Episode 123 – California’s Cannabis Crackdown with Cantrip CEO Adam Terry

In this episode, Cole Preston sits down with Adam, co-founder and CEO of Cantrip, to discuss the latest developments in California’s evolving hemp beverage regulations. Adam’s own product, Cantrip, made an unexpected appearance in a state press conference, and he shares his thoughts on the surprise and its implications for the hemp industry. They discuss California’s proposed restrictions, compliance challenges, child-resistant packaging, and how these developments affect both businesses and consumers.

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The auto-generated transcript is available below.

all right Adam I guess I’m going to enjoy this hemp beverage while I still can got their Bluff punch Pop I so this is a this is a cannabis operator in the state of Illinois they actually have a social Equity license and they’re funding their social Equity license through their their hemp operation now oh that’s super cool does that say 50 migs yeah this one is 50 migs so it’s just for me right um but there are uh 10 mgram 4 mgram uh drinks as well so they’ve got you know dosages for all sizes and on that note you know I want to just give a plug before we get into uh the the topic the subject matter of today uh for you um folks go to drink cantrip outcom they’ve got awesome drinks of course you must be 21 years of age or older to order uh once again drink cant trip.com Adam you wanted to say anything uh to introduce yourself or cantrip yeah we will check your IDs at checkout so please expect that yeah I’m the uh the co-founder CEO of cantrip uh longtime operator in the you know medical marijuana adult use and now hemp spaces and uh you look forward to chatting with you about the insanity that is dealing with hemp laws in the United States yeah yeah absolutely thank you for sitting back down with me f uh Adam I really appreciate it folks if you want to follow Adam I’ve got his Twitter on display right here or X if you call it that um yeah like you just said there was some Madness today I’m displaying on my screen right now I was was quite stunned you know I knew this press conference was coming up uh but I was stunned to see right here you can see a can trip product on display um for folks that missed the press conference I know that you know you mentioned you didn’t watch the whole thing either but can you maybe get a highlight of what’s going on in California right now yeah I mean the the really short version is that um just like if the whole story the California legislature ever since total wamore launched temp beverages in uh I think back in March late March earlier this year the legislature has been very mad led by congresswoman named agar Curry who is then they tried to pass a bill called AB 2223 which would have um restricted THC and hemp products down to 1 milligram um that was moving pretty handily through the legislature until uh Governor Nome introduced a proposed amendment which would force all hemp products with THC uh in them through dispensaries which effectively killed AB 2223 because it’s like an Godly complicated proposal to be honest when you start to if you know anything about how dispensary products are sold it’s a very complicated Prospect to try to get basically non-metric THC products into the metric system um figure out how the taxes are going to work particularly with you know how excise tax Works in California which is possibly the most complicated tax code in America uh which is saying something um so this bill got killed because of what Nome did and frankly I thought he kind of did that on purpose clearly I was wrong um because now they’re pushing for essentially an emergency rule which will ban any hemp product with I and I this is this is in the in the text detectable amounts of THC and they’re also defining THC as anything basically with the letters THC in it so thco Delta 9 Delta 8 Delta 10 all of these things are going to get lumped together and if there’s any detectable amount at all then it can’t be sold in the state of California at least for 180 days under an emergency rule during which time I’m sure they’ll try to pass a more permanent rule which seems like it’s going to be done administratively and not through the legislature which will probably be more effective at getting done this is what they did in New York just about a year ago but you know imagine any CBD product with any detectable amount of THC in it uh is no longer legal as well so this is going to cause some pretty big ramifications in California we’ll see if anybody decides to file a lawsuit over it I would expect somebody to but I won’t be doing it because frankly I just don’t have the I just don’t have the heart at this point yeah to keep doing every single state like this but um you know my opinion is that this is short-termism it’s it’s pretty virtue signaling it’s uh it’s not actually going to address the problem because if you actually look at that table I don’t know about the gummies in particular but every beverage brand on that um you can actually see our Blackberry lavender poking out in the back there too but oh yeah Endo I know for a fact is only sold at Total Wine in California uh and so it look and North is sold at Total Wine so I’m pretty confident they walked into a total wine where they do card people and only sell to adults pulled them out and said look at what the children are purchasing and so uh you know I don’t you know eventually California will come back to selling these products