E167 - Bluegrass Bud: Kentucky Medical Cannabis Arrives

[00:00:00] Welcome to the High Rise podcast presented by Headset, the leading data and analytics company for the cannabis industry. Welcome back to the High Rise, a laid back, data back conversation where we talk all things cannabis from USMSOs to Canadian LPs, products and markets through the lens of data. My name is Si Scott with Headset and I am joined as always by Emily Paxia of Poseidon. Hi everyone. Welcome to the High Rise. And welcome to 2025. We're back.

[00:00:29] And we're back, baby. We're back. We made it through the long cold winter of January. Yeah, right. I mean, there's like, I don't know where the time went, but yeah, it's been a roller coaster. It's, you know, and it's like as an investor, it's a hot start to the year because you're doing like budget work with everybody. You're working on preparing for the year.

[00:00:54] And I think this year or two, it was a lot of, we're just waiting to see where cannabis is going to enter the conversation with the new administration. So I know that is the question on everybody's mind. I don't know. Do you know, do you know what's going to happen? No, I don't know what's going to happen. But for some reason, I'm more optimistic than I have been for the last two years that something is going to happen.

[00:01:18] And maybe, I don't know, but it sounds like RFK is moving forward with his confirmation for HHS. So we know he has in prior moments spoken positively about cannabis versus other products for a number of things. But we'll see. I know he also just deferred to the DEA to manage the scheduling process, which doesn't totally surprise me because the HHS already did their work on the scheduling process.

[00:01:48] And now it technically does live with the DEA. But what happens there remains to be seen. So, you know, we've got a lot of things going on and there's been a lot of work to kind of ride on the coattails of the groundswell around crypto debanking and reform for banking on crypto as an emerging market. And we're hoping to elevate what the gratuitous debanking that cannabis has experienced through the same period of time for no good reason. But, you know, we'll see.

[00:02:18] It's an interesting and volatile time. That's for sure. Yeah, just like complete wildcard, I feel like. Like who knows which way it's going to go. But yeah, interesting on RFK. So out with vaccines, in with cannabis. Yes. And I mean, all of this running concurrent to consumer trend shifts and Surgeon General coming out against alcohol and the cancerous associations. I wouldn't say causation, but, you know, associations, correlations.

[00:02:47] But here we are. And this is what we do. We just we persist as as business builders and keep going. Yeah, still here. I did see a headline around that around the RFK was I just saw the headline. And maybe you saw this as well. But it was a comment about deferring to the DEA on it. Yes. Which, you know, I don't I don't think we had a chance to talk about.

[00:03:14] Kind of this whole the whole debacle with the rescheduling conversation getting kicked down the road because of the DEA's conflicted position, more or less. We didn't talk about that, did we? That then all happened. Who knows, like what what we've talked about? Who knows what day it is? Who knows? We should maybe Claude or AI Chachibuti could tell us what we talked about. No, it's been a minute.

[00:03:42] And a lot of things happened all of a sudden at the end of the year. And I think, you know, the ALJ, the judge, you know, rightfully called out flaws in the process and hit a hard reset. So that's where we're at. And I think, you know, anybody who's surprised that the DEA is conflicted in their point of view on this wasn't has not been paying attention to the origin of the DEA slash history around why cannabis lives where it lives.

[00:04:11] Vis a vis Nixon and all of these things. So just, you know, go into the Internet and do a little search and you'll understand why this is not, you know, news at 11 that the DEA is not like a huge advocate for reform of cannabis scheduling. Yeah, right. No surprises there. Well, anyways, I'm sure it will be a topic of conversation for the weeks and months ahead here, what this new administration is going to do.

[00:04:41] But hopefully it's something and hopefully that something is something positive. But apart from the federal today, I really wanted to dive into the states, particularly one state that I'm not sure if everyone is paying enough attention to or knows about. And that state would be Kentucky. Kentucky, which actually has an amazing history as it pertains to cannabis, but specifically via industrial hemp.

[00:05:09] I don't know if a lot of people know this, but we actually managed to let our our North America or our American hemp seed stock get destroyed. And so the University of Kentucky was very early to try to research and revitalize our hemp genetics for cultivation in the United States.

[00:05:29] And the real reason that they were doing that is for industrial purposes, such as plastics or carbon nanotechnologies or textiles, things like that. And, you know, I laud the University of Kentucky for diving in on it. I remember when I visited their facilities there to see the different strains they were growing. I think it was 2015. It was really it was a really fascinating journey to visit.

