The Curious Cannabis Industry (Transcript) (NYSEARCA:PSDN)

Editors’ Note: This is the transcript version of the podcast we posted yesterday. Please note that due to time and audio constraints, transcription may not be perfect. We encourage you to listen to the podcast embedded below if you need any clarification.

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Emily Paxhia: For the longest time my focus has been on state by state, opening regulations and seeing how that expands markets. And I think there’s really exciting things happening, but, you know, I got a little bit of my hopes up on this SAFE thing happening within 2022 or within this lame-duck session. But now my focus is back on the really meaningful change, which could come from rescheduling cannabis and that’s actually more important than SAFE. So, I think this is just a resetting of expectations and getting our patients back in check because we really shouldn’t lose sight of the bigger thing that’s happening, which is this rescheduling discussion.

Rena Sherbill: Welcome again to the Cannabis Investing Podcast where we speak with C-level executives, analysts, and sector experts to provide actionable investment insight and the context with which to understand the burgeoning cannabis industry. I’m your host, Rena Sherbill.

Hi, again, everybody. Welcome back to the show. It’s especially great to have you listening today. We’re celebrating episode 200. Super, super happy about that. Totally acknowledged that we wouldn’t be here if not for all of you beautiful listeners. I appreciate you. Thank you for listening. Keep sending me your messages about who you want to have on, what you want to talk about since launching the Psychedelic Sunday episode, and I just want to iterate here or reiterate here that the Psychedelic angle on the show will not, kind of be mixed in with the cannabis stuff.

Sundays are our Psychedelic Sundays, that’s where we’re talking about Psychedelic stocks, Psychedelic investing, Psychedelics in general. And then our weekly episodes typically which come out on Wednesday, we’ll still focus on cannabis. I thank you for listening. Thanks for being part of this journey as we navigate together the Cannabis Investing Space and who better to celebrate episode 200 then Emily Paxhia, who’s been on a few times. She’s talked about the industry at large. California cannabis with Hirsh Jain, a couple of times in the spring and this past summer.

Emily is a super insightful observer and participant in the cannabis industry. I’m not alone in having that at opinion. I know many of you listening would agree and also many people I talk to that are at the top of the cannabis food chain, let’s say, would agree as well. So, super happy and grateful to have Emily come on today.

Today, we get into yes, SAFE Banking, and the frustrations there, and what we should be focused on maybe instead of being so frustrated about that process and the journey towards getting cannabis stocks more in cannabis companies, more where they should be not having to pay onerous taxes, not having to be treated like a drug like opioids or heroin, and just all the work that still needs to be done, but how we can better focus our energies and what kind of conversations we should be continuing to have Emily talks about that.

New York Cannabis, rumors around her leaving the board at Ascend and how she feels about the company. How they are looking at the cannabis industry via the Poseidon ETF, which trades under NYSEARCA:PSDN, which we’ve talked about on the show before with Jesse Redmond, with a couple of other analysts. We had her brother Morgan and Noah Hamman from AdvisorShares on CEO Interviews being interviewed by Jesse Redmond about a year ago, I think, talking about the ETF.

So, if you want more diving into the ETF look at those interviews. Also, I wanted to make a note about their holdings because Emily says, you know, a lot of what you need to know about where they’re focused on is reflected in their holdings. So, mostly the typical MSOs to maybe very few people’s surprise, Green Thumb (OTCQX:GTBIF) is right up there. Curaleaf (OTCPK:CURLF), Trulieve (OTCQX:TCNNF). And then there’s also Sundial (SNDL), which is a Canadian stock. There’s Ascend Wellness (OTCQX:AAWH), which is more of a mid-tier. Verano (OTCQX:VRNOF) may be to nobody’s surprise.

They also have Cresco Labs (OTCQX:CRLBF). They also have Columbia Care (OTCQX:CCHWF), TerrAscend. And then also in there is InterCure (INCR), which is an Israeli company that we’ve focused on in the podcast before. So, interesting to see InterCure in there as one of the lone global plays. So check out PSDN. It’s an actively managed ETF. So, interesting to see where they’re putting their money these days. Hope you enjoy this conversation as much as I enjoyed having it.

