[00:22:52] What motivates the obstacle or restriction Lenders` hesitation to engage in this space is a big part of what motivates it. The inability of banks to lend to space is also a big part of what motivates it. A conventional line of credit can be issued on a personal guarantee that is still possible or on a real estate guarantee that is largely possible. However, with accounts receivable and other forms of financing, it is extremely difficult to access these lines of credit. So if you are not willing to provide a personal guarantee for real estate or have real estate involved, and even with those, it can be very difficult. Today, access to credit is simply not widely available. And as that credit increases, so does the availability of credit. Instead, we will see a normalization between debt and equity, and we will see that balance sheets will be very different from what they are today. [00:23:44] Yes yes, it skews the total capitalization of the balance sheet for most of these companies. So federalization is happening federal legalization. Who do you think will be the winners and who do you think will be the losers? [00:12:16] Yes. I think you`re raising a kind of situation that you`re familiar with because of the federal illegality that this kind of open playing field creates for a while, and a lot of these spaces where you know the big players don`t want to come because they don`t want to tarnish their businesses by dealing with cannabis, that it`s really legal.
But I think everyone expects that to happen as soon as it happens, and I think you mentioned earlier that you`re planning for the end of next year or early next year, you know there`s kind of movement on the federal side right now that`s going to change a lot of these companies. Either you know you`re entering and eliminating them, you know if it`s services and products in space or some kind of mass acquisition mode. I mean, I think you see how you see that. I mean, there are different parts of this kind of space that you know can be solved by existing companies, and they just don`t do it because they don`t want to. They don`t want to touch it now. In other places, there may not be so many unique areas of cannabis that a pharmaceutical company hasn`t been able to completely replace. Do you see businesses positioning themselves for adoption and when that will happen, or I think how do you advise businesses on how to deal with this impending federal legalization and how it will affect them? [00:23:55] I mean, what are the things that are going to show how well someone survives this federal legalization of some kind of access to capital from the point of view of access to capital. The people who will survive legalization are those who are able to get the right kind of capital to grow their businesses. to resist the onslaught of big business, as we discussed earlier.
All these companies are waiting to arrive. There is no doubt that Big Ag Big Food Big Liquor Big Pharma Big Tobacco Big Entertainment Big Hospitality, the list goes on, will come into play. Second, they are allowed to do so. And when that happens, unfortunately, the vast majority of small businesses will be wiped out. It`s just not a way for them to compete. Therefore, access to capital is extremely important, and it is important to have access to it sooner or later so that we have the opportunity to build our businesses properly. And so that we have the opportunity to win and gain enough market share not to face premature disappearance in a completely legal environment. [00:29:07] Perfect. Thank you so much for taking the time, and while I plan to schedule another episode with you in about a year, we`ll see if legalization has taken place, and we`ll discuss it then. [00:26:30] And that`s going to affect the things that you know, a question I have is that you know we`ve talked a lot about the big banks about these big players, you know how you know that they`re big professional investors, how can we involve more of the general population in this industry. They know we need all that capital.
How can people participate? [00:10:42] Focus my efforts on the private space. That direction has evolved over time as the industry has changed, as we are now looking at the industry that I can share in the supply chain of the plant that affects part of the industry. The areas with the utmost attention for us as brands. We have no illusions that cannabis is an emerging market and, as such, it has many of the characteristics common to emerging markets. One of these characteristics is fragmentation, and as emerging markets mature, they tend to evolve into a legalistic structure. So we expect there to be a lot of consolidation and also a lot of commercialization of different parts of the supply chain. So when I think about where you can generate value over time, it`s Mindshare that can end up helping capture the wallet share, and that Mindshare is from a brand perspective. So that`s a big part of our attention on the touch side of the plane on the side of the company. We`re looking for scalable ways that don`t try to compete with the big boys in a way that eliminates people when multinationals are allowed to play big data. Genomics Robotics Machine Learning Machine Vision All of this is kind of a set of ripe spaces for a lot of innovation and innovation driven by the margins that this plan offers us.
We`re not very interested in mobile payments or anything to do with banks that is in danger of being wiped out the day people like JP Morgan decide to walk into the room. [00:13:29] You know, we`ve seen a similar movie before. It only plays in another theater at that time. I expect that as federal legalization approaches, we will see a massive wave of consolidation, which will only be overshadowed by a larger wave of consolidation after legalization. So since we`re looking at legalization from an entrepreneurial perspective in this industry, we only see one of the three options for each company in the industry. They are either strong enough to buy. Everything`s fine. Either you`re strong enough to fend for yourself in an entirely federal legal environment, or you`re attractive enough to be bought, or you`ll be wiped out. And since we saw a 90% drop on the tech space side, the first crash, and a similar drop in builders after the mortgage crash, I also expect a very similar number four for the cannabis space. That`s a lot of companies that won`t survive full legalization at the federal level, and they understand that if they`re not attractive enough, they need to be strong enough, and to be strong enough, it`s helpful to team up with others who can increase your strength.
That`s what`s driving that, what I`m going to say, is the beginning of an important cycle in our industry, and we`re starting to see it increase in some sectors. I suspect it will increase further, and as we move to legalization, we will see a seismic shift in the complexity and fragmentation that is so prevalent in our industry today. [00:05:46] I don`t think it`s a trend. So I don`t think we`re at the beginning of a trend. I think it`s a return to normalization and I think the last 80 years have been a deviation again. So I think in terms of the current position. I answer your question from different angles. From a political point of view, we are very close to the end of prohibition.
I even suspect that we will see effective federal legalization as early as next year, with full federal legalization possible by 2021 from a societal perspective. I think a lot of the stigma around the plant has decreased. In fact, it has been abandoned in very few of the 32 states that have authorized medical use, and in the dozen states that have allowed adult use. This change in stigma and propaganda continues to spread throughout the country in a very positive way from a religious point of view. I don`t really know if I have much to say about that, other than the fact that there are many religions that use cannabis and consume it in a very spiritual way. And from a U.S. medical perspective, I think there`s still a long way to go, but we`re seeing the first images and very powerful stories of children and the elderly who benefited from this plan when traditional medicine or allopathic medicine couldn`t help them.