Cannacurio Podcast Episode 73 with Tyler Klimas of Leaf Street Strategies

In this episode of the Cannacurio Podcast, Ed Keating interviews Tyler Klimas, founder of Leaf Street Strategies, about his journey as a consultant, regulator, and lobbyist in the cannabis space. They explore the rise of THC beverages, the challenges of cannabis taxation, and the fragmented regulatory environment shaping both hemp and marijuana markets. Tune in for expert insights on where the industry is heading and what regulators should consider next.

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Cannacurio Podcast Episode 73 Transcript

Ed Keating: Welcome to the Cannacurio podcast, powered by Cannabis Media. I'm your host, Ed Keating, and on today's show, we're joined by Tyler Klimas, founder of Leaf Street Strategies. Tyler, welcome to the show.

Tyler Klimas: Thanks, Ed. It's great to see you.

Ed Keating: Yeah, good to see you as well. First time not seeing you, not at a conference of some sort, getting you here live on screen. In getting to know you and looking at your background, pretty interesting. You've served as a consultant, a regulator, a lobbyist. How'd you wind up in the cannabis industry?

Tyler Klimas: Sure. Well, pretty, pretty untraditional path, but I think that's par for the course here, as we all found ourselves in this industry. But yeah, so I was in Washington, D.C. In around 2015. I'd worked for a very popular governor in Nevada through his campaign, through his first term. And then, after the first term, I moved to D.C. And joined a small boutique lobbying firm, District Strategies. And my client was the State of Nevada and the governor's office. And so it was a great transition point from state government to federal government. I still got to work on behalf of the state. And then I had a number of other private sector clients as well, but tracked cannabis just as a policy area. That was, you know, relatable to the state, given that we had had a medical market. But that was about it. Nevada legalized through a ballot initiative in 2016 adult use cannabis. So that was their transition from medical to adult use. And by 17 and 18, we started to hit some snags, particularly around competitive licensing. So when I say snags, massive litigation in the state, they called it here world war Weed, which is absolutely not the descriptor you want for your. Your Upstart Adult use cannabis marketplace. And so I was still in DC, But by 2019, a new governor took over Governor Sisolak, and, you know, the press was, was terrible. It was a big black eye for the state and for the regulatory body at the time. And so Governor Sisolak, through legislation, created the, a new regulatory body that would oversee cannabis solely. So instead of being regulated in a small division within a greater department, which it was, they were going to create a single, standalone regulatory body, which we see mostly now in these new states that come on board. And Nevada was unique. Because given all the issues, we referred back to something we were very comfortable with, and that was gaming regulation in the state. You know, world renowned, the gold standard in the Nevada Gaming Control Board and the Nevada Gaming Commission. So through that legislation, they created the Cannabis Compliance Board, with the task of Let's start regulating cannabis more like gaming. To try to address some of the issues that were going on, some of the allegations that were going on. Where I come into play was I was still lobbying for the state at that time in 19. And the governor asked if I would like to come back to the State of Nevada and stand up that regulatory body. I think the most attractive part of me was that I was 2,500 miles away from all the issues that were. I think that was my only hook. But it was a great opportunity to get really  deep in a topic area. You know, it was kind of a startup atmosphere. As much as you can get that in state government. So wonderful opportunity. Moved out, moved back in 2019 as the first executive director of the Cannabis Compliance Board. Um, stood up. The agency and resolved a lot of the issues that we had with a different approach to regulation, retooled the regulatory framework. And there I sat and regulated both the medical and adult use marketplace in Nevada for almost five years.

Ed Keating: Wow. Wow. That's a great background. And it's interesting about the compliance genesis of coming out of a successful industry, because we'll get to this later, but... But, you know, other states look to alcohol as a choice for that. Because they don't often have a robust gaming infrastructure like you guys did. So, but now you're running Lee Street. And, you know, tell us more about that. Like, what do you? what do you do? Is it? Is it similar where you've got clients just like lobbying, or it looks to be a whole range of services that you offer?

Tyler Klimas: No, it does. And, you know, as I started to come up on year five. You know, I think I reached the end of the role as regulator.

Ed Keating: Maybe startup regulator, like, you know, building a startup is different than, you know, being there for 30 years or something, you know.

