Tue. Nov 12th, 2019

(Ep. #14) Steve Blank Hosts Louis Han, Director of Deal Flow at the Arcview Investor Network (Audio and Transcript)

On this edition of The Cannabis Today Podcast, Steve Blank hosts Louis Han- Director of Deal Flow at The Arcview Investor Network.

On this edition of The Cannabis Today Podcast, Steve Blank hosts Louis Han- Director of Deal Flow at The Arcview Investor Network.

The Arcview Investor Network consists of more than 600 investor members who have invested more than $240 million into the Cannabis space. Louis works directly with the companies trying to raise capital. He has seen thousands of pitches from companies of all shapes and sizes – startups, growth stage, plant-touching, ancillary, first time founders, serial entrepreneurs, Fortune 500 execs – you name it.

Full Transcript:

Hey everyone, thanks for listening to The Cannabis Today Podcast. I’m Steve Blank. On this edition of the podcast, I’m joined by Louis Han, the Director of Deal Flow at the Arcview Investor Network. The Arcview Investor Network consists of more than 600 accredited investors who have invested more than $240 million into the commercial cannabis industry. As Director of Deal Flow, Louis’ role is to work with all of the companies who are trying to raise capital from the Arcview Investor Network. He has seen thousands of pitches from companies of all shapes and sizes, startups, growth stage, plant touching, ancillary, first time founders, serial entrepreneurs, Fortune 500 execs, you name it. Without further ado, Louis Han.

Steve Blank: I think you can see me also, but I’m actively monitoring what the headphones this time. How’s your week treating you so far?

Louis Han:     Week’s been pretty good. It’s Wednesday [unintelligible 00:00:48] day, yeah pretty good. We’re lining out folks for Vancouver and had a lot of good conversations it looks so far, so yeah.

Steve Blank: I was just looking further into Vancouver. By all means, I want to ask about that. I don’t want to ask about how the last event went and cover some of the things that we’ve obviously chatted about before but I don’t want to go too deep without given that the surface level first, so we’ll definitely start with intros to yourself and to the Arcview Group first as well. And yeah, we can start there if it’s all right with you just by giving yourself an opportunity to introduce yourself to those who aren’t familiar.

Louis Han:     For sure, for sure. Thanks Steve. I love being on the podcast here. The Arcview Group, we’re an investor network for the cannabis industry. We’ve been at this for about nine years and as an investor network, our 650 investor members have placed more than $240 million in to cannabis companies ranging from brands and cultivations, to dispensaries and hemp, all the way to hardware, SAS, clean tech. If it has to do with cannabis, we’ll take a look at it.

And my role as the Director of Deal Flow which I’ve been for the last three years is to work with all the companies who are trying to raise capital from this investor network. I regularly review our pitch decks and summaries from fundraising cannabis companies. I’ve seen hundreds of those so far, thousands of conversations from great people who are working hard in this space.

Steve Blank: Awesome! A couple of thoughts raced through my mind as you were talking about Arcview in general and one is that I could’ve sworn the last time I checked the website, the stats were something like 230 million investor or at least that’s what was on the website. So, I say that just to give context to– We’re not throwing around numbers here. It sounds like that number is actively ticking up every time I peek back, so by all means it sounds like you guys are moving and shaking for sure.

Louis Han:     Oh, for sure. Sometimes, you get the news faster than we can update our website

. Even just since our last investor meeting in Santa Monica few weeks ago, I personally just [unintelligible 00:03:15] that I’ve had with companies that fundraise through there. I know about at least 900K if not a million dollars worth of investment that came through just out of that meeting alone. But the companies that I work with, so things definitely move quickly.

Steve Blank: That’s awesome. How long have you been with the Arcview Group, whether it was in that role or all together?

Louis Han:     All together, I’d say about three and a half years if you want to be technical about it. I’ve been in the industry for a year beyond that as an entrepreneur myself but of course had a longstanding interest in this space even prior to that.

Steve Blank: Cool. Can we expand on that, maybe talk a little bit more about that? Your experience with the cannabis industry and even outside of that prior to the Arcview Group and more.

Louis Han:     Well, for sure, for sure. This can be a real long story but I’ll try to make it quick

. In my last year of law school, I was sitting there in 2014 just thinking about what to do next after graduating. If you don’t know too much about the legal field career wise, it’s a great space but it’s not exactly as quickly growing as the cannabis industry was. 2014 was also the year that Colorado and Washington and Alaska made their announcement about going recreational, so that was really exciting.

So, here I am sitting in law school thinking well what does California’s laws look like. I know how to read the law so to speak after all. Took a look at that and those are still the Props 215 SP for 20 days when the regulations were more around a collective bottle, so lower barrier to entry than what you have now. I decided well, instead of being a lawyer, why don’t I become a cannabis entrepreneur [chuckles]. I graduated 2014 for that summer, kick start my business as a delivery base collective there right around the Bay Area, good at 300 patients and operated that for a year pretty with modest success but still definitely a great learning experience and everything.

