Aug. 25, 2022

Cannabis Investments with Todd Sullivan


 Todd is a businessman who has founded businesses since he was 18. He currently owns ValuePlays, a company that provides information on investment ideas. Todd updates readers about his business ventures, and he also writes for various publications and appears on television shows. In 2011 he was asked to present an investment idea at Bill Ackman’s “Harbor Investment Conference” (which is a real conference). The idea, Audiovoxx, was the top performing stock over the following year. In 2015 he presented before the same conference and has made several stock investment presentations for the Manual of Ideas “Best Ideas” Conferences (which are also real conferences). In December 2019 Todd closed his hedge fund so he could focus his energies on entrepreneurial opportunities in the cannabis space. Today Todd shares his experience investing in the cannabis industry with us!

Transcript

Josh
 Hey, good day, fellow dealmakers. Welcome to the deal scout on today's show. We're going to talk about the cannabis industry and there's a lot of cool stuff going on in the industry itself. We're going to talk about the east coast exits, right? On today's show, we have Todd Sullivan. Who's going to kind of break down the industry and share his insights and what he seen into the industry. Todd, welcome to the show, man. 


 Todd
 Thanks for having me, Josh. I'm excited to be on. 


 Josh
 Yeah. All right. First of all, where are you guys located? 


 Todd
 So we are located in Westborough, Massachusetts. It's about 30 miles west of Boston right off the mass pike. 


 Josh
 Okay, awesome. Awesome. Awesome. What's the weather. If we looked out your window right now, what's the weather like out there? 


 Todd
 Today it's sunny and 80 to 85, but I gotta be honest. This is, this has probably been the coldest June. I've experienced in new England and a very long time. I think we're going to have a string of 80 degree, 80, 85 degree days. That's the first time we've had it this year, which is kind of rare for us. I'm looking forward to of heat. No beaches, no phone is 65 degrees. 


 Josh
 No, the big snowfall. I do not like cold water. 


 Todd
 Yeah. The Atlantic ocean stays pretty cold until it heats up. So. 


 Josh
 Yeah. All right. So tell us about your group. What's the name of your group? 


 Todd
 Just for Kantar product partners. We're a cannabis holding company in Massachusetts. We were founded by Michael Scott in 2019. Michael Scott was also the founding shareholder of a company called nature's remedy, which recently had an exit in September of 2021. This was Michael's second stab at the apple. To say, I think if I think that's the right thing, but at the apple not stab at the apple in the cannabis space and we're looking to replicate that nature's remedy experience, but we have the advantage of that. Nature's remedy. Didn't have, the entire Northeast of that legalized, nature's remedy was founded and started. They couldn't expand outside of Massachusetts on the east coast. There's nothing else illegal, but we have a tremendous opportunity in front of us and we're hoping to take advantage of it. 


 Josh
 Got it. How did you get into the game of cannabis? Because it's still, I would say this is from my perspective, it's still early in terms of the potential. How did you get into it and why'd you get into it? 


 Todd
 What Massachusetts started this legalization in 2016 on the adult use side, I looked at I've been an investor my whole life, right? Because that's what I've done virtually my whole professional life. I looked at it and I said, this was going to be huge. This was going to be, this is going to be bigger than the internet at my stage of my life. At 50 years old, this is going to be like the final send off, last big chance to make a chunk of money. But, but I didn't want to be a drug dealer. You know what I mean? I didn't like I didn't, I wanted to have a very successful business and do it, but I wanted to be able to be proud of what I said, what I did. Right. I, I didn't get involved in the public markets. Cause you could see that train wreck unfolding. 


 Todd
 I mean, it's like, you had four companies open up for a massively start market. Nobody understood the rules of the game. Nobody understood the regulations. They just throw money at these cannabis stocks. They went parabolic. Then people realized, oh wait a minute. There's regulations involved. And they just came right back down. So, but as I looked at the space and those funny, I grew up, cannabis is a gateway drug, right? You smoke a joint to two weeks later, you're mainline and heroin behind a dumpster at that convenience store. That's what were taught when were kids. Right. This funny thing happens when you legalize it and you get data, you actually have facts now to look at this kind of stuff. Right. What do we know now about cannabis? Well, we know when you legalize cannabis in your state, opioid deaths fall almost immediately, synthetic opioids, that's your fentanyl heroin. 


 Todd
 Those decrease almost immediately. Doctors write fewer prescriptions for things like anxiety, sleep, depression, pain, a psychosis, oh. By the way, every single poll you read the top five reasons. People will take cannabis, anxiety, sleep, pain, psychosis. It's the same reasons. Right? We know, so we know based on data that 75% of all addicts and treatment centers started with a doctor's prescription. That's a fact. So. 


 Josh
 By. 