[00:05:56] But now we're talking about medical cannabis. Talking about medical cannabis. Yeah, that's right. And that is interesting on the on the hemp side. Yeah, pretty crazy. And I know, yeah, it's still I think a pretty robust hemp market. But in the medical side, this is new for Kentucky. I know they passed it back in 2023, I think.

[00:06:23] And here we are, you know, as of January 2025, stuff starting to move. And the big news this week was they've issued 2200 patient cards, of which the governor of Kentucky handed out the first two, which I thought was pretty cool. And when I when I saw that headline, I thought that they only issued two cards. No, but it's yeah.

[00:06:49] I mean, it's not beyond belief sometimes with the way some of these markets roll out. But 2200 made more sense. No, I mean, I feel like the early days of the New York medical market was probably like two patients. But it is good because I saw the conditions list. And so it's any form of cancer, chronic or severe pain, epilepsy or intractable seizures, MS, muscle spasms or spasticity.

[00:07:15] I wonder if they'll open that up to like other like Parkinson's and ALS. I hope so. Chronic nausea, cycling vomiting syndrome or post-traumatic stress disorder. I think, look, for a state like Kentucky that's on the face of it, a more conservative state. I think those are some great conditions. And to me, those are the ones that deserve the access immediately. So I was happy to see that for a kickoff for these states. Yeah. And the cards have been issued.

[00:07:43] But I don't think the dispensaries are open just yet, although licenses have been awarded. Mm-hmm. Licenses have been awarded. I do not think a sale has occurred yet through this infrastructure. But things are moving. And as a conservative state, there is some conservative restrictions here, particularly around no smoking. So it's going to be only edibles, tinctures. And it looks like vapes are okay.

[00:08:13] And no home grow as well. No. And, you know, well, that was interesting. But the, you know, I'm a fan of home grow just for, you know, I think that should be accessible. I don't think it threatens a market and is hard to regulate. But anyway, I think that on the, like, the form factors, while I was, you know, smoking, I'm just kind of more libertarian on letting people make their choices.

[00:08:41] But I do understand, you know, lighting anything on fire and consuming it is inherently carcinogenic. So there's that. So I guess if you're saying this is a purely medical market, what are the alternative ways for ingestion? I also know that in most states, people are starting to stand up against the smell of cannabis. And I think smoking cannabis creates the most odor associated with it.

[00:09:05] So being mindful of consumption around others who don't necessarily want to participate in this is something we should be doing. But that being said, I was glad that vape was allowed. And I'm hoping, you know, people will focus on purest forms of vape. But there's nothing that can get, I mean, the inhalation of a cannabinoid compound is one of the fastest ways to relieve pain or nausea or one of these things. So I think that it's, I was glad to see that still made the cut.

[00:09:35] Yeah. And they're not the first, right? I think Pennsylvania was like this, right? With no smoking. But it's changed now, right? Pennsylvania has changed. Yeah. Longest medical market forever and ever. The eternal medical market. Yeah. Right behind now Florida. Kentucky will be adult use before Pennsylvania. Oh my God.

[00:10:01] Although the governor in Pennsylvania today threw, threw weight behind it. So this is February 4th. So we'll see what happens there. That's good. And I'm just, I'm just kidding. No, we can throw shade. Yeah. What's that? Yeah. It's, they're surrounded Pennsylvania at this point. But anyways, I'm not here to talk about Pennsylvania. We're here to talk about the bluegrass state, right? So licensing structure here.

[00:10:30] We're looking at 36 dispensaries, 26 cultivators slash processors all awarded via lottery system of which I think occurred. And what was interesting about it was it did favor a lot of MSOs or operators that are currently operating in other states as part of this lottery. And I don't know, you know, what the composition of the lottery looked like, you know, probably predominantly operators from other markets.

[00:10:57] But I also don't know what the application looked like and like kind of what the requirements are. But it does look like a lot went to organizations that might not be based in Kentucky. Yeah. And, you know, I think that is, that's, that's something that's happening. And part of the reason for that is I don't necessarily think it means anything was quote unquote rigged. I did see some discourse on the internet about that.

