We sat down with the cofounder of Canada’s leading publication focused on the emerging North American Cannabis industry. Jay from Business of Cannabis gives us a 101 on how the industry is structured whilst recounting fun anecdotes and an update about being acquired recently by Prohibition Partners from the UK.
StartWell Podcasts on the Web: https://startwell.co/magazine/podcasts/
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Business of Cannabis: https://businessofcannabis.com/
Qasim Virjee 0:28
Welcome back to the StartWell podcast once again, I am Qasim and today I’m joined in studio by J. Rosenthal, Jay came to start well as a member used to record in this very studio that didn’t sound or look as good for the business of cannabis. And that is the domain name on your T shirt.
Jay Rosenthal 0:51
Always be branding.
Qasim Virjee 0:52
I guess so. I wore the wrong thing today,
Jay Rosenthal 0:56
well get your shirt.
Qasim Virjee 0:59
No, I didn’t mean that I didn’t wear you, oh, man, I don’t know wearing my shirt. You know, I could wear your shirt if you want.
Jay Rosenthal 1:04
I only have three shirts, they all say the same thing. And I just keep wearing
Qasim Virjee 1:07
J. I want to talk a little bit about how you came into the world of cannabis and your personal experiences with you know what you write about now? Business cannabis the intersect. And then I want to kind of explore what your lenses on the industry because so much has happened since you came to start well as a member a couple years ago, and things opened up legally. And I personally am totally in the dark about it. I’m sure a lot of my audiences. So I’d love to illuminate them. And first off, yes. Welcome back.
Jay Rosenthal 1:39
Thank you. These are a few of my favorite things to talk about myself. And we’d Excellent. See what? Let me talk about how I got to start? Well, first of all,
Qasim Virjee 1:49
I’d love to hear that because
Jay Rosenthal 1:51
I was looking for a place to record really worst versions of what we’re doing right now. Yeah, where I would have people come in wanting to be around downtown. And at the time, there was this real trend of like all the cannabis CEOs coming through downtown Toronto on their, like their money show, basically, right? They were raising capital, raising capital going public talking to investors, base street meetings, right? Like, do 20 In one day, 22 days, I wanted to be in that stock so we could get them talking about cannabis. And it was great. And this was a great location to do that. And then they stopped coming because of COVID. That was part of it. And then we were fully remote. But it was the time and business of cannabis. And we were like if we could just do something nearly every day, right? We would just be filling a gap. And people are just hungry and thirsty for this information, both in the industry outside the industry looking in. And that’s what we needed a space for. And this was like ideal we did events here to
Qasim Virjee 2:45
know tell me a little bit about the backdrop like career backdrop or otherwise interest backdrop, how did you get involved in kind of like documenting what’s going on in this? You know, totally nascent at the time. I mean, even now, it’s only been a couple years, right? So it’s still very young. Yeah,
Jay Rosenthal 3:00
it’s funny, I was just we were just in Las Vegas last week for the big trade show and cannabis. And some were saying like, what was your background that brought you to do this? And I don’t believe I’m called to do this by like some divine intervention. Sure. But my background was perfectly suited for this at this moment. So let me describe so one I’ve always liked weed like, I have an older brother, older sister. I think that’s how most people find their way into weed. I was like four years younger. Yeah, my brother would. If my parents ever listen, I’m gonna be pissed. My brother would send it from Syracuse, New York to Boston, Massachusetts, when he would come home. And that would be the kid in high school with weed like a fantastic good guy to be
Qasim Virjee 3:37
honest. All older brothers listening to this. Do it. My brother knows he knows the story. He knows this jam.
Jay Rosenthal 3:43
Yeah, in that’s fairly common that and like summer camp in the whole thing. So like, I’ve always liked cannabis a lot. And my parents are not permissive in any way. But like we knew they used cannabis in the 60s. Oh, right. Like I’m from Boston, Jewish kids from Boston. They were Jewish kids from Boston to like, this is just part of the thing that that awakening. Yeah, I’m not sure. Like, yeah, it’s not like a religious thing. But it’s like it’s we had to do well in school. We had to work
Qasim Virjee 4:09
hard. And you weren’t allowed to wear shoes.
Jay Rosenthal 4:10
I grew up on a commune. No, so that was like the that was the earliest introduction, I guess to the actual to cannabis. Obviously, university used a lot of weed to
Qasim Virjee 4:22
go to university.
Jay Rosenthal 4:23
I went to school in Atlanta. I went to Emory University. I’m American. So I went to Emory. I did I know people are surprised as shocking. Yes, I did. I know. That’s the number one response. So you went to Emory. Wow.
Qasim Virjee 4:37
Then again, I went to McGill. Okay, so I’m going to maybe smarter than Emory. But then again, I’m not in the cannabis industry. So you know,
Jay Rosenthal 4:45
that’s true, relative to people who know so I went to Emory in Atlanta and then went to work on Capitol Hill straight out of university. So I went to work, you know, for us, Senator. So I was really involved in politics policy the whole bit, and then went to work in her California Office as well. So no boxes. And I got to San Francisco. That’s where I was working and you know, cannabis culture in California has. It’s ingrained.
Qasim Virjee 5:07
Of course. Yeah. But since those same days, right since the 60s Oh, yeah. It’s been just like baked excuse me into the culture.