 Todd
 Reducing 75% of all people in treatment centers started their addiction with a prescription from a doctor. 


 Josh
 Wow. 


 Todd
 By reducing the prescriptions written for the things I just mentioned, which are highly addictive prescriptions and all have awful side effects, we're saving lives. Cannabis saves lives. The data is undeniable at this point right now. I realized that, I said, oh my God, so we have this there's a new market that no one understands that everyone wants to be. Part of that they think is just a moneymaker. The reality is this s**t saves lives. Once people come to terms with that, the future for this is it's a mushroom cloud, right? It's going to be a part of life. There's a reason Pfizer's already invested billion dollars in the Canada stock. There's a reason for it. They see where the pocket's headed. They know what's going on. Once I figured that out, I was like, I have to be involved in this space, but I didn't want to invest in PR the public markets. 


 Todd
 I didn't know anybody around me who knew cannabis and no business. Right. I know plenty of people who know cannabis, but honestly I wouldn't trust them to run a business and vice versa. People who are great at business, but I had no idea about cannabis. If you don't have any idea about the plant, the regulations, how to use it, you're going to have trouble in this business. Yeah. I decided I needed to be on the private side. I want to be on the private side, starting this business because of these limited license states like Massachusetts and the rest of the Northeast, I'll say on low unfold, the SSOs, they don't, they can't start from the ground up in my state. Right? It's it takes about a year and a half to two years to open a dispensary in the state. By the time you go through the licensing process, the approvals now it's gotten shorter, which is great, but it's still about a year and a half. 


 Josh
 Yeah. 


 Todd
 Assaults, can't go to their shareholders to say, we're entering Massachusetts. We're going to have a special, but in a year and a half to two years, right? The shareholders, they don't have a timeframe more than three or four months, much less a year and a half down the road. So what do they do? They buy revenue. They wait, they look on my regulator's website. That Canada's control commission in Massachusetts. It's a public meeting. Who's coming up for find a license. Where are they located? The MSO start making their bids on them. Exactly what happened to nature's remedy Michael's first company in Western Massachusetts. People who don't know what's there. It's the second largest city in Massachusetts. It's about a 275,000 population. The surrounding area in 2019, they started to spend in Worcester, 2021. They were all almost on construction. Hadn't hired employee, no final license put about a million and a half into it truly came in a it for 13 and a half million. 


 Josh
 Wow. 


 Todd
 Minute million and a half investment. Two years later, 13 and a half million dollar accident. That's the Massachusetts market limited license, state markets are the place to invest. You got Illinois and Michigan and places like that are throwing licenses at people. The first round of license holders will make a killing rounds. Two and three are going to have a lot harder problem because the competition explodes overnight. We S I have less dispensaries in Massachusetts than they do in Michigan. I illegalized four years before him because it's a limited license state. It's a, it's a regulatory gift, right. It restricts competition. If you're able to get that license to get that store open, there are some towns that are illegal for cannabis, but only allow two dispensers in the entire town. You can imagine having a town with one or two liquor stores, you have that market to your own. 


 Todd
 The east coast, if you're looking for private placement investments, the investor, private startups in the Canada space, you have to look at the east coast. The exits on those investments are incredible compared to the west coast, but I can give you examples if you want. 


 Josh
 Wow. Cool. All right. Limited licensed state that for that means, so if I'm going to open something here in Florida, maybe an Ocala or something like that, a limited license states would say, okay, we're only giving away X amount of licenses. You know, first come first serve. You got to go through the processes. That what that means. 


 Todd
 Well, it depends on the state, right? In Massachusetts, I can only own 10% or more of three of any licenses. Three dispensaries, three cultivations up to a certain size, three extraction facilities. That's all I could own 9.9% of a hundred of them. Right. Which is part of our plan is to have our same footprint, but multiple dispatchers have different ownership structures, but I can only own three outright in Michigan or Illinois. I could own 20 California. I could own 15 if I wanted to. Right. I just got to go to that town and get that license. So it restricts. If you're an MSL coming in, you're waiting to see where the best locations are to buy that revenue versus trying to start from the ground up yourself. Right now, we just had a, not weed. I say we, I mean, Massachusetts, now, we just had a single cultivation in Massachusetts. 


 Todd
 For 55 million bucks a year, okay. A single club elevation of 55 million bucks. I look on the west coast. We look at project candidates, which close to September of last year, cultivation, extraction manufacturing for dispensaries in LA and San Francisco. There's. So for 69 million, I'm selling single. We have we selling single assets on the east coast for what entire companies are being sold for on the west coast right now. 


 Josh
 'cause you guys are, you guys have found that the limited licensed states creates an opportunity where you just have less competition that you have to fight with. So. 


 Todd
 What slows the growth, it slows the growth of the market. 


