279 So obviously, uh what California, Michigan, and then like Massachusetts is and New York are jocking. 00:08:49.519 --> 00:08:53.279 We were talking before the podcast, and I was like, wait, what the heck happened to Arizona? 00:08:53.360 --> 00:08:56.960 I remember they claimed number two for a hot second before like Michigan took over. 00:08:57.200 --> 00:08:58.480 Um they're way down there now. 00:08:59.360 --> 00:09:00.480 They're way down there now. 00:09:00.720 --> 00:09:09.679 But I think the interesting thing about this is not only they are they're now jockeying for third place, they also have the fastest growth rate out of all the states. 00:09:09.759 --> 00:09:16.240 And so I think they're hitting what, like a 12 to 13% year-over-year growth rate right now. 00:09:16.480 --> 00:09:20.159 So they could very much find themselves competing for the top two. 00:09:20.960 --> 00:09:21.840 Absolutely. 00:09:22.080 --> 00:09:25.679 Michigan is on the decline and is sitting at the number two spot. 00:09:25.840 --> 00:09:34.240 It would be a big bridge for New York to go from around a$2 billion annual run rate to get to where Michigan's at, closer to three. 00:09:34.399 --> 00:09:38.799 But I think that all along people have thought that New York could be a$3 billion market. 00:09:38.879 --> 00:09:39.759 So I'm here for it. 00:09:39.840 --> 00:09:42.080 And I know that the rest of the industry will be too. 00:09:42.320 --> 00:09:43.360 Yeah, 100%. 00:09:45.039 --> 00:09:45.759 Now is bringing it. 00:09:46.159 --> 00:09:47.039 Yeah, let's do it. 00:09:47.200 --> 00:09:55.279 Our guest today is Deepak Anand, and he is the guy when it comes to the intersection of cannabis policy and international markets. 00:09:55.440 --> 00:10:02.320 He started his career in pharma, became an advocate for patient access, and went on to help build the global cannabis industry. 00:10:02.480 --> 00:10:11.759 He's advised more than 40 cannabis companies, plus CPG and tobacco players looking to enter the space and helped build operations in Germany and the UK. 00:10:12.080 --> 00:10:24.960 And three weeks ago, he took his shingle down and went in-house as vice president of government affairs at Village Farms International, a public company that's one of the largest EU GMP certified cannabis cultivators in the world. 00:10:25.279 --> 00:10:27.600 Deepak, welcome to High Spirits. 00:10:28.480 --> 00:10:30.320 Thanks for having me, Ann Ray and Ben. 00:10:30.879 --> 00:10:33.200 Yeah, congrats on the new gig, too. 00:10:33.519 --> 00:10:34.559 Thanks so much. 00:10:34.960 --> 00:10:36.480 It's a big deal. 00:10:37.360 --> 00:10:40.399 It is so you were consulting. 00:10:40.480 --> 00:10:42.559 This is how uh I heard about you. 00:10:42.720 --> 00:10:50.960 I know my team flew out to Europe and it was at ICBC, and Ryan came back and was like, oh, the guy we really need to talk to is Deepak. 00:10:51.200 --> 00:10:59.519 And I'm just curious, is like, you've seen a lot, you've worked with a lot of companies in the space, and you've been evaluating the international markets. 00:11:00.799 --> 00:11:08.639 What was it that you saw as a consultant that made you finally take that shingle down and be like, yeah, this is the company I want to get involved with. 00:11:09.120 --> 00:11:11.279 And I'm curious about the push and pull. 00:11:11.360 --> 00:11:17.440 There's the pull of like this being an attractive company, then there's the push of those aren't the companies that I want to go in-house at. 00:11:18.080 --> 00:11:21.200 Yeah, look, again, thanks for having me on, both Ben and Ray. 00:11:21.279 --> 00:11:21.919 Really appreciate it. 00:11:22.000 --> 00:11:25.039 I've followed your podcast for some time and definitely

excited to be here. 00:11:25.120 --> 00:11:26.559 So thanks for scheduling this. 00:11:26.879 --> 00:11:32.240 Yeah, look, Village Farms is the largest EU GMP producer on the planet. 00:11:32.399 --> 00:11:37.039 There's no other company that has as big a footprint as Village Farms does. 00:11:37.120 --> 00:11:40.480 And I think that was a big reason for me to look to joining their team. 00:11:40.639 --> 00:11:45.440 I was consulting for them for a couple of years before I fully decided to go in-house. 00:11:45.519 --> 00:11:47.919 So it's not like I was unfamiliar with the team. 00:11:48.159 --> 00:11:58.720 But just given a lot of my what I was seeing as being the future of cannabis, which is international markets, coupled with the fact that there was a lot of players perhaps not doing things the right way. 00:11:58.879 --> 00:12:07.759 I think you guys are in California, I mean Canada, I think we've had the sort of, you know, ability to be able to look at what has happened in our independent markets. 00:12:07.919 --> 00:12:11.759 And there's been some good actors and a lot of bad that's happened. 00:12:11.840 --> 00:12:19.039 And I think that village farms really represented to me a lot of the good and a lot of the future, quite frankly, in terms of where the international markets are going. 00:12:19.200 --> 00:12:33.039 So I think that my expertise combined with their assets on the ground, both here in Canada and the US, as well as in the Netherlands, combined with where the trends are going in international cannabis, really made this almost like a perfect synergy remember. 00:12:33.279 --> 00:12:34.240 So very excited to be. 00:12:34.720 --> 00:12:44.080 And just for the sake of clarity, you say EU GMP and the largest grow operation, but that grows actually in Canada, correct? 00:12:44.480 --> 00:12:45.039 That's correct. 00:12:45.120 --> 00:12:45.279 Yeah. 00:12:45.360 --> 00:12:51.840 And though for those that may not be familiar, EU GMP is good manufacturing practices awarded by the European Union. 00:12:52.000 --> 00:12:56.639 It is the standard to which medical cannabis is held globally or internationally. 00:12:56.799 --> 00:13:03.279 I think in North America, we've done a good job calling cannabis medicine, but have done a pretty poor job treating it as such. 00:13:03.440 --> 00:13:08.320 And so, yes, the EU GMP is at that good manufacturing practice standards. 00:13:08.480 --> 00:13:18.399 The facility, one of the facilities that we have at Village Farms is almost a 4 million square foot facility, of which 2.5 million square feet is built out here in Canada and Delta BC. 00:13:18.639 --> 00:13:25.039 Village Farms, for those that may not be familiar, is a 40-year-old company that was set up by my DJ or our CEO. 00:13:25.200 --> 00:13:30.720 And they have a lot of experience growing products, including vegetables such as cucumbers and tomatoes. 00:13:30.799 --> 00:13:37.600 And about five, five and a half years ago, I pivoted to cannabis in Canada and retrofitted a lot of our greenhouses here now. 00:13:38.000 --> 00:13:38.960 Delta BC. 00:13:39.039 --> 00:13:40.159 Is that just a coincidence? 00:13:40.720 --> 00:13:43.759 That seems like a great name for a town that grows a lot of weed. 00:13:45.120 --> 00:13:52.000 You find the puns in cannabis just keep going and indeed Delta BC is our home. 00:13:52.559 --> 00:14:08.879 Well, it sounds like EU GMP was a really big part of your hypothesis to gain confidence in going in-house at village farms, but also has been a big part of your work in consulting as you've been taking on the international markets. 00:14:09.120 --> 00:14:12.320 So I think we should talk about EU GMP a little bit. 00:14:12.559 --> 00:14:29.279 And if you could just give us more of an in-depth understanding of what it takes to become EU GMP, what changes inside the building, and why EUGMP has become this standard in order to be able to participate in the international markets. 00:14:30.080 --> 00:14:30.960 Sure, Android. 00:14:31.120 --> 00:14:36.240 As I mentioned, in North America, we've treated cannabis as medicine, but not regulated as such. 00:14:36.399 --> 00:14:40.080 In Canada, that has a federal framework for cannabis. 00:14:40.240 --> 00:14:48.799 We still operate to something called GBP of good production practices by a virtual regulatory framework designed by our regulatory health Canada. 