The Cannabis Industry has been changing for a while. Years of activism and millions of dollars of investment have come and 2020 has been the year that served as the step right before federal acceptance. Today, 230 million Americans live in a state that has access to either medical or recreational cannabis. This would have been unimaginable in the 1970's during the peak of the drug war.
In the 70's, about 84% of Americans thought marijuana should be federally illegal! Today, about 67% of Americans think the opposite. The massive face-lift has upended the industry. More and more Cannabis reform is being passed through the isles of the American institutions and the people are demanding a better system for Cannabis Regulation.
We've summarized our thoughts from the two Cannabis entrepreneurs we've had on the show: Stacey Hronowsi and David Hua. Stacey Hronowski founded Canix, a company that helps entrepreneurs track the required seed-to-sale componenets of running a Cannabis company. David, or Hua, on the other hand founded a company called Meadow, if you live in California, you've seen their POS system in store! Meadow is more than that tho, they also build the back-end infrastructure for the companies to adapt to COVID lock-down restrictions by opening options for delivery, pick-up, and other activities that allowed Cannabis companies to stay open.
Both of these founders are advocates in the space and provide us with amazing insight into industry!
Check out our Year End Review of Cannabis!
Adrian Grobelny [00:00:11] This is things have changed year end review, where we put the spotlight on the industries we've unpacked over 20/20, speaking with entrepreneurs and covering the exciting products that they're building gives us insight into what the future of 2021 and beyond will look like and the catalyst that could drive these industries forward. Today, we're covering our experiences, speaking with the leaders in the cannabis industry.
Reporter [00:00:53] The legalization of marijuana got one step closer to become a reality at the federal level. Today, the House voted in favor of the Marijuana Opportunity, Reinvestment and Expungement Act. That's the more
Reporter [00:01:04] and really it's a decriminalization bill. And so it's really very similar to the rollback of an alcohol prohibition and how for years, even today, we still have somewhat of a checkerboard effect across the states. But I mean, we're talking about tackling things like interstate commerce, import export. I mentioned taxes. We would be able to have access to federal banking now, which we currently don't as a as a legal business, potentially companies like ours that are public, being able to list on Nasdaq and the NYSE job creation, which is a huge obviously right now in the middle of a pandemic and topic for discussion, you know, it's estimated that with full legalization, one point six million jobs could be created. And currently in the legal industry, about two hundred forty three thousand jobs are now supported with the cannabis industry. So really, there is so much potential to unlock, but there are a lot of details to work out.
Reporter [00:01:59] And a nationwide push to relax drug laws taking a significant step forward. More states, including New Jersey, Arizona and South Dakota, legalizing marijuana use for adults. And in Oregon, becoming the first state to decriminalize small amounts of street drugs, including cocaine, heroin and methamphetamine.
Matt Gaetz [00:02:24] In every state where cannabis reform was on the ballot, in this country, it passed, it passed with overwhelming support. Matter of fact, the only thing that I know that's more popular than getting out of the war on drugs is getting out of the war in Afghanistan. But if we were measuring the success in the war on drugs, it would be hard to conclude anything other than the fact that drugs have won because the American people do not support the policies of incarceration, limited research, limited choice, and particularly constraining medical application.
Adrian Grobelny [00:03:04] That was Matt Gaetz, the only Republican in the Senate who will vote yes on the Moore Act, which removes marijuana from the list of scheduled substances under the Controlled Substances Act and eliminates criminal penalties for an individual who manufactures, distributes or possesses marijuana.
Shikher Bhandary [00:03:28] So little we'd won big in 2020 with 15 states now legalize cannabis for adult use. There is real momentum now behind it. But how did the job begin? Just like every asset in the early part of the year, it was rattled by covid-19.
David Hua [00:03:57] I mean, holy moly, man, that that time was insane because we we were not sure if we were going to be essential, right. There was this moment of we weren't in the initial drafts of essential businesses and the entire industry and community rallied to all the senators, the assemblyman and state local governments say, no, no, we are essential. And when we got that designation, it was the day after the huge spike in March when everyone was stockpiling like Marsh was a 420 event. That was just one of those spikes are like, holy moly, people are sheltering and they need their cannabis. And unfortunately for some of the towns or states that didn't really have that clear, then you had more stockpiling. So once it was made essential, everything started flattening out and the risk involved in all that went on board.
Jed Tabernero [00:05:01] That was David Hua, founder of Meadow, a cannabis SAAS company that's dealing with retail and compliance, who is talking about how his team and the cannabis community hustled to adjust to the stay at home orders across the country.
David Hua [00:05:19] So we were sheltering in place about two weeks beforehand as a company. So we were kind of anticipating this happening. And we created a guide to help the dispensaries basically run through the safe and safety and sanitation to how to run their business, I suppose. And I'll do everything. And then we created a delivery guide as well, because the dispensaries are using us initially on just for retail, maybe not have a website, maybe never to pick up or delivery. We turn them on within twenty four hours to learn how to do all that curbside pickup. You know, it was literally on the back end. Just switch, switch, switch. Now you're good. So they are able to keep their customers are. We saw twenty five percent shift in retail sales move online to pick up and delivery and all that. So the agility of the dispensary to meet the new retail world was definitely there. And we try to help support our dispensaries partners to do that.
Jed Tabernero [00:06:24] The cannabis industry is used to change as who describes the agility of the firms to stay in business. I'm reminded of how many times regulation has tried to change public perception over cannabis for decades the drug war, mass incarceration and the many stringent regulations around its production and operations today.
David Hua [00:06:48] We've been we've on the forefront of change all the time, like all the time, like, oh, man, like child resistant packaging, OK, like throw everything out, like, OK, now we got to do this or hey man, do you have those security guards there for a certain time. You can't go through this door during a time and you shut down operations like everything. So when it came to mobilizing it was like, let's go see if they took it seriously and we were taking it really seriously. You know, we we in San Francisco were shelter in place for anybody else. We kind of looked at these trends and adopted this mindset that it's going to get way worse, set everybody up now and, you know, try to weather it together.
Shikher Bhandary [00:07:48] Since regulation is such a big concern in the industry, we had just the person aiming to solve the hurdles faced by cannabis business owners across the country.
Stacey Hronowski [00:07:59] As cannabis becomes legalized, cannabis is also getting more regulation around it. It is a controlled substance. So cannabis is really regulated like the government regulates, like poison or weapons in that every step of the cannabis supply chain from sea to sale needs to be tracked. And what that looks like in practice is putting a barcode on every individual cannabis plant. And as that plant changes phase, as it grows or is harvested or packaged or transferred, inputting that data in a state tracking system.
Shikher Bhandary [00:08:36] Stacey from Norske is the CEO and co-founder of Cannex, a seed to sale software company that tracks everything from growing the product to selling it. So everything from your inventory, sales costs and compliance bookkeeping can be done through them.
Stacey Hronowski [00:08:54] It's really the bedrock software of your business. It's where you track what you have, how much money you're making, what your costs are, and then it really helps you do compliance as well, especially in cannabis, since that's such a large part of business operations.
Shikher Bhandary [00:09:13] And Cannex has been one of the most exciting companies in the space after graduating Y Combinator. They recently were the winner of TechCrunch, a startup Battlefield 2020. It's been a huge year for them and they are just growing like crazy.
David Hua [00:09:39] Yeah, I mean, sales have been rippin, people are smoking and consuming more than ever, records are being broken across the country. We had a whole month for 20 guys in June and July. Like, it just keeps ripping.
Jed Tabernero [00:09:57] Wait, things are going well. There's start ups and cannabis sales are rippin. Things definitely have changed like that. In the 1970s, about 84 percent of Americans thought marijuana should be illegal, marijuana illegal. Today, 67 percent of Americans think it should be federally legal. 230 million Americans have access to either medical marijuana or recreational marijuana. That's 70 percent of the population, that's nuts.
Shikher Bhandary [00:10:42] In addition to it being for adult use, cannabis seems to be on a path wherein there could be a huge unlocking potential for it to be used as a wellness product. There's a growing consensus on cannabinoids as therapeutic agents and pharma seems to be getting into this as well. Companies such as Teva, Novartis, Johnson and Johnson, Pfizer, Sanofi are just some of the pharma companies with cannabinoid related clinical trials in the U.S. and Canada. So there's a lot going on within therapeutics in general. But experts also say that there are applications in other industries, such as consumer packaged goods. So you're thinking about beverages and nutrition as well as industrial use cases with him playing a major role here.
Adrian Grobelny [00:11:30] What does the future look like and how do we see the cannabis industry going forward?
David Hua [00:11:41] One thing's for sure, the future is up for grabs. You know, I love to see anyone that's been affected from the war on drugs or people that have suffered through all that, like get in here and get your generational wealth opportunity or like figure out a way to create a fund or something that pays out. We have the ability to do that. There's no reason why there can be a reparations fund that goes to people are qualifying years ago and maybe it's nothing, these few pennies here and there. But eventually it's like it grows and grows and grows. And if you have that early, then you have that opportunity alongside a decade from now than necessary trying to start that. Everything's in flux. You can create whatever you want, right. So I'd like to see that. Love to see craft, like one of my personal goals is a smoke the best cannabis in my life every year, every year. Maybe in the next two or three years, what can cannabis help solve? And people have been around it long enough. You can just keep going, right? If you talk about the war on drugs or incarceration. We're talking about the funding that lease or reallocation of police resources. There you go. You don't have to deal with any of that. You're freeing up all the cases in your local jurisdiction that now goes away, expunge people's records. They can now work all this like reversal of resources that no longer have to go there. Then you go into the opioid epidemic, right? Devastating. Still, any state that introduces legal cannabis sees a twenty five percent drop in the number of overdose deaths. Right. So now you're talking about public health or you're talking about job creation. Cannabis is a job creation powerhouse. Why? Because it's an ecosystem industry, meaning if you want to get a license, you have to work with a realtor, a lawyer, an accountant. You have to find packaging. You have to hire people. All that is there. And what's amazing is if you can keep it local, then that money can go and regenerate its own local peace and of having like a conglomerate where your money is going to some place in Montana or something that doesn't go back to local communities. So I think there's going to be a real big focus and need to focus on local, especially with budget shortfalls. The state is going to go through budget shortfalls, local. How do you create a new wave? I'm not saying it's going to be the end all be all, but it'll be a net positive in a world right now where the scale is heavily tipped in the opposite direction with where we are macro economically in. For us, even like covid was huge because people need to go from retail environments to e-commerce delivery and pickup, because we had all those features, because our DNA was in this new delivery boom, it just shifted and everyone could get going. Like within twenty four hours. We had a guide on how you should do a sanitation and what you needed to roll with to the delivery structure. You know, in our minds, the first pitch is thrown this year because this eight track and trace system, when you look at the compliance side, it's also the year where we felt like we've hit a lot of our product milestones that we wanted to achieve. Our roadmap was was fairly lengthy and in some core components. And that's all coming together, which is awesome to see.