Andy Greenberg from Society Jane , a California cannabis distributor and Deadhead is a special guest to talk about how the vaping crisis is impacting the industry and how her suppliers are responding. Larry Mishkin and Andy share Grateful Dead concert stories with Jim Marty, Produced by PodCONX https://podconx.com/guests/jim-marty https://podconx.com/guests/larry-mishkin https://podconx.com/guests/rob-hunt
Andy Greenberg from Society Jane , a California cannabis distributor and Deadhead is a special guest to talk about how the vaping crisis is impacting the industry and how her suppliers are responding. Larry Mishkin and Andy share Grateful Dead concert stories with Jim Marty,
https://podconx.com/guests/jim-marty
https://podconx.com/guests/larry-mishkin
https://podconx.com/guests/rob-hunt
Jim Marty: [00:00:35] Hello, everybody, and welcome to the Deadhead Cannabis Show, Jim Maadi here reporting from the Cannabis World Congress in Boston, Massachusetts. I've got my partner, Larry Mishkin out in Chicago.
Larry Mishkin: [00:00:49] Hey, Jim, how are you doing today? Very good.
Larry Mishkin: [00:00:53] Well, we have a lovely day in Chicago. Not all the Cannabis fun excitement that you're having, but enough other business to keep us busy. So it's all good. Jim, I'd like to introduce you and our audience to a good friend of mine who's agreed to come on the show and chat with us today for a few minutes. Your name is Andy Greenberg and he's from San Francisco and he's an owner and operator of a company called Society Jane, which I will let her talk about in a minute.
Larry Mishkin: [00:01:21] It's a very, very cool business that she and her partners have put together. And they seem to be doing very well, which is always positive to hear about marijuana related businesses. Andy and I have known each other since back into the late 1970s. We went to summer camp together up in northern Wisconsin. We went to the University of Michigan together, and we've seen more than one or two Grateful Dead shows together. So I think she probably fits in very well. Andy, nice to have you on the show.
Jim Marty: [00:01:47] Yes, Andy, welcome. Thank you, Larry. Glad to have you aboard.
Andy Greenberg: [00:01:52] Thank you, Jim. Nice to meet you.
Jim Marty: [00:01:55] And Larry was one of the day talk. Oh, thank you. Yep. Things that's top of mind has been the vapor crisis. So he wants to tell us about your business and then we'll talk about how things are moving along with vaping industries.
Andy Greenberg: [00:02:15] That sounds great. Thank you. So society, Jane, we like to call it the Good Girls Cannabis Club. It's a liveries serve. The Bay Area. And we try to buy products and sell products that women make and enjoy.
Andy Greenberg: [00:02:39] Of course, we deliver to anyone no matter what gender they are. But we stand out from the rest of the delivery services by.
Andy Greenberg: [00:02:51] Having a real high touch type business, we tend to answer a lot of questions for people. People invite us in when we come to deliver. They want to know how things work. They want to know what else they should be buying for their particular needs.
Andy Greenberg: [00:03:08] And we're happy to fill that niche. So it's just like a regular pizza delivery type delivery service where you order online and people drop it off, give you the money and leave. This is much more interactive relationship building kind of delivery service.
Jim Marty: [00:03:29] So do you solicit feedback on the products themselves and get consumer input for the products that you're delivering?
Andy Greenberg: [00:03:39] We do. We do. We tend to get a lot of feedback from customers about the products we're delivering. We've eliminated plenty of items from our inventory based on our feedback and have added additional items based on that feedback as well.
Jim Marty: [00:03:56] So if business does not manufacture or extract, you simply buy and sell.
Andy Greenberg: [00:04:04] That's correct. So we we started out before adult use regulation in California. We started we got our first license in 2015 and we were a collective, which was the legal entity at that time.
Andy Greenberg: [00:04:19] And we primarily went into people's homes, kind of like Tupperware parties and did a little Cannabis one a one presentation for the people who were gathered and then they could buy directly from us at those parties. Since adult youth regulation went into effect in January of 2018, those types of parties where you sell directly are no longer legal under the regs. So now we still do the Cannabis one or one presentations at parties and people gather there. But it's a different model where people now have to order at parties for next day delivery. So we still get a lot of feedback from people, but it's not quite as immediate as it used to be.