Here’s to the next 200. And again, thanks everybody for listening please keep sharing your ratings, your comments, your feedback, your thoughts, your questions. It makes this podcast better. In the meantime, as Emily says, let’s all hopefully keep the faith together and keep pushing for change and improvements.

So, Emily, welcome back to the Cannabis Investing Podcast. I’m going to say that I’m happy to have you on even though these are not such happy times, but I’m still happy to have you on the show. So, thanks for coming on.

Emily Paxhia: Thank you so much for having me as always. I think your content is top shelf, and I’m grateful for the level of discourse it’s being had here. So, thank you for having me.

RS: Well, I really appreciate that. And back at you, I listened to your podcast too and see what you put out there. So, I appreciate your voice and did I say your sense of humor when coming at things sometimes. So, I – right back at you, and I appreciate that. So, I mean, I’m happy there’s that word again to, like, get right into it and kind of, you know, people that have been listening to the podcast have heard you before talk about the industry at large, specifically California, the last couple times you’ve been on, talk to us about in this ugly, SAFE Banking brouhaha that we find ourselves in and lack of progress and intermittent fits and starts of progress. How would you describe the landscape and how you’re thinking about it these days?

EP: Yeah. I would say that right now, I’m back to a resetting of my expectations around change at the federal level. When we started 2022, I had very low expectations. We would see any change in banking reform just given the way that things were shaping up. And I thought the, kind of the machinations of the federal level with what was going on around Cory Booker and Chuck Schumer.

And then just some of the sentiment across the aisle. And I think we all need to be reminded that anything that is not in favor of Cannabis Banking Reform is a direct opposition to what the majority of U.S. citizens, both GOP and Democrat feel around this issue where in general, this is one of the moral aligning issues. And so, it’s truly the lawmakers not doing their job representing this constituents on this issue. But as the year waned on, you know, we started to hear some rumors that things were going to actually get done because Corey Booker and Chuck Schumer had realized that, you know, getting banking done isn’t the silver bullet for the big companies in cannabis and big company, by the way, is a definite.

We need to keep that in perspective. Yeah. Exactly. These are still relatively small businesses. Considering the revenue profile, the EBITDA profile in the path to free cash flow. But, you know, it started to seem like there was some rational thought around this and that we might get it done, but it seems as though here we are in December 12, which is actually my father’s birthday and my dad passed away from – yeah.

My dad passing away from cancer is one of the reasons we got into this industry, and I was thinking about it yesterday that it would have been nice to, kind of have a ‘W’ on the board going into his birthday on SAFE Banking, but here we are.

So, I have – I did get my hopes up a little bit that we might see reform. I thought the actions that Biden took around the steps with expungement and a conversation around re-scheduling or de-scheduling was a note of progress. I thought it was kind of a go ahead for the lawmakers to make a very fundamental and, frankly, a minimal step towards progress here with this banking reform. But I’ve gone back to my sub 10% perspective on where we could go with this. And so, you know, investing is all about psychology.

And one of the things I have to remind myself is that we’re building great businesses. We’re investing in businesses both private and public and everything from plant touching to ancillary companies, and we’re building business. These are companies that are expanding, that are hiring people, and we just have to keep going. And for the longest time, my focus has been on state by state, you know, opening regulations and seeing how that expands markets.

And I think there’s really exciting things happening, but, you know, I got a little bit of my hopes up on this on the SAFE thing happening within 2022 or within this lame-duck session. But now my focus is back on the really meaningful change, which could come from rescheduling cannabis, and that’s actually more important than SAFE. So, I think this is just a resetting of expectations and getting our patients back in check because we really shouldn’t lose sight of the bigger thing that’s happening, which is this rescheduling discussion.

RS: What are your thoughts, kind of to the people out there wondering why we are in this repeated cycle of SAFE Banking hopes and dashed hopes. What’s your take on, kind of why there’s this big promise and then there’s this, you know, varying degrees of let down?

EP: I think it is a symptom of the larger dysfunction that I see at the federal level. I think that if you look at the election, I mean, it’s fairly divided in terms of red and blue, and I think that’s a sign that people are not – nobody’s getting an A plus on this on anything. I think we’re a very divided country, which is very sad to see. I think that there are some fundamental things that we could all be more unified on, but we’re not.

