The Phish three day concert in Denver is being impacted by prairie dogs. The grounds for the annual festival are normally open for camping. Unfortunately, officials are prohibiting camping this year because they are concerned about spreading a plague that is carried by prairie dogs. Jim Marty and Larry Mishkin talk about the Missouri license deadline and what potential licensees should do while they wait. Produced by PodCONX https://podconx.com/guests/larry-mishkin https://podconx.com/guests/jim-marty https://podconx.com/guests/rob-hunt
The Phish three day concert in Denver is being impacted by prairie dogs. The grounds for the annual festival are normally open for camping. Unfortunately, officials are prohibiting camping this year because they are concerned about spreading a plague that is carried by prairie dogs. Jim Marty and Larry Mishkin talk about the Missouri license deadline and what potential licensees should do while they wait.
https://podconx.com/guests/larry-mishkin
https://podconx.com/guests/jim-marty
https://podconx.com/guests/rob-hunt
Jim Marty: [00:00:35] Hello, everybody, and welcome to the new episode of the Deadhead Cannabis Show. I'm here with my partner Larry Mishkin. How are you doing, Larry?
Larry Mishkin: [00:00:45] Jim I'm doing great. Glad to be here. Hope you're doing well.
Jim Marty: [00:00:48] Well, we have lots to talk about. It's the end of August. And we have our three Phish shows coming up at Dick's Sporting Arena Soccer Stadium outside of Denver. And unfortunately, though, we've had a bit of a setback where they canceled all the camping because what's going on with that?
Larry Mishkin: [00:01:11] That's that's a big thing for you guys every year. I know you and your boys go out there. I hear you're driving. And I'm Friday's drive out Sunday night.
Jim Marty: [00:01:20] Yeah, actually, we go in on Friday and then leave Monday morning. So we're there for the whole day after Labor Day weekend. And, you know, Fish does such a great job. They have free showers. They have these like semi trailers that are set up as showers. One for the men and one for the women. Fish provides free pancakes on Sunday morning. So it's a great deal. Lots of porta potties for everyone to use. And the trucks are just constantly going back and forth, emptying the porta potties, keeping them clean. So it's a great fun time. But the apparently and I don't know why it's an issue this year, because it's been an issue forever in Colorado that the fleas that the prairie dogs carry the fleas carry the bubonic plague.
Jim Marty: [00:02:10] So there's been a controversy for as long as I've lived in Colorado, which goes back to 1982, that whether or not to exterminate the prairie dogs or relocate them or leave them alone. And very controversial because they are cute, but they do carry the plague of the fleas on their back. So, again, this has been ongoing for decades here in Colorado. So I don't really understand why this year they made it an issue and enough of an issue to cancel the camping part of this.
Jim Marty: [00:02:46] And it does put a lot of people out of work. There's food vending. There's a general store, you know. You said the guys who cleaned the porta potties, the people who park your cars, the security in the campground. And for me personally, I've got to figure out how to get my hundred and twenty five dollars back from my RV pass so fast. Police were helping the shows and we'll be at all three shows. And I guess we'll just have a designated driver drive us down from my house, which is about an hour from the sporting arena. This might be a good time. I don't know if I've talked about in the past, but the whole reason that we have Dick's soccer complex dates back to 1995 when we and me voted for our new airport. Anybody who's been to Denver knows we have a beautiful brand new airport. It's 20 years old now. It has the white Teflon roof that's made to look like the Rocky Mountains. So when that got voted in in 1995, we moved the airport seven, 17 miles east of Denver, Denver, the city and county of Denver, where one of the only metropolitan areas, United States, that had a large swath of land, now empty land within their city limits. And so we had enough room to build a soccer arena.
