Cannacurio Podcast Episode 53 with David Friedman of Panther Capital

On this Cannacurio episode, Ed and David Friedman of Panther Capital discuss his background in finance and how he entered the cannabis space, all things mergers and acquisitions in the software space, trends that we should be looking out for, and so much more!

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Cannacurio Podcast Episode 53 Transcript

Ed Keating:

Welcome to the Cannacurio Podcast powered by cannabis media. I’m your host, Ed Keating on today’s show, we’re joined by David Friedman, CEO of Panther Capital. Welcome David!

David Friedman:

Hey, how you doing? Good to be here.

Ed Keating:

Good to have you. So lot’s been going on in the industry. We chatted a couple of weeks ago about trends going on and there’s just been more and more news and headlines and really none of them great and a lot in sort of the financial space. So Canopy Growth was just announced that essentially they’ve lost over $3 billion in the last year. And I think their auditors have left as well. MedMen is on their sixth CFO in six years and then Acreage Holdings is going through more sea suite changes. Do you think we’re, you know, I usually ask this at the end of the podcast, but do you think we’re reaching the bottom, David? Like, what the hell’s going on here? And is there more to come?

David Friedman:

I think we’re at the bottom, but I think we’re gonna stay here for a while and, and I think there’s more to come because, you know, when you are at the bottom, there’s a lot of fall out, there’s a lot of shake out and a lot of this stuff is embedded in these companies and, you know, until you hit bottom stuff doesn’t start to fall out. Right? And so can’t it be losing this kind of money? I mean, there are, and look, I’m not gonna make, I’m gonna make informal comments, not accusations. I’m also, you know, as a result of what I do in the business under NDAs with different people in the industry. So I have to be careful about, you know, what I know and stuff like that, right. But, you know, these sorts of things don’t fall out of the balance sheet from nowhere, right? They were there. and they were just, you know, treated in a manner that, you know, allowed people to kick the can down the road or do certain things. And, you know, when that flushes itself out, people go running for the hills, you know, MadMen imploded years ago, you know, they should have never been who they were, they were just out in front and, you know, wanted to be that first billion dollar public cannabis company, you know. But it was founded and run by guys who are, you know, would otherwise be considered criminals. And many do consider to be, you know, based on a lot of the activity and Canopy is not like that. I mean, Canopy took money from, you know, from a legitimate source, but just have a lot of people in this industry and don’t know what the hell they’re doing. You know, people were given in just enormous sums of capital to go explore. It’s like, you know, the gold rush and, and what they came back with was in many cases, you know, not worth anywhere near what the prospects thought they were gonna be.

Ed Keating:

Yeah, it’s a good point. I mean, and I think one of the other headlines was, I believe it’s in Canada where they’re sitting on 1.2 billion grams of unsold cannabis, I think. I mean, just an enormous number.

David Friedman:

I didn’t hear that.

Ed Keating:

Yeah, I have to check my facts and figures on that way to make sure. But, but it was definitely with a b. So so just just, yeah, a tough time and, and I think that’s hard for any company well run or not dealing with sort of the public policy issues that come into play here. But well, thanks for that, that industry overview. I want to focus a little bit more on you. So your background is in finance. So how did you come into the cannabis space? Because you’ve been here for a while? You didn’t just step in a couple of years ago.

David Friedman:

No, I’m, this is my 10 year anniversary. I got in at the end of 2013, did our first deal in 2014. So I’ve been around, you know, a long time.

