Richard Batenburg III, Chief Investment Officer, Cliintel Capital Management Group
Rick Batenburg III, Chief Investment Officer of Cliintel Capital Management Group (CCMG), is an accomplished venture capitalist in the cannabis space who has helped brands grow to national industry leaders.
https://cliintelcapital.com/
https://www.instagram.com/the_cannabis_vc/
https://www.linkedin.com/company/cliintel/about/
EPISODE TRANSCRIPT
[00:00:01] You're listening to Thinking Outside the Bud where we speak with entrepreneurs investors thought leaders researchers advocates and policymakers who are finding new and exciting ways for cannabis to positively impact business society and culture. And now, here is your host Business Coach Bruce Eckfeldt.
[00:00:30] Are you a CEO looking to scale your company faster and easier. Checkout Thrive Roundtable thrive combines a moderated peer group mastermind expert one on one coaching access to proven growth tools and a 24/7 support community created by Inc. Award winning CEO and certified scaling up business coach Bruce Eckfeldt. Thrive will help you grow your business more quickly and with less drama. For details on the program visit Eckfeldt.com/thrive. That's E C K F E L D T.com/thrive.
[00:01:03] Welcome, everyone. This is Thinking Outside the Bud. I'm Bruce Eckfeldt. I'm your host. And our guest today is Rick Batenburg. He is Chief Investment Officer, Cliintel Capital Management Group. We're gonna talk to him a little bit about the venture capital side of the cannabis industry. Obviously, as most of his listeners know, access to capital is a complicated subject and cannabis given the federal regulations around it. So we can talk a little bit about how venture capital fits into this. We're going to talk about where the capital needs are, where the opportunities are, what's happening inside the cannabis world in that space. We're going talk a little bit about COVID, 19. We're in the midst of COVID 19. And want to talk a little bit about how this is going to impact the industry from an investor point of view, from a market point of view, hopefully develop some ideas of where this industry is going to shape up later, half a 2020, 2021. So that is our topic for Dynamic's headed to have this. Always loved talking to the investment side. Obviously, it's a kind of a different view of the industry and obviously wants to becoming more important as the industry gets bigger, as matures as it needs more capital to grow in scale. So with that, Rick, welcome to the program.
[00:02:02] Thank you so much for having me. Bruce, you've had a pretty impressive list of guests so far. I'm honored to be counted among them.
[00:02:08] Well, it's a pleasure to have you. Thanks for taking note that. So what do we start with background? How how did you get into I guess, how did you get into venture capital and how did you get into cannabis? I always find there's a story there with folks that are in the space. So tell us tell us what yours was.
[00:02:22] Yeah. Yeah. So, you know, my entry into the cannabis space was purely economically driven, not because I had a taste or a distaste for the plant, but, you know, my background was finance. So I was a Merrill Lynch private wealth guy. Going to the IPO is in secondary issues, execution and some of the private equity deals we bring into our portfolio. So in 2015, we're live in. You know, I'm living here in Colorado and really saw the capital restrictive environment about five years ago and was like, wow, it's really hard for these cannabis companies to get any kind of capital. And that's really with the opportunity I saw was like, well, you know, if I can figure out a way to get these guys money and we can take a really strong position early in the market and really understand where we want to be here in five years. So, you know, I did not smoke cannabis until I was only cannabis gods down the street. And yeah. And as soon as I did, I was like, oh, god, I shouldn't be doing this for years. But I. Right. Exactly. I was like, oh, my gosh. But, you know, it was kind of enlightening for me to be involved in the cannabis space and just kind of see the passion and really understand where all that passion came from. And, you know, obviously, they want to be involved in a space that I was unwilling to participate. And so, you know, I got a dab pen and started hitting that. So I had I had no concept. I don't want to smoke flowers. So I had no concept of what being high was. So, you know, I started off smoking wax and chater and stuff. So I was like being hired, I.
