609. What Does It Take to Run a Cannabis Farm? AI transcript and summary - episode of podcast Freakonomics Radio

Go to PodExtra AI's episode page (609. What Does It Take to Run a Cannabis Farm?) to play and view complete AI-processed content: summary, mindmap, topics, takeaways, transcript, keywords and highlights.

Go to PodExtra AI's podcast page (Freakonomics Radio) to view the AI-processed content of all episodes of this podcast.

Freakonomics Radio episodes list: view full AI transcripts and summaries of this podcast on the blog

Episode: 609. What Does It Take to Run a Cannabis Farm?

Author: Freakonomics Radio + Stitcher
Duration: 00:40:16

Episode Shownotes

Chris Weld worked for years in emergency rooms, then ditched that career and bought an old farm in Massachusetts. He set up a distillery and started making prize-winning spirits. When cannabis was legalized, he jumped into that too — and the first few years were lucrative. But now? It turns

out that growing, processing, and selling weed is more complicated than it looks. He gave us the grand tour. (Part three of a four-part series.) SOURCES:Chris Bennett, operations manager at Berkshire Mountain Distillers.Luca Boldrini, head of cultivation at The Pass.Yasmin Hurd, director of the Addiction Institute at Mount Sinai.Chris Weld, founder and owner of Berkshire Mountain Distillers. RESOURCES:"As America’s Marijuana Use Grows, So Do the Harms," by Megan Twohey, Danielle Ivory, and Carson Kessler (The New York Times, 2024)."Evaluation of Dispensaries’ Cannabis Flowers for Accuracy of Labeling of Cannabinoids Content," by Mona M. Geweda, Chandrani G. Majumdar, Mahmoud A. ElSohly, et al. (Journal of Cannabis Research, 2024)."The Complicated, Risky — but Potentially Lucrative — Business of Selling Cannabis," by James R. Hagerty (The Wall Street Journal, 2023)."Marijuana Content Labels Can’t Be Trusted," by Shira Schoenberg (CommonWealth Beacon, 2022)."Growing Cannabis Indoors Produces a Lot of Greenhouse Gases — Just How Much Depends on Where It’s Grown," by Jason Quinn and Hailey Summers (The Conversation, 2021)."Blood and Urinary Metal Levels Among Exclusive Marijuana Users in NHANES (2005-2018)," by Katlyn E. McGraw, Anne E, Nigra, Tiffany R. Sanchez, et al. (Environmental Health Perspectives, 2018)."The Carbon Footprint of Indoor Cannabis Production," by Evan Mills (Energy Policy, 2012). EXTRAS:"Cannabis Is Booming, So Why Isn’t Anyone Getting Rich?" by Freakonomics Radio (2024)."Is America Switching From Booze to Weed?" by Freakonomics Radio (2024).

Summary

In this episode of Freakonomics Radio, host Stephen Dubner delves into the life of Chris Weld, a Massachusetts cannabis farmer who transitioned from emergency medicine. Weld discusses the complexities of operating a cannabis farm, particularly in light of the evolving market and consumer behavior shifting from alcohol to cannabis. He addresses challenges like indoor cultivation, federal regulations, market saturation, and the increasing potency of cannabis products. Insights from addiction expert Yasmin Hurd highlight public health concerns regarding rapid legalization and insufficient research into the impacts of high-THC products. The episode sheds light on the intricate balance of growing cannabis amidst a chaotic industry landscape.

Go to PodExtra AI's episode page (609. What Does It Take to Run a Cannabis Farm?) to play and view complete AI-processed content: summary, mindmap, topics, takeaways, transcript, keywords and highlights.

Full Transcript

00:00:03 Speaker_05
Hey there, it's Stephen Dubner. Before we start today's episode, I have something to tell you. We are doing two live Freakonomics Radio shows on January 3rd in San Francisco and on February 13th in Los Angeles.

00:00:16 Speaker_05
If you have never seen Freakonomics Radio live, it's a lot like this show, but you know, live with great guests, and it's usually a lot of fun. So I would love you to join us in San Francisco and or Los Angeles early next year.

00:00:31 Speaker_05
Get your tickets now at Freakonomics.com slash live shows. That's one word. For the L.A. show, there's a special promo code you can use to buy tickets early, but you have to move very fast. The promo code is FREAKRADIO, one word, all caps.

00:00:46 Speaker_05
Okay, so Freakonomics Radio Live in San Francisco on Friday, January 3rd, and in Los Angeles on Thursday, February 13th. Tickets at freakonomics.com slash live shows. I hope to see you there. And here now is today's episode.

00:01:07 Speaker_04
So I was asked to be part of a panel that went to a retirement center to talk about cannabis, because a lot of those people are what we call canicurious.

00:01:17 Speaker_04
My discussion was sort of how it works, generally, what it does to the body, some of the claims that are made around cannabis in medicine, and then how to dose low and slow. I said, listen, it's been, what, 80 years, you haven't tried it before?

00:01:33 Speaker_04
Don't try one gummy the first night. Do a quarter of a gummy. You can afford to take a week to find out if it works.

00:01:40 Speaker_05
That is Chris Weld. He is a cannabis farmer in Western Massachusetts. In case you hadn't noticed, cannabis is in a very different place than it was even just a decade ago.

00:01:50 Speaker_05
This is our third episode in a four-part series called, Is America Switching from Booze to Weed? If you missed the first two, here's a recap. In part one, we compared the harms of cannabis and alcohol.

00:02:04 Speaker_08
If somebody came up to me today and said, we'll make a deal with you, you can replace all alcohol use with cannabis use. I would immediately agree to that deal.

00:02:16 Speaker_05
To be fair, there's been much more research into the harms of alcohol than the harms of cannabis. That's partly because cannabis, even though it is now legal in most U.S. states, is still illegal on the federal level.

00:02:28 Speaker_05
And this creates a lot of knock-on effects. That's what we looked at in part two of this series. The entirety of the cannabis market is filled with an amazing number of contradictions.

00:02:41 Speaker_05
Everyone we talked to for that episode, researchers and regulators and industry insiders, they all described a cannabis economy that's in a state of chaos. three quarters of all licensed operators are losing money.

00:02:54 Speaker_05
So today on Freakonomics Radio, in part three, what does it take to navigate that chaos? We go on a field trip to Chris Weld's farm to see if being a cannabis man is worth the hassle.

00:03:08 Speaker_04
I'm a very stubborn person, so I've not given up on cannabis. It's just been a wild ride. Let's take that ride together.

00:03:27 Speaker_08
This is Freakonomics Radio, the podcast that explores the hidden side of everything, with your host, Stephen Dubner.

00:03:43 Speaker_05
Chris Weld lives and works in Sheffield, Massachusetts, in the Berkshire Mountains. He grew up one state over in New York, about 50 miles north of Manhattan.

00:03:52 Speaker_04
I grew up on a great piece of property with an apple orchard. My father was a big environmentalist, biologist and wonderful outdoorsman. So I got exposed to gardening at an early age and spent a lot of time outside.

00:04:05 Speaker_05
Weld was not a great student, but he did have what you might call moxie.

00:04:09 Speaker_04
In eighth grade, I decided that it would become very cool if my science project was to make a still when my mother, who was game for most things, was on board. And then somehow found out that it was a federal offense to distill alcohol.

00:04:24 Speaker_04
What were you going to make? Probably bourbon. My mother was a bourbon drinker. Okay. So you did not get to make the still for your science project? I did not. I made a volcano, which was a huge disappointment.

00:04:35 Speaker_05
After a while, Weld started volunteering on the local ambulance squad, and he loved it.

00:04:40 Speaker_04
So I went to a PA program at Albany Med and then got a master's in emergency medicine and worked in inner city ERs, mostly California. lived with my wife out there and kids. She's an architect.

00:04:54 Speaker_04
We had a design build company and love working with my hands. And then moved to the Berkshires 20 years ago. We found this great property, derelict orchard. few hundred trees. It had a historic spring on it. They'd built a hotel there in the 1880s.

00:05:12 Speaker_04
The spring waters were touted as being the finest in the country. So a great historic spring and a bunch of apples. And I was tired of working in the ER.

00:05:22 Speaker_05
And you said, there's no way I'm going to pass up a chance to finally build my still. You got to jump in feet first. And what were you making at first?

00:05:30 Speaker_04
Were you making apple based alcoholic beverages? Correct. Brandies, Calvados if you're in Europe, and then very quickly learned I would never make a living selling Calvados.

00:05:41 Speaker_04
So I had an incredible consultant come up, a Jamaican guy helped me make rum and gin and vodka. So those are the three we launched with.

00:05:50 Speaker_05
Weld's company is called Berkshire Mountain Distillers, and today they make more than a dozen spirits. Some of them have won awards. When cannabis was legalized in Massachusetts in 2016, Weld decided to jump into that too, feet first.

00:06:04 Speaker_05
And now he runs a vertically integrated cannabis farm and dispensary called The Pass. I asked where the name comes from.

00:06:11 Speaker_04
A bunch of different things. Mountain Pass, since we're in the hills, the mountains. The hall pass of now cannabis is legal, passing from one state of mind to another, pass the joint.

00:06:22 Speaker_05
In part one of this series, we heard from some customers at the pass. It was a Monday morning and there were a lot of customers. I asked Weld which of his businesses is bigger, cannabis or alcohol?

00:06:34 Speaker_04
Cannabis is bigger. Yeah. And the cannabis was bigger from the get go. Do a quick walkthrough.

00:06:41 Speaker_05
Yeah, let's do it. The farm has three separate growing areas, an outdoor field, a greenhouse, and a warehouse where all the elements, temperature, light, and moisture, are precisely controlled. That's our first stop.

00:06:57 Speaker_04
So this is our grow building. This is Luca, who's our head grower here. Nice to meet you guys. Nice to meet you. What do you do? What's your job?

00:07:04 Speaker_07
I'm the head of cultivation here at The Pass.

00:07:06 Speaker_05
What's your background training-wise and whatnot?

00:07:09 Speaker_07
I just was been cultivating cannabis a long time, about 15 years now. How does it compare to other crops? I don't know. I don't have a ton of experience cultivating other crops.

00:07:18 Speaker_07
I have a feeling we take more care when cultivating cannabis because it fetches a higher price per pound. So we can put a little bit more technology and a little bit more care into it. What kind of technology and effort?

00:07:30 Speaker_07
We use more light than in other crops. You can really tell the difference between indoor grown cannabis, greenhouse and outdoor. So indoor grown is more quality control. I assume it's much more expensive?

00:07:41 Speaker_07
More expensive, it's definitely going to be more consistent because you can keep temperature and humidity exactly how you want it. All the processes can be repeated. Whereas in the greenhouse and outdoor, you're a bit beholden to the weather.

00:07:52 Speaker_07
And there's more environmental stress, which can be a good thing. But indoors, we tend to control the stress consciously rather than we happen to not be in the right temperature or humidity range today.

00:08:04 Speaker_05
The indoor grow house has two big rooms and we head into one of them. As you open the door, you're hit with a bright warm wave of amber light and a very fragrant aroma. It reminds me of something I once grew just for fun, hops.

00:08:19 Speaker_04
Very closely related to hops, cannabis and yeah, they're the closest plants. I didn't know that.

00:08:26 Speaker_05
The plants in the grow house are about four feet tall and raised up on rolling benches. There's a step ladder there, so I climb up to look down over the top of the plants. It is like looking down on a scale model of a forest bathed in golden light.

00:08:43 Speaker_04
So if you look at these different plants, you can see the fan leaves, the bigger leaves, you know, chlorophyll. Then these little ones are called sugar leaves.

00:08:55 Speaker_04
And then you can see all these little tricones, the little pedunculated dew drops, little shiny things on stalks. That's where most of the THC is kept in those little glistening things there. This is how many square feet?

00:09:08 Speaker_07
It's 656 of canopy. The way we measure canopy is just the benches that the plants are on.

00:09:15 Speaker_05
Irrigation is coming in how and where?

00:09:17 Speaker_07
We hand water this room. Oh, really? Yep. Why? Yep. More attention to detail. Things dry back unevenly when you dripper them, and this way we can water everything uniquely.

00:09:27 Speaker_05
And how many different strains or varieties are in this room? Three in this room. Are you at all concerned about cross-pollination, or does that not happen?

00:09:37 Speaker_04
Every plant in this facility is a female plant. The male plants have no THC, and they will pollinate a female plant.

00:09:44 Speaker_04
And then instead of spending that energy developing bigger buds, and those buds are associated with THC, the female plant would spend that energy making seeds.

00:09:56 Speaker_04
So you end up with, you know, the dirtweed of the 80s that isn't that strong because a lot of the energy went into seed production. What do you call a male cultivar? just a male, a rooster. Bad luck is what you call it.

00:10:10 Speaker_04
Down the hall from the grow house is the greenhouse. So the greenhouse, you know, New England's tough to control humidity. We don't really control temperature except with fans and venting, but we get natural light.

00:10:24 Speaker_04
So maybe our cost is 55 to 60% of what it is indoor growing versus outdoors, which is a third to a quarter of indoor growing. And what do you do here in the winter? Typically, we've been growing year-round and heating it.

00:10:38 Speaker_04
This year, there's a glut on the market. People have been pulling up stakes and moving out of town. There's too much canopy, so people are selling cannabis at cost or at times below cost. Now, can you buy it?

00:10:51 Speaker_04
We can, but we'd rather sell our own cannabis. But if you could get it for cents on the dollar, would it be worth it? It's not always the best cannabis, but it is still flooding the market. So there's got to be a shakeout.

00:11:03 Speaker_04
There's just too much canopy right now. So we're at the point where we're going to let this sit fallow for a couple months, sell through what we have, and then replant. — What's it cost you to heat it in the winter?

00:11:12 Speaker_04
— It's probably a couple grand a month. — So what's your typical monthly electricity bill all in? — Everything all totals, uh, $15K, maybe?

00:11:27 Speaker_05
One criticism of the cannabis industry is that it uses a lot of electricity.

00:11:31 Speaker_05
To be fair, many things use a lot of electricity, hospitals, for instance, but we tend to hear more about energy consumption when a new industry emerges, particularly a controversial one like cannabis or crypto or AI.

00:11:45 Speaker_05
Some researchers have suggested that moving weed production from indoor facilities to greenhouses and the great outdoors would help shrink the carbon footprint of the cannabis industry. But the great outdoors isn't always so great.

00:11:59 Speaker_05
Chris Weld walks us out of the greenhouse and over to his outdoor grow field.

00:12:05 Speaker_04
So this is outdoor flower. These fan leaves are starting to turn yellow, so they're not really doing anything for the plant. We'll come through soon and defoliate a bunch of this.

00:12:14 Speaker_04
That'll help with the airflow through the plant, help with powdery mildew or botrytis or anything.

00:12:19 Speaker_05
And is that an indicator of a No, they all do that.

00:12:22 Speaker_04
They're just getting older. But if you look at these plants, this one, the bud structure is beautiful. It's stacking up. This will form a very nice top cola on this. All these side colas are actually looking pretty good.

