No Exits, No Capital, No Bullsh*t: Seth Yakatan on Cannabis Reality

Listen Now

Bryan Fields: What's up, guys? Welcome back to another episode of The Dime. I'm Bryan Fields, and with me as always is Kellan Finney. This week we've got a very special guest returning again, Seth Yakatan. Seth, thanks for taking the time. How are you doing today? Seth Yakatan: I'm awesome, guys. Thank you so much for having me. Greatly appreciate being on the show. Bryan Fields: Excited to have you back. Kellan, how are you doing? Kellan Finney: Doing really well, really excited to talk to Seth, really excited to get another West Coast opinion back on here. How are you doing, Bryan? Bryan Fields: Yeah, we're going to skip all that. Seth's for sure on the West Coast — he's not going anywhere. And I'm going to try to pretend he's on the East Coast. He's out there, I got nothing on him. But we've got some hot topics today, Seth. And the first one I want to get your opinion on is this: the cannabis industry is hard, but it's not going anywhere. What's the first thing that comes to your mind when you hear that? Seth Yakatan: Batten down the hatches and let's just go. You know, I've talked a lot about the corollaries between biotechnology and cannabis. Biotechnology is harder than cannabis — there's maybe more money available to it, but if you're in a fifteen-million-dollar revenue, profitable, operating cannabis company, and you're in a phase two clinical trial for a drug development company, you're fighting the same battle, just with different constraints. Seth Yakatan: So I think it's batten down the hatches — you know, it's not going anywhere. So if we're going to continue to talk about how difficult it is, it's still a thirty-billion-dollar industry. If we want to talk about the black market effect, de facto it could be a fifty, sixty, or eighty-billion-dollar industry, and it's just a matter of time. So keep complaining and keep pounding. Bryan Fields: So when I hear that, right, hard is relative. And I think everything that goes on in this industry and outside industries, there are different challenges at different levels. But I wonder if the reason people find it extremely difficult is — yes, there are those challenges — but maybe early on everyone thought it was growth at all costs. And now they're homing in and saying, we need a better understanding of our cash flow situation, a better understanding of our COGS. And when you figure out what you do well, because specialization is coming, you figure out where your success is long term. Is that how you think about it, or do you think about it a little differently? Seth Yakatan: I think about it a little differently. It's hard probably for three reasons. There's not a lot of capital available — stop there. You had a bolus of public equity money, you had a bolus of private equity money, and that's all flamed out. So what you kind of have left is maybe some high net worths and some debt that's available. The feasible region of capital available to people is pretty small at this point. The second thing is you don't have a playbook. Kellan Finney: Thanks. Seth Yakatan: So the playbook we had for the first decade was, I'm going to build this giant thing and sell it. Well, outside of maybe Lord Jones and Select, nothing sold. Seth Yakatan: So if you started with a cohort of eight hundred companies and two sold, that's why you don't have any money. So the second reason it's hard is there's no playbook — there's no Henry Ford way to grow a business. And the third reason it's hard is you have an ever-changing and very complex regulatory environment and a taxation regime which, Seth Yakatan: aside from tariffs now, is more onerous than any other industry. So when you put those two or three things together, it makes it really, really, really hard. A lot of other industries we could talk about — AI, software, manufacturing, biotech, consumer products, beverage — they're hard for the first two reasons. But because there's not a lot of money and you probably have to build toward an exit, they don't have the taxation and regulatory issue that we have. So it's definitely hard. Kellan Finney: So what are companies doing then to batten down the hatches in order to address all three of these? Kellan Finney: Or what should they be doing? Seth Yakatan: Well, I think the good ones are saying, I don't need to grow at all costs. So if I'm in seven or nine states, me getting into the tenth, eleventh, and twelfth state this year might not be the best thing to do. Me staying in states seven, eight, and nine and figuring out how to own and win and make those investments profitable, make those states profitable — that might be it. If you look at a company like Wyld, who's Seth Yakatan: extremely penetrated and extremely large, they're trying to make some moves. They announced a D9 beverage. Why? Because they own the rails. If you're in states with Wyld and they effectively have their own trucks, that's a great move. So I think people are looking at ways to alternatively maintain hegemony, which is what they