Marijuana Business Magazine July 2018

B¬G H¬TS Q What’s a cannabis investment you wish you had made, and why? A Mary’s Medicinals, founded by CEO Lynn Honderd. Lynn has created a full line of wellness cannabis prod- ucts. She has expanded her line to Mary’s Nutritionals – an impressive lineup of CBD products in a variety of form factors. Lynn founded Mary’s Medicinals in 2013 as she saw the opportunity up close – being both a Colorado resident and involved as a finance profes- sional with a line of wellness vitamins. She bootstrapped the company in the early days, and it is now distributed in 10 states – impressive and hard to do. She contained the amount of financing and had reasonable valuation and is now at an attractive top- line revenue run rate. Q What’s your top tip for judging the credibility of valuations? A The single most important metric for a proper valua- tion is the forward progress and vision for scale of the company. I always ask these important questions: • What is the status of the product or platform? Is it built? • Are there any customers yet? Has one customer paid $1 for this product, further confirming customer interest? • Is the team in place? What are the qualities and capabilities of the CEO? • Does the company have a “go-to-market plan” in place? • What does the financial plan look like in terms of revenue, operating expenses and pricing model? • What is the revenue build over time, and has the company figured out the revenue drivers? • What is the future exit and possible liquidity of the company? It is important to understand what the future cash-on-cash returns might be – and if they are not convincing, it is important to walk away. Q What products, states or sectors are you most excited about? A I am enthusiastic about the agritech, infrastructure and software plays in cannabis. If you look at the amount of funding that is pouring into the cannabis industry, investors are funding license holders for cultivation and retail. ​These businesses need the best practices, products and services that will help them scale. This includes next-generation seed-to-sale platforms, the order-entry platforms, the sensors, the lighting, the water systems and extraction companies. There is much innovation happening in these segments, and I am looking at these companies on a daily basis. ◆ iAnthus Lands $50 Million Investment Multistate cannabis company iAnthus Capital Holdings secured a $50 million investment from Gotham Green Part- ners, a marijuana-focused private equity firm based in New York. Net cash proceeds to the firm are roughly $46 mil- lion, after various fees and structuring costs are deducted, the company said. New York-based iAnthus said it believes the investment is the largest to date by a single investor in a publicly traded U.S. cannabis operating company. It will use the money to repay a $20 million one-year note, build out its New York and Florida operations and expand into new markets. The company owns and operates cannabis cultivation, process- ing and dispensary facilities in six states. Medical Cannabis Firm AltMed Raises $35.4 Million Alternative Medical Enterprises, a multistate medi- cal marijuana producer and dispensary operator, secured $35.4 million in a private placement financing from Pennsylvania-based Mainline Investment Partners. The investment is intended to allow the Sarasota, Florida-based company to launch a major expansion in the United States and internationally. Cannabis Software Developer Pulls in $17 Million Green Bits, a compliance software developer for the can- nabis industry, landed a $17 million investment led by New York-based Tiger Global. The raise marks a big win for the Silicon Valley startup. Tiger’s investment portfolio boasts a notable roster of companies, including Facebook, Amazon and Netflix. Number of Note: $12 Billion Canadian cannabis stocks fell 40% in the first quarter of 2018, after peaking in January. The declines delivered a loss of nearly $12 billion (CA$15 billion) in market capitalization for the Canadian Marijuana Index, a basket of the leading cannabis stocks operating in Canada. ◆ July 2018 • Marijuana Business Magazine • 13