[00:03:45] Out. It was hilarious. I was just a disaster. But it really taught me. You know, Tom, he's something about the plant really quickly. And, you know, moving into the venture space was a very natural progression. You know, my father, who we started the company with has been entrepreneur and venture and angel investor for my whole life. So, you know, I started as a three year old helping him balance checkbooks, sitting in his office as a kid my whole life. So I was very natural progression for me to move into venture. And I really appreciate the private side instead of the public side, because, you know, there is causation with the correlation. It's not just, you know, asymmetrical data just pivoting off of each other on investor sentiment, which is really kind of I got fatigued at Merrill dealing with that a lot. And I really saw an opportunity to make a difference and get more money into the hands of people that otherwise would not had an opportunity. And that is very gratifying for me to say that we've been able to empower a lot of candidates, 1.0 operators and kind of give them the business acumen and structure they need to to scale, which is probably exactly the path that we took with the clear, which is our you know, our flagship asset is really empowering a wonderful product and a wonderful group of management to come in and go, hey, guys, you know, we can kind of take you to the next level. We'll get you guys in more states. We can, you know, simplify your processes, eliminate redundancies and really get this in as many consumer product teams as possible. So that's been very, very fulfilling as well.
[00:05:05] Yeah. And tell us, just for those folks in the listening that don't completely understand why the capital side has been so difficult from a traditional venture capital point of view, why does cannabis become complicated in terms of being able to put money into the space, you know?
[00:05:19] So one is because THC has to be grown, processed and consumed in each individual state. What you've done is create all these microclimates. Where each different, even down to the county, has different rules on who can invest, who can be an owner, who can't be an owner. If you're gonna touch, you know, the THC component of this. So for example, in Colorado in 2015, you had to be a two year Colorado resident to own any part of a license or have economic benefit from owning a license, which means that only Colorado residents could invest into Colorado cannabis, which makes it very difficult. Again, you also can't have bank loans because you can't pay. You can make the industry and there was just no private capital that was coming in because the risk factor was Ohio. At least it was a perceived risk. And so that meant that we've eliminated 99 percent of the places that new businesses get capital. And really all that was left was, you know, honorable entrepreneurs and private lenders and private, you know, private equity investors who were willing to take that risk on personally. And so what I did was I created a blind pool private equity fund that had a manager at the head of it making the decisions that was licensed in Colorado and actually did this completely on a kind of called a bet.
[00:06:28] But assuming that the marijuana enforcement division would allow me to have outside capital if the people that weren't directing the capital as they had no control over the assets or the licensed entities, and then it was a fund that would liquidate eventually. And so I was I was correct. We became the first qualified institutional investment capital firm in Colorado that was allowed to hold license assets in the fund. So it's actually about a year and a half ahead of that legislation. It was just a you know, it's a good bet. And so what we did was we started raising capital into this blind pool and then buying assets in every different component of supply chain. Originally, you know, my plan was to go, okay, well, we're gonna go buy distressed assets or okay, we'll go fine. But in 2015, 2016, you know, there was distressed assets. But, you know, we'd walk in and go, okay. So we see your PNL and they'd look at us.
[00:07:12] And I said, sure, what's the P? And that's a oh, not that this rescue plan we're going to plan.
[00:07:21] And so what that really taught me is like, okay, well, you know, this industry so nubile and the people that are in it have such a high risk tolerance that they came from, you know, either the illegal business or, you know, they didn't come from traditional business, enterprise grade, you know, checks and balances or corporate governance. So we're like, okay, well, what we need to do is get our hands dirty. And so what we did is we went out and we bought assets in every part of the supply chain. So dispensary extraction, grow ancillary, you know, lighting, training, leasing, anything you can imagine. We had we owned a company in that space or still do. And the purpose was to really understand those businesses and create a dilligence baseline so that we knew what a good dispensary supposed to do. Right. So just and this maybe just so a good dispensary with 280 involved is she can make twelve percent if they're really doing well. Right. Which is not you know, that's not a lot of margin. Yeah. No it's not. So. So we really do that for every component of the supply chain and we kind of ended up going, all right, here's where we want to be.
[00:08:18] We want to be in brands and distribution. So companies that have the ability to break off the intellectual property of their product the way from the THC component so that we can reproduce it in multi states without having to move THC over state lines. So flour was out. However, extracted products, edibles, you know, distill it is it is a strong product category. So we have the ability to break off that intellectual property. So the branding and then the processes to create the product and then move that into different states without violating any interstate trade commerce act or anything.
