By John Schroyer
Gideon Murray spent time as an investment banker, a business development executive, a real estate investor and an English teacher before becoming the chief executive officer of a medical marijuana dispensary in Colorado.
Now, he’s getting into the edibles business.
Murray is seeking investment capital for his latest company, Sweet Seed Farms, which plans to begin selling high-CBD, low-THC products soon.
He certainly seems to be on the right track. Murray participated in a mock investment pitch contest at the Spring Marijuana Business Conference and Expo in Chicago last month and wound up taking home the trophy.
Murray wants to focus much more on the medicinal side of cannabis than the recreational. He has good reason to do so: Based on his experience in Aspen, Colorado, there’s a huge and untapped market for quality CBD products.
Murray spoke with Marijuana Business Daily after winning the pitch contest about his vision of the future of CBD products, how he plans to make his business work, and what he’s found has appealed to potential investors.
What makes you think the market for CBD products can eventually rival the market for high-THC infused products?
There’s more and more demand from patients asking about CBD. And THC has been bred so high into the plant, that nobody really has a firm understanding of CBD and the potential benefit there.
You also see all these states passing laws to allow Charlotte’s Web, which is obviously a high-CBD, low-THC strain. I think that there may be a lot of states that are going to allow for CBD products well before they allow for high-THC products.
How did you come up with this business idea? Was it just from working at the Aspen dispensary and realizing the current industry couldn’t meet the demand for CBD products?
Being involved with the dispensary, I saw that the competition was severe, and the real way to have great longevity and profitability is to differentiate yourself.
To do that, you have to have some science and unique products behind you. When I met my partners, who were working on high-CBD strains, I realized that this was incredibly powerful from a breeding perspective, because they had not only high-CBD, low-THC, but also high-yielding plants.
And from a medicinal standpoint, I think there’s a real opportunity. Being someone who speaks to investors quite frequently, the big money really wants to get into the medicinal side of cannabis. They’re not really interested in doing dispensaries, grows, and edible products with high THC.
How long do you think it will be before CBD products catch up to THC?
I think it’s going to be sort of state-specific. In Colorado, it could happen fairly quickly, maybe in the next couple of years. I think once that happens in Colorado…the ability could be there for companies like ours to expand into other states.
What are some of the obstacles you’ve encountered as a new infused product manufacturer in a state like Colorado, which is a fairly established market with a good number of competitors?
I don’t see anybody competing on a high-CBD level. I see a lot of THC. And quite honestly, I’m not impressed with the products that are out there, because they’re all high-fructose corn syrup-type sugary products, and very few of the offerings out there are healthy.
The obstacles, honestly, are getting investors. I’ve been through the ringer getting licensing with the state and local authorities. If we can find an investor who’s willing to take the sort of operating capital/equity piece, that’s the tough one. There are very few people who are willing to take the risk.
But I think that risk is fairly nominal compared to the potential upside.
What kind of advice can you offer to companies pitching investors, based on your success at the Pitch Slam in Chicago?
From what I saw from our competitors, I think one of them didn’t fully understand the cannabis market. So obviously understand your market.
Also, a lot of it went down to nerves. Some people went too fast and left people in the dust, and others didn’t practice enough. I spoke to GreenBroz who won in November, and they just said, practice, practice, practice. So I did that for months.
What’s your sense of the overall climate for investing in cannabis companies? Have you found any particular approaches that work or don’t work?
I think investors are eager for cannabis companies that have a real level of professionalism, and our team is very dynamic. We have a master herbologist, we have a doctor, we have people who have been breeding for half a dozen years, and my background in business and banking.
There’s more and more professionals coming into the industry. So investors are looking for that business sense.
I keep hearing over and over again that investors would rather have a good team with an average idea than a poor team with a great idea. So if you have a great idea and a great team, that helps a lot.
John Schroyer can be reached at [email protected]