Larry Mishkin: [00:05:07] Andy, let me ask you a question.
Larry Mishkin: [00:05:09] In addition to what you've described, I may know from talking with you that you will also help people select the equivalent of a Tupperware party. But for people to come over and see the various types of Cannabis products that you guys are selling and you hear a little bit more about them from you.
Andy Greenberg: [00:05:30] Yes, we do, we still do a lot of that. We go to people's homes. We go to businesses. We go to social clubs. We just went to the Sisterhood kick-off meeting for a synagogue in Oakland. And it Cannabis is one of one presentation for them. And we bring products with us that people can look at and and try topical things like that. But they cannot buy directly at those events. But we still do this. The sort of Tupperware party model. Yes.
Larry Mishkin: [00:06:10] The trend is helping change people's manged to some degree on how they view marijuana and make it a little more normal and accepted in the community.
Andy Greenberg: [00:06:20] I believe that's true. I think that what we're finding is that a lot of our customer base tends to be either new users or returning consumers, people who maybe, you know, smoked a little pot in college, but they haven't really done it since then. Another in their 50s and 60s. And they're curious now that it's legal about what it can do for them. And so there's a lot of re-education that we take care of for people. And actually, that leads right into the vapes situation, because we've had to be very proactive about educating people about vapes safety on top of other things. But that's certainly on people's minds right now.
Larry Mishkin: [00:07:05] So what exactly are you saying to the customers when they are asking you questions? Well, first, I guess what kind of questions are you getting and what kind of answers you're giving?
Andy Greenberg: [00:07:18] To ask about babies specifically. Yes. Yes. OK. So those rights that we're getting our abroad, probably the same questions that people all over the country are asking, which is those pens that I bought from you a month ago. Are those safe for me to use or those pens that I bought from you five months ago? Or can I buy a new pen from you and is that safe to you? And so what we're telling people is that as you guys have already talked about on your show several times, most of the issues with illnesses that are coming from these pens are from unlicensed, unregulated black market products. And so we tell people to stay away from those products and to buy from licensed regulated dispensaries or delivery services, because we have those in California as a retailer. We can only buy products that have been tested so that every single cartridge or pre-filled vape pen that comes into inventory has been tested rigorously by state certified labs. We receive certificates of analysis for every single product that comes to our door. We have them on file so that people want to see the certificates of analysis and the safety issues that have been tested.
Andy Greenberg: [00:08:49] They have easy access to those. We can provide them upon delivery. We can e-mail them to people. Very few people actually ask to see them, but they like to know that we have them. And most people seem 100 percent reassured. Once we explain to them that the products we're getting have been tested. So that seems to me that seems to be enough for most people. That said, vape pens and cartridges have traditionally been about 20 percent of our total sales over the last several years. And we've definitely seen that number go down in the last few months. And in fact, I was just doing some online research to try to figure out what the statewide statistics were besides our 20 percent. I wanted to know if it extended beyond into the whole industry in California. And at that moment when I was getting my information, all the power went out because of the fires in Northern California. So I won't have that answer for you right now because I have no power research.
Larry Mishkin: [00:10:01] Well, that's as good a reason as early on. That's interesting. You've actually seen a drop in sales as any of these are the manufacturers of the products reached out to you as a retailer of their product to try to talk to you about this or to give you any talking points due to user passwords, your customers.
Andy Greenberg: [00:10:20] That's a great question. Yes, I would say every single manufacturer of partridges and pre-filled pens has provided us with a statement of safety that they've put out. Every one of them has. We've we've compiled them all and been able to give them to people. So when people have bought a specific product, we can give them not only our own safety statement, but that of the manufacturer whose product they now possess. So every single one of them has been very proactive about making it clear that, you know, they don't use vitamin E acetate and they don't use any fillers and they've provided additional seaways certificates of analysis to prove that. So, yeah, they have really been on top of it.
