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Cannabis pioneer Kris Krane joins the High Rise at Benzinga in Chicago to reflect on his 25+ year career. He discusses pivotal moments like legalization in 2012 and his shift from advocacy to industry. Krane also provides an insider perspective on dynamics shaping the Illinois market and future growth opportunities. Tune in for a fascinating, in-depth interview with one of the leading voices in the cannabis reform movement.
High Rise Live in Chicago at Benzinga.
Welcome to the high rise podcast presented by headset, the leading data and analytics company for the cannabis industry.
Cy: Welcome to the high rise live from Benzinga in Chicago, a laid back day to back conversation where we talk all things cannabis. My name is Cy and I am joined as always by Emily Paxia. Hi, everyone. Welcome to the high rise. And today for a very special event, we have a very special guest with Chris Crane, director of cannabis development at KCS.
Strategic strategic communications. I almost had it. Thanks for joining us, Chris. Thanks so much
Kris: for having me.
Cy: Yeah, this is exciting. I think that one of the last Benzingas we did was Poolside. This is nice to be up here on the stage and thanks everyone for coming out. But Chris, let's start a little bit about your background because I know, KCSA today, but you've been around longer than anybody, maybe?
Emily: Yes. Why don't we, yeah, tell everybody your background. Sure. This is incredible, guys.
Kris: Sure. So I've been in this [00:01:00] since about 96. I got started as a student activist at American University in the 90s helped, I was one of the founding members of a organization called Students for Sensible Drug Policy back in 1998.
Spent the 2000s working in DC on cannabis and drug policy as the associate director of normal. Executive director of SSTP got into the industry in 2009 thanks to Steve D'Angelo and the crew at Harborside Health Center. Started an early startup company called CanBe back in 09 just to help people set up professional retail cannabis dispensaries.
We were way ahead of our time, it failed miserably, but it was a lot of fun. And from that I started a company called Forefront which became Forefront Ventures. We became a multi state operator, publicly traded. And now I, I work with KCSA and I do a handful of other consulting projects as well.
Very cool, yeah. I'm also the chair of the board of the National Cannabis Industry Association, I should
Cy: mention that. Yeah, also. Just one more thing, right? It is pretty pretty amazing because I know Emily you and I feel like pretty old timers here. But we've not got nothing on Chris.
Emily: No, you were in cannabis through
Kris: Y2K.[00:02:00] I was. I had a lot more hair back then too,
Cy: yeah. Yeah, thanks for getting us so far along and continuing, to push and congrats on all this stuff. And I do want to get into it, but let's start with Illinois. Chicago specifically, it is your current hometown, is that correct?
Kris: It is, yeah. I've been living here for five and a half years now. Yeah, it's a great city. Yeah, very
Cy: cool. And a lot going on in the industry. Let's start with like just talking about Illinois. What do you think makes it such a, an interesting market? There are a lot of company, MSO headquarters that are here, obviously a pretty robust market.
But what do you think makes Illinois
Kris: unique? Yeah, so it's a really robust marketplace it's particularly interesting because this has really become the hub of the multi state operators and that happened like somewhat by happenstance in that, if you look, when you looked at the history of what states were legalizing for medical use originally and the trajectory they went on.
In the early days, and we were doing, I was doing consulting 2009, 10, 11, 12 the folks that were getting into the industry in some of those earliest markets, they weren't usually [00:03:00] like the pillars of the community business people. And it's not to say these were like shady fly by night folks, right?
But people who had really established themselves in the business world, this was still seen as too risky. And as they went from state to state, from, places like Maine to D. C. to Arizona to Massachusetts, then you got to Illinois and Nevada. And that was really the first time that you saw folks who came out of really mainstream businesses get involved in cannabis, apply for licenses.
And so a lot of those early licenses in Illinois were granted to companies that were At the time quite small but were run by real professional business folks and the next states that came online after that were places like Maryland and Pennsylvania and New York and those states didn't really want to see experience from California, Colorado.