00:14:49.120 --> 00:15:04.399 In international markets, in Europe, being probably one of the more aggressive up-and-coming markets, Germany, the UK, Poland, soon to be France, Spain, et cetera, have all mandated that this product is going to be put into pharmacies, much like any other pharmaceutical product. 00:15:04.559 --> 00:15:14.480 So I think that's the first fundamental shift from a North American mindset, is that this is not something that you just grow and then you basically put on shelves through dispensaries. 00:15:14.559 --> 00:15:20.000 This is actually being regulated through the traditional pharmaceutical supply chain and channels. 00:15:20.159 --> 00:15:30.639 And so in order for these products to make their way into those traditional supply chain channels, this needs to be very similar to the way that other medicines are regulated. 00:15:30.799 --> 00:15:36.000 So if you have a pharmaceutical product that is sold to pharmacies, it's regulated in a very similar way. 00:15:36.159 --> 00:15:46.080 Now, guaranteed we are we're talking about dried flour and extracts and oils, and we're not talking about tablets or pills in many cases, but the way that those products are manufactured is identical. 00:15:46.159 --> 00:15:49.840 And that's really the heart of what GMP basically gets at. 00:15:50.080 --> 00:15:54.879 Typically, GMP is harmonized across a variety of different countries. 00:15:55.039 --> 00:16:13.360 What that means is the US FDA, Health Canada and Canada, and a bunch of regulators in Europe, the UK, Germany, et cetera, basically all

got together and said, hey, if we regulate a medicine in our country, it will be deemed acceptable by you as the other country to accept that we've licensed somebody for GMP. 00:16:13.440 --> 00:16:19.679 And therefore, there's something called a mutual recognition agreement that's all of these countries basically sign up to. 00:16:19.840 --> 00:16:23.679 Cannabis is not covered under that mutual recognition agreement. 00:16:23.759 --> 00:16:33.200 And so what that means is if I want to be able to sell cannabis in Germany or the United Kingdom, I need to go to their regulator and actually get the GMP certification awarded. 00:16:33.360 --> 00:16:40.960 So that means is a German inspector needs to come to Delta DC, inspect me, and make sure that I'm operating to that good that is action practices standard. 00:16:41.039 --> 00:16:45.919 And that's basically how companies in Canada, such as ours, have gone about getting GMP. 00:16:46.159 --> 00:16:56.720 There's a handful of probably 10 to 12 companies in Canada that currently have this EU GMP certification and probably another 10 companies globally that also have gone down a similar path. 00:16:57.600 --> 00:16:58.159 Wow. 00:16:58.399 --> 00:17:09.359 So there's this interesting conversation happening this year, obviously, because the US is going through Schedule 3 and there's a lot of pontificating on what that actually means for our industry. 00:17:09.680 --> 00:17:24.160 And also in US cannabis, especially California cannabis, there's this other conversation about the small operators, the small cultivators from Northern California, and often the pressures that they're feeling from large-scale manufacturing. 00:17:24.319 --> 00:17:30.240 And there's always been this dream of like global California cannabis or U.S. 00:17:30.319 --> 00:17:30.880 cannabis. 00:17:31.039 --> 00:17:43.359 And what I'm starting to hear is that there's like some structural disconnects between the dream that lives in Northern California's head and what the actual global cannabis stage is evolving at. 00:17:43.440 --> 00:17:52.400 And I sitting up in Canada and working with all these companies and probably hearing all the interest of US companies entering this global landscape. 00:17:52.559 --> 00:17:53.599 How are you thinking about it? 00:17:53.680 --> 00:17:58.799 How are you thinking about the U.S.'s uh competitiveness on this global landscape? 00:17:59.440 --> 00:18:02.559 Yeah, look at, you know, the US has done a phenomenal job. 00:18:02.720 --> 00:18:08.079 I think you look at California where you guys sit, or you look at any of the US markets, I think they are very mature. 00:18:08.160 --> 00:18:15.839 And I think the world typically follows the trends that emerge, whether it be in product formats, whether it be in cultivar varieties or any of that. 00:18:15.920 --> 00:18:17.759 I think California really leads that. 00:18:17.839 --> 00:18:25.039 So I think there is definitely this capability by American producers

to be able to take advantage of international cannabis markets. 00:18:25.279 --> 00:18:28.319 It isn't, however, a one-size-fits-all solution. 00:18:28.480 --> 00:18:39.039 And I think that what has been lacking in the US so far has really been this federal level of regulatory frameworks and compliance that operators had to face, right? 00:18:39.119 --> 00:18:40.559 And what I mean by that is twofold. 00:18:40.720 --> 00:18:51.680 On the cultivation side, you've got states basically that are regulating cultivation activities and really it's very limited to even lower than what we would call GACP or good agricultural collection practices. 00:18:51.839 --> 00:19:00.000 So I think that's the first thing in the US is that operators really need to get their heads around operating in a federally compliant manner. 00:19:00.160 --> 00:19:10.720 And sure, I think that when we see rescheduling actually happen and all of the legislation that will come up as a result of that, the FDA and the DEA, I think that will raise the standards for sure in the US. 00:19:10.799 --> 00:19:16.079 I think what that will also mean is you don't necessarily have every single operator that would be compliant with that. 00:19:16.240 --> 00:19:20.720 I think that's they may be operators that are going to find it hard to comply with that. 00:19:20.960 --> 00:19:24.640 The second piece is, and I say this often, is what is your right to win? 00:19:24.799 --> 00:19:30.079 Just because you have a license to be able to cultivate cannabis doesn't necessarily mean that you will be successful. 00:19:30.240 --> 00:19:33.359 And I think it more so applies to US operators. 00:19:33.519 --> 00:19:54.079 You've still got states in the US that are still legalizing, and the argument can be made: do we double down on a US market that is opening up and our home base versus trying to understand all the stuff that I'm talking about, GACP, GDP, GMP compliance, EU GRP compliance, and what's the size of the prize in terms of the total addressable market? 00:19:54.400 --> 00:19:56.240 It's definitely a live conversation. 00:19:56.319 --> 00:20:01.599 And back in my consulting days, one that would I would have quite frequently, including with the US operators. 00:20:01.759 --> 00:20:04.880 And I think that it is worth doubling down on that right to win. 00:20:05.039 --> 00:20:12.000 What makes you successful and what makes you successful at home isn't necessarily what's going to make you successful at international markets. 00:20:12.079 --> 00:20:15.680 So I think there's companies ought to look at that very carefully. 00:20:15.839 --> 00:20:18.480 And there's certainly, Ben, you mentioned craft cultivators. 00:20:18.559 --> 00:20:21.839 I certainly think there is a there's room for all-sized players. 00:20:21.920 --> 00:20:31.119 I think we are certainly a sizable player in the market, but there's always room for smaller craft players, and even the international European markets definitely look at craft cannabis products. 00:20:31.200 --> 00:20:39.599 So I think just because the regulatory restrictions in there is a high doesn't necessarily is not a reason to say you want to or not don't want to play in a market. 00:20:39.680 --> 00:20:41.839 I think you have to look at what's a right to win? 00:20:42.000 --> 00:20:43.839 How are you going to be able to produce these products? 00:20:44.000 --> 00:20:47.519 Are you going to be able to comply with the strictest level of compliance? 00:20:47.599 --> 00:20:52.400 And that's the one big piece for US operators to really get their heads around. 