should be doing, Seth Yakatan: as opposed to growth at all costs, which has been kind of the historical model we've underwritten. Bryan Fields: What I love about that Wyld move, though, is that they have a brand everyone knows, so when you go into a dispensary you can know it, lean on it, trust it. Consumers can believe in that brand. And then they expand into another category, and if you're interested in trying a beverage and you're not sure which brand to try, brand power like Wyld's is really powerful and influential, because you go, I know this brand, let me try this product. Do you think that's part of the decision-making — leveraging that brand authority to expand into categories? Seth Yakatan: I think so, definitely think so. Wyld is one of the ten, maybe, must-brands in the industry. And I also think — great leadership. You have a guy in Aaron Morris who talks to me often, for some reason, thank God, who's obsessive about what that company does, how it runs, how it's modeled. He's taken capital from outside investors, not too much, and maintains control. Seth Yakatan: And it's the same model — if you look at another brand that's kind of underwritten in a different product set, kind of the same, I'm going to be early and I'm going to own a model, in Rove, right? You have two of the same types of models that others, like Grön and Aero and Timeless, have kind of piggybacked off of to win. But you have two definite, clear models there that tend to work. I think Wyld — Seth Yakatan: Wyld is a factor overweight in the leadership of Aaron Morris and his vision, and his capability to do things other people maybe aren't willing to do, on his own terms. And that's really interesting to me. I think Aaron's probably one of the brightest minds in the industry that nobody really talks that much about. Bryan Fields: Are there techniques that smaller companies and smaller brands — that don't have as much brand staying power as Wyld — can leverage to try to achieve that brand status, that staying power, while also recognizing they have to spend on marketing, on customer acquisition costs? Any techniques you can offer these smaller brands looking to get to that Wyld level? Seth Yakatan: I talk about it a lot — I think it's quality and consistency of product. Whether you consume Wyld or not, Wyld is in the context of every single gummy conversation the three of us are ever going to have, right? Whether it's your mom or your girlfriend or your sister or your uncle or your cousin, or somebody who just tried gummies for the first time — the quality and consistency of that product is par excellence, bar none. Seth Yakatan: And I think if you're early — and I think the reason that's done well isn't just because of Aaron and what he does. I think it's also because the QA/QC around the flavor profile, the taste profile, the effect profile of that product is a hundred percent consistent. And if you can do that with a product you're trying to scale multi-state, that's probably the number one thing to do. Kellan Finney: Do you think there's an easier product SKU to manage all those aspects with? Wyld is a gummy, right, and that kind of gives you more control over the consumer experience, because you're dictating almost the entire ingredient portfolio that goes into it. There's an art to that, of course, but with flower, sometimes you're at the mercy of the genetics you have and other factors. So do you think product SKU has a lot to do with that? Seth Yakatan: I think it does, and I think you're seeing it with pre-roll. I think you saw Jeeter underwrite that strategy in, I don't know, twelve, fifteen states. I've seen Massachusetts data on pre-roll — on Jeeter — that they moved the entire market with the introduction of their pre-roll when they came in. And now you have Nature's coming and nipping at their heels with the Sluggers product, and more power to that team, because those guys are killers. Seth Yakatan: Not a coincidence that most people are former Israeli special forces in the company — I'm kidding. But they're coming, right? And I do think that infused, one-gram, flavored pre-roll is another one where you probably have a lot of it — you have some excess biomass, it's not a hard SKU to make. Timeless has really done a great job with their tumbled product in California; it's really taken off. There's another company doing great Seth Yakatan: in terms of penetration in California with a similar SKU, called Lime, and Giovanni and his crew. I think that's another SKU set where you see it. I think gummy is the easiest because once you have the kitchen, it's pretty much — I don't want to say rinse and repeat, but it's easier. Your factor inputs are more or less limited. But I'm seeing the same capability to transform product across many states in pre-roll. Seth Yakatan: And that also seems to be a form factor people are gravitating to in terms of taste, flavor, bang for your buck, consistency, et cetera. Bryan Fields: One of the elements I wanted to highlight is you talked about quality control and consistency, because I think that approach is so underrated and underappreciated. When we've had conversations with operators, they talk about investing in technology and tools to make that happen, but what they say is, hey, we can't afford this right now, we're doing all right, maybe we'll look at it in the future. Do you think skipping that step is the wrong order — build a quality, consistent brand and product first, and then leverage that outside — versus prioritizing Bryan Fields: investment in technology first? Seth Yakatan: I don't know, I don't know that I have an answer to that. One of the people who's been extremely gracious to me with their time and industry knowledge is Rusty from Old Pal. And it's pretty well known that they basically run a licensing model — a company that went out, sourced flower, and showed up with Seth Yakatan: their brand ethos, their brand SOP, their packaging, sales support, and a bunch of states. I don't want to say Old Pal isn't high quality, but I don't know that leading with, you know, live rosin, super ultra-premium SOP is where they came in. And they've penetrated a lot of places. So I don't know that there's a correct order of operations — I think it depends largely on the SKU Seth Yakatan: you're running with. Certain SKUs specifically — let's call it pre-roll and edibles largely — are probably easier. If you look at the mint category, you have Botanica, which is a company I like a lot, and Level's Pro Tabs, which I talk about incessantly — two companies where I do think there's a high level of technology and SOP manufacturing understanding required, but Seth Yakatan: you're taking learnings and converting them into your product anyway. So I don't know that there's a right roadmap there. Bryan Fields: I think that the— Kellan Finney: Do you think that comes with product maturity? Like right now, I think it's probably challenging — say for pre-roll, they're still going through changes, right? Two years ago, Kellan Finney: the pre-roll that was constantly on the market is slightly different now, because they're learning, they're perfecting it, infusion is becoming a thing. So once it becomes a timeless product, then there's going to be margin compression and they're going to look to optimize that product. Do you think the industry just hasn't reached the point where a lot of these products have reached maturity from a product SKU standpoint, where they're looking to optimize every last input, Kellan Finney: from an increasing-revenue perspective, or do you think they're just kind of playing the what's-hot-now, keep-the-lights-on, follow-the-trends game? Seth Yakatan: I think it's the latter. And I also think you're maybe in the beginning of the second inning, or the bottom of the second inning, in terms of understanding lean Six Sigma manufacturing in cannabis. Because if you're asking, okay, am I trying to maximize the value of every factor input and use an SOP to do that, to roll across four states? Well, Seth Yakatan: in Illinois and Jersey it's really hard to get biomass, so it doesn't matter what your SOP is — it's, can you get enough product to put in your stuff? I also think a lot of what's gone on has to do with what the MSOs have done in the last Seth Yakatan: six to nine months in terms of right-sizing their organizations, down-regulating the amount of inventory they're buying, and looking at what the replenishment rates are and how those products sell through. So some of it has to do with, what is my end user? If I'm a brand, my end user is really the retailer. You can say it's the customer, but it's really the retailer, because I'm not getting paid by the customer — I'm getting paid by the retailer. Seth Yakatan: So a lot of it tends to be, what does that retailer need? And I don't want to say that's an inefficiency in our industry at some level, but ultimately I think it's the truth. So it just depends. Bryan Fields: I think there's inefficiencies everywhere Bryan Fields: that can be streamlined. And when you have an industry as early as you said, in the second inning, there are opportunities, and that's where businesses can really make money on the margins — maybe that means visibility into your cultivation to get better tracking and yield concepts. Maybe that means additional steps through extraction, understanding how the plant washes and how your extract moves all the way through inventory. And I think companies now recognize they have cash, and it's survival mode: do you deploy for growth or profitability? Bryan Fields: When you're deploying for profitability, do you invest in technology and automation, or do you just hold it and try to keep the lights on? I think that's the biggest challenge we're seeing — companies see opportunities and inefficiencies, but aren't sure if it's worth investing their cash to fix the leak, or just continuing the process. Seth Yakatan: I think some of it has to do with the front-end trade payable, trade credit side being so inefficient that, depending on where you are in the supply chain — cultivator, manufacturer, brand, asset-light brand, or retail — each of those factor inputs is different. One of the things I see is more technology solutions for cannabis than Seth Yakatan: I could shake a stick at — SaaS platforms, discounting platforms, advertising platforms. Seth Yakatan: A lot of times for me it's hard to differentiate the noise from the signal. So each consideration around, do I spend more money on technology to optimize, or do I just operate, is conditional on which of five or six boxes you fit in, and the conversation is different. Because even within the same company, like a Wyld or a Grön, if you're in many states, Seth Yakatan: the questions you're going to ask in Missouri or New Jersey are probably going to be different than the questions you'd ask in New York or Florida or New Mexico. So going back to one of your earlier questions, the complexity in cannabis is logarithmically greater, because the decision you make at the holdco level — we're going to do this, we're only going to buy red toothpicks — Seth Yakatan: because red toothpicks are five cents at Costco — well, you can't sell red toothpicks in New Mexico. So the things you'd normally do in a company to optimize a technology investment or rationalize an investment across your platform is very hard to do in cannabis, because of the multivariate legal system that exists in every different state. Kellan Finney: Yeah, it's almost like, how do you balance long-term goals and a big North Star in terms of justifying these investments with maintaining next year's profitability and cash flow, right? And I think Wyld is a great example of that — they looked at their gummy line, and I think it's really interesting that they went into beverages, which Kellan Finney: — if we just kind of highlight one thing you mentioned, there might be a bottleneck in the payables from the retailers. Beverages seems to potentially open up this whole other existing retail market, right, with hemp beverages, very similar chemical compositions, getting sold in standard retail locations. So that investment Kellan Finney: essentially is, or hopefully in their minds, opening up a larger market base for them from a consumer perspective — correct? Seth Yakatan: Yeah, I think so. Look, what I'm telling people in 2025 is survival is a win. I love sports — there's a tennis analogy called hold serve. What does it mean? It means if we're playing a game and I'm serving, I need to remain neutral, because the advantage goes to the server, right? So, Seth Yakatan: the people I talk to, I'm telling them, hold serve. You're in seven states — on those states, you're in seven states, maximize the value of those states. You're in seven states, figure out where you can get operational efficiency in those. Don't go chase Virginia. Seth Yakatan: Don't, don't, don't tell me you're figuring out how to get into Kentucky. Go own Jersey. You're the third-largest-selling edible in Jersey? Be the largest-selling edible in Jersey. You're the largest-selling edible in Jersey? Make sure the second guy doesn't become the first guy. Hold serve. And I think what I'm telling people, outside of the MSO view — if we're talking about the brands we always talk about — I'm telling people, hold serve, Seth Yakatan: because if you can hold serve, that's going to be a win. It's going to be a tough year. Hold serve. Bryan Fields: Is it hold serve through the end of the year? Is it hold serve with a target of end of '26? I know there's no perfect way, and I don't want you on the record giving me a date, but when you say hold serve, is it a shortened timeframe you're thinking? Seth Yakatan: My powers of prognostication relative to penetrating the Oval Office are quite low these days, so I don't know. I think it's hold serve through '25, and expect that unless there's some level of change in '26, it's going to be fair-to-middling or fair-to-neutral, or maybe worse. I don't know — our new DEA administrator doesn't sound to me like he's real friendly. Seth Yakatan: Also, something was brought up a couple weeks ago in Congress, the STATES Act, that looks like it would be a home run. So I don't know — we've all been in this ten, eleven, twelve years now waiting for that moment. For me, that moment is between now and 2032. And if that moment comes between now and 2030, I've augmented my view. If it's not between now and 2032, I'm gone — I'm a ghost, I'm in Laguna, Seth Yakatan: making beads, adios, peace out, my phone is done, I'm off LinkedIn, goodbye, come visit me at my hut. But if it happens, all the things we've been talking about break open and become crazy. Bryan Fields: I think that's the exciting, challenging dilemma, right — we all know we're at the cusp of what could be an insane rip-up on the graph, but also know the next six months could be insanely difficult, and likely more chaotic, more companies maybe not surviving — which is a growth opportunity, right, because if a company goes down, there's an opportunity to pick up that market share. Are you seeing any companies recognize that others are struggling and use this as a way to say, maybe growth isn't new states, maybe growth is Bryan Fields: expanding vertically into different supply chain assets? Seth Yakatan: I'm seeing companies do that within their own vertical — not necessarily going into other supply chain assets, but saying, I know I'm in this state and positioned here, I want to maintain or increase that position rather than deploy capital to expand. Or, I've made an investment to get into this state, I need to make sure that state's going to be good. I'm definitely seeing people Seth Yakatan: with success trying to take things into other states, and I am seeing some relative success there. There still seems to be action in Missouri, action in Jersey, action in Illinois and Ohio and Florida, relative to doing a licensing deal or bringing a brand to a place or trying new things. But more often than not, I'm seeing people clean up problems they have Seth Yakatan: or try to leverage the existing positioning they already have somewhere. There are a couple of people I know trying to get into places they're not, which I think is fine. The overwhelming question I get in Q1 and Q2 of this year is, what do I do? I've got a company, I've got this much revenue, I'm functioning, Seth Yakatan: I don't really need money, what do I do, I can't exit, what's next, what should I do? I get more questions like that than anything these days. And I'm just telling people, hold serve. Bryan Fields: It's such an interesting response, right, because there's wind at their sails, they've got a business that's working, there are opportunities to maybe grow, but maybe the best approach, like you're saying, is hold serve — lock down the hatches, figure out where you can improve on the margins, maybe operational efficiencies, maybe figuring out where you need visibility and tools to invest, and then prime yourself to be ready for when the unlocking happens. Set yourself up. Seth Yakatan: Something very interesting — when I talk to somebody, one of the very first questions I ask, even if I don't know them well, is, why did you start your business? And if the answer is anything other than to exit, then you know what I tell them? Hold serve. And if their answer is to exit, I say, hold serve, because Seth Yakatan: — here's the thing, you guys don't have me on because I'm a wilting lily — there are no fucking exits right now. There's no cash, there's no buyers, there's no equity, there's no public equity market, there's no euphoria, there are no exits. So if you're sitting here telling me you're going to exit for anything other than a little bit of cash and a little bit of paper, go sell that shit somewhere else. I don't care what you've got, I don't care if you've got gold at a discount in cannabis — there are no cash exits here right now. Seth Yakatan: There are no cash exits. And if I know the reality of the market is there's no buyer, then what do you do? You stay there as long as you possibly can. You squat if you need to, right? You don't pay the property taxes on the house, you don't pay the mortgage. How many stories have you heard about someone who sat in a house for seven years and never made a payment on it? Well guess what — that's a strategy. So my strategy — it's worked. So Kellan Finney: You're not wrong. Seth Yakatan: I know I'm not wrong. Here's the thing, K — I know I'm not wrong, that's why I'm so fucking angry all the time, because I know I'm right. This whole world we live in, and the capital markets, has been perpetuated on up-and-to-the-right constant growth. Well, if you're in a market that's kind of level, great — Wyld, Grön, Timeless, Aero, Rove, go crush the markets you're in. And you don't want to hear this — squeeze out all the little guys Seth Yakatan: who can't compete against you, own it, and wait. Because if you believe in the thesis we all believe in, waiting is going to make you better off, because there isn't an exit coming in twelve to eighteen months, unless you're in the beverage industry. Kellan Finney: So do you think this is kind of like an extinction event, almost? Because the companies that are there, like you said, holding serve — they're paying their bills, yeah, the cash flow could be better, but they're still in business, still making money. Cannabis isn't going away like we described, right? So is this essentially a culling of the herd, maybe? Seth Yakatan: It is — it's a quasi-extinction event. I don't know if I've talked about this on your show, but I've talked about it before. One of the most interesting, wonderful, lovely things about cannabis is that cannabis doesn't allow for a true extinction event, because you can't bankrupt a company. You can foreclose on a company, but you can't bankrupt it. So the remedy available to an investor in most any other industry, which is bankruptcy, doesn't exist in cannabis, because cannabis is still federally illegal. Seth Yakatan: So cannabis, unlike any other industry I've ever witnessed, perpetuates the proliferation of zombies for longer than any other industry I've ever seen. So do you have zombies? Yeah. Do you have some people who proactively say, I'm done, and it's an extinction event? Yes. But the harder it is to get capital into companies and the harder it is to achieve exits, the more people you'll see throwing in the towel, and the more zombies you'll see proliferate. Seth Yakatan: There's also something else we don't talk a lot about — black market incentives aren't aligned to regular market incentives in cannabis. And now you have this whole hemp outlet. So something else that will probably perpetuate zombies is if you have a company making green pre-rolls in, say, Missouri or California, an eight-million-dollar-a-year company barely making money. Well, Seth Yakatan: they might be able to pump out a couple million dollars illicitly and survive. And they might be able to pump out a couple million dollars cloning that and making it a hemp product, and actually make money and stick around. So you have three or four proliferation mechanisms keeping cannabis companies in the ICU that you don't have in biotech, manufacturing, AI, tech — you name it — because you're just going to flush those companies. Whereas cannabis, you recycle them, Seth Yakatan: for some reason. Bryan Fields: Can you just define zombies so everyone's clear what that means? And can you explain the approach of pivoting to the black market, in case someone listening doesn't understand what you're referring to? Seth Yakatan: A zombie is a company that should be dead and isn't — a company that, for whatever reason, is sticking around and hasn't gone through a traditional bankruptcy process, for one of two reasons. Today is May 7th, 2025. Yesterday there was a deal announced for a company called Red White & Bloom. Seth Yakatan: That company is a fucking zombie. There's no possible reason that company should be alive, no possible reason it's going to maintain success. The only reason it's still alive is because the debt holders, I think, didn't want to take a zero write-down. So they did a deal to basically keep the company on life support for an extended period, to not have to do that. That's a zombie. Seth Yakatan: In any other industry, that company would have been bankrupt, the debt holders would own the equity, it would have been taken private, and if there was anything left to salvage it would have been sold and lived to play another day. Doesn't happen in cannabis. You guys aren't old enough to remember that in the 1980s, one of the three largest automotive companies, Chrysler, went bankrupt and was bailed out by the U.S. government. Guess what — still around. So, Seth Yakatan: bankruptcy is a capital markets function that allows a company to right-size itself in a legal fashion. Doesn't exist in cannabis, and that's what a zombie is. You can see a zombie coming, you can smell it coming down the hall to a meeting with you. It probably owes you a ton of AR and hasn't paid bills in a while, but it's still got product on shelf and it's still showing up at the shows with new merch. Bryan Fields: That was great, that was perfect, well articulated. Now expand on the company that pivots into the black market and survives, because I think sometimes people don't recognize that we're forcing companies to move in these directions just based on the situations we've set up. Seth Yakatan: Let's do a very easy model. If you're a legacy cultivator in California, you have little to no incentive to be compliant. So if you have a six-hundred-light facility in LA that throws off six, eight, ten million dollars a year in revenue, maybe — well, if you're not licensed and you don't have to test and you don't have to Seth Yakatan: pay taxes and you just traffic it, that's a pretty profitable exercise. If you're fully compliant and legal, you're barely going to make money given taxes and utilities and rent, unless your stepmother's cousin owns the facility and you're sharing power off a generator or something. So if you look at the way the industry's been created, Seth Yakatan: it's just hard to make money operating compliantly. Plenty of people do it. But if the industry was built by people who operated in the dark and were successful in the dark, the only thing looming over the dark was potentially getting pinched, right, and if you were real, you probably eventually got pinched for some reason, and you know how to operate that way — why would you come into the light? When you look at how easy it is, Seth Yakatan: in a couple of different verticals, to do that — if you look at retail, it's also probably pretty easy to do, if you want. And it's not just cannabis — I was involved with a sports nutrition company where we had a franchisee who, every product we sold, was buying one, getting one free, and selling it on Amazon. So it was kind of like, okay, well, Seth Yakatan: because cannabis is so hard, I think it creates more opportunity for this diversion. And because the root of the industry was in illicit methodology, it just makes it easier for that to occur. If you look at what occurs in California during Croptober all the time, that's what you're seeing — a bunch of guys who've lived on the hill, operated on the hill, and are comfortable doing that, Seth Yakatan: making their money. Kellan Finney: Isn't this a really similar series of events to what we witnessed with alcohol? Because alcohol was legal, then Prohibition, then became legal again, and you didn't see any robust— Kellan Finney: alcohol companies until the mid-'40s, right? I know World War II was in there, and Prohibition was still kind of around for like a decade after legalization. It took a while to get that whole thing cleaned up into the world we now see with the alcohol industry. Seth Yakatan: Yeah, Seth Yakatan: twenty years, twenty-five years. So yeah, it's the same level of incentive. You still probably know someone in North or South Carolina who has a cousin's buddy's relative who makes moonshine you drank once in a while. So yeah, very similar — it's interesting you bring that up. I unfortunately don't have as much time as I'd like, and one of the things I actually want to do, Seth Yakatan: and it's been on my list, is to really study the commercial rollout of alcohol from the relaxation of Prohibition until about 1955, to see how that happened. It's not something I've had time to do, but it's definitely on my desert-island to-do list. Kellan Finney: Yeah, it was, definitely on mine. Actually, side tangent — I can't look that stock data up right on the internet because it's too old. You have to go to the Library of Congress and physically pull all that historical data from like 1900 to 1950. Yeah, I tried — you can get to like 1975. You have to go physically there. Seth Yakatan: Oh really? So you have to go into your— Bryan Fields: One of us has done this. Seth Yakatan: So you're old enough to have gone into the microfiche and done all the real research and pulled the patents from the patent office, because somebody's done that. Anyway, yeah. Bryan Fields: We can elaborate, but I think the main critical point is that sometimes people forget how long Prohibition lasted with alcohol, and with cannabis there's so many ups and downs it feels like probably a longer period of time than it actually has been. Maybe it's fair to look to alcohol and say, okay, it took X amount of years to get to this point and have a thriving market — people just need a longer-term horizon in mind. Seth Yakatan: Two things. I was a history major in college, so the only thing I really have to look back on is history, and in U.S. history, the only real corollary for the legal commercialization of cannabis is the legal commercialization of alcohol. It's the only one we really have, so it's one to study. The second thing is it's inverse in order, right — alcohol was legal forever, then it was prohibited, then it was legal again, Seth Yakatan: whereas cannabis was basically illegal forever, then marginally allowed, and now it's allowed on a patchwork basis. And again, until — and I'll preach this till 2032 — until you have some level of federal clarity, even just making it Schedule III and letting the states figure it out, I'm fine with that, you're going to have all these misaligned incentives around trying to Seth Yakatan: make more money or be more successful. And I just think the way many states have rolled cannabis out, specifically California, it just makes it really, really, really hard for someone doing the right thing, doing it legally, doing it by the book, to be successful. And that disappoints me. Bryan Fields: Are there any outside-industry companies you're tracking as a signal that change could be on the horizon, and some of the bigger fish are going to be operating here more in plain sight? Seth Yakatan: Well, we touched on drinks — hemp beverage is hotter than hell. I've been to two non-cannabis, investor-oriented industry meetings in the last thirty days — one in Chicago called So Curious, put on by a group called Listen Ventures, a large consumer private equity fund, and a second put on by a group in LA called LA Libations, called The Beverage Forum, which is literally like Seth Yakatan: the whales of the beverage universe forum, is what it should be called. Seth Yakatan: There are certainly a lot of people in what I'd call the regulated alcohol and spirits industry interested in figuring out how to get into cannabinoid, hemp, delta beverage, for a lot of different reasons. So that's the one space in cannabis — if I put everything in that box — where I've generally seen the most activity in the last eight to ten quarters. And it seems like there are Seth Yakatan: non-correlated, non-cannabis-oriented equity funds and investors looking at it — BevBev and Listen Ventures are probably at the vanguard of that. There are also fairly large, some vertically integrated, some not, family-owned distributors of alcohol in the three-tier system throughout the United States who seem very interested in the space. So, Seth Yakatan: I do believe that if you get some level of hemp Farm Bill clarity around what happens federally there, you're going to see some heavy activity in that sector. Very heavy. Bryan Fields: Any companies or strategies