There are only a few stock pushers left that are cold-calling with tales of riches to be found in the hot cannabis stocks traded on Canadian stock exchanges. Some of you might have been approached with great ways to fund your businesses, even before they launched, through an IPO in Canada. Perhaps you actually sold some stock and are now facing angry shareholders who are demanding to know why your earnings weren’t as robust as promised. Perhaps you even lost money. That would put your company right there alongside some of the largest companies in the industry.
Perhaps you are still struggling to find investors. Lots of good companies got started and have actually made money, but need investment to expand. Finding investors is an uphill battle these days, though, as every day the news is full of Canadian crop failures, earnings disappointments, articles about Black Market dominance in spite of the efforts of law enforcement. Take a moment to imagine what this looks like to the average investor with $10,000 to invest. Now you understand why it is so difficult to get anyone to take you seriously.
There are a few places to look for investors, though. They aren’t the hot-stock pushers. There are Angel investor groups, like Wrazel in Orange County, California. They have networking sessions every month. Google terms like “cannabis industry networking” and “cannabis investor groups” in your area, and attend if you are not already doing so.
Attorneys, doctors, dentists, and local business owners are also potential investors. Don’t send out your private placement memorandums cold to these people. They require that you develop a relationship with them until they feel they can trust you. Don’t promise riches, promise some fun and some free dope. Are they interested in gardening and would like to learn about cannabis cultivation? Are they interested in alternative medicine? Are they semi-retired and looking for a project that might provide some income as each harvest is sold? These are the types of people who are good sources of investment.
Give a talk at a local civic club or senior center. Don’t pitch your great investment opportunity. Present a slide show of graphs and pictures and explain the realities of the cannabis industry. Talk about what you have learned in your business and where you see the industry in the next few years. Boomers are fascinated by the strange new world of cannabis products like vape pens, crumble, pre-rolls and all the various new products they never dreamed of beyond rolling joints using a sushi mat or turning a soda bottle into a bong. Make your presentation interesting, pass out your card, repeat the process a few times and you will likely attract at least one person who will be interested in making an investment and possibly bringing along friends.
At some point in 2020 there will be renewed interest in the cannabis industry. It might not be as exciting as the wild days of the Green Rush, but opportunities will return. You won’t be able to convince people that your company will make them into millionaires, but the companies that survive and start during this period of consolidation are more likely to succeed than the companies that were swept along by the whirlwind.
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