00:20:52.799 --> 00:20:53.920 Makes sense. 00:20:54.559 --> 00:21:10.960 It's interesting this right to win and talking about what the size of the international market is, because my understanding is that the size of the international market, almost totally fully combined, is still maybe not even the size of the California market. 00:21:11.119 --> 00:21:15.119 And we are just talking about where the New York market is at the top of the hour. 00:21:15.279 --> 00:21:17.519 But California is a$4 billion market. 00:21:17.680 --> 00:21:20.240 Michigan is over a$3 billion market. 00:21:20.720 --> 00:21:25.680 Is international expansion a shiny object that isn't really prime for the pump? 00:21:25.759 --> 00:21:40.079 Or is there really an opportunity because there's so many barriers to participate that if you are able to get that golden ticket of that EUGMP, that the that there's so few players that you can have a really large piece of the pie? 00:21:40.799 --> 00:21:43.359 Yeah, I think it again, you raise a really good point. 00:21:43.440 --> 00:21:47.519 And as I mentioned, I don't think it's necessarily right for every single operator. 00:21:47.759 --> 00:21:48.960 Is it a shiny object? 00:21:49.039 --> 00:21:49.680 I don't think so. 00:21:49.839 --> 00:21:58.640 I think that for real companies that are serious about putting out a consistent, compliant product into the market, it is a sizable opportunity for us at Billers Product. 00:21:58.720 --> 00:22:04.240 It certainly represents a Growing chunk of our revenue, and it definitely is something that we are quite focused on. 00:22:04.319 --> 00:22:06.960 But it may not be right for every single player. 00:22:07.119 --> 00:22:14.960 I think you will see more for US MSOs start to jump on the international bandwagon and it will work out for some and it may not work out for others. 00:22:15.039 --> 00:22:18.880 And I think it really goes back to your core and actually understanding what you do well. 00:22:19.039 --> 00:22:22.880 At Village Farms, as an example, I think we have understood cultivation really well. 00:22:22.960 --> 00:22:27.279 It's something that we do at scale, repeatedly, time over time, in a compliant fashion. 00:22:27.440 --> 00:22:30.319 And I think that's a big chunk of what we get right. 00:22:30.400 --> 00:22:32.559 And so I think it really comes back to your core. 00:22:32.880 -->

00:22:34.960 And cultivation, by the way, is one aspect. 00:22:35.119 --> 00:22:44.799 I think that if you are good at, as an example, extraction or manufacturer gummies or vapes, I think they there are certainly sizable opportunities in international markets. 00:22:44.960 --> 00:22:56.079 I think the other piece is, and this is where often confuses people, and this is the shiny aspect, is that there is a significant premium for the products that are being put onto international markets. 00:22:56.240 --> 00:23:06.319 Product that, you know, the price that you'll get for a live resin product or a live resin gummy, as an example, in Australia, is significantly higher than what you would get in the United States. 00:23:06.559 --> 00:23:14.640 However, the regulatory compliance of you actually being able to launch that product in that market is what catches most people off guard, right? 00:23:14.720 --> 00:23:21.519 People look at that shiny object and go, like, oh wow, I can get 15 bucks for 15 gummies as an example or whatever it might look like. 00:23:21.680 --> 00:23:26.559 And if you get chasing that shiny object is where most people tend to go astray. 00:23:26.640 --> 00:23:37.200 And then they come back and look at, oh, you've got this whole EU GMP, Australia GMP regulatory requirement that basically requires me to turn my whole business upside down. 00:23:37.359 --> 00:23:38.480 And it may not work, right? 00:23:38.640 --> 00:23:45.359 I often say this when I was in consulting, I used to tell people, I'm like, are you prepared to have your whole operation flipped on its head? 00:23:45.440 --> 00:23:54.799 Because what you need to do to be able to service Canada or the United States is completely different from the way that you need to set your operations up to deal with international markets. 00:23:54.960 --> 00:24:09.920 Everything from like how people enter your facility and the gowning process, an example, and the cleanliness and the SOPs, it's vastly different and could really increase costs for people that don't necessarily need to have this if the core market is a big chunk of your business. 00:24:10.559 --> 00:24:14.000 So let's talk a little bit about eye of the price size of the price. 00:24:14.160 --> 00:24:14.880 Eye of the price. 00:24:15.039 --> 00:24:15.839 Size of the prize. 00:24:15.920 --> 00:24:17.599 It's usually about two parts, right? 00:24:17.680 --> 00:24:23.759 It's there's the size of the population, which a lot of people famously quote Germany is the 80 to 90 million people. 00:24:24.319 --> 00:24:27.200 And you have the policy. 00:24:27.440 --> 00:24:33.359 And in Germany, people have been very excited about their methodical rollout. 00:24:33.599 --> 00:24:38.240 However, there seems to be some friction this year, and you probably know it a lot better than me. 00:24:38.319 --> 00:24:46.720 But one of those elements is them cracking down on GMP washing and maybe not being encouraged to accelerate the adult use rollout. 00:24:47.839 --> 00:24:50.400 So Jason Adelstone was on recently. 00:24:50.480 --> 00:24:53.359 He said people are really good at watching the policy and not the politics. 00:24:53.519 --> 00:24:57.359 And being in the seat that you are, I'm guessing that you follow the politics pretty well. 00:24:57.519 --> 00:25:09.359 So, what are your thoughts about where Germany is heading in the actual size of the prize for that market versus maybe another country that's starting to take your level of interest to the next level? 00:25:09.920 --> 00:25:16.160 Yes, I'd say Ben, generally, I think the cannabis industry has been pretty good at finding a way around things. 00:25:16.400 --> 00:25:24.319 I think compliance has always been this nice to have thing that not necessarily everyone has followed, and people have found ways around that. 00:25:24.400 --> 00:25:33.039 And I think GMP watching certainly is one of those topics and is very timely at the moment because what you are seeing is regulators really clamping down on that. 00:25:33.200 --> 00:25:36.640 For us, obviously at Dillers Farms, we have our EU GMP certification. 00:25:36.799 --> 00:25:42.480 In fact, we're up for our two-year renewal, and we've now twice renewed our EU GMP certifications. 00:25:42.720 --> 00:25:51.039 It doesn't really apply to us, but I think what you are seeing is regulators starting to track down on these activities that are happening across the industry and are quite rampant. 00:25:51.279 --> 00:26:00.640 I think that people that don't necessarily meet the necessary compliance requirements are going to find it hard to be able to get products into certain international markets. 00:26:00.720 --> 00:26:03.359 And Germany certainly is one of those examples. 00:26:03.680 --> 00:26:04.079 I think that's a good thing. 00:26:04.720 --> 00:26:13.279 Just for the sake of clarity, the the intent of the rules is that it's EU GMP manufactured from basically seed to sale. 00:26:13.440 --> 00:26:14.240 Is that correct? 00:26:14.559 --> 00:26:15.119 That's correct. 00:26:15.200 --> 00:26:15.359 Yeah. 00:26:15.599 --> 00:26:27.759 And then your sale product could be dry flour, as of the case in Germany, and we can get into the nuances of the market because every international market is very different in terms of what your finished product or your final product actually looks like. 00:26:27.920 --> 00:26:43.440 So in Germany, it's basically dry flour and oils, and then you get downstream manufacturing activities like dummies and vapes that are not necessarily produced in Canada, but then using the inputs, either flour or oils are then manufactured at the pharmacy level because of the nuance that they have in their legislation. 00:26:43.599 --> 00:26:45.839 But it is exactly it's from seed to sale. 00:26:45.920 --> 00:26:52.319 So typically most people, this is where they get tripped up is GMP, and there's different interpretations of where GMP starts. 00:26:52.480 --> 00:26:55.279

And there was a timely article actually today that I was reading about this. 00:26:55.440 --> 00:27:03.839 But generally, everything that is involved with cultivation of a plant until that is physically separated from the plant, when you actually have flower that's that gets removed. 00:27:04.000 --> 00:27:08.160 Any activities up until that point of removal of flower is a GMP activity. 00:27:08.240 --> 00:27:10.960 And then drying also is considered a GMP activity. 00:27:11.039 --> 00:27:16.400 So basically, you have GACP on the cultivation side and then you have GMP that kicks in post that that point. 00:27:16.640 --> 00:27:19.519 So it is really a true seed to sale process. 00:27:19.599 --> 00:27:25.839 And this is why I say when you completely redo your operations when you're getting GMP, it is a big chunk of that, right? 00:27:25.920 --> 00:27:34.640 Because when you're putting product out for a California market or a Canadian market, it's quite different than you starting to put out products for the international market. 00:27:34.799 --> 00:27:47.039 So you really need to look at that eye of price, you need to look at that size of the market, you need to look at all of those different elements that go into this and reverse engineer your business to be able to deal with that. 00:27:47.680 --> 00:28:05.039 And when we think about the long tail of what export of cannabis means as an opportunity, I saw in the most recent Village Farms financials that were released that you guys have been experiencing extraordinarily extraordinary growth with your international exports. 00:28:05.200 --> 00:28:08.960 I think it was like up 72% for quarter two. 00:28:09.359 --> 00:28:13.279 So clearly there's been a lot of success and growth in that area. 00:28:13.519 --> 00:28:16.640 But it also makes me wonder is how long that can last. 00:28:16.799 --> 00:28:27.200 At some point, is Germany or the Netherlands or some of these other countries going to decide to actually try to keep the cannabis cultivation closer to home? 00:28:27.359 --> 00:28:30.640 Or will they keep the doors open the way that they have so far? 00:28:31.119 --> 00:28:31.759 Yeah, I don't know. 00:28:32.000 --> 00:28:32.480 It's interesting. 00:28:32.559 --> 00:28:41.680 I think there is about six cultivators currently in Germany that cultivate, and I think they cultivate less than six, seven percent of what the market actually can consume. 00:28:42.000 --> 00:28:45.200 So in theory, it sounds great to be able to limit that. 00:28:45.359 --> 00:28:52.559 But I think what we are seeing is you have Germany on April 1 of 2025 basically descheduled cannabis, right? 00:28:52.640 --> 00:28:57.519 So what it means is it came off the narcotics list and became just a regular pharmaceutical product. 00:28:57.680 --> 00:29:01.839 And by virtue of doing that, it basically allowed imports to occur. 00:29:02.000 --> 00:29:07.519 I don't necessarily see the dialing back or the rolling back of that legislation anytime soon. 00:29:07.759 --> 00:29:12.880 There's many camps that talk about trying to limit telemedicine and how prescribing occurs. 00:29:13.039 --> 00:29:19.839 But I think the one fundamental thing, at least from our perspective, is cultivation of cannabis is generally in short supply. 00:29:20.000 --> 00:29:24.079 I think EU GMP cannabis in particular is even further in short supply. 00:29:24.160 --> 00:29:32.799 So when you look at markets like the United Kingdom, you look at markets like Germany, you look at markets like Australia, there is generally a shortage of EU GMP certified cannabis. 00:29:33.039 --> 00:29:35.519 I don't necessarily see this being shut down. 00:29:35.759 --> 00:29:37.440 In fact, what we are seeing is the opposite. 00:29:37.599 --> 00:29:39.200 We are seeing new markets open up. 00:29:39.359 --> 00:29:43.200 We have seen more enforcement, like the GMP watching piece that we just talked about. 00:29:43.440 --> 00:29:47.440 And these new markets coming online are also all requiring EU GMP flowers. 00:29:47.519 --> 00:29:50.480 So does the growth necessarily in Germany slow down? 00:29:50.559 --> 00:29:50.960 Perhaps. 00:29:51.119 --> 00:30:01.920 Does a new market open up like France or Spain or Italy or any of these other sizable European markets that still have been watching on the sidelines not opened up yet? 00:30:02.079 --> 00:30:02.880 But do they open up? 00:30:03.039 --> 00:30:03.200 Yes. 00:30:03.279 --> 00:30:09.759 And I think the what's the common fundamental that all these markets actually need is that European Union GMP certification. 00:30:09.920 --> 00:30:16.160 And it's easy to talk about a certification, but really what that means in practice is you've got your strains that are all have stability. 00:30:16.319 --> 00:30:36.480 So when you look at a product like Pink Cush, which is one of our products and probably the most sold product in a legal market globally, both Canada and internationally, what we have on our Pink Cush as an example is stability to show that one year later, our potency on that product, if we claim that it's 25%, it is still 25% after that one year. 00:30:36.559 --> 00:30:39.519 And I think every new market that opens up rules that data. 00:30:39.599 --> 00:30:48.960 And I think what we've built is a really solid foundation to be able to say that any new market that opens up is going to need that basic level of regulatory compliance. 00:30:49.440 --> 00:30:59.039 Talk about EU GMP, Australia GMP or Brazil GMP, but any of these markets that are opening up all agree to that base standard of a pharmaceutical product. 00:30:59.279 --> 00:31:01.519 That we've done a really good job developing. 00:31:01.599 --> 00:31:05.759 And I think up here that also have a EU GMP certification have done a similar job, right? 00:31:05.839 --> 00:31:12.720 So I think you look at all of the competitors in the Canadian market, I think, that have EU GMP certification, they have all gone

down the same path. 00:31:12.799 --> 00:31:15.359 I think you were talking earlier on the channel about PureLeap and Aurora. 00:31:15.519 --> 00:31:19.920 And I think the reason why PureLeap is going after Aurora is because of that EU GMP certification, right? 00:31:20.000 --> 00:31:25.440 I think UPREA's drawn quite well on the international side, but I think what we're missing is that EU GMP asset. 00:31:25.519 --> 00:31:28.079 So it really speaks to what we've built as a base. 00:31:28.160 --> 00:31:34.240 And so we're not concerned necessarily about the slowdown in one market, but they will be opening up of more markets. 00:31:34.799 --> 00:31:43.920 I love to think about being in all of those countries that you just name dropped, like France and Italy and Spain, and just having more cannabis in the air. 00:31:44.160 --> 00:31:44.799 I'm excited. 00:31:44.880 --> 00:31:46.240 Which one's coming next? 00:31:46.480 --> 00:31:48.160 Which one can we look forward to? 00:31:48.480 --> 00:31:56.000 Yeah, so listen, I think France definitely has been talked about as having the largest number of cannabis consumers in Europe. 00:31:56.079 --> 00:31:58.640 And so it's certainly a market that is opening up. 00:31:58.799 --> 00:32:02.160 It will look a little bit different in terms of the types of products that can be sold. 00:32:02.319 --> 00:32:07.519 I think what we are seeing is, and we're familiar with this in Canada, is cannabis legalization is a process. 00:32:07.599 --> 00:32:08.640 It's not only that, right? 00:32:08.720 --> 00:32:10.640 I think this is the one thing that people often forget. 00:32:10.880 --> 00:32:14.799 And so I think what new markets coming up are learning is do we want flour? 00:32:14.960 --> 00:32:15.759 Do we want oils? 00:32:15.839 --> 00:32:16.720 Do we want vapes? 00:32:16.880 --> 00:32:17.680 Do we want gummies? 00:32:17.759 --> 00:32:20.799 I think so the formats of products will continue to evolve. 00:32:20.880 --> 00:32:23.920 So France definitely is an interesting one, but also Spain. 00:32:24.000 --> 00:32:29.440 I think they opened up and are allowing cannabis to be sold through the hospitals there. 00:32:29.519 --> 00:32:31.839 So those are all very interesting markets. 00:32:32.000 --> 00:32:36.240 And of course, we've got the Netherlands as well, of which we have one of STEM licenses for coffee shops. 00:32:36.319 --> 00:32:38.240 So it's only a market that we are quite at. 00:32:39.279 --> 00:32:42.559 I love the idea of formalizing the coffee shops in the Netherlands. 00:32:42.720 --> 00:32:44.480 That's a full circle moment. 00:32:44.720 --> 00:32:47.359 Because they're a really interesting structure in the early years, right? 00:32:47.519 --> 00:32:53.200 Right, where they had only like considered the legalization of a part of the process or the supply chain. 00:32:53.359 --> 00:32:53.680 Yeah. 00:32:53.920 --> 00:32:54.880 Really interesting stuff. 00:32:55.039 --> 00:33:02.160 So as as I want to go back

