Q&A with Codie Sanchez, founder, investor and partner at CS Ventures

Codie Sanchez

Codie Sanchez speaks from the MJBizCon main stage in November. Photo by Soliman Productions

Codie Sanchez, recently a featured speaker at MJBizCon in Las Vegas, is a venture principal at Chilean investment fund Magma Partners and head of Latin America and offshore business for First Trust in Dallas. She also founded CS Ventures, which provides investments and corporate advising to startups.odie Sanchez has advised corporate giants such as Facebook, Apple and Amazon. Now, she’s turned her attention to cannabis.

A former mutual fund manager at Goldman Sachs, Sanchez said knowledge remains the top investment tool that keeps her strategy on track.

“I’m not interested in (being) lucky,” she said. “I’m interested in repeatable processes and insights to generate consistent returns.”

Sanchez recently shared her top investment strategies and insights with Marijuana Business Magazine.

 

What’s the best cannabis investment you’ve made and why?

My best investment was in a fund, Cresco Capital Partners, a (private equity) fund in the space. Learning from an expert through diversified investing initially is always my first step for a new sector.

They say to become a good VC, you have to have $500,000 in losses. That doesn’t sound fun to me. So, instead of spending the $500K and 10,000 hours, I leverage someone who has put in the time to learn from them.

 

What attracted you to these companies/opportunities?

People. I’m a former journalist. My expertise is in asking the right questions to get to the right answers.

I always question the motivations, intent, execution ability and track record of any team. After all, an idea without execution is worth exactly what you got it for: nothing. Follow the right people, drafting on the right generational trends, and your portfolio will look a whole lot sweeter.

 

What was your biggest investment mistake, and how did you overcome it?

Being too nice. In investing, you have to say no to 100 times more deals than you say yes to, because most won’t succeed. In the beginning, I struggled to say no, or worried that I had to “get in fast.” Truth is, everyone is always raising. Most important are the deals you passed on.

 

What’s your top tip for best judging the credibility of valuations?

Valuations are rarely my top priority. It’s all about: Will they be able to execute? In that vein, past behavior is the best predictor for future behavior. Ask yourself, “Have they executed thus far?” Get referrals on past businesses and jobs. Figure out from clients how they handle mistakes. If you get on board with a business that is truly going to make it, the valuations will take care of themselves. That being said, my question is usually to the founder: … “If I want to make three, five, 10 to 50 times my return, how are you going to get me there with this valuation?” They need to show me a good answer.

 

What products or sector are you most excited about?

I nerd out on this. It’s a laundry list of names from Flrish, Harborside, Ebbu, Sea Hunter, MJ Freeway, Prohbtd to Jambo to Charlotte’s Web, oh my. I get excited about CBD and medicinal (companies) especially. It tickles me to walk into Erewhon in Venice (California) and see a latte with CBD in it—just as obvious to the locals as almond milk or an extra espresso shot. What will the future hold?

 

What’s one of your top investment goals for 2019?

My goal for this year is to put my money where my mouth is. To invest in the things that matter to us and the generations that follow. I’m completely uninterested in the next mindless video game. I’m enthralled by the companies that will better our lives and our country. My goal is to fund more of them. Isn’t that what money is ultimately for—a tool for progress?

 

This interview has been edited for length and clarity.