Of all the choices cannabis investors make as they consider where to place their bets, few are more important than the deals they turn down, according to Codie Sanchez, a partner at early stage investment funds CS Ventures and Magma Partners.
“In investing, you have to say no to 100 times more deals than you say yes to,” Sanchez said. “Most won’t succeed.”
A former mutual fund manager at Goldman Sachs and consultant to firms including Facebook, Apple and Amazon, Sanchez is a featured speaker on Wednesday at MJBizCon in Las Vegas.
Recently, she shared her leading investment strategies and insights with Marijuana Business Daily.
Where are your top cannabis investments focused right now?
I have investments in Cresco Capital, BlueBonnet Ventures and I’m most involved in the food and beverage space.
What sectors or trends are you most excited about?
There is a growing number of well-established companies that are asking not “if” but “how and when” they will need to add some sort of (cannabis) component or derivative to their product line.
It’s moving from the back to the front of everyone’s mind – from coffee companies, to beverage to performance foods and a lot more.
It’s going to be fascinating to see what comes next.
What’s your major piece of investment advice?
My best investment is always in knowledge. Sounds cheesy, except it’s absolutely true.
I’m not interested in (being) lucky. I’m interested in repeatable processes and insights to generate consistent returns.
I’m really big on the people component. Anytime I consider a new investment, I first go to the people in my network to see if they’ve made similar investments. Then I look at the team.
These are complex, cash-intense businesses. Anything I’m investing in is because the team is really solid.
What’s your top advice for operators?
Raise while the money is easy, because it will not always be easy.
If you don’t have 18 to 24 months of capital to grow, I would start thinking about that raise.
You have to consider what’s going to happen to your product when a correction happens, because it’s going to happen.
What drew you into cannabis?
I started looking at cannabis not as a recreational drug, but as a medicinal alternative.
My significant other is active-duty Special Operations Forces, and we back a nonprofit that’s focused on helping veterans get off the opioid cocktail and look at alternative solutions.
To think we might be able to combat PTSD (post-traumatic stress disorder) and TBI (traumatic brain injury) with a plant like cannabis – to bring families together and to bring soldiers truly home. That is a cause worth fighting for.
This interview has been edited for length and clarity.
Lisa Bernard-Kuhn can be reached at firstname.lastname@example.org