to what Anna Ray was asking about the transfer of where cannabis is growing. 00:33:02.319 --> 00:33:07.440 It also makes me start to think about the players that get involved in the competition and all that kind of stuff. 00:33:07.519 --> 00:33:14.720 So as this kind of stuff opens up, it starts attracting more larger capital, right? 00:33:14.799 --> 00:33:17.759 And that involves big pharma, big tobacco. 00:33:18.000 --> 00:33:20.000 And we know they've been involved. 00:33:20.160 --> 00:33:25.200 There's GW Pharma, there's been invested in a number of cannabis companies. 00:33:25.519 --> 00:33:30.559 How do you anticipate that landscape shifting over the next couple of years? 00:33:30.799 --> 00:33:37.519 Do you anticipate big tobacco, big pharma getting even more involved as these prizes grow? 00:33:38.319 --> 00:33:40.799 Yeah, I think that's a super relevant point. 00:33:40.880 --> 00:33:49.599 And I think what we're seeing most recently is I think what we saw in Canada early on is a lot of the BEM alcohol companies decided to really place their bets on the sector, right? 00:33:49.680 --> 00:33:57.599 We had Wilson Cruz and Constellation brands with canopy, and the list is analyst with respect to a number of BEV alcohol companies that enter the sector. 00:33:57.759 --> 00:34:00.720 And so I think the beverage category is certainly interesting. 00:34:00.880 --> 00:34:05.519 I think regulations needed to catch up with where this trend was moving towards. 00:34:05.680 --> 00:34:17.280 I think in Canada, we have since done a decent job trying to regulate beverages and start to finally allow six-pack beverages to be sold, which was not permitted in the early days of legalization. 00:34:17.519 --> 00:34:23.920 But I think that if you look at tobacco companies as an example, their existing legacy business is dying, right? 00:34:24.000 --> 00:34:30.719 I think if it wasn't for the snooze or the pouches as it's called, their business would be significantly suffering, right? 00:34:30.800 --> 00:34:37.519 So you've gone into these differentiated reduced risk products that the tobacco companies have embarked on. 00:34:37.599 --> 00:34:41.760 And I think they've looked at cannabis as hitting pretty much every definition, right? 00:34:41.920 --> 00:34:42.880 Is it safety use? 00:34:43.039 --> 00:34:47.760 I think tobacco companies in particular have been really hammered on the relative safety. 00:34:47.840 --> 00:34:54.559 And I think tobacco and cannabis are very different substances, even though they are a similar plant or come from a plant substance. 00:34:54.639 --> 00:34:56.559 They're very different substances in general. 00:34:56.719 --> 00:35:01.840 And so I think from a safety perspective, cannabis is arguably far more safer than tobacco is. 00:35:01.920 --> 00:35:18.239 And so I think that the tobacco companies looking at the sector, and you mentioned BAT is one of them, and there's certainly many others that are very active also in the sector,

are all looking at cannabis as being the future, as being the next generation of a product that they would be able to meaningfully adapt. 00:35:18.400 --> 00:35:22.880 And I think whether we like it or not, they will be part of this industry, right? 00:35:23.119 --> 00:35:26.880 We're certainly seeing the BAT organogram deals through. 00:35:26.960 --> 00:35:31.440 And I think there is a lot that's being done at organogram with British American Tobacco. 00:35:31.599 --> 00:35:37.840 They have something called the PVC, which is the product development corporation, that involves a lot of RD being done in New Brunswick. 00:35:37.920 --> 00:35:43.440 And certainly seeing these tobacco players look at the sector and say, hey, this is a sector that we see up and coming. 00:35:43.519 --> 00:35:45.360 It actually fits a lot of our categories. 00:35:45.519 --> 00:35:50.320 We manufacture vapes, we manufacture cigarettes, we manufacture a lot of the similar type of commodities. 00:35:50.480 --> 00:35:54.719 So can we bring our expertise and do we then get involved with some of these companies? 00:35:54.800 --> 00:35:59.920 And so you are certainly seeing CPG companies and tobacco companies get involved. 00:36:00.079 --> 00:36:05.599 I think the other piece that you're starting to see internationally is a lot of the regulations favor these types of products. 00:36:05.760 --> 00:36:13.360 So what I mean by that is you look at a market like the Yang Pingdon, you can actually get a CBD beverage at Whole Foods in the UK. 00:36:13.519 --> 00:36:18.960 And it's because their regulations allow for that product format to be sold at retail, right? 00:36:19.039 --> 00:36:25.760 You can go to any high street store in the UK or grocery store in the UK and pick up a CBD beverage. 00:36:25.920 --> 00:36:32.639 And there's no DA kind of weird regulations depending on the state where you're at and all of the complexities that the US has. 00:36:32.800 --> 00:36:34.000 It's just federally legal. 00:36:34.159 --> 00:36:36.639 And so it's very easy for them to place that on that. 00:36:36.800 --> 00:36:46.159 So you will see more CTG tobacco companies get involved, particularly on the international side, because it allows them that safety and that regulatory certainty that they are after. 00:36:46.800 --> 00:37:14.559 It's interesting to really think about the timing of when BAT started to put money into organogram over the past couple of years, because it was at a time when American cannabis was experiencing a really intense capital crunch and watching organogram receive capital from a big tobacco company in pretty large amounts, like substantive amounts, to be able to really change the trajectory of the business, to invest in RD and innovation. 00:37:14.800 --> 00:37:39.599 It just kept reminding me while that was happening of how far behind the US is because of not having federal legality that allowed an international company to be able to come in and put capital into an American company, which is really a bigger opportunity financially today, as opposed to having to bet on the future of these large international legal markets. 00:37:39.920 --> 00:37:50.400 And I know that you've worked with a lot of these companies and have helped them understand the cannabis landscape and probably to think about where investment would make sense. 00:37:50.800 --> 00:38:06.320 Do you think that what's happening with Schedule Three will be a moment that will create a capital opportunity for American companies to be looked at the same way that BAT decided to invest in organogram? 00:38:06.800 --> 00:38:08.239 Or is it not good enough? 00:38:08.320 --> 00:38:20.000 And we need further federal policy progress beyond Schedule three to really be able to inject capital into the US market from international global companies. 00:38:20.719 --> 00:38:24.719 Yeah, I think that's a super, again, relevant and timely topic. 00:38:24.880 --> 00:38:27.360 I think that rescheduling is a great start. 00:38:27.440 --> 00:38:40.480 And I think that certainly signals to the capital markets that there is certainty from a US government perspective with respect to investing in the sector and really allowing companies to meaningfully participate in the commerce of these products. 