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It has been an interesting year for the cannabis industry.  With many new states coming on board, the vast increase in cost of products, and a recession looming, we have heard that cannabis is an essential industry.  Although the cannabis industry may be essential it is not recession or inflation proof, maybe resistant, but not proof.   With many people trying to juggle groceries, gas, and other essential bills we have seen a shift in the products that are being sold.  Harry Brelsford of the CannaTech Group sits down with Steve Gutterman of Falcon Brands to chat about the swing in the industry and what he has seen. 

Video Transcription  

Harry Brelsford 

Hey everybody. Welcome back to the Canna tech podcast one of our rotating, I’m gonna say rotating sharks, like the the TV show or rotating analysts is probably a better way to put it. Steve Goodman from Falcon now welcome back how you doing?

Steve Gutterman 

I am doing well, good to talk to you again.

Harry Brelsford 

Thanks. So what’s the State of the Union? From your point of view? You always have really good insight. You know, you’re you’re doing it every day. How are things?

Steve Gutterman 

Well, this has been an interesting year for cannabis, to say the least. Yeah, I think only learned as an industry is that yes, we are an essential industry. And yes, people will always buy cannabis products. But we are not recession or inflation, proof, maybe resistant, but not proof. Right. And so for example, in California, basket size for average transactions has gone from about $110 to $70. That’s a steep decline, right. And and I think that it makes sense, right, people are walking into dispensaries and saying, Look, I still want and need cannabis products. But I also need to pay for groceries. And I also need to buy gas. And so give me something potent and cheap.

Harry Brelsford 

That that, that will suffice. So

Steve Gutterman 

we’ve definitely seen that we’ve seen a shift in the products that we’re selling the most of right. And so we see our full spectrum vapes flying off the shelves, which is great, we see some of our infused pre rolls, flying off the shelves, because people are really looking for value. They’re looking for interesting stuff and value. Now for us, for us at Falcon, it’s been a good year. And I’m very grateful to be able to report that, because not everybody can say that right? For us our revenues down this year, just like many other companies, but because we’ve invested in previous years so heavily in our brand, and in these great products that people love. We’ve actually seen our profit or profitability, our gross margins all increase. And so we’re we’re, from a financial standpoint, having a better year in 2022, than we did in 2021. But I think, like I said, we’re very, we’re very grateful about that. We’re mindful that not everybody can say that. And we feel like it’s maybe a unique byproduct of, of our model, and then all the work that we’ve done to build and fortify these brands,

Harry Brelsford 

man. Yeah, I’m impressed. I, yeah, I’m a bottom line kind of guy. You know that. In my prior life, my my other company, people thought we had this really big top line. We didn’t I mean, I’m glad that we projected larger than life. But what I was more proud of Steve, not surprisingly, was the bottom line. How much am I walking with man?

Steve Gutterman 

That’s exactly right.

Harry Brelsford 

And in my industry, I didn’t want to I’m privately held, and it’s competitive. So I did not necessarily want to share the details right now. Remind me, are you publicly traded?

Steve Gutterman 

We are not, we are not. And certainly we would look at that as an interesting next evolution for our company. So far, we have chosen not to vigorously pursue that simply because the markets didn’t support it. And I think that was wise. That was That turned out to be a wise decision by us. But it certainly would be something that would be a natural next step for us. Yeah.

Harry Brelsford 

And finally, I understand I’m gonna I’m gonna miss you at mjbizcon Um, I’m, I respect your decision. You said it. Maybe not the highest and best use of your time. Any any thoughts on that? And other shows? Or if you don’t mind? Yeah, sure. Well, look, we love

Steve Gutterman 

mjbizcon. And we’ve we’ve been there really in every other year, and we’ll be back. It just in this particular time. We’re working on a bunch of very interesting and creative projects for us. I guess. We hope them to be a creative we believe them to be a painting right? Can’t say that in advance all the time. But we think they’re they think we think they look good. And so that’s that’s part of it. The other part of it is that look, we’ve been doing this for a long time. And so most of the people ball that we would talk to at mjbizcon we’re talking to anyway, but that is not to disparage the fine folk who put on mjbizcon because it’s one of the best and we will, you know, we we’ve gotten a lot out of previous conferences and we’ll be back.

Harry Brelsford 

Yeah, that’s that’s a whole nother practice for another day. It’s a whole nother discussion. You know, you again, you’d certainly be aware of the granddaddy of them all shows. So we had Comdex and now you have CES, you know, you started getting up to that size the show and it with Comdex in particular, it there were at least with me, there were relevancy questions, it was a little bit like, you know, I want to go to the Super Bowl once but it’s crowded, it’s expensive. You gotta you gotta wait in line. It you know, it got too big and MJ biz calm is going to have to be mindful of that, because honestly, I really like some of the smaller regional shows that are more intimate.

Steve Gutterman 

Yeah, you know, it can’t be both. True. And I think that the other thing is that you need to go into any of these shows whether they’re smaller or larger, with a real strategy beforehand, about how you’re going to spend your time. And so that’s, that’s become definitively true at conferences like mjbizcon, or Ben, Zynga, where there’s so many people and then you know, you’re gonna run into a bunch of people. So you gotta, you got to plan that out a little bit in advance.

Harry Brelsford 

All right, well, hey, let me be the first to wish you happy holidays and happy new year because we’re going to talk to you after that. Awesome.

Steve Gutterman 

All right. Well, always great talking. And I guess we’ll we’ll talk soon.

Harry Brelsford 

Yeah, thanks a lot. Okay. Thank

Steve Gutterman 

you. Bye.