Are there still small dollar cannabis investment opportunities? The Cannabis Investor Series sponsored by PodConx is back for the Fifth year. This year, the Series will again feature the cannabis industry's top investors, reviewing how the current macroeconomic cycle is affecting the cannabis industry, what to expect in 2023 and sharing investment opportunities and strategies. In today's episode, Dan Humiston is joined by joined by Jeffrey Finkle the CEO of The Arcview Group Produced by PodConx MJBulls - https://podconx.com/podcasts/raising-cannabis-capital Dan Humiston - https://podconx.com/guests/dan-humiston Jeffrey Finkle - https://podconx.com/guests/jeffrey-finkle The Arcview Group- https://arcviewgroup.com/ Recorded on Squadcast - https://squadcast.fm/
Are there still small dollar cannabis investment opportunities?
The Cannabis Investor Series sponsored by PodConx is back for the Fifth year. This year, the Series will again feature the cannabis industry's top investors, reviewing how the current macroeconomic cycle is affecting the cannabis industry, what to expect in 2023 and sharing investment opportunities and strategies. In today's episode, Dan Humiston is joined by joined by Jeffrey Finkle the CEO of The Arcview Group
MJBulls - https://podconx.com/podcasts/raising-cannabis-capital
Dan Humiston - https://podconx.com/guests/dan-humiston
Jeffrey Finkle - https://podconx.com/guests/jeffrey-finkle
The Arcview Group- https://arcviewgroup.com/
Recorded on Squadcast - https://squadcast.fm/
Dan Humiston: [00:00:00] today on MJ Bulls. We are continuing the fifth annual Cannabis Investor series. Sponsored by Pod Connects, the cannabis industry's exclusive network of cannabis podcast that actually allows cannabis companies to advertise. Go to pod connects.com to connect to more cannabis listeners on today's show, we're joined by Jeffrey Finkle, the CEO of the Arc View Group.
Jeffrey, welcome back to the show.
jeffrey finkle: make too many
Dan Humiston: We let you, we gave you a pass to correct anyones that you did
give you a second chance. Uh, it's good to have you in investor series. Uh, last time you were here we talked about the Arc View group and your broad spectrum of programs and services. But today we're gonna focus primarily on cannabis investing.
Over the last year, cannabis investment capital has really dried up and F for most stages. You do a lot of work with startups. How has it affected early stage [00:01:00] investing?
jeffrey finkle: Negatively. Well look. Yeah, I mean that's the theme overall. I think there's a lot at play that's creating that dynamic. first of all, It's hard to raise venture and private equity funds in cannabis right now. When you're talking to an LP and you're soliciting the LP says, Hey, the top 10, top five, tier one, five, tier two. Cannabis public companies so depressed. They were down 80% from the high. I think they're down 60% from the. But you know what, why don't I just spread my money across, you know, a, a a spattering of the top 10. I'll get three or four times my money in four or five years. That's a venture capital rate of return. So in, I get liquidity along the way. So that's what equity funds and venture funds up against about [00:02:00] aggregating capital. And the lack of fund progression is one of the things that's exacerbating the availability of capital into startup. So that should debate as the public companies recover. I mean now we have certainly a macro, dynamic that's happening all over with the economy. and so, and you know, a lot of predictions about how that's gonna play out throughout the four quarters of 2023. So we don't know. But I think it's that Bates more money will come back in. that said, there clearly is capital in the industry. It's not as much in case in point. Uh, we just ran our first investor conference Covid in New York last week. was a huge success. We had close to 400 people attend, and we had a whole of content programming around investors. We did a reverse pitch. I had 15 venture capital funds come on stage and tell the audience about their funds. [00:03:00] Some of them were putting out one to 3 million in deals, some putting up 500 to seven 50 in deals, some putting up five to, to eight into deals. So it's there, capital is there. It's much harder to find the vetting lens is, is sharper than ever. It's there. And also as you go to each new region, like the Midwest and Michigan and New York, investors wanna play. They're coming out, they wanna learn about the industry. They may have been active in other sectors, they're in the exploration stage.
So every time we sort of branch out, we find new groups that are interested. So look, overall, it's
positive,
no
Dan Humiston: Yeah,
well I know you that we've heard a lot about this show that you
recently did in New York, so there's, there's definitely is interest and you know, one of the byproducts of less capital is valuations are down. I know a lot of people are looking at the [00:04:00] valuation saying, Wow, these are some really good deals out there.
but, , but the overall economy sort of has a lot of these people cautious. What are some options that investors that wanna participate but don't wanna put a lot of money in? Do you have any options for those type of people?
jeffrey finkle: have
three
ways
in
Dan Humiston: I.
jeffrey finkle: our view invests in our, in our venture group. one I would say is not an option, for people that wanna put a little bit of money to work. That is our partnership with Entourage Effect Capital, where uh, we sort of co-manage a pocket out of their fund. Three, to invest
seed in early growth opportunities.