Jim Marty: [00:04:12] There's also the Stapleton neighborhood, which is condos and houses and supermarkets and residential. That was all built with the old airport was. And then the soccer arena holds about 30000 people. So it's a great size for fish because fish is too big for Red Rocks or Red Rocks only holds ninety five hundred people. So it's the perfect size for fish, but it still feels very intimate. Fish does not do big screen, the big video. It's just basically a basic concert. But it's intimate enough that you can see the stage without big screen video. And then surrounding the soccer arena are dozens and dozens of football fields and soccer fields. So any given weekend, you'll have thousands of school age kids playing soccer around the stadium. And that's that's where they let people pitch their tents for the camping at the fish concerts. So I like to joke to the young people when I'm at the shows with them that, you know, what they're standing on used to be a runway at the old airport. So that's the story of Dicks and Navy. Time after the shows and I do still want to do a show, Deadhead Cannabis show the weekend of the Fish shows. So maybe when we do that I'll have more information on what exactly caused them to cancel the camping this year.
Larry Mishkin: [00:05:38] Well, Jim, I have to tell you, it was really interesting because I just saw. Why was that? I guess, you know, the last weekend or something, maybe the beginning of this week, one day and the news happened. Just something about prairie dogs in Colorado dealt with bubonic plague. And when it did, they did make it sound like, you know, it was a big deal or that anybody should be alarmed. Just stay away from the prairie dogs. And then within a day, I started seeing all of these posts and hearing about the camping being canceled out there. And, you know, that's that's that's a tough blow for fish fans, you know, coming on the heels of the big fiasco they had with Curveball a couple of years ago, which was supposed to take place up in Watkins Glen, I believe. And literally, as the fans were showing up the day of the show, they were being told that the entire weekend was being canceled because the heavy rains had flooded the water supply and they couldn't provide clean water. So everyone who aggregated watches went for the big fish annual ad, which was called Curveball, that Europe had to go home. But now they're not listing out canceling shows, which is the good news. But again, it's unfortunate that, you know, that folks can't stay. But I guess they just decided they'd rather be safe than sorry.
Jim Marty: [00:07:00] Yes. We don't have to worry about that. Yes. Curveball, that was last year and it was right before the dick shows here in Colorado. So I actually have a curveball poster hanging up in my barn and we do some video from my barn. I'll I'll put it up on the website. A picture of the Curveball poster I bought last year at Dick's because I knew that all the vendors and the people who made up posters and shirts and all that really got hung out to dry because they had all their vending materials and things that wanted to sell those and weren't going to be able to sell. So knows that fish. Last year a guy came by selling posters from Curveball. And so I volunteered to help them out. So I actually have a curveball picture. And speaking of concerts getting canceled. What do you think down was behind the Woodstock fiftieth anniversary falling apart?
Larry Mishkin: [00:08:00] Wow, you know, that's that's a great question. And the short answer is, you know, I don't know that we'll ever really know. I think that what happened was, as near as I can tell, there was just enough uncertainty that some of the big Dena. performers, Casey and others, decided that they were not going to commit to those dates because it didn't it was too uncertain as to whether it was going to happen. And it kind of created a domino effect. They had trouble getting their permits, you know, from from the town, from battle up there where they wanted to do the show and they tried to move, which Merriweather Post and make it a free event that did all kind of fall apart on. And you know, you have to fight so that you're right, the first bite is way back then there was a miracle that it came together. But today with this, it's the same guy who knew what he was meant to, right. You would have thought that there would have been like a year and a half if they don't, was it just 50? Their anniversary is going to be there, but they didn't pull the trigger. And then again, I think, you know, we've said this before, but it really just demonstrates what a miracle the first one was and how amazing it was. The tip pulled it off. And I got to tell you, props to. But what's it called the. Station aren't serious acts out the deep tracks all of last week. They dedicated 100 percent of their programming to playing Woodstock. Well, you know what? They've come up with all of the tapes of all of the performances that radio was putting out at 38.