Tyler Klimas: That's right. And it was time to pass the torch for iteration number two. And it was really tough to leave. I mean, I had 120 staff members. I had hired almost 100 of them. So it was very tough. But it was time. And like I said, it took a while to transition out. And I helped train and get my successor up to speed. And he's doing a great job now. But I wanted to stay in the space. There is nothing more exciting than the cannabis space right now. There's nothing more challenging than the cannabis space. And it's on a day-to-day basis, as we all know, and it changes every single day. And so I really felt passionate and I believed in the industry. And I knew that the industry wasn't going to go anywhere, despite some of the challenges that it currently faces. And so that was the genesis behind launching Leaf Street Strategies, which, to your point, is a full suite consulting. Firm allows me to, you know, use my platform and perspective as a former chief regulator. And Ed, you know, there's not many former chief regulators simply because the industry is so new. And, you know, during my time as head regulator, I was, you know, lucky enough to help found and launch. Canra, which is the Cannabis Regulators Association, just a wonderful nonprofit that has as its membership, you know, every single chief regulator from across the U.S. In Canada. And so I really got to play a voice on behalf of all regulators. And so all that was part of the platform and perspective that I really wanted to take forward with Leaf Street. And so that's what, you know, I've been able to do over the last year. plus, to have that perspective, work with private business on navigating these different regulatory frameworks, because they're all so very different. Navigate, you know, engaging with different regulators in these jurisdictions. Advocating and lobbying, where necessary, working on regulatory refinement. And, you know, it allows me to bring that perspective to the table across from these regulators. And that's been just, you know, extremely rewarding and very exciting on a day-to-day basis. And it extends to governments, which I've also been able to work with, you know, local governments in analyzing, you know, what's right for their community and what community impacts are for cannabis. How we can overcomplicate things, or how the sky doesn't fall when you launch a cannabis program within your jurisdiction. And so all of that has been part of Lee Street Strategies. We continue to grow and it's been a really great move for me. And I feel even more passionate today about this industry than I did when I was regulating it in Nevada.

Ed Keating: That's great. I mean, it makes me think back to a CEO I used to work for, who really liked having people on the team who had what he called a practitioner's perspective. So, you know, as a former regulator in a big program that you ran with 120 people, when you go and speak, perhaps with other regulators, you're really coming at it. From a practitioner's perspective. Like, these are the things that we had to overcome. This is what I saw. And I'm sure that's super, super useful. Now, one of the most semi-recent projects that you worked on that we talked about when we were at Candidatecon was your thought leadership on beverages. It's all I ever hear about right now. And fascinating space, a lot going on. Curious as to your thoughts on how you think beverages should be regulated, or maybe how they likely will be regulated, which may be two different things.

Tyler Klimas: Well, I think it's just in general. Over the last couple of years, it's just been so fascinating to watch the THC beverage market just grow so rapidly. Obviously, there are continuing issues and conversations around hemp and cannabis, and we'll probably get to some of that later. But just generally as a market category, the demographic that beverages have been able to reach. And just the consumer preference and the growing preference for these drinkable beverages is just fascinating to watch. And it's not that THC beverages didn't always exist. They did, but they were mostly, you know, high dose. Products and they were in dispensaries. There weren't, and remain not, you know, big sellers. There's a lot of infrastructure that has to go along with selling beverages. But watching the hemp-derived THC beverages, in particular, has been just enlightening. And I think it's teaching us a lot of lessons. And, you know, you ask how they should be regulated. I mean, to me, watching now how states are dealing with beverages in particular, because, you know, they've seemingly kind of transcended. The entire category of hemp derived THC products. They've kind of transcended outside of that in a way, but, you know, to look back and now it's easy in hindsight, right? I think one of our biggest misses collectively in cannabis was, you know, taking that opportunity when we moved medical marketplaces to adult use. Take that collective breath and look at exactly how adult use should be regulated. Should it be regulated the exact same as medical? Because that's what we did, right? We had these medical programs. These rules and regulations for medical dispensaries. And we just flipped the switch as a matter of convenience and said, Okay, well, now you can start selling adult use cannabis. But we missed that opportunity to sit and say, okay, the the voters, in most cases, or sometimes the legislature, have authorized this adult use normalized cannabis marketplace. Are our rules and regulations, are our frameworks appropriate for adult use? And a good example of that is is taking that opportunity to look at the final products, right? Is the way a, you know, a high THC pre-roll joint, the way that's regulated, Is that appropriate for other categories, or for edibles, or for drinks? And just kind of, you know, and that goes along with retail access points, all sorts of things, right? Like, we miss that opportunity to do that and put new frameworks in place for adult use. And again, easy to look back in hindsight and say that, but I do think that's the truth. And so watching these hemp derived THC beverages leverage alcohol infrastructure, put on the shelves at big box liquor stores in states. I mean, that's a that's a final product approach to regulation and retail access, et cetera. And so, to me, that is a lesson that we're learning currently that still can be used. And, you know, all hope is not lost. I mean, I think that's still a valuable exercise to go through. As we examine, you know, what's right for our current adult use cannabis marketplaces? And what kind of regulatory refinements are still needed or should be pushed.