Also have to make a shout out to Professor Geralyn Allman from [unintelligible 00:05:37] University Law School where I got my law degree because he also took me on this great field trip to a collective called the Women’s Alliance for Medical Marijuana in Santa Cruz and a judge described it as the gold standard for collectives and our professor, Professor Allman defended them in a federal lawsuit when they were rated by the feds which they won. Given the judge called it the gold standard.

That was also a very motivating, inspirational experience for me to get into this space because you had terminally ill patients who were spending their time left to work on this campus farm and volunteer their time and help other patients in need. From there on, I haven’t looked back.

Steve Blank: Would you say that that field trip was a catalyst for you or was that something that you were already motivated toward and that kind of maybe just accelerated the process or did that kind of flip the switch so to speak?

Louis Han:     I’ve had a longstanding interest in cannabis. I’ve seen at least personally and through my own friend who has the power of like cannabis can do to turn around people’s lives. I’ve also read a lot of fascinating books like Mr. Nice by Howard Marks. That was a great biographical piece. But that experience at the Women’s Alliance for Medical Marijuana, that was unique because in this time even in 2014 just five years ago, people were very skittish about showing you what their operation looked like even if it was still medically legal in California.

I mean people were still very, very reluctant to show you how exactly everything looked under the hood. And so that was my first real experience that show that wow, people can actually do this right, good people can do this with the right motivations. Also, that was really inspirational for me to just to see what happened behind the scenes.

Steve Blank: Awesome. Kind of jumping around a little bit and will definitely make sure to hit everything but I think you’re just bringing up a lot of interesting points that are common threads when I talk to industry professionals and entrepreneurs of all different ancillaries and levels. And one of the things you mentioned was the reluctance to disclose what’s going on in the back of the shop or underneath the hood as you put it.

So given your role with the Arcview Group and the position that you have and just the perspective that that gives you on the different ancillaries and businesses and business owners and how they operate, how much so would you say that that’s still the current state of the industry in terms of keeping secret your processes or your recipes or what have you?

Louis Han:     Yes. I’m in a blessed position to be talking with entrepreneurs who are coming to us because they need capital of some sort and so I oftentimes get to get into really interesting in-depth conversations about people’s businesses which they may not just do with the stranger down the street.

But to answer your question, the tone has a definite changed. 2014, when those first states legalized and went recreational, went adult use, people were still skittish about that, right [unintelligible 00:09:30] federally illegal, this is a new experiment, the states are defining the feds, what’s going to happen, are we going to see a crackdown, very much still on everyone’s minds. Even back then when I was in 2015 when I started with Arcview, some entrepreneurs were still tentative about telling too much at least in our initial conversations especially if they’re a plant touching. Like they were a dispensary or cultivation or something along those lines.

Nowadays though, it’s practically given. I mean you have so many countries that have legalized at the federal level, news states are coming online all the time, so I don’t see as much of that tentativeness or that reluctance to share at least initial information.

Steve Blank: For sure. I guess let me give context to that to not so much with fear of the legal ramifications potentially and having that prevent people from being open but more so as it relates to the idea of this process or this concept or this idea is very unique to me. In other words, the cannabis industry and a lot of its components are not as other industries would describe as open source as others. We’re not as willing to share with each other how we’ve come to achieve said status or product or service or whatever it is.

So to some extent when it comes to differentiating and establishing a business and a brand, I guess it’s where some things should be undisclosed but I guess particularly within cannabis in my experience and in talking to a lot of industry professionals. They just talk about how different processors and people that establish technology and things like that can be very secretive more so in terms of protecting their business or protecting the idea and not so much in fear of whatever legal ramifications come as a result of that.

That context given, do you see as much of that in your position or by the time people get to you, do they realize you know what, it’s time for me to put all of the details out there because this is my opportunity to really disclose with investors? Does that kind of make more sense in terms of the way I intended it?

Louis Han:     No, that does. Thank you very much, Steve for clarifying. I get that sometimes and generally speaking, I’d say about 90 percent of my conversations, people are pretty forthright about their financials, what they see their competitive edge is. But in 10 percent of conversations, some people do want to keep their technology or their secrets, trade secrets close to the best.

Totally understand that and rightly so. And some people are even reluctant to share certain names of their master cultivator or their processing expert and things like that because finding expert talent in this space as large as this industry is to become, there’s still only so many experts. People get psyched for talent all the time, so I understand that has a test to share details there. Some people wouldn’t share anything. Not even their deck, not even a general outline or other business or anything without an NDA. To those, I mean that’s– I totally understand where that comes from and understand why they want to have an NDA in place.

And for sure, you should have NDAs in place in general but just to have an initial conversation or just at least get to know each other at the surface level. I think an NDA shouldn’t get in the way of that. But no generally speaking, people are pretty forthright about their business models, about who’s [unintelligible 00:13:30] them, what their milestones has been and what products they made, things like that, and actually I find comments– Again, this might be a function of my position but I’ve done comments from folks who go to Arcview conferences for example and they’re supposedly surprise about how open everyone is whether you’re looking for funding, deploying capital or just looking for a few partners or what have you. People often come to see the cannabis industry as very different space, pleasantly so compared to other more established industries.