00:38:40.639 --> 00:38:59.360 And so far, there was there's been a lot of sort of disharmony, and particularly against any sophisticated company, a leave alone, a tobacco or a CPG player, really any meaningful company of scale needs that basic level regulatory certainty that, hey, I'm not going to go to jail for an activity that the US federal government considers to be a criminal offense, right? 00:38:59.440 --> 00:39:01.679 So I think that's just table stakes, right? 00:39:01.840 --> 00:39:07.840 Having said that, we've got this whole industry in the United States that is developed quite meaningfully and it is relevant. 00:39:08.000 --> 00:39:14.079 So I think that as long as companies in the United States get understand their right to win, there is going to be that capability. 00:39:14.400 --> 00:39:16.079 I come back to Village Farms as an example. 00:39:16.239 --> 00:39:23.280 We've got a sizable asset in Martha taxes, and we certainly are looking very closely at the scheduling and the rescheduling process. 00:39:23.440 --> 00:39:27.840 And it does offer us the opportunity to be able to be a meaningful player in the market. 00:39:27.920 --> 00:39:45.599 I think if you look at our EU GMP certification, our international experience and exposure that we've had by virtue of the legal market in Canada and what that's done to be able to allow us to both participate in the domestic market, but also international markets, it really gives us a significant leg up ahead against a lot of the US operators. 00:39:45.760 --> 00:39:48.639 So I think that, and again, Q relief, I think is quite similar. 00:39:48.800 --> 00:40:02.079 So I think that rescheduling goes far enough, but I think

it needs to be a far more from a regulatory perspective, and one that I'm keeping an eye on, because if you're in cannabis on the international side, you're paying very close attention to regulation. 00:40:02.239 --> 00:40:10.320 I think the one thing that we haven't seen so far is what is the DEA going to say beyond this application portal that basically has them come in and inspect you? 00:40:10.480 --> 00:40:12.639 Where is the export permit that I can apply for? 00:40:12.719 --> 00:40:14.079 What's the timeline for that permit? 00:40:14.239 --> 00:40:18.000 This is stuff that we deal with on a day-to-day basis in regulated markets. 00:40:18.079 --> 00:40:32.719 And so I think we need a bit more meaningful regulatory understanding of what rescheduling actually means, besides the fact that, okay, it's medically legal now, but okay, where's the regulation that actually talks about am I operating through GPP, GACP, GMP? 00:40:32.960 --> 00:40:34.480 Is the FDA licensing that? 00:40:34.639 --> 00:40:36.000 Where's that framework look like? 00:40:36.159 --> 00:40:44.880 So I think you need to see a bit more of that, but I you will see capital just by virtue of the United States, its size, it's your involvement on the international stage. 00:40:44.960 --> 00:40:47.679 I think you will see more capital flow in. 00:40:47.840 --> 00:40:59.199 And again, companies like ours that have been around will certainly be benefiting from our experience in the international markets while the US is really stalled on the federal reform state. 00:41:00.320 --> 00:41:06.239 I'm getting sense that Deep gets to watch the roller coaster instead of ride it, so to speak. 00:41:06.400 --> 00:41:15.360 And so Deepoc is as Anna Ray and I are hopelessly mired in uncertainty with federal regulations in the US. 00:41:15.599 --> 00:41:23.199 I'm happy to hear that you have some exposure through through your Texas facility, but it although it sounds like you're able to be patient with it. 00:41:23.920 --> 00:41:33.039 Aside from like US policy, what do you anticipate happening in the next call 12 to 18 months with international policy that you're excited about? 00:41:33.280 --> 00:41:40.239 Where while you're waiting for us to wait and see what happens in the US, like what are you actually anticipating happening elsewhere? 00:41:40.639 --> 00:41:44.320 Look, I think, Ben, growth continues on international markets, right? 00:41:44.480 --> 00:41:47.519 I think nobody's waiting for the United States to legalize cannabis. 00:41:47.679 --> 00:41:51.599 The markets have shown for the last three to four years already that they're moving ahead. 00:41:51.679 --> 00:41:59.920 And so I think that I predict that international markets, like I said, France, Spain, Poland will continue to develop their regulatory frameworks. 00:42:00.079 --> 00:42:07.360 We didn't really talk about Switzerland, but that's a really interesting market that has both medical and, in their own sense, adult use frameworks in place. 00:42:07.440 --> 00:42:13.280 And I think they're really pushing the envelope around what a regulated adult use market can look like. 00:42:13.440 --> 00:42:30.079 And I think that for those paying attention to the adult use conversation on the international stage, Switzerland's a phenomenal market to look at because they have figured out how do you comply with UN treaties, how do you make sure that you are doing a pilot project, how do you make sure that you allow imports, how do you make sure your medical program isn't suffering? 00:42:30.159 --> 00:42:32.400 And these are not easy things to grapple with. 00:42:32.559 --> 00:42:34.880 Arguably in Canada, we've done a number of things, right? 00:42:34.960 --> 00:42:38.719 And we've certainly moved ahead on policy, but I think we failed at a couple of things, right? 00:42:38.800 --> 00:42:43.760 So I think that again, back to my previous comment around cannabis legalization being a process, not an event. 00:42:43.920 --> 00:42:48.880 You're seeing countries pick up from the mistakes that were made in Canada or in California as an example. 00:42:49.039 --> 00:42:51.840 What can we learn from that on taxation on the black market? 00:42:52.000 --> 00:43:02.800 To answer your question, markets are moving ahead, whether the US gets its act together in the next year or two years, I think it certainly hamstrings a bit the incumbent players in the United States. 00:43:02.880 --> 00:43:20.719 But as you're seeing with players like us, or Cure Leaf as an example, that hasn't stopped the American companies in many ways to be able to go international and be able to take advantage of some of those opportunities, albeit not shipping a product from the US to these markets, but finding a way either to Canada or even international markets to be able to participate in that. 00:43:20.880 --> 00:43:22.239 So the markets are going to go ahead. 00:43:22.320 --> 00:43:23.840 I think there is going to be more opening up. 00:43:23.920 --> 00:43:26.000 I think GMP is going to be at a base level. 00:43:26.159 --> 00:43:34.480 Companies are now starting to pay attention finally to actually getting that UGMP certification the series players already had, but you will see more of that. 00:43:37.519 --> 00:43:46.000 So as you're talking about all of this complexity in the global market, these triggers that are happening in all these different countries. 00:43:46.239 --> 00:43:49.039 And I know how many companies you've been under the hood in. 00:43:49.119 --> 00:43:53.599 It sounds like you've consulted for close to 40 companies all over the world. 00:43:54.000 --> 00:43:59.760 I think there's few people who have a better perspective to give us some insights and what separate. 00:44:00.719 --> 00:44:03.199 Great companies in cannabis from the rest. 00:44:03.519 --> 00:44:24.559 And I am curious because we talk to so many people, but also just from where you sit as you're thinking about the future of

