At Harris Bricken, we keep close tabs on what is happening around the world, and we know that our friends and clients do, as well. We are happy to provide this podcast series: Global Law and Business, hosted by international attorneys Fred Rocafort and Jonathan Bench, where we look at the world by talking with business leaders, innovators, service providers, manufacturers, and government leaders around the globe.
- The evolution of the cannabis industry
- Why it’s harder to succeed in the cannabis space than in any other
- Ryan’s efforts to help cannabis companies source ethically
- Why entrepreneurship can be a “poison”
- How Ryan’s interest in social justice dovetails with his business activities
- Listening, and watching recommendations from:
- Tuxedo Park, by Jennet Conant
- Robinhood Snacks
- The Paradox of Choice: Why More Is Less, by Barry Schwartz
- The Art of Learning: An Inner Journey to Optimal Performance, by Joshua Waitzkin
- “You will have a digital avatar sooner than you think,” by Jennifer Alsever (Utah Business)
This podcast audio has been transcribed by an automatic transcriber.
Jonathan Bench 00:07
Global law and global business go hand in hand, but never seem to keep pace with each other. The importance on the global stage of developing and developed nations waxes and wanes, while consumption and interconnectedness steadily increase all the while laws and regulations change incessantly requiring businesses to stay nimble. But how do we make sense of it all? Welcome to Global Law and Business hosted by Harris Bricken International Business attorneys. I’m Fred Rocafort. And I’m Jonathan Bench. Every week, we take a targeted look at legal and economic developments in locales around the world as we try to decipher global trends in law and business with the help of international experts. We cover continents, countries, regimes, governance, finance, legal developments, and whatever is trending on Twitter. We covered the important the seemingly unimportant, the relatively simple and the complex. We hope you enjoyed today’s podcast. please connect with us on social media to comment and suggest future topics and guests.
Fred Rocafort 01:22
- Ryan Ansin is an entrepreneur, early stage investor and philanthropist focused on using this holistic combination to generate returns and positive impact for those in the targeted communities where he works. Ryan, welcome to Harris Bricken’s Global Law and Business. It’s a pleasure to have you on the podcast.
Ryan Ansin 01:40
Great to be here, thank you.
Fred Rocafort 01:42
To get things started, why don’t you tell us a little bit more about yourself? My very short introductions certainly does no justice to your extensive bio. So please tell us a bit more about who you are and what you do.
Ryan Ansin 01:55
Sure, thank you for having me. I am a, I often say accidental entrepreneur. I think that entrepreneurialism can be a poison, a sickness and a complicated life. And I have enjoyed it quite a bit, following my nose into new areas, new industries, new geographies throughout my early career, which started in my early teens. And as you said, I try with everything that I do to make sure that I’m not duplicating efforts, I’m not going down one path than that I then need to double back and fix something. What I often see in the world of social enterprise, or within the entrepreneurial communities where we care about the outcomes, from a triple bottom line perspective, is people often create destruction while trying to succeed in any particular endeavor. And then they go back and try to do good. So someone, just as an example, could make a huge amount of money in oil and gas and then start to kill her care about environmentalism and start donating there at the end of life. And I’ve been really fortunate to come from a family that has been entrepreneurial for four or five generations, and really sees the benefit in working holistically around your operating companies, your investments, your philanthropy, and even your your community and friend level engagement. So that’s what I do. And I get that that’s really high level, but some people may ask, what is the what is the overlap or what is the through line but that that ties my early career together? Between film finance extractives and the diamond industry, now cannabis and all kinds of things after cannabis that I’m starting to work on? And the answer to what is the through line that people don’t recognize, because all those things seem really scattered. But they’re industries where the margin can be so great that you can give away money and prop up other entrepreneurs and be a great community member in everything that you do within those industries because of the margin, instead of trying to succeed and then looking back and fixing your problems in the week.
