About Dean Balsamo

writer, publisher, image maker, voyager, husband, father, dreamer.

AMERICAN SPIRIT TOBACCO AND THE SPIRIT OF MEMORY

A close up of the Bloomberg article lead in.

A close up of the Bloomberg article lead in.  illustration by Andi Burnett

American Spirit and The Spirit of Memory

Although you hear plenty of stories about great companies that started in someone’s garage it’s comparatively rare for any of us to actually be involved at that stage. But in the case of the American Spirit tobacco company I was involved with the garage stage.

Memories -the early 80’s -my first few years in Santa Fe- appeared when I read the article Nature’s Cancer Sticks in this week’s Bloomberg Businessweek. This lengthy piece goes into the history of the brand’s founding and evolution over the last couple of decades -in providing the context behind a pending class action complaint against  its present owner RJ Reynolds for advertising “in a false and misleading manner.”

As Bloomberg notes this is the brand’s “bar mitzvah,” it’s coming of age moment in light of the way all the big brands have been attacked over the years. And as Bloomberg notes what’s really amazing here is not the specific issue of the truth in advertising but how well the marketing for the brand has done.

In contrast to an industry that’s seen a 17% decline in sales since 2009 Natural American Spirit has seen an 86% rise in sales during the same period.

It’s not hard to understand as the brand garnered its critical mass at the same time as the natural health movement was picking up real steam. Whole Foods even carried the brand for a number of years in its early days. And when you factor in the celebrity endorsement of American Spirit by the likes of Sean Penn and Gwyneth Paltrow plus all the hipsters it’s not hard to understand the allure and its translation into sales.

According to the article the fact that cigarette manufacturers can legally use over 500 different additives in their brands makes no difference-it’s the smoke itself-not the additives that makes smoking tobacco a health risk.

That’s not what my friend from that time- the late Robert Marion-one of the founders of American Spirit told me when he started the company.  It was the additives he said. If those studying tobacco risks weren’t talking about what happens when you burn these different chemicals in the tobacco than they weren’t presenting a true picture of the differences between his American Spirit approach and the standard industry practice.

I became a true believer while being part of the flotsam jetsam of friends and followers who so often surround a startup in its early days. I would go over to Robert’s garage and unpack 50 gallon barrel sized containers of tobacco that had been shredded (by the RJ Reynold’s facilities in NC) for packing into the pouches the company first began selling their tobacco in before they got into cigarettes.

To me it was obvious there was a difference. You saw it in the way American Spirit burned. It would go out after a moment while Camels and all other brands would continue to burn down.

Drum tobacco was one brand he signaled out as a perfect example of what he was talking about. “Drum has anti-freeze in it, that’s what keeps it moist.” I liked Drum at the time. I’d gotten used to it when I lived in Montreal in the 1970’s. There my artist and pirate friends would use it to roll their splifs  Euro style.

But I saw the difference with the American Spirit. Unlike Drum it didn’t stay moist. In fact it dried out very quickly so that as you rolled a cigarette it would be falling all over the place instead of allowing itself to be rolled like Drum.

Except for a call in the mid-80’s I fell out of contact with Robert as we’d moved to NYC for a few years before returning out west.

It was during the time in New York that I had to explore different options for my smoking needs as American Spirit had no distribution at the time out of the state of New Mexico. Even the Gem Spa-the famous newsstand and tobacco store in the East Village where we lived-didn’t carry them.

smokes-turkish-red

But the meme about additive free had taken hold. I couldn’t go back to Drum or Bugler and certainly none of the typical American brands.

What I ended up doing was buying foreign brands from Turkey and Egypt and occasionally some from Germany that used Turkish tobacco.  My reasoning was-and this is Robert talking- these countries couldn’t afford to use all the different additives nor did their traditional cultivation and manufacturing rely on them.

smokes-rami

Occasionally I smoked Galois and Gitane-the dark tobacco made cigarettes favored by the French working man-but they just end being too harsh and probably laced with additives.

I did the burn test and found that the tobacco from the Middle East didn’t keep burning if you put a cigarette down. And the boxes themselves were beautifully packaged. I found some the other day and posted them here. Sometimes I can’t believe what I was spending on a pack of these in those days.  1986 in NYC I was paying $4.00 and more per pack of my Egyptian smokes. But they were sublime. So smooth. In fact one brand’s cigarettes were 4” long with half of it hollow-like a cigarette holder of old-so that the smoke arrived in your mouth like a breath..

They did have a pungent air. People around me would often  describe them as smelling like “ dung” burning.  Once during a stay in San Francisco-when you could still smoke in cafes-I was asked by the manager of a café in North Beach to put my Turkish cigarette out since people were complaining about the smell. But the smell was a “scent” to me and I never had a problem with them-the smoke was too good.

My favorites

My favorites-they had gold tips

But as attacks against smoking ramped up and higher duties (in addition to taxes) were added to foreign cigarettes they began disappearing from stores around the country. The foreign companies just weren’t making enough money in this country to justify selling them here while paying the increased duties.  So all those beloved brands like you see pictured  are no longer available.

And as they all were labeled “for Export Only,”  I’ve never found them overseas-not even in Cairo.

That said, one thing that will never go up in smoke are my recollections and admiration for some people who tried to bring a better quality experience to a habit that’s been a part of human culture for thousands of years.

R.I.P. Robert Marion.

smokes-american-spirit

THE ECONOMIST CORNER: Social Engineering and the Enjoyment of Wine

The Vinfusion machine. The future of drinking wine?

The Vinfusion machine. The future of drinking wine?

The Economist Corner: Social Engineering and the enjoyment of wine.

I felt like screaming. No it wasn’t about the election it was about wine-and the ugly shadow side to the  kind of social engineering The Economist preaches with all those wonderful virtues like “human dignity, nobleness, freedom,” it loves to promote in the context of its weekly survey of current events.

In an article about Vinfusion, “a wine blending machine that lets drinkers craft a glass specifically to their personal palate,” they pin this hope that: “the snobbery and mystique surrounding wine-whether blended in the vineyard or the restaurant-may disappear for good.”