Ed Keating: Yeah. And what's interesting, I think, and part of this is what I learned down in Miami is just how popular those are and those beverages, and how they really seem to capitalize on that. Pull demand from customers. where. You put it out there and people are going to flock to it, or so it seems. I remember that one company from Texas that had, I think, 230 outlets, and they did a trial back in 2019, 30 stores. They sold so much that within three weeks they blew it out to their entire chain. And, you know, they keep giving up. More shelf space, more refrigerator space and more display space. The three things that they can manipulate over to this product category because people want it. And I think because of that, it may be harder for regulators to dial that back and say, no, no, no. I mean, they're trying in Texas and Missouri and other places. But I wonder what kind of backlash they'll get, or if we're just going to see a lot of stuff coming in, you know, Brown paper wrappings delivered by Amazon and others to doorsteps.

Tyler Klimas: Right. And we're seeing that. And, yeah, some states are taking an approach. I think a lot of it is... There's a lot of education still needed on many aspects, But we're also seeing states provide for certain allowances for beverages, recognizing the infrastructure leverage on the alcohol side. But to your point, Ed, the consumers, and that's why sometimes bans and prohibition doesn't work, because these consumers want these products. And it certainly seems, and I think some data shows, that these are consumers that don't normally go to dispensaries. Or hesitant to go to dispensaries. And here's a whole new consumer base that cannabis has not been accessing to date. And again, I think a lot of that is because of the regulatory constraints that were put on cannabis. But that's still the fact. And, you know, I think a couple of years ago, I was always interested. I understood the popularity. and, you know, there's that comfortability with the beverage in itself, and especially when it's on the shelf next to beer, wine, and liquor, as a consumer, there is this inherent comfort level that, okay, this is something that I want to try. And while I understood that, my question was always, But are they going to come back? Are they going to buy more? How sustainable is it? And we're seeing that it is. People are coming back, buying more beverages from the retail access point that they want to purchase them. And then at the same time, you know, absent some of the regulatory constraints that regulated cannabis phase, the innovation is happening a lot quicker, a lot more quickly in hint-derived THC beverages, right? The taste profiles are getting better. The product's getting better. It's getting more consistent because they're able to evolve a little bit more quickly. absent, you know, all those constraints. And so all of that, again, has just made this this fascinating policy exercise experiment around beverages.

Ed Keating: Well, the other angle I'll throw in there is the economic one. And I think back to decades ago, I lived in Illinois when riverboat gambling was the thing in Indiana. They didn't bring it into Illinois yet, but I think they had racetracks there. But it was a big deal, and people would go there, and it's like, oh, all these tax dollars are going across the state lines, and look at what a big growth industry it is. But then some smart person did the research and said, actually, substitutes and complements, Those gambling dollars are merely taking some money away from dining, shopping, and other things that people spend money on. It just was a move from one bucket to the next. And I think we may be seeing that with alcohol. Like, oh, look at all this new consumption of these hemp beverages or THC beverages. But we're seeing a decline in. Sort of traditional alcohol. So at the end of the day, long-term, it may just settle itself down. As some people will choose THC beverages, some alcohol, But I don't know if we're necessarily going to have people consuming lots more of both. Like, there's only so intoxicated or, you know, stoned everybody can get in a population.

