Episode 3 - Cannabusiness Unpacked (with Cory Lake)

Welcome to another enlightening episode of Northern Lights! We dive into recent Minnesota cannabis updates, starting with the posting of the OCM Director position and the new Seed FAQ dropped by the Department of Agriculture. Unpacking the program's specific rules, we discuss potential opportunities this development presents for the local cannabis market. Then we sample local flavors, Blazed Maplesota (Modist Brewing x Doc Dabs) and a Strawberry Crunchy Bar (Retro Bakery). We then dissect potential retail businesses, exploring the various license types - Micro, Mezzo, Retail, Combination, and Event - and examining how local control can limit these operations.

Joining us for an insightful chat is Cory Lake from Lake Group Insurance, highlighting the importance of insurance in the cannabis industry. He explains why insurance is more than just a monthly expense but more of a way of thinking about your business to help it succeed and grow.

Lastly, we end with a conversation with Stephen Eigenmann about the upcoming CannaConnect 02 event on July 29. Tickets are still available, so get yours today!

Join us in this episode as we continue to navigate the fast-paced world of cannabis in Minnesota, offering insights, news, and a taste of local cannabis culture.

Links from the Show

• Minnesota Cannabis Advisory Council - https://commissionsandappointments.sos.state.mn.us/Agency/Details/332
• Minnesota Marijuana Seed FAQs - https://www.mda.state.mn.us/sites/default/files/docs/2023-06/Marijuana_seed_FAQ_3.pdf
• Lake Group Insurance - https://lakegroupinsurance.com/
• Cory Lake | 612-251-9191 | clake@lakegroupinsurance.com
• CannaConnect - July 29th, 2023 - https://cannaconnectmn.com/
  • Discount Code “college” for 5% off your CannaConnect ticket!

Transcript

 Hello, hello, hello. Welcome to another episode of Northern Lights Podcast. I'm your host Tanner today, joined by my co-host, John. Hey there. Welcome. Welcome. It's good to be here. Welcome, everyone. Back to another episode of Northern Lights. We're happy to be here. Happy to be talking about the Minnesota cannabis industry.

Happy to be. Filling you all in on some pretty exciting news here going on in our state. Things are, things are finally there. Close. Absolutely. We're definitely getting closer to legalization being a real thing. You know, I was checking the countdown today. We're recording this on. Thursday, July six. We are just a mere weeks away from legal cannabis in Minnesota, which is pretty cool.

There's been a lot of pretty big updates here in the state. The biggest one just to follow up on something we talked about in the last episode is the director of the office. The Cannabis management position is now officially posted. Those interested in applying for that job can go find that through the state's website.

You can submit your application. It does have a pretty high bar. You do have to be a state regulator for eight years. You have to have knowledge of cannabis, cannabis policy. But I think it's going to lead to some pretty cool stuff. Yeah, I'm really excited because as soon as that director gets hired on, that's when the rulemaking process can start in earnest and we can.

From these, I guess we've been getting spatterings of information and starting to get a lot of concrete stuff of what legalization is going to look like here. Yeah. And it all starts with the director. So those applications that's open through the end of July, people can apply for that. That panel should be interviewed that first little bit of August.

And then according to the timeline that the state has put out, it looks like by the end of August, the governor will likely have his pick. So pretty exciting stuff there. Those that are interested in hearing some of our potential thoughts on who it might be, go check out the last episode, episode two.

We talk about some women in the Minnesota cannabis industry and cannabis nationally that could really make some great leaders of that new state office. And John, you're going to be applying for that position, correct? Oh, no, no, no. After my eight years of experience. But I am very excited. To see who applies and how transparent that process is going to be.

I know the governor is going to cast a very wide net, but I am still expecting someone from within his executive branch right now. Yeah. Like, I don't expect an outsider. No, perhaps even someone who already works for the state of Minnesota. Doing cannabis policy, medical cannabis? Maybe, who knows, who knows.

More to come on that. So, if you meet those qualifications, if you are interested in helping to lead Minnesota's cannabis industry, the state regulatory side of it will get that application and submit it. And we should add, if you just want to advise that process there are 51 positions open up for the Cannabis Advisory Board.

And That's open to experts, but mostly anyone with deep knowledge of cannabis, cannabis business. And that's going to be, I think the place to get the most community input would be through that advisory council and they'll, yeah, I'm excited. I'm excited to see who's applying for that as well.

Absolutely. Yeah. We're going to put a link to both that director position and that advisory council in the show notes. So check. for that. If you're interested in helping to guide what that policy looks like, like John said, there's, there's 51 seats on that committee. Definitely some pretty good input to get from the community.

So if you have expertise to share, be part of that. The other little bit of news that we wanted to talk about is that the department of agriculture has now put out some guidance on how we can go about selling cannabis seeds here in Minnesota. You know, adult youth cultivation at home is less than a month away.

People are gonna start growing if they haven't already. And Minnesotans are wondering where they can go about securing their seeds, and Minnesota businesses are wondering how they can legally sell them. So the Department of Ag put out this FAQ just at the end of last month, helping to inform people of some of the things they need to know.

And I think it created some pretty big questions. So to answer what we do know, the Department of Agriculture has created this license type for a seed laborer, someone who buys or grows their own cannabis for seed and then sells that seed with the proper identification on it. So it needs to include what kind it is.

Which in this case it needs to be identified as marijuana, a term not really used in Minnesota law anymore. Needs to include the variety, the lot number, the weight, package date, the label's name. It also needs to follow testing requirements the state has put forward. That in terms of cannabis is pretty stringent, I mean.

In one case, it's requiring people to have up to a pound of cannabis seed just sitting around for testing. But also that cannabis seed can't be sold more than a year after it's packaged. So, people are going to be wasting a lot of cannabis seeds here in Minnesota. That sounds like. One thing I do like about this though is Seems like the barrier of entry is pretty low to get in, even though there are a lot of barriers once you get in.

A lot of regulations, I guess, but 75. is pretty reasonable for someone to at least see if they can be a cannabis seed labeler. And we've seen a number of people sort of explore the idea of starting a seed bank here in Minnesota. So I'll be curious to see how this labeling affects some of those businesses, affects people looking at getting into this industry, and how they affect people growing at home.

