Cannacurio Podcast Episode 67 with Bret Worley
On this episode of the Cannacurio Podcast, Ed Keating sits down with Bret Worley, CEO of MC Nutraceuticals, to explore the rapidly evolving cannabinoid industry. Bret shares his expertise on navigating the complexities of different US markets and highlights the importance of flexible regulation and compliance for industry growth. He also delves into MC Nutraceuticals’ extensive global footprint in cannabinoid distribution and the company’s lobbying efforts to influence industry regulations. Additionally, Bret discusses the impact of the farm bill and provides a glimpse into the future of the cannabinoid market.
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Cannacurio Podcast Episode 67 Transcript
Ed Keating: Welcome to the Cannacurio Podcast powered by Cannabiz Media. I’m your host, Ed Keating, and on today’s show, we’re joined by Bret Worley, CEO of MC Nutraceuticals. Bret, welcome to the show.
Bret Worley: Thank you, Ed. Thanks for having me.
Ed Keating: Absolutely. So I’ve been reading a little bit about your company and it seems to have a focus on the health wellness industry, and it has this interesting tagline about, you know, producing cannabinoids worldwide, and that’s , that’s started to have a bigger import lately in terms of how Cannabinoids are recognized and how they’re regulated. So could you give us a little bit of your background and how you entered the industry?
Bret Worley: Sure. I’m from the distressed bankruptcy field, which isn’t the most exciting field, but You know, 2019 CBD was quite distressed and I had an opportunity to join a management team at a small, uh, THC remediation company, which is always funny considering we sell THC now by the boatload. Um, and with that, you know, allowed me to learn the industry within about a year and I split off after that and created MC Nutraceuticals in October 6, 2020. I think it was.
Ed Keating: And, um, Yeah, not much going on in 2020. So, right. Let’s create a new business, right?
Bret Worley: Right, right. Yeah. COVID, COVID was helpful to make sure that I stayed focused. That’s for sure. Um, so, you know, that catapulted us into the Delta eight field, um, which, you know, was, Very lucrative, obviously, in order to build out the company that we’ve built out and, you know, we did it a lot, a lot with blood, sweat and tears, as I always say, and, you know, no investors, no, no real help. And, um, we were able to build, you know, what is deemed to be the biggest cannabinoid distributor in the, in the world. We’re in 30 countries. We’re in every state. We sell to 650 customers actively. Um, so on a month to month basis, we have about 650 accounts that we manage that are all B2B and we, you know, so last year we sold, I think 70, 000 or 72, 000 kilos of, of cannabinoids.
Ed Keating: Wow. Wow. That’s, that’s, that’s remarkable. Um, you talked about THC remediation. Could you just give a definition of what that is? Cause I’m not a hundred percent familiar with that or sort of the mechanics of it.
Bret Worley: Sure. And in 2018, 2019 is really 2019 Farm Bill got signed in December of 2018. You know, everyone wanted to remove the THC out of CBD because of the, you know, definition of 0. 3 percent Delta nine THC on a dry weight basis. So that’s, that’s where the CBD industry started, which is, you know, how do we get the THC out to make sure it is compliant? So, so, There’s a technology called chromatography, which is well used in the pharmaceutical industry for purification. And, uh, that’s what we did at, uh, you know, my previous company. And, you know, it was just, CBD was just a tough market at the time. So, um, you know, there, there, there isn’t as much consumer demands mainly because the consumption rates aren’t super high. So, you know, you take a soft gel of CBD and that’s it, right? So you have a 30 day supply if you have a tincture or a soft gel, and there’s not a You know, a high consumption rate, whether, uh, you know, compared to a recreational, you know, Delta8 THC, for example, where someone might smoke a vape in three days rather than thirty.
Ed Keating: Got it. Got it. That makes sense. Well, yeah, I was going to say, I remember we started covering hemp licenses. probably like maybe 2017/2018 is more states were issuing them. And some states just had like ridiculous numbers of growers of hemp. And you know, it was a row crop and people knew how to grow row crops. And I think some people made money early on, but then you’d read all these stories about barns full of drying hemp, uh, that was essentially rotting. So, uh,
Bret Worley: Yeah. So, I mean, you know, the far, I’m not as close to the field as I say, but I mean, we grew 170,000 acres or so in 2019, and that’s about triple what we need today in a mature market, like, you know, a fairly mature market. So, um, we’ve fairly gone through all that product now because some of people did extract it into a crude where you know, it’s stable But you know as as far as we know today, there might be a couple stashes left But we’ve gone through all the the post, you know that past crop essentially
Ed Keating: Sort of like the U.S. It’s like the U.S. Petroleum Reserve or the Maple Syrup Reserve up in Canada, right?
Bret Worley: The reserve is empty, um, which is cause, you know, a little bit of supply constraints and, uh, which is, you know, it’s good for the industry. So farmers can reenter like, yeah, you boys make fun of us. Cause we didn’t grow much last year. It’s like, well, we didn’t really have to, but you know, in 2024/2025. We’re going to have to grow 50,000 acres. So, I mean, it’s going to be a lot. And that’s just for cannabinoids. It has nothing to do with textiles or, uh, you know, anything along those lines.
Ed Keating: So, so how do you, like, uh, we’re very close here in Connecticut to a company called Cannabis Benchmark. So they do sort of the, the, the future prices of, of cannabis and hemp or the spot prices. How do you figure out future demand like that? I mean, is it, you know, sort of like, right? Because I mean, it’s a hard market, especially now to figure out because I don’t know what you have, I guess.
Bret Worley: Yeah, the market’s, you know, it’s extremely tough to predict. I mean, anyone that want, you know, and I work with Hemp Benchmarks from a time to time basis, which I’m sure they’re the same company.
Ed Keating: Yeah, they are.
Bret Worley: So I mean, I work with them, we we have a lot of data, which is good for us, right. So we have, you know, years and years of, you know, You know, fairly high level data as far as the sample size of the population, cause we’re so diverse in our customer base, but you know, it’s, it’s hard to predict and we’re not in the game of predicting, you know, as the industry becomes even more mature, you know, we’ll get to the point where that you could actually do real futures contracts, just like you would have corn or weed or hogs, you know, whatever it is. Right. So I think those days are coming, you know, in the next, you know, Two years probably, but we’re, we’re still not there. So, you know, we’re just agile and flexible. And I think that’s what, you know, at the end of the day, you know, I’m sure we’ll get around to this, but the difference between hemp and cannabis is flexibility. You know, being able to innovate, adapt, create new products, um, and, and just be generally agile, you know, is something I started saying recently is, is, you know, cannabis companies have eight times more employees per revenue dollar. So to make a million dollars, you need eight more, eight more employees than a hemp company does. in order to generate that million dollars and it’s just a clunky system.
Ed Keating: That is a hell of a statistic, but really powerful. I mean, it explains a lot of the challenges. Now, one thing I want to talk about, you know, beyond you and the company are sort of like looking at markets, some specific and some general, and I think one of the biggest impacts the market, at least from where I sit, is the farm bill and how that sort of changes every five years and how it’s gotten to be much more of almost a political football. So what does it mean for your company in terms of if it changes or not, because, you know, you are agile and flexible, so you may be able to navigate around the farm bill, but I’m just sort of curious because it’s certainly been in the press a lot.
Bret Worley: Yeah. So, you know, you know, MC Nutraceuticals is uniquely positioned. I’m also on the board of American Healthy Alternatives Association. So we’re the largest hemp advocacy lobbyist group in the country. So I have four lobby, you know, our group has four lobby firms on the Hill. So, you know, the question’s hard to answer because I know more than maybe most people do. The reality is, is the Miller Amendment, you know, in, in the house agricultural, uh, committee went too far. And, you know, at the end of the day. I think it was good for the hemp industry. You know, it sounds crazy, right? Cause my phone blew up for about a week. So it kind of sucked, you know, a month later I looked back and I go, it, it really united the different trade or, you know, lobby groups, trade organizations. Different segments of the industry. It said, Hey guys, we, we are under attack and we need to get together. And as someone that’s lobbied three years protecting, you know, the market that we’ve built and also adding in additional regulations that, you know, we hear and we understand and we want those, uh, but not over, you know, over zealous or over onerous, you know, regulation somewhere in between is what I always say is the reality is it was a good wake up call for the hemp industry. I don’t, I don’t believe that the Miller amendment is going to make it much farther. I haven’t checked into my lobby team, but something happened yesterday that was good. Um, it wasn’t quite as good as I’m fixing the Miller Amendment, but something good in DC happened. And, you know, we’ve heard a lot, you know, from a lot of, you know, House Representatives and Senators too, that, you know, they’re not really happy with the way it was done. So, you know, at the end of the day, I mean, the Miller Amendment is a killer. I mean, there’s, you know, I don’t know what I would do, honestly, to be quite frank. Um, it, I mean, I don’t know that you could really even grow CBD.
