Where will the cannabis investment opportunities be in 2023 with The Panther Group 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 Scott Berman the Co-Founder and President of The Panther Group. Produced by PodConx MJBulls - https://podconx.com/podcasts/raising-cannabis-capital Dan Humiston - https://podconx.com/guests/dan-humiston Scott Berman - https://podconx.com/guests/scott-berman The Panther Group - https://thepanthergroup.co/ Recorded on Squadcast - https://squadcast.fm/
Where will the cannabis investment opportunities be in 2023 with The Panther Group
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 Scott Berman the Co-Founder and President of The Panther Group.
MJBulls - https://podconx.com/podcasts/raising-cannabis-capital
Dan Humiston - https://podconx.com/guests/dan-humiston
Scott Berman - https://podconx.com/guests/scott-berman
The Panther Group - https://thepanthergroup.co/
Recorded on Squadcast - https://squadcast.fm/
MJ Panther Group
Dan Humiston 2: [00:00:00] Scott Berman, the president co-founder from the Panther group. Scott. Welcome back to the show.
Scott Berman 2: Hey Dan, thanks for having me on.
Dan Humiston 2: I'm glad you're back. I was looking back. It was been two since 2020 is the last time you were on the show.
So a lot has happened in the industry, a lot's happened at the Panther group. So we, , we gotta work cut out for us if we're gonna cover everything today. But the Panther groups roots are in cannabis investments. Your team has been investing, I believe since 2017. And one of the things that's, I feel has always differentiated you from other investors.
Is how active you are with each of your portfolio companies. And that's where I wanna start today. This approach kind of goes against the grain in most VCs. Why does it work so well for you?
Scott Berman 2: Well, I think the reason why is because we have a really good team that can offer help to these companies after the funding comes in, we have an investment banker on our team. our founder Ramy [00:01:00] trade is a physician. He serves on plenty of the boards. my partner, Jordan TRID is a finance background.
So he helps out with a lot of the portfolio companies on that end. And I have the data and marketing and advertising background. So a lot of these companies need that kind of help after they already get their funding in the door.
Dan Humiston 2: Yeah, I, Think that happens a lot of times because you get so wrapped up in the funding and then you don't realize that, you know, you let some of these other areas slip, or maybe with the extra money it's harder to apply at scale plus. And one other thing is you gain firsthand real time knowledge.
When you're that close to the fire. Does that help you identify trends and opportunities?
Scott Berman 2: Absolutely. We get a lot of in inside information about what's happening in these companies. We can see how they're competing in the marketplace. We also focus on so many different sectors that we understand how those sectors are growing. So it could be an ancillary business that's doing [00:02:00] FinTech services, or it could be a grower that's in California.
And so for each one of these opportunities, we understand the state of that sector in that area. And it really helps us for that investment, but also for any other investments that we might be considering
Dan Humiston 2: Yeah. And it also gives you a nice foundation to expand beyond investments. And now you offer a range of services that help not just your portfolio companies, but now you're, you're offering this to other companies. Maybe give us an, some of the things that you've changed or some of the ways that you're helping cannabis businesses accelerate their growth.
Scott Berman 2: Yeah, so , and as you've stated, it, you know, it came out of the fund investments. So we had done so many different fund investments. We were getting pulled into these different companies and we said, you know, we can help you get to the next level. And that might mean additional funding. Another round of funding, like after the first round, an, a round or something that could mean an M and a opportu.
You know, we've had several, several of those [00:03:00] happen in the last couple years, but then on the, you know, the lower level, there's also a lot of, business advisory services that are needed at these companies. Sometimes it's personnel where they need a new CFO or they need some marketing help, you know, and sometimes it's advertising and getting more leads.
So a big part of our focus is actually driving lead gen to these companies and helping them just grow their customers and market.
Dan Humiston 2: Mm-hmm yeah, I see. On your website, it talks about, I think the Panther CMO services. you, so, so we're helping with marketing. We talked about this a little bit. That's where your strength is your background, but lead gen data services and advertising those are really essential as if, I mean for survival, right?
Scott Berman 2: Yes. Yeah. And so what we found with a lot of the portfolio companies is in the early days, they're underinvested in marketing. They don't have the right, know, people in place, but they also don't have the ability to collect and analyze and monetize their data sets. [00:04:00] And so, you know, an example could be a chain of dispensary stores that has thousands of customers.
They don't really know, you know, what customer, why buys what product at, what velocity and what do they spend, and so we help them understand those metrics. Then there, we have ancillary businesses that are trying to sell. It could be an HVAC company that's trying to sell to cultivators. Could be a software company trying to sell to dispensaries, And so the B2B lead gen side, there's also a lack of data, knowledge in the space. So we've compiled a database of over 80,000 cannabis businesses. They're all in our HubSpot, we built machine learning so that we can make matches for people and give them hot leads so that they can accelerate their growth.