[00:08:46] To see you kind of take the formula, you can figure out the sort of business formula of how that works, both brand and operational and just copy paste into new state find local biomass still like basically feed your engine and send up a new operation.
[00:08:59] You have it. Exactly. And you know, that's obviously, you know, it has its challenges, but we've had been pretty successful implementing that. So we just launched Nevada with flour, one that's our licensee out there. So, you know, they pay us a franchise fee for the territory and then we take a royalty and then we also sell them the packaging and hardware and all of the trappings and everything that's necessary to actually create the product and provide training, ancillary support, sales and marketing support. So, you know, we end up in the clear. Our portfolio company ends up capturing, you know, about thirty five to forty five percent of the gross sale price of those pens, which is fantastic given that we're federally compliant company without haven't actually touched the Tutsi. So that was kind of the implementation of our our proof of concept of the strategy. And so I think there's a big opportunity in cannabis in general is because we're in a capital restrictive environment still to this day, obviously without ubiquitous legalization, that there is an opportunity in the R&D space of cannabis that's been largely underfunded. And I'm going to say under executed there, there's been good ideas, but there just didn't have the business components to put together to actually get it in front of the consumer and really, really understand it or market it. And so, you know, much like that. And that's why we're doing the Cannabis Innovation Prize, because I do believe that there is some hidden gems out there that we can that we can flush out by providing an opportunity for people who wouldn't normally have had access to that type of capital to do development. So very excited to announce that we're giving away twenty five thousand of our investment and the chance to develop, you know, your cannabis. Product with clear.
[00:10:30] So, yes, interesting said that that because of the lack of kind of research and development using this kind of prize format to tease things out of the woodwork or tease things out of the industry, that might be interesting investment opportunities. Guess what? What are you. When you look at the entrance, are that, you know, people that are going to apply for this. What are the things you're looking for? I mean, both business model as well as, I don't know, just kind of other other qualities about the business, about the solution, about the team. What are the areas that you're really looking for?
[00:10:58] So there's three main things that I always look for in any kind of deal that's worth doing. And number one is that the CEO has an emotional relationship with the success or failure of the company. Number two is that the CEO can do everybody's job in the company. And this is really just a function of understanding small business. And, you know, things get hard, fast, you know. And if you can't step in and do who's ever job and the ball stops because you lost a person or they're not doing what you want him to do, and that develops an issue. And so someone who is emotionally invested in that success and can do everyone's job and the company. Those companies tend to go further, faster. And then number three is understanding their numbers down to very, very my new per product cost and what it takes, what they're break-even, you know, really understand how they make money in an intrinsic way. Not at all. Oh, let me look at that. Let me look at my projections way. But how much does it cost to make this widget and how does it. That's something I look for because it shows that they've they've done their homework and research and really understand what it's gonna take to get in the black. Yeah. So the three main things I look like for any investment, I just cannabist obviously do some stuff outside of cannabis as well. But you know, from a cannabis for expected and innovation perspective, you know, the things that I'm looking for are delivery methods and on-set methods. And I hope to be surprised and charmed by some of the innovation that I've seen.
[00:12:11] So this is really how the product should deliver, delivers the CBD, THC, triptans, whatever or whatever you're trying to deliver into the person like how it works, how quickly it works, how stable is it, how regular is it? How consistent is it, those kind of people that I'm solving those kind of problems?
[00:12:27] Absolutely. And I would say that that is just my own internal I think that there's an opportunity in cannabis in that space specifically because right now, you know, with edibles and bake, I mean, that's really the only innovation that's happened. And I think that there's just a tremendous amount of different ways to get this into your system that, you know, I think smoking it and vaping it are begin to lose market share per capita against edibles in the new called The New World of Colette and the Vape Scare.
[00:12:53] So you think just because of the health concerns associated with with any respiratory kind of challenge? Yeah, I do.
[00:12:59] I do. And I think that there's a tremendous opportunity in the baby boomer market.
[00:13:03] You know, they're taking handfuls of pills and TFC does not interact with a lot of stuff. And it also is a really stable and non addictive painkiller. So I think that they're going to be looking to those and they're very used to taking pills, not but the ability to control and regulate those types of drugs when you take them orally is a little bit more difficult and it's a little harder to kind of dial in.
