CA - Cannabis Stocks Have Been Rallying But When Will Capital Flow Into The Industry?

2023-09-18 15:00:00 ET

Summary

• Positive news in the cannabis industry has led to a rally in the market.
• Retail investors should consider the long-term potential of cannabis.
• Green Thumb's share repurchase program and TerrAscend's TSX listing are notable moves in the industry.

Listen to the podcast below or on the go via Apple Podcasts or Spotify .

Emily Paxhia discusses recent positive news for the industry and its accompanying rally (2:00), the long-term play in cannabis, especially for retail investors (6:10), Green Thumb's share repurchase and can any other operator keep up? (13:40) TerrAscend's smart TSX move (16:10) New York, California, Glass House scale, private companies and the Gold Flora deal (18:20) and looking at the right metrics (27:35).

Rena Sherbill: Emily Paxhia , great to have you back on the Cannabis Investing Podcast. Thanks for coming on.

Emily Paxhia: Thank you for having me. It's one of my favorites.

RS : Likewise, likewise, your podcast is one of my favorites. You're one of my favorite guests to have on the show. So happy to be doing this, which I suppose is a natural segue. A lot of people are happier than they've been in quite some time, cannabis investors and industry players et al.

What are your thoughts? Are you happier? Are you kind of waiting to see how happy we should be? Where are you at as we're in the middle of September 2023. Where are you at?

EP : Yeah. Having gone, having been mauled by a grizzly bear for the last, like, 30-plus months. I would say I'm more – now, we have more of, like, a cuddly – like, a little cuddly black bear kind of hanging around us. It's nice to see, obviously, on the back of the announcement from the HHS.

We're watching carefully to see how this will shake out, but it's clear the stock market likes it, which is always nice to see a shift in the way the companies are trading. And it struck me that last week, I think, it was four days that we were positive and the broader markets were down. So that was a welcomed kind of break from the other trend…

RS : It was like 2020.

EP : I know. I was like, what's happening? This is great. But we have a long way to go to get back to levels where I think it makes sense. And I'm just excited if we could see capital start flowing into the industry, I would be so thrilled because the thing about this industry is it had to go into this kind of, as Morgan calls it, survive and advance mode in a stage when we’re still – we're still an emerging market. We're still an early-stage industry, and we should be able to focus on growth, not just surviving.

And I think that one of the things that we have not been able to do because of, basically, the capital markets being turned off for so long is invest in innovation . And when I say that, I mean it in every way, I mean, in retail innovation, in tech innovation, in product innovation, we should be able to invest into these things, but instead what we've been doing is investing into the basic aspects of the operations to stay alive. And instead of being able to expand things, we've been in kind of a contraction on resources mode.

And so anything that will open up the flow of cash into an emerging industry that deserves the ability to invest in growth is great. So, like, things that I think about all the time and we – Cy and I are always digging in the data, especially on the podcast . We just did the August numbers.

And I was looking at some of the cool new things that have happened where there are actually kind of products and brands launching in markets that are more mature and have kind of either stabilized in growth or actually have seen some decline year-over-year.

And why I think that is important is that these markets open, and it's always kind of the tip of the spear, the most enthusiastic cannabis consumers are the ones buying the products and they're very well served. But then what I'm wanting to see is the broadening of, like, a bell curve of consumers who are able to participate in the legal market .

And we haven't really been able to invest into the marketing and communications that would get people who are not the tip of the spear to the store and that would also have products or retail experiences that would address those other consumer segments.

So I think what we've seen and people were like, maybe the TAM wasn't what we thought it was, and I actually disagree. I think we just haven't been able to reach the TAM that exists. And so – and is growing as Gen Z is becoming adult and becoming 21-plus, that's going to be a growing consumer segment in cannabis for years.

And as I've talked about it, they're like the cannabis native generation where they will have come of age and market or in a world where cannabis is substantially legal from a state-to-state basis versus not being legal. We know it's still federally legal, but like, this and we know they're drinking less, and this is a different aspect of their share of wallet.