And so, I just think that cannabis is just a symptom and such a fundamental piece of legislation that can’t get passed, which is literally to have access to banking, like other industries. And it’s counter to the people who are opposed to cannabis to not want to get this in the banking system. Because getting it into our banking system, which is a time tested channel of transparency, and has structural components to it, which help in terms of paying taxes and tracking business expense.

I mean, there’s a lot of reasons to, if you’re not very much into cannabis as an industry to want to get it into the banking system because not having it there just creates more opportunities for those who are not upstanding operators to, kind of work around the system and not pay taxes. So, it’s a very interesting, I think it’s actually almost a paradoxical approach to it from every side.

So, I’m not sure why we can’t get this done. The only thing I can think of is that the democrats were trying to ask for too much, and we know we can only get things done in baby steps at this in the government these days because of how divided we are. And then I think that there’s a separation of what the people want, you know, the Vox Populi and what the people representing us in government are doing.

And I think a lot of it has to do with outdated thought constructs. And if you look at the average age of our lawmakers versus the average age of our population that is voting, it’s disparate. So, I don’t think we’re being well represented at government level.

RS: So, do you feel like it’s mostly just like stigma, like outdated stigma against cannabis or do you feel like it’s groups that are specifically lobbying against one might say the pharma industry for instance? Like, is it the pharma industry lobbying heavily against cannabis or is it politicians stuck in their ways, and just like, no, not going to do this?

EP: I think it’s probably both, and I think it’s also like, it became I think I heard, I read, I understand Mitch McConnell’s point of view. I don’t understand it, but I saw it, and I can comprehend what he’s saying. And I feel like he’s actually using this to, kind of like stick it to the democrats. I think he’s out of touch with what it really represents. And I think he’s – I mean, he’s acting like the majority leader right now. And Chuck Schumer should be getting control of the house over there.

Like, take control of your house buddy, but I don’t know. It seems like the tail is wagging the dog. And I was just saying too, it’s like, again, this is just a bigger symptom of the dysfunction at our federal level, and I feel like I’m totally unrepresented as a citizen in the United States at this point. I’ve done everything. I’ve called, I’ve emailed, I’ve tweeted at the lawmakers who represent me as a constituent, and I feel like I’m – it’s just like shouting into a cavern at this point, but we’ll see, we’ll see. But like I said, I’m focused on business.

I’m focused on the teams, and I’m focused on what comes next with this rescheduling? And I think we should not ignore that the head of health and human services has repeatedly spoken out that he’s pushing this effort forward to reschedule cannabis. And we’ve heard signals too from the president noting that it shouldn’t be on the same level as Fentanyl. Fentanyl is Level II.

So, by just that statement alone. If anything makes any sense, then it should be Schedule III or a different schedule. But this would change everything. I mean, this has the real meaningful changes because it changes our tax situation, as well as the fact that it is no longer Schedule I and therefore banking reform can happen.

RS: You know, something that you said on one of your podcast was in terms of Uplisting, like getting to the level of Uplisting, how many steps and how much time that’s going to take to get there? Do you feel it all like the, kind of hurdles before either re-scheduling or de-scheduling and/or, you know, kind of opening it up for Uplisting? Is that almost benefiting the companies to, kind of, like, prepare for that or you’re like, no, we just wanted to just, you know, give it to us even if we’re not quite, even if most companies aren’t yet have it all figured out in terms of GAAP financials etcetera, etcetera?

EP: I think the most important companies have it figured out and have done the work to be there. If you look at the top cohort of the MSOs and even the Tier 2, as many of them are positioned and have been thinking about this. I can say just having served on the board of an MSO, it’s a constant conversation about what the Nasdaq or the NYSE are going to be looking for such that in an environment where the industry has access to the list of exchanges, we can make those moves very quickly.

So, I do think there are some key constituents that could be ready to go the minute that changes. And I am on the capital, what is that, the capital markets council for attach. And, you know, it’s funny, I was just saying this to one of our founders. If SAFE shouldn’t pass and we don’t see any change on that angle, I still am extraordinarily committed, and we work with excellent lawyers on the capital markets council who have put together an open letter to exchanges stating why this is something that they can contemplate hosting on the exchanges.