[00:11:23] But what I think it means is that these companies that have operations in other markets where they've won licenses, they're, they're well-oiled machines in terms of getting these applications done. They know what regulators are looking for. They know what pitfalls to avoid. And so I think it's just actually a leg up. I mean, probably a monetary leg up in terms of resources, but also a leg up in terms of knowing the right resources to use to win it.

[00:11:50] I do know that some of the ones that won were smaller out of state operators who, again, kind of fit that profile. They've just done it well. So it wasn't, I don't think necessarily a big MSO versus, I'm using quotations for those who can't see because big is all relative. But, you know, I think it does have to do with experience in the process. Yeah. Yeah. That, that would make sense.

[00:12:18] And, you know, maybe good for Kentucky medical patients as well to have an operator that can come in and bring that, those learnings from other markets, you know, instead of kind of learning as you go with maybe a new, new operator. It looks like, yeah, 33 of the 36 dispensary licenses went to companies with no prior ties to Kentucky. And the local hemp farmers and entrepreneurs were largely shut out, which is maybe where you saw that, you know, the online commentary around that.

[00:12:48] Some names you might recognize, Dark Horse Cannabis, who is in Missouri and Arkansas. Arkansas. Yep. And Zenleaf, which is Verano, right? Looks like they, they're on that list there. And both great operators. Know them both. And, uh, yeah, it's a great, great addition, I think, to, you know, what Kentucky's program is going to look like. So I think, you know, it's a good thing.

[00:13:14] Hopefully they open, continue to open it up and, um, allow more to come in and grow, uh, the, the market. But at least they, it seems like they're starting with a good foundation with the groups that are getting these licenses. Yeah. And I think that it increases the, with experience, it increases the viability of getting doors open, getting quality product to patients, and it can expand from there. I mean, never forget that every single one of these operations that opens is necessarily local because of the physical aspects of cannabis.

[00:13:44] So it will be creating jobs and opportunities for management, um, to participate. So there's, there, it's not the end of it, I think, for local folks, but I understand there's a sense of manifest destiny and wanting to take ownership of it. But it is, it is tough to get these things open and does require some experience and time and, uh, resources. So maybe this is just to get the flywheel going and then it will expand. Yeah. Yeah. I'm sure. I'm sure.

[00:14:14] I mean, you know, again, they, they've issued two patient cards, so it's all beginning. 2,200. We are spreading misinformation that on Twitter, we're going to get flagged. I know, right. 2,200 cards. And it's maybe, maybe even more by now. Uh, I'm not sure, you know, what the, what the rollout looks like for as far, as far as patients, there are a number of doctors that they've reported that are available to, um, issue these cards.

[00:14:42] So there's a, there's infrastructure there is where it starts. And then obviously you need to support all of that with dispensaries, um, and, and product. So that's all coming. Uh, I do want to talk a bit about what, uh, what Kentucky is going to look like compared to other markets. Um, and I think, uh, you know, looking at other, you know, medical markets or historically medical that maybe have, have moved on from medical, uh, like Missouri would be good.

[00:15:09] Um, but yeah, I've got, I've got some notes here, kind of Missouri, Mississippi, Florida. I mean, you know, every market is different, but I think that, um, you know, what we're seeing here, um, relatively, you know, small amount of licenses, I think, um, like Missouri had 192 dispensaries, uh, as, as, as medical and, you know, Kentucky's looking at 36.

[00:15:37] Um, Missouri was like a billion dollar market in just a few years. I think Kentucky is going to be a bit smaller than that, at least near term. Um, Mississippi, uh, you know, obviously kind of Southern state, you know, conservative in a similar way. Um, open licensing led to 185 dispensaries, but fewer patients than expected. Um, yeah. So a lot of competition, lower prices, a modest amount of annual revenue, and maybe Kentucky

[00:16:07] looks a little more like that. Although the patient count seems pretty high for like the start here. So maybe not. Uh, and then there's Florida, which is just, um, a bonkers medical market, uh, the size of it. Yeah. Yeah. Did you see the great thing too, which I was very happy to see is that we actually saw a real noticeable uptick. The patient count had kind of plateaued leading into the amendment three vote. And, um, as of, let's see, where was this?

[00:16:35] It was as of, um, when was the eight 31, seven 75? All I know is that it's over 900,000 as of the end of January. So we're seeing a noticeable uptick again in, in new patient cards. So people waiting kind of to see where amendment three landed. Yeah, I think so. And I, you know, it's funny cause I remember that here in California because there's always been a little bit of a stigma around having a medical card, especially if you're, you're in a certain profession where you have to disclose certain things.