Jay Rosenthal 5:13
Yeah, certainly in San Francisco and even broader, you know, Oaksterdam and Oakland is sort of part of the law of cannabis, but also, you know, Mendocino and Humboldt County, New York, couple County, Northern California, like this is where weed grows. Right. And I was working in then I went to work in local government then went to work for sort of policy and sort of public affairs shop. And then once I started on my own, but I was always working in heavily regulated industries, energy, natural gas, healthcare charter schools, that was sort of my book of work when I was doing work for myself. And that, that translates really well to heavily regulated industries, no matter what the industry is, right? So it could you talk about energy and utility or cannabis, it’s heavily regulated, used to build constituencies to move policy and politics forward. So like, that was part of my background, what I was doing professionally. And this is, I can’t believe this actually turned out to be helpful. Okay. One of my clients in when I was a consultant was a garbage company that was trying to retain a $700 million contract, like a 10. Year $700 million.
Qasim Virjee 6:17
I mean, they were actually in like, refuse as an industry. Yeah, they were a piece of garbage that the company that you refuse
Jay Rosenthal 6:23
as an industry. Okay, so we’re great people. Okay, wonderful. And they covered a big chunk of the Bay Area in California, huge contract, you know, a decade long,
Qasim Virjee 6:32
obviously founded by a guy with like, a short pinky finger, and like little Jimmy, you know, but
Jay Rosenthal 6:36
it was, it wasn’t. That’s how they found that’s all garbage companies were founded generally. Yeah, this one had become national and, and international, even then was publicly traded, but, okay, they had this contract, they wanted to retain they need local consultants to help them do that. I was one of the local consultants, one of the things they needed to do was look at the local news every day and like 20 different communities, okay, like little teeny blogs to like weekly newspapers to Alt weeklies like they wanted to know was in there. And if anything was relevant, not just a garbage, but to like public affairs, what was happening on the ground. I said, if I’m gonna aggregate that on a day to day basis, which is like so painful, it’s awful. I would like take that and send it to them, like in the format they wanted. And I would like write it up and put it on a blog. It was a news aggregation blogs, like an internal journalistic role, kind of, yes. But then I would put a little snark and I would do it anonymously to this political watchdog No, like website, like, basically, if I, my whole thing was if people who are in politics or policy will read this every day, and those 300 people that work in it every day are reading it, then I have a little power. Right. Like, and I know enough about Google, you know, if people have, you know, Google on for their own name, like if I put their name in it, it’s gonna get
Qasim Virjee 7:46
hurt, and they’ll feel special. And then you’re, you’re making them feel special. So you’re special.
Jay Rosenthal 7:50
Right? But they didn’t it was me, but but the whole thing was like if you could do the rigor of doing it every day. Oh, was really the lesson there. Like interesting if you could do something every day. Yeah. That people read even if it was only three or 500 people then there is there’s power in that. Yeah. And it’s really hard to do. Like, it’s the reason why most people’s entrepreneurial visions fail because they don’t have the rigor to do it all the
Qasim Virjee 8:14
time. Yeah, do whatever it is that they need to repetitively, yes. And reportage particularly, especially if it’s on the same kind of stuff, right? It was,
Jay Rosenthal 8:21
so it was a grind. And I did it for like, six years. Like it was really, that’s a long time. And I did it even when I moved here. I was still doing it there. So like, wow. And then I sold it for like, for the amount of hours I put in I sold it for like, like maybe a cent an hour that I put it, okay, like it was less than 20 grand that I sold it for seemed like a huge amount of the time like oh my god, I did something and sell it for 20 grand. You finally bought some shoes. Yeah, basically, like, got paid the internet bill for the past six years, like it was like it was I’m glad I did it. It was unreal experience. But between the heavily regulated industry stuff that I was working on, and the daily rigor of doing it everyday, like, those two pieces were important. I didn’t put them together yet. When I moved to Toronto in 2012, I went to work at an agency, it was really good experience. Like I needed to build a professional network as a creative but marketing like social purpose. It was like a, like a marketing agency for social purpose causes Cool. Well, and interestingly, we had I was working on two contracts with Public Health Agency of Canada. So like I was sort of seeing what was happening in Ottawa understood kind of what was happening with cannabis still liked cannabis a lot. One woman that I was working with at this agency and another who I’d met along the way, we convened to like what are we this is 2016. What are we going to do in cannabis like we all like cannabis. We know that that’s how we we are a part of this tribe. We all come from slightly different backgrounds. Professionally, is there something for us? I was like, oh, that sounds like oh, maybe there is and so we started meeting with anybody we knew one of them was a lawyer. We met with lawyers at all the big firms downtown that were doing work in cannabis. One was in video production and film and an agency work and she said well, I think you could really do something here if we produced content And then we said, well, what are we going to do? And in mid 2017, so this is the year before legalization, right? We said, oh, you know, we’re meeting these lawyers and they’re introducing us to technology people they’re introducing us to like growers are would be growers and extractors. And people want to build brands and all this. And it’s very compelling. And the entrepreneurial vibe in cannabis was very similar to what Silicon Valley’s but like people just pushing their chips and without understanding what the industry gonna look like, because it was exciting. It was crazy. Yeah, crazy. Exciting, right? And we said that, that maybe that’s the thing, like, let’s focus on these entrepreneurs who are doing this thing. And like, entrepreneurs who are like really like pushing chips, and like they have a piece of land, they’re going to build on it. And, frankly, like lawyers at Big stodgy firms who were putting their professional and personal careers on the line to do something in this industry, that people were sort of questioning. And that was instinct. So if we said if we could reflect the industry really to itself and maybe to the outside world, we will have done something and tell those stories. Yeah. How are we going to do that? We have no idea. So we went to the Globe and Mail we said if we can help tell the story to Globe and Mail audience like that’s a good you know, the industry is not getting not getting the vibes that wants from that sort of that set in Canada. So we went to globe mail to sell us a cont sponsored content section we will program against will put together who’s who and Kagan cannabis, this is 2017. Like, who are the accountants? Who are the lawyers? Who are the growers? Who are the people that are going to do interesting things. And we spent six months selling ads into this section. It opened every door in Canada, but it’s digital are those also in there’s gonna be a real print thing. Okay, okay, let me let me get to the punch line. But we met like it really opened doors because A, it wasn’t as busy as it is now like, and there weren’t that many players, to be quite honest. You know, we had probably 25 advertisers that were ready to buy into this eight page section, the global mail is jazz, because they had some distance, what was happening, and they could at least reap the benefit of this money that was coming in. And we set in a set a date for an event, I think the date of the event was going to be November 28. The piece was going to come out November 29 2017. And we had an event set a deadline. So law firm downtown Toronto, we had a panel set up, we’re like, Okay, we’re gonna invite anybody we know, in the sector, we, this is gonna be great. And then the thing will drop the next day, like three days before the event that globe mail calls back and said, Actually, we’re not doing it. Now. Here’s your money back because of legal concerns, which they’d already signed off. But yes, because of legal concerns, which was fun like it. In hindsight, it’s a blessing, we got to call back our 25 advertisers say we’re being treated just as crappy. We are marketers just like you, right? Leave us your money. And we will give you value over the next year, I was a really large business of cannabis.