Tyler Klimas: No, I think you're right. And obviously capitalizing on a trend, right, on people being a little bit more aware of what they're putting their body, on the health and wellness side. You know, leveraging THC. And they obviously still want to have an adult experience. Um, and THC seems like a legitimate alternative for them right now. Um, so yeah, I, I, I'd agree with you. Uh, it will all settle itself out. Um, it's still so very new, this industry. So THC beverages from the hemp thrive side still even newer, right. And then regulated, uh, so yeah, We've got a lot to still learn, and consumers have a lot to learn and they're going to develop their preferences. And again, given all the difficulties right now in the cannabis industry, there are a few bright spots. That just, again, reinforce that THC products are desired and wanted, and they're not going to go anywhere anytime soon.

Ed Keating: I totally agree. Now, one debate that's happened, I think, on the regulator side, or discussion, I should say, is. Hemp and cannabis, one molecule, two regulators, how should it work? So when we were at Canva last summer, that was a big topic of discussion, where some regulators were like, we are not set up. My group is not set up to be able to do it. Almost, I think, statutorily, that's not how it works. Others were like, yeah, new program, we can put all the cannabinoids under one roof. How did that process happen? How do states figure that out? Because that's not an easy decision, but it seems like it's a fundamental one. That could have big impacts as you roll forward and try and stop hemp and cannabis from being a pitched battle, which some describe it as.

Tyler Klimas: Right. And I think it is in some regards. And what it definitely is, is chaotic, right? And I don't think anybody can argue that. What you hope it's not is cannibalistic, but it does seem like that. At some points as well. And you're right, from the regulator perspective, I mean, A, nobody really saw this coming, right? 2018 farm Bill, It even took a little while for people to realize what was available to them out of that. So no regulatory body was truly set up for something like this. And I will venture on a limb to say, I do think at the end of the day, you know, regulators, first off, they're constrained by statute that the legislature put forth, you know, for their body. So they don't have always the ability to be as flexible as they may want to be. To capture this new trend and new product, and to just seemingly incorporate it into their system. But I think at the end of the day, you know, the regulator's main goal and job is to make sure that product is safe and tested, and it gets to only those individuals that are legally. Age to use it. And so, again, even in the face of some all-out bans or proposed bans on one side, you know, I don't know how sustainable that is in the long run. And I think, for the most part, regulators are okay and comfortable. And realize that we will likely move to kind of a one plant solution, as people like to term it, but a way for, you know, again, at the end of the day, we're delivering THC to consumers in the place they want to access it, in the form factor they want to consume it. And with an understanding that there is a regulatory body that's simply making sure that it's tested and that it's safe. And somebody's got an eye on that supply chain. And so eventually we will get there. The federal government is not helping us in any way, shape or form. And so it's still left up to the states. So again, it'll remain chaotic for a little bit. But I mean, these conversations, I think you could admit that these conversations have to happen, right? Yeah. Really work through all that. And so that's what we're seeing in almost every single state, whether they have a regulated cannabis market or not.

Ed Keating: Yeah, no, that's great. I mean, it really, you boil it down very well there. In terms of, you know, providing access, making sure it's safe, making sure it's age gated, you know, maybe making sure that the advertising for it isn't, you know, inappropriately targeted. But I think all programs are shooting for that, even though they may do it in different ways, which sort of leads me to my next question. You know, cannabis media, we've been tracking licenses for 10 plus years now. And we always look at the states that are doing it, those that are contemplating it. A couple of the interesting ones I'll call maybe the edge cases are like, Pennsylvania, New Hampshire have floated. The idea of, like, hey, we're going to sell through a liquor store. So the state will be a plant touching entity. Or one of my other favorites, Georgia, Let's run it through pharmacies and see what happens. You know, FDA was not amused. You know, what do you think works and why? Because it is still a choose your own adventure at the state level. I mean, you obviously built a great program in Nevada. Maybe the better question is, what are the hallmarks of a licensing system that works, assuming that it's age gated and, you know, has all those safety factors as part of it?