[00:17:03] Um, so I wonder if people were just kind of holding off, especially with all of the financial professionals in Florida, I wonder if people were just holding off waiting to see what would happen and then they could just walk into a store with their 21 plus ID. But, uh, I'm happy to see it ticking up again. And, you know, like at sunburn, we're trying to help people to connect, to get medical cards. I mean, the Santas did them such a disservice, so everybody should get a medical card. And now the state just misses out on all that tax revenue, but people can get good cannabis.

[00:17:34] Yeah. It's an anecdote around that. So I'm in Seattle and, uh, we have medical, although there are no dispensaries, everything is sold through adult use retailers and the, the difference is, um, just tax and purchase limits. So no tax and higher purchase limits. Uh, I think it's double.

[00:17:55] Um, and I've noticed, uh, retailers starting to encourage medical, um, card signups, which is kind of wacky. I think, I mean, I get it. If you're a big, big consumer, uh, it certainly nets out, I think on the cost versus tax savings. We've got a pretty high tax here, but it does feel a little bit like, um, kind of pushing

[00:18:20] more product, more sales, maybe to the detriment of the state, um, with the intention. I mean, I, I don't, you know, I know it's like a sensitive issue here, but it's, uh, it's kind of weird. Like where the, you have like for-profit retailers kind of pushing it, not in like a, are you, are you like a medical patient in need, but more like, Hey, you should get it. And here's the benefits. No, it's loose and good. It's a Lucy move.

[00:18:49] Um, but you know, it's funny. Cause even here in California, I actually applied to get a medical card again, just because I thought actually I would do better because the taxes, but then there is a hefty annual fee that I'm just not, I don't consume enough cannabis to make it work. So they've definitely figured that out. But I think where they fall short is that it is a hefty fee for a medical patient and that's ridiculous.

[00:19:18] And so it just in California, we have so much product diversion, unfortunately. Um, I think people who are truly medical patients who are really, um, trying to find a more cost effective method are just going to go into the gray market on it. Yeah. Yeah. And if it is, uh, you know, like if there are like recreational adult use consumers that are using the medical to save on taxes, I just hope it doesn't turn into a thing where

[00:19:45] they like to ratchet the taxes up because the state's like, look, we're not making enough here, um, and causes like downstream problems. Um, but just interesting, you know, uh, just interesting anecdote that I've noticed. And it's not like this is a new, I mean, this is, it's been around for a while, but to see it like, um, you know, pushed, uh, in this way was, was new to me. Um, but to kind of go back to, uh, comparing Kentucky to these other markets.

[00:20:13] Um, so Missouri before adult use, uh, to bring some data to our laid back data back conversation, 2.65% of the population enrolled as medical patients before adult use legalization. That was about 164,000 patients. So, but you know, roughly 3% of the population, Mississippi, um, did about 21,000 patients within the first year. And that's about, you know, half a percent to 1% of the population.

[00:20:41] Um, so a lot smaller in, in Mississippi. Um, I don't know, is that, is that like a cultural thing? Um, what, what could be driving that? I mean, it could be culture, but I, I guess it could also just be the, the infrastructure available to, to patients in Mississippi may be, um, a lot, a lot less, maybe less doctors, maybe less, less of the overall infrastructure to support something like this, where Missouri might

[00:21:09] have been a bit, uh, easier to get access. Yeah. I think, I think that Missouri, I will say too, that the operators, they're kind of to our earlier point about the folks who won here. I've never seen a more coordinated professional group than I have in Missouri. I mean, those operators were like, let's all get together big and small and make sure we build this market to create access. And that was in the medical.

[00:21:37] And then it has increased even in the adult use. My take on Mississippi is I've looked a little bit at it is that I think you're right. I think first of all, it's also a heavily distributed population, meaning it's not as, um, there's not as many cosmopolitan areas where it's kind of like, like gathering, uh, strength.

[00:21:58] But also I think that, uh, the, the vape shops that are selling, uh, non hemp derived products are so ubiquitous before even the, yeah. So I feel like that market actually, and it's also that don't like vape shops and smoke shops in Mississippi are also just everywhere in general. I think it's, um, I don't know really why, but I think, I think it is kind of an idiosyncratic

[00:22:27] thing to the state is what I'm, I guess I'm going with. Uh, and it didn't have the support behind it that the Missouri market had. I think all those are, are super valid and, uh, it's what we always say, right? Every market is different. Every market is different for different reasons, but you're right. No, not major cosmopolitan area like, like Missouri would have.

[00:22:50] Um, and, uh, yeah, the operators make a difference and like in Florida, you know, kind of on the other end of the spectrum with, uh, close to 4% of the population enrolled, you said 900,000 patients now. Yeah. Wow. As of last Friday. Yeah. Very exciting. That's, that's such a big number. Like it's a big uptick. Yeah. Huge uptick. And, uh, you know, $2 billion in annual sales, uh, or maybe more.

[00:23:20] Um, at this point, uh, you know, that's, and then Mississippi, uh, sales in year one hit 75 million. Mm-hmm. Um, and I think, you know, when you, again, the infrastructure in Florida, um, is really built, built up significantly. Uh, I think it's probably if you're interested in medical cannabis in Florida, I, I have a feeling it's probably pretty straightforward to come into the program.

[00:23:50] Mississippi, maybe less so. I, you know, I don't know. I've never been or never tried, but I would imagine if I was in Florida, uh, and I wanted to get into the program, I could find a way to do it where if I'm in Mississippi might be harder for me. Mm-hmm. Yeah. Of people who were really advocating for it. So I'll give them that too. Yeah.

[00:24:18] Just different dynamics all around. I mean, and think about Florida, they have a zillion cosmopolitan centers throughout the state. It's a huge state, but, um, there's a lot of, uh, and you know, it's interesting on the backside of the A3, looking at the markets that are the best, it's not necessarily some of the ones you would think, uh, it would be like, so anyway, but let's stay on Kentucky. Yeah. So, well, I mean, I think, what does it mean for Kentucky?

[00:24:45] Do you think Kentucky is going to be, um, a Mississippi on, on one side or a Florida on the other side, or maybe a Missouri somewhere in the middle? I think my bet would be, it follows more of a Missouri. I agree. What do you think? Yeah. Yeah. A hundred percent. I think in a big way, because of, uh, the operators that are going into Kentucky have, uh, a footprint. Some of them have a footprint in Missouri.

[00:25:15] Um, and so I think that they will bring, you know, those learnings and, uh, you know, whether that's how they operate or whether that's, uh, you know, building out the infrastructure and supporting that infrastructure. I think it'll just naturally look a little bit more like Missouri. Um, and because it's Kentucky, maybe not so much like Florida. Um, but, but yeah, I don't know if it's on the Missouri side, uh, Missouri 2.65% of the population.

[00:25:43] Um, that would be, uh, Kentucky's got like four and a half million people. So that would be, uh, like 120,000 patients. Um, so it could be a 200 to $300 million annual market at maturity. Yeah. No reciprocity. So there's that. No flower. No flower yet. Yet. We know these things open up.

[00:26:10] Um, I think, you know, yeah, because they said flower, but you can't smoke it. So you could. Oh, right. You can vape it. Right. Yeah. So you could have the pack, get out the old packs three or whatever. Um, but the, the thing that, uh, comes to mind here is that it does remind me a little bit of Missouri too, cause it's kind of got that like good old boys kind of business network like tobacco. Okay.

[00:26:36] Is this is a homeland and the hearth of tobacco, you know, there's auto there's, there's a number of things, not to mention the horse culture, uh, which does create, there is a patina there. Of, you know, business and networking. And so I think a lot of that does lend itself to, to getting to somewhere that feels and looks a little bit more like Missouri. Yeah. Yeah. Yeah. Yeah. I think that's, uh, totally fair.

[00:27:05] So I'm excited for it. You know, yeah. Yeah. I mean, you know why I think when people see these markets open and they see the way the operators run these things, it contradicts outdated stigma and perceptions around cannabis. And we know some of the, the old, old dudes in Congress that have been the blockers of like

[00:27:30] banking reform and certain things like that have, uh, have not spent the time to see this. So it's the old, the sky didn't fall and actually things improved. So I'm in favor. I'm, I'm excited for this. Yeah. I know we always joke about, um, market tours and, uh, we never do it, but Kentucky would be really cool. Um, I would love to go, go see the facilities.

