In honor of this Juneteenth, Cannabiz Media’s Chief Data Officer, Ed Keating sat down with Kaliko Castille, President of the Minority Cannabis Business Association. The MCBA is the largest national trade association dedicated to serving the needs of minority cannabis businesses and our communities. It represents minority and allied cannabis businesses, aspiring entrepreneurs, and supporters who share a vision of an equitable, just, and responsible cannabis industry.
On this Cannacurio episode, Ed and Kaliko discuss how he became a full time cannabis activist, all things MCBA and the objectives behind the association, a deep dive on social equity programs from regulators, and so much more!
Press the Play button below to listen to the podcast.
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Cannacurio Podcast Episode 52 Transcript
Ed Keating:
Welcome to the podcast powered by Cannabiz Media. I’m your host, Ed Keating. And on today’s show, we’re joined by Kaliko Castille, President of the Minority Cannabis Business Association. Kaliko, welcome!
Kaliko Castille:
Welcome Aloha and good morning. Thanks so much for having me, Ed. So great to be here.
Ed Keating:
Absolutely. And it was great to catch up with you last week at at MJ Unpack. It’s, it’s nice that we, you know, have events in person again so we can actually see people and not just talk to them over Zoom or StreamYard like today.
Kaliko Castille:
It’s good to be able to have the virtual connections, but I definitely agree that like face to face is just so much better and I, I think this industry in particular is so dependent on face to face interactions. So it’s definitely great to be back in person again. It was great to see you guys.
Ed Keating:
Yeah. No, I totally agree. I mean, I, I had a stack of business cards just from people I ran into in the aisle ways, walking around in New York at MJUnpack. So it was totally a worthwhile conference for us to just make those connections. So, digging right in I was, you know, doing some research after we chatted last week and, and saw your post where you said 13 years ago this week you got your start as a full time cannabis activist, you said it was the day you began to understand what you’re supposed to do with your time on this earth. That’s a pretty profound statement. So, tell us what happened 13 years ago and maybe a little bit of what’s happened in the interim.
Kaliko Castille:
Yeah. Yeah, I appreciate it. Well, I’ll take a step back from even 13 years ago that, like, I grew up in the dare generation. So I was part of the sort of, you know, this generation of kids that were sort of brought into the propaganda around marijuana and sort of taught to just say no. Right. And sort of going through high school after high school graduation, I tried cannabis for the, for the first time and it was kind of a mind blowing experience for me. It was kind of like, oh, this is what they told me was gonna destroy my life? Right? And I feel like that was kind of a mind expanding experience for me to sort of think about like, oh, if this is something I was lied to, what else have I been lied to about? Right. So it kind of, it led me down this rabbit hole of really sort of discovering sort of all the ways in which cannabis was, you know, part of this sort of propaganda machine over 90 years and really had led to, you know, really disproportionate impacts on communities, including the ones I had come from. Right. And so I like, grew up in a place where once I tried weed for the first time, I realized my entire family, my parents, my grandparents had been consuming my entire childhood, but I didn’t know because they were responsible cannabis consumers – consumed at night, hid everything away. It was always like locked up. I never knew about it, right? So that really when I first tried it, it kind of also showed that like this dichotomy of like this is something I’m told is dangerous – and my parents who are law abiding citizens, who are hard workers are using it at night to hang out and relax like that doesn’t, that wasn’t equal for me, right? And so it led me to this place of like going and becoming that sort of person on campus that was always talking about weed legalization, that was writing about weed legalization on all my my papers. So I was in political science department and everybody just knew me as the weed guy. So eventually went through that sort of like research. I was following this dude named Russ Belleville who at the time was the outreach coordinator for NORML the National Organization for the Reform of marijuana laws. So he was based here in Portland and was at a global cannabis march, and through sort of his podcast and this progressive talk show or progressive talk show that he was hosting at the time was talking about coming out to this cannabis march. So I decided to go out there and get a chance to meet him and a bunch of these Oregon luminaries that I’ve been following on the internet for years, but decided I was finally going to go to an event and get to meet him. And that day I got to meet a bunch of people I’d read about online, Paul Stanford who ran sort of the organ cannabis tax Act, Madeleine Martinez, but one of the very first cannabis cafes in the country in Oregon. So a lot of these people who really helped pioneer sort of cannabis legalization, at least the movement in Oregon. I sort of was hanging around with them. And then a couple months after that event, I actually got invited into Russ’s podcast studio where he was hosting the daily radio show and podcast for NORML, and then he was invited me in to become an intern. And so that’s sort of the beginning of the journey. And really, for me when I was saying that like, that’s when I found out what I was supposed to do it because that was the day I really truly truly felt I was able to be myself out in public, on the streets of Portland, talking to other people and trying to basically proselytize about this idea that we should be ending prohibition, right? And that was the day I made a bunch of connections with random people because I was engaging them on this issue that they otherwise we’re not being engaged about. Right?