Jonathan Bench 03:54
So Ryan, I know you as a typical entrepreneur, you have your fingers in a lot of pies and you got a lot of different experience and probably true to entrepreneurial form. It’s been unstructured, to say the least. But let’s talk about the cannabis industry for a minute. Fred and I have quite a bit of experience with clients in the cannabis industry and in various states, various countries, various parts of the supply chain. like to hear more about what made you get into the cannabis industry, and what you’ve seen change. And what you see coming down the pipe as well.
Ryan Ansin 05:22
Yeah, let’s bifurcate those three chapters. Briefly, what got me in legalization of cannabis was always a topic at our dinner table. Like my grandfather, was what I lovingly refer to as a giraffe, he stuck his neck out on behalf of others. In many ways, he really helped lead the charge in the allowance of gay marriage across the United States. And he was also a powerful voice in in the legalization movement, way before it was invoked. And so the cannabis industry was always, I was always aware of it. But only recently did we get involved commercially. And the way that happened was I was working in Sierra Leone, on a diamond mining initiative, bringing transparency to alluvial mining, in allowing those mines to immediately go into agricultural use when the Ebola crisis hit in West Africa, and I needed to leave, and so we’ll return to bringing transparency into the diamond world lightly just through lab grown stones now. However, as I came back to the United States, it was clear that an uncle of mine wanted to rid himself of a previously operating asset in our family’s portfolio, which was one of many shoe factories that we held and operated and in Fitchburg, Massachusetts, and I always pledged to bring jobs back to Fitchburg after having watched the demise of many post industrial zones in the United States. And so I thought this would be a really great spot for basil strawberries microgreens. And it turns out, it wasn’t for a number of reasons. But it was ideal for medicinal cannabis when I started getting involved at 2016. And now nearly six years later, the industry is booming, it’s complex. And I remain really engaged on the social justice side in a number of ways inside and outside of that operating company. I continue to invest in the industry, through the tidal waves that are bouncing every day in cannabis. But it’s been a fascinating journey. We’re one of the larger wholesalers in Massachusetts, we’re now branching into adult use retail in 2022. But really proud to have created jobs, people ask me how’s it going? And any, any entrepreneur who’s been in cannabis for this amount of time can tell you that that’s there’s a complicated answer there. But having created hundreds of jobs and helped to influence thousands more through different initiatives within those industrial towns that I care about, we’ve done a lot of good. So the yardstick that I look at is, how have we engaged the community? How have we created careers, not just jobs? And how are we helping people get off of more harmful substances from alcohol all the way up and down onto cannabis or just living healthier lives? So it’s been a fantastic journey throughout the the six years in the industry. And I don’t expect to leave completely, but I am looking at all kinds of other spaces. Happy to double click on other aspects because you asked three questions in one.
Jonathan Bench 09:09
Well, I’m more curious about what you’ve seen from your entrepreneurial standpoint. Right. I mean, you said that Boston is going to be rolling out or Massachusetts is rolling out quite a bit this year in 2022. So what are you seeing happening in the industry where you have eyes on it? You don’t need to speculate, but what are you seeing, you know, are there people always ask me this question. That’s why I like to turn it around to entrepreneurs, right. As a business lawyer, people want to know what I see from my vantage point. And I see a lot of different things depending on which state I’m working in. And kind of the general maturity of the market, you know, cannabis, marijuana versus hemp. So it whatever comes to mind, right, this is a free ranging conversation as if we were sitting around your very interesting dinner table.
