 We want to be exposed to this consumer growth in this part of the world where we aren't yet and we're going to take a risky leap of faith that we're going to be able to survive in the regulatory environment and that our shareholders are not going to be very concerned that we're changing our business model. They said we want to be a part of this growth. The minute those big multinationals or when GM started investing in auto plants in Russia or when when when Lennar and some of the big home builders started investing in Brazil and investing in essentially building homes for the new middle class coming up in the rest of the world. I mean this is this is the exciting part about our industry right now which is where you know you this is I think our conversation to tie a thread around where we've been talking for the last few minutes is we've seen this before at other times in investment history and we've seen it in other places where you had a consumption trend that was very exciting and big sophisticated players came into a small pool and right now it's still kind of a small pool not only because of the size of the investments in the companies but it's made smaller because the regulatory environment is very restrictive and it keeps people out and has kept out a lot of these big players but they're they're coming they're going to be here. Someone's opinion may contradict yours. Where's my friend Alan? It's all about your perspective. Who are we and what is the nature of this reality? Five, four, three, two, one. Hey everyone, welcome to Simulation. I'm your host Alan Sakyan. We are on site at the beautiful New West Summit, The Cannabis Tech Conference. We are now going to be talking with Timothy Seymour. Hey Alan, how are you? Good to be here. Good to be here. Thanks so much for coming on. What an event, huh? What an event, yeah and what a panel you were just moderating as well. It was exciting. It couldn't be, it probably always felt like this but it couldn't be a more interesting time to be talking about investing when you've completely done a 180 in terms of sentiment on hey let me throw every dollar I have into this high growth area when in fact a lot of money's not been returned and won't ever come back. So interesting times to be an investor because I think it's it's the the reason for us all to be here has never been more exciting and there is execution and there are companies doing great things. There's also a lot of companies that just have not executed, took a lot of money in and will never fulfill the promise. Wow and yeah sorry about that. It was a very sober start to the day. It's a sober start. Yeah and it actually kind of also reminds me of like 10 years ago with the decentralization movement as well and cryptocurrencies because we want to leverage the technology of decentralization and we want to leverage the technology of cannabis for ascension and if we're using it to try and just make the quick buck along the way it's it's so let's jump into this. Tim's background is so interesting. Founder and chief investment officer of Seymour Assets Management and you've been just 22 years of investment experience portfolio manager. I mean let's talk about dating myself. It's okay. You got you got some good things that come with age. Yes experience is the wisdom. So let's jump into your big picture understanding of what is going on. You started taking us down this path yeah what are you currently seeing happening? So and I'll frame it within my lens and my lane as an investor and when I show up at a great event like this and I talk to investors that are also either new to the asset class I try to point out that as you referenced either with crypto or maybe it was in the late 90s with dot-com but my my background is in emerging markets so new asset classes if you will and it's a case where some of the dynamics in terms of the size of the market the lack of liquidity newer companies corporate governance risks all balanced against this wonderful exciting growth story for this you know not just post prohibition blah blah blah that everybody can talk about but really truly a consumption story that is going to be staggering and and people tend to throw darts a little bit about the size of the addressable market but will you all know when you add in adult medical wellness lifestyle crossover ancillary all the different elements of support I mean there's a there's a lot of people in this country that are going to be working in this industry in some capacity and that's so exciting because it look for those of us that have been part of the early stages here there is a small sense of not only is this a very viable interesting exciting area but there is a level of social responsibility there is a level of of I think you know not just trying to make the bucket all costs and and that's not every company and every investor and every leader but there's a lot of that here and that's great but but but it wouldn't be happening if there wasn't a huge opportunity for for the addressable market across multiple demographic groups across multiple geographies across multiple product classes so for me I come about this as a guy that's used to investing in new asset classes I lived in Russia I invested in in emerging markets and in Brazil and in China in the earlier days before a lot of people were investing in those markets so a lot of the a lot of my instincts for investing in those markets are the ones that actually work pretty well here wow so you actually had background of seeing emerging markets in brick the Brazilian yeah listen to you so yeah you had that great time with seeing emerging markets build up in brick countries and also be able to again just see the vision of what was going on from kind of like a big top-down macro perspective and and see what failed what succeeded right and so now I want to see then what were maybe some of those similarities and what was happening in the past couple of decades with the emerging markets and also with what like we talked about there's this in there's this spiritual uh uh dependent like we have to be uh we have to have a deep ethics so it's got to be some accountability there's got to be accountability socially there's got to be accountability regulatory wise and and compliance wise I mean there's there certainly needs to be adherence to a very strict set of rules and and the cannabis industry for the most part companies that have grown up in this industry have have their DNA is to be more compliant right I mean people embrace are embracing the regulatory