That was perceived at the time as being the Wild West. So having experience in Illinois. Was welcomed and so that, that was what became the springboard for what became companies like Cresco and GTI and Verano and others [00:04:00] that sprang out of Illinois and then went over to, Maryland and Pennsylvania and New York and New Jersey and all the states that came next on the East Coast.
Now you've got to a point where, we made the transition from medical to adult use back in 2020, I believe. Or January 1st, 2021 and you had a nice mix of, somewhat limited licenses, not necessarily overly limited the volume, sales volume at these stores is really robust not enough cultivators, it's been great for those who have cultivation licenses, but the state's now starting to roll out new dispensaries, new cultivation licenses and the state's really, it's really embraced us.
We also happen to have a governor who's. Extremely supportive of the program so much so that he was on this stage earlier today. And so it's been a nice mix of welcoming political climate, a welcoming business climate, smart business people. And it's been a great market. We need more.
And it's coming, but it's been a great place to do business.
Cy: Yeah, and because we like to talk about data on the high rise, one of the things we looked at was Illinois in the top line sales, and it's about 2. It's going to probably [00:05:00] do about 2 billion this year or close to 2 billion. And on a per capita basis, the number comes in about 100.
57 bucks which is decent, but an average market. And it's hard to say an average market. They're all so different, but like a 200 per capita is pretty good. So we're a little behind here in, in Illinois. What do you think is driving some of that? And where do you think the growth will come from?
I
Kris: think it's primarily we haven't reached critical mass of dispensaries yet is one thing. So there's still a lot more dispensaries that are being licenses that are being issued and are being rolled out. Those stores have started opening trickling out over the last year. So there's still areas of the state where there's not a lot of access.
Pricing is also too high here. And I know, not necessarily what a lot of folks like to hear because they're, People are struggling with cratering prices in a lot of states, but pricing is really held here, but it's really high. And so we're competing with the illicit market.
There are a lot of consumers that are still getting their product from the illicit market, as opposed to going to the stores because they're still paying 50 eighths where they can get, 35 eighths on the, on the illicit market on the gray market. Give you an example. The company I started, Forefront [00:06:00] where I'm on the board, we have a store right on the Indiana border in Calumet City which is just south of Chicago proper, and the store does extremely well, it's right next to Hammond, Indiana, very close to Gary, Indiana, lots of population in that northwest corner of Indiana.
But the folks at the store hear all the time that the that people that they, when they're in, or others, will rather drive 45 minutes to an hour to go to Michigan than drive 10 to 15 minutes to come to Illinois because pricing is, it's half the price. And you have a wider selection right here.
You still have 19 large scale cultivators. And so every store here has the same menu or pretty, pretty much the same menu. You go over to Michigan, there's a much wider variety of products. There's some higher quality flour and it costs half the price. And so people will drive further to go get the lower priced good quality products in Michigan.
Then come to a store in Illinois.
Emily: Yeah, and there's also tax differences in the way that Illinois treats their products. Big tax differences. Yeah, let's talk about that
Kris: a little bit. Yeah, so Illinois taxes flower with a 10 percent excise tax, but anything [00:07:00]above, I think it's 30 percent THC or 35 percent THC, so essentially concentrates, are taxed at a 25 percent excise tax on top of sales tax.
So if a consumer is interested in buying cartridges or concentrates the tax rates are significant there.
Emily: Yeah, that does drive a
Cy: lot of difference. Yeah. Yeah. And the shopping experience as well. Going into some stores here in Chicago, flowers not on display. You go to the kiosk or you can talk to, the bud tenders, but you can't really interact with it at the same level that I think, many other
Kris: markets have some stores.
You can. It depends store to store, but you can't. You can't let somebody like Touch and feel the flower here like you may be able to in Michigan, even they mean they still have, jars and they'll pack on site in Michigan or like the, the old California model, or they still do some places in Colorado here.
Everything's got to be prepackaged. Any flower that's out on the floor has to be in jars and behind, behind glass or whatever. And so it's, you can't really interact with it or smell it. And, those smell jars, they didn't really work, right? The flower loses its smell. The second day it's out on the floor, it loses its smell.
And then that's inventory that you can't sell. It's almost worse. [00:08:00] Yeah, and nor do you want to really buy. Yeah. Exactly.
