Marijuana Business Magazine August 2019

August 2019 | mjbizdaily.com 17 agriculture product. The move to non-flower products will accelerate that. So much of the profit potential for cultivators is reliant on very limited licensing. What are you looking for when you’re thinking about investing in a cannabis company? And what would make you think twice about investing in a specific cannabis business? I’m always a bit perplexed by this question because, ultimately, it’s about the risk/benefit analysis, and that is very specific to each deal. Many investors have hard and fast rules about the kinds of deals or founding teams they will or will not invest in. But, for me, it’s all about value. If there is “hair on the deal,” are the valuation and the terms properly adjusted for that hair? If so, it could be the perfect play. If a deal has everything just perfectly in place, you are probably going to overpay for that deal. So, the real art is in accurately assessing execution risk and making sure that that risk is adequately adjusted for in the terms. That being said, here are a few things I look out for that may be unique to me. I don’t want to invest into a company made up of all Ivy League MBAs or people from Silicon Valley or from Fortune 500 companies. They almost always underestimate how challenging the cannabis sector actually is. I also wouldn’t invest in a company made up of all people who have been in the sector for more than five years. They almost always can’t see the forest for the trees. They are too familiar with how the industry is (currently, which means) it’s very hard to imagine the future very accurately. I like teams with both groups represented. How is cannabis investment changing compared with a few years ago? Bigger checks, bigger exits, more rapid scaling, more talent, more jerks and sharper elbows. Nick Thomas reports on finance for Marijuana Business Daily. You can reach him at nickt@mjbizdaily.com. Get access to more in-depth market analysis, premium features on cannabis investing trends and monthly executive webcasts with Investor Intelligence. 1 (800) 600-3675 · fluidresearch.com Dispense 1,000 one gram cartridges/hour >1% accuracy for one gram shots Ability to handle high viscosity extracts Customizable feed systems PID controlled heat zones Introducing the CM420 DISPENSING SYSTEM Automated dispensing of oils, extracts & vaping liquids