Yeah, I mean, finance investing. you know, I did a lot of distressed asset M and A and then that turned into, you know, a, a lot of emerging industry because it, it, it’s a velocity thing, right? I’m the kind of person who likes to be involved in transactions that are fast moving because I like to think that I’m quick on my feet and I can think faster than a lot of people. And as a result, you find opportunities because other people got to slow down and analyze things. And by the time they’re done analyzing opportunities gone, that’s sort of where I drifted to and cannabis was just unnatural at that point, you know, it was a merging industry. I was coming out of early stage tech. It had matured to a point where arbitrage for guys like me just wasn’t as, you know, readily available. Family offices had allocations of $100 million to tech when you know, you got a Chicago venture capital firm, that’s a $100 million right? So what happens is they start poaching analysts out of your VC firm and paying them more money than you could pay them. Because the, you know, captive family office guy is gonna make or girl is gonna make, you know, a lot more money that way than in a VC firm where they got to work their way up. And cannabis was like, well, you can’t really do that right? Because you can’t coach my analyst because they, they don’t exist. They give me five years to learn and right now I’m the analyst. So it was just the natural progression of, yeah, I got one more in me, you know, I’m 47, so approaching 50 – I got one more in me and I’ll just do a turn in the cannabis industry and and accumulate a wealth of knowledge and sort of ride off into the sunset.

Ed Keating:

Excellent, excellent. Now, as I remember, you don’t invest in cannabis but more like innovative tech or processes. Is that fair to say?

David Friedman:

No, I wouldn’t say that’s fair to say, I would say we invest in cannabis really only in cannabis, but we invest in cannabis companies that have the ability to have – how should I say this – that that have appeal to non cannabis industries. We we think that the velocity in the cannabis industry and the lack of headwinds because of the lack of infrastructure that you run up against in commoditized industries, right? Where you have the incumbents that are just slowing growth, it doesn’t exist in in cannabis. And I think I may have told you the story, you know about my trip to Africa about 12 years ago where I was in the middle of the desert and I got no running water, no flush toilets, no electricity but four bars on my cell phone because those guys didn’t have to compete with AT&T and, and all these incumbents to, to dot The Serengeti with, cell towers. They just did it and they were doing, you know, M-Pesa, an African version of Venmo 15 years ago and they were moving money across their phones. And I was like, well, this is crazy, right? So cannabis is sort of like that because there’s no incumbents, you can start to do things that wouldn’t, won’t be accepted that that would get tuckered as we call them. You know, the guy who, who, who got crushed by the big five car manufacturers, the Tucker car and, and, you know, you can do that in an industry like cannabis with the pace of innovation is so much faster. And then if you are able to get traction with something in the cannabis industry that is a paradigm shift or that’s game changing. Now, you’ve got traction, you go back into the mainstream industry and you create FOMO, which is, it’s the antithesis to getting tuckered, right? You do something well enough, you create FOMO and then, you know, you, you have your defense against getting Tucker, right. So that, that was always sort of the philosophy that was, all right, well, what can we do in cannabis that we know if it works in cannabis will allow us to dominate cannabis and then pivot over to non cannabis and, and deploy this in, you know, commoditized industries and you know, be able to reap the rewards and, and go beyond the tam that the cannabis industry itself presents.

Ed Keating:

Yeah, and that velocity theme definitely makes a lot of sense because if you’re not running into headwinds, you can really cover a lot of ground very fast before you slow down. So with that in mind, what kinds of companies you know, have been in your portfolio? And how is that portfolio changed over the years in terms of the composition of the kinds of companies that you’d be like? Yeah, we want that or now maybe we don’t.

David Friedman:

I would say we haven’t changed much from our initial thesis. Now, you know, Panther has a third fund that I’m not involved in. I’m an investor in it, but I’m not involved in the management of it and that’s operated by Jordan Tritt, who is the the son of Ramie Tritt, who is my co-founder in the first two funds. But I think if you look back to the first fund and even to the fund that he’s in now that that hasn’t changed, we really are still the only change is that in, I know in the third fund, Jordan has, has started to fund plant touching assets and has done a couple of deals particularly like Greenlight, I know, because you’ve started to see opportunities of guys who had an exit in the industry and were looking to rinse and repeat. So that’s probably the only real material pivot but be beyond that. I mean, it’s been the same thing since day one. We, we look at companies that are innovative, you know, that, that can embrace the pace of innovation. A lot of that was software for reasons that were obvious. I came out of software, Jordan came out of software, he worked for an ERP company and pace of innovation and software development. You know, it was just always a good correlation. And, you know, anything that is developing IP and can take advantage of that pace of innovation and it stayed consistent, you know, across you know, the, the portfolio, it’s just that we deployed that capital over a period of, you know, 8-9 years and now three different funds. and some of that money went back into companies that we funded in the initial round and are still funding today and you know, looking to try to back the winners, it’s just like going to Vegas, right? You put your ads behind your, your winners. Right.