 Josh
 Interest. 


 Todd
 To grow. And. 


 Josh
 You guys are using that for your benefit. 


 Todd
 Yeah. 


 Josh
 Yeah. Awesome. 


 Todd
 Yeah. Look at, yeah, we have a, there was not, again, there was a company in Massachusetts Levia they were the first drink brand in Massachusetts. Right. They launched in February of 20, 21 and June of 2021. They had their first month, $1 million in sales. Okay. In September a Y R bought them for up to $60 million. 


 Josh
 Yeah. 


 Todd
 That's east coast, 


 Josh
 East coast. 


 Todd
 If I, if I go that to that people's choice was five dispensaries in California, including a Santa Monica store that did $30 million a year. They sold for $60 million. 


 Josh
 Yeah. 


 Todd
 I got a million dollars in revenue and about $40 million in revenue, you get the same exit price. Where do you want to put your money? 


 Josh
 East coast? That's why I live in Florida, but I live on the east coast. 


 Todd
 You guys at, when you guys legalize, you're going to have the second largest one ever. You've got every demographic trend going for Florida. I cannot wait to get enough Florida market. The hardest part about is growing cannabis and Florida. If the soil is not made for it, humanity not made for it. I've heard once you get north of Orlando, there's like this magical atmospheric, everything kind of changes. I think most of the growers in Florida are going to go to the Northern part of the market because for whatever reason, it's better for the, for growing up there, they have much more success. 


 Josh
 Todd, if were going to go backwards, you said, you're, you're moving into your fifties. How old are you? 


 Todd
 54. 


 Josh
 All right. 54 years old. If went back to, you're in high school and the teacher asks what'd, you guys want to be when you grow up and you're like, I want to be an investor in the cannabis industry. Right. They would have called you a pothead and kicked you out of school. Right? Yeah. What do you have kids. 


 Todd
 For. 


 Josh
 What's your kids think you do. 


 Todd
 They know, they know my children know, I, this is what I do. It's a great business. And it's funny. So, you know, Massachusetts legalized in 2016. Those conversations have been had for like the last six years. I've only been in the industry since 2019, so it's not that big a deal. Honestly, the stigma on it in Massachusetts in the last, I want to say year and a half has changed dramatically. When I first got into it was cannabis. You have the Westbrook right now, now you can have a Cardi with cannabis drinks there and no one bats an eyelash. Now you have people come to you and say, Hey, you got dispensary's. What do you think about this? People who were a year ago may not have, may have stopped talking to you because of cannabis or are now coming to you and kind of whispering, Hey, I need help with, I have this pain or I can sleep at night. 


 Todd
 Or my wife has riddled with anxiety. What I've heard, it helps. What can we do? The stigma is diminishing, although it's doing it at a, at a different rate in different states and dramatically. So, it's, but it's still there with some people. Honestly, I look at the data and I know I am in an industry that I can say with 100% credit, this is saving people's lives. Just keeping people off of opioids is getting people off drugs. It's saving people's lives. If you don't like that's just go screw it. It's too bad. 


 Josh
 Yeah. Yeah. It's, it's super interesting that there's been from my perception, right? There's been more pushback on cannabis than there is on alcohol, tobacco, firearms. Like there has been a resistance in the industry. Why do you think that is? 


 Todd
 It's really hard for people who have thought some way their entire life and that's our Congress is what their average age is about 65. Yeah. Right. This is a group of people who were born and raised and told this is a gateway. You have the governor of Arkansas is Arkansas. I think it was last year. Say if your kid does marijuana, he will die. 


 Josh
 Geez. 


 Todd
 That's the governor of a state. There's never been a recorded overdose of cannabis. You want to know why? Because it doesn't work on the heart and the brain like opioids too. You can't, you can't you'd have to smoke the equivalent of 5,000 joints in 10 minutes. We want, you would die of asphyxiation, not because of the candidates, because you have so much smoke. It's so bad at time. You won't be able to get oxygen. It's almost, it's almost impossible to do right by people or, it's just, you don't do it. So I don't know. I mean, when I think it's that. I think you have powerful allies still against, right? The farmers, the drug industry doesn't want cannabis legalized at a rapid pace. Right. They may be investing in it, but big pharma does not want cannabis, legal life. They are seeing sales, a certain categories falling. 


 Todd
 If your prescriptions being written for stuff, they see what's happening. They're against it too. And then it's just ignorance. It's it really is. People don't like to change their mind when they've been thought or say, Hey, what? I was wrong on this. This isn't the drug I've been campaigning on. Right. How many politicians I've campaigned on the war on drugs. Right. Now they got to do a mayor. Kulpa that's hard for a lot of them to do. 


