Connor Thompson, with Source Colorado, at right, and Rob Lanterman, with Open Vape, listen to a speaker in a packed room during a Canopy Boulder event on Wednesday at the eTown Hall in Boulder. (Jeremy Papasso, Daily Camera)

Canopy Boulder ganjapreneurs face tough crowd of investors

'Just because cannabis is hot doesn't mean it's any easier to start a business'

BOULDER — Nascent cannabis entrepreneurs from Canopy Boulder’s fall class faced a tough crowd of investors at eTown Hall on Wednesday, fielding questions about unproven business models and inflated valuations during an investor preview round of pitches.

Teams from nine companies presented in private sessions to groups of local investors, a warm-up of sorts to the public event Wednesday evening. About 30 investors were in attendance, full of advice for the green businesses.

“Don’t pitch me a product; pitch me the market,” said Don Grede, chief capital officer for California-based Aquarius Cannabis, a marijuana branding company. “You should be able to tell me why I should invest without even identifying the product.”

Grede was one of several investors who criticized the structure and content of company presentations.

Connor Thompson, with Source Colorado, at right, and Rob Lanterman, with Open Vape, listen to a speaker in a packed room during a Canopy Boulder event on Wednesday at the eTown Hall in Boulder. (Jeremy Papasso, Daily Camera)
Connor Thompson, with Source Colorado, at right, and Rob Lanterman, with Open Vape, listen to a speaker in a packed room during a Canopy Boulder event on Wednesday at the eTown Hall in Boulder. (Jeremy Papasso, Daily Camera)

“There were some real do’s and don’ts in those presentations,” said Bill Decker with data analysis firm Cliintel. “All of these guys were starting with who they are, what they’ve done. I don’t care. They should be telling (investors) why we are sitting there: How are you going to make money?”

Many of the companies just aren’t there yet, Decker said. Without sales, they simply don’t have the numbers that prove they are legitimate businesses worthy of investment.

“Just because cannabis is hot doesn’t mean it’s any easier to start a business,” he added. “Fundraising, getting sales, marketing — those things are just as tough.”

“That’s a reality these guys are going to have to face.”

Canopy CEO Patrick Rea said while attracting investors is the eventual goal, it’s not the only goal for these startups.

“Some of these companies have only been at it for 13 weeks. That’s not a lot of time to already have proof of sales,” he said. “(Canopy) is more about matching the right company with the right investors.”

A handful of companies did manage to impress investors, including Ananas, which is manufacturing a precision dosing vaporizer, and Compliant Cannabis, a provider of business data software systems.

“Compliant and Ananas — those guys are what I’m looking at,” said John Wickens, a broker with Cherry Creek Properties, which specializes in real estate for the marijuana industry. “All the rest is just window dressing.”

Said Grede: “Anything business on the supply side, looking to solve those issues, is what I’m looking at. I want to invest in a business; not a product.”

Another entrepreneur who got a positive reception was Sean Murphy, publisher of the recently launched Hemp Business Journal — despite (or perhaps because of) a glitch that left him unable to use his PowerPoint.

“A pitch is something you do in front of a lot of people,” Murphy said after his session ended. “You don’t pitch three people on a leather couch; you talk to them.

“I guess was lucky I forgot my slides.”

Shay Castle: 303-473-1626, castles@dailycamera.com, @shayshinecastle

This story was first published on DailyCamera.com