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

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Rena Sherbill: Hi, again, everybody. Welcome back to the show. It's great to have you listening with us. Today, we have on Jesse Redmond who many of you may know from Twitter Spaces, who you may know from Seeking Alpha's CEO Interviews, where he interviewed many cannabis CEOs and CEOs of other sectors as well, but many cannabis CEOs. And Jesse is a former hedge fund guy, finance guy, worked at Franklin Templeton, ran his own dispensary. I'm going to let Jesse describe more of his background and how he came to the industry and super excited to have him on.

He has a lot of great things to say about the industry, a lot of great takes and where companies are at, where we should be focused in terms of our portfolios, our timelines. How he's thinking about SAFE banking, and what that means for stocks, what that means for MSOs, what it means - how he looks at ETFs, comparing the different ETFs and where investors should be looking depending on what their focus is on.

So, a lot of great insights from Jesse really appreciate him coming on. Check out his Twitter. Check out his articles on Seeking Alpha and Green Giants. Hope you enjoy it. We'd love to hear from you if you have any questions or things we should talk about with Jesse next time he's on, how you're thinking about the industry either similarly or differently would love to hear from you. Hope you enjoy this one.

Alright, Jesse Redmond welcome to the Cannabis Investing Podcast. Welcome back to Seeking Alpha. Nice to have you on.

Jesse Redmond: Great to be here. Long time listener. So, I am flattered and excited to be here.

RS: Long time listener, first time caller.

JR: Exactly. It's just a radio show, right?

JR: Kids ask your mom about radio shows.

RS: I'm going to tell my grandkids this is radio. So, we've had, you know, in the intro, the audience will hear that, you know, we've had you on as host of CEO Interviews on Seeking Alpha. You also write for us at Seeking Alpha or you write articles at Seeking Alpha. I don't know if you write them for us. But you also have your Green Giants Newsletter. You also host like many Twitter Spaces. You also have a background in the industry.

So, all of this is to say, I think that people that have followed you might know some, sort of your or some sense of your background and kind of how you got here in the different hats and parts you've played in the industry, but - so I don't want to rehash that for anyone who already knows and for any Jesse followers who are just listening to this episode. But if you want to give, like, a really brief rundown of kind of what brought you to the cannabis industry and how you're looking at it and kind of what place you feel like you have carved out for yourself, want to continue carving out for yourself, want to carve out for yourself, would love to hear that?

JR: Yeah. So, I've had a bit of a strange life and that's, I went to school in Santa Barbara and I studied economics, and I kind of let's say aggressively pursued a career in finance for the next, you know, 20 years or so. I started working at Franklin Templeton. I worked at Fisher Investments in the Bay Area, and then co-managed three different hedge funds over the next decade or so. In 2016, my dad had some health problems and cannabis just proved to be a massive help for him.

He was kind of going down the opiates route with pain management that didn't really get him anywhere. He kind of made things worse in some ways. And he found cannabis. So, I started seeing a cannabis doctor in LA, and I saw his condition, you know, just sort of improved tremendously. And I have always been a casual cannabis user, but never was really into the medical side. It was just more a guy who preferred that over alcohol, but didn't know a lot about cannabis. And this was at the same time that California was in the medical area they're talking about going to Prop 64, which we have today. And so, the combination of being a bit burnt out on the finance side, I've done it for 20 years.

Seeing my dad's condition improve on cannabis and seeing a potential opportunity in cannabis when California moved from Prop 215, which is medical to Prop 64, I kind of through myself head first into cannabis and closed the hedge fund stuff, started a dispensary, and ran a dispensary outside of Santa Barbara for about three years or so. Once the Prop 64 rights became clear and in effect, I realized that that wasn't going to be as profitable as I would have hoped under the new regime. You probably know California has really high taxes, high licensing fees, lots of regulation.

So, I decided to move on in that business. And after having three years of cannabis experience, I thought, well, why don't I blend that cannabis experience with the investing experience. And that's kind of how I got into cannabis investing. So, around 2020 was when I started focusing heavily on that. And spending all my time first on the publics or on the private side, helping some friends with some deals, and then got really interested in the public space, analyzing MSOs, started making some investments for some family offices that have worked with the hedge fund side into the cannabis space, built in custom portfolios.

And that's how I started the website, Green Giants, was a place to kind of share my thoughts about the industry. Just kind of get my name out there a little bit. But more than anything, just trying to share my thoughts. Sometimes I feel like writing things is helpful and I still do that today. I think I've written maybe 50 things on greengiants.net and that's been free for the vast majority of time. So, these days, I do that, and I have a consulting business called higher calling, consulting, which is pretty simple.

The goal is to help people find the best cannabis investments. Those could be high net worth folks could be smaller institutional type folks, which is the real sincere intent to help people find what I think will be the best cannabis investments for them, and through those things, just trying to live at that intersection of cannabis and investing. You know, I did the investing thing for 20 years, did the cannabis operating thing for three years. And I think hopefully that's given me, kind of a unique perspective on how to make money in cannabis.

RS: What's kind of been your favorite, kind of role to play in the industry? Is it where you're at now or what's been your kind of favorite thing to do here? Or do you feel like they've all been leading to where you're at now?

JR: I think to an extent, all definitely leading to where I'm at now. Like, it's a bit cliche to use phrases like this feels like where it was meant to be. But I think that kind of through loving the investing so much, stuff, so much, and then seeing my dad's experience that it did kind of put me in this place where I can uniquely help people. And I do want to make money by investing in cannabis, but I feel super great that it's also working around cannabis as well. Like, I'm super into the wellness aspect. I'm a user, my family are users. I'm a big believer in the power of the plant.

So, I love not just being on the hedge fund side and making money off-of, you know, fancy strategies that have nothing to do cannabis that are just about making money, but now also trying to make money, but doing it their way. I think the more cannabis, you know, the better. I think some people don't like MSOs or don't love their products, as much. And I can understand, part of that, but at the same time, even if it's MSO cannabis, which some could argue, some of it isn't the best is the craft stuff, but still it's going to help people a lot.

And so, I like combining those, I like combining those two elements and I like sharing the stories with people about how to - I guess sharing the stories and sharing the techniques around cannabis investing. You know, sometimes I'll spend a ton of time, you know, looking into, you know, researching certain names that have deep opinions into tons of analysis, and I like that, but I also just like having conversations, like we're having conversations today or talking to investors about years of difference between Canadian stocks and U.S. stocks or, you know, here's how I would handle a portfolio in your situation.

So, I equally kind of like the investing part and also the people part of having the conversations around the investments.

RS: Yeah. Who's your favorite person that you've talked to in the industry or the best conversation that you've had?

JR: Are you are you excluded?

RS: Nice. Nice, Jesse. I am. Yeah. I am, I am.

JR: I like the recent spaces that I did with Jason Wild a lot. I think Jason is a real charismatic guy in with his background with JW Asset Management and with TerrAscend (OTCQX:TRSSF) and I think Jason and both [indiscernible] both are super interesting. And so, I'd like that conversation a lot. I think Graham is a really charismatic guy as well. You know, Graham lives not too far from me, and so I've got to know him a little bit. And I like him and Kyle both and I like the Glass House (OTC:GLASF) story. I think California is super challenging, but I think those guys are doing a great job with it. I think Graham is a real charismatic leader, and I always enjoyed my conversations with him as well.

RS: Yeah. Real charismatic leader. I also like what they're doing at Glass House, and I also really like what he has to say about the industry we just had about, and I feel like and I know he's on a bunch of podcasts, and I feel like he always has really insightful things to say and isn't just like he's not like a stock answer, kind of guy, and I also felt that about Kyle when he was on CEO interviews.

So, will you share with listeners, kind of how you're thinking or how you've thought about building your cannabis portfolio/how you advise people to look at their cannabis portfolio or choose stocks and or ETFs?

JR: Yeah. So, I think that's always a moving target, right. And so, I think that today, I had a conversation with Abner Kurtin, the CEO of Ascend (OTCQX:AAWH) and he made a comment that I think about literally every day and probably repeat to somebody else once a week, which is that in today's environment, it's not about finding a thing that's going to go up 200% rather than a 150%. That's about avoiding the ones that are going to go to zero. And for people that don't know Abner. He was CEO of Ascend, now is Executive Chairman. But before that, he was a Managing Director of The Baupost Group and kind of viewed as a pretty legendary investor.

And so, I think Abner has tons of investment experience and also great perspective around cannabis. And I really take that too hard. That I think there's a lot of risk in some of these stocks today. I think some of that's realized, but people think some of that's less realized, but I think that, when looking at things today, I tend not to try to find out what that's going to go up the absolute [most] [ph]. So, we're at a risky period, right now in the sense of with SAFE Banking. We don't know SAFE Banking is going to pass or not. And I think there's - the consequences are different for different types of operators it does or doesn't pass.

So, take a business like, you know, Ayr Wellness (OTCQX:AYRWF), for example, which has a lot more debts and would, you know, really benefit from SAFE Banking or [Jushi] (OTCQX:JUSHF) [ph], for example, and both those names went up a ton on the Biden news. And I think that, if we do get SAFE, you'll see a huge bounce at those types of names. But I think the flipside is that those types of names are also a little bit riskier if we don't get SAFE. So, if you want to be a real active trader, I think you could get clever and picks up those Tier 2 and Tier 3 type names, and you'll probably do better than the more conservative names. But my perspective is that at this stage in the market cycle that you're probably best off focusing on the Top 5 or maybe even the Top 10 or look at the Top 10 and pick your favorite 5. Something like that.

I think all of the Top 5 have some sort of challenges associated with them. Even though I own most of them, I think they have, you know, I think everything has some, you know, pluses and minuses these days. And I think when you look at the Top 5, you know, I think, you know, probably my favorite name, you know, is Green Thumb (OTCQX:GTBIF) due to the footprint, due to the balance sheets. But at the same time, Green Thumb, you know, just had three members of the board directors resign, their general counsel resigned.

And so, even the ones that appear to be the most stable, the most proven operators, every single one of them we could go through has challenges. If you look at Columbia Care (OTCQX:CCHWF) and you look at Cresco, those are solid businesses. I think Cresco more so than Columbia Care, but they have a merger planned where they had a lot of divestitures over lapping assets to sell and those overlapping assets have gone down 30%, 40%, or 50% since the time of the merger.

At the same time, the debt has just been going up. It's just getting more expensive. And so, I think every single one that we could go through between, you know, Green Thumb, between Curaleaf (OTCPK:CURLF). We talked about Columbia Care. We talked about Cresco, you look at someone like Verano (OTCQX:VRNOF), which was - if we talked a year ago, that was really the darling, that was really the blue chip name.

You look at Verano today, and people have, you know, some - have some concerns there, you know, they're [indiscernible] large tax liabilities, which makes some people nervous, you know, that's something that's become a common funding technique these days, is rather than borrowing money to accrue a tax liability as a way of getting that leverage and Verano has been using that either more than others.

They also had the Goodness deal that they broke off where, you know, they - I think it was something of $13 million either way. They're both, kind of suing each other looking for fees for breaking that deal. And, you know, Verano essentially decided that they didn't want to be New York or Minnesota anymore, so they decided to break it up and get that back to goodness.

So, the point of all that being that everything has some challenges these days. Everything has some challenges, but there's also a lot of upside in these names. And my preference at this point is to pick on the ones that - are to pick, the ones that I think have the greatest possibility of surviving, and kind of avoid the ones that maybe are the riskier ones in this environment because I think there's enough upside in the blue chip names that you don't need to fish around in the riskier names.

Now, if we get SAFE and things run a bunch, you know, next year or, you know, late this year, but run into next year, we might look at these names and have a different opinion, but that's kind of my current outlook. Is it be a focus big on the Top 5 or look at the Top 10 and pick your favorite 5.

RS: I want to ask you also about ETFs, your thoughts about ETFs, but I want to pick on a couple points that you made that I imagine investors are also curious about first is the GTI resignations. That was like pretty surprising news. What are your thoughts on that?

JR: My thoughts are that I've heard a lot of speculation about why that occurred, but I haven't heard anything that's a, reliable or that's for sure credible; or b, I feel comfortable repeating. And I haven't seen - people that I know that are more informed than I am, they haven't sold any GTI based on this. Maybe they didn't love it, but they're just kind of stuck with it and I have heard that from multiple people. And so, it doesn't - it makes me slightly uncomfortable, but not to the point where I've taken any action or sold the GTI for that reason. So, I would still give GTI probably my highest ranking and just saying that's a risk I have to live with right now.

RS: Was that a surprise too?

RS: And also, what else did I want to pick on about - Verano. What are your thoughts about the broken Goodness Growth deal? Did that come as a surprise to you? Do you agree with it? Costs notwithstanding?

JR: Yeah. I would say it did come as a surprise to me. I think it was a surprising thing, but when you look at the assets, I, you know, I think that if you look at New York, people have been - people originally thought New York was going to be a great place in which to invest. And then we've seen concerns about it at first. Ascend decided to get out, if you remembered that Ascend, you know, walked away from their deal. And I think that people are largely depending and New York maybe isn't going to be the market they thought that it was going to be.

We saw the recent regulations coming out that potentially for the existing, the MSOs, they were called ROs. And with that group, they were talking about not being able to apply for a license until three years after the first adult use sale. And so, they're really pushing the social equity in New York and it comes at the expense of the MSOs. And so, I guess I'm not surprised, you know, thinking about it now, but I'm a little surprised it took the risk of breaking that deal. I think if I were down, I could say, I understand it, but I can't say that I necessarily expected it to happen.

RS: Do you have an opinion of how that plays out?

JR: I don't. I think it'll take a while to play out in court, and I don't have a strong opinion about which way it's going to end up.

RS: I'm going to ask you two more questions about MSOs while we're on this topic. You mentioned Abner Kurtin, you mentioned Ascend. I know you're bullish on Ascend. Abner was in the news for not great reasons, something about domestic violence, I don't know if it was - he was charged or if the charge wasn't, but it was in the news because of that. I think the change from CEO preceded that, or was it after that?

JR: It was after that. There were the charges like with his girlfriend and those charges were dropped. Abner was CEO at that time since he has moved on to Executive Director and Frank and Dan became Co-Presidents [Ed: CEOs] and so, kind of same group, but realigned the responsibilities a bit and now they're looking - now they're in the midst of a CEO search, which they thought could take, like, six to nine months or so.

RS: Do you, like, have an opinion on that? Does that affect your investing philosophy? Do you feel like this is a personal issue and that, you know, kind of that's why - that's why the change happened?

JR: Yes. So. I don't like really anything about it. You know, I don't - even though the charges were dropped, you know, I have a sister, I care about women. And even if that wasn't true necessarily, I don't like the insinuation of what potentially happened there. So, at a personal level, I don't think it's great at all. And also in terms of the business, I don't think it's necessary - you know, it's hard to view it as a positive, right?

And so, my initial reaction was pretty quickly. I was it was within a couple of days was that I stepped away from Ascend for a while, just because I didn't - there wasn't enough known about it at that time or how the organization was going to handle it. And so, I don't know how long I was out of it, a month or two and that I got back in a few weeks ago before earnings and got kind of more comfortable with how the situation was going to play out with Frank and Dan and what Abner's role was going to be and how they were going to find new leadership.

And so, I've gotten back into Ascend with a smaller position, but it did sit it out for a while, kind of while it does cleared. And I think that that's - that they have, you know, fantastic assets, especially in New Jersey and they're really an ignored, you know, really an ignored stock. You know, they're one of the only names I can think of that's not in NYSEARCA:MSOS . I think if you go to the Top 15, they might be the only one not in MSOS, but certainly of the Top 10, the only one that's not in MSOS. And that's where we can talk about that, but that's where a lot of capital from the industry comes in. And I think just broadly Ascend as an under owned stock and underappreciated story.

I felt like they're getting some good momentum before the [Abner news] [ph]. The [Abner news] [ph] probably, you know, to stop that for a while. But I still think it's a great asset, and I think there was one of the few that will continue to see growth over the fourth quarter due to some new stores opening, especially the third one in New Jersey. So, I'm still bullish on the Ascend story, but it would be good if they could nail down a full-time President and kind of bolster the leadership team a bit. But during this weak period, that could also make them a more likely acquisition target.

I've long thought that they were a great fit for Trulieve (OTCQX:TCNNF) who doesn't have you know, those New Jersey assets. And given that they don't also have a CEO, I said searching for President, they're searching for a CEO technically. And given that they don't have a CEO and Abner is not married to running that business, he said that for a long time, they would be open to being acquired and have the person doing the acquiring become the CEO.

So, that's why I kind of thought, you know, with Trulieve and Kim being the CEO of them having almost no overlap in terms of their footprint. You know, I think a situation like that gets more likely while they don't have this leadership just because it's an easy situation to plug into.

RS: Do you feel like optically being acquired at this point is not great in terms of what he just went through and the fact that Abner while not CEO still is, you know, involved with the company?

JR: I'm not sure what people's perspective on that is. And I don't know if they got acquired and what Abner's role would be in the combined entity. I just know that Abner is in this as an investor. First and foremost, he doesn't want to necessarily be a lifelong cannabis operator. He wants to be a successful investor. Those are my words, not his. So, I think that if somebody came in and bought out Ascend, you know, he has a huge ownership stake in Ascend that maybe he might be, kind of happy to go run the Kurtin Family Office and let somebody like Kim be able to handle the day-to-day.

RS: So, it's a perfect segue because my next MSO question was about Trulieve, and, you know, they're integrating Harvest right now and some of the cash. Julian Lin was on a couple weeks ago talking about how, you know, he imagines that Trulieve perhaps might want some of that cash that they've spent on Harvest to do other things, but alas, you know, the integration is real, which is also not to take anything away from them closing that deal, you know, and to see where that takes them. What's your opinion? And, I guess, a, the Harvest deal and also where Trulieve is sitting in this environment?

JR: Yeah. I think, I don't know if they regret doing the Harvest deal, but in the near term, it certainly hasn't, you know, given, you know, it certainly has hurt their things like EBITDA. I think they will be a little bit more than they expected. I think they've - I think there's been some challenges, more challenges with the integrations. I think Arizona is not a market that's quite as good as Florida.

And so, I totally understand that looking to push into new markets, and I'm not going to say it was a bad decision because I think it's gets way too early to say that. But I think that's been maybe I think to the investing community, maybe that's Trulieve themselves, but they're the investing community, maybe that's been viewed as disappointing the way that's impacted financials in the past couple of quarters. But when I think about Trulieve, I just think that they're going to go through a period like last quarter. I don't know if the numbers in front of me. But I think, you know, there weren't a lot of new assets turning on the environments in which the operator is seeing some price compression.

All cannabis is seeing a little bit slower sales right now, and I wouldn't be surprised to see Trulieve have a couple of flatter to down type quarters. Trulieve does a fantastic position in Florida, especially in kind of the middle of the Florida market and that they're not chasing the high-end market. They're chasing. I wouldn't call it the low end market, but they do a lot of deals. Obviously, they're vertically integrated because that's required in Florida and they're trying to really get huge scale in Florida is what I would say.

Florida is a great market today, partially because of the vertical integration and the limited number of licenses for operators. They have a lot of stores. But I think there's like 13 of the super licenses, if I recall correctly. So, there's a huge opportunity for this existing operators, but the medical program is slowing down there a little bit. They're still adding new people all the time, of course. But the rate at which it's growing is starting to slow.

And I think Florida is really a super exciting opportunity, maybe after 2024, go into 2025 if they pass adult use. Florida itself is a huge state. I think it was a 21 billion [ED: million] people, something like somewhere in that range, but that's also growing state as people go there for the certain political meetings, but I think that Florida really gets exciting when it turns to adult use because not only can the whole population rather than just the medical card holders suddenly access cannabis, but they get a 120 million tourists a year.

And so, all of a sudden, those people can buy cannabis as well. And there are some great stores and locations like us talking to Brady Cobb, a couple of weeks ago about what they're doing with Sunburn. They have some assets like in Key West, for example, that today might not be the most exciting stores and don't do huge numbers, but locations like that might be where people get off the cruise ship and their stores right in front of where they get off the cruise ship.

So, suddenly, all those people can start buying adult use cannabis that today can't because they're not medical cardholders. So, I say that all going back to Trulieve, and I think the Harvest acquisition has been somewhat challenging. And I think Florida will continue to be a decent market. And I think they'll continue to carve out share there, but I think that really pays off once Florida flips adult use, which, you know, maybe a [2024 or a 2025] [ph] type event.

RS: I do still want to get back to the ETF part of the portfolio question, but now that we're on Florida, do you and speaking of Sunburn and, kind of what might happen, what's likely to happen in 2024 with adult use? Do you and also speaking of Ayr earlier, are there other companies that you're looking at that feel like their approach in Florida has you excited? Like, do you like how Ayr is approaching Florida? Do you like how other companies are approaching that state?

JR: Yeah. I think, Curaleaf, it also has a good position there. You know, they're because of their scale, they can play the price cutting game fairly well. You know, Trulieve has the best scale there. And so, ultimately, I think there maybe a little lower, I don't know this, but maybe they have a little bit lower cost of production. And they tend to do real well. The price cutting gains, which are required in Florida to compete, but also Boris and Curaleaf do real well there.

So, I think as part of Curaleaf's footprint, that's also something that will get increasingly exciting. And so, I kind of see Ayr, Curaleaf, Trulieve, kind of doing similar things with similar-ish products, kind of going after that middle market certainly grow some nice stuff, but not necessarily chasing the high-end, more chasing the everyday type of consumer, which, you know, is a great strategy as well.

Any you kind of see Ayr, Curaleaf, and Trulieve really competing against each other in Florida and those, what they call, you know, the price cutting [wars] [ph] and the promotions that you see there. But there's also an interesting thing going on in Florida at the higher-end of the market where you just saw some of the California operators like Cookies x Jungle Boys start to open up stores in Florida because Florida has a deep and rich cannabis culture.

There's some great strains that came Florida, like Triangle Kush, for example, it's fantastic, and that's named after three cities in Florida that form a triangle. And there's been a number of other great strains coming out of Florida. So, sometimes people [indiscernible] Florida for growing bids, which is kind of because the environment there is so challenging. [Brady] [ph] talks about lots of people coming from California and using a California playbook in Florida and having it not work out very well, having to throw away the first couple of harvests.

So, Florida can be a challenging environment to grow really good stuff, but that's what Brady is trying to do with Sunburn, carve out that niche on a higher-end and with really nice locations, [indiscernible] extracts really going up at the premium market in Florida. So, I think that's pretty interesting. And that's kind of what you're seeing for Cookies x Jungle Boys down there as well. And it seems like on the - it seems like maybe both of those have seen a couple of cultivation challenges, but when they turn out the great product, people line-up for and that sells out.

RS: So, you're - you feel like it's just a matter of time before they figure that out?

JR: Yes. Yeah. I think, I think we'll see more and more great stuff coming out of Florida. And I just think that market will have different segments to it just like we do in California where we have your, kind of everyday flower, which I would kind of call what Glass House puts out. I kind of think about it. Like, you know, there's this notion of good enough technology where, kind of phones got good enough where we don't all feel like we have to upgrade to the iPhone 14 from the 10, 11, 12, or 13, because this one works good enough. And I think Glass House has done a great job of that in flower, in California where it's not premium indoor, it's not all hand trimmed, it's not all, you know, the absolute best craft flower, but it's really good.

And it's going to be good enough for 80% or 90% of people. And I think that's in Florida, you're seeing a lot of that take place for Curaleaf, Trulieve, Ayr, putting out the good enough type flower, and then some others carving out that niche that we see in California from maybe Alien Labs are connected or 710 labs, which are with the real top shelf. There's room for those guys too. And I think we're seeing that fill it in Florida with your Sunburns, with your Cookies, with your Jungle Boys.

RS: As long as we're talking about, I'm just curious as a consumer, do you have a go to every time? Do you go for the same thing every time when you're in a dispensary?

JR: No, I don't. It's weird because of beer or wine, I feel like we often buy the same thing over and over again. Like, you know, I'll get the same six pack of IPAs every other time or a bunch of times in a row or the, or it might be bottle of wine that hits a price point you like and you get at the same Pinot on a regular basis over and over again. And when I started to collect it, I thought, oh, somebody will find this certain OG Kush that works well for them, [sues] [ph] their anxiety, helps their pain, it puts them to sleep, and they'll just order quarter after quarter, ounce after ounce of the same thing.

In a cannabis, it does not work that way. People always want to try the new thing. If it's really [Technical Difficulty], what I found is you can get people to a good picture and a good description, look at people to buy something twice or buy something once. If it's really good, they'll buy it twice. People almost never buy the same thing three times in a row. Unless they have a specific condition where something's really working well for them. But I always want to try do things. I always want to try new brands.

I always want to try do flavors. And so, I don't, I even try, I like Green House flower too. I like outdoor flower, especially in California. I think some of that stuff is cheaper. It gets a quote, you know, it gets a bad name, but some of the sun grown out here is fantastic. So, sometimes I'll splurge, maybe once every, you know, month or two, I'll go and buy the latest state-of-the-art.

Like, I'll try to do as cookies or then do as seven - I have some new 710 labs now. That's super good. And it's fun to try those, but I'll also move around try some stuff at Glass House, try some outdoor. I grow myself every year, so sometimes I smoke the flower that I grow. And I've always just into trying new things. I'd love to try different flavors.

RS: That's awesome. I didn't know that you grew your own. A, what's your favorite thing to grow? Is there, like, specific strains; and, b, when you do go to dispensary, what are things that you're asking about? Like, what are you focused on when you're shopping for it?

JR: So, in terms of my own growing up, I tend to grow it and then wash it into Bubble Hash press it into Rosin and end up with Live rosin. I don't do a ton of dabbing myself these days, but I've mentioned my dad has a pain problem. And I can grow my six big outdoor plants here, transform those into live Rosin and give him a pretty good stash of super high quality extract for, you know, a good part of the year for him to use for his pain relief. So, that's kind of what I've been doing. So, this year, I grew a lot of Gorilla Glue, which tends to be a decent [hash string] [ph] as well. It also kind of works well for his pain condition.

So, I tend to grow more because I'd like it and to do something helpful for him rather than to produce a ton of stuff that I like because I'll kind of get sick of it after a while. Like, I don't need a pound of Gorilla Glue sitting around. You know, if I get an ounce for myself that I could just, you know, stack on throughout the year, that's great. In terms of going to the dispensary, I almost always do my homework first.

You know, I'll jump on weed maps or I'll jump on their website that I'll reference that against Leafly or I'll have a friend tell me you've got to try the new, I think, smarties. This is the last one I had from 710 Labs. I have a friend that's a rep for them, and he said, oh, you should try this one, or the time before that, I bought something fancy. It was cookies. And I just wanted to try the real cookies, [Gary Payton] [ph], which is, you know, popular straighten out here.

Just to see what that was like. So, I am either [indiscernible] about it or passionate enough about it, that I'll spend, like, a half hour deciding in advanced what I want before I go to the store, and then I'll be out of there as quickly as possible. I'm not super into hanging out and ask a lot of questions. Sometimes the budtenders are great, but sometimes I just would rather do the work on by myself and just get in and out there.

RS: What's your favorite thing that you recently bought?

JR: Oh, let's see. Yeah. I would say that Sardius from 710 Labs was really good - for folks that don't know 710 Labs, I think they're in a couple of states, but they're big in California. They're really well known for their extracts, particularly their [Livros] [ph] and super popular, super beautiful, super nice, and super expensive. For a long time, it was a $100 a grab. It's gotten down a little cheaper than that now, but super top shelf. They're flower.

They tend to do a beautiful job with some of it's living soil, organic stuff, some of it's not, all of it's hand trimmed, and they tend to do a lot of breeding themselves. So, kind of a single source feel to it as well. What I got most recently retailed for 65, which is super expensive in the California market. That's something I would buy all the time, but just kind of treat yourself sort of deal. But what was interesting is there was only, "only 23% THC", which typically if you're spending, you know, $50 in California, it's going to test that 30% or 35% because that's just what, you know, THC is not the end all be all.

It's just one, you know, one component of what makes good flower, but it's usually the only test that shows up in the jar. So, if we're looking to point to something to say how strong is it or how good is it? It tends to - California tends to be priced off THC percentage. The more THC, the more expensive it is. So, it's kind of cool to see this really great flower from 710 Labs that's at the top of the top shelf, but was lower on the THC. 23 is still pretty high, but from the effect, it was still you know, super strong, but it wasn't overwhelming.

It just had a few great overall experience. So, that's kind of what I'm looking for on something. I'm not looking for something that has to be for 40% THC, and I'm going to be, you know, head in my hands thinking about every mistake I've made in my life due to the, you know, racing anxiety I have from it. I'm looking for a more kind of a mellow, great flavor, good time type experience.

RS: Yeah. Okay. Good to know that it's worth it sometimes. Do you feel like it's like a half and half type of ratio in terms of when you're buying them more expensive craft that it's sometimes worth it, sometimes not?

JR: Yeah. I think that's fair. And also sometimes the things in the dispensaries can get a little bit old as well. And so, they could legally stay on the shelves for a year after packaging. So, sometimes it's [indiscernible]. If you bought something that may six months ago was really great, but now it's six or nine months old and it's not as great as it once was. So, sometimes freshness is a huge part of that as well, but I'd say, kind of half the time I'm splurging on something that I just kind of have everyday things that I'll consume as well that might not be as expensive.

RS: Yeah. Okay. The art of going on many tangents. Back to ETFs, do you recommend ETFs for anybody, for a more novice investor, who's looking to, kind of have the work done for them? How do you think about ETF? Should everyone be in them? Should only some people be in them? Should nobody be in them?

JR: No. Definitely, for sure, some people should be, I think we have some really great ones too. You can talk about some of the similarities and differences. But if you're the type of person that wants to spend a ton of time learning about the cannabis industry, learning about the different companies, learning about the state's in which they operate, learning about their balance sheets, learning about, you know, what debt maturities might have [coming due] [ph], learning about all the important things about these stocks and track them closely, and it's fun for you, then I would encourage you to build yourself your own little MSO portfolio. And I think you can do that.

You own 3, 5, 7 stocks like I said, look at the Top 10, pick your favorite 5. And I think you can do well doing it that way, especially if you enjoy it. I think that's a good thing to do. Maybe you can do better than the ETF, maybe you couldn't, that's probably going to be dependent largely unlock at the short-term. But I think for a lot of people, the ETFs are a great solution because you could outsource that expertise, which I think if you're talking about maybe more traditional sectors, but consumer staples or health care or tech.

Maybe, well tech is pretty nuanced, but cannabis is super nuanced, just because of the regulations around it and how each state is different, that it really takes a long time to get your head around these cannabis stocks. And so, I think cannabis stocks require maybe more effort in research than most, and so it can make more sense to outsource that expertise, to ETFs. And so, I recommend ETFs to a lot of people. Another advantage that they have is the ETFs tend to be listed on the Nasdaq or some higher exchange, whereas the underlying stocks tend to be listed on the OTC or the CSC.

So, if you want to get exposure to cannabis, but either you don't want to own or trade to thinly traded OTC stocks or you just don't have access to them. Like, you know, on things like Robinhood and Webel, for example, you could buy MSOS. You could buy, you know, NYSEARCA:PSDN . You could buy the NYSEARCA:YOLO ETF or the NYSEARCA:MJ ETF, but you couldn't buy GTI directly.

So, they tend to serve as great access points. You know, we've been seeing in the last few weeks a lot of money coming into cannabis as people get excited about the potential for SAFE banking. And the vast majority of that money is coming into the ETFs and then from there, it gets invested into the single stocks. You'll see huge volume, especially at MSOS, and super light volume on things like GTI and Curaleaf and Verano.

So ton of the money for set of some structural reasons because of those higher exchanges tends to come in through the ETFs. In terms of the ETFs that are out there, MSOS is kind of the, you know, the 10,000 pound Gorilla, the giant of our industry. And it tends to have the best liquidity, a super diversified portfolio. I tend to think of it almost like an index fund. It is not an index fund. It's absolutely actively managed, but it gives you super broad exposure to the U.S. cannabis industry.

It is a great choice if you wanted a broad exposure to U.S. cannabis stocks. I also like the ETF that Poseidon does, which has the ticker PSDN. A couple of reasons I like one is it has a little bit deeper team. Dan that runs MSOS has a little bit of outside analyst help, but it's basically him. And he also manages five or six other funds. He manages YOLO, but he also manages a Vice Fund, a Hotel's Fund, and he has a restaurants fund, he has a new Drones Fund.

So Dan is, you know, Dan is a talented guy, but he spread pretty thin through all those things that he does, whereas Poseidon is a cannabis dedicated investment manager. I think you've had Morgan or Emily on the show before. They have a third person, Tyler who helps out with the ETF. So, they have a three person team just dedicated to the PSDN ETF. So, like, that aspect of it, it has a more focused portfolio.

I think it holds more than dozen names right now whereas MSOS, I think holds about 35 names right now, similar more focused portfolio, heavily invested in the Top 5 U.S. names right now, can be global, but focused on the U.S. right now for reasons we probably all understand. And it also has a dynamic leverage component where they can go 1x to 1.5x. Currently, it's about 1.3x. That's been obviously tough during the downturn. But theoretically, if and when the market turns, I think that'll all be one of the top performing ones out there.

So, I think MSOS is great. I think PSDN has some advantages as well. Then there's also, you know, Tim Seymour's NYSEARCA:CNBS . which is kind of a quality global ETF. And then you have MJ and NYSEARCA:MJUS , which I don't follow quite as closely. MJUS is kind of based off of an index and isn't as actively managed. So, I think it has decent exposures, but I tend to focus more of the adviser shares once like the MSOS, PSDN.

And then there's also MSOX, if you want to use a trading vehicle. MSOX, provides 2x exposure to MSOS. And so, I think that's a great vehicle for expressing a short-term view. I think long-term, it's probably a little bit too volatile to be successful for those people, but that's something they launched a couple of months ago. That's a nice trading vehicle.

RS: So, if investors are kind of thinking, yeah, everything you're saying sounds really good, I'm just not sure that now is the time to get in. I'm going to wait until it seems like there's something really going to happen politically that's going to cause a catalyst. What would you say to them? And how do you think about, kind of the investing timeline? If you're not trading the industry, if you're investing in the industry, how do you think about that?

JR: Yeah. So, I think of cannabis as a state led growth story with a series of hard to time political catalysts. And when I say state led growth story, it's pretty self-explanatory, but today, we have 21 adult use states. Eventually, I think we'll have all 50 and of those 21, not all of them are even close to fully built out here in California, which has been an adult use market since 2018, we still just have about a 1,000 stores and that has to get the 5,000 or 10,000 for California to be built-out. Illinois had a 183 social equity licenses on-hold and those just got released.

So, even the existing markets just are still being built-out, and we have 20 more states left to go. And so, I think that there's a pretty good growth story here over the next, you know, five years and even 10 years in terms of focusing on that statewide component. So, first and foremost, I always focus on the state-wide growth story, and I think that it's that now because we have so much runway for somebody with a longer time horizon, we can talk about what that means. It's probably, you know, a better entry point, the sooner, the better and you getting involved in that state led story.

The second piece is that series of hard to time political catalysts. And by political catalysts, I mean specifically SAFE banking. I mean de-scheduling or rescheduling. I mean de-privatization or legalization, and up listing somewhere along the way. And I think that to harvest those pieces, you're probably talking three to five years hopefully sooner, but maybe three to five years is fair. My friend that runs a cannabis hedge fund in his deck, he says four to six years.

So, I think somewhere in that time frame, you can unlock those pieces. You can keep the SAFE back and you keep the deal rescheduling. You can get it legalized or decriminalized and somewhere through that path we pick up up-listing to the major exchanges as well. So, if you put those two pieces together, you got the state led growth story, you got the series of hard to time political catalysts. I think now is probably a pretty compelling time because you're early in the state led growth story, but also with the political catalysts, there's a movie I watched with my son the other day called 21? Have you seen that?

RS: No. Is it about poker or something?

JR: Yeah. It's about blackjack. It's based on a book called Bringing Down the House, and it's about the MIT Blackjack team. And what they're doing is they're counting cards. And the basic theory there is that with this board faced cards, it's more favorable to you. So, someone sits at a table, counts cards. And when there's a favorable count, they signal and bring in an additional player to bet big. The reason I bring that up is I think we can kind of do that with these political catalysts as well. And that for most of the year, we kind of knew SAFE banking wasn't going to pass. The CAOA was kind of dead out of arrival.

If you really understood things, that probably wasn't going to happen there's been a couple other places where it could have fit in, but really our best shot at getting SAFE for maybe not just the near-term, but for the next couple of years with the changes that we've seen in Congress is in the next, you know, today is November 29, and it's like any time between now and the end of the lame duck session, which believe ends on December 22 is the last time that the Senate of the House are both in session.

So, going back to that, you know, putting more chips on the table with a deck that's stacked in your favor, I personally have increased my exposure through using things like MSOX and using things like PSDN to get a little bit more leveraged exposure, because I think now the deck is stacked in our favor. I think maybe it's a coin flip or better that SAFE passes. Some of the banks are saying closer to 70%. But call it, you know, 50% to 70% call it a little bit better than a coin flip. But at the same time, I think that if SAFE passes, there's more upside from a passing than downside from not passing.

So, don't take these numbers to heart because I think it's hard to predict, but maybe if SAFE passes, the stops quickly move something like 50%. If SAFE doesn't pass, maybe they go down something like 25%. And so, even if it's a coin flip, if I told you, you could flip coins and, you know, with that ratio right you would say how many times can I flip it? Give me all the flips I can, because I'll make twice as much the wins that I'll lose on the losses. And again, super caveat, I'm not saying 50 and 25 are the right numbers, but I think that we're in a more likely and not for SAFE. And I think that there's more upside than downside for passing than not passing.

So, I think all that points to, I don't feel comfortable telling people buying more cannabis stocks, because we've been in this drawdown for so long. You know, it's been a year and nine months almost since it's February 10, 2021 was when cannabis stocks peaked, but I feel like that now is probably a pretty good time to either make sure you have or keep your exposure or add some exposure through buying [indiscernible] whatever you'd like, buy some of the blue chip things or, like I said, pick up some exposure through something like one of those leverage ETFs if you want to just add a little bit more exposure for now. But I think that's better advice to someone really [indiscernible] part.

I think that's better advice for somebody that's at their screens a lot because if SAFE doesn't pass, I think the stocks go down pretty quickly upon that news. And so, if there's somebody that doesn't look at your portfolio too much or even, isn't around during the day, then you might give up quite a bit on the downside where I think the more you're watching things closely over the next few weeks.

Maybe if we see that news, you know, that SAFE does get to be included or doesn't get past or whatever happens, the sooner you see that story, the sooner you exit some of your stuff, maybe you can save yourself a bit on the downside there, but I don't think it's also going to be necessarily a long-term terrible [indiscernible] it doesn't pass. I just think that there's a short-time, short-term opportunity where things could be really good if it does.

RS: Yeah. I think well said. We've covered pretty much any everything that I wanted to cover, but I was curious what your thoughts are coming from California. You focus on some well, Glass House, in particular, in terms of, like the California stocks that you write about or focus on, what are your thoughts? I mean, it's such a - you alluded to and pointed out a couple factors what makes California, such a tough market to do well in. What are your thoughts about the companies that kind of the smaller non-MSO companies that are there fighting for, you know, market share in California? How much success they may have against the illicit market? And if you feel like there's winners to point to their beyond Glass House?

JR: Yeah. I think that there are businesses better set up to succeed in California and probably those that have scale are the ones that I think are going to do best here because it is such a competitive market where low cost of production is really critical. Not just to compete against…

JR: Yeah. Yeah. Exactly. Not just against peers, but also against the illicit market because the illicit market doesn't have the taxes of the licensing fees, their cost of production is inherently lower. So, I think someone with huge scale, like Glass House, what I wrote, my longest piece in Glass House, it was called an introduction to Glass House brands, California's greatest hope. And I think that's still the way that I look at it. But I think someone like Glass House is probably in terms of succeeding in California, but it might be California's greatest hope. 4Front (OTCQX:FFNTF) is another one that people like.

4Front is kind of the Glass House of edibles for lack of better analogy, and that encumbers, they have the state-of-the-art production facility that they're using to really drive down, you know, cost of production in edibles. They've done that successfully in Washington, and I think forefront is taking a kind of a hard path where they're looking to compete at low cost in these big open license, slightly more mature markets like Washington and now in California. So, I would probably favor things like that.

You know, Lowell (OTCQX:LOWLF) is another one that people own and look at. And while I like the like their products and like their leadership, I think they do a beautiful job of branding. I just think because of their smaller size and some elements of their balance sheets, that that's probably a little bit of a riskier one. Maybe has more upside too if they do succeed, but I think the smaller names, you know, StateHouse (OTCQX:STHZF) or names like that are probably a little bit riskier. I'm currently not making investment consciously, I would say, making investments in California. I don't own Glass House.

I don't own any of those other names that we've mentioned. I've owned them before. And I've kind of been wrong in that Glass House, you know, it's been one of the best performing stocks for the last year. But just being someone that lives here at season every day and tracks things like the numbers of new stores opening and where those stores are. I think that we're still a ways away from where we need to be in terms of having enough retail to match the cultivation here. We have so many more cultivation licenses, and some people have such huge scale, including Glass House. They have 5.5 million square feet in Camario, in one Green House. They're not using at all.

They're growing vegetables and subletting it for part of it, but that one facility, which doesn't count their two other Glass Houses, which are, I think, about half a million square feet each, is more than all of Trulieve's cultivation, and that's just one big Glass House. That's more than Trulieve's cultivation. And so, I think that we have a ton of flower being grown in California, but we only have about a thousand retail outlets to sell that flower and this tend to be concentrated in certain places.

Like, if you open up a new store and it's the first store and it's City of Orange County that has no cannabis, that's pretty impactful. But if it's in Lompoc, California, which has 13 dispensaries already for 40,000 people, adding a 14 isn't going to really matter very much. And because of the regulations in California, were each city and each county get to decide if they want cannabis, it's legal state-wide, but the cities and counties can say we don't want the retail or any cannabis in our cities.

And so, we're seeing more stores open up in places where there's already stores and not enough new stores opening up in places where there aren't cannabis dispensaries right now. That will change over time. But as all things in cannabis, it's taking longer that we would have hoped, especially in California, it takes a super long time to get anything done. There's a massive bureaucracy here and there's so many different levels of approval that are required. And so, I think California is a tremendous opportunity.

And I think there are people out there that are kind of calling the bottom right now and think that enough cultivation has been shut down or not renewed. There's people that think the illicit market, enough of it has gone away and contrast that with some new stores continue to open every month that we might be getting closer to the bottom in California, but I'm just not quite ready to make that bet yet.

RS: Do you feel like if in some way that illicit market does get tamped down, a company like The Parent Company (OTCQX:GRAMF) has some, kind of in-roads into making a name for itself or do you feel, like, because of the reasons, mainly because of the reasons you just stated, like, their kind of approach in terms of the retail and that, you know, kind of doesn't make it?

JR: No. I think the parent company definitely has an opportunity as California improves. You know, they do focus on branding, which I think is important here. They do have some vertical integration, which I think is important here. I think the parent company has had some leadership struggles. I think Troy is definitely a step in the right direction over there. I'd like everything that I've heard from him, but pretty challenging thing to turn around. A lot of shares outstanding, a lot of new shares being issued, a lot of unlocks being released. and so you kind of see a lot of selling pressure on that stock.

I know you bet a long - I don't know if you still are, but you bet a long-term holder there. And I, you know, what did it start at 11 or something like that? And remember, analysts wrote something about it, what was down at 7, and then it went to 6, and 5, and 4, then we got down to 1, and now I don't know where we are today, but, you know, not one anymore.

And so, I think that The Parent Company is certainly a riskier bet, but I think because it's so distressed that if it does turn around, probably has a fair amount of upside. But I just feel like at this point, you have markets like New Jersey, which are just fantastic, where you have stores that are doing a $50 million run rate, 60 million, even $70 million, you know Curaleaf has said for New Jersey store.

And you see, oh, you have these limited licenses in New Jersey. You have a medical market that's just flipped rack. You have huge MSO exposure over there, and you have rate margins where you're seeing eighth selling for 35, 45, but mainly for 55 and 65, which is not quite, twice what we have in California, but it's such a higher margin than we have in California. Same thing but concentrates, you know, TerrAscend's been killing it there.

They have 50% of the concentrate market in New Jersey right now. And especially with New York being delayed, and Pennsylvania on the other side, not yet having adult use cannabis, maybe that changes in the next year or two, hopefully, especially with the collection results in Pennsylvania, but New Jersey is in a really good spot right now.

And so, I've been trying to, kind of lean in to get as watch New Jersey exposure as I can. But New Jersey exposure, you can't, obviously, just get New Jersey, you have to decide, I'm going to take some New Jersey - so if I could go to TerrAscend, great New Jersey assets, killing it with flower, killing it with the concentrates, super locations, but you take Michigan with that, and Michigan's crisis have been down 50% year-over-year and they took a $321 million write down, you know, non-cash write down unintangible is a goodwill due to the Gates transaction.

And so, if you want New Jersey, you've got to kind of pay for it, you know somewhere else, you know, Ayr has New Jersey, but they're struggling in other markets as well, you know, Massachusetts, I think has been, you know, quite a disappointment for them.

So, you kind of go through each one and say, if I want New Jersey, I've got to take some other less favorable markets with it. But by going into the third quarter, I could have tilted my portfolio pretty heavily towards things that have New Jersey exposure. And we'll continue to try to probably be that way for the next couple of quarters.

RS: So, let me ask you in finishing up. I mean, I have like a million more follow-up questions to everything you just said, but let's leave it for the next conversation, Jesse. I hope you'll come back. Where I wanted to leave it was, kind of asking your advice to investors and how you're thinking about, kind of, you know, the macro environment with cannabis stocks, kind of the rising rates and where were at in that sense, and then also how we should be thinking about cannabis stocks in that light.