I believe in liquor stores and grocery stores but maybe it’ll take a couple years to get back there yeah I’m curious that’s what I noticed seemed to be the main theme of it was that kids could go in and like you say if if this seemed to start with Total Wine it’s like places like that so let me just put it this way the only question that I actually think was asked about this topic at the end of this press conference was about and you couldn’t really hear it but they said something the effect of isn’t that kind of on the retailer if your concern is about children getting it you know because that was the whole that was the foundation of it all you know um curious what’s your take on that because that really seem I mean you seem to be leading the charge in many ways with your ID verification and everything else so it’s like obviously you can meet you know their concerns right where they are we also use uh on on our products child resistant Lids which you can actually kind of see the yellow poking on the top of that root beer lid cuz briefly show that again if you don’t mind yeah briefly we had yellow lids and now we had a phase where on our lowest dose products which is like these five milligram ones we only use standard Lids which people have argued are child resistant I don’t know if I agree with that but the um we because of Tennessee and Georgia wall we just switched everything back to those so right now everything we produce is child resistant Lids that’s the hilarious part about this all of the products that Total Wine which are where a lot of these products are sold are not I mean are they child resistant most of them aren’t um Can trip is a little bit unique in that we do offer child resistant Lids uh because part of it’s coming from the marijuana system part of it is they’re reclosable and we sell multi- serving products so by Minnesota state law all products above 5 milligrams have to be multiple serving and they have a cap at two serving so to me it was just logical but we also still sell in some places where it’s compliant 50 milligram beverage like you add there and we put the reclosable lids on for that purpose too because we see those more like spirits and those I fundamentally believe need to have some sort of reclose ability on them whether that’s a large format bottle or a small one I mean there’s folks like you who will just drink the whole thing and I think that’s totally fine but the um you know it’s just for me it’s it’s it’s something that just makes sense from a product design perspective yeah um and so you know I don’t necessarily advocate for that everywhere but I do think it’s it’s just good common sense I mean as far as like what uh you know this is clearly not you look at this press conference it’s like it’s put together to like some staffer I think put this together to basically solve a problem that maybe the original Bill author really wanted something like this maybe there really was pressure but you know the fact that none of these products if you actually you know if someone reporter was able to dig in and find out like exactly how this all came together definitely none of those products came from like a bodega where there’re selling the children I almost certainly I don’t know about the gummies probably not the gummies but everything else came from Total Wine and uh they certainly would have been CED if they looked young enough and you know if they had really looked at they would have seen that child resistant lid you know ultimately this is like a not this is not the highest priority Communications point that the governor has ever had in his life or in his career and so you know they had one question about this actual program afterwards and immediately reporters switched to his most recent you know vetos on other bills because ultimately this is really high stakes for people in the industry and people who like these s but is incredibly low stakes for everybody else and honestly no one most people don’t super care about this but it’s going to be a real disappointment for consumers across California Who currently purchase this I mean these are not only available in Total Wine but in BevMo across California which is one of the biggest uh you know uh uh alcohol retailers in that states door Dash has been there uh in California gopuff and we work with a lot of legitimate Distributors who want to be doing this and so like everybody who wants to do this who will do it so long is like it follows the law which exists right now which is ab45 that everybody is going to pull their products but the people that they’re really worried about selling products to kids you know and gas stations in bodegas are not going to pull their products because you may have noticed there’s no actual um enforcement mechanism in this in this thing other than tph can go in and pull pull products but they don’t have the enforcement agents to do that across the state of California they’re relying on the fact that pry much every brand you see on that table is going to voluntarily pull their products or their Distributors and retailers are going to force them to um and you know they’re just the only things left will be what children purchase um in stores where children were going anyway so it’s just another I mean this happens in every state where they try to ban these products it doesn’t actually solve the problem as opposed to Minnesota which passed a bill taxing and regulating these products putting them in like or sord specifically and then use all that money that they