Today's featured Cannabis Investor is Scott Greiper The Cannabis Investor Series Sponsored by TWO12 is back for the Fourth year. This year, the Series will feature eighteen of the cannabis industry's top investors, reviewing the previous 12-months and sharing their 2022 investment strategies. On today's episode Dan Humiston is joined by Scott Greiper, President of Viridian Capital Advisors. Produced by PodConX TWO12 - https://www.two12.co/ Raising Cannabis Capital - https://podconx.com/podcasts/raising-cannabis-capital Dan Humiston - https://podconx.com/guests/dan-humiston Scott Greiper - https://podconx.com/guests/scott-greiper Viridian Capital Advisors - https://www.viridianca.com/
Today's featured Cannabis Investor is Scott Greiper
The Cannabis Investor Series Sponsored by TWO12 is back for the Fourth year. This year, the Series will feature eighteen of the cannabis industry's top investors, reviewing the previous 12-months and sharing their 2022 investment strategies. On today's episode Dan Humiston is joined by Scott Greiper, President of Viridian Capital Advisors.
Produced by PodConX
TWO12 - https://www.two12.co/
Raising Cannabis Capital - https://podconx.com/podcasts/raising-cannabis-capital
Dan Humiston - https://podconx.com/guests/dan-humiston
Scott Greiper - https://podconx.com/guests/scott-greiper
Viridian Capital Advisors - https://www.viridianca.com/
RC CI4 Viridian
Dan Humiston: [00:00:00] Today and MJ bulls. We are continuing this year's cannabis investor series sponsored by two 12 with an old friend Scott griper the president at Veridian capital advisors. Scott, welcome to the.
Scott Greiper: Dan. Thank you. You say all friend, I'll take that in the best sense of the word, but I think we, we kind of started in the industry right at about the.
same time, eight years ago. We're grizzled vets and glad to be on with you again.
Dan Humiston: Well from one grizzled vet through another it's it's, it's great. I've known you for a long time, but I've never had you on the show and I'm so yeah, I'm so glad that you could join me today because we're, most of the other guests that we have on this series are cannabis venture capital firm. Veridian is a little different to get started.
Can you explain the differences?
Scott Greiper: Yeah. So we launched 40 in capital advisors in June of 2014 there we believe we were the first [00:01:00] investment banking firm in the us cannabis. So we do want invest with banking's do in this crazy industry. We are advisors to our public and private cannabis companies helping to develop strategy, develop financial controls, build boards of directors.
So there's real governance kind of institutionalize our cannabis clients. And then we go out and we raise required growth capital or acquisition county. Either in the form of equity or debt been very successful with that over the years. And we act as MNA advisors buying and selling cannabis companies and giving our cannabis clients and investors the opportunity to exit and monetize their position.
So we're a traditional investment bank. We were very early in the space. And we've been fighting the fight now in our eighth year. It. Fortunately it developed a very good track record making money for our investors and executing on assignments for our company clients.
Dan Humiston: Oh, I'd say , [00:02:00] you're very well known within the industry. I want to take, different services that you provide your clients and kind of break them down. And I'm going to start off with the most obvious, but it's going to sound like a dumb question, but what's the advantage of companies working with you to raise capital?
Scott Greiper: Good question. You know, At the end of the day, investors rely on Verdeans or ability to diligence, the right companies or management teams, their business models, their ability to execute. Their ability to properly govern their business and ultimately their ability to raise the right money and exit, whether It's through a sale of a company that achieves a return for the management and the shareholders, or it's taking a company, public investors in the industry, rely on Verdeans kind of smelled that.
To choose the right companies and the right people. This is a fascinating industry, one of the fastest growing [00:03:00] industries in the world, but it is still filled with inexperienced operators management teams and that's dangerous. And if you don't have expertise, we've been doing deals for 30 years.
Representing companies, investors, and now the longest tenured company of our kind in the cannabis space. So investors rely on us to bring them the right opportunities to conduct the right diligence. So we're investing behind the right team and the right.
Dan Humiston: You just can't look at this industry as one industry, because essentially every state's a little different, you have to understand how every sector works within each one of those states. , it's very complicated if you don't do this every day, it's nice to have somebody like Veridian guiding you through this.
I want to jump ahead and talk about one of the things I've seen within the industry over the last say 18 months is a lot of companies. Kind of had a reality check and they're dialing [00:04:00] back some of their lofty expectations and are even considering now selling, you do a lot of M and a work.
How do you guide companies through that process?
Scott Greiper: Yeah.
that's a really critical question. Dan, after the 2018 midterm elections, when we had a number of new medical states come online, we had a number of medical states that legalized recreational adult use. And the public stocks went crazy and the public companies were buying everything that wasn't nailed down just to kind of have the exposure in different parts of the market in the world.
It got to extended companies were not focused on their core business and their core assets. And the market started to recognize that and basically tell these companies that we're in too many different lines of business. If you're not going to cut back to what you do. And if you're not going to cut back to a company, that's focused on a single line of business, not I'm selling your stock.[00:05:00]
And that's what happened in the beginning of 19. Through the beginning of 20, you had a number of companies restructured sell off non-core assets and clean themselves up. Not be everything to everybody cause that doesn't work. So, what we've seen on the back of that is companies have become much more focused.