 Josh
 Yeah. See, I grew up when Reagan was doing the hugs, not drugs, don't do drugs kinda thing. This is your brain on drugs. And they. 


 Todd
 Were like, yeah, 


 Josh
 I. 


 Todd
 Know. 


 Josh
 I do know some people who might've fried their brain by, maybe smoking too much or not. Like, I've never seen a bar fight, like, or hanging out at someone's house. If there's, smoking or using cannabis or something, people are so chill. They're relaxed. But at bars, man, flipping out the, 


 Todd
 My partner, Mike Scott says five guys, go out with a bunch of beer and get s**t faced. I might get in a fight. Those five guys go out with a bunch of weeds. They might order a pizza and start a band. That's great. 


 Josh
 Grateful, dead. That's their story. 


 Todd
 Well, what, it's funny, but going back to your statement of people, getting their brains fried, and this is why people are turning to the regulated market, right? Because we're seeing more and more examples of you take, you're buying Canada's from your corner dealer or your, whatever. You have no idea what pesticides are on that, what they use to grow that. I mean, there were people, literally sloping pesticides when they were smoking, street dealer weed for years. Now there's fentanyl being laced with some cannabis and stuff like that. If you're having a state, that's legal, buy it from a legal law legal vendor, because everything in every state is tested, they're tested for pesticides tested for other drugs, at least, you're getting a safe product. 


 Josh
 Yeah. Yeah. W we talk about, smoking a joint or something like that, like for anxiety, depression, sleep. And, you're saying that this stuff saves life, but that's not the only thing that cannabis industry touches. Right? There's so many different aspects of the business industry that, the green industry give us some insights as to things that I might not even be thinking about that the cannabis world touches. 


 Todd
 Well, if you think about it, I mean, it's, it, cannabis has gone from an agricultural business to a manufacturing and distribution business, to a logistics business, to a business. It literally touches every sector of the U S economy. One of the, one of the fastest growing areas of capture now is the feed. And the fertilizer you'll get Scottsboro grill. Their fastest growing division right now is cannabis food, right? You have old school companies, there's lighting companies. The lighting technology for the indoor grows is growing every year and maturing every year. There's new companies popping up with solutions for lighting for fee, just to sit on the cultivation side alone. Now we've got logistics you need for the delivery businesses. The whole retail model is coming up in the manufacturing and extraction space. What really interested in right now, it's about 3% of the market and Massachusetts with a scoring 450% a year. 


 Todd
 People people want the same experience with cannabis that they do with alcohol, right? With nanotechnology and the advances, the industry is making, you can have your seltzer drinks and your cannabis infused drinks, and people can drink them at the same pace and have a similar onset, similar offset experience. You have that social setting where it's normalized, where you're not, I call it a conspicuous consumption, right? No matter how unstigmatized candidates gets people, aren't going to want you smoking a joint in their backyard of barbecue, right. They're just not going to want you doing it. And that's a reasonable request. I wouldn't want someone smoking a cigarette in my backyard. I would want to smoke in a joint either in front of kids and stuff like that. Hey, take your little cannabis, infused beverage, take your edible, put your tincture and put it in your water or whatever you're doing. 


 Todd
 You have that experience, that social setting, but you don't have the obvious, the smoke and things like that. The industry has a lot of really cool things coming on the manufacturing side, a lot of innovations there it's leaps and bounds almost every day. I'm really excited to see what comes in the future from mints, the gummies to Listerine strips, to, we have, of course I can't find it. We have these little spray things of just THC. It's like a little breath mint. They're, micro-dosing, what's being done with microdosing is an amazing thing. As people who are taking very small amounts of cannabis with CBD, so you don't get the THC effects and it helps moderate people throughout the day. It's cannabis touches every aspect of any normal distribution. Some from plants in the ground to deliver to your doorstep, we want to capture that margin the whole way person. 


 Josh
 Yeah. How does this effect? So, the opportunity is massive, but I'm sure that there's a lot of corporations that, they have drug policies and testing and such like that. How's that going to impact the industry or, what do companies need to consider? Because to be honest, I would rather, if I have a, a high risk job, I was a firefighter medic for awhile before I retired and started learning about this world of, investing in business. I get my Butler up there, but, like for a job that's massively, I would rather my guys and gals, if they need to something to deal with PTSD, depression, anxiety, sleep, cause that totally messes up your cycles. I'd rather them take some CBD or THC, whatever, and be able to go back into the game fully on rather than taking prescription anxiety, medications. How are corporations and big organizations going to respond to the industry? 