Larry Mishkin: [00:09:38] Just box set for like a thousand dollars or something. So it jumped out of my price range. But it has every complete Woodstock from beginning to every tune by every performer. And they played in two tracks last week. And, you know, it was great to hear all the stuff that we already had heard and hear it again. It was great to hear the tunes by bands like, you know, The Who and the Jimi Hendrix said and the band did the dad and others, you know, to hear songs that they performed there. Other than the ones we've already heard that they got down to the people that, you know, some of us made out, if you can remember, were there like Melody and Quill and then the Keith Hartley Band did I know DA. And they're played all of this stuff. And I'll tell ya, that was just tremendous to hear it all and just drives the point home. What an amazing three days those were, you know, that they couldn't do. The rain wasn't enough to get it the way they just did. There was too much going on with David. You know, a lot of these performers are 20 say, oh, we didn't like our performance. The dead have always downplayed their performance at Woodstock. But you know what? It is what it is. And it's part of our history and the fabric of it. I haven't heard of a single person who was at Woodstock. It's that they wish they weren't there.
Jim Marty: [00:11:02] Yeah, well, very good.
Jim Marty: [00:11:04] Well, we should probably talk a little bit about Cannabis as we transition in just for next weekend's three Phish shows in Colorado. We're anticipating beautiful end of the summer weather might be occasional thunderstorm, but no, nothing like upstate New York yet. So we should have good weather, low 90s during the day, 70s in the evening. So we're really looking forward to our end of the summer Phish shows next year. You know, they say about the western United States that September is hotter than June. And I think that's true in the Denver area. So. So we have to talk about for Cannabis.
Larry Mishkin: [00:11:45] We'll have a we'll be. We'll be looking for your reviews of those shows, unfortunately. I cannot go my side, who is a huge fish fan and actually hear this jazz group got turned away per ball. One of the members of their party is getting married over Labor Day weekend here in Chicago. And my wife and I were privileged enough to be invited as well. So we'll be attending without affair and unfortunately, we'll be missing guests. But soul mate, late son and oldest friend. So I'll be very anxious to hear what you have to say. Cannabis. While the Missouri applications are rare and I know because it got crazy down there so crazy that on Friday they sent out an announcement that they were extending the filing deadline to Monday afternoon because they just got too much action on the state computer system all at once. But everything is in. The folks that I represented got their applications in and now everyone's playing the big wait and see game. It's not just wait and see right here. I mean, you don't have your license yet. You don't know that you've won. But from your experience working with groups, what what should people who are applicants be looking to do during this period? Where are the stages scoring the applications?
Jim Marty: [00:13:02] Right. There are CPA firm bridge last also help with several Missouri applications. And you didn't have to post a bond and you didn't have to show that you actually have the cash on hand at the time you submitted your application. So in this window, and it seems, Larry, is at 120 days or 150 days that the state has to notify the people that have been selected to get licenses.
Larry Mishkin: [00:13:30] You know, that's a good question. Jim, I believe it's 150 days. But I also know that they've been contemplating possible amendments to that, depending on the number of applications that actually come in.
Jim Marty: [00:13:41] Yeah. So that'll put us at late October, early November. Now is the time for the Missouri applicants to raise their capital, get what they need. Missouri is an interesting place because it's definitely a lot less expensive to do business there than, say, New York or Massachusetts or California. Sure. So our applicants bought raw land. We're looking at price spending six million dollars for a cultivation facility that would cost 10 million dollars in Massachusetts. But now is the time to get your capital in alignment. So it's ready to be deployed as soon as you know. And there's things that you can be doing now, whether or not you get a Cannabis cultivation license and that she can be doing your demolition work if it needs to be done. Preparing the site. Getting that already. And then as soon as the you know, getting your building permits lined up so that as soon as you find out if you're one of the lucky people to get a license in Missouri, you can begin construction. Now, we're budgeting three months for construction and then three months of first harvest sells. The licenses come out at the end of October. We're looking at the first Missouri medical marijuana being sold probably in the round June of 2020.