Steve Blank: Absolutely, well said. So, we kind of just created a segue for it there and we sort of wants over what the Arcview Group is and does early in the podcast but let’s dive a little deeper in that if you would. Can you expand on exactly what Arcview Group is and does? We’ll talk more about event schedule and things like that.

Louis Han:     For sure, for sure. So, I mentioned that we’re an investor network and we work with 600 investor members. We’re all signed up with Arcview because they’re looking to place capital into the cannabis space but I should also put a plug in for the market research side of the business. That’s also a very healthy part of our business as well. Most aside as source of market research in the space. We’ve been at that for several years as well.

About how we operate, our whole job is to be a bridge and a platform between those two audiences; the investors and the network and companies want to raise capital from this network. The way we do that is through investor meetings, private free day investor meetings that we host all up and down north and south America, and sometimes, we even go beyond that. Like for example, we were in Hong Kong last year. But these are gathering places for the investors in our network and certain companies that we choose to work with in order to do real serious business with each other. This has been part of our bread and butter over the last nine years and has been growing stronger.

One of the main drivers of our investment activity. Something, that special magic that you can only get by looking someone at the eye and being able to shake their hand. So that’s one avenue and we’ll be in Vancouver Canada at the end of April, April 23rd to 25th. We’re actually headed to Columbia, going to South America for the first time, May 2nd. We’ll be in Chicago in July and we’ll have a couple of other investor meetings on the calendar as well. These events, they only make up about 20 days or so of our calendar.

The rest of our time, all by interactions happen online and so, we have a Deal Flow platform where companies can get a profile about themselves for investors to discover you on there and we also host conference calls. Kind of like where you’d have to present and make your case to a committee of investors as well as a subset of the rest of the investor network. Get to answer questions and all the kinds of stuff too.

Steve Blank: Wow! And so, the next event is Vancouver you said, right?

Louis Han:     Vancouver BC, April 23rd to 25th.

Steve Blank: Nice. Where was the last event?

Louis Han:     The last one was in Santa Monica and that was February 5th through 7th just about a month ago. And we were in Vegas before that. Right before [unintelligible 00:16:50] in Vegas.

Steve Blank: Nice. Any standout moments or highlights or things that come to mind from the very last?

Louis Han:     Yeah, I mean the very last one was really interesting for us because [unintelligible 00:17:04] has also done a great job of gathering industry folks all for one week in Vegas. And historically for years now about four or five years if I remember correctly, we have been hosting our largest event ever of the year right before theirs. And so, investors come out to our meeting and I gain a lot of education and see a lot of opportunities there and then segue right into [unintelligible 00:17:32] for the rest of the week.

But this most recent one that we had in Santa Monica actually was our largest one ever. That has never happened where we had more people at our other events beyond maybe so. I think that really speaks to not just the great team that I work with here, but you put in tireless hours to make these events happen, make these things happened but also just the growing pace of the space. Some highlights there, we had representatives from County [00:18:03] Growth and County Rivers and Venture Arm and we have folks from Navy Capital,

, big brands like Cocoa tea, and Moxie and of course our partners over at the BDS all gather together to share insights into the industry.

One of our best panels was the science workshops/panel that we had with great scientists like researchers, like Dr. [unintelligible 00:18:28] and Dr. Jeff Chen and they were just sharing what the state of research was on medical cannabis and that was one of our if not the best attended part of our investor meeting. So just between not only serious capital deployers but also leaders. That went really really well for us

Steve Blank: Awesome! What are you most looking forward to or what are some of the key components, some of the things that you’re most excited about in Vancouver?

Louis Han:     In Vancouver, yes, so this will be our third time going to Canada, second time going to Vancouver. We’ve been to Toronto once before and really just excited to see what the temperature of the Canadian market is. Even though they’re our family neighbors to the north, I mean they’re miles ahead. Maybe I should say kilometers ahead [laughs].

Steve Blank: Right.

Louis Han:     That because they’re federally legal. A lot of the Canadian companies are on the stock market, on major exchanges like the NYSE and things like that and they’re just in some ways a very developed industry there. And so, we’re really excited to see what new opportunities come out of Canada and what opportunities we can also bring from the US side to Canada as well as see what Canadian opportunities too might be of interest to the more US based investors in our network.

Steve Blank: Awesome. Before it escapes me again, there’s been a couple of questions that just as we’ve gotten started today and even just last minute this morning keep coming to mind and I wanted to make sure to ask you. What are some of the most common things that prevent people from achieving the goals that they wish when presenting their businesses and their plans to the Arcview Group? In other words, what are some of the most common things that people can do to ensure that they get where they’re trying to go with the Arcview Group and investors as a whole? What are some of the most common pitfalls that you see?

Louis Han:     Right, right, for sure. I could just highlight a couple of points there. One of them is knowing your audience. Sometimes, it doesn’t happen often but sometimes, I get someone who comes to us and wants to raise capital. I don’t realize that they’re preaching to the choir here.