00:12:33 Speaker_04
And then you look at this one here, we don't have that many of. Meaning it's way behind the brothers. Way behind. Yeah, why is that? Just a different cultivar.

00:12:41 Speaker_04
I'm not sure which one this is, but it's not one I would probably grow again outside because I'm not sure it's going to finish in time.

00:12:49 Speaker_05
In a perfect cannabis world, you might not even try to grow cannabis in a place like Massachusetts. You might just import it from the parts of California where it grows so well. That's what we do with almonds and lettuce and blackberries.

00:13:02 Speaker_05
But remember, cannabis is still illegal in the eyes of the federal government, which means it can't be sold across state lines. So if Chris Weld wants to sell cannabis in Massachusetts, he has to grow his cannabis in Massachusetts.

00:13:16 Speaker_05
Until or unless federal law changes, each state is responsible for its own supply. This kind of forced commercial self-sufficiency is an example of what economists call autarky. And they don't like autarky. It is the very opposite of free trade.

00:13:33 Speaker_05
They say autarky slows growth and reduces options for consumers and raises prices. But for now, this is the system that Chris Weld operates in. which means he not only cultivates his own raw material, but also readies it for sale and then sells it.

00:13:51 Speaker_05
That readying for sale can be simple, like operating a big joint rolling machine, or as we will hear after the break, it can be a bit more involved. Whoa. OK, now I feel like we're in Breaking Bad. I'm Stephen Dubner. This is Freakonomics Radio.

00:14:11 Speaker_05
We'll be right back. Chris Weld has been showing us around his cannabis farm in Sheffield, Massachusetts. The farm is attached to his retail store, The Pass. He sells products from his farm as well as other farms and processors.

00:14:33 Speaker_05
I asked him which formats are most popular.

00:14:37 Speaker_04
So close to half the consumption is still flour. Whether it's, you know, by a pipe, a bong, a joint, it's mostly flour consumption. It's 50-51% plus or minus. Edibles are super popular. Drinks, beverages are pretty significant.

00:14:55 Speaker_04
What's in the refrigerated case there? That's your lunch. Those are all concentrates. It's wax, it's butter, it's shatter, it's diamonds and sauce. Sorry, I don't follow. Okay, here's my sophomoric analogy.

00:15:09 Speaker_04
So, you understand how maple syrup's made, right? You tap a tree, you get sap out, you boil it down, 43-ish to one, and you get syrup.

00:15:20 Speaker_04
And you can take that syrup, and you continue to boil that down, and if you boil it down enough, you get into like a sugar, Right? So soft maple candy. And if you boil it, you can get very hard maple candy. Right?

00:15:34 Speaker_04
So with weed, the flower is kind of the sap out of the tree to me. You can boil it down and end up with a concentrate that will go into a vape pen. You can clean that up and concentrate it even more.

00:15:46 Speaker_04
And you get into these concentrate forms like shatter and wax. And there are different stages, but they may be in the low 90% THC.

00:15:57 Speaker_05
Cannabis today is much stronger than it used to be for a couple of reasons. Better breeding and cultivating techniques have increased the amount of THC in a given plant.

00:16:06 Speaker_05
And like Chris Weld said, some cannabis products are processed in a way that greatly intensifies the dose.

00:16:13 Speaker_05
Even in the legal cannabis world, the dose information on a package is rarely as clear as what you'd expect to see on something like a bottle of aspirin. And it's not always accurate.

00:16:23 Speaker_05
When Weld talks to customers who aren't familiar with modern cannabis, he advises them to start with low doses.

00:16:30 Speaker_04
When the store first opened, people would come in and they'd talk to our budtenders and the budtender would get the response, listen, whippersnapper, I was smoking that **** since before you were born.

00:16:42 Speaker_05
But cannabis today is different, and this is deeply concerning to some public health officials and researchers. including Yasmin Hurd. She is a neuroscientist and addiction specialist at the Mount Sinai Health System in New York.

00:16:57 Speaker_00
The majority of products that are out there today, no one has studied. You have wax and dabbing and shatter that gives nearly 90 percent THC. There is no cannabis plant that had 90 percent THC.

00:17:11 Speaker_00
the modification of cannabis, the hundreds of products that the people who are making them have no clue about.

00:17:17 Speaker_00
If people want to consume recreationally, fine, but they don't even realize that they are being manipulated with very high concentrations of THC.

00:17:27 Speaker_05
Hurd argues that cannabis legalization has happened too fast and that scientists and state health regulators haven't had the time or the resources to assess long term harms or to prohibit certain formats of the drug.

00:17:41 Speaker_05
There are also big questions about the addictive nature of cannabis, and some physicians are reporting patients with serious physical and mental health effects, especially younger users. Here's Chris Weld again.

00:17:54 Speaker_04
There's some evidence that if you start consuming at a younger age, it can actually rewire how your brain works.

00:18:00 Speaker_04
There's some literature that shows that if you're younger and you smoke a lot of weed, you may be more prone to depression, whereas if you're older and smoke weed, it may help with depression.

00:18:09 Speaker_04
And so it's everything in moderation, but if you're young, cannabis probably isn't the best thing to smoke.

00:18:14 Speaker_05
Weld's overall view of cannabis was informed by his experience as a physician's assistant in hospital emergency rooms.