[00:27:57] Um, and only partly because I'm, I'm such a fan of, of bourbon too. So it would be, yeah. Kind of getting two birds stoned at once here. Dude, let's go because also it's the best. And Kentucky is very beautiful. I drove from, where did I drive? I drove, I drove a lot through the state and also drove through a really crazy thunderstorm. I was like, I'm going to be in a tornado, but you know, that was also when I realized,

[00:28:26] yeah, I was seriously in that moment. But, um, that's when I realized too, about the beauty of industrial hemp. I mean, it's so resilient through those huge storm systems that blow through the plains and it's like, so resilient stands right back up. But, uh, you know, it's a beautiful state and, um, I don't know. I went to school in Saratoga Springs. I have an affinity for the horse stuff, even though I worry for the horses, but let's do it.

[00:28:52] I think we should do it, do a bourbon and, and, uh, bud. Bourbon and bud. Although I, I don't drink bourbon, so I'll just have to. Maybe you can learn. While we're there. I might flip a table. It makes you a little angry. That's what the, the cannabis is for to balance you out. Well, so the other, oh, I'll let you jump in on what you, what do you have next?

[00:29:19] Oh, well, I just on, on the data side, uh, some scenarios on the dispensary revenue potential. Um, and these, you know, these are, I, let's say my numbers, not headset numbers so much. We, you know, we haven't done like a formal analysis, um, but just, you know, rough kind of ballpark and just to kind of have some fun with this. Uh, so, you know, what is it? What are you? Two patients right now? Just kidding. 2,200. Is that what it is? 2,200? 2,200. Yeah. Yeah.

[00:29:47] So if we get to like 27,000 patients, uh, in year one, uh, if each patient spends about $2,000 annually, that'd be 54 million in total spending, uh, across 36, uh, dispensaries, which would be 1.5 million per dispensary in revenue. If, if it's more like 50,000 patients, um, which I don't know at percentage wise, what that would look like, uh, but that of population, but, uh, spending a little bit more.

[00:30:17] I'll say like 2,500 annually. Uh, then the number, uh, climbs to 3.5 million per dispensary. Uh, and then in like a real mature market, you know, this definitely, I don't think would happen year one, but like in a mature market where you've got a hundred thousand patients spending reaches, um, uh, 3000 annually per patient. And that's like more in line with like Florida, uh, you'd have a $300 million market size or 8.3 million per dispensary.

[00:30:46] And that's, you know, obviously averaged out. There's going to be dispensaries that outperform others depending on where they're at, who's operating them. But you know, that's kind of what we're looking at when it comes to, to this market. So in Florida, you have a sense of like a kind of per dispensary average off the top of your head. I could obviously look it up. The, in Florida, the average, no, you know what? And I think I should know this. Do they not publish it?

[00:31:14] I know Florida published so much information about like how much flour is sold and directly. They publish like, uh, grams. Like they, they publish the, the THC milligrams sold through. By store, right? Yeah. By store or by brand. By brand. Yeah. But there's, there's such a wide variance across the state. It's a great, I haven't, I don't. That's okay. It's okay. If you don't, if you don't know off the top of your head.

[00:31:45] I should know that, but I, I'm so hyper-focused on the businesses that I'm in and just focused on. Yeah. Right. Right. Yeah. I just looked it up here. It does. You're right. It doesn't have, it has like the name of the operator. So you've got true leave or air or cure leaf and it shows the number of locations and then the total milligrams of THC. Yes. Um, and total number of ounces.

[00:32:12] So we could probably blend it and get like a per dispensary average. But, uh, yeah, anyways, you know, these are just numbers, you know, whatever they're worth, uh, just kind of making up numbers, 27,000, 50,000, a hundred thousand patients. But, you know, it could get there. Right. Um, if it looks like Missouri, you're looking at, you know, a hundred, 120,000 patients at full maturity. So that's, uh, I think that's a reasonable number. Is that this year? Is that next year?

[00:32:40] Is that in three years, five years? You know, that's, that's anybody's question, but, or anybody can answer that question, I guess. But, uh, I think, uh, I think a hundred thousand patients, you know, 3000 annually, $300 million market size is something that's in the carts. I think so. Um, I don't know. What is that? What else do we have on, on Kentucky? I think that, you know, I mean, and then it just comes down to the ramping of the market, keeping supply and demand up.

