The top cannabis venture world is exploding in growth, and that means there is a lot of opportunity for anyone looking to find success. In Canada alone, there are two dozen cannabis companies. That is publicly-traded and worth over $23 billion in combined market value. It is also believed that by 2020, the Canadian cannabis industry will be larger than the hard liquor market. By that year, it is believed that the cannabis industry will be worth nearly $7 billion, over $2 billion higher than the hard liquor market.
The Top Cannabis Venture Capital Investors and How They Can Help You Grow
As an entrepreneur, that means you are primed to get into a booming industry, both in Canada and the United States. To do so, it is a good idea to get capital. You can do this for your own savings, or through loans. But the cannabis industry can be an expensive one. It is estimated it would cost $750,000 to retrofit a store to sell cannabis and $12.5 million to construct a cannabis construction facility. This means you are going to need investors. The good thing about the cannabis market is that a lot of people want to make money from it. And that gives you a good choice of venture capital investors.
Here are some of the best to choose from:
- Privateer Holdings: This excellent company was the first to pass $100 million in fundraising in the cannabis industry. Founded in 2010, the company has now raised over $129 million and it counts several top cannabis companies in its portfolio. One such company is Leafly, which is today referred to as the Yelp of the cannabis world.
- Casa Verde: This Company has some high-profile backers, including Snoop Dog, who also happens to be a founder. The companies in its portfolio are also very high-profile, including Eaze, a company called the Umber of the cannabis industry. By 2018, the company had raised $33 million and invested $10 million in Leaflet. A company that helps to connect cannabis brands with retailers.
- Madmen Capital: With a lot of money behind it since this company is part of the Madmen Group. A company that specializes in consulting in the cannabis industry. The company has entered into a partnership with Wick low Capital and launched in 2016.
- Tuatara Capital: Since 2014, Tuatara Capital has raised over $90 million to invest in several cannabis industry businesses. These include Willie’s Reserve, a cannabis brand created by Willie Nelson. As well as Twee Win of Life Services, a company that specializes in the production of cannabis.
- The Arc view Group: Easily one of the biggest cannabis venture capital companies out there. They have invested $91 million into 135 companies.
- Canopy: For the past four years, Canopy has helped 29 cannabis companies get off the ground with their investments. Since its beginning in 2014, their portfolio has increased by 450 percent. which is good news for any companies looking to start up. The canopy doesn’t just put money into the companies. They offer advice and experience as well. They offer a 16-week start-up accelerator to the companies they invest in. This helps the people who run those companies take their idea and turn it into something that is successful.
- IAnthus: This Canadian company, which is publicly-traded that has funded several successful companies. One such company is Organic, which supplied cannabis to snowboarders in the ski-town of Breckenridge. With its market share there. The company made $4.4 million 2016 with 30 percent profit margins. IAnthus came in and bought the company for $4.375 million. Which included a 12,000 square-foot facility to grow cannabis.
- Poseidon Asset Management: When the founders, who are two brothers, lost their father to a painful form of cancer. They saw the need for medical cannabis. He was unable to medicate with cannabis because of the societal stigma that often comes with use. In 2013, they founded the company as a cannabis hedge fund to help change that view. Today, they have 25 holdings across several areas of the cannabis industry.
Going to venture capitalists doesn’t just mean you go in with an idea and walk out with a suitcase full of money. You need to know what you are getting into, so you can be successful at that pitch meeting. Before you go to any of the above venture capitalists, go over these tips:
- Be passionate about what you are pitching. If you are passionate, your passion can become contagious and it can sweep other people up in it. Venture capitalists don’t invest on passion though, but it does help to show that enthusiasm. Explain what is motivating you with your venture. Why you believe in it and what you want to get out of it. Show them how ambitious you are for success.
- Tell your company story and don’t be afraid to put emotion behind it. Explain how it came to be. How the staff joined up, why it is growing and where it could be heading. This comes back to the previous point, about being passionate.
- The pitch isn’t just about your idea; it is about everyone behind that idea. From the founder of the company down to the person who gets the coffees for everyone. Shows the investors the potential of your work team. Your product or service is key. But your team needs to be right beside it, and you need to show how they can help take your business to the next level with funding.
- Don’t go into a pitch meeting saying you need $500,000 to “start a pot shop”. You need to be clear what the investment is going to be used for. How will you spend the money? Will you hire more staff, or find a better location? Will the money be used for product research and market evaluation? How is that money going to translate into something better for your company?
- Get down to the numbers. An investor wants to know they are investing in something that is growing but is still in its early stages. If you aren’t an accountant, just the salesperson, then bring in an accountant. Have someone who can translate your numbers into future success so that the investors can see where their investment could go.
Good luck with your investment march!