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Muscle-Building Workout and Diet


[Intro music]
Howard Glassman: There’s the Midas Letter orchestra, and we’re making our way through
another show. What a pleasure to welcome back a semi-regular,
you know him. He’s the founding partner of CBI Capital
Management: Todd Harrison, thank you very much for taking some time with us today. How are you? Todd Harrison: I’m well, thank you. How are you? Howard Glassman: Fantastic. You know, I was just – I have a couple of
things open here, and I want to talk about some of the stuff that’s happening in the
markets. I know it’s been kind of a smelly day, but
I love that you’ve written some books. One of my favourite titles: In Business, it
Pays to be an Animal, and in Life, it Pays to be Yourself. What does that mean, exactly? Todd Harrison: That’s what you want to talk
about with cannabis stocks taking you on the chin today, I’m happy to talk about it… Howard Glassman: Just very quickly, I thought
we would warm up with that, and then we would talk about cannabis stocks. Todd Harrison: Good, it just means stay true
to who you are, stay true to yourself. All you have is your name and your word, and
you do the right thing long enough, people will eventually take notice. Howard Glassman: That’s very interesting. I just wanted to – because here’s the
thing, Todd: we can get right to cannabis stocks, but I think it’s good that people
know that you’ve written some cool books, that one included. So let’s talk about some of the stuff. As I mentioned, the market’s kind of in
general, not having a great day, and specifically, weed stocks are kind of smelling. Todd Harrison: Yeah, well, I mean, both the
stock market and cannabis stocks writ large have had pretty amazing first quarters, so
I don’t think some backing and filling should shock anybody. I don’t think necessarily anything has changed. I don’t know, from the market, you know,
right here, 2800 on the S&P as we’re taping this, is a bit of an inflection point, but
you also have quarter-end in a couple of days, so that’s certain to cover in price action. But with regards to cannabis, you know, listen:
if you find the right names, you’ve got to use price to your advantage, and days like
this lets you backfill into some names that maybe have gotten away from you. So that’s what we’re looking at. We don’t see much that has changed our thesis. We’re still heavy US names, we’re still
heavy biotech. We’re a little lighter Canada, just because
of a few of the valuation disparities that we’ve talked about in the addressable markets
we see. So it’s just go along, get along, loose
grips on the handlebars today for us. Howard Glassman: And are these the kind of
days when you advise people just to take a little less emotional look at things, as opposed
to, you know, seeing numbers maybe a little softer? The first quarter, as you mentioned, was great
for a lot of sectors, cannabis included, especially after the last quarter of ’18, which was
putrid. Are these the kind of days where you just
ask people to just be patient, or – Todd Harrison: I don’t ask people to do
anything. You know, for us, you know, as we look at
some of these names, a lot of our core exposure, we have three to five year horizons on, and
we’re less worried about the news flow on any given day versus the price action. So we try to just trade around our core positions,
you know. A lot of them are MSOs, a lot of our US names
have had great quarters, you know, and certainly some backing and filling makes sense here. So like I said, you know, we still see the
asymmetric opportunities on the horizon across a number of different names, and a lot of
mis-priced merchandise as sort of a function of the opaque nature of the cannabis market
right now. And these names and the lack of Wall Street
coverage is really creating some opportunities, so we’re looking for those. But, you know, certainly, as we look at this
volatility, it’s nothing new for anybody that’s in the space for any amount of time. Howard Glassman: Well, and the reason – I
know you’re not recommending this, but you know, a lot of the people that are watching
the Midas Letter are looking for any clue as to when they should or shouldn’t take
action, and I guess that’s what I was kind of asking. Like, you know, these are kind of the days
where maybe sit on the sidelines…you’re smiling, you’re like, I don’t know, Howard,
what kind of question is this? Todd Harrison: Well, everybody has a unique
time horizon and risk profile, so you know, anybody that’s out there saying you should
buy this or you should buy that without an understanding of time horizon and risk profile
of their audience, I think, is doing more harm than good. You know, I think there’s great opportunities
here, you know, across the landscape, if you sync your time horizon and your risk profile. Keep some powder. Understand they’ve just had a monster run,
and certainly as we look out, you know, over the next three to five years, I think there’s
still a lot of movement left in these names, a lot of onboarding, so to speak, to portfolios,
as more understanding about cannabis and about the wellness and about the efficacy and about,
really, the use cases – not just about getting high, but I’m talking about the non-euphoric
use cases, the industrial use cases, the consumer use cases, and the medical use cases, right? Biopharma. Most people don’t even think cannabis biotech