What are they talking about? They’re extolling the virtues of a machine that basically takes a paint by number’s approach to the ancient art of wine cultivation and blending. In doing so they negate everything that’s made the art of creating and drinking wine what it is in the pages of human history and culture.

. The company that created this hybrid mechanical/digital machine says they did all kinds of research and narrowed people’s basic appreciation for the taste of wine down to four main generic types: A pinot and merlot from Chile, a shiraz from Australia and a Muscat-because of its sweetness-from France.

These four wines, which sit in vessels connected to the machine, are then blended together by the consumer using digital sliders on a screen allowing her to choose between extremes of “light” and “full bodied, soft” to “fiery” and “sweet” to “dry.” None of the usual kinds of adjectives used by those with an appreciation for wine are used.

There’s no mention of years associated with these wines or alcohol content or any other information concerning their origins etc.

In my opinion the final result is “swill.” The reductionist approach taken here is even more disturbing because The Economist is supposed to be representing the highest values of Western Civilization yet they support this paltry excuse for wine appreciation.

It’s a slap in the face to their core readership-all those people who have taken the time, spent the money, and otherwise educated themselves in the art of cultivating, collecting and drinking wine.

After reading the article I was reminded of Boardwalk Empire where, along with questions about which competitor should be eliminated next, one of the big questions was about product and the two main options. The distributors like Steve Buscemi and others could chose the real thing-Irish Whiskey, Canadian Mist etc. or go the way of regional concoctions mixing who knows what for the rubes and their new jack providers.

This invention is sacrilegious. I half-way expect Dionysus to smite the author. Is there any excuse for The Economist to support stripping wine of all its cultural, religious and social history just to please some hypothetical sensitive consumer who feels self-conscious about his lack of wine knowledge?

It almost feels like this article is a plant-a favor to some friend of The Economist-free publicity for their product along the lines of the way museums will cater to their directors by mounting shows of artists collected by their board members in order to drive up the value of their personal holdings.

There are alternatives though to this senseless trashing of wine’s legacy attributes. I saw one in action earlier this year on a business trip to Seattle. There’s a small French restaurant on an alley near Pike’s Place that I like to go to. This particular night I sat at the bar for dinner. About half way through my meal a couple of gentleman sit down next to me.

Space Needle Seattle

Space Needle Seattle

One of them, lanky, 40’s, a smooth talker- from LA was taking his larger, younger colleague from CT on a business trip from what I could gather. Smooth talker and I began conversing and I learned he had a French wife. We spoke a little in French. Then a little while later I heard him engage the younger French proprietor in conversation in French.

Then I saw the owner appear with a device that had a long needle like end to it. Smooth Talker had really wanted a glass from a more rare French wine that was sold only by the bottle. But the owner took this object and plunged the end through the cork without opening the bottle which allowed him to draw a single glass of wine for Smooth Talker.

The whole event became a ritual. There was a desire, a negotiation to satisfy the desire, a solution and satisfaction-an event that expressed the essential art of our connection and reverence for wine.  I’ll take this essential human connection with this gift from the gods over the reductionist swill anytime.

A VINYL PERSPECTIVE-INCLUDING A LOOK AT WHOLE FOODS AND URBAN OUTFITTERS

Billie, vintage record.

Billie, vintage record.

A Vinyl Perspective-including a look at Whole Foods and Urban Outfitters.

Vinyl just won’t die. Last year’s sales were the best since 1988, rising 32% to 418 million with this year on track to surpass it.

Magazines have been taking note of the industry this year.  Forbes from which the information above is taken, Bloomberg Businessweek and others have all had features on vinyl’s resurgence. For instance news about pressing plants here in the US having a hard time keeping with demand came from a Bloomberg article. Also Classic Rock isn’t the sole driver of sales-with Millennials the new force in the market-vinyl’s success across genres is growing.

What’s more- the industry’s growth is extending beyond just collecting. Over the last few years pop up venues dedicated to playing vinyl on great sound systems for groups of people who gather to drink, hang out and listen to records began appearing around the globe. Now Listening Clubs are opening especially in London that offer regular nights-with “menus” of up-coming selections for listening. From what I can tell this movement seems to be driven by people in their late 40’s/early 50’s.

Urban Outfitters correctly foresaw the younger demographics behind vinyl’s surge year ago as they’ve had dedicated vinyl sections in all their stores for at least a decade. Urban Outfitters and Whole Foods are the favorite retailers these vinyl articles like to name check. From Forbes:

“Meanwhile, vinyl is no longer solely the domain of independent record stores. It’s quickly becoming ubiquitous in retail stores everywhere. Chains like… , Urban Outfitters and even Whole Foods   now carry albums.”

But while named Whole Foods only has vinyl in select locations in Southern California- Venice, Ventura and Downtown LA-the Arts District area..

Whole Foods Downtown LA. A "static" set.

Whole Foods Downtown LA. A “static” set.

 

This past spring, while still working with the magazine distributor, I did an informal survey for the company of some of the Whole Foods locations in preparation for our proposal to do the vinyl sets in their stores.

This, and the fact I was  familiar with the Urban Outfitters set plus a vinyl listener already- inspired me to do some field notes on vinyl and how’s it merchandised.

Urban Outfitters-vinyl wall

Urban Outfitters-vinyl wall

                                                                                                                                                         Looking at the photos here of the Urban Outfitters and Whole Foods approaches it’s easy to see UO understands more about merchandising vinyl.  Looking at their wall fixture display you can see they’re  making use of the record’s sensual packaging-treating the covers like magazines-full facings, plan-o-grammed,  categories are  labeled-making use of everything at their disposal to draw the eye.

Urban Outfitters-med. shot of vinyl area.

Urban Outfitters-med. shot of vinyl area.

       Even the lighting whose powerful contribution is often either ignored or one of the last things retailers look at-is working pretty well in the Urban Outfitter’s case.

What Urban Outfitters understands here is, setting the stage for visual merchandising to do what it does best: set up visual ques.

