For Your Consideration...

The Value of ArcView International Investor Forums to Cannabis Start Up Companies

Last week I attended a cannabis industry Investor Forum put on by The ArcView Group in San Francisco. The event showcased emerging companies in the legal cannabis industry to ArcView members for potential investment. For entrepreneurs seeking capital to grow their business, the events are an excellent way to gain exposure to the cannabis investment community. I should mention, that our firm, Electrum Partners, sponsors the ArcView International Investor Forum which explains why I’m such a big fan.

There are approximately five ArcView Investor Forums per year that bring together investors and cannabis companies seeking capital and business resources. During the summit, each company has a ten-minute pitch session in front of the investor audience.

Up and companies that presented during the ArcView San Francisco forum included supply chain solutions provider, Stonebreaker Distribution, Mendocino based Heritage Holdings of California and wellness company, Vital Leaf among others.

After the presentations there are mixer functions that bring together the presenting Company staff and ArcView investors. This provides a comfortable environment where entrepreneurs can get to know ArcView investors in a stress-free setting.

In order to qualify to present at the event, each company must participate in an evaluation process via webinar where they pitch their project to ArcView investors and industry analysts from throughout the industry. During the webinar, company representatives pitch their project and then field questions relating to their products and services, previous leadership experience, go to market strategy, company valuation and more.

The legal cannabis industry is just getting started and ArcView provides entrepreneurs with access to vital resources that helps them achieve their business goals. We look forward to rubbing elbows with them during an exciting year in legal cannabis!

By Leslie Bocskor

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To Learn more about the cannabis industry, check out The Electrum Report for breaking news and information.

Nevada cannabis tax surplus is a result of a smart regulatory framework in a strong market

I think it’s safe to say that in terms of setting up and managing a smart regulatory framework for collecting tax revenue on sales of legal cannabis, Nevada is crushing it. Last week, the Nevada Department of Taxation released legal cannabis tax revenue figures for April, 2018 which put Nevada at over $55 million in total tax collections since adult use sales began on July 1st of 2017.

This is fantastic news for the State because the number already exceeds the projected figure of $50.3 million in revenue with two months left in the fiscal year. What is even more encouraging is that momentum has increased in 2018 as sales receipts have blown past forecasts in each month of the year.

There are several reasons for the surplus in my opinion.

One is that everyone involved may have underestimated the demand from the forty-five million tourists that visit Las Vegas every year. Understandably, it’s hard to forecast an exact number when you’re estimating demand from a highly diverse customer base in a dynamic marketplace such as Las Vegas with a product that has no prior history of being sold in a retail environment. But all things considered, similar to the detailed calculations of our world class Vegas oddsmakers, the projections were actually pretty darn close and State officials rightly erred on the conservative side.

Another reason for the surplus is that in setting up the support infrastructure, Nevada has implemented what I believe is the best regulatory framework in the world. Here are several examples why:

  1. Nevada already has extremely high compliance standards when it comes to gaming, so generally speaking, applying rigorous standards to another industry is not as challenging as it is for a state that is building a framework from scratch.
  2. Nevada is extremely diligent about background checks and has a very low tolerance for bad actors trying to game the system. As mentioned in bullet 1, this is not the Nevada’s first rodeo when it comes to high compliance standards.
  3. Nevada is predominantly a tourism-based economy so there is an acute sensitivity to customer experience that permeates the entire licensing and regulatory process. This point is subtle but I believe is a key differentiator for successful implementation.
  4. Nevada was very methodical and stringent in issuing medical marijuana licenses. This in turn made the transition to adult use licensing relatively smooth and manageable. In fact, Nevada was so efficient, the State actually opened for business six months early in part because of its effective approach to high compliance and regulatory standards.

In my opinion, Nevada has set the bar for regulatory standards in the industry. However, we are still in the early stages of growth. It is going to be very interesting to witness how much of an engine of economic impact legal cannabis becomes for the City of Las Vegas and overall Nevada market as it matures over time. With that said, I wouldn’t bet against Las Vegas continuing to exceed expectations.