00:18:22 Speaker_04
It is interesting. You know, I spent, I don't know, 17 years working in inner city ERs and every day there was a large percentage of cases that were alcohol related.

00:18:32 Speaker_04
So people get drunk, they shoot people, they get run over by a drunk driver, they shoot themselves all day, every day. I don't think I ever had somebody say, hey dude, I got so stoned and got in a fight, can you sew me up? It just didn't happen.

00:18:45 Speaker_04
And when you look at toxicity, do you know the term LD50? Have you ever heard that? No. It's lethal dose 50. So it's 50% of the people who take that dose will die.

00:18:54 Speaker_04
And so if you're comparing cannabis and alcohol, for instance, it's very easy to kill mice with alcohol, but not so easy with cannabis.

00:19:03 Speaker_04
And the LD50 for a 130-ish pound person is 10 to 15 drinks an hour, which if you were to chug a frat hazing, chug a pint of booze, 50% of the time you might die from that. Versus joints, it's about 20,000 joints.

00:19:21 Speaker_05
But joints are just made from the flour straight off the cannabis plant. The concern from a public health perspective is the scarcity of research on concentrates. From a business perspective, the concentrates make a lot of sense.

00:19:34 Speaker_05
They fetch a high price because of their potency. They're cheaper to store and they take up less space. Weld offered to show us his processing plant where they turn raw cannabis into finished products.

00:19:47 Speaker_05
So we took a drive just a couple miles and we parked outside a low slung cinder block building. It used to be a plastic extrusion plant.

00:19:57 Speaker_04
So we have a gummy room, a cure room for the gummies.

00:20:00 Speaker_05
How long do gummies need to cure for?

00:20:02 Speaker_04
Just a few days after they're made. This area here is set aside for a beverage thing at some point. What do you mean, at some point you're not making? We don't have a beverage right now. Ooh, big bags of weed. Smells good, doesn't it? Wow.

00:20:25 Speaker_05
Yeah, why did we wait so long to come to this room?

00:20:28 Speaker_04
This is all your grow, correct? This is all our grow. So this is a bin of... Good morning. How many pre-rolls are in this bin? About 2,000. We just finished up making a batch of pre-rolls in here.

00:20:43 Speaker_04
And then now they're going to bag up some flour into eights. I have to say, Chris, this does not feel at all like a criminal enterprise.

00:20:49 Speaker_05
This feels like so blessedly boring.

00:20:53 Speaker_04
We had a wish list for a gear here, and one of them was a big pre-roll machine. And it made enough to sell $70 million worth of pre-rolls in a year. Like, you know, just no demand. Yeah, maybe we're $4 million worth of pre-rolls in a year.

00:21:10 Speaker_04
We couldn't justify it. I've never been in a cigarette factory. How are they made? There were some cannabis companies that started with the cigarette machine rollers to make joints that look like cigarettes. And I haven't.

00:21:24 Speaker_04
Chris, have you seen them on the market anymore? Yes.

00:21:26 Speaker_05
That's Chris Bennett. He is an operations manager who's been with Weld since the beginning.

00:21:32 Speaker_03
Do you want to talk about your tolerance? I can eat a thousand milligrams. Seriously? Yeah. Yeah. But then there's people like, and it doesn't go by size or anything. It's just how your liver processes it.

00:21:42 Speaker_03
So you could have somebody 350 pounds that eats like a half of a two gram, you know, and they're on their butt.

00:21:48 Speaker_05
So what's the effect on you then?

00:21:50 Speaker_03
A thousand?

00:21:51 Speaker_05
I'm on the couch. What's the effect of a hundred?

00:21:55 Speaker_03
A hundred? I don't, I don't really feel it. Oh my God. How do you get high? It's expensive.

00:22:01 Speaker_05
Now we get swiped through a heavy locked door. Whoa, okay, now I feel like we're in Breaking Bad. And what's this room called? Extraction lab. This is where they make those high THC concentrates and rosins.

00:22:16 Speaker_03
So when we get the flower from cultivation, it's not trimmed. We'll run it through these two machines and it'll trim it up nice so our trimmers don't have to really do a lot of work.

00:22:25 Speaker_05
Next to the trimmer is a machine that makes the rosin by applying heat and pressure to the cannabis clippings. And next to that is a big jar of syrupy-looking cannabis rosin. Weld opens the jar. It's a little potent.

00:22:43 Speaker_04
Yeah, it's chirpy. Oh, wow. So what does this become? This is going to carts, live rosin carts. So these are the carts that, you know, for the distillate pens or the rosin pens, they have a reservoir.

00:22:59 Speaker_04
You heat the solution, the oil, the rosin, and then you just have an injector and it fills each one and then they get capped and they go in a box.

00:23:07 Speaker_05
And they get consumed how? Smoke. What's happening now with cannabis, several years into legalization, is a lot like what happened with alcohol over time. As new technologies arrived, it got more potent.

00:23:21 Speaker_05
We started with beer, which is just soupy, fermented grains.

00:23:26 Speaker_05
The invention of pottery allowed for the creation and transport of wine, and the invention of distillation led to the creation of whiskeys and other spirits, each time with a higher concentration of alcohol.