Qasim Virjee 12:32
We went to come a media company of your own. Yes. Direct to Consumer Direct to business like rerolled.
Jay Rosenthal 12:39
So b2b, like we did this, and then we had this event. And then I was standing with my two business partners at the time. And we’re looking at these 300 people, most of whom we did not know, right, but we also realized they didn’t know each other. Yeah, like, how can these people know each other? They are the people we know in the sector, if they don’t know each other, looking suspiciously at each other. They don’t know each other. Like one one eating me. One grower came up to us and said, Hey, that’s, I’ll take it. That’s John Prentiss from Apple organics, who at the time was nobody was like this, this software that growers needed to track every seed to sell.
Qasim Virjee 13:10
I remember that game. No, I do. Yeah, that was like a
Jay Rosenthal 13:13
big, it was a big deal. They had like 200 employees here time that they’ve since been sold. But we’re like, Well, we know John really well. But we also know you grow really well. How do you not know each other like this seems wild. And we make connections. And so it was a little bit like we felt we were late to the game. But really the industry was needed some sort of organizing principle around it, or maybe a company like talk about it all the time. And so we this was November, late November 2017. And we had like maybe a four week or five week gameplan of what we were going to do one we were going to do this thing in the globe mail that went away. We were going to do this event. And then we pushed out digitally. This this thing that we had produced and made people give us their email address to download it. And like all of a sudden we have like 2000 people that we’re talking to on a regular basis. We’re pretty good at a weekly newsletter, which is another part of the plan. We conducted a nationwide poll with Nanos research about what people were thinking about cannabis and legalization. We did some research with the human resources professionals Association about what workplaces were ready for. This is like our first six weeks. And like we started getting media attention for ourselves. I was on BNN Bloomberg, like, I was like, Oh, this is like happening. Like, we’re really talking to the industry. That seems cool. We’re actually producing our own news that is getting picked up by others. That’s really good. And we this, we have a game plan. There was a major conference in Vancouver that was not ours in early 2018. We said if we could release our data that week, and then while people are sitting in the b2b conference, like pinging them with our data points, like with graphics, not the people are bored at conferences, but people are on the phone at conferences,
Qasim Virjee 14:43
and they’re much more excited when they see graphics.
Jay Rosenthal 14:46
Right. So like, so there’s so so what happened, though, so what happened was, yeah, they’re like, I was actually on the show, but the week we released this poll from Nanos research we got on Bloomberg. That week too. So like People are sitting at this conference on a Thursday. Yeah, we’re posting all of our stuff from the previous week. They’re eating it up. I mean, I, my I think they were eating it up. Yeah. So when I finally got the conference on like Friday, people like, oh, we just saw you on Bloomberg, which I know seems like it’s one small three, set three.
Qasim Virjee 15:16
In this like emergent industry. Any coverage was like, a pathway to success, perhaps for some of these people.
Jay Rosenthal 15:24
Yeah. And so we saw, like, in this six week period where like, we’re like, like, our strategy is working like we are attracting an audience. People are reading our stuff we’re getting, we’re releasing our own news, making news. And then the six weeks was kind of up. We’re like, holy shit. Yeah. But I sat at a different co working space knocking doors, okay, a really crappier one, and was talking to my business partner who had since moved to California. And we’re sitting on Zoom, actually. And I said, Wouldn’t it be interesting if like, the conversations we have all the time when we’re sitting in people’s conference rooms? We actually just videotaped through zoom? Yeah, I did. Like, what what video app lets you record? Yeah. Zoom was the only one at the time. Yeah, it’s still kind of the only one like you can’t record. It’s difficult to
Qasim Virjee 16:03
figure it out. That’s a whole different session. So he can geek out on that topic. It’s
Jay Rosenthal 16:08
it. We did it poorly for a long time. But yeah, I was of the belief. Because I’m super shallow. That like, if you fed people’s social media feeds, they will respond. And if we get the right people and leverage their networks, we will build our network. Yeah. So who are the people? We know what the biggest following yeah, let’s get them on a zoom. Because they’ll give us five minutes at their own desk. Like how hard is ours? Yeah. And we’ll record it and put it through people’s thing. And that’ll fit our website as well, if you don’t newsletter, right. And that’s, that was sort of, in February 2018, after our six weeks of runtime went out. Yeah, we had to people’s money, we need to give them value, this is where to give them value. Then we said okay, we also need to have events because we owe people real dollars. The only way to really provide value in real dollars to have an event everybody’s a medical cannabis at the time because legalization had happened. We launched something called medical cannabis week we invented it, but all of a sudden, we’re driving 400 People at the Masonic Temple. Right that iconic building on Yeah, explain
Qasim Virjee 16:59
it for the non Toronto. Oh, so let’s Masonic because otherwise you just sound like you’re taking your shoes off.
Jay Rosenthal 17:05
Triple is like a Masonic Temple is a it’s iconic. venue in Toronto. We’re like huge. People have played and it’s a beautiful building. It’s a beautiful state. But historically, it wasn’t Masonic. Yeah, totally wasn’t talking about that. It became a concert hall. And like all the CTV took
Qasim Virjee 17:21
it over Canadian television. Yeah. Or whatever. But
Jay Rosenthal 17:24
yeah, yeah. And then it like we had an event there. And like 400 people showed up. Well, holy shit. Wow. We’re five months. This is fun. We’re five months into our venture and like, people are sponsoring our stuff. They’re coming to our stuff. They’re super keen to work with us. Yeah.
Qasim Virjee 17:36
They’re buying tickets. We’re the punters buying the tickets. Yeah. So there was buy in and people were like, really? Yeah. I think it sounds interesting, because it’s two things, right? It’s like the the media publication side. And then there’s also this kind of networking thing. And you were the glue in the Toronto ecosystem around cannabis and
Jay Rosenthal 17:54
even broader, like, then we started attracting people who weren’t even from Toronto. Like, oh, you speak they’re like, Yeah, well, like, Oh, you’re not in Toronto. And they said, lots of fine. I’ll just get to Toronto. Like, oh, you’ll fly here to meet with me. Exactly. And many of them were saying, we’ll just come to your studio. I was like studio, like, have you seen our stuff? We’re literally on Zoom. My basement? Yeah, there was no studio.
Qasim Virjee 18:14
There was just, you’re like, Okay, you can sleep on my couch, man. Yeah, that’s basically what it was. And wow, so that was the beginning. That was the foundation that was like, pre legalization and pre legalization pre
Jay Rosenthal 18:28
everything. Just, you know, we’re we’re gonna do this thing. And, and it was funny, I did a conversation podcast, not that long ago. Like an entrepreneur thing. Like someone saying, Well, what was the what was the drive was like we didn’t have there’s no option of fucking up like, Yeah, this is what you were doing is what I was doing. And we like, I’d push my chips and like, I’d left my job to do this. Right. Like, I have kids. We have a mortgage. I have a white like, so what did your family think about this? I had a very long conversation with my dad about it. Okay. It’s like, here’s what we’re gonna this is 2017. I said, here’s what I’m gonna do. Like he said, sounds like there’s money in that. Go do it. Yeah.
Qasim Virjee 19:05
Jay Rosenthal 19:06
She was okay with I mean, she likes the idea.
Qasim Virjee 19:11
She started the stopwatch. And she says, I wouldn’t use that six months to bring home mortgage money.
Jay Rosenthal 19:17
Yeah, I wasn’t. I wasn’t that specific. But, you know, it’s hard. Like being entrepreneurs really hard. It is hard. And to leave a steady gig to go do it is even harder. To do it. I was, you know, I’m in my 40s like, yeah, like, I’m not fucking around. Like I haven’t here kids go to school. Like I have kids. I go to private school like
Qasim Virjee 19:37
40s Who raw almost 40 to 41. I’m on the low end of that. Actually. Where do you want a couple weeks ago? Can be
Jay Rosenthal 19:44
fun. Second, sorry. Speaking of kit, like this is the thing. Yeah. Now I have to text my daughter cuz she’s. I’m sorry to just
Qasim Virjee 19:52
text your daughter all you want. I’m not I’m fine. I’m going
Jay Rosenthal 19:55
to Dollarama I meet you at her office.
Qasim Virjee 20:00
My daughter loves Dollarama. So just Dollarama for her is a holiday. So she says, I don’t want to go to school today, Papa. And I want to go to Dollarama let’s just frugal. That’s good. I’m like, are they competing interests? Dollarama and education?
Jay Rosenthal 20:18
Yeah. Is she in like the school aisle? She went arts and
Qasim Virjee 20:23
crafts. No, she just loves looking at all that cheap, cheap, cheap stuff, you know, good containers and stuff. Yeah, you know, she’s really obsessed with her hair right now. So it’s like braids and hair ties. And she’s three and a half. You know, she’s not into the chocolate bars or any crazy stuff. She loves spooky things Halloween, took her to the castle. Oh, my haunted house. And she looks creepy. Even just driving by three and a half things are jumping out at you. And she’s like, laughing she’s like, again,
Jay Rosenthal 20:49
I took my seven year old to the Halloween store, like to buy a costume. And they have like, this is on St. Clair near the stockyards. Yeah. And they have like a moving thing in it. And he just wanted to, like get the costume guy gets freaked out by Oh, man. So like, they go through phases, like three and a half to not be scared four and a half you might be
Qasim Virjee 21:06
hopefully, she’ll never be scared. She might be and then she’ll be an entrepreneur. Which brings us back Well,
Jay Rosenthal 21:12
sorry, I didn’t mean to digress. But this is the thing like, you know, I see. You know, the people that write these threads on Twitter, God bless him, like, you know, I’ve been hyper successful entrepreneurs everywhere from like Shopify to like, small time stuff. But like, you know, it’s easy to do that when you actually have
Qasim Virjee 21:29
You mean, like the kind of like, post exit entrepreneurial wisdom from Joe Schmo the 25.
