Sun | Mar 24, 2019

Weed Ed | Bridging the gap between investors and ganjapreneurs

Published:Monday | February 4, 2019 | 12:16 AM

There is much enthusiasm around the fast-growing medical cannabis business, but potential investors are looking for reasons to believe. The legal ganja industry has experienced rapid global growth over the past few years, and Caribbean nations, led by Jamaica, have been passing legislation to facilitate entrepreneurship and the requisite investment.

While the trajectory of the ganja industry points to inevitable global legalisation and the expansion of the marketplace, investors require a certain level of confidence to pump money into these ventures. And, importantly, investors also need to be educated on the nuances of the industry.

“Investors have capital they want to deploy, but they don’t have a clue where to start,” said Douglas Gordon, founder and CEO of CanEx, a cannabis-focused expo and business conference held annually in Montego Bay since 2016.

To help fill the void, Gordon says CanEx will be hosting a series of investment summits throughout May in Trinidad and Tobago, Barbados, and the Cayman Islands. The objective is to create an environment where investors can be sensitised on the state of the industry, as well as match them with entrepreneurs seeking capital.

“This is an opportunity for them (investors) to learn about the industry and hear actual business pitches. It will be a good mix of investors, entrepreneurs, policymakers, attorneys and the medical profession,” Gordon said of his upcoming events. “We’re looking at the micro and macro opportunities, and we’re stimulating a discussion about how each country can participate in and benefit from the industry.”

Since Jamaica decriminalised ganja in 2015, The Cayman Islands, Barbados, Belize, Trinidad and Tobago, St Vincent and the Grenadines, St Kitts and Nevis, and Antigua and Barbuda have all taken steps to do the same, with a view to creating a medical ganja industry.

And with good reason. Industry analysts have predicted the global ganja industry to be worth from a low of US$50 billion to a high of US$146 billion by 2025.

“The conversation around cannabis in the Caribbean now needs to be about stimulating job growth and economic expansion. What you have to put on the table is an actionable set of goals that the country can benefit from in short order,” said Gordon.

SATISFYING THE THIRST FOR INFORMATION

Throughout the industry, investors are being targeted through business-specific newsletters, forums and curated services. Cannabis media authority Marijuana Business Daily recently launched a subscription service – Investor Intelligence – specifically focused on “critical analysis, insights and data necessary for success in the sector”.

Chris Walsh, vice-president and founding editor of Marijuana Business Daily, said on the website: “The demand for this type of information is growing exponentially by the day, as evidenced by a surge in investment activity. More high-level investors are eyeing or entering the space, while those who have been pumping money into cannabis companies for years are upping their bets.”

Angel investors and venture capitalists, who traditionally funded real estate and emerging technology, have been financing cannabis companies, some with great success already.

Investors are looking for companies that do more than just produce marijuana buds for sale. Like any other industry, diversification is a big selling point. They are looking at companies offering by-products such as oils, edibles and topicals – lotions and ointments. They are also keen on companies with patents and trademarks, particularly for medical treatment, as this widens the scope for growth when global adaptation takes place.

The number of licences being issued in a particular country and companies pairing cannabis with other industries, such as technology, are all strong selling points to investors.

From the other perspective, entrepreneurs also need to equip themselves with the skill set to effectively sell their business vision to potential investors. Investors want to know that the entrepreneur is competent, of good character and believes in their own brand.

Gordon said CanEx is in the final development stages of its entrepreneurial workshop, which is aimed at developing these skills.

“You have to speak the language of the investor: return on investments, risks, short-term and long-term strategy.

“There’s a ton of capital flying into this industry. But if you can’t present your ideas, you won’t secure any of that capital,” Gordon noted.

He also encouraged entrepreneurs to keep the big picture in mind and that it should be a key business pillar.

“(The Caribbean) has the opportunity in our lifetime to move from depending too much on outside help to creating more wealth for ourselves and we can do that by positively impacting so many lives with this plant. And that’s what’s so incredible about this industry,” said Gordon.