pulled in uh to hire 35 Regulators who went or inspectors who went into stores in January this year and have multiple times since to look at labels to check coas on what websites and actually issue pull product orders for any brand that wasn’t compliant and they’ve done that now several times um it’s caused Distributors to actually ask for coas up front I have distributors in California who have my entire chain of sourcing going back to the original plant too because they wants to keep that on hand when dph cracked down a few months ago so the Distributors are becoming de facto self-regulators as well and you know ultimately these bands aren’t wellth thought out policy but people are honestly like you know I I really believe Gavin Newsome is a smart person I just don’t think he’s being advised well and I I’m certain that this issue is not important enough for him to dig in on his own and you know he’s just going to go with whatever the local staff or says is more most politic right I just don’t get the uh idea that it’s like on one hand he talked about what he did with cannabis and that they made this Progressive decision to legalize it but on the other hand he’s talking about these products as if cannabis is so dangerous that it can only be sold from these certain places what’s your take on that do you agree with like my Takeaway on I mean I think but I I you know like I said I didn’t hear all the audio but this is like part and parcel of how people view cannabis I mean this is ultimately the the fan wager that we made as activist basically 15 years ago which just to say cannabis we understand it’s been illegal for 80 years and we want to get it legalized so we’re going to agree that it’s so dangerous and needs to go into these specialty one product retailers that have you Fort Knox level security on them because God forbid a child know that it exist you know and since people have built their entire companies around that system now it’s really dug in I mean ultimately I I don’t like to speculate on like what people actually want all that much but certainly are very high taxes on cannabis and California and you know the C the hemp industry has actually been begging to be taxed in California specifically maybe even on par I think we could probably survive that uh with the other stuff but like you know the taxes aren’t going well a lot of cannabis industry who sells through dispensaries doesn’t like it so there’s political pressure there there’s the bill author who feels swindled by hemp industry over ab45 from the bill author for ab 2223 so there’s probably pressure there and I just doubt that Governor really cares enough to actually like have a sensible policy on this because to him it’s just like well it’s weed to goes in dispensaries and that’s kind of the attitude we see in a lot of these adult youth states where you hemp products are being sold I mean Missouri for example just you know the governor issued an executive order by strange coincidence after accepting tens of thousands of dollars in donation from uh from cannabis companies but unrelated a few days later he passed an executive order banning all intoxicating hemp products in uh in Missouri and then you know they’re aggressively trying to enforce that even today um whereas like you know Georgia is going through a public comment process to come up with the right regulations and guess what they don’t have adult use cannabis dug in there either and you know the the major I think medical operator there is probably going to get in the hemp game in that state so ultimately this is like we’re in this weird state of flux because I I truly believe by this time next year uh once the farm bill is settled every major cannabis company is going to be making a hemp product or another and that’s why everything is going to swing back around um but right now you have like half of them doing it and half of them fighting it and it’s just creating this like really nightmare Escape of like I can’t sell this in basically most liberal states right now which is weird to say right U but I can sell it across most of the South um you know it’s it’s like you know we can argue about what happened in Florida too is a whole other kind of issue but um ultimately like we need sensible hemp regulations in this country and I haven’t really seen the left or the right come up with sensible ones because most people just don’t understand it well enough and fair you know that’s kind of a I think a fair position to be at because why would you know this much about hemp if you were anybody outside this industry because it is really really nuanced thing that you have to understand that we created two classes of the same plant in this country um and it’s just with ungodly complicated laws yeah yeah again we we we don’t have to get into it but I’ve got friends or and I know people that are in some of those southern states that are like this this hemp stuff should be illegal and I’m like but wait a minute it’s the only way you’re able to acquire THC legally but whatever yeah yeah you know the thco ruling from yesterday right askco in North Carolina which is like distinctively just reaffirms that the federal definition of hemp does include basically anything that’s not Delta 9 THC which really is like a big win for the thca community but you know what the first email I got this morning was was a marketing email from MC neutral saying hey federally legal D9 thco uh because they’re immediately selling it again and it’s just like I get it maybe it is legal that