Yeah. For now, people can continue to buy cannabis seeds as they have for years. But in terms of selling them in a store in Minnesota, I think more to come from the states on, on how about that exactly would, what happened. So, yeah, so two pretty big pieces of news. We're getting closer to seeing what legal cannabis is going to look like here in Minnesota, but more to come on both of those.

So later in this episode We're gonna be talking a little bit about the different licensed types that we have But first we have a new cannabis product that we want to sample Now We've got a couple different products that we're gonna be trying today some from our friends over at love is an ingredient two businesses that we both know, you know, really well.

Full disclosure, I am an employee. Oh yeah, definitely something that's important to disclose. And we also both know Dr. Dabbs, He's, he's an advisor for the Cannabis College. So, we are perhaps a bit biased in the products we're trying today. But I also was really just sort of looking for an excuse to drink this blazed maple soda And I think today is the excuse for that is us giving it a try and my brain's biased, but my mouth isn't yeah Exactly.

Exactly. So we'll start here with some of these awesome Dr. Dab blazed maple soda and then we'll move on to some and what I love about these even before you open them is just like the long label. Yeah, dr. Dabs himself Right in the middle, with a nice sun-like thing around him. And then he's covered in different colored maple.

I can't even tell that I think some are maple and some are cannabis? Mhm. Leaves that make a nice little rainbow effect around him. It's just a very pretty thing to look at. And what I love about his logo is you know who he is the first time you meet him because his logo is his face like that. That actually is Dr.

Debs for people that don't know like that could be a photo of him. But yeah, I'm pretty sure it's based off a photo that he turned into an animation. I love it. I love it. Yeah. So this is a soda that he released last month with Modest Modest Brewing Co. over in Minneapolis. It's Blaze Maple Soda, so here's what they say about it.

If you've ever wanted a soda that you can dip waffles in and also get a little bit high, then we have a perfect drink for you. Teamed up with Dr. Deb's Healthy High to create a refreshing maple soda with a kick of THC in it. So, I really like this. If you look at the ingredients, what I think is cool about it is its water.

It's maple syrup. It's hemp derived Delta 98 C and it's citric acid. And that's that. That's all that there is in this. It is as simple as can be, but also I think as we'll see in just a minute, delicious. So I'm going to go ahead and pop this one open here. You do the same. Awesome. That's so good. I'm going to say what I said the first time I tried this product. It is like drinking candy. Yes. Oh, I can absolutely agree with that. But without the sticky feeling at all. I feel like if I eat a bunch of Starbursts, my mouth gets sticky, but I can drink this and it's just water and tasty, tasty maple syrup.

For those that have tried the Maple Candies, definitely recommend it if you haven't. They really did a good job of sort of making the same flavor, the same profile, but in liquid form and it's, it's really just a drink version of Of the candy, which is awesome. Each of these cans has 10 milligrams of THC.

So two servings of five milligrams per container. But very delicious with maple and THC oil from the state of Minnesota. So it's all local. Wow. That's cool. I love that. So those wanting to give this a try, head on down to Modest. You can get it at their taproom. There's also a number of different stores that you can buy it in.

So check that out. I'm gonna take another sip here. Blazed Maple Soda.

Now, I've yet to try dipping a waffle in one of these. I wonder. People can sign up for our Patreon and watch the video of us dipping waffles. No, no, no, just kidding, just kidding, just kidding. Alright, now onto our next product. So this is Retro Bakery's Milk Chocolate Flavored Strawberry Crunchy Bar.

Now, for those who are a regular listener of our show, you'll remember that in episode one, we got to hear from Mason the story behind these crunchy bars. And now we actually get to try it, which I'm pretty stoked about. Wonderful child safe packaging. Very important. Sometimes it feels a little Tanner safe.

Yeah. All right, here we go. So this container is 20 milligrams total with two crunchy bars, each with two five milligram servings. So I'll take one of these. I'll give that one to you. You can see that line right down the middle telling you where that serving size is. I like to break these first. Wow.

All right. One thing I love about these is the simplicity. It is just wafer. Icing wafer chocolate. And it's real strawberries in it. Wow, that's really good.

Sampling products in the audio format is sometimes a bit difficult because you just get the sound of us chewing for a minute, but know that we're both Really enjoying this. Chocolate and strawberries. They go so well together. So I've had the original crunchy bar way back in the day when Mason first started coming out with those, we've been able to sample some over the years.

We've been able to sample a couple of different flavors. I've never had the strawberry one though. And this is really, really good. Cool. So retro bakery, Dr. Dabs. Modest, all Minnesota local brands, all making some pretty high quality Minnesota cannabis products. This is cool. And I really love that, yeah.

Though we've slowly rolled our way into legalization with hemp and then low dose, we still have a lot of just electric Minnesota brands who yeah, really want are taking every chance to make something so yummy. Absolutely. Awesome. So we'll have these to sort of sip on through the rest of the podcast.

But before we jump to our interview with Corey a little bit later from Lake Group Insurance, we wanted to break down some of the potential business licenses that will exist here in Minnesota under that adult use market. So back in episode one, we talked about the new law that passed House File 100. That created all of these business licenses for cannabis businesses.

And then we said, we'll come back to later covering what they actually are. Well, it's later let's talk through some of the business shop business licenses that will exist. But today we're going to focus just on the ones that are going to be selling to consumers. So, we're not going to talk as much about cultivator licenses.

We're not going to talk as much about processing, manufacturing licenses. We're going to focus mostly on the people that are selling to individual consumers. Direct to consumer. Now, the reason that we're doing this is because our program has more license types than any other state's cannabis program. We've got a ton.

The goal was to try to prevent large businesses from coming into the state, taking over the entire cannabis industry. We really want to craft a consumer market here in Minnesota and the different license types are supposed to help with that. So while not every license is allowed to sell to consumers, there are many that can, and we want to explore what they are, talk about what it's going to cost to sort of get that started, and then also explore what those businesses are allowed to do.

Now, the one that we're going to start with is the one that I'm sort of most excited about that exists in our industry, and that's the micro business license. Now, John, this is something that you and I have worked on going back years, looking not at just allowing businesses to open and do whatever they want, but really creating what are the rules that will support good businesses that we want to be part of our industry.