And I will spend the first quarter of 2023 taking meetings of everybody I can up and down the street and over at the exchanges to see if I can get some change here and see if we can work with them to understand how they can get comfortable on this issue. And by the way, that includes the TSX. Anything that could increase access to these names, which deserve access, you know, I just wrote a white paper, Morgan, and I collaborated on this about the fact that the one morning we woke up and on Morningstar PSDN was listed as a value, a small cap value stock.

And the fact that cannabis, given the growth rates we’re looking to ramp into in 2023, is sitting in a value or a style box like that in value small cap. I feel like in an environment, you know, we’re waiting for the CPI data to come out, but I do think 2023 is going to show some macro headwinds. And value investing in these times is a really interesting opportunity. And so, if cannabis can get access on those listed exchanges where you can trade them from platforms. Maybe we could open up the custody as a work back from that, then I think this whole market changes for us.

RS: So, what do you – do you have a sense of, kind of like the things that are precluding Uplisting from happening, because I’ve heard, like, different, you know, different opinions on that?

EP: Well, I think there’s a perception that without SAFE Banking that they just can’t do it or that the federal government will slap back, but I think there’s some precedent that we can look at, including the fact that the Canadian names are listed on these exchanges. And I think, yeah, you can say, okay, they have – Canada has a federally legal program, but I do think that there’s a very compelling case around this, as well as the fact that we do have some technology platforms that are listed there.

And there is this thing called, like, this bright line, which is where the revenue is derived. But if you look at Weedmaps (MAPS), if you look at Leafly (LFLY), there are, you know, they are deriving revenue from cannabis plant touching companies, the retailers. And so, I think that line is becoming less bright and it’s something we can work more clearly with. I think part of the reason we haven’t seen changes because there hasn’t been motivation by the exchanges to offer this as a platform for the cannabis operators and the exchanges.

It’s funny we talk about this in the capital markets group all the time. And we talk about what motivates people, what motivates change in it. And in an environment where we’re seeing a lot of these facts are going to be de-listing or basically going away or blowing up, we’re going to see companies probably dropping off of the exchanges because they won’t meet the requirements based on fundamentals. I’m talking about technology companies. I’m talking about food tech companies.

When you look at some of these companies, they really have no business being there anymore. They should be either taken private and consolidated or they should be going into the OTC markets because they just don’t meet the qualifications of the exchanges. And so, all of those are spaces where the revenue will decline for the exchanges. Not to mention that if we’re going into a more difficult fiscal time, the other sources of revenue are like bell ringing ceremonies, you know, the advertising at the exchanges.

If companies are tightening their belts, those sources of revenue go away. So, I actually think it’s a really interesting time and opportunity to talk about companies that do have strong fundamentals. And when you look where their market caps are versus what the trajectory of these businesses are and the fundamentals, it’s a bit divorced. And so, I think this represents real and lasting companies for the exchanges to contemplate to have on their platforms.

RS: Yeah. Absolutely. Do you know why, like, you know, in terms of Psychedelic companies that they’re listed on the major exchanges yet, what they’re dealing with is in the same schedule as cannabis? What’s that about? Do you know?

EP: No. I mean, I really don’t. Everything just feels like it doesn’t quite make sense. It’s curiouser and curiouser as they say in Alice in Wonderland. I don’t understand it. I don’t understand why some, yeah, I have a lot of thoughts on what gets a hall pass versus what doesn’t, but here we are.

RS: Here we are. When you keep changing the rules of the game, hard to know what the rules of the game are.

EP: That’s right.

RS: Yeah. Yeah. Okay. So, kind of switching gears a little bit, and you kind of mentioned the ETF. I’m happy to dive into that. In terms of, you know, looking at the industry as an individual or the part that you play, how do you also look at it in terms of managing the ETF? Like, what are you guys focused on? What are you thinking about? What are you worried about?