Ed Keating:
And so, and, and, and it’s, and it supports your point from earlier where you talked about the importance of in person and how this industry connects people. Because here, you know, sort of one of your earliest most profound set of meetings occurred because you went to a march where there were people and, and then you got to meet more people in person and, you know, fast forward to New York last week. Obviously, that’s what those events are made for now, but those events weren’t really going on 13 years ago in the middle of Manhattan, that’s for sure.
Kaliko Castille:
Yeah. No, I mean, great point about the in person thing. And I think for me, it’s people underestimate the value of just showing up, and like how small both the world is, but even aside from that the cannabis industry or cannabis movement, right? And so like showing up really is half the battle if you just are able to be competent and be responsible and willing to work hard, there’s a lot of opportunity for folks to find the places they need to be in this, in this movement.
Ed Keating:
Absolutely. Absolutely. So, sort of fast forwarding a little bit. Let’s talk about what you’re doing now. I mean, you’re doing a lot, you’re the, you’re, you’re truly the renaissance man here, but we, we’ll focus in on a couple of things. You had a senior role at the National Cannabis Industry Association (NCIA). You’re now the president of MCBA, the Minority Cannabis Business Association. Could you tell us more about it, objectives? You know, just for people who might not be as familiar as they should be?
Kaliko Castille:
Yeah, absolutely. So, you know, talking about how I got my start at NORML, I’ve always been in this as an advocate. And then I think over time, I really found the industry is sort of the next next iteration of advocacy, right? And so for me, kind of starting at normal kind of running a dispensary, running sales and marketing. I ended up at NCIA, overseeing their business development and their marketing departments. And really at NCIA, I got to see what it was like to run a trade association that had lasted 10+ years and had sort of a sustainable business. The whole point being that you are sort of providing benefits for your association members that are helping them grow their business, get business leads, do the networking and educational opportunities, but it helps to fund the advocacy that you’re doing right. So, MCBA was founded in 2015, really to help represent black and brown and minority communities that have been disproportionately impacted by prohibition to try to write policies that ultimately lead to an equitable industry and ultimately to help those folks disproportionately benefit from the legal marketplace. So, MCBA is an all volunteer organization, really focus on focus on advocating for black and brown and minority entrepreneurs. But my role at MCBA is President now, I was Vice President for a couple of years before that, but really trying to help grow the association similar to NCIA or other trade associations, you see in other industries, a lot of folks who are in the cannabis may not know in mainstream industries, every single industry has an association that, that, that sort of lobbies on behalf of that industry that talks about sort of the, the ins and outs of doing business in that industry provides education and networking opportunities.
Ed Keating:
I mean, without a doubt, you, you may not know this, but I, I ran a division of a trade association for seven years is actually where I met my co-founder, he was on my board back in 2005. And what we used to talk about when people would ask, what do you guys do? The simple answer was we protect, promote and inform for the industry. And I think that’s sort of a universal thing that most trade associations do to help their members, you know, get the word out, do lobbying, promote them, put them on a podium if there’s an event or we had awards programs, et cetera. So it’s, it’s great that you’ve got this group that, you know, can, can really do that, especially running it from an all volunteer perspective because that is really tough to do is
Kaliko Castille:
Yeah absolutely, and like, over time we’ve done really cool things like having yearly policy summits which have helped sort of create model legislation that we’ve seen introduced in states that we’ve seen parts of it introduced in federal legislation. So we really try to use all of that sort of the goodwill that we’re building up that what we’re doing to sort of fund the efforts of actually putting forth equitable policies that people can actually use and take to their legislators or their regulators to not try and reinvent the wheel, but ultimately take what’s been working and, and try to double down on it. So really MCBA is a policy focused organization and we very much are a network of black brown and minority entrepreneurs. But our objective in general is to try to get this industry to help the the communities that have been disproportionately impacted. And whether that’s through trying to tweak the Safe Banking Act at the Federal level or sort of working with state regulators to make sure that we are doing this as much as we can to lower the barrier of entry for minority entrepreneurs. It’s really what we’re focused on. And our main objective is making sure that we can get more minority entrepreneurs in the industry. Because we’ve been in this industry for a long time, we’ve just been the ones who have been most disproportionately criminalized for doing this work.
Ed Keating:
Indeed. Indeed. So the Great segue, so, you know, one of the ways that you and I have worked together and talked about over the years since we’ve known each other is, you know, information on social equity programs, which we are now gathering in our platform and we’ve, you know, given access to you and your members. But let’s talk about some of those social equity programs from regulators. I’m curious from, you know, where you sit, who do you think is getting it right? And why if there is anybody who fits that – Yeah, they’re doing a good job with that because it’s tough.
