Episode 29 Safe Harbor Financial Bridges the Gap Between Cannabis Companies and U.S. Banks

[00:00:00] Kevin: Today's topic for "The Curious Pundit" podcast is the interesting situation of financing cannabis businesses in the United States. And the weirdness of it, if that's the right word, is cannabis is illegal at the federal level, therefore cannabis businesses can't open bank accounts. But cannabis is completely legal in the majority of the states for either recreational and/or medicinal uses, and they need to be able to accept payments and make payments to vendors. So that's the topic of today's podcast. How does all that work?

[00:00:37] Emanuel: Hi everyone, and welcome to yet another episode of the Curious Pundits podcast. I'm one of the co-hosts, Emanuel.

[00:00:44] Kevin: I'm the other co-host, Kevin.

[00:00:46] Emanuel: Curiouspundits.com is the website where you can go find information about today's episode, the recording, future episodes, past episodes, links to all the platforms that you like to listen to podcasts. We're on Apple, Spotify, Stitcher, you name it. That being said, back to Kevin to introduce another very special guest today.

[00:01:07] Kevin: So today's guest is Terry Mendez, who is the CEO of Safe Harbor Financial, which is a business that exists explicitly for the purpose of providing banking services to cannabis businesses that can't open bank accounts. So Safe Harbor Financial, as I understand it, acts as a payment intermediary between the cannabis businesses and the banking system. So Terry, at this point, introduce yourself.

[00:01:35] Terrance (Terry) Mendez: Sure. So Kevin, Emanuel, thanks for having me. My name is Terry Mendez. Like you said, I'm the CEO of Safe Harbor. And just to be more refined in that thought, we work with financial institutions that want to profitably and compliantly bank cannabis, and in the background do all of the work necessary to do things like anti-money laundering compliance, Bank Secrecy Act compliance, know your customer compliance, which is several layers more complicated for a cannabis company because if you imagine you're a financial institution and your regulator is going to walk in and audit you, they're gonna look at your high-risk accounts.

[00:02:15] And so we manage that high-risk account process, the regulatory process, and ensure that cannabis is banked legally protecting the US banking system.

[00:02:26] Kevin: I'd like to open with the question of just an overview of the business model. So if a cannabis business cannot directly open up a bank account, and if Safe Harbor can and then provides banking services to cannabis business industries, like how does it work?

[00:02:46] Terrance (Terry) Mendez: Yeah, so the world's changed in the last 11, 12 years that we've been doing this. When we first started out in 2015, one of the very first accepting cannabis deposits, we were a division of a credit union. We spun off in 2022, and now we help other credit unions and financial institutions be more successful.

[00:03:07] Right now, there is an ability for most cannabis operators to obtain a bank account under what's called the 2014 FinCEN letter, as long as the framework underlying the financial institution is compliant. And that includes things that are kind of crazy. For example, I need to make sure, as the fintech, that you're not selling adult magazines next to cannabis or children's toys next to cannabis, and that's the bank's requirements, right?

[00:03:38] We need to make sure that the SKUs that are being sold in a dispensary actually come through a regulated metric or bio track pipeline so that we know that there's no black market moving through the dispensary. And their risk to the banks are quite high if the operators are doing things that are somewhat shady.

[00:03:58] And so there's layers and layers of protection. When you go open a bank account with, say, like Chase or Citibank, it might cost you $12 a month. And if you have $2,000 in the account, they might waive the fee altogether, just the account fee. That's because they have hundreds of thousands upon millions of accounts and they've automated everything.

[00:04:19] Very difficult to automate everything in the cannabis industry when you have to go down to what are you selling in your dispensary at the SKU level. Most banks don't have the capability and capacity to do that. Also very difficult in the banking world, if you think about it their customer acquisition strategy is largely commercials.

[00:04:40] Well, you can advertise... largely commercials, right? Largely banner signs in places and you don't walk into a credit union and it says, "We accept cannabis deposits." There's no tile on the wall that says, "We accept cannabis deposits." So you're kind of throwing darts and going to conferences and figuring out who do you want to work with.

[00:04:59] One of the things we do for financial institutions is we give that layer of credibility. What I mean by that is more than half of my team has worked inside of the cannabis industry and then converted to working inside a financial technology company. So we know the industry really well. I was a former CEO of a multi-state operator called Nature's Medicine.

[00:05:23] I was the CEO of a single state operator. Very few financial institutions have people walking the hallways that actually know what a Mobius machine is, a Green Bros machine, a Moktek machine, has ever grown in cocoa or a living soil and understands pH and understands what a Conviron room is.

[00:05:41] Very few people know those things. So when we work with our financial institutions, we bring a level of credibility that allows them to know and be grassroots. Hard to open up an establishment and say, "I want to attract a cannabis depositor, but I know nothing about your business."

[00:05:57] Kevin: Let's assume for sake of argument that one of your customers is in fact selling children's toys next to cannabis and they get busted for it. What happens?

[00:06:10] Terrance (Terry) Mendez: Well, first thing that hopefully happens is the controls in the financial institution, if they're using Safe Harbor, our controls, identify it before they ever get busted, and we would close their account. Or at least tell them, "Hey, if you continue to do this, we have to close your account." Right? The second thing is you put your license at risk.

[00:06:33] And so every state has their regulations. Most states, that's something that's part of their regulations. What you're doing is putting your license at risk, and you've spent hundreds of thousands of dollars building your business, and by selling a particular SKU, you put that at risk.

[00:06:49] Obviously, you don't want to do those things. And that's why dispensaries, operators of any type, cultivations, extraction facilities, generally have regulatory teams that come in and do assessments to make sure that your budtender or your cultivator or whoever doesn't do something that puts your license at risk.

[00:07:09] Kevin: So the license in this case is of the cannabis dispensary, or is it of Safe Harbor, or potentially both?

[00:07:15] Terrance (Terry) Mendez: It's of the cannabis dispensary. So the license is of the cannabis dispensary. So the operator is putting their business at risk. The financial institution, if they fail to find it, could be fined and they could lose their bank charter. And if they lose their bank charter, they lose their entire business as well.

[00:07:33] So there's risk on both sides of the equation.

[00:07:36] Kevin: So how do you find these violations?

[00:07:40] Terrance (Terry) Mendez: Yeah, so we have direct access to Metric and BioTrack, and we do regular audits of the SKUs that are being sold through dispensary chains. We have on-site visits. We just acquired a company called 420IT. Now we're calling it Safe Harbor Managed Services. We will actually go and visit these locations and either virtually or physically tour and we go through a checklist of all the things that are required to make sure that we see the right framework of controls.

