Brandon David of Investing in Cannabis interviewed Tahira Rehmatullah, managing director of Hypur Ventures and CFO of MTech Acquisition (NASDAQ: MTEC), which is merging with MJ Freeway. Hypur Ventures is a venture capital fund dedicated to investing in ancillary businesses that operate in the legal cannabis industry. It currently has nine investments, ranging from business intelligence to brands and media. One of the recent additions to the Hypur Ventures portfolio is Leafwire, a networking platform that fills a key gap in the market by connecting investors with cannabis businesses.
MTech is a SPAC (special purpose acquisition company) that raised $57.5 million in January 2018 and went public through an IPO on the NASDAQ. As an ancillary business, going public on the NASDAQ rather than listing in Canada allows for broader access to US institutional and retail investors who want exposure to the cannabis industry without the risks associated with federally illegal cultivation.
Its merger with MJ freeway, a leading seed-to-sale technology provider and developer of the cannabis industry’s first enterprise resource planning platform, will result in a larger holding company — with MJ Freeway, a wholly owned subsidiary, as the anchor. The new company, which will be renamed Akerna, will pursue synergistic mergers and acquisitions that are immediately accretive, with a focus on technology solutions.
Rehmatullah talked about the evolution of brands in the sector, from her time at Marley Natural in 2014 when cannabis brands were a novel idea, to today’s glut of dozens of brands across a fragmented market. The sector isn’t mature enough yet to have created brand loyalty, and there is still room for new products, supported by research, in areas like wellness.
Her advice for the audience: Stay informed and ask questions at this early growth stage, and don’t lose sight of social justice and historical issues that must be addressed as the business side of the industry develops.
To hear the whole conversation, be sure to listen to the podcast: