a photo of women who might work in a cannabis business

Cannabis Businesses: The Future is Female

Last week I attended the MJBizConNEXT conference in New Orleans for cannabis entrepreneurs and professionals. This was my first marijuana
conference and I wasn’t quite sure what to expect. The structure was the same as other conferences I’ve been to, keynote speakers and specialized sessions, and of course networking. But what made this one different was, I was surrounded by other professionals who are in my industry—cannabis. It gave me much needed context and perspective on what’s going on in North America, other than my microcosm of West Michigan.

One overwhelming topic from the conference was the importance of women in cannabis businesses.

Irie Selkirk

Irie Selkirk, with Emblem Cannabis in Ontario, gave a great presentation about engaging not only female consumers, but female leaders. She thinks it’s crucial that we establish an industry with strong female leaders, and I couldn’t agree more.

According to a 2015 survey from Marijuana Business Daily, women held 36 percent of leadership positions in the cannabis industry. MJBiz conducted an updated survey on the topic in August 2017, and the number of women in leadership roles had dropped to 27 percent of executive roles. Women need to continue to not only represent in this industry, but to lead this industry. And if we don’t want to see continued drops in women leadership we have ensure that women have power and voice in this industry.

Ms. Selkirk reflected on her first cannabis conference and how she and other women there felt left out. They felt more comfortable sitting outside the building to network, than the expo floor. This brought up a great discussion about how women feel outnumbered on the expo floor, and how men (the vast majority of the vendors are men, with a few booth babes) interact with them. Several of the women in the session felt intimidated by the overwhelming presence of men on the expo floor and didn’t interact as much as they normally would. Ms. Selkirk encouraged women to speak up and take control of what you want to accomplish in cannabis. If you can’t find what you want, create it. Can’t find other women in cannabis to network with? Create your own network. Want a more balanced expo floor? Get some booth space. Make your voice heard and lobby for change.

Kevin O’Leary on ABC’s “Shark Tank.” (Bob D’Amico)

The keynote speaker was Kevin O’Leary from the hit TV show Shark Tank. Mr. O’Leary, or Mr. Wonderful, as he’s fond of calling himself, said he prefers to invest in women-led businesses because he gets better returns. O’Leary found that about 95 percent of the women-led companies meet their financial targets, compared with just 65 percent for businesses with male leaders.

He has a couple of theories about why female-led businesses outperform male-led ones:

  • Women are better at time management
  • Women set more achievable goals

He also talked about how when goals are achieved, company morale goes up, which can help create a great culture, which obviously leads to less employee turnover.

In short, his largest returns have been from women-led businesses.

Women—we make up over 50 percent of the US population, yet according to the Institute for Women’s Policy Research, we made only 80.5 cents for every dollar earned by men, a gender wage gap of 20 percent.

The cannabis industry represents the future—a chance to enter a growing industry with relatively low barriers. It is an opportunity to help make medicine available to people who desperately need an alternative to opioids and other over-prescribed drugs. And we have a chance to shape the future of this industry into a more equitable and inclusive environment, where women can make their mark, and open doors of opportunity for future generations.

After all, the future is female.

reading glasses and some content for a new marijuana business that might need a cannabis investor

How to Win Over a Cannabis Investor: What Entrepreneurs Need to Know

You’ve got your cannabis startup going: the license is in process, your business plan completed, marketing plan written, site plan done, security and operations are all there. Things are looking good, except for the money part. You need a cannabis investor or two to help make it happen.

Before You’re Ready to go to The Dance, Make Sure You Know The Steps.

We talked with Eric Seifert about the relationship between investors and cannabis entrepreneurs and what startups need to know when seeking an investment partner.

eric siefert connects cannabis entrepreneur with cannabis investorsEric has been working with investors and startups outside of cannabis for a decade at the Michigan SBDC and since leaving the SBDC has been helping bridge the funding gap in the cannabis space. His company, Left Coast Capital works with investors looking for solid businesses, in cannabis and other businesses as well. Here are ten things Eric says cannabis entrepreneurs need to know before opening themselves up to an investor.

1)   If you know how to grow marijuana, but don’t know much about business, find a partner who does. “Investors look for business sense and experience.” Having a passion for cannabis goes a long way, but so does the idea that you will succeed in business. “If you need to, bring in someone to help your business, to supplement what you really don’t know or what you recognize as a weakness. Show how you can mitigate that.”  You need a solid business plan and it’s smart to give an investor several scenarios for outcomes—one that’s modest, another that shows what you believe to be reasonable growth and another that blows the roof off of all expectations of how the business will grow if things go well.

2)   One of the hardest parts for cannabis entrepreneurs is that they don’t have the kind of documentation that other businesses might have as proof of prior success. “Even a caregiver can show what they’ve done already and how they’ve tracked income and expenses. When you’re scaling up a business, you need to point to your past success, even if it is just a year or two.”

3)   Find great legal and accounting representation. “Compliance is going to be a major issue, if you successfully launch, but then are audited and shut down, that will make for a dissatisfied investor. You need to have your attorney draw up investment documents that protect you.”

4)   You’ll want to work with an accredited investor, someone who can produce a signed affidavit that they have at least $1 million in net worth, an annual income of at least $200,000. It documents that they are an SEC accredited investor.

What a Cannabis Investor Wants From You

5)   Every potential cannabis investor is looking for one thing: making more money than they might in the market. “In your business plan and pitch deck, you need to be able to show profits that are greater than the stock market.” Investors want to get their money back in about 3-4 years and they’ll want a portion of the profits beyond the investment. “They want a big return because they’re taking on so much risk.”

6)   Most cannabis investors want something beyond a return on their investment, and you should expect they would negotiate a percentage ownership of your company for the long or short term. “Investors tend to like hard assets, so the first lien on your building might be an option. If there’s a failure, the investor has something to sell to recoup their losses.”

Show the Investor Your Passion for Cannabis

7)   The entrepreneur, rather than the cannabis industry is where an investor will focus his or her attention. “Investors look for people who are in business for something bigger than making money.” They want to see a passion for the medicinal value of the plant, either personally or for a family member, so make sure you have a relatable story.

cannabis investors want to know how you'll handle money, this is an image of a lot of money8)   You must be able to talk about how you’re going to handle cash and mitigate the risk involved with it. “Investors want to know that their investment won’t be lost at gunpoint. Know what you’re doing to handle cash and security.”

9)    Create a great pitch deck and practice your presentation. “No more than 20 minutes from start to finish, followed by 20 minutes of Q&A.” Investors don’t need to hear every detail about your business—don’t drown people in details until they ask for them.” Investors who want more will ask for it. Stick to the regional view when you’re pitching—don’t worry about national picture yet. “Until cannabis is legal across the U.S. there’s not much point in spending time talking about it. You need to get the investor’s attention, high-level summary information.”

10)  Don’t underestimate your knowledge and skill in the cannabis marketplace. “You need to show passion and expertise for the industry.  It’s an 8 or 9 on the scale of importance.”