[00:08:11] At the same time, we're talking to the business about the business. And so we're also trying to help our cannabis operators be more successful. I've spent over 20 years in this area of turning around companies and helping them be more successful. I'm here to help my clients be more successful, and as we walk those hallways, we want to hear their stories and give them ideas that maybe, would go normally beyond banking.

[00:08:35] Kevin: Anyway, Emanuel, you looked like you had a question and I interrupted you, so I'm gonna...

[00:08:39] Emanuel: A couple of them. First of all, I'm based in Canada. How different do you know the legislation is here? I know little to nothing about this industry overall. And what I'm really interested in is how did a credit union, which is more, let's call it a more conservative or traditional financial institutions, actually was able to pivot?

[00:09:02] What was the mindset and what was the process? And who initiated it? How did it went from, something...

[00:09:08] Terrance (Terry) Mendez: Yeah.

[00:09:09] Emanuel: People perceive more traditional, but in a sense, as far as I know, they are more flexible than other financial institutions. They just don't choose not to do it, which is safe at the end of the day. So yeah, those were my two...

[00:09:23] Terrance (Terry) Mendez: How did it happen, so

[00:09:25] Emanuel: and how it happened.

[00:09:27] Terrance (Terry) Mendez: I can't really talk Canada to US. What I will talk about is how it happened. Sundie Siegfried, who was our former CEO, was the trailblazer here. She went in front of the Department of Justice, went in front of the Senate hearings, congressional hearings, and was one of a very few people really trying to elevate cannabis banking from you know, people's cars and under the pillows and in vaults in people's homes into something that could be protected and done safely in the US banking system.

[00:10:02] When that 2014 FinCEN letter passed, that was a big deal, and she was a big part of that. And at the time, she was the CEO of Partner Colorado Credit Union and had the vision that says, "I care about our community. Now, I may or may not care about cannabis.

[00:10:21] I may not like personally cannabis or not. It doesn't matter. We're seeing people having violent crimes committed against them in our community because they're moving massive amounts of money from point A to point B, and she saw that as wrong, and she wrote a whole book on this, on how to set up compliant cannabis banking systems.

[00:10:42] And so there was a deep care, and you got to remember credit unions are born out of that deep care for the community. They're not-for-profits. And they're owned by their members, which are the people that have depository accounts with them. And so it was an interesting shift to say, "If I care about my community, I must do this."

[00:11:03] And today there's probably a hundred, 150 US credit unions and regional financial institutions that have said, "Yes, I will bank cannabis." And so Safe Harbor was the beginning, and Safe Harbor still today is working with those companies trying to help them be more and more successful. That is the epicenter of it.

[00:11:23] The other part of it is a lot of trust. One of the things that Sundey built over her career was trust with regulators. You know, trust with those people that make these decisions. And so when you have a trusted source saying, "This is the right thing to do," you see things move relatively quickly.

[00:11:42] And so we started taking cannabis deposits and opening depository accounts all the way back in early twenty fifteen. We've been lending to the cannabis industry for years, and we've lent over a hundred and twenty million dollars to the cannabis industry. Very few people lend to the cannabis industry.

[00:12:00] And even the ones that bank cannabis, some of them have very strict requirements around lending to the cannabis industry. So we opened the doors to a lot of that. Today, still today, you can't get an SBA loan from the federal government or backed by the federal government in the cannabis industry.

[00:12:17] Safe Harbor is in a position where we're working with private equity companies that are willing to do startup loans for the cannabis industry, which is a a unique thing.

[00:12:27] Kevin: I have a like a really subtle clarification question. So I

[00:12:31] Terrance (Terry) Mendez: Mhm

[00:12:32] Kevin: presupposing that the accounts that you hold on behalf of your customers are at banks, and you spoke about credit unions, and there is a fundamental difference between them in law. So are your accounts on the back end at credit unions, at banks, or both?

[00:12:51] Terrance (Terry) Mendez: Yeah. So we sit in between the credit union or regional financial institution, which would be a bank and the cannabis operator. And we provide a compliance service, right? So the problem

[00:13:02] Kevin: So you actually do have direct accounts at banks rather than at credit unions. You have both.

[00:13:07] Terrance (Terry) Mendez: We have both, and most of the organizations that bank cannabis today are credit unions. The percentage is very small on the regional bank side.

[00:13:17] Kevin: The reason this is super interesting to me is because in law, banks have master accounts at the Federal Reserve. Credit unions do not, right? So this is yet another layer of abstraction. So your customers bank with you, you bank with a credit union, the credit union banks with a bank, right?

[00:13:40] Terrance (Terry) Mendez: Slightly different. So we don't hold customer deposits, and we don't directly make loans. We will work with the credit union to open up the account on behalf of the depositor. We will work with the financial institution. So we don't have a bank charter, and we wouldn't necessarily hold anybody's deposits or directly make loans because we don't have that bank charter.

[00:13:59] And so we work with them to make sure that they're doing it profitably and compliantly, and we provide that entire infrastructure. So we provide the BSA officers. We provide the relationship managers. We provide the onboarding service. We provide the software that allows people to understand the rules are different in Colorado Springs versus Denver versus Fort Collins versus New York City versus Long Island versus upstate New York.

[00:14:26] Every single province and jurisdiction within the United States, even though it might be legal in a state, holds different rules. In Colorado Springs, for example, is medical only. Recreational is legal in Colorado, but not in Colorado Springs.

[00:14:40] And so those are the types of things that we make sure that our operators are acting in accordance with their license and protecting that financial institution.

[00:14:49] Kevin: Wow, okay. The reason I am kind of focused on this distinction about banks and credit union is

[00:14:57] Terrance (Terry) Mendez: Uh-huh

[00:14:57] Kevin: like, "We don't have a banking license." Credit unions don't have banking license.

[00:15:01] Terrance (Terry) Mendez: That's right.

[00:15:02] Kevin: They're not banks. They're credit unions. They're different, right?

[00:15:04] Terrance (Terry) Mendez: They're chartered and they bank with somebody else and...

[00:15:07] Kevin: Yeah.

[00:15:07] Terrance (Terry) Mendez: Having a master Fed account versus a ancillary Fed account is something that they work through.

[00:15:13] Kevin: Well, ancillary Fed accounts don't exist yet, but there's discussions relative to

[00:15:18] Terrance (Terry) Mendez: Yeah

[00:15:18] Kevin: about creating a new kind of Fed account, which has pros and cons, right?

[00:15:23] Terrance (Terry) Mendez: Fair enough.

[00:15:24] Kevin: Super curious about the fact that there are municipal rule differences that you have to take into account. That never occurred to me, and this may be based on a faulty understanding of the, I'll call it the politics of Colorado, but I've always envisioned Colorado Springs as more of a liberal bastion than Denver, and the idea that Colorado accepts recreational cannabis but Colorado Springs does not seems, like, backwards relative to my understanding of, like, how people in Colorado perceive the political spectrum, shall we say.

[00:16:01] Terrance (Terry) Mendez: Well, fair enough, but that's not unusual. We bank in 41 states and US territories that have legal recreational and medical programs, meaning we support the banking in those areas. And most actually have allowed jurisdictions or towns or counties within the state to have significant influence over what's allowed in that jurisdiction, town, or county.

[00:16:27] Kevin: I really like the fact that they're doing that. I just didn't know. But boy does that create a compliance headache for you guys

[00:16:35] Terrance (Terry) Mendez: Well, that's why we exist. If the complexities didn't exist, software companies and companies like Safe Harbor, fintech companies don't have a problem to solve. We solve this problem on behalf of the financial institutions that want to bank cannabis.

[00:16:49] Kevin: This is gonna be a brief segue, and maybe if it doesn't make sense, we'll edit this part out. Maybe we'll keep it, I don't know, right? But I would recommend that you, Terry start paying attention to the potential stablecoin legislation that's being discussed in Congress right now. Because if it passes, people all over the world will be able to conduct transactions in US dollars without having a bank account. And it has the potential to eliminate your entire industry if it comes to fruition in that way. And the keyword is potential. You know, the devil is in the details, as always.

[00:17:26] Terrance (Terry) Mendez: Yeah, these are areas of emerging and evolving risk, and every business has risks that we disclose and we talk about. There's potential here. Legislative process moves relatively slow, although I think our administration is very high on stable coins.

[00:17:42] This has been a topic in The American Banker and in many other you know, periodicals and others that say, you know, "Will stablecoins and cryptocurrencies and USD, one day replace the US banking system entirely?" And it is a risk, right? If you can have instant blockchain ledgering, high levels of security, you can accept it.

[00:18:03] I think Amazon and even KPMG said they would accept certain types of stablecoins. You can pay your bills with it and it's no different than a greenback. Then it becomes easy, and the issue is it becomes ease of use. If it's complicated at all, people don't want it.

[00:18:19] Talk to my parents, they still like to pay for things in cash 'cause this credit card thing causes problems down the road and a bill they have to pay.

[00:18:26] Kevin: Yeah. Yeah, I totally get it. We're all about convenience. Anyway, Emanuel.

[00:18:31] Emanuel: We need to remember is that the issuer of a cryptocurrency, a stablecoin or whatnot, has more, if not complete control of what you can and cannot do with that stablecoin. So it's easier to monitor.

[00:18:49] Terrance (Terry) Mendez: It is actually very scary, right?

[00:18:52] Emanuel: That's one thing that...

[00:18:53] Terrance (Terry) Mendez: If whoever controls it, whether it's a government or whether it's an organization or a business or a non-for-profit or a trade organization, whoever controls it controls you, right? If they don't want you to buy a Chevy, you don't buy a Chevy because you can't use it at Chevy, right?

[00:19:08] If they don't want you to travel, they'll shut down your money and they have a complete control of ability to turn your money on and turn your money off and your ability to navigate life. That's a very scary thing. We all read these books back in high school about what the future of technology might look like.

[00:19:25] And I did a a presentation in Krakow, Poland and I used the Jetsons and I said, "Look at all the things in the Jetsons from the '70s," black and white cartoon that went color in the early '80s. All of these things that didn't exist was someone's imagination. 85, 90% of it, even the Roomba vacuum cleaner, exists today.

[00:19:46] Incredible that somebody who was a cartoon creator predicts what exists 30 years later, 40 years later. And with the funny part about that story though, is I was using all these examples and I was showing little clips from the, from the cartoon, and someone raises their hand in the audience and says, "What the hell is the Jetsons? We've never seen that before." And everyone looked at me like, "Oh my God, you're like..." And so I literally went on YouTube and had them watch one episode of the Jetsons, and I said, "I guess they didn't distribute this in Poland. Sorry."

[00:20:22] Emanuel: In fact, I heard they're gonna put up a movie starring Jim Carrey, or at least it's in the talks. Jetson starring Jim Carrey.

[00:20:29] Terrance (Terry) Mendez: There you go.

[00:20:31] Emanuel: Yeah, definitely it can go sideways and we have examples, some other examples across the world they have more complete control, but we're deviating from the topic of today's conversation.

[00:20:45] Terrance (Terry) Mendez: Well, that's the fear aspect of it. And now decision-making on fear is never a good thing, but it's a real fear. Just the same way there's a real fear around AI and the emergence of AI and the impact to the US economy and ability of everyday people to maintain jobs that are being automated.

[00:21:01] That's been a real fear since the Industrial Revolution. And this gets more refined and more refined and more refined. But fear is also another way to control people. And so that's just a thought.

[00:21:13] Kevin: And your concerns about implementations of future stable coins as payments and being private money and the issue of having total control, those are absolutely legitimate fears.

[00:21:25] Terrance (Terry) Mendez: Mm-hmm.

[00:21:25] Kevin: I try and stay on top of this 'cause I'm fascinated by banking and payment systems and all that stuff, and way it's currently being discussed, and for what it's worth, I get a lot of information from a guy named David Beckworth.

[00:21:39] I listen to his podcast, I read his articles and stuff, right? The way it's currently being discussed is it'll be kind of like returning to the days when private banks issued their own money and it was kind of chaotic.

[00:21:56] If the legislation comes into existence the way people are talking about it, there could very well be 8,000 different stable coin issuers, and then you, as someone who wants to use stable coins, you'll have to, like, shop around and figure out which

[00:22:11] Terrance (Terry) Mendez: Yeah

[00:22:12] Kevin: one best suits you. Like, it's gonna be chaos if they do it the way it is, but that chaos could be advantageous in certain ways.

[00:22:20] Terrance (Terry) Mendez: Every technology takes 20 to 30 years to figure out how to do it the right way, and there'll be shifts and there'll be legislative process. But you just imagine in today's society where at a touch of a button I get everything delivered to my home and the convenience factor is there and instant gratification that that chaos will slow adoption to a crawl.

[00:22:41] And so they'll have to figure that out because if you're trying to give somebody, even myself, 8,000 options, that's like going to one of a New York City deli and saying, "What do you want to eat?"

[00:22:50] You know a diner. It's like, well, I got 18 pages to read before I know what I want to eat, you know?

[00:22:56] Kevin: Can I share what to me is the most glaring and, in our opinion, ridiculous example of delayed adoption of a technology?

[00:23:05] Terrance (Terry) Mendez: Sure.

[00:23:06] Kevin: Before forks existed, everybody ate with their fingers.

[00:23:10] Terrance (Terry) Mendez: Mm-hmm.

[00:23:10] Kevin: After the invention of the fork, it took 30 years before it was generally in use by everybody. The fork had a delayed adoption like you just spoke about.

[00:23:23] Terrance (Terry) Mendez: Yeah, fair enough. I didn't know that, but that's fantastic.

[00:23:26] Emanuel: We also need to remember that actually it's first of all, to issue a stable coin is very expensive. It's not the same as mining Bitcoin, but still you'll need a lot of processing power, lots of investment. So I doubt that there's be that many.

[00:23:44] There's a few stable coins, but only two USDT and USDC that are prominent and they're privately issued stable coins. I know a little bit about this and also it's like illegal. So it's the same thing as, even if the merchant accepts it, it's still illegal to write paper money.

[00:24:02] I write two Emanuel dollars and give it go and buy bread. That's unacceptable and it's illegal. It's the same thing with the stable coins as well. And to the point we're deviating from the today's topic, but that's the, that's what we...

[00:24:17] Kevin: That's what we do.

[00:24:17] Terrance (Terry) Mendez: All good.

[00:24:19] Emanuel: Actually this adoption backfires because I was reading, and I can attest to this as well, that nobody's really happy with for example, the food delivery service at this moment in two thousand and twenty-six, for example.

[00:24:31] The customer is not happy because I'm ordering a three dollar sandwich, and I ended up paying forty bucks for it. The delivery guy is not happy because he's getting paid like fifty cents or something like that. The merchant, the fast food joint is not happy because they're getting paid I don't know, fifty percent of what they would get paid if they were selling it in person and whatnot.

[00:24:55] So it can lead to this as well. So the next natural thing is going back to what it was. I personally don't order. I'm lucky enough to live around an area where I have a few options and if I was ordering more now, I tend to actually go out, take this opportunity to actually, get a get my steps in and get some fresh air and whatnot. I'm...

[00:25:17] Terrance (Terry) Mendez: You see this everywhere.

[00:25:17] Emanuel: a little bit skeptical. Skeptical with the...

[00:25:19] Terrance (Terry) Mendez: I think you see this absolutely everywhere, right?

[00:25:22] I with the food delivery, I just had that issue yesterday. We had a large group of children in our home, and they were playing a game, and we ordered Pizza Hut. And the driver calls us saying, "Hey they can't fulfill your order. It's gonna take two hours. I'm sitting here. I don't know what to do." And he wound up delivering one pizza instead of seven two hours later, and then you have to deal with how do I get a refund for this? And we actually ordered Domino's, and it came back faster than the original Pizza Hut order, and it was just a a mess. And you're like, "You know what? It's easier to just go there and pick up your order," right? It's easier just to handle that. It's easier to go through the checkout line with a person sometimes than go through the self-service checkout line 'cause you bought some weird stuff, and, you know, figuring out where the barcode is, and flipping things around, and they know exactly what to do, and you get out of the line faster.

[00:26:13] And you sit back and say, "You know, there's a convenience. There's a profit motive behind self-checkout but there's a convenience about having someone that knows what they're doing and has scanned that item 500 times today," you know, get you in and out of a line. And by the way, she says or he says, "Hi. Good morning. Good afternoon. How you doing?" while they're doing their job. The computer doesn't do that, right?

[00:26:36] Kevin: So anyway, back to the topic of payment systems for Cannibas based

[00:26:40] Terrance (Terry) Mendez: Yeah

[00:26:41] Kevin: businesses. Are there any nuances of that whole system that the average person is just simply not

[00:26:48] Terrance (Terry) Mendez: the hardest part

[00:26:48] Kevin: aware of?

[00:26:49] Terrance (Terry) Mendez: There's a couple of challenges of moving money. The first is convenience, just like we were just talking about, the going down the shopping line. When you have a account with a Wells Fargo, a Vectra, a Citibank, a JP Morgan, if I want to send a wire transfer, I go onto my computer, I put in some details. They give me some warnings that say, "If you do this and it's not right, it's your fault, not mine, and be careful". And the wire goes. In the cannabis industry, there's a physical person who will call you and validate the wire information, and they're gonna want to know that you're wiring it to a valid business place, that it's another cannabis operator, or there's a real reason for it, and they're gonna ask you why you're wiring the money.

[00:27:32] Chase never calls me, right? Citibank has never called me. Wells Fargo's never called me and said, "Why are you wiring this money? And who's this guy who's getting your money?" That's very different. But in the cannabis industry, that's what we do. Even with ACH processing, depending on the level of fraud risk attached to that particular transfer, you're gonna get a phone call, and that level for fraud risk is very low in cannabis versus a little higher for your everyday, you know, person or everyday business.

[00:28:00] You're gonna get a call and say, " can I get a copy of that invoice? You're sending money from here to here. I'd like to see the invoice that you're sending money to. And by the way, are they a licensed operator?" That's just the basics. Wire transfers, ACH are basics. There is no Zelle for cannabis today.

[00:28:15] You can't move money through Zelle, and Zelle wouldn't allow for a cannabis person to move money per se. Some of the affiliate banks and then the associated banks that support Zelle are not cannabis friendly. Then you have your payment processing could also mean what happens at checkout.

[00:28:34] Right now, when you go to a normal everyday CPG business like a Target, you swipe your credit card, you don't think twice about it. Well, when you go to a cannabis dispensary, you cannot swipe your credit card for the most part. You're gonna swipe a debit card, and they're gonna do something that's called cashless ATM, and they're gonna say, "Okay, the bill is $25. Well, we're gonna charge you , 40 and give you the remainder in change." That would be like a cashless ATM because they're making it look like you just pulled $40 out in $20 denominations and there's gray areas of legality around that. Or they're gonna do an ACH transfer on the spot, right?