Tyler Klimas: Yeah, I'm not sure there's a perfect model, Ed. I really don't. And I like to think we're working towards that, but also legislators and legislatures are the x factor. They're always going to have pet projects. And we see some of these bills become Christmas trees for different priorities, and it makes it tough. But going back to what I had referenced earlier, the fact is, this is one great, giant policy experiment that we are living in. For cannabis. And so, given the federal illegality of cannabis, every state is left up to itself to design whatever framework works for them, or what they think will work. And yes, we can absolutely point to good things and bad things. You know, some states do unlimited licensing, and you see massive supply and demand issues. Some states, like Nevada, limited licenses. Did they expect that this is what we would be talking about, you know? Eight years later, no, but they did it and it worked on the supply demand side. But, you know, pros and cons. It prevents new entrants from getting into the industry when your licenses are all capped and there's no new licenses. And, yeah, I mean, the state run models. I mean, that just personally gives me a lot of concern. I mean, cannabis is not liquor. You know, it is rapidly evolving. It's extremely complicated. Um, and you know, it is not static in any way, shape or form. And we haven't had decades and decades and decades to refine it. like, like, alcohol. So like, you know, when they think of ideas like that, that, that certainly, there are certainly things that give me great concern and pause. And, you know, Georgia took a really interesting approach on the pharmacy. I think that is fascinating to watch and analyze. And you never know, you know, if there's rescheduling and it moves to schedule three, and, you know. Maybe there are components of Georgia that people will lean on or look to, or take as examples as part of that, because we don't know exactly what that'll look like. Right.

Ed Keating: I mean, it's what Germany did. You know, that's how they, that's how they saw it. So, yeah, I mean, I do appreciate the creativity that goes into some of these ideas of trying it out. And, you know, maybe it is a pet project of some regulator, or who knows what. But it does make for a very big Petri dish, or set of Petri dishes, as we see what works and what doesn't. And, you know. People don't have to repeat the mistakes that others who came before them made. I'm not going to say, though, that, you know, Idaho and Kansas are going to come up with the most kick-ass program in the nation. But, hey, you never know. They've got a lot of, a lot of lessons to learn from. And, you know, definitely not an early adopter nor a fast follower. They're definitely laggards, but, you know, maybe maybe they'll get it right. Similarly, sort of on the periphery of licensure is the tribal discussion, because. Some tribes have been able to adopt these programs pretty quickly. They, you know, in our world, In terms of how we track those licenses, we often have the tribe as the license owner and the regulator, because they get to sort of decide the rules. I mean, how do you view that? I mean, how are they regulated? Because Nevada definitely has, I think, a bunch of tribes that have licenses, if I remember correctly.

Tyler Klimas: We do. And listen, given that it's state by state right now, and there's no overarching, you know, regulatory structure that everybody fits within, every state is going to be different. And every state doesn't have tribal nations, either. But, but there is a handful that that do. And Nevada is one of them. And, you know, you have to balance respecting the sovereignty of a tribal nation. right? Because they are sovereign nations. And then balancing that with... The job of the state to again ensure that product is tested and and safe and done the right way. And then obviously there's parity concerns overarching all that with a regulated market that that is is right next to, uh, you know, a tribal nation. And again, you know, in a positive light. You can look at it as like, what a great test case for interstate commerce. If if we were to be totally warm and fuzzy about it. But I also realize that that's not always the reality in those negotiations, And, you know, most states start. With compacts. You know, you want to have the conversations and get those tribal leadership and state leadership in the same room and have those discussions. You know, Washington, I think, was the first state to envision a tribal compact. Nevada, as we do through Canra, and also just as state regulators, we do our best to steal, you know, policy ideas from other states. And try not to reinvent the wheel. And I know that in Nevada, our tribal compacts were very similar to Washington. We leaned heavily on him. And then you have those conversations. And, you know, again, I can speak really specifically to Nevada. There's give and take. There's negotiations on that. We certainly want tribal nations to be able to participate and generate revenue through new revenue streams, which are difficult to come by anyway, but very difficult to come by in some of these tribal governments and these tribal nations that have to support their tribal members. And, you know, in Nevada, we really landed on. Obviously, we don't have the regulatory insight into all of your operations and supply chain that we do with our regulated market. Because you are a sovereign nation. But one thing, and so if you want to grow and sell on your tribal lands, that is your right. And obviously, that wasn't my decision, right? That is the governor and the principal of a state, and the legislature envisioning that in state law. But so, so, that. That existed, but from the the regulatory body again, as our primary responsibility is to ensure tested and safe product. You know, we we met at, uh, our testing labs, uh, in Nevada. If if the our tribal governments want to sell into our market, um, which we were absolutely fine with. That was the transition point that, you know, you would test on a state-run, state-regulated laboratory. So, at the very least, we could ensure that the product, even though we may not have insight into the whole supply chain leading up to that point, that we knew that at the end of the day, the product was safe and tested through our labs. And that was the entry point from the tribal government into the state-regulated marketplace. And it's not without its challenges. It's not without its continued negotiations, But that seemed to work and help. Give some of these tribal governments the ability to both have their own regulated marketplace, but also participate in the state regulated marketplace as well.

Ed Keating: Oh, fascinating. No, that makes a lot of sense. And having testing, sort of being the entry point to the market and making sure it passes through that gate, if you will, makes total sense. And I would also think that because the states have already probably had those negotiations around things like tobacco pricing, gasoline pricing, gaming, like, there's already that. Means for having these discussions. So cannabis was just one more thing, maybe with different things. That might make it controversial, But we've had these discussions before and let's figure out a way to make it work for all parties. So that's great. That's great. Now, we've talked about some edge states. We've talked about tribes. Let's talk about Washington, D.C. The big question that's been hanging over our industry is, are we ever going to get...rescheduling, descheduling. It's been put on hold. Every now and then, somebody sends up a signal, flare, like, oh, I just heard that. It might be on the top 100 list of priorities for the current administration. It's number 98. I mean, any insights? Because you've been in D.C. and obviously you're in the industry and I know, you know people. So, any thoughts that you can share?

Tyler Klimas: I mean, I'm no more bearish, bullish on on the potential for rescheduling, even given, I think, last week's news, right, on the 90-day update to the administrative law judge, which basically said we've not done anything and there's been no movement. But, you know, again, I think it was lovely and exciting to think that there was potential that President Trump would come in with his pen and solve all of our problems. Because why not? And that's just not the reality. And it was always going to be, as it is with every new administration, the first chunk of the first year is going to be dedicated to top level policy priorities. And by God, we are definitely seeing that play out in every way, shape or form. And we know that cannabis is not necessarily the top priority. You know, we also knew, Ed, that...Not a lot was going to happen until, like the line, staff and some of the appointees were put in place. And that just that doesn't mean just department and agency heads, which have largely been filled. It's also staff attorneys for these agencies. Right. And deputies, et cetera. That all had to be in place. They're not going to likely move or make any, you know, explosive policy decisions without those kinds of staff members and support. Support staff in place to analyze it under their lens and their view. And so, you know, on the DEA side, we have an acting administrator, you know, we have a nomination in Cole and he, you know, So I still think we're going to need to see those folks put in place first. And that kind of tracks with, you know, kind of the barrage of policy initiatives that are coming out of the administration anyway right now. So all that to say is, I think there's still hope. I mean, it still makes sense. I mean, we have a legitimate recommendation by HHS, backed by science and investigation and analysis. That can't just hang out there forever.mThey do need to act. So hopefully they do make some progress on that. But yeah, it's going to be a little bit of a waiting game. But yeah, it'd sure be nice to get at least some indication or some breadcrumb here or there to just. help, you know, all of us wake up in the morning.

Ed Keating: Yeah, no, I agree. I think it's, you know, they've got 99 issues and we're not one of them yet. So hopefully that'll happen. But it also reinforces that other point that, you know, hope is not a strategy. And, you know, I worked for a publisher many, many years ago. And the CEO said, you know, we can't rely on the federal government's changing of the regulations. For us to have a good year because we get to print more tax books. And, you know, that's when they started realizing that, you know, you needed to really understand your customers better and their workflow, and build those products, not just, hey, the new rules are out and buy a book from us or buy a loose leaf. I think it's the same in cannabis that we can't really rely on that. And we've got to just run our businesses as best we can. And, you know, especially challenging for the plant touching. Ones that, you know, can't write off a lot of their expenses. So, you know, with that as a backdrop, you know, questions I always like to ask in the podcast are. Do you think the industry has hit bottom? I mean, we've seen some receiverships happening. We've seen ancillary companies declare bankruptcy. You know, are we at the nadir? Are we working our way up? Or who knows?