Ed Keating: Oh really? It’s that prohibitive?
Bret Worley: It’s yeah, it’s that bad. You can’t, you can’t market anything as you know, a THC, which show Full-Spectrum, Full-Spectrum products are gone. Um, it changes, I think the definition of total THC, which means most CBD products, you know, most CBD grown in the ground is, you know, already close to 0.3 percent Delta9, you add in THCA, and you know, you’re at 0.5 like, so, you know, most of the growth, like genetics will, you know, eventually probably fix that, but not right now. Right. We, we know we’re, we’re used to what we were given. So we’ve, we built a 30 billion industry on the Farm Bill definition as is. And we’d like to keep it that way. And we’d like to have a state’s rights issue, which is let’ s let the states determine, you know, some states have decided to ban Delta8, for example. Okay. That’s their, you know, that’s their right as a state. Um, and some states have decided to regulate Delta8. So, you know, it is a, you know, it’s a issue, but I wish I wasn’t, but at the end of the day, it is what it is, right? So, you know, unfortunately, federally, the plant got split in half. Hemp is under 0.3 percent Delta9 and marijuana is over 0.3 percent Delta9. That’s just federal statute. So there’s not much you can do about that. But at the end, at the end of the day, I think, you know courses will correct. They typically do.
Ed Keating: Well it’s true, you know, tend toward the mean. But looking at a couple of states that I wanted to focus on just because we’ve seen a lot of them, or Cannabiz Media just has a ton of data on some of these states. My favorite example is the gigantic “cannabis” market that is Texas, which only has 3 regulated retailers, if you will, of product, but there are almost 5,000 CBD retailers and 62,000 vape and smoke licenses in that state. I mean, and they’re selling all sorts of stuff.
So what does a market like that mean for MC Nutraceuticals? Like, is it, is it a great opportunity for you? Is there too much distribution, you know, lots of price pressure?
Bret Worley: Well, there, you know, so two questions. I mean, there’s the political answer. So I’ll start with the economics. I mean, Texas is probably the third largest cannabis market in the world, I guess, at this point, you know, removing black market. Florida is the biggest at 6.9 billion, California is 6ish billion. And then, you know, Texas is about 3 billion. So I don’t know. You know, maybe New York will eventually be there, but it’s not there.
Ed Keating: Michigan too, is probably close.
Bret Worley: Michigan’s close, yeah. Michigan’s in that range too. So anyway, you know, Texas three, four, five, it’s one of the top five, you know, cannabis markets. And you know, when I say cannabis, I mean the full plant. So in this case, it’s, you know, Florida and Texas are hemp markets, right? So absolutely huge market, um, you know, on the, on the political side, you know, and, and we want to keep it that way. Right. So Uh, you know, very important to MC, very important to the industry. 60,000 stores. I mean, that’s a lot and that’s not even C stores, you know, now C stores are adopting beverage products, which is going to add another 25% at least in the next year to the hemp market, if not more. Um, so it’ll be a 4 or 5 billion dollar market by the end of next year. So, you know, beverages are now going to C stores, liquor stores everywhere. You know, hemp derived THC beverages. So it’s a, it’s a huge place. It’s a huge opportunity in the beverage. You know, everyone’s pretty well established with Delta8 pens, for example, um, you know, the, the beverage market is going to be huge in Texas.
Ed Keating: And C stores, you mean convenience stores, right?
Bret Worley: Yeah. Yeah, correct.
Ed Keating: Yeah, up here in Connecticut. They just changed their rules around where. Low THC beverages can now be sold in what we call liquor or package stores here. But if you want high THC, if you will, you need to go to a traditional dispensary that’s regulated by the state. But you know, every state has their own “choose your adventure” kind of thing. So….
Bret Worley: Yeah, “choose your adventure” is a good way to put it. I like that.
Ed Keating: So, um, now, uh, another state, and it’s also one that you mentioned is a large market is Florida. So recently, uh, the governor vetoed a bill that would have banned Delta8 and other hemp products because he was trying to. Some say reap favor with the hemp industry, you know, what’s going on in that market? Because, you know, population wise, it’s gigantic.
Bret Worley: I mean, biggest cannabis market or, you know, hemp market in the, in the world. Um, you know, you know, talking about the DeSantis a little bit. I mean, you know, politics is fun and crazy. Maybe funs the wrong word, it’s crazy. Uh, we have a, a very large lobby team there, and, you know, the reality is, is we were fighting one large MSO for the most part. Um, you know, in 2023, we actually, right. Florida has some of the strictest. They do have the strictest hemp regulations in the country. It is. You know, you know, there was a enforcement because one of our, my friends had, uh, uh, hands together, like, uh, almost like praying on his package and that was non-compliant. So, I mean, like there is, and there’s lots of stories of just like very simple packaging, you know, things that there are problems, there’s no milligram caps, but it’s 21+ serious testing requirements, serious packaging requirements, um, I would say honestly, over, over burdening. Um, yeah, but we were, we were fine with them. Like we, we negotiated them. So, and, and in 2024, you know, this year. The Senate was covered by the MSO, if you will, said the Senate won, and then, you know, went to a non-recorded vote and it came down to three votes, which they probably should have recorded. But, you know, at the end of the day, went to the governor’s office and, you know, governor DeSantis is a Harvard, Yale attorney, you know, Jag, I mean, like, serious policy guy. I mean, to the bone. And the reality is, is, you know, he, he doesn’t like marijuana, you know, fine. Right. Whatever. Um, we can all disagree or agree with that. It doesn’t really matter, but he’s not, he wouldn’t let a large MSO come in and write the rules and ban a regulated hemp industry. I mean, it’s, it’s, I laugh at it because luckily we got the veto obviously, but it’s just, it is crazy to think about that, you know, thank God we have someone that actually listens to policy because that’s actually fairly rare in politics.
Ed Keating: Right. Sort of like a similar, similarly, I think it was in New York where it came out that, um, MedMen had lobbied really hard against HomeGrow up there. Of course they would, it’s in their best interest, but is it in the best interest of the industry or patients? No. So…
Bret Worley: I’ll, I’ll say this, you know, what we hear from, unfortunately, the marijuana lobbyists is they don’t actually want interstate commerce. They probably don’t even want, you know, rescheduling to 3 is fine because that doesn’t open really interstate commerce, maybe arguably they w they don’t want to home grow. They want to make sure that they charge as much as they can for a patient. They’re stuck to 10 milligrams, which is literally nothing. I mean, it’s just not enough for people that need it. One that build a tolerance and to the people that need it for medicine. So, you know, at the end of the day, You know, hemp industry, although people might say like, Oh, a hundred milligrams is crazy. Well, it’s, it’s actually not. I mean, people consume, I know someone that takes 800 milligrams a day for lupus and without it, she’s completely debilitated. I mean, there’s just like, there is, and I wouldn’t even say extreme examples. It’s probably 5 percent of the population or 10, even maybe even 10 percent that either build such a high tolerance of 10 milligrams does nothing. And then they get kicked back to the black market. Because it’s the only way to buy affordable medicine or two, you know, they just need it for whatever illness, like illness they have. Right. So, you know, I, I’m in Colorado, um, and I asked my, you know, and I have cannabis friends. We sell the cannabis companies and go, why don’t you guys lobby for a higher milligram cap? I mean, it’s easy to me that in 10 years, Milligrams haven’t moved from 10. I mean, like it’s just, and I know in medi, in medical, like you can go to the medical and go through the doctor and maybe get more, but that’s like a really tough process. I mean, that takes time.
Ed Keating: That’s right.
Bret Worley: I mean, I just don’t think, you know, and people compare this to alcohol, and alcohol’s not a medicine, you know…
Ed Keating: And they can go by Everclear if you want it!
Bret Worley: Yeah. And, and I think people should be able, if they’re over 21, people should be able to do what they want and, if there’s something that could be recreationally used for fun and used for medicine, then it’s just a no brainer. Right. It just makes no sense why it can’t be in a liquor store, you know, behind, behind the counter in a convenient store or a low dose beverage can be, you know? Yeah. Right. By a BudLight. I mean like it just, it’s. It’s crazy to think about that. There’s been no progression in cannabis in 10 years, but that’s how markets work. I mean, if a, if a market gets stagnant, innovation comes around eventually. And that’s exactly what the hemp industry is done.