[00:13:25] Yeah, well, it's always the classic problem. It's like someone takes an edible note. I don't feel anything. So they take a second and they're just on the floor sucking.
[00:13:33] And I shudder to think how many, you know, THC or how many people that had that experience. And now they don't benefit from the cannabis plant when they would have. And again, that's that's my own bias. That's when I you know, I think that there's opportunity for, you know, a way to get this into our system that is clever and lower risk to our overall body composition than vapor. Or, you know, I've seen nasal sprays, all kinds of all kinds of interesting things.
[00:13:58] That joke the joke that if we if there's a surface or a hole, we'll figure out how to get cannabis in it.
[00:14:02] That's why you got it. You got it. Right. Right. And so, you know, I if I had the answer, I wouldn't have to do the prize, I suppose. So I'm surprised.
[00:14:10] Yeah, I think it's a huge segment.
[00:14:11] I mean, we've had a few people on the program, you know, talking about some, you know, some around kind of product innovation, some amount really the scientific understanding of everything from your your gut biome and how that influences things to, you know, lots of interaction, you know, other things you're putting into an entourage or facts of other things you need to include at the product to actually make it absorbable and effective. Have a simplification process for your super finicky. Yeah. And so I think there's yeah, I think you're right that there's a lot of innovation to play out in that space. I think just as an investor would it would have you noticed, I guess compare and contrast for me a little bit of kind of other industry is kind of how things work.
[00:14:45] What you've noticed kind of the types of businesses, kind of the challenges they have versus cannabis, that's types of what you see, how the industry set up, the type of companies that are out there, the founders, the CEOs, the problems they have. I mean, what's kind of similar and what's different when you are looking at from kind of a v.c lens on non cannabis industries versus cannabis?
[00:15:04] Sure. You know, it's interesting because a lot of the same problems exist in cannabis and in other spaces from a business execution perspective. So things like corporate governance and things like making sure your accounting is done correctly and really strategically planning how you're going to allocate your resources. We see that a lot in small businesses, people that are, you know, and to their credit, they're running hard and fast and they're trying to get it done. And, you know, there's. A whole lot of, you know, sitting down and strategically planning all of your resources out and you've got to pivot quickly, so a lot of chaos and because the industry was kind of born at once, you know, everyone is kind of in that same place. Give or take a few years depending on what state they're in. So where cannabis kind of departed from that typical oh, you're in a call it a you know, whatever a tech company. You know, usually when you raise your first round of capital, you're going to a venture guy or you're going to a bank or you're going to if you're going to somewhere, that's going to force them to formalize their business strategy and plan. And that didn't happen in Canada. So what's interesting is that, you know, because the capital restrictive environment, a lot of these companies expect cannabis 1.0 operators or even to auto companies got capital that just made these ridiculous goofy debt deals like anything. You can imagine that napkin deals that have just really kind of the chickens have come home to roost on those and a lot of spaces where just bad deals are being cut. And that's something you don't necessarily see even in you know, you'll see it once in a while and in small cap stuff.
[00:16:30] But it was something that was rampant in the cannabis space, and it was because there was not a whole lot of financial leadership. And then, frankly, there was a lot of financial guys that were taking advantage of the cannabis people because they really just didn't understand what they were investing or didn't understand the structure in which they were investing. Or, you know, the cannabis guys just didn't understand the risk that they were they were exposing their company to by doing these deals. So I would say that's a huge, huge departure and a challenge for the cannabis space. It's because there was no kind of formal here. But follow the bouncing ball and do your your friends and family do your Syria, you know, around a you know, do you be that's presented some challenges as far as from a venture approach and from a, you know, a valuation approach, you go, OK, well, we got to assume that your numbers are correct. But, you know, we take everything with a grain of salt. And that's something that's definitely been different in the cannabis space. You know, I would say that the licensing aspect of this business is also a huge difference in cannabis, because changing assets, changing hands is a really litigious and difficult process to go through the state regulators. So, you know, it's not as simple as selling a House seat. We're talking incredible amounts of disclosures and incredible amounts of paperwork that need to be done for for a cannabis license to change hands, which kind of slows down the velocity of the deal making.