doesn’t mean you should sell it I mean right um You thca I think is a whole different question because right you know we have Millennia around basically weed because it is just straight up weed you know there may pesticides involved testing probably needs Improvement But ultimately that’s just weed whereas thco was like largely been something people started create like 10 20 years ago um before hemp and have like really flourished under the farm bill and just like we don’t know what it does to people it’s not just thco it’s like all of these you know different acronyms it’s like to me that’s really no different than a research chemical and I don’t know if I’ve said this to you before Cole but like honestly if I could find enough steps in synthesis between uh uh you know CBD and methamphetamine would that mean that methamphetamine is legal so long as attempt arrived I don’t I don’t know I don’t think so but like maybe it crosses into new territory once it becomes a new controlled substance I it’s hard for me to say but like that’s where it’s like I don’t I’m not really in the uh in the mood ever to give the DEA ammunition because I don’t really care for that organization but at the same time it’s like we should probably like I’m a big fan of trying to self-regulate and create sensible regulations I don’t know that like selling thco is one of those I could I could have a more I think thoughtful argument about delta8 THC or other things that are you know Delta 8 occurs in the plant I’ve seen it as I used to be an extractor and I’ve seen Delta 8 come out and extracts as high as like 89% sometimes and so like I know that it’s there and that’s legitimate you know but basically you know I’m in the opinion of like phyto canabo largely probably fine I still think we should prove safety and efficacy around things that we claim um but you know anything that’s synthetic you know and doesn’t exist as a phyto canabo what Minnesota classifies as artificial um should be uh sorry Minnesota classifies phyto canabo manmade as artificial but anything that’s synthetic which does not exist as a phyto canabo I think we should be really um circumspect about you know creating selling ingesting but whole other argument I guess yeah no I no friends in the hemp IND like from Americans for healthy alternatives but no I mean uh I I’m pretty well right there with you and that’s the the page I wish we could all get on which is like you know Delta n thca you know uh the like like you your company correct me if I’m wrong you’re very specific about being naturally derived THC and your uh and I just wish everybody like it I get I get a little um like because it’s like I agree with everything you just said and everything that people say about thco and these like sprayed nugs and everything but I I get mad when they lump that in with thca it seems like that’s they’re all too quick to do that and it’s like hold on hold on like I think there’s the problem too is that there are hemp operators that are all too quick to do that too like I saw uh my brother-in-law had like a thca vape is what it was claimed to be and then I actually went to the website where they had the test results and this is the first time he showed me one of these things cuz he’s had other stuff before that actually went to a test result at all because a lot of them don’t um but the the test result was like 25% thca and then 50% Delta 8 THC but nowhere on the package should to say Delta 8 and then there was no batch code there was just like a single for a flavor so like the problem like the hemp operators also create problems for themselves by like you know not being kind of sticking to a standard um so like it would probably be easier if all the stuff that is claimed to be THC actually was but some of it may just be like CBD flower sprayed with Delta eight and like you know I feel like you can tell because I’ve seen these sprayed flowers they look like hey right I’ve extracted better stuff uh that we would get from like old like when I was in California extracting like we would get you know 300 keys or so weeken under prop 215 like some of that stuff was like as as as brown as it comes and like I’ve seen worse stuff sold at hemp shops and it’s just like I don’t understand what we’re doing here but I also especially don’t understand why um some hemper operators are calling that safe and legal access to cannabis in Florida um whatever I mean the fact is we legalized weed in 2018 by accident and we’re just going have to deal with that yeah yeah and you know like that’s the thing I really think that what we’re talking about those products like yours will proliferate because people will have experiences along the way I truly believe if you get swindled into trying one of those thco products like you’re going to hopefully it’s not too you know again you know you should know what you’re buying and it should be labeled accurately and everything else like that I truly do believe that um but if you still somehow make that mistake like you’re going to learn just like we do with alcohol like I learned that high proof alcohol not for me I learned that in college you know what I mean um I mean some people will some people decide that they do like it and they’ll keep using they don’t have terrible ramifications but that is kind of a choice that I suppose as long as you aware that this is like basically an untested research chem well if you want to keep buying and consuming it because you like what it does that’s kind of up to you but right that you know to most