Ryan Ansin 09:51
Yeah. Lots of things are happening. And they’re happening at a greater speed than ever. When I got involved the idea of a multi state operator was just starting to emerge. MedMen was raising money to vertically integrate the first MSO. And ideas were big and broad and scary and expensive. And my partner and I really felt that even in a small state like Massachusetts of about 7 million people, the goal should really be to run a great company not to create a quick flip licensing structure, nor create a vapid, public publicly traded hold CO, that you’ve just hold on to your hunches and pray that it all works out. And of course, there are five or six success stories of that, but there are probably around 10,000, or something like that. But definitely in the 1000s of people that said they were going to raise 100 million in a fund or that they’re going to be the next big MSO. Or they’re going to be the you name the big company of cannabis, the Whole Foods of cannabis, the Amazon of cannabis, the Uber of cannabis, this, that. And almost unilaterally those have failed. There are, of course, needles in the haystack, like any other boom and bust cycle, I’m really glad to hold shares of some of them a little bit because of spray and pray a little bit because I was able to diligence startup companies by using revolutionary clinics as as the operating company, I could validate people’s assumptions or claims. And so I was able to get in some companies early and appreciate and enjoy a little bit of that success. But I said this is happening quicker than ever. When a noose, when a state evolves its regulatory position from nothing to med or for med to adult use, or straight to adult use, as it’s happened a couple times, it used to be the case that everyone was throwing spaghetti against the wall, seeing what worked and making adjustments over time. Now, many years into the industry’s history. There are really successful operating companies that are really successful strategies and financing in cannabis or finance and cannabis has evolved. When I started everything, be it real estate, an operating vertically integrated company, or a new technology, everything was venture. Now there are vehicles that are applicable to the different size shape stage of the company. And so you can approach this in a more sophisticated way. What’s ironic is, we’re six years later in the industry, then I stepped into it. Interest rates for early stage companies are pretty much the same, you know, a painful 15%, 16%, 18%. Plus warrants and all these other things that get into really predatory financing structures. And meanwhile, for the larger groups, because they’ve been directed in a different way, or that’s the perception, people are raising hundreds of millions of dollars at a whack. And that’s very hard to keep up with. So I think what the result is, is whenever there’s a new geography that becomes applicable, there’s the same number, even more potentially, of entrepreneurs that thinks that think that this is the holy grail. And I can’t express strongly enough that that’s a really dangerous perception. The tax structure of cannabis alone to at tax code makes this harder to succeed than almost any other industry. I often joke that I can’t wait to just sell T shirts on the beach in a non regulated business with unlimited upside or unlimited growth potential. Not hampered by these crazy rules. And when you when you overlay that with the illicit market or traditional market cost of capital taxes, complexity and the fact that this is a harder race than ever. I really caution people, operators and family offices from thinking that this is easy, or that if they grow it, they will come. It’s not an easy space. It’s the only thing easy about it is probably it’s easy to get in over your head.
Jonathan Bench 14:59
I think that’s a great summary. What about international? Do you have any experience or any data points from your international exposure international contacts about what’s going on globally in either the marijuana or the hemp industries?
Ryan Ansin 15:13
Yeah, each jurisdiction, regardless of what the boundary is termed, a state, a continent, country, a city, each locale is really unique. And the devil is in the details. So I was a GP of a fund in Hong Kong that invested in the space most actively in 2018, bit in 2019. And so we looked everywhere. And that pool of capital was more interested. They thought in CBD, because it could go more places, it was more aligned or akin to legacy industries. And I really argued against it, we made one small investment into a CBD company, it’s the only zero in my, in my portfolio in cannabis. And you know, it, it was terrifying. So, I mean, let me be more specific to really help your your folks. When a new place lights up, people think there’s going to be a market. And likely there is but the nature of the commodities being a race to zero or race to cost. And the devil being in the details such as does it a particular geography, let’s just say Germany because this is evolving quickly over there, does this geography allow for biosynthesized cannabinoids to be used? That’s a huge question. And people don’t really realize how big that is. But you know, Tylenol originated from a type of tree bark, the active ingredient in Tylenol, and we don’t strip birch trees and then boil it down to to cure a headache. These days of course we don’t, it’s a biosynthesized or kind of in our case a chemically synthesized product and cannabis will go that way with a lot of its its products, a lot of its form factors. The question is when, for what use, within what population, and if you’re spending 50, 100, or hundreds of millions of