Exclusive Interview with CapStone Holdings Senior Vice President of Operations Ashley Beal
CapStone Holdings is a private family office focused on high-growth, technology-based industries. The firm supplies private capital, and it stays actively engaged with its investments. Its portfolio spans multiple industries, including cannabis. Senior Vice President of Operations Ashley Beal spoke with New Cannabis Ventures about CapStone’s investment approach and its cannabis investments. The audio of the entire conversation is available at the end of this written summary.
The Start of CapStone
The firm began as CSI Kickstart in 2016 as the investment arm of Chairman and Founder Keith Stone’s company CSI Enterprises. CSI, a fintech company established in 1989, sold for approximately $600 million in 2019. After the sale, the investment vehicle was reestablished as CapStone Holdings.
Stone brings more than 30 years of global expertise in fintech and fleet management to CapStone, according to Beal. His wife Heather Stone is also an important member of the firm’s leadership team, providing her strategic business expertise that spans different industries.
Beal first met Keith Stone five years ago, back at CSI. In her current role with CapStone, she helps to ensure the firm’s investments are fullly vetted and supported.
The CapStone team is small and cohesive, including other roles like CFO, marketing director, executive vice president and regional investment director.
All of CapStone’s capital is privately owned by Keith Stone, according to Beal. Thus far, the firm has deployed approximately $250 million, including business and philanthropic investments.
Over the past couple of years, the firm has made investments across industries like fintech, real estate, healthcare, mobility and sustainability. It has made recent investments in the City Foundry development in St. Louis, logistics company Pro-Tech Group and autonomous vehicle company Perrone Robotics.
CapStone has made three investments in the cannabis space. First, it made a $50 million investment in a Curaleaf senior loan facility. In December, the firm announced a $25 million investment in Ilera Healthcare, a division of TerrAscend as part of its $120 million debt deal. Most recently, CapStone made a $2 million equity investment in cannabis industry staffing company United Green.
The firm is focused on the medical aspect of the cannabis industry, selecting Curaleaf and Ilera Healthcare for their medical products.
Not long after CapStone made its investment in Curaleaf, the company announced a major acquisition to expand its footprint to Europe. The firm prefers near-term, high-growth opportunities. They perform a thorough analysis of every opportunity, looking not only at the numbers but also the cultural fit and integrity of the leadership, according to Beal.
When it comes to structuring investments, it depends on the individual company. CapStone does not have a set investment strategy that companies must fit. It has done debt investments, loan facilities and equity investments, according to Beal. Once the investment is made, CapStone likes to be involved in their portfolio companies’ success as the investments grow.
CapStone also looks for companies that can capitalize on its existing synergies, according to Beal. For example, United Green offers networking opportunities for the firm’s two other cannabis investments. The industry is rapidly growing and there is a need for talent to support that growth.
The Future of Cannabis Investment
The majority of CapStone’s portfolio companies are headquartered in North America, though many have international operations. The firm is primarily focused on the United States, but it is exploring opportunities around the globe, according to Beal.
In the cannabis space, CapStone will remain passionate about the medical aspect of the industry. The prospect of federal legalization likely won’t change how the firm considers future cannabis investments, but Beal does anticipate that this regulatory shift would help CapStone’s current investments and expand the firm’s ability to align with more companies in the medical cannabis space.
Positive regulatory change will help the industry to progress, but the rapidly growing industry will still experience growing pains and more consolidation. There are opportunities for companies to solve major pain points as the industry moves forward.
As CapStone considers future investments, it will continue to look at near-term, high-growth opportunities. The same key metrics that apply to any investment will be important in the cannabis space, as well as the cultural fit and leadership team of any company. CapStone is ready to leverage its resources and inject capital quickly and efficiently, according to Beal.
To learn more, visit the CapStone Holdings website. Listen to the entire interview: