One of the better attended panels at the National Cannabis Summit in Denver was yesterday’s “Opportunities for Accredited Investors to Invest in Private Cannabis Startups.” Brendan Kennedy, the CEO of Privateer Holdings, gave a broad summary of the company, which has raised $82mm from investors and has deployed it into Leafly, Canadian licensed producer Tilray and Marley Naturals. Kennedy discussed that the first $7mm (2013) was the hardest raise in his life. The company’s $75mm round earlier this year had a $1mm minimum, though Kennedy said that several investors teamed up to invest together through LLCs. Kennedy said that Privateer has other investments beyond the three that it discloses and intends to make 4-6 more investments in brands in the coming years. He described an intense hands-on management style at the onset that evolves to more autonomy at the unit over time.
Dooma Wendschuh, founder of ebbu, which is focused on distilling predictable cannabis products, followed with a more detailed presentation of his company, which is based in Colorado. He explained how out-of-state investors are able to invest in the company through convertible notes. Wendschuh discussed the quality of his team, which includes accomplished entrepreneurs and engineers, the big investment in its lab and the recent ramp in revenues. He touched upon the company’s successful capital raises and suggested to others looking to raise money do due diligence on potential investors. He said that he begins by typing the potential investor’s name into Google along with the word “scam”. Kennedy echoed Wendschuh’s suggestion to get to know investors better before taking their money.