And we sort of got that with micro business. And I, I, I really love the microbusiness starting with just the application fee. Flat 500 lets you be fully vertical with one retail location. Absolutely. I think it's no other, I don't think many other states have such a low barrier of entry. And I don't know, I'm excited to see what people do with these microbusinesses.

And there's no license fee. It's literally just that 500 application fee. You're submitting your application. When the state comes back to you and says, yep, you've checked the boxes. You've done what you need to do to start this business. You then have your license going to other states where there's hundreds of thousands, millions of dollars invested beforehand.

People won't have to do that here in Minnesota. And it starts right here at that application fee, which is pretty cool. And just to be clear, like we, there's still regulations that these micro businesses have to follow. So, you know, incur costs along the way, but having that low fee means that they can invest in their store and not have to invest in, you know, paying the government.

Absolutely. So with that micro business license, if you get a cultivation endorsement, you'd be allowed to grow up to 5, 000 square foot canopy or half an acre of outdoors. And that canopy can be tiered, so you can have levels of your 5, 000 canopy. And then the half acre outdoors will be very interesting in the state of Minnesota, where we have seven, eight months of winter.

Yeah, I'm, I'm curious to see how exactly that goes about working, but at least they allow it. It's interesting to see. And this micro business license isn't just, you know, the one and done. It allows people to really customize their business. So if you want to be able to produce edibles or cannabis products, you can get an endorsement for that.

If you want to be able to have on site consumption at your business, you can get an endorsement for that. If you want to get an event license, you can do that. It sort of allows you to create the business that you want as long as it stays within the confines of that micro business. So you can have a, you're, you can explore and see.

What kind of business do you want to be with a micro business? If your dream is to grow bigger, you can start there and really set that vision up. And that's why I love that we have such, like this low level of licenses. So for the micro business license This is probably the one that most people who are looking to get into the cannabis industry generally do without, hey, I really want to be a cultivator, or hey, I really want to be a manufacturer.

But if you just want to run a cannabis business, you can grow, you can process, you can sell. That micro business is going to be the way to go for most people, but if you're looking to do a little bit more, maybe that 5, 000 square foot canopy is not enough. Maybe you want to produce more. Maybe having only one retail location is not what you're looking for.

Well, they've created another business license type called mezzo business. So similar to micro business, mezzo business allows business owners to really customize their company to how they want it to look. If you would like to be a cultivator, you can do that. If you'd like to be a processor, a manufacturer, you can do that.

If you would like to operate retail businesses, you can do that. The only thing that you can't do as of right now is allow for on site consumption. Yeah. But mezzo businesses are pretty. Pretty open. It is a little bit of a higher bar to be able to reach, become part of it. Instead of a 500 application fee, we now have a 5, 000 application fee.

And if you are to get your application approved, if you get that license, you also have to pay another 5, 000 as a license fee, so. Already that bar is at 10, 000 just to be able to start your business to be approved. Yeah. Yeah. So definitely higher, but it allows you to do essentially three times as much business as that micro business does.

You can grow three times as much. You can process and manufacture three times as much. And it's not just one retail location, but now three. Yeah. And the most unique part about the mezzo business is you can also sell into the medical market. So you can't do that with micro, but with mezzo, you can have a part of your store dedicated to medical patients, so you can, yeah, you can sell both retail recreational and medical, which I think is a very good play for just the little pockets and little communities where, you know, medical companies, they don't see the incentive to go out there, but there are entrepreneurs who can start a mezzo business and Absolutely.

Yeah, it's a pretty interesting business type. Mezzo businesses would also be allowed to have event licenses similar to micro businesses. I think we'll see a lot of people coming in for this specific business type. Yeah, it's, this is where I see the bulk of Minnesota's craft industry coming from.

Just because, because of the higher application license fee, you're going to get people with either more experience or more capital that comes with experience backing them. And I think we'll see a lot of successes come out of these mezzo businesses. Yeah, absolutely. And then the one other sort of vertically integrated business that we have, it's not micro, not meso, but instead this sort of addition to the law near the end of that hearing process, this combination adult use medical license.

Now, let's be honest about what this is. It's a legacy license. It's a license for people that are currently operating in the state's medical industry to sort of not put new limitations on them, but allow them to continue to grow. They're allowed to have up to 60, 000 square foot canopy for medical purposes. So that's already four times that mezzo business size just for medical.

And they're allowed to apply for an additional 30, 000 square foot just for adult use canopy. This is going to be a huge license. Yes. And this, this is the two for one license where for every pound of rec they sell, they have to sell two pounds of medicine. Yeah, which I think that's just to even the playing field a little more so the micro and the mezzo businesses can't compete because a lot of these combo licenses will come from the like, like you said, legacy medical folks who already have a little bit of a leg up, which is why.

I believe that the legislators pumped up those fees so high because like, yeah, yeah, we're looking at a 10, 000 application fee, a 20, 000 license fee. These definitely get up there. It also doesn't go into effect until March 1st of 2025. So it's possible we'll see micro and meso businesses opening before these licenses are even allowed to be issued.

I think that's the goal. And one thing we didn't talk about. for Mezzo is that with Mezzo, you start with 15K canopy, but the office of cannabis management can increase that to meet the market whatever the market demands are. So it's a floor of 15, 000, which I thought was very interesting.

Yeah, that's a super important clarification. Thanks for adding that. Yeah, I'm, I'm excited to see what some of these vertically integrated businesses look like here in Minnesota. Yeah, it'll, it'll be neat to see. But there's a number of other license types that allow people to sell to consumers that aren't that vertically integrated model But instead are something different.

So they also created a retail license type Now this is an application fee of 2, 500 a license fee of another 2, 500 But it allows you to have up to five retail licenses throughout or excuse me five retail locations throughout the state of Minnesota Yeah, I think this will be awesome. These are what? I feel like people, these are your normal dispensaries.

These guys, they're not growing their own stuff, they're not extracting their own stuff. They're buying from those growers and manufacturers, and they're getting it directly to you. The five retail locations are, I, I think it'll be a good thing. I think it'll stop whatever monopolies may have arised, but I'm also, I'm interested to see how a lot of entrepreneurs are going to work their way around it because I know there're people who have five stores right now and they would like to convert all of them.