EP: What am I worried about? What am I now worried about? I mean, I feel like it’s like Andy Grove says, ‘Only the Paranoid Survive.’ And so, I think that we are always prepared for, you know, you hope for the best, prepare for the worst, and that’s what investing really is all about. So, I feel like we – interestingly, Poseidon has side stepped a lot of the frothier names in the industry over the years. The ones that, you know, RTO-ed in Canada at above a billion dollars, but didn’t really have the business chops there. We’ve always been focused on balance sheets.

We’ve always been focused on preserving or growing shareholder value. We’ve always been focused on asset – quality of assets, quality of teams. And so, I feel like that’s very transparent in the ETF because everyone can see our, you know, what’s in there and how it’s weighted. And so that, I mean, I will say this, the weightings bounce around quite a bit because of the Whipsaw action we see in the markets. And for example, some names are down today, like, as we speak, like almost 10%, which I think is insane considering that I think these companies have taken some material steps to improve their balance sheet and to be ready for the go forward. And then other names, kind of will hold steady.

So, the weightings can bounce around, but you can kind of get a sense based on the selection of what’s in the ETF of really what we think are interesting opportunities in this industry. Yeah. So, we’re focused on the long view. I feel like it’s funny that we landed in this small cap value style box because we are, I would say these longer-term investors, we, you know, look to the Buffett’s, we look to the Peter Lynch’s, you know, we love the way that those investors think about things. And I feel a little bit vindicated in this too.

Like, not to yuck anyone’s yum on crypto, but, like, I listened to the annual meeting. My brother and I listened to the annual meeting every year with Buffett and Munger, and, you know, those guys were cranky about what was going on in crypto. And I felt like I was being heard because I was like, we are so overly regulated in cannabis and that was just, like, running wild and hot as a juxtaposition of two emerging markets for the last couple of years, especially starting in 2020 when I feel like the gambling, you know, the gambling machine of investing turned on when people were receiving checks at home and it was just like, hit the bit, hit the bit, you know, just this crazy mentality around investing.

And now I feel like we’re seeing the pendulum swing back to hey, we got to really dig in on these companies. We got to really dig in on the investment landscape or the markets that these companies are in. And again, I think cannabis is really well-positioned to be more of a darling in a time when capital isn’t the commodity it has been. And people are being a little bit more prudent about where to point their allocations of capital. So, yeah. So, I mean, we are looking at the companies that we think last and have the longevity to get through, and that’s how we invest because we have a longer view of the arc of this industry.

RS: So, what would you say to retail investors who are kind of feeling the brunt of, you know, some of the things that you described and all of the things that I think everybody listening to can imagine or has experienced?

EP: Yeah.

RS: What is your advice to them, kind of how to navigate this timeline of investing? Like, is it worth to get in? Is it worth getting into, I mean, I know you have an ETF, so might be a biased answer slightly, but is it worth getting into ETFs right now? Are there things to look at? Should they mirror the Poseidon, you know, portfolio, like, how would you advise them?

EP: Yeah. Well, I’d rather they’d pick the ETF rather than your portfolio, but and that’s for obvious reasons. I mean, we are New York Stock Exchange traded. So, there’s something that’s nice about that, but, you know, look, I really feel for – it’s funny. The term retail investor, I think that some people take a pejorative tone to it, but I actually think there’s – this is a credible – because this is the story of how people can generate wealth in their life is through investing in the capital markets.

And I think that individual investors have that opportunity, whereas unfortunately, I think it was well intentioned, but the private investing is really limited to accredited or qualified purchaser investors. And I don’t – I feel like that has been – it just doesn’t land perfectly because I think we should democratize access to growing one’s wealth. But I do – and I do think that there’s

RS: Amen, amen.

EP: Yeah. And so, I do like the capital markets for that. I also think the capital markets when they’re functioning well, create transparency and accountability that we’ve seen missing in the private markets, especially when you look at what’s gone on in Silicon Valley for the last ten years where it’s just been up round, up round, up round, up round.

And it’s been growth at all costs and not really a focus on fundamentals that we’ve had to focus on in cannabis because we don’t have the same access to capital. But I think the quarterly earnings calls, all of the things that happen around being a publicly listed company, and having a standard of GAAP financials, it’s important because it is about transparency and accountability.