dollars standing up in industry or standing up a company on high cost structures to recreate agricultural products, you better be damn sure what can displace you. And ultimately, consumers want an outcome. They don’t necessarily just want to get Blotto or, or high or messed up whatever. Most consumers are seeking and outcome. They want anxiety relief, they want to sleep better, they want a more holistically wonderful life. And as we evolve, as the industry a cannabis industry evolves closer to the biopharmaceutical space, you’re going to see those solutions in greater professionalism in greater access, and some will include THC, which is the most highly regulated molecule in the space and some won’t. All of the other downstream cannabinoids, whether they’re harvested or synthesized, created in a fermentation tank, they will become increasingly targeted. So there’s kind of phase one of every geography where it goes from illicit to legal to ubiquitous and of course, the traditional market still has lower costs and no testing and all kinds of benefits as far as ease of access in some jurisdictions, which creates another problem entirely. But the net result is a very few number a very small number of winners have a huge number of folks that eventually just want their money back and, and and a good portion of folks that lose it all. Unfortunately, that’s the game. You know, people often point out that venture capital at large, has a 90% or 95% failure rate. And so you really want one grand slam to viable companies and then recognize seven losses. I think when you layer in regulations, and rapid rapid change, and tax tax problems, the likelihood of success is even smaller in cannabis, even though it’s a new industry. So maybe there’s less competition. But again, not for the faint of heart in the United States or elsewhere. And I would just point out that every country even when you just jump from Portugal, to France, or the UK, to, to Czech Republic or elsewhere, every country treats this very differently, just like every state treats it very differently in the United States. And and that makes or breaks you, you know, I know, I know, people quietly making a lot of money on CBD in France. I know a family office that lost nine figures on CBD in the United States. And they’re very sophisticated CPG people, in summary, the type of cannabinoid cannabinoids that you can use over what period of time for what ailments is what’s going to dictate the marketplace, and the longevity of the health of that marketplace. And that’s really complicated to research. And I definitely wouldn’t have known it coming into this six years ago.
Fred Rocafort 21:41
So Ryan, before we got started, we were talking about how we first got in touch. And that has to do with forced labor and the work that we’ve been doing here at the firm tracking that issue. And you recently started a new initiative called fair fixing, where basically you help cannabis companies source, ethically sourced materials. One example that you’ve provided was was cocoa, right, which is a product that that very clearly has a problematic history, as we’ve seen in in recent legislation that made it all the way to the Supreme Court, I believe. So we’d like to hear more about this initiative, and why you decided to look this way. And while we’re on the subject, tell us a bit about how you go about establishing the the ethical nature of a particular source, and how you interact with the end users of these materials to to help them understand what the underlying issues are.
Ryan Ansin 22:50
So, the reason i i started the concept and the company that is coming around this fair fixing is partly selfish. As I said, At the onset, we we try to generate returns while doing a lot of good and and then it’s it’s large part opportunistic, but following the same trends and the same coattails that other industries are experiencing. So as I said earlier, the rapid change in this industry is unique, the rapid race to the bottom, the rapid price normalization in every category, from flour to chocolate to vapes, and also otherwise, and so companies even like, Revolutionary, my company that I co founded, and in many that I’ve invested in, they feel it’s very responsible to focus entirely on cogs, because they’re showing their investors and proving on their balance sheets that they’re frugal and they can generate returns on limited capital basis, and therefore limiting risk. And so a company that thinks themself a vertically integrated cannabis company, you start growing and then you get into vapes because of the oils and then you get into the edibles because of the byproduct. They go down a very routine path of throwing spaghetti against the wall. And if the chocolate bars stick, then they keep making chocolate bars as inexpensively as possible. As you said, there’s legislation and all kinds of scrutiny on the chocolate industry, cacao industry globally, because there’s proven forced labor, child labor and other industries, let’s say technology are starting to catch up to this. Apple shut down an entire factory in a particular area of China because they realize that was forced labor and terrible practices going on. There’s just a big assembly in Connecticut, surrounding the construction and architecture industries. Pointing out that low cost building materials are often subsidized by forced labor. And so they’re trying to change that from the inside out. Cannabis being such a new industry has an opportunity to not screw it up so drastically at the onset, and I recognize we’re better part of a decade through this, but at least it’s not centuries, creating bad habits. And so what fair fixing represents first, informally, and