I was talking to a guy who runs a tobacco shop. He has eight stores. He wants all of them to be retail shops. I was like, you won't be able to do that with our law. So there. Maybe you can have one place where you're doing something else, but yeah, it's going to be a lot of shifting around for some folks.

These retail licenses and the delivery aspect is cool too. So now your favorite dispensary can just drop it off at your house. Yeah, it's really nice. Yeah. So a nice part about our bill. Some states have sort of had to wait for that delivery to kick in. We'll have delivery as soon as those businesses start.

Yeah. Start operating. So this delivery license again, a pretty low bar, 250 application fee, 500 license fee will allow people to buy from other cannabis producing businesses and sell them directly to consumers. And we should add for these license fees. They need to be renewed. I think it is every year.

Every year. Yeah. So it's every year. So. For your mezzo, it's every year, 5k for retail every year, 2500 the combo every year, 20k. So it's only the businesses that are profitable will be able to continue going forward. So we've covered micro, mezzo, retail, that combination. We talked a bit about delivery.

There are two other license types that are allowed to sell directly to consumers that we just want to address briefly. One is sort of already running right now. It's that low potency retailer. That license type doesn't exist currently in Minnesota, but those stores are, are running. People can go and buy those low potency edibles.

Now as of July 1st with that additional 10 percent sales tax but for only 250 application fee, 250 license fee per location you can get that low potency license to be able to sell those. Now again, just to clarify, that has not gone into effect yet, but when those licenses start rolling out, you will eventually need a license to start selling those.

And I believe those lower potency licenses can be combined with. The mezzo and microbusiness licenses so you can sell your high grade THC and your lower dose stuff for the current clientele who can buy them. And then the last license type that will allow you to sort of in a way sell to consumers and I say sort of because there's a little caveat added is this event license.

Now for a 700 application fee, a 750 license fee, excuse me, 750 application fee, 750 license, you are allowed to get an event. Cannabis license that allows you to have a cannabis focused event for up to four days. It allows you to have on site consumption. It allows you to sell at the event. But the one caveat and the reason that we said there was that, is that it does require you to have a separate license already to be able to sell to consumers.

So just by getting that event license, it doesn't mean you can now sell whatever you want. It means if you already have a micro, mezzo, retail, or low potency license, you can now sell your products at a different location, at a pop up event, just not out of your store. The event license, though, my understanding is doesn't grant you the ability to sell products.

You have to already have another license to be able to sell. It just, yeah, it allows you, like you said, to sell your products outside of your store in, like, for a certain event. Yeah, it has to be for something. And I like the event license a lot. I think a lot of people make good use of it, especially because micro business licenses are so low.

The application fee, it's like anyone can get. a micro business license, not really, really you. Then they can be an event person. Yeah. They can really only use it for events and just like to spend the rest of their time growing. Yeah. Yeah. I'm really excited to see how these events are dealt with. I know we're all looking forward to cannabis cups here in the state.

We're all looking forward to some of these really. Big cannabis facing events, and we now have the license site that will allow those to to happen. Cannabis retreats. Yeah So some other considerations before we wrap up the section that we wanted to address is that Individuals are not the only ones that can get these licenses.

Cities can also get these licenses. We'll have municipal dispensaries potentially Open it up throughout the state of Minnesota. And I feel like we should just touch a little on local control. Because we're talking about the cities. Cities can open licenses and they can limit what, how many dispensaries are in their town.

But they cannot ban them. But I'm pretty sure, correct me if I'm wrong, that they could just open the municipal shop and say that's it. Like they do with liquor right now. Yeah, if it was a local city control county that has less than that 13, 500 people, they can absolutely open that municipal license and say, this is the one shop that's allowed to operate in town.

And technically that's within their right. So it's sort of a, it can be, it's a sort of a shadow then where it's like there's cannabis, but it is run by your local government, not by local entrepreneurs, which. You know, people will see how they feel about that. Yeah. Yeah, definitely an interesting part of the market that I'm excited to see what it looks like.

And one more thing is these cities can, they can put in a study up until January. So theoretically. If we are able to get licenses next summer, summer of 2024, there will be. Cities will have the ability to prohibit cannabis up until January 1st, 2025. That is the last day a city can actually ban cannabis is January 1st, 2025.

And it's for studying. So they have to actually implement a study of cannabis while they're doing it. Well, I'm sure we'll see a lot of businesses facing cities that try to impose some of those studies. Something to look out for, especially if you're looking to open a business in your own community, is being aware of what your community, or at least your community leaders, think about your cannabis business.

So when we get back, we'll be hearing from Corey Lake from Lake Group Insurance, who's going to be telling us a little bit about what people need to know. Before starting the cannabis business, not only on the insurance side, but just small business generally. After that, we'll be hearing a little bit about CannaConnect, an event coming up at the end of the July.

But in the meantime, guys, keep looking at the bill, keep looking out for new notifications from the Department of Agriculture and the Department of Health. Because things are gonna be happening. Coming very soon, like, as they look for this director, they're going to crystallize. More and more what this office will look like and we'll be here to tell you but we want you to look it up For yourself as well. Very sure.

All right. Well, we'll be Are

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Head on over to my cannabis college. org backslash clones and reserve your spot today. Again, that's my cannabis college. org. Backslash clones, and we're back talking with us today is Corey Lake of Lake Group Insurance. Welcome Corey. Hey, thank you. I'm glad to be here. Absolutely. Thank you so much for being here today I'm excited to hear a little bit about your history We met back sort of during the process of house file 100 becoming law We went to a lot of community events together did a lot of listening sessions I've heard a lot from the industry and I'm excited to hear about your personal background because I actually don't know much about it.

So let's jump in here. Sure. So my history goes back to when I was about 16 years old and we'll sort of wrap this into a nice, neat little ball. I started actually in the audio industry. So I started in the car audio industry when I was about 16, 17 years old and then moved into insurance.

So I actually was doing insurance in my twenties. My father owned an insurance agency, so I worked for him for a couple of years. Now he specialized in more high net worth and larger companies. And as a 20 year old, my friends didn't own cars, my friends. So I ended up trying to sell insurance to my friends, parents, and going into midsize businesses.

And it was tough as a 20 year old to make that happen. My dream was in the audio space. Then I really wanted to be an audio engineer. I thought that car audio and home audio were sort of. Easier ways to get into it, and my fascination was truly in the study of microphones, audio reproduction speakers.