cannabis, what are the signals that tell you that a company or a leader truly are great and are positioned to take their company to the next level in this fast-evolving landscape? 00:44:25.440 --> 00:44:37.119 Yeah, I think Already, if you look at the basic concepts like what is your right to win, I think just saying that you have a license and then looking at a new market opening up doesn't necessarily one plus one is not equals two. 00:44:37.519 --> 00:44:45.599 You got to figure out what is my right to win just because, and I again look at American companies all the time, all excited about international cannabis markets. 00:44:45.679 --> 00:44:51.519 And I'm like, well, it's great that you now are able to potentially play in the international cannabis market. 00:44:51.599 --> 00:44:53.440 But what makes you so successful? 00:44:53.599 --> 00:44:57.760 What are you doing really well at home that will give you that leg ahead? 00:44:57.840 --> 00:44:58.000 Right. 00:44:58.079 --> 00:45:00.800 And I think it's when companies sit back and look about it. 00:45:00.960 --> 00:45:06.880 And certainly that was the questions I asked when I was joining this organization was what makes village farms great at what they do? 00:45:07.039 --> 00:45:18.400 And I think the answer really was that nobody cultivates cannabis at a great quality at scale as Village Farms does, and then do that in a compliant fashion, like EUGMP. 00:45:18.559 --> 00:45:21.599 I think that is a winning recipe for this business, right? 00:45:21.679 --> 00:45:32.960 So, and again, they are other winning recipes that are working for other companies, but really it comes back to the core of what are you doing so well that you feel like you've really conquered your home base? 00:45:33.119 --> 00:45:38.800 And I think you've got to be able to do something well at home before you can start to look at other international markets. 00:45:38.880 --> 00:45:42.079 It's not at international markets aren't going to save your business, right? 00:45:42.320 --> 00:45:46.159 I think a lot of people in cannabis are trying to find what's going to save their business. 00:45:46.239 --> 00:45:53.679 And if you haven't managed to do something well at home, chances are you probably are going to be able to do something in the jurisdiction that you don't understand. 00:45:53.760 --> 00:46:01.119 So for me, really it comes down to that really basic level of business fundamentals around how is your business run? 00:46:01.199 --> 00:46:02.079 What is your PL? 00:46:02.239 --> 00:46:03.679 Are you profitable locally? 00:46:03.920 --> 00:46:10.719 Are you, despite all of the regulatory issues, you know, one thing the industry loves to complain about is tax itching and regulatory issues. 00:46:10.800 --> 00:46:16.400 And I'm not saying these are not issues, but how do you still manage to be successful despite all of those challenges? 00:46:16.639 --> 00:46:26.960 And if you can come out the other side and say, despite all these challenges, we're still able to figure out a way to be able to be compliant and I think then you've got something that is a recipe to success. 00:46:27.039 --> 00:46:36.159 And I think what we are seeing in North America is a number of companies are certainly, I believe, one of them, but there's other companies as well that I think are starting to come out that other side. 00:46:36.320 --> 00:46:45.199 And the fact that you've been in the California market or the Canadian market for the last five plus years, and the fact that you've, you know, held true, clearly you're doing something right. 00:46:45.280 --> 00:46:50.639 And if you are profitable and you're paying your bills and you're paying your taxes, most importantly in Canada, you are doing something right. 00:46:50.800 --> 00:46:55.599 And so I think you need to double down on that and then focus on the next phase of growth. 00:46:55.679 --> 00:46:58.400 So I looked at that when I evaluated companies. 00:46:58.880 --> 00:47:01.199 So just take it one step further. 00:47:01.360 --> 00:47:09.119 What you're saying reminds me a little bit of when I was in business school, they used to talk about focus on the thing that you do best and really go all in on it. 00:47:09.280 --> 00:47:28.559 And I used to think about that a lot when I started working in cannabis and vertical integration started really exploding as the strategic path to success in so many states around the US because it seemed like within the context of vertical integration, there was just no opportunity to be really excellent at anything. 00:47:28.719 --> 00:47:31.360 You were just being good enough at all the things. 00:47:31.599 --> 00:47:37.599 And I'm wondering, in light of what you just said, what your position on vertical integration is. 00:47:38.639 --> 00:47:44.480 Look, I think vertical integration is great for companies that are able to handle the plethora or the gambit of things, right? 00:47:44.559 --> 00:47:56.639 It's very similar to me looking at the early days of cannabis when you had these big companies that raised billions of dollars and they were going to be the best zig, gummy, edible, beverage, dried flour company. 00:47:56.719 --> 00:48:00.719 And it's you can't be great at everything, and you can't be also great at vertical integration. 00:48:00.800 --> 00:48:06.880 And very similarly, Annary, we had in Canada, we had companies that were buying everything along the value chain and want to be vertically integrated. 00:48:06.960 --> 00:48:09.599 I think there is room for certain players to do it. 00:48:09.679 --> 00:48:12.400 And I think very few have proven that they can do it well. 00:48:12.559 --> 00:48:14.960 So yeah, again, basic business fundamentals, right? 00:48:15.039 --> 00:48:21.599 I if you can be good at one thing and then look at targeting the next thing and doing that well, I think there is room for that. 00:48:21.840 --> 00:48:29.519 I think capital has clearly decided that it's going

to start to be getting allocated to companies and reward companies that are doing these things well. 00:48:29.599 --> 00:48:37.039 And I think that we're still a ways away from seeing a truly well-functioning, profitable, vertically integrated cannabis company. 00:48:37.119 --> 00:48:39.440 I think we'll get there, but we're not there yet. 00:48:39.840 --> 00:48:40.159 Okay. 00:48:40.400 --> 00:48:48.639 As we wrap up the show, I want to let you look a little bit further out into the future and detether from all the here and now that we've been discussing. 00:48:49.519 --> 00:48:56.000 You've mentioned in the past the opportunity for a place like India to become a major cannabis market. 00:48:56.239 --> 00:49:02.400 We get, as I stated before, we get pretty excited when we start talking about 90 million, 100 million people in population. 00:49:02.639 --> 00:49:04.800 India is like 1.5 billion. 00:49:04.960 --> 00:49:12.239 And now there's a lot of like interesting economic classes and everything to consider when it comes to a marketplace that large. 00:49:12.719 --> 00:49:19.679 But how do you think about the globalization of cannabis in that way and opportunities to unlock something like India? 00:49:20.880 --> 00:49:25.119 Yeah, look, these markets in India in particular, I was born and raised in India. 00:49:25.199 --> 00:49:29.039 I'm from there, I have family there, are definitely markets that are prime well. 00:49:29.199 --> 00:49:32.639 I think they also have a huge history of cannabis in those countries. 00:49:32.719 --> 00:49:35.840 And so it's nice to see them embrace this. 00:49:36.000 --> 00:49:40.159 And I think we will start to see more and more countries come online. 00:49:40.400 --> 00:49:43.920 I think everyone's path is going to be a little bit different than the other. 00:49:44.079 --> 00:49:50.320 And again, it's a process not at event, but I think everyone will evolve in their own unique way. 00:49:50.400 --> 00:49:53.679 But I'm keeping a very close eye on sort of the bigger markets, right? 00:49:53.760 --> 00:49:59.199 And I think Brazil is really a classic example of a sizable population, a country that's really starting to evolve. 00:49:59.280 --> 00:50:04.719 And I think CBD certainly seems to be the way that some of these markets are coming around, right? 00:50:04.800 --> 00:50:11.679 There's been a lot of stigma historically promoted by the West around the harms of cannabis, the war on drugs, etc., right? 00:50:11.760 --> 00:50:19.760 Despite them being an ingrained in culture, as in the case in India, I think that has had a lasting impression, and probably a bigger impression than we would expect. 00:50:19.920 --> 00:50:25.440 So I think you are starting to see countries look at CBD in particular as the starting point, right? 00:50:25.519 --> 00:50:29.039 To be able to get their head around being able to regulate cannabis. 00:50:29.360 --> 00:50:32.880 Is there evidence in a market where CBD has evolved? 00:50:33.119