By Leslie Bocskor

Electrum Partners President Leslie Bocskor Discusses the Opportunity of Legalized Cannabis in Mexico at the CannaMexico World Summit

Leslie Bocskor, President of Electrum Partners, a guest of former President Vicente Fox, spoke at the CannaMexico World Summit in San Cristobal, Mexico, held May 30 thru May 31, 2018. Mr. Bocskor participated in a panel that included the former President of Mexico, Vicente Fox Quesada, who has been a staunch advocate of legalizing cannabis in Mexico.

From left to right, Leslie Bocskor, President of Electrum Partners, Jay Wilgar, CEO and Director of Newstrike, Matt Hawkins, Managing Principal of Cresco Capital Partners, Vincente Fox Quesada, Former President of Mexico.

Like many other Latin American countries, Mexico is considering legalizing cannabis for medical and adult use as well as hemp for multiple markets. With a population of over 120 million residents, Mexico leads the list of Spanish-speaking countries exploring the benefits of legalization. When combined with Spain as well as Brazil, Argentina, Chile, Uruguay, Venezuela and other South and Central American countries as well as Spain and Portugal, the market swells to almost 730 million Spanish and Portuguese speakers worldwide. In comparison, the total US population is roughly 325 million.

“In many cases, our work with government agencies is pro-bono, where we will go in and work with policy makers and help construct functional regulatory frameworks and public policy. Our goal as good corporate citizens in Mexico and other Latin American countries is to get the right regulatory infrastructure laid out beforehand because it is so critical to the success of all stakeholders,” said Mr. Bocskor, whose Las Vegas based firm, Electrum Partners, offers business advisory services to companies working in or exploring the legal cannabis space. “Companies we work with in the US such as GB Sciences are exploring multiple therapies based on cannabis that help patients dealing with life threatening illnesses who are left with very few choices for pain relief. With a progressive policy in place, I can imagine dozens of innovative cannabis companies coming out of Mexico over time.”

Adam Jason Cohen, Senior Vice President of Electrum Partners also attended the Summit and added, “Right now there is an opportunity for Mexico to establish itself as the leader for Spanish speaking countries for medical, pharmaceutical grade and adult use cannabis as well as hemp.”

The main focus of the Summit was to gather leaders in legal cannabis who have global vision and reach to discuss the emerging opportunities in the cannabis industry in Mexico. Numerous industry professionals in finance, medicine, government, technology and agriculture from around the world were in attendance at the inaugural event. Other guest speakers included Dr. Jorge Hererra from Colombia, Julio Calzada Mazzei from Uruguay, Jorge Cervantes from Spain, Ana Maria Gazmuri from Chile, Mario Emilio Gutierrez from Mexico, Dr, Inbar Maymon from Israel, Ethan Nadelmann, Founder of the Drug Policy Alliance and Derek Riedle, the publisher of Civilized, from Canada.

But the star of the event was the event’s host, Vicente Fox who was President of Mexico from 2000 to 2006. “I have to get a big shout out to Former Mexico President, Vicente Fox for inviting me and members of the Electrum Partners team as guests to attend this wonderful event,” said Mr. Bocskor.

About Centro Fox: Located on the outskirts of Leon, Guanajuato, Mexico, Centro Fox offers a multidisciplinary campus with facilities for international events, business conferences, educational programs, leadership sessions, academic symposiums, philanthropic activities and more. The complex houses a music school and the Hacienda San Cristobal Center.

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Sean McCabe of Electrum Partners discusses opportunities for legal cannabis in emerging export markets

Sean McCabe, Director of Business Development at Electrum Partners, was recently interviewed by at the Arcview Investor Forum in Vancouver B.C. about his thoughts on emerging export markets in the legal cannabis industry. During the interview, Mr. McCabe discussed the progress made by Canada in exporting internationally. “You’re going to see a rush to international markets and America is actually going to be behind on those markets because there’s nowhere that you can legally export from the United States until federal legalization happens,” he said, “So Canada is going to be on the forefront of that.”