Jay Rosenthal 21:36
Yeah. And that’s why it’s not an age thing. But like, you know, if you got a hyper valuation on a company that was not making any money, good for you. Yeah. Good for you for yourself. Like, it doesn’t mean, you know, how to thread about how to build a business, like you basically didn’t, yeah,
Qasim Virjee 21:51
that whole Hype Machine, around pyramid scheme, you know, enterprise, something I’m very much at odds with, because I feel like it robs the value from a lot of people’s mindsets when they’re starting out about the value of bootstrap and the exit. Yeah. You know, yeah, why build something to exit it, you know, but the amount of entrepreneurs who I’ve interviewed and talked to, who come to me, right, and pre pandemic, this was a popular thing. Once a week, I would have someone who had $200 million in their bank account coming to start well saying, I want to be a mentor. And I’m like, Okay, well, what, who do you want to mentor? Firstly, I don’t like that word. Secondly, you’re going to add value to someone’s life? How will you do it? Why are your words valuable to those people? They didn’t have answers. They were just being shouted at at home to get off the coach. They had so much money, they maybe bought a more comfortable coach, or house to put that coach in. But then they were like, What the hell do I do with my days? Right? And, you know, I think part of that is part of it is maybe Okay, occasionally, you might be robbed of your purpose, when your purpose was your whole life was your business. And then you sold it because you were afraid of what the next step was, and the usual thing, but a lot of it I’m hearing more of is this idea that people build to sell, but don’t build to be
Jay Rosenthal 23:12
right. And, and yes, and you as well, because I see what you do here. Like, I just figured most of this shit out by myself. Yeah. Like, the option at some point is like, you could either learn how to build a website, or have or pay someone to build it, like pay some a bill that means you’re not getting paid as much. Yeah, like me. Yeah, I could pay someone to edit videos, or I could learn Final Cut Pro myself. Yeah, right. I could, like, you know, well, any of it, like, you know, stream video at a video record video, streamline the process about like, you know, scheduling people, like, you know, you figure out how to like workflow stuff and the rigor of doing it every day. And this goes back to the silly blog I had, which is like, you have to do it. And the rigor of doing it means that like, when you’re, and now we are, we have not grown a lot of it. But like, tomorrow, for the first time. I’m ashamed to say this because people like think we are some big enterprise. Yeah, of course, tomorrow, someone else is going to be putting the newsletter content, our daily newsletter into Mailchimp themselves. Wow. Without me, you got to that point. Well, we exited. We got bought in July, July of this year, yeah, July of this year, okay. Who this company prohibition partners based in the UK, does a lot of events does insight does content,
Qasim Virjee 24:31
doing the same sort of thing that you were doing? Yeah, they entered the Canadian market through you
Jay Rosenthal 24:35
through me, but more importantly, the US market. That’s the end. And we knew I don’t think we knew it back in 2017. Yeah, but to grow an exponential level. It’s, it’s Canada’s lovely, we love it.
Qasim Virjee 24:45
But it’s like the ink it was the incubator for for kind of the industry evolving in the US. Yeah.
Jay Rosenthal 24:51
And in the US, it’s like, there’s just many countries basically like,
Qasim Virjee 24:55
because like even here, I mean, at the time when you remember, we had through the door Canopy Growth. Yep. We had Kronos Kronos grew their finance team finance, procurement was like eight people combined, they grew to 120. And it was, again, both of those are examples where foreign investment came from. related industries, right. We’re,
Jay Rosenthal 25:18
I think you’re in tobacco. Yeah. You’re in tobacco, from beverages now. So, yeah. And now they’re going back that way. They’re taking that money from other industries. And going back to the US and buying properties, including Corona canopy just has an option to buy one of gummies, which is a huge gummy manufacturer brand here, and in the States, and that’s like a valuable brand, but like, that didn’t exist in 2017. Interesting. Yeah. Um, so yeah, so I learned to do it all yourself. And then and then I’m hesitant sometimes to give it up, because you do it yourself, right? Like, why would I pay someone to do it if I do it myself. But then you realize, like, you look at the time horizon, like, I’m better off selling and building partnerships, and someone else doing the implementation of like, social media and newsletter, yeah, but it gets to a point where you’re like, you just have to do that. And I’m glad you because the team is amazing. And the most of them in the UK, like, I’m happy to, and the time change, like, the time difference works in our favor this way, like, I’m going to get to them at night, like when I usually do it, but I’m not going to MailChimp, and they’re going to do it in their morning and get it out. Like it just, you realize that bigger companies can do a lot more stuff.
Qasim Virjee 26:26
Totally. And it’s tough when you’re an entrepreneur, because I think replacing yourself feels not only expensive, but for the immediate cost of hiring that person, but also the cost of having to take time to train them invest in their talent development, you know? And then there’s also that question of like, will it be done, as well as I can do it? And also that ever lingering question of what am I truly great at, because I’m so good at so many things, that, you know, really
Jay Rosenthal 26:57
feeling like, this is the ego talk I have with myself all the time, this is the
Qasim Virjee 27:00
entrepreneurial thing. And you have to give yourself that ego talk to be able to wake up every morning and say, You know what I’m actually fucking really excited about today. Not that, like you’re depressed, and you’re working yourself up in bed before you put your feet down on the ground. But more like, I get to do anything today. I’m so special. It’s Christmas, and I bought the presence.