[00:17:42] So obviously, I mean, we know that the regulations are challenging and cannabis because they're different everywhere. You know, that's something that can be navigated. It's not something that is impossible to navigate. However, it is slow and it is litigious, which makes it expensive. Said that has definitely been a challenge for a lot of cannabis companies because there's a big misconception in cannabis that everybody's making a bunch of money there yet and nobody is. It's sort of hilarious. You know, everyone outside of cannabis thinks that everybody's just crushing it. And between two 80 and between, you know, just the regulatory challenges and the challenges of face, any business is simply not true. A lot of cannabis companies are really struggling. And then on top of that, not understanding kind of their financial situation or capital strategy makes it even more challenging for them to kind of understand where they're at and evaluate their companies and raise money. And so that has created a lot of opportunity for guys like myself to come in and really say cherry pick for lack of a better term, but being able to really identify assets that have been undervalued and not usually had anything to do with the actual product itself. Yeah, exactly right. It has everything to do with. Exactly. Exactly. So you know, we don't shy away from that really become experts at it kind of unwinding or making the deal work and creating corporate governance and creating a structure that allows companies to grow. And really that's really become our role. You know, we're the we're big brother kind of holding their hand a lot of times going, okay. We're going to get a bank account out.
[00:19:05] Here we go. And we're going to set up, you know, monthly meetings.
[00:19:10] And clearly we're going to a weekly management meeting. You're going love it. It's not me. Standing at the register that has been fulfilling can be frustrating sometimes. But I would say for the most part, everyone in this space is very enthusiastic and passionate and they're very dedicated to making this work. So if you remember, you know, one of the first things that I look for is, is there emotional involvement in the success or failure? And I can tell you that there has not been a single person that I've met in this business that has pitched us a deal that has not been so passionate about it. And so personally invested into the success that that is definitely a difference. You know, I see it in a lot of other spaces. People are a little less passionate about about their position. You know, they're in it's a they think that they think they have an idea of an idea they liked or something. And they are very passionate about making it in cannabis. And I think that, you know, it's a double-edged sword. But I would say that I would way rather have somebody who is passionate than somebody who has a great business idea but doesn't really care about it because the person who really cares about it is going to go way further. There is definitely a huge difference.
[00:20:10] So tell me, you know, we're recording this mid April here and we're in the middle of this covered 19 pandemic. You know, obviously a horrible situation from a health point of view, economic point of view. You know, the cannabis was, you know, in many, many states declared essential services is staying open. Know obviously with. Processing or retail kind of dispensary setups and things like that. What do you think the implications are going to be for the cannabis industry going forward? And what do think for some of these companies that, you know, we're kind of coming into this with a little financial distress? You know, maybe they didn't quite capitalize well enough. They were looking to raise money to finance operations for a while. What's going to happen with some of these folks? You know, is there gonna be a big M&A process here? There's going to be some roll ups. Is it possible, given some of the federal or some of the license regulations and limitations? And so what's your sense of how the impact is is going to play out on us?
[00:21:01] So, you know, the first thing that changed was the way that people are making buying decisions. So I always try to bring us back to member where we're in the consumer products company, you know. And so the way people are buying cannabis fundamentally changed overnight. Right. So once you got people out walking into a dispensary going, hey, watch, they get changed to whatever that's available on their site. So let me jump in on. So that's it. And though that sounds like it's really a huge change in the way that people are making buying decisions. And we've essentially moved from a, you know, in-person sale to a digital sale overnight. And I can tell you, there was a lot of companies that were not set up to do that. And that definitely affected sales in general, I think, across the entire industry. So, you know, sales have been fairly steady. We saw a quick bump there when everyone got panicky.
[00:21:47] Mike, you heard Mike, Atavus. Exactly.
[00:21:50] So that was a quick bump. And then what end up happening was a lot of dispensaries were kind of stocking up for 420 already. And so we saw dip and then things kind of normalized again. But I think that what happened was the 420 gain, along with the seasonality of cannabis, was dampened by the Corona virus. That actually makes the growth of the sales look very stable, which is sort of hilarious because there was a huge you know, there's a huge headwind pressure and there's huge tailwind pressure from both sides. So but it ended up kind of being a net zero. I will say that I think that there will be more cannabis users at the end of this. You've got adult children home with their parents now. And, you know, there's been a major destigmatizing hesitation. So I think we're gonna see quite a few more cannabis users at the end of this from their adult children and an immense amount of kids home from college. And I know you're here. Try and you know, they got nowhere to go.
