Marijuana Business Magazine July 2019

Marijuana Business Magazine | July 2019 56 “Then you go back in a few months and say, ‘You remember all those things we said are going to happen? They all did. Now, let’s talk about what we think our needs are going to be going for- ward,’” Puglise said. “Now you have an investor who believes, and it’s a heck of a lot easier to raise money at that point.” Cresco regularly taps its employees to generate investment leads. When Cresco wants to raise money, executives send memos to middle managers, who then inform the employees in their departments that the company is conducting a raise. Employees also are told they can invest—as can friends and family. Cresco also provides incentives to employees who find investors, but company officials declined to say what those perks might be. INVESTMENT FIRMS HELP While marijuana companies overwhelm- ingly rely on family and friends as well as family offices for capital, attracting an established investment firm can make it significantly easier to round up indi- vidual investors. That’s something to be mindful of, should the day arrive when marijuana companies can list on the major U.S. stock exchanges. “U.S. investors want to see sponsorship. When I used to be a tech banker, tech investors used to ask, ‘Is Softbank in the deal? Kleiner Perkins?” said Hadley Ford, CEO of New York- based iAnthus Holdings and a former technology banker at Goldman Sachs. They want to know: “Who are the adults at the table, the sophisticated private investors who have done the work, vetted the management team, kept them on track going forward?” When iAnthus raised $50 million in May 2018, the multistate marijuana operator sought lead investor Gotham Green Partners for that role. “They made a lot of great investments and made their people lots of money. We needed money, but I could have gotten money almost anywhere—at that point Hustle America Sector Year Agriculture Technology 2017 2018 2019* Biotech/Pharma 2017 2018 2019* Consulting Services 2017 2018 2019* Consumption Devices 2017 2018 2019* Cultivation & Retail 2017 2018 2019* Hemp 2017 2018 2019* Infused Products & Extracts 2017 2018 2019* Investments/ M&A 2017 2018 2019* Miscellaneous Ancillary 2017 2018 2019* Real Estate 2017 2018 2019* Software/Media 2017 2018 2019* 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 10,000 11,000 Total Amount Raised (Millions USD) Source: Viridian Capital Advisors © 2019 Marijuana Business Daily, a division of Anne Holland Ventures. All rights reserved. *2019 includes deals completed as of May 17, 2019. 58 123 14 988 605 73 99 51 0 18 97 599 1,689 10,365 4,160 6 11 230 142 697 319 371 1,356 194 47 121 69 7 246 279 107 187 40