 Todd
 That's a really great question because, you have your government industries where it's just a leak, right? If you work for the government and you just can't use it depending on their testing practices, you're, if you do use it, you're doing so at your own risk, fewer and fewer private companies are taking that stance, especially in states where it's legal. Okay. The issue with cannabis right now and all these rules around it is there's no test for immediate impairment with cannabis. Like I could take a breathalyzer for alcohol and you could tell me what my blood alcohol content is, right. That way am I impaired? There's nothing that for cannabis and whereas alcohol will stay on my system for an hour or two. You smoke a joint that THC will stay in your system for about 30 days. Now you're not impaired at all. There's no impairment whatsoever, but it's stored in fat cells at different times with different people before it finally shuts off the system. 


 Todd
 So, corporations are rustling with, how do I ban a substance that this person might have a prescription from a doctor for, in a state where it's legal, right? How do I ban that? When they take it tonight, before they go to sleep, if I test them tomorrow, they're going to come back positive, but they're not impaired because they took it 12 hours ago. It's just in their system. That's a real tough one for corporation. I heard Amazon has been a stock testing for it. I think Google is going to stop testing forward. As legalization spreads, I think the, the question for the corporation is how do we handle it? It's just going to be answered, right? How do we make, how do we make a medicine illegal, right. If they take their cannabis, they take the lipid for what is really the difference in those two drugs. 


 Todd
 Right? Cause I, I I'll be honest. I don't know if you take blood pressure medicine, but if you switched blood pressure medicine, you're f****d up for a few days. It screws up your head. I mean, you're on easy. You're whatever, but don't tell me if I changed my blood pressure medicine, I come in, I'm like my God, I'm dizzy or whatever. It's, it's a fine line. I think we're going to get to the point where we're already at to the point where at most airports, TSA, if they find it, we'll just put it back in your bag. Sometimes they'll take it probably for themselves, with their friends. I know lots of people will, I've had cannabis and I've watched no that TSA pulled out a thing of pre-rolls and just put it back in, if you're in a state where it's like, now you're in Texas, I don't recommend it at all. 


 Todd
 In Massachusetts, California, Vegas, those legal states, they don't even care anymore. Actually this funny story, this is a true story. I was in Logan airport about six months ago and I walked in the airport and it was like 40. I was like, Jesus, what is going on here? I asked one of the guys, I'm like, what does all the dogs? We have to train new dogs for security. I'm like, why what's wrong with the old ones? He goes, well, we can't retrain them. I'm like, I don't understand. He goes, we don't sniff for cannabis anymore. At the airport in Boston, we can't retrain the dogs, not sniff for it. They're training new dogs that don't sniff for candidates at the airport. The old dogs are going to stay. They still test it or for adoption for the awkward, some stumps. So, there's going to be a time, not too distant future where we'll be flying back and forth. 


 Todd
 Cause then it won't be this paranoia kind of thing like that. I I've the only airport I've ever been in where I just made sure I didn't even have a sniff of anything was in Dallas. If you forget something, I, they say it's illegal to fly with it, but I've watched people have stuff taken out and put right back in their back. Yeah. I'm not telling anyone to do it. I'm just telling you that this is where we're going with it. This is what's happening with it. This is my own experience walking into Logan airport and having TSA, Tommy, we're not screening for marijuana anymore. 


 Josh
 Yeah. That, yeah, this is not legal guidance. Everybody check it out. 


 Todd
 It's just a true story. It's a true story. But, but I think that's where we're going. The country's going that way and it's going that way and increasing pace. I mean, you went 91%. There's a pupil 91% while cannabis legalized in some form in the us right now, 91% of people. 


 Josh
 The taxes, talk to us about the taxes, right? Like these governments are like, nah, I'm 80 years old and I don't want no potheads in my backyard. You know? Like what is this doing for, local governments? What is this doing for local areas? 


 Todd
 People always ask me why I'm so confident that the U S won't be versus stands on cannabis and why I'm still confident cannabis. Legalization is going to keep spreading across the us. I say two things, the number one beneficiary at the right, at the current time to legalization cannabis, the U S is the IRS because of taxes. Okay. They are the number one beneficiary, monetarily of cannabis legalization in the U S so you have to assume that the government is willing to forego a significant new stream of tax revenue to make a plant illegal. It's also, like I said before, when you legalize cannabis in your state, you will get more taxes from cannabis than you will from alcohol. And here's the thing. You're alcohol taxes don't fall. They may stagnate, but you boom. That's cannabis. Hockey sticks north right now in Massachusetts. At the end of 2021, we got $71 million from cannabis taxes, 51 million from alcohol taxes. 


 Todd
 It took two years of legalization or dispensary to get all of that to happen. That's how quick it happens. Nothing makes a politician changes mine or find religion like free money, right? It's not an income tax. It's not a property tax, not a sales tax. It's a user tax on those who use it. That changes a lot of minds. The governor of Wisconsin is screaming at his legislature. I am sick and tired of watching tens of millions of dollars in tax revenue walk across our border into Illinois, 25% of Illinois cannabis purchasers come from the state of Wisconsin. 