Ed Keating: No, that’s very true. Now, uh, you mentioned a couple of times lobbying, which, you know, I’d really appreciate, cause there’s a lot of interesting data that can come out of that, like who’s lobbying for whom and what issues, et cetera, but it also made me want to ask you, sort of how big a role is compliance in your company? Cause it would, you know, we know that if you’re selling it in many states and it is a guy who’s always worked in compliance software, publishing information, you know, once you get a couple of jurisdictions, things get complex. So I would imagine given the list that you shared of all 50 states, I think 30 countries, et cetera, et cetera, compliance must be a big part of, of, of your, of your team. And, and if it is, you know, what’s it like, and what do they focus on?
Bret Worley: Sure. So we have, I mean, there’s two things. There’s legal compliance and product compliance. So in Colorado, you know, we, as in me and my team negotiated a safe harbor manufacturing provision because, of course, they didn’t want us selling in the state. So, um, with that came a lot of requirements. So we have to be GMP (Good Manufacturing Process),
Ed Keating: Oh, wow.
Bret Worley: Which I love. I think that is for, for manufacturers and I hate to say that a three tier system, but in a three tier system, like the manufacturer should be The most burdened, right? We’re the ones making the goods.
Ed Keating: Yeah.
Bret Worley: So, you know, that, that’s how I look at it. And I was totally like, we’re totally good with that. So, you know, everything’s tracked and traced. Everything’s written down, audited, able to be recalled. And I support that. I feel, you know, the small manufacturers, mom and pop manufacturers, you know, it’s, it’s unfortunate for them, but at the end of the day, if like you’re eating something, I think it should be, you know, able to recall, able for recall. Yeah. The big things that the cannabis industry says, like, Hey, we have to do you use Metric or whatever it is, which Metric’s crazy. But you know, GMP is the answer. You know, if you really want the hemp industry be track and trace, then just put a GMP stamp on it. I mean, they’re Perry Johnson, NSF, dietary supplement 117, like all this stuff’s already set up.
Ed Keating: Yeah, true, true, true.
Bret Worley: Right. So that’s, that’s the product side, um, on the regulatory compliance. I have an amazing general counsel. His name’s Phillip snow. Um, he helps me a lot out with our regulatory affairs and, you know, he’s written as many laws as I have. Well, I help write the laws. I don’t know in the paper, but, um, I have influenced many laws and, um, you know, at the, at the end of the day, it’s pretty simple. I mean, on the West coast, most of the products are banned and on the East coast, none of them are banned. So, um, you split down the middle, you know, there’s, there’s some states that, you know, are unfortunate, like Nevada accidentally banned CBN because They rushed and they didn’t know what they’re doing. So, you know, CBN, CBC, THCV are all banned in Nevada, so we can’t ship to Nevada, for example. So, that affects the cannabis guys, and that shows you what happens when you write bad policies. So, you know, as far as like, where can we ship? Where can’t we ship? I mean, that’s, that’s, you know, You know, luckily there wasn’t too much, there’s about six or seven shakeups essentially per year, per session. So, you know, it’s not crazy to track them because we’re involved with most of those states. Um, you know, I think the only ones this year we weren’t involved in was South Dakota, Wyoming, and Iowa. And, um, the rest of them, we were, so those states, those states in the banning, you know, Delta8 under Iowa’s 4 milligrams, South Dakota and Wyoming are total bans, I think.
Ed Keating: It’s a little bit of a, and I mean this in a good way, sort of a work the ref strategy. Like, you know, you gotta be part of the discussion or else, you know, if you, if you’re not there, the decision is going to get made for you or perhaps against you
Bret Worley: 100%. And that’s, yeah, I always say, unfortunately, but I got, you know, Kentucky was looking to ban Delta eight three years ago. And, you know, I hired a lobbyist and I’ve kept them on staff essentially since then, I love them. And, you know, he, that’s, that’s what these people do. They explain your side of the story. And, you know, of course, you know, lobbyists are always the boogeyman, right. But, you know, in HIP, you know, the way I always say is, you know, I want regulation. That’s sensible. I want to sell my products and then I want to be left alone. Like any business, but I just like selling, you know, just like a liquor store, I mean, like, just like I’m selling tobacco. I mean, those are all bad examples. Cause I think they’re terrible products for humans, but like, I want to be left alone, like a, you know, Boba Tea place down the street, you know, like I need to make sure my place is clean and I need to make sure I don’t hurt anybody. And that’s, you know, after that, leave me alone.
Ed Keating: Well, I mean, makes a lot of sense. And, and, you know, having, having that sort of regulatory understanding and how that process works, you know, obviously, uh, enables you guys to sell sort of, you know, far and wide. So one other question I had is. sort of how you look at the market because you guys are, you know, B2B. So, you know, are you selling the MSOs or are you just selling the small businesses? Uh, you know, what’s an ideal state for you or is it more company based? Like, hey, you want to sell through, you know, MSOs and let them cover a state. So just help us understand that.
Bret Worley: I mean, we’re very, very, very diversified. We sell the, you know, some of the top MSOs, we sell the some of the top, you know, Delta8/Hemp companies. Um, but like the majority of our business is actually, you know, fairly small transactions. Um, our average transaction size is like $6,000, which is really not a lot in our space. Um, our competitors typically are like $50k. So, you know, we’ve, we’ve built out a business that’s very diversified. You know, we’re the only company that has over 50 clients. So we have 650. So a lot of it’s mom and pop. Um, you know, anywhere from a small store that might want to kind of do their own, you know, their own formulations, their own blends, their own brand, all the way to the largest cannabis company in the country. So we’re, we’re diversified, but our revenue is very much, you know, broken up to mainly smaller businesses.
Ed Keating: Got it. Got it. So, uh, sort of a tie into the question that we always ask before I ask on the, on the podcast is, um, how do you guys use Cannabiz Media to sort of reach the market or maybe research the market? I’m not sure what your use case is, but now we’d love to hear any details you could, uh, you could share.
Bret Worley: So, I mean, I think we use you guys for a lot of things. One, you guys have a nice emailing, uh, platform. To, uh, all the, the license holders. So we, I know we use that quite often. And then, you know, at the end of the day, I don’t know a database that’s got, you know, I don’t know, it’s every license holder, but every, I mean, most of ’em, right?
Ed Keating: It better be, I run the data team, so if we’re missing something, it’s on me.
Bret Worley: And, uh, I, I’ll, I mean, if we don’t have con, you know, we have about 10,000 companies in our, in our personal CRM, which, you know, are mainly hemp companies, but you know, if we never, if we don’t have the data or if we don’t have the data, um, or if, you know, something new pops up, I mean, I know my team’s in Cannabiz Media all the time. Um, it’s not something I use on a day to day basis. I have, I have, uh, very talented people that are smarter than I am for that. And, um, you know, we, we renew every year. So if we didn’t like it, that’s for sure. I mean, my, I think my team tried negotiating with you guys and you guys didn’t, uh, negotiate much in their favor, and I’m like, just, just do it.
Ed Keating: Alright. Well, well, well, hopefully, well, now you know who I am. I know who you are.
Bret Worley: I mean, I will just be frank. I mean, there’s not many platforms that we’ve stuck with. So this is probably the only one. I mean, we, we have a, a nice, uh, partnership with another group, but. Um, Cannabiz Media is the only company that we’ve really kept. I mean, there’s a lot of bad software services, lead generation tools in the cannabis industry.
Ed Keating: Yeah, well, it’s good to hear and we’ll continue to work hard to keep your business, because we’re proud to have you as one of our clients. Um, one thing I wanted to talk about is we look a little bit forward and in conclusion. Are there any unique challenges that you’re dealing with now in the industry? I mean, it really sounds like you’ve got good diverse revenue, a really good regulatory compliance strategy. You know who your market is, but you know, are there any challenges you see aside from sort of this general industry downturn that we’ve all been fighting for almost three years now?