environment obviously there's certain of the parts of the regulatory framework we want to to to change you know to to lighten up on and they include some of the banking dynamics some of the the capital markets dynamics some of the the interstate shipping dynamics but but like at the end of the day these are companies that that I think are probably embracing it but that the people that are investing in this industry so getting back to kind of we're all part of something I think you know I think there's some recognition that there's adherence to a set of values that are important and and and I'm not just saying this I mean I've been I go to a lot of conferences and I meet a lot of investors and it's not shouldn't be a terrible surprise but that you know in in like in San Francisco this is this is a this is a heartbeat part of the industry and and there's a lot of focus on doing the right thing and giving something back while you're taking something from it and and social justice and and and environmental environmental for sure all of it so I you know that's that's nice but if it didn't if it doesn't make sense from an economic perspective and it doesn't make sense from from really a pathway to growth it's it's not going to work anyway so that they have to be combined yes yes it's also as you kind of walk us through this again this like macro perspective especially on like an emerging market of cannabis there's a whole bunch of regulatory stuff I mean with crypto we also saw a whole bunch of changes now and regulatory stuff that are going to be happening but it's it's like a little bit different with just like in a sense like if you're just upgrading like from a like gasoline combustion engines to electric engines you don't really need regulatory things a little bit on maybe incentives of sorts to transition people right but this is completely different we're talking like you said shipping across countries we're talking certain lots of countries still illegal in those countries so yeah so let's talk about how like yeah what where will regulatory things have to change in order to maximize and you were talking about there will be so many jobs that emerge from people getting work here and holding accountability so yeah so let's take us down like the regulatory well the regulatory area is one that first of all needs to to adjust to make companies have the ability to succeed so that means adjusting the regulatory framework as it exists around accounting so how companies actually record their business for taxation purposes so you know section 280e is a part of the tax code that basically still counts cannabis producers in the same way as folks that are creating and producing illicit drugs and things that are I think significantly fundamentally different but but what that also means or people that are involved in federally illegal industries it could be running guns it could be anything and so the tax law says anybody who's involved in a schedule one something cannot subtract cost of goods sold and have traditional accounting metrics that allow them to actually be profitable effectively so so there's a case where just some of the regulators need to need to make it possible for companies that have a great retail footprint and are trying to you know operate in sometimes what's a relatively low margin environment have the ability to succeed there's the whole banking dynamic one of the things we're seeing in the capital markets today and a big part of our investor panel today was was how it's it's a painful painful bear market right now in in the public markets for the publicly traded stuff a lot of its canadian some of them are a lot of them are us frankly because israeli now also some of the israelis as well yeah i mean there's a couple australians but but the ability to raise capital in some of the deepest most sophisticated capital markets and pools of capital in the world which is the united states of america this isn't just me waving a flag this is just a fact so these are companies that cannot do that in a traditional way they're very smart very risk aware investors that are sophisticated that want to invest in the sector understand that it's not you know a straight pathway to to the pot of gold but understand the but they they can't invest in it because of the federal dynamics so what that's doing is it's keeping big pools of capital out of this market and it means that after an initial burst of enthusiasm and excitement by high net worth and prep private banks and non traditional institutions which raised a lot of money for the industry those folks are tapped out there's no new capital coming into the industry there's been very there's been no new capital that's coming to the industry for i would argue six to nine months and you're seeing it in the way these companies are trading they're trying to come to market they need growth capital a lot of these companies are in capex and opx heavy businesses in within the industry which is inherently a kind of a high capex growth industry any industry that's a growth industry is capital intensive i mean look at netflix they're still not making money you know so and it's netflix so this has put a crimp on the entire investment landscape and it's so it's back to the regulatory framework you're asking me about these are the things that need to be adjusted and there was some recent regulation that went through the house on what's called the safe act which will give investors will give companies the opportunity possibly to at least bank normally so to have credit lines to actually be able to do traditional payroll to actually keep bank accounts this is more so that people aren't walking around with suitcases of cash and that you know people who are interesting so wells and the bank of america can have cannabis companies they can't they they will be able to if this goes phase one was getting through the house cool and and now this bill is is going to be read in the senate at some point i think in the fall interesting okay so this uh maybe in a macro way this can be thought of as going from the old codes as emerging markets erupt is to as quickly and also intelligently as possible adjust to the new codes that enable the emerging market to actually rise and succeed and i also liked yeah all the way from basic accounting stuff like safe back to all the way up to geopolitical like how do you take this big pool of venture money that's really wanting to get involved and enable it to get involved so is this usually like the thing that happens is that it's