Compare this to the static Whole Foods approach in the downtown LA store. Sitting on a small fixture next to elevator-it looks like a set piece you’d find in a furniture retailer where they create rooms.

Whole Foods -wine and vinyl-just have put them together with a listening night.

Whole Foods -wine and vinyl-just have put them together with a listening night.

        Going around the side is more of the same. Some wine merchandised along with some more records. But there’s nothing compelling here. No signage, no particular lighting, no energy to the set.

  In doing field notes for my surveys several ideas came to mind that I feel would help anyone wishing to sell vinyl-do it better.

A vinyl island

A vinyl island idea

 

in-store sketch doing survey.

in-store sketch doing survey.

 Some specific ideas along these lines are listed below.

In doing field notes for my surveys several ideas came to mind that I feel would help anyone wishing to sell vinyl-do it better.

  • POP UP Listening Nights-like mentioned above. Energize your vinyl areas by getting people to come in and-listen. Why couldn’t Whole Foods have a night or two a week –serve beer and wine-have a live dj playing vinyl-preferably on some of the Crosley turntables they’re selling. The same goes for Urban Outfitters-especially as now they’ll be putting in pizza restaurants in select stores-as a result of purchasing a pizza chain not long ago. If they’ll have beer and wine-it seems like a perfect thing to try.
  • Vintage Records. None of the articles I’ve seen mention the trade in vintage records. This is huge market with dedicated stores and gatherings catering to the market where older records are in demand. Why couldn’t either of these retailers do something around vintage? Have a dedicated buyer who would select and manage. It would sort of be like Buffalo Exchange. Or conversely hold vintage days-where people wishing to sell vintage could come and sell-with the retailer getting a percentage or just do it in an effort to stimulate a connection-a buzz with your clientele.
  • Lighting: More spots, more overhead direct lighting and neon signage that draw attention to the space.
  • In Urban’s case, why not move the book tables adjacent to the record area-they go hand in hand creating an opportunity for piggy backed purchases/add ons.
  • As seen here, both retailers-following some of the suggestions above could also work more with “island” displays. Set out on their own and allowing customers to walk around them will drive more sales just as in grocery stores islands have been known to work well for higher end cosmetics for instance.

If technology is a product of humans turning themselves inside out-then vinyl’s connection with recording and transmitting human culture must be our hearts and souls. We all have associations and moments connected with vinyl:

My parents making us dance with them post-martinis -Sinatra blasting.

Barefoot girls on the grass in white gauze dresses whirling incense at the Griffith Park Be-In.

The dude with the 4’ high speakers and a couple of decks we saw -scratching- on a random corner in Bed-Sty as we headed to that artist’s studio….that maniac  with the cane leaping and  darting between cars as a dj spun Egyptian House on the sidewalk off Talaat Harb that first night in Cairo.

And maybe that’s because The Record combines so many sensual ques for our psyches. It’s scale and medium hits all the bases when it comes to our appreciation of culture and our tribe within it.

Dean Balsamo

THE ECONOMIST CORNER: SOME THOUGHTS ON PRIVATE EQUITY, THE MARKETS AND SPECIALTY GROCERS

The Economist Halloween Cover?

The Economist Halloween Cover?

The Economist Corner: Comments on Private Equity, The Markets and Specialty Grocers.

This is one of those weeks when The Economist and its hybrid reporting/policy suggesting approach is overflowing with meaty articles.

Besides an in-depth dig at Putin’s Russia, The Economist does both an opinion piece and longer article examining the power the private equity industry has come to wield.

For instance Carlyle, through all the companies they own, is the second largest employer in the country-after Walmart-with 725,000 employees-while several other private equity companies are also near the top in this regard.

The Economist laments the fact that the ultra-wealthy are choosing private equity instruments for investing instead of the stock market which has seen listed companies shrink from 7,000 in the late 90’s to 4,000 today. IPOS this year are estimated to be 50-75% less than 10 years ago.

As the magazine says, “Public companies are out of fashion. They need to be revived.” To tell you the truth as a retail investor in the market this article made me feel like a “chump,” to use the old fashioned term.

On one hand The Economist says something must be done to get the cash back into the markets. “Public Markets are inclusive and deep; they should provide capital efficiently (meaning inexpensively and intelligently) and should as a result be the best solution for both companies and investors. They should thus outperform the competition.”…..

But then The Economist goes into so much detail about how the private equity firms work-how focused they are compared to the public companies- and how that focus drives the much higher returns the private equity industry sees compared to Wall Street you begin to wonder why anyone with large sums to invest would do it with Wall Street.

Let’s see…. if it’s a decision between banking on all the “shoulds” The Economist feels –should… be happening- or  taking the profits that the focus and higher returns private equity is delivering right now……is there really going to be much of a decision process in making a choice?

After you weigh the various challenges publicly traded companies  face-like more public and government scrutiny, “quarterly capitalism” or the activist investors, and all the red tape involved in being public it’s not hard to understand given the polarized nature of today’s society-why more and more investors and companies are shying away from public offerings. Politicians during this cycle have routinely signaled out Wall Street for beating up.

Plus start-ups, because of their technological basis need less money to get off the ground-companies like Uber have even invented industries and have done so quickly without the need for the kinds of funds on the scale Wall Street is traditionally used for.

In addition private equity, unlike public companies- can take advantage of tax laws which allow them to load up on debt and in doing do so reduce the taxable income they’re subject to. Both Clinton and Trump have said they want to address this private equity industry advantage.

This article appeared just as the Whole Foods problem with hepatitis A was announced in Detroit last week. And this followed a Supermarket News interview with a Wall Street analyst who specializes in grocery in which he expressed his skepticism about Whole Food’s ability to recapture the reputation and profits it once enjoyed. Yes margins are still good but as many have been pointing out there’s a lot more competition from others carrying organic and natural foods-and at lower prices which is not only affecting same store comps but causing Whole Foods to be reactive rather than lead the pack.

The analyst’s thoughts aside I found myself wondering whether going public was really the best thing for Whole Foods and other formerly private companies like The Fresh Market and Wild Oats in its day. Having worked with these companies over the years in their pre and post private days, I’ve come to believe that these companies compromised their focus-the very element now driving the success private equity companies are experiencing.