00:23:40 Speaker_05
If you are alarmed by the fact that highly concentrated THC products are legal, you should probably also be alarmed at how easy it is to buy a highly concentrated bottle of alcohol like vodka or whiskey or rum.

00:23:52 Speaker_05
I asked Chris Weld how he thinks about the addictive nature of cannabis versus alcohol.

00:23:58 Speaker_04
Yeah, I would say probably a little bit worse on the alcohol side. Got it.

00:24:03 Speaker_05
But here's what I'm trying to get at, and there may be no good answer or any answer for this at all, but like the whole idea of this series is that alcohol has been around forever and the harms are known and they're substantial.

00:24:14 Speaker_05
Weed might be a replacement for a lot of the uses of alcohol, for mood, for creativity, et cetera, et cetera. But the downsides of weed seem to be less.

00:24:28 Speaker_05
On the other hand, if it's continued to be treated as this kind of separate and more dangerous and scarier substance, that'll probably never happen.

00:24:37 Speaker_04
Except if you look at the last five years, it's changed. The stigma is going. The data on how catastrophic everyone thought it would be hasn't really come to show that it has been. So I think that the societal acceptance of cannabis is still growing.

00:24:57 Speaker_05
Coming up after the break, is societal acceptance growing fast enough to fix the economics? It's been tough, and it's been tough across the board. I'm Stephen Dubner. This is Freakonomics Radio. We'll be right back.

00:25:20 Speaker_05
The state of Massachusetts legalized recreational marijuana in 2016, with the first retail sales in 2018. Chris Weld got into the business early on.

00:25:31 Speaker_04
It was gold rush days mentality. This is going to be the best thing since sliced bread. Jumping in at that point made sense, and it made sense to a ton of people.

00:25:41 Speaker_04
So you look at these people that ran MSOs, multi-state operators, that threw a lot of cash into it.

00:25:49 Speaker_04
We had an incredibly great first couple of years, wonderful trajectory, things are looking fantastic, and the wheels kind of fell off in the whole Massachusetts market, I would say. What's happened recently is that there's a glut.

00:26:03 Speaker_04
There's just too much cannabis out there. And so all these people who have spent a lot of money growing cannabis are sitting on it. Are you profitable yet? We've been profitable. We vacillated.

00:26:16 Speaker_04
We had some issues last year with a cultivation mishap that was not our fault.

00:26:23 Speaker_05
What was that?

00:26:23 Speaker_04
Was it like God's fault, like weather? Oh, I wouldn't say, yeah, that's a big topic, God's fault. So it was drift from neighbors spraying for mosquitoes. Oh boy. Wiped out a whole crop.

00:26:37 Speaker_05
Holy cow. How did you learn slash discover slash?

00:26:42 Speaker_04
Determine that your crop had been contaminated.

00:26:45 Speaker_04
So this is a great argument for legal versus black market cannabis I was at the gas station a couple months ago and these two young men were in an Audi pumping gas and I was pumping gas and I looked over and the guy in the front passenger seat had a big bag of weed little buds and I looked at him and I said hey, you know and

00:27:07 Speaker_04
just to be cool, you probably want to keep that in the trunk. And he said, thank you, sir, which I took offense to the sir bit.

00:27:14 Speaker_04
And I said, and by the way, you can buy much better looking weed than that down at the pass, which is, you know, the cannabis shop I have down the road. And he said, yeah, man, but the taxes kill us. So we spent $287,000 last year on testing. Wow.

00:27:29 Speaker_04
So to answer your question, we send off cannabis to one of several state sanctioned labs. And they test for heavy metals, they test for yeast and mold, they test for pesticides. It's a pretty in-depth panel that they do.

00:27:47 Speaker_05
We mentioned earlier in this series that the cannabis plant is what's called a bioaccumulator. That means it's especially good at absorbing minerals from the soil and air and water. In fact, cannabis has been used to remediate contaminated sites.

00:28:01 Speaker_05
But if you are growing cannabis for human consumption, that absorbency can be a problem. One recent medical study found that cannabis users have higher levels of lead and cadmium in their blood than non-users.

00:28:13 Speaker_05
Here again is Yasmin Hurd from Mount Sinai,

00:28:17 Speaker_00
People don't realize that cannabis is a plant that actually holds onto metals. It's like hyper-sucking of metals. States should, for safety, they should look at metal content. The same thing with pesticides and mold.

00:28:30 Speaker_00
So when they have looked at products and some research done where they've taken products randomly, they see, for example, that even the content of what's supposed to be in those products do not match what's on the label.

00:28:42 Speaker_05
When you look at these state bodies that regulate and approve, whether it's a state health department or some other regulatory body, are there typically scientists on those bodies?

00:28:53 Speaker_00
I can't answer that, unfortunately, for every state.

00:28:56 Speaker_00
I think that there are states that really do try to have scientists, but you will have these third party companies that are supposed to, you know, verify whether or not they meet all these safety standards.

00:29:09 Speaker_00
And some of these companies, you know, they will sign anything. So these are the things that the states really need to clamp down on. Everyone wants to make money, but this is a huge issue.

00:29:20 Speaker_04
And Chris Weld again. Some of the stuff in Massachusetts is egregiously strict, I would say. I think there needs to be control, certainly. And I think everyone was so worried that there were going to be dire consequences with legalization that

00:29:39 Speaker_04
it got over-regulated. When I talk to my local chief of police, which I do quarterly, and say, hey, how's it going? Any problems? He's like, I don't hear anything. We're not coming in to arrest people who are, you know, like drunk people in a fight.

00:29:53 Speaker_04
In general, I think it's a fairly benign drug. Massachusetts tends to be fairly strict on a lot of consumer-based things and protective of individuals, which I think is great.

00:30:08 Speaker_04
And I think Massachusetts rolled out cannabis legalization in a little bit more of a controlled way than New York did. When we would go look at Groves in New York, their security system often would be a trail cam.

00:30:23 Speaker_04
You know, we had $160,000 security system with a million cameras that you can't hide your big toe in the corner of the room.

00:30:31 Speaker_04
You can trust when you go to a legal canvas store, especially in Massachusetts, that you're not going to find stuff on it that you would if you go to some bodega in New York City.

00:30:43 Speaker_05
We talked about that New York situation earlier in the series, as Weld says, the legalized rollout in New York City especially has been chaotic, with thousands of illegal shops that the city, for a variety of reasons, wouldn't shut down.

00:30:57 Speaker_05
That is starting to change, but there's a long way to go.

00:31:01 Speaker_04
I went into one of those stores last time in the city, and I was just talking to the young woman at the counter. I said, you know, I'm not a Fed. Do you guys have issues with the law coming in here? And she said, yeah, we do. This is my first week.

00:31:13 Speaker_04
And two days ago, a team of 17 people came in. And they took everything that was cannabis related, left nicotine.

00:31:21 Speaker_04
They asked for the keys to the vault, they went in the vault and they slapped a big, you know, illegal sales in the store, do not visit whatever sticker on the door. And that night the owner came in, pulled the sticker off and restocked the shelves.

00:31:34 Speaker_05
OK, you run an alcohol distillery as well as the cannabis farm. How do the regulations compare in Massachusetts? You've talked about how much tracking and testing and record keeping there is in cannabis. How about the alcohol operation?

00:31:48 Speaker_04
I have five sheets I fill out every month. It's all revenue driven, right? So it's all tax basis.

00:31:54 Speaker_04
They want to know how much you made, how much got wasted in the process of bottling, how much you bottled, how much you sold, how many proof gallons you sold, so that then the state gets their carve out for tax on proof gallons as does the Feds.

00:32:08 Speaker_04
But the cannabis thing is a bit over the top. So there's a system called metric that we use in mass. Other states use it as well. It's a seed to sale tracking program.

00:32:16 Speaker_04
And that tag follows that plant through harvest when it's dried and bucked and pulled off the plant and put into a bin. For every plant? Every plant. So when you get a visit from the Cannabis Control Commission,

00:32:32 Speaker_04
They'll go into your greenhouse and they'll pull up the metric file on the greenhouse and they'll say you have 873 plants, let's go find them.

00:32:41 Speaker_04
And then you go in there and they have an RFID scanner and they scan every plant and they say you're short two plants or you have one plant extra. And then what do you do? Get fined? Jump through hoops.

00:32:54 Speaker_04
Normally, you say, like, it got wasted, it died, and it wasn't entered in from the waste log. So we may have thousands and thousands of things, and they'll say, hey, you're short three joints. Find them.

00:33:07 Speaker_05
So if you were to take a step back and look at the business as an industry in Massachusetts and then across the country, how would you describe to somebody who really doesn't know at all the state of the industry right now?

00:33:20 Speaker_04
Yeah, it's been tough, and it's been tough across the board. You look at Canadian stocks and some of those big ones, if you bought into them five years ago, you've got about 2% of your money left. A lot of them crashed and burned.

00:33:33 Speaker_04
A lot of the West Coast states did the same thing that we're doing. There was over-licensing, over-production, race to the bottom. It's not a stable market environment, and I think in those states, it's starting to stabilize.

00:33:47 Speaker_04
Massachusetts hopefully has hit the floor and we will start to stabilize and people who are growing really good weed will do well and people who have great branding and good products will do well.

00:33:59 Speaker_05
After we toured Chris Weld's cannabis farm and retail store and processing plant, he offered to show us his original business, which is still going strong, Berkshire Mountain Distillers.

00:34:10 Speaker_05
Up front, there is a retail shop with tasting tables set atop whiskey barrels. In the back is the distilling operation, big stainless steel tanks, many more barrels, copper tubing running high along the walls.

00:34:24 Speaker_05
You can smell the floral botanicals hanging from pipes overhead.

00:34:28 Speaker_04
So we just did Greylock gin, which is our flagship gin. So it's booze as a base, and then juniper, coriander, angelica, oryx, orange, cinnamon, and licorice.

00:34:39 Speaker_05
By now it's late afternoon on a Monday, and we are the only people in the place. The cannabis store was much busier. On the other hand, here we didn't have to show ID like you do in legal cannabis shops.