Companies
that, you know, might require a 500 to 750 K check from us
in
Dan Humiston: mm-hmm.
jeffrey finkle: or $4 million round. that's impossible. If you want to get involved in that, you gotta take an LP interest in their fund three. And that's a higher ticket. as you know that we primarily invest out of our collective fund, which is a member managed venture fund. aggregated 78 angels into a collaborative decision making model. It's in a fund, [00:05:00] it's committed capital. We. About to do our second one into next year, and the minimums for that is $75,000, and that's called over a three or four year, This one will probably be over three years. So you're not coming up with that all upon it would be 25, you know.
k basically each capital call. but that's not
for, you know, people that are thinking of
allocating to sort of as an angel
and you're part of a
big
model. So
Dan Humiston: that's
jeffrey finkle: way. are two others
venture group, one outside. The third way is that when we
see compelling opportunities, we'll
aggregate an
s p.
And our minimums in those SPVs, depending on the opportunity, could be as low as 10,000. They're usually
And then lastly, I will tell you, our capital
group just launched
a crowdfunding
site
under
Dan Humiston: Yep.
jeffrey finkle: to, business. You can write a $500
check a
cannabis startup.
Dan Humiston: [00:06:00] Yeah, I'm on your website right now. I'm looking at some of the, some of the options in the crowdfunding site. That's, it's, that's, that's exciting. I know when we last talked, you were in the verge of launching that. That's, that's great that you did that. Let's talk about raising capital. What advice would you give cannabis companies who are holding off, sort of waiting for the markets to come back and hopefully their valuations to go?
jeffrey finkle: Well, if you, if, if, if you need the money now, you can't hold off. It's that simple. know, if you need a million dollars in a seat extension or a convertible note, uh, to say, you know, maybe I'll just raise 250 and do the rest when conditions improve, that is a complete waste of It's, it's. A painful exercise to raise money. It takes of the CEO's focus during that period of time, which means, you know, he's not spending as much time running the business. That's a mistake. I would say if you need [00:07:00] the money, raise the money. you don't need the money, by all means wait a little bit. not sure conditions are going to improve over the next six months. the latter part 2023, know, with the possible exception of we get some movement on. In the laed up session, which is possible. And we do hear some rumblings about, know Biden obviously with his announcement about reviewing scheduling. we have some indications that that could really step up in months before the 2024 but you're looking at a window, You're looking like a year window between say end of Q2
and to 24
I. Financing
Dan Humiston: Mm-hmm.
we need some good news. , The Biden
was a good news. It's just a couple more things to get people re-energized and hopefully the economy to come back to. Uh, before we wrap, let's talk about [00:08:00] some of the services that you provide, companies that are raising capital. What are some of the benefits of working with the Art for you group?
jeffrey finkle: Yeah. I mean, one is our conference right? So we big stage. We, we, we did a pitch competition. We had. companies presenting. There were, you know, lots of investors, room not only the 15 institutional funds in the room, but many high net worth individuals. we help them just by coming to our conferences and being part of it. we have a consulting group that helps companies, design their SOPs and helps them with their pitch decks. We have a group that's sort of a, an incubated marketing agency underneath our, our banner. helps companies design collateral, and gets their initial website up and so forth.
And of course we have our capital group that helps them raise money on a mandate, uh, as well as the crowdfunding site where they can be listed. That takes a little bit of work, but it, it's, it's a cost effective way to go to market and raise money. So there really are lot of ways that an interaction with the arch view [00:09:00] group
Dan Humiston: Yeah, I remember when we spoke last you, we talked about the collective a little bit and a lot of the members within your group are a lot of experience and, are willing to step in and give some advice or some guidance. And I thought that was an interesting value to being part of the group.
jeffrey finkle: Yeah. I'd say more, more the individual investors have time on their hands that are not ready to retire, that want to give back and that want to
help universe
um
Dan Humiston: Well that's being part of the Arc view
universe
That's great.
before we wrap up, are you gonna be doing another event soon?
jeffrey finkle: Yeah. Actually we're doing second investor conference in Miami, December 7th through. we're gonna, you know, focus a little bit more on what's [00:10:00] happening in the Southeast states. and we'll certainly as we always do, focusing on. Uh, entrepreneurs, operators and matching them with capital that can fund their business.
Really excited about it. We're planning whole 2023 calendar and we we're gonna do probably five conferences and then a bunch individual one day best practices workshops. So look forward to see seeing that stuff come out, but yep. Miami, December 7th through ninth. It should be warm.
Dan Humiston: That'll be great. Well, we'll have all the information in the arc view groups in the show notes, so if you're interested in investing or maybe attending the conference or if you're looking for to raise capital, just click the links and I'm sure somebody from Jeffrey's team will be happy to help you.
Always good to have you on the show. Thanks again for doing this, Jeffrey.
jeffrey finkle: My Good, Good to speak to again.