just like a period we've seen some of some of these uh phases i would characterize as very similar so if we're going to take our same you know kind of metaphor metaphor and comparison to emerging markets we i think we have seen some of this before yeah an example for for me was uh when i was living in russia the state gas company gas prom is the biggest gas company in the world and and at a time when investing in natural resources was a very big investment trend in the early 2000s through really through the financial crisis there was this sense that you know the world was growing china was consuming more all these you know asian countries and south american countries and younger populations middle eastern countries were consuming needed more money so anyway people started investing in commodities back to russia and gas gas prom was one of the most interesting investments for a lot of global investors but as a non resident investor a non resident of russia investing in a russian company required a a a a shell and a structure and a creative solution which is what's going on here too so you know my investors sitting in new york or sitting in boston and some of the big mutual funds or some of the big heads funds that are sitting out here in san fran or la you know they're like tim i want to on gas prom how do i do it we had to create a legal structure that allowed them a participation in a we set up a russian company because i actually worked for a russian bank now we don't need to get into the weeds of this but the point is that ultimately there was a lot of capital that could never invest in russia because a lot of the state-owned companies you couldn't invest in there was a it was a federal dynamic in russia um there was a time in russia think about um the friction less is something that we could maybe say efficient yeah the more efficient yeah and and think about think about uh if you're a cannabis investor and you've been watching this industry for a while and you've been watching how canada certainly had a a head start and um in terms of the capital markets arguably i think probably this area would argue we were we were the ones that started this industry in a real way in this country and in in north america but but um i remember where i was the day i heard constellation brands was taking a a majority ownership stake or had the optionality to do that in canopy growth i remember where i was i was remembered looking at the markets i was it was staggering and shocking i said okay here we go we're going to see every major consumer products company come in because why wouldn't they yeah um and in in constellations perspective i don't think this is about thc infused beverages and an alternative to their beer market and i don't think i think it's more about diversification of portfolio i think it i think it is i think it's i think i think constellation is a global consumer products company that that is a very sophisticated brand and distribution play so so back to so then then there's the reliability the accountability like totally yeah diversifying the portfolio but are there's there also that ethical or moral or spiritual alignment with ascension as well not just the buck making well i mean you know i i feel like we're in my sunday school class right now man i you know i i i teach fourth grade sunday school by the way so yeah i talked about the ascension but but but to but the point i'm making is a company like constellation raises the bar for the entire industry um but it also at that time it drove valuations way higher because everybody said who's the next one to come in and of course you know mulson cores did a jv with hexo and anhyzer bud did a jv with tillray and so every some of the biggest most sophisticated consumer products companies in the world a lot of them happening to be associated to the spirits industry but i'm just you know back to my metaphors i remember when when telonore which is norway's largest phone company decided to buy up gsm basically sell mobile licenses in eastern europe and they started buying them in russia and they started buying them in turkey and and basically it was again a global multinational saying we want to be exposed to this consumer growth in this part of the world where we aren't yet and we're going to take a a risky leap of faith that we're going to be able to survive in the regulatory environment and then our shareholders are not going to um you know be very concerned that we're changing our business model they said we want to be a part of this growth the minute those big multinational or when when gm started investing in in in auto plants in russia or when when when linar and some of the big home builders started investing in brazil and investing in essentially building homes for the new middle class coming up in the rest of the world i mean this is this is the exciting part about our industry right now which is where you know you this is i think our conversation to tie a thread around where we've been talking for the last few minutes is we've seen this before at other times uh in investment history and we've seen it in other places where you had a consumption trend that was very exciting and big sophisticated players came into a small pool and right now it's still kind of a small pool not only because of the size of the investments in the companies but it's made smaller because the regulatory environment is very restrictive and it keeps people out and it's kept out a lot of these big players but they're they're coming they're going to be here well okay so could it then be safe to say that with emerging markets progressing that the the smaller emerging markets slowly thanks to regulatory frameworks opening up it becomes uh there's more funding that comes in and the funding can come in from some of the bigger players driving up valuations so this is kind of a reoccurring theme that comes up and then more and more jobs open up the economy continues to grow um the people get more work from it people get like in for the benefits of of a cannabis it could be for textile purposes for medicinal purposes all the benefits of that wellness side and so then die so then the uh this is so with with the big players coming in driving up valuations and also it's kind of interesting thinking about like the little combinatorics of like Canada or Israel or the United States or like other even more constrictionist markets like like a Chinese market that what would it look like for 1.4 billion people to gain access to right cannabis as a wellness if it happens