So there's a lot of good things going on. I just talked about a lot of things, but I'm excited. This is all to say that I'm excited to see cash potentially start to flow into the industry again.

RS : Yeah. Absolutely. I feel like it's been, I think, the long-term play of cannabis for those that believe and for those that are following along are still very much of the opinion that there is a very real opportunity in the long-term picture, but that the journey towards that long-term goal is, I think, full of challenges that we see and challenges that we don't see, and things are much more difficult.

What would you say pragmatically is worth paying attention to the HHS came out with the speculative promise of rescheduling cannabis. But as investors, do we wait for the finality, or should investors only be picking up U.S. players when the catalyst is actually unlocked? How do you view it pragmatically speaking?

EP : Pragmatically speaking, I'm a bull . And as bearish as I am in general, as a human being, I'm a bull on the U.S. market. I think this is the market. And I know there's excitement about, like, the medical market in Germany and potential adult use there. But to me, this is I mean, and that's a big market, but what that will look like remains to be seen.

This is a big market. This is where a lot of consumer trends are born on a broader scale. And I think that there's a lot to do here in the U.S. And I mean, if I'm a new investor looking at the space, yeah, I'd be watching this HHS news very carefully. And I always think, if you – but, I mean, obviously, I'm an early adopter. I mean, Poseidon is turning 10 next month.

So we've been at this, I know, I feel tired, a decade from cannabis what, 17 years. So oh, sweet baby James. So, I think the way I think about this is that if you wait, then you kind of missed the thing, but I don't – I still think there's time to run this forward because, like, when we look at it, Morgan and I were talking about it, we don't think the market's priced in what happens next if this should get formally moved to Schedule III and 280E tax code changes and goes away.

For anyone listening, the 280E tax code is tied to cannabis, because our Schedule I designation, which makes it even more dangerous than fentanyl, which is insane. I think we can all agree. But essentially, you can't write off ordinary business expenses. And so the only way you can see some tax relief is through your cost of goods sold, but if you're at a retail level, that's brutal, make sure effective tax rates in these business is north of 70%.

But when you think about this, think about this. You're investing in companies at these low-level multiples with this, like, massive optionality of unlocking that cash flow that could come from the removal of 280E. So you've got, like, a GTI that's already cash flow positive, and you've got others that are cash flow positive at operations.

And it's like, if you remove that tax code, then the cash that these businesses actually throw off becomes incredibly interesting. And so those are just some examples. And then all of a sudden your multiples look even more insane from an entry point in a good way if you're thinking about it that way.

So I think that if I were watching this, I'd want to start dipping my toe in the water now. Now as like a long and a little bit salty cannabis investor, I feel like I'm more interested in the details of what this is going to look like if this recommendation goes through.

And the Biden administration has repeatedly used the word medical in front of cannabis, and medical cannabis, medical cannabis. But our biggest markets are really the adult use. I mean, all you have to do is see, like, Missouri opens 8x the sales, at least on the baseline. Maryland, Cy and I are going to go through the data this week. It's looking very interesting in that market, and there's more to come there as they open and make the potential for more retail to become available to the consumers.

So we're watching to see what does this mean? Is this about medical cannabis only, or what will be the adult use piece? And I've talked with many, many lawyers, and I think we're all just waiting at this point to see the – for clarity of what the Schedule III will look like.

RS : Yeah. Speaking of waiting and clarity, we had Jerry Derevyanny on a few months ago from Bengal Capital, and he was talking about how people are touting this when once they remove 280E, it's going to unlock all this potential for these U.S. cannabis companies. And his point was they're just going to replace 280E with something else that's onerous. Do you feel that way?