And I think that if people dig in and do the work, it is actually a great opportunity to democratize access to investing. Now, all of that being said, I spent – I was just telling you before the show, I’m going to be spending less time on Twitter because I do feel like there’s a lot of negative rhetoric on there and it’s unproductive, but I have tried to be on Twitter, tried to be a champion, and tried to share my perspective as a person who’s very long in the industry. You know, Poseidon was founded in 2013.

We started investing with outside capital in 2014. We are all in on this sector. We believe in this sector. It is important to us on every level. We think it is the right thing to do to legalize cannabis, and we also think it is a great opportunity for an American industry to really flourish and then globally, but it really has a space to be tremendous here, but I have the opportunity to work with private companies. I have the opportunity to work directly with founders and to be involved in these businesses.

So, my perspective is a little different from people who are investing and buying the stocks and kind of sitting a little bit further away from what’s going on, on the internal aspects of these businesses. I find that working with the founders and being inside of these companies really does give me a lot of optimism about where we’re going because I do get to see how these businesses are built and I get to see what it means to really grow an entire industry and to frankly be responsible for change globally on what is happening around cannabis.

So, you know, I think it’s difficult if you’re someone who’s not as much in the weeds on that, pun intended. So, I do really feel for the retail investors who are, kind of going through these wild gyrations in the market and having to navigate what that must feel like and what it must look like and the account balances are seeing. But, you know, it’s like timing the market, not something that’s easy to do.

Almost no one gets it right and the best investors in the world say that they never have gotten it right. You know, they’re very humble about that timing piece. And so, timing it, I think, is very difficult. And I think this is one of those industries that you have to have a pretty long time horizon on couple years out still. And I think that the best way to achieve success in this and this is purely an opinion because of how I view things is to select the companies that you think are built to last and that will benefit the most from when reform does happen, and you can see the entrance of new capital into the markets. But I think it’s not – this isn’t to me a trade. I mean, yeah, you can trade in and out of these names. That’s fine. That’s just not how I view building this industry or building businesses in this industry.

RS: So, speaking of building the industry and you having a close relationship with so many players and also, you know, your intentions in terms of why you want to be in this industry and what made you want to be in this industry. And I will say that my time spent in the industry, the people that I’ve gravitated towards listening to and talking with have felt like their, you know, their intentions really are pure.

And I think something that you talked about, the negative rhetoric on Twitter. And I would also add to that kind of some of the nefarious behavior in terms of leadership, in terms of, you know, things that we would do well to be weeding out of the industry. And also to your point about, kind of the necessary steps that a company needs to take to get to the Uplisting and to get to the next level, and Board composition and getting the financials in order and all of those things.

You know, I don’t know how much you want to speak about this or say about this and I didn’t ask you beforehand, but I’m curious, kind of your thoughts about, you know, leaving the Board at Ascend and how you approach, kind of your relationships with companies and what Boards for instance you choose to be a part of, let’s say?

EP: Yeah. I’m actually really glad you asked this because I saw this is part of the frustration I’ve had with the Twittersphere around this, as I saw a lot of – I’ve seen a lot of assumptions made for the last six months around my time on that board. And I can only say that having served on that board was one of the best experiences of my entire life outside of having co-Founded and run Poseidon alongside my team.

And I, you know, I was on that board since day one in 2018, and I got to see a company go from one real estate asset to a hundreds of millions of dollars of revenue in EBITDA company that grew across states, and, you know, across the verticals and launched products and I cannot even describe to people what that was like to witness and to be a part of. And I can only say that my time on that board was incredibly productive.

I felt like I was always very well heard on that board and that it was the meetings were incredibly productive and a great collaborative experience, and there was a lot of dedication to being ready to – for what comes next in cannabis as we were talking about on the exchange piece. You know, we went through a difficult time at the end of the summer, but we worked through it.

And sometimes when you’ve been with company on a board for as long as I had with that company and through such a rapid growth trajectory, there just comes a point when it’s time to move on so that fresh legs can come on and give some new energy to the experience. And Josh, who’s replacing me on that board, is also a big investor in the company, has the – and I believe he will sit well in my role, which as a public board member, your job is to represent the shareholders to the best of your ability.

