Despite marijuana’s federally-illegal status, the state-legal cannabis industry continues to expand and promises lucrative growth opportunities for the savvy investor.
As a marijuana business owner though, it’s hard to know where to begin when seeking funding to take your company to the next level. The industry remains fraught with risk that may be too much for many traditional investors, but there are others out there with more than just profits on their mind who are willing to back sound, values-driven cannabusinesses.
What is a cannabis angel investor?
A cannabis angel investor has significant access to capital and is willing to use it to invest in marijuana businesses. They also, typically, have an extensive network in the cannabis space and are passionate about the social and medical benefits of legal marijuana.
Such investors have been a driving force behind tech companies in Silicon Valley but, with that market becoming increasingly saturated, more and more are now turning their attention to the cannabis industry and funding research into its therapeutic applications.
A cannabis angel investor’s focus on social justice and medical research is what sets them apart from traditional venture capitalists, who tend to only be concerned with a company’s bottom line.
This doesn’t mean turning a profit isn’t important. As with any investor pitch, you need to demonstrate able leadership and a solid business plan, as well as the values and passion behind your business that will help it stand out from the competition.
How to find an angel investor for your cannabusiness?
The first step in finding a cannabis angel investor is determining what you ultimately want to achieve with your marijuana business.
Are you a new recreational dispensary with ambitions to franchise? Or are you more focused on offering a unique selling point that other cannabis retailers don’t provide?
Are you at the forefront of cutting edge research into cannabinoids but are limited by your finances? Or are you a cannabis cultivator trying out innovative, sustainable grow techniques?
Your answers will determine the type of cannabis angel investor you should approach, but where to find them?
Though it’s growing, the marijuana industry remains relatively small and dispersed so finding an angel investor is no easy task.
The surest approach is to attend cannabis industry conferences and similar networking events. This is the best way to meet other cannabis entrepreneurs and investors.
Fortunately, with the Covid-19 pandemic partially subsiding, in-person cannabis industry events are back up and running with many scheduled for what’s left of 2022.
Don’t blindly go to whichever seems most convenient though. Consider the type of cannabis angel investor in attendance, and do your research beforehand to get the most out of your event pass.
Once you’re in a room with cannabis angel investors and are confident with your business plan, listen to what they want out of the partnership. Most often, they’re not interested in exerting control over the running of the company but they will value transparency and honesty, so don’t make outlandish claims about the level of returns they can expect on their investment.
Rather, be straight with the fundamentals of your cannabusiness, but engage with them on an emotional level about the value you want your company to bring to society.