 Josh
 How do I know which dates are, for our listeners? How do we know which states are, or aren't, cannabis friendly. 


 Todd
 I would just Google it. I mean, so you really, when I, when you say really cannabis friendly, you're talking, the adult use legal states and there's 19 of them right now. Okay. Rhode Island actually, where Alan just became the 19th. I just saw this morning. They just officially legalized. You have some medical programs, like some states like Georgia has a medical program, but it's really end of life. Right. It's you know. Yeah. If you have stage four liver cancer and you're an agony, you can smoke a joint. It's really not a medical program. Right. Texas even has a medical program, but the THC limits of Texas are so low. There's virtually no medical benefit to what they're giving you in the state of Texas. It's just basically CBD. The adult use states, those are the ones, Oregon, Washington, Colorado, Massachusetts, Illinois, Michigan. Those are the ones that are really friendly. 


 Todd
 You'll see people walking around with joints, outside people at the beach scraping or whatever the cops won't even, what even bother you. I mean, even Miami is adult use legal and you're not supposed so many, but I've watched people at south beach walk past cops, three of Barbara's smoking joints, and the cops just wave and say, hi, they don't care about it in those states anymore. It's just, if you, most police officers that you ask, they will come to you and say, arresting people for pot is a waste of my time. They didn't want to do it to begin with. They did it because it was their job. Not because they thought it had any damage whatsoever. And it was funny. I have a, a good friend actually, bill Dogon, who's one of the co-owners of our dispensary, former police officer. He said, he thinks that he has a great philosophy that, he goes, well, we used to go. 


 Todd
 And, and from these kids, and what really happened was by wrestling kids for cannabis, it forced cannabis to the drug dealers, the drug dose, oh, Hey, I got cannabis white. He goes, but Hey, you want to try $5 heroin. Yeah. His theory was by keeping it illegal, you created the atmosphere where people had to go to drug dealers. They got access to the other cheaper, more potent drugs. And to me it makes perfect sense. It took a street Sergeant to figure this out and our government with billions of dollars of research into a can't figure, that simple correlation out that's why when you legalize it, people don't want to drug dealers anymore. They bite and dispensary. 


 Josh
 Well, if you think of lobbyists and if you think of, where a lot of the government gets money from and support from, and such as, big pharma and you were saying, big pharma doesn't want this out there because society, depression and all these pills. 


 Todd
 So here's a great one point. Who's, who's running the lead in the house representative for the Senator right now for, for candidates. Chuck Schumer, right? Eat truck shows with telling us for one year now is first thing. When the Democrats take over was the legalized cannabis and get people out of jail that he has been saying that for over a year, now he's done absolutely nothing. Do you know who the person is? Senate that gets more money from big pharma than anybody else. 


 Josh
 Who's that. 


 Todd
 Chuck Schumer. Isn't that funny? How things work out in life? Sometimes. 


 Josh
 Crack. 


 Todd
 Sold us. Yeah. Democrats sold us a bill of goods on cannabis legalization. They knew it was their subject. Biden said he'll legalize it Kamala Harris, but she would Sue machete would we're two years in nothing's happened. You've heard the midterm elections now things happen. If the only chance for legalization, I think under the Biden administration is if they're getting their butts kicked so bad on the polls, come September, come October. They make a real push to try and steal those votes back. If they don't do it now, it'll be the next administration. And I don't care what anyone thinks. If it's a Republican that wins the next election, we will still see legalization because think about it. What is the largest voting demographic coming up right now? It's millennials and gen Z. What is one of their hot button topics? Canada's legalization. I don't, I don't care if you're Republican or Democrat. 


 Todd
 The person who signs that document will be a hero to that demographic for a very long time. 


 Josh
 Let's be honest, you throw off a few joints in the room. It doesn't matter if you're Republican or Democrat, you're going to get along a lot better, right? 


 Todd
 Yeah, no, I'll get along better. I don't, I never seen anybody smoking a joint and get into an argument. This doesn't happen. 


 Josh
 It doesn't happen. 


 Todd
 Whatever. Yeah. It's like, all right. You want to think that way? Go ahead. I don't care. 


 Josh
 Yeah. Awesome. Awesome. Awesome. So, Todd, let me ask you a few questions. This is off topic for a second. If I grabbed your phone and we looked through the number one played song over the past 10 years, right? Let's say you've had the same iPhone or whatever. What's the number one played song. What's one of your go-to songs. 


 Todd
 That's a great question. It would probably be something from either steely, Dan or Eric clap. 


 Josh
 Really? Yeah. A guitarist. 