[00:29:12] And so you, you kind of have an immediate ACH payment, and there's risks inside of that. For example there's no really easy way for a dispensary to know that you have $50 in your bank account. So they're swiping the card. They're giving you their product. There's a $50 exchange, and then the transaction doesn't clear because the person doesn't have the money in their account, you know?

[00:29:37] So there's loss ratios that are a bit higher in cannabis than others. There are great companies out there that have built payment processing platforms that try to mitigate this for the cannabis industry, and many of them bank through us. But that's also difficult for them. And the reason it's difficult is it's hard for a credit union or a regional to get FBO accounts and MRB licenses and validate those things and set up controls that you'd normally see in a very large bank, now you're finding on a kind of regional credit union processing these things.

[00:30:11] And so it is difficult to set up the platform, and there's elevated risk throughout the entire process.

[00:30:17] Kevin: I thought you made a comment that seems counterintuitive to me at least, and maybe I heard it wrong, and that's that the fraud risk in the cannabis industry is actually lower than in other industries. Did I hear that?

[00:30:31] Terrance (Terry) Mendez: No, I said higher. Higher.

[00:30:34] Kevin: So the fraud risk is higher

[00:30:34] Terrance (Terry) Mendez: Elevated is the word.

[00:30:35] Kevin: And for that reason, these controls actually do make sense.

[00:30:40] Terrance (Terry) Mendez: Correct. Correct. And remember, when you swipe your credit card, think about it this way. You swipe your credit card in a dispensary. You don't have a credit card you can swipe, but if it was in a dispensary, you're in constant ... The whole experience of walking into a dispensary is not as good, even in the best dispensaries, as walking into a Circle K, right?

[00:31:00] When you walk up to a dispensary, all the windows are blacked out. You have no idea what's going on into that Circle K and now you have a thought of personal safety that you don't have necessarily walking into a Circle K.

[00:31:11] Kevin: Can I add a point of clarification for people who may not know? Circle K are gas station convenience stores.

[00:31:15] Terrance (Terry) Mendez: Gas stations, yes. And when you get through the front door, there's gonna be a pleasant person there who asks you for your driver's license so they can validate that you're over the age of 21 and there's no reason for you not to acquire cannabis. Then you're gonna walk through another door, and it's gonna be beautiful inside, but you can't generally, not 100% of the time, touch the product.

[00:31:39] It's behind the counter, and you get to look, you get to talk to somebody, and you say, "I want this, this, and this." And they put it together for you, and they'll have a wonderful conversation. You'll check out, and they'll put it in a brown paper bag or some type of paper bag, staple it shut with your receipt, and say, "Don't touch this until you get off camera and off property."

[00:31:58] Right? There are no bathrooms in dispensaries because you can use the cannabis in the bathroom, and that would be illegal, for example. There is a bathroom in a Circle K, and there's a bathroom in a Target, right? So the entire experience is very different, and the checkout experience is, "Can I have cash, or can I have your debit card?"

[00:32:18] Right? And that's a very different checkout experience than swiping your credit card. And when you use your debit card, there are different levels on the bank side of fraud protection than in when you use your credit card. But when you get a claim like, "Hey, I didn't buy these gummies at this store," it's very hard to support that claim because you're on 24/7 surveillance.

[00:32:39] They saw you walk in. There's a camera right behind the register. They know exactly what you bought, right? They have a receipt. Yet because it's a cannabis operator, oftentime those claims are successful even when you have all that level of security footage that you can provide to the, the bank to say "Hey, this was a valid sale."

[00:33:00] Kevin: So you mentioned that there's no Zelle for the cannabis industry. How would a Zelle-like service know that it's a cannabis transaction? Is it because every business has some kind of a code with

[00:33:17] Terrance (Terry) Mendez: Yes

[00:33:18] Kevin: whatever the government agency is and cannabis businesses have a cannabis-based code?

[00:33:22] Terrance (Terry) Mendez: What would happen is the only way to get it through is to be use a code that is not exactly linked to what you're doing, right? Those codes are issued federally, and there's not a cannabis one at all.

[00:33:32] Kevin: So you're trying to move money with Zelle. How do they know you're a cannabis based business?

[00:33:37] Terrance (Terry) Mendez: Your financial institution knows you're a cannabis-based business and that functionality wouldn't be turned on for you, right?

[00:33:44] Kevin: Okay. And I'm really intrigued by this virtual ATM type concept, right? So how common is it that when somebody buys with their debit card, they round it up to some $20 increment and give you change? And what was the whole justification for doing that? Like, that just seems super weird to me.

[00:34:03] Terrance (Terry) Mendez: It's a fairly gray area. Some people believe it's outside of the gray area. But that is a methodology that people determined was possible and allowed for debit card transactions, to go somewhat under the radar. And then you have the kind of like ACH transfer processes that are very legal, and those stand up a little more.

[00:34:25] So in the cannabis industry when you get together in conferences and whatnot, Emanuel said it earlier, it's kind of like I hope my payment processor stays active, right? And it's a matter of when it'll go down versus if it'll go down. Now, that has been getting better and better and better.

[00:34:42] And so we see that some of the folks that bank through us and some of the payment processors that bank through us have never gone down over a decade. And so it's getting better and the technology's getting better. There are, also payment processing folks that are doing this through an app where you actually get your driver's license scanned in the app, it's validated in the app.

[00:35:03] You put money in the app kind of like how you put money on your HSA card if you go to the doctor with a flexible payment card, and then you use that app to make the payments. Now, that's all very convenient and very straightforward with the exception that you now have to convince your cannabis consumer to have a special app only for you and only for when they buy cannabis and deal with yet another thing. So it's not particularly convenient.

[00:35:27] Kevin: I periodically, at least I have this memory of, maybe I'm making it up, but I have this memory of periodically seeing an advertisement for either a Cheech & Chong branded cannabis product, or maybe it's a Tommy Chong branded cannabis product. But I got the distinct impression I could buy them online and have them shipped to me. Is that a thing?

[00:35:47] Terrance (Terry) Mendez: It is a thing, but you're kind of... First of all, Cheech & Chong is a wonderful client of ours. They have been for a very long time, but they have two aspects of their business. They grew up in the marijuana space, but they moved into the CBD space as well as the in the hemp space, right?

[00:36:04] And so as they're growing that CBD and hemp space, the Farm Bill allows for distribution on common platforms. And so if you go onto Amazon right now and you type in CBD, you will find CBD products. You might even find some intoxicating hemp products on there, which mimic the effect on the human of cannabis or THC, but it's effectively covered under the Farm Bill and allowed to be distributed.

[00:36:30] That's why when you walk into, I was in Hollywood, Florida, at a convention, and I went to buy a T-shirt for my daughter 'cause I always buy them something when I go somewhere, and the gentleman says, "Hey, are you here for the cannabis conference?" And I said, "Yeah." And he goes, "Look what I got." Now, it's not legal in Hollywood, Florida, to sell any cannabis at all.

[00:36:50] Yet the person had intoxicating hemp, and he had vape pens, and he had flower, and he had dabbables, and he had, you know, gummies that were all legal because it was intoxicating hemp and not necessarily cannabis. So the difference between Delta-8, Delta-9, and things like that, it's happening today.

[00:37:08] We just saw a four-week extension of the ban on intoxicating hemp to align with the government budgeting process. And so, that's an active debate of how can something that effectively is very similar to a regulated marijuana product, be able to be sold at smoke shops, gas stations, and the like.

[00:37:28] And you've seen public announcements. The Chicago center where the Bulls play are serving intoxicating beverages. You have some very large companies that are in the intoxicating beverage space, and that's available online. That's available in your local stadium.

[00:37:44] Kevin: 30 years ago , maybe even longer ago, there was a pretty well-known comedian named Bill Hicks who did an entire routine about how sports events fueled by alcohol somehow create violence, and people who are at sporting events who behave violently should be required to smoke marijuana to calm them down.

[00:38:08] Terrance (Terry) Mendez: Yeah. Well, we just saw a report, I think it was about a month ago, that said the number of Americans that have self-disclosed Cannabis usage on a regular basis now exceeds the number of people that say they drink alcohol on a regular basis. It's an amazing thing.

[00:38:28] Kevin: That really is. That really is. Man, the strange world of cannabis business financing. I was completely unaware of the classifications, if you will, between THC and THC-like. And I suspect, I mean, I could be wrong, but I suspect if a chemist was to examine those molecules in detail, they probably look virtually identical, yet we've created different...

[00:38:53] Terrance (Terry) Mendez: Similar. Yeah, it would be. I mean the plant is the same plant, it's just grown differently, so there would be very interesting similarities between that. But, in my head, I'm not a scientist and I could be wrong in this statement, but I kind of think of it as cane sugar versus high fructose corn syrup. Tastes the same. Yeah. Very different impact on your body. Very different impact on, but effectively one's cheaper and one's easier to sell than the other.

[00:39:19] Kevin: Wow, that's wild.

[00:39:21] Emanuel: I have a question about the global market. So most of the conversation happened in the United States. We fairly touched Canada, which we know was a little bit more progressive in that sense. I'm not sure, I don't follow. This is not my cup of tea, so to say. But globally, where are we looking at?

[00:39:42] How-- What's the world-- I'm assuming it obviously different, it's different in Europe than some other parts of the world. But also we need to consider that culturally and traditionally they've included hemp, marijuana, and others. Many cultures have them for thousands and thousands of years, and they're fairly accepted all things considered. Is there a market essentially?

[00:40:08] Terrance (Terry) Mendez: There is a market and it's growing very, very quickly in Europe and certain other locations that have allowed for it. Germany and others have seen some incredible growth in the cannabis industry as these companies globally expand, and Canadian companies and US multi-state operators have invested in expansion globally.

[00:40:30] Again, it creates a challenge. If you're banking with a credit union that's chartered to bank in Michigan or wherever, and now all of a sudden their member is doing business overseas, it creates a little challenge, right? But the reality of this is there's a large portion of the world where hemp is okay, but THC is not.

[00:40:51] Marijuana is not. You look at Japan, you look at China, you look at most of the Asian countries that's the case. You go to jail, right? You know, what was the basketball player in the WNBA that spent time in jail for having a vape pen in Russia. So, you gotta know where you're going.

[00:41:08] Today I run a company that teaches people how to travel, and that's one of the things I do on the side, and it's kind of a fun little company that I work with. And you gotta be careful, right? There's certain ports of entry that if you cruise in and you have marijuana on you, you've now broken the law.

[00:41:24] And so understanding what the laws are, what countries you need to go to, where it's legal, where it's not legal, it's on the individual to know those things. But the growth is there, particularly in Europe, and it's somewhat controlled growth. But I think people are seeing returns on their investment that are quite good. Particularly Canadian companies that allow for international imports and exports, where it's legal to import and export cannabis. So now you have a facility that maybe creates 100,000 or 500,000 pounds of cannabis a year.

[00:41:58] Can't possibly sell that all in Canada, and so now you have another place to sell it. And maybe a more profitable place to sell it.

[00:42:05] Emanuel: Fair enough.

[00:42:06] Kevin: Are there global opportunities for your business as what I'm gonna call recreational cannabis use is more widely allowed?

[00:42:14] Terrance (Terry) Mendez: Yeah, potentially, and we're looking through that as we speak. The basis of why a safe harbor exists is the quality of the controls around the US banking system and the complexity of those controls, and then trying to insert within that a high-risk regulated state legal situation.

[00:42:37] Kevin: Yeah.

[00:42:38] Terrance (Terry) Mendez: And so there's some uniqueness to that. But as we see how others mimic, because the US did it first, in my opinion, if we see others mimic, they're using us as a model. And to the extent that that model is very similar and a lot of countries particularly like the Caribbean countries and things like that, they mimic the US system.

[00:43:00] And to the extent they mimic the US system, there's some interesting synergies that we might be able to leverage.

[00:43:06] Kevin: There's, in my mind, an interesting parallel between what I'm gonna generically refer to as organized crime and illegal substances.

[00:43:17] In the 1920s in the United States, when there was a constitutional prohibition on alcohol sales, there was this rise in... people generally think of Chicago, and it may be Chicago was like the epicenter.

[00:43:30] Terrance (Terry) Mendez: Yeah.

[00:43:30] Kevin: But all these gangsters are getting rich selling illegal alcohol, and that, that I don't know what the right word is, but kneecapping of the gangsters was accomplished by repealing prohibition, right? So they just made alcohol legal, and all of a sudden the gangsters didn't have a business model. And it seems to me...

[00:43:48] Terrance (Terry) Mendez: I'm sure they figured out a new business model, but let's...

[00:43:51] Kevin: Yeah, that's valid, right? They moved into other areas, right? But I mean, why couldn't the same thing conceptually happen with cannabis? Just make it completely legal, and that breaks the connection between organized crime and cannabis.

[00:44:03] Terrance (Terry) Mendez: There you have the argument of most of the industry participants saying that the black market doesn't exist if there's no need for a black market, right? In 2020, we saw a heyday of cannabis. Everybody was at home. People started using cannabis a lot, and we had some of the best years.

[00:44:21] But what else happened in 2020? We had a perfect storm of political kind of positioning. You know, border controls deteriorated. Inflation started going up. It costs more as inflation goes up, meaning from a percentage of the consumer wallet, you know, and choice.

[00:44:41] And so you had this little bit of a perfect storm and that's where you see kind of the inverted J curve where prices tanked. In Colorado at one point, a pound of weed was selling wholesale for like three fifty, four hundred dollars, and you can't run a business like that. It becomes very difficult to run a business it when you can't sell your product at a profit.

[00:45:02] Kevin: Right.

[00:45:03] Terrance (Terry) Mendez: Well, part of that was the influx of the black market. You had a dramatic, particularly in California and other states where it now became cheaper to go there, even though you're sacrificing all of the controls, all of the things that make it safe, right? You're sacrificing all those things but you're able to afford it in a different vertical.

[00:45:22] And it wasn't just cannabis coming across. I think some people think about it in terms of like, "Hey, cannabis competes with cannabis." No. In some ways, when people are needing the product, it's whatever's cheapest, right? And so if you have a cheaper alternative, it's your cheaper alternative wins versus the more expensive.

[00:45:40] And our industry, our entire industry started in the context of, well, if we allow cannabis, we'll have higher tax base, and we're gonna tax these people really high, and we called it the green tax, and we're gonna build schools, and we're gonna support the community with these extra taxes. Now, I don't know that that has actually worked anywhere in the United States where the taxes went to schools directly, and we have this incredibly educated populace of children coming out of these schools because they got this tax money.

[00:46:09] I'm just not sure that that ever actually worked. But the cannabis industry is taxed like no other industry, which means the products are priced in order to absorb that tax.

[00:46:20] Kevin: Right. I forget which state it was, but I remember there was a ballot initiative towards the legalization of recreational marijuana, and that was the argument was it's gonna generate tax revenues, and the slogan was Pot for Potholes.

[00:46:40] Terrance (Terry) Mendez: It's probably Michigan. I have no idea, but yeah.

[00:46:43] Kevin: That was a catchy slogan. That's why it caught my eye, right? Or caught my ear.

[00:46:48] Emanuel: Terry, if people want to learn more about you, about your company, but also about the industry and keep up to date, what are some resources you can send people over? For example, if they wanna travel, I don't know, I think it's illegal to bring in across border, right? Even in Canada, if you have even a vape pen and vice versa, I think it's not legal.

[00:47:09] So where can people find out more information and also where they can find more info about you, your company, and all the good stuff? Where do you want people to follow and learn more?

[00:47:22] Terrance (Terry) Mendez: There are great informational sites out there. Anytime you're traveling abroad, you want to be able to check the websites of the countries that you're traveling into and making sure what you're bringing along is going to be acceptable. It doesn't matter if it's a vape pen in the case of the lady from the WNBA or it's a handgun.

[00:47:42] You can leave Colorado with your handgun and you land in New York, you're going to get arrested. You know what I mean? Just be careful as you travel. Safe Harbor we've revamped our website. There's a tremendous amount of information there and blog post information, lending information, payment processing information, banking information.

[00:48:01] So our main website shfinancial.org is a great sense of place to have resources at your fingertips. And then our entire team is available to the industry. Like I said, we have amazing folks on our team that have decades of experience in the cannabis industry that are here to help the industry be more and more successful.

[00:48:21] If you're a consumer looking for safe products, walk into a dispensary and ask the budtenders. I can tell you that at one point I managed I think it was 52 dispensaries across a number of states and the budtenders know everything.

[00:48:45] I mean, they are so geared into what's going on into this industry. They're enjoying the industry. They've been participants in the industry from the heydays and it's very difficult to find a budtender that really doesn't know a thing unless they're brand new. But the the budtenders know what to do and how.

[00:49:04] So ask, have the conversation. You know, you walk in, my dad was suffering with some type of shingles, I think it's called, like chicken pox for, for old guys.

[00:49:13] Kevin: Yeah.

[00:49:13] Terrance (Terry) Mendez: The and so I walked into a dispensary and I said, "This is what my dad's suffering with. I know you can't give me medical advice, but if it's your dad, what would you do?"

[00:49:21] And they know him. By the way, he's never had cannabis before and I wind up sending him some pressed pills and easy to take a pressed pill and it kind of feels like Tylenol than perhaps taking a gummy and figuring out like, "Yeah, I'm not sure about this."

[00:49:34] Kevin: There's one more question that occurred to me, and I gotta provide the background for it to make sense. So I'm originally from California, and California has very strict agricultural protection laws because the agricultural industry is so important to California.

[00:49:51] Terrance (Terry) Mendez: Mm-hmm.

[00:49:51] Kevin: I have this memory. As a kid, we were down in San Diego for whatever reason, and we drove into Tijuana for a couple of hours. We had some oranges in the van that had been purchased in California. But when we drove from Tijuana back into San Diego, they confiscated the oranges because they didn't know where they came from, and they're concerned about various plant parasites that could devastate California's agricultural community. Well, marijuana is an agricultural product. So do you bump up against these kind of agricultural restrictions in terms of moving marijuana from place to place?

[00:50:32] Terrance (Terry) Mendez: Yes, but more so. Because there's no interstate commerce in the United States for the movement of marijuana. You could move marijuana from Colorado to Oklahoma, both legal states, but when you did it, you just broke the law. You move marijuana from Colorado to New Mexico, which shares a border. You just broke the law because there is no interstate commerce.

[00:50:59] Now, will you get caught and will you get prosecuted is a whole totally different thing, but you just broke the law. And so any movement, not because of parasites and not because of transporting kind of micro contaminants across borders, it's because it's currently illegal. There is no ability to ship product interstate, import or export product into the country or out of the country.

[00:51:24] Does it happen? I'm sure it does. Should it happen and is it legal? The answer is no.

[00:51:30] Kevin: Under current law, canabis consumed in Michigan has to be grown in Michigan. Cannabis consumed in New Mexico has to be grown in New Mexico.

[00:51:39] Terrance (Terry) Mendez: That's correct.

[00:51:40] Kevin: I had no idea. Wow.

[00:51:43] Emanuel: It's not like

[00:51:43] Terrance (Terry) Mendez: That's 100% correct.

[00:51:46] Emanuel: firearms

[00:51:47] Terrance (Terry) Mendez: that's where you... say that again, Emanuel.

[00:51:48] Emanuel: So it's not like the handguns or firearms that transported in a special container or having a permit, a special permit of transportation can allow you to move it around. No, not forever. No.

[00:52:00] Terrance (Terry) Mendez: There's no kind of free pass, right? There's no, "Let me register, I'm moving it from here to here." That doesn't happen. And that's why you see very successful cannabis dispensaries on the borders of legal to illegal states, right? So Michigan used to make a lot of money when Ohio was illegal, 'cause people from Ohio would go to Michigan.

[00:52:23] New Mexico border dispensaries make a lot of money 'cause you can't buy it in Texas. Now, people have gotten wise to those things, and Texas, I believe, has new laws that say if you bring it across the border, you still broke the law, right? Like, if you went and bought it in New Mexico and we happened to pull you over, you're in pretty deep doo-doo.

[00:52:42] But that's the challenge. And so yeah, you will see a lot of dispensaries in places like Las Cruces and others that are border states. Border on the state that's illegal, that doesn't have a legal, medical, or recreational program.

[00:52:56] Emanuel: Some, some final words of wisdom, for example, Terry, where do you see this going, and what's the message that you want our listeners and whoever's interested in this space, get from today's episode?

[00:53:09] Terrance (Terry) Mendez: Fair enough. And I'll take that question from a business perspective. The cannabis industry is not for the faint of heart, and it's a risky industry to get into. The dispensary business operates on razor-thin margins. There are tax disadvantages today, like 280E for recreational sales of cannabis that make it hard to make a profit, and then there are operational issues.

[00:53:34] And so this is no longer the industry where you jump in and think, "In a year, I'm a millionaire," right? Or, "I've, I've doubled my money." That's not what this is. But for the folks that do it well and take mainstream agricultural processes, implement them well, run a tight business, don't treat the business more of like a kind of fun and games versus a business, those folks are doing quite well.

[00:54:00] And there are gonna be an emergence over the next couple of years of what I say is larger and larger multi-state operators, a consolidation. And we're seeing now for the first time the New York Stock Exchange and the Nasdaq allow for the public trading of plant-touching entities on those exchanges.

[00:54:19] And so the world is continuing to change and evolve, and so there will be money to be made. If you're in the industry today, be ready to be for an exit. Have the financial controls in place, have your ship in order so that you're easy to acquire. You have an ability to add value, and you can really articulate the accreted value to a potential buyer of why they should buy you and why they should pay a particular price for you.

[00:54:45] The same methodology you go into a bank to ask for a loan is the same methodology you use to kind of maximize your fair value of the business that you built. And Safe Harbor is in a position where we can help you on buy-side, sell-side transactions. We can help you professionalize your corporate office, per se, and help you craft that story for higher success.

[00:55:08] Kevin: So it sounds like you're anticipating a consolidation wave in the future in the cannabis industry.

[00:55:14] Terrance (Terry) Mendez: It's happening right now. There's Curaleaf has a hostile takeover bid for Aurora Cannabis that's out there. I think it's $272 million. Trulieve just listed on the New York Stock Exchange. Glasshouse just listed on the stock exchange. Jason Wild from TerrAscend has said that it's not a matter of if, but when all the MSOs will become listed on public stock exchanges.

[00:55:36] That creates equity that you can raise equity instead of debt. Equity being sometimes cheaper than debt, and therefore the ability to acquire companies and consolidate industries becomes real. And you're seeing examples like Vireo, where they're going out and buying companies by purchasing at a discount their debts and then foreclosing on them or consolidate them into a larger MSO.

[00:56:00] And Vireo is an example of a synthetic or an LBO that you would have seen in the '80s. You know, somebody goes in and consolidates.

[00:56:08] Kevin: What does MSO stand for?

[00:56:10] Terrance (Terry) Mendez: Multi-state operator, that's a cannabis operator that's more than one state.

[00:56:15] Kevin: Got it. Wow. Boy, interesting topic.

[00:56:20] Emanuel: Thank you for being our guest and shedding so much light on this topic that I have little to no knowledge at all. But now I think I'm a little bit at an advantage above most people as well.

[00:56:30] Terrance (Terry) Mendez: Yeah.

[00:56:31] Emanuel: have been

[00:56:31] Terrance (Terry) Mendez: We'll get you at least using topicals. You know, it looks like you work out, so we'll get you some topicals for the pain. They're better stuff than Bengay.

[00:56:40] Emanuel: How did you know?

[00:56:41] Kevin: Well, I sure learned a lot.

[00:56:43] Emanuel: I didn't use Bengay, but something else for my knee. So actually, yeah.

[00:56:47] Terrance (Terry) Mendez: Fair enough. There's plenty of cool products out there that, that could help.

[00:56:52] Emanuel: I think that helps. I'm about to run a marathon, so definitely need also a booster.

[00:56:56] Terrance (Terry) Mendez: Oh, that's fantastic, man.

[00:56:57] Emanuel: Okay. Thank you so much

[00:56:59] Terrance (Terry) Mendez: Good luck.

[00:57:00] Emanuel: Terry.

[00:57:01] Terrance (Terry) Mendez: Take care

[00:57:01] Emanuel: Yet another great podcast episode.

[00:57:04] Curiouspundits.com is where you'll find today's recording and links to Terry's company and to all the things that we've mentioned. Also links to previous recordings, future recordings, links to where you can listen to our podcast, your platform of choice being Apple Podcasts, Spotify, Stitcher, et cetera. Go leave us a review, hopefully a five-star one. Let us know what you like. Let us know what you didn't like. If you disagree with anything that we or any of our guests said.

[00:57:34] Until the next episode, I'm one of the co-hosts, Emanuel.

[00:57:38] Kevin: I'm the other co-host, Kevin, thank you for listening.