Today's featured Cannabis Investors are Andre Haroche and Doug Hannah 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 Andre Haroche and Doug Hannah the co-founders of Silverleaf Venture Partners. 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 Andre Haroche - https://podconx.com/guests/andre-haroche Doug Hannah - https://podconx.com/guests/doug-hannah Silverleaf Venture Partners - https://slvp.co/
Today's featured Cannabis Investors are Andre Haroche and Doug Hannah
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 Andre Haroche and Doug Hannah the co-founders of Silverleaf Venture Partners.
TWO12 - https://www.two12.co/
Raising Cannabis Capital - https://podconx.com/podcasts/raising-cannabis-capital
Dan Humiston - https://podconx.com/guests/dan-humiston
Andre Haroche - https://podconx.com/guests/andre-haroche
Doug Hannah - https://podconx.com/guests/doug-hannah
Silverleaf Venture Partners - https://slvp.co/
RC Silver Leaf 3
Dan Humiston: [00:00:00] Today on the MJ bulls raising cannabis capital podcast, we are continuing this year's cannabis investors series with Doug Hannah and Andre Hiroshi from silver leaf venture partners, guys, welcome to the.
Andre Haroche: Thanks for having us.
Dan Humiston: Well, it's nice to meet you guys. Thanks for taking the time out today to talk about investing in cannabis. The thing that caught my attention about your company was that you actually started personally investing in cannabis before you started your firm, Andre, do you and your partners continue to invest your own money alongside the capital that you manage?
Andre Haroche: Yes, we do. We really think of ourselves first and foremost, as investors investing our own. Even though now we invest other people's capital. We really think of like every dollar as, as our own money and so we have skin in the game.
Doug Hannah: Yeah, no, Andre is a hundred percent, right. Our first portfolio we put together, it was just Andre [00:01:00] not. And we said, Hey, we're going to make mistakes. Let's make it with our own. And that really cut our teeth in the industry. We look at deals a lot differently today and that launched us our first 10 deals into being a lot more comfortable to go out and then take capital from outside investors.
Dan Humiston: Yeah, I think it sends a great message that you have, as Andre said, skin in the game. , just like when you, you go for a business loan and the banker says to you how much money you have your own money. And I mean, if you're not willing to put your own money and I don't know why anybody should loan to you, but tell us some of the companies that you mentioned you did 10, 10, when you get just got started, I'd rate.
What are some of the other cannabis companies that we might've heard of that you've invested?
Andre Haroche: we'll talk about a couple of them, but one that comes to mind is iHeart Jane, you may have heard of it or Jane technologies. This is probably one of our biggest successes in the portfolio. Definitely not maybe th this company is up dramatically from when we first invested. It's an [00:02:00] e-commerce company.
That's a lot like a Shopify. And they were really ahead of the game. They saw what Amazon was doing and saying, Hey, we can web enable retail stores in this case. Dispensary's and they started a few years ago. It was really compelling story, compelling team. Really are one of the leaders in e-commerce right now for cannabis.
These guys are doing billions in what's called GMV. It's really cool. It's a great story.
Dan Humiston: I gotta make you feel good that you got in early.
Andre Haroche: yes. Yes. It makes us look incredibly smart. At the time we were a hundred percent sure. He said, well, it could be this. It could be that. And I think it was Warren buffet who said the rear view mirror is crystal clear, but the windshield is very foggy. So even with that deal, we had our doubts and.
But in the end, it was a really solid team. And Doug twisted my arm very hard. So we did the deal.
Dan Humiston: Doug. Are there any particular sectors within the industry that you like to invest in or you stay away from?
Doug Hannah: [00:03:00] Well, th the two areas that Andre and I try to focus a little more on are probably the life science areas and the technology. And Andre has got a really brilliant mind in technology worked as the CIO officer for his family business, which in the eighties, nineties where the largest travel agencies in the country. And so he really understands technology pretty well. We've taken a hard look at tech companies and the non, the life science, anything with genetics, IP we like stuff where there's a moat built around the company that you know, is going to protect them and their cash flows and is going to help them expand into the other markets without having as much market share.
To protect your technology.
Andre Haroche: Doug brought up such a good point about that. When he said, moats, there's a lot of businesses out there that can be copied, but Doug is really astute in identifying and these, some of these life sciences businesses, which ones have patents, which ones [00:04:00] really have unique products.
Some people say they have unique products or technologies, but. We really try to identify ones , that are unique. And you have to imagine for so many years, because cannabis was illegal, there was so little investment in science and technology. So right now there's a huge amount of catch-up going on.
And these companies are really just advancing 50 years worth of research in about five or 10. So for us,
Dan Humiston: Yeah, you mentioned patents. Are there any other characteristics that you look for in a company to get your attention?
Doug Hannah: First and foremost, we want to see , a solid team, and a team that executes well together. You can have. Five rockstars that came from apple and Starbucks and Coca-Cola. But if they all don't work together and they don't know how to pass the ball, we find out they don't score as many points as a team that is integrated very well together.