Tyler Klimas: I sure hope we've reached the lowest point, Ed, for many, many reasons. So, yeah. No, I mean, and you just said, hope is not a strategy. So sorry about that. But I don't know. Yeah, no, I mean, I like, I like, I mean, it's. It's just tough going and it's total survival mode. And you're right. You know, we're seeing receiverships. We're seeing MSOS pull out of certain markets. It's, it's, you know, a lot of debt being carried. So, yeah, I mean, I don't know how it gets much worse than this. I mean, I guess I could create a scenario, but I might. I really do hope that that we are at the bottom and that we are looking up. But I will say, it's all about money, right? I mean, as in life, and capital right now is frozen. So, you know, you can't maneuver if you don't have access to money and capital. So we are going to need something. We're going to need a sign. We're going to need some kind of movement or signal to unfreeze some of that capital. flow, or it is going to continue to just be carnage and painful. So, you know, again, if that's rescheduling and 280E that goes along with that, that's great, Or even indications. But it's a really, really tough time. I don't think anybody would disagree with that. But again, you know, around the corner, If there are some signs, I do think we have the ability to start ratcheting it up a little bit. And it certainly seems that everybody's paid their dues. Everybody's beaten, broken and bruised. So, you know, it's, it's, it's time to, to hopefully start looking up instead of down.

Ed Keating: That's great. So, Tyler, with your, you know, background of being on the consulting side, the lobbyist side, the regulator side. Any trends that you see sort of looking forward? I mean, I know we've touched on a lot of things, beverages and how things get regulated, but any other trends or things that you're keeping an eye on that our listeners should be thinking about themselves?

Tyler Klimas: Obviously, hemp in general, right? If you're not diving as deep as you possibly can into that, that is going to be a top line subject area for a while now. And also, we see regulated cannabis companies getting into the hemp game. Maybe out of excitement, maybe out of necessity, maybe out of a bunch of different factors. So, obviously, what's that Frustration. Right. So that dominates, you know, a lot of the thought exercises today. But also, I hate and I don't want to lose sight of the illicit market. And the illicit market continues to grow. And, you know, we're seeing states increase taxes for cannabis, which is just. Asinine and totally mind-blowing to me in some regards. Because they can see what markets do after they're established, like the Nevadas, like the Californias. And California is one that is proposing, or has a tax rate increase on the horizon. Hopefully they resolve that. But that's frightening to see. But again, all that does is make product more expensive. And allows, again, this illicit market to continue to grow, to continue to expand. You know, you saw the article in the Times about the inversion issue in New York state. It's very, it's very real. And I think, you know, that comes to hurt whatever cannabis and hemp collective one plant. So it doesn't matter, the illicit market, unregulated, unfettered. That is just a massive trend that we cannot keep our eye on. The ball. And, you know, you see states putting resources towards enforcement. I'm not sure how effective that really is, because I think it's systemic, the problems that are festering and allowing for that illicit market to grow. And it's just a killer. We really have to keep our eye or not take our eye off that ball.

Ed Keating: Yeah, I think it's a classic elasticity of demand kind of thing, where every dollar of tax, you know, has an impact on searching elsewhere. I know between Connecticut and Massachusetts, there's vast disparities in supply. And the same market basket in a Connecticut dispensary could be $100 less in Massachusetts. We're a small state. People can easily go to Massachusetts and buy what they want and not have to pay that excess. So thank you. I think those are all great, great, great points. And you've given us a lot to think about today. Now, if listeners want to learn more about Leaf Street strategies, what's the best way for them to find you?

Tyler Klimas: Sure. Please visit our website, which is leafstreetstrategies.com. You can check out some of our services, some of the recent news. Reach out on LinkedIn to me personally. I mean, I do this all day, obviously. I'd love to talk and discuss this with anyone and where I and we can help. I would love to do that. So, yeah, I really enjoy that part of it. And then also, Ed, as you and I know. Frequenters of these trade shows throughout the year. If you're at a trade show, you'll likely see Ed and myself there. So, you know, hopefully, you know, can engage with folks there and always feel free to come up and say hello.

Ed Keating: Excellent. Well, Tyler, it's been a real pleasure, as always. And, you know, thanks so much for joining us today. And I look forward to seeing you at the next trade show, where we'll both be, which I think is in Colorado. So see you there.

Tyler Klimas: Thanks, Ed. Great to see you. Thanks for having me.

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