[00:33:10] I think the, you know, this is, it seems like they're going to get there with it. And I think, oh, and then it seems as though the hemp products are kind of regulated in an interesting way. We were looking at this as we were. Yeah. Yeah. So I think hemp is, is actually, um, still okay. Uh, hemp derived THC. And I know it's, yeah. Yeah.

[00:33:36] Um, maybe someone can, can write in if, if we're wrong on this, but, um, I mean, it can be a little hard to track with all this stuff moving so much, but I do believe that, uh, uh, they, they have a framework that they put into place in 2023 house bill five, four, four, uh, hemp derived intoxicating products, Delta H THC, or any other hemp derived substance

[00:34:02] with intoxicating effects went into, uh, affect what August 1st, 2023. So it's got like 21 and over, uh, it's gotta be behind the counter or in a locked, uh, display packaging, labeling restrictions. Uh, product testing, possession limits and so on. So it, it still exists, right. Alongside the medical program. It still exists. I do like the way they articulated. They have to be registered with the state.

[00:34:30] And then I did go online and see many of our, uh, known brands that have registered with the state, like uncle Arnie's wild. Uh, so I, uh, the, what's it called? Kiva's, um, what are the gummies from Kiva? Uh, Camino. Uh, Camino. So, yeah. So it's clear they've, they've participated in that they're doing it. They're saying you have to post, um, label, they have to be labeled, tested safety standards. So that's cool.

[00:34:59] Um, I do think. I think that where you can buy the hemp THC drinks is interesting because unlike other markets where they've kind of pushed it into the total wine and spirits channel in this market, you can sell it basically everywhere. Everywhere. But the wine and spirits channel. Yeah. So it feels like it's more like in the hands.

[00:35:22] Now, if I think about the external, like the external, uh, influence on things like this is sold through things where tobacco tends to run in the lane versus other markets where wine and spirits organizations tend to run the table. So like gas stations and vape shops. Exactly. And so I think that's just interesting. Something to think about. Again, every market, it's so crazy how they're all so different, you know? Idiosyncratic.

[00:35:52] Yeah. Like you get those ones, like you're saying, they're, they're in the traditional wine and spirits channel and you've got some big box retailers that are selling these products. And then you've got Kentucky where, uh, not approved at liquor stores, unless I guess explicitly permitted. Um, but gas stations are totally okay. Um, which even, I mean, in, in, in, I think pretty much, I mean, many, many states you can buy alcohol in gas stations and it's always been such a, a strange thing.

[00:36:22] I don't know why it's like, what's the difference you drive to a grocery store, you drive to a gas station who cares, but it's something about a gas station. I'm like, I think I'm in the act of driving. It's like, I associate alcohol with like, well, I'm driving, even though it's exactly the same, you know, you're driving to the grocery store and back, you know, it doesn't, it doesn't change anything. It's just a funny, funny, uh, thing. I'll get gas from my car and I'll get some beer from my car. Yeah. It's very true.

[00:36:50] I do think about it differently too, because it's like, I think about gas stations mainly when I'm like road tripping or driving far, but, um, that's not everyone's relationship to gas stations. I live in a city. Um, so, you know, I'm excited for this market. I think it could be, I think, you know, I know we were talking about whether or not this is exciting from an investor standpoint, et cetera, et cetera. I think we have to stop hitching our wagon to these big kind of step change market shifts

[00:37:19] that are going to occur. And I think we have to start embracing incremental additions to reach for this industry. And I think Kentucky is a perfect example of that. And maybe it'll surpass and expectations, but I think this is just a part of every step matters with an industry like ours. And this is a whole new consumer base. It'll be interesting to see what the take rate is on, on consumers getting, continuing to

[00:37:47] get medical cards and the value proposition of doing that versus purchasing, you know, wild gummies in a gas station and how the industry will articulate those benefits or, or differences. So I think this will be an interesting market to watch unfold and I'm, I'm excited. It's, it's starting to happen. Let's go, uh, let's go watch it in person. We'll go do our tour. We'll, we'll, we'll go for the cannabis and we'll stay for the bourbon and, uh, we'll

[00:38:15] have you flip a few tables while we're out there. Perfect. Thanks for listening to the high rise podcast presented by headset. For more information on headset, visit headset.io. Thank you. Thanks. Hi.