And I think Josh is incredibly smart and has a great perspective on this and is very invested right alongside the rest of us shareholders there. So, I feel like it was a good handoff and I’m excited, because I could tell he was really excited to dig-in and roll-up his sleeves. And I’m excited for what comes next.

So, I’m glad you asked, because, you know, it’s funny, I feel like there were some assumptions made and I think maybe good intentions, but to me it read as somewhat misogynistic, which was disappointing, but I get it. People don’t know and …

RS: Misogynistic against you for leaving?

EP: Yeah. So, I mean, I don’t want to get too specific, but there were some comments made toward me. And it didn’t feel like it was productive or serving anything. And so, I think the other thing is, people are frustrated when I don’t make comments about this, about any of it. But again, it’s when you serve in a public board, and I know there are other companies that have experienced board changeover this year.

I mean, it’s very difficult what you can say and what you cannot say. And for the most part, you cannot say anything. And that’s your job just as well as to say things when the time is right. But I think that company – I mean, obviously, we’re big investors, but I’m just really excited for them. I think they have great assets and I think they’re thinking about it the right way. And I think that I mean, for me, that’s an absolute company to watch. It’s a smaller company than some of the top companies, but I think they’re a group to watch.

RS: And is there any kind of hint you want to make about, like, your Board affiliation or things that you’re looking at or topics that you’re interested in or things like that?

EP: No. I just – I will say this. Like, I love serving on Boards. Some people joke like, oh, Emily, how many Boards are you on? And I think people might think that I have a difficult time spreading my time and attention, but I don’t think people realize the value of serving on a Board in terms of your investment allocation and the way you think about investing in general. You learn more about companies in the hard work that goes into being on a Board.

It’s a nice tile to hang on your, you know, LinkedIn profile or whatever it is you want to promote, but I think more importantly, the knowledge that can be gained from having worked inside of the operations of a business. And having public board experience too is really remarkable because there’s a lot of aspects to that that are outside the business that just pertain to being a publicly listed company. And so, I think that I love serving on boards.

I’m on private company boards still, and it just gives me incredible insight into how these businesses run. And again, like then when we’re investing further as we do into private companies, it gives me a lot of information, not anything, like, specific like, inside information, but it gives you information about how these companies function and what are the big, kind of headline pain points or what are the areas to watch out for?

And, you know, in investing, you’re hoping to, you know, capitalize on growth, but you’re also looking to mitigate risk. And I think that having that deep window into the way these companies function is truly helpful on both sides of that investment coin.

RS: Can I ask you two more shortish questions?

EP: Yes.

RS: Do we have time for that?

EP: Yes.

RS: A, I heard your episode about, kind of your take on the New York regulations. And you mentioned that you still hadn’t fully marinated through, kind of your feelings on them. I’m interested on, it doesn’t have to be, like the longest take, but kind of your quick take on New York and how you see that playing out for the public companies. And also, kind of how the social equity component plays in? Like, do you feel like that that’s a net positive or kind of TBD?

EP: Well, we’re in the 60-day public comment period still, so some of this I’ll caveat that it could change. I think it’s going to be very difficult for the public companies to do well within New York State for the short-term. But that being said, it’s a part of a larger portfolio for them. So, hopefully, they didn’t over resource New York, and they’ll be in good shape. And we’ll find out pretty soon in the next queues on that. But I am happy that there was good intentions around what to do for equity applicants in the state of New York.

I do think the execution of it appears to be fraught with challenge, and, frankly, fraught with opportunity for corruption, which New York State is, you know, known for. I grew up in Buffalo, New York went to school in Saratoga Springs, lived in New York City. It’s three of the five boroughs. You know, it’s a state I’m very familiar with, and I had high hopes for this.

I’m glad they introduced the delivery by bicycle piece, I guess, to make sure the product that was grown across New York State will get into the hands of the consumers, but I have concerns about how this rolls out and it’s just, I mean, we can look at the parable of how LA has looked and what a difficult market has been for legal operators to compete. And I worry for the equity applicants that do get doors open.

I’m worried about how New York State is doing the site selection and all of all of those various detailed aspects of it on just the potential of the business success alone, but I’m also worried about those operators having to compete against the very sophisticated and thriving illicit market. So, I’m worried for New York, and the way I view it is that I’ll be looking again at New York in about two to three years once this kind of starts to shake out.