I mean all of our investors are signing up with us because as I mentioned, they’re actively looking to put capital into the cannabis space. When you come to us, I mean you don’t need to talk about the drug potential of cannabis market. You don’t need to talk about how this is just a socially right thing to do from just perspective because of the unfair cannabis laws. No, you don’t need to talk about the medical potential.

Again, preaching to the choir here. Oftentimes, you can get past that and really start talking about why your company, why your business is the right investment opportunity out of all the others along the same vein of understanding your audience. The kinds of conversations and that you have and want to motivate and into the investor is going to be very different than a institutional fund family office from VC, right. And the level of detail sophistication is also going to vary as well.

So, just like kind of how like if you’ve ever applied for a job and sat in for an interview. You want to customize your resume and that interview for that potential employer. Same thing with raising capital. You’ll want to customize and tailor your pitch deck, your pitch itself, conversations that you have with depending on who you’re speaking to, so knowing your audience and having the right tools equipped in your conversational toolkit to be able to navigate those kinds of conversations. Other things, evaluations are a very interesting thing to look at in the space.

It’s definitely a new field and definitely a new (excuse me) an art world in the science especially when it comes to startups. Traditional evaluation methods might come to a number that might not be common for the startup early stage space. Yes, there’s a lot of market potential. Yes, there’s a lot of great milestones that you could achieve in the future but a lot of investors here take an asset-based approach. Meaning what do you have now, what do you have going on for you now and we determine a value based on that.

There isn’t exactly one single right magic formula for that and there are some other investment vehicles that you could use to sort of check that question down the road. Things like convertible notes for example. But yeah, that’s one thing that I see be a sticking point with both deployers and capital raisers.

Steve Blank: Awesome points. It sounds like with regard to the presentation itself, maybe you get a lot of presentations. I totally understand the preaching to the choir aspect and I think that’s while it sounds maybe to you or to me. Like oh well yeah of course, you wouldn’t preach that to this particular choir. I can also appreciate how as an owner, operator, entrepreneur, those pieces of insight and context add to the value of your presentation but at the same time, I can totally appreciate how on your end you’re like okay, we’re here for that very reason.

You don’t have to spend your time and energy and bandwidth breaking down the potential of the industry as much as understanding your product or service and differentiating and the potential for that brand itself, so I think that’s cool. Anything else come to mind in terms of common pitfalls?

Louis Han:     Well, one caveat that I’ll say to the whole preaching to the choir aspect is I’m not going to sit here and say that we know everything.

Steve Blank: For sure.

Louis Han:     There is more niche aspects. Like for example, let’s say that you’re starting some sort of unique extraction company and there’s a lot of market research out there on the industry itself and the market but nothing specific as to the growth space and the market data on extraction, in Illinois for example. Well, then if you do have access to that kind of data, then that would be very useful to share with investors. That kind of knowledge isn’t publicly available. But again, we’re talking about very broad level things [crosstalk 00:25:32].

Steve Blank: Sure, sure.

Louis Han:     -wouldn’t need to be repeated.

Steve Blank: And that’s absolutely worth clarifying. I appreciate you doing so.

Louis Han:     This can be a whole other conversation. You’re asking about other sort of pitfalls, mistakes, things that people should mention in their conversations with investors?

Steve Blank: Right.

Louis Han:     Right, right, yeah. One of the things too is to highlight the traction and milestones that you’ve achieved in the company. A lot of companies and entrepreneurs are good about articulating that. Sometimes though, I’ll meet someone. Sometimes, they’re more technically minded, really want to get into the details of how the technology of your product works which is also really fascinating to know about.

But what’s also important is to talk about what milestones that you’ve achieved, what stakes in the ground, what sales that you made, what relationships you form, what grievance you have in place, that sort of thing to really get the business going. Ideas are great, execution is everything though. So knowing that you’ve actually put in serious steps in order to really bring this concept to life. That is also very useful to share.

Steve Blank: Awesome! Yeah, it sounds like maybe you’ve got a podcast to start yourself and it sounds like that’s one that you can deep dive and maybe make entire episodes out of which by all means I’ll be happy to help you try and achieve some day, so we’ll leave that one where it is.

Louis Han:     Right.

Steve Blank: Let’s go back to the Arcview Group I guess specifically and some of your experiences with the trends that have shaped and continue to take shape within the industry. What are some of the trends that you are seeing most now and what are some of the things that you think are to be most trending in the future be it near or far?

Louis Han:     For sure, for sure. Of course, this being a new industry, lots of trends that are happening in the space. One of the more obvious ones would be [unintelligible 00:27:47] CBD with the passing of the farm bill. There isn’t a day that doesn’t go that I’m not hearing something about someone doing something in CBD.

Steve Blank: Sure.

Louis Han:     Especially with the passing of the farm bill. And so, that’s an exciting new trend and I’m really excited to see it was active. Also seeing some developments on the cannabis research front. That’s our particular interest of mine. Right now is sort of given almost of how you can find products on the shelves out there that will say that they can target experiences.