Kaliko Castille:
Yeah, I think this is a very nuanced conversation and I hesitate to ever say that there’s like one state that’s getting it right? Because frankly, we’re dealing with a lot of folks who have spent their entire careers, not needing or not wanting to learn anything about cannabis. And then we’re trying to teach them all of the nuances of the cannabis industry plus racial equity in a compressed time frame. Right? So, I think it’s an unrealistic expectation that we would expect that a lot of these places would get it. Right? But I think we got to make sure that we’re giving props to those who are doing pieces. Like Oakland, California is one of the very first localities to have a social equity program. and they have done things like, actually give low interest loans to entrepreneurs and grants, trying to make it easier for people to get access to licenses. Ultimately, you know, the the battle over the last few years and what people talk about is you need to be able to lower the barrier of entry so that you can get licenses to folks who are coming from the legacy marketplace, and can’t afford to go through all the hoops that other businesses are going through right now to get licensed. And then the other aspect of that is making sure that people have funding, right, whether that is low interest loans, forgivable grants or other opportunities for people to actually get financing. Those are the two biggest things that are barriers to entry for an equitable industry. It’s making sure that we have low barriers, entry and sort of low lower regulations on getting licenses and then making sure that we have funding. So, you know, a lot of people are criticizing New York right now, but for, for what it’s worth, they are making sure that the people who disproportionately were impacted by prohibition are disproportionately able to benefit from the marketplace, right? And so that naturally means that people who have been in the marketplace on the medical side for some time are going to have to sacrifice a little bit to make sure that those folks are able to get into the marketplace. So while folks criticize New York personally and wearing my MCBA hat, I think they’re doing the right thing and making sure that they are strategic and methodical about who is getting these licenses. That is going to mean it’s going to hurt some well, capitalized businesses who have been betting the farm on New York opening up, and that they’re gonna expand their sort of operations. But I think once again it gets back to this sort of unrealistic expectation around time frames. I think I would rather have a slower roll out to make sure the right people get the licenses than a quick rollout that you cannot put Humpty Dumpty back together again. And by that point, you have sort of a few people owning most of the marketplace.
Ed Keating:
Right. Well, it, it’s sort of that, that age conundrum. Do you want it fast? Or Do you want it correct? Pick one. Yeah, I mean, it’s true like we do that with data all the time. Like I can get data up very quickly if you don’t want to bet it. But nobody wants that. Everybody wants it, you know, timely, and inaccurate and accurate always has to be first. And I think in this case it has to be effective and then, you know, fast can wait because it’s, it, it’s a long game. I mean, this is a marathon. It’s definitely not a sprint.
Kaliko Castille:
Other sort of thing I’ll put on. This is sort of like the caveat to where I, like, I hate, I hesitate to say that there’s anyone getting it right? Is that it’s not, we too often have this conversation about who’s getting social equity. And it’s like sort of like who’s setting up a program in the right way. Whereas we need to be writing equitable legalization laws in the beginning. Right? And so often what we do is we write a legalization law that’s not truly baking in equity into the legalization itself. And then we’re writing a program that’s trying to sort of like circumvent the existing structure to try to get to equity. But if you’re really centering equity at the beginning of it, right? Make sure you don’t have license caps, make sure you’re not requiring things like owning your real estate before you can get a license, make sure you have reasonable fees, making sure that you have some sort of discounts for people who are coming from social equity businesses. If those things are baked into the cake from the very beginning, it’s gonna be really hard to craft a program inside of that legalization that’s going to ultimately do what you’re trying to do. Because for instance, in some of these states where they have license caps, right? When you, you basically put an artificially inflated price attached to that license because only a few people can get it when you don’t have a license cap. It doesn’t put it in this position where you have social equity entrepreneurs that are going into the hands of predatory lenders in order to do business. And you also don’t have sort of these large MSOs who are able to own and marketplace because they have the money in order to get those limited licenses. And you’ll see that that really is a business model for a lot of businesses out there that they actively lobby to make sure that there are limited license structures because they know that more well capitalized, more well connected businesses are going to benefit from that, that structure.
Ed Keating:
Yeah. No, certainly that, that definitely poses some issues when you put those caps. And I think the other thing it may do, or at least we’ve seen this in a few states is it can turn that license into a lottery ticket where, you know, hey, I got the license, I’m gonna flip it. I mean, we saw that in Florida where some of those licenses never put a seed in the ground. They just waited and waited and waited and, you know, they got a heck of a payday, and, you know that doesn’t help anybody. And I think it tarnishes the industry in a way. I mean, I, I get the economic need that people have and, but it’s, it’s, it certainly can do harm too.
Kaliko Castille:
Well, well, I’ll put one more example of like Connecticut where, you know, one of the ways in which you could get a social equity license, you had to put up $3 million right? So like how many people coming from the legacy marketplace got $3 million lying around that they can go to get that? And then, so it means you’re only gonna go have to work with the large players, right? So I do think that like once again it’s, we don’t have to reinvent the wheel. No one has gotten it right out the gate. But I think trying to figure out that there are clearly things that do not reach do not help us get to an equitable standpoint and it all centers around lower barriers of entry to get licenses and then making sure that people can tap in to some sort of financing and resources to make sure they can actually fund their business
Ed Keating:
Great point. And, and I think you’ve touched on some of the strategic level initiatives that or decisions that programs or, or come states can make, focusing in on Connecticut, which is my home state, and where, we’re based out of – one of the other issues they ran into is how they ran their lottery and they allowed people to put in really as many licenses as they can afford. And there were a couple of people who put in, you know, just, I think 800 licenses was the most and it cost them a couple $100,000. And to your point, not everybody has a couple $100,000 just for the application process. And then those people did win licenses. And, although one of them appears to be having trouble finding real estate, but that’s a story for another podcast, but that’s something where now they have, put on hold the next level of lottery. And I think they’re probably gonna make some tweaks to it based on the feedback they got.