Dan Humiston 2: Wow. Yeah, that's gonna be huge. I, I think that's super essential. You know, one of the things that we talked about before we jumped on, and I think I kind of dovetails on what you're just talking about here is that you've had so much experience [00:05:00] watching a new state come online, go to adult use. And watch it transition year one, year two, year three, from an advertising and marketing standpoint, you bring in a new state, like say New Jersey advertising approach might be different year, one than year four, but you have that experience and maybe, and, and can help these.
Is that one of the things that you provide?
Scott Berman 2: Absolutely. as you mentioned, we've studied this for a long time. Um, I got my start in all this through politics. And so as the politics of each state changes, then what happens on the ground? And certain things happen after six months and then two years and then four years.
, and I'll give you an example in California. You know, we started doing distribution in 2015 out there, and it was a free for all and it was crazy. you were able to get product from a grower to a store, you probably could sell it fast forward to 2022.
There's now 4,000 brands. In California, they have to pay slotting fees to get on the [00:06:00] shelves. You it's become a lot more competitive that still slowly happened over years. So now we shift back to a state like New Jersey where it's brand new as one of the smallest medical markets in the country.
And there's really very little brand awareness. There's only about 25 stores right now and only 14 of them are adult use. So we're now projecting the next two years. What's gonna happen when that market really opens up, how do we advertise to consumers and get them to like our brand or our store before the competition?
Dan Humiston 2: I, like I said, I think this is, A service that's really needed. and I'm glad you've decided to expand into it. I wanna, before we wrap up, I want to talk about investing a little bit. The industry's. always struggled accessing capital, but the last year has been especially hard and it seems like it's driven valuations down.
And I, you know, I hope I'm right on this, but it, it can't continue to go down at some point they're gonna change. And then when valuations start to [00:07:00] go up, they're gonna go up fast. Do you think valuations are as low as they can go and is now the time to invest?
Scott Berman 2: I hope so, Dan I do. I mean, I, I think, look, I think there's still certain sectors where valuations may continue to drop. However, I think the macro issues that are existing now to push things down are as bad as they will be. Okay. And so those are, there's several things that I look to. Number one, is the politics always come back to.
We haven't had any good news in a long time from Washington. And so a, if there's a change in the safe banking law or things like that, that could really be a catalyst, which would drive valuations up immediately. That's number one, number two, the cannabis stocks that are, that people know about, I call 'em like the CNBC factor.
You know, the, the cannabis companies they follow on there. None of them have done. They're all trading it well below their, you know, where they should be. And the fundamentals though, of a lot of these companies are not bad. You know, they're selling a lot of [00:08:00] product they're operating profits, you know, and, but the public itself is not interested in investing in those deals.
So I do believe, as you said, that there's gonna be a time when things change and they change quickly and the valuations are definitely gonna go way up.
Dan Humiston 2: well, you. Looking back from the last time we spoke. One thing I think people just forget about is that this was deemed an essential service
in most states. what more validation do you need? I mean, when this thing happens, it's gonna happen so fast, you're gonna be like, shoot, I should have invested what, we, before we go, what are some of the advantages that we haven't talked about with working with the Panther group?
Scott Berman 2: Well, I
think part of it is we study the space very carefully. we have over 40 investments and we're in 20 different sectors. We study the ancillary side very carefully. We, we do a lot of plant touching deals as well. We're in many different states. So we look at what's happening in that [00:09:00] state and that sector.
So we have a lot of information on what's happening on the ground in these cannabis companies. And we have a lot of data. So we understand the numbers like how they're doing financially. and we also understand how many customers they have and what's their churn rate, how much traffic to their website and things like that.
And so we, we keep a very close eye on the metrics that would make these companies successful in the long run. that's one thing. The other thing is though, we have a lot of experience with, exits. know, we have mergers that we've been a part of. There's been a few public offering.
And so our goal as investors is always returning capital to our investors and we are laser focused on that. So every time we get involved with the company we ask, you know, what is the exit plan? How can we make this right for our investors? And that's our focus in year one and year four and year six.
Dan Humiston 2: It, it really has to be, it really has to be well, we'll have all the Panther groups info in the show notes. So whether you're interested in investing or [00:10:00] working with the Panther group to expand your cannabis business, just click the links to connect with Scott or somebody from his team. Scott. It's always great to catch up.
Thanks for being on the show today.
Scott Berman 2: Yeah, thank you. And Dan, you always put out such great content and, uh, we love listening to it.