EP : It's a scenario I play through in my head for sure. I think that it would be an aberration of anything ever done before. I think there will be a tax applied to it just, like, with alcohol, but, like, I do – I have trouble imagining that they would do some – I mean, the IRS is already taxed in terms of their capabilities and their resources. So to then write a new tax code, I mean, there's a lot that has to be done to do that.

So, yeah, I mean, when I'm playing through every possible scenario, it does occur to me that there could be and will likely be another tax applied to this, but maybe not. I mean, maybe that it's just not. But, yeah, that would not be an upside positive, net positive.

RS : Yeah.

EP : Now, there is this whole other interesting thing, which there are people pushing on the legality of 280E because it's considered so onerous and so egregious. And, like, I don't think we should, as an industry, take our foot off the pedal of any of the other initiatives that people are working on to drive change at the federal level. And there are arguments being contemplated around 280E.

And I think that the difference between that and the HHS ruling is that if you do win in tax courts around 280E, you can see broader relief from retrospective years. So there's things around this that I think people should continue pursuing, in addition to the scheduling work that's going on.

I mean, it goes without saying, I should've said it at the outset, but I almost feel like since I've said it so many times, like, obviously, we would have preferred a descheduling, so that we get treated like alcohol. But instead, we're living in a world where we have to get into some schedule, which we'll see what that looks like.

RS : I've been thinking the last week that everybody is making due with imperfect situations. So I feel like this is another imperfect situation that we're all forced to make due with. Thus is life.

So speaking of catalysts and kind of waiting for good news and in the midst of all this HHS promise, Green Thumb (GTBIF) announced that it's doing a share repurchase program, which I think a lot of investors in the space have been waiting for something like this to point to, like, look, this really can bring us good stuff.

And what are your thoughts there and what are your thoughts as these kind of I don't mean to conflate two things, but, like, TerrAscend ( TSNDF ) listing on the TSX and pushing for uplisting onto a major exchange and Green Thumb doing a share repurchase program.

What are your thoughts in terms of, kind of moving the needle forward in terms of getting a more mature investor base in there?

EP : Yeah. Well, with the share repurchase, I mean, one of the things, and we've been long investors in GTI, and I'm never recommending anything when I talk about it. I'm just sharing my point of view.

But one of the things that that company has been very good at versus some of, like, especially Canadian companies, like, they have been very focused on shareholder value and not diluting shareholder value. And I think that this is just one other step where they're actually improving shareholder value, and it's a vote of confidence for management about the quality of the company. And I also think just on a cannabis macro level, what – what's coming next.

So to me, this is a vote of confidence in both the, like, on themselves and also on the market . And so I love seeing things like that when done well and when done at appropriate times. It can be tricky. It's a big decision to do that. So I think it was well timed, and I think it's being aptly applied. So I think that's a great vote of confidence.

RS : Let me just – before you continue, sorry, I just want to pick at it a little bit. Do you think that there's another company that's close to getting to that point, that Green Thumb got you?

EP : I mean, they are – I mean, they do and have always stood out in terms of fiscal prudence and I mean, Verano ( VRNOF ) is like another one that I'm loving these days. And I think the team is really showing strength, and I think they're being very smart. And they own a lot of their assets, too. Like, a lot of these groups had to do sale leasebacks as a way to alleviate the lack of cash. And I think, Verano owns a lot of their assets, and I think that's pretty cool and differentiating. I would put them maybe right there, too.

Oh, I was also going to speak about the TSX move by TerrAscend that was very, very smart. Look, like, this and that's not easy. And first through the glass, it's rough. I mean, so they invested time and money, time and money into that effort, in an attempt to broaden the reach of the stock, and I thought that was really smart because that changes their access to the institutional capital.

And you can see how it's played out in their stock chart. Generally speaking, it's been a productive shift over there. And I mean, all you have to do is look at the volume of shares traded in the OTC. And then you just look at the lift you get when you get to a major exchange, which the TSX in Canada is more like our NYSE or a NASDAQ.