Ed Keating:

Yeah. No, that, that, that’s right. It’s portfolio out of 10 companies, you know, one or two might be a home run a lot will be in the middle and then some will fall off and sort of working off. That one thing that you shared before when we spoke is that, you don’t wanna be operating these companies and that sometimes that, that happens in, in, in a portfolio because they can’t all be winners. How do you manage that as, as, as a, as an operating partner or, or, or managing director?

David Friedman:

You know, I, I think, you know, a good term for it is the appetite for destruction that any one individual has. We’ve had a number of companies in our portfolio that were it not for our ability to step in, roll up our sleeves and take over. We would have lost those companies. They would have gone under, I’ve seen in 25-30 years of venture investing. If you left those to the CEO S that were in charge, they would have gone out of business. Not to say that we haven’t had one or two. We’re still, our batting average across these funds is pretty high, it’s probably still in the 80th percentile and I’m not saying we have 80% of the companies that are gonna have exits, but they’re still alive. There’s definitely certain, you know, a bunch in there that are treading water and while they still have an opportunity, you know, they still have a hill to climb. But being able to, you know, to keep all of those companies going is difficult. Right. So, you know, you got a triage, right. And, and some of that is based on, you know, the, the size of the investment, some of it is based on the size of the opportunity, I’ll trade, you know, an opportunity where I can get 100X on a, a million dollar investment for, you know, an opportunity where I can get 1X on a $5 million investment and just get my money back, right. You know, so you gotta pick and choose, you gotta be comfortable around stepping in and you’ve got to be willing to take some, you know, drastic measures if necessary. Fortunately, I’ve got a background with distressed assets and so I’m comfortable on legal maneuvering and I’m really good about reading shareholders rights agreements and things like that. And there have been a couple of situations where we’ve stepped in and said to the entrepreneur, no, no, you’re not taking this money. You know, if you do take the money, then we’re gonna sue you and they’ve all worked out. We haven’t had a file. 

Ed Keating:

That’s good. I mean, I can see how that background comes in and, you know, we always read for those details. Now, 11 of the segments that we talked about before and, and one that we have followed, a lot of cannabis media is the software space and there have been a ton of mergers and acquisitions there. We, we track and for five years have done our report on point of sale. Last fall, there were still 79 points of sale software in the industry. The top five had most of the share like 60%. But now we’re starting to see, or continuing to see some of those top companies merging with each other, some buying other ones. I mean, do you think we’re gonna see more of that sort of going back to the discussion at the, at the, at the top of the pod where we’re not at the bottom or if we’re at the bottom, it could be a long valley. So we don’t know when we’re gonna come up the other side to what do you think is gonna happen in that space? Because you and I both know that the industry doesn’t need 80 point of sale vendors to service, you know, 10-12,000 stores.

David Friedman:

Yeah, it’s a great question and this is something that we spend a lot of time on because one of our portfolio companies talent is it’s a a data driven learning platform. But the, the data largely comes at this point anyways, from some of the point of sale systems. Now, data is gonna come from other systems too, you know, it’s not just point of sale driven, but so we’re very sensitive to what’s going on in that part of the market right now. And, you know, there’s a couple of things that I see. Number one, a lot of these point of sale companies are getting more difficult to work with around their APIs because what they’re understanding is like you said, 79 companies in this space is, you know, just, just not feasible. And so, you know, being a point of sale company and competing, you know, with the top five, either they’re gonna get acquired, they’re gonna close their doors or they’re gonna pivot and even the larger ones are looking at. Well, ok, you know, the market share, right? And I always said in point of sale and stuff like that, it’s like we never invested in a point of sale company because my opinion was that, you know, when somebody tells me that, you know, they’re gonna be the Oracle, you know, or of you know, of cannabis. Well, you know, Oracle is gonna be the Oracle of cannabis when Oracle decides to come in to cannabis. So all you’re doing is gaining market share. But if you need to build a custom technology platform that already exists and is way better than anything you can build from the ground up next, you know, then it, it’s, it’s a bit of an exercise in futility. And so what you see is some of these companies now understanding, well, geez, we’ve got tens of million dollars into building a software platform that has no value because Oracle is just gonna replace our software with their software. So the only thing that has value is the is the the market share, the market share is maybe not big enough to recover a lot of the investment. So what else can we do? And so now you see some of these point of sale systems looking at, well, gee we don’t wanna give our api to some of these analytics companies because we need to be able to offer that to justify the, you know, enterprise value that we need to get in order to get out of this thing and, and make money. And so there’s a bit of a fight going on. I mean, we’ve been relatively protected, and none of these guys really want to get into learning and development and, and so that has been pretty good for us. But what we see, you know, these point of sale companies not necessarily willing to share their data. And so then the question becomes, well, is it their data or is it the customers, you know, and now you’re getting in the discussions, well, for the customer saying, hey, look, you know, you need to share this data and the point of sale company is saying, well, you know, then change point of sale. And so there’s a lot of stuff that’s gonna shake out here and I don’t know the answer, but I know some of it’s gonna be M&A, some of it’s gonna be pivot and extension of, of you know, features and, and feature sets within the point of sale companies that are, are gonna allow them to maybe take out some noncompetitive but collaborative businesses. And then, you know, some of it’s just gonna be people shutting their doors.

Ed Keating:

Yeah, one of the hypothesis that I’ve been talking to some people about is, is point of sale plus payments, sort of POS 2.0 because there seems to be some interest in those kind of tie ups. It goes back to something that I’ve talked about many times on, on the pod before, which is, you know, when you’re building out workflow software, one of the ways to do a good job is say David, what were you doing the 10 minutes before you use my software and the 10 minutes after? You sort of build that out. And payment seems to be where a lot of people have gone on to maybe for better or worse. But if you can make a simpler tech stack for your customer that might appeal to some.

David Friedman:

Yeah, I mean, payments is a space that we invested heavily in and we were the lead investor in PayQuick and sold PayQuick to Green Check Verify, which was an all stock transaction. So there wasn’t a liquidity event, but in my opinion, it was it, you know, that’s one of those situations where I was, I personally was heavily involved on the board and helping to get that transaction over the finish line because as a standalone company PayQuick was struggling to gain enough market share, because the recognition of, you know, safe banking and all that kind of stuff and, and payments, it’s still a little convoluted and you got a regulated industry within a highly regulated industry when you combine cannabis and banking and it was really, really hard. So that was a really good transaction for us, and I really think that the leadership of Green Check Verified, Kevin Hart and his team, you know, especially with being able to integrate us and, and a couple of others now and, and you know, have some velocity on that. But yeah, you know, point of sale system is part of the reason that NetSuite and some of these companies didn’t allow cannabis into their ecosystems early on. I have a letter from the general counsel at NetSuite from six years ago after being approved to use NetSuite for a plant touching or a non-plant touching cannabis company. And you know, as an investor, I went back and I said, I want a letter from compliance because I had another company that spent $100,000 trying to implement NetSuite and then got shut down and they wouldn’t, they wouldn’t give them their money back. And I said, no, I want a letter from compliance. I got a letter from the head of council at NetSuite saying, no, we’re gonna have to cancel your contract. You know, we can’t do business with this. You know, and that was because the payment rails that resided on NetSuite made them fully compliant with banking and, and that was six years ago, right? So I know NetSuite has now done some implementations and AA and other places, but the payment rails are still very, very, you know, hard to traverse and none of the point of sale systems have put in a first party payment solution that is gonna survive, FIS and FiveServe, and John Henry and, and these, these companies out there, they’re already doing it. They know they’re already doing it when you pay PG&E you know, out on the west coast for your electric bill. What do you think they’re processing through, they’re going through FiveServe or FIS mean, this stuff is riding those rails. And so it’s just, it’s a function of when is the, you know, when is the federal government gonna open it up? And right now it’s a, don’t ask, don’t tell. And so I think that’s another pay the payments area of combining that with point of sale. It’s a little bit of a trip and fall in my mind because nobody can do it through the front door. You know, Visa, Mastercard, these guys are all on our board of directors and FIP advisor is not, you know, and, American Express is the only one that and I, I predict they’ll be the first one in because they don’t, they have their own payment rails, they don’t use the, the federal government’s payment rails. So they can do it, but they’re still, you know, you know, the, the, the optics, right? And the, and the risk that goes, you know, with that.