This is our happy pattern, this is our relaxed pattern, things like that. That seems to be the case even just four or five years ago. Remember being in deep conversation with this folk saying no, no, no, no, no, it’s all about trainings, these training. Genetics are important but people’s abilities to tease out that noise and specify how they interact with their own end it seems and how we can really tailor those experiences not just from an adult use perspective but also from a medical perspective. If I recall a conversation that I had with John Khan from [unintelligible 00:28:58] Pharmaceuticals. One of the panelists that was in Santa Monica with us about a month ago. And he was sharing the story with me on one of our calls about how he was taking THCV for weight loss.

He was able to specifically extract that out. Didn’t smoke cannabis or– I mean he smoked but he just was taking that and that actually led to a lot of weight loss. It didn’t really change his diet, didn’t really change his exercise habits. It just suppressed his appetite and he gained a lot of health benefits from that. And that’s just anecdotal evidence or a story.

Steve Blank: Wow!

Louis Han:     But stories like that though are motivating for me and actually encourages me to just keep up with the science and see what else can be developed out of cannabis because it’s over a hundred [unintelligible 00:29:52], right. Who knows what the potential is there?

Steve Blank: That’s wild. That is absolutely the first time I’ve heard of the THCV weight loss scenario. That’s incredible.

Louis Han:     It was really interesting to hear that.

Steve Blank: Yeah, awesome to look further into that one, let’s talk about the folks that approach Arcview and some of the entrepreneurs that are considering doing so. Right now, which kind of companies– If you can narrow it down at all in that capacity. Which sorts of companies are doing well with Arcview Group?

Louis Han:     Right, well, we’re in a really good position because we serve such a broad range of investors. I mentioned VCs and founding offices and that sort of thing. We also serve a good number of into investors as well and some people are specifically just into plant touching companies, dispensaries, brands, etcetera. Some of them are more interested on the ancillary sides, so [unintelligible 00:31:00]. That sort of thing. And so, conceptually, when it comes to the idea, that doesn’t really quite matters as much.

What matters more is things like traction, the team and the terms, what we call the 3Ts. As we do very much look at the team that’s running the business, we like to see folks who have experience in the vertical that they’re in not just cannabis but for example if you’re starting some sort of software or app type of company, then you have an engineer on your team right [laughs] or software engineer. And so that but cannabis industry experience too.

I’ve often seem senior executives from Fortune 500 companies or serial entrepreneurs and things like that who think that they could just copy and paste the same strategy that made them successful in their previous careers or ventures and think that they can deploy that right into the cannabis space. And they’re realize this is a much more regulated industry with a lot more red tape than they initially realize, and then they don’t find success that they’re looking for. So having someone who understands the cannabis landscape from a regulatory perspective, from a cultural perspective, from consumer perspective. That’s important as well.

Not just startup experience, even if it’s not necessarily in cannabis. Having gone through the pains and having battle scars to prove that you’ve been through it once or twice if not more as an entrepreneur. That’s also really encouraging to see on the team. I mention traction, this goes again to my earlier point about milestones, showing that you’ve actually put some stakes in the ground, have actually achieved milestones to really bring this company life. It’s all about risk.

It’s great to talk about really interesting ideas and recompensation but it’s all about execution and investors are going to be more inclined to take a closer look at your business if there is something real and tangible that you’ve put together and more than just a business plan, more than just a pitch tag. Going out there actually making sales, having a real product, that sort of thing. And the last thing is terms. Leasing the right amount of capital based on where you are to do the right mechanism whether it’s to giving the equity [unintelligible 00:33:21], all the terms that surround that. That’s all an important aspect to it as well.

Steve Blank: Awesome. On the opposite side of the operation as an investor, where we just kind of spoke to the operators, entrepreneurs potentially listening to the podcast. For investors that are considering, the cannabis space. One, is there room as an investor to join or be a part of the Arcview Group still, and if so what does that look like and what kind of investors are part of the Arcview Group or do well there?

Louis Han:     For sure, so we only work with what’s called an accredited investor and that’s a term that’s defined by the FCC and that means– You can Google this as well. But an accredited investor is someone that has a net worth of a million dollars or more or has been making $200,000 a year for the last two years or $300,000 a year if you’re married. And that million dollar network excludes the value of your primary home and your primary residence.

There are other ways like for example, you organize yourself as a fund or whatever and then can meet that definition. But generally speaking, those are the main ways to meet that definition and those are for legal reasons. So, we only work with investors who are accredited. And beyond that, we look for people who are seriously interested in the cannabis space. Yes, Arcview is a great place to learn, for sure.

But we’re also looking for folks who are interested in capital, finding good opportunities, as far as more and more especially and nowadays, operators themselves, companies themselves who are looking to make acquisitions in the space, who are looking to acquire folks that might compliment their business or might be a smaller player in a different market that this company hasn’t entered into yet and want to get a kickstarter and want to just find you out or maybe form a partnership.

So, we’re definitely open to folks who fall into those packets. And yes, there is space to join the investor network. We are always growing. Even when I join, I think we were only at 300 investor members or so when I joined three years ago. Now, we’re at 650. Again, due to the [inaudible 00:35:48] accomplishments and the tireless efforts of our team. Can’t say that I’m doing it single handedly by no means.