Mr. McCabe also addressed the demand for legal cannabis products in Europe and how the competition is heating up with Canada and other countries competing to export to those emerging markets. “Currently the really exciting places are the British Medical Market and the German recreational-medical market. Jamaica is about to come in and compete with that for international export and Canada is about to compete for international export.”

Later in the interview, Mr. McCabe discussed Electrum Partners’ goal to help fund businesses in the sector. He also provided insight into the need for an ancillary debt fund to provide capital into the larger ecosystem within the cannabis industry. “Nutrient systems, lighting systems, brick and mortar storefronts, real estate leasing, anything that doesn’t touch the plant… that costs $820 million USD for infrastructure so far. No one can get a loan from a bank, no one can get a mortgage. That market’s going to continue to grow and there’s going to be $25 billion USD just for infrastructure. So if you can start a fund, and you can be that syphon through which that capital meets that infrastructure then everyone’s going to have a merry Christmas.”

The Arcview Investor Forum, held at the Westin Bayshore in Vancouver, Canada from April 30th to May 2nd 2018, assembles high-net worth investors exploring opportunities in the legal cannabis space.

To learn more about the industry, check out The Electrum Report for breaking news and information.

Link to the podcast:

Link to the article: Cannabis Podcast Interview with Sean McCabe, Director of Business Development for Electrum

For more information or to schedule a consultation, please submit an inquiry on our Contact form.

Insight from Leslie Bocskor for new business owners in the cannabis industry

In an audio interview of Leslie Bocskor, President of Electrum Partners, by CannaInsider, Mr. Bocskor discusses some of the ways in which new business owners in the cannabis industry have evolved over the past several years. “We’re seeing the level of sophistication, the level of due diligence, the quality and diversity of the teams being assembled, the intellectual property protections, has all been improving constantly, “he said. Mr. Bocskor’s interview touches on four main areas.

  1. Industry maturing
    • Quality of the Company teams
    • Diversity of owners and staff including the granularity of professional experience of core team members
    • Strength of idea formation and intellectual property
    • The level of preparation and planning going into the entrepreneur business plans
    • Depth and breadth of the bench (supporting team members) has increased dramatically
  2. The Talent Influx
    Another one of the reasons for the evolution of the legal cannabis market is that many highly experienced professionals from outside of the industry are entering the space. Mr. Bocskor references several industries where professionals are migrating from to enter the legal cannabis industry.

    • Science
    • Medicine
    • Marketing
    • Distribution
    • Logistics
  3. Industrial Hemp and the Cannabis Ecosystem
    “I am very interested in industrial hemp. It is the less exciting cousin to cannabis. I believe the hemp industry is going to encompass hemp paper, hemp textiles, hemp plastics, biofuels, food products and industrial chemicals,” said Mr. Bocskor. He then expands on how industrial hemp is one part of the seven business verticals within the legal cannabis ecosystem. The seven verticals include:

    • Adult Use
    • Medical Use
    • Pharmaceutical products
    • Nutraceutical
    • Industrial hemp
    • Ancillary market
    • Veterinary
  4. States with Restrictive Policies
    We have seen hundreds of millions in dollars pour into Washington, Nevada and California once they voted in adult use legal cannabis. While the industry is seeing traction in those States, other States such as Illinois, Minnesota and New York that initially implemented highly restrictive medical marijuana programs remain mired in slow growth. Mr. Bocskor believes that while these markets are currently saddled with restrictive policies, they nevertheless are taking steps in the right direction and will gradually ease their policies over time as the political climate evolves and the impact of cannabis tax revenue becomes clear. For States considering legalizing adult use cannabis, the idea is to review the policies of existing adult use States, determine which aspects of those frameworks align with the goals and objectives of their own State and then engage the services of professional industry advisors with real world experience.

For information about private consultations and guest speaker appearances by Mr. Bocskor, please submit an inquiry on our Contact form.

Find Leslie on Twitter @lesliebocskor