is a sector, yet; we think it is. Howard Glassman: I love – you know what,
I love that, and it’s something that I’ve thought a lot about and interviewed a lot
of people on my other show about the idea that when legalization was on the horizon,
everyone giggled and thought, Oh great, now we can get high, and I was like, What? Everyone’s already getting high. What I knew, and what you just mentioned,
and we’re going to get to Walgreens, is, I knew that the big push in all of this was
when an – and what’s the phrase you used? The non-psych –
Todd Harrison: Non-euphoric. Howard Glassman: The non-euphoric use. And I used the example of Shoppers Drug Mart
here in Canada, but Walgreens, you’re going to tell us that they’ve just announced,
like a lot of – where formerly it was a pharmacological play, there’s going to be
this huge influx of cannabis nutraceuticals, whatever that sector is called. And you’re going to tell us that Walgreens
is adopting this model. Todd Harrison: Oh, I think everybody is going
to adopt this model. You know, again, denial, migration, panic:
I think we’re starting to see a migration, not only on the consumer side – we saw CVS,
obviously, and Walgreens now – but I think you’re going to see more of an adoption
across the financial side. Black Rock, I think it was last week or this
week, these weeks are all starting to forge together, but their words that they’ve started
to take positions in some of these US operators. So if that’s the case, I think we’re much
closer to the migration, then, than even we thought we were. But that’s going to happen, banking reform
is being debated right now as we’re taping this. We don’t necessarily expect any surprises,
but certainly this is going to be a process; this is going to take time. I think if you have the right time horizon
and the right risk profile, and the right approach to this, you know, you look at days
like this, you look at the delays, like we saw in New Jersey and maybe New York, as opportunities,
right? The longer that this drags out, the more pressure
is going to be on these names; but if you believe that this is going to change and this
is going to go through a critical pathway, and this is going to go through a regulatory
pathway, and banking, and the clinical trials, and all told, this is going to be adopted
by society, then again, the best days are in front of us, right? I mean, we anticipate there’s going to be
a large amount of cannabis hedge funds, a large amount of cannabis ETFs, a large amount
of cannabis, you know, products out there, and they all have to buy these stocks. So we’re getting in front of that. We don’t, you know, claim to know when that’s
going to happen, but we do think it’s going to be over the next 12 to 18 months. Howard Glassman: But if you think about the
growth opportunities in terms of just cannabis as an item, it isn’t just as we said, it’s
not about getting high and giggling; there’s this whole, you know, non-psychotropic, therapeutic
use. But a lot of people when they first heard
about legalization, equated it to alcohol. And the mistake in equating it to alcohol
is, they don’t serve alcohol as a therapy in Walgreens or CVS or Shoppers Drug Mart. So there’s this whole huge, therapeutic,
CBD as a – whether it’s fighting anxiety, migraines or Parkinson’s, there’s all
this stuff. And what you said there about all the various
steps to make it – I don’t even know if the word is legitimization and the corporate
legitimization of cannabis as a product. And that’s kind of what I think is interesting,
not only as an investment, but as a consumer. Todd Harrison: Well, you touched on two points. Number one, you know, CBD is all the rage
right now, but it’s also important to remember that’s one cannabinoid, right? THC is another cannabinoid. CBN for sleep, another cannabinoid. CBG. There’s hundreds, right? So that story still needs to be told in the
marketplace, right? But you know, you talked about cannabis as
a product. I humbly disagree. Really, the cannabis in hemp is ingredients,
right? And those are being ingredients that are being
worn to everything from cosmetics and vanity to industrial use cases like hempcrete and
animal feed, to medicine, right? And if you understand the science, and that’s
where we really try to focus our energies, because we follow the science. And the science is telling us that cannabinoid
wellness is a viable alternative across a range of indications, and we say an efficacious
agility, right? And this is impact invested. This is going to help ease suffering, and
the side effect profile is de minimis compared to what Big Pharma is peddling out there. So this is, you know, we’re on the right
side of history, here. It’s bumpy for sure, but the frontier usually
is. But again, and this is the first time we’re
talking, but we’ve talked on this show a lot about how this is, you know, this is a
30,000 year conversation. Cannabis has a relationship with humanity
across cultures, across different, you know, continents…it’s all through the lens of
health and wellness. In the last 90 years, some politicians have
decided that this is a gateway drug and this is terrible for society, and the facts just
aren’t there, right? And there’s people out there still trying
to peddle this story that this is this and this is that, but follow the science. It’s going to take us to where we think