people that’s you and I talking about radical drug policy which is you know drugs like I mean if people want to use heroin until they die like I me that’s in my opinion that’s their business but you know that’s you bad politics for a lot of people so um you know it’s really it really is like a lot of it comes back to what people just make the argument about for the kids and like well we should prevent people from accessing for vacis things and parents should have those conversations with their children I have a you know I have a a one-year-old now and he’s just starting to get into stuff all the time I have to be really careful about where I leave my C trip around um and the lids help but also like even if it you know even if the lid’s closed or the can is unopen I’m not going to leave that within his reach so it goes on a counter it goes way up there it’s the same for the you know by the way those sun D vodka selters if we bring those into our house because those exist too or you know the cleaning products you have in your house I’m sure you don’t let your kid get close to have a bunch of child resistant locks on everything you know it’s like my whole life is child resistant right now yeah um so it’s a you know it’s it’s just like we need we we’re so desperate for a sensible policy in this country on on cannabis it’s like you can’t really find it anywhere anymore like not from Whole cloth like we banned the hemp products in Massachusetts but what did that do that took products like canant trip off the shelves guess what I can still go down to a store on the other side of town and find you some Skittle like Skittles branded you know Delta 8 THC gummies and Delta 8’s been illegal for here for two years because again it’s we don’t we didn’t we don’t have any money to do the enforcement of these things and they had a hearing a couple months ago right before they passed this like or before the abcc issued this giant warning and most of the Regulators who were saying we should pull these products from shells were also saying we have no resources to pull these products from shells like I know how I can solve this problem for you all at the same time it’s just but we lost that battle here and like I said firmly I believe all this stuff will come back around because people love cannabis and people love accessing things easier so it’ll just it’ll take years but once the the farm bill is settled again I’m hoping that we’ll see Federal legislation introduced separate from the farm bill that starts to put some guide rails around on hemp yeah well I know you got to go here in a second but just a few more questions for you uh just curious um do these bans when they happen in state levels are they able to ban online sales I mean they do put it in legislation but I don’t know how they would ever enforce that I mean like what are they going to do show up your home or they going to a they could audit your business records I did hear once about Oregon doing a sting a couple years ago where like a regulator ordered it and then issued a citation for the uh the brand that shipped it to them so they could do that you know New Jersey’s current bill proposes like a a $100 then $1,000 then a $10,000 fine for every violation of selling them online but like is that going to bother the people who are selling these products on Amazon just as quote unquote full spectrum hemp um probably not um you know I know a lot of Brands still ship to like Connecticut where you know that’s not you’re not allowed to sell stepman to Connecticut either but like how how is the state going to figure that out I do not know um but you know ultimately if it were to move in the direction of alcohol uh you know you would probably see a directed consumer man which really why I’m not building as much around the DTC uh part of this business but um it’s a hard thing to to you know to to turn down entirely when it’s it’s still allow it’s just hard to make a profit on but that’s a whole other question yeah I asked that because I know in Illinois they were talking about doing a ban and um by the way it looked a lot similar to today’s if folks want to check it out I’ll put the links to my coverage same thing they did in New Jersey you know suzan short um I believe was testifying even though she had just been fired by the ncta or something like that I don’t know the details of that but she she had a cancer product and she had a bunch of those and it’s like you realize all those products are legal in the first place just on copyright issue right like are not legal and the people who are making those you think they care about what Gavin Nome says at a press conference no but like I care and my Distributors care and my retailers care and we’re going to pull those products but anyone who’s selling trips a Hoy is not going to stop because you said this can’t be sold at Total Wine right to your point um I will just show you what happens if you’re a licensed cannabis company and you uh do something like that there you go I had that one quick for you you know I mean like was is this over the strein name or is this yeah exactly this so this was in 2021 they were uh suing over the name and some of the logos as well but you know like your to your point if you are licensed under the state then there’s a mechanism of enforcement to deal with copyright but if you’re if you’re not you know licensed then yeah you can just buy packaging I mean it’s not illegal and like on the licensing know i’ love to leave you with this which is that like here’s what