Kaliko Castille:
I think it’s just, it, it’s, it’s hard for me coming from this, from an advocate standpoint and then wearing the hat of a leader of a nonprofit organization that’s doing sort of advocacy work, right? But it’s really, it’s fascinating to me that we accept that our industry has to go things through things like lottery systems in order to get an opportunity to open up a business, when you have things like McDonald’s franchisees, which arguably McDonald’s does more harm to the public health than cannabis does, right? And those folks don’t have to go through a lottery system to get to open up a store, if they can get the financing, if they can find a real piece of real estate that works for them, they get it done. And I just, I think that like our industry still has some work to do to make sure that we are actually on parity with any other small business or any other entrepreneur sort of venture in, in our, in our economy.
Ed Keating:
Perfect segue. Because you know the question I come back to, we talked about protect, promote and inform, how can an organization like MCBA help with that? Because I imagine that at the state level and there are many states that, you know, have programs, you know, how do you use your resources and really, you know, you your, your time to try and help those programs be more welcoming and, and be more effective for the communities that you represent. Because that’s a big lift, I would think.
Kaliko Castille:
Yeah, absolutely. I think for us once again, because we’re an all volunteer organization, we don’t have chapters across the country. We don’t have paid staff that are actively in these states working on it. The best thing we can do is help empower people through resources, right? So last year we put out our National Cannabis Equity Report. You can go to minoritycannabis.org/equity map, you can check out the interactive map, download the PDF to sort of, we looked at all of the different legalization efforts across the country, looked at 40 different pieces of those policies and determined whether things help lead to an equitable or an inequitable outcome. And so providing those sort of resources to people so that they can lobby at their state and local level is really what we have the capacity to do. But then one of the things that we’re also working on is starting what we’re calling our grassroots committee. And so we are looking for folks around the country who are looking to connect with other like minded advocates in their area that want to work on these sort of issues so that they can utilize our resources and sort of our network. But then ultimately, what we can do is help empower people at this, at the local level to do this work because everything is happening so quickly, we’re spread thin across the country with so many states coming online. You know, you got Maryland, you got Delaware, you got Minnesota looking at like potentially coming online. There’s so many of these states that are coming on line so quickly that, as an organization, because we’re an all volunteer org, we can’t respond that quickly, but we can work with other folks who are on the ground to do that. So if folks are in, in different areas, just encouraging them to reach out to, to me my first name kaliko@minoritycannabis.org. We’d love to get you guys plugged into our, our grassroots community because we also need as much information from folks on the ground to understand what needs responding to, right? How can we be a resource and how can we help?
Ed Keating:
Yeah, I mean, it’s, it’s what my the, the person that I work for the trade association used to call building a coalition of the willing. And, and I think there are a lot of people out there who feel very passionately about this. If you can tap into that, it’s great. I work for one publishing company that deputized law firms in every state to write for them about the laws in every state. And they basically had 50 editors across the country doing it and sort of the same thing here. If you could get selected people in every jurisdiction that mattered, you could really build a heck of a grassroots staff. So that’s a great, great program. So congrats on, on getting that off the launch pad.
Kaliko Castille:
Yeah, thank you.
Ed Keating:
So earlier I talked about, I referred to you as a renaissance man because you have so much stuff going on. So I wanted to shift a little bit from MCBA because I know through following you on social media that you recently have run for office. You’re also the co-founder of ThndrStrm Strategies, the digital marketing and strategic communications firm. So, tell us a little bit about those experiences and how do they help with your association and advocacy work? Because those are a lot of things to manage and they’re, and they’re certainly disparate in some ways, at least to me.