well you know we talked about this on our panel today one of the investors talked about how the the Chinese hemp markets are really kind of the exciting new frontier out there in terms of the sheer scale and the ability of you know the growing conditions the labor force I mean they will be producing probably a majority of the world's hemp whether whether it will be exported back here you know and China's been doing this in other agricultural markets as well even though it you know this may be an evergreen moment in time this interview but I mean if we snap to the trade war that's going on right now you know it's about is Chinese buying enough of our soybeans and I don't think the Chinese are going to be buying our hemp I think the Chinese are going to be um growing their own hemp and that's you know that is part of the excitement of this being a global market and interestingly enough potentially used for uh the purposes of us like as an economic commodity and not necessarily as an industrial commodity and not necessarily as a uh as an additional consumption yes wow so could be banned in that sense as a consumption and could be hard enough hard to know that would be also crazy to see if a country would do something regulatory like that where it would just be for an industrial commodity and not for think about um some of the far eastern medicines though I mean think about what people in this country have adopted in terms of non-pharmaceutical wellness products that are have originated from China I mean we're talking about things like kinko and and but but if you go into a lot of the wellness stores holistic medicine uh eastern medicines are I mean I would think this would be kind of a symbiotic dynamic in China I realize China is going to be uh highly regulating any consumer product and consumer uh you know access points but I I actually think that hemp products for consumption and for wellness and you know cannabinoid you know research and and and development for these products even in non-thc I think is is it to me it makes sense with based upon where China has come from on these non-pharmacological medicines so okay let's do uh yeah we just came back from partnership interviews in China and we loved our experience there and it would be so cool to see how maybe a more uh a collaborative and harmonious relationship with a with something like cannabis could happen around the different countries and the frameworks around the world so this question is then about oh there's a couple more a couple more questions um this one is on moving into like uh let's say like a decade down the line regulatory frameworks have opened up the old codes are archived and the new codes are implemented uh now uh maybe it's even a very serious opening up of of um of the the the micro investment side for uh for the young uh uh short change dogs to come in for a hundred thousand a hundred or a thousand dollar investments into into these organizations does it seem like then uh that that is and like the job market and the way that people could even though AI comes in and does things like take away uh some of the work around maybe retail or automotive or manufacturing and these other industries call centers and stuff but does it open up jobs and cannabis what do those look like what do you think well I I think if this develops the way people want it to develop the unfortunate part of that is it's it's going there's going to be you know technology is also going to drive a lot of disruption yeah so it's no different than a lot of consumer products and it's going to make the supply chain more efficient it's going to make the the the marketing and the distribution and the the consumer uh you know understand the consumer tastes and preferences and and obviously building data pools that are based upon consumption trends and and that's just to understand who's going to sell what to who but in terms of production in terms of distribution and in terms of you know all the logistics and ERP I mean so it you know the the good and the bad news here is we want we we want those cannabis jobs at some point if we want this to evolve to get disrupted it has to happen and so what makes the cannabis industry so interesting right now is as a consumer product it's it's popping up on the shelves uh or through amazon going down the same road and sitting not necessarily right next to on the shelves is you know Oreo cookies and and you know Wheaties but but I mean consumer products um are being distributed to consumers in very sophisticated ways through very sophisticated means based upon very sophisticated consumer marketing research based upon data so why is cannabis going to be any different in fact that's why it's moving at warp speed because while those tech technological developments and and pinpoint focused on certain industries and disruption are changing other industries cannabis is being born and those things are changing cannabis at the same time so it's moving twice as fast and that's that's good news but it's probably scary and it's hard to you can't think that cannabis is going to be able to kind of keep this holistic um you know kind of organic localized uh community that's not disrupted by big business so well we've not seen emerging markets rise with artificial intelligence until now and uh so now it'll be cool to see what those two rising simultaneously look like also um on especially like this is i'm really interested in your perspective here if then uh as emerging markets have historically risen uh big dogs come in swoop majority of initial investments and profits from that and later uh makes it easier for smaller dogs to come in and get maybe breadcrumbs let's say right um would you then say that the future it'll be really important to do things like open up the investment for the small people around the world to do these micro investments 10 bucks 100 bucks a thousand bucks in uh to try and uh spread the the fruits uh yeah i think i think uh if you think about um you know different types of uh landing platforms and you know vc kind of you know for the masses raised platforms we've seen a bunch of them um in in pretty traditional investment in and vc private equity worlds i think expecting that to happen in cannabis is is is appropriate and it will um i think one of the reasons why we like the sec and one of the reasons why there is regulation for all investors of all asset classes is because you know with with more immature industries with highly speculative uh stuff where there is a lot of hysteria and there is a