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How to Find an Investor for Your Cannabis Business
Serious over-promising = brand death = lost funding continued
There are way too many of these quack-like characters out there that are damaging cannabis’ image. The New York Times just had a major semi-negative story about cannabis/hemp-based skin creams that promised too much and delivered almost nothing. More of such stories will follow, guaranteed.
Warning to investors: Stay away from over-promising cannabis entre-preneurs offering “miracle cures.”. They can’t and they won’t — and people who gets suckered into these ventures will lose their money. (No sympathy from me!)
Can a large cannabis company have a mid-life crisis?
Absolutely, and I’ll paint a composite picture based on real companies.
On the surface, Company X looks OK: Public in Canada, though with a weak trading volume; $2 - $3 price range, with eight-figure market cap. The company is a profitable grower, and exploring its medical possibilities.
What’s wrong with this picture? The company is actually going through a mid-life crisis and is drifting, buoyed only by Canada’s cannabis boom. And the trouble is, the company has no MISSION. Where’s the Next Big Thing? As of now, it doesn’t exist, and investors can spot this. And you know what else? If the company doesn’t deal with this MLC fairly quickly — this year — its stock price will seriously sink as the Canadian cannabis boom starts to fade.
And you know why? In two words: No future — because speculative investors are mostly future junkies. They only want to know “what’s next?”
So what IS the Next Big Thing?
Here’s the commonality: Startup entrepreneurs need funding to help them grow, while investors are looking for young ventures at the start of a growth cycle. That’s why every startup needs to entice investors with a rosy future — over-and-above how well the company may currently be doing, if it’s operational. And this is done in one of two ways.
First, the cannabis company doesn’t really know where it’s heading, but needs to do something — so they’ll throw enough s**t against the wall and hope that something sticks. Questionable tactic, because it usually shows that management is basically clueless and floundering. On the other hand, it’s better than nothing and some investors will fall for this line.
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