About This Episode:
Is the “green rush” over? Are NFTs still a thing? Was it wrong of me to put my life savings into AMC stock?
Michael Johnson is the CEO of Metrc, a company that makes supply chain software for the cannabis industry. If talking about cannabis bothers you, I suggest you skip this episode…
This is one of those businesses that makes sense when you learn about it, but seems so out of left field for an uneducated person such as myself.
Today we discuss the cannabis industry boom and maturation of the “green rush” as what was once an emerging field becomes more commonplace.
Metrc has over 250,000 users for their “track and trace” software program, and they’re trying to bring safety and oversight to the wild west of the cannabis space.
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1:31 – “Metrc is, we’re actually, the software that creates the regulatory backbone of the legal cannabis ecosystem in the United States. And so we represent nearly 70% of all states that have legal cannabis operations within them. We create the software and technological ecosystem for which all of the cannabis in the supply chain is tracked, measured, tested and really creates the best foundation for protecting public health.”
7:31 – “What we’re able to do and what Metrc is really become the leader of, is creating an ecosystem to where every step along the way what we refer to from seed to ultimate retail sale is tracked. And that helps facilitate really good visibility for regulators to help make sure that the properly tested and safe products is available. But it also allows regulators and folks that are in states where legal cannabis can be consumed to have the peace of mind, that the infrastructure to be proactive, to do a perhaps a recall or to ensure that packaging rules and guidelines are met, that this functionality exists.”
8:13 – “If you think back a few years ago to romaine lettuce being recalled in the entire country and the fact that you couldn’t get romaine lettuce anywhere for quite some time and you compare that to what happens in the cannabis space, that just, that would never happen because we have such great visibility into exactly where the source plants are. If there’s ever any substance that for whatever reason has become contaminated or is at risk, we’re able to do a very surgical, very precise recall effort in partnership with our state partners to make sure that we’re acting super quickly. We’re not disrupting the entire industry and ultimately creating a really sustainable foundation such that public health and public safety are protected.”
17:14 – “In California, where you’re at, some of the more mature states, in particular for Metrc, the states that Metrc represents: California, Oregon, Colorado, you’re experiencing the effects of, call it a burst bubble, call it some kind of a retraction or a right sizing…That’s normal and it’s certainly, I think, an element of it that’s painful. And I definitely feel for any of the farmers, processors, distributors, dispensaries that are not doing as well as they would like. Unfortunately, that is an effect of a free market system. And so you get in a situation where a lot of folks think they can make a bunch of money on something and they’re going to stake their claim. And unfortunately, there’s only so many people in each state and there’s only so much for everyone.”
20:05 – (Ross) “Do you think that…you basically have to be more serious as a business person to succeed in an industry where maybe a few years ago, again, anybody thought ‘I could just get $100,000 and get rich quick.’ Do you think that that’s no longer the case? And it’s kind of selecting out those types of entrepreneurs?
(Michael Johnson) “Absolutely. 100%. Just like any other industry, when you get into something brand new, you’re able to charge significant premiums when there’s not a lot of inventory out there…Parts of California and Oregon and Colorado – at some point in the beginning folks are getting $5,000 a pound parts of last year on a wholesale market. Last year you saw that dip in some cases below $500 a pound. And so, if you’re selling something for $5,000 a pound, you’re making a lot of money and it doesn’t really matter that you have the most efficient processes and you have the most automated systems.”
26:36 – “From a Metrc perspective, I look, and I would encourage anybody to get really deep into finding ways that can help bring forth precision agriculture and the techniques in precision agriculture to the cannabis space. Because as folks get much more efficient in terms of farming, in terms of being able to harvest bigger, more quality, sometimes some folks really just care a lot about a high THC bloom. There’s a variety of different things that I think folks can get a lot better at and we just don’t see it. And so in providing the RFID tags for folks, literally every plant has the opportunity to be evaluated. And there’s so many data points on a per plant basis through the harvest cycle and so many opportunities to really maximize that yield. I highly recommend anybody get involved there because that’s going to be the difference.”
31:10 – “I believe that your mistakes are really what build your character. And so we talk a lot here about perfection is not necessarily attainable. It’s not necessarily the goal either. The journey is the way. I believe strongly in a number of stoic principles. And so continuing to move down that path. But I have a lot of conversation with folks and it seems like it’s a trendy thing to talk about, but I don’t think a lot of people believe it. And if you really get into it, you really recognize that ‘the obstacle is the way,’ to quote Ryan Holiday.”