They become much more fundamentally strong in terms of revenue, growth and profits. And now they're starting to become more aggressive acquirers of companies that fit their core business, whether they're a licensed cultivator or they're a software company, or they're a biotech company, acquisitions are being made today that are much more.
To revenues, to earnings, to a product lines, intellectual property than they were in the past. So we're no longer in this land grab, let's buy everything. It's now the market and the investors are saying you can make acquisitions, but it's got to affect the core business. That's, [00:06:00] what's changed in the M and a landscape of the cannabis industry
Dan Humiston: I think you said that as well as I've ever heard it is that. When you're spread super thin like that, , you're not good at any one thing. And investors are going to penalize you for that. Because you can't do well in that situation. Speaking of restructuring, I think one of the services that you provide, which I think is just going to be huge is.
You provide a restructuring service and I'd like to talk a little bit more about it, but my thought is that most VC firms don't have workout teams within their company. They're gonna have a lot of good investments failed that shouldn't are you working with a lot of VC firms to help or are they starting to realize that, you're there to help them restructure some of their good companies that just need to get put back on track?
Scott Greiper: A hundred percent had a call yesterday with one of the larger, not VC cannabis firms, my private equity cannabis firms. I'll leave the name out, but [00:07:00] you surely know who they are. They're. And they're highly successful. They've very institutional. They have big backgrounds, real pedigree and they invest in a company that has not been working out.
And we got the call and we were on what that portfolio client yesterday yeah, it all goes back to why we started the practice. Then this is an industry that is, has incredible dynamics of growth. And a lot of years ahead of us, it didn't necessarily have the most experienced managers operators, because many of these folks just knew how to grow cannabis.
They didn't know how to put a board together. I didn't know how to put a strategy together. Financial forecasting and budgeting build the right cap table, execute correctly, et cetera. This is what we've been doing for 30 years. Advising companies about how to achieve all of them. As I talked about before building the right board, financial controls, budgeting, making your creative, strategic acquisitions, bringing in the right investors.
[00:08:00] This is all critical to sustainable growth in the company and building your valuation and bringing in the right investors. So having that restructuring advisory practice is why we got the call yesterday from this leading cannabis, private equity. So it's an important part of what we do. , it's all within the vein of institutionalizing cannabis companies, so we can attract the best investors so we can do track the best valuations and ultimately realize the successful exit.
It's all part of this philosophy.
Dan Humiston: Yeah. And VCs don't want their. Investments to go to zero. So it makes sense to have you help them bring their company back to life or get it back on track? A lot of times it's just restructuring and I want to talk a minute about investors and I see on your website that deal tracker, but I didn't get a chance to really look at it.
Can you explain how that works?
Scott Greiper: Yeah. In every industry, [00:09:00] but the cannabis industry, there are companies sometimes are investment banks. Sometimes they're data oriented firms that put together comparable company databases of deals. Who's raising money. Who's investing where who's acquiring, who who's selling out. Who's going public, really tracking the deal flow and investors live for this.
Why blueberry became bloomer and PitchBook and cap IQ. It's why these databases are so successful because sophisticated investors rely on. where are investors placing their capital today? Is it in licensed growers? Is it software? Is it biotech? Is it real estate? Is it brands? Since January of 2015, we have been tracking every deal in the industry equity raise debt, raise sellers, buyers, companies going public [00:10:00] Vergers joint ventures.
We're seven years into this. We have collected and aggregated the world's largest database of cannabis deals. Why does it matter? Because when you were an investor in this space or were advising you, we're going to tell you where the best value is, where the best way to invest is whether it's cultivation or biotech or software.
And we're going to tell you the right structure for your investment, because it's based on coverable deals. That's what the Verdean cannabis deal tracker is. We're seven years into this. We were the first in the market with this product. It is by far the world's largest database of cannabis deals, and it gives us incredible market intelligence and in edge, when we're representing companies looking for.
And we're representing investors looking to invest in really gives us a deep dive into best companies, best valuations and bus structure for investors.
Dan Humiston: I need to look at [00:11:00] it because like I said, I just skim through it as far as investors go. If, investors are interested in working with you, how do they go about.
Scott Greiper: So I'm on a website, there's a contact information that you could reach out to us. I'll get those emails . And we're on the phone with investors every day. And that's an important part of what our job I'm constantly on the road in front of large family offices, large private equity firms, private equity firms that aren't even in the cannabis industry, but they want to be, and they're looking for information.
Dan Humiston: Yeah. And we'll have the links to Veridian capital advisors in the show notes. So if you're a company that's looking to have somebody help you with raising capital or you're thinking about selling or merging, or you're an investor, just click the links in the show notes, or go to pod to learn more about working with Veridian capital advisors.
Scott, this was fun. I'm glad we finally got together and I had you on the show. Let's do [00:12:00] it again.
Scott Greiper: Congrats on all your success and look forward to the next one.