00:34:52 Speaker_05
There aren't dozens of cameras tracking everyone's every move as required by state cannabis regulators. The bottles of gin and bourbon are just sitting there on the shelves, not stored in a vault the way cannabis is.

00:35:07 Speaker_05
And what's the economic picture from your distillery here? Is it an easy, healthy business without a lot of variables?

00:35:14 Speaker_05
You kind of make money and you know you're going to make money versus the cannabis business where there's so many variables and changes and regs?

00:35:21 Speaker_04
The cannabis business is definitely more fluid and just hard to guess what's going to happen. And I would say that in the 16 years I've been in operation here, the distillery has been pretty steady state. However, there's definitely been

00:35:37 Speaker_04
a shake-up in the way that spirits are distributed, especially for smaller producers like myself.

00:35:43 Speaker_05
Shake-up meaning there's more consolidation and it makes it harder for smaller distributors?

00:35:47 Speaker_04
Correct. So the bigger suppliers, distributors have coalesced. I think the top 10 do 80% of the business in the country or something. So the bigger volume suppliers dictate what gets sold and to who for the most part.

00:36:02 Speaker_05
If you had it to do over again, if you go back to four or five years ago when you started the cannabis company, if you had instead decided to, let's say, maybe even get the outside investors that you used for the cannabis company and instead just tried to expand this distillery, you know, 5X or 10X, do you think that would have been a better move?

00:36:22 Speaker_04
From a financial standpoint, I think if I didn't get the outside investors and I spent the time on the distillery that I spent in the cannabis world, that would have been a better move. So do you regret getting into the cannabis industry?

00:36:32 Speaker_04
No, because I'm a half-full kind of guy. And by the way, I've not given up. I'm a very stubborn person, so I've not given up on the cannabis. It's just been a wild ride. I mean, it's a Wild Wild West, Gold Rush mentality. And it's been super fun, too.

00:36:47 Speaker_04
I've learned a lot. I've worked with a bunch of great, interesting, entrepreneurial-type people. The science behind the plant's pretty cool. I'm a huge gardener. I love growing stuff.

00:36:59 Speaker_04
Just to be part of an industry in its early days with something that was made illegal for the wrong reasons was, you know, I think looking back on that, it'll be something that'd be nice to have in your rear view.

00:37:13 Speaker_04
By the way, Chris Weld says he doesn't use cannabis. Yeah, it was just never my — I love the smell of the plant. I love growing the plant. I'm just not a huge consumer. But he does drink. I drink my booze all the time.

00:37:26 Speaker_04
I'm also 59, so it's not as much fun as it used to be.

00:37:30 Speaker_05
Before we leave the distillery, Weld encourages me and our crew to each take home a bottle, whatever we'd like. He is a very generous host.

00:37:39 Speaker_05
So we each walk out with a bottle, put him in the car, and then Weld says we should stop back at the pass, his cannabis shop. He tells us to wait outside. He goes in, comes out five minutes later with a brown paper bag.

00:37:53 Speaker_05
There's something about being handed a brown paper bag full of weed in a parking lot. I know cannabis is legit now, but it doesn't really feel quite legit, at least compared to the distillery.

00:38:05 Speaker_05
If cannabis is ever going to substantially replace alcohol, that will have to change. I drove back to New York with my free weed in the paper bag. I still haven't cracked it open. Let me know if you want to drop by. Maybe we'll try it together.

00:38:22 Speaker_05
That's probably not a great idea. But coming up next time on the show, in the final episode of this series, we will take a look at what it would take to change the reputation of legal cannabis.

00:38:37 Speaker_01
President Harris is going to sign a federal legalization bill.

00:38:41 Speaker_02
And what would happen then? That process of consolidation and larger companies emerging will be greatly accelerated with national legalization. Or is there another model?

00:38:52 Speaker_06
Producers on small farms maybe have different regulatory requirements than someone who's trying to be the Amazon of wheat.

00:39:01 Speaker_05
The future of the cannabis industry. That's next time. Until then, take care of yourself. And if you can, someone else too. Freakonomics Radio is produced by Stitcher and Renbud Radio.

00:39:12 Speaker_05
You can find our entire archive on any podcast app, also at Freakonomics.com, where we publish transcripts and show notes. This episode was produced by Dalvin Abawaji and Zach Lipinski. George Hicks was our field recordist in Massachusetts.

00:39:27 Speaker_05
Thanks, George.

00:39:28 Speaker_05
Our staff also includes Alina Kullman, Augusta Chapman, Eleanor Osborne, Ellen Frankman, Elsa Hernandez, Gabriel Roth, Greg Rippin, Jasmine Klinger, Jeremy Johnson, John Schnarz, Lyric Bowditch, Morgan Levy, Neil Caruth, Rebecca Lee Douglas, Sarah Lilly, and Tao Jacobs.

00:39:44 Speaker_05
Our theme song is Mr. Fortune by The Hitchhikers, and our composer is Luis Vieira. As always, thank you for listening.

00:39:55 Speaker_04
Stones versus The Beatles. Come on, don't get me started.

00:39:58 Speaker_08
The Freakonomics Radio Network. The hidden side of everything. Stitcher.