Steve Blank: I can appreciate that. Definitely props, props to the team for sure all day long. Let’s go back to Vancouver. I know we’ve kind of talked a little bit about Arcview and some of the inner workings. If somebody is in the area or going to be in the area or now willing to go out of their way to get to the area when the time comes. Where can we learn more about the Arcview investor network as a whole and specifically your events?

Louis Han:     For sure. The best place to get started is our website, arcviewgroup.com and there you’ll find links to events, examples of investors in our network, examples of companies that we funded through the network. So that’s a great place to start. We also have a contact page as well or are people who just want to have a conversation and learn more, referenced this podcast and I’m sure that we could see if there’s a way to work together whether you’re an investor or a company that’s looking for capital and yeah, the website’s a great place to start.

Steve Blank: Awesome. So, Arcview investor events aside, what was the last cannabis industry event or exhibition, big or small, near or far that you attended?

Louis Han:     That I attended, let’s see.

Steve Blank: You know just a small networking event or it could have been 7,000 person, what have you.

Louis Han:     Yeah, yeah, no, I mean the 7000-person thing is going to be something like [unintelligible 00:37:33] for example. I am really looking forward to liking one of the biggest but I am very much looking forward to speaking on a panel at the [unintelligible 00:37:40] expo in Denver to have a daily business expo that they’re having there Here’s something like over 200 exhibitors are signed up. I’ll be on a panel to talk about investment trends in the hemp space. That will be in March. I’m really looking forward to that.

But also, I was also attending a private tasting event with the truffle man. I don’t know if you’ve ever heard of him. But he’s kind of a cult legend in the San Francisco Bay area. This guy has spent 12 years serving cannabis infused truffles, truffle chocolate in San Francisco in a park called the Lord’s Park which is infamous for as a gathering place for cannabis friendly people [laughs]. And he’s just really built this great brand around himself even before this industry was an industry really and so bunch of practice event. He’s going with jet and he’s raising capital on. That was really a nice intimate experience to be a part of.

Steve Blank: How were the truffles?

Louis Han:     They’re delicious, absolutely delicious


Steve Blank: What kind did you have?

Louis Han:     Well, the one that I had was like a salted, a chocolate one that had this like light dusting of chocolate on it as well. Had their non infused version and gave it to one of my foodie friends who’s not too in to the cannabis but loves food and deserts in general. So, it was a pretty good for him too.

Steve Blank: Nice, the truffle man. I’ll check him out, that sounds awesome. They just gave away a ton of truffles. I wonder if he was involved in any capacity. There was a lot of cannabis giveaways on the red carpet at the Oscars is my understanding and-

Louis Han:     Oh yes.

Steve Blank: -there was something like $20,000 worth of truffles given away in gift bags to 25 cannabis friendly actors, actresses, directors I guess.

Louis Han:     Yeah. And that wasn’t them although I did read about that as well. That was really really interesting to see cannabis friends making their way onto the red carpet, right?

Steve Blank: Yeah, absolutely and as it relates, hey, that’s happening big and small so that’s kind of overall– I didn’t get to see who produced that product or who sponsored those gift bags so to speak. So from a PR perspective on that level, I don’t know if it worked out the way they intended it to but I guess big picture, you’ve got examples like that, and then you’ve got these new partnerships with the company that just partnered with, Martha Stewart.

Steve Blank: Canopy, is canopy?

Louis Han:     Unless I’m mistaken–

Steve Blank: No, I’m not positive. You’re right too. I couldn’t recall.

Louis Han:     Yep.

Steve Blank: So, there’s like stuff like that. Let’s maybe pick your brain on influencer branding as it relates. There’s a lot of that and there’s a lot of that in all of the different ancillaries. Can you maybe speak to how aligning yourself? Now obviously, when you’re talking about a massive group like when you’re talking about a canopy, you’re not necessarily talking about people who are going to present themselves to the Arcview Group.

But are those who are looking for investors or not, maybe the potential adverse effects of being aligned with a personality like that who doesn’t necessarily have a relationship to the industry a so with canopies example, I think obviously they’re relying on a lot of her insights and experience and knowledge around the things that she’s knowledgeable of and not necessarily saying, hey Martha, how do we cultivate, [chuckles].

Louis Han:     [Laughs].

Steve Blank: But that said, what are some of the- I guess pros and cons all canopy and Martha aside that come with doing so? Because there’s a lot of brands that instead of investing in themselves so to speak or looking for an Arcview investor network to invest in their brand, would sooner take a bunch of capital and pay Snoop dog to do a 10-second video clip using their joint paper or whatever it is. What are your thoughts on that?

Louis Han:     Yeah, yeah. You know what? The invention of social media influencer marketing and just people’s access to information. Having a leader speak to you is a great way to develop a brand or one of the great ways to develop a brand. I’ve read the other day that one of the highest paid YouTube stars is a 6-year old, a 7-year old that does on boxing videos for other kids who are looking for toys. That is very much then and how I grew up and discovered the toys were just TV commercials and browsing through Toys R Us, right.

Steve Blank: You didn’t know– There was now influencer marketing?