Bret Worley: Yeah. I mean, the hemp, you know, the hemp industry is still growing. So I mean, that’s good. There’s, there’s been compression due to, uh, more on the, the brand side due to just so many, there’s so many brands out there. So that’s just, you know, I always look at everything on a, you know, a market curve. I mean, you have the big upswing and then you have the consolidation swing. So we’re in, we’re in about call it consolidation mode where people drop out of the market. People will buy other people. Which is a good, you know, a good spot to be where you’re really educated on the market. So, and, and, and capital will come in. And, you know, you know, the big, I guess the big obstacle is, is regulatory. I mean, big capital won’t come in until what’s going to be probably the 2025 Farm Bill, because it’ll be kicked in a year. Um, so, but you know, the beverage guys coming in is, is very important and it shows legitimacy that, you know, this isn’t. A loophole, right? I mean, like I laugh because it’s ridiculous, but, um, you know, Congress doesn’t make loopholes, but they can shut things down. Right? So, you know, at the end of the day, the beverage guys are recreating a new segment, a new market. I think the beverage market could be one of the biggest markets ever, essentially, um, C-store adoption. I mean, there’s hot, there’s 400,000 C stores, 400,000 restaurants. I mean, that’s a lot of points of sales. So, um, I, I think everything looks very good, you know, there’s bad days, there’s good days, um, but overall, you know, you know, crystal balls, you know, the crystal ball looks, looks good. Um, the Farm Bill needs to be, you know, the Farm Bill hemp portion, I should say, needs to be protected. And when that happens, I mean, I don’t see a world that, Farm Bill goes the way it does, that like hemp just takes over. Um, I think a lot of laws are going to be reversed due to, you know, bad statute. Um, you know, especially in the West on the West coast where just, they just went too far and the statute isn’t procedurally proper. So I think there’s gonna be a lot more market share grab. Um, and you know, I, I think most people in the hemp industry are doing well, that had really strong PNLs and, you know, you gotta, you know, everyone needs to keep in mind just in general that the hemp industry, you know, besides that 2019 wave where some capital came in, You know, all that stuff dried out and we haven’t had capital in years. So, I mean, we’ve, I mean, I started my company with $0. Everyone I know, you know, they might have some, you know, family, friend investors. Right. But we never had that 16-to-1 revenue. I mean, like we just never had that. So the industry is strong from like a P and L standpoint. And, um, You know, the whole industry. And I don’t think you could say the same thing for regulated marijuana. I don’t, I don’t know anyone that’s, you know, separate green thumb that’s making money, right?
Ed Keating: It’s true. It’s true.
Bret Worley: And 280E should fix that. But my opinion on rescheduling is it’s still two years out. So
Ed Keating: yeah, you might be right now uh, two last questions. One is recently it was a big announcement made by Curaleaf for, they said they’re going big into hemp. And that’s a pretty profound. You move for them or shift. I mean, a lot of the MSOs have always held hemp licenses and we we’ve seen sometimes it’s the CEO who himself or gets it in some weird state like New York. But that was years ago, like 2018, 2019, but for them to make a big statement, what does that do for the industry? Does it not legitimize it, but does it draw more attention to it, Brett?
Bret Worley: You know, I, I talked to not, not necessarily Curaleaf, but some of these other MSOs and you know, they’re all in GreenThumbs.You know, Incredibles that sells Delta8 vape pens, right? You know, and GreenThumbs even, and a lot of people don’t actually know that, like GreenThumbs sells Delta 8, and that is public information. Um, you know what, one, it’s good for the industry because it’s, it removes the Civil War thing that’s absolutely ridiculous, right? Now, I’ve been lobbying, against Curaleaf and lots of states and lots of places. And I, I don’t want to. So, I mean, I would love for them to, you know, open, open up the doors on hemp. Um, the one thing I’ll say is, is, you know, you know, there’s lots of large cannabis brands and I’m not picking out any specifically, but, you know, Cookies, Stizzy, GreenThumb, I mean, go on and on and on, and a lot of, you know, can’t like, and a lot of them are getting into beverages too, is you know, they’re still kind of stuck with that adult use recreational regulated mindset and they also don’t want to invest a lot of money in this space. You know, there’s the only company that actually markets, you know, really like does real marketing is 3CHI and they’re, you know, Barstool NASCAR, I mean, which is great, right? But you don’t see anyone else doing that. And these guys do have the capital to, you know, you know, they might have to create a new entity or whatever, but you know, owned by Curaleaf like Curaleaf could easily come in and say, we’re going to invest 10 million in it. It would just be an absolute game changer. I mean, 10 million if used properly, I mean, could make you 200 million. So, you know, the one thing I see is, is these guys aren’t full, you know, and again, this goes to the back to the clunkiness, I mean, like eight people in between a decision, you know, essentially is too many people. Um, and they’re, you know, just used to being, you know, you know, really pushed down by the man, I guess you can’t advertise THC products like anywhere, right? So we, we can have billboards, we can be on a blimp, we could be, you know, if you’re in Miami, you see those planes flying by, like, we can do that legally. And I think, you know, they just, all these MSOs need to kind of, you know, realize what a 10 million investment would do. I mean, it would be game changing.