is going to be a secular bull market that’s just taking shape as we speak. Howard Glassman: Just a couple of things before
we let you go. I know that Cronos Group was downgraded by
Canaccord Genuity from Hold to Sell. And why? Todd Harrison: Well, I mean, their valuation
to their assets is just – we wrote about this on Twitter two days ago – it’s just
not there. I mean, they have a great biosynthetic arm,
they have obviously Philip Morris or Altria mo. behind them, but you know, at the end
of the day, you need to have a footprint. You need to have some sort of metric. And because that’s listed on the NASDAQ,
similar to Tilray and even, some would say, Canopy, you know, it’s become a beacon for
institutional investors who need to check a box that, the first thing they check is
a liquidity box, right? So it’s a self-fulfilling migration. As people want cannabis exposure, they’ve
reached for Cronos, they’ve reached for Tilray and Canopy. But as more names come on – CannTrust is
a name we own, they report tomorrow – as more names come on NASDAQ, Village Farms another
one, I think investors are going to do the work, analysts are going to do the work, and
they’re going to see better relative values, mis-priced merchandise, inefficiencies in
the market that are going to be solved for when Wall Street adopts this writ large. So there’s still those opportunities, but
again, you’ve got to do the work. And I think, you know, Cronos is just – you
know, there’s no there, there, from a valuation standpoint that you could point to other than
the fact that it got a great, you know, a great investor in their back pocket. Howard Glassman: Well I think it’s interesting,
and I’m glad we had this conversation – it was great to talk to you about it, because
I am fascinated from just a guy in the street basis in terms of where the growth in cannabis
is, and I don’t think the average person yet, especially in Canada, realizes, has delved
into, the variations and machinations of this industry beyond a psychotropic get high and
watch Netflix. And as you say, there’s so many – I love,
I wrote this down: efficacious agility, is that right? I love that. Todd Harrison: Yeah, well, we think so, and
we think the science is going to prove that through. And I’m not talking about pain, appetite,
nausea, anxiety and stress, right? You know, we have, you already have an FDA-approved
medicine for epilepsy, for childhood onset of epilepsy. We’re real keen on this brain cancer trail
that GW has, we’ve been talking about it for a long time. But if you understand the science and the
role of the endocannabinoid system in regulating neurotransmissions, and how ubiquitous of
a network of receptors the endocannabinoid system is, and the ability to use that network
as a retrograde pathway to wellness, and be able to target receptors with specific cannabinoids,
it’s fascinating, right? And that’s the part of the story that gets
us excited, because nobody really knows it. There’s a concentrated – there’s a handful
of people in the world who really get it. That’s going to change, and we’re seeing,
you know, Oxford University last year launched a curriculum, and they’re popping up. So you know, this is happening right now,
as we speak. Howard Glassman: Well, absolutely, there’s
that level, but at several levels below that there are people, whether it’s Oxford or
other huge institutions running, are starting to gather information that wasn’t available
before because now it’s kind of out of the closet in terms of people sharing their use
of cannabis. And now we’re going to find out the many,
many ways we don’t even consider yet, or haven’t considered, that it will help us,
again, beyond just a ‘now it’s legal, we can buy it without worrying about going
to jail’. Todd Harrison, what a fascinating character
you are. We started with a book, and now we’re buddies. Thank you very much from the – he’s a
founding partner of CB1 Capital Management. Todd, thanks for joining us today. Appreciate it. Todd Harrison: Thank you, thank you, have
a good day. Howard Glassman: All right, you too. Take care.

2 thoughts on “CB1 Capital Management CIO on Pharmacy Chains Entering Cannabis Space

  1. Howard Glassman, better, I would like if you talk more specifically about specific stocks, I don't want to know about his book. I would have liked to see specific questions about Cura, Harvest, Acreage, CWEB etc. maybe Medmen and Ianthus , and all the major large cap MSO American companies Major news about changes to Banking laws, the Secure and Fair Enforcement(Safe) Banking Act is being voted this week. and how it affects US companies, that was the missed question I would have liked asked. Please stop this business about getting high….. not necessary, most of us investors are not users, more homework and more specific questions would be appreciated by me. If you interview Todd Harrison again, please be more specific. Every investor is well aware that this is not just about getting high and giggling, get high and watching Netflix, nix that, no serious investor thinks that. But overall much better job, keep up the good work. Harrison is really knowledgeable, please get that knowledge out of him!

  2. US legislation is beginning to grease the rails and the biotech (including fuel) has yet to blossom, so why panic? Take the long view.

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