 Todd
 I have not. I played drums in high school and I was never very good, but I enjoyed it. Yeah, I, I, I love relaxing and listening to 70. I love listening to music with instruments, but at that way, I don't like, I don't much like synthesize that kind of stuff. I want to hear a drummer. I want to hear a basis and a guitar player. I just think there's something really unique about songwriters who play music and stuff like that. So I get more of a connection. Yeah. I love, I've always been a huge fan of Barry Clapton, steely Dan, and all the seventies bands, almond brothers, those guys, Stevie Ray Vaughan and Jesus Christ. Yeah. How do you not get excited? Listening to him? Literally Skinner. One of the best documentaries I've ever seen off topic is the lender Skinner documentary. If, if I leave here tomorrow, it's called. 


 Todd
 If you're a Skinner fan, you have to watch it. It's unbelievable. 


 Josh
 I'm going to look that up. What's it called? 


 Todd
 If I leave here tomorrow, it goes back into when they were in muscle Shoals, how they recorded Freebird. They shopped Freebird to seven studios have turned it down. So it was too damn long. 


 Josh
 Idiots. 


 Todd
 Seven studios turned it down. Yeah. It was amazing. You just turned out one of the greatest songs in the history of man that's too long. There was a lot of them do it. Okay. It's the same thing queen book went through with. Oh, what was that song with queen Rob habian Rhapsody. 


 Josh
 Yeah. 


 Todd
 There their record labor said, no, they won't play it. They basically fired the record label did themselves. 


 Josh
 The movie Wayne's world made that song famous like that. It was a great song, but that scene in the car where there their head, 


 Todd
 Dan brought it back. Yeah. 


 Josh
 It blew it up, man. Yeah. 


 Todd
 Part of that movie in forever. 


 Josh
 You're welcome. The, the music of the seventies, I think was an amazing. 


 Todd
 Music. It's. 


 Josh
 So good. Eighties had some fun stuff, but, and nineties had some good hip hop, but seventies rock. I'm a, I'm an old guy, but seventies rock was amazing. Right? 


 Todd
 Me too. I think, I think the seventies songs, just poetry put the music. I think a lot of it today is a rhyming put the synthesizers. If you like people, I don't care. Don't email me. If you like your music. I'm not saying anything about it. I'm just saying my preference. That's a lot. Yeah. 


 Josh
 What's the last book you've either listened to or read. 


 Todd
 The last book I read was cannabis as medicine by Dr. Bonnie Goldstein, 


 Josh
 What's a golden nugget that you pulled out of there. 


 Todd
 It solidified in me. She probably has more experience than any other doctor practical, real life experience with cannabis, Rick Simpson oil, treating people with stage four cancers with Rick Simpson oil and cannabis and ultra high CBD, low THC mixtures. I'm really formulating a mixture of CBD and THC to get the maximum. She has stories, confirmed stories of people with stage four, bone cancer who are now jogging and alive 20 years after they should have been dead. It's a stunning book. She details the endocannabinoid system, which we all have, which she Israelis discovered in the seventies that basically regulates your entire body. She shows how cannabis CBD THC interact with that system and equalize it and bring it the homeostasis. I have a mother who's had an A1C, one for diabetes over seven for the last 25 years. Two years ago, I started her on a tincture, couple drops at night before bed to help her sleep. 


 Todd
 Her doctor can't figure out why for the first time in 20 years or A1C one is 6.5. My mother was like, well, we had a pen, Dennis. So I drank too much. I ate crap. I didn't exercise. And I didn't leave the house. My A1C ones should be through the roof. She's the doctor's like, I need to look into this cannabis thing. She tested her twice. She didn't believe the potential. Let me touch you again on the show. The was wrong. Came back the same again, check. I gotta look into this cannabis. Then. 


 Josh
 It's you, man. You used to get in trouble for, doing drugs. Now you're getting mom on it. 


 Todd
 You know? And it's funny. It's funny. How word of mouth starts to spread it on others? Friends of hers. I have arthritis. Can I use it for arthritis? There are lotions. You can rub on your hands that you will not get high. That will take away the pain. Yes. He thinks you can do. You don't have to smoke a joint. There are dozens of ways to use this glorious plant in ways that don't impair you, but could heal you. That's what I learned from that book. 


 Josh
 The there's so much healing power in the earth and what guy created like, oh, we're just not tapping in or we're afraid of it. Or we try to put laws around it to, agendas. 


 Todd
 But think about it logically. I mean, tomatoes go from the ground. So Keeney cucumbers go from the ground. Cannabis is the only item that grows from the ground that is illegal in its natural form. 


 Josh
 Yeah. 