it’s formalizing pretty quickly, because the need is there, and the want is there. But it’s really the intersection of two parts of my life. I used to do a good amount in supply chain tracking in fashion. And of course, in diamonds as I expressed with Clarity Project. And then getting into cannabis, it kind of blew my mind that this plant and its derivatives, which is supposed to represent peace, love, joy, togetherness, happiness, one with the planet, one with each other. And right, every wrong, right, this is a this is a social justice engine that people want to use to generate capital for reparations, they want to change the rules around expungement of of non violent cannabis related crimes, all of which I think are wonderful. I think it’s unlikely that an industry solves all of those problems, but wonderful, nonetheless. Yet what was happening, that really frustrated me was people would talk viscerally about cannabis being this engine for change, while munching on a chocolate bar that I know where their chocolate came from. And it’s pretty darn ugly. And it just made sense to do this internally at Revolutionary as a case study, to see what the cost is to shift over to, in our case, chocolate from Republica del Cacao in Ecuador, sugar from Native in Brazil, we’re working on MCT oil right now and vanilla, and cotton in our uniforms. And to help the larger brands and cannabis wake up because they either do it proactively, or they’ll need to do it in a hurry in the future, and that’s a liability. So it’s fun for me, frankly, because my only dog in the hunt is helping these communities. And so if someone turns me down, I only care because on behalf of the communities, I don’t care because of my wallet or my time. And I know it’s an eventuality that any folks that don’t want to do this now will need to. And so the groups that are are really excited about it, and whether they choose to be impact first or not, is totally up to their branding. But I really appreciate groups that see the issue, realize that cogs non cannabis cogs in a cannabis chocolate bar are de minimis proportional to the cost of the oil, the cost of the labor, the cost of the rent, so you might as well do it, right. And so that’s why I did it, was it’s low hanging fruit, it makes a lot of sense. And it absolutely changes lives in these communities. Now, how do we how do we find these groups the sources and engage them? Generally through distributors that are looking for these types of companies, because just by the nature of my desire to do it right at Revolutionary, that does not make me an import expert, Import export expert you know, with a country like Ecuador or Cote d’Ivoire, or wherever else, so I generally find the right distributor and then connect with the groups on the ground and validate it myself. And and then we build a relationship from there, but I do not like recreating wheels. I like any solution to be as elegant as possible. And and we’ve we’ve proven that out. So that’s been really exciting. It’s been really promising early days. It’s the right thing to do and to to do this at this time in the cannabis industry, I think is is really just pre emptive Really rectifying a lot of wrongs, that otherwise would continue to happen, not because of Mal intent. But because folks are chasing kind of the wrong goal that most people want rapid signals of growth, to then raise the next round of bigger money. And that’s great. And there are success stories from that strategy for sure. But I really harken back and appreciate as an example, jobs, desire with Apple to make everything beautiful, everything elegant, really thoughtful. And, and to slow down to speed up, I don’t think is a bad thing, ultimately, to your question on the end users. My first company, called EPHAS: Every Person Has A Story was a early technology distributor and educator in journalism, and photography around the world, before the cloud came out, and dissemination of information was still really difficult. But ultimately, the goal there was to more consistently connect donor bases to beneficiaries and underexposed areas around the world. And the same strategy is applicable to this. You can connect the end user eventually, or to the degree that the end user is interested directly to the farms. And I think that in our generation, I’m 34 and 35. In my generation, and my kids generation, I think, be it through QR codes, be it through RFID tracking, or new technologies, I think what is on in in our bodies will come under much greater scrutiny. I hope it does. Because I think that it’s short sighted to stand up for something that you believe in while creating destruction through ignorance. And I don’t believe in that I believe in once you have the information work to make the change. So that’s what’s very fixing students,
Jonathan Bench 32:13
You’ve given us a lot to think about. And I think our audience will appreciate your perspective, you’ve worn a lot of hats. And certainly I want to talk for a minute about your role as an investor. You advise a, every good investor, I tell this to my companies that are interacting with their prospective investors. You know, every great company wants to match up with great investors. And I think great investors are those that come with money and expertise and a willingness to teach along with the capital that they’re investing. So can you talk a little bit I mean, I’ve already gotten glimpses from your, from your last few minutes we spent together. But can you tell us what kind of advice you have for entrepreneurs who are seeking investment, who are seeking expertise, how to network within the capital community, and also how to find the right kinds of partners?
Ryan Ansin 33:06
One of my favorite expressions that I share with entrepreneurs often is, the best time to plant a tree is 20 years ago, the second best time is now. And I share that probably once a week, because about 20 times a week, people will ask me, how do I raise money from family offices? Thry asked me that because I was president of a group of initially 75, and we grew it to over 300 family offices. And so people perceive that I have a Rolodex of folks that want to give them money. And I generally take about one or two of those calls a week, out of 20 to have a funnel of opportunity, but also just to be helpful. And and what they’re actually asking is Ryan who will give me X number of millions of dollars, and not being a broker dealer and not being in that business, very rarely will I make a direct introduction. But the reason that that metaphor is important is in order to attract great capital, I believe it comes from authentic relationships and, and alignment of interest. And that comes at many levels, that alignment of interest. And so, you know, COVID is a whole new era of how people actually put the rubber to the road in networking. But I think it starts with curiosity and helping the other. Yes, you the entrepreneur need this type of resource, generally capital, badly, perhaps. But the person on the other side of the table is human too, and interested in interesting as well. And I think it’s those points of overlap, that are most important to solidify that then lead to dollars and cents, and targeted ROI and risk appetite. So I went over, I went through with one of my portfolio company CEOs the other day how I interact, I handwrite notes every night, to new friends, I journal every day and make note when I meet somebody, so that I can then see what we did together a year later, if we did anything together, and I can write them a note, appreciating what we did over the course of that year. And this sounds really onerous, but it’s, it’s really not how many people you meet in a year, that’s X, how many people you meet and do something with that’s why, and then extrapolate that further to how many of those will have will become meaningful, instead of just a stab at at a project, and that Z and it’s very few, if unless you’re a dilettante, in which case not much will be successful. And so I really do think while it’s not the answer, most people are looking for of you go to this place, and ask for this money, and you get it. I really do believe that this is a lifestyle, it’s a dedication to, to curiosity, and curiosity through other people’s passions that may align tangentially to yours and then become your passions. So that gets me excited. That’s, that’s how I’ve built a career, I try to give, you know, 10x the value to anyone that I meet, even interacting with a law firm that I found out cares about anti human trafficking, we’ve interacted for three minutes leading up to this via email, and then 60 minutes. So that’s 20 times my time, my input output. And it’s because you guys seem interesting, I assume that you therefore have interesting clients, I assume that could lead to deal flow or friendship or adventure. So I’m totally game to risk that 20x on my time, because you’re sophisticated, and we have aligned care, aligned themes that we care about. And that’s the same in the investment world. I met with a company two days ago, who is further along in solving a problem that I have cared about for a few years, which is diapers, filling up landfills. Seems so stupid, to me that a kid’s first impact on the world is something around 10,000 diapers in their first few years, not including all of the yogurt cups, and all this other crap that our parent our caring parents are putting into the ecosystem. I reached out to him totally blind, we had a couple people in common. And now there’s an opportunity either on that side, or on in that instance, I’m likely the funder that reached out to him, he doesn’t need me, he doesn’t need my money. But we have significantly enough aligned interests that I’m that could start a whole new chapter in my life. And if you can turn that table as an entrepreneur, make yourself available. Put yourself out there. I can’t see harm coming from that I can only see learning and opportunity.
Fred Rocafort 38:56
Well, Ryan, this has been a great fascinating conversation. I’ve really enjoyed it. And I’m glad that that that original that initial contact took place and led to this. Before we we sign off we like to finish our episodes with recommendations. It can be something you’ve read, something you’ve watched, something you’ve eaten.
