Welcome back to Higher Exchanges, the number one independent cannabis investing show where we break down complex cannabis markets into clear insights you can actually use. Here are your hosts, Jesse Redmond and Morgan Paxia.
Welcome back indeed. I am Jesse Redmond, chief strategy and investor relations officer at an amazing company called Leaf Brands. And I'm here once again with the smartest cannabis investor I know. He is the co-founder Prooseidon. His parents named him Morgan Paxia. Morgan, what's going on, man?
I'm doing great. Uh, that was a you caught me off guard there, but yeah.
I try to switch it up every week, otherwise it gets too dull. Throw you off a little bit. Keep it interesting.
How are things?
Oh, good, good. I was on the road earlier this week and out in a different market. Can't talk too much about it publicly, but it was cool to be checking out something very different from cannabis, something tangential with one of our cool companies. That was a lot of fun and learned a lot about a whole other sector that has parallels or rhymes to so many things. It was great to meet with very large industries doing very different things, but there's still applicability to what we do here.
Yeah, absolutely. Well, that sounds fun. Got yourself a good tan there. Our guest is with us as well, and he was pointing out that you had a fantastic tan. He was asking if you were skiing, and I thought you were probably out on your sailboat. Did I guess that correctly, Morgan?
Correct. Yeah, spring is in the air in Southern California. It's already 74 here today, and it's been a great few months. So yeah, try to get out and get that vitamin D.
Nice. Well, let's not waste any time. We have a huge guest today, one of our favorites. He's Boris Jordan. He is the chairman and also the CEO of Curaleaf. Boris, welcome back to the show. Thanks for joining us.
Great to be here guys. It's been a long time and nice to regroup again.
Yeah, it has been. I think we were speculating it's been at least 12 or 18 months. Probably longer than 12. I think it's your third time on the show, and Boris, it's your first time since we switched over to video as well. We used to do the old Spaces thing back in the day.
Yep. Yeah. Do they even have those anymore?
I don't see many on the cannabis side. I see some of the crypto guys doing them. So, I think the functionality exists, but it feels like it kind of went the way of Clubhouse. Do you guys remember Clubhouse back in the day? Like during COVID?
Twitter. Twitter destroyed Clubhouse, didn't they? They copied them and that was it.
Yeah. No more.
Well, Morgan, why don't I'm excited to dig in. So, but before we do that, do you want to tell me about some awesome dispensary software out there? Sure.
Well, big thanks to Flowhub for sponsoring these episodes. One thing I respect about Flowhub is that they're not just a platform. They're out in the market at events, meeting retailers face to face. Coming up, they'll be on the ground at Hall Flowers Ventura and the Exchange in Oregon, which is March 18th and 19th for both shows. So if you're at either show, go find them. These are people who actually care about your store performing. So thanks to Flowhub.
Great. Yeah. Yeah. I'm going to head over to Are you going to you're probably not going to Hollow Flowers and Ventura, are you, Morgan?
Yeah. It's only a half hour or so for me, so I'm going to roll over there, see some of the brands we work with, see some friends, and at least spend next Wednesday out there. And I was chatting with Annie at Flowhub, so hopefully run into her and say hi to Kyle and the team over there as well.
Fantastic. Yeah, I'm sure it'll be great. We've got some portfolio specific stuff going on next week that will keep me from venturing up there.
Yeah. Well, let's jump into it with Boris. And man, Boris, I don't know if this is the worst topic, your favorite topic, or somewhere between, but we are in catalyst season and we're going to have thousands of cannabis investors out there, waiting for something to move on rescheduling. So let me start off with probably the biggest headline: what are you hearing? When do you expect it to happen? Do you still expect it to happen?
Great question. First of all, I'm surprised there are still cannabis investors. It's been a long time since, except on the debt side, that I've had a meaningful call with investors on the equity side. But for those that are out there and still believe, I do believe it's going to happen and the risk that it doesn't is very low. The question I can't answer is when. There's a lot going on in the administration and at the DOJ. As you know, we are very much as a group involved. Everyone is working on it. There's discussion at every level of government. There's a lot of conversations on how to do it in a way that it's not overturned. That's the big issue, especially after the tariffs. The administration doesn't want any major initiatives to get overturned in court. So that's what the DOJ, DEA, and White House are working on. It's only been about three months since the executive order, which is not a long time for a major initiative. Without going into details, I can say they are sincerely working on this and want to get it over the line. The question is when, but I don't think there's a risk they don't get it over the line.
Do you have any expectation about clarification on states' rights under Schedule 3? Or more specifically, is there a path to descheduling? Do you expect anything on either side?
We haven't seen the rule. If they go with the Biden rule, then there isn't anything because we saw that rule. If they make amendments, it could change. My gut says they'll tackle that separately. I don't believe they'll deal with markets in the rescheduling. Opening that would create a can of worms for lawsuits. They want to deal specifically with rescheduling, get a rule that can hold on its own and not get reversed.
When you look out a year from now with final rules in place, what do you see as the biggest benefit of Schedule 3 to Curaleaf in particular?
For the whole industry and Curaleaf as a part of it, it's breaking the glass ceiling. In states, we've seen restrictive medical programs get eased over time. My contacts in the Senate, House, FDA, and HHS are all waiting for this rule. The IRS is also waiting. Right now, dealing with a Schedule I substance is money laundering. Most companies are conservative. This rule will break that barrier. It moves cannabis from Schedule I to III. 280E goes away, at least back to January 1st. More importantly, senators have told me they won't look at SAFE Banking until rescheduling happens. Pennsylvania Republicans said they won't look at legalizing cannabis unless it's Schedule III. A lot of people are waiting for this to happen, and it will get the ball rolling on initiatives in the sector.
