Transcript

Announcer:
0:05
Career has taken him from Cleveland to Wall Street to Monaco, and now Las Vegas. As the leader of one of the first, if not only, cannabis operations and an Opportunity Zone. He holds a unique position, straddling the two industries. Mike Sassano of Solaris Farms is today's guest on OZExpo Podcast.:

Announcer:
0:26
Welcome to the OZExpo Podcast, where we talk with the people who really know the Opportunity Zone market. From investors, fund managers and developers to tax experts, politicians and attorneys, and most influential voices in the Opportunity Zone industry are here on the OZExpo Podcast.:

Jack:
0:48
Welcome back everybody, to the OZExpo Podcast. I'm your host, Jack Heald, joining me today is Mike Sassano, the president founder, the big cheese of Solaris Farms. Welcome, Mike.:

Mike:
1:03
Nice to be here.:

Jack:
1:04
Well, one of the first things I like to ask all my guests is a who they are and where they came from. So, Mike, let's do that. Who are you? Who is Mike Sassano and where did you come from?:

Mike:
1:15
Well, originally came from Cleveland, Ohio. Had a life like a Rolling Stone, I guess after that where I went to school up in Boston. Ended up in New York as a trader, living in Europe, for a big part of my adult life. And then ultimately ending up in the, in the cannabis industry, you know, in the early stages of this industry and and excelling at it to a point where I ended up here in Las Vegas, developing Solaris Farms.:

Jack:
1:48
Well, we're going to, we're going to dive into that deeply, but I'm, I'm interested in folks who lived overseas. Where in Europe did you live and how long were you there?:

Mike:
1:57
I lived in Monaco since about the year 2000. I still have residents out there and you know, I'll be going back there developing the cannabis market also.:

Jack:
2:11
I know zip zapa do about the cannabis market outside of Amsterdam anywhere outside of the U.S. is there an, is there an a developing market there as well?:

Mike:
2:22
Well, 14 of, and my numbers may be off because it's constantly changing. Uh, 14 countries are able to buy and consume medical marijuana in Europe. I think, it's eight countries you're allowed to grow cannabis in, in Europe. And when I'm talking cannabis, I'm talking THC as opposed to just hemp. So, if you get into the hemp, all that's even much larger. It's, it's, it's all over.:

Jack:
2:51
Quick question about the cannabis business. For you personally, a lot of folks who get into the cannabis business get into it initially because they find that the benefits, personally are so profound. And I'm not talking about, I'm not talking about the financial benefits. I mean the medical benefits. Was that your experience, or was this primarily a business venture on your part?:

Mike:
3:16
While everybody's got their stories of people that, that had been sick, especially with cancer, people who have nervous system disorders, and people that just generally have a pain. And I can say that, that, I have personal experience in my life with my close relatives and family, in the, in the cancer area, in the nervous system area. Even personally myself with pain, due to, let's just say, you know, things that happen as you get older. So, you know, it's, it's very much a, the holistic, the holistic approach. And of course, you know, I treat this like a business. So, you know, we're here to help people.:

Jack:
4:06
So, let's talk about Solaris Farms. Tell us about the business. I did some reading on it. It looks like, it looks like you've got quite an extensive set of services and products that you offer there.:

Mike:
4:20
Um, well, basically this is a cultivation and, and in Las Vegas would call it production, which means producing the oils. Um, a licensed facility in Nevada. It's a high tech desert greenhouse. There's really, it's, it's very unique. Just about everybody who's walked in here, has given a wow factor. Um, the actual design came from the deserts of Kuwait where they had an upper shade system that protects the structure, during the, during the hot deserts and they have similar weather patterns is us where it could get up to 115 plus degrees and couldn't get as cold as night down to, down to freezing.:

Mike:
5:01
So, also many of the different design features here from antimicrobial floors to, uh, to central spline that contain contaminates to Bostrum fan. The equipment that was designed for this facility, really lends to do a fully automated system, we are as much automated without the robots, I should say.:

Jack:
5:25
Now it looked to like, as I do my research that you guys do more then just production. There is something called "brand campus" that I was fascinated with. What's the brand campus story there, with Solaris Farms.:

Mike:
5:25
Right. So, primarily were into the cultivation here. Making our genetics. But on the other side, there's brands that we have, that act as partners to use. Or tenants or however you want to look at the symbiotic relationship. And they come and they work in our space and they promote their brands. So, right now in Solaris Farms, there's Bloom, out of California and Yellow Lemon and they make their oils and their vape line out of our facility.:

Jack:
6:19
So, let's steer this conversation in the direction of the Opportunity Zone business and how Solaris Farms and your business, in particular your expertise. dovetails with the Opportunity Zone program.:

Mike:
6:35
Right. So, Solaris Farms happens to be in the Opportunity Zone, one of the Opportunity Zones of Nevada. So, when the, when the a heat map came out, you know, we took a look and you know, sure enough, there they are. There we are. And, as you know, you all know it, you know, it's very new, Opportunity Zones. We just got a whole other set of regulations that just came out. The key is the, is these, you know, you know, looking at cannabis and how, greenhouses, high tech greenhouses and the actual tax ramifications on that can benefit investors or the investment as a whole.:

Mike:
7:15
And the way it looks, is when you look at the cannabis business industry, you buy your piece of land, sometimes it's a very expensive piece of land or country. And then you have to develop that land. And then you have to, operate and build a, you know, apparently sophisticated building to keep it the environmentals is under control in order to grow your plants. You know, and it, in doing so, you actually, can qualify to be an Opportunity Zone investment and to defer your, taxes up to 10 years and the pay, no taxes even. This is actually a piece of real estate a developed piece of real estate, a at a bonafide investments.:

Mike:
8:07
And it's also an operating and operating entity. So, if you look at it, any structure of hotels or if you look at the structure of casinos in Vegas, you have one group that owns and operates and builds and develops the land and you have one group operates and they can actually be both the same group and have multiple ways of, of, of the achieving revenue and also tax savings.:

Jack:
8:37
So, are you offering space in Solaris Farms for ongoing businesses? Are you, are you trying to replicate this in other locations?:

Mike:
8:45
Well, right now we're in a full build out of the rest of the land. Uh, so phase one has been completed and we're in, we're in design and permitting, with the city. Uh, on the entire build out and for the cultivation that will be operated, under, under the Solaris farms, let's call it envelope. And as far as production goes, oh, we are looking at increasing our production space to 35,000 square feet of space to host different brands.:

Mike:
9:21
And it's quite possible that, you know, our current brand, maybe you may want to take all of that space. We just don't know at this point. It's a little early in our planning, but no, the idea is to provide brands access to the Vegas market, both on a marketing scale level, on a, you know, up a product level where they trim and poduct to operate, but also from a real estate and licensing level, where they can work with a company that that is a legal Nevada state license.:

Jack:
9:55
Tell us a little bit about the cannabis business. I know in the Arizona there is some sort of legislation that prevents a vertical integration between the production side and the retail side. There's gotta be some sort of Chinese wall between the two of them. Do you have a similar situation in Nevada?:

Mike:
10:14
No. You can, you can be vertically integrated where you own cultivation, production and dispensary and even we have another license distribution. Um, so you can actually own all, all those licenses, distribute, grow, produce your product and sell it through your dispensary all in one. But, the only thing that's segregated Chinese wall is lab testing, between all of those groups. So, and that's pretty logical.:

Jack:
10:42
Now, you're probably into areas where I don't know enough to even ask intelligent questions. Talk about the lab testing.:

Mike:
10:48
Well, Nevada is considered one of the most rigid well designed actually, testing programs in the United States today. As a matter of fact, many states are copying their foot print. I can say it in a really simple way is Nevada has taken the step to really look at this from food industry perspectives and from when central legality comes. What other agencies are going to regulating and how. So, that could be from a FDA style standpoint or from a agricultural standpoint, they really taken a look all around at all the different standpoints in order to have the lab testing, and the requirements to grow under under those. . It tops and positive by the way, for the industry, as difficult as if for some growers this is a very positive step in the industry, getting good product and reliable product to the consumers.:

Jack:
11:53
Let's talk a little bit about, the Opportunity Zone program itself as it relates to your kind of business.:

Mike:
12:01
Well, we definitely try to explain to people because it's very new to everybody and even to ourselves. We try not to get into tax advice, per say. That's not what we're here to do. We are in the Opportunity Zones. And I tried to explain to everybody in a very simple way how to look at this. If you have the ability to buy a land or a business. You know and let's find a very simple business like owning a home, owning condos and you rent those out or you know, something to that nature. Well you can expect in a market like today's that you can achieve five to maybe 8%, you know, on a fairly regular basis. These are highly commoditized, you know, and liquid investments where you could sell those depending on their size to other groups. Um, so you can achieve over 10 years a fairly, a fairly nice return. Um, when you go to the cannabis industry and you look at the evaluations and the growth in this industry and the growth still to come in this industry.:

Mike:
13:08
Um, and I think worldwide, and I'm just going to throw a number, don't hold me to this one, but everybody has a different number, but I think they gave a worldwide number of $185 billion as a worldwide market coming up in this industry. Well, when you think of that kind of growth, you know, you can easily say, hey, it's possible to achieve 20% Or 30% returns annually on your money. And that's where the significance comes. If you, are able to use a Opportunity Zone, to shield yourself and benefit from that kind of growth,:

Jack:
13:45
What are those, what are some of the unanswered questions in the Opportunity Zone for somebody such as yourself who's, who's actually got an ongoing business operation? What are the open questions that you're hoping still get resolved?:

Mike:
14:01
Well, there are so many. Actually. There's so many different ways. You know, you look at this and there's also, you know, when is that opportunity, you know, when, when does the time of that opportunity where you can take it back or do you have the possibility to roll your investments over and how does that timing look?:

Mike:
14:24
How does that timing coincide with how the actual rules are? It's pretty complex, you know, and I try to just always keep things down to the simplest form. What would, what would we be looking for, you know, a little bit, you know, when we, when we do these investments, we're going to be looking for, you know, what kind of, what kind of documentation do we need to file now, today? In order to make sure our investors, or potential investors, are secure that they're going to be, accepted and that this is how this program is, is going to run. And you know, everyone always will ask you, especially if you're looking for investors. Well, are you, are you guaranteeing that? Are you advising me on that?:

Mike:
15:14
Are you, is that what you're saying? No, there's no guarantees. You can't advise anybody. That's a talk with your professionals in your account. Does that make sure that this is the right investment for you specifically? And you're, and, and whatever your investment is that you're selling or putting into the company sale proceeds?:

Jack:
15:35
No. Are you actively soliciting, investigation. Investigation, good Lord, are you actively soliciting investment? Are you actively soliciting investment in Solaris farms,:

Mike:
15:53
Solaris is special in its own way. It's a very, it's a very small group investors. Extremely small as a matter of fact. And we're lucky for you know, one institution, you know, or you know, the actual, you know, investors, to step up. We are interested to figure out exactly how the opportunities don't, can, can benefit us and how it can benefit the next possible investor. Okay. No, we don't actively go out and solicit, funds is the long and short of that answer.:

Jack:
16:32
Okay. Lots of folks have been saying, hey, cannabis would be quite an opportunity, but I haven't run into anybody who's doing it. Lots of folks are saying, Gosh, there should be some businesses, some kind of ongoing business concerns, but they're very, very few of those. So, you operate, you sit in a unique niche here. Mike, as somebody who's actually got the ongoing business in the Opportunity Zone in the cannabis business, you may, you may be a niche of one, at least as far as I can tell right now.:

Mike:
17:01
So, somebody told me that recently. You said it in a completely different way. Yeah, I see what you're saying. It's a little little different.:

Jack:
17:13
Well, it's the best kind, you know, if the Opportunity Zone program is to succeed, it's, you know, at the end of the day what it has to do is generate jobs. You know, that's really what it's all about. It's good to build buildings and develop real estate. But if we've got all that and we don't have an increase in jobs, and an increase in economic activity in these, these underserved zones, then the program itself hasn't succeeded. And you know, this intersection between the cannabis industry and the Opportunity Zone program just seems perfect. The other one that I'm, I think somebody is going to need to get ahold of is fourth generation nuclear. So, if you can figure out a way to integrate fourth generation nuclear with cannabis and the Opportunity Zones, I think you've got a home run.:

Mike:
18:03
Okay. It was pretty amazing. There's a great article that just came out. This industry, cannabis, I think they said it touches 18 different groups that's seriously could benefit off of the off of joining into the cannabis movement. Everything from biotech to Pharma, to beverages to alcoholic beverages, nonalcoholic or alcoholic beverages. Um, you know, and it really showed how cannabis is so diverse. Health and wellness, you know, to tourism, agrotourism is on cannabis and that the industry touches so many places. I can't imagine that somebody can find a nexus between that and your nuclear desire, but I'd have to think about it more.:

Jack:
18:50
We'll drop that one and move on. Obviously you've got a diverse background to finance and entrepreneurship. This may be a really obvious question, but it might be fun. What kinds of things really get you excited? What gets you up out of the bed in the morning and gets the blood pumping and eager to meet the new day,:

Mike:
19:11
You know, I like the fact that I hear stories constantly on people that are being helped. Yeah. Not just by myself, but, everybody in this industry, you know, like I said, cancer is very important on many levels. I don't want to go personally into the cancer stories, but there's very current and past real examples and I like people are getting alternative ways to help themselves. I still encourage people to always do what normal doctors do, but there are alternatives that could help or at least a be symbiotic in relation to it. Um, and you know, I have a lot of people that rely upon me. So, you know, I need to make, you know, I need to get up in the morning and, and and take care of them all in someway.:

Jack:
20:01
So, let's flip it around. We're all human. There's stuff that drives us crazy. What's something that drives you out of your mind? If you were king of the world for a day, but only one day, what would you change?:

Mike:
20:18
Sometimes I'm King of my own little microcosm, but the one thing that really drives me nuts Is just lying. I just can't take it. I, you know, and I, I just, it's one of those things that if people, like if you told me the truth, okay, we made a mistake, here it is, I'll work with you to fix it. But if you keep lying to me and I can't figure out why, how we could fix a mistake and I got to just get to a point where I have to figure out you're lying and then I got to find out myself how to fix it. That's almost inexcusable, you know, if it keeps repeating itself, you know, that's, that one really gets me:

Jack:
20:57
One more question. What are you best at?:

Mike:
21:04
Working really hard.:

Jack:
21:08
Are you one of those genetic freaks who has the ability to work 20 hours a day and live on four hours of sleep, for days and weeks and months at a time.:

Mike:
21:19
I'm not sure if I want to tell you this, but I don't sleep very much. I don't know the exact numbers. I don't know why it is. I'm hoping to improve that. Um, you know, but it's some kind of strange reality.:

Jack:
21:34
You know what, that was just right off the top of my head, but I know that that's actually fairly common for extremely high performers, just at a physiological level. Um, they tend to be able to operate for longer periods of time on less sleep than us normal people. Okay.:

Mike:
21:57
It's completely bizarre. My Fitbit tells a story that's quite scary to people when I show it, but I'm like, no, I'm fine and I'm still smiling and I'm happy.:

Jack:
22:06
That's astonishing. I think I want to see your Fitbit report because it sounds fun.:

Mike:
22:13
You do have to see it.:

Jack:
22:13
Well, Mike, I appreciate your time today. This has been, a really a different kind of conversation for us. On the OZExpo podcast. Um, if, if folks want to get ahold of you or find out more about Solaris Farms, what's the best way to do that?:

Mike:
22:29
You could just write to executives@solarisfarms.org and people man that, and if it's you or whether it's me or it's somebody else, we try to get back to everybody we can. Um, you know, sometimes we get a lot of, we don't, can't get to everybody, but you know, we do our best.:

Jack:
22:50
And I will remind our listeners that that information will be available on the podcast, a podcast website where you can pick that up. You don't have to write it down. Well, Mike, any last words before we sign off?:

Mike:
23:05
No, this was, this was quite fun. I look forward to the OZExpo and make sure your come watch me speak.:

Jack:
23:15
Hopefully I'll be able to do that. I have a suspicion I'm going to be doing a whole bunch of interviews that week, so I'm going to do my best to get out and actually,:

Mike:
23:23
So come out to Solaris Farms.:

Jack:
23:25
Oh, it isn't. It isn't Vegas, isn't it?:

Mike:
23:28
That's right. And it's only 10 minutes from the strip. So, it's probably, you should do your podcast and some interviews from here and I would have a whole other picture.:

Jack:
23:37
You know what? I'm going to follow up off the air with you cause that, that might be really, really cool.:

Mike:
23:44
Um, it would be really cool.:

Jack:
23:46
I appreciate it. I appreciate the invitation. Well, for Mike's Sassano of Solaris Farms, I'm Jack Healed. This is the OZExpo podcast. Thanks for listening and we will talk to you next time.:

Announcer:
23:59
This podcast is for informational purposes only and does not constitute legal tax or investment advice. For specific recommendations, please consult with your financial, legal, or tax professional.:

Announcer:
24:18
This is a presentation of OutClick Media Corporation.:


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