Louis Han:     No, [laughs], no, exactly. I mean and yeah, I think that does speak to the power of having an influencer, a thought leader but it all depends on who you’re speaking to or who you want to target. Someone that’s going to resonate with Martha Stewart is going to be that kind of person. I mean I hear a lot of market research about how do you have the millennial professional woman who’s looking to find an alternative to class to unwind a day with.

You know that maybe someone or might be someone like our mothers who did grow up watching things like Martha Stewart TV shows and things like that and are now curious, now cannabis is legal, are now curious about okay, what are somewhat healthy ways to consume cannabis without it being overwhelming. Things like that. And if you have Snoop dog make a video for you too, I mean that’s going to also resonate to folks who listen to Snoop dog. So, it all depends.

Steve Blank: Absolutely. Yeah, it’s a to go Wild West out there as far as influence or marketing goes and then vice versa. You’ve got folks who aren’t necessarily partnering with cannabis brands but folks who are brands in and of themselves, music, artists and entertainers of different sorts that are establishing their own brands based on the strength of the brand that they already have which isn’t necessarily tied to the industry or quality of product but it’s about voice, it’s about exposure and that’s one of the things that definitely intrigues me along the way is how is it all going to shake out. There’s the people that are producing the highest level products and services but don’t necessarily make that play.

And then, there’s the people who white label something or whatever it is don’t necessarily have the most honest approach and then take advantage of influence you’re marking to leverage it to leverage attention and you’re off to the races. So that’s definitely something that I kind of keep an eye on is who’s putting in the work versus taking the quick and easy pill.

Louis Han:     Yeah, yeah. I totally understand what you mean. There are folks who just want to stay a little quieter, aren’t looking to build a brand and they just want to white label. Sometimes though, that’s a function of just the regulations that are put in place, the pace at which certain localities can even bring their regulations online or just there might be some other strategic reasons. Yeah, there might be other strategic reasons for that.

But for sure, I mean quality control and finding quality product to work with is a huge concern. Even right now in the hemp space, we’ve been at RTL over the course of nine years. I’ve seen all sorts of waxes and wanes of the various trends that have been hiked up in the space. And so, it’s really great to be bringing hemp and CBD to the masses nationally. We are also cautiously optimistic and that we’re going to make sure that any sort of supplier that you work with is from a reputable source, has been tested, things like that for commercializing any sort of CBD product.

Steve Blank: Absolutely. Well said and specifically with CBD. I couldn’t agree with you more in terms of the– and that goes with really all cannabis products. But I feel like the abundance of CBD labels and brands that come up absolutely beg the question, what is your source, how does this test, do you know who your source is, and all that stuff that you explained as well.

You mentioned a couple of events upcoming. The Arcview in Vancouver included. We talked a little bit about. That you and the Northeast region the last time we were on the phone. Anything catching your eye in the tri state or in the Northeast region, New Jersey, New York, Pennsylvania happenings out there? Obviously, the country’s developing and the legal landscape, is evolving in all states but generally in that region. Is there an eye out on that space?

Louis Han:     For sure. I mean we’re open to opportunities anywhere but there is a legal industry developing or have been developed and including places like New England and all up and down the East Coast. I mean yeah. I mean some of these states are taking a more conservative approach which totally understandable. Why they are doing that? They want to go out slow to have a different constituency than us liberal minded folks in California [chuckles]. But yes, so I see that’s– We’re keeping our eye on that for sure.

Steve Blank: We recently caught up with in New York, the cannabis World Congress and business expo and we’ll be out there recording and catching up with a lot of the guests and keynotes and really trying to catch up in that region, in my home region. Is that one that you’re familiar with? Have you seen that show, attended or is that something that your group has been to before?

Louis Han:     Yeah, now CWBC, [unintelligible 00:48:42] Business Congress. Yeah, just aligned to make sure I got that right.

Steve Blank: It’s a hard one. Yeah that’s why they made– I muffed a of  times. It’s CWCB Expo and they went ahead and said you know what, dammit all to hell, we’re just going to do Cannabis Means Business dot com. How does that sound? So yeah, CWCB but sorry, you’re saying.

Louis Han:     No, I was just saying that’s [unintelligible] into but we always appoint folks to these events. Like for example, I believe Deborah Johnson from her team and [unintelligible 00:49:18] from her team has been to the one in Boston last year by September I think. So definitely, we were always going to industry conferences. And I hear it’s a great event but I personally haven’t gone. I’d love to go.

Steve Blank: Well, you’re going to be in the midst of a lot of travels there. I forget what you said. I think early May is your first South American event if I remember correctly.

Louis Han:     Exactly, yes, South America, right. Let me see. I’m going to Denver next month, there’s Vancouver coming up in April. Vendors are just– Well, at least the Vancouver and the Columbian event in Bogota is our event but we’re always going to other industry conferences all the time.

Steve Blank: Nice. I’ll have to make it out in Denver and just be sure to get there and catch up with you in person, shake hands and-

Louis Han:     Well yeah, for sure.  

