How do investors vet cannabis businesses before investing?
Short answer: Michael says deal flow is part of diligence itself. Seeing enough opportunities gives his team a basis to distinguish a standout from an average pitch.
On the Family Office Podcast, Richard C. Wilson interviews Michael, CEO of Cannapreneur Partners, about evaluating cannabis businesses.
Michael on operator track records
Michael said Cannapreneur Partners looks for a consistent, compelling record of success from leaders and key operators. He called those entrepreneurs the outliers his firm wants to partner with. (at 16:46)
Michael on team alignment
Michael said he checks whether leaders agree on the company's mission and what success looks like. He also looks for candid communication, tough decisions, and full commitment to the industry. (at 17:42)
Michael on valuation talks
Michael said many operators couldn't explain how they reached a valuation. His team asks how they got there, shares another perspective, and tries to reach a more balanced view through collaborative discussion. (at 23:19)
Michael on deal flow
Michael said Cannapreneur Partners' analytics showed 30 to 40 cannabis deals a month, with a goal of 100. He said the longer-term aim was to find one standout deal each month. (at 27:28)
"We will scour the world for the 1% entrepreneurial operator outliers to actually partner with"
From Richard's exclusive Billionaires.com interviews
Lessons from Richard C. Wilson's one-on-one interviews, as published on each interview page.
- Michael Lee-Chin: Invest in what people will do next. He saw that his generation would shift from consuming to saving and investing. He chose wealth management companies over banks and insurers to avoid underwriting losses.
- Tom Rosen: Buy when the market is down. Tom bought a lot when the stock market almost collapsed and made a substantial profit. In the year that followed, oil and gas surged. So did some tech.
- Tim Draper: Teach children about money early. Give them a small allowance and have them earn and invest money in the stock market. Over time they learn to ask sharp questions about how a business works.
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Frequently asked questions
How do investors vet cannabis businesses before investing?
Michael says deal flow is part of diligence itself. Seeing enough opportunities gives his team a basis to distinguish a standout from an average pitch.
How quickly should cannabis diligence move?
Michael said to keep the diligence steps intact but compress the calendar. If the work takes eight hours, get those hours in and try to finish in two to three weeks rather than six (7:54).
What did Michael want to offer cannabis operators?
Michael told Richard he wanted to find strong operator entrepreneurs, bring funding from himself and investors, and offer business strategy and leadership help (14:55).
Sources
Quotes are copied from the video captions and checked against the transcript. Timestamps link to the moment in the video. General information only, not legal, tax or investment advice.