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[Music] welcome back to the four one one on 4/20 I'm your host Darrell Bowman I'm Harry Burrell smart it's our co-hosts with me and thanks so much for joining us today here and today we're here with Steve marks the executive director of the Oregon Liquor Control Commission and we're talking about many things but in this segment we're gonna be talking about well how much money is Oregon actually making and how much maybe are the people that are out there trying to start a new business doing how well are they doing well we've made quite a bit of money since its inception we're over 200 million in revenue the state since we've been in this where whet your three now not fully my interesting question because Oregon is noted for no taxes but now this is tax so is this one of the only things is taxed in Oregon maybe it's gasoline it is the one of the only retail sales tax at the point of sale and sure again there are some local taxes at the point of sale and OH Ashlin a couple places and communities but we don't have a sales tax that's you know we don't that's not allow you to pump your own gas and we don't tax sales I kind of liked it it reminds you of the 70s but so you're making quite a bit in there and then along those lines are you are you growing the number of users on a regular basis while you do this I mean not only I'm thinking users I'm thinking about businesses and our partners yes holders so in terms of the stakeholders and the market so licensees certainly yes business base is getting larger right we're 2,000 plus and licensees we have nearly 4,000 I'm using rough numbers they've moved up to applications and the system people apply it anytime or they can apply at any time as a flow-through we've probably had 160 to leave the system for various reasons voluntary startup and they go you know Violetta doubts and we move bet it in Oregon because we have talked about how we have an open system right a lot of competition there a lot of competitions I help drive down prices we have a great consumer market price is a great integrate because of our testing regimes kind of get normalized all categories of products from edibles and tinctures and concentrates and flour all growing marketplaces inside the system and Steve in preparing let's talk about licenses and preparing for today I did a little research and apparently you had a moratorium effective June 15th you talked about that you were overwhelmed yeah so a lot of things we're finding when we didn't anticipate the real thing is how much change there was gonna be in these original licenses we had through so relicense and you'd think once you have a license you're gonna go right yeah you weren't violating anything even though it's an annual license we did it there would be easy but there are so many business changes that we have to approve because if you get new investors we need to approve that right ground checks look people didn't build enough drying capacity they learned a lot those first cycle regular drying they need to build more capacity to dry or process or whatever it's so real ice ensures taking 80% of the time of initial licensure sort of an overall basis Wow and we had some limited staffing but it's very expensive to get licenses for people to do that I mean it's cheap in Oregon okay so just looking for cuts like five thousand and nearly five thousand a door as well and and and this is what the research showed was the 13 employees who were overwhelmed by the workload so yeah yeah but it's staffing we had limited staff and we were always behind the curve but we were getting people licensed rigorous really this relicense your issue or get jammed and then said we need to slow down if you're after the June time from June 13th I believe or 15th yeah after that one that you can't be sure there any specific things that take up your license for quite some time it could be over here specific things that caused in the relicensing where you know something that just hit everybody they want to wherever or was it just certainly everybody just saying I'm gonna grow what I'm gonna add new things yeah what was just that it was the constant flow of new entries right because people were still applying in yeah plus we had all these folks around doing business then now we needed to relicense that we're taking as more and more time pretty soon we said we got to focus on those ones getting real license those businesses we've already put in the business & Reinbold and take care of that problem and then we'll put the new ones on a slower pace now we don't have the authority to do like Washington's limited system we're not limiting the system this is not a permanent agency moratorium we have an obligation to work out all those ones you love catches up yeah the legislature may consider put in some additional controls to slow down or make money put more people in yeah well scores and the businesses don't understand they're not making all that money I mean I'm talking about you yeah do you have a sense of how the industry is doing is it is it like in any industry of winners and losers yeah there's there's definitely winners in use we got a very capitalistic rough-and-tumble marketplace right people have come in and I gave a speech before the saw a gun it says be well capitalized you're gonna have a lot of company you got to know what you're doing you expect to compete in Oregon's marketplace well now it's here and we see a lot of stress and strains of people that aren't succeeding in the market they're not getting the price on outdoor grow because we got such a supply of outdoor products inside the limited organ system right right that puts pressures on it as those prices go down or people aren't recovering for actually illegal behavior right pressure for diversion out of the system so you could recover some of your costs you knows you're bailing out of the industry or trying to build or trying to hoodwink your way by us to keep continuing in it and obviously those pressures make our jobs as an enforcer a lot tougher but the industry's having real strains the good news is is there's some capital consolidating around industry some of this out-of-state investors and some of these Canadian trust funds and people packaging up and so you don't mind international very well I think it's helping some of those businesses in trouble recoup some of their funds in a legal way a way that respects the Oregon system and so we need to so so doing those business transactions is really important to us right to help people as much as we help them get in business to help them get out of business legally - it's very well more NASA is important for them Steve what our research has shown a summa it's the same here but a lot of the players in the industry to put it kind of lean there they're not the best business people that that's not why they got into the industry that's not what wakes them up in the mornings we see it in other sectors yeah ecology and so on everybody starts out that way right there's no different than your business I don't know if there's a question there but I'm sure you're seeing this well yeah just say yeah that's absolutely true and you know you think about systems and system research right 10 percent of the system's always a problem for you no matter how good it is right and this one we get people that aren't business folks you know you've spent a lifetime not being in regulatory structure being free stirs outside that yeah and you've got a much more problem with educating so which we put a premium on educating them about how to work the cannabis tracking system how to do the right wise how to make controls how to file the paperwork how to be n - we've invested a ton in education practices doesn't it does a part of our mission doesn't the regular business because in the regular business market we I mean we did it shows biz tech talk for six years and talk about business and technology on a regular basis and eighty percent of businesses that startup fail within the first five years yeah and are you see something similar yeah I think it's I'm gonna know that much because market was pretty lucrative for the early adopters that got in torsos yeah but and they had capital and the problem is this this limited market right where you're in now your license now you can't move your product any other way you got to find a way inside our system so we gotta figure out ways that you've got the new market available you've got to market us and you know let you take that one of them yeah is recreational but one's medical and what's the differentiator between the two it with regards to revenue streams and or licensing streams well revenue we don't tax medical product okay okay that is interesting yeah and medical product can be given away for free the old medical system was based on sharing for free and then maybe selling another part of the quantity into the medical retail system must be able to take donations because somehow you got to make some money yeah you know yeah I mean they always say that it's hard to live on so you know that's the indictment of the old medical system of Oregon was well how did this really happen how did you share for free grow for them and a lot of those going out the back door and financed by the gray mark and last question before we in this segment of money if you can talk about how do how do you get paid how did the how did the stakeholders interact with the banking system that kind of thing in the state of Oregon so nothing but difficulties there with the regular banking system that are all nationally and it's federally illegal banks don't one on the federal banking regulatory structure it looks dimly on cannabis businesses that particularly touch the cannabis even to the cent your state agency banks have difficulties oh my god you're taking a little bit of an issue there as well the good news is in Oregon we had some real help in in Washington kind of got in front of this curve because we've all watched Colorado do their gyrations and maybe try to create a state bank and they did about 12 kinds of iterations of options I'm trying to get financing and we all sort of saw them not get anywhere right credit unions really sort of filled the void and Washington had an easier time initially getting some banking in place the good news is sort of translated in Oregon and I think we've got three credit unions now in it they are using our cannabis tracking data to help with their compliance they're filing the suspicious activity reports but we're need to do that for cannabis - going up and so those are getting filed and so there are expensive accounts oh yes there is we heard there's banking there is some available to them which makes it much easier for them and for us and the good news is we really facilitated this and the legislation we passed because we said we asked for the opportunity to share our data directly with financial institutions and that's in large part what made this positive so as part of that you obviously there's a banking issue but just for the fight to finish how much is that it's actually still took Emily still coming in in cash I think the preponderance of its coming in we know we don't take we don't I take in the fees and a lot of times we get paid at or 5,000 okay credit cards Department of Revenue which collects the taxes note yeah they're collecting a lot of cash I don't know you used to be in eighty percent wrong yeah I don't know what it is today so in other words there's a lot of opportunity for change and to again address safety yes thanks so much for this there we go thank you okay we'll be right back after these short messages