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Are you looking to grow your business? Is access to capital your primary challenge for growth?
Obtaining investors can be an intimidating process for any business. But those in the cannabis industry, face a unique set of challenges.
Our guest today is Alex Gastevich, Vice President of V Gastevich Investments. Alex gives examples of successful companies in the VGI portfolio, what excites him in the industry and shares advice for entrepreneurs looking to secure capital.
Cannabis Investing in Chicago
VGI is a Chicago based firm with a history of providing private equity in real estate sector. They’ve been investing since 2014 in the cannabis industry. Chicago is a leader in the industry. Five of the ten largest cannabis companies are in Chicago. They started investing with a focus on MSOs, Multi-State Operators. As companies entered the state and applied for licenses, they invested in the early players. Alex is attracted to limited license states and creating a moat around their investments.
Cannabis a passion project. He and his brothers are long time users and they see the value cannabis can bring to the world.
Some example investments mentioned include:
- GTI – Green Thumb – this was their first investment
- Leaftrade – B2B platform that helps cultivators and retailers to connect
- iHeartJane – eCommerce platform for show users where products are available at retail stores
Investors bring capital but also a network of partners who they know across a wide spectrum of the industry.
Future Cannabis Wave
We spoke a length about emerging cannabis products eg. cannabis drinks. edibles, The first wave was the MSOs. The second the tech companies. What’s the third wave? The ancillary side. Some examples include:
- agricultural seed technologies,
- nurseries,
- manufacturing,
- marketing, etc…
Currently MSOs do everything, the future is outsourcing work not part of the business core competency.
Take Action Advice
Lending has opened up more options in the form of state chartered banks with better interest rates. Look there and see if there is a solution for scaling your business. Secondly, be realistic with your financial projections. How can you know if you’re on track? Network with others in the industry. If you do decide to look for an investor, shop. All have different interests and agendas. Find one that matches your mission. Later investors are going to be smaller and have less experience. They provide opportunity.
How To Connect with Alex Gastevich
To connect with Alex and V Gastevich Investments:
- This is V Gastevich Investments
- This is Alex Gastevich on LinkedIn
The Cannabis Advocate Podcast
The Cannabis Advocate podcast advocates for businesses in the cannabis industry and the explores the unique challenges they face. Despite hurdles in legislation, regulation, and culture, there are tremendous opportunities for growers, producers and sellers of cannabis products. Many of these issues are unique to the cannabis industry, This podcast speaks to these common concerns and shares stories of success.
To subscribe to the podcast, go here. If you have a question or comment, go here. We would love to hear from you!