Larry Mishkin: [00:15:06] Yep, that makes sense from a timing perspective. I agree. Let's from here. You know, it's interesting what you're saying and I agree with everything you're saying. However, I have a couple of clients, you know, who are doing it a little bit differently in that one group is looking to lease the facility. And the other group is looking to purchase a facility. But both of them are working with continuances that allows them that only force them to go forward with their yields if, in fact, they get their licenses right. If they don't get their licenses, they can exercise a contingency and step out. They have to pay for that contingency, of course, right now. On the other hand, though, based on what you're saying, they get that that prevents them from actually being able to start joint work until they find out if they get their license. So they've got to move really quickly at that point.
Jim Marty: [00:16:00] Right. Right. And just the particular bias that my groups have that I consult with is we prefer new construction. We went out to Missouri and we looked at some places that had had businesses in there at earlier times. Same in Massachusetts. And you have to remember that medical marijuana. It is in agricultural products in one hand. It's also a pharmaceutical product. And the testing standards are going to be very strict in most of the states. So we have a bias towards new construction demo, the old building and build a brand new building from scratch, specifically designed to cultivate Cannabis, you know, using a building that maybe was used to make concrete or something like that. You don't want to find find out that first harvest that you're not going to be able to test. Positively. And then you end up spending all that money renovating an old building. So that's just a bias. We have other people have different opinions and I respect that. But we like brand new buildings with brand new building in air conditioning.
Larry Mishkin: [00:17:16] I like that idea, certainly. I suppose for some people it just simply becomes a matter of economics. Right, to that. That's not an inexpensive way to go about doing it. On the other hand, I certainly like what you're saying in the sense that if you're going to take the time to grow and harvest it, then that's very appropriate to call it a pharmaceutical product. It doesn't make sense to people to create your own environment from the ground up and not have to worry about what might be buried underneath or what might be emanating through the concrete or the wood floors or whatever you have that was left behind by who knows how many previous business owners writing the heating and air conditioning ducts.
Jim Marty: [00:17:57] They tell people you might want to take a swab and get that tested.
Larry Mishkin: [00:18:03] Right. I like that idea, too, and actually see for me a lot of what you're saying makes sense. It really makes sense for many of these people, right. Whether whether you've taken control of the building or your your your you have a contingency. You need to be inside. You need to know your premises. You need to be familiar with it. So that on the day when you get your license awarded, that's not the day you first start thinking about it. That's the day you jump into action to move it forward. I agree that you need to take advantage of that time to have your money lined up and ready to go. It does have to be right. If you don't have the money in the bank, it's possible or the day you get your license, you're losing time. And every day that you lose after you get your license has a value to it in terms of other people getting started before you. And just generally having to know with the states going around, checking out everybody if you're not ready, it's all other people. After other people, you're going to have to wait your turn.
Jim Marty: [00:19:03] Sure. So. Well, that's what's going on in Missouri. So, yeah, we successfully submitted several applications with the help of some very excellent attorneys in Missouri. So I look forward to finding out as well as our efforts were successful. Illinois is moving forward with full adult use January 1st. Larry, you're up there in Chicago. You got your ear to the ground. What's going on in Chicago land?
Larry Mishkin: [00:19:36] Well, I'll be happy to tell you. Just really quickly, Visa v. Missouri, though. While I was busy representing my groups, we also had a pewter injury. Only one of my partners of the Hoban law. Group based in Kansas City, who I believe was representing another five groups as well. Very, very excited about the opportunity to work with the people in Missouri. And now, Jim, you're absolutely right. We're starting to shift our focus to Illinois. We hope that attorneys that I'm reaching out to to provide assistance because this is going to be a busy period of time. There are lots of folks who want to get in on this action for a long favored holiday was a state that nobody wanted a part of because the medical program really was not operating in an efficient manner. Nobody was making any money at all on the cultivation or the dispensary level. Now that they're going to adult use, it's becoming one of the hottest ticket in town. Illinois has a population roughly doubled the size of Colorado. The city of Chicago alone and surrounding Cook County suburbs and disparities. Huge numbers of people are very, very liberal for the most part. Not entirely. We have our package. But even in those pockets, I believe this is going to be a success. Although certain municipalities are opting out and quite frankly, I'm surprised by both the municipalities that have made that decision and the basis for those decisions. And maybe they will make daddy programs for another day to talk about, because that really is something worth talking about. What drives huge disparities to choose to opt out of something such as potentially profitable as adult use marijuana.
