How to create one billion dollars in value and positively impact one billions lives.
Finding successful cannabis investment opportunities today is much more complicated than it was one year ago. Ross O'Brien from Bonaventure Equity provides their entrepreneurs with more than just investment dollars. He explains to Dan Humiston about their three-pillar investment platform and why today's cannabis investor must Invest, Engage and Inform.
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Ross O'Brien: [00:01:03] We don't believe that Cannabis is an industry and the reason is because we believe that Cannabis Cannabis drive products will be in every home period and that it's a macro global trend, not a cycle as such. With any economy, there are sectors and subsectors industries.
Ross O'Brien: [00:01:19] One of the things that we try to inoculate is get out of this conversation around Cannabis industry because it creates a wedge between the entrepreneurs and the investors.
Ross O'Brien: [00:01:27] In our experience.
Dan Humiston: [00:01:30] From MJBulls Media, it's the Raising Cannabis Capital show.I'm Dan Humiston.And on today's show, how this Cannabis investment firm is accomplishing its mission to create one billion dollars in value while positively impacting one billion lives.
Dan Humiston: [00:01:59] Today on Raising Cannabis Capital, we are joined by Ross Bryan, the founder and CEO of Bonaventure Equity.
Dan Humiston: [00:02:06] Ross, welcome to the show.
Ross O'Brien: [00:02:08] Thanks so much for having me on. Big fan.
Dan Humiston: [00:02:10] Well, I appreciate you taking time out to speak with us today. You've been very active in the Cannabis space for a long time and you're involved in a number of Cannabis ventures. I just go in through your bio. You were the founder of the Cannabis Dealmaker Summit and you're on a number of boards, including Florida's 1st Cannabis Accelerator Green Ignition Ventures. Your board member on, Mexico. And this is really cool. You authored the first book on Cannabis venture capital called Cannabis Capital Hill. A lot to talk about to kick things off. Tell us about Bonaventure Equity, the Cannabis venture capital fund that you founded. What sets it apart from other venture funds?
Ross O'Brien: [00:02:53] Well, that's a great question. Thank you. And we're certainly not struggling to find ways to allocate the hours of the day with everything going on. But that's just the symptom, I think, of where we are at this exciting sector. So bottom it's your equity was founded initially to work with family offices. That's my background on their private investing. And as we directed our attention to the Cannabis sector, we realized that just writing checks was insufficient. And so we wanted to build a platform. So what sets us apart is that we have an ecosystem that's designed to finance entrepreneurship in the Cannabis sectors. So we have a mission at Bonaventure's to create a billion dollars in value and positively impact a billion lives. We do that through three things. We invest, which is our fund. We Engage, which is our event series, which you mentioned the Cannabis Steelmakers summits to bring together the best and brightest. We Inform, which is the book and some of the educational programs that we're now building around green ignition ventures. Seems like we've done a lot of short period of time, but it feels very much like go slow to go fast for us. Yeah. Before we wrote a single check, we put together an operations platform so we can provide a scalable resource to help operationally with private companies. And as you know, investing in private companies requires a lot of active involvement. So we've built an infrastructure to do that before we even set about making our first investment. And we also have a very discrete government relations team that is working on not only evaluating the regulatory environment from a diligence standpoint, but we are very actively looking in particular at the federal level of being engaged in the design of regulations going forward on behalf of our portfolio.
Dan Humiston: [00:04:28] I'm sure as an entrepreneur you can benefit from a being at your events and be having you work through introduction to investors. And I can see how that all that comes together and kind of works as one. It makes a lot of sense.
Ross O'Brien: [00:04:41] It was one of those seven year overnight successes that had been building a lot of these pillars over the years in other sectors, most of the investing I've been doing, historically speaking, health care. So it was a very easy step for us to apply a muscle memory of doing deals and health care Cannabis. And so we think it's insufficient for private companies to just be writing a check and hoping that things go well. We want to be the true value added investors of the companies, and that's demonstrated by building all of these different elements that become more than just a name on the capsule.
Dan Humiston: [00:05:12] Yeah, and it's also demonstrated by your portfolio. You've some very impressive companies. I mean, a lot of well-known companies. You I'm sure you see a ton of deals. What type of investments do you guys like to invest in?
Ross O'Brien: [00:05:24] The most recent example is The Leaf, its series that we just led. This is a company is founded by female pages who are just phenomenal, dynamic entrepreneurs. Great scientists come from botanical science and one of the first companies to map the genome of a Cannabis plant and have products in the market based on that intellectual property the they've developed. So that for us becomes a really exciting story that we think not only can be transformative for Cannabis, but as you look at the R&D and the scientific pathways, is really potentially a global player. So to meet our mandate of positively impacting a billion lives, we have to have a global lens and in everything we do, which is also why we anchored our advisory board with the former president, Mexico sent thoughts.
Dan Humiston: [00:06:07] That makes a lot of sense. Like you said, you're going to have a hard time doing it if you just focus on United States as their population grows.
Ross O'Brien: [00:06:14] We don't necessarily need the companies to be dominant overseas right now, but the companies that we invest in have an expansion plan that goes beyond either a state or the U.S. or North America. And so we look at the different pathways for that. And we just need to see that there's the opportunity to do that in the future if we build a great company today in whatever market they're planning. We have the ability in our investment to invest in anything in and around the global Cannabis economy. That's a concept that we pioneered in the book when we were doing all the research for that.
Dan Humiston: [00:06:46] And so you don't limit yourself to just nine plant touching investments, correct.
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Josh Swider: [00:07:32] We get product in from like a mother concerned finding of a pan, or during that they spent scared out of the six or six test sites. We found 60 pesticides and they're all 20 parts per million.So they're two times the legal limit of all. So this is what people are consuming when you're assuming the listed market.And it's quite scary. The biggest contamination, I would say, is pesticides.
Dan Humiston: [00:07:54] Tune in on Thursday to your Josh Weider from Infinite Chemical Analysis Labs. Now let's get back to today's show.
Dan Humiston: [00:08:03] You know, it's impossible to discuss investing it at any level without factoring in covered 19 into the equation. I know I'm putting you on the spot. But given your proximity to Cannabis, you probably have as much data as anyone. So let's start with this. What type of impact do you see this crisis having on the industry?
Ross O'Brien: [00:08:27] Sure. So we think about in a few ways that you're right. It is the number one conversation. It is the Kobe 19 pandemic and the resulting economic crisis and how the global economy is reacting and shifting and moving. We are reacting in the same way that sort of everybody else is. But we always want to have a perspective on what is the long term going to look like. And so when we think about the effects that this is having globally, there will be a contraction of capital sources. And we predict that we'll see the same thing that we do in every economic downturn, which is an explosion, entrepreneurship. And I don't expect that will be any different for Cannabis. So we think there will be a ton of companies that will be started at this time and they deserve to see the light of day. And my biggest concern is that there's not enough pockets of capital for them to access to to get through this initial phase. But that then layers into the second part, which goes back to your prior question on the types of entrepreneurs we look for, then we think that there are great companies built in economic turmoil and disrupted markets. And this is historically been the case. And the entrepreneurs that are resilient and resourceful have as much an opportunity now as ever to build great companies.
Ross O'Brien: [00:09:43] And we do think that this will be a period where we'll look back and see some phenomenal businesses that were created under duress. And so when we think about what's happening with Cannabis specifically, we look at Koban 19 at a macro level is just accelerator in some respects for things that have already been on people's radar. So let's take, for example, the demise of bricks and mortar retail. Well, a lot of that has been on that trajectory for a while. That's just now being accelerated at this point in time. And companies have to act quickly and take action. And the business that they had yesterday versus the business they can take forward tomorrow likely doesn't look the same. But it's taking those inputs and making those changes so that you can take a rightsized or a more simplistic or more focused organization going forward. And so we think it's an accelerator and Cannabis. I think it's one Cannabis is having a positive moment from a news cycle standpoint because it is deemed an essential service in a lot of states. And there's a lot of focus on the medical applications, which we think is hugely important, that you really can't have the conversation about Cannabis without including that.
Ross O'Brien: [00:10:55] And so this is a time when it's getting, you know, a lot of attention as an essential business and remaining open and anecdotally, a lot of the dispensaries even in my area. And so, you know, operators that we know talked to are seeing an extraordinary increase in revenues and seeing some momentum in working with their municipalities and their states. The second part of that, I think, is that we will see and this is everybody as investors tries to have a crystal ball. So maybe we'll memorialize this conversation, come back and revisit it. I'm predicting that we will see a lot of positive momentum on the regulatory front from the federal, state and local level. There is going to be an extraordinary demand for tax income and for revenues to pay for a lot of the stimulus and to create business growth and create jobs. So I think that you will see a lot of expedited regulatory approaches to create some tax revenue through legalizing Cannabis in certain regions where it may not be legal already. And I think that's a really, really smart way for government to embrace it and also solve a really big problem that we're all going to have to face.