Kaliko Castille:
Yeah, for sure. I appreciate it. Well, I actually do see that there’s like sort of a through line, right? So even dating back to me being an intern at NORML, when I was doing their daily radio show and podcast, part of my job was doing social media management was reaching out to elected officials, was doing a lot of the sort of digital communication. And really what I, later on down the road, learned was digital organizing and marketing, right? So everything I’ve done through my cannabis career has been about sort of organizing people online and trying to do sort of digital marketing and brand building and that sort of thing. So in 2020 I left my job at NCIA to start my own firm called ThndrStrm Strategies, and we’ve worked with NORML, MCBA, Berkshire Roots out in Massachusetts, some great law firms sort of doing whether it’s website development or social media management or range of stuff. But really, for me, whether you’re in a nonprofit organization, be that like a, a trade association, whether that’s a for-profit cannabis business or a political campaign, all we’re doing is telling stories. Ultimately, what we’re trying to do is connect with people emotionally so that they can take action for whatever it is that we’re trying to get them to do. Right? So, on the sort of nonprofit side with NCIA and MCBA, really at NCIA during my time, I was focused on telling stories about our members which helped connect new members in there. And during my time at NCIA had helped lead their largest one year growth in membership in their sort of 10 year history. And a lot of that came from this sort of storytelling and they’re really trying to get people to connect with other people, not just connect with a brand or with a logo, right? And so, you know, at ThndrStrm Strategies, we try to work with both for profit companies, non-profit organizations and political campaigns to really help them tease out what are the story storylines that exist inside of your business or inside of your organization? How can we tease those out so that other people can see themselves inside of your story and then want to work with you, right?
Ed Keating:
So self identification thing like that’s like me, I should do more, you know.
Kaliko Castille:
Absolutely what I think it’s also just, it’s the idea of, of building a brand and building a community, right? And so like one of the things somebody I follow named Gary Vaynerchuk always talks about is like you don’t buy Nikes because they’re following you around on the internet and hitting you with a bunch of retargeted ads. You follow Nike because you get a feeling when you think about Nike, you follow Nike because over time they’ve built a sense of emotion inside of you and you actually think about Nike, not as the swoosh, but as some sort of activity or some sort of emotion, right? And that’s what you’re trying to do inside of whatever business organization you you are, you’re in, you’re trying to build that sort of emotional connection a with your potential customer. And so yeah, at ThndrStrm Strategies is really kind of taking what I’ve learned in the cannabis industry over the last 10 years and try to help people do that inside of their business. And then to your point about the me running for office, it’s now also trying to do that in the political world because I think there’s so many ways in which politics is about people. But we too often think about it as bumper stickers and slogans rather than the actual people who are affected by the policies. So if we can do a better job of storytelling, how houseless-ness affects individuals, then we can get quicker to actually passing things to help people who are affecting from houseless-ness. If we’re just talking about stats and numbers and data and putting it on an infographic, it’s not gonna have quite the emotional connection is actually telling the story about the day in the life of someone who’s experiencing that. Right? So that same concept applies for anything that you’re trying to sell or anything that you’re trying to, people get people to, to take action on.
Ed Keating:
Yeah, it makes me think of like a, I think it’s a famous concept that somebody came up with that, you know, one death is a tragedy. A million is a statistic. It’s just too hard to conceptualize. But I think it came out of actually, it could have come out of like Vietnam war reporting or something. It’s one of those, you know, older stories.
Kaliko Castille:
But yeah, absolutely. I mean, it’s, it’s, you know, it’s a great point that like we and I think in the fast paced culture that we live in, we if you don’t have something that’s pulling you in, you’re gonna go right past it. We’re in the infinite scroll age. And if you don’t have something that’s actually pulling you in, you’re, you’re just going to ignore it. And so, you know, from a digital marketing standpoint and like talking to people in the cannabis industry, like if you have a retail outlet, like if you’re just putting 20% off your grams of flour this Thursday, like no one gives us no one gives anything. But if you’re saying, hey, like here’s this woman, Wendy who came in, she’s 56 she, like, just had hip surgery. None of her medications were working for her. She was feeling really out of it when she was taking her oxycontin, but she came in and found this 1to1 CBD-THC Strain and now she’s able to go out and garden and, and do the things that she wants to do and enjoy her time with her grandkids. That’s an emotional story. That’s something that somebody will come back and be like, oh yeah, I’m gonna go buy that sort of strain rather than once again, 20% off Blue Dream this Thursday.
Ed Keating:
Kaliko, that’s like every pharmaceutical ad I see on TV, where it’s like somebody who has, I don’t know, psoriasis or some other thing and they show a day in the life of and how they can suddenly restore, you know, normal life.
Kaliko Castille:
And it works and it’s in Pharma does it in a cheesy way, right? We live in, we live in an air where you can have really thoughtful intimate storytelling videos that are done on your iPhone, right? But it’s just about being able to sort of conceptualize what are those storylines and what are those sort of emotional connections that I can draw with my customers?
Ed Keating:
Excellent. Excellent. Well, let’s move a little bit from you and, and, and look ahead because one question that has popped through my head and, and for, you know, two sort of lines of thought is we have like 39 states and more that have now, you know, put cannabis programs in place in some ways. And what does that do for advocacy organizations? Like, do people are like, we’ve won or we’ve almost won? We’re pretty close. Does that come into play at all? Like, do you run into, I guess, fatigue from people?