How does a microphone and a speaker reproduce a human voice? So that was the rabbit hole. I was down. And car audio was. The least expensive way to get into that. So I ended up going to work for a company called auto technology, which was a car stereo company specializing in high end car stereos. And that's sort of what launched my audio career from there.

I moved into some home audio for a little bit, and then I went to school for recording and engineering. And I ended up creating a recording studio right at the time. Computers were coming on board. So we were the last class to do a record and bias and learn how to repair a reel to reel after our class, they pushed it out into the hall and the computers came in.

So I was there for sort of the infancy of pro tools as the main software at the time. And you'll appreciate this a little bit, but so back then you could only record one to two tracks at a time. If you wanted to add an effect, you had to select a snid bit, just a piece of it. You had to listen to that over and over, and add your reverb.

And as soon as you liked it, you had to render the track with the reverb in there. And as soon as you moved to the next track and started recording, You only had one layer of undo. So you were committed to that. Yeah. I, and so it was an amazing time. So after that I went and opened a recording studio and I knew that studio rights were going to come down.

Because of technology and people being able to buy computers and people being able to do some of that's recording stuff on their own. So I created a guitar store up front and our focus was on high end specialized guitars. We were not selling Fender and Gibson and some of those name brands. We were selling products that were guys that had worked at the Fender custom shop, guys that had worked at the Gibson custom shop.

We had some stipulations where they had to be able to afford advertising. They had to produce a certain amount of guitars. They had to, they had to, you know, be a little bit farther along in their business. So we weren't just selling some unknown builder that could only make one guitar a year. They had to be able to produce some guitars.

So that sort of launched that. And what I quickly learned was that studio rates went from about 125, 150 an hour on average down to about 25 to 35 an hour. So I had to kind of pivot. I mean, that was my passion and I did lots of recording. The other piece was that I learned that when you're running a store.

You got to run the store. And then I was recording at night. So I was working from about nine in the morning to three in the morning. And I did that for about a year. And I was like, it's just not sustainable. Found a person to run the studio. And then I ended up. Learning everything there was to know about guitars and selling guitars and really did a stint in retail The first store was in st.

Paul off of 94 and Snelling and then we moved it out to Maple Grove and just created a larger store basically We did lessons repairing band instruments, basically a full encompassed music store at that point and about 10 years ago, I had the opportunity to sell it. So I sold that store and got to be a stay at home dad for a couple of years, which was amazing.

Absolutely amazing. And so after being a stay at home dad for a couple of years, my father. Now going back to my father who owned the insurance company asked if I wanted to try to go back into the insurance space. So I said, sure, I'll give it a shot. And that was right around, I'm going to say 2014 ish, something like that, 2014, 2015.

And realized that. I had a lot of connections and one, the entertainment space is not called on. People just don't call on music industry people. I mean, notoriously they're not big companies. They're not, you know, they're, there's just not a market for that. Most people are calling on machine shops or Bars and restaurants are a great example.

There's, you know, other businesses out there that are a little bit more attractive to insurance. So I was able to take the people that I knew the groups of people that I had been working with and just turn what I was doing from guitar selling and buying into. Selling those guys insurance.

Very cool. So sort of finding that natural bridge between what you were doing many, many years ago, sort of back to connecting that to guitar is the bridge between insurance and the audio industry. Correct. And we were talking a little bit earlier to bring this full circle, that first car stereo job that I have, that gentleman.

now owns pot shots in St. Paul. So I am now currently working on his insurance and he is back in space. So we've now been hanging out quite a bit. I see a lot of them and it's been a long time. But it's amazing how many people that I know have. Come around to this industry in one way, shape or form, and I guess talking a little bit about what ended up happening in the insurance space.

So I had been in insurance for a couple of years. We obviously had the two 2016 legislation go through and quickly. My musician buddies and people that were in the retail space started looking at the cannabis space and it was something that of course I had always had some fascination with and knowing and understanding retail and how it functioned made it a kind of an easy transition for me.

Even though I don't use the product, I have enough product knowledge, but more importantly, retail is at the end of the day. Retail is retail. I mean, you're selling a product. And how do you create that experience? How do you create that desire for people to come back and purchase from you specifically is something that I had been working on for 20 years.

So seeing an industry in its infancy, the other piece on the insurance side that made it so fascinating was it's a new industry, so insurance is always changing and in insurance, I don't think I've seen anything like this since cyber coverage where cyber insurance was very Wild West still is very Wild West people aren't, you know, it's constantly changing and it's constantly moving to be a part of something that was so in its infancy and to get involved in the government side and to get see this sort of, Grow from from nothing into something has been just an unbelievable experience and not one that I'll know that I don't think I'll be able to see again in my maybe AI, but I don't even know what we're going to do about that at this point, even on the insurance side.

So it's been. It's been a ton of fun and an incredible journey to get to where we are today both on a personal side from retail and understanding all of that sort of stuff, but also the insurance side, seeing something built from the ground up and trying to figure out. What the problems are going to be, what are the insurable risks that are out there?

And something that I will quickly say about the insurance space is that all those risks that we thought were going to take place have not taken place. So. Even the experts in the field talking to everybody and our 10 years of experience with California and Colorado, none of that stuff has really come to fruition.

Some things we knew about, there's going to be theft there's going to be those sorts of things, but other things, the product side, there hasn't been a lot there and which has been a major concern for, for most of the companies that are, are in the space is that, you know, somebody gets hurt using a product, how are we going to cover something like that?

Yeah, absolutely. So we can see a lot of parallels between being on the cutting edge of the industry in recording of sort of having to accommodate the changes that are coming about from technology, turning that whole industry on its head to now today of seeing the shifts that insurance, but also just cannabis generally is going through of going from this.

underground illicit market to the regulated insured market that we have today. That's really, really fascinating. So it's cool hearing a little bit about the history of what brought you not only back to insurance, but specifically that cannabis side of the industry which is not one that you hear much about, you know, I know.

Wraparound services are talked about in terms of legal, in terms of accounting, in terms of, you know, marketing and all of that. But I think insurance is really an underappreciated business component that people really need to consider when starting a business. Yeah, I would say there's two types of insurance buyers.

