vacation rentals are the future. I have a 21 year background in real estate and 15 years in vacation rental investments. So I am super excited to be here hosting this show. This has been my life for the last 15 years. I love watching the developments of what's going on in Hawaii and how they're moving forward with different restrictions, regulations, a lot of investment capital coming to the island. So I'm very excited to bring on our guest tonight who is Lailand Bento. She has been in real estate in the big island for eight and a half years and she is born and raised in Hawaii with a deep background in government. So she really understands the restrictions and regulations probably a lot more than most people. So without further ado, let me go ahead and introduce Lailand to you. Thanks for being here, Lailand. Thank you so much, Erica for having me on the show. I'm excited to touch on such a you know main topic in selling real estate here in Hawaii and so I'm ready to just dive in and just see how different and how our state's different and how people can invest in vacation rentals here. Yeah, so you know I am so passionate about vacation rentals but I think it's really cool about your background. I want to talk a little bit about that because I don't meet too many real estate agents that have such a big background in government and so if you could tell me a little bit about that because I think that really helps you do what you do so well and I'd love to learn more about what you were doing in your government position before this and kind of what led you into getting into real estate after that. I work for a former Hawaii governor. It was governor Linda Lingo and I worked in her office here on the big island. My grandfather was a state senator for over 30 years and so I grew up in politics understanding government laws that are being passed which are just crucial because it does affect our everybody lives that people don't really understand so it's important to vote but also just working for a former governor and then being able to after that I went into hotel sales and then always wanted to get into real estate. My grandfather was big into real estate and finally just jumped in eight and a half years ago and having that government background knowing how to you know navigate through the different departments has truly saved so many of my clients from buying you know properties that either a law was going to be passed where they were going to buy a vacation rental in the area and then you know it would have changed right in the middle of that law was to pass and so their investment just would have just gone down in value and so knowing all of the different government departments and what laws are being passed what's affecting our government is crucial in selling real estate in this state I feel. Yeah no it is especially with all the changes that they're they're putting into place since I've told you right so you've been you decided to get into real estate but why vacation rentals is it because it was just such a popular investment there that you just fell into it or did you have like a passion for it tell me a little bit more about why that niche. This niche and selling on the outer island so the outer islands are not the island of Oahu which is the main island real estate on the other outer islands as we call them Kaua'i Maui Hawaii which is this island you have your buyers are mostly investors so you just sort of fall into the vacation rental market besides the local community whereas the island of Oahu which is why they are passing that 90 day and a judge just did an injunction their county council tried to pass you know not having vacation rentals stretch it out to 90 days but the outer islands is different they're a little bit more lenient because most of our buyers are not the local community unfortunately they are investors buying their either an investment home or vacation home so you do immediately fall into that when you do sell in the outer islands real estate. So let me get your opinion around all these regulations that we were just mentioning because they did kind of you mentioned they were just getting passed like why do you feel that they passed them do you think that and there's really no wrong answer to this but do you feel like that it's a government overreach to tell people what they can and can't do with their property or do you legitimately feel like that the vacation rentals that were happening there were legitimately a problem for the community what's the reason why you think this went through. It was a combination actually of the hotel industry the hotel unions lobbying right because the hotels were losing money they have all of these fees and so people decided to got a little bit smart and you know they could instead of I live by hotel where our local rate is 1100 a night plus all of those other fees instead of you know going on vacation and then my entire family can stay in a home for a fraction of that cost so it was you know when Airbnb and you know VAR bill started really taking over people started getting smart and they would save a lot of money these families traveling to Hawaii which airfare is already astronomical to get here right and so they decided you know we have a kitchen we can actually all stay together there's a pool instead of paying all of those hotel fees and so the hotel industry really came down to politicians and then there were vacation rentals in I would say maybe local subdivisions where you did have you know the entire subdivision there were all working class families and then you would have every once in a while I would say a family you know barbecuing maybe you know hanging out so early in the morning when you have the surrounding neighborhood right that has to work the next day and so it was a combination of the hotel industry with you know some disgruntled full-time residents and so it really pushed the politicians to kind of take a step back and look at it but then on the flip side I did see you know selling real estate um maybe a grandmother who has maybe like a separate what we call ohana maybe a guest quarters or mother-in-law's quarters that was just trying to make her ends meet and she would just vacation rent it and that would help her pay her mortgage so I did see that side of it um and I think our island did the best our county with really grandfathering in these you know old vacation rentals and really working with the community to try to find a balance instead of I think the other islands are a little bit more strict they just you know honed in and said no only this many and no more vacation rentals or only these areas of the island can be vacation renting and nothing else they all have to stop and so our county council I think did a great job of just trying to you know work with everyone of finding a balance instead of just you know not working with the vacation rental owners which is nice I think yeah yeah because short rentals I mean like a lot of people make ends meet by renting out an extra bedroom or renting out their guest house and when you take that away I mean it really does hurt a lot of people so I'm glad to hear that you guys handle that differently than you know on the other island but so let me ask you this then um when you got into real estate was it just about because you said you kind of fell into vacation rentals because most of it of the clients are investors um how are you handling these investors that are coming into your market now that have these like high cash flow demands because it's a different market today than it was five years ago or eight years ago prices are different um and I would imagine rental rates haven't quite gone up as much as prices as in fact we know they haven't um so that means that the returns have kind of diminished but we'll have investors with these expectations so what are you doing when you get these people that just like demand you know these crazy returns are you just like telling them no I can't help you no I you know when I first got into real estate I had a broker and he explained to me it's not selling real estate to people it's educating them about buying real estate and so it's really I find educating them of you know if they want to buy in a certain area I don't fly out saying no I just kind of help them with their expectations you know and it usually works out because they may have wanted to live you know they see a really cheap vacation rental then you have to explain you know there's no cost school nearby or just the different areas and then um so that's really helped just educating them of what their expectations are their cap rate may not be double digits like they're used to you know the HOA fees might be a little bit higher but say for example they don't have a mortgage so just kind of putting them in that formula of what they're looking at what are their expectations and then just seeing how they can make a profit um you know vacation renting and I do find people that strictly run it at like a business and you would probably agree with this they do make money as a profit and then you have you know people that just want to buy a second home and just have their you know expenses paid for and so you do have the sometimes intense you know just I'm just an investor I want that return and they're going to get it and then you have the family you know that maybe they're paying for their kids in college they wanted a second home to go to as a vacation rental so it's just just different types of buyers that we do get here and so you just kind of have to see what their expectations are where they should buy um for example you know the resort areas you're going to be able to get a higher return right the HOAs are higher but then you what the your renters actually get more amenities right with white sand beaches restaurants snorkeling and so it is a higher price point but in the long run that's where they're going to see their return is actually in those areas um is what kind of teach them instead of being maybe really in a rural area you can only pretty much going to you know vacation rental rates are going to be much lower just because they're going to have to rent a car maybe right or drive a while to just see any type of activity or the volcano or something well one thing that kind of strikes me like just hearing you talk about this is that we really are talking about two different types of investors there's the lifestyle investors who want that lifestyle benefit of being able to use it and then we are you know our numbers investors are cashflow investors people like me people like I don't know if you're into investing but you know I'll go anywhere and invest as long as the numbers are good but then the lifestyle investors I feel like those are the ones that will be drawn a lot to your market because of the incredible lifestyle benefits of being able to vacation there um but then they're using it all the time you know and so when they start using it all the time it's like how do you got to get them out of there so that it can be paid for it like how do you break it to people that like look I know this is your dream to own here um and a lot of people listening might be in that situation and we kind of have to like bring them back down to reality is like yeah you stay here but like you know if you say too much you're going to get out of your pocket for this like how do you approach it I just from the beginning just set their expectations of what are they looking for because you are correct you have those two types of buyers right or sometimes they are really investors and then they turn to the lifestyle buyer right because now they're parents and we always joke about it it's like when people buy in Hawaii all of a sudden they have these long-lost relatives that want to come and visit them or visit where you know their property especially if it's a vacation rental and so I'll start I've sold people that strictly want to do vacation renting and then I would you know take him or jar to school and I see them running you know exercising and then I I'm thinking don't you have vacation renters and said oh no we we cancelled it for this month we're staying and so it's things you know stories like that that you do see the people just you know when they start visiting here they want to visit even more right and so when you do go to sell though I always explain to investors that are buying because a lot of the times we have those lifestyle owners right vacation rental owners and then you have the real real estate investor right and then you have to explain to them because they look at the numbers and they're like these should be much more and so you really have to explain to them okay well they're staying here six months of the year or you know it's only rented out you know you have to look at the number of nights and the rates that they're charging and then you know I have a couple of friends that do own property management companies they just do a forecast for them right so that they can see okay right now it's making this amount but it can potentially make this amount too yeah yeah property management you just said it's always about to jump in that is kind of the key component to making this work I was just at the verma conference the vacation rental managers association conference in Las Vegas and all the property managers from all over the world come together here and talk about you know how they can generate more bookings more revenue what is the landscape like for finding good property managers over on the big island I mean is there a good amount of them are they hard to find especially for vacation rental because there's a whole artistic aspect I would say that goes into marketing a vacation rental versus a long-term rental exactly there's much more you're more involved right with vacation renting you have to make sure it's cleaned and you know walkthroughs is the plumbing okay you know is there a water leak and it's compared to a long-term rental where maybe they're walking through every six months I would say when I first gone to real estate there wasn't too much of a competition you had these mom and pop kind of shops and so they were just price gouging these some of these owners and I would look at their numbers and I had I remember having a elderly man and he thought he you know scored making I think $68 that month and I looked at what he the revenue he was making and then they were taking and that time 55% was our marketing property management fee so they were just taking most of what he was making and then as I started looking into it you know over the years we have more competition right which is good because that you know then their fees had to come down because at that time they were charging anywhere I would say between 25 55% especially in the resort areas and they weren't you know showing up with a flower land in my time right for the renters they're just sending an email this is the lockbox code and you would never really see them and so I was I was thinking oh I wonder what they're charging for that's kind of you know a high fee but over the years there's more companies moving in which force them to lower their fees right and be it had now it's much more competitive so you can have maybe 10% or 8% right and then it goes up and what I'm also seeing are a lot of the property management companies which I think is smart they have you know they'll ask the owner what do you want us to do because some owners want to be more involved right than others and so they're the higher the percentage it means they're you know delivering through baskets right and they're you know delivering champagne you know upon arrival to they're paying the taxes for the owners so just scales up right the percentage will go up depending on how much involvement the sellers want them to be which is nice instead of years ago it was just a cookie cutter rate right this is what you're going to pay us and the sellers didn't really have a choice or these homeowners and so now it's nice to see more competition and then you know different plans that they do offer the homeowners now yeah I think competition is so healthy for any market whenever you don't have enough competition that that's what happens and that's wild 50 percent I mean just that alone on top of your operating expenses and your utilities I can't imagine people returning a profit back then I'm glad to hear that's really evolved since then now is it a requirement to have a property manager run your property for vacation rental or can you do it by yourself if you don't want to hire one I see people do it themselves but you're supposed to have an on island representative when you do apply for your permit and so these are supposed to have a representative on island and that's just in case you know some there's a complaint and the county has it's actually a contact person right that they can call to you know go to the property so that there's at least some accountability because years ago there was no one on island and so there was no one you know if there was something going on or vacation renters are partying overnight then there was no one you know more a homeowner could call the county and say okay who's their contact that we could call to you know to yeah follow the rules basically so that is nice that the county did that so there at least there's a contact person on every vacation rental so let's talk a little bit about you know because these days buying a vacation rental it's not good enough anymore to just buy a property put nice furniture in it and stick it on airbnb like this is one of the big topics at verma this year was it really has to stand out i mean there's so much competition in the market now um it's just got to stand out like what are people really wanting when they come to hawaii from a vacation rental like how do you create that unique experience where they're going to stay at your place and it's unforgettable and they're going to come back again and they're happy to pay the rate well i've seen actually some homeowners it like you were just saying they put in you know i think it's maintain the unit right or the property so if it looks nice right and has nice furniture it's not all raggedy and busted up i'm also seeing them have these welcome baskets right so all these added touches that you could get at a hotel but you're getting that in a vacation rental really stands out and i think also how responsive um the property manager is or the homeowner you know where they're able to you know quickly get an answer of something the internet goes down or something right i feel like it's really servicing the renter being responsive giving them a good quality product is what they're looking for i do see a lot of vacation rentals which this is smart because we are in hawaii right they have surfboard snorkeling gear so they supply them with all these things for the families to use instead of a family having to go out and buy all of those items right just to go to the beach i do have another client and this was smart because i always thought about this in covid they had moved or they either sold a lot of the rental cars or they moved them to another island right and they held them at the stadium in oahu so rental cars were so hard to come by so what he started doing was just buying cars and then he supplies that you know because this island is so large with his vacation rental so that his families that visit they don't have to go and try to find you know oh it's the iron man world triathlon there's no vacation rental uh no cars right and so he he saw that that was a need you know depending on what was event was happening on the island so he just started buying cars and he supplies it now with his properties which his renters absolutely love because they don't have to you know it's one extra thing they have to find on the island so he just includes it yeah no that's brilliant that's actually one of the best ideas i've heard and i'm sure he has people like with no problem to pay the rate that he's charging because like one and that's really really smart um what about like uh millennials right millennials love instagram and everything's all about like what it looks like posting on their instagram have you seen anybody doing any like really over the top themes inside their home to where it's like gone instagram viral or have we not hit that point yet i don't think we've really hit that point yet here but i find the vacation rentals that make quite a bit of money are the ones that of course have everything supplied in the home the service i mean they really you know upkeep their homes compared to a home hasn't been really looked at for a while and it's just you know constant turnover then those rates are not as high and then i do i don't know if you come across this but i'm coming across quite a bit of rentals that are you know their rates are a couple years old so they haven't really caught up with increasing them um so i don't know if that's a combination of just the property management company not really being involved in saying you know i think we can increase these rates here um i mean it sounds like they're not using dynamic pricing software because well most smart owners and managers are going to use that dynamic pricing software which is going to keep the rates in alignment with you know people traveling to the island certain points events you know it goes it's just like airline tickets right i've noticed like a lot of like maybe single owners that aren't hiring a manager or mom and pop managers just don't leverage that kind of tech but too in that that comment about raising rates i mean with the way prices have gone up and the way inflation is going i mean you have to start raising your rates like you can't just not raise your rates you're not going to make money um you might be really booked out but then the cost of providing those supplies to those renters have gone up um labor expenses have gone up so if uh people aren't doing that i mean i would say they probably need a new manager because that that's got to be adjusted every year based on what's in the market right i'm seeing what's interesting in a trend in the vacation rental industry right now is this like tiny house movement these really like small unique stays i don't know i know probably not anywhere near the water but what about like inland where maybe there's more land um and ways to do this like are you seeing anybody doing these like tiny houses or tree house experiences or anything like that i i do they were either with our zoning though i always have to explain to people so tiny homes with our county it falls under the department of motor vehicle um you know hoy doesn't have trailer parks or anything in our state so it's something new that our government i feel hasn't caught up with with passing you know these laws and zoning of those tiny homes i do see tiny homes in the volcano area and around the island where people are vacation renting but it would have to you know to do that it would have to have the proper zoning with our county and state the homeowner would probably live on that property so it would be considered a hosted rental um and then it would also have to usually where i'm seeing little tiny homes and their vacation renting the owner lives there and the subdivision uh cc and rs right they allow vacation renting also and so those are just different things i tell people when we're looking at the different neighborhoods of what they can do um most of the time they'll now since they passed that law a couple of years ago your can't just start building tiny homes and vacation renting anymore unless they were pretty much either grandfathered in or the owner actually lives on the property full time so that and i think our government's kind of behind on that they're still trying to navigate that of the tiny homes concept but i am seeing more tiny homes more bamboo homes which are really cool um and there is one i saw in the volcano area was like a modern tree house and they vacation rented and it's book solid yeah i went to go look it up and say okay can we rent it but