Jay Rosenthal 27:20
And this is the thing and this is this is I am an egomaniac, and this feeds that. But the thing that my unique thing that I can do, yeah, as an entrepreneur, but also as as a person in the cannabis is I understand that this is true, whether I was working with the garbage company or anything else. Like, I’m interested in that industry. Like I’m interested in the garbage industry, and what it was all about. That’s why we that’s why it was a good consultant for them. Right? Because I cared like the, from the roots to the trucks to the how garbage could separate into recycling and where’s the money come in? Because recycling, the company was making money, which is offsetting the collections of the garbage like, but they also own the dump, like yeah, oh, that was really interesting from our business from like, not even a bit case type. Like I mentioned it in the nuts and bolts.
Qasim Virjee 28:07
Well, it’s just like the socio economic study of organism, you know, yeah. Let’s talk Okay, given that, give me the if I could Cue music. I’d be like, Dude, give me the 360 on the business of cannabis.
Jay Rosenthal 28:21
Like my business or the industry of cannabis industry. Yeah. So, uh, in cannabis industry breaks down into these types
Qasim Virjee 28:29
of characters. Yeah.
Jay Rosenthal 28:30
Okay. There’s Well, no, but here’s, here’s the, here are the different ends of the supply chain. Let’s and this is interesting, because it used to be like everybody was interested in all of it like, right, give it to me then they went bankrupt. Well, that but also like, you can’t do it like there is an agricultural component of growing cannabis. That is a very unique skill, very difficult to do. Some people are doing it at scale, so they can extract cannabis and they do that either outside our greenhouse or in a room. There’s like craft cultivation, which is generally happening and close Does that look good buds. Good buds. Yeah, but they do some outside they do some inside but they’re amazing. They used to be here too. So crap, but they’re on the West Coast and so they have their own vibe. So growers you’ve got differentiation amongst growers, yes. From like craft small micro even, like 2500 square feet to a million square feet of greenhouse like and then outdoor, you know, acres and acres. So like, differentiated there are people who process them and you factor that into finished products. Yep, like some dried flower which of course then like one of the biggest categories is pre rolls, like turning that flower either whether it’s quality or otherwise lesser quality into pre rolls they just fly off the shelves
Qasim Virjee 29:36
pre rolls by the way our joints Yes, yes. Okay. Joints they they’re the joint roller guys. Yeah.
Jay Rosenthal 29:41
And like the whole industry around pre rolls is its own thing. Yeah. Then they’re people who make finished products, edibles, beverages the whole bit and that you know, huge variation and all those things from huge beverage plants to you know, small gummy manufacturers in a small room that are taking extract putting in gummies Yeah, All of that in Canada goes through basically wholesale, the provinces, like Ontario, it’s the Ontario cannabis store. Right basically, basically properly
Qasim Virjee 30:10
controlled. So you’re saying kind of like, distribution is controlled by the province.
Jay Rosenthal 30:15
In every almost big government, let’s call it the government. Yeah, the government, then it gets to the wholesaler. And then in Ontario, we have this, you know, more than 1000 Private stores. Wow.
Qasim Virjee 30:24
So now, we’re talking bricks and mortar retailers. Yes. Because these digital distribution on demand Uber, copycat companies are illegal.
Jay Rosenthal 30:34
They were illegal. And those were like, illegal. It’s just illegal. Illegal. They were there is now legal delivery from these private retailers. Okay. So but you’re sober at you can deliver. Okay. Yeah. And they do and they will if we was that a post pandemic, it was an early pandemic, and now post pandemic, yes. Because like people can’t come to the store, so we have to give it to them. The challenge, though, yeah. Is that that same wholesaler, the Ontario cannabis store, in this case, also sells online?
Qasim Virjee 31:00
So they’re competing with the retailer, you got for the same product? Yep. Is? Is it like the LCBO and booze because we had a couple episodes ago, we had Eric and John from Askari, tell me about their whole like wine shop idea and how they’re fighting the LCBO or like the whole industry is because they’re buying a marked up
Jay Rosenthal 31:20
product from the wholesale. Yeah. And the wholesaler selling it to. So the same sort of thing. Worse? Yes. Okay. I think it worse. And the entire cannabis stores barely selling any weed to consumers. Like they have a whole wholesale operation where they’re supporting retailers, of course, because that’s part of the business. And they have this EECOM component, which is only selling 8% Of all the cannabis in Ontario. Oh, so they started off with 100% market share right legalization half because there was no stores down to 8%. So
Qasim Virjee 31:49
this is a sector which is unique and having retail actually be successful, especially in the last couple of years, which is interesting,
Jay Rosenthal 31:56
successful in that they are selling most of the weed,
Qasim Virjee 31:59
but it’s not really challenged. markets become differentiated, like crazy. And there’s a shop every two steps
Jay Rosenthal 32:04
in Ontario. Right near here. I’m going to request especially, but I just did a conversation about Windsor has 40 stores. Okay, 230,000 people 40 stores, about one for every six or 7000 people. That’s kind of a lot.
Qasim Virjee 32:18
Is it a good business at retail? What’s the margin? Typically, what would be the margin be?
Jay Rosenthal 32:22
It’s not great. Right now it’s not great. Like because because all these stores are buying the same product military cannabis store. So I as a store, I can’t say Jay’s cannabis store is going to only have craft cannabis from 100 kilometers to where I am right now. You just can’t do that. Because everybody has access to the same list from the entire cannabis store.