sensible policy and California could and should look like create a cap for how much THC can be in a hemp beverage I would suggest 10 milligrams just like they have in Minnesota have every brand manufacturer retailer and distributor register for a license pay a fee and have collected you know 10 20% tax on it and then hire a whole bunch of inspectors go shut down everybody selling medicated skills and trips a Hoy across the state and look now you have a thriving economy that by the way because I mean if it was just beverage that was allowed you wouldn’t really be taken much away from dispensaries who barely sell beverages in the first place check out some headset or public data it’s less than 1% of sales gummies are definitely a trickier issue but you know uh uh I’m not going to advocate for for Banning anything in particular but at the end of the day like there’s certain things that uh are in dispensaries that are important to those operators and there’s certain things that are not and peppers is one of those things that are not yeah two two quick questions I hope this first one’s quick why the dosage cap oh I don’t think a good dosage cap is actually like sensible policy I just think it’s good politics Good Start yeah yeah I mean at the end of the day I don’t I think there should be a serving size cap I don’t think there should be a beverage cap I own Distillery I could go online right now and register a 355 m can of vodka with you know no reclosable kindell so my my you know like my what is the best policy you shouldn’t put a milligram cap on it but it protects cannabis operators a little bit better because then they don’t have to worry about competing with you know higher dose products outside of the market and frankly like total wine for example won’t sell anything above 10 milligrams so you’re kind of in a in a state of affairs where like a lot of regulators are trying to get good boy points by or um you know operators trying to get good boy points by only selling up to 10 milligrams but I don’t think it’s actually good policy people just drink more beverages or which is I guess not a bad thing but a lot of times they don’t want to like I think you should allow basically beer wine spirits versions of these things you just have to have it clearly marked and maybe add maybe require more child resistance around higher dose products maybe require more clear labeling or you know God forbid and like a volume requirement but there’s all sorts of ways to cut that um but at the end of the day it’s like not the most politically popular thing particularly in California where the industry is so entrenched to be honest when they were going through a 22 2223 negotiations the concept that You’ get any more than 5 milligrams approved was um was basically thrown out of hand so we thought we’d end up probably a five milligram cap gotcha and and last question again hope this one’s quick uh were you surprised to see your product I I should it was actually I mean it’s not shocking because I guess like like I said they’ve been targeting total wi since the beginning if you look at agar Curry’s initial TI raade on the the assembly floor earlier this year she had North Canada there who’s is also on this table and Mary Jones who uh was also sold at Total Wine so they were part of that they they’re literally going to Total Wine because they’re so mad this major retailers doing it because Cal they have the most locations in California and you know in many ways they’re Pioneers in this space and I have a lot of respect for our partners there and they’ve done a great job at uring compliance and by the way they go very much out of their way to make sure everything is super clear in store about what you’re buying if they put something in like a glass case for example they will put extra tape on the outside to delineate make sure you don’t confuse a WI bottle with a THC beverage total wine goes so far out of its way to make sure that it’s selling only to adults and and only adults who want the products so that nobody is confused like it’s unbelievable anyone want to attack them over that um but the reason but I was surprised to see canant trip right there especially because they had so much Endo around it and you know they’re a great brand and I know they’re only sold at Total Wine in California at least according to the founder um but like to see cantrip nestled there was very funny because it’s just you know I I follow National politics for all sorts of non-cannabis reasons and with Gavin knew so so much in the news lately I’m just like is one of the coolest things about consumer packaged Goods that it’s not the most positive thing in this case but you touch so many people that you never expect like Gavin Newsome has now been in the room with my products like and so I have had you know some very very very minor impact on his life and like you never know how many millions of people you’ll touch when you start putting out products and because I formulate all of those and I worked on the brand it’s like it’s personal to me that way so that was actually kind of cool in a way that is not so positive but hopefully we’ll get a more positive news conference where Gavin news will get up say these things are loud now and chug one on camera hell yeah I like it that’s a good note to end on well Adam thank you for joining me today on such quick notice to talk about this and uh folks check out drink cantrip tocom I’ll have the link in the show notes thanks so much cool yep thanks Adam take care bye

The Cole Memo