Dan Humiston: [00:12:03] You know, that's a really interesting point. I don't know that anybody's made that in the show before it kind of screams out to that. There's a good opportunity for investors right now because there are a lot of states that have not passed any laws, medical or. Sure. So the opportunity for the United States, there's huge upside to this right now. If that falls through the way you make your crystal, Wellford predicts it.
Ross O'Brien: [00:12:26] Well, we'll see. But it certainly stands to reason and logic that this is something that the momentum has already been there. And the same way that poem, 19 pandemics and the resulting economic impact has had an accelerator on the downswing for certain things. I would think it would also be a accelerator on the upswing in certain markets. I think Cannabis will be one of those. And so I think that we will see some great companies that are being formed and also companies that are taking this moment to really shore up their operations to grow going forward. You know, unfortunately, it's always a survival of the fittest. A moment and there will be companies that won't make it through, but you need help you the worst thing with the two strong companies come out of this. I think, you know, the whole marketplace benefits from that.
Dan Humiston: [00:13:12] Yeah, well, I and I think this kind of rules into understanding the industry and understanding the industry's valuation really puts like family offices or individual investors at a huge disadvantage. This is so fluid. It's changing so quickly that unless you live it day to day or you write books about it, you're at a disadvantage. From an investor's perspective, can you maybe talk about some of the advantages to investing in your fund in addition to what we just talked about, versus trying to invest directly into a Cannabis company?
Ross O'Brien: [00:13:45] Yeah. So that's a great question. And so there's sort of three things to that one. We don't believe that Cannabis is an industry. And the reason is, is because we believe that Cannabis and Cannabis derived products will be in every home period. And that is a macro global trend, not a cycle has such with any economy. There are sectors and subsectors and industries within those. One of the things that we try to inoculate is get out of this conversation around the Cannabis industry because it creates a wedge between the entrepreneurs and the investors in our experience. So if we can look at and say, look, what we're really talking about is just investing in foundational businesses. How do you evaluate through the entire opportunity set what the right fits are for you as an investor? And what are those metrics and dynamics of those companies that are going to give you the highest probability of success? And the reason we set up a fund is because of the incredibly complicated and shifting regulatory environment in Cannabis. It's extremely difficult to be a deal picker for us and our investors. We don't want to be deal picking. You need to build the diversification within a portfolio. And we're just at the early stages of building that out and proving out that thesis right now.
Dan Humiston: [00:14:52] Like I said, it's very difficult for individual investors right now to pick winners. It's so complicated. Before we run out of time, talk about your book just real quickly. Where can we get it? Just give us a little overview so our listeners can get a copy.
Ross O'Brien: [00:15:06] That's great. Thank you. So the book's called Cannabis Capital is published by Entrepreneur Press. So it's available for sale wherever books are sold from Amazon to Barnes Noble. You can also find more information on my Web site and some blogs and things like that.
Dan Humiston: [00:15:20] And we're going to have all of Ross's in about venture equity information in the show notes. There'll also be an MJBulls.com Ross. I wish we had more time. There's so much to talk about, but I appreciate you being there. Can you can you promise you'll be back on?
Ross O'Brien: [00:15:34] Absolutely. I was just going to say that I'd love to do it again. Really appreciate what you guys are doing and try to pay close attention to what you're up to and what you're tracking. So would love to do this again.
Dan Humiston: [00:15:43] Thank you. Look forward to it.
Dan Humiston: [00:15:47] Today's show was made possible by the generous support of our sponsors, like all 36. The country's premiere block chain payment processing platform that's providing dispensaries and its customers with a safe and secure payment option other than cash. To learn more. Go to ULP 36 dot com. Today's podcast was produced by MJ Bles Media.
Dan Humiston: [00:16:08] The industry's premier Cannabis podcast network with original music produced in part by Jamie Humiston. I'm Dan Humiston and you've been listening to the Raising Cannabis Capital podcast.
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