Marijuana Business Magazine - February 2018

B¬G H¬TS What is the biggest cannabis investment mistake you’ve made, and how did you correct it? The only regret I have is not speaking up sooner when I thought something was not going well in a company. This has happened a couple of times, and only once was it too late to make the changes necessary to keep the company on the right track. It is a good lesson in investing to continue to work closely with companies, focus in on the corporate governance and stay on track of their updates and key per- formance indicators. What is the best investing tip you can share? Investing is about timing, sizing and discipline. I see a lot of investors who think that this is all like “Shark Tank” – they are stunned that after the capital is deployed the companies can face issues. Business is not easy, and startups fail. This is the reality of investing. We focus on making sure the size of the investment matches the risk in terms of company stage, exit options, industry verticals, etc. Headset would be a good example of this, with our analysis on timing, sizing and discipline. We started investing in data when the industry seemed to be prepared and open to work with companies to understand consumer trends and preferences. We invested initially a smaller amount with the team when they were very early stage and have invested more as they have grown and have demonstrated traction. What sector, product, state or trend most excites you? We continue to be excited by SaaS (software-as-a-service) companies. They have opportunities to scale and support the business infrastructure of this industry. Furthermore, we see there is the potential for some very interesting exits in these companies. We are very excited to see California open to adult use and are also watching carefully, as we know this will not be a frictionless event. There are some incred- ible teams in California, and this market stands to be very interesting. The Northeast is getting increasingly interesting with the activity in New Jersey and the potential for legisla- tive action to unlock states such as Vermont or Connecticut. What is your top goal for the coming year? To continue to deploy capital to the best companies in the industry. We are raising our second fund for cannabis invest- ing, so we are excited to get that capital committed and start investing in that vehicle as well. Our target is to raise $100 million, and we are aiming for our first close of $25 million in January 2018. We will be deploying capital from the new fund after our first close in Q1 2018. ◆ Marijuana REIT Seeks $100 Million Innovative Industrial Properties – a San Diego-based real estate investment trust that acquires industrial properties and leases the facilities to medical marijuana cultivators – unveiled plans to raise $100 million through a public offer- ing of stock and/or other securities. In 2016, the company became the first marijuana business to list on the New York Stock Exchange. Innovative Industrial Properties plans to use the money to invest in property for MMJ cultivation. Baker Secures $8 Million Baker , a marketing automation software company serving marijuana retailers, has landed $8 million in Series A fund- ing, bringing its total capital raises to $11.8 million. Denver- based Baker will use the money to fuel growth in California and Washington state. Springbig Raises $3.2 Million Springbig , a Florida company whose software helps mari- juana retailers implement customer relationship and loyalty strategies, has raised $3.2 million. The Boca Raton firm, which claims more than 300 retail clients, has now raised a total of $6.3 million. Springbig will use the capital to double its workforce and establish new offices in western states. Aphria Strikes Pact to Raise $79 Million Aphria , one of Canada’s largest medical marijuana pro- ducers, inked a stock-purchase deal to raise $79 million (CA$100 million), which it plans to use to build produc- tion facilities in Canada and overseas. The Ontario-based company has also given the underwriters the option to purchase an additional $12 million (CA$15 million) worth of company stock. Organigram Closes on $45 Million Stock Del Organigram , a licensed producer of medical marijuana in Moncton, New Brunswick, closed a $45 million (CA$57.5 million) stock-purchase deal. Organigram will use approxi- mately 80% of the capital to boost the production capacity of its Moncton facility. Number of Note: $2.7 billion Medical marijuana companies around the world raised $2.7 billion through November 2017, an almost 300% increase from the same period last year, according to New York-based Viridian Capital Advisors. More than half that total, $1.6 billion, was raised in Canada via 189 transactions. ◆ – Omar Sacirbey $ $ $ $ $ $ February 2018 • Marijuana Business Magazine • 13