it's book solid it's it's incredible how that owner had that concept i've seen that happening all over is like these smaller unique stays are just booked solid because the millennials just love that unique experience that's why i was asking um if you could do that anywhere because if you can that's a major opportunity right now in an underserved market right island so i think there's a lot of revenue opportunities there what about land and building vacation rentals like is that something people can still do or i would imagine like really nobody's got land left to sell we have quite a bit of land to sell i think it's 10 of this entire island is owned to be developed that's it so most of it they would not be able to build so that's why i'll always keep the inventory low on the island unless the same county starts changing our zoning um but to build that kind of a concept you would have to build it in a resort zoned area and i live in a resort zoning area so you would have to either buy land and then change the zoning which could take quite a bit of time and money in our state to do um then that's only because most of the property here is zoned there's two types of zoning it's county and state and so the state will always override the county right so maybe the county will allow it but then the state zoning won't and so it has to match up um to be able to do that but mostly um in resort zones if it's already resort zoning you can definitely go ahead and start building and vacation renting oh interesting so if someone wants to do that it's going to be resort zoned um are they taxed differently in the resort area they are we're taxed a higher um they just changed it if it's two the home is worth two million and i mean you know they i think almost doubled the property taxes but Hawaii's property taxes are still low um compared to the rest of the country because our property taxes don't fund into our department of education system that comes out of the state general fund which a lot of people look at the property tax rate and it's much lower and that's just because the state fund you know state funds a public education system not the property taxes the property taxes go to the counties so it's a little bit different that's good that it's not as high as say California which people get excited to see yeah do you get a lot in California um buying properties there right now we we do and since COVID it's fascinating the different countries that now buy in in Hawaii to a lot of the states we're seeing a lot of east coast states Texas I've had people buy from Alabama and you know normally it would be Washington California right Oregon Arizona buying in Hawaii and so you're seeing more people from Florida it's one of the top 10 that states that they're migrating you know across the country which is interesting yeah i think our our beaches are just getting um really crowded here yeah so they're trying something new um well we have about a minute left and i really want to take that opportunity for you to share a little bit about how people can get in touch with you if someone's interested in working with you what the approach is like okay you know what the next steps would be if they want to you know be working with someone at your knowledge level and what kind of client you do take on because i understand you know i'm sure you don't just take every client it's too much for you i co-own the real estate company with my mom um she's a listing agent on this new development that's going to happen which the first phase is going to be workforce housing right a combination of different types of housing which our island i think is about 15,000 homes short with our current residents so we have a lot more homes to build just to service the residents here but um i do help all walks of life i am born and raised here and so you grow up with all walks of life and so i go ahead and sell two vacation renters first time home buyers single moms you know in business men um to again touch with me they could either give me a call on my cell phone it's<PHONE_NUMBER> or my email is my first name LylonLAILAN at high dev group so h-i-d-e-v-g-r-o-u-p dot com Lylon at high dev group dot com and the name of my company is Hawaii development group is our real estate company perfect well thank you so much for your time today it was great chatting with you i learned a lot um and for anyone listening definitely reach out to her if you have any questions about investing in the hawaii market she knows her stuff and we really hope to see you on the next show where we have some more interesting topics to dive into on vacation rentals thank you aloha thank you so much thank you so much for watching think tech hawaii if you like what we do please like us and click the subscribe button on youtube and the follow button on vimeo you can also follow us on facebook instagram twitter and linked in and donate to us at think tech hawaii dot com mahalo


Top online lesson plan resources for new and advanced teachers. For many new and experienced DFL teachers, one of the most challenging aspects of their career is coming up with lesson plans that are both engaging and effective. Even if your employer provides a specific textbook to follow as a curriculum, you will often find that this can be rather dull for the students unless you spice things up by adding in some fun and original ideas for men outside source. By searching online you will find a huge amount of sites offering all manner of resources of varying quality and relevance. To save you the hassle of searching through them all, we have listed our five favorite websites that you can use to find quality lesson plans free of charge. Using English This very useful website offers teachers a wealth of information and resources, regardless of their experience level. There are over a thousand different lesson plans and worksheets that you can download for free and these are conveniently organized by student level, grammar topic, and overall theme. Among its many other features are interactive online quizzes, article and reference libraries covering a wide range of subjects, and a general forum where you can swap ideas and chat with other teachers from around the world. There is also a teacher training forum where you can get advice and support from experts in all areas of English language teaching. TEFL.net This website covers all aspects of TEFL, including training courses and job listings from all over the world. Although it is not quite as easy to navigate as some other sites, you will still find a large number of great teaching resources that can be downloaded for free. As well as a wide range of lesson plans and worksheets, the site also has a handy worksheet generator that allows you to quickly produce and download your own worksheets using the specific vocabulary that you want to use in your lesson. Elsewhere you will find posters, videos, and other resources that you can download to add something extra to your classroom. ESL Galaxy. This site is another that offers a huge amount of free downloadable lesson plans and worksheets for all ages and levels. Teachers of young learners should find this site especially useful as there is a great section containing a range of downloadable games that should keep your students engaged and entertained while learning. The interactive section is also a great to lift you and your students have access to computers in the classroom. There are a range of interactive grammar and vocabulary quizzes, exercises, and games for your students to tackle. British Council. This high-quality website is operated by a widely respected British-based organization that promotes English language education across much of the globe. The site offers an impressive range of teaching resources that are conveniently organized into sections covering kids, teens, and adults. Each section can also be filtered by students' level. Every downloadable lesson plan comes complete with detailed instructions and all the materials needed to deliver it in the classroom. Under the Kids and Teens sections, you will also find a teaching tools tab which gives you access to some extra resources such as boasters, flashcards, and an online interactive anemic chart. Bogglesrilled, lanternfish. Despite having two seemingly interchangeable names, this site has plenty of great teaching resources that are primarily aimed at young learners. For ease of navigation, we suggest you focus on the menu at the top of the home page which has links to all the main sections of the site. On the downside, the lesson plans here are not sorted by language level, but you will find a wide array of useful downloads, such as flashcards, song lyrics, word searches, and crossword puzzles. As with all our recommended sites, the resources here are free to download and can be used as often as you like. Are you ready to teach English abroad? Once you have completed your TEFL certification course and have found a job that suits your plans, it is time to start thinking about the content of your future lessons. Whether you are given a set curriculum or are responsible for providing your own, this list of useful resource sites could well become the most important part of your lesson planning routine. Speak with an ITTT advisor today to put together your personal plan for teaching English abroad. Send us an email or call us toll free at 1-800-490-0531 to speak with an ITTT advisor today.


Guitar and Excel, interval and modes complement and parallel worksheet part number 8. You know, many guitarists fail because they're so focused on the idea that the show must go on.  Like, you don't want the audience being like, what's that guitar guy going on about up there? What's he going on about now? Good names. Yeah, the show must go on. No. No, that's not good enough. That's not good. That kind of sayings for slackers. The show must totally go off. That's what I'm talking about. You rock! So let's start going off on Excel. Here we are in Excel. If you don't have access to this workbook, that's okay because we basically built this from a blank worksheet but started in prior presentation. So if you want to build this from a blank worksheet, you could begin back there. However, if you do have access to this workbook, there's a bunch of tabs down below, including the first two representing the end product, the final work we're putting together. The numbered tabs tie into the related video presentations so you can work through them on a step-by-step basis. The blue tab is where we're going to work here. It's going to start where we ended off last time. Let's do a quick recap of what we have done thus far. Notice that we're making two tabs here, a complement mode and a parallel mode. So we basically ended off on the complement mode a little bit ago on the tab 3022. So let's start our recap over here. So on this tab, we started basically by just listing out the musical alphabet. So we had A, A sharp B, B, C, C sharp D, E, and so on and so forth. We then numbered the musical alphabet. We then put the numbers and letters together. We then created a key which will adjust that musical alphabet if you think of it as a circle to the starting point of the scale that we want to be in. In this case, a C, but we could change it here to like a G, for example. But we'll keep it on the form. And then we have our measuring tool that we put next to that starting point. First, the easy way, just saying zero, one, two, three, four, five, half steps up. And then we did it the more confusing way with the more confusing names of those intervals. So we're just naming the intervals instead of five notes up. We're going to call it a perfect fourth, right? And then we basically put a symbol for them so that we can abbreviate.  So then we took that scale that we're in, the four and the C. We applied the formula for the C major, whole, whole, half, whole, whole, whole, half to construct our worksheet on the right, which gives us the seven notes out of the 12 notes scale and provides us with the chord constructions. So then we did a similar process down below, but this time it measures in terms of the intervals. So now we can look at this worksheet and we can look at the related worksheet, which will tie all of the intervals to the one note in the scale, not into each of these chords. If I want to tie into the one note of say the two chords like the D, then I can go into the related modes that we put on down below. This is the Dorian mode and now all of the intervals tie into the D. We then put our worksheets on the right together, which are the fretboard, the fretboard in terms of letters and numbers, and then in terms of intervals, this being the major scale, same process, this being for the Dorian and the related modes on down below. So we got all the modes on down below and the modes are going to be the related modes or the complement modes down below. So the root note is going to change, but all of the notes around it will be the same in essence. We put a circular format of our scale together here as well and the circle of thirds. We then looked at a situation where we wanted the parallel modes. So we copied over the worksheet, we have basically the same construction, but now we just changed it so that when I go down to the Dorian, it's still a Dorian, but now it's the C Dorian, so the C is always going to be the one note in the scale. Okay, so now I'm going to house this new project and you could do this new project on just a blank worksheet if you want to, but I'm going to put it next to where we put the complement modes. So we left off last time on these complement modes so that we had the Dorian underneath it and so on and so forth, and then I'm going to put this new worksheet on the right. Now again, if you just want to do this as a project in and of itself on a different tab, you can, but I'm trying to minimize the number of tabs that we have here and have everything kind of in one place. Okay, so this is going to be another one of these circular projects. So I'm going to try to move it out in the boonies over here somewhere and try to see if we can make this circular thing work. So I'm going to say, okay, let's go from BQ and I'm going to go all the way to the right and make these a little bit skinnier and so that we can see them in one spot. So there we have it. And so then let's go like see if I could just go like right in the middle of this thing and then I'm going to go down to like, I don't know, let's start it out here, down here somewhere. I'm going to say we're going to start with the C. So this is going to be equal to and I'll pick up the C from our wheel over here. So I'm just going to pick up the C from our wheel. And so there we have that. Let's see if I can try to figure out how many cells I want to make this go down one, two, three, four, five, six. So let's go like one, two, three, four, and then over one, two, three. So then I'm going to just space out my D over here. So I'm just going to pick up the same wheel as our starting point. So the D and then like one, and then I'm going to go down like one, two, three, four and pick up an E. I might have to move these around a bit later, but I'm doing my best to space them out properly. One, two, three, and then four, and then over one. Let's put that F here. So there's the F. Now notice I've got these long header columns. I'm just going to make the column smaller, which will kind of mean you won't be able to see all of the header on the related cell to the left. But that's okay. So that's okay. We're okay with that. And so then I'm going to go one, two, three, four. Let's make this the G, the G, and then I'm going to go like one over and then one, two, three, four up. And let's make this the A. And then I'm going to go like, I'm just going to tie it out to that D here. So this is going to be the B. So hopefully that's sufficiently spaced out for us. So we just got this same circle. We just put our musical seven notes in the key of C in somewhat of a circular format. That's going to be our starting point. And so the next thing I would like to do here is I'm going to do the same numbering system. So we're starting off with the same thing here. So we'll say this is the one. So boom, it's a one. And this is going to be the two and it's a lower case. And we're doing the Roman numeral two. So we're starting with the same thing here. Roman numeral two. And if you're doing this by scratch, from scratch, you could just type these in here. And if you want a two, you can say Roman and that'll give you a two. But if you want a lower case, you say that it's going to be lower Roman two. Oh, there it goes. So you can do that or you can just type two I's if you want, but that's not the cool way to do it. But if you want to be if you if you want to do it that way, fine, fine. I guess it works. But the formula, the formula, the F is going to be pick up the F. The F is going to be here. And then the G is going to be five. And then this is going to be the six. Hopefully I got all of these correct because I was kind of. And then this is going to be the seven. Okay, so there we have it. So now we've got our circle, the one the two are representing minor chord constructions. That's what the lower case means. And I kind of like this circle to because I get the 145 like on the top and the bottom when it's built like this, which is kind of nice because those are the ones that are going to be the majors indicated by the uppercase Roman numerals. And then the ones on the side are the lower case and then you've got this diminished with the dot. So I was actually going to number them as well. So I'm actually going to push these all to the right. Let's push this to the right one. I'm going to say let's just pull this over to the right and then let's pull this one. I'm going to pull this one up, get them all going the same direction and then pull it to the right. Pull it to the right. That didn't pull pull it to the right. Pull it to the down. Pull it to the down. Okay, and then I'm going to I'm going to put a one again. You could just put a number one right now, but I'm going to try to pull it from what we've built over here somewhere. And so I'll try to pull it from our numbers over here. So there's the one I'm going to call this the two equals the two.  And so we're going to say that's the three. And then this is going to be the four. So this is the four and this is going to be the five. So we'll say okay. This is the five and this is going to be the six. And so we'll say this is the six and then the seven. So this is going to be the seven. Okay, so there's our numbers. We can see them in plain number format and Roman numeral, which gives us that added that added bit of it being the the chord being upper or lower case. We also want to add the interval now and we can do that over here. So add that from our interval circle and I'll put that on the right. So this is going to be the position one. This is going to be P1. Here it is position one or zero notes away because we're starting on the C and this one then is going to be the two. Or otherwise known as the major second. And this is going to be the three, which is going to be the three to do, which is going to be a major third. And so I'm going to say okay. And then this is going to be to put this up here this time. What I'm down here on the F the F is going to be equal to. Where am I now I was on the F is down here the perfect fourth. And then the G is going to be equal to the G is the perfect fifth. And then the A is going to be equal to the major sixth. And then the B is going to be equal to the major seven. Boom. So now we have the intervals. We have everything kind of mapped out in this one spot. So now what I'm going to do is I'm going to make this this format this I'm going to make this green. And we'll say this is going to be green. Let's make it that green. Now let's make it the dark green. And then I'm going to put the text as white. I'll do the same up here. Let's do this green white. And then let's center these are going to center those so that looks good. And we can put maybe some borders around it so that we can see a little better. Okay. And then down here I'm going to make this one red. So I'm going to make this one red and white. But I'm going to make these green to do. And so we're going to say boom this green and white. And I need to make I need to make it a little bit wider.  So I'm going to go all the way over so I can make them the same width. So I'm going to go from here all the way over like to here somewhere. And make this just wide enough so it fits like the widest thing which is right here. So let's fit that one. That's the fat one. We got to fit the fat one in there. Okay. Do not shame the the major seven. It's an important interval. And so we're going to say there it is and the major seven lens weight to the whole enterprise. Okay. I don't know what I'm talking about. This is going to be an E. Let's hit let's make this orange and white. Oh wait a sec. Not orange and gray orange. And then this should be white. And then see see what's happening here is so now this is green. So I'm following the green around. And so so this so this two is a D. But I'm following the green around because what we're going to do next time is we're going to start from the D. Make it the one and then follow the red around which will be the Dorian so that we have all of the modes in one place. So I can show that here. This is going to be I'm going to call this the green is going to be the major. I'm going to select that or I could put it in the middle that might be easier to do. If I just put it in the middle and then I center it and then I make this green and white and then maybe put some borders around that. Actually no no this one needs like one border around the whole thing like that and then like that. Okay. And so then down here what will happen is this is going to be the Dorian. I'll put it out here Dorian and I'll make this whole thing red. So the Dorian is going to be red and I'll put a border around the whole thing and make that white. And then this is going to be it. Let's see if I can spell it right so I'll copy it. I can't so I'll copy it and there we go. And then this is going to be the Phrygian. It's going to be the orange and white. And then we've got the Lydian which is going to be I'm going to call that blue your blue Lydian. I called it blue. And then the mix of Lydian is going to be purple. Let's bring that to the middle. Let's center it home tab center and we're going to make that purple purple and here and I'll make this blue as well. Let's make let's make this one purple first since I'm on the purple. And then this one's going to be blue and then white and then this one I need to make white and then this one's going to be the minor. Otherwise no one is Aeolian and so there we have that. It's a little long so I'm going to make it a little bit smaller. That one's going to be a little small. And then we're going to say that this is going to be let's make it brown. I'm going to make it brown. Where's the brown that I used over here? I had a brown like that brown. Is that what I used? And so then I'm going to say this is going to be yellow and this is going to be the loco. Loki and the crazy one. Keep an eye on that one. Keep an eye on that one. Okay. Home tab and then this one's going to be boom. Okay. So there we have it. So now I'm going to center the green all the way around. So let's center this and this is going to be green and white. And so this is going to be green and white, green, white center. So the two is a D of the major and it's a minor chord construction. It's a major second away. The three is an E and it's a three note of the major of the key of C and it's a major third. The four is going to be the F and this should be this blue. Why did I put it a different blue? It's going to be the F and let's center it too. And it's going to be the the perfect fourth away and then this one's going to be purple. Let's make this purple boom and center it and white. So the this G is going to be is going to be the fifth. The fifth, it's going to make a major chord and it's the perfect seven. I