Marijuana Business Magazine November December 2018

Q What’s your top tip for judging the credibility of valuations? A For us, right, wrong or indifferent, we have to get a third party to sign off on it and say, “Yes, this com- pany is worth $50 million,” or whatever the number may be, because any regulating body could ask us how we came up with this number. We have an “out” from that perspective. My top tip would be to find what appears to be a comparable company – whether it’s within the industry or if you have to branch out a bit. If a similar company in another industry is worth $20 million, and you consider that cannabis is new and hot, you can add a couple more multiples to the valuation of the business you’re looking to acquire. And if it can be determined by revenues, then you can just place mul- tiples on those, which is clearly more straightforward. Q What products or sector are you most excited about? A We’re excited about the CBD market, and there are some new game-changing technologies in the (CBD) biotech space that we’re excited about. Another vertical that excites us is the implementation of technology such as (seed-to-sale) tracking through the blockchain. There’s a marriage and crossover between some of the supply-chain functionality and tracking that blockchain can create to make it easier for cultivators all the way to consumers to know how, where and when products were sold, created and everything else. Q What’s one of your top investment goals in the next year? A We want to acquire a company that has anywhere from $10 million to $15 million in revenue and hope- fully doing $500,000 to $1 million in EBITDA. Our focus is all on ancillary markets – lighting supplies, materials for cultivation buildouts and really all the ancillary things that it might take to run a cultivation operation. We’re looking to acquire companies that are well established in that space. ◆ This interview has been edited for length and clarity. C1-Series Mobile Cart • WATER: Eliminates pathogens while adding oxygen (ozone’s only by-product) • WASTE WATER: Contaminant control and BOD/COD reduction • SURFACE DISINFECTION: Eliminates harmful microbes on all surfaces • INDOOR AIR: Controls mold, mildew, and odor ClearWater Tech Ozone Sanitation Systems are the most effective and sustainable tools available to manage multiple issues within a grow facility. Providing superior sanitation of the water and air, ClearWater Tech’s systems clean and sanitize surfaces, equipment, recycle water for reuse, and control odor in and around the facility. 805.549.9724 | 800.262.0203 sales@cwtozone.com | cwtozone.com ClearWater Tech, LLC - Since 1986 SANITATION SOLUTIONS FORCANNABIS GROWFACILITIES PROVIDING ALL OF YOUR SANITATION NEEDS ClearWater Tech, LLC CIP 3000 Visit ClearWater Tech at BOOTH 1700 November 14-16, 2018 Las Vegas Convention Center Keep Your Grow Facility Free From Harmful Pathogens and Meet All Regulatory Guidelines November/December 2018 • Marijuana Business Magazine • 13