Steve Blank: -put a face to the name because you’ve been more than kind in joining the podcast and sharing your experiences and insights and full disclosure doing so a second time after I muffed up on the first recording so it’s been a pleasure to pick everybody’s brain on this program but I think you’ve got tremendous level of perspective from a higher level. Not necessarily a more advanced level but more of that umbrella overview of all of the different ancillaries and how it all comes together. And I think what you have to share with listeners regarding the potential as an investor and the potential as an operator entrepreneur looking for investments, expanding on some of the most common pitfalls while some of them may seem like they go without saying. Some of the most important insights often are the ones that should go without saying so. Anyway, I appreciate you.

Louis Han:     I very much appreciate the opportunity to be on Cannabis Today, Steve. Yeah, definitely appreciate the opportunity. Yeah, thank you for having me.

Steve Blank: Absolutely. We talked a little bit last time about it and I think some of the insights that you gave today as far as they apply to the podcast and this type of product or service or medium in this industry, I got a lot of insights on how to move forward myself with this program and again here with you today. Have you had your eyes on the podcast space at all or? I ask this more so from an investor’s space and I guess less as it relates specifically to cannabis.

But voice as a whole be it podcasting or be it the use and applications of smart home devices and smart speakers, your Amazon Alexa’s and your Google homes. I’m finding that 1) the audience is the demographic, the consumer for podcasts and smart speaker content is growing at a tremendous rate. The other thing that I found super intriguing was the relationship to the education, the affluence, the brand loyalty and the branding engagement of those who consume this kind of media is significantly higher in the US than in the rest of the population.

I don’t know if you knew those things going into this but I guess I just say that to say I am all over this space. Is it something that you or investors as a whole have your eyes on or to take it even a step back? Is the Arcview Group something that should have a podcast or an Alexa skill? Is that something that you guys have kicked around?

Louis Han:     Well, we’re all looking and exploring new opportunities for sure. But to answer your question about the podcast space and my general thoughts, I definitely knew that podcast were a growing space and same thing with things like Google home and Alexa and things like that also definitely when I said that’s a growing space, questions from an investor’s perspective it is how all– Like what the scale ability is like and what the returns are like.

From an investor’s perspective, they’re going to scratch their heads over okay, so. I mean it’s great that you have all these followers, you have all these sponsors and things like that but what’s the sort of end goal here, how’s this going to scale, and also their investors to be forthright about it. No reason to beat around the bush there and if they’re investing, they’re not looking to just have the capital sit in the same spot but to grow that right or turn on that investment. So, they’re going to scratch their heads over how any sort of podcast or listening device like a guru home [00:54:38] or what have you is going to get a return on that investment. More than just say having it sit in a mutual fund or in a bank account somewhere, right?

Steve Blank: Sure.

Louis Han:     So, I don’t know too much about those spaces from the ROI perspective. Mostly my head’s mostly in cannabis as you can imagine.

Steve Blank: Yeah, absolutely and as it relates to cannabis or not, I totally– That was absolutely what I was looking for and to give you an answer to that and saying like I’m not sure what the ROI is like. It’s something that’s still very much in the air with podcasting being so new and rapidly evolving in that what is an ad worth and things like questions like that are still very much arguably unanswered, so yeah.

Louis Han:     Right, yeah, yeah and you know that might be ways to scale a business without investing. I’ve heard people make lifestyle businesses for themselves with podcasting. Nothing crazy that I’ll end up on a stock exchange anywhere but something that they can make a healthy income from.

Steve Blank: Yeah, unless where they’re somebody that makes blog videos about Smurfs memorabilia and makes twice what I do annually by you know making their Smurf reviews or whatever it is. Forget it, we talked about a 6-year old making more than I am.

Louis Han:     [Laughs]. Right, there’s millionaire 6-year old that just reviews toys for other kids.

Steve Blank: Yeah. So by all means, I absolutely well said in that you don’t necessarily need an investor to bring your definition of happy to fruition, all things in balance obviously. And like you said may not be on the stock exchange but it may be enough to give you peace of mind and keep the bills paid and keep you happy.

Louis Han:     Yeah.

Steve Blank: So well said. What haven’t we got a chance to talk about today that you were hoping to dig into or anything that we kind of opened up the can of worms on that we didn’t get to fully put out on table?

Louis Han:     We talked a lot about the industry and what it takes to have a conversation with an investor. I’ll mention again that where you’re going to be in Vancouver Canada, April 23rd to 25th and Colombia as well. If you have an opportunity in those spaces or in those locations either as an investor or as a fund raising entrepreneur, happy to have a conversation with you all and you can reach out to us via our website and reference this podcast at cannabis today and then we can take things from there.

Steve Blank: Right. What was the domain? One more time, the website.

Louis Han:     Right, arcviewgroup.com. A-R-C-V-I-E-W-G-R-O-U-P DOT COM.

For more information on the Arcview Investor Network, visit arcviewgroup.com. Leave comments, feedback or join the podcast, visit Cannabis-Today.com As always, please rate, review, subscribe and share. I’m Steve Blank and thanks again for listening to the Cannabis Today Podcast.

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