--> 00:50:44.880 There's been a direct correlation from CBD being the starting point and then that evolving into acceptance of the intoxicating side of the plant because we can't draw that direct nexus in our journey here in the US. 00:50:45.199 --> 00:50:45.519 In the U. 00:50:45.760 --> 00:50:47.360 Yeah, or in Canada, for the example. 00:50:47.519 --> 00:50:58.880 And I think the challenge has been because of just the overuse and a lot of the a lot of the products that are being sold as CDD products that perhaps didn't have CBD, didn't have as much C BD. 00:50:59.039 --> 00:51:03.920 And I think that you look at a market like Australia, and I'll give you an example, Ben, to your question, is the answer is yes. 00:51:04.000 --> 00:51:09.280 And so you look at a market like Australia, they have basically allowed CBD to be sold as an over-the-counter product. 00:51:09.360 --> 00:51:13.920 And what that means is you can go to a Walgreens or a CDS and be able to pick up CBD. 00:51:14.079 --> 00:51:19.840 The only condition they placed on that was before you can put that product as an OTC product, you need to do the research. 00:51:19.920 --> 00:51:26.000 So if you've got an accounting CDD or CBN cures insomnia, go into the clinical phase one, two, and three studies. 00:51:26.159 --> 00:51:40.800 Not necessarily the same level as being a pharmaceutical product that has efficacy and animal studies and all of that, but you still need to do one, two, and three studies to show me the regulator that CDD is beyond just anecdotal evidence, going to be beneficial for sleep. 00:51:40.880 --> 00:51:45.440 And if you can draw that conclusion, we will let you put this on an over-the-counter shelf. 00:51:45.519 --> 00:51:49.920 And I think that's a great way to force the industry or companies to be able to look at that. 00:51:50.159 --> 00:52:00.400 So there is one company in Australia right now, and there's one more coming up soon that have passed phase two or three studies on CBD and are looking at launching this as an over-the-counter product. 00:52:00.559 --> 00:52:03.199 So really it's coming back and doing that hard work. 00:52:03.280 --> 00:52:15.920 I think we've, for better or worse, managed to get around just placing products on the market and being able to make marketing claims and perhaps abusing and overusing those claims around what can cure indications. 00:52:16.000 --> 00:52:20.320 But now international regulations are forcing the industry to double down on that. 00:52:20.400 --> 00:52:23.199 So the answer is yes in international markets. 00:52:23.440 --> 00:52:25.280 I think you will see more and more of that happening. 00:52:25.360 --> 00:52:43.119 And I think that's how you also get around the stigma is if you have someone that is an elderly patient that has sleep issues and they can say, yeah, taking X, Y, Z product that's gone to a clinical trial and can show me that beyond there, beyond just reasonable doubt is able to actually help me with

my sleep and it's not intoxicating. 00:52:43.360 --> 00:52:45.280 Is that a way to be able to regulate cannabis? 00:52:45.440 --> 00:52:47.920 I think that's how international markets come around to this. 00:52:48.400 --> 00:53:02.239 India, China, Saudi Arabia in particular, because of the stigma that has been inculcated, as I mentioned before, I think this really allows a sort of a quick way to be able to get around to regulating cannabis as a substance. 00:53:03.360 --> 00:53:04.239 Really interesting. 00:53:04.320 --> 00:53:04.559 Yeah. 00:53:04.880 --> 00:53:05.119 Yeah. 00:53:05.360 --> 00:53:19.840 It's wild to hear your call out that the reefer madness and kind of drug war narrative that started in the US has actually spread to these other countries and affected the drug policy that's unwinding there. 00:53:20.239 --> 00:53:20.559 Oh, yeah. 00:53:20.639 --> 00:53:21.679 I've lived and breed this. 00:53:21.840 --> 00:53:27.039 I can tell you in India firsthand, it's had a lasting impact, particularly on the older generation, right? 00:53:27.199 --> 00:53:32.719 Look at my parents' generation, and it's had a significant impact on them with respect to just lying leaf all over the West. 00:53:32.960 --> 00:53:34.079 The West says this is a problem. 00:53:34.400 --> 00:53:35.599 Clearly, it's a problem, right? 00:53:35.679 --> 00:53:36.719 And no one's really questioned it. 00:53:36.800 --> 00:53:39.519 I think you've got the younger generation now saying, hold on a second. 00:53:39.679 --> 00:53:41.119 I think there may be issues with that. 00:53:41.280 --> 00:53:46.239 But it's had a bigger impact, Anna Ray, than most people actually realize. 00:53:46.320 --> 00:53:56.239 And it's had a significant impact even on politicians of that same generation that are trying to get their heads around the war on drugs or America's legalizing cannabis. 00:53:56.800 --> 00:53:58.239 They've come full circle on this. 00:53:58.320 --> 00:53:59.199 So it has. 00:54:01.039 --> 00:54:01.519 All right. 00:54:01.679 --> 00:54:03.199 It's time for our last call. 00:54:03.360 --> 00:54:07.519 So, D C Deepak, what is your final message for our listeners? 00:54:07.679 --> 00:54:10.800 Advice, call to action, or closing thought. 00:54:11.599 --> 00:54:12.320 Two things. 00:54:12.480 --> 00:54:18.000 One, I think that I'm very excited about international cannabis, and I think that it will grow as you can tell. 00:54:18.159 --> 00:54:19.360 I'm very passionate about it. 00:54:19.440 --> 00:54:21.119 So very much looking forward to that. 00:54:21.280 --> 00:54:23.679 And the second thing, Ben said to look forward. 00:54:23.760 --> 00:54:28.320 I'm very much looking forward to the highest spirits mixer in Las Vegas at the Army at. 00:54:28.480 --> 00:54:31.280 So definitely looking forward to that one coming up. 00:54:32.880 --> 00:54:33.519 Amazing. 00:54:33.760 --> 00:54:34.239 All right. 00:54:34.559 --> 00:54:38.079 International is growing, and get your booties to the morning mixer. 00:54:38.159 --> 00:54:38.880 I like I like that. 00:54:39.119 --> 00:54:41.599 Deep Akadon Village Farms International. 00:54:41.760 --> 00:54:43.679 Thank you for spending the last hour with us. 00:54:43.840 --> 00:54:45.280 This is super informative. 00:54:45.360 --> 00:54:48.239 And I've got more questions for you, so we'll connect offline. 00:54:48.639 --> 00:54:50.000 Thanks for having me. 00:54:50.639 --> 00:54:51.599 Amazing. 00:54:51.920 --> 00:54:53.280 All right, everybody. 00:54:53.519 --> 00:54:54.400 You heard it. 00:54:54.559 --> 00:54:55.840 The morning mixer. 00:54:56.159 --> 00:54:57.679 Invitations are starting to go out. 00:54:57.760 --> 00:55:00.880 So look for them in your inbox and request your invite. 00:55:01.039 --> 00:55:02.559 That doesn't make any sense, but whatever. 00:55:02.719 --> 00:55:06.000 If you've enjoyed this episode, do us a favor and follow us on YouTube. 00:55:06.159 --> 00:55:08.400 Just search High Spirits Podcast. 00:55:08.639 --> 00:55:10.400 We're just over 300 subscribers right now. 00:55:10.639 --> 00:55:11.280 Just getting going. 00:55:11.360 --> 00:55:13.280 We're trying to hit 500 by the end of the year. 00:55:13.679 --> 00:55:14.719 Help us achieve our goal. 00:55:15.039 --> 00:55:15.360 Please. 00:55:15.519 --> 00:55:19.360 We'd love to celebrate it at the Morning Mixer in Vegas in December, I think. 00:55:19.519 --> 00:55:20.239 Early December. 00:55:20.719 --> 00:55:21.679 Thank you for listening. 00:55:21.920 --> 00:55:25.280 As always, folks, stay curious, stay informed. 00:55:25.440 --> 00:55:27.840 And most importantly, keep your spirits high. 00:55:28.079 --> 00:55:28.800 Until next time.