Qasim Virjee 32:40
Is there? Are there end to end companies still
Jay Rosenthal 32:44
there? Will there are with regulations sort of making no challenge because if I’m doesn’t mean that they’re multi brand, sort of like Canopy Growth. Yeah. A whole bunch of a bunch of different brands. Yeah. And then have retail as well in some form or fashion. But if I’m Jays cannabis store, and I want to white label Jay’s cannabis product, I have to put it through the Ontario cannabis store, basically, and everybody has access to it. So I can’t say this is mine, like you could with wine actually my sister in law, like she can get specific wine from Italy that she would have access to when it comes in as opposed to you and me and everybody else having same access to it still
Qasim Virjee 33:19
has to go through those SeaBIOS warehouse. Yes,
Jay Rosenthal 33:20
but I it’s only mine. Like it’s mine going tilde, right? That’s right. Yeah. And so that doesn’t happen yet. Which sucks. Yeah, it’s it’s a very difficult business and not for the faint of heart and regulation change all the time. And in Vancouver, so downtown Vancouver. Every store has a 300 meter radius around it where there can’t be another store. So there’s like these mini monopolies and 300 meter radius here. Like turfs, you can’t get 300 meters in downtown Toronto without hitting four or five stores.
Qasim Virjee 33:48
Yeah. So what about the black market?
Jay Rosenthal 33:52
Qasim Virjee 33:53
I hear this from from. I’ve heard this from a couple people just anecdotally. Yeah, people are telling me, I get better weed for my supplies more regular. I can always get the thing that I like. Now, it might be five different things, but it’s called the same thing. So that’s m 35. You know, that was back in university days. Now your head all these scary, scary names. I don’t know if those were real. That was the raver kid stuff, which was the Hells Angels stuff. It was different than the like, you went to school in Montreal. Yeah, very different than the like, lean l grew Metro stuff or the very bootcamp stuff. So
Jay Rosenthal 34:22
like, so there is a thriving legacy market? Yep. Every day it gets more competitive with the legal market. I mean, meaning the legal markets more competitive legacy market. And you know, some people say it’s like 5050 now, but what I think is really happening is there’s like 20% of consumers that consume 80% of the cannabis that’s the 8020 rule. Every every industry is like that Smokey Joe’s and so some people have transitioned completely into the legal market. I think there’s many more people who are like regular consumers that buy some familiar market and some from the unregulated market. And they’re like, what does that mix look like? Now? What you will not get on the unregulated the legacy market is lab tested, third party validated like you don’t know what’s in and you just don’t and there’s been a bunch of provinces and other research institutions that have said we’ve tested legal and not and like this one has pesticides. This one has things that microbes, like all the things you wouldn’t want to ingest, especially if they’re smoking Yeah. Or edibles like the doses off like you know like you buy 100 milligram on the black market edible unlikely it’s going to be 100 milligrams on the nose and even less likely it’s going to be you know the same consistency throughout all 10 of those little nubs
Qasim Virjee 35:29
I remember back in the day there was the guy I knew
Jay Rosenthal 35:32
and he was he worked from start well
Qasim Virjee 35:34
he is he used to he used to go to he used to go to this one DEP enter the step enter would not only sell beer posted 11 o’clock I think that was the cutoff for the DEP owners but they would also this one particularly Tamil operated DEP enter in Milan would would sell weed and and then you know this guy No. Got a bag of Reagan or was literally legitimately he was a Reagan Oh, went back to tell them hey guys. You know this isn’t cool, right? Because there might be some thugs out there that bite the oregano and come at you kick your ass. A baseball bat was shown. And and this guy I know, was threatened and had to run out of the store. And he was just trying to give them a helpful tip. You know, so that doesn’t happen when you walk into
Jay Rosenthal 36:22
Superette. No. And you should walk into Superette. And I like going
Qasim Virjee 36:26
to look at stuff like as a retail experience. It is it is delightful
Jay Rosenthal 36:32
and nicer, nicer people you will not meet and hyper entrepreneurial and great operators. And just Yeah, I mean, there’s a lot I mean, I like I like it loves to pride on the team. There are lots of really interesting operators that are doing amazing work.
Qasim Virjee 36:46
Let’s talk about the media landscape and how it’s changed in the last few years. I when I have gone into said Superette stores have seen publications in the publications when I look them up on the masthead seem to be advertorial publications owned by producers or distributors. There’s some of that. Yeah, for sure. But not distributors? Because that’s the problem. No, it will just wait. They’ll get into it too.
Jay Rosenthal 37:11
Yes. And it’s difficult because the only place you could actually deliver those things is in an age gated environment that’s like a cannabis store or a strip club, right? Like it’s a challenging environment we operate there is a publication that is not that there’s one called kinda magazine that does this, it focuses uniquely on Canada and the Canadian brands and what’s happening. It just really almost all of it is just early days.
Qasim Virjee 37:32
So how does business of cannabis fit in? Is it an industry insider publication?
Jay Rosenthal 37:37
I think so like we really pride ourselves on being having a bead on what is happening in the industry, and being b2b, like a lot of our partners are service providers to the sector insurance, banking law. And like we want those people that are partners to help educate the industry. And in return, we want the industry to go to our partners and other people to to get the expert advice. So like, whether it’s a technology company, or a law firm, or a bank, or like all of our partners are doing unbelievable work. They’re not the only ones doing the work, but we’re helping sort of get them to share their expertise with our audience, first and foremost, because our audience wants and needs that. And we are hopeful that they see the benefit and return, which is a lot like other b2b. In boring industry. It’s like, I’m not trying to be me. But like, in boring industries, this happens all the time. And if we’re able to, like serve our audience, and serve our partners, and be the conduit between the two, which is how we are very early days of COVID. Like, well, we have this audience and we have these partners, how are we going to connect them absent real world events? It was through content events, digital content, podcasts, you know, written stuff.