Jim Marty: [00:21:24] Yes, it would seem like they're going against their voters will, since these programs are voted in by pretty strong majorities, on the other hand. You know, we're not going to push ourselves on communities that don't want medical marijuana or adult use Cannabis. Now, Larry, aren't they allowing the cultivators to ramp up prior to January 1st so there'll be enough product when they get full adult use?
Larry Mishkin: [00:21:52] Well, here's the thing, and this is the important part to remember about Illinois. They are not going to be any more large scale cultivation licenses awarded into the near future. The 40 at the 40 cultivation licenses that will be made available by May of next year are going to be what they call craft licenses. You'll start off with 5000 square feet. And pursuant to a formula yet to be determined three different times, you can apply for increases of up to 3000 square feet at a shot. If you get everything, if you're lined up with 14000 square feet, which isn't bad. But the medical cultivators will also be now growing for the adult use program as well as each successfully argued to the state. They have more than enough extra canopy space that they have. A lot of these guys are sitting on 75000 square feet or more. But they've only been growing like ten or fifteen thousand square feet at the most. And now they see an opportunity to use the rest of all of their space. So between now and then, many of them, they've already started to go ahead and ramp up, do that.
Larry Mishkin: [00:23:12] The other extend that the current medical people get to do and that they're in the process of doing right now does apply for a door license that will allow them to operate their medical dispensary as a dual medical adult dispensary. And then they get a second license for one additional adult used to Stansbury for every medical dispensary they house.
Larry Mishkin: [00:23:37] We've got 55 medical dispensaries. If everybody max out Maxes is out on January 1, we'll have a hundred ten will still have the same 21 growth centers. But presumably they are going to ramp up and they're in the process of doing so right now to make sure that they can address that demand. Whether it'll be sufficient. I guess we'll have to wait till then to fade out.
Jim Marty: [00:23:59] Yeah, I'm getting very strong demand because of your population. I believe Illinois is around 10 million people.
Larry Mishkin: [00:24:08] Yep, just slightly higher dirt. But yes, you're right, and it's a gate as a liberal community really likes its arts. Why is music about those types of things in clubs and whatever its agenda? This is a very natural part of the scene, albeit still underground, but hopefully not for long.
Jim Marty: [00:24:29] Very good. And then as we come to the end of the timeslot here, we'll briefly touch on another state that came on board just this month of August 2019. Louisiana open there. 9. They don't call dispensaries in Louisiana column pharmacies and they have to. The medicine has to be dispensed by a pharmacist. And the only product on the shelves right now is Texas. The medical program in Louisiana does not allow for combustible flour. So next week we have an associate in Louisiana. Peter Primo, CPA, with Bridge West. He's very active politically in the state legislature in shepherding this program through to fruition. And so we'll see if we can't get him to come on and be a guest for us on the next show so that we can talk about what's happening in Louisiana. But one of the surprises in the first few weeks of medical marijuana in Louisiana is they already have 5000 patients, which is more than anyone expected in the first couple of weeks. So lots of things happening around the country. And Larry and I are happy to share our knowledge. We travel quite a bit. We have clients all over the country in this seat, in this area. And we're very glad to share it with everyone.
Larry Mishkin: [00:26:00] One other thing I like to think about keeping up for next week as well, Jim. I in Illinois and I would imagine in other states as well. There's a lot of wheeling and dealing going on, mergers, acquisitions in Illinois. The big talk over the past couple of weeks was a big deal whereby greenhouse and I'll think of it in a minute. They just sold their dispensaries and their cultivation centers in Illinois and in other parts of the country for a reported eight hundred seventy five billion dollars. Add that all in cash. But people don't necessarily understand that, you know, from a guy who, you know, deals are the taxing activities and probably has much more familiarity with something like that than I do. I'd be interested in hearing. I'm not saying you give your advice to the school or you know anything about it, which is generally what these types of deals go down. How does somebody structure something like that so that they could say there's eight hundred seventy five billion dollars?