Ask yourself what does Whole Foods stand for these days? The “whole paycheck” meme, rather than the high quality experience which made them the benchmark for upscale/specialty retailers, is more often associated with them these days-a product of the increased scrutiny that came with being a public company.

Is chasing lower demographics with the lower priced and serviced stores in Detroit, Chicago and New Orleans in addition to 365 which are designed to deliver a lower priced experience-while reducing the elements that helped build their reputation in the first place- really playing to the strengths that made them such a powerhouse?

The Fresh Market was never the same after it went public- while delivering a nice payload to the founders in the process. Is their new, 1 stop shopping reformulation really going to work now that they’re competing directly with so many others with years of experience in this regard?

Wild Oats seemed to change overnight bringing in big guns from mainstream grocers to run their operation and in the process turning off many of the venders who had been serving them loyally for years as suddenly there were demands for slotting fees and a host of other requests mimicking what public companies elsewhere do-which in hindsight seemed like approaches designed to prepare the company for a sale rather than improve  it.

One has to wonder whether going public is always in the best interests of grocers with their own unique identity and culture. Look at Trader Joes, Aldi, Lidl, H.E.B in TX-all privately held companies showing no signs of being off message. Without the challenges plaguing publicly-held companies they’re free to go about doing what they do-and doing it profitably without the short-term mentality investors from the Markets bring.

If you’re Elon Musk you have the type of personality that can take a more free-form approach to running public companies and deal with the heat from investors and financial experts without seeming to compromise their mission-but he’s the exception.

In the end it seems to me that it’s the specific focus-the company’s mission and culture-that the decision on whether to stay private or go public should be evaluated against.

Private equity seems to be a good match for New Seasons, Metropolitan Market and Bristol Farms-the Endeavour held companies-which continue to be on point with their traditional focus.

Haggen’s melt down appears to be an anomaly in the private equity area. You could see it was going to be a disaster early on. But in this case it’s likely their owners-a private equity firm out of Florida still made money on the deal as no doubt they did what many other private firms do-load on the debit from the acquisition and use it to lower their taxable income.

But when it comes to upscale/specialty grocers the most important consideration-like the private equity industry- may be focus.

This more niche-orientated approach is fundamental to the success of private equity and it may be the most important aspect for an upscale/specialty grocer to look at when it considers going public. Will they compromise their focus going public?

As The Economist admits, it may be quite a while before the challenges arising from the nature of being a public company can be mollified. Until then they admit, it looks like private equity may remain the best choice for wealthy investors. And it may  still be the best option for specialty/upscale grocers who find themselves wanting to raise money without sacrificing their mission focus, their unique identity, in the process.

Dean Balsamo

The Economist Corner: Ketamine-another recreational drug drafted for medical research.

Lead into The Economist article about Ketamine

Lead into The Economist article about Ketamine

After slogging through a half dozen articles devoted to the swirl around Mr. Trump and his existential threat to human life on this planet and substituting the names of different countries for the usual spate of articles on dictators, war torn states, bankers under fire and bribery you come across an article like Sniffing at a New Solution– a piece devoted to on-going studies with Ketamine and the possibilities it offers for treating deep depression and suicidal thoughts.

As someone who admires Freud I immediately associated the article’s title with both his cocaine habit and the movie The Seven Percent Solution.

But the use of “sniffing” here refers to  on-going projects with Johnson & Johnson among others to develop a Ketamine-based treatment for deep depression and suicidal thoughts that’s a nasal spray taking advantage of Ketamine’s fast-acting properties in this regard.

While Prozac is still the leader in this area it’s only effective in 58% of the cases. Plus even though Prozac delivers the boost in Monoamines, the class of chemicals thought to influence depression-its effects can take weeks or even months-if at all-to work.

The Prozac approach stems from the “chemical imbalance” theory that’s guided depression-treating approaches for decades now.

But Ketamine which is used in anesthesia, but is more popularly known as a drug used at raves is undermining this theory.  It has shown promise as an antidepressant because in studies it’s shown to  not only deliver a shot of the Monoamines but, unlike Prozac whose effects take weeks or even months – Ketamine actually  works in a matter of hours if not minutes in some cases.

Ketamine however does not act on the Monoamines directly. But because it’s shown to be effective in 75% of the cases of people who do not respond well to Prozac, Ketamine research is taking anti-depressant treatment down a different road. At this time researchers don’t know exactly why Ketamine works but The Economist says Ketamine research offers the opportunity to “design a new class of antidepressant.”

The article goes on to say this research is, “a change of direction so radical that some think it heralds a revolution in psychiatry.”

The research into Ketamine has been going for 10 years with favorable results. But because its patent has expired it’s not a high priority for drug companies who of course make the bulk of their profits from patented formulations they market.

However even though Ketamine isn’t formally approved it is prescribed “off label,” and here in the US a number of clinics have opened that use Ketamine infusions of the drug to treat people.

Right now these clinics focus on administering infusions of Ketamine intravenously because that’s how it works best for this purpose at this time. According to the article treatment with Ketamine in this manner has actually saved lives.

So now there are a number of companies looking at nasal sprays as mentioned above, as well as other formulations to take advantage of Ketamine’s potential (and to create drugs which they can patent) to work fast and effectively.

Still as someone who helped to put on some raves in the 90’s (though I never used K) it’s hard to imagine this drug would be helpful in this regard as there are plenty of instances where its recreational use has led to less than desirable results.

But then again if medicine is in effect going back to the drawing board with regard to the causes of depression maybe it’s no accident that there’s been a resurgence in the study of the theories and treatments by Freud among researchers in recent years as all the mapping of the brain and how it functions has still left scientists wondering about the mysterious impact our emotional complexes and thoughts have on the mind and the states it inhabits.

COLORADO CANNABIS STORES PART 3: MONEY, LAWS, DISTRIBUTION, COMMENTS ON TINCTURES AND TOPICALS

cannabis-dew-drop-tincture

Good old Google. I went to a site yesterday and up pops an ad about investing in the cannabis industry. Strange isn’t it. I post a few articles on an obscure blog and go to a few sites related to the subject and they’re already targeting me.

But I’m not complaining because I did follow the link and it brought me to a video some “research” company produced. It must have been for pensioners because it was so long-at least 10 minutes by the time I stopped watching it – so I didn’t get a chance to get my “free” booklet from them on investing in the industry.

Nevertheless it did perk my interest in finding ways to invest in the industry. The video itself highlighted penny stocks being offered by small companies that have products and services that support the cannabis industry-and the tremendous gains their examples had made over the last few years.

The funny thing is several weeks ago we met with our financial advisor at Edward Jones and I asked him about investing in cannabis-related businesses. He told while he’d love to help us do that- because of the federal laws against cannabis use, the company doesn’t offer any access to these companies in the investment portfolios it creates.

It would seem like this would be a good time to look at the possibilities. With California poised to pass recreational use this fall the industry is set to continue showing fantastic growth.  This year it’s projected to be about 7 billion and by 2020, 22 billion dollars-that’s 10 more than the NFL does.

And these are just the numbers for actual cannabis sales. It doesn’t take into account all the related businesses, products and services that support the industry. You have  companies like Praetorian Property which specializes in finding real estate for growers and stores, lighting and green house manufacturers, Vape-started by an ex CIA person I think-which has seen tremendous growth with its smoking device ,one that has Lego-like sections of buildings that fit together in a modular fashion allowing configurations as needed by the cannabis store or grower and of course-lawyers. Graham Sorkin, business development head at Mary’s Medicinal based in WA told me it felt like they are as many lawyers as employees involved in the industry.

That makes sense when you consider the complexity and differences between the states and their laws around cannabis. Anyone actually interested in manufacturing a product with cannabis or having a store pretty much has to go to one of a number of law firms with a cannabis focus – plus they know all the players who might open to investment or working with you on a product offering.

The law is everywhere.  The gentleman at Mary’s helped clear up one question I’d posed in my earlier posts about cannabis stores regarding the point of purchase in the stores and the lack of impulse items up there.

Colorado law does not permit a fixture out in front of the counter at this time. I’m assuming that explains why the magazine rack I saw in the Pueblo store is behind the counter. That seems odd. But then again under CO Law buds, wax, tinctures and edibles-anything that you consume must be kept in a different place from the non-consumable products like pipes & papers.

I was also told that while the Washington-based company came up with a Rescue Remedy type tincture for those who got too high they were required to take what I call “The Bloody Mary” approach as Colorado law mandates that there has to be at least a bare minimum they proscribe of active THC in the tincture in order to sell it in a cannabis store.

And while these cannabis shops are retail stores the law prevents distribution companies –those with a multitude of products from different manufacturers-from operating in the way they do in almost every other industry like grocery, book stores, and so on.

It’s state by state but in CO you cannot be a distributor –a middle man in the process. The stores either create their own products for sale in their retail establishments or if they carry someone else’s product that manufacturer itself has to provide it directly to the store.

Yes there are lots of paths to navigate. Take transactions. While cash is still king you can now use a debit card in Colorado stores. These transactions are processed through credit unions which do not have the same burden of federal laws to follow that regular banks have to abide by. So until there’s a national rewriting of the law you’re not going to find Wells Fargo or Bank of America involved.

I’m not aware of any specific stances the big banks have on cannabis-whether they’re for or against it but I did read where Sheldon Adelson the man whose efforts changed the focus of Las Vegas income streams has poured money into fighting legalization both in NV and Florida, while Dr. Bronner the famous soap maker out of CA has given $100,000 to helping to pass a recreational cannabis law in AZ this fall.

Granted the whole cannabis subject is polarizing for many. But as one who has spent a few nights in hotel rooms around the country doing some channel surfing I have to wonder if making cannabis more available can be any worse than what I see on TV. It’s astounding how many commercials touting anti-depressants are on. And while I remember some books by Macrobiotics founder George Oshawa written in the early 1960’s specifically stating that the U.S. had mental health problem it’s still amazing to think we’re that messed up as a society in this regard.

That’s why I find the cannabis tinctures with active THC of interest. Based on my experiments with the tincture I believe they’re worth looking at by people who might only need a gentle lift not a full on mental make over.

There’s a learning curve –basically how much to use. It’s typically taken via a dropper ideally sublingually rather than put in coffee or water. The one I tried was flavored with vanilla. You’re basically talking about one to three drops. And it should be taken as recommended by people in the cannabis stores-after eating as this helps buffer the physical effects of the tincture.

One time I took it without having eaten anything  and experienced an uncomfortable feeling in my stomach for a while as a result.

As for effects while these things are always individual I found the tincture to work well with regards to just a subtle “lift” to the mood, a sense of well-being, as well as, an ability to help focus on a task-which may seem counter to the usual cannabis experience except the tincture’s method of preparation isn’t meant to deliver a knock- out punch.

To my mind the tincture’s straddling of both medicinal and recreational highlights what could be viewed as an out-right prejudice our society has but never really acknowledges.  While we certainly cater to victims and seem to put tremendous resources behind unearthing more and more of them there seems to be one that no one wants to talk about.

I’m talking about the bias against the person who already feels good and wants to highlight that feeling-feel even better. In a way it reminds me of the Smart Drugs fad in the 1990’s where magazines like Wired did articles on the various formulations (which also included a fair amount of caffeine) appearing at that time designed to boost your brain power.

In one pop up art exhibition in an abandoned space we did in Santa Fe we featured a smart bar at a musical event we held in the space. It was a popular offering.

The topical pain treatments seem to have an easier path for acceptance among the general population as they don’t have to actually use activated THC in order to be effective according to some of their manufacturers.

While most of the ones I’ve seen and used do,  there are others that feature the CBC cannabis compound and- not active THC- which is said to mimic the active THC properties by merging with the same receptors in the brain and body that the THC does.

I can’t say for myself whether this is true as all I’ve tried are the ones with both THC and CBD. It’s my understanding that those topicals that only have the CBC and not THC or CBD are not treated in the same way by the law as those with activated THC/CBD compounds.

There are some different effects in terms of activation that I’ve noticed. For instance the crème picture below seems to have a greater concentration of aromatic substances like peppermint and juniper which gives it a more penetrating feeling after it’s applied.

cannabis-topical-creme

Considering that the industry’s still in its infancy we’ll see many more variations on cannabis orientated compounds not to mention the growing segment of edibles-gourmet edibles that chiefs are taking up as the industry makes the next leap on the back of the the current group of states looking at legalizing cannabis.

THE ECONOMIST CORNER: MILLENNIALS AND CASINOS

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Walking the Strip

The Economist Corner: Millennials and Casinos

According to The Economist the casino industry-Las Vegas, Atlantic City, state gambling and Indian casinos-has a problem: aging clientele.

Slot machines which account for most of the gaming revenue in this country are not generating the profits they once did because millennials in particular are not playing them like their parents.

I think this idea that millennials are not following the patterns of previous generations is true across the board in all industries isn’t it? Why would there be so many articles over the last few years about how to capture the millennial dollars? Why would Whole Foods create 365 or Ahold Bfresh if they didn’t feel they had to change the manner of merchandising and product offerings in order to get in sync with this generation?

While Sheldon Addelson and Steve Wynn have successfully transformed Las Vegas into a convention and entertainment destination as well as created extremely successful venues in Macau to take advantage of the Asian desire to gamble, the industry as a whole is suffering around the country.

Some people like a gentleman named Mark Frissora who came from Hertz and now runs Caesars Entertainment are trying to change the experience-attract the millennials by changing the experience and the focus on the gambling instruments that typically dominate the casinos by creating a “casino within a casino.”

He along with MGM Resorts International are soon to open “experimental spaces for young people.” These will feature new types of slot machines that test the skills of the players-in the manner of the games they now play on their mobile devices.

In addition the physical layout of these new rooms called will feature LED screens that continuously change the backgrounds-something like the overhead screens with projections that have been in place on Fremont St in Old Las Vegas.

Other approaches involve virtual reality shooting games which allow you and others to bet on how well you do. There is talk of games involving groups of players with wireless consoles with a variety of games you can bet on as well as ‘electronic sports tournaments” and more contemporary music acts.

But as the man from Hertz says, “the industry is not filled with creative geniuses.” Ironically while selling the gambling experience- the executives themselves are reluctant to take a risk on something new.  Cash flow believe it or not is also a problem. While Vegas isn’t going broke, all the major casinos seem to be carrying tons of debit which is tempering their desire to tweak the traditional models. And there’s slot machine providers themselves who aren’t crazy about the R & D and more expensive costs associated with change. The casinos are already in debt to them.

vegas-tropicana-follies-old-school

Old School Vegas

While Las Vegas is doing okay with the non-gaming strategy casinos elsewhere-casinos who are primarily dependent on slot machines-are not.

The “traditionalists” still feel that as millennials age and have more money they will become the same kind of gambling consumers as their parents.

As the parent of a millennial myself I’m not sure that this will come about if the casino’s keep the same old same old in place.

One of my colleagues at the magazine distributor I worked with who was fond of creating spreadsheets bringing together demographic information and “numbers” about income distribution by geographic location and groups once did one with millennials as the focus. His conclusion was that millennials basically didn’t have enough money for much in the way of entertainment or fine foods and so on.

And while it’s true when looked at on paper millennials are no- where near as wealthy as other groups in our society I told him his ‘story,” the conclusions he was drawing from his data collection- didn’t offer a true vision of what millennials do with their money.

Since I’ve had the opportunity to see firsthand how millennials approach things- from what I see they’re always willing and able to find the money and spend on things they really value,  like an experience whether it be a new tattoo, a trip to some far off destination, or a music venue.  They’ll also spring for great produce, wine and all the rest. When they feel the need –they’ll find the money.

They don’t appear to be particularly hamstrung by a lack of funds because they do spend their money differently. They don’t feel the need to accumulate in the same way as previous generations.  While they certainly enjoy nice things and experiences they don’t acquire things with a goal towards increasing their status in quite the same way.  Basically the rise of so many of the apps we see today reflect their mindset a lot better than “numbers” and statistics in general.

But if I had a hand in creating these new spaces for Las Vegas there are some things I would recommend.

For instance as someone whose gone to Vegas for numerous conventions in the grocery business I always found walking  very far along the strip to be a pain after a while. It’s simply not laid out to do this.

What if a Vegas version of the High Line was created for biking and walking-giving another look at the Strip? I’m sure the Vegas people could figure out ways to get gambling and drinking on this as well as satisfy those who wish to exercise something other than their elbow.

And what about the trays of drinks they bring to you at the tables-why not have great craft beers-at 7, 8, 9%-the kind millennials enjoy drinking. And artisan spirits like gin and others that are being produced around the country.

And there’s the drones. Couldn’t some sort of area where drones can be flown in tests of skill with of course betting and drinking accompanying the action be created?

Ideas are cheap of course. Everyone has those. What remains to be seen is whether the traditionalists are right about patterns that have evolved over time or whether Vegas is going to miss the boat-fail to accommodate the differences in a new generation.

Dean Balsamo

DEBT AND THE BIRTH OF A NATION

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Saw the new film The Birth of a Nation recently and can say it’s an engaging movie. There’s lots of action, blood, and sensitive portrayals of the slaves as individuals-I found thought provoking.

One scene with an African ceremony performed by slaves on a plantation got me thinking about something I’d seen in a book called Debit the First 5,000 years which I read earlier this year. It’s fascinating because the author David Graeber dwells on the human component in debt.

For instance he has a discussion of the origins of Black African slavery that revolves around the various magical/ritual cults that existed among African tribes. As these societies came to dominate the tribes no one who hoped to improve their family’s lot could afford not to be a member.

The leaders of these cults knowing they had a hot product kept on raising the price of entry into them. And since many of the people wanting to join couldn’t afford the fee for joining the cult- a system of indentured servitude evolved.

Family members were routinely offered as collateral in exchange for the entry fee. Over time this became a system of slavery. The people offered in this manner became the property of the person covering the entry fee- to be sold and traded. Then when the Portuguese appeared Black slavery went international.

In the US there was also indentured servitude with the Celtic and others from the British Isles brought here to work off debits they had acquired in the old country. At one time the “red necks” outnumbered Black slaves here.

But unlike Africa it didn’t evolve into actual slavery. White slavery was being carried out by Muslim pirates working the Mediterranean basin where they’d raid coastal towns in France and Italy among other places for captives.  Occurring at roughly the same time as Black slavery, something like three or four million Europeans were taken in this manner.

It got so bad that the US Marines went over to engage them. This is what the line “shores of Tripoli” refers to in the Marine’s Hymn.

The Muslim slave owners in North Africa and other places made money off their slaves too in the usual ways. But given they were taking slaves from known families-rather than the way Black African families were broken up-the Muslim captors had another, more big business play at their disposal: ransom.

Once newly captured slaves were brought back to the Muslim kingdoms that traded with the pirates many times a European who lived among the Muslims would go around and qualify the captives-see which ones came from families who had the means to pay ransom for their loved one.

These candidates were separated out from the other slaves and were given lighter tasks, kept in better shape while the negotiations for their release proceeded.

The other slaves suffered the usual fate of slaves everywhere except that over time the European slaves created  what amounted to quarters- within the cities where they were held in the greatest numbers.

These areas had commercial activities-including taverns where Muslim men would go to drink- away from the eyes of their co-religionists.

Given slavery’s continuing connection  with debt and economics in addition to the urge to dominate and exploit you have to wonder when it will finally be eradicated from human society.

 

THE ECONOMIST CORNER: MARS AND DEATH

German military officers ushering an alien out of a Bavarian forest-from a 1990's UFO magazine.

German military officers ushering an alien out of a Bavarian forest-from a 1990’s UFO magazine.

Last week Elon Musk grabbed more headlines with his comments about sending colonists to space and the inevitability of deaths among the pioneers to the planet.

This triggered several responses in this week’s issue of The Economist. In their opening editorial they opine that Musk –and others-are setting their sights on the red planet for all the wrong reasons.  While acknowledging that humans have this need to explore, The Economist cautions against putting energy into voyages to Mars for what they deem -the wrong reasons-fear of mass extinction of humans on earth.

They call out stories by H.G. Wells (War of the Worlds) Ray Bradbury and Arthur C. Clark for their scare mongering stories about the destruction of human society.

Even scientists take a hit. Stephen Hawking’s suggestion that without human migration to surrounding space we face extinction from nuclear war, AI gone awry or a supervirus  is called “claptrap.”

Martian surface

Martian surface

 

While acknowledging the dream for travel to Mars is “stirring,” they take issue with the motivation Musk and others addressing colonization on Mars are using to promote their plans for the planet.  In The Economist’s opinion too much fear is behind the motivation for trips to Mars.

While the magazine agrees a natural or artificially designed pandemic, nuclear war or climate change could kill billions, extinction from these events is labeled “unprecedented.”

Even  an asteroid event like that which killed off dinosaurs isn’t as alarming as it might have been in the past due to the fact we catalog their movements  and none offer any danger in the foreseeable future.

In their opinion the only real concern for the preservation of human life here worth worrying about is long run-a billion years from now when earth isn’t inhabitable according to the timeline suggested by science.

In the end The Economist believes in the dream of Mars but not one based on the fear of death which they believe is prime motivating force behind present motivations to go there.

Fine. But in away The Economist sentiment is just splitting hairs. It looks like humans are going to Mars for whatever reasons.  Death is part of life so it’s only right Musk talks about the inevitability of death among colonists to Mars.  It’s yet another way of making the future trips real.  Death on the planet is going to happen. And most likely there will be both burials and some option around cremation.

And so in this same vein we might ask, what about death in space- far from a planet or space station?  What happens if a crew member dies while on a protracted voyage to Mars or other nearby planet?

While working on a screenplay a few weeks ago I had to research this scenario: someone dies on board a space craft months from earth-traveling to Mars.

What do you do with the corpse? Do you take a burial-at-sea-approach?  Shoot the body into space?

I was surprised to find out that there doesn’t seem to be an official policy about handling a death in space.

For one thing there are UN Treaties about littering in space that our country has signed. Many argue that under these treaties no one is allowed to eject dead voyagers into space.

The only other solution with any weight that came up involved several steps for dealing with a dead body.

The basic approach involves taking it and securing the body to the outside of the space craft where it will be subjected to the extreme cold of deep space.

There it would ride until the craft  began the re-entry phase of its journey-to land.

In order to avoid its destruction, the body would have to be brought back into the space craft.  Of course this sets up a potentially unnerving situation where the colonists have to deal with the dead person’s body again. Effects on morale can’t be discounted.

Furthermore taking a body frozen in this manner back into the temperature of the space craft means the body will just break apart-having become so brittle from freezing in this manner-that the change in temperature will cause it to shatter.

To counter the latter affect there’s a least one company that’s working on an approach that from what I can understand involves immediately placing a body treated in this manner-into a machine that essentially reduces it in a uniform manner-to a fine power or dust. But it’s still in an experimental phase.

So again there’s no specific policy yet dealing with a death …in space.

This may be one of those situations that only the episode itself will help to clarify what the approach will be.

As far as the fear of species death and the drive to colonize other orbs in space goes, when hasn’t human exploration had an element of fear of survival involved in its activities?

The more important question may be about what is accomplished in its wake.

Dean Balsamo

CANNABIS SHOPS IN CO part 2: A REVIEW-STORE LAYOUT, VISUAL MERCHANDISING, TRANSACTIONS

Because of my previous association with the magazine distributor located in the Denver area on my trips to CO to check in with the hive-get my brain sufficiently washed by the powers that be there-I would always stay in Boulder at the Inn at the Foot of the Mountain. The motel first built in the 30’s –  has small  cabins like you see in the picture. It’s right across from the creek in Boulder and you can hike  up the mountains behind the inn- and walk another way- down to the Pearl St. pedestrian mall where Boulder Books, cafe’s like the Trident and all kinds retail stores are located-including one of the two cannabis shops I saw in Boulder.