Qasim Virjee 38:38
Okay, so as a, you know, a media company, embracing digital, of course, since day one, right, this whole idea of the video conference recording? What is on the horizon? If anything, in terms of changing formats, dealing with social media? You know, limited attention spans, blah, blah, blah. Are you going the route of kind of making your content more digestible? And focusing on that accessibility question, or are you going deeper for the industry for b2b with in depth market research, analysis? custom reporting? That kind of stuff?
Jay Rosenthal 39:15
I would say both. Okay. Not not the we’re gonna spread ourselves thin on the business of cannabis side, we’re really in the digestible business. Like, I think by the end of the first quarter next year, we will be doing basically a web show every day. Right? The rigor again back to the stupid podcast that the stiffer dealer I did way back when, but like the rigor of doing that every day, yeah, where we like because the industry is so broad now. Yeah, but even has a lot of news to report let’s and it’s very deep on either end, so like how do you distill it and provide the industry sort of a song sheet for the day and that’s where I think we could provide real value. Also, we do a lot of content and our events and interviews and all that like that will be part of this thing too. So we will be on the rigor daily snapshot type of thing across all of our platforms newsletter social, otherwise, video web, web, web web video. But our partner, our owner now prohibition partners does really extensive market research both here and in, in Europe, especially, you know, what does it look like for Pharma? What does it look like on different markets? Like what does it look like for disrupting the beverage industry for the UK for Jeremy, like, you know, for medical cannabis, like they really do these deep dives, 3040 Page reports, which is great. And people absolutely need and want that. And our role will be to support that, and talk about that and highlight that, because that’s what the industry is, and it’s supporting sort of the mothership. So that’s our whole. Thanks, Jim.
Qasim Virjee 40:38
I want to talk real quick, on the end note about your kind of look into the crystal ball, on the event side and on in real life and that story, what are you hopeful for for 2022? And what are you planning to, you know, do based on that hope?
Jay Rosenthal 40:55
Yeah, so we just did our first event in New York, at the end of September, our growth plan is going to be extensively in the States, we’re always going to do work in Canada, but our work in the States is going to be where the growth is going to come. New York has great market a it’s adjacent to where we are right now. But also the industry is like right on the cusp, like they’re gonna legalize next year. So let’s like this whole nascent industry just like raring to go, Yeah, we did an event to the Rainbow Room iconic venue in New York. And like the industry Shut up, we had like, 350 people, and it was great. We’re gonna go back there quarterly do a networking event, much like we did here in 2017 2018. Because this like idea that there’s like an organizing principle, organizing media companies are talking about it all the time. We want to be there. We’re going to go to other geographies in the States as well, and partly about like emerging markets, and what does that mean, but also about these thematic big themes in the industry. Like right now, I think the most interesting part is like everything around retail. So dispensaries and retail, tech design, data insights, that’s really interesting. And it’s blowing up, right, we went from zero stores in 2018, and Ontario, to over 1000, multiply that times two, and that’s where we are in the country, multiply that times another, you know, one and a half. And that’s what’s going to be in New York in three years, like, you know, the scale is completely different. The scales different means the adoption of all these different ways of doing things is gonna be crazy. And whereas this event we had in 2017, our very first round was like a really broad conversation like, where’s the industry today? And tomorrow, it’s going to be more of like this as an industry. What does it look like at retail? Right? We think there’s something about what does it look like at the Ag tech part? What does it look like processing, manufacturing, new research and development? Like, there’s a lot to do like a real industry that we’re really keen to explore? That probably didn’t exist, like you couldn’t have like a show just about retail tech and design data two years ago, because it was like, it was too early. But now it’s like a whole industry of itself.
Qasim Virjee 42:49
It’s great to hear that you’re expanding your efforts more widely. And with a depth thanks to this new relationship. Yeah. And into the US. And that you’ve been able to jump down to New York, and are living a post pandemic reality.
Jay Rosenthal 43:07
I was also in Las Vegas. Yeah, there you go. I prefer the pandemic reality here than there. But yeah, yeah.
Qasim Virjee 43:12
It’s a little scary down there.
Jay Rosenthal 43:14
I really don’t think we’re in danger there. But you it feels very, very different.
Qasim Virjee 43:17
Yeah. The energies we’re I mean, if you’re vaccinated, you’re vaccinated. You have to be hopeful, a little bit, right.
Jay Rosenthal 43:22
Yeah. But you still have to be on a flight. And the flight to and from Canada, Great, because everybody’s tested, and most people are vaccinated. But like, I was on a flight from Las Vegas to Chicago, which was packed, and I’m glad I’m negative now. But I gotta keep testing myself. And I have and like, I’m fine, obviously. But
Qasim Virjee 43:39
alright, well, it was a pleasure having you in studio. What I want to do is keep tabs through next year on kind of how this experience is unveiling itself to you, and how this new positioning for business of cannabis is giving you an insight into the industry that is far larger very soon than what you’ve been dealing with the last couple of years here in Canada. And I’m keen to follow any stories that you’re reporting on. So I’d like to have you back to tell me a little bit about other Canadian entrepreneurs in this space that are involved in the states and their growth stories.
Jay Rosenthal 44:13
Totally. Love to do it.
Qasim Virjee 44:15
Awesome. Thanks, man. Thank you