RS: Was it surprising to you, kind of the depth of, I guess, the fraughtness?

EP: Yes and no. I’m surprised that we have failed. Look, when Colorado launched their adult use market, they didn’t have a playbook, and they had to do the very best they could. And I think they did actually quite a good job of rolling out a market. Now, we’ve learned what some of the mistakes were in that, and we’ve seen what worked well. And they’ve calibrated and iterated along the way.

And we can now look at, you know, like, 15, 18, 19 other states who have rolled out, you know, legal programs, and I don’t think it’s rocket science anymore. I think we can look at – you can take what worked and leave what didn’t work and make a very rational regulated program. And I think that that could have been done in New York, but it seemed, you know, it’s that well laid plans of mice and men often fall by the wayside.

RS: Yeah. Thank you for letting me ask you a couple extra questions. This is what I want to end with. And, you know, you spoke of misogyny and I kind of, I don’t know, 100% hate kind of, like, gender questions and how is it to be a woman and blah, blah, blah, but I also feel like there is value and I think there are people that really are struggling in that and as a successful, powerful, experienced woman in this industry in investing in finance and all the things how do you, kind of like stay on the path? How do you keep your head, kind of together?

EP: This is a good closing question because I think I’m fairly positive on this actually. Because I have had, in general, very positive experiences working with my male counterpoints in cannabis. I do think that there are a couple of outliers who I’ve, you know, chosen not to spend much time with anymore because I don’t think they’re very respect and actually, frankly, I don’t think they’re very respectful of their male counterparts either.

So, it’s – I don’t actually even know if that’s a gender thing or if they’re just not respectful business partners, but, you know, I have amazing, yeah, if we’re just going to talk in broad strokes on gender, I’ve amazing male allies who always advocate for me and I can’t say enough about that.

They are the first people to say a good word about me when I’m coming into the room about why I’m a person of substance and maybe it, you know, maybe we wish that didn’t happen in this world, but I appreciate that it happens in this world. And I’m actually a person who believes in speaking well of your business partners no matter which gender.

So, I appreciate that I have male allies doing that. And then I would say the other part of that is that there are tremendous female founders and leaders in this industry. Maybe not as many as we’d like to see, but the ones who are here are tenacious and smart and inclusive. And I am so grateful because I’ve found an amazing cohort of women who are founders just like I am and we all spend time lifting each other up. And you know what?

The conversations that we have are so positive and productive and about what we’re dealing within our businesses and what we’re dealing with as an industry, there’s not the, kind of catty talk that people have come to stereotype women for, there’s none of that. It’s very much about this person is doing amazing things. You should know this person and this group keeps growing and I’m really heartened by that.

So, I feel like it comes down to, it’s kind of the people you surround yourself with, the structure you put around yourself that really lift yourself up. So, and I mean, you too, like, knowing you and listening to your content and the quality of your interviews, it’s so key to have people who are kind of the tent poles around this issue.

So, I’m pretty positive on it as a female founder. I do think, you know, I’ve heard about, you know, the drawdowns or whatever. But I think if we just keep showing up, that’s the way we change the conversation. And I think there are a lot of people ready for us to keep showing up. So, I’m pretty positive on it.

RS: Amen. Amen. Yeah. I think it’s a really good point that, like, people that are misogynistic are probably going to be filling the blank, like, crappy personality characteristic, like, how you are in anything is how you are in anything.

EP: Right.

RS: Yeah. Yeah. Well, Emily, another really great conversation. I hope everybody enjoyed it. I certainly did. Edifying, and interesting, and thoughtful. So, thanks for coming on. Thanks for sharing your insights. Thanks for taking the time.

EP: Thank you.

Thanks so much for listening to the cannabis investing podcast. Subscribe or follow us on Seeking Alpha, Libsyn, Apple Podcast, Spotify or Stitcher and we’d really appreciate it if you left us a review on Apple podcasts. It helps other investors find our show and makes us feel fantastic. If you have feedback or questions, we’d love to hear from you at rena+canpod@seekingalpha.com.

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