Kaliko Castille:
Yeah, I mean, I would say in general, like MCBA has been in this place where a lot more people support an equitable industry than are paying MCBA members, right? And so in that sort of way, I think we’ve always dealt with this sort of some people would call it a freeloader syndrome where you had people who know it’s gonna happen anyway. So there’s no way I’m gonna pay for the advocacy portion of it, right? Or they become so jaded that they just don’t see the need to invest in it because it’s not gonna happen tomorrow, right? So I feel like that’s a natural sort of thing that trade associations deal with. But I do think as things are happening more rapidly that people are having less time to focus on the advocacy portion of it, right. So even though it’s becoming even more important for folks, I think this is why people should be joining advocacy organizations because it is an unrealistic expectation for you as a business owner to expect that you’re going to be able to show up to every city council meeting, to every hearing at the state level and pay attention to all of the movement. But if you are actually finding trade associations, and I will take a sidebar to say joining a trade association, you need to find out what it is that they focus on. Right? Some are gonna focus on the national Federal conversation. Some are gonna focus hyper local, some are gonna focus on the state. Find the ones that are working on the things that you need help with. Right? And then join those ones and then get active because then you’re multiplying your, your effort, right? It’s not just you showing up at a city hall meeting and hoping that you move the needle, but you’re tapping into a network of a dozen other people who might show up there. So even if you’re only able to put forth two minutes for a hearing, like you have 15 other people given two minutes, it’s a half hour, right? So it’s just thinking about how can you multiply your effect? So yes, associations I think deal with the sort of the natural inclination of people to not want to get involved because it’s too much, too time intensive or they don’t have the money. But I would say that like the, the argument that things are going so quickly that you don’t have the time to pay attention is even more of a reason that people, people should be pulling their money together and getting involved in advocacy organizations because, you know, that’s what we’re focused on all the time.
Ed Keating:
Absolutely. Now, one paper I read probably within the last, maybe, maybe even been 18 months was about the unintended consequences of if cannabis is federally legalized. Like, it was like, “Yay! That’ll be great! That’ll be great!”, And this, one, author or professor pointed out sort of like, wait a minute, you know, what could happen is you wind up in a race to the bottom as, you know, all the cultivation, let’s say happens in California or in the south where warm all the time, the price goes down and then all these carefully crafted programs like the social equity ones, you know, sort of get blasted apart as, you know, no license caps, you know, free market and it all goes away and, and, and his solution was every state should probably keep some protectionist notion in for a while to let the market normalize itself. We’re probably a long way away from that Kaliko, but any thoughts on that, like, you know, if that happened, you know, hopefully it happens in one of our lifetimes. What could that mean for us as an industry and certainly for the work that you do.
Kaliko Castille:
I am very interested in this conversation. It’s not something that MCBA has like a, an official standpoint on, but taking my MCBA hat off for a second. I actually am somebody who probably thinks that interstate commerce is coming before federal prohibition falling. While, at the same time, I do understand that there are gonna probably be a lot of states, particularly on the east coast that are gonna want to implement protectionist policies to protect their local cultivators. Right? But I think at a once again, speaking as my individual advocate self here, like this is a we’ve always been headed here. We were always headed to the idea that we were setting up artificially inflated marketplaces that were based on siloed marketplaces and a federal prohibition that under a federal legalization model place is not gonna be the case when we were here in Oregon first working for legalization back in 2010 under the Oregon Cannabis Tax Act, the main proponent Paul Stanford, he had commissioned a study. He basically said that like cannabis in its un sort of adulterated, unregulated form should be about $12 an ounce, right? And so like when you’re talking about something that’s grown under the sun that could be grown in sort of the quantities that it is in northern California and southern Oregon, like, yeah, like the west coast is always gonna be naturally an export place. And I think that you’re gonna, you’re already seeing states on the east coast that are starting to introduce interstate commerce legislation to potentially start pairing those things up. So I think we’re probably gonna see that before federal prohibition ends. But I do think that the fight is gonna be on, how do you protect existing social equity programs, existing local cultures, innovators? While it’s still getting us to a place that’s like economically more sensible. Right? It is dumb for us to be setting up 100,000 square foot indoor grow facilities in New Jersey when you could be getting Northern California cannabis for much cheaper, right? So we are setting up, you know, economies of scale right now that just economically don’t make sense. So we’re heading for a reckoning no matter what. And I think everybody should know that this long term is an agricultural commodity that is playing in a consumer packaged goods environment. And so you have both the pressures of the a like the agricultural commodity, having the race to the bottom that you’re talking about. But ultimately, the way that you create value and sustain and create a lane for yourself is to think of it as a consumer package good. And think about how am I creating a brand that’s adding more value onto the actual flower I’m selling. Because the flower you’re selling is not that valuable, what you’re selling is the experience or the brand or the emotional connection once again to your product, right? And I think that that’s a lot of people who are trying to survive right now, think “Oh, I just gotta have weed on my shelves and I’m gonna be ok.” No. You’ve got to provide enough of a brand value to that, that people want to pay more for yours than the people that can get it for $5 an eighth. Right? Because here in Oregon when I drive around $1 joints, $5 a $30 ounces all day. And if that’s the marketplace you’re gonna play in, it’s gonna be really hard to be successful.
Ed Keating:
Indeed. Indeed. And I appreciate what you said about it. You know, essentially a highly regulated agricultural vertical. Like when I, when I first moved into space in 2015 and was explaining to all my former colleagues in the information publishing industry, they’re like, what, what are you doing? And they laugh and they tell a joke and then they’d get it like, wow, that’s really great. But, you know, is it that different than corn, soybeans and other things? It’s a row crop and it just happens to be very regulated. It sort of like tobacco is. So, I, I think your point a few minutes ago about CPG mixed with, you know, agriculture is right on the money and, and that is something that, you know, we’re gonna have to contend with. And I think you’re right that the interstate commerce is, you know, that that train has left the station or, you know, the smoke’s coming out of the sack there and it’s moving along. So I think that, that it is gonna happen and as often we see legislation sort of follows what’s happening in the real world. It’s not a leading, indicator in any way.
Kaliko Castille:
Well, that’s what I, that’s why I tell folks that, like, think it’s crazy to think that interstate commerce could happen earlier. Right? Because the way the California and Oregon bills were written is basically you need a coal style memo from the attorney general that says that they’re not gonna prosecute and they’re ready to go. Right?
Ed Keating:
So it’s like it’s a trigger bill, you know, it’s, it’s a trigger bill.
Kaliko Castille:
But the voters and the people at the state level have always been ahead of the federal, federal conversation. So if, if we stay in line with the trends that have always happened in this industry, the people are gonna lead and the other folks are just gonna catch up later on.
Ed Keating:
Yeah, exactly. No, it, it makes perfect sense. So, speaking of the people last week, we were together in New York at MJUnpacked the, the team, I was with thought the mood was kind of subdued. Although there was a lot of excitement from the New York people like, hey, we’re in this and we’re in the industry finally. What was your takeaway? Like, what, what was the vibe that, that, that you were catching there.
Kaliko Castille:
Yeah, I mean, I guess I can understand why some folks might, may call it subdued. I think that’s probably because this is not truly an open marketplace for a lot of people. And so some people are like, why would I spend the time to do it? But to your point, the folks who are local to New York and one of the things I took away from it is that people who are coming from the legacy marketplace in New York are pretty patient with the rollout of licenses right now. They’re all understanding that things are gonna take some time and they know the right people are, they’re trying to get their licenses in the right people’s hands. What I’ve heard a lot of complaints about is the people who are not coming from the Legacy marketplace who are upset that they’re not getting in quick enough, right? And so I think that that has led to this sort of subdued overall feeling of people like, oh New York’s not where we expected it to be at this point. So it’s just not as exciting, but I would say the caveat coming from the West Coast is I come from the battered and beleaguered West Coast where people are barely making it. We’ve got brands closing down, we’ve got craft growers deciding to call it quits. So when I go out to the East Coast, even that subdued vibe is more excited than the vibe I’m getting on the West Coast where people are just barely surviving. Right? Because like I’ve spent the last month on four different east coast shows and each of those have the, the overall a vibe that things are moving on the East Coast and that people are excited to get in. Whereas the West Coast we’re just, we’re barely making it and so…
Ed Keating:
No, I was gonna say what’s interesting though is hearing you say this, it makes me think of what you said earlier is that you or somebody needs to tell the story about those people in New York who are happy with how this industry is rolling out. And a day in the life of somebody who is protected by this because all we hear about is what a cluster it is in New York and it may be for some people who have better access to media, but maybe for some of these potential license holders, which is only one cohort, it might be a good story that you know, this is working out well and yes, it’s slow, but we want to do it right. So maybe there’s a challenge there where you can bring together together Thunderstorm with with your other work to help the state do a job of getting a different story or narrative out there.
Kaliko Castille:
You know, I definitely had, I had a chance to speak with some friends over at OCM recently and, and suggested that that’s really what they do and they, it sounds like they are already in line with trying to do some of that sort of storytelling narrative. And I do think that like, regulating bodies in particular could do a better job to your point of actually doing this storytelling because they’re the ones who are like, have the budgets to do these public service education campaigns and that sort of stuff. But once again, just slapping a billboard on a bus and calling it good isn’t gonna be enough if you’re not explaining to people why they should actually buy from a legal marketplace, right? Rather than, you know, supporting some random, shop that’s on the street corner that’s not, not testing their product and you don’t know what it is that they even have in their bags.
Ed Keating:
Yeah, I mean I had to explain to so many people on the floor because I’m an East Coaster that, yeah, none of those places you went to were legal. I mean, there’s only a handful and you probably didn’t run into any of them and they were shocked, like, really? like, yeah, really. So now, going outside to New York, what are your thoughts on, you know, has the industry hit bottom yet Kaliko or are we there? We still have ways to go because, it’s definitely been challenging for, for, you know, the industry as we see it as we go to these trade shows.