There's a few of them, but the two main ones are people that have never had claims. That looks at insurance as a bill, like a cell phone bill, which is the necessary thing that you have to do. And then there's other people that have had claims and have been through the process and have gotten made whole again.

And those people understand what insurance is about. The hardest piece, I think, for people to wrap their heads around is just the cost of what it is. The cost versus what they're getting. And if we look at something as simple as auto insurance, if you've had a car accident and you've been paying 200 a month for most people that have had an auto claim, if you do the math and you've paid 2, 000 a year, we'll say, which is probably pretty expensive.

And you've done that for four years to four, that's 8, 000 you get in a car accident. It's 15, 000 to fix your car and you get your car back to where it's right. That's a pretty good risk reward. If you think of those monthly payments or those annual payments and what happens if all of a sudden the risk reward is, is really there.

I mean, it, it, it functions on a high level. What's interesting and what. I think what people can look at today is what's happening on a global level. We've got a lot of catastrophic losses and we're seeing insurance rates go up and we're seeing this in home and auto specifically. Everybody is saying why we're seeing that is due to the catastrophic loss.

It's happening all over the country, but also all over the world. So we all pay for those losses in Florida, in California, the tornadoes that are happening. So that's really something that I don't know that the average person understands moving back to the cannabis space. We're not seeing a lot of losses and losses dictate insurance premiums.

So lawsuits and, and those losses and then those payouts really start to dictate what insurance looks like later on. And so we've been in this very strange space for insurance and cannabis now for 10 plus years because we're just not seeing losses and we're not seeing lawsuits. Interesting. So you use the example of auto insurance and anyone who has a car knows the reasons you need to have auto insurance.

Anyone who's been in a crash especially knows the reasons. But if I'm someone who's starting out a cannabis business, maybe I've never worked in the industry before. I don't exactly know, you know, I don't need insurance for my business. What would you say to someone who's starting a business and asking you, why do I need insurance?

Yeah, so it goes back to, to what we'll start actually, we'll start over a little bit. So the only legal required insurance you have to carry is workers compensation. That is a state requirement. If you have an employee, you need to carry workers comp insurance. All other insurances are voluntary, all of them.

So that being said, that makes it a very interesting sort of thing to talk about where you're going to get requirements from if you're leasing space. The landlord is going to say, you need to carry this insurance now for that space. The landlord is requiring X auto insurance is the same thing. I mean, does the state want there to be state requirements at the end of the day?

There's plenty of accidents out there where people are just uninsured. So you've got requirements and and then again, just the, the state mandated workers comp. And so your landlord's going to require you to have general liability and general liability is if there's. Property damage or if there's bodily injury, somebody slips and falls, something like that on your property.

So that's the baseline coverage I would say for retail. I mean, that's kind of your, your entrance way. The other thing that general liability helps with is if you are going to go and do a festival, you're going to be a booth at a festival, that festival. Generally speaking, we'll require you to have general liability insurance.

That's going to be your certificate. That's what you give them. So for most businesses, this is where we start. Okay. Yeah. We'll get you some general liability. The next product that I sell a lot of is going to be a product liability. And this is where the insurance companies have really Honed in on their concern that somebody's going to get hurt using a product which obviously tobacco would be the big one behind that.

Vaping products, another big one. We haven't seen a lot since we had that Minnesota lawsuit a while ago, whereas a lot of people were getting injured and there are Blowing up and that sort of stuff, but at the same stroke, that wasn't necessarily a good representation of Minnesota based product.

If they were all purchased overseas, they were being brought in by semi truck loads and it was absolutely, if anything, it showed sort of the harm of the illicit unregulated market. Less so sort of the controlled market. Absolutely. And I'm guessing that guy probably didn't have insurance. So that's the other one.

And again, the, you know, the concern for everybody is that and products liability is specifically based around the product. So it is again, somebody uses the product and ends up getting injured using that. product or or there's a third party. Something that I have been working on is sort of this. There is a debate of where we'll call it DRAM shop or consumption type insurance fall versus the products liability.

Okay. That makes sense. So somebody consumes a product And then something happens, where does that lie? I have gotten two answers and this is something that I would, I would love people to email, to call, to talk to me about both on the insurance side and on the, on the side, you know, on the what they're hearing from their current agents, because I've heard two, two things.

I mean, one, you really have to pick up some consumption type insurance. And others that product liability will absolutely take care of if you were to consume something and an accident was to happen it's been a very interesting debate but and just so. The listeners know all of these are independent coverages.

There are no packages that I'm aware of that really encompass all of these things. You can start with general liability, purchase products, liability. If you own a store, you're selling other people's products. You should have product liability. In insurance, there is this chain of custody and that law and the lawsuits will follow the chain of custody.

So it will start at the retailer, you know, where I bought my product. So I brought my product from here once to the first lawsuit who manufactured the product. Or who owns the products or whose label is on the product will be next and then maybe the manufacturer and then maybe the ingredient supplier after that.

Okay. So it can go through and usually they're looking for the deepest pockets, you know, who's going to and that's who they'll kind of hone in on, but everybody is going to have that duty to defend. And that's what some of this insurance money is going to end up being used for, which makes sense.

And we can all think back to sort of those early days of Colorado and Washington when we heard the news stories of reporters going and taking an entire chocolate bar or, you know, eating the entire pack of cookies and saying, oh, my gosh, I got so incredibly stoned off of this. This is a terrible product.

And I'm sure there are going to be people here in Minnesota that now that you can't buy edibles today, but come legalization, we'll go out and try a new product. And, you know, I'm sure as the shop, you want to be insured against any. Yeah. And what's, what's, what's been fun about that particular one is the sort of cannabis overdose is that people will end up going to the emergency room and they.

Tell you to go home and watch a movie and have a bag of chips. So there's usually not a consequence due to that sort of peace, but it is amazing talking to physicians and the amount of people that are coming in that have had too much. And then of course, you know, they're sort of their advice to remedy that specific problem.

So that's been there hasn't. We have not seen any losses in that space. I mean, bad times for people. Yeah. Uncomfortable times, but not truly any losses at this point that I'm personally aware of. Now I read as much as I can. And I, I, I talked to as many people as I can, but the losses have really been in theft and break ins and, and those sort of things.