So we really try to take a look at this from a lot of different directions. We want to look at a solid team. We want to see if there's a mode as we [00:05:00] discussed. Built around their technologies. We want to see that this is a company that if the water gets choppy, they're going to be able to forge through it versus have the boat capsized.
And, we all lose our money. So those are some of the, probably the more important things. And then of course, it's gotta be in an industry that we believe in. We believe that it's going to become More prevalent in the future, not something that is drifting away or is not going to have nearly as much as demand.
That's maybe why we have focused a little bit more on the tech and the life science.
Andre Haroche: Yeah, to Doug's point a little bit. Sometimes we call them tailwinds. , if we look three or four years down the road or five years, even we try and in our minds, imagine where things are headed and sometimes you can figure it out and understand. Landscape.
It's got what it's going to look like, where these companies are going to play. And sometimes you can't, but when we have a sense that product or need will really develop over time and there'll be a bigger market for it, then we have more confidence. But [00:06:00] back to Doug's point, you could have the best product and the widest, opportunity.
But if the team's not good, it's not going to be a winner.
Dan Humiston: You mentioned a tailwinds and a few years ago, if you weren't on the west coast, you were missing a lot of opportunities, but now it seems like a lot of things are happening east of the Mississippi and you guys are based on the east coast. Do you feel like you have an advantage?
Andre Haroche: I'll take a little bit of that. I'm in the New York area. Doug's actually in Denver, I'm old, he's formerly a Florida guy. So we've got that Florida knowledges secret weapon in his back pocket. we do in some ways and maybe not so much in others, but for the most part we do. And I think a big part of it is just the lessons learned.
If you look at California that we've seen a lot of people make mistakes. We've seen a lot of companies that have thrived by doing unique things. I talked to some young entrepreneurs and I could see them making some of the same mistakes that maybe companies were messing around with a couple of years ago in California.
So, from the perspective of understanding that history, it helps that, would you agree with that?
Doug Hannah: [00:07:00] Yeah.
Andre and I wrote our thesis three years ago and we really felt like things were going to originate from the west and movies and that's pretty much what's happened. There's been a few states like Massachusetts that were kind of early to the game and. And Michigan , for the most part, but they really never developed the technologies.
They never developed the brands and all that stuff seems to be coming out of California or out of the west end and is moving east. So we feel like we have a little bit of a competitive advantage to know. Where some of these companies are going and companies that are starting up on the east coast probably haven't gotten the experience or haven't had , the painful, tumultuous ups and downs that cannabis seems to deliver consistently.
We think that they're a little bit more prepared for battle.
Dan Humiston: it's not that free pass to business success just because you're in the cannabis industry.
Doug Hannah: we say it all the time when cannabis is one of the hardest businesses on the planet. , it's not a get rich scheme. It's it's very difficult with two [00:08:00] ADE and no interstate commerce and all the different regulations. It's a really, really challenging business.
Dan Humiston: for sure. Well, the remaining time for investors that are thinking about investing in cannabis, what are some of the advantages of working with silver leaf venture partners?
Andre Haroche: I'll name a couple and that Doug finish off one is, as we talked about earlier, standing in the game, I can't tell you what a difference that makes in how Doug and I think about things, knowing that. 30% of a deal or 10% or 80% or whatever it is, we lose sleep thinking about these things.
And we as it responsibility to each other, I wouldn't present a deal to him that I wouldn't personally bet my own money on. So that mindset really changes when you have skin in the game. And the other one, I think is a little bit on the experience side and I'll let Doug segue there. But we've done 32 deals now, Doug, I can't remember.
And we've learned a lot along the way with each deal. You think , you figured it out and [00:09:00] then there's always a lesson. So when you have that kind of experience it ends up really informing your next decision a little bit better. , we get nervous about people who come to us and say, Hey, I found a, a business.
Should I invest? And we see a lot of angles that maybe they don't
Doug Hannah: everything Andre said was spot on. We don't move forward and take it to our investment committee unless Andrea and I are both a hundred percent sold on moving forward. So if he loves something and I don't, we don't move forward and vice versa. We really have to be in concert with each other and in unison, and then we move forward.
We take it to the committee, the committee approves the. We move forward and Andre and I continue to be are the largest investors in all of our partnerships. So we have a saying here where you don't want a cookie. And we think that's really, really important because we're not just shoveling deals to get deals done.
We believe in these deals, whether or not they work out or not, time will tell it always does, but it's not a mentality. Hey, let's just do as many deals as we possibly can because [00:10:00] we want to hit our quota by the end of the year, has nothing to do with that with us.
Dan Humiston: I think that's a great philosophy. We have all of silver venture partners information in the show notes. So if you're a cannabis company that's looking to raise capital or an investor that wants to add your money to the money that these guys have already invested into their deals.
Just go to the show notes, click the link, or go to pod connects.com. Guys. I wish we had more time. This was a great conversation. Thanks for doing this.
Andre Haroche: Thank you for having us.