Ryan Ansin 39:19
This is the only question I prepared for in your list. So I wanted to give it thought. I’ll give you four pieces of media. My favorite book of all time is Tuxedo Park. It’s a book about Alfred Loomis, and the band of characters that he brought together after becoming hugely financial, financially successful, leaving Wall Street and getting into the intersection of finance and science during World War II, fantastic book about the outcome of community and community thinking. Every day the only podcast that I listened to religiously is Robinhood Snacks. I think the two podcast hosts who are not friends of mine that I’d love them to be, but I don’t know them. I just love their podcast. I think they are curious and interesting and interested and brief. So many good ideas come from from that podcast. Another great book that I think about daily is Paradox of Choice 2004 by Barry Schwartz. In a world of excess of everything, we need to realize what is important whittle that down. And finally, The Art of Learning by Josh Waitzkin, former chess grandmaster and martial arts expert, just a wonderful frame on how to train your brain to achieve excellence across many forms of art, business and culture. And I think all of those things our canvas can’t miss forms of media.
Fred Rocafort 41:01
Well, clearly, clearly, you did your did your homework. And we appreciate that as we’re left with some solid recommendations. Jonathan, what about you?
Jonathan Bench 41:13
Ryan, set the bar way too high. So I’m going to take it where I was originally going to take it, which is into the metaverse. So Fred, and I, Fred, you know, that’s our audience doesn’t that we’ve been involved in quite a bit of web three projects in the last six months. And so I’m recommending a couple of articles for people who aren’t that familiar with web three, who don’t know what’s going on, who don’t understand why it’s important. So one is an article in, it was in Utah Business Magazine, and I’m based in Salt Lake, which is why these this has a Utah flavor. This article is called You Will Have A Digital Avatar Sooner Than You Think. And it focuses on a specific company based in Salt Lake called Artifact that just sold to Nike, in December of 2021. They create digital basically clothing, clothing, and especially shoes to put on your digital avatar. And so very interesting. And I’m a little older than Ryan. And so I’ve been in the computer world since I was probably four years old in the mid 80s. And so I think about the things that I did, you know, IRC chat, I played in muds when I was not in them. But I did play in the mud, but also online muds in the in the 90s. And so I felt like I was quite an early adopter for a lot of things. Then I went to law school and got really boring. Now I’m getting back into this technical world, right? Understanding web three crypto. NFTs, all of this and so the second article that I’m recommending is, I’m not even sure it’s an article, really, if it reads more like a blog, but it feels very, like a web three contribution. And this the title of this one is NFT Community Dismayed by Artifacts Sale to Nike, While Noting Pre Sale Shady Behavior. Long title, but very interesting. So it kind of tracks the sale artifacts sale beforehand. It’s good. There’s some Twitter input. It’s actually a lot of fun to read. And I love it because of the, you know, web three is the Wild West again, right? Every time we develop a new industry, there’s a lot of movement, there’s a lot of cowboys and cowgirls out there doing whatever they can. And nobody really cares about the legal aspects of things until the lawyers start getting involved until someone gets sued until the regulator’s start to slap down regulations. So for me this it’s a lot of fun. Like, as we’ve been riding the cannabis wave, the psychedelics wave, and now, the web three wave, it’s a lot of fun to do what we do. And so the my selections today reflect kind of my my giddy childhood curiosity about what is going on in the world.
Ryan Ansin 43:46
I have a question for you, Jonathan.
Jonathan Bench 43:48
Yeah, go ahead, Ryan.
Ryan Ansin 43:49
If cash starts getting tight in the venture capital community, which is a bit tighter than this record, amount of cash willing to be burnt, that 2021 signified, what happens to the pace of web 3.0? What happens to these NFTs, their value when the bell curve of the population, not the uber rich, not the destitute, turned back to needing real jobs because the government hasn’t given as much stipend as much as typing money away. And you need to focus on things like your roof and eating food. I just, I really worry about the gambling nature of all of this. So wondering if you have a perspective on the downside, not the asymmetric return that everybody talks about?
Jonathan Bench 44:52
I certainly do. I mean, at the end of the day, people who know how to grow their own food people who know how to purify water, People who know how to hunt. I mean, I think about this a lot, right? To what extent is the future pushing forward where we’re forgetting the skills we need if we have to retrench as a society, right? And so I think about this quite a bit. And I don’t know the answer. I mean, I think that people who are the idea of living in the metaverse are spending too much time there, you know, I mean, that’s the that seems just idiotic to me. Right? The Dab people who dabble in and out makes sense. Capital, the capital questions really interesting. And I love talking with venture capitalists and people who think about monetary policy, right, global monetary policy, we’ve had one or two guests on the podcast, in the last year or so. And I’ve asked them questions because I, I wish I could understand the world better than I do. Especially the how fiscal policy impacts what happens to real people, right, the housing costs go up, you know, people start to focus on things that are, you know, like you said, they’re chasing heavy returns, but they’re not, they’re not really learning any life skills anymore. And so it’s, I guess it’s a really philosophical question, and I don’t really have a great answer for you. But I appreciate you putting that to me and making me think a little harder about it. Do you have any thoughts to add?
Ryan Ansin 46:13
No, that’s not in short enough order. It is. It is fascinating. It is a bubble. There will be more blood on the streets than then gold running down.
Jonathan Bench 46:27
Just like with cannabis. Just like with cannabis. Exactly.
Ryan Ansin 46:29
Yeah, unfortunately. Outside of the lottery winners. The de-risked larger opportunities, well those victories will go to people already with money. So I hope that people don’t get in over their heads. Seems like a big gamble.
Jonathan Bench 46:50
Yeah. And I actually attended a conference in Salt Lake a couple of months ago, and there was a guy from the Philippines, who had started a Dow, that was providing some kind of content for an online game. But the Dow is so the Dow concept overlaid on on top of this is very interesting, right? We’re not just talking about NFTs we’re not talking about cryptocurrencies, we’re talking about, you know, the community and the way that the community contributes, and the community shares in profits. And to the extent that they can pull those profits out into real world cash is very interesting. And I don’t have a great handle on it yet. But I continue to dive in and try to figure out where everything fits. And and ultimately, what’s good, you know, I mean, is it better for people in the Philippines, who are sitting in slums, with their cell phones, mining, some kind of some kind of fake currency for, for somebody avatar, versus wiling away their time in a field for four pennies a day? I don’t know what the answer to that is, right. But if they have a choice between one or the other, it’s probably better than having no choice.
Ryan Ansin 47:54
Jonathan Bench 47:55
So Fred, we’re back to you.
Fred Rocafort 47:57
Thought provoking conversation. These are some very serious questions. I have three recommendations today and one follows your lead. There’s an article that came out in the WIPO magazine, and that’s the the World Intellectual Property Organization. And the title is Non Fungible Tokens NFTS and Copyright, written by Andres Guadamuz, who’s a professor in the UK. And I think this is a great example of some of the content that I’m finding very interesting, right, putting aside some of the some of the big questions that are very important. There’s also these very practical questions, right. I mean, I’m still my jury is still out. And when it comes to NFTs, and what the, what they will ultimately mean, to the world economy and society at large. But there are issues that are coming up. And as a practical matter, as someone who does a fair bit of intellectual property work, it’s important to, to keep track of what’s happening. And this was a very interesting article, right, like, how do you it touches upon that issue of how do you classify some of these phenomena that are that are emerging from the point of view of intellectual property? The same goes right for all sorts of other areas of the law, you know, what are the what’s the tax treatment? What’s the, you know, what kind of property is it? So, so anyway, we’ll be putting up the the link, but again, non fungible tokens and copyright and the second recommendation, somewhat self serving, but Harris Bricken has a new blog, the psychedelic Law blog. Certainly if you’ve read our, our other blogs, the China law blog, the Canon Law blog, take a look at this one. Or if you have not, but have an interest in psychedelics, or are just curious about what psychedelics are about and what the legal framework is for them. Take a look. So with that, Ryan, I’d like to thank you once again for taking the time to chat with us. Thank you for those recommendations and for for posing those questions that are definitely going to keep me thinking.
Ryan Ansin 50:39
Great to be here. Thank you for having me.
Jonathan Bench 50:44
We hope you enjoyed this week’s episode, we look forward to connecting with you on social media to continue discussing developments in global law and business. This podcast was produced by Harris Bricken with executive producer Madeline Williams music composed by Stephen Schmidt. Tune in next week for another episode. We’ll see you then.
Transcribed by https://otter.ai