John Brecker was a co-founder at Longacre Fund Management Inc., which increased in size to have billions of dollars under management, and has since co-founded a new fund that has invested US$20 million in cannabis companies since March
Millions of dollars for cannabis-related ventures will be up for grabs this week as hundreds of investors from across North America descend on Vancouver to attend the city’s largest-ever conference aimed at cannabis investment.
The May 1-2 Arcview Investor Network event is scheduled to include accredited investors hearing Dragons Den-style pitches from entrepreneurs, but the event’s lure for many will be the chance to either hear an address from pro-cannabis Republican Rep. Dana Rohrabacher or be in a milieu where industry insiders can learn about cannabis-sector trends.
“Arcview attracts a community of members, and a group of companies that represent where cannabis is going to be in three to five years’ time,” said Sam Znaimer, who founded Vancouver-based Locarno Capital and has been to many past Arcview investor sessions.
“People who are members of Arcview tend to go to most of these meetings, and they bop around North America to go to them – Las Vegas, Chicago, Los Angeles, San Francisco, Boston, Miami, Toronto and now Vancouver.”
Znaimer has invested “several” million of his own dollars into a portfolio of 16 different private companies related to the cannabis sector, and he sits on the boards of directors of some of those ventures, including Anandia Labs.
“I’m looking for companies that are highly differentiated and have a greater component of intellectual property,” he told Business in Vancouver.
“These are typically not companies that are growing [cannabis] for themselves but are part of the supply chain, and are more high-tech.”
New York-based Rod Stephan and John Brecker told BIV that many of the 12 cannabis-sector companies that their Altitude Asset Management has since March pumped a combined US$20 million service the cannabis sector, as opposed to being directly involved in growing bud and retailing dried flower or edibles.
Before they created their new fund, the men worked at Longacre Fund Management, which had US$2.75 billion under management.
BDS Analytics is one of their new investments that service the cannabis sector. The data analysis company helps dispensary owners track customer purchases and preferences.
Its data can track, for example, what products women are buying, when they visit the store and what products are peak sellers at specified times.
“Because of federal illegality, the institutional players are not really wanting to compete in this space, so that makes it so exciting for us,” Stephan said.
His and Brecker’s goal for their visit to Vancouver is to either find partners who want to invest in their fund or to find target companies in which to invest up to US$2 million each, if those ventures meet their criteria.
“Most important for us is the operators – are they good operators?” Brecker said.
“Then, is the business scalable, or can it grow? And is the business sustainable, or do they have enough capital and infrastructure to reach their milestones?”
Magnolia Wellness CEO Debby Goldsberry is sending representatives of her Oakland, California-based venture to Vancouver to pitch investors for US$1.5 million so she can expand her operation, which retails, manufactures, distributes and provides home delivery of cannabis products.
(Image: Debby Goldsberry stands at her Magnolia Wellness facility in Oakland, California | submitted)
She wants to add 5,000 square feet to her current 3,500-square-foot location so she can expand to create a marijuana bar and a restaurant.
Goldsberry’s licence allows her to sell packaged edibles but not meals that include THC.
She would like to sell in her restaurant dishes such as ice cream.
Customers would then separately buy THC-laced nuts and chocolate sauce and then put the items on their ice cream.
“We’re coming to pitch at the Arcview conference, and it just happens to be in Vancouver,” she said, explaining why her COO and other company representatives are making the trek north.
“A lot of investors will come from around the world to the event because people like to visit Vancouver.” •
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