[00:22:38] I think, you know, the consumer side there.
[00:22:42] I think there's gonna be more users. Point blank, there's just going to be more more users who are there come back to the plant or or or training for the first time. So I think that's a huge it's gonna be a boost for the industry and come a crook and a call it in the next year, you know, we'll see the kind of effects of that. You know, per capita usage, there's definitely going to be some kind of some things that don't make it. You know, I've been saying this for probably two years, but I absolutely despise the CBD space. And it's not because CBD isn't good. Nutraceutical, but it is because there is an oversupply. Oh, yeah, horrible stuff. And there's a lack of information. It's under demand. It is under understood. And there's no double blind placebo controlled testing that can really validate any kind of real pharmaceutical application. Right. So for all intents and purposes, this is like a new aloe vera. So that market has been compressing and I really expect it to continue to compress. And really just because there's so much of bioavailability and there's so little market for it because there's not a lot of really large companies have been able to achieve scale distribution in a way that's established any kind of brand awareness with the consumer on a whole and in a compressing market that we're seeing here in the economy, you know, nutraceuticals and kind of those types of buyers are some of the first things that people stop buying.
[00:23:54] And we're already seeing that. So I think that there's maybe a lot of CBD businesses for sale. And I'm already seeing that, actually. And it's honestly because they're not selling stuff, but it is because, you know, there's ten thousand different CBD have products on Amazon alone. So it makes it a pretty tough market to make money in when there's ten times the supply than there is demand. However, I do think that there has been hemp and CBD was the call it the fake portfolio, the easy entry into the cannabis space without exposing yourself to too much risk. So when the farm bill passed in 2014, everybody I know that was thinking about cannabis went and bought some sort of a grower or a farm or an extraction or so, you know, and because the perceived risk of federal prohibition, of THC, CBD being completely legal, it seemed like a natural entry point for people who are not comfortable with that risk.
[00:24:43] But what they really did was oversupply in a market that had no real consumers. And so there's been good work done in the CBD space. But transitioning into the THC space, as I think that many of these guys imagined they would, is a much more challenging process than just going to OK. We're going to see THC now as I work. There's so much regulatory barriers to entry. And then on top of that, getting into dispensaries, especially in developed markets like Colorado, is a very challenging process. It's not an easy thing to do and there's a lot of capital upfront capital that's required to even attempt it. So because of this compressing market, because there's a bunch of investors, let's say that they were I'll call them, you know, tip of the spear investors into cannabis from a institutional perspective. A lot of those institutional guys got involved. Are the ones the first movers got involved in hemp, but not TFC? Yeah, and they're about to get crushed if they haven't already. And so that couple, along with the collapse of the multiples of Canadian publicly listed companies, which is again, totally fair.
[00:25:41] Right. Like those valuations.
[00:25:45] There's a lot of investors, the bad taste in mouth and especially the ones that we're willing to be the first movers. So again, we've created this vacuum of capital between a compressing economy and poor performance from the stocks that do exist and no new money coming into the industry. So the next call it. I'll say three to nine months, you're not going to see a lot of transactions happening. Right. Because M&A is not driven by collapsing companies. M&A is driven by growing companies. Right. So there'll be a lot of stuff for sale, but not a lot of stuff that are going to be big blockbuster deals right there. Just be like, oh, well, we'll pick up the IP for a quarter million dollars. And if you don't like it, go pound sand. So you'll see a lot of those transactions, I think, and especially on the CBD side. You know, anybody that has good IP on the CBD side may get bought up by THC companies if they've got tech or they've got intellectual property that is applicable to the THC side. I can tell you that that's one of my strategies is looking at, you know, some people have done things in this space that may be applicable, but for the most part, it's going to create a really challenging environment for a lot of smaller businesses that don't have the you don't got the juice to make it through this. So they'll either do one or two things about a business or they'll take on toxic debt, convertible high interest debt that'll end up biting them in the ass.