Emily: Exactly. And and there are some, yeah, there's other idiosyncrasies. I noticed like when you enter in one door, you have to exit out another door. So thinking back to how this all came to be, you were invited, what was the official title?
The
Cy: governor's adult use cannabis health advisory committee. Yes.
Emily: Yeah. And so for our listeners, will you mind talking about what it's like to get. involved at that level when these laws, or the way that the implementation is getting put together? Yeah,
Kris: so that was an interesting one.
I was invited by the administration to serve on this governor's commission that really was looking at the public health implications of legalization. I was one of the few industry representatives. Most of the members of that commission were from the public health sphere. They were from hospitals or healthcare organizations and we were looking at things like, we're driving rates or driving under the influence rates going up the problematic use among youth and, really we found that there, there weren't many problematic issues and it was particularly interesting to hear that because this wasn't coming from the industry.
This was coming from the healthcare sector from doctors and researchers and healthcare advocates. So that was, it was an honor [00:09:00] to be a part of that. I did leave the commission this past year but it was great to be part of it. And really part of the reason I left was we weren't really seeing any negative impacts.
So it was like, okay, I can probably have more of an impact elsewhere, but it was a real honor to be part of that. So on
Cy: that the regulatory work your history, goes way back as we heard in the intro there let's talk about normal let's start there, back in 2000 what was that like?
And, was it 2000 or was it even before 2000? Yeah,
Kris: so I was involved with the campus normal chapter from 96 through through, through, through 2000. I started as an intern at normal in late 1999 and was officially hired like The week I graduated college in 2006, so I started there full time June 06.
So it was a really interesting time. It was the start of the George W. Bush administration. So it was not a, wasn't a time filled with a lot of victories in cannabis at the federal level. We were, we were treading water for a long time. Trying to stop, new bad laws from being implemented and seeing, legalization at the state or federal level that, that wasn't, that was our goal, but it wasn't something that we, thought we were going to be able to [00:10:00] achieve in the short term there.
Our job at that time was to. Educate the public to build momentum for legalization to bring attention. We were winning was on medical marijuana. And so we were involved in a lot of those state based medical marijuana ballot initiatives and lobbying campaigns. We were doing fly ins and lobby days.
We were, it was involved in a campaign at that point where we flew in. Like 40 multiple sclerosis patients from all around the United States to meet with the MS Society because even back then the MS Society was telling MS patients not to use cannabis. And so we had all of them meet with the MS Society and talk.
from personal experience about how helpful this was. And a few months later, the MS Society changed their position, and we took them all to Capitol Hill. And so we were doing events like that at that point, really trying to move the conversation forward and winning on medical cannabis, building momentum, but, victories on legalization were still in, in the future.
Back
Cy: in 96, like what, what motivated you to start this, to, to start, I don't know, participating at that level?
Kris: Yeah my, my father was a medical cannabis patient in the 80s before the term medical [00:11:00] cannabis existed. My father passed away when I was 8 and he had a very rare form of emphysema.
Which, it sounds counterintuitive, somebody might use cannabis for a lung condition. But we know now that cannabinoids are vasodilators, they can help open up the lung sacs. And so when he had these horrible breathing attacks, he would take a couple hits off of a joint, and I only, I didn't know what marijuana was, I knew what joint was, and it was dad's medicine when I was, six years old, and it would allow him to breathe.
Nowadays, he would, he would probably use a vaporizer or an edible. But that didn't exist in, 1984, 1985, 86. And when I went through, it wasn't actually the D. A. R. E. program, but it was basically New York City's version of the D. A. R. E. program when I was growing up. And they were telling all this, us all this stuff about cannabis and how evil it was and all the things that it could do.
I realized at a fairly early age I was being lied to. And so I started looking into it more. By the time I got to college, I realized I also enjoyed it. And so I joined the local normal chapter at American University, and away we went.
Cy: And as a student there was also the Students for Sensible Drug Policy work as well, right?