And so the very fact that institutional capital can’t participate in that name changes the entire complexion of the volume around it. And I think that it's one of those things where Jason Wilde and the team over there, it's a bold move and a brave move because if it doesn't play out, then it was a big investment. But I think it's proving to be that way.

And I think, again, I mean, I don't think a lot of us knew exactly the timing on the HHS piece, but I think the important thing is to see the investment in making these things available and I think the TerrAscend team did just that. And I think – you – I mean, I think that was, like, the news that eclipsed a lot of the news around TerrAscend, but if you actually go through their investor relations aspect of the site, they've also done a ton of work cleaning up the balance sheet, tightening up the debt, restriking.

I mean, they've been, I mean, it's like day after day. I feel like I'm seeing something they've done to bolster the business. And I think that this was the good work worth doing to borrow from Mark Twain, that's one of the main joys in life is that. So I feel like, it's really important to take note of that, too.

RS : So when you first started coming on – this show, we talked a lot about California cannabis market, and I wish I could say that in the year, subsequently, we've seen good news, but we've seen just a lot of, at best, I think two steps forward, one step back or one step forward and two steps back.

And then we saw New York , which there was a lot of excitement around and then a lot of disappointment. We talked to you a bit about that last time you were on. What are your thoughts about those two bookends of the U.S. market and then kind of the states in between. You mentioned Maryland, you mentioned Missouri as highlights, and we've talked a bit about that on the podcast also.

What are your thoughts on the States and how that looks and maybe the business model that you see or business models that you see having the best chance of success at the way that it's kind of looking right now?

EP : I think that, yeah, I think New York – I'll start with New York. I think New York is just a shame because I think there's -- when I think about, like, the tent poles of our country of where creativity and, like, the development of brands and consumer products happens, I think of California, specifically Los Angeles, and New York, and, like, Brooklyn, like, I think of these as, like, the epicenters of some cool things going down. I mean, Chicago is cool and Austin is cool.

I mean, there's a lot of cool places, but I think of those as our tent poles, right? And I think it's also just because there's a lot of agencies there, and so a lot of talent is there. But – so I had really high hopes for New York, and I will say I went to some of the stores in Manhattan, the legal stores. I went – I also went to the vape shops that are selling cannabis to see what the deal was there, which was crazy, but I was blown away by the Union Square Travel Agency.

I thought that was a really cool experience. They have great brands on the shelves there. A lot of them have been brought legally. The brands have come and set up partnerships in New York and are there, like, you can see a Camino Gummy in there. You can see Jetty in there, and all legally.

And so, there's a – there are some great experiences with the stores that have been opened. Now I just hate for them because I've seen this story before. I hate that they have to compete with this, like, these other stores that are not cannabis stores. So, like I said, vape shops with cannabis in them.

So they used to just sell, like, JUUL and whatever, but now they sell cannabis. So – and the consumer doesn't know what they're getting. And so I just don't – I think it's just too bad, and it seems like New York is just like the dysfunction is just pervasive in terms of making any change there. So until you – until they create some change on that, it's just too bad.

I just don't think it's going to be an interesting market for the legal regulated industry. And then, I mean, look, like I said, those stores fine. But when you see, like, the total revenue dollars, it's insane. The state is missing out so much on the taxes they could be collecting on this. But…

RS : Do you have a sense of how they work their way out of it, or it's just kind of like a series of, I don't know, adaptive measures?

EP : I mean, I think Jeff Schultz has made a great idea or has pointed out a great idea, which is to really go after the landlords of the stores that are selling cannabis illegally. And I mean, I'm a big – I mean, the big fear I have is I lived through Vape Gate and I feel as though we're opening our – we're, like, letting down the sides to become susceptible to another mass hysteria because Vape Gate was about illicit vapes that were being sold, that were not lab tested and that were caught with garbage. And that wasn't the legal market that was the problem and then it blew back in our face.

You could all – you see what happened. It annihilated the vaper category, which is by the way now having a comeback. It's the biggest category in Gen Z, first to eclipse flower in a generation, but the – so I do have concerns about the quality of whatever the stuff is that's being bought in these gray stores and the consumer's health. There's a reason that our industry willingly and happily participates with testing programs, and it is to make sure that the consumer is getting safe and clean products.

So I don't know, until they start enforcing things, I think it's going to be very difficult to compete. And they have to, okay, the other side to that is to get more stores open. Because otherwise, the consumer is confused, but the more legal stores that open, that's all education for the consumer.

Like at one point, there didn't used to be grading in restaurants. Now you kind of look for that in New York. Is this an A, a B a C. Like, what's this looking like? You can educate consumers pretty quickly, but they got to get ahead of it. It's like the curve is getting a little far. So it's a bumout.

RS : I would say it's getting quite far. Yes.

EP : Yeah.

RS : California?

EP : Yeah! California. Okay. So I'm based in California, and I'm seeing major green shoots out here. Like, we're invested in a private company that's essentially that's looking incredibly healthy. And I think if you didn't get over your skis and you kind of monitor the market dynamics, especially on the back end with the ebb and flow of cultivation, I think you can have a nice business in California.

And people ran away from here because it is hard here, and it's expensive here, and the tax rates are pretty big bum out here. But I think that if you can – it's kind of like I always make the joke about, it's like an athlete training at altitude. If you can do well in a business in California, you could go compete anywhere in the United States and just crush it.

It means you have to have a great brand profiling, great retailing, great quality of products. I mean, I will say I'm very spoiled. I have great wine. I have great beer, and I have great cannabis here in California. So – and fresh produce.

But I think that, I have some high hopes for California. I think it can get better from here. And I think we had to go through a little bit of a Darwin cycle out here because there was a lot of cash poured in and not well managed. And I think we're starting to see that that kind of getting cleared out now, and it seems like the operators who are really focused on fundamentals just like kind of a mirror of, like, what I see at GTI, I see these guys being fiscally prudent, and I think it pays off.

RS : Yeah. To your point about private companies, Seth Yakatan , who I would imagine you know, but I don't know if you do. He was on the podcast a few months ago talking about just that, that for investors' money look to private companies specifically in California that there's some really strong names out of there.

What would you say in terms of, like, retail investors invested in public companies? A, what do you think about The Parent Company ( GRAM ) deal? What do you think about Glass House’s model in terms of what they're able to bring to market at scale at that price in terms of as we move forward as states continue to go online?

EP : I know when people love Glass House ( GLASF ), and that's cool, and Graham is great. I'm a bottom-up kind of a person. And I really like thinking about scaling prudently. I'm just like, well, I'm just one of those people.

And so I think you could – some people are top down and they go big, and that's our approach. I'm – I would say I'm more of a building blocks fundamentals kind of gal. And I really like and I really – I do. I look at the capital structures of these companies. If I was a retail investor, I'd be looking at just like what I was talking about with GTI, and it's like Ben talks about it all the time. It's the denominator.

I'd be looking at the denominator of these companies and the capital structure. And how they've raised money, and what does that mean to the value of the common shares which you're buying in the open market? And I don't mean that necessarily about any one company in particular, but those are things that matter if you're buying company stock.

You should be thinking about the value of each and every share that you're buying and also the use of resources. And, I like to focus on where we are today and think about where we can go in the future. But if you want to get to the future, you have to get through today. Until the world changes and things open back up, it's going to be a step-by-step process of building these businesses and incredible. I keep saying it, about fiscal prudence around the allocated resources.

RS : Are there specific metrics that you prefer to look at or that you think retail investors should be looking at?

EP : I mean, we always look at – on the operating companies, we're always looking at SG&A containment. We like looking at gross margins. We like looking at and we break it down, too. I mean, I really look at the mix of the revenue of the businesses, like, how much of it is driven by the retail, how much of it is vertical, how much of it is wholesale.