And then also in terms of, do you envision, you know, we're talking about these distressed assets, some companies doing better than others, some strategically doing better than others in terms of how their strategies are paying off. What are you thinking, sensing, feeling is coming in terms of acquisitions? Do you feel like there's major consolidation coming, some consolidation coming or that's also part of maybe the macro environment that maybe we have to wait a little bit for that.

JR: Yes. So, overall, my advice is patience and discipline. I think is always the order of the day in investing period, but very much so now with cannabis investing. We've been in a brutal drawdown, 75% over 21 months. I had lunch with an investing friend who's in his 70s and founder of one of the big investment banks and ran a couple of hedge funds, and I met with him last Friday to talk about some cannabis things.

And I said to him, Paul, this is the worst thing - and I've been investing for about 25 years, and this is the single worst investment experience I've had. And he kind of pounded his hand on the table, and he said he said, Jesse it's been the worst thing that I've been through as well. And that's coming from somebody that has been doing this for 50 years and saying this most recent experience in cannabis stocks has been the worst experience he's had in investing, which is really saying a lot.

You know, there's the dot-com bubble. There's the credit crunch. You know, there's been a billion other things that have gone down a lot. But this has been know, what are the worst and what are the hardest to stick through.

RS: Would you say because of how long it's been going on and how surprising that's been?

JR: Yeah. I think the duration is brutal. You know, losing 70%, 80% is brutal, especially because of, you know, takes you know, so much more to make those losses back. You know, if things go down 50%, you have to make a 100%, and so that's super painful. But the duration of this one especially in that we had the big euphoria coming off of the elections in the Georgia runoff. And ever since then, it's been, you know, fairly straight down with some kind of fits and starts along the way. And just as I felt like things could be improving here, then all other stocks started going out. We decided, let's participate in that bear market as well. Let's double-down. And so the duration, yeah, absolutely.

I think it's been brutal, but I think with where we are today, with the potential for SAFE, the potential for de-scheduling or rescheduling sometime as soon as any time, but maybe more likely over the next two years is maybe what that time frame saves, it looks like, maybe Biden just like he saved the announcement that they were going to look at de-scheduling or rescheduling to rate before the midterms. Maybe they saved, [the actually] [ph] doing something before the 2024 elections. That seems kind of logical to me. I'll caveat I was saying, I'm not a political expert and don't listen to me on that stuff, but I've heard some people say as soon as six months, it could be done, but I think that you're probably looking towards 2024 as a better bet on that.

So, when I put in my optimistic hat, I say that going back to the state led growth story as being the first component, we're going to continue to see those new states come online, existing states get built out. When I add those political catalysts, two critical ones could be happening where, you know, by the time this airs, certainly by the end of the year, we'll find out if we're getting SAFE, which would be huge both in terms of improving the operating efficiency of the businesses, lowering of lending rates, making them SAFE, but also bringing new investors like I mentioned, I used to do hedge funds stuff for most of my life. And with those funds, I thought that I could go back my investors in those and say, now I'm doing this cool thing with this cannabis growth story.

You might be interested in this. A lot of them said cool story. I am interested in that, and then a day or two later called back and said, but I can't do that. And I can't do that because of investment guideline reasons. I can't do that because of custody reasons. I can't do that because of brokerage reasons. And theoretically SAFE in the language and that should make those investors more comfortable, because right now, it's the same beat up group of retail investors that's still kind of the ones that are, you know, buying and selling these stocks. It's 95% retail owned. There just isn't a lot of new money coming in. So, I think SAFE, maybe even more so than helping the businesses will help the pool of investors that could invest into those businesses.

So, I think that's huge. And then I think also that potential for de-scheduling or re-scheduling, which for folks that don't know if you need to schedule three or below, then two things potentially happen or what should happen. What is [indiscernible] goes away? And that's what prevents businesses from taking standard deductions it would bring down tax rates substantially from something like 60% for Green Thumb, down to something in the 30s, which instantly, you know, brings a lot of these businesses to generating real cash flow, which would be huge.

So that could happen with the rescheduling or de-scheduling process. And the other piece is that - and that may be the path to up-listing, because the second element stocks are scheduled three, and those are on the Nasdaq. So, theoretically, if we get to three or below in the next two years, we could see [indiscernible] go away and we could be up-listed. And at that time, SAFE banking may or may not have already happened. And then we have the state-led growth story playing out, and we have a couple of these political catalysts being unlocked.

And I think that's what's going to put, you know, get us the real move that we're looking for in the space, but I think these things are hard to time. I've mentioned SAFE right now. We have a pretty good shot, and maybe you could make a little bit of that surround SAFE to rescheduling, I think, it's going to be a lot harder to time. And so, my advice for people is to try and extend your time horizon. I mean, if you're 40 years old, you're not going to be retiring for another 20, 25 years, and you may live another 40 or 50 years. So, you have a long-time, your assets and stocks need to work for you.

So, we can, you know, fret over the day-to-day, the month-to-month, but with the time horizon that most of us have, I would just make some establish some positions at an ETF that you like or buy some of the blue chip names and just think of it as a longer-term hold and let those put that growth story in political catalysts play out. And we're talking, like I said, maybe three to five years, maybe four to six, but that's a really short timeframe in terms of, if you're someone that's 40 years old, I mean that has 50 more years to live where they need their investments to help pay for their lifestyle.

So, first advice on there is patience and discipline and extend your time horizon. And to your second question about consolidation, I would say, I absolutely expect to see more of that. And if SAFE does not pass, I would expect to see that more quickly. The names that are or debt laid in, indeed more scale or more money to survive. I think those asset prices go down and they will be fairly quickly acquired or see some consolidation there to shore up balance sheets and get some more scale.

So, if we get SAFE, maybe we don't see as much consolidation because those businesses have a bit of a lifeline theoretically through similar lenders, lower lending rates, maybe potential even equity raises at that point if we see a real big appreciation in share prices. I would be surprised if we don't see people issuing some equity, doing some diluting to raise somebody that way, but if we don't see SAFE, then I think consolidation expedites.

RS: Yeah. Certainly a lot of interesting times and certainly a lot of interesting things unfolding. Feel like we've been here before. You said that you're not a political, you know, prognosticator, but even the political prognosticators are - haven't done there right yet. So, anxious to see what happens. You know, I'm looking forward to change and progress. May it come soon. Yeah. Lot of great things to think about. Jesse, thank you so much for sharing so many great insights, and you know, a lot of great takes and a lot of - I pushed you for a lot of different topics. So, thanks for having such great answers for us.

JR: Well, that was fun. Thank you for having me.

RS: Yeah. Absolutely. Anytime. And I'm going to hold you to coming back, so I hope you do.

JR: I would love to. Thank you.

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