mean the perfect fifth, which is seven notes away from the C if you talk about a 12 note interval. And then this one I'm going to make us actually this should be green. I'm confusing myself by talking and trying to do this at the same time, which is harder than I would have thought at first. So then I'm going to center that there it is. So this is the six, which will be a minor chord construction. And it's a major six with which is nine notes away from the C. And then this is going to be if I center this, it's going to be green and white. This is going to be the seven that diminished and it's a major seven, which is actually 11 notes away from the C if we're looking at all 12 notes, right? So it's a so when I say it's a major seven, notice what's happening here. Just a quick recap. We only have seven out of the 12 notes. So if I say this is the perfect first, it's actually zero steps away. It's the first because it's the first note in the scale. That's what this one is telling you. It's the first note of the scale. This one is is the second note of the scale. So it's a second and it's a major second, but the second tells you it's the second note of the scale. And it's the second note of distance from the key of C. If you look at all 12 notes in the scale, this one says it's a major third. That means it's the third note. That's what that three is telling you of the scale. If you start on a seven note scale of C major, but it's actually four notes from the C. If you looked at all 12 notes, right? And this one is the fifth or the fourth. It's a perfect fourth. The four here tells you it's the fourth note in the major scale. And the five tells you that it's five notes away. If you look at all 12 notes in the scale, this one is going to be the fifth, the perfect fifth. The five tells you it's the five note in the seven note scale. The seven here is telling you it's seven notes away. When you look at all 12 notes in the musical alphabet starting from the key of C and counting out. And then this one is the sixth, the major sixth is telling you it's the sixth note in the scale of the C. The nine is telling you that it's actually nine notes away when you look at all 12 notes in the musical alphabet. And then the seven here, again, it's the seven notes away. It's the seventh note in the scale, but it's actually 11 notes away when you look at all 12 notes in the musical alphabet. Okay, let's put some brackets around these, not that kind. Let's put borders, all borders. We want borders everywhere, borderized. Everything needs to be in its own little box. Okay, everything needs to be separated. Okay, so then we're going to go here and like if I started on the D then then I'm just doing the same thing. Same notes now, because this is just all of the complement modes, but now I'm going to start on the D. So that means the D is now going to be the one. It's going to be the one, but it's going to be a, it needs to be a minor, right? So what I can do here is because, because all of these are going to be the same type of chord, which is going to be a minor chord if you constructed it from the D. So I could do it this way. This equals the lower and then of this I over here, right? So now it's a lowercase I. And then if this is going to be equal to the one and now the one needs to be the perfect first. So let's make this is going to be red. So now I'm going to say this is red and white and centered and we'll put boxes around it. And I shouldn't have done this one. So I'm going to format paint over here to get rid of that. So now if I follow this around, if I go from the D to the E and now I'm looking at the red. So now it's not the three anymore. This is going to be the two. If I think of this as the one, this is the two. It's still going to be a minor chord that I would construct from it. So if I'm thinking of the D as the one, this is going to be the two. So I know that's going to be a two. I know that when I think about whether or not it's going to be a major or minor chord, it's always going to be the same. So whether this is going to be upper or lowercase will be the same. So because these are all of the complement or related modes. When I look at the E, it's always going to be constructed from there a minor chord.  So I'm going to say that this is going to be equal to the two up top. And it's minor, so I don't need to change that. And then when I look at the intervals, I'm actually going to pull this from the Dorian. So I'm going to look at the Dorian. I'm going to look at the E on the Dorian that we constructed to the right. So I'm going to go down to the Dorian. And here we are. And I'm looking at the relation to the E. So there's the E. And I'm looking at this then, which is going to be two note away major second. So there we have that. And so then I'm going to say, OK, let's go ahead and make that red. Let's make it white. Let's make it centered. And there it is. All right. Let's also put some brackets around it. OK. We'll bracketize it. All right. Let's go to this one. So now I'm going to say once again, let's make it red and white first. So we can kind of follow that around as we do this. We're going to say, all right, this is going to be equal to it's now the three because we're starting on the D. So now we're on the two. We're on the three. The three is going to be, it's always going to be a major chord if we construct it. So I need an uppercase here. So I need, instead of the lower case, I need an uppercase. So I'm going to say this equals upper. And I'll just pick that three that makes it a capital three here. And then I'm going to look at my related Dorian because I'm still on the Dorian because that's what the red is following. And I'm looking at the F in Dorian that we constructed over here. So I'm going to say, all right, here's the Dorian. There's the F that was the three. So I'm going to pick up this related interval, which is the minor third. So there we have it. Okay. Let's center that. And let's put some, let's center it. Let's put some brackets around it. And let's go to this one. I'll do the same thing. Center, red, and brackets around it. And then I'm going to say, okay, this is going to be equal to the four because we started on the red. So this is one, you know, the one, two, three, and then the four. This needs to be capital as well. So I can just say this is going to be equal to the prior green one. It's already capital. So that is good. And then I'm going to look at the Dorian again. I'm still on Dorian and I'm going to look at the related to the G. So I'm going to say, where's my Dorian over here? And then I'm looking at the thing that's related to the G. So here's the G. So I'm looking at the related, which is a perfect fourth, perfect fourth. All right. I think I've got that right, hopefully. And then we're going to say, okay, let's follow this around. Let's make this once again, red, bracket, white center. And this is going to be then the five. So we'll say this is the five. This is going to be, it needs to be now a lower case. So I'm going to say this is going to be equal to lower of that five. So now it's in the lower case. And now I'm going to look for the A in Dorian and find the related interval. So I'm going to go, all right, here's my Dorian. There is the A. So let's find the related interval, which is the perfect fifth, perfect fifth. Hopefully we've got that correct. I'm trusting my worksheet a bit here to do that. And then we're going to go, okay, let's do it again here. We're going to say this is going to be red, bracketed and white and centered. So this is going to be number six. And this needs the little diminished dot over here. So it needs to be that with a diminished dot. So I can do that by saying it's going to be this and then tying it together with an and. And then quotes to put a text period quotes ended. And there it is. And then I'm going to find the Dorian. I'm going to find the B in the Dorian and the related interval. So I'm going to go back on over here and say here it is. There's the Dorian. Here's the Dorian. Here's where the B is. Here's the related interval down below. So now we've got those two kind of in one spot. Hopefully I've got hopefully I map that at all correct. Oh, I've got one more up here and let's go boom, boom, boom. And it's centered. Okay, so this is going to be then equal to the last one, the seven. It needs to be an uppercase. So I'm going to say now I can't really change this one to take the dot away as easily. So I'm just going to say let's just type it in here equals lower. I need an upper just Roman number seven, boom. And then this is going to be I'm looking for the Dorian where we have the C to find the related interval. So I'm going to say right here's the Dorian. Here's the C. So the related interval is a minor seven. So hopefully I've got that correct. And so now you can see we've kind of mapped both of them. So you can look at this one worksheet and say if I start on the green, I can follow the green around and I have that circle. And then if I want to follow the Dorian, which is the compliment mode, I can follow the red around and go around that circle. So we'll continue and we'll keep on adding these next time, of course, starting on the fridge. And let's actually just map out the colors first out here. We'll do that now. Let's just map out this is going to be orange and I'll put brackets and to do it. And then this is going to be orange brackets to do it and centered. This will be orange brackets, orange, white and center. This will be brackets, orange, white and center. This will be brackets, orange, white and center. This will be brackets, orange, white and then center. And then this one is going to be brackets, orange, white and then center. Should we continue that? If I continue that around, this one's going to be the blue. If I continue that, it's going to be okay, this is going to be the blue. And then it's going to be brackets, white and center. This will be brackets, blue, white and center. This will be brackets, blue, white and center. I could format paint them. That might be easier, wouldn't it? Is that the same blue? I think it is. I put something in here. The white text makes it look different. So I'll take that and then format paint it here. Let's just format paint one of these over here. And there we go. And then let's say then we're going to have the purple. So this will be purple, brackets, white, center. And I'll just copy one of these or format paint one of these. Format paint one of these. Format paint one of these. Format paint one of these. And then format paint one of these. And then format paint one of these. And then we'll have the brown. And brackets, white and center. Format paint. And then format paint. And then format paint. And then format paint. And then format paint. One more time. Format paint. And then we're going to have the yellow. This one I'm not going to use the white text. I'm going to use the dark text. So I'm not going to make it white. I'm going to keep it at the black text. And format paint that up here. Format paint this here. Format paint this here. And format paint it down to here. Format paint this to here. Format paint this to here. Format paint this to here. And let's just clean this up a little bit. Let's put some brackets around here. Not all borders, but an outstanding border. Let's put that outline around here. Let's put an outline around this one. Put an outline around this one. An outline around this one. Outline around this. This. And this. And maybe this. And then this. And this. Okay, so now we have the outline. And next time we'll go through a bit of a tedious task to map it all out. But again, if you actually construct this, I think it's useful to kind of follow this around. And then you get an idea of what's going on. And then you can basically have all of these things in one kind of one area instead of looking at these different squares and these different circles, right? You can have them in one circle, although it's kind of confusing to look at. But I think it could have its uses. So we'll continue on that next time.