And that's, Really been about it. Interesting. Okay, so that sort of transition nicely. I was curious. You've been in the space for a while now, sort of going back to just the CBD days, working through the edible days, coming up to legalization. What sort of have been some of the big, most common or pressing issues that cannabis businesses should be on the lookout for in terms of getting insurance or?

Yeah, yeah. So this ties in a little bit to my retail knowledge and something that I recently read about was a lawsuit over the smell. So this would have been a large growth facility. Smell is wafting over into a small city and the small city was like, yeah, we got, we're a small city.

We've got kids, we've got, and it smells. So, I mean, it was really just a remedy, a remediation sort of thing where they just had to. Get some filters and try to filter out that smell, but they did, they did create a lawsuit to stop that from happening. The other stuff has been, you know, really just break ins that sort of stuff which, and then you've, you, you are going to as all small businesses or large businesses deal with is employee theft, those sort of things, all, all insurable risks.

And then, you know, the other piece too, is just making sure that you have the appropriate coverages. And now again, it's, it's, I think for a lot of people, it's going to be a stepped process, but just making sure that whoever you're working with is walking you through all the steps to make sure that you are covered.

And this is the normal business coverage as well. I can, the insurance industry is of, you know, two minds right now. We've got the large insurance companies who are not interested in the space due to the lack of federal regulation, regulations, excuse me, regulations. And then there are these other carriers that are really just focused on the cannabis piece.

So having a good marriage between what would be considered to be coverages for your small business, small, medium to large size businesses, and then also adding in these cannabis pieces as well. The last thing you want to do is find out that you don't have coverage. Or a risk that you are, that's most prevalent in what you're doing isn't coverage or the roof leak, water pipe burst, and that just isn't a part of this cannabis piece, or you don't have coverage because you're in the cannabis space, but you have the wrong the insurance company isn't in that space.

Okay. So as a small business owner, how do you go about sort of avoiding some of those pitfalls? Is it just working with someone individually that sort of knows your business and is willing to make sure that you have the protection you need? Yeah. So, yeah, the answer is yes. I mean, obviously, if you can work with industry experts.

That's the best. You have to ask questions. Insurance is a long process and it shouldn't be easy. I, I, as an agent, my job is to really learn everything I can learn about your business, how you're functioning, where you plan on going, kind of your vision and to assess those risks and to present you with as many solutions to those risks as I can.

If you decide to take them or not, really, it's not that, you know, I mean, you can afford what you can afford, but we try to give you a holistic sort of idea of where you are today. And where you need to be tomorrow the great thing about insurance is that we can do products line by line. You don't need to either buy an entire package or not buy an entire package.

We can do general liability today just to get you up and operating and then we can bring in products liability and we can bring in. Professional property, all of those sort of things. I mean, some of them we do try to package together because we realize that this is your business model. If you need to, we can sort of get you from point A to point B, and it can be kind of a slow, slower roll type process as well.

But we need to know the whole picture at the end of the day. So it sounds like your approach is less like, Hey, you know, we'll come and work for you for a little bit of time. We'll get you what you need. And then. You know, call us again in three years and we'll get you updated. But more like, Hey, we're going to be part of this team.

We're going to help make sure that your business is growing as you want to and helping get you the tools that you need along the way. Is that correct? I would say, yeah, I would say I'm a little bit more so due to having 20 years of retail experience. I I want my clients to be successful. I want to.

Talk to them about the things that I've gone through and the challenges that I faced so they don't necessarily have to, or they can hopefully learn something. So I think my experience is a little bit different than maybe, you know, somebody who's been in the insurance space. The other thing that I did, I did think of while I was on my way out here is your insurance agents, your CPAs and your attorneys.

All of those people in your network work with usually hundreds of businesses. I would tell your listeners to lean on those people and to not only ask them about their legal advice, but maybe some advice about your company, how, what, what they see, what would they change? What would they do or even better?

What are some failures that they've seen that they've learned about? So you don't have to do that. The least expensive failures are the ones that you can get educated about from somebody else that have had them. And you know, something that, that I was very, very grateful for is I think my most expensive mistake was about 5, 000.

And all the big catastrophic ones, I got to learn about from somebody else and just not do them, which is a good way as a small business owner to go about dealing with problems is just learning from other people and then avoiding some of those pitfalls. Absolutely. So sort of wrapping up today. I really like the takeaway.

Of insurance and some of these wraparound services are not just a contract you pay and you pay the bill and then you come back to a year later, but really much more of these are experts that are joining part of your team, helping you to grow your business for people that are just sort of beginning that process starting that team any piece of advice you'd give them as as to take away from this.

Interview people, look around and, you know there are incredible people in the industry and out of the industry. Some of the best things that I've learned are people that are not from the industry. You know, product, especially if you're doing a store or a new product, take cues from. Larger industries out there, if you're doing a beverage, look at Red Bull, not that you're going to become Red Bull, but those Red Bull monster energy.

I mean, there is a formula to creating something at size. And you know, not everybody's dreams and aspirations are to be something of that size, but at the same time, there are formulas for this stuff. Same with retail, excuse me. So look at other industries, look at other spaces and interview everybody.

I mean, just think of everybody as a team member that you're trying to get onto your team. But you got to interview them and it's got to be the right fit. A lot of insurance agents out there, a lot of lawyers, a lot of a lot of CPAs. I have people that I like that I've brought into my team that I think are industry professionals, specifically in the cannabis space.

I also have industry professionals that are outside of the cannabis space as well. Would I go to them for cannabis advice? Probably not. I'm going to go to my cannabis people. So don't think you've just got to, you've got to just do something. Also I would say, This is a very slow, fast industry.

Yeah, we've been, a lot of us have been waiting a long time for legalization. And now that it's here, things seem like they're moving exponentially fast. And then there are other things where we're waiting and we feel like we end up waiting forever. It's dynamic. So you have to be prepared to pivot.

You've got to have some fallback. some fallback things as well. You know, I thought I was going to be this, maybe it's not exactly what I'm going to be, but I'm still going to be in the industry. And again, going back to my story, I wanted to be a recording engineer and I ended up in the guitar industry.

I still am passionate about recording. I still love it. I still do it. But at the time that's where I was able to create a business, scale it, and be able to make a living. Essentially. Very cool. I love that pivot. Definitely an important thing for business owners to think about. So for those looking to get in touch with you, looking to learn more about Lake room insurance generally, or just insurance, How would they go about getting in touch with you?

Yeah, well, you can go to the website, lategroupinsurance. com That's got some information on it. It's got my contact information. Feel free to give me a call. I answered my phone. It's one of those things. I'm a phone call person. Phone number is 612.

I'd also like to, I love helping people. I honestly, if you just have questions, feel free to call, feel free to send me an email, email addresses. See Lake. At lake group insurance. com. And again, the phone number is 6 1 2 2 5 1 9 1 9 1. And again, if I don't answer the phone, I will call you back within an hour at the most usually.

Wonderful. Well, listeners can check the show notes for that again, if they want to reach out to Corey, but Corey, thank you so much for being here today for chatting with us and for illuminating some of the important parts of this industry. Thank you. Appreciate the time.

And we're back. I'm sitting here with Stephen from Mechanic Connect, an upcoming cannabis event that we talked about in a prior episode. Stephen, welcome. Thanks Tanner. I'm so excited to be on the podcast today and congratulations on the launch of it so far. Thank you. Thank you so much. We're happy to have you here and be able to tell people a little bit more about CannaConnect, this upcoming event.

So tell us a little bit for people who don't know, what is CannaConnect? Yeah, CannaConnect is an inclusive event series stationed in Minnesota where we cater to the Minnesota cannabis industry which we now have after the legalization of cannabis here. It used to be more so the hemp industry, but now I'm able to You know, proudly say, yeah, we're in the cannabis industry.

We bring together both consumers, vendors, and panelists experts, I guess you could say in the industry. We put on educational conferences and expos, and we're looking to continue to grow our event series into quarterly. So that's what we're planning here in July. We have CannaConnect2. Taking place in the wilderness on July 29th Uptown Minneapolis, Saturday from 1 to 6 tickets are available and we expect to be able to sell tickets at the door.

We're planning on just bringing as many people into the space to have conversations with business owners. Try product samples and then learn we have four panels going on throughout the day. So it's about education as much as it is about consumption. That's really cool. We're all about education and getting that out to people.

So we're really happy to be a part of this event. So people will be able to find the Minnesota Cannabis College there, but what other vendors will be at this event? Yeah, we're glad to have you, and it's important for us to give back and make sure that we're including the education as much as we are the production.

So, this time around, it's a little unique we're trying to bring fresh new vendors into the space with the legalization. As of May and June, we're seeing more grown vendors as a part of this event. So if you're interested in learning more about the growing side of cannabis, we have AI grow, BFG Supply, Canna Joy, and also Grounded Gardens will be involved in the Grow Lounge.

And so that's a special area. In the conference and expo area, we have fan favorites like cultivated. Retro Bakery, Love is an Ingredient, You Betcha, Cake and Baked. We also have Ancillary Businesses, Higher State Marketing, Miss Jane Accounting, Morim and Waller, as well as so many others. There's Crooked Beverage, Earl Giles, Modest Brewing.

It's a good mix of the current state of cannabis in Minnesota. I love that. It sounds like no matter what part of the industry you're interested in, be it as a consumer or of an entrepreneur, You sort of can find something for everyone at CannaConnect. Yeah, there's something for everyone. There's enough space.

We're limiting the vendors, which allows us to maximize the ROI for these businesses. But we're including more tickets for vendors for consumers this time around. We want to sell as many tickets as we can because we have a big enough space for hundreds of people to come through throughout Saturday and Turning Leaf is taking over the speakeasy.

So products will be for sale on the floor as well as in the speakeasy and we hope that everybody gets to experience what a Potential dispensary may look like coming to Minnesota soon. Very cool Yeah, we're actually in the wilderness right now recording this. I got a chance to see where that speakeasy is gonna be. It's a pretty cool place.

I'm excited to see it all filled out with people and Some really high quality cannabis products. Yeah, it's a historic venue. It's underground, like not in the sense of the event, but literally underground. And I think that adds an element of secrecy and comfortability that people can come out with. You don't have to hide.

You don't have to put your name on a name tag, but if you, if you're looking to actually meet people, this is a great event to open up and find friends. Like we're bringing like minded people together. We're connecting Minnesotans over cannabis. I love that. So for those that heard this, this sounds like something they're interested in coming to.

Where would people go about getting tickets for the event? Yeah we have tickets available online through Eventbrite as well as event High, and our website is canna connect mn.com. There's links to the tickets available. We also have a pre-party after party that you can sign up for that's free online.

I encourage anyone who's in town. to check that out at the Green Room on Friday, July 28th. And then also a little surprise here, if you use the discount code COLLEGE, you'll get 5 off your CannaConnect ticket. Cool. Yeah, no, that is a surprise. I did not know that. That's awesome. So, promo code COLLEGE gets 5 percent off that ticket.

Yeah, shout out to the Minnesota Cannabis College. I love that. Well, thank you so much. We're looking forward to the event, looking forward to having everyone out and being able to connect with people around cannabis. Yeah. I'm excited to see what you do with the space and I'm excited for everyone listening.

Please come check it out. This is something that we want to grow. We want to continue to deliver value and, and allow the network of people to grow. Allow the industry and the network of people to grow. Wonderful. Awesome. Well, Stephen, thanks so much for coming on the podcast today. Thanks for hosting this event.

We're looking forward to getting to connect. We'll see you there.

And that's all for this episode. A big thank you to Corey Lake for sitting down with us and sharing his expertise. A thank you to Steven for filling us in a bit more about Canna Connect. And we look forward to posting to your feeds all in just a couple more weeks. In the meantime, feel free to find us on Facebook, Instagram, Reddit, and, of course, Threads.

And be sure to subscribe to get our new episodes sent to your phone the moment that they're posted. Thank y'all. Have a fabulous rest of your week. Northern Lights is a Minnesota Cannabis College production. This episode was produced by me, Tanner Barrett. And by my co host, John Bartee. Production assistance from Marcus Harkis and Shayna Bates.

Special thank you to Corey Lake of Lake Group Insurance for sharing his expertise with us today. The information provided in this podcast does not, and is not intended to, constitute legal advice, but is instead for general information purposes. Information shared may not constitute the most up to date legal or other information.

No listener should act solely based on the information provided without first seeking advice of their own legal counsel. Please listen responsibly.