you'd say, this is what I'd recommend if I were speaking to someone? Seth Yakatan: You have a couple of cohorts that have formed — I've been tracking sixty companies in that space since October '23, and you have two cohorts. Right now that sector is a race to the first company to a hundred million in revenue — I thought it was the first to fifty, I've changed that yardstick. You have about five companies in the lead — Cann, Kickback, Delta Bev, and a couple others are probably in the Seth Yakatan: lead cohort, and a second cohort that's probably at ten to twenty-five, trying to get to fifty, all with different flavors, models, and methodologies. I think Seth Yakatan: figuring out a way to grow rapidly in that space intelligently is smart. I think figuring out a way to — I hate to say this — cleave the cannabis business from the hemp business at some level, so the hemp business stands alone, is smart. I think figuring out your balance between DTC and brick-and-mortar retail is smart, and figuring out how to operate within the three-tier system is smart. Seth Yakatan: There's a lot of complexity there. Some people manufacture, some just do spirits, some do beer, some do pieces of all of it, some just distribute — it just depends. But there are two things that seem consistent. One is that the twenty-four-to-thirty-six-or-whatever younger demographic is drinking less beer, period. Whether you believe people are drinking less alcohol overall, Seth Yakatan: they're drinking less beer, and what they're clearly doing is substituting with something else, which may be cannabis, may be hemp, may be smokeables, may be beverages — but they all see cheap beer sales going like this, and they're replacing it with hemp beverages, whatever shows up, and it seems to be selling. The velocity of this cohort Seth Yakatan: has certainly surprised me. I've been a very early supporter and advocate of Cann, and I think it's one of the leaders in the space, has a great team, a great group of investors. But what they've done to blaze the trail in that industry has now been backfilled by fifteen or twenty very fast followers. Bryan Fields: Yeah, the beverage space is absolutely wild, and it's exciting to watch it proliferate. I was in Florida a few weeks ago and went into a general retail store, and right there on its own counter was a ton of THC beverages, and the staff was unsure about it but knew they were selling really well, and I thought that was exciting. It was just a regular store. But before we finish, I just want to get your take on LinkedIn — I know you're super active there, I know there are a few things you're working on. Anything you can share with us now? Seth Yakatan: Started a new consulting firm this year called Ordo Verde, focused on cultivation, manufacturing, product, and retail. We picked up a fairly large MSO enterprise client, put that together with Tobias Rich and Danny Sernaqe and Nathan Batzer, and I'm really excited to roll that out in a couple different places, trying to help people hold serve. That's been fun. LinkedIn has turned into a thing of its own. Seth Yakatan: I'm not sure it's about anything other than putting on there what's in my mind and what I want to say. I've committed to a strategy, that strategy seems to be working, I seem to be one of the loudest voices on the platform, and I'm just continuing to try to push my dominance and presence there as much as I possibly can, Seth Yakatan: and I'm appreciative of partnerships with wonderful people like you guys at The Dime, for providing me a platform for my voice and for more content. So I'm grateful to you guys for that. But yeah, it's been a wild ride there, man. Wild. Bryan Fields: I love it. So for our listeners who want to get in touch — which they surely know how, on LinkedIn — where can they find you? Seth Yakatan: LinkedIn's probably the best first place to find me. I have a Katan Associates website, I have a Seth Yakatan branded website, I have an Ordo Verde website, and I have a newsletter link on LinkedIn where you can get my fresh insights all the time. I'm probably going to try to launch a product or two on LinkedIn — I certainly think the cannabis media space has opportunity to do some things there. Seth Yakatan: I'd certainly want to promote the Green Market Report Brothers event last year, which is a good place to find out what's going on and plan your conference schedule. But yeah, I'm super supportive of the support I've gotten there, and honestly, the numbers I see on my own posts on a daily basis, I don't fully believe in many parts. I'll say one thing — there's a guy in India who's probably making a lot of money off me, because Seth Yakatan: of the bots in my feed. I've gotten to the bottom of it — there are people who get paid for clicks, and I'm convinced I made a small village outside of Hyderabad a very nice sum. Bryan Fields: I love it, I love it. Well, hopefully that family starts engaging with our content as well. So Seth, thanks for taking the time, this was a lot of fun. Seth Yakatan: Appreciate it guys, thank you.