What's really becoming very interesting about hemp is hemp is of course becoming the next big agricultural product You're seeing all these states that have been very conservative and maybe very much against cannabis Now all their farmers are clamoring to get hemp licenses if that state requires it some do some don't it changes by the state But you know we are seeing like say a state like Texas which Has almost no interest in legalizing cannabis for medicinal. It's got a very very very restrictive medicinal program They really don't even want to do adult use, but they have just started looking into hemp farming because look at it This way if you're a cotton grower in Texas cotton is very Intensive on pesticides lots of bugs. It's a it's a really hard product to grow and process It's a it's just a challenge as a farmer Throw hemp into the mix it grows really easy and they don't hardly have any pesticides to deal with and you can grow it Outside you can grow it in just about any climate and then you've got a real big market for it right now So part and parcel with that As you know with agricultural markets farmers want to have options on that product they want to be able to Figure out their pricing and they want to smooth their pricing And that's something that we're probably going to start to see in the hemp industry And you can't really do any kind of hemp financial instruments without Pricing and that's where it starts to get super interesting because this is a market where we don't have any kind of standardized pricing and we have a great panel here that Help us with a lot of the data that we use at Green Market report for some of our reports But I'm going to turn it over now to our moderator Peter Vogel, and he is the CEO of leaf wire All right. Thank you Debra So we are the economics of the new hemp market. We're excited to be here today And I think you'll find we've a bunch of very insightful panelists I know I've enjoyed speaking with them over the last few weeks They have a lot of interesting things to say about the market. We all know there's a ton of confusion right now The rules and regulations keep changing with hemp with CBD No one really quite yet has a clear idea how the markets markets evolving So we're going to try and address some of those topics. That's our goal today to try and unravel some of those questions So I'm going to start off by asking each of the panelists to introduce themselves and just give a brief 30-second intro of your experience with a hemp and or cannabis and kind of why it's of interest We'll start off to my left with Bethany Gomez director of research at Brightfield group Hi My name is Bethany. I'm the managing director of Brightfield group We are a market research firm focused predominantly on the legal CBD and cannabis industry So we first started out back in 2015 looking at the cannabis space Analyzing the market from a competitive landscape from a supply chain standpoint from a Market sizing and forecasting standpoint to help our clients identify white space in the market We've started focusing on the CBD industry about 1824 months ago at this point when we had a lot of clients start coming to us and saying things like You know, I want to start a CBD line. Should I start a CBD line? and most of them had a very unclear view as to what all of the challenges what You know the the potential was in this market So it's been really interesting to you know to track this market both from a consumer standpoint from a company standpoint from a Regulation standpoint and really watch this market explode over the past 18 months And are really excited to continue watch it explode over over the next five years as well And to Bethany's left is Kevin Polarski chief commercial officer at Revolution Enterprises Right here in Chicago. Yep. Thanks everybody for coming today. I worked for a firm called Revolution Enterprises We are a cannabis medical cannabis MSO multi-state operator in existence for about five years My charge at Revolution is to develop a hemp program as well as looking at Burgers acquisitions and any other deals that come our way My background is really in the capital market space a private private adjoining revolution I was a consultant at Pricewaterhouse Coopers My clients were big banks in New York and then prior to that I was in the hedge fund space Thank you Kevin to Kevin's left is Jonathan Rubin the CEO of new leaf data services Thank You Peter. So my name is Jonathan Rubin CEO data services We are an independent unbiased price reporting agency and serve the markets the same way that other commodity price reporting agencies do that serve agricultural markets to energy markets We have two divisions cannabis benchmarks and hemp benchmarks. We've Launched our US cannabis spot index five excuse me four years ago. We've been in the space for five years and Our mission is to bring price transparency to serve both the physical market buyers and sellers in the field As well as the financial markets as they evolve as most commodity markets do To ultimately mature into futures and derivatives trading so serving both the physical market and Growing into the financial market. I have 30 years of commodity experience originally electricity natural gas coal through petrochemicals and ultimately In the 2012 time frame so the cannabis market starting to open up and thought hey, it's another commodity This is a great opportunity. It's a market. That's opaque the and deals are done in in the dark bilaterally and transparency in pricing makes more efficient markets and So now we've recently launched our hemp benchmarks and we're excited to talk about that hemp market today. Great. Thank you, Jonathan So to start off one of the topics we wanted to cover was The general confusion around all the rules and regulations around hemp and CBD We know back in December the farm bill got passed which Legalized the production of industrial hemp Which up up until that point had actually been on a on a level on par with heroin though in December that changed But we're still seeing trucks that are carrying hemp travel through states that aren't as friendly For example farmers that are from Oregon or Kentucky are going through other states like Oklahoma and Idaho and are getting pulled over arrested their product is being confiscated and This is a huge issue for the industry right now. So one of the first questions is just how is this confusion and Uncertainty affecting the growth of the industry and any ideas on when people think this will start to clear up Sure, so, you know, there's certainly a lot of a lot of confusion and a lot of challenges in the industry right now and a lot of that is stemming from You know the fact that hemp and CBD is you know really regulated at at the federal level, but it leaves a lot of Loopholes open from a CBD side of things and there are not regulations in place that will really Bring this into a great level of clarity So while cultivation was allowed for at the federal level in the farm bill What it basically dictated was that states were able to make their own rules surrounding Cultivation and they were able to authorize Authorize farmers all authorized firms to be able to cultivate within those states now from a that says nothing about Retail sales that says nothing about these products turning into an actual commercial market So what happens is that while it's legal to grow if you are Authorized to do so by your state. It is not necessarily Legal to sell it in whatever form is it may take place now The farm bill essentially took this from the purview of the DEA which was it was on a controlled substances Act and put it into the purview of the FDA now the FDA is trying to figure out what to do with it It hasn't been permitted by the FDA and there's a lot of you know The FDA is trying to come up with a rational way to approach it So, you know while from the CBD side of things there are Products that are being carried, you know throughout the country There are different states that have different approaches to it Some states have regulations in place that openly permit it other states have Regulation place that are actively prohibiting it other states have no regulations in place and are trying to Find ways to grapple with this from from a regulatory standpoint. So there's a lot of confusion that's happening in the industry right now I will say that this industry is certainly one that has grown up with the mentality of ask forgiveness instead of permission So for every you know one person that stopped, you know it with you know had You know someone who has their product seized off of a store shelves in, you know, Oklahoma There's thousands of others that aren't There's you know hundreds and hundreds of companies that are growing up within the space and Seeing multi millions of dollars worth of sales per year, you know in the minority are the ones that are saying That are seeing law enforcement are seeing Actions against them. Well, that's certainly a challenge The regulatory status right now is such that multinational corporations are looking at this their legal teams are looking at it very closely and identifying that There this is an area where at least from a retailer standpoint the risk level is low enough that they're willing to try it And that's a really significant shift from before December So I'll sum that up in two words three words FDA is illegal. Excuse me CBD is illegal The FDA put out a memo the same day that the farm bill was passed and it basically said If you put CBD in any product that's ingestible, it's illegal But the reality of it is that you've got four or five companies out there Jen Canis CB sciences X and all The other ones don't come to Charlotte's web that are that are multi billion dollar companies and they've been selling this stuff or The better part of the last two or three years the challenge I think on CBD is is At least two-fold one. What's the proper dosage for efficacy? Nobody really knows Some people claim that 10 milligrams will Help their pain I've taken 600 milligrams and it hasn't affected me at all So, you know, you tell me if you look at some of the studies that are out there They claim that at least a hundred or 200 milligrams are required But the problem is you don't have any data to support what it does and quite frankly There are a ton of snake oil salesmen out there in the CBD market The recent study by the USDA Looked at 24 different products 68 percent of which didn't have the amount of CBD on the label that that was claimed so, you know, there are there are companies out there that are making a lot of money in Defiance of the law Which is fine as Nothing he said, you know on March 31st. The FDA is gonna hold a hearing where they're gonna listen to the industry's concerns I think there's so much money in the space at this point that they will allow it But until there's more, you know proper Research around the efficacy I think that we all need to be a little bit careful about who we buy from and what we think it'll do on One more point. I would say that the real problem in my mind with the CBD market is it's not third-party tested So cannabis in the state of Illinois is required to be not only is it very stringent and strict from a rule standpoint But every product we put out the door has to have a third-party test So if you're gonna go out and use CBD, please make sure that the product that you're using is Third-party tested. Otherwise, you really don't know what you're getting And what's going on that front? Just to hit that quickly and you know, I think that there's there's a couple of points to be made there Well, it's absolutely not required for it to be third-party tested And there are all of the large companies that are operating in the space are Taking this upon themselves. And so most of those products, you know, that are those top 20 companies those top 50 companies That are operating in the space do third-party testing. They will have batch numbers on them They will have those those lab results on their site, you know, on their websites. They'll have the qvcs I think the industry is certainly going to be moving in that direction and the industry Does have that Is working towards a seal of approval the industry is working towards Developing those regulations in absence of the federal regulations And so while there's certainly a lot of snake oil salesmen out there We're certainly tracking more than 700 brands operating in the space most of those brands aren't moving any product You know, they're very small very small brands, you know That are just entrepreneurs trying to get into the space the larger companies that are operating in the space They are testing their products They do take most of them do take quality control very seriously and these change retailers that are really what's driving the market right now Her is going to be driving the market through this year and the years beyond Are certainly requiring that level of testing and quality control And so, you know in order for products to be approved as a supplement, they do need to You know be considered generally recognized as safe They do need to prove, you know, but there's two different points on that one is, you know What is in your product is what you say you have in it actually in it is that, you know Not going to be harmful the other side of it is proving the effectiveness of CBD and various, you know variations of CBD for, you know, a wide variety of conditions Now clinical trials take time But testing, you know and ensuring that products have what they say they have in them is something that's, you know Developing quite rapidly and you better believe that, you know, those products that are going to be, you know carried on the shelves of CVS or Walgreens and Places like that are going to require that those products are tested. I was just to finish up the just the question about the Farm Bill The only thing I wanted to add to what they're saying about the Farm Bill is that because I want to bring it back to supply chain and production and demand and You know in addition to everything that they talked about with the Farm Bill The main takeaway here is that there's a lot of work to be done between the states and the FDA and the USDA and the pace of that their efforts collectively and individually Shape how big this market becomes and what I wanted to do is come back to the point about the hemp market Why leave the the projections range? And so they make certain assumptions about the effectiveness and the speed with which the Farm Bill can be Implemented effectively across the country and how much in intra and interstate commerce will will take effect And so you we see projection so last year the CBD retail sales market Roughly 630 million dollars right so now when you look forward depending on how quickly Things get implemented the forecast for next year range from about flat another 650 million perhaps to three three times that maybe two billion dollars so the market Projections can are varying widely and so that's just a really important takeaway on the Farm Bill because it's going to help You'll understand the shape what the opportunities are So Based on that topic of the supply and demand and the pricing I know Kevin that you've been involved in futures markets and other in other commodities And we're curious to see what you how dramatically do you think the demand right now for CBD is really driving the hemp market? And is that gonna you think that's gonna change a lot? Yeah, so roughly 85% of the hemp that's grown right now is going for CBD Let's not get over our skis on how big the market is okay. We grew 80,000 acres of hemp last year in Illinois we did 11 million acres of corn So we're nowhere close to having a viable futures market You have to have people that want a hedge and people that want to be commercials and buy the product in order to have that possible If you get to the point of consolidation where you have required third-party testing remember It's not required right now. I have a mother position that it should be then you'll have companies grow up and become true buyers of Hemp or flower for CBD You don't have that that market yet. It's just nowhere near big enough, right? So, you know, maybe we'll do 250,000 acres this year. I think That's probably pretty conservative, but compared to 11 million acres in one state of corn, you know, it's just You were at least five years away from it. That's the first issue. The second issue is data Every state has an idiosyncratic market in flower CBD flower Meaning that you know, whatever the market is in Maine versus the market in Oregon versus the market in Kentucky They're all different and they're and they're different because of the cost of shipping because of the interstate commerce risks, right? And the last of all, let's be let's be honest CBD flower is pot Okay, it is it's just been bred down to under point three percent THC Real hemp has one or two percent CBD in it and it's grown for seed and fiber so over the course of Genetics we've taken the marijuana plant and we've actually turned it into the CBD plant the challenge with that is that as it grows It can change its stable genetics from being under point three percent to being over point three percent So now if you're a CBD farmer and you and you put your your crop on a truck to go to Colorado and you tested it was point two five on the whatever you tested some of that flower might test it at point three One in which case it's marijuana and you've just put yourself in a legal mind I want to follow up on your comment about the site 280 Excuse me 80,000 Yeah, so roughly to last so last year there were roughly in the US roughly 250,000 excuse me 80,000 acres of licensed hemp And that's a really important metric because it's an estimate but that's a really important metric because again when we talk about how the market grows The farm bill implementation, but also how much that additional Licensed acreage hat is built out in 2019 and the year But a couple of really important footnotes to the acreage metric is first of all and and this is anecdotal based on our Interactions with our global hemp network and our US Network Many of the farmers are only planting a fraction of the eight licensed acreage So we we've talked to plenty of supply growers who have 20,000 acres and and they're planning on planting 200 acres and So there's a lot so you have to really Kind of dial in and understand how much Capacity is actually being used of that license capacity Akerage and then additionally and this is anecdotally. I don't know if it applies to the entire market But I've had conversations with many growers who've had crop failures of 50% so if you're actually Only doing a fraction of the total licensed acreage and then you're having crop failures What you're bringing to the market, you know, that's gonna help support prices Ultimately, I think every commodity everyone would agree modities ultimately move toward the marginal cost of production But so there's you know, it's very it's it's really difficult to get a gauge on the market in terms of that production because of those I know I'll just finish up this Rad of comments here that The Well You know to hit that point, that's a real challenge for brands that are operating in the space right now those It's a real challenge for brands that are operating in the space right now because they're all running and meeting with every chain retailer in the country and trying to ink these deals but In order to you know to be able to to build those relationships with chain retailers They need to actually be able to fill orders of that the magnitude that That a Walgreens or a right-aid or a giant eagle is going to require And if you don't own your supply chain and you don't know where all of you know Your supply is coming from and your pricing is so variable and all of the inputs, you know On this wholesale market are so variable That it really creates a lot of challenges for these companies who are trying to scale right now And so I think you know it just hitting this point that that you know Rationalizing that supply chain and getting you know a more clarity into the wholesale market is Absolutely crucial, you know for these companies, you know to be able to scale effectively I just on the vertical integration Taking analogs from other markets that have been Commodity markets that have deregulated and opened up vertical integration Can can and often is a good early term to mid-term strategy? but longer term a Unvirg an unbundled supply chain provides better opportunities for hedging risk management what you find and I can take the analog of electricity For the power generators there were distributor Transmission and then there was distribution when they they were hammering on about deregulating But when they were finally forced to break into those three silos, they realized wait We're not best practices across all of these business. So I agree that initially Owning that owning or at least having option Optionality around your supply chain in the short-term mid-term is really important to make sure that you don't have any issues In getting your product to the end use Consumer but longer term.   So I think the the more The more scalable and the more sophisticated that market becomes You know the the quicker this industry can continue to pick up so so back to looking at the the supply and demand of Comparative markets, you think it's fair to look at how the campus market evolved I mean we now have five to ten years experience Data on both medical and recreational to see I'd be curious to see what you guys think about how similar is it or Do you expect it to roll out differently? It's not similar at all And it's not similar at all because each state has their own regime regarding cannabis There's a complete dichotomy between limited license states and unlimited license states So what do I mean by that here in Illinois? We have 22 cultivation licenses one for every state police district. We enjoy our revenue at about 3,000 to 35 hundred dollars a pound in Oregon where they have unlimited licenses their current wholesale prices are 250 to 300 dollars a pound So you can see just in and of itself the dichotomy is huge most of the multi-state operators have chosen to become vertically integrated because we can control our own supply and Make sure that not only are we distributing to as many distributors as we can But with the impending Illinois legalization bill there's going to be a huge shortage of medicine and so those Dispensaries that are aligned with the cultivator can help ensure that they're going to have product When the demand goes up by 10 because the statistics the statistics show that once you go from a Medicinal market to a recreational market or adult use market the demand is a 10x plus So watch the news over the next few months. You'll see You know, there's going to be questions around that like we've seen many shortages and new markets that have come online You know the hemp market is in my opinion the hemp market long-term is about disruption and is about fiber Right. So if you think about it most farmers Sit down a combine and that's how they make their living. They're not out there calling males, you know and worried about You know whether or not they're trimming their plants, right? I mean even those farms that can they can farm CBD and an industrial level and I've visited those farms you know doing 1500 acres on an industrial level is a huge undertaking and To the extent that you don't have a dry climate you can't do that because you have to be able to dry that hemp And so there's a lot of reasons by hemp CBD is priced where it is today You know the fluctuations on a percentage basis of CBD per flower can be anywhere from a buck and a half to five dollars But every state's different and so, you know, the other thing that I think we need to look at is CBD isolate which is the actual third derivative of CBD flower and is ninety nine point nine percent pure Eighteen months ago was trading at fifteen thousand dollars a kilo. I just bought a kilo yesterday without having to send money to Switzerland For five thousand dollars So, you know, is it gonna be two thousand dollars a year from now? And if so, you know, what does that mean for the market? You know, I wanted to add to the Your question about the differences by the cannabis and hemp. So I agree with everything that Kevin just said in addition to that Just the direction that the producers came from is also very different, right? So the cannabis side While there was have always been