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Foot of the Mountain Inn-Boulder, CO

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The first one I went to is located downstairs on the corner of the Pearl St. mall and Broadway.  As you might expect the two stores I saw in Boulder were quite a bit different than the one in Pueblo.

The locations  here  reflected the same kinds of differences you see with grocers around the country. Boulder’s demographics, income structure, education level is naturally different from Pueblo’s (and stores I’ve seen in Seattle and Bellingham, WA )  and this is reflected in the Boulder stores I saw.

The store on Pearl St. part of a 17 store chain owned by Native Roots which does both medicinal and recreational (plus has 3 gas stations that also sell cannabis products) conjured up an image for me of private pharmacy located in a bank vault. As opposed to Pueblo, this store is small and the decor while minimal exudes an upscale air. Instead of a guard posted at the door, there’s a desk where a pleasant young man examines your id before buzzing you into the next room where the transactions take place.

cannabis-boulder-store-on-pearlIt feels something like entering a doctor’s office. The next room is also smallish maybe 10′ by 10′ in front of the counter which is also glass. But here the decor and POP looks like it was custom-designed to suggest a serious feel to the experience.

Another young man was at the counter to serve you. He, like the woman at the counter in the other Boulder store I visited couldn’t have been more helpful and enthusiastic. I was impressed and thought this is the kind attitude any retailer would love to have among her staff.  He sounded like he knew his stuff. And isn’t that half the battle in doing any retail?

I saw more of Mary’s topical products for aches and pains. (see the previous post about another of their products). He showed me this one:

cannabis-topical-openedcannabis-topical-packaging-on-the-sideIt’s an ointment that’s applied directly to the affected area. It’s not creamy but feels like a wax type of substance for the base. My experience with the topical pain treatments is -they work.  Due to the numbers of Baby Boomers that are around I can’t help but feel that the day when these natural pain reliving compounds with cannabis will be found in natural and specialty-even regular grocery stores-can’t be far off. If stores can sell alcohol (and do the carding of the customer) it would seem that these kinds of products -since they’re health-related, should be made available as well.

In the traditional medicine of the early Spanish settlers in New Mexico for instance, cannabis prepared in different ways, was just one of many other herbs used to treat various ailments.

One again like every shop I’ve seen, there’s no impulse purchasing-no fixture with anything like you might see in a grocery store. In a way, due to the sedate and medicinal kind of feeling to this store you almost wouldn’t expect to see anything like a a fixture designed for impulse except business is business and if there was….a fixture with whatever impulse items they could have-rolling papers, magazines, pipes etc-my guess is there would be a number of additional sales to be had.

This store wasn’t busy at the time so I’m not sure how the customer flow is. Is it one customer at a time in the room or do they do a line queue?

In the other Boulder store I visited down on Arapahoe below 28th street next to the great Hospice thrift store they too had a room where you checked in at a desk-again something like a doctor’s office-with sofas and chairs-but they only let one person in at a time-into small room where a young woman- bright, enthusiastic-served you.

She was more than happy to explain anything about their offerings. For instance they had what’s called “wax” there. From what I was able to glean, this form of cannabis product is processed with CO2. I remember a few years back when I was attending the Natural Products Expo held in Anaheim each Spring and in Baltimore in the Fall there was a man-quite a character-who was a “dealer” of Kava Kava root produced in a similar fashion.

He used to give a party during the Expo, later in the evening where Kava Kava-not drinking -was the main event. He used a “super critical” process to reduce the whole Kava Kava root into a thick, yellowish paste. Than he’d pass it around on a tray like a dip which you used some Chinese candied ginger pieces to scoop it up and eat.

It was like a 60’s party. You’d walk into the room and everyone was just so chill-sprawled out and just this mellow vibe to the scene.

But  you’ve never had Kava Kava like this before. As soon as you put that first taste of this paste in your mouth-your lips and tongue went numb. Than a moment later your body got this overpowering sense of relaxation. I have to wonder whether the traditional use of Kava Kava in the South Pacific ever delivered an effect like this. The strange thing is, the first time I tried Kava Kava in this manner -and I had nothing to drink at all that night-I woke the next morning-having to do our booth that day on the floor-feeling hung over. Again I hadn’t had a drink yet it felt like I had consumed too much Bourbon or Southern Comfort. I could barely drag myself to the show floor. Later things starting coming about Kava Kava’s effect on the liver which made perfect sense because this way of processing the herb was like nothing I’d experienced with any herb.

Anyway to get back to the “wax,” I asked the woman in the store how people use it. And she reached down into the case and showed me a glass pipe. I said, “that’s a crack pipe,” remembering what it was like when I lived in New York City during the 80s seeing the crack heads hanging out on Bowery or even near our own building in the East Village. “That’s what my mom said, ” she answered.

In fact broken, empty crack vials helped my wife and I get a settlement from the landlords trying to kick us out of our rent controlled apartment at the time. We were going to a city-mandated conference with the landlords- and I decided to take black and white photos of all the violations in the building-because B & W would make them look even worse-and I specifically photographed a number of spots where users had left their empty crack vials in the downstairs hallway and other areas of the building. It worked. They freaked out when we produced the pictures and we got a good settlement to move out. We went from Manhattan to Hoboken across the Hudson.

This is apparently  the direction-along with tinctures-that  a lot of consumption is moving towards these days-it’s not the old hippy joint passing times of old but designe- driven experiences of today-changing so many other retail endeavors .

What this small survey did for me was reaffirm the feeling I have that anyone who now works in the grocery industry or serves it in some fashion should be keeping an eye on the growing cannabis industry as it has many of the same needs for services you’re now providing.

rainbow-outside-of-trinidad-co

 This shot is from a rest stop outside of Trinidad, CO.

Thanks for reading.