And, yeah. So we look at, I would say when we're looking at these public companies, we do look at the financial fundamentals of the business and, like it used to be that we looked at EBITDA . Now we're and everything's adjusted EBITDA. So you have to really dig in on what the a, and adjusted is, like, what are they adjusting.

But I think if you can also just kind of trend track like, how they're doing on their gross margins, how they're doing on their path to free cash flow or cash flow from operations. And all of that backstopped by understanding the asset base and the mix of the revenue profile.

So, like, I would prefer to know that people are being very careful with their wholesaling and that they have a really solid retail footprint. And then there's the brand mix, but I like to look at that too and understand how they're doing in terms of their reach through on their vertical to the shelf space.

RS : Do you have an opinion on companies deferring taxes?

EP : I have a point of view on that that I think people are doing this as a strategy with a very specific objective in mind. I think as long as they're accounting for it and they're not spending money that they “don't have”, it is the rate that they're paying on the plans around deferring taxes, this is like pretty appealing compared to the rate of lending in the industry. And you can think about it, but what I would be nervous about is the people who, or if groups aren't thinking about how they're going to pay that tax bill ultimately.

I mean, I've seen when I'm looking at assets in California, I've seen far too many companies that you can't even touch because they're so – their tax situation is so up there, it's pear shaped. And so you'll never get out from underneath that. And guess who? Oh, I mean, the tax man always comes to collect. So you got to be really careful.

But I think if it's managed prudently and without hubris, I think, or with some humility, I think you can use that as a lever in building a business carefully. But I wouldn't want to get on the wrong side of that. It's something that I'm – yeah.

RS : But you feel like it can be a good strategy if done smartly?

EP : If done prudently and if, yeah.

RS : Yeah. Yeah. Humility is key, I would say, in every facet of life probably, but certainly this industry…

EP : Yeah.

RS : What we've been through. Do you have two cents to add on The Parent Company, Gold Flora deal ?

EP : It's big. I mean, it's going to be – it's a big company . And that's a lot of capacity, and it's full vertical. So maybe I'm hoping to see that they, I mean, they've spent a lot of money, not Gold Flora, but The Parent Company up to this point.

Had a lot of cash on their balance sheet more than most, and it's not there anymore. So not the most capital efficient setup I've seen yet. That's about all I'll say about that.

RS : Yeah.

EP : I would kill for that kind of money.

RS : Yeah.

EP : I think a lot of the companies, I would not. I mean, I'm a vegetarian. It's likely I wouldn't kill anything, but you know what I mean.

RS : Hyperbole. That's the word. I think we'll leave an ellipsis at the end of that kind of sentiment.

EP : Yeah. I mean, look, if they – if they're in this fiscal prudence mode now, I mean, they still – they can do a lot. So we'll see.

RS : Yeah, yeah. Anything that you would advise investors to be thinking about looking at, that we haven't discussed, that you feel like not a lot of people are discussing, or just in general, that you want to – that you would want to share with listeners?

EP : I would say, yeah, I would say keep an eye on, I think, there's a lot of efforts in motion on the industry side. I think we've all, whatever happens with this session of Congress and banking , I'm not holding my breath ever again on anything. But what I think we have now is an industry that's catalyzed to drive change in multiple pathways.

So I think this quarter, we’ll be seeing some really interesting developments coming out of the industry of different ways. We're going to try to and get changed to take place at the federal level. So I'm being purposefully cryptic, but it's kind of like a stay tuned and watch for some interesting developments coming out of the industry.

I think what happened last year, and we all know what happened in December, I think. And through the entire first half of this year, we cannot rest on the legislative branch. So I think there's a lot of work being done in other areas.

RS : Yeah. I know the Benzinga conference is coming up. I unfortunately won't be there. But do you have a sense of kind of what is going to be talked about or what the general sense of the community and the industry is or what you're looking forward to even?

EP : What I look forward to at that event, both that event and the Miami event is, it's very close quarters, which is a little different than the Vegas conference. So I feel like I bang out more meetings in two days than I can in almost, like, four weeks in the rest of the year. It's just, like, high concentration, really condensed meeting schedule.

And, like, some of our portfolio companies are really good at, like, Hora Supply Co. is really good about, like, getting on top of us early to help us help them line up meetings with management teams. That's a private company, but there's groups who do a good job with leveraging that. So I actually – some people are like, oh, conferences, you don't get that much done. I get a ton done at Benzinga.

So, I already have a crazy schedule lined up with meetings, and I like it that it's in Chicago because there's several of the MSOs are based there. And it's also a really active retail market from a cannabis retail perspective. So I can run around and see, like, almost every type of store in my downtime, which is very limited, but it – you can have a little bit of a market research experience as well. So I find the whole thing really productive on that level.

RS : I'm going to end it with this. Do you see M&A coming down the pike this year?

EP : I would love to see private equity get into the space because I think we could see some interesting, like, divesting and combining of things. And I think that that would be really great.

I do think we'll see – what I'd like to see is, as we know, the Columbia Care ( CCHWF ), Cresco ( CRLBF ) thing didn't happen …

RS : Were you surprised by that?

EP : No. I mean, that was, like, talk about timing, and we've all had these timing moments in the last year, but, like, the minute that deal got announced to where it ended up not happening, I mean, the market repriced down, like, so far.

I mean, it was just going to be so hard to get that deal done. And I think we saw the Trulieve ( TCNNF ) Harvest deal, and that's been quite an immense undertaking and required actually shuttering assets and the digestion of these big acquisitions is so complex. I mean, so complex.

And I think that the era of the blockbuster M&A of cannabis is probably behind us. I think what we'll see is more picking up of smaller asset bases by some of the bigger operators or maybe some of the single state operators that people don't even really know about because they're private, they'll be the ones who are more acquisitive. So I think we'll be seeing a ton of M&A, but I think the complexion of the M&A has changed.

So I think it's going to be more modest and I'm actually really excited about it because as you can tell, I, yeah, I kind of am – I like the building rather than the like big blockbuster stuff. I get more excited by just building really good businesses, so.

RS : Do you feel like there's – I know I said I would end it there, but do you feel like there's a point in the industry where you feel like, okay, now is my time to step out?

Do you look at it like that, or are you in it right now without thinking about that?

EP : Oh, girl, we have talked about the moment because, I mean, ever since Morgan and I started Poseidon , and I know and Patrick started Canopy, like, Patrick and we've been working with him for since 2014 and, in different capacities of course, because we had our own firms. And now we're – we came together for the super band on our third fund.

But, like, I feel like we all have this sensibility of, like, you don't stay too long at the party. So once this industry, I mean, like I said, we're still emerging, but, like, once this industry really hits its escape velocity, I think that's when we'll say, thank you. We did it and move on to something else.

But, I think that, yeah, again, just kind of, I would say a theme of this conversation has been building. I think we're builders. And then once, it feels like it's built and is on its own pathway, then we'll be happily... it's like the kid's off to college. So once this industry is ready to go to college and be an adult…

RS : You're going to turn its room into a workout room.

EP : Yes, yes. And then I will go on to saving marine life and…

RS : Hey, she's just getting started, people.

EP : Yeah, and all the dogs, basically.

RS : Nice. Nice. First the plants and then the animals.

EP : Yes.

RS : Okay. I like it. May it come soon and speedily. I hope more good news in between the next time we – until the next time we talk. So really appreciate this conversation, Emily. I appreciate you taking the time. Have fun at Benzinga, good luck at Benzinga, enjoy Chicago, and talk to you soon hopefully.

EP : Thank you.

For further details see:

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