Ed Keating:

Huh. Interesting. Wow. Now, one of your other roles is as the co-founder and CFO of seed talent. So, can you tell us a little bit more about how that fits into your criteria? Because it’s a, it’s an interesting story and, in terms of sort of the, the, the solutions that you provide to the industry.

David Friedman:

Yeah. So, you know, I’ve always been a big fan of, of sort of the definition of luck when opportunity meets preparation. Right? You know, that’s his famous quote and, you know, add some quote and, you know, it was a scenario where, I got involved with a woman who’s my now partner – both my business partner and my life partner. She hates when I use that term. But I don’t know what else. You know, I was introduced to her through a mutual friend and I was like, you know, I hate service. She owns a staffing company, a large one and does very well and it was just prior to COVID and, you know, it hit and, and she was trying to figure out well, what do I do? Because a big portion of her client face was in the travel industry. So you hide hotels and United and some of these things and all of a sudden COVID hits and it’s like, ok, firing no hiring, right? And so somebody said, hey, you should try out cannabis and I met with her and and I said, I look, I don’t like service businesses. I really don’t want to be involved in staffing, but I’ll help you, you know, I’ll help you in the cannabis business. But you have to go out to dinner with me. So, so I ended up getting both out of it. And so I became her first client and, and we hired a kid during a search for one of my other companies that wasn’t the right fit, but she, she loved him. And Kurt Kauffman, you know, she hired Kurt to come run the cannabis practice in her staffing firm. And at the time I was just advising her helping her, right. And Kurt came out of GTI and did a lot of the, on boarding and training for GTI. And so that was sort of his, you know, proximity to staffing and they got in and, and they realized very quickly, you know, it’s very hard to hire people in this industry because they don’t have the knowledge, they don’t have the education, you can’t go to school and major in cannabis in any way, shape or form. And Rana had gone through this in the, IT, she’s heavily in IT, in the early two thousands when people were coming out of college, but they didn’t have computer science, you know, a very, very infancy of it, right? And so what did she do? She had literally classrooms where she sat people and taught him, you know, how to use, you know, how to do things in, in information technology. So then she could play them with her clients. So she, you know, fast forwards and she’s like, well, you know, we can do the same thing, but now we’re in a digital age, right? 20 years later, we weren’t gonna set up classrooms to teach people how to, you know, get jobs in cannabis. And so Kurt really came up with the idea and, and Kurt’s like, well, let’s, you know, let’s find a way to help an industry that needs to rapidly up-skill people from other industries and identify what industries, those people are coming from, right? So like a barista become a bud tender and you know, that kind of stuff and that whole thing just sort of laid itself out. And so the two of them came up with this and, you know, I just really stepped in and tied it together from a technology standpoint because that was my background and through another company that was a portfolio company, we we, we built this LMS platform learning management platform said to Kurt, all right, here’s a little bit of money, go figure it out. And you know, he came back a few months later and it’s like, hey, you know, people are paying me for this. And so, you know, we kept doing it and kept doing it. And you know, we’ve now evolved into I I think really the only LXP learning experience platform in the cannabis, one of the few not in the cannabis industry and are doing a lot of data driven learning where we’re able to take KPIS from the point of sale systems and other systems and say, OK, you know, there’s a standard deviation here, you need to take this course. And after you take this course, we’re going to continue to measure your productivity and we’re gonna see an increase in your productivity and so much so now that we’ve, you know, signed contracts with, when we announced the signed contract with Verano nationwide for all of their stores, we’re rolling out every single one of the retail store. We have a couple of other ones that are being signed that I can’t announce. But it’s data driven technology. It’s using data to understand how people want to learn, need to learn and how they achieve their personal goals and their employers achieve their professional goals. Right. All of that coming together and we’re, you know, we’re already moving out of campus, you know, and we get a lot of warnings. Well, stay in your lane, stay in your lane. But as we talked about before, you know, the tam and cannabis is only so big. So you, you can take that back to the baristas, the restaurants wherever and, and now say, hey, well, we’ve done this and we’ve shown the ROI and we’ve got the traction. Now you bring it back and now you have the FOMO instead of, you know, the tuckering. So seeds doing and I do spend, it’s the first company that I co-founded in the last decade and, you know, never do that again. I never wanted to be an operator co-founder but Kurts taking the reins of the company in the last year to a point where I don’t, you know, I’m just really more of a mentor to him than anything else. And, you know, Rana provides obviously the, the staffing and industry insights, you know, and still operates her staffing firm. But that’s been a lot of fun, you know, that’s I would scale that business.

Ed Keating:

So my, my last company was actually in the training hr space. And so I’m curious, how do they go about creating that content? Because those, those learning management systems are, you know, have a very big appetite and for lots of content done in different ways. So what, what’s that process like?

David Friedman:

So the content is generally created by the stakeholder, right? So the use case that that is publicly available right now, you know, we invest the information of the point of sale system. We can calculate the average basket size for a bug tender and we can calculate a standard deviation from that average basket size and we could take anybody that’s 20% is the number we use. So if you’ve got a standard deviation of 20% will serve you up a course that tells you how to sell more during the checkout process or whatever it is. But a lot of that content comes from that particular employer. Now over time, it blends together, right? One employer gives us content, another employer gives us content, but they know how they want their people to sell or they ask us to help and then you know, we supplement. But the content is content that they’re already deploying just not in a digital format somebody in the company might, you know, come in – “All right. You know, the first hour on Friday we’re gonna tell everybody how to sell more when, you know, people check out” – they’re doing this stuff. Right? It just a matter of capturing it. So we’ve got an instructional designer on staff that works with our customers, but 90% of the content comes from them. What do you want to tell people? Ok. You know, what’s the KPI, how do we measure it if they fail the measurement? What do you want to tell them? And we get it into a course and then that course deploys on the platform.

Ed Keating:

Wow, it sounds like it really professionalizes that instead of just not, not that a toolbox talk like on the safety side is a bad thing to do. I mean, that’s good. But instead of just coming in on a Friday morning to have people, you know, maybe being able to, you know, access the training on their device, let’s say, or when it’s convenient to them really seems like it can drive some great benefits. And with, you know, with API is great.

David Friedman:

Yeah, we started with that. I mean, we have a very robust platform of, of courses that people could take for free, that are all, you know, far, far ranging in, in the cannabis sector. And you know, employers pay us to put their content on there. But the data driven learning is now taking it to the next level. That’s, you know, where we become more of the learning experience and now you’re able to tell people and, and employers are able to say and, and there’s more coming, right. You know, so if you’re an employee and you’re underperforming and an employer has assigned coursework to you and you don’t take that course, work, right? Or you take that coursework and you still don’t improve, then you can come behind that with PIP programs and HR things, you know, HR is a really hot button issue because you, you, you have to demonstrate that you’ve tried to help an employee before you fire him morally and not legally, right? And so if you can do that in a way that helps both the employer and the employee understand, hey, here’s why you’re not performing, then either you can, you know, help those employees see that or you can have more justified dismissals and you know, and put the right PIP programs in place. So you’re reducing risk and increasing productivity at every turn, no matter whether it succeeds or fails, it’s always benefiting everybody. And quite frankly, if an employee shouldn’t be in that role, then they should look. Well, why don’t I want to take this training because I hate it. Well, why do I hate it? Oh, maybe I’m in the wrong role. Maybe I should go somewhere else. We ultimately think that stuff will all happen, but it’s gonna take time.

Ed Keating:

Well, and also as a company that provides, let’s say great training to their employees that can help with the retention of the good ones where they feel like they’re being trained, it’s not just do what do, what Bob does or you know, hell, it’s on the job training. Figure it out on your own. And that’s not great for the customers.

David Friedman:

If you got a standard deviation and you below it 20%. And then some guy over here over here is 20% above it. You can start creating mentoring programs, right? Or your specializations, you know, you can get into, well, this guy’s really good at, you know, concentrates, but this girl is really good at flour. Right? And so now you start having, and if you look in retail, you walk into a Home Depot, they’ve got somebody over in the kitchen and bath section, they got somebody over in the Electronic – It’s no different. But the way to get there can be more intentional because you’re, you’re building it as you go. And so, you know, then again you take it back. I mean, we’ve talked about, can we do what we’re doing in Home Depot? Can we do this, you know, kitchen training and absolutely. Right. But they’re not gonna buy into this right now. They’ve got a great training program. You know, we’re not gonna up-skill their people better than they can at this point. But someday maybe.

Ed Keating:

Yeah, excellent, excellent. Now looking more broadly out at the industry, one of the topics we touched on is, you know, what’s happening with federal legalization, what’s happening with safe banking, you know, what do you think the industry is gonna look like if we get there, you know, will it be like wine

David Friedman:

Wine is a good correlation. So you know, even like wine scores, right? That’s something that abstract has started looking at like, can we take the wine score and apply it to, you know, cannabis because you got the smells and you got all these other things. It’s very similar, right? The wine industry, craft, beer industry, craft liquor industry. But then also I think it’s the most directly correlated regulated industry, it’s close to a drug, a legal drug, right? And it’s got a very specific, you know, interstate, interstate distribution limitation, stuff like that. So if, if we are smart, which we meaning the American political landscape and have demonstrated that we are not that smart, but if we are, I would think that, you know, more than pharmaceutical, more than tobacco, you know, the liquor is the right model for the cannabis industry. What’s unique about it is there is nothing on the planet that is legal for both medical and recreational use. You’re either one or another, right? You don’t need a prescription to go into a GNC and take an herbal supplement. You need a prescription for Fentanyl. That doesn’t mean people don’t use it recreationally, but it’s not legal and then it never will be and it’s not regulated and it never will be. So, cannabis is the only substrate on the planet that has legal applications for medical, which require a certain amount of regulatory environment, and then also recreationally that’s what’s different about it. And I’m very curious to see how do you regulate both of those things without them being in competition with one another.

Ed Keating:

So building off that, what other trends should, should we be looking at, you know, calling on your decade of experience here, and also your tech background, you know, looking forward what may be happening and, you know, maybe on the science side because I think that’s one area that we talked about.

David Friedman:

Yeah, I mean, on the science side, you know, I would, I would encourage you, we can, we can talk offline, maybe get some of the abstract guys on your podcast because I know enough to be dangerous. But I’m not a scientist, you know, I’m, I’m a, I’m a financial guru, but I’m not a scientist. But what I do know is that the cannabis plant is a largely not understood plant. It has tremendous properties that are arguably healing properties, other properties. The large, you know, I was told, I don’t know if this is a fact, but the cannabis plant has more terpenes in it than every other plant combined on the planet. It’s just, is that abundant with terpenes. I don’t know if that’s a true statement or not, but it has a lot of terpenes and nobody’s studying that and there’s science that is going to come out of the study of the cannabis. It’s going to be, you know, on the terpene side, it’s flavors and fragrances and it’s other things, you know, flavorings and you know, and things of that nature. But there are gonna be other discoveries that come out of cannabis. And I think that’s a super interesting area. I just don’t have enough scientific aptitude to be an investor in that area at the next level, you know, abstract is a very scientific company. I’m very invested in, you know, literally and figuratively in the company and what they’re doing. But if you get even their stuff, I can’t understand it.

Ed Keating:

Fair, fair, fair enough. Well, David, thank you so much for joining us on today’s podcast. I really learned a lot and I’m, I’m sure our guest did as well.

David Friedman:

Yeah, my pleasure. I’m glad to be here. And any time you want to have me back. Happy to chat.

Ed Keating:

Excellent. Excellent. Well, I’m your host, Ed Keating. Stay tuned for more updates from the data vault.