That's
Kris: right. So in [00:12:00] 1998 I was one of the founding members of SSDP. That organization was really founded around a law that was signed, that was, it was the Reauthorization Act of the Higher Education Act signed by President Clinton in 1996, I believe it was. That said that anybody with a drug conviction would be denied financial aid to attend college.
That really galvanized a new generation of students to get involved in working to end the war on drugs. It was beyond just cannabis but it was really motivated by this specific financial aid provision. And this also happened to be the early days of email. In the internet and DRCnet, which is a great, still is a great drug policy organization.
They gathered up all these edu email addresses of folks that had signed up for their email list. And we put out a blast email to students around the country. Cause at that time students all had a edu email address. There was no Gmail or anything back then. And we were able to organize chapters on five campuses and it caught like wildfire over the next couple of years.
We had over a hundred chapters on campuses around the U. S. Still going strong today. I
Emily: love us is DP. It's one of my [00:13:00] favorites, and I think it's so important because you just have to acknowledge that kids are going to try things and in that age range. And so it's not just about focusing on these other efforts, but it's also about making it safer for people to have that experimentation.
And I just think it's an incredible organization.
Kris: So still. That's still where my heart lies. Yeah,
Emily: it's truly impressive.
Cy: Yeah. And Emily, you met Chris back in what, 2014,
Emily: Arcview?
Kris: 2014, Arcview, yeah. Whenever you first came to Arcview, that's when I met you. I was at the very first Arcview meeting.
That Troy ever organized in 2010, I believe it was yeah, early days. Yeah, it
Emily: was cool, because I remember when Morgan and I were putting Poseidon together and we're coming up on our 10 year in October, I think it's October 11th, but we started in 2012 and we're really digging in on this and working on it patiently.
And I remember when we, we were starting to study up on like the key people who have been driving this forward, and you were in the mix and Steve D'Angelo was in the mix. It was like, really cool. And I live in San Francisco and I remember hearing about [00:14:00] Arcview, it was like this cool thing and they had it at the law firm and it was, so anyway, I was really excited that,
Kris: that was that.
Yeah, that was a that was a classic meeting there. We got Kishi Kja who was he still. Still practicing cannabis law now but he was at the time an attorney at a pretty big law firm in San Francisco, and they agreed to allow us to hold the first ARKview meeting at that, in their conference room and they weren't happy about the work that Khurshid was doing and no, they actually, they didn't allow us to hold it, Khurshid held it there without their permission, so he was fired in the middle of the first ARKview meeting.
He walked out of the room, he came back in, he's I have an announcement to make, he's I was just laid off, I was just fired from the law firm, he goes, but, They're going to allow us to finish the meeting, so we can all spark up if we want now. So we all started smoking weed in the conference room.
It was a great time. That's amazing.
Cy: And that's, you made the jump to forefront, or you started to on that side. Going from the regulatory side into the business side, and what was that kind of journey like?
Kris: Yeah I'm glad you asked that. So for me, the motivation for moving from the policy side to the industry side, for me it was, I saw it as an extension of [00:15:00] what we'd always been doing in, what I'd always been doing in my advocacy work.
Like, when I was at Students for Sensible Drug Policy, I established a good relationship with Steve D'Angelo and Harborside Health Center. Which at the time was like the dispensary. They were in Oakland that we would hold out as the model. Anytime old TV show, I remember they had their own. I was there at the time, actually.
Yeah. There was an episode that was supposed to feature my wife that but they got canceled. She never got on she never actually got on the show. But when I was at SSDP, I would go and I would do these tours at Harbor side and I would see what it was like. And it just, it was a light bulb that what we were real, what they were doing there was demonstrating to the rest of society.
What a post prohibition world could look like. And at that time when we were out there educating the public about the need to end prohibition and to legalize, if you can't give somebody a concrete visual of what this is going to be, they're going to default back to what they've always known, right?
Which is prohibition, right? Drugs are bad, marijuana's bad, blah, blah, right? And all of a sudden you have this beautiful retail store, and there were others, right? But Harborside was the, that was the model. [00:16:00] Beautiful retail store, run, that anybody could walk through that and think, This is fine in my community.
And it was like, and if we can basically just demonstrate to folks what It's going to look like when Prohibition ends. It's no longer a scary prospect, right? It's not some abstract concept. This is, this is something that you can touch, you can feel, it's in your neighborhood, it's safe.
I remember being on a tour at Harborside in, I think it was in 2009, with a couple members of the Oakland Police Department not our target market. And they walked through the whole thing and they saw the, chain of custody protocols in place and they met with the staff and they talked to patients and they walked through and they're like, yeah.
This is the least of our concerns like you're in like you're never going to hear from us again. I was like, wow, if we can convince the Oakland police department. Yeah, that like this dispensary is a good member of their community. This is going to change the world. This is what's going to end prohibition.
And so that was my motivation originally getting into the industry. Aside from like maybe not spending my life on a non nonprofit salary. Yeah, but that this industry is going to do more to advance the [00:17:00] cause of ending prohibition and legalization. Then the work that I had been doing in the nonprofit world in D.
C. for the prior decade.
Emily: It is about like living in the example of it. And I remember Steve, what did he used to say? Bring it out of the dark and into the shadows and into the light. And I remember one time when we were there we used to go over and visit a lot. And they were telling us about how the police actually relied on their security camera system.
Oh yeah. That's right. With things that had gone on in the neighborhood because they had the best in most of us. It was. Oh,
Kris: they busted a whole home, there was like a home invasion that was being planned at the Motel 6 across the street, and they caught it all on camera, and so they were able to, stop folks from causing real harm in the community.
Cy: Wow. Wow. With all your history, I want to know what do you think might be your, what do you remember as possibly your happiest moment in Canada, besides, obviously, being on the high rise here on the
Kris: Benzinga stage? Yeah, this this stage right here. No, it it had to be election night 2012.
When we first legalized in Colorado and Washington I flew, I was living in Arizona at the time my wife and I went [00:18:00] up to Colorado the, the Christian Cederberg and Brian Vicente and Mason Tvert, and they were all friends of mine from my activist days, and I wanted to be there when this actually happened, and we had folks like, Keith Straub from Normal and Ed Rosenthal and Tom Angel, folks probably know from Marijuana Moment, and all these old activists, everybody converged on Colorado because we all wanted to be there for history when The first state legalized.
And so many of us, we'd been working on this at that point for, 15 plus years. And even though we knew we were going to win, we didn't necessarily know for sure on election night, but as the early results came in, we knew we were going to win fairly early in the night. But when they announced that the initiative passed, that 64 passed, it was the most unadulterated joy.
In one place that I've ever been a part of. I saw, I remember turning over and Tom Angel had a tear, going down, down his cheek. And I think so did Ed Rosenthal. And people were just hugging each other. And then the joints all started, we all started lighting up joints. And it was just, it was just bliss.
And it was, it was the realization that this can happen. And I remember the next morning, sitting on a park bench, before the ARCVU meeting. We had an ARCVU [00:19:00] meeting scheduled the morning after the election. With my partner, my co founder Josh Rosen at forefront and saying right now, all around the country this is going to change the trajectory of things.
Because I remember, and I brought up, I remember seeing a study that had been done a few years earlier that, it was around 50 percent at the time of American supported legalization. But when you ask them, do your friends and colleagues support legalization, it was like 20 something percent.
Which told us that people were afraid to have this conversation. And I remember saying to Josh, I was like, right now, at water coolers. And break rooms and entrances to businesses and work sites all over the United States people are saying, Hey, did you see what Colorado Washington did last night and they're all having this realization moment that they're not the only one that believes in this cause that all these people they talk to.
They're going to find out right now, as we're having this conversation, they also believe in legalization. And what we saw, literally the next year, we saw that support jump from 50 to 60%. And it's because that victory in 2012 opened up the conversation [00:20:00] and allowed people to feel comfortable talking about this as a mainstream issue.
Cy: Amazing. Amazing times. Yeah, incredible times. And let's hope we have some more incredible times in our near term future here. Chris, thanks for joining us. And everyone, thanks for joining us for the high rise live here. And then big shout out to Benzinga for having us on the stage. And thanks again.
We'll thank you.
Kris: Thank you.
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