Marijuana Business Magazine April 2019

April 2019 | mjbizdaily.com 15 Among your portfolio companies, can you offer some insight into what’s driving success? It’s the management teams. When we make investments, we’re really investing in the execution capabilities of the core management team to be able to scale the business and vision. What are your top tips for judging valuations? Valuations are so tough in this industry, because most firms aren’t profitable. If you’re investing in a company that’s raising at a certain value based on future production, they have to be able to walk you through why this makes sense and how they’re going to execute the strategy to get there. What are some of the common red flags that cause you to pass on an investment? It’s extremely important for a management team to understand and be able to articulate what it’s going to take for them to execute their plan and how they will adapt as the business transforms over time. That’s certainly a red flag if that doesn’t come through in their pitch. You also want to make sure you’re investing with people and managers that are flexible and open to out- side advice and are coachable. What’s the biggest investment mistake you see being made in the industry? There are a lot of good opportunities in this industry, and there continues to be more every day. But you have to exe- cute some form of discipline, because you can’t invest in everything that comes across your desk. It’s a fast-moving industry, and you have to have a disciplined approach to identifying the companies that are truly poised for success. What products or sector are you most excited about? We’re still bullish on the ancillary side of the industry. Access to data and information will continue to be of interest because there’s still a lack of transparency in this industry. As the industry continues to grow, there is going to be a need for more and more information. This interview has been edited for length and clarity. 39 Norman Street, Salem, MA 01970, USA