Jim Marty: [00:27:02] Well, the valuations have been all over the board, and I believe what you're going to see in the next three to six months is extremely large write downs of goodwill on publicly traded Cannabis companies, most of them on the Canadian Stock Exchange. So you can have these high valuations at the time the deal is consummated. It doesn't mean that the valuations hold up over time. If the company is reporting operating losses and then use it, the seller gets some cash. But there's not that many publicly traded Cannabis companies that have a billion dollars hanging around. So they get stock in some combination of stock of the publicly traded company and cash in exchange for their license. And that's called restricted stock. So if you're a owner, as a general rule, you cannot sell your stock for a year. So you might have a high valuation at the time of the transaction and get a whole bunch of restricted stock a year later when that restriction is lifted and you can sell your stock. It could be worth a whole lot less. So, you know, valuation in this industry really depends on I think one of the biggest factors is do you have restricted licenses or limited licenses or unlimited licenses? So states like Colorado, Washington and Illinois all have unlimited licenses. You can still get a license in Colorado to cultivate, even though we have over a thousand active licenses and some overproduction are prices in Colorado have stabilized. They hit a low of about eight hundred dollars a pound. Were back up over a thousand now. Fifteen hundred for top shelf. So that is the big factor. So, yes, there still was Illinois days. It's because Illinois is, as you described earlier, Larry, Illinois has very strict restrictions on how many cultivation licenses they're going to be given out, which means that there will not be overproduction in Illinois anytime soon. And that can help keep those values up.
Larry Mishkin: [00:29:23] Yeah, I think so. And look, I'm all for it, right? The more we can show the value in this industry, the better it is for everybody. As we as we should sign after here, we sign off. I just have to jump back some music for one minute. I said I'd email the other day, Jim and I did not get a chance to look at it yet. But in the midst of all my craziness last week, as we were really moving to get the Missouri applications completed, I got an email from a friend and it had a clip attached to it. The clips showed by Trey Anastasia Yo joining the Tedeschi Trucks Band onstage to play Mark.
Larry Mishkin: [00:30:04] Jim and I started to like . I started to watch it for a minute thinking I really don't have time to do this.
Larry Mishkin: [00:30:12] But the first three minutes alone is unbelievable because the two of them are standing at the front of the stage cheering their guitars and having a conversation about who the hell knows what happens when two retirement age get together and type sharp. With all due respect to Susan, I should ask you who I love. She's just tired of steps off into the shadows and is just let these two guys park it out and then they feel they rip into what, in my opinion, may be the best, if not one of the best jam tunes of all time. And just watch the two of them playing together almost effortlessly as though they do it all the time together is well, well worth it. And anybody just go to YouTube and Google. Derek Trucks. Trey and the Stars. Yo and Motown. And it'll pop up right away. There's probably a hundred different versions of it out there. Edit It's just fantastic. The next thing I knew, I had taken the full 30 minutes to watch it, but it was well worth that I went back to work a little more energized and just amazed that what the two of those guys can do when they're together. Yeah.
Jim Marty: [00:31:23] Excellent. Well, we are certainly looking forward to seeing Trey Anastasio here in Colorado. Labor Day weekend, and they sure enjoyed being Derek Trucks with you up at Red Rocks. Earlier this summer. They do.
Larry Mishkin: [00:31:37] They were great shows you. What I like to do is I'd like to extend an invite out to any of our listeners if you have a favorite jam. It is easier to just be a street champ from a jam band you love. Or it can be a smash up of, you know, a couple of legends like like that. If you have it, you want to send it to us. We'd love to look at it and listen to it. You know, the ones we like. We'll talk about and tell people about it. And mentioned your name for sending it in.
Jim Marty: [00:32:10] Excellent. Well, everybody. That's it for this episode of the Deadhead Cannabis show for Larry Mishkin and Jim Marty here. I want to say over and out and we'll see you next time.
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