 Todd
 It's the only plant that is illegal in United States. If we called it, tomato, doctors would be telling us to smoke two joints a day, we call it marijuana. So it's illegal. It rolls out on the ground. It's a plant and it's illegal. Even poppy, you could grow poppy seeds in your backyard. That's not illegal. You can make your own heroine if you want. Right. But I can't grow a weed. It's. 


 Josh
 Crazy. Crazy. 


 Todd
 Logic on every level. Yeah. 


 Josh
 I, I hope two years from now when, who knows what happens in the world. I hope when you and I are having a conversation, the legislation about this has changed their mind dramatically about, the future of this. Cause I do, I, I, I have seen it and I would love to see more people not overdosing on pain pills and anxieties and this kind of things. If they can manage it with some gum or tinctures or whatever, man. So. 


 Todd
 If people hear one single stat, 75% of all addicts and treatments that are started with a prescription from a doctor, wow. If we can find any way we can do to reduce that number, people will not die. 


 Josh
 Yeah. 


 Todd
 It's the most basic equation in the world. 


 Josh
 Let's let me ask you a few more questions. We're running out of time for people out there in the audience, dealmakers in the audience. Like, what I'd really like to learn more about the holding company about the mission, about what you guys are doing and maybe even get involved. Where can people go to connect with you? 


 Todd
 Yeah. So I'll give you my cell phone. If people want my cell phone number, it's (774) 696-1706. So, canopy and our partners, we have a lot of deal flow. We also have our own assets where we're raising equity ourselves. We're raising convertible debt that people can convert to ownership of specific assets if they want on really nice terms. We are able to, if someone wants to invest in that east coast cannabis space and they want a certain thing, we can either find a deal for them or they can invest right with us. I mean, my founder, Mike Scott, he already has $114 million exit and Massachusetts cannabis. We know what we're doing in this space. We know how to build companies and, and have exits in it. We're just looking to do it on a much bigger scale now than we did the first time. 


 Josh
 Super cool. I hit that number one more time. 


 Todd
 7 7 4 6 9 6 1 7 0 6. If you don't like tech, texting Todd Sullivan, a Cantor Punta partners.com is the email, 


 Josh
 As always people in the audience, if you're listening to a conversation that interests you, especially around the deal, if it's something that you want to get involved in or connect with our guests, their contact information will be in the show notes below as always the mission and purpose of the show is to connect deals and deal makers together to do some cool stuff. It's a, it's our passion. It's our purpose. And we love doing it. Todd's information will be in the show notes below. Let's two more questions, Todd, as during this interview, is there something that I probably should have asked like around the industry that I completely screwed up and did not ask you? 


 Todd
 I think we covered, honestly, I think we covered all the main topics. I mean, usually people want to know about legalization and they want to know about Congress, but yeah, I think, no, I think it was a great job. I had a great time. This was actually a lot of fun. 


 Josh
 It was actually a lot of fun to do, come into it, thinking this is going to be a s**t. 


 Todd
 So, sometimes podcasts are like, question, answer, question, answer, question, answer. I enjoy when it's more of a two guys at a bar having a conversation, I just think it's far better content. So it was a letter. It was a lot of fun. It was a great job. 


 Josh
 Well, you actually did a good job too. Awesome. All right. Fellow dealmakers in the audience as always reach out to our guests, say, thanks for being on the show, say, Hey, I heard you on the show and I want to talk more about, this topic of cannabis and investing in east coast exits. I think that's, I love the east coast. I love Florida and everything, every other state on the east coast. If you would like to, maybe have a conversation on the show about a deal you're working on head on over to the deal, scout.com. Fill out a quick form. Maybe you guys get on the show next till then we'll talk to you all on the next episode. See you guys. 

TODD Sullivan Profile Photo

TODD Sullivan

Co-CEO

dd is a serial entrepreneur who founded his first business in 1986 at the age of 18. Since then he has been involved in entrepreneurial businesses either as an investor, advisor or founder/employee, his entire working life. Todd currently is the owner of ValuePlays and former General Partner in Rand Strategic Partners a long/short hedge fund.
His website, ValuePlays that was launched in 2007 features his various ideas and he updates readers on their progress in a timely fashion. His commentary has been seen in the Wall St. Journal, New York Times, CNN Money, Business Week, Crain’s NY, Kiplingers and other publications. He has also appeared on Fox Business News & Fox News and CBNC. His critical analysis of Starbucks during 2008 was quoted by its Founder Howard Schultz in his book “Onward”. In 2011 he was asked to present an investment idea at Bill Ackman’s “Harbor Investment Conference”. The idea, Audiovoxx, was the top performing stock over the following year. In 2015 he presented before the same conference and has made several stock investment presentations for the Manual of Ideas “Best Ideas” Conferences
In December 2019 Todd closed his hedge fund so he could focus his energies on entrepreneurial opportunities in the cannabis space