new entrants the industry started as a kind of a you know grassroots no pun intended grassroots small I'm not a fan of the word artisanal but craft and the people were growing and so they were really they were not Commercial farmers. They were they were there was an industry. It was a cottage industry that they blossomed to what we see now Whereas on the hemp side While there's all types of new entrants many of them in the hemp industry came from large commercial agricultural Backgrounds so they're starting from a position of understanding that there is enormous need for technology and innovation across the the the harvesting equipment as we pointed out the processing equipment the drying equipment people Farmers with fifteen thousand acres find out that after a hundred and fifty acres They get no longer dry hang and they need mechanical dryers. Where are we going to get those and so? You know all sort of kind of if we were to sum up this panel in one word. I would use word I believe Kevin said or disruption hemp has the opportunity to disrupt and reshape the entire agricultural landscape and People for a flung who don't think cannabis is going to impact them who may be conservative investors and say okay Well, I'm just going to collect my interest on my caterpillar or John Deere debt or I'm going to get my dividends They're not thinking about or if they're not they should be thinking about well, you know How is how is the supply for these new the harvesting equipment going to develop who's going to own that market share? So it's going to disrupt every element Farmers have to make the the millennial old crop rotation crop switching decision soybeans are down seven percent since the fall There's there's all kinds of opportunities to get into the space and it's going to completely change in the agricultural landscape I think you talked about cotton at the beginning or maybe Deborah did it's going to compete with cotton for textiles with corn for biofuels and ethanol with with with other seeds and grains for food food and Protein powders etc. So Anyone who's kind of peripherally thinking oh that doesn't affect me It's going to affect every agricultural product in a ripple effect. How many people here know how? CBD hemp is grown versus CBD fiber or hemp fiber is gone So so when you grow Hemp for fiber it grows 12 to 15 feet tall and is sewn very tightly Think about it like being a mesh Okay, when you grow Hemp for CBD it's grown on five foot centers So think about that. It's grown like a Christmas tree farm or like strawberries So the most successful CBD farmers have been vegetable farmers You know the most common way of harvesting CBD hemp chainsaw Because the stalks can be anywhere from a half inch in diameter to six inches in diameter so it's incredibly labor-intensive and The third thing that I want to mention is there's a misconception by farmers out there that they're going to get $50 a pound a hundred dollars a pound if you're really good at growing hemp flower You might get three or four hundred dollars a pound It's the equivalent of the same bud that we sell in the cannabis base But 95% of the farmers can't do that and as a result their flower goes for biomass It's extracted into oil and those prices tend to run anywhere from 10 to 50 dollars a pound And what's interesting about the hemp market is right now? There's a shortage of biomass why because we harvested six months ago and farmers want to get paid at the fall So at the fall the prices, you know Fall precipitously and then they rise again in the middle of the year because we don't have any supply If there was a futures market where you've got a term structure of futures And you're in contango or backwardation Where you actually are paying for the storage and insurance to store that for a period of time Then you'd have a much more level market, but we don't have the demand yet for that I hope it comes because I think that there'll be a futures market or a capital market whether it's forward cash However, or the flower the seed and the fiber, but again, it's just way too nascent When oh, I was gonna just add to that. Yeah, just yeah, the futures futures We talked about physical markets and financial markets Serving the financial markets with with with indices and cash settled contracts is going to take a lot of time It's an enormous the complex process to have a listing on a major exchange That and then that it listing has to gain momentum Deficient for traders be saying hey, I want a contract and they have to establish the contract And that's to be enough liquidity on a single exchange to attract the traders and even when all of those stars are aligned Many contracts fail. So this is a long-term event but in my mind, it's almost and you know 100% likely to happen because Virtually every agricultural commodity market has and where I'm sitting I would say that the main difference between the cannabis market and the hemp market is You know comes down to the scalability The cannabis market is really not very scalable right now Because you have these artificial, you know lines for each state. You can't sell it across state lines So it's you know basic economics 101, you know If you're in Oregon and there are no license caps and they're cultivating three times as much cannabis as they can sell Then prices are going to drop and you can't sell it in California even though, you know, there's they also have recreational cannabis You can't sell it, you know into another place if you want to you know produce a product in Oregon in the cannabis market You have to cultivate process manufacturer, you know test and retail all within the state of Oregon Then if you want to you know recreate if you want to sell your products in California You have to sell them with a completely, you know integrated supply chain in California based off of products that have been Cultivated processed manufactured Quality tested and sold through dispensaries in the state of California So you have these artificial, you know state lines that are You know messing with the supply and demand If you're looking at the hemp market there you can cultivate in one area and while there's you know Some challenges to be worked out with interstate commerce people can cultivate in one area Process in another place and sell it, you know in all 50 states Well, you know, there's all of the challenges from the FDA level But you know essentially what we're working towards in you know in hemp is a national supply chain What you're seeing globally is also a loosening and regulations. So CBD markets are Developing globally and we see, you know much of the hemp. That's you know Many of the CBD products that are being sold in the US are from Chinese grown hemp So that's something that we don't have in the cannabis market And you can't have an international supply chain in the cannabis market and given how tightly controlled things are You know in cannabis that's you know much much more challenging But wet from a regulatory standpoint people are essentially saying okay, here's the here's the line 0.3% and above that's marijuana. That's tightly controlled below 0.3% THC That's an agricultural commodity and while it'll take a little bit of time for it to get there It can be a global commodity And so there's you know the the hemp market is just much more scalable from that standpoint You know while there's a lot more challenges and a lot more astrocies on you know that versus, you know Some other agricultural commodities. It's you know much more scalable than then the cannabis market is So another another big part of establishing commercial markets And also futures markets is establishing consistent pricing across the industry that people can all agree on But you know the point was made by Kevin earlier that the states are very idiosyncratic I think is where you use that they're all different the all different pricing you know, is there a great source where we can get this pricing and How complicated is that based on every state is probably different? I'm gonna let Jonathan go second because he's gonna plug his company, which is which is great What he's what he's doing is a great service by the way But what I think the challenge is you know, if you want to come up with a national standard First have to agree on what that standard would be. So let's take the corn market by example We trade number two US corn at the Chicago Board of Trade. I was a member there for many years Ranted trading group in the in the grain markets. They also trade number two US corn in Tokyo Right, so you can actually trade the same product that we grow here there There's different rules, but but we've all agreed on a standard called number two US corn Similarly in the bean market in the wheat market in most markets We came up revolution came up with a standard called 1010 and 1010 means that you've got flour that is 10% CBD concentrated and 10% moisture Now the nice thing about having a standard is then you can price against that standard at a discount or a premium That's one approach another approach might be that you price on a per percentage point of CBD within that flower. So let's say we'll take the same example Let's say that you have 10% flower and you know, the market is 250 per percentage point $2 and 50 cents You'll get $25 a pound for that flower But the challenge still lies in that there's there's costs to transport from one place to another You don't have an elevator system like you do in the United States, right? Well, you can take it to your local elevator and you know that that grain doesn't end up going 700 miles It goes 200 miles And so, you know, I think we'll get to a point where we have Pricing and I think what Jonathan is doing is really God's work because he's trying to understand the prices in each market But getting to a national market, I think is is going to take some time Evan thanks for the plug. I don't have to say anything else in all seriousness We sweat the details with what we do at cannabis benchmarks and then benchmarks and Let me just say briefly we collect our price is licensed wholesale transactions through a price contributor network through relationships with Buyer and seller and grower and industry associations as well as in partner data partnerships with other vendors exchanges marketplaces The standard the standards that Kevin talked about and he talked about to the 1010 the CBD moisture content and I love the the yellow number corn number two 13% moisture, which is perfect for popping popping popcorn But in terms of the two standards that you mentioned those are those In terms of how we approach pricing we look to the common denominator in other words So we're aggregating up to a level that the whole industry at least Mostly agrees on in terms of how we report as the industry is mature in a prerequisite for for any contract Futures contract Which is different from a forward contract is that everybody agrees to the same specifications terms a prerequisite is a agreed upon quality standard and Four years ago when we embarked on our first us spot index We started looking at standards and seeing how we could help the industry create a standard and we very quickly realized That week it's we cannot put this you know We cannot put the standard on the on the industry the industry needs to come together collectively whether it's cannabis or hemp and Have agree in in a form where there's pure industry review and peer acceptance about a certain standard So we're advocates for that we're catalysts for that, but we will not dictate a standard What will we will ask is as the markets are maturing? How are you buying and selling what kind of future? Agreements are you doing and how are you structuring and what are you pricing and that's what we'll gravitate to is What is the market telling us that they need the pricing for and then it becomes just as Kevin said? Let's say the standard is either a percentage point CBD potency or the 10% CBD 10% moisture exactly as he said a buyer or seller say We agree this is an inferior product You know we're gonna pull 5% off or we're gonna add 10% because it's Maybe it's higher quality Just a better customer relationship whatever whatever the driver might be to move above or below that reference point But you you trade off the reference point