Ed Keating: Yeah, that’s a great point. So one last question that sort of ties together back to the regulatory side and comes out of a conference I was at. With all the regulators in Minneapolis, uh, last month, do you think more states are going to move to this one regulatory body to regulate cannabinoids in the state, instead of saying, well, hemp’s department of agriculture and, and cannabis is department of health or department of taxation and revenue. Like, do you see that coming together or do you think it’s still going to be a hodgepodge and, you know, “choose your own adventure” again?
Bret Worley: I think it’s “choose your own adventure”. Um, depending on the state, a lot of times they try to shove it in the cannabis body, which most of them, and I won’t speak for all of them are complete failures. I mean, they don’t regulate anything. They don’t do anything. I mean, they’re just, you know, you’re looking at this California pesticide province, like guys, this has been going on the whole time. You guys just haven’t done anything about it. And it broke, you know, broke news. Right. So, um, you know, I think I think somewhere in alcohol, tobacco land is best. Department of Agriculture typically does not have the resources to enforce consumer good, and we want enforcement. Like, just to be clear, like, you know, people always bring up like the Doritos and I’m happy to talk about stuff like that because those are black market illegal products. They should be on the shelf anywhere for any reason. It’s not hemp. They’re just illegal, right? Hemp is a legal definition. You either fall into the hemp legal definition or you’re a black market product. So, you know, I would like some like a body with teeth. Um, we’ve seen FDACs in Florida do a pretty, you know, that’s health essentially, uh, Florida Department Agriculture Consumer Services, I think. So that’s essentially their health department and their Ag. So it’s kind of one ag and, um, and the, and they’ve done a pretty good job of enforcement, but it’s, you know, it’s still not enough. So I, I’d like to personally see. You know, one, we don’t need a cannabis enforcement body. We need one enforcement body, you know, assuming that we have deregulation essentially, or descheduling. One enforcement body, just like alcohol or tobacco, right, that has the power to do sting operations, go into the stores. I mean, alcohol is a clean ship, but I mean, but they’ve done that because alcohol is really dangerous. So,
Ed Keating: Yeah, right, right, right.
Bret Worley: I don’t mind having a clean, I don’t. You know, cannabis isn’t dangerous, but I don’t mind having a clean ship to make sure that, you know, you’re not selling to people under 21. You’re not selling a product that infringes on trademark. I mean, that doesn’t happen in alcohol. You know, maybe the 21 piece, but rare, you know, rarely they do, they do sting operations where they send, you know, someone with a fake ID and then see if you sell to ’em like that.
Ed Keating: And they do that in, in, they do that in Colorado and Oregon for cannabis anyway. Where, where they, they do have that. And you know, maybe that ties into, you know, what you referenced sort of briefly before. for regulation, sort of age-gating, labels and testing, you know, if you’re, if you’re hitting those three, you’re probably regulating the industry pretty well.
Bret Worley: Yeah. Yeah. I mean, I, and, and if you run and get crazy, throw in the GMP and you’re done like that.
Ed Keating: Yeah. Yeah. Right. Right. Right.
Bret Worley: I mean, your stuff is made properly. It’s sold to people over 21. It’s, you know, packaged, not appealing to children, for example, which it, you know, it’s slippery slope, but it’s fine. And then it’s tested, you know, free of contaminants, free of pesticides, heavy metals, you know, all that stuff.
Ed Keating: Well, that is a good note to end on sort of what the future regulation of the industry should be. So Bret, thanks so much for joining us today.
Bret Worley: Of course. Thanks Ed for having me. I appreciate it. It was fun.
Ed Keating: Absolutely. I’m your host, Ed Keating. Stay tuned for more updates from the Data Vault.
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