Kaliko Castille:
It’s hard to say that the, industry has hit bottom because that it’s, I think there’s so much macro conversation in the macro economy right now about, have we hit bottom? Right? Like, is the macroeconomy gonna go farther south? Because if we were to go through another massive recession, I don’t know, the cannabis industry has hit rock bottom, right? Like we’re coming off a few years of being deemed an essential business where people had disposable income and we’re spending a lot of it, you know in the cannabis industry and now seeing some of that peter off and people starting to sort of lose revenue and that sort of thing. So I don’t think that we’ve hit bottom. I think that anybody who has gotten in this industry over the last three or four years probably had more rose colored glasses on than those who have been in it since pre 2013/2014. Because I think those of us who have been in it for a while, always knew this was a long game. You were never gonna make money until federal prohibition ends and understanding how federal legislation works its way through Congress. That’s gonna be a while. Even, even with all of our efforts, you know, like, and one thing I would just put a, put a, a stat on is, you know, I talked to people about people complain about 280E. Right. It’s about worth recently. We found out it was worth about $5 billion to the industry. The alcohol industry got a tax break under the tax break under the tax or Trump Tax Cuts of 2017 that amounted about to about $5 billion. So equal to what 280E was the alcohol industry spent over 20 years and $300 million to pass that piece of legislation, right. So I like to just plant that seed for people in the cannabis industry, that say things aren’t going fast enough to get them to understand that cannabis A) is not the number one priority for people in Congress and 2) is not investing the amount of money in advocacy that other mainstream industries have to invest in order to exist in a system that is rule by money, right?
Ed Keating:
So thanks for yanking us out of our green bubble. But you’re absolutely right. You’re absolutely right now. Looking forward any trends that we should be looking out for, you know, things that, that, that you see that are kind of top of mind. You know, either from an MCBA standpoint, ThndrStrm, or even perhaps politically.
Kaliko Castille:
Yeah, I mean, I think that one trend is I I actually think that New York is setting a really important, important precedent for states to come in terms of choosing strategically to roll this out in a slow way, and make sure that it is social equity folks who are getting the licenses first. I don’t think this is gonna be the last time we see that even despite everybody who is complaining about sort of the rollout, I do think that like that is going to set a precedent that will start to see a trend because this is something we’ve been MCBA and other stakeholder organization have been working on for quite some time. We should be centering those who are most disproportionately impacted when we’re rolling out these stuff. So I think that that’s going to be a trend that starts to sort of, you know, catch on the other thing I would say is that it’s not a trend line so much as when I was in DC over the last couple of weeks, taking some meetings on the hill. It’s very clear that people in Congress are now almost laser focused on Safe Banking. And so the industry would do really well to start figuring out like, how can we be champions for incremental change even when incremental change doesn’t feel like we’re getting naturally everything that we want, right. Because I think one thing in losing the Safe Banking debate last year and not seeing it passed is like we stare down the barrel of what it could look like if nothing happens and we’ve got to wait several more years, right? And this could be the very, very real possibility that we get something or nothing done. And so I think that’s just something that the industry has got to start taking heat on MCBA is doing everything we can to improve the bill and make sure that we are getting social equity provisions or justice provisions added to the language. But at the same time, I think our industry has got to start getting more politically sophisticated in deciding when we’re deciding to say no. And when we’re willing to be having pragmatic and nuanced conversations to get to a yes, because whether it’s Safe Banking or conversations at the state and local level, we as an industry can’t can’t be seen as petulant children who are only one about not getting the stuff that we want and are not willing to accept the political realities that other people are dealing with on the other side of the table and make sure that we can meet them where they are. And I think that that’s something that’s not a trend line, but we would do really well as an industry to start thinking about how can we become more politically sophisticated, and start to make sure that we are getting as much as we want when we can get it, but not, you know, not throwing the baby out with the bathwater either.
Ed Keating:
Excellent. Well, I couldn’t think of better words or wisdom to end on. So Kaliko Thanks so much for joining us today.
Kaliko Castille:
Yeah, thank you so much for the opportunity. Obviously, for all the work you guys are doing at cannabis media and I appreciate that you guys have worked with us to get some of that social equity data into the database as well. I, you know, I obviously rant and rave about you guys as much as I can to everyone, but I really do appreciate that you guys have been a, a partner with us on that. I think it’s important for us to actually be able to take a look at, you know, where are their social equity, applicants and licenses and really important for people who are operators who want to do the right thing and wanna have more minority operators on their shelves. They can use tools like the Cannabiz Media Database to actually figure out who are these people and they reach out and try to get put them on your shelves because I think it’s really important that diversity is not just about ownership. It’s a really big portion, but it’s also about supplier chain diversity hiring in so many other sort of ways. So appreciate the work that you guys are doing to help, help move that ball forward.
Ed Keating:
Well, I appreciate the the rants and raves there. So, so thanks very much. I’m your host, Ed Keating. Stay tuned for more updates from the data vault.
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- Source: https://www.cannabiz.media/blog/cannacurio-podcast-episode-52-with-kaliko-castille-of-mcba