[00:26:58] Exactly. So that, you know, it's not all doom and gloom. I would say that taxi companies that do weather this storm are going to have an amazing opportunity for the next 12 months to really capture some market share because, you know, with no new products coming in and no new competition coming in, you kind of have an opportunity for the first time and cannabist that the train's not going faster than you could run. So really buckling down, focusing on operational efficiencies and sales is going to be key to a lot of these huge companies that are trying to get on their feet again after all the regulatory changes and prohibition of flavored day just every day. Something goofy. Yes. Fascinating times. It absolutely is. And I think the speed of information is is really dictating how quickly Steria can get can be damaging to real businesses. So, you know, I saw that a lot when in my mayoral days in the public markets when there was bad news that was completely uncorrelated to a company's performance or abilities, but it was still affecting the stock price because investor sentiment shifted. And, you know, you're definitely seeing the impact of that on a global scale because information is moving so quickly now that investors are making decisions as fast as they can.
[00:28:02] Yeah, yeah. It's going to be a fascinating 12, 24 months here as we're gonna get through the sort of the immediate effects of covered and then companies sort of find their footing or don't find their footing and, you know, either get bought up or go out of business. And then the ones that survive. Yeah, I think I have a great opportunity. I mean, I think there's there's gonna be a strong demand for cannabis. I don't think that's going to shift a whole lot.
[00:28:21] And if you can keep your bearings and keep your business going six months out, you probably have a pretty good shot at some good growth for twenty twenty one if you've done it right.
[00:28:29] Totally agree with you 100 percent. Yeah. You know what's interesting is that, you know, if you look at just straight sales, so if you're just looking at, hey, what are the sales look like in cannabis, although we've seen this kind of fluctuation in valuations. SALES have been on a straight trajectory up, you know, across the board. Synthetic people are more people are smoking, more people are eating it. And not only are more human beings doing it, but the people who are doing it are doing more of it. So, I mean, those are all good indicators that this market is here to stay. You know, something you mentioned earlier about being deemed essential, businesses think that that really solidified the the fact that cannabis is here to stay. You know, if anybody was really worried about, you know, some sort of regulatory shifts happening, I really doubt they're going to see a lot of federal movement in the wrong direction at this point. For the last three years, even with a Republican in the White House, we've still seen positive legislative moves and depends on America follows the normal oscillating right, left. You know, we have a Democrat in the White House next term. And I would expect legalization to again, accelerate. So those are all good things. You know, opening up markets to new consumers because people are using this using this product, whether it's legal or illegal, which creates an amazing opportunity and an amazing amount of call it priced in risk that we know people are using this right now, like we need to go into a new state and then, you know, teach everybody what in and out is is like dog.
[00:29:47] He'll know what weed is likely. So there's a defined market. There's a there's a bumstead, there's a user base already. We're just gonna take them taglit to the legal side. Exactly. Fascinating. RICTUS, what a pleasure. If people want to find out more about you, about clientel, about the prize, what's the best way to get that information?
[00:30:03] You know, I I post all the media we do and all the kind of our strategy on LinkedIn, if you want to see what I'm up to personally. The cannabis vc is my Instagram handle and then just finding about the cannabis innovation prize is really going to become down to the timing of the infused product conference. So I will be sure to keep our social outlets updated with that timing. But you know, we're always looking at deals, so if there's anything you know, if you get your spurious submission. It's something we want to move on, we will move on it. So I'm excited to see all the different things that people are putting together. I have a great admiration for entrepreneurs who are willing to take that courageous step and try to do something. So, you know, Fortune favors the bold. So you mean what you got? Let's see if we can make some happen.
[00:30:43] Awesome. I’ll make sure links are in the show notes here so people can click through and get back. Yeah, this is be great, Rick. I really appreciate the time. You know, fascinating time that we're in. You know, obviously horrible with a pandemic. But from, you know, what's going on in cannabis is really going to be just telling to see what happens over the next couple months. And really, I want to find out if I'm right. Definitely. Well, we'll do a follow up episode, go through our own agency, let you know. Otherwise, I got to hide. Good. Well, thank you so much for taking the time. I really appreciate it.
[00:31:10] No problem at all. Thank you so much. We'll talk soon.
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