Cannapreneur Archives - Green Market Report

Debra BorchardtOctober 9, 2020
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It’s been a long and winding road for full legalization in the state of Maine, but that is ending. Sales are set to begin on October 9. Maine’s ballot initiative measure to legalize marijuana for adults and establish a regulated marijuana market passed back in November 2016, along with three other states — California, Massachusetts, and Nevada. Maine is the last of those states to launch adult-use retail sales. 

Marijuana has been legal for adults 21 and older to grow and share in Maine since January 30, 2017. The legislation to legalize adult-use cannabis was signed into law by Gov. Janet Mills on June 27, 2019. Maine’s adult-use marijuana regulation law can be found here.

“The delays were unfortunate and unnecessary, but in the end, we’ve succeeded in replacing prohibition with a thoughtful policy that legalizes, regulates, and taxes marijuana sales for adults 21 and over,” said Marijuana Policy Project Deputy Director Matthew Schweich, one of the leaders of the 2016 campaign.

The new law states that adults 21 years of age or older with a valid ID will be able to purchase up to 2.5 ounces of a combination of marijuana and marijuana concentrate that includes no more than five grams of marijuana concentrate. It remains illegal to consume marijuana in public spaces. Maine municipalities must opt-in to the adult-use program by locally allowing for marijuana establishments.

Brian Lauvray, Head of Development and Strategy with the cannabis consulting company MMLG has been in the state assisting companies. He said,”Maine represents a very reasonable entry point for companies looking to move to the east coast. While it’s highly unlikely that the state will ever be a Colorado or California from a sales and revenue standpoint, Maine offers operators numerous tourist-dense markets, one substantial year-round market in Portland, plus towns such as Lewiston and Bangor.” He noted that only 10% of municipalities have opted in thus far. “Operators who get in now will have the leg up on future licensing opportunities as new markets come online in the Pine Tree State,” he added. 

Lauvray also pointed out that Portland is expected to be Maine’s largest market with about 540,000 in the metro area and that once the program gets established it will serve as a waypoint for tourists going further “down east.” “It really will be a win for any operators looking to gain an east coast foothold. However, Portland applicants will almost certainly miss the deadline for state licenses being awarded starting next month in advance of recreational sales opening on 10/9.” (Portland’s city application deadline is 8/31.)

In addition to just making the license deadline, Lauray said that when state licenses begin to be handed out in September and the official date for rec-use sales opening, there’s a possibility that many retailers may have limited supplies for consumers initially. “So, for consumers, operators and investors, a hefty spoonful of “expectation management” may be the order for this fall. But in the long term, Maine will be a healthy market.”

Wellness Connection of Maine (WCM), the state’s largest medical cannabis provider launched HighNorth, a Maine-centric lifestyle brand designed to meet the future needs of Maine’s recreational cannabis market. WCM created HighNorth to bridge the transition between Maine’s existing medical market and the future adult-use market.

 “Maine is known for its pristine waters, open air and majestic coastline – our goal with HighNorth was to embody the State’s brand within the cannabis industry,” says Charlie Langston, Managing Director of WCM. “We hope that locals and tourists alike think about HighNorth when they hike Acadia, ski a Maine mountain or plan a whitewater rafting trip.” 

 “Soon enjoying cannabis will be as normal as having a beer,” WCM Marketing Manager Susanne Pingree says. “Maine’s microbrewers have set a strong example of how colorful, fun and savvy branding enhances the customer experience –  and that’s what we want our customers to feel too.” 

It is clear that the Maine market is one for companies that have a long-term vision. Cannapreneur Partners Co-CEO Todd Sullivan said, “Maine’s upcoming adult-use program is not without its hurdles. It has taken roughly four years to launch since residents voted for legalization. Reasons for these setbacks include opposition from the former governor, opt-in decisions by municipalities and local authority issues, residency requirements, and of course, the COVID-19 pandemic. In addition to these obstacles, litigation at the state level and in Portland (Maine’s largest city) continued to throw wrenches into the mix. Our hope is that Maine will work to decrease many of the current regulatory barriers. These regulations disproportionately impact entrepreneurs in the state while favoring large MSOs that have the financial means and time needed to obtain licenses.”

Sullivan went on to say, “From an investment point of view, we see a lot of potential in Maine’s cannabis marketplace given the launch of their adult-use program and the low operating costs, although close attention to the rapidly changing landscape is necessary. In major hubs such as Portland, many businesses quickly invested in store locations and have been paying rent while waiting for the program to commence. The long wait, plus license caps, local authority issues, zoning laws and a license scoring system that has historically favored big players create some unique pain points within the state’s growing industry.”

“Maine was a tough campaign,” said MPP’s Schweich. “We overcame a difficult signature drive. Then we had to fight in court to ensure qualification for the ballot. It was a real team effort that culminated in a well-earned victory on Election Day.”

 


Debra BorchardtJune 29, 2020
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It’s time for your Daily Hit of cannabis financial news for June 29, 2020. 

On the Site 

Aurora Cannabis 

It’s been a rough road for some of the OG’s of the cannabis industry. Today, Aurora Cannabis (NYSE:ACB) said its Co-Founder Terry Booth had retired from his role as Director of the Company, effective June 26, 2020. Mr. Booth was the Chief Executive Officer of Aurora from December 2014 through February 2020 and served on Aurora’s Board of Directors since December 2014. 

According to Wikipedia, Aurora was founded in 2006 by Terry Booth, Steve Dobler, Dale Lesack, and Chris Mayerson. Booth and Dobler collectively invested over $5 million of their own capital. The founding group secured a 160+ acre parcel of land in Mountain View County, Alberta, where they established Aurora’s first facility. The company received its license to grow cannabis in 2014, making it the first cannabis producer to obtain a federal license in that province. The company went public in Canada in 2017 and then in 2018 began trading at the New York Stock Exchange. 

Cannapreneur 

Green Market Report CEO Debra Borchardt: 

Kevin Harrington has recently joined with Cannaprenuer Partners, a company that is investing in cannabis companies. Kevin, you’ve not been in cannabis, but you have certainly been in the corporate world and businesses. You’ve been helping so many companies get started or grow. What at this point prompted you to get into cannabis and specifically choose to join up with Cannaprenuer? 

Kevin Harrington: 

Great question. Thank you. If I go all the way back, I’ve been a product guy for many years. 38 years ago I was creating infomercials and As Seen on TV, and doing some fun things with Jack LaLanne and the juicer, and George Foreman, and Tony Little, and Billy Mays. That’s been my previous life, and taking a lot of pitches. Of course, then original Shark on Shark Tank, being able to take pitches on national television, that was pretty cool. But one thing Shark Tank never did, they never took pitches about cannabis. Shark Tank is on ABC Network. It’s the Disney Group and so cannabis was not their cup of tea. I don’t know if they’ll change that at some point, but most of the entrepreneurs and judges and Sharks are in cannabis investments, O’Leary and Cuban, et cetera. 

 In Other News 

Innovative Industrial Properties, Inc. (NYSE: IIPR) announced today that it has commenced a public offering of 1,800,000 shares of its common stock. The company said it expects to grant the underwriters a 30-day option to purchase up to an additional 270,000 shares of its common stock. The company said it intends to use the net proceeds from this offering to invest in specialized industrial real estate assets that support the regulated cannabis cultivation and processing industry that are consistent with its investment strategy, and for general corporate purposes. 


Video StaffJune 29, 2020

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Green Market Report CEO Debra Borchardt:

Kevin Harrington has recently joined with Cannaprenuer Partners, a company that is investing in cannabis companies. Kevin, you’ve not been in cannabis, but you have certainly been in the corporate world and businesses. You’ve been helping so many companies get started or grow. What at this point prompted you to get into cannabis and specifically choose to join up with Cannaprenuer?

Kevin Harrington:

Great question. Thank you. If I go all the way back, I’ve been a product guy for many years. 38 years ago I was creating infomercials and As Seen on TV, and doing some fun things with Jack LaLanne and the juicer, and George Foreman, and Tony Little, and Billy Mays. That’s been my previous life, and taking a lot of pitches. Of course, then original Shark on Shark Tank, being able to take pitches on national television, that was pretty cool. But one thing Shark Tank never did, they never took pitches about cannabis. Shark Tank is on ABC Network. It’s the Disney Group and so cannabis was not their cup of tea. I don’t know if they’ll change that at some point, but most of the entrepreneurs and judges and Sharks are in cannabis investments, O’Leary and Cuban, et cetera.

Kevin Harrington:

I finally said to myself, “This is going to be a $20 billion industry. I need to get in it.” And I didn’t want to invest personally because I didn’t have enough knowledge about cannabis like I have about the housewares industry or the hardware industry. But cannabis is new, relatively new in those terms, but it is an opportunity that I thought, with Cannaprenuer, they’ve got years of experience in investing in cannabis companies and they know what is hot, what to look for. So I thought I want to put my efforts with a group like Cannaprenuer, and it’s worked out great so far.

Green Market Report:

Is there a specific criteria that the company is looking at? Are they okay with plant-touching. Are they really looking at more ancillary? Is there something specific that they look for or is it really strictly management and numbers?

Kevin Harrington:

So, I mean, at the end of the day, as folks investing in and needing a return on our investment, it does boil down to numbers, sales, profits, all of that, because, yes, there’s only so long you can be in a play and an investment where there are no profits. But I think that we look for new technologies, we’ve got an AI investment, we’re in the vending machine business. So I think new ways to sell, to distribute, we’ve got dozens of deals that we’re looking at right now. So, I have a saying, “I look for something that is unique enough and something that solves a problem, but it’s unique enough such that the problem it solves is not being solved by any other product or service already in the marketplace.” So I think that’s something that’s powerful, is that unique aspect of the product or the service.

Kevin Harrington:

But from my side, I’m, again, a product guy so I’ll be looking at products and we’ll actually be putting on Shark style events where we’re going to go in and we’ll take pitches. Now, we could do it virtually right now, but eventually, we may be able to do these live in person because this is something that coming off of Shark Tank I know that there’s a lot of excitement around hosting a pitching event. People love to pitch to the Sharks type of thing, and so we’re going to be doing that to bring more deal development, more product development and projects that are going to be coming to us.

Green Market Report:

I’ve certainly been to Tech Crunch Disrupt and I will agree that the pitch contest is super exciting and that room is filled with hundreds of people. So you look at a lot of companies, as you mentioned, you’ve got a long history of looking at companies, and I would feel that you’re able to dissect and drill down very quickly what a company is doing right and what a company is doing wrong. What are some of the flaws that you see keep getting repeated by cannabis companies in some of these pitch decks that are crossing your desk?

Kevin Harrington:

Well, I think part of the challenge is a lot of times their biggest flaw that I see is the customer acquisition strategies and the marketing plan. I think too many times people, the entrepreneurs, they have this vision and they’re so excited about it but they don’t necessarily know what the rest of the market is also working on things similar. But, at the end of the day, my industry, when Tony little showed me the Gazelle, it’s a $500 piece of equipment, I had to figure out, how can I acquire customers for $100 to $150? And whether it be TV, radio, print, internet, whatever, that’s the focus. And so there are digital plans, there are marketing plans, and TV plans, and all of these kinds of things that are so important about getting the customer and then improving the lifetime value of that customer.

Kevin Harrington:

So those are sort of two of the things I focus on. And when I’m getting pitched, I want to know, do you have a customer acquisition strategy? And also, do you have a longterm plan to keep your customers not only happy but coming back and accelerate that lifetime value of that customer? Those are the two key things that I look at.

Green Market Report:

So that’s good information to have for these entrepreneurs before they get into the cannabis Shark Tank with you, they better know the answers to those questions.

Kevin Harrington:

Absolutely.

Green Market Report:

The big thing right now, of course, is social equity. And I’m curious what Cannaprenuer is going to do with regards to this. Women in the cannabis community have had a hard time getting access to capital, which is something that is in general, and then of course now we’re seeing a lot of attention for people of color and that has always been a hot button issue within the cannabis industry. What do you guys plan to do with regard to that issue?

Kevin Harrington:

Well, I mean, I think as a company, we have a strategy and we have only a certain amount of dollars that we can invest. It’s never just an unlimited amount. So we’d like to balance out our investing and I don’t want to have too much in, you’ve talked about plant-based, yes, we will be in plant touching type things, but it’s not 100% there. So, as I mentioned, we might do products and we might do software and AI and vending, et cetera, et cetera. So I like to diversify the investment strategies and I believe having the minorities taken care of, we want to be an outlet for women and minorities, for sure. And I think this is why this kind of Shark Tank style events, will give folks the chance to come in pitch us, because in those events, the opening pitch, we give you three minutes usually, right? We’re not going to write a check after three minutes.

Kevin Harrington:

The whole goal of that is to sit down, understand the business model, and where you’re going and how we can be a player in the business because we want to have a balanced and diversified investment strategy.

Green Market Report:

So you mentioned that there’s been a lot of change in the industry. Do you think that right now the disruptions that we’ve been seeing within cannabis, we’ve seen a lot of companies struggling financially, we’ve seen some mergers and acquisitions and a lot of movement and change going on, do you think that that presents an opportunity for Cannapreneur?

Kevin Harrington:

I absolutely do. Yes. I mean, there are companies that are undercapitalized. We’re talking to quite a few companies right now, companies that, I mean, who knew that this pandemic was going to hit three or four months ago, right? I mean, I made a couple of personal investments right before all of this, and they’re struggling because we didn’t, we didn’t plan for this. I mean, one of them was a retail play that’s having some tough times. So, obviously, retail itself is difficult. They had a little bit of a unique strategy, but, still, when everything is shut down, there’s nobody coming out. So I think that, at the end of the day, there are some people that maybe got some initial capital raised, got something up off the ground. Now, they’re out of money, they’re out of cash, and they’re not having an easy time raising.

Kevin Harrington:

So the beauty of Cannapreneur, my partners, Michael Scott, et cetera, these are folks that come from the financial communities and raising capital and understanding that side of the market. And this is what I’ve been doing for many, many years too. I use my own capital, but I also raise capital, and so I believe that we will find some great opportunities from some under-capitalized startups that have hit a point where they need some help.

Green Market Report:

Well, I am sure that the cannabis companies that are out there happy to see that you guys are in business and that you are looking to help some of these cannabis companies. Certainly, many of us could use it. So thank you, Kevin Harrington for joining us on Green Market Report and good luck with your business venture.

 


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The Green Market Report focuses on the financial news of the rapidly growing cannabis industry. Our target approach filters out the daily noise and does a deep dive into the financial, business and economic side of the cannabis industry. Our team is cultivating the industry’s critical news into one source and providing open source insights and data analysis


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