lot of public interest and there's not a lot of information um this is actually these are the times we want our government to protect us i know a lot of us would rather have less government i'm probably one of them but um i think to expect uh cannabis investing for the masses for the small dogs to to take the place of the same way they can get involved in and you know some kind of a a technological process or investing in tesla or you know whatever it is and and and things that seem to be leading edge and exciting socially conscious that's all great um and i think that will happen in cannabis i just think we the industry in the capital markets and the the investment uh infrastructure needs to get more sophisticated before you can let these nickels and dimes and small dogs in and i think you're doing it's it's in there it's in their best interest i think yeah yeah and it's just difficult to figure out how an sec would possibly be able to make it so that ten dollar investments can go in our hundred dollar investments and so actually private companies have went and taken on the initiative to buy in 50 million bucks into one of the big space x's and then redistribute out 50 dollar bids into that pool i think that stuff so awesome democratizing um financial investment i think is such an important part of financial literacy um eradicating poverty uh yeah and uplifting people around the world um there's stuff yeah yeah the two last questions that we ask all of our guests on the show okay first one is do you think we're in a simulation you and i yeah are we in a simulation no we're having a conversation my friend we're just uh um you know but you tell me are we in a simulation this is a very interesting question that we like polling what are we defining a simulation this is another great question how do you define it yeah because uh let's think about technology okay technology itself getting towards super intelligence is able to create simulations of civilizations of again just big bangs and universes and watch their evolution and how is that not already what this potentially is well we are um i think what's wonderful about this industry is there are some elements as we get into both science and and um how people are processing information and the impact of cannabis and cannabinoids and some of the sciences we don't really know what's going on one of the powerful and exciting parts of it's a sub vertical of everything we're talking about is that from a science and research perspective the power of the plant and the power of the usages um are you know so being able to actually get into literal simulations of of truly where we can go with with the technology is part of uh you know why i think a lot of us are here um so you know i i think there's there's a literal translation to this there's a figurative translation to this for an industry that we're kind of trying to figure out where we're going and and the implications it's changing society on some level let's let's uh change medicine let's also tie that into what we were just mentioning how could there's a sec there's code there's the counting code there's the safe act code right what if you deployed that code update in a simulation of the united states economy and watched its evolution for five years before you actually did it in the physical world so that's the kind of stuff potentially that you could leverage with the the technologies i think we should we shall we will we probably are but but in the same way in my first job out of business school i went through a training program at ubs and they gave us market simulators and they gave us different inputs um yeah and and to see you know how we were going to manage and assess you know assets during um you know this this macroeconomic number hits the tape um what are markets going to do and so i mean i i think we can do that um but it's in a vacuum i mean i and i realize simulations have become a lot more sophisticated so um even the market simulations that one might do at a training program at ubs coming out of school today is different than what's probably seeming pretty archaic to the one i was taking a time that seemed very innovative and edgy but um decades from now but but but but there's no question whatever we can simulate today is is going to give us information on tomorrow accepting it as gospel i think is is would be scary and the last question we like asking is what do you think is the most beautiful thing in the world the most beautiful thing in my family i mean i you know the the relationships that people have with each other um i think growing into uh you know coexistence in the human i mean people at different times in their life cycle are uh more or less comfortable in their own skin and watching people um and having people get comfortable in their skin together and growing together but that that comes that to me happens in a family environment right so i'm a father i've got kids uh my kids are you know six and 11 and to me that's the most beautiful thing in the world because unfortunately uh some of the some of the the the oxidants of the world haven't hit these kids yet and and you know you try to you try to keep that as pure as possible but i i really do think to me the things that make me happiest are human interactions so yes my family yes you know people friends whatever communities and so that that to me is where beauty is derived i love that the relationships and then also that the comfortability in the skin evolving uh over time yep in our own passion and people change people evolve i mean they evolve as people they evolve in their comfort levels in society and hopefully for the better i mean i think yeah you know wow as a 20 year old i was very different very different yeah yeah i was really cool but i was really different i'm just kidding yeah so i thought a lot a lot more time to have soaked in the reality that we're in and become wiser and more knowledgeable and yeah and this has been such a pleasure thank you for coming on the show really appreciate thanks everyone for tuning in we'd love to hear your thoughts in the comments below on the episode let us know what you're thinking check out the links below to tim's work check out the links below to a new west summit support the organizations the artists the entrepreneurs the leaders around the world that you believe in you can support simulation our links are below as well and go and build the future everyone manifest your dreams into the world we love you very much thanks for tuning in we'll see you soon peace