Larry Mishkin: [00:11:13] Which is good, and that's something that Jim and I have been talking about. Now let him jump in in a minute here. There was the need for the industry to really step forward and assert itself proactively so that rather than sitting around and being victim to however the press chooses to report it, they can come forward and make these kind of statements and demonstrate to people why their products are safe with the hope that a prohibitionists don't waste abusing these types of circumstances as a means to try to justify elimination of all of the positive grounds that medical and adult use have made over the past few years.
Andy Greenberg: [00:11:51] Yes. And at least in California, that's what we've seen.
Andy Greenberg: [00:11:55] We've seen the industry is being very proactive about it.
Andy Greenberg: [00:12:01] And, you know, understandably nervous about just exactly what you were saying about the prohibitionists using this as ammunition to get the whole vape industry to go away. But I don't really think that's going to happen. And I think that there's probably going to be some pretty strong lobbying. That's if an effort is made to do that.
Jim Marty: [00:12:24] Sure. Sure. You have a few questions.
Jim Marty: [00:12:31] Low THC Hemp based products as well.
Andy Greenberg: [00:12:35] So under our license, we are not allowed to sell anything but Cannabis derived products so we can't sell Hemp derived CBD as a licensed retailer in California.
Jim Marty: [00:12:51] I see. Yes, that's similar to Colorado where you can't sell hemp based products in a dispensary.
Andy Greenberg: [00:13:00] And then they have people have gotten around that by creating a second entity where they can sell hemp based products.
Jim Marty: [00:13:09] They just need authorities to do something like that. Online.
Andy Greenberg: [00:13:13] There are a couple of delivery services I know that have created a second Web site where people can order Hemp derived CBD products separate from their other Cannabis drives product web site.
Jim Marty: [00:13:27] I see. I see. And it seems like there's the spike we had in people getting set and lung infections and the unfortunate case where people have passed away that seems to have ebbed over the last month or so. Do you agree?
Andy Greenberg: [00:13:44] That's what I've read. I mean, from everything I've seen, it seems to have end.
Andy Greenberg: [00:13:48] And in California, I believe it has as well.
Andy Greenberg: [00:13:53] But I think there's still a lot of testing going on. I know that the state agencies in California are currently testing how the hardware, even in legal and licensed vape pens, how the hardware interacts with the oil, even though the oil's been tested. Now they're checking how it interacts with hardware to make sure that that's not leaching heavy metals into people. So we're still waiting for the results of those tests. I think. But to your point. In the meantime, I think that the illnesses and certainly the deaths have gone down.
Larry Mishkin: [00:14:38] That is always good to hear as well. And it's.
Andy Greenberg: [00:14:43] I think that the primary thing that's going on is that people need to be educated about not going into unlicensed and regulated dispensaries and using delivery services that don't have licenses and buying cheaper products through those entities, because that's really how people are getting sick. And there was an article that just came out yesterday that some reporters from Leavesley did where they went and bought illegal disposable vape cartridges from unlicensed stores in Los Angeles and had them tested by a licensed testing lab. And the results were kind of amazing, like some oils tested had over 5000 times the legal limit of pesticides in them.
Andy Greenberg: [00:15:26] So I think that message needs to be screamed from the rooftops that people are very careful about where they buy their products. So what do you guys do with your poison? That is something that we do with our clients. We warn them a lot.
Jim Marty: [00:15:46] I see. Yes. And give you an update. Massachusetts, where I am right now, did a kind of a knee jerk reaction has been all day products, including tobacco based ones and some of the unintended consequences.
Jim Marty: [00:16:02] It's really, you know, for the marijuana people, they can always switch to another Cannabis based product, be it flower or edible cigarette. People who are using vape pants to get off the cigarettes or as a replacement for cigarettes, they're freaking out. And across the border, from Massachusetts to New Hampshire, they cannot keep their nicotine based inhalers on the shelf. People coming up from Massachusetts and buying them by the dozen. So that's what's going on here. Hopefully this ban will be lifted soon. But as of right now, I believe it's a six month moratorium on all e-cigarette product sales.
Andy Greenberg: [00:16:42] While this the is stuck in Massachusetts, the only state doing that. I thought there were others that were banning everything as well.
Jim Marty: [00:16:51] Well, we are some clients up in Oregon who are very happy that they did not institute a ban there. They did put a ban on the flavored varieties, the fruit flavored nicotine and THC products. But Oregon still has it. Colorado has not done anything as of yet. I think most states are taking a wait and see approach because it has been very effective as far as getting people off cigarettes, whether they're using a THC based product or a nicotine based product. It really is one of the things that essentially works for those people who really want to quit smoking cigarettes.
Larry Mishkin: [00:17:31] Interesting. I'm Andy, just switching subjects for a minute. But as long as we have a an actual owner of a marijuana business with us, one of the things that Jim and I were just talking about in our last episode is what seems to be the IRS history and expanding the scope of 280 E, but it's somebody who's engaged in the retail sale of of of marijuana. You probably have a little bit of experience with two. Have you got.
Andy Greenberg: [00:18:02] Oh, yes. We've had a lot of experiences to 280e. Are you are you talking about them expanding the breadth of 280 or shrinking it down? Expanded, expanding? Yes. That'll be a problem. But I mean, already we have an invitation to things that we can deduct.
Larry Mishkin: [00:18:25] Right. And so that's like a whole brand new business model for people who want to run your type of businesses.
Andy Greenberg: [00:18:35] Yeah, it's a whole new business model. You know, we our accountants are wonderful and we work with them all the time to try to figure out how to stay within the confines of 280. But still try to deduct some normal business expenses. And it's not easy.
Jim Marty: [00:18:56] No, it's not. I attended a seminar today by a pretty well known attorney, Nick Richards, formerly with the IRS. And he did a pretty deep dive into the alternative health case that came out a few months ago, basically saying that if you have you know, just by moving some Tudi expenses over to another entity, it's not going to make them deductible.
Jim Marty: [00:19:22] And the results have been pretty devastating because the what ended up happening in that case was the deductions were disallowed at the entity level. Cannabis touching the plan, but also their management company. They basically said it's the same company and therefore the management company is touching the plans as well.
Jim Marty: [00:19:41] So the take away from that is beware of management companies in your corporate structure. The IRS is going to look at what that person does and not who pays them. Who pays them is not relevant. That person is dispensing Cannabis. They're in a dispensary. Setting their salary is not going to be allowed to eat to be deductible.
Jim Marty: [00:20:04] So that's another case to be wary here for Cannabis business, given you and I talked about that case a little bit on our last show.
Larry Mishkin: [00:20:14] Right. And now that you're talking about it again, this time, I'm better clued in, because what you're really saying is in that instance, it wasn't just that the management company was ancillary to the marijuana businesses, that they were actually taking a position that could be viewed as operating the marijuana business, which is kind of the distinguishing factor you mentioned last time. It shields professionals like attorneys for accounts.
Jim Marty: [00:20:40] Yes. Yeah. I mean, the takeaway is there might be many good uses for a management company to be associated with. A Cannabis touched the plant companies, but avoiding Tudi is not one of them.
Larry Mishkin: [00:20:56] Very good. Yeah. Well, with the training have had a good way to avoid absolutely any.
Larry Mishkin: [00:21:04] I think it's something you have to deal with and people like to come here to feel.
Jim Marty: [00:21:08] So, yes, you know, one of the takeaways I don't want to get too technical on the show, but many of us who advise on corporate structure in the states are now pretty big fans of C corporations because the owner is not personally liable for the taxes, that there's an order that doesn't affect the personal tax returns of the owners and the corporate tax rate is now 21 percent. So especially if you're on the retail side, cultivators are not as affected by two eighty as our retailers.
Jim Marty: [00:21:43] So if you have a retail business, you know, get a good CPA and get a good lawyer.
Jim Marty: [00:21:48] Talk to the Hoban law. firm here and Barry or myself over at Bridge West.
Jim Marty: [00:21:52] I would be glad to talk to you about some of the benefits of being a C Corp, especially into the new 21 percent tax rate.
Andy Greenberg: [00:22:04] That makes sense, actually, after the don't use regulations went into place in 2018. We saw a big rush of retailers who had previously been working as not for profit, switching to see corpse, probably just for that reason.
Jim Marty: [00:22:24] Yes. Yeah. There's a lot of good reasons to be using corporate. Among the many are that if your business fails, you don't have to pay your your income tax bill for that C-Corp one. And if a pass through entity like that partnership fails, the taxes, stick to you personally.
Larry Mishkin: [00:22:48] And Jim, how does all of that balance off against the double taxation that A C Corp faces?
Jim Marty: [00:22:57] Well, the secret the double taxation really kicks in upon the sale of the business. But there are some holding periods that if you hold the business for four or five years, you can actually eliminate some of those corporate taxes or all of those corporate taxes upon to sell the business. So some of the new taxes that was passed last year really has made the sequence significantly more advantageous.
Jim Marty: [00:23:25] It'll then pass through entity. Let's say. Enough, enough of this dry, boring accounting stuff. Stop some Grateful Dead.
Dan Humiston: [00:23:37] I want to take a quick break. Thank you for listening to today's show. As the leading Cannabis podcast network, we're constantly adding new Cannabis podcast to support our industry's growth. And that's why we're so excited to announce our newest podcast, The Cannabis Breakout. The show's about the thousands of Americans who remain in prison for violating Cannabis laws that have long since been overturned. The Cannabis breakout gives Cannabis political prisoners a voice. If you're a former Cannabis prisoner or have a loved one who is a Cannabis prisoner, we want to share your story. Please go to MJBulls.com and sign up to be a guest.
Andy Greenberg: [00:24:20] Well.
Larry Mishkin: [00:24:21] I can I can read this off by saying that, you know, Andy started seeing the debt right around the same time I did. And in fact, I'll let you talk about the name Dena.. Tell us about some of your favorite shows that you've been to.
[00:24:37] Larry, were you at the St. Paul show? That might have been my first one in 1981.
Larry Mishkin: [00:24:45] I was. I thought it was 1983, though.
Andy Greenberg: [00:24:48] Oh, you're right. It was 1983.
Larry Mishkin: [00:24:51] It was 1980. And then we all went down to Chicago. And what's up with three shows?
Andy Greenberg: [00:24:56] Poplar Creek. Yes, we did. That was fun. That was fun. I was this was a hard thing for me to think about because I had so many favorites. I have to say, my very first Greek run in 1984. I have to lump it all together as my favorite weekend instead of picking one favorite show. Although the Sunday show of that 1984 Greek run was pretty amazing. They opened the show with Why Don't We Do It in the road into Birdsong? And then later on, one of my favorite Uncle John band ever. And it was my first time at the Greek. And on Friday, I think they also played my very first dark star, which was great. So I know I can remember if you were at that run or the 1985 Greek, I was there in 1985 for the 20th anniversary shows. Yeah. And that was pretty amazing to would reach those two big fan.
Jim Marty: [00:25:59] It's great to see Greek theater. You know, I never saw the Greeks saw a bunch of red rock shows. We're all the same era, mostly a couple of years old. My first show was January of 79. One of my favorite stories to tell is that I was lucky enough to see one of the very last. Keith and Donna shows its Springfield Civic Center January of 79. And five months later they played us spring tour of spring concerts at universities. So they played in our UMass football stadium in May of 79, May 12th of 79. And that was one of the first bred middlin shows.
Jim Marty: [00:26:41] So I caught that transition and again, got to see Keith and Donna before they left the band.
Jim Marty: [00:26:48] And then one of the first Briton, Brett Medlin, shows the rest of that story as my girlfriend at the time had bought me that ticket for Christmas of 78.
Jim Marty: [00:26:59] The show was a month later in January of 79. And that girl has been my wife of almost 40 years.
Andy Greenberg: [00:27:09] Well, that's such a good little story.
Larry Mishkin: [00:27:13] Absolutely. Why? Well, there's lots of good stories. Overtime a week. We love sit around screening, reading stories about him on the show. So it's always nice. And we can bring somebody else in to give us another perspective on it all. But like I say, and you know, so many shows together, too, and a very good time in was at eighty. Greek theater. Runnoe believes that after the third night we will enjoyed some treats from our good friend from Arizona who later ran into a little bit of trouble. As I recall, we were all partying at some house in Berkeley and I realized I had to get myself out to San Francisco Airport for my redeye flight home, and Andy was kind enough to drive me across the bridge back to San Francisco, where we were staying, to pick up my stuff and then get me out to the airport. And I did actually make the redeye flight home and pursue a personal week on the plane the whole way home. Obviously, we're having a good time, but let's kind of find moments that we'd like to reflect on.
Andy Greenberg: [00:28:11] I remember that drive across the Bay Bridge to get to the airport on time. That really did answer. We did. We're here. I already remember that lyric. So, Larry, it was really hard out and somebody had brought bagels, cream cheese and lox and Proffy. It was either you and our friend Jack who is using the lox, the wrapped up lox as a cold compress can beat the heat. Right. Well, that's you know, you have to do it.
Jim Marty: [00:28:40] That's funny. That's funny then.
Larry Mishkin: [00:28:44] And he's married to another very good friend of mine and Alex. Well, and she's also a big deadhead. And maybe we'll have him on the show some time to share some of his stories. He's quite the music aficionado and has lots of good stories to share. And Jim, you'll be happy to know that like your kids and my kids and these kids have also cross that bridge with them, have gone to shows. And in fact, her son Max is quite the musician in Boulder where he regularly performs with his saxophone at the Fox Theater.
Andy Greenberg: [00:29:15] Thanks for mental well-meant, but how old how old is Max?
Andy Greenberg: [00:29:20] Max, he's 21. He's a senior at Chez Boulder and he play has played jazz saxophone since junior high. And one of his friends is a deejay.
Andy Greenberg: [00:29:35] So they do these shows where the deejay spins and Max plays live saxophone along with whatever the deejay is spinning.
Jim Marty: [00:29:45] Oh, that's great. Our younger son Jack is also 21 and a senior at C.U. Boulder. Makes me wonder if their paths may have crossed because Jack plays keyboards in a fish tribute band called Kings of Prussia.
Andy Greenberg: [00:30:03] All right, I'm going to X, man X. Ask Max if he has seen them. I bet he has.
Jim Marty: [00:30:10] They might. They have a standing Thursday night gig in Denver at a place called B on Keet.
Andy Greenberg: [00:30:18] B on P.. I'll tell him. I wonder if they know each other. They probably do. Maybe they do. Maybe they do. So the police are out in Boulder visiting your son.
Jim Marty: [00:30:31] Please look me up and we'll we'll get together.
Jim Marty: [00:30:34] As Larry knows, they have a nice place in the country with a very nice barn, which we enjoy, a very wonderful place to spend an afternoon.
Andy Greenberg: [00:30:43] Great. I will take you up on that. I would love to see the barn and meet you in person.
Jim Marty: [00:30:51] Excellent, excellent. Well, I think we're coming towards the end of our time, Larry. I am going to be getting on a plane here shortly to head back to Colorado. So I am going to let you close the show.
Larry Mishkin: [00:31:06] I appreciate it. Safe travels to you, Jim, and we'll talk to you next time. Special thanks to Andy Greenberg for were going to be on our show today and sharing all of her good information with us. Society, Jane, is the name of her company. And anybody who's out that way, please consider looking her up and doing some business with her company. I'm sure you will be very pleased. Andy, thanks for joining us.
Andy Greenberg: [00:31:31] Thank you, Larry. And thank you, Jim, for